Intelligent Investments: SANG!!

Thursday, February 22, 2007

SANG!!

Man Sang reported stellar earnings and the stock responded jumping nearly 15%. It is now my largest percentage gain, since inception. Too bad I don't own more. Overall, the portfolio was damaged by Genentech which suffered from an overall pharma decline, and TAIT on a low volume sell off.

The portfolio finished up 0.09% (just over $230) as it swung wildly through the day. At one point, the portfolio was up nearly 1% and down nearly 1%.

1 comment:

QUALITY STOCKS UNDER FOUR DOLLARS said...: Nice post right on topic.; January 3, 2013 at 12:23:00 PM PST

Buffett's Value Formula (?)

Warren Buffett hasn't exactly published his formula for what he calls the intrinsic value of a company, but he has dropped a number of hints. He apparently multiplies estimated future earnings by a confidence margin between zero and a hundred percent (a bird in the bush being worth 0.5 birds in the hand, and all that; bush birds are the earnings you hope for, and hand birds are the earnings you're confident will materialize). He then compares these probable earnings with something he has total confidence in, by using a U.S. treasury yield as his discount rate. In calculator form it looks like this:

This calculator doesn't use fancier math than the original one did. Its advantage is that it forces you to be explicit about your earnings expectations. It also automatically provides you with a hard-headed investment strategy: always invest in government bonds, unless you can find something else you are confident will yield more cash.

One other hint that Buffett has dropped over the years is that he can estimate value in his head in about five seconds; so whatever he does he keeps it simple, slugger.