Transaction @ 15/2/2007

Instead of buying Icap at below 1.50, I decided to use all balance cash to buy 12,000 Muiind at 0.275.

It has good potential to recover from current price.

Value Investing, Mr. Market, Margin of Safety

The transactions volume has surge pass 2.0b since last week, market sentiment is high and focus has shifted to 2nd & 3rd liner ( cheap price stock).

We see more counters has surpass recent height, more & more counter has cross RM1.00 in recent rally. But there are a lot of counters still below RM1.00 or below RM0.50.

Are those below 0.50 is cheap or those above 5.00 is expensive ?
Do you chase those cheap shares blindly in this 'hot-hot' market?

The concept of ' Value Investing', 'Mr.Market' & ' Margin of Safety' will help in answering above questions. You can find it in any books on Warren Buffett's investment philosophy.

Go read it now, you will be able to made good investment decision once you really understand the concept of VALUE INVESTING, MR. MARKET & MARGIN OF SAFETY.

Now the market attention has shifted to 'cheap stock', I find 'Muiind'(0.27) very attractive, it has the biz and possess many assets, it has recover from worse to better, the rewards will be fantastic if the company can give good results in the following years.

Child's Education Fund @ 2/2/2007

Ornasteel & Lion Industries has appreciate more than 18% & 11% respectively, more upside expected.

Still waiting for the right entry price to buy 'Icap'. Below 1.50 should be an attrative price to enter.

KLCI has surged to 1209 led by Big Cap Stock. 2nd & 3rd liner with strong fundamental should move in following weeks. It's interesting to see whether the retail player will come back into market, daily shares transactions volume will tell.

Time to accumulate undervalue stock ???

Today KLCI has resume its upward trend led by ‘Blue Chip’(1177.53), the investor may not want to left out from this rally, yet remain cautious due to fear of imminent correction.

The value investor may consider to accumulate the following ‘undervalue stock’ which downside risk is considered limited to me:-

1. Petronas Dagangan(5.20)

2. Mieco(1.26)

3. Airasia(1.45)

Again, if you have lower risk appetite, it will be better to wait for another 5%-10% discount at current price.

Transaction@16/1/2007

Ornasteel has reached my 1st target.
Disposed 6500 Ornasteel @ 1.25 ( RM8,075),
Bought 5000 LionInd @ 1.09 ( - RM5,500 ).

The portfolio balance as at 16/1/2007 is 7,000 Ornasteel @ 1.24 ( RM8,680) , 5,000 Lionind @ 1.10 ( 5,500) and cash of RM3,265. Total Mkt value is RM17,445.

See value in Lionind due to :

1) Will benefited from the demerger of Parkson from Liondiv

2) Better prospect in steel biz after various measures taken to improve efficiency within Lion Group.

Bad news for Silverstone & Amsteel

Announcement on 29/12/2006:

Bad news for Silverstone & Amsteel

Bursa Malaysia Securities Berhad ("Bursa Securities") had vide its letter dated 28 December 2006 rejected the Proposed Extension ("Rejection"). Pursuant to Paragraph 8.14C of the Listing Requirements of Bursa Securities, a suspension shall be imposed on the trading of the listed securities of the Company with effect from 9.00 am. Friday, 12 January 2007 and de-listing procedures shall be commenced against the Company.

Eventhough these 2 company will appeal against the suspension decision, the price of these companies is expected to fall as investors will rush to unload their stock to cut loss & recovered their cash.

IT'S INTERESTING TO SEE HOW IS THE REACTION ON 3/1/07 FOR OTHERS LION GROUP'S COUNTER I.E LIONCOR, LIONDIV, LIONFIB & LIONIND.

In fact, the fundamental for Lioncor, Liondiv & lionind remained unchanged and is not affected by the delisting of silverstone & Amsteel.

However, their price may drop due to market sentiment as Malaysia's retail investors is more on speculative one.

If the price drop actually happen on 3 Jan 07, this will offer an opportunity for us to accumulate more. I will enter to accumulate more if Liondiv drop below 5.80 or Lionind drop below 0.92.

My First Wish in 2007 - Child's Education Fund

I have one son ( 4 years old), and all I want to give him is good education. Since I have no faith in Malaysia's local university, I would like to sent him to oversea university when he finished his SPM.( 15 years later). Therefore I created this fund in 1/1/2007; My 1st Child's Education Fund.


I have allocated RM15,000 consist of 13,500 Ornasteel shares ( worth 14,310 @ RM1.06) and cash of RM690 as the initial investment in Child's education fund. I will invest additional RM2,000 every year in the next 14 year as the additional investment fund.

If I'm success full in my investment, average 20% annual compound returns on the investment fund will get me RM373K in year of 15th. ( refer table A)

if I can get 25%, my fund will reach RM644K in year 15th.( refer table B)

I wish I will success in my investment and the money is ready for my son's education financial needs when he reach age of 18.

( I will publish in this blog for any purchase / sell in this portfolio, and the monthly movement in market value)

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.