Tuesday, December 30, 2014

Year end Closing for 2014

A friend told me, he feel very hard to make money in stock market nowsaday, expecially recent market down trend, he was too worry and cut all his holding. Oh boy, for me, I would think his strategy is totally incorrect, sorry.

If you remember my previous post, I plan to buy Pchem and Maybank during this year end Mega Sales. It's time to buy when Market on sales. As per plan, last 2 weeks, I managed to collect Pchem when it's stock price below RM5, for the whole week, there were 3 to 4 days where one can collect it at RM4.70, RM4.60 and RM4.90.

For the case of Maybank, there are even longer period for the stock to stay below RM8.80. One can have a weeks time to collect it when the stock price close at RM8.60, RM8.30, RM8.40 and RM8.70.

At the time I write this post, Pchem is trading at RM5.40 whereas Maybank trading at RM9.18. You can make a handsome profit of 10% in a short period by selling the stocks now...again, it's all depend if want to take a quick profit or continue to hold it for dividend income. For me, I may consider to sell half of holding only if the price start to go south, anyway, the plan is for mid to long term, no need to hurry. Remember, life only happen once, but history of market cycle always repeat, if you miss this cycle, there are always another cycle waiting for you. Good Luck and Happy New Year!

Monday, December 8, 2014

Time to shop in stock market?

Today, there's a big title came out in one of the local news paper, "Maybank is consider to list subsidiary of Etiqa Insurance".

Who is Etiqa Insurance? Many years ago, I have no idea about this company too. One day, I came to know this company in Maybank2u website (http://www.maybank2u.com.my/) under the "Insurance" session. The product I bought was "eMotor Takaful". The main reason is, with this, I can renew my car insurance policy via Maybank2u online and it give extra 10% discount on top of normal insurance amount (NCD) and save a lot of time. They can even renew your road Tax and deliver to your home, if you want this extra service. When time come for renew next year, all you need to do is just a few clicks!

Another best part, they will distribute the "Surplus" to you if you meet their requirement, where I don't see happen for other insurance company. I have been received RM60 to RM80 for last few years since I renew my car insurance with them. I think that's why make them to be the number 1 takaful operator in Malaysia with market share of 46.2%.

For the last few weeks, we have experience a market correction for local Bursa Stock, the year end discount is coming to town! Maybank is one of the stock in my buying list in next few months if the stock price still below RM9.00. If Maybank finally go with plan to list Etiqa Insurance, investor can expect some form of bonus, be it some extra shares or inform of cash dividend.

If you have no idea how to start, my suggestion is go to renew your car insurance with Etiqa Insurance for the next renewal to enjoy the above benefit. At the same time, you may start invest into Maybank stock, become the owner to enjoy their dividend income every year, and when time come if they decide to list the insurance company, it maybe an extra income for investors. Many brokers are neutral to this news, but personally, I think 2 listed company are better than one in terms of capital appreciation for investors, similar to today's TM & Axiata, or Public Bank & LPI.  (at the time of writing, I do hold some shares in Maybank, the above is just my personal opinion, as I don't get any benefit in whatever form and of course, Maybank do not pay me anything for writing this article)

Related post:
1. Some snippets about Maybank
2. Dividend Reinvestment Plan

Thursday, December 4, 2014

I plan to go shopping - Pchem

Year end sales is coming... I plan to go shopping, this time, not in supermarket, but in stock market. Yes, our local stock market, Bursa index has been going south from 1880 point to 1750 points at time I write this blog.

The time finally come, money has been sitting in the bank for a while without doing anything. It's the time to make them work harder by accumulate some good stocks that will generate income. As per my plan, only blue chips will come in my buying list.

What is Blue Chips means? It's the industry leader with consistent profit record, good brand name and give consistent dividend/ bonus to investors. Further, the stock must be liquidate with big cap and revenue. This is important for fund manager like us, if not, it's quite hard to buy / sell.

The trigger points for this round of sell down was caused of the down trend of WTI price, which currently quote at USD70. Meaning Oil and Gas industry facing the huge damage now, most of their stocks price drop to record low. Further, the local currency, Ringgit, also weaken against USD. Base on these points, I want to look for a company that see it's stock price correction and at the same time it's a beneficial to weaken Ringgit.

After went through some companies, I think Petronas Chemical Group (Pchem, 5183) is one of the stock in my buying. For those who want to know who is Pchem, you may refer to my previous blog:
1. Petronas Chemicals Group Bhd - Part 1
2. Petronas Chemicals Group Bhd - Part 2

Four years ago, Pchem launched their IPO (Initial Public Offering) and I went to visit their company (a very big land with many building inside) and help their staffs to open CDS account. It was a great experience as I never seem to think the company is so big, overall they have 70 over factories across Malaysia. I still remembered, on day one, the stock price open at RM5.50, with the low of RM5.10, since then, the stock price never go south, it went all the way to record high of RM6.80 and being sell down recently till the current price of around RM5.30 to RM5.40.

Without the complicated calculation, just check Pchem's EPS, currently stand at 34 cents, compare to 32 cents during IPO time. The dividend was 20 cents last year, which come as 3.70% of DY at market price of RM5.40. They are in net cash position and the revenue is quoted in USD whereas 70% of cost is quoted in USD.

 Let's make it simple again, if you can buy a business with RM4.30B four years ago and today, someone going to sell you with almost the same price, don't you think it's a good deal? Just business and the asset park at the company, after four years, even I have no idea how to value it, but I know definitely the price must be higher than four years ago, with the company still generate the similar income/ profit.

p/s: Somebody ask me, what's the fair value to enter? Well, I will stick to my original pivot point RM4.90, or make it simple, when the price near RM5.

Wednesday, November 12, 2014

Invest in growth stocks will make you rich in long term

Investment in stock market become simple if you know what's the purpose of Stock Market...

So, what's the purpose of stock market?

Those who understand and know the answer, will earn handsome profit every time opportunity arise.

The main objective of the stock market is for those companies who need funds to raise funds (not fun) from a large pool of investors so that those companies can use the funds to earn more profit. If one find this kind of company, which we call it growing stock, the owner and the investors can make a handsome profit.

Investors can buy and sell shares in stock market, some investor would search for companies that they believe the market has undervalue due to market overreacts to good and bad news. Those who invest in this kind of company when the stock price is deflated we call them value investors.

Wednesday, October 1, 2014

On 21 Jun 2013, something happen to at least 8 stocks in Bursa, the price either limit up or limit down on that day. I still remember after market closed, I receive many client's call to find out what's happening. That time, really nobody know what's the problem, but what we know after clarification from Bursa that the trade was not a mistake. After this incident, Bursa had implemented a system of 8% limit on last done price which use till today. Below the yesterday's news which disclosed all the details on what's happening on that day.

Bursa has publicly reprimanded and imposed a fine of RM100,000 on Fintan Romuald Inbaraj Nicholas (FINTAN) for trading misconduct which involved execution of trades that caused significant price fluctuation in eight (8) counters, namely STAR, JCY, BKAWAN, COASTAL, CBIP, HSPLANT, TDM and BJTOTO (8 Affected Counters) and impacted these securities closing price to hit at or near the limit up/down price on 21 June 2013.  FINTAN, who was at the material time of the breach a Salaried Dealers Representative (SDR) (cum Head of Inter-Broke Dealing team) of Kenanga Investment Bank Bhd (KIBB) at its Principal Office.

The finding of the breach and the imposition of the sanctions on FINTAN was made after taking into consideration all facts and circumstances, including that:
  1. Based on FINTANs instruction, the execution dealers of KIBBs Inter-Broke Dealing team under the charge of FINTAN had entered buy/sell orders of the 8 Affected Counters for a client as part of the clients portfolio rebalancing (in a market on close order) at prices which were significantly far away from the market price and at/near limit up or down prices for the 8 Affected Counters on 21 June 2013.
  2. The entries of these orders on 21 June 2013 had:
    1. adversely affected or impacted the Theoretical Closing Price (TCP) of the 8 Affected Counters during the Pre-Closing phase and/or the Trading At Last phase giving rise to the significant increase in the closing price of two (2) counters (of buy orders) which hit at or near limit up price and significant decrease in the closing price of six (6) counters (of sell orders) which hit at or near limit down price; and
    2. distorted the discovery of the fair price of the 8 Affected Counters.
  3. In undertaking any trading strategy and executing/instructing the execution of these orders towards fulfilling clients orders, FINTAN should have undertaken the following:-
    1. considered the effects, risks and consequences of entering orders at prices which were significantly far from the market price of the 8 Affected Counters;
    2. assessed the liquidity for each of the counters taking into account, amongst others, the magnitude of the clients orders vis-a-vis the opposing orders in the market in respect of these counters at the material time prior to/of execution of the orders; and
    3. closely monitored/ensured close monitoring of the orders entered;
FINTAN however had failed to undertake such assessment and monitoring and had unreasonably executed/instructed the execution of these orders based on, amongst others, an assumption that there was generally liquidity of counters on a rebalancing day.

CIMBC25 now rename to CIMBC50

What's happening to Hong Kong currently? This is one of the Google trend hot topic now. Today is China's National day and the protest still continue. Hopefully China will take a win win strategy soon if not both side will pay for heavy price.

So, what's that going to do with us stay outside Hong Kong here? Well, one of the stock that I did invest was Hong Kong ETF listed at Bursa here, CIMBC25. It's a nice timing that the ETF also change the name on 29 Sep 2014 to CIMBC50 and now the stocks in basket become 50 instead of 25 previously. Theoretically, by adding more stocks to the basket will make this ETF become less volatile. Hence, my strategy of making money in this ETF now need to review. I will stop trading on this ETF for the time being and monitor closely for the next 6 months to come out the final conclusion.

For those who are interested, the basket of stocks now consist below stocks:

0688.hkChina Overseas Land & Investment Ltd.
1288.hkAgricultural Bank Of China Limited
6030CITIC Securities Co Ltd
3988Bank of China
3328.hkBank of Communications Co., Ltd.
0883CNOOC Ltd
0998China CITIC Bank Corporation Limited
1339.hkPeople's Insurance Co (Group) of China
0939China Construction Bank Corporation
2628China Life Insurance Company Limited
1988China Minsheng Banking Corp Ltd
3968China Merchants Bank Co., Ltd.
0941China Mobile Ltd.
2601China Pacific Insurance (Group) Co., Ltd
0386China Petroleum & Chemical Corp
0914Anhui Conch Cement Co Ltd
1088China Shenhua Energy Company Limited
0728China Telecom Corporation Limited
0762China Unicom (Hong Kong) Limited
1398Industrial and Coml Bank of China Ltd
0857PetroChina Company Limited
2318Ping An Insurance (Grp) Co of China Ltd.
2328PICC Property & Casualty Co., Ltd.
2333Great Wall Motor Co Ltd
0700Tencent Holdings Ltd
1211BYD Company Limited
0392Beijing Enterprises Holdings Limited
1880Belle International Holdings Limited
1114Brilliance China Automotive Holding Ltd.
1766Csr Corp Ltd
1359China Cinda Asset Management Co Ltd
1898China Coal Energy Company Limited
1800China Communications Construction Co Lt
6818China Everbright Bank Co Ltd
0384China Gas Holdings Ltd
0916China Longyuan Power Group Corp Ltd
2883China Oilfield Services Limited
1186China Railway Construction Corp Limited
0390China Railway Group Ltd
1109China Resources Land Limited
0836China Resources Power Holdings Co. Ltd.
2202China Vanke Co Ltd
0489Dongfeng Motor Group Co. Ltd
6837Haitong Securities Co Ltd
1044Hengan International Group Co. Ltd.
0902Huaneng Power International Inc
0135Kunlun Energy Company Limited
0992Lenovo Group Limited
1336New China Life Insurance Co Ltd
0168Tsingtao Brewery Co Ltd

Wednesday, September 10, 2014

Not all the Reits manager do their job!

For those who follow my blog, I like to invest for productivity asset instead of invest on hopes that the price of asset changes (or we call it capital gain). Base on this basis, I like to invest into stocks that will give consistent dividend, especially REITs. Recently, I just learned that, even though we invested into Reits, it doesn't means that we can just let the management do their job and we just ignore and do nothing.

AmanahRaya Reit (5127, Arreit) is one of my top three investment in Reits portfolio. Three of them, namely, Amfirst, YTLreit and Arreit used to give dividend more or less the same for past few year. However, since the beginning of 2014, Arreit dividend was in the decrease mode. Why? There are few reason contribute to this down trend, though I have known these problem as earlier as last year, but I do nothing, as I believed the management team will take action to overcome the problem, it prove I am totally wrong today. =.=

Last year, CIMB moved from Samantan to Sentra. This caused Arreit lost a tenant at Wisma Amanah Raya Samantan. Then I thought the management will do something, at least go and find new tenant or dispose the building, but till today, the building is unoccupied.

Then came a second incident, High-5 (7136) was in big financial problem, somehow with liability of about 450 million. Bursa had announced going to delist High-5 at 10 Sep 2014 if they fail to submit the re-structure plan. Seem High-5 in deep shit now and how they going to turnaround is still a big question mark! Why
is this related to Arreit? Because High-5 is one of the tenant which contribute about 10% of Arreit's revenue. In fact, the rental was defaulted for few months already, that's why in the last few quarter come out as "impairment receivable" of nearly RM1.9 million. Again, we fail to see any action being taken.

I still remember the Arreit management raised the management fee from 0.60% to 0.75% at 2013, but the end result one year later is really below passing mark. One need to remember, the management fee was base on the Net Asset Value, which revalue every year and management get increase in salary, but share holder feel the pain as the rental income now went to their salary cost. For other Reit company, this may not be a problem, if the management able to raise the source of income higher then their management fee.

That's why I want to urge those who want to invest in Reits, keep this is mind before investing. If looking for dividend income, we should accessing the level of sustainability of Reit income. And now, if you want to invest in Arreit, think twice before take action, or at least let them settle these problem first, if not, I will guarantee you, the stock price will become lower in next quarter. (today the price is 89 cents)

Thursday, August 21, 2014

Bursas hits All Time High in Volume

Yesterday Bursa broke a history again! You know what is it? Yes, the volume hits all time high of 7.67 billion shares, to those who used to trade Singapore or Hong Kong stock exchange, this is nothing great, but to Malaysia stock exchange, Bursa, this is first time in the history.

Last few weeks, it was quite interesting in the market. There are many penny stocks (less than One Ringgit) start to move higher in stock price. Many people got excited and try to make "fun" (or fund?) in the market. Many people think it's time to make money from stock market by jump in and sell when the stock price moving up. Is that so simple?

Again, I want to warn those who think this is time to make quick money. When the volume increase to history record, if the stock price can not follow through, it could lead to correction soon. Normally, it will start the correction in few weeks time, let see if this time happen or not.

Speculate in stock market look simple, but hard to practice, history record show only 10% of investor making profit in bull run. Unless you are so sure in the top 10%, if not better sit still and become real investors. Will elaborate more in my next post.

Quote of the day, "Money never make man happy, nor will it, there's nothing in it's nature to produce happiness. The more of it one has, the more one wants." -- Benjamin Franklin.

Friday, July 18, 2014

CMMT - switching within Reit counters

There are many method to "make" money in stock market, one of the way i like to use is call "changing horse", just see below how this method work.

First, let me introduce one stock, not very popular, but with good and consistent dividend in last 4 years. The company I mean here is Capital Malls Malaysia Trust (CMMT, 5180). I have been follow up closely the company's performance for the past 2 years (together with 2 other Reit stocks) but unable to decide the entry point. (at which level to buy)

CMMT is a reit stock, currently they have 4 main properties, namely, Gurney Plaza, Sungei Wang Plaza, The Mines and East Cost Mall. Overall, the occupancy rate is about 98%. Gurney Plaza is one of the place I like to visit on week end, one of the reason, the parking place is nice and safe. (at Penang, you can find many shopping malls, but many places are dirty and smelly) They are also in the midst of discussion, potentially add Queensbay Mall (another place I used to go too) into their porfolio.

CMMT just release their quarterly financial result, generally in line with local broker's expectation and they also announced to pay half year dividend of 4.53 cents per unit with ex-date on 29 Jul. (4.35 cents in 2013 same period) Most of the broker gave their target price around RM1.60 to RM1.70 (current price at RM1.47), to me, capital gain is just a bonus, I am more interested to know if they are able to sustain consistent dividend payment in future and I bet they will, base on their past performance result.
(latest presentation on 17 Jul 2014)

Malaysia center bank just increased the interest rate last week (OPR), generally, the cost for Reits may increase and this will translate to, slightly decrease of dividend pay out per unit. However, if you can find a team of management who had show the result of good job to create and grow value for retail investors (from the above 1st image), then the increase of interest rate will have a minimum impact to dividend payment.

So, what is "changing horse" mean and how this method work? One of the Reits stock in my portfolio was Alaqar (5116) which I invested few years back. From the capital gain itself, there was at least 50% gain with current market price, the only problem, the dividend for this company never grow in past few years, and this had trigger my intention to execute the plan of "change horse" since last year. Last week, I executed my plan by selling all the Alaqar (5116) at $1.38 and buy CMMT at $1.46. Since Alaqar just paid their dividend on Mar, the next payment would be around Sep. By switching to CMMT, I can enjoy their half yearly dividend on 29 Jul, which guarantee dividend of at extra 6%, compare to if sitting still with my original holding!

Saturday, June 14, 2014

World Cup impact to stock market?

World cup just begin in 12 Jun, it's an four year once event. Recently, I receive many query from clients who want to find out what would be the impact to the stock market during this month's period?
Well, unless you are new investor, most of investors are forgetful, if they don't record down "the history" and they may not know what's actually happen 4 years ago. I use to write a note on my monthly investment status, write down the reason why I buy or sell a stock, review on monthly basis and see if I follow my plan set accordingly. Even on the month I don't trade anything, will still write down the currently market position, such as total investment value base on market price and the feeling or thinking about the market condition on that time.
I can tell you, "World Cup" actually have to major impact to the stock market, if the market trend is on the way up, it will still on it's way except slow a bit during the month. I have checked all my record notes 4 years ago, 8 years ago and 12 years ago, almost all show the same result. That's for the "note book" if not, how can I possible to remember something happen 12 years ago?
Over these few years, I noticed my purpose or "objective" never change, I write down that wording on my first page of note book if I change to new one. My purpose of investment wording is very simple, it's "To create a consistent and stable income by invest in five start business". In fact, I learn something from the football game as well. In foot ball game we have a fix goal post, then every one will know their target or the purpose is the fix goal post. (lucky is fix one, not a moving goal post).
So investing in stock market is akin entering a football field, we need to flexible and change the strategy according to the conditions. We may have fighter/ striker, defender in mid field and goal keeper. Sometime we need to play defensive by holding more cash, sometime we need to be more offensive by turning the cash into more stocks. Anyway, since my purpose is for consistent income, hence, more than 50% of investment are in Reits. This will ensure that I have a sound sleep at night and no need to worry much about market condition, how about you?

Thursday, June 12, 2014

It has been quite sometime I have not write anything on this blog. Last Sat I attend a seminar talk, the title is related to making money in stock market. I think it's good for me to share some point here.

According to one of the speaker, the future star company that will give you profit is not plantation or property stock anymore. He think the idea that going to produce something new and sell to the rest of the world will make the nation rich. That's why one of the Obama's adgenda is to make a “change” by producing something new to the market.

Whereas another speaker recommend few potential stocks. The first one he recommended was ESC. It's a company who distribute computer (or ICT) and smart phone. With dividend per share of 5 cents, many thought the company is not attractive. The company is cash rich with EPS of 46 cents and could potentially give bonus issue as per history record shown they actually gave bonus issue few years ago. The only draw back is the profit margin very slim, however, this could mean the high entry barrier. Investor can research for Asus Zenphone which start to distribute by end of April and Lenovo product, if the selling continue to generate income, then the next quarter's profit will be good.

Opensys is another company on his list. According to the speaker, the company will continue to grow it's profit as the coming year will see most of the bank going to upgrade or change the ATM machine from normal to the latest 2 in 1 machine. (cash and ATM) How much profit going to generate, we don't know, but one thing for sure is the profit going to break record high, so do you think the stock price going to remain?

Another company, GDEX also on his list. The main reason is Singapore Post Ltd hold 25% of this company, and recently, Alibaba also become one of the major share holder for Singapore Post. Then people start to imagine how Alibaba going to bring more business for Gdex. Anyway, this company surely going to make money in next few years once the internet business become popular in this region.

My opinion, investment is long term process, hence, we need to find the company having some sort of monopoly and the best appear internationally , in this case, seem Gdex is one of the potential company in next few years if they successfully enter into Indonesia, one of the biggest population in this region.

Wednesday, April 16, 2014

Is it now a good time to buy MAS (3786) - privatised soon?

Some people say, when the stock price fall, it's the opportunity to invest in that stock. This statement is half true, the reason, it's not simply any stock may consider good stock to invest.

One example, if 5 years ago, a investor invest in MAS (Malaysia Airline System Bhd 3786.kl), after 2 right issues, he still making a lose of 67.47%.

On the other hand, if a investors choose a "five star" solid company to invest, for example, Public Bank (1295.kl), his total return in 5 years is 159.50%. Refer to my blog, how to become a millionaire by just invest into one stock and keep for 30 years!

Now, come a question from an investor. He ask, is now good time to Invest into MAS (3786.kl) since MAS having a "big problem"? If you are a teacher and someone ask, who will be the top 3 student in the class for this coming year? Guess what's the answer? I think you just need to refer to last 3 years' record, very high percentage, the top three students will remain the top 3 this year. (unless something unusual happen)  Just share the below interesting article: Is MAS worth a buy now?

Today, Maybank Investment bank came out another report, what if MAS is privatized? The report suggest that MAS become private and to list other profitable units as standalone. Then the question is, what will investor get to invest in MAS?

My personal view, no harm to put some money in MAS at this moment since there could be a spark in stock price. However, when the next quarterly report coming out, be prepared for the stock price to turn down again!

Saturday, April 5, 2014

Doing Good to Support Those Who Need it!

It come the time to pay income tax for those Malaysian who are eligible. I know, there are many people out there may not agree if I say paying tax is your responsibility. After all, I think the system is fair, if you are poor (income below $2500), no need to pay income tax. Perhaps I should congratulate those eligible as taxpayer, you become taxpayer because your income already reach certain level. The higher your income, the higher your contribution. Let accept the fact that we need to pay tax in most of the countries, unless you migrate to country like Brunei, where all residents are rich including the Government.

We are the one who control the way how to think, don't let the mind full of negative thinking that paying tax is a lose for you. Or thinking that government is sucking your blood? For those stay at apartment, we require to pay maintenance fee in order for the management to operate smoothly. Similar for a country, we need someone to take care of the daily operation job, to clean up or maintain the road, run the school, to have a police team to take care of residents needs and many more. In fact, I would think that as a taxpayer, it is doing for your own good. Just imagine, you are actually support the building of school, hospital, road and even paying the government servants salary.

Some people may think that they lose out (the money) by doing so. Yes, as a taxpayer, you actually support certain group of people, who need help. They may not as rich as you are, so they don't need to pay tax. You (the taxpayer) are the one who support this group of people, don't you feel proud if one day they success in their life? You are one of those who contribute to their success story.

What's the benefit by doing so? Don't ask...Just imagine we are living in a society that come with cycle, we need to support each other. You work for a company because the company need the employee and you need the company in order to earn a living. The money is similar to rain, it's out there stay ready for those who know the way how to take it, there are million or even billion of it. Many already learn the way how to earn it, but no one can take away the money with them when they leave this world.

It's similar to donation, there's no question of gain or lose. What you give, the universe will return it to you in the bigger form. When we do good to someone, we are actually create a good condition for us to success in life.

We can apply the same theory in stock market. Just select a few companies that the business actually contribute to the society's need. Time come when some bad news occur and people are fearful to buy the stocks, we just doing good to buy and hold. Don't afraid if we may lose the money. One day, when the market conditions turn good, everybody will chase the stock again. It's time for us to do good by selling it to those who want to buy it! Opportunities is everywhere, it's up to you how to think it or take it!

Wednesday, March 5, 2014

Five Reason why invest in Brahim

In my last email, one of the stock I wrote was Brahim (9474.kl). Since I received few query about this company, I think it's good for me to tell some story.

Five years ago, there was a company name Tamadam, it's was not famous and only few people want to invest it stock, as the earning/ profit of the company was suck! However, this change after 2008, when the company changed direction and rename it as Brahim.

  Since then, the company bought "LSG Sky Chefs Holdings" and turn itself became the monopoly business - the world's largest halal fight kitchen. Currently, it able to produce about 60,000 fight halal meal daily, with MAS as their main customer. Beside MAS, it also provide the similar service to other 35 Airlines. At the LCCT, it also operate two restaurant under name of Taste of Asia and Cafe Expresso. Assume 1 billion Muslim worldwide travel within these Airlines, for Brahim to grow 20% a year is not a problem.

  Brahim will start the sugar operation in 2015, it all start when the company acquired holding of Admuda Sdn Bhd. The licence for this operation come with period of 38 years. So, what's so special about this business? The management already sign agreement with TRR from Thailand to supply raw sugar at very low cost of 16.5 cents per pound. Since the cost is cheaper than market price for other place in Malaysia, of course the profit will better than others. This will contribute about 35% of Brahim's revenue on 2015.

  With 2014 as visit Malaysia year, visitor or tourists come to this region is expected to increase. I don't think it's hard for Brahim to double it's profit. Further with completion of new KLIA2, 10% increase of passenger and more new Airlines added, for Brahim's earning to compound by 20% per year is also not a problem.

  Brahim also have a strong political connection, with Datuk Ibrahim Ahmad Badawi as major share holder and Executive Chairman, the company will become "Boleh" and no problem in Malaysia Business world. Don't need to worry, unless you see something happen in news paper, Ops! Suddenly Datuk sell the company's share!

  Brahim got the blessing from the Government, Tabung Haji and Felda as well, especially making the country become hub for halal Islamic consumer products and Islamic centre halal food and many more... don't need to write further...

  Finally, I use the word from Warren Buffet, "Invest for productivity Asset". If one belief Brahim can grow at 20% per year for the next 5 years, meaning in next 4 to 5 years, the profit will double. Do you think the "share price" will still same as today?  With current market price of RM2.30, investor who believe the story can buy on dip and keep the stocks for next few years. For those who like to trade (or I call it speculate), try to buy 2 unit for each trade and if the stock going up, trade only 1 unit and let the other unit keep for 2 years to see the result. If the story become true, you will double your fund. Good Luck!

Friday, February 14, 2014


I received a lot of email every day, one of it, draw my attention and I think it's good to share with reader this one, below the content, enjoy reading:

I am going to stick my neck out here and making a gutsy speculation that KLCI will break above 2,000 level, two years from now. Yes, seriously as early as December 2015.

While that might sound crazy (KLCI is still struggling with 1800 this week), let me humbly justify with SIX undisputable reasons why Bursa will hit 2,000 magic numbers.

REASON 1 : Subprime Crisis Is Over. Solid USA & European Economies.

The USA economy is in its best performance since the depths of the financial recession in 2008. Bloomberg consensus expect USA to post solid economic growth of more than 3% through 2016 and 6% unemployment rate by end 2014, the best rate in five years. The worst is also over for Europe. Europe especially the PIGS (Portugal, Ireland, Greece and Spain) had an extremely severe reaction to the 2008 financial panic due to sovereign debt but as last quarter 2013 their economies are no longer shrinking and in fact are making a modest incremental economic growth since 2008. Both the USA and Europe are Malaysia largest trading partner and represents important sources of demand for goods from every other region. Solid economic recovery in the USA and Europe suggest stronger exports, higher corporate earnings and of course higher Bursa price.

REASON 2 : Average KLCI Annual Gains Since 1977 Is 30%

Look and check this out on Bloomberg, KLCI has easily gained 135% since 2008 and a total of 2015% since 1977 (meaning average of 26% per year). So when you start to look at a 26% price gain per year, and you add in Bursa average of 4% dividends, you are talking about a 30% return average every years. 2000 magic numbers will only represent a cheap 5% gain for KLCI per year from here. Now don’t tell me KLCI hitting 2000 psycho level is a big deal.

REASON 3 : Improved External + Cheap Valuation = More Foreign Inflows.

Fundamentally speaking, the remarkable fact is that even after this incredible 2008-2013 run-up the FBMKLCI index is only selling at 15.5 times estimated 2014 earnings. Reasonable price, at least compared to the super glory time in 1990-1994 where KLCI valuation is 40 times! Remember, I haven’t talk about the foreign inflow which now stand at three years low. S&P 500 companies alone are sitting on USD3 trillion in cash equivalents. Assuming 1% of inflow will inject extra RM100bil per year into Bursa equity. And that could be another reason the market will continue to rise.

REASON 4 : Huge Untapped Liquidity. Millions Of Retailers Are Yet To Jump.

Secondly, only 0.4% of Malaysian are currently actively invested in the market (based on 100,000 active retail investors and 28 million Malaysian population as at Dec 2013). Headlines speak to the fact that as the market advanced, more money is moving back into equities. And that is true. And don’t forget, as at end last year, we have RM326 billion funds invested in unit trust which will plough back into Bursa Malaysia. So given this untapped liquidity, I can easily bet there appears to be an imminent euphoria here in the Malaysia market especially when KLCI broke above 1900 this year.

REASON 5 : Current Bull Is Still Young

2014 should be the sixth year of the bull run which started since 2009. Well, since 1977, the average duration of a Malaysian bull market is 9.8 years, and the average return is 275%. We should understand the bull momentum gradually became stronger as the bull market continued year after year, and normally grow exponentially in the last five years. This bull starting in October 2008 has not even matched that average. It is now only 5.5 years old running with a return of 135%. Meaning we have at least another 4.3 years (till July 2019) and further 140% upside to whack

REASON 6 : Retail Traders Are Roaring

Last but not least, I am impressed by looking at the tiger attitude of retail traders especially the younger ones. Out of nowhere, I see thousands of retail investors from colourful background (engineers, teachers, MLM product owners to idle housewives) fully embraced 2013 bull market, ignoring any threat from the hottest 2013 Malaysia general election and chasing stocks like there is no tomorrow. Trading gallery now is full to the brim and training seminar is packed like a world class soccer match. Buying into speculatively unknown and underperforming names such as Tiger, Palette, Nicorp, Ingenco, Winsun, AMedia & Luster. This strong retail trend should signal more good times to come. I just can’t wait for the last bull stage in 2019 where taxi drivers, mamak staller and even house maids to jump and buy Iris, Sumatec and KNM. (Sam: All through internet trading)

I Rest My Case.


Sunday, February 9, 2014

Super Investor - can we duplicate?

I am very agreed with one of the senior investor, saying that "investing" is something quite difficult to teach someone, be it your spouse, friend or relative, if they don't have "get rich seed" planted in their mind.
I like one point he call to buy a stock Jaya Tiasa (currently RM2.30) and keep for 3 to 5 years to see if he is right or wrong. If he's right, you will double your fund, if wrong, you will still gain some experience. Enjoy reading the full content below:  (from http://klse.i3investor.com/blogs/koonyewyinblog/45867.jsp)

The last time I published ‘How to become a super investor?’ I received more than 200 commentaries. Of course, most of the commentaries are good, but a few are really bad and insulting. In fact, one doubted my sincerity and accused me of trying to promote Jaya Tiasa. Fortunately or unfortunately, Jaya Tiasa did go up by about 20%, soon after the publication of my article. It went up too fast and not sustainable. As expected, it is making a healthy correction.
In view of this situation, I am obliged to write this article and also I genuinely wish to share my knowledge with people who are interested in share investment.   
For a long time, I have been trying to teach my wife, close relatives and friends to follow what I did but all of them could not emulate my performance or achievement. I think the reason is that to be a super investor your brain has to be wired differently when you are young. It is a nature built into your brain which cannot be nurtured. By the time you are an adult, either you have it or you don’t have it.
For a start, let me define what is a super investor? To qualify as a super investor, you must have a long term track record of making more than 20% per year. Warren Buffet has been able to achieve about 22% per year over the last 20 or more years. Using the empirical formula of 72; when 72 is divided by the rate of return the answer is the number of years for you to double your capital. In Warren’s case, he can double his capital in 72 divided by 22 = 3.3 years. That means $1 will become $2 in 3.3 years and $2 will become $4 in 6.6 years and $4 will become $8 in 9.9 years. At 22% return pa, Warren can turn $1 to $8 in about 10 years.
How many of us can achieve more than 20% return per year in the last 10 or more years?      
To test the putting is in the eating. In retrospective, did you make a huge amount during the Y2K computer crisis when MPI and Unisem went above Rm 40 per share? Globtronics went up from about Rm 2.00 to above Rm 20.00 in about 18 months.
Did you make much money when CPO went above Rm 4,000 per ton a few years ago?
Did you make a killing when all the rubber glove shares shot through the roof due to the HINI fear about 3 or 4 years ago? Supermax went up from Rm 1.00 to Rm 6.50 in 18 months.
Did you buy SOP when it was selling about Rm 2.50 about 3 years ago? SOP went above Rm 6.50 per share recently.
If you did not make much money when the above mentioned opportunities came, you can only be a mediocre investor and you have no hope to be a super investor.
Looking forward, do you dare to buy Jaya Tiasa when it is not showing much profit currently and the share price has been depressed for quite a long time? Most fund managers are not interested to own Jaya Tiasa. Can you see that it is really undervalued and it has tremendous profit growth prospect?
About 3 years ago, Sarawak Oil Palm (SOP) was selling about Rm 2.50 per share because most of their oil palms were young. As a result, the company was not showing much profit. For the same reason, Jaya Tiasa is now showing poor profit. Most of the Fund Managers do not want to own it. But, do you have the patience to own it and wait for a few years to maximize your profit? I am obliged to tell you that Jaya Tiasa is my major investment holdings.    
I can tell you that very few of you can achieve above 20% return per year over a long period of time and if you spend enough time studying investors like Charlie Munger, Warren Buffett and other famous investors, you will understand what I mean.  
I know that everyone reading this article is exceedingly intelligent and you have all worked hard to get where you are. You are smart and experienced. And yet, there is little likelihood of anyone here becoming a great investor. You all have a lot of advantages over normal ordinary investors, and yet you have almost no chance of standing out from the crowd over a long period of time. 
The reason is that it does not much matter what your IQ is, or how many books or magazines or newspapers you have read, or how much experience you have, or will have later in your career. These are things that many people have and yet very few can end up compounding at 20% or more  over their careers. 
I know this is a controversial thing to say and I do not want to offend anyone. On the bright side, although most of you will not be able to compound money at 20% for your entire career, a lot of you will turn out to be good, above average investors because you can learn to be an above-average investor. You can learn to do well enough, if you are smart and hard working. You can make millions without being a great investor. You can learn to outperform the averages by a couple points a year through hard work and an above- average IQ and a lot of study. So there is no reason to be discouraged by what I am saying today. You can have a really successful, lucrative career even if you are not the next Warren Buffett.
Going to the best business schools and reading every book or article ever written on investing would not make you a super investor. Neither will years of experience. If book knowledge and long experience will make you a multi- millionaire, then all the Professors in finance, all the old fund managers and old people who have been investing for decades, would be multi-millionaires.
So what are the sources of competitive advantage for an investor?  They have to do with psychology, and psychology is hard wired into your brain. It is a part of you. You cannot do much to change it even if you read a lot of books on the subject.  
After having said all these discouraging words, I think some of you who can master the following traits or qualities will have a better chance to become a successful investor. 

Trait 1. The ability to buy stocks while others are panicking and sell stocks while others are euphoric. In 1983 when China wanted to take back Hong Kong, the stock market crashed. Did you dare to buy Hong Kong shares knowing the risk when the communists took over the control Hong Kong?  
Everyone thinks they can do this, but then when the market crashed on October 19, 1987, almost no one had the stomach to buy. When the year 1999 came around and the market was going up almost every day, you could not bring yourself to sell because if you did, you might fall behind your peers.

Trait 2. A great investor is one who is obsessive about playing the game and wanting to win. These people do not just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk.

Trait 3. A good investor is the willingness to learn from past mistakes or to admit that he or she has bought the wrong share. It is so hard for people to recognize their own mistakes and sell the bad share which they bought at a higher price. Most people would much rather just move on and ignore the dumb things they have done in the past. But if you ignore mistakes without fully analyzing them, you will undoubtedly make a similar mistake later in your career. In fact, even if you do analyze them it is not easy to avoid repeating the same mistakes. 

Trait 4. A fourth trait is an inherent sense of risk based on common sense. You must have the common sense to realize the risk of buying any share which has gone up a lot and when all the analysts are recommending buy. No share can go up indefinitely for whatever reason. Quite often you might be tempted to fall in love with your purchase because it has been going up and up. You are so proud of your pick and refuse to sell it. Remember your ego can skew your judgment.  
Trait 5: Great investors have confidence in their own convictions and stick with them, even when facing criticism. Buffett never get into the dot-com mania and he was being criticized publicly for ignoring technology stocks. Eventually he was proven right. Unlike Buffet, we small investors can get in and out quickly and make some profit.

Besides confidence, you must have patience to wait to buy when it is has established a base and not buy when it has shot up due to some exciting hot news.  

Trait 6. It is the ability to think clearly. There are a lot of people who have genius IQs who cannot think clearly, though they can figure out bond or option pricing in their heads. I have met a lot of smart people in my life time but very few of them can come up with an inventive way of looking at a problem.
As you know, there are so many criteria to consider in share selection and invariably all the professionals will consider the current profit is most important. They do not look at the future profit growth prospect of the share. They do not look at the company and the industry like a business man or an entrepreneur.

Again I have to use Jaya Tiasa as an example to explain this important point of making super return. You only have to have the elementary knowledge of arithmetic to calculate that JT will almost double its fresh fruits bunches (FFB) production in 3 years. Even if the CPO price remains unchanged, its profit from its oil palm plantation will surely double.

Moreover, JT has about 2,500 sq km of forest to supply all the raw material for its plywood and timber business. Surely any one with eyes should be able to see the huge forest ( 50 km X 50 km approximately) which is the competitive advantage it has over all the manufacturers in China, Taiwan, Japan, India and in any other countries. Yet all the professional fund managers cannot see the forest as the competitive advantage JT has over other competitors.

As Warren Buffet often say that in the competitive world of doing business, all your competitors are constantly trying to attack you and you must build a moat around you to protect yourself. Unfortunately, in the Malaysian stock market, we do not have stocks like Coco Cola, Gillett Razors or Mac Donald which have the market competitive advantage.

Trait 7. Finally the most important, and rarest, trait of all is the ability to live through volatility without changing your investment thought process. This is almost impossible for most people to do; when the chips are down they have a terrible time not getting themselves to average down or to put any money into stocks at all when the market is going down. People do not like short- term pain even if it would result in better long-term results. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. But most people just cannot see it that way; their brains would not let them. Their panic instinct steps in and shuts down the normal brain function.

Conclusion: I must realize the risk I am taking in writing this article. People will judge me and they will laugh at me if I am wrong in betting Jaya Tiasa so heavily. I still have some SOP which I have bought when it was cheaper and I sold a large portion to buy JT.  I also have Mudajaya,  Kulim,  and smaller amount of Symphony Life, Success Transformer.

Only time will tell whether I am right or wrong. Nevertheless, my intention is honorable and altruistic. I also believe I have some special knowledge which will help you make more money from the stock market.