haikeyila

so..you never 'needed the money?(e.g for a new handbag)lol

2013-12-10 08:58

kcchongnz

If one needs to sell a stock just to buy a new handbag, I think it is not wise to buy the stock in the first place.

2013-12-10 09:20

haikeyila

you score an A for holding power - yes, but an F for understanding the fairer sex!

2013-12-10 09:35

bsngpg

Hi : I score A+ in holding power but F in realizing profit. Overall result is C only.

I opine if I need to sell for money, I am certainly over-invested. Unless there is a special case such as buying a new property. I sell only when I want to switch to another counter else the money will be there for dividend.

Hey, I just came back from Bangkok, there is a new handbag brands Naraya”曼谷包”. It is very nice and cheap, while helping poor community to have work (mission of the owner). Recommend to you.

2013-12-10 10:06

miketyu

IJMPlant-WA-strike price 2.72+current price 0.795 = 3.4
IJMPLant now = 3.5. 10 sen difference? Can someone confirm?

2013-12-10 10:26

kcchongnz

When to sell?

I would like to take this opportunity to share my view on “when to sell” using my portfolio which was set up by Tan KW on 21/01/2013 11 months ago as shown in the appendix and the link below:

http://klse.i3investor.com/servlets/pfs/13147.jsp

The portfolio consist of 10 stocks picked by me generally using the principle of value investing, or buying good companies at reasonable price, and better still, at low price. Good companies in my book are those with durable business earnings high return of capitals. In additional, companies with good earnings, cash flows from operations and free cash flows, and healthy balance sheets are preferred. Good price means the market prices are significantly below their intrinsic values. Intrinsic values are either based on their assets, especially quality assets higher than market prices, and present values of future cash flows which present high margins of safety against their prices.

If all the stocks are held until to date (12/12/13), the total return of the portfolio would be 53%, out-performed the KLSE of 11.6% by more than 400%. However, I have already sold off more than half the stocks in the portfolio.

I sold off ECS ICT and SKP Resources because for a number of quarters, their performances have been deteriorating and hence their intrinsic values may have been reduced. But the main reason was because I have found better stocks to buy. These two companies are still good and safe companies to own in my opinion as they are profitable, having good balance sheets and cash flows. If the recent poor performance is just temporary, I believe they will outperform in the future.

I sold off Jobstreet, Pantech and NTPM because I thought their share prices have gone up to their intrinsic values. I did not foresee the power of Jobstreet’s continuous share buyback, and most of all its declaration of the 1 for 1 bonus issues. That really caused its share price to spike up a lot. Its business however remain as very durable with the light assets model and plenty of free cash flows. Same is for NTPM.

I bought Kimlun because of its continuous winning of jobs and the buying of the shares by its major shareholder. It has very good operating efficiencies too with ROE and ROIC above 20%. Its operating and net margins, however, are very low in single digit compared to more than 30% those of Pintaras. Kimlun has considerable amount of debts. The worst is its poor cash flows from operations and free cash flows. In term of enterprise value over ebit, it was trading at a few times higher than Pintaras. Hence I thought I may be wrong in my initial appraisal and sold off Kimlun.

I still hold Pintaras and Prestariang although their returns have more than doubled in the last 11 months and their share prices have exceeded my original estimated intrinsic values. However, their fundamentals continue to improve and their intrinsic values continue to climb.

As for Kumpulan Fima, its earnings has reduced somewhat for last year. Its share price has not moved much too. However, its fundamentals remain intact; i.e. its earnings, balance sheet and cash flows are still very good. Its share price still presents a big discount to its intrinsic value in my opinion. Hence I continue to hold this stock in my portfolio.

KC Chong 12/12/13

Appendix
Stock Name Ref Price Price now Dividend Gain % gain
Kfima 2.02 1.95 0.08 0.01 0.5%
Pintaras 3.12 6.22 0.25 3.35 107%
ECS 1.06 1.17 0.06 0.17 16.0%
Plenitude 1.85 2.60 0.06 0.81 43.8%
Jobstreest 1.20 2.40 0.06 1.26 105%
Pantech 0.78 0.99 0.06 0.27 34.6%
SKPRes 0.34 0.315 0.02 -0.01 -1.5%
NTPM 0.47 0.75 0.03 0.31 66.0%
Kimlun 1.50 1.89 0.05 0.44 29.3%
Prestariang 1.21 2.66 0.10 1.55 128%

Avearage 52.9%

2013-12-12 09:38

bsngpg

Hi KC Chong:
i) 53% return if “hold till today”.

ii) What is the % return of the actual case where some stocks were sold and switched to others or holding cash?

iii) I am curious to know if “hold till today” is better than “sell/switch some to other stocks half way “? Or other wise?
Thks

2013-12-12 10:05

kcchongnz

You notice that I have started another portfolio on the initiative of Ta KW in August. In my new portfolio, I maintain Kumpulan Fima and Pintaras in the portfolio and have another 9 new stocks. I continued to ride on Pintaras's share price appreciation. Yes, I bought all those stocks I wrote about.

The new portfolio returns about 33% less than 5 months ago to now. There are some big winners such as Fibon (63%), Datasonic (174%), Willow (39%). I have sold all these, also too early as their share prices have risen up closed to my estimate of their intrinsic values, or when I thought I have other better stocks to buy. I still have some decent winners besides Pintaras (107%), such as Homeritz (42%), Daiman (21%). I have also bought some other stocks, sold some, played some derivatives etc.

So it is hard to compare whether it is better to still hold the original portfolio which returned 53%. However, a look at the gain of my investment now and a year ago, the increase in gain in that period is about that magnitude, ie 53%. Hence I think it ended up about the same, whether I still hold the original portfolio, or what I have done since.

It only added some fun to my investing experience.

2013-12-12 14:39

houseofordos

KC, can you advise why you sold Willow so early ? I am still holding this one among the 3 you mentioned. I thought EPV valuation for Willow was about 80 sen based on your calculation.

2013-12-12 14:42

KC Loh

actually kcchongnz, it would be interesting to try spotting gems and make a top pick in a high market! that would really test the FA investor's mettle! just saying... :)

2013-12-12 14:45

kcchongnz

Just checked my EPV of Willow. Yes, it is 83 sen. It is a conservative assumption of no growth of its Ebit for the rest of its economic life. So I have sold too early, itchy fingers I guess.

That is why one must have patience in investing, the proper mind set. Sigh, I am just human.

2013-12-12 14:51

houseofordos

doesnt this tell us that selling is harder than buying ? haha

2013-12-12 14:52

kcchongnz

Posted by KC Loh > Dec 12, 2013 02:45 PM | Report Abuse

actually kcchongnz, it would be interesting to try spotting gems and make a top pick in a high market! that would really test the FA investor's mettle! just saying... :)

I think the present market is not really that high yet, as compared to those days in 2006-07, 1993, 19967 etc. I really don't think the market is overvalued.

However, I already find it very hard to find companies which can give me the return I have experienced for the past one year. I think I have to learn from you now how to do it. Serious.

2013-12-12 15:01

KC Loh

no lah kcchongnz. i sometimes take unnecessary risk! :) not good to follow me!

i would also like to benchmark my % returns the following year against the last two years results.

in saying so, yup, you may be right. there are still undervalued shares lying around and a few potential turnaround companies that i have seen. Market may not be all that high for all counters yet! gonna be interesting next year for FA investors! LOL

2013-12-12 15:05

Avocado_C

Off topic a bit. Note to bsngpg, the Naraya bag is "huge" in Bangkok! You can see crazy Mainland Chinese, HK and some Japanese queueing in the shop to buy their bags (like LV in Paris). This is very good for the Thai People because it's a Thai brand and made in Thailand! Unfortunately, I have yet to find a Malaysian brand that tourists are queueing to buy.

2013-12-12 15:07

bsngpg

Hi KC Chong :
Thank you for your prompt response.

My data:
Jun 13 to Dec13 : KLCI 1774 -->1835=+3.4%

Jun 13 to Dec13 : PIE(4.4-->6.6=50%) switched to GTronic (2.2-->3.1=48%). Switch or hold is insignificant different.

Jun 13 to Dec13 : Notion(0.735-->0.71=-3.4% )

Jun 13 to Dec13 : Mahsing (2.32--->2.2=-5.2% )(adj 20% bonus and 76 sens div in Jul and Sep 13)

Jun 13 to Dec13 : CIMB (8.15-->7.7=-5.5% )(adj 12.8sens div)

If we know how to assess good stocks just to make the same return as the broad mktg, not to mention better than the broad mktg, sell and switch is the winner.

2013-12-12 15:26

bsngpg

Avocado_C : If you want, I can buy you as many as you want. They are cheap, RM20, RM50 etc.

2013-12-12 15:27

kcchongnz

Posted by bsngpg > Dec 12, 2013 03:26 PM | Report Abuse

If we know how to assess good stocks just to make the same return as the broad mktg, not to mention better than the broad mktg, sell and switch is the winner.

Yes, I fully agree with you here. But one thing one must know whether his initial appraisal of the companies is wrong and hence should switch to a better company, again requiring him to know if the stock he is going to switch to has higher chance of better return.

From here I hope you don't get offended as I am going to give you some of my opinions on investing for the well being of himself. This is purely out of good intention.

When one invests his hard earned money, one should not have the mentality of hero worshiping. For example you know the boss of a company and you trust him fully and invest just because of your trust in him. It is good. But have you done some due diligence whether the company is really that good for you to switch your investment to this stock? What are the risks etc?

Another example, a very successful investor says you will be super rich investing in a certain stock because of his reasoning of this and that. He even said he needs not to know how to read income statement, balance sheet, and don't even understand what is free cash flow. He even say may be you should use leverage, or margin to boast up your return. But you trust him so much and you follow him to invest whatever he does. Is it a right thing to do? Shouldn't you have done some analysis yourself if it is a right thing to do before you switch your money to this stock?

2013-12-12 15:48

bsngpg

Hi KC Chong :

I am confused if the advices were given to me as your sentence started with you(me)but ended with “well being of himself” instead of “yourself(me)”.

If the advices were for me, I feel very lucky to have advices and very please to listen (受教) as I always see you as a knowledgeable good guy who willing to share. Thank you very much.

But please help to clear my doubt if the two big advices (paragraph) relate to me.

i) I like to check background of directors for their competency, integrity and vision but never for hero worshiping.

ii) I always said I am shameful for not understanding financial statement, and is learning to understand it. Am I really posted an image as described in paragraph 2 ? OMG, I hated myself if I did.

Hi KC : Please clarify. I will appreciate your truth words with open heart. Tell me the truth, please.

2013-12-12 18:50

bsngpg

Hi KC Chong: 最终收到. Some people score good result in school by smartness whereas some by hard working. I am certainly the later. Until today I am still not smart but hard working.

I read thru your advices for at least 15 times, at last I GOT it.
Thank you very much for your advices.

I regret too by jumping recklessly into JT at that time. I had paid for the price. I think he was joking by saying not understanding financial statement. 还是会相信人性本善, 切不再用血汗钱去相信.

送给你: 无言感激 http://www.youtube.com/watch?v=C9vIkP19xfE

2013-12-12 21:19