Koon Yew Yin's Blog
Warren Buffett’s 2013 annual letter - Koon Yew Yin
Koon Yew Yin
Publish date: Tue, 04 Mar 2014, 04:05 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
In all my articles on investment, I have been telling you to invest like a businessman. It is more important to be able to know how much profit the company can produce in the next few years than to worry about its current earning. You must know the difference between investing for the productivity of the asset versus investing on hopes that the share price of the asset changes.
Let us look at what Warren Buffett has to say to all his shareholders:
Warren Buffett’s 2013 annual letter to Berkshire Hathaway shareholders will be released shortly.
Buffett bulleted five fundamentals of investing, which we paraphrase:
“You don’t need to be an expert in order to achieve satisfactory investment returns.” But Buffett also warns that the investor should recognize her limitations and “keep things simple.
“Focus on the future productivity of the asset you are considering.” Buffett notes that no one can perfectly forecast the future profitability of an investment. “[O]mniscience isn’t necessary; you only need to understand the actions you undertake.”
“If you instead focus on the prospective price change of a contemplated purchase, you are speculating.” Buffett has nothing against price speculation. But he emphasizes that it’s important to be able to know the difference between investing for the productivity of the asset versus investing on hopes that the price of the asset changes.
“With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations. Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.” In other words, focus on the long-run.
“Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important.” So mute CNBC, Bloomberg TV, and Fox Business. Unless Warren Buffett comes on.
Buffett open this excerpt with this quote from his mentor Columbia University finance professor Ben Graham: “Investment is most intelligent when it is most businesslike.”
Read the whole except at Fortune.CNN.com
Valuegrowth Investing
I recommend you to read “Valuegrowth Investing” by Glen Arnold in which Professor Arnold has written about Warren Buffett, Ben Graham, Peter Lynch, David Dreman, Charles Munger and John Neff, like lecture notes. Instead of reading thousands of pages, you can read all about these investment gurus in one book of 334 pages.
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Discussions
13 people like this. Showing 39 of 39 comments
Uncle Koon, I’d like to thank you for providing me with invaluable lessons. I have benefitted tremendously from your articles. Thank you.
2014-03-04 17:45
WOH! After so much of ridicule from Optimus1, he finally is beginning to like me. As I said my intention is noble and altruistic. I just want to teach you how to make money from the stock market and also how to live a happy life. I believe I have some special knowledge which can benefit many people who care to learn.
As you know, I have written more than 10 article and read more than 1,000 commentaries since I started on this forum about 2 months ago. I have never worked so hard in my life. My wife says that it is unethical to tell people what shares you own. If they follow your advice and they lose money, they will blame you. At my age, I am not afraid as long as my intention is noble and I believe I can help people to make more money.
Optimus1, you make me happy, ha! ha! ha! and I am beginning to like you,
2014-03-04 18:41
wakakakakaka i saw optimus post just now i didn't dare to say anything as scare been sucked into a mud fight between optimus and uncle Koon.
ka ka ka ka this is one of the most funny moment i have ever encountered in i3 !!!!
2014-03-04 18:46
uncle koon, one of my old fren is your best buddy in investment.. from Ipoh. u know who la.
I m touched by your determination to educate stock investment to the public. at first I misunderstood u as another promotor. my apologies.
keep up the good works. uncle koon. no one in Malaysia who is so rich yet so noble in helping education. except u!
2014-03-04 18:51
i also seldom mocked uncle koon nowadays.
Instead of seeing him as a promoter, I see him as a harmless uncle that discovered i3 as a new toy to keep his time occupied. I am happy for him when sometime i can feel he is enjoying himself interacting with all of us in cyberworld over a topic he is so deeply interested in (stock market).
2014-03-04 19:00
I'm glad certain critics have opened their eyes and can see Mr Koon clearly for the person that he is. I have wealthy businessmen friends and only one other is somewhat like him, wanting to help others less fortunate to do better in life. Most are consumed by money, success and positions; impermanent things that you cannot take with you to the hereafter. I foresee we shall have a very fruitful and productive forum here.
2014-03-05 09:03
Mr Koon, just curious, if I may ask -- do you speak to the management of the companies as part of your stocks analysis? I am referring to understanding the long-term business direction and not insider information. Given your status, I think the CEOs would not want to reject you if you request for such meeting/ conversation.
This is a privilege that we -- the small potato -- don't get to enjoy.
2014-03-05 13:09
Uncle Koon, when the share prices are trending higher, ESOS are sometime given to the directors and staffs in a big sum. Upon subscriptions, they would normally sell their shares, making handsome gains in the process. We as investors would lose out as a result. What's your take on the ESOS?
2014-03-05 14:09
Where can I buy the book "ValueGrowth investing strategy of Glen Arnold" in Malaysia?
2014-03-05 23:01
Chunghiung, you really want me to tell you where to buy the book? When and where did you buy the last book?
2014-03-05 23:47
Uncle koon I have tried to get hold of the book since few months ago u mentioned it but unsuccessful. Nowadays I bought all my books from amazon. I check their website, they did have the book, but for some unknown reasons, they are not available for shipment to malaysian buyers (logistic related instead of censorship issue, of course)
So maybe this weekend I will pop in mid valley MPH to take a look
2014-03-06 07:41
The title of the book itself already fired my imagination.
"Value" and "growth" are two of the most critical ingredient for most investors here
That is why I am interested to get a copy
2014-03-06 07:46
When I open a book, it only takes me one minute to decide whether it makes sense or not. My favorite guru is actually Peter lynch. I almost agreed with everything he said and can relate to it immediately. Benjamin graham writing too textbook for me. Warren buffet made sense, but some how he is a bit too macro.
Petter lynch book is like applied mathematics while warren buffet book is mathematic
Graham is just don't know how to describe....
2014-03-06 07:53
Graham's book is the best writing ever. Graham gives me the idea of value, and John burr William provided me the tools to evaluate value.
2014-03-06 08:43
Ok let me promise myself I should take a second look at graham
Since so many people like him
I will come back with my opinion (in my blog)
2014-03-06 08:45
Icon8888, which graham's book you are referring to? Intelligent Investor or Security Analysis?
I personally would suggest to read Security Analysis.
2014-03-06 08:51
Warren book is like corporate finance, peter lynch is like applied corporate finance. Graham is mathematics, too dry.
I am that kind of person who cannot stand making decision based on formulars prescribed by others. I notice graham has certain definition for "margin of safety, etc" which is based on mathematic formulars, which turned me off. But as I said, I will take a second look. To be honest, I hardly finished one tenth of his book when I flipped it open many years ago
2014-03-06 08:52
Security Analysis is an intense reading whereas Intelligent Investor is just a summary.
2014-03-06 09:04
Anyhow, we can get almost any book from Kinokuniya online. "ValueGrowth investing strategy of Glen Arnold" cost around RM480 from Kinokuniya.
2014-03-06 09:07
I personally don't like Graham's book. If I followed the recommendations and read his book when I first started I would have given up long ago.
No, I started with reading 'the little book of value investing.' Simplicity is beautiful.
2014-03-06 09:30
tptan45 it seemed that i am not the only one finding it diffcult to digest graham. I think i share the same sentiment as you
2014-03-06 11:38
WOH!A big fund is now buying Jaya Tiasa very aggressively. Now they can see the future profit growth potential. It is now trading Rm 2.61
2014-03-06 12:22
Uncle Koon. Thank you for teaching us the correct ways to fish, i.e. buy undervalued stocks with tremendous growth potential. JTiasa has so far showed no sign of retreating. I've bought into Jtiasa which has today propelled to new height of 2.62. Thank you.
2014-03-06 12:27
Nobody wins an argument in stock market by winning a debate. The one who makes money from the stock automatically wins the argument
2014-03-06 12:30
Today's run up is not limited to JTiasa but is on all palm oil stocks. Present hot weather may adversely affect FFB production in Malaysia and Indonesia, putting upward pressure on prices.
2014-03-06 14:45
Mr. Koon, I usually buy books through website : got1shop.com. I am Sarawakian. Hope you can help me. Thank you.
2014-03-06 16:11
you can read online though some pages are omitted (Google books)
http://books.google.com.my/books?id=ciCnm2_8mPoC&pg=PT345&lpg=PT345&dq=The+Financial+Times+Guide+to+Value+Investing+PDF&source=bl&ots=KIyjJeRkVq&sig=1BjQiUzFw9rThB_0ZtUXcu0YQvw&hl=en&sa=X&ei=Fn4lU97bM8KjrQeZ04GoCw&redir_esc=y#v=onepage&q=The%20Financial%20Times%20Guide%20to%20Value%20Investing%20PDF&f=true
Purchase of the book is highly recommended :)
2014-03-16 20:16
Hi-mr koon,continue to provide yr sound advice and upkeep yr charity deeds,which will be appreciated and remembered!(greetings from ex mudajaya employee)
2014-03-19 16:27
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4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
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Agree, price are what u pay ,Value is what u get.
2014-03-04 17:12