Posted by chhngtan > Feb 9, 2016 11:09 AM | Report Abuse
Hi KC. thanks for your great article. I like it. I found there is a minor mistake in table 2 of NOPAT. table 2's NOPAT can't be the same as table 3 NOPAT because table 3 FYs are descending, whereas table 2 FYs are in ascending. thus the RR in table 2 might not accurate. thanks for your great job.

Thanks for the correction. In Table 2, I have mistakenly pasted in the future NOPAT, instead of the historical NOPAT.

I have corrected it.

This means the average reinvestment rate in the past 6 years is 183%,and not 82%. I will just maintain this RR. Somehow and eventually, the management has to keep the RR below NOPAT and do it quick. Otherwise the company has to continuously find some cash somewhere to keep its doors open.

Posted by Koon Bee > Feb 6, 2016 05:41 PM | Report Abuse
This kcchong very small heart always wanna cari pasal with KYY


Great man discusses about issues, sharing of knowledge. Only small heart man talks about personality, and attacking people.

Posted by coolinvestor > Feb 6, 2016 07:09 PM | Report Abuse

Just for curiosity sake. How come it's fCf is negative while it's cash balance is 300+ mil? Any ideas? Cheers

Cash in the balance sheet can be from financing activities, i.e. company can borrow more money from banks, or issues more shares to get cash.

Free cash flows is what is left behind after capital expenses of net inflows of cash from its core operation, and not from additional borrowings and issuance of new shares, which was precisely what V.S did.

Posted by Lee David > Feb 6, 2016 04:09 PM | Report Abuse
Hi kcchongnz. By the way, happy chinese new year. I disagree what you are talking about vs industry. This is because the example you use is unfair and unreasonable to vs industry. As all we know, Hon Hai market value is far more greater than vs industry and Hon Hai is top 1 OEM manufaturer in Asia. The example you use is something like you use bank of Amerika compare to maybank. Does it make sense?
Like what Mr koon yew yin said, we should have businessman insight.Vs industry will have more contract this year and also the tppa winner.
What I believe is the future of vs is brilliant. Therefore, i find it unfair to vs industry. Thank you!

Posted by Lee David > Feb 6, 2016 05:09 PM | Report Abuse
Thank soojinhou for ur knowledge. And how everyone think about vs industry? Do it right timw to collect?


David, happy Chinese New Year to you too. You notice what I have shared with you are all facts and figures from public information. I do not twist, or at least attempt not to twist any figure. I just shared my view and have no personal interest in this company. So I find it strange why you said it is unfair in my report.

I know nothing about the future of V.S. I have no so-called "businessman insight" of V.S. Most of all, I know nothing about how its share price will perform in the future.

Soo Jin Hou has aptly answered one part of your questions. Market leader does command a premium in valuation, as its earnings and cash flows generally are more stable and predictable, and business is more resilient.

If you believe VS will have more contracts, more importantly makes more money, a lot more the next few years than this year, and that its future is "brilliant", go ahead and invest in it. You need to have an independent mind to make extra-ordinary return from the market.

But my advice is make sure you are certain about it, with some analysis done by yourself, and not just merely believe what others, including me, said.

Ben, happy new year

Posted by hissyu2 > Feb 5, 2016 10:27 PM | Report Abuse
Sir, this counter is 101% fulfilling magic formula criteria, isn't it?

Yes, KL. If the future resembles the past.

Posted by talkcockbotakchek888 > Feb 5, 2016 11:38 AM | Report Abuse
Is it a good business? Yes
Is it undervalued? Yes
Does it pay decent dividend? Yes
Is it a growth stock? This I have reservation coz earnings have been range-bound between RM25m-30m in the past 5 years. How so coz revenue have been growing from RM1.3b in 2010 to RM1.6b in 2014?? I think this is becoz this is an ultra competitive industry (IT products are getting increasingly commoditised) and they need to sacrifice margins to maintain market share. They need a different growth strategy other than just getting the distribution rights which will never be exclusive anyway.


Growth is good. It is best if it comes free. But if I have to pay a lofty premium for it, I have second thought. One reason is this growth is an expectation in the future and it is not certain.

Imagine if a bank can give you a perpetual interest rate of say 20%, and no increase of this rate forever, meaning no growth, don't you still want to put your money there?

Posted by jfanalytic > Feb 5, 2016 04:15 PM | Report Abuse

Dear sir, based on your analysis, it seems that the current price of ECS is undervalued. However, its ROE has been slowly decreasing over the years, from 20% to 13%. What is your view on this?


You got it right. ROE started at 20% 5 years ago. It has deteriorated to 13.1% for the last financial year.

One reason is the margin contraction which is normal in any business as competition creeps in. The second reason is its cash holding increases by three times more to RM124m compared to RM30m 5 years ago. This is in fact a good sign showing the cash generating of its business.

However, a 13.1% ROE is still a good number, higher than its cost of equity.

The more appropriate metric should be the return on invested capital, which is still above 20%. The trailing twelve month ROIC of 26% is getting closer to its historic high now.

Gong Xi Fa Cai to everyone here.

May your investment be safe and sound for this new year.

I am a bit jealous of your high readership.

Well done icon888, and happy Chinese new year.

"If you want a DCF valuation, look up KCChong or LCChong (are they brothers??)"


"Over the four seas, all are brothers"


KCChong has leaarned some DCFA from LCChong before.

"I do have a CPA though (please don’t start stoning me saying that Accountants make bad investors)"

Where is the statistical significant data saying that accountants make bad investors? It is just a sweeping statement.

Accountants may not be the best investors, but having the knowledge of the business will certainly avoid losing big in the stock market.

Which is more important, making big or avoid losing big in the stock market?

I will definitely vote for the later. That should be the same for most retail investors.

Damn good analysis and a good story. Well done.

icon,

Good article.

May I add that one should also give them the proper lessons in personal finance which is not taught in school. They could easily be misled without the proper guidance.

Some of the important lessons are:

1) Work hard to earn a living. Nothing falls from sky.
2) Live within his mean
3) save and invest
4) Understand the magic of compounding
5) Beware of and avoid all the scams
6) Know how much the others are paid or benefit when giving you advice
7) Only involve in good debts, and avoid bad debts like a plague

"First-level thinking says, ‘I think the company’s earnings will fall; sell.’ Second-level thinking says, ‘I think the company’s earnings will fall less than people expect, and the pleasant surprise will lift the stock; buy.’"
Howard Marks

This is a second level thinking:

Posted by NOBY > Jan 20, 2016 11:31 AM | Report Abuse
Yes. We know that USD strengthening will impact ECS bottom line/revenue. Question is if its already priced in.

Posted by Desa20201956 > Jan 18, 2016 01:47 PM | Report Abuse
go ask Chong when he comes back.

It appears there is certain respect from you. I have decided to respect you too.

Just a minor comment here. There are tonnes and tonnes of resources in the internet. For example you can find what is enterprise value, what it means and its significance in valuation easily.

One link you can look at is here:

http://klse.i3investor.com/blogs/kcchongnz/84689.jsp

Price 13
no. of shares 5643600
MC 73366800
Total debts 24698800
Cash 8909500

Ebit 8627600

EV 89156100
EV/Ebit 10.3

Posted by Desa20201956 > Jan 18, 2016 01:03 PM | Report Abuse
KC....just for curiosity, you should finish the calculations. ...and prove me wrong. only half an hour if you are slow.
I too lazy.

Price 12
no. of shares 5643600
MC 67723200
Total debts 24698800
Cash 8909500

Ignore small MI

Ebit 8627600

EV 83512500
EV/Ebit 9.7


Now your turn to give me your tonnes and tonnes of bluechips with EV/Ebit around 5 or 6.

Posted by donfollowblindly > Jan 18, 2016 12:08 PM | Report Abuse
Those still new with KC Chong he only invest in call warrants(Maybank C6) not Maybank as he highlighted in his blogs. Hence you see so many blogs he ask people to join his course for a "fee".

Sorry to disappoint you here, donfollowblindly. Just a few percent of similar comments below. You are not qualified to join even if you have millions.


Posted by Intelligent Investor > Dec 21, 2015 08:24 PM | Report Abuse
An investment in Mr. Chong course provide me the ever best return.

Posted by coolio > Oct 22, 2015 11:58 AM | Report Abuse
I just want to take this opportunity to say thank you again because recently I have achieved 7 figure in my investing journey...hehehe.. Thanks for your investing methods, no 8 wonders in the world is really amazing!

Posted by joe2703 > Dec 21, 2015 10:22 PM | Report Abuse
An investment in knowledge pays the best interest.... I've learned so much from your online course and I made quite some good profit with the knowledge that you taught me, thank you very much and Merry X'mas!

Ch Loong27 November 2015 at 17:59
This is one of the most real life useful course i ever join!

Posted by kcchongnz > Jan 18, 2016 12:05 PM | Report Abuse X

Posted by Desa20201956 > Jan 18, 2016 11:55 AM | Report Abuse
you are the guru...you do it.

I never claim that I am the guru. I am an engineer. You are an accountant, and you claim that you can find tonnes and tonnes of blue chips in Malaysia with EV/Ebit around 5 and 6. Remember?

Posted by Desa20201956 > Jan 18, 2016 11:16 AM | Report Abuse
simply pick one....Maybank is at TTM PE of 11 times....TNB 12 X,
if PE is 12 times....we can expect EV / EBIT once you go through the calculations to be around 5 or 6.


Show us how do you arrive a EV/Ebit of TNB and Maybank to be around 5 or 6. Please.


Posted by Desa20201956 > Jan 18, 2016 03:00 AM | Report Abuse
actually if it is EV/EBIT without much growth, 8 is way too high a price to pay already.
There are tonnes and tonnes of blue chips in Malaysia and NYSE with EV/EBIT below 8.....possibly around 5 would be fair value for blue chips.

Posted by Desa20201956 > Jan 18, 2016 03:00 AM | Report Abuse
actually if it is EV/EBIT without much growth, 8 is way too high a price to pay already.
There are tonnes and tonnes of blue chips in Malaysia and NYSE with EV/EBIT below 8.....possibly around 5 would be fair value for blue chips.
is an earnings yield before interest and tax of 12.5% for blue chips an attractive proposition?
There are tonnes and tonnes of blue chips whose PE is in the range of 8 to 12.

Tonnes and tons of blue chips in Malaysia with EV/Ebit below 8?
Tonnes and tonnes of blue chips in the range of 8-12?

Most of all would like to know which are those blue chips, tonnes and tonnes of them. Please share so that we can just invest in a few.

I like to buy a good company with EV/Ebit of not more than 8.

Ebit is historical. If there is clear growth potential, I may pay higher price for it.

Posted by soojinhou > Jan 9, 2016 10:39 PM | Report Abuse
KC, I enjoyed this write up very much. Love the quotes. I currently have close to 20 stocks and am overwhelmed with the amount of work needed to monitor them. Having 30 stocks will indeed be a challenge.


"In his deep value strategies Graham recommended owning a portfolio of 30 bargain stocks to minimize the impact of single stocks falling into bankruptcy or distress, while Joel Greenblatt recommends a similar level of diversification when following his Magic Formula strategy."

Deep value strategy used by Graham and his nearest-to-pin disciple Walter Schloss were doing fund management invested in cheap stocks, mainly based on balance sheet investing. Joel Greenblatt uses quantitative investing for his funds too. They, as value farmers, do need a broad diversification imo as they do not go too deep into their analysis, but merely based on some quantitative metrics.

For us, we are retail investors with less money but more time to go into deeper individual analysis. Hence for most of us, diversify into say about 10 stocks in different industry will enjoy that free lunch in investing.

Posted by Newbhere > Jan 10, 2016 09:17 AM | Report Abuse

On WB emphasizing a lot on MoS may not be entirely true, especially with Charlie Munger encouraging him to buy stocks at their fair value like Coca Cola and others. They knew of the future potential of this stocks and the qualitative moats available which cannot be easily replicated. No fundamental ratios or even valuations will be able to detect or indicate such things especially since they are subjective in nature.

If everything is fully dependent on MoS or even a price being lower than the IV to be attractive, there will be a lot of opportunities foregone and we will not discover similar investments like what WB and CM did.


Whether you are buying a stock with future potential or not, the valuation is the same. It is based on the value of a stock depends on all future cash flows discounted to the present value, or intrinsic value.

In Coca Cola case, Munger and Buffett were able to have more accurate projection of future cash flows, which were much more than the historical cash flows at that time.

With the optimistic, but correctly done, estimate of future cash flows,the intrinsic value was high with respect to the share price then, and the MOS was high.

The basic principle is the same. But the accuracy of your projection matters. Not everyone is Buffett though.

Icon8888,

I feel a little strange that why you exclude those stocks below which can be explained away from your already small sample size.

"Of the remaining 8 stocks that the price hasn't gone up proportionate to profit growth, 7 stocks can be explained away (blue highlighted), only 1 stock cannot (yellow highlighted)."

For example,

"WTK - Before profit growth, the stock traded at high PER (backed by high net assets per share). Strong profit growth only brought PER down to a more reasonable level. As such, investors did not chase the share price up substantially."

The above exactly explains why strong profit growth is not necessary follow by share price increase (unless it is being gorenged), because this profit growth has already known by insiders and their friends that the share price has already gone up way before the announcement of strong profit growth.

Posted by mmkopis > Jan 9, 2016 02:41 PM | Report Abuse
Dear Mr. KC Chong,
Can you let me know how much a small fee for your online investment course.
May be others also interested if affordable.
Thank you very much.
sfwong

This is what the market price for just a couple of days of seminar on fundamental investing.

[Posted by Ooi Teik Bee > Jun 24, 2015 08:53 AM | Report Abuse
I was called up by a company which provide TA and FA teaching in the market, this company charged the fee > Rm 10,000 for the full course.
Mr Ooi, since you are a good friend of KC Chong, please tell him not to spoilt the market to charge so cheap in his course.
Likewise, Mr Ooi, you also should not spoilt the market too.


This is what one of my course participants said,

Posted by Atarah > Jun 5, 2015 12:30 PM | Report Abuse
I normally do not comment much now a day. Why because i have humbled myself and have start looking at the reality of myself. I have been trading for last 25 years and i look at where I am today. I did not even make more than RM 5 ringit in other Is in negative stage of return -1000% . I ask myself why ? The answers is Failure to invest in myself in especially "investment knowledge".
When KC Chong offers to teach us (me) for just a mamak nasi lemak and one teh price a day... I almost fall down off my chair. I have seek around and ask for the same teaching or guidance how much I will have to pay ? The price range from RM400 to RM2999 for two days course ok plus weekend just say 5 days course.
I am with him now for one month and the PDF teaching he sent us with assignment which I always fail to submit is so enriching. Every weeks I learns new thing and I will learns this for next 7 months before I graduate.
To cut the story short.... INVEST IN YOURSELF while you still can....
I am not promoting KC.. I am saying do not be like me .. naive and still searching .. I hope I can learns from a good guru here.... Now I have shown you and do not say I did not tell you.
All the best.
Atarah

Great article icon, like usual.

I love the last part the most here. Thank you very much.

"Email both Ooi Teik Bee and KC Chong now to register for their courses. They are waiting for you."

It is the best advertisement for me. You know it is not easy to try to propagate fundamental value investing in Bursa.

To reciprocate your kindness, I am going to write one article, hopefully by to-night to talk about my perception of fundamental value investing, which is very different from your perspective of value investing.

I have every reason to appreciate you but none at all to "shoot" you. You are a great contributor in i3investor.

I believe you are receptive of different opinion, just like me.

"谢谢" again.

Posted by Kukuman > Jan 4, 2016 12:47 AM | Report Abuse

Now you are talking about 2 years ago article. but you quoted someone analysis which you said was on 2015 Aug 3.

"Recently, I have received a recommendation from a fund manager and professional analyst to buy KNM at 57 sen on August 3 2015 as below. Oh my God, haven’t we gone through that before many times in the 1990s"

I will mark this comment of yours ! If KNM really go up, you should apologize and stop promoting yourself by running down on someone analysis.

Admit it ! that is your SOP! You are a person who like to promote yourself by finding fault on someone's analysis.


I have a report on recommendation to buy KNM at 57 sen dated August 3 2015, which is 5 months ago.From August 3 2015 to January 3 2016, as I have counted,is 5 months, certainly not two years.

If you do not have the report, of course you do not have, then how to you come to your conclusion of the report is two years ago?

If KNM really go up, I should apologize?

What logic is that?

I have made constructive and negative criticisms on many reports, which the prices have gone up. So every time I must apologize for giving my opinion on the sharing of what I think is about the company business?

And you consider sharing a different opinion about investment as promoting myself by running down others?

What kind of mentality do you have?

Posted by Tan KW > Jan 5, 2016 11:11 PM | Report Abuse
very good wo, 3/20 from yr2015 top 20 is kc students....
(NOBY, II, soojinhou)
http://klse.i3investor.com/blogs/stock_pick_2016/89039.jsp
@kcchongnz, do you want to share yr pick for reference?

Tan KW, remember when you first initiated the so-called challenge in i3investor in 2013, there were only two entries. I didn't look at them as "challenge", but merely sharing of investing strategies.

I came up with a portfolio of 10 stocks in each occasion, one in January 2013 and the other in August 2013. Remember how much time and effort was needed with all the detail analysis, not only the Magic Formula, but also discount cash flow analysis. A selection of one stock may take a couple of days in research of the business, analysis, and another day writing the report and thesis.

This time, because of personal reasons, I do not have that kind luxury to do it. So, sorry, I don't have anything to share right at the moment, and it is meaningless to me to simply give you a few shares without proper justifications. Most probably, the shares I am going to share do not suit the kind of 'challenge" going on. And if I have any, I will be duplicating some of them here. Hence there is nothing new from me.

What about my own investment? Don't I have new shares to invest in? of course I have, and I have been doing reasonably well. That is because I don't have to do it all by myself now.

I have been following the analysis of my previous course participants, and they are actually better than me now.

Enjoy yourself and have fun in the stock pick challenge 2016. I am also enjoying it by looking through those recommendations and make some investment based on them.

Posted by Kukuman > Jan 2, 2016 10:51 PM | Report Abuse
I noticed this chap like to run down on other analyst's report and promote himself as a better one. what an idiot !


This article is about sharing about how to avoid losses in the share market by knowing the characteristics of lemons so that investors can avoid. It is critical about some analyst reports no doubt, but I did provide with my arguments.

This article was first written 2 years ago, and if those speculators in those stocks would have avoided heavy losses, for example, Hibiscus a loss of 88%, CSL -83%, Asia Media 80%, MPCorp 67% etc. Even if punters cared to heed my concern in KNM and not chase its price when it went up to RM1.00, they would have also avoided heavy losses.

So i think there are many who appreciate my sharing.

Remember when you set up a thread trying to gossip about some contributors in i3investors including me which could put us in bad light? Talking about people? Rather discussing about subjects?

You did not manage to demean us. No one badmouth us. You failed.

Idiot me?

So genius, what is so smart of you? Please list down your smartness and contribution here.

Posted by ks55 > Jan 2, 2016 09:43 PM | Report Abuse
Hi kcchongnz. Happy New Year to you, and pray hard you will achieve even better return for the Year of the Monkey King.
Just wonder if you care to share your opinion on Parkson Holding Berhad.

ks55, I really don't know many stocks in Bursa, including Parkson. It used to be a growth stock before the US subprime crisis. But since the cool down of China economy, its business has been deteriorating.

However,a not good stock may not be a bad investment. You have actually told me about this when you speculate on Kheesan, or LonBis. At RM1.01 now, I seriously think the downside for Parkson is limited.

Looking at its last two years financials, it has been making operating profit, except went to losses the last one quarter. Its balance sheet is healthy with net asset backing per share of RM2.73. Even its tangible asset per share is more than RM1.00. Besides it is in a net cash position.

It used to be having good cash flows too.

The steep drop of the share may be due to personal reason, the problem with its major shareholder, but may not because of the company.

Posted by Humpreyliew > Jan 2, 2016 09:20 PM | Report Abuse
Even when KC Chong was wrong, he keep repeating the same VS articles
http://klse.i3investor.com/blogs/kcchongnz/83784.jsp
http://klse.i3investor.com/blogs/kcchongnz/80998.jsp
http://klse.i3investor.com/blogs/kcchongnz/77938.jsp
http://klse.i3investor.com/blogs/kcchongnz/77884.jsp
http://klse.i3investor.com/blogs/kcchongnz/77720.jsp
http://klse.i3investor.com/blogs/kcchongnz/77274.jsp
http://klse.i3investor.com/blogs/kcchongnz/77138.jsp
http://klse.i3investor.com/blogs/kcchongnz/76875.jsp

Can you tell me specifically what is wrong with my analysis based on the financial statements?

Posted by donfollowblindly > Jan 2, 2016 09:09 PM | Report Abuse
Humpreyliew I agree with you. If KC Chong so good and always make high return as he "claim" he must be very rich. Why still want people to join his course for "a fee". He should give it free like KYY and even donate some of his wealth.

Thanks for your comment in my thread. I like comments, whatever it is. That is what a writer usually looks for.

I must repeat (yes it is boring) that you always follow blindly without understanding what I try to convey to you in my articles.

I did say the return of investment following some core principles in fundamental investing does provide good return, and more of reducing risks. I didn't "claim" of "always making high return" as there were published records in i3investor. It may disappoint you that the records exist, but I can't help you that.

I have never "claim" to be rich, not I yearn to be very rich, and I am not motivated to be very rich. I also do not idolize very rich people, unlike you. We are different, aren't we?

"Want people to join for a fee"?

This is what I have learned too, wise words:

Posted by Hierarch Artanis > Jan 2, 2016 09:42 PM | Report Abuse
If you're good at something, never do it for free.

People don't appreciate free things. Just like you here, do you appreciate some good lessons on how to avoid losing money in the stock market here, even though i have written so many times before?

I share about investing principles and methodologies, what to look for and how to avoid lemons. It is all about issues, things, subjects.

Sadly, you only know how to make personal attack without any substance.

What is your point here? I_like_dividend,donfollowblindly, or not-truthseeker679 or some other funny names



Posted by donfollowblindly > Jan 1, 2016 04:30 AM | Report Abuse

So if read KC Chong blogs who is anti bank borrowing meaning he can't borrow type?

Posted by donfollowblindly > Jan 1, 2016 04:25 AM | Report Abuse X

we have so many big companies in Malaysia that have big cash pile but they also borrow big monies......nobody do business without bank loans......either you don't know how to do business or you can't borrow.........

Happy new year my friend Leno

happy new year 2016 for all the visitors and commentators here.

Posted by paperplane2016 > Dec 31, 2015 02:05 PM | Report Abuse

KCChongnz, can you help us there to understand what is Sharpe ratio? And how to calculate it in simply way? I want to understand more on this area. High return, not necessary a good high risk reward return.
This will help differentiate a good fund mgr, and a bad one according to risk taken.
Thanks

Posted by leno > Dec 31, 2015 02:17 PM | Report Abuse
sharpe ratio is easy moozy onli ... for eg. PMCOrp NA 52 sen ... share price 26 sen , sharpe ratio is 52:26 = 2 ... anything above 1 is good ... anything is 2 is excellent. Excellent mean High Untung, zero risk.


Everyday learn new thing!

paperplane, icon8888 is right. There are huge amount of resources in the net regarding this apa ini Sharpe Ratio.

I am actually quite good at this apa ini Sharpe Ratio, Treynor ratio, Jensen alpha and whatnot.

But my opinion is don't bother about these ratios. They are blunt, not sharp.

It is much better to learn ebit enterprise ratio, cash ratio, ROE, ROIC and other ratios.

Posted by necro > Dec 30, 2015 06:20 PM | Report Abuse

Kcchong mind share your opinion on Ayam Tua favorite counter

NTPM


necro,

NTPM is a good company. It is listed in my first portfolio posted in i3investor in January 2013.

You just have to check if its price is right. One way to do it is to try to do some simple valuation based on my article here:

http://klse.i3investor.com/blogs/kcchongnz/67260.jsp

Posted by Newbhere > Dec 30, 2015 11:56 AM | Report Abuse
Mr Chong, just ignore the noise and continue writing and educating people. Hope to see more "new" materials from you.

Hi Newbhere, thanks for your comment. I remember you. Good that you are no more "annoyed" by my straight-to-the-point, "you-believe-as-sacastic" comments. I mean no malice.

When I write an article, I like when people read, and comment, whether it is for or against. We deliberate, argue about subject, not name calling and personal attack. If you are sarcastic, I can be too,but I just take it as some fun. I just don't take this personally. It is better than to get angry about it. It is just that sometimes our human nature, it is hard to control anger such as when people call you "stupid", "bullshit" etc. without basis.

So please comment, even it is against what I write. I will still appreciate.

"New" Material?

In fundamental investing, it is evergreen, in my opinion; buying good stuff at reasonable or better still cheap price, or buying mediocre stuff at cheap price. Good fundamental investing follow a few core principles as I have been writing about. If you read some of those investment books, they talk about the same principles and methodologies over and over again.

Sound boring? That is sound investment, in my opinion.

May be you refer to "new" as new stocks recommendation?

Sorry, I have no tips.

Posted by leno > Dec 29, 2015 09:49 PM | Report Abuse

hahahah ... kcc is learning ... kcc wan to learn mar ... must let him learn ... right lesson wrong lesson is still learning something mar ... u so clever why u no become rich leh ...


What kind of "panlai" statement is above?

Posted by Desa20201956 > Dec 29, 2015 10:18 PM | Report Abuse

love that...better than a ratio

<Soros, do u know just now at 4pm++ when sifu said he "planning to gonin" BHS...immediately BHS share price shoot from 0.51 to 0.53...after 10 minutes he said the planning called off, the price immediately drop back to 0.51...our sifu really super keng>


I wish to withdraw my statement below in the article. It was a wrong judgment of mine.


[Newbies? Which newbie you are talking about? In my opinion, the following commentator in my previous thread knows a lot than many here with his highly knowledgeable and constructive comments,



Posted by Desa20201956 > Dec 28, 2015 09:30 PM | Report Abuse

“Ratios hardly help in this respect.....but insider information and deep understanding of the company and its environment will do the trick.

But the best buys are those companies with a good business model, good management and good figures. and you can buy it at a decent price....or in the words of KYY, profits increasing Q by Q and still below PE 10.”]

Posted by paperplane2016 > Dec 30, 2015 01:23 PM | Report Abuse

Kc, you are wrong on Bjcorp!
It is holding company of all its clans. So it should be applied 25% discount for holding company?
But then its assets is really good and undervalued deeply.

NTA 1.60, now mkt price RM0.38.

Doesn't this apply as graham undervalued stocks? Using strictly VALUE Investing, this is a hell of a buy for Graham, just like KUCHAI, PRKCorp, FACBIND, etc.

YOu can judge a stock using your perception tht VT is a questionalble mgt. This is not how GRAHAM teach us.


paperplane, ys you are right, I may be wrong about BJCorp as I have said, I don't know about it, but I don't want to invest in it for the reasons given by me. Hence I didn't spend time on it.

But bear in mind of a couple of comments

1) What is the normalized earnings you get to obtain the PE ratio? A one-time gain in asset disposal must be excluded.

2) Its net asset backing per share may be high, but you need to check its net tangible asset backing per share if you want to look at asset to invest.

Posted by alivetoinvest > Dec 30, 2015 11:37 AM | Report Abuse

Hi Kc Chong

May i know your oppinion of Bjcorp as it has a pe of only 1.78?
It would really really help many investors if you could provide some insights.

Thanks


Don't know much about Bjcorp. I normally go far far away from this type of stock; huge assets and huge debts, multi and complicated business, questionable management and major shareholders, opaque, all kinds of related party transactions etc.

I have been questioning the E in the PE ratio. A glance at its financial statement shows one-time off item makes up its major "profit", hence the poor operation cash flow.

One may be tempted to invest based on its seemingly high NTA. Alas, most of its assets is made up of "intangible".

Posted by rosetan > Dec 30, 2015 09:34 AM | Report Abuse
kcchong, i would rather that you just share the facts and leave emotion out. It mars your professionalism.

Rose,

Thanks for your comment. But is there any emotion about my article? Isn't it healthy to discuss about the merits and shortcomings of various philosophies, methodologies, strategies about investing which the article is about, instead of talking about who is rich or poor, and who is stupid or clever, good or bad?

Posted by koonbee9 > Dec 29, 2015 09:20 PM | Report Abuse
I give up your method la kcchong, i prefer icon8888 and uncle kyy method

As I have said, i respect your method. So i wish you reciprocate too. by the way,it is definitely a good way of investing following icon8888. I agree.

koonbee9,

Thanks for your feedback.i will consider your suggestions, definitely.

Posted by bluefun > Dec 27, 2015 05:54 PM | Report Abuse
I like to read KC Chong article, to learn the fundamental analysis, thank you KC, merry Christmas and happy new year

bluefun, you make my day. Not many like my articles as you can see.

Posted by koonbee9 > Dec 27, 2015 05:32 PM | Report Abuse

I prefer to read icon8888 and uncle Kyy article...both article benefit me

I like icon8888's articles too. the other one don't forget is YiStock

Posted by Genw > Dec 27, 2015 12:36 PM | Report Abuse
thanks for your reply kcchongnz. may i know what's the formual of Excess Cash that you are using?

Look at its non-cash net working capital. If positive, you may take the whole lot of cash in the balance sheet as excess cash. Or you may reserve a couple of percentage as part of the working capital requirement.

It is really an art.