Good Articles to Share
The return from the stock market for the last 5 years - kcchongnz
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
- Robert G. Allen
一生能夠積累多少財富，不取決於你能夠賺多少錢，
In the last 5 years soon after the world economies recovered from the US sublime housing crisis, investing in the equity market provides fantastic returns for long term investors.
The KLSE index rose from 838 to close at 1813 on 29th November 2013 from 5 years ago for a total gain of 116%. On average, the compounded annual growth (CAGR) each year is 11%, more than double the 3%-4% return from fixed deposit in banks.
The active Malaysian unit trust funds investing in the equity market on average returned 1% to 2% more than the broad market, with the best 5% of the funds returned double that of the broad market. This shows the value added in active fund management in the last 5 years in Malaysia.
Investors would do well to learn from deer hunters and fishermen who know the importance of “being there” and using patient persistence-so they are there when opportunity knocks.
Charles Ellis Investment Policy
I would like to take this opportunity to share with you my experience and philosophies in investing in Bursa for a long-term basis. This is merely for sharing and discussing of investing ideas and not for any other purpose.
Most would know that I invest base on fundamental approach in value investing. When I talk about value investing in the stock market, I am talking about buying stocks of good companies with intrinsic values (IV) at a comfortable margin of safety (MOS), and then sell them when the price of the stocks have risen closed to the intrinsic values, or when I have found another better stock to invest in. Time is needed for that to happen, and we are talking of a time horizon of years, not days, weeks or months. So to see the performance of a portfolio of stocks, we have to look at the CAGR for years as compared to the broad market. My investing experience does appear to show that value investing works. In actual fact it appears to work extremely well.
Tan Kian Wei, one of the major contributors in i3 has put up my long term portfolio some time ago as shown in the following link:
http://klse.i3investor.com/
Table 1 below shows the prices of the stocks in the portfolio for various years ago. The prices obtained from Yahoo Finance shown have adjusted for any dividend paid, and any corporate exercise such as bonus and right issues. Some of the prices are missing mostly because of their short period of public listing.
Table 2 below shows that all 10 stocks in the portfolio have positive CAGR every year except for one stock, SKP Resource of just one year of negative return, i.e. last year of -8.6%. Taking off this return of last year, it actually have done extremely well with average CAGR of more than 30% each year. A incredible phenomenon is that almost all CAGRs for each stocks and each year are in double digit number. The best performer is Pintaras Jaya with CAGR each one to five years of more than 40%.
The average CAGR of the portfolio is 30% each year as shown in Table 3, out-performs the broad market of 11% by a whopping 300%. On average, the excess return over the broad market is about 19% each year.
I have to admit that there are portfolios by others which are better than the above performance. However, the purpose of this sharing is to show that when one does value investing, i.e. buying a stock at a comfortable MOS and hence taken care of risk, the upside will take care of itself.
Table 1:
Stock Name Code Price now 1 2 3 4 5
Kfima 6491 1.98 1.78 1.74 1.33 0.830 0.375
Pintaras 9598 6.20 3.13 2.30 1.96 1.46 1.15
ECS 5162 1.2 1.07 0.833 0.735 xxxx xxxx
Plenitude 5075 2.74 1.77 2.030 2.13 1.35 0.865
Jobstreest *0058 2.15 1.17 1.400 1.440 0.715 0.625
Pantech 5125 0.99 0.705 0.465 0.615 0.792 0.363
SKPRes 7155 0.320 0.35 0.180 0.150 0.113 0.057
NTPM 5066 0.700 0.44 0.500 0.555 0.520 0.2667
Kimlun 5171 1.84 1.61 1.520 1.040 xxxx xxxx
Prestariang 5204 2.60 1.09 xxxx xxxx xxxx xxxx
KLCI KLSE 1813 1611 1489 1501 1270 838
Table 2 30/11/2013 xxxx xxxx xxxx Years xxxx xxxx
Stock Name Code Price now 1 2 3 4 5
Kfima 6491 1.98 11.2% 6.7% 14.2% 24.3% 39.5%
Pintaras 9598 6.20 98.1% 64.2% 46.8% 43.6% 40.1%
ECS 5162 1.20 12.1% 20.0% 17.8% xxxx xxxx
Plenitude 5075 2.74 54.8% 16.2% 8.8% 19.4% 25.9%
Jobstreest *0058 2.15 83.8% 23.9% 14.3% 31.7% 28.0%
Pantech 5125 0.99 40.4% 45.9% 17.2% 5.7% 22.3%
SKPRes 7155 0.320 -8.6% 33.3% 28.7% 29.6% 41.4%
NTPM 5066 0.700 59.1% 18.3% 8.0% 7.7% 21.3%
Kimlun 5171 1.84 14.3% 10.0% 20.9% xxxx xxxx
Prestariang 5204 2.60 138.5% xxxx xxxx xxxx xxxx
Table 3:
Year 1 2 3 4 5 Average
Average Portfolio CAR 50.4% 26.5% 19.6% 23.1% 31.2% 30.2%
KLSE CAR 12.5% 10.3% 6.5% 9.3% 16.7% 11.1%
Excess return 37.8% 16.2% 13.1% 13.8% 14.5% 19.1%
Posted by kcchongnz at Nov 30, 2013 06:51 PM
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Discussions
6 people like this. Showing 47 of 64 comments
thks for the meticulously prepared postings in all these e forums. Your name here is synonymous with 'par excellence'. Its a brand
2013-12-01 23:45
Hi @TanKW, thanks for your generous sharing and would appreciate if you could allow me to join your 2014 stock pick as well. Thanks.
2013-12-05 14:17
Hi Kcchong, I'm new here,i would appreciate if u allow me to join your 2014 stock pick as well. Thanks.
2013-12-05 14:22
A newbie here but have been reading all your postings and contributions. Let me say a BIG ThkQ esp. to @Tan KW and @kcchongnz for your very indepth contributions. It has been a great help to me personally!! Count me in for 2014!!
2013-12-05 14:27
Posted by Tan KW > Nov 30, 2013 07:31 PM | Report Abuse
@kcchongnz, interesting to start 2014 stock picks?
i am thinking to create a new thread for year 2014 stock... count you in,ok?
may i know who is interested to join in? do let me know...
Yes, I would like to share my investment strategies and at the same time obtaining great investment ideas and knowledge from everyone here.
2013-12-05 14:47
Hi @TanKW n kcchongnz., thanks for your generous sharing and would appreciate if you could allow me to join your 2014 stock pick as well. Thanks. My email:jennyleeyl@gmail.com
2013-12-06 08:14
Dear Kcchongnz can you pls let me have the list of bursa counters in the GRAHAM Net net list Thanks
2013-12-06 08:29
Hi Mr. Chong,
Please include me too. My email address is yipman188@gmail.com
TQ
2013-12-06 08:42
Now I remember this.
Posted by 爱丽斯 梦幻世界 > Dec 6, 2013 07:47 AM | Report Abuse
i hv some pick before :
http://klse.i3investor.com/servlets/pfs/13861.jsp
爱丽斯 梦幻世界, your portfolio did very well indeed, returning about 28% (including dividend) in 9 months. Your portfolio beats the broad market by about 16% as shown below.
Well done.
Reference date 1/03/2013 4/12/2013
Stock Name Ref Price Price now Change %change
Pantech 0.72 0.97 0.250 34.7%
YTLP 1.52 1.81 0.290 19.1%
NTPM 0.47 0.74 0.270 57.4%
Affin 3.30 4.3 1.000 30.3%
PWRoot 1.48 1.86 0.380 25.7%
MKH 2.05 2.63 0.580 28.3%
Perisai 1.01 1.5 0.490 48.5%
SKPRes 0.34 0.32 -0.020 -5.9%
DRBHcom 2.57 2.61 0.040 1.6%
PPB 12.4 15.16 2.760 22.3%
Average return xxxx xxxx xxxx 26.2%
KLSE 1654 1825 171 10.3%
Alpha xxxx xxxx xxxx 15.9%
2013-12-06 09:27
Posted by Tan KW > Dec 5, 2013 03:22 PM | Report Abuse
Mr Ooi.... you are welcome to join...
Ans : I am not interested to take part in competition in 2014. I will post my stock selection for 2014. I will not rush in to post all stocks, I will post it when the timing is right throughout the year in 2014.
Thank you.
2013-12-06 10:40
Dear Mr Tan KW,
Please use the closing price on 5/12/2013, my stock pick for 2014 are as follows :-
Puncak-WB
Homeriz
Hevea
Jaks
Insas
Inari-WA
WTK
Caely
I will send you my IV calculation write up and stock chart on this week end.
Thank you
2013-12-06 10:52
Posted by Tan KW > Dec 6, 2013 10:45 AM | Report Abuse
Mr Ooi, thanks in advance...
feel free to email me when ready...
i shall start the year 2014 topic after new year
Ans : You can start update my portfolio effective 5/12/2013.
Thank you.
2013-12-06 11:25
Mr Tan,
Below is the composition :
Puncak-WB - 15 %
Homeriz - 10%
Hevea - 10%
Jaks - 10%
Insas - 10%
Inari-WA - 10%
WTK - 5%
Caely - 5%
Thank you.
2013-12-06 11:59
Mr Tan,
Please add in the below stock :
Latitud - 10% at 1.76 (5/12/2013)
Thank you.
Ooi
2013-12-06 15:04
Mr Tan,
Please add in the below stock :
TGuan - 10% at 1.90 (5/12/2013)
Thank you.
Ooi
2013-12-06 15:35
thanks Kcchongnz for ur comment, and actually u already give me a lot confident with ur comment 9 month ago.
thanks Tan KW, will make my 2014 pick soon, but any rules?
2013-12-06 19:25
Hi mr ooi would it be possible to get a copy of the write up on Carly ...thks in advance lisee_therapy@hotmail.com
2013-12-06 21:20
Posted by Tan KW > Dec 6, 2013 09:33 PM | Report Abuse
@爱丽斯 梦幻世界
you can refer to year 2013 pick, just provide the reason for your stock pick that will do..
Tan KW, here my 2014 pick, the reason of my pick just simple ===> have dividend :
Affin 10%
PWRoot 10%
Yilai 10%
WtHorse 10%
Ofi 10%
CresNdo 10%
CarlsBg 12.5%
Axreit 12.5%
Thanks
2013-12-06 23:57
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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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Hi @Tan KW, just would like to say that your contribution towards I3 community is outstanding. Thank you to you as well as @kcchongnz for making I3 a very good sharing platform. Good night fellas!
2013-11-30 22:00