Posted by Choivo Capital > 2019-11-27 09:51 | Report Abuse

Connie,

Lets make a fun bet ok.

You prepare a portfolio of stocks, i just pick one petron. 3 year later, see which one higher.

Loser donate 10k to nasi lemak auntie to expand business.

Posted by Choivo Capital > 2019-11-27 10:04 | Report Abuse

My rce sold at one month after the 3rd year anniversary actually. :)

No idea why this is relevant though.

Posted by Up_down > 2019-11-27 10:31 | Report Abuse

Everything happens for a reason. Many Bursa retailers have turned into short or mid term investors due to the structural issues of the local business. Many companies are involved in short cyclical business in nature with more than 90% of the listed companies.

Posted by Up_down > 2019-11-27 10:31 | Report Abuse

Don’t blame the short sighted of Bursa retailers, it’s the environment causing them to protect their capital as a first priority in such situation. Is it pump and dump? Go for DJ companies with strong moats if you want to seen to be noble in investing for long term or follow 3i.

Posted by Up_down > 2019-11-27 10:56 | Report Abuse

It’s unethical not to make money in a business for long term. The business would certainly go burst. So..it is unethical too for being not able to protect our capital investing or trading in share market. The risks of being extinction.

Posted by Fabien "The Efficient Capital Allocater" > 2019-11-27 11:25 | Report Abuse

if the company is growing 20% over the next few years, it's fair to pay PE 13x (though note that i didn't pay 13x, i believe its a fair valuation. my cost is at single digit PE)

whether it's a great long term investment, i'm not sure.

it's not my core holdings anyway.

Posted by Fabien "The Efficient Capital Allocater" > 2019-11-27 11:33 | Report Abuse

but i do have to take note of what Ricky pointed out.

the competitive landscape surrounding the industry.

and the ability to scale up.

Posted by Ricky Yeo > 2019-11-27 12:52 | Report Abuse

if a company can compound 20% over 3-5 years, then one should buy all they can at 13x.

But to achieve 20% growth, assume dividend payout of 0%, ROC has to be 20%.

Posted by Fabien "The Efficient Capital Allocater" > 2019-11-27 13:48 | Report Abuse

it's getting closed to that i believe.

if i'm not wrong, latest ROIC is at 18%

Posted by Icon8888 > 2019-11-27 13:50 | Report Abuse

All these ROIC thing nonsense

Look at Dufu, UWC, MI, etc

What is their ROIC ? How much are their PE ?

Get my point ?

Posted by Ricky Yeo > 2019-11-27 16:32 | Report Abuse

Let me try to translate your point so I can get your point

All these "smoking is bad" nonsense

Look at my uncle, my neighbour, my friend etc

What is their health (super healthy)? How much they smoke (a pack a day)?

Get my point?

Posted by popo92 > 2019-11-27 23:30 | Report Abuse

scientex plastics packaging division have recorded lower margins than thong guan all these years(latest quarter slightly surpass tguan merely 1.59% ebit), so if you consider plastics packaging only scientex's roic would be worse than thongguan. Of coz you need to consider what industry are they into. You are comparing peers not Semiconductor companies like MI who currently have ROIC of 25% and its still growing fast.

Posted by Ricky Yeo > 2019-11-28 04:32 | Report Abuse

So what are you trying to say?

Posted by Ricky Yeo > 2019-11-28 06:31 | Report Abuse

Scientex spent >$500 mil making acquisitions over the past 5-6 years so ROIC will definitely get dragged down due to a massive increase in invested capital. And if Scientex continue to acquire other companies in the future, which they will, ROIC will continue to be less than TG. But then again, investing is about paying for future ROIC, not past ROIC; future cash flow; not historical cash flow.

Posted by Ricky Yeo > 2019-11-28 08:45 | Report Abuse

And this comes back to Icon's point, why some stocks have disconnection between their ROIC and PE i.e low ROIC but high PE.

Why did Scientex's share price went up 800%, P/E expanded from 7x to 17x, over the past 7 years, while TG's share price only went up 200% during the same period when TG's margin and ROIC is superior to Scientex (excluding property division)? Because the market has higher expectation that Scientex's aggressive expansion will increase future cash flow (once they slow down their expansion), thus generate a sustainable and gradually higher ROIC in the future (when utilisation rate catches up).

Not saying TG is bad or anything, 200% gain in 7 years is impressive, but ROIC cannot be interpreted based on the number itself. Investor has to connect that number to what the business is doing. ROIC is not a formula, or a meaningless number on a stock screener, but a starting point for investor to understand the business strategy.

ROIC is like the bananas (fruits) on a banana tree. IF you see beautiful bananas (ROIC), you want to pay more to own the tree. But if you see disease and pest eroding the tree roots, then you will pay less because future bananas will be less or even none. In contrast, a banana tree might have little to no fruits now, but if one is to look at its healthy roots, strong trunk, fertile soil, then one would pay more knowing the future banana will be abundance and delicious.

Hope you get the analogy. The point is: Don't always look at the fruits, the fruits right now is irrelevant, you're paying for future fruits (future cash flow), and the only way to be sure you'll get alot future fruits is to look at the tree, the roots, the trunk, the soil, the weather (industry).

Posted by Ncm88 > 2019-11-28 08:53 | Report Abuse

Sell now retracement wait at 3.2

Posted by jiaen0509 > 2019-11-29 18:39 | Report Abuse

Buy at RM3.44 and now the price dropped to RM3.30 at 29-Nov. Shall I give it up or hold it for long term? Newbie here

Posted by Fabien "The Efficient Capital Allocater" > 2019-12-02 16:12 | Report Abuse

newbie, perhaps you should stay away from the market, learned your trade (read up and learn from the experienced investors) before investing your hard earned money.

the market is very unforgiving.