Koon Yew Yin's Blog
My Share Selection Golden Rule - Koon Yew Yin
Koon Yew Yin
Publish date: Thu, 16 Apr 2015, 07:28 PM
Koon Yew Yin
0 1,453
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
As you know, there are many share selection criteria such as P/E ratio, NTA, return of equity, cash flow etc. All the professional fund managers and analysts are following these criteria. As a result, with due respect, most of them cannot beat the stock index. That is what the statistics show and it is not my imagination.
After more than 50 years of experience in share investment, I only have one golden rule in share selection. I must be 100% sure that the company must be able to make more profit in the current year than last year because when the company announces its annual profit, the share price will move up if the profit is better than that of last year and it will come down if the profit is reduced.
As you know all Malaysian public listed companies have to announce their quarterly results within 2 months of the end of their financial quarters. From their quarterly results, you can easily select the companies which are showing better profit growth prospect.
To illustrate this important stock selection rule, let me use Latitude Tree as an example. Please bear in mind that I am a substantial shareholder of Latitude Tree and I do not need you to buy it to help me get richer.
Unfortunately in this forum there are a few stupid readers who will make abusive and senseless comments for whatever I write. Fortunately most of the readers are sensible and smart people who often express their appreciation of my contribution.
Latitude has 3 factories in Johore, 3 factories in Vietnam and one factory in Thailand. The company employs more than 10,000 workers and 100% of its production is sold overseas in US$.
The company’s profit for last year ending June 2014, was 57 sen per share.
Its 1st quarter ending September 2014 its EPS was 17 sen and in the 2nd quarter ending December 2014 its EPS was 28 sen. The sudden jump in profit was partly due to our Ringgit weakness, lowest in 5 years in comparison with US$. The 1st half year EPS is 45 sen and I believe its 2nd half year EPS will be equal or better than the 1st half year in view of our continued Ringgit weakness and its continuous improvement of its products and management. What will be its EPS for the whole year?
I was invited to talk at KL Calgary Hall on 18th Dec last year and in my talk I used Latitude as an example to explain my investment method. I must take this opportunity to thank Mr Ooi Teik Bee who assisted me with his charts. I recommend Latitude when it was selling about Rm 3.50. Many attendees who bought Latitude wrote to thank me for my recommendation.
The price chart shows that it has gone up from Rm 1.00 to the current price of Rm 6.21 in the last 20 months. If you decide to buy Latitude, you are doing it at your own risk.
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Discussions
5 people like this. Showing 42 of 42 comments
BTW,this co is being selected by your fund manager,OTB...so your title should be my fund manager selection golden rule instead
2015-04-16 20:24
Better yet, find a company that is growing quarter to quarter non-stop. Like Inari or Zhulian. Too bad Zhulian's record was broken by the coup in Thailand. Inari's record is still going strong, and looks set for another record quarter with incoming capacity. Unfortunately, its difficult to find a company like that.
2015-04-16 20:27
100% agree with the golden rule in share selection of Mr Koon, that is one of the factor distinguishes successful investor from ordinary investor.
The pertinent question is that how to ensure good profit growth prospect? The biz world is naturally full of uncertainty, there is no such thing as certainty in profit, let alone profit growth. Therefore the ability of spotting company with good profit growth prospect relies on biz acumen which can be developed along biz engagement in the past of oneself.
2015-04-16 20:38
Ringgit is strengthening as we speak! I think export oriented stocks should be disposed off before the huge sell off! Switch to tech stocks and other 2nd liners!
2015-04-16 20:43
now only u said that....zzzzzz
read what optimusprime said 1 month ago. when everyone is pissing in their pants all predicting big bear. incl your goodself.
Blog: [duitKWSPkita] KLCI Index: The view of market opportunist?
Mar 27, 2015 08:02 PM | Report Abuse
predicting oil to sky rocket to 80 within a few months.
predicting ringgit to strengthen back to 3.50
predicting all export based stock to collapse in price.
predicting ci to test 1880 again this year
2015-04-16 21:37
fortunebullz I am trying to catch you exactly for this topic. Should I sell my export stocks now and buy oil gas stocks, etc ? What if it is a false alarm and oil melt again ? How ah ?
2015-04-16 21:40
Somebody! Once crude oil breach usd60, the oil theme will make a comeback! As for furniture stocks, it's already fully value, any extra returns are purely bonus!
2015-04-16 21:45
And yes! I know Mr. Nobody and Mr. Somebody is the same person! And later you whack me again! And just when i thought you already a bro! Haix!
2015-04-16 21:46
omg.
i swear i m not MrSomebody.
i think he is really asking for your advise, Fbullz.
rest assured i m not pulling your legs.
wakakakaa.
2015-04-16 21:48
Look! I am not interested to look for argument! Wave 3 is a period to make money and friends! You have plenty of time to make enemies once wave 5 has ended!
2015-04-16 21:51
Due respect to Mr Koon, i notice he has the fondness to recommend a stock that reach it's peak! So i am just doing some justice to newbies to avoid buying at the peak!
2015-04-16 21:53
100 Like
Posted by fortunebullz > Apr 16, 2015 09:53 PM | Report Abuse
Due respect to Mr Koon, i notice he has the fondness to recommend a stock that reach it's peak! So i am just doing some justice to newbies to avoid buying at the peak!
2015-04-16 21:54
fortunebullz thanks for your view. The reason I ask you is because u r the very few people who make prediction on the market. Right or wrong never mind, I just want to hear it
2015-04-16 22:17
I feel the same lah. Every time I thought MrNobody was a friend, he whacked me.... Sigh... never mind... Be patient...
fortunebullz And yes! I know Mr. Nobody and Mr. Somebody is the same person! And later you whack me again! And just when i thought you already a bro! Haix!
16/04/2015 21:46
2015-04-16 22:20
I also think that mr somebody and mr nobody are the same person, bec you appeared at the same time.
2015-04-16 23:06
Seems like most of you missed Mr Koon's message, which is his Golden Rule of Investing. It is difficult to lose money if you do your homework and apply the rule. Period.
2015-04-17 04:43
Thank you Mr Koon. Golden Rule is perfectly right. But who can spot it easily Is something need hard work. All best best.
2015-04-17 08:46
but mr koon never explain how he applied golden rules in his famous holland stocks recommendation.
1. jtiasa
2. mudajaya
3. xinguan
he just talk abt the rightly spotted one and conveniently ignore his major mistake?
2015-04-17 08:51
From my understanding, all fund managers role have been trying to predict EPS. That is the culture of Wall Street. Nothing against that, but i think trying to predict EPS is futile if you are a long term investor.
Rather learn about what are the competitive advantage of the business, is it sustainable, how's the management, reinvestment dynamics etc
2015-04-17 10:11
EPS is not the ONLY criteria to consider. There are many others. Although Mr Koon use Lattitude Tree as an example and also during the time of weaken ringgit. What if ringgit is stronger....is Lattitude Tree still a good buy? If ringgit is stronger, does that means all companies doing export is not a good buy? Ponder this.
2015-04-17 10:39
MrNobody, a lot of people are like that, they only pick those favourable to be used a example.
2015-04-17 16:37
dear mr. koon please buy GLOTEC, PWORTH, TMS and DSONIC.. sure old become young, and hot chick! kikikiki ... even Mark Zuckerberg also you can beat him become billionaire.. kikikiki
2015-04-17 16:40
"The sudden jump in profit was partly due to our Ringgit weakness, lowest in 5 years in comparison with US$."
A big portion of the profit is due to the forex gain and is unlikely to be sustainable.Buyers will ask for discounts or they will go elsewhere unless the furniture that they produce is a "must have".
2015-04-17 16:52
Yes. Buy GLOTEC, PWORTH, TMS and DSONIC. Please bear in mind that I am a substantial shareholder of GLOTEC, PWORTH, TMS and DSONIC and I do not need you to buy them to help me get richer. Thank you!
2015-04-17 16:54
very enlightening answer
Posted by show > Apr 17, 2015 04:37 PM | Report Abuse
MrNobody, a lot of people are like that, they only pick those favourable to be used a example.
2015-04-18 00:03
malaysian. why u so chanyen one? this freedom of speech ma.
let him write whatever he want, we can question him.
we cannot stop him to write.
2015-04-18 00:26
hello MrNobody , u r right -freedom of speech....i am trying to be kind to him .to remind him,hey Mr Koon , have fun with your cucu ,spend time w cucu..yayy ....
2015-04-18 00:33
The share selection method of "company making profit more than last year" was very brief and general.
2015-04-18 01:19
Gold as a metal is soft, malleable and easily worked by an expert craftsman into objects of their design. So too is Mr Koon's share selection golden rule. Witness his past stock selection of RSawit, JTiasa, Mudajaya among others, where his so called golden rule melted down within months of his "super profit is coming proclamation" for the stock. Yes, his own golden rule is meant to be observed by many of you, the suckers, but to be broken time and again by him, the trickster in the stocks that he promotes. He is a complicated character, with due respect to his venerable 82 years, but his intentions are surely not noble as he claims. There are just too many gaps and contradictions to his claims.
In mid-2014, he infamously predicted rising palm oil prices and declared a bull market in palm oil stocks and particularly, in undervalued JTiasa. Many knowledgeable readers disagreed. He vehemently protested his noble intentions. To cut a long story short, within months he had dumped his 40 odd million shares in JTiasa into the open market. JTiasa is now down RM 1 from the time he sold from RM2.70. Similar sad story with his 10 plus million shares in Mudajaya. His RSawit too. You buy, you die. All this is recorded history.
Now coming to Latitude. On 18 Dec 2014 when he talked at Calgary Hall, he already held over 5 million Latitude assiduously collected over 2014 at average RM3-4 thereabouts. Latitude over RM6 is thinly traded, daily volumes in 2015 have never exceeded a few hundred thousand. He cannot take profit without severely impacting the share price. That's why he needs investors to buy. Never mind his heavy protestations of innocence and ultimate philanthropy, just analyse his actions and decide yourself what the man is. Ask him when he first started buying Latitude and what his average price is. Why did'nt he promote the stock then? Why now at RM6?
2015-04-18 11:00
uncle koon, i bet u to buy ifcamsc now, next year profit for sure will be better this year under gst regime.
2015-04-18 18:17
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2015-04-16 20:19