Thursday, April 20, 2017

DO NOT SELL WCE, Airasia and Ekovest

This is a reminder that I gave to myself. Everyone will have their own preferences according to what they are comfortable with. I am comfortable with Airasia, Ekovest and WCE. Those are obvious. In investment as what are mentioned by the top notched investors - it is difficult to find gems all the time.

To some people, they may like diamond, some may like ruby. Others may like Emerald. To me, investments is the same.

THIS DOES NOT MEAN I WILL HOLD THEM FOR LIFE.

However, I am very comfortable with what I have found. Some people may be very comfortable with Top Glove for example as they know the business. Some may be very comfortable with Inari as again they know the business and are confident of their views on the semiconductor sector.

For the 3 stocks, I discovered WCE back in 2013/14. Those people who read my blog would know I have done lots of research on the company and its business. This article is not about me saying again what I have said on the business and company as you can find them here.

Then 2015, Airasia went to ridiculous low price. Around RM1.50 was my price point of buying in. You know the fantastic thing is that I knew while oil price was dropping like from USD100 to USD50, many people were focusing on Airasia's debt which it definitely can service - they were ramping up to fight, hence the debt but those assets were already generating cashflow. Not all high debts are bad! So, while the stock price should have gone up, people were selling down - I should have thanked the Hong Kong research house. So who says Malaysians are not smart - we were buying, they were selling (or could it be talking it down to buy?) - Perhaps, they are smarter. I was perhaps the stupid guy who was telling the truth on how cheap and good Airasia was.

(You would also know I was negative on Airasia X, but not Airasia. I am right until now.) So, you may ask - how is it that businesses in almost the same space can be different although run by the same management? I can be wrong in terms of share price in the short term, but in the long run, I hope I am right.

Last year, 2016 was when I realised Ekovest is realising its asset value and having a fantastic business. They are not the best of contractors but good enough. The thing is though, again I shall say this - they have fantastic assets, which many are already realising cashflows.

Yes, of course I can make mistakes. However, you would note that in many cases of businesses that I have put positive comments - they are good businesses run by good people. Some may face the wrath of situations - such as Parkson, Aeon example. Even YFG - look at how they really try hard to revive the business!

Whenever, I write here - I do not write for purchase in the short term - hit and run. Or pump and dump. The above three stocks are testimony of that. The same goes for Padini, Power Root, Insas, Tropicana, TA, Freight Management etc.

My style is very different. You can read this article and if you believe the same as me - one does not need to read another article of mine for next 3 years. Come back when there is a major catastrophe or war in the Middle East. I am very different from many of the "sifus" out there (which I am not on par with them, because they can work wonders by buying a SCADA system company which they do not understand about - as they only look at the financial numbers.) As mentioned here, I look at business first then financials (although I am a financial person). Note, they are definitely not wrong as there are many ways to skin a cat.

BTW, that SCADA system company is a good company, just that I do not feel comfortable enough to put lots of my money into it. 

I am also not the type of feeling remorse when I did not buy Inari (although I know enough of them) when it was trading at 35 sen 6 years back - this company has achieved a 10 bagger - as I was not comfortable enough - again. Why? Because it was a single customer company - Avago (today's Broadcom). Who knows how its "taiko" is going to treat them? Today, it is still largely single customer although it tries to diversify. Again, some people may know enough to be comfortable. That feeling discomfort caused me lots of potential gain, but I would have sold them long time ago anyway.

In the longer run (10-20 years), things can change. Airasia can be facing new challenges for example or it could have gone overpriced. Similar to Ekovest or even WCE. Sometimes, even in the short term, it can be particularly bad for some companies - example oil price goes through the roof for airlines business. Airasia could be facing regulatory challenges in India and Indonesia or even Vietnam.

I am always (or hope) aware of these. Again, I am not sleeping with my stocks but I am also not careless to sell them when they are growing. This is like you have prepared and provided for your 18 year kid - when is time to realise the benefit - we stop supporting them.

8 comments:

reyes430 said...

I love listening to BFM, or read the edge weekly because sometimes when they interview the owner of a certain company, i get to know some of the thinking, or insights throughout the interview. Such insights shared by the owner of a company, whether it is on the business or industry are precious and valuable because those are the thing i cant get elsewhere. Everyone else is so busy studying financial knowledge but literally so few of them willing to spend time understand the business. I believe investment is the balance of art and science and a lot of investors are chasing over the hard skill too much. I think investors should also think,refine or enhance their investment philosophy along the way. I love to read how people think about investment, instead of figures which can be manipulated in certain way. Peter Lynch books have indeed inspire me to think in this way and then i came to your blog. Thanks for your sharing sir.

mine Des said...

Y r awesome to recommend WCE, I believe y r the pioneer to discover this gem, just need to wait longer time for WCE to earn real money. AirAsia is not attractive to bet on this price of course those buy early got no reason to sell now too. Ekovest mayb got good chance to get in since it start to pull back to more attractive price but Dr. Harris dispose quite a lot recently...

Marl168 said...

Hi Felicit I came to know about WCE and started to study this stock from your blog. TQ for sharing all your hard-work & analysis. I bet WCE will morph into a beautiful butterfly pretty soon :)

Multi Bagger said...

Its like KungFu, eash master has his own style. When try to use others style,he may not be comfortable and cant fight well too. Willingness to accept new idea and make necessary modification sometimes can enhance the performance. Felicity,you have a unique style too!

felicity said...

Good one and always work on that part

pang said...

i only want to say i love and enjoying reading your posts...keep it up and look forward more to come....

Jason Lee said...

Hi felicity.wana know for ekovest since haris already release till 100 k share(below 5%).will he continue to release and for how long?ekovest share been stagnant for few weeks already

felicity said...

I do not know. Am not representing Dato Haris. The share has gone up quite a bit, and he is selling to the market hence it is definitely slowing down. I do not know when it will move. Will it go down or up.