Posted by AyamTua > 2014-05-12 21:30 | Report Abuse

good sharing Sir!

Posted by benson911 > 2014-05-12 22:15 | Report Abuse

Same case with MEGB...

Posted by stockoperator > 2014-05-12 22:22 | Report Abuse

Very high and Doubtful Receivable. Manipulation of accounts. Not Honest.

Posted by stockoperator > 2014-05-12 22:34 | Report Abuse

after writing off the bad debt, company is in negative cash flow and negative asset position.

Posted by stockoperator > 2014-05-12 22:56 | Report Abuse

High Receivables Plus Close to zero margin Business might even suggest this is just a SHELL company.

Posted by stockoperator > 2014-05-12 23:12 | Report Abuse

I would advocate the very first criteria of stock valuation is the Business Model evaluation and people/management evaluation as you cant do Business with Dishonest people.

Posted by GenghisHoe > 2014-05-13 08:02 | Report Abuse

Hi stockoperator, nice to meet you. Mind to share your ideas as to how to evaluate the biz model and people/management? ^^

Posted by cheongcy > 2014-05-13 08:38 | Report Abuse

'KNM management is going to reward the shareholders soon with bonus issues, free warrants'. I read the same statement at Fitters financial report (can't remember which year). Bonus issue and free warrants really a reward to shareholders?

Posted by stockoperator > 2014-05-13 08:43 | Report Abuse

survey the market ask people who knows the Business especially employees/creditors /debtors and competitor for example and study the business edges and know how of Business in areas of technology or where is their market/demand or how they can get cheaper sources of input and how company manages their cost.

Posted by stockoperator > 2014-05-13 08:46 | Report Abuse

Anyway if you Really Really Really investing like an Owner on Business Perspective, you know what to look for.

Posted by stockoperator > 2014-05-13 09:07 | Report Abuse

Company offers Warrants can be rewarding as it is just an option.

Posted by bracoli > 2014-05-13 13:03 | Report Abuse

Master kc u wrote knm before .. Thanks again for remind us the punters..

Posted by ganasai > 2014-05-13 13:12 | Report Abuse

In Investing, Hope = Hopeless? but most of the shares with price now are also based on hope, so we got this kind of thing called PE. a lot of stock, PE quite high. because we "hope" in feature can earn back that amount or more?. So Hope != Hopeless. Hope is the only rule to make people buy share. Because people hope can earn in future. If Hope are based on company previous performance and the fundamental growing record, then hope is never equal to hopeless.

Posted by bracoli > 2014-05-13 13:18 | Report Abuse

Ganasai u really are shit.. Kiki jst kidding

Posted by calvintaneng > 2014-05-13 13:32 | Report Abuse

In my early days I asked a stock broker, "What is P/E?" He replied, "P/E stands for Punter's Expectation."

This same remisier was caught in early 1994 KLSE Market Collapse after the bull run of 1993. He told me he lost RM600,000 & couldn't sleep at night.

Later this same remisier learnt that P/E is Price Earning ratio and turned into a fundamental investor.

I am so thankful he shared his experience and warned me of the impending collapse of KLSE in 1997 & told me to SELL EVERYTHING AND GET OUT WHEN KLSE WAS AT ITS PEAK AT 1332 POINTS THEN. It later Collapsed to an all time low of 262 points.

And he gave me a book to read before migrating to Australia. The book is "Beating The Street" by Peter Lynch.

Posted by ganasai > 2014-05-13 13:36 | Report Abuse

if you buy share but not surelly 100% can earn, then we call it as "hope" So hope is the valid element to support the market as well as our life to continue. PE is based on hope. This stock now worth 10. But people willing pay 100 to buy it on PE 10x. Based on what?, based on hope. Can guarantee earn more than 100 later? No matter how good a company, also nobody can tell you the future.

Posted by ganasai > 2014-05-13 13:45 | Report Abuse

It is not wrong kcchongnz write this article. Ya KNM price drop really make people loss. But dont blame the company. Investing & Trading is your own responsibility. Who can think KNM got today? 199x ago, How good for KNM? At that time, it is like blue chip! Same good as kcchongnz talk about ptaras. Buy share have risk. How well you prepare, does not means the share will be your blue chip forever. So Gain or loss, is your responsibility and your capability.

Posted by stockoperator > 2014-05-13 14:33 | Report Abuse

Mr Gan Ah Sai: Nice to meet you again. Yes sometimes too many people talks about successful investing But Nobody has been taught of safeGuarding themselves for the case like KNM, MEGB, CitiBank,Enron etc.

For me Price is the single most important indicator/SafeGuard of all time as price reacts before any inside News and it should not fall more than 30% from its High. If it did, my rule is sell and I dont want to know Why.

I continuously phase out those Holdings which cant meet this single criteria during each crisis as I add on to those Holdings which continue meet this criteria and it is proven fruitful as i want to Hold Uptrend stocks either in Good time or Bad times.

Posted by ganasai > 2014-05-13 15:02 | Report Abuse

Conclusion: Hope is not the pitfall. People buy share are based on rumours/proposal (e.g can get a multi billion work project). They "Hope" the rumours/proposal become actual news (PE increase). When news proved and conducted (PE reduce), trader start sell. Who can calculate the success rate of rumours/proposal? How your math good and study how much history statistic report also cannot guarantee. So result = statistic (guarantee factor) + hope (not guarantee factor). For me, I more believe investing pitfall is due to too optimistic + no sell target price setting.

Posted by ganasai > 2014-05-13 15:12 | Report Abuse

haha, no lah, that one is just my conclusion. If no hope, that means no stock market. Hope is the only to life everything. If people can calculate the success, you still can buy the share? Everybody welcome to comment and conclude also.

Posted by stockoperator > 2014-05-13 15:17 | Report Abuse

BUT Dont hope blindly ya. Being cheated also dont know.

Posted by plumberii > 2014-05-13 15:31 | Report Abuse

My 2 cents ...

To me, getting into shares with hope is not 100% wrong. It is a question of blind hope vs educated hope. Blind hope is like following what others are doing without doing one's homework. Educated hope is investing after some extensive study of a solid, sound fundamental company and at the right price.

I do not think there is any investor who buys shares and does not hope the shares will do well later. If there is no hope, then why buy the shares?

Hope for the best! Ha.

Posted by kcchongnz > 2014-05-13 16:46 | Report Abuse

Hi Plumberii,
Where have you been? I "hope" you share with us your stocks in your Magic Formula.

You probably knows what I meant by hope in this article:

1) Hope that the leopard will change its skin and keeps on deceiving the minority shareholders
2) Hope that a company will get big tender with net profit margin>20%, instead of losses even at the operating level for years
3) Hope that it will collect all its debts amounting to billion ringgit.
4) Hope that it can convert its billion Ringgit intangible assets into real money
5) Hope that its multi hundreds of million debts will "pooh", disappears
6) Hope that its management will seriously sit down and manage the company and projects well
7) Hope that it got cash to pay salaries, working capital needs, suppliers, subcontractors etc
8) etc etc etc

I hope shareholders recover their huge losses, very soon.

Posted by stockoperator > 2014-05-13 17:13 | Report Abuse

You know there are so many version of Pyramid scheme in stock market and the manner of price drop has confirmed that. I would still say it is ONE of the SHELL company.

Posted by bracoli > 2014-05-13 20:27 | Report Abuse

Hope or not is pointless la... If we do pur homework well, at least it safeguard us from pitfall.. Lets hope najip resign better la..

Posted by AyamTua > 2014-05-14 01:22 | Report Abuse

calvintaneng In my early days I asked a stock broker, "What is P/E?" He replied, "P/E stands for Punter's Expectation."
----
let " hope" we all can make it alive in klse kikikiki . hope keeps things alive. believe in miracles. believe in second chances.

Posted by AyamTua > 2014-05-14 01:27 | Report Abuse

educated hope = justified hope! while walking on waters .. :P ha.. ha..

Posted by GenghisHoe > 2014-05-14 08:26 | Report Abuse

Thanks stockoperator!

Posted by plumberii > 2014-05-14 08:59 | Report Abuse

kcchongnz,

Hi.

Magic formula? Can't remember now. Don't think it is really magical (i.e., good) as otherwise I would be so impressed and thus able to remember it.

Using Magic Formula blindly = blind hope.

My gut feeling is, things (stock, real estate) will take a turn for the worse. Look at China's real estate now. House price index on the decline. Ditto for M'sia.

Rising inflation now + GST next year = dim hope for the next few years.

Cheerio.

Posted by stockoperator > 2014-05-14 10:51 | Report Abuse

Dear Plumberii, bad things happen all the time. It is Not important anymore to me if it ever happens OR when it happens OR how it happens. The important thing is you need to equip yourself to know the value of Business in good times and bad times ya. Economics is One issue. Remember Businessman always think differently. They really strive in good times and bad times.

Posted by stockoperator > 2014-05-14 12:29 | Report Abuse

Future Investment Return is governed by:
1.+ or -Dividend %
2.+ or -Growth %
3.+ or - Market Risk/Market Valuation/Business Risk/Business Valuation

From here I would advocate Boring High Quality Business which has good dividend yield just in case i am wrong. Well since it is very Boring Business there is not much trading activities so the price is quite reasonable most of time.

Posted by stockoperator > 2014-05-14 13:09 | Report Abuse

Surely there are lots of Absolute Valuation Method that determines the cheapness of stock in term of Margin of Safety which are most widely used among under research company probably small caps and returns are fantastic when they kept outperforming during market upswings.

WELL we have to compliment their achievement and credit for their hard work.

Posted by stockoperator > 2014-05-14 18:01 | Report Abuse

The more variables in valuation will make it more difficult such as financial risk, business risk, market risk, credit risk, earning visibility and growth prospect. As such understand the Business well enough is a prerequisite/a must.