Value Investing in Asia

Foreword

Everyone wants to buy a dollar-worth of assets for 50 cents. That is at the very heart of value investing – to buy an asset at a price that could be valued at significantly more. But what exactly is value?

Are they always shares that are trading below the sum of their net assets? Or are they shares in stable companies that have been underappreciated by the market? There is another way of looking at value – they could be shares in fast-growing companies where the potential for growth has been underestimated for a variety of reasons.

The concept of separating price and value is handled with surgical precision by Lim Peir Shenq and Cheong Mun Hong. They draw on their vast stock market experience to take readers on a whistle-stop tour around six Asian bourses in search of value investments. They touch on the thorny topic of corporate governance and why it should matter when we invest.

Peir Shenq and Mun Hong pay special attention to the use of strategies. While there is no one-size-fits-all approach for value investing, the use of a consistent approach to identifying value cannot be stressed strongly enough. In other words, if you don't know what you are looking for, then how can you possibly know when you have found it?

The two writers cleverly categorise value under three main headings, namely, asset value, current earning power value and growth value. Through a step-by-step process, they provide a useful guide to help readers to understand the different ways to identify ...