Hi guys
I finally get to read Howard Marks MASTERING THE CYCLICALS recently
Let me give you a gist of his thoughts
Howard Marks say
Suppose that there are both black and white balls in a Jar
And you are told to pick some at random
Say 10 balls
Now if there are equal amount of white and black balls then the chances of picking a white ball or black ball is only 50%/50% chance
BUT IF YOU HAPPEN TO KNOW THIS
KNOW WHAT?
TO KNOW THAT INSIDE THE JAR THE WHITE BALLS ARE 70% AND THE BLACK BALLS ONLY 30%
AHA!
NOW YOU KNOW THE ADVANTAGE OF CHOOSING WHITE BALLS OVER BLACK BALLS HAS AN EDGE
OF COURSE BY BAD LUCK A PERSON COULD STILL PICK MORE BLACK BALLS THAN WHITE BALLS EVEN THOUGH WHITE BALLS ARE 70% COMPARED TO BLACK BALLS ONLY 30%
IN THIS CASE HE HAS BAD LUCK
BUT STATITICS WILL SHOW OVER A VERY LONG LONG TIME IF WE CHOOSE TO PICK ONLY WHITE BALLS OVER BLACK BALLS WE WILL STILL COME OUT THE WINNER
AS WHITE BALLS ARE 70% AND BLACK BALLS ONLY 30%
RANDOM SHORT TERM MAY NOT SHOW. BUT RANDOM OVER A VERY LONG PERIOD PICKING WHITE BALLS WILL MAKE THE ODDS IN OUR FAVOUR
SO THAT IS HOW HOWARD MARKS APPLY THIS TO STOCK PICKING
BY THE WAY HOWARD MARKS IS NOW A BILLIONAIRE ( EVEN SIFU WARREN BUFFET LOOKS FORWARD TO RECEIVE HOWARD MARKS INVESTMENT NEWS LETTER IN HIS MAIL. HE OPENS HOWARD MARKS LETTER FIRST AMONG MANY OTHERS
NOW THIS YEAR HAS BEEN A VERY VERY EXCELLENT YEAR FOR CALVIN
WHY?
ANSWER:
BECAUSE BY FOLLOWING HOWARD MARKS - MAKING THE ODDs IN OUR FAVOUR WE PICKED OIL AND GAS COUNTERS
THE ODDS FAVOUR OIL AND GAS STOCKS BECAUSE OF THESE 4 REASONS
1) BRENT CRUDE OIL AT USD60 TO USD70 PER BARREL MAKES IT PROFITABLE
2) MALAYSIAN GOVT WANTS MORE REVENUE FROM PETRONAS
3) PETRONAS RAPID REFINERY NEEDS LOTS OF OIL
4) PETRONAS HAS INCREASED UPSTREAM JOBS TO RM30 BILLIONS
SO FAR SO GOOD, CALVIN'S CARIMIN & NAIM HAVE GROSSED MORE THAN 100% CHUN CHUN
NEXT WILL BE RM40 BILLIONS CAPEX FOR ECRL RAIL LINK JOB OF 688KM LONG & THEN BANDAR MALAYSIA ANOTHER RM70 BILLIONS (ALSO GOT PAN BORNEO HIGHWAY & WCE HIGHWAY) PLUS UP COMING HIGH SPEED RAIL JOBS OF OVER RM60 BILLIONS NEXT YEAR
THESE ARE HIGH INFRAR JOBS WHICH NEED LOTS OF CEMENT AND LONG STEEL
AND YTL TAKING LAFARGE CEMENT PRIVATE AT RM3.75. HONG LEONG ALSO TAKING TASEK CEMENT PRIVATE
SO THERE REMAINS A NEGLECTED CLASS
WHAT ARE THEY?
ANSWER:
THEY ARE LONG STEEL STOCKS & I HAVE PICKED MASTEEL AS THE VEST BEST OF LONG STEEL STOCKS
WHY MASTEEL?
THESE ARE MY REASONS
1) MASTEEL USE SCRAP IRON UNLIKE OTHERS USING EXPENSIVE IRON ORE.
SO MASTEEL HAS AN ADVANTAGE IN COST
2) MASTEEL FACTORIES ARE LOCATED IN PJ & KLANG. AS STEEL TRANSPORT COST WILL BE CHEAPER DUE TO ECRL ENDING IN PORT KLANG
3) MATEEL DEBT BURDEN IS LIGHTER THAN OTHERS AS IT RAISED CAPITAL BY PRIVATE PLACEMENT
4) THE LOGISTIC COST FOR STEEL IS BETTER THAN CEMENT
ONE TON OF CEMENT OVER RM200 BUT ONE TON OF STEEL IS OVER RM2,000
SO STEEL IS MORE EXPENSIVE THAN CEMENT COST BY UP TO 10( X ) TIMES
SO SELLING ONE TONNE OF LONG STEEL IS EQUIVALENT TO SELLING 10 TONS OF CEMENT
JUST IMAGINE FOR THE SAME AMOUNT OF MONEY YOU NEED TO USE
10 LORRIES TO TRANSPORT CEMENT
YOU ONLY USE ONE LORRY OF STEEL FOR THE SAME VALUE LIKE CEMENT
5) NOW CALVIN LIKES MASTEEL A LOT MORE DUE TO ITS DISCOUNT OVER RM1.50 NTA
AT ONLY 50.5 SEN MASTEEL IS SELLING AT ONLY 1/3 OF ITS NET ASSET VALUE
THIS GIVES US A TREMENDOUS MARGIN OF SAFETY
6) AFTER PH GOVT WON GE14 & HIGH INFRAR JOBS WERE CANCELLED, SCALED DOWN OR POSTPONED BOTH CEMENT AND LONG STEEL STOCKS WHICH DEPEND ON INFRAR JOBS CRASHED
NOW THAT ECRL & NEXT BANDAR MALAYSIA WILL BE RESTORED CEMENT PRICES ALREADY GONE UP
ONLY LONG STEEL IS THE LAGGARD.
BUT NOT FOR LONG. AS ECRL JOB PROGRESSES LOTS OF ORDERS WILL COME IN AGAIN FOR LONG STEEL FOR BRIDGES, FOUNDATIONS, EMBANKMENTS AND OTHERS
20% TO 25% OF CONSTRUCTION COST CONSIST OF MATERIALS LIKE CEMENT AND STEEL
SO THE MULTIPLED BILLIONS DO ADD UP TO A MULTI YEAR FRESH ORDERS FOR LONG STEEL
7) WHO SAW ALL THESE
DIRECTORS AND INSIDERS OF MASTEEL OF COURSE
SEE
SEE DIRECTOR BOUGHT 2 MILLION MASTEEL SHARES AT RM1.51
EVEN ADJUSTED FOR 1 FOR 3 BONUS ISSUE DIRECTOR COST OF PURCHASE IS RM1.13
WHY DIRECTORS SO BULLISH?
BECAUSE THEY SAW ECRL, BANDAR MALAYSIA, KL SPORE HIGH SPEED RAIL WILL CAUSE HUGE SURGE OF DEMAND FOR LONG STEEL
SO IF DIRECTOR DARE TO BUY AT RM1.13 NOW MASTEEL AT 50.5 SEN
DON'T YOU THINK THE ODDs ARE NOW IN OUR FAVOUR
MORE SO AS PROJECT AFTER CANCELLED PROJECT ARE BEING RESTORED ONE BY ONE IN COMING DAYS
AT 50.5 SEN NOW
CALVIN HAS A MODEST TARGET PRICE FOR MASTEEL AT ONLY RM1.00
EVEN AT ONE RINGGIT IT IS STILL BELOW DIRECTOR ENTRY COST AT RM1.13
BEST REGARDS
Calvin Tan Research
Singapore
Please buy or sell after doing your own due diligence
I finally get to read Howard Marks MASTERING THE CYCLICALS recently
Let me give you a gist of his thoughts
Howard Marks say
Suppose that there are both black and white balls in a Jar
And you are told to pick some at random
Say 10 balls
Now if there are equal amount of white and black balls then the chances of picking a white ball or black ball is only 50%/50% chance
BUT IF YOU HAPPEN TO KNOW THIS
KNOW WHAT?
TO KNOW THAT INSIDE THE JAR THE WHITE BALLS ARE 70% AND THE BLACK BALLS ONLY 30%
AHA!
NOW YOU KNOW THE ADVANTAGE OF CHOOSING WHITE BALLS OVER BLACK BALLS HAS AN EDGE
OF COURSE BY BAD LUCK A PERSON COULD STILL PICK MORE BLACK BALLS THAN WHITE BALLS EVEN THOUGH WHITE BALLS ARE 70% COMPARED TO BLACK BALLS ONLY 30%
IN THIS CASE HE HAS BAD LUCK
BUT STATITICS WILL SHOW OVER A VERY LONG LONG TIME IF WE CHOOSE TO PICK ONLY WHITE BALLS OVER BLACK BALLS WE WILL STILL COME OUT THE WINNER
AS WHITE BALLS ARE 70% AND BLACK BALLS ONLY 30%
RANDOM SHORT TERM MAY NOT SHOW. BUT RANDOM OVER A VERY LONG PERIOD PICKING WHITE BALLS WILL MAKE THE ODDS IN OUR FAVOUR
SO THAT IS HOW HOWARD MARKS APPLY THIS TO STOCK PICKING
BY THE WAY HOWARD MARKS IS NOW A BILLIONAIRE ( EVEN SIFU WARREN BUFFET LOOKS FORWARD TO RECEIVE HOWARD MARKS INVESTMENT NEWS LETTER IN HIS MAIL. HE OPENS HOWARD MARKS LETTER FIRST AMONG MANY OTHERS
NOW THIS YEAR HAS BEEN A VERY VERY EXCELLENT YEAR FOR CALVIN
WHY?
ANSWER:
BECAUSE BY FOLLOWING HOWARD MARKS - MAKING THE ODDs IN OUR FAVOUR WE PICKED OIL AND GAS COUNTERS
THE ODDS FAVOUR OIL AND GAS STOCKS BECAUSE OF THESE 4 REASONS
1) BRENT CRUDE OIL AT USD60 TO USD70 PER BARREL MAKES IT PROFITABLE
2) MALAYSIAN GOVT WANTS MORE REVENUE FROM PETRONAS
3) PETRONAS RAPID REFINERY NEEDS LOTS OF OIL
4) PETRONAS HAS INCREASED UPSTREAM JOBS TO RM30 BILLIONS
SO FAR SO GOOD, CALVIN'S CARIMIN & NAIM HAVE GROSSED MORE THAN 100% CHUN CHUN
NEXT WILL BE RM40 BILLIONS CAPEX FOR ECRL RAIL LINK JOB OF 688KM LONG & THEN BANDAR MALAYSIA ANOTHER RM70 BILLIONS (ALSO GOT PAN BORNEO HIGHWAY & WCE HIGHWAY) PLUS UP COMING HIGH SPEED RAIL JOBS OF OVER RM60 BILLIONS NEXT YEAR
THESE ARE HIGH INFRAR JOBS WHICH NEED LOTS OF CEMENT AND LONG STEEL
AND YTL TAKING LAFARGE CEMENT PRIVATE AT RM3.75. HONG LEONG ALSO TAKING TASEK CEMENT PRIVATE
SO THERE REMAINS A NEGLECTED CLASS
WHAT ARE THEY?
ANSWER:
THEY ARE LONG STEEL STOCKS & I HAVE PICKED MASTEEL AS THE VEST BEST OF LONG STEEL STOCKS
WHY MASTEEL?
THESE ARE MY REASONS
1) MASTEEL USE SCRAP IRON UNLIKE OTHERS USING EXPENSIVE IRON ORE.
SO MASTEEL HAS AN ADVANTAGE IN COST
2) MASTEEL FACTORIES ARE LOCATED IN PJ & KLANG. AS STEEL TRANSPORT COST WILL BE CHEAPER DUE TO ECRL ENDING IN PORT KLANG
3) MATEEL DEBT BURDEN IS LIGHTER THAN OTHERS AS IT RAISED CAPITAL BY PRIVATE PLACEMENT
4) THE LOGISTIC COST FOR STEEL IS BETTER THAN CEMENT
ONE TON OF CEMENT OVER RM200 BUT ONE TON OF STEEL IS OVER RM2,000
SO STEEL IS MORE EXPENSIVE THAN CEMENT COST BY UP TO 10( X ) TIMES
SO SELLING ONE TONNE OF LONG STEEL IS EQUIVALENT TO SELLING 10 TONS OF CEMENT
JUST IMAGINE FOR THE SAME AMOUNT OF MONEY YOU NEED TO USE
10 LORRIES TO TRANSPORT CEMENT
YOU ONLY USE ONE LORRY OF STEEL FOR THE SAME VALUE LIKE CEMENT
5) NOW CALVIN LIKES MASTEEL A LOT MORE DUE TO ITS DISCOUNT OVER RM1.50 NTA
AT ONLY 50.5 SEN MASTEEL IS SELLING AT ONLY 1/3 OF ITS NET ASSET VALUE
THIS GIVES US A TREMENDOUS MARGIN OF SAFETY
6) AFTER PH GOVT WON GE14 & HIGH INFRAR JOBS WERE CANCELLED, SCALED DOWN OR POSTPONED BOTH CEMENT AND LONG STEEL STOCKS WHICH DEPEND ON INFRAR JOBS CRASHED
NOW THAT ECRL & NEXT BANDAR MALAYSIA WILL BE RESTORED CEMENT PRICES ALREADY GONE UP
ONLY LONG STEEL IS THE LAGGARD.
BUT NOT FOR LONG. AS ECRL JOB PROGRESSES LOTS OF ORDERS WILL COME IN AGAIN FOR LONG STEEL FOR BRIDGES, FOUNDATIONS, EMBANKMENTS AND OTHERS
20% TO 25% OF CONSTRUCTION COST CONSIST OF MATERIALS LIKE CEMENT AND STEEL
SO THE MULTIPLED BILLIONS DO ADD UP TO A MULTI YEAR FRESH ORDERS FOR LONG STEEL
7) WHO SAW ALL THESE
DIRECTORS AND INSIDERS OF MASTEEL OF COURSE
SEE
| DATO' SRI TAI HEAN LENG @ TEK HEAN LENG | 14-Feb-2018 | Others | 32,723,154 | - |
 |
| DATO' SRI TAI HEAN LENG @ TEK HEAN LENG | 17-Jan-2018 | Acquired | 2,000,000 | 1.512 |
|
| DATO' SRI TAI HEAN LENG @ TEK HEAN LENG | 28-Sep-2017 | Others | 16,028,243 | - |
|
| DATO' SRI DATO SRI TAI HEAN LENG @ TEK HEAN LENG | 10-Jul-2017 | Acquired | 4,865,000 |
0.960 |
SEE DIRECTOR BOUGHT 2 MILLION MASTEEL SHARES AT RM1.51
EVEN ADJUSTED FOR 1 FOR 3 BONUS ISSUE DIRECTOR COST OF PURCHASE IS RM1.13
WHY DIRECTORS SO BULLISH?
BECAUSE THEY SAW ECRL, BANDAR MALAYSIA, KL SPORE HIGH SPEED RAIL WILL CAUSE HUGE SURGE OF DEMAND FOR LONG STEEL
SO IF DIRECTOR DARE TO BUY AT RM1.13 NOW MASTEEL AT 50.5 SEN
DON'T YOU THINK THE ODDs ARE NOW IN OUR FAVOUR
MORE SO AS PROJECT AFTER CANCELLED PROJECT ARE BEING RESTORED ONE BY ONE IN COMING DAYS
AT 50.5 SEN NOW
CALVIN HAS A MODEST TARGET PRICE FOR MASTEEL AT ONLY RM1.00
EVEN AT ONE RINGGIT IT IS STILL BELOW DIRECTOR ENTRY COST AT RM1.13
BEST REGARDS
Calvin Tan Research
Singapore
Please buy or sell after doing your own due diligence
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/211701.jsp
