Intelligent Investor Club

Some of you might be interested in this event. Besides the Singapore event, it will also be held in Malaysia, Vietnam and India.

Asia Trader & Investor Convention (ATIC @Singapore 2008).
Date    :       1 - 2 March 2008
Time    :       9am to 6pm
Venue   :      Suntec Singapore, Hall 401
There will be many speakers two of which include Daryl Guppy and Ray Barros.

More details here: (tickets at $18 for 2 days)
http://www.theatic.net
Free tickets here for Singapore event (while stocks last):
http://www.theatic.net/surveysg

Popularity: 24% [?]

I’m now here in Singapore Expo for a local event called Personal Wealth Management Forum. It’s not exactly on value investing but more on the general topic of wealth management. The speakers include:

• Dr Dolf de Roos, best selling author of “Real Estate Riches”
• Dr Clemen Chiang, options trading expert
• James Skinner, best selling author of “The 9 steps of Success” & Japan’s leading management consultant.
• Richard Tan, CEO of Success Resources
• Eric Edmeades, Entrepreneur, Author & Consultant, XL Results Foundation.
• Joe Cusick, Vice President Education, optionsXpress, Inc
• Craig Cline, Director of Sales, Briefing.com

I will be posting some insights from what I learnt in the event. Stay tuned.

Popularity: 71% [?]

Just this weekend, 98 students from Harvard had the opportunity to listen to Warren Buffett in person. In his speech, Warren Buffett shared what he thought was the most powerful force in the world (it’s not money) and his tips for financial success.

Continue Reading » …Continue reading » The Most Powerful Force in the World

Popularity: 26% [?]

Legg Mason Capital Management is one of America’s leading equity managers recognized for their distinct value investment process.

In September 2006, they conducted a leadership forum. The speakers and topics include the following:
Continue Reading » …Continue reading » Legg Mason Thought Leader Forum 2006

Popularity: 85% [?]

I just found a video recording of a seminar on value investing by Professor Bruce Greenwald of Columbia University, the place where Benjamin Graham worked previously.

For now, access to this full three hour plus content rich video recording of the seminar is free.

Fairly heavy academic stuff but useful nevertheless with practical examples.

Enjoy!

Technorati Tags: warren buffett, benjamin graham, bruce greenwald, columbia university

Popularity: 27% [?]

About 2 months ago, I made a post that contained an one hour video recording of Warren Buffett’s talk at the University of Florida.

Just found out that this talk was given way back in 1998.

The good news is that I managed to find the transcript for the talk. For those who didn’t have time to watch the video or prefer to read the transcript, you can download the transcripts of Warren Buffett’s speech here.

Popularity: 46% [?]

If you were graduating and were asked to pick someone from your class who will most likely succeed, what most of us will choose.

His thoughts on investing in Japan.

“Time is the friend of a wonderful business; but the enemy of a lousy business.”

His adversion of using leverage no matter how good the odds are.

“To risk something that is important to you for something this is not important to you is foolish. You only have to get rich once.”

His involvement in Long Term Capital Management.

“Work in a job that you love, and not something that will look good in your resume.”

He buys business that he can understand, with a moat around it and with honest and able management. If he’s unable to see them 10 years from now, he won’t buy it.

This point is worth pondering:
Everyone has a circle of competence when it comes to understanding businesses. It might be 20 stocks or 50 stocks out of the thousands of listed stocks. It is not how big your circle is, but how you stay inside the circle!

Activity versus inactivity.

What he will do if given a chance to live all over again.

Tags: warren buffett video, benjamin graham, intelligent investor, long term capital management

Popularity: 43% [?]

Apart from his yearly AGMs, Warren Buffett hardly gives talks or seminars to the general public. However, there is one group of people that he will speak to even for free. And who are in this privileged group? Students.

Recently, Warren hosted a visit by a group of students from Medill’s Integrated Marketing Communications and school of journalism graduate programs.

This billionaire needed no entourage as he drove himself to a local country club in Omaha. Here are some snippets from his speech to the students.

Treat investing like journalism. Just as a reporter would want to find out something that most people don’t know about, you want to do the same for the companies you are analyzing. However, ninety-ninepercenty of the information out there is redundant.

You only have one life. If you have something or a job that you would like to do, do it today.

There must be a passion for the business you are in. There’s no such thing as retirement because work is play and play is work. If you look at the top managers in his companies, you will find most of them working even up to eighty or ninety plus years old.

Your inner scorecard is more important than your outer scorecard. Don’t worry about building a resume that you think others want to see.

Never get into something if you have the intention of someday wanting to get out of it.

Popularity: 19% [?]

Well, at least some light refreshments were provided this time round. They must have heard our complaints in the morning. :)

Back to session 4 of the seminar.

When paying for any share, you would want to pay less than the intrinsic value that you have calculated. Why? In the calculation of the intrinsic value, a lot of it is done by estimation and it is impossible to get a ‘correct’ value. The lesser you pay, the higher your margin of safety.

The stock market is just like an auction process. Prices can go rock bottom or sky high. But whatever the price, remember that no one can force you to participate. You always have the choice of bidding or not bidding.

We are then shown a comparision of Warren Buffett 40 years against Lou Simpson’s 25 year investment performance. Lou Simpson manages GEICO Equities and is one of those possible candidates to succeed Warren Buffet.

He has a return of 20.3% versus Warren’s 21.9%. Quite a close match but if we look at just the last 5 years, he has actually outperformed Warren. An interesting observation about Lou’s portfolio is that his top 10 shareholdings are totally different from that of Warren’s.

The lesson to be learned is that copying a winning portfolio is not a guaranteed formula for investment success. At different times of purchase, many factors would be different and the buying decision derived earlier might not hold anymore. Independent thinking is important.

For those who can’t resist a stock tip, one of Warren’s latest acquisitions is Bugweiser. The current share price is actually slightly lower than his purchase price. What are you waiting for? :)

The seminar ended by revealing the winner of the valuation contest. The correct answer was 80 million which Warren paid for Disney. My answer of 71 million was close but not close enough. A student of 21 yrs old actually won the prize with 79.x million. Lucky fellow. His (totally irrational) method of using 30% over book value actually won him the tickets to Ohama!

Ironically, I had read an article on Disney earlier in the morning inside Forbes magazine. What a coincidence!

Overall, I would say that the attending the seminar would be well worth it for those who are starting out in investment. Having the right mindset would save you from a lot of heartache and losses which will surely be more than that five hundred dollars.

For myself, I was a bit disappointed. I had already been a follower of Warren Buffett and I would have expected a bit more for the money that I paid. Oh well, one good thing that came out of it is my decision to start this site. :)

Popularity: 28% [?]

Ok. Lunch was much, much better than tea break. At least it was provided. :)

I managed to eat my appetizer of salad and soup, main course inclusive of some seafood and oysters, and dessert of some fruits and pastries. With an extremely full stomach, I proceeded back to the seminar…

Session 3 started with a question, “How much would you pay for a machine that paid you $1 per year for 10 years?” There were different answers from the participants and most answers were within reasonable limits.

Other than using gut feel, this question is actually a simple financial mathematics problem involving the calculation of the present value of a series of cash flows. If you use a reasonable number for the interest rate, you should get a reasonable answer.

In the graph below, the straight line shows the value of a business while the curly lines shows the market value of the same business. What does this tell you?

“When you invest in stocks, always treat them as businesses. Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.” Are you an investor or a speculator?

We were then taught Benjamin Graham’s simple formula for calculating the intrinsic value of a stock.

IV = Current Earnings x (8.5 + twice the annual earnings growth rate)

We were shown Robert’s own formula which was slightly modified to take into account the percentage. It didn’t made any sense to me but the calculations worked out fine with his formula. I suspect the Ben’s formula that he gave us wasn’t stated in the original form. Guess I will have to look it up in his book.

Now came to the much awaited part of the seminar. We were given some data and were asked to value a company . The person who got closest to the answer (the price that Warren actually paid) without going over would win a pair of tickets to the next Berkshire annual general meeting. There would even be a visit to one of the companies hosted by Charlie Munger. Wow!

I decided to base my answer using the present value of the earnings for the next 10 years. Time to take out my calculator. Ops..didn’t bring them. Ok, should still be able to survive since Warren doesn’t use any computers too. He uses paper arithmetic or at most just a simple calculator. I can always rely on my handphone then. HOW IN THE WORLD CAN YOU CALCULATE A COMPLICATED FORMULA INVOLVING THE POWER OF TEN USING YOUR HANDPHONE???

“Time’s up. Does anyone need any more time?” Running out of time, I decided to use the simple Benjamin Graham formula. Hmm..the answer seems a bit high and it can’t be that easy. Otherwise, everyone will end up with the same answer. Ok, I will discount it 50% to include the margin of safety. Maybe just add a bit to my final answer in case anyone uses the same method.

I handed in my answer grudgingly and went for the tea break session. They should have given us more time….

Popularity: 24% [?]