Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Thursday, March 31, 2011

Good rebound for selective stocks

Selective stocks staged a rebound with gain of 15% and beyond. I'm happy for those who accumulated those stocks for past two weeks. Well done..!

Selling GenM- half of holdings on news of GenM acquiring AK gaming business Pan Malaysia. To sell another batch of GenM @ RM4.20 range
Reduce substantially my holdings of THPlant and TDM on news of only 13.5 sen dividend (13.5/190 = 4.6%) expected for TDM.
For day trade: MEGB, IRCB.

Glomac recently announced its earning. Pretty impressive Qeps 5.6sen. Fv = RM 2.10 (nta 201, Q/Q eps 4/ 4/ 5/ 5/ 5.6) Expect a 4.5 sen dividend in May. Div yield approx 4.6% (8.5/185)

Tuesday, March 22, 2011

My Strategy: Sell into strength

Well, I really hate to do this but I'm actually selling into strength some of stocks with good fundamentals. The price action of some of these counters is so appalling it makes me feel nausea and wanna puke.

I'm taking my chips off the table and cashing in whatever winnings offered for next month or so. Observation for past 2 months has convinced me that we're past the peak in most market sectors and there are limited upside for most of the stocks (yesterday's winners are not much fun to buy into). When stock market does not reward your investment in such volatility, why not look into other financial instruments..? When you buy into a stock and days after days, prices don't move up, you know it's not the time to park your money in stocks. There's only one instrument I can think of- CASH..! And plenty of it, at 60 - 70 % cash holdings..!

For those counters which are experiencing huge loses, why average down in a downtrend and throw good money into losers...? Conserve your cash, preserve your capital (even at 3 % FD) and take a peek at the stock market in a year or two. Meanwhile, you might want to consider taking some position or doing placements with OCBC and Citibank that pays yields of more than 5 % pa. They have an instrument called Dual Currency Investment (DCI) which is very easy to play along. And remember don't park your money in unit trust-- it literally sucks (yr money) when market plunges..

Friday, March 18, 2011

Financial market still shaky. Japan crisis

How does an earthquake triggered on 3/11, a tidal wave and nuclear crisis in Japan affects the global financial markets..? Some brief news from the tabloids:
1). Japanese insurance companies are selling foreign holdings to pay out domestic claims
2). Japanese companies and individuals are liquidating their overseas assets into cash for rebuilding/reconstruction at home. Japanese yen will soar in short term.
3). Australian dollar will dip in short term as Japanese close their "carry-trade" position in Australian's high yield account. In the mid to long term, AUD will recover as Japan buys shipments of wheat and base metals with coals for rebuilding.
4). Investors will perpetuate such trends in the short term, aggravating the fear of a new global geo-political crisis and economic downturn.

G7 recently attempts to stabilise the soaring yen which threaten the Japanese economy recovery prospects following the March 11th quake and tsunami by selling down the yen.
"As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability. We will monitor exchange markets closely and will cooperate as appropriate."

Friday, March 11, 2011

The Average Investor's Allocation

What's the holding of the typical investor in the stock market, I wonder..?
A couple of close frens was kind enough to allow me to get a gauge of their position, merely for brief comparison. Two questions; what's their Return on Investment and current cash holding..?

CP invested since March 2009 and trade the stock market weekly. He gradually built up his initial investment capital to a peak of RM 320,000. Since reducing his stocks holdings over the past months, his current shares value is RM 281,000 and cash in hand is RM 126,000 totalling RM 407,000.
Gain = 407/320= 1.27 or (407-320)/320= 27% or RM87,000
Note: his cash position = 40% of initial capital (320k) or 30% (total 407k)

LE only started trading the market in 2010 with capital of RM 198,000. Since then, she has also trimmed her positions in the market and is holding RM 70,000 cash and RM 156,000 in stocks, total RM 226,000.
Gain = 226/198 = 1.14 or (226-198)/198 = 14% or RM 28,000
Note: her cash position = 35% of initial capital (198k) or 31% (226k)

In comparison, my return incl. dividends = 24%, current cash holding = 38% of initial capital.
What is yours like..?