In previous articles we
have discussed that the best time to buy shares of Berkshire Hathaway is when
the price dropped so deep in a given year until its value gap becomes positive
(you can read the previous
article here). And now, this year of 2015 is the first time that Jakarta Composite
Index (JCI) dropped significantly since 2008, that in year to date (until
September, 10) the stock index has dropped 16.1% (While in 2013, the stock
index fell only 1%). So, although some stocks may still rise, but most other
stocks fell significantly compared to their position at the beginning of the
year, even if the equity value of the company is actually still rising. In this
condition, some stocks then create a positive ‘value gap’.
Investment Opportunity from ‘Value Gap’
Since taken over by
Warren Buffett in 1964, Berkshire Hathaway (BRK) has made investment gain of a
total of 1,826,163% for anyone who
holds its stock in the last 50 years (until 2014). This means that if you buy
BRK for US$ 1,000 in 1964 and still holding it until the end of 2014, then by
ignoring the factor of inflation, your investment is now worth.. US$ 18.3 million.
Bumi Resources: Analysis of Debt Restructuring
Last September, the
management of Bumi Resources (BUMI), the largest mining company in the
Indonesia, announced the company’s latest proposal of debt restructuring. As of
August 31, 2015, the outstanding debt of BUMI stood at nearly US$ 4 billion,
and most of them will mature in less than a year. Given the poor condition of
mining sector, including the price of coal remains low in the last few years,
the company had no choice but to propose the options of debt restructuring to
its creditors.
Investing is Just Like Mountaineering
Last weekend I with
some friends went to climb a mountain, in this case Mount Salak in Sukabumi/Bogor,
West Java, which has an altitude of 2,211 meters above the sea level. In
contrast to other leisure activities which are relaxing, mountaineering requires
physical endurance so I had to exercise regularly for at least a week before
the ascent. Therefore, since the last ascent about two or three years ago, only
last weekend I had the time to do it again. And after cramps, rain, cold, and
thirsty for two days and one night, thank God we successfully reached the summit,
and also successfully returned home.
The Secret Method of Investment
On Thursday, October 1,
I met face to face with an investor named Joel Cohen, who works for Mitimco, an asset
management company in the US with AUM of approximately US$ 19 billion. Although
I’ve had previously met several investors from abroad (where they came to
Jakarta), but this is my first time to meet someone who represents a large
institution. So for me, it's a brand new experience.
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