Thursday 28 February 2013

Asian Bamboo Preliminary 2012

A Chinese forrest company registered in Germany

Today Asian Bamboo came out with the preliminary results for 2012 which were some very bad news.

A small summary:

  • Revenue down 19%
  • Write down on the "fairly" valued biological assets by 19.1M€
  • Cutting the dividend payment for 2012 not decreasing. Cutting!
  • Informing that winter has been very cold in China meaning that Q1 harvest of the bamboo sprouts will be very poor in 2013.
Hmmmm.... It is a good moment to buy more stocks cheap since it dropped by 22% today. I have to think a little about this since I had planned to buy other stocks and the question is always.
How long will it take until the stock recovers from this?
Will there be other equally good moments to buy more cheap also 6 months from now?

I think I will wait this time and make the month investment into a dividend paying stock instead.

Münchener Rückversicherung

MüRe a German re-insurance company, 2nd largest in the world

This is one of the biggest re-insurance companies in the world. They are dealing with insuring everything from accidents to catastrophes. They are due to their float "expanding" into other areas... ex. gas pipelines etc. etc. They also have an insurance company (ERGO) that they still have not really managed to put straight meaning that they had a very bad company culture and MuRe have still not managed to push their own culture on to this daughter insurer. So still today there are every now and then bad news appearing due to that. the latest I read was about that insurance agents had their bonuses paid by being brought to "enjoyment houses"... I hope those things will stop soon. Either way when you read MuRes annual report they even make an estimate on the coming years based on the same calculations that they have made in the first place for taking the insurance. They usually manage to hit the nail.

My Set of Rules from Reading the Books

A way to prosperity

This post is a little bit complicated to make. I will bring it into the regular flow of the text but it will also be placed on the side as its own page. The rules will also change of time. New will be added and old ones might even be removed if found useless.

Many investors, Warren Buffett especially, is frequently saying that the first rule is not to loose money. The second rule is never to forget the first rule. I would say that this is highly personality based. Do you care more about winning or do you care more about not loosing? I care about not loosing. However I do not see how a rule saying to not to loose money will help me be to make better investment. Maybe later on in life when I am older and wiser I will be able to create fewer rules which will only be the two ones above, since all the others will be so obvious to me, but I am far from that point and need to more strictly regulate myself and my way of acting.

My never list:

Wednesday 27 February 2013

The stock re-ignition

Spreading the wings to learn to fly

Late in autumn 2011 it then hit me that I needed to do something to secure my future. Since I have my own company I do not give myself a large salary. I also are working as an independent (selbstständig) here in Germany to decrease the costs for the company and at the same time give me slightly more cash out in the end of the month. To work as an independent means that no social security, no unemployment money and no retirement money is paid in to the government. Tax is however paid and then also at a slightly higher rate. Since a health insurance is needed one need to set up a private one which personally I am very unhappy about. As of yet I haven´t once been to a medical doctor here in Germany without them trying to push more and more "products" on me. I find it very hard today to go to the medical doctor since I each time feel cheated by them. It really is not easy when you are ill to have the sense to say no to any doctor trying to make more money out of you. I need to become better at that or fight for changing the system either way happily I am very rarely ill.

So, no social security is slightly inconvenient, unemployment money I really do not care about but for the retirement I considered that something must be done.

When it all started...

A light above your head

Back in my youth I very early on started to buy stocks. This was due to that my father had a huge interest in trading with stocks and, unfortunately, making a quick buck. So my dad was and still is to this very day a pure speculator on the stock market. I can also honestly say that he has never made any real money on the stock market, and if one looks back I think he should even be happy if he has broken even.

However due to my father I therefore grew up knowing nothing besides from a speculative form of investing. At one moment in my life, when I went abroad for studies, I even signed over the rights for making stock market trades to my father. He started to speculate with my money on... you can maybe guess it... IT-stocks and of course at the very good moment just before the bubble burst. I lost 80% of my savings and I will, since then, never ever give the rights to someone else, family, friend or stock broker to be in charge of my money.

There is one thing I will consider though, which will be explained in a separate post, and that is to buy a computer controlled index fond with an as low fee as possible.

Tuesday 26 February 2013

Italian election

Italy, Rome, Colosseum

Today it became clear that Monti did not win the election in Italy. I guess that the stock market is looking upon it even worse since Berlusconi seems to be making a come-back. The stock market makes a slight drop to show how unhappy they are over how the Italians voted. As if that would change how the Italians decide to vote. In my opinion we must let democracy have its course and if the Italians decide not to vote on Monti then so be it.

As an investor I have to ask myself:

Did the value of the companies I own decrease? Did their future potential earnings decrease?

If not, then right now is a good moment to buy even more stocks cheaper than yesterday.