Market Correction = Shares on Sale?

Sometimes I wonder what to write about. Markets are down, earning season is over, portfolio does not look good. Every so often, I will just mentally block off the stock market (hence this explains why I can’t think of anything to write :p). Actually nowadays I tend to read books and watch Youtube more often. Just waiting for the dust to settle; wondering when the party will be over (the bottom is anyone’s guess). A Peter Lynch book is always a cheery companion.

I was never be in a hurry to sell or buy (big), and never use margins.

“The market can stay irrational longer than you can stay solvent.” John Maynard Keynes

Moreover, there is only so much and so many times you can write / whine about the poor state of your portfolio. Ultimately I think that isn’t what one should be focusing on anyway. Life goes on, and for companies, business as usual.

“If you can’t convince yourself “When I’m down 25 percent, I’m a buyer” and banish forever the fatal thought “When I’m down 25 percent, I’m a seller,” then you’ll never make a decent profit in stocks.” Peter Lynch

“When you are holding stocks, if it goes up, don’t be too happy; when it goes down, don’t be too sad. Otherwise, how? Your life will also be fluctuating and you’ll die of a heart attack. If you really lose sleep over it, maybe the best way is to keep the money in the bank.” Peter Lim

So does a correction means that it is time to go shopping for stocks? Or like the older folks tend to say “the Candy store is open”? Is the price right?

priceisright

I already know the intrinsic values of most of the stocks in my portfolio, these (and even a number of stocks beyond my portfolio) are at the back of my mind… ok kidding, I need to read back my old posts to refresh my memory.

Of course these are just estimates and could be way outdated. Nevertheless, it works like a shopping list for me (a Sale is not a sale if you don’t know the true bargain price of the stock).

sale

Frankly, despite the correction, some of the fundamentally good stocks are still “up there”.

However, one must bear in mind the fundamentals and business narrative (growth story) of the company so far. Have they deteriorated and changed (for the worse)? Did the stock price dropped just because of a (or a few) weak quarter results? Are the long term and short term outlook positive?

  1. Vicom – Intrinsic Value calculated in Jan 2015 is 5.28. Stock price on 21 Aug 2015 is 5.90.
  2. Riverstone – Intrinsic Value calculated in Jan 2015 is 0.5. Stock price on 21 Aug 2015 is 1.72.
  3. Super Group – Intrinsic Value calculated in Jan 2015 is 0.9. Stock price on 21 Aug 2015 is 0.85.
  4. ISOTeam – Intrinsic Value calculated in Jan 2015 is 0.44. Stock price on 21 Aug 2015 is 0.54.
  5. Raffles Medical – Intrinsic Value calculated in Jan 2015 is 3.58. Stock price on 21 Aug 2015 is 4.37.
  6. Nagacorp – Intrinsic Value calculated in March 2015 is 3.75. Stock price on 21 Aug 2015 is 5.35.
  7. Sarine Technologies – Intrinsic Value calculated in April 2015 is 2. Stock price on 21 Aug 2015 is 1.51.
  8. Colex – Intrinsic Value calculated in April 2015 is 0.37. Stock price on 21 Aug 2015 is 0.27.
  9. Shimano Inc – Intrinsic Value calculated in April 2015 is 31,969. Stock price on 21 Aug 2015 is 14,840.00.
  10. Japan Foods Holding Ltd – Intrinsic Value calculated in June 2015 is 0.34. Stock price on 21 Aug 2015 is 0.47.
  11. Osim International Ltd – Intrinsic Value calculated in June 2015 is 2.55. Stock price on 21 Aug 2015 is 1.50.
  12. NeraTelecommunications Ltd – Intrinsic Value calculated in June 2015 is 0.29. Stock price on 21 Aug 2015 is 0.58.
  13. Silverlake Axis Ltd – Intrinsic Value calculated in July 2015 is 1.03. Stock price on 21 Aug 2015 is 0.64.
  14. Health Management International Ltd – Intrinsic Value calculated in July 2015 is 0.29. Stock price on 21 Aug 2015 is 0.27.
  15. GP Industries Ltd – Intrinsic Value calculated in July 2015 is 0.51. Stock price on 21 Aug 2015 is 0.67.
  16. Spindex Industries Ltd – Intrinsic Value calculated in July 2015 is 0.56. Stock price on 21 Aug 2015 is 0.56.
  17. Neo Group – Intrinsic Value calculated in July 2015 is 1.29. Stock price on 21 Aug 2015 is 0.78.
  18. Breadtalk – Intrinsic Value calculated in Aug 2015 is 0.38. Stock price on 21 Aug 2015 is 1.16.

“Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty – such as in the fall of 2008 – drives securities prices to especially low levels, they often become less risky investments.” Seth Klarman

I hope you haven’t been losing sleep over the recent stock market volatility.

Shall leave you with this.

Advertisements

About apenquotes

Born in 1976. Married with 2 kids (a boy and a girl). A typical Singaporean living in a 4 room flat.
This entry was posted in Investing methodology, Portfolio. Bookmark the permalink.

7 Responses to Market Correction = Shares on Sale?

  1. VB says:

    Have you bought any stocks with price below intrinsic value? If not, what’s the use of the intrinsic value?

    Like

  2. DK says:

    Just to clarify. Intrinsic value of Riverstone is 0.5?

    Like

    • apenquotes says:

      Click here.
      Did the calculation again.

      Like

      • DK says:

        hi apenquotes

        Thanks for the quick reply.

        I’ve also had my eye on Riverstone and my valuation of it is closer to 1.10 using DCF, which was why i was shocked at 0.5c. thanks for sharing your calculation 😉

        do you think your discount on CAGR and PE is a little too conservative?

        Like

      • apenquotes says:

        There is no harm in being conservative aka Kiasu. In the past, when I calculate intrinsic value (for other high growth companies) without any discount (in earnings CAGR), some of the readers would comment saying the past growth rate is unsustainable (which might be true – as companies expand, the initial high growth rate will drop).

        In the case of Riverstone, as highlighted by another reader, it is in a sweet spot now with the low Malaysian Ringgit and strengthening USD, benefits of lower taxation (tax incentives for the new plant) – so in the future, growth may not be that spectacular. So I tend to be more conservative in my calculation.

        Like

  3. Pingback: Weekend Reading: 22-28 August 2015 | My 15 Hour Work Week

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s