Lo Kheng Hong (LKH), a prominent investor, boldly claims that anyone, including those with only an elementary school (SD) education, can amass wealth through stock investment profits. This revelation was made at the Indonesia Stock Exchange (BEI) building in Jakarta, as quoted on Thursday (7/3).
According to Lo Kheng Hong, becoming a successful stock investor requires understanding a few key principles. For instance, paying attention to indicators such as low Price to Book Value (PBV) and Price to Earnings Ratio (PER).
"You don't need to know how to calculate a stock's price with EBITDA. People who calculate cash flow, don't buy stocks," he emphasized.
Lo Kheng Hong often uses the analogy of buying a Mercedes for the price of a Toyota Avanza when discussing investment. However, is the stock truly a hidden gem or merely cheap because nobody wants it?
There will always be reasons and considerations for investors to buy stocks that are currently incurring losses for investment purposes. This perspective may contradict your own as an investor.
At first glance, value investing is considered low-risk because the stocks we buy are already cheap. However, investment risks will always exist.
"We don't buy just because there's a cheerleader; that makes us impatient. A true investor is patient and reads financial reports properly," Lo Kheng Hong remarked on Wednesday (23/3/2022).
Lo Kheng Hong has previously stated that many investors lack patience when buying stocks. As a result, they end up like buying a cat in a sack.
In essence, Lo Kheng Hong asserts that the key to successful investing lies in understanding and being aware of what we are buying. All of this can be found in a company's financial reports.