Cigar Butts investing


#1

Anyone uses this method of buying stocks which market really don’t want to touch?

I am seeing stocks like Lippo Malls at their lowest points hitting prices like 0.18 and now it is 0.24. If one got vested it nets a gain of 33% in merely more than just 1 month, trouncing lots of stock returns. Just wondering anyone using this technique to gain exposure to stocks which market is throwing away at the moment?


#2

I dont think it has to apply only to Lippo Malls only.
The same can be applied to CDG in 2018 when prices went below $2, and the current one is probably Singtel at below $3


#3

Yup agree it doesn’t apply to lippo malls only.

What is your valuation technique you guys are using for these sort of “net net stocks”?

For me i am using a technique called CNAV (Conservative net asset value) taught previously by bigfatpurse.


#4

This CNAV is new to me. Good, something to learn.

For me, I dont know. Its taken me a while to fix my mindset and most of my non-REITs are bought using SRS which encourages a longer longer term view.

I guess the important ones are

  • think this company still be around when I turn 62?
  • will it still be profit making and pay dividends?
  • think you will be able to buy again at this price?

Back then my logic for CDG at 1.96 was around these. I mean cdg was paying dividends n people were scared that uber which was burning cash would kill CDG? U gotta have faith in those times though, so easy to give up when everyone is dumping.

Even now, as Singtel is going around 2.9+ to 3, how u see?
My colleagues are shunning as though Singtel has leprosy


#5

CNAV requires a lot of patience for value to be unlocked. OKP is one such CNAV stock which saw its shares recently up 10% (20 to 22c).


#6

Did you go for their course on cnav as well? Glad to see someone here .


#7

Yeah! Nice to see you =)

In 2018 I bought 3 CNAV stock, mainly LTC (In at 64c and magically 11 days later got the offer to delist for 92.5c), Delong and OUE.

LTC delisted. Delong too early, exited before the $7 offer. For OUE, now down 20%.

For OUE, it was at a time where I did not know about technical analysis. I now incorporate TA for a better entry if I were to dabble into CNAV stocks.

At the moment, OUE is my only stock. I am looking at Bonvests for the longest time now and more recently OKP. Will think about allocating some resources there…


#8

Are these 3 all cnav stocks?