Buffet Beyond Value: Why Warren Buffett Looks to Growth and Management When Investing

Buffett-Beyond-ValueBuffet Beyond Value by Prem C.Jain is an easy read for novice investors who want to understand what Warren Buffet looks out for when investing. The book uses information from Berkshire Hathaway annual reports, Buffett’s letters to shareholders and partners in his partnership firms to teach us how Buffet actually thinks and invests. A key message consistent throughout the book is the identification of quality and honest managers, who has helped Warren Buffet drive his investments. The book also goes through the temperament an investor needs to be successful in the stock market. One such example which hit out at me would be the virtue of patience. It goes on to share the case when Berkshire made a large nontraditional investment of $4.6 billion in long-term zero-coupon treasury bonds, instead of making investments in the stock market during a time of exuberance.

Prem C.Jain then talks about the notion of growth investing, and how Buffet identifies growth companies. He also goes into detail how Buffet combines both value and growth- values he learnt from Benjamin Graham and Philip Fisher when investing. A few parts of the book are also devoted to psychology, diversification and an analysis of the insurance and retail sectors. Warren Buffet’s mistakes in the stock market are also shown, and one can definitely learn alot from them.

Overall, I think this book is a great read for those who are just starting out in investing and who may find investment classics like The Intelligent Investor hard to read. The author is clear and concise, and the topics on temperament and psychology are key takeaways for me.

 

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Sowed More Seeds of Food Empire Holdings

foodempirelogo

On the 16th of December 2013, I bought more shares of Food Empire Holdings when the price went down to $0.54. Upon further investigation, I found out that the share price had collapsed due to a difficult quarter, where the company’s 3Q13 profit had decreased by 68.3% from US$8 million to US$2.6 million y-o-y. The decline in profitability was mainly due to the start up costs required in their new expansion plans, ie. upstream projects and investments in new markets.  Nevertheless, revenue had risen by 13% y-o-y. I believe that the company is still fundamentally strong, with market leader positions in their core markets of Eastern Europe and Russia. These costs may take a drag on FEM’s profitability for the next few quarters, but I remain optimistic that the company will do well in the long run. More information can be found here http://foodempire.listedcompany.com/newsroom/fe081113.pdf.

MacCoffeeFood Empire’s Flagship Product

My portfolio now stands as shown:

Stock Entry Price Dividends Collected Weightage
Marco Polo Marine  $0.380  $0.014 15.85%
Food Empire Holdings  $0.595  – 29.54%
Challenger Technologies  $0.570  – 16.64%
Yongnam Holdings  $0.245  – 14.32%