Value Investing 01 (May 08 - Dec 08)

[caseyc]

If Cash/Share is substantially higher than the Share price and if they are not going to burn a lot of existing cash, then you may wanna back up the truck slowly as there could also be some undisclosed forex losses, parent company going bankrupt etc..

Yes, I meant to say "Net Cash"/Share = (Cash - Liabilities)/Share

Just curious... Can u find many stocks with your criteria (Mkt cap < (Cash - Total Liabilities)) ?

I did a screen on the local mkt previously for such stocks, and while there were a few, I didn't find any that I felt comfortable investing. Usually, there's a reason why the share price is so depressed, till the non-cash assets are all for free & u still get back cold-hard cash for investing...

[winston]

No, not too many. I normally rely on the Analysts to do the leg-work. In times like these, the Analysts could be screaming but nobody would be buying. So I'm still reading the Analysts reports..

[la papillion]

From what i did, very little too, haha But that's ignoring the business side of things..which might not be wise.

[Cheng]

Another fundamental signal that investors should take note. Funds redemption is high, demand less than supply, thousands will have to close down like what happened in the previous crisis, nothing is new. That is when I'll start firing.

I don't have a huge capital to average down, I'm looking for my fat pitch with 100% margin of safety.

Definition of risk: Possibility of loss or injury.

[kennynah]

....I don't have a huge capital to average down, I'm looking for my fat pitch with 100% margin of safety.....

i hope to learn from you...how to achieve 100% margin of safety

[Cheng]

....I don't have a huge capital to average down, I'm looking for my fat pitch with 100% margin of safety.....

i hope to learn from you...how to achieve 100% margin of safety

That is when you buy a company for free. Like using S$1 to buy RMB$5. Some S-shares are trading below their net cash per share now and they are not losing money. Selling is very irrational.

[Cheng]

Erm...I don't want to sound too cocky or being misunderstood, so I'll explain further about why it's 100% margin of safety. Apologise for the uneasiness.

100% is only in quantitative terms like what I've given in the example earlier. It does not mean risk-free cause no investments are risk-free. It's something like Heads I win and Tails I do not lose much. It's just like exchanging cash for cash, with future earnings, inventories PPE etc thrown in for free. Provided that the management is not corrupt I hope. *crosses-fingers*

[fclim]

*Gulp* eh... for the record, I'm still not vested in any of them...

3Q-08 is coming up, dunno will be better or worse?
DBS 3Q-08 - to be announced on 7-Nov-08
OCBC 3Q-08 - to be announced on 5-Nov-08
UOB 3Q-08 - to be announced on 31-Oct-08

Prices as at 28-Oct, 12:53pm, from SGX website

Afer re-valuation surplus
Bank - Price - NAV - P/NAV
D.B.S - 9.12 - 12.78 - 0.71
OCBC - 4.63 - 6.40 - 0.72
U.O.B - 11.2 - 12.63 - 0.89

Before re-valuation surplus
Bank - Price - NAV - P/NAV
D.B.S - 9.12 - 11.16 - 0.82*
OCBC - 4.63 - 4.60 - 1.01
U.O.B - 11.2 - 10.46 - 1.07

*DBS before re-valutaion is a guesstimate, there isnt a stated per-share figure.
So, I estimated a shaved off about 1.62 per share...

this is scary... but my appetitie is good... if only i had more spare cash...

have fun,
fc

Information Sources: As per previous posts.

[blid2def]

fc - thanks for keeping us posted on this. I'm sure I can dig and work it out myself, but in case you have the info on hand - do you know what's the impact on NAV if the respective banks wrote off their loans for each of the IR projects?

[fclim]

...wrote off their loans for each of the IR projects?

hi gr,

sorry, i dun have the info off-hand... pai seh...
write-off? thats very pessimistic leh... 100% cannot recover meh?
if ah-gong take over, still will honour the loan rite?

there're some assumption on my part of tracking the banks...
1 assumption is that ah gong will not let the 3 local banks fail...
and the IR proj, I would apply the same assumption leh... ah gong will support lar...
if ah gong no give support, who else will?

have fun,
fc