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					Sequoia
First, the primary investment objective is to not lose money
Buffett has repeatedly warned: the successful investment, the first
not to lose money, the second to remember the first.
The primary objective of our investment is not losing money, not how
much we wish. Contrary to most ordinary investors, the primary goal is
to much money, not fully thought investment risk, but the final result
is loss of money.
Investment action, first and foremost task is to think how much
investment risk, may lose up to much, not to develop much profit.
Value investing to make money slowly, rely on compounded growth.
Investment is a cause of growth by compound interest, the beginning
speed is very slow, not fast, over time, more than 30 years the rate
of profit began to accelerate.
An example
1. Investment 100 million yuan, an annual compounded growth of 30%, 20
years, 1.9 billion; 2.6 billion for 30 years, turning 2600 times; 40
years, 36 billion yuan.
2. Investment 100 million yuan, an annual compounded growth of 20%, 20
years 38 million yuan; 30 years, 237 million, turned 237 times;
40-year 1.47 billion.
?Second, buying a larger margin of safety should be
How can we do it without losing money?
The approximate value of the core work is evaluated and found to
significantly underestimate the (a greater margin of safety)
investment opportunities. This is not to lose money the first magic
wand.
Is to do a lot of quality work, find a great safety margin to buy
stocks of large chance. This opportunity is very small, often 3 - 5
years before a significantly undervalued opportunity, opportunities
occur, to be bold in batches Jiancang, to do when others are fearful
be greedy we should be bold.
In fact the margin of safety analysis of the stock price is a few
years a case of reverse investment, most people sell when fear we will
fall greedily buying, most people buy when the boom we have to fear to
sell. To fear is soaring high and low fall to greed, with the majority
against, the people we have to fear, greed high, others low fear that
we have to greed.
This is a lonely job, many people can not, this is the key to the
success of value investing, this is the failure of the majority
minority the key to success. Most people want but it is difficult to
do, because human nature is the herd, and people go along with the
majority of the crowd, as people comply with the sheep herding.
Sheep's head is a little lonely.
?Analysis of the margin of safety is the intrinsic value of the
enterprise to assess. Valuation is an art, not science, not accurate,
so long as the approximate range of broad scope.
?Suning enterprises such as net profit in 2007 was 1 per share, net
profit up 40 before the three years - 100%, big bear coming, expected
in the next 5 years the actual growth of 30% - 40%, but a conservative
estimate ( keeping a safe margin) by 20%, the net profit after 5 years
up to 2.5 million; then 10% of their present value discount rate is
1.5 yuan. Corresponding to the price earnings ratio of net income
growth at the request of calculation = 1, 20 times earnings in 2007,
net price 20 yuan, 5-year discounted value of 30 yuan. That is 30 yuan
Suning Appliance is a very good investment opportunities, a large
margin of safety, profitability is a high probability of the event.
?Such as China Vanke, the net profit growth of 49.8% in 2003, 04 years
61.91%, 2005 53.8% 2006 70.17%, 110.81% in 2007, which estimated that
20% growth in the next five years is a conservative, is the
probability of achieving large. 2007 earnings per share 0.73 yuan,
according to 20% compounded growth in five years 2 million; then 10%
of their present value discount rate is 1.1 yuan, calculated at 20
times earnings the value of 20. Margin of safety calculation (play
tickets) 8 yuan is a good buy, June 2008 10 to send five, security
price is 6 yuan.
?With particular attention to the value of assessment: 1. Annual
growth margin of safety to consider, whether the next five years to
achieve; 2. Discounted value of the margin of safety considerations,
the normal value is 6%, but we used 10%; 3. Bid price to more secure,
generally 20 times the present value of earnings beat tickets.
?Technical analysis of long-term indicators such as the March quarter
line line analysis, may find the following Suning is more low-cost 30
yuan. Value analysis and technical analysis can be said to be the same
thing, the two are unified. The shortcomings of technical analysis can
not determine the 30 yuan is to buy low-price, the valuation analysis
of the shortcomings of the selling points is no more accurate, if a
combination of both to be found in 30 yuan more accurate time to buy
(with the weekly day Line indicators). Is to analyze the value of the
growth of the stock price reaches the value of the pool area super
underestimated, the broader market into the long-term technical
indicators of whether the tail of a bear market.
?Third, the combination of long-term technical analysis to determine
large CBBC
This is the second non-losing magic.
There are two points.
First quarter line using tape Jin Cha Sicha Monthly indicators to
determine the direction of the stock market's big CBBC. Contracts can
largely determine the direction of large and can not find an
appropriate trading points more accurate.
Second, trading power and a big departure from the broader market
stock price to determine the direction of the stock market and the
large CBBC large investment opportunities. Quarter line with the
broader market indexes on line, according to the broader market stock
trading power and a big departure from the more accurate judgments can
be big turning point CBBC city to discover the large investment
opportunities, and can be found fairly accurate trading point.
?30% of the funds to do a bear market rally can be traded using weekly
stock price strength and a small departure from the broader market to
find trading opportunities.
?Fourth, search for excellence in high-growth enterprises
The first step: the use of more than 30% net profit growth, the main
revenue growth of 30% or more, more than 15% of net assets,
liabilities, 60% search share the following four indicators, the
establishment of the basic unit pool.
The second step: the basic unit of the stock-by-pool analysis, the
value of fixed investment growth stock funds pool shares of the annual
pool of investment fund portfolio.
?Value Growth Fund will vote the stock pool to meet three conditions:
1. 30% net profit growth for three consecutive years or more, the main
revenue growth of 30% or more, more than 15% of net assets of stock;
2. Industry prospects, there is great room for development;
3. Has a strong core competitiveness, which is a very wide moat, a
franchise. Choose the CSI 100 Maotai, Suning Appliance, Changyu A,
Offshore Oil, Yunnanbaiyao, Yantai Wanhua, Zhenhua Port Machinery,
Poly Real Estate, China Vanke, Gree 10. Other selected a total of 20.
?Annual Fund's equity portfolio investment pool. To 30% net profit
growth for two consecutive years or more, the main revenue growth of
30% or more, more than 15% of net assets of stock investment funds as
the annual stock portfolio pool. A total of 60.
?Fifth, look for good investment portfolio
1. The value of fixed investment portfolio grew 5 - 10 only.
2. Annual investment fund 10 - 30 only.
??????????????????
VI, account management and trading strategies target
1. Target Management
Sequoia Fund to establish the value of fixed investment account
growth, annual portfolio investment accounts.
Account value growth of fixed investment: May 8, 2008 set up 20
million seed money. Place in May each year 20 million will vote.
Compounded by the table is scheduled to vote, more than 15% of
compound interest, equivalent to 20 years after the money can be added
to 120 times the investment 20 million per year into 24 million yuan
in 20 years, 30 years into 116 million, 50 into 2.2 billion years.
If the annual fixed investment 20 million, 100 years after the return
of up to 4 trillion yuan, a little bit exaggerating, a joke? This
shows the tremendous power of compound interest, the family set a
100-year investment requirements, the provisions of the implementation
since 2008. Of course, this algorithm is not necessarily true. Broadly
speaking profits certainly is amazing, and ultimately on the energy of
a trillion is in the affirmative.
?Annual portfolio investment accounts: May 8, 2008 set up 60 million
seed money. More than 30% annual compound interest, double the 2.4
years, 10 years of 8.3 million yuan, 110 million yuan for 20 years, 30
years after the value to 1.6 billion, that money turn 2666 times, 50
years to 290 billion yuan for capital appreciation; years more than
15% compound interest, double the 4.8 years, 10 years 2.4 million
yuan, 9.8 million yuan for 20 years, 30 years after the financial
value to 4,000 million for capital appreciation of 50 years to 6.5
billion. Wow, not do not know, be shocked, so to take this method
investment firm.
?100 years calculated at 30% annual growth, funds can be added to 15
trillion yuan, less likely; 100 year 15% annual growth, funds can be
added to 100 times the 700 billion yuan, which is also basically
feasible. This shows the tremendous power of compound interest,
Young's family, given a 100-year investment requirements, the
provisions of the implementation since 2008.
?2. Trading strategies
A. Buy. When the best combination of large investments as
opportunities arise to be bold and be greedy, do not be afraid to sell
the same as the general public. Jiancang stages, not one after buying.
Because, after buying at valuation method are generally required to
quilt or even a considerable period of time and space, therefore the
largest margin of safety should the space to buy more or more each to
buy 10%, down 5% plus one for each position, forces and the broader
market in the trading price when the big departure from the full
positions. Stock portfolio into the super first buy undervalued stocks
do not meet the conditions do not buy, buy after the gradual
optimization of the structure, the last 3 - 5 stocks account for more
than 80% of funds.
B. sell. First, enter the stock overvalued areas (based on the annual
value of the assessment report) to gradually sell shares in the
trading of power and big departure from the tape when the clearance.
Second, there is a better undervalued stock into the super districts,
you can sell the convertible. Third, the deterioration in the
fundamentals of business to sell, can not be achieved by more than 20%
five-year net profit.
?3. CBBC market position control
100% of the bull market over warehouse holdings. No financing no
credit, do not do futures.
Big bear 70% of the cash, or hold steady revenue bonds. 30% of the
cash can earn a little money small departure from the rebound.
???????
Seven, to constantly assess, adjust the portfolio
1. By value assessment methods, the establishment of the annual value
of the stock area, underestimated the area and overestimate the area.
To buy into undervalued areas into the over-sold zone.
2. By technical analysis, buy a big bear market, bull market to sell;
appear stock trading power and a large departure from the bear market
to buy, sell bull market.
3. To write the annual value of the assessment report. May 8 at the
completion of each year, because to wait for annual data as the basis.
4. Write a value investing, trends, investment notes. Handwritten
notes to prevail.
?VIII, writing the value of the growth type of investment plan
1. Investment objectives.
Stocks, funds, futures, real estate or other, you can write a variety
of stock investment, industry, name, etc., remember to write on the
reasons.
2. The proposed investment amount.
Meaning that the amount of proposed investment how much money should
be invested in this species, so that was helpful to control your
money, to prevent a bet too much because of emotional factors.
3. Trade principles.
Your investment process that do not fit to write here, for example: a
loss for three consecutive years not involved in stock investment, for
companies with credit problems do not participate in investments.
Principles to achieve your writing clear, read carefully before
investing several times, to prevent a bet too much because of
emotional factors.
4. Trends Review.
You want to invest on the stock's nearly a year to do a general
description of trends, such as: a unit from a certain period began a
few months from the date of consolidation. This broad objective of the
stock in the past know your situation, it is best able to last year's
big news has been written here.
5. Buying reasons.
Here is why you write mainly about the stock to buy, what you are
promising, such as: business growth, enterprise restructuring, new
products and more.
6. Sell reasons.
Here mainly to write, when the stock is in that situation, you will
sell the stock. For example: results have been announced, the new
products have been listed and so on.
7. The allocation of funds and the use of strategies.
Intended to be divided into several funds, what strategies to use to
buy, such as: the gradual increase the cost of buying method, or the
group-buying and so on. Sell, they also how to write clearly is to
sell in batches or one-time sale.
8. Stop settings.
How to set specific stop-loss, why should a stop, before I have had to
explain, you write clearly in the planning ratio of your stop or the
stop-loss policy, stop combinations are written in it.
9. The specific implementation.
Write specifically how much money you buy, how much to sell, in what
form to buy, is not the same and the program. Seattle also write on
the stock in trade when you have great things happen, such as:
increase in reserve, and other policies to influence the market, or
the listed company's number of important messages. Write aware of
these policies, the time the message appears, the market's reaction,
as well as your own practice, these experiences are valuable, very
valuable. Finally, write down your trading stock how long were used,
which holds a long, time must write clearly.
10. Differences in the implementation and planning, and why.
Sometimes when we do plan to be considered not very place, in some
cases did not expect, but in the course of the specific operation has
encountered a problem, thus changing the previous plans, here you do
not have the implementation plan should reason to write clear, then
the results of the implementation plan does not clearly written on
here, so easy to find your future.
Finally, write the number on the profitability of this operation,
there is a note, you can write any notes you want to write something,
for example, do you stock in the course of the spiritual path, in the
transaction process, what problems you encounter, How do you go to
solve, think of what can be written in it.
September, global vision, investment opportunities that fall
Large domestic and international securities firms to establish
horizontal linkages, master mature markets like the United States,
Europe, Japan and other countries the trend, grasp emerging markets
such as Russia, Brazil, China and other countries the trend, we should
meet more than 50% plunge pay sufficient attention found that
significant investment opportunities.
Ten, summed up the value of growth reflect the investment strategy
CBBC week cycles per year for each quarterly investment summary report
should have, the right to be sure, the failure to identify the reasons
for failure, found the right path. To the zero state of mind to
examine the final report, not blinded by the past experience, to
discover new things, to update the tactics.
Second, third and nine oversized mainly about buying opportunities and
rebound opportunities, specifically when trading.
Fourth, the five main speakers to buy the stock, clearly what to buy.
Sixth, seventh, eight mainly about how the business.
First, the six major goals about stock investment.
Article about the value of the investment strategy primarily reflect
improved.
Through long-term technical analysis and the value of the margin of
safety assessment, the two results confirm each other mutual unity, to
make big money can be found holding the bull market, bear market
holding money does not lose money to make a profit. In fact, this is
the Sequoia Fund's long-term stable investment in stock market growth
of profit model compound.

?Sequoia Fund, which does not lose money to win big money of the two
magic:
The first magic: The value of the evaluated and found to be a gross
underestimate (a greater margin of safety, the price into the
undervalued area) of the bull market investment opportunities.
The second magic: through long-term technical analysis and found that
the broader market stock trading power and a large departure from the
big bull market investment opportunities.
?
Sequoia's core investment is flexible use of two magic, looking for
super-large investment opportunities.
1. To analyze the value of the Growth Equity Pool value of the stock
to reach the Super underestimate the area, the broader market into the
long-term technical indicators of whether the tail of a bear market,
the two conclusions confirm each other mutual unity, then the
super-large (ie 3-5 years turning 5 - 10 times the opportunities) of
the investment opportunities to come. Make big money when the
opportunity arises, we must Jiancang greedy stage, when a large
warehouse full of bull holding a clear, patient holding the feast to
enjoy a bull market.
?
2. Analysis of the value of the share price growth to reach the value
of the stock pool of super-over-area, long-term technical indicators
of whether the broader market into bull's tail, the two conclusions
confirm each other mutual unity, then the super-large (ie 3-5 years
decreased 50 - 80% chance) the loss of big money chance to come. Loss
of a lot of money when the opportunity arises, we must fear stage
clearance, when the bear market all clear clearance, who are patiently
waiting for the next opportunity to come. Really nothing you can grab
a rebound, but must have weapons to protect themselves, or they will
afford to lose a mess. (30% of the funds to do bear market rally can
be traded using weekly stock price strength and a small departure from
the broader market to find trading opportunities. There is no such
weapons do not get involved, do not consider themselves smart, how
much deficit disorder how many hands will hold.)
?
To the permit based on the data of 100 stocks, according to 30% net
profit growth for three consecutive years or more, the main revenue
growth of 30% or more, more than 15% of net assets value of the stock
as a growth stock pool.
Maotai, Suning Appliance, Changyu A, Offshore Oil, Yunnanbaiyao,
Yantai Wanhua, Zhenhua Port Machinery, Poly Real Estate, China Vanke,
Gree 10.
?
1. Moutai
Intrinsic value: 3 yuan per share in 2007. The next 5 years at 20%
compound growth rate of 20 times earnings in calculating the intrinsic
value of 90; the next 3 years, 30% compound growth rate, the intrinsic
value of 148.5 yuan.
????Low Estimate: half of the amount calculated according to the
safety bid 45 dollars or 74 yuan.
????Underestimated the area: the upper and lower 10% of the low
valuation that is 40.5 - 49.5 million, or 66.6 - 81.5 yuan.
????Buy price: 45 yuan. Composite increased by 30% 3 years, buying low
valuation: 74 yuan.
?
2. Suning Appliance
Intrinsic value: earnings per share of 1.02 yuan in 2007. The next 5
years at 20% compound growth rate of 20 times earnings in calculating
the intrinsic value of 31.6 yuan. The next 3 years, 30% compound
growth rate, the intrinsic value of 52 yuan.
????Low estimate: 20% at 5 years compound growth rate, half of the
amount calculated by the Security purchase price of 15.8 yuan; 30% at
3-year compound growth rate, calculated at half of the amount bid
security of 26 million.
????Underestimated the area: 20% growth and low valuations
underestimate the area down 10% 13.5 - 16.5 million; 30% growth and
low valuations underestimate the area down 10% 23.4 - 28.6 million;
????Bid price: 15.8 yuan. Composite increased by 30% 3 years, buying
low valuation: 25 yuan.
?
3. Changyu A
Intrinsic Value: 1.21 per share in 2007. The next 5 years at 20%
compound growth rate, calculated at 20 times earnings the value of
area of 37.5 million.
????Low Valuation: Security purchase price calculated by half of the
amount of 18.8 million.
????Underestimated the area: the upper and lower 10% of the low
valuation that is 16 - 20 dollars.
????Bid price: 18.8 yuan. Composite increased by 30% 3 years, buying
low valuation: 30 yuan.
?
4. Offshore Oil Engineering
Intrinsic Value: 1.13 yuan per share in 2007. The next 5 years at 20%
compound growth rate, calculated according to the value area of 20
times earnings at 34 yuan, 10 get 10, so the price adjustments of 17.5
million.
????Low Estimate: half of the amount calculated by purchase price is
8.8 yuan Security
????Underestimated the area: the upper and lower 10% of the low
valuation that is 7.7 - 9.4 million.
????Buy price: 8.8 yuan.
?
5. Yunnanbaiyao
Intrinsic value: 0.7 yuan per share in 2007. The next 5 years at 20%
compound growth rate, calculated according to the value area of 20
times earnings 21.7 million.
????Low Valuation: Security purchase price calculated by half of the
amount of 10.9 million.
????Underestimated the area: the upper and lower 10% of the 9 - 12
yuan to buy.
????Bid price: 10.9 yuan.
?
6. Yantai Wanhua
Intrinsic Value: 0.89 yuan per share in 2007. The next 5 years at 20%
compound growth rate, calculated at 20 times earnings the value of
area 27.6 million.
????Low Valuation: Security purchase price by half of the amount
calculated at 13.8 yuan.
????Underestimated the area: the upper and lower 10% or 12 - 15 yuan
to buy.
????Bid price: 13.8 yuan.
?
7. Zhenhua Port Machinery
Intrinsic Value: 0.65 yuan per share in 2007. The next 5 years at 20%
compound growth rate, calculated according to the value area of 20
times earnings in the 20.
????Low Estimate: half of the amount calculated according to the
safety bid 10 dollars.
????Underestimated the area: low valuation that is down 10% 9 - 11
yuan to buy.
????Buy price: 10 yuan.
?
8. Poly Real Estate
Intrinsic value: 1.3 yuan per share in 2007. The next 5 years at 20%
compound growth rate, calculated according to the value area of 20
times earnings at 40 yuan, 10 get 10 stock price was adjusted to 20.15
yuan.
????Low Estimate: half of the amount calculated according to the
safety bid 10 dollars.
????Underestimated the area: the upper and lower 10% of the 9 - 11
yuan to buy.
????Buy price: 10 yuan.
?
9. Vanke
Intrinsic value: earnings per share of 0.73 yuan in 2007. The next 5
years at 20% compound growth rate, calculated according to the value
area of 20 times earnings at 20 yuan, 10 get 6 shares adjusted to 14.1
yuan.
????Low Estimate: half of the amount calculated according to purchase
price of 7 yuan safety.
????Underestimated the area: the upper and lower 10% or 6.3 - 7.7 yuan
to buy.
????Buy price: 7 yuan.
?
10. Gree Electric Appliances
Intrinsic value: earnings per share of 1.58 yuan in 2007. The next 5
years at 20% compound growth rate, calculated according to the
intrinsic value of 20 times earnings 48 yuan, 10 get 5 shares adjusted
to 32.65 yuan.
????Underestimated the area: security purchase price by half of the
amount calculated was 16.3 million.
????Underestimated the area: the upper and lower 10% or 14 - 18 yuan
to buy.
????Bid price: 16.3 yuan.

				
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