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.