Koon Yew Yin's Blog
Valuegrowth Investing - Koon Yew Yin
Koon Yew Yin
Publish date: Thu, 16 Jan 2014, 03:58 PM
Koon Yew Yin
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An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.
All materials published here are prepared by Mr. Koon Yew Yin
All materials published here are prepared by Mr. Koon Yew Yin
Valuegrowth Investing
Koon Yew Yin: 16th Jan 2014
Selection criteria
There are many stock selection criteria such as P/E ratio, dividend yield, NTA, price to book value, good cash flow etc. which all investors follow to make normal profit. I consider the most important criterion is “profit growth prospect”. Can the company continue to make increasing profit this year, next year and year after next year. If you can find a company with good profit growth prospect, you will be able to make exceptional profit.
With no disrespect to professional fund managers, they consider current earning most important and as a result they miss out those companies with poor current earning but with tremendous profit growth prospect. You can buy them cheaply because the funds are not interested.
Buy Businesses
Companies with good profit growth prospect and poor current earning are always available irrespective of the KLCI, market trend or market noise. You have to know the business you are buying, and that means being passionate about knowing everything about that company.
You must look for businesses that you can easily understand because you have to be able to make an educated guess about the future earnings of the business. The more complex a business is, the more uncertain your projections will be. Simple businesses also have an advantage, as it's harder for incompetent management to make big mistake to affect the bottom line.
Owner managers
Management can make a huge difference in a company. Good management adds value beyond a company's hard assets. Bad management can destroy even the most solid financials. It is always very difficult to judge whether the managers are honest, intelligent and hard working because you do not know them personally for a long time.
One sure way is to find companies with the controlling shareholders managing the business. They will surely protect their own interest in the company.
Value investors want managers who act like owners. They focus on growing the business, thus creating long-term shareholder value. Managers who act like employees often focus on short-term earnings in order to secure a bonus or other performance perk, sometimes to the long-term detriment of the company. If you're thinking like an owner, you pay yourself a reasonable wage and depend on gains in your stock holdings for a bonus.
Do not be afraid to buy when you have found a good one
Commonly accepted investment principles encourage you to diversify by owning many stocks of various kind of businesses. I think it is not possible to keep track with so many shares of different type of businesses. When you have discovered one really good share, you should not be afraid to buy more. You should not own more than 5 counters.
Keep looking for a better share to buy using margin finance
They say the joy of finding a girl friend is in the pursuit. The joy of investing is in finding another better share to buy. After you have found a better share to buy, you should use margin finance to buy provided you are sure that the newly discovered share has a profit growth prospect of more than the borrowing interest. The current interest rate for margin finance is 4.6 % without rollover fee.
How to use margin finance to increase your profit
As you know, all shares moves up and down. To maximize your profit you should sell some of the shares which have gone up too rapidly as no share can go up indefinitely for whatever reason. In this way you will always have some money to buy the shares when they are under correction.
Do not worry about the market index
As you know, the KLCI is around record level and many investors are afraid of the next market crash. As a result, you have the opportunity to buy really undervalued stocks with good profit growth prospect. I do not believe that the market will crash in the next few months.
If you approach buying stocks like buying a business, you will want to hold onto them as long as the fundamentals are strong.
When to sell
As a long term valuegrowth investor, you do not buy and sell frequently. However, you must sell any of your holdings when you see that the reasons to buy it are no longer valid; or you would not buy it at the current price. You must remember to sell and do not fall in love with your holdings. If you do not sell, you will have no profit and you will not have money to buy when there is another buying opportunity.
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Discussions
9 people like this. Showing 50 of 98 comments
Haha... sure we should meet someday... cant beat the market ? We shall see... I picked up value investing about 1 year ago and am quite happy with the results so far... I plan to measure my performance over the period of 5 years... if i cannot beat the market,I will just sell all my stocks and put in index fund... haha
2014-01-18 20:49
mr koon, i have read many great and value articles of yours on stock investment and now its great to able to meet you here in i3. i agree that jaya tiasa is an uptrending stock and its also a valuegrowth company. as far as plantations stocks are concern its jayatiasa and tsh , let hope over a short period of time, they can reduce palm oil high stockpiles thus will help in pushing up palm oil prices. please offer your views on when prices will be back to minimum rm3000 a ton, mr koon, what are your expectations on jtiasa or the performance for the following 3 three years. thank you in advance
2014-01-18 21:14
jan18 star page2,Kretam, 1info not in it,fyi is it planted abt 130trees/ha if not mistaken,or whatever the figure is,fyi, it is 10%lesser than that of IOI. Housefordos, 1yr is short,but it's nt the length that count, what is ur holding, name it. And take my advice,sell all ur stocks. Dont time the mkt,but fr this time & once every 7-10yrs,ucan do it
2014-01-19 04:01
Imenwe, as much as I hate to respond to your insulting remark, I have to otherwise you would think I am dumb. You are crude and badly brought up. Even if you want to say all those things, you do not know how to do it in a subtle way. You are a failure because you have the wrong attitude. Why are you so stupid in making such bad commentaries? You are so stupid to expose your bad manners when you don’t even know me.
Why don’t you expose yourself instead hiding behind the stupid name Imenwe. Tell us your name so that all the readers will know who you really are.
As I know it is very ugly to brag, but I am sure readers will forgive me and understand why I need to do it. It would seem like boasting if I tell you who I am.
I am a retired Chartered Civil Engineer and a founder of Mudajaya Group Bhd, Gamuda Bhd. IJM Corporation Bhd. I gave their first employment to these multi millionaires, namely, Ng Ying Loong, former CEO of Mudajaya, Dato LinYun Ling CEO of Gamuda and Dato Richard Fong Loong Tuck, Dy Chairman Glomac Bhd.
I was a member of the Board of Engineers, Malaysia and Chairman of the professional practice disciplinary committee. I was also a member of SIRIM committee for drafting the Malaysian Standards for Cement and Concrete. I was the Secretary General of the Master Builders Association for 9 years when Tan Sri Yeoh Tiong Lay was the Chairman.
In 2010 Fobes nominated me as one of the four ‘Hero Philanthropists in Malaysia’; Tan Sri Vincent Tan was one of the four. I have given more than 200 scholarships to help poor students to complete their tertiary education. I have vowed to give away all my wealth to charity when I die. If you google my name, you will know more about me
I think I have bragged enough. It is actually meant for Imenwe. I trust all the other readers will understand and forgive me.
2014-01-19 04:21
Well it is L not I! I am not hiding myself it is a short form of my name! I am pretty sure my friends and family will know it is me when they saw my id!
Lol people are labeling Mr Koon as Warren Buffett of Malaysia but as far as I know he is a very humble and humor old man despite his tract record of beating everyone in the last 58 years. But i can only see the arrogance of Mr Koon since his Jaya Tiasa article was posted in Dali's blog!
All Mr Koon's personal attacks on me is the best evidence of his arrogance! Since the first article on Jaya Tiasa he had labelled retail investors as short sighted! He keep on asking others to show their result and follow his strategy to success! Moreover now he is labelling other as a failure and must follow him to be successful. I believe it is a shame for Warren when his name was used on an arrogant old man. Warren is not only well known as the greatest investor but also for his humble and humor!
I had tried to value TSH, Bumitama, First Resources to compare with Jaya Tiasa by using Mr Koon's EV/hectare and it show Jtiasa is the most expensive counters and we should go for TSH. All the three counters have large tract of unplanted land which can be translated to future growth prospect and their yield are much better than jtiasa. Moreover First Resources even have downstream refining and biodiesel capacity. They are all free since the method only take the landbank into calculation!
I must clarified that I am opposing this method as the land price paid previously might be overpaid and it doesn't take into account the quality of the land. I believe a counter should be valued on free cash flow or p/e rather than their liquidation value.
Good luck for those who are dreaming that Tan Sri Tiong Hiew King will bail them out by buying over Jtiasa at a hefty price tag!
2014-01-19 06:32
By the way calling me stupid won't change the fact that investing in Xingquan is a big mistake!
Warren Buffett - The most important thing to do if you find yourself in a hole is to stop digging.
I believe this should be applied to Xing Quan!
2014-01-19 06:40
uncle koon， 树大招风啊，做人要低调点。。。
unless u want free and cheap publicity like what donald trump or robert kiyosaki or oiteikbag doing, then u must 吃得咸鱼抵得渴.
u see the cipet teh, in spite for so long he attacked by albert lim and etc etc, he till like to post his rubbish blog from time to time, but he keep ignoring other in a very consistent and discipline manner... kikiki
if free publicity is not your intention.. then please refer to my 1st sentences- 树大招风啊，做人要低调点。。。高处不胜寒哦。。。 kikiki...
2014-01-19 07:55
vinext, I really dont see why I sould sell all my stocks which are still below intrinsic value... You are right, time horizon is not concern, I ll sell my stocks once they reach the i trinsic value... My intention of reviewing the performance over 5 years is to see the consistency of my investment results.
2014-01-19 08:37
lmenwe,give uncle koon a break. I revere him for wat he did t charities, investin community n the nation building.
HouseOfFords, time wil tell. U r right though.
Fatcat,can u paste the link of that mr teh? curious wat he wrote,lol
2014-01-19 12:17
Posted by Fat Cat Tim Buddy > Jan 19, 2014 07:55 AM | Report Abuse
uncle koon， 树大招风啊，做人要低调点。。。
Ans : Please be professional. Please read the below comment.
Posted by joni > Jan 19, 2014 11:24 AM | Report Abuse
Real investors are professional or at least on average.
Any information available are just for reference.
Agreed to disagreed and take your position at your own risk and within your financial means.
2014-01-19 12:36
Stocks investment is between you and your hard earned money the aim is to make money it is not a competition between investors to see who make more money so there is no need to get personal.the stock market can be illogical some people make big money from the worst stocks( in term of balance sheet)in bursa. Some very good counters' share price remain stagnant for years. The Chinese say " radish or leafy green you choose what you love"
2014-01-19 12:49
guys,give uncle KOON a break. I think he's just getting overly excited abt finding a good stock & is trying very hard to explain his excitement. I didnt take it offensively though his response was a shock to me.
But it's also showing how we can hv an edge over the pro, the best n big boys at time.
i'v ntg to proven here,so i think i shud able to ignore n withstand the blasting. AFter all i did name my biggest losers that is totally a write off, and actual return for top pick is only mid teens
2014-01-19 13:14
Once upon a time, I was introduced a computer program which gives signals of buy or sell with different level of strength. The program demonstrated 500% or 1000% return. I was not somebody who can be cheated easily. I validated the program in many ways and cannot find any loophole, thus I paid about RM2K to 4K (cannot remember the exact figure) for the program.
2014-01-19 16:28
KC Chong : Ai yoh , you know lah, I was 發 to Holland loh. Worst still, the website disappeared after a year.
The initiate promise was 50% subscription fee for the subsequent year.
2014-01-19 18:06
Hi Uncle Koon,
I want to thank you for your postings. I believed many profited from your previous reccommendation on Tradewind Plantation and I want to thank you as I am one of them. Keep posting Uncle. God bless you.
2014-01-19 21:25
Keep it coming Mr Koon, at least we can know more about the reasoning behind your stock selections and other people views on that. Thanks :)
2014-01-21 10:22
its always sad to see good people contributing useful articles here having to fend off clueless trolls.
2014-01-22 17:33
ok lah, because of you i will tone it down. but seriously, imho telling someone "you cannot be a good investor and you need to attend my talk" is not very appropriate for a worldy man. and please stop making unnecessary comments complaining about trolls in every thread you visit.
2014-01-22 17:48
u have a point. yet, regardless of whether you agree with someone's opinions or motives its important that you communicate it sensibly.
2014-01-22 17:50
Free Dinner: You are invited, hoped to attend but not obliged to attend
“With due respect, judging from your food and taste, you cannot be a good cook and you need to come to my house for a free dinner prepared by me and a senior well-known cook."
This was what exactly done by Mr KYY. I can read his good intention behind the lines, can’t you?
2014-01-22 19:10
@Peter Lee
friend, this forum is for sharing stock picks and also stock discussion. Some people say "if you don't agree, don't follow lah" but the point is if he REALLY wanted to share his experience, then he should consider indulging those people with negative points iro the stock and state his logic/reasoning instead of brushing people off. You can see they have done their research also and the issues raised may have merit. i think a lot of learning comes from inquiring and bringing up different points; As it is now, it is not so much about sharing experience but someone telling another person to just listen.
I'm not saying JTiasa will crash&burn but the size of the debt will have an effect on the profit/expansion plans of the company. same with the yield. If you REALLY want to share your knowledge, you should be able to discuss different concerns about the stock openly.
2014-01-23 00:24
I'm also not optimistic of Jayatiasa's prospects and don't particularly like their management. However i would find it useful if someone could present some facts and research about a particular counter. There should however be no room for personal attacks or childish name-calling.
2014-01-23 10:01
Uncle Koon, please give your opinion over Imenwee's comparison bewteen TSH, Bumitama, First Resources and JT. You are here to help us, save us.
2014-02-02 11:18
Dude,I doubt if Mr.koon will come back to u on this...as far as Mr.koon is concerned,jtiasa is always the best...until n unless he sold all of it n find a new darling stock....
2014-02-02 16:04
Peace don't fight......
http://www.themalaysianinsider.com/malaysia/article/muslims-reach-out-to-christians-with-oranges-flowers
2014-02-02 16:14
He has found another most undervalued stock? Therefore the huury of getting rid jt? My kindergarden guess.
2014-02-02 16:27
So far Mr.Koon's investment result are as below (ever since he made use of the social media):
1) Coastal (Year 2011) - Good
2) Xinquan (Year 2010/2011) - No Good, understand that Mr.Koon and the families still hold a sizeable shares as at today...
3) Rsawit (year 2011) - Good , provided you didn't buy his long term investment theory and sold as he quietly did when the price shoot up to RM1.00-Rm1.20
3) TWSPlant (Year 2013) - Good
4) JTiasa (Since year 2013) - not much changes
2014-02-02 16:49
The most undervalued share I know
---
the funniest and most arrogant title ever in i3investor..hahaha..ask him ..how could he made the title without 'thinking'...????? ahahaha senile i guess
2014-02-02 16:50
someone is talking about valuegrowth..yet after seeing profit just about 50 cents..he will run..and will not come back after that...his habit i think...so value growth for him is just like a 50 cents profit after hard promotions (see s for plural..so many blogs created man..hahahaha) ...haha a habit u cannot hide
2014-02-02 16:53
I hold on to the view that it is good to invest in FUTURE fundamental stocks that has very little price downside currently but is well supported by improving fundamentals as a consequence of past Investment actions taken that will result in increasing Revenue and increasing Earnings growth in the future years. GEM stocks may not be gems now but will surely transform into GEMS in the future years. That is the ART of Investment. I concur with Mr Koon's Investment view on JTiasa.
2014-02-02 17:01
optimus7 , your new blog's title should be the most outrperform transformer from optimus1 , to optimus2, to optimus7 then to optimus67....
2014-02-02 17:56
aku kesian i3 forum, sekejap ja saya hilang ini forum sudah ramai orang gaduh .. apa mau gaduh? kawan kawan lah .. you happy, saya pun happy mah.. sama sama cari makan loh
2014-02-03 00:48
my title should read as:
"The most promoted share I know with the most blogs ever" or
"The most undervalued share I know based on 10 to 15 years from now!!!"
...u heard me right...lol ..or
"The most desperate share that makes me so so so desperate to promote!!!"
or
"How to promote a share non-stop-24/7"
or
"How to conclude a share that has EPS=2.40cents,PE=83.34 and ROE=1.36% is the most undervalued share i ever know while i'm quite old now"
2014-02-03 00:51
M vince,a value investors who has been coincidentally advocating palm oil & picked kulim, TSH, SoP as a good buy since last 1decade.
Mr KOON has invited me to meet him on feb12 with other few ppl. I m coming frm KL after i return from hometown on feb11. U may reach me at
vinext@gmail.com, another guy plan2 drive frm KL, we r seeking car pool,stil hv 3more seats.Pls send ur hp,email, fb add/link, wat time,date, u plan to take off,wat time to return to kl
2014-02-09 02:38
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vinext
housefordos,not here,wil tell u when i meet u.Thegood part is it works even if when i m dead,meaning, it cal be automated,bad part is it cant be fully automated like DCA. Experienced? learning nvr stop,but i m quite sure more experienced than most rookies here,i can tell one's level fr his writing
2014-01-18 20:35