Posted by kcchongnz > 2013-08-26 10:21 | Report Abuse

Yes, correct.

謝和弦 - 柳樹下 (Good TV 好消息電視台 心靈樂飛揚)

Posted by faberlicious > 2013-08-26 11:51 | Report Abuse

yo kc,

FCF/Revenue

1%

9%

27%

10%

28%

3%

Average should be 15% ,not 3% lah.

Posted by kcchongnz > 2013-08-26 12:06 | Report Abuse

I was just testing if somebody actually read and check what I have written. Now I found out that there are two people who have spotted one mistake each.

No lah, faberlicious, you have sharp eyes and mind. Thanks for the correction. My excuse is there are too many figures and hence sure to make mistake somewhere. Is it excusable? Can lah.

So the average FCF is 15% instead of 3% of revenue. That paints a better picture for Willow too. I read a book from a famous value investor. I think he is Pat Dorsey of Morning Star. He said if the average FCF is more than 10% of revenue, put all your money in that stock. Just kidding, don't do that. Remember diversification.

There is also a mistake in the writeup about this. I really don't know why I had this "89%" there which should be 15%.

Posted by faberlicious > 2013-08-26 13:13 | Report Abuse

No problem kc,glad to help.I was calculating how you got the figures for CFFO,FCF etc. etc. when I spotted the error.Thanks to you, I've learnt a lot about FA :)

Posted by kcchongnz > 2013-08-26 13:33 | Report Abuse

Talking about contribution and dedication to i3, nobody beats Tan KW.

Posted by yfchong > 2013-08-26 14:17 | Report Abuse

Bro KC just a simple question, how long do you take to be familiarise with the financial engineering methods, assuming you have a full time job in an engineering office ??.Thks yf

Posted by kcchongnz > 2013-08-26 14:47 | Report Abuse

yfchong,
I think I have answered this question before. Engineering is many times harder than finance and investment. It is a matter of whether you want to take the first step. The first step is to go and buy a good financial statement interpretation book and familiarized yourself with the three financial statements first. That is the most useful part of investment in my opinion. That won't take you more than a month to familiarized with them.

Then the other part is by standing by the shoulders of giants like Peter Lynch, Warren Buffet, Charles Munger, Philip Fisher etc and see what their philosophies of investing are. There are also many good investment websites which you can learn. A couple I always go to are Old School Value of Jae Jun who were like you before; Professor Aswath Damodaran (hack, this is a free MBA course in Finance); Geoff Gannon,etc. Practice in the market and pay some tuition fees. This part can take you longer time, may be a year or 2 to become a more savvy investor. Just my opinion.

Posted by i3raymond > 2013-08-26 18:22 | Report Abuse

Bro and most respected KC, what do you think of this article?http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=150392:is-klse-over-valued-and-how-deep-is-the-correction-in-the-coming-crash?&Itemid=2

Another anti establishment stunt?

Posted by charan das > 2013-08-26 18:35 | Report Abuse

YES very scary to read such things sometimes.. whenever there is some correction on the market, such negative news will start appearing.. from my point of view, there are some who are trying to pull the market down deeply, maybe this group had already sold their shares.. so that when the market drop badly they can enter again.. actually our market is just undergoing some simple correction only, it s not a crash

Posted by kcchongnz > 2013-08-26 18:51 | Report Abuse

i3raymond,
I am one who do not believe people can use macro economic events to predict the direction of the capital market. Appended was my comments on the main thread of this. I am more a follower of the folowing school of thought as shown in the video below:

https://www.youtube.com/watch?v=2It1fzcBoJU



Posted by kcchongnz > Aug 26, 2013 11:02 AM | Report Abuse X
Is macro economic influence on the capital market predictable?
Nowadays with the power of the computer,it is easy to simulate past macro economic events and used them to back test their influence in the capital markets in the past. This has been a favorite research topic and has been carried out by many academic researchers. From what I have read so far, there is no statistic significant results to show that past macro economic events have the influence over the capital markets. Is there any reason to believe that they can in the future?

Those people who have some knowledge about economics would know that the top economists in the world are only 50% correct in predicting the market.

Sure market does go in cycles, but pinpointing the exact or even approximately point of the cycle the market is in now is proven to be a futile exercise. If one is wrong, and he is often wrong in the past, missing out the last leg of a bull market can be a costly endeavor.

Hence using a top-down approach in investing has also proven to be a futile exercise.

Posted by KC Loh > 2013-08-26 19:10 | Report Abuse

good youtube kcchongnz. i came across this recently. would you believe someone willing to pay US$26 for a US20 dollar note under certain conditioning or stress!? actually speaks of investors' psyche a lot!

https://www.youtube.com/watch?v=ynwMLjGzsJ0

Posted by kcchongnz > 2013-08-26 20:39 | Report Abuse

The other KC,
Just watch the video you posted on behavioral finance, a new branch of finance. A very good video. I believe anyone study finance in NZ would have to watch this video. By the way, many characters there are Nobel price winners; Richard Thaler in behavioral finance, Eugene Fama in efficient market hypothesis, Robert Shiller (not very sure).

A few months ago I won a golf trundlers which is worth about NZD200+. I put it up for auction in our Trademe website for sale. I was happy if I could get NZD150. You know what? Somebody bid it up and it was sold at NZD325! Yes, I believe that a $20 note was traded at $26, definitely.

In the video i saw many sophisticated mathematical equation. One of them resembled the Black-Scholes stochastic calculus equation of pricing option, things like warrants, call warrants etc. I remember once I commented on SKPRes Wa that it was expensive basing on option pricing and your response was "nobody calculates like that". You were right, how many people know about Black-Scholes option pricing model with that bloody stochastic calculus equation?

But knowing people are irrational, including ourselves, don't you think that one must know the approximate value of something before rationally bidding for it? Because if not he will be paying too high a price for that? Yeah buy high and sell higher. sounds good theoretically. But what if it is like the tulip mania the video is talking about when people chased the price so high that eventually when one wanted to sell, nobody is willing to buy it and the price just plunged suddenly? No chance to cut loss.

The same thing about the chasing the house price and secularization of the mortgages in mid 2000s in the video. Everything seems well because of that but suddenly house owners stopped paying mortgages and the mortgage securities had no buyer at all and they just became worthless abruptly. No chance to cut loss.

So to me chasing something high in price and hope to sell at higher price is a very risky thing to do. On the other hand if one knows the value of something, for example if you can buy a stock with good business, there must be a minimum value it is worth. And if you can buy lower that that value, where is the risk?

Of course I am talking about investing, not trading or speculating.

Posted by KC Loh > 2013-08-26 21:09 | Report Abuse

therefore Mr Market, conjured up by Ben Graham, was really a remarkable feat by itself! :)