Exactly, Icon has answered one of the qualitative questions which kcchongz and sslee never points out.

No one will be willing to buy inari 20% block at this price. The will be a huge discount asked for sure to the future growth earnings of broadcom, Apple and indirectly Inari.

Only kids think if you sell one can of coke you get rm1, so if you sell a crate of coke you will get the same price as well.

Real world economics and story land rarely work so easy.

Probably why people who can't do, they teach and talk theory.

While those who can't teach theory, they sell online pdf documents.

Investing is rarely straightforward.

How much is your returns from this investment concept raider? Your are line a college teacher talking daily about efficient market theory and teaching graduate students.

But your real life results do not jive with your margin of safety concept.

Arguing for arguing sake. How much money did you make practising this concept in your stockpicking?

Did you buy more hengyuan at rm18, rm15,rm10,rm8 when your opinion of "margin of safety" of hengyuan at pe10, pe15 was rm35-rm50.

Did you enjoy your returns then?

Go fly kite la Coolio.....

Always talk bad about others, can't take others opinion, but no business opinion of your own. What a loser.



........


See how easy it is to just troll? Especially when you can't add anything of substance?

Especially kyy followers who dumb dumb buy because he bought dayang, and not enough capability to understand why a stock goes up or down.

The has never been a kyy stock that has not crashed in the long term. You would be wise to know that.

But dumb dumb hold la. Good for you.

Let's guide you through this SSLEE.

1. What is the revenue and earnings of melium group? What are their margins? How much dead stock?
2. What is the total market size of the retail industry?
3. What is the market percentage of melium group in their space?
4. Who is the top 3 competitors in this space? What are their 10 year revenue and earnings growth? What is the comparison versus melium?
5. What are the locations convered by melium group? What is the current performance and growth prospects and rate of new store openings?
6. What is the growth projections of management versus the real percentage growth of the business?
7. Is melium growing market share, stagnant or shrinking?
8. What is the intrinsic value of melium group versus started accounting value? What is the real value after deducting unrecoverable and unsellable assets?

That is how I practise qualitative analysis. What may appear to be a good deal in the accounting books may be very different when looked at under a deeper microscope.

Seriously, I hope you do well sslee( and raider). In your investments and your retirement nest egg. I hold no intent of harm on your stock, but my conclusions after applying those 8 questions to every business arm of INSAS ( and inari) leaves me with lack of confidence of the long term prospects of INSAS.

But who knows, if you can convince me qualitatively on the future prospects in INSAS ( and not what I can see today), I am here with all my money's ready to invest in INSAS.

What is the 10 year projections and past 10 year performance of melium?

>>>>>>

In 1997, the Melium Group underwent a capital restructuring exercise which enabled Insas to invest in the Melium Group and became its 51% holding company. The capital injection and investment in the Melium Group is in line with Insas’s focus to venture into the retail business and allowed the Melium Group to take advantage of the growing retail opportunities in the country. By combining the existing shareholders’s resources with Insas’ in the new business partnership, the Melium Group was able to position itself as Malaysia’s leading fashion and lifestyle retailing group. The Insas Group currently holds 43% interest in the Melium Group.

Is a business that gives out free car rentals and charges 2 sgd/hour really going to be profitable and beat grab?

My mental model has always been to find a business model where

A. Pay me, then I will build it.

Rather than

B. If I build it, will you pay me?

Any business that is not profitable is not a business. It is a donation. If there is an incubation period for the business, it better be something disruptive.


https://vulcanpost.com/667850/tribecar-rental-bto-carpark/

Insas paid up capital to start the business was 10,000 usd. How much it burned from 2005 to 2018 for a business in Mongolia I cannot for the life of me understand what purpose it had.

RED FLAG.

>>>>>>>>>>>>>

The Board of Directors of Insas Berhad (“Insas”) wishes to announce that its wholly-owned subsidiary, Insas
Technology Berhad had on 25 July 2018 disposed of 12,000 shares representing its entire shareholding in a
wholly-owned subsidiary, Vigcashlimited LLC (“Vigcash”), to Mr Sanj Natsagdorj for a consideration of
USD1,500 (“Disposal”). Arising from the Disposal, Vigcash ceased to be an indirect subsidiary of Insas.
Vigcash was incorporated in Mongolia on 7 December 2005 and its issued and paid-up share capital is
USD10,000, and its present net assets/shareholders' fund is USD31. The company is presently dormant.
The Disposal does not have any effect on the earnings, net assets or share capital of Insas and is not subject
to the approval of the shareholders of Insas and any regulatory authorities.
This announcement is dated 27 July 2018.

It is exactly this kind of thinking that raider cannot become a good investor. What is the point of winning arguments when investing. The only thing that matters is how your investment performs over time.

It is a known an obvious fact that from 2017 when sslee invested in INSAS his share price has dropped, and he has averaged down, meaning he is fully invested in INSAS and there will be a bias to protect his investment at all costs, similar to mexicans who protect Herbalife having bought huge stocks unable to sell at a profit. Same with those who are stuck in swisscash unable to see the gold bars or the promised profits.

SSLEE efforts to bring down QL doesn't matter in the long run, he doesn't own any ql shares and probably never will. Fact is, from 2017-2019, my shares have doubled in value and still keep their value quite well, paying me dividends while waiting the visible growth of family mart, Palm oil plantations and other business endeavours.

Fact is I have put a very important fact in INSAS inability to grow its business organically. If you can name a clear dollar figure and earnings note from management on where their future revenue and earnings growth will be coming from they themselves do not know. Tribecar 10x revenue, what is the earnings? ( None), expected just like grab cash burner. What is the revenue and earnings of numoni? What is the earnings and revenue of sengenics? All these are nice sounding "businesses" that have no profits and little earnings.

The simple true fact is INSAS is trading below liquidation price because it is unable to show a clear consistent growth in revenue and earnings.

And the simple true fact is INSAS will CONTINUE to trade below liquidation price until it is able to show a clear consistent growth in revenue and earnings, or the ability give retained earnings back to investors either via dividends or buybacks( the only way minority shareholders can enjoy REAL returns from stockholding).

I hope your stockholdings do well, I really do. I have no need to "win" any argument and merely seek to explain what I see and help future investors who use this forum to see how I approach economic problems.

In the end, stockpicking is about solving economic problems. If you do not know how the business will perform 5 years from now with a clear mind, please just stay away from the stock, there is no difference to gambling a hand of baccarat.

Let's start again.

What business arm of INSAS do you see doing well in 5 years?

Why do you think so?

What is your estimate total market size of the business arm? How much of the market pie does it control? How much investment dollars is needed to grow the business versus it's own retained earnings?

What is your prediction of the revenue and earnings estimate 5 years from now for the business arm?

Who are it's competitors? What are it's market share? Are they losing or gaining versus INSAS business arm? What should insas do? Is it doing it right now?

This is qualitative analysis.

>>>>>>>>>>>>

stockraider Correctloh...Philip is the type of loose cannon. sohai type of investors, he will slander anything at all cost, just to win a simple arguement loh.....!!

Gutter politics?

What is this, kindergarten?

If you want to invest in insas do it at your own leisure, no need to write long winded article to convince ppl.

If people put their own honest comment after you asked for a reply, accept it in good faith.

I have no issue with INSAS.

I just choose to call a spade a spade and not invest in it.

You have a long investment journey to go. Appreciatr every second

The answer is yes, I was approved margin 5m, and bought 500k shares of pchem at 7.61. but I don't think that is the reason. Reason is pchem too cheap to ignore, I brought down my average cost which is a very good


>>>>>>>>>

titus i think today up because Philip's margin facilities got approved.....hehe....
19/07/2019 1:21 PM

So how about ALL of your recent picks, sape up half cent every day, all talk bullshit. Past performance of you don't say anything no worries, yinson up from 4 billion to 7 billion any comment???

What's your pick my young friend?

Oh I forgot you have ZERO portfolio, but you talk the most.


>>>>>>>>>

Posted by stockraider > Jul 19, 2019 10:49 AM | Report Abuse

Your recent actual pick on gkent , pchem and QL not inspiring at all mah...!!

Tell Grandmother story how good is ur past performance, cannot be verify loh....!!

For that you just need to look at YINSON performance. 4 billion company to 8 billion company easily.

For my QL returns( 1 billion dollar company to 11 billion dollar company in 10 years), this year I have received far more dividends than my initial investment in 2009. As the growth story had not ended yet (thus confidence to hold at 50 pe), I don't find any reason to jump in and out of stocks, as I look to the business, not the change in share price. If the business is doing good, I will receive share price increase and dividends increase naturally.

For me safety of capital is also a huge huge requirement. Even in volatile bursa my shares in ql has never had a big drop that made me unable to sleep at night.

Also kc Chong math is inaccurate on INSAS performance. As someone who also does not have a crystal ball and unable to know exactly when to buy a stock, all I can do is try to understand the business and add more every quarter. As this is a more natural progression of investors ( rather than the guy who can buy and forget for 10 years), my record of INSAS would then become far less exemplary ( for the period of 17 July 2009 to 17 July 2019). In other words, lumpy.

If you could not predict the trading profits from IPO and m&a in 2013, how could you have know how the business will perform 10 years from now?

Answer: do you think a company with new management (Wong gian kui) and whose stellar investments are in startups like tribecar, numoni, dome and sengenics, will they be able grow the business in the future?

Thank you


>>>>>>>>>

P/S: Please tell Philip will he expect QL to give him 100% return within a year. Only qqq3 claims to achieve so by hoodwinked greater fool buying into his story and buy the share from his hand.
18/07/2019 1:10 PM

Pchem crash? How many percent down? It's a discount day nothing else.

PIC is still intact, and the "crash" is not backed by any announced results only analysts opinions ( like you).

Company fundamentals is still intact.

You are probably too young to understand the difference between temporary volatility and a permanent deterioration of business fundamentals.

Thank God for idiots like you, otherwise how to make money?

Your way of thinking is still very immature. If it were that simple you can buy any of the above "undervalue" share and keep the billions of unrealised value.

The answer to that is the same reason why you would rather buy shares in ICAP fund than the ICAP business itself.

If you hold inari shares you get the dividends directly.

If you hold INSAS shares, you get the possibility of getting inari dividends, and no collective right.

If INSAS management decided to waste that money by giving it to a Mongolian company to start a vigsys business and burn/piss/waste all of the dividend money from inari, there is nothing you can do about it.

REMEMBER, YOU ARE A MINORITY SHAREHOLDER.

EVEN IF YOU DO NOT AFTER WITH THE BUSINESS DECISIONS OF INSAS MANAGEMENT, THERE IS ZERO CHANGES YOU CAN DO TO THEM.

THAT IS WHY INSAS IS VALUED AT 80 CENTS.

Not for whatever reasons you highlighted.

In same vein

If you were put money into ICAP, you would get zero returns, unless tan teng boo decided to do share buybacks or declare dividends.

Your logic is not flawed, but it is incomplete.

YOU REFUSE TO SEE THE FULL PICTURE, BUT ONLY WHAT YOU CHOOSE TO BELIEVE.




>>>>>>>

Am I right to say, I need to sell 2 Insas shares (2x 80 sen) to buy 1 Inari (RM 1.60). I just prefer to hold 2 insas share thus indirectly owned 1.8 Inari share, all the cash and cash equivalent and all the other Insas business rather than holding directly 1 Inari share?

How I value INSAS? At 80 cents I am still not buying a single share of INSAS. Meaning I value INSAS far below your NTA of 1.7 billion.

Why? I can never fire current management 33% ownership who make stupid decisions after 1 good decision in inari to put money into sengenics, vigcash, hohup, omesti, dgsb, fintec etc ( things which not even sslee will buy).

I can never get a ever growing dividend from INSAS ( where is growing earnings and profits future coming from? After you kill golden goose inari from 40% to 20% to 0% transfer out cash into cash burning business line sengenics and vigcash and numoni and tribecar( JV with frauds to transfer money out from public to private hands), where will you get future revenue and earnings? No clarity on future earnings and profit meaning no future growth prospects.

At what stage will I buy INSAS?

1. After change of new management, trigger MIGO to show financial capability, then start selling non performing business units like melium, sengenics and numoni.

2. Use earnings and dividends to grow m&a business, revamp website and operational software, increase team to grow investing and IPO arm.

3. Stop investing in startups and instead target on taking over cash generating profitable business run by well run management seeking a good home for their business.

4. Reduce their revenues and profits from one off sources and increase revenues and earnings from consistent cash flow sources with a huge moat

Examples of value traps for investors who only use NTA as a single metric to buy a stock instead of understanding the business and its competitive advantage:

Company name share value / net worth
1. Parkson Holdings 279 million / 2,113 million
2. AsianPac holdings 140 million / 1,501 million
3. Protasco Bhd 136 million / 334 million
4. Talam Transform 172 million / 380 million
5. Nami holdings 462 million / 1,250 million
6. Sapura Energy 4,893 million / 13,865 million
7. Bumi Armada 1,352 million / 3,346 million
8. INSAS Bhd 551 million / 1,717 million

The first thing to notice is that
a) I spent 5 minutes on the internet to find some very good deals. All seem very undervalued, by simple metrics.
b) The second question you ask your self is all the NTA the same thing? Each business is subtly different, and its assets are classified differently (which surprisingly is valued by the company and friendly valuers, and audited robustly). IT is not an exact science, and judgement call needs to be made by the prospective investor on the INTRINSIC VALUE OF THE ASSET.
c) In case of any incongruity of the intrinsic value, one must rely on cash flow generation and estimation in the years to come instead of relying merely on the accounting numbers of the "net assets", as evidenced from item 6 and item 7, where the value of the assets are valued at 13bilion and 3 billion, however they can't find anybody to buy their assets. If that is the case, what is the REAL INTRINSIC VALUE?
d) For INSAS, if stated value if 551 million, and the gap is 1.7 billion, and this "temporary difference in INTRINSIC VALUE" has been going on for a very long time, one must make a good judgment call and understand the difference between a value trap and undervalued stock to see if the price will rise to meet the difference in the future.
e) Only one true way has been shown to work: a company that uses the minimum amount of debt and produces a good amount of cash flow and earnings will have their share price guaranteed to increase. Not via stated value of the assets (versus real world demand for those assets). This way has been shown to work for a very long time, and why asianpac cannot be valued (in fact ALL property developers) at NTA alone.

Hope you learned something.

>>>>>

What is a Value Trap
A value trap is a stock that appears to be cheap because the stock has been trading at low valuation metrics such as multiples of earnings, cash flow or book value for an extended time period. Such a stock attracts investors who are looking for a bargain because they seem inexpensive relative to historical valuation multiples of the stock or relative to the prevailing overall market multiple. The trap springs when investors buy into the company at low prices and the stock continues to languish or drop further.


BREAKING DOWN Value Trap
Successful in prior years with rising profits and a healthy share price, a company can fall into a situation where it is unable to generate revenue and profit growth due to shifts in competitive dynamics, lack of new products or services, rising production and operating costs, or ineffective management. For the investor who is used to seeing a certain valuation of the stock, a seemingly "cheap" price becomes interesting. However, it becomes a value trap to the investor if no material improvements are made in the company's competitive stance, its ability to innovate, its ability to contain costs, and management by the executives.

As with any investment decision, thorough research and evaluation is recommended before investing in any company that appears cheap on the basis of conventional valuation metrics.

I have been averaging down by a huge amount so far, in the long run all I can say is PCHEM business will be OK. if it goes down to RM6 I will be getting 5% returns on dividends, 32 cents and growing dividends.

Just enjoy the discount day while it lasts. Chase now and not when the share price climbs to RM10

>>>>>>>>>

lazycat this stupid pc ham zzz i bought 3 times , cut loss 3 times this year , luckily i don't play hero and keep avrg down
18/07/2019 9:58 AM

Yup, exciting isn't it. Discount day. Am currently discussing for margin facility on PCHEM to purchase even more. Most likely will go on margin and purchase a huge block.


>>>>>>>>>>

Posted by KNM Sailang Margin All In > Jul 18, 2019 10:28 AM | Report Abuse

philip lost just a few millions

I have been holding yinson since 2012 and keeping until today. I know the business inside out. I know how much their revenues are growing, how much their interest payments are and exactly how much debt they have..

Remind me again how much armada you hold and when you bought it? You suddenly become expert after buying the stock these last few weeks?

Small kids trying to act as if professional investors but are actually driving myvi and making fun of other investors.

When you get a few more years of investing under your belt then you can b say other people so hai ok?

My yinson go from rm1.15 and buy more are rights issue until today is worth 7.15. you know nothing a be presume to know everything.

Malu la office despatch boy.

I realized that stockraider really doesn't know how to value stocks, that is probably why he values hengyuan at RM35 before it crashed so spectacularly.

The important figures are the same in real life just as in a balance sheet.

What matters is how much revenue and profits you generate versus how much loan interest and the principal amount you need to pay back (or reloan) to continue as an ongoing business.

It doesn't matter how much you owe, first you need to know when you need to pay back the principal amount, then you need to know how much you need to cover the interest payments every year.

The reason why armada is worth 1 billion and yinson 7 billion:

SHORT TERM DEBT. OR HOW MUCH THE BARBARIANS AT THE GATE WANT, AND HOW EASY IT IS TO GET A EXTENSION ON THE LOAN.

Armada had a reprieve when the loan was extended to october 2019, but... IT IS STILL SHORT TERM LOAN. IF THEY DO NOT PERFORM, THEY WILL EXPLODE.

The other main reason,

INTEREST LOAN COVERAGE, or how much is their revenue generation to service existing debt (the reverse of cash flow in, this is cash flow out).

If got gangsters everyday calling you chasing for money, it is very hard to concentrate on making money and doing proper business. On the other hand, if investors are clamouring to give you money that doesnt need to be returned, you can go quite a long time before needing to worry.

DO NOT COMPARE HYFLUX AND YINSON, HYFLUX HAD PROBLEMS WITH ENERGY GENERATION AND PRODUCTION COSTS (SAME LIKE KRAKEN) WHICH RUINED CASH FLOW AND MADE IT NEGATIVE.

YINSON STICKS TO SIMPLE THINGS THAT THEY ARE GOOD AT.

LIKE OIL FERRY AND BUS BUSINESS. VERY CONSISTENT CASH FLOW, VERY CLEAR RETURNS ON EQUITY.

too bad stockraider only sees the trees and miss the forest.

maybe he should sell his myvi and walk around instead? servicing debt can be very hard for an office boy.

if cannot pay for the car, dont gamble with stocks, my sad friend.

Bought a huge block of pchem at 7.91

In the short term it is a beauty contest.

In the long term it is a weighing machine.

Do not be confused. If Armada is good it will perform, if not good share price up and down in the short term won't make a difference.



>>>>>>>>
Posted by pang72 > Jul 16, 2019 7:34 PM | Report Abuse

Why Armada rise from 15c to 25c if no good....?
So, what is good then?

I am confused!

What is the purpose of this?

>>>>>>

stingray_ea(
100% Candlestick,simple,fast,high accuratecy
No Trendline, UpDown,Z,M,N,W Reverse lines, U,F,O turns.
No Indicator
No News
No FA / TA
Go deep into operator mind and read their steps
Go deep into retailer mind and read their steps after operator actions
)

“There will be an initial judgement [on the claim] in the fourth quarter of 2019. Then there will be a period for appeals, as we understand the legal process,” said Christenson, hinting of a longer timeline before Bumi Armada can receive the compensation even if it wins in court.

>>>>>>>>>>

Confident, aren't we?

For a better understanding of the business fundamentals of YINSON.

https://www.insage.com.my/ir/cmn/loadpdf.aspx?sCompanyCode=YINSON&sFileName=19191000032582

Technically.... A loan that I do not have to pay in my lifetime or my children's children's lifetime is not considered a loan, in my lifetime of I do not need to pay back any principal amount of the loan, I consider it equity.

Why you keep fighting this fact?

Accounting rules already accept this as equity.

Banks and INSTITUTIONS consider this equity.

You are the only idiot who keep fighting this fact.

Never mind la let little kids win.

OK YOU WON, PERPETUAL BOND IS DEBT AND A LOAN. HAPPY? NOW WHAT? GOT MONEY TO EARN?

meanwhile my share price has increased from 4 billion to 7.6 billion.

Still want to fight?

>>>>>>>>>>>>>>

tockraider TECHNICALLY PERPETUAL LOAN IS LOAN AND NOT EQUITY LOH...!!

I'm sure the office boy who drives a myvi is very capable. Please do hold your INSAS for as long as you like while yinson becomes a 8 BILLION DOLLAR COMPANY.

Good luck with your investment and your concert of debt, while others are maximizing their returns over a long long long long term debt. So long in fact that accounting rules treat it as equity.

But yeah, hope you make small money and live a happy life.



>>>>>>>>>

Posted by stockraider > Jul 14, 2019 10:49 AM | Report Abuse

Don be sochai, let face reality mah....!!

Ask yourself honestly Perpetual bond is a debt loan or not mah ?
Yes it is a long term loan and legally it is a debt.
A debt always ranked ahead of equity in the pecking order in terms of repayment loh...!!

Forget about accounting rules, it serve a commercial purpose, as it is trying to encourage hybrid financial products, not understand by simple layman like Philip loh...!!

In Calvin tan defence kps released 2 dividends, a special dividend of 32.6 cents due to the splash sale and 4.25 cents final year dividend. However the share price crash to 99.5 cents from rm1.65 shows a huge -ve 30 cents drop post dividend. So much for Calvin tan predictions.

Updated my holdings in PCHEM.

It would be rare.... If they have announced share dilution earlier.

Nothing happens without a reason.

The Company has proposes to undertake the following corporate proposals:
a) a proposed bonus issue of up to 16,432,082 new ordinary shares to be credited as
fully paid-up together with up to 49,296,248 free detachable warrants, on the basis of
1 bonus share together with 3 warrants for every 5 existing ordinary shares held on an
entitlement date to be determined and announced later.
b) a proposed establishment of a long-term incentive plan of up to 15% of the total
number of issued shares of the Company (excluding treasury shares, if any) for
eligible directors and employees of the Company and its subsidiaries during the tenure
of the proposed long-term incentive plan following the termination of the previous
Employees Share Option Scheme.

Accounting rules say you are wrong. Understand the business first itself then look to the debt.

If you understand this better you will understand why foreign investors and major institutions have been buying yinson from 4.09 to 7.20 today.

And you will probably understand better what they don't touch Armada.

Already written, haven't published. Will do it this week

Poor Herbert. Kyy is bringing down his favorite stock.

It's ok. Let stockraider compare, he seems to think that he can influence institutions and large investors with his thinking. To bad I'm still holding and will not touch a single share of armada.

Here is the difference between qualitative and quantitative analysis.

If you have a bank loan where you have to pay back the principal in 999 years, is this considered borrowings or equity?

When you have short term debt, long term debt and 999 years debt you need to call a spade a spade. Yinson is excellent in their financial raising capability.

>>>>>>>>>
I invite you to read first before commenting the SC document on the property bond raised in SGX and BURSA.

No such thing loh....all loans got a callable element or clause in the agreement whether short or long term or even perpetual loh...!!

Wrong. They will raise perpetual bonds with maturity tenure of 999 years. No dilution of SHAREHOLDINGS and no default risk from payment if matured bonds unlike armada and sapura.


>>>>>>>>>

The new FPSO will result in YINSON borrowing even exceeding Armada on an absolute basis, that means Yinson gearing will be very high loh...!!

Please check your details, yinson is the only tenderer left for 3 FPSO jobs where the total order book will be huge, Brazil Marlim 1 they are the only reference left, 709k usd day rate 25 year contract, whale park sgp was disqualified so only yinson left 22 year contract 650k, Ghana contact 15 years 650k contract they are 2 left but only one tenderer gas job experience in Ghana ( yinson). I leave you to calculate order book and why valuation for YINSON now at rm10.



>>>>>>>>>
Yinson mkt Cap Rm 7.2b order books Rm 4b loh.......!!

Einstein says we must make every effort to make something as easy as possible, but not simple.

In this case, this is the easiest way I can explain my selection of YINSON, QL and TOPGLOV through the years.

Easy, but not simple.

If following PE alone works, it would be simple.

If following NTA alone works, it would be simple.

If following golden rule growing earnings alone works, it would be simple.

But if it was simple, how come kyy lose money? Calvin tan lose money? Icon8888 lose money? Qqq3 lose money? Philip lose money?

The answer is: investing is not simple.

Sslee,

If you look beyond( pardon my pun) past financials and try to understand the long term economics of the business, you may have a better understanding of it.

https://youtu.be/4R-xu9OmrQM

Or you can let Dr. Oz tell you all about it.

https://youtu.be/PqVBInU0A8s

This is something that I saw before in understanding the economies of plant based meat.

A very strong metric, plant based food grew by 24% yoy, while the meat industry grew by 2%.

In the long run the 10 years future economics will favor plant based meat.

Mental Models I use:

Lowest cost differentiator.
( It takes 308 gallons of water to process 1 lb of beef. Not to mention feed and killing, skinning and processing). Plant based food will win in the end, if everything else stays the same ( price, flavor, demand)

1st mover advantage.
Only impossible foods and beyond meat are going the extra mile to make plants cook and taste like near ( blood is from beet juice). With enough demand and r&d, they will have an unedible unassailable lead in the plant based food future.

Supply versus demand.
Similar to how chicken is popular in Malaysia because it is the only meat that Indians and Muslims have no issue with, vegans and health organic people ( getting more every day) will be provided with an alternative option when previously there was none. Before vegetables burgers were dry and not tasty. But the new burgers from beyond meat had the same amount of fat as a real beef Patty. Oven carnivores are buying beyond meat.

Economies of scale.
Currently I believe the losses are due to r&d, marketing and growing costs. But once they achieve a tipping point, it is a business model where industrialization and ramp up of production is far easier to process than growing beef. As long as revenues grow, the profits will definitely come.

I'm not familiar with beyond meat, but let me put into play another similar business that is losing money, but if now valued at 170 billion.

Waymo.

The King of self driving technology is a loss making company for the last 13 years since 2006. Google has plowed more than 5 billion USD into the company that has never made a profit for 13 years. The revenues are growing exponentially while there is no profits.

However, here are qualitative facts.

Waymo had bought 62,500 minivans from GM. It is all driverless in California ( best testing ground flat land, easy climate). Their driverless tech has beaten every single other company from Apple to Uber to facebook in total by a huge factor. It has driven more miles safely than all of them combined.

Now it is set to make huge profits, as their LIDAR technology is so far ahead of everyone else it is like introducing the Apple iPhone into a world of Nokia flip phones.

They are finally selling their finished tech to end users and partners. Costco is using their LIDAR sensors to do robotic self fulfillment of shelves and storage. The California county is purchasing the tech for use in their garbage disposal truck and bin removal. John deere is using their tech for the crop detection, collection farm equipment. Not to mention the future of driverless taxis and lorries.

The mental model you need to understand is MARKET DISRUPTION and TOTAL ADDRESSIBLE MARKET.

If you went back 150 years ago and you told them we could call someone in Europe from Asia with no delay they would call you nuts. If you showed them a smartphone, they would fall down on their knees and worship you.

For beyond meat, the qualitative analysis is amazing.

3 questions that for thousands of years have been inescapable:

1. How does vegetables taste, smell and sounds and feel like meat? All are organic carbon based lifeform.
2. What is the cost of this vegetable "meat" vs real meat?
3. What are the future economics of beef vs vegetables?

Once you realized that meat technology is as efficient as it will ever be, you will realize that the only possible disruptor is for making vegetables taste, feel,look and smell like meat.

If you could buy a burger at half the price of real meat at nearly the same flavor? The market is endless.

The contention is the word "nearly". I've seen the beyond meat commercials, but have yet to try. My daughter in California has tried it and she says it tastes amazing. It even has blood and crackle when you cook it. Juice dripping from the meat.

I believe if the revenue has increase that much they must be doing something good.

If profit is still not there, they need time to master to recipe.

How long before Facebook, Amazon, Google and Netflix turned a good profit?

Anyway, I'll tell you more once I get a taste.



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Posted by Sslee > Jul 12, 2019 9:06 PM | Report Abuse

Dear Philip,
https://investors.beyondmeat.com/news-releases/news-release-details/be...
• Net revenues were $40.2 million, an increase of 215%;
• Net loss was $6.6 million, or a loss of $0.95 per common share, compared to net loss of $5.7 million, or a loss of $0.98 per common share in the year-ago period; Pro forma basic and diluted net loss per common share, which is a non-GAAP financial measure, was $0.14 per common share in the first quarter of 2019 compared to $0.13 per common share in the year-ago period; and
• Adjusted EBITDA, which is a non-GAAP financial measure, was a loss of $2.1 million compared to a loss of $4.3 million in the year-ago period

Tell me base on all your different mental models of human behavior what are at play in valuation of Beyond Meat?

Thank you

I believe when the opportunity and cash presents itself ( when future value of 1.5 billion is worth 1.2 billion in tomorrow's inflated money), yinson can easily retire debt at far lower interest rates 2% over 5 years.

https://www.thestar.com.my/business/business-news/2019/07/04/cgs-cimb-research-upgrades-yinson-back-to-add-from-hold/

In the meanwhile, yinson needs cash to win projects and grow their business. With 3 FPSO technically won worth 709k usd day rate for a charter of 25 years for marlim 1, 650k usd day rate for whale park 22 years and Ghana 15 years, the projections are very easy to calculate and firm contracts with penalties on both side for noon conformance.

Repayment is definitely not an issue.

Technical performance of their international Norway team is also very good.

I can pretty much guarantee a good economic future for YINSON as all these deals are done when the pool prices are low. When o& g industry recovers, and the pe multiples return to mean, YINSON will definitely be rerated on good fundamentals.

Hi sslee. No offense reserved.

It is definitely cheaper to do so, but you need to know the full structure of the bond. My recommendation is to understand the underlying security of the bond structure.
2-4% sounds like a treasury bond, which is guaranteed and covered by government.

There main issue is still maturity period and coupon rate ( the bond value at buyback also makes sense).

Another example is topglove bonds recently. The bond rates are very low, 200 million usd@ 2% per annum 5 year period, which is used to pare down their existing loans which is paid at 4% per year. This sounds very good. However they have to give up a few things namely introducing a convertible bond ( they can convert the 200 million usd into 131 million shares@conversion price of rm6.2), and also allow bondholders to borrow 2.1% of owners shareholdings or 5.1 million shares to be used for short selling. This sweetens the deal enough ( and protects bondholders in case the stock price tanks), that the bonds were snapped up immediately on the SGX and BURSA markets.

So in other words, nothing is got free. There is a cost to everything.

For YINSON case, 7.5% with no maturity period ( estimate 14 years to break get back your principal amount, balance perpetual). Ship charter risk if client non-payment ( penalty clause, low risk, i think rated bba+).

Or indo government bonds
Indo Gov Bond: INDON49
Coupon: 5.35%
Maturity: 11-Feb -2049

It all falls to your estimate of trust for the company (or government) ability to pay.

Thank you

Sapura and Armada share price crash is because debt generation and interest repayments has increased, while their profit margins and revenues has be dropped tremendously. With looming maturity of borrowings to be repaid in the very near future, and no one willing to buy their bonds, it extend loans, their only option is to do rights issue, warrant or cash call.

Yinson borrowings had no maturity period, thus classified as equity. Very very good arrangement for strong growing companies.

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Posted by Sslee > Jul 12, 2019 2:20 PM | Report Abuse

Dear Philip,
Mean no offend, my HSBC account manager do recommend me to buy USD bond with bond yield rate 2% - 4% depend on Bond issuer hence 7.5% sound a lot. Will it be cheaper to borrow long term loan and then keep refinance with new loan when the old loan is due to expire?
Thank you

Efficient market analysis?

Haha qqq3 I would have thought people have given up on it by now. Still have believers?

Oh... Warren buffet must be the most foolish human in Earth. Market keep rewarding him.

yawn.

This is probably the most important concepts in my life which changed my investing methods and made me a millionaire. Sad to be you.


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Posted by SPMstudent > Jul 12, 2019 3:32 PM | Report Abuse
tldr

yes, it is common issue in psychology.

I love applying all the mental models that I gain in analyzing a stock qualitatively and not only quantitatively.

The biggest question to answer in stocks is not whether the share price is going up or down.

The most important question to answer in stocks is to answer the question: what is the economics of the business 5 - 10 years from now?

A quantitative analysis can only get you so far. It shows a snapshot of the NOW: how much debt is accrued, what the business makes the last few years, how the revenues are trending, the dividend payout etc.

But this will not tell you how the business will do in the future.

For that you need to understand the economics of the business, its business fundamentals (qualitative, not quantitative), and how able it is in meeting challenges and growth.

That is the difficult path, and it involves removing as many unknowns and assumptions as possible.

only when the assumptions are minimized, can the mental models come to work in projecting the business and its real world capabilities compared to its competitors long term.

Find the moat. Understand the knight.

As a engineer one of the popular mental models I use is the law of motion.

In stock picking this is how I relate with it.

Force= mass x acceleration.

Therefore a object in motion trends to stay in motion, while an object at rest trends to stay at rest.

In other words triggers! A bad business will usually tend to stay a bad business, unless certain triggers that are enough to counteract the motion and push it the other way around happens.

At the same time a good business will have a lot of benefits like low interest rates, reputation and good management that will keep it moving forward.

Only when triggers occur that allow down velocity will business status change.

My mental model then is to find the triggers in economies that change a business fundamentals.

That is probably why I rarely buy net asset companies ( like property developers), because the triggers required to turn it to profitability have nothing to do with mass of the company ( assets), but they need a huge amount of acceleration to make it improve.

I believe the acceleration triggers will be very clear and concise before I jump into those kind of businesses.