Koon Yew Yin's Blog
Can you become a super investor? by Koon Yew Yin
Koon Yew Yin
Publish date: Tue, 21 Jul 2015, 06:03 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
Many investment psychologists think that some of the following 7 traits or characteristic features cannot be learned once a person reaches adulthood. By that time, your potential to be an outstanding investor has already been determined. It can be honed or improved, but not developed from scratch because it mostly has to do with the way your brain is wired and experiences you have had as a child.
That doesn’t mean financial education and investing experience are not important. Those are critical just to get into the game and keep playing. As a result, your income will be more than the average earning of most people.
Let me first test your boldness to go against the crowd.
Trait 1: Be a contrarian investor. Develop the ability to buy stocks while others are panicking and sell stocks while others are euphoric. How many of you are willing to hold on to your share after it has gone up more than 100% within 12 months? How can you ignore people or friends who advise you to sell and take profit.
Let us look at the price charts of Latitude, Lii Hen and VS Industry.
Latitude has gone up from Rm 1.00 to above Rm 6.40 within the last 24 months.
Lii Hen has gone up from Rm 1.40 to above Rm 5.50 within the last 24 months.
VS Industry has gone up from Rm 1.50 to above Rm 5.50 within the last 18 months.
As you can see these 3 stocks have been shooting up so rapidly. How can you not sell?
About 7 or 8 months ago, Jimmy Chee invited me to talk in Calgary Hall, KL where I recommended a buy of Latitude at Rm 3.50. Some of the attendees who bought and would thank me.
Almost all of you would have sold when the price went up 100% within one year. After you have sold and the price keep going up, will buy it back? This is a test of your true quality!
After I started buying Latitude, Lii Hen and VS I only sold to meet margin call or to buy another counter which I expect to go up faster, bearing in mind that all shares do not move up or down at the same rate. But once the prices went up, I dare to increase my borrowing to buy more.
Substantial Shareholders: As a result, I have to declare as a substantial shareholder of all these 3 counters on Bursa Malaysia. Besides these, I also have some Poh Huat and Xingquan.
Out of more than 1,000 listed companies, I only own shares in 5 companies.
I started serious investing in public listed shares after I retired from active work in 1983 at the age 50 year. I am not an accountant by training. I was a civil engineer and I hardly knew how to read a balance sheet at that time.
I started by reading to understand the basic fundamentals of share selection as practiced by Warren Buffet, Peter Lynch and other great investment gurus. Of course I made some mistakes at the beginning, which in retrospect seem so silly. But I was prepared to learn from my own mistakes.
In 1983 when China wanted to take back Hong Kong, the people were selling as if there was no tomorrow. I bought with all the money I had and used margin financing to buy even more.
As soon as H.K. was given 50 years extension of the capitalist system, the market rebounded. How I took advantage of the situation is history.
Trait 2: Obsession in playing the game and wanting to win. These people don’t just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk.
They are obsessed in the investing game.
Trait 3: The willingness to learn from past mistakes. It is hard to acknowledge your own mistake. But you need to learn from your own mistake. Most people would much rather just move on and gross over the dumb things they have done in the past. I believe the term for this is repression. But if you ignore mistakes without fully analyzing them, you will undoubtedly make a similar mistake later in your investing decision.
Trait 4: An inherent sense of risk based on common sense. Most people believe analysts’ reports which are invariably ‘a buy’ recommendation. They cannot recommend ‘a sell’ because they would lose the companies’ business. You must always take an analyst report with a pinch of salt.
I believe the greatest risk control is common sense which is not so common.
Trait 5: Confidence: Great investors must have confidence in their own convictions and stick with them, even when facing criticism. Buffett never get into the dot-com mania though he was criticized publicly for ignoring technology stocks. He stuck to his guns when everyone else was abandoning the value investing ship. He was proven right when the dot com bubble burst.
Trait 6: Clear thinking. If you can’t write clearly, it is my opinion that you don’t think very clearly. And if you don’t think clearly, you’re in trouble. There are a lot of people who have genius IQs who can’t think clearly, though they can figure out bond or option pricing in their heads.
Trait 7: And finally the most important and rarest trait of all: The ability to live through volatility without changing your investment thought process. This is almost impossible for most people to do; when the chips are down they find it hard to sell their stocks at a loss. They find it difficult to average down or to put any money into stocks at all when the market is going down. People don’t like short term pain even if it would result in better long-term gain. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. This is irrational. Risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. But most people just can’t see it that way. Their brains won’t let them. Their panic instinct steps in and shuts down the normal brain function.
To become a super investor, you must have the patience to master the above 7 traits.
How did I pick these 5 stocks?
Out of 1,000 listed companies, I do not buy GLC, Bank shares, Plantation shares, Property shares, and construction contracting shares. In view of our ringgit at 9 year low, I concentrate on companies that manufacture products for export.
Check from Bursa the quarterly result. As soon as you see any company reporting a sudden jump in profit, study its business more carefully to see its future profit growth prospect.
Golden Rule: Do not buy if you are not sure it can make more profit this year than last year because when the annual result shows reduced profit, the price will not go up.
Increase buying when you see the profit is improving from quarter to quarter.
Invest like a businessman: How does a businessman look at the business of the company?
He does not worry too much about the audited accounts because it is a recorded history of the company. He looks at the future profit growth prospect. The future may not be so clear and straight forward but he is willing to take some risk.
For example when a businessman buys a piece of land to develop houses, shopping mall or a hotel, he cannot be 100% sure that his project will be successful. But he is willing to take a chance.
When I buy Latitude, Lii Hen or VS shares, I consider myself as part owner of the companies. I can foresee their future profit growth prospect.
Charity to help the poor:
As I mentioned in my opening paragraph, your experiences when you have had as a child would help you become a super investor. As I came from a poor family, I know how hard it is to survive without enough money. My ambition is to make more money to help the poor. I have given about 300 scholarships to help poor students to complete their tertiary education and I also have written in my will that all my remaining wealth will be for charity to help the poor and needy when I die. I think my objective for wanting to make more money has helped me make better investment decisions.
I am obliged to tell you that I am not responsible for your profit or loss if you decide to buy those shares I recommended. You buy at your own risk.
Koon Yew Yin,
21st July 2015
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Discussions
13 people like this. Showing 50 of 55 comments
So how much JTiasa now? 1.49. So how to become super investor? All who follow koon can spend another 135.00 and listen to him again.
The price has been depressed for more than a year, since the bonus issue of 2 for every one share held. A few long term investors bought 15% of the total issued shares at Rm 7.90 per share before the bonus issue which is equivalent to Rm 2.63 per share. The closing price on 31st Oct was Rm 2,13.
I am obliged to tell you that Jaya Tiasa is my major investment and I am not asking you to buy it.
Koon Yew Yin
http://klse.i3investor.com/blogs/koonyewyinblog/40359.jsp
2015-07-21 18:40
Uncle did mention clearly that he treats 'investment' as a business. I prefer 'trading' technique used in his approach. It's all about making profit in the stock market. High egoism by ignoring mistakes may get us kill in the market. We have to learn from uncle about forgetting the past mistakes. No point punishing ourselves by carrying the heavy bags behind.He is good at spotting investment theme available in the market. As a businessman, he would come back to plantation sector once opportunity has emerged.
2015-07-21 19:15
His reading of financial statement is not too accurate, but I believe in his business acumen. At the very top of cooperate ladder figuring how to be good is not enough, but rather how to focus on strength on bring the best out of everything is even more critical. For those koon bashers, refusing to look beyond his past mistakes will only cost you learning opportunities.
Off course do not believe him 100%. Trust , But verify.
2015-07-21 19:54
hello guy,Did mr.koon put the gun on your head force you to buy?no, right??
As a mature investor, we should know what is mean by invest with your own risk....
If you don't understand this statement, pls do not invest...
Otherwise, you will always blame people or 靠北靠布 when you lose your money...
2015-07-21 22:18
stock with momentum
glotec
pworth
xinghe
puc
aax
-thanks yourself.... most important read....
dont follow follow an cry like pondan
ikikikiiiiiii
2015-07-21 22:23
Thanks Uncle Koon for yet another good write up. Really thankful for your efforts.
To the skeptics, please grow up, don't simply pass on negative comments.
2015-07-21 23:11
Ah Koon forgot already ka? Only last year 80% portfolio plantation counters. Tipu ka?
Posted by Koon Yew Yin > Mar 29, 2014 09:14 AM | Report Abuse
Many readers want to know which plantation or any other share is best. I cannot tell for sure. But my choices are JT, Kulim, FGV, SOP, Sarawak Plant and TH Plant which formed about 80% of my total investment.
2015-07-21 23:50
orang tua mudah lupa, maafkan lah cerita lama
tak baik kacau orang tua. biarkan..
hormat dengan orng tua.. cikgu ada ajar.
2015-07-21 23:54
Don't keep in the heart la. It's torturing to look back again. He is a businessman in "trading" securities business. He would go for the counters offering him high potential generating future profits. This trait give him an edge to make big money in stock market over time.
2015-07-22 00:16
ya lor commodities are being crushed so no point holding unless u can keep long term but opportunity cost n with ringgit being so weak due to coming hike of interest rate in US n of course no thanks MOSTLY to Ah Cheat Gor n his Forty thieves in IMDumBo tat is why u see all the exporting stocks n tech (with tech all time high in Nasdaq) performing so well so must give credit to these Super investors for spotting the trends and deservingly making the $$$ and hopefully he can help out more students in need since cannot depend on gov as Cheat have to continue plundering bolihland for Aunty Rosie's 1200 hair do,Birkins n diamonds :(
2015-07-22 06:02
Mr Koon,
Thanks for sharing...I took your advice from your previous write up and I turned a loss of almost 30% and within 2 months recouped all those losses and after that within another 2 months I was able to add another 48% to top the capital employed...
2015-07-22 09:16
Ah yo, read his writing clearly.....requote.....
Let us look at the price charts of Latitude, Lii Hen and VS Industry.
Latitude has gone up from Rm 1.00 to above Rm 6.40 within the last 24 months.
Lii Hen has gone up from Rm 1.40 to above Rm 5.50 within the last 24 months.
VS Industry has gone up from Rm 1.50 to above Rm 5.50 within the last 18 months.
As you can see these 3 stocks have been shooting up so rapidly. How can you not sell?
He clearly writes ....""""How can you not sell?"""""
He is going to be right lar,....all over 500% how not be be right....the next 10% higher is alot more difficult to push given that Fed is hiking rates very sooooooon
2015-07-22 10:30
After I started buying Latitude, Lii Hen and VS I only sold to meet margin call or to buy another counter which I expect to go up faster, bearing in mind that all shares do not move up or down at the same rate. But once the prices went up, I dare to increase my borrowing to buy more.
Substantial Shareholders: As a result, I have to declare as a substantial shareholder of all these 3 counters on Bursa Malaysia. Besides these, I also have some Poh Huat and Xingquan
WAH!!! all up due to HIM!! as Bursa mkt so small, easily push up by him and gang lor
2015-07-22 12:25
Mr Koon, any advice from you for A&M & HIL, should I add more? Is it the main reason the stock cannot move up due to free float despite making good financial profit?
2015-07-22 12:25
Out of more than 1,000 listed companies, I only own shares in 5 companies.
This is don't believe. Maybe his wife holding the rest. Even cold eye got more than 10 stocks in his portfolio mah. Basic rules on diversification mah.
2015-07-22 12:25
Ya hor, but but 12 months ago ah koon hold 80% plantation counters
Posted by Freddie > Jul 22, 2015 10:30 AM | Report Abuse
Ah yo, read his writing clearly.....requote.....
Let us look at the price charts of Latitude, Lii Hen and VS Industry.
Latitude has gone up from Rm 1.00 to above Rm 6.40 within the last 24 months.
Lii Hen has gone up from Rm 1.40 to above Rm 5.50 within the last 24 months.
VS Industry has gone up from Rm 1.50 to above Rm 5.50 within the last 18 months.
As you can see these 3 stocks have been shooting up so rapidly. How can you not sell?
He clearly writes ....""""How can you not sell?"""""
He is going to be right lar,....all over 500% how not be be right....the next 10% higher is alot more difficult to push given that Fed is hiking rates very sooooooon
2015-07-22 12:26
Uncle Koon said out of more than 1,000 listed companies, he only own shares in 5 companies. Tipu ka?
Posted by Koon Yew Yin > Mar 29, 2014 09:14 AM | Report Abuse
Many readers want to know which plantation or any other share is best. I cannot tell for sure. But my choices are JT, Kulim, FGV, SOP, Sarawak Plant and TH Plant which formed about 80% of my total investment.
2015-07-22 12:28
How did I pick these 5 stocks?
Out of 1,000 listed companies, I do not buy GLC, Bank shares, Plantation shares, Property shares, and construction contracting shares. In view of our ringgit at 9 year low, I concentrate on companies that manufacture products for export.
THIS IS MORE disgusting! JTIASA,SUBUR also export! PLANTATION ALSO EXPORT! then why not buy plantation? Self contradicting. Oldman without integrity? wow, now we know Koon's real personality??
2015-07-22 12:28
Yes. I do agree can play short term exporting theme. But not for LONG loh. MYR will bounce back once 1mdb issue settled.
Tht's why, don't focus too much export! MOST winning now due to picking exporting stocks, and it is not sustainable. PICK winners based on result, expansion planning, or good managemet, not simply due to MYR weakness loh.
2015-07-22 12:30
Bro "timetokoon", please stop the attack. Suggest you spend your time to learn from the past mistakes and explore ways to enhance your own wealth.
2015-07-22 12:37
Better spend 135.00 and listen to old trickster well respected by bodow people
2015-07-22 12:40
it is obvious from this thread who are the rich, who are the sinka and who to follow.
2015-07-22 12:41
Sinka always respect old tricker. Go ahead pay 135.00 and open margin account
2015-07-22 12:42
I believe those who are spitting their venom at Mr Koon are those poor souls who would have lost heavily in the market...hence their frustration..besides these are the very people who do not learn from others in a constructive manner..they will forever keep on failing..too bad it's in their gene.
2015-07-22 12:56
mistake learn: read with full discretion over KYY's articles and "promoted stocks"
2015-07-22 14:04
I shall keep quiet now.
CYBERBULLY-DUIT
+CYBERBULLY-ICON8888,
NOW
VULGAR KING-KOPIPENG
VULGAR QUEEN-TKP1
2015-07-22 15:54
Paperplane mr koon is so old but still able to put effort on his article and teaching us how he make money from investment.
So u can read or don't read this is ur choice don't keep scolding ppl reflect that u are so smart. If u smart u then u write ur own article. And icon kopi also just share their experience I dun see any of them keep promote like how u promote ur asdion. If u don't like just ignore dun like a monkey keep blame this blame tat
2015-07-22 17:18
Well. I found lots of inconsistency from all past historical posts from him! I respect him on education! But in share? He still novice.
2015-07-22 21:37
Just because u billionaire doesn't meant you know a lot on share. This why he consult ppl like kc Chong, OTB also.
2015-07-22 21:38
He anytime more experience than u
you 4 years experience, need to learn to listen more talk less
2015-07-22 21:44
there are still many loopholes in koon's methodology,for example, the lack of focus on respective political melieu and global macroeconomic climate analysis,his happy experience in Hongkong,as happened because DENG, a pragmatic was in charge of political affair, if Mao was still around at that time, sorry lah, just another sad story, in those tumultuous days.
2015-07-22 22:51
Dear Mr Koon, I really like your writing on share investments. This article is candid and frank. Without reservation you humbly admitted your mistakes. Well done! I really admired your good qualities. Please write more on share investments and your view on life. Thank you very much
2015-07-23 08:47
I think it would be a much better idea for Mr. Koon to share his valuable experience in the Corporate World - IJM, Gamuda, Mudajaya etc etc. than to keep promoting high flying shares which are now reaching danger zone.
In 1929 many experts still very sanguine on high flying stocks as they entered the Great Crash. Those who switched from stocks to bonds have saved themselves from the subsequent carnage.
I would advise my Koon to take profits from VS, Latitude & Pohuat now and switch all to defensive laggards like Utilities, Consumer foods and even in fallen plantation stock like JTiasa now. And Opcom as a defensive dividend paying share.
Calvin comments, "The indicator for selling a stock is when we started to brag. Because the stock is most probably now at its peak."
2015-07-23 10:06
A billionaire who do not understand stock investment still a nooby for me. Nothing to say much and learnt from! Corporate word totally different! When u ceo, u instruct ppl do works and take credit easily! In stock investment, you make mistake you get yourself into billions of troubles!
2015-07-23 10:09
Well! Calvin I think his mentality got problems loh! He don't think reverse way! Now I will sell my vs, pohuat, switch to puncak, digi this type, ytlpower or ytl, genm also not bad.....
2015-07-23 10:13
I think he just want to share his experience in how to choose the potential stock, not asking ppl to buy what.
2015-07-23 14:58
Only invest in 5 companies? That's consider pretty risky, but then, you sure have investments elsewhere, so it may not be.
2015-07-23 17:29
Mr KYY shld be commended for his good advice gained from experience, and I like his simple, straight forward methodology which makes easy for me to understand. I hope he continues but also for new kid like me, having limited cash, comment on penny stocks. Also Mr KYY continue your charity work, really admirable.
2015-07-23 19:13
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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....
timetokoon
So good twist and turn ka? Last time also wrote how to become super investor, pay 135.00 listen him koon you on JTiasa using margin financing. Now he said he never own plantation counters. http://klse.i3investor.com/blogs/koonyewyinblog/40359.jsp
2015-07-21 18:36