Koon Yew Yin's Blog
How to improve your trading technique? - Koon Yew Yin
Koon Yew Yin
Publish date: Tue, 04 Feb 2014, 07:23 PM
Koon Yew Yin
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An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.
All materials published here are prepared by Mr. Koon Yew Yin
All materials published here are prepared by Mr. Koon Yew Yin
Koon Yew Yin
Although I said that I would not post any more articles because of the few senseless and abusive commentaries, but by popular request, I will share my knowledge and experience with those who are interested to improve their technique.
The stock market is a zero sum gain play which means that in a long term, some will win and some will lose. It is like 4 people playing mahjong throughout the night where the total wins will equal total losses. If you have been losing in the stock market or on a mahjong table, you must examine your own track record to see your mistakes and change your mind set. Be humble and willing to learn from investors who have been constantly showing successful track record.
A few readers of my previous posting complained that I sold R Sawit and made profit while they have bought and were still holding it. You will recall I always said that if you buy you are buying it at your own risk. When I recommended R Sawit, it was selling 83 sen in Nov 2011 and within a few months, it went above RM 1.20, a 50% profit as shown on the price chart. Why didn’t they sell to make 50% profit within a few months? Fortunately a few readers said that they were grateful because they made so much profit within such a short time.
You must bear in mind that no share will continue to go up in price for whatever reasons and no share will continue to come down for whatever reason. That is why I sold R Sawit, SOP, Ta Ann and others to buy Jaya Tiasa and also to reduce my margin loan. Please refer to my previous article on ‘How to use margin finance to increase profit’
I have openly said that my family has bought more than 40 million Jaya Tiasa and other shares and we have more than one hundred million ringgit margin loan. I have clearly explained why we bought so much JT. The most important reason is that JT has a very promising profit growth prospect. For the same reason, I bought R Sawit, SOP and Ta Ann before when they were cheap which I have sold when their prices went up.
As we all know, all share prices fluctuate. It will be foolish if I do not sell some JT when the price goes up. Now I tell you openly that I will sell some to reduce our margin loan when JT price goes up by say 20% or more per cent so that we have money to buy when JT comes down or to buy some other shares. When I sell some JT, it does not mean that JT will not go up again on a long term. I believe JT will continue to go up for the next few years but its price movement, like many other shares will not move up in a straight line and you must learn how to take advantage of this phenomenon.
Please remember as was the case with R Sawit, if you buy JT when I sell and you lose money, you cannot say that I have misled or cheated you. Just like anyone who has bought a property at a cheap price and sold it to you, you cannot say that he has cheated you. He did not point a gun at you to force you to buy.
I have a few more other shares beside JT. All of them do not move up or down in tendon or move together at the same time. I will sell those that have moved up too rapidly to reduce my margin loan so that I have financial capacity to buy those that have come down or buy a newly discovered good one.
I believe I have the knowledge and experience to share with people who are genuinely interested. I am preaching the same investment philosophy that I had used in the following cases which may seem that I am boasting:
1. In 1983/4 when Hong Kong market crashed, I made so much money that I bought 46% of a stock broking company in H.K.
2. In 2008/9 I was the largest holder of Kulim warrants which shot up from 50sen to Rm 10.50 within 2 years. That was the first time I met Alvin Tai CFA of RHB Research who can vouch my performance.
3. In 2010/11 when I bought 20 million Supermax which shot like a rocket from Rm 1.00 to Rm 6.50 within 18 months. Supermax CEO Dato Sri Stanley Thai can verify what I said.
4. As I described in my previous posting “Why I sold R Sawit and SOP to buy JT”, I bought 15 million SOP and 50 million R Sawit and I made phenomenal profit.
5. As I described in my previous posting of Tradewinds Plantation, I also made a large sum in early 2013 when my large holding forced the controlling shareholder to offer a higher price to privatize the company and many people have made more money.
Although what I said seems boastful, my intention is noble as shown in my track record in doing charity. I advice all investors especially those who have not been winning in this game, should study all my articles carefully to improve their technique in share trading. To win you need knowledge and willingness to take some calculated risk.
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Discussions
19 people like this. Showing 49 of 51 comments
happy chinese new year, mr koon . thanks for your sharing again. love to read what u share. learn a lot too.
2014-02-04 16:40
Mr.Koon appreciate if you can share with us why you bought Xinqquan and are you still believing they are a profitable company ?
2014-02-04 17:46
Thanks Mr Koon for sharing your knowledge, will be looking forward for more articles share investment and trading technique.
2014-02-04 18:24
Mr Koon, What intrigues me are your stock picking techniques. What makes you prefer one stock over another within the same industry to invest in? How do you discern good profit growth potential when analysts who cover the same companies often are unable to? Can you write something on this topic to share with us?
2014-02-04 20:08
Mr koon , when u sold rsawit did u inform that u are selling OR
when u quietly sell and then only inform when u finish selling
Both is same actions but one is morally immoral hahaha
As its a zero sum game , u win but some ppl who follow lost big time
2014-02-04 20:44
It would seem that u have a relevant interest in the gains and disposal of the share in which u recommended / promoting
And latest one which u keep promote : jtiasa
I have no idea why this one even chosen as its fundamentally and financially weak
Did u know jtiasa directors or did they bring or invite u for golf .. I just don't get it
Also Sorry my England is poor although I have pass my all exams Hahaha
U can just imagine I taking to u in Irish accent .. Then it will probably sound alright :)
2014-02-04 20:57
What Mr Koon is trying to tell you in plain simple English, don't be the "bigger fool" in the zero sum game. Jtiasa at the moment has nothing to show to deserve the high valuation. It is pure P/E multiple revaluation based on the rosy picture painted for unknown future performance which have yet to realize. If you jump in after 20% increased in price after Mr Koon's recommendation, then you are the bigger fool. You will be lucky to make some monies if there are more bigger fools in the market.
Mr Koon's style of trading may not be suitable for everyone, especially if you don't have a system to take profit or cut loss to protect your capital to enable you to come back for another deal.
Good luck and happy new year to all.
2014-02-04 21:32
Hi Mr. Koon, would appreciate that you can share your other stock so that we can make comparison on how/what you define as undervalue and growth stock. Is the same method applies to all industry? Hope you will share your knowledge with me.
2014-02-04 22:01
anyone wanna share his analysis on MKH/metro kajang (PE expected to drop to 5x in 1-2yrs to come & SHChan (which is making paltry profit in recent quarters).
anymore undiscovered palm oil co esp those not listed under palm oil sectors. TQ 4the sharing to all of u
2014-02-04 23:47
Hi Mr Koon,I fully agree with you that to make big profit in our investment,we must be able to see the future outcome and invest before other do so. Then only our cost is low and risk is low. For plantation company, the future outcome can be accurately determined if we do our homework like what Mr Koon has done. I hope that those who want to share with us also has done their homework as Mr Koon has done. Please do not argue our point just base on one or two parameter about a company. Mr Koon, how would you value Pinepac, also a plantation stock?
2014-02-05 00:06
this is better blog than before...so please share..how to improve trading technique? please koon...don't just ask us to follow u..please tell us how..if u're really honest and mean what your blog title said...
2014-02-05 00:12
4those who r not as loaded n as alert as the pro, better stop dreaming. Do homework n invest long term base on co's fundamental.
2014-02-05 07:59
Mr Koon,
When are you going to hold another talk again in Ipoh? I find yr recent session at YMCA very beneficial to those are keen & genuine, both newbies & experienced investors.
Looking forward to seeing more educational activities of similar to energize the investing & trading environment here in Ipoh.
Gong Xi Fa Cai.
2014-02-05 09:21
If you are a risk taker like Mr Koon, who has the intention to leverage to make "big buck". You need to convince yourself before convincing others that the bet has a higher probability of success. That's what he meant by calculated risk. You cannot blame him to take profit out of your greed and fear.
Since he is the deal maker in the game, he will always had an "ACE" in his hand over others. He didn't pointed a gun at your head to take up the offer. He merely offer a way to take calculated risk and make monies along the way.
He has been quite transparent on his methodology and sharing his success story. So it is up to you to decide whether you wanted to follow or choose "your way". Growth based on leverage create illusion of wealth, it is over-leverage by US Banking Institutions that create the 2008 financial crisis.
Never forget the key factor that has always sustained prudent investors through thick and thin - SAFETY. Always favor lower risk investments, taking bigger risks strictly with money you can afford to lose.
2014-02-05 09:21
I must apologise that the Jaya Tiasa price chart which I copied from Bursa Malaysia has not adjusted for the bonus/split. I am sorry.
The point I want to make is that the price of JT has been depressed for a long time because it has not been showing reasonable profit. As a result,
I write this for people who are still holding a full time employment and cannot watch the market like a hawk.
In my article, I may have given you the wrong impression that I am encouraging you to trade frequently to make more money and forget about long term investment.
To be really successful in trading you must have the passion and watch the share price movement daily.
If you are still working and like to invest in shares instead of placing your cash saving in fix deposit then you cannot trade frequently to make the extra money by taking advantage of the frequent share price fluctuation. You must buy undervalued shares with long term sustainable profit growth prospect like Jaya Tiasa.
It is very safe to buy JT because its price has been depressed for more than 2 years because it has not been showing good profit up till now and you can it cheap.
Almost all fund mangers cannot buy it because it will drag down the value of their funds if the price of JT remained depressed for the next few months.
I do not have the statistics to show how well the Malaysian funds are performing but in U.S. less than 5% of professionally managed funds can beat the market index.
Can some readers tell us how well our local funds and unit trust are doing?
The reason why JT has not been showing much profit is because, the company has been planting aggressively in the last 10 years and their last annual report shows that it has planted 62,700 ha which has a market value of more than its market capitalization. The average age of their palms is about 5.6 years which has tremendous profit growth potential and that is why I dare to buy more than 40 million JT shares. I am buying for value and profit growth potential. I expect to double my money within 3 years. My track record shows that I have been doubling my money every 2 - 3 years. You can see the list of my recent successful trade or performance in my last posting 'on how to improve your trading technique'.
As a said, to be able to make a lot more money than ordinary investors and fund managers, you must have knowledge, foresight and guts to buy JT when normal investors and fund managers cannot or dare not buy it.
If you look at JT's FFB production chart, you must be able to foresee that their FFB production growth rate will continue to accelerate for the next many years, bearing in mind that 11 or 12 years is the FFB production peak for oil palms.
Alvin Tai SMS to wish me happy CNY and said "time will tell that we are right in buying JT".
2014-02-05 10:27
keep up with your good work. Please do not be discourage with those negative comments. I believe we should all be responsible for our own decisions.
2014-02-05 10:48
I notice that kk123 is still making stupid commentaries with his broken English. You must examine your track record to see if you have been successful in the stock market. Tell us your real name and how well you have done. You are showing your ignorance and all the readers can see it.
Since the beginning of the year, Jaya Tiasa has gone up while the general market has come down or it has performed better than the KLCI. Ignore the facts does not change the facts.
kk123 is a Doubting Thomas. I am sure he does not know the meaning of this.
2014-02-05 11:14
Those who lost money following a stock recommendation, please move on for your own sake. Don't be stuck in a groove; whining, complaining and blaming others but not yourself. Learn from the experience and make back the money. The market is always there. We have all made bad stock investment decisions one time or another. I still hold some costly duds.
2014-02-05 11:41
I believe a success investor, a rich person must has a good mindset, which different him from others. An unsuccessful person has all the doubts, negative elements and poor mindset, which is very difficult to change because most of the wealth belong to the Top 1%, others are either normal or poor.
Mr. Koon, I think this kk123 is exactly the 99% and far below the average of the 99%. Just let him being himself. Let the life tortured him, let the high inflation under our beloved government continue to squeeze on his pockets in years to come.
Tan Sri Tiong is a very powerful person in Sarawak. He was owed over 200k hectares plantable lands in Sarawak. He distributed these lands into Jtiasa, R.Sawit, Stiasa and Golden Ace (unlisted co.). I will think Jtiasa is the best among these. Actually, Jtiasa got very
conservative investment strategy and it has very strong financial footing.
I didn't encourage anyone here to buy into Jtiasa. Buy others' high-fly counters and let your monies fly.
2014-02-05 12:11
Agreed. We should write and comment constructively in this forum for the benefit of all readers.
2014-02-05 12:21
so where's the trading technique boasted?
i'm still waiting!!!
tajuk and isi tak sama rupanya...macam blog2 nya yg sebelum ini...hampas
2014-02-05 14:07
blog title : How to improve your trading technique?
---
may be no answer from the 'blogger' because the title is actually a 'question'..haha
2014-02-05 14:08
Mr Koon, I am very worry like last time Lingui went private when they press down the price which I bought # time higher than privatised price. pls advise.
2014-02-05 15:03
one thing to be noticed is that JT having negative cash flow at the moment. The firm will have to cont' to finance it's CAPEX & OPEX via debt. However, the firm's current capital structure still considered healthy and still has room for debt leveraging.
2014-02-05 15:31
kk123 where are you ? Mr Koon is waiting for you to response in your broken English, ke ke ke
I am having so much fun in this forum
2014-02-05 19:27
Jaya Tiasa has experienced tremendous growth in its FFB production. However, the Oil Extraction Rate (OER) has been unimpressive hovering around 9-10% for the past few years, compared against industry average range of 18-22%. Improvement in OER will surely drive its profitability. Can someone with industry knowledge educate us on why Jaya Tiasa's OER is so low? Is it due to lack of palm oil mills or is it due to the fact that the fruit trees are relatively young?
2014-02-06 00:16
( 1 )To be really successful in trading you must have the passion and watch the share price movement daily.
( 2 )to be able to make a lot more money than ordinary investors and fund managers, you must have knowledge, foresight and guts to buy when normal investors and fund managers cannot or dare not buy .
( 3 ) trade frequently to make the extra money by taking advantage of the frequent share price fluctuation.
............................ LIKE ..............................
2014-02-06 00:31
1.2.3. all great advise.
in my broken england. allow me add
4) dont listen to others. anyone for that matter.
wakakakaka.
2014-02-06 00:41
Abang mudah jerr, beli masa murah, jual masa mahal. Cuma kekadang terbeli masa mahal jual paling mahal. Kikikiki. Kekadang beli masa murah jadi lebih murah atau beli mahal terpaksa jual murah, adui, huhuhuhu.
2014-02-06 00:44
KhoCL
The data for J Tiasa is as follows:
Date FFB/ht OER CPO/Ht cost/ffb
Apr-10 12.39 \\ \\ $293.19
Apr-11 12.19 17.92% 1.18 $253.39
Jun-12 13.59 13.88% 1.25 $319.39
Jun-13 13.85 14.93% 1.25 $329.68
Notice the OER is not that low as you specified as their oil milling capacity is less than the FFB production, hence part of the FFB is sold. One need to deduct the FFB sold before calculating the OER. Their OER is low 13-18% partly due to the age of the palms. Of course the young palms OER usually is about 14%. There is therefore cause for concern.
Their FFB production was overstated in FY2012 as this is a 14th month FY. I have corrected for their ?intentional oversight.
Their FFB/HT is still very low for industrial standard of matured palms.
Obviously they lack deep peat expertise.
Their reference production chart in the Annual report of 2012 is questionable as it deviate from the studies done by UPB on deep peat. The spike in J Tiasa price in 2012 can be partly attributed to the optimistic chart.
I have reservation that J Tiasa will attain FFB/HT of more than 25 tonnes/HT in future it is more likely that their production is less than the industrial standard of 20/HT
2014-02-06 09:56
What a rare find! I mean Mr. Koon! After having read some of his beneficial articles! It was so personal, humble n sincere! It is beyond my imagination!
Consider yourself very lucky if you have read it! A big THANK YOU!!! MR KOON YEW YIN!!1 THANK YOU!!!!!!! GOD BLESS YOU N YOUR FAMILY !!!!!!!!!!!!
2014-02-06 11:30
hi, i am new here..nice to meet you all here.. but i am just wondering since there is reported 85% of profit reduction in year 2013 compared to previous year, isnt still a 'safe' share to keep despite the drop of performance? thanks thanks
2014-02-06 23:00
Madviruz,
If you look at FR with it's equally young palm distribution (>60% young trees below age 7), why is it able to achieve 19-20 ton FFb/ha yield and a very impressive 22%-23% OER?
Why? you need to look at the soil, palm grows best in riverine alluvial soil, which is predominant in sumatera, south and east kalimantan and also in sabah and western peninsular.
Others areas with poor soil like east peninsular and sarawak, the yield and OER is evident in the data. Even with growth plantations in poorer soil cannot hope to match the efficiency of plantation in favorable soils, no matter what they do. JT is planted on mostly peat soil, which is detrimental to the overall FFB yield and OER, even matured plantation like SOP and SP still is not able to get good FFB yield and OER. JT's FFB yield and OER is extremely poor, and is a hallmark of a peat soil plantation similar to SOP and SP. FFb yield of 25 t/ha is not feasible on these soils.
FFB yield and OER is EXTREMELY important to plantations, as it is the ultimate reasons for its high or low production cost. FR have an impressive 50% gross margin and a 20% net margin on it's plantations even at the current depressed selling price. Also FR is able to command higher price for it's CPO due to it's integrated plantation concentrated in RIAU which can guarantee very low FFA% CPO, which commands a price premium.
Now compared it to JT's gross and net margin, can you see how much is the difference, and why?
2014-02-07 12:28
MKH is one stock that u do not need promotions like stupid jtiasa..haha...mkh should have more blogs than jtiasa...let koon makes a comparison between jtiasa and mkh...he might bleeds his brain then..haha
2014-02-07 13:44
please don't follow koon or tan kw...they're just friends...members of a not so convincing syndicate....tan kw always talks about good stocks...and here...wow so believing in jt..haha..a scam
2014-02-07 13:46
gark
You are right in pointing out the importance of soil type in the cultivation of oil palm.
Unfortunately for many novice planters they lack deep peat experience, hence their inability to improve FFB productivity and OER. They are just mimic the results of the peat experience of the 1960's. The scenario has changed dramatically since the 1980's. Now with the proper clones, proper irrigation, sufficient fertilisers and in its right proportion the yeild has improved tremendously by up to 70%, matching the experience of many other favourable areas.
Of course their profit/HT is and will be inferior to riverine alluvial soils even with these improved methodology.
FFA content is independant of soil types. Its relevance here?
2014-02-07 15:40
Madviruz,
Yes, you are right peat soil planting has improved over the years, but still it is inferior to riverine alluvial soil with the newer clones. Also riverine soils have better nutrient content hence uses less fertilizer,less earthworks and hence lower costs.
Overall due to the poor soil factor JT cannot hope to match new plantations with similar/superior clones and improved plantation methodology. A good examples are SOP and SP both which is in the bintulu/miri location, even with fully matured palms, and starting with good clones (planted in 2000's) the FFB yield and OER remains inferior to other plantations. JT on similar soil why is it expected do better?
FFA is not related to soil type but of equal importance for the profitability of the CPO sales. Integrated plantation with own palm oil mill and good transport network to refineries will generally produce low FFA <3% oils which is considered as premium CPO with higher than spot price. Higher price means better profit.
Those plantation deep inside jungle and without own mills and near refineries, can expect FFA of between 4%-8% which is inferior and sold at below spot price.
Not all plantations are the same.
2014-02-07 17:12
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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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Thank u Mr Koon.
2014-02-04 16:36