Posted by stockmanmy > Apr 7, 2017 06:02 PM | Report Abuse
On Genting, let me tell you a secret.....I actually asked ask KYY to follow me buy Genting at below $ 8.00 for the same reasons I posted here.
I though a guy like him should get some Blue Chips for once. He told me he is very bullish of the market when everyone was panicking in Nov / Dec.
He refers Genting to his assistant, don't know what happened to it.


Secret? What is so great of your "secret" that you think others here want to hear?

Let me tell you the obvious, which most people know, but surprised you don't know at all. He won't has interest in a big cap stock, Reits or whatever, like Genting for the very reasons he can make money in a zero sum game.

Don't be naive and simply reveal your so-called "secret". He probably laugh at you at your back.

Posted by stockmanmy > Apr 7, 2017 04:46 PM | Report Abuse
my actual words...
"meaning you get its dozens of casino license at book values, you get back your whole market cap in 5 years from earnings before interest and depreciation"
you are not supposed to debate by editing what I wrote...that is cheating.


I have never read investors talked like that.

"meaning you get its dozens of casino license at book values, you get back your whole market cap in 5 years from earnings before interest and depreciation"

Very strange. MC is the share or equity value, EBITDA is company earnings.

You may say the MC is only 5 times EBITDA.

But again EBITDA is the "bullshit earnings" of the firm, and how can you use a ratio with the numerator for equity shareholders, but the denominator for the whole firm?

Right or not, accountant?

But again have you read what Charles Munger and Warren Buffet talk about EBITDA as posted by me above?

Posted by stockmanmy > Apr 7, 2017 03:54 PM | Report Abuse
On Jaks projections......

On IRR from electricity sales, I am given to understand that the actual IRR from electricity sales will far exceed what is given to the bankers. ..and why they think so.


Yeah yeah yeah, the IRR is > 100%. Just keep on buying JaKs. But why don't you do it quietly and why you want to tell the whole world that Jaks is so good that it would jeopardize your buying at a lower price?

Why you so stupid doing that?

Nobody even talks about Jaks in this thread, is there?

Here’s what Munger had to say about EBITDA in the 2003 shareholder meeting.


[When goodwill was required to be amortized,] we ignored amortization of goodwill and told our owners to ignore it, even though it was in GAAP [Generally Accepted Accounting Principles]. We felt that it was arbitrary.

We thought crazy pension assumptions caused people to record phantom earnings. So, we’re willing to tell you when we think there’s data that is more useful than GAAP earnings.

Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).

It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.

People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.

This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.

We at Berkshire are going to spend more this year on cap ex than we depreciate.

[CM: I think that, every time you saw the word EBITDA [earnings], you should substitute the word “bullshit” earnings.]

– Source: What adjustments to reported earnings do you make?

Genting has a market cap of 29.8b as on 31st December 2016. Its total equity was 65.8b.

Tell me accountant. How do you justify your statement here,

"Its market cap to EBITA ratio is 5, trading close to its NTA.....meaning you get its dozens of casino license at book values, you get back your whole market cap in 5 years"



Posted by stockmanmy > Apr 7, 2017 03:34 PM | Report Abuse
Why must I have a valuation for Genting.?
Genting, of course , is a fantastic one for value investors. I don't need any calculation, its in the front pages of its Annual Report.......Its market cap to EBITA ratio is 5, trading close to its NTA.....meaning you get its dozens of casino license at book values, you get back your whole market cap in 5 years from earnings before interest and depreciation....and its a Blue Chip.

Getting dozens of casino licences at book values should be rewarding enough for all value investors...and a market cap to EBITA ratio of 5 to boot.

Posted by stockmanmy > Apr 7, 2017 09:24 AM | Report Abuse
Genuine Value investors do not whack Ace Market counters and do not whack Fibon.

True, we never “whack” Fibon, or any stock. We invest for long-term. Unlike you like to “whack” or “sailang” everything.

How were your “sailing” in UMWOG at 80 sen? what about your “whack” in CSCSteel at RM2.30+?


Fibon was my stock pick in my “Stock Pick Challenge” in 2013 at 33 sen. Please refer Table 2 in this thread.

http://klse.i3investor.com/blogs/kcchongnz/119863.jsp

Up till 4th April 2017, or 3 and a half year, it returns a whopping 149%, whereas Genting returns 20%. So, if going back to 2014, which stock you would invest on 1st August 2013?

Posted by stockmanmy > Apr 7, 2017 09:24 AM | Report Abuse
Genting, of course , is a fantastic one for value investors. I don't need any calculation, its in the front pages of its Annual Report.......Its market cap to EBITA ratio is 5, trading close to its NTA.....meaning you get its dozens of casino license at book values, you get back your whole market cap in 5 years from earnings before interest and depreciation....and its a Blue Chip.

ME: REALLY AH, GET BACK YOUR MARKET CAP IN 5 YEARS IF MC/EBITDA IS 5 TIMES? WHERE YOU LEARN ONE AH?

This is what warren Buffet said aabout people using Ebitda

Buffett’s Thoughts on EBITDA?

A year before that in 2002, it was pretty much the same when it came to EBITDA.
It amazes me how widespread the use of EBITDA has become. People try to dress up financial statements with it.
We won’t buy into companies where someone’s talking about EBITDA. If you look at all companies, and split them into companies that use EBITDA as a metric and those that don’t, I suspect you’ll find a lot more fraud in the former group. Look at companies like Wal-Mart, GE and Microsoft — they’ll never use EBITDA in their annual report.
People who use EBITDA are either trying to con you or they’re conning themselves. Telecoms, for example, spend every dime that’s coming in. Interest and taxes are real costs.

Posted by stockmanmy > Apr 7, 2017 09:48 AM | Report Abuse
And if you want to show success , you have to eliminate margin of safety as practised here in i3 from your thoughts. Otherwise, a share go up 5%, it already drop off your margin of safety and quickly sold it off already.

When you buy a share with MOS of 30%, and you sell it when it goes up 5%? Is that the way a self-proclaimed accountant understand what MOS is?

I think you better learn MOS from an engineer, a genuine engineer.

http://klse.i3investor.com/blogs/kcchongnz/115857.jsp

The more you talk, the more you exposed yourself to be an empty tong, pong pong pong.

Posted by yenhui_koh > Apr 7, 2017 12:13 AM | Report Abuse
One does not simply embrace risk without knowing the rewards are better.
It's ok that you don't see value investing as a nice tool to build long term wealth. But referring to your "good business, good people and good price", assume you already have a sustainable and profitable method to identify the good business + good management, do you mind to share how do you decide if it's at good price to enter? And to what extent you should sell your holdings? I believe you have the generousity to share, right?


Stockmanny,

We are still waiting for your evaluation of Genting that you claimed is "fantastic undervalued".

Here are the data for you again,

Genting: data from Malaysiastock.biz

Share price: RM9.33


Revenue: About RM18 billion a year (very consistent over the last 5 years)
Trailing twelve months’ EPS = 57.21 sen
ROE 6.1%
Dividend per share: 12.5 sen
NTA: RM9.35


Please lah, I am sure you can do some simple arithmetic as an accountant. Just prove to us, at least once that you are indeed knowing something about investing.

I know all secondary students in accounting class can do it.

Posted by stockmanmy > Mar 30, 2017 04:38 PM | Report Abuse
kc
you mislead people
You compile a table of warrants and profit and loss at expiry dates.
of course, there will be some in the money, some out of money at expiry date because all of them were issued with different terms.......
you have shown nothing meaningful.



I misleading people? where and how?

Table 1 in this article clearly shows that C34 and C35 with zero premiums, expire with cash settlement of a gain of 43.5% and 25.2% respectively after two months as shown in table 2.

Table 1 also shows C40 with a premium of 36.6% two months earlier, and with the same expiry date as C34, expires with total loss as shown in Table 2.

Isn't that very clear a call warrant with low premium with a better outcome at expiry?

Volume was never talked about volume in the article. It was not that relevant for me.

You are the one who say again and again and again that the call warrant with the highest volume is the best. So, show us, which warrant has the highest volume and has it got a better outcome?

Shows numbers, evidence, proof etc, and not simply bark!

Posted by stockmanmy > Mar 30, 2017 11:11 AM | Report Abuse
Just focus on the mother share movements and buy the highest volume warrants if you want more andrenaline......nothing else matters.

Posted by stockmanmy > Mar 30, 2017 02:17 PM | Report Abuse
Air Asia, they give you many CW to choose.
Is this real choice or Hobson's choice?
You think you are so smart you can choose the one cW that will make you money while the rest will lose you money?
is that arrogance, ignorance or stupidity?
it is just marketing gimmick to suck you in.....like a supermarket with many choices of cigarettes.
I think a little knowledge is a dangerous thing.
your task is not to choose the one CW that will make you money. Your task is to read the Air Asia trend correctly.


This article has shown you, with numbers, that precisely by choosing the call warrants with low premium, high gearing yields you the best returns such as C34, +43.5%, C35 at +25.2%, against C40, the highest volume? that incurred total loss.

So please show your records, with numbers on the statement as claimed by you, to justify that you are not "arrogance, ignorance or stupidity.

Posted by Blacksails > Mar 30, 2017 12:10 PM | Report Abuse
KC Chong, About a decade has past since PNB first issued those covered warrants in Bursa. Do you think the current issuers like IBs hedged all their call warrants?


If IBs do not have the underlying share before issuing those call warrants, those warrants are "naked" warrants, not termed as "covered" warrants.

If IB has the underlying shares before writing those call warrants, then the rise/fall of the underlying shares/warrants do not matter that much, as warrant price moves in tandem with the underlying shares. The loss in warrants is compensated with the rise of the underlying shares it possesses, and if the hedging is done correctly.

Posted by Blacksails > Mar 29, 2017 08:46 PM | Report Abuse
If I'm not wrong, the first covered warrants were issued by PNB, and they were all blue clip counters. Believed PNB made a big loss in the end.

If PNB had hedged, or covered those written call warrants, they shouldn't be losing big.

They appeared to become speculators rather than as hedgers.

Posted by Blacksails > Mar 29, 2017 06:45 PM | Report Abuse
KC Chong, What is your opinion on Maybank-C24? Would you say call warrants are used by seasoned traders/ investors as an "insurance cover" in certain cases, if you know what I mean.


Writing, or selling an option, or call warrant is more for investment banks here, not traders/investors like those markets with matured option market.

The writer of options would have the underlying shares for those "covered warrants".

Posted by Ezra > Mar 29, 2017 06:20 PM | Report Abuse
“Never argue with an stockmanmy. He will only bring you down to his low level and beat you with experience.” ― Ezra.


I always welcome constructive criticisms, and not personal attack. It is good to discuss things in the forum. This guy is ok as he likes to argue on anyone's view and he doesn't go on personal attack.

On the other hand, he will sing praises non-stop for one person, on every word he says and whatever he propagates, some of them are so misleading and utterly wrong.

Very interesting guy. Never met one to this extent before.

Posted by insulter > Mar 28, 2017 10:53 AM | Report Abuse
it is not a right thing to teach retail call warrant... most of the people lose until underwear lose...


Promoting punting of call warrants to the general public is definitely not right. That is why the below was my opening statements.

However, is it bad to teach them to avoid the pitfalls in punting of call warrants?



"Punting like the above can be fun, but,

“Derivatives are financial weapons of mass destruction.” -Warren Buffett

Each time I talk about call warrants, I always quote what Warren Buffett said on the above. This is because it is dangerous and unethical to promote something like punting to the generally innocent and naïve public, just like promoting margin finance to the innocents. My purpose writing about this aims at sharing what I know about punting of call warrants, and for those still insist in doing so."

yangstyle10forms, excellent comment. Thanks.

That is arbitrage? Where did you learn your accounting stuff?

And can show some examples that you buy the call warrants with highest volume and you made money?



Posted by stockmanmy > Mar 27, 2017 04:33 PM | Report Abuse

what is it you want to choose between c1 or c2 or c3 or c4....if it is not arbitrage?

just buy the one with the largest volume or ignore all together.

Who is talking about arbitrage opportunity in AirAsia call warrant?

Do you understand what arbitrage is?


Posted by stockmanmy > Mar 27, 2017 02:22 PM | Report Abuse
kc
KLSE is a semi perfect market. There is no arbitrage opportunity between c1 or c2 or c3 or c4.
all in the same boat, all sink or float together.
instead of focusing on arbitrage between various Cs, the grey matter is better used in more relevant matters.

Posted by stockmanmy > Mar 27, 2017 02:09 PM | Report Abuse
kc
there comes pivotal moments occasionally. sailang and make huge and fast returns.
Like Jaks from down to $ 1.00 soon after results. from a high of $ 1.40.
$ 1.00 was the starting point before the last rally.


So how much have you made sailanging Jaks?

How many times and how much you have made big using your apa-itu "pivotal moment" and sailang and made big money? Which occasion, which stock?

Have you become filthy rich by using your apa-itu "pivotal moment" and become multi-millionaire sailanging UMWOG? What about sailanging CSC Steel at RM2.30+?

Posted by stockmanmy > Mar 27, 2017 01:26 PM | Report Abuse
kc
if investment is by formulas, some one would have invented the perfect algorithm by now and leave every thing to the computer.
no need human input already.


so mind to share how you use your "pivotal moment". "dynamic investing" etc. and make money in the stock market?

Some records would be good.

Posted by stockmanmy > Mar 27, 2017 10:59 AM | Report Abuse
in the case of Airasia where there are many competing options for call warrants, how do you decide which call warrant?

ME; EASY AS EXPLAINED IN MY ARTICLES. IT WORKS MOST IF NOT ALL THE TIME, UNLIKE YOUR FUZZY "PIVOTAL MOMENT", "DYNAMIC INVESTING" AND ALL YOUR OTHER NOOSENSE.

the interplay between premium, time and gearing is a very complex one.

REALLY. YOU CAN'T EVEN UNDERSTAND MY SIMPLE EXPLANATION?

if you have the software, you can apply the Black Sholes model......

I DO NOT NEED A SOFTWARE TO ESTIMATE VALUE OF DERIVATIVES. IT IS NOT DIFFICULT TO BUILD AN EXCEL TEMPLATE.

But I tell you it is waste of time.

If one make, they will all make money, and vis versa.

I HAVE JUST EXPLAINED TO YOU HOW LOOKING AT PREMIUMS, TIME VALUE, GEARING IN ORDER TO HAVE BETTER CHANCE OF MAKING MONEY PUNTING CALL WARRANTS. ALAS, AS USUAL, I DON'T THINK YOU UNDERSTAND.

Don't use your grey matter for redundant stuffs....use your grey matter for more effective matter like market conditions etc etc........just buy the call with the largest volume. or don't buy if you are not comfortable with market condition.

CARE TO ELABORATE? CATCH NO BALLS.

Posted by stockmanmy > Mar 27, 2017 09:08 AM | Report Abuse
patterns come in many forms including....geometric shapes, formulas, ratios, mathematics but alas,
the moment you find a pattern, the pattern changes already.


formulas, ratios, mathematics are patterns?

OMG!

Posted by Hippo > Mar 26, 2017 10:40 PM | Report Abuse
Wondering whether KC sifu can comment a bit on C38.


Table 3 in the article shows you the comparison of C38 with other call warrants.

C38 has the lowest premium, and the highest gearing. Good punt I think.

Just that its time is short now which does not give it enough time to make potential extra-ordinary gain for example like C47.

Posted by stockmanmy > Mar 26, 2017 06:41 PM | Report Abuse
data mining, kc?
doesn't work.
the moment you find a pattern, the pattern changes already.


What "data mining"?

What "pattern"?

What are you talking about in relation to this post?

Posted by spear > Mar 6, 2017 04:58 PM | Report Abuse
good value investing point of view. however, if you can combine technical analysis ,i believe you can increase your yield..

in Magni's case, I highly doubt you can use technical analysis, selling low and buying at higher prices, can beat the buy and hold strategy. No way.

In fact, your return will be far behind, definitely.

Posted by kcchongnz > Feb 22, 2017 06:52 AM | Report Abuse X

Can you tell us the truth, what did you do for a living before you retire?

Posted by stockmanmy > Feb 22, 2017 08:32 AM | Report Abuse
I think I will let you guess


Snake oil salesman?

Posted by stockmanmy > Feb 21, 2017 02:00 PM | Report Abuse
Kc
To evaluate a company with small $1 million a month revenue.....
First be prepared to break all rules normally used in evaluating other shares.
I means all formulas and accounting ratios so loved by you.
The accounting information is quite meaningless.


Can you tell us the truth, what did you do for a living before you retire?

Posted by stockmanmy > Feb 21, 2017 01:09 PM | Report Abuse

ME: OF COURSE A SMALL COMPANY LIKE THAT IS HARD TO MANIPULATE.

kc...you stock market man or not?
how can you say such a sentence?
TEnaga and Maybank la....even billionaires cannot manipulate.


I thought you are s street smart guy. but you don't seem to understand what I was trying to tell you.

Posted by stockmanmy > Feb 20, 2017 10:35 AM | Report Abuse
kc
If you say Dynamic Investing is gambling.

ME:DID I SAY ANYTHING ABOUT "DYNAMIC INVESTING" IS GAMBLING?
WHAT I AM ASKING IS WTH IS YOUR THIS "DYNAMIC INVESTING"? HOW YOU MAKE MONEY? PLEASE ELABORATE WITH EXAMPLES.

I'd say buying a share monthly revenue is slightly more than $ 1 million is excessive gambling.

ME: WHAT IS INVESTING, AND WHAT IS GAMBLING?
TO ME, STUDY THE BUSINESS OF THE COMPANY WELL, HOW IT MAKES MONEY, HOW IS THE RETURN ON CAPITAL, WHETHER EARNINGS AND CASH FLOWS ARE GOOD, BALANCE SHEET, ETC. IS INVESTING, WHETHER THE COMPANY IS BIG OR SMALL.

WTH "DYNAMIC INVESTING", WTH "PIVOTAL MOMENT", "FOCUS AND MARGIN", "SAILANG" ETC. ARE WHAT? INVESTING? NOT EXCESSIVE GAMBLING?

Such a small company, where got stability? predictability?
ME: LOOK AT HOW FIBON HAS BEEN DOING THE LAST FEW YEARS. AREN'T THEY MAKING CONSISTENT EARNINGS AND CASH FLOWS?

PREDICTABILITY? WHERE DID I USE THE WORD "PREDICTABILITY"

I don't know la....I have never bought shares of such a small company before.

ME: THAT IS WHY YOU HAVE NOTHING TO SHOW SO FAR. ABSOLUTELY NOTHING!

Uncle K even worse....there is no way such a small company share can provide the liquidity for him.

ME: OF COURSE A SMALL COMPANY LIKE THAT IS HARD TO MANIPULATE.

Mohd Abd Hafiz Zakaria,

My opinion is No.

I guess you are not good or confident enough yet to invest on yourself. Take the alternatives given below. What we should look at is risk-adjusted return.


Posted by CFTrader > Jul 19, 2015 02:17 AM | Report Abuse

While your portfolio suffered a potential loss of 7.296% to gain a 12% ; KWSP offers zero-risk return of 6.35%.

Note of some risk free investment vehicle.
1. ASB (Bumiputera sahaja) - 7.75% + 1.00%
2. KWSP - 6.35%
3. ASW 2020 - 6.6%
4. ASM - 6.6%
5. ASD - 6.6%
6. AS1M - 6.6%
7. ASB 2 (Bumiputera Sahaja) - 6.6%

stockmanmy I prefer to make real money, not monopoly money......
Got a good mentor.


I am happy you have found a good mentor.

Making real money?

How is the result of your "dynamic investing", "pivotal moment", and "sailang" with "focus and margin" in your CSCSteel at RM2.38?

Mind share with us?

Posted by stockmanmy > Feb 19, 2017 06:23 PM | Report Abuse
Uncle K would not be interested

That is precisely why value investor are interested in it.

We are doing investing man, not "pivotal moment investing", whatever it means.

Posted by ks55_ > Feb 19, 2017 05:15 PM | Report Abuse
Winning the game at the expense of others - felicity
https://klse.i3investor.com/blogs/kianweiaritcles/116030.jsp

The above link is a good link with the following message everyone must take heed of,

"In today's world there are so many reliable sites where we can check the facts - and for those who really want to get tips, please really check and recheck them. Your money is your responsibility!"

But make sure you cite it in the right thread, unless you can show that there are misleading statements in this article.

Posted by ks55_ > Feb 19, 2017 04:46 PM | Report Abuse
Why not ask to buy when 50 sen? Want to sell now?


Have I ever asked anyone to buy any stock?

I shared the fundamentals of Fibon in August 2013 when it was trading at 32.5 sen, then again on 1st January 2017 at 55.5 sen. No, I never ask you to buy.

Now I share why I chose Fibon when it was trading at 55.5 sen. did I ask you to buy? No, I never.

Posted by stockmanmy > Feb 16, 2017 11:51 PM | Report Abuse

you can or cannot stand is you.....but not illegal nor immoral to teach people how to be super investors.

ME: WHO SAID IT IS ILLEGAL OR IMMORAL TO TEACH PEOPLE TO BE SUPER INVESTOR?

Let me tell you how to be super investors....its two words, focus and margin account. This is your passport to unimaginable wealth.

ME: YOU TELL ME TO BE SUPER INVESTOR? WHAT DO YOU HAVE TO CLAIM THAT?

FOCUS AND MARGIN ACCOUNT? HOW? ANY SUBSTANCE IN YOUR THIS TALKING COCK?

learning is by practise...by doing, by forecasting, measurement, and revise.

ME: YEAH KAH? SHOW HOW YOU PRACTISE, DOING, FORECASTING, MEASUREMENT, REVISE......

I HAVE NO IDEA YOU ARE TALKING ABOUT.

Focus and margin...I learn a lot. The way to unimaginable wealth is first to unlearn what other people do

ME: WHAT YOU LEARN? I HAVE NOT THE FAINTEST IDEA.
UNIMAGINABLE WEALTH? REALLY AH?
UNLEARN WHAT OTHER PEOPLE DO? DO WHAT?

Every super investor is a sailang investor. Look at how Warren Buffett is a sailang man all his life.

WARREN BUFFETT A SAILANG MAN? WHERE YOU GOT THAT? SAILANG WHAT/

Posted by stockmanmy > Feb 16, 2017 05:37 PM | Report Abuse
Worse case is margin finance is also promoted heavily, even with investment bankers in the promotion talk to entice those present to buy those stocks promoted,with "cheap" margin financing rate.
This I can't stand. It is really really very very bad.

================================
why? you against capitalism

margin finance is neither illegal nor immoral. It is the oil that grease capitalism.


I am surprise to see that as an educated person, some more an accountant, you can't see that promoting a stock to the public furiously, and encouraging them to use margin finance to buy the stocks being promoted, while selling his stocks relentlessly at the back, as described in this article, is irresponsible and immoral.

Some more wants to be an accomplice.

"Over the last 2 years in Malaysia, I noticed an alarming state. There are just too many whom have introduced stocks at a seemingly low price, picked them up and call for a short term gain (by asking other people to buy). There will be a group of people whom will just follow. This is what I called - a hit and run and where they will never come back anymore. The ones that picked up the crumbs will often lose to the ones that call for the stocks in the first place.
In theory buying underpriced stocks is definitely not a wrong doing but the way it is done is really not right. Calling it, when other people were still buying for that person to sell is really irresponsible but unfortunately it is vastly happening."


Yes, the above happens all the time. But that is the fact of life in KLSE. Many people think there are tooth fairies in the stock market helping them to make moeny.

Worse case is margin finance is also promoted heavily, even with investment bankers in the promotion talk to entice those present to buy those stocks promoted,with "cheap" margin financing rate.

This I can't stand. It is really really very very bad.

Posted by isandy > Feb 15, 2017 02:04 PM | Report Abuse
should I buy?


90% of retail investors lost money listening to the "advice" of gurus. The 10% who make money because after listening to the advice, study the company themselves, and make their own decision whether to buy or sell.

Of course the caveat is you must know what to study.

There ain't no tooth fairy in the stock market.

Posted by Dolly_Chai2 > Feb 14, 2017 03:42 PM | Report Abuse
KC, when you said most often you don't average down your paper-loss shares...
then mind to share what would you do?
1) Sell at a loss? (i think this is unlikely as you bought a share based on cheap valuation of EV/ebit and DCF so if the share price drops more, it should be more attractive)
2) do nothing. wait for the share price to go up to your targeted intrinsic value
just a small doubt of mine : if you are quite confident (yes, nothing is 100% for sure) that the fundamentals of the company is still great, why don't you average down your entry price?


i seldom average down because as a retail investor, I have limitation to information and my ability of analysis, and i am afraid i could be wrong.

If there is no change fundamentally, I will hold on to it.

But if I am very, very, very confident about it, I may average down. Only that i am afraid I become over-confident.

Posted by Rei Ccs > Feb 10, 2017 08:11 AM | Report Abuse
Do you avg down for yr negaive return stoc?


Sometimes I do, but more often not. It depends on individual circumstance.

Chan sifu,

Wanted to meet you when I went back to Bentong this Chinese New Year. Wish to join your telegram, ok?

Posted by Dolly_Chai > Feb 7, 2017 02:46 PM | Report Abuse
KC, mind to share what you think of Prlexus?
I know you selected Magni as your 2017 stock pick.
To me, Prlexus is also relatively good in terms of fundamentals on Magic formula and cash yield.
They are both in a similar business so perhaps you can enlighten us why you had chosen Magni over Prlexus.


I have not looked at Prolexus for a long time. More than 3 years ago,I did make some comparison as shown in the link below:

http://klse.i3investor.com/servlets/forum/900229424.jsp

Posted by John Lu > Feb 6, 2017 12:12 AM | Report Abuse
Geng...can you please give some advice for my 2017 stock pick?
Hibiscus, RGB, Icon, Sendai and Seacera.

If you can tell me the reasons for your stock picks, I can give you some comments.

I have followed Harry's postings. Any newbie following them would have learned a lot on the right path in investing.

Anyone following his buy calls would have done well too.

Posted by Flintstones > Feb 6, 2017 01:41 PM | Report Abuse
Kc chong, may I know what is the purpose of this article beside showing that you are lucky? Hows your subscription business doing so far?


Flintstones,

Yes, luck plays a big part in investing. However, some investing strategies do have more luck than others, for example, the fundamental value investing I have been propagating does have more luck as I have shown you many portfolios of mine posted in i3investor.

Oh yeah, Flintstones, may be you can share with us your luck too. I am eager to know too.

My subscription business is doing very well. Thank you.

If you have my ability, you should do it too.

Posted by Jay > Jan 31, 2017 07:07 PM | Report Abuse
good analysis, just a few points to consider
1. declining orderbook
this is where a lot of investors are concerned about, an analysis of historical order book to revenue to gauge the impact of the smaller orderbook on future revenue would be good. estimated PE would be more relevant than historical PE
2. use of cash
all EV measures looks low when a company has a lot of cash. good thing about FF is they are paying good dividend but they did mention for a long time that they plan to acquire other companies. that's why they set aside the cashpile. so if they do announce a sizeable acquisition, would the investment thesis change? and idle cash not used efficiently does not create much value either


Good comments. Thank you.

I have read some of your analysis and report. Your analysis and report are very thorough, and very good indeed.

This are my opinions:

1) Detailed analysis is definitely good as one should look at every angle possible when investing. However, how detail one can go into depends on many factors; how familiar he is in that particular sector, how much information he has, which profession he is in (investment bankers and analysts are professionals in this as they can get all information easily and they are full time, often just in analysis of one industry), and most of all, how much time he has, and willing to devote to it.

But sometimes the law of diminishing return comes in too and one has to make a choice.

2)Cash in balance sheet is a safety buffer when investing, best of all you don't have to pay for it. Two exactly similar companies, one with excess cash and the other none, definitely the one with excess cash is a better company to invest in, no matter how the management uses the cash.

For example, if you are a dividend yield investor, that definitely gives you great peace of mine that dividend is likely to be sustainable. How is this cash utilize, unfortunately it is the prerogative of the management. Management can also takes on new investments when good ones come along, hopefully they don't simply make acquisitions just to build a bigger empire, and destroying shareholder values.

Posted by wkitwing > Jan 31, 2017 05:16 AM | Report Abuse
Equityengineer The only catalyst for increase in Favco price is OnG sector. The reduction in oil output, how can it be a catalyst for OnG construction company. New orders will be deplete since less oil should be pumped out.
"The decrease in profit before tax for the Group was mainly due to decrease in sales which is in line with industry climate and order book".
The stock price may be undervalue and the metrics can prove it, but the upside is still in increase of sales
They have some contracts for this year for tower crane amounting about 130 mil..
Personally, its really tough to say to buy even the price have rose a bit since i first looking at the stock at 2.40.
30/01/2017 13:42
kcchongnz sifu,would you mind comment on the above by our fellow equityengineer?


Equityenginer certainly has his valid concern about that to invest in FAVCO, it must have increasing sales in order for the price to shoot up.

For me, my investing thesis of investing in FAVCO, if you read carefully, is based on its present. It is undervalued based on its present financial performance and financial position. Hence as long as the business of FAVCO does not deteriorate further and badly from this point, I should be getting satisfactory return in the long-term.

I am not looking for fast return, but it also doesn't mean that won't come.

Posted by Flintstones > Jan 30, 2017 11:25 AM | Report Abuse

Well, i will leave it to other members imagination on who is the snake oil salesman here. It seems that i am not the one selling lessons, subscriptions or managed accounts. And please dont crap here with the howard marks theory. I have read the book as well and sincerely, i dont think your "extrapolate the past" analysis fulfills any of his second level thinking.

A SNAKE OIL SALESMAN IS ONE WHO CLAIMS THAT HE CAN SEE THE FUTURE LIKE THE ONE I HAVE JUST MENTIONED. BUT DOES HE? I HAVEN'T SEEN ANY EVIDENCE FROM HIM YET.

WHEN SOMEONE EARNS AN HONEST LIVING, TEACHING SOMETHING USEFUL FOR LIFE, AND MOST BENEFIT FROM IT, AT A LOW AND AFFORDABLE COST, IS THERE ANYTHING WRONG WITH IT? WHAT IS WRONG WITH IT?

REALLY, YOU HAVE READ THE BOOK BY HOWARD MARKS AND UNDERSTAND IT?

Let me show you whats second level thinking by posing a few questions to you. How much do you know about favelle favco business? What is their competitive advantage? Who are the major competitors of favelle favco? What is the "current" landscape of the crane industry and where does favelle stand? What is favelle favco management doing to embrace the slowing orderbook ahead? What is the current available crane capacity in Asia right now? Is crane rental rate increasing or decreasing lately?

I DO NOT DISPUTE IT IS GOOD TO KNOW ALL THE ABOVE. BUT DOES HOWARD MARKS TELLS YOU THAT YOU MUST KNOW ALL THE ABOVE IN HIS SECOND LEVEL THINKING? WHICH CHAPTER AND WHICH PASSAGE IS THAT?

THIS IS WHAT HOWARD MARKS SAYS ABOUT SECOND LEVEL THINKING WHICH IS THE MOST IMPORTANT AS FAR AS I HAVE READ,

First level thinking says, “It’s good company; let’s buy the stock.”
Second level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overpriced; let’s sell.”
First level thinking is simplistic and superficial, and just about everyone can do it. All the first-level thinker needs is an opinion about the future.
Second level thinker is deep, complex and convoluted.
Second Level Thinking
1. What is the range of likely future outcome?
2. Which outcome do I think will occur?
3. What is the probability that I’m right?
4. What does the consensus think?
5. How does my expectation differ from the consensus?
6. How does the current price for the asset comport with the consensus view of the future, and with mine?
7. Is the consensus psychology that’s incorporated in the price too bullish or bearish?
8. What will happen to the asset’s price if the consensus turns out to be right, and what if I’m right?
You can’t do the same things others do and expect to outperform.: to achieve superior investment results, you have to hold non-consensus views regarding value, and they have to be accurate. That’s not easy.



That my friend, is second level thinking. I am sorry to embarass you because we all know what you will claim when you dont know. And here comes kcchongz infamous - "I cant predict the future". Lmao. On a side note, if you are interested to learn about favelle favco business. I can arrange you a coffee session with the executive director of favelle favco, free of charge.

YOU EMBARRASS ME? I DON'T THINK YOU REACH THAT STANDARD YET.

SHOWING THAT YOU KNOW THE ED OF FAVCO? WHAT IS THE POINT?

Posted by wkitwing > Jan 30, 2017 09:55 AM | Report Abuse
what concerns me is its revenue keep on decreasing,kcchongnz sifu would you please clarify on this shrinking sales every month?


Everybody knows the revenue of FAVCO has been decreasing for the last few quarters. But that is the first level thinking.

In investing, you need the second level thinking. It is, yes, its revenue has been dropping, profit has also been dropping. Its share price has also dropped substantially, and many people are selling. At this price now, considering it has secured some jobs, and construction industry has been doing well, and oil price seems rebounding, is this price reasonable? What is its estimated intrinsic value? What is the margin of safety? Has the share price dropped substantially below its intrinsic value.

That is the second level thinking.

The second level thinking is not how good one predicts the future, as few can predict the future well consistently. That is the pitch of the snake oil salesman like the one below.

"Posted by Flintstones > Jan 30, 2017 10:02 AM | Report Abuse
Kcchongz knows only the numbers. He who extrapolates the past knows nothing about the future undertakings of the business. In the business world, it is easy to con people like kcchongz. You just show him a few years of financial reports with good numbers and tadaa! Hes conned!"