Posted by moneyman2525 > 2013-12-31 19:21 | Report Abuse

Moreover our economic problems will be further magnified with the coming tapering by the FED which will affect the total Aggregate Demand for Asian exports around the world. Another side effect of the FED tapering will be the rise of interest rates meaning there will be more outflow of capital from emerging markets. Thus this will put more downward pressure on emerging market currencies especially the Ringgit, Rupiah and Rupee. At the same time our local interest rates will be subjected to upward pressure. Hence, this might provide the trigger that will bust our Malaysian and the Indonesian Real Estate market which has reached bubble levels. The following are the charts for the Global real estate prices and by country.

Full article: http://malaysia-chronicle.com/index.php?option=com_k2&view=item&id=207172%3Ared-alert-for-malaysia-the-next-on-the-hit-list-as-indonesia-braces-for-meltdown&Itemid=2#ixzz2p3C8q4PT
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Posted by tewnama > 2013-12-31 19:36 | Report Abuse

Moneyman, apa point u? Pasaran saham sudah tak stabil? Aiya, kalau ia nak runtuh, tak ada org boleh buat apa pun. Walaupun u tak main saham, u pun akan kena dalam cara lain. Tak ada orang dapat lari

Posted by moneyman2525 > 2013-12-31 20:02 | Report Abuse

Pasaran saham sudah stabil? STOP KIDDING YOURSELF...this is just windows dressing to fool people like you. Wake up & don't be an idiot.

Posted by moneyman2525 > 2013-12-31 20:02 | Report Abuse

BEWARE PLEASE...DON'T GET CAUGHT WITH YOUR PANTS DOWN.

The recent rise in the Malaysian Stock Market to record highs was used as a smokescreen to divert attention from our economic problems. It is use to fool the people into believing that our economy is growing healthily. However, one of the economic indicators our Government cannot manipulate is the exchange rate. This is because the foreign exchange market is transparent and too big to be manipulated because it trades about US$ 5 trillion a day.

Posted by coolio > 2013-12-31 21:34 | Report Abuse

Excellent performance as usual from Kcchongnz

Posted by kcchongnz > 2014-01-02 09:29 | Report Abuse

My new portfolio of 11 stocks selected in August 2013 has made an average total return of 44.1% as compared to 5.3% of KLCI in the last five months.

There were two losers, i.e. Kumpulan Fima and Haio which lost an average of 1.5%. Have I done anything wrong when making the selection five months ago? Yes, I think I have made a wrong choice for Haio.
On 4th August 2013 I wrote an article comparing the merits of investing in a few food companies before I made the selection as shown in the link below:

http://klse.i3investor.com/blogs/kianweiaritcles/34314.jsp

I was contemplating whether I should invest in Haio or Zhulian and I have chosen Haio, and that was an error of judgement.

Zhulian has a faster growth in revenue and earnings than Haio. Its ROE and ROIC at 26% and 39% respectively are way above those of Haio at 18% and 29% respectively. I also knew at that time Zhulian’s foray into Indonesia and other Asean countries was very successful at that time.

However I choose Haio over Zhulian because Haio is slightly cheaper at EV/Ebit of 6.9 compared to Zhulain’s 8.5. And also Zhulian’s share price has reached its peak at that time; whereas Haio’s share price was way below its peak of more than 5.00 2-3 years ago. That was an error of judgement.

Since then Zhulian share price has climbed by another 57% from 3.17 to 4.99 now; whereas Haio’s share price has dropped by 5% from 2.70 to 2.57 now, dividends both not included.

The lesson is, it may be better to buy a better company with reasonable higher price than a not-so-good one at cheaper price. And the market has no memory of past stock price. Stock price can go higher if fundamentals improve, and vice versa.

Posted by bsngpg > 2014-01-02 12:13 | Report Abuse

Hi KC Chong: very good lesson-“better to buy a better company with reasonable higher price than a not-so-good one at cheaper price..”.

My heart is still hanging in the air. I still cannot turn that lesson into a solid perception to guild my future behavior. I need to experience more. Anyway, thanks for the sharing.

Posted by kcchongnz > 2014-01-02 13:04 | Report Abuse

So what is wrong with the pick on Kumpulan Fima which lost 2.4% since a year ago? Well there were two or three people in i3 who constantly picked on me for choosing this stock. However they were not able to articulate on why my Kfima pick was such a bad move, except talking nonsense, all of them.

Looking back on the selection process again, I do not see what is wrong. It was selected based on its diversified durable business in security paper printing, palm oil, bulking, food etc. It had high ROIC of 25%, a healthy balance sheet with 255m net cash, or about RM1 per share, excellent quality of earnings with consistent and abundant cash flows from operations and free cash flow. Free cash flow is more than 20% of revenue and invested capital. And most of all, at RM2.06 at that time, the earnings yield (EV/Ebit) was 27%, a great number.

Sure its earnings has dropped by about 10% the last financial year, though its revenue still went up a little. Again which company with plantation as a major earnings didn’t have their earnings reduced last year when palm oil price is depressed? Many even made losses.

Based on Kfima’s last annual financial results, ROIC has dropped to 19%, but this is still a high return of capital. And at RM1.93 now, its earning yields (EV/Ebit) of 26% is still hell of a good bargain. This is a classic case of the Magic Formula Investing Strategy of Joel Greenblatt.

Buying something for less than its value is the most dependable way to make money. Buying discount from IV and having asset price move towards its value doesn’t require serendipity; it just requires that market participants wake up to reality.

Trying to buy below value isn’t infallible, but it’s the best chance we have.

The fact that despite its great fundamentals haven’t changed but its price has gone down a little while the overall market has gone up by 14%, it is even more compelling to keep Kumpulan Fima as a major stock in my portfolio in 2014.

Posted by kcchongnz > 2014-01-03 15:32 | Report Abuse

Posted by anbz > Dec 26, 2013 01:34 AM | Report Abuse
bsnpg, tan kw and many more are all his member of gang...jcool call them jcw gang...or is it jwc gang? can't remember
he also recommends fibon before...and they goreng it well..now look at fibon...what has happened???!!!

What is wrong with Fibon?

Fibon was another of my stock picks for the second half of 2013 at 32.5 sen, just 5 months ago. My detail analysis can be read from the link below:

http://klse.i3investor.com/blogs/stock_pick_challenge_2013_2h/34374.jsp

Its share price is 54 sen now. Hence the return in this 5 months plus dividend is 67%. So what is wrong for a stock pick with a return of 67% in 5 months?

This stock was alerted by a forumer here who practised value investing. I selected it as a stock in my diversified portfolio with the rationales as detailed below.

Fibon has steady revenue and have been making money every year, not a single year of losses since listing a few years ago. It has excellent profit margins; a gross margin of 59% and net profit margin of 29%. It’s has high ROE of 17.1% is achieved with this high net profit margin, with very low leverage. It is a safe company to invest as it has a squeaky clean balance sheet with net cash of 26 sen per share, which amounts to 65% of its net assets, and with zero debt. It has excellent and consistent quality earnings with good cash flow from operations. Its free cash flow is 18% of revenue and 26% of invested capital. It is not easy at all to find a company in Bursa with these type of cash flows.

The best thing is at 32.5 sen then, PE ratio is just 6.6 and enterprise value is just 2 times of its Ebit, or an earnings yield of more than 50%. Where to find this type of company to invest in Bursa.
It share price has since risen to the close of 54 sen yesterday.

So does value investing work? What is wrong with Fibon? Why are you picking on my choice of Fibon?

“If you do a good job valuing a stock, I guarantee that the market will agree with you. It is just a matter of time. But don’t expect immediate success. Oh yes, you have to be right.” Howard Marks

Actually I have no idea why the success is so immediate in less than a few months for Fibon. Well it could be a fluke, but is it a fluke? Frankly, I don’t know too.

Posted by kcchongnz > 2014-01-03 17:33 | Report Abuse

Posted by JCool > Dec 29, 2013 12:05 PM | Report Abuse

fyi... whn i talk nonsense... it is whn i wanna talk nonsense... but in mfcb was no nonsense..


MFCB was one of the very first stock I selected for the second half of 2013, just 5 months ago. The price was RM1.70. At the close of today’s trading on 3/1/14 of RM2.28, the total return including dividend is 36%, as compared to the return of the broad market of just 5.3%. Yes in just 5 months. And when I wrote my analysis in the appended link below, I said the below because I expect it will take some time for us to realize its potential,

“擁有一隻股票，期待它下個早晨就上漲是十分愚蠢的 Warren Buffet “

http://klse.i3investor.com/blogs/stock_pick_challenge_2013_2h/34201.jsp

I review the selection process and I found nothing wrong with it. It was again based on the tested Magic Formula of Greenblatt; buying a good company with a bargain price. In fact a damn good price for MFCB at RM1.70 at that time at earnings yield (Ebit/EV) of more 50%, a good company with ROIC of 18.6%.

Is MFCB a risky company to invest in? You tell me. A company in power generation earning steady revenue and income, with good growth too. Its balance sheet is also squeaky clean. Cash flows are great with free cash flows consistently at mid teens of revenue and invested capital. Tell me which company has this great and consistent free cash flow and I will definitely look deeply into it.

Conservative valuation using the earnings power valuation shows its intrinsic value is RM2.70, way above its price of RM1.70 then.
Will the share price of MFCB continue to go up? I really don’t know. But I know I did not make a wrong pick 5 months ago like what the gentleman above implies, did I?

Buying something for less than its value. The most dependable way to make money. Buying discount from IV and having asset price move towards its value doesn’t require serendipity; it just requires that market participants wake up to reality.