Readers of i3investor.com would have read some of my publications on share investment and articles on Latitude and VS in the last few years. My intention is to teach people how to improve their stock selecting skill and make more money from the stock market. Many who have benefitted wrote to express their appreciation. Unfortunately there are a few critics who often make abusive and stupid comments.
Obviously, these critics have missed the opportunity to buy Latitude which has gone up from Rm 1.00 to above Rm 7.00 in the last 24 months and VS which has gone up from Rm 1.60 to Rm above Rm 5.40 in the last 12 months as shown on the price charts.
In one of my articles I have mentioned that I am a substantial shareholder of VS, Latitude and Lii Hen. Besides these 3 counters I also have some Poh Huat and Xingquan. If you look at Bursa announcements, you would notice that I have about 10% of the total issued shares of Latitude, VS and Lii Hen.
Believe me or not when I tell you that I only have these 5 stocks out of about 1,000 listed companies in Malaysia.
How did I select these shares?
In view of our Ringgit at its 16 year low, I focus on companies which export their product for US$. Latitude and Lii Hen are the 2 leading furniture companies which export almost all their products in US$.
VS Industry is the largest computer electronics manufacturer in Malaysia and it exports a large portion of its products in US$.
I frequently check from Bursa the quarterly results of companies I have an interest in. As soon as I see a company reporting a sudden jump in profit, I will study its business more carefully and check its future profit growth prospect.
Lii Hen went up from Rm 1.60 to Rm 5.86 within the last 24 months.
The above price charts shows that Latitude went up from Rm 1.00 to above Rm 7.00 in the last 24 months.
The above price chart shows that VS went up from Rm 1.60 to Rm 5.54 in the last 12 months.
Golden Rule: I will not buy if I am not sure it can make more profit this year than last year because when the annual result shows reduced profit, the price will not go up.
I will increase buying when I see the profit is improving from quarter to quarter.
I invest like a businessman: How does a businessman look at the business of the company?
He does not worry too much about the audited accounts because it is a recorded history of the company. He looks at the future profit growth prospect. The future may not be so clear and straight forward but he is willing to take some risk.
For example when a businessman buys a piece of land to develop houses, shopping mall or a hotel, he cannot be 100% sure that his project will be successful. But he is willing to take a chance.
When to sell?
When I buy Latitude, Lii Hen or VS shares, I consider myself as part owner of the companies. I can foresee their future profit growth prospect. They all have been improving over the last 30 years and I believe they are beginning to have the competitive market advantage. I should not sell their shares too early.
I will sell some to reduce my margin loan when I see the company has reduced profit for 2 consecutive quarters.
I am obliged to tell you that if you decide to buy any of the shares that I owned, I am not responsible for your profit or your loss.