Thursday, December 27, 2007

Warren Buffet prediction for 2008?

STI was flat today; it closed up 4 pts at 3477 with a volume of 1.19 billion. This is quite similar to Dow performance last night when it closed up 2 pts from a negative opening. Volume in the market is really pathetic, which isn't surprising given that most people are abroad enjoying their holidays. I don't expect market volume to return to 1.5 or even 2 billion till perhaps the start of the year 2008.

Today all the agri stocks went up a lot. Wilmar, Golden agri and to a Indo agri shot up. I guess agri is the sector to focus on for this bull run, just as construction stocks were the darling around June/July period. Well, as the saying goes, every dog has its day.

Ecowise announced their full year performance today. They did pretty well, with a net profit growth of 37%. I like their prospects to capitalise on the carbon trading - they are the first registered company to sign carbon credit sales. This is basically a whole plan to reduce the carbon output of every country. If a certain company wants to emit more carbon, they have to buy carbon credit beyond what is allocated for them. Nice system, but don't know how it'll turn out in the year.

This article from cnn gives the prediction of warren buffet for the year 2008. In my opinion, he isn't really giving any prediction. I like his point number 2 and 3. When stock market is having a big sale, we must get ready to buy. For guitar lovers, there's a shop in Bras Basah called Swee Lee - famous for their wide selection of musical instruments and perhaps more famous for their yearly 50% sale off all items. I remembered getting a guitar from there. This is what I did:

1. I found out that there is a sale

2. I checked out the items I'm going to buy by doing some research - went to surf different models of guitar, went to ask around people who had guitars, went forum to look for information and went to the actual shop several times to test try the guitar I want

3. I saved up money to make the purchase

4. I queued up overnight as I anticipate that there will be a long queue (and yes, there is a long queue - good time I was the 2nd in line)

5. I already know the shop layout, so I went in and grab the item and got out

That's how I buy big ticket items - and there shouldn't be any difference when I'm investing too :P

Today I also finished my book on the 5 keys of value investing. A few things I remembered about the book. Firstly, margin of safety is the difference between the value of a company and the price you pay. Secondly, n value investing, we need to find or identify a catalyst that can push up the price to fair value. Time is also a catalyst (though it's a bad one). Lastly, there are some many different ways to valuate a's mind boggling. I'm trying to finish all the books in the library on investment and valuation. Big ambition huh? haha

Dow futures is down by 11 pts. Could have a flat to negative STI tmr.