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kcchongnz blog

Author: kcchongnz   |   Latest post: Sun, 8 Oct 2017, 12:47 AM

 

Ever-Sendai: An investment filled with business sense? kcchongnz

Author: kcchongnz   |  Publish date: Sun, 8 Oct 2017, 12:47 AM


“..there are two possible endings to every story.”― Christie Watson, Tiny Sunbirds, Far Away

In my last article published in i3investor, “Margin Finance, EverSendai: A real time case study” below,

https://klse.i3investor.com/blogs/kcchongnz/133708.jsp

I use Eversendai to illustrate the peril of using share margin finance (SMF). Sendai was trading at 80 sen then, just for sharing purpose.

I illustrated that with SMF of 50%, a speculator following the “sailing” call punting on Sendai at RM1.37 would have lost a whopping 83%, in just two months! This has not included the set-up cost, the interest payment for the SMF, and other transaction costs.

That punter would have encountered margin calls, and as he had already “sailing”, and likely had no more money to top up his margin maintenance account. His investment banker would have sold off all his Sendai shares at huge loss, a confirmed and realized loss.

Here I received this interesting comment.

 

[stockmanmy has left a new comment on your post "Margin Finance, Ever-Sendai: A real time case study kcchongnz":

sendai from 80 sen to 95 sen now...................
KC lousy timing, lousy business sense and lousy analysis.]

 

What is so interesting about this comment?

"The stock market is filled with individuals who know the price of everything, but the value of nothing." - Phillip Fisher

The fellow above only knows about price movement of Sendai, without the faintest idea what its value is and was so sexcited when Sendai went up from 80 sen to 95 sen. He forgot that he had been asking people in i3investor to “sailing” with margin finance all over the place when it was trading at RM1.37. He doesn’t care that those who followed his calls had got their shares forced sold at about 80 sen, and hence had incurred huge losses, without having a chance to recover.

“Lousy timing”? Lousy timing writing the article when Sendai was trading at 80 sen and now it is 95 sen?

I have been writing about articles telling another side of a story about margin finance all the time, and timing of when to write has never been in my mind. I had no idea whether the share price of Sendai would go up or go down at the time of writing, nor do I know if it will go up or go down in the future. By the way, I have no interest on that.

Spending an hour trying to predict the future movement of the stock market is an hour wasted in your life.”

“Lousy business sense” not investing in Sendai?

I would like to spend some time discussing the above statement by that fellow.

 

No business sense not investing in Sendai

Before deciding if to invest in Sendai, I would first seek answers to a few simple questions as below,

  1. What is the industry it is in, and how is the competitive environment?
  2. What is the expected bottom line, rather than the size of the order book?
  3. What are the risks?

Construction industry, which Sendai is involved in, is filled with many problems and uncertainties. It is a dog-eat-dog world. Contractors, unless they have good contacts for negotiated contracts or they have special skills, win jobs by competitive pricing, and hence margins are generally low. Otherwise, forget about getting the job.

There are many reasons which can delay the construction works and causes cost overrun, almost for all construction projects, all the time. There are also a lot of contract disputes, payment problems, which often, contractors are the one who suffer most.

Is Sendai suffering from this predicament?

Please refer to my analysis on Sendai in the thread “Banging On EverSendai: Risk and Return” below,

https://klse.i3investor.com/blogs/kcchongnz/132084.jsp

 

Low margin, cost overrun

The net profit margins of Sendai were very low at about 3.5% over the last few years. Suddenly last year, it announced a huge loss of RM274m! In the cash flows aspects, it was even more precarious. At the cash flows from operations (CFFO) level, there already huge deficits the last two years, RM53m in 2016, and RM216m in 2015. Free cash flows (FCF), after capital expenses, were negative 4 out of the last 5 years. In the last 4 years, the company bled a whopping total of RM662m in cash.

That is the problem with construction industry when a construction company has to undergo competitive bidding for job. Many companies tender at low margin in order to secure the job. When everything goes smoothly, the company earns a low margin. However, when they encounter problems, most construction companies will encounter problems all the time such as cost overrun, and work delays, their jobs turn into losses, often huge losses like what happen to Sendai last year.

Why is avoiding investing in this type of low margin construction company considered as lousy business sense as claimed?

 

Construction Disputes

Construction is full of disputes, all the time. Contactor often claims that there are additional work and entitlement of claims for additional time and overheads, whereas the clients and consultants always accused the contractor of work delay and hence impose liquidated damages. There are always two sides of the story, and unfortunately, the contractor is always at the losing end.

The contractor may go for arbitration, or court cases, but ultimately the contractor is always on the losing side. Make no mistake about it.

Ever wonder why there have been growing receivables up to such a whopping RM1.7 billion, and suddenly such a big write off and losses of RM274m last year for Sendai?

Is it really such a lousy business sense avoiding in investing in a construction company with low margin but full of risks and uncertainties like that of Sendai?

 

Bankruptcy risk

Total borrowings of Sendai in the most recent quarter have ballooned from RM254m in 2012 to RM1190 million now with total debts 1.4 times its equity.

 

It is no surprise that there will be many cash calls to come for the next few years. The private placements, at 10% discount, as I see it, the company has no choice but to get this money fast, to pay down debts and money for working capital. I doubt the banks are lending more looking at its risks. If I were a shareholder, I would be very reluctant to put in more money too.

Is that really a lousy business sense avoiding investing in a risky company like that of Sendai?

 

Conclusion

In my opinion, it is full of business sense avoiding investing in a construction company with huge losses, low margins, and a precarious balance sheet.

If one really keens on investing in construction companies, there are so many others with higher margins, more predictable and stable and visibility in earnings, and cash flows. Many of them with solid balance sheet, and good dividends.

Focus on investing in a business of a company, with business sense, true business sense of course, rather than the price movement of a piece of paper.

Think of the downside in investing, the upside will take care of itself.

Invert, always invert.

 

KC Chong

ckc14invest@gmail.com

Labels: SENDAI
  13 people like this.
 
Davidajy Very well written! :)
08/10/2017 03:04
king36 From an experienced top grade Engineer who had involved in construction for a long time we can see the quality of KC's understanding of construction activities.
This couple with his knowledge of stock make KC's writing a MUST read for me.
TQ KC.
08/10/2017 04:24
new_in_share Rather than condemning why not recommend what shares can buy?
08/10/2017 04:43
ccmeow Sendai is doing high end steel design and build construction, which is different from the general type of construction, where the contractor need to submit competitive tenders.
There are few construction companies in Malaysia have the expertise of high end steel design and build business . I read from the news that Sendai has secured many projects in oversea countries . Being a Malaysian company and having pool of local staff ( design and project management), I think Sendai's cost on running projects should be much cheaper and it will help in the profit margin.
With regards to construction dispute, my opinion is that , unless the project is poorly manage with many mediocre personnel, there should not be unresolvable dispute. Sendai might have such minor problems, in the past, but we should not jump into conclusion that Sendai's future projects will end up in construction dispute.
I sincerely hope that Sendai will succeed in its plan to become a reputable construction company, like Gamuda, IJM , Sunway....
08/10/2017 05:48
kcchongnz Posted by new_in_share > Oct 8, 2017 04:43 AM | Report Abuse
Rather than condemning why not recommend what shares can buy?


Invert, always invert.

If you are new in share, you better change your mind set.

1) Don't look at alternate view as condemning the share you hold, but something to ponder about. By the way, read the article properly; is it about condemning, or sharing of facts and information or different opinion.

2) Think deeply about why people want to recommend you what shares to buy in a public forum. Is there tooth fairy in the stock market?
08/10/2017 07:18
360Capitalist Totally agree with KC Chong
08/10/2017 07:34
ilovehits Uncle Koon sialang, KC sailing, nobody sailang. Kikiki... Anyway, I just wonder why nobody interested in INSAS.
08/10/2017 08:14
lachai2004 Investors who follow KC's way of investment are able to survive through the bear & bull markets with minimum of turbulents, but if investors have learned to sailang with borrowed money, then it's very likely that you wil go through a roller ccoater life with a lot cchallenges!
08/10/2017 09:05
kcchongnz Posted by ccmeow > Oct 8, 2017 05:48 AM | Report Abuse
Sendai is doing high end steel design and build construction, which is different from the general type of construction, where the contractor need to submit competitive tenders.
There are few construction companies in Malaysia have the expertise of high end steel design and build business . I read from the news that Sendai has secured many projects in oversea countries . Being a Malaysian company and having pool of local staff ( design and project management), I think Sendai's cost on running projects should be much cheaper and it will help in the profit margin.
With regards to construction dispute, my opinion is that , unless the project is poorly manage with many mediocre personnel, there should not be unresolvable dispute. Sendai might have such minor problems, in the past, but we should not jump into conclusion that Sendai's future projects will end up in construction dispute.
I sincerely hope that Sendai will succeed in its plan to become a reputable construction company, like Gamuda, IJM , Sunway....


I also hope a home-grown construction company can excel internationally. Yes I do.

However, my articles on Sendai aim to provide an alternative view about investing in Sendai, especially with borrowed money, touted by some people in the forums here. This becomes especially dangerous for newbies, who think they will never be wrong following the calls by some respectable figures in our society.

Investing is about the future, not the past. I am not jumping into conclusion that the future will resemble the past, that Sendai may, unlike the past, will be doing very well in the future, with its huge order book.

Its CEO also mention that they will complete all projects on the time, though he never talk about the bottom line.

Will I sailang Sendai based on the two points above?

Hell no! If you do, it is your prerogative. You may succeed too, I don't know.

“..there are two possible endings to every story.”

For me, I like what Winston Churchill said,

“The further backward you can look, the farther forward you are likely to see”
08/10/2017 10:09
supersaiyan3 Well written!
08/10/2017 10:12
smartly in an investment world there are all sort of ppl with all sort of mentality :-
FA
TA
FA + TA
opportunist
day traders
long-term investor
trend follower
contrarian
risk taker
save heaven investor
ignorance
newbies
pure follower
offender
etc etc etc....

all these blend out to be an interesting investment world. hence, some make money some make loses even though both investing on a same stock. the same type of rice raises up a 100 types of diff ppl......no one own a holy grail system that guarantee a profit forever. the one that can sustain long lasting in investment arena will be the winner. no right or wrong in every category, style, sharing, trade behavior or all sort...white cat, black cat, catches mice is good cat.
08/10/2017 10:23
kevin008 follow big 'shark' macquarie bank never wrong..u think they stupid one invest in those company u think high risk haha..or like those just think they wan few sen earn only ...u knw who im saying haha
08/10/2017 12:15
blackspy nice write up KC
08/10/2017 13:22
Sorimachi Another good article from KC
08/10/2017 13:48
moneykj How many times Kc had written articles about Sendai. Restless tries, what's his intention?
My second round for this counter avrg at 1.08. Tak takut langsung.
08/10/2017 13:56
Beary moneykj, I have lost count how many times you cut loss on Sendai.

Wish you better luck this time.
08/10/2017 14:40
moneykj I bot below 0.50 n sold 1.30 for first round. Investment is not about 1 or 2 months. Let's judge after 6 months for my 2nd round.
Fundamentalist like Kc also don't like high gearing Pmetal when the price at 0.71(adjusted price) last year. What's the price now?
Another counter you may not like is Brahims... I start buying last week, judge my ability after 2 months.
08/10/2017 15:13
kelvin61 On the dot by KC. I said it the last time and I will say it again. Sendai is a lousy stock to buy based on its past performance and precarious balance sheet. Wonder why super investor or super speculator thinks it's such a good buy. You guys decide.
08/10/2017 15:35
moneykj Ccmeow is quite new in share investment. Don't bully him la..
08/10/2017 15:42
moneykj Kc just can't convince me in his stock pick lor. ONE year Stock Pick.
08/10/2017 15:46
stockmanmy people who leave behind positive notes are only encouraging lousy timing, lousy business sense and lousy analysis.
08/10/2017 16:56
Jay put in simply, sendai has a poor track record in executing its contracts profitably. for construction companies, focus should not be on how much contract they win but how much they can earn from it
08/10/2017 18:39
Alex Foo actually, if i remember reading uncle KYY's previous advice, he recommended not to touch property and plantation and GLC's stocks. But construction, I need to read back.

btw, sifu KC i guess he purposely type 'sailing'. So we have a new term now =)

sailing dia~
08/10/2017 22:04
Alex Foo i've been following fisher's qualitative approach to investing as per his popular book 'common stock and uncommon profit'. That quote you had there still resonates with me all the time.
08/10/2017 22:07
3iii More selling of Can-one stocks by KYY.
09/10/2017 12:26
kcchongnz Posted by kevin008 > Oct 8, 2017 12:15 PM | Report Abuse
follow big 'shark' macquarie bank never wrong..u think they stupid one invest in those company u think high risk haha..or like those just think they wan few sen earn only ...u knw who im saying haha


I recommend you to watch this show,

The Wolf of Wall Street
09/10/2017 13:42
kcchongnz Posted by moneykj > Oct 8, 2017 01:56 PM | Report Abuse
How many times Kc had written articles about Sendai. Restless tries, what's his intention?
My second round for this counter avrg at 1.08. Tak takut langsung.


Luckily you did not take 50% margin finance. Otherwise you would have got friendly margin call from your broker when the share price dropped to 80 sen last week,

So what do you think is my sharing on Sendai here?
09/10/2017 13:53
mamakspecial there is no right or wrong..but i think sendai is not as bad as sapura energy la...i heard a guy keep topping up it from rm4 plus to now..he keep averaging down even though oil price was freefalling.

Should you do it with sendai..the only answer is no one knows...is this price the bottoming price and you managed to average it down and maybe profit from it??

Happy investing.
10/10/2017 12:04
lching like
10/10/2017 12:08
kcchongnz Posted by mamakspecial > Oct 10, 2017 12:04 PM | Report Abuse
there is no right or wrong..but i think sendai is not as bad as sapura energy la...i heard a guy keep topping up it from rm4 plus to now..he keep averaging down even though oil price was freefalling.
Should you do it with sendai..the only answer is no one knows...is this price the bottoming price and you managed to average it down and maybe profit from it??
Happy investing.


Seriously, players in Bursa should also think about the value of the share, rather than only the price.
10/10/2017 12:43
PlsGiveBonus How I turned $500 into $25,000, and will most likely turn that into millions and you can too. [aka Crypto101]
5 months ago
decentralizd62 in cryptocurrency


1. Buy everything you believe in. And keep up-to-date on them.
Remember back in 2012 when Bitcoin started to get semi noticed by the world and had its first glimpse of greatness? Remember when people preached of Bitcoins being worth $1,000,000? Well Bitcoin was worth $90-$400 around those times, back when having a single article on Forbes about Bitcoin was unthinkable. But look around, we are slowly climbing the mountain. Even with all the drama, price dumps, exchange crashes, government stupidity & weak handed sissies, Bitcoin still grows. We are are at all time highs and I wouldn't be surprised if we hit $4,000 Bitcoins this year. Then after Bitcoin corrects, altcoins will boom.

That brings us to altcoins, who's market has also grown tremendously in value as of lately, owning the coins you believe in, have researched and keep up to date with are the ones that will help you grow, you have one advantage everyone else does not, you know why this coin is valuable. All you need now is for everyone else to know it as well and you are in the green. And that day will come.

2. HOLD IT. 3mo-1yr, Buy on mega dumps.
Don't be that guy that bought PIVX at 10 cents just to have sold it at 16 cents... if you buy something and you know why you bought it and have done you research, you are much less likely to get weak hands and sell for minimal profit. All of these projects have so much room for growth and dumping early is one of the easiest ways to kick yourself for years to come. So instead of dumping with the market when everyone starts taking profit, start buying and increase your stash of cheap coins, because one day, all of these coins will be worth 10-1000 times what they are today.

3. Once you are up 200-300%, sell your initial investment. Trust me.
Obviously theres risk involved in crypto, so to be more safe and secure your investments, when your some of your alts have a mega spike, why not sell 1/3 of your coins which usually equals out to your initial investment and put that back into something more stable like Bitcoin until the price corrects? It always happens, no matter the coin. And it helps you sleep at night, or atleast not wake up at 5am to check the price lol.... you know you have all done it...

4. Buy More, Hodl More.
Crypto is bullish. Every chance you get you should be purchasing more BTC with USD, earning more BTC online, buying more Altcoins, increase your positions in your favorite alts and just get involved in general. The only way crypto is going to 'go mainstream' is if everyone adopts this mentality. You can already LIVE on crypto currency and I personally do so quite well. So why not shake the past and start living in the future? FIAT is a dying concept of money and we all know it, therefore we should all be dumping our FIAT for Bitcoins and other cryptos.

5. Oh and don't forget to keep growing your coins, using Steemit for example!
A great way to increase your stash without pulling money out of your pocket is to simply be active, use services like Steemit.com, be active on subreddits about crypto, be active on your favorite forums about your favorite crypto or whatever it may be and I promise it will pay of for you, you will either get in early on a generation 3 currency, earn alot of $$ on Steemit or even find yourself a sweet blockchain funded job! Those seem to be all the craze these days..

6. Crypto is a Bullish market overall, don't forget that folks, FIAT is dying before our eyes.
Like I said before, crypto is bullish, any coin that stays alive for the next 5 years will see insanely gains no matter what, its the nature of the system. While I don't suggest to buy more than you can manage, owning more than 1-2 coins is a very good idea for the next couple years, even if some short term losses occur overall we're all going to make quite a hefty amount of profit due to the nature of the systems we are investing into. We are still early adopters folks!
10/10/2017 18:13
kevin008 if u follow macquarie bank now u already laugh to the bank
masteel , trive up so much
vivocom and sendai in the process.
still think about business sense or accounting ? think of big shark la
11/10/2017 12:26
mwong3 SENDAI: Early stage of Wave 3 kicked in ! My target is $1.40/$1.8/$2.40
https://youtu.be/XpOqfOZ7pBs
15/10/2017 17:18

Margin Finance, Ever-Sendai: A real time case study kcchongnz

Author: kcchongnz   |  Publish date: Wed, 27 Sep 2017, 07:49 PM


“The world is not dangerous because of those who do harm, but because of those who look at it without doing anything”. Albert Einstein

 

I have read a good article on “Who’s afraid of share margin facility?” a few days ago in the link below,

http://klse.i3investor.com/blogs/elsoft/133215.jsp

Note there is this word of a company, Elsoft, in the link above. He must be an investor in Elsoft.

At the end of the article, there is this statement below,

So, what are your thoughts about leveraging and SMF in general? Do leave a comment.”

I love this kind of writer. He encourages discussions and exchange of ideas. This is what i3investor should strive for in its forum.

With that, here are my comments.

 

The article above propagates the advantages of margin finance in magnify gains investing in stocks, and at the same time providing additional liquidity to take advantage of an opportunity when it arises.

It did mention that the magnifying gains only if the gain is more than the cost of borrowing of 5%, and that this 5% interest rate “is quite high”, he said.

It also presenting the dark side of margin finance, which it mentioned,

Leverage is a double-edge sword.

And,

Leverage is risky and often works in the opposite by magnifying your losses.”

It further elaborated that,

A costly interest rate is further exacerbated by the fact that any outstanding sum on unpaid interest will be added onto the principal amount (like an interest of a credit card). In other words, interest is compounded.”

It is all good so far, an unbiased view indeed.

And here are the conclusions of the article,

  1. Margin finance is a good debt as it allows one to generate income from it.
  2. Every investor should have a margin account

I can see the writer had made a lot of money using share margin finance (SMF) investing in Elsoft. And he is suggesting everybody to use SMF.

Nothing wrong too as this is his opinion. Everyone is entitled to his own opinion. It is probably from his own experience too.

I have written a few articles on Elsoft about two and a half years ago when it was trading at RM1.91, or an adjusted price of RM1.15 in the links below,

https://klse.i3investor.com/blogs/kcchongnz/74663.jsp

https://klse.i3investor.com/blogs/kcchongnz/74842.jsp

https://klse.i3investor.com/blogs/kcchongnz/75038.jsp

If the writer has invested in this stock two and a half years ago, he would have made a total return of about 126%, with his own money. If he were to utilize the margin finance, say at 50% leverage, after interest costs he would have made about 230%, in two and a half years!

That is the wonder of SMF.

I would be biased here that SMF is so good by using just one example investing in Elsolf. Let us be impartial a little using another example, EverSendai.

 

Why Sendai?

I chose Sendai because this stock has been heavily promoted in i3investor, and many “investors” here are very keen on it because of certain factor. It is a hot stock.

It is no point of talking about “How I made so much money investing using SMF in Sendai a year ago when it was selling at 47 sen, and I sold it at RM1.37.”

Few knew about Sendai a year ago when it was selling cheap, as no one promoting it yet anyway.

As I am a risk-averse person, and I strongly think everyone should be risk-averse in the stock market with your hard-earned money, I would talk about,

How I avoid losing big using SMF investing in Sendai”.

Well, it is just my opinion. You do not have to agree.

 

“Investing” in Sendai using SMF

I have written an article about “Banging on Sendai: Risk and Return” two weeks ago in the link below,

https://klse.i3investor.com/blogs/kcchongnz/132084.jsp

Yes, as you can see, I would never invest in Sendai at RM1.37 then. I have a lot of reservations about this company. Well, again, this is just my own opinion.

I wrote the above article to share my view on this stock because sometime in mid-July this year, there was this person who continued asking young persons to “sailing”, presumably in the stock market, using Sendai, and another stock Jaks, as examples.

“Sailang” is a colloquial word, meaning betting everything you have on a hand of cards in poker. He said if you want to drive Royce Roy, you must “sailing” Jaks and Sendai! He posted heaps of comments about it, practically flooding the whole forum, every day.

Sendai was trading at about RM1.37 then at its high.

At the close yesterday, Sendai fell to 80 sen, for a loss of 42%, in just two months!

What would happen if one followed the “sailing” call, and bought say 100000 shares of Sendai at RM1.37, or for RM137000, using SMF?

 

The Peril of SMF

Without any SMF, this investor would have lost RM57000, or 42%. With SMF of 50%, he would have lost a whopping 83%, in just two months! This has not included the set-up cost, the interest payment for the SMF, and other transaction costs.

By now, his friendly investment banker would have been calling him to top up about RM40000 to lower his leverage ratio down to 60%, as his present leverage ratio is already 86%!

 

Margin calls

Some investors may have encountered margin calls as their maintenance margin, i.e. equity/Market value of shares, has fallen below 40%. A margin call can be responded by depositing cash or marginable securities to the margin account or by liquidating existing stocks to get cash.

In margin calls, your brokerage firm has discretion as to when you are required to increase the equity in your margin account. Whether or not you have been contacted by your broker, they can take immediate action to increase the equity in your account if they decide the equity is too low and is not commensurate with the risk of your account. This means they can immediately sell out whichever securities they choose, regardless of the financial obligations for you. That can turn things into a vicious circle, especially for the illiquid stocks; the more they sell, the lower the price of the stocks, the more losses one will encountered.

Depositing more cash will subject to more risks if there is further drop of the value the stock, and hence the risk of more losses. In the short-term, it is hard to know when the bottom of the share price will be, even for some good shares.

Liquidating some positions, a great stock which you supposed to have purchased for the long-term will result in permanent accentuated, and realized losses which is very hard to recover.

 

Conclusions

The most dramatic way we protect ourselves is we don’t use leverage. We believe almost anything can happen in financial markets… [so] even smart people can get clobbered with leverage. It’s the one thing that can prevent you from playing out your hand.”      Warren Buffett

 

Leverage can magnify your gains in the stock market, but do not forget the other part of the story. Some people do make a lot of money using SMF, but many more, especially the newbies, without proper investment knowledge, and the inexperienced had lost hugely in the stock market too.

In the short-term, the market is a voting machine, but in the long term it is a weighing machine.”

There is a dark side of using SMF.

 

I declare that I have nothing against investors using SMF, and I have nothing against anybody, nor the company Eversendai.

 

KC Chong

Labels: SENDAI
  16 people like this.
 
kcchongnz Posted by stockmanmy > Sep 28, 2017 10:03 PM | Report Abuse
kc
I am not anyone's father here.....
But it is true every thing I say about sailang, margin account, super investor,
Never seen a super successful investor without sailang and margin account. Have you seen one in your long life?


I am not sure you are fit to be a father, telling your children to use margin and sailang Sendai and Jaks at RM1.37 and RM1.72 respectively. But that is none of our business.

What do you call a person without morality?

Have I seen one super investors who are successful without sailang and margin?

Warren Buffet, Seth Klarman, Walter Schloss, Howard Marks, Mohnish Pabarai, etc etc. They are worth billions of USD.

Your so-called super investor can't even smell their fart.
28/09/2017 22:36
goldenluck16 Case in point about the risk of SMF is the former CEO of Bumi Armada..banks forced sell his shares when he couldn't top up his margin call.
28/09/2017 22:36
goldenluck16 One can go bankrupt within days if the financier forced sell your shares during a financial meltdown..it's a point of no return.
28/09/2017 22:39
stockmanmy KC

Warren the Buffalo not only sailang and margin.....

Warren the Buffalo started his career by borrowing from friends and family and sailang all in a bankrupt textile company.
28/09/2017 23:05
kcchongnz Posted by stockmanmy > Sep 28, 2017 11:05 PM | Report Abuse
KC
Warren the Buffalo not only sailang and margin.....
Warren the Buffalo started his career by borrowing from friends and family and sailang all in a bankrupt textile company.


You are really a talk cock king!

Warren Buffett invested successfully and made a lot of money before 1965. With the money he made, he took control of Berkshire Hathaway in 1965, and become a multi-billionaire now.

What gives you the idea that he borrowed money from friends and family to sailang Berkshire Hathaway?

Warren Buffet never tell anybody to use margin finance. Instead the first thing he told the young people in order to be successful, never use margin finance.

There are many videos and articles in the internet you can search for it.
29/09/2017 00:06
Hengyuan: SEXY BABE RM21! No right or wrong using margin. It is individual risk appetite.
29/09/2017 00:10
kcchongnz Posted by paperplane2016 > Sep 29, 2017 12:10 AM | Report Abuse
No right or wrong using margin. It is individual risk appetite.


You are right. Everybody has his own rights and preferences.

However, telling the young people and newbies to use margin to sailang stocks like Sendai and Jaks in public forums, especially you are a well-known and well-respected person in the society is definitely wrong, very wrong!
29/09/2017 00:19
stockmanmy Post removed. Why?
29/09/2017 00:21
kcchongnz Posted by stockmanmy > Sep 29, 2017 12:21 AM | Report Abuse
kc
what you didn't say is ...Warren buffalo now wants to appear respectable and wants people to forget his past...and how he got rich in the first place.
Do as he says but never ever do has he do.......hahahahahaha


You are just talking cock.

Warren Buffett invested successfully and made a lot of money before 1965. With the money he made, he took control of Berkshire Hathaway in 1965, and become a multi-billionaire now.

But that is not the point here. The point is,

Warren Buffet never shout everywhere in the public forums to sailang, sailang until you lost 83% in two months!

No respectable person will go around in public forums to sailang sailang sailang! Only idiots like you do.
29/09/2017 00:29
KLCI King hardcore fact:
No respectable person will go around in public forums to sailang sailang sailang!
29/09/2017 00:45
stockmanmy Post removed. Why?
29/09/2017 00:48
KLCI King Fully agreed:
telling the young people and newbies to use margin to sailang stocks is definitely wrong, very wrong!

I have gone through that process, fighting to resist the temptation to use margin, never dare to touch margin until having proven successful investing records & experience.

Those young kids dare to dream big using margin will find themselves in a plane flying to holland and they will be the old men never dare to touch stocks in their golden years.
29/09/2017 00:50
Hengyuan: SEXY BABE RM21! Well, one must know what they are doing before starting margin financing, that important! Even I studied financial analysis with one course of margin call financing module, I have hard time calculating the margin call losses as it keep changing.....Imagine lay man who buy stock for dividend only..

That is why no right or wrong, if the person take share investing as a gambling place, regardless young or old, they will also ultimately play margin.

I know one youngster, he start stock investing first day with margin! He said I win, win big, lose all, I will top up margin. That's the attitude of ppl sometimes….....Regardless who said what, who advise what, some people just stubborn and won't listen. Some ppl just has to learn their own way. They like to do margin for max loss or win, this their own decision. Nothing much we can do to help these type people.
29/09/2017 00:51
KLCI King stockmanmy talking rubbish and like to twist & turn all the time, come on, stupid, they don't sailang, they own the company.

No one will say:
Tony sailang in Airasia
Teh Hong Piow sailang at Public Bank
Warren buffett sailang in berkshire hathaway

THEY OWN IT! THEY DON"T SAILANG! STUPID
29/09/2017 00:55
KLCI King I stop here, you guys continue, I don't need to prove anything.
29/09/2017 00:56
kcchongnz Posted by stockmanmy > Sep 29, 2017 12:48 AM | Report Abuse
name me a CEO without margin account......name me a CEO who does not sailang....in fact , name me a super successful investor who has does not sailang and margin account.



Warren Buffet, Seth Klarman, Walter Schloss, Howard Marks, Mohnish Pabarai, etc etc. They are worth billions of USD.

Your so-called super investor can't even smell their fart.
29/09/2017 00:58
KLCI King Straight to the point, well said, always heard sailang at gambling place.

Posted by paperplane2016 > Sep 29, 2017 12:51 AM | Report Abuse
That is why no right or wrong, if the person take share investing as a gambling place, regardless young or old, they will also ultimately play margin.
29/09/2017 00:59
stockmanmy Post removed. Why?
29/09/2017 01:15
3iii Warren Buffett is the world's greatest investor. He is truly very good and teaches a lot.

What has Warren Buffett shared on using margins or leverage in investing?

He advises against these. His reasonings are sound. If you are already rich, you do not need to employ these exposing yourself to the uneccesary risk of suddenly being poor should events go against your judgement. Grow richer slowly rather than risking becoming poor quickly. On the other hand, if you are not so rich or even poor, you have even more reasons to avoid margins and leverage.
29/09/2017 07:47
3iii Warren Buffett did borrow money to invest in his career. These situations involved arbitrages.
29/09/2017 07:48
CharlesT I doubt if WB uses much margin financing..he can use free money from insurance companies
29/09/2017 08:21
bursagoinglong thank you for your kind compliments kcchongnz with regard to my article.

http://klse.i3investor.com/blogs/elsoft/133215.jsp
29/09/2017 09:17
Jay at the end of the day it boils down to risk management. risk management does not mean don't take risk, it means taking sensible and profitable risk. say a few years ago if you use margin to trade the SPAC arbitrage, pay 5% interest but earn a high probability annualised return of >10%, that is good risk taking. if you use margin to follow hot stock tips then good luck.
29/09/2017 09:54
GGecko i used to have a margin account about 15 years ago. but i got burnt very badly with margin calls to the extent of having to mortgage my property. subsequently, stop using margin after that. now everything is cash. 25% return YTD for 2017. can sleep well at nite
29/09/2017 09:58
Jay for risk management, key question is not how much will I earn if it goes up. the right question is how likely will it go down, and how my position would be affected. if you don't have an answer, you are better off without margin
29/09/2017 09:58
Hengyuan: SEXY BABE RM21! Jay, bro, you are BACK! How? PETRONM and HENGYUaN longtime no see you comment. Please provide some input, your input one of the BEST lah!
29/09/2017 12:15
mamakspecial Investment bankers themselves want you guys to play margin la..if not how to pay money to their client's trading account.

If I remember correctly Buffet transform the then ailing textile company Berkshire and MANAGE it (not just invest and buy it) and diversify the business into today's empire.

My view is that Malaysia is lacking quality companies to invest in. Previously USD strong, all those export stock esp tech and testing equipment company goes up, now MYR slowly going back up, all retreating. Then comes Aluminium price went up, only PMETAL stock doing well, others are just ok ok. Then now comes Steel price went up, SSTEEL, MASTEEL and others goreng up but most of their financials not really doing that well. Then goreng Hibiscus from oil up....oil down goreng PETRONM and Hengyuan..lol...

The big thing in malaysia now is the construction of the MRT and HSR and East Coast rail. Gadang big player..but no movement..only GKENT can see movement.


sigh..any1 can share how to play ?
29/09/2017 13:25
29/09/2017 14:29
bursagoinglong After reading some of the comments in this article, as the writer of "Who is afraid of share margin facility": http://klse.i3investor.com/blogs/elsoft/133215.jsp I would like to emphasis that the purpose of the article is to disseminate the workings of a share margin facility.

Even if the article suggests that everyone should get a share margin facility, some may have over thought that statement to mean that margin play should be part and parcel of one's investment. That is simply not how it was said.

This is an except of my article:

"Hence, our stance is that every investor should have a margin account even if there is no impending need for it yet. Like substituted soccer players, you can keep them on the sideline and only put them to play when it is necessary to do so."

It is my intention that a share margin facility be kept at the SIDELINE and to be used when NECESSARY (for example, when the market is recovering from a crash).

Hope that clears the air.
29/09/2017 16:00
mancingbursa I dun like otang, anyway i only use real money.
29/09/2017 16:37
MoneyFace88 Nice one KC. Opportunity for you to take revenge against KYY.
29/09/2017 21:46
kcchongnz Posted by MoneyFace88 > Sep 29, 2017 09:46 PM | Report Abuse
Nice one KC. Opportunity for you to take revenge against KYY.


I do not take revenge, nothing to take.

Nobody has hurt me.

I only share my analysis and point of view. I like to write and share.
29/09/2017 23:18
kcchongnz Posted by dragonslayer > Sep 28, 2017 10:32 PM | Report Abuse
Aiyo sifu kc...I wonder why you picked sendai as your case study leh..it happen...this is superinvestor ctr....can I request you make another case on Heng Yuan Refining Company....hope you can help tampok...there will be alot ppl interested too...thank you very much..aiyoyo...kikiki


I have no interest to go around, shouting about how someone has slaughtered a dragon, using margin finance and made millions from speculating in HengYuan. If you have done it, congratulation.

I am more concern about those naive punters, listening and following the persistent touting of using margin, purportedly investing in Sendai two months ago, and have lost their pants.
30/09/2017 21:47
kcchongnz aiyoyo, dragonslayer,

don't compare HY with Sendai lah. I think HY at this price is "heng" (prosperous), whereas Sendai a this price is at dire state.

Again, just personal opinion. Don't get angry with me if you own Sendai.
30/09/2017 22:52
stockraider Posted by dragonslayer > Sep 30, 2017 10:58 PM | Report Abuse

Aiyo sifu kc...no lah...me not owning sendai or jaks or HY lah...just kepoh ronda ronda the forum and put sone remarks only...aiyoyo...kikiki

Raider comment,
aiyah this dragon no class loh...!!
So many sifu in Hengyuan...like Probability, OTB, Paperlane, Alex, KYY, icon all support Hengyuan....why u want to waste KC time....by getting him to come n kacau Hengyuan leh ??

Lucky sifu KC do not accept ur manipulative invitation loh...!!

Hengyuan is a much better counter compare with sendai mah...!!
30/09/2017 23:06
VenFx Manmy, from day 1 I ask u not to have crush in Set die...

I want u to wish a Vis...

Can u understand my intention ?

MAY KYY SHIELD U
30/09/2017 23:09
stockraider when things does not turnout right...must lari kuat kuat or cut loss loh...!!

especially when the stock no margin of safety and have alot of people use margin to buy loh...!!
30/09/2017 23:13
VenFx If can't run
At least must Roll On.
30/09/2017 23:15
stockraider AIYOH DRAGON, SIFU KC ALREADY SPOKEN WOH...!!

HE SAY HENG OK MAH....!!

Posted by kcchongnz > Sep 30, 2017 10:52 PM | Report Abuse

aiyoyo, dragonslayer,

don't compare HY with Sendai lah. I think HY at this price is "heng" (prosperous), whereas Sendai a this price is at dire state.

Again, just personal opinion. Don't get angry with me if you own Sendai.
30/09/2017 23:33
signor ya, vested interest article very dangerous, like this one. talk so much, assume this and that but still KO by wide margin. this writer also wrote HY i think.
HIAPTEK: A Turnaround Steel pipe Player (Accounting loss in Subsidiary: What happen to cash flow?) - https://klse.i3investor.com/blogs/lionind/133611.jsp
01/10/2017 08:27
stockraider Posted by dragonslayer > Oct 1, 2017 08:06 AM | Report Abuse

Aiyo chief promoter...good morning...morning breakfast with morning joke...why you so fast hang sifu kc banner at HY liao kah...aiyoyo...baru cakap wa very cheap and no class few minutes later adopted my suggestion to hang sifu kc banner over HY liao...aiyoyo...do you think you need to issue an open letter of apology to me boh...now you look cheaper than me leh...itu lah...always dunno head dunno tail shoot arrows at ppl lah...now shoot at own foot liao leh...so..I m waiting for your letter of apology ya...when you intend to issue the same letter to jupiterang regarding you shot arrow at him on hiaptek matter...pls be man tampok leh...even sifu OTB also issued open letter to apologise on hiaptek matter leh..he cant ctrl if mgmt want to cheat leh....mostly all can accept his open letter but some cant lah..and still call him sifu OTB leh....then you must admit if you shoot the wrong arrow also leh...being chief promoter is not an easy task leh..you lead a group of promoters to kill all the penkritik...you kill all the penkritik regardless whether their opinions are valid or not leh...I think is a bit too bias also leh...still waiting sifu sifu in HY to answer my 5 unanswered questions leh...why all sifu sifu in HY there cherry pick questions and answered one leh..got anything to hide meh...aiyoyo...btw sifu kc still not issue full analysis report yet why you so kiasu hang his banner in HY liao leh....wait lah...wait sifu kc keluar full report baru hang lah...no head no tail one general statement from sifu kc.. not even put any TP at all...you hang his banner in HY liao...who is cheaper now leh...you or me leh...aiyoyo..want to sailang or sialang must wait for sifu kc full analysis lah...an independent non vested interest reputable sifu kc will make more impact than vested interest sifu punya report lah...HY is cinaman company leh...must be more careful before sailang using margin leh...cinaman companies many black swan in history leh....aiyoyo....kikiki

DRAGON,

U POST UR 5 QUESTION ADDRESS DIRECTLY TO GENERAL RAIDER IN HENGYUAN THREAD, RAIDER PROMISE TO ANSWER IT ALL LOH...!!

U POST EVERY WHERE, ASKING ALOT OF PEOPLE TO ANS, GENERAL RAIDER DON KNOW WHAT IS UR QUESTION LOH..!!

REMEMBER TO ADDRESS WITH " DEAR GENERAL RAIDER,,,,," THEN GENERAL RAIDER CANNOT MISS UR QUESTION LOH....!!

ALL QUESTION POSTED CORRECTLY WILL BE ANSWER WITHIN 24 HOURS LOH...!!
01/10/2017 11:23
PlsGiveBonus Robots have been running the US stock market, and the government is finally taking control
Shelly Banjo March 25, 2015
Traders work on the floor of the New York Stock Exchange, Tuesday, March 24, 2015. U.S. stocks were mixed in early trading Tuesday, as investors assessed the latest news on consumer prices and some company earnings.
Humans have to follow rules, why not robots, too? (AP Photo/Richard Drew)
High-speed frequency traders, which use computer algorithms to trade stocks milliseconds faster than competitors with little human intervention, are about to come under much more scrutiny, if the US Securities and Exchange Commission gets its way.
The firms have come under fire for manipulating the stock market, making it less transparent, more volatile, and an impossible place for mom and pop investors to get a fair shake. The practice gained broad attention with last year’s publication of the Michael Lewis book Flash Boys.
Under an SEC plan proposed on March 25, the agency said it would now require high-speed trading firms to follow the same rules as other financial firms, namely registering with and opening their books to the Financial Industry Regulatory Authority, the Wall Street regulatory agency also known as FINRA. Currently, high-speed traders that conduct business for their own accounts aren’t required to register with FINRA, meaning they can’t be traced back to, say, a large volume of suspicious trades.
Rules overseeing broker dealers were made at a “time when our equity market structure was dominated by floor-based exchanges that could readily regulate all of their members’ trading activity,” SEC chair Mary Jo White said in a public statement about the proposed rules.
“That is not our market today. Trading is now dominated by computer algorithms,” she said, noting that prop trading firms now account for nearly half of all orders sent to alternative trading systems.
Percentage-of-US-equity-shares-traded-by-high-frequency-traders-High-frequency-percentage-of-US-equity-shares-traded_chartbuilder
It could take a while for the rules to come into effect, as the SEC will have to solicit feedback from market participants and fine-tune any new regulations. There is also always the fear of regulatory overreach.
But the decision to move forward on changing the rules marks a stark recognition that the world of Wall Street has drastically changed in the past decade, and the regulations surrounding market structure have fallen incredibly far behind.
01/10/2017 12:04
stockraider Posted by dragonslayer > Oct 1, 2017 12:03 PM | Report Abuse

Aiyo chief promoter...all my questions were posted at HY there one lor...dun tell me you missed the questions leh...go and ask your promoters...they should have keep a soft copy of all the questions ..as I think they also eagerly waiting sifu sifu to reply but non reply.. ..aiyoyo...my question always started like this one...can any/anyone sifu answer my question...one day one question if not wrong....then follow by the question lah...aiyoyo...sori ya...I m old oredy...dun have enuf memory to remember what I tulis in the forum...cos my memory only for storing lepak lepak gossip gossip stories nia nia lah...if want to count...shld be countless liao lah...pls ask your promoters ok....aiyoyo....I requested sifu kc view on HY...hopefully he can tulis one independent analysis that will benefit all investors lah...not that I want to invest in this cinaman company lah...I sumpah many times no vested interest in HY lah...siapa mau follow me to temple sumpah pun cakap many times oredy lah....not in the past nor in the future also lah...only purely kepoh nia nia lah....aiyoyo....kikiki

General Raider,

Cannot find mah....!!
u post properly as per my instruction lah...!!
01/10/2017 12:05
PlsGiveBonus I made $10,000+ in Crypto the last month without investing a single penny. Crying tears of Joy.

So, about a month ago, while browsing the bitcointalk forums, I stumbled over a chest of buried treasure. While soaking up more crypto knowledge, I stumbled upon the post about a free airdrop. I figured meh...what the heck, I have nothing to lose, sure ill join your airdrop DeepOnion. I'll support your coin and your mission...It took no effort but to add a signature code, and continue doing what I was already doing on the forums.

So fast forward...a month. And here I am absolutely thrilled. I originally thought the DeepOnion coin would end up being some kind of worthless shitcoin. But oh behold. Here I am one month later, and after recieving three air drops of coins. I am now sitting upon a small fortune. After three weeks of participating, I have 1142.13 Onions. The DeepOnion community has grown to be incredibly devoted due to the terms the Dev team created in regards to the airdrop. As long as a participant contributes to the growth of the community, they are handsomely rewarded.

Screenshot 2017-08-27 23.30.16.png

I just tonight decided to check to see what my free airdrop Onions were worth, and low and behold. My Onions are for more valuable than I ever would have thought. I checked Coinmarketcap.com tonight, and take a look at this....

Screenshot 2017-08-27 23.28.08.png

My Deeponions which cost me nothing but three weeks of supporting the community are now worth $2638 USD. This is literally after only 3 weeks of receiving air-dropped coins. I thank the developers for creating such an incredible opportunity and such a fair method of dispersing the coins.

This is just one of the two goldmines that I stumbled upon. The other has caused me to make $8000 USD with just a weekend of my time, zero investment (Hint it involved ICO's). If you would like to learn more about how to participate in the DeepOnion airdrop, and learn about the other awesome opportunities in crypto space. Feel free to follow me. I plan on writing more articles going further into detail about how to participate in this airdrop, and also discussing the other method that generated over $8000 USD with just a weekend of my time.

I will give away an 0.5 Deeponion to anyone who upvotes, follows, and then resteems this post (Max 10 participants). (Participants must have at least 10 followers).
01/10/2017 14:32
stockmanmy Post removed. Why?
06/10/2017 11:21
stockmanmy Post removed. Why?
06/10/2017 14:46
stockmanmy just checked my account.

almost half my this year profits come from sailang ( and sell) at the right time for Jaks, Sendai and Hengyuan.
06/10/2017 20:54
stockmanmy idiots and cowards keep deleting my posts....


shame on idiots and cowards.
06/10/2017 21:40
stockmanmy in short....lousy timing, lousy analysis and lousy business sense to rite this article when it is 80 sen....now 95 sen.....


better would have left my responses at 80 sen not deleted ......
06/10/2017 21:43
PlsGiveBonus What is a crypto airdrop?
A​ ​crypto airdrop​ ​is​ ​when​ ​a​ ​blockchain project distribute​s ​free​ ​tokens or​ ​coins ​to​ ​the​ crypto ​community.

To​ ​be​ ​a​ ​recipient​ ​of​ ​an​ crypto ​airdrop often​ ​the​ ​only​ ​requirement​ ​is​ ​that​ ​you​ ​have​ ​coins from the relevant blockchain stored​ ​in​ ​your​ ​wallet. Examples of this format of airdrops are Byteball, Stellar lumens and OmiseGo.

Other crypto airdrops require social media posts or you need to contact a member of the team on the bitcointalk forum.

The​ ​format​ ​of​ ​these​ crypto ​giveaways​ ​is​ ​usually​ ​like​ ​this:​ ​At​ ​a​ ​pre-announced​ ​time​ ​the​ ​project​ ​behind the​ ​event​ ​will​ ​take​ ​a​ ​”snapshot” ​of​ ​the​ ​blockchain,​ ​and​ ​anyone​ ​holding​ ​Ether or Bitcoin​ ​at​ ​that​ ​point​ ​will​ ​receive​ ​a certain number​ ​of​ ​free​ ​tokens.​ ​This can also be done on other blockchains, but Ethereum and Bitcoin are the most used for this airdrop format.

Another possible way to get free crypto is a faucet. This means you get a small amount of free crypto for a longer period of time. An example of this one is a crypto wallet that drops Bitcoin, NEO, Litecoin, Dash € more every day, click here to check this out.
What do I need to do to get my free crypto?
Every airdrop has a different set of rules. We suggest you make a bitcointalk forum account to be able to apply for the airdrops that require contacting a team member (usually PM). Ethereum Dark airdrop is a good example for this format. Every person that wanted to apply for this ETHd airdrop had to PM the developer with his ETHd address to get the tokens. We suggest to post once in a while, often bitcointalk "newbies" are rejected for the airdrop.

Some new airdrops require retweets on twitter, usually you need a minimum amount of followers, so make sure you have active social media accounts to be eligible for these free crypto tokens.

Check your wallets regularly to see if you received surprise airdrops. Platforms like Waves or Komodo have delivered airdrops for Waves or Komodo holders without any announcement.

Always make sure you own the private keys to your coins & tokens to receive airdrops based on Bitcoin or Ethereum (or other) blockchain snapshots. However NEVER post your private keys to receive an airdrop! Be aware of scams, if you give away your private keys your coins will be stolen! We do our best to filter out all the scams, but it is possible one might slip through our research.

If​ ​you​ ​are​ ​an​ ​investor​ ​holding​ ​a​ ​diverse​ ​portfolio​ ​of​ ​coins​ ​you​ ​are​ ​likely​ ​to​​ be ​receiving​ ​more​ ​and​ ​more free​ crypto ​as​ ​this​ ​concept​ ​keeps​ ​gaining​ ​popularity.

Why would blockchain projects give away free tokens?
When​ ​something​ ​is​ ​free​ ​you’re​ ​the​ ​product

To raise awereness for their project/token they airdrop free crypto to the crypto community. It's a great way to widely distribute the tokens to create a community for it. It is free advertising, it brings people to your project that otherwise would not have owned or heard about it. It could lead to token price appreciation, which is probably the goal for these blockchain projects.

Looking​ ​forward,​ ​possible​ crypto ​airdrop​ ​developments​ ​could​ ​be​ ​projects​ ​starting​ ​to​ ​gift​ ​tokens​ ​to​ ​users​ ​who hold​ ​tokens​ ​in​ ​projects​ ​that​ ​overlap​ ​or​ ​have​ ​some​ ​synergy​ ​with​ ​their​ ​own.​ ​We​ ​could​ ​also​ ​see​ ​projects encouraging​ ​other​ ​projects​ ​to​ ​airdrop​ ​to​ ​their​ ​token​ ​owners​ ​and​ ​receiving​ ​some​ ​benefit​ ​in​ ​return. Like we already see happening at the Ethereum, Waves, NXT & Komodo platforms.

Where can I sell my airdropped crypto?
So now you have free crypto, what do you do? Many coins that do airdrops are PRE-ICO or just finished their ICO. This often means it is not traded yet on the bigger exchanges. You can check out our exchange page to see where you can best sell your crypto airdrops click here

We suggest you make an account at all exchanges we listed so you can easily sell and receive your crypto airdrops.

We hope you receive as many airdrops as possible and that they increase in value over time. Many projects that are now top 40 coins have done airdrops in their early stages, like NEM, DECRED & Ripple. You don't need to immediatly sell your free crypto, there is nothing wrong with being a HODLer.
07/10/2017 02:52

Investing during retirement kcchongnz

Author: kcchongnz   |  Publish date: Sat, 23 Sep 2017, 11:37 PM


Whenever I am playing golf with my kakis, or having a lunch or dinner gathering with my schoolmates or university mates, inevitably, I will hear conversation about where and how one can get a higher interest rate from a fixed deposit from banks promising, say a higher rate at 4.2%.

However, this higher return normally comes at a shorter-term, say 3 to 6 months tenure, and often, depositors may have to purchase a unit trust fund from the bank. The costs involved in the later often defeat the purpose of chasing the higher interest rate, though very few realize it.

Surprisingly, few, very few, consider investing in the equity market for a higher return. Most had got their fingers burnt before speculating in the stock market, one time or other. This, I have written an article about it in the link below,

http://klse.i3investor.com/blogs/kcchongnz/104168.jsp

It is understandable that so many of senior people who have retired now are so scared of the stock market and prefer to avoid it all together. In the process, many have missed out on the opportunity of obtaining higher return from the stock market.

 

Retirement Cash Flows

Assuming one retires at the age of 60, with everything paid up and without any other commitment such as children’s education, mortgage payment, car hire purchase, personal loans etc., how much money does he needs? How much he can spend?

This depends on several factors, among them are,

  1. How much wealth has he accumulated?
  2. What is his life style?
  3. How long is he expected to live?
  4. What kind of medical care he is expecting?
  5. What car is he going to drive?
  6. Is he going to travel often, local or overseas? Where overseas?
  7. How is his money kept or invested?
  8. ETC.

Table 1 in the Appendix shows how much one can withdraw, in today’s Ringgit (Adjusted for inflation) at the beginning of each year with one million Ringgit now for different rate of return and number of years of withdrawal in retirement, assuming he leaves nothing behind after expiry.

If one retires at the age of 60 and has a retirement sum of RM1 million put as fixed deposit in the bank earning an interest of 4%, and plans to live another 20 years to the age of 80 years old, he would be able to withdraw RM50000 every year, in today’s Ringgit.

RM50,000 withdrawal in today’s ringgit may be enough, or even abundant for some people leading a simple lifestyle, who are completely debt free and with no other heavy obligations like children’s education, home mortgages etc. For others who would prefer to enjoy a more luxurious life, such as having a bigger house, a better car, or to travel to Europe, US, South American etc. for annual holidays, RM50,000 a year is not enough.

What the retiree can do is to invest in the equity market, earning say 8% return a year. With this, he would be able to have an expected amount RM70000 a year, or RM20000 more to spend in a year, which he can use to do travelling, even to overseas destinations.

How can the retiree achieve his goal of a higher return, more importantly, safely in the stock market?

My proposition is following the high dividend yield investment strategy. The benefit of dividends is that they can provide you with a steady and growing stream of income (after offsetting inflation) that can allow you to live off the income streams in your retirement.

Is this dividend investing strategy workable? What evidences are there?

 

Historical return of high dividend yield investment

Since 1871 the U.S. stock market has generated 9.1% annual total returns, 52% of which are due to dividends and dividend reinvestment, and the rest 48% from capital appreciation rise of earnings of companies and valuation expansion. There have been many academic researches providing documental evidence that the dividend investing can provide satisfactory return over a long-period of time, and at lower risk.

Back in Bursa, as on 23rd September 2017, I managed to find 19-unit trust funds with dividend yield investing theme from the latest The Edge Magazine, investing in Bursa. The returns of the 19 dividend funds are shown in Table 2 in the Appendix.

The funds returned average compounded annual rate, CAR, of 10.2%, 2.4% and 5.9% for 1-year, 3-years, and 5-years investing horizon respectively. The return for the past one year was good at about 10%, with the highest at 18.9%, with only one loser at -1.0%. However, the return of 3-year period at 2.4% was not good as Bursa was close at its all-time high at about 1885 three years ago. The longer 5-year period at 5.9% is certainly higher than the rate of inflation as well as the fixed deposit rate, but it was nothing great, unless the investor was lucky to have invested in the top performing dividend funds. Even that, the CAR would not have been more than 10% for the longer 3 and 5-year periods.

Can we do better with this dividend investing strategy on our own?

Certainly. Not only with higher return, but substantially so. Moreover, it comes with lower risks.

 

Dividend Yield Investing Strategy: My personal experience

I have written several articles on the high dividend yield investing strategy. The most recent article in i3investor is in the link below, with a portfolio of 5 stocks selected since two years ago,

https://klse.i3investor.com/blogs/kcchongnz/128386.jsp

The following checks were carried out when using this strategy as safety measures,

  1. Dividend yields at least the same as the bank fixed interest rate, currently average about 3.0%.
  2. Dividend pay-out ratio should be less than a cut-off, say 65-85% so that there is money left and the business can still grow with the reinvestment for potential increase in future dividend.
  3. A business model that doesn’t require massive amounts of capital outlays relative to its earnings power.
  4. Reasonable expected growth rate in earnings at least matches the overall economy, say >4%, also for the potential growth in dividends in the future.
  5. Strong balance sheet for sustainability of dividend payment.
  6. High return of equity and capitals > 12% such that the dividend payment is not only sustainable, but grows from internally generated funds.
  7. Good free cash flows from where dividend is paid from internally generated funds
  8. Shareholder-friendly management dedicated to treating shareholders as owners

You can see it is a very safe investing strategy, with high dividend yields, low pay-out ratios, high free cash flows and cash in balance sheet, and high return on equity as shown in Table 3 in the Appendix. These checks were carried out, all for minimizing risks and ensure the sustainability of the regular and increasing dividend payment, and hence suitable for investing during retirement.

As at today on 23rd September 2017, the portfolio of 5 high DY stocks returned an average of 78%, way out-performed the return of the broad market of 9.3%, or an excess return of 69%.

There was only one loser in ECSICT, and the loss of the sole loser is only at 3.9%. The other four stocks way out-performed the return of the broad market, with 192% and 137% for Padini and Scientex respectively, and high double digit return for the other two stocks.

Figure 1 below shows the steady and increasing return of the portfolio since inception until today.

 

On 15th November 2016, a watch list of 17 diversified stocks using the same low-risk high dividend yield investing strategy was provided to my first stock pick service participants.

As on 31st August 2017, the portfolio returned an average of 25.4%, three times the return of the broad market of 8.4% during the same period.

There was only one loser in Perstima, which lost only 2.9% after it announced a surprisingly poor set of results recently, after many quarters of increasing profit.

 

What did all these tell you?

 

 

Conclusions

When one retires, his source of income from work stops. Hence during retirement, he depends on the nest egg he builds over the years for survival. Without any more regular income, preservation of capital is often more important than chasing return for most people. Placing the retirement fund in fixed deposit or purchasing a bond ensure safe return for retirement needs and wants.

However, one must wary of the inflation gremlin which can erode the real value of our money, and hence may derail our retirement financial plan of not having enough money to last before he expires.

Investing in high dividend stocks, with some checks, may provide one with much better return. Besides, it can be a safe investing strategy too if some proper checks and process are carried out.

The success of this high dividend yield investing strategy has been proven in academic research, from the experience of some super investor, as well as from my own personal experience.

This post is specially written for retirees. However, the principle applies to everybody who wishes to build long-term wealth for a comfortable retirement, slowly, safely but surely.

Investment knowledge pays the best dividend.

Anyone who is new, or old (retirees) to investing and needs some help may contact me at,

ckc14invest@gmail.com

KC Chong

 

Table 1: Annual withdrawal for 1 million Ringgit principal for various years of retirement and return

Return/

Years in retirement

10

15

20

25

30

35

40

2%

91490

57989

41318

31377

24802

20149

16697

4%

100000

66667

50000

40000

33333

28571

25000

6%

108787

75918

60000

49801

43345

38776

35384

8%

117817

85681

69895

60643

54653

50521

47544

10%

127056

95884

80892

72346

66999

63456

61018

Note: All in today’s Ringgit

 

Table 2: Return of dividend unit trust funds in Bursa as on 31st August 2017

 

Table 3: Portfolio of 5 high dividend yield stocks, safety checks and returns

 

  15 people like this.
 
Stock Kingdom Agreed without any reservation!
24/09/2017 00:18
yfchong Good sharing
24/09/2017 08:17
rchi KC's articles have depth and cater for investors across the spectrem unlike some self proclaimed gurus.KC is a gem in i3.
24/09/2017 10:19
donfollowblindly Beg to differ. If KC Chong damn good he must be very rich. Can he name a counter his name appear as top 30 shareholder in annual report?
24/09/2017 10:25
CharlesT Is it ok to show name as 30 top shareholders in xinquan?is this kind of track record ok?
24/09/2017 10:32
bursagoinglong donfollowblindly Beg to differ. If KC Chong damn good he must be very rich. Can he name a counter his name appear as top 30 shareholder in annual report?

That is a very naive.. Being sensible doenst necessarily means that he will be rich.
24/09/2017 10:35
CharlesT A lot of oldman blind followers like to think using their backside
24/09/2017 10:36
CharlesT They cant argue logically with u so will divert into asking u to show yr track records such as whether u r any of the 30 top shareholders in any listed co whether u bought xinquan fm 1.50 to 3 cents n suffer total loss of tens of millions or whether u stuck rm400m+ in lousy stocks n pay margin interest everyday..
24/09/2017 10:40
stockraider Raider had this to say on retirement;

1. U need to grow and accumulate wealth very much to give u a big margin of safety b4 u retire with big margin of safety, this is a prefer choice growing for capital for retirement loh...!!
Your EPF contribute about 25% of employment earnings help but it is still not enough. If u r sole proprieter is still useful u voluntary contribute to epf bcos it is tax deductible.
Say u think u need rm 3m to retire u better ask or target for Rm 7.5m to give u the require margin of safety loh...!!

2. When retire u r actually using ur wealth to generate return, u need to preserve it beside making more monies loh...!!

Raider suggest u;
a) Put at least 50% on cash like assets like fixed deposits, bonds etc.
On which 30% preferably foreign to protect it just in case.

b} Put another 40% on more enterprising investment like quality equities etc, property for rental of at least 80% and leaving 20% for risk taking. U may structure here 30% of the exposure foreign too.
So if u want to goreng stock, gamble and help ur girlfriend in need this 20% is the max loh....!!

3. The income generated from your wealth should be able to support at least 90% of your yearly living expenses plus extraordinaty expenses like travel & enjoyment, medical expenses, capex replacement requirement like new car, tv, handphone etc and special donation

4. Preferably u should own ur home debt free and should be only about 10% of ur wealth. If u stay in a valuable mansion covering 60% of ur wealth, it is preferable u downgrade by selling and buy back cheaper & smaller dwellings amounting to 10% of ur wealth, so that u can maximise ur wealth enjoyment mah!!.

5. U only leave ur wealth to your children when u r not around preferably.
Don make the mistake of transfering almost all ur wealth to your children, when u r still around and end up depending on them for hand out.

In conclusion Raider had layout a comprehensive retirement plan for u.
Just please ponder loh...!!
24/09/2017 11:52
abangadik rchikor so humble... you are always gem mar.
24/09/2017 11:57
Alex Foo i haven't tried dividend investing yet. My style is more to growth investing so I'm willing to forgo dividend for capital appreciation, at least for now. However, I'm impressed to see how a Padini stock purchased much earlier prior to its appreciation sees its dividend yield above 6% now (according to your record). And given its bright prospect in the apparel industry, I share the optimism that it will only go better over time.

If there's one day I'd wish to own, it'd be high quality stocks consistently reinvesting in itself at an above-average rate. Therefore when it comes to dividend, I'm torn between two options. Should I give more rooms for company to capitalize on its internally generated fund for future growth, or should I as a shareholder demand more sweet as they perform better?

Anyhow, KC has proven himself to be a reliable man in the area of fundamental investing. Give them another 20 years and we'll see how investing shines through ups and downs.
24/09/2017 12:27
kcchongnz Posted by donfollowblindly > Sep 24, 2017 10:25 AM | Report Abuse
Beg to differ. If KC Chong damn good he must be very rich. Can he name a counter his name appear as top 30 shareholder in annual report?

Is this article about sharing a subject on investment, or is it about gossiping who is rich and who is not?
24/09/2017 12:58
tecpower Avoid any funds of funds. They are funds, but they actually invest in other funds, so they will ask you for high fees and expenses. Haha

If you are not good at trading stocks, just invest in semiconductor stocks and hold them for one year. At least 50% return in a year is feasible! Many people invest in wrong sectors and stocks.
24/09/2017 13:26
Sales KC Chong, thank you. Is wise to follow your advice. Salute!!!
24/09/2017 13:56
hstha Stocks with high dividends outperform the market most when risk-off sentiment prevails or the economy is bad.

While dividend-paying stocks have outperformed on average over time, they have not outperformed in all market environments. In the 1990s, as highflying tech stocks with limited earnings commanded premium multiples, non-dividend-paying stocks meaningfully outperformed, besting dividend payers by nearly 5% per annum. That trend reversed in the 2000s as the tech bubble burst and non-dividend payers produced a negative return.
24/09/2017 14:26
hstha I don't see any advantage of investing in high dividened stocks when risk-on sentiment prevails or the economy is very good. Maybe you can invest in high dividened stocks to prepare for risk-off sentiment like the North Korea tensions. But alternatively, you can invest in gold.
24/09/2017 14:50
VenFx Hstha, u being throw the word riskoff, I wonder how good u are in so call your riskoff strategy ?
It u jus boasting with your buble word ?
U wonder how u trapped in Anzo deadly, if your so call strategy so helpful !!!
24/09/2017 14:56
hstha When risk-off sentiment prevails, prices of high dividened stocks do not plunge, but drop. In contrat, the price of gold surges when when risk-off sentiment prevails.
24/09/2017 14:57
hstha I invested a small amount of money in Anzo.
24/09/2017 14:59
greatwall hstha, dont talk like like u are very smart!! u bot anzo @ > 0.20, now only about 11 sen!!!!! look after ur counter first before talking as if u r a very good investor!!!
24/09/2017 14:59
gcke Investing on stocks or equities is very much dependent on one risk profile.

2.For those who can take higher risks can invest on speculative counters.Higher risk will commensurate with higher return in the form of capital gains.But with the word of caution that a proper selection of the speculative counters is essentially vital.Otherwise one can be caught big time and their investment capital shrinks with losses arising.
3.For those who have a lower risk tolerance can vouch for equities with reasonable return or DY at least above what one can enjoy from the Fixed Deposit rates.Or in short value-investing for those retirees,pensioners who are comfortable with medium rate of returns from equities.
4.In whatever investment one is buying,one must possesses sufficient or reasonable basic knowledge about the company background,financial fundamentals,profile of the BODs,the business that they are in,potential for growth,etc.At times many investors have the herd-mentality- just buying what others are buying without any rudimentary knowledge about the company.
5.Will be good IF the person can also have rudimentary knowledge or understanding on the Technical Price Charts Indicators- MA,MACD,RSI,stochastic.That will provide a useful guide and help to the person whether to Hold,Buy or Sell.

Outcome- Be clear of your risk exposure when into investing.The money is yours.Nobody can decide for you.Cheers for a happier and wonderful days ahead:-)))
24/09/2017 15:11
i3gambler For retiree, the investment should be simple.

Instead of investing in unit trust, a combination of FKLI and EPF will give better return.

Both Mr A and Mr B have RM885K in EPF
Mr A take out all RM885K and invest in unit trust that quite close to track KLCI.
Mr B take out only 10% or RM88K, open a future account and buy/long 10 contracts of FKLI expiring on 31.12.2017 at market price of 1767.
So both of them are exposed to same risk and opportunity.
What will happen on 31.12.2017?
Let assume KLCI will go up 4% per year, and EPF’s dividend is also 4%.
Meaning KLCI will go up around 1% from today’s 1771 to 1789 on 31.12.2017.

What Mr A get?
1) 1% capital gain or RM8850,
2) Dividend of 1.02% or RM9027,
Total of RM17877.

What Mr B get?
1) Profit from FKLI = 10*50*(1789-1767) = RM11000
2) EPF Dividend of 1% = (885K-88K)*0.01 = RM7970,
Total of RM18970.

So Mr B will be better off.
24/09/2017 16:03
Jason Lim Good article.
24/09/2017 16:33
LA777 I used to invest in Singapore unit trust funds, but the return is only 2.1 percent for over 10 years, then I realised that unit trust funds are not good enough for retirement, now I prefer to invest in good stocks and properties, the return is so far much better than unit trust funds.
24/09/2017 16:45
moneypedia For me stock market is good, although im just a newbie only 5 months in here..but it really hard, to learn i study TA and FA wisely (sometime until late night studying graphs etc.), without any background in financial. My return in 5 months hoverinf around 20-30% make me wonder why im not go in stock market even earlier..but nevermind, it never too late and stock market i believe if we gain knowledge, will give best return during pension. And of course diversification other, reit, gold, commodities,mutual fund, etc is a must also..my2cents.
24/09/2017 17:51
moneySIFU Good sharing from Mr Chong & stockraider, I personally consider the article from Mr Chong & comment from stockraider are indeed very good advices to not only retirees but also to newbies.

For me, I treat stock market as a marketplace for buying & selling ownerships of various businesses. Understanding the businesses and industries will be important for me to choose which companies to invest.
24/09/2017 18:13
hstha I read a lot of academic papers about stocks. That's why what I'm telling you is true.
24/09/2017 18:33
hstha I read most of papers at google scholar. If you know basic statistics, you can understand them.
24/09/2017 18:48
brightsmart you will not trust ##holes and academic looking papers once you have read the book.....Economic Myths by David Orrell
24/09/2017 18:49
moneypedia Good sharing from all sifu here,the link sifu kchong give also good, we need to study not just good side of stocks but also the bad side of em. thumb up and thanks:)
24/09/2017 20:18
hstha https://www.bloomberg.com/view/articles/2017-09-22/emerging-markets-may-be-due-for-their-comeback
24/09/2017 22:11
ajim102 Excellent food for thought by Sifu kcchong.thank you for your effort in creating awareness on the proper way to invest. I find dontfollowblindly comment's brings no value at all,a total waste of time for everyone who accidently read that comment. If everbody thinks like this chap then only those whose name are in the top 30 shareholder of a company can be a lecturer or professor for investment courses in universities and only those whose name is already in heaven can teach religion
24/09/2017 22:33
Yippy68 buy the right reit at right price, it can be very good return.
25/09/2017 07:48
kcchongnz Posted by tecpower > Sep 24, 2017 01:26 PM | Report Abuse
Avoid any funds of funds. They are funds, but they actually invest in other funds, so they will ask you for high fees and expenses. Haha


Layer and layer of fees and expenses. Hard to believe investors can make much return.
25/09/2017 10:56
kcchongnz Posted by CharlesT > Sep 24, 2017 10:40 AM | Report Abuse
They cant argue logically with u so will divert into asking u to show yr track records such as whether u r any of the 30 top shareholders in any listed co whether u bought xinquan fm 1.50 to 3 cents n suffer total loss of tens of millions or whether u stuck rm400m+ in lousy stocks n pay margin interest everyday..


Yeah, what is important is he must be very rich. Only very rich people can be the top 30 shareholders of many firms. Even if you are top 30, it will still not good enough, because you are not the top or second top shareholders.

If you are not the top shareholder of any firm, you are not suppose to share anything about investment. Just keep quiet and admire those who got money.

If you want to write anything in 3invstor, you must show your track records.

Your track records are not what you published and shared in your articles, or portfolios, but your records must be how much money you have in your bank and investments, or have you made hundreds of millions before.

Whether if he has a good principle or process of investing is not important. He must dare to sailang.

Whatever stock he sailang is not important. As long as he dare to sailang.

If you don't buy the stocks they have bought, which have gone up, you are just a low-class investors.

The above seem to have great influence in public forums such as i3investor.
25/09/2017 11:53
godhand lets not talk about the amount of money. its the return in percentage that matters.

some people can start from millions or rather billions, some people start from thousand
25/09/2017 12:27
winston1 Everyone has different expectation and returns on investment. Some may not prefer the slow dividend yield investment compared to high growth stock. I remember Padini was at one time only RM1.00 not too long ago. Now its above RM4.00 with a growth of 400%. But remember, if there is any big correction in the market all stocks will be hit. Even good dividend yielding stock and REIT.
25/09/2017 13:23
cold_eye 1) Do I ever boast about my return?
2) Can you find my name in any annual report?
25/09/2017 14:47
kcchongnz Posted by hstha > Sep 24, 2017 02:26 PM | Report Abuse

Stocks with high dividends outperform the market most when risk-off sentiment prevails or the economy is bad.

ME: AS RETIREE OR GOING TO RETIRE, RISK-OFF SHOULD BE THE WAY RATHER THAN CHASING HIGH RETURN.

IS THE MALAYSIAN ECONOMY GOOD, OR IS IT GOING TO BE VERY GOOD?

While dividend-paying stocks have outperformed on average over time, they have not outperformed in all market environments. In the 1990s, as highflying tech stocks with limited earnings commanded premium multiples, non-dividend-paying stocks meaningfully outperformed, besting dividend payers by nearly 5% per annum. That trend reversed in the 2000s as the tech bubble burst and non-dividend payers produced a negative return.

ME: WE LIKE TO OUT-PREFORM MOST OF THE TIME. BTW, NO INVESTMENT STRATEGY OUTPERFORM THE MARKET ALL THE TIME ANYWAY.
25/09/2017 16:03
kcchongnz Posted by hstha > Sep 24, 2017 02:50 PM | Report Abuse

I don't see any advantage of investing in high dividened stocks when risk-on sentiment prevails or the economy is very good. Maybe you can invest in high dividened stocks to prepare for risk-off sentiment like the North Korea tensions. But alternatively, you can invest in gold.

Posted by hstha > Sep 24, 2017 06:48 PM | Report Abuse
I read most of papers at google scholar. If you know basic statistics, you can understand them.


You should know that the real return of gold has been almost 0%.
25/09/2017 16:53
Jonathan Keung invest in properties , currencies, shares and FD after retirement ( you wont go wrong )
25/09/2017 17:05
Jeffbkt If I have 1 Million and I leave it in EPF with average 6% annual dividend, I still can withdraw 60K a year without touching my principal. Nowadays EPF allow member to withdraw the dividend only. So if you are not good and hardwork in equity investment, don't ever think to take the risk.
25/09/2017 21:08
Ooi Teik Bee Posted by kcchongnz > Sep 24, 2017 12:58 PM | Report Abuse

Posted by donfollowblindly > Sep 24, 2017 10:25 AM | Report Abuse
Beg to differ. If KC Chong damn good he must be very rich. Can he name a counter his name appear as top 30 shareholder in annual report?

Is this article about sharing a subject on investment, or is it about gossiping who is rich and who is not?

Ans : I thought donfollowblindly respected Kcchongnz a lot, he only good in attacking me only. It appears he is good in attacking all writers in I3.
His comment showed how good he is.
Did he recommend any stock to benefit all readers in I3 ? None.

Thank you.
Ooi
25/09/2017 21:19
Equityengineer Always be in the market, just the risk appetite changes from aggressive to conservative., that is to be safe. Ironically, after 50 and still in market after 20 years , anyone survived the test of time have better chances of making greater return. Knowledge is compounded and experience is a rear mirror.
25/09/2017 21:35
kcchongnz Posted by LA777 > Sep 24, 2017 04:45 PM | Report Abuse
I used to invest in Singapore unit trust funds, but the return is only 2.1 percent for over 10 years, then I realised that unit trust funds are not good enough for retirement, now I prefer to invest in good stocks and properties, the return is so far much better than unit trust funds.


The problem with Unit trusts is the fee, fee and fee. If you have to pay say 5% upfront fee, and 1-2% annual fund management fee, plus fee for asset under management, just forget about good return.
25/09/2017 23:15
kcchongnz Posted by Jeffbkt > Sep 25, 2017 09:08 PM | Report Abuse
If I have 1 Million and I leave it in EPF with average 6% annual dividend, I still can withdraw 60K a year without touching my principal. Nowadays EPF allow member to withdraw the dividend only. So if you are not good and hardwork in equity investment, don't ever think to take the risk.

Return from EPF of 6% is tax-free and risk-free. Put it as the fixed income allocation. Never let any financial adviser or unit trust consultant entice you to take it out and invest in unit trust.

The risk adjusted return on EPF is much higher than unit trusts.
25/09/2017 23:50
kcchongnz Posted by Jonathan Keung > Sep 25, 2017 05:05 PM | Report Abuse
invest in properties , currencies, shares and FD after retirement ( you wont go wrong )

That is right; a proper asset allocation and diversification.
26/09/2017 07:54

Investing in Bursa for Retail Investor: Risk and Return kcchongnz

Author: kcchongnz   |  Publish date: Mon, 18 Sep 2017, 09:20 PM


I just read an article on page 3 in a Chinese Investing periodical, The Bust Weekly.  This periodical has a lot of good information on investing in Bursa.