转载: How to invest in the right business

虽然看过很多类似的文章, 可是这次读这篇却让我有很多想法,感慨.

转载自:
http://biz.thestar.com.my/news/story.asp?file=/2007/7/4/business/18203729&sec=business


How to invest in the right business

There are four main criteria in choosing the right business for investment. They are a business that can be easily understood; has favourable long-term prospects; has good management; and attractive pricing.

BUYING stocks are like buying businesses. How do you select the right businesses for long-term investment?

Selecting the right business to invest in is always a tough decision. Warren Buffett, in his address as chairman to Berkshire Hathaway shareholders, said he uses four main criteria to select the right business: a business that he understands, one with favourable long-term prospects, one that is operated by honest and competent people; and is available at a very attractive price.

Buffett always stresses on staying within our circle of competence. As the value of a company is dependent on the present value of its future cashflow, a business that we buy must be simple and have stable and predictable future cashflow.

According to him, “What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know. An investor needs to do very few things right as long as he or she avoids big mistakes”.

Hence, we need to understand the business that we invest in. We may miss out on many good opportunities in investing in some Mesdaq companies with new technologies. However, it is safer to miss out on these great opportunities if we cannot comprehend how these businesses generate their cashflow.

For a company to have favourable long-term prospects, it needs to have a good economic franchise, strong long-term pricing power, and high entry barrier. It needs to be able to command good product pricing by not losing its market share or increasing its production volume at minimal additional capital investment.

A company that has strong pricing power and purchasing power will enjoy handsome profit margins.

Besides, we need to identify the dominant players in an industry. Normally, these companies have the competitive strengths that their competitors and potential entrants find impossible to emulate. One way to check on these is by looking at the absolute amount of their turnover. In Malaysia, a company with a turnover of above RM500mil a year can be considered as one of the key players in its industry.

According to Mary Buffett and David Clark in their book titled The New Buffettology, there are four areas in which Buffett discovers companies with hidden wealth. These companies have durable competitive advantage over their competitors. The four areas are:

# businesses which have a repetitive consumer need with products that wear out fast or are used up quickly and have brand appeal

# the advertising business

# businesses that provide repetitive services that people and businesses are consistently in need of

# products that most people have to buy at some time in their life.

These four areas are very closely related to consumer demand and expenditure.

As a result of the recent accounting frauds involving Transmile Group Bhd and Megan Media Holdings Bhd, investors began to have doubts over the management of other listed companies.

Philip A. Fisher, the author of investment book Common Stocks and Uncommon Profits, stressed that investors must choose a company with a management of unquestionable integrity.

As retailers are minority shareholders with no controlling power, the company’s value will very much depend on the management and investment decisions made by its major shareholders. Hence, investors should always check on the integrity of these managers.

Investors need to be careful when investing in companies with high expansion, high trade receivables and poor internal controls. They may also need to pay attention to some negative rumours spreading in the market. In most times, negative rumours carry more weight than the positive rumours.

Lastly, we will only buy a business if it provides a margin of safety. According to Benjamin Graham, if a company is selling at a 33% discount to its intrinsic value, the investment is said to provide a margin of safety. One way to judge how cheap a stock is by looking into its price-earnings ratio as compared with that of its competitors.

Nextnation (Nextnat:0096) 给我的教训及经验

在Nextnat这一股票投资中,现在的纸面亏损刚好是十千,也是我资金的约40%,现在我便在这儿写下我的心得及教训,前事不忘,后事之师,希望以后不会再犯.

1. 8%止损. 这是以前便为自己定下的规则,可是这次却没有执行,因为在8%止损点时,正好它将派送2送l红股.通常一间公司派红股是属于好消息,股价会起,而这也成了我不执行8%止损的理由,或借口.结果在它派红股的当天,股价从0.35 跌到0.32,我...呆了. 虽然8%止损是机械化了些,可是毕竟是血汗钱,也管不了摒弃当初投资的理由,谁叫我资金有限.

2. 骄兵必败.在之前一粒股的投资中,一买便起,而且还越买起,简直认定我的运来了,结果在这Nextnat的投资中大胆了,少了应要有的谨慎. 套句网友的话: 我的经验告诉我，在贪心和乐观的情况下买的股，最后都会亏钱。最好的投资方法是小心谨慎，慢慢来，后备要多，要能够随时做出改变.

3. 把全部鸡蛋放在一个篮子的风险对我来说太大了,而且还是成长股.无论如何,投资股票贵精不贵多,还是分开放在最多两个到三个篮子里吧.

4. 尽量投资在拥有比较久历史的公司.至少可以知道管理层的风格,信用及能耐.

5. 如果没钱拿票,便不要做任何买卖,永远不可以Contra.

6. 对于Business Accounting 还有很多不了解,需要加强这一方面的知识.

有时,投资股票是个很玄的玩意，你守，守到了人家便说你有勇有谋，相反地，人家便会说你固执.做人又何尝不是如此,所以,依我说,只须根据自己手上拥有的资料及对公司的了解来做决定就可以了,谋事在人,成事在天.

麻坡的华语 - 2

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