I've been planning to come up with this post for quite some.

It serves as my personal check list, so that I won't miss out anything when I do my company stock evaluation.

Most of the Long Term Investing approach focus closely on fundamental analysis, and I'm no different here.

Most of the stuff here I believe, you've seen it somewhere. It's definitely not from me. I'm just reiterating it here, so that it reminds me and serves as written guideline to me.

 

 

 

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1.	Avoid Price Competitive Industry (link)
	Do not invest in industries which doesn't have any edge, whereby price is the only sole factor that wins the customers.
2.	Economic Moat (link)
	Does this company have any sort of business edge compared to its competitors from the same sectors?
3.	Growth (link)
	Is this company growing consistently for the past 10 years or so?
4.	Profitability (link)
	Is this company's profitability metrix improving, or at least, staying at good ratio consistently?
5.	Financial Health (link)
	How's the financial health of the company? Can it pay back it's debt and yearly interest on time?
6.	Dollar Flow (link)
	Do I understand how the dollar flows in the company? How well do I understand how the company operates?
7.	Compare with Competitor (link)
	Compare this company with its direct competitors. How does it fare compared to its peers?
8.	Calculate Intrinsic Value (link)
	Once everything is in place, it does not mean that we'll jump into the stock straight away. We only want to buy it when the stock price is selling at a discounted price to it's intrinsic value.

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This 7 steps pretty much sums up the process that I use to go through while doing my evaluation on a company's stock.

In the near future posts, I'll fill in the missing (link)s, and explain more in detail about each of the 7 points mentioned above.

 

 

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The day-of-the-tails seems like  a good title for this post, as I see a lot of tails on most of the index.

- I see tail in all the 3 major index (SPY, QQQQ, Dow)
- Tail in Crude Oil
- Tail in Gold
- Tail in Volatility Index (VIX)

And it's not the ordinary tail, it's the type which is extremely long.

 

 

The market has been in a near term bearish trend.

The 22MA is threatening to crossing below the 50MA soon.

When that happens, and stock price pull back to it's 22MA, that will be a nice timing to test the market with some new shorting position.

 

 

USD met it's price target last week.

The estimated move from Dec low to Dec high, which was about (78-74.5) 3.5 points, was what exactly the market technicians have been looking at, which was the breakout from the bull flag from 76.5 to 80.

The question now is, will it continue to move higher?

 

 

GOLD also looks like it has done its A-B-C pullback.

Is this pullback done?

Well, it might give a bounce right away, seeing that the long tail hammer pattern it's forming right at the 50% Fibonnaci.

Or it might further drop to the 1025 level, which seems to me to be a more major support, before spring upwards again.

 

 

 

Crude oil breaks below it's major support trend line.

Looks to me like it's gonna be pretty damaging to the technical site if this break down is confirmed.

We'll need to see how things turn out further next week for the break down confirmation.

 

 

 

 

 

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Becton, Dickinson and Company (BDX) is a medical technology company engaged principally in the development, manufacture and sale of a range of medical supplies, devices, instrument systems and reagents used by healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. BD’s operations consist of three business segments: BD Medical, BD Diagnostics and BD Biosciences. On November 19, 2009, BD acquired 100% of HandyLab, Inc. (HandyLab), a company that develops and manufactures molecular diagnostic assays and automation platforms.

 

As a whole, BDX is a company that sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products.

BDX's operates its business between 3 business segments:-

BD Medical is among the world's leading suppliers of medical devices and a leading innovator in injection- and infusion-based drug delivery since 1906, when the Company built the first-ever facility in the U.S. to manufacture needles and syringes. The BD Medical segment is focused on providing innovative solutions to reduce the spread of infection, enhance diabetes treatment, advance drug delivery and improve ophthalmic surgery outcomes.

BD Diagnostics is a leading provider of products for the safe collection and transport of diagnostics specimens, as well as instruments and reagent systems to accurately detect a broad range of infectious diseases, healthcare-associated infections (HAIs) and cancers. The BD Diagnostics segment focuses on improving health outcomes for patients by providing laboratories with solutions that improve quality, enhance laboratory system productivity and inform medical decisions.

BD Biosciences is a world leader in bringing innovative diagnostic and research tools to life scientists, clinical researchers, laboratory professionals and clinicians who are involved in basic research, drug discovery and development, biopharmaceutical production and disease management. The BD Biosciences segment is focused on continually advancing the science and applications associated with cellular analysis and products that help grow living cells and tissue.
 

Well, a fair enough quite easy-to-understand company, which falls within my circle of competence and comfort zone.

 

Let's take a look at it's Financial Metrics.

 

A quick inspection on the moat by looking at it's ROA, ROE, FCF, Net Margin:-

10 year average ROA	11%
10 year average ROE	20%
10 year average Net Margin	12%
10 year average FCF growth	18%

Quite a respectable feat, and I would say that this company definitely have some sort of moat with these numbers.

 

Growth Rates:-

10 year average Revenue growth	7.7%
10 year average EPS growth	15%

 

I'm estimating a consistent growth rate of 12% on it's EPS.

With it's current EPS at $5.13, and a Dividend payment ~~ 26% of it's net earnings, this is the MOS calculation we got:-

Current EPS	Expected Growth	PE	Expected Return	Future EPS	Future Price	Div(%)	Total Div Paid
$5.13	12%	24	15%	$15.93	$382.39	26%	$23.41

	IntrinsicValue	20%MOS	30%MOS	40%MOS	50%MOS	Est. Yr 10 Div
No Div	$94.52	$75.62	$66.16	$56.71	$47.26	$4.14
With Div	$100.31	$80.25	$70.22	$60.19	$50.16	$4.14

 

We come to an estimated Intrinsic Value of ~~ $100 for BDX.

At the current trading price of $75 as of this writing, we would have gotten a 20% MOS.

I'd be looking at this closely. I'd be more comfortable at getting this stock if it were able to give me around a 30% Margin Of Safety.

 

 

 

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This is what I'm into lately.

The Five Rules for Successful Stock Investing - by Pat Dorsey

 

I tried hard, wanted to write a review to share the wonders of this book so that others would be able to pick up the good stuff, but I failed in doing it any better than the 1 review I came across from amazon.

And as such, I decided to just quoted the review and stick it out here. (mirasreview is one of the top 100 reviewers at amazon)

This review says it all, and put it in words that best describes the true value of this book.

I personally highly recommend this book to any of the hardcore value investors.

 

"The Five Rules for Successful Stock Investing" is a guide to value investing by Morningstar's Director of Stock Analysis Pat Dorsey and the folks at Morningstar, Inc. The book's goal is to educate investors in how to "find wonderful businesses and purchase them at reasonable prices." Its title is a little misleading in that the "Five Rules" are a small part of this book. The five principles to which the title refers are: 1. Do your homework, 2. Find companies with strong competitive advantages (or economic moats), 3. Have a margin of safety, 4. Hold for the long term, 5. Know when to sell. Those are vague principles, but most of this book is dedicated to telling you just what homework you need to do and exactly how to do it. Pat Dorsey and Morningstar are advocates of long-term investing who are skeptical of trading and portfolio churning, so this book's intended audience is value investors. No technical analysis here. This is all fundamental analysis, but traders may find the advice on analyzing company finances useful as well. "The Five Rules for Successful Stock Investing" has 2 parts: Chapters 1-12 are a "how-to" for analyzing companies, their finances, and determining what their stock should be worth. Key points include how to evaluate a company's competitive advantages, what to look for in financial statements, analyzing a company's management, spotting financial chicanery, and how to determine a company's intrinsic value. This is all fairly complex, and there is math involved, but the book takes you through the process, with examples, explaining why and how every step of the way. Chapters 13-26 provide overviews of 13 industries, from banks to software to industrial materials, including information on what the industries do, how they make money, hallmarks of successful companies, and risks to look out for. Each of these chapters concludes with an "Investor's Checklist" for that sector to help you identify key factors when choosing a stock. "The Five Rules for Successful Stock Investing" is among the best books I've seen for learning how to pick apart financial statements, and it packs a great deal of advice on evaluating companies within their sectors into one concise and readable volume. Highly recommended to value investors. By mirasreviews

 

 

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As we always used to heard people saying .....

- control your emotion
- don't get angry
- do not be afraid

which in fact, is not totally true at all.

 

As a fact, we can never control our emotions.

After all, we are humans.

Humans have emotions.

Just take one for example.

When someone suddenly approach you, and give a whack on your face without any particular reason, what is your immediate feeling?

Some will feel scared, some felt shock, most people like me, will feel angry.

These are the emotions that you CAN NOT control, because it just happens, and pop up immediately right out of no where.

But, any actions that you choose following those emotions, ARE controllable. 

 

The recent post by Dr. Brett on Moving Beyond Fear And Anxiety really says it all, and I really love how he puts it:-

"Everyone gets scared, even the best of the best. In fact, sometimes being scared is the most rational reaction to a given situation. There's no shame in that. It's when people give in to those feelings that they get into trouble." 'Feeling fear is okay so long as you don't act afraid or make a decision because you are afraid.' The distinction is important. It is not a problem to feel fear; the problem occurs when we allow fear to drive decision-making. Success is not banishing anxiety, but learning to tolerate and contain it. Ironically, it is in embracing one's fears that we learn from them--and prevent them from reactively driving our decisions.

Don't be afraid of fear and anxiety.

Embrace them, contain them, and learn to grow from them.

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