Looking for value.

After learning TA, I tried applying it and I have made and lost money. I think I am not very good as a trader since I must have lost more than I made. My roots are in FA but it was only during this recent crisis that I beefed it up. I believe that my current style of combining FA and TA is most suitable for me.

The thing about FA is that we are looking for value. We want to buy something valued at $1 for 50c, for example, but that, to anyone who has been practising FA for sometime, is too simplistic. Let us not dwell on that for now in order to push this post forward.

When we buy something based on FA, the chances of us being disciplined and to hold on, riding through rough patches, are higher. This is because our knowledge of the fundamentals of the stock anchors us down.  We are less likely to be flighty. Personally, I need that kind of anchor. That was how I had the mental strength to hold on to Healthway Medical when some gave up.  The story is here.

I am not a good trader because I don't like to cut loss and if I do cut loss, I hurt.  I am not without emotions and I don't like feeling hurt.

I am not a good trader because I feel half clothed not knowing the fundamentals of a company.  I feel like I am looking through lens with cataracts.

A clear picture of a company's fundamentals is important for me.  I would buy into a company that is undervalued or even fairly valued as long as I see potential given the circumstances in the present and what is foreseeable in the future.

For anyone who wants to look for value in companies, start by reading up on financial statements. As good a place to start as any is here. Economics and the industry the company is found in are important considerations too. Not everyone enjoys FA just like how not everyone is a good trader.  We have to find our own niche. Whatever our choice, remember that there is no free lunch in this world.

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Portfolio strategy: Undervalued high yield counters.
High yields: Successes, failures and the in betweens.
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The "Woodstock of Capitalism": An Insiders' View
Posted Apr 30, 2010 07:30am EDT by Heesun Wee



A 'powerful' sermon. Matthews says the Q&A session is a highlight for him -- watching both Buffett and Munger apply their guiding principles to each, individual question...."Do the right thing. Look for value. And buy and hold" is their message, Matthews says. But, "it's the difference between reading a sermon on paper and actually hearing it in person. It's very powerful....

Tea with AK71: Buying a car now?

My current car is almost 5 years old.  It is a Mazda 6 2.0 and was purchased at a price of $80k.  I intend to drive it for a few more years since it is still virtually trouble free.

However, out of curiosity, I went to check if I could still buy a new Mazda 6 2.0 for $80k today.  Wow!  I was shocked to find out that $80k could only get me a Mazda 2 1.5 today, not even a Mazda 3 1.6.  I have heard from people, in recent weeks, how much new cars have gone up in price in Singapore but this is kind of scary.

I went to check on the Mercedes Benz A160 which was a car I was recommended to buy many years ago at $99k but I thought it pricey.  The A160 is no longer available but the A180 is almost $130k if I want to buy one! I like this video:

In August last year, I convinced my mom to change her car as her then 3 years old KIA Magentis 2.0 had many problems and the workshop quoted a repair cost of almost $3k after her car's three years warranty lapsed!  The car loan was fully paid up by then and I advised her that the $3k saved from repairing the KIA could go towards paying for a new car. 

We decided on a Mitsubish Lancer Mivec 1.5 for $60k and deregistered the KIA for $20k.  We only had to pay a balance of $40k.  Guess what, it would cost her about $80k now to get the same Mitsubishi 9 months later!

Very rarely do we make money from buying cars but my mom did (well, by saving money). $20k.  No small change.  Makes me wonder if I should have changed my car at the same time she did.  ;-)

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Grow your wealth and beat inflation.