This blog is merely to share my investment ideas and should be viewed only for learning purpose.
I will share my investment ideas or cases as and when I feel like it. The style of the writing will be super casual and most of the times it will be as if I am talking to my friends or buddies.
I appreciate self depreciating and hope the readers would view my frankness and at times, bluntness at ease.
If you expect excellent and flawless English (or sometimes Bahasa Indonesia), you will be greatly disappointed.
I hope my sincere sharing and investment ideas outweigh my flaw in writing.
What contributes a good or even great business?
There are definitely many ways to measure.
However, to me, the key is in ROE or better yet, ROIC.
By and large, Airlines businesses generate low ROIC or even minus.
Flying in the sky is tough.
Assets are huge and competitions are tight.
It is an almost perfect competition in work.
However, handling the airlines grounding is generally milder.
Be it passengers handling, cargo handling or owning airports.
There are regulations, licenses and oversights either by Government or Standardisation bodies.
To a city, Airport is generally monopoly or duopoly.
To an Airport, it is more effective to give license to mono or duo established Ground handlers based on fulfilment of strict criteria and also the more important factor of good track records.
The barrier of entry of such ground handling businesses is much higher.
As the wise saying:
“Never underestimate Stupidity”
It is that simple but yet it has proved again and again to be the case.
Stupidity knows no boundaries, it creates insanity.
As per Total Nuts episode I, below for details:
Total Nuts I
I’d again let the numbers talk and avoid the bias of qualitative factors.
As the saying goes, ignorance is bliss.
But, just like Rick & Morty, it has to pair with happy-go-lucky.
By and large, it refers to silly guys who tend to be dumb but also always miraculously dodging the bullets in life.
Probably this is what have been going on in recent years in Indonesia.
Except that, it is getting to the ignorrogance state (the word is heartlessly highlighted by grammar as mistake).
Ignorrogance is Ignorantly Arrogance.
I have just concluded my investment return in 2017.
The return for 2017 is 35% while IDX returns 20%.
I’d remind the readers not to read too much into 1-year result and rather look at longer term horizon, at least 5-10 years cycle.
At times, when something is too obvious, it is seldom as it seems to be.
When something is too good to be true, it is rarely true.
However, this writing is about an obvious case of total nuts, to me personally as well.
But it could also be that my eyes and mind are playing trick on me! Ahh!!
For that, I’d love to standby to stand corrected.
To reduce human (yours truly) misjudgement, this round, I’d mostly let the numbers do the talk and hope you‘d come to your own senses.
The actors this round are TOTL and TOPS.
TOTL is Total Bangun Persada
TOPS is Totalindo Eka Persada
From their name, it may seem that they are related (perhaps brothers from the same parent) but AFAIK, they are NOT.
Except that, the founder of TOPS used to work in TOTL for several years.
Generally I am a very consistent person.
I love sustainability.
I prefer evolution (gradual changes) than revolution (extreme changes).
This year, however, there was a swift change in my holdings.
LPCK was 33% of my portfolio before I divested almost all on Aug-2017.
I still hold tiny amount due to the cheap dark side in me.
But it is insignificant to move the needle.
Despite the divestment gain of about 10%, I do not consider it to be a decent investment. To me, it is a quality investment went wrong.
Quality in numbers but not in interest alignment.
MOS, Margin Of Safety,
is one of the key points in Benny G’s Intelligent Investor.
And hence, the heart of Value Investment.
However, just as the term Value Investor, the MOS is ubiquitous and overused.
It is common to see people mentioning MOS as if it is the magic word in the Investment.
It is overused and under-understood (let’s pretend such word exists). (:
Let me try (so I can say, at least I’ve tried) to put our understanding in perspective, shall we?
Are you a LONG or SHORT term Investor?
You are likely feeling Long term in rising market,
turning Medium term in retreating market,
fully Short term in plunging market.
If you ask me, my answer is:
“In what term?”
If you push your luck a bit further, the answer is:
“In my favourable term”
Speculators be warned:
This writing is going to be uncommon logic and NOT fun to read for speculators.
If you are one, read this in your own peril or take a grain of salt. (:
The uncommon thing about common-sense is that, it is not common.
This is especially true in human nature, being the creature with emotion over logic.
Is that bad? Not really.
It is just what makes us human being, human.
Thinking (or the lack of it) with heart, rage, greed, sorrow, love etc.
In short term, human’s decisions are clouded by emotions.
However, over the long term, the fact will be out and human will adjust their mistakes (consciously or not).
My investment process is pretty simple but not easy to follow.
The hardest part is likely to be against the crowd.
Buy when others are Selling.
Sell when others are Buying.
Sounds like déjà vu? (:
To me, sound investment principle should stand its ground against the time.
Time may be different, strong investment principle remains the same.
This week, Indonesia main stock index (IHSG) has reached another record high.
By and large, it shows a rather grossly expensive market.
The Indonesia potential is there (as have been and always) and Mr. Market for once has recognised that and much more.
The expectation is (overly) high and with it, the risk of falling short.
It is not unlike the potential young footballer scored a goal in SEA Games and suddenly everyone expected him to bring Indonesia to World cup glory.
We can guess how this story ends. (more…)