the bursa journey that worked for me. 2000-2019
How to invest for the long game, without losing your shoes.
Philip ( buy what you understand)
Publish date: Fri, 04 Jan 2019, 05:42 PM
Before I start, let me set the stage:
https://youtu.be/Qm0jktMIYlk
Watch this. Its means so much to me after watching it recently.
Now, let me introduce myself. My name is Philip, and I have been investing in bursa since the 90s. This will be my first and only blog, and the reason I wrote this is so I can share how investing has worked for me, and how I hope it can help the fellow readers on this forum.
Now, investing in stocks is not easy. But neither does it require complex mathematical algebra. However when I first started investing, it was through how the majority of you came into investing. By reading the word of the sage of omaha. Reading about benjamin graham, walter schloss, philip fisher, george soros, charlie munger etc.
I was enamoured by the idea that you can double your investment in 6 months with little work. So I started buying warrants, forex, penny stocks. All burned and turn to dust. There was always some winners, mixed in with losers. And as I chased the losers with even more money, i started losing even more.
Then I started reading on the concept of value investing. Wow it was such a eye opening investment philosophy!
MARGIN OF SAFETY.
This was brilliant. I learned so much after reading the intelligent investor and security analysis. I started to read through every single stock in bursa and ace market. If you can believe it, there was a moody's type manual for bursa malaysia stocks which i bought in MPH which listed all the local stocks and the 5 year history and its prospects. I read every stock trying to find a deal. Back then I couldnt find screeners for PE,ROE,PB, gearing, so I had to calculate it myself.
Wow I had so much fun. I was ready I thought. I can do this! If you asked me then, I could spout every single share price for every single stock that mattered. I was 方展博 in the tvb series 大時代, and I could do no wrong!
I borrowed money from some friends and family and to invest into value (or so I thought). In went all my hard earned money into Aokam Perdana, Ekran bhd, and most obviously "undervalued" Renong bhd. The unrealized value ended up... forever unrealized. When khazanah took UEM private and cancelled the 3.2 billion option in 2001, I thought to myself, bursa malaysia stocks are just such crooks. Especially when Teh Pek Khiing owes me 400 million until today.
Those of you who are old hands in investing would know what I mean. those who are too young to understand malaysia investing history lesson, all I can say is:
INVESTING IN BURSA IS VERY DIFFERENT FROM NYSE & NASDAQ.
Anyway, I lost friends, made the inlaws angry and swore to give up "investing" in malaysia markets. this was around year 2000+, right after the dotcom crash. Worse time to be investing your hard earned money.
I was in the market in 1997 during the asian financial crisis.
I was in the 2001 during the dotcom crisis when our government burned their hands playing dotcom stocks
What do I do now? Run to TAIWAN to plot my comeback? Not exactly.
I put my head down, worked my ass off as an engineer in remote Sabah, took every extra overtime available, earned my paycheck, paid back every single cent to all my friends and family, and saved my money in the ASB account of my technicians and friends (at 10% p.a why not )
Then I ran into boilermech in 2005 and QL in 2006. And topglove in 2007. Working as a mechanical engineer, you get to be in the brunt of manufacturing processes, and you realize who was the good paymasters that everyone wantedf to work with and a view to increase capacity. And I started thinking about MOATS.
All this time, I still kept Reading, probalby investing again.
Especially on Phillip fisher and Warren buffet, who were making tons of money on the stock market. But hand burned twice, how do I find the guts to invest again?
Loss once on trading signals, call options and put options. Technical trading.bleagh!
Loss second time on value investing, with value that remained forever unrealized due to syndicates. cigar butts! bleagh!
But this time I thought, lets try again.
This time:
MARGIN OF SAFETY. MOAT. GROWTH. QUALITY OF MANAGEMENT. BUSINESS PERFORMANCE.
I started thinking of stocks as not just pieces of paper, but as a part owner in a moving piece of machinery known as a business. I thought that if I mixed in all the things I learned before or thought I knew about, but added in the main importance of companies with a MOAT first and foremost, I might be able get different results.
Problem is, what is a MOAT in bursa?
Thinking about it long and hard, I found the perfect simple equation. My additional personal screener other than PE, PB, ROIC, DEBT etc etc etc.
MOAT = (growth of revenue + growth of earnings - sacrifice of shareholder value) * XX number of years.
what is the sacrifice of shareholder value? Anytime a company takes on more outside debt to grow its revenues and earnings, the shareholder value is damaged. Anytime a company dilutes shares to buy companies or gives out dividend, it dilutes shareholder value. (trust me this happens every single time, a company that gives out high dividends usually end up in a bad position). when a company gives out share options? it damages shareholder value.
However in the end, its all about ratios. I would rather have 1% of a 1 billion growing dollar company, than 50% of a 2 dollar company worth 10 dollars.
SO, what happened next?
Problem was, I realized if I used my moat concept to find stocks that I liked, I ended up with the same conclusions in bursa.
Wonderful companies always come at a premium with high PE
Wonderful companies are never startups or penny stocks or newfangled complicated companies
Wonderful companies always seemed to be... boring.
But I had to try something new, otherwise I'd go crazy. I managed to save up 180K in bonuses, OT and ASB dividends over my 8 years that I was going to buy a house with.
BUT LETS DO STOCKS INSTEAD!
With a heavy misgiving heart, I tried buying into expensive premium companies with wonderful growth at high prices (PE28+), but this time I would concentrate on GOOD BUSINESSES. But how do I protect my own shareholder value?
I just decided to take care of myself and invest in things within my CIRCLE OF COMPETENCE. I'm into manufacturing you see. So by looking into the best market leaders in my circle of competence and adding in the technical and fundamental analysis from there I came up with 2 names.
QL RESOURCES BHD
TOPGLOVE
Now, I must admit, when you see the QL director himself Mr Chia be at the site 1 hour before you wake up, you become very respectful and clear about the quality of management. And so after chinese new year of 2009 after company bonus when I bought RM200K worth of QL stock.
Yes, I was that confident with it. I believed that their capex (which I had just commissioned) would bring more revenue and earnings. And I firmly believed that the quality of management and their busines efficency would build a moat that would last 10 years.
I was right (fwueh!). When I made 500K in 2010, I took margin loan and put another 500K into TOPGLOVE. And ever since then I have used every quarter to top up as long as the growth prospects never changed.
For my joint account with my then newly married wife (and forgiven father in law), I decided to buy into public bank (she was a manager there). Both for the same reason.
MOAT. PB held the best quality deposits from all the east and west malaysia chinese companies and taukehs, which they used to give out loans to those same rich taukehs. And current accounts that you had to pay money for the privleedge to put money in? free money for investments! perfect quality of management.
MY ADVICE FOR THE FUTURE
Today I own around 2m shares in QL, after the share split I own around the same amount in TOPGLOVE. I also have a 500K share position in Public Bank, and have now built up recently a 600K share position in YINSON. Those are my only stocks. And I welcome anyone to come read this article 5-10 years from now. I may have sold the shares, but chances are, looking at the trend now, the long game still hasnt changed.
If you are a new investor to bursa, my advise is not to buy anything that is beyond your circle of competence. there are a few thousand stocks in bursa. But only a few will be gems.
You will never double your money in a month. Or if you do you wont be able to keep it for a year.
Dont try to mess around with warrants if you dont know the mother well enough.
If you cant have a good understanding of the business prospects currently, read until you can have a good guess on how it will do 5-10 years from now.
Listen to the management, attend the agm. Know who is managing your company. they matter.
Never buy 28 companies and put it in your portfolio. Its something I did when I was young, and I regret it to this day.
Dont believe anyone who tells you to look at charts for double VV and swallow tail and signals to buy. One thing I have learned, those chartist always seem right, until they are wrong. If you ask them if their recommendations and charts work 100% of the time? they will never say yes. If you ask a value investor if all his value plays and low PE work out? he will never say yes. But one thing I can guarantee you, if the company revenue and earning keep increasing year after year, and shareholder value is kept? the share price is guaranteed to increase. GUARANTEED.
SUMMARY
In the end, I remembered why people started a stock exchange. The whole point of it was a contractual basis between the person who started the business to give a share of his company profits and earnings and growth to the shareholders who would be patient enough to wait for the founder to deliver. In the old days, you could never daytrade, and any orders required you to call the remisier who would have to hop down to the exchange to buy your company share certificates for you.
As long as you stick to the basics. You will do fine.
Have a happy 2019,
Phillip
More articles on the bursa journey that worked for me. 2000-2019
THE GROWTH STOCK OF THE FUTURE - HOW TO INVEST IN MALAYSIA
Created by Philip ( buy what you understand) | Dec 07, 2022
(Philip) 3rd & 4th Quarterly Report for The Borneo Bikers Gang
Created by Philip ( buy what you understand) | Mar 02, 2020
2019 2nd Quarter Report for the BORNEO BIKERS GANG - Part 1 & 2
Created by Philip ( buy what you understand) | Jun 30, 2019
Does technical analysis really work? Discussion.
Created by Philip ( buy what you understand) | May 20, 2019
Discussions
15 people like this. Showing 50 of 184 comments
headline news.....Apple plunge deepens Warren Buffett's book value woes
when Buffett loses, they call it book value woes.....when I lose money, it is called losses........
2019-01-05 16:15
Yinson dulu 2nd board johor truck company,in 2007 I bought at 1.50,50,000 my average price is 1.00,everyday volumeless until 1 day I sold at 50cts only.from that day the price never fell below 49cts after I sold. if hold until now maybe worth more than 1 mil
2019-01-05 16:16
American dream,land of opportunity....apple sudah almost bankrupt in the 80's also can make a comeback,trump bankrupt how many times also can make a comeback,which msian stock can be like that?
2019-01-05 16:27
American got talent winner get USD 1 mil,asian got talent winner only get USD 100k
2019-01-05 16:30
Apple...very funny....those Apple shareholders now only know about China problems meh?
I already got whatsapp message weeks ago about boycotts of Apple phones....Those carrying iphones in China better hide theirs ever since they kidnap the Huawei girl....SOEs telling employees, no salary increase , no bonus if caught carrying iphones....Love the Chinese unity , don't you?
2019-01-05 16:32
Oracle of Omaha....reporters can only say book value woes....dare not say....Oracle no more, just another bufalo......
2019-01-05 16:36
Posted by i3lurker > Jan 5, 2019 04:45 PM | Report Abuse
I also believe WB was immediately aware that he made a bad investment in Apple. He could not do anything coz he just bought too much
========
like KYY and jaks?
2019-01-05 16:52
Last August, Buffett told CNBC that he was not focusing on iPhone "sales in the next quarter or the next year," adding that he liked Apple because there are "hundreds millions of people who practically live their lives" by the iPhone.
See, WB is not "trading" AAPL. He is gonna long it for like >10 years. So probably he doesn't care unless Apple bankrupt?
2019-01-05 16:52
Haiz.. WB where know these tech trend la..
Report said WB first invested in AAPL in early 2016, that's around $100. In 2 years he almost gained 100%. Isn't he a pro trader also? kiki
2019-01-05 17:11
within 3 years...Amazon phones or Google phones will steal the market away....even in America
outside america, its all Chinese phones and Samsung.
2019-01-05 17:16
WB isn't investing for monetary gains. He just buys the companies he loves and keeps it permanently if everything is well. Not like he needs money to fund Rolls-Royce, mansion, birds kind of things.
2019-01-05 17:17
No one can replace Steve Jobs.. There isn't anyone in Apple bold enough to create an alien product and bet it win or bust. Every executive just plays safe and earns their millions every year!
2019-01-05 17:20
singin a bit kindergarten peberet song
One, two,
Buckle my shoe;
Three, four,
Knock at the door;
Five, six,
Pick up sticks;
Seven, eight,
Lay them straight:
Nine, ten,
A big fat hen;
2019-01-05 18:12
You have my utmost respect for your grit, honesty, perseverance and willingness to share your experience Mr Philip.
2019-01-05 22:34
THE WAY THIS QQQ HAS DESCRIBE IS IF HAS NO BUSINESS SENSE LOH...!
I remember this qqq mentioned, the samething similiar what he says on jaks when it was rm 1.70 and sendai when it was rm 1.30, but today it is far less than few months ago & it turn out to be a big disaster if u check the price today loh...!!
Bj Graham always say ,u buy with big undervaluation & cheap as it has big margin of safety & u sell to Mr Market when he is optimistic offering to buy at an overvalue price mah...!!
As Per Bj Graham Principle
If it is established this insas is highly undervalue, means that it has high margin of safety that means buy mah...!!
On the otherhand if QL is trading at PE 50x with dividend yield less than 0.50% pa, which means overvalue, u should sell to Mr Market without regret loh....!!
Thats why raider see qqq call, most of time is lousy bcos he do not follow the right proper business sense convention mah...!!
His approach is basing on greater fool theory loh...!!
Posted by qqq3 > Jan 5, 2019 10:41 PM | Report Abuse
eddy888
139 posts
Posted by eddy888 > Jan 5, 2019 01:39 PM | Report Abuse
I totally agree INSAS is under value & QL is overpriced. If anyone insist to buy or hold QL, you will cry once market index drop to 1500. But your money & you manage the risk. Good luck.
2019-01-05 23:29
Congratulations on your success and thanks for sharing.
Just some thoughts:
The supply-demand dynamics of top glove’s products may finally turn one day, having had such a good long run, leading to declining profits due to oversupply.
But QL is more prone to re-valuation to half its current price. Still, the share price of QL is miraculously resilient. Many came up to comment critically especially on QL but none suggested short-selling it. That would be interesting.
So, some caution may be in order. Extremely high PE may not be necessarily indicative of unshakable moats all the time.
2019-01-06 02:01
there is no scenario that Insas can outperform the market....let alone out perform QL......
value traps....I think every beginner have to go through that stage.....what u think?
as for this raider....experience no help for raider...10 years experience for others is 1 year experience X 10 for raider.
2019-01-06 06:05
You can park your cash in bonds for the short term but to be in bonds for the long term is going to be less rewarding for those knowledgeable in equities.
2019-01-06 08:18
>>>
Blog: Fundamental Analysis versus Phillip Fisher’s Business Sense: A case of Inari Vs QL
Jan 6, 2019 08:52 AM | Report Abuse
Dear Mr. Phillip,
I quote on Nov 27, 2018 11:47 AM: “When you hold 1 million shares ( after buying for 10 years, share split, steadily up year after year), then you realize kids like 4444 know nothing about business.”
Jan 5, 2019 11:03 PM “To be perfectly honest, the bulk of my 2m shares in QL was bought from 2009-2016, I have benefited greatly from share split since then. As such, I am not here to tell you to buy QL or recommend you to buy QL or any stock whatsoever.”
Jan 6, 2019 08:15 AM “Just to prove my point,
I bought QL in 2009 - 2m shares
I bought TOPGLOV in 2010 - 2m shares
I bought YINSON in 2012 - 600k shares
I bought public bank with me, wife and father in law money in 2012 - 500k shares
I am definitely not a one trick sailang pony. Just someone who sticks to his circle of competence. I am not a gambler or emotional person. I started working as engineer with 2k salary, now is 7k almost retiring at 60.” <<<
2019-01-06 13:08
I am not a gambler or emotional person. I started working as engineer with 2k salary, now is 7k almost retiring at 60.”
Fm RM200K+ in 2009 to RM20m plus in 2018 no donation no bank robbings no lottery no rich dad
We finally found GOD in I3
2019-01-06 13:11
Some said he could be qqq3's son who work as an Analyst in PB who then conspired with qqq3 to promote JAKS to KYY?
2019-01-06 13:18
very likely...he chicken out saying say last messages etc...after i suspected he is the son of qqq3...
when sslee makes blog to dispute someone..u start smelling something
Posted by CharlesT > Jan 6, 2019 01:18 PM | Report Abuse
Some said he could be qqq3's son who work as an Analyst in PB who then conspired with qqq3 to promote JAKS to KYY?
2019-01-06 13:51
THIS MESSAGE IS DIRECTED TO MR LONG AS WELL AS 3iii,
There is many way to skin a cat & make monies mah....don be so naive and arrogant as if your way is the only way to make monies mah...!!
Posted by 3iii > Jan 6, 2019 01:56 PM | Report Abuse
>> Posted by 10154899906070843 > Jan 5, 2019 11:03 PM | Report Abuse
I appreciate your gesture sslee. I'll try to give you some further insight on my investment basis as that was how I bought into QL 2009, TOPGLOV 2010, YINSON 2013. And more importantly, how I am still holding onto the shares and adding more today, Even while everyone else started selling far too early.
To be perfectly honest, the bulk of my 2m shares in QL was bought from 2009-2016, I have benefited greatly from share split since then. As such, I am not here to tell you to buy QL or recommend you to buy QL or any stock whatsoever.
That decision is up to you.
All I am presenting to you is the fact that there is a far better way to invest for the long term. When I bought QL in 2009, it was pe28. Inari pe before the cliff drop was around 30. Amazon for a very long time was pe100+. Google, apple, Berkshire all have high PE.
Why? The reason is because investors a willing to pay a premium for a wonderful company. And the reason they are willing to do that is because they get REWARDED.
So my advice is. These are my criteria in stock selection in particular order:
1. Scuttlebutt. Story first and foremost. What is the competitive advantage. How accurately can you identify the business growth will be 10 years from now.
2. Valuation and fundamental analysis on intrinsic value second. Always take this with a pinch of salt, as those figures can change drastically. Books can be cooked. Companies can restate their financial results it not even submit them.
3. Technical analysis on when to buy. Personally I don't worry on this one too much anymore. Timing doesn't really matter much if your expected holding period is 10 years or more.
If you pay peanuts, you'll eventually get bitten by the monkey.
Buy quality. Cheap people get cheap results.<<
2019-01-06 14:06
y probability > Jan 6, 2019 01:51 PM | Report Abuse
very likely...he chicken out saying say last messages etc...after i suspected he is the son of qqq3...
==
probability....u really very char...no wonder u always gets every thing wrong......
2019-01-06 14:23
by stockraider > Jan 6, 2019 02:06 PM | Report Abuse
THIS MESSAGE IS DIRECTED TO MR LONG AS WELL AS 3iii,
========
me? I think long's way is the normal way most people can use the stock market to make a real difference, a big improvement in their lives. Long is a big hitter.....for big hitters, no better advise than..........Buy quality. Cheap people get cheap results.
and raid....you and your Insas....I guess every beginner goes through the stage of value traps like this Insas.....but for raider 10 years experience is 1 year X 10......
2019-01-06 14:29
I think my insas is much better than your jaks loh...!!
Posted by qqq3 > Jan 6, 2019 02:28 PM | Report Abuse
by stockraider > Jan 6, 2019 02:06 PM | Report Abuse
THIS MESSAGE IS DIRECTED TO MR LONG AS WELL AS 3iii,
========
me? I think long's way is the normal most people can use the stock market to make a real difference, a big improvement in their lives. Long is a big hitter.....for big hitters, no better advise than..........Buy quality. Cheap people get cheap results.
and raid....you and your Insas....I guess every beginner goes through the stage of value traps like this Insas.....but for raider 10 years experience is 1 year X 10......
2019-01-06 14:30
stockraider > Jan 6, 2019 02:30 PM | Report Abuse
I think my insas is much better than your jaks loh...!!
==========
I am a trader....To me, the only thing that is important is price movement in next 12 months...actually 3 months will see result.....
2019-01-06 14:34
Then why u never buy currymee leh..one week also can see the result if u follow sifu otb
2019-01-06 14:36
U made few cents fm supermax oredi so excited like striking jackpot n telling the whole world...if u follow to buy currymee.....
2019-01-06 14:39
Reading back I just noticed what appoloang said about buying into ql in 2001 and yinson when it was just a trucking company in JB.
I wouldn't have bought those stocks in those days either, you wouldn't have known if it would sink or swim. But buying later, how did I know how to keep investing in the stock?
Thinking back on this fact you really have to ask yourself when should you buy a stock? The secret was very simple and outlined in Peter lunch book one over wall Street which is very easy to grasp.
You shouldn't be buying a a stock when it is cheap. You should buy it when it starts to see success, and you learn about it's growth prospects and when it gains a business advantage over it's competitors. You buy it during its stable growth phase.
You don't buy stock which is recommended by friends and strangers or things you like. You should get it after careful consideration of is business prospects, company financials and upcoming prospects.
Then you hold on for the ride.
2019-01-30 17:40
Good article to read for most people here. However, this statement here from you puzzles me,
""what is the sacrifice of shareholder value? Anytime a company takes on more outside debt to grow its revenues and earnings, the shareholder value is damaged. Anytime a company dilutes shares to buy companies or gives out dividend, it dilutes shareholder value. (trust me this happens every single time, a company that gives out high dividends usually end up in a bad position)""
Especially the last one.
1) Taking more outside debt sacrifice shareholder value? If return from borrowings great than the costs, it can't be right. This I believe is a typing error from you.
2) A company gives out high dividend usually end up in bad position? A bad position because share price drops? Are we talking about just capital gain, or dividend return is just unimportant and not part of the total return?
I have written a few articles on stocks on high dividends; Padini, Sciientex, Perstima, Uchitech in the links below,
https://klse.i3investor.com/blogs/kcchongnz/62058.jsp
https://klse.i3investor.com/blogs/kcchongnz/128386.jsp
Uchitech in the first link has been a multi-bagger after considering all the dividends and bonus shares although its growth is not worth mentioned about.
In the second link, the total price appreciation is still 60% after 2 years, while the broad market is down by 1.6%, after taking into considerations of dividends.
I have written about many stocks of high dividend yield, and on the whole, they outperform the broad market by a wide margin too.
Most of these companies still grow, but they just need a small portion of its profit to grow because of their high return on capitals, and the rest return to shareholders, to do what they like.
2019-04-19 13:42
(US/CHN trade war doesn't matter) Philip
Sorry for the late reply, a return follow up on my opinions.
I also term outside debt as rights issue, iculs, warrants, esos, basically anything that ties back to net profit per share in the long run. If return is greater than costs than obviously it is a good thing in the long run. However, borrowing costs are a fixed liability, while returns can be inconclusive.
2), imagine a company giving out 80% of its net profits as dividends. Where then would it be 5-10 years from now? How would it compete against is peers if it no longer has the means to defend itself? If Apple, Amazon, Google, Alibaba, even Uber and grab had started with a huge dividend policy, do you think they would have had a commanding position that is a monopoly on its own?
It is the age old question, do you have the cookie now? Or 2 cookies tomorrow.
>>>>>>>>>>>>>
1) Taking more outside debt sacrifice shareholder value? If return from borrowings great than the costs, it can't be right. This I believe is a typing error from you.
2) A company gives out high dividend usually end up in bad position? A bad position because share price drops? Are we talking about just capital gain, or dividend return is just unimportant and not part of the total return?
2019-06-25 07:35
Read this on 31st May 2020. Damned!! I just found a humble-Malaysian-living-legend-investor. Thank you for sharing. :)
2020-05-31 08:04
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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....
qqq3
out of the 10% balance, close to 9% is held by market operators and balance of less than 1% by retailers
really meh? if true....we are all just churning the same 1% and see who live who die......
2019-01-05 16:10