I have written an article two days ago in i3investor showing the performance of the portfolio of 13 stocks selected in my stock pick service just completed in the link below,
https://klse.i3investor.com/blogs/kcchongnz/137874.jsp
The main purpose of the article was to show that fundamental value investing (FVI), despite all the criticisms and scepticisms, not only works well in the US and all over the world, it also works well in Bursa, in this case, for a short-term period of one year.
This portfolio made a commendable average as well as median return of 24% and 40% respectively in a year, compared to the gain of 8.9% of the broad KLCI index. The portfolio out-performed this index by a wide margin, with an excess return of 15%, or close to three times the return of the benchmark. The portfolio also more than doubled the return of the broader Mid-cap FBM Emas Index of 11.4%.
Below is the kind of scepticism I am refer to, but nevertheless, it is a good scepticism from a “sexy babe” worth discussing about.
“Hengyuan: SEXY BABE RM21! kc, how we know whether the results are result of good stock picks, or result you asking your subscriber to buy, which creates some upward pressure to prices. How about showing a 5years ago track record. Stock u recommend 5 yrs ago, and still holding well now??? 13/11/2017 01:47”
For the first part, whether the stocks were good picks is easy to answer; all you need is to examine the process and method of selection of the stocks. If you understand a business and have a business sense, you would be able to examine the track records of the companies selected, if they are good companies. Secondly, and more important, if they were selling at reasonable prices when purchased.
The above were also the reasons I was enticing you to participate in my online course for you to equip yourselves on how to determine if a company is good, and if it is selling at reasonable price.
Next, I must say here that I am a small-time investor, not having much money, and living most of my time overseas, with very few people following my FVI. Nobody seems to “heng” FVI here. Hence, I certainly do not have any clout at all to influence any price movement in any stock in Bursa, not at all.
I do like to talk about the last part,
“How about showing a 5years ago track record. Stock u recommend 5 yrs ago, and still holding well now???”
See the triple “???”? That was the scepticism I am talking about.
Yes, I do have this 5-year track record published in this very website of i3investor in the link below. It was actually published by a third party, Tan Kian Wei, a regular contributor of this website.
https://klse.i3investor.com/servlets/pfs/13147.jsp
This portfolio named “GE13 Watch” was my longest portfolio published in a forum on 21st January 2013 for sharing on FVI and it is close to 5 years now.
The broad KLCI rose from 1629 points about 5 years ago to close at 1737 points today on 13th November 2017. Together with an estimated dividend yield of 2.5% a year, the total return of the broad market is about 21%.
The latest Edge Magazine published 63 equity funds investing in equity in Bursa returned an average of 37% over the 5-year period, with the highest at +120% and the lowest at +6%.
How does the portfolio of 10 stocks in my “GE13 Watch” fare after close to 5 years which can be considered as mid to long-term now, compared to the broad market, and the funds?
Return of GE13 Watch
Table 1 in the Appendix shows the performance of the stocks and the portfolio for the last five years’ investment period for “GE13 Watch” up to today on 13th November 2017, a reasonably long period.
During this period, the average return of the portfolio of ten stocks is 146%, or a median return of 81%, widely out-performed the cumulative gain of the broad market KLCI of just 20% and the FBMEmas mid-Cap Index of 24%, and the FTSE Small-cap Index of 42%.
There was not a single loser. The lowest return stock is Plenitude. Four out of ten stocks had triple digit return with the highest in SKP Resources at +516%, followed by Prestariang at +248%, Pintaras at +240%, and Jobstreet, at +211%. This shows the low risk of following this FVI.
“Heads I win big; Tails I don’t lose much”
The total return of the portfolio of 146% is equivalent to a compounded annual growth rate (CAGR) of 20%. RM100000 invested less than five years ago has grown to RM246000, more than double that invested in the broad market of RM120000.
Not only the four triple-digit gains stocks hold well now, the other three stocks; Kimlun at +82%, NTPM at +81%, and even ECSICT at +64%, hold well too.
Conclusions
It can be seen from the performance of my “GE13 Watch list” that FVI also works well for a long-term period of 5 years. It also works well for the short-term 1-year, or even shorter period.
I have actually shown many times in i3investors with various established portfolios published in i3investor to emphasize on the usefulness and necessity of FVI for building long-term wealth.
But why is there so much negative criticisms and scepticisms about FVI?
The answer is simple; it is,
It has nothing to IQ, or whether you are smart or not, or what is your education level, but the attitude.
Following the rumours, hypes and touting of stocks in the internet and ignoring FVI at the peril of your own financial wellbeing.
However, if you wish to learn about FVI, or getting some stocks selected using the proven successful process in FVI to invest in, you may contact me at,
ckc13invest@gmail.com
KC Chong
Appendix
Table 1: 5-year return of GE13 Stock Watch of KC Chong
http://klse.i3investor.com/blogs/kcchongnz/138098.jsp
