the bursa journey that worked for me. 2000-2019
Sharing investment journey of Ian Yoong - HNW private equity investor and his Stock PICKS
Philip ( buy what you understand)
Publish date: Sun, 17 May 2020, 01:11 PM
Hi all, Philip here.
I would like to share the advice and journey of an acquiantance that I met before in Sabah that is building a beach resort together with another friend of mine. His advice and lessons given in the youtube interview are things that I have also practised through the years. He and I slightly different views of investing and intrinsic value, but he is a very nice and friendly man to talk to. He is a true gentleman, soft spoken and not prone to showing off his wealth, but he has a deeply rational and disciplined mind, very useful when investing.
His results have also been very very good the past few years ever since he left investment banking to become a full time stock picker managing his own private equity. His core concepts of looking at investing in business first, instead of just buying stocks and accounting financials are very much what gave me my good long term returns in the market. As he is a much better talker than I am, I present his interview here.
For those who want the quick and easy, here is a summary of points that he shared that I think are important to capture for the young investor.
When trying to master investments, these are what to look for:
1. Management quality for the business
2. Debt levels/ Gearing levels
3. Scalability of business / Total Addresable Market
4. Competitive advantage aka "Moat".
5. Cash rich companies can never go Bust.
6. Buy companies with decent valuations compared to future earnings.
7. Avoid Value Traps
8. Be in touch with the market. Read at least 2 hours a day. (WB and CM reads at least 11 hours a day as a full time investor)
9. Ignore macro economics and concentrate on the business. (Being able to predict the weather is a wonderful, but a useless venture)
10. 10% of capital in short term trading, 90% for longer term investments.
11. Fear disruption.
12. Buy what you are familiar with.
13. Invest in people you can trust.
14. Be disciplined.
15. Make investing your passion, not money.
16. Make your mistakes early.
17. Don't be emotional.
18. Buy a fantastic company run by honest, capable guys.
19. Love the process of investing, not the results.
20. Track money as a scoreboard, not as a way of showing off.
Now, lets go into the breakdown piece by piece.
1. Management.
Buy a fantastic company run by honest, capable guys.
Invest in people you can trust.
He values having a good manager to work your business highly, I do too. How do you value management? Thriftness, hard work and a disciplined mind. The things that he brought up should be items that stand out when you look at management. Not the fancy cars, expensive clothes or high salaries. What should pop up in your mind are the things he brought up: How impressed he was with Koon Yew Yin after their China company trip, where he went back home to Perak via bus instead of a driver and chaffeur, or QL cheah, where during lunch he would go through the bill item by item and bring it up when it doesn't tally. These are guys who you want on your side, setting up QL, Mudajaya, IJM, Gamuda, Hartalega. You should be thinking about investing in the same way, instead of collecting stocks, you should be thinking of collecting wonderful managers and hardworking workers who help you grow your business. Once you have them on your side, you don't just dump them on the wayside or throw them away, you sit on them and ride their hardwork and success as far as you can.
2. Return on equity.
Debt levels/ Gearing levels
Cash rich companies can never go Bust.
Buy companies with decent valuations compared to future earnings.
When you look at business instead of stocks, you need to concentrate on one important factor. Think of it like a banker. If I borrowed you MYR100, how much can you make in a year from that MYR100? 10 ringgit? 20 ringgit? This is where ROE comes in. It has nothing to do with the share price and PE, but has everything to do with real life. Take for example his Hartalega, why is it valued so high? one average, every year for that MYR100 borrowed it to, they are earning 25 ringgit. That is an amazing return and growth for a long term period.
3. Finding a Moat.
Scalability of business / Total Addresable Market
Competitive advantage
Ignore macro economics and concentrate on the business.
First, ignore macro economics because it gives you noise and a lot of false positives/negatives. It would be like trading using SMA200. SMA50 and SMA100 all at the same time, giving you completely different signals. Being able to predict the weather is a very wonderful and useful thing. But trying to build your own satellites by hand and floating it around the world alone is an exercise in futility. Instead, you are better off finding the perfect cornfield in the best location possible, nearest to supermarket for delivery. In other words, find the competitive advantage. Here, one thing that I always think about and Ian puts it brilliantly, is how scalable the business is. Once you decide to concentrate on the business, try to find how they are doing things better than their competitors, and how efficiently they are growing and scaling their business up. Ian gave the example of glove stocks, where given the raw materials and location, it was easy to open 20 new factories, install hand former production lines, and grow the business output. In comparison, compare that to the F&B restaurant guy where the owner/chef has to work there 18 hours a day, and can't open another restaurant without a huge drop in quality.
4. Learn something New Every Day.
Be in touch with the market.
Buy what you are familiar with.
Make your mistakes early.
10% of capital in short term trading, 90% for longer term investments.
Fear disruption.
Don't be static, keep improving your knowledge every day. Ian Yoong reads at least 2 hours every day. Warren buffett and Charlie Munger reads 11 hours a day. Read financial reports, economic books, technology books, finance, science, read everything. You never know when it may come in handy in building your mental models of how things will perform over time. Don't be afraid of doing stupid things, just make your mistakes early and move on. If you wait until you are 55 to make a huge financial mistake, you may realize it is too late to return from it. Always be in touch with the market, the biggest danger is not the daily business, but the market disruptor that can creep up and change your entire business viability. Take for example businesses like film cameras which were killed when they introduced digital film, hotels when airbnb came into the picture and retail business when alibaba and amazon came in. Ian also proposes a little gambling just to learn new things, he puts in 10% of his capital into short term trading ( which rarely happens, but I also wrote about PPHB and STAR as short term opportunities that can give you some margin of safety above the volatility), the losses and such from such should provide a good guide to improving your 90% investments in longer term stocks.
5. Learn to be Rational
Avoid Value Traps
Be disciplined.
Make investing your passion, not money.
Don't be emotional.
Love the process of investing, not the results.
Track money as a scoreboard, not as a way of showing off.
The secret sauce to speak in making money from the stock markets is simply to be rational. Avoid being greedy or taking unnecesary risks in investing. Stick within your circle of competence, buy the stocks that you understand, businesses where the business model is clear to you, services that you have used, people that you trust. Don't go halfway around the world throwing tons of money into a company you barely know about. Understand that not all businesses have to grow, there is a terminal value to everything. Some value traps occur because the main shareholders dont want to let go their business fully to outsiders who want to slash workers and sell parts and distribute profit, others because the business is a good business but is not able to expand, so they keep it small and manageable. Learn to recognized these traits which is very unique to asian countries where families inherit businesses and positions more than western countries. Be disciplined in investing, make it your passion to invest and your goal to get it right and make a correct investing choice, rather than looking at how much money you can make. Don't be emotional either in losing money or making money. Fall in love and be passionate in the process of investing, not just the results and wealth that follows. Track money as a scoreboard for you to see how you perform versus benchmark, not as a way of showing off. Results need to be backdated versus the choices you didn't make just as much as the profits that you did make. It is no use making 25% in one year, when the broader market is making 80%, just as losing 25% in one year is a win, if the benchmark market is losing 80% of their wealth.
In the end, the stories and lessons are very similar. What is important is to practise rationality, and how you can turn of the greed/fear part of your brain when the pressure is highest.
Hope you learned something new today,
Philip
rylakk2016@gmail.com
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
11 people like this. Showing 50 of 59 comments
Philip ( buy what you understand)
Ok. Do you know Ian personally? Maybe you can email me your contact and I can arrange for us to meet up together after MCO for some drinks? I still have some unopened hibiki. He is a very funny guy, but very warm and nice.
2020-05-18 06:56
Philip ( buy what you understand)
What do you mean?
>>>>>>>>>
qqq33333333 The FED can't even leave Index stocks alone.........and everyone is a Bufalo man....they still say there is a free market.
17/05/2020 11:33 PM
2020-05-18 06:58
Good money Philip,
I think qqq3 mean the worst is yet to come. Market is cornered by government printing money to give away.
Read this: https://klse.i3investor.com/blogs/tradeview/2020-05-16-story-h1507063036-_Tradeview_2020_Why_is_KLCI_Bursa_Stock_Exchange_Trading_At_Record_High.jsp
2020-05-18 07:26
Philip ( buy what you understand)
Good money to you too.
Me and Ian both have the same concept, be aware of macro economics in industry but don't let it influence your selection of single companies.
Yes there is a lot of retail money in the market, but the fact is there will always be retail money in the market.
In the end it is always more important to select the best companies and choose the most efficient ones to invest in the future.
If you go search for diamond you will find trash. If you search in trash you can also find diamonds.
Find the excellent companies run by legendary managers, that is the best way forward.
If you can hire yourself a aragorn, legolas, gandalf, gimli etc, even if the horizon is dark, the captain of industry will lead you forward.
Famous managers in bursa,
Abdul Karim,
Dr cheah
Carl bek nielsen
Kuan Kam hon
Log boon siew
Teh teow ping
Koon poh keong
Jeffrey tan
Lim goh tong
Robert Kuok
Ananda krishnan
If you could get these people to work for you, get individuals with similar quality of character you could definitely get somewhere.
>>>>>>>>
Sslee Good money Philip,
I think qqq3 mean the worst is yet to come. Market is cornered by government printing money to give away.
Read this: https://klse.i3investor.com/blogs/tradeview/2020-05-16-story-h15070630...
18/05/2020 7:26 AM
2020-05-18 09:02
hot day for Philips.......
Top Glove down....OG up.....
Serba, Yinson, Pchem up
Dayang, Velesto, Carimin and Sapura up....
2020-05-18 10:06
Philip ( buy what you understand) > May 18, 2020 6:58 AM | Report Abuse
What do you mean?
>>>>>>>>>
qqq33333333 The FED can't even leave Index stocks alone.........and everyone is a Bufalo man....they still say there is a free market.
==========
just thinking aloud....is there such thing as a free market?
The Powell/ Trump put option.........
2020-05-18 10:10
that Ian, I don't know him at all....
u know him??
he just memorized Bufalo bible or not, only he knows.
people in public just like to use Bufalo bible........
2020-05-18 10:32
Haha qqq3,
You are wrong about Warren Buffett. He is busy selling stocks and grown its cash pile to $137 billion rather than make any “elephant-sized” acquisitions.
https://www.forbes.com/sites/sergeiklebnikov/2020/05/16/buffett-sells-stocks-goldman-sachs-no-elephant-sized-acquisition/#24676a26bbf9
2020-05-18 10:45
When China defended Hang Seng in 1997, the media takes out its knife...now, their own FED buys Index stocks, they all encourage......
Greenspan put option is favorable FED policies.
Powell put option is actually buying of corporate bonds and now, even Index shares........
2020-05-18 10:58
don't trust the Bufalo.......
The FED is buying up every thing that otherwise the Bufalo will be called upon......The Bufalo now very furious........
2020-05-18 11:00
and everyone holding shares tells people they are genius...........well....if the FED is on your side, you automatically become a genius.
2020-05-18 11:02
Philip ( buy what you understand)
hmm you dont know him? he was the CIMB senior VP for investment banking.
hiap teck independent director before, i think also for success and red sena.
But now definitely the independent chairman for KAB currently.
I thought you in the investment banking circle? he used to service KYY woh... you not in his account?
>>>>>>>>
qqq33333333 that Ian, I don't know him at all....
u know him??
2020-05-18 12:49
Buffalo got trapped waiting for cheap shares
He sold first means shorted his own shares
If US Govt buy up the shares to higher than his selling price.
Buffalo will need to wait longer or maybe never in the next few years
2020-05-18 12:55
Philip ( buy what you understand)
I think one lesson we need to get out of our mind is that we should get our own twist on local investment in bursa and not parrot warren buffett directly. The market is totally different, the options are different, the investing mindset is also different.
Unlike in US markets where companies are far more regulated in their financial reporting and far less likely to cheat investors directly (although some exceptions are spectacular), asian countries are far more lax and their laws are more less controlled and punished.
We have to exercise far more care in selecting our ivestments than usual, and as such pay a far higher premium than other bursaries. However, paying more for a company you understand beats dropping money in businesses in USA that you have no clue about and cannot understand efficiently.
We should find our own heroes and leaders, and Ian yoong is a very good example.
2020-05-18 13:19
Ian Young is a corporate man...Corporate man memorising Bufalo bible is not surprising........
2020-05-18 13:43
i3lurker > May 18, 2020 12:55 PM | Report Abuse
Buffalo got trapped waiting for cheap shares
=======
when FED buys up corporate bonds and even Index shares., no more cheap sales .....
But they still dare to say straight in your face, theirs is a free market.....
FED function used to be inflation and US$......now, extend to protecting shareholders..........if u are poor no shares, too bad....u are nobody.....
2020-05-18 13:48
I dun believe in BN propaganda
BN never stopped manufacturing heroes
manufacture Captains of Industry
manufacture Mount Everest Climbers
Manufacture Astronauts
all highly amusing except that it costs the Malaysian taxpayers few hundred billions already and bill is still climbing
from young age
I believed Mariah Carey that the hero lies inside you.
My interactions with normal people also shows that they dun hero worship people.
Pork sellers, wantan mee sellers, they all find it very amusing.
As far as these ground people are concerned, the hero lies inside them.
Buffalo, Ian Yoong whoever, is just another human being.
Not heroes as far as I am concerned
2020-05-18 13:50
ahbah > May 18, 2020 1:51 PM | Report Abuse
Better to get trappppp than to escape during the current BULL run !
=========
chase OG?
2020-05-18 13:52
Philip ( buy what you understand)
i dont understand this question.
>>>>>>>>
ahbah Better to get trappppp than to escape during the current BULL run !
18/05/2020 1:51 PM
2020-05-18 13:56
Do as I say, don't do as I do.
Does it apply to Ian Young ? I got no idea
but it does apply to the FED too.
2020-05-18 14:09
Posted by ahbah > May 18, 2020 1:58 PM | Report Abuse
Just imagine U got trappppp until now in glove counters some weeks back !
==========
I know...I was one of those trapped in Supermax for months and months.....
fortunes change fast.......
2020-05-18 14:11
Haha qqq3,
Remember what you wrote:
the only smart ones are those who sold all several weeks ago...never look back,....do not get tempted.........
I am not among those............
In theory that is what I should have done, told my self that before the mess, even write about it. Told friends I am prepared for all eventualities...........
But 1 or 2 weeks of negligence, all the good work done in last 2 years all gone.
19/03/2020 12:04 PM
Will history repeat itself?
2020-05-18 14:27
HNW is always xxx to be slaughtered by Private banks. Always apply 10-20bps in return. hehe. of course, you cant compare 250k vs Institutions of 250mil lah.
2020-05-18 14:32
People are jumpy
for the past few days,
I noticed that whenever I throw sell or buy even small amount of a hundred lots,
there are always undecided people who follow me to sell or buy immediately within few seconds
I find this tragic.
There is a great deal of FEAR in the market.
During normal times pre covid-19, whenever I throw or buy 100 lots nobody gives a damn.
coz nowadays pork seller few days earnings already more than 100 lots of shares.
Fear rules the market.
2020-05-18 14:40
The last days record volume in bursa.........
real economy people lost their jobs
people come here to gamble.
2020-05-18 15:46
hardly any thing can be called investments...
its Casino Royale.......
big or small?
2020-05-18 15:49
sslee
If u apply proactive, consistent, confidence
cannot make money from gloves...
u can go hide your self already..........
2020-05-18 15:54
what can u say about the turn around in OG sentiments?
Its all an illusion.....
but illusion more more important than facts and figures in moving prices..........
https://klse.i3investor.com/blogs/qqq33333333/2020-05-16-story-h1507063932-the_illusions_of_incomplete_information.jsp
2020-05-18 15:57
Philip ( buy what you understand)
Traders rarely see businesses as investments. Most of the time they see it as pieces of paper to be bought and sold.
But they rarely ride their winners and sell their losers.
>>>>>>>>>>
qqq33333333 hardly any thing can be called investments...
2020-05-18 15:59
for traders............money made from OG illusion is as real as money made from gloves facts and figures.
2020-05-18 16:38
Philip ( buy what you understand) > May 18, 2020 3:59 PM | Report Abuse
But they rarely ride their winners and sell their losers.
=======
sold my supermax at $ 3.80+......100% gain , rare treble digit gain....
2020-05-18 16:41
Philip ( buy what you understand)
I don't get it. If you have the time to show off on your results that you gain 100%, how come you don't have the time to maintain a proper trackable portfolio?
If I told you I bought topglove and multiple splits until I bought each share at rm1 with dividends each year and I sold everything last will at rm10, would it matter?
The process is far more important than the results.
If you show off your results without tracking your progress and process, it means absolutely nothing, you know.
You learn nothing, I learn nothing, and we wasted time on something that cannot be replicated consistently.
>>>>>>>>>
qqq33333333 Philip ( buy what you understand) > May 18, 2020 3:59 PM | Report Abuse
But they rarely ride their winners and sell their losers.
=======
sold my supermax at $ 3.80+......100% gain , rare treble digit gain....
18/05/2020 4:41 PM
2020-05-18 16:56
Philip ( buy what you understand) > May 18, 2020 4:56 PM | Report Abuse
I don't get it. If you have the time to show off on your results that you gain 100%, how come you don't have the time to maintain a proper trackable portfolio?
=========
I told already....Its a rare treble digit gain...U think everyday so good fortune meh?
anyway, I now got Serba and G Kent....two of yours.
Construction/ HSR play.....illusion also can lah.......
2020-05-18 16:58
market so bullish, play play lah..
bullish don't play, bearish only play?
2020-05-18 17:41
Mkt so very bullish, U close eye, throw a stone, also can hit a gold mine now !
2020-05-18 17:43
qqq, congratulations for your striking of the largest gold mine in the mkt in Supermax !
2020-05-18 17:46
Philip ( buy what you understand)
I am always amazed why brilliant investors with long IB history of recommending stocks that made millions for their clients are totally understand the radar while individuals like kcchongnz can go around selling stock pick services and e-books.
Fame is not a proxy for performance.
If only there was a way to track their performance and not their claims.
>>>>>>>>>>
Many governments require large investors to periodically report their holdings. These filings are public. One can compare reports between periods to see which stocks talented professionals bought.
In America, money managers with at least $100 million in assets under management are required to file a quarterly report that lists—with some exceptions—their U.S. stock holdings. Called a 13F, the report is due 45 days after the close of a quarter. They’re posted at www.sec.gov. Check midway through February, May, August, and November.
Mining 13Fs has many limitations. Understanding them helps to make the tactic work.
The first limitation is that one has to know which professionals are worth following. Outperforming mutual fund managers are easy to spot, since their track records are public and clear. But private fund managers may share their records only with clients. And professionals that run portfolios inside larger companies—even listed ones—may never detail their histories.
One can’t really know if a professional is worth following before seeing a track record. Fame is not a proxy for performance. I am routinely struck by the high profile of some perennial laggards, and the anonymity of some total stars.
2020-05-18 20:44
Post a Comment
Featured Posts
New Update. Discover investment communities that resonate with your ideas
Apps
Top Articles
2
Koon Yew Yin's Blog
3
4
5
Good Articles to Share
Slower US Fed pivot weakens rate-cut bets across emerging Asia
6
7
Good Articles to Share
8
Good Articles to Share
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
MQ Trading Signals
Stock
Time
Signal
Duration
Stock
Time
Signal
Duration
TWL HOLDINGS BERHAD - REDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS 2023/2028
2024-04-19 16:55:00
ADX
5 Mins
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
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....
PureBULL ...
https://klse.i3investor.com/blogs/purebull/2020-01-04-story-h1482032774-THE_BEST_JOB_International_FUND_Manager_Recruiter_PureBULL_Strategy.jsp
I promoted Ian in Jan 2020
2020-05-18 05:13