so much for all the write up analysing CSC. I'll reward you if you get the 4th qtr estimate correct, even if you are 100% off the mark. So anyone that estimate EPS at or below $0.034 (100% above actual EPS) come and contact me.

This is another classic example of how all the overconfident investors can do so much analysis on this forum, long enough to fill the LOTR trilogy book sets, yet miss the EPS by 500%.

It is statistically significant because I think like an entreprenuer and sailang all my fortune.

If I sailang Ekovest in 2005, 10 years later what is my return?

Let's dissect what KC is saying. He wants market cap to achieve 10 bil in 5 years, or 500% from current market cap.

Gamuda and IJM are not similar to Ekovest but comparable, both have 11 bil market cap, with profit around 500-600 mil. To get to that level, Ekovest needs to grow income at CAGR 50%+ for next 5 years non-stop to justify 10 bil cap.

How would one achieve that? That would be either through margin expansion or volume growth or mix of both. Correct me if im wrong, Ekovest is involved in construction and operating toll highway and property development. Margin expansion sounds more reasonable on property development due to high margin, most developers can achieve 15-20% margin, while it is harder for construction and nearly impossible for toll, unless they decide to raise toll fees by 10-30% per year. Even if we consider a 20% margin on property end, with their 7.8 bil GDV, they would have to burn through all of that in order to hit the target, with no more landbank left on year 6 on wards.

Most confusing of all is they wants to maintain dividend while growing 50% yoy. That's achievable if you have ROE of 80%? Again falls back to margin expansion or volume growth, or else how does a company can manage to growth profit for 300% within 5 years with roe less than 20% and still decide to pay dividend?

There's no definitive answers to why fund managers haven't done that well against benchmark, it is like how are you going to separate luck from skills. It can be that indeed these managers are so bad, or it can be that one year is too hard to prove anything, or it can even be that their picks are to encourage investors to trade to increase fee commission instead of picking true winners. Or it can be a mix of all.

@eagle71 - If you go to casino and notice a gambler just win 200% return on his original capital, would you conclude that gambler is a legend? If not then why are you asking questions like why many ppl in i3 can outperform these research houses. I can just as easy find a noob that makes 100% on the last week of December alone, would you say he is better than these analysts?

@eagle71 - Since you mention time horizon doesnt matter. If you hold all the 78 stocks, excluding Suncon and OWG that are not listed 5 years ago, your return for the past 5 years will be 177.5% or average 35.5% including -3.18% this year. You will be the judge if 35.5% per year is considered good or bad.

Even if I only included the 44 stocks that registered negative return this year, their 5 years average is still 31.8% per year or 159.04% overall. Average can be bias when there are stocks that gain alot like IFCAMSC over the 5 years, even using median, you get 9.8% for all negative performing stocks.

Did I critic? I'm just stressing the impossibility of picking stocks based on yearly time frame.

I'm not being negative, just clarifying. You and VG know more about AA than I do. I'm just telling as an observation on other industries. The thing is demand is always hard to gauge, in 2004 many economists had high confident that China's boom will be multi decades, pushing everything from shipping, commodities to record high as more capaital flows into those industries to build ships and explore new mine sites, shipyard backlog filled up, and the subsequent bust. When an industry started to improve with excess profit to be made, there will be plenty of supply of money ready to invest to get a piece of it, that's what AA needs to defend against. Again all these are business observation, you have to decide the price and value.

There's a clear distinction between competitiveness and pricing power. Competitiveness means can a company continue to make a profit while competing with others. If AA has a low cost base or the ability to keep cost on par or lower than competitors, then yes AA has competitiveness.

On the other hand, pricing power means can a company raise price at the rate of inflation or even better, higher than inflation rate. If AA has consistently done that over the past 3, 5, 10 years, one can say they have pricing power. An increase of 4% over a quarter doesn't conclude anything.

While low cost or pricing power can create a moat for a company, moat has to be viewed on its durability. If a company cannot maintain its advantage over the next 10 years, it isnt considered a moat. When applying moat into both competitiveness and pricing power, the questions are 1) Can Airasia continue to maintain the lowest CASK in the world over the next 10 years? 2) Does Airasia has the ability to increase price at inflation rate over next 10 years when there's lack of past record to support that?

Which link isnt downloadable? They looks fine on my end

"To win in this competition you need a lot of luck." - a contestant that is allowed to trade doesnt alter the fact that luck still play a huge role annual return. This sentence is enough to make the whole thing irrelevant

Take risk to win big. Risk means more diverse outcome, so I suppose you mean betting on a stock with potential 100% upside and 50% downside rather than one with 20% upside and 3% downside. in that case, Im more than happy to take the 20%/3% and bet 100 times with you. Do 100 stimulation on both (with equal probability on both upside and downside), $1 will still get you $1 for 100%/50%. While my $1 bet on the latter will turn into $1604-1984. Good luck. I know you will come up with your cut loss/pivot strategy, and turn 100%/50% into 100%/5% like a magic, really? If that is what you like to believe. Business sense indeed.

Fund managers don't cut loss? Really? The fact they have low return is precisely because they have cut loss. Find me a manager than can sustain a 20% loss without cutting.

did one say try not to be early in Matrix, Hohup, Trop? Sounds like you are stepping into the realm of market timing, good luck. If a sector prospect is bright, how can one possibly be considered early? Did you go into steel counter before their results improve? That means you would have likely been trapped as per your comment. Or did you went in after the results? Means you are not early. No fence for you to sit on.

I should write to the CEO of Matrix, Hohup and Trop, and ask if they feel trapped by their share price. Probably doesn't stop them from become filthy rich anyway. If I can have a 95% confidence that I can make 100% profit on an investment within the next 5 years, which imply a 20% CAGR, do I care if I'm trapped for 3 months, 6 months, a year, 2 years?

Let's stretch the theory of cut loss to say 50 years, if you don't read, or learn, or think for yourself, I guess doesn't matter how great is your cut loss strategy

seems like the whole valuation hangs on 6.5% of WACC, care to enlighten how do you come up with that number when there is no debt?

There's 2 ways to look at fundamentals: Short term and long term.

If you want to look at short term fundamentals, you have to match the fundamentals and your buy price against market expectation, which to me, is close to impossible to achieve

If you want to look at long term fundamentals, you can go ask people that hold Mycron since 2007, how they just barely breakeven 10 years later.

Thanks Bizfuneng.

Here. http://www.mtib.gov.my/repository/e-stat%20export%20jan-dec%202015.pdf

Page 3 - Sabah Plywood column

http://www.mtib.gov.my/index.php?option=com_content&view=article&id=2034&Itemid=65&lang=en

Go there > Advanced search > Select year > View > Download file. Yea I calculate price per m3 unit. They only give total export amount on the month from a region on a particular type of wood.

Lower ASP is not a long term concern.

http://www.mtib.gov.my/repository/E-Stats/8%20export%20e-statistic%20august%20%202016.pdf

This year Sabah plywood export is 610 mil, volume 328,464 m3. Translate to RM1,857/per m3



How much is that 5 years ago?

http://www.mtib.gov.my/repository/Statistik/Exp2011/stats-msia-dec-11-maj-tmbr-prdct.pdf

2011. Sabah plywood export is 690 mil, vol 449,861 m3. Translate to RM1,533/per m3


Then how much 5 years prior?

http://www.mtib.gov.my/repository/Statistik/Exp2011/stats-msia-dec-11-maj-tmbr-prdct.pdf

2006. Sabah plywood export is 1115 mil, vol 720,694 m3. Translate to RM1,548/per m3


There's no indication plywood price per m3 decline over the past 10 years. But actually increase as volume decrease. Otherwise the price is pretty stable. Growing CAGR 1.8% from 2006-2016. And if you notice, plywood in Sabah command a higher selling price to Peninsula and Sarawak.

this table is not ideal for most companies because it assume things never changed. But companies with strong moat does have the ability to maintain their ROIC for 10-30 years or even longer without being eroded. While some might have 5 years, some 1 years, rest none.

Or if you can find one that is building their moat, you get an even longer runway.

It is not that straight forward but more of something that improve thinking. High ROIC is prone to erosion or reversion to mean when there's no moat to protect it. Didn't quite get the safer bet part?

Cheoky yes it is very subjective, 8-12% is a safe range, one of the weakness of DCF.

Consolidation in US airline industry result in improvement in return on capital

Market wise, no matter who wins, the US is going to tank as a matter of time. Clinton will delay that (and make it worse down the road) and Trump win will potentially make it more immediate. By the way, no one see Brexit coming.

Politic wise, both are crap. Many people that are voting for Trump ain't because they are racist or dumb, it is because they are sick of the 'establishment'. Trump is their only gamble even if it is a bad one to challenge the status quo because he doesn't come from the background of politics and he speaks what he thinks unlike most politicians, well that got him into trouble.

Someone forgot to tell me 3 years are long

Question A & B - Idiotic questions. I would spray blood if im the mgt

yea if the next best idea in portfolio has already reached the desired allocation %

thanks for the feedback. It is a 3rd to 4th draft that needs more draft to refine it, so no, not a reflection of my mind, just a progression of my mind.

Perhaps people does get confused by those twist and turn arrows, if that is what you mean by 'complex' and 'confused'.

Thanks TabulaRasa, that makes perfect sense, my calculation was incorrect.

That beats the one that have no balls to write isn't it

Shaun you could be right and my interpretation wrong. I thought about that too but I'm thinking most analyst use the inverted version of the formula. Kevin lim did state gearing and net gearing ratio of not more than 0.3 or 0.1 times which I didn't included in here. And also the fact that APM ability to only serve half of the interest expense seems a bit out of common logic for me given the rating RAM assigned

Not to be horse behind cannon, but I did briefly mention Gadang in here http://klse.i3investor.com/blogs/JTYeo/102530.jsp

And again, depends on your buy price which determine your 'safety'. Talking about the positive side of a stock is normal, but I believe more weights need to be given to examine the downside

so hard sell

lets not apply 'contrarian' on anyone. Ego aside, TTB managed a fund, something you should respect him for.

The message im trying to deliver is - look for contradictory information. You don't need to encourage a teen to have more sxx do you

You dont become one by doing the opposite of the majority; you become one when you know how little you know

The idea of assigning a PE multiple is because you think the market will agree with your view and push the share price to that multiple right?

If market disagree with you what's the point of this whole exercise.

I don't make the market, no one wants or can predict long term but that is how a market is. Market says it is extremely hard to make money following the 95%, yet no one wants to be a contrarian.

Tools are not be all end all. You're right the person using the tool is the key. Anyone can manipulate a tool to work the way he wants, PE 10 would win the most abused tool in financial industry hands down.

If a person choose to be ignorant, no tools save that man, not even Thor's hammer. And look at this page, how many people is expressing constraint and thread carefully? None.

@ Why- because im Ricky not KC

Yea you're right, one needs to have a good grasp of the magnitude and frequency of both upside & downside. All business looks at the bigger picture, the story or narrative ie. let's move into adjacent market, expand etc, but ultimate they have to simplify it to a yes or no answer to go ahead. How do they do that, most use net present value NPV, by calculating capital outflow on year 0 (present) and cash inflow from the investment return every year after for say, 10 years. NPV applies the same principle as DCF.

KLCI King, no one will be billionaire using DCF. But it is way robust than using PE 10, and that means richer. Trust me.

Well, of course I'll ask my probability of dying for not going ahead with surgery duh. If that's 90%, would be pretty dumb to go surgery right?

Good analysis but seriously concerned with how valuation is done. If you did a DCF, over half of the value lies in terminal value, and some between 5-10 years. The market even though is a beauty contest in short term, but nonetheless a weighting machine in long term.

On the basis where majority value of a business is derived from 5 years and beyond to terminal, how does PE 10 play a role? Unless you are confident CSC deserve that PE level for next 10 years and beyond, that it would be valid, but you're applying it to 4 recent quarters, or one year. And how does one define PE 10 as conservative? on what basis? Something to think about. If on the basis of 10% discount rate, that PE aint conservative with the return on capital CSC got over past 5 years; if based on future forecast that ROC will fly to 15% and stay there for 10 years, that is truly conservative. Had any steel co achieve 15% ROC over 10 years? Something to think about.

My alternate view is given that valuation is driven by profitability, which in turn driven by steel price, which is affected by countries policies, macro economics, currency movements and so on. Let's say you're fairly confident you can get 80% for each of these main things correct, what's your chance of being right? 0.8 x 0.8 x 0.8 = 51%

Now you have an outside side that you're dealing with something that is as complex as forecasting next month's weather, 50% is a good starting point, and you start incorporate inside view like megasteel closure, tariff, these and that, you might increase your probability of being right to 60% or 70%.

To me, stop loss is like trying catch a whale with a fishnet. If one doesnt know what he is doing, no amount of stop loss or paying attention in the market will save him.

@ buddyinvest market is part art part science. You have provide a perfect example. The utility of a bra is to provide comfort and safety. From an utility point of view, your idea will fail miserably, no one wants to make one boob comfort but not another, despite how artsy you might think it is to have one full cup. If you look it from the law of art, anything that is symmetrical, being both side the same, looks more beautiful than asymmetrical. And symmetry falls under the field of geometry, and yes, geometry is a sub field of science, so it is still bounded by the law of science.

@ ronnietan you are correct if theory defies experience then we should examine theory but in your case, it is likely you are having recency bias, grabbing near term memory evidence to prove a theory to be wrong. And by the way, things with splits is sort of a self fulfilling prophecy. Because others knows others will take advantage of the splits to make penny return thus that cycle feed on itself, but we are talking about irrationality here, which will hardly make you any money in the long run. If you need to disprove a theory, start with 1000 random samples.

so after so much discussion, what's the intrinsic value of RGB?

Knowing fundamental and technical analysis will definitely give you an edge, simply because the majority of players in the market do not have such knowledge and skill. - Somewhat true to a certain point.

Look at this way, stock market comsist of a pool of investors. Just like darwin natural selectiom theory that the one that can survive competition will pass their genes to the next generation, in stock market, investors that doesnt have fundamental and ta skills will lose money and overtime quite the game. Through this market natural selection, what do you get? A majority of investors with good enough skills to blunt your edge.

Then again, stock market consist a high element of luck. A newbie can blunt out your edge on his very first day. So what you jave here is in the short term, amateur and experienced players killing your edge and In the long term where all amateurs eventually die out after losing money, you have more experienced players killing your edge

Aiya valuelurker, u never answer my post, who's drowning

So hard sell

Time and space theory, I know that from Einstein relativity theory, didn't know it applies to investing. Deep indeed

My comment is only pinpointed on point 2. I don't think you can use that example where mgt absorb GST to validate it as the right decision because it is just as easily to turn that into a bad decision if Padini cripple it's margin going forward and unable to increase their selling price in the future.

On the other hand, it can just as easy to say another retail company made the right decision by doing the opposite, instead of absorb GST they pass all the cost to consumers to maintain their margin, and fortunately the inelastic demand means end users happily take on the extra cost.

Another perspective I'll offer is, Padini do not have a choice, not because the mgt choose the right model. Padini is not in the position to increase price or pass on GST cost without killing themselves, as Buffett puts it, they have to pray if they are going to hike their price, because retail is a cut throat moatless industry.

I wasn't aware I talk like an accounting lecturer, i take that as a compliment.

They are trading below book value because majority of them hardly ever earn beyond their cost of capital. If you say this is a temporary turnaround, that you could be right. IF you say this is this is a great turnaround where you can see a long term glory, then Ive many doubts.