Posted by murali > 2015-05-25 16:42 | Report Abuse

You wouldnt be very rich eventually, but u can always sleep peacefully, with no guilt and no shame...

Posted by Probability > 2015-05-25 17:53 | Report Abuse

accurately said murali..... we really need to encourage people to develop rational argument skills.
If not it will be like our Malaysian parliment..

Posted by Probability > 2015-05-25 18:15 | Report Abuse

wonder our PM can sleep peacefully? ;)
Some naturally have very thick skin....

Posted by Ooi Teik Bee > 2015-05-25 19:50 |

Post removed.Why?

Posted by Ooi Teik Bee > 2015-05-25 19:52 |

Post removed.Why?

Posted by murali > 2015-05-25 19:52 | Report Abuse

Good to see KC n OTB exchanging their ideas here.....I curi curi learn a bit

Posted by murali > 2015-05-25 19:57 | Report Abuse

One thing good about OTB besides TA n FA, is his market intelligence....really geng....

Posted by Icon8888 > 2015-05-25 20:04 | Report Abuse

Excellent response from OTB. A very different perspective and investment philosophy from that of KC, but have worked nevertheless as evidenced by VS share price performance

Posted by Icon8888 > 2015-05-25 20:10 | Report Abuse

OTB is very different from KC. Both sifus also geng. KC read widely and is backed by strong financial knowledge (real life investing performance also excellent). OTB not so academic, but he has excellent judgement when come to placing his bets. Both sifus I also like

p/s : Uncle Koon also good. He made excellent calls on Muadajaya, Jayatiasa, Rimbunan Sawit. Really geng. Respect !

Posted by vsstaff > 2015-05-25 20:26 | Report Abuse

buy la, buy la, buy la

Posted by murali > 2015-05-25 20:57 | Report Abuse

Icon8888, u very naughty......always make fun of our widely respected senior Koon Koon....

Posted by murali > 2015-05-25 20:59 | Report Abuse

He is also geng, from a different angle....100% went Holland....not easy though in view of the bull market we experienced last 2 years.....

Posted by Alphabeta > 2015-05-25 21:29 | Report Abuse

Quarter to Quarter revenue & profit very erratic. Its inventories & receivables rises at a much faster rate than revenue. Unless this structural weakness is addressed. Its plan for growth will entail more borrowings either cash call from shareholders or commercial loans.

EVA remain negative for the past 5 years. Hope KYY business sense on VS bear fruit this time.

Posted by kcchongnz > 2015-05-26 16:22 | Report Abuse

One persistent criticism of my way of analysis is I am basing on past financial statements, not emphasizing on future high growth. Thank you very much, that is a valid criticism and I get it again.

Yes, I fully agree that in investing in a company, it is the future which matters, not the past. But I have said this numerous times. It is just that I as a small time retail investor, does not have the additional information, like the future share price movement, the chance to talk to the management to tell us their big plan in the future, and the ability to forecast the future, like some of them do. I did say those investors who possess the above abilities make big money in the market.

So for those who wish to follow what I write, beware of this limitation of mine. I did justify why I need, or need not to have these things in the article.

I am also aware that there are criticisms that I use complicated ratios in the analysis. Thanks for the reminder. I didn’t know that cash flow, free cash flow, enterprise value, invested capital, return of capital, cost of capital are that complicated and as if they are useless to be used in investment analysis.

Just to share a comment from a participant from my course today below.


Hi KC,
After reading through your article on VS Industry, I felt obliged to share some thought as someone whom has worked in this industry for close to a decade. The company I am working for is the top 10 EMS company in the globe by revenue. This is a highly competitive industry and most if not all, operating at single digit net profit margin. Though the industry is still growing along with the growth in outsourcing trend, not all EMS companies are doing well. Top line are always challenged by low customer loyalty (remember OEMs will not outsource their core technology, there is low barrier to move to another EMS) or missed order forecast. Bottom line are always squeezed with customer demanding annual cost reduction, yield issues and etc. Hence, every companies employed various business strategy to overcome these challenges, it is hard for outsider to assess the quality of these companies, but the financial statement indeed provide a glimpse if not the full picture of how well they are being managed.

Revenue growth shouldn't be the only yardstick, there is once we have a big customer pulled out from our company to our competitor without warning, it came as a surprise, our company share dropped by 20-30% in a week. All you need is just one event like this and investor could lose money instantly. It took us two years to return to our previous revenue level. Of course our share price return to the previous level and in fact, higher than before :). Looking back, I believe having the right metrics in place to drive focus and business strategy really help my company to recover from the slump and regain the growth the momentum. My company has been able to consistently generate positive cash flow, positive economic return (ROIC > WACC) and has good interest coverage with single digit net profit margin. All these helps to build a strong financial fundamental to weather through any unexpected events. Having this metrics in place drive business strategy that focus on creating shareholder value, one good example is that my company have been focusing on high complexity low volume products, these products command higher margin and higher barrier of entry such as healthcare and life sciences products. We also have strong R&D team (sometimes outsider mix manufacturing = R&D) that contributes to sustaining bottom line as R&D business normally commands higher margin (20-30%).

Thanks for your good teaching, I am able to appreciate the metrics that my company leaders have put in place. Like you said, growth can be deceiving if it is destroying shareholder value over the long term. I am not here to challenge on others approach in be successful in stock market as everyone has their own strategy and timing certainly is one of the factor. I am just wary of VS Industry for now (from an industry insider) unless their financial data improve and prove otherwise.

By the way, I sold my Jtiasa at a loss, it certainly took me some courage to do so ( eat up loss!) but after going through your course, I really certain that this is the right thing to do. I am more confident now in making an investment, and has been making good gains through pintaras jaya, latitud and skpres.

Thanks KC. I hope that we are able to catch up :).

Posted by bintang21 > 2015-05-26 17:57 | Report Abuse

Mr KCChong,

I think you have done a great job to most of the investors here
I think your effort have saved many investors losing their hard earned money from investing into a company with picturesque future but low cash return, negative cash flow , huge debt that need PP and ESOS to save its cash position
you had given a good comparison about the debt borrowed by VS and SCIENTX and also how efficient these two companies generate cash from the borrowing.

you had talk about Enron and Lucent Technologies stories that had made so many savvy investors and institutional investors cried no tear then .

My dear friends, it is better miss than wrong

future is full of uncertainty, KYY can run fast, OBT can run fast, his subscribers can run fast
are they have the obligation to warn you first before they start the run ?

my dear friends, it always better to put your money in the bank to earn 4% than to put the money in AH LONG hand to earn 30%

Mr KCChong, I like you, you are a good man. A man with conscience.

Posted by kcchongnz > 2015-05-26 18:28 | Report Abuse

bintang 21,

Thank you very much for your kind words. This type of comments motivates me to continue sharing the little knowledge and opinion I have. However, I need to correct one thing about your post.

V.S share price has been rising for the last few months. If someone asks me if I would invest in V.S a few months ago. I would have said the same thing, and the result would be many people who choose to follow my comments would curse me from stopping them from making money, although I don't really tell them to buy or not, but merely my take on the company's performance. Now, V.S share price appears to be still in demand. Nobody can argue about that.

So your statement that "I think your effort have saved many investors losing their hard earned money from investing into a company with picturesque future but low cash return, negative cash flow , huge debt that need PP and ESOS to save its cash position" is not correct, at least for now. In fact as I have always said, nobody can predict the future correctly and consistently, and the performance of the share price in the future. V.S share price could very well keep on rising in the near future, or it may drop.

So I have never said V.S share price will drop, or continue to rise. Never. I don't know.

Posted by kcchongnz > 2015-05-26 18:40 | Report Abuse

Posted by murali > May 25, 2015 04:42 PM | Report Abuse
You wouldnt be very rich eventually, but u can always sleep peacefully, with no guilt and no shame...



“On matters of style, swim with the current, on matters of principle, stand like a rock.”
― Thomas Jefferson

Posted by Ooi Teik Bee > 2015-05-26 19:36 |

Post removed.Why?

Posted by kcchongnz > 2015-05-26 20:21 | Report Abuse

Posted by bintang21 > May 26, 2015 08:01 PM | Report Abuse

KC

please be brave with your view. as you had said and it is an undeniable fact that future is full of uncertainties, no one know what is going to happen tomorrow , what more a month or a year later

Me: Yes, the future is unknowable and unpredictable, you are right. So how to be "brave" to say if a share's price will go up or go down in the future? Yes, one can base on some analysis and educated judgment, but that still won't ensure he will be right, or wrong, in his educated judgment, especially in the short term.

now many may laugh I talk nonsense to say you have saved us losing our hard earned money in investing into a not so worthy company based on its performance, who know ,one day, these are the people who are cursing themselves for not have taken your view in a positive manner.
can you dare say it won't happen?

Me: But it is true that I didn't save anyone from losing money in V.S as it is now. Have I? Whether a company is worthy of investing or not is also a matter of judgment and opinion. My judgment is I don't view it worthy of investing in V.S at this price after quite thorough analysis and feedback. Others have their opinion too. Some of them are so bullish that they think V.S will go up in price a lot more, and they seem to know a lot more of V.S than I do. As you have agreed that the future is full of uncertainties, and I have seem rubbish stocks go up like no tomorrow. So how can I be certain that V.S will not do the same thing, although I think otherwise?

KC

please be brave with your view. God has given you the knowledge to share the truth. Please continue to share with us. it is not the matter to save anyone but to tell the truth. this is what this forum is created for, isn't it ?

Me: There is one thing in investing that one must be aware of. There is no such thing as I am very "brave" about a stock, or very confident that this stock will go up by 100%,or go down by 50% in a year, say. The market may be efficient in the long run, it can go hare-wire in the short-term.

Have some humility, and not be too overconfident as far as investing is concern.

There is no "truth" what the future share price will be.

Posted by apini > 2015-05-26 20:23 | Report Abuse

well said KC. I like

Posted by apini > 2015-05-26 20:59 | Report Abuse

bintang21,

you have a very clear mind, very explicit with your point

I give you a double "LIKELIKE".

Posted by kcchongnz > 2015-05-26 21:10 | Report Abuse

bintang21,

I guess you are a young man, still learning about the reality of life, and investing. How many times do you notice I have said,

"In Bursa, there ain't no tooth fairy".

In trading in the stock market, it is a zero sum game (and how many times I have said that too). You win from someone who loses to you. Your loss is someone's gain.

So someone who is also doing trading on the same stock as you won't help you to make money trading in the stock market, because your gain is his loss, or less gain for him, in general. You will behave the same because you are also human. So you have to always take care of yourself first.

A noble person may help the poor people, give them some money if they have none to eat. There is no noble person who will help you to make money from share trading in the stock market. That is not a noble act, helping people to make money from the stock market is not a noble act anyway in my opinion. And don't take his word if he tell you.

I also write about good companies worthy of investing and publish in i3investor, if you notice. Most of the time I have bought already before I publish them. That is also a selfish act of me. I am human too.

But one thing you should be quite comfortable if you wish to follow what I write, I mean if you trust me, that I am writing how good a company is, it is not with the intention to sell to you. That is not good, morally. By the way, if ever I publish a good company stock, I won't sell even if it has gone up by 10%, or even 20%, because I am an investor, a long-term one, and the stocks I buy and writ about generally have a wide margin of safety and hence i generally won't sell so fast unless the share price has gone up close to the intrinsic value which I have estimated, or I need money to buy better stocks.

Of course I can be wrong too in my analysis, quite often too. If I realize I am wrong, then I won't hesitate to sell it. And also as human as I am, I won't tell you to sell first before I sell.

So you can't fault anyone not helping you to make money trading in the stock market.

Posted by murali > 2015-05-26 22:01 | Report Abuse

Bintang21,there is no free lunch in this world....anyway,if u pay OTB rm960 a year n u get good tips in return....value for money.....fair trade.....at least he got proven records for last 3 years......BTW I got no money to subscribe his service.....sigh.----

Posted by murali > 2015-05-26 22:03 | Report Abuse

At least he made it clear that its his biz n u pay him for his service,if u have faith with him...

Posted by bcllct > 2015-05-26 23:42 | Report Abuse

"There is no noble person who will help you to make money from share trading in the stock market...helping people to make money from the stock market is not a noble act"Very well said KC!

Sharing about general principles/approaches like Warren Buffett did in his annual letters is noble though.

If one has a great insight about any particular stock, he will definitely buy all he can before telling anyone about this good deal, lest others will chase up the price and render his insight useless. Only when he had collected all he want he will then share with others, at this time others who buy will not be competing with him but helping him to push up the share price.
It is the same thing when he want to sell, he will sell first. Being human many will not publicly declare he sold the stock which he had not too long ago proclaimed to be a very "cheap" and "good" stock that had plenty of upside.

My conclusion is learn those general principles like what KC share. Be very careful when someone told you specific stock that is really great but he already bought!

Posted by Gregorian > 2015-05-26 23:49 | Report Abuse

The A-Team

Posted by contemplator > 2015-05-27 00:27 | Report Abuse

Good analysis Mr KC!

Posted by kcchongnz > 2015-05-27 06:32 | Report Abuse

Posted by contemplator > May 27, 2015 12:27 AM | Report Abuse
Good analysis Mr KC!


contemplator, thanks.

I read a posting you shared on bonus issues, share split, etc below:

http://klse.i3investor.com/blogs/contemplator_bursamalaysia/77059.jsp

It is an excellent post which I recommend everyone to read.

I would like to add that these stuff like share split, "free" warrant, bonus issues can at times be very dangerous for retail investors in Bursa, where major shareholders get these "free" stuff and unload into the market with lofty prices to ignorant small time retail investors, causing the share price to plummet and hefty losses for existing shareholders.

InstaCom came straight into my mind. There are many more are in the process.

So for true investors, not traders or speculators, don't focus so much about asking the company to give bonus issues, share split, "free" warrants etc. A cake cut into 10 pieces, 20 pieces has no difference in value. This is a very simple logic. In fact for many poor performance companies, this stuff eats further into their pocket by paying investment bankers to do this stuff, and the fees is not cheap.

Liquidity from share split? A few years ago Bursa already made the "shares split" for all companies in Bursa by 10:1 by reducing the lot size from 1000 shares to 100 shares. Still not split enough? You want to invest in Nestle with RM7200? No problem, you can buy 100 shares at RM71.56. Any problem? Want to invest in Pintaras with just RM2000+? Can, just buy 500 shares.

So for real investors, don't need to tell the management to do bonus issues, share split, give free warrants etc. They know what to do best for the company, or at least suppose to. If they aren't, tell them to focus on how to improve the business of the company, how to improve margin, increase sales, collect debts, manage inventories well, etc. These are the important stuff about business.

Posted by tianjin > 2015-05-27 07:34 | Report Abuse

Thanks a lot KC for your well define analysis on VS , would very much appreciate if you could take another look at ELSOFT post Q1 2015 quarterly result. Please do continue your very kind effort for guiding fresh newbies investors .

Posted by murali > 2015-05-27 08:19 | Report Abuse

Another important thing to apply in share investment is on human psychology, besides all the FA, TA, goreng stories etc...To be a really successful investor, he or she must know all of these...dont confine yourself to only one or two fields only.One of the reason why OTB is so successful in the last 3 years is his market intelligence...seems nobody has ever notice so...

Posted by murali > 2015-05-27 08:22 | Report Abuse

You may call them dumb...but 10 pieces of RM1 notes seems to be more welcomed by the investors in our stock markets as compare to 1 piece of RM10 note...

Posted by bintang21 > 2015-05-27 10:32 | Report Abuse

I do not hope for OTB to give me free lunch.

if you read carefully , in a more positive manner, I am actually telling you what you are telling me now

what I actually want to convey is if you follow someone influential like KYY and OTB into buy a less performing company like VS then:

"future is full of uncertainty, KYY can run fast, OBT can run fast, his subscribers can run fast
are they have the obligation to warn you first before they start the run ? "

I never said OTB focus on his own business is wrong

but I do hope he can share his knowledge like KC. that is my hope, the decision is his

I did not ask anyone to help me to make money in the share market, when did I ?

I know knowledge is asset, I must know which one is a good buy which one is not. the decision is mine not you. I just do the best, what I think the best with my limited knowledge, GOD decide the outcome.
am I wrong?

am I that naive that not aware "In Bursa, there ain't no tooth fairy".


please do not judge a book by its cover

Posted by contemplator > 2015-05-27 11:04 | Report Abuse

Mr KC, Thanks for your kind comments. Again thanks for your altruistic sharing on VS and value investing.

Value investing is indeed very fascinating.

Let's see when the time for us to apply
"Be fearful when others are greedy and be greedy when others are fearful"-- WB

Posted by Ooi Teik Bee > 2015-05-27 11:24 | Report Abuse

but I do hope he can share his knowledge like KC. that is my hope, the decision is his

Ans : I do share my knowledge here. I avoid recommend any stock here. I did talk about some stocks in I3. If I touch on the stock, the stock must be very good in FA. It is my rule.
I did talk about Frontkn, Hevea-WB, VS and etc. I call a buy on VS when the price is around 3.30. Those had listened to my call would have make money. I call a buy on Frontkn at 0.19, Hevea-WB at 1.65 and many etc. likewise, you also make money.

Please read my stock pick for 2015, please read the below link :
http://klse.i3investor.com/servlets/pfs/41947.jsp

Any reader follows my stock pick, he/she is laughing all the way to the bank. Am I not sharing my knowledge in I3 ?

Thank you.

Posted by Icon8888 > 2015-05-27 11:29 | Report Abuse

OTB has stopped active discussion in i3 because optimouse kept attacking him

If u want to blame anybody, blame optimouse

Posted by kcchongnz > 2015-05-27 11:42 | Report Abuse

Posted by tianjin > May 27, 2015 07:34 AM | Report Abuse
Thanks a lot KC for your well define analysis on VS , would very much appreciate if you could take another look at ELSOFT post Q1 2015 quarterly result. Please do continue your very kind effort for guiding fresh newbies investors .

I have written something on Elsoft based on whatever I can see from the past performance in the link here for sharing of knowledge only:

http://klse.i3investor.com/blogs/kcchongnz/74663.jsp

I as a small retail investor and also not in the industry, have no other insights, insider information, never talk to the management, no crystal ball etc. So read with cautions.

Looking at its latest financial results, it doesn't change my view as written in the article.

Posted by Alphabeta > 2015-05-27 11:53 | Report Abuse

I agreed with KC that cash flow is more reflective on the quality of earning. We must bear in mind that change in accounting didn't alter the underlying cash flows.

Some executive believe that good earnings numbers can boost the shares of their companies even if these numbers don't reflect any change in the performance of the underlying businesses. In reality, with the right level of disclosure, markets would see through manipulation of this kind.

When we try to predict future cash flows and profits, past performance becomes the foundation of credible forecasts.

Posted by bintang21 > 2015-05-27 11:58 | Report Abuse

bro ICON8888,

you are not right this time

put down your hatred

you are a smart investor, my good brother

do not turn yourself into a mouse killer

Posted by duitKWSPkita > 2015-05-27 12:08 | Report Abuse

Sorry guys!

Dear Respected OTB, KCCHONGZ, MURALI and BINTANG21.
I am not supposed to intercept without permission from all. I apologize for that at first place, but, as a silent reader of this thread I hope I can raise my view from reader's point.

You can shoot me whether I am PLP or what. Just sincerely wish you take 5 minutes to understand me as a reader's stand(might not represent MAJORITY).

Dear KCCHONGZ, I must say you are very good book for us in terms of financial analysis or company's future growth analysis. I personally like your way in risk forensic although many might not like the very technical risk management discussion (personally, I enjoyed it very much).

Dear OTB and KYY, both also very practical and well versed in good TA counters. Respected Uncle will continue to replicate his success story in his portfolio. Well, FAVOURABLE or NOT FAVOURABLE need not to comment as long as he has closely communication with the business runners. Dear Readers, in any kind of learning process we just need to pick up good points and modify the NEUTRAL methods to suit our style. Tis is what we call BIODIVERSITY. For Mr.Ooi, a famous remisier who running the business for advising, consultation, recommendation, fund management etc for living as well as to fulfill his daily interest in life. I BET you love investment more than money at this age.

Dear Bintang21 brother, although we have very limited communication in this forum. Nevertheless, I respect you as a senior at least for me(young investor in stock market). I wish I can write to you in private email but unfortunately we never exchange our email address. In order not to give my opinion with any BIAS, I took long time to follow your comments and read all your comments through your personal profile to learn more from you. I am doing this to give you my most sincere friendly review. As a reader please allow me to raise and suggest my kindergarten view on this particular "Blog: V.S again? kcchongnz" blog.
Again, please don't take it as personal because we can harmonize it in a business way but not PERSONAL perspective.
Firstly, I could feel the same pressure by Mr OTB when you "advised" him to disclose BUY and SELL call since you know Mr Ooi doing it for day living(income source). I WANT TO MAKE YOU AS MY FRIEND SO I RAISE MY FEELING, NOTHING PERSONAL MY SENIOR.
Secondly, must try not to ENLARGe KCCONGZ's point to validate/verify/certify which methods/rationales are more appropriate for INVESTORS. Indirectly, it will caused both KCCHONGZ and OTB in a trouble situation since both of them give us more variety set of analysis eventually. When there is discussion or positive debate going on, don't you think we already gain something COMPLIMENTLY, at least it happen to beginner like me. AGAIN, I WANT TO MAKE YOU AS MY FRIEND SO I RASIE MY PERSONAL FEELING, NOTHING PERSONAL MY SENIOR..
Thirdly, if you don't mind you may try (I guess you know this more than me)to approach them with any CLOSED QUESTION rather than to keep discussing on above mentioned issues. When you ask both gentleman in CLOSED QUESTION such as OTB, do you think VS can achieve higher than previous quarter PBIT or to KCCHONGZ, what do you think is the best FAIR Value of VS in this financial year. I believe you will get positive feedbacks from them simply because they will address you should they aware of it and it will make everyone more comfortable in terms of SOCIAL ACCOUNTABILITY and RESPONSIBITY. I do not want to speculate but strongly believe they wont take BET on their reputable name to SIMPLE ANSWER US WHHEN THEY ARE NOT SURE WITH OUR QUESTION. My above points are They would happy to address if the question more towards share trading analysis rather than METHOD VERIFICATION as well as WHO IS BETTER IN THE FIELD.

Lastly, bintang21 brother. I MIGHT BE TOTALLY WRONG ON ALL MY RUBBISH KINDERGARTEN THOUGHTS. As a reader cum beginner in stock market, I just want to learn from all of you but not really put much time to "learn" who is the greatest or most generous in this community.

Dear bintang21 bro, respected OTB and KCCHONGZ..... wishing you all have a wonderful trading days ahead.

Please forgive should I made you uneasy!

warmest regards,
duit

Posted by Icon8888 > 2015-05-27 12:13 | Report Abuse

bintang u must be new to i3 ? That explained why u don't know the background how optimouse attacked OTB. It was like world war 3, lasted for three days three nights

Ha ha

Posted by Icon8888 > 2015-05-27 12:14 | Report Abuse

duit, Connie ask u to go back there to chit chat : )

Posted by duitKWSPkita > 2015-05-27 12:18 | Report Abuse

Icon88888888888

LU si pek JIALAT lo...

don't simply say la... U make me in trouble....

Posted by bintang21 > 2015-05-27 12:27 | Report Abuse

my dear brother DUIT,

You said:
"Firstly, I could feel the same pressure by Mr OTB when you "advised" him to disclose BUY and SELL call since you know Mr Ooi doing it for day living(income source). I WANT TO MAKE YOU "


how many time do I have to clarify myself I did not demand OTB to reveal his buy and sell calls

when did I do that?


why you all keep on saying I want free lunch from OTB?

is it fair to me?

is that what you said you have understood me?

what I actually want to say is OTB is very influential
what is said most of the people will follow including me
but this time ,it is about value investing in VS


why it is so difficult to understand my point of view, brother?

Posted by bintang21 > 2015-05-27 12:43 | Report Abuse

duit

you said:

"We should not follow or influenced by Mr. Ooi..... Because we shall responsible to ourselves."

you are wrong again.

we can follow OTB and KC if what they said is true and worthwhile to follow

we must have the wisdom and knowledge, that is what I hope they continue to share

Posted by bintang21 > 2015-05-27 12:59 | Report Abuse

DUIT,

I just playing naughty with you, do not take it seriously

nothing wrong with you

so far, I notice, you are doing very well

Posted by Sunkist118 > 2015-05-27 13:22 | Report Abuse

Aiyo feel diarrhea coming

Posted by kcchongnz > 2015-05-27 21:01 | Report Abuse

OTB,

Thanks very much for your kind words. You are a well respected forumer here with proven records. yes, you record can be seen in i3investor this few years. Nobody can dispute it.

I hope with your post here, everyone should view the importance of having some knowledge and skills when foraying into this jungle out there in Bursa; be it FA or TA. And you have rightly said, TA + FA would be the best combination.

With your good recommendations here, hopefully it would attract keen learners to learn from me through my online investment course which I have been organizing for more than a year already.

With this may be I can do some noble work by teaching fundamentals of investing to whoever interested in order to improve their investing experience.

No lah, I can also earn some money also. You know everybody needs to eat and survive what. Not that I am a multimillionaire. Btw the fee is peanut compared to the stakes you have in the market.

And I also hope that those who are interested in TA can also learn from OTB, And you know he is good, and he has proven to be good.

But remember what OTB said, TA alone won't work. You must combine TA and FA, then only it works, beautifully.



Posted by Ooi Teik Bee > May 26, 2015 07:36 PM | Report Abuse

I had spent a lot of money to learn FA, at the end I learn the most is still from KC Chong. I had repeated this sentence many times in I3. I did not say KC Chong is not good, I copy the best from KC Chong to use them in my FA report. Certain parts I disagree, I just avoid them.

I am a remisier, I have many stocks to take care, I cannot be so details on one stock. Hence I have to balance my act to get the best out of them. I had tried many methods to make money from stock market. I regret to say that I wasted many good years. If I know KC Chong earlier, I should have done very well in my investment. I did very well in last 7 years after I learn TA. TA alone will not work, you need to combine TA and FA. To me, TA comes first, FA comes second. I had tested this combination many years, I want to say it is still the best method for me.

I had shown this combination skill in my stock pick in 2013, 2014 and 2015. All of you should know the results.

I have a pool of subscribers, they pay me the money or subscription. I have to take care of them first, this is a business I run. Many of them will be very unhappy if I post my buy recommendation in I3. If I want to sell the stocks, I have to inform them first so that they can cut loss fast at a better price. Please understand this, I have a business to run. Do not blame me if I did not tell you to cut loss. I cannot do that because I am answerable to my subscribers first.

I stop here, I am not challenging KC Chong that I am better than him. I just express my opinion on my strategy. If you think KC Chong's method is better, go ahead to follow him. Please do not be so personal in writing here.
Thank you.

Posted by Alphabeta > 2015-05-28 09:24 | Report Abuse

Just to highlight a few points why cash flow is more reflective on the quality of earning, in FY 13 VS has acquired additional 17.19% shares in VSIG for RM32.77 million satisfied in cash, increasing its ownership from 38.06*% to 55.25% resulting in VSIG being consolidated. As a result of this, it has recorded a negative goodwill of RM 28.45 mil on its profit and loss statement. Mainly due to the fair value of the identifiable net assets is more than the total considerations that VS has paid to acquired the 55.25% interest.

This one-off accounting treatment gave an impression that VS is very profitable. The true fact is VSIG business operation is not profitable at all. On consolidation, for the one month up to 31 July 2014, VSIG contributed revenue of RM44.71 million and net loss of RM5.88 million to the Group. (refer to note 22 of FY 14 annual report)

This probably explained why there is a disparity on the profit after tax of RM 40 mil and operating cash flow of RM 20 mil.

Another questionable treatment on costs, if you look at the inventories costs charged out to p/l, it is exactly the equal to the inventory costs recognized as cost of sale (refer to note 10). However, if you look at note 18 on operating profit disclosure, depreciation, wages, salaries and others amounted to RM 316 mil, these periodic costs are much higher than those shown in the p/l. I suspect some of these costs are residing in the inventories. The argument here is whether the inventory is overvalued most auditors will use the test case that the unit cost should not exceed the market price. I hope KPMG has done a good job here. An overvalue inventories can jack up the profit.

Posted by kcchongnz > 2015-05-28 12:05 | Report Abuse

Alphabeta,

Very detail analysis.

So that RM28.45m of "Effect of acquisition of a subsidiary" is how it comes about. Something like "releasing the negative goodwill", "expense" it in the income statement, oop, "profit" it in the income statement? Wow, that is very interesting accounting practice. But that RM28.45m "profit" is a huge amount equivalent to 70% of the net income.

Yeah you are right. The above none cash item is taken out from the cash flow from operating activities.

V.S consolidated financial statement seems complicated. But never mind, for retail investor like us, just follow the cash.

Is there any cash the business owner can extract out from the ordinary operations, last year, the last few years?

CFFO?
Capex?
FCF?

That is the important question.

KC

Posted by Alphabeta > 2015-05-29 08:49 | Report Abuse

KC, actually the description for this negative goodwill is "Gain in Fair Value for re-measurement".