Investing

My response to KC Chong

As much as I hate to break KC Chong’s rice bowl, I need to respond to all the bad things he said about me especially in his article in i3investor under the title “Another Lesson from Gadang” in which he quoted my opinion as below.

A Super Investor: The super investor will study the case carefully and he sets a realistic target price after taking into consideration of its 40.7 sen EPS, the bonus shares, bonus warrants and its future profit growth in the construction business. Moreover, Gadang was awarded the contract to develop 24.5 acres of Kwasa Land within 20 years. Although property market is currently not so good, Gadang did not pay for the land. Gadang can wait while the land value appreciates. Can you imagine how much the land appreciates in 10 or 20 years?

I think Gadang will go above Rm 4.00 easily at P/E 10.

Can you find another share selling at P/E 10 with such good profit growth prospect? Unquote” 

All regular readers would know that I wrote this as soon as I saw Gadang’s annual profit of 40.7 sen per share.

All regular readers would also know that I openly wrote to advise shareholders to dump their holdings before I started to sell when I saw its 1st quarter EPS of 5sen. Even my wife and relatives scolded me for telling the whole world to sell Gadang before they could sell.

I told them that I can afford to lose some money but not all these small investors. Moreover, my recommendation which was based on its annual EPS of 40.7 sen. might have misled many people and it was only right to tell them to sell first at a better price.

Why KC Chong wants to say bad things about me?

He wants to show that I am not an accountant and investors should follow his teaching. He is selling his teaching FA program as show below his quote:

“For the record, I have been right for every of the stocks mentioned there written 4 years ago.

FA practitioners are not stupid. Financial statement analysis is very useful as it is the language of business, and FA is more intuitive than any “Golden rule”, in my opinion.

That is why I have been advocating FA all the time in a public forum like i3investor. I have been promoting my course in FA in i3investor all the time.

For anyone is convinced and wishing to learn FA in a structured manner to avoid any pitfall in investing, you may contact me at

ckc13invest@gmail.com

As much as I do not wish to break his rice bowl, I must tell you that about 4 years ago, I engaged him to look after my Rm 10 million account with CIMB. I am not sure what was the agreed fees for his work.

He started off by selling all my Latitude Tree and Lii Hen and bought Homeritz. He provided a complete financial analysis of all the furniture companies such as Latitude, Lii Hen, Poh Huat, Hevea and Homeritz.

He considered Homeritz was the best because it had the best return of equity.  

As all investors know Latitude went up from Rm 1.00 to above Rm 8.00 within 30 months and Lii Hen went up more than 500% and it is still going up because 100% of its products are exported in US$.

I sacked him because he has no business sense at all. I am not telling you a fairy tale because many people in CIMB know this episode.

 

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