As for Jaks,
When Warren buffett bought Apple, do you think he calculate every single number with a team of analysts then decide to buy? No! He started with a story. And the story is very simple, I'll post it here.

https://www.google.com/amp/s/www.cnbc.com/amp/2018/08/30/warren-buffett-says-he-bought-just-a-little-more-apple-recently.html

Now, everyone is selling tech stocks simply because they think it is overvalued. why is Buffett doing things differently? The story hasn't changed. So why sell?

As for Jaks story,

Everyone is buying Jaks because of the IPP to complete in 2020. It may complete, it may not complete. But my take is, so what? The long game of Jaks is never going to change. It's core business as a developer is not doing well. It builds useless malls like evolve which is beyond sad. It owes the star money, it's only long term play is to cut the development business and concentrate on being an IPP. But once it shifts focus on being IPP then what? It doesn't have the manpower or the management team to build IPP, the Vietnam thing was a lucky break ( which I pray it completes) that will be hard to replicate. They don't have the money or the resources to build another IPP.

The worse thing is, when the IPP gets completed, do you really think they will give out huge big dividend every year to you? No they won't. It will be like INSAS. They will hoard the money, giving out small dividend, while they try to figure out what they want to do next. As a minority shareholder you can complain, but there is nothing you can do about it.

Sure, it's share price is 0.45 now. And in 2 years time very high possibility it may go up to rm2. Great. But what next? Keep looking for companies like Jaks? Why?

You know for a fact that Jaks has no long term future. The CEO already disgusts me. Would I invest with him? Never.

Bad habits build bad mindsets.
Good habits build great mindsets.
Buy good companies and watch them be great.
Buy mediocre companies and watch them stagnate.

I only have a short time on earth. I don't want to waste it monitoring subpar companies like Jaks and INSAS. Eat too much Thai durian, after a while can't taste or smell musangking flavor anymore.

Stockraider, I am sure you have your investment policy and I am sure it works for you!

I believe you have a beef with qqq because he has insulted you before on a trade you make money with and fun of you on a trade you lost money with.

I also know how you feel, especially with your friend who stop posting because of barrage from qqq.

But from my point of view, I ask you a simple question. Out of all your trades, how often are you correct? And out of those which is correct, how many did you go all in and win big?

I may sell QL one day. But only when the STORY changes. Not because market tells me to sell. PE 50 might as well be pe1000 and I still won't sell.

Just to prove my point,
I bought QL in 2009 - 2m shares
I bought TOPGLOV in 2010 - 2m shares
I bought YINSON in 2012 - 600k shares
I bought public bank with me, wife and father in law money in 2012 - 500k shares
I am definitely not a one trick sailang pony. Just someone who sticks to his circle of competence.

I am not a gambler or emotional person. I started working as engineer with 2k salary, now is 7k almost retiring at 60. I don't have a rich father ( rich father in law got), in fact I am just the same as probably everyone here.

The difference between us is I research 1000 stocks, buy 1 which I am confident enough to grow 10 years, and follow it through the years.

What I used to do but no longer is research 1000 stocks, see hidden value in 500, then proceeds to buy 50 stocks which I don't know well. Put 2% in every one, but none of which I know well enough to top up every quarter.

I appreciate your gesture sslee. I'll try to give you some further insight on my investment basis as that was how I bought into QL 2009, TOPGLOV 2010, YINSON 2013. And more importantly, how I am still holding onto the shares and adding more today, Even while everyone else started selling far too early.

To be perfectly honest, the bulk of my 2m shares in QL was bought from 2009-2016, I have benefited greatly from share split since then. As such, I am not here to tell you to buy QL or recommend you to buy QL or any stock whatsoever.

That decision is up to you.

All I am presenting to you is the fact that there is a far better way to invest for the long term. When I bought QL in 2009, it was pe28. Inari pe before the cliff drop was around 30. Amazon for a very long time was pe100+. Google, apple, Berkshire all have high PE.

Why? The reason is because investors a willing to pay a premium for a wonderful company. And the reason they are willing to do that is because they get REWARDED.

So my advice is. These are my criteria in stock selection in particular order:

1. Scuttlebutt. Story first and foremost. What is the competitive advantage. How accurately can you identify the business growth will be 10 years from now.
2. Valuation and fundamental analysis on intrinsic value second. Always take this with a pinch of salt, as those figures can change drastically. Books can be cooked. Companies can restate their financial results it not even submit them.
3. Technical analysis on when to buy. Personally I don't worry on this one too much anymore. Timing doesn't really matter much if your expected holding period is 10 years or more.

If you pay peanuts, you'll eventually get bitten by the monkey.

Buy quality. Cheap people get cheap results.

Hi sslee, this will because my final response to you, as I find this forum to be toxic and unhelpful. And I hope the information serves you well

As your purchases is in INSAS and you know my views on that. As for my investment history of 9+ years in QL, I believe my investment performance speaks volumes over the performance of your stock in INSAS, unless you bought stock in inari instead, which I highly doubt you did.

But anyway, here is my long game on inari. Yes, inari is growing fast. However: firstly, 70% of it's sales go to just one customer, avago. Now broadcom is definitely a big name, however what is the future of the smartphone semicon industry? The margins enjoyed thus far is fast shrinking due to China competition but more importantly there is a slowdown of apple phones sales. It may pick up again one day, but it will not bode well for inari long game.

Why? There is nothing special about inari, it is not the lowest cost producer, otherwise it will also be selling big numbers and orders to Huawei and Samsung. But since it cannot penetrate that market, you can start to guess the long term possibilities of inari. It doesn't build anything special, or patented, or even cheap. It's only benefits is it is located in Malaysia.

What happens when broadcom's margins are pressured? They will source out to India, Taiwan, China. Anywhere that is cheaper. What happens when the cost of doing business in Malaysia increases ( as it surely will)? Intel left Penang, and when you read the semicon industry pre 2005, you will know for a fact the profits can come and go just as fast.

Inari was built in the ashes of 2005 implosion. You know from the start there is no moat.

Now, your only hope is to believe that inari is able to either have good r&d to produce new better products to sell, or die unable to adapt.

But looking at their effort to increase different sales line by working with osram on LED( very low margin) I realized that inari would probably not be good at diversifying and finding new business lines.

Compare that to QL. From just surimi, it ventured into feedstock mill. Then produced eggs and broilers. Then into frozen seafood and marine. Then into plantation and boilermech. Now into family Mart. It's ability to grow it's business lines astounds me. If I told you one day we would have 500 family Mart stores in Malaysia would that be a believable outcome?

Which is more believable, QL becoming a CP? Or inari becoming an foxconn?

10-20 years from now, I know for a fact ql will still be around. Eggs and surumi will still be bought, feedstock and fertilizer prices will still be high, chickens will still be consumed. As the most efficient producer, there will always be a demand for QL goods.

10-20 years from now, I have doubts whether inari will still be around. It's not very adaptable, and the future revenue I really don't know from where will come from where to justify it's PE.

In my 9 years of owning QL, I have never had a 50% drop or loss. I sleep well at night. I hope you do too.

You have to ask yourself, if you are confident in INSAS, would you continue buying in consistently quarter after quarter for 9 years straight, because I did with QL.

I know you didn't, and I'm sure you won't. Because you are smart, and I'm right. Company growth is the only way you will have the confidence to invest long term in a stock. And it is proven that long term investors make more money over short term investors.

But again, we are talking about INSAS, so my advise is, read up on my biggest mistake: aokam perdana. Then you will know what I mean. Just replace the words inari shares with 1000 hectares of timber land.

Again I hope your investments do well, and a happy 2019.

Phillip

And a final post for you Jonathan Choi, this will also be the last time I reply your post on how I value QL. As you are very smart, do tell me how many hectares of land QL has in Sabah and east kslimantan. How many more are they buying and planting. how much percentage from 2015-2018 is mature. What will be their capacity 5 years from now? Here is another hint, what was the price of cpo in December 2018? And what was the peak price during the palm oil boom? Please do your utmost calculations. I'll wait. Meantime, I'll also wait and see what boilermech is doing with their business.

While you are calculating, why don't you draw a graph between the price fluctuation of crude Brent and cpo prices from 2009-2018. I'll wait for that too. That's hint 2. What happens to CPO prices when oil becomes more expensive and palm oil becomes the cheaper substitute?

And while you are doing that, why don't I hand you the latest ctos sdn bhd report from family Mart subsidiary. How much outside capital do they need from ql to build a new FM outlet and grow revenue. How many branches do they have now? Are they on target for their promise of 500 outlets? How many outlets in Malaysia do you think they will have in 10 years? What will be the additional revenue and additional earnings gained from their franchise once that milestone is hit? Hint 3. The exact figures you might not find on ql annual reports, but you can find it from my QL explanation to Ricky yeoh how much exactly was stated in the p/l reports their revenue per outlet, cost of renovation outlay and profitability.

Now for the last hint. What part of of daily consumables is not regulated? Sugar price is fixed. Chicken and cow is fixed. Is livestock feed fixed? Oh? Who is one of the biggest producers in asean? What happens when raw material for animal feed goes up? Ask layhomg what happened. What happens to those who control their prices better?

Are you done calculating future revenue and earnings based simple mechanisms? Good. How much do you figure QL will earn from boilermech, familymart, palm oil plantations, feedstock, eggs, day old chickens and surimi 5-10 years from now? Now isn't that a lot easier to calculate and extrapolate than a lot of the fancy numbers you pulled from the air? When you have a clear picture of how the business is running? Now you do your DCF, and you net assets value, and your compounding ability.

Margin compression? Or did you think the price of oil is not a factor to manufacturing and plantation industries?

Please.

Moats for manufacturing businesses and pharmaceuticals never take a straight line growth. There are longer gestation periods, but compounded growth for a longer period of time should tell the tale between explosions.

Just because you don't see QL brand selling doesn't mean it's not everywhere. At 5 billion sales revenue ql product is probably as prevalent as Nestle. And oh yes your Milo and KitKat had vegetable oil in it aka palm oil. Guess who is on the sustainable palm oil list. Oh yes.

QL resources bhd.

I wish you good luck in your investments choivo, and I hope you do well in the future. But as I do not need to use margin and haven't for 8 years, my advise to you is the same. Don't use margin. And don't borrow money from your friends and family to fund your hobby. Get a job. Build a long term value. Read more. Explaining less.

But just to be frank, I don't need a single justification to explain why you should buy it not buy QL. It would slightly better for me if you didn't buy, but the price of the stock would not move anyway if you did.

I'm not an analyst, I don't do but side or sell side. I don't recommend people buy my stocks.

I don't need to make money off of selling you training courses or even need anything from you.

I don't need a subscription service business, I don't even need customers.

Now I know why koon stopped posting in such a negative forum where every opinion is not too learn more but too be a troll.

I thought I would be doing new investors a favor by sharing my 20+ journey investing. Once you hit 60 you really have nothing left to prove.

This is the last time I will post a message on this ugly unmoderated forum.

I bid you a good day, probability. May your investments do you well.

Probability, I really don't see how explaining to you what I do for my day job concerns you and investing principles at all. Other than the fact that I was part of the team doing the cpo mill in tawau, and later Indonesia, my specialty is in biomass generation and heat to electrical energy conversion. Since you seem to know Sabah so well, you can ask sistem consult and konsmal when is the next site meeting for QL plant upgrading works. But that is the most information I will give you without breaking info on who I am. But then you'd probably not know who ql m&e consultants are.

Godhand, if growing from 300 million revebue per quarter to 900 million revenue is not a sign of a growing moat, please do describe to me a company that does exactly what QL is doing and does it better. Market leaders generally have a moat. And please don't simplify moats to just brand recognition, management performance can be a moat (Warren), size can be a moat, first adopters can be a moat.

Anyway, I'll make it easier for you. Find me an Asian company in this part of the world that competes directly just with ql lifestock farming division at 1.9 billion in revenue ( animal feed raw material production, day old chicken and broilers) and does it better than ql resources.

Go ahead. I'll pay you your research fees and eat my hat.

You would recognize a moat if it bit you in the ass(et).

Funny thing is, you only know how to comment, but your biggest 2016 picks were both penny stocks which I have been even heard of before. Hexza and jaycorp. I'm sure you paid low pe and good prices for those stocks and enjoyed your big huge profit in your investment. But would you have been willing to keep those stocks for the long term? Would you have added more every quarter into your 2016 investments? No you would have not had the skills or the confidence to.

Small men make small decisions.

Probability, you seem to spend vitriol without any sense whatever. If you have never worked for Mitsubishi epc, George Kent, boilermech then you probably work for some pitiful chinaman engineering firm that never pays for quality work. I am an engineering manager for a multinational company, and I sign off on overtime and outstation pay for my engineers all the time.

Maybe you are not qualified enough to work at a epc?

Obviously, my screener for moat is based on a ratio. Every business is different, which is why I stick to businesses I know. My concept of moat is very simple to understand, if a company is able to grow revenue and earnings consistently for more than 5 years without taking on excessive debt ( again different business have different gearings) or excessive dilution of shares(via esos, warrants, share placements), then that is a sign for me to study deeper on the company.
Anything else
1. Friends/fund manager recommendations
2. Land/asset/cash and equivalent
3. Price to earnings/ price to book/ net asset value

All these are to serve as only a guide and taken with a pinch of salt. They mean absolutely nothing, especially when you are a minority shareholder unable to unlock value.

Ricky yeo: don't be silly. There is a direct correlation between owning too many stocks and having poor performance. The more stocks you have, the more you have to keep track of. The more you keep track of, the higher your error of margin. If you don't believe me, try buying (or even finding) 1000 of your value stocks, all you will have as average performance. Even if you didn't, how do you make sure that you can catalyze distribution of capital to all your 1000 stocks equally? You just can't.

If you don't believe me, we can do the Warren buffet 1 million challenge, you buy 1000 stocks, I'll buy 4. In 10 years let's compare results.

The only people who have different sick recommendations every week are fund managers. And they don't even invest their own money but take your commissions and charge you money to learn how to invest.

Up until 2001, all my value plays, technical plays, call options, put options, warrants all turn to dust. I had to avoid in-laws and wife and friends and hide in Sabah jungle until 2008 to collect money to buy back face. I bought pbb after it has long run up in after cny bonus in 2012. Overpriced then too.

Important thing is, in no time had I ever had the fear my stock was going to come crashing down, the trauma of waking up at 1 in the morning with cold sweats thinking of how to pay back my friends and family is enough for my entire life. Banks and credit cards calling everyday. Margin calls keep hitting.

I'm sure for everyone the most important thing is to not lose money. Most people try not to lose money by buying cheap companies at cheaper prices. I just choose to pay good prices for great ones.

For renong, when someone offers a legally binding offer to buy your stock for 4x market value, if you didn't know better, wouldn't you take the arbitrage value?

For aokam, teh soon seng was the kyy of the day. If you read the valuation reports, they had vertical integration and undervaluation with thousands of time concessions and acres of timber land, it was trading far below price to book and even had a pe of 5 once.

Ekran in 1994 won a bid for a small dam in Sarawak without open tender for 7.5 billion. It was called bakun. Imagine a small company winning such a big contact without open tender. Wouldn't you invest in it? In fact, didn't you do the same thing with jaks? Hoping for that ipp to finish completion.

The more things change, the more they stay the same.

I know now.


If I had to choose between layhong and QL in 2017, you know my clear choice. The superb company that commands good valuation. Or the so called value play.

Haha can you teach me how to short in bursa?

Epf bought 2 million shares, Chia brothers bought 6 million shares, it's a highlight stock that will float much higher and faster with guaranteed growth.

Haha you can buy QL or you can ignore QL.

You can't short ql. :)

But i do agree, stockraider has no idea what yinson does or how it does it. I bought my shares at rm1 each somewhere selling 2011+2012 and have night every quarter too till today. I only have around 600k shares in yinson, buy I believe in it every much as I do in QL. I have a 4 bagger here which I know will outperform any of your margin of safety stocks in the long run.

So far I'm still ahead in QL, public bank, yinson and TOPGLOV. I have a 10 bagger in TOPGLOV and ql. I'm fine waiting.

I'll see you in one year.

Hi qqq, I bet to differ, yinson is charter fpso only, their payment is fixed and contractual basis delivery only. Sapura is epcc, they design build maintain etc etc everything. The reason why they are worth 25 cents is because their payment is based on oil price. So if oil price up they make money after a certain barrell sold, and if oil price down then dead duck.

Bumi armada is a close comparison, however their vessel utilization rates of 43% and the contract profit margins is just silly because of their oversized get that they have to sell at a loss and absorb all the maintenance and repairs which is ongoing.

Yinson fpso and osv is running at 90-100% utilization. Basically they are a lean, mean fighting machine which uses only what they need, and gets more ship conversion as their market grows bigger. Right now they can afford to undercut bumi and the other for personally because of how well they are managed, while bumi has to keep selling ships with bad names like Armada kraken.

Looking at bumi Armada order book of 31 billion and comparing to yingson order Book and their management capability, I can basically tell you the story of what will happen 5-10 years from now.

Teareader it's a bearish market, epf just made purchase of 200k shares, the majority other buy another 6 million shares. Luckily choivo thinks ql very overvalued, otherwise next quarter I won't have a chance to buy.

As for YINSON, I don't treat it as a og company. It is more similar to DIALOG, they are just warehouse, transporter and storage for og. Therefore, whether or not oil go up or down, they will still enjoy good margins. And as transport companies always rely on management, they have very good guaranteed order book on hand.

Easier for me to estimate what will happen to YINSON 5 years from now, than a petron or hengyuan with crack spreads that I don't understand and have no idea how to analyze.

Sorry I meant buy at any price.

Obviously because your friends at upper management who buy shares have investment bias. They only buy company share because they thing it is safe. I work there so hot safety of margin.

You do not buy company shares because you work there. You buy shares because you realize your company is far better than the other competitors out there.

Like you say there are many roads to rome. I totally agree! But saying growth investing is not value investing is silly. If I can make 10x profit on my TOPGLOV, QL and I believe soon to be yinson and public bank in 10 years, I don't mind paying premium price for premium companies.

For sslee, I don't mind that he invest in this INSAS ( it is an Arbitrage play, because when the share price equals to asset price of inari, what other value is there in the business? I wouldn't buy INSAS other businesses if they gave it to me for free), but he has to understand that the only amount he can earn is the difference in intrinsic value. Nothing more.

Small peanuts.

It's like shorting a stock ( which no one in bursa can remember thing), if you short hundred percent, the most you can earn is double your money.

If you invest in the growth of a wonderful company the benefits is so much more.

It's just my 25¢. I've invested your way before stockraider, I've trade before using qqq way, and when I was young and stupid I probably wrote more thesis and reports than choivo.

This is the only way that worked in the long term. I sent my daughter to USA for studies thanks to QL. I hold 2m ql shares 2009 until today and didn't sell, and it's not because of but we any price.

I participated in ql growth. I know why it's growing. I can see where it will grow into in the future. And most importantly I know what the competition is doing.

For INSAS, I can't see anything 5-10 years ahead.

The biggest margin of safety is still understanding the business and buying quality assets at fair prices. If you buy lousy businesses just because it is cheap, or you don't understand why the management says and do things differently from what you believe should be the proper way, no matter how valuable the assets are it is no use. They will find a way to flush it down the drain sooner or later.

Just ask Warren on his investment in Decker shoes. Or even Tesco.

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/B759C7D8-BF4E-11E4-8BB2-B6B84A5B8359

The difference between you and him is he knows when to sell and why to sell. You only do simple investing. If stock price is lower than assets, cash in hand, pe = value with margin of safety= buy. If stock price is more than that = sell. Or in bursa, don't buy. Can't short.

Do you spend the time to think deeply about your stock? What are it's prospects 10 years from now?

Stockraidet: are you sure bursa is same mechanism with other stock markets? Really? Try shorting bursa stock. Try buying options. Try buying a vanguard index bursa fund. Do you know how many counters have been shut down by Bursa for fraud in it's entire history? Do you know what bursa penalties are? How many ceo's have been sent to prison with bursa assistance? Universal my foot.

I forgot to add one more estimate:

1200 hectares of land in Sabah for palm oil matured.
20000 hectares of land in East kslimantan(5000 matured). Where is the earnings and land valuation on that?

Do you know? I'm sure you don't. Do I know? Probably a little bit. I was there to help commission their palm oil mill in 2012. Then I went and bought even more stock with company bonus.

Now on my take on QL moat, which is how I think you should look at every business analysis first.

Understand your business. Then buy the stock.

1. Why is QL the leading surimi producer in Asia? It's just catching fish and processing it right? No. QL provides microloans to all the local fishermen to buy boats, fuel, nets etc but with the guarantee that any of their catch must be sold to QL ONLY. As most fishermen are poor, guaranteed sales and no risk on borrowing money from banks who need collateral, QL is their only source. This is prevalent in Sabah, and is now catching ground in Vietnam and Indonesia. If you ask yourself why eating seafood is expensive these days, a big reason is because the fishermen no longer sell to you!

2. QL not only does plantation, they also own boilermech which builds their refineries, does their biomass, maintains their plants. How many other palm oil plantations have that kind of vertical integration?

3. QL sells poultry and eggs yes. However more importantly, QL also sells fishmeal, produces animal feed and has a very high level of biological tech compared to others. Something the competition doesn't have.

4. Yes, QL seems overvalued today by i3 investors. But overvaluation becomes undervaluation if the growth never slows down. And as far as I can see, with their appetite for expansion, the demand for QL goods has never reduced and have caught up in their capacity.

5. Successful subsidiaries like boilermech and family Mart are highlighting the brilliance of management at QL. How do you put a value on this? Berkshire was going bankrupt pre buffett, 500 billion during his chairmanship. Management itself can be a moat refer to texchem and layhong. Layhong started in 1983, compare that to QL which was founded in 1987.

For me, my projection is simple:
I paid 28 pe for 1.3 billion with 100 million in net profit. (2009).Today it's doing 3.2 billion with 200 million in net profit. (2017). But the assets growth, the expansion into family Mart, the vertical integration and the monopolies in place continue to amaze me.

You say that growth of QL is fixed single digits based on last 10 years performance. But 10 years ago did they have boilermech? Did they have family Mart? Did they have penetration into Vietnam and Indonesia? What will the future be like? I don't know exactly, but I am confident enough to invest every quarter. As long as the story doesn't change.

Just think on this, any investment you make has a gestation period. I'm sure choivo doesn't do farming, but I have a 20 acre plot of palm oil in sandakan near ql agrofoods shared with my brothers. It took us almost 8-10 years for the palm oil to be fully matured and producing. In that time earnings were basically negative. But once we went through that hump, we were having great returns!

I don't believe in paying for a company at any price. I do believe in investing in a great company at a fair price.

I firmly believe that QL is still just gestating. You may think that paying pe50 is high for QL current performance. But we are not investing in current performance right now are we.

We are paying for the future.

P.s. and as long as we are throwing estimates in the air, in 5 years I'm estimating 500 million in earnings from Vietnam, Indonesia, family Mart and the recovery of palm oil prices. And in 10 years when the crude oil prices go up so high that palm oil gets more usage in commodities, seafood prices have become so high that the only crabs choivo can afford to eat is crab sticks? I'm estimating 1 billion earnings.

But really, do we really know? Previous performance can never guarantee future results. Both for good results, bad results and mediocre results.

Personally I'd sum it up this way.

Choivo is the kind of person who would buy Berkshire when it was a low pe company with a lot of machinery assets and high intrinsic value, basically a cigar butt circa 1962.

I am the kind of person who will overpay 30 million for See's candy ( at pe6, during the 1973 depression when everything was rock bottom), I bought QL in 2009 when it s pe28.

But when Charlie munger told Warren to buy See's Candy even for 30 million (they finally sold for 25), his idea was to pay a fair price for a wonderful business.

Was Charlie and Warren able to calculate sees candy performance to 1.65 billion in profits, 400 million in yearly revenue and 100 million in earnings? No of course not! If it was possible to calculate that, Isaac Newton would have not lost his pants in the stock market. He was the absolute smartest man during his age, and he derived many theories of how to make money from stock market.

What they were able to surmised was the See's Candy moat.
1. See's Candy was a commodity, meaning everyone uses it.
2. In East California, buying See's Candy was equivalent in 1972 to buying a engagement ring for your loved one. In fact, it was equivalent to love!
3. Back in 1972, yes it generates a lowly 4.2 million ebit on 30 million of revenue. However, it used a very small amount of capital expenditure to do so. In fact, in 35 years, it only took 40 million of outside capital to grow to 400 million revenue!

Charlie started with the business opportunities first and the moat, then decided if the price was worth paying for.

Please dont talk to me about lion industries and their antara steel business, because it was nonsense from the get-go. Parkson is a company with zero moat, and you want to imagine I will go into those sectors. I never will, although I laugh seeing you punt into layhong with no ideas about how the business works.

Seriously children with their assumptions, I do hope you didn't invest in those companies back then. If every stock that goes up or down have to take a swing, then that is speculation. And with your 28 stocks in your portfolio, I definitely worry about your ideas of real investment.

Giant and family Mart same business competitors indeed.

Do send me a bill for your stock advice, as I think you need all the help you can get. Maybe you can consider charging and teaching other people how to invest in stocks as well, especially with that saying,

Those who can, do. Those who can't do, Teach. Those who can't teach, teach PE. Or in your case, stock trading successes.

FYI, I'm not the one using margin in my investments, not am I the one using my parents money and my friends money to throw money into stocks.

Oh wait, you are.

Good luck in 2019, and let's compare the performance of your stocks in 2019 versus my stocks. See you at the end of the year.

and just answer me this very simple question: before you said all the chia brothers are selling. could you take a look again after your remarks after christmas? Are they still selling? or did they just buy 6 million shares?

Are they proving a point to you choivo? Or are they just blind as well? Or maybe.. just maybe.. they think as I do. Shareholders and management both are aligned on the true value of QL.

In terms of egotistical, I never started posting in thi3 website until recently, even though I read almost every post and investment book and remember all your figures and explanations.

I started investing since 2003, started making proper money after doing scuttlebutt since 2008.

In all that time I have never had the gall to use other people's money to invest for them, or ask to manage Mr koons assets in an open letter.

Worse still I never asked to do it after only reading and learning about investing a few years without any proper track record.

Luckily I don't need to.

FYI, I do know what maintenance capex is, I work for an engineering firm that does maintenance contracts, upgrades and installations for boilermech and QL. Trust me, when I say I saw QL growth with my own eyes, I really did.

You on the other hand spend 1 day looking at QL financial report and can come up with a sweeping remark saying that it is overvalued at pe50. Brilliant.

Try asking me how much was the 2 pieces of land they bought for capex growth? What was the fair value price of the land? What is all their subsidiaries and locations and the markets they sell to?

Like I said, skin deep knowledge equals skin deep results.

FYI. I never told anyone to buy into RCECAP. I never bought it, and I wouldn't recommend you putting 32% of your net worth into it either. Basically after understanding their business model and looking at the long game, I had a very different view of their long term viability comparing the bigger competitors.

But anyway, your compounded return for your ten bagger will never succeed if you don't compound your returns into RCECAP asap. Because that is how you compound.

Oh wait. You don't have any returns to speak of.

So basically summarizing up all the info into a few short sentences.

You are looking for an arbitrage play. The "intrinsic" value of INSAS is worth far more than the stock price. If you buy it and keep it one day someone will come to be a White Knight and make you rich and happy.

My experience? That will not happen.

Firstly, investing in bursa is very different from investing in NYSE. The crowds are different. There is an ability to short stocks. The investing intelligence and buying power is different.

Now ask yourself 2 simple questions:

1. If there was an obvious arbitrage play, wouldn't the founders of INSAS take it private, earn the obvious difference, cash the profit, rinse and repeat? They are a stockbroking and m&a firm. If got big money to earn, why share it with you instead of triggering a takeover offer? Are they that kind? Or too stupid to recognize the "obvious" value? Why are you the only one to recognize this value? Is epf, tabung haji, temasek all BLIND? Either way the management worries me. You should too.

2. If you were an activist investor with 800 million, would you do a takeover of the company? What would be defense of the owners to stop a hostile takeover and taking their hard earned profit away? Just ask kyy what happened to him from jaks point of view. Who will be crazy enough to do big m&a plays with a company like INSAS? Doesn't the management worry you one bit?

2a. INSAS has all that money but the management of INSAS business is horrible. Hohup is a lousy mini developer in a oversaturated market ( just ask them on their golden something project in Kota Kinabalu next to imago mall, at 1300 psqft in the 2nd poorest state in Malaysia. Ask them how their sales is going.) Why is meliuem buying all the horrible brands, and not going into something like uniqlo, or allbirds, that are market trending and keep losing money. Car rental? Really? What kind of business future are you buying into?

All I can say is: remember why the stock market was created. Not for arbitrage. Not for options. Not for trading.

The original creation of the stock market was for a group of people to share in holding on to the growth of a company and its profits.

In the end, if the company does not grow, there is no point in investing in it.

You do know that ql produces and sells raw materials for those companies to make those frozen food right as well as selling finished goods Right? Surimi is basically seafood paste. Try buying seafood, notice how expensive it is. Try buying ql raw material for your manufacturing process, notice how cheap it is? Do you even know how much ql sells surimi per kg? Who else sells cheaper? Have you talked to any of the frozen food manufacturers and supplier of raw materials?

Skin deep knowledge equals skin deep results.

If you consider 7-11, family Mart then jump to mydin and giant as the same kind of business competitors, then you really need to go outside into the real world and work a little bit. I feel like I'm wasting my own time trying to explain something that is so basic even idiots would know the difference.

Please don't ask to manage Mr koon fund. It's sad.

You are sad. Choivo. I'm actually embarrassed for you

A 2% position for me now is slightly under 500k, so if you can afford to "punt" 2% of your portfolio on silly things, maybe you should just stop investing other people's money.

Aiyoh, just when I thought choivo had potential, he now comes and put words in my mouth. Firstly I did not say buy any business at any price. What I did say was be willing to buy a good business at a perceived fair value. Just because ql is pe 50 right now doesn't mean anything in terms of its business performance. All it means is share holders are willing to pay 50 times earnings for QL because they believe they will be rewarded in the future with great performance.

Now ask yourself this. What happens if 5 years from now, you stop growing ql business? They will take out 350 million of yearly investments into plant and capex and start giving it back to the investors. That is why when the growth slows down you start looking at PE. You get a nice fat dividend, I sell all of my 2 million shares in QL and I reinvest in something new. And what is the PE now? Definitely not 50 anymore as they start paying tax on the declared earnings ( which I don't like), it probably gets to 8-10 pe and becomes like a defensive maybank stock which you invest by getting dividend (and never getting rich).

First and foremost, find that good business with unassailable moats and good growth potential first. After you have analyzed that, then you look at the pe.

If you do it the other way around, you would have never bought Google or Berkshire or Amazon.

If you want me to show you why QL is better investment in the future compared to Berkshire it can be pretty easy. Even Warren has said it many times in his AGM. It is much easier to go from 1 billion to 2 billion earnings than it is for 250 billion to go to 500 billion in earnings. It's the same thing for Berkshire, he said it many times, the performance of Berkshire today will never match the performance of the last 20 years. He literally said it himself. There is just a limit to how many great businesses you can buy before you have to start holding doles of unused cash.

You will never invest in a business like Amazon or QL or TOPGLOV or Google because you do things the other way around. You never had a ten bagger, and you never will. Why? Your mindset is on perceived value. And not in how the business is growing or how big the moat can be.

If you want to be stuck in value trap like RCECAP enjoy yourself all you want, but in 5-10 years of high PE performance QL had literally performed better than your 32% holdings in RCECAP.

Why? You don't understand your stock or your business. You don't know the ceo's name, what his background is and the basis of your thinking is ahlongs will always make money. Funny.

Let's look back in 5 years and see if you are still on RCECAP.

Oh wait, please invest for longer than 5 years before you start commenting more theories and less facts.

Did you even invest in Berkshire before? You seem to talk about it alot, do you understand the business and all it's business units? Do you know who the CEO of netjets is? Have you ever sat on a netjet before?

I'm saying if you don't know what growth prospects is on all it's business units, the performance of all it's managers and ceo's, their background and business capability, don't waste time drawings figures in the sand. Your investing skills is basically just words with no performance return.

In 2017 I doubled my return on QL, it was a calculated risk but done on a quarterly basis with confidence.

You had -20% on your fund in 2017, you clearly don't understand any of your business. And if you are blaming it on China+US and all the other gooblededook, I truly pity you.

Ahhh,I see. Thanks so much

Hi Godhand, I agree with you totally, air Asia is another tier. But answer me this, how hard is the industry to get into? Basically anyone can go into it, if you have guts, the loans and the air license to run. Langkawi proved it. But just because that idiot failed doesn't mean that there won't be idiots who try to do the same thing by selling cheaper

Basically Tony is not an air man. He was a music producer who bought the old airline license, got a loan from sdb, bought the license for rm1 with all it's debt and got it off and running.

Now he did take a page out of virgin by adding ancillaries to increase the margins and generate good profit to grow and run the business until today.

But if you think air Asia has a moat, consider the fact how many flights are coming in and out of Malaysia. As a passenger, the moment air Asia stops becoming cheaper and more reliable than the other LCC, I'll stop using them and use next cheaper and reliable carrier. Tell me if that is not true. If you don't have pricing power, you don't have a moat.

As for ancillary profits, the moment passenger loads drop, all those items just disappear, you can't sell food if no one flies. And if planes are stranded, they can't make money.

And the most important thing is safety of margin. The risk of your plants and warehouse disappearing for QL is pretty much zero. For air Asia, it's a very real risk, and something they can't control.

Just imagine a scenario where 1 plane disappears in the Indian ocean. Not only do you have do compensation for the guaranteed human loses, you have to buy a new plane, but more importantly the loss of confidence the public is damage can go far beyond anything that can be repaired. The loss of profits will be instantaneous and unforseen. This is one of the factors of undervaluation of AA. Tell me I'm wrong.

Just ask Malaysian airlines.

And for me I prefer to compare AA not to QL but more to an insurance company in terms of business model. It rains far more from the float reinvestment to increase it's profits, but at the same time any overstretching of resources will kill the company in the case of any big disaster.

Everyone always things off growth and profits. But what you really need to think about is also safety of business margin.

Looking at the comments here, I realize that I have been too harsh on this choivo, being quite upset with his holier and smarter than thou attitude for someone who seemed to so knowledgeable but only started learning about investing recently.

I apologize sincerely and will stop bringing you down in front of your future clients.

I hope you do well in 2019 as I know it is difficult to keep your hopes up and your chin straight when the chips are down and everyone is crying for your blood and making fun of your investing skills.

But if you will hear out an old man, my advice will be to you:
1) listen and read more than you speak, as others might have opinions and ideas of worth, but useless to you if you do not take it in, analyze it and understand it.
2) try to trim your fund down to manageable levels, as you can never keep track and understand each stock deeply enough. I think you probably cant remember who the ceo's of each company are and what their philosophy or characters are like without referring to google.

and if you think if details like this is unimportant, let me ask you this:

if you could only buy 1 stock for 10 years, and you had to top up every quarter for that 10 years, what extra edge in information do you need to keep up an open mind to continue investing through rain and shine? Is reading financial reports, quarterly reports, stock price movement enough? Is going to i3 forum for bias confirmation enough? Because that is what everyone else is doing. Do you see them doing well? Minimal effort gets you minimal results.

zhangliang doubled his money in 1 years, and yet he sold. where does he get his conviction to buy and sell?

I bought QL in 2009, topped up every quarter, and never sold even until today. Where did I get my conviction to buy and not sell even until today?

That comes from reading every possible detail from every possible source, visiting sites, going to agms, talking to competitors, talking to suppliers, reading market journals, reading orderbooks, reading third party ctos reports,talking to bank managers, reading on capital allocation reports, loan interest rates, reading fund manager analysis, reading reading reading. All over a 9 year period.

I have a feeling that I spend more time trying to understand 1 stock than you do trying to understand 28 stocks in your portfolio. I hope you get what I mean after all this rambling, without the pretty pictures.

Again,

I hope for you the best for 2019, and good luck!

Hi flintstones, personally i dont think all the small/midcap businesses are all manipulated, its just that the market is so small that investors with margin financing and a quick feet can float or sink a company very easily causing distress, I mean the standard smallcap company is 100-200 million market cap. The standard midcap company is 500-800 million market cap.

For me I dont really look at the company whether smallcap, midcap or largecap. In fact, when I first started buying QL, it did drop below 200M USD valuation (penny stock range).

My investing principles that worked was simply buying into stuff that I know and am familiar with, things that I can see.

I bought QL because at that time I was heavily involved with engineering with boilermech. They were a fantastic paymaster and was a very well run company always finishing biomass projects under budget and on time, and from there I started to look at QL. When I did, I realized that it was running its businesses far far better than all the other poultry/seafood farms, plantations, feed mills around Sabah area.

That was when I knew I had to look at QL deeper. Reading into the financial reports, it was very high pe (around 29 if i remember correctly), but the free cash flow, the growth in revenue, and the speed of implementation. I attended AGM. read into the competitors.

I remember shaking mr chia song kun hand and actually having a talk with him regarding his policies and strategies. Very humble and hands on man who wakes up at 5 and goes to site directly early morning. If I could have him working for me I thought, I'd never lose a nights sleep.

In a weird and funny way, he is working for me! In fact, the reason I could send my daughter to USA for further studies is because of him.

Never underestimate quality of management!

In summary, basically what I am trying to say is there are thousands of stocks in bursa. Some smallcap, some bigcap. There is no way for you to understand deeply all of them or for you to visit all of them. So why try? Stick to what you know, know deeper in companies that you know are very efficient and doing well and keep doing that.

Why feel angry or upset when people like choivo make millions of dollars in their investments? They made it so just be happy for them, as long as you make money on yours as well.

Just dont trust those who buy shares and stocks in 10-20 different industries and recommends to you to buy into rcecap, insas, layhong,development companies, hengyuan, petronas, elsoft, jaks, sendai whatever all in one portfolio (somehow I dont think choivo is doing too well). There is absolutely no way they can have a deep opinion about all those companies just by reading financial report only.

Thats insane.

Even the best investor of all time, Warren buffet doesn't do that. I know for a fact that Warren attends AGMS, talks to tedd and todd every other day to bounce ideas, reads trade journals, reads newspapers, reads financial reports, reads market reports, reads sales and revenue analysis, reads moodys manuals back and front, receives business proposals every day. He basically reads 12 hours a day, and even with that he makes mistakes all the time.

Me? I read a lot, but I stick to the stocks I know. I wish I knew a easier way to make money investing, but to be honest?

Its a lot of long hard work. There is NO easy way.

Stick to what you know (just no confirmation bias, and be brutally honest).

Now here is why AA is not in my list of stocks that I buy for myself (its only included in the stock pick list because we need to choose 5)

There is not much differentiation between carriers other than how low you are willing to go. Everyone pays the same price for fuel, everyone buys the same planes from the boeing or airbus. Everyone has to get maintenance and parts from them.

Meaning in the long run, everyone will start to compete in the same way, so the profit margins will basically be the same for everyone.

Air asia has NO MOAT. Its prices are basically controlled by the prices of jet fuel (50% of operating costs), it doesnt have its own homebuilt planes, it doesnt have a unique business model. If it had a moat, it wouldnt be selling off its planes and would probably be getting more and expanding into more countries.

Its just the best at what managing what it can manage. Which is immediately cutting off bad fly routes, focusing on revenue earning flights, and selling off what is unneeded, maximizing impulse buys. Its a midterm gain, nothing special in the long run.

For me, if a carrier decides to become like netjets business model(with fractional cost, pay first enjoy later) and becomes the first to market then it has a moat. If it becomes like uber with market changing system, then it has a moat.

For me, AA and inari is quite similar, after years of suffering and other plane stocks died horrible death (or in inari case 2005 when all the semicon companies left penang crashing and burning), the survival of the most adaptable had a big lead and kept running with it. its just like the dot.com crash, the ones who survive are by definition the most efficient.

In summary, the low valuation comes from the unknown costs that are uncontrollable (like fuel prices, plane maintenance costs and costs which you just do not have a way to solve). Its also a business where anyone with enough money can get into, which brings down long term profit margins.

It is much easier to sell high price and discount down, then to sell low price and bring it up.

for air asia, the way i think of it is like this.
The indonesia and phillipines is losing money yes, but they are cornering and killing the other lcc's with prices. When we do price comparison of tickets, it is always in comparison to Air Asia, so it becomes the benchmark. the long game for AA is in 10 years, it will continue to gain market share and can afford to kill off the smaller competitors ( like that langkawi fellow), malindo, cebu pacific etc etc with lower margins and more carrying seats. It already has one of the highest loading factors in the industry. So definitely growth is there, but how we look at AA vertical integration is the key thing to increase profit and long term business growth.

In terms of quality of management,
which other airline actively pushes duty free goods and catalogue purchases (even online web buys) to the passengers who have to sit for hours with nothing to do? I know my wife keeps buying impulse buys on almost every long haul trip.

which other LCC sells prebooked meals (which are actually pretty good), rokki plane internet connectivity, special premium seats, and free money from build your own insurance and service charges? in fact, as far as I can remember, AA was pretty much the first airline that sold food on a plane in Malaysia for me. That was when I knew it can survive and prosper.

when you watch a movie in the cinema, the big earnings are usually from the popcorn and drinks and etc you buy when you watch the movie. the tickets they dont earn that much because the movie companies earn the big bucks from there.

AA is even smart enough to get group discounts and special prices to buy bulk planes, which they sell parts off at profit to other carriers, and gives it out as dividends to shareholders.

In terms of carriers and the performance in getting the most bang for buck with its passengers, its pretty much best in class.

However....

I've been around long enough in the market to know how easy it is in the local bursa market to know how syndicates can build their own value trap companies. Especially if you can't short shares and can only buy them.

People seem to think that investing in bursa stocks is the same as investing in NYSE or NASDAQ.

It's not.

It's a lot harder ( and simpler sometimes) to invest in bursa stocks because the market is smaller, the clear investing choices less, the monopolies more moaty.

The best in class stocks in bursa always seem to have a pe between 24-50. I don't know why it's that high, but when everyone is super defensive, that's the way to go.

I started my current method of investment I've lost multiple fortunes investing other methods in the stock market.

Hi Mr Lee soon sheng, I believe there is nothing wrong with buying beaten down value stocks. Every stock, whether growth or undervalue or dividend or defensive is a value stock. Would anyone not buy a stock because of its future value? But looking at stocks you have to see the long game.

And to see the long game you need to understand the story of the business. I have spoken alot on ql and it is easy for me to repeat and sound like the old man I am. However, I prefer to work with things that I also read and know well, so maybe we can talk about the long game of insas, your biggest holding and favorite stock.

What do I see when I look at the company? It is a company that has one lucky break in inari, but is then trying out everything and anything to catch the next lucky break. It does dome cafe ( which is not being managed as well as Starbucks or old town or even Papa rich), it does fashion retail, it does car rental, and of course it also does semicon.

However the feeling I have is that the company is just a company that does m&a, a stockbroking type company, and I think the market knows this and treats it as such. The teams there are just not good at growing their non inari business, and I don't things will change in the future.

You are neither wrong not right because people say it you believe you are. You are wrong or right because the facts say you are.
And the facts are this: INSAS is a one trick pony that got lucky with inari, and it struggles with growing everything else. It's management is not specialists in their business fields, and their only long game relies on finding wonderful jewel businesses at a young age.
If you buy a share in INSAS, you are basically just betting on the long term survivability of inari. But as inari is a listed company and not private, each time INSAS sells inari shares to pay for their m&a items, the share price drop will be more excited, turning INSAS into a huge value trap, it looks nice and valuable with good pe on the outside, but once you dig into the figures of what happens with management and assets, you realize you are on shaky ground.

You say the value of INSAS is rm4. But the business of INSAS is worth nothing if the value is not unlocked. The only guaranteed play INSAS has is to sell it's inari shares for dividends to give to shareholders, because it has no clear way of growing it's business. It doesn't have a moat with a manager like Warren Buffett, who can pick up excellent businesses every year. Inari itself is a wonderful business, but you are buying INSAS instead, why? For the perceived value of inari if INSAS sells all it's stock holdings and dividend rewards it's shareholders. Which it will never do. Because their management would not be able to find another inari. But you do realize, inari shareholders are the last to get paid if a company goes bust. INSAS will probably never sell inari, not have the skills to run the ship properly if Mr Ho and Mr Mai were not around to help fight for projects and technical skills.

When a stock is beaten down, it usually is for a reason. And the equation you need to ask yourself is this. What is the real value of INSAS if you take out the share holdings in inari. What are the business prospects can you look forward to in their growth 10 years from now without inari. Will they be able to find another inari to invest in?

With their current record, I highly doubt it. Same thing, would you invest in a value company with pe5, but where you cannot look at the growth prospects in the long term, the quality of management, the success of their business units? Or invest in a company with pe 50 with a huge defensive moat, consistent growth every year, and successful growth and execution of its new business units.

To be honest, comparing the competitive moat between a semicon factory without it's own foundry and r&d budget to compete with Intel, qualcomm who will compete with you if times are bad, and a surumi business which is asean market leader and growing it's clear which will be safer in the future investment. Then you add business execution of family Mart and dome coffee, and you can immediately see the synergy and quality of management in spending your investments wisely and growing earnings properly.

There is a thing to be said about paying fair prices for great companies.

And being stuck in value traps which lure you in with 2 cents dividends and proceed to eat up your capital.

Sometimes the market does know something you don't.

If you paid fair (or slightly overvalued) prices for excellent stocks, you wouldn't lose a night's sleep.

I bought QL 9 years ago - happy until today
I bought public bank 9 years ago - didn't buy ambank not RCECAP. Didn't lose sleep. Still great profit until today.
I bought TOPGLOV 9 years ago - quality of management never made me worried.
I bought YINSON 7 years - best in class.

Hi Mr tan,
My stock choices.

1. Ql -20%
2. TOPGLOV -20%
3. Yinson -20%
4. Hartalega -20%
5. AirAsia -20% - balance of value

Apologies for the name, I don't know how to change it. And also appreciate if I can join in your stock picking game.

Cheers

long story short, you buy and sell shares when the story changes (which you find out every quarter). The discount vallue and pricing of shares should only serve to guide you, not manipulate you. In fact, I think warren buffet was brilliant when he said we would be better off if the stock ticker didnt exist and shares must be held for 10 years minimum. buying and selling shares based on rumors and panic is crazy. unless everyone knows something you dont. Which if you did your full research, you wont be blind to.

here is the thing, last week i bought 50K shares at 6.25 on 25th December after company announce christmas bonus, now the share price go up to 6.82, should i sell now and enjoy slightly under 10% profit around 28K? most people would say wow that is a good technical deal lets do it! Choivo Capital will definitely say, wow! market down you make 10% surely by luck, speculative play like that sometimes make money other times sure lose money.

my question is, if the only reason you buy or sell shares is when you make money or lose money, then how do you when is a good time to buy or sell?

Do you do technical analysis (which i personally think is very weird for my investing understanding, when people buy you buy, when people sell then you sell more, time instead of being your friend it becomes your enemy. And you have to do many many trades, causing you to have less time to do proper research and judgement, and forces you to rely on charts, which somehow is always correct on backtrades, but when applied to future stock movements always end up correct until one day it doesnt. For me personally, when there is a discount at the supermarket i buy, and i never buy roses on valentines.

Do you do fundamental analysis? ( which i think is the way to go, but you have to read so much and remember so much that even geniuses like warren buffet can remember stock prices 5 or 10 years ago for his particular trades, you have to understand their competitors, the moats and economical advantages, the CEO's, the debts, the future business profitability and opportunity) that to reduce a stock simply to margins, profits, EBIT, revenue, DCF, debts is simply too simplistic and a suicide for anyone who doesnt do enough research into the stock.

Giving another example of a Sabah stock (the owners are sabahans, most of the directors and major shareholders are sabahans, my friends!) which is Mikromb, which were making really good money until 2017 end, if you look at the stock it is a perfect pioneer status company making protection relays and electrical relays that is so cheap and competitive it has been exported to vietnam, africa and overseas, with a huge growth and good track record of dividends and share splits and rewarding to the shareholders. for a value investor and a technical investor it would have been the perfect momentum stock.

However, a simple and detailed read into the company prospects, annual report and attending agm, would have warned you that their pioneer status ends in 2017, and lo and behold starting in 2018, everything is the same, good revenue growth, good dividends, good profit (30%), but receiving income tax from the government for the first time changes the entire company prospectus ( bringing 50% drop in share price). All of these can be avoided if you spend enough time reading and researching before buying the stock. Fundamental analysis will not tell you this, technical analysis cannot predict this.

The only reason why I knew about this was because ah wah the founder of mikro is a sabah friend, and a simple question on low taxes brought this issue up (and also eyebrows). Same with my investments in QL and topglove ( I live in east malaysia, and have seen with my own eyes their amazing growth. Also same with public bank (when all the big bosses and chinese companies in east malaysia all deposit their money with public bank, it means something, especially when the quality of the bank deposits is greatly increasing every year). For yinson, knowing about the company from the days when it was just a transportation company to the day it started to venture in to O&G fpso business I learned something valuable from the company manager, "it doesnt matter what the oil prices are, in the end we are just a transporter, forwarder and storage unit for oil. Our charter rates are fixed, and we will always have a market if we are the cheapest and most efficient transporter.

There is something to be said for knowing your circle of competence, and sticking to it. Until today I still only have 4 stocks, and whenever I meet another new fund manager/trader/ investor who says he invests in 10 or more stocks in different industries, businesses with multiple outlooks I cringe.

Either I am very very stupid and cant analyze google, amazon, facebook, superlon, hibiscus, etc all at once in a day. Or they really dont know what they are doing, and just have skin deep knowledge of their stock investments.

Either way, they are not touching my investments. Or making my decisions for me.

anyway, just some more information for you too digest to understand how ql works. when you try digest a lesser managed competitor LAYHONG try to look at their previous quarter results announcement. Why did they have a big loss? It was due to 8% increase in feedstock prices from soy etc, and a culling of chickens in tamparuli for their broiler farms. Why did this not happen to QL? They also had broiler farms nearby? It is because of their attention to biological safety and agricultural quality (no culling as all the chickens were safe). they also produce their own feedstock mix from palm oil kernels and other materials (which come from their plantations) so the rise in soy prices did not even affect QL.

Thats why when kids like Choivo capital thought they were making a good deal investing in LAYHONG they burned all their money, high revenue, very low margins, no vertical integration. When they got caught swimming naked, all their positions turned to dust.

These are not new things, and you could see it coming a mile away. It just takes business sense to see beyond just numbers and figures and truly understand how a business works, what challenges they face, and what their competitors are doing differently. PE will never tell you this.

that is called understanding your stock.

tah16600, how do you know that the pe is high? what is low pe for you? I have a feeling you will probably never buy a single share of QL if you are always looking for cigar butt lying on the ground.

why would they throw for no reason? If the business is good if they throw isn't it even better for retail investors like you and me to collect ?

but anyway, tah16600, lets try a test. Because i ran into the same problem when i first bought the stock in 2009.

it is 2018, the pe is 50, share price is around 6, 8-15% revenue growth every quarter ,low dividend but high investments in new equipment to maintain their monopoly.

in 2009, how much do you think the PE was? revenue in the 4th quarter was 300m, 7-8% net profit,even with the big investments in factories. I wont tell you, you need to believe it for yourself, why i bought then.

Here was my reasoning, with that growth, the PE was indeed high. But if they stopped investing in new equipment every year, collected the dividend and handed it out to investors? How much would the PE and dividend yield be then?

How much would the effective PE be?

Secret is to look at cash flows and generation of FCF. Because profits and earnings are only after you minus all your investments and expenses.

Now, fast forward to 2017, they spend 338 million ringgit on new equipment, new factories, staff training, amortisation etc etc. all this to maintain their moat and the right to be called number 1 biggest surumi supplier in asia (not to mention egg king).

How many other competitors can fight on the same ground, much less do the same investment to push QL out. lay hong? not even close.

now, what is the demand for seafood processed meat, chicken, eggs, palm oil? in 5, 10, 20 years from now? how big is that market demand?

now you tell me if buy now overvalued or undervalued? I will tell you in 10 years time, which undervalued stock you bought that performed better than QL. Maybe ill regret then. but hindsight is always 20/20

Enigmatic, how do you defined overvalued? I sell only when the story changes. For me I will sell when
a. either the founder and family stop going to site, pass away and being so hands on in the business. Did you know the ql founder has a PHD in agriculture field?
b. People stop eating eggs, chicken, palm oil, seafood. Or if a cheaper source becomes more acceptable readily available.
c. They start giving out big share options to directors in lieau of salary or start spending willy nilly on bad companies. I almost did that with TOPGLOV when they bought the company last year. But I forgave them and moved on.
d. My son need to go to university and fails to get his scholarship. So I have to pay for his education.

For me, why traders buy or sell shares I really don't know and don't care. All I know is in 2009 when I first started buying ql, the quarter they sold 300 million worth of products. In 2018 quarter they sold 900 million worth of product. If that is not a most I don't know what is. I've been consistently buying some 2009 every quarter until today rain or shine. Now with multiple stock splits etc I have 2 m shares, not much but I'm just a old uncle working for other people. For me as long as the story doesn't change for ql, and no competitors come in to fight their surumi monopoly, I'll continue buying whether or not this brothers sell it buy etc.

I remember in 2011 when ql did their rights issue, all the find managers was telling me ql is overvalued, not a good buy etc etc. Same thing with Nestle, forever overvalued.
But if knew 2018 results for QL, would you have bet the farm in 2011? It's undervalued then compared to now. But if course hind sight us everything.

Tah16600- downtrend is just a technical word when Mr market buys and sells shares. If you really want to know the meaning of the word downtrend, take a look at the quarterly revenue and sales of QL, is that a downtrend? Or did they just have the best quarter revenue ever in ql ?

Small advice for you warchest, I started investing in 1997, back then still using remiser with their 10% brokerage fees. After the crash I also first started buying those small/midcap with small success. But after Bursa stopped shortselling activities, I notice the market here become very weird and hard to analyze properly. Basically you cannot punish bad companies, you can only reward good companies. So after I changed my investing policy ( I lost money for 6 years), to only buying companies with growing or good moats and great management, I started to make money.

My summary is for bursa market since 2000 to make money, you need to be willing to pay fair or slightly overvalued prices for great companies. All the others small/midcap with good people/lowdebt etc, a lot of them are value trap that is being manipulated by cartel. They put out announcements and fudge figures to make you think it's a Warren buffet buy, then they push the price up and make you excited. Then when you think you can wait longer to gain more, they pull the carpet from your feet. In 20 years of investments I have seen these trends repeat over and over.

Only in Malaysia Bursa because it's a small cap stock exchange. The only time I make ten-baggers, is when I pay fair price ( what I believe to be) got great companies do u get rewarded properly long term. Like QL. Like TOPGLOV. Like public bank. Like YINSON. Those give you ten-baggers.