In Life We Need To Learn From Experts to short cut our learning curve. How glad was I to have met 2 Great Sifus in the State of Johor, Malaysia. One Expert Sifu is in Share Investments. And one Sifu is the Champion Landlord of Kota Masai in Eastern Iskandar.
Here are the Top 10 Valuable Lessons My Johor Share Investment Sifu Taught Me
A THIRST FOR INVESTMENT KNOWLEDGE
When Mr. L Tan was an accounting student in University Malaya he used to read the WeekEnd Malay Mail. Here Dr Neoh Soon Kean of Dynaquest would give a weekly write up highlighting One or Two Stocks of Bursa. L. Tan carefully cut out the precious investment articles by Dr Neoh – then read and reread them carefully. This was how he got all the solid investment lessons of life. He also subscribed to the excellent Monthly Digest of Dynaquest (Now discontinued). From here he got such great tips like PIE & AJIYA which made him millions!
2. BUY BUSINESSES THAT YOU USE
When his relative was warded in KPJ Hospital he saw the high medical fees, the long waiting lists. So he bought into KPJ .KPJ was a great growth story. From KPJ came Alaqar Reit – another great recession stock that emerged well all through the Lehman Brothers’ Crisis.
When his family members bought and used trolley loads of Premier Tissue & Cutie Toilet papers he started to buy NTPM at 50 cents. He later told me he made enough monies to buy tissues for his family for their entire life time.
Ha! This was what he did by visiting companies or watching their businesses. So in year 2006 he told me to go and SEE Angsana Shopping Complex in Skudai Johor.
A visit to ANGSANA Showed 4 companies. On the ground floor is KFC & Pizza Hut, On second level is Kamdar selling clothes and fabrics. And on the highest floor is the clothing store called Yong Tai.
Of the four two businesses Stood Out – KFC & PIZZA HUT!
Every weekend KFC & PIZZA HUT Were Doing Roaring Business. One idea L. Tan had was this. In Malaysia the majority race is Muslim and they are forbidden to eat pork. So KFC should do very well.
So we loaded up on KFC & QSR. I like QSR more because QSR has both KFC & PIZZA HUT. As it turned out JCORP Later took both private.
4. HAMMER IT!!!
Hammer It? What is this? Ha! According to my Johor Sifu, if you have found a really good stock, you should not just nibble a little but HAMMER IT! That means, don’t just buy a little BUT BUY A LOT OF IT.
That’s how we both bought into KPS at 50 cents. And when KPS dropped to 39 cents we loaded up even more. KPS later shot up more than 1,000% to its all time high of Rm3.94
HAMMER IT? I bought and bought Pm Corp until I was in the Top 30 Major Share Holders. So is My Johor Sifu. He was in 30 Top Shareholders in quite a good number of Stocks.
4. RECEIVABLES IS NOT CASH
This was when I bought into Megan Media at around 67.5 cents. From the Balance Sheet Megan Media showed a P/E of only 3. NTA at over Rm2.00. It also pay a small dividend.
So many have been tricked by the “blue ray” disc hype touted by Megan Media Bosses. However, My Johor Sifu stood his ground & rejected buying into this popular stock which so many others bought.
Why? He questioned the High Amount of RECEIVABLES In Megan Media’s Accounts. RECEIVABLE IS NOT CASH. What is CASH Then? According to my Johor SIFU The Smart Accountant, “CASH IS ONLY CASH IF THE CASH IS RECEIVED AND DEPOSITED IN THE BANK”.
Being not sure I still held on to my Megan Media shares and watched it carefully. Then one day to my surprise, I saw Insider selling 3 million Megan Media shares! And then they unloaded another 5 million shares! Insiders are bailing out!! The pilots are parachuting!!
Straight away I called my Remisier to sell off every Media Megan shares at 66 cents for a small loss. Next day to my chagrin Megan Media even rose to touch 70 cents. If only I had sold one day later? Then I would have made some profit? Why the hurry? Weeks passed. Then one day the horrendous result came out. Megan Media went limit down!
It plummeted to just over 30 cents. One Mr Teh thought it was bargain time & loaded up. Loading up falling knives? Megan Media went bankrupt and got delisted. It was found out later that all the Blue Ray Disc Factories were non existent. RECEIVABLES WERE ALL FAKE.
5) RIDING ON COMPANY SHARE BUY BACKS & INSIDER BUYS
When he saw MAMEE issuing Warrants he loaded up. Company Share Buy Backs on MAMEE helped to push up the Warrants. So he loaded up more Mamee warrants. It was really effortless. Riding Mamee Warrants when Company bought up Mamee shares and took it private later.
Same goes for PTaras Jaya. PTaras was into piling work for foundation. In high rise construction the first job is piling and so Ptaras Jaya will get paid first. How did he know? My Johor Sifu’s were Big Time Developers. Another thing is – PTaras Profit Margin is substantial. So he told me to buy PTaras Jaya at Rm1.40. Another reason is this. While exercising ESOS PTaras Jaya Top Boss also bought PTaras shares from open market at Rm1.90. So buying PTaras at Rm1.40 would be a bargain. As it turned out later PTaras went up 500% & split.
6. BEWARE OF SHARKS IN BURSA
Ha! This was new to me as My Sifu explained. Companies would set up con job from time to time. All fools and suckers will be conned if they are careless.
It’s like this. This is the modus operandi of Big Sharks & Syndicates
First go to the Middle East (this was popular then). Then set up Joint Ventures with Names of Some Unknown Foreign Entities with Important High Sounding Names. Get it staged with lots of noise and publicity.
Get the media to take pictures. Splash them out as Headlines in Malaysia.
Get analysts to write glowing prospects of how much projected profits they will make.
Get stockists & remisiers to churn the stocks as if trading spikes up.
With this hooha, hype, fanfare and barrage of seeming good news day after day before the gullible naive dumb gambling and speculating crowd – many are finally drawn and sucked into the trap.
At peak prices syndicates will unload & support the shares intermittenly. And after they have unloaded all to suckers the shares will go down. Some even collapse in limit downs.
7. INVEST – Don’t Trade Too Much
He showed me Warren Buffet’s style which he liked. Make a Few Good Solid Investments & Keep Longer Term. Don’t hit and run all the time. This will prevent erosion of performance by excessive and unnecessary fees. Compounding interest is the eight wonder in the world.
He bought Ajiya at Rm1.00 & sold Ajiya above Rm4.00. With 400,000 lots he made Rm1.5 millions. His Sifu Dr Neoh has 600,000 Ajiya shares & made more than him
8. WHY VALUE INVESTORS WITH MONEY SHOULD DO VERY WELL IN MALAYSIA
In Malaysia lots of Company Bosses Have Money But Don’t Know How To Invest. Many Accountants Have Knowledge But Got No Extra Money for Investment in Shares. You see, after deducting Car loan & housing loan the average Accountant has little monies left for Investment.
So The Chinaman Boss Has Money But Don’t Know About Share Investment. His Accountant on the other hand has the knowldege but no money to invest. And he has no incentive to teach his Boss how to invest. So most Chinaman Bosses will get their tips from hearsay or the media. This is where 70% of the people get conned.
So for the few Value Investors like my Johor Sifu the KLSE is a Great Place to find Great Value Buys.
9. CONCEAL KNOWLEDGE
Once I was in the Stock Market with my Johor Sifu. I saw one guy buying Sapura shares instead of SapuraTech to his ignorant.
Sapura is taking SapuraTech Private with extra Rm40 a shares.
The irony is this – both Sapura & Sapuratech are trading at 80 cents a share.
By buying SapuraTech you get one share of Sapura with 4 extra cent
One Sapuratech = One Sapura & 4 cents
So buy Saparutech instead of Sapura – you dummy!!
I wanted to warn the dumb guy but My Johor Sifu restrained me
“Don’t tell him. No point. He might not understand your good intention & might even give you a good scolding.” my Johor Sifu warned me. So let it be.
10. No POINT Talking To People Even In i3 Investors’ Forum
For this same reason my Johor Sifu – his ID is MG9231 seldom post in i3 Forum.
This is a Big Loss to all new investors who will be losing monies like the 80% who are destined to lose their monies in the share market.
Well I am more thick skinned & I did post & post. And now I found out by real experience. 80% of the people are not interested in long term value investing at all. Hot stock and hot tip of the day is all that matters.
It had been, has been & will be for forever.
Since we cannot change human behavoiur just leave them to their devises.
Now I must learn from my Johor Sifu & relax.
WHAT A WONDERFUL LIFE