Man Wah - A multi-bagger in the making?

Warren Buffet\'s approach to investing can be summarized succinctly in his 1987 letter to the Berkshire shareholders: \"Whenever Charlie and I buy common stocks for Berkshire\'s insurance companies (leaving aside arbitrage purchases, discussed later) we approach the transaction as if we were buying into a private business. We look at the economic prospects of the business, the people in charge of running it, and the price we must pay. We do not have in mind any time or price for sale. Indeed, we are willing to hold a stock indefinitely so long as we expect the business to increase in intrinsic value at a satisfactory rate. When investing, we view ourselves as business analysts - not as market analysts, not as macroeconomic analysts, and not even as security analysts. Our approach makes an active trading market useful, since it periodically presents us with mouth-watering opportunities. But by no means is it essential: a prolonged suspension of trading in the securities we hold would not bother us any more than does the lack of daily quotations on World Book or Fechheimer. Eventually, our economic fate will be determined by the economic fate of the business we own, whether our ownership is partial or total.\" How many of us can detach ourselves from the short-term activity of the market? How many of us can ignore the market and be purely a business analyst? I am trying but it is really easier said than done.

In the next few weeks up to the SGM, Man Wah share price performance has a direct impact on existing shareholders. This is a rare exception where price and value is directly related! Recall what I said earlier regarding the terms of the Famous bedding agreement: \"The new Man Wah shares to be issued to Mr Yu will be at an issue price to be based on the weighted average price from 26 Aug 08 to within 14 days after the Special General Meeting. So if Man Wah share price increases from now on, Mr Yu will get less shares. If it decreases, he will get more shares.\" So far the market meltdown has been beneficial to Mr Yu. I am glad some senses have come back to Man Wah today, up 1 cent to 21 cents at close.

The success of this trade talk is good news. It reaffirms my belief that Man Wah is not going to be hit suddenly by a US import ban on their sofas. China, U.S. achieve positive results at bilateral trade talks LOS ANGELES, Sept. 16 (Xinhua) -- \"...The Chinese side also announced to lift bird flu-related ban on poultry products from seven U.S. states including New York, and conditionally resume imports of American beef, while the U.S. side expressed its stance against trade protectionism and promised to push for the lifting of trade barriers against some Chinese products like see food, fruit and woodcraft. Tuesday\'s meeting marked the 25th anniversary of the China-U.S. JCCT commission, a high-level government-to-government dialogue seeking to open market opportunities and resolve trade disputes between the two countries...\" Full article: news.xinhuanet.com/english/2008-09/17/content_10054527.htm

All look good and great, except the share price. Should be trading at better valuations.

Note: this is a copy and paste from the other reply to another post but I feel that I should paste it here too since this thread is on Man Wah and the other was on Cacola both of which is high on my buy list... Mr Market seems to be in a manic depressive mood. Some companies are even trading around 1-2 Forward PE especially S-Chips. Sinotel is another one and many more if you were to strip out the net cash from the price of the stock. The greatest fear right now is that cheap seems to get cheaper..ie: catching a \'parang!\' Having said so, I\'m still buying and will buy some more and prepared for a 50% fall which I do think is a real possibility(50/50) if the DOW crashes to 7000. All I can say to all value investors out there, buy with caution...as we\'ll never ever know where the bottom is although it seems darn cheap right now. All my calculations in my 20 years of investing tells me that this is really a once in a lifetime opportunity but this has to be really cash that you are able to hold for 5+ years or more to earn huge return. NEVER leverage although you\'re 110% sure that this will be a winning stock. BTW, there are many stocks in the NYSE that are trading at ridiculous valuations so take your pick. My advise out there is to select the best 10-20 stocks and equally divide your portfolio. For example if you had 100,000 to invest here is the action plan 1. Spread it out to 5000 x 20 stocks (choose the best of breed according to your risk profile and valuation methodology. My valuation is based of business moat, FPE, Low debt, FCF, High ROE, minimum 15% CAGR and other qualitative measurement. 2. Buy in 20% lots for every stock. Following the above example, buy maximum $1000 worth shares every 1 month. In 5 months you would have reach your single stock limit. Why do this?? Simple...as I said I do not know where the bottom is and this will allow you to average down of the stock tanks. The flipside of this strategy is that the stock may surge half way through...what can I say...at least you made good money on half the proposed allocation amount...not too bad after all. 3. Once the limit is reach, hang in for the possible 5 year+ long wait. If you cannot wait, then don;t invest a single cent as you would probably lose anyway. I do welcomed any comments both positive and negatives as we all hang in together for this one hell of a stormy ride!

i agreed that this is really a once in a lifetime opportunity. i agreed that it is very hard to find the bottom. i believe one should have the ammunition to buy every month for at least a year from now since market has gone down by one year. for you guide, after the internet bubble burst, the market went down from mid 2000 to mid 2002 before it rebound. (approx 2 years) preferably, buy stock which will not be obsolete, i.e. aviod high tech stocks. thank you.