Koon Yew Yin's Blog
Willingness to learn from past mistakes - Koon Yew Yin
Koon Yew Yin
Publish date: Wed, 22 Jul 2015, 10:20 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
I refer to my previous posting under the title “Can You Become A Super Investor?” and I wish to elaborate Trait 3, quote ‘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 gloss 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 life’.
About 2 years ago I selected Jaya Tiasa and Mudajaya when the conditions were different. In retrospective I realise my mistake. Let me explain why I bought them.
Jaya Tiasa: I was so bullish on plantation counters at that time when crude palm oil price was increasing rapidly and I believe they had very good profit growth prospect. Moreover, Jaya Tiasa was and is so undervalued.
Jaya Tiasa has planted about 70, 000 ha which is worth at say Rm 25,000 per ha = RM 1.75 billion. The whole market capitalization is 973 million issued shares X Rm 1.50= Rm 1.45 billion only.
In addition the company has several palm oil mills and some vacant land suitable for planting more oil palm. They also have the right to extract timber from about one million acres of forest which can supply all the logs needed for their own plywood factories. They also export their logs to India, Taiwan and other countries. They are one of the largest if not the largest plywood producer in Malaysia. How can the share be selling so cheap?
The above demonstrates my costly mistake of selecting shares just based on net tangible asset value. Jaya Tiasa share price did not go up despite its actual net worth. You must remember that the company will not be selling some of its assets to distribute the sale proceeds to the shareholders.
Mudajaya: In the case of selecting Mudajaya, I was attracted by its good profit growth prospect in its shareholding of the Indian Joint Venture for generating electric power for sale to the Indian Authorities. The total cost for the coal fired power station was so huge that the Government had to arrange funding from a consortium of international banks. The banks must make sure that the contractor could produce the required electricity with a reasonable profit, otherwise, the banks would not be able to get back their money. The banks must be sure that the selling price of the electricity was profitable to the contractor.
I was so sure that Mudajaya would be able to make profit. But for some unforeseen reason, Mudajaya lost money instead of making money.
I realise that I cannot be 100% sure to make money in buying any stock. There is always some risk in share investment. When I posted my article about Jaya Tiasa and Mudajaya, I thought they were sure bets. Unfortunately I was wrong.
I always state at the end of my article that I am not responsible for your profit or loss. If you decide to buy or sell, you are doing at your own risk. Readers must always bear in mind that there is always some risk in buying any share.
Warren Buffet’s value investing principle cannot apply in Malaysia because we do not have well established companies like Coco Cola, McDonalds or Gillette Razor which have the competitive market advantage. As a result, they can produce consistently more profit and give out increasingly more dividend to the shareholders.
In Malaysia all our listed companies are young and they cannot afford to give out good dividend because they always need more money for expansion. As you know, there are several stock selection criteria such as NTA, EPS, Net Cash holding, profit reserve etc. You should not buy any share basing on its net tangible assets or it is undervalued because the company will not be selling its assets to give all the proceeds to the shareholders.
From my past mistakes, I learn that the most important stock selection criterion is profit growth prospect and EPS (Earning per share) is the most important catalyst for moving share price. That is why I bought VS, Latitude, Lii Hen and Poh Huat.
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Discussions
17 people like this. Showing 47 of 47 comments
Well uncle Koon, when u said mistake, now I am looking at mudajaya. They are selling all time low. With India project will easily back to 1.40, then slowly 2.00. When even founder also pessimist, I am now positive in its futures
2015-07-22 23:30
U know nothing, better don't pretend
We are not investing in mudajaya debt
2015-07-22 23:32
Good. Your admission of past mistakes in Jtiasa and Mudajaya is commendable.
But this is also your present mistake to say, "You should not buy any share based on its net tangible assets..."
Precisely due to Net Tangible Assets as a Margin of safety that Dr Neoh Soon Kean recommended Poh Huat & Latitude in his monthly digest years back.
Poh Huat was recommended at 40 cents with Net Tangible Assets of over Rm1.00 then.
I bought Poh Huat at 40 cents and sold it when price nearly doubled.
Latitude was only 90 cents with NTA over Rm1.50. Latitude was giving a nice 7% dividend then.
Others were recommended by Calvin Tan when these stocks were very unpopular but with high NTA
Minho at 17 cents with NTA over Rm2.00
KPS at 39 cents with NTA over Rm2.00
Perak Corp at 60 cents with NTA over Rm3.00
OKA at 35 cents with NTA over RM1.00
Muda at 32 cents with NTA over RM1.00
KFima at 32 cents with NTA over RM1.00
SBC Corp at 45 cents with NTA over RM2.00
KESM at Rm1.60 with NTA over Rm3.00
PM Corp at 9 cents with NTA over 50 cents
These ones only recently (Can check my postings in i3 Forum)
SUPER ENTERPRIZE at Rm1.20 with NTA over Rm2.00
JERASIA At 45 cents with NTA over RM1.00
Jaks at 39 cents with NTA over Rm1.00
Kheesan at 49 cents with NTA over Rm1.00
Poh Huat at Rm1.25 with NTA over Rm2.00
Ipmuda at 70 cents with NTA over Rm2.00 (Ipmuda went LIMIT UP!)
So who say that it is wrong to buy stocks with high NTA?
In fact let me warn you about chasing high flying stocks like Latitude, VS, Pohuat and others AFTER they have surged so much in price! To me you and OTB are both plying with fire now!
Last time even My Johor Sifu got burnt badly.
How?
My Johor Sifu is none the worst compared to our great stock Kcchongnz & champion momentum stock picker OTB.
My Johor Sifu is among the very best I know who picked PTaras at Rm1.40. AHealth at Rm1.20, KPJ, Oriental, PIE & many others Great Growth Stocks and made tens(hundred?) of millions. He is a student of the Great Champion Sifu Dr Neoh Soon Kean who picked MPI at Rm5.00 (It went up 1,000% to RM50.00 during dot.com 2,000)
Dr Neoh is a retired multi millioaire (billionaire?). You see TRULY RICH PEOPLE HIDE THEIR WEALTH (THEY NEVER BOAST)
Now coming back to my Johor Sifu.
He bought Kossan at Rm2.00.
Kossan is a powerful growth stock like Latitude & VS today. Kossan grew and grew because of aids epidemic, sars & bird flu outbreak.
So he bought more Kossan at Rm4.00 when it doubled in price!
As his millions and millions of profits piled up he became Overconfident. So he told everyone how good Kossan was! Then he bought more Kossan at Rm6.00 - near the very peak of euphoria. He was so elated on cloud nine!
Then what happened?
Lehman Brothers and Bear Stearn went Bankrupt. All Markets all over the world crashed in 2008. Kossan crashed more than 60% to Rm2.50 and less!
Calvin is now giving the warning!
Both Latitude, VS & Poh Huat are now in high flying zones like Kossan was before 2007/8 crisis! All have little NTA but only Growth. So there is little margin of safety.
See whether they can withstand a coming crisis?
Of course Calvin does not wish to see another crisis. But it is better to be safe than sorry. And never get carried away by greed.
Greed? Greed also sound like "grief".
We are now at a most dangerous time! Dr Marc Faber expects a crash anytime now.
So please be safe rather than sorry.
Return OF capital is now more important than return ON capital
Regards,
Calvin Tan Research
Jurong West Singapore
Singapore Time 9.15am July 23rd, 2015
2015-07-23 09:21
Weida? Give me a break! Loustmgt! One yr do plantation, another yr do property, another yr do dunno what funny things! Can't they just focus their head. Usemind to think and not dick head I wonder soemtimes
2015-07-23 09:40
SOP2
I also bought Weida at 35 cents years back with NTA of over Rm1.00. About the same time I also bought IQ Group at 35 cents with NTA of over Rm1.00
Yes paperplane is correct to say Weida made a mistake selling away their plantations when they just about to take off. You can go to Weida treads and scroll back to see my comments there.
Weida has already gone up a lot from from 35 cents just like Poh Huat up from 40 cents. I think Weida is more recession proof than Pohuat as it is into water & waste water business. It has also high NTA as a Margin of Safety.
2015-07-23 09:49
sop2
yes weida is a very conservative company like yspsah. See yspsah hovered for a very long time around rm1.00 giving a yearly dividend of 6%. Then one day yspsah finally took off. So just wait when Mr Market finally duscover Weida one fine day.
2015-07-23 10:18
Repcobuffet,
Insas? I bought Insas at over 50 cents and told some Johor buddies to buy some. After that Insas drifted to a low of 40 cents in 2013. A wearying 2 years of downtrend. After 2 disappointing years everyone had cut loss.
I was surprised to see Insas finally up 200% to over Rm1.20. Now it has retraced back to about 84 cents.
To me Insas is a value buy just like Mfcb, Ajiya, Weida unrecognised by the market. You have to keep longer term. Maybe years before all the value is finally uncovered.
There is a lot of value in Insas just like CMSB when it was rm2.20 with Nta of over Rm7.00 or OFI at 60 cents with NTA over Rm2.00.
As of now I don't have anymore Insas shares. I see lots of bargains emerging now in KLSE.
2015-07-24 00:43
calvintaneng, both of them (KYY and OTB) are not playing with fire. they have already locked on position silently before they "recommended" the stock... instead they have "noble intentions" of you joining them to "make profit" by chasing after the high flying stocks. if no buyers, how are they gonna unload off their stakes and take profit? after the saga is over, just come out and "apologize" for their mistake just like the Jayatiasa and Mudajaya saga. and throw in the tagline "i am not responsible for your lost or profit" and even harsher ones like calling those who disclose their "noble intentions" as "stupid" and "idiots"
2015-07-24 08:31
there are so many expect fund trader house out there.. with that kind of money. you can engaged them anytimes..
2015-07-24 08:41
skyz, everyone involved in stocks should be old enough to make their own decisions to buy or sell and think rationally without being influenced by anybody.
If you just merely follow after others then be prepare to lose and always remember if you want to follow the easy way out then you lose something in return. There is 2 type of people to follow,
one is where they just talk talk talk but no position and you follow them. Win or lose your problem.
two they add position first before posting that a buy call. Else others will claim they were the type 1 people. If they don't get to buy low why bother telling you their intentions so that you push up the stock and they end up unable to purchase it at the low price?
Or there is the 3rd type. People that buy losing trade and you follow without knowing.
True people might be selling when you purchase the stock that is why always check the dates of the posting. You cannot be expecting a stock to rise for 1 month and you enter a month after people posting buy call and end up still earning.
What i will say is always learn to do your own homework even when following others. Being lazy and just follow others without doing basic homework will end up costing you and nobody will pity you when that happens. They might just say sorry. So always invest at your own risk, it is your own decision and your own money.
2015-07-24 10:01
Warren Buffet’s value investing principle cannot apply in Malaysia because we do not have well established companies like Coco Cola, McDonalds or Gillette Razor ....the logic is not the companies are young , it was because we have different type of government, which pursues NEP,or its modified forms or whatever,companies need to keep low profile ,or else ..haha.
2015-07-24 10:47
checking the date of posting is never enough. everyone is for their ownself in the stock market. there is no such thing as "noble intentions" as per claimed by KYY here. makes me puke everytime i see this phrase.
2015-07-24 10:52
there is no need to doubt KYY's intention which could be very sincere in deed,the truth is nobody know everything , especislly about the future,which is a flux,keep changing complexity
2015-07-24 11:18
i am too lazy to type so much. I wasn't only saying checking date of posting, no need to specifically find fault on my definitions. In short i was saying do your own homework before making decisions and don't blame others when trade gone against you. Its always easy to put the blame on others when making losses and thus you will not learn from your mistake because they are not your mistake but the mistake of the guy you follow.
2015-07-24 11:20
Be it noble intentions or hidden agenda, if you done your part then have no regrets and learn to improve on it. Sometimes the tuition fee you paid for is just merely trivial compare to the knowledge you gain that will help you in the coming years of trade. Its only human to make mistake but its inhuman to place the mistake onto others.
2015-07-24 11:24
once being bullish on plantations was not wrong,but KYY failed to realise the changing competative scenario in agriculture sector, the new player is Indonesia which massively enlarged her planting acreage,production almost going to duoble; as compare to malaysia, thus created a largely oversupply situation, globally speaking , so price have to fall , no so profitable as such, unless the scenario change again,
2015-07-24 11:33
When you start to learn from mistake, that mistake become experience for you instead of a mistake.Priceless experience that somebody cant understand , feel and steal from you.
2015-07-24 11:44
I strongly recommended HIL (now 0.77), next year 2016 Jul...let see what the price will be? I wish it can reach 1.54...double from now...my way of stock selection :)
2015-07-24 11:52
.
High NTA is a MIRAGE.............
Agree with Mr k.....
Mr k learned a hard lesson
The above demonstrates my costly mistake of selecting shares just based on net tangible asset value.
Jaya Tiasa
.............. The above demonstrates my costly mistake of selecting shares just based on net tangible asset value. Jaya Tiasa share price did not go up despite its actual net worth. You must remember that the company will not be selling some of its assets to distribute the sale proceeds to the shareholders.
r°Moi This is a clear warning to those who have a fetish on companies with prices with deep discounts to their NTAs
This is as close as you can get to the high RNTA... and see what is happening...
10/06/2015 11:50
.
2015-07-24 12:05
.
Mr Koon.. now that you have admitted you are human after all and have made mistakes.. can you kindly share how badly you were burnt by Jaya Tiasa and Mudajaya... how many millions lost?? how costly the lessons??
It is a bit sadistic I know.. but seeing you brunt will go a long way to appease a lot of people... especially murali
So.. do tell..
.
2015-07-24 13:17
THIS CUNNING PERSON IS TRYING TO GET BACK HIS POPULARITY ON I3 SITE..DOING A SNAKE DANCE
2015-07-24 13:30
I truly admire your pragmatic attitude in reviewing your past mistakes. The same approach shall apply to everyone of us. After all, past mistakes are mother of future success!
However, I do disagree with your opinion that Buffet`s value investing cannot apply here! Your past mistakes mentioned above rooted from your lacking in comprehensive understanding in "core competency" in that industries. Without that, you won't be able to uncover the hidden risks on the financial figures. That's is the foundation in value investing.
Just my humble opinion.
2015-07-24 14:31
one who follow blindly, and lost money, he himself is to be blamed , not others.KYY did not advertised or claimed himself as great investment guru, he just shares own past experiences, and past mistakes, so that we can learn from them,identified the flaws ,and not to repeat them.
2015-07-24 14:32
"I realise that I cannot be 100% sure to make money in buying any stock. There is always some risk in share investment. When I posted my article about Jaya Tiasa and Mudajaya, I thought they were sure bets. Unfortunately I was wrong."
Still recommend buying with OPM? Sure win also turn out to be beaten.
Not so savvy please don't buy with OPM.
Play safe. Think of your family.
Invest up to the level that you can afford to lose.
Do't always think you can sure win...........
2015-07-24 16:13
i just cannot understand why this Mr K keep on coming to i3 site?????? what are his hidden motives??
2015-07-24 16:21
yes, his hidden motives are his "noble intentions". and his famous sentence of "i do not need the public to push the price up". well, he might be true in tat sentence, but if you wanna sell when the harvest is ripe, you need to look for buyers. this a fact of trading. so where to look for buyers? here la! there are always newbies who follow blindly without doing their homework and cross checking. after all, he always reiterate the infamous "trade at your own risk, i am not responsible for your profit and gain". true enough, you have done all to protect yourself legally and mask ur "noble intentions" fairly well ethically.
2015-07-24 16:52
what is the real hidden motive of this johnny cash, unwilling to learn from mistakes of the past?
2015-07-24 18:01
Nestle, BAT and Dutch Lady are testament of value investing in Malaysia . Special mention has to be given to Digi. Long terms shareholders of these companies are reaping consistent returns in the form of capital gains and dividend.
Business like investing can improve your stock returns.
2015-07-24 22:37
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Quote from: iiinvestsmart on Today at 08:04:55 AM
Looks like Koon Yew Yin is still learning.
The truth is one is ALWAYS learning.
The most important thing in investing is to minimise risk.
Risk is minimised when you have a big margin of safety.
Warren Buffett learned this from Benjamin Graham.
He added another layer to this, by buying great companies.
Thus, Buffett looks for qualitative margin of safety and quantitative margin of safety.
Value investing is simple but not easy.
Rather than dismissing Buffett's philosophy, one should study its application.
Yes, there are companies that you can invest into very rewardingly using Buffett's philosophy in Bursa over the long term.
Yes, it's true there are not so many great companies in Bursa available to park your money long term.
I counted less than 20 in the Bursa which has slightly more than 1000 stocks.
Your ability to find these and to acquire them at fair or bargain price, promises a reasonable return on your investments over the long term.
These great companies have earnings power(durable competitive advantage).
How many of them do you need? Perhaps, 5 to 10 companies in your portfolio.
You should buy and hold them for the long term.
Yes, I hear your shouts too that buy and hold for the long term is dead!
Ensure that your portfolio of stocks carry very low risk with potential high return.
Rebalance your portfolio using my sell strategies.
Only replace the stock if you can find another to replace with >50% margin of safety than your existing stocks.
At certain high market periods, parking money in cash is sensible as the risk is low and the reward better than the overpriced other asset classes.
Buy and hold long term refers more to sticking to your investing philosophy, strategy and your portfolio of stocks long term,
It does not refer to holding onto your individual stocks long term and forever; as these maybe replaced and rebought over times to minimise the risk and optimise the reward of your portfolio over the long term.
Let us revise the followings:
4 filters of Buffett and Munger
1. Understand the business
2. Business with durable competitive advantage
3. Management with integrity
4. Buy at fair or bargain price (margin of safety)
Adopt these simple portfolio management emotional guides:
1. Sell the losers. (High risk low return)
2. Hold the winners. (Low risk high return)
3. Do not over trade (be a sloth)
4. Be patient (do not FOMO). (Fear of missing out)
RAIDER Comment;
Is it true....Mr Koon thinks there are not many high quality stock....he is going for company....with increasing earnings & with momentum right now is a correct approach ?
Raider say yes & no loh......!!
Most of Mr Koon investment.....is based on a theme loh....& it must a flavor by the market....!!
Like....Jtiasa he bought bcos palmoil at that time going is great for cpo.....!!
Mudajaya......bcos of the power plant projects & the investment community like loh...!!
Recent buy....is export orientated company like vs, poh huat, li hen & latitude.... with growth of earnings loh....!!
Also the share here.....had move ahead mah......!!
Raider think it is a good strategy......but this success will be short term & could not be sustained loh....!!
But who cares ? If u already make more than 100% leh ?
Yes raider....agree....but it is time to take profit, instead of continue buying loh.....!!
The above stock has no longer sufficient margin of safety, as the share price move ahead of valuation....!!
Raider do agree....Mr Koon recent focus on growth in earnings in order to buy...is a correct strategy loh....!!
But if it move....far above fundamental.....it is time to sell loh....!!
These companies selected are commodity based type of business and does not have a business moat....!!
--------------------------------------------------------------------------------
2015-07-25 08:34
Don't you think every time he recommended stocks, those stocks already gone way beyond fundamental? And he makes ppl chasing price up?
2015-07-27 22:22
Also, with his funds coupled with others, don't you think he is the only one pushing up higher and higher? This can be very fun when MKT hot like bull MKT! Ppl keep chasing higher and higher! This will end up in situation like those stupid hedge fund!! They r the only one buying end of the day and no one to offloads! When offloads, share will lao shi! Look at all the previous recommended stocks! All now lao shi still not recovered! Why? No one actually buying so much! Unless the company really growing where other fund mgrs buying also, then only it can be successfully off loaded!
Thus think tht stock prices went up not due to his brilliant picks, but rather his power of pushing up prices due to low circulation in share outstanding!
2015-07-27 22:27
So when Koon openly talk abt shares, u know it is a warning sign! Let ppl chase up, you offload!
2015-07-27 22:28
I remember someone said why bother to answer and share all knowledge here as claimed to be from ones wife? Today my wife asked me why bother waste time reading an old billionaire comments? Since you yourself a billionaire?
2015-07-27 23:27
Hi Mr Koon, thank you for sharing your experience with us. I would like to ask how can we judge whether a company has good profit growth prospects in the future?
2015-08-05 13:44
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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....
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Yes, we all made mistakes
In stock market, the only constant is change
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2015-07-22 22:30