(03-07-2016, 01:48 PM)mslee888 Wrote: [ -> ] (03-07-2016, 12:52 PM)BlueKelah Wrote: [ -> ]Dun forget the massive exposure to China. The risk of further slowdown is very high.
A good example is OSIM which has been affected to a large extent. Matter of time before best world gets hit I reckon.
YMMV
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Strange line of thought ..IMHO. Best world just got DS licence, company has yet the reap the fruits of this valuable licence. Already, you are talking about slowdown. Best world is now only starting out in Hangzhou, more cities can be gradually added once best world can execute its plan well. I believe the management is prudent enough to recognise the associated risks/rewards. The best is yet to be....
FY2015 revenue of SGD 20 million is considered massive exposure to China ?
(03-07-2016, 12:49 PM)brattzz Wrote: [ -> ]"COO mentioned that they are much hungrier and passionate than Singaporean when it comes to direct selling."
is it bcos the product is excellent or the DS commission structure is attractive?!!
It's more like Singaporean are more used to being an employee. Also, in general Singaporeans are still not familiar of DS model and some would still harbour a negative impression of DS.
(02-07-2016, 11:50 PM)chialc88 Wrote: [ -> ]So, I repeat my question, should I take profit or buy more?
I'm inclined to take profit based on "zero-cost/capital" theory.
However, I'm very mindful of what CF says in term of mid/long term benefits.
Am I going to lost sleep thinking/scratching my head?
I am skeptical on the "zero-cost/capital" theory, which is based on solely your purchased price. I will review current fundamentals, and opportunity cost, to decide on buy-more or sell-partially calls...
Sharing from CIMB:
Best World International Ltd (ADD, tp:S$1.61▲) - Licence obtained earlier than expected Best World announced that it has been granted a direct selling licence in China. This much anticipated event has come in earlier than expected. The next milestone includes the setting up of requisite service centres. The timeline is for completion by Dec 16 and we expect to see direct sales in China in FY17. Capex is minimal and we do not anticipate a long gestation period as the company already has proven product acceptance in China. We lift our FY17-18F EPS by 23-47% on the new potential in China. Our TP rises on this news. Reiterate Add.
IMO, I doubt, the FY17 EPS growth, will come from China DS market. I reckon, the company, need time to restructure the China biz model. It also need time to re-train distributors, as members. The penalty for misconduct by member in DS model, is very expansive.
The growth, is likely and mostly from Taiwan market.
(not vested, and actively monitoring)
(04-07-2016, 11:14 AM)mslee888 Wrote: [ -> ]Sharing from CIMB:
Best World International Ltd (ADD, tp:S$1.61▲) - Licence obtained earlier than expected Best World announced that it has been granted a direct selling licence in China. This much anticipated event has come in earlier than expected. The next milestone includes the setting up of requisite service centres. The timeline is for completion by Dec 16 and we expect to see direct sales in China in FY17. Capex is minimal and we do not anticipate a long gestation period as the company already has proven product acceptance in China. We lift our FY17-18F EPS by 23-47% on the new potential in China. Our TP rises on this news. Reiterate Add.
3 things a direct selling license will allow Best World to do in China: CIMB
By Michelle Zhu / theedgemarkets.com | July 4, 2016 : 12:18 PM MYT
http://www.theedgemarkets.com/sg/article...china-cimb
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(03-07-2016, 08:15 PM)CityFarmer Wrote: [ -> ]I am skeptical on the "zero-cost/capital" theory, which is based on solely your purchased price. I will review current fundamentals, and opportunity cost, to decide on buy-more or sell-partially calls...
Zero cost/capital make sense if you are the kind that seeks to "feel good" about your investments. I mean, doesn't it feel good to hold onto something that is "free"? But as always, in theory it is free, in
practice it is not.
To feel good in investing, it means falling to your behavioral biases. Most profitable investments for the long term needs to involve certain level of discomfort (contrarian, staying out of the crowd, buying beaten down stocks, watching your neighbour/forum member shout "huat")
"Zero" is very enticing and hence very dangerous. Countless clever people have fallen prey to promises of free gifts (eg. Why does "Buy 1 free 1" sound more attractive than "50% discount" when both are the same mathematically?). IMO, zero cost/capital may unwittedly make us fall into a trap of not willing to cut losses because they are "zero cost" and hence it is easier for me to keep them (for the wrong reasons). To sum it up, we take un-necessary risks with "house money".
Our money/capital has to be treated to be fully fungible across asset classes or those invisible compartments that we created for ourselves.
(04-07-2016, 04:00 PM)weijian Wrote: [ -> ] (03-07-2016, 08:15 PM)CityFarmer Wrote: [ -> ]I am skeptical on the "zero-cost/capital" theory, which is based on solely your purchased price. I will review current fundamentals, and opportunity cost, to decide on buy-more or sell-partially calls...
Zero cost/capital make sense if you are the kind that seeks to "feel good" about your investments. I mean, doesn't it feel good to hold onto something that is "free"? But as always, in theory it is free, in practice it is not.
To feel good in investing, it means falling to your behavioral biases. Most profitable investments for the long term needs to involve certain level of discomfort (contrarian, staying out of the crowd, buying beaten down stocks, watching your neighbour/forum member shout "huat")
"Zero" is very enticing and hence very dangerous. Countless clever people have fallen prey to promises of free gifts (eg. Why does "Buy 1 free 1" sound more attractive than "50% discount" when both are the same mathematically?). IMO, zero cost/capital may unwittedly make us fall into a trap of not willing to cut losses because they are "zero cost" and hence it is easier for me to keep them (for the wrong reasons). To sum it up, we take un-necessary risks with "house money".
Our money/capital has to be treated to be fully fungible across asset classes or those invisible compartments that we created for ourselves.
I am taking the "theory" as a hurdle to compounding, which is the "secret" to success for value investing.