20-02-2011, 11:04 PM
30-03-2011, 08:31 PM
Titled 'The seven immutable laws of Investing', I think this is a gem from Montier.
1. Always insist on a margin of safety
2. This time is never different
3. Be patient and wait for the fat pitch
4. Be contrarian
5. Risk is the permanent loss of capital, never a number
6. Be leery of leverage
7. Never invest in something you don’t understand
Some highlights:
- In point 1, Montier mentions the use of a deep value screen which is as follows:
1) Earnings yield of twice the AAA bond yield (as of writing, the 10 year AAA corporate bond is going for 3.98% which means this screen calls for a P/E of 12.6x).
2) Dividend yield of at least two-thirds of the AAA bond yield. (or 2.65%)
3) Total debt less then two-thirds of the tangible book value.
4) An extra criterion- a Graham and Dodd P/E of less than 16.5x
Read the full article here.
Any comments on tweaking the values for the Singapore context?
1. Always insist on a margin of safety
2. This time is never different
3. Be patient and wait for the fat pitch
4. Be contrarian
5. Risk is the permanent loss of capital, never a number
6. Be leery of leverage
7. Never invest in something you don’t understand
Some highlights:
- In point 1, Montier mentions the use of a deep value screen which is as follows:
1) Earnings yield of twice the AAA bond yield (as of writing, the 10 year AAA corporate bond is going for 3.98% which means this screen calls for a P/E of 12.6x).
2) Dividend yield of at least two-thirds of the AAA bond yield. (or 2.65%)
3) Total debt less then two-thirds of the tangible book value.
4) An extra criterion- a Graham and Dodd P/E of less than 16.5x
Read the full article here.
Any comments on tweaking the values for the Singapore context?