haha never said anything about JAKS is fake, which makes you writing fake news.

Yea that would do, $1 mil worth for each.

I'll add it here, easier.

That's very hard to track right? You've own QL prior to 17 Apr 20. Hard to tell at a glance which is leading. Ferrari and Stoneco a bit mafan, can't track it here.

Done - https://klse.i3investor.com/servlets/pfs/138504.jsp

Are you tracking QL from your end or do you want me to add that into that portfolio?

Thumbs up, good analysis. Way better than others who like to use PE10 to value company. PE20 is the next level.

Oh as if writing children's book sounds like a piece of cake than writing non-fiction Mr Phillip. How naive that can be. I take that as a compliment nonetheless.

Oh right, again as if an overvalued QL needs to drop in tandem when the market drops 30%. And if it doesn't, it shows that it isn't overvalued, what kind of logic is that?

Common, if you're so shiok competing with others (to beat the boredom of life), I'll pick Scientex, you go QL, starting today, 10 years to 16 Apr 2030, if we and i3 still alive, the highest CAGR wins, deal?

Look, I don't want to compare past performance of Scientex vs QL since 2012 (the time I start owning), even though Scientex beats QL in capital appreciation (even after a 20% fall in March, even at PE10 not 50, and despite how I hate to boast), because you're gonna come up with bunch of nonsense like oh i don't have record to prove I own it since 2012 lah kinda BS.

So lets do it for next 10 years, maybe you think it isn't fair for PE10 to go against PE50, although I think you won't, considering that you think high PE beats low PE all the time, so it is a fair deal right?

In case you're not so sure, I can pit Ferrari (RACE.NYSE) against QL, another stock that I own. RACE has PE closer to QL, PE47, does that make it more fair? Make your pick, Scientex or Ferrari.

Mr P, appreciate that you think im qualified to write a book. Highly honored.

Okay sure if you insist what you're trying to say only apply to a subset of population not total population

Of course. When your perspective differs from others, you call other clueless. And talking about clueless, who is the one that wrote Wuhan Coronavirus - actual fatality rate < 0.5%.

Thanks for being sad to me

Yea sure when crowd jogging, definitely against the law and increase risk. I don't know others, but like whats the probability someone look out the window and saw someone jogging and is like 'oh hey i should jog too' lol

I dont really see anything wrong with this. Not like you're group jogging, or spraying COVID into the air or touching the trees while you jog so someone touches it later gets infected. I agree gym is bad but outside jogging as long alone and social distancing is still fine. And also consider the consequences of entire nation of no exercise for 2 weeks, how much death can be attributed to that? That's an invisible risk.

That's why i rarely reply to this guy because he spend his life writing thoughtless opinion

Properties in JB have a higher probability of crash than AeonCR silly

PE 15x will look awesome, but of course if you have the option, it is better to pick the Carlsberg parent company listed in Europe because of higher reinvestment opportunity. But Carlsberg Malaysia is still a great steal at P/E 15. What you buy this year will determine your return for the next 10-15 years.

AirAsia - How to think about the uncertainty?
https://klse.i3investor.com/blogs/JTYeo/2020-02-09-story-h1483734824-AirAsia_How_to_think_about_the_uncertainty.jsp

@Sslee, yea there is a probability that MACC or MAVCOM will fine AA's board for negligence or Tony/Kamarudin for bribery, or perhaps both. I didn't look at the probability of Tony/Kamarudin being fined because that doesn't affect the cash flow and valuation of AA.

i have no idea why would someone wants exclude large sample size, if anything, large sample is more reliable than small sample.

Sure death rate % is constantly changing, but excluding a large sample doesn't make it more accurate. Imagine I would flip coin 1000x in KL and get 50% heads, then I go to JB and flip coin for 5x and get TTTTT: 0% head. Then I proclaim the law of physic in JB is different from KL. That's a stupid logic.

Calculating probability is always based on total number. No one has died in Malaysia, so do you want to conclude coronavirus death rate is 0%?

How can the 52 weeks low be considered as the maximum risk? 52 weeks is how long it takes for Earth to circle the Sun, does that tell you anything about how much a stock can or cannot fall?

Alright, not going to waste everyone's time. Explanation below:

If a company has 100% payout ratio, then earnings growth rate is 0%. Therefore, Dividend = ROC. If an investor reinvest all these dividends, dividends received (which is his long-term return) will compound at the same rate as the business's ROC. Even if one spent all the dividends, his long-term return won't be 0%. Example, if the business long-term ROC is 20%, earnings growth rate can be 0%, but investor return will be 20% CAGR when all dividends get reinvested. Even under the circumstances of not reinvesting them, long-term CAGR will be lower, but it will ABSOLUTELY not be 0%.

Does this refute that earnings growth is the ONLY thing that matters? Does this shows ROC is a better predictor of investors return than earnings growth rate? Does this show investors return can be very different from earnings growth rate?

Why so hard to understand this concept? Why talk about my blog, my career, my holiday, my dogs, my reading, all these irrelevant crap? When you can't even get the big things right? When the mouth starts spewing crap, the brain is filled with crap.

That is why these same bunch of people will come back with more ad hominem fallacy (but don't react, just observe). Human behaviour is predictable. But it always amaze me nonetheless.

The end. Bye!

Maybe I should make the question easier: 5 stocks, growth rate of 20%, 15%, 10%, 8%, 5% respectively, which one would you pick and why?

Icon you don't need actual stocks to explain how you going to pick them.

I am full of bullshit but I can explain mathematically how an investor can earn 20% CAGR owning a stock that has 0% growth rate for the next 10 years. And I don't need real life stock to prove my point.

Philip maybe you should stop reading Farnam Street because it is "all stories, no investments."

Well if earnings growth is all that matter, I am happy to line up 100 stocks, each has 20% annual growth rate, enlighten me which one has the best prospect and explain your process. Thank you.

Your explanation is like being dealt 19 on a blackjack game and hit another card of 2, and then 'that proved my initial thesis is right..''. One day you'll grasp the analogy of focus on the game, not on the scoreboard.

Well, if you going to use share price as a way to prove you're right, which to me, is a clear breach in investing (rule no.1: process, not outcome), what can I say right.

@chl1989 Your reply reminds me of when I was investing Flbhd in 2015. Your reply could easily have been "Favorable forex gain bro". How many ppl wake up to the reality that the share price had little correlation with the exchange rate between MYR:USD. And I'm not even asking you specifically about Tguan, but in general term what are the fundamental of earning growth i.e why some companies can grow revenue by 5% while others 20% etc.

But just something for you to think about, you don't have to answer me. Investing is about thinking alternative outcomes (aka risk management), so here are some:

1. Everyone knows polymer resin price is on the decline, what is your probability that that expectation (of low price and higher earnings) has not been factored into Tguan's current price?

2. Given polymer resin price decline is public information, and Tguan's customers don't have a price lock-in contract, what do you think is the probability that those customers while demand lower selling price? Considering Tguan is a price taker not price maker. What would happen to earning growth if that turn out to be true?

3. Follow up on Q2, what is the probability Tguan has the ability to NOT pass the cost saving to their customers?

4. Follow up on Q2 & Q3, given lower resin price is a boon for plastic manufacturer, what does that tell you about the possibility of Scientex using this opportunity to ramp up their utilization rate and market share? What tells you about other dozens smaller manufacturers eager to grow their market share? And how does that affect Tguan's earning growth?

5. Most important of all, your investment thesis on Tguan lies on a macroeconomic variable that is highly unpredictable: polymer resin price. Maybe you have other main reasons of investing in Tguan I don't know. But having an investment thesis rest on an unpredictable variable, you should know what that implies.

6. Follow up on Q5, if your thesis lies on low resin price (and how unpredictable it is), what is your probability (and magnitude) of loss should the resin price suddenly reverse in trend? And given how unpredictable the future price is, what is your advantage in selling faster than others when market expectation turns?

Not like I'm expecting you to have answers for all these. I don't even know the answers. Probabilistic estimate yes, answer no. But these are considered some 'business sense' questions one should think about before buying Tguan on the assumption of earning growth driven by lower polymer resin price.

The discussion is getting messy here. If:

1. You have any discussion or disagreement about ROC superiority over earnings growth, you're welcome to view and reply my statement to Icon. None has so far.

2. You have any different view about Thong Guan, I'm happy to hear from you.

3. You want to talk about reading and investing, I don't see any point of doing so. It is like discussing politics or religion, we can discuss to the end of time and there won't be any agreement.

@probability I always welcome your 'more influential information'. I'm waiting for you to tell me.

Uncle, there is a difference between swimming and investing. Your analogy works to an extend. Swimming is physical; investing is mental. That is why reading swimming books and investment related books are totally different thing. Got it?

Of course you don't talk figure. I never even seen you analyse a stock! Talking about practical, who is practical, the one that writes on i3 and walk to talk or the one jio ppl to go JB find him lim teh?

@Icon whether I am on school holiday, hard labor, retirement, what does that have to do with investing discussion? Is it because everyone is doing linear thinking here: student -> naive -> don't listen to his nonsense.

If my running analogy is too jargon, let me know, happy to explain in another way. If you disagree with my running analogy, I like to hear something better from you. Or you can't have something better to discuss so you resort to school holiday to demean someone? That's why I enjoy learning psychology.

Uncle, I'm not forcing any way for you to listen to me, do I? I want to share what I believe is true, I don't profess everything I said is right, and certainly just because I read doesn't make me superior. But I definitely didn't put a gun on your head to listen to me did I? Why are you so worked up.

@chl1989 Sure. Where do you suppose earning growth comes from? Does it come out from thin air? Enlighten me.

@popo92 what a strategy, when all fails, digging up failed investment as a way to discredit things people has to say. That tells you alot about how you treat others isn't it. Here are my list of failed investment: Favco, Flbhd, Tropicana, Tunepro. I like to see your worse online behavior. You're getting close to uncle Connie. Ad hominem. When one has nothing substantial to talk.

That's why we are a different species. If you treasure those hormones, because your life is lack of excitement, great for you. = )

You have my permission to try probability. You're spot on on cocaine brain. That's why the market is full of patsy.

I think you got it wrong on the other point. Sure there are probably many investors that love reading books but are losers in the stock market. But the habit of reading is unlikely to be the causal factor of their losses.

Which one has higher correlation: reading lead to success versus reading lead to losses in market? Your name is probability, you should know this. Maybe you don't.

That's only true up to a certain extent. A great example is Berkshire, Berkshire never pays a single cent of dividend in their history 40+ years, yet Berkshire don't trade at a 'cheap' price i.e below NTA, mainly because they have managed to compound return at a rate higher than index fund.

On the flip side, distributing large portion of earnings as dividend isn't necessary a good thing either because if the company has the ability to reinvest more into the business and generate a high incremental return, that is, higher than what a common investor can find in the market, then that is a bad investment decision. Although this is far harder to assess.

But you're right that companies with a strong dividend record tend to garner higher valuation than one that doesn't.

Uncle again, no one ever said reading books can solve anything. But should one stop reading because reading can't solve everything? No. It is like rich doesn't solve all your problem, should you stay poor?

Each has its own way. If you find a great way to learn something, then stick to what works. For investing, success lies in making accurate analysis, and psychology plays a big part of it. That is why reading is the best way for me to learn about psychological side of decision making and thinking. Should I personally experience FOMO (fear of missing out) by turning my mind into a cocaine brain because everyone told me that is more practical and less academic?

Li Ka-Shing said "When you buy the books, read them carefully and learn the lessons and strategies that are being taught in the book." He incorporate what he reads with what he experienced in his business, that is the only way to do it. When Munger said "You’d be amazed at how much Warren reads – at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.", they are doing the same thing, incorporating what they read with what they experienced at running Berkshire. And when Bill Gates carries a tote bag full of books almost everywhere he goes, he is doing the same thing, learning from others and related that to Microsoft and his foundation. I am doing nothing less different from them. Although I won't be as good as them, but all I am trying to do is to make good decisions and reduce blind spots. That is all there is.

@cheoky You're right, investing is a trial and error. But you want to make sure your previous error doesn't stop you from having another trial. Which one has a higher probability of stopping you from having another trial, 200km/h all the time or drive slowly but get hit by lorry?

And for sure you should find your 'limit'. If you can do 20% short term without taking excessive risk, you should do it. Now if you ask me why don't I do it? Then I'll give you an academic answer: because I read enough from other investors' mistakes to not do it myself.

It is like not everyone that smokes develop lung cancer, but should I go test it myself, to see the 'limit' whether I'll end up getting cancer? Hey if I don't get cancer, I get all the upside: the pleasure derived from smoking. But should I really do it? No.

I have been learning from the market since 2012. Not bragging because that is a very short time. But I still prefer to learn from other people's experience (mistakes) through reading than learning by losing alot of my own money.

"Experience is what you get when you didn't get what you wanted" - Randy Pausch

You can do trial and error by yourself, one at a time, or you can read someone's experience of 30-40 years, condensed into 300 pages, finish that in a month, akin to doing 10,000 trial and error.

Uncle, of course many people still love to publish their books at Popular stores. "Look, my book is sold at Popular bookstores next to The Intelligent Investor by Ben Graham" versus "Look, my books are sold online.." which one is more convincing? Of course the one at bookstores.

@probability I don't disagree that one needs to know how to use knowledge in order for it to be useful. It is like tools (hammer, screwdrivers, spanar, nuts, bolts etc) in a toolbox. If you use spanar to hammer nails, that's not very useful is it?

So having a wide knowledge is like having many tools in your toolbox, sure it doesn't guarantee you'll know how to use those tools correctly, which you can call wisdom or good intuition, but the risk of too little tools definitely outweighs the risk of having too many tools.

Icon wrote "earning growth...is the only thing that matters"

Supposedly today I meet up with Icon to discuss his statement above. Failing to settle our disagreement (because Ricky is too academic and Icon's ears are oozing blood), we decided to race each other.

On the next day, you saw a few headlines news "Ricky ran 2km, Icon only 1km"; "Ricky beats Icon"; "Survival of the fittest: Ricky prevails" etc.

Now, if you think at a deeper level, those headlines tells you nothing. The distance me and Icon covered says little to nothing about how fit we are. Because no one asked "How long does it take for us to complete those distances?"

If I told you it took me 5 hours to do 2km (400 meter per hour) and 1 hour for Icon to do 1km (1km per hour), does that change your mind about who is fitter?

Similarly, one company can grow 20% and the other only 10%, does it tell you which is better? No. It is meaningless. The question comes down to "How much capital is required to achieve those growth rate?" If a company doesn't need any capital to achieve 10% growth while the other needs to reinvest 100% earnings to achieve 20% growth, which company is better?

And that is what ROC is all about. ROC is not jargon academic shit that Ricky invented. I can give you a dozen of stock all with the same growth rate and you won't have a clue which one is better.

I get 5% commission on Amazon and Bookdepository referral program. If I self-publish online, 100% profit is mine. So should I get 5% from Popular outlet? Welcome to 2019 uncle. Make it 2020

@cheoky if driving at 200km/h can get you to your destination in an hour, why spend 2 hours driving at 100km/h?

So you obviously know if you do 200km/h every single trip, one day you won't get to your destination.

Similarly, if one can get 20% short term, then the question is not 'why opt for long term 20%', the question should be 'how much risk are you taking to get that short-term 20%?'

Most people can't answer this question, but that doesn't mean the risk isn't there. Do you want to increase return by 1x in exchange for an 1x increase in risk? The answer is a clear no because investing is non-ergodic.

If you're playing short-term, market sentiment swings the price more than changes in earnings.
If you're playing long-term, a mix of ROC and earnings growth swings the price. But the baffling thing is, if one plays long-term, PE price is the least important thing to worry about.

And one thing in investing is never do linear thinking:
PE price down -> Higher profit -> Buy stock
Steel price down -> Higher profit -> Buy stock

That is linear thinking. A better way is to think in feedback loop:
PE price down -> Everyone expect higher profit -> Priced into share price -> Watch out
PE price down -> Company is price taker -> potential price war (market share grab) -> cost savings passed to end buyers -> Profit might not go up (even drop) -> watch out
PE price down -> Everyone expect higher profit -> Threadmill effect -> Asymmetrical return -> Lower than expected profit increase can cause huge drop in price -> watchout

Yea I've no idea about short-term. Because I don't 'Assume everything else remains the same', everything else will NEVER remains the same.

@chl1989 tell me something, is there anything in investing that is not about making assumption? Even predicting coming quarter results is making assumption.