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This is a multi part article. For the previous article, you can read it here: What we can learn from Warren Buffett? Part 3. Do not get emotional Warren Buffett is not perfect. We can learn from his mistakes. Did you know that one of his worse investments turn out to be Berkshire Hathaway? Surprise surprise!  Berkshire Hathaway was a textile company that was going downhill. Buffett Partnership … [Read more...]

For those who are into index investing will know how frustrating it is to do so. Vanguard has decided only to make its index funds available to Accredited Investors. Those who prefer to invest in MAS approved funds could only invest in Infinity Global Stock Index which feeds into the Vanguard funds. Due to the feeder structure, the cost of Infinity Global Stock index is not low. The … [Read more...]

This is a multi part article. For the previous article, you can read here: What we can learn from Warren Buffett? Part 2. Treat the investment as a business Unlike many investors, Warren Buffett sees his stocks as businesses. To him, it is possible to get a bargain by buying small pieces of businesses than the entire business itself. He ignores the market fluctuation since anything can happen to … [Read more...]

This is a multiple part article. For the previous article, please refer to this article: What we can learn from Warren Buffett? Part 1 Having a diversified portfolio As at end of 2017, SEC 13F filing showed that Berkshire Hathaway held 40 listed companies. It also had 63 subsidiaries. With such a large number of businesses and companies it invest in, Berkshire Hathaway’s portfolio is truly … [Read more...]

BYD Co Ltd was listed on the Hong Kong exchange in 2002.  It was one of China’s biggest rechargeable batteries maker. Berkshire Hathaway - the holding company which Warren Buffett is the largest shareholder - bought 9.9% of BYD in 2008.  Soon after his purchase, the share price surged by a whopping 501% in less than two years. However, at its peak it dropped by a whopping 83% due to various bad … [Read more...]

Many investors understand what dividends are. However, not many realized that there is another type of invisible dividends that is called the share repurchase. Both shares repurchase and dividends have its advantages and disadvantages. What is share repurchase? When a company decides to purchase its own shares, it is called a share repurchase. Normally this is done by buying shares from the … [Read more...]

Q: Wilfred, Company X5 announced on 8th March 2018 that its full year results for 2017 was US$163 million in earnings. This was significantly larger than that in 2016 of only $6.7 million. However, its stock price plunge by –17.2% since then even taking into account of dividends. Why is this so? The S&P 500 total return during the same period was -2.33%. Answer: There could be many … [Read more...]

Today I would like to introduce the concept of human capital and briefly touch on employee stock purchase program. What is human capital? Human capital is simply the ability to earn money by working. If you earn $5000 a month and has 30 more years of working life, the human capital is 5000 x 12 x 30  = $1.8 million assuming no pay increment and inflation is zero. Because the human capital is … [Read more...]

Long time ago, the only way people can invest was by investing in stocks. However, not everybody had the expertise to pick stocks. Moreover, most people were busy working. So, they did not have time to monitor their stocks. As a result, stock picking was based on rumors, hearsay. When times were good, investors borrow money (leverage) to invest more thinking that the stock market would continue to … [Read more...]