Scroll to bottom for my 1st youtube educational video
1st youtube video I created! The more I see myself, the more I feel like puking. Haha.
Scroll to bottom for my 1st youtube educational video
What do you think when I mention VISA? Yea 99% of you will know this brand. I love this company and I have been vested into this amazing company.
VISA has a sustainable competitive advantage. Visa has an enviable competitive position within its industry; as one of three dominant credit-card brands, it benefits from strong network effects. Consumers demand to use Visa's credit and debit cards because of the convenience, security, and rewards they provide, which forces merchants to accept Visa's cards to satisfy those customers and earn their business. This positive feedback loop makes the entire network more valuable over time and prevents newcomers from gaining traction.
Visa also possesses multiple intangible advantages. The company has spent decades building a trusted, globally recognized brand through massive advertising campaigns like the one we saw at this year's Summer Olympics in Rio. And the 83 billion-plus transactions Visa processed in 2016 add to a huge database of valuable proprietary information that can be used to offer ancillary services and make customer relationships even stickier.
Because of these advantages, Visa is insanely profitable. The company's operating margin is consistently higher than 60%, and its return on capital (in the mid- to high teens) is well above its cost. Those profits have attracted an ever-growing cadre of competitors trying to capture a tiny piece of the pie, but Visa's relative size allows it to invest heavily in research and development to maintain a technological edge and fend off the newbies.
VISA has very predictable revenue.
Every time someone makes a purchase with their Visa credit or debit card, whether in a physical store or online, Visa's cash register also rings. If the global economy stays reasonably healthy and consumers continue to transition from cash to electronic payments, we can expect Visa's share to expand as the whole pie does. Further, Visa does not take on the risk of issuing credit to consumers, leaving that business to the card-issuing banks. Instead, in exchange for a small piece of each transaction, Visa ensures the digital money moves smoothly from customer to merchant.
I hope you learn something new today. Have a great week ahead.
As the market rocks up and down, I'm doing nothing while letting my investment thesis on options work do it's work. Are you a speculator or an investor? Speculators usually don’t survive more than one economic cycle while investors reach decent returns. In investing, most people are attracted by the prospect of quick gains and fall victim to the many fads of Wall Street. Therefore, it’s more important to know what not to do than what to do to reach long lasting satisfying returns.
Seth Klarman attributes these are the characteristics of successful investors.
Unsuccessful investors have the opposite characteristics:
One investment thesis I have on a company. Paypal.
The payments giant posted a solid fourth quarter, with revenue and non-GAAP EPS each up 17% from last year's levels. PayPal ended the year with 197 million users (up 10%) and improved engagement, as the number of payment transactions and total payment volume increased 23% and 22%, respectively, in the fourth quarter, and 24% and 26% for the full year. But while those stats are impressive, we agree with CEO Dan Schulman's statement that PayPal is "just scratching the surface" of the market opportunities that lie ahead.
PayPal is well positioned to benefit from increasing consumer adoption of mobile payments. The company processed more than $100 billion of mobile payments during 2016 (up 55%), and more than half of those who used the PayPal platform did so via their mobile device. This makes PayPal a powerful partner for merchants around the world as they move toward a multichannel business model. PayPal's One Touch functionality enables users to check out quickly and securely at over 5 million merchants. According to CEO Schulman, One Touch has an 87% conversion rate on mobile (turning site browsers into buyers), compared with an industry average of just 44%!
PayPal's transaction margins continued to decrease thanks to a mix shift toward lower-margin products including Venmo and Braintree, but the company did a nice job of offsetting this effect by controlling operating expenses. I believe there is plenty of opportunity for margin expansion in the coming years as payment volumes increase and the company begins to enjoy the benefits of scale.
Just straight to the point! Stock that I will be starting a position on.
Accenture continues to take “tremendous” share and is positioned to benefit as its nearly 400,000 employees help companies transition to a cloud/digital world. Its first-quarter 2017 revenue increased 7% in local currency. Its digital/cloud/security offerings grew by double digits, accounting for 40% of total revenue. It has $4 billion in net cash and generated a 12% FCF margin. It generated a return on invested capital of 53% and return on equity of 62%. It maintained full-year outlook for revenue growth (5%-8% in local currency), operating margin, and FCF (of $4 billion to $4.3 billion), but lowered EPS guidance because of stronger assumed FX headwinds. It now expects full-year GAAP EPS of $5.64-$5.87, compared to previous guidance of $5.75-$5.98. Accenture remains one of the most recognized and valuable brands in the world, and it's an exemplar of doing well by doing good. It has been on Fortune’s World’s Most Admired Companies list for 14 consecutive years, Fortune’s 100 Best Companies to Work for eight consecutive years, and nine consecutive years on Ethisphere’s World’s Most Ethical Companies list. Accenture’s Chairman and CEO is recognized by the Harvard Business Review as one of the 100 Best Performing CEO’s in the World.
As 2017 started, I see more job files coming into my company. It was a nice start since having to end 2016 with slower growth. I'm currently working 2 to 3 jobs, I'm constantly finding time just to catch rest. Sometimes, I even wonder why I work so hard despite not needing too. However, if you ask me to stop helping people, i can't do it. So just work hard till I drop -___-
Just finished the 3rd class for investing with an unfair advantage. With every class, my only goal is to have the most successful % of students each class compared to any other investing class out there. So far, not bad =)
Spend the next 6 mins hearing what he has to say if you haven't achieve any of your goals, the pain he went through and probably the pain most people will have.
Reflection of 2016
Looking at the world from the inside of others. When I do that, I feel the pain, sense the happiness and most importantly a story. A story on what made the person who he or she is today. When I do this, I stop per-judging someone, I listen and pay attention.
2016 has been a year with lots of ups and downs. My life is just like the VIX. It's been one of my best years but it's also one of the most painful ones I had to go through. My belief in living my life serving others, so much so it has taken a really big toll on me, however it's worth it and long term it's going to be better.
A FULL PAGE feature on prime slot, Christmas sunday public holiday, Straits Times!! It's crazy! I'm truly grateful and kind lost of words!!
I hate the lime light, i hate attention, however I learn from my life mentor Peter Sage, if you want to help the world, there will be some sacrifices you have to make. I hope to be brightest candle in the room and light up everyone's candle at once. I tried to light everyone's candle one by one but by the time I come round one circle, the 1st one has vanished. It didn't work. I know there are friends defending me, but friends, it's really ok. Negativity doesn't take a toll on me, it will only take a toll on me if people around me are affected. So smile and don't give a shit. I stay in a HDB flat, I drive a van, I don't wear watches, my belt is $10, my samsung is the cheapest samsung I could buy from the outlet, I eat at home and love hawker food. Face value doesn't mean much to me.
I guess most of you know I run my own business (www.yoonly.com) For the 1st time since I step foot into this company 8 years ago, it's the 1st year growth has slow down. I feel painful and I have took away all my own bonus, director fees to a stage I feel like I'm working for nothing. Partly it's my fault as I have shift my focus to teaching others, my business suffered. To be frank, I'm not really sure what to do. I don't have close business friends that own business so I'm like kindna on my own here. I plan to work with a heart and empower my staff more, that's all for now.
Why am I saying all this? I want you all to know, I'm serious about helping others and in return others will help others. It's a vision I have and I hope you come along with me on this journey.
I believe you have to do what you preach and say what you do. Being a mentor to many will really quicken the pace of the learning curve. I post my trades before I do them, not AFTER. I do not give a reason to my students to not do well.
How can I be such a cock and do so well? Remember I keep saying
1) Consistency is the key
2) It's ok to be wrong, it's normal. If you can undo your wrong, profits will automatically come in.
3) When you invest, do it safely.
Have a great 2017.
Where China Is Now & Where It Is Going
China is the growth motor of the global economy. It consumes so much and when there is a decline in consumption, the world panicks.
A very important development for investors is the rise of the middle class in China because those are the people that can afford a car, education, discretionary pleasures, and further fuel the Chinese economy and spur global demand for everything.
Chinese economic growth has recently slowed from 9% to the current 7% and sent short term shockwaves across the world. It is very important to see if China will be able to continue on this growth path.
What is important from the above data is that China still has a long way to go. A long way to go means more economic growth will happen as services increase in order to cater for a bigger middle class, productivity will increase due to higher education and more skilled workers, and agriculture will develop or/and become less profitable and not the only option for many. Fewer people working the fields will continue to spur global demand for machinery and also food. As China develops, its food appetite gets bigger which also helps the U.S. economy. The long-term trend is clear and inevitable which should reassure investors that the global economy will continue on its growth path and deliver amazing returns.
We will undoubtedly see more failed anticipations until some real economic shock hits China. The government will then intervene and put China back on to its growth track. Economic cycles are natural, especially for a fast-growing country. The downturn might last for a few months or years but eventually the long-term trend is clear.
"Live your life serving others" That's what I believe in. The funny thing is when you do that, so much comes back to you, sometimes I really wonder if I really deserve all this...
A cozy lunch with Mary Buffett, just the 4 of us, teaching hundred over students, engaging 1000 people and a interview on asian entrepreneur.. all these over the past few days..
The World Bank revised its 2016 global economic growth forecast down to 2.4 percent from the 2.9 percent pace projected in January. The main reason for this downward revision came from lower commodity prices globally and soft investments in developed countries. But what’s important here is the divergence between the growth in emerging versus developed economies.
Advanced economies are expected to grow 1.7% in 2016, while emerging economies will grow 3.5%. In 2017 and 2018, as commodity prices are expected to rebound from the 2016 lows, emerging markets will reach growth of 4.4% and 4.7%, respectively, while advanced economies will grow only 1.9% in both years.
Real GDP growth and estimated growth. Source: World Bank.
From an economic perspective, India is the clear leader, followed by China and Indonesia. But before rushing into these emerging markets, we have to analyze the risks.
As emerging markets are vast, any kind of trouble in Japan, Europe or the U.S. immediately impacts them as investors consider emerging markets risky due to their volatility, and thus pull their funds out at the first sign of trouble. But, the underlying fundamentals, demographics and economic growth makes emerging markets a much better certainty than developed economies sustained only by quantitative easing and low interest rates.
From a PE perspective, the iShares MSCI Emerging Markets ETF has an average PE ratio of 11.62 (this is a skewed metric because it does not take negative EPS into account, but it’s still good for comparison with the S&P 500), and the S&P 500 ETF has an average PE ratio of 19.75 (this also doesn’t include negative PE ratios).
On the one hand, we have better economic growth prospects, better demographics, and cheaper stocks with emerging markets, while on the other we have aging populations, slow economic growth, and expensive stocks in developed markets.
From a long-term perspective, the picture is very clear: emerging markets will be the drivers of global growth and returns to your portfolio. But from a shorter-term perspective, emerging markets have more short term risks, from currency swings to volatility from panic selling. As such, the best thing to do is to rebalance your portfolio weights.
When emerging markets are hot, lower your exposure, and when other investors are running away—as they did in January 2016,—increase your ownership. To execute such a strategy, you have to be willing to accept potential short term declines, and be ready to buy more when they occur. In the long term, you’ll be more exposed to the inevitable growth emerging markets offer.
Warren Buffett’s most commonly referenced piece of advice is to buy a good business with a large moat at a fair price and hold it forever. This is easier said than done as in today’s complex world, moats become stronger and weaker at the same time.
A moat, or an economic moat, is a term coined by Buffett that refers to a company’s competitive advantage over similar companies competing in the same industry without which there is little to prevent a company’s competitors from stealing market share.
Big companies create moats to push away the competition, but often those moats aren’t profitable and companies eventually weaken under the pressure of slower growth and no profits. By analyzing a few examples in various sectors, we’ll find evidence of what makes a company a successful moat builder as that company is the one you’ll want to have in your portfolio.
Examples of Companies With Seemingly Huge Moats
Nike Inc. (NYSE: NKE) is a perfect example of a brand with a moat. It has a market share of more than 50% in the U.S. when including the Converse and Jordan brands. Also, as it is the largest sports footwear company in the world, it can afford to spend 10% of its revenue per year to strengthen its moat.
Nike spent $3.27 billion for demand creation in fiscal 2016, $3.21 billion in 2015, and $3.01 billion in 2014. Due to its large gross margins of 46%, Nike can afford to spend such an amount on marketing and further strengthen its leadership position without compromising its net profit margin of around 11.6%.
Smaller companies—like Under Armour Inc. (NYSE: UA)—have similar expense distributions, but total selling and administrative expenses of $1.5 billion can never be a match to Nike’s selling and administrative expenses of $10.5 billion. Another Nike competitor, Adidas, has to spend 43% of its revenue on selling and administrative expenses only to try to keep up resulting in a net profit margin of only 3.7%.
As investors, we have to ask ourselves “what is that we don’t know?” What could take Nike off the throne?
With its strong marketing, Nike has managed to survive the various scandals of the athletes it sponsors—like those of Maria Sharapova, Oscar Pistorius, Lance Armstrong, and Marion Jones—unscathed, seemingly reinforcing its position in the process. Competitors don’t have the opportunity to take advantage of these scandals as spending more on advertising isn’t an option. In Adidas’ case, if it spent a mere $0.6 billion more on advertising, it would make the company unprofitable.
But risks can come from consumers saying “let’s try something else,” or by a large number of new competitors, attracted by the 48% gross margins, entering the market. This isn’t likely to happen soon, but investors have to keep their eyes wide open. If you start to see more Under Armour or Adidas logos walking around than Nike logos, then it’s time to sell Nike.
Two companies that have seen their formerly large moats slowly erode in the last few years are McDonald’s (NYSE: MCD) and The Coca-Cola Company (NYSE: KO).
Both companies’ slow declines stems from the trend of healthy eating which came on somewhat suddenly and impacted both companies around the same time. MCD saw its first revenue decline not related to a recession in 2014, while KO’s revenue decline started in 2012. The threat of the demand for healthy food, and increased restaurant competition, lowered sales and made both KO and MCD underperform the S&P 500 by large margins despite being considered as companies with big moats.
Moats have always been and will always be elusive as we can easily misidentify them. But investing the necessary time and research to find companies that have or are building a strong moat can lead to extraordinary returns.
In a world of computers and complex analyses of financial statements, maybe the best question to ask yourself is if you will continue to use a product or service even after a competitor comes to market at a lower cost. If the answer is yes and the valuation is fair, you shouldn’t think twice about making that company a part of your portfolio.