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Author: kcchongnz   |   Latest post: Tue, 13 Aug 2019, 7:49 PM

 

Insas a value trap? Kcchongnz

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I read another article, “Insas Deep Value Investing: Assets value (liquid assets) and Earning play” on the asset investing on Insas by a diehard investor of the stock, our Mr SSLee. But sadly, the writer got mocked, hammered and belittled again by many forumers, big or small included. “Big” are those seemingly knowledgeable, well experienced and who seemed to have made a lot of money in the stock market. “Small” are those appears to be novice and newbies who just like to hantam others without knowing much about investing and this category forms the bulk of the critics.

Interestingly, my name was mentioned in the article with some of them my own words and I presume I was ridiculed too. But it is okay for me as in the internet space, there are many kinds of people, and many kinds of investors who have their own opinions and different investing strategies. But is their constant ridiculing on the writer in his writeup on Inss, or the asset value investing strategy justifiable?

Let us base on some facts, rather than simply hantam the writer as I opine that the writer has given his opinion based on facts, and hard facts. His article is appeared in the link below,

https://klse.i3investor.com/blogs/Sslee_blog/215437.jsp

Yes, most of the material presented is facts and true facts. No one has disputed those facts. The stock is severely undervalued. Can anyone dispute that? Put in your facts and argument if you think otherwise, instead of just shouting like the one below,

[qqq3 On Insas....Insas rubbish hunters think they find diamond....but most of the time, market is correct , rubbish hunters are wrong....just that u do not know u are wrong because u lack the skill set to analysis the thing properly.] 

This character has been spewing this venom which I can say easily tens of times in i3investor. Of course, there are others who are truly knowledgeable and experienced investors commenting that Insas is a “value trap”, which I think they do have a legitimate reason for saying so. But what is a value trap?

Goggle Investopedia gives the following definition,

“A value trap is a stock that appears to be cheap because the stock has been trading at low valuation metrics such as multiples of earnings, cash flow or book value for an extended time period. Such a stock attracts investors who are looking for a bargain because they seem inexpensive relative to historical valuation multiples of the stock or relative to the prevailing overall market multiple. The trap springs when investors buy into the company at low prices and the stock continues to languish or drop further.”

The whole lot of above applies to Insas, except for the last sentence which I would like to dispute that in the case of Insas.

First consider in the future, will the stock price “continues to languish or drop further”? I sincerely don’t know as I have no crystal ball in front of me, like many seems to have. But I will argue that it is unlikely. But that would be another part of the story which I wish to talk about it in my later articles on Insas if there is any interest on it.

The only thing critics can say about Insas is it has been a value trap in the past. But is it true, or is it just a perception?

To answer the question, let us look at the share price performance of Insas in the past. One should not take the share price of Insas in isolation; one has to compare with other stocks and a broad benchmark. Do you agree? I will go ahead and do it.

First compare the two stocks promoted by the critic above voraciously in the last three years, telling everyone in i3investor to sailing and margin in them. They are Jaks and Eversendai. These two stocks were also promoted heavily using the “Golden Rule” investing in i3investor in the last three years, yes, the unbeatable earnings investing strategy, the “only one” acceptable in investing.

Table 1 in the Appendix shows the comparison of returns of Insas for the short, mid and long-term as compared to the broad KLSE Index and those “Golden Rule” stocks. For the short-term of one year, Insas share price fell 8%, under-performed the broad market of -4.5%. For the past one year, most stocks dropped in price anyway. Even a blue chip like Maybank also fell about the same magnitude of 7%. However, in contrast with the “Golden Rule” stocks, Jaks fell 31%, and Sendai -49%. In the mid-term of 3 years, Insas share price has risen by 23%, compared to the flat broad market and the 9% rise of Maybank. Again, compared with the loss of 14% of Jaks, and the flat price of Sendai, Insas performed much better.

What about the long-term? As an investor, we should be more concern about the long-term return, shouldn’t we?

Insas’s share price rose 100% in ten years. Using the rule of 72, its compounded annual return, CAGR is 7.2%, nothing to shout about. However, its 10-year return is better than the 43% return of the broad market and the 49% return of Maybank. On the other hand, the share price of Sendai fell by a whopping 73%, and that of Jaks by 9%!

Tell me, if Insas is a “rubbish stock”, how do you consider Jaks and Sendai? Who actually “do not know u are wrong because u lack the skill set to analysis the thing properly” as criticised non-stop, again and again like a broken clock by the commentator above?

The figures 1 and below show the return comparisons of the three stocks for the 3-year and 5-year period. The green line is the share price movement of Insas, dark blue line for Sendai, and the light blue for Jaks. I could not reproduce the 10-year return from gurufocus, don’t know why.

Figure 1

 

Figure 2

As a record, I seldom just talk about the share price movement of a stock in isolation as it has not much value in it. This article is just to dispel some untruths and the constant ridiculing and hammering of other investors or investing strategies without facts.

As I have presented, Insas doesn’t seem to be so bad after all in the past. I believe it will do much better than the other two stocks and the overall market in the future. There are no hanky-panky of the management and major shareholders such as doing jobs for their private company without paying for years, and rewarding themselves with huge amounts of free shares and discounted private placements etc. Insas may not be a great company with good growth in earnings. However, the asset value of the company has been increasing rapidly over the years as shown in Figure 3 below and it is way undervalued.

The assets are mostly marked-to-market in cash and investments. There also has not been cash burn in any of their business segment, etc.

More importantly, there are other ways of investing out there which have been proven successful, if not more successful.

KC Chong

Appendix

 

Period

7/17/2019

1 year

3 years

10 years

KLSE Index

1658

1737

1668

1156

Return

KLSE

-4.5%

-0.6%

43.4%

 

Insas

-8%

23%

100%

 

Jaks

-31%

-14%

-9%

 

Sendai

-49%

0%

-73%

 

Maybank

-7%

9%

49%

 

     

 

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Labels: INSAS

Related Stocks

Chart Stock Name Last Change Volume 
INSAS 0.785 +0.005 (0.64%) 63,900 

  6 people like this.
 
Icon8888 zzzz
19/07/2019 7:03 PM
3iii My iconic icon8888 is sleepy as usual. :-)
19/07/2019 7:10 PM
stockraider On the Contrary Raider & gang are the victim mah...!!

Take for example our Margin of safety stock insas were attacked by people who claimed long term investors like 3iii & Philip relentlessly mah....!!

This attack is done , despite the margin of safety value investor Grandmaster sifu Ben Graham, highly recommend margin of safety as the central core of investment and to avoid overvalue stock like plaque loh.....!!


Posted by 3iii > Jul 19, 2019 6:59 PM | Report Abuse

The only true long term investors in this forum are few.

You will learn of them, since they are often the targets of unsuccessful attacks by raider and his gang.
19/07/2019 7:18 PM
deMusangking past, present, future = 0.80!!!!!

real value trap!!!!!!

hahaha
19/07/2019 7:19 PM
stockraider patience...patience...patience loh...!

Believe margin of safety will eventually payoff mah...!!



Posted by deMusangking > Jul 19, 2019 7:19 PM | Report Abuse

past, present, future = 0.80!!!!!

real value trap!!!!!!

hahaha
19/07/2019 7:20 PM
deMusangking past, present, future = 0.80 = Believe margin of safety will eventually payoff mah...!! !!!!!

still in dreamland!!!!!

better sell off, otherwise u will lose all ur panttees!!!!

hahagha
19/07/2019 7:22 PM
stockraider Learn from Uncle calvin Tan he is the best I3 value investor loh...!!

Posted by deMusangking > Jul 19, 2019 7:22 PM | Report Abuse

past, present, future = 0.80 = Believe margin of safety will eventually payoff mah...!! !!!!!

still in dreamland!!!!!

better sell off, otherwise u will lose all ur panttees!!!!

hahagha
19/07/2019 7:24 PM
Icon8888 3iii buffett wannabe everyday acts high class

But dinner eats grass
19/07/2019 7:24 PM
deMusangking raider eats grass!! a real cow!!!!

haha
19/07/2019 7:26 PM
stockraider U will never eat Grass if u buy insas bcos got dividend mah....!!

Don be like musang, an animal that eat shit mah....!!

Posted by deMusangking > Jul 19, 2019 7:26 PM | Report Abuse

raider eats grass!! a real cow!!!!

haha
19/07/2019 7:28 PM
3iii >>>

Posted by stockraider > Jul 19, 2019 7:18 PM | Report Abuse

On the Contrary Raider & gang are the victim mah...!!

Take for example our Margin of safety stock insas were attacked by people who claimed long term investors like 3iii & Philip relentlessly mah....!!

This attack is done , despite the margin of safety value investor Grandmaster sifu Ben Graham, highly recommend margin of safety as the central core of investment and to avoid overvalue stock like plaque loh.....!!

>>>


If only I can be convinced of raider's ability in implementing his margin of safety.

I have already listed some of my stocks which have HUGE margin of safety which raider shamelessly cannot admit his past mistakes. He asked people with these stocks to sell them because there was no margin of safety. However, over the LAST 5 TO 10 YEARS, raider was proven wrong. These stocks have grown their intrinsic values over the years.

It is obvious raider knows little about margin of safety principle. If only he is humble and honest to acdmit his stupidity and mistakes. But then we know raider, he is uncouthed.
19/07/2019 7:31 PM
3iii :-)


Iconic zzzzzxz
19/07/2019 7:31 PM
stockraider U NEED TO UNDERSTAND LOH...BEN GRAHAM TRAINING ADVICE OVERVALUE STOCKS LIKE NESTLE & QL WITH PE EXCEED 50X SHOULD BE AVOIDED AT ALL COST MAH....!!

IF THESE STOCK PRICE HAD CRASHED, AND RETREATED TO AN UNDERVALUE LEVEL, THEN RAIDER WILL SUPPORT, IT GOT MARGIN OF SAFETY LOH...!!

>>>


If only I can be convinced of raider's ability in implementing his margin of safety.

I have already listed some of my stocks which have HUGE margin of safety which raider shamelessly cannot admit his past mistakes. He asked people with these stocks to sell them because there was no margin of safety. However, over the LAST 5 TO 10 YEARS, raider was proven wrong. These stocks have grown their intrinsic values over the years.

It is obvious raider knows little about margin of safety principle. If only he is humble and honest to acdmit his stupidity and mistakes. But then we know raider, he is uncouthed.
19/07/2019 7:37 PM
deMusangking raider's ability in implementing his margin of safety. >>>>>>>>>>>>>>>>>>>>>>>>> to holland!!!!

hahaha
19/07/2019 7:41 PM
stockraider MARGIN OF SAFETY NO HOLLAND...IT IS USA MAH...!!

Posted by deMusangking > Jul 19, 2019 7:41 PM | Report Abuse

raider's ability in implementing his margin of safety. >>>>>>>>>>>>>>>>>>>>>>>>> to holland!!!!

hahaha
19/07/2019 7:42 PM
deMusangking raider calling to holland!!!! well done!!!

haha
19/07/2019 7:43 PM
stockraider What Is Margin of Safety?

Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. In other words, when the market price of a security is significantly below your estimation of its intrinsic value, the difference is the margin of safety. Because investors may set a margin of safety in accordance with their own risk preferences, buying securities when this difference is present allows an investment to be made with minimal downside risk.

Example of Margin of Safety

As scholarly as Graham was, his principle was based on simple truths. He knew that a stock priced at $1 today could just as likely be valued at 50 cents or $1.50 in the future. He also recognized that the current valuation of $1 could be off, which means he would be subjecting himself to unnecessary risk. He concluded that if he could buy a stock at a discount to its intrinsic value, he would limit his losses substantially. Although there was no guarantee that the stock’s price would increase, the discount provided the margin of safety he needed to ensure that his losses would be minimal.

For example, if he were to determine that the intrinsic value of XYZ’s stock is $162, which is well below its share price of $192, he might apply a discount of 20% for a target purchase price of $130. In this example, he may feel XYZ has a fair value at $192 but he would not consider buying it above its intrinsic value of $162. In order to absolutely limit his downside risk, he sets his purchase price at $130. Using this model, he might not be able to purchase XYZ stock anytime in the foreseeable future. However, if the stock price does decline to $130 for reasons other than a collapse of XYZ’s earnings outlook, he could buy it with confidence.

INSAS IS A GOOD EXAMPLE OF MARGIN OF SAFETY INVESTMENT LOH...!!
19/07/2019 7:47 PM
deMusangking banners here n there...still BN lost!!!!!

haha
19/07/2019 7:50 PM
calvintaneng Calvin called for a buy for Gsb at 9 sen

Then Calvin called for a strong sell on Gsb after Gsb has gone up more than 100% to 22 sen

Surprise?

Sorchai musang bought Gsb at 22 sen. Now musang trapped at 22 sen

Tell you what?

Insas and TA will both go over Rm2. 00 one day.
19/07/2019 8:20 PM
deMusangking aiyo, me bot at > 22 sen lah.. alredi in holland lah.also bot hengyuan at > 18.00 , also in holland lah .....pokai alredi hahhahaha

but ur wife still wants my sausage sweet and nice!!!
hahahahaha
19/07/2019 8:31 PM
3iii >>>>

stockraider U NEED TO UNDERSTAND LOH...BEN GRAHAM TRAINING ADVICE OVERVALUE STOCKS LIKE NESTLE & QL WITH PE EXCEED 50X SHOULD BE AVOIDED AT ALL COST MAH....!!

IF THESE STOCK PRICE HAD CRASHED, AND RETREATED TO AN UNDERVALUE LEVEL, THEN RAIDER WILL SUPPORT, IT GOT MARGIN OF SAFETY LOH...!!

>>>>



Raider should be honest.

When Nestle was trading at PE OF 28 and giving a DY of 3.5%, raider was shouting to sell. Does he understand valuation? Does he understand margin of safety concept?
19/07/2019 8:40 PM
Connie555 This Kay See only know how to choose a particular period for that stock to prove that it is better than others.

What if those people who bought at Rm1 at 2017, until now they lose about 20% nvr even recover yet after 2 years.

I also know how to pick a particular period to talk about share
19/07/2019 10:09 PM
3iii >>>

Connie555 This Kay See only know how to choose a particular period for that stock to prove that it is better than others.

>>>>


How credible was he? :-)
19/07/2019 10:46 PM
stockraider He is helping u to make monies mah....!!

If u lose monies buy at Rm 1.00, then it is time for u to buy Rm 0.795 now, to average and make more monies mah...!!

No point complain....complain & act like pondan n miss opportunity mah..!!

Posted by Connie555 > Jul 19, 2019 10:09 PM | Report Abuse

This Kay See only know how to choose a particular period for that stock to prove that it is better than others.

What if those people who bought at Rm1 at 2017, until now they lose about 20% nvr even recover yet after 2 years.

I also know how to pick a particular period to talk about share


3iii
6100 posts
Posted by 3iii > Jul 19, 2019 10:46 PM | Report Abuse

>>>

Connie555 This Kay See only know how to choose a particular period for that stock to prove that it is better than others.

>>>>


How credible was he? :-)
19/07/2019 10:53 PM
dragonslayer Aiyo..halo halo..go back insas forum lah...everywhere also gaduh same thing...insas mati pucuk lah...according to Jaks promoter cik sarifah...lol...aiyoyo...kikiki
19/07/2019 10:57 PM
kcchongnz Posted by Connie555 > Jul 19, 2019 10:09 PM | Report Abuse
This Kay See only know how to choose a particular period for that stock to prove that it is better than others.
What if those people who bought at Rm1 at 2017, until now they lose about 20% nvr even recover yet after 2 years.
I also know how to pick a particular period to talk about share


Well, my comparisons for short-term, mid term and long term return of investing (not speculating)in a stock in this article were by comparing the returns over a one, three and ten years period from now, not trying to choose a date to suit.

Share price of those three stocks I used have changed by more than 500% over the last few years, which one you like to use?

If you are not agreeable to my benchmarks, you may use your own periods to dispel it. Please do and show us rather than just making a random statement like that.

Or if you prefer to use the peak and trough price of each stock, I know you won't be able to get them, I will provide you wit those prices which I took time to obtain from the Bursa graphs, maximum about 6 years, for your ease of reference as below,

Company Price Peak Trough Best gain Worst loss
Insas 0.800 1.300 0.400 100% -38%
Jaks 0.795 1.800 0.400 99% -56%
Sendai 0.460 1.700 0.400 15% -73%

To help you to understand them which I am not sure you could just by looking at the table above,

If you take the peak prices of $1.30, Insas has lost 38% to-date, compared to the loss of 56% and 73% respectively for Jaks and Sendai.

If you talk about gain from the lowest price for the last 6 years, and interestingly, all stocks have the same lowest price, Insas gained 100%, the same as Jaks, but 15% for Sendai respectively.

Take your pick, or go to do some data mining to come out with your own figures.
20/07/2019 6:34 AM
Icon8888 Pick stocks based on earning

assets play does not work

Ask calvintaneng how he almost went bankrupt punting assets play
20/07/2019 6:43 AM
Icon8888 The sooner you realise this the less 冤枉路you travel
20/07/2019 6:44 AM
77huat77 Agree lo just like ekovest got toll asset but cannot up one
20/07/2019 8:09 AM
Cow Head aiyo, ass ass lee masih muda lagi ma, still can wait another 10 to 20 years on assets play, kekekekekeke

sabar-sabar is the "key word" , sabai-sabai
20/07/2019 8:14 AM
qqq3 There is method to icon....HTpadu 60 to $ 1.20 in a few months....the key is to find what u betting on.............

so why HTpadu 60 to $ 1.20?....Insas 80 past present and future?

truth is revealed in reality....to value investors, their truth is in their imagination.
20/07/2019 9:00 AM
qqq3 There is method to icon....HTpadu 60 to $ 1.20 in a few months....the key is to find what u betting on.............

so why HTpadu 60 to $ 1.20?....Insas 80 past present and future?

truth is revealed in reality....to value investors, their truth is in their imagination and in their stubbornness.
20/07/2019 9:02 AM
deMusangking ..to value investors, their truth is in their imagination and in their stubbornness.

--------------------------------------------------------------
addressed 2 raider mos probli!!!!!
anyway pray 4 him lah as his warrants will be roasted like KFC if mother < 1.00! must kesian him lah

haha
20/07/2019 9:07 AM
popo92 Margin of safety based on Intrinsic value is theoretically true but this intrinsic value should not based on merely net tangible assets value. It should based on the value that can create in future... earnings....
20/07/2019 11:24 AM
3iii >>>


Icon8888 Pick stocks based on earning

assets play does not work

Ask calvintaneng how he almost went bankrupt punting assets play
20/07/2019 6:43 AM


>>>>


Poor calvintan
20/07/2019 11:31 AM
stockraider I HATE TO DISPUTE WITH MY IDOL ICON, BUT IN THIS CASE, I NEED TO CORRECT THE MISCONCEPTION OF INVESTMENT & VALUE CREATION LOH...!!

HOW DO COMPANY CREATE VALUE AND SUPPORT ITS VALUATION LEH ??
IN ORDER TO UNDERSTAND, U MUST UNDERSTAND THE CONCEPT OF MONEY MAKING LOH...!!

A.SEEN FROM OPERATIONS GROWTH PERSPECTIVE
1. EARNINGS GROWTH
2. MKT LEADERSHIP & BRAND
3. STABILITY OF EARNINGS
4. STABILITY & CONSISTENT CASHFLOW

IN HERE THE INVESTORS IS WILLING TO PAY A PREMIUM, BCOS THEY ARE FORECASTING & SPECULATING IT WILL CONTINUE TO GROW MUCH MORE IN THE FUTURE THUS COUNTER LIKE QL, NESTLE, DLADY ETC.
USUALLY INVESTORS PAY HUGE PREMIUM FOR THIS SPECULATION LIKE QL PE 50X


B. SEEN FROM THE BASIS INHERENT CONTROL OF VALUABLE RESOURCES WHICH HAVE
GOOD VALUE.
1. IT COULD BE THE VALUE OF ITS ASSETS
2. IT COULD BE THE HIDDEN VALUE OF ITS ASSETS
3. IT COULD BE FROM THE LIQUID ASSETS IS HOLD LIKE CASH & SECURITIES.
4. IT COULD BE ITS NON SEXY PROFIT & CASHFLOW

FOR THESE, WE ARE TALKING OF VALUE INVESTMENT, U PAY A HUGE DISCOUNT FOR THE BUSINESS AND THIS IS BASE ON PREMISE WRONGLY RECOGNISE THE VALUE & THE POTENTIAL OF ITS BUSINESS & ASSETS LOH.
U ARE WILLING TO GIVE TIME FOR EITHER THE MARKET TO RERATE ITS POTENTIAL AND ACCORD IT A FAIRER OR BETTER VALUE IN FUTURE LOH...!!
OR WHEN THE MAJOR OWNER DECIDE TO RELEASE OR UNLOCK ITS VALUE LOH...!

EXAMPLE IF UR FATHER OWN AN ACRE OF EMPTY LAND IN BANDAR UTAMA AT COST OF RM 200K, U WILL EARN NOTHING, IN FACT,U HAVE NEGATIVE RETURN PAYING QUIT RENT & ASSESSMENT OF RM 30K A YEAR LOH...!!
BUT DO U ACCORD THIS VALUABLE LAND IS WORTH OR VALUE RM 100K ONLY OR BELOW SINCE EVERY YEAR WILL COST U RM 30K IN QUIT RENT & ASSESSMENT ?
IF RAIDER OFFER U DOUBLE RM 400K TO BUY OFF FROM U WOULD U SELL & WHAT ABOUT RM 1M LEH ??

OF COURSE U GO & CHECKOUT THE LAND VALUE 1ST LOH...IF IT IS VALUE RM 9M DEFINITELY U WILL LAUGH AT RAIDER FOR TRYING TO PULL A FAST ONE MAH..!

AT RM 8-9M YOUR FATHER STILL DECIDE NOT TO SELL LOH...BCOS HE DO NOT NEED THE MONEY NOW & HE SEE THE POTENTIAL IT CAN GO TO RM 15M IN 5 YRS TIME LOH....!!

BUT SUPPOSE YOUR FATHER GENUINELY DECIDE TO SELL & UNLOCK VALUE & DECIDE TO SELL THIS LAND NOW AND HE IS GOING TO GET AT LEAST RM 8M AND YOUR FAMILY IS GOING TO MAKE RM 7.9M LOH...!!

ASSUME U HAVE 10% MINORITY SHARE OF THIS LAND R U WILLING TO SELL THIS LAND SHARE FOR RM 100K TO RAIDER BCOS IT HAS NO EARNINGS GROWTH LEH ??
IF YES U BE THE SOCHAI LIKE PHILIP, 3iii and Icon loh...!!

This is precisely value investment in insas all about loh ,buying into margin of safety with the view of mkt rerating realizing the true potential or actual value of insas loh..!!

Calvin Tan is not wrong, in fact he make very good profit on some shares based on this investment concept mah...!!
20/07/2019 12:30 PM
3iii >>>

Calvin Tan is not wrong, in fact he make very good profit on some shares based on this investment concept mah...!!

>>>>>



...on some shares.

Calvin is less modest. He made few hundred percentages on nu.erous shares.

The only problem is it is too difficult to believe.

For example, after about 10 years, his GSB rose to 22 sen and he suddenly appeared claiming he has now made a few hundred percents on GSB.

As I have mentioned already, the majority, if not most of the value investors failed to capture any gains in their undervalued stocks. Why? They have already sold these shares way before some of these shares show gains many years later. Patience is so so important. Also, many of their undervalued stocks stayed undervalued and are what we termed value traps.

Looks like calvin is one who hold onto his undervalued stocks forever. He must have hundreds of these and it is just fascinating and also unbelievable to see him declaring his hundred percentages gains each time one of his old recommendations have a temporary and non sustainable run.

Truly a fascinating and unbelievable story, to me at least. Raider is more credible in this respect, in resurrecting less number of his dead stocks to claim he made a killing after umpteen years of non activity.
20/07/2019 2:20 PM
stockraider correctloh...calvin tan also make alot of monies on pmcorp mah...!!

Posted by 3iii > Jul 20, 2019 2:20 PM | Report Abuse

>>>

Calvin Tan is not wrong, in fact he make very good profit on some shares based on this investment concept mah...!!

>>>>>

...on some shares.

Calvin is less modest. He made few hundred percentages on nu.erous shares.

The only problem is it is too difficult to believe.

For example, after about 10 years, his GSB rose to 22 sen and he suddenly appeared claiming he has now made a few hundred percents on GSB.

As I have mentioned already, the majority, if not most of the value investors failed to capture any gains in their undervalued stocks. Why? They have already sold these shares way before some of these shares show gains many years later. Patience is so so important. Also, many of their undervalued stocks stayed undervalued and are what we termed value traps.

Looks like calvin is one who hold onto his undervalued stocks forever. He must have hundreds of these and it is just fascinating and also unbelievable to see him declaring his hundred percentages gains each time one of his old recommendations have a temporary and non sustainable run.

Truly a fascinating and unbelievable story, to me at least. Raider is more credible in this respect, in resurrecting less number of his dead stocks to claim he made a killing after umpteen years of non activity.
20/07/2019 2:22 PM
stockraider Recent Calvin pick on asb is another superb value strategy mah...!!

value is unlocking for this stock mah....!!
20/07/2019 2:27 PM
3iii Most undervalued stocks are undervalued for good reasons.

An example, you have 2 factories which are asset heavy (manufacturing plants). In one, the factory X, is running efficiently and generating good returns on its assets. Its assets are worth 1 m and it is generating a ROE of 15%, that is a net profit of 150k.

The second factor too has assets (machineries) valued at 1 million. It is however no longer in production. The assets it possess is also worth 1 m.

How will you value factories A and B?

Will you pay 1 m to own factory B? Arevyou surprised that factory be is priced by buyers at less than its tangible book value? At price less than its book value, will you rush in to buy.

OTOH, factory A is priced at 4 times its book value. Will you buy factory A? Why? Where is the value in factory A? Some refuses to biy because they say it is expensive. Can they reason why they may be wrong in thinking so?

Most undervalued companies are in factory B situation? They are undervalued for the right reasons. In other words, they are appropriately valued. Worse still, time is not a friend for such businesses. Should you own it today, you may soon realise its value deteriorating over time.

On the other hand, time is the friend of great businesses. Owning factory A at a price higher than book may be a great investmenr indeed. The great company continues to grow its intrinsic value. As long as you do not overpay too much, owning this company at fair price or even slightly higher price, will make you a lot of money over a long time. An example, See's candy. Please read See's candy story to understand this important point further.

Thus in the long term, you will realise the huge margin of safety offered by factory A and the absence of margin of safety when you invested in factory B.


If you understand all of the above, you will also understand why Buffett, Charlie Munger, 3iii and a few others in this forum are investing in quite similar ways.


Investing is simple but not easy.
20/07/2019 2:42 PM
Icon8888 zzzzz
20/07/2019 2:43 PM
3iii >>>>

Posted by stockraider > Jul 20, 2019 2:27 PM | Report Abuse

Recent Calvin pick on asb is another superb value strategy mah...!!

value is unlocking for this stock mah....!!

>>>>


With so many recommendations in his list which is owned forever, a few shine at different occasions. Do you know within a 1 year period, it is not uncommon to see a stock price rising 50% and falling its equivalent 1/3rd.
20/07/2019 2:45 PM
3iii Zzzzzzzzzzzzz icon is still sleepy. :-)
20/07/2019 2:46 PM
3iii Poor icon

Cured of his prostate problem, now suffering from narcolepsy.

Wish him good health.

To have health is to have everything.
20/07/2019 3:13 PM
3iii >>>


Icon8888 posted

I like margin of safety

But margin of safety based on earning, not margin of safety based on asset play

>>>{



My post on the 2 factories and See's candy support the post of icon above.

Buying a great company at fair price and keeping for the long term, provides also a big margin of safety.
20/07/2019 3:32 PM
stockraider Warren Buffet already tell many sochai including 3iii & Philip, if u cannot stomach share mkt movement on your stock of more than 50%, u better don invest mah...!!

Investment in insas with huge margin of safety is to protect the stock normal negative fluctuation severe range Mah...!!

Usually margin of safety investment are contraian investment, u buy only when most investor not willing to buy mah...!!

If everyone are happy & want to chase like YINSON, Nestle & QL, u get an overvalue stock in which value investors will avoid loh...!!

Like Ben Graham say Mr Market sochai likes of Philip & 3iii will chase overvalue stock like Nestle & QL....it is for value investors sell to them loh....!!

Insas when it is deep undervaluation with PE less than 10x and NTA nore than Rm 2.50, u should buy mah....!!

It is that simple in investment buy when they is deep margin of safety...no need to be so complicated and trying to see or speculate next qtr profit higher or not loh ??

Posted by 3iii > Jul 20, 2019 2:45 PM | Report Abuse

>>>>

Posted by stockraider > Jul 20, 2019 2:27 PM | Report Abuse

Recent Calvin pick on asb is another superb value strategy mah...!!

value is unlocking for this stock mah....!!
>>>>
With so many recommendations in his list which is owned forever, a few shine at different occasions. Do you know within a 1 year period, it is not uncommon to see a stock price rising 50% and falling its equivalent 1/3rd.

'''''''''''''''''''''

ONLY SOCHAI LIKE 3iii WILL SAYS THAT CALVIN ASB EXAMPLE IS BAD PROBLEM TO HAVE LOH...!!

IF MONIES FLOW INTO YOUR POCKET LIKE ASB. U SHOULD WELCOME IT & BE HAPPY LOH...!!
3iii IS A REAL SOCHAI, WITH NO BUSINESS SENSE LOH....!!
20/07/2019 3:58 PM
stockraider INVESTORS OF INSAS SHOULD BE HIGHLY CONFIDENT OF INSAS POTENTIAL TO MAKE GOOD MONIES LOH....!!

THE ONLY ISSUE THEY SHOULD FEAR, IS HOW LONG I NEED TO WAIT ONLY MAH...!!

THIS IS BCOS, THE HUGE MARGIN OF SAFETY THE TRUE VALUE & QUALITY ASSETS IS CONFIRMED & BEYOND ANY DOUBT LOH....!!
20/07/2019 4:33 PM
stockraider Take care of the downside, let the upside takes care of itself.

What we are afraid of is if the value takes a long time to unlock, value may erode, such as in a business with persistence huge losses, burning cash in its operations, or management embarking on overvalued acquisitions, or squander away the cash it has, failed business ventures, or other shareholder value destroying activities. I my opinion, Insas does not belong to this category. Having different stocks with different return drivers in a diversified portfolio is also a smart strategy in investing.

Posted by stockraider > Jul 20, 2019 4:31 PM | Report Abuse X

INVESTORS OF INSAS SHOULD BE HIGHLY CONFIDENT OF INSAS POTENTIAL TO MAKE GOOD MONIES LOH....!!

THE ONLY ISSUE THEY SHOULD FEAR, IS HOW LONG I NEED TO WAIT ONLY MAH...!!

THIS IS BCOS, THE HUGE MARGIN OF SAFETY THE TRUE VALUE & QUALITY ASSETS IS BEYOND ANY DOUBT LOH....!!
20/07/2019 4:36 PM
lazycat mr loh and 3iii , u 2 are idiots , pls stfu
22/07/2019 7:55 PM
stockraider Investment in insas call for a very successful investment tech, that very alien to Philip & 3iii loh....!!

AS RAIDER SAYS THERE ARE MANY WAYS TO SKIN A CAT LOH...!!

INSAS IS NOT SPECULATING THE FUTURE, IT IS LOOKING AT PRESENT VALUE OF INSAS EXCEEDING RM 3.00 V SHARE PRICE RM 0.80, THERE IS HUGE MARGIN OF SAFETY AND IT IS RUN BY A COMPETENT OWNER LOH...!!

ON THE OTHERHAND IF U INVEST IN NESTLE & Ql U NEED SPECULATE THAT FUTURE GROWTH OF YOUR STOCK WILL EVENTUALLY CATCH UP WITH THE YOUR PRESENT OVERVALUE STOCK PRICE OF MORE THAN PE 50X LOH...!!

THE FALLACIES OF THIS APPROACH IS THE COMPANY CAN GROW & GROW, OVER MANY YEARS LEH, WHAT HAPPEN SALES & PROFIT FALTER ??

WHERE IS YOUR MARGIN OF SAFETY LEH ?? FOR INSAS, ON OTHER HAND, U CAN SEE IT ALREADY HUGE MARGIN OF SAFETY, WHEN U BUY THE SHARE MAH...!!

(S=QR) Philip Raider, you realize the more you as info about INSAS, the worse the company sounds right? You are trying too hard to convince and win every argument.

1. You concept here is basically saying that INSAS management care more about themselves than the shareholders of the company. This might be a valid reason why no one wants to buy INSAS shares. When shareholders can see that the company has money ( no idea why in Australia) but chooses to give poor earnings for every dollar of RETAINED earnings, they should give it back to the shareholders. Hoarding cash, investing in cash burning startups, not giving returns to shareholders via dividends and share buybacks is a quick method to destroy confidence in the company.

I totally agree.

2. If 5 years from now, INSAS is only making 60-80 million, from a net asset economic business value of 1.7 billion, on such a risky business model as lending, stockbroker, private equity, startups then I think I have better things in life to do.

Raider has no ability to understand risk versus returns.

That is why he thinks INSAS is better than Berkshire.
23/07/2019 1:39 AM


 

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