kcchongnz blog
Investing in Bursa for 5 years: 5 年的等待 kcchongnz
I have written an article two days ago in i3investor showing the performance of the portfolio of 13 stocks selected in my stock pick service just completed in the link below,
https://klse.i3investor.com/blogs/kcchongnz/137874.jsp
The main purpose of the article was to show that fundamental value investing (FVI), despite all the criticisms and scepticisms, not only works well in the US and all over the world, it also works well in Bursa, in this case, for a short-term period of one year.
This portfolio made a commendable average as well as median return of 24% and 40% respectively in a year, compared to the gain of 8.9% of the broad KLCI index. The portfolio out-performed this index by a wide margin, with an excess return of 15%, or close to three times the return of the benchmark. The portfolio also more than doubled the return of the broader Mid-cap FBM Emas Index of 11.4%.
Below is the kind of scepticism I am refer to, but nevertheless, it is a good scepticism from a “sexy babe” worth discussing about.
“Hengyuan: SEXY BABE RM21! kc, how we know whether the results are result of good stock picks, or result you asking your subscriber to buy, which creates some upward pressure to prices. How about showing a 5years ago track record. Stock u recommend 5 yrs ago, and still holding well now??? 13/11/2017 01:47”
For the first part, whether the stocks were good picks is easy to answer; all you need is to examine the process and method of selection of the stocks. If you understand a business and have a business sense, you would be able to examine the track records of the companies selected, if they are good companies. Secondly, and more important, if they were selling at reasonable prices when purchased.
The above were also the reasons I was enticing you to participate in my online course for you to equip yourselves on how to determine if a company is good, and if it is selling at reasonable price.
Next, I must say here that I am a small-time investor, not having much money, and living most of my time overseas, with very few people following my FVI. Nobody seems to “heng” FVI here. Hence, I certainly do not have any clout at all to influence any price movement in any stock in Bursa, not at all.
I do like to talk about the last part,
“How about showing a 5years ago track record. Stock u recommend 5 yrs ago, and still holding well now???”
See the triple “???”? That was the scepticism I am talking about.
Yes, I do have this 5-year track record published in this very website of i3investor in the link below. It was actually published by a third party, Tan Kian Wei, a regular contributor of this website.
https://klse.i3investor.com/servlets/pfs/13147.jsp
This portfolio named “GE13 Watch” was my longest portfolio published in a forum on 21st January 2013 for sharing on FVI and it is close to 5 years now.
The broad KLCI rose from 1629 points about 5 years ago to close at 1737 points today on 13th November 2017. Together with an estimated dividend yield of 2.5% a year, the total return of the broad market is about 21%.
The latest Edge Magazine published 63 equity funds investing in equity in Bursa returned an average of 37% over the 5-year period, with the highest at +120% and the lowest at +6%.
How does the portfolio of 10 stocks in my “GE13 Watch” fare after close to 5 years which can be considered as mid to long-term now, compared to the broad market, and the funds?
Return of GE13 Watch
Table 1 in the Appendix shows the performance of the stocks and the portfolio for the last five years’ investment period for “GE13 Watch” up to today on 13th November 2017, a reasonably long period.
During this period, the average return of the portfolio of ten stocks is 146%, or a median return of 81%, widely out-performed the cumulative gain of the broad market KLCI of just 20% and the FBMEmas mid-Cap Index of 24%, and the FTSE Small-cap Index of 42%.
There was not a single loser. The lowest return stock is Plenitude. Four out of ten stocks had triple digit return with the highest in SKP Resources at +516%, followed by Prestariang at +248%, Pintaras at +240%, and Jobstreet, at +211%. This shows the low risk of following this FVI.
“Heads I win big; Tails I don’t lose much”
The total return of the portfolio of 146% is equivalent to a compounded annual growth rate (CAGR) of 20%. RM100000 invested less than five years ago has grown to RM246000, more than double that invested in the broad market of RM120000.
Not only the four triple-digit gains stocks hold well now, the other three stocks; Kimlun at +82%, NTPM at +81%, and even ECSICT at +64%, hold well too.
Conclusions
It can be seen from the performance of my “GE13 Watch list” that FVI also works well for a long-term period of 5 years. It also works well for the short-term 1-year, or even shorter period.
I have actually shown many times in i3investors with various established portfolios published in i3investor to emphasize on the usefulness and necessity of FVI for building long-term wealth.
But why is there so much negative criticisms and scepticisms about FVI?
The answer is simple; it is,
It has nothing to IQ, or whether you are smart or not, or what is your education level, but the attitude.
Following the rumours, hypes and touting of stocks in the internet and ignoring FVI at the peril of your own financial wellbeing.
However, if you wish to learn about FVI, or getting some stocks selected using the proven successful process in FVI to invest in, you may contact me at,
KC Chong
Appendix
Table 1: 5-year return of GE13 Stock Watch of KC Chong
Table 2: Simple sample calculation of returns
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Discussions
6 people like this. Showing 16 of 16 comments
Posted by Danny Phua > Nov 14, 2017 07:39 AM | Report Abuse
Sorry im new.. what is ref price and adj price?
Over the years, stocks pay dividends. Some stocks had bonus issues, stock split etc. Hence to get the true return, all these must be accounted for and share price adjusted to calculate return.
The price adjustments were obtained from the historical daily share price published in Yahoo Finance.
2017-11-14 09:37
Keeping track of the cost of initial and subsequent investments, the dividends received and the final value of your investment can be laborious.
Excel allows one to calculate the returns using XIRR
I notice Buffett keeps his reporting in a very simple format. I like his format for its simplicity.
For example:
Berkshire's newsletter
Shares* .... Company
151,610,700 shares of .....American Express Company
Cost ...............Market (in millions)
$ 1,287 .............. $ 11,231
kcchongnz
Can you share a simple way to keep track of these in a portfolio?
If you are not free to do so, it is understandable and alright too.
Thanks in anticipation.
2017-11-14 14:00
Posted by 3iii > Nov 14, 2017 02:00 PM | Report Abuse
Keeping track of the cost of initial and subsequent investments, the dividends received and the final value of your investment can be laborious.
kcchongnz
Can you share a simple way to keep track of these in a portfolio?
If you are not free to do so, it is understandable and alright too.
Thanks in anticipation.
I have posted a simple sample calculation of returns as shown in Table 2 in the article above for your information.
2017-11-15 13:36
Investing in Bursa for 5 years: 5 年的等待 kcchongnz.
The market has no money or lack of liquidity, so use your common sense, there is no need to wait for 5 years. Follow the company with liquidity or follow the company that can do something that other company has a problem to enter the market for next year's investment. Ho ho ho Christmas will come don't wait for one but plan for one to come is the best way to go.
2017-11-16 12:41
The only thing valuable in this article is the warren buffett quote. Why, see for yourself, because this article did not mentioned anything it did that is similar to the quote. He ask you you wait for 5 years and tell you waiting for 5 years something will surely happen? Maybe it is your demise that he is talking about, you never know, until you ask him, probably
(1) "You either understand something in 5 minutes or you won't understand it 5 years later" = do what you understand right now, and do only something that you absolutely understand its future. sostupid quote1: "This is because the good things in life you have to count on yourself to get it."
(2) So, there is something in the....that makes all te fiff in the world right away"= "The is because the bad things in life you have to count on other people to get it." sostupid quote2
(3) Just like there is always good news and bad news in everything we do. When other people deliver bad news to you you sometimes can treat the bad news as good news. "and the patience it requires is part of the wiring process"=you only get to do what is really good for you (or value investing) only when other people deliver bad news to you. sostupid quote 3=sostupid quote2 + sostupid quote 1.
I ｈｏｐｅ ｙｏｕ ｓｅｅ ｉｔ ｅｖｅｎ ｉｆ ｗｅ ｈａｖｅ ｄｉｆｆ ｗｉｒｉｎｇｓ．
2017-11-16 17:12
"If you are interest in..." For your information maybe you don't know that : to be fair to everyone in this world the process of learning comes or must come with making a mistake and to learn about something you really have to be part of the mistake by getting yourself directly or indirectly involved. Learn only the things that you don't mind making mistakes: that is why warren buffett said find your own passion as the number one step for planning for your own success.
I ｈｏｐｅ ａｎｙｏｎｅ ｗｈｏ ｗａｎｔｓ ｔｏ ｌｅａｒｎ ｆｒｏｍ ｙｏｕ ｕｎｄｅｒｓｔａｎｄ ｔｈａｔ ｔｈｅｙ ｈａｖｅ ｔｏ ｂｅ ｐａｒｔ ｏｆ ａ ｍｉｓｔａｋｅ ｉｎ ｏｒｄｅｒ ｔｏ ｒｅａｌｌｙ ｌｅａｒｎ ｓｏｍｅｔｈｉｎｇ ｆｒｏｍ ｙｏｕ．
2017-11-16 18:13
Failure is mother of success...I think nobody in your kind of grouping heard of this before including you.
2017-11-16 18:18
Countless of sleepless night and doubt about the company invested, you can get a 20% CAGR, I don't think it is well worth it. Ironically I don't even make one % from this market, it make me very bad investor in bursa? However I make a fortune in Bitcoin, property and business but never in investment. Warrant Buffeett can talk whatever he want, but he cannot accept the facts that all of the blue chip stock in DJIA simply replaced by Tech stock which he once called it "bubble". Also he invested in bubble tech stock Apple showed he no longer follow his golden rules.
2017-11-16 22:22
Many Malaysian stocks have been extremely undervalued. You can start buying stocks which have next QR announcements this month. Some of them are on a bagain sale!
2017-11-16 23:15
The reasons for losing money in the stock market are they bought poor quality stocks and they over pay for them. kcchong teaches how to select good quality stocks and also how to value them. These two skills are most relevant for those who are investing in the stock market.
Besides these, the stock investors also need to be educated on what market fluctuations mean to them. The market will always be volatile and they would need to develop their philosophy to benefit and not be harmed by this. The greatest danger to your investing is actually the person looking back at you in the mirror.
The few who commented above in disagreement with kcchong are not wrong. They are right from their OWN perspectives too. Many exhibit the "snake bite effect" from previous bad experience. Without learning the lesson of how to overcome this, they choose to trade short-term and are rightfully based on their own experience, fearful of any long term commitment to a portfolio of stock.
For the very small percentage of investors, (think Buffett), with a long term successful portfolio, the stock market is truly a compounding machine and the incremental values of their portfolios are huge in the later periods of their long term investing.
2017-11-17 00:11
Posted by apolloang > Nov 17, 2017 12:17 AM | Report Abuse
KEN PE below 5 only,profit so good why only 92cts???
The E in this PE is just the last year earnings. But investing is about the future. There are a few things one has to examine this E, such as,
1) Will earnings still the same next year?
2) Is this E consistent?
3) Is this E real earnings from operation, or result of one-time off item, such as sale of land, property?
4) Is this E result of booking of profit but sales not 100% concluded yet?
5) ETC. ETC. ETC.
Investing should be made simple, but not simpler.
2017-11-17 17:02
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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....
Danny Phua
Sorry im new.. what is ref price and adj price?
2017-11-14 07:39