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Value Investing Sell Discipline in Choppy Bear Markets

In choppy bear markets, value investors can adopt a more conservative sell discipline. Instead of starting to sell when the price reaches intrinsic value, the investor can start to sell when the price reaches 70% to 80% valuation. This applies similarly to the buy discipline, i.e. only buy at a larger than usual margin of safety. The … Continue reading

Newcastle Investment Corp (NCT)

I first came across NCT from one of Wally Weitz letters which highlighted NCT and Redwood Trust (RWT) as potentially good investments (during the mortgage crisis, Wally sold out of NCT). I am starting to look into NCT currently to assess its value as an investment. From the latest 10-Q (31 March 2010), the adjusted … Continue reading

Industrial Revenue Bonds

Some cities/states offer Industrial Revenue Bonds (IRB) to encourage investments. How it works: A city issues the bonds to finance the building/buying of a facility/land/equipment. Using the bond proceeds, a company builds/buys the facility/land/equipment. However, the title of the facility/land/equipment is owned by the city. The city leases the facility/land/equipment to the company for say … Continue reading

Accounting for Hedges

Covered by IAS 39 – Financial Instruments: Recognition and Measurement, and FAS 133 – Accounting for Derivative Instruments and Hedging Activities. Three types of hedge: Fair value hedge – Hedge exposure to the changes in fair value of a recognized asset or liability, or unrecognized firm commitment (e.g. a swap to hedge against a fixed … Continue reading

Pension Accounting Terminology

Some notes about pension accounting: Periodic pension cost recorded in the income statement (pension expense) = Service cost + Interest cost + Amortization of prior service cost – Expected return on plan assets – actuarial gains/(losses) Service cost is the present value of projected benefits earned by employees in the current accounting period, i.e. the … Continue reading

Book Review: Bulls Make Money, Bears Make Money, Pigs Get Slaughtered

Rating: OK. This is a book by Anthony Gallea. Came across it in the library some weeks ago, and picked it up because I recall Jim Cramer saying the title of this book before in his programme. The book mainly has tips for short-term traders that uses technical analysis. It is an easy read as … Continue reading

Wilbur Ross on Risk and Return

One nice point that Wilbur Ross made is that there is no proportionality between risk and reward. Whoever invented the saying that reward is proportional to risk was probably some Wall Street guy promoting a very risky deal 🙂 Frequently, you get paid for what people perceive to be the risk, but that may or … Continue reading

Ace Greenberg’s Sell Rule

There’s an interesting quote by Lawrence Kudlow on Ace Greenberg who was the ex-CEO and Chairman of Bear Stearns. Ace Greenberg had a rule that says that if a stock falls five days in a row, you should sell it. Never be emotional, never get attached, never try to outwit the market. If it goes … Continue reading

Importance of Dividends

One interesting learning point from this GFC is the importance of continual income stream into the portfolio. This is vitally important so that the new cash inflow can be used to take advantage of any opportunities that arise (e.g. market goes down and you want to average down). I think that in building a portfolio, … Continue reading

Learnings of John Bogle

In the book “The Best Investment Advice I Ever Received”, John Bogle recounted an interesting experience at the Wellington Fund where he worked hard to pick stocks and asset allocation, but usually failed to beat the market. He concluded that most stocks are priced efficiently most of the time, and betting on the ability of … Continue reading

Investing in Gold?

I was reading some articles about value investors going into gold (e.g. Khaner, Einhorn). Coincidentally, I just watched Chris Martenson’s Crash Course which is predicting the collapse of the fiat monetary system, which is one main reason why people are buying into gold. One of the most popular ways to playing gold is to buy … Continue reading

Buying Rules

Buying Rules: Always buy only in a down day for the stock This would get you better prices when others are dumping. BE PATIENT, do not ignore this rule and chase after a running stock, do not be egged on to swing the bat, the market is full of opportunities even if this one is … Continue reading

Robert Olstein’s Lucky Eleven Top Investment Tips

I’m reading this book “The Best Investment Advice I Ever Received” by Liz Claman. There are a few points from Robert A. Olstein of Olstein & Associates. Lucky Eleven Top Investment Tips: Attempts to predict movements of the stock market in order to profit therefrom is a long-term-failure process. Market risk can be controlled somewhat … Continue reading

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