I suppose if there's such thing as karma we probably won't need to invest anymore. Since good people will automatically become rich and bad people will die young and poor. And if you can define 'good' or 'bad' that is.

Oh I see. Such a deep humour, hard to relate. Indeed, you have been wang-ing non stop.

I didn't get that joke. But still a hard sell

So hard sell

Fact - Inflation is bad for business that has heavy fixed assets.

Correlation is not variable, it is to estimate the accuracy of your prediction. But if you don't need correlation, that's fine.

And I never understand why academic, theoretical etc get such a bad rap in here. Yes, academic most often means 'no skin in the game' or more simply, they are impractical. But I never understand why that apply so much to me given that I have my money in the market just like everyone else. Why would I learn something so theoretical and impractical when it has no practical use to me making money in the market?

My understanding of academic are works that are well-researched, peer-reviewed, tested, backed by evidence and data. Anything that needs to be tested and verified somehow gets categories as 'academic'. But if these so-called academic stuffs are called theories because their have undergone rigorous testing, using law of large numbers, statistics to prove a case and help me improve my understanding about the market and make less mistakes, what is the problem with academic? Should I prefer something everyone considered 'practical' yet unable to offer a shred of evidence why it works? Something called 'practical' based on their own personal experience and intuition? I would gladly pick the theoretical over practical any day.

I build my case based on "HY is not that different from all other refineries", you build your case based on "HY is one of the kind of its own"

@Probability, we agree to disagree. Whether you call me professor, theoretical etc that's fine with me. I know what I don't know. We can throw all the theory and information out, ultimately it is the ROIC going forward that counts. What you wrote in sales and margin determine ROIC level. ROIC drives valuation. So:

1. What is the ROIC for refineries around the world? A ballpark 7-15%
2. What is your impression of HY ROIC? 40% based on estimated sales & margin
3. What is the correlation coefficient between ROIC and Sales in energy sector? 0.2-0.3 based on what I have.
4. What's the correlation coefficient between ROIC and profit margin in energy sector? 0.63-0.89.

You can make an estimate about your accuracy of 40% ROIC based on these information. Your figure doesn't take account into regression.

@vince, what's the issue with Karex? I wrote "At 48x P/E, the market is putting high hopes for Karex to deliver it. If that is a success, the current price will be a steal." Don't you see the skepticism? I write for analysis, I didn't write because I recommend them. Besides, 35% down, does that tell you anything about my judgement?

Interesting that to see forward looking means 'one year'

90/10 rule. In forum, 90% of the comments are pure BS coming from both side - those that support HY and detract HY. 10% are worth listening. As investor, you need to take in those 10%, whether those information agree or disagree with your viewpoint, and constantly updating your view, probabilistically. How well you can hold conflicting information inside your head and make the correct decision based on the odds you have will determine your long term return.

One silly thing about comparing HY with consumer products i.e Nestle is that there's huge difference between a price taker and a price maker. Consumer products, to an extent (not all), are price maker. They have the pricing power to determine the selling price of their own products. This means they have a higher ability to protect their profit margin.

In contrast, commodity players i.e HY, palm oil plantation companies are more of a price taker. Their selling price is determined by the market. No one goes into the market and demand "I want HY petrol/oil". This means, leaving monopoly/niche issue aside, any savings/upgrades is unlikely to change the dynamic of the business, since most of the cost savings are pass onto the consumers.

This is the reason why Berkshire shut down their textile business even though investing in machinery can result in substantial cost savings. But once every other competitors have done that, the playing field is level once again. The consumer benefits all the cost savings, not the business. If HY is going to do whatever upgrade, you have to ask, where does those cost savings fall into? Is it going to really fatten the profit margin of HY given that they are a price taker?

He jokes to the point he believes his own joke as real

Welcome back Henyuan. As usual, nothing substantial to say.

@Depeche, not sure who you are referring to. I never know investing is so you can 'beat' someone. Do someone have to beat someone? So to make his balls bigger? Investing is about achieving your own financial goals.

Inaction is a risk for sure. Making 1000% gain without knowingly taking larger than necessary risk is a risk itself too. Great return has little meaning to define the risk level one is taking. So don't tell me how much you and your gang have gained. Again already explained, risk doesn't work in a linear way. Yet someone come and tell me how much they've made - a classic example of linear thinking. Not knowing this fact and the arrogance of timing the market is the real risk of so-called experts. Name calling further validate the sheer cocksureness of not knowing what he is talking about.

Risk doesn't work in linear way. The risk of an amateur can come from inexperienced; the risk of an expert can come from overconfidence and arrogance.

The fact that you can't find an ROE 60% stock in Bursa or anywhere in the world is precisely the reason why when you see one, you have to have a strong skepticism build in place

Why would I need to challenge Morgan Stanley? It doesn't change what you said is BS

Let's do a dissection on how to detect BS.

1. Imagine if coming q4 result is going to b RM1.20-1.40 eps.. TOTAL EPS would b RM3.6-3.80.
KING OF EPS YEAR 2017 AWARD IS WORLDCHAMPION HENG YUAN !!!

How high or how low or what the EPS is has little to do with the valuation of a business.

2. Nestle is not HY and DUTCH LADY is not near too

Not understand that lead to a misconception such as comparing EPS with irrelevant stocks. And if that has any meaning at all.

3. With this superb earning, will BODs consider to distribute DIVIDEND? If BODs rewards shareholders by giving payout RM0.80-1.00 DPS (30% of eps). What will happen?

Of course there's every chance of a stock declaring dividend, and no doubt that will cause price to surge. But again it has little to do with valuation itself.

4. HENG YUAN being the new MORGAN STANLEY small cap index member and bursa 70(i had forgotten). Is FFM/LFMs going to buy in boh? What will happen to share price leh?

Whoever or whatever index or FM are going to buy, again, has nothing to do with your decision. Their decision matter to us the least.

Sadly, there's no sifu in stock market, there's only probability of right and probability of wrong

What will an EPS of 3.80 mean?

Satan does the highest EPS in the world mean anything?

@nyama there is no common sense in stock market. If there is 'common sense', there will be no profit to be made, since everything is easy and understandable.

Think it in term of FD account. You have 2 FD accounts. Both gives you 20% of interest per annum. The difference is that one, you can let the interest earned sit in there and let it compound; the other, you have to take out the interest every year. So if you invest $100, both cases you get $120 at the end of year 1. One you can reinvest the whole $120; the other you've to take out the $20.

In this case, the former is consider a 'growth' account, it is great. You reinvest all the earnings and compound that at 20% p.a. The latter is great too. You took all the interest out, so no growth, every year reset back to your principle. But you still get 20% p.a regardless. Yes, the former is definitely better than latter. But latter is still terrific.

So in case one, your $100 return will look like 120, 144, 173, 207, 248, 298 etc
Case two, your $100 return, incl. what you get from interest, looks like 120, 140, 160, 180, 200, 220. Yes, if you can find the first one, by all mean get that one. But no stocks can grow that way forever, it will eventually become like the case two. Case two means more hard work. The $20 you collect every year, you have to find another investment that gives you the same return, which is 20% in order to match it. That underlies the dilemma of companies with high payout ratio. The dividend you get means you have to find somewhere to reinvest. And most of the time people just spend it, losing the power of compounding.

@pjseow

Disagree with zero growth is not investable. As you mentioned a higher ROE the better. A company can have high return on capital but due to lack of investable opportunities, decide to return most of the earnings to shareholders. That would still mean shareholders return should track the return of the business over the long-term. Sees candies is a good case in point.

Now I see what you called 'high class forumers'

Someone can't comprehend sarcasm.

You are welcome

What kind of nonsense is this? Anyone with 1K can buy a stock with $15. Rich and famous might have correlation with good investment decision but definitely not causation. Don't confuse correlation with causation. Plenty of rich ppl make dumb decisions

Satan are you creating your own enemy? You sound emotional.

That's why I say you don't understand opportunity cost and market. You want to judge someone based on their performance. You don't know how to exercise independent thinking other than using number to judge someone's success

John doesn't understand opportunity cost

Such is the naivety of people that associate themselves with share price movement. The inability to understand randomness and illusion of skill.

I don't see how whether im vested in HY has anything to do with my reasoning skill. Just as a personal trainer don't need six packs to 'qualify' himself to teach body building. I don't need to talk to a person to know the nonsense or charlatan of a man. Such is the illusion that everyone follow those that shout the loudest and makes themselves look the most convincing. They are the hedgehogs. The crowd love them.

If you always want to resort back to how much you've gain in HY in order to win an argument, please don't bother. IF you want to resort back to how much HY has gone up in order to win an argument, don't bother either. Anything with personal attack to make your point, please don't either. It just means you can't argue and it's going to make you look worse.

Oh hey Henyuan you are back. Your voice follows the movement of the share price. The higher it gets, the louder it becomes, and the more vulgar they are. Share price does have a positive correlation with confidence

Yes yes raider, your wonderful story ability make William Shakespeare and Charles Dicken looks kindergarten. So says someone that asset value is higher than EPV.

That's a sarcasm in case you don't see it

'Today commenter is all super investors' - yea right lol

Hindsight bias with an illusion of certainty and predictability.

I do know I gain a lot for not believing.

This dumbfound me why would someone that value HY at RM40 (at least) wants to sell down for a fast gain. So he can parade his timing skills?

Ask yourself "Do I know how business create value?". If not, you better be weary of your own fundamental understanding and what profitability truly means.

Where are those that "Report general.." here and there few weeks ago.

There is a reason why women almost always outperform men in investing. Men got too much testosterone.

Technically you are still losing money from current trend. If you go casino with $1000, make $1 mil, proceed to lose $998k. You can say you earn 2k with 1k capital, but technically you just lost 998k.

Good one. If today they use dirty trick but causes you to make money because of that, you will do nothing. But now they causes (as if you can proof it) you to loss money, you start going around suing people.

Isn't it interesting that if everyone thinks that Q4 result is going to be good, why would the release of the result in Feb causes it to jump to say RM20?

I am already in my office. DW. Applying linear thinking to nonlinear things, mixing correlation with causation. Good luck

Too many people confuse correlation with causation.

Looks like you migrate here too lol