Many don't come here to make money, they come here to win at all cost, their ego and pride that is.

What's with all this PE discussion. PE is just a shorthand to value a stock, it isn't even a true valuation. And PE is all about earnings. What does earnings tells you? $5 mil, $500 mil, $5 bil, do they tell you a thing about a company? It is like I told you I ran 10km yesterday, does that tell you anything whether I am a good or bad runner? No.

LOL

This is getting funny. Maybe somebody should hire a historian (consider how much they have profit from HY) to write an article about the history of China, talk about all the dynasties, and pay particular emphasize on the hardworking Chinese, so people can know how good HY is going to become. This has to be the biggest joke of all time.

This talks about PE reminds me around 2016 and into 2017 the rage is all about steel companies. Steel price recovers and many will tell you "Well, it is not too much to ask for PE 10', now which freaking steel company actually have a PE of 10 and higher because they have achieve consistent earnings growth? None.

@SmartyAlek I didn't know successful investors can speculate the CNY price to be $25.

There is no logic here. There is no point trying to blame whoever that is negative about HY. If anything that contribute to the drop, it has to come from those brothers that you congratulate few weeks ago and he congrats you back wishing you Merry X'mas, he is the seller.

I am surprised with so much talks about fundamentals (enough to fill Harry Potter trilogy, LOTR trilogy and the Bible), yet with a little price drop, is like hell broke loose. The person that tout solid fundamentals suddenly gets so concerned about the price.

@alex there is no need for me to lecture on cut loss. I can't lecture better than the market. So humble yourself before the market humbles you.

@Musang just to be clear, I've never reply or comment on what you have to say, I write my own lecture, you do your own stuff

Someone don't understand petrol = many companies, coca cola literally means only 2 companies

I never ask you to stop your nonsense. So you shouldn't give me advice when I do my lecture. Fair play?

I certainly don't have Nestle or Dlady, just as I don't buy into the stories that a stock is the next Nestle. I just love to lecture as much as you love to talk nonsense.

It is very predictable that when a stock is going up, everyone wants to find an explanation to explain what is happening, they will find stories to fit what they are seeing. Illusion of certainty and predictability. As if they can truly know the reasons are in fact the actual reasons.

Same thing happens when a stock is going down. They will want to find a story to satisfy their anxiety and develop certainty. As if they know what is the cause, and if there is a cause afterall. And of course there are also those that try to rationalize to ease their anxiety.

One thing I learn reading all these stuff is you can spin any story and people will buy it. Like "take my money" kind of insanity. When a company wants to venture into new business, citing to have more revenue source, all kind of information will be used to support this action. And when losses happen in the new business, and there are plans to divest 'non-core' operation to focus on core business, all kinds of information can be spin up again to support that very action that is opposed during the new business venture.

Same thing here. When someone wants to believe their decision is correct, he will buy whatever story there is. PE 10? That is a perfect story! Such a beautiful number. 10! Only 10. 10 isn't much to ask. Amazon is PE 299 stupid. All I ask is PE 10. Please PE 10. Soon everyone feed each other the idea of PE 10. It suddenly becomes possible.

One thing you learn is you cannot talk logic or reasoning when people are under the state of euphoria. They will buy any story to justify their decisions, even as dumb as concluding China men are great. As if that has anything to do with analyzing business.

People get confuse between most low PE companies are undervalued AND most undervalued companies have low PE.

My apology. Ego, overconfidence, pride are human instinct. We don't need lecture on how big our balls are.

@siewnam, looks like you confuse between lecturing and thinking. Different skill you say? Greed don't need skill, it is animal instinct.

Why HengYuan is worth minimum RM37.00 and more?
Author: 360Capitalist | Publish date: Wed, 16 Aug 2017, 11:23 AM

This has to be the most absurd article on logic and reasoning. Comparing companies with the highest EPS. What does high EPS have to do with the quality of a business? Get a company and shrink its outstanding share to a point that it achieve highest EPS. Would that suddenly make it better? Nonsense.

KYY latest article is another that defy logic and reasoning. Compare HY to whatever company that satisfy your soul (I recommend Amazon - PE 299), but it is safe to say more have perish under the thinking that their winning stock is the next Dlady or PBB when in fact it isn't than those that have proven to be right in their prediction.

Let's do a thought experiment. If you consider those 4 (PANAMY, BAT, DLADY & NESTLE) as top quality, and that is out of more than 2000 listed companies in Malaysia, your odds of finding the 5th one is 0.0015%. And this comes with a lot of hindsight. (Ironically, not many is interested to find out what makes them true quality than trying to fit another stock as one of the class in order to justify a higher PE). Of course, a stock doesn't have to be like those 4 in order to make you a fortune. But it goes to prove people will buy any story you sell if the message is persuasive enough. And it also shows how equip yourself with some critical thinking skill goes a long way to avoid folly and buy into whatever anyone has to sell you.

@Teoh how do you know people that haven't bought HY is a big loss? Unless you are a physic that can tell what is everyone's opportunity cost? If someone's uncle offer him a business at 10% of its true value and as a result he forego HY to buy his uncle's biz, is that considered a big loss?

@LA777 I think missing out at PBB is not as big of an issue as imagining what you are holding is the next PBB

3iii that's a heavy sarcasm there

As always, they can only go back to their prized winner when they exhaust their argument points.

Well if that makes you happy.

John surely you can print out your total gain on Hengyuan and frame it on the wall so when anyone wants to discredit you, you can take a photo and show them. Maybe keep it in your wallet but that can be quite heavy because ego gets too big. But just dont get too eager, because someone who bought IFCAMSC will come up with their 1000% gain.

I agree with Flintstones, buy HY and Petron, so you can look successful. It works on your ego perfectly!

Sexy babe doesn't understand randomness, how to differentiate between skill and luck, focus too much on outcome than process, underestimate chance and overestimate skill, fooled by insider view, neglect base rate and outside view, thinks in linear, can't deal with uncertainty. Logic comes from reasoning and deduction. And after so many examples you still don't get it. Let me know if you are interested. I can recommend you a few books.

Whether I own any shares in Hengyuan or not doesn't change the fact that a person that fails to predict 3 things tell you a lot about the quality of his TP than you ever need to know.

Interesting to see someone that write "i didn't expect" 3 times in a short post decide to set a TP. It tells you the quality of a person's thinking. It gives you more information than the main salient point of the post which is the 3 reasons.

Alex, according to your statement, that means if you can't find such opportunity, you should participate in crowd euphoria and dance as long others are dancing?

And I don't get the logic "if you can't find an undervalued stock priced at 50% discount, then it may possibly become a value trap"

@Henly I'm not out here to defend FVI or anything, but your statement is just load of nonsense. Don't you think you are contradicting yourself. It is precisely the point that hyper speed causes the value of information to approach zero, so whats your point of trying to be a fast decision maker or glue on the news 24/7.

Now I've own Scientex since 2012, cumulative gain is 700%+ now, can I be the winner please? Every time when I can't win an argument;talk down someone;boost my ego (like my balls aren't big enough), I'll bring this sentence out 'What!? only 100% a year, I record 700% in 5 years or 140% a year'. Stupid.

Haha. I believe you.

And as much as result is important, dont you think comparing your 100% return in HYC with a one year portfolio 9% return is nonsense to say the least?

Of course result matters, but like you said, 10 years is minimum requirement, how many years have you look at before judging someone? Like I say if a fund or investor can blow up after 5 years of great result, is it better to judge based on process or outcome? I would say understanding someone's process give you a better idea of guessing if he will do well as oppose to looking at result.

Well suits you. If you enjoy judging people based on result, just like how you would judge yourself based on your own result, if that makes you happy. Maybe you can ask the FM in your profile picture. I was expecting more reasoning from you instead of haha.

Here is a thought experiment. If I've picked 10 stocks previously (that is worth 2 years of competition with 5 picks each year) and most of them making great return. Now when I recommend my 11th stock pick, for sure you going to buy whatever I tell you, probably even bet the ranch on it. But now, instead of doing that, you ask me HOW did I pick those 10 stocks. I tell you that I looked for my charming star every night - if the skies are clear and my star shows up, that is a buy;otherwise, that is a no-go obviously. Would you still want to bet the ranch on my next stock pick? You probably won't. You know alot more by finding out my process (looking at star), than looking at my outcome (10 stocks winning streak). So I don't understand why you keep comparing ppl's result to judge how good they are.

That's why im never concern how much % return someone is making. If I want to know how good the person is, I'll examine his thought process.

Well regression or not, or how good they are, only they can explain that themselves. But I am surprised why you readily assume just because 2 years of competition you ready to assume they are skillful? Have you not read it is not at all uncommon for superstar traders or even funds like LCTM to shoot the lights out in a bull market for 4-5 years and blow up in one day? So if I do 100% for 10 years and go -90% on 11th year, am I good or bad? If someone win a poker tournament, or any casino games after a 10 games hot streak, would you assume they are skillful? (Don't use the explanation that casino is gambling and investing is not).

Good on you making tons of money. I wish result do proof everything, but the fact is it doesn't. Why do you hate FM by the way, your sentence shows your thinking is the same as FM - "Next day I will Fire the FM if they consistenly underperform their peers". This is what the clients do to their FM, shifting their money from losers FM to winner FM, not knowing regression to mean and how randomness plays a role in investing.

@paperplane, you believe because of your linear thinking

it is interesting to see someone judge a person's skill based on a year's result. Or even 3 years. Showing illusion of causality and linear thinking. What's even more interesting is bringing this type of linear thinking trying to predict crack spread and macroeconomic which is inherently nonlinear and congrats themselves on the astronomical return.

And yes, investing is art & science. But it isn't hard to identify charlatans. They like to hide in the vague words of 'logic', commonsense' but unable to quantify what those words truly means. You can tell from the way they write.

'Fast decision-making' - Overconfidence and false logic that you will lose money if you are a slow decision maker. Unless he thinks he is better than Daniel Kahneman.

'paperplane sifu are better than KC past 3 years when he spot Air Asia, Kesm, Dataprep and 2017 he spot Hengyuan' - false logic that create false causality thinking. Logic that judge skill based on outcome. Classic investing logic failure.

"i continue to earn my 100% in Hibiscus and Hengyuan and u continue 9% in your portfolio lo...not right and wrong ma" - illusion of skill, doesn't understand the role of randomness and luck, how one can be right for the wrong reason and being fooled by oneself.

"Long term? The investment method has change over the past few decade...if 30 years ago u said invest hold for long term still can work for those company like PUblic bank, genting etc...nowadays is momentum trading which we look for 3 months to max 12 months lo" - Overconfidence, illusion of skills and causality again, greed, illusion of predictability.

"Unless u have 10 mil or 20 mil cash like Kyy then ok la buy and keep to get dividen every year...if less that 5 million must have fast capital gain...buy long term? How long is long term? 10 years? 20 years? Keep for next generation? Come on...dont make me laugh lo" - Again same thing.

Someone touting logic and common sense doesn't have much logic coming out from his own words does it?

Most already seen it all, learning from such a 'lesson' will end up with another 'lesson' like 'omg, I should have cut loss instead of being greedy'

Why do you think Hibiscus is a missed opportunities? Just because it is going up on Monday?

Forum is a place for you to get additional information so you can update your judgement - to get closer to the truth, in essence, to exercise independent thinking, that is all what you should care about. But more often than not, people 'abuse' it. People let what others say influenced him, subconsciously. This is especially the case in i3. There is more incentive to say the good than the bad. So the bad gets shut out, producing information asymmetry. And it is similar to like going to a Tupperware house party, everyone around you is buying the Tupperware, do you want to be the one that stands out and refuse to buy? There's a lot of peer pressure and influence going on.

One thing on PE. The PE doesn't go to what you deemed fair just because you think it deserve that level of PE. Plenty of investors perish under the assumption that their stocks should sell at PE 10 for example. Again good to have disclaimer now. How much normalised PE should HY be selling at? I don't know and I don't care. What matters is what the market collectively think what it deserve in the long-term. Just as there are many here that thinks that HY should sell at a higher PE, there are just as many out there that think it shouldn't (silent evidence), or else, going by logic, it would have reached your PE in no time if everyone in the market agrees with you.

One certainty I can tell is: Consistency. Consistency as defined by:

1. Consistency in Return on Capital
2. Consistency in Earnings

Companies that sell at PE 15 or above generally has very consistent ROC or earnings record for at least 10 years. Think LPI, Hartalega etc. Two companies can have the same average ROC but if one has a relatively consistent ROC while the other has a big swing of up and down YoY, then the former will get a higher PE compare to latter. Human crave consistency/certainty (that's why you read news). Certainty carry a large premium. So don't assume a good EPS will move the stock to your desired PE. Again disclaimer time: It doesn't matter if I am praising or badmouthing HY, or if I'm praising yet secretly cursing, it doesn't affect the price, that's applies to your affection on the stock as well.

@Pang72 I can be wrong. But from what I read, your process for buying BAT or HRC is the same, even though the outcome is different - you lose money on one and make money on another, you are still following and buying on tips. If you going to rely on the outcome to judge someone and yourself, you will be the sucker in the end.

@Porbability http://csinvesting.org/wp-content/uploads/2013/06/Greenwald-Earnings-Power-Value-EPV-lecture-slides.pdf - Starting page 11.

I stand myself corrected that EPV value can be lower in the circumstances that management is destroying value i.e misallocation of capital resulting in ROIC lower than WACC (P.15). My own initial definition of EPV is it represent a competitive advantage of a business. But in Bruce Greenwald definition, it means what is being generated from the assets. So business with zero barrier of entry will overtime earn a ROIC=WACC, therefore should only worth asset value.

@Probability I don't understand your explanation of supply and demand. If a stock has competitive advantage then it has EPV, if it doesn't then asset value. This is immutable, and it does not change the fact he never acknowledge his mistake. How can one determine if a stock is cheap or expensive when the tool he use for measurement comes from a flawed logic?

@stockraider Don't confuse with the definition of precision that Warren Buffett's abhor with the precision required to judge if someone knows what he is talking about. Please. Your vague statements is a security for yourself to avoid being judged rather than a clear understanding of the limit of precision. So don't come to me like you know what you are talking.