TC and Gary Next month‚ September marks the end of the 4th year of Fisham Group’s existence. It’s good to reflect on what we have done ... what we have done right; what we have done wrongly. Phillip Securities asked me to give a talk to The American Club a few months ago. I did a write up (see below or attachment) on important principles of value investing we need to follow before our portfolios can grow. Please take a look. Over the course of the next week or so‚ please prepare a
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CASE 1: WARREN BUFFETT a) From Warren Buffett’s perspective‚ what is the intrinsic value? From Warren Buffett’s perspective‚ intrinsic value is the value will affect the future value performance of investment and business. It is defined as “the discounted value of the cash that can be taken out of a business during its remaining life” (Bruner‚ 2010). Why is it accorded such importance? In view of the fact that the intrinsic value is the “only logical way” (Bruner‚ 2010) which help investor
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How do fundamental and quantitative analysis differ? In fundamental analysis managers analyze the unique aspects of a firm. For example‚ a manager doing fundamental analysis on Microsoft would study Microsoft’s new products‚ understand Microsoft’s profit margins‚ threats from specific competitors‚ etc. You use this information to forecast the future cash flows of Microsoft to estimate the fundamental value of Microsoft. In quantitative analysis you do not analyze a specific firm. Instead‚ you
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EFFICIENT MARKET THEORY AND TESTS Introduction Market Efficiency A market is said to be efficient if prices in that market reflect all available information. Market efficiency refers to a condition in which current stock prices reflect all the publicly available information about a security. Efficient market emerges when new information is quickly incorporated into the share price so that the price becomes information. In other words the current market price reflects all available information
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CHAPTER 11: THE EFFICIENT MARKET HYPOTHESIS PROBLEM SETS 1. The correlation coefficient between stock returns for two non-overlapping periods should be zero. If not‚ one could use returns from one period to predict returns in later periods and make abnormal profits. 2. No. Microsoft’s continuing profitability does not imply that stock market investors who purchased Microsoft shares after its success was already evident would have earned an exceptionally high return on their investments
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Which of the following is not a method employed by followers of technical analysis? Relative strength analysis Question 2 1 out of 1 points The broadest information set is included in the strong form efficiency argument Question 3 1 out of 1 points A day trade with an average stock holding period of under 8 minutes might be most closely associated with which trading philosophy? Technical analysis Question 4 0 out of 1 points Studies show that the bid-ask spread for
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increase the overall performance of Nestle. This company’s profit had affected by the economy analysis and industry analysis. Economy analysis had analysed how the world economy will affected business of the company and the industry analysis is deals with the competitors of the company. However‚ two of this problem has not affected too much on the profit of this company. We can see from the fundamental analysis that Nestle had made a profit in year 2009. Nestle (Malaysia) has achieved a turnover by 4
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information have no contribution towards to forecast future market prices. If the stock price changes are irregular then the historical prices cannot be used to predict future prices. If the hypothesis is accurate it rejects technical analysis. Weak form EMH suggests analysis can be used to analyse stock values that are underestimated and overestimated. Therefore‚ investors review profitable companies to gain profit by analysing their financial accounts. 2. Semi-Strong form EMH The semi-strong form
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portfolios. Each portfolio will be made up of investments chosen through theories and strategies which come from either the fundamental analysis or technical analysis approaches. Fundamental analysis is method which looks at fundamental information such as competitive advantage‚ earnings growth‚ market share and quality of management to indicate a security’s future value. Technical analysis is the other basic trading technique which relies on statistical methods and data charts to detect and predict current
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AN ESSAY ON CAPITAL MARKETS‚ INVESTMENT AND FINANCE “Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn’t do any good to look at the cards”. Discuss. Warren Buffet‚ New York Times Magazine. AUTHOR: CHARLES EKWE RUO “In an efficient market‚ security (example shares) prices rationally reflect available information” (Arnold 2005‚ p.684). The efficient market hypothesis (EMH) refers to share price movement with respect
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