Save and INVEST only can become rich.

Another example of a successful value investor

Truthseeker1: I don't know whether myeg will receive any contracts (if you read about RMK 11) from GOV that fatten its wallet by pressing Malayisans. This kind of profit i rather pass. PE of 25, low dy, low NTA. IF it is highly debted then the ROE of 25% is rubbishy to me. Berkshire Hathaway PE is 21. Sometimes what chicken king and its gengs can do to this country make me rub at my eyes and wonder (curse them) :)

Fimacorp is an example that it split its share until full valuation is being reached.

Truthseeker1: PE of 25= not cheap at all. Not all people willing/know/bother to use their calculator (or own thinking) rather than paying heed to friend's tips or banking "investment research". By the way i don't invest in stock that survived due to political reason and do collateral damage to the country

The research reports from bank= Collection of free jokes

total asset/ shareholders' equity more than 1.5 should warrant you to look clearer into current ratio, DOE and CAPEX

Hi rlch, i am not interested in gambling stock, hence i am not sure its ROE. High ROE boasted with extravagant debt is not a good way to make investor rich. Debt level can be seen in total asset/ shareholders' equity. I DON'T KNOW THE DEBT LEVEL OF BJ TOTO :)

Thanks for sharing. This is a very good article. The 5 factors that affect ROE is eloquently explained by Warren Buffet. Don't get swindled by inflation!

Entry Price is everything :)

Mr Kevin... Appreciate your sharing. I sort of agree with you... Different method of capital allocation should suit different types of investor well. As Charlie Munger said: avoid the man with one hammer syndrome.

History should repeat itself but i also want to repeat (with an old man's tone): that a visit to Intellegent Investor's chapter 8 and 20 will pay off perhaps more that what i share here).

PS: not perhaps but definately more than what i share here.

INVESTMENT IS MOST SUCCESSFUL WHEN IT IS MOST BUSINESS LIKE-- Benjamin Graham

The concept of value investing is so elegant and enticing :)

NOBY: in my opinion, no strict rule on that, but cash is essential for investor indeed. I will stay in my own circle of competence only, even that my money also not enough.

Capital allocation is very difficult and Warren Buffett is a master of capital allocation.

In my opinion, a value investor will buy the value stock with durable competitive advantage at discounted or fair price regardless of the S&P or KLSE. The amount of purchase, you will need to determine yourself. WB says that buying a stock is like taking a swing in baseball game just that you have the advantage of letting the ball pass. The magnitude of swing you should determine yourself.

All is about your calculated intrinsic value of the business and compare it with the price on sell.

You should calculate the risk VS benefit.

For my personal view of cash preservation:
1. I must have an emergency fund reserve (cash of course) that can cover my expense for 3-6 months (if i lose my job or a medical emergency arise etc)

2. I will maintain about 30% of my investment in cash form. It is not strict rule, however, because i will buy the stock if i found them undervalued. If I don't have 30% of total investment in cash if tmr market crash, I will get depressed.

Keep massive cash with low dividend will undermine its purchasing power due to inflation through.

Warren Buffett can decide 20 billion of deal in few minutes (in cash of course, not credit card), HOWEVER HE WILL PREFER TO HAVE HIS CASH SPREAD ON TABLE IF THERE IS NO GOOD DEAL IN MARKET.-- this refer to temperament control too.

3. Be THRIFTY. Do you know Warren Buffett has a car plate with name "THRIFTY" in his office?

4. Avoid nonconstructive loan. Never leverage to buy stock.


History should repeat itself but i also want to repeat (with an old man's tone): that a visit to Intellegent Investor's chapter 8 and 20 will pay off perhaps more that what i share here).

Kevin Wong:
Or for those who ignore general mkt trends and sentiments...just concentrate on quality/growth/dvdnd/win names instead of trying to time, forecast, outsmart...mart.

Agree with you!

Thanks for sharing :)

Cash flow of this company? what is its gross profit margin, net profit margin, ROE, Current ratio, financial stability, owner earning, microeconomics, DCF value, reverse DCF value, integrity of management, how the business will be in next 50yrs? They are my sleeping pills during market crash

Bsngpg: not all the investing community will sleep like a baby, it never will. Especially the one who use leveraged method to buy stocks, price dropping of 50% will make them sleep like a dead one (and they will actually hope they never get up).

Market is never efficient. (World is never fair also). That is central reason why value investing exists.

An add on to the risk minimization:
Notion from Howard Marks, you should analyse the inherent relation of the stocks you hold. During crash they may have the relation that make all of them crashed together.

Lyo82: thanks for your comment. I agree with you.

In Warren Buffett's last 2 years letters to shareholder they pointed out that keeping too much cash is also a risk as what imposed by devil inflation.

In this article i do not say crash will happens soon. It will happens through. Wise capital allocation is warranted yet it is difficult. We have to calculate the proportion of cash to be kept in relation to risk of inflation and risk of staying incumbent.

I again want to promote the Intellegent Investor:
Prudent investor should revisit chapter 8 and 20 of The Intellegent Investor, I found them highly useful and enjoyable (many times)


The wisdom inside thrills me, tremendously.

I am very happy to see the comments from value investor. I am not a pro, I am just sharing some notion from the books I read. I can be wrong but I am willing to learn more new things.

Bsngpg: point 2 is risk minimization, it actually relate to the stock you pick. If your stock earned 50% more profit while the market crashed, will you sell your stock, will you panic? If my stock have solid rock financial position and earning power, I will just sleep like a baby.

The volatility of stock price don't not correlate with the value of the price. Value investors harness this discrepancy for margin of safety and profit (buying undervalued stock). Temperament control is very important for value investor and often the most difficult part, in this case i urge you to see the some youtube of Mr Charlie Munger about what you should do when the stock price dropped 50%. Don't forget to visit CM's Human Misjudgement article also. Reading does pay off.


Eg: will you buy TNB if its price dropped to a PE of mere 7? or vice versa.


About volatility, what Mr Warren Buffett wrote:
Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however,
currency-denominated instruments are riskier investments – far riskier investments – than widely-diversified stock
portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions. That
lesson has not customarily been taught in business schools, where volatility is almost universally used as a proxy for
risk. Though this pedagogic assumption makes for easy teaching, it is dead wrong: Volatility is far from
synonymous with risk. Popular formulas that equate the two terms lead students, investors and CEOs astray.--BH Annual Report 2014.

If you know some of your stock is too risky-- chance to loss is greater than chance to profit or the magnitude of profit is too small for the risk, you should readjust your portfolio. Chance to get huge profit is when the risk is smallest. The risk-profit graph is not linear: a visit to Howard Marks's book (Co-Chairman of Oaktree) of is recommended.

PS: if i use margin to buy stock, i can not sleep like a baby no matter the market crash or record new high. Debts are cancer to your profit.

apini: agree with you, discipline or temperament control perhaps is the most difficult part of investment.

Will be willing to hear and learn if you share how to money/portfolio management - one of the "cold" subject in investing.

Well you don't reject my term "The investment is most intelligent when it is most business like" they are Benjamin Graham's. Chills

These two gentlemen have formed their notion about Padini. What about you? Have you look into the cash flow of this company? what is its gross profit margin, net profit margin, ROE, Current ratio, financial stability, owner earning, microeconomics, DCF value, reverse DCF value, integrity of management?

The investment is most intelligent when it is most business like. Ben Graham

The most important is the notion you form about its business. PE is an indicator (not exclusive) of the worthiness of money swapped with the piece of business sold to you. In the future if the business is good then its dividend is gonna to be good also. Afterall valuation is an art than science: intrinsic value vs market price should be the most important aspect considered.

INVESTMENT IS MOST SUCCESSFUL WHEN IT IS MOST BUSINESS LIKE-- BEN GRAHAM

SIMPLY CAN SAYS THAT EVERY WORDS TOLD MY OUR PM OR GOV SHOULD BE FILTERED 100%

SADILY THE CEO OF KIANJOO WITHOUT INTERGRITY

CEO WITH INTELLEGENT AND ENGERGY BUT WITHOUT INTERGRITY CAN KILL YOU

Use artist to promote stocks, and if you look carefully at their operating model (1 year period), I would say this is brainless. The authoritative figure certainly not necessarily have higher intellectuality, sometimes not even common sense.

Without 10 years annual reports, value investing is non-existence in Malaysia

I hope that the last 10 years annual reports will be available online in the 3 months as claimed, for free. I personally emailed BURSA on last Thursday about this issue and until today they yet to reply me. For value investor, annual reports (at least 10 years) are the cornerstone of analysis.

I humbly invite and hope all prudent and value investors to email to Bursa Malaysia to appeal it to retain the last 10 years annual reports of listed companies. Not all company put their last 10 years annual reports in their online website.

Les't us voice out our opinion in order to protect our right and our interest.

Recently, Bursa Malaysia retreated all previous data of all listed company. Only latest 5 years annual reports available for instant and free access as previously.

I humbly invite and hope all prudent and value investors to email to Bursa Malaysia to appeal it to retain the last 10 years annual reports of listed companies. Not all company put their last 10 years annual reports in their online website.

Les't us voice out our opinion in order to protect our right and our interest.



LINK FROM: http://www.orientaldaily.com.my/index.php/business/cj55012

Icng: the proposal of exchanging share to acquire Nomad make me raise my eyebrows too

All value and prudent investors should read Charlie Munger's The Psychology of Human Misjudgement... Tell me where i am going to die and i will never go there.

Mr KC, when u read through the comments in i3, you will find that 80% of them cares only the stock price of tmr or next week. Only a minority care about intrinsic value of the business... Efficient market won't exist due to some typical human behaviour

Agree with Mr Nobody :)

Any comments is welcome... My opinion may be wrong. Pls give knowledge :)

PS: some profit in latest yr of nomad is due to sell of asset and non-recurring as told by its CEO

U can check the price of Nomad in 2014. Compare it with the offer price.

Incremental revenue is a sure, however profit is uncertain. Tg bungah hotel managed by plenitude is actually making a loss if u check its latest annual report, thus adding other hotels: making profit is not a sure for me. It should buy nomad by using a combination of stock issue and cash.

Problem with nomad is its high PE. Nomad is net cash company but has PE of 20. It doesn't hv consistent earning record. However most concern is: paying too much to buy won't let u prosper, let alone swapping ur high intrinsic value plenitude

Concern is over whether Nomad can add value or drag its leg back. Without Nomad this stock is sure undervalued.

Should care more about value than prices

Should care more about value than price

speakup: ask BN sell their holding.... drop to RM 1 also i not afraid, instead i will be happy :)

shazza: if drop less than rm2 i will be very happy, it is an opportunity to buy bargain stock for value investor

The lower the better :)