A conversation with a very wise Ex-Banker


Every time I finish writing an article, I often wonder if it was worth the time. It takes me on average 3-5 hours to flesh it out from the notes I keep and given my reading speed of roughly 100 pages an hour. That is roughly 1-2 books of worth of opportunity cost.

And this trade off couldn’t be clearer after I finished one of my previous post, and seeing the ensuring debacle.

The Art of Trading DAYANG Profitably Around Mr Koon Yew Yin and Mr Ooi Teik Bee.

A very wise, partially grey-haired friend of mine asked me,

“Why on earth do you still want to post articles or comment on that website? Given how things are for you now, you should have a good life ahead of you.

Why take the risk? And open yourself up to not just pointless personal attacks, but also potentially very serious liabilities and risk from people with malicious intent?

Especially since you can be a bit hot headed, and don’t respond well to personal attacks.

Most people you piss off can’t do much, but statistically, some of them are likely to be able and motivated enough make life a bit irritating for you

I don’t think you actually considered the risk you are taking here, and it’s definitely not worth it in my opinion.”

Even Mr Ooi, very kindly sent me an email detailing his previous experience in I3 and such individuals and advised me to spend my time more productively instead of spending it on the forums.

Advice I would be wise to listen to.

Well, beyond the benefits that come from the sheer act of writing and crystallizing your thoughts, as well as the ability to see how one develops over the years, by reading my previous writings. Reading back, I really do sound quite arrogant at times.

Why do i write? And why you should too.

On occasion, the writing of these articles, allowed me to hit the jackpot in terms of meeting extremely wise individuals I greatly admire and learn much from.

And many of these individuals, i would have never been able to find or meet otherwise, much less have 5 hour coffee sessions with.

And after that Dayang post, I really hit the jackpot.

The first was a businessman playing a chairman type role over two businesses. Like me, he is an avid reader, a great Buffet and Munger fan (he listens to the transcripts of their AGM in the car), and a fellow admirer of Lee Kuan Yew and his works.

He has been a Berkshire Hathaway (as well as some of the companies that Warren buys for his portfolios) investor for more than 10 years, and for one reason or another, was thinking of selling some of the shares and have me manage a portion.

Needless to say, I turned him down. If Charlie Munger says he will never sell his Berkshire shares, who am I to allow someone to do so for my sake.

And who am I to even think of accepting that kind of money and think myself capable of meeting that kind of opportunity cost.

We settled on him kindly paying for our meal and coffee, and giving me his time, in providing me with invaluable advice on life and my nascent money management activity.

In exchange for me, I provided him a link to a website where you can download almost any book you could possibly want for free, as well as where Lee Kuan Yew’s best speeches are kept.

As the conversation was quite personal in nature, I won’t be sharing them.

The second individual however, was an ex banker who had been through all 4 boom and bust.

He also experienced the KLSE market from the very first day. In fact, he was the person who introduced margin finance to the KLSE market.

The depth of knowledge and experience he had, as well as his ability to see and understand a business was incredible, and immensely insightful to me. After getting his permission, I decided to write an article on him.

I hope whatever written will do him justice, and is at least half as useful to you, as our conversation was to me.

Some people made tens or hundreds of thousands, or even millions from DAYANG. I on the other hand, hit the jackpot and met these two.

I think I had the better end of the trade to be honest.



The Conversation

Choivo Capital:

Good afternoon, Mr Ex Banker, thanks for inviting me out. I was quite surprised when I saw your email. And when you told me in those few sentences your experiences, I could not agree to meet fast enough.

Do you mind telling me why you wanted to meet me and your history?


Ex Banker:

Well, I’ve read your posts for a while, and thought they were interesting. However, the Dayang article you did, was for me, the best.

It wasn’t just an abstract theoretical piece but a good explanation of the cause and effects.

You even did the separate stages and made it applicable to the current situation. This situation with Dayang is something I had observed many many times, and you put it out in a way that was easy to understand.


Choivo Capital:

Thank you. I appreciate the compliment. What is your history like? You told me in your email and whatsapp that you were an ex banker, and you had experienced all 4 booms and bust of the Malaysian market.

What are these booms and bust?

You even mentioned a company Bovis Oil, which very few would have heard. I could barely any information googling it, and only found quotes of it in extracts of very old books.



Well, I was a banker, and I retired in my forties, which is 20 odd years ago.

One of the things I am certain about is that, I was the first, if not one of the first to introduce in Malaysia was margin loans.

Well, the first boom/bust was in the mid-1980’s it was Tan Koon Swan and the Pan-El crisis.

The second was the famous black Monday in 1987. The third on was 1998 Asian crisis. And the fourth was the 2008, housing crisis. Very interesting times.

Well, back in those days, it was honestly quite crazy and a little bit like the wild west. I remember some small guy, with nothing but a timber mill in Sarawak, who bought over the shares of a Southern Bank at 30 sen.

And using illegal transfer pricing to fry the earnings, resulting in the share price increasing to more than RM 100 per shares. And it was just incredible, how every bank wanted share placement from him, which he used to fund the losses from the transfer pricing.

That guy in the end ran away to Shanghai in 1997 or so when he found out SC was out for him and built a theme park there.

So many of these shares with nothing, just go from few sen to a few hundred ringgits. It was insane. Even taxi drivers turn into millionaires in just 2-3 months.


Choivo Capital:

Unless i’m mistaken, that sounds like Teh Soon Seng of Aokam Perdana. How did you manage to find out about the things he was doing?



Well, I was friends with an analyst who happened to be his relative. He told me, anyone in the plywood/timber mill business in Sarawak, knows for a fact that the kind of profit and margins he is posting is impossible.

Quite a smart chap.


Choivo Capital:

Well, what do you think of the current Dayang scenario?



Well, every few years, for every bull market, we always have a new group of market taiko. In 1980’s Koo Khai Peng and Tan Koon Swan.

In 1990’s Samsuddin, Ishak Ismail, Teh Soon Seng, Halim Saad, So Tian Chai, John Soh Chee Wen (this guy currently in SG jail for the 2013 penny stock crash in SGX), Robert Tan, Low TH etc

And right now, the present taiko is Koon Yew Yin. Malaysia market is quite small after all.

Like how your article said, in this kind of scenario, as prices go up, you have more and more of the same type playing. And if you don’t get out early, you will be the only one standing there and playing.

Having been in 4 boom and bust, I can tell you everybody, no matter how smart, cunning or rich that person is, if fortune turns on him, you will need to eat humble pie.

Back in those days, I remember this guy was worth almost USD 3 billion, he held 5 public listed company in Malaysia, one of them HWA TAI. He died bankrupt.

I mean look at JAKS and EVERSENDAI, Koon Yew Yin must have lost an absolute fortune in those companies. The thing about frying these companies is that, the more you buy, the harder it is to get out.

You can keep buying to support the price, but your money is just paper. Try selling and see how much you can really get out.


Choivo Capital:

Haha, did you trade on this, and make any money?



Of course, Koon Yew Yin donate money to you, why you don’t want. In addition, he also gather up all the fish for you to shoot. Its free money.

I bought early and have sold it all off. I’m only contra trading it now, make money every few ticks.

Since you do kind of know how the other contra people work, how much their cost and so how they will act.


Choivo Capital:

Well, that’s interesting, i personally didn’t do so as i don’t think i would be good at it. Investment wise, what is your philosophy and what are your investments?



Well I have a few rules when it comes to investing.

  • I only invest in Chinese owned companies, this is exclusive to Malaysia and South East Asia.
  • No GLC’s or those that survive on government contracts. Period.
  • Great industries that I can understand.
  • The founder must not be egoistical.

My largest investments are Nestle (original cost of RM8, kept topping up), Public Bank (bought at RM1 pre-split and kept topping up), Dialog ( bought in 2008 or so), Hartalega (bought in 2008 very near IPO), MFlour (bought recently near the bottom).

Overseas, I hold Visa, Netflix, IQIYI, Starbucks and a few other companies.


Choivo Capital:

Wow. My god, I feel jealous now. Hahahaha.

How did you manage to find these companies, and do you mind elaborating on your investment philosophy as well as your investments?



Well since i retired in my forties, which is 20 odd years ago, I have a bit more time to spend on this than most.

I have always been very curious about things and investing is very fun for me.

I had some experience as a banker, which helped me understand businesses and the markets. And i also love of travelling, which allowed me to have a much wider perspective.  These two things helped me quite a lot in my investing.

Why Chinese only?

Well, I don’t want to be racist, but in South East Asia, unless the company is owned by a person of Chinese descent, I don’t really see it as being competitive. Just my view. As you can probably tell, I don’t invest in India.

No GLC’s.

Why? GLC’s often are inefficient or given crutches by the government. So, they will either earn a little money only, and have corruption and leaks take up the rest.

And if you rely on the government, well, the government giveth and the government taketh away. See MYEG.

Great industries I can understand with strong prospect for growth.

Well, I am an investor that focuses on growth very strongly. I need to be able to see it clearly.


Well. Its not that easy to identify who is egoistical or no, but you can tell somewhat.

By the way, just because one is ambitious, does not mean one is egoistical.

The easiest way to see, is if the management or businessman like to do empire building, and trophy projects that don’t make monetary sense, or keep talking about how they want to be number 1.

All of which are often either equity destructive or going to kill the company at some point.


Choivo Capital:

Ok, that’s interesting, lets start with Public Bank.

This company is one that I’ve studied for some time, and I consider it one of the best bank in South East Asia.

I always find it very funny whenever people state that it has the worst IT system, while admiring its profitability.

Seemingly failing to understand that, it’s always about returns on incremental capital.

When it comes to banking, an extremely high-tech system is not needed for high returns, nor will it provide one.

Its all about not wasting money, and not doing stupid things, despite how much incentives bankers have to do stupid things.

What’s your perspective on the company?



Well back in the day, when margin loans were first introduced. Lim Tee Keong and his eldest sister were some of the biggest users of it. And every single bank had to borrow money to him for fear of insulting Genting Group. Everyone wanted Genting’s business.

Everybody thought that the two siblings are backed by their father Lim Goh Tong, nobody expected that Lim Goh Tong would let his eldest son go bankrupt.

Only one bank stayed away. Public Bank. That should tell you a lot about this company.

If you have ever noticed, every bank usually releases their annual report after Public Bank.


They want to see what they disclose this year and what is their performance, to try and make themselves look better.

They are also the only bank in Malaysia to use a system of Gratuity upon retirement.

Some of my friends who were branch managers, when they retired, they receive RM2-4 million in gratuity payment.

Since they encourage employees to stay with them forever, this incentivizes them to be responsible as it its their own money, and don’t do stupid things.

These days most banks focus on NIM. Everyone wants a fat NIM. But do note, NIM does not include provisions. Public Bank give out loans not with a focus on NIM but minimizing the provisions, and thus focusing on the real bottom line.

Even their loan book profile is different. It consists mainly of vehicle hire purchase, residential, property and shoplots. Very little of it is from corporate borrowings. I can count with my hands the number of listed companies in Malaysia they borrow to.

So, you don’t have credit risk concentrated in just a few accounts, you also don’t have these kinds of scenario where PNB needs to bail out Maybank by buying up the entire right issue of SAPURA.

When they borrow for property, the bank valuation is the lowest among the banks.

And if you notice, when they borrow for hire purchase, the don’t do proton etc at all.

Why? Because resale value is how you ensure people pay back their loans. Yes, loans in Malaysia are recourse, but good luck chasing these small loans down.

In addition, the real money in Hire Purchase Loans, is not in the rate, its in the penalty payable for early repayment. The cars they do hire purchase for, Japanese and Continental. These are the people with money and are most likely to change car every 4-5 years.

There is a rule in Malaysian loans, cannot get loan from Public Bank? Go get it from Maybank etc. They have the best loan book in the country now. Although these days Hong Leong is catching up.


Choivo Capital:

Ok, that’s interesting, what about Nestle?

This one I’m really scratching my head. All these consumer goods companies globally, are starting to have their revenue and profit drop.

The valuation of the Malaysia’s Nestle is easily triple for their counterparts overseas. Malaysian good companies tend to become, in my opinion severely overvalued.

Why are you still holding this one?

I mean, most people that I know no longer drink Milo or eat Maggi Mee regularly.



Haha for this one even my friends and relatives are asking me to sell.

Well, the first thing to note is this. You friends and family are Chinese. The real market for these is to the Malays. And this market is to an extent, somewhat addicted to the product. All the mee goreng out there use Maggi Mee.

Now on the stock price. The top 30 the shareholders are all foreign funds, not local, so there is little risk of the prices getting a beating with the new government policy to hold fewer local shares.

And this price, or overvaluation as you call it, is likely to remain, because of the fact there is no disruption to the earnings locally. If the company maintain their earnings, the valuation is likely to stay put.

Especially since the foreign funds are motivated to keep the prices up, and it does not take much money to do so.

In addition, in Malaysia, this share is viewed as if its US treasury bonds, when a crisis come, money floods into this stock, historically, it does not drop during a crisis.


Choivo Capital:

Hmm, I guess the real risk in this case is if like BAT, if the earnings take a structural hit, then the valuations and earnings will fall in tandem, giving you that RM80 to RM22 drop. I don’t really see it for Nestle.

What about Dialog?



Well, they are in the mid to downstream which I like, and that is where the real money is. Malaysia is well located for this. Company is managed very well.

And for this one, when I met the CEO, I really liked him.

He is smart, extremely driven, very humble with no ego problems. I mean you look at his car now, it’s a 2008 Porsche Cayenne. No driver, he drives his own car.

The Porsche, well, when you get rich, you will change a little, the question is how long it will take for you to get it out of your system and go back to living normally. And he’s clearly over that phase 10 years ago.

To be a billionaire and only drive a 10 year old Porsche. Pretty good.


Choivo Capital:

Hmm, ok. What about Hartalega? And why not Top Glove? What’s your perspective on the current expansions being done which should inevitably lower margins.

I’m not sure their current capacity expansion will result in a net positive to earnings (and at least 20% per annum), if margins on the gloves they are currently selling is getting compressed at the same time.



In this case, when they first listed, I could see that demand for rubber gloves will likely to be strong very strong for the next few years, it turned up to be stronger and lasted longer than i expected.

It had the benefit of being an essential item that cost very little, and Malaysia is uniquely positioned to take advantage of this.

Well, margins are always going to be compressed as a business grows and it’s a matter of ensuring that sales revenue grow faster than the margin compression.

Based on the low glove usages in China and other developing countries, I think there is still some way to go.

In addition, their new AMG Antimicrobial Glove is a best seller in Europe where it was just released.

When they get approval from FDA this year to market in the US, I think they will be a best seller there as well, as it’s the best product in the market, and this should drive the second round of growth.

Also, when it comes to Antimicrobial gloves, I don’t think if you are a hospital, you want to be going for the cheapest one, you will want the best one as long as it’s not too expensive.

Why not TOP GLOVE?

Well, I have a rule where I say I cannot invest in founders I think are egoistic.

The boss of Top Glove gives me a feeling he might have hints of that. The way he says “Number 1 Glove Producer” is a little off. The goal is not to be the number 1 glove producer, but to be the most profitable one.

They bought ASPION because, in my opinion, they just couldn’t stand HARTALEGA owning the surgical gloves segment.

And they paid a high price for it. They are now going to court to try and get back RM640 million, but I doubt they will get one cent. The due diligence is done, and you signed the agreement. Game over.

The bosses of Hartalega in my opinion is just as driven and ambitious, however, I think they are much humbler.


Choivo Capital:

Hmm, ok. I’m not sure I agree about the comments on Top Glove, but let’s continue to MFLOUR.

This one is hard for me to swallow as well, one look at the debt, I feel like fainting already. Especially since the chicken business is absolutely cut throat.



You’re not wrong in the chicken market being cut throat.

Well, for MFLOUR, I bought it recently at RM0.4X or so, along with the warrants at RM0.1X.

I’ve known the bosses for a long time and they are very humble and hardworking individuals. I expected the profits to come back since the chicken prices are adjusted.

It’s not by accident that KFC, Texas Chicken all raise prices.

Most of MFLOUR’s chickens are sold to Texas and KFC, so they don’t lack demand. The real growth however, for me is going to come from the Flour factory in Vietnam.

Vietnam is very influenced by the French, every morning they eat croissants and baguettes.

There is this dish called Banh Mi that is made using baguettes or croissants. As the country gets richer, they are going to eat more of this.

And to top it off, there is only one other competitor in Vietnam when it comes to flour. So, for me, I’m quite happy with it.


Choivo Capital:

Hmm, ok. I really don’t know how to buy looking at the debt and the other opportunities in the market, but your thesis seems ok.

What are some of the other picks you see, locally or globally?



Well, I bought NETFLIX relatively early, not for the US, which I think competition is really heating up, but for their overseas reach. The main one is India, they are number one there, and they have a strong grasp on the local content.

In India, even if the person is Harvard educated, they are surprisingly not really westernized.

The movies they watch for one reason or another must have a lot of dancing. I believe NETFLIX will dominate here, especially since I think NETFLIX can burn a lot more money than the local companies.

IQIYI is a recently listed company, the are the largest streaming service in China. “Yangxi Palace” was created by that company, billions of streams.

Losing money, but I think the future is very very bright, since like it or not, streaming will be the number one method of consuming movies and tv shows in the future, and the number one player now is likely to be the number one player, when the market decides to start making profits.

STARBUCKS, well everywhere I go, I see Starbucks All these youngsters drinking Starbucks all the time, even now, we are meeting in Starbucks. Its quite fun to visit Starbucks outlets whenever i travel overseas.

VISA, well, this is the only one along with MASTERCARD where it is accepted everywhere in the world, no matter where you are.

I remember I was meeting the CEO of UNIONPAY in Malaysia. He told me how he was the largest card services company in the world. I just pointed towards the credit card machines in the Starbucks we are meeting, and said, “That machine does not accept Unionpay”. He straight away quiet.

If you go around with only a Unionpay card, you will starve I tell you. I believe there is enough momentum in the west that is going to ensure people will be using VISA and MASTERCARD for a long long time.


Choivo Capital:

Hahaha, that is very interesting. Well, do you have any thoughts on my biggest positions, TIMECOM and RCECAP?



Well, TIMECOM is a GLC, and I don’t invest in GLC’s.


Choivo Capital:

To be honest, I think most of the companies in the KLSE are probably GLC’s by virtue of them being held by EPF etc.

Having said that, I think you will notice by the speed and level at which TIMECOM works, its very different from a GLC.

What about RCECAP?



Well, I read up on your RCE Research, and the few risk I think you might be under-pricing is this.

Lets talk about RCE CAPITAL (RCECAP)

When it comes to banks in Malaysia, the ones that survive a crisis, is the Chinese banks, like Public Bank or Hong Leong, where they have the best loan books, and the Chinese will always support their banks.

Maybank, well the Government will always support this bank. You saw that in the bailout of Sapura and thus indirectly of Maybank. CIMB maybe.

The rest of the lower tier banks, like RHB, AMBANK etc, all these banks will suffer as they need to rely on their own.

RCE is similar.

Like the tier two banks, RCE does not get the best borrowers, they get the low end B40 ones.

The managers etc, ie the best paymasters, go to Bank Rakyat. Personal loan of 4% nominal rate, on an installment basis. It’s the lowest rate in Malaysia. Then they go to MBSB and finally RCECAP.

RCECAP, they need to go and find customers, in exchange, they get to charge higher rates. Now their niche, may very well better compensated due to lack of attention, but we’ll see.

What you may be mis-pricing, is that in an all-out crisis, RCE type of borrowers will be the first level of borrowers who stop repaying. Same with all the second-tier banks in Malaysia. That NPL will spike, the question is if its priced right, and if your thesis that the B40 will not get fired even in that scenario is correct.

Now, where they pledge deposits for their loan books which are securitized. You like this as it indicates skin in game and thus their confidence in the quality of the loan book. I think you may have it terbalik.

Chances are, burnt by 2008, no investor would buy loan securitizations unless they are pledged deposits equivalent 15-20% of the bond, especially when it comes to what is essentially personal loan portfolios. And this requirement causes them to raise their standards.

Judging by the NPL drops, they probably tightened the quality. The question you need to ask is if you think it is properly priced in.


Choivo Capital:

Those are very fair points, I must admit I never considered certain risk from that perspective. Especially when it comes to the deposits pledged against borrowings.

Having said that I still consider it priced right, since I have not seen any government fire B40 civil servants ever. I would pay more attention to the privatization of the civil service and how it affects the company though.

Thank you for your time thus far, having read my articles and spoken to me, what do you consider to be my  biggest weakness investing wise.



Well, I think you seem to be very much like an accountant, with a very strong focus on the figures.

I believe you need to be more adventurous,and some things you must feel, it cannot be measured.

A lot of my ideas come from my learning as I travel and my experience that comes from trying different things. It comes from instinct and the gut.


Choivo Capital:

Haha, to certain extent, I consider that a compliment. What is a value investor but when a contrarian meets a calculator.

Having said that, being in the market so long, would you not agree that most people who try to invest via feel, adventurously or gut instinct (instead of making sure the numbers make sense), usually lose money, and a lot of it.

Would you say that the reason this did not happen in your case, is because as an ex-banker, you’ve seen a lot more and thus is much shrewder than the average individual.

In addition, listening to you go through your investments, you’re clearly someone who is in the game of pursuing the truth and not the protection of ego, and is a lot more intelligent than most.

Do you think this saved you?



Haha. Well, you are accurate in this regard.


Choivo Capital:

If I’m honest, I think the difference in our understanding when it comes to business, is because you’ve been in the industry much longer, I don’t have anywhere near the experience you have. These things just take time I suppose.

My investments are limited to what I can understand. It needs to make sense as I don’t do adventurous.

There is a quote I quite like from Chris Hadfield, on what it takes to be an astronaut. The same can be said for an investor.

“If you need adrenaline to keep you in the game that will cause your downfall. Instead what you need is measured, complete understanding of what might happen and how to mitigate the risk. You are not trying to impress anyone but stay in the game.”

The number one goal for me is to not lose money, as the gains your need to cover losses are far larger percentage wise.

When I look at the top 20 in the 2019 stock pick competition and compare it to their 2018 results.

Well, compounded, I doubt even half of then have made back the initial 100k principal.

Having said that, I do much prefer paying for earnings these days compared to one year ago. We are not liquidators after all.

For my top positions, I am paying for earnings. Its just a happy coincidence that some of them are below book. Hahaha

In any event, thanks for taking the time to meet me. I really learned a lot this time. Let me buy you coffee next time.



Haha, alright. Lets meet again sometime.




During our conversation, we spoke a lot about my other holdings, and prospective holdings, however, I am unable to share these thus far, as I may still be buying more.

We also spoke a lot about the economy and for some of these, he went quite deeply into them, however, as they are often quite disparate, and for the sake of saving time, I’m not writing them down.

I learnt so much, that given my rate, I’m the one owing him RM1,000 for the 3-4 hours. Hahaha.

I hope this was as useful to you, as writing it down was for me.



1 thought on “A conversation with a very wise Ex-Banker

  1. Thanks for sharing this interview. A lot of wisdom to absorb here. Please conduct more interviews like this and share. TQ


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