Investment Note: Mar 2014

Dear Investor,

Good Days!

Last week, I received few query from investors, seem some of them are worry about crisis in Ukraine. I told them, this is opportunity for you to buy / invest in stock market if you believe market will continue to make higher record in 2015. Usually, from the past experience, if a war really happen, Market may only down for short period of time then it will go up again, so don't fear and don't worry.

Then come the second question, what to buy? In the past, many investor like to buy MAS and AAX stock... when I ask them, why? Their answer is simple, because it already drop in price and look cheap. I would like to remind that, invest in stocks should always look at the future earning power of that company. It's no point to buy a company that you know they will continue making loses in coming quarter. (when company making loses, the stock price will go down further) Why don't we invest in company that we know for sure that the business already making profit and will continue to grow the profit in the coming year? (if you really want to invest in MAS, why don't wait till next quarter if they really return to profit, it will not too late!)

Out of stocks I recommend on last month, I particularly like Brahim as one can buy on dip and the stock price having potential to double in next few years. For those who miss my blog, you may read the below: 

Five reason why one must invest in Brahim.

Do you believe market will continue to run higher in 2015, read the below:

Six reasons why Bursa will break 2000 points in 2015.

Finally, the advice from Super Investor, buy Jtiasa:

How to become Super Investror.

That's all for now. Happy Investing!

Investment Note - Feb 2014

Dear Investor,

The market quite interesting last week, Dow (USmarket) was having a minor pull back. Our local market, Bursa, also follow the same pattern, especially the Index counters. Experience investors would welcome this kind of pull back, this is opportunity for you to make money. There are stocks on the up trend that we can invest (buy on dip) and these stocks will not follow the Index stocks.

You may want to know what's are those stocks...well, let me name you some example, they are: Supermx,Kossan, MKH, Brahim & Sona. All these stocks are on the up trend (daily chart) and you may pick up some them when the stock price dip a bit.

Some of you may wonder why buy up trend stock,why don't buy down trend stock? Buying stock on the way down is a bad practice, but you may buy the stocks after they have stop falling (the best timing is buy when a stock start to go up) Take a stock, Zhulian for example, last 2 week when it started to fall from RM5, those who invest at RM4.50 or RM4.00 or RM3.50 was not a good idea. You should buy at least when seeing the stock price stable or better still buy only when it start to go up. I hope you know what I mean. (if not sure what's down trend, just see this:http://bursastory.blogspot.com/2014/01/uptrend-and-down-trend.html)

Last, let me share with you a message from a senior investor, who is a multi-millionaire, I guess if you not sure what he mean, just follow what he recommend (Jaya Tiasa) and keep the stock for 3 years then see what will happen, if he is right, you may double your fund invested. (click here to read the full content: http://bursastory.blogspot.com/2014/02/super-investor-can-we-duplicate.html )

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Happy Investing!

Investment Note - Oct 2013

Dear Investor,

Good day! Coming month is a budget month for Malaysia, for some investor they think this is important month, as the Government might create a new blue print and set new rules for coming year or next few years. By knowing what is good for a country's economy, one can actually plan ahead. The hot topic now in GST (Good Service Tax) and investors are looking for the company that will benefit from this. However, this is just part of it, how to choose a right company for long term investment is more important.

Let think what's the purpose of investment? Last week, I meet a friend, he told me, he sold all the stocks before the General Election because he fear the price may go down... Investment is not about predict the market! Investment is about how to create wealth or increase net worth over time. If you are not sure what I mean, just see the below example:

Someone who invest 1000 shares of Public Bank 40 years ago and never sell the shares, today, his net worth will easily above 2 million, not yet include the dividend.

If you invest 1000 shares of Maybank 13 years ago and never sell it, today, your holding will value about RM60,000+.

If you invest 1000 shares of Telekom 10 years ago and never sell it, today, your holding will become 2000 shares of TMplus 2000 share of Axiata. Total holding is worth about RM25,000+.

Even 4 years ago, if you bought 100 share of Dlady at RM18 (RM1,800), today, the price for Dlady is RM45++ (RM4,500).

This is one of the method how long term investor beat the market, find the monopoly business and let the magic and power of compound interest doing their job. Don't say “I don't have the money to invest!” In fact, you don't need a lot of money to invest 1000 shares but you have a lot of time if start early! Time is good friend for monopoly business.

In recent market correction, I have added Axiata as one of my investment portfolio. My average cost was about RM6.50. I have received one time of dividend payment and going to receive another one soon. May be you will ask, what's my plan if the stock price go down below my investment cost of RM6.50? Since my plan is to invest for the next 5 to 10 years, why should I bother about the price movement every day? In fact, I do happy if the price keep falling so that I can buy more shares in next few months and just wait for it to bear fruit.

If you fear of market turn down, then don't invest. If you remember my previous email few months ago, I told one of my friend who bought Dlady 3 years ago at RM18 and he only make small profit even though Dlady's market price is RM45 today... the reason? Because he sold it when the share price start to move up because fear of choppy market price!

That's the beauty of stock market, price fluctuate! If tomorrow Axiata stock price fall below RM6.50, I will buy more. You may ask, what's so good about this company? The reason, I let you think of it. It's nothing wrong if you buy and sell stock in short term, but make sure you buy and keep 1000 share of Monopoly type business at least, and keep it in your portfolio when you plan to save money!

All right, this all for now. Happy Investing!

Investment Note - Jul 2013

Dear Investor,

Good Day! Not long ago, we just past the first half of 2013. Overall, most of the stock markets still in the happy mood, especially US, where we see Dow Index near all time high of 15,450. Thanks for the QE (or I call it printing money policy), hot money is floating every where from stocks to property.

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Now, the question to ask, when the party going to end? Or when US will stop QE? From the latest indication, seem coming December, US will going to review it. Maybe they will stop QE at 1st quarter or 2nd quarter of 2014, but again, depend on the employment and economy data. We may not know when, but at least we know the party will not going to end this year. We can follow closely the indication, perhaps when the Gold price start to go up or when their interest rate (10 year treasury rate) start to go up, then it may be the time.

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Back to Malaysia, Bursa is also doing very good, the KLCI index rises to all time high level. Making money in stock market is easy or not? It's very easy, if you know how to make use of good news and ride on it. For example, Puncak and other water related stock, when the news came out, we already know these stocks will become black horse. (but now, I am not suggest to buy this stocks, as it's already over run right now).

So, what is the next Blue Chip one can buy? I suggest, IOI and Tenaga, they going to announce good news (in fact, most of public already know) in next few months, hence, I will suggest investors try to accumulate these 2 stocks when their share price turn red. When to sell? Sell when IOI announce the date they distribute IOI Property. For Tenaga, sell when they announce getting approval to raise electric tariff.

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For those who follow my advise last month to buy CIMBC25, now it the time to see the result. You may slowly sell batch by batch in next few days when you see the high volume day. (those who want to know how to trade this stock, please refer my blog)

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Last, if you want to chase the running stock, don't chase it at high price. Try to enter when there's a pullback (the pullback must on low volume) If it’s on high volume, it means that institutional investors are selling!

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That's all for now! Happy Investing!

Investment Note - Apr 2013

Dear Investor,

Greeting! It's first week of April 2013! Almost all the world stock markets are near their high level. US Dow Index already above 14,000 points for few weeks. The recent update came from Hong Kong, where we saw Hang Seng Index fall by about 600 points last Friday, thanks for the new Bird Flu! Anyway, this is good opportunity to play around. (for local stock, glove stocks sure will become hot now, for HK, I will explain below)

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Cheap money to support the Market rally this year

Finally, for Malaysian, the long awaiting event, General Election going to happen! Many think that Bursa's Index will go down after the announcement. As usual, I always advise investors, don't predict the market, instead respect the trend and use it to our advantage. Currently, Malaysia market is extremely strong, investors can ride on "current moving stocks", especially Glove makers (usually Bird Flu happen people will buy these type of shares) and Iskandar play related to properties stocks.

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One should know that in the Market, there are stocks which you can keep for long term. There are some suitable for short term trading and some penny stocks (or I call it problematic stocks) which people like to speculate. There's nothing wrong to play with penny stock, but just be extra careful, jump out of the boat if it start leaking water, a sign of going to sink!

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Biggest listed company in Malaysia

Maybank is one of stock I like for long term. It never fail me (Last year, I recommend this in my blog when it was RM8.5x and now it's near my target RM10.10 this year). (you may read it here, from my blog). Now, I don't suggest to buy it at current price, but can keep it in your buying list for next round when market crash.

For Maybank, as long as a valuation for a stock is not overly stretched and the company's dividend raised year after year, it will likely to attract investor. Don't forget, beside EPF, now we also have PRS (private retirement scheme), which they have ample of funds need to invest. Next time, when market go down, if you want to invest in Malaysia's biggest listed company and enjoy good dividend, remember to include Maybank as your long term investment portfolio.

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CIMBC25 strategy - don't cut loss but cut profit when market up

If Maybank is for long term buy, is there any others stock to trade for short term? Yes, take advantage of current HK down trend, I suggest to accumulate CIMBC25 (it's an ETF that buy 25 Blue Chips in HK/CN) Last week, it close at 86 cents, investors can start slowly collect it. (remember, slowly, don't collect it one time) Don't fear if the price go down further. For this stock, you can average down even the price keep falling in next few weeks. When Hong Kong market rebound, 10% of return is not a problem. (Click here to see my buy & sell record)

That's all for this time, wish you doing well in investment trading. I do welcome if you have any question related to CIMBC25 or Maybank.

Investment Note - Feb 2013

Dear Investor,

 

 

For those who celebrate Chinese New Year, Gong Xi Fah Chai! The celebration is not over yet!

Almost all the stock markets in the world are near the all time high! US Dow Index just close near 14,000 points. We can see all the money stay sideline in last few months, start to move into equity (stock market).

However, there's one exception, Malaysia stock market! As all know, the General Election is approaching, many investors stay sideline for the time being... Some one even predicted if the opposition party win the election, Bursa will drop by at least 500 points! I don't know what was his intention (to scare people?), but as a mature investors, we should welcome this! How can we buy low if the market is always high? Another question, if the ruling party win the election, will the stock market going up? Ok, I don't want to touch politic issue here, this is just to let investors be prepared for the worst case, if market crash, the only worry is without bullet (money)

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Stay away from problematic stocks

Just a gentle reminder to investors, stay away from speculate stock, even they may look as if very cheap (few cents only). Why chasing low price speculation stocks is very risky? The reason is one may potentially buy and hold a problematic stock if you were to continue buy this kind of stocks. The stock sell cheap for a reason.

Market tips for now?

As of last month's, YTLPowr still under our buying list should it drop near to around RM1.51. Investors can accumulate at this level and wait for Malakoff IPO launching. SP Setia was another good buy at around RM3.00, which we managed to collect 2 months ago. I hope if general election will create the fearing factor and we can have the opportunity to collect these stocks at low price. For this month, I also put Digi into our watch list... if the price drop near RM4.60 or below, then it's a good buy, for dividend and capital gain as well.

That's all for this time, I wish you all doing well in 2013!

Personal Investment Note - Jan 2013

Dear Investor,

Happy New Year!

We have come to the year 2013, it's time to review our portfolio and plan for the coming year. US stock is performing well in the end of Dec 2012 and at beginning of 2013. Ample of hot money stay sideline last few months started to reposition their holdings, that's why most of the stock markets Index broke the highest record and it could be the start of another bull run cycle.

Back to Malaysia, Bursa reach the all time high record with Index 1690 points. Actually, many retail investors sell their holding because fear of General Election, anyway, seem foreign fund now is not afraid of this event anymore, as they need to park their fund some where.

Create a written Investment Plan if you buy for long term

In the past, I witness some investors sold their “blue chips” stocks and buy a small company's stocks (penny stocks). Many times, they just bought any stock base on rumours. I think the biggest problem faced by them was without a written investment plan. The reason to sell the Investment Grade should be, you have found a better investment option or the company's business started to go down (profit down). Never sell because of the stocks go up in price, or you expect some event going to happen (for example General Election).

Why we need an Investment Plan

If you have written down the Investment Plan, every buy / sell decision will make you think twice if the decision is base on “follow the others” or “follow your plan”. (I believe investment is not how well you do it, but how less you create a mistake) Write down the reason buy / sell a stock so that you keep track the record and create an investment lesson, as there's no better teacher than experience. Believe me, human is forgetful, if you don't write down your plan and review, few months later you tend to forgot and will repeat the same mistake! During the market swings (up or down when people become greedy or fear), it's these written down principles that will help as a guide post. Further, write down the points make one think more clearly and be more intelligent and less emotional. Unwritten investment belief tend to change without direction.

If you ask me what's my investment plan? Mine is simple, I want to create portfolio with consistent / stable income by investing into excellence business that has an expanding value, provide income and adjust for inflation. Then I will come out with action items to list down those potential companies. Anytime when the market correction occur, it's the opportunity for me!

Tips for next few weeks?

Again, as always, I don't really like to tell this, however, most investors still want to ask me if I have any tips... Well, if you want to trade for short term, then can try YTLPower. This stock will become active for next few weeks until Malakoff come with IPO. Don't chase high, buy at the pivot point. (similar to last month, when I write about SPSetia, noticed some investors not making money because of chasing high) SPSetia still good buy if fall near to RM3.00.

That's all for now, Happy Investing!