Singaporean Net-Nets listed on the SGX as of 2016

(06-01-2016, 11:19 PM)weijian Wrote:

(06-01-2016, 08:56 PM)beau Wrote:

(06-01-2016, 04:22 PM)weijian Wrote: I have read somewhere that pure statistical approach these days may only be profitable (or beat the benchmark index) for Japan net-nets, else-wise, this approach is not better off than an indexing one.

I would also like to know the source of this.

Anyway, I want to share probably my favourite research paper on net-net investing. I think this paper was done in response to all those who say Ben Graham's net net investing is outdated in today's era.

Ben Graham's Net Nets: Seventy-Five Years Old and Outperforming (2010)

http://csinvesting.org/wp-content/upload...rming1.pdf

hi CF and beau,
I tried googling again to recall the sources. It comes from James Montier's study in 2008 (I may have read his book 'Value Investing' ~1-1.5years back, which might also talked about it but I got no chance to verify it again as I have since returned the book to NLB though)

here is the link: http://www.netnethunter.com/japanese-net...r-foolish/ with the extract below:

In 2008, James Montier came out with a research paper titled, “Net-Nets: Outdated or Outstanding?”. In it, he surveyed the investment situation relative to Graham’s net nets on a global basis. What he found was that, of the 175 NCAV stocks available globally in 2008, over half were located in Japan. Following that lead, he took a look at what would happen if an investor put together a portfolio of Japanese net net stocks from 1985 to 2007.
As it turned out, the result of investing in Japanese net nets from 1985 to 2007 was fantastic. While the Japanese stocks as a whole provided investors with a compound annual growth rate of just 5%, Japanese net nets decimated the index with an excess return over the market of 15% per year, coming in at a CAGR of 20% for the period. Not bad!
By comparison, while US net nets performed better overall, they also benefited from a fantastic tailwind. Yet, despite the great investing environment from 1985 to 2007, American net current asset value stocks merely doubled the market return, while Japanese NCAV stocks beat the Japanese index by 200%!

After re-reading this, I do stand corrected on my previous statement that 'only Japanese net-nets if profitable/outperform the index'. The correct statement would be 'net-nets does outperform in the different geographies but in terms of beating its home index, Jap net-nets come out ahead'

Thank you. Very useful info for further reading. 

Just want to say, net-net strategy not suitable for managing
OPM. At clients meeting, they always ask for the worst performing stocks.
5% of stocks that suffered permanent loss of capital won't be very comforting
for clients. Haha.

(07-01-2016, 10:07 AM)opmi Wrote: Just want to say, net-net strategy not suitable for managing
OPM. At clients meeting, they always ask for the worst performing stocks.
5% of stocks that suffered permanent loss of capital won't be very comforting
for clients. Haha.

For those funds, with OPM, have their fair share of worst performing stocks too, right? 

One reason, for broad diversification, is to ensure lesser discomfort, with any non-performing stocks. An allocation of 1-2% per stock, or max 3% seems a good strategy, based on observations on similar statistical approaches.

(not a net-nets investor, but learning)

I revisited Excelpoint Technology and found out that it is still a net-net trading at 0.43x NCAV.

TSH Corporation is no longer a net-net below 2/3 NCAV, but they still trade just below NCAV. This is because of the recent surge in share price due to the analyst report on http://stockresearchasia.com/1/category/...ltd/1.html. But there is still opportunity with this counter with their potential sale of a building.

The current list still stands with the exclusion of TSH Corporation.

Thanks for your hard work, Beau.

But should we look at the catalyst as well or the business model to justify if we should invest?

Recently I allocated part of my portfolio to deep value stocks trading huge discount to NAV instead of just discount to CNAV. Working fine too but maybe in Singapore context as well.

http://tubinvesting.blogspot.sg/