Timing is of Psychological importance to the speculator

There is one aspect of the "timing" philosophy which seems to have escaped everyone's notice.

Timing is of great psychological importance to the speculators because he wants to make his profit in a hurry. The idea of waiting a year before his stock moves up is repugnant to him.

*But a waiting period, as such, is of no consequence to the investor.*

What advantage is there to him in having his money uninvested until he receives some (presumably) trustworthy signal that the time has come to buy?

He enjoys an advantage only if by waiting he succeeds in buying later at a *sufficiently lower price to offset his loss of dividend income.*

What this means is that timing is of no real value to the investor unless it coincides with pricing - that is, unless it enables him to repurchase his shares at substantially under his previous selling price.

Ref: Intelligent Investor by Benjamin Graham

Market Fluctuations as a Guide to Investment Decisions

What does the past record promises the investor - in either:

- the form of long-term appreciation of a portfolio held relatively unchanged through successive rises and declines, or,
- in the possibilities of buying near bear-market lows and selling not too far below bull-market highs.

Since common stocks, even of investment grade, are subject to recurrent and wide fluctuations in their prices, the intelligent investor should be interested in the possibilities of profiting from these pendulum swings.


There are two possible ways by which he may try to do this:

- the way of timing and
- the way of pricing.

By timing we mean the endeavor to anticipate the action of the stock market - to buy or hold when the future course is deemed to be upward, to sell or refrain from buying when the course is downward.

By pricing, we mean the endeavor to buy stocks when they are quoted below their fair value and to sell them when they rise above such value.

A less ambitious form of pricing is the simple effort to make sure that when you buy you do not pay too much for your stocks. This may suffice for the defensive investor, whose emphasis is on long-pull holding; but as such it represents an essential minimum of attention to market levels.



We are convinced that the intelligent investor can derive satisfactory results from pricing of either type.

We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up as a speculator and with a speculator's financial results.

This distinction may seem rather tenuous to the layman, and it is not commonly accepted on Wall Street.

As a matter of business practice, or perhaps of thoroughgoing conviction, the stock brokers and the investment services seem wedded to the principle that both investors and speculators in common stocks should devote careful attention to market forecasts.

Pretensions of stock-market forecasting or timing.

The investor can scarcely take seriously the innumerable predictions which appear almost daily and are his for the asking. Yet in many cases he pays attention to them and even acts upon them. Why?

Because he has been persuaded that it is important for him to form some opinion of the future course of the stock market, and because he feels that the brokerage or service forecast is at least more dependable than this own.

*

A great deal of brain power goes into this field and undoubtedly some people can make money by being good stock market analysts.

But it is absurd to think that the general public can ever make money out of market forecasts.

For who will buy when the general public, at a given signal, rushes to sell out at a profit?

If you, the reader, expect to get rich over the yers by following some system or leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market.

There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.

Of course, some may choose to sell some at high price. But not selling at all is also fine too!!!

Company GHI
2008 5.00
2013 21.64
2015 12.24
2020 30.00
2024 24.00

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.

Company DEF
2006 1.22
2008 2.12
2009 1.37
2014 4.19
2015 3.64
2018 4.92
2020 3.14
2021 4.19
2022 4.78
2024 4.27

How do you game this stock?

Buy when it is obviously available at low price or at fair price.
Do not buy when it is obviously at high price.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the LONG TERM and not sell (almost ever), just don't buy when it is high and only buy when it is at fair or bargain price?
It is.

Company XYZ
2012 19.00
2014 16.00
2018 37.00
2022 20.00
2024 30.00

How do you game this stock?

Buy when it is obviously low priced or fair price.
Do not buy when it is obviously high priced.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the long term and not sell, just don't buy when it is high, buy when it is at fair or bargain price?
It is.

Company ABC

2006 RM 14
2008 RM 9
2019 RM 64
2024 RM 20


How do you game this stock?

Buy when it is obviously low priced or fair price.
Do not buy when it is obviously high priced.
Do you sell when it is 50% over-priced (based on your estimates)?
Is it alright to just hold on for the long term and not sell, just don't buy when it is high, buy when it is at fair or bargain price?
It is.

Nestle
Mkt Cap RM 28.281
Price RM 120.60
Revenue RM 7.1 b
Earnings RM 660 m
Year ending FY23

DLady
Mkt Cap RM 2.134 b
Price RM 33.340
Revenue RM 1.4 b
Earnings RM 72.4 m
Year ending FY23

F&N
Mkt Cap RM 11.275 b
Price RM 30.70
Revenue RM 5 b
Earnings RM 537 m
Year ending FY23

Apollo
Mkt Cap RM 561.60 m
Price RM 7.020
Revenue RM 257 m
Earnings RM 47.8 m
Year ending FY23

Ajinomoto
Mkt Cap RM 1.173 b
Price RM 19.20
Revenue RM 604 m
Earnings 27.5 m
Year ending FY23

Fresh Farm
Market Cap 2.752b
Price RM 1.470
Revenue RM 630 m
Earnings RM 50.1 m
FY23

On behalf of the Board of Directors of icapital.biz Berhad, we wish to announce that the Net Asset Value per share of icapital.biz Berhad as at 3 April 2024 is 3.92.

At 3.10 today, it is trading at a discount of 20.9% to its NAV.

Most closed end funds trade at a discount of around 20%.

F&N

Its share price climbed slowly over many years, reaching a peak price of RM 38 in June 2018.

From then, it fell to its lowest of RM 20 in October 2022.

Today, it is at about RM 30+.


How do you buy or sell F&N?

Quality: Great (growing)
Management: Great
Valuation:

Buy and hold for the long term.
Buy when it is obviously low.
Do not have to sell when it is obviously high.

In the long term, your investment in F&N will be fine.

33.340

Volume 47,600
VWAP RM 33.217
Change 0.700 (+2.1%)

Value RM 1,581,144

Will the EPS of DLady be higher in 5 years from today?

Is DLady over-priced today, for those with a 5 year investing time horizon?

32.700

Volume 53,000
VWAP 32.284
Change -0.800 (-2.4%)

Value RM 1,711,074

1.360

Volume 8,655,900
VWAP 1.376
Change -0.040 (-2.9%)

Trade Value RM 11,907,221

33.500

Share Volume 121,200
VWAP 33.354
Change 1.000 (+3.1%)
Trade Value RM 4,042,454

Putting dividend in its right perspective. Those who need income, will probably have to stay with dividend yielding stocks.

For others, dividend should not be the main focus. If you have a long term investing time horizon, invest in great company that can grow its revenues and earnings over many many years. This company, in its early formative year, usually distributes no or little dividends. It may distribute 20% or 30% of its earnings as dividends. Because its business is growing so fast, its retained earnings are put to work at high ROE.

Over the many years, you will find that your investment in this company rewarded you a lot more than the very high dividend yield stock (which are usually slow growers or no longer growing, except for 1 or 2 which do not require any retained earnings to grow).

For example:

Company A: Bought in 1992 @ RM 8.00. Its DY was probably 1.5%. Today, it has grown its earnings many folds and its dividend per share is RM 2.00 giving you a DY based on historical cost of 25%. Of course, its share price has appreciated a lot too.

Company B: 2005. You might have bought this stock for RM 2.00. At that time, it was growing fast. Its DY was low but it has been paying increasing dividends due to its increasing earnings. Today, its dividend of 70 sen per share, is a DY of 35% based on your historical cost of RM 2.00.

Note that in bought these companies, the dividends received were many times better that the high dividend yield stocks that did not grow over the same number of years.

>>>
JohnD0ugh

“To solve a problem, you need to remove the cause, not the symptom," said Liezi. Apart from Laozi and Zhuangzi, Liezi was also one of the most significant Daoist thinkers who lived in ancient China.

Solving a problem demands handling the root cause and not just the symptoms; the NAV discount is just a symptom of the underlying problem that your Fund needs the right type of shareowners, which it had for many years before the wrong type came in and caused the NAV discount to surface and persist.

By increasing your Fund's individual share ownership, we are addressing the root cause and finding a more lasting solution. Once again, do not let any investor who refuses to think and act like a share owner destroy a precious gem like your Fund.


i Capital.biz Berhad 2Q2023 Report
>>>

Nothing to do with "root cause."

It is the nature of closed end fund to trade at a discount.

The huge discount that prevailed for many years in iCap was reflecting the poor performance of the fund in those years.

Many long term share owners were disappointed when the fund attempted to time the market, by keeping a lot of cash in anticipation of a big downturn.

Approximately
200,000 shares traded
RM 6 m transacted

Calvintaneng was so sure in his post.

Calvintaneng has fill vision and saw his favourite promotion counter Netx, dropping a negative 10 bagger.

😀

Fundamental approach

Paying good and increasing dividends
Fine earnings record
Excellent financial position

Rule 7: Hold onto to the 1 rising stock for longer period than dabble with a dozen stocks for a short period at a time. But which stock will rise?😀

Rules to follow:

1. Do not follow advisory services. They are not infallible.
2. Be cautious about brokers' advice. They can be wrong.
3. Ignore Wall Street sayings, no matter how ancient and revered.
4. Do not trade in over the counter, only in listed market where there is always a buyer when you want to sell.
5. Do not listen to rumours however well founded they may appear.
6. The fundamental approach works better than gambling. Study it well.

Insiders

They know everything about their companies.

However, they may not know everything about the sentiment of the market regarding their stocks.

Buy on reaction

Buy on dip

😁

Plantation stocks going up. Buy! (TSH @ 1.78)😀
Plantation stocks dropping. Buy! (TSH @ 1.10)😀

Buy on reaction

Buy on dip

😁

Plantation stocks going up. Buy!
Plantation stocks dropping. Buy!

I am rumour mongering here. Perhaps DLady's recent price changes had something to do with this counter. ????

Isn't it safer and cheaper simply to make up our minds that momentarily the stock maybe somewhat ahead of itself? We already have a sizable profit in it. If for a while the stock loses, say, 35% of its current market quotation, is it really such a serious matter?

Again, isn't the maintaining of our position rather than the possibility of temporarily losing a small part of our capital gain the matter which is really important?

Are we trying to measure something with a greater degree of preciseness than is possible?

Is it really of such great concern whether at the moment the stock might or might not be 35% overpriced if the growth rate is so good that in another 10 years the company might well have quadrupled?

That which really matters is not to disturb a position that is going to be worth a great deal more later.

"AN outstanding stock has become overpriced and therefore should be sold."

What is more logical than this? If a stock is overpriced, why not sell it rather than keep it?



Just what is overpriced?

Any really good stock will sell and should sell at a higher ratio to current earnings than a stock with a stable rather than an expanding earning power. After all, this probability of participating in continued growth is obviously worth something.

>>>
Posted by Sslee > 4 hours ago | Report Abuse

If you only used forward earning or EBITDA multiple or ROE to value a company then a high debt or even negative equity company like CapA will come out on top.
>>>

Look for ROA>10%, ROE >15%, conservative financial leverage of <1.5x.

Except for banking stocks: ROA of 1% to 1.5%. Asset/Equity 8x or so.

An undervalued company may at best give you a 100% or 200% return. OTOH, Fisher's method allows you to have multi-baggers kn your portfolio, with greater returns at low risks.

Cut loss would have been the right thing to do, retrospectively.

>>>
Posted by Sslee > 15 minutes ago | Report Abuse

I lost 50% of my capital on xingquan thinking I can depend on Bursa SC to protect my interest. How naive I was then.

Nowadays if I smell something is not right I am the first to run fast fast.
>>>


The difference between a gruesome and great company.

Xingquan will never be in my portfolio based on my investing criteria.

>>>
But just remember do not lose your 50% capital no matter how good that stock can be.
>>>


I have experienced a few times when a great company's share price corrected severely.

Among the reasons:

1. It was obviously overpriced.

2. There were some bad news about the company's reputation or its business.

3. The overall market collapsed (in a severe bear market).


Your role as an investor is to focus on the business. The market price should not dictate your valuation of the business. As you know the market can be irrational in pricing a stock.

Price your purchases and selling, do not time the market.

A great stock can be held long term. Always buy at fair or bargain price. Never buy at high price. You may choose to sell some at high price. If you choose not to sell at all, it will be fine in the long term too, so long as its fundamentals remain intact.

>>>

Posted by Sslee > 1 day ago | Report Abuse

Common Stocks and Uncommon Profit.
Do you know Insas growth it NAPS 30/6/2014 RM 1.728 to 30/6/2023 RM3.375 a CAGR of 7.72%
But the NAPS growth did not reflect into its share price.
Why?? Inefficient of market?
>>>>

Read the section "The Hullabaloo about Dividends". Philip Fisher explained very clearly how a company should employ its retained earnings.

If it can reinvest its retained earnings to grow at a high ROE, let the company do so. Dividends may not be important. Do not just invest because of High DY as these companies, except a few, usually have slow growth.

Also beware of the Company retaining a lot earnings but not growing, or has low ROE or even destroying value (running losses). There are many reasons why the management is retaining too much earnings not required for company's ongoing business or growth.

>>>
If you buy 10,000 shares at 60 sen, sells all at RM1.10 your original RM6,000 becomes RM11,000 and with that amount you can later buy back say, 15,000 shares at around 70 sen. Then sell the 15,000 shares at RM1.20 to get RM18,000. Later when price drops back to say, 80 sen, you can buy 22,500 shares. And after selling off 22,500 shares at say, average price of RM1.30 you realised a total of RM29,250 , that's a gain of RM23,250 from your initial cost of investment of RM6,000 , almost 4 fold gain

>>>>

Read Philip Fisher's book. He explained from his long experience which method has given the better returns with lowest risks.

As an investor, it is better to discuss a stock with someone who disagrees with you. This is often more beneficial.

SSLee. Your method is fine too. Buying the share when it is obviously undervalued and selling it when it is overpriced. Then do this repeatedly. Benjamin Graham did this during his lifetime of investing. Warren Buffett did the same during the early phase of his investing, until he bought into See's Candy.

Even in Benjamin Graham, he made most of his wealth buying and holding onto a great company for a very long time. This was Geico. The gain in his single stock Geico, outstripped and overwhelmed all the gains in all his transactions using value investing method. Why?

Philip Fisher shared a very powerful investing method. You have to focus on growth. (Stay away from froth! These are non-sustainable). The companies with great businesses are where you hunt for the enduring multi-baggers.

Take DLady. It has dropped from 65 to 20. But for those who bought in 1993, the 6400 investment grew to 112,000 (28 per share) today; excluding the dividends. Including the very big and growing dividends, until the last 4 years, those who have invested into DLady in 1993 is riding on a 20+ multibagger.

At the price of DLady today, its upside gains >> its downside risk. Its business is facing more competition without doubt. How is its fundamentals?

Upside. RM 30? RM 40? RM 50? RM60?

Downside RM20

Ch😗😗😗arlieM.

Not a surprise.

Fisher put his money on investing in long-term growth stocks, with very robust competitive advantages that were capable of being sustained and increased over time. The price paid for them was not as important, since if the company performed well it would be able to sustain a high multiple.

>>>

xiaoeh

sold my Jtiasa too too earlier
now hope it can come back below RM1 for me to re-enter...
sorry to those who still holding it and do not beat me....

27 minutes ago

>>>>


When did calvin ask you to sell??

Management's of outstanding businesses would almost certainly be finding uses for surplus cash and not just piling it up.

Buy stocks because they are outstanding and not just because they are cheap.

Philip Fisher's book
...attempted to show the basic principles of successful common stock investment
....what type of stock to buy
....when to buy it
And most particularly,
.... never to sell it - as long as the company behind the common stock maintains the characteristics of an unusually successful enterprise.

Calvin if you wish to broadcast, at least write sensibly and put your ideas and reasonings in a few words which make easy reading and sense. What you have posted so far are just noises. Cheers.

Calvin is do dishonest. Lsacks integrity. Very sad indeed.