Posted by stockoperator > 2014-10-23 12:38 | Report Abuse

KC the problem is lots of analyst just take the current year of earning or prospective earning of next two years as the Basis of Valuation. It is a very shallow valuation.

We all know current earning or speculative earning will manipulate the PE ratio in wide range. That is how they justify the valuation and they even skip the Balance sheet and cash flow and Business operation or debt ratio.

Posted by ganasai > 2014-10-23 12:48 | Report Abuse

hi stockoperator, enough already loh.if rapid project success, what also enough loh. But success or project is future thing, mainly is get the project first. kakaka.... Then, who care the later story..... kakaka....... Dont think too much.

Posted by ganasai > 2014-10-23 12:51 | Report Abuse

they already foresee get the project in next 2 years should not be a problem. Price should able to fly. then how to operate that project is another continue story. Who care too much. Understand?

Posted by ganasai > 2014-10-23 12:55 | Report Abuse

kcchong always promote this ptaras. I do not deny this is a good stock. Quite correct he promotes. But how about another 10 years? Dont forget knm also a bluechip in long long time ago. So dont foresee too far. kakaka....

Posted by sunztzhe > 2014-10-23 13:14 | Report Abuse

kcchong, ganasai, frank soweto, stockoperator
I am rather intrigued by your discussion. It appears that everyone has their favorite stocks to make money. To cut a long story short and to test your future capability of stock selection and be accountable for your stock buy decision, would all of you please select two stocks each which all of you think will outperform up to 31 Dec 2015. You can select and buy any two stocks from Oct 1st 2014 till 31/10/2014 and you can sell anytime or hold till 31st December 2015 as long as you are satisfied with the profits or lack of profits. Lets fix the investment capital to RM 10,000 for each participant.

So please advise the following:
kcchong- what is your stock selected? Uchitec, Tongher?
ganasai- what is your stock selected n buy in price? I assume its KNM, BJCORP unless u advise me otherwise
frank Soweto- what is your stock selected and your buy in price? stock 1, stock 2??
stockoperator- what is your stock selected and buy in price? Is it Padini, other??

Posted by ganasai > 2014-10-23 13:22 | Report Abuse

Haha i wont join. Because my knowledge and analysis skill still poor. But i just want to say something where i see this salt fish may got chance alive. But long or price will maintain i not sure. But rapid project may be turnaround for them.

Posted by sunztzhe > 2014-10-23 13:31 | Report Abuse

ganasai, whatever skill you have, it is still your own skill right? Please remember that 75% of the sifu's and stock investment experts got it wrong and it had been proven. So do reconsider your decision. So can I put down your stocks as BJCORP and KNM??

Posted by ganasai > 2014-10-23 13:54 | Report Abuse

Hope he can reply in this forum, so that all we know he based on what fact to analyze. For me, haha follow big fish move loh. Seems like banks and EPF quite active in this knm, So.... just dance together loh.

Posted by ganasai > 2014-10-23 13:58 | Report Abuse

haha sunztzhe, no point for that. Better we still follow forum topic and discuss. What I talk here may not for long term like those promote by kcchong.

Posted by kcchongnz > 2014-10-23 14:41 | Report Abuse

Posted by ganasai > Oct 23, 2014 12:55 PM | Report Abuse
kcchong always promote this ptaras. I do not deny this is a good stock. Quite correct he promotes. But how about another 10 years? Dont forget knm also a bluechip in long long time ago. So dont foresee too far. kakaka....

I never promote any stock in i3. I do analysis of company and share my views here.

Firstly good companies no need huha huha in this kind of forums. Their value lies in their business, not promotion by anyone.

Secondly I seriously doubt there is any clout here to jack up the price of stocks. All of us combined is just kuching kurat compared to the insiders, syndicate players, manipulators,institutional investors etc.

Posted by sosfinance > 2014-10-23 15:37 | Report Abuse

Good Write Up kcchongnz. There are tonnes of Lemons in Malaysia to avoid. Stick with the High ROE, High Growth, High Margin, Good Management, Sustainable Biz, Reasonable PE. As long as we get 7 out of 10, I believe, it is not bad.

Posted by kcchongnz > 2014-10-23 15:44 | Report Abuse

Posted by sosfinance > Oct 23, 2014 03:37 PM | Report Abuse
Good Write Up kcchongnz. There are tonnes of Lemons in Malaysia to avoid. Stick with the High ROE, High Growth, High Margin, Good Management, Sustainable Biz, Reasonable PE. As long as we get 7 out of 10, I believe, it is not bad.

Well said sosfinance

Posted by kcchongnz > 2014-10-23 15:57 | Report Abuse

Posted by sunztzhe > Oct 23, 2014 01:14 PM | Report Abuse

kcchong, ganasai, frank soweto, stockoperator
I am rather intrigued by your discussion. It appears that everyone has their favorite stocks to make money. To cut a long story short and to test your future capability of stock selection and be accountable for your stock buy decision, would all of you please select two stocks each which all of you think will outperform up to 31 Dec 2015. You can select and buy any two stocks from Oct 1st 2014 till 31/10/2014 and you can sell anytime or hold till 31st December 2015 as long as you are satisfied with the profits or lack of profits. Lets fix the investment capital to RM 10,000 for each participant.

So please advise the following:
kcchong- what is your stock selected? Uchitec, Tongher?
ganasai- what is your stock selected n buy in price? I assume its KNM, BJCORP unless u advise me otherwise
frank Soweto- what is your stock selected and your buy in price? stock 1, stock 2??
stockoperator- what is your stock selected and buy in price? Is it Padini, other??


Sunztzhe,

When I teach people about investing, I am talking about value investing for the long-term. Value investors have no ability to predict share price in 1 month, 6 months, 1 year, 3 years. They only look at the business of the company, whether it is good, durable etc. If it is they won't buy yet until look at its price; is it expensive relative to its earnings, cash flow, with other similar companies, what is its price relative to its value, how risky is the company, and a whole lot of question.

Even after that, the price may take a long time to reach its potential, if they are right about the business. But they can be wrong too, but generally not as often as they would be right.

So you see a value investor won't win in your kind of competition. But in the first place, they invest for long-term to build wealth,not aiming to compete with anybody.

Posted by kcchongnz > 2014-10-23 16:06 | Report Abuse

And also value investors don't just buy one or two stocks, knowing very well that they could be wrong or overconfident in just one or two companies. They also know that they are not Warren Buffet. So they own a portfolio of generally ten to twenty stocks to capitalize on the free lunch offered by diversification. They also aware that the market is unknowable and unpredictable. So they don't like to use margin financing in investing or other form of leverage.

And then they wait patiently, and happy to obtain a compounded annual return of 10%-20% for a long period of time, hopefully.

Posted by 1901 > 2014-10-23 16:39 | Report Abuse

"You must know whose interest the investment bankers care about. Certainly it is not yours, believe me."

Damn true! At market high, pls totally ignore them, rubbish

Posted by Intelligent Investor > 2014-10-23 16:39 | Report Abuse

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

The only free lunch in investing.

Posted by inwest88 > 2014-10-23 20:32 | Report Abuse

I would be indeed very surprised if the analyst agrees to comm here to give his views on KNM !

Posted by sunztzhe > 2014-10-23 20:52 | Report Abuse

kcchongnz,
Thanks for sharing your views on Value Investing. I do see your risk management logic in diversifying into more stock picks of min 10 to 20 stocks or more stocks as due to uncertainty one does want to be overly exposed to any one of the selected stocks although it fulfills your financial selection criteria. This begets the question of whether one has done a thorough work on qualitative and financial evaluation criteria tools checklist prior to stock selection.

Have you ever asked yourself how do you and why do you want to occupy your time to monitor the financial performance of 20 or more stocks in your portfolio? How do you find the time to monitor each individual stock performance, perform good qualitative and quantitative work on each of the 20 or more selected stocks. Wouldn't that begets the second question of whether one is indeed diversifying one's focused attention cum competency away as a result of overseeing and monitoring too many stocks?

Wouldn't it be better to further fine tune on one's stock selection criteria on qualitative and financial performance checklist requirement before investing in any stock thus reducing the no of stocks selected to more manageable situation? Wouldn't that mitigate the risk of selecting an "undervalued gem" that later on turned into a "lemon"? Even if that is so, wouldn't one who is as financially skilled and adept as you are be very fast and responsive in averting an "undervalued gem turning into a lemon" catastrophe as surely that will take some time to do so and one will have enough time to respond in an appropriate and fitting manner before it becomes a "TRUE FINANCIAL LEMON". Unless this may be attributed to subjective rationalization that interferes with well thought out objective financial decision making and it opens up an entirely new chapter on "How to avoid falling in love with one's selected gem stocks"

Posted by stockoperator > 2014-10-23 23:48 | Report Abuse

ten stocks from different sectors is a max for me.

Posted by Frank Soweto > 2014-10-24 02:56 | Report Abuse

Thanks Sunztzhe for the invite. I think you're mistaken -
1. I'm sharing my story based on the very bad experiences in this longkang shit KNM. hopefully others will not fall in to the same trap as I'm seeing the same script being play now - the only difference is the share prices are lower than when I got in.

2. even if I were to give u my 2 picks n won it is meaningless to me as I know my own capabilities n they're no where near the ability ( not even close )to like kcchongnz which I regard highly n also another fellow sifu kcloh that taught me many2 valuable insights with regards to successful investment. I based my investment philosophy like kcchongnz focusing mainly on diversification,good companies n long term.

3 lastly Kc said very well in his reply to u -

Sunztzhe,

When I teach people about investing, I am talking about value investing for the long-term. Value investors have no ability to predict share price in 1 month, 6 months, 1 year, 3 years. They only look at the business of the company, whether it is good, durable etc. If it is they won't buy yet until look at its price; is it expensive relative to its earnings, cash flow, with other similar companies, what is its price relative to its value, how risky is the company, and a whole lot of question.

Even after that, the price may take a long time to reach its potential, if they are right about the business. But they can be wrong too, but generally not as often as they would be right.

So you see a value investor won't win in your kind of competition. But in the first place, they invest for long-term to build wealth,not aiming to compete with anybody.

Posted by kcchongnz > 2014-10-24 05:22 | Report Abuse

Sunztzhe,
You have sound investment philosophy, just lie two super investors I know; they are Warren and Buffet and Phillip Fisher. Buffet actually transform himself from a farmer to a hunter in investing, guided by his deputy, Charles Munger. Berkshire Hathaway owns relatively very few stocks, actually he owns companies in a strict sense because it is a very substantial shareholder of companies it owns. Hence he can control the operations of the companies he chooses to, but he rarely does. He does made “thorough work on qualitative and financial evaluation criteria tools checklist prior to stock selection”, the same as what Philip Fisher did with his scuttle butting. It is not that they never make mistakes, they did often do. Their overall results are still very good.

I fully aware my own limitations that I can never be like Buffet (I mean his ability in finding companies and concentrate and control the investments in them), nor Fisher. Hence I took the other approach, ie diversifications. Well I have written an article here about it and I don’t expect you to agree with me.

http://klse.i3investor.com/blogs/kcchongnz/48946.jsp

I do more detail analysis for companies I want to invest in, but never thorough to the extent of what you described, especially the qualitative aspects. I can never certain that I am absolute right. If I am right 70% of the time, I would be very happy. Well, I am just a small time retail investor.

Once I have invested in 10-20 stocks, I don’t spend hell of time to monitor them as you know, I am not a trader. I do look at their quarterly reports, but that is only 4 times in a year. Sometimes I don’t even care much about the quarterly reports.

“Wouldn't it be better to further fine tune on one's stock selection criteria on qualitative and financial performance checklist requirement before investing in any stock thus reducing the no of stocks selected to more manageable situation?”

Sure, that is the essence of value investing, seriously. Go ahead and do it as much as you like and as much as you can.

Posted by kcchongnz > 2014-10-24 15:18 | Report Abuse

Posted by Tan KW > Oct 23, 2014 01:39 PM | Report Abuse

@kcchongnz, i have email the request to yttan@hlib.hongleong.com.my

It is fantastic if he can provide his view to us.


Yeah, we all can learn from him.

For a start, let me ask

1. “Strong earnings growth prospect? CAGR of earnings growth of 55% from FY14-FY16”
Based on what?
2. “We maintained our BUY call with unchanged target price of RM1.35 based on 16x FY15 P/E.” How come such a fantastic PE, why not 5?
3. “KNM is one of the alpha stocks”
What do you mean by alpha stock? Alpha to me is a positive return over the index.

While waiting for his reply, why not we discuss it here among ourselves? There seem to be a lot of people here know a lot of KNM.

Posted by stockoperator > 2014-10-24 17:35 | Report Abuse

KC stock preference is quite personal much more than food music and clothing selection. You can write about it But discussion is not easy one.

Posted by stockoperator > 2014-10-24 17:38 | Report Abuse

U see i kena hentam by ganasai and i have to accept his argument.

Posted by kcchongnz > 2014-10-24 17:43 | Report Abuse

Posted by stockoperator > Oct 24, 2014 05:35 PM | Report Abuse
KC stock preference is quite personal much more than food music and clothing selection. You can write about it But discussion is not easy one.

I seriously don't see a stock can be akin to food, music and clothing.

Investing in a stock is investing in a part business of a company. It is a financial asset with certain expected cash flow, and hence determines its value.

"There are many areas in valuation where there is room for disagreement, including how to estimate true value and how long it will take for prices to adjust to true value. But there is one point on which there can be no disagreement. Asset prices cannot be justified merely by using the argument that there will be other investors around willing to pay a higher price in the future."

Aswath Damodaran, Investment Valuation

Posted by sunztzhe > 2014-10-24 17:58 | Report Abuse

Kc invest for long term in stocks that r fundamentally sound n wants to become a long term shareholder n expect above market dividend yield over time.
Others r just traders but there is a amorphous line between trading, punting or gambling. However in today's society... being called a stock trader or a Swing trader gives one some form of respectability rather than being called an outright gambler

Posted by stockoperator > 2014-10-24 20:06 | Report Abuse

Agreed.

Too much emphasis on speculative earning by HLG which forms the Basis of valuation. The reports is misguiding to the true value of a company.

Anyhow the investing community has put too much emphasis on Quarterly and yearly earning until it sways the price too much in such a big volatility. Thus create unnecessary fear and greed.

Slowly and eventually, investing public starts to speculate earnings and believe the quarterly earning has the predictive power into the company futures and thus determine the company core valuations.

That is Not totally true.

Posted by stockoperator > 2014-10-25 00:57 | Report Abuse

stock selection and preference will mostly depends on a person character and personality, comfort zone, risk appetite, competency and investment philosophy and i respect that.

Posted by stockoperator > 2014-10-25 01:12 | Report Abuse

And if you are a trader be a top one. Please have risk management and money management at all time and I have to respect that as well.

Anyhow, i have yet to see a Good trader that can last long enough.

Posted by stockoperator > 2014-10-25 01:19 | Report Abuse

Honestly for trading purpose, i can only see a few trading opportunities in a whole year. A good trader will seize that kind of opportunity.

Really A good trade is Only a few time in a whole year ya.

Posted by stockoperator > 2014-10-25 16:28 | Report Abuse

Lots of investors like to invest in hype, turnaround, transformation, or next big things,or high tech stocks that sometimes we don't even understand the Business. So you see sometimes we are looking for high rate of failure ourselves if not betting our lucks.

A long lasting and boring durable business which has been proven to last in good and bad times which has been Winners all along will Most likely to remain as Winner again and again. You see we are looking for High Rate of Success. A small range of diversification or a small basket of Good Business is a good approach.

Maintaining a such a portfolio should provide a safe net for retirement.

Posted by andychucky28 > 2014-10-25 20:25 | Report Abuse

See what counters you buy, at KLSE the longer you keep the shares, the more you will lose!

Posted by sunztzhe > 2014-10-25 20:31 | Report Abuse

andychucky28, If you had gone in when the market crashed last week, you will have a different perception as you will be "IN THE MONEY"

Posted by stockoperator > 2014-10-25 21:34 | Report Abuse

Surely i can understand the frustration of investing as we can't take control of investment climate, growth rate, inflation rate, long time horizon of investing period and price volatility and speculative nature of market and Sometimes Price does not move for years. What else?

Will all these create confusion and doubt? Yes.

What can we do about all these, Nothing.

Posted by andychucky28 > 2014-10-25 21:54 | Report Abuse

sunztzhe, going into the market last week and selling this week is not call an investment. It is called trading.

Posted by sunztzhe > 2014-10-25 22:04 | Report Abuse

andychucky28, going into market last week to buy undervalued investment stocks and holding it is called "investment"

Posted by andychucky28 > 2014-10-25 22:12 | Report Abuse

Sunztzhe, please tell us what counters you can buy last week and hold them for long term? And what are the profit % you can make holding them long them. Most of the KLSE counters are meant for trading.

Do you know that the SHARKS have all our buying information. They know which counters to push and which not to push.

Posted by stockoperator > 2014-10-25 22:39 | Report Abuse

If investing is participating in a Business of a company, then lets understand:

what kind of business that we are investing into and Why this company is doing better than the rest? It is an important question. Lets give some thought into its business operation efficiency, business philosophy, its Business model and so on.

There you will find something there is different than the rest.

Lets understand the most basic thing first and there is no free lunch ya.

Posted by tjhldg > 2014-10-25 22:47 | Report Abuse

action is all that u need la kawan kawan ...sighhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

Posted by sunztzhe > 2014-10-25 22:48 | Report Abuse

If you are confident of the intrinsic value of any stocks that you had bought at much lower prices before the market correction, you should buy some more during the market correction as despite the crash the latest low prices during the market correction that one buys is still higher than the original investment cost. So the market correction accords one the opportunity to buy some more at relative lowest price. You will need to worry about SHARKS if you trade with the hi volume speculative counters with the SHARKS but then again the SHARKS can also be your friend .

Posted by stockoperator > 2014-10-25 23:12 | Report Abuse

friends, if we understand that the most a good business will do is about 10-15% growth rate and improving its margin by a few points, we can't expect a lot of action unless there is change of Business direction.

Also don't get panic easily as Most of time it is Business as usual.

Posted by tjhldg > 2014-10-25 23:28 | Report Abuse

yups : )

Posted by Pika Chan > 2014-10-25 23:36 | Report Abuse

If you are confident of the intrinsic value of any stocks that you had bought at much lower prices before the market correction, you should buy some more during the market correction as despite the crash the latest low prices during the market correction that one buys is still higher than the original investment cost.

_______________________________________________________________________

I do buy the idea of buying when you have MoS and buy when it is cheap. But I certainly do not buy when the market is under correction or when it is downtrend.

You never know that today, the PE 6 looks cheap or expensive. It's just a number.

A wise investor will take advantage of ups and downs of the market to make profit.

Posted by tjhldg > 2014-10-25 23:38 | Report Abuse

r u pika ? 1770 to 1880 time u ada sapu bo ?

Posted by tjhldg > 2014-10-25 23:42 | Report Abuse

tat y i say talk doesnt make u rich ... action tat make u a different person ... u take the risk and if mr market agree .. u huat huatttr ... as simple as abc .... dont need fortune teller or crystallball ... action is wat u need ... remember most of the historian now ... just cari makan nia ... and go think y

Posted by tjhldg > 2014-10-25 23:47 | Report Abuse

call me tj la ... now a day many see market5 got reversal signal then forget wat they talk liau ... i3 is not kopitiam la ... why act like those oldman in koipitiam ? talk for song ka ? ...si kaw si thunn la ..

if any phd holder can beat mr market ... tomorrow i go get 8 or 10 beside me liau la ...still so susa in in out out for wat

Posted by tjhldg > 2014-10-26 00:25 | Report Abuse

uum uum pika ... Plan your trade, trade your plan. .... LIKE ...

hahahahaa

good luck and happy trading ... wish u huat huat

Posted by stockoperator > 2014-10-26 00:42 | Report Abuse

if we get to know our company a little bit better and understand its business a little bit better, probably we can plan certain trade.

Probably we can take advantage of certain price action as we understand it. Making decision won't be so ambiguous.

Posted by stockoperator > 2014-10-26 00:50 | Report Abuse

Greedy person cant take advantage of panic selling. A Panic person can't take advantage of break out price.

Well an acute businessman can understand price action much better.

Posted by stockoperator > 2014-10-26 11:04 | Report Abuse

Generally investing is most business like. What does it mean?

It is important to get to know the Business that you are Buying into and equivalently important to know the value of the company that you should pay.

I think all stakeholders who are negotiating a business deal, propose a take over, considering a private placement, mulling a management buy out, privatization will share my above thoughts.

If the prevailing market condition is favorable, we also try Not to take advantage of the Buyer so as not to distort the true value of a business.

if the prevailing market condition is Not so favorable, we also try not to take advantage of the Seller for the same reasons.

TQ