m*********a
发帖数: 3299 | 1 is not reading their reports for individual casual investors. There are too
many accounting tricks that we are not able to fully appreciate until it
reveals itself.
What I believe is a good approach for FA analysis is identifing strong
sectors in the near future, and invest in the leader of sectors. You will be
better off. No need to understand their report. For example if you are
bullish to techs, investing in GOOG INTC. If you are bullish in consumer
electronics, investing in AAPL, bullish in | d*****z
发帖数: 114 | 2 My opinion:
a). FA is possible. Great FA can earn big return, but need long-term
background building and a lot of time and energy.
b). it is difficult for average investor with limited time and knowledge to
do effective FA. Active investing based on mediocre FA will do worse than
passive indexing.
c). Very true. Industry analysis is very important, and reports are not the
holy-grail and probably you don't need to dig every corner of it to complete
your FA. But remember, investment is a game abou
【在 m*********a 的大作中提到】
: is not reading their reports for individual casual investors. There are too
: many accounting tricks that we are not able to fully appreciate until it
: reveals itself.
: What I believe is a good approach for FA analysis is identifing strong
: sectors in the near future, and invest in the leader of sectors. You will be
: better off. No need to understand their report. For example if you are
: bullish to techs, investing in GOOG INTC. If you are bullish in consumer
: electronics, investing in AAPL, bullish in
| s**********n
发帖数: 868 | 3 I can not agree more.
Industry FA is important, and an up-to-down method is perhaps more suitable
for individual investors, but it also needs very solid or all-around work,
and is much more complicated than a naive bullish or bearish feeling. At
least one needs to have a reasonable forecast on the industry's future
demand and supply trends, cost structure and pricing dynamics in terms of
numbers, and understand what the assumptions are. To achieve that, a clear
mind of the industry's business mo
【在 d*****z 的大作中提到】
: My opinion:
: a). FA is possible. Great FA can earn big return, but need long-term
: background building and a lot of time and energy.
: b). it is difficult for average investor with limited time and knowledge to
: do effective FA. Active investing based on mediocre FA will do worse than
: passive indexing.
: c). Very true. Industry analysis is very important, and reports are not the
: holy-grail and probably you don't need to dig every corner of it to complete
: your FA. But remember, investment is a game abou
| K****D
发帖数: 30533 | 4 Are you assuming GOOG, INTC, AAPL and LMT did not play tricks in
their books (or the chance is really low)?
If the sector you favor is such an industry that you couldn't
understand or evaluate the accounting, then there is always a
risk that you strategy won't work. You would have picked Enron.
too
be
【在 m*********a 的大作中提到】
: is not reading their reports for individual casual investors. There are too
: many accounting tricks that we are not able to fully appreciate until it
: reveals itself.
: What I believe is a good approach for FA analysis is identifing strong
: sectors in the near future, and invest in the leader of sectors. You will be
: better off. No need to understand their report. For example if you are
: bullish to techs, investing in GOOG INTC. If you are bullish in consumer
: electronics, investing in AAPL, bullish in
| l**********t
发帖数: 5754 | 5 suppose you can identify the leading sector/industry/company, so can other
investors. The information will be fully priced in if not over-priced.
Unless you find something that others haven't, good companies may not be
good investments. On average & over long term, glamour stocks with high P/E
(GOOG) underperform. | s********h
发帖数: 158 | 6 Well said! good companies are not always good investments, since good
companies are usually priced at premium. Paying high prices for hot stocks
is a good recipe for underperformance. That being said, "usually" is not the
same as "always". IMHO, Mr. Markets misprices rather quite frequently, so
the virtue of patience is important.
The importanace of FA (both qualitatively and quantitatively) is well
discussed in Graham's Intelligent Investor.
Identifying leading companies in an industry is one g
【在 l**********t 的大作中提到】
: suppose you can identify the leading sector/industry/company, so can other
: investors. The information will be fully priced in if not over-priced.
: Unless you find something that others haven't, good companies may not be
: good investments. On average & over long term, glamour stocks with high P/E
: (GOOG) underperform.
| K****D
发帖数: 30533 | 7 Another way not to be cheated by accounting is to pick an
industry that it's very hard to cheat, or historically
there is no example of cheating. This will limit the choices
by a lot though.
the
used
【在 s********h 的大作中提到】
: Well said! good companies are not always good investments, since good
: companies are usually priced at premium. Paying high prices for hot stocks
: is a good recipe for underperformance. That being said, "usually" is not the
: same as "always". IMHO, Mr. Markets misprices rather quite frequently, so
: the virtue of patience is important.
: The importanace of FA (both qualitatively and quantitatively) is well
: discussed in Graham's Intelligent Investor.
: Identifying leading companies in an industry is one g
| s**********n
发帖数: 868 | 8 FA is not about finding good companies. It's about finding how good a
company is compared to its price tag.
Investing in a leading company in a leading sector is kind of a momentum
play, not a FA-based investment.
E
【在 l**********t 的大作中提到】
: suppose you can identify the leading sector/industry/company, so can other
: investors. The information will be fully priced in if not over-priced.
: Unless you find something that others haven't, good companies may not be
: good investments. On average & over long term, glamour stocks with high P/E
: (GOOG) underperform.
| g***8
发帖数: 27 | 9 want to know more about which particular industries 's accounting hard to
cheat? those with really hard cash numbers? retail? just a guess. also
want to start FA... but dont know where to start from....
【在 K****D 的大作中提到】
: Another way not to be cheated by accounting is to pick an
: industry that it's very hard to cheat, or historically
: there is no example of cheating. This will limit the choices
: by a lot though.
:
: the
: used
| K****D
发帖数: 30533 | 10 Retail is a good example. I just don't know how they can cook
their books. They can only cook the outlook.
The basic idea is to find an industry with easy running mode
and down-to-earth products. The easier, the less work for you
to do FA.
【在 g***8 的大作中提到】
: want to know more about which particular industries 's accounting hard to
: cheat? those with really hard cash numbers? retail? just a guess. also
: want to start FA... but dont know where to start from....
| | | s********h
发帖数: 158 | 11 That's not quite true. It's very easy to fudge numbers in retail in many
ways: revenue recognition, income smoothing, inventory tricks (lifo vs fifo)
, depreciation rate change, off-the-book arrangements, joint ventures, you
name it.
just to give an example, abercrombie recognizes revenue upon sale, but puts
aside a reserve to account for returns. aeo recognizes revenue when the
return date is passed. both methods are allowed by the gaap. so how do you
tell which firm is generating better sales?
【在 K****D 的大作中提到】
: Retail is a good example. I just don't know how they can cook
: their books. They can only cook the outlook.
: The basic idea is to find an industry with easy running mode
: and down-to-earth products. The easier, the less work for you
: to do FA.
| K****D
发帖数: 30533 | 12 I agree with what you said. But I still tend to believe if you
following Abercrombie's reports/conference calls for several
quarters, you will be able to tell:
1) if the company has done anything differently in the past few
quarters.
2) if the analysts have already understood the accounting methods
thoroughly when they give estimates.
3) Does the stock look expensive or cheap based on the evaluation
of 1) and 2).
fifo)
puts
【在 s********h 的大作中提到】
: That's not quite true. It's very easy to fudge numbers in retail in many
: ways: revenue recognition, income smoothing, inventory tricks (lifo vs fifo)
: , depreciation rate change, off-the-book arrangements, joint ventures, you
: name it.
: just to give an example, abercrombie recognizes revenue upon sale, but puts
: aside a reserve to account for returns. aeo recognizes revenue when the
: return date is passed. both methods are allowed by the gaap. so how do you
: tell which firm is generating better sales?
| d*****z
发帖数: 114 | 13 I agree with Kenny on this one. I think your opinion is a little extreme
when you say "there is no industry where cooking books is less difficult".
That is not true. Compare retailer to financials, or say compare Macy/Costco
to Citi/GS for example. I think definitely the former's book is easier to
understand and analyze. True. If the company deliberately cooks the book,
then it has potentially many ways to try. But still, it would kill a lot of
more brain cells for Macy/Costco management to cook
【在 s********h 的大作中提到】
: That's not quite true. It's very easy to fudge numbers in retail in many
: ways: revenue recognition, income smoothing, inventory tricks (lifo vs fifo)
: , depreciation rate change, off-the-book arrangements, joint ventures, you
: name it.
: just to give an example, abercrombie recognizes revenue upon sale, but puts
: aside a reserve to account for returns. aeo recognizes revenue when the
: return date is passed. both methods are allowed by the gaap. so how do you
: tell which firm is generating better sales?
| m*********a
发帖数: 3299 | 14 Another approach is buying businesses that are temporarily beated down
because of economic context and will not disappear in the foreseeable future
, i.e., no bankrupt risk. For example PG for consumer product, XOM for
energy, and LMT for defenses. It will be a deal if you get it in lower price
. In this sense, IBM, APPL, microsoft, GOOG are fads and may disappear or
become irreverent in 10 years when technology involves. The prices of fads
can always go lower and lower, from bad to worse, like | g***8
发帖数: 27 | 15 very interesting discussion. I am trying my best to follow those
accounting thing this very educational post.... however, as an ordinary
investor, with limited time and accounting knowledge, how far should
this analysis go to achieve a reasonably sound investment decision?
extreme
difficult".
Macy/Costco
easier to
book,
lot of
former
cooked
and
【在 d*****z 的大作中提到】
: I agree with Kenny on this one. I think your opinion is a little extreme
: when you say "there is no industry where cooking books is less difficult".
: That is not true. Compare retailer to financials, or say compare Macy/Costco
: to Citi/GS for example. I think definitely the former's book is easier to
: understand and analyze. True. If the company deliberately cooks the book,
: then it has potentially many ways to try. But still, it would kill a lot of
: more brain cells for Macy/Costco management to cook
| s********h
发帖数: 158 | 16 Very good discussion, and I appreciate your comments.
What I meant by "there is no industry where cooking books is less difficult"
is that cooking books is really independent of the industry - complex or
simple. Rather it is more related to certain factors or conditions. The most
obvious ones are:
1) Incentive or pressure - for instance, a firm needs to meet earnings
expectations because compensation is tied to it
2) Opportunity - exists when there is a weakness in the internal or external
contr
【在 d*****z 的大作中提到】
: I agree with Kenny on this one. I think your opinion is a little extreme
: when you say "there is no industry where cooking books is less difficult".
: That is not true. Compare retailer to financials, or say compare Macy/Costco
: to Citi/GS for example. I think definitely the former's book is easier to
: understand and analyze. True. If the company deliberately cooks the book,
: then it has potentially many ways to try. But still, it would kill a lot of
: more brain cells for Macy/Costco management to cook
| s********h
发帖数: 158 | 17 Others may have different opinions, but I'd suggest limiting your choices to
those firms:
1) With long history of profitable and stable operations (at least 15 years)
2) Reasonable insider ownership, 10-30%
3) Paying dividends
4) Leaders in their respective industry, or with durable competitive
advantage
5) Reasonably priced, for instance, EV/EBITDA < 10
6) No or low debt relative to earnings
7) Whose businesses you understand reasonably well as to be able to project
with some certainty about th
【在 g***8 的大作中提到】
: very interesting discussion. I am trying my best to follow those
: accounting thing this very educational post.... however, as an ordinary
: investor, with limited time and accounting knowledge, how far should
: this analysis go to achieve a reasonably sound investment decision?
:
: extreme
: difficult".
: Macy/Costco
: easier to
: book,
| b****e
发帖数: 460 | 18 Well said, although some GURU can figure out the problems of an investment b
ank by just read its 10-K's.
http://seekingalpha.com/article/179056-buffett-avoids-radioactive-lehman-bro
thers-bullet
Costco
of
【在 d*****z 的大作中提到】
: I agree with Kenny on this one. I think your opinion is a little extreme
: when you say "there is no industry where cooking books is less difficult".
: That is not true. Compare retailer to financials, or say compare Macy/Costco
: to Citi/GS for example. I think definitely the former's book is easier to
: understand and analyze. True. If the company deliberately cooks the book,
: then it has potentially many ways to try. But still, it would kill a lot of
: more brain cells for Macy/Costco management to cook
|
|
