Posted by Choivo Capital > 2019-01-04 23:33 | Report Abuse

Mr teo,

Well, to answer your dilemma, do you think you cannot find a better investment?

Berkshire is selling at 16 times operating earnings now. Which is 3 times cheaper (just a rough estimate i think its probably 4-5 times cheaper).

Do you think QL is better than berkshire hathaway? When QL cannot even grow earnings and revenue faster than berkshire hathaway?

Don't take this to be me being argumentative. Just asking a question. If you say yes, hold. If you say no, go buy Berkshire Hathaway better.

Good luck with your journey. I wish you all the best.

Posted by stockraider > 2019-01-04 23:41 | Report Abuse

The market is taking QL in the league of UBER, Grab, Twitter, alibaba with exceptional growth etc....they are not valuing based on traditional PE matrix mah....!!

Posted by Choivo Capital > Jan 4, 2019 11:33 PM | Report Abuse

Mr teo,

Well, to answer your dilemma, do you think you cannot find a better investment?

Berkshire is selling at 16 times operating earnings now. Which is 3 times cheaper (just a rough estimate i think its probably 4-5 times cheaper).

Do you think QL is better than berkshire hathaway? When QL cannot even grow earnings and revenue faster than berkshire hathaway?

Don't take this to be me being argumentative. Just asking a question. If you say yes, hold. If you say no, go buy Berkshire Hathaway better.

Good luck with your journey. I wish you all the best.

Posted by Choivo Capital > 2019-01-04 23:44 | Report Abuse

Raider bro,

When people get stupid, they start using stupid valuations.

At the end of the day, the value of the ivnestment is all the cash generated over the lifetime discounted to present value.

Uber lose 1bil a quarter. They need to pay for electricity etc, you think they can lose 1 bil per quarter to eternity?

No mah.

I am willing to bet with you, whatever value UBER IPO at, within 2 years, it will be 60% or less of that.

Posted by shpg22 > 2019-01-05 00:11 | Report Abuse

QL historical single digit CAGR EPS growth is not impressive to justify its hefty valuation. Even if the wet dream of exceptional growth in future is materialized, the current price already priced it all. What do investor expect by paying the future jack up price on something that is still uncertain ??


stockraider The market is taking QL in the league of UBER, Grab, Twitter, alibaba with exceptional growth etc....they are not valuing based on traditional PE matrix mah..

Posted by stockraider > 2019-01-05 00:13 | Report Abuse

By looking at the details QL maybe overrated, i think fairer indication of QL valuation should be in the region of rm 4.50 loh....!!
This co do not really pays div and damn stingy in sharing with shareholders loh...!
Its Family Mart but certainty not worth Rm 2 billion, the most maybe around Rm 600m factoring growth loh...!!
Overall QL should command PE around 23x...of course should not exceed Nestle and Dutch Lady mah...!!

Posted by supersaiyan3 > 2019-01-05 00:24 | Report Abuse

Wow, congratulate the author for doing such a good analysis! Especially you did it without copy and paste. Really really good.

However, that was history. You'll get 100 marks but still you're totally wrong.

One, the killer has came to livestock farming, much worse than CP opening their mega farm next to QL (CP is in Malaysia though, small scale. Probably Malaysia's market is too small for CP). And most likely QL management doesn't know how to solve the problem. Two, Oil palm's low price may prolong for a few years (and our government continue to hurt oil palm, probably we will have a lost decade for oil palm). Otherwise, why did the major shareholders sell?

When QL was listed, I look at the receivables and decided this is a risky co. I was very wrong. So I could be wrong again.

You will start to see what i mean in the next quarterly result. Good luck!

Posted by Flintstones > 2019-01-05 08:57 | Report Abuse

Good analysis.

Posted by teoct > 2019-01-05 10:14 | Report Abuse

Choivo Capital, thank you for dropping by and appreciated the tip. Thank you for thinking so highly of me, that is, my capability to buy BH.

I had a peek at BH (A) during 2008/2009 crisis, the lowest then was USD 78,600 per share! Exchange was about 3.7; i.e. RM291k for ONE share, not 1 lot (1000) or 1 small lot (100), JUST ONE SHARE. But of course should I have such bread then, today, BH is selling for USD 292,500 per share (RM 4.14 gives RM1.2m), a 17% CAGR, yes some of those gains is exchange rate (~1.3%).

Some suggestion on Malaysian stocks would be very much appreciated.

Nevertheless thank you.

supersaiyan3, thank you for the kind words, 100 marks, you are too kind. I did some crystal-ball gazing, you think this is totally wrong? How can it be improved?

Flintstones, thank you, most kind.

i3lurker, thank you for dropping by.

Sslee, thank you for the like.

stockraider & shpg22, thank you for both your views.

To the rest who read, appreciated your time, I hope it is of value and improve ones understanding of the issue at hand.

Have a nice weekend.

Posted by Choivo Capital > 2019-01-05 10:18 | Report Abuse

Mr Teo,

There is Class B shares, USD 195 per share, or RM800.

Its basically class A split 1/1500. The downside is it has less voting rights, prorated.

https://www.investopedia.com/ask/answers/021615/what-difference-between-berkshire-hathaways-class-and-class-b-shares.asp

Posted by supersaiyan3 > 2019-01-05 10:45 | Report Abuse

teoct, then you predict into the future based on facts.

Posted by probability > 2019-01-05 16:35 | Report Abuse

i think the more we all talk on QL...the more the price will start dropping...some will start shorting i guess

Posted by teoct > 2019-01-06 10:12 | Report Abuse

Choivo Capital, thanks.

supersaiyan3, thanks.

probability, hmmmm. I was wondering before I posted this along the same line as you. Then I think, if my posting can move the market, wow, to @#*$ with it.

Not too long ago, someone was illustrating some writers are pumping the market, or something along that line (if I understood it correctly) and impoverishing "investors".

I thought long and hard on this. My take is primarily SHARING (it also help crystallized my thinking). It is the reader's that need to separate the wheat from the chaff.

Ralph Waldo Emerson said "Nothing is at last sacred but the integrity of your own mind".

Paul Samuelson (won 1970 Nobel Prize in economics) said "Well when events change, I change my mind. What do you do?"

Then there are those that ----- "I have already made up my mind, don't confuse me with facts" (This is from Philip A Fisher, I bought the book in 20/2/1997 and re-reading for the umpteen time now).

Let this (forum) be not an "echo chamber", diverse views is important to provide the path to informed decision.

So readers, please exercise due care.

Have a good week ahead.

Posted by VenFx > 2019-01-06 10:13 | Report Abuse

teoct , very informative sharing.

Posted by GrahamNewman > 2019-01-08 14:27 | Report Abuse

I have not critically evaluated QL but judging roughly from the 10 years financials it seems to be an average company, although it could have a slight chance of growing faster than previously. Assuming that the company can grow in real terms faster than inflation + long term gov yield, I have trouble assuming such a long growth period in my calculations. Yes, the company is good, it sells things that consumer will always need and recurrent(something Buffett would like), but the risk as Buffett said: the final risk is the risk of inadequate return over time, euphemism for you paid too much. Some might argue: have a longer time horizon, let the company compound. Even Munger has said eventually, over a very long period, ROE is the return investors ultimately get. But the caveat is you must be sure this is the best return you are going to get over that period, if not your opportunity cost would outweight your gain. And this is the point, where I believe the divergence of ideas begins in this forum. Each person opportunity cost is different, that is why QL could be good to some but inferior to others. For an investor who did not encounter better opportunities than QL, ipso facto QL is the best; while others will pursue better opportunities. The only way to get better returns is to widen your universe, as Buffett once comment on how to start finding good companies: start from A and work to Z.

Posted by GrahamNewman > 2019-01-08 14:38 | Report Abuse

And personally I think investor's focus on reported earnings could potentially affect adversely on their decision making. Owner earnings is a better concept and should be adopted widely. Of course one needs to know the meanings of the figures he uses to calcuate owner earnings, lest he come out with an even more erroneous earnings picture.

Posted by teoct > 2019-01-09 09:51 | Report Abuse

VenFx thanks.

Winner, appreciate very much the "like".

GrahamNewman, thank you for your comments, appreciate it very much.

Posted by Philip ( Random Walk Theorist) > 2020-04-21 12:25 | Report Abuse

Revisiting this article 1 year on, I hope you held the stock over the covid crisis period.

While many individuals have commented on the viability of holding QL, one thing you would have noticed was how much it has held its value over the past year and even over the crisis period.

From the lowly price of RM6.50, it has gone up to 8.60 on one year, while the revenues and earnings have hit all time highs in a quarter.

On top of that, during the crisis, while every stock in the market dropped by 30% or more, QL has remained relatively stable.

For me, the value has been far more excellent, as it has provided me with margin collateral that I was able to use to purchase a lot of other wonderful stocks selling at 10 year lows.

Buying and holding QL was one of the best decisions I have ever made.

I hope you didn't crack under pressure and got out of this wonderful investment vehicle.

Mr. Long numbers :)

Posted by Philip ( Random Walk Theorist) > 2020-04-21 12:32 | Report Abuse

As for which company performed better over the past year?

QL or BRK? You have only to look at the financial and stock results to know.

So many detractors, but who sleeps well at night in the end?

The owners and shareholders of QL.


>>>>>>>


probability i think the more we all talk on QL...the more the price will start dropping...some will start shorting i guess
05/01/2019 4:35 PM


Choivo Capital Mr teo,

Well, to answer your dilemma, do you think you cannot find a better investment?

Berkshire is selling at 16 times operating earnings now. Which is 3 times cheaper (just a rough estimate i think its probably 4-5 times cheaper).

Do you think QL is better than berkshire hathaway? When QL cannot even grow earnings and revenue faster than berkshire hathaway?

Don't take this to be me being argumentative. Just asking a question. If you say yes, hold. If you say no, go buy Berkshire Hathaway better.

Good luck with your journey. I wish you all the best.
04/01/2019 11:33 PM


supersaiyan3 Wow, congratulate the author for doing such a good analysis! Especially you did it without copy and paste. Really really good.

However, that was history. You'll get 100 marks but still you're totally wrong.

One, the killer has came to livestock farming, much worse than CP opening their mega farm next to QL (CP is in Malaysia though, small scale. Probably Malaysia's market is too small for CP). And most likely QL management doesn't know how to solve the problem. Two, Oil palm's low price may prolong for a few years (and our government continue to hurt oil palm, probably we will have a lost decade for oil palm). Otherwise, why did the major shareholders sell?

When QL was listed, I look at the receivables and decided this is a risky co. I was very wrong. So I could be wrong again.

You will start to see what i mean in the next quarterly result. Good luck!
05/01/2019 12:24 AM


stockraider By looking at the details QL maybe overrated, i think fairer indication of QL valuation should be in the region of rm 4.50 loh....!!
This co do not really pays div and damn stingy in sharing with shareholders loh...!
Its Family Mart but certainty not worth Rm 2 billion, the most maybe around Rm 600m factoring growth loh...!!
Overall QL should command PE around 23x...of course should not exceed Nestle and Dutch Lady mah...!!
05/01/2019 12:13 AM


GrahamNewman I have not critically evaluated QL but judging roughly from the 10 years financials it seems to be an average company, although it could have a slight chance of growing faster than previously. Assuming that the company can grow in real terms faster than inflation + long term gov yield, I have trouble assuming such a long growth period in my calculations. Yes, the company is good, it sells things that consumer will always need and recurrent(something Buffett would like), but the risk as Buffett said: the final risk is the risk of inadequate return over time, euphemism for you paid too much. Some might argue: have a longer time horizon, let the company compound. Even Munger has said eventually, over a very long period, ROE is the return investors ultimately get. But the caveat is you must be sure this is the best return you are going to get over that period, if not your opportunity cost would outweight your gain. And this is the point, where I believe the divergence of ideas begins in this forum. Each person opportunity cost is different, that is why QL could be good to some but inferior to others. For an investor who did not encounter better opportunities than QL, ipso facto QL is the best; while others will pursue better opportunities. The only way to get better returns is to widen your universe, as Buffett once comment on how to start finding good companies: start from A and work to Z.
08/01/2019 2:27 PM

Posted by teoct > 2020-04-21 13:24 | Report Abuse

Mr Long numbers, good to hear from you with your usual gusto.

Yes it has been one year 3 months since I wrote this article.

I have divested mine and our family holding out of QL since then and invested outside of Malaysia (Not Berkshire).

The counter (consumer sphere) has provided me with about +17% annualized, even under Covid 19 condition. Lucky, I presumed despite the analysis carried out.

But of course, QL is a good counter (within Malaysia context) for years to come.

Like you, I have also invested overseas as the companies have that much more potential. This is because the market the companies is in is that much more bigger (the world vs Malaysia only).

But there is one area I have not mastered like you, low number of counters. I aim to reduce my portfolio to below ten if possible within 12 months.

Nevertheless, thank you for all the learning and happy investing.

Stay safe and physical (not social) distancing and all.

Posted by Sslee > 2020-04-22 08:55 | Report Abuse

haha,
I think when it rains, it will come pouring