Even when they qualify on the first two counts, its an even smaller group that can be refered to as a "super investor". The other person I can think of almost qualifying for all 3 labels is Chia Song Kun of QL Resources - Mr. Chia just needs to prove his ability as a super-investor when he manages his investments, now he is only a superb manager of QL Resources.
When you are the co-founder of not just one but 3 of the top listed construction firms (IJM, Gamuda, Mudajaya) in the country, that would look so good as your legacy already, providing thousands of jobs and creating value. Well, thats just a small part of his legacy.
Koon Yew Yin, 78 of Ipoh, Perak is a retired chartered engineer and renowned philanthropist and retired since 1983. Annually, he gives RM1 milion to needy students of Universiti Tunku Abdul Rahman (UTAR) situated in Kampar, Perak. Students would only need to pay a small amount for the rental. He has also financed an extension for the Salvation Army Home for orphans in Ipoh. He does not even expect a thank you from the recipients, only a simple promise that they will help others so that “his work will continue even after he has died.”
|Philanthropist tycoon Koon Yew Yin|
In his own words:
You can keep making money but there is no meaning to life if you don’t know how to spend it because you can’t take any of it with you when you die. You must use it effectively to help others and create more happiness. It’s more satisfying.
He firmly believes that education is key to escaping the clutches of poverty, having undergone such experience himself.
He made his initial fortune by co-founding IJM Corporation Bhd, Gamuda Bhd and Mudajaya Group Bhd, three leading public-listed construction companies.He was also secretary-general of Master Builders Malaysia for nine years and a member of the Board of Engineers Malaysia and Sirim.
Besides being a great businessman, he is also a thinker for the betterment of the country. You should read his thoughts on various business topics and even on the Perak storm in a teacup crisis. I have heard him quoted before saying: "You don't become an entrepreneur by getting contracts. You become an entrepreneur when you work as one. Likewise, you don't become a leader when you're elected as one. You become a leader when you lead".
Koon also got the MCA people tangled up in a mess with their warped priorities when he offered to build a hostel at UTAR for RM30m. To know how wonderful MCA is, read the link below to get to the truth from debacle:
But as a financial blog, I am mostly concerned with him being a super-investor. I am talking about his track record in investing. He believes that there are many highly undervalued counters in Malaysia, just do your homework and spot them and stay till they produce the supernormal returns.
While he made his initial fortune by founding those listed companies, the sums were paltry compared to the gains he made investing on his own. He follows Ben Graham, Buffett and Peter Lynch closely, that's his guiding investing philosophy. He has made multi multi baggers (i.e. returns in the multiples of 100%, one bagger is 100%, multi baggers mean 200%, 300%, 400%, etc.) by investing early in Melewar and was a major shareholder of Kaiser Stocks and Shares Co. Ltd. HongKong. Over the past few years he has made a huge killing riding on Kulim and Supermax, to mention but a few. Currently his known investments are in Xinquan and Coastal Contracts.
Luckily, Mr. Koon has also written some of his thoughts on investing. In a paper entitled "Why Do Clever Investors Make Big Money Mistakes":
Statistics show that more than 75% of equity investors including professionals cannot beat the stock index. Studies have also shown that more than 75% of day traders lose money mainly due to transaction costs. There are several reasons for their poor performance but the most frequent mistake is ‘loss aversion’. This is a psychological obstacle which has been consistently affecting their performance, especially in view of the ups and downs that is the normal behaviour of the stock market.
In my opinion is ‘good profit growth prospect’. I will not buy a stock which does not have this quality. In other words––buy on solid evidence of growth and profit not on the basis of speculation or hot tips! After you have bought some stock that you think can perform well, you will have to decide when and which stock to sell.
Often many investors make the mistake of selling the good ones to lock in profit early but retain those that are not performing because of their aversion to taking losses on these. Some regret their action later and may even jump back into the market to buy the same stock that they had just sold but at a higher price. Most of them do not jump back into the market for the stock and they can only watch the stock go higher and higher.
Some investors may object to the implication that loss aversion is a bad thing. After all, it is a very natural behaviour. They might justifiably point out that the tendency to weigh losses more heavily than gains is a net positive attitude. Investors who care too much about possible gains and too little about potential losses run a great risk that can threaten their portfolios. It may appear better to care more about the share price falling than hoping for it to climb higher. True enough; loss aversion can be helpful and is part of a conservative strategy. But an over sensitivity to loss can also have negative consequences.
One of the most obvious and most important areas in which loss aversion skews judgment is in selling too early and missing the additional profit if you dare to hold it longer.
Very often even clever investors who are well versed in stock selection cannot overcome this psychological fear. What is tricky about this concept of loss aversion is that it can often lead us in the opposite direction– to hold on to a losing investment for longer than we should.
I asked one of my friends why he sold a particular stock instead of selling his other holdings that he bought at higher prices? He said that he did not want to recognize the losses but preferred to lock in the profit. This is the most common mistake committed by investors because they do not want to admit their mistake of picking the wrong stock. Moreover, the profit from the sale could easily cover the losses.
Studies have shown that on average, it is easier for well-managed companies to continue their good performance than for bad companies to improve their poor position. That is why we should not sell good shares too early and retain the bad shares.
Why invest in public listed shares? Statistics show that our Malaysian Stock Index has an average annual growth rate of more than 10% which is more than most other forms of investment. One can still buy the winning horse after the race in the stock market’. It means that you can still buy shares of really good companies after they have announced their good results.
When to sell? After having said all that about selling too early due to the loss aversion phenomenon, we must not forget that no share can keep climbing up and up indefinitely for whatever reasons. In other words, we must not be too greedy and wait for the bubble to burst. Hence the time to sell is when the reasons you bought the share– growth and profit– are no longer there or valid.