Choivo Capital

(CHOIVO CAPITAL) A Conversation With I3's Most Famous Quarter Prediction Article Writer

Choivo Capital
Publish date: Sun, 13 Jan 2019, 02:51 AM

For a copy with better formatting, go here.

A Conversation With I3's Most Famous Quarter Prediction Article Writer





2 weeks ago, while meeting with an investor of mine, I had the opportunity to meet one of the most (if not the most) famous quarter prediction article writer in I3. We spent roughly 1-2 hours discussing as a group. We touched on a few topics, but I don’t think they are worth talking about.

For this article, I will focus on the parts of our conversation relating to his article writing, the Malaysian markets, as the discussion was from a group, I will be paraphrasing our conversation very heavily.

However, I believe the essence to be accurate. However, the flow of the edited conversation will be quite awkward, as we did not spend time talking from front to back, unlike my discussions with Calvin, OTB, KC or 500% Trader.

I will not be identifying the person in this case, as I don’t think what I write will be flattering. I’m a firm believer in the “Praise by name, criticize by category maxim”

Having said this, this famous quarter predictor writer, wrote articles on various companies, however, his most famous is his Hengyuan and Masteel articles.

To be short, my articles

The art of being a quarter predictor

The unique characteristics of the malaysian equities market

Were unfortunately relatively accurate.

The conversation is not as combative as it would sound below, as we are relatively good at being polite and frank to each other, but when edited to the essence, it will seem so.



The Conversation

Choivo Capital: Hello, it’s nice to finally meet you. You seem to a little silent these days, I rarely see any post from you in 2018. Why is this?


Famous Quarter Prediction Article Writer (“FQPAW”): Well in bear markets, nobody will have the mood to buy. Even if you have good news, the price of the stock barely moves and may even drop. I’ve written quite a few articles, but I didn’t post them for this reason.


Choivo Capital: Ok that makes sense. I have to say, whenever I read your articles, it always felt a little like a pump and dump article. Albeit one done up to a very high standard. They are usually very detailed, with the facts, figures and assumptions.

However, they always seemed to be very biased and unbalanced. I won’t say it’s a bonescythe article, that one is a pure pump and dump article with little actual facts.

But yours seem to be cherry picking of the facts to suit the narrative you want to drive, which is essentially, “Earning go up over short term, this is the TP, go buy”


FQPAW: Well. First of all the facts and assumptions stated in my article are either public knowledge, and back by news articles or the annual report, or the various commodity trackers etc. This is where I am different from bonesycthe.


Choivo Capital: True, however, you must admit they are very biased. Like for example in your Heng Yuan articles, the way you write about the crack spread is as if, this incredible thickness will stay forever. You seem to ignore natural feed backs, ie: When cracks spread is fat, supply will go up via maintenance delay driving it down. Vice Versa.

You made a TP of RM14.3 and above based one off extraordinary events, as if this will continue forever.

Yes, your data is based on available figures or articles. But this is the internet, for every position you take, you can find another article out there arguing for and against. They were articles on “Seeking Alpha” on analysing American refiners, that this will not last forever.


FQPAW: To say it is biased is not that accurate. Because I do add in a few lines describing the risks etc.

The reason why it’s not balanced, is because if you were to write a balanced one, that considers all the perspective, you will just confuse people. They won’t know what to do.

I want people to know very clearly what they need to do, which is to buy and push up the price.


Choivo Capital: Makes sense. So, my guess is that the few lines give an appearance of balance, but by making it short and not quantifying or emphasizing the impact, it almost disappears in the article, especially since the Target Price etc is in bold at the bottom.


FQPAW: Correct. To be honest, most people probably don’t even read the analysis. They just go down straight to the bottom for the TP.


Choivo Capital: Well, if im honest, neither do I. I usually speed read it, because they almost always have zero bearing on the real economic power of the business.

And even if it’s the short term results you’re predicting, even a relatively simple business, like refineries have so many moving parts and hidden complexity, that your analysis ends up precisely wrong. I prefer being roughly correct.

Did you think RM14.3 or whatever to be the fair value of the company, do you think it reflects the real economic power of the business?


FQPAW: Well, yeah, it’s hard to get the figures right, you just know roughly. I thought RM14.3 was the fair value at that point in time. There has since be changes in the crack spread, and therefore the fair value now is much lower. It’s a cyclical business after all.


Choivo Capital: I mean the real economic power of the business. The earnings of each business can be split into two components. The first is the real economic power of the business. This encompasses, the quality of the management, the actual economics of the business, the moats it has etc.

The second, is one off temporary changes in the various external factors, which if normalized over the long term, should be close to zero.

For you to say that the fair value of Heng Yuan is RM14.3 when crack spread is thin, but much lower when crack spread is thin.

Its like a father saying calling his son a genius when he gets 100 marks in the exam because he saw the friends answer, but when he fails the exam because he had a fever at the time, the father then calls him a failure in life and wishes he had never been born.

No one or any father will do this unless they’re crazy or have mental illness. You will know the kind of person your son really is and what he's really capable off, regardless of short term results.

What do you think is the real economic power of the business? How much do you think the real economic power is worth?


FQPAW: Well, most businesses in Malaysia is cyclical. You need to buy at bottom of the cycle and sell at the top to make money.


Choivo Capital: I digress. Almost all business is cyclical. Even nestle sales drop in recession. They’re economic power just happen to be very strong.

For cyclical business, you just need to buy it when its selling far below its real economic power, ie when its cold and dead, and sell it when its selling for far above its real economic power. Ie when everyone wants it.

*We then went on to talk about cyclical business that are cold and dead now, but I don’t think there is any interesting insight there*

How was Heng Yuan for you, how much did you sell it at. Can you tell me what is your returns this year?

Can you tell me your modus operandi? When you write these articles, who do you intend to attract?


FQPAW: Well, I sold all the way down from the top. The last batch was sold at RM9.9. In 2017, I made a lot of money from Heng Yuan. In 2018, I’m down 8%, I was actually gaining this year, but I got burned by Masteel etc.

To be honest, it’s not so much the average retailers I’m trying to attract. Those people are too small. I’m looking to get the big fish interested. Like Koon Yew Yin, Ooi Teik Bee, Icon8888 and the other big buyers in the market. KLSE market is very thin after all.

And then you want the retailers who chase high as these big fish buy, and the fund managers who want to ride this wave and make money from the retailers and if possible the big fish as well.

If Ooi Teik Bee recommends it to his followers, and people like Koon Yew Yin etc buy, you really hit the jackpot. Everyone will follow.


Choivo Capital: You’re not wrong on that observation, I wrote a little on it in an article.

For most pump and dumpers, which you are, just a very sophisticated one, they will always come a time, when their word and articles mean nothing. Because the fact they are trying to make money from the readers in a somewhat dishonest manner becomes too widely known.

When do you think this will happen to you?

And what do you think of your picks which have fallen by 70-80% from peak to trough?


FQPAW: Well, I don’t know. I think my articles have enough facts in them, that they are not false. It’s up to you to buy or sell, I’m not responsible for you. You get to keep your profit, so you should keep your loss.

It’s not just my picks that have fallen, but most of the market. At least 300 companies is down 50% or around there.


Choivo Capital: Correct. But most of them have little retail participation. Tasek fell from RM12.2 to RM4, but no one is really making noise, because the retail investor is not there.

Yours happen to be the ones with the highest volume and retail participants.


FQPAW: Well, as you are aware, the KLSE market is very immature and unsophisticated. Especially when compared to Hong Kong, US etc.

For us traders, and those who do what we do, we need the constant flow of new water fish that comes in every time we are in a bull market.

All of us here was at one point a water fish, who got chopped properly by the sharks by not selling in time etc.

We just learned from it, and now become the sharks and make that money from the new people. It is a zero sum game after all. To make money, you need to take it from someone else.


Choivo Capital: Well I digress, stock valuations and dividends should grow in tandem with the economy, which is how most investors make money. But I don’t want to talk about this. You are more than aware of my views.


We went on further here on other things like the audit perspective when it comes to the figures in the financial statements, if the financial statements can be trusted. The difference between the accounting representation of the figures versus the economic reality  But i dont think i'll be writing them here




The one thing I want to stress at the end of this article, is that I don’t consider myself more moral than him.

At the end of the day, it all boils down to incentives. Fuck up your incentives, and you can get good people to do despicable things.

In the US, directors used to give themselves ESOS like crazy without expensing them in the profit or loss. Therefore essentially robbing the shareholders blind in broad daylight, and trying to hide it. And these directors, if not for this, would be considered models of society. They donate to charity and you would want your children to marry them.

If I ever wrote a goreng article at the start of my investing career.

If I had not known Warren Buffet, Charlie Munger, Peter Lynch, Seth Klarman, Howard Marks etc so deeply.

I can see myself being one of the best quarter predicting article writers (ie pump and dumpers) in i3. And probably quite a bit richer.

However, for all our actions, we always pay one way or another. You get cynical of the markets, thinking it’s only the dishonest and manipulative people who make money, and you miss out on the wonderful companies available for sale.

And most of all, if you spend this much amount of time thinking of how to manipulate people, I’m not sure what kind of life you will end up with.

Having said that, I’m also long term greedy. I have never heard of a pump and dumper, who ended his life a USD billionaire. And if they were, they usually ended up in jail at some point. Hahaha

There is no such thing as people sharing for your learning. Or to share the profit with you. Track the incentives! If you are not paying for it, you’re the product!

Having said that, as I’m an investor, it’s my preference that other people do not invest and instead participate in those games. Feel free to get on that merry go round and have fun! Leave the rest to me.


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1 person likes this. Showing 50 of 84 comments



2019-01-13 17:02

Ricky Yeo

there's no feeling to jaga since you haven't said anything substantial

2019-01-13 17:09


dont know why, whenever u say smtg my brain will immediately process the message as it came out from the mouth of jon.

you 2 belong to the same hood, bunch of theories but non of it is helping ppl to make money...

may i knw what is ur job? i can intro both of u to the best local u as their finance professor seriously.

as i knw even part time lecturer could make as high as RM300 per hour

2019-01-13 18:12

Ricky Yeo

dont know why, whenever you say something, everything gets filter out because none is substantial

2019-01-13 18:19


i have a better job for baby jon, have u heard of anakku? call them, bcz i knw that they invest heavily in their R&D trying to come out with the BEST pacifier in the town, so maybe Jon can be their lab mouse. Whenever Jon stop crying, that means they found their formula for the BEST pacifier in the town.

2019-01-13 18:21


Haha connie555 love your sarcasm.

2019-01-13 18:57


there are just big hitters and small hitters.

big hitters have almost unshakable beliefs

small hitters value here value there

worry here worry there.

2019-01-13 19:37


Jesus guys. I mean Jon Choivo and Ricky is daft with their academic theory. But no need to insult them lah. Argue facts with facts. Thats the gentlemanly way. Dont scare away the young boys. They are contributing useful knowledge. Instead, we should get rid of CP Teh which contributes zero to the community.

2019-01-13 20:23


Big hitters keep thing simple, some times too simple

King of small hitters is calvin...5% invested in stock market spread over 30 counters ( at one time 150 counters). Market up or down no effect on them.

2019-01-13 20:31


Show so!w result to see! Don't always talk cock

2019-01-13 22:39


Connie555 on a roll

2019-01-13 22:48


Post removed.Why?

2019-01-13 23:00


Post removed.Why?

2019-01-13 23:06


Post removed.Why?

2019-01-13 23:36


Pharisee teach good doctrines you can follow and do. Because they sat in Moses seat

Problem with them hypocrites is they say the truth but practice evil.

So this dam able i3lurker quote scripture no use if your heart not right with God

2019-01-13 23:41


Calvin you talk so much for what?When is your bjcorp going to turn into berkshire hathaway of malaysia?Hahaha dumb ass.

2019-01-14 00:12


Calvin must be a person with good heart and integrity, because he always talks about religion

2019-01-14 00:16


Somebody who opens mouth close mouth talk about religion, he must be a very good person

2019-01-14 00:17


Hmmm must be ....

2019-01-14 00:17


Posted by Icon8888 > Jan 14, 2019 12:16 AM | Report Abuse

Calvin must be a person with good heart and integrity, because he always talks about religion

No. You are wrong

Calvin is only a sinner saved by the Blood of Jesus.

2019-01-14 00:18


Ya , Calvin talks about the teaching of his religion, he must be a very good person

Hmmm must be ...

2019-01-14 00:20


true colors of Strongman showing!
100% hatred Zero % LOVE

2019-01-14 00:21


Are You Washed in the Blood?

Have you been to Jesus for the cleansing power?
Are you washed in the blood of the lamb?
Are you fully trusting in His grace this hour?
Are you washed in the blood of the lamb?

Are you washed in the blood
In the soul-cleansing blood of the lamb?
Are your garments spotless? Are they white as snow?
Are you washed in the blood of the lamb?

Lay aside the garments that are stained with sin
And be washed in the blood of the lamb
There's a…

2019-01-14 00:21


Even though he is a sinner, because he opens mouth close mouth talk religion, next time when he leaves this world he is guaranteed a place in heaven

2019-01-14 00:22

Ricky Kiat

very Agree......:)

2019-01-14 00:23


Posted by Icon8888 > Jan 14, 2019 12:22 AM | Report Abuse

Even though he is a sinner, because he opens mouth close mouth talk religion, next time when he leaves this world he is guaranteed a place in heaven


Talk religion. Doing charity or even good works won't bring a person to heaven

It is by grace through faith

see this carefully

2019-01-14 00:24


Yaya,just like one Hadi guaranteed to go to heaven.

2019-01-14 00:24


Oh ok... Calvin has faith so he is a good person and he goes heaven

I see...

2019-01-14 00:31


I must also start talking more about religion , because that will make me a better person


2019-01-14 00:45

Ricky Yeo

When someone refer something as 'academic theory', it is often because they don't have a clue what is being said. But of course, it is embarrassing to admit that. So just categories it as 'academic' to make it sound irrelevant to real life investing. It is easy to talk about the person's character than what is being said i.e theory, because as point out, he doesn't know what the theory is about! You can't expect a person who doesn't have a clue about a theory i.e probability, economic profit, return on capital to argue about those theories or concept. So the best route is argue about the person's character. It is an irony when a theory is called 'academic' not because it is irrelevant in real life (it is backed by empirical evidence and peer-reviewed articles), but because someone don't understand it. What is even more irony is calling someone daft about academic theory when he doesn't want to discuss his own pseudotheory i.e "A no growth company becomes a value trap"

Oh well, when an ignorant choose a closed-attitude and refuse to learn, everything is an academic.

2019-01-14 07:22


Ricky, wanna become lecturer just say it out loud, nobody gonna laugh at you, dont worry. Here take this, please contact her for job application. Aunty put money into your pocket, pls appreciate it.

Dr. Izlin Binti Ismail
Department Of Finance And Banking
Faculty Of Business And Accountancy Izlin Binti Ismail
Department Of Finance And Banking
Faculty Of Business And Accountancy

Aunty old liao, can't theory with u too wanna win i let u win, aunty came here just to make money not to boast around how strong your knowledge about now u win liao do u feel happy? happiness cant guarantee u a meal, so go and apply, remember put a remark there say connie aunty intro one, that will guarantee u extra meal allowance.

p/s: Aunty is fellow member of CFA, but aunty dont boast around, oi i got cfa what i say is right!!!! make money or not dont care!!!!!!! (that is my son (johhny choivo) and his partner in crime's attitude)


so i think he behave like this is not my fault, its his father fault.

2019-01-14 10:11



2019-01-14 10:24

Ricky Yeo

How ironic this came from the ignorant - 养不教,父之过. Charlatan.

Don't misunderstand aunty, I come here to make money too. But if you don't understand what I am saying, keep quiet please? If you have nothing better to say beside someone's character, then silence is really gold. Besides, haven't seen anything of value coming out from your mouth thus far.

2019-01-14 10:29


christians should go elsewhere to preach.

2019-01-14 10:30


there are muslims and Buddhist brothers here too.

2019-01-14 10:31


are all singaporeans like u, calvin?

2019-01-14 10:32

Ricky Yeo

Out of all diversion tactics, I must say academic professor is a pretty useful one. Red herring fallacy. But it is getting boring peddling that for far too long now. Started throwing chinese proverb pula.

2019-01-14 10:51


What an interesting comment from the community. Haha. The comment section is more interesting than the blog post itself. Nice.

2019-01-14 14:54


Aunty Connie scold son

2019-01-14 14:57


Singaporeans , a bit disappointing....I thought Singaporeans smart....My daughter say the team from Singapore U was last in the Regional inter varsity competition .....reality different from expectations....even Thailand and Vietnam and Indonesia beats them.

2019-01-14 15:06


Sporeans per capita income is 6x more than Malaysia. How come not smart

2019-01-14 16:12


calvin...u tell me..u so smart.

2019-01-14 16:13


in that case, i rather be neighbors with satan than with pastor calvin.

i dont want to be driven stupid by pastor calvin in eternity.


Posted by Icon8888 > Jan 14, 2019 12:22 AM | Report Abuse

Even though he is a sinner, because he opens mouth close mouth talk religion, next time when he leaves this world he is guaranteed a place in heaven

2019-01-14 19:08


at least choivo dont talk nonsense like calvin.

thats why u dont see so many negative comments on him.

u shld learn from choivo, pastor calvin.


Posted by qqq3 > Jan 14, 2019 04:13 PM | Report Abuse

calvin...u tell me..u so smart.

2019-01-14 19:09


Post removed.Why?

2019-01-14 19:09


I think the competition is about islamic history loh...!!

Posted by qqq3 > Jan 14, 2019 03:06 PM | Report Abuse

Singaporeans , a bit disappointing....I thought Singaporeans smart....My daughter say the team from Singapore U was last in the Regional inter varsity competition .....reality different from expectations....even Thailand and Vietnam and Indonesia beats them.

2019-01-14 19:35

qqq3 is ICEAW competition......Chartered Accountants....

2019-01-14 20:27


won by the team from Vietnam, Malaysia second, Singapore last.

2019-01-14 20:30


How can msia can lose to vietnam in ICAEW competition ??

Your daughter msian team must be very chehkai loh...!!

Posted by qqq3 > Jan 14, 2019 08:30 PM | Report Abuse

won by the team from Vietnam, Malaysia second, Singapore last.

2019-01-14 22:48

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