Posted by AyamTua > 2015-02-23 00:40 | Report Abuse

good for newbies start to learn.. recommended reading.
additional notes: only invest when have spare money as to not pressured to sell when things didnt happen immediately..

Posted by johnny cash > 2015-02-23 07:56 | Report Abuse

good one, thanks very helpfull for me and also newbies

Posted by Bruce88 > 2015-02-23 08:50 | Report Abuse

like.

Posted by fortunecheat > 2015-02-23 17:32 | Report Abuse

can write something new ? it is Lonbisc, Pintaras.... AGAIN...

a bit sian already...

Posted by fortunecheat > 2015-02-23 17:33 | Report Abuse

anyway, give you a like, just to show that i am trying to give constructive comments..

Posted by kcchongnz > 2015-02-23 22:42 | Report Abuse

This article is a discussion about how to identify a quality growth stock and a shareholder value destroying growth stock. This is what I have mentioned in the article,

"Is growth a sure win thing in investment?

Let us look at two examples of growth companies in Bursa which I happen to know quite well to see the proposition above is true; Pintaras Jaya and London Biscuits."


So if you have feel so "sian" and you have any stock which can be better examples, provide their analysis here. Then only we can discuss about the merits of your "constructive criticisms"



Posted by fortunecheat > Feb 23, 2015 05:32 PM | Report Abuse

can write something new ? it is Lonbisc, Pintaras.... AGAIN...

a bit sian already...

Posted by fortunecheat > Feb 23, 2015 05:33 PM | Report Abuse

anyway, give you a like, just to show that i am trying to give constructive comments..

Posted by Kian Leong Lim > 2015-02-24 18:38 | Report Abuse

Mr. KCCHONGNZ,
"人在做天在看",the fundamentals, 這就是一間公司的基本面,我認為你終於寫出投資最好的方法,這是我很久以來讀到的最好的一篇文章,感謝你對投資人不斷不斷的慈悲,不斷不斷的分享你的智慧,祝你在新的一年裡:快樂健康,洋洋得意,恭喜發財!

Posted by fortunecheat > 2015-02-24 20:22 | Report Abuse

Same old story

Leftover rice goreng again and served to you. Yummy meh ?

Posted by kcchongnz > 2015-02-24 21:40 | Report Abuse

Please read and try to understand this article is written to discuss about how to identify high quality growth stock (Pintaras)and poor quality growth (in debts and share capital)trash (London Biscuits).

These two stocks are perfect stocks which I happen to know more about to compare and contrast.

Do you have better stocks to compare and contrast with? Please show your new piping hot stocks and the analysis to compare and contrast.


Posted by fortunecheat > Feb 24, 2015 08:22 PM | Report Abuse

Same old story

Leftover rice goreng again and served to you. Yummy meh ?

Posted by kcchongnz > 2015-02-25 00:37 | Report Abuse

ks55,

I have to say that you made a right call as you have already made a decent gain from buying London Biscuits at 56.5 sen. That is the some kind of behavioral finance, or psychological investing. It is like a musical chair, the one who can guess correctly when the music will stop will make money, but the majority will be caught.

Most investors are attracted by anything "free" and easily deceived by those "private placement" at price higher than the market price. These are all mirages. There is nothing free in investment. A cake cut into 10 pieces is still the same cake of the same value.

If the value of the stock is 60 sen and I buy equal amount more from private placement at RM1, and jack it up to 90 sen, I still make money. It is easy to jack the share up from 60 sen to 90 sen as someone bought it at RM1.00. But this is a game controlled by big boys and small time retail investors as a whole group, have no chance to win. You should know some of these games.

London Biscuits doesn't worth anything. It only has a corporation option value, a value = Min (0, X). This option has no intrinsic value but a time value. My estimate of its time value is definitely far below its price of 78.5 sen now. It is even far below your cost of 50+sen. so enjoy your gain while you can.

Try use some kind of absolute valuation method such as the discount free cash flow method to value London Biscuits you will know what I mean,even if you use very liberal assumptions.

You do appear to have great trading skill though.

Posted by kcchongnz > 2015-02-25 00:53 | Report Abuse

Khee San?

Do you know about its value? I guess you don't need to as you have proven your trading skill in London Biscuits. You can make money just knowing its price.

Just looked at Khee San as highly recommended by you. This animal exhibit very very similar characteristics of London Biscuits.

Return on equity = 4%, the same rubbish as LonBis.

Return on invested capital = 2.1%, much worse than that trash LonBis. Are you happy if you put in RM1000 in a risky business and earn RM20 a year? Not me.

Cash flow from operations, ok positive but it is an illusion, the same as LonBis as Free cash flow is again negative. Always very high capital expenses, yeah, buying and selling of PPE, same modus operandi as LonBis. Same thing as LonBis, debt is the only increasing item, some more faster than that trash.

At 54 sen appeared to be cheap with PE of 7.4 but that is not the right metric to use. The right metric is EV/ebit for the firm. It has high debt and EV is ridiculously high at 28 times its earnings before interest and tax!

As a value investor, I won't touch it with a ten feet pole!

But again you may be right in its price. i don't know.

Posted by bsngpg > 2015-02-25 07:21 | Report Abuse

LIKE. The above are very educational comments from kcchongnz with live examples from other forumer. I recommend you to read. Thks.

Posted by kcchongnz > 2015-02-25 09:24 | Report Abuse

Posted by ks55 > Feb 25, 2015 09:16 AM | Report Abuse

No harm taking small portion of your cash to polish up your trading skill at the same time making some pocket money. I always believe 買股是為了增加生活情趣, 小賭怡情, 大賭傷身

Other than making some pocket money, I love to enjoy a little bit of thrill.


ks55, I fully agree with your above statement. I do that too.

Posted by Kian Leong Lim > 2015-02-25 09:38 | Report Abuse

Let us discuss Khee San, I go look at it and tell you what I think of this company later on. Of course, Mr. KCCHONGNZ,probably state LonBIsc and Kheesan as examples for a good reason. The market is short of money, foreigner withdrawing, future interest rate is sure to rise, just waiting for the US to do it! In my personal opinion, he probably thought that it may be good thing to look for something cheap and consumer, well it makes sense because the only thing that is good now is falling oil prices, which is giving a boost to consumer spending, well, people still need to eat biscuits especially when the economy is not so "healthy" to stay "healthy" themselves. I also strongly agree with him, we should look for smaller capital stock that are consumer related. Look at PBA, shot up very fast, can still go further, why? houses increase in Penange and technology companies propering need more water, and water is very cheap to sell, just like biscuits, which is even better, low capital commitment, fast turnover. Looking for value is based on looking for future prospect due to present development (like oil price fall and tech boom). The companies like LonBIsc and Keeshan are not new are a good thing because than we can have the opportunity to gather more information about their capabilities. But the trend to look for cheap and consumer stocks is new (whether interest rate rise or not you must still eat). Also, furniture companies might be a good buy, US real estate thriving, home-depo is reporting good results. It is also quite relevent for this year. What is relevant for this year, the direction is important, not the companies, I believe can maintain this status quote of 買股是為了增加生活情趣, 小賭怡情, 大賭傷身. Sorry for my broken english. If there is anything I express badly, it is not my intention, it is only my English fault.

Posted by azmimerican > 2015-02-25 09:53 | Report Abuse

I banyak profit from BDB... I think will get more

As for LonBisc tu... it is now banyak beli plant and machinery itu ini... invest invest invest... so won't it one day hit its optimum level and start untung banyak???

KC, ada tak kemungkinan ni??

Posted by kcchongnz > 2015-02-25 10:12 | Report Abuse

Generally for retail investors without proven trading skill, avoid London Biscuits, Khee San, KNM, GCB etc. Read the article below and keep it for future reflection, seriously.

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

It becomes more risky now for novice investors when a reputable magazine such as The Edge starts to recommend to buy London Biscuits.

I can understand ordinary investor writing about how good is London Biscuits as many may not have not gone into details but just base on simplistic PE ratio, P/B etc, and looking into its cash flow and return on capitals and management actions etc.

But for The Edge? Quite difficult to comprehend!

Posted by NOBY > 2015-02-25 10:32 | Report Abuse

Posted by kcchongnz > Feb 25, 2015 10:12 AM | Report Abuse

Generally for retail investors without proven trading skill, avoid London Biscuits, Khee San, KNM, GCB etc. Read the article below and keep it for future reflection, seriously.

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

It becomes more risky now for novice investors when a reputable magazine such as The Edge starts to recommend to buy London Biscuits.

I can understand ordinary investor writing about how good is London Biscuits as many may not have not gone into details but just base on simplistic PE ratio, P/B etc, and looking into its cash flow and return on capitals and management actions etc.

But for The Edge? Quite difficult to comprehend!


Which issue was this ? To be fair, I have benefited from their insider asia stock picks or under Tong Value Investing portfolio. Most of their stock picks (value ones) are under-researched counters (some not covered by any research houses). I normally dont pay much attention to their momentum portfolio as that is all based on TA and short term. Perhaps LONDBIS falls under the latter.

Posted by kcchongnz > 2015-02-25 10:44 | Report Abuse

Noby,

Yeah it is in their momentum portfolio in the latest daily free magazine.

You notice that when you talked about Willowglen, it was just 30-40 sen. When another of our course participant Teck Chuan talked about Homeritz, it was 40+ sen. And when I started to talk about Pintaras, it was just about the adjusted price of RM1.00. When I talked about London Biscuits, it was RM1.00+.

They are all in The Edge Value Stock Portfolio recently when Homeritz is RM1.14, Pintaras RM4.30 and Willow 78.5 sen. And LonBis is 78 sen.


Who says fundamental investing doesn't work?

Posted by NOBY > 2015-02-25 10:54 | Report Abuse

KC,

You and I know that fundamental investing is the only way to invest. The problem is that people are easily swayed by short term returns prospects (included myself). If you ask me 2 years back, whether these stocks can reach these prices, I wouldnt have guessed it. In fact, I have bought and sold HOMERIZ and WILLOW a few times. Although it seemed like a smart move in the short term, when I look back at the bigger picture of those transactions, I realize that I would have been much better just holding those stocks from the beginning.

Posted by kcchongnz > 2015-02-25 11:15 | Report Abuse

The fact is very few people know how to calculate return. Many buy a stock, sell in short term and make some profit. Like you they repeat this process, and each time make or lose a bit. As long as the winning appears to be more than losing, they think they have done it correctly and very well. Why hold?

If they know some mathematics and finance and calculate the total internal rate of return, they will discover what you had discovered below.

"In fact, I have bought and sold HOMERIZ and WILLOW a few times. Although it seemed like a smart move in the short term, when I look back at the bigger picture of those transactions, I realize that I would have been much better just holding those stocks from the beginning."

Posted by tpchuayap > 2015-02-25 11:24 | Report Abuse

thanks for sharing

Posted by zenny > 2015-02-25 12:20 | Report Abuse

Hi KC. So for stocks like Homeriz, Pintaras, Willow which have gone up significantly, what's the right price to sell? Is there a reliable financial measuring tool(are you suggesting to use IRR?) on whether the stock is overvalued? Also does this mean that we do not sell when the stock price has gone up substantially in a very short time say due to a rerating and is in overbought position and hope to buy back when the price has retreated to a lower level?
thanks

Posted by kcchongnz > 2015-02-25 12:44 | Report Abuse

Posted by zenny > Feb 25, 2015 12:20 PM | Report Abuse
Hi KC. So for stocks like Homeriz, Pintaras, Willow which have gone up significantly, what's the right price to sell? Is there a reliable financial measuring tool(are you suggesting to use IRR?) on whether the stock is overvalued? Also does this mean that we do not sell when the stock price has gone up substantially in a very short time say due to a rerating and is in overbought position and hope to buy back when the price has retreated to a lower level?
thanks

Zenny,

Good question. Please read the link below if you are interested in my opinion.

http://klse.i3investor.com/blogs/kcchongnz/56937.jsp

Posted by Alphabeta > 2015-02-25 15:59 | Report Abuse

Hi KC, personally I like to read financial news daily mainly to keep track on any changes in business direction especially on counters that i have invested (mainly using Google search).

The reasons of selling them are:

a>The future direction of the business does not meet my original objective of buying it in the first. For example, I have bought YTLPOWR in 2006 purely for its good dividend yield. However, in 2010 the management has decided to venture into telecommunication business. I sold all my holdings around 2.40. Knowing very well telco business incurred high capex upfront and this will undoubtedly affect its ability to continue the generous dividend payout.

b>Unusual uptrend in market price within a short period without valid catalyst. Examples are Zhulian, Coastal Contracts and Marco which i have sold when share price shot up abnormally.

Posted by kcchongnz > 2015-02-25 16:49 | Report Abuse

Alphabeta,

Good points. I will add them to my list of when to sell.

Your point B is very valid in Bursa. Some syndicates may have bought the share at cheap price and they will jack up the price by all means to entice you to buy, and at the back, they harvest.

But for value investors, if they find the price has not reached or near their estimated intrinsic value, they may not sell too. That doesn't mean lost opportunity if you read Noby's experience above.

Posted by donfollowblindly > 2015-02-25 17:14 | Report Abuse

Don't trust anyone here is my advise. Do they tell you when they sell when you do the buying at high price?

Posted by paperplane > 2015-02-25 17:19 | Report Abuse

Alphabeta, you have same view as mine. I sell YTLPower also. As for me FRancis start doing things out of his own core competency.

Then I buy YTL.....for dividend

Posted by Alphabeta > 2015-02-25 17:57 | Report Abuse

Of course there will be looser in my portfolio, like CIMB which i have bought over a period of time and my average cost is 6.24. I am not selling because company fundamental is still alright with decent dividend payout. It is a temporary setback because of lower loan growth and higher provision of NPL (still manageable). Its exposure in Indonesia which contribution significantly to its bottom-line.

Another one is Padini, which i bought recently at 1.80, I have also bought at 1.45 to averaging down the cost. As long as they are fundamental strong and will not collapse.

Don't forget these looser still paying decent dividends.

As long as you are confidently the company financial health can withstand the crisis and will not turn into PN17 status.

I am not selling but will continue to buy if the price drop to an attractive level. In the meantime, just collect dividend.

Posted by kcchongnz > 2015-02-25 18:03 | Report Abuse

Posted by donfollowblindly > Feb 25, 2015 05:14 PM | Report Abuse

Don't trust anyone here is my advise. Do they tell you when they sell when you do the buying at high price?


Anyone owes you something?

Posted by Alphabeta > 2015-02-25 19:50 | Report Abuse

I don't mind telling you that a big portion of my portfolio are currently in the REIT counter, mainly Sunreit, CMMT and YTLREIT.

My first block of Sunreit is 1 sen below IPO price of 90 sen. I continue to buy due to the fact that the promoter Sunway is a reputable developer with good track record. My average cost now is 1.15.

My favourite possessions are Uchitec and CScenic which i am still keeping till today. Uchitec is an exporter with strong R&D, customer relationship and most of all able to get pioneer status for its new product. It has gaining ground in the biotech sphere.

Value investing is like joining a marathon, the objective is not finishing the race before others, the aim is to complete the race with your objective intact. Just like a golfer challenging oneself to improve his/her handicap over time.

Wishing you all a happy and prosperous Chinese New Year, "Gong Xi Fatt Cai"!!!