Skip to main content

Value & Pattern: Fascinated By Abstraction

I was surprised to read that Ben Graham is actually not interested in the details of the company, such as what products they make, and so on. Instead, his concern is in the value of the company: A more
abstract concept that is made easier to grasp by accounting numbers. In one occasion, it was said that Ben Graham just looked outside the window and was getting sleepy when an associate gave details of a company. Then, after the end of the brief, Graham just simply said, "But, it is not cheap enough."

I find myself in a similar perspective as him. Frankly, I do not really care about what the company is making, about who is managing the company, and myriad other details. Many people, I believe,
will find it strange. After all, a common requirement often expected by people hiring an equity analyst (in fundamental department) is that the candidate has strong interest in knowing about companies. They are encouraged to learn everything about the companies and  to put it first before the numbers. 

Many people I know, and I believe some of you reading this, will also agree and tend to find comfort when knowing more stories about the company which stock you have interest in. I really don't give much care about any of that. All I want to know is how well the company creates value. In numbers. Equally important, I would also want to know if the expectation implied by the market gives me an opportunity. Only after I know the answer of these two questions, which can not be answered simply
by reading newspaper and gossips, shall I dig deeper. I am interested in the numbers of value. I, to say the least, am dispassionate of the company itself. I believe Ben Graham would be so excited if EVA was conceived in his time.

When talking about price movement, I also have interest mainly in pattern (Elliott Wave). Pattern is a more abstract concept because your mind has to make something to make the pattern comes alive. Certainly it is a more abstract concept than the fact that a certain stock just climbed 10% in a single day or a certain person or groups just bought some stocks. Many people will clamor to that. I, on the other hand, am quite dispassionate about any of that. In most  of the time, I only am interested if the stock movement creates a wave pattern. For all I know, stocks could move up or down. They could easily going up for 7%-15% in a single day depending on how low its share price is.

Sometimes I find it troubling when I realized that when people talk about a stock, I care not much about the company nor how the price is going today. It is a strange world.


Comments

Post a Comment

Popular posts from this blog

Technical Analysis (Wyckoff & Elliott Wave) On BWPT & AALI

BWPT You will likely find these contracting trendline to be very important. Elliott Wave practitioners know the significance of this chart by looking at the possible wedge formation. AALI The expected test of supply came in bar 2 after we saw supply entered in bar 1. Bar 3 suggests that the test was successful. I expect to see an increased in volume when the market exceeds the top of bar 1 to confirm that the buying from May 25 is genuine. Unsurprisingly, analysis in BWPT also suggests an important play is coming shortly.
Post a Comment
Read more

Illusions of Acquisition Value

Continued fromPart 1: How to Calculate Acquisition Value Saya kurang tahu mengenai PGAS, dan bukan maksud saya di tulisan ini untuk menilai apakah value addition sekitar Rp 9 T dari manajemen masuk akal atau tidak. Tapi saya ingin memberi sedikit perspektif mengenai konsep franchise value. Franchise value tercipta karena Pertagas ada di tangan manajemen yang lebih baik. Tangan yang lebih baik. Banyak analis yang memberi outlook optimis dari akuisisi dengan alasan kalau akuisisi membuat sales buyer menjadi lebih besar karena pipeline PGAS menjadi lebih panjang dengan ditambahnya pipeline milik Pertagas. Tapi pipeline Pertagas sudah masuk ke dalam harga beli Rp 16,6 T yang dibayar oleh investor PGAS. Jadi bagaimana bisa hanya mengoperasikan pipeline milik Pertagas, yang mana PGAS bayar dengan premium, bisa memperkaya investor PGAS? Beda ceritanya kalau ceritanya pipeline tersebut tidak perlu dioperasikan oleh karyawan Pertagas lagi, cukup oleh karyawan PGAS tanpa penambahan jumlah...
Post a Comment
Read more

How to Calculate Acquisition Value

Setelah CapEx, akuisisi adalah tipe investasi berikutnya yang menjadi anak emas media masa. Tapi seperti halnya investasi saham kita, tidak semua investasi berhasil. Tapi bagaimana mengetahui apakah suatu investasi dalam bentuk akuisisi bagus untuk shareholder? Saya tidak pintar membaca alasan yang diberikan manajemen untuk akuisisi. Mereka pintar memberikan alasan yang masuk akal dengan menyelipkan keyword sinergi dan semacamnya.  Tapi kita bisa melakukan lebih dari sekedar membaca kutipan manajemen. Kita bisa menghitung nilai dari suatu akuisisi walaupun secara kasar. Dengan demikian, kita bisa tahu seberapa besar premium yang di-charge oleh seller dan menjadi basis apakah nilai sinergi yang diklaim oleh manajemen perusahaan buyer bisa meng-cover premium tersebut dan apakah itu mungkin. Dengan mengetahui jawaban di atas, kita berada di posisi lebih baik untuk mempertimbangkan apakah suatu akuisisi menguntungkan atau merugikan shareholder buyer. Saya tidak membaca Warren ...
Post a Comment
Read more