tag:blogger.com,1999:blog-7294165939647321702.post9114427006433932656..comments2024-03-11T10:31:06.107-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Returns Not Always What They SeemSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7294165939647321702.post-83376042664106653802009-12-11T20:07:36.672-05:002009-12-11T20:07:36.672-05:00Hi jmcardle,
I saw enough about NWD to devote a p...Hi jmcardle,<br /><br />I saw enough about NWD to devote a post to it! You can read it <a href="http://www.barelkarsan.com/2009/12/cheap-but-look-behind-numbers.html" rel="nofollow">here</a>Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-50015991414784790162009-12-04T14:59:54.526-05:002009-12-04T14:59:54.526-05:00Ah I understand now, ROC and ROE are two different...Ah I understand now, ROC and ROE are two different formulas measuring similar performances. Thanks.AKWONnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-8898921137481019332009-12-04T14:57:00.568-05:002009-12-04T14:57:00.568-05:00I was just confused how you were able to just back...I was just confused how you were able to just back out the cash from the equity to show ROE without cash. Since cash is an asset , I just thought backing cash out only would work for calculating adjusted return on asset.AKWONnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-64194256937289448092009-12-03T02:11:54.607-05:002009-12-03T02:11:54.607-05:00Hi jmcardle,
I haven't looked at NWD in a whi...Hi jmcardle,<br /><br />I haven't looked at NWD in a while. If I find anything interesting with it, I'll let you know!<br /><br />Hi Akwon,<br /><br />The idea was to determine the company's return on its invested capital, rather than just look at its standard ROE calculation. While the excess cash just sits there, the invested capital generates excellent returns, suggesting the company has the ability to earn better returns than the simple ROE calculation suggests. There is no assumption that "all cash came from selling common stock", but perhaps I'm not understanding what you're saying.Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-62444164794022264952009-12-01T18:42:04.603-05:002009-12-01T18:42:04.603-05:00Hey Saj, I do not understand why you subtracted ca...Hey Saj, I do not understand why you subtracted cash. ROE is net income/ Average Shareholders Equity correct? So by subtracting cash we are assuming all cash came from selling common stocks for capital. I agree cash does affect return on equity indirectly because that cash could have been used to invest in additional assets or RD to improve sales or net income. However, to just subtract it directly from equity seems very arbitrary. I hope you can clarify this.AKWONnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-81679231498714348812009-12-01T16:35:46.803-05:002009-12-01T16:35:46.803-05:00I know you were looking at NWD (New Dragon Asia) i...I know you were looking at NWD (New Dragon Asia) in the past, but were concerned about the huge number of outstanding warrants and options. With the options and warrants now so far out of the money, does the 0.12 share price pique your interest? It looks cheap on Book value, net current asset basis, but it makes me wonder whether I am missing something. If something looks too good to be true and all that...Jimmymachttps://www.blogger.com/profile/08820313221024143080noreply@blogger.com