Starhub

[Ben]

I get what you are saying about capital gain. But I guess I see it differently. Cash invested and capital gain are two different things for me and thus I don't combine them.

In behavioral finance literature, the term used for this is mental accounting bias, ie. Assets have been assigned roles and been treated separately, when their common unit, $ is totally fungible.

Folks who suffer from this, tend to behave like this:
(1) No difference between own capital and capital gains (when Mr Market doesn't care about it)

(2) Cash from passive returns like windfall (lottery) or investments, can be more readily used for treats, than our 'hard earned' salary (when the $ is still yours anyways)

(3) I start a savings account to religiously save up for a holiday while still paying down credit card/student loans (yes, seeing progress as I work towards my holiday goal is more important than paying interest on the loan)

(4) All stocks in a portfolio, are reviewed separately. Losers are kept, winners are sold (so that the 'overall mental account' can be kept on positive ledger)

Thanks weijian for sharing this. I think we are all guilty of one or more of the above behaviour sometimes. I personally is guilty of behaviour 2 from time to time. That is why when money comes too easily, it goes out as fast. Thanks again for sharing.

[flinger]

Hi CF,

In essence you are saying I am wrong and that I am doing the wrong thing and you are right and you are doing the right thing in a roundabout way.

Just because of the statement that I look at capital gains and invested cost differently and that I use yield on cost , you have classified me as wrong.

IMHO, there are more things to consider besides these two things before you can decide a decision is wrong or right.

but that's just my wrong opinion as usual.

I would like to comment that we (weijian and I) respected your choice and interpretation/view. In fact, there was no reason for us to interfere. It doesn't matter to us.

What do matter to us, was the right concept we are educating here. This forum is to promote value investing and right concepts in investing. It matters to me, and likely the rest of the buddies here, including weijian

I think maybe you are over generalizing without understanding why I look at cash invested and capital gains as two different items.

There are many questions that you got to ask yourself in terms of your investing goal / portfolio / stock position / sell or buy decision / yield / risk profile / investing skill etc...etc..etc....

You need to look at your cash invested and capital gains differently. If you are trading then it definitely makes sense but investing is a different story.

But like I said, everyone has their own opinion and investing goals and as long as you reach where you want to go, thats all that matters. =)

[CityFarmer]

Pardon me to put it bluntly, yes, you are wrong in the concept, but I wouldn't conclude you are wrong in your choice without knowing more. I am not interested on the choice, but the concept.

Fundamental determines the intrinsic value of the stock, which shouldn't be much difference by who you are, the way it was acquired, or any specific reason(s) behind the acquisition.

The same applies to capital. Its value shouldn't be any different, whether it is from hard-earned salary (invested capital?), lottery winning, or capital gain.

This is the concept we are defending, not for us, but for the greater of us in VB.

Hi CF,

In essence you are saying I am wrong and that I am doing the wrong thing and you are right and you are doing the right thing in a roundabout way.

Just because of the statement that I look at capital gains and invested cost differently and that I use yield on cost , you have classified me as wrong.

IMHO, there are more things to consider besides these two things before you can decide a decision is wrong or right.

but that's just my wrong opinion as usual.

[flinger]

Hi CF,

Agree fundamental define stock. I never disputed that. But the rest i disagree with you.

Not everyone select the same stock for their portfolio, while one sells another buys, because of their specific investment needs. Who you are matters - risk profile as an example, specific reason matters - as part of your dividend portion of your portfolio or growth portion or day trading, long term investment etc..etc...etc....

In terms of capital, I never disputed its value, money is money ( lottery, dividend, paper gain etc... are all money). However, I look at how the money came to be, is it permanent ( as in dividend which gets into my bank until I use it or is it uncertain of its status such as a paper gain) I then evaluate what is the best course for the money, after evaluating, I will either keep it status quo or sell half or sell all or buy more etc...etc...

This is the concept that I follow, not defending.

Pardon me to put it bluntly, yes, you are wrong in the concept, but I wouldn't conclude you are wrong in your choice without knowing more. I am not interested on the choice, but the concept.

Fundamental determines the intrinsic value of the stock, which shouldn't be much difference by who you are, the way it was acquired, or any specific reason(s) behind the acquisition.

The same applies to capital. Its value shouldn't be any different, whether it is from hard-earned salary (invested capital?), lottery winning, or capital gain.

This is the concept we are defending, not for us, but for the greater of us in VB.

[CityFarmer]

Time to agree to disagree.

Both side of us have presented our points, and should be sufficient for anyone to make a judgement call.

Let's close the topic. We might have hijacked this thread with the topic for too long.

Hi CF,

Agree fundamental define stock. I never disputed that. But the rest i disagree with you.

Not everyone select the same stock for their portfolio, while one sells another buys, because of their specific investment needs. Who you are matters - risk profile as an example, specific reason matters - as part of your dividend portion of your portfolio or growth portion or day trading, long term investment etc..etc...etc....

In terms of capital, I never disputed its value, money is money ( lottery, dividend, paper gain etc... are all money). However, I look at how the money came to be, is it permanent ( as in dividend which gets into my bank until I use it or is it uncertain of its status such as a paper gain) I then evaluate what is the best course for the money, after evaluating, I will either keep it status quo or sell half or sell all or buy more etc...etc...

This is the concept that I follow, not defending.

[Temperament]

Ha! Ha!
Money for marketing (daily living) is money for marketing. Money for Investing (some say money for casino too) is money for spare cash. Mixed the two, your head will grow into a turnip.

[Stecano]

This is the first time (maybe last ) I try to manually calculate intrinsic value.
Comments, corrections and feedback much appreciated.

[img][Image: starhubDCF_zps0b458013.jpg][/img]

[CityFarmer]

I am always amused by Starhub's effort on no-core business partnerships. May be I didn't catch the newly on-board CEO's strategy to survive amid the highly-competitive telco market?

(not vested)

DHL, StarHub and TES-AMM join hands in e-waste recycling programme
16 Sep 2014 15:39
DHL Express, StarHub and TES-AMM, a home-grown electronic waste recycler, have signed a Memorandum of Understanding (MOU) to expand Singapore's first e-waste recycling programme.

The three partners hope to have e-waste bins at over 100 locations by the end of 2014, giving members of the public in Singapore many opportunities to safely dispose of unwanted electronic devices and equipment for free - knowing that the waste will be harvested for precious and re-usable raw materials.
...
Source: Business Times Breaking News

[Ben]

I think these 100 bins will just provide a convenient location for the karung guni man to collect the e-waste for free.

I also don’t understand why StarHub wants to spend time and resources on such a business. Maybe perhaps they have many old phones which can be contributed to the e-waste business, but these days anyone still trade in old phones for new?

[BaconFTW]

This is the first time (maybe last ) I try to manually calculate intrinsic value.
Comments, corrections and feedback much appreciated.

[img][Image: starhubDCF_zps0b458013.jpg][/img]

Hi stecano

First of all, i must qualify im not finance trained so if i made a mistake, pls excuse me. Just trying to learn and what better way then thru mistakes?

Anyway to comment, i think u are trying to do a dcf analysis? I usually refer to this: http://www.investopedia.com/university/dcf/dcf4.asp. So if i understand the website correctly, would like to make the following comments:

1. I won't comment on the projected cashflow for the next 10 yrs for now. Thats the art i guess.

2. Shouldn't we calculate the Terminal Value(TV) of the cashflow based on the gordon growth model? If i assume a WACC of 6% and long term cash flow growth of 2%, that gives me a TV of $15.782 bil.

3. From the projected cash flows and the TV, and discounting to my assumed WACC, that gives an Enterprise Value (EV) of $13 bil. Your calcs seem to not include both TV and EV.

4. Taking away the net debt (borrowings minus cash, i too this from AR13), the Firm Value (EV minus net debt) is $12.6 bil. Dividing this over no of shares of 1.728 bil, this gives intrinsic value of $7.28 per share.

5. For the discount rate, may i know why u assumed 8%? Starhub's cost of debt is barely 3% from AR13. And i have used a WACC of 6% to be conservative. I calculated the WACC based on an assumed cost of equity of 10%, and an assumed cost of debt of 5%, and i thought i was being extra conservative

Can other learned buddies care to comment? Thanks much!