Ep432: Kittisak Kovintavewat – Be an Investor, Not a Speculator

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it. Join our community to get the risk reduction checklists I created from the lessons I've learned from all my guests. Also claim your special discount on my six week valuation masterclass boot camp, where you'll learn how to value companies like a pro and advance your career. Go to my worst investment ever.com to join for free fellow risk takers. This is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guests. Get the song go in pay, we want kitty song. Are you ready to rock? Yes, Swati, calm, deca. Alright, so let me introduce you to the audience. gd sack is a value investor who focuses on investing in value stocks in the US, and China. He has been investing in the US for more than seven years and runs the billionaire vi page to help investors to invest following the value investment style tdsi take a minute and fill in for their tidbits about your life.

Kittisak Kovintavewat 01:25
I am the full investor. And also I also work as a company in IT industry. I've been investing since 1999. So now it's about 22 years already, I'm so happy to be investing every day and also share my learning my knowledge to the community. Thank you for inviting me today.

Andrew Stotz 01:50
Yeah, it's great to have you. And you know, I have a question for you. Um, I started investing in the stock market in 1993. And I saw that my mind changed a lot over time. What are some things that have changed, and what are some things that have like stayed the same for you in the way that you think about investing and the way you think about stocks?

Kittisak Kovintavewat 02:14
I must say that, my idea, my learning is that I think the way to invest have changed for myself at the beginning. From 1999, I invest without knowing anything about the company, I know about iOS for my friend, my family, and I just invest for the first 10 years, I get nothing, sometimes I make profits, sometimes they make loss, but is equal. So in the past is about knowing nothing to invest. But in 2010, when I searched over the internet, to find out how to become the successful investor, I found many investing books for the value investor, I learned and I study, totally weird book, my boyfriend and beta lens and many other about the VI value investor, then I become the value investor, cin 2010, then my investment philosophy has changed, I study a lot about the company, I must know that before I invest, I know about how they make money, what they are doing, what the race, what the management team, and also really important things is about the pricing, as you mentioned that to invest and successful, you must invest in the very good company with the very rare risk that come with the mentality to get into the position when the price drops a lot. But the quality of the company is still the same. And that's called a value investor. So in suddenly, things have changed, and I become the value investor. And I love to be this mentality and VI.

Andrew Stotz 04:01
Fantastic. Yeah, it's amazing how much we learn over the years. And I think that's what makes investing so fun and finance so fun is that it's endless, what we learn, you know, even, you know, as the longer we're in it, we continue to learn. So that's, you know, really exciting. And I think for the listeners out there, that's really the challenge. It's a journey of learning. And when you're learning by investing, the learning can be really fun. And if you don't learn it can be really painful. Well, now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be. Tell us a bit about the circumstances leading up to and then tell us your story.

Kittisak Kovintavewat 04:45
Wow, it's really interesting question. I like to share that my worst investment is in 2014 at a time, I look at the company call tie away letting everybody know about This company, and maybe wonder why when I become VI and why I invest in this company, at the time, I study this company and look at the past every time the oil price Tao, their stock price, we go up much higher. And intuition and 14, the price dropped from $110 portfolio to a $53 portfolio within a short period. So, I checked the company and do the deep dive into the sci fi, I found out that that cost is of the oil price is about 40% of the total costs. So it's been that if the oil price cut off 50%, there must have been profit for sure. This is my understanding at the time. So I opened the exhale fi and do some homework, I see that their revenue in that year is about 200,000 million baht. So I look at the net profit, they normally have three to 5% of the day profit. So if I use 5%, then revenue, net profit will be about 10,000 million baht. And then to become to calculate their earning per share, is get to the five baht per share. And I look at the P e in the past. Again, important thing, if you look at the past, we use the past information to forecast for the future, I use 10 multiple times, Tom with the top five. So I think the appropriate pie for tie away at that time was about really low price on price, it should be 50 bucks, but at a time is about 15 but only. So you can earn three times right? From 15 bucks to 50. Back then I started in bed on that price. You know, after I invested it start getting good because his price go up in the short term to 1718. I am happy. But since then, a lot of bad news keep coming. Yeah, I kayo turning a red flag for Thai airway, they may not be able to lend it to the US or European countries, we because of the standard. And also many things happened about the pub m in organization. The price went down keep going down from 15 bath to 10. bar to neighbor, you know at a time I sometime I cannot believe and thinking I will make a huge loss on this one. So I decided to so of the position at night bath. And then can you believe that after I saw I don't know what happened, the good news keep coming. The government turn to the company and help supporting and also they have some of the research during news. That's the good news. The stock price went up to 30. But within the couple months, that I can see that I make a loss. And so I lost the opportunity to make some coffee. Coffee.

Andrew Stotz 08:12
So this hadn't added you feel at that time. I mean, it's such a frustrating type of you know, situation. I'm just curious, how did you feel?

Kittisak Kovintavewat 08:23
Absolutely, I must feel really sorry, really sad that I saw it before the price went up three times. But I can control my emotion and look forward instead of looking back and go forward to find any other opportunities. And that led to investing in the US in 2015.

Andrew Stotz 08:49
So tell me what what lesson How would you describe the lessons that you learn from this?

Kittisak Kovintavewat 08:55
I would say I learned two things from this lesson. The first one that I learn, we shouldn't speculate in the stock market to invest in the company. The speculation, always look at the price. In the short term. Whenever you invest, you want the price to go up, and you just sell it to make the profit. But invest at a company as the owner of the company, you must know a lot of things, as I mentioned, the background of the company, how they make money, even the management team you need to understand deeply and also the valuation. That is really important things that I learned quickly. I learned about that. We shouldn't invest in the title our company. At one Buffett mentioned the title our stock never turned around. Even though in the past years, we can see that some of the practice the company some of the community stocks went up a couple times in the past year. I say to myself that it's up It's not my type of investing, I invest for the long term for the long and stable company, which has a high mode and not invest in the title company anymore. Because it's very hard to predict when they're gonna turn around. And when the fear coming in, you have a high potential to sell the stock before it's turned out. Because the price going very deep, and you cannot raise it to sell. That's the second things. And the last thing is, is that the investment, sometimes it's about the timing as well. So I learned that to invest as long term as the owner of the business, then look at the tiebreakers. If I just invest, and think that if you turn around because of the fundamentals, how we go back to the same even then he doesn't increase the revenue, I will make some money on that. But I thinking very short term and a make loss. If I thinking long term thing, I would make some money on that case. So this is much what I would like to share about my learning from tayari case.

Andrew Stotz 11:10
It's a great learning, and maybe I'll summarize a few things, I was writing down some things as you were talking and one of the things I thought about is that, you know, what you were doing kind of wasn't really investing in a company, it was like investing in an oil play. Yeah, like a theme. And, and then it made me then think about how sometimes when we think we know that a particular factor is going to drive the share price, or drive the performance of the company, we we can't capture every factor. So sometimes we get a surprise factors is coming in, like in this case, it wasn't just oil, although later, you know, maybe that that helped. The other thing that I take away, I wrote down fine your style, you know, you are really in a process of finding your own style. There are people that like turn around there, they love that feeling. And they love that, you know, very focused, but it's not your style. And you learn that it's not my style either so much. But I think for the listeners out there, the lesson is gt sock has told us about kind of exploring really is what you're doing to find your style. And so I think that's a that's a very important lesson. And the last lesson is, a while ago, I did a study where I looked at the the return on invested capital ROI see of about 10,000 companies across the world. And I broke them into different groups. And the top group, the best performing were stars. And the bottom group was were dogs. And what I saw was that over 10 years forward, stars would fall, but not to the average, they would stay above average. And I saw that dogs would rise, but that they would remain below average as a group, you know, some are turning around, but most are not. And what I learned from that was dogs are always dogs. You know, in general, it's not always the case. And so you reminded me, you know, Thai Airways is one of those companies that just always struggled over the years. Is there anything you would add to that?

Kittisak Kovintavewat 13:29
I strongly agree with you that the fundamental things is really important. And about the type of investor I would encourage everybody to invest and learn from the investing the real case. So you will know your style and you adjust this. And when you know your sky, you tend to be able to get know better about the company and invest higher amount to make a better return.

Andrew Stotz 13:59
And can you explain what it is that people get when they go to billionaire vi? I know you've got a lot of followers a lot of followers in Thailand. What What do they get there? What do you what do you like to share with them? How does that tell us more about that page?

Kittisak Kovintavewat 14:17
Think I would like to share that the reason I set up the page is to help Thai people to invest abroad. I started investing in us. I want to help Thai people at least 100,000 people to make 1 million baht per person so our country can make at least 100,000 million baht is our income for the country like the Philippines as you may know. They have export workers like how the teacher the likewise the christic to earn like 600,000 million baht per year. That's the income to the country. So with the economy in Thailand, in this edition, I would include and would like to help more of the Thai people to understand how to invest in the investing, value investing way in the US and China market. and telling them about a case study in the real stock, how we look at the stock, how we do analysis, about the price, about any trend, or any news, and also chatting about the notions about also the how the famous investor like Warren Buffett or Charlie Munger, how they think about the investment, they think about invest at the company had the durable competitive advantage, they will get the company who has the belly good pies have a high margin of safety, something that I love to chat about what often, and I think my fanpage every time they they love learning about well enough in, you know, I went to one of my favorite house in the thing last year, I went to one open house, I went there alone, I went to their house to take a picture went to his company building as well. And just to follow the steps, I went there in February, it's not the end of meeting upenn in March. So it's like, my fnps love to learn more about Warren Buffett. That's why I went there. And also, I love to join the watch the I know meeting over the online meeting, even though it's late night 2am in the morning, I think I'm a DM the first one in the country who after the end of the meeting, I summarized everything and say about seven o'clock in the morning,

Andrew Stotz 16:57
oh my gosh,

Kittisak Kovintavewat 16:58
I love this. And I think the last one is really high. So I believe that my fan base is also have the same mindset at myself to be an investor.

Andrew Stotz 17:09
We call this a pilgrimage. When we go to the place that we really want to see the person you know. So it's like going in for Muslim people to go to Mecca of pilgrimage is to go to see Warren Buffett so that that's very cool. And I'll have the links in the show notes for the listeners out there. So you can click on those links and go check it out and see what you can learn. So let me ask you, based upon what you learn from this story, and what you continue, what one action would you recommend our listeners take to avoid suffering the same fate? We don't want them to lose money.

Kittisak Kovintavewat 17:50
I would say that there's so many things to advise with, again, the investors. But from this scale, I think the main principle, the easiest one is that I would encourage everybody body to understand the difference between speculator and investors. As I mentioned earlier, speculator is a way of fighting the price and making the profit when at high interest. It does buy and sell in the short term. They don't want to know or study about the company. Somehow I asked them why you invest in this company. They said they don't know. They just heard the news that the price will go up. I said, How do you configure the pirate go up, he said Is it should go up something like that. So this is kind of the speculator and you know, this guy of the speculator in the market, the successful people is about 10% only that's that's bs affairs. And I believe that's SFO come for mostly under value investor, which is the The second thing is about being the investor, you must know the fundamentals of the company. If you are the investor, you will allow your time to study more on the company because you are the owner, you must understand what your company doing what you're selling. And you have the mentality to hold the stock the stock in the long term, even though in the crisis coming right there COVID or hamburger crisis, you just stay tuned, didn't do anything. But when the crisis pass, the stock will come back and go up again. So this kind of the owner mentality, I will acknowledge as part of the being the investor. So in suddenly I will I will everybody to understand this difference and learn more about being the investor and you will be successful for sure.

Andrew Stotz 19:44
Fantastic. And it's great to have that feeling like I'm an owner, rather than just trading the price I think it's a it's it's such a good feeling. And I tell you know, no matter whether you're investing in individual stocks or you're holding some mutual fund or something You still are an owner in businesses. Somebody asked me about, you know, what, what do I, what do we invest in in inflationary time. And I said, look at the companies, they all have a CEO, and they all have a management team. And they're working as hard as they possibly can to reduce the impact of inflation, for instance, on their profit margin, and on their growth. They're working so hard. And when you own a share in that company, you don't have to contribute to that work. You just can enjoy that work. So when you pick a portfolio of stocks, you know, you get the benefit of some really hard working teams. And that's why equities and stocks basically end up being great performers over a long period of time. All right, last question. What's your number one goal for the next 12 months,

Kittisak Kovintavewat 20:52
I was not goal is to be successful to develop and growing my portfolio every year, I set up to growing about 20% every year. And I can do that in the past almost 10 years since I become the value investor. In the meantime, I also like to give in and sharing more knowledge to the society as BI. So I may be doing more on the Muscat or videos or even the events.

Andrew Stotz 21:24
Right, fantastic. Well, listeners there you have it another story of loss to keep you winning. My number one goal for the next 12 months is to help you my listeners, reduce risk and increase return in your life. To achieve this I've created our community at my worst investment ever.com. And when you join you also get that special discount to my six week valuation masterclass boot camp. As we conclude today's talk, I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Kittisak Kovintavewat 22:06
I would say that I think the most important thing now is to stay safe. Because if you get sick or you get COVID, you cannot invest. You cannot make money. So I think in this time us stay safe. Take care of yourself and your family. I think the best one and the other one is to be the Intelligent Investor. As I mentioned to be intelligent, investing is really important. You must learn to read a lot of books and reports. The successful investor that I know they study over 12 hours a day, a study a lot of things not only the news, they read the annual report, they read the books, the Saturday book, the investment books, something like that. So I think the media interests can investor you might be very diligent may work hard, and you'll be successful Believe me, huh?

Andrew Stotz 23:05
Well, that's a wrap on another great story, help us create, grow and protect our wealth. And as Katie sacks said, our health also fellow risk takers, this is your worst podcast host Andrew Stotz saying. I'll see you on the upside.