tag:blogger.com,1999:blog-28021668.post6931278801072418169..comments2023-10-12T21:12:41.408+08:00Comments on Value Investment - Musicwhiz's Journey: The Importance of MonitoringMusicwhizhttp://www.blogger.com/profile/10950754156386935254noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-28021668.post-4355860339231426542009-09-18T22:18:37.760+08:002009-09-18T22:18:37.760+08:00Hi Thinknotleft,
Hmm good and valid points you ra...Hi Thinknotleft,<br /><br />Hmm good and valid points you raised. I really did not understand the company and industry as well as I should, and that was one reason for the hesitation. However, I think their net cash position negated a lot of the risks at buying at 20c (which was what I was pondering over at the time). Still, my decision was based on future prospects (i.e. growth) and not just based on Balance Sheet strength alone.<br /><br />Your third point rings true indeed - my sample size is indeed too small to judge if my selection "skill" is flawed or accurate, and I agree there is always hindsight bias in all of us.<br /><br />Well, investing small sums is not really my style; unless it's to "monitor" the company before plonking more money in. But perhaps I can consider that suggestion - it's a good one !<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-63695118519554506672009-09-18T21:42:01.463+08:002009-09-18T21:42:01.463+08:00Hi Musicwhiz
I do not see missing Rotary as sins ...Hi Musicwhiz<br /><br />I do not see missing Rotary as sins of omission.<br /><br />Firstly, it is likely that your circle of competence does not encompass Rotary-like industry. It's more likely that Rotary is in your 'unsure' bin.<br /><br />Second, it is always prudent to avoid investing in companies that you are unsure of.<br /><br />Third, your analysis suggests signs of hindsight bias and small sample bias. It may be too hasty to declare your information gathering approach as incorrect given a sample of one. <br /><br />Lastly, you may consider investing bits of money in similar future scenarios, if you wish to avoid such 'sins of omissions' (or regrets).ThinkNotLefthttps://www.blogger.com/profile/12923865962137056109noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-59658141747514843082009-09-18T14:35:45.326+08:002009-09-18T14:35:45.326+08:00Hi Kay,
Think you got it mixed up. I sold Swiber ...Hi Kay,<br /><br />Think you got it mixed up. I sold Swiber and not Rotary. I never owned Rotary, but was just considering it for purchase but did not go through with it. Thus, I classify it as a "mistake of omission".<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-75755052909422390902009-09-17T21:45:12.656+08:002009-09-17T21:45:12.656+08:00Hi Musicwhiz,
I don't think you made any mist...Hi Musicwhiz,<br /><br />I don't think you made any mistakes for Rotary Engineering. It's hard to predict the future at the point of time when you sold the stock.<br /><br />KayKayhttps://www.blogger.com/profile/10880809899222016666noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-534716448550092562009-09-16T17:53:09.745+08:002009-09-16T17:53:09.745+08:00Hi slowlybutsurely,
Thank you very much for visit...Hi slowlybutsurely,<br /><br />Thank you very much for visiting !<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-77891195298180365362009-09-16T17:52:10.972+08:002009-09-16T17:52:10.972+08:00Hi HH !
Thanks too for visiting and sharing your ...Hi HH !<br /><br />Thanks too for visiting and sharing your personal experiences. After finding out how most of my friends seem to just "fling" their money at the stock market, I thought I'd practise a more prudent approach and go the "slow and steady way", hence my investment style does not include speculative or trading activities of any kind. I do get laughed at for being old-fashioned and "slow", but so far this method works ! I cannot say the same for my friends' methods though.<br /><br />And yes, just as we should not buy when price is rising; neither should it immediately prompt a "sell" decision unless it is very clearly over-valued or the fundamentals have deteriorated drastically.<br /><br />Regards,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-10096646683891294322009-09-16T17:49:31.826+08:002009-09-16T17:49:31.826+08:00Hi JW,
I suppose you are right. Conditions are vo...Hi JW,<br /><br />I suppose you are right. Conditions are volatile and uncertain and CEOs are not allowed to project too far in case they "mislead" the market and investors. Chia Kim Piow is also known to be a conservative fellow (Rotary has a huge cash hoard and is in net cash) and so his comments may have been skewed towards a more conservative outlook.<br /><br />I think doing a DCF is a good idea, but the problem is that cash flows are uncertain and can change quite drastically, thus making the projection inaccurate.<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-28710809936688350412009-09-16T13:23:20.154+08:002009-09-16T13:23:20.154+08:00Investing is a continuous learning process and we ...Investing is a continuous learning process and we can never claim to be good enough at it. ---- > nice one mate, fully agreed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-28021668.post-52738112425503454752009-09-16T11:45:15.802+08:002009-09-16T11:45:15.802+08:00Hi MW,
Thank you for your post! You are right tha...Hi MW,<br /><br />Thank you for your post! You are right that most "investors" (those who hold on to companies for long) do not even follow up on the basics of the company. <br /><br />I was one of those. I sold chartered and biotreat in 2007, after reading their annual reports. Never regret selling. Only wonder y I was so reckless with my money to invest in junks without knowing much.<br /><br />I had also divest some lately -- decision is based on fundamentals and its a good call. I do made a big mistake to part away with most of my "see candy" because of PRICE. :) I may not be able to buy back again. But Price/or price running up too fast is surely not a good reason to part with a good company.<br /><br />Thank U for this timely reminder!<br /><br />Blessings,<br />HHUnknownhttps://www.blogger.com/profile/10309298986586904687noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-89573361658609416762009-09-16T10:37:46.447+08:002009-09-16T10:37:46.447+08:00Hi MW,
it's hard to say so at times, because...Hi MW, <br /><br />it's hard to say so at times, because prices are driven by market psychology while valuations are due to personal calculations. I would say that the comments were more on the prudent side, not wanting to promise too much in case it could not be fulfilled.<br /><br />In that sense, a discounted Cash Flow valuation might be a better idea, supposed we assume ceteris paribus for Rotary.JWhttps://www.blogger.com/profile/04633191740991225888noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-47987385568651585292009-09-16T01:24:34.919+08:002009-09-16T01:24:34.919+08:00Hi Simon,
The interview with the Chairman gave so...Hi Simon,<br /><br />The interview with the Chairman gave some hints. He said that competition was increasing, especially in the Middle East, and that the long-term prospects for the business were not positive. He did emphasize the short-term would be fine though.<br /><br />I guess I was not confident due to the fact that I did not understand the industry as well as I should have, and thus I classify it as a mistake of omission.<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-45577109444145369652009-09-16T01:20:42.792+08:002009-09-16T01:20:42.792+08:00out of curiosity, what was the mistake you made wi...out of curiosity, what was the mistake you made with rotary engineering? i mean, what did you see at that time that made you think they would not be able to clinch mega deals?simonhttps://www.blogger.com/profile/01511349808077597074noreply@blogger.com