Investing For Value

This is Chapter 6 of my book Mastering Value Investing: Practical Strategies for Real-World Results . Go there for links to the other chapters.   Most investors start in the wrong place. They look at stock prices. They chase forecasts. They argue about valuation multiples. But here is the uncomfortable truth: if you do not understand the business, valuation is just guesswork. In this chapter, I walk through my real-world framework for analysing a company - the same structured approach I have refined over two decades in corporate planning and financial analysis. It starts with one principle: business analysis comes first. Before you think about intrinsic value, you need to answer harder questions: How does this company really make money? Is growth driven by volume, pricing power, or acquisitions? Instead of pretending we can predict the future with precision, I simplify it into three scenarios: performance will be the same as the past, better than the past, or worse th...

Tips E-25: A 1-minute summary of my fundamental analysis of Rambus Inc (NASDAQ: RMBS)     Investment Thesis Rambus has successfully transitioned toward scalable IP licensing and memory interface chips aligned with AI and data-center growth. Strong moats and financial discipline support long-term value creation, but optimistic market pricing already reflects much of this improvement. Main Business Rambus operates a focused, fabless model built on proprietary memory interface chips and high-margin silicon IP licensing. Its two core segments serve advanced computing, AI, and data-center ecosystems. Deep customer integration, enforceable patents, and long design cycles create high switching costs, supporting recurring revenues and durable competitive advantages. Growth Revenue growth has been steady, supported by acquisitions and favourable end-market tailwinds rather than aggressive organic expansion alone. AI infrastructure, DDR5 adoption, and data-center expan...

Value Investing Case Study 120-1: A fundamental analysis of Nestle (Malaysia) Berhad, where I assess whether it is a high-quality business with fading economics.    For decades, Nestlé (Malaysia) Berhad has been the gold standard of Malaysian consumer staples. Iconic brands. Stable demand. Strong dividends. But a closer look at the numbers tells a more complicated story. Over the past decade, Nestlé Malaysia has continued to grow revenue steadily and generate impressive cash flows. Returns on capital remain well above the cost of capital — a hallmark of a high-quality business. Yet beneath this resilience lies a persistent and uncomfortable trend: profits and margins have been quietly eroding. Gross profit and contribution margins have been on a long-term decline. This is not a story of bloated overheads or sloppy execution — fixed costs are tightly controlled. Instead, the pressure is coming from the top of the income statement: sustained input cost inflation, cons...

Tips E-24: A 1-minute summary of my fundamental analysis of TTM Technologies Inc. (NASDAQ: TTMI) Investment Thesis TTMI now focuses on advanced PCBs and mission-critical systems rather than commoditized consumer electronics. Despite this strategic progress, persistent cost-control issues and subpar returns on capital mean the transformation has not translated into sustainable shareholder value. Main Business The company products are used in aerospace and defense platforms, data center infrastructure, and automotive electronics. These markets feature higher reliability requirements and longer product cycles, supporting differentiation but demanding disciplined execution and cost management. Growth From 2015 to 2024, revenue grew only about 1.7% CAGR as TTMI divested consumer-facing units and shut down commoditized operations. Underlying demand improved, evidenced by 9.4% growth in 2024 when no divestitures occurred, suggesting better organic potential going forward. Profitabili...

This is Chapter 5 of my book Mastering Value Investing: Practical Strategies for Real-World Results . Go there for links to the other chapters. Most investors think diversification reduces risk. They are only half right. If diversification were the magic answer, owning 100 stocks would make you rich and safe. But in reality, many diversified portfolios quietly underperform - not because investors took too much risk, but because they misunderstood what risk actually is. This chapter challenges the comfortable myths most investors rely on. Risk is not volatility. It is not short-term price swings. Risk is permanent capital loss - and portfolio construction is one of the most underappreciated tools for preventing it. Inside this analysis, you will see why portfolio construction is not an afterthought, but a core risk-management system. Not through formulae or academic theory, but through practical decisions every investor must make. You will also see real-world examples that ...