Highlights

Choivo Capital

Author: Choivo Capital   |   Latest post: Sun, 13 Jan 2019, 02:51 AM

 

(CHOIVO CAPITAL) Conversation with a top tier trader, and lessons learnt.

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Opening

Ever since I started posting on I3, I met quite a few people in real life. Some traders, some investors, some a mix of both, all of which are good people. And sometimes, I manage to meet someone who is truly amazing and teach me a few things.

For the most part, if they are an investor, often time we match up quite well, and I learn certain things, but nothing major. No surprise there. Not because i'm particularly brilliant or anything, but because we drink from the same sources.

There is few things on investment one can learn beyond Warren Buffet, Peter Lynch, Phillip Fisher, Charlie Munger, Seth Klarman, Benjamin Graham, Walter Schloss etc.

However, i also met a trader on I3, who is truly a cut above, both in terms of his thinking and his results. And I can’t tell you how hard is it, to meet a trader who has a clear mind and is intellectually honest.

To be honest, I think I’ve learnt the most from him (when it comes to meetups), compared to everyone else. Mainly because we think so differently, and have such different experiences, and yet somehow, we can understand each other because we try to be as intellectually honest as much as possible.

 

Background on the trader

Like me, he is also 26, and like me, we both started from relatively small capital. The difference is that he started trading since 19. And his results is far, I mean far far above mine and anyone else I know.

He started with less than RM20,000 in 2011. And up until 2015, he obtained returns of roughly 30% per annum. In 2015, he started working, and basically put all his earnings in. In 2016, he got returns of 100% and in 2017, he got returns of roughly 500%. In 2018, he is up about 10% plus.

In essence, he turned less than RM70,000 in net capital to almost RM750,000 in 7 years. He did not keep accurate results in terms of fund units. That is CAGR is at least 40% per annum. It’s likely much higher than that as he put in a significant portion of the capital late, and that capital got 200% and 500%.

And to top it all off, he did it with zero margin. There is some luck, but his alpha is still very clear for me.

We started speaking on whatsapp since last year, and it’s only the last week or so that we manged to sit down and talk properly for a few hours.

 

The conversation

I thought a lot of how to structure this post, and I think the best way is to do it like a conversation. It is not exactly how the conversation went, I edited heavily for clarity and relevance. As well as adding in some of our whatsapp conversation that I think is relevant.

I try to structure it by topic, and well, I hope it is as useful to me as it was to you. Its not the best formatting, as the conversation was quite wide ranging and we jumped from topic to topic very often.

 

Jon: All right, tell me roughly how you do you trade? Personally, I’m really curious about your thought process when you trade. I remember in March and April this year, when I was at one point down 25%. It didnt feel good.

I remember that completely wiped off all my previous return and more. And I wondered, what was I doing? I did things that were logical to me and people who's thought process I respect.

And despite studying so much, my paper losses made everything seem like a waste of time. Luckily, I had the mind to trust my process, to hold and continue buying and averaging down.

I’m surer now, but that was definitely the point when i wondered if I should try trading again.

I remember asking you then how you traded then, so how do you do it again?

 

TTT: Well the principle is relatively simple. I trade companies I like, in terms of fundamentals and valuation, using technical analysis.

I focus a lot on finding sudden and explosive earning, that can last preferably a few quarters, and in terms of valuation, prefer PER of less than 15. This however changes depending one earnings.

I also try and read the sentiment and expectations of the market and act accordingly. This one is probably harder to explain and just require experience.

I have a cut loss of 15% and I use zero margin. Sometimes I go past the cut loss, but not by far.

 

Jon: Alright. The moment you said technical analysis to me, even when we first met, I almost decided not to take you seriously at all. Hahaha

Technical analysis is a waste of time. It’s like trying to predict the weather, its only roughly accurate in very short term, and even then it’s not that accurate either, it only makes sense in retrospect.

Like religion, I could never find anyone who can defend or articulate it in a logical manner.

And it only works in bullish markets, in bear or recession, it’s absolutely useless.

 

TTT: Well, you are right. TA makes absolutely no sense.

The price of a stock logically have no relation to the past. Past movements of the stock mean nothing. The future price is based on the fundamental earning change.

Having said that, in a rising market TA does work. I mean, I’ve used it very successfully for the last 7 years.

 

Jon: That must be quite difficult. How do you use something illogical in a logical manner? Hahahaha.

I mean, it works until it does not, and when it does not you get murdered, as we can see very clearly in March to May. The sheer amounts of complaints OTB got is insane. It’s very clear that most was probably at least 30 plus percent down.

How do you make sure you do not get your balls chopped off during the downturn?

 

TTT: Hahaha. Well, I have a cut loss, which I stick quite closely to, and I only trade during times when sentiment is good.

 

Jon: Well, how do you determine when sentiment is good?

During the 2008 crisis, they were 3 times on the way down, when one could think that sentiment is improving and consolidation is over and ready for breakout.

Using your cut loss at 15%. Assuming you followed it very very strictly, and cut exactly at 15%, and that you are able to do it, with the price does not blow past your cut loss. You are still looking at a loss of roughly 40%. After the third drop..

How could you possibly find it within yourself to buy again when it was at the very bottom?

 

TTT: Well, like I said I have a cut loss, and I only trade when sentiment is clearly positive.

 

Jon: So I’m guessing when sentiment is bad, you hold cash? How many percent did you hold around March to May?

 

TTT: Well they range, but most of that time, I held 85% cash.

 

Jon: Well, if you were to study the percentage of cash to index movements. People tend to hold maximum cash when the prices were absolute lows, and minimum cash when prices were absolute highs.

That is clearly the opposite of what people needed to do. And historically and statistically, those who held the least cash, and put the most to use during those times, are those that made the biggest money. How do you make sure you make the big money?

During the big drop in March to May, I remember telling you prices were too cheap, and for example Liihen was 2.2, LionInd was like 0.6 ish in July, and a couple more.

You were asking me if you should buy last week when Liihen was like RM3, or Lionind was like RM1.1. Clearly the timing is completely off.

One of the most expensive things in investing is comfort. Selling stocks in a bull market is very uncomfortable. And so is buying stocks in a market that is nose diving.

However, these are the right things to do. And it's always in retrospect that one really realizes that.

There is always natural inclination to want to wait till the future clears up a little, for current uncertainties to resolve. There's a certain comfort that comes from the consensus of many others.

However, a cheery consensus and a large number of other intelligent people making the same investment choices as you almost mathematically insures that you'll do the wrong thing at the wrong time because prices now reflect at consensus.

Low risk, high uncertainty situations are the friends of a buyer of long term values.

 

TTT: Well, you are right. Having said that, in hindsight it was the right move, but a crisis might have very well happened, and I may turn out to be right.

Having said that, my strategy means I need to be ok with not making the big money, in exchange for making the easy money, the ones based on momentum or sentiment.

 

Jon: Ok, that is interesting way to look at it. I've never heard it put that way before.

Do you use cut loss? I mean you know my perspective on it. I think it’s completely stupid and illogical.

Cut loss is like having a real estate agent coming to your house and saying “There is an offer for your house of RM600,000”. And you reply saying “I’m not interested, but if someone ever offers RM500,000, please sell it, and the lower they offer the harder you should try to sell”.

 

TTT: You are right. But you are investing. I’m not, I’m trading.

 

Jon: Your gambling and speculating you mean? I know it sounds dirty, but i dont mean it that way. I do
enjoy poker, and I do gambler in those scenarios, or in Dota Games or elections, ahahahaha.

You are gambling or speculating intelligently?

 

TTT: Yeap, I am gambling, and when gambling, cut loss is key.

 

Jon: In 2015, in the US, a lot of investors put cut loss, and during the flash crash, they literally saw their cut loss blown past and their stock being sold at incredibly stupid prices. And in literally less than half an hour later, they saw their sold stock rise far above the cut loss price.

This was also what happened in the 1990’s flash crash, when portfolio insurance was the hype.

How do you make sure this does not happen?

 

TTT: Well, my cut loss is usually a lot less than most, in addition, most of the times, I don’t actually put the cut loss in my trading software. Having said that, my capital is still small, so I’m fairly certain I can still make it.

 

Jon: That’s a little sloppy. Hahahaha

 

TTT: Yeah.

 

Jon: Let’s talk through your biggest trades, HengYuan and JHM. I think they cover most of your trading style. What was your sizing?

 

TTT: Well ok. For JHM and Hengyuan, when I started that round my capital was about 150k-200k. For those, I really sailing, I had up to 75% in one stock some times. Yeah it was damn risky, these days I usually put 15-20% max, but back then I was damn aggressive.

So for the JHM, basically I rode it up during that 3 to 4 quarters where earnings exploded. I traded by selling the tops and buying the bottoms, usually ill make like 5% to 10% each round. I got out of the position at some point when it became too high. It was then Hengyuan came up.

For Hengyuan, I saw Icon8888 article, and OTB made his recommendation in the subscription. I bought around RM7-9, close to 75% position, and I traded the tops and bottoms. I dropped the position by about 20% at RM11 to Rm12. Another half at RM14 to RM15, and sold all by RM17.

 

 

Jon: OK, I’m not too familiar with the JHM movements or story, but im more familiar with Hengyuan, in any event, its more exciting anyway.

The main thing that I want to ask, is how do you maximize your return? You sold 20% at RM11 or RM12, didn’t you feel any regret when it went up to RM14 to RM15, and When you sold some at RM14 to RM15, didn’t you feel regret or stupid when it went up to RM17? And same thing when it got to RM21?

I mean you see the comments on the forums, where they keep saying should have held longer or I should cut loss, where the right or wrong decision wholly depends on the outcome and not the thought process.

How can one even make logical decisions in that scenario or with that way or thinking?

 

TTT: Well, for me. I am very clear that I am gambling and speculating. So for me, it’s like a bonus each time I sell at a higher price, and I don’t aim to make every dollar, but the safer ones.

I know it’s not worth that fundamentally, so I try to sell in batches to optimize abit the return, but once I sell, I don’t regret or look back. Though to be fair, I did rebuy at RM7 to RM6 and resold when KYY fired, but I generally waited.

I mean I did get tempted at RM13, but I didn't buy in the end.

 

Jon: That really interesting to me. One thing I noticed is that, you seem to have a very clear understanding of what you’re doing. You don’t mix between investing and speculating. Most speculators tend to think they are investors, and speculation that went bad, turned into investment in the long term, compounding the mistake.

Having said that, didn’t you lose a bit in MYEG, when you bought at the second limit down, and didn’t manage to sell when it dropped the next day. But you managed to sell during the rebound. Why did you keep for the rebound instead of just selling.

 

TTT: Well, I was away from my computer, it dropped too fast, and by the time I was back, it was far past the 15%. It wasn’t that big of a position, only about 15% but still kind of sucked. I just decided to wait it out based on a gut feeling.

 

Jon: Haha, it’s really hard to differentiate the luck and the alpha, I mean in Muda you almost got chopped, you bought early and sold literally the day before the result that gave the limit down.

 

TTT: Yeah I guess. For that I sold as I felt expectations was too high before the results. The result was correct-ish, but forex whacked. So before, I needed to take into account unknown factors in my calculation of proability 

 

Jon: One of the things I found interesting, is how you didn’t use margin. I mean, most traders use margin, and like the stockraider argument, it only cost 5%, given you CAGR of probably higher than 40%, why didn’t you take it?

 

TTT: Well, I prefer learning from other people’s mistake. And listening to people speak about crisis in hong kong etc, its clear that margin is the problem. If I had margin when I started, I think I would have lost a lot of money due to calls.

 

Jon: What is the risk for you? For me it’s the ability for someone else to sell your stock, at precisely the moment I don’t want to, that is a huge risk for me.

 

TTT: Yeap exactly that. Also, it can be really tempting to sailing in stocks when it’s really cheap on margin, but in recession, it can drop from RM7 to RM2. You think its cheap, you sailing, and it drops to RM1 and wipe out your capital. Just too dangerous.

 

Jon: One thing im curious about is this. One of my motto's in life is, "If you dont attempt to manipulate others, you cannot be manipulated" 

Put in the context of relationships. Guys who complain about being used by a girl for free drinks, lunch dinner etc. Are often guys who are trying to manipulate a girl into a relationship with him via those things instead of just being honest and straightforward. And because of this, she is able to manipulate him into giving her those things via the mere possibility of sex. Because she never had to say "yes" or "no", but just maybe.

While girls who complain about guys who just sleep with her, while keeping her on a string in terms of the possibility of a relationship. Well, they were trying to manipulate the guy into a relationship by sleeping with him. And him knowing this, is able to manipulate her into sex, with just the possibility of relation. Because he never had to say "yes" or "no".

Likewise, in trading. The only way you can lose money trading sentiment etc, is by trying to make money trading sentiment. The only way you can lose money in a bubble is by trying to make money via a bubble.

How do you make sure you are not the one being played by others while trying to play the other person?

 

TTT: Well, i try to be less greedy. And to be honest, its always worked for me.

 

Jon: Why not be the least greedy and not do it at all? Hahahaha


TTT: Hahahahaha

 

Jon: Do you have any plans to do investing? I mean we spoke a lot on this on whatsapp, one of the pick you were talking about for medium term investment is Layhong. Prices have dropped a bit lately, and you actually knew it would drop, at one point, it was actually more than 10% positive for you. Why didn’t you trade.

 

TTT: Well this one is a medium term investment, so im not to trading it.

 

And that is it. We spoke a lot more on a couple more topics, but that would be too wide, random and long a piece. Having said that, he has one of the sharpest and clearest mind in I3 for me. A real rarity.

 

How does one trade for income, invest for the future, and be able to buy more when a recession comes?

While I was in Johor, I also met another investor. He is able primarily a trader, but has a significant investment tendencies and ability.

He too has a fairly decent return and a fair decently sized portfolio (triple mine probably). I asked him, why do you feel such an urge to trade when you know investing for absolute return is the best way and your capital is more than enough.

He said, “Well, I have three children, most of my salary goes to feeding them family and keeping a roof over their heads and a car, so any additional income and growth in capital needs to come from my investment/ trading portfolio.”

According to him, he has a main cash portfolio, and a margin account backed by FD. One of his main concern is that how does he make money from trading without risking too much capital, and how does he still be able to have the cash to invest during a crisis, when he can save so little?

We discussed for a while, taking into account the methods of my top trader friend and this is the solution we came up with.

 

Portfolio management for a trader/investor.

  1. Open two portfolio. The first is pure cash only, and the other is a margin trading account. I would suggest portioning it 80% in the cash investment account, and 20% in the margin account.
     
  2. For the cash account, you will only buy long term investments, that you are absolutely sure of its intrinsic value, no gambling, trading, sentiment reading at all, pure absolute value long term investing. Any selling or buying needs to be based on fundamentals and discount to intrinsic value. You only sell when fundamentals change, or if it went up too much.
     
  3. For the trading account, you will trade stocks based on sentiment, news etc. The key thing you need to know is, one, you are trading rubbish companies like HUAAN etc. Or you do not really understand the company.

    You are gambling. The key thing here to make sure you don’t get confused, is to not mix your cash and gambling picks. Stock you buy for investment, you cannot trade with. Stock you buy for trading you cannot buy for investment.

    You have a very clear cut loss, which needs to be based on the leverage used.

    Assuming your use FD backed margin accounts, If maximum 3 times leverage is used, a 5% drop means you need to sell everything. 2 times, mean you need to sell out all at 7.5% drop. Just one time leverage, you need to cut at 15%. No exceptions.

     
  4. In times when sentiment is bad, you will not trade at all. And if your cash investment portfolio drops by at least 30%, you will only then move it to margin. And you will margin up to a maximum 50% of your capital. And you will only leverage up very slowly at 2-3% per week. And only if you are very very sure.

    If you feel sentiment consolidating in the recession (do note can consolidate and drop a few times), you can trade, but must adhere very very closely to cut loss.

    You are gambling, don’t ever forget that. If needed, you should consider moving it all to the investment portfolio, if the former drops by more than 50%.

    As you will be holding your investment portfolio all the way down, and buy as you go. You must make sure you are very very very very clear about your companies what they are worth. The economics and the valuation.

    And if you’re actually correct, chances are it won’t drop more than 50%. If you were to leverage up to 30% once your portfolio is down 30%, chances of you ever getting margin called is very close to zero. You may want to lower it to 25% to be more safe.

    You cannot make a mistake in valuation, economic characteristics, or margin of safety. Because you are holding and buying more all the way down.

    If you are wrong, they won’t be a rebound. So you better be damn sure.

 

Conclusion

I hope this was as useful to you, as my conversation and discussions with these people were. Good luck.

====================================================================

Facebook: Choivo Capital
Website: www.choivocapital.com
Email: choivocapital@gmail.com

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  4 people like this.
 
Apabagus Jon baby.There is only one WB,same as one Bill Gates,same as one Jack Ma.
You would do well to start as a mouse.One year plus experience talk so much.
25/08/2018 20:25
Choivo Capital I've read every single letter from buffet from 1955 to 2018. And every step of the way, from USD 19 per share to USD300,000. Even when his capital is small, he never took undue risk.

What is being conservative?

For me, it means to only invest if you're sure of what you're buying. If you actually understand the economics and the valuation. If you know for a fact that you are buying RM1 for RM0.5 or less.

I take risk and am adventurous only when i know i am paid well for it.

You know funnily, i actually invested RM15,000 for a 5% stake in a small singaporean company when it was starting out. That was most of my capital then. In terms of valuation, it was useless then.

But i knew the boss, i knew the market, and i knew the economics of the business, and i figured, this guy can make it work.

For the last two years, it has paid me RM15,000 each year in dividend.

I think if i were to sell that stake, should be a significant sum. By far my best investment tbh ahaha.

I am willing to take almost any risk, as long as i'm understand what im getting into, am paid well for it, and i can stomach the size.

Warren buffet, his company now, insures the kind of risk no one else dare to insure. Multibilion dollar hurricanes, earth quakes, terrorism, micheal jordan legs.

Is he conservative or adventurous?

You need to revisit and study again your definitions and thinking.

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Icon8888 > Aug 25, 2018 01:39 PM | Report Abuse

The biggest weakness of Baby Jon is his conservativeness. Always pick stocks like retirees. (Read too many warren Buffett books).

if you are 26 yo be more adventurous lah. It is time to take risk and grow. Acting like warren buffett makes you feel good but doesn't put money in your pocket
25/08/2018 20:27
Alex™ Baby jon still don't get it. Talk talk talk~

Produce result then we talk
25/08/2018 20:30
Choivo Capital And one Jon Choivo.

When Warren was only managing a USD15mil co, he was pretty much the same as managing a USD500bil company. Except, he had much more options before then.

I am like a mouse now, i can look into very small caps that people cannot buy.

You don't change your thinking and philosophy just because you are small. But by being small, you have alot more options. that is it.

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Posted by Apabagus > Aug 25, 2018 08:25 PM | Report Abuse

Jon baby.There is only one WB,same as one Bill Gates,same as one Jack Ma.
You would do well to start as a mouse.One year plus experience talk so much.
25/08/2018 20:31
Choivo Capital If i tmr sailang into in Sapura Warrant.

And suddenly saudi arabia say will give loan to SAPURA ENERGY, no need right issue. And i didnt know it, but i just got damn lucky.

Warrant up 1000%.

Am i genius now or win lottery?


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Posted by Alex™ > Aug 25, 2018 08:30 PM | Report Abuse

Baby jon still don't get it. Talk talk talk~

Produce result then we talk
25/08/2018 20:32
FamousAmos Baby Jon is like the average jon I met in real life. Read / watch few Jack Ma shits and start to preach. Lol.
25/08/2018 20:33
Apabagus Baby after reading a few books think he can fight a war.Even veteran like 3iii also no one give a damn.Oops,it's time to change diapers for baby jon!
25/08/2018 20:37
Alex™ If only ma... Probablistic decision... Your call... If pokai don't blame ppl.

No need sailang to prove yourself. This kind of method is like time bomb. Anyone wipe out your account
25/08/2018 20:38
Choivo Capital Is a war going on? Really?

Sorry, not a trader, i don't play the zero sum game.

Lets assume alex, famousamos and apabagus is actually in the green and very much so now.

For every one of your guys, i am willing to bet that there is at least 5 poor sods in the red.

And this is over a 15 year database.

If you know anyone in a brokerage with the data, i am willing to take on the bet. With any of you. Name an amount, i'm not rich though, so its mostly for fun hahaha.

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Posted by Apabagus > Aug 25, 2018 08:37 PM | Report Abuse

Baby after reading a few books think he can fight a war.Even veteran like 3iii also no one give a damn.Oops,it's time to change diapers for baby jon!
25/08/2018 20:56
Icon8888 I am not against Buffettology. Who am I to question a great investor like that with solid proven track record ?

I AM AGAINST APPLYING BUFFETTOLOGY IN MALAYSIA.

Apart from Top Gloves, PBB and few others, how many Malaysian companies can consistently deliver growth like Coca Cola , Gillette, etc ?

=======

Warren buffet, his company now, insures the kind of risk no one else dare to insure. Multibilion dollar hurricanes, earth quakes, terrorism, micheal jordan legs.

Is he conservative or adventurous?

You need to revisit and study again your definitions and thinking.
25/08/2018 21:03
Patron For every Jack Ma there's millions of MLM scammers. For every Warren Buffet there's millions of snakeoil salesman / stock market seafoods
25/08/2018 21:08
ncl90 Ya...agreed with icon8888.
Klse stock most just for medium term....hold long term may lost back or back to square.
25/08/2018 21:09
Apabagus Jon baby.Let's answer this question first.If W Buffett was a Msian instead of a USA citizen and he can only invest in bursa, what cos would enable him to get the results he achieved now as a usd multibillionaire?
Final reminder to you baby.One yr experience dun talk so much.
25/08/2018 21:18
Alex™ Icon sifu talk really geng. Yes, none of the companies in Malaysia have the competitive advantage compared to that of the U.S.

Nestle maybe? But bukan buatan malaysia
25/08/2018 21:23
qqq3 lots of theories, lots of experiences

but who can escape from being "fooled by randomness"
25/08/2018 21:46
qqq3 by probability > Aug 25, 2018 06:23 PM | Report Abuse

as such, the objective in i3 should be more about unmasking the risk of a high risk (perceived) high return stocks
===============

yes I agree.....a lot can be gained by knowing and thinking of risks and the risk - reward relationship.....but if everyone only thinks about the risks....who is going to commit?

can KYY commit so much if he worries so much about risks?

me? I think there is no free lunch....Higher returns are earned from taking on higher risks, ....and keep your fingers crossed.
25/08/2018 21:56
Up_down 3iii is the one WB loyal disciple here who is able to make money consistently in KLSE.
25/08/2018 22:10
qqq3 your personality fits the environment for that period, u make a lot of money.....some other periods, how?
25/08/2018 22:14
qqq3 man to fit the environment or environment to fit the man?
25/08/2018 22:15
Up_down Sadly, we can’t simply change our personalities as we wish in a short time. That’s how ‘I ‘ formed. Why being so greedy? We can make a good fortune when our personalities fit into environment if we mindful where we are and applying sailang style. The rest of unfit period....enjoying life lor.
25/08/2018 22:25
qqq3 by Up_down > Aug 25, 2018 10:23 PM | Report Abuse

Sadly, we can’t simply change our personalities as we wish in a short time. That’s how ‘I ‘ formed. Why being so greedy? We can make a good fortune when our personalities fit into environment if we really know our ourselves and applying sailang style. The rest of unfit period....enjoying life lor.
==========

correct
25/08/2018 22:26
Up_down That’s an ideal situation but we hardly can achieve that level of wisdom. Lol
25/08/2018 22:31
cheated_ Why TG, PBB not in your portfolio? Why instead choose LionInd, WCE, Ekovest-W, etc?

Posted by Icon8888 > Aug 25, 2018 09:03 PM | Report Abuse

I am not against Buffettology. Who am I to question a great investor like that with solid proven track record ?

I AM AGAINST APPLYING BUFFETTOLOGY IN MALAYSIA.

Apart from Top Gloves, PBB and few others, how many Malaysian companies can consistently deliver growth like Coca Cola , Gillette, etc ?

=======

Warren buffet, his company now, insures the kind of risk no one else dare to insure. Multibilion dollar hurricanes, earth quakes, terrorism, micheal jordan legs.

Is he conservative or adventurous?

You need to revisit and study again your definitions and thinking.
25/08/2018 22:33
qqq3 Posted by Up_down > Aug 25, 2018 10:31 PM | Report Abuse

That’s an ideal situation but we hardly can achieve that level of wisdom. Lol
===========

can never because its hindsight.
25/08/2018 22:34
klee Be gentle on jon baby.He is just taking baby steps and gonna fall a lot.Be gentle please.Wakaka.
25/08/2018 22:43
Up_down Listen to your intuition

https://youtu.be/UzRvKXiKbuw
25/08/2018 23:00
qqq3 as such, the objective in i3 should be more about unmasking the risk of a high risk (perceived) high return stocks
===============

yes I agree.....a lot can be gained by knowing and thinking of risks and the risk - reward relationship.....but if everyone only thinks about the risks....who is going to commit?

can KYY commit so much if he worries so much about risks?

me? I think there is no free lunch....Higher returns are earned from taking on higher risks, ....and keep your fingers crossed.

but having said all that.....I think it is good idea to classify all shares you are interested in, into high risk high return shares or low risk low return shares.....or any thing in between?

take my word for it.....2 years already......all OTB shares and the timing of it, are high risk high returns shares.....suitable for the adventurers, not for widows
25/08/2018 23:09
probability very interesting..just as i had thought all this while..

thanks up_down

thats why we can easily know whom we can fall in love and whom we cant
within a few conversations.


Posted by Up_down > Aug 25, 2018 11:00 PM | Report Abuse

Listen to your intuition

https://youtu.be/UzRvKXiKbuw
25/08/2018 23:11
Up_down Probability. Hope to achieve that level in investing. Listen to your intuition....無招勝有招. Lolz
25/08/2018 23:23
qqq3 In response to this message

http://klse.i3investor.com/blogs/koonyewyinblog/171084.jsp

I wrote the following to KYY...and he thanked me for it.....





man to fit the environment or environment to fit the man.....

if you are KYY....with KYY record, confidence, bullets, attitude towards risk, money and wealth, worth hundreds of millions, what is a few million here and there?

its nothing.....if you are widow with fixed allowance, money has a different meaning.....your attitude towards risk, money and weath is very different from KYY one.

KYY has no hesitation in changing the environment to fit the man....KYY has the confidence and the bullets to change reality. ....The only problem is....how many of us are KYY?

That is why we hunt in the middle, eating left over grass.....KYY hunts in the edges, eats fresh grass ....feast or famine......even if famine , KYY still has his abalone ......what people say, several generations no worry.....

Chicken , play with nuts , scared scared..... cannot expect to have super investor returns......facts of life....

What has changed in steel industry from March to now? Nothing....except KYY is in, in March KYY was not in.....recall in March, KYY says with every town full of unsold houses, steel shares cannot buy one.....
25/08/2018 23:28
qqq3 guts.....but I tend to lose money if I trade fast and depends on guts........and tend to make winning trades if I trade slower and use my experience......

another way of putting it....if I buy early in the mornings, I tend to lose money......if I buy in the afternoons, I got good chances of making money.....
25/08/2018 23:40
klee As usual,a Plp will forever be a Plp.Uncle praise a bit makes him feel he can fly.
25/08/2018 23:40
calvintaneng There are 2 Schools of Thoughts in KLSE

1) Those who are Value Investors. My Johor Sifu said in investment we buy great growing companies that will give value to all collectively.

And he was correct!

2) On the other hand there are those who think that KLSE is a zero sum game. This kind of doctrine leads them to the belief that to win some must lose. And to win big some others must suffer huge losses. This kind of belief system is ruthless like a dog eat dog world. This led to the rise of Syndicates catching sorchai & trapping greater fools.

Calvin thinks KLSE is a place to find Companies to invest in. And there are many if only you will do your homework well

Before me is "The Monthly Digest" by Dr Neoh Soon Kean of Dynaquest (The Benjamin Graham of Malaysia who taught Value Investing)

This is the January 2009 Edition. In few short months it will be 10 years already

Let's take a look of what this Great Sifu recommended then


1) CENBOND at 40 sen (See what Dr Neoh said about Cenbond: Attractive valuations from the two commonly used fundamental yardsticks, P/E multiple of only 4x and a DY of 8% nett)

This was a chun chun call as Cenbond was later taken private


2) DAIBOCHI at 4.95 sen (A recovery stock. EPS bottomed out in 1H05 and continued to improve in the subsequent quarters. Currently, trading at a prospective P/E multiple of <5x and a very high DY of >14% nett.

Another chun chun call by Dr Neoh. Dr Neoh has 1 million shares of Daibochi. And Daibochi up over 1,000% in less than 10 years.

Now who say Value Investing is not for Malaysia?

3) HIROTAKO at 54 sen (Relatively high DY of almost 5.5% nett & reasonable P/E multiple)
Another chun chun call taken private!

4) MUDA at 60 sen (Turned around in 1Q07. Currently, trading at a prospective P/E multiple of 3x and a DY of 5% nett and has a very high operating cash flow price)

Another chun chun call. However Muda dropped from 60 sen to 32 sen.
At 32 sen Calvin hantam kuat kaut. But eventually Muda crossed Rm2.00 & split. Then up again for almost 10 baggars if you bought at bottom of 32 sen (Note: Over the years Calvin also tendered & bought some Muda Company cars)


5) PIE at Rm3.70 (This high champion dividend stock. Both my Johor Sifu & Osk Iskandar Top Boss Mr. Law also own it for dividends)


6) SKPRES at 0.095 (Trading at a forward P/E of <4x and a DY of >5% nett. These may be regarded as undemanding valuation)

THIS SUPER STOCK ROSE UP BY OVER 2,200% on Jan 5 2018 at Rm2.28
Calvin made money in this great stock!!!

7) TGUAN at 72 sen (A stretch firm producer with EPS growing at an average compounded rate of 5.2% per annum for the last 10 years. A beneficiary of the current bearish crude oil prices as its main raw material (resin) is a product of crude oil)

TGUAN PEAK AT RM4.79 ON FEB 2017 for a Rise of 665% in 8 years or 83% GAIN A YEAR!!!

How come people say Value Investing like Warren Buffet doesn't work in Malaysia


8) TITAN at 76.5 sen (THIS ONE CALVIN BOUGHT BUT AGAIN TAKEN PRIVATE)

9) KAF at 87.5 sen (This one was given MGO at Rm1.30 but rejected by shareholders. Later KAF was taken private for another 100% gain over Rm2.60)

Note: All who receive MGO letter from Tony at 66 sen for TA should reject the offer.

TA & INSAS are both candidates for privatisation like KSF

And Dr Neoh chun chun buy call for KAF at 76.5 sen gained more than 400% inclusive of dividends


10) FIMA CORP at Rm1.88 (Low P/E multiple (<4x) & relatively high DY (>6% nett)

After share split/ bonus issue & dividends FIMACORP is Up 500%!


SO VALUE INVESTING IN MALAYSIA WORKS WONDERS FOR ALL WHO ARE PATIENCE
25/08/2018 23:41
qqq3 by klee > Aug 25, 2018 11:40 PM | Report Abuse

As usual,a Plp will forever be a Plp.Uncle praise a bit makes him feel he can fly.

==========

no, cannot fly.....but still a good piece....
25/08/2018 23:45
Choivo Capital Is Neoh Soon Kean and Yeon Seng Choon a bankrupt? If not, yes it works.

Look, its just logic. Value investing is like inoculation. You either get it or you don't.

====
Apabagus Jon baby.Let's answer this question first.If W Buffett was a Msian instead of a USA citizen and he can only invest in bursa, what cos would enable him to get the results he achieved now as a usd multibillionaire?
Final reminder to you baby.One yr experience dun talk so much.
25/08/2018 21:18
26/08/2018 01:44
qqq3 value investing, growth investing, trading or speculations...the last two having bad ( uncalled for) image....diversified or focused portfolios.....

nowadays, everyone wants to be a hedge fund, 100% return if possible...go and sailang la....value partners cheah cheng hye calls it the killer instinct.
26/08/2018 01:56
Choivo Capital https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/171153.jsp

Bro, you are right, value investing dont work at all man.

====
Apabagus Jon baby.Let's answer this question first.If W Buffett was a Msian instead of a USA citizen and he can only invest in bursa, what cos would enable him to get the results he achieved now as a usd multibillionaire?
Final reminder to you baby.One yr experience dun talk so much.
25/08/2018 21:18
26/08/2018 02:29
Alex™ Dun like that, baby jon capital 100x larger than me oh.

Good morning ah Jon, Monday hoot what stock? 25k at your disposal
26/08/2018 09:00
stockraider PEOPLE NEED TO UNDERSTAND WHY SIFU LIKE ICON, CHARLES T, PROBABILITY, QQQ, CALVIN TAN, KC AND OTB ATTACK JON CHIVO ON THE ISSUE OF RM 5K FEES HE CHARGE FOR TIPS....!!

IF LIKE MOST KUNGFU MOVIES....THESE YOUNG CIKKU JON...GO & ATTACK ALL THE SIFUS KUNGFU ACADEMY IN ORDER TO GAIN FAME & PUBLICITY LOH...!

IT IS !IKE JON GETTING CHEAP PUBLICITY MILEAGE, BY BEATING EACH & EVERYONE OF THEM, THE YOUNG CIKKU GAIN RECOGNITIION LOH...!!
JUST LIKE KUNGFU MASTER WONG FEI HONG BEING DEFEATED LOH...!!

IN ORDER TO STALLED ADVANCES N PROGRESS OF THIS YOUNG CIKKU CHALLENGE, THE SIFU DECIDED TO ATTACK...INSTEAD OF BEING DEFENSIVE....WHEN THESE YOUNG CIKKU COME UP WITH 500% RETURN KUNGFU AND CHARGING RM 5K FEES FOR TIPS & KUNGFU ADVICE LOH....!!

RAIDER SAYS BE SPORTING LAH....JUST ALLOW JON CHIVO CARI MAKAN SIKIT MAH...HE IS STILL YOUNG MAH....!!
26/08/2018 10:04
qqq3 I don't consider myself attacking this Jon....I stay out of it.
26/08/2018 10:46
qqq3 my favorite target for writing here remains OTB and KC....gives me great pleasure.
26/08/2018 10:48
stockraider ACTUALLY JON COME IN MANY FORM & AND MANY MANY ID NAMES MAH....!!

IT IS UNLIKELY U DON ATTACK HIM LOH.....!!

Posted by qqq3 > Aug 26, 2018 10:46 AM | Report Abuse

I don't consider myself attacking this Jon....I stay out of it.
26/08/2018 10:51
3iii Jon.

Biasa-lah.
26/08/2018 11:15
3iii >>>>
====
Apabagus Jon baby.Let's answer this question first.If W Buffett was a Msian instead of a USA citizen and he can only invest in bursa, what cos would enable him to get the results he achieved now as a usd multibillionaire?
Final reminder to you baby.One yr experience dun talk so much.
25/08/2018 21:18<<<<



Stay focus through investing in someone else's businesses

The best athletes become the best at focusing all of their gifts, time and energy on becoming the best in their sport. Likewise, unless one has the benefit of inheritance or marriage, great fortunes have been created by an entrepreneur who focused all of his or her gifts, time, and energy on one business.

Only one person has created billions in wealth by not only investing in someone else's businesses and managers in which to invest. Others can do this - simple in theory and practice, but not easy.

Buffett announced that if he were managing money in the millions instead of billions, he could compound money at an even faster rate - probably twice as fast - which has always been and will always be the average-investor advantage.




Take home messages:

Warren Buffett hasn't invented anything new and doesn't own any patents. He has never started a business an has never taken on the day-to-day management of one. The Oracle of Omaha is so good that he doesn't even need to talk with management, access inside information, or even visit company headquarters of the businesses in which he invests.

Assuming, however, that you study, understand, and employ the same Buffett principles, you too can achieve outstanding market-beating results. Knowledge counts more than experience and business contacts.

Buffett's life is one of extraordinary wealth built on exemplary character traits.
26/08/2018 11:31
kcchongnz Posted by qqq3 > Aug 26, 2018 10:48 AM | Report Abuse
my favorite target for writing here remains OTB and KC....gives me great pleasure.


It gives me utmost pleasure just to respond to your "attack" on me too with my name stated, to expose a know-nothing, talk-nonsense, fake accountant, an incredible PLP, etc. The more you carry out personal attacks, the more you show your stupidity, ignorance, and PLPness.


See how a great PLP acts below,

Posted by qqq3 > Aug 25, 2018 11:28 PM | Report Abuse
In response to this message
http://klse.i3investor.com/blogs/koonyewyinblog/171084.jsp
I wrote the following to KYY...and he thanked me for it.....
26/08/2018 11:57
Apabagus 3iii.No business at ur lectures now have to come here curi makan kah?
26/08/2018 13:19
KLCI King Good sharing, very lively and real.

To sum it all, in order to make money in stock market, you may need
1. knowledge & analytical skills (FA & may be TA)
2. business sense (understand company's product, market & industries)
3. guts (action to buy & sell)
4. targets to profit & cut loss point (know where is the destination)
5. timing to act (when to buy & sell)
6. LUCK.

FUNNY TO SAY, MANY FOLLOW HEARSAY & DEPEND HEAVILY ON LUCK.

They common like the following:
1. knowledge - no time to read & analyze
2. business sense - what is that?
3. guts - rush to buy high & fear to suffer more
4. targets - 100% return in 1 week time
5. timing to act - when every buy, buy AND when everyone sell, sell
6. LUCK - YES
26/08/2018 21:06
paperplane 750k?errrr.. Not 7.5mil or 750mil?hahahaha
27/08/2018 01:57
Choivo Capital How many companies do you think is that amazing in the US stock market? Less than 50 out of 25,000.

And how many selling at attractive valuations? Very very little, maybe 2 or 3.

And how big is US market? Well, Berkshire Hathaway is worth more than the entire KLSE market.

Our name is not warren buffet. Even Koon Yew Yin is a germ when it comes to worldwide capital markets.

If he try to get a meeting with warren buffet, by saying how much money he has, he won't even get past the secretary. A secretary who join WB company in 1970 probably richer than him!

And compared to koon yew yin, we are insects.

You only need one or two company. If you get in aeoncr, myeg etc early, by now you will be talking like 3iii, ahahahaha.

Of course, everyone thinks the grass is greener on the other side, but by virtue of being malaysians, we have information edge about malaysia compared to foreigners.

And if we are not able to find even one or two in malaysia, what makes you think we have a better chance of finding it in the US stock market, where its so efficient, and sharks got from gigantic to tiny.

And we are complete aliens there.

You want to buy the names you know? Everyone there also know. Nvidia 60PE. Google, almost 40PE, Amazon, 250PE.

General mills and kelloggs can actually show you less profit and revenue for 2 years for you to see. 15PE, but you also don't dare buy because you wont know the consumer market there that well. Here, nestle, you know every year sure up, but there, you wont even know which consumer brand to buy.

Having said that, US now also alot of opportunities in the energy sector, quite a few energy companies at 3-6 PE. Synchrony financial is only 9PE.

I considered going to US markets in 2016, and if i did, i think i will feel like genius, because a rising tide lifts all boats. But that does not change the fact that i would probably just lucky.

Malaysian markets is actually more efficient than US market due to certain factors. But it is more inaccurate.

And there's only 9XX companies. Newbie just need to read for a few months, and they'll know the market quite closely. Of course almost none will do that.

US market, need at least 3 years to finish reading.

=====

Icon8888 I am not against Buffettology. Who am I to question a great investor like that with solid proven track record ?

I AM AGAINST APPLYING BUFFETTOLOGY IN MALAYSIA.

Apart from Top Gloves, PBB and few others, how many Malaysian companies can consistently deliver growth like Coca Cola , Gillette, etc ?
25/08/2018 21:03
28/08/2018 17:01
Choivo Capital Every time, people say cannot find 10 baggers in malaysia, don't have companies with moat.

And yet every few years, another 10 bagger appear.

Its not no chance, we are just not smart enough yet.

====
Icon8888 I am not against Buffettology. Who am I to question a great investor like that with solid proven track record ?

I AM AGAINST APPLYING BUFFETTOLOGY IN MALAYSIA.

Apart from Top Gloves, PBB and few others, how many Malaysian companies can consistently deliver growth like Coca Cola , Gillette, etc ?
25/08/2018 21:03
28/08/2018 17:02


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