SembCorp Industries

[paullow]

Hi specuvestor, in addition to using the simple pb ratio, for serious investing, it is imperative to do valuation of the company shares ie sum of parts and determine the 'exact' pb and hence margin of safety. Personally i realise that doing this exercise will tend to increase my comfort level to purchasing equities both in a down market as well as in a upswing n will more often than not translate to limiting my downside in these cases.

Hi Paul

Agree totally that's why I use the word "correlated"

But Buffet has said many times in his AR that book value is still the best dirty "guesstimate" of value so that's a baseline to start, and RNAV would be a good refined approach.

In addition, these are just valuing the assets but nothing on the cashflow generated from the assets. If you followed my post I think of listed equity as at least 3 layered: asset, business and structure. It's still only one layer that we are looking at, but IMHO it's an important indicator to look at when we are talking about DOWNSIDE.

Hi specuvestor,
agreed about the layered concept. Apart from analysing the sum of parts to determine an acceptable entry price, personally i use dividend analysis as the key n this over a decade history very conveniently sums up the three layered concept which we have discussed.
paul