This month has been relatively bad for Malaysia. The Ringgit has dropped in strength in relation to the greenback (US Dollar) and the FBMKLCI has dropped more than 6.5% Year To Date (YTD).
[FBMKLCI : capitalisation-weighted stock market index made up of Malaysia's big 30 companies]
The implications:
1) For ringgit holders expect a higher expense when dealing in dollars. And due to the high currency fluctuations worldwide (the ruble/yen etc), the impact is limited to your dealings, in your transacted currency.
2) Malaysian stock market still presents bargains, ever more now that valuations are getting cheaper
According to Peter Lynch, if one could predict interest rates (or macroeconomic conditions for that matter) there would be many billionaires out there which is numerically impossible.
[Peter Lynch is an American businessman and stock investor. As part of his role at Fidelity Investments, he managed the Magellan Fund between 1977 and 1990 averaging a 29% return, making it the best 20-year return of any mutual fund over the period. Wikipedia]
In other words, there are bargains out there currently but no one knows or will know how low prices may go. For instance, one would regard these stocks as cheap; Oldtown, small-medium housing stocks i.e. Titijaya, GAB and others.
Oil stocks are definitely down i.e. Petronas Dagangan bhd, SapuraKencana Petroleum Bhd, Barakah Offshore Petroleum Bhd and due to our institutional inspectors fondness of the sector, I would regard the cheapness an opportunity. HOWEVER, one should consider evaluating historical performance of oil companies in low oil prices environment. A look back at companies when oil tanked in price would be a good start.
Only after considering essential points and the sector's fundamentals i.e. nature of an oil company (upstream or downstream/new or old oil fields available/cost of production/long term fixed or variable contract etc) then investing is recommended.
In deciding to invest more in Malaysian stocks, consider watching this great find, a video explaining a simple approach to investment by Mr Lynch (whom also reminds one of Philip A Fisher's theories and principles i.e. the scuttlebutt approach).
Making Money in the Stock Market:
Peter Lynch on Investing in the U.S. Economy (1994)
http://youtu.be/Lxypq_qIw7M
In brief, his ideology is similar to Warren Buffett's principle of : you only need to make 20 good investment decisions in 1 lifetime from his famous line that basically states;
“Your financial wealth would be much greater if you could only make 20 investments in your lifetime. You would make sure they were great if you had only 20 chances.”
Happy investing.
Tuesday, 30 December 2014
Wednesday, 22 October 2014
Global Economy September 2014
It is earning season in the States (US). The Dow Jones (not particularly liked; being a market-total price-weighted index) will see fluctuations that will fluctuate global stock markets.
US markets recently had a "10% correction" which should happen 1x annually (prior US gov intervention). This correction has occurred twice this year; in February and October. Can these corrections suffice for a 20% correction?
[relevant 10% correction article: http://www.cnbc.com/id/102106829]
Mr Buffett would rightly say always buy undervalued companies. In case of a further 20% correction (that used to occur every 3.5yrs that is long due now), your unrealised losses should your stock price accord the market, be minimal.
Hence, the answer would be maybe yes, maybe no.
Notice that all mega investors as such Mr Buffet, mr Li Ka Shing, Mr Al-Waleed bin Talal have all invested in undervalued companies successfully with a key ingredient. Cash.
During the roughest of times, they have all invested what cash they had accumulated into now cheap, quality stocks and companies.
In other words, they invest in cheap/undervalued companies all year round while keeping a good amount of cash in case of any market correction.
This is also the strategy of Tan Teng Boo the captain of Capital Dynamics, a closed end fund with about RM1bil AUM with similar value investing tactics of previously mentioned mega investors
(opinion after attending iCapital Investor Day + researching on iCapital's historical investment style).
[iCapital.biz Bhd is a Malaysian listed public company managed by Capital Dynamics]
Fear not, for traders & bulls, this would be a great read - by Ken Fisher (Forbes 500 Investor) ;
http://www.forbes.com/sites/kenfisher/2014/10/15/the-secret-indicator-that-bulls-will-love/
In conclusion, look for companies bearing high dividends (min- market risk free rate:current MGS/ 10 year bond)
that have historically low prices NOT due to its core business or companies that are turning over a new leaf / to profitability (should you time this event well).
& maintain certain amount of CASH should you feel comforted in case of a correction you may get discounts all across the board. However, Mr Ken Fisher would tell you, comfort should not be inherent in investment management. For usually if you are comforted in making an investment decision, you would not make as well a decision as someone who wants to invest all his cash in stocks and still be able to withstand corrections.
A small confusion is always intended. Confusions will help us all develop our own personalized theories, philosophies and ideas in investing upon cracking our heads in making sense of everything.
Happy investing until next time.
US markets recently had a "10% correction" which should happen 1x annually (prior US gov intervention). This correction has occurred twice this year; in February and October. Can these corrections suffice for a 20% correction?
[relevant 10% correction article: http://www.cnbc.com/id/102106829]
Mr Buffett would rightly say always buy undervalued companies. In case of a further 20% correction (that used to occur every 3.5yrs that is long due now), your unrealised losses should your stock price accord the market, be minimal.
Hence, the answer would be maybe yes, maybe no.
Notice that all mega investors as such Mr Buffet, mr Li Ka Shing, Mr Al-Waleed bin Talal have all invested in undervalued companies successfully with a key ingredient. Cash.
During the roughest of times, they have all invested what cash they had accumulated into now cheap, quality stocks and companies.
In other words, they invest in cheap/undervalued companies all year round while keeping a good amount of cash in case of any market correction.
This is also the strategy of Tan Teng Boo the captain of Capital Dynamics, a closed end fund with about RM1bil AUM with similar value investing tactics of previously mentioned mega investors
(opinion after attending iCapital Investor Day + researching on iCapital's historical investment style).
[iCapital.biz Bhd is a Malaysian listed public company managed by Capital Dynamics]
Fear not, for traders & bulls, this would be a great read - by Ken Fisher (Forbes 500 Investor) ;
http://www.forbes.com/sites/kenfisher/2014/10/15/the-secret-indicator-that-bulls-will-love/
In conclusion, look for companies bearing high dividends (min- market risk free rate:current MGS/ 10 year bond)
that have historically low prices NOT due to its core business or companies that are turning over a new leaf / to profitability (should you time this event well).
& maintain certain amount of CASH should you feel comforted in case of a correction you may get discounts all across the board. However, Mr Ken Fisher would tell you, comfort should not be inherent in investment management. For usually if you are comforted in making an investment decision, you would not make as well a decision as someone who wants to invest all his cash in stocks and still be able to withstand corrections.
A small confusion is always intended. Confusions will help us all develop our own personalized theories, philosophies and ideas in investing upon cracking our heads in making sense of everything.
Happy investing until next time.
Wednesday, 24 September 2014
Properties
There will always be hot stocks, as such SHL CONSOLIDATED BHD. So, the question is do you buy it?
As usual, firstly, decide. Are you an investor (long term) or a trader (trader).
Upon deciding, notice that stocks of a particular sector usually move in tandem with one another. For example, property stocks have performed particularly well year to date (YTD), among others;
1) Titijaya Land Bhd
2) Eco World Development Group Bhd
3) Tambun Indah Land Bhd
4) SHL Consolidated Bhd
This particular nature of stock sector movement has been pointed out by Ken Fisher, a well known investment figure, also the descendant of Philip Arthur Fisher, a prolific investment theories contributor famous with the likes of Benjamin Graham.
The key factor is to not look at a particular stock, hot or not, but at the entire market and then a focused sector. For example, since the doldrums of cooling measures to be taken by the Malaysian government regarding property transactions began (end of 2013 into 2014), property stocks declined or stagnated (before the rally).
How is it then property stocks were one of the best performers?
Simple. Demand versus supply. According to rough statistics (usually presented in local media), there are roughly a few million buyers below the age of 37 looking to purchase a house, with an average annual household formation of 140,000 according to a property market report by the National Property Information Centre (Napic) found in a October 2013 article as below.
[http://www.thestar.com.my/business/sme/2013/10/17/many-reasons-for-rising-property-prices-in-msia-rehda-treasurer-says-supply-and-demand-is-most-signi/]
More actual statistics, new house prices increase about 10% yearly in major cities (meaning a gain of 10% annually on average for new buyers).
A consequent, local market love new properties. As leverage financing (a loan) helps an individual purchase a property as to which the developer bears the interest while the property is constructed and upon completion, the property can be sold for a handsome profit even after deducting real property gains tax (RPGT) and other penalty/cost.
[Note the mentioned Developer Interest Bearing Scheme (DIBS) is no longer allowed though companies are still offering them and RPGT % has been increased; these being part of the cooling measures initiated by the government]
Back to the companies mentioned. All had large projects that were launched end of 2013 and in 2014. The projects were sold out quite well as buyers bought into the rush prior cooling measures towards the end of 2013 and then more when cheaper projects like that of Titijaya were released besides the new buyers buying their first properties.
Note, we do not know whether the purchasers prior cooling measures were actual buyers or investors gobbling up many property at once (now a minimum imposed per individual).
This lack of data affects our idea on the market as a whole i.e. whether can buyers still afford houses and is the demand still strong enough to last (assuming a property bubble is brewing).
However, the companies, research reports and media, all would convince you the gross development value (GDV) of projects were substantial, there were good take up rates and hence good profits quarterly and great share price movement.
This sector performance was also due to the lagging nature of the sector as a whole and the smaller cap companies (Titijaya, SHL) that launched big projects finally obtained valuation similar to that given to its larger peers i.e. Mah Sing Group Bhd. In between, due to geopolitics concerns etc, the bigger cap property companies received attention for their more stable outlook due to their size and their launches.
Outlook: Companies developing cheaper range properties will continue to do well.
The property market globally tends to show Malaysian property market still has a long way to go. Consider Japan that has generationS servicing ONE loan. However, further cooling measures as such the likes of Singapore may slow down property prices whilst prospective buyers' income rise adequately to become actual buyers (assuming Malaysia's high income nation target is reached with higher REAL wages)
In conclusion, property companies should fare well for years to come as long they provide proper supply of what is in demand and maintaining/creating an efficient business model.
Until next time, happy investing.
[UPDATE (29/05/2015):
This is one of the better articles on Malaysian property sector found on TheEdgeMarkets.com
By Lam Jian Wyn / City & Country, The Edge Malaysia | May 28, 2015 : 8:00 PM MYT
http://www.theedgemarkets.com/my/article/edge-investment-forum-real-estate-2015-property-market-remain-cool-over-next-12-24-months
A short note: Investments should always suit investors' financial health, goals and psychology.]
As usual, firstly, decide. Are you an investor (long term) or a trader (trader).
Upon deciding, notice that stocks of a particular sector usually move in tandem with one another. For example, property stocks have performed particularly well year to date (YTD), among others;
1) Titijaya Land Bhd
2) Eco World Development Group Bhd
3) Tambun Indah Land Bhd
4) SHL Consolidated Bhd
This particular nature of stock sector movement has been pointed out by Ken Fisher, a well known investment figure, also the descendant of Philip Arthur Fisher, a prolific investment theories contributor famous with the likes of Benjamin Graham.
The key factor is to not look at a particular stock, hot or not, but at the entire market and then a focused sector. For example, since the doldrums of cooling measures to be taken by the Malaysian government regarding property transactions began (end of 2013 into 2014), property stocks declined or stagnated (before the rally).
How is it then property stocks were one of the best performers?
Simple. Demand versus supply. According to rough statistics (usually presented in local media), there are roughly a few million buyers below the age of 37 looking to purchase a house, with an average annual household formation of 140,000 according to a property market report by the National Property Information Centre (Napic) found in a October 2013 article as below.
[http://www.thestar.com.my/business/sme/2013/10/17/many-reasons-for-rising-property-prices-in-msia-rehda-treasurer-says-supply-and-demand-is-most-signi/]
More actual statistics, new house prices increase about 10% yearly in major cities (meaning a gain of 10% annually on average for new buyers).
A consequent, local market love new properties. As leverage financing (a loan) helps an individual purchase a property as to which the developer bears the interest while the property is constructed and upon completion, the property can be sold for a handsome profit even after deducting real property gains tax (RPGT) and other penalty/cost.
[Note the mentioned Developer Interest Bearing Scheme (DIBS) is no longer allowed though companies are still offering them and RPGT % has been increased; these being part of the cooling measures initiated by the government]
Back to the companies mentioned. All had large projects that were launched end of 2013 and in 2014. The projects were sold out quite well as buyers bought into the rush prior cooling measures towards the end of 2013 and then more when cheaper projects like that of Titijaya were released besides the new buyers buying their first properties.
Note, we do not know whether the purchasers prior cooling measures were actual buyers or investors gobbling up many property at once (now a minimum imposed per individual).
This lack of data affects our idea on the market as a whole i.e. whether can buyers still afford houses and is the demand still strong enough to last (assuming a property bubble is brewing).
However, the companies, research reports and media, all would convince you the gross development value (GDV) of projects were substantial, there were good take up rates and hence good profits quarterly and great share price movement.
This sector performance was also due to the lagging nature of the sector as a whole and the smaller cap companies (Titijaya, SHL) that launched big projects finally obtained valuation similar to that given to its larger peers i.e. Mah Sing Group Bhd. In between, due to geopolitics concerns etc, the bigger cap property companies received attention for their more stable outlook due to their size and their launches.
Outlook: Companies developing cheaper range properties will continue to do well.
The property market globally tends to show Malaysian property market still has a long way to go. Consider Japan that has generationS servicing ONE loan. However, further cooling measures as such the likes of Singapore may slow down property prices whilst prospective buyers' income rise adequately to become actual buyers (assuming Malaysia's high income nation target is reached with higher REAL wages)
In conclusion, property companies should fare well for years to come as long they provide proper supply of what is in demand and maintaining/creating an efficient business model.
Until next time, happy investing.
[UPDATE (29/05/2015):
This is one of the better articles on Malaysian property sector found on TheEdgeMarkets.com
By Lam Jian Wyn / City & Country, The Edge Malaysia | May 28, 2015 : 8:00 PM MYT
http://www.theedgemarkets.com/my/article/edge-investment-forum-real-estate-2015-property-market-remain-cool-over-next-12-24-months
A short note: Investments should always suit investors' financial health, goals and psychology.]
Thursday, 28 August 2014
Research Reports Parkson
[Part 2]
The final comparison.
Consider the reports on the 27th of August in particular regarding the sale announcement of KL Festival City Mall (available at http://klse.i3investor.com/servlets/ptg/5657.jsp). Compare reports with price targets of RM2.51 and rm3.85 respectively.
One report reports the sale will garner "an exceptional gain or 10 sen/share" of RM110mil for shareholders
The other reports "cash pile will be boosted by the sale for RM349mil"
Notice abysmal the difference a singular announcement above affected the price target given by each financial house & the difference in tone (negative,positive).
[Interestingly: The media can chose either report to publish i.e. via newspapers]
In conclusion, to estimate a price that will be paid by future buyers (of a stock), one can look at a particular market's favorite method of evaluation.
For e.g. it is more likely that a company in Malaysia will use the following:
1) P/E ratio
2) Net Profit growth rate (%)
3) Revenue growth rate (%)
4) Net Asset Value (NAV) / Net Tangible Assets (NTA)
as the main evaluation metric.
The above plus peer comparison (comparing companies of similar nature) should allow for a relatively good future projection of a company's stock performance.
Of course the above qualitative methods should also have added quantitative measures as such; is it a favored stock, does it carry a premium due to a fantastic management/business model, will there be more satisfied customers years onward, and much more.
[Note: Evaluations - Most companies i.e. Oldtown bhd & Sch Bhd that have great balance sheets with very low debt usually causes less attractive evaluations. Why? For instance, Oldtown Bhd. Revenue generated is used to finance debt hence reducing its net profits which affects all the 4 evaluation metric stated above. This is contrasted to companies in the US that use debt (e.g. bonds) to finance debt (NOT Cost to produce goods/services) to improve evaluations since debt and net profit fall into seperate categories].
Until next time, happy investing.
The final comparison.
Consider the reports on the 27th of August in particular regarding the sale announcement of KL Festival City Mall (available at http://klse.i3investor.com/servlets/ptg/5657.jsp). Compare reports with price targets of RM2.51 and rm3.85 respectively.
One report reports the sale will garner "an exceptional gain or 10 sen/share" of RM110mil for shareholders
The other reports "cash pile will be boosted by the sale for RM349mil"
Notice abysmal the difference a singular announcement above affected the price target given by each financial house & the difference in tone (negative,positive).
[Interestingly: The media can chose either report to publish i.e. via newspapers]
In conclusion, to estimate a price that will be paid by future buyers (of a stock), one can look at a particular market's favorite method of evaluation.
For e.g. it is more likely that a company in Malaysia will use the following:
1) P/E ratio
2) Net Profit growth rate (%)
3) Revenue growth rate (%)
4) Net Asset Value (NAV) / Net Tangible Assets (NTA)
as the main evaluation metric.
The above plus peer comparison (comparing companies of similar nature) should allow for a relatively good future projection of a company's stock performance.
Of course the above qualitative methods should also have added quantitative measures as such; is it a favored stock, does it carry a premium due to a fantastic management/business model, will there be more satisfied customers years onward, and much more.
[Note: Evaluations - Most companies i.e. Oldtown bhd & Sch Bhd that have great balance sheets with very low debt usually causes less attractive evaluations. Why? For instance, Oldtown Bhd. Revenue generated is used to finance debt hence reducing its net profits which affects all the 4 evaluation metric stated above. This is contrasted to companies in the US that use debt (e.g. bonds) to finance debt (NOT Cost to produce goods/services) to improve evaluations since debt and net profit fall into seperate categories].
Until next time, happy investing.
Thursday, 21 August 2014
Research Reports Parkson
[Part 1]
Parkson Holdings Bhd (parent company) is taken as a case study to test the viability of Research Reports (RRs).
It is recommended (as previously mentioned) that Research Reports should only COMPLEMENT own research done via analysing company announcements via 1st party documentation; by the company itself or through informed source(s).
RRs on Parkson dated 20/08/2014:
( 3 main RR released: http://klse.i3investor.com/servlets/ptg/5657.jsp including RR posted at http://www.bursamalaysia.com/market/listed-companies/list-of-companies/plc-profile.html?stock_code=5657 )
In brief, it is assumed the RRs was a respond to Parkson's disposal of its fully owned KL Festival City Mall (henceforth the Property) for RM349mil to Festiva Mall Sdn Bhd with AsiaMalls Sdn Bhd being the holding company.
This would unlock RM349mil (initial purchase price of RM246mil + RM103mil of profit from disposal) to be used as per reported by Parkson Bhd:
[RM200mil]; General investments including acquisition, development and management of retail malls and Working capital
[RM100mil]; Expenses related to the Proposed Disposal
Firstly, Parkson's anchor tenancy business within the Property will go on as usual.
Secondly, unlocking cash value is always good for any company, if sufficient cash is raised (appraised market value of the Property: RM353.8mil by Henry Butcher Malaysia Sdn Bhd) and an adequate return on invested capital (ROIC). Parkson's main ideology is to grow with internally generated funds with the least usage of debt. Although a rough calculation of ROIC from the mentioned disposal is difficult, it is assumed from Parkson's ideology and transparent book keeping, the cash to be raised will give a sufficient return in share value.
[ ROIC: a Company's efficiency in allocating capital. More at
http://www.investopedia.com/terms/r/returnoninvestmentcapital.asp ]
ROIC % and in turn a theoratical Internal Rate of Return (IRR) for individual shareholders is enhanced in view of retail space that is increasing in Kuala Lumpur and the reinvestment of cash in other outlets in/future development i.e. in Melaka, a still under developed city in terms of retail business.
Thirdly, in simplistic terms;
1) The cash due RM349mil upon completion of the conditional Sale & Purchase (S&P) in approximately 1-2 months will enhance Parkson's balance sheet by RM349mil or RM200mil assuming cost of disposal=RM149mil.
2) This will increase Parkson's valuations for Year 2014 unless the next 2 quarters of shopping season does really badly (the 1st half was relatively good).
Assuming negative valuations are produced by RRs, the cash will be utilized for future stores which should be fully owned by Parkson without incurring debt to grow elsewhere.
[Note: More than 65-75% of revenue is generated by Parkson Retail Group operating in a strong consumers market- China, with stiff competition that seems to be growing on debt i.e. Intime Retail Group Co Ltd and Golden Eagle Retail Group Ltd]
Fourthly, Parkson Retail Asia Limited, the Singapore subsidiary is to report its quarterly report today 21/08/2014 (after trading period).
The RRs seem to suggest Parkson will be moving no where for now, but the incoming cash flow and the business structure of anchor tenancy for the next two or more quarters seems to be vagrantly positive.
Well, in short, RRs exists only to persuade purchases for institutional funds /investors have their own qualification to purchase stocks in which one believes have all been met by the recent asset disposal.
[Fun Fact: the Disposal was a surprise in one RR and not at all to another]
There are many more considerations to valuing a company than what RRs have to offer. Besides, without such reports, those who produce them might lose credibility and goodwill. Hence, the need to constantly revise their stand to remain relevant and in business.
[Interestingly: The RRs often display a word for word reproduction of company announcements with added short term opinions]
In conclusion, use RRs wisely for despite the above, they give a quick outlook for any given company.
Happy investing.
Parkson Holdings Bhd (parent company) is taken as a case study to test the viability of Research Reports (RRs).
It is recommended (as previously mentioned) that Research Reports should only COMPLEMENT own research done via analysing company announcements via 1st party documentation; by the company itself or through informed source(s).
( 3 main RR released: http://klse.i3investor.com/servlets/ptg/5657.jsp including RR posted at http://www.bursamalaysia.com/market/listed-companies/list-of-companies/plc-profile.html?stock_code=5657 )
In brief, it is assumed the RRs was a respond to Parkson's disposal of its fully owned KL Festival City Mall (henceforth the Property) for RM349mil to Festiva Mall Sdn Bhd with AsiaMalls Sdn Bhd being the holding company.
This would unlock RM349mil (initial purchase price of RM246mil + RM103mil of profit from disposal) to be used as per reported by Parkson Bhd:
[RM200mil]; General investments including acquisition, development and management of retail malls and Working capital
[RM100mil]; Expenses related to the Proposed Disposal
Firstly, Parkson's anchor tenancy business within the Property will go on as usual.
Secondly, unlocking cash value is always good for any company, if sufficient cash is raised (appraised market value of the Property: RM353.8mil by Henry Butcher Malaysia Sdn Bhd) and an adequate return on invested capital (ROIC). Parkson's main ideology is to grow with internally generated funds with the least usage of debt. Although a rough calculation of ROIC from the mentioned disposal is difficult, it is assumed from Parkson's ideology and transparent book keeping, the cash to be raised will give a sufficient return in share value.
[ ROIC: a Company's efficiency in allocating capital. More at
http://www.investopedia.com/terms/r/returnoninvestmentcapital.asp ]
ROIC % and in turn a theoratical Internal Rate of Return (IRR) for individual shareholders is enhanced in view of retail space that is increasing in Kuala Lumpur and the reinvestment of cash in other outlets in/future development i.e. in Melaka, a still under developed city in terms of retail business.
Thirdly, in simplistic terms;
1) The cash due RM349mil upon completion of the conditional Sale & Purchase (S&P) in approximately 1-2 months will enhance Parkson's balance sheet by RM349mil or RM200mil assuming cost of disposal=RM149mil.
2) This will increase Parkson's valuations for Year 2014 unless the next 2 quarters of shopping season does really badly (the 1st half was relatively good).
Assuming negative valuations are produced by RRs, the cash will be utilized for future stores which should be fully owned by Parkson without incurring debt to grow elsewhere.
[Note: More than 65-75% of revenue is generated by Parkson Retail Group operating in a strong consumers market- China, with stiff competition that seems to be growing on debt i.e. Intime Retail Group Co Ltd and Golden Eagle Retail Group Ltd]
Fourthly, Parkson Retail Asia Limited, the Singapore subsidiary is to report its quarterly report today 21/08/2014 (after trading period).
The RRs seem to suggest Parkson will be moving no where for now, but the incoming cash flow and the business structure of anchor tenancy for the next two or more quarters seems to be vagrantly positive.
Well, in short, RRs exists only to persuade purchases for institutional funds /investors have their own qualification to purchase stocks in which one believes have all been met by the recent asset disposal.
[Fun Fact: the Disposal was a surprise in one RR and not at all to another]
There are many more considerations to valuing a company than what RRs have to offer. Besides, without such reports, those who produce them might lose credibility and goodwill. Hence, the need to constantly revise their stand to remain relevant and in business.
[Interestingly: The RRs often display a word for word reproduction of company announcements with added short term opinions]
In conclusion, use RRs wisely for despite the above, they give a quick outlook for any given company.
Happy investing.
Monday, 7 July 2014
Investors according to Benjamin Graham
First, who is Benjamin Graham? A quick google search will probably show you an excellent investor ahead of his time back in 1930s whom have recorded the investment psychology of investors which has not changed much in over 80 years. Even Warren Buffett would swear by Graham's evaluation techniques and logical deductions, all made available in the famous books, The Intelligent Investor and Security Analysis.
Surely then this man, a forerunner of ACCA had to know a thing or two about investing. Hence, most articles posted on this blog tries to assimilate their investment wisdom. Thus, reading the two books mentioned is deemed priceless for investment analysis.
A quote by Benjamin Graham.
"A True Investor is scarcely ever forced to sell his shares & free to disregard current price quotation. He only need pay attention to selling at favorable price. Thus, investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into his basic disadvantage. That man would be better of if his stocks had no market quotation at all for then he would be spared the mental anguish caused by other persons mistakes of judgement."
His general main idea of securities investment is among others, buying securities/shares of company(s) that have strong earnings, commendable market share, low debt and one that should be around for a long time to come.
A current day flavour of Value Investing, a term most associated with Graham, can also be attained from materials linked to Professor Bruce Greenwald, a Columbia Business School professor.
Until next time, happy investing.
Surely then this man, a forerunner of ACCA had to know a thing or two about investing. Hence, most articles posted on this blog tries to assimilate their investment wisdom. Thus, reading the two books mentioned is deemed priceless for investment analysis.
A quote by Benjamin Graham.
"A True Investor is scarcely ever forced to sell his shares & free to disregard current price quotation. He only need pay attention to selling at favorable price. Thus, investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into his basic disadvantage. That man would be better of if his stocks had no market quotation at all for then he would be spared the mental anguish caused by other persons mistakes of judgement."
His general main idea of securities investment is among others, buying securities/shares of company(s) that have strong earnings, commendable market share, low debt and one that should be around for a long time to come.
A current day flavour of Value Investing, a term most associated with Graham, can also be attained from materials linked to Professor Bruce Greenwald, a Columbia Business School professor.
Until next time, happy investing.
New IPOs
Lock Up Periods / Moratorium
Lock ups or moratorium are periods within which initial investors, those whom have purchased shares prior listing, are NOT allowed to sell legally. They may sell their shares after the stipulated period (based on individual company lock up/tie up period/moratorium agreement). For example, Twitter shares which was listed in the States had a fall in share price as soon as the lock up period was over recently as initial investor could finally lock in their profits by selling their shares (have since seen a rise in share price).
New companies such as Icon Offshore Bhd and Boustead Plantations Bhd and all others in Malaysia do not have lock up periods. Thus, "cornerstone investors" as they are frequently labelled may sell their positions as soon as these companies are listed.
In wrought conclusion, speculation may peak on listing day for any given IPOs. Thus, a fall in price should not discourage investors. Though having analysed the prospectus adequately might prove beneficial to buy into the drop in prices. The perfect example would have been Titijaya Bhd in the earlier half of 2014.
However, this is a rough analysis of the 2 mentioned new companies. Icon Offshore was previously the offshore related division (OSV) of Tanjung Offshore Bhd, now listed as a separate company specializing in offshore related activities (OSV). It also has EKUINAS as one of their major shareholder. Considering its ties to EKUINAS, it is projected that this company will successfully capitalize new funds garnered from listing to expand its business through government related contracts. And for your information, this company was previously known as Tanjung Kapal Services Sdn. Bhd.
According to a self survey, it is seen that most IPOs since the 4th quarter of 2013 until present 2014 3rd quarter have seen a relatively good increase in share price on average. Namely due to listing requirements by Securities Commission Malaysia and Bursa Malaysia that are conservative in nature relative to the States & the paring down of debts, increase in capex / assets / etc via listing capital, communing better evaluations in research reports produced by banks and other institutions.
Despite the above, it is to be noted the number of times Boustead Plantations have been listed, delisted and re-listed & the acres of new plantation that have matured as compared to total new plantation area. It is opined new funds will be used to make land acquisitions at a relatively diluted value per shareholding due to current total shares issued and held by major corporation/individual.
In terms of investment, acquiring agricultural land personally/collectively with partner(s), if financially viable, and contracting it out to garner returns would seem the better choice, assuming land is bought in areas targeted by the company mentioned. A return in crops of above 15% on contract may give a 10% return if financed by a 4% interest bearing loan. There are many specially available loans provided by banks (i.e. SME Bank) & government related sources currently.
The key is finding a value for money investment. Agricultural land can still be acquired in certain regions for low prices relative to their earning capacity.
Therefore, capitalise wisely and happy investing.
[Please note: These are all opinions and are not intended to be used as advice for investment purposes until and unless proper evaluations are conducted personally according to individual financial means, upon which liability is fully borne by the decision maker]
Lock ups or moratorium are periods within which initial investors, those whom have purchased shares prior listing, are NOT allowed to sell legally. They may sell their shares after the stipulated period (based on individual company lock up/tie up period/moratorium agreement). For example, Twitter shares which was listed in the States had a fall in share price as soon as the lock up period was over recently as initial investor could finally lock in their profits by selling their shares (have since seen a rise in share price).
New companies such as Icon Offshore Bhd and Boustead Plantations Bhd and all others in Malaysia do not have lock up periods. Thus, "cornerstone investors" as they are frequently labelled may sell their positions as soon as these companies are listed.
In wrought conclusion, speculation may peak on listing day for any given IPOs. Thus, a fall in price should not discourage investors. Though having analysed the prospectus adequately might prove beneficial to buy into the drop in prices. The perfect example would have been Titijaya Bhd in the earlier half of 2014.
However, this is a rough analysis of the 2 mentioned new companies. Icon Offshore was previously the offshore related division (OSV) of Tanjung Offshore Bhd, now listed as a separate company specializing in offshore related activities (OSV). It also has EKUINAS as one of their major shareholder. Considering its ties to EKUINAS, it is projected that this company will successfully capitalize new funds garnered from listing to expand its business through government related contracts. And for your information, this company was previously known as Tanjung Kapal Services Sdn. Bhd.
According to a self survey, it is seen that most IPOs since the 4th quarter of 2013 until present 2014 3rd quarter have seen a relatively good increase in share price on average. Namely due to listing requirements by Securities Commission Malaysia and Bursa Malaysia that are conservative in nature relative to the States & the paring down of debts, increase in capex / assets / etc via listing capital, communing better evaluations in research reports produced by banks and other institutions.
Despite the above, it is to be noted the number of times Boustead Plantations have been listed, delisted and re-listed & the acres of new plantation that have matured as compared to total new plantation area. It is opined new funds will be used to make land acquisitions at a relatively diluted value per shareholding due to current total shares issued and held by major corporation/individual.
In terms of investment, acquiring agricultural land personally/collectively with partner(s), if financially viable, and contracting it out to garner returns would seem the better choice, assuming land is bought in areas targeted by the company mentioned. A return in crops of above 15% on contract may give a 10% return if financed by a 4% interest bearing loan. There are many specially available loans provided by banks (i.e. SME Bank) & government related sources currently.
The key is finding a value for money investment. Agricultural land can still be acquired in certain regions for low prices relative to their earning capacity.
Therefore, capitalise wisely and happy investing.
[Please note: These are all opinions and are not intended to be used as advice for investment purposes until and unless proper evaluations are conducted personally according to individual financial means, upon which liability is fully borne by the decision maker]
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