Palm Oil Price Trend - Koon Yew Yin

Koon Yew Yin

Publish date: Thu, 06 Mar 2014, 05:58 PM

The MPOB conference finished yesterday with 2 famous analysts giving talks on the palm outlook. They are Dorab Mistry and James Fry, both of whom were quite bullish on the price outlook. You can read the detail of their speeches if you click these links:

http://www.thestar.com.my/Business/Business-News/2014/03/06/Dry-spell-to-affect-CPO-Prices-could-hit-RM3000-per-tonne/

http://in.reuters.com/article/2014/03/05/palmoil-outlook-fry-idINL3N0M149C20140305

Dorab said that the price would maintain at 3000 and rise to 3500 at the end of the year if the dry weather continues, but then he's usually wrong so not sure how much people took heed.

Fry on the other hand said that price rises would be capped at 3000 because of competing oils.

In response to this the future market has not moved much yet, but the mood is very bullish. On the stock side, I guess this rise is because analysts no longer believe that the recent price rise is temporary, but instead may be here to stay for a year at least. A lot of people before thought that it was shooting up because of speculation that naturally would come back down, but I guess the speeches might have changed their mind.

Readers will recall that many senseless critics ridiculed me and accused me of promoting Jaya Tiasa when I told them I bought 4.5 million JT shares at Rm 2.04 on 31th Dec 2013, about 2 months ago. Since the start of 2014, JT has been climbing up much better than KLCI.

Of course, there are some clever and alert investors who could decide and took advantage of my writing. But there are also some doubting Thomases who cannot make up their mind until now when it closed at Rm 2. 66 up 13 sen today.

To buy or not to buy is the big question.

The price increase makes a lot of difference to all plantation companies because the additional profit does not require any additional effort. It is like getting extra money for doing nothing.

What the experts said in their speeches should help you to decide. I believe the palm oil price up trend is sustainable for the next one or two years. Almost all the plantation shares went up with high volumes today. The total volume traded today for Jaya Tiasa was 5.75 million shares which is unprecedented, I think.

When the price shoots up with very big volume, it means that there are a lot more buyers than sellers. They want to buy as soon as possible because they think that the price will go up tomorrow.

I am not asking you to buy Jaya Tisa or any other share. But if you decide to buy, you are doing it at your own risk.

Discussions

6 people like this. Showing 18 of 18 comments

Pak Lah

Thank you Uncle Koon. Every piece of advice you prescribed is priceless. I've cleared useless counters off my portfolio. I realised I made a lot of unforgivable mistakes by buying into stocks with speculative natures in the past (based on hot tips), thanks again for waking me up. I'm obliged to tell you Jaya Tiasa is now my major investment holding with 150k shares. I have also 25k Mudajaya and some Kulim. Ha!

2014-03-06 18:53

Titicamara

Please inform us when you are selling out.

2014-03-06 20:20

Soo Cheng

Dear Uncle Koon, I have been buying a number of Jaya Tiasa and Gamuda stocks the last few days after reading your blog and recommendation. Previously, I am just contented with putting my savings in managed funds. But due to your generosity in sharing, I decided to do a bit of investment myself. I was going to buy some more Jaya Tiasa stocks today but it went up today and I am not sure what to do. Should I buy more even if the prices have gone up? Thank you for sharing. I really appreciate it and also love to read your blog

2014-03-06 20:40

sense maker

Mr Koon has been in overdrive lately on forumming with others- thanks in part to JT's good gains in the past few days.

I would like to add that while it is important to invest in only companies that will see (vastly) increasing profits in coming years, the pertinent point is to assess how much of these future profits have been reflected in the share price. That inevitably leads us back to the basic way of calculating fair value of a company, i.e. discounted free cash flow to the equity shareholders. There is no short-cut in investing successfully.

Congrat everyone on JT's gains all the same!

2014-03-06 21:27

Vam Pire

Thx uncle koon. I've 600k JT shares at avg price 2.21 :) Since the profit >20% in just 2 months I am thinking to cash out 50% first. Pls advise if i should hold longer

2014-03-06 22:39

Alan Tan

good morning mr koon, I have 102 lot prolexus 8966 at average price 0.50, can I still hold it or not?

2014-03-07 07:27

speakup

Mr Koon has helped many here make money. Those who criticized him last time, now should take back their words.

2014-03-07 07:39

lepeng85

This uncle koon is really awesome in investing.

2014-03-07 07:39

Fung Chee Fui

Brilliant Mr Koon! I think it is not too late to join the ship if one -- especially those critical on Mr Koon -- admits their mistake now. I am sure Mr Koon is not looking at only RM3 or RM4, but way higher than that.

I think it is too early to celebrate now. Anyway congrats to Mr Koon and the riders. :)

2014-03-07 08:39

Jonathan Keung

agreed.whether to buy, hold or sale is our own decision. we cannot blame anyone.

2014-03-07 08:55

Pak Lah

Where on earth can you find noble persons like Mr. Koon? The answer is virtually zero. Yes, we may have joined Mr. Koon to purchase stocks he already owned this time. The most important lesson here is that success is contingent upon ones' willingness to change attitudes. And this success can be further enhanced or optimised if ones know how to master (ride on) financial tools like Margin Finance.

2014-03-07 09:00

lohman

Quote: 'I am not asking you to buy Jaya Tiasa or any other share. But if you decide to buy, you are doing it at your own risk.' Unquote.

2014-03-07 09:10

haikeyila

a wise man once told me - 'there is no place for pride in investing, or gambling'

2014-03-07 18:14

Joeylee

Palm oil has reached to the bottom.Now is rally up. However JT is not a good investment. Problem is she has a large piece of pie in SARAWAK.. Scalp and run...2.68 is good enough..

2014-03-07 18:42

Up_down

People won't care much where is the plantation area and debt now. What they really care is CPO price movement. If CPO price is heading north, all plantation counters would follow suite.

2014-03-07 18:48

5261098wls

Mr koon, well done

2014-03-07 22:23

Ricky Kiat

cheer for who already onboard , but still a long way to go.

2014-03-07 23:13

Koon Yew Yin

Many readers asked when should they sell? Many people who have bought Jaya Tiasa, Mudajaya or Kulim , must be careful not to sell too early. With the CPO price on a sustainable up trend, all plantation companies will continue to make increasingly more profit. Now you must read my article "Why clever investors make big money mistake" which I posted a few weeks ago.

2014-03-08 00:03

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