Koon Yew Yin's Blog
How can I make so much money from the stock market? Koon Yew Yin
Koon Yew Yin
Publish date: Wed, 07 Oct 2015, 12:03 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
Since the publication of my Rm 50 million donation to the Penang State Government to build student hostels to help the poor students, many people wrote or telephoned to ask for financial help and many wanted to know how I managed to make so much money from the stock market to help the poor students. They all want to know my secret formula.
After I read investment books by Warren Buffet, Benjamin Graham, Peter Lynch and other investment gurus and with my 32 years of experience, I have formulated a simple way to select shares that I am sure of making money. I cannot lose money if I buy shares following my simple golden rule.
My golden rule for share selection:
It is that the company whose share I want to buy must be able to make more profit this year than last year because when it announces its annual increased profit, the share price will surely go up. By looking at the last few quarterly results, I can estimate whether the company can make more profit this year than last year.
I am only willing to buy the share if it is selling at a P/E of less than 10. I may buy it at a higher P/E if the company is the famous or leader of its industrial group and many financial institutions are holding the share.
There are many share selection criteria such as NTA, Cash flow, return of equity etc. I consider the earning per share (EPS) is the most important. It is the most powerful catalyst to move share price. When its EPS goes up the share price will also go up.
For a start, you must think like a businessman. Since the value of our Ringgit is dropping, I want to find export manufacturers that sell their products in US$. I do not think like an accountant, worrying about cash flow, too much borrowing etc. As a businessman, I know you need more loan to do more business and it takes time to manufacture the products and it takes time to deliver the products. Moreover, most buyers will not pay cash. They want delay payment of 60-90 days. As a result, the company account will show increased borrowing and poor cash flow.
How to use margin finance?
I also use margin finance to buy more shares to make more profit. As my shares go up in price, I can increase my borrowing to buy more shares. I dare to use margin finance because I am confident that I can make more than the interest of 4.8% pa I need to pay.
When to sell?
I will only sell any of my holdings when I am not sure that it can make more profit this year than last year. If I am sure it can make more profit this year than last year, I will not sell because I am sure its price will go up when it announces increased profit.
NOTE: Readers must check all their holdings to make sure that the companies can make more profit this year than last year.
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Discussions
18 people like this. Showing 31 of 31 comments
also, the criteria mentioned above, XINGQUAN, JTIASA all these stocks are not doing well. I wonder why?
In investment, you need to look at FCF closely, so is businessmen!
You need to make sure for company survive.........luckily I listen my sifu advise to look into FCF, ignore most others.....
2015-10-07 14:03
Koon yew yin is back after his mudajaya , jtiasa goes down ..he still make money
2015-10-07 15:02
to win big, u must dare to bet BIG.
If u find gem, do u dare to bet big?If the answer is 'no', then forever u can never win big.
2015-10-07 15:52
I find people that says millionaires can make money than normal investors because they have millions is the most dumb thing ever heard.
2015-10-07 16:22
Agree with you JT Yeo. The person who say so will never reach the same level as the millionaire does, because they are finding reasons and excuses.
2015-10-07 16:59
Dear Mr.Koon, a million thanks for your sharing of your secret. It is very helpful for a young investor like me. Your noble sentiments of being generous and selfless is worthy for respect.
2015-10-07 17:07
Dear Mr.Koon, you are intelligent investor consider the P/E,NTA, Cash flow, return of equity etc. But i like cash rich company and consider Debt Ratio ( i worry the economics situation /sentiment now)
2015-10-07 18:48
If you have the financial muscle and willing to gamble, you can be a good driver when market is on your side.
Unfortunately, many drivers drove their buses down the ravine in bad market, just like John Soh.
2015-10-07 20:13
DEAR MR.KOON, WITH MALAYSIA'S PARTICIPATION IN THE TPP DEAL, WHAT WOULD BE THE REACTION OF THE STOCK MARKET.
2015-10-07 20:32
I disagree with the use of MARGIN FINANCE because even the wise unable to predict the stock market!
2015-10-07 21:33
every now and then we are reminded of how philanthropic KYY is and his "NOBLE" intentions....
2015-10-08 08:33
this is just the book cover , there is more than meets the eye , transform and roll out.
2015-10-08 08:43
I am only willing to buy the share if it is selling at a P/E of less than 10.
2015-10-08 11:48
Ramaraajen Arumugam, how about Xinguan? Last time Mr Koon favorite counter. Now PE only 1.2x
2015-10-08 12:30
Arumugam buy chinese stocks lah................ all PE below 10!!!!!!!!!
2015-10-08 13:10
Dear Ramaraajen arumugam... Low PE is Better( For me like Mr Koon sey PE<10)... meaning The P/E ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns RM2 a share per year, and the stock is traded at $30, the P/E ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.
In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a companys earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower-P/E stocks are more attractive than higher P/E stocks so long as the P/E ratio is positive. Also for stocks with the same P/E ratio, the one with faster growth business is more attractive.
If a company loses money, the P/E ratio becomes mearningless.
08/10/2015 14:33
2015-10-08 14:35
Dear Kuanyee Saw,
For opinion Teoseng good for long term not shorterm depend your goal.Fundemental still undervalue stock still trade PE <10, EV/Ebitda < 8, IV=RM2.90, PEG <1,but EPS Growth <15%, have risk=Cash to Debt Ratio=0.51(more Debt than cash),D/E =0.5(Looking last year financial statement Geographical Information 70% revenue from Malaysia, loss on foreign exchange, Market sentiment+GST).TA good if break 1.7(resistant) Trade is your on risk.
2015-10-08 18:53
Margin financing?..investing?...
APA kulop in?...kaya SBB main stock?...uncle kencinglah
2015-10-09 00:52
Thanks for the sharing Mr Koon... Appreciates so much. We need more people like you sharing experience and knowledge...
2015-10-10 13:50
The problem is, how many of us can be so sure like him that a company will make more money than before? If everyone can foresee the future with 100 percent accuracy, I really believe there will be no poor man in the world.
2015-10-10 23:50
Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier, far riskier investments, than widely diversified stock portfolios, that are bought overtime and that are owned in a manner invoking token fees and commissions. That lesson has not customarily taught in business schools, where volatility is almost universally used as a proxy for risk. Though this irrational assumption makes for easy teaching, it is dead wrong. Volatility is far from synonymous with risk. Popular formulas that equate the two terms lead students, investors and CEO astray. 'BRK' annual letter to shareholders.
2015-10-31 12:02
Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market. Be fearful when others are greedy, and be greedy only when others are fearful.
2015-10-31 12:07
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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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well..........If you have billion of funds, easy to push low liquidity shares.
2015-10-07 14:01