kcchongnz blog
What are my stock tips? kcchongnz
Here are some questions by a purchaser of my book, “The complete guide to value investing that works!” which I would like to share with you.
[Good morning Mr Chong,
I have read it reaching to the sections on financial statement analysis and interpretation, and valuations of your book. They prevented me further from accumulating those counters that do not meet the minimum criterion.
I have a few questions:
- It would be nice if you have any articles touching on what newbie should or shouldn't do in this depressing state of stock market and providing any tips or reference for us to read.
- I am ready for this round of stock crash (even to the extent of having opened a share margin account with RHB Investment Bank besides having normal "trading" account and would definitely go in and take a few counters and just wait for them to appreciate over time.
- Would really be good if someone could point us what counters to watch out for, well this is a wish list.
Thanks, and best regards,
Mike]
I have given my opinion for question 1 in the link below,
https://klse.i3investor.com/blogs/kcchongnz/2020-03-27-story-h1485671301-What_to_do_in_this_turbulent_stock_market_kcchongnz_Part_1.jsp
In general, here were my opinions,
- no one is certain how the covid-19 pandemic will finally play out. Have cash reserve which will last you for a long time.
- No need to get panic and run for the exit if you are in (1) above and if you have invested in good businesses.
- detach yourself from this short term “external” loss in this bear market and reduce stress.
- the stock market has gone through numerous crisis, it is always in the long-term uptrend.
- For those who has a lot of cash and thinly invested, it may be a good time to start nibbling; buy some good companies slowly. But don’t forget point no. 1 above.
As for question 2 above on the use of share margin finance, I have given my opinion below,
https://klse.i3investor.com/blogs/kcchongnz/2020-03-28-story-h1485697246-Double_Down_What_to_do_in_a_turbulent_stock_market_Part_2_kcchongnz.jsp
Basically, my comments are as below,
-
First one must have a clear mind the purpose of investing; is it
- To get rich quick, but subject to high risk
- to build long-term wealth steadily, safely but surely
- The future is unpredictable, the pandemic can get worse (or better). Low stock price can go lower, much lower.
- survival is the only road to riches.
Now, I will get to question (3) above; what are my stock tips?
My experience sharing in i3investor
“A wise man adapts himself to circumstances, as water shapes itself to the vessel that contains it.” -Chinese Proverb
I started sharing in i3investor since the year 2012, and that was about 8 years ago. It was from the knowledge I have acquired through some of the super investors in US and a couple from locally. I started with writing comments and sharing some investing strategies such as the Magic Formula, Cold Eye 5 yardsticks, high dividend yield investing strategy, as well as asset-based investing. Many people in i3investors asked me if their stocks met those criteria, and I have taken the time and trouble to find out through the financial statements and answered them accordingly based on quantitative analysis. I still remembered many of those stocks which I suggested meeting the criteria jumped in prices. Those were the good times and I think I have sowed some goodwill in i3investor.
Then a regular contributor in i3investor requested me to share my personal portfolio in January 2013, and then another in August 2013. The portfolios of 10 stocks each were meant for the mid-term investment horizon. Some were even for short-term. Few of the stocks were suitable for the long-term. These were one of the two earliest portfolios appearing in i3investor for the annual stock pick challenge.
I posted my portfolios as requested, naively. There were not only stocks to show, but with numerous articles on the financial interpretation and analysis and valuation of the stocks in the portfolios. The first portfolio generated a return of 146%, compared with the benchmark index’s return of 20% over the five-year period; and the second 175% versus the benchmark of 10% over the same period.
Even then, there were numerous attacks on me personally for investing in a couple of companies (out of 20) which did not perform well, and on a microcap company which its share price actually rose way above its perceived intrinsic value in a short-term of a couple of months. That raised the doubt of my value investing strategy. I had to spend quite some time to “defend” them. That was really a waste of my time. This was my main reason which I do not wish to share my stock pick to the public. What for?
Worse, in this bear market now, any portfolio will see the value reduced substantially. It is painful. That include mine. There are somehow people who dislike me so much and they go digging into my past published portfolios and happy to find that most stocks (80%) in my portfolios have “lost” substantial amount of money, after 8 years, and they started to pounce on me, but ignoring the fact the followings have not been updated,
- Not everybody is investing for the long-term of 8 years or more, although I do advocate that, but one must buy quality and durable business with moat, and at a fair price and not an overvalued price.
- The share prices of for example Haio and Prestariang etc. had gone up substantially, way above their intrinsic value in within the 5 years and would have been taken profit. That is value investing.
- Most of the stocks in my portfolios were high dividend stocks which dividends had not been included in the total return as shown in the website which has not been updated. For example, Jobstreet has given high annual dividend, as well as a special dividend of RM2.65 in 2014.
- Many of the stocks had gone through some corporate exercises. For example, Datasonic had many rounds of bonus issues and share splits, that although its presence price is only a quarter of the price when selected as shown, the total return is still a gain of a few hundred times, instead of heavy losses as shown. Same for Pintaras, Willow which has high dividend and bonus issues. Homeritz and Prestariang had also gone through the same.
- Circumstances had changed after GE and some cyclic events. Hence some of the stocks would have been sold.
Do I still want to defend myself? No, I find it is tiring and unproductive. But seriously, do I have to defend value investing which I uphold? There are so many academic researches and the experience of many super investors in the world showing that it works, it always works in the long-term, as well as the short-term, but not all the time true in the latter though?
There are other reasons which I do not wish to tell what stocks I buy.
- I could be wrong in my assessment, and I might have cut loss later. I do not wish to inform anyone or justify those mistakes nor my action. I have better thing to do with my time.
- My personal risk profile and time horizon is different from yours. I could be investing for cyclic stocks at the low cycle for potentially high gain in short to midterm. Or I could be investing in high quality stock for long-term and it takes a long time for things to play out, and meanwhile if you follow me, you will be cursing that when other stocks are booming but mine not
- The kind of business I am interested is different from yours, for example I may like to invest in high dividend yield and high free cash flows liquor company, tobacco and gaming but you don’t like sin stuff. You may like banking stocks, but I may not.
- My knowledge in other companies is limited, but they could be better companies to invest in. Hence following me may miss your chance of better investment.
Hence, I do not wish to give any stock tips or show my portfolio to the public. I do not see any benefit on that, except for the disadvantages. Publishing your stocks can often lead you to pain. Over that, there are many of those who are waiting to criticize and pull us down, whatever we say or do. It is tiring, besides highly unproductive to go about arguing. I hope you spare me from that.
You may say I have no confidence or conviction, but it is okay as I am governed by my inner scorecard, not the public judgment. I have nothing to prove to anyone except myself. I have read about the great convictions as expressed by some well-known figures, or think they are the only great investors around and their investing strategy is “the only one” in i3investor. The choice of stocks and the overall results of that confidence or conviction doesn’t convince me yet, but on the contrary, it has shown the grave pitfalls in doing so, as well as casting great doubt and contradictions, not only their investment prowess, but their characters and humility.
However, I have dwelled in i3investors for a long time and have gained from it. I will continue to share value investing philosophy, methodologies, and process of investing, how to identify lemons and avoid heavy losses, the pitfalls of margin finance etc. using the real cases in Bursa. These, in my opinion, are more important than giving stock tips.
The game of life, including investing, is the game of everlasting learning, and humility. It is not about showing how rich you are, and how much you have invested in the stock market.
If you wish to learn about value investing, you may contact me to get a copy of my investment book during this lockdown period at
Yes, my way of value investing may not be suitable for everyone, but it is a proven successful way from the academic research and the experience of numerous super investors in the world.
KC
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Discussions
10 people like this. Showing 50 of 69 comments
Philip ( what you can learn from RJ MITTE )
Same point. So if someone without any degree, PhD or real world experience and no certificate come in tells you that your filtering process is wrong, production can be increased by 25% by doing things his way, you will just nod your head and apply without understanding his background?
Look good luck to you.
You are arguing for the sake of arguing.
I stop now and let you think deeply if your past 3 years results on INSAS and xinquan and hengyuan " value investing" is based on nice articles written by sifu without results, and if you ever wondered if their results is the same as yours.
2020-04-06 09:32
Haha qqq3,
The book is about how to avoid qqq3 pitfalls on Sendai and Jaks when you promote non-stop day and night with super investor Sailang and margin finance also your tips on Karim factor ( Kpower and Scib) when you are promotimg it at new high.
2020-04-06 09:41
when all the accountants in the world are struggling with stock market.......
people are selling FA skills to rookies as a way to the promised land..........
a lot of contradictions.
2020-04-06 09:45
Haha qqq3,
On your free stock tips, Warren Buffett has this to say:
“Honesty is a very expensive gift, Don't expect it from cheap people.” ― Warren Buffett
2020-04-06 10:21
@Sslee 05/04/2020 6:01 PM
---> Don’t be someone who turns people off
The big takeaway here is that if you want to be the person who is successful, who everyone wants to hire, you need to build habits of integrity.<---
+++
Not limited to just being hired (although that's something critical too) but in all other aspects of life too. Without being of "the right character", which definitely includes integrity, one will face various friction and negative events in his life. Relationships - personal and professional - are built, developed and sustained over this.
And the great thing is, it's something all of us can always improve upon. This is through all the seemingly `small and routine' situations and events each day. Including at this website. But this requires some courage for we need to honestly look at ourselves first, and acknowledge our unattractive characteristics. Only then can we start doing something about these.
2020-04-06 10:32
Posted by Sslee > Apr 6, 2020 10:21 AM | Report Abuse
Haha qqq3,
On your free stock tips, Warren Buffett has this to say:
“Honesty is a very expensive gift, Don't expect it from cheap people.” ― Warren Buffett
=====
honesty....I very honest one..........
2020-04-06 10:41
ss
honesty....I very honest one..........and I got no crystal ball to see into the future of stock prices.............
2020-04-06 11:08
Haha qqq3,
Najib also say honestly he do not know why people want to bank in money into his bank account but anyhow he spend it anyway.
2020-04-06 11:12
stock market.......u think good meh introduce newbies/ rookies into stock market when they are not ready?
2020-04-06 11:15
SINGAPORE: Record low interest rates are tempting some retail investors in Singapore to load up on debt to buy shares, just as the coronavirus outbreak creates the most volatile markets since the global financial crisis.
Individuals pumped around S$2bil into equities in March, 50% more than the previous month, Singapore Exchange Ltd data showed.
https://klse.i3investor.com/blogs/kianweiaritcles/2020-04-06-story-h1485818118-Singapore_retail_investors_use_cheap_cash_to_load_up_on_stocks.jsp
It looks like Singaporean newbies got infected by FOMO disease now !
FOMO vs covid-19 ... who is the winner ?
2020-04-06 12:19
as far as I can see, Malaysia is the most irresponsible................
2020-04-06 12:23
its FOMO vs the reality of recession.............
FOMO is driven by Dow and oil futures.............
this is not a buy and hold market......
this is a traders market................
2020-04-06 12:41
FOMO can last longer than expected........
I mean....corona is being better understood ...........200,000 deaths in US is a gross exaggeration.........
and oil market, there is hope of supply cuts.
2020-04-06 12:50
nothing about price movements is about value investing............every thing is about FOMO.
2020-04-06 12:51
money for every citizen...........HK, Sinapore, USA & Malaysia......
but HK and Sinagpore has huge reserves........
other countries focus on more targeted programs..........
as far as I can see, Malaysia is the most irresponsible................
2020-04-06 12:56
I think our Pak Din is doing a good job on Covid-19 n even prayed for us for all Malaysian well being.
He made sure no one is left behind like the Singaporean army actors !
2020-04-06 13:05
DK66 is an honest man
if his calculation is right , then I am lucky
if his calculation is not right , then I am unlucky
whatever it is he is still a good man
and a great man who is willing to with us the best he knows
KCChong and OTB were once a DK66 but later turned into a paid subscription sifu. I believe DK66 will forever remain the greatest sifu in i3
Posted by gohkimhock > Apr 6, 2020 12:46 AM | Report Abuse
@Aseng you got fooled by this Dennis Koh with his dubious imaginary profit calculations.
2020-04-06 13:13
KYY also not bad
he helps you to make money
but
never help you how to protect you profit
2020-04-06 13:18
Phillip seem very knowledgeable
but I still have not benefited from his writing
i hope he can be a next great sifu in i3
2020-04-06 13:21
who is my sifu now ?
he is Hng33
long term hold 70% ,short term hit and run 30% for a good buy stock like Jaks and ekovest, myeg
2020-04-06 13:32
he is my sifu for cycling in the parks
Posted by Sslee > Apr 6, 2020 1:31 PM | Report Abuse
Dear Aseng,
How about qqq3?
Thank you
2020-04-06 13:34
Sslee is my plantation sifu
he told me 6+ MT FFB/hec/year is not a bad yield, do not need to ask for more
leave the contractors do his work
we happy happy chitchat here
2020-04-06 13:38
sifu SSlee,
what is the average yield for FFB /hec/year for a smallholder and a well managed big estate ?
thank you
2020-04-06 13:57
sorry , my calculation is wrong
i should be 25+ MT FFB/hec/year .
am I right ?
2020-04-06 14:02
Dear Aseng,
Yes you are right. But MM doing better.
https://www.musimmas.com/news/blog/no-small-matter
https://www.musimmas.com/news/blog/fruits-of-our-labour
The Central Kalimantan Plantation achieved the highest production per hectare among all Musim Mas Group’s plantations in 2014 – exceeding 7.13 tonnes of CPO per hectare – and is still among the most productive Plantation to date.
Thank you
2020-04-06 14:08
ss.........share market all about trading, about FOMO............what has value investing got to do with bursa?
2020-04-06 14:17
Dear Aseng,
Your yield is very good. You should ask Philip his plantation yield.
Thank you
2020-04-06 14:23
It looks like FOMO disease is spreading around the world now ?
I am worried I will be left behind !
What to do now ?
2020-04-06 15:22
Philip ( what you can learn from RJ MITTE )
Wow, you guys must be far better planters than me. But then again you are probably bigger scale so better economies. Our group jointly has 280 acres of land in tawau, so far average yield is around 1.5 ton fresh fruit bunches @ rm380, with the refineries not being nice in buying, when they do buy at all. Payments are usually delayed too.
I wonder if there is any micro boiler compressor systems that I can buy from China to do ffb extractions so I don't need to be cheated by the big players?
2020-04-06 15:44
Philip ( what you can learn from RJ MITTE )
What is fomo?
>>>>>
Posted by qqq33333333 > Apr 6, 2020 2:17 PM | Report Abuse
ss.........share market all about trading, about FOMO............what has value investing got to do with bursa?
2020-04-06 15:47
SINGAPORE (April 6): Singapore announced S$5.1 billion ($3.55 billion) in additional economic spending such as wage support, waiver of levies and one-off payments to combat the coronavirus pandemic.
“This is an unprecedented budget for extraordinary times,” Finance Minister Heng Swee Keat told parliament on Monday, just over a week after the city-state unveiled more than $30 billion in new support measures as it braces for its worst recession.
On Friday, Singapore said it will close schools and most workplaces for a month as part of stricter measures to curb a recent jump in coronavirus infections. Singapore has reported a total of 1,309 infections and six deaths from the coronavirus.
Heng said the new measures unveiled in the third budget will increase the total spending on coronavirus relief to S$59.9 bln or 12% of gross domestic product (GDP). He said Singapore will draw an additional S$4 billion from its past reserves to fund the new measures.
“The situation remains highly fluid and uncertain. The government stands ready to provide further support should it become necessary,” Heng said.
Heng said Singapore’s overall budget deficit for financial year 2020 is expected to increase to S$44.3 billion, or 8.9% of GDP.
Ah Heng is going all out war against covid-19 ?
Our Pak Din is going to follow suit this evening at 4 pm TV time ?
2020-04-06 15:48
Pak Din, I am with U fighting against covid-19.
Kita akan bangkit semula !
Hidup Pak Din !
2020-04-06 16:28
Please practice safety distance everywhere.
Safety distance ... the no. 1 law of good health for all now !
If we break this law, we got to pay with our life as forced by covid-19 !
2020-04-06 16:34
FOMO means fear of missing out
its trading power vs investing.......
got people investing one meh?
not scared of biggest recession in a generation?
2020-04-06 17:15
but what I know is tested positive is not a death sentence..........
in Europe, some specialists are saying 1 to 10 % of the people already infected.........but total death is very small number only.
2020-04-06 17:19
Even if the death rate is very small, covid-19 got make the mkt chip
for the rich to buy shares chip n become richer !
Covid-19 is actually very good for the rich people like WB to become
richer !
2020-04-06 17:31
Please read below. Singaporeans oredi got infected with FOMO disease now ! Thanks.
Author: Tan KW | Publish date: Mon, 6 Apr 2020, 11:18 AM
SINGAPORE: Record low interest rates are tempting some retail investors in Singapore to load up on debt to buy shares, just as the coronavirus outbreak creates the most volatile markets since the global financial crisis.
Earlier this year, 31-year-old insurance agent Heng Kai Sheng got advances on three separate credit cards to the tune of S$150,000 (US$105,000).
With the money, he opened a share-financing account at a local bank and pledged the lot as collateral.
He was granted leverage of around 3.5 times, a S$500,000 kitty Heng’s plowing into the stock market.
“As Asians, our parents always tell us ‘don’t borrow money, repay your mortgage as soon as possible’, ” said Heng, whose initial S$170,000 share portfolio now totals about S$135,000. “But money is so cheap.”
According to preliminary data from the Monetary Authority of Singapore, bank financing for stock purchases by retail investors rebounded in February after three consecutive months of declines.
Individuals pumped around S$2bil into equities in March, 50% more than the previous month, Singapore Exchange Ltd data showed.
The increase comes as the nation’s benchmark equity gauge registered its worst quarter since the global financial crisis. The SPDR Straits Times Index ETF, the largest Singapore-listed exchange-traded fund tracking the city-state’s stocks, saw net inflows of about S$247mil in the three months ended March 31, its largest quarterly boost since 2002, Bloomberg-compiled data showed.
“There are probably new and existing investors who aren’t leveraged who would definitely want to take advantage of the sell-off to buy shares, ” said Joel Ng, an analyst at KGI Securities (Singapore) Pte.
There are also some suggestions retail investors may be using their homes as collateral to borrow money.
David Gerald, founder of investor lobby group Securities Investors Association (Singapore), said he was aware that investors “may want to refinance their housing loans” in the low-rate environment to free up cash for equity investments. However, “investors should be cautious not to over-leverage” in volatile markets because they may face margin calls, he added.
Not everyone is joining the party. While share financing by banks rose in February, the amount decreased 11% when compared to a year ago. And according to Ng, margin calls “really intensified” in March, particularly for private-bank clients who were sold leveraged products or who took on debt to buy real-estate investment trusts.
Heng said he had a three- to-five-year horizon for his investments, and maintains he’s doing the math to make sure he can always cover the interest, which ranges from 1.38% to 2.03% on the credit cards.
Some of the shares he bought include Oversea-Chinese Banking Corp, which slumped 21% last quarter, Singapore Telecommunications Ltd, down 25%, and Mapletree Industrial Trust, which declined 6.5%.
Heng knows he’s taking a risk but he’s not too worried.
“For young people like us, even if you fail, you can make up the capital, ” he said. “If you have sufficient earning power, you should take a bit more risk.”
- Bloomberg
2020-04-06 17:43
in Europe, some specialists are saying 1 to 10 % of the people already infected...meaning 3 to 30 million people in europe already infected............the vast majority recovers automatically........never got sick..........
2020-04-06 17:44
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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....
qqq33333333
stock market is not plantation.
stock market is dealing with attitude....plantation is dealing with science.
2020-04-06 09:32