Posted by joseph hii > 2013-11-03 22:51 | Report Abuse

Well done. Need learn from u

Posted by tjhldg > 2013-11-03 23:21 | Report Abuse

good

Posted by joseph2321 > 2013-11-04 12:43 | Report Abuse

excellent

Posted by joe2703 > 2013-11-19 13:01 | Report Abuse

Wow! I missed Dsonic & Ptaras because of limited capital. But the stock pick was good! 30% in just 3 months! Fantastic! Thanks Kcchongnz!!

Posted by wayneteo > 2013-11-28 14:32 | Report Abuse

great portfolio~! Thanks for always sharing your investment knowledge with i3 members.

Posted by kcchongnz > 2013-11-29 19:43 | Report Abuse

Exactly four months have passed since we first started our portfolios. May be it is time to review the monthly performance of our portfolios now.

In this four months, KLCI has risen from 1773 to 1813, or 2.3%. But how have our portfolios performed?

kcchongnz's portfolio of 11 stocks has gained a capital appreciation of 32.9% in the last four months as shown in the link below.

http://klse.i3investor.com/servlets/pfs/21089.jsp

With dividend amounts to about RM1700, or 1.7% received in the period, the total return of the portfolio is 34.6%. That means the portfolio has returned an alpha of 32.3% using the KLCI as a benchmark. All the eleven stocks, including dividends, made positive return with eight of them in double digit percentage. They are Datasonic (178.3%), Fibon (73.4%), Pintaras (14.3%), Homeritz (40%), Willowglen (38.5%), CBIP (19.6%), MFCB (10.5%) and Daiman (25.4%).

The outlier is the rule breaker Datasonic with a return of 178.3%, something which I have never expected to be truthful. Even if we ignore this outlier, the total return is still well above 20% in this four month period.

What about Ooi Teik Bee's portfolio return?

Ooi Teik Bee's portfolio of 10 stocks returned a respectable 15.1% in the four months perriod, or an alpha of 12.8%. There are equal number of winners and losers. Its big gainers are all warrants, some leveraged instruments. They are Hap Seng warrant (91.7%), LBS W (50%), Punchak warrant (44.1%). It has a couple of double digit losers through Lii Hen (-10.8%) and Triple at -26%.

The performance of both the portfolio exceeds the return of the broad market by a wide double digit margin in the last four months. The performance of each portfolio may not be comparable as one portfolio was constructed using fundamental analysis for long term investing, whereas the other used technical analysis and may involve frequent trading.

KC Chong (29 November 2013)

Posted by Ooi Teik Bee > 2013-11-29 19:51 | Report Abuse

Dear Kcchongnz,

Congra !! Good job done. You are the Great.
Thank you.

Posted by yungshen1 > 2013-11-29 22:08 | Report Abuse

kcchongnz u are my superstar.i should lusten to u.

Posted by kcchongnz > 2013-11-30 16:09 | Report Abuse

Prestariang

“Only after you understand the business can you understand the stock.”

Prestariang has reported its 3nd quarter 2013 results ending 30 September 2013. Its revenue basically remained unchanged but net profit jumped by 21% compared to the corresponding quarter the previous year. This was achieved through higher contribution from its ICT training. For the trailing twelve months, Prestariang’s revenue and net income increase by 3% and 12% to RM113.2m and RM41.7m respectively. It continues to secure new contracts especially in the oil and gas training programmes for the government as well as the private sector.

Prestariang is an asset light company with low capital intensity. It has plenty of excess cash amounting to 52m and negligible debt in its balance sheet. Hence it earns very high return on invested capital of 150%. It has ample cash flow from operations and free cash flow (FCF), something I like the most about a company. Last year, FCF was 38.4m, or 35% of its revenue. FCF amounts to 17.4 sen per share. It is a cash generating machine.

Despite its fantastic operating performance and cash flows, at RM2.60, it is trading at an undemanding PE ratio of just 13, and market enterprise value of approximately the same value.

Prestariang consistently pays a dividend of about 3 sen a quarter and it is expected to pay a total dividend of 12 sen this year, or a dividend yield of 4%. This yield is higher than the fixed deposit rate from the bank. This payout ratio is less than 60%. Hence it has retained a healthy amount of earnings for capital expenses intended for growth in the future.

Its education arm UniMy, a new university college is still running at a small loss presently. It would soon begin to contribute to its top and bottom line. Once that happens on top of its highly profitable ICT training and software distribution business, Prestariang revenue and earnings will be elevated to the next level.

For the above, I have added more of Prestariang as a stock in our portfolio at RM2.50. this price is more than what I paid about a year ago.

KC Chong in Auckland (30/11/13)

Posted by inwest88 > 2013-11-30 17:08 | Report Abuse

# kcchong - I have never never doubted you of your competence on stock selections.

Posted by inwest88 > 2013-11-30 17:09 | Report Abuse

# yungshen 1 - allow me to say, if you have followed kcchongnz's views, probably you would have cleared your KNM (no offence meant).

Posted by kcchongnz > 2013-12-03 06:28 | Report Abuse

Is the stock market efficient?

If you go and study finance in University, there is a major topic in the Efficient Market Hypothesis (EMH)and the Capital Asset Pricing Model(CAPM).

The Efficient Market Hypothesis (EMH) and Capital Asset Pricing Model (CAPM) postulate that in an efficient capital market, current market price reflects all available information about a security and the expected return based upon this price is consistent with its risk. As a result, it is impossible for an investor to consistently beat the market and profit from it.

Let us look at another Bursa portfolio by a blogger, Bursa Dummy here:

Core Portfolio
Stocks Average Latest G/L (%)
TAMBUN 0.77 1.42 84.4

Satellite Portfolio
Stocks Average Latest G/L (%)
GTRONIC 2.43 3.15 29.6
INARI 0.73 1.54 111.0
LATITUD 1.49 1.55 4.0
MATRIX 2.86 3.22 11.8
PANTECH 0.98 0.99 1.0
SCIENTEX 5.47 5.61 2.6
TAMBUN-WA free 0.81 n/a
TROP 1.89 1.34 -29.1
YOCB 0.69 0.87 26.1

http://bursadummy.blogspot.co.nz/2013/12/my-portfolio-nov13.html

His portfolio of 10 stocks yield a total return of 53.5% as compared to about 2.5% of the KLSE from July to end of November 2013. He has none of his stock similar to anyone of mine.

Sure he may be lucky from the huge gain from a couple of outliers too in Inary (+111%) and Tambun (+84.4%), and he also has one big loss in Tropicana (-29%). Anyway he has just this one in the negative territory and another under-performer in Pantect (+1%). But does anybody knows anybody who can get all their stocks picking right? I would say this portfolio produces results none other than, excellent.

Is his portfolio risky and hence explanation of the good results by EMH and CAPM? Academic wise I don't see many of his stocks are having high beta, a measure of volatility against the market in CAMP, except may be Inary, Tambun(?). All of his stocks are fundamental stocks with good earnings, balance sheet and cash flows. So why risky?

So is the market really efficient, especially in Bursa?

Posted by houseofordos > 2013-12-03 07:54 | Report Abuse

kc I am curious if you constantly maintain 100% invested in stock market ? How much cash do you reserve in case the market turns and you want to take oppurtunity to buy on weakness ? Surely some market timing element is involved here in planning the allocation of cash to stocks ?

Posted by kcchongnz > 2013-12-03 17:52 | Report Abuse

According to the Modern Portfolio Theory, it's possible to construct a optimal investment portfolio offering the maximum possible expected return for a given level of risk, or equivalently minimum risk for a given level of expected return, with a combination of cash holding. Harry Markowitz won a Nobel Prize out of his theory. In actual investing, it is also intuitive to have some cash in the portfolio as a financial risk management.

No, I do not follow this theory although it is a Nobel Prize winner. In actual fact i learned a lot about financial theories but most of the time I don't agree with the theories.

I have a fixed amount of money invested in the stocks. So if I have found some more very good stocks to invest in, I can get money “outside” of this invested sum to buy it. But most probably, I will sell off some not-so-attractive-anymore stocks in the portfolio to get money to buy the new and more attractive one.

I don’t put all my money in the stock market no matter how attractive the market is. You will never know if there is a sudden turn for the worse because of some black swan event. I must have readily cash to survive for a few years without having to force sell my stocks.

Posted by tsurukame > 2013-12-03 18:46 | Report Abuse

kcchongnz,
I agree with you that it is better to be conservatively safe than sorry in investment decision...I would assume that you allocated 20% to 30% of initial investment capital in cash investments (FDs) and the balance portfolio in core investment stocks where the selection criteria are based on graham net net intrinsic valuation , EV or Gordon growth.

The main reason you held on to these Investment stocks besides the capital appreciation is that these stocks provide higher dividend yields relative to fixed deposit rates...You will dispose these stocks once its market price exceeds the intrinsic valuations or you find a new stock with much better intrinsic valuation with better margin of safety..

Graham net net , EV, Gordon will give different values based on assumed mandatory input info for stock valuation....however risk profile varies across industry types, among stock investors...

What is the basis of your decision to select investment stocks and to dispose invested stocks ....which values will you use assuming the stock price appreciates and nears the upper price limit..and which of the three upper limit valuations (graham, EV,Gordon) has the over riding decision on targeted stock disposal and new stock selection?

In essence...Which valuation methodology will be the governing criteria in stock disposal and stock selection....what are the mandatory artful input info to utilize in arriving at valuations..

Thanks for your advise on the above..

Posted by kcchongnz > 2013-12-03 18:55 | Report Abuse

Each valuation method is suitable for a particular type of company. I don't use Graham net net valuation for company like Prestariang, Datasonic, JobStreet etc because they are basically asset light company but make high earnings and cash flow. For them I will use discount cash flows methods. PMCorp type of company has negligible earnings at the present moment and hence earnings based such as private market comparable valuations, DCFM are not suitable. Of course unless you can estimate its future earnings with confidence. Some companies have a lot of cash in the balance sheet and good amount of cash flows but may not earn much earnings may be suitable to use Gordon dividend growth model if the dividend is stable and growing. Some companies like Daiman, Plenitude, Gromutual have a lot of quality assets but also steady earnings and cash flow. So you can use many methods to counter-check, such as net-net, DCFM, EV/Ebit etc.

Whatever method you use, you will get the estimated intrinsic value. Make sure the right method is used. Buy if the price is way below the intrinsic value, say 30% or more; and sell if the price rises close to intrinsic value, or if you need money to buy other better stocks.

That is my personal preference.

Posted by houseofordos > 2013-12-03 19:16 | Report Abuse

I have a fixed amount of money invested in the stocks. So if I have found some more very good stocks to invest in, I can get money “outside” of this invested sum to buy it.

KC, from this statement sounds like you have a bottomless pit of cash to always able to take advantage of market :) haha... just kidding... unfortunately my situation is not the same and I m struggling to decide how much I should stay invested due to my limited resources... ideally want to be like Seth Klarman who can garner 20% return annually even while holding 50% cash haha...

Posted by tsurukame > 2013-12-03 20:51 | Report Abuse

Thanks KC for your valued advice.

Posted by kcchongnz > 2013-12-04 12:44 | Report Abuse

Is Bursa efficient?

The Efficient Market Hypothesis (EMH) and Capital Asset Pricing Model (CAPM) postulate that in an efficient capital market, current market price reflects all available information about a security and the expected return based upon this price is consistent with its risk. As a result, it is impossible for an investor to consistently beat the market and profit from it.

Let us look at another Bursa portfolio by a blogger, felicity here:

http://www.intellecpoint.com/p/position.html

His fund was set up about two and a half years ago. He invests based on fundamental analysis searching for good business model and willing to pay reasonable prices for them.

The total return of his fund now is 229% since then, beating the KLCI by 8 times a year. Are his spicks risky and hence the high return? I don't think so.

Posted by houseofordos > 2013-12-04 13:27 | Report Abuse

kc, my opinion is that some markets are more efficient than others. I suppose in US market is more mature and there is information readily available everywhere market becomes more efficient. However I agree with you that in general there is always some inefficiency which we retailers could benefit from. The inefficiency I m talking about will mainly exist in the smaller cap stocks which go unnoticed by the fund managers due to restrictions for them to invest in such low cap stocks.

Posted by kcchongnz > 2013-12-04 17:09 | Report Abuse

Is Bursa efficient?

Still not satisfied? Here is another portfolio with reference date on 18/1/2013. As I can see, this is another portfolio selected based on fundamental analysis.

Public Watchlist: The Edge 2013: 10 offbeat dividend-paying stocks

http://klse.i3investor.com/servlets/pfs/13154pub.jsp

The average return of the stocks is 39.5% in less than a year, against KLSE of 8.7% of the same period. The alpha of this portfolio is 30.9%.

Reference date 18/01/2013 4/12/2013
Stock Name Ref Price Price now Change %change
Pantech 0.78 0.97 0.190 24.4%
Mediac 1.16 0.91 -0.250 -21.6%
Ireka 0.64 1.02 0.385 60.6%
Apollo 3.29 5.37 2.080 63.2%
NHFatt 2.35 2.93 0.580 24.7%
Deleum 1.98 4.23 2.250 113.6%
Oldtown 2.26 2.45 0.190 8.4%
Takaful 5.8 10.42 4.620 79.7%
LafMsia 9.7 9.83 0.130 1.3%
Gasmsia 2.66 3.75 1.090 41.0%

Average return xxxx xxxx xxxx 39.5%
KLSE 1676 1821 145 8.7%
Alpha xxxx xxxx xxxx 30.9%

Posted by kcchongnz > 2013-12-05 06:50 | Report Abuse

Is Bursa efficient? Experience of a top regional equity fund manager, Nomura International.

Posted by houseofordos > Dec 4, 2013 01:27 PM | Report Abuse
kc, my opinion is that some markets are more efficient than others. I suppose in US market is more mature and there is information readily available everywhere market becomes more efficient. However I agree with you that in general there is always some inefficiency which we retailers could benefit from. The inefficiency I m talking about will mainly exist in the smaller cap stocks which go unnoticed by the fund managers due to restrictions for them to invest in such low cap stocks.

Let us look at a portfolio of Malaysian stocks picked by Nomura for 2013 on 18/12/2012 here:

http://klse.i3investor.com/servlets/pfs/12379pub.jsp

The stocks are the favorite of most fund managers. They are mostly the big capitalized stocks in Bursa. Most funds own them. All stocks are closely followed by many analysts and investment bankers. Tons of research papers. Closely followed by equity trackers etc. And what is the return of the portfolio to date?

The average return of the stocks in the portfolio is just 7.7% as shown in the table appended. Assuming the prices do not include any dividend, the total return is about 10%. That is exactly the return of KLSE from the same period.

If you don't do something different from the crowd, it is impossible for you to earn extraordinary return. Of course you must be right.

Reference date 18/12/2012 4/12/2013
Stock Name Ref Price Price now Change %change
DIGI 5.04 4.86 -0.180 -3.6%
TM 5.85 5.3 -0.550 -9.4%
Axiata 6.58 6.72 0.140 2.1%
PBB 16.00 18.38 2.380 14.9%
Maybank 9.04 9.88 0.840 9.3%
Sime 9.13 9.5 0.370 4.1%
AirAsia 2.61 2.45 -0.160 -6.1%
WCT 2.35 2.29 -0.060 -2.6%
SKPetro 2.97 4.39 1.420 47.8%
CIMB 7.6 7.67 0.070 0.9%
Genm 3.54 4.15 0.610 17.2%
Media 2.230 2.65 0.420 18.8%
MMCorp 2.650 2.82 0.170 6.4%

Average return xxxx xxxx xxxx 7.7%
dividend xxxx xxxx xxxx 2.3%
Total xxxx xxxx xxxx 10.0%

KLSE 1659 1822 163 9.8%

Posted by houseofordos > 2013-12-05 09:08 | Report Abuse

Most of these EMH proponents will advise you to invest in index link funds which just track market performance since they believe u cant beat the market. On the plus side its hassle free n if u can live with these type of returns n still meet ur goals then its still ok.

Posted by kcchongnz > 2013-12-10 19:53 | Report Abuse

Why diversification in a stock portfolio?

The popular adage of "Don't put all your eggs in one basket" is very much suited for investing in the stock market. It advocates diversification, a technique that reduces risk by allocating investments in a number of stocks in the portfolio. Ideally the stocks chosen should be spread over different industries that would each react differently to the same event.

For example, the portfolio of 11 stocks here consists of companies of different industries; they are construction (Pintaras), Trading and Services (Kumpulan Fima, MFCB), Consumer (Haio, Homeritz), Industrial (Fibon, CBIP, Tien Wah), Technology (Willowglen, Datasonic), and Property (Daiman). Even within each industry, the stocks there are also lowly correlated. For example for the three stocks in the Industrial category, Fibon is in advanced polymer matrix fiber composites and electrical insulators, enclosures and meter boards; CBIP in palm oil equipment and retrofitting special purpose vehicles; and Tien Wah in printing works.

Stocks diversification won’t ensure gains or guarantee against losses but strives to smooth out unsystematic risks of companies in a portfolio which are not perfectly correlated so that the positive performance of some companies will neutralize the negative performance of others.

Kumpulan Fima, one of the eleven stocks in my portfolio here was my most favoured stock. It is still my favourite now. If I were to put all my money in this stock four months ago, I would only obtain a meagre return of just 1.32% as on 11 December 2013, way under-performed the broad market. With the diversification into the eleven stocks, my return now is 32%, out-performed the market with an alpha of closed to 30% in the last four months with some luck factors.

Modern Portfolio Theory by the Nobel Laureate Harry Markowitz has shown that when you have stocks that have low correlations together in a portfolio, you may be able to get more return while taking on the same level of risk, or the same returns with less risk. The less correlated the assets are in your portfolio, the more efficient the trade-off between risk and return.

Studies and mathematical models have shown that maintaining a well-diversified portfolio of about 20 stocks will yield the most cost-effective level of risk reduction as shown in the figure below.

This principle of stock diversification will continue to guide me in my stock selection in 2014.

Posted by ycchuah > 2013-12-20 18:44 | Report Abuse

Please share if you have new stock to target for coming year 2014. Thank you.
Merry Christmas and Happy New Year.

Posted by kcchongnz > 2013-12-31 20:39 | Report Abuse

Tan KW, you have not included the dividends received in that period. It is ok. I have done that in my review of the return of this portfolio in the other thread.

Happy new year

Posted by bursamalaysia > 2014-01-01 12:24 | Report Abuse

value investing seldom fail the investor but trading do

Posted by Ntpboon > 2014-01-01 16:34 | Report Abuse

像我这种小投资者如果不是在i3forum这平台上看到那些讨论，跟本无法，也不会买到像DSONIC这种股票。在这里要特别感谢Kcchongnz先生与各位大师无私的分享。希望新的一年能看到更多建设性的讨论。祝各位新年进步，股市庆丰收！

Posted by kcchongnz > 2014-04-11 06:42 | Report Abuse

Haio, what happened?

Posted by Kevin Tan > Apr 10, 2014 05:33 PM | Report Abuse
holding at 2.68 sice aug 2013, incurring losses 10%, should i cut loss?

Posted by ccs999 > Apr 10, 2014 07:43 PM | Report Abuse
may be kcchongz can advise here. Thanks.


All the 11 stocks in this portfolio, except for Haio, made positive return in this 10-month period. The other under-performer is Tien Wah which made a return of only 3%, below the return of the broad market. The return of the portfolio is 73.5% as shown.

Yes, the reason that Haio's share price under-performed is due to its financial results of the last twelve months. But is there anything seriously wrong about its results? I don't think so.

Its trailing twelve month revenue remains largely unchanged, but a drop of profits of just about 7%. With the focus on small ticket items, I believe its MLM will continue to do ok in the future.

At RM2.43, it is inexpensive with a prospective PE of just about 12 and 8 times ebit. Don't forget it is an asset light business with high return of capitals of about 40%.

I have sold all my Haio shares though quite some time ago. This is not because I have negative outlook for Haio, but for fund for other stocks which I think may be better value. It just happened that I have made a right decision

No, there is nothing wrong with Haio absolutely, in my opinion.

Posted by kcchongnz > 2014-04-11 18:42 | Report Abuse

Posted by Tan KW > Apr 11, 2014 05:44 PM | Report Abuse
@kcchongnz, mind to share what is the other stock that have better value?

"Beauty is in the eye of the beholder". there are hundreds of stocks in Bursa and I am sure there are many better stocks than mine.

Just for sharing purpose, I have concentrated my portfolio to a few stocks; Pintaras, Kfima, and Prestariang in that order since a few months ago. Other than that, i have another 7 stocks to make up a diversified portfolio of about 10 stocks, plus a few of company warrants and call warrants.

If you read my blogs summarize in the appended link below, although they are more for educational purpose, you will know my investing philosophies and preference.

http://klse.i3investor.com/jsp/blog/blallpost.jsp?blid=1286

Posted by kcchongnz > 2014-04-12 10:50 | Report Abuse

Posted by Tan KW > Apr 11, 2014 08:06 PM | Report Abuse

i think this link is your blog dashboard that you perform the blog posting.... are you referring to http://klse.i3investor.com/blogs/kcchongnz/blidx.jsp instead?

Yeah, TanKW, your link is the one I referred to.

Seems like many people are interested in fundamental investing.

Posted by 爱丽斯 梦幻世界 > 2014-04-12 12:19 | Report Abuse

Super performance portfolio! Very supprise me again coz non of eleven ctr above that I hv invest!

Posted by kasake > 2014-08-04 21:43 | Report Abuse

太神了，哪接下来有哪些股可以在未来1年内有〉20%成长？

Posted by Newbiees > 2015-02-09 20:38 | Report Abuse

可以教我如何投资股票吗？

Posted by kcchongnz > 2015-02-09 21:04 | Report Abuse

Posted by Newbiees > Feb 9, 2015 08:38 PM | Report Abuse

可以教我如何投资股票吗？

Can of course. I am giving online finance and investment course for a small fees. So if you are interested, let me know.

Posted by Newbiees > 2015-02-10 03:36 | Report Abuse

I got interested. how much? How to contact you? Tq