kcchongnz blog
Making money from stock market is so easy? kcchongnz
"Investing is not supposed to be easy, anyone who finds it easy is stupid." Charlie Munger
I have written an article just yesterday with some interesting observations; that some stock market participants continue arguing that using the core principles and methodologies of investing propagated by some established super investors at home and abroad are just theoretical, and of no use in real investing.
http://klse.i3investor.com/blogs/kcchongnz/88763.jsp
They think that making money from the stock market is so easy, no need to have any fundamental knowledge of the business, but just base on some simple rule of thumbs will be able to make big money. Even “dunno” anything also can make big money!
I thought I have given clear explanation that those core principles and methodologies are simple enough to be understood by most people, especially those who dabble in the stock market. Apparently, I was wrong again.
Posted by koonbee9 > Dec 28, 2015 08:28 PM | Report Abuse 
after read 2 times i still dunno la sifu kcchongz
But sorry, I can’t help you if you still “dunno”. Please don’t call me sifu. And you are entitled to have your own opinion that those things are “theories”, “bookworm”, “cannot work”, “jargon”, “bullshit”, “useless” or whatever.
Posted by leno > Dec 29, 2015 11:26 AM | Report Abuse
HAHAHAHAHAH ... HAHAHAHAH ... newbies quarelling with each other about useless things ... HAHAHAHAHAH ... but hey ! It is a learning process. At the end ... u may learn something .... "that somethng could be more harmful than before u learn that something" ~ quoted by leno the most panlai .... HAHAHAHAHAH .... scary but truthful right ?
But what exactly why are they useless may I ask?
I don’t see them useless. In fact, I find them extremely useful. Please read the following link then you will know why.
http://klse.i3investor.com/blogs/kcchongnz/88504.jsp
Those are established records set up a few years ago in a public forum in i3investor which you can check if you wish.
Why not show us your “useful” things with established records too?
Newbies? Which newbie you are talking about? In my opinion, the following commentator in my previous thread knows a lot than many here with his highly knowledgeable and constructive comments,
Posted by Desa20201956 > Dec 28, 2015 09:30 PM | Report Abuse
“Ratios hardly help in this respect.....but insider information and deep understanding of the company and its environment will do the trick.
But the best buys are those companies with a good business model, good management and good figures. and you can buy it at a decent price....or in the words of KYY, profits increasing Q by Q and still below PE 10.”
I just extract out a couple of his comments which differ from my opinion and trying to rebut his assertion that what I use is inferior to his simple “golden rule”.
First thing the statement “ratios hardly help”. Isn’t a PE ratio a ratio?
You mentioned about a PE 10. A historical PE ratio, or a forward PE ratio, an expected ratio or a trailing ratio, a normalized PE ratio?
There is hell of doubts about this PE ratio in my opinion as I have expressed here:
http://klse.i3investor.com/blogs/kcchongnz/63417.jsp
Isn’t Q-Q profit increase a ratio? I guess you may not care whether it is 5%, or 10% increase, it is a Q-Q increase.
But what do you think a company earns 10% net profit and retains the earnings and earns another 10% the following year just due to the retained earnings? Is it great?
What if the company borrows RM1b and make RM10m, or 1%, the following year and increases its EPS by say 10% from the previous year? Is that great? Should the share price jump?
A good company sells its products very well during the Hari Raya season, but drop in sales the next quarter, and hence its profit. Dump the shares when the quarterly result bad?
A company earns RM50 m a year for the last few years but spend RM60m in plant and machinery consistently every year great?
A company making RM50m a year but debtors can’t pay or persistently delay payment until company has to find cash to fund its operations every year that great?
You are an accountant and I am sure you know what I am talking about.
When announced quarterly result share price always goes up, really? What is the research evidence? We do have evidences showing otherwise as share price generally has gone up before the announcement as many insiders, their friends have already known it before.
Well I don’t deny that the share price will go up after announcing increased profit, especially someone keeps buying a small cap stock. But that doesn’t mean he is right, especially in the long-term, does it?
“Insider information does the trick”?
Do you know it is illegal to trade with insider information?
Even that, does it always do the “trick”?
Someone did know the boss, the good management, of a construction company very well that he could just pick up the phone to call him to ask for insider information. But after acquiring millions of the shares with all these insider information, the share price still tanked.
Someone who has a close relative working as the auditor for a listed company, visited the factories in China. The share price tanked terribly with all this insider information.
Someone knows the boss of a plantation company so well that he and his friends and relative were invited to tour its plantations all over the country by helicopter. Did that insider information do the trick?
“Ratios hardly help in this respect”
The above may be is just your experience, not mine. My experience is shown here. They are published records, not just bullshit.
http://klse.i3investor.com/blogs/kcchongnz/88504.jsp
Those stocks mentioned were mostly selected based on ratios; ROIC, Earnings yields, Cash yields, etc., although they were augmented with absolute valuations.
The portfolio in the link below were assessed using some principles of ColdEye, all using ratio such as PE ratio, P/Book, P/Cash flows, Price/FCF, Dividend yield. Yes all ratios.
http://klse.i3investor.com/blogs/kcchongnz/88651.jsp
So you still think that basing on growth in EPS is still superior to the investing principles of Joel Greenblatt, Warren Buffett, Seth Klarman etc., without even bother if the price is expensive?
Well, I guess it is a matter of opinion and I respect your opinion. In fact, as I have said, you do know a lot. Likewise, I wish you respect my opinion, and not call me stupid, bullshit etc.
K C Chong
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Discussions
4 people like this. Showing 50 of 99 comments
There is no one method to skin a cat. There are many roads to China. Therefore, there are many strategies employed profitably in investing.
2015-12-30 11:05
It is kind of KCChong to share his knowledge and educating many who follow him.
2015-12-30 11:05
Posted by rosetan > Dec 30, 2015 09:34 AM | Report Abuse
kcchong, i would rather that you just share the facts and leave emotion out. It mars your professionalism.
Rose,
Thanks for your comment. But is there any emotion about my article? Isn't it healthy to discuss about the merits and shortcomings of various philosophies, methodologies, strategies about investing which the article is about, instead of talking about who is rich or poor, and who is stupid or clever, good or bad?
2015-12-30 11:12
I have not used his strategy in creating my portfolio. However, you do acquire a lot of good principles of value investing reading through Joel Greenblatt's book. It was nice to see KCChong creating portfolios based on this magic formula of Joel Greenblatt, prospectively, and showing that he has profited handsomely over the last 2 or 3 years. Thanks for sharing generously, KC.
2015-12-30 11:14
Hi Kc Chong
May i know your oppinion of Bjcorp as it has a pe of only 1.78?
It would really really help many investors if you could provide some insights.
Thanks
2015-12-30 11:37
Mr Chong, just ignore the noise and continue writing and educating people. Hope to see more "new" materials from you.
2015-12-30 11:56
skyz, I would say the same to KYY. Ideally i3 is a platform to share knowledge and experiences so that all may benefit in one way or another. There are all sorts of opinions. We take what suits us and leave aside what we do not agree. There is no need to be emotional. That's my 2 cents' worth.
2015-12-30 11:58
Posted by alivetoinvest > Dec 30, 2015 11:37 AM | Report Abuse
Hi Kc Chong
May i know your oppinion of Bjcorp as it has a pe of only 1.78?
It would really really help many investors if you could provide some insights.
Thanks
Don't know much about Bjcorp. I normally go far far away from this type of stock; huge assets and huge debts, multi and complicated business, questionable management and major shareholders, opaque, all kinds of related party transactions etc.
I have been questioning the E in the PE ratio. A glance at its financial statement shows one-time off item makes up its major "profit", hence the poor operation cash flow.
One may be tempted to invest based on its seemingly high NTA. Alas, most of its assets is made up of "intangible".
2015-12-30 12:13
Kc, you are wrong on Bjcorp!
It is holding company of all its clans. So it should be applied 25% discount for holding company?
But then its assets is really good and undervalued deeply.
NTA 1.60, now mkt price RM0.38.
Doesn't this apply as graham undervalued stocks? Using strictly VALUE Investing, this is a hell of a buy for Graham, just like KUCHAI, PRKCorp, FACBIND, etc.
YOu can judge a stock using your perception tht VT is a questionalble mgt. This is not how GRAHAM teach us.
2015-12-30 13:23
Thank you Kc Chong. Really appreciate the detailed comment
Now i have a better understanding on its weak performance
Have a happy new year!
Cheers
2015-12-30 13:35
Berjaya Corp
Valuation Ratios (Adjusted)
Price Earnings Ratio (PER) - 1.78
Price/NAV - 0.2196
Price/NTA - 1.9751
Price/Revenue - 0.160
Price/Operating Cash Flow - 57.135
2015-12-30 13:36
Posted by paperplane2016 > Dec 30, 2015 01:23 PM | Report Abuse
Kc, you are wrong on Bjcorp!
It is holding company of all its clans. So it should be applied 25% discount for holding company?
But then its assets is really good and undervalued deeply.
NTA 1.60, now mkt price RM0.38.
Doesn't this apply as graham undervalued stocks? Using strictly VALUE Investing, this is a hell of a buy for Graham, just like KUCHAI, PRKCorp, FACBIND, etc.
YOu can judge a stock using your perception tht VT is a questionalble mgt. This is not how GRAHAM teach us.
paperplane, ys you are right, I may be wrong about BJCorp as I have said, I don't know about it, but I don't want to invest in it for the reasons given by me. Hence I didn't spend time on it.
But bear in mind of a couple of comments
1) What is the normalized earnings you get to obtain the PE ratio? A one-time gain in asset disposal must be excluded.
2) Its net asset backing per share may be high, but you need to check its net tangible asset backing per share if you want to look at asset to invest.
2015-12-30 14:19
BJCorp is a dinasour that will underperform for the next 5 years at least, period
From the bottom of my heart, not trying to bad mouth
2015-12-30 14:27
Posted by Desa20201956 > Dec 29, 2015 10:18 PM | Report Abuse
love that...better than a ratio
<Soros, do u know just now at 4pm++ when sifu said he "planning to gonin" BHS...immediately BHS share price shoot from 0.51 to 0.53...after 10 minutes he said the planning called off, the price immediately drop back to 0.51...our sifu really super keng>
I wish to withdraw my statement below in the article. It was a wrong judgment of mine.
[Newbies? Which newbie you are talking about? In my opinion, the following commentator in my previous thread knows a lot than many here with his highly knowledgeable and constructive comments,
Posted by Desa20201956 > Dec 28, 2015 09:30 PM | Report Abuse
“Ratios hardly help in this respect.....but insider information and deep understanding of the company and its environment will do the trick.
But the best buys are those companies with a good business model, good management and good figures. and you can buy it at a decent price....or in the words of KYY, profits increasing Q by Q and still below PE 10.”]
2015-12-31 05:00
Posted by leno > Dec 29, 2015 09:49 PM | Report Abuse
hahahah ... kcc is learning ... kcc wan to learn mar ... must let him learn ... right lesson wrong lesson is still learning something mar ... u so clever why u no become rich leh ...
What kind of "panlai" statement is above?
2015-12-31 05:03
Posted by Newbhere > Dec 30, 2015 11:56 AM | Report Abuse
Mr Chong, just ignore the noise and continue writing and educating people. Hope to see more "new" materials from you.
Hi Newbhere, thanks for your comment. I remember you. Good that you are no more "annoyed" by my straight-to-the-point, "you-believe-as-sacastic" comments. I mean no malice.
When I write an article, I like when people read, and comment, whether it is for or against. We deliberate, argue about subject, not name calling and personal attack. If you are sarcastic, I can be too,but I just take it as some fun. I just don't take this personally. It is better than to get angry about it. It is just that sometimes our human nature, it is hard to control anger such as when people call you "stupid", "bullshit" etc. without basis.
So please comment, even it is against what I write. I will still appreciate.
"New" Material?
In fundamental investing, it is evergreen, in my opinion; buying good stuff at reasonable or better still cheap price, or buying mediocre stuff at cheap price. Good fundamental investing follow a few core principles as I have been writing about. If you read some of those investment books, they talk about the same principles and methodologies over and over again.
Sound boring? That is sound investment, in my opinion.
May be you refer to "new" as new stocks recommendation?
Sorry, I have no tips.
2015-12-31 05:31
Dear Respected Mr. Kc Chong.
Hope 2015 A wonderful year for you.
Renewal Of Friendship Contract 2016 After Serious And Cautious Consideration, Your Contract Has Been Renewed For The Year 2016. So, try to be more LOVING and CARING next year.
Take care of Me and Miss me. Because, It’s Impossible To Find A Friend Who is 95% Ideal 96% Smart 97% Kind 98% True 99% TALENTED and 100% Lovable So, Don’t lose Whom U Never Want To Lose. Wish YOU and FAMILY a Very Happy New Year! (hahahahahah....just for laugh)
Wishing you 12 Months of success, 52 weeks of laughter, 365 days of fun, 8760 hours of joy, 525600 minutes of good luck and 31536000 seconds of happiness
Warmest Regards,
duit
2015-12-31 13:30
Posted by necro > Dec 30, 2015 06:20 PM | Report Abuse
Kcchong mind share your opinion on Ayam Tua favorite counter
NTPM
necro,
NTPM is a good company. It is listed in my first portfolio posted in i3investor in January 2013.
You just have to check if its price is right. One way to do it is to try to do some simple valuation based on my article here:
http://klse.i3investor.com/blogs/kcchongnz/67260.jsp
2015-12-31 14:01
KCChongnz, can you help us there to understand what is Sharpe ratio? And how to calculate it in simply way? I want to understand more on this area. High return, not necessary a good high risk reward return.
This will help differentiate a good fund mgr, and a bad one according to risk taken.
Thanks
2015-12-31 14:05
Google lah bro... Don't everyting ask KC spoon feed u....
After he spoon feed u, have u ever thank him ?
No....all you do is badmouthed him...
Everything I said is correct, is it not ?
2015-12-31 14:09
please make sensible comments Icon, I have never badmouthed KCChongnz.
He is the best person to educate ppl in forum on this.
2015-12-31 14:13
Never bad mouthed him ? U said he only good in theory
I don't need to prove it, KC remember it in his heart
He talk soft soft, but he remember you and your bad stabbing tactics
2015-12-31 14:17
sharpe ratio is easy moozy onli ... for eg. PMCOrp NA 52 sen ... share price 26 sen , sharpe ratio is 52:26 = 2 ... anything above 1 is good ... anything is 2 is excellent. Excellent mean High Untung, zero risk.
2015-12-31 14:17
happi new year to Icon too ... wish u all the best ... and BOH CHOOOOW CCCCCCCCCCC AAAAAAAAAAAAAAAAAA !!!
2015-12-31 14:19
see ? Stoopeeed plane, now KC upset already
Why u so bad ?
Sharpe ratio ? KC will give you the Finger ratio
2015-12-31 14:23
sharpe ration part II : now imagine PMCorp give out 8 sen special dividend ... NA will become 52-8 = 44, and share price adjust to 26-8 = 18, the Sharpe ratio now become 44:18 = 2.4 !! Which is MORE THAN EXCELLENTE !! To adjust back to Sharpe ratio 2, the market will price back PMCorp to 22 sen = another 4 sen gain or 22% extra upside ! FUYOH ! WASEH ! Cipet beli aaaaaaAAAAAHH ! Sure UNTUNG, zero risk !! Hope this example has enlightened everi one regarding sharpe ratio ... sekian, tima kacih.
2015-12-31 14:29
Posted by Icon8888 > Dec 31, 2015 02:17 PM | Report Abuse
Never bad mouthed him ? U said he only good in theory
I don't need to prove it, KC remember it in his heart
He talk soft soft, but he remember you and your bad stabbing tactics
--------------------------------------
I said he is good in theory, not just only good in theory, pls don't twist the words like a snake. Final decision is yours
2015-12-31 15:55
u no brush teeth ... tat's why everi thing come out also smell bad ... tsk tsk tsk ... BOH CHOOOOOW CCCCCCCCCCCCC AAAAAAAAAAAAAAAAAAAAA !!!
2015-12-31 16:32
Posted by paperplane2016 > Dec 31, 2015 02:05 PM | Report Abuse
KCChongnz, can you help us there to understand what is Sharpe ratio? And how to calculate it in simply way? I want to understand more on this area. High return, not necessary a good high risk reward return.
This will help differentiate a good fund mgr, and a bad one according to risk taken.
Thanks
Posted by leno > Dec 31, 2015 02:17 PM | Report Abuse
sharpe ratio is easy moozy onli ... for eg. PMCOrp NA 52 sen ... share price 26 sen , sharpe ratio is 52:26 = 2 ... anything above 1 is good ... anything is 2 is excellent. Excellent mean High Untung, zero risk.
Everyday learn new thing!
paperplane, icon8888 is right. There are huge amount of resources in the net regarding this apa ini Sharpe Ratio.
I am actually quite good at this apa ini Sharpe Ratio, Treynor ratio, Jensen alpha and whatnot.
But my opinion is don't bother about these ratios. They are blunt, not sharp.
It is much better to learn ebit enterprise ratio, cash ratio, ROE, ROIC and other ratios.
2015-12-31 17:16
The difference between a wise man and a fool is that a wise man knows what is important, what is not
A fool doesn't
2015-12-31 17:20
Posted by paperplane2016 > Dec 31, 2015 03:55 PM | Report Abuse
I said he is good in theory, not just only good in theory, pls don't twist the words like a snake. Final decision is yours
hahahahahaha,3BILLION FUND MANAGER said:" pls don't twist the words like a snake." YOU are the one who always twist the words like a snake! always go other counters ka ka cau cau.
2015-12-31 17:25
Happi new year to all leno fansi ... KCChong fansi automatic become leno fansi .. because kcchong is also leno fansi ... HAHAHAHAHAHAH .... being your favourite idol ... leno like to declare 2016 theme will be "Let's be happi happi ... dun lah be angri angri ... YAAMMMMMMM SINGGGGGGGGGGGGGGGGGGGGGGGGG !!"
2015-12-31 19:50
happi new year to KCC ... and leno have self-promoted to be KCC marketing manager ... YAAAAAAAAAM SINGGGGGGGGGGGGGGGGGG !!! HAHAHAHAHAHAHA ... everi one else, dun jeles-jeles hor ......
2015-12-31 21:19
we have so many big companies in Malaysia that have big cash pile but they also borrow big monies......nobody do business without bank loans......either you don't know how to do business or you can't borrow.........
http://klse.i3investor.com/blogs/ddsqwdwc/88943.jsp
2016-01-01 04:25
So if read KC Chong blogs who is anti bank borrowing meaning he can't borrow type?
Posted by donfollowblindly > Jan 1, 2016 04:25 AM | Report Abuse X
we have so many big companies in Malaysia that have big cash pile but they also borrow big monies......nobody do business without bank loans......either you don't know how to do business or you can't borrow.........
http://klse.i3investor.com/blogs/ddsqwdwc/88943.jsp
2016-01-01 04:30
What is your point here? I_like_dividend,donfollowblindly, or not-truthseeker679 or some other funny names
Posted by donfollowblindly > Jan 1, 2016 04:30 AM | Report Abuse
So if read KC Chong blogs who is anti bank borrowing meaning he can't borrow type?
Posted by donfollowblindly > Jan 1, 2016 04:25 AM | Report Abuse X
we have so many big companies in Malaysia that have big cash pile but they also borrow big monies......nobody do business without bank loans......either you don't know how to do business or you can't borrow.........
2016-01-01 06:43
no lar ... it is not that we are anti-bank borrowing ... but as a certain type of investors, we prefer company with less borrowing. We call it "margin of safety" mar. If certain unpredictable unfortunate thing happen, usually it is the company with "a lot of cash, minimal borrowing" will survive. Rule no. 1 .. is dun lose money (when un-predictable unfortunate time happen) mar. Therefore making money come second lor. That to say, nothing wrong if certain people prefer to invest in "little cash + a lot borrowing" or another group which invest in "a lot of cash + a lot of borrowing." These group can make money too if they enter at correct price and correct time. No doubt. It is just a preference and policy of masing-masing. Group one have certain belief and it is justifiable belief. Group 2 also can make money, but it need more tarraly type of work. As leno has mention many times ... nothing wrong with each group. But matters become weird when different group members cannot IGNORE other group club posting or principles. It is like going to mosque and getting angry because u are chrismas fellow, and vise versa. HAHAHAH ... u see leno go into what ever club also sound veli veli panlai one. Why ? Because leno is veli veli panlai mar .... AHAHAHAHAHAHAH !
2016-01-01 10:27
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
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Don't get emotional old man
2015-12-30 10:21