My Record of Long-term Return Investing in Bursa kcchongnz

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

Albert Einstein

http://klse.i3investor.com/blogs/kcchongnz/112706.jsp

In that article, I have shown that using the fundamental value investing (FVI) strategies, one the Cold Eye 5 Yardsticks, and the other, In Search of Excellence Investing in Good Companies, return 278.6% and 102% in the four years and three and a half years’ periods respectively, compared to average of about 7% for the broad KLSE market.

However, those two portfolios of stocks were not my own portfolios, but merely portfolios of stocks as commented by me as good investments at those times when forumers asked me about them, and then compiled by a third party. That was about four years ago. I still have to deal with the following comments and ridicules.

“It is most important for KC Chong to show proof because he is selling his programme on share investment. …..KC Chong’s sole purpose is to blow his trumpet and begging others to buy his product.” 

[Posted by shortinvestor77 > Dec 24, 2016 11:29 AM | Report Abuse

Blanked is right. All of them must tell us now how much in total money they made/lost in the markets and their ROC per year in average. Don't just teach the good knowledge (in theory), but show practical proofs.]

[Posted by Flintstones > Dec 2, 2016 12:05 PM | Report Abuse

Posted by paperplane2016 > Dec 2, 2016 12:03 PM | Report Abuse
hahahaha.,.,.,.,.,.,kc chong write fancy FA studies, but still fail to make money.
Reason: Tak ADA COMMON SENSE mah!!!!
hahahaaaaaaaaaaaaaaaa]

So, in here, for this second part of my showing documented proof of my own experience that FVI works, also in Bursa, and it works very well too.

For those who are new to FVI, it is an investment strategy of buying good companies at reasonable or cheap prices, or normal companies, or even lousy companies at cheap prices. I have shown many times that this strategy works very well in the developed countries in “The Super Investors of Graham and Doddville in one such link here:

http://klse.i3investor.com/blogs/kcchongnz/105247.jsp

And like before, I must clarify that in my context, showing proof that a certain investing strategy works is a proven, clear process of investing which is logical and plausible, and traceable with documented and published records showing returns of portfolio of stocks chosen in advance and compared with the outcomes, which anyone can check if he wishes to. Otherwise, it is pure speculating and here-say. And, the “return” should be in term of percentage return, rather than showing how much money one has now because we do not know how the money comes about.

My portfolio returns using fundamental value investing

I was active in i3investor four years ago. Tan Kian Wei, one of the major contributors in i3investor, asked me some time in January 2013 what were the stocks I was holding and I gave him a portfolio of 10 stocks I was holding then as shown in the link below.

http://klse.i3investor.com/servlets/pfs/13147.jsp

He compiled it and set up a portfolio to monitor the return of the stocks in the portfolio. This represent my first documented, and tracked portfolio of stocks in i3investor which everyone can check and verify even now. Tan KW termed this as “GE 13 Watch – kcchongnz” portfolio. At that time, there were only two portfolios put up, mine and that of Ooi Teik Bee. As you all probably know, OTB’s portfolio returned handsomely.

The stocks in my portfolio were not merely put in a documented portfolio. There were many analysis, valuations and discussions on why those stocks were chosen as my investments.

How is the return of this “GE13 Watch List” after four years?

 Return of GE13 Watch

Table 1 in the Appendix shows the performance of the stocks and the portfolio for the last four years’ investment period for “GE13 Watch” up to the end of year 2016, a reasonably long period.

During this period, the average return of the portfolio of ten stocks is 132.1%, or a median return of 94%, widely out-performed the gain of the broad market KLCI of just 11.1% and the FTSE Bursa Small-Cap Index of 33.9%. The compounded annual return of the portfolio (CAR) is high at 23.4%.

9 out of 10 stocks in the portfolio have positive total returns which varies from 0.0% for Plenitude to 348% for Prestariang. There are 4 other stocks returned more than 100%; SKP Resources at 330%, Jobstreet, which had sold its core business, had an estimated return of 200%, Pintaras, +196% and NTPM, +107.5%. There is only one stock which loses money, Pantech of just -8.8%, showing the low risk of following this value investing strategy.

“Heads I win big; Tails I don’t lose much”

The total return is equivalent to a compounded annual growth rate (CAGR) of 23.4%. RM100000 invested less than four years ago has grown to RM232000, more than double that of invested in the broad market.

Do I still hold all the stocks in the portfolio? No, only a couple. I do not keep them for longer term investing, not because I do not believe in long-term investing in those good stocks, but because I thought I have found some better stocks to invest in, and I needed money to do so.

On 1^st August 2013, Tan KW requested us to put up another portfolio of stocks, which he termed as “Stock Pick Challenge 2013 2H”. Again, there were only two portfolios put up, mine and that of OTB. My portfolio can be viewed from this links below.

http://klse.i3investor.com/servlets/pfs/19386.jsp

I have provided detail analysis on the stocks chosen and their investment thesis in i3investor following the links above. I discussed a lot about the Magic Formula, cash flows, growth etc. for these stocks. Various valuation methods were used to estimate the intrinsic values of those stocks.

Everything is well documented, with a lot of time spent on analysis, report for sharing, for free. I bet you can’t find any begging for sales of products in any of the analysis and reports published.

Return of Stock Pick Challenge 2013 2H

Table 2 in the Appendix shows the performance of the eleven stocks and the portfolio for the 3 years and 5 months’ investment period for “Stock Pick Challenge 2013 2H”.

During this period, the return of the broad market is flat. The portfolio of stocks out-performed the broad KLSE market with an average return of 137%, or a median of 64%. The CAR of the portfolio is 25%, even better than the “GE13 Stock Watch” above. Nine out of eleven stocks, or 82%, were in the positive territory. There were two multi-baggers; Homeritz at +487% and Datasonic +426%. The two losers in Daiman and Kfima lost merely lost a small percentage point. That is the power of FVI,

“Heads I win big; Tails I don’t lose much”

Again, it has demonstrated that value investing has yielded superb return, and more importantly, with very low risk as again evidenced from the minimal losses of two stocks.

Why there are so many investors, some seemingly very experienced investors say it is not advisable to invest in individual stocks listed in Bursa for more than three years? Do they have statistical significant results to prove that?

Conclusions

I have just shown FVI is not just academic or merely “theory”, and is not useless in real investing, as claimed by many detractors. I have given many academic research and proof that it works all over the world, and from my very own experience investing in Bursa, with all the documented proof as demanded.

FVI works very well for long term. In my very own experience, it works very well too in the short term. I will show you proof of that soon.

Apa lagi lu mahu?

For me, buying a stock is akin to investing in part of a business. You should invest in part of good businesses, and more importantly, buy their stocks when they are selling cheap.

“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.” Benjamin Graham, father of value investing.

Please contact me if you wish to know more about fundamental value investing for building long-term wealth investing in the stock market at

ckc13invest@gmail.com

KC

Appendix

Table 1: REturnof GE13 portfolio as on 30^th December 2016

Table 2: Return of “Stock Pick Challenge, 2H 2013” as on 30^th December 2016