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Showing posts from 2010

Malaysia REIT report – December 2010

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Doesn't matter if market up, down or flag, our portfolio help us generate positive return which make us sleep soundless at night. The portfolio outperform long term FD rate again for the past 6 months. We received dividend of RM4,550 half yearly. Currently we have total cash of RM4,392 on hand while total market value of our portfolio worth about RM138,845. If we were to sell all our holdings base on today's market value, we should receive cash of RM143,000, return of about 30% base on original investment amount of RM100,000 since Jun 2009. Our latest purchase on last Aug 2010, CMMT and Sunreit, gave us unrealized profit of about 12% in less than 4 months. Going forward, we do not expect to receive similar return, as the price of the REIT continue to break higher record every months. We hope to see market pull back, as this will provide us good opportunities to buy more share with lower price. For next coming quarter, we intend to add some consumer related stock, let see if

How to survive for long term investment

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Invest in stock market is similar to sailing, there's no smooth sail, we always face with storm and bad weather, hence our boat or ship is always shaky. While stock market is making it's all time high in terms of index performance, actually not many investor making all time high earning. The reason? I understand from one of my client, because he could not stand with the shaking situation and fear factor, he sold the share too early. Will you jump down from the ship before reaching the destination? We can not predict the weather and do not know when the storm going to come. Weather forecast in TV quite ofter goes wrong. Similar to stock market investment, we do not know when is the right time to buy or sell, but we can prepare for it. Always ask a question, if a stock price goes down after you buy it, what is your plan? Many people would like to ask, is tomorrow stock price will go up or down? What happen if North Korea start a WAR? If you are a short term trader, not even ne

Swimming naked

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My friend recently read a book regarding Warren Buffer, he ask me what's the meaning of the quote: " You only find out who is swimming naked when the tide goes out. " This is one of the famous quote in Warren Buffer's Letter to share holder. Few year's back, I also not seem to understand the actual meaning. When I read more books about Warren Buffer, finally I understood the whole story. The story is, when the tide is up, everything will float, good stuff, bad stuff all float very high. (Even the supper heavy pig will float as well) At this time, if I ask you to point out who is naked, it's very difficult. You can only tell when the tide goes out. In the investment world, we should try to prevent invest in "naked" company (the problematic company). Especially when tide goes high (Stock Market Index goes high), good stocks and bad stocks all move high and break the record. So do you know how to find out who is naked now? Try to find out how'

The Rich know the power of compounding

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Further to my blog of “ Invest for future ”, take the example of the tables. Let assume investor B start the investment at age 19. For first 7 years, he put $6,000 every year at an average growth rate of 10%. (7% interest plus growth) After 7 years he stop his contribution but let the Principal continue to grow at the rate of 10%. A second investor, A, start invest at age of 26 (age when B finished with his contribution) A continue to contribute $6,000 every year until age of 50. The result shows that B who made the contribution early and who make contribution for 7 years only ends up with more money than A who made the contribution at a LATER TIME with 24 years! The rich know how to use TIME and MONEY with the power of compounding to generate more wealth! That is what we always say, Start early and invest for long term. You can view my sample portfolio of how to build stable income over years: Malaysia REIT report

How to choose good stock in share market?

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Recently one of my friends asks a question, “Market is quite high now, you see the Index almost reach all time high record of 1500, do you think I should invest in stock market right now?” This is a typical question, yes; market is highly unpredictable and volatile. Let’s assume short tem stock price will move in 3 directions, up, down or unchanged. Hence, if you say stock price is high and expect it will go down, the chance for you to get it right is about 33%. Economy will grow, population will grow and the great business will grow big too. Past records show that, banking, consumer product, Energy Company, health cares are growing bigger each year. The idea is to choose the leader in these industries and invest the first 20% of your fund if you afraid too high to invest now. Ask yourself a question, "if the share price of the company you invested going down by 10% in next few weeks, would you going to buy some more?" If the answer is 'NO' or 'NOT SURE', th

Barbell Investment Style - Part 2

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Investment portfolio need balance at both side, meaning we need to buy those stock that can generate good dividend and provide capital appreciation. However, the journey for investment is not simple, usually you need at least 3 years to see the result, no pain, no gain!

Do not too emotion in Stock Market!

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Let say now you having a lump sum of fund and plan to invest in shock market. You know market is hot for quite some time, the price of many stocks already moved up, those who bought earlier have quite significant of profit. You know currently is not best time to buy a stock as correction might come any time, it just a matter of time. Hence you wait, wait and wait for correction, hopefully can invest when stock price pull down a bit. One week, two weeks and three weeks, but there’s no pull back or correction. You can not wait any longer, as the price keep on going higher. Finally you decide to buy now, hopefully can make a quick profit when the price go higher, maybe it will continue to go up for few weeks and take profit to sell it for quick money, buy back when it go down. This is very good idea, ya?, what’s a perfect plan. However, most of the time, you tend to buy at high price when the stock price is up and sell when the price go down, though sometime you earn some pocket money.

Petronas Chemicals Group Bhd - Part 2

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After compare with Dow Chemical and BASF, lets take a look the PChem financial ratio: Profit after tax: RM2,594 million Number of share ex IPO: 8,000 million EPS: 32.42 cents NTA ex IPO: RM1.97 Total Asset: RM26,824 million Gearing almost 0 ex IPO ROE is 16.45 ROA is 9.67 No growth story to tell, earning flag Dividend yield: 3% if price at RM5.05 PE is 15.6 if price at RM5.05, 16x if price at RM5.20 (compare to Saudi Basic Industries PE 14x, PTT Chemical Pcl PE 20x) What is the fair value for PChem? Normally try not predict the price, but let assume below scenario will happen: PChem with market cap of RM40 billion and become one of the top 10 on Bursa PChem carry Petronas brand, to be included into FBM KLCI Global stock market, especially Dow Chem and BASF continue the up trend Should the above happen plus the GLC effect, PChem can trade up to 20x PE. However, base on volatile index from others chemical companies, the low side can trade near 12x PE. It will be

Petronas Chemicals Group Bhd - Part 1

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Last few weeks quite busy with one stuff, Petronas Chemicals Group Bhd (PChem), I went to visit one of their factory located at Gurun. It's huge (about 1km x 1km, see picture) and nice place, the guard ask for the I.C. to exchange with a entry pass. There are 4 to 5 building (factory) inside the area, they arrange car to drop you from one building to another. Why visit PChem? Because they intend to list the company on Bursa Malaysia, some preparation job involved by the Investment Bank, hence follow the team. Who is PChem?  Do you hear about BASF Petronas Chemicals? Or Optimal Olefins (M) Sdn Bhd? Never mind, if you don't, but Petronas, everyone know in Malaysia. PChem is one of Petronas subsidiary, for purpose of listing, it combine 22 chemicals company. PChem plan to raise RM12.5 billion through IPO (biggest IPO in Malaysia history) involve issue of 2.48 billion shares. (after listing Petronas hold 69%) The price for Institutional will be fixed through book building at

Asia Top 200 best company

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According to Wall Street Journal, they choose the Asia top 200 companies base on cost efficiency, profitable and most respective business to face the global challenging. Below are some of the name appear:  Alibaba.com Ltd Infosys Technologies Ltd Samsung Electronics Co. Apple Inc Cathay Pacific Airway Ltd Singapore Airlines Ltd PT Astra International Inc. Siam Cement PCL Public Bank Bhd Jollibee Foods Corp Woolwords Ltd Taiwan Semiconductor Manufacturing Co. Again, Public Bank from Malaysia go into the list this year. So, you know which company to consider if market crash! Click here ( Invest for Long Term )  if you know to know how much Public Bank grown in past 10 years!

How to build retirement income for life?

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New economy impact - we know salary going to increase, services and goods price going to increase faster than previous year. Policy can not be changed but we can plan and take advantage of this to invest for future, especially build up retirement income. One of the way is invest in REIT. Several reasons why buy REITs: 1. Low interest rate - with current interest rate for FD around 3%, the return from REIT is better. For instant, with $10,000 invest in REIT, one can earn passive income of about $800 per year, as compare to deposit in bank to get around $300 per year. 2. Property is an appreciating asset Before you buying any REIT, ask yourself if you have holding power when market deteriorate like what we have gone through in 2008. If you have holding power and do not sell during the downturn, you will almost inevitably lose money on it. After 2008, property price did rise and stabilize. In fact, any market downturn is a good opportunity, we expect few years later similar to 2008 wil

Insider Asia Model portfolio 398 - Buy REITs

Noticed one article from Insider Asia Model, they are buying some REITs: Quote As such, we have decided to move some funds into real estate investment trusts (REITS), which offer fairly good yields on relatively low risks. We acquired 20,000 units each in AmFIRST REIT, Al-Aqar KPJ REIT and Quill Capita Trust for a total consideration of RM66,600.   To read more... Unquote This is not a good news for us, as usually those stock recommended will going up due to many people chase to buy. Below are the price for the 3 counters as of today's closing price: AmFirst REIT: RM1.18 Al Aqar REIT: RM1.15 Quill REIT:  RM1.00 Let's keep this record and see if these REITs counter going up.

Investment rule one - never lose money

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Today I randomly choose one book from my library, it's related to Warren Buffer. Chapter one - the writer say, Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.  This is the second time I read this book, felt so important and need to write down some points for future reference. Yes, never lose money in stock market, if you fail to do this, better do not invest. The question is how not to lose money? I think first step is find a company that always pay out stable dividend. Invest and plan to hold it for at least one year. If you can find a company say pay out dividend of about 8% p.a., then holding for one year at least better that FD. But why need to hold for one year, someone think they should sell high and buy low? I am not as clever as those who can find the high and sell it, so I choose second option, buy and hold good company. Since we only target those company paying consistent dividend of 7% or 8%, these company can grow 20 or 30% is not a problem. Hence,

How to earn Passive Income from Real Estate Investment Trust?

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Most of people not aware of advantages of REIT investment which cover all types of industries, high dividend yield of about 7% to 8% annually, low entry cost, support by higher corporate governance. The best is you as an investor, no need to predict or ask if tomorrow market ups or down, just think long term.  If you have FD in bank or bond as one of investment, it's advisable to move portion of fund into REIT to earn higher return. What Is Real Estate Investment Trust? A pool of money from investors is invested in properties, i.e. office building, shopping malls, warehouse ... and managed by REIT managers. (For detail of M-REIT, click here ) What REIT can offer? - advantage to invest in property market and enjoy diversify in many types of industries instead of invest in a single physical property. - maintained and managed by experience property managers, maximize the operating income of properties - ownership of high quality real estate Why invest in REIT? - liquidity - REIT c

Rotten is worst than...

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Is market down scary? No at all, it's more scary if the company become rotten. The "rotten" company is the one making loses year after year with sign of going bankrupt soon. In my earlier year of investment, I like to buy this kind of company, because of it's low price, thought can buy more with less money. Later I noticed what's the point to buy this kind of "rotten" company as the share price keep on lower and lower and is unable to recover when market up again. Usually the rotten is very hard to cue. From past experience, 10 out of 9 times, all these "rotten" company will turn bankrupt, so why invest in these type of company since there are so many others out there doing better? (Recently, another S company turn rotten and the share price drop from 70 cent to 18 cent now) Market crash is not a problem provided you invest in quality stock. We know in long run, the economy will grow and big company with good management will always grow in

Invest for long term

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It's time to receive annual report again... I like the last page of report from Public Bank: Quote If a share holder of Public Bank had bought 1000 shares in Public Bank when it was listed in 1967, and assuming the share holder had subcribed to all right issues to date and had not sold any of the Public Bank's share, he would had in the end of 2009, 135,398 shares worth RM1,529,997 based on the share price of RM11.30 at the end of 2009. In addition, he would had received a total gross dividend of RM632,643 whilst only spent capital outlay of RM48,760 for rights issues. Unquote As of 17 Sep 2010, Public Bank share price worth RM12.70, let do some calculation here: 135,398 shares: RM1,719,554 Dividend: RM 726,643 Minus Right Issues RM48,760 So, total return is RM2,397,437 for 43 years, or RM55,754 per year. The conclusion, one need to invest in good company (shareholder friendly with growing business) and invest for long term will able to see the power of compound

散户赚钱到底难不难?

每个进入股市的人,都怀揣着一个名叫“赚钱”的梦想。 实力机构想赚钱,普通个人投资者(俗称“散户”)也想赚钱 只是,我们发现,大多数的散户股民却常在赚钱的美梦里,重复着更多凄凉的赔钱故事。即便是赚到钱的散户们,也容易陷入“辛辛苦苦三五年,一朝回到解放前”的“轮回漩涡。 散户赚钱到底难不难?问题的关键到底哪里?怎么才能突破? Continue to read:  http://www.cgcheng.com/gucheng/xuexiao/11162.html

Invest for future

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Many think that they don't have any money, there's no point to investing. The truth, investing is the process of building wealth, you can start with any amount, $100, $200 or $500, the earlier the better. Do you know that what ever amount you invest per month for 7 years at 10% is the same amount you can withdraw per month for-ever without touching the principal? If you set aside $500 per month for 7 years, you can take $500 per month - forever. (as long as you able to get 10% annual return)  This is the way how to build stable monthly income!

Common Myths about Mutual Fund

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Recently noticed a lost making investment product from my father, guess what -- Mutual Fund. Invested 12 years ago with principal of $4000, today the market value is worth $1512. ( OMG, a loss of 62% ) Why invest in Mutual Fund and there are still many invest in Mutual Fund, they might not aware of common myths: 1. Fund management said for people who know nothing about investment, mutual fund is best for them. This is not true, as for the case of my father, he bought and kept it for more than 12 years but end up in lost position. One still need to learn what's fund management and how to invest in the fund than simply listen to sales agent. 2. Buy the fund and keep it for long term will profit in the end. Sales agent always tell investor to invest for long term, but the Fund never guarantee with profit not to mentioned about benefit from compound interest. ( also read the disclaimer clause, past performance never guarantee the future... ) 3. The best time to buy fund is

REIT - Better than bond and FD for capital protection

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After study the rich's portfolio, noticed that they allocate about 20% of their wealth in REIT and 30% in bonds. I would think that it's safe to divest the bond's part into REIT, spread into all types of REITs. The purpose is to further diversify the risk, a particular REIT's actually already diversify into many properties, now we just play safe by investing in all types of REITs, such as retail, residential, healthcare, office, industrial...   What happen when interest rate increase? Bond price will go down if interest rate increase. Same will apply for REIT, however, most of the time, rental will increase in every 3 to 4 years. This partially offset the negative impact of interest rate high, though cost of financing will increase. It would be a good opportunity to buy good Reit with best price.  (Actually due to inflation, most of REITs will increase in value every year, hence quite rare can buy REIT at cheap price, if so happen, it's a bonuses) Why

Millionaire's portfolio

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According to latest's world wealth report, the rich (with asset more than 1 million) had their average allocation of asset as follow:  Stock 29% Bonds 29% Cash 17% REIT 20% Others 5% The rich seem are not risk taker but rather looking for stable income. What do you think about your investment style today, perhaps we should take a look the millionaire in the mirror.

Coconut Water

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Coconut Water contains  organic compounds  possessing healthy growth promoting properties that have been known to help: Keep the body cool and at the proper temperature Orally re-hydrate your body, it is an all natural isotonic beverage Carry nutrients and oxygen to cells Naturally replenish your body's fluids after exercising Raise your metabolism Promote weight loss Boost your immune system Detoxify and fight viruses Cleanse your digestive tract Control diabetes  Low in Carbs    99% Fat Free    Low in sugars Aid your body in fighting viruses that cause the flu, herpes, and AIDS Balance your PH and reduce risk of cancer Treat kidney and urethral stones Boost poor circulation

Trader talk

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Since the end of  World Cup, the local market started to go up. Currently, the market is entering the phase of Trading stage, many investors had became traders, a sign where market move to high side. Trader is someone who try to take advantage of market movement. Trader (he is not an investor), who buy and sell shares using technical strategy, normally buy when a counter start to show bullish sign and ride on the up trend until it started to slow or at early stage of down trend. Everyday, trader will run a program (usually with certain indicator and scan by computer) to find out those counters which can be trade. Cut loss is one of the most important rule a trader follow. When everyone expect something is supposed to go up but does not, it usually will go down. There's why if your remisier or friends tell you a stock will go up because of so and so (many reasons), but they do not go up, you better run first and normally it will go down. Trader will sell the stock even face with l

Investing - think like rich

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Investing is a process of building wealth. In stock market, many think that investing is try to buy low and sell high. Those try to buy low and sell high, we call them trader (or speculator) but not investor. There's nothing wrong to buy low and sell high (be a trader), as long as you can make money, who cares,  but this is not the right concept for investor. Investing should be buying an asset or business that can generate stable income. The famous investor, Warren Buffer, became billionaire by investing in good and monopoly company. Let's take a look at local millionaire, do you see Genting or Public Bank's owner sell their business today and buy back tomorrow and sell again next week? No matter how high or low the share price, they are doing nothing with their share holding. As they know their company will keep on growing and business will expand every year, why bother about their share price. Some of my friends came and ask me to recommend some good stock for inves

Malaysia REIT report

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Our Malaysia REIT portfolio since Jun 2009 have outperformed the long term FD rate in the market. The portfolio start with $100,000, during the year, we have received dividend of $8977, represent about 8% after deducted tax. We were target only to obtain stable income of slightly more than FD, but it came to our surprised, included unrealized profit of $23,000, the return is more than 30%. If we decided to sell all the holding today, we will have the total cash of $132,000. Two new REIT listed on bursa last month, i.e. CMMT and SunREIT. We use the cash received from dividend to purchase some new shares. Though the expected dividend from these newly listed REITs are not as good as our existing holding (we expect about 7.2% return on dividend for CMMT and SunREIT) but for purpose of diversify and reduce the risk of buying too many unit in one REIT, we purchase some new shares. Since listing, CMMT done at the lowest price of RM0.975 and SunReit lowest at RM0.875. We could not buy at th

Warren Buffer's tips for investor

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1. Look at stock as part of businesses. Ask yourself "How would I feel if stock market is closing tomorrow for the next 3 years?" If i am happy owing the stock under that circumstances, i am happy with business. That frame of mind is important to investing. 2. The market is there to serve you and not to instruct you. It's not telling you whether you are right or wrong. The business result will determine it. 3. You can not precisely know what a stock is worth, so leave yourself a margin of safety. Only go into things where you could be wrong to some extend and come out OK. 4. Borrow money is most common way that smart guy go broke. 5. The stock does not know you own it. You have feelings about it, but it has no feeling about you. The stock doesn't know what you paid. People shouldn't get emotional involved with their stocks.

Road to be a millionaire

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Today we going to exploit the way how anyone can be a millionaire through investing in stock market. Similar to buying a house, one need to have down payment before start the first investment. The first thing we need to do is start saving money today. Only spend on what you need, instead of what you want - this is a way to ensure we can start to save money. What we are looking for is to pick the right investment that can generate stable income in good or bad time. In this case, stock market provide greatest flexibility for one to start with. Many investors think that stock market is risky and hard to make money. They lost confident due to lack of knowledge to choose the right stock or heard from friends' experience of loosing money in stock market. They never know that invest in stock market can become a millionaire if you choose the right stock, invest in good company with proper trading plan. What is good company? The answer is simple, the company with good profit and good mana

The REIT - how it benefit you

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Want to take the ownership of the property and participate the income generated by the property? If the answer is yes, then buying REIT could be an option, instead of buying physical asset. There are numerous advantages to own the REIT over the physical asset. One need not require large capital and labor requirement, as the job already taken care by the management of REIT. Furthermore, the fund of the trust are pooled together to buy numerous properties which provide greater diversification to offset the risk of negative impact over single property. When you buy REIT, you are essentially buying a physical asset with a long expected life span and potential for income through rental generated by the property and potential property appreciation. Since REIT require to distribute 90% of their income as dividend, meaning the holder is able to participate the profitability of the rental income. With so many way to invest your money, stock, bond, mutual fund, property, REIT and others, it&#