Value Investing and Finding Value Deals

Professional fund managers may have more extensive resources than individuals, yet they still fall victim to the very behaviours exploited in Value Investing approach, such as overconfidence and extrapolation. In investment, don’t get distract by big dream and big fancy word (IOT, Artificial Intelligence, Smart City/Home, Robotic Manufacturing, Moon Tourism, Bitcoin, Advance Technologies, etc). Instead,…

Speculation

Investment vs Speculation

“An INVESTMENT operation is one which, upon thorough analysis, promises safety of principal and an adequate return.” Graham writes. Speculation operation meets none of these. On the question of Investment vs Speculation, I turn to Graham because he addresses the differences between them on the very first page of his book, The Intelligent Investor. The above…

What is Gross Domestic Product?

(Source: BusinessWorld) GROSS DOMESTIC PRODUCT represents the BROADEST measure of the value of economic activity within a country during a period of time. Gross Domestic Product (GDP) measures the market value of all final goods and services produced within the economy in a given period of time (output definition) or, equivalently, the aggregate income earned by…

Economic Growth & Sustainability – Part 1

Source: TimesHigherEducation.com Economic GROWTH has always been the key focus of many authorities and government. As with the environmental concerns, it is more crucial to consider Economic Growth & SUSTAINABILITY. Economic growth is important because rapid growth in per capita real GDP can transform a poor nation into a wealthy one. Even a small differences…

The Truth on Investors

Truth is that MOST Investors CAN’T see the macro future better than anyone else. Thus trying to FORECAST the future WON’T make them successful investors. There are two classes of forecasters: Those who don’t know, and those who don’t know they don’t know. Most investors act as if they can see the future. It is…

Inflation Rate: Trust the Computation of Bank Negara Malaysia?

INFLATION RATE computation by Bank Negara Malaysia is done on an overall manner for a COUNTRY, while each one of us on INDIVIDUAL level, will still experience different inflation rate. YES, we can trust Bank Negara Malaysia computation of inflation rate as it is done based on basket of goods changes in price for a COUNTRY.…

Inflation Rate: The Construction of Price Index by Authority

OUR central banks have their ways of computing the inflation rate. Can we just pluck-and-use the numbers? Following our article on Inflation Rate, you would now know what is inflation rate and why it matters to investors. But still, the question lingers, “how did the central banks (including Bank Negara Malaysia) compute their inflation rate?…

What is Inflation Rate?

“Perception is real, even when it is not reality” ~ Edward de Bono Inflation refers to a sustained rise in the overall level of prices in an economy. Economists use various price indices to measure the overall price level, also called the aggregate price level. The inflation Rate is the percentage change in a price index—that is, the…

Capital Cycle-Part 1

The above chart illustrates a typical capital cycle phenomenon, showing how attractive profits tend to attract excess capital and eventually lead to underperformance of the industry, and vice versa. Example 1: Commodity Supercycle Commodity Supercycle happened in the period of low interest following the dotcom burst of 2002. It was fuelled by China consumption, whose…

Long Term Runway & Value Investing

For top-down/market-timing investors, Malaysia’s economic growth prospects for the next 12 months remain positive, as shown by Malaysia’s leading index. At the same time, such investors should be mindful of the double- edge impact of a stronger Ringgit and the 2018 general election. Externally, we are remain convinced that China’s economy will perform well and…