MHC cashflow is super solid.

Bulls are back since 20 July 2022.

Encouraging to see portfolio all green today, keep holding good stocks.

Market forming a possible double bottom, keep holding good stocks.

KOTRA no change.
BAUTO no change.
HARISON no change.

basically this Q: KFIMA+SWKPLNT+FIMACOR+MASTER+HARISON+KOTRA+TASCO+BAUTO provides good diversifications.

for those who like to time the market, now is a good time to get ready for bulls to return.

The market likes to test your patience, grind your faith, and hunt stops before it takes off.

Need to remind readers that the purpose of this blog is to punish low ROE and FCF stocks in malaysia, especially those that cannot even hold their Debt/Equity<1 and Current Ratio>1. Investors need to avoid buying such low quality stocks.

@xskyriver If i haven't bought it yet, i would rather avoid holding such M&A to avoid risk exposure.

@cheahsk I don't look at low ROE stocks.

Take profit Harison to switch to Kotra.

Is today the recovery?

KOTRA

Terry Smith on Warren Buffett and how to find good companies

https://www.youtube.com/watch?v=0tMwLUMz4F0

@3i

you are right about glove if we backtest on quarterly results. Thank you for sharing from experience.

May i ask when & how did you exited glove? technical divergence? insider info?

Would you and if yes, how would you apply this to exiting plantation stocks in future?

The whole portfolio following this system already up more than 5% conservatively since last quarter season assuming you take profit now, I'm confident it will perform >20% per annum, especially you pick only rising FCF QoQ, which is something crucial if you want perfection, i mention this only now for those who are still following.

7 biggest mistakes people make using this method:

1. want quick profit with small account hence overtrading
2. monitor price too much, want actions, hands itchy, take early profit and kept changing strategy.
3. cut loss based on previously learnt technical analysis methods
4. not adding after price retraced 10% or 20% (depending on volatility)
5. did not stay through the full run up, aka take early profits
6. to be influenced by rumors or macroeconomy
7. emotional, or care too much about analysts reports or market sentiments

That's why i said doing nothing is the most difficult part after learning this method.

Semiconductor buyer watch SOX from NASDAQ closely as it's entering bounce zone right now.

VIS quick fundamental review:

Debt/Equity = 0.01 [YES]
Current Ratio = 4.14 [YES]
ROE = 16.44 [YES]
Growth [YES]
Number of negative quarter in last 4Q: 0 [YES]
MC/FCF: 143/13=11 [YES]
Rising FCF [YES]
Dividend Yield = 1.82 [YES]

Verdict: ALL YES!

Read the method in Blog here: https://klse.i3investor.com/web/blog/recent/fundamental_trading
Read all the comments: https://klse.i3investor.com/web/forum/forum-thread/600694135?p=1

Peter Lynch: 10 Mistakes Every Investor Makes

https://www.youtube.com/watch?v=c-2uuIz_sAQ

Warren Buffett: 10 Mistakes Every Investor Makes

https://www.youtube.com/watch?v=JultAiOdhvk

"It is better they do not understand it"

https://www.youtube.com/watch?v=Nihxj5KCCKQ

Assignment

Compare: VIS vs INARI vs PCHEM

RE: Risk & The Majority

One men's meat is another men's poison, we must acknowledge the diversity of risk appetite in the animal kingdom,

But, Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect). ― Mark Twain

The majority don't understand risk, let alone learning how to avoid, minimize or control it. In fact, the majority mind is the one that tells you his grandpa has been smoking since young and still alive, that's why smoking is safe. They always beat you with their experience.

The majority don't study numbers or statistics, they don't ask what is ARR, RRR, what is Graphene Hydroxide? They are not interested in studying long term risk, margin of safety or even a Debt-to-Equity. They are easily lured by the greed, spooked by fear, runs towards quick solutions told to them, only to find themselves spinning the endless consumption wheel designed by the master.

The majority just wants to believe, not learn. Learners don't believe. They even preach "Trust The Science", which is a slogan designed to fool them. The majority have plenty of excuses why they should not learn or already know all the answer. They often reply questions with air of superiority just to refill their leaked empty vessel of ego, you can't missed who they are because their brain is programmed to talk faster than thinking.

The majority always think they are right, they don't want the truth, they just want a simple right/wrong answer, tell them grey answer it hurts their binary brain, hence for century the minority minds always agree to disagree with the majority minds.

The majority has more mouths (or time or votes), the minority know for a fact that they cannot outspoken the majority, they will not even attempt to. Tell majority that they are right, they will be happy and not bothering you.

I'm not only interested in screening stocks, I'm the master of screening people.

Terry Smith: Free Cash-Flow Yield Explained
https://www.youtube.com/watch?v=hAX8r5zpdzE

Bill Ackman: Free Cashflow is All You Should Care About
https://www.youtube.com/watch?v=ZHQhXedaPl4

@xskyriver

OK, I will update quarterly especially for those who (clicked like) appreciated this learning opportunity.

"Warren Buffett’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday."

To solve problems in life, first need to get the right order by understanding the correct type of Cause and Effect:

www.tiktok.com/@everdaythinkinglesson/video/7065188477284928795

@xskyriver you are welcome, let's say no to mediocre investment decisions.

Thanks for hitting the likes button.

FCF is like a business reputation, if a management unable to generate any Cash Flow from Operations, or use more than what they are able to generate, it's a sign of weakness, incompetency, inefficiency, and likely internal corruption.

Just look at how Najib want to be the hero for his cronies defending the worse company in bursa that should be bankrupt soon. Power, incompetency and greed together trio always produce corruption. https://www.freemalaysiatoday.com/category/nation/2022/04/04/game-on-lets-rock-najib-tells-anwar-on-sapura-debate/

If majority investors know how to read FCF or know where to find it, they will be shocked where on earth have they been parking their money at.

FYI, The MC/FCF aka P/FCFps that i'm currently willing to pay is <12.

A manageable mini portfolio < 10 stocks from various high performing sectors should suffice. More than that is simply counter productive.

The initial P/FCFps < 20 was merely a preliminary starting target.

There are almost 50 sub-sectors, with this method i get only 8 sub-sectors, which it's respective leader i've mentioned already. At this point I do not know which one is the moat, but it's pretty sure it's among them because i followed the money (FCF), not earnings, not news, not opinions, not predictions.

Insurance
Plantation
Food & Beverages
Transportation & Logistics Services
Oil & Gas Producers
Industrial Materials, Components & Equipment
Telecommunications Service Providers
Chemicals

If more Malaysians learn this system, less people will be wasting their money to support useless/incompetent/corrupt managements, if it's a junk at one glace i already know, and so should you be able to do so easily after reading all my comments. Learn to give credit (to great company with great price) where the credit is due, no more blindly believe what other people tell you. I don't even need to read any news, accouchement or analyst reports. Safety and FCF growth is the only story i need to follow.

@Zhuge_Liang

Every sector has different MC/FCF structure, the idea is to hold on to it's leader with lowest after comparing to it's peers that must also qualified all other safety and growth rules. We do valuation last because safety comes first.

@speakup you are welcome, pls click the "LIKE" button if you are benefited.

@speakup issue with Willow is YoY growth, you might want to read QR in details should u want to make it an exception, i'm a lazy person who don't have so much time. Also, I am quite strict personally to myself when it comes to entry criteria to the extend that in future if i found a necessary ratio to add (anyone can suggest here, i'm not saying i will), i'll always want to add onto my stack of odd of winning before considering enter a position, once entered, i may relax a bit of rule to see it grow. Holding criteria is slightly different from entry criteria. But the love of first sight should be a perfection entry with all the yeses.

HARISON quick fundamental review:

Debt/Equity = 0.35 [YES]
Current Ratio = 2.00 [YES]
ROE = 11 [YES]
Growth [YES]
Number of negative quarter in last 4Q: 0 [YES]
MC/FCF: 341/99=3.4 [YES]
Dividend Yield = 4.02 [YES]

Verdict: ALL YES!
The gold standard for a buy is to have all yes.

Read the method in Blog here: https://klse.i3investor.com/web/blog/recent/fundamental_trading
Read all the comments: https://klse.i3investor.com/web/forum/forum-thread/600694135?p=1

There are 2 group of people in this world - the Want-to-Know versus the Want-to-Believe.

I write and reply only to the first group. The second group will attack external factors (ghost/virus/scam etc) with their victim mentality and self pity, especially when things don't go well in their life (spiritual/health/financial etc). They never get to find the cause, they constantly live in the symptoms.

Want-to-Believe group is very religious but lack logical thinking.

I offer red pill only to the first group to wakeup/unlearn/relearn, however, I rather the blue pill takers stay wherever they are in their comfort of continue blaming/hating others. Blue pill-ers lack courage to seek for themselves, hence should be ignored.

Only 9 clicked likes on this article, so maybe i will work out a way to share only with these 9 persons.

JTIASA quick fundamental review:

Debt/Equity = 0.54 [nope]
Current Ratio = 1.45 [nope]
ROE = 5.55 [nope]
Growth [yes]
Number of negative quarter in last 4Q: 1 [nope]
MC/FCF: 905/194=4.6 [yes, but not the cheapest in plantation]
Dividend Yield = 0 [nope]

Verdict: 5 no, 2 yes

The gold standard for a buy is to have all yes.
Read the method in detail here: https://klse.i3investor.com/web/blog/recent/fundamental_trading

JTIASA quick fundamental review:

Debt/Equity = 0.54 [nope]
Current Ratio = 1.45 [nope]
ROE = 5.55 [nope]
Growth [yes]
Number of negative quarter in last 4Q: 1 [nope]
MC/FCF: 905/194=4.6 [yes, but not the cheapest in plantation]
Dividend Yield = 0 [nope]

Verdict: 5 no, 2 yes

The gold standard for a buy is to have all yes.
Read the method in detail here: https://klse.i3investor.com/web/blog/recent/fundamental_trading

TOMYPAK quick analysis:

Debt/Equity = 1.07 [NO]
Current Ratio = 0.55 [NO]
ROE = -191 [DISGUSTING!]
Growth [HORRIBLE!]
Number of negative quarter in last 4Q: 2 [RUN]
FCF(TTM) negative [RUN]
Dividend Yield = 0 [NO]

Verdict: RUN FOR LIFE!

The gold standard for a buy is to have all yes.
Read the method in detail here: https://klse.i3investor.com/web/blog/recent/fundamental_trading

HIAPTEK quick analysis:

Debt/Equity = 0.35 [YES]
Current Ratio = 1.9 [YES]
ROE = 18 [YES]
Growth [BIG NO]
Number of negative quarter in last 4Q: 0 [YES]
FCF(TTM) negative [BIG NO]
Dividend Yield = 2.33 [OK]
MC/FCF: 747/73=10.2 [got other cheaper option]

Verdict: Abstain

The gold standard for a buy is to have all yes.
Read the method in detail here: https://klse.i3investor.com/web/blog/recent/fundamental_trading

TECGUAN quick analysis:

Debt/Equity = 1.41 [BIG NO]
Current Ratio = 1.36 [no]
ROE = 26 [yes]
Growth [yes]
Number of negative quarter in last 4Q: 1 [no]
FCF(TTM) negative [BIG NO]
Dividend Yield = 0 [no]
Pump and dump high volume seen on 1 April [NO]

Verdict: 6 NO, 2 yes

Read the method in detail here: https://klse.i3investor.com/web/blog/recent/fundamental_trading

Cash Flows Explained https://www.youtube.com/watch?v=hefAHWvrFDQ

Free Cash Flow allows companies to:

1. pay off debt
2. pay dividend
3. pay bonus (if they want to)
4. share buy back
5. make business acquisition
6. fuel further growth

Negative Free Cash Flow companies can't do all of the above, or simply struggling to do so so much so that they have to use it all up making it negative, either that or the CFO is simply not paying attention to make the chicken lay eggs. You know there are many directors who can override CFO advice simply for their own selfishness to get bungalow and cars under the pretext of company properties.

btw FCF is required to sustain growth, not exactly NCF, not definitely not earnings per se.

If you know of other ratio that Warren Buffet likes, please share here. Cause he doesn't reveal a lot publicly.

To all forward PE advocates, please give me a video that Warren Buffet said he use this particular ratio.

I know one thing for sure is Warren Buffet don't look at earning per share.

On the other hand, let's investigate on what he like using instead with this video:

https://www.youtube.com/watch?v=jcbFh7Fdr_w

Keep the opposing views coming, it's healthy for learning for open minds.

Please stick to WB, Charlie Munger, or Peter Lynch and alike here.

In terms of MC/FCF (lower the better)

INSAS = 543/218 = 2.5
LCTITAN = 5170/748 = 6.9
ORIENT = 3840/353 = 10.9
UOADEV = 4118/214 = 19.2
HLIND = 2829/88.4 = 32

FCF > NCF, given any day

Property management business example:
https://i0.wp.com/www.rentalstowealth.com/wp-content/uploads/2017/08/Cashflow-Infograph_v2.png?resize=576%2C1024&ssl=1

FCF > NCF, given any day

Property management business example:
https://i0.wp.com/www.rentalstowealth.com/wp-content/uploads/2017/08/Cashflow-Infograph_v2.png?resize=576%2C1024&ssl=1

More: https://klse.i3investor.com/web/blog/recent/fundamental_trading

In this post, I only talk about stocks that fulfilled above mentioned criteria.

So let's continue this discussion, suppose we found 2 leaders with polarizing MC/FCF,

Stock Sub-Sector MC/FCF
HARISON Food & Beverages 3.3
INARI Semiconductors 29.4

would it be reasonable to swap high MC/FCF for low MC/FCF (when found) as it's consider "cheaper"? Well, if all else equal I supposed it's a rational move despite it's low volumn, cash (not earning) is king after all.

We need constructive critics to learn and grow here. So let's hear you out, would you rather invest in HARISON than INARI or vice versa?

Please don't let me dominate the comments sections, let me hear you out too.

When someone has a small trading account, greed for quick profit forces them to overtrade.

Similarly, someone big fund account who has little time left, he needs to see more quick action before the time off. Hence his erratic behavior, his perception of life is reflected in the words he chose - "hopeless".

To him, it's not even about money anymore, it's about the fun, not fund.

I do not know what is happening to him, but i know something is.