Special Report on the Current Financial Fall Out!
Stocks I am looking at:
Please note the watch list at the moment, mainly evaluated from a fundamental perspective, so is for longer term hold rather then quick technical rebound, I will look to include technical analysis where available and appropriate. In general an investment attitude of finding solid company with sustainable outlook and with the intention to receive good and steady dividend is recommended. The attitude of gaining something for nothing seldom materialized, and one should take pride in been an investor as opposed to a pure speculator!
The stocks I am of interest, generally are able to provide high and sustainable cash dividend, so that the continue holding of them will outperform what one will receive in term deposits, Treasury or other fix instrument equivalents. Another key thing I like to emphasize here before proceeding to individual company analysis, is to suggest a capital management method which should be in place before investing. This is vital, as anything can be of an investment grade at a "right" price, and any investment grade can be highly speculative at a "high" price. The price you pay for your investment is the core of the game! Read up on Benjamin Graham's "Security Analysis", it's a must read IMO.
Here I would suggest a 50% investment and 50% cash capital allocation strategy (credit to Claude Shannon, a genius and father of I.T), and adjusting say only when a 10-20% plus move on investment occurs (depend on the target investment) so the 50/50 cash/investment balance remains. This method is actually IMO brilliant for Taiwan market and target that exhibit volatility, as more volatile the target, provided it trend up, the more money you are likely to make. This is of course a form of formula timing and in general formula timing is adviced to ensure the investor been influenced by the prevaling mass emotion. I mean we all know to buy low and sell high, the how of executing this shrewd investment philosophy is the million dollar question. Based on my experience and observation, a sound capital management method is vital for a successful investor! The 50/50 method will allow you to always have cash available to accumulate the stock which may be undervalued in a bear market and take profit when a bull market starts to overvalue them.
Finally, I will recommend strongly not to use borrowed money to invest and that include trading with margin account. Just don't do it, because there is no sure thing in this wonderful thing call the market, and it's not worth the potential stress of investing money you don't have!
Cause and Effect. Do it smart and do it right, you will make what's rightfully yours, which is base on the intelligence of your investment analysis, the "price" you choose to pay and the formula timing mechanism adopted to keep you shielded from the infectious "mass market emotion" so you truly can buy at "relative" low and sell at "relative" high. The market is yours and it will offer you all the glory you can take. So take it and take it with grace, while having fun and feeling relaxed!
You can click above link to learn about my ideas, thoughts and observation regarding the investment market. This section is updated periodically.
Who is investing in Taiwan:
TAIPEI, April 9 (Reuters) - Fund manager and investment author Jim Rogers said on Wednesday he is buying Taiwan's stocks and currency, two of Asia's top performers this year, amid optimism under a new president for reduced tensions with China.
Jim Rogers's Website This guy is cool man!!
Templeton Asset Management Ltd.'s Mark Mobius said Taiwanese stocks are inexpensive and he's been buying them on expectation that the island will benefit from closer ties with China.
Mark's update view link (templeton site)
前摩根士丹利證券亞洲首席經濟學家謝國忠，22日接受台灣工商時報專訪時指出，馬英九勝選，台灣經濟將進入為期7至8年的超級成長期，新政府經濟政策應優先提振內需，而提振內需的最好方法就是增加投資，只有投資增加，內需才會跟著起來。 國忠表示，台灣無論從匯率、外匯存底、股市來看，其實都具備從谷底反彈的強勁動能，馬英九當選、讓兩岸關係正常化，台灣經濟可以走7到8年大多頭。
The Oracle of Omaha has not "yet" invested in Taiwan to my knowledge. He is definitely one of my hero and man wouldn't it be great if he starts buying TW..lol. He did invest in China and Korea, so perhaps we could one day interest this great man to get involve in our little Island...lol
Why Invest in Taiwan:
There is quite a long list and please see Tawian Business Alliance Website for details. Key reason is the likely re-rate of Taiwan assets when closer economic collaboration is materialized with China. Taiwan also has certaub competitve advantages in electronics as well as potential upside for the relative underdeveloped areas such as tourism.
Investment Strategies:
Securities -Taiwan Stock Exchange
Taiwan Listed Companies and Emerging Stocks (Common Stocks)
(1) Inflation Them for the coming decade: Hence recommend to stick with
- "Commodity" Related such as Food, Metals, Petrochemical and essential utilities. Also energy commodity especially the alternative energy sector such as solar or fuel cell where the tech oriented Taiwan exchange has listing.
- "Asset" companyies that are making a profit as the land value maybe driven up in Taiwan when more capital invested into this sector.
- "Environmental Play" like water treatment companies which will gain access to China's enviromental "opportunituies".
- High Tech, Financial and Other Sectors will be more case by case basis.
- Hot Sector or Policy Driven Sectors
- 2008 May 20th forward New Government Proposed Policies - http://www.ma19.net/policy4you
- 桃園 International Airport Concept
- 愛台十二建設 Cocepts (taiwan12.pdf)
Webster's 1983 Definition of Inflation: "An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand."
(2) Value play strategy which will limit downside risk.
Basically Buffet Style investment strategy to long value play recommended.
- Using key Buffett selection criteria,
High RoE
Low Debt
Low Profit Reinvestment
Companies in circle of competence e.g. we understand and has good long term prospects. - (Key 1) RoE is the key, and the formula will use 5 year average RoE to determine the likely RoE.
Reference price is calculated using below
Ref Price = "Estimated RoE" * NAV * PE Note: NAV is Net Asset Value, PE normally use 10 or 12 - (Key 2) Reinvestment is calcuated using "Long Term Asset", "Long Term Investment" change over 4 years, divided by profit generate over 4 years
(3) Adoption of Kelly Formula to utilized calculated edge and achive below
- Downside risk control
- Optimize long term Capital investment.
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