Posted by soojinhou > 2019-01-23 21:22 | Report Abuse

I think the recommendation is pretty good. Having too many stocks when capital is small doesn't justify the work needed to maintain the portfolio as the return from each stock is too small for the required work done.

Posted by 10154899906070843 > 2019-01-23 21:32 | Report Abuse

I was reading the transcript of the 2007 afternoon session of Berkshire Hathaway annual meeting. Something interesting came up on the concept of risk. Some considered buying with a margin of safety to be less risky, and securities that were volatile were considered very risky.

Warren had this to say about Beta:

things are only risky if you don't know what you are doing.

In my opinion,if you know all your 20 securities intimately and you know what you are doing exactly in buying them, then it is not risky to hold many stocks.

Problem is, people tend to think in prime concepts: if I diversify, it is safe because if one stock loses at least there are others that will win. This has been proven to be patently untrue.

If you don't know what you are doing in buying your stocks, then there risk, no matter how many stocks you hold.

Maybe I should rephrase my sentence, the majority of stocks in bursa is not rubbish, however majority of them provide average returns. Even if you were to invest 10 million in 20 stocks, if they are average stocks, you get average returns. Compounding will turn average returns into rubbish.

But well put together writing, I enjoyed reading it.

Cheers!

Posted by probability > 2019-01-23 22:01 | Report Abuse

soojinhou and Mr. Long number...very meaningful comments. Totally agreed. Thanks

Posted by PotentialGhost > 2019-01-23 22:07 | Report Abuse

Exactly Malaysia really have 90% rubbish company and CEO. US have good education good company good CEO. That why Warren can
every year make 20% cagr

Posted by 10154899906070843 > 2019-01-23 22:13 | Report Abuse

I repeat here in verbatim.

Number 2, please.

AUDIENCE MEMBER: Hi. I’m Bob Kline (PH) from Los Angeles.

Pursuing your earlier comments on sigmas from a different angle, the conventional wisdom in the investment world is that an investment risk can be measured by the volatility of the price of the investment in the marketplace.

To me, this approach has it backwards. Since changes in price are determined by the changes in the opinions of investors in the marketplace, why would a rational investor substitute the opinions of the marketplace, as reflected in the volatility of the price, for his own assessment of the risk of the investment?

Consultants take this idea further by tracking the volatility of a portfolio manager’s results in an attempt to measure risk. So could you guys expand on your thoughts on this?

WARREN BUFFETT: Yes. Volatility is not a measure of risk.

And the problem is that the people who have written and taught about volatility do not know how to measure — or, I mean, taught about risk — do not know how to measure risk.

And the nice thing about beta, which is a measure of volatility, is that it’s nice and mathematical and wrong in terms of measuring risk. It’s a measure of volatility, but past volatility does not determine the risk of investing.

I mean, actually, take it with farmland. Here in 1980, or in the early 1980s, farms that sold for $2,000 an acre went to $600 an acre. I bought one of them when the banking and farm crash took place.

And the beta of farms shot way up. And, according to standard economic theory or market theory, I was buying a much more risky asset at $600 an acre than the same farm was at 2,000 an acre.

Now, people, because farmland doesn’t trade often and prices don’t get recorded, you know, they would regard that as nonsense, that my purchase at $600 an acre of the same farm that sold for 2,000 an acre a few years ago was riskier.

But in stocks, because the prices jiggle around every minute, and because it lets the people who teach finance use the mathematics they’ve learned, they have — in effect, they would explain this a way a little more technically — but they have, in effect, translated volatility into all kinds of — past volatility — in terms of all kinds of measures of risk.

And it’s nonsense. Risk comes from the nature of certain kinds of businesses. It can be risky to be in some businesses just by the simple economics of the type of business you’re in, and it comes from not knowing what you’re doing.

And, you know, if you understand the economics of the business in which you are engaged, and you know the people with whom you’re doing business, and you know the price you pay is sensible, you don’t run any real risk.

And I don’t think Charlie and I — certainly Berkshire — I don’t think we’ve ever had a permanent loss in marketable securities that was, what, 1 percent, maybe, half a percent of net worth.

I made a terrible mistake in buying Dexter Shoe, which cost us significantly more than 1 percent of net worth where I bought an entire business then.

But I was wrong about the business. It had nothing to do with the volatility of shoe prices or leather or anything else. It just was wrong.

But in terms of marketable securities, I cannot recall a case where we’ve lost that kind of — I mean, we’ve done a lot of things in things — in securities — that had a very high beta. We’ve dealt with a lot of things in securities that had a low beta.

It’s just the whole development of volatility as a measure of risk, it has really occurred in my lifetime. And it’s been very useful for people who wanted a career in teaching, but it is not — we’ve never found a way for it to be useful to us.

Posted by Alex™ > 2019-01-23 22:58 | Report Abuse

just hoot sp500, u get 500 companies.

Posted by Alex™ > 2019-01-23 22:59 | Report Abuse

less than 5 stocks for rm100k porfolio. can huat easily, gg also easily.....ask those ppl their first rm100k is very precious and hard earned money.

Posted by 10154899906070843 > 2019-01-23 23:43 | Report Abuse

you huat sp500 go from 2900 drop to 2450, do you know why? or you think you can time the market buy at 2300 and now go up to 2600?

buying s&p500 index can be just as risky, if you don't know what you are doing.

if you buy s&p500, you are just hoping weighted stocks the big 4 FB,APPLE,AMZN, GOOGL can pull up everything forever. But if you dont know your tech industry business well, when crash you also cry... and dont know why.

Posted by RainT > 2019-01-23 23:43 | Report Abuse

RM100k ....with 10 companies portfolio is ok

not too concentrated

Posted by shpg22 > 2019-01-24 00:37 | Report Abuse

Doesn't matter how many stock you held for diversification. Most important is you need to know which is undervalued. As mentioned 99% of stock is rubbish. If you were to choose blindly, the chances of losing money is extremely high, no matter how many stock you got.

Posted by calvintaneng > 2019-01-24 02:21 | Report Abuse

Although Warren Buffet liked Phil Fisher... Phil Fisher's own son commented about his father's final cutting down to, I think, only 3 stocks in his portfolio during his final years before he died.

His son didn't have a high opinion about his father in the narrow few stocks that he whittled down Fisher's final years

You can read this IN "COMMON STOCKS UNCOMMON PROFITS" By Phillip Fisher

Posted by kcchongnz > 2019-01-24 07:55 | Report Abuse

I thought this was a very good comment. Hope commentator doesn't mind I re-post it here.

lizi
for ordinary people, should go for diversify portfolio....collect a basket of good stocks, hope one or two of them turn out as inari or myeg or QL or public bank....not everyone is warren buffeet....u think those uncle who hold public bank until now, they knew in advance public bank will be public bank as today the moment they brought n years ago? don't think so....

Posted by Alex™ > 2019-01-24 08:49 | Report Abuse

Hmm... I don't know. The financial community used to call it the bogle's folly. Today maybe still, a folly. How to huat with index fund?

Posted by Alex™ > 2019-01-24 08:50 | Report Abuse

Top up Fisher book, u need random walk.

Posted by kcchongnz > 2019-01-24 09:21 | Report Abuse

Posted by Alex™ > Jan 24, 2019 08:49 AM | Report Abuse
Hmm... I don't know. The financial community used to call it the bogle's folly. Today maybe still, a folly. How to huat with index fund?


I used to opine that index funds were suitable for those who have not much knowledge in investing but still prefer investing in the equity market.

However, with its growth and domination by just a few stocks which prices have gone up way above their perceived value, I change my opinion. It boils down again, to price versus value. Yes value investing.

Better to look for good stories cum with good values. If you can't do that (you can but most can't), get someone to do that for you.

Posted by stockraider > 2019-01-24 10:52 | Report Abuse

The theory of having a few narrow few concentrated stock or many diversify stocks come from game theory mah...!!

Say in assessing the probability of winning over losses in investment ur minimum hurdle rate is 1.4 to 1 . In your search u come across 2.0 to 1.0, 1.8 to 1.0, 1.6 to 1.0, 1.4 to 1.0 do u want to bet all since all of them is above ur hurdle rate of 1.4 or u only chose only to 2.0 to bet leh ??

Some people who is very confident would chose only to bet on 2.0 type as this is the highest return loh....!!

For Raider will chose to bet above 1.4 all but with skewed heavier bets towards 2.0.&.1.8 level according to probability of return loh..!!

Why Raider chose to bet all on the diverse route instead of concentrated that give u a highest return leh ??

It all boils down to whether u want a sure thing many times v a big thing one time loh...!!

This can explain based on 4 ekor loh...!! If u bet rm 10 every number on 4 ekor....u need rm 100,000 mah....!!! But ur payout is only Rm 65000, thus the house win Rm 35000 or 35%....in otherwords u only get 0.65 to 1 return...that is negative on punters loh...!!
But since the odds is 0.65 to 1.0 is the same, is the house willing to accept rm 100k on 1 single number bets leh ??

The answer is no loh....!!
Why no ?? The issue is due to risk of 1 single concentration and the risk element of luck mah...!!

Same applies to investment loh....even u r cocksure ur 2.0 return selection very high chance of winning, it is very risky of just sailang on it loh..!!
It is better u act like a betting house accept all ur selection that exceed ur numerical success rate of 1.4 mah...to ensure surewin loh...!!

It is a tradeoff from having superior return v smaller acceptable aggregrate surewin mah....!!

Posted by 10154899906070843 > 2019-01-24 11:00 | Report Abuse

Investing and betting is very different thing. Game theory is game theory.

Just because every ball come your way doesn't mean you have to hit everything. If you find one in the right place and hit, sure chun chun win la.

Risk only applies to those who don't know what they are doing.

Betting implies more luck less analysis.

Investing implies more analysis, less luck.

Very simple question which I faced through during 3 financial crisis:

When a crisis happened, which recover faster? Quality companies or cheap ones. And if you know it is quality companies, then my question is if you buy in bulk, you can get a high ratio of quality companies meh?

Average investors get average returns.

Posted by stockraider > 2019-01-24 11:09 | Report Abuse

It is the same mah...u still deal with uncertainty mah...!!

If u usually lose in the stockmkt as most majority of the participants..this means u r having negative return like to case of 4 ekor...u depend on the stroke of luck to help u to turnaround.

If u usually wins in the stockmkt and consistently this means u have consistent positive return, there point to some skew or bias why u usually wins mah...!!
This bias boil down to ur investment selection mah...!! But even if ur investment selection is great..u face the element of luck mah...!!

Those who bought genting group of companies b4 PH won the election should understand what i mean, when the element of luck turn agst u loh.....!!

Posted by 10154899906070843 > Jan 24, 2019 11:00 AM | Report Abuse

Investing and betting is very different thing. Game theory is game theory.

Just because every ball come your way doesn't mean you have to hit everything. If you find one in the right place and hit, sure chun chun win la.

Risk only applies to those who don't know what they are doing.

Betting implies more luck less analysis.

Investing implies more analysis, less luck.

Very simple question which I faced through during 3 financial crisis:

When a crisis happened, which recover faster? Quality companies or cheap ones. And if you know it is quality companies, then my question is if you buy in bulk, you can get a high ratio of quality companies meh?

Average investors get average returns.

Posted by 10154899906070843 > 2019-01-24 11:13 | Report Abuse

I would argue that uncertainty is bigger when holding more stocks, not less. Therefore even more risk.

But believe what you will.

Or better yet, read Jon choivo annual letter, he has 28 stocks right? How is his stock performance doing?

Posted by soojinhou > 2019-01-24 11:18 | Report Abuse

Haha. Hey Jon, another fler here belittling your feeble return. And Jon is the type that goes around insulting everyone else's investment strategy. Would love to see Mr long numbers and baby Jon face off.

Posted by stockraider > 2019-01-24 11:26 | Report Abuse

The reason why u lose so much in your aokam & renong in ur early days is bcos u have not learned to risk manage loh...!!

Even right now, from the way u talk & act raider don think u really learn the art of risk management loh....!!

Posted by 10154899906070843 > Jan 24, 2019 11:13 AM | Report Abuse

I would argue that uncertainty is bigger when holding more stocks, not less. Therefore even more risk.

But believe what you will.

Or better yet, read Jon choivo annual letter, he has 28 stocks right? How is his stock performance doing?

Posted by stockraider > 2019-01-24 11:32 | Report Abuse

Uncertainty is not risk when u factor in n price in the downside in your investment approach like an actuary mah....!!

U diversify ur concentration is to reduce the elimininate the run of luck in ur equation mah....!!

Posted by 10154899906070843 > Jan 24, 2019 11:13 AM | Report Abuse

I would argue that uncertainty is bigger when holding more stocks, not less. Therefore even more risk.

Posted by qqq3 > 2019-01-24 11:33 | Report Abuse

back in 20018, every young graduate come here to rpomote his favorite share based on PE, NTA, cash in bank, Balance Sheet dissected.....where are they today? Gone already....

3 iii and Long brings some thing else to the table....Some thing the doctor ordered for everybody....."only the best" will do....With the attitude that 99% of the stocks are rubbish, you are already a winner. Next is actually buy some stocks....forget value here, value there.....u cannot do it better than the market.......

Posted by stockraider > 2019-01-24 11:35 |

Post removed.Why?

Posted by 3iii > 2019-01-24 12:37 | Report Abuse

It is better for the public to know you as a poor performer when in fact you and your significant others know you are a star.

Posted by 3iii > 2019-01-24 12:38 | Report Abuse

Do not aim to beat the market. It is obvious to me that the majority in this forum cannot beat the market.

Posted by 3iii > 2019-01-24 12:38 | Report Abuse

Of course, a few did.

Posted by 3iii > 2019-01-24 12:42 |

Post removed.Why?

Posted by 3iii > 2019-01-24 12:45 | Report Abuse

calvintan

Based on my observation is a poor practitioner of value investing by Benjamin Graham.

Many in this forum has commented similarly.

He needs to re-read and reformulate his strategy.






Benjamin Graham, the founding father of value investing, was the first to recognize the quality problem among equities back in the 1930s.

- Graham classified stocks as either Quality or Low Quality.
- He also observed that the greatest losses result not from buying quality at an excessively high price, but from buying Low Quality at a price that seems good value.

Warren Buffett said that one wants to buy companies that can be run by idiots, because some day they will be.

Posted by 3iii > 2019-01-24 13:01 |

Post removed.Why?

Posted by stockraider > 2019-01-24 13:03 | Report Abuse

Corrections
3iii need to reread n reinterpret what benjamin says loh...!!

" He also observed that the greatest losses result not from buying quality at an excessively high price, but from buying Low Quality at a price that seems good value."

1. Buying quality at excessive price does Graham means counter like nestle and Ql at excessive PE 50x leh ??

2. Buying low quality at a low price that deem good value leh ??
THATS IS PRECISELY WHY RAIDER SOLD INSAS AT ABOVE RM 1.10 WHEN ITS NTA ABOUT RM 1.70 AND PE 15X LOH....THAT RAIDER SEE NOT ENOUGH MARGIN OF SAFETY MAH.....!!

GOOD VALUE MEANS HUGE MARGIN OF SAFETY NOT ONLY SEEMS GOOD VALUE MAH...!!
TODAY INSAS INARI INVESTMENT AT 19% HOLDING ALREADY EXCEED THE WHOLE MKT CAPITALIZATION OF INSAS.
INSAS IS TRADING AT PE 6X WITH NET CASH HOLDING OF RM 300M PLUS DIV OF 3% PA YIELD EXCEEDING NESTLE FIV YIELD OF 2.5% PA.
MOST OBVIOUS ITS NTA RM 2.54 V SHARE PRICE OF RM 0.70 LOH...!!


Posted by 3iii > Jan 24, 2019 12:45 PM | Report Abuse

calvintan

Based on my observation is a poor practitioner of value investing by Benjamin Graham.

Many in this forum has commented similarly.

He needs to re-read and reformulate his strategy.

Benjamin Graham, the founding father of value investing, was the first to recognize the quality problem among equities back in the 1930s.

- Graham classified stocks as either Quality or Low Quality.
- He also observed that the greatest losses result not from buying quality at an excessively high price, but from buying Low Quality at a price that seems good value.

Warren Buffett said that one wants to buy companies that can be run by idiots, because some day they will be.

Posted by 3iii > 2019-01-24 13:12 | Report Abuse

>>>>
THATS IS PRECISELY WHY RAIDER SOLD INSAS AT ABOVE RM 1.10 WHEN ITS NTA ABOUT RM 1.70 AND PE 15X LOH....THAT RAIDER SEE NOT ENOUGH MARGIN OF SAFETY MAH.....!!

GOOD VALUE MEANS HUGE MARGIN OF SAFETY NOT ONLY SEEMS GOOD VALUE MAH...!!
TODAY INSAS INARI INVESTMENT AT 19% HOLDING ALREADY EXCEED THE WHOLE MKT CAPITALIZATION OF INSAS.
INSAS IS TRADING AT PE 6X WITH NET CASH HOLDING OF RM 300M PLUS DIV OF 3% PA YIELD EXCEEDING NESTLE FIV YIELD OF 2.5% PA.
MOST OBVIOUS ITS NTA RM 2.54 V SHARE PRICE OF RM 0.70 LOH...!!
>>>>>








It is a non productive discussion.

Our smart chap here is fantastic.

He bought a share, it went up and he tells everyone he is buying more because it will definitely go higher.

The price drops and soon after, he tells everyone he was very lucky. Because he uses margin, he got a margin call, and instead of certain losses, he still has gains.

Soon after, he says he is buying again and now will hold forever .. will never sell. Why? Margin of safety loh. Margin of safety loh. Margin of safety loh. His mantra which failed him too often, too embarrassing to point this out to him. Nothing wrong with the margin of safety principle, a lot to do with the practitioner.


Then the price drops further, he buys more. More margin of safety.

Then the price drops by more than 70% from buying price.


I sold Insas and now I am buying again. :-)



Please teach that to your children not to play this game the way you do. Ask them to get a good education and a decent profession. Direct them to learn from KC and Mr 1015.

Posted by 3iii > 2019-01-24 13:32 |

Post removed.Why?

Posted by stockraider > 2019-01-24 13:46 | Report Abuse

Lessons

Pls do not trust growth in EPS and low PE so much loh...!! Earnings can unexpected collapse very fast anytime loh...!!

The margin of safety based on Earnings and growth is very volatile like the case of Hengyuan PE 5x v Nestle 50x and Ql 50x, in addition Hengyuan growth 200% v Nestle & Ql growth less than 20%....u thought Hengyuan got very big fat margin of safety based on earnings and growth...but this type of margin of safety based on earnings can collapse and disappear very fast loh...!!

In fact this condition of collapse again confirmed by the recent collapse of padini and topglove, share price fall drastically recently bcos of earnings disappointment again mah...!!

So do not listen to conman 3iii asking u all to buy NESTLE Pe 50x or high growth stock at lofty valuation....anytime the earnings can collapse very fast without warnings like what happen to hengyuan, topglove and padini loh...!!

Thats the reason why Ben Graham in the intelligent investor book, do not give too much emphasis on investment based on margin of safety using earnings based on profitability and growth route, but he prefer to use margin of safety based on huge discount on tangible assets and huge cash liquidity of the company with the huge share price discount bcos this tenet is less volatile & tangible and esy to employ loh...!!

It is not that u cannot invest based on growth and earnings route, in fact raider would encourage u do it bcos it is highly profitable loh...anyhow if u invested in hengyuan earlier, u will had made a huge profit unseen for many years, but u must act smart & be prepare to lari kuat kuat loh...!!

People like 3iii & Mr Long are unsuitable to advise u on this loh, bcos this people like driving cars, can only drive the car forward, but they don know when to tell u to brake and do reverse gear ala "LARI KUAT KUAT WHEN THINGS DON TURN UP RIGHT" MAH...!!

Raider is right to advice u to lari kuat kuat on hengyuan...in fact everyone should learn how to lari kuat kuat ....when condition & environment does not look right mah...!!

3iii to slander, raider below, as always after losing argurment he always do that mah...!!

It is a non productive discussion.
Our smart chap here is fantastic.
He bought a share, it went up and he tells everyone he is buying more because it will definitely go higher.
YES I BOUGHT INSAS AT AVERAGE COST OF AROUND RM 0.42 TO RM 0.45 BUT I DID ENCOURAGE READERS TO FOLLOW BUY MAH....!! BCOS HUGE UNDERVALUE WITH MARGIN OF SAFETY AT 0.45 MAH, JUST LIKE NOW RAIDER ENCOURAGING PEOPLE TO BUY INSAS AT RM 0.70 BCOS HUGE MARGIN OF SAFETY MAH...!!

The price drops and soon after, he tells everyone he was very lucky. Because he uses margin, he got a margin call, and instead of certain losses, he still has gains.
THIS KYY MAH...!! SEE THIS 3iii CAN SIMPLY LIE LOH...!!

Soon after, he says he is buying again and now will hold forever .. will never sell. Why? Margin of safety loh. Margin of safety loh. Margin of safety loh. His mantra which failed him too often, too embarrassing to point this out to him. Nothing wrong with the margin of safety principle, a lot to do with the practitioner.
IF INSAS MOVE UP FROM RM 0.42 TO RM 1.10 IS IT NOT MARGIN OF SAFETY HAS REDUCED N NARROWED LEH ?? THOSE PEOPLE DON UNDERSTAND MARGIN OF SAFETY FIND HARD TO COMPREHEND TO SELL WHEN UR STOCK were to RERATE MAH...!!

U BUY WITH BIG MARGIN OF SAFETY FROM MR MARKET & SELL HIM BACK WHEN HE RERATE N GIVE U A FAIR PRICE WHEN HE IS OPTIMISTIC

THIS WHAT BEN GRAHAM TAUGHT US, WHEN PRICE DROP BACK TO BIG MARGIN OF SAFETY LEVEL U BUY BACK TO TAKE ADVANTAGE OF MR MARKET MAH..!!
Then the price drops further, he buys more. More margin of safety.
Then the price drops by more than 70% from buying price.

THATS WHAT U SHOULD DO MAH...!!
I sold Insas and now I am buying again. :-)

DO U MEAN BEN GRAHAM TEACHING WHICH WARREN BUFFET ADMIRED ARE BAD EDUCATION AH ?? PLS LAH ASK YOUR CHILDREN TO AVOID READING BEN GRAHAM INTELLIGENT INVESTOR LOH...!! I THINK NO LOSS TO U LOH...BCOS U DON KNOW HOW TO INTERPRET ANYWAY MAH...!!
Please teach that to your children not to play this game the way you do. Ask them to get a good education and a decent profession. Direct them to learn from KC and Mr 1015.

Posted by stockraider > 2019-01-24 13:59 | Report Abuse

WHAT U BELIEVE ...U BELIEVE LEH ??

YES U BELIEVE....BUT U FAILED TO UNDERSTAND UR OVERVALUE PE 50X STOCK ARE BAD PREPOSITION LOH...!!

Posted by stockraider > Jan 24, 2019 01:03 PM | Report Abuse X

Corrections
3iii need to reread n reinterpret what benjamin says loh...!!

" He also observed that the greatest losses result not from buying quality at an excessively high price, but from buying Low Quality at a price that seems good value."

1. Buying quality at excessive price does Graham means counter like nestle and Ql at excessive PE 50x leh ??

Posted by 3iii > Jan 24, 2019 01:32 PM | Report Abuse

In investing, the investor is better off when he frames his thinking humbly.

I would like to start by saying:

1. I believe I cannot beat the market. I aim for market returns. PRECISELY U CANNOT BEAT THE MKT TRADING BUT U CAN VALUE STOCK BASED ON GRAHAM MODEL....BUY CHEAP WITH MARGIN OF SAFETY AND ONLY SELL MR MARKET RERATE UR STOCK OFFER U A GOOD PRICE LOH...!! IN OTHER WORDS U R VALUATION N PRICE DRIVEN AND NOT TIME DRIVEN MAH...U CAN BE PATIENCE N HOLD LONG TERM AS LONG THERE IS BIG MARGIN OF SAFETY LOH...!!
2. I believe I am not smart or capable enough to identify many undervalued stocks that I can flip by buying low and selling high. I aim to keep a few stocks i know well. IF U DO NOT KNOW HOW TO VALUE STOCK WELL ?? WHAT MAKES U THINK U KNOW A FEW STOCK WELL ?? ALWAYS START WITH THE MATHS MAH...!!
3. I believe I am not perfect in my valuation and can get this very wrong at times. Therefore, I keep to those stocks I know how to value using conservative assumptions. CORRECTLOH...IF U R NOT PERFECT.50X WHAT MAKES U THINK PE 50X CAN BUY LEH ?? IS IT NOT GAMBLING MEH ?
4. I believe I cannot predict the long term future of any stocks with certainty. I keep from making mistakes by investing into stocks with high quality businesses with durable competitive advantage I know off. Quality first, then Price. IF U CANNOT SEE LONG TERM FUTURE OR PROSPECT WHY WASTE TIME BUYING STOCK LEH ?? PUT IN FD LOH...!
5. I believe I do not have an edge when it comes to timing the market and flipping stocks like others. I stay with what I am comfortable and which I feel I have safety and edge.PLEASE DO NOT LINK TRADERS WITH BEN GRAHAM METHODS....HE IS NOT TIMING THE MKT...HE IS TAKING ADVANTAGE OF MR MARKET BASED ON STOCK VALUATION LOH...!!

Posted by Up_down > 2019-01-24 14:31 | Report Abuse

3iii In investing, the investor is better off when he frames his thinking humbly.
I would like to start by saying: 

1. I believe I cannot beat the market. I aim for market returns. 
“ I don’t think of beating market. I just wanted to surf with Mr. Market. Therefore, I will try to understand the characteristic of Mr. Market. What are the main conditions affect the temperamental of Mr. Market.

2. I believe I am not smart or capable enough to identify many undervalued stocks that I can flip by buying low and selling high. I aim to keep a few stocks i know well. 
“ I don’t think I am smart so I got to work harder than others so as to catch up with them. Initially, If one spend 4 hours in this business, I am willing to give an extra 4 hours to sharpen my knowledge and skills. I do my best to accumulate knowledge of the industry and companies in order to identify companies enjoying big trend in near future.

3. I believe I am not perfect in my valuation and can get this very wrong at times. Therefore, I keep to those stocks I know how to value using conservative assumptions. 
“ Perfection exists at our dream. I would rather be humble and accept my incorrect decisions if Mr. Market doesn’t recognize my view. Therefore, I would set a cut loss point and keep learning fine-tune the process of making a decision.

4. I believe I cannot predict the long term future of any stocks with certainty. I keep from making mistakes by investing into stocks with high quality businesses with durable competitive advantage I know off. Quality first, then Price. 
“ It not easy to make a long term prediction due to fast changing business environment and low availability of moat companies in Bursa. It doesn’t deter me from making a positive returns. I would spend more time doing research in predicting companies earnings and for 3 to 6 months. I believing this is part of the skill can be developed to take advantage of the Mr. Market. I got one holy grail….. setting a cut loss point.


5. I believe I do not have an edge when it comes to timing the market and flipping stocks like others. I stay with what I am comfortable and which I feel I have safety and edge.
“ I would accept my flaw of timing market. No mater how much I learn, I am absolutely unable to time the market correctly 100%. It doesn’t matter cause I understand the impermanent nature of the market. I do time the market to certain extend. I would adjust my Portfolio against Cash according my tolerance level of market risks.

Posted by stockraider > 2019-01-24 14:55 | Report Abuse

This updown comment is fair & reasonable n respectable although slightly differ from what raider had in mind....but certainly this advice are consider good loh...!!

Posted by Up_down > Jan 24, 2019 02:31 PM | Report Abuse

3iii In investing, the investor is better off when he frames his thinking humbly.
I would like to start by saying:

1. I believe I cannot beat the market. I aim for market returns.
“ I don’t think of beating market. I just wanted to surf with Mr. Market. Therefore, I will try to understand the characteristic of Mr. Market. What are the main conditions affect the temperamental of Mr. Market.

2. I believe I am not smart or capable enough to identify many undervalued stocks that I can flip by buying low and selling high. I aim to keep a few stocks i know well.
“ I don’t think I am smart so I got to work harder than others so as to catch up with them. Initially, If one spend 4 hours in this business, I am willing to give an extra 4 hours to sharpen my knowledge and skills. I do my best to accumulate knowledge of the industry and companies in order to identify companies enjoying big trend in near future.

3. I believe I am not perfect in my valuation and can get this very wrong at times. Therefore, I keep to those stocks I know how to value using conservative assumptions.
“ Perfection exists at our dream. I would rather be humble and accept my incorrect decisions if Mr. Market doesn’t recognize my view. Therefore, I would set a cut loss point and keep learning fine-tune the process of making a decision.

4. I believe I cannot predict the long term future of any stocks with certainty. I keep from making mistakes by investing into stocks with high quality businesses with durable competitive advantage I know off. Quality first, then Price.
“ It not easy to make a long term prediction due to fast changing business environment and low availability of moat companies in Bursa. It doesn’t deter me from making a positive returns. I would spend more time doing research in predicting companies earnings and for 3 to 6 months. I believing this is part of the skill can be developed to take advantage of the Mr. Market. I got one holy grail….. setting a cut loss point.


5. I believe I do not have an edge when it comes to timing the market and flipping stocks like others. I stay with what I am comfortable and which I feel I have safety and edge.
“ I would accept my flaw of timing market. No mater how much I learn, I am absolutely unable to time the market correctly 100%. It doesn’t matter cause I understand the impermanent nature of the market. I do time the market to certain extend. I would adjust my Portfolio against Cash according my tolerance level of market risks.

Posted by kcchongnz > 2019-01-24 15:41 | Report Abuse

Posted by qqq3 > Jan 24, 2019 11:33 AM | Report Abuse
back in 20018, every young graduate come here to rpomote his favorite share based on PE, NTA, cash in bank, Balance Sheet dissected.....where are they today? Gone already....
3 iii and Long brings some thing else to the table....Some thing the doctor ordered for everybody....."only the best" will do....With the attitude that 99% of the stocks are rubbish, you are already a winner. Next is actually buy some stocks....forget value here, value there.....u cannot do it better than the market.......


Back in 2018, with the attitude that 99% of the stocks are rubbish, qqq3 has wisely chosen remaining two stocks in Bursa which of course he thought were the only two not rubbish and the best, and shouting sailang, margin, business sense, panic moment, dynamite investing for the whole year.

He only knew about price, but nothing about value.

So what was the consequence? All newbies were cheated of their hard earned money, and he said he made killings again and again.

What does that mean?

Posted by qqq3 > 2019-01-24 21:04 | Report Abuse

My take as a guide,

Less than RM100k capital: 5 stocks

RM500k: 10 stocks

RM1m: 15-20 stocks

More than RM10m: more than 30 stocks

===

I guess makes sense if u are average guy.....


but if you are big hitter...with above average intelligence and above average ambition.....u can go bigger than that....way bigger and way more focus than that....eg...Philips and KYY......

The trick is how to move from category 1 to category 2.....

Posted by qqq3 > 2019-01-24 21:05 | Report Abuse

some have called it the killer instinct.....u have it or u don't.....

Posted by probability > 2019-01-24 23:03 | Report Abuse

how many stocks to own?
......................

had always been very tricky to answer...after considering all inputs...
the below is the best i can derive currently:

(1) This decision should not be linked to the magnitude of money you have to invest....magnitude has no meaning without a comparison to another...and its highly subjective to the owner of the money...

(2) Direction of the price movement is the only criteria.....and this variable is dependent on what you think is your edge against the market is on valuation...it all depends on your own conviction & experience (no others can answer this)

Factor (2) automatically affects the number of stocks you can hold...as you cannot have 10 children and take care of them like you have only 1...considering the average full time investor capacity...i think they should not have more than 6 stocks..you can say X number of stocks depending your mental capacity & knowledge.

So its more like before the magnitudes (1) becomes the constraint on number of stocks (say due to ability to acquire & dispose without affecting the stock price significantly)...its most of the time the ability to manage & study stocks with an edge (2) is the major constraint...

...............


so, its more like...'try not to have more than X stocks - above which you cannot manage extraordinarily' in your portfolio....independent to the money you have...as its more about your conviction than the magnitude of money you have that will be the constraint in achieving extraordinary performance (ROIC > WACC)

*Thanks to Mr.Long number for being the catalyst on this conclusion

Posted by qqq3 > 2019-01-24 23:09 | Report Abuse

probability > Jan 24, 2019 11:03 PM | Report Abuse

how many stocks to own?
......................

had always been very tricky to answer.
===========

its better to result from a decision ...not a result of speculations went wrong....accidental as in most cases.....

Posted by probability > 2019-01-24 23:10 | Report Abuse

short and simple...kinda agree on that

Posted by qqq3 > Jan 24, 2019 11:09 PM | Report Abuse

its better to result from a decision ...not a result of speculations went wrong....accidental as in most cases.....

Posted by qqq3 > 2019-01-24 23:29 |

Post removed.Why?

Posted by 10154899906070843 > 2019-01-24 23:32 | Report Abuse

The problem with Stockraider is he thinks I am a rookie and have never tried his investing methods. Guess where I was in the 90's? Watching and reading security analysis and intelligent investor just like him. Did you know security analysis changed the theories, examples and applications for every edition based on latest data? I know, I've read every edition to try to understand the differences of investing in the the thirties (first edition), the fifties (third edition) and the late eighties ( sixth edition). Now why did I do that?

I was realizing when I tried technical analysis to trade stocks that I found a counter pattern. Each time I tried a new indicator that worked, after a few weeks and months suddenly the trade signals would change on me and I went from making money to losing money again.

Then I realized something. Each time I tried margin of safety value buying, it always seemed I was buying a penny stock. When I set my stock selling at 80% of intrinsic value, the market changed on me at 50%. When I started selling at 50%, things changed on me at 20% intrinsic.

I may have been too blind to realize it, but penny stocks are subject to syndicate behaviour. And obviously they too know exactly what is a cigar butt. They used it every day to make money off idiots like me.

Posted by qqq3 > 2019-01-24 23:41 | Report Abuse

They call it a small world, an inter connected world....Books written by Wall Street for Wall Street equally applicable in Malaysia?

Or is every country different? every era different?

what does history and practise show us?

Posted by qqq3 > 2019-01-24 23:44 | Report Abuse

dead stocks....why so many dead penny stocks apparently even got values several times market values.....why so many Insas in Malaysia?


https://klse.i3investor.com/blogs/qqq3/187899.jsp

Posted by 10154899906070843 > 2019-01-24 23:46 | Report Abuse

For those that remember the Asian financial crisis of 97, I was there. Imagine multiple hengyuans being sold at low pe, high nta, big asset base. You were making good money buying basically anything and everything.

And even until the end, aokam perdana had huge nta with 10,000 hectares of timber land. Renong with its plant assets far far more than its bankruptcy price. Etc etc.

My point being high margin of "safety" stocks only seem safe, until it's not.

Did you think hengyuan at 18 had high margin of safety?

Did you think xingquan with oodles of cash has high margin of safety?

Think about it. If you really wanted to, you could turn numbers around to mean anything you want.

If a company is doing badly and the shares tank, it could mean that it's undervalued. But it can also mean that the business prospects changed and it's going to go bankrupt soon, right?

Posted by 10154899906070843 > 2019-01-24 23:54 | Report Abuse

But to be perfectly honest, my personal investment life changed after I stopped looking for undervalued cigar butts and decided to look for undervalued premium growth companies.

I can literally say I made millions participating in the long term, compounded performance of good companies.

I will not say if my method is better or Stockraider method is wrong, because that would be silly. To be honest we are both doing the same thing, looking for the margin of safety in a stock.

The difference is where we do the looking.

If Stockraider can look sslee,3iii and me in the eye and say he made millions by investing in his cigar butt way, I will immediately cut a 1 million dollar cheque to a charity of his choice.

That is verbatim.

Posted by lwyy60 > 2019-01-25 00:01 | Report Abuse

All in all, only one phase of words represent it , "there no right nor wrong, only work or doesn't". Good fundamental company also can get worsen if handle by bad management or leader. Only good leader can bring company to next level and also if you aware of future type business, soon or later u will archived financial freedom. Good luck all.