Invested Capital, Time and the Rate of Return play important role in wealth compounding.

We should work & save for the capital, identify good companies, buy them cheap, and be patient.

The Stock Market is designed to transfer money from the Active to the Patient. - Warren Buffett

Investing should be more like watching paint dry or watching grass grow. - Paul Samuelson

No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant. - Warren Buffett

Time is the friend of the wonderful company, the enemy of the mediocre. - Warren Buffett

Mr. Chong,

Thanks for the compliment. I never expect this portfolio provide me such a return in short time frame. I believe lucks play the cards.

Most of the stocks I picked was recommended by Mr. Chong instead. Thanks for your guidance and providing me a lot of tools to fish.

I am happy to learn that my current portfolio performance +15.79% less than a month. I hope I am able to achieve my goal - http://klse.i3investor.com/blogs/intelligent_investor_notes/53832.jsp this year. And, I can repeat it year by year. I wish my portfolio able to sponsor my retirement life.

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. - Paul Samuelson

Let's aim for a CAGR of 15% in my life and let's my portfolio grow steadily.

Hi kc888,

A 15% CAGR is my goal and I will try my best to get it done.

And, I will continue to participate the yearly Stock Pick event. You are welcome to help me to monitor my progress and provide me constructive feedback.

Thanks!

Hi Haan, Mr. Chong is kcchongnz. You can contact him on ckc14invest@gmail.com

Happy Value Investing.

Hi Mr. Chong,

I agree with your statement. Your help is required to help to build our psychology mindset.

Hi jester,

You may want to consider to join Mr. Chong online course.

Hi tbm65,

I never steal.

Please take note on the reference sections.

Hi Mr. Chong,

Happy to have you as my teacher.

Thanks for your guidance and the good tools provided by you.

Hi Jester,

Mr. Ooi is a well respected TA guru. I think he is far better than me.

And, I think your return is good - http://klse.i3investor.com/servlets/pfs/41632.jsp

Hi Icon8888, I was asking are you the classmate from Mr. Chong online course.

Hi Icon8888, Thanks for your compliment. All credits shall belongs to Mr. Chong.

Are you our classmate?

Hi SpeedyBoy, I learn a lot from Mr. Chong (kcchongnz).

He provide me a lot of good tools to hunt in this klse jungle.

Some readers ask me why I aim for 15% return? The answer is here - http://klse.i3investor.com/blogs/intelligent_investor_notes/53832.jsp

Hi NOBY, I have missed your question. The comment here is not send to my email. I only visit it when some reader send me this link and ask me question.

Both company is similar. I pick CHINWELL because the pass data show me CHINWELL is more stable than Tong Herr.
- CHINWELL Pass 10 Yr Result - http://www.klse.my/stock/result/financial/last10fy/5007.jsp#stockDetailDiv
- TONG HERR Pass 10 Yr Result - http://www.klse.my/stock/result/financial/last10fy/5010.jsp#stockDetailDiv

Apart from that, CHINWELL did spend some CAPEX to acquire more share on it's subsidiary in Vietnam. This will serve as a catalsyt for its business growth.

And, you might interest to take a look on current week (Vol. 309) busy weekly report on CHIN WELL.

@bsngpg, you may consider to join Mr. Chong's course. You should able to equip yourself with some good hunting tools from the course.

Whoever interest to learn value investing should join Mr. Chong course. It will serve as the best new year gift for yourself.


Happy new year. And, happy value investing.

Mr Tan,

I would like to participate in the stock pick.

My target CAGR is 15% and my stock pick is

# Stock % of allocation
1 PRKCORP 10%
2 BIMB-WA 5%
3 MRCB-WA 5%
4 HOMERIZ 10%
5 LATITUDE 10%
6 VITROX 10%
7 CHINWELL 10%
8 UCHITECH 10%
9 CSCENIC 10%
10 TGUAN-LA 10%
11 PTARAS 10%

Mr. Tan, I would like to participate. I will provide you my pick later.

I fail to achieve my target - a CAGR of 15%.

Hi Noby, It will better if we ignore the share price for this moment if we invested with excess cash.

hi ladahitam, where you get the info on sime darby transaction? I didn't see any announcement from bursa.

Mr. Chong did mentioned in the blog title that this is a "Risk" Arbitrage but not "Risk Free" Arbitrage.

Please don't follow blindly and understand what is the risk you are taking when invest in the stock market.

According to theedge (http://www.theedgemarkets.com/my/article/ock-group-perak-corp-sime-darby-property-ccm-lembaga-tabung-haji-prolexus), "
The announcement would not augur well on Perak Corp share price, which has rallied on the proposed SCR and repayment."

This news is negative for the shareholder who hold the share and hope to earn a 0.30 when SCR happen [1].

In the other way round, this new is positive for the shareholder who want to block the deal [2].

The price may come down when the shareholders [1] sold the shares but shareholders [2] not pick it up. While, the price will go up when shareholders [2] buy more shares from open market at higher price.

“The stock market is filled with individuals who know the price of everything, but the value of nothing.”
- Philip Fisher

The value of the company is determined by (1) the non operating asset value and (2) the present value of the future earning.

The stock price is determine by the market. And, in the short run, the market is a voting machine, but in the long run it is a weighing machine.

So, this statement - "Take note it is not the market which given a 3.00 something value to this company, it is from the major shareholder. " is not correct. The major shareholder set the price to 3.9 in this SCR exercise, but it is not the company's value. The value might be higher or lower.

Most of the shareholders think that 3.9 is far below the fair value, and they reject the offer.

And, you might want to read this post from Mr. Chong - http://klse.i3investor.com/blogs/kcchongnz/52382.jsp

Mr. Chong have provided us a good write up on the portfolio diversification at http://klse.i3investor.com/blogs/kcchongnz/48946.jsp

The only free lunch in investing.

Hi Noby,

Can share with me the link?

Hi Mr. Chong,

It is a trap?

You are welcome.

Current TGUAN price is 2.26

TGUAN-LR should worth 2.26 + 0.5 * (2.25 - 1.50) - 1 = 1.64

I will buy more LR as this provide me an opportunities to buy TGUAN in a great discount.

Hi chengcheekaan,

You still need to pay RM1 for each LR in order to convert it to 1 ICULS and 0.5 warrant.

Do read http://www.bursamalaysia.com/market/listed-companies/company-announcements/1741229 or contact your broker to pay for your right issue if you are holding the LR.

1 LR + RM1 = 1 ICULS + 0.5 Warrant (exercise price 1.50) and you can convert ICULS to TGUAN after 2 year (if you wish to do so)

While, we need to take note:
- ICULS only entitle to a 5% interest and you can't convert to mother share for the first two years.
- ICULS bear less risk than mother share

TGUAN-LR should worth 2.2 + 0.5 * (2.2 - 1.50) - 1 = 1.55.

Based on above. Yes. I agree with joerakmo. The LR is a better buy. And, I have swap my TGUAN share to LR.

And, please don't get me wrong. I am not advice anyone to sacrifice the time with family. In fact, my own priority is

(1) Family and Friends
(2) My Career
(3) My Hobbies - and now equity investment is my biggest hobby and I think I am enjoying it.

But due to the limited of time, I am using a lot of template to help me to do more thing with less time. If you interest on this, you can refer the financial statement analaysis excel template which I post in my blog - http://klse.i3investor.com/blogs/intelligent_investor_notes/57857.jsp

I don't have such skills and I prefer to play safe.

I am holding Benjamin Graham principles - "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

I prefer to perform thorough analaysis, ensure the margin of safety and aiming for a CAGR of 15%.

Hi Ckwan,

Thanks for the reply. I understand your point.

I quote you few case:-
(i) I have a friend who involve in equity investment for 2 years. He make most of his investment decision by reading the post in i3investor. He did not perform much calculations or FA analysiis. And, as of now his return his much better than my portfolio.

(ii) I have another friend who like to invest in property market 5 - 6 years ago. He and his wife take a lot of bank loans and holding a few properties. Now, they have sold some properties to settle the bank loan, and holding some of it with no debt. I believe based on today market price, it worth at least few millions.

(iii) I follow Mr. KYY's blog few months ago and know his investment story. And suprise me that he is not really perform a deep FA on his stock pick. But with his own style of investment approach - check out the company growth, buy low sell high, leverage on margin, etc... He is able to build his wealth - and, I believe his net worth is more than billion now.

Based on (i), (ii), and (iii), I never doubt that there is people able to make his fortune using his own methods (but not detail Fundamental Analysis). And, I think there is nothing wrong if they able to make money by following their own method.

Anyone will compalin for making money?

I think the price now is not attractive yet.

I think it is worth to look at the figure and understand the story it try to tell you.

Walter Schloss share with us that "We aren't too good, generally, in interpreting what managements say, assuming we get to top management rather than stockholder relations people. In thinking about how one should invest, it is important to look at you strengths and weaknesses. ...I'm not very good at judging people. So I found that it was much better to look at the figures rather than people."

Hi ckwan,

Then how you judge the company?

Hi chongket,


Graham Number is designed to quantitatively assess any stock that meets the Defensive qualitative requirements, regardless of sector or industry.


A public utility company that is typically low on Earnings will need a higher than average asset figure to justify its price.
A Financial Services company that is typically low on assets will need a higher than average Earnings figure to be an acceptable investment.

Hi Noby,

Yes. Accounting earning is subject for manipulation.

I think we can use the eps for price forecast after we perform financial statement analsyts and have confidence on the reported earnings.

Hi shinado,

Thanks. I believe this is from US market.

Hi Noby, thanks for your feedback.

After I read serenity's post. I think this formula might not be a good tools to help us to calculate the intrinsic value.

And, I think I will stick to the toolset as mentioned in my earlier post - http://intelligentinvestor8.blogspot.com/2014/08/when-should-we-click-buy-button.html

What's your opinion?

Hi Serenity, from the writeup on your post, I believe you are very familiar with graham's methodology and investment principle.

I would like to seek your comment on graham statement: "It seems logical to me that the earnings/price ratio of stocks generally should bear a relationship to bond interest rates. Viewing the matter from another angle, I should want the Dow or Standard & Poor's to return an earnings yield of at least four-thirds that on AAA bonds to give them competitive attractiveness with bond investments."

I am trying to dissect the graham formula, Intrinsic Value = Earnings x (8.5 + 2 x growth) and try to understand why graham use 8.5 as a no growth P/E.

If growth is 0, the intrtinsic value for a stock is, V = EPS x (8.5 + 2 x 0) = EPS x 8.5. And, the EY is 1/8.5 = 11.76%

Does graham consider EY of 11.76% is four-thirds on AAA bonds EY?

Hi shinado and serenitystocks,

Thanks for your link. It is useful.

Hi Cheong,

I think I need to understand what is the Risk Free Rate tha mentioned by Graham. Is the RFR is the corporate bond rate or the FD rate?

Says, the 4.4% is the Bond Rate, then we can use the bond rate in MY to adjust the 4.4%.

For graham, if growth is 0, the intrtinsic value for a stock is, V = EPS x (8.5 + 2 x 0) = EPS x 8.5. And, the EY is 1/8.5 = 11.76%

Does graham consider EY of 11.76% is four-thirds on AAA bonds EY?

Hi Noby,

Graham mentioned this "It seems logical to me that the earnings/price ratio of stocks generally should bear a relationship to bond interest rates. Viewing the matter from another angle, I should want the Dow or Standard & Poor's to return an earnings yield of at least four-thirds that on AAA bonds to give them competitive attractiveness with bond investments."

I give a second thought, and I am not sure what is the RFR mentioned by graham. Is it the FD rate or AAA bonds rate?

Do you have any idea?

Hi Shinando, thanks.

Hi Noby, thanks for reminder. The 4.4% should be RFR instead of bond rate.

Hi. Mr. Chong,

In my opinion, we should use the Malaysia Coporate Bond Rate instead of MGS. It is because the objective of the "Y" in graham formula is to adjust the 4.4% bond rate in graham time to the present. So, we need to use apple to adjust the apple.

But, I am not sure how to locate the local bond rate.

Do you know how can I get this?

Hi Noby,

The bank negara website from cheong's comment - http://www.bnm.gov.my/index.php?tpl=govtsecuritiesyield should be better source to locate MGS

Hi Noby,

I think the bond rate is higher than the FD rate. If we use the FD rate, then the intrinsic value will be slighty higher.

I think I have reply you earlier. I am not sure how to locate the local bond rate.