Posted by muzes23 > Dec 23, 2015 02:49 PM | Report Abuse
Hi KC.May I know how do you get the adjusted price of kfima? thanks.

It is from the daily prices available from Yahoo Finance, adjusted for dividends.

Posted by MG9231 > Dec 22, 2015 06:57 PM | Report Abuse
Merry Christmas KCChong. Although I am not your online student but I treat your articles as a lesson for refreshing what I have learned in our places.

Hi MG9231,

Glad to see you here. I remember we first "met" in Pintaras, then in icap.biz.

I know you are a great investor yourself. Appreciate if you could give critical comments in my posts in the future.

Merry Christmas and Happy New Year to all my friends here. Many of you I haven't even met before but in my heart, you are my true friends.

This song is dedicated to all of you.

https://www.youtube.com/watch?v=6lbPgfKK7m4

Posted by hissyu2 > Dec 21, 2015 07:56 PM | Report Abuse

investors are getting smarter... pretty hard to spot hidden gem... KC's picks are mostly time-proven-strong... anticipated to look for your 2016 picks...am surprised padini wasn't in your previous porfolio.

Padini is in my 2015 stock picks. The stock selection is less than two months ago when it was at RM1.62.

http://klse.i3investor.com/blogs/kcchongnz/85828.jsp

Posted by kkw812004 > Dec 21, 2015 08:38 PM | Report Abuse
Hi Kcchongnz ,the book by Dr Neoh, is it still available in book store? Do u have an electronic variant? can u share it with me?

I don't think it is available now. This is an old publication and hence I don't think there is any electronic copy.

Duit,

A beautiful song for you and others

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

Posted by ProfitMan > Dec 21, 2015 01:30 PM | Report Abuse
One of the first book i bought on the stock market was by Dr Neoh, a book which I have preciously kept till this day. It was a well written book and imparted many important investing principles. I am a great fan of his and its amazing that he recognizes the changing environment and in the process, his thoughts evolves with the change which is very admirable. Many many many years ago, I emailed him on the relevancy of some his contents and he very sincerely and honestly replied that some of them are no longer applicable due to the changed environment. His writings shaped a lot of my investment strategies.

Most of Dr. Neoh's principles still are relevant in today's environment. Just that one has to have independent thinking. For example his use of the Graham earnings formula using

V = EPS*(8.5+2*g)* 4.4/Y

A 5% and a 15% growth rate makes hell of a difference for the value of the stock. Hence I only use it to check if a hot stock is selling at a reasonable price, rather than using it to value a stock.

Another example is the use of dividend yield. i always check if a high dividend stock can sustain by checking its balance sheet and the stability of earnings and cash flows. Paying dividend from additional borrowings, rather than from free cash flows, is a no no for me.

inwest88, you understand me well.

To have a friend and be a friend Is what makes life worthwhile.

See you before CNY.

Good to have more people talking about investing in a business, and the language of business.

People who wish to learn more about it should join Ben's group.

Tan KW, thanks but no thanks.

Value investing can be a painful process. This is what one of the super investors I have followed closely said

"I just want to take advantage of prices away from value.. If you do good valuation work and you are right, Mr. Market will pay you back. In the short term, one to two years, the market is inefficient. But in the long-term, the market has to get it right—it will pay you back in two to three years. Keep that in mind when you do your analysis. You don’t have to look at the next quarter, the next six months, if you do good valuation work—.. Mr. Market will pay you.” Joel Greenblatt

For the one-year competition, it is suitable for traders, technical analysis, risk taking. Buy high beta stocks, micro and small cap stocks, high leverage companies and instruments, companies which one can get insider news etc.

Good luck to everyone participating.

Posted by Ahbeng Beng > Dec 14, 2015 05:09 PM | Report Abuse

Problem with fundamental investor is that....fundamental will change. Using past indicator as your fundamental guide will be very misleading. Beside, knowing the future trend and psychology of other investors in the play is equally important. If warren buffet was born 50 years earlier, in the 1900 america, using his technique will make you in bigger risk. He will not rise to his status at all, and will be ordinary loser if he applied his strategy. 1900 American companies 90% will not exist 50 years later. Many of current US companies listed was not born 100 years ago.


Well said. But let us look at these statistics and research findings regarding forecasting of future trend.

a. In US, the average 24-month forecast error is 93%, 12-month, 47% from 2001-2006 (SG Global Strategy Research)
b. There are too many variables; the economy, the path of interest rates, the sectors, the particular stocks, sales, costs, taxes etc
c. Forecast of target prices is a futile exercise. “We simply do not know” Keynes

• In four of the nine years, analysts have not even managed to get the direction of the change in prices correct!
• The absolute scale of the average forecast error is 25%

The above show that economists and professional analysts have been proven so poor in forecasting. What is the chance for yo and me to get future predictions right?

Warren Buffett's investing strategy is evergreen. It doesn't matter if he is born 50 years earlier or later, in my opinion.

Posted by geary > Dec 13, 2015 04:39 PM | Report Abuse
"Strong upward trend EPS growth of even by 1% every year, u can see the value of the company also will go up slowly every year."

Really? What if a company borrows $1 billion and make additional RM10m, or 1% growth in profit for the year. Does the value of the company goes up as you said?

"Erratic EPS trend will stagnant d price of the stock, even of high ROE and u should know negative EPS will bankrupt a company. It is all up to u to analyse it rationally."

How is it possible to get negative EPS with high ROE, or low ROE? What is R in ROE if it is not net earnings?

How do you analyse rationally with your logic?

Posted by Icon8888 > Dec 13, 2015 01:16 PM | Report Abuse
Apart from the few highlighted in your article, there are many many other gurus
It would be nice if you can also write about them (just my wish, not imposing on you)
I will buy you coffee once I have sufficient profit to fly to New Zealand for sightseeing

Yes, there are many other gurus who are as good. I will write about some of them. I will also write about the gurus in Malaysia.

Icon, you also have your own way of fundamental investing which I think it is good too. I am sure you have made sufficient profit to balanja me coffee. We have nice coffee here.

I am glad you like what I am sharing. Writer needs readers too.


Posted by meridian33 > Dec 5, 2015 09:37 AM | Report Abuse

There are many silent readers here, few of my friends are followers of KC Chong. Thanks for sharing, KC Chong.

Posted by 3iii > Dec 5, 2015 12:47 PM | Report Abuse

KC Chong You are sharing a lot of good stuff. Much appreciated.

Posted by jomalay > Dec 5, 2015 02:29 PM | Report Abuse
Hi KC, Thanks a ton for the analysis !!! just a quick question, where you obtained the 426,568 which was added to the PV of TV to get the total PV as $499,181 ?
Thanks in advance !!!
Love reading your stuff !
Jo

426568 thousand is the present value of the terminal value at end of yea 5 discounted at 10%.

PV of TV = 686991/(1+10%)^5 =426568

Duit,

1) when everyone has different definition of winner, could you please share how many percent of capital gain or other key indicator baru consider as winner? more than 8% or compare benchmark or BETA count?

Me: Winners to me are those stocks way outperform the broad market with alpha of 10%, 20%, 50%, 100% or whatever.


2) How and what to determine whether our winner can continue to RUN or halt their running. For example my SLP and SUPERLN how do I know my winners can still run or should I take profit? Other than business changes, fundamental change is there any specific key ratio like comparison of profitability ratio & efficiency ratio etc to speak on?

Me: Figure 4 in my article may give you some clues. Basically one must have a feel of what the value is compared to its price. Value can be a wide range.

3) If I wan to take MMSV for case study specifically within my time frame - 2 years it indeed a winner, however it also present to me a unstable of share price performance in 1 -year period (2014 Aug' - 2015 Aug'). Can I rely on Fundamental to decide to close my investment?

Me: For me, investing is a long-term endeavour. First one must only get into a serious relationship if there is good future. But things do change, and if the relationship is no longer sustainable, there is no point to carry on.

This again one must have a feel of value vs price.

Posted by GenghisHoe > Dec 1, 2015 07:18 AM | Report Abuse
kcchongnz may I know do you have a private discussion group?

There is a facebook group set up by one participant of mine for all the graduates of my online course. It is a very active group. But it is a private and closed group.

Hibiscus just announced its first quarter result ended 30 September 2015. Revenue is RM245k, but net profit is RM4.75m!

Wow, how interesting. There is a "other income" of RM24m arising from "Unrealized gain in foreign exchange"!

How interesting.

Go ahead and do you PE ratio investing.

Posted by i4investor > Nov 30, 2015 04:06 PM | Report Abuse
why make investment so difficult, I just use EPS & PE, settle...

Good point. That was what I did 30 years ago when I was a sucker in the stock market.

See the list of lemons mentioned in this post which was put up 2-3 years ago? Investors who base on PE ratio and rumours about how good they were and invested in them,lost their underwear, without any exception.

Posted by donfollowblindly > Nov 29, 2015 06:17 PM | Report Abuse
Coastal Contract bought at RM 3.27 now RM 1.90, why also miss in your calculation of return?
http://klse.i3investor.com/blogs/kcchongnz/70035.jsp

Yes, I have shared the investment thesis of Coastal, but Coastals is not one of the stocks in those two portfolios.

I shared scores of stocks in i3investor over these three years, mainly for sharing on some investment principles and methods. If you want to talk about the returns of what I have shared, try tabulate all those stocks I have shared, and check the returns of all the stocks I have written. Don't pick and choose just to engage in personal attack.

I am amazed that you are so unlucky that you have followed blindly investing in the less than 10% of those stocks which I have written and made losses.

It is an unfortunate six-sigma event.

Posted by donfollowblindly > Nov 29, 2015 06:13 PM | Report Abuse
Why in your calculation of return you always miss this investment: Maybank C6?
http://klse.i3investor.com/blogs/kcchongnz/58905.jsp

Maybank C-6 was not included in the portfolios of investment put up in 2013. For investing, I do not advocate people punting in call warrant.

I wrote about Maybank call warrant to share what is financial risk management is about. It teaches about what option is, what is it made up of, time value and intrinsic value, premium, gearing etc. I even share the valuation of call warrants.

I advocate financial risk management, and not speculating or gambling as explained in that article.

Have you learned anything from it?

Posted by donfollowblindly > Nov 29, 2015 09:57 AM | Report Abuse
Why always claim make high return but never got rich? Meaning high return fake one?
I never got rich.

The article here discussed about if solely relying on PE ratio is a good way to invest. But why are you talking whether I got rich or not?

High return fake one? The two portfolios of mine were published in i3investor 2-3 years ago. Both gained more than 100% now while the overall market is flat. How can they be fake?

If others follow those stocks in the portfolios, they would have made more than 100% return in less than 3 years. They probably would have made more if they have invested in other stocks following those principles and methods of investing.

Isn't the above more satisfying for me, than whether I got rich or not?

Posted by talkcockbotakchek888 > Nov 29, 2015 01:18 AM | Report Abuse
I thought you need to adjust earnings for any abnormal or non-recurring items to calculate your P/E? Both multiple or DCF methods need to adjust for extraordinary items and consider the earnings quality right.

The abnormal or non-recurring items were reported as "net profit for the period" which are used to calculate earnings per share. They are not reported under the "other comprehensive income" section.

How many people in your opinion know how to do the adjustment?

Posted by digiuser016 > Nov 26, 2015 07:44 PM | Report Abuse
Hi Kcchong
Peter Lynch also emphasized that keep your winner stocks in the portfolio, no point to sell a good stock after it has shot up tremendously.
My question is, as an investor, will you fall into "endowment effect" if you hold only winner stocks?
My next question is, will you buy a good quality stock that you had never owned after the stock has shot up tremendously but appears overvalued?

I never say I only keep winner stocks in my portfolio. I do have a couple of losers. I analyze most stocks i have bought before buying. Unless the fundamentals have changed, why sell when the price of a good fundamental stock has dropped in price? I am a fundamental investor, not a momentum trader as you would have noticed.

"That’s because in the world of investing, being correct about something isn’t at all synonymous with being proved correct right away.” Howard Marks

Your last question is found in my article here.

http://klse.i3investor.com/blogs/kcchongnz/86447.jsp

"But would I buy more if the prices continue to go up above the upper limit the "Sell" MOS? No, I won't."

Posted by digiuser016 > Nov 26, 2015 01:42 PM | Report Abuse
Hi Kcchong
May I know how you evaluate gadang?
Which valuation model did you use. Income(dcf,ddm), comparables(ev/ebit,p/e,p/cf, etc?) or liquidation (graham net net,nav)
2: What do you think about its quality of earnings ? ROE, ROIC and etc?


How I wish I know everything. But I don't. I know very little.

But one of my course participants knows much more about Gadang than me. He did a very good analysis, first judging that it is a good company with ROE and ROIC at mid teens and a high growth potential too. He used all the comparables as mentioned by you to value it half a year ago when it was trading at RM1.50.

His valuation then shows that at RM1.50, PE was at 6.6, Ebit/EV at 6.0. It was cheap. He used a discount FCF to value it too with an intrinsic value of RM1.93 then. Intrinsic value is likely have improved since then.

I relied on his analysis, after going through it, and bought quite a bit for myself and some for those whom i managed their fund. After buying it actually dropped quite a bit before rebounding back to RM1.84 now. Not bad in total return in such a short period.

I believe many of my course participants have invested in it too as his article was published in our training blogs.

I will follow this principle here before i sell:

http://klse.i3investor.com/blogs/kcchongnz/86447.jsp

In answering your questions, i would use sum of parts valuation for Gadang, if I have time and information, for its various business sections; property development, construction and its water treatment concession. Various valuation techniques such as discount cash flow which is good for its concession business, enterprise values, simple PE ratio can be used.

Posted by shinado > Nov 24, 2015 10:23 PM | Report Abuse
kcchongnz, great article. Here's an idea (don't shoot me if it's stupid): How about replacing non existent FCF with owner's earnings? Although I have yet to try it, let me know what you think about it. Thanks.

Haha, shinado, you are humorous. Have i branded anyone "stupid" before? You are a good investor yourself.

If you read what Buffett's owner earnings below, it seems to me there is little difference with the estimation of FCF in this article.

What do you think?


“If we think through these questions, we can gain some insights about what may be called “owner earnings.” These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges such as Company N’s items (1) and (4) less ( c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in ( c) . However, businessesfollowing the LIFO inventory method usually do not require additional working capital if unit volume does not change.)” – 1986 Berkshire letter

Posted by WinnieFoong > Nov 24, 2015 09:54 PM | Report Abuse
Thank you Mr Chong for all the articles, I enjoy reading all the good articles in the i3investor which contribute by different experts. I found that different guru are using different techniques for their investment. Some people are able to make more money and some less. However all the guru have the same intention, there is to help everyone to make more money.
As a reader, I will make use of the techniques which i feel more comfortable and can make more money.
However I feel that it is too bad to put down other people for the sick of self promotion. In order to get more "students".


Kind of agree with you that "self promotion" is kind of "sick". Hence I always try to discuss on subject matter, things, not on person. In this article, I discuss about how true super investors invest using very logical, sound, and intuitive fundamental methods, in my personal opinion.

Of course nothing works all the time and I am also often criticized on my methodologies, which I gladly accept and appreciate. You may read I often defend myself on some of the criticisms which I think is normal for everyone, as long as I don't go about personal attack like saying that the other person is bullshitting, misleading, or stupid.

"In order to get more students"? Of course, my message is very clear, to get more students. Is that bad?

First thing I get some income for sure if people subscribe to my courses. But that is from quite some hard work of my part.

More so it is a passion of mine now to disseminate some of the knowledge that I acquire from the fundamental value investing. It is quite a waste if I don't. That is what I personally think.

Quite a number in i3investor also said they learn from me without being a student of mine. This is one.


Blog: Do you have any No-Brainer Investment? kcchongnz

May 17, 2015 02:47 PM | Report Abuse
honestly speaking , I do not join Mr KCChong online course, I DO NOT pay Mr KCChong a sen, not a single sen, but these 2 years , I made a few lorries of cash using his recommended valuation techniques.


Don't you think the investing community needs some fundamental knowledge in investing in order to get reasonable and safe return from investing in the stock market?

Many thank me for what do for the small fee of a few hundred Ringgit I charge. This is one of them:

Posted by coolio > Oct 22, 2015 11:58 AM | Report Abuse
KC, please keep doing the good things you are doing now. I know you will just ignore those annoying sound out there, you know your quality.
I just want to take this opportunity to say thank you again because recently I have achieved 7 figure in my investing journey...hehehe.. Thanks for your investing methods, no 8 wonders in the world is really amazing!

Posted by xyxy8 > Nov 24, 2015 01:08 AM | Report Abuse

This clever pisanggoreng forgot that KYY has earned millions from the stock market and has donated fifty million to USM just recently. Please tell us how much you have made in the stock market.


Making a lot of money from the stock market is nothing great. It doesn't contribute anything positive to the society. In speculating in the stock market, everybody wants to make big money. But there are people who make, and there are people who lose. Think about who normally make, and who are those who lose in this game, and what normally they do in order to ensure that I win, you lose.

Go ahead to worship those who make big money from the stock market if you wish, and follow whatever strategies they use to think of making big money too, but don't have to ridicule people sharing their strategies which are different.

Donating money for any good cause is definitely a great thing to do. Everyone will respect that. But that is an entirely different topic.

Posted by thec16 > Nov 23, 2015 08:27 PM | Report Abuse
Dear kcchongnz,
Can you show me how to calculate the market value of the firm's debt for VS?
I only know how to get the book value.
Thanks


Generally it is good just to use the book value of debts as it won't be much different when the stock is selling at a price not that big difference from its book value, and the debt is not that high.

If you want to calculate the market value, here is one piece I have written before.

http://klse.i3investor.com/blogs/kcchongnz/71783.jsp

sunzthe,

Investment is more of an art than a science. There are a lot of judgment involved; the more experience one has, the better the judgment.

There will be no end to this discussion, and no point to carry on.

Posted by sunztzhe > Nov 22, 2015 09:47 PM | Report Abuse
Calculating cost of Debt is straightforward. Is 12% a realistic expectation of the Cost of equity for VS shareholders in the industry it competes in??


Re is also tied to the health of the balance sheet, the stability of its earnings and cash flows. So what is your expectation?

To me Re of 12% for V.S is a little too liberal.

kcchong,
WACC= Cost of Equity + Cost of Debt
Please do advise what is the actual WACC based on your computation of the company's actual cost of equity and its actual cost of debt and the risk premium that you had decided over the actual WACC. Thank you.

WACC is the "weighted" average cost of capital. There is no "actual" cost of equity, only estimated. Same for cost of debts, it should be the market value which is also estimated, and hence no such thing as "actual" WACC.


WACC = E/V * Re + D/V * Rd * (1-Tc)

E = market value of the firm's equity
D = market value of the firm's debt
V = E + D
Tc = corporate tax rate

E 1846784
D 412208
V 2258992
Tc 24.0%
Re 12%
Rd 5%
WACC 10.5%

Posted by odie88 > Nov 22, 2015 12:29 AM | Report Abuse
Nice article and fundamental analysis with DDM, however a dividend growth of 10% is way too optimistic. 10% discount rate would be the same thing. But anyway, its only my point of view having that margin of padini continue to struggle.


Good comments. Those are the inherent problems with discount cash flow analysis. A change in discount rate and cash flows estimation, which is hard to do, change the intrinsic value by a substantial amount.

However, DCFA using DDM in my opinion is often more accurate because the estimation of dividend is not so uncertain as the change in free cash flows.

FCF fluctuates hugely every year, but dividend payment doesn't. Profitable companies do not want to reduce dividend to give a negative signal. As long as the company is able to pay the dividends, and one is conservative in the assumptions, one can be more comfortable with it.

Posted by pingdan > Nov 21, 2015 02:44 PM | Report Abuse
Kcchongnz: Nice article. Anyway the dividend paid during the year (12+6+3+3 *1,163,000/5)= RM55.8mil. In my opinion, it should be included in the calculating in free cash flow. If included the dividend, the FCF is positve rm2.9mil during the year. Also, one of the reason VS priced so high due to they generous in paying dividend. Just for discussion. I would like to heard your opinion on this . I not holding this shares neither. Thanks you


Pingdan, good question.

FCF is what is left from the net inflow of cash in the ordinary business less capital expenses. Dividend is paid normally from FCF. You can refer to some of my articles explaining what FCF is in the links below.

http://klse.i3investor.com/blogs/kcchongnz/48173.jsp

http://klse.i3investor.com/blogs/kcchongnz/76694.jsp

http://klse.i3investor.com/blogs/kcchongnz/78262.jsp

http://klse.i3investor.com/blogs/kcchongnz/83903.jsp

Alternatively, you can refer to some explanations here;

http://www.investopedia.com/terms/f/freecashflow.asp

So it is not right to add dividend to calculate FCF. It would amount to double counting for a company with actual FCF and pay dividends.

For company which doesn't have FCF like V.S, dividend is not paid through FCF, as there is no FCF. Dividends for V.S shareholders came from additional borrowings, money from private placements and ESOS which you can see from increase number of shares, additional long-term and short-term loans.

Is that really good when a company borrows to pay dividends? Or increase number of shares and hence diluting earnings per share with the private placements at a discount?

Tell me your opinion.

Posted by little_snake > Nov 20, 2015 10:49 PM | Report Abuse
so complex... try to make ur investment simple lol

It is really not that "complex" if one cares to digest it. It is just that like other thing, when someone sees something which is unfamiliar will straightaway dismisses it as "complex".

It is just an intrinsic value estimation using discount cash flows, a method which should be commonly used by analysts, but not most analysts.

The difference is rather than simply project a growth, it uses a growth based on fundamental determinants, from how growth is driven by return on capital, and reinvestment needs arising from that.

No need to "lol". I didn't say you must use this. It is like an additional wedge club in a good golfer's bag.

There are many golfers, already very good golfers themselves, who like to improve their games with some additional special wedges, like this one below.

Posted by pisanggoreng > Nov 20, 2015 11:02 PM | Report Abuse
A wonderful write up. I have learnt a new thing. Before this I indeed have problem dealing with negative cash flow. Now the cloud is cleared. Thank sifu KC.
your generous sharing of knowledge will definitely further enhance most of us here the skill of stock valuation

Posted by pisanggoreng > Nov 20, 2015 11:02 PM | Report Abuse
May I ask you some questions?
1.About Intrinsic Value, should we adjust the figure after every quarter result?
2. In Graham formula, the no growth PE is 8.5 and 2 times est growth rate, may I know what is the rationale behind these figures ( 8.5 & 2). Are these figures suitable to apply in malaysian market.

1) A company's fundamentals generally doesn't change so fast as per quarter, or two quarters, or even a year. Besides there is this seasonality; one quarter earnings and cash flow may be better or worse, Hari Raya sometimes occurs in the first quarter, sometimes in the second quarter, third quarter or the fourth quarter. Managers sometimes have the discretion of recognizing revenue at different period. They can even do smothering of those numbers.

Having said that, it doesn't mean one shouldn't watch over those quarterly numbers.

2) Graham's growth formula was made during his time, when growth is generally very slow.

A no-growth factor in the formula of 8.5 means a reasonable PE of 8.5, assuming long-term corporate bond rate at 4.4%. Flip it over, you get an earnings yield, E/P of about 12%, something Graham willing to pay for a company without any growth. If you use a growth assumption of say 30% for a very fast growth company, the "fair" PE is 68.5! Are you willing to pay a fast growth company with a PE of 68.5? Not me, not even haf of it.

Growth in the formula is the expected growth for the next 5-7 years. It is a forecast number. But how sure are you is the future growth prediction?

Research has shown that analysts have been poor in growth prediction, very poor indeed, not to mention retail investors like ourselves.

Hence I rarely use this to value a stock although I have shared this formula before. I do use it sometimes to check if the market price is reasonable, like doing a reverse engineering.

Posted by NOBY > Nov 20, 2015 11:10 PM | Report Abuse
KC, why is minority interest 0 ?


I have a dilemma in the minority interest here.

Book wise V.S has substantial MI. If I deduct the MI from the total value of the company to get the value attributed to equity shareholders of V.S, the balance is much less.

However, in aggregate, the subsidiary companies are making losses and not contributing to the value of the company for the time being.

Hence I took an arbitrary decision to exclude that.

Posted by BearbearDrop > Nov 19, 2015 11:59 PM | Report Abuse
I had see the price went up quicker after I sold them
And I swear to myself unless it went down to x or I won't buy it and you know it went even higher and it is no turning back to me anymore


You are not alone

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

Posted by CCCL > Nov 16, 2015 09:53 PM | Report Abuse

You will surely sleep well! If the money you invested in stocks is not for your breakfast,lunch,dinner, your retirement fund or your kids education fund.


Yes, more so don't use other people's money to invest or speculate in the stock market.

Stock market is full of uncertainties, it is unknowable.

Having good sleep is a good investing strategy.

Posted by Anti_bias > Nov 18, 2015 03:10 AM | Report Abuse
To those who think KC Chong is great here he lost over RM 100K punting in Maybank C6. Hence he said he not rich or no money.
http://klse.i3investor.com/blogs/kcchongnz/58905.jsp


I don't think this KC Chong is great or what too.

But I think that article on Maybank call warrant is a good article to learn about option, its use as a speculative and financial risk management tool.

I also spend a lot of time explaining gearing, premium, intrinsic value and time value of option, and introducing the Black-Scholes option pricing.

Free education for those who are keen to learn.

Not sure how he knows I have lost RM100k, or I have and have no money. Don't you think this statement is a little bias?

So you "anti" yourself?

Posted by BuLLRam > Nov 17, 2015 09:47 AM | Report Abuse

Hibiscus.. 2.70 to below 0.27..any ray of hope left??


When there is margin calls, it is devastating, and hope diminishes.

Margin financing is not good for individuals. When individual suffers, the others suffer too. It is not good for the whole market.

The Shanghai steep drop recently is a classic example.

Posted by cpnte > Nov 16, 2015 07:47 PM | Report Abuse
Yawn.. boring..2 dozen articles talking about the same knm. no other topic ka boss


Is there anything wrong keep on reminding newbies about the pitfall in investing?

Posted by pisanggoreng > Nov 17, 2015 02:41 PM | Report Abuse

if you do not lose in most of the cases, then you are safe
if you are safe , then you will win most of the times
safe is normally slow , but can be FAST and BIG also


Yes, pisanggoreng,

You have summed up the gist of my principles very well.

Posted by m00077 > Nov 17, 2015 01:41 PM | Report Abuse

Nice to hear your response. I don't understand you mentioned "bad people" refers to what/who?

Just ask around has anybody make any money investing in Marco?

Posted by m00077 > Nov 17, 2015 11:02 AM | Report Abuse

Mr kcchongnz, you have a lot of shares with different number of stocks, all has good and healthy balance sheet but never see you holding any MARCO which has a very strong balance sheet and is cash rich. I wonder why?

There are hundreds of stocks having healthy balance sheet, but why must also own Marco? Do I have that much money?

Bear in mind what Warren Buffett said,

"You can't make a good deal with bad people"

That is why I never look at Marco again.

Posted by NOBY > Nov 13, 2015 08:38 PM | Report Abuse
Nice sharing KC. i think for net nets, a few more qualitative screens may eliminate the potential value traps. One critical factor I look at is past price vs the net net value and attitude of management. This may filter out some of the perennial net nets vs some of the good companies just going through a rough patch

Noby, good point.

For many net net companies, they fall into this category for some reasons. Otherwise they won't be net net or negative enterprise value stocks any more.

One needs patience, a lof of patience investing in these stocks.

Posted by jassmen > Nov 16, 2015 01:36 AM | Report Abuse

KC,

Table 1. What the meaning of Ad price?


It is adjusted share price after dividends and corporate exercises. I got it from Yahoo Finance

Probability,

Thanks for your comments.

Taking your analogy, it seems that there are 7 red in a pail, and some pails have 8 red marbles.

The more interesting thing is when you draw a white marble, you get a fine of $10. But you get a red market, you are rewarded with $100.

Isn't this a great game to play?

duit,

Nice song, thanks.

Posted by i3raymond > Nov 13, 2015 03:11 PM | Report Abuse

KC, would be great if you can insert a column of "date of purchase" Can one still buy in any of the 8 magic formula counters?


You have to recompute the metrics of ROIC and EY based on updated data and see if they are still suitable candidates.