Posted by yfchong > 2014-12-11 21:19 | Report Abuse

I like this article..., wish I can got it earlier 25 years ago to share out.......,

Posted by yfchong > 2014-12-11 21:21 | Report Abuse

Why 1987.........., 1994 cause us huge damage...,

Posted by matakuda > 2014-12-11 21:51 | Report Abuse

Firstly, thanks KC for the above article.

It is very clear that the Mr. Lee was overconfident or he won't put a big chuck of his money into FGV. He only looked at the following Pros and ignored other facts.

1. Every human consumes edible oil every day, food cooked with palm oil tastes so nice, and palm oil will continuously be used (recession-proof).

2. El-Nino phenomenon will ramp up the commodity price, a price increase of RM100/tonne means extra profit of RM100/tonne to the company without the need for extra efforts.

3. FGV has a huge debt but that is regarded as a smart decision as it uses OPM to do business.

4. FGV is owned by Khazanah/EPF and the Government will surely lend a helping hand if it is in trouble.

5. Both Malaysian & Indonesian governments are implementing B7 (biodiesel) and this can address the over supply problem.

6. The cost of production is very low as palm trees only requires a few molecules of fertilizer to grow healthily, both sunlight and rain water are FOC.

7. The land will appreciate over the time and the values can be unlocked by converting the agricultural lands into housing development, etc....

At the same time, Mr. Lee ignored the opinions that discredited FGV, see below:

1. The ongoing boycotts in the Europe means more people will opt for soy oil.

2. If El-Nino took place, the palm tree will be hurt and its production will be affected.

3. The competing soy oil at record supply. The present weather is favouring the growth of soy oil in the U.S.

4. Biodiesel is not economical when the crude is below USD90/barrel.

5. When the commodity price is depressed, FGV will have a hard time to service the finance cost.

6. The return on investment is lower than that of a FD, the average palm tree profiles are old.

7. The company is not run by professional (its chairman is ex-Menteri Besar of Negeri Sembilan).

I've gone through the above and learnt the lessons. I'm 100% supporting KC that we should look at the company past track records. Growth are often fake. Every often, if the growth does not pan out what was envisaged, the stock prices will be punished upon earning announcement.

Posted by belkg > 2014-12-11 21:58 | Report Abuse

Tks mr chong tks f u report of fgvb,i and other.investor r now in the crossroad.we need advice which type of stk.can look.into, n whether t market going to crash

Posted by Edmund Dominos > 2014-12-11 22:46 | Report Abuse

Another good article by KC!

Posted by walau2u > 2014-12-12 00:16 | Report Abuse

If wan play safe,can buy United Plantation.

Posted by choop818 > 2014-12-12 09:58 | Report Abuse

Good read.

Posted by kcchongnz > 2014-12-27 18:59 | Report Abuse

Posted by belkg > Dec 11, 2014 09:58 PM | Report Abuse
Tks mr chong tks f u report of fgvb,i and other.investor r now in the crossroad.we need advice which type of stk.can look.into, n whether t market going to crash

I think I can judge if a company is a bad company pretty well:

http://klse.i3investor.com/blogs/kcchongnz/67199.jsp

Whether the market going to crash or not? May be you should look for Snake oil salesman for your answer to this.

Which type of stocks to buy? How wish I have a crystal ball. But I did sum up what you should look out for here as a long term value investor:

http://klse.i3investor.com/blogs/kcchongnz/54243.jsp

But of course you got to do it yourself. Only you can help yourself, and nobody else can help you.

Posted by LangeSohneGlashutte > 2015-06-25 16:49 | Report Abuse

Wow KC, you wrote this nearly 52 weeks ago, and today FGVB price is 1.74! Seems like you are able to detect company's doomsday! You are da real sifu! Btw do you happen to master some sort of financial forensic/engineering to detect any red flag in company? Do u mind suggesting any good books/articles on that matter.

Thanks.

Posted by kcchongnz > 2015-06-25 17:47 | Report Abuse

Posted by LangeSohneGlashutte > Jun 25, 2015 04:49 PM | Report Abuse
Wow KC, you wrote this nearly 52 weeks ago, and today FGVB price is 1.74! Seems like you are able to detect company's doomsday! You are da real sifu! Btw do you happen to master some sort of financial forensic/engineering to detect any red flag in company? Do u mind suggesting any good books/articles on that matter.
Thanks.

You do see some value of my article here, thanks.

This article was actually an actual email sent to an old friend of mine who wanted to buy big, very big in this stock FGVB at that time, may be using margin financing some more. I gave him this opinion as I saw it but I didn't hear a word from him. Recently only I realized he is angry with me from another friend of mine, and from one article he wrote.

But why ah?

Yes, I have a book to recommend to you about financial shenanigans here:

"Financial Shenanigans" by Howard Schilit