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Value investing in growth companies: how to spot high growth businesses and generate 40% to 400%
Author
Publisher
John Wiley
Publication Date
2013
Language
English
Description
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Table of Contents
From the Book
Foreword
Preface
Rusmin Ang's Journey
Victor Chng's Journey
How We Met
Overview of the Contents
Acknowledgments
Chapter 1. The Making of a Value-Growth Investor
The Common Journey of New Investors
Short-Term Trading to Long-Term Investing
Growth Investors
Value Investors
Value Investors versus Growth Investors
Value-Growth Investors
Warren Buffett's Journey
Value-Growth Investors
Definition of Growth Companies
Common Misconceptions about Growth Companies
Myth 1. The Higher the Growth Rate, the Better the Company
Myth 2. Fast Growers Are Companies in Fast-Growing Industries
Myth 3. You Cannot Buy Growth Companies at Bargain Prices
Myth 4. Fast Growers Are Companies That Have Small Market Capitalization
Myth 5. Small and Fast-Growing Companies Are Not Covered by Analysts and Institutions
Myth 6. Growth Companies Pay Very Little Dividend
Why Value-Growth Investing?
Capital Appreciation or Intrinsic Value Appreciation
Dividend Growth and Passive Incomes
Summary
Chapter 2. The Secrets of Successful Value-Growth Investors
Healthy Thoughts Lead to Sustainable Results
Mindset 1. Understand the Power of Compound Interest
Mindset 2. Start Young!
Mindset 3. Be a Long-Term Investor!
Mindset 4. Never Leverage to Invest in the Long Run!
Mindset 5. Exercise Independent Thinking
Mindset 6. Be Emotionally Stable
Mindset 7. Think Contrarian When Investing
Mindset 8. Understand Mr. Market (Efficient Market Theory versus Mr. Market)
Summary
Chapter 3. The Jigzaw Puzzle-Four Pieces to Value-Growth Investing
The Jigsaw Puzzle Model
The Art and Science of Investing
Looking for the Right Information
Information Released by the Company
Information from Outsiders
Summary
Chapter 4. Business-The First Piece of the Puzzle
Understand a Company's Business Model
Simple Business
Circle of Competence
Going Beyond the Limit
Competitive Advantage
Knowing the Competitors
Think Like a Customer through the Scuttle-Butting Process
Finding Future Growth Drivers
Understanding Risks-What Can Go Wrong?
Summary
Chapter 5. Management-The Second Piece of the Puzzle
Management Forms the Cornerstone of a Business
Criterion 1. Trustworthiness
Criterion 2. Candid in Reporting
Criterion 3. Aligned with Shareholders' Interests
Criterion 4. Track Record/Experience
Criterion 5. Visionary Managers
Summary
Chapter 6. Numbers-The Third Piece of the Puzzle
Numbers Do Not Lie
Numbers to Look at When Reading the Income Statement
Revenue
Cost of Goods Sold
Gross Profit
Expenses
Net Profit
Earnings per Share (EPS)
Numbers to Look at When Reading the Balance Sheet
Noncurrent Assets
Current Assets
Noncurrent Liabilities
Current Liabilities
Shareholders' Equity
Current Ratio
Return on Equity
Debt-to-Equity Ratio
Numbers to Look at When Reading the Cash-Flow Statement
Cash Flow from Operations
Cash Flow from Investment
Cash Flow from Finance
Summary
Chapter 7. Valuation-The Fourth Piece of the Puzzle
The Valuation of a Stock
Price-to-Earnings Ratio
Types of PE Ratio
Price-to-Earnings-to-Growth Ratio
Discounted Earnings Model
Intrinsic Value
Margin of Safety
Undervalued
Fair Value
Overvalued
Summary
Chapter 8. Screening-Buy-Monitor-Sell
Screening (Using Numbers against Competitors)
Stage 1. Consistency in Key Performance Indicators
Stage 2. Comparing the Compound Annual Growth Rate
Stage 3. Finding Consistency or Increases In Margins
Stage 4. Digging Further into a Company's Debt and Cash Position
Stage 5. Digging Further into Other Numbers to Confirm Your Pick
Conclusion
Buy, Monitor, and Sell
Buy, Buy, and Buy
Monitor, Monitor, and Monitor
Online Monitoring
Offline Process
Sell, Sell, and Sell
Summary
Chapter 9. Portfolio Management for Growth Companies
Understanding Your Portfolio
Types of Diversification
Personal Diversification
Company Diversification
Industry Diversification
The Sky Is the Limit
Summary
Chapter 10. Avoid Common Mistakes
The Dos and Don'ts of Investing
Mistake 1. You Think You Are a Long-Term Investor but You Are Really a Speculator
Mistake 2. Timing the Market
Mistake 3. Investing in High-Technology and IPO Companies
Mistake 4. Investing in Companies that Are Not Consistent
Mistake 5. Buying a Growth Trap (Not Focusing on the Quantitative Side)
Mistake 6. Buying a Value Trap (Not Focusing on the Qualitative Side)
Mistake 7. Sell Your Winners; Keep Your Losers
Mistake 8. Diversification Mistakes
Summary
Chapter 11. Case Studies and Conclusion
Bibliography
About the Authors
Index
Excerpt
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Author Notes
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More Details
ISBN
111856779
9781118567791
9781118567791
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