Was reading through the book 'Nudge' in Chapters today. Now my favorite place to read since it is like having a kino right next door. Very good book. Will be back tmrw to read the rest tmrw.
On the chapter on Temptations - we were introduced to this product "Clocky" - the alarm clock that runs away from you when you snoooooozzzzzzzzzzeeeeeeeee....a favourite hobby of many of my friends.
The book is about decision making and why human being predictably makes some bad choices. I love the way they distinguish the following two beings:
Homo economicus: The person from a standard economics textbook. Someone who, when facing a decision, thinks about every available option, and always makes a great choice. Home economicus has the brainpower of Albert Einstein, the storage memory of IBM's Big Blue, and the self-control of Mahatma Gandhi.
Homo sapiens: You and me.
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SWINE flu. Damn scary. Got its upside too. managed to book a hotel in Omaha on May 1st. Should avoid crowds. But gotta go gotta go gotta go. excited.
In a world with perfect market efficiency, if a company owns only publicly listed stock, the value of the firm should approximate the value of the stock it owns. But this does not hold in the real world. Many closed end funds are now trading below their NAV for the past 6 months, and some companies which holds publicly traded stocks are also trading at such level.
One such example is LOEWS, a holding company that has built up bookvalue and shareholder value for over half a decade. The Tisch family is said to be one of the smartest value orientated business manager/owner, and also has donated generously to the different causes. Btw, the Tisch gallery at The Mets is splendid.
The value of Lows is the sum of their majority holding in 3 public company, holdings in 5 unquoted companies, and corporate cash & investment less corporate debt. Without attempting to value the unquoted companies, the value of firm is 12.3 Bn and the market cap is 10.4 bn.
This works out to a price to value of about 0.85.
On a per share basis, the value per share is 28.3 and the share price is 24.03.
And this is not counting the values of HighMount, with proven resources of natural gas, and other investment in Boardwalk, and CNA. Furhtermore, it could be argued that the public company that Loews holds is undervalued. CNA for instance is trading at Price to Book of about 0.6.
Warning: I'm NOT recommending this stock. Just that simple +-x/ shows that it is likely that the stock is undervalued.
Just came back from an amazing week of travel around Canada. Vancouver, The Rockies, Victoria and Nigara Falls...my beautiful Butchart Gardens, I miss you already.
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Browsing through some of the value investor's website and came across this lawsuit between MBIA and Thrid Avenue Funds. The activist investor who protects its shareholder.
Long story short: Last year MBIA Parent ("P") needed to raise capital, and Thrid Ave bought the bonds for one of the MBIA subsidiary (call it "S") - essentially the only viable going concern in the whole MBIA. Now P created a new entity and transferred the business of S to P, which left the value of S to be essentially zero. So Third Ave is suing MBIA "P" and saying that it is illegal and unfair, thus seeking damages.
Haiz...so sad...To me, it sounds like a case of - when u need money, people lend you, now you have money (ie earning power), u dun want to pay back. If only i can rule like those TV judges and just scold MBIA's management on public television.
Selling auto insurance in the US is ultra-competitive. In my opinion, car insurer primarily competes on rates (cost of car insurance) and service quality (like how easy and fast claims are made). A few insurer also create strong brand for this commodity product in order to differentiate their auto insurance. Lastly product innovation through unique packaging of insurance (auto insurance combined with auto insurance for pet, or certain home insurance) allow some players to create a differentiated product.
One of GEICO's competitor is Progressive. Both companies have very strong brand names in US and Canada partly due to the agressive investments to acquire and retain policies. However, after watching numerous advertisement by different insurance company, i must concede that only GEICO's adverts make u want to pick up the phone to go buy some insurance.
Close every door to me, Hide all the world from me Bar all the windows And shut out the light
Feeling a little like this these days. Somethings that you really want you can't get. Think at this stage i'm like a negative npv project, no matter how low the discount rate is. Haiz...after today's derivatives i've got no more exams. Free to do whatever, but have no real drive to do anything.
May I return to the beginning The light is dimming, and the dream is too The world and I, we are still waiting Still hesitating, any dream will do
Did the following test after reading Nad's blog, think it is quite zun. The test is available here
You are the sort of person that needs a peaceful environment. You seek release from stress and freedom from conflicts and disagreements, of which you seem to have had more than your fair share. But you are taking pains to control the situation by proceeding cautiously and you are right in doing so as you are a very sensitive person.
Ah-bu-den, work in conflict how painful.
You are feeling very disillusioned at this time and you feel that you are being left out of things. You know - or you think you know - what you want, but you seem unable to exert the effort to achieve your objectives. As a consequence, you are feeling left out and neglected. You would like to be afforded greater security and fewer problems.
Super powerful, pick colors only and they know i'm feeling left out....haiz...自己找来的压力
You are trying to break away from the mundane existence that you have been experiencing of late. You have many high hopes and ideals but you are concerned whether circumstances will allow you to realise these ambitions. You want to spread your wings - to broaden your fields of activities - but you are concerned that your dreams are just that - 'dreams' which are not realistic. It concerns you that you are not thinking clearly at this time - what you need is to get away from it all, to give you time to think. A short vacation could well restore your confidence.
Gotta weigh dreams, ideals and what's practical mah. At least must be able to feed myself first. I'm just afraid that i'll get so comfortable feeding myself (ok and those around me) that i forgot my dreams. Dreams get crushed. Think "The Alchemist"...need to go find the pyramid to realise that the pot of gold is just back door. Ok, going Vancouver and some national park next week...maybe it'll "restore my confidence".
You are an emotional, sincere and impressionable individual experiencing frustration and unnecessary stress. You are carried away by other people's enthusiasm and looking for that idealised relationship, be it in a business or personal situation, which you are able to share with a mutual depth of understanding. You have lowered your defences in the past and you have been hurt, so you are now extremely wary of being exploited. You are still ready to trust people on the condition that they are prepared to offer you proof of their sincerity.
So far i think i've been really blessed to be surrounded by really awesome people. But i don't trust easily. love the chinese word - 知己。
You are inclined to be too trusting and you feel that you need to be on your guard against the possibility that your endeavours and actions may be misunderstood. Too often you have been taken advantage of and you have been mentally abused. Now you are seeking a relationship which can provide peace of mind, where you can be yourself and not have the need to put on a false front. Aiyo, don't think i'm the like-to-get-mentally-abused type leh, except doing more torturous courses like derivatives and value investing. Haha. Guess that peace of mind thing is super important to me. duh...if i can't be at peace with myself, i'll puke when see i the guy in the mirror when i brush teeth and floss.
It feels really weird that its now the last week of class. 2 more days of lessons and 2 essays and i'll be done with lessons. After that, it is just one more exam to go then my time at Ivey is over.
Had our last Value Investing class today. We have learnt so much under the guidance of Prof George Athanassakos and I believe that every single student will benefit from this course for a long time to come. Doing one valuation per week is a really good experience. There is no better way to learn then to get your hands dirty. I'm also really proud of our group project.
We did a valuation of Black & Decker, and valuation shows that the stock is currently undervalued by about 33%. If we assusme that sales would fall back to 2002 level, then its selling at about fair value. The whole framework that Prof taught us is a way to think about valuation. Some may think that what we have learnt is like 'valuation by numbers'. But i think it is a framework to go through a check list system to ensure that you have covered all the bases for business and financial risk, for competitive advantage, and always keep in mind not to overpay for growth or glamour.
To quantify most of these things would probably take a life time of practise, but we have to start somewhere, and i think this Value Investing course taught by George at Richard Ivey School of Business is a great place to start.
Was thinking about Singapore food on my way home today. I still can't bear to eat "饭菜" that costs $9 SGD here. Its just 2 meat with rice. Haiz, even SMU foodcourt sounds appealing now. hahaha. I miss kaya toast and really good coffee, aka Purvis Street 喜园coffee. I miss Ba Chok Mee and Nasi Lemak and Prata and Rojak and my grandma's cooking.
So the closest Singapore thing that i got was to go listen to 梁文福's song on YouTube....lame right?!?
And i just love 一步一步來. Never get sick of this song. I guess what makes a song great is how it stands the test of time and how people over different generations could relate to it.
