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Value Investing: The Secret in Beating the Market 23 April 2014
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Soon Lim
April 23, 2014
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Value Investing: The Secret in Beating the Market 23 April 2014
Soon Lim
April 23, 2014
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Transcript
VALUE INVESTING The Secret in Beating the Market
Disclaimers This presentation is for educational purpose ONLY
14.13%
24.14%
Value Investing is … Price Value Price DIVERGENCE Time
Investment is an operation which requires thorough analysis, promises
a safety on principal and an adequate return. Operations not meeting these criteria are speculative.
INVEST SPECULATE TWO PATHS IN THE STOCK MARKET FIRSTLY…
Take a chance
On Sound Footing
Investing is about Owning a Business FIRSTLY… WHAT IS
INVESTING?
CAN BUY OR NOT?? FREQUENTLY ASKED QUESTION
CAPITAL AT RISK CAN BUY OR NOT?
Is it a GOOD Stock? Is it the RIGHT Time? TIMING RISK FAQ : “CAN BUY OR NOT”?
THE ULTIMATE GOAL MINIMIZE YOUR RISKS
6 CATEGORIES OF STOCKS 1. Investment Grade Stocks 2. Emerging
Grade Stocks 3. Cyclical Stocks 4. Turnaround Stocks 5. Sunset/Failing Stocks 6. Venture/Speculative Stocks LOW HIGH BUSINESS
Value Investing Criteria 1. Net Profit 2. Dividends • How
Often in a Year? • And When? 3. Cash Flow
DIVIDENDS And When? How many times a year? VALUE
INVESTING: IMPORTANT CRITERIA NET PROFIT CASH FLOW
Price Dividends Net Profit / Loss BUSINESS PERFORMANCE
VALUE INVESTING: FACTORS AFFECTING STOCK PRICE
Price Value
Price Time BUY SOME MORE BUY SOME SELL SELL SELL
ONLY APPLIES TO GOOD STOCKS VALUE INVESTING: STRATEGY TO REDUCE TIMING RISK
Some Differences
Contradiction # 1 Market is Efficient Market is inefficient
Contradiction # 2 Doing Your homework is useless Doing Your
homework is important
No Proper Tools X Insufficient Knowledge X
Contradiction # 3 Investing is Easy
Gambling is Easy
Getting Con is Easy
“Successful Investing isn’t rocket science it’s harder” Michael J. Moore,
portfolio manager
Contradiction # 4 Don’t Put All Your Eggs in one
Basket
No Eggs Thank You, Only Tennis Balls
Contradiction # 5 Market Correction is terrible
Contradiction # 5 Market Correction is a beautiful thing
Which Stocks are Eggs? Which Stocks are Tennis Balls?
Buying Tennis ball At Cheap Prices
THANK YOU