Aesop's Investment Axiom

According to Warren Buffett, the formula for valuing an asset purchased for gain is the same now as it was when articulated by Aesop long ago.From the 2000 Berkshire Hathaway (BRKa) shareholder letter:"...Aesop and his enduring, though somewhat incomplete, investment insight was 'a bird in the hand is worth two in the bush.' To flesh out this principle, you must answer only three questions. How certain are you that there are indeed birds in the bush? When will they emerge and how many will there be? What is the risk-free interest rate (which...

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Tune Insurance: Where does it swings?

I am amazed with the Malaysian market - at a time when some are afraid of Airasia's growth prospects due to competition from presumable Malindo, we are celebrating the high price valuation of Tune Insurance. (have you heard of Malindo news nowadays - is the March launch still on, BTW?)Now, let me put this right. Airasia is offering a service which people would like to have - i.e. cheap travel. Tune Insurance which is an exclusive partner to Airasia...

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Grantham: Investing in a low-growth world

In Jeremy Grantham's latest letter, he asks whether lower GDP growth logically leads to reduced stock returns.Grantham answers that question this way:"This is where I break ranks with many pessimists because I believe theory and practice strongly indicate that lower GDP growth does not directly affect stock returns or corporate profitability.He adds, parenthetically, that their may be some effects of lower GDP growth that will lower equity returns in a minor way. This gets covered in more detail later in the letter. Otherwise, as far...

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Another election fear: Currency?

Malaysian Ringgit has gone through a bad patch over the last 1 week. It seems that the General Election is having its effect on our currency as well? As below, usually Ringgit traded within a range against Thai Baht - most of the time trading around 1 MYR = 10.10 THB. Most recently, MYR has weakened to 9.58. The usually stable MYR against Thai Baht faced a change where MYR dropped significantly over the last week Usually, currency trading over...

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