My Investment Journey

Now is the end of year 2006, this is the right time to revisit my investment journey.

I started to buy shares in year 1993 when I was work in one of the securities company in KL. At that time I knew nothing about equity investment, During that period (1993-1996) I bought shares merely base on hearsay & tips. As a result; making losses, luckily only small amount.

In year 1996 - 2003, I have learn from my past mistake, therefore I bought shares in those Companies/ Industries that I knew, loss some, make some, fortunately I make some net gain. Only a small gain.

Feb 2004 is an important date in my investment journey, I have subscript my 1st I-Capital (print version), I also read some Investment Books. I study the new development & financial results of the Companies that I followed. As a results; I have paid off my housing loan and created my 1st investment fund from my investment gain.

Summaries below are my ' homework's' that make me succeed in my investment journey:-
(Hopeful can give some guard to the younger reader)

1) Subscript to I-Capital print version - I learn about the development in world market ( Tokyo, Hong Kong, Singapore & US), Stock analysis (In-depth) & new development in local market (Bursa Malaysia).

2) Acquire investment knowledge by READING - 'How to pick stock like Warren Buffett' by Timothy Vick, 'Security Analysis' & 'Intelligent Investor' by Benjamin Graham.

3) Study latest news & development in Companies by reading news - The Edge, The Star & Sin Chew daily.

4) Access to Internet website/blogger for information & opinion - Bursa malaysia website, Theedgedaily website, Malaysia-finance blogspot, Where is ze moola blogspot.

5) To learn from TA trader for some trading strategies - access to 'talk stock with doc' blogspot & 'trade bursa malaysia' blogspot. ( example: do not enter when price suddenly plunge)

6) Keep the right investment attitude - Be patient, do not get into speculative stock, limit your stock owned to not more than 10 counter, know your limit, do not over commit, no contra play. Only buy shares in companies/ industries that you know.

7) ALWAYS INSIST ON 'VALUE INVESTMENT'

Merry X'mas & Bargain Hunting

When KLCI is in the correction mode early this week, the Thailand's Capital Control give it a punch & push it downward to 1,050 point. Even now the CI has rebound to 1,075 but it is still vulnerable, any negative news will attract selling pressure and push down the CI again.

Now the volume has shrine, excitement has cooling down, the market price should reflect the stock real valuation again.

For those who believe in value investing, I suppose now is the best time for 'Bargain Hunting'.

Waiting for the market to go down further, fear & panic selling will make your shares selling at price lower than the actual value.
( I assume you know your shares valuation), then pick it up if it's cheap enough.

Merry X'mas & Happy Bargain Hunting !!!

KLCI Due for Mild Correction, ARE U READY ?

KLCI hit 1,100 points last week, it has break 1000, 1025, 1060,1080 & 1,100 consecutively within 1 month period. Every one watch it, doubt it and now everyone is so excited about it. Now Genting Won the Sentosa Casino Has Enhance This Bullish Sentiment.

No one will deny KLCI is in a bull mkt, however it has reaching a point for Mild Correction. Are u ready for it ?
Are u ready to face it if Dow Jone drop 100 or even 200 point overnight!
It is interesting to see how our KLCI will react to this scenario.

KLCI WILL CONTINUE TO GO HIGHER OR DROP HEAVYLY ?

Be prepare for it.
1) You can chose to do nothing if u are 'long term investor' & you are pretty sure that you shares are 'undervalue' and you will enjoy better return in the long term. or

2) if you are more towards speculative type of investor, then u should ask yourself one question : if mkt drop 50 points tomorrow, do I have extra cash to accumulate shares at lower price ?

It's advisable for u to take profits ( at higher price now), cash out 20%-35% of your investment fund, then wait for the mild correction of KLCI.
When Mkt dropped, then only come back to collect those undervalue stock at much lower price.

WHY ACB SURGE TO 1.14 (UP 16%)

ACB jump up this morning from 0.985 to closing of 1.14. Day high done at 1.20. Up 16% in 1 day. What has happen ???

This counter has moving around from range of 0.70 - 0.90 since Lion Div announce to demerge & transfer the Parkson assets to ACB in early Oct.
Nothing has change untill now, this proposal still in preliminary stage and all approval needed still pending.

The only thing happen is just an announcement to change name from ACB to Parkson Group Bhd on 29/11/06.

BEWARE THE RISK TAKEN WHEN U BUY IT AT 1.14, U ARE BUYING A COMPANY THAT DO NOT POSSESS ANY CORE BIZ AT THIS MOMENT. HOW IF THE DEMERGE EXCERSICE CALL OFF ?

IF U ARE SO EXCITED FOR PARKSON BIZ, THEN IT'S ADVISABLE TO INVEST IN LIONDIV THAN ACB.

KLCI FINALLY SURGE > 1,060

3 weeks since last post on 30/10/06, the KLCI has surge to 1,060 point.

Many may wonder will this rally sustainable ? Will foreign fund finally come or will they hit & go again.

Judging from the KLCI upward momentum & lead by big blue chips, we may foresee better time ahead for Bursa Malaysia. Optimistic due to the following development :-

1) GLS reform getting momentum by Merger of Sime Darby, Guthrie & Golden Hope .

2) New foreign investor for AMMB

3) Proton retructuring by 51% disposal to Foreign Partner ( most likely to happen this round)

4) Roll out of 9th Malaysia plan

5) The Govt is supportive to let Ringgit to appreciate.

We can expect better performance for STEEL counter in the immediate term mainly due to the roll out of 9th Malaysia Plan. All the Mega projects will make the steel counter busy for the whole year of 2007 .

Highlighted below personal comments on some STEEL COUNTER :-

LionCor ------------ 0.62, undervalue but not recommended due to high borrowing.

LionInd ------------ 0.985, undervalue, good returns expected once the Lion Group completed their restructuring. Main assets is holding in LionFib & LionDiv.

Ornasteel ---------- 1.07, undervalue, simple biz model, healthy balance sheet, good dividend yield. Good counter for long term investor.

Engtex ----------- 1.09, undervalue, profits will expand on water projects starting next year.

Hiapteck ---------- 1.20, fair value. not so attrative pricing. Not cheap to buy compare to abovementioned company.

Mycron ------------ 0.85, under value, but not recommended due to management capabilities not proven.

REMINDER: EVEN BULL IS FINALLY COME, DON'T GET INTO SPECULATIVE COUNTER ( HIGH RISK NOT NECCESSARY HIGH RETURNS), LOOKING FOR UNDERVALUE, GOOD FUNDAMENTAL COUNTER WHEN INVEST YOUR HARD EARNED $$$$$$$$$$$$.

Sugar Bun = Iris = Mobif

The BSKL has reach 990 point last week, the volume has surpass 1 billion units to day, the top 10 most active counter are all penny stock, it seems that the retail player has come back to the mkt again.

The leading gain counter is ' Sugar Bun', all sort of rumours & insider information pertaining to this speculative counter has surface, which tell you that it will go up to 3.50. (last week closing is 2.80, to day closing 3.08).

Believe it or not ? it don't matter. But one must not forget the insident in July this year where Iris , Mobif & Kosmo's prices collapse.

Please do your homework before you trade, chose company that with good fundamental, AVOID counter like sugar, iris, mobis & kosmo.

It's ok for not making profits, but don't be a fool by lossing all your hard earned money in BSKL.

Sigh ! Sigh ! Sigh

A) Extracts from Malaysia-Finance Blogspot :-

The Malaysian bourse seems to be just catching up to the highs being registered by Dow Jones, Hang Seng, etc... For all Malaysian dealers and remisiers, stop for a moment and ponder, this is a 6 year high and just look at the market activity, look at your take home pay... does it feel like a 6 year high??? When your market is at a 6 year high and you are still not taking friends and families out for dinner and stuffs, ... can you imagine what it will be like if its not at any kind of highs?? The Bursa and Finance Ministry must take a lot responsibility for the capital markets road map we have taken for the past few years. In all probablity, we have adequate people at the top, but even more obvious is probably the people we have are not good enough. Anyone with the political will to do something??? !! Sometimes, its not enough to have average employees, especially when the stakes are so high. The secondary institutions deemed to be responsible would be Khazanah and EPU. The right people at the top will make the right things to happen. Right now, we are basically going with the flow, not making inroads in things that really matter.

B) Extracts from icapital.biz :-

When Lee Kuan Yew said that the Chinese in Malaysia were systemically marginalised, it was not surprising. What surprised many people was the angry and high profile reaction from some Malaysians to this already well-known, matter-of-fact statement. However, the biggest surprise in this event was that these people and the Cabinet had missed an even more important point - the whole Malaysia has been marginalised. Foreign direct investors are not coming in droves; neither are portfolio investors. Malaysia is simply not on the radar screen. The fact that the problem of a marginalised Malaysia is less important than having to react to a statement by Lee Kuan Yew shows the decline Malaysia has sunk into. We devote pages after pages to rebutting Lee Kuan Yew’s statement. Why do we not devote pages after pages to the bigger issue of a marginalised Malaysia ?

Our Cabinet was very efficient and fast when in came to declaring 23 Oct as a holiday for civil servants. Wah, it must really be of National Strategic Importance. At the same time, they are very silent and slow on the perpetual haze problem. This health threatening problem has been around for so long and yet no concrete and decisive action has been taken. We guess that since it has been around for so long, we might as well accept it. After all, solving this problem would not translate into more thanks or appreciation while declaring a holiday makes one popular instantaneously. The same goes for the review of the sacking of the judges and the former Lord President. Let us make those decisions that would quickly make us look good and competent. Don’t bother with the bigger and more important problems. They will go away by themselves because Malaysians would forget about them and by the time the consequences of ignoring these problems are felt or experienced, I would have retired. By then, it will be somebody else’s problem-lah. The way we solve our problems is best illustrated by the announcement that the speed limit would be lowered by 10 kmh during the coming festive period. This is typical of the quick-fix mentality of our leaders. Instead of solving problems at the fundamental levels, the Malaysian political leaders and government simply adore the quickies.

After the festive season is over, the problem solving will then have to wait until the next major festival, when another famous Malaysian quickie would be announced. In the meantime, the whole country gets more and more marginalised and our political leaders and policymakers would scream and shout when some one reminds us of the harsh realities. Welcome to Malaysia, the Land of Quickies.

When it comes to the KLSE, we should rename this NDNA market as the Market of Quickies – it can only manage a quick spurt and then a long pause.

Lion Diversified Unlock Value (1+1=3)

LionDiv latest move to segregate it's retail biz (Parkson China, M'sia & Vietnam) & other biz (Steel, Property, Computer etc) into 2 listed company is long anticipated & wellcome by small shareholders.

This will unlock the value in the group, the Company existing share price of below 5.00 is under value mostly due to most investor ignore the Company's other assets & only focus on Parkson HK.. Even Parkson HK Biz by itself will justified for valuation of 5.00 base on the existing share price of HK28.50.

For those investors who critisies Lion Group for never benefited the small shareholder can smile now, the latest restructuring excersise to inject Parkson's retail biz into ACB & distribute all the ACB shares to LionDiv's shareholder will enable the shareholders to hold 2 listed companies shares (Liondiv & ACB, after restructuring) instead of only one now (Liondiv).

After restructuring, it is most likely Liondiv will hold biz in Steel, Properties, Computer and CASH RICH. It has the capabilities to grow the existing biz to new height with cash in hand.

On ACB, the Parkson HK is the main assets, other biz like Parkson Malaysia, Vietnam will made the valuation higher.

In short, before restructuring it's 1+1=1, after restructuring it will be 1+1=3.

I will not sell it below RM7.00, how about you ?

Use bank facilities smartly to save interest

If you can't avoid from using bank loan to purchase house, then use it smartly to save interest. I have 2 ways for you to consider:-

1) Use flexible home loan to finance your house, the loan must be realy flexible that it allow :-

• daily compound interest
• can bank in money anytime, anyday.
• can withdraw money (by ATM machine) anytime, any day without letter or notice to bank
• the bank's location must be near your house or work place, so that you can bank-in your monthly pay cheque in your home loan account every month,keep the money in home loan account to reduce interest, draw it tro ATM only when you need it to spend or used as petty cash .

2) Use credit card to purchase the necessity, only go to supermarket that offer lowest price, and at the same time allow you to spend on credit card without extra charges. This allow you to keep the cash in home loan account for extra 1 month or at least 21 days which can reduce your housing loan interest.

BUT you must be discipline enough to settle your credit card bill on due date. Never let your credit card bill overdue.

The above 2 ways can save you a lot on interest expenses, it can be a significant amount for 20-30 years housing loan period.

Do U know Your Personal Finance

If you have not done this before, just try to calculate out what is your net worth (your personal assets - debts) and your monthly cash flow ( Income - expenses ).

After completed the above 2 statement, you will at least have some idea on 'how much you have' and 'how your monthly income being used every month' on this simple calculation.

You are able to monitor your 'financial health' monthly by doing this calculation and to see whether your finance are improving or worsen each month.

Please note that if :-

The net worth is negative (Meaning your debts are higher that assets and you are rely on borrowing to live) or

The cash flow statement is negative ( Meaning your expenses is higher than income, your personal wealth is being eroded every month if no action to be taken to ractify it )

The interest expenses is high in proportionate to your income ( Meaning large portion of your income is being PAID to finance company, you are actually working for the finance company rather than for yourself )

RED is alarming, urgent actions need to be done to ractify it !

Attached above a sample of 'Personal Net Worth Statement' and 'Personal Cash Flow Statement' to help you to compute your own financial statement.

Have U Being Protected By Insurance Financially ??

Talking about having an emergency fund, it's not less important to have a well designed insurance plan. ( medical, life, personal accident etc )

For most of us who work for a living, It is highly difficult (not impossible ) to save "thousands of money" to set aside for urgent use in the event of emergency or critical point of time (like major illness, dealth, or fire ), therefore it's important that we use insurance to act as a tools to protect us so that we at least will be insured by certain amount of money if unwanted event strike us. (to prevent financial distress)

Make sure your objective clear, we buy insurance is for protection, not for saving or investment. ( cos we have better choice than insurance plan if we want saving/ Investment)

So, go for insurance policy that give you highest protection ( high insured sum) with lowest fee charged.

Have You Save An Emergency Fund ???

You need money when emergency or something unexpected happening. Instead of borrowing from someone to pay for this urgent expenses which you may end up to pay ' high interest' or you may suffer from financial distress if you can't get the money in times of urgent needs.

I suggest you to consider to save enough money as your own " Emergency Fund". A fund that equal to 6 months salary is consider ok for time of urgent needs.

If you have no such saving, pls save it!
If you have no such saving, think twice and again before you spent!

Added 2 New links

I have added 2 new credible links as below, I choose them because each of them has their own unique opinion on share investing, we can learn from them to enhance our understanding on investment, hence better chance to gain from equity investment :-

1) Where is Ze Moola ------ He used to critisice the listed company (Malaysia) on Corporate Gavernance, Financial Performance, Minority Interest .............

From his comment, we will have better understanding on how to differentiate a good company and a so so company.

2) Talking Stock With The Doc --------- He use Chart to trade stock (Technical Analysis). Eventhough I do not believing in using chart for equity investment, but the chart technique is important for us to make decision on when is the appropriate time to buy a good stock.

TIMING is important in share investment, a good timing to buy will make you buy a stock at low price, hence reducing the risk of making losses, then increase your investment returns.

Exciting time ahead for Lion Industries

*As per Lion Industries Annual Report 2005.

A) Lion Forest Industries Bhd:
Share price @ 1/9/06 : RM2.50
Market Cap : 525 mil
*Owned 80%= 420 mil

B) Lion Diversified
Share price @1/9/06 : RM4.70
Market Cap : 3,255 mil
*Owned 36% = 1,172 mil

Total Market Cap Owned (A+B) = RM1,592 mil

Lion Industries
Total paid up capital is 697 mil ordinary shares @ RM1.00.
It's NTA as at 30/6/06 is RM2.85
It's shares price as at 1/9/06 is 0.82,
Market cap is 697 mil x RM0.82 = 572 mil

There are a few reasons for us to believe Lion Industries is attrative :

1. The current price of 0.82 is only 28% of it's NTA of 2.85
2. The Market Cap of 572 mil is only 35% of the market cap owned on Lion Forest & Lion Diversified.(1,592 mil)
3. Lion Diversified is still undervalue at price of 4.70 ( she just disposed off 10% of Parkson Hong Kong with price above RM650 mil. Lion Diversified owened 65% shares of Parkson Hong Kong equalvalent to 650 x 6.5 = 4,225 mil, 30% higher than existing market cap of 3,255 mil ) Lion Industries will benefit from the upside potential on Lion Diversified through 36% shareholding.
4. If you notice that Lion Industries has substantial short & long term borrowing of 2,282 mil, however the borrowing will be reduced by capital reduction from Lion Forest.
5. Lion Industries shares price reached RM1.40 in May 2006, now down to 0.82, going down almost 40%, couple with reasons stated in 1 & 2 above, the down side risk is limited.
   
6. And the most important one,
   The current corporate exercise by Lion Diversified to sell 10% of Parkson Hong Kong shares will made this cash rich company flush with cash of above RM1,600 mil, we can expect more corporate exercise undertaken by Lion Diversified to “UNLOCK THE VALUE” in Lion Diversified, and within the companies under the Lion Group.
   

High Risk Forex Trading

Talking about investment, my friend asked me about Forex trading. I advise her not to try to invest ( or speculate) on Forex due to high risk.

To predict the movement of one currency exchange rate is very complicated and there are many factors that affect the up & down of one currency, even the experience Forex dealer in banking institution can not get the right prediction, how can we, the less knowledgeable one not to suffered losses from this high risk game.

To predict the movement of the currency exchange rate is almost equal to gambling in Casino. Unless you are the 'expert' in dealing with Forex.

Good Sources on Investment Information

Must read this book on the left for anyone who wanted to be success investor. I have read it last year and regreted for not having it 20 years ago.

I have added a few links in my blog:-

Bursa Malaysia - You can obtain all information related to stock listed in Stock Exchange Malaysia

The Edge Daily - All about Malaysia biz news

I capital. biz - One of the best equity investment analyst in Malaysia

Malaysiafinance blogspot - Learn from him on regional equity market

John Vs Peter

In following years, John's salary increment can not matched the increased expenses in the family ( refer my post on 22/8/06), therefore John has no saving, he has to borrow from friends or relative occationally when they need money urgently due to unexpected expenses such as medical fee or children's education fee. John's finance is in trouble and will continue to be so...........

Peter's salary is less than John, but because of him control his spending wisely and has a saving in early age, and invest part of his saving intelligently, he managed to grow his wealth from the returns of the investment. Peter now is enjoying his work and only incurred limited liabilities for his flat. Peter's finance is well managed and enjoying good returns. He is living happily.

Don't you want to have a happy life like Peter and to avoid what experience by John ?

If the answer is 'YES', then you need to be responsible to you "MONEY" by manage your cash wisely, know your income & spending details, set aside certain amount of money for saving every month without fail, do not over spend and start to acquire investing knowledge by reading more investment book.

How investment made money for you

I computed out 2 simple table on how your investment will be on the 10,000 initial capital, inject 2,400 investment yearly, one with assumption of 10% returns yearly, another with 20% returns yearly. See yourself for the wealth accumulated on the 25th year.

Whether you will get 0% returns or 20% or even higher rate of return, very much depends on your :-

Investment knowledge

Timing of the investment &

Your personal investing attitute

( I will discuss above subject later).

So start you reading today, equip yourself with the necessary knowledge & dare to dream for the good times ahead.

Why Financial Planning Is Important To Your Life

● You need money to live in this society, therefore you work for salary income, you spend the money to purchase goods or services. You save it if you have extra money left, you borrow money if there are not enough money for you to buy or pay the neccesities.

● Financial planning is all about how you handle your money, Earn it ? Spend it ? Save it? Or Invest it ?

● If you want quality life, to enjoy life without worring about money, then you need sufficient money / wealth to support this kind of living standard. Financial planning is the tools to help you to achieve it : Manage your personal money properly, to understand your personal cash flow, to accumulate your wealth by start saving as early possible, allocate a portion of your saving for investment, invest intelligently by getting 15%-20% yearly returns in the long term period.

● You will enjoy quality life without worring about money if you succeeded in proper financial planning & invest intelligently.


Below are 2 examples of how your life will be affected by how you handle your money.

A) John aged 35, is a worker in one factory, he earned RM1,600 a month. His monthly expenses is car installment ( 600 ), petrol ( 300), food & misc expenses (300 ). He has extra 400 after deducting the monthly expenses. Sometimes he save it, sometimes he use it to buy things that he love. ie latest handphone model or expensive fish.

He has work for 15 years, no saving basically, he got married recently, plan to have baby in 2 years time, his expenses was increased by 300 for flat rental, the monthly expenses will go higher when they got his 1st baby in 2 years time.

He finally realise that his income will barely enough to pay off his monthly expenses, he has no saving now and could not save untill he retired at aged of 60, even he got his increment yearly.

B) Peter, aged 32, is a accounts clark in a trading company. he earned 1,500 a month. He spend 200 for food, 200 for bus fare to travel to work by bus, use another 300 for daily expenses. He save the extra 800 monthly.

Peter has saving of 20,000 in bank account. He plan to use 10,000 to invest in shares and expected to get a returns of 15% yearsly. the balance of 10,000 to save in FD & get a returns of 3.7% yearsly.

Peter gets an increment of 200 from his current employment, he is now planning to buy a 15,000 second hand car, pay monthly installment of 300. He will incurred another 200 of petrol fee. He still have 500 extra money to save monthly.

Occationally he will use part of its extra money to buys things he love.He also feel more secure because he knew that when he retired at 60, his investment income & saving will be there to support his living cost.

Why I use 'SS' to name this blog

SS is Small FiSh :
Most of us are small fish, work hard daily to earn a living by employment. Every month get a pay cheque of few hundreds to few thousand (if you are the lucky one), after deducting the daily expenses eg. Petrol, foods, rental, family expenses, there are not much left to take home for saving.

SS is Slow but Sure :
This my investing believe, investment is a long term journey, get it started on early age, invest in small amount (even lesser than RM1,000), grow it slowly, no quick money, but be sure the investment will give you better returns through a long period of time (it's not impossible to get a yearly returns of 15%-20% ) Your dream to live a quality life & get prosper will come true.
I hope my blog will help you on achieving your dreams to live quality life by better financial planning & increased wealth.