Thursday, October 20, 2016

The Oil Market is Bigger Than All Metal Markets Combined

Chart: The True Size of the Oil Market

Ever since the invention of the internal combustion engine, oil has been one of the most crucial commodities on Earth. Without it, modern transportation as we know it would not be possible. Industries such as aviation, aerospace, automobiles, shipping, and the military would look nothing like they do today.

Of course, as we now know, this has all come with some extreme drawbacks from an environmental perspective. And while new green technology and the lithium revolution will aid in eventually reducing the role of oil in transportation, the fact is we still use 94 million barrels per day of crude worldwide.
As a result, the energy industry continues to have huge amounts of influence on our lives. Special interest groups with a focus on energy have influence on a domestic level. Meanwhile, from a foreign policy angle, countries like Saudi Arabia and Russia wield additional geopolitical and economic power because of their natural resources. It’s even arguable that everything from the Gulf War to the more recent Middle East interventions in Libya, Syria, and Iraq have been at least partially to do with oil.
This week’s chart of the week aims to help explain the influence that oil has on countries and markets by using a very simple perspective: the size of the oil market vs. all metal markets combined.
The True Size of the Oil Market

While the amount of uses in one barrel of oil is quite incredible, we still need a mind-boggling amount of the natural resource each year to sustain consumption.

Oil production per year: 34 billion barrels (incl. other liquids)
Oil market size at current prices: $1.7 trillion per year
To consider how big this actually is, we compare the annual market sizes of all major metals and minerals that are mined throughout the world:

  • Gold: $170 billion
  • Iron: $115 billion
  • Copper: $91 billion
  • Aluminum: $90 billion
  • Zinc: $34 billion
  • Manganese: $30 billion
  • Nickel: $21 billion
  • Silver: $20 billion
  • Other metals: $67 billion (Including platinum, palladium, titanium, tin, moly, uranium, and more)

The total amount works out to $660 billion – just a tiny fraction of the size of the oil market.
Note: we focus on raw, physical materials in this analysis. We leave out things like gold futures, or alloy markets such as steel in this analysis. To get market size numbers, we used the latest price multiplied by 2015 demand in most cases. We left out the smaller markets for many other metals like bismuth, antimony, or rhodium. Exact sources can be seen in the chart itself. Oil market size includes other liquids such as lease condensate.

The Returns of Every Asset Class So Far in 2014

The Returns of Every Asset Class So Far in 2014

Wednesday, October 19, 2016

My Amazing Bursa Freebies kcchongnz

In the last four days, I have shared three articles on bonus issues, share split and free warrants in i3investors; whether these corporate exercise add value to a company, or maximizing the return of shareholders. The links are appended below:
Here again I would like to conclude what I have shared in the words of this gentleman below:
[Posted by stockraider > Oct 16, 2016 10:37 AM | Report Abuse
Actually u need to view the freebies in 3 perspective;
1. academic; thereotical No different like most university professors said.
2. Practical View bonus as positive....if your counter is undervalue, having bonus will bring up and sustain a higher value in your stock, even short and long run.
Bcos this bonus call for rerate the valuation of your stocks.
3. Practical View bonus as negative...if your counter is overvalue, having bonus, give u is chance and opportunity to usually short term it will bring up the value, thus u should take the opportunity to run fast. Bcos long run, it will come down bcos of overvalue
Raider see bonus are use as a publicity campaign tools use by companies, u need to make use of it intelligently in order to profit from it

I would like to introduce you guys this gentleman who has been following me blindly for the last few years. I am delighted to have this faithful follower in i3investor. He knows me well too, it seems.
Posted by donfollowblindly > Jul 7, 2016 03:42 PM | Report Abuse
One person I know is KC Chong. Do you have other people in mind? Perhaps should analyse whether his recommended counters has good future like what he analysed base on past.
Posted by donfollowblindly > Oct 15, 2016 10:16 PM | Report Abuse
Agree. Condemning is his motive. KC also a lot of Holland counters. Pls refer to my past posts. If he is really good he must be very rich and no need to beg people "joining his course for a fee" in his numerous blogs.
His first comment above was criticising those fundamental value practitioners that their way of investing is of no use. He has very good virtue in investing, that he claims that he don (doesn’t) follow blindly. I suggest all of you have the same thinking too, that you should never follow blindly to avoid investing in the Amsterdam Stock Exchange (AMX). He claimed that I have been investing heavily in AMX.
I have invited him to list down those stocks in AMX which I have invested many times before, but he never did that. Here came a question from him regarding my posts on corporate exercises.
[Posted by donfollowblindly > Oct 17, 2016 10:45 PM | Report Abuse
How about KC own stocks? Never give any bonus, free warrants?]
So I will take this opportunity to list down all the stocks I have shared with forumers in i3investor. I would like to thank the administration of i3investor for giving me this opportunity to dwell here since at least 5 years ago. This is like my second home.
In this 5 years, I have made a lot of comments about stocks in Bursa. It is only about three years ago that I have set up my blog within i3investor. So far I have written 241 articles with close to 3 million page views and 7402 comments for my articles. Here I will summarize those stocks which I have shared before, mostly with detail analysis and many with comprehensive reports as shown in Table 1 in the Appendix.
The focus of this article here is to provide answer to the comment above; were there any corporate exercises for those stocks I have written. What he actually meant is there was none.

Stocks written and published by kcchongnz
Those readers here who have followed me (not blindly) would have known the core principles, methodologies and strategies I used for stock selection as summarized below:
  1. Investing in a stock should be viewed as investing in a part business.
  2. Focus on return on capitals
  3. Have estimates of the value of a company, and hence the intrinsic value of its stock using a variety of methods and compare with its price
  4. Buy at a wide margin of safety
  5. Cash flows, and especially free cash flows is king
  6. Buy good companies with high return on invested capital at cheap price as measured by high earnings yield (Ebit/Enterprise value) of the Magic Formula.
  7. Focus on the downside and let the upside takes care of itself. Invert, always invert.
  8. Be a second-level thinker. If something is easy to compute and understand, it is extremely unlikely that the market will misinterpret it. Therefore, such information will not, by itself, provide evidence of mispricing.
A total of 30 stocks were found in the blog of i3investor analysed and written by meas shown in this link.
Table 1 in the Appendix summarized the return of the 30 stocks in the form of a portfolio.

Return of the stocks and portfolio
The portfolio of stocks published from 23rd January 2013 until end of 2015 returned an average of 135% in an average of about two and a half years up to date on 18th October 2016. There are 27 winners and 3 losers, or 90% success. The broad market is about flat during the same period.
There is one significant loser in Coastal Contracts which has lost 53.2% in less than 2 years, a big loss indeed. This would definite make our friend below happy as he has been harping about it numerous times.
Posted by donfollowblindly > Jun 21, 2016 10:55 PM | Report Abuse
Why no mention how Coastal Contract perform? Recommended at RM 3.27 today only RM 1.52 or loss of 53.5%.
For those who likes to follow me blindly and invested in a big way in Coastal would have lost a bundle, but that is the only big one. The other two losers are just minor at 11.1% for Tong Her and 7.2% for Pantech.
The big winners are really big with Lii Hen at 698%, Datasonic at 552%, Prestariang at 401%, SKP Resources at 387%, Latitude at 207%, Jobstreet at 300%, Pintaras at 198% and Magni at 151%. 8 out of 30 stocks, or 27% of the stocks are multi-baggers.
Investing following the core principles, methodologies and strategies of the super fundamental investors for the above portfolio has shown that it has yielded superb return, and with very low risk.
How many stocks can you find in my portfolio listed in the AMS? How about this comment?
[Posted by donfollowblindly > Oct 17, 2016 10:45 PM | Report Abuse
How about KC own stocks? Never give any bonus, free warrants?]

Corporate exercises
When I selected those shares using those strategies above, I have to say I have zero information if there would be any bonus issues and free warrants to be given. I have no privilege in those information, and I didn’t really care about if there would be any.
The outcome is, almost half of those 30 stocks above carried out some form of corporate exercises as listed in Table 2 in the appendix.
The average return of those 14 stocks which carried out corporate exercises is a whopping 206%. There were seven multi-baggers. As the stocks were chosen using the fundamental value investing discussed above, values were unlocked with the corporate exercises.
In fact, lucky investors who had capitalized the corporate exercises would have made much more if they had sold off some of the stocks at their peaks after the corporate exercises. Datasonic gained 802% at its peak at its adjusted price of RM2.08 on 24th March 2014, Lii Hen 783% at RM3.53 on 12th October 2015, Prestariang 608% at RM3.15 on 4th January 2016 and Pintaras 290% at RM4.60 on 1st September 2014. However, I was not the lucky one.
SKP Resources and Latitude, with a gain of 387% and 297% respectively, did not require any corporate exercise to become a multi-bagger.
I know someone would harp on this again,
Posted by donfollowblindly > Sep 24, 2015 10:43 PM | Report Abuse
BIMB-W & MRCB-W are some of his 2014 stock picks which still lose money until today.
In the two posts on the warrants above, I wanted to share what are the important things to look for when investing in company warrants, and how to value warrants, and how to use them as financial risk management tool. I encourage you guys to read my articles on warrants using those two warrants as example. I didn’t even discuss the business of the companies like I always do, instead just the share price movement of the underlying shares.
I see no problem if you were interested to punt a little bit on those warrants for fun by placing a very small bet in them if you wish, but not putting so much money in them until you lose your pants. I did punt a little for fun too and lost some money, but not that much.

Corporate exercise does do good for good companies in the short as well as long term as shown in those stocks I have invested. In fact, if you are a savvy investor and know how to read the balance sheet, you can see clearly if a company is able to give out bonus issues.
If you have read enough and know about event studies and understand the anomalies of over and under reaction of investors in stock market, you may capitalize those corporate exercises and make good money.
Well, you can now just follow what this gentleman says below. Not many good things are free.
Posted by donfollowblindly > Jun 23, 2016 05:09 AM | Report Abuse
Common sentence in KC blogs. If KC really can make much money he must be very rich. Why still need our fee?
If you are interested to learn about this value investing for a small fee, please contact me at

K C Chong at

Table 1: Summary of stocks

Table 2: Stocks with corporate exercises