Poh Kong 12/12/2024

Price RM 0.985
Market Capital (RM) 404.20m
Number of Share 410.35m
Revenue (TTM) 1.642B
Net Profit (TTM) 116.92M
Net Margin (TTM) 7.1%
EPS (TTM) 28.49
P/E Ratio 3.46
ROE 13.44%
P/B Ratio 0.46
NTA 2.120

5y CAGR - Revenue 10.4%
5y CAGR - Profit 35.2%

Dividend (cent) 3.000 ^
Dividend Yield 3.05%
Dividend Policy 0%
Dividend Payout 1 Year Average Payout 11% 10% 13%
Equity Growth 14% 45% 58%
Net Cash (RM) -119.68M *
Net Cash/Share (RM) 0.00
Free Cash Flow (cent) 77.92M (18.99) *
Debt/Asset Ratio 14% *

* Fundamental data ended 2024-07-31.
^ Total dividend amount declared for financial year ended 2024-07-31.


Do you know why Poh Kong is trading at very low PEs, almost all the time?
I did the analysis many times over many years and concluded that the low PEs were appropriate.
After all, the price or intrinsic value of a company is the discounted value of all its future cash flows.

Maybulk

China was the catalyst to world trade. Large amounts of goods required to be transported from one region to another. The bulk carriers are asset intensive businesses, and just like airlines are better avoided in the long term. Why? The economics of these businesses are generally very challenging and difficult.

My attention was brought to Maybulk by a friend. He was attracted by the consistent high DY of Maybulk during that period. Studying its business, Maybulk was profitable in its main business. Even more impressive, due to shortage of bulk carriers, it was able to make a lot of profit disposing its used bulk carriers and its was cash rich. Management rewarded the shareholders generously through increasing dividends. I bought into the company and sure enough, with good profits from selling its bulk carriers and good profits from its bulk carrier business, its profits grew and its dividends and share price similarly. It peaked at 3.50 in 2008.

Then the global financial crisis came. Businesses round the world shrunk. Bulk carriers lay empty. New bulk carriers previously ordered by everyone in this sector came into the market. The fundamentals of the whole business changed for the worse.

Directors of Maybulk sold. In fact, they sold almost all their shares. Even though Robert Kuok is a major shareholder of this company, the fundamentals of the business prevail. Its share price collapsed gradually and then quickly when the seriousness of the impact on this sector became more widely known. I sold off after the collapse of the share price around $2.30 + or thereabout.

When the share price dropped by 20% or more, do not ignore this. Take a look at the business of the company. Is it a temporary or a permanent problem facing this business? Sell quickly when the fundamentals of the company deteriorated permanently and you cannot see its turnaround in the distant future. Sell first, think later.

A fast grower than was actually a cyclical

KNM was a darling stock at one time. It is a service business within the O&G sector. After transferring to the main board, its business continued to grow at a fast rate. Its earnings similarly. Growth was also manufactured through frequent acquisitions. With each acquisition, its business grew revenues and earnings; and debts too. Its share price was driven up quickly during these early days. The O&G sector was growing due to insufficient demand to meet the supply.
KNM then acquired Borsig. Borsig was a much bigger company and this acquisition incurred a lot of borrowings.

I was still learning about stocks. Fast growers like KNM was extremely attractive for investors. Moreover, it was great feeling to see its share price grew so quickly after its transfer to the main board. I bought into this stock when it was about to transfer to the main board. I watched the investment like a hawk, wary of its fast growth, through acquisitions; yet, was excited and lull into complacency, by the phenomenon gain. Yes, I have read the story of Infosys, when it was growing at a fast pace in its early years, chased by many investors; and suddenly, the growth slowed or stopped, and the whole PE collapsed, causing many investors to lose money, even though Infosys remains profitable and still growing, abeit slower.

Very soon after this acquisition, the oil prices fell drastically. Business collapsed quickly. The profits shrunk and soon the debts became too big. Accounting for impairments also hit the bottom line. KNM's share price fell quickly and precipitously. I took my profits, though not at its highest.

Today KNM is a shadow of its hey days.

Latexx

Many glove companies were started in the early years. Only a few survived. Latexx was an early starter and listed in Bursa. But it soon fell on hard times. Losses in business led to brothers having different views on its business. Huge borrowings and losses led to its continuing difficulty. The business was restructured and its share price was in the doldrum. The banks and the creditors were asked to help, converting their unpaid debts into equity and given free warrants. The brothers were bought out by a single brother. The restructuring coincided with a period when the production capacity was insufficient to meet the demand in the world market. Due to poor market demand, the glove industries had under invested in capacity in the prior period. When the demand improved, the production capacity was inadequate. That was the picture then.

Doing some scuttlebut t investing, I discovered through speaking to various people in the industry, the main players had difficulty to meet these supplies. Some have more orders to fulfil and they had to contract these orders to other glove manufacturers. I too discovered that some managers had moved to Latexx during this period and they were talking favourably about this turnaround company. Those with knowledge of the glove industries as they worked in it, I was surprised was buying into Latexx and not in the companies they were working in. With this knowledge, I did some research into Latexx and could see clearly it was a turnaround, a huge one as such. Buying its mother shares was very rewarding but buying its warrants was even more so. From pennies in its mother shares (<50 sen) and from mini pennies of its warrants (10 sen or so), its price rose to a few ringgit (RM 2 or RM3 or RM4). Those who got into this stock, at the time of its turnaround and cyclical upturn in the glove business, made a huge amount of profits on their investment.

This stock was eventually taken private when bought by an OEM company.

Guan Chong

For a very long time, Guan Chong, a cocoa refiner was a loss making company more than a decade ago. Its profits were very volatile, often showing losses. Its shareholders suffered.

Just before the subprime global financial crisis, I noticed its revenues and profits were climbing. Its profit margins expanded many folds from its very low profit margins that were frequently negative. Cocoa prices were high due to political and social problems in the producer countries in Africa. However, GCB had hedged its cocoa inventories in advance and had benefitted from the increase in cocoa prices in its inventories. Its capacity was now limited in Johor and it invested into new production and refining capacity in Batam, Indonesia. In Indonesia, it has good supply of cocoa from local producers. When the global financial crisis occurred in 2008/2009, those in similar industries like GCB in Europe suffered financial ruins. They scaled down their businesses due to losses and lack of funding. Buyers of their produce turned to other producers for their supplies. This benefitted GCB. With improving revenues, and profits, GCB also increased its dividends paid out to the shareholders.

If you had spotted GCB at the stage of its turnaround, its price was in the pennies. The price soon climbed with its increasing good business profits and more people noticing this counter. It climbed in tandem with its good and better profits. I think I sold it eventually at around $2,80.

GCB remains a challenging business even today. But the management has continues to deliver,

Hai-O

Many years ago, Hai-O was a gruesome company. Its businesses were so diversified and fragmented. There was no direction in its focus. It was profitable but the profit was very anaemic indeed. It was a struggling company, and not surprisingly, its share price traded at a very low price. After a few years, its revenues and profits started to improve. It had a new business stream (MLM). Most of the participants were Malays and growth was visible. With improving new business, the management also restructured its gruesome business. It divested a lot of its other small, small businesses. Focus was on the Hai-O Chinese imports business and on the MLM. It controlled costs, reducing its borrowings. The revenues expanded, its profit margins improved and its profits grew at a faster rate than revenue growth. In those early one to two years, this turnaround was unnoticed by the herd. The share price remained in the doldrum. It was perhaps 2 to 3 years, when the turnaround story started to be noticed. Soon, there were write ups on Hai-O, and funds started to invest into it. The lay public piled in later. The share price of Hai-O climbed from pennies to $3 , then $4 and I think, reached up to $5+. I sold a bit too early, perhaps, around $3 to $4. Yet the price shot up further.

Today, Hai-O is by another name. Its business has deteriorated. I have not looked at this counter for a while, maybe will just take a peep. ( It is renamed Besholm)

Turnarounds: Hai-O, Guan Chong and Latexx

If you can spot the turnarounds early than others, before the market realises them, you can make a lot of money. These are not for long term investments.

Many companies do not enjoy economic moats and their businesses are highly competitive. At times, due to business of the sector or due to poor managements, the companies entered a period of poor performances and these affected the companies' profits and correspondingly their share prices. Many of these companies remained gruesome and never turnaround, and should not be invested into; also better avoided.

On occasions, you might be able to spot a turnaround. If you can spot it earlier than others, you have the opportunity to make a lot of money. How do you spot this? A lot of focus, hard work, screening many companies on a regular basis. It can be tiring, time consuming; thus, serious investing can be a full time commitment.

KAF vs Karambunai

These were 2 listed companies that have been taken private. Comparing these 2 companies allow us to fathom how to approach asset play in investing.

KAF
For years, it was trading around 1.50. Yet, it paid regular dividends which gave a yield of 4 or 5% annually. The dividends were continuous and sustainable. It was an asset play, in the sense, it held a piece of land in the KLCC area (Jalan Conlay) and this piece of land was priced at a historical price and yet it was obvious the land was worth a lot more. The longer you remained in this company, the more valuable is the price of this land; yet the share price remained at RM 1.50. Yet, for holding this share, you earned a dividend yield comparable or slightly better than your risk free interest rate at the bank. It was eventually taken private by Khatijah and her friends at a premium to its share price.


Karambunai was also another stock that was an asset play. It was a loss making company. It did not pay dividends for many years. It was a penny stock. Yes, it owns huge track of land in that area. Only a small portion was developed. The hotel was great (having stayed there on 2 occasions in past) in a lovely beach area. But the development that would have monetised the land was not successful, leaving a large piece of the land in its natural state. Based on land value, the assets were worth more than the market cap of the company then. If you bought into this company hoping to benefit from an asset play situation, you might or might not be lucky. If unlucky, the company continuing losses, led to bankruptcy and de-listed with the shareholders losing everything. If lucky, a white knight appears and offer to take your shares off you at a premium; the only thing is when and how soon. If you had to wait 20 years and the price offered was doubled that of your buying price 20 years ago, was it a good return? You are basically at the mercy of the major shareholder, who happened to be rich and able to offer to take it private at a slight premium to the share price but at a huge discount to the fully monetised value of the land.

In summary, you must know the games you wish to play.

Nvidia

Returns over various periods
1 year. Loss
2 years
5 years
10 years
20 years

Though the price of Nvidia has multiplied many folds, those invested over the last 1 year might be still in a loss position. Those who invested 3 or 4 years ago, enjoyed >100% gains. The truly big winners are those who invested very yearly and have the conviction to hold onto the stock untill today, their gains are multiple of 1,000s folds. These are a few only.

Of course, prices of ALL stocks are volatile.

A few stocks in my portfolio have seen their share prices dropped by 50%. The returns over the last 1 year had been a big loss. The returns over the last 5 years, had shown probably losses too, albeit smaller. The returns over the last 10 years, showed fair gains. The returns over the last 20 years , the gains remained very good. The returns over the last 30 years, remained fantastic.

They are still multi-baggers over a long period of investing despite their huge
fall in prices. Over the long period of investing, their prices had fallen by huge amounts too and there were also periods when their share prices stagnated for a long long time.

What do value investors like most?

In valuation, it is better to be approximately right than to be absolutely wrong.

Valuing PBB has been relatively easy for me over many years. There were times when it was obvious that it was priced cheap and at a discount to its fair value, and I added. Often it traded at fair value. On occasions, it's price relatively higher than its fair value ( just hold, do you sell?). The remarkable thing about PBB, or similar great companies: every time the price reaches a new all time high, you know you have invested well.

Keep valuation simple.

You do not need to do complicated DCF, just apply its concepts in a conservative manner.

By staying with great companies (those growing revenues, healthy earnings that translate into strong growing cash flows), projecting their future cash flows is EASIER.

As for discount rates, even using the risk free interest rate (without adding ant risk premium., since these are great companies), you can derive your intrinsic value with a huge margin of safety. Where is the margin of safety? Your confidence that its business will grow and delivers higher healthy earnings and FCFs in the future.

Of course, at times, during market corrections, you have the opportunity to acquire more at lower prices with bigger margin of safety and with higher upside/ downside risk in your favour.

A caveat: many great companies are priced at high valuations. Be patient.

Do you need to sell these companies? If you can hold for the long term, just study the Coca Cola investments story of Buffett to learn more.

The intrinsic value (price) for both stocks and bonds is equal to their discounted future cash flows (DCF).

The cash flows for stocks are derived from sales and expenses, which in turn are dependent on economic conditions.

The cash flows of bonds are the fixed coupon payments based on the coupon rate.

The discount rate takes into account the risk-free interest rate, risk premium and in the case of stocks, growth.

Interest rate is the price of money and is a major factor in determining the valuations for stocks and bonds.

ROE of TSH is 5.06%. It was not a surprise that it is trading at a fraction of its book value.

For shareholders of TSH, they will prefer the management allocate capital more efficiently: preferring dividends to share buyback, given its low return on invested capital.

Warren Buffett’s $1 test and how to tell if a company is allocating its capital wisely

Buffett is essentially talking about return on invested capital (ROIC).

If a company invests $100 in something at the cost of capital of 10%, which in turn earns $7 in earnings forever, it would have a market value of only $70 ($7/10%), failing the $1 test.

Earnings of $11 or more would pass the test.

When companies make the decision to invest in M&A, CapEx or buybacks, they must make a conscious effort in evaluating if the potential returns would be meaningful and not capital destructive.

Net Profit Margins of Plantation companies based on TTM Revenue and TTM Net Profit

KMLoong 10.1%
IOI 15.1%
UtdPlt 34.8%
KLK 2.7%
TSH 10.0%
JTiasa 14.1%


KLK: The impairment of investment in Synthomer of RM180.0 million and the inventory writedown are one-off. These exceptional losses of RM366.5 million are non-cash items.

CPO prices rose steadily afater falling at the beginning of the pandemic.
It rebounded from the lows of around RM 2,000 per tonne in May 2020 to as high as RM 7,757 per tonne in April 2022.

All these plantation counters reached these highest prices in April 2022.

KMLoong 2.12
IOI 4.67
UtdPlt 16.53
KLK 29.47
TSH 1.80
JTiasa 1.67

Share prices of Plantation stocks

Price at 1st Jan of each year (MYR)
Year...2018...2019...2020...2021...2022...2023...2024...Latest(9/12/2024)
KMLoong...0.89...0.85...0.90...1.00...1.34...1.53....1.89...2.63
IOI ....3.91...4.01...3.98...3.77...3.48...3.63...3.89...3.91
UtdPlt...10.59...10.04...10.54...12.03...12.21...14.44...19.23...31.80
KLK...20.96...20.64...19.42...20.22...19.28...19.90...21.61...21.44
TSH...1.33...0.95...0.99...0.86...0.95...1.03...0.98...1.21
JTiasa...0.92...0.50...0.63...0.65...0.58...0.56...1.08...1.49

CPO price for 2025
Projected to be between RM 4000 to RM 5000 per tonne

Investing in plantation stocks, you can expect dividends on a regular basis and occasionally when the prices of CPO are really good, special dividends on top of these.

CPO prices rose steadily afater falling at the beginning of the pandemic.
It rebounded from the lows of around RM 2,000 per tonne in May 2020 to as high as RM 7,757 per tonne in April 2022.
Prices were driven by a confluence of factors, including supply shortage and logistic disruptions.

As the market did not believe the record high CPO prices were sustainable, the share prices of the plantation counters did not significantly outperform.
The market did not believe the record high CPO prices were sustainable.
Also, investors in plantation companies are more institutional and longer term.
As can be seen and sure enough, CPO prices have since fallen back from the peak.
Prices are currently still higher than pre-pandemic levels.
The share prices of the plantation companies have not collapsed along with falling CPO prices.
Since Oct 2024, the CPO prices have trended upwards again.

CPO price MYR ,000 per metric tonne
Jan
2018 2.49
2019 1.83
2020 2.81
2021 3.42
2022 5.34 (April 2022 CPO price peaked at 7.0+)
2023 4.09
2024 3.72

Dec 2024 5.146

Plantation stocks
Net Income of Plantation Stocks (millions MYR)

Year...2018...2019...2020...2021...2022...2023...2024...2025
KMLoong...99.1...52.1...40.8...94.9...137...163...148...89 (2Q, 2025)
IOI ...3.1B...632...601...1.4B...1.7B...1.1B...1.1B...711(1Q, 2025)
UtdPlt...372...283...400...518...602...708...534 (3Q,2024)
KLK...753...618...773...2.3B...2.2B...834...591 (2024)
TSH...40.1...44...79.1...169...463...95...73.8 (2024)
JTiasa...-26.8...-276...-73.5...31...136...154...141...72.3 (1Q,2025)

Are you ready for the BEAR? Will you survive a BEAR?
Never be fearful of a BEAR market. It is probably the best time for your investing. :-)
But be aware of RISKS. Make sure you are always a survival and not be caught by unforeseen RISKS leading to your financial RUIN.

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Posted by xiaoeh > 1 hour ago | Report Abuse

Dear 3i
let's analyze which trading/investing style suite different trader/investor profile:
1) little capital say RM10k + low risk taker + with little time
2) little capital say RM10k + high risk taker + with little time
3) little capital say RM10k + low risk taker + with plenty of time
4) little capital say RM10k + high risk taker + with plenty of time
5) more capital say >RM1mil + low risk taker + with little time
6) more capital say >RM1mil + high risk taker + with little time
7) more capital say >RM1mil + low risk taker + with plenty of time
8) more capital say >RM1mil + high risk taker + with plenty of time
>>>

If you are young and has a long term time horizon:
1. Invest early
2. Invest regularly
3. Stay long term
4. Have an investment philosophy based on your investment objective and your risk tolerance
5. Reinvest all dividends.
6. Aim for low risk, high return.

CPO

CPO prices fell at the beginning of the pandemic to a low of around RM 2,000 per tonne in May 2020.
It rebounded from this low to as high as RM 7,757 per tonne in April 2022.
Prices were driven by a confluence of factors, including supply shortage and logistic disruptions.
In 2023, CPO prices had fallen back from the peak.
In recent months, CPO prices has risen.

Keep it simple and safe

The intrinsic value of an asset is and always will be, the sum of its discounted future cash flows.

Market Capital (RM) 12.922b
Number of Share 3.428b
Revenue (TTM) 2.181B
Net Profit (TTM) 78.05M
Net Margin (TTM) 3.6%
EPS (TTM) 2.28
P/E Ratio 165.35
ROE 1.66%
P/B Ratio 2.75
NTA 1.370

Going forward Hartalega's revenues should increase and its profit margins should increase too.

Price made a jump up on 26.11.2024 after announcing a good quarterly result.

Is buy and hold, a safe strategy?

The recent severe downturn in the market brought this strategy into question once again. It is very safe for those who employs this strategy using certain criterias. It is safe for selected stocks. These stocks should be of the highest quality (QVM). These stocks should be bought at a bargain price with a margin of safety. The only time you may have to sell the stock urgently is when there is a fundamental deterioration in the business of the company. Other than this, you have the leisure of selling.

The market is cyclical. The bull-bear-bull-bear cycles ensure that the bull will always follows a bear and vice-versa. Here are a selection of Malaysian stocks that have stood the test of time over at least 3 severe bear markets: Nestle, DLady, Petdag, Guinness, Petgas, PBB, PPB, Resorts. There are also others too. At certain short period of time, each of these stocks may underperform but if assessed over a longer period of time, the returns have ALL been positive. By minimising the downside and aiming only for modest returns, investing can be surprisingly rewarding for a large number of investors and with little effort.

How to maximise returns?

1. First, ensure that there is safety of your capital. Remember not to lose your capital. By ensuring that you do not lose money and aiming for moderate returns, you can maximise total returns too with low risk. Don't be greedy for high returns by taking unnecessarily high risks.

2. Stick to the few high quality stocks you are familiar with. This is the circle of competence mentioned by Buffett. Stay within your circle of competence and never, never, never, never, get out of this circle. :-) If your circle of competence is only 6 stocks, stick to these 6 stocks.

3. Only buy high quality stocks at bargain price. At a certain price, the stock is a bargain and at another price, it is trading at a fair price. Never, never, never buy these high quality stocks when it is trading at high price. By buying these good quality stocks at a bargain price, one is buying with a margin of safety to minimise loss to your capital in the event you got it wrong. At the same time, if the event turned out to be as you expected, your return will be greater.

4. Also do not over-diversify. According to Buffett, adding the 7th stock into your portfolio reduces the overall return of your portfolio. Bet big if you are very certain of your selection.

5. Allow the wonder of compounding to grow your return over a long period of time.

Investing can be very safe. Keep it simple and safe. (K.I.S.S.)

Pentamaster International in HK corporate announcement expected. Suspended from trading.
Deeply underpriced in Hong Kong market.

When to buy?
... at time of maximum pessimism
... when there is "blood in the street"

Bacteria and Bricklayers
https://myinvestingnotes.blogspot.com/2024/12/bacteria-and-bricklayers.html

Whatever the approach, it is vitally important that every business vigorously search for and identify exponential growth opportunities. It is mathematically inevitable that an additive, linear growth engine that does not compound on itself will eventually peter out, or even collapse like a wall built too high.

Likewise, investors must diligently sift through the noise to find the few bacteria-in-a-hay-stack that will drive true, long-term value creation. Ignore the steep trajectory in the short-run. Instead, focus on the curvature of the horizon.

Growth functions: Are you adding or multiplying?

Every growing business needs an honest answer to this question: Is your business growing through multiplication, like the Amazonian bacteria, or addition, like the brick wall?

Businesses that simply "add" must necessarily slow down. Scale begins to work against you, making it harder and harder to maintain a rapid growth pace. Eventually, you will, figuratively, hit a wall.

An example of an additive growth function is paid customer acquisition through a channel like Google Adwords.
Spending $100 on Adwords is going to generate some number of users. Spending another $100 is probably going to generate a similar number of users, and so on.
There's no "magic" here. This is "buying growth" in the most direct manner.

On the other hand, businesses that "multiply" can grow indefinitely. Their "growth functions" are inherently multiplicative. Users beget more users. Revenue begets more revenue.
The classic exponential, multiplicative growth function is the viral word-of-mouth (WOM) or referral program.

Most businesses see their revenue growth rate tick down over time. This is even more true for companies that are growing quickly today.

On the other hand, some exceptional businesses have managed to drive truly compound growth over long periods.

Amazon has grown at a nearly constant rate over almost two decades, despite increasing scale by 64x over the period.
Amazon is an exceptional business that has evidently identified a way to grow at a nearly constant rate over many years.
By leveraging on the core infrastructure the company's built up over time has enabled it to grow in bacteria-like fashion.

Compound growth
1) implies constant growth
) is exceedingly rare and
3) is incredibly important to building a large, valuable business.

The fact is, very few objects, organisms or organizations can sustain truly compounding growth over any extended period.

From an observer's or investor's perspective, it's quite easy to fool yourself into thinking compound, exponential growth is much more common than it really is. And it's understandable given how often the term is thrown around. Firms in fleeting phases of fast growth can visually demonstrate their breakneck pace with the ubiquitous, infamous "hockey stick" chart.

You Don't Understand Compound Growth

Einstein once (supposedly) said:

Compound interest is the most powerful force in the universe

Of compound interest, Warren Buffet proclaims:

Over time it accomplishes extraordinary things

Compound interest, or growth, is one of the, if not the most, powerful and impactful forces in nature.

And yet, it is also one of the most consistently misunderstood in the world of business.

How so?

Simply, we misapply the term "compound growth" to things that do not actually grow in compound fashion.

Market cap RM 192 m
Many quarters of losses
Negative ROEs
P/B is 0.52

This is a gruesome company. Its core businesses have deteriorated over many years. Probably ripe for a take over. If not, may face insolvency. ( ??? )

Balance Sheet
NCA 974 m
CA 1039m

TEQ 372m
NCL 251m
CL 1390m
TL 1641m

Current Ratio 0.74

Cash 115m
STBorrowings 293m
LTBorrowings 152m
Total Borrowings 445m
Net Debt 330m

AR 745m
AP 1019m


Income Statement
9 months ending 30.9.2024
Revenue 1394m
COS & Op Exp (1,484m)
Finance costs (36m)
Loss before Tax (125m)

Warren Buffett

Avoid investing in companies with low ROE.

It is extremely difficult to get rich by being an owner of a business with low ROE.

Always look at a business by examining its return on capital. You want to be in good businesses which will be better businesses 10 years from now and you want ot buy them at a reasonable price.

If you have a business with low ROE of 5% or 6% for a long time, you are not going to do well in investing even if you buy it cheap to start with.

Time is the enemy of the poor business and it is the friend of the great business.

If you have a business that it earning 20 % or 25% on equity and it does that for a long time, time is your friend but time is your enemy if you have money in a low return business.

You may be lucky enough to pick the exact moment when it gets taken over by someone else, but when you buy a stock to own for a very long time, you have to stay away from businesses that have low ROEs. 🤔

Charlie Munger

It is not much fun to buy a business where you really hope this sucker liquidates before goes broke. 😄

You only need to invest into 3 very good stocks long term to be comfortably rich.

My good friend is a very good investor. He is receiving dividends yearly from from the stock market that is equivalent to about RM 5,000 daily.

>>>
Posted by i3gambler > 2 days ago | Report Abuse

On behalf of the Board of Directors of ICAP, RHB Investment Bank and Astramina Advisory Sdn Bhd wish to announce that based on the valid DRFs received by the Share Registrar, ICAP will be issuing 1,036,359 DRP Shares pursuant to the DRP. The DRP Shares to be issued represent 21.85% of the total 4,742,949 DRP Shares that would have been issued had all the entitled shareholders of ICAP elected to reinvest the Electable Portion into DRP Shares.

>>>

78%+ chose to receive the dividends.

Most of the gains are made in only a few stocks which I had the conviction to buy and held on for a very long time. These are the true compounders that gave the majority of the returns over the decades. The power of compounding its truly amazing. Another doubling and it is a very huge sum at the end of a long compounding period.

How good has been my stock selections?

Reviewing my portfolio over the decades, how do I grade myself as a stock picker?
Probably average (maybe even slightly below average), this would be my humble assessment.

I did have a few losers in my portfolio. Thankfully, the losses are small in comparison to the overall.
There are also many non-performers. Some, I have probably held on for too long.
Thankfully, I did pick some stocks that have given the majority of the total returns of the portfolio. They have grown and are multi-baggers. An element of luck is definitely in play too.

Yes, temperament is more important than intelligence. You need some intelligence but more importantly, you should have very sound investing philosophy and reasonable emotional approach to the stock market.

I will not share too much on this company for now, but that I remain positive on Dutch Lady.

The Dot-Com crash in US in 2000 affected the American investors severely. Buffett was not caught in the exuberance and though underperforming during the Dot-Com bubble, not only survived but outrun the returns of all the other investors post Dot-Com.

Post Dot-Com crash, value investing (as practised by Buffett) became fashionable again. Many books and internet articles appear on this topic. These books were also available in our local bookshops.

What I learned in post 1997?

A housewife had a portfolio of penny stocks. They were all down 90% or so. They were all gruesome companies except one. Holding onto these stocks made here felt comfortable but actually was costly, in terms of opportunity costs. She was advised to sell and cut her losses, except one. She was advised not to indulge in stocks in future without guidance. Luckily for her, she had only about less than RM20,000 invested.

Another man willing shared that he lost everything in 1997. Everything meant including his savings in the Asian Financial Crisis. I could see his mental state was much affected, though he had come to term with his loss. At his early 50s or so, it was financial disaster. He shared that he was totally staying away from stocks. His grown up children, early in their careers, are helping out with his household expenses.

The bull run of the 1990s made a lot of people behave differently. The greed for short term money and easy money, resulted in many to give up a stable but reasonable career for the short term opportunities at that time. The mee seller spent her time in the stock broker's place, the teacher gave up teaching to do multilevel selling and the accountants became remisiers. When the crashed came, these people lost a great deal.

Despite the massive drop in share prices in the Asian Financial Crisis in the late 1990s, and no good knowledge of investing, my portfolio survived. Luck was on my side. My advisor on stock was a very capable senior person. He had recommended stocks to me at various times, perhaps, 3 or 4 times per year. My portfolio was in the negative (showed losses) in the Asian Financial Crisis in 1997. But I was well placed, with also a lot of cash, as from 1994 to 1997, I was fearful of the market due to its exuberance. When the crash came in 1997, I invested more money but the prices continued to fall (painful for the short term players but on hindsight and experience, the short term pain turned out to be a great teacher for those wishing to play long term).

By 2002, my portfolio showed significant gains. Dividends accumulated contributed significantly also to the total gain. Many of the shares that crashed, recovered, as least back to my buying prices. I realised that when the price returned back to your initial buying price, you would have made a positive return given the dividends received. This also meant all the returns were due to dividends received from this particular stock in 2002.

Short term versus long term

Always audit your investment journey and returns. You will learn a lot from this activity too.
My investment is sloth like. I bought in big amount, generally held for long time and hardly ever sell.
This must have been influenced by my experience in the first decade of my investment.
How you behave during the market fluctuations can only be learned through experiencing them! :-)