Author: Koon Yew Yin | Publish date: Sat, 13 Aug 2016, 09:19 AM
NOTE: I have purposely revised this lecture in an attempt to change the mentality of so many ordinary investors and traders.
This is my prepared lecture for the Investment Forum jointly organised by both LOGON ecommerce and sinchew online.
Date and Time: 19th Aug 2016 at 9.30 am to 5pm. There will be a few speakers and my turn to speak is at 3.00 pm.
Venue: The Grand Ballroom, The Place @ One City, USJ.
If you are interested to attend you need to go to the link and register at :http://www.logon.my/20162.html.
Or contact Lenny Chiah of Sin Chew or MCIL Multimedia Sdn Bhd. 03-79658888
Introduction:
After my retirement in 1983 as an executive director of IJM Corporation Bhd which I was one of the founders, I started investing in the Hong Kong stock market when the market crashed. The Hang Seng index went below 1000 and HSBC was selling below HK$10 per share because China wanted to take back the sovereignty of Hong Kong . As soon as China granted extension, the market rebounded. Within 2 years, I managed to make so much money that I bought up 46% of Kaiser Stocks and Shares Ltd. a HK stock broking company.
The above is a lesson of a contrarian investor, buy when people are afraid and sell when people are bullish.
Value Growth Investing:
After having studied all the investment philosophies of Benjamin Graham, Peter Lynch and Warren Buffet, I started investing seriously. All the investment Gurus were preaching Value growth investing which I consider is safe but too slow to make money. For example, currently there are many undervalued property companies in Malaysia. It is safe to buy them but you have to wait a long time before the property share prices go up again.
When you buy any share, you expect to gain from dividend and appreciation of share price. As most Malaysian companies are young, most of them do not give out more dividend than bank interest rate. You have to depend on the price appreciation to make money.
The most important stock selection criteria:
There are many criteria such as NTA, healthy accounts with cash deposit, cash flow, dividend yield and earning per share (EPS).
EPS is the most powerful catalyst to move share price.
Golden Rule: After many years of experience, I have formulated my stock selection golden rule. I must make sure the company can make more money this year than last year and the projected P/E is less than 10, before I buy the share, because when the company announces a better profit the share price will go up. The reason I buy at P/E 10 is to avoid any unforeseen weakness that I have not checked.
By looking at the EPS in the last 1 or 2 quarters, I can estimate its annual profit. Do not buy if you are not sure it can make more profit in the current year than last year because when the annual result shows a reduced profit, the price will surely drop.
When I see the quarterly profit is improving I will buy more shares even at higher prices using margin finance.
But many ordinary investors and small minded traders would sell to take profit. They would say that profit is not a bad word and they would back at higher prices when the company continues to show increasing quarterly profit.
Invest like a businessman:
I must understand the business of the company before I consider to buy its shares. I do not worry too much about the audited accounts because it is a recorded history of the company. I look at the current quarterly result to estimate its future profit growth prospect. The future may not be so clear and straight forward but I am willing to take some risk.
Do not invest like an accountant
Statistics show that most Accountants and fund managers cannot beat the stock market index. They worry too much on the audited accounts which is a historical record. When they see the company has increased borrowing, they are worried. But as a businessman, I consider it a natural thing to borrow more money to do more business. Bear in mind that the company needs more money to buy raw materials, more machineries etc. Moreover, more borrowing will be required due the delay in getting payment because it take time for packaging, shipping and long payment terms usually 90 days.
Not to be discouraged:
Accountants should not be discouraged when I said accountants cannot be super investors. On average accountants will earn more than average investors.
How to become a Super Investor?
Most of you can achieve average performance but very few of you can be super investors. Studies by investment psychologists have shown that your brain have to be wired at birth differently to be able to achieve above average profit. You must be able to react differently and you do not follow the general public. You must be a contrarian. You buy when everybody is afraid and sell when everybody is buying as if tomorrow is too late to buy.
I do not think you can be trained to be a contrarian if your brain is not wired differently at birth.
It is easy to say that I can. The test of the pudding is in the eating. Did you buy some of the cheap shares when the stock market crashed in the few occasions? Or you were selling like most people?
How to use margin financing to leverage your profit?
You should use margin loan to buy more shares if you are confident that you can make money than the interest you pay. The current interest rate is only 4.8% pa. When the prices of your holdings are appreciating, your collateral value will increase and you can buy more shares.
When to sell?
I will sell some when I see reducing profit in one quarter to reduce margin loan. I will sell more aggressively when I see reducing profit in 2 consecutive quarters.
Do not sell prematurely:
3 people can buy the same share at the same time and even at the same price, each of them can get different result.
!. A small trader will sell when its share price goes up by 10-20%.
2. Most ordinary and small minded investors will sell when its price goes up by about 50% to take profit. They will not buy back at a higher price when the company announces increased profit.
3. A super investor will not sell if the company continues to make more and more profit. In fact he will borrow more money to buy more shares.
Why should you sell if the company continues to make increasing quarterly profit? That is how I became a substantial shareholder of Latitude Tree, VS Industry and Lii Hen. All of them went up more than 200% per year.
Good Example:
Many people have asked me whether you should sell Lii Hen since it has gone up more than 500% in the last 2 years?
Has Lii Hen not shown reduced profit in 2 consecutive quarters? It has been showing increasing profit in the last 10 quarters. Even it shows reduced profit for one quarter you should not sell because its products may be seasonal.
Moreover, its last quarter's EPS was more than 11 sen and the share is selling around Rm 3.08. It is cash rich!.
I have written to the Board of directors to consider warrant issues in their next meeting on 19th Aug 2016.
I am obliged to tell you that this is my largest investment.
This reminds me of Latitude and VS when they were shooting up.
You must ask yourselves why did you sell so early? Did you buy Lii Hen?
If you have bought Lii Hen and sold, will you buy back at higher price than what you sold?
Are you just like any ordinary trader? You just want to wait for its correction to buy back. What happens if it continues to go up higher and the correction price is higher than the price you sold ?
The benefit of Share placement:
Many investors would feel cheated when the company places out 10% of the total issued shares at a 10% discount of the 5 day average price. They naturally think that their shareholdings are being diluted.
But they must consider that the company has expanded by 10% and has received a large amount of cash which can be used to reduce borrowing and also expand their business.
Moreover, the financial institutions who bought the placement shares will support the share price.
IJM Corporation has been doing that frequently and as a result the company can expand very rapidly.
Conclusion: I have used my golden rule to buy Latitude Tree, VS Industry and Lii Hen in recent years and became a substantial shareholder, owning more than 5% of the total issued shares of each company.
Latitude went up 800% with 26 months, VS went up 550% within 18 months and Lii Hen has gone 500% within 24 months.
All the readers must check their holdings to see if they comply with my share selection golden rule to avoid losing money.
More articles on Koon Yew Yin's Blog >>
Created by calvintaneng | Jul 15, 2024
Created by calvintaneng | Jul 12, 2024
Created by calvintaneng | Jul 10, 2024
Posted by buddyinvest > Aug 13, 2016 12:30 PM | Report Abuse
6k
Yes buddyinvest,
By 2017 & 2018 CPO price will perform exceptionally well.
2016-08-13 12:34
Anyway for those who wanna hv koon koon's latest tips,u dont hv to waste yr money n time to attend this seminar on fri.koon koon is likely to promote gamuda-we n gadang....save yr money...if wanna thank me buy me roti canai will do.
2016-08-13 13:26
No murali, no ill intention but genuine care and concern for all young and inexperienced traders and investors in i3 forum. I am here to offer help to all and to hurt no one.
2016-08-13 13:28
http://klse.i3investor.com/servlets/pfs/54015.jsp
Self proclaimed Super Investor's result for his buy calls during early 2016...20% winning rates
2016-08-13 14:12
Malaysia has given birth to many successful money makers (like Mr. N and Mr.KYY)...due to majorities stupidity...desire to support crooks for self interests...and short term gains...
no matter how blatantly the proves - facts is laid down in front of them - like what Murali just presented...they will continue to survive..
we can only hope these older generation genes will be wiped out soon with time...
2016-08-13 15:26
Need to clarify a bit...if u follow his buy calls yr winning rates is only 20%...but his actual winning rate under sifu since 2014 could be as high as 100%...he n sifu bought low low quietly n then koon koon comes out to promote n do the killings...
2016-08-13 15:37
Envy?jealous?wanna join the winning team?dont want to be their water fish n forced to donate indirectly? Pass rm5 million to sifu n let him manage....
2016-08-13 15:39
What? U dun hv rm5 million????? Buy cpteh free coffee n free lunch n learn from him in preparing to face market crash.....n then everyday pray 3-5 times...prepare to do it for months n years.....n when it finally happens then u can make big money n celebrate with cpteh...dont forget to kiss him too
2016-08-13 15:42
I talk cock?dude,koon koon made his first barrel of gold fm hong kong stock market during 1987/1988 (i think) when it dropped badly due to the news that china would claim back hk from british...the rest is history..
2016-08-13 15:47
once one had learnt about investing...perhaps truly understood whats happening...they may soon realize the greatest form of investment is 'teaching others'....
with fees or without fees...the return is simply superb...as nothing works as good as the 'ultimate catalyst' = information release to the public.....i.e speculation.
2016-08-13 15:47
Stock market is almost like an ATM machine. There's no shortage of newbies supply joining the market. Money keeps flowing into stock market either directly from retailers or indirectly through funds. If Uncle Koon has migrated, there's a new one will take over his seat. This kind of money game won't stop with or without him.
2016-08-13 20:31
Posted by westinee > Aug 13, 2016 09:11 PM | Report Abuse
pamelo Juice (fortunebull, why run down Calvin. What happened to your Hibiscus ?
Posted by Pamelo Juice > Aug 13, 2016 08:15 PM | Report Abuse
Well, Calvin is a special one! He has 100% off track record! Yet he is ever optimistic of his none existence successful pick!
Calvin replies,
Thank you Westinee. Pamelo Juice has a warped mentality by not seeing the truth.
These stocks I picked have gone up 200% in their course if he would really bother to investigate carefully - Super Enterprize, Pohuat (Power HUat), SILK & JAKS Resources
These gone up 100% - MyEg, Supermax, Jerasia, Pm Corp, Ipmuda (went limit up!), Ajiya.
These 3 taken private (Super for 200% gain), (Kulim for 60% profit) & (TMakmur for 30% upside) Others garnered 30% to 80% profits - Kpscb, Wangzhng, NTPM, Kheesan & others.
Only the blind cannot see & also those with "Something" wrong
See
calvintaneng
11424 posts
Posted by calvintaneng > Oct 16, 2013 09:55 AM | Report Abuse X
Ladies and Gentlemen,
Before leaving for Iskandar, I want to share with you a story.
One morning, Johnny the student, walked to School. As he walked by a flowering bush he saw a bumble bee in a flower. So Johnny caught the bee, put it into a match box and placed it in his trouser's pocket.
In Class while the Teacher was giving her lessons, the bumble escaped out of the box but still wriggling in Johnny's pocket. At that Johnny felt very uneasy and restless.
The Teacher noticed Johnny and said, "Johnny, Sit Still". For a while Johnny tried to sit still, but the bee stung Johnny. And poor Johnny now could not sit still. The Teacher again blurted out, "Johnny, "Didn't I Tell You To Sit Still?"
At that Johnny replied, "I KNOW TEACHER, BUT THERE IS SOMETHING DOWN HERE THAT YOU KNOW NOTHING ABOUT!!!"
All good people are reasonable. If you find someone unreasonable, there must be something wrong with him that we don't know.
In simple maths we know that one plus one equals to two. If someone were to dispute 1+1 = 2.
and say differently, then there is really nothing further to talk about.
2016-08-13 21:55
HI all sifu include calvintaneng , silom , casperl and up and down
I have a qusetion and wish to learn, hope any sifu here if free can teach me ?
I find out a very curious question about dayang call warrant :
let see below :
KLSE : DAYANG-CT
0.025 +0.015 (150.00%) ;
KLSE : DAYANG-CU
0.025 -0.125 (83.33%) ,( NEGATIVE)
KLSE : DAYANG-CV
0.025 +0.01 (66.67%)
KLSE : DAYANG-CW
0.015 +0.005 (50.00%)
hi sifu , I wonder why yesterday all dayang anak-anank all flying
only DAYANG-CU -83%
And after i COMPARE actually DAYANG-CU more valueable than DAYANG-CT
And I also find out DAYANG-CU always no volume one ?
guys can explain what happen to DAYANG-CU, is this no longer exist or people not aware?
thanks , very thanks for your guys please help me find out can ah
2016-08-16 20:16
buddyinvest
6k
2016-08-13 12:30