One more time here. Why the hell you want to convert and just throw away the valuable time value of close to 5 years?

Secondly if you want the special dividend, it is already too late for you to do the conversion as the ex-date is just a few more days on 3/10/13. Ask a remisier to confirm this.

calvin is very convincing. Most of the things one can check himself from the financial statements. Not bullshit or just shout for nothing. Those you can't, he also present them very convincingly.

There is all the upside potential for PMCorp, little or none downside. I have added some into my portfolio.

Yeah something like that. so how can you go wrong when you pay 17.5 sen and get 18.5 sen cash, plus other non cash assets?

Important thing is make sure PMCorp is not burning cash each year. Last two years it did in a small way.

If what calvin say is true about the special dividend, its small but profitable chocolate business etc, PMCorp is definite a good bet with little downside risk.

calvin, how did you get PMCorp "cash position" of 18.5 sen?

Its latest balance sheet as at 30/6/13 shows it has cash of 94m, and a total liability of 15.5m. Total number of shares is 773m. So net cash is (94-15.5)/773 = 0.10 or 10 sen.

This does nor include its investment of 82m though.

Sang-jero,
I think this case of PM Corp you should follow the stories of calvin rather than your chart if you are interested.

This case in the Graham net-net cigarets bud investing. The net cash backing per share less all liabilities alone is 10 sen per share. Its investments in quoted and unquoted shares another 11 sen. So the absolute minimum value of PMCorp should be 21 sen per share.

Note here I have ignores all its other assets in receivables, inventories, PPE etc.

So what calvin mentioned of the deeply undervalue of PMCorp I agree with him absolutely. If what other things mentioned by calvin is true, which I believe so far by reading what he wrote, htere is high probability of making good money in this share.

Posted by SANG-JERO > Sep 25, 2013 03:11 PM | Report Abuse
I post a simple technical question and Mr.Calvin cannot answer...hmmm...something very fishy here....

SANG-JERO
Calvin, this counter is over bought....RSI 77.778.......dangerous level for any investor to go in.......and you are doing hard selling.......please address...cheers..
24/09/2013 11:40


uhm, very good to do your homework first before following others to buy any stocks.

But but but must everyone invests like you do, RSI, TA etc? Is your method the holy grail in stock market investment?

Posted by kakijudi > Sep 24, 2013 07:26 PM | Report Abuse
It's not luck. It's smart speculation. Ever heard of behavioural finance.

Behavioral finance? This is behavioral finance.

http://myinvestingnotes.blogspot.co.nz/

scjm3, thanks for your response. Actually I started buying LBS on 5th August 2013 at 1.47. I switched to LBS warrant at 73 sen on 18th September in view of the attractiveness of warrant as an investment compared to the underlying share. Please read my post again why I said so.

So your view is a good confirmation of what I thought about LBS after reading through a research paper about its sales of its China land some time ago. It is good to have your view rather than just the analyst view because investment banks have their own agenda different from retail investors like you and me. I actually put more value on your view than that of IB.

Since you are so confident about LBS, really, the warrant is much more attractive as an alternative way to invest in LBS. I said invest, not trade. Because you talk about trading, it can be manipulated by insiders and syndicates.

Warrant is a derivative financial instrument which derives its value from the underlying share price. The only uncertainty is if LBS share worth the value you are talking about, 2.00, 2.50? If you are very positive about it, there is no more other doubt about the attractiveness in investing in LBS warrant.

So scjm3, are you confident about LBS share price? I am actually relying on you on this.

You won't entitle to this 8 sen dividend. It is already ex-dated. If for future dividend, when the time comes, then consider. Generally it is foolish to convert to the underlying share when there is still so long to expiry. The benefit of the dividend, if any in the near future, cannot compared to the valuable time value of a few years.

inwest88, why did you sell MMode?

miketku, why do you want to convert? You are losing heaps in the time value. You have 5 years of time value. You can convert any time before expiry when it favours you to convert. No rational person will convert at this situation.

You better consult your remisier.

But this 8 sen dividend is termed "special dividend", not just normal dividend. Why no adjustment to exercise price?

OTB, thanks for the clarifications.

Sometimes I see there is adjustment to the warrant price for special dividend, for example the recent Kulim Wc exercise price adjustment after the special dividend of 95 sen for Kulim.

Could you enlighten us if there is a threshold for the adjustment, any guideline from Bursa, or is it company specific?

No wonder you are a experienced sifu. Yes the 8 sen dividend ex-dated next week would adjust the underlying share price down by the same amount of dividend. So actually LBS at 1.91 and Wa at 87 sen means there is a premium of 4 sen. But considering the warrant has a long expiry date, the 4 sen premium is still very very cheap.

This is the type of comment everyone welcomed, even for those who are very gung-ho about LBS Wa because many of them won't realize this. High dividend kills the value of options; whether it is company warrants or call warrants. I am very surprised in another threads when forumers raise up some concerns which are very useful but opposite of their views, they were treated as bashing others and scorned.

This 8 sen dividend is a special dividend. Anybody knows if the exercise price will be adjusted?

May be a person in the industry, like Ooi Teik Bee can Provide some light here.

Posted by scjm3 > Sep 26, 2013 12:06 AM | Report Abuse
wow i have not given a thought on the conversion factor. this approach is very feasible and offers a much better returns, i must said. i should give it a serious consideration thank you although i have decided not to dabble with warrant ever again. you know, if only you have joined this thread a little bit earlier when the price is around rm1.70, i would not have any reservation and plunged straight in for a simple reason that the gain to be made would be much meaty and the highly improbable downside risk was very low.
i am very comfortable with the rm2.00 target to the extent that i even ventured to say that it is as good as a done deal. rm2.50 is mentioned as an immediate response to the query raised by fabregas on the possibility of it hitting rm3.00.

SCJM3, I DID WRITE SOMETHING ABOUT LBS WA WHEN LBS WAS AT 1.71 AND WA AT 75 SEN JUST ABOUT A WEEK AGO AS SHOWN BELOW IN THE FOLLOWING THREAD IN I3:

http://klse.i3investor.com/servlets/forum/900396884.jsp

AT THAT TIME, WA WAS TRADED AT A SMALL PREMIUM OF 2.3%. SINCE THEN LBS HAS RISEN BY 20 SEN, OR 11.7%. HOWEVER WA HAS RISEN BY SLIGHTLY MORE BY 13.3% TO 85 SEN NOW. WA DID NOT RISE HIGHER BECAUSE OF ITS GEARING OF 2.3 TIMES THEN AS I EXPECTED AS IT IS SWITCHING FROM A PREMIUM OF 2.3% THEN TO A DISCOUNT OF 3.1%. THIS MEANS WA IS EVEN MORE ATTRACTIVE TO INVEST IN NOW THAN THE UNDERLYING SHARE NOW THAN A WEEK AGO.

SURE NOTHING IS 100% CERTAIN. IF LBA SHARE PRICE GOES SOUTH, INVESTORS OF WA WILL LOSE MORE THAN THE UNDERLYING SHARE. BUT IT IS HOW CONFIDENT YOU ARE IN THE SHARE PRICE OF LBS IN THE FUTURE, AND IF YOUR ANTICIPATION OF ITS RISE COMES THROUGH, YOU WILL DEFINITELY MAKE MORE MONEY IN INVESTING IN WA. DON'T YOU AGREE?


Posted by kcchongnz > Sep 18, 2013 11:38 AM | Report Abuse X

LBS Warrant, Wa (180913)

LBS Warrant A is trading at 75 sen while the underlying share is at RM1.71now on 18 September 2013. It has an exercise price of RM 1.00 and the expiry date is on 11th June 2018, or in about 5 years time. The warrant is hence in-the-money with an intrinsic value of 71cents (1.71-1.00). However if you buy Wa at the price now of 75 sen now, you pay a premium of 4.0 sen, or a premium of just 2.3% [(0.75+1.00)/1.71-1]. This premium is low and moreover, there is a gearing of 2.3 times for Wa. Hence Wa appears to be a good alternative in investing in the business of LBS.

The theoretical value of warrant depends on the price of the underlying share, the exercise price, time to expiry, its volatility, the risk-free rate; in that order of importance. The Black-Scholes option pricing model, using a historical volatility of 25%, risk free rate of 3.5%, dividend yield of 1.2% and LBS’s price now at 1.71 shows that the warrant has a theoretical value of 80.5 sen, or 7.5% above its present price of 75 sen.

The following Table 1 shows the settlement price of Wa with respect to the share price of the underlying asset. If LBS goes up to RM 2.50 (a gain of 46%), the settlement price of the warrant is RM 1.51 for a gain of 100%, more than twice that of if you invest in the underlying share. If the share price of LBS stay put at 1.71 at the expiry of Wa, one loses 7%. If the share price of LBS slips below 1.00, the exercise price, buyers lose everything.

The question you have to ask yourself is, What do you think is the direction of the share price of LBS before the expiry of Wa in 5 years time?’

Table 1:
LBS 1.00 1.71 1.80 2.00 2.50 3.00
Wa 0.00 0.62 0.80 1.05 1.51 1.97
gain/loss -100% -5% 7% 33% 100% 167%

My personal opinion is Wa offers a better investing opportunity because of its low premium with some gearing . It also has quite a long time before expiry.

Questions:
1) Which director, the managing director, or other directors?
2) The MD is employed to manage the business, why should he "push up the share price"?
3) The other directors (Basirs)are major shareholders through a private company which has been buying up the shares of Kfima regularly. Why should they "push up the share price"? So that they buy high?
4) Concentrating in FimaCorp's business isn't concentrate on Kfima's business?

LBS warrant A, Wa has an exercise price of 1.00 and expire in slightly less than 5 years time on 11 June 2018. At today’s close of LBS and Wa at 1.91 and 85 sen respectively, Wa is trading at a discount of 3.1%. This means buyers of Wa today got a discount plus a free time value. Let us try to fathom what is the benefit of buying Wa instead of LBS if you are bullish of the company.

Let say I have RM19,100 which I intend to invest in the business of LBS. Instead of buying 10,000 shares of LBS, I use the same amount of money to buy Wa instead. I will be able to buy 22470 (19100/0.85) shares of Wa at 85 sen.

Then I send in Wa for conversion with RM22470 to get 22470 shares of LBS. After getting the converted share back, I sell in the market at RM1.91, assuming the share price stays at RM1.91. The proceed I get is RM42920 (22470*1.91) and my total cost is RM41571 (19100+22470). I make RM1348, in about two weeks.

But why do I want to send Wa for conversion when there is still close to 5 years before Wa expire? There is plenty of time value in Wa. So I wait.

Let say LBS share price goes up to scjm3’s TP of RM2.50 in one year time. Then only I send Wa for conversion. I will make RM14606 (76.5%) instead of RM5900 (31%)if you hold LBS. That is because of the leverage of 2.2 times with Wa.

Of course leverage cuts both sides. If LBS drops to RM1.50 and I have to convert Wa and sell, I would lose RM7865 (41.2%) compared to RM4100 (21%) if I hold LBS shares.

Table below shows the gain/loss for Wa wrt to the share price of LBS upon conversion of Wa. So as you are bullish about LBS, it pays better to invest in its warrant.

LBS 1.50 1.91 2.50 3.00
% gain -21% 0% 31% 57%

Wa -41.2% 7.1% 76.5% 135.3%

Hey scjm3, you seem to know a lot about LBS and bullish about its company prospect and its share price. good on you.

But instead of buying LBS, why not buy its warrants as it is trading at a discount of 2.1% when the underlying and warrant share price is at 1.88 and 84 sen respectively? Some more there is a gearing of 2.1 times.

Posted by kakijudi > Sep 24, 2013 07:26 PM | Report Abuse
It's not luck. It's smart speculation. Ever heard of behavioural finance.

I accumulated mpcorp 6 months ago, when iskandar play was at its peak. Did you know I went through all the listed property companies 1 by 1 in search if potential iskandar play? Did you know I bought luster at 0.105 8 moths ago in anticipation of a goreng when it's 25% new shares with free warrants are listed. Did you know I bought bimb-cc at 0.13 and sold at 0.41 when I saw potential in its mother share. Did you know that I bought supermx-cm recently at 0.09 and sold at 0.21 when I saw that USDMYR has risen to 3.33 and supermx was still a laggard after all its peers has shot up?

I can guarantee you that all this is not luck. I just do my homework. Ok now get back to investing in your Dutch lady and BAT

UHM, THESE STOCKS MUST BE THE BEST STOCKS YOU HAVE INVESTED IN AND PROVIDED YOU WITH THE BEST RETURNS. I MUST FIND PROBE IN DETAILS TO DISCOVER THIS HOLY GRAIL OF MAKING MONEY IN THE STOCK MARKET.
YOU BOUGHT LUSTER AT 10.5 SEN, BUT NOW ITS PRICE IS 9.5 SEN. OOP, I FORGOT YOU SOLD AT THE PEAK BASING ON THE PERFECT TIMING FROM YOUR CHART AT 24 SEN 3-4 MONTHS LATER. SO YOU MADE 129%. THEN FOR YOUR BIMB CC AND SUPERMAX BOUGHT AND SOLD PRICES, YOU MADE 215% AND 133% RESPECTIVELY. YOU BOUGHT MPCORP AT AN AVERAGE PRICE OF 33 SEN AND YOU ARE STILL HOLDING THEM AT 51.5 SEN. SO PAPER GAIN IN MPCORP IS 56%. SO FROM THESE BEST STOCKS, THE AVERAGE % GAIN IS 133%.

OH SORRY THESE ARE NOT YOUR ONLY STOCKS, YOU STILL HAVE OTHER BETTER ONES WHICH YOU BOUGHT AND SOLD, BOGUHT AND SOLD, AND MADE UP THE TOAL 700% GAIN LAST YEAR. ALL HUGE WINNERS, ABSOLUTELY NO LOSERS.
WELL DONE AGAIN. THAT IS WHY I SAID I WISH I COULD BE LIKE YOU (NOT SOUR GRAPE), SO LUCKY. OOP, SORRY SO SKILLFUL

OTB never make any sarcastic remark like you do.

By the way, I don't have to cover anything I wrote. I also don't have to defend anything as you know (or may be you probably don't know), finance and investment is an art. And everybody doesn't think alike too.

But if you wish to discuss with me about finance and investment in constructive manner, I am always ready.

Yeah, that is why one should not follow blindly. Do your homework.

It appears to me the "chart book" is his book with the charts of the share price and the intrinsic value of the stock. If the share price is above the fair value, the share is overvalued.

In US, there is capital gain tax. So you pay gain on stocks as well as claim back losses. So at the end of the year, the funds will sell off the loss making stocks, especially those small capitalized stocks, to claim tax deduction for losses. They sell the small cap stock because the fund managers do not want investors to blame them on losses in small cap stocks, whereas losses in big cap stocks is ok because everybody owes them and nobody will blame you on that.

So come January, they will buy back the small cap stocks because small cap stocks historically have been providing them with better return; and hence the anomaly of The January Effect.

Posted by 0bucks > Sep 24, 2013 10:29 PM | Report Abuse
i have net loss of -35% in year 2010-current . :)
I can make loss even at the very bull market. I guess this is also very hard to achieve for anyone

OBUCKS, BELIEVE ME, YOU ARE NOT IN THE LOWEST RUNK AS SHOWN BY THE FOLLOWING ACADEMIC RESEARCH BELOW.

[In their 2009 paper on “option trading and individual investor performance” , Rob Bauer, Mathijs Casemans and Piet Eichholtz examine the performance and persistence of individual investors trading at a Dutch online broker. Using a database consisting of more than 68,000 accounts and eight million trades in stocks during January 2000 to March 2006, they find that: During 2000-2006, the average investor has negative alphas, meaning the return is below the market return. Not even the top tenth of performance manages to beat the market consistently. Those in the bottom tenth of performance lose more than 90% of value.]

BY NEVER MIND LAH. IMPORTANT THING IS YOU MUST REALIZE WHAT YOUR MISTAKES ARE AND DON’T REPEAT IT TO AVOID FALLING INTO THE SAME PREDICAMENT AGAIN. GOOD LUCK TO YOU.

“You know ... you keep doing the same things and you keep getting the same result over and over again.” Warren Buffet

Posted by calvintaneng > Sep 24, 2013 09:20 PM | Report Abuse
Kakijudi could you recommend some books on behavioral finance? Sounds like emotional intelligence.

IS THERE A NEW BOOK OR ACADEMIC RESEARCH PAPER ON BEHAVIORAL FINANCE BY DANIEL KAHNEMAN, AMOS TVERSKY AND OTHERS ON BEHAVIOURAL FINANCE?
WAH GOT BOOKS ON EMOTIONAL INTELLIGENCE ALSO AH?

Posted by kcchongnz > Sep 24, 2013 08:22 PM | Report Abuse X
Posted by sense maker > Sep 24, 2013 07:36 PM | Report Abuse
In the past 3 years, a good investor should net about 30% to 40% return over his total principal.

Sense maker, your above statement makes no sense one. Who wants 30% to 40% for the past three years?

Posted by kakijudi > Sep 24, 2013 07:26 PM | Report Abuse
It's not luck. It's smart speculation. Ever heard of behavioural finance.
I can guarantee you that all this is not luck. I just do my homework. Ok now get back to investing in your Dutch lady and BAT

WHEN I POSTED ABOVE, I WAS JUST TALKING IN JEST. 30%-40% RETURN OVER 3 YEARS IS ABOUT THE TOTAL RETURN OF BURSA OVER THE PAST THREE YEARS. IF A RETAIL INVESTOR CAN MATCH THAT PERFORMANCE, I THINK HE HAS DONE PRETTY WELL AS HE WOULD HAVE BEATEN MORE THAN 80% OF THE INDIVIDUAL INVESTOR OVER THE SAME PERIOD. YEAH THIS IS ACHIEVED BY INVESTING STOCKS LIKE DUTCH BABY, BAT ETC AS MENTIONED BY KAKIJUDI.

BUT NOW YOU MAKE ME FEEL LIKE SOUR GRAPE BY POSTING THE BELOW. ARE YOU SURE YOU MAKE SENSE WITH THIS STATEMMENT?

Posted by sense maker > Sep 25, 2013 12:21 AM | Report Abuse
Kcchongnz, I meant 30% to 40% profit on total investment principal amount each year for the past 3 years should be the yard stick to measure against for a good investor.

I MANAGED TO MEET YOUR BENCHMARK OF 30%-40% FOR ONE YEAR RETURN ONLY. HOWEVER I FAILED AGAINST YOUR BENCHMARK MISERABLY FOR THE 2 AND 3 YEAR RETURN. FOR EXAMPLE FOR THE 3-YEAR COMPOUNDED ANNUAL RETURN, I ONLY MANAGED 22% A YEAR. I THOUGHT I WAS VERY LUCKY ALREADY WHEN I BEAT THE BROAD MARKET BY AN EXCESS RETURN OF 15% AND THE BEST FUND OUT OF HUNDREDS OF THEM INVESTED IN BURSA, PHILIP CAPITAL GROWTH FUND, AS SHOWN IN THE TABLE BELOW. BUT TOO BAD LOSE TO YOU.

Year 1 3 5
My Average Portfolio CAR 44.2% 22.01% 27.7%
KLSE CAR 10.9% 7.1% 11.9%
Unit trust, ave CAR 15.20% 12.10% 11.70%
Unit trust Max CAR 28.50% 22.00% 20.80%

Posted by alwong1111 > Sep 24, 2013 11:21 PM | Report Abuse
kakaka, thats what I say the sexmaker always jump the gun with his prejudiced stance. .....
Please note while it is the old saying of innocent until proven guilty, the stock market investors practise a different approach once a key man or men of Lii Hen is nabbed, it is "Shoot First Ask Later". All those with the Lii Hen shares in hands will be lame hen instead!

Posted by alwong1111 > Sep 25, 2013 01:17 AM | Report Abuse
Please don't get personal.


Please carry on the discussion. I sold of my Lii Hen shares some time ago reading the 2004 sagas in i3 because i treat management credibility the most important. Just contemplating if want to reenter as its share price has dropped quite substantially.

But I think like you say, "don't get personal" and changed others sensible name to "sexmaker", not good.

Alex, that is why you can never make 700% a year return.

[Ok now get back to investing in your Dutch lady and BAT]and get your return in 26 years!

Posted by kakijudi > Sep 24, 2013 07:19 PM | Report Abuse
Of course you can. If you compound your current gains of 8% per annum, in another 26 years you can achieve it. Lol

Posted by sense maker > Sep 24, 2013 07:36 PM | Report Abuse
In the past 3 years, a good investor should net about 30% to 40% return over his total principal.

Sense maker, your above statement makes no sense one. Who wants 30% to 40% for the past three years?

[Ok now get back to investing in your Dutch lady and BAT]

Alex, why you believe in the stupid Edge magazine? I read this from a finance journal below also useless one. Bluff people one!

[In their 2009 paper on “option trading and individual investor performance” , Rob Bauer, Mathijs Casemans and Piet Eichholtz examine the performance and persistence of individual investors trading at a Dutch online broker. Using a database consisting of more than 68,000 accounts and eight million trades in stocks during January 2000 to March 2006, they find that: During 2000-2006, the average investor has negative alphas, meaning the return is below the market return. Not even the top tenth of performance manages to beat the market consistently. Those in the bottom tenth of performance lose more than 90% of value.]

cindy cat? Does it bite? does it scratch? Oh sorry, deviate a little bit from MP Corp

Posted by kakijudi > Sep 24, 2013 07:26 PM | Report Abuse
It's not luck. It's smart speculation. Ever heard of behavioural finance.

Posted by kakijudi > Sep 24, 2013 07:48 PM | Report Abuse
I think luck plays a huge role in my case.

So kakijudi, which is which?

Sorry kakijudi, I really don't doubt you making that kind of money. I just want to bring forward a point that in speculation in the stock market, people got to know that luck plays a very important role. It happened that you were right in your speculation.

I don't think I was wrong to say that 90% of speculators in the stock market lost money.

Don't tell me you are investing and not speculating.

That is why i said I wish i could be like you. You achieve in a year what I can do in 26 years. Well done!

Then again I think it is fat hope for me. For your kind of luck is probably 5% chance, or even less.

Congratulation kakijudi. Oh how I wish I can be like you!

Posted by calvintaneng > Sep 24, 2013 05:56 PM | Report Abuse
To All My Fellow Investors, I think kcchongnz's comments are very sensible. We hope to get around 10% to 12% gain a year by investing in stock market. You must be an exceptional genius to get 50% gain a year.

ME; CALVIN, WHY YOU AIM FOR SO LITTLE RETURN? SEE HOW MUCH OUR FRIEND KAKIJUDI MADE LAST YEAR.

Posted by kakijudi > Sep 24, 2013 06:18 PM | Report Abuse
Sorry fundamentals not my style haha. I'm more of a trader, using technicals and behavioural finance. I made 700% last year. Small base though

KAKIJUDI IS ONE OF THE GREATEST INVESTORS IN MODERN TIME. HE OUT-PERFORMED WARREN BUFFET BY 30 TIMES! WARREN BUFFET'S BERKSHIRE HATHAWAY SHARE WENT UP FROM $7455 TO $173540 FROM 1990 TO THE PRESENT, FOR A COMPOUNDED ANNUAL GROWTH OF 25% A YEAR. THAT IS THE BEST PERFORMER IN MODERN TIME UNTIL KAKIJUDI EMERGED. BERKSHIRE HATHAWAY PERFORMANCE WAS ONLY 5.2% A YEAR SINCE 5 YEARS AGO.

The mathematics of discount cash flow analysis is exact. If I were to use the last year's growth in earnings of 23% for the next 5 years, and a required return of 10%, the intrinsic value of Zhulian will be RM6.40.

Alas, I don't have a crystal ball and I won't know its future growth rate. to me if a company can compound its growth rate of 15%, that is already very liberal, and I won't use that rate to justify my buying or even holding of a stock.

Zhulian has a compounded annual growth rate of 10% for the last 5 years. In my opinion, if it can sustain that kind of growth rate every year for the next 5 years, it is already quite a feat.

The high growth rate of a company cannot carry on forever. it eventually will slow down because of many factors; size, competitions, economic cycle etc.

The 3.40 intrinsic value was based on an estimate growth rate of 8 percent. However last year growth in earnings was much better at about 20 percent. However, I don't use such a high growth rate for estimation of intrinsic value. If I revise the rate to 10 percent, zhulian at 3.82 is already fully valued.

So it all depend on what is the expected growth rate, something which we cannot see but just guess. If zhulian earnings can continue to grow at 20 percent, for the next 5 years, something which I won't bet on, it is worth much more.

Including dividend yield, anybody who has bought Zhulian a year ago would have made at least 45%.

I posted the following comments in the Kfima thread less than a year ago. Since then it has gone up by 39%. Is Zhulian overvalued now at RM3.82?

Posted by kcchongnz > Oct 19, 2012 01:45 PM | Report Abuse X
NZ,Is Zhulain a great company? Absolutely.
Zhulian's financial performance, balance sheet and cash flows are absolutely awesome. I did a detail analysis and made a valuation of Zhulian on 27/7/12 when it was 2.17. It has now gone up 27% to 2.75 now. Is it still a good investment at this price? Absolutely in my opinion. My discount free cash flows of owner's earnings using conservative assumption of 8% growth for the next 5 years and 3% thereafter with a discount rate of 10% shows the intrinsic value of Zhulian at 3.40, still another 24% upside. Well done NZ.

Bear in mind that the intrinsic value changes when the business changes in term of growth in revenue and earnings.

That is right. Long term investors in Marco is ok because business ok and dividend also ok. Don't think you can win by trading because laduk won't fry the share for you to make money.

The activity of Marco and its warrants is controlled by one man, that laduk. When he wants Marco or its warrants up, they will up, and vice verse. So if you wish that laduk to fry the share and make money for you, you must be able to read his mind. Otherwise hope lady luck makes you beat laduk in this game.

Great discussions. Carry on please.

曾经心痛

http://www.youtube.com/watch?v=Go92DhuaY7o

gark, three sen down, panic selling? Are you sure it is caused by that news? Because like you said, that news is "stupid".

I personally think it is a good public relation exercise for Kumpulan Fima as MSWG takes interest in Kfima, like what Pradeep said. This is not because their profit dropped in first quarter 2014, that is nothing. No company in history have their profit keeps on increasing quarter after quarter, year after year. But the trend of their profit is stellar. So what is there to "query"?

However, Kfima management never do any PR job. It doesn't mean that I, as a shareholder, think they should always do this PR thingy and jack up the share price. I would prefer them to concentrate to do their business well like what they have been doing and the share price will follow suit.

Yes, if one looks at the performance of Kfima in the past, say 5 years, you will see their performance is nothing short of fantastic in terms of earnings, efficiencies in terms of ROE, ROIC, margins etc. I have talked about them at length (may be too much until it is boring) in this thread:

http://klse.i3investor.com/blogs/stock_pick_challenge_2013_2h/34118.jsp

Of course more important is, is there shareholder value enhancement? In this respect, I would also rate it as fantastic too.

Look at the table below how the growth in book value and dividend for the past 5 years:

Year 2013 2012 2011 2010 2009 Total
Book value growth 0.19 0.31 0.23 0.25 0.13 1.13
Dividend 0.08 0.08 0.07 0.05 0.03 0.31
Book value growth plus dividend 0.27 0.39 0.30 0.30 0.16 1.44

If one has bought Kfima 5 years ago at less than RM1.00, its total book value plus dividend has grown by almost 1.5 times to RM1.44, or for a compounded annual growth rate of 20%.

Joel Greenblat, a well known fund manager in the US has been using his magic formula for many years in the more efficient market and earn extra-ordinary return for his fund. The magic formula just based on buying good companies (in term of ROIC) at cheap price (earnings yield), a sensible and simple concept.

Yes the magic formula bases on historical data on ROIC and earnings yield last year. Yes, there are many problems with historical data. Yes, we must be forward looking and not backward looking (forecast the future and not looking at the rear view mirror).

But why does the magic formula, basing on historical data, out-performed the market by so much? Watch the video of value investing, courtesy of Tan KW.

Take for example LBS warrant now. LBS is at 1.85 and Wa at 82 sen. conversion price is 1.00. It has five more years to expire. Hence it is trading at a discount of 1.6%. Even if LBS share price never go any higher, I still make money when convert to LBS share and sell at expiry. But there is still 5 more years to go. Some more a gearing of 2.3 times. What is the probability that LBS will never go higher than the present price within this long 5 years? So I see the chance of positive return is high and hence I bet/invest in it.

Take for example another warrant expiring in 3 months time with a premium of 20%. but rumours that somebody going to take over at what price what price. Or the chart is how beautiful that it will shot up 50% in a short while, and the crowd is chasing the warrant now. Will I buy? NO, the probability of winning is low. I don't know if those rumours will come true etc.

Okokok, I might be off the track.

But buying company warrants can be investing. You buy company warrant with less outlay than the underlying share. Eventually you can convert to the underlying share.

Call warrant is punting. It is a short duration option settled with cash.

I am saying for both of the above, for me there is a process of evaluating what is the probability of winning. I don't follow the crowd in both cases.

When I invest in a stock, I must know their business, how is it performing, is it giving good return of capital, earnings good and it the quality of earnings good with good cash flow. Then if its price is reasonable or good? So far my way serves me very well.

I don't listen to what other tell me because I have been there before. Even the CEO, MD, CFO of a company told me to buy their stocks yet I got conned. Years ago I also have lost money listened and followed people to buy this and that and also almost all the time lost money. I don't look at chart to trade because I am investing, not trading or speculating. How many retail investors can beat the insiders, syndicates, investment bankers with the big computers with their charts?

Similarly, when I invest in company warrants or punt in call warrants, I must know if it is cheap in terms of premium, how long to expire, how volatile is the underlying, what gearing etc. At least I know what chance I have in this bet.

Yes, a lot of the things I look at are history. But I have no idea about their future anyway. I have no idea what other people say the company's land worth how much how much is true or not. But i see company losing money every year, law suit at hand, cash calling imminent, questionable management and even the land worth how much how much, whether the minority will enjoy it or not.

Remember what I have stressing, I am investing, not trading or speculating. Though I punt call warrants, I punt with some basis and hopefully with higher probability of winning.

"it is about something which are deviated from the books & also the estimation formulas regarding the warrants. why it behaves that way ?"

Why would I bother to think too much of the above statement? I told you I am not a crowd follower, didn't I?

I thought this is a good discussion.

Posted by anbz > Sep 22, 2013 11:10 PM | Report Abuse
weird... a guy that likes to use 'moron' word repeatedly to others...is ok?

anbz, no, this is of course not ok. But the way I read him, he is a young and hot blooded man. He was actually provoked. Why do I think so?

In all his posts, JCool didn't carry out personal attack. He just wanted to "advise" me not to publish any report of stocks because may be he looked very up on me (just kidding here), that he afraid that others will lose money blindly following my posts (no, I never recommend). Or if I do, I must put a disclaimer. Nothing personal, just his strong feeling.

This is unlike some who carry out personal attacks and without any damn proof at all. Accusing others bullshit, copy and paste, cheating, con people repeatedly. Those behaviors of personal attacks are not ok. don't you agree?