*****
JAKS-My Most Expensive Mistake
Koon Yew Yin 8 Dec 2018
I have been looking at the price chart of Jaks and when I saw the price began to move upwards in January 2017, I started buying at about Rm 1.10 per share. I was so excited when I read the following announcements by Jaks:
1 On 22 March 2018 placed out 50.7 million shares at Rm 1.39 per share and on 16 March 2017, 43.9 million shares at about Rm 1.40 per share.
2 On 13 June 2018 Ang Lam Poah, the CEO bought 50,000 shares, on 12 June 2018 bought 200,000 shares and on 8 June 2018 bought 550,000 shares from the open market at about Rm 1.40 per share.
The main objective for buying so many shares by the CEO Mr Ang Lam Poah and all the institutional buyers of the placement shares must be Jaks’ JV with the Chinese companies to construct the 1,200 MW power plant to sell electricity to the Vietnamese Government. The 3 Chinese National Banks must have studied the power purchase agreement before they were prepared to finance Rm 7.76 billion for the project.
During the construction, the Chinese pay Rm 454 million to Jaks and this sum of money is to be used as capital for owning 30% of the Joint venture. Moreover, the Chinese would undertake the construction of the power plant.
It is like the Chinese Banks is giving a profit guarantee to all the Jaks shareholders every year for 25 years when the JV sell electricity to the Vietnamese Government.
Based on the above, the share price should go above the share placement price of Rm 1.40 when the 1,200 MW power plant is completed in 2020.
My wife started to accumulate more shares and we finally bought a total of about 160 million shares with margin financing. We bought too many shares with margin finance. Our average price should be about Rm 1.20 per share.
If you look at the price chart, you can see the price went up to Rm 1.85 in Feb 2018 and when I saw it started to drop, we started selling. I should have sold more to avoid force selling. It was my greed that I did not sell more shares.
In fact, forced selling was a blessing in disguise for us.
We had to sell to meet margin calls. The more we sold the more the price would drop. Forced selling is a vicious cycle.
We were fortunate introspectively to have sold a huge amount of our holdings at higher prices in comparation with the current price of 50 sen per share. We have completely sold all our holdings.
Based on our average selling price of 80 sen, our average purchase price of Rm 1.20 per share and our total holdings of 160 million shares, we have lost Rm 64 million. Coincidently this is the 64 million $ question many people have asked me.
This is my most expensive lesson in my life.
I believe I can make back some money using my golden rule for selecting shares- the company must report increasing profit for 2 consecutive quarters.
Sad to say that Jaks does not comply with my golden rule anymore because it has too much borrowings to finance its properties during the current depressed market. Jaks will continue to report losses in the next 2 or 3 years until the completion of the power plant.
Life has many challenges, don’t give up because life also has many solutions.
The sun is a daily reminder that we too can rise again from the darkness.
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Discussions
1 person likes this. Showing 50 of 91 comments
I hope uncle Kyy does not try or even dream to recover his RM 64 mil loss.You are ady 85 yo uncle.Time is running out.Spend your remaining time wisely.Market is against you now.
Before 2018 even ah lian can sailang n win a merc but now 2019 is approaching.To quote a prominent future inmate of sungai buloh luxury resort " CASH IS KING ".
2018-12-08 21:24
Do more for the poor students.You will be rewarded in the after life uncle.
2018-12-08 21:26
Wah y u look down on unkle koon? He lost 64m in 1 year he can easily make back in the next year. Just need to leverage kaokao that's all.
2018-12-08 21:28
Hahaha,altho i do not agree with Kyy antics,i m not the type to step on one who is down,somemore an old man.
2018-12-08 21:30
I hope the profit he made in 2015 still can cover for this big loss.
This big loss can be avoided if he is not so arrogant to listen to his advisers.
There are advisers told him not to touch Jaks, he refused to listen and insisted to proceed.
The profit made from Power plant construction is not real profit, it is just paper profit used to payback investment in Power plant.
No physical cash taken out from this construction work.
Want to buy Jaks, wait until power plant is completed.
Are you sure power plant can be completed in time ?
Jaks is famous for not complete work in time in all Malaysian projects.
2018-12-08 21:40
Still need to thanks Uncle KYY for sincerely shared his jak experience. In investment there is always up and down .
2018-12-08 22:47
100 million capital invest in good dividend counter, easily can earn 4~5 million yearly...
Uncle Koon can use the money to create a fund to collect dividend, every year easily can give more than 50 scholarships out for poor students...
The fund keep rolling and help more people...
2018-12-08 23:59
Nevermind, uncle. Just sapu Hibiscus since this counter matched your golden rule — increasing profit for 2 consecutive quarters.
2018-12-09 00:02
Dear all,
Article on how to make sure win decision must read if you wish to “huat –huat” in your stock investment year 2019.
https://klse.i3investor.com/blogs/Sslee_blog/185816.jsp
Thank you
2018-12-09 00:31
Me, me, me!
Uncle Koon, I can manage your money for free, and provide profit guarantee of 200%. That means if i lose RM10 i will pay you RM20 for your opportunity cost.
You know, nowadays competition is keen!
Lol
2018-12-09 00:47
KYY’s strategies:
1. His Golden Rule for stock selection.
2. His Business Sense approach.
3. His willingness to use Margins to maximise his upsides.
In the latest saga of his Jaks experience, will he or should he modify his present strategies?
2018-12-09 08:48
I m more interested to see what will be his next most undervalued stock after jaks...
Dont jump out to promote hibiscus ah....just came back fm holland (jaks) n now wanna go holland again ah???
2018-12-09 08:51
High ego n the artificial self proclaimed superinvetors status with real half past 6 investment skills
2018-12-09 09:13
his own mistake of putting too many eggs in the same basket. So much capital why not diversified?? How smart can he be?
2018-12-09 09:54
Thanks for the lesson learned shared by uncle KYY. I guess everyone who invest in stock also have their lesson learned. Cut loss is one of important lesson in stock investing.
Investing in stock is also like doing business as well. There is no 100% successful rate. But once one get the right stock, one just need to stick to it irregardless of what other people says. The truth will reveal itself once all the street news settle. Be positive and brave !!
2018-12-09 10:18
To be a good trader,one must think of how one can exit ones posn even before buying a single stock.To me KYY does not qualify even as an average trader.
2018-12-09 10:31
Koon lost kali ini bukan sebab IPP but sebab xda yg trust Koon lagi to ikut beli chase high for Koon to sell
Koon modus operandi dah cannot use lagi nobody trust lagi x kira apa pun counter yg Koon beli next
Posted by CharlesT > Dec 9, 2018 08:51 AM | Report Abuse
I m more interested to see what will be his next most undervalued stock after jaks...
Dont jump out to promote hibiscus ah....just came back fm holland (jaks) n now wanna go holland again ah???
2018-12-09 11:26
Cannot be so high lah...1.40 average cost...he started to buy in fm 1.00+ i think
Should b rm60m to rm70m+ plus margin interest another rm8m to rm10m
2018-12-09 11:46
Koon mula beli below 1.00 Sarifah quite sure sebab Sarifah first time beli 1.03 after some time after Koon
Before Koon xda yg beli Jaks so Koon beli klau x salah Sarifah abt 0.7+ je
2018-12-09 12:11
To sum up on Jaks exercise:
Jaks is a stock selected by KYY to goreng with him as the operator with intention to make big monies but it turnout a big failure due to poor stock fundamental and poor mkt condition.
LESSON LEARN ' U CANNOT CHEAT PEOPLE ALL THE TIME'
2018-12-09 12:40
Good lesson for raider : You cannot fool people all the time. This rubbish of Hengyuan going to $42 and that you will be buying and holding forever ... what a dishonest person indeed.
2018-12-09 13:09
How many time raider need to tell u at one time hengyuan really got the potential to go Rm 42.00 ??
It just that unfortunately the fundamental of hengyuan collapse mah, just like ur Padini loh...!!
If that happen, must lari kuat kuat loh...!!
Posted by 3iii > Dec 9, 2018 01:09 PM | Report Abuse
Good lesson for raider : You cannot fool people all the time. This rubbish of Hengyuan going to $42 and that you will be buying and holding forever ... what a dishonest person indeed.
2018-12-09 13:13
At one time jaks got potenrial to touch rm2.00 in 2020..unfortunately koon laosai so is the price..
2018-12-09 13:33
Yes indeed KYY is doing it mah....!!
It just that KYY had too much of Jaks....not easy to lari kuat kuat fast when needed loh....!!
Lessons : Don over buy.....even u have big confidence loh...!!
Risk manage with : What if scenario loh ?
Posted by CharlesT > Dec 9, 2018 01:32 PM | Report Abuse
Can koon borrow yr above excuses for jaks?
Need to pay u copyrights?
2018-12-09 13:36
From my calculations, KYY biggest lost is Xinquan. Most of us got fooled by Xinquan which allegedly had an audited net cash of more than one billion and fixed assets of the same amount with NTA over Rm2.
2018-12-09 13:47
not he got fooled in xinquan, he deceived his ownself. First time kena tipu, with red flags shown, maybe can say is mistake but many times in same counter,
2018-12-09 17:26
by warren buntut > Dec 9, 2018 05:23 PM | Report Abuse
kyy just a gambler lar. share invest he where know.
======
can last until old as your grandfather .....that surely counts.
2018-12-09 17:26
this actually happened to most ppl, is how should i say, when u lose a lot of money, u refused to believe, self denial, whatever decision will be bias.
2018-12-09 17:27
Yeap...when u lost too much u tend to fool yrself..self denial or kind of self protection mechanism
2018-12-09 17:29
u people counting his losses....KYY sending me pictures of his celebrations.......
2018-12-09 17:49
Feng Tse Ling is like Warren Bufet, the boss of the company welcome him to buy and hold the company shares. But for KYY, most bosses hate him rather than welcome him, because he buy the share for short term and would dump it any time.
2018-12-09 17:51
Luckily i controlled my temptation to buy JAKS no matter how sweet and convicing blog write up
2018-12-10 12:33
elder cat kyy now holding a lot cash $$$ after cutloss jaks, i wonder what's his new target.... anyone?
2018-12-10 16:43
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wah ah cat, if lose how?
2018-12-08 21:04