We all know the story that has been over sensationalised by the media. Buy a moated stock and leave it be. And watch your wealth grow. But as I said before. It is very hard to find a moated stock that will keep growing.

So the chart above shows a company whom many know. Coca Cola. At a price to earnings ratio of about 30 times. Its performance has not been great over the last 12 months.

Then let us look at a low price to book type company.

Hong Leong Asia. Its performance has been astounding compared to Coca Cola over a one year period. And these are the kinds of companies that I am looking at right now until I reach the utopian situation where my portfolio becomes too large to consider such companies as suitable candidates as reinvestment risk becomes larger.

For Hong Leong Asia, it’s PE cannot even be calculated for its trailing 12 month earnings is negative! Why buy then? Well this is a position I take for I am taking a contrarian view.

Once again, caveat emptor here. This is a cowboy’s comparison of value.


kingsley

I have been an investor for 15 years now and my journey has meandered from Warren Buffett to Ben Graham. My start, like many, really was the naive idea that Buffett's skills could be replicated in some fashion. I was proven wrong when some of the supposed stock picks that I chose had dismal performances. Then, I learnt that it is no point trying to be someone I am not. Gradually, through failure and some success in deep value investing, my approach towards stocks gradually shifted to an approach based around Graham's techniques. So, I give credit where credit is due and to Ben Graham, I and many other investors around the world, owe him a great deal. So, if you want to read up on biographies, read about Ben Graham. His seminal work, Security Analysis is a gem. My books are just rich interpretations of what he has taught.

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