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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Investment Idea - Sep 2011

Greeting! Last August, we saw US market had a mid correction of about 20% from the high of 12,724 to low of 10,720. At the time I write this mail, US market close at 11,614, seem it's stable right now and we will going to enter the last phase of bull run. The down grade of USD had caused market imbalance where people pull money out from US market and put into Gold market, causing gold price hit record high. Whereas China government tighten the money policy to avoid hot money coming into their country.
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I expect Hong Kong market will move higher if US fund come into Asia in next few months and Asia region will have positive impact. Anyway, always respect the trend, make trend as your best friend, never against it.
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Last month, some clients bought glove stock when the market went down. If I were to buy glove stock, will choose the industry's best performance... in this case, my first choice is Hartalega. The reason is, this is one of the company with profit keep on growing, unlike others glove company where their profit in decreasing trend.
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Some clients bought TENAGA, it's a blue chip counter and almost near the bottom (some snippets about TENAGA). One can buy TENAGA every day to average down if he have a lot of money. What if TENAGA keep on falling in next 1 month, 3 month or 6 month? Since this guy keep on buying TENAGA when the price goes down, his cost will become less and less. If I were to buy TENAGA, I will check with this guy what is his cost for the last 1 months after averaging down. I will only buy when TENAGA's market price is equal or above his cost for last 1 month. (this will avoid buying too soon when the share price keep on falling)
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You may ask how to find this guy to ask for his cost for last 1 month? The answer is simple, take the 30 days Moving Average line compare with current market price, got it? Some also bought CIMB and got stuck there because buying too soon, hence the safer way is using my above method. (*try to record down your trade)
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Last, if you going to buy any stock, at least must meet below 2 conditions:
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1. The company must making profit (profit must stable and keep on increasing is the best)

2. The company must have a dividend policy, distribute the dividend of at least same or better than FD. (It's better to have goose that keeps laying eggs (golder egg is even better) than a goose that sit there and doing nothing.)
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Investment Idea - Aug 2011

Let see what's happen in US recently, after the long debate, finally the US government agreed to raise the debt ceiling . What's debt ceiling? It's a self imposed limit on Treasury's ability to borrow. Never mind! Who cares, history always repeat itself. Since 1945, the ceiling has been raised 87 times, it's almost no impact to the market after few months.

Parkinson's law states, “Expenses always rises in direction proportion to the income” In general, as income goes up, expenses almost will follow go up too. This is happening every where, almost every countries' government like to print more money... it's better to keep goods price going up, all properties and asset goes up, so everybody feel more happy.

In theory, share price will going up too... in fact, US market already in the up trend for more than 2 years and 5 months now. Normally, the up trend will reverse after 2.5 to 3 years. Investor reposition their holdings, shares change hand from week investor to strong investor (long term investor). After some time, market will go up again. (because history always repeat itself)

What's the meaning of reposition ? Example, Susan bought a house for $300k few years ago. Now the market price is $600k, Susan decide to build a passive income machine. Hence, she sell the house and take the money to buy REIT and some blue chip stock which gave dividend yield of about 8% and capital gain in long term. Another example is sell A stock and buy B stock. (be careful with this approach, as some investors sell good stock and buy the bad stocks)

Many would like to know if now it's good time to buy stock. My opinion is, yes, as “hot money” printed will flow to Asia (since US and Europe both having fear factor), however, do not predict the market direction. Strong investors prepare to hold for long terms, hence buying good stock is the main condition to success in investment, especially blue chip stock if discount by 10% or more.

Last, someone ask me if any market tips... I say no... but MBSB ($1.64) and GENM ($3.66) worth to take a look if the price drop, it's in my buying list. Please note this is my personal view, not a recommendation to buy. Last time when I recommend a stock, someone sent me a mail, state that he's going to invest $100K and want me to sign agreement with him that I will pay him back $100k if his investment fall in value. Please, even Warren Buffet did a mistake to pay high for certain stock, the money is yours, you have full responsibility to decide if want to invest or not.

Strong investors always keep building net worth in mind. Building passive income flow and buying good asset or stocks at a discount price is a priority. The goal is made the money work hard, so one day you can choose no need to work or work because you choose it, not because of necessity.
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