Showing posts with label Koon Yew Yin. Show all posts
Showing posts with label Koon Yew Yin. Show all posts

Wednesday, July 27, 2011

Super-Investor's Latest Picks

Mr. Koon Yew Yin has kindly sent an article for me to share with you readers. Cannot get in mainstream media or research houses, you know. Money cannot buy. I have been saving for a good posting to feature Cherie Chung, her recent photos, she's 51 you know, still beautiful as ever and effervescent.
My one and only criterion for buying shares

Koon Yew Yin, 20th July 2011

As you know, there are many investment books written about the methods used by Gurus, like Warren Buffet, Benjamin Graham, Peter Lynch and many others. After reading and mastering all the basic fundamentals on share selections, I thought I could make money from the stock market. It is not so easy. After learning from my own mistakes, now I have one and only one criterion for stock selection, that is to buy only shares that have profit growth prospect.

I will never buy any share if I am not sure that it will make more profit in the next few quarters and also better profit this year than last year. Of course you should only buy the shares with P/E ratio below the average P/E of the sector and when the increased profit is announced you the shares you have bought will look cheap.

If you look at the first quarter results of plantation stocks, you will notice that almost all of them have made more profit than the corresponding quarter of last year. Moreover, you can see that the average selling price of CPO was around Rm 2,600 per ton and average CPO price has been above Rm 3,000 for this year. You can also see in the Star daily that the CPO price for the next few months is above Rm 3,100 per ton. Basing on these information you can safely assume that almost all plantation companies will make more profit this year than last year.

Now you can be almost sure that you will make money if you buy planation shares. Of course, the best buy would be those with low P/E ratio which you can see in the Star or NSTP daily.

I am obliged to tell you that plantation stocks form a significant portion of my investment portfolio. I am not asking you to buy plantation shares. But if you decide to buy, you are buying at your own risk and I am not responsible of your profit or loss.

Good luck! LUCK is when preparation meets opportunity.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Monday, May 23, 2011

A Few Good Men

Koon Yew Yin is now more known for his philanthropy and awesome stock picking skills. We should not forget that the great man was also the co-founder of not just one but 3 of the top listed construction firms (IJM, Gamuda, Mudajaya) in the country. I mean one is already a fantastic achievement, but 3 is .... I am running out of superlatives.

And so... at IJM's annual dinner, in light of Krishnan Tan's exit from his CEO post, Koon made the following speech:

My purpose of reproducing my speech here is to record the CEO of IJM, Dato Krishnan Tan’s excellent performance which will be a useful lesson to many an executive who is aspiring to be a good CEO. This lesson is very essential especially in view of the significant number of poorly managed listed companies. As one of the founders of IJM, I feel obliged to record my appreciation of his excellent achievement.

In 1997 when Krishnan took over the helm as CEO, the market capitalization of the company was only Rm 441 million and basing on the current share price, its market cap is more than Rm 7 billion. Krishnan has made the company 15 times larger in 13 years. His performance as a CEO must be among the best in Malaysian corporate history.

There are about 1,200 public listed companies in Malaysia. A significant number of them are performing below the Kuala Lumpur Stocks Index. As we all know that the share price of any company moves up and down for various reasons but if a company share consistently performs poorly over long period of time, the reason is often due to bad management.

There is a classical saying ‘Good management produces good share price and bad management produces bad share price’. This simply means that if management cannot continue to enhance shareholders value by making increasing profit every year, its share price will remain depressed. But in case the share price still remain depressed in spite of showing increasing profits, management must find out why?

A CEO is the highest ranking officer in a business organization. He reports to the board of directors which is presided by the chairman. In some companies the role of the chairman and the CEO is the same person. But in larger companies, like IJM Corporation, the chairman is an independent and non executive director. As a result, all the business decisions taken at the board level are based on consensus. Any director can voice his opinion. There is a classical saying ‘I never learn anything from the people who always agree with me’. The board reports to the investors who are actually the owners of the company and the management’s main object is to enhance shareholders value by making more profit every year.

At every occasion when I praise Krishnan, he would say that it was the basic management method established by the founders that made his work so easy to perform. What he said is not completely true. He is too humble to take all the credit for himself. As far as I can remember is that we have a weekly meeting among all the heads of divisions to evaluate the work done during the week and see how we can improve our efficiency. We must always consider new idea or proposal to expand our business.

Since 1997 when Krishnan became the CEO, the speed of doing business had increased tremendously due to the use of the computer and the internet. Many businesses are going global at a faster pace than before. In fact, dependency of business on technology is making business more complex and challenging. The competing forces are growing at a much faster rate, competing choices to a customer is just a click away. It is getting ever more difficult to get and retain a customer, since switching to find a cheaper resource is just a click in a few seconds. All correspondence can be sent by email and frequently you can receive a response almost instantly.

So if you aspire to become a CEO, then start behaving like a CEO and be willing to consider new ideas and opinions. You must realize that it is so foolish to think that you already know everything.

There are other qualities that one must also develop as follows:

- Never write an insulting memo or letter to anybody including your sub-ordinate staff because it reflects on yourself. This is not the best way to promote cooperation among your team members.

- Emotional competence is an important quality to have, as it can take you to a next level that the technical competence alone cannot.

- Always listen attentively and speak only when required.

- Be honest, diligent and down-to-earth.

- Be yourself and speak your mind in a tactful and diplomatic manner.

- Before you start work every morning, sort out your priorities and think on ways to improve your work.

- Attitude is most important. Will you react positively?

Reaching the top is not difficult, especially you have a rich father or political connection, but staying on the top to enhance shareholders value continuously is.

Tuesday, May 10, 2011

Malaysia’s Brain Drain: Government in Perpetual Denial

Written by Koon Yew Yin

Monday, 09 May 2011 14:07

Dr. Mahathir has derided the World Bank brain drain report as “useless and politically motivated”. The country should ignore his criticism as the ranting of a seriously flawed leader whose shelf life has expired and who has long lost his credibility to comment sensibly on any public policy subject. Prime Minister Najib Razak’s response has been equally disappointing. He must surely know – as any sane and reasonable person would – that the emigration of Malaysia’s highly educated and skilled has been disastrous and is an exodus the country can ill afford.


Malaysia’s Brain Drain: Government in Perpetual Denial

For some years now, various analysts have written about the brain drain from Malaysia arising from the country’s racist policies. Now the World Bank has finally come out with a definitive report detailing that the number of skilled Malaysians living abroad has tripled in the last two decades with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore.

The report also studied the factors that would entice Malaysian currently staying overseas to return. The top picks were a change in the country’s race-based policies and fundamental reforms in the public sector with “Paradigm shift away from race-based towards needs-based affirmative action” and “Evidence of fundamental and positive change in the government/public sector” receiving 87 and 82 per cent positive responses respectively.

The brain drain report mainly focused on the human capital outflow of migrants with tertiary level qualifications. If it had taken into account the out-migration of those with upper secondary and other desirable vocational and other skills, the human capital haemorrhage from the country arising from the New Economic Policy and other racially skewed policies would be far worse than the report’s findings show.

The Past and Present Prime Minister’s Responses

What has been the response to the report? Not surprisingly, the chief critic has been Dr. Mahathir who has derided the report as useless and politically motivated. As Dr. Mahathir has been the main architect of the socio-economic policies that have been responsible for the brain drain, his reaction is predictable. The country’s leadership and citizenry should ignore his criticism as the ranting of a seriously flawed leader whose shelf life has expired and who has long lost his credibility to comment sensibly on any public policy subject – whether this relates to the New Economic Model or human capital development - and especially if it concerns governance issues of which the former Prime Minister has been fundamentally compromised and incorrigibly irresponsible.

The present Prime Minister’s response has been guarded but no less disappointing. Dato Seri Najib Razak, whilst acknowledging that the brain drain is “one of the problems that must be resolved”, has pointed to the recent pickup in foreign direct investment to argue that the Bank report was not “quite correct”. The Prime Minister is grasping at straws to deny the undeniable. He must surely know – as any sane and reasonable person in the country would – that the emigration of Malaysian talents has been disastrous to the economy and is an exodus the country can ill afford.

He must also be aware that the outflow of another generation of young Malaysians (this time, including many Malays) is presently taking place and will continue unabated so long as racial (and religious) discrimination, and the self enrichment and political bankruptcy of the UMNO elite and its cronies, remain unchecked.

Incentives such as lowered income tax and other material or monetary sweeteners promised by the Talent Corporation are not the solution. They do not address the sense of not belonging, social injustice and lack of belief in the country’s future that are at the heart of why Malaysians have chosen to abandon the country of their birth, and to seek what - for most migrants - are less materially privileged but more psychologically fulfilling alien lands, despite being cut off from families and friends.

The Reverse Brain Gain

There is a key related topic which the World Bank report failed to deal with – the lower quality human capital inflow that has replaced the outflow of highly educated, skilled and talented Malaysians. During the past 30 odd years, there has been a massive officially sanctioned influx of migrants, especially from Indonesia and the Southern Philippines aimed at ensuring ethnic and religious dominance of the Malays. Millions of poor, uneducated, unskilled or semi skilled migrants have been permitted – rather, encouraged – to work and stay in Malaysia, thus offsetting the skilled brain drain with a cheap labour influx. According to the 2000 Census, 1.3 million or about 5.9 percent of Malaysia’s population of 21.9 million was comprised of foreigners. This estimate does not include other categories of non-citizens, such as permanent residents, spouses on a social visit pass, and stateless persons born in Malaysia. The latter number, of which there are no officially available figures, could bring the total number of non-citizens living in the country to close to 4 million or more.

Should the higher figure be used as the basis of calculation of the foreign component of the population, and even if the high birth rate of the Malay population were taken into account, it would imply that up to 25 per cent or one quarter of the country’s present total population are unskilled or semi-skilled migrants who have settled in Malaysia recently, especially since 1970. The influx of over 4 million lower quality human capital at the same time that over one million highly skilled Malaysians have left the country is probably unprecedented in the history of global migration flows (for a profile of the countries where Malaysians have moved to, see table below reproduced from Lee Wei Lian,“A Snapshot of Malaysia Talent Outflow”.)

I have no doubt that many recent migrants to Malaysia are hard working and good people, and deserve to have their rights protected. However, they would never have been allowed into the country or given easy access to citizenship in the normal circumstances of any other country in the world. What has made the difference has been a racially obsessed regime with a political agenda to artificially bolster the Bumiputra component of the population, and to provide that component with citizenship and voting rights aimed at ensuring Malay dominance of the government and country.

The pro-Nusantara cheap labour, easy assimilation (if the migrant is a Muslim or has no objections to “conversion”) policy of the last 30 years and its socio-economic costs and benefit needs to be studied by the World Bank team as a logical complement to the brain drain one. I have no doubt that should this lower level “brain gain” study be conducted, its findings will more fully explain the economic decline that the country has experienced. It will also expose fully the crude demographic numbers game that UMNO under Dr. Mahathir and his civil service underlings have engaged in to ensure continued Malay hegemony.

Ketuanan Melayu forever – the Perkasa slogan - is not a new one. It has been the bedrock of UMNO’s ideology since Dr. Mahathir came to power and will continue to be that way until the Malay population comes to its senses and realizes that the non-Malay communities are not their enemy – it is Malay political leaders that have failed them and are now looking for non-Malay scapegoats to explain why poor Malays have been left behind in the country’s socio-economic development.

Koon Yew Yin

9th May 2011