Stock Market & money related sharing

Index is breaking the all time high record! Maybe we need to thanks the hot money “created” by US, seem now already spread the effect, especially for Asia stock markets, from Hong Kong to Taiwan, Singapore, Thailand, Indonesia and Malaysia. However, you would be surprised if I tell you many investors are not making money, some even lost money in their trade. Why? And how could this happen when market is bull run? Unfortunately, this is what really happen in retail investors. School never teach how to invest like a millionaire. After all, if there's a school, I don't think there would be any millionaire teacher willing to teach those new bee how to earn their fortune in the stock market. What we could find are those half pass six teacher, so what kind of result can you expect? In fact, investment is similar to swimming. You can not and also dare not trust the advice from your friends or teacher. Furthermore, you may not know what they told is right or wrong, it

Margin account is one of the way for those qualify to borrow money against your existing stocks to buy more stocks. Different broker will establishes different margin of maintenance requirement. For example, if you deposit $20,000, you would have $50,000 of buying power. (some broker give 2.8x, which make the buying power as $56,000) You can margin up to 60% of your stock price (some time 65%), in other words, you use $20,000 of your own money and broker will loan you $30,000. If 65% of margin, then the high side you can borrow is $33,000. Some stock may have lower limit (cap price less than 1), hence the securities value will become less. Let assume we buy 10,000 shares of a stock at $5 per share and below are some of the possible scenarios. Scenario 1: Cap price 1 and stock price flag The 10,000 shares still worth $50,000 (securities value). In this case, there's no margin call as margin is 60% (money borrow $30k divide by securities value $50k), however, you lose o

Most investors would like to seek for stock tips, normally I seldom provide any. The reason is many people don't understand how to handle it, hence, many time Mr A is making money whereas Mr B is losing money though they bought the same stock, just because of the timing and experience make the different. Recently there is a stock, SP Setia which fall about 18% in share price for the last few days to close at RM3.05 last Friday. You can treat this as stock tips on how to trade it. I think this one is a good example to study and at the same time, trade it to make pocket money. First, let study what could be the reason for it share price to fall? According to some analysis, the main reason could be the foreign fund were selling due to the stock being removed from the MSCI Malaysia Index. Further add on to this is because of general election mood, many investors may stay sideline, wait and see first. Investors may also want to find out if the company turn bad? Or if th

Just attend a wedding dinner on last weekend. The decoration, very nice, the environment also nice, especially at front of the hotel door can view a nice Taiping lake! In the midst of having the food, an idea came to my mind. Guess what, every table seem to have this... Perhaps, it's time to invest into beer company... the reason, no matter economy good or not, so many people like to drink, especially in the wedding dinner, birthday party, New Year celebration or even farewell party. I don't think people will stop drinking in the next ten years, but the thing remain a concern, Malaysia is an Islamic country (some people have different opinion). Anyway, if you can worry about your investment value decrease by 20% or even 50%, then better don't invest, keep all the money in a bank is better. My next action item --> slowly accumulate Carlsberg stocks if there's correction on the stock price. .

 Recently received few query about Astro IPO (initial public offering) many seem not understand why Astro share price could fall below IPO price (something similar to Face Book IPO). In fact, no one can guarantee that IPO will always make money. Someone also make a joke, IPO seem equal to “It's Probably Over-Valued”. Why so many people chase for IPO? In fact, strike IPO is similar to strike a lottery, you wouldn't know how much going to make. However, base of past record, many IPOs were actually very successful, hence investors could make quick easy money. That's why there's always interest in IPO. In fact, for those company who opt to raise fund through IPO, there are a set of stringent guidelines that the company must follow. The Securities Commission (SC) is the body responsible to monitor the public listed company follow the rules and guidelines. Usually, there's one document call “Prospectus” the company need to issue and if you read carefully, they ha

The purpose of BC portfolio is to receive stable income (hence seldom buy or sell, and we selected the stable stocks) and at the same time making comparison against my friend's single stock position and the one who park the fund in Bank's FD. The is how we manage risk by creating a portfolio to protect our capital against choppy market. We started with RM242,000 on 19 Jun 2011, purchase only three stocks: Name Cost Price (RM) Total share Market Value (RM) Maybank 8.80 9,000 79,200.00 Maxis 5.50 14,800 81,400.00 Arreit 0.91 89,200 81,172.00 Total 241,772.00 As of  4 Oct 2012 ,  the position look like this: Name Market Price (RM) Total share Market Value (RM) Maybank 9.05 9,000 81,450.00 Maxis 7.00 14,800 103,600.00 Arreit 0.93 89,200 82,956.00 Total 268,006.00 On the income side (total dividend): Dividend sen Fr last Q 26,144.00 Maybank 6/4/12 36.00 5,328.00 Maxis 9/28/12 8.00 7,136.00 Maxis 6/29/12 8.00 7,136.00 Arreit 10/8/12 1.80 1,605.60 Ar

Last week, PM announce the latest Malaysia Budget 2013, below are some of the goodies highlight: 1. One month bonus for 1.4 million civil servants. 2. One off RM500 for household income less than RM3,000 and RM250 for single with income less than RM2,000 3. Special incentive RM200 per month for all military personnel. 4. One off RM1,000 for former member of armed force who did not receive any pension. 5. RM100 to all primary and secondary students and book voucher RM250 to all form six and tertiary students. 6. Individual income tax cut by one percent. 7. RM200 debate for aged group 21 to 30 who purchase of 3G smartphone. 8. Oil & Gas - Companies with investment activities in the refinery of petroleum products will be provided with tax allowance of 100% for the period of 10 years. So, which company will gain in terms of profit? Personally, I think all the Telco's will doing very good, then company like Dialog, SkPetro and CBIP will doing very good in next com

Today, I came across an interesting article in The Star, “Can you retire with one million?” Just click here to read the full article. According to the writer, he assume a person with 55 now, having one million in the pocket and have a life time for another 25 years (about 80 years old) He use simple math to divide 1,000,000 by 25 then divide further to come out $3,333 a month. With this, he concluded that life would be tough, hence one still need to work after 55 as $3,333 might not enough to cover the expenses. Oh no... how can the writer did not know in the world we have something call Investment. One can invest in property, stock market, bond or even business to generate income. For example, he can buy 5 or 6 houses with each value at around $200,000 and collect the rental income. (we don't talk about borrow money, but just use all the cash in his pocket) Assume each house generate $900 of net rental, with 5 or 6 houses, you can simply collect $5,400 per month. Don&#

If you want to invest in Gold, at least there are three ways. First, you buy a real Gold Bar. However, the problem is it's too heavy and difficult to move around. Another problem is you need to find ways to part it or keep it in safe place. (and to buy insurance just in case of theft protection) The other way, you can go to bank to save the Gold, they will give you password account to record down how many grams of Gold you invest. For example, you can go to local bank (Maybank, CIMB or Public Bank) to open  Gold Investment Account:  http://bursastory.blogspot.com/2012/06/maybanks-gold-investment-go-online.html The above 2 methods are mean for those who want to buy Gold for medium to long term. However, if you would like to trade Gold (Buy and Sell in short to medium term) then you may opt for SPDR Gold Share. This is similar to ETF (Exchange Trust Funds) or people call this SPDR Gold Trust, the fund which invested into Gold. For Asian, I recommend to invest in Hong Kong SPD

I always receive question from client about what to invest in. One of the simple method I always tell them, invest in “best” company, that should be the direction for all investors. Many investors get the direction wrong, then after few years, only realized they had in the wrong path. Then another question will come... how you know which company is “best”? Today, we can build a business if you want. Many business will end up losing money, in order words, to build a successful business is not easy. Stock market is a place where it provide investors a platform to buy a successful business, but you need to know the way how to pick the good company. One of the way how to pick a great company is look for company that can create value or income. Those company use fund from investors to create value to people, produce healthy product or provide service to improve quality of life. The other way to look for it, look at your personal monthly expenses, I believe cost of living i

If there's a choice, do you want to become rich or poor? Many people will say, they want to become rich! However, there are some, who think rich are selfish, so they want to remain poor. Some even have a funny thinking that if they become rich, they will need to lost something in order to exchange for rich! Many people hate their boss, because their boss is rich. Also, they think they are under pay but over work, that's why their boss become rich and rich people are all greedy! If one having this kind of thinking, then most likely he will never being rich. How can you become someone whom you actually hate? If you feel like under pay, then why don't become a boss? It make more sense to become rich and it's better to remain rich, become stronger and you can help the weaker! If one remain poor, how can they help those poor to become better? That's why when come to donation, rich people can always give, and they hope to give more next year if their business is

When I first heard of Exchange Trade Bonds (ETB), I just wonder, what's that. Luckily, Bursa gave us some explanation. According to Bursa, this is the "product" that they will introduce to all retail investors by 3rd quarter of 2012. In fact, I don't understand why make the name so complicated, it a bonds, so just call it a bonds, simple and straight forward. For retail investors, what we more interested is how to make money? Usually, bonds yield range from 3% to 4% (unless you buy a junk bonds which provide high return), buying bonds and keep till maturity, the return is just similar to Bank's FD. The question is how to find oasis in the middle of desert? However, if you understand the relation between country's economy and interest rate, then trading in bonds will become very exciting! For example, if generally people expect a country's economy will become worst, then their bond price tend to trade high in value. The reason is because investors see

Ten years ago, if anyone tell you Greece and Spain will go bankrupt, you will think he is insane. Today, this is the fact. I am not an economic expert, I don't know about their problem and also don't know how complicated is it. But I do know one simple quote,  if you want to be poor, focus on spending. If you want to be rich, focus on earning, keeping and investing the money.  Borrow money just for spend it to enjoy now and pay later is a bad idea. Rich people know how to borrow money, or use other people's money to earn the higher return. I like the investment in stock market. It's the best way to keep your money against inflation. In fact, it's the friend of inflation if you choose the right company to invest. Over the years, you will be able to see your asset grow double or triple. In fact, I would say, Stock Market is the greatest invention for people to create wealth! The beauty of stock market is the price movement. Through the up and down trend, it provide

Investors should be: Select a good quality companies, invest with reasonable price, wait for the company to grow up and enjoy the benefits of dividends or capital appreciation. The rest of the time should be "eat, drink and enjoy life". 投资者最该成为的人：选对优质公司，买进，等待公司长大，享受分红或股价向上带来的收益。其余时间，应该是 “吃喝玩乐”，享受人生。 .

Two weeks ago, I meet his wife. She told me, her husband disappear few days ago. His husband already did not pay the monthly instalment for 3 months, hence, the newly bought car was taken away by the bank. Loan shark also came to her house seeking for payment. I was never think of such a good person will left his wife. Where is love? Is love or money important? I would say, both head and leg are equally important. The fact is, love without money, you can not build home. He was indeed living hand to mouth. I think if he have proper financial knowledge, he will not face this kind of problem. Knowing what you want and what you need is really important. Buying a big new car and finance with extra loan? Don't forget, you need to pay insurance, road tax and maintainance. Why don't use the small car or take public transport or may be taxi? Another example, handphone is something we need, but iPhone is something we want. Of course, if you have really a lot of income, then go ahea

Last year, I posted inquiry to three Malaysia largest bank, say investors are looking forward to buy gold online. None of them reply my query. I thought they already forgot. Until recently, noticed that “Maybank Gold Investment Account” now enable investor to buy and sell gold online, I believe this is the first bank in Malaysia to allow investor buy and sell gold from online internet banking. They even got the special promotion till 30 June 2012, for details, read the below:  http://maybankgoforgold.com/ . The spread of buying and selling price is bit high. For example, today's Selling and Buying price are RM169.40 and RM162.28 per gram. (Gold price in today's quote USD1618/ounce) Meaning the bank will make the profit no matter the gold price up or down. For instant, if a customer buy 10 gram of gold, the bank will earn RM70++.  . This is good news from investor point of view, I will give another good mark to Maybank, thumb up!! In next few months, I expect the ot

The overall REIT portfolio are doing very good in the volatile market. We experience US market down trend which started last month, but overall, the REIT counters are flag. Below tables show the total dividend payout by Malaysia REIT for the year of 2011 and 2012. Right now, Amfirst Reit become the highest Dividend Yield stock in the market. However, there's the potential decrease of dividend payout, hence, this is not the good choice for the time being. Since REIT price is almost stable, it's better to add those REITs that with potential increase of dividend payment. I recommend Hektar, Axreit and Qcapita for those who want to increase their portfolio holdings. .

Recently, many clients would like to find out details about Gas Malaysia Berhad (GMB). After doing some research, I try to gather the information from bursa's web, below are the summary. GMB is one of the ISO certified company who operate the distribution of natural gas and liquefied Petroleum Gas to home, commercial business and industries.The company source it's natural gas from Petronas. Who is the competitor?  Only 2 company in this industry, GMB and Petronas Gas Berhad (PGB). PGB involve in distribute to customer who consume > 2 MMScfd, whereas GMB involve those customers less than 2 MMScfd. GMB can consider as one of the monopolistic business in the country. However, GMB can not simply raise the selling price, hence, it would be something similar to PBA or TENAGA upon listing. Is the company borrow a lot of money?    No gearing, meaning the company do not have any borrowing. However, the IPO is offer for sales, hence none of the proceed receive from this

Recently, I received Maybank annual reports, it's a big change. Now no more thick and heavy book, unless you ask for it. It came with thin booklet and a CD. To my surprise, the CD came with CEO presentation, you can view something like “youtube” as the CEO talk to you at front and presenting the annual report. Compare to last year, where CD came with boring PDF file, now this is big improvement! Maybank was my first investment when I was schooling at form six. In fact, last time I never did any homework. The reason I bought it last time was because it's the first bank I came to know, where I open my first Saving Account and the branch was near my house. Luckily I made the right choice, Maybank still exist today! Today, I still make Maybank as my core investment, meaning about 30 to 40% of fund park at Maybank's share. After so many years' up and down, I learnt lesson how to handle the share with profit trading. The 1997 crisis and 2008 financial crisis, bot

I noticed tend to forget the important points when reading the financial report. Hence, decided to write down important points to take note when reading the financial report. This is for my own good and at the same time can help and share with those who are interested. The last part of financial report is Cash Flow statement. No matter how good the asset, if the company cannot service its debt, the company will fall in default. From the cash flow statement, we can know if the cash is flow in or out of the company. Cash Flow statement divided into 3 sections, namely, Cash Flows from Operating, Investing and Financing. 1. Cash Flow from Operating shows the net income and any depreciation or amortization add back. 2. Cash Flow from Investing usually show negative, as the money spend to buy equipment or spend to maintain those equipment, we call them Capex or Capital Expenditures. 3. Cash Flow from Financing activities record down all the dividend payments or the company buy back