Investment Idea - April 2012

Greeting! We have another good month, US stock market is making high record. Malaysia Market, KLCI also record all time high of 1600 point! While there are many who believe “global economic collapse”, we might need to think “the sky really is falling” or “the sky is in danger of falling”.

I always like to say, “Do Not Predict the Market”. Predict the market is wasting your time, as nobody can actually predict it. What we need to do is find out the trend and ride on it. The trend could be stock price trend or company's profit trend. I like the profit trend of the company, especially the earning trend which keep on increasing every year.

While most people like to save Money or buy property, I prefer to save the “Investment Grade Stock” and I suggest you to do so. In the long run, if you “save” the right stock, you can see the money double in few years. One stock that I have ask you to buy two years ago already double in price and other few stocks also grow about 60% in last 2 years.

Now, you may ask, what's the stock you recommend to buy? My answer is simple, look for plantation stock. The logic is, on last December, CPO price was about RM3,000/ton, currently CPO is around RM3,500/ton. Hence, plantation stock will doing very good in next three months. (however, plantation stock is cyclical stocks, once the CPO price start to go down, you know will need to decide what to do!)

Market is created for you to make money! If you like to play short term with speculate stock, remember to use trading plan, you should never try to “save” the speculate stock if the price fall below your buying price. Cut lose with small amount (usually 7 to8%) is a wise move to protect the capital. If you lose the capital, it's very hard to trade anymore. Also, only trade the stock with trend in the move. Once the trade is moving down, cut lose, take a rest and wait for the trend to move up again.

Let your winning trades run and limit your losses. 

Remember, never let your loses grow bigger, but let your winner grow bigger if possible.

Investment Idea - Mar 2012

Time is running fast! Here come March 2012. How's the market doing?

Very good.... this is the only answer when you see NYSE, Hong Kong, Singapore stock market, almost all maintain at their historical high level.

While many investors still worry about the high oil price and Europe problem, there seem to be no impact to many of the stock markets. This is the indicator that the market almost discounted all the bad news and there are ample of hot money flying around.

Local stock market, right now all the funds are waiting for the Felda to be listed. This is the must have stock to many fund managers as this is the largest plantation stock in the world. Hence, you will see many GLC stocks moving high now and in the next few weeks the rotation play will going to happen.

While waiting for all these thing going to happen, we have one breaking news from Taiwan. "Bird Flu" is coming to town again, so you know, if history going to repeat, the glove sector will move. So, we expect Harta, Supermx, TopGlove and Kossan  and few others going to move in this cycle, don't miss the party.

That's all for now. Happy Investing!

Investment Idea - Feb 2012

Good Day! We are now at the 2 ^nd month of 2012. The current market position, all short term, mid term and long term still showing position up trend for US and similar to all Asia stock market, including Malaysia. So, do not short the market, though we know one day it will crash after go up very high, but now is not the time yet!

Market is unpredictable, so don't predict, trade according to the trend. There are a lot of company stock moving high right now, you can enjoy to ride on it but remember to run fast when the party end.

Which company do you want to invest if there's 2 option:

1. Company's earning is unpredictable, some time make profit, certain time report lost
2. Company with stable earning and profit is growing

If you choose the 1 ^st one, be prepared to face the volatile share price. I prefer the 2 ^nd one if plan for long term with condition the company still can survive after 10 years. F&N is one of my favorite in this case.

As expected, F&N was badly hurt by Thailand flood last year follow by absent of Coca-Cola's sale. Last week's quarterly result already show the sign of slowness. I expect the share price will go down further... this is good opportunity for long term investors.

So the question now is how much F&N fair value after the lost of Coca-Cola? Since the profit decrease of 17% to 20%, the earning will fall back to one / two year's ago... in other words, let refer to what's the price at that time. One and half year ago, it was trade between 14.++ to 15.++. so make your own decision if you want to buy or not should the price appear at this range in next few weeks.

Investment Idea - Jan 2012

After few months sentiment play on Europe crisis, almost all the world's stock market still doing very good at the end of 2011. We have yet to see weakness in the up trend. This is the indication that market still having ample of hot money. Market will only reverse if it can not break the previous high record. Coming to the month of January, we will see a lot of fund manager reposition their holding, hence, market will remain active.

As usual, we always insist, DO NOT predict the market, as no one can tell what going to happen next. Just like we don't know if later it going to rain or not, but this will not stop us from going out, as long as we plan and take precautions step. Cold wind and dark clouds are the sign of rain going to come, it may or may not rain.

We always have 3 type of trend for a stock, up, down or side way. As I have mentioned, as trader, we need to know the trend and trade according to trend. Choose the up trend stock will increase the chances of winning.

For long term investor, 10% of yearly return is not a problem, you may visit my below blog for latest information on REITs:

Malaysia REIT Report - Dec 2011

Happy Investing! 

Investment Idea - Dec 2011

It's the final month of 2011, US stock market holding steady in the midst of “waiting” for Europe's problem to be solved. At least there's light in the end of turner, last week, Central Banks (The Fed, the Bank of Canada, Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank) came to Rescue … all agreed to lower the pricing temporary USD liquidity swap arrangements by .50 basis points and IMF also raised their hand. What's this mean? Never mind if you feel too complicated, but one thing for sure... There are plenty of Hot Money on the way , say hello to Inflation ...

Is the market going to die? No... as long as there's hot money, we can expect market very active for next few weeks. Inflation will happen, faster than year before, it doesn't matter if you invest or not. Through the stock market, we try to make inflation as our friend, especially if you know how to save “Shares” instead of save money.

However, not all the stocks can be “Saved”, some of the stocks are mean for Trading only, (buy and sell) especially the Hot stocks and Penny stocks. When the up trend just start, you may jump in, when the trend is about to reverse, sell and hold cash is important. Trading in these type of stocks, investor need to have a proper trading plan with risk management, set the cut lose and take profit level before trading.

We like the volatile market (up and down), each time when the market moving down, it's your chance to make money. Among the trading stock, UEMLand, MRCB & Genm had make us earn few rounds of profit in last 3 months. I am waiting to sell these 3 counters next week if they can not go up further. I like Genting & Genm very much , as they are adding new customers (New York Casino & London Casino), the new machine of making money starting from Nov 2011. Any market correction is an opportunity to buy these stocks and wait to harvest when market up again! You can “Saved” it or trade it, hence, it's suitable for long term (at least for next year) and short term investor as well.

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Investment Idea - Nov 2011

After down for nearly 2 months, US stock market currently find support, at least not going down but see the light of moving up again. Is the problem in Europe solved? Not yet! So, why the market up? Hot money... they need to invest some where. Anyway, don't predict the market, just trade according to trend, keep in mind the Bull run may end anytime!

The world population has reached 7 billion on Oct 2011. These people need to eat and drink everyday, when the trend come like every one want to buy a iPhone/ iPad, so you know which company going to make big money!

The flood happen in Thailand is prolong for more than 2 months now. We anticipate commodity price (rubber, palm oil, rice etc...) going to increase in next few months. Just imagine, population keep increase, going forward, the commodity sure will maintain in high level, and the company involved in these areas will going to benefit a lot.

For investors who want to have a peaceful mind with return of 7 to 8% per year (2x more than bank's FD),REITs and selected Blue Chips Stock is one of your choice. When we look back past 2 months, where overall market went down, selected Blue Chips like Maxis, (dividend of 40 cents last year) only down by 10 cents. Of course, when the market rebound recently, it's price was almost flag, up again by 10 cents only. Digi and TM are some of the companies in these category. You will not regret invest in these type of stocks, don't come one day you say 'If I know earlier...' ( to continue reading, just click here ) 

For aggressive investor (who want to see the price up and down), invest in company which entering the new market is the best choice. One of the company which I recommended few months ago, Genting & GENM is still worth to take a look. They are entering the new market... New York casino just open last month, they are adding additional cash generating engine. They also bet big in Miami project which still pending approval. If approval obtain, they will build almost the biggest casino in the world! Another story... Olympic game next year... happen in London... yes, London's casino going to generate more cash!

Genting and GENM , don't simply buy at any time. The strategies I used is every down by 5% or more, will buy 1 unit. Every up by 10% or more, will consider sell 1 unit. End up, I have collected more that RM100K during the down trend and overall still making money. (These strategy can only be used for those stocks where the profit going to be in the up trend for next few years) Hope this strategy will help in your investment method. 

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Investment Idea - Oct 2011

 We are entering last quarter of 2011. Currently, US market is trending down. The past 2 months, a very volatile and roller coaster months.  Crude oil is also trending down, except for Gold future.

For Bursa, there are some exciting news, such as merger, budget and election talk.  The current market toward the down trend is not suitable for trading, unless you are experience trader who know how to trade Put warrant (for instant, HSI-H3). The current market condition is suitable for buy and hold investor. If you look for short term gain, my advise is better to stay side line until new up trend appear. ( Market Crash... buy more or cut loss ?)

As an investor, we save our hard earn money, park at some where safe and protected, the most common one is bank's FD. Then we may want something which give us good returns. In this case, buying Government's Bond with 5% return is good enough. If you look for something within 7 to 8% of return, then REIT is something can be considered in current market environment. 

If you want something exciting with better return, Maybank is a great company to look for. If you plan to keep for long term, buying at current down trend is better than simply buy at anytime. I bought Maybank's share whenever market down since I was schooling. Usually, I bought and kept it for next bull run to sell with very good return. Maybank, with the dividend policy of 40 to 60% payout, make it having great support from  investment fund. Last week, when Bursa drop by 50 points, I bought some Maybank share at RM7.56.  Maybank gave dividend of 55 cents last year, with this price, it work out as 7.2% just for dividend alone. Further more, I like the Dividend Reinvestment Plan as well. 

If Maybank drop below RM6.87, I will use reposition approach by selling some REIT and buy it if I do not have extra cash. Why? Because Maybank now give me 8% of dividend return. Last, the above idea is not a recommendation to buy any shares, it's one of my investment approach which work well for my investment style.  If you were to buy any stock with current market environment, just remember to buy only the great company. Why? Because great company create wealth as the value of company grows. Below are the check list for great company: 

1. Make sure that stock you buy give dividend (at least 2x FD rate is even better) 

2. Try to choose top Malaysia's company in the Industry

3. The Stock must have Institutional support (find like EPF, mutual fund, pension fund or foreign investment fund, find out usually buy)

4. The great business must able to increase in profit  (with ROE & ROA of more than 15%)

5. Buy at reasonable low price to have margin of safety 

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