Elite KSB will be undegoing a liquidation in 6 months time. It NAV is only about 0.6 cents. Why is its price trading at far above its liquidation value? This reminds me of a story told by Benjamin Graham. It matters not what the facts are or what you think, in the short term, the herd thinking matter most. Thus, an intelligent investor should not fall prey to herd thinking.
” “Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, “Oh, I’m really sorry. You seem to meet all the tests to get into heaven. But we’ve got a terrible problem. See that pen over there? That’s where we keep the oil prospectors waiting to get into heaven. And it’s filled—we haven’t got room for even one more.” The oil prospector thought for a minute and said, “Would you mind if I just said four words to those folks?” “I can’t see any harm in that,” said St. Pete. So the old-timer cupped his hands and yelled out, “Oil discovered in hell!” Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. “You know, that’s a pretty good trick,” St. Pete said. “Move in. The place is yours. You’ve got plenty of room.” The old fellow scratched his head and said, “No. If you don’t mind, I think I’ll go along with the rest of ’em. There may be some truth to that rumor after all.”
From Wall Street Journal:”The New York Stock Exchange’s new boss, Jeffrey Sprecher , said he plans to reorient the exchange back toward individuals and away from the high-frequency traders who play an increasingly large role in the financial markets.“Everything we do on the NYSE should be focused on: Are we making it a better environment for individual investors and people who manage individual investors’ retirement accounts?”
Sprecher took aim at the practice of paying rebates to active traders, which he and others say provides incentives for those companies to buy and sell securities without much concern for the value of stocks. It now is commonplace, however, and many exchanges see it as a fundamental part of their effort to attract business.
“I don’t like the idea that you pay people to trade; I don’t think that it should be done,” Mr Sprecher said. “I don’t think it should be legal. It puts wrong incentives in the market. People should come and want to own great companies because they want to go for the economic ride of that company.”
Well-said. SGX,time to listen and follow.
Sino Grandness released a brand value report which states its brand for its beverage product “Garden Fresh” is worth about $714 million.
However, its market capitalisation as of today is about $450 million, much less than the brand value.
Is Sino Grandness brand value severely underatted? As brand value evaluation report is subjective and considering that “Garden Fresh” is going for IPO soon, the brand value may be exaggerated.
Unless Garden Fresh can monopolise the market which is unlikely, it will have to face onslaught of competitors once it reaped success, so brand value can change in future.
An animated and concise video explaining how the economy works and the present state of US economy by well known hedge fund manager Ray Dalio. Worth watching for 30 minutes.
Insiders are selling Sarin Technologies shares. Although insider selling aren’t an accurate indicator of a stock’s fundamentals but with Sarin shares at all time high, for the shares to climb higher, its earnings has to grow more which is not easy.
Businesstimes reports today:”Bold claims by property experts of wielding the secret technique of buying homes with no cash outlay or owning multiple properties have proliferated in recent months, as investors look for ways to circumvent the successive rounds of cooling measures.”
When the gullible gets sucked into the property bubble, you can be sure that it will be bursting soon.
Pennies stock are surging ahead, some even doubling within a week. This is a sign of a market top forming. 2014 may be the year of the bear. According to data from STI, in Horse years of 1990,2002, STI was in a bear market. 2014 is another Horse year, will it be different?