Wednesday, June 13, 2018

New additions

I recently added to my positions in Frasers (BUOU) due to the issuance of new stock by the REIT. In doing so, it allowed me to add to the position slightly with the purchase of 10 percent more stocks (originally, that was 450 stocks at the cheap price of 0.967, lower than my first entry of 0.985), but due to the ability to buy extra shares for those who did not choose to use this option, I actually got 1500 shares in total instead of just 450 at that beautiful price of 0.967. This was a pretty good approximately 6% growth in capital gain just from being able to purchase at this price.

Going further, I am looking into another Chinese stock that has seen it stock price drop for the past 12 days. As to why it is so, I will investigate further. Nevertheless, based on my quick analysis, I have determined that it is falling to very tempting prices.

Now, based on the readings of Benjamin Graham, I have tried my best to build a very simplified version of a DCF model, just to determine an approximate intrinsic price and apply a margin of safety to it. As per the words of Buffett, the stock should just "scream" at you. In my free time, I would want to accumulate a few stocks that has interesting business prospects, and find my MOS price to attempt to enter.

This is also something I have learned from the readings of Peter Lynch, another famous investor. In looking at stocks, he always tended to look for the "boring" ones, stocks that may be overlooked just because the items they sell or the business they are in are plain out... boring. I am talking about things such as selling cement, wires, everyday commonplace items that are necessary but does not elicit much excitement, unlike the companies such as Tesla, and admittedly, Alphabet or Alibaba.

As such, I am attempting to purchase more value stocks as I believe strongly in the arguments for value investing, yet have to admit I stray sometimes due to some of the compelling aspects of growth stocks. Nevertheless, I believe the stocks I will keep for the long run to provide me steady dividend and my path to my financial freedom would be the value stocks.

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