Isetan Singapore

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#51
Most 'deep value' or 'value trap' (depending on your perspective) require a very long holding period before the value is realised. They are so cheap because most investors have 'lost hope' in them. Isetan, like a number of property stocks which refuse to unlock value for opmi, is undoubtedly cheap.

The cure for this is to have a lot of these stocks in your portfolio, which will force you to reduce your attention on any one particular stock (having more attention on a stock works against those who are more impatient). If the portfolio is well curated (none of the stocks turn out to be duds or blow up) the strategy produces a high-probability of low/modest returns (5-8% p.a.), with low risk. This is the Graham style.

This may sound easy but it isn't for everybody, especially those looking for higher returns. Technical competence is also still required to avoid duds, because not all cheap stocks offer good and sure value. But it is easier than trying to model and forecast growth. As mentioned before, I think this is a very safe way to make above-average returns.

The WB style of identifying growth stocks require different skillsets, which are also harder to acquire. Compared to the Graham style, there is no formula. Terms like 'competitive advantage' and 'moat' mean different things to different people. And you're supposed to bet big when you identify such kinds of good stock selling at cheap prices. Given the difficulty of the task, and as such portfolios will be concentrated by design, there will be a lot more stress on the investor which is generally not so good for decision making.

The cure for this is to have a lot of growth stocks in your portfolio. But I think you will have to be some kind of WB-like genius to be able to pick so many 'sure win big' stocks. Either that or you're a very lucky investor.

I think new investors who are looking towards a lifetime of successful investing should start with the Graham style and pick up the skillsets along the way -- accounting knowledge, industry/business knowledge (breadth, depth, and historical), and emotional management -- before doing more WB style.
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#52
Thanks ghchua for the background info. I am heartened that there are activists shareholders for Isetan, generally I find activists shareholders a rare breed in SG stks.

There are many insights one can glean from WB's letters, actions, books on WB, etc - but fundamentally I think he invests only when he is sure(barring unforeseen circumstances) that he can make money. In this particular case, realizing value is a "difficult" process, i.e. not as straight fwd, albeit it could be just a matter of time.

While it is indeed admirable for those investors holding on for decades, there are dangers of the value trap outliving the investor; opportunity costs to consider; "temperament/utility value" consideration like karlmarx mentioned in the Tesla thread. Unlike WB who enjoys watching his money grow, personally as an investor, I have real use for the pot of gold I earn from my investments. Big Grin
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#53
(15-08-2021, 03:36 PM)dreamybear Wrote: There are many insights one can glean from WB's letters, actions, books on WB, etc - but fundamentally I think he invests only when he is sure(barring unforeseen circumstances) that he can make money. In this particular case, realizing value is a "difficult" process, i.e. not as straight fwd, albeit it could be just a matter of time.

I don't think there is any sure win kind of investments. Even there is, you won't be able to do it consistently. Fundamentally, a stock might give you a good outlook and prospects, but valuation might be expensive. You are paying for the good business outlook and future cash flow from those good businesses, unless you discover them very early. If you did, then most likely the stock is loss making or making very little profits and you must be able to have the foresight to buy then.

(15-08-2021, 03:36 PM)dreamybear Wrote: While it is indeed admirable for those investors holding on for decades, there are dangers of the value trap outliving the investor; opportunity costs to consider; "temperament/utility value" consideration like karlmarx mentioned in the Tesla thread. Unlike WB who enjoys watching his money grow, personally as an investor, I have real use for the pot of gold I earn from my investments.  Big Grin

Isetan is not a value trap. For earlier investors, they would have gotten back most (if not all) of their capital from those special dividends to utilize those section 44 tax credits. Now, they are waiting for the next pot of gold, hopefully from selling Wisma Atria Podium Block.
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