THE INVESTMENT APPROACH OF CALVIN TAN
MASTERING THE CYCLICALS: MAKING THE ODDs IN YOUR FAVOUR, HOWARD MARKS, Calvin comments
calvintaneng
Publish date: Thu, 20 Jun 2019, 08:10 PM
calvintaneng
0 1,859
Hi Guys,
I have An Investment Approach I which I would like to all.
I have An Investment Approach I which I would like to all.
Hi guys
I finally get to read Howard Marks MASTERING THE CYCLICALS recently
Let me give you a gist of his thoughts
Howard Marks say
Suppose that there are both black and white balls in a Jar
And you are told to pick some at random
Say 10 balls
Now if there are equal amount of white and black balls then the chances of picking a white ball or black ball is only 50%/50% chance
BUT IF YOU HAPPEN TO KNOW THIS
KNOW WHAT?
TO KNOW THAT INSIDE THE JAR THE WHITE BALLS ARE 70% AND THE BLACK BALLS ONLY 30%
AHA!
NOW YOU KNOW THE ADVANTAGE OF CHOOSING WHITE BALLS OVER BLACK BALLS HAS AN EDGE
OF COURSE BY BAD LUCK A PERSON COULD STILL PICK MORE BLACK BALLS THAN WHITE BALLS EVEN THOUGH WHITE BALLS ARE 70% COMPARED TO BLACK BALLS ONLY 30%
IN THIS CASE HE HAS BAD LUCK
BUT STATITICS WILL SHOW OVER A VERY LONG LONG TIME IF WE CHOOSE TO PICK ONLY WHITE BALLS OVER BLACK BALLS WE WILL STILL COME OUT THE WINNER
AS WHITE BALLS ARE 70% AND BLACK BALLS ONLY 30%
RANDOM SHORT TERM MAY NOT SHOW. BUT RANDOM OVER A VERY LONG PERIOD PICKING WHITE BALLS WILL MAKE THE ODDS IN OUR FAVOUR
SO THAT IS HOW HOWARD MARKS APPLY THIS TO STOCK PICKING
BY THE WAY HOWARD MARKS IS NOW A BILLIONAIRE ( EVEN SIFU WARREN BUFFET LOOKS FORWARD TO RECEIVE HOWARD MARKS INVESTMENT NEWS LETTER IN HIS MAIL. HE OPENS HOWARD MARKS LETTER FIRST AMONG MANY OTHERS
NOW THIS YEAR HAS BEEN A VERY VERY EXCELLENT YEAR FOR CALVIN
WHY?
ANSWER:
BECAUSE BY FOLLOWING HOWARD MARKS - MAKING THE ODDs IN OUR FAVOUR WE PICKED OIL AND GAS COUNTERS
THE ODDS FAVOUR OIL AND GAS STOCKS BECAUSE OF THESE 4 REASONS
1) BRENT CRUDE OIL AT USD60 TO USD70 PER BARREL MAKES IT PROFITABLE
2) MALAYSIAN GOVT WANTS MORE REVENUE FROM PETRONAS
3) PETRONAS RAPID REFINERY NEEDS LOTS OF OIL
4) PETRONAS HAS INCREASED UPSTREAM JOBS TO RM30 BILLIONS
SO FAR SO GOOD, CALVIN'S CARIMIN & NAIM HAVE GROSSED MORE THAN 100% CHUN CHUN
NEXT WILL BE RM40 BILLIONS CAPEX FOR ECRL RAIL LINK JOB OF 688KM LONG & THEN BANDAR MALAYSIA ANOTHER RM70 BILLIONS (ALSO GOT PAN BORNEO HIGHWAY & WCE HIGHWAY) PLUS UP COMING HIGH SPEED RAIL JOBS OF OVER RM60 BILLIONS NEXT YEAR
THESE ARE HIGH INFRAR JOBS WHICH NEED LOTS OF CEMENT AND LONG STEEL
AND YTL TAKING LAFARGE CEMENT PRIVATE AT RM3.75. HONG LEONG ALSO TAKING TASEK CEMENT PRIVATE
SO THERE REMAINS A NEGLECTED CLASS
WHAT ARE THEY?
ANSWER:
THEY ARE LONG STEEL STOCKS & I HAVE PICKED MASTEEL AS THE VEST BEST OF LONG STEEL STOCKS
WHY MASTEEL?
THESE ARE MY REASONS
1) MASTEEL USE SCRAP IRON UNLIKE OTHERS USING EXPENSIVE IRON ORE.
SO MASTEEL HAS AN ADVANTAGE IN COST
2) MASTEEL FACTORIES ARE LOCATED IN PJ & KLANG. AS STEEL TRANSPORT COST WILL BE CHEAPER DUE TO ECRL ENDING IN PORT KLANG
3) MATEEL DEBT BURDEN IS LIGHTER THAN OTHERS AS IT RAISED CAPITAL BY PRIVATE PLACEMENT
4) THE LOGISTIC COST FOR STEEL IS BETTER THAN CEMENT
ONE TON OF CEMENT OVER RM200 BUT ONE TON OF STEEL IS OVER RM2,000
SO STEEL IS MORE EXPENSIVE THAN CEMENT COST BY UP TO 10( X ) TIMES
SO SELLING ONE TONNE OF LONG STEEL IS EQUIVALENT TO SELLING 10 TONS OF CEMENT
JUST IMAGINE FOR THE SAME AMOUNT OF MONEY YOU NEED TO USE
10 LORRIES TO TRANSPORT CEMENT
YOU ONLY USE ONE LORRY OF STEEL FOR THE SAME VALUE LIKE CEMENT
5) NOW CALVIN LIKES MASTEEL A LOT MORE DUE TO ITS DISCOUNT OVER RM1.50 NTA
AT ONLY 50.5 SEN MASTEEL IS SELLING AT ONLY 1/3 OF ITS NET ASSET VALUE
THIS GIVES US A TREMENDOUS MARGIN OF SAFETY
6) AFTER PH GOVT WON GE14 & HIGH INFRAR JOBS WERE CANCELLED, SCALED DOWN OR POSTPONED BOTH CEMENT AND LONG STEEL STOCKS WHICH DEPEND ON INFRAR JOBS CRASHED
NOW THAT ECRL & NEXT BANDAR MALAYSIA WILL BE RESTORED CEMENT PRICES ALREADY GONE UP
ONLY LONG STEEL IS THE LAGGARD.
BUT NOT FOR LONG. AS ECRL JOB PROGRESSES LOTS OF ORDERS WILL COME IN AGAIN FOR LONG STEEL FOR BRIDGES, FOUNDATIONS, EMBANKMENTS AND OTHERS
20% TO 25% OF CONSTRUCTION COST CONSIST OF MATERIALS LIKE CEMENT AND STEEL
SO THE MULTIPLED BILLIONS DO ADD UP TO A MULTI YEAR FRESH ORDERS FOR LONG STEEL
7) WHO SAW ALL THESE
DIRECTORS AND INSIDERS OF MASTEEL OF COURSE
SEE
| DATO' SRI TAI HEAN LENG @ TEK HEAN LENG | 14-Feb-2018 | Others | 32,723,154 | - |
 |
| DATO' SRI TAI HEAN LENG @ TEK HEAN LENG | 17-Jan-2018 | Acquired | 2,000,000 | 1.512 |
|
| DATO' SRI TAI HEAN LENG @ TEK HEAN LENG | 28-Sep-2017 | Others | 16,028,243 | - |
|
| DATO' SRI DATO SRI TAI HEAN LENG @ TEK HEAN LENG | 10-Jul-2017 | Acquired | 4,865,000 |
0.960 |
SEE DIRECTOR BOUGHT 2 MILLION MASTEEL SHARES AT RM1.51
EVEN ADJUSTED FOR 1 FOR 3 BONUS ISSUE DIRECTOR COST OF PURCHASE IS RM1.13
WHY DIRECTORS SO BULLISH?
BECAUSE THEY SAW ECRL, BANDAR MALAYSIA, KL SPORE HIGH SPEED RAIL WILL CAUSE HUGE SURGE OF DEMAND FOR LONG STEEL
SO IF DIRECTOR DARE TO BUY AT RM1.13 NOW MASTEEL AT 50.5 SEN
DON'T YOU THINK THE ODDs ARE NOW IN OUR FAVOUR
MORE SO AS PROJECT AFTER CANCELLED PROJECT ARE BEING RESTORED ONE BY ONE IN COMING DAYS
AT 50.5 SEN NOW
CALVIN HAS A MODEST TARGET PRICE FOR MASTEEL AT ONLY RM1.00
EVEN AT ONE RINGGIT IT IS STILL BELOW DIRECTOR ENTRY COST AT RM1.13
BEST REGARDS
Calvin Tan Research
Singapore
Please buy or sell after doing your own due diligence
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Discussions
Be the first to like this. Showing 35 of 35 comments
See how Bridges need lots of Long Steel bars
https://www.youtube.com/watch?v=4KzDgQjWyHM
2019-06-20 20:38
See how High slopes & valleys need Long Steel Bars for Embankment support to prevent from soil erosion
https://www.youtube.com/watch?v=Coeig9wdeIY
2019-06-20 20:40
SEE MASTEEL THE ONLY 100% TOTAL LONG STEEL BAR COMPANY IN MALAYSIA
THE CHAMPION OF CHAMPIONS IN LONG STEEL
MASTEEL = THE MASTER OF LONG STEEL BARS
https://www.masteel.com.my/core-products/steel-bar/
2019-06-20 20:43
Dutaland might be taken private just like
Super Enterprize
Tmakmur
The store
Daiman
Weida
Kulim
Yeelee
Selangor prop
Mwe
2019-06-21 01:26
Masteel also another candidate to be privatise after lafarge, cima, ytl cement, hanjoon cement and tasek cement
In fact masteel will be the 1st long steel stock to be possibly taken private
2019-06-21 01:28
already more than 2 years said butaland going to take private....if got also 50cts only cos stingy boss
2019-06-21 01:39
Hahaha
For Daiman it took even longer time before boss took it private at Rm3.00
2019-06-21 01:56
Kulim being taken private was expected because Jcorp saw the potential in Pengerang
Now Jcorp used 2 kulim lands to build 2 township
2019-06-21 01:57
Super Enterprize privatisation was fast and furious
Chased up all the way from Rm1.25 to Rm3.80 non stop
2019-06-21 01:58
The store was a sad case
Worth more than Rm6 to Rm8 a share
Privatised around Rm4.00
2019-06-21 01:59
all those very few people own one.all those kena trapped one like ytlland private price how much?
2019-06-21 01:59
Very few people owned?
Of course!!!
Only Calvin and his buddies bought lah!!!
Just as we sapu lots and lots of Naim at 50 sen
Huhuhu
2019-06-21 02:01
I will give at least 80 sen to take Dutaland private
Last time in pm Corp forum I told directors pm Corp can be taken private for 30 sen for all it's assets
True enough they later gave out 8 sen cash payout
2019-06-21 02:03
Masteel boss bought 2 million masteel shares at Rm1.51
After 1 for 3 bonus his holding cost is rm1.13
Warren Buffet we buy whole company or we can also buy pieces of a company
Behind every stock is a company doing real service or trading goods
So when we buy their shares we are actually buying pieces of the company
When Directors see value they might take it private
In Malaysia these Directors always get away by paying 30% to 50% for the true value of a company
Bursa and security commission are sleeping
Govt of Malaysia also know next to nothing about this
Previous Bn govt under Najib only knows how to siphon money by 1mdb
Now pH Govt also not bothered
They have other interest than to take care of the health of listed companies
2019-06-21 02:09
All bosses are stingy
Laf seagroatt gave only Rm1.30 for privatisation
All rejected it
Later she took Kaf I think double the price around Rm2.60 or Rm2.70
2019-06-21 02:12
Harrison's boss also want to take it private at Rm1.30 with Nta over Rm3.00
But one Peter guy from USA kept up buying Harrison till he got 10% and so prevented Mgo as boss needs more than 90%
In the end Harrison rose as high as Rm4.00
2019-06-21 02:14
all those u said one,share capital not as much as butaland…..Harrison siapa ada?
2019-06-21 02:16
u bought naim at 50cts 5 lots sold at 60cts 5 lots make 500 not enough makan also....hahaha
2019-06-21 02:24
Hahaha
Only Calvin 2 remisiers know how many lots of Naim Calvin bought
2019-06-21 03:18
Apolloang
Good morning
You better don't play casino type of stocks anymore
Better don't make this type of money and get addicted to it
If you win you will bet more and more in future
Just like taking drugs
Once you get hooked to the habit?
Finish leow!!
Sure die inside the gambling spirit
As they say in hokkien
Puat kiaw puat kiaw su leow leow
Or if you keep on gambling you will finally lose everything
Jesse Livermore took the stock market like a casino. In the very end of end games he lost everything he made and committed suicide
So many are committing financial suicide
2019-06-21 07:23
One more is Asset play
Peter Lynch when buying into Disney Land shares saw something
Peter Lynch saw what?
Peter Lynch saw that families visiting Disney World usually stay in Hotels around Disney Lands
And Peter Saw "THERE ARE HUGE EMPTY LANDS" in Disney World which could be turned into Hotels
So why stay outside when Disney could have it's brand of Disney Hotels
This was done by LegoLand. LegoLand also got LegoLand Hotels...going for Rm1,000 per room one night
2019-06-21 07:51
Another thing about asset play is the assets bought upteen years ago still sitting on old book value
If revalued or sold these stocks of Asset plays will unlock Real Value
Recently Dolomite sold an asset and it's shares went limit up from 8 sen to 19 sen for a 11 sen gain
But the price rise was not justified as it's Nta was only less than 10 sen
Another similar asset play stock is Asb.
Asb at 14 sen has a huge 45 sen asset backing
Asb will be finalizing it's sale of shah Alam factory for Rm124 millions (cost Rm31 millions book value) so by selling this land Asb is unlocking land value and getting a net profit of 8.3 sen (asb is an out of favour, unloved and also unpopular, undiscovered stock of great potential)
So Asb presents us a great buy
Again many cannot see this asset play stock which Peter Lynch or Howard Marks' will load up if they are Malaysia
2019-06-21 07:59
Wahaha
Today the unloved, unwanted, much feared Uzma powered up
Many now chasing in earnest
Later much later
This unloved, unwanted overlooked masteel will also power up
2019-06-21 11:21
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See how Concrete Piles got long steel embedded inside
https://www.youtube.com/watch?v=xp9f2ZURD1s
2019-06-20 20:36