The oil&gas properties should be worth the amount on paper.

Also have these 2. Petronm bought long time ago at 7.8


Fabien Extraordinaire petronm and favco also looks nice
28/03/2018 15:25

haha i have quite a few co's.

Biggest position is timecom and rcecap.

Looking at a few other co's. WCEBHD and liihen looks nice. If you have US account, facebook looks really nice now.

Why very cheap? If P/B why not just buy INSAS?


Posted by derrtan > Mar 28, 2018 02:39 PM | Report Abuse

0.47 really very cheap but not dare to go in..recovering already

Is the value zero ah?

Only the PPE impaired this round btw.

Equity left is 9.5 bil. Impair the goodwill, which like i said is not real. You have 1.5bil left. Another 1.5bil in ppe, then whole company worth nothing d.

They couldnt make a profit this round. Its as if the entire company can make money just to pay interest on loans.

Insas is one
Facbind is another.

dunspace Hey jon, mind mentioning the other 2?
17/03/2018 09:18

the drink is really popular in Saudi Arabia for some reason.

the malays and arabs like it alot. Diff demographic i guess.

Possible. Have not done the calculations that deeply.

Felicity,

If it drops below 80 sen, i dont see much change, since the conversion price is not yet determined?

Bolui = No money.

Hopefully it drops abit more by the end of this month. Got some money freed up.

yeah, mine takes only the super long term investor perspective.

For the traders etc, theres alot to be made selling the warrants etc when sentiment turn good during when the highway is completed.

Too much tied up in inventory and trade receivable.

paperplane Hehe. Wait and see. Below 0.40 real cheap oh
26/03/2018 21:39

If you dont subscribe.

Purchase cost: 1800*RM1.11 = 2000
Value of your shares: 1800*Rm1.58 = 2844
Margin of safety:30%

You will be diluted to the favor of shareholders who subscribe.



Mar Yung Chern hi jon,

If decide not to subscribe right issue, is the fv dilution same as your calculation or even worse?
28/03/2018 08:53

Felicity,

Hmm, I think you are right. Using your structure

For every 12 shares owned, the rights is to purchase 5 RCULS at nominal value of RM1.00 and conversion price is RM1.68. No warrants.

FV of 2.35, diluted will be RM2.15 ((2.35*1200)+(1.68*500)/1700)

Cost of investment:
1200 shares at RM1.11 = RM1332
500 RCULS at RM1 = RM500
Conversion of 500 RCULS RM0.68= RM340
Total: RM2171

FV after dilution: RM3660 (1700*2.15)

Margin of safety: 41%

The margin of safety remaining after using your structure is higher probably due to less cash called on a percentage basis 63% vs 89%.



In my research, when I provided for the additional funding. I did not specify if it is borrowings or equity based.

This i think, fattened up the margin of safety in my calculation a bit. Since it did not take into account the intrinsic value per share and how it will be affected if money was raised via equity while prices are at low valuations versus a loan.

This is why ladies and gentleman, you always make sure you have a large margin of safety, so that when you screw up your calculations, its still a good investment!

Having said that, I think the sheer margin of safety (37% despite using only 8%IRR and other conservative estimates such as zero growth etc) still makes this a really good investment.

I think ill buy some tomorrow. Felicity, would you prefer the warrants after the cash call, or would you rather buy more now and go through the cash call?

This is likely to be my structure for the next 5 years, until i have a silver of a track record. Good record, can start a proper fund. Bad record, manage my own money.


2 options.

1) I guarantee your capital plus the highest prevailing FD rate in Malaysia, 3,5 to 10 year lock. If you want put alot, a long ass lock. 60% above that FD rate is mine, 40% is yours. I wont take more than 50% of my own equity as i dont want to over leverage.


2) No profit. Win or lose you keep. Ill just manage your account.

I wish more people would do right issue like how aeoncr did. So little dilution.

WCEHB is only 3% in my current portfolio. Its very heavy on RCECAP and Timecom ahah.

I'm not a fan of this structure. Assuming all the warrants and RCULS is to be converted, which it will considering the timeline, the price and the prospects of the company. You are looking at a 111% dilution.

Using my most conservative estimate. And assuming all RCUL and Warrant conversion done at RM0.84 and RM1.04.

Intrinsic value of RM2.35 per share, turns into RM1.58, fully diluted.

Previously, lets say you hold 1,800 shares. At a cost of say 1.11 each. You paid RM2,000 for what is worth intrinsically, RM4,230. Margin of safety of 53%.

Lets say you fully subscribe to the cash call, convert RCUL and Warrants.

You now hold 1,800 shares, 1500 RCUL and 500 Warrants.
Your cost is now,

RM2000 for the shares
RM750 (0.5*1500) for the RCUL and Warrants
RM510 (1500*0.34) for the conversion of RCUL
RM520 (500*1.04)for the conversion of Warrants.

You paid RM3,780 for what is potentially worth RM6,042 (3,800 shares X RM1.59). Margin of safety of 38.5%. Much less lucrative imho.

But lets say, you manage to buy up more of the warrants and RCULS during the issue. Could be worth quite a bit.

The 5 year tenure of the RCUL and 10 year tenure for the warrants is insane.

Id much much rather, they just do a bog standard RI share placement. Or, sell the rimbayu and make this a pure highway co.





Posted by newbie911 > Mar 27, 2018 07:00 PM | Report Abuse

Jon choivo, ur portfolio very heavy with wce, will u suggest to buy on weakness?

Market reaction is negative, because nobody likes cash calls, unless you have a proven track record at making alot of money. Like aeoncr.

WCEBHD, does not have that, at least explicitly. I think it does. So ill wait.

https://klse.i3investor.com/blogs/PilosopoCapital/150357.jsp

From my calculation here, it is worth RM2.35 per share at minimum. I may need to recalculate it to take into account the potential dilution when the RCUL and warrants are converted.

If it truly is worth that much. I can see why all the major investors are ok with the 2-3 cash calls over the last 3 years.

Imagine, if 2-3 years from now, each share is worth 2.35 or more. This is a chance for the investors to buy more shares at a cheap price.

I dont mind the cash call, as i meant to increase my position from 3% to 10% anyway. I'll probably round up my shares for the cash call. And fill up the rest with the issued warrant or RCUL.

As always, if you think any of my assumptions in it is too rich, or i am coming from the wrong perspective, or discounting any potential risk too much.

Let me know. If i'm wrong, id rather sell now.



Posted by Mar Yung Chern > Mar 27, 2018 03:19 PM | Report Abuse

Thanks,

so do you think it is worth for this rculs? but why market reaction to is as negative

Yes may, exactly.

1 Warrant for 3 RCULS
5 RCULS for 6 shares.

So if you buy, you need to buy shares in 1,800 sizes, Ensuring you get all the RCULS and Warrants. Which in this case will be 1500 rculs, and 500 warrants.

So at 0.5 per RCUL. You need to pay RM750 per 1,800 shares.

It was expected.

tiptop168 Is good news?
27/03/2018 08:58

Lucky. I bolui liao. Haha


Jun Yu bought more today
27/03/2018 03:31

Don't want write so much. Whole page also my face. Not sien meh.

Yeah, you cant short, no options, no derivatives. No bonds on the market, no commodities etc.

Construct what portfolio lol.

Use common sense can d.

In a crisis, correlation goes to 1. Every single asset class drop whether or not it is related.

So much for all that portfolio construction. In Malaysia, portfolio construction for retailers is largely a waste of time. Just sendiri be smart, dont expose yourself too much to one stock or industry.

It is people with CFA's who caused the financial systems to crash in 2008. Not OTB types.

Then it shoot up, and you lose money hahaha

qqq3,

I am taking the CFA.

Im not saying you should be constructing portfolio properly for risk management purposes. I'm saying, unless you have a large enough amount of money, and access to so many asset classes. As well as knowledge in so many.

You're probably wasting your time and money.

I think this is for traders.

I dont really care for designing the portfolio. Maybe its cause im not that good, and it does not really matter to me.

I just focus on finding good co. And make sure my exposure is large, but not too large. Ie max exposure is 25%.

Maybe when i have like a few million, can now consider structuring it to have wide exposure industry wise.


Posted by qqq3 > Mar 23, 2018 06:30 PM | Report Abuse

portfolio design is the skill and knowledge of the designer and the risk appetite of the customer.

But if they up, would your philosophy be buy more counters to diversify?

Haha

Posted by hollandking > Mar 23, 2018 06:12 PM | Report Abuse

last year most counter drop almost everyday, unless u r gain is from specific counters, if u open more counters ,the great your chances of making losses.


Just hold only. No need think so much. Make sure you collect cash, so if really drop till stupid, can buy.

Posted by CharlesT > Mar 23, 2018 06:06 PM | Report Abuse

Mkt bad most people will lose money lah
Mkt good (2017) most people will make money lah

It's time to test yr real Kung Fu when mkt is bad

Haha, i dont think i know OTB beyond knowing who he is on i3.

Yeah, i think we are coming from completely different perspective.

https://klse.i3investor.com/blogs/PilosopoCapital/150345.jsp

I wrote something similar.

Ahh,

I see. I do focus on that as well. but i also have a belief i abide by.

There is no company so good, that a high enough price will not turn it into a bad investment. And there is no company so bad, that a low enough price will not turn it into a good investment.

My favorite companies are of course, good companies at fantastic prices. But they are hard to get. But if this market continues, it will be come alot easier!

How do you mean, care to elaborate?



qqq3 jon

actually it is the other way round.....there is less certainty about intrinsic value and more certainty about what is a good company/ good share.
23/03/2018 15:22

FLBHD
INSAS
PLENITUDE
DAIMAN

Etc etc etc

Really like damn alot lah, the whole market is cheap now.

But if you want the predict next quarter stock, because you expect better result and thus illogical (because it does not take into account that this low price is temporary, and that they are cheaper companies around) price movement upwards.

Muda is a very good pick.

Liihen
Favco
Latitude
Prlexus
RCECAP
MAHSING
KSL
TAMBUN
WCEBHD
PETRONM etc etc etc

Do note, just because fundamentally better, does not mean that price will move upwards faster than muda.

The short to mid term movement of price, nobody can predict.


ronnietan Jon Choivo, which are 10 companies that are "better fundamentally?"
21/03/2018 15:54

Never said he was a good businessman. Hahaha.

Either way, he has to be, go take out RM 1mil and start a business. In 10 years, will you even have your capital?

But BJCORP is definitely severely undervalued, anyone can see that.

VT is a good businessman, but he does not have a shareholder oriented mindset. He has a BJCORP oriented mindset. He wants the business to grow, even if its at the detriment of shareholders (odd i know).


Posted by sell > Mar 23, 2018 03:03 PM | Report Abuse

A good businessman must make his business profitable but it seems BJ Corp keep losing money every QR.

Because he is a businessman, not a stock trader.



Posted by andylee1919 > Mar 23, 2018 11:07 AM | Report Abuse

Why VT keep on buying in large amount of shares?

Haha qqq3,

Different strokes for different folks.

You place more care on volatility of price. And you consider it risk.

For me, price volatility is not a risk to me. Risk for me is permanent loss of capital.

If i buy an overvalued company, in my mind, i just made an instant loss, because if i were to buy a private company, i would never touch it at that valuation.

Now, if i could predict prices with a high accuracy and have an edge in it, i would be a trader. But i can't.

The only thing i know i can do well in, is being somewhat accurate in determining a range of intrinsic value for a company.

So my only criteria is, discount to intrinsic value.

Now, i definitely do feel a little inclined and have opinions on the market, and where the price may move according to the charts. But this does not determine my investment. But i may lean a little here and there. :)

I am still in audit, the fund is something i do on the side.

It is, if you want every cent and every investor.

I don't. I want only the investors who understand my philosophy perfectly (its pro's and con's), willing to give long term money (3-5 year lock)

But its still stressful, knowing that people are relying on your. And this is their savings built over a long time. Other than their family, this is probably the second most important thing to them.

I have to say, for the last 2 months, i did consider just paying everyone back with interest and just invest on my own. Its easy for me to just take on the paper loss, because i know its not real, i know what my stuff is worth.

But it my not be so easy for others. However, they have my word that principle and profit is guaranteed. And they know i am unleveraged and have enough cash in hand to pay them all now if they want.

I guess we'll see in 5 years (at least) if im possibly any good as an investor, or just good at talking. Bu we'll know for certain in 20. I hope i last that long.




Posted by qqq3 > Mar 23, 2018 02:25 PM | Report Abuse

choivo capital


so now you are in private equity and asset management?

asset management very tough job. Every client have different risk appetite.

KLCI big caps are very overvalued, that's why our KLCI index performance over 20-30 year less than FD.

Conservative managers who only buy big caps are not conservative. SAPRNG is a big cap.

You are only conservative if your conservative when it comes to valuation, and that can come from any stock or asset class imho.



Posted by qqq3 > Mar 23, 2018 02:28 PM | Report Abuse

last 12 months, the big caps and the conservative managers did well.


the cowboy ones have their cowboy methods exposed and found wanting.

Negative 12%. :)

Its still ahead of ACE drop of 18% and Smallcap drop of 15%. But it still does not feel good.

However, i know all my stuff meet my investment criteria, have good value to begin with and is cheap.

In addition i am unleveraged, with excess cash to put in if it drops further or pay back investors who cannot stand a bear market.

So all these give me give me optimism for the years ahead.

Just waiting for elections, as i have a feeling PR will win, and if they do, the first few weeks will have alot of discounts.

Ill go on 25-40% margin if my portfolio drops more than 30% this year.

CharlesT Hows yr return so far this year? -15%?
23/03/2018 13:56

Yeap, but its the best kind of debt, can pay back whenever you want, can pay the interest whenever you want. Interest is fixed if i'm not mistaken. Have not read in deeper yet.



Flintstones Contrary to the popular opinion, mahsing is heavily geared with their sukuks. Further interest rates rise will impede their balance sheet and also revenue
21/03/2018 13:41

People used to bet wont drop below 80, then 70,60,50.


Posted by Pmaster > Mar 23, 2018 02:07 PM | Report Abuse

I bet the price wont drop below 0.50.

Wow. This is insane.

Limpeh is a chartered accountant.

Its not about your paper qualifications, its about your mind and how you think.

qqq3 accountants are accountants but can accountants think beyond accounting and get into investing?
17/03/2018 00:43

Their contracts is fixed at the high prices.

Thats why they make more money despite cocoa prices going down. Question now is, how long longer do these contracts last.

Why drop, 50PE not enough reason ah? Even Google only 30PE. Apple 20PE.

You telling me you expect Globtronic to grow faster than apple ah? Siao meh.

I still remember the days when Airsia drop from RM3 to RM2.1 Every day 1-2 sen non stop. Look at where it is now.

The price can go everywhere and anywhere. The only thing we can try and understand and estimate is the fundamental intrinsic value.

At the end of the day, what is investing but the long term arbitrage between the price of and the intrinsic value of the company.

We should stop caring so much if price drop 1-2 sen every day or go up 1-2 sen.

The only question now is this. Is it worth around 2.46? Which is my estimate.

If it is, no need worry, just buy as it falls. But if it isn't, and is actually lower.

We have a problem.

Remember guys. This is a trading buy. Not an investment buy. Size your bets accordingly.

Even using forward PE etc, i can think of 10 companies cheaper and better fundamentally.

But if your focus is on predicting the next quarter result. This one is a pretty decent bet.

Now it looks very attractive.