YTL
YTL was the first company I invested based on two reasons: good mgmt and good cash flow mgmt. This gave me a lot of experience on dealing with this kind of investment.
I was saying YTL was my long term holding company, I really not much about the stock price, in stead, I would buy it when it dropped below my purchased price - 5.20 on year 2006.
Let me explain how to determine how the good mgmt was and how the dividend policy changed the other's opinion on it.
I started to search for blue chip stock after I failed on small cap stock, in other word, I tried to be balance by set aside some portion into blue chip stock against small cap stock, history proved me half correct and half wrong.
Due to the long working hour, I can't really be a trader, hence I am more towards long term investor. By doing some asset allocation (at that point of time, I was about 30k to 40k, hence I was able to put a little bit percentage on it. After a while, ytl issued ytlpowr, and I started accumulate ytlpowr by execute the right to purchase on the cost of about rm1 per share.
Ok, back to the point. I picked ytl is because it has a proven track, and it had some problem on that time. The pe was less than 10, which for me was considered as low. It has some good cash flow generating asset, such as utility - electricity and water, cement, infrastructure construction, and so on.
The ambition of ytl boss was to keep 20% grow in trm of asset base each year until year 2020.
The corporate finance was done very excellent by the company. They always borrow at low rate and invest in low risk asset to get better return.
Actually during this period, I had passed cfa level 1, hence I would be more familiar with the finance term that I learnt from it.
So, with this two reasons, I strongly believe ytl can perform even better during the bottom of the economy circle.
Thursday, November 27, 2008
Wednesday, November 26, 2008
How to pick stock (part 12)
Fonics was my bad investment.
I bought since late 2005. I was fooled by the annual report written by the management. Their business relies on four main categories, but the biggest categories only gave a very low margin, reason being was it bargain power against customer was low.
Lesson learned
- don't invest in just listed company. Risk was too high.
- when you see the profit margin was dropping, most probably is caused by inefficiency of the company or caused by the tighter competition in that industry.
- when you see asset turnover is getting lower, it can be because of the company just started to invest more and revenue can't catch the apes or because of current business model cannot handle the current situation. Management need to do something
- when bargain power against customer was low, this became a bad thing for us, this was because what I wanted to invest in was the good company with good business prospect and good management. This was the only company that I wanted to hold for long term.
I bought since late 2005. I was fooled by the annual report written by the management. Their business relies on four main categories, but the biggest categories only gave a very low margin, reason being was it bargain power against customer was low.
Lesson learned
- don't invest in just listed company. Risk was too high.
- when you see the profit margin was dropping, most probably is caused by inefficiency of the company or caused by the tighter competition in that industry.
- when you see asset turnover is getting lower, it can be because of the company just started to invest more and revenue can't catch the apes or because of current business model cannot handle the current situation. Management need to do something
- when bargain power against customer was low, this became a bad thing for us, this was because what I wanted to invest in was the good company with good business prospect and good management. This was the only company that I wanted to hold for long term.
Tuesday, November 25, 2008
How to pick stock (part 11)
The second good investment I made successfully was mah sing. I was using cagr indicator and pe and roe to find out this stock.
First of all, it started to change its business model from developing middle end to become developing middle end to high end. I belive its investment strategy was quite good, means it was demand driven business.
With limited land bank and high asset turnover strategy, it started different strategy with other developer. Because of that now it become top 5 developer in malaysia in term of revenue.
Mah sing always develope the land with higher speed. Because of this, it can avoid the current hyper inflation on the construction cost by lock in the price.
Mah sing has a good management. And I believe with bigger shareholder based few years later, it can attract more institutional investors and obtain better credit rating, so that it can get a lowe interest rate loan.
First of all, it started to change its business model from developing middle end to become developing middle end to high end. I belive its investment strategy was quite good, means it was demand driven business.
With limited land bank and high asset turnover strategy, it started different strategy with other developer. Because of that now it become top 5 developer in malaysia in term of revenue.
Mah sing always develope the land with higher speed. Because of this, it can avoid the current hyper inflation on the construction cost by lock in the price.
Mah sing has a good management. And I believe with bigger shareholder based few years later, it can attract more institutional investors and obtain better credit rating, so that it can get a lowe interest rate loan.
Monday, November 24, 2008
How to pick stock (part 10)
The first time that I made a very good return on imvestmet was when I started learning investment on year 2005. With the small amount (few thousand), I started not to diversify my portfolio but focus only on less than three stocks at the same time.
I started to use roe, pe, cagr to find out the business that I thought was in high grow trend (actually this is so called momentum investing), and I did some sort of so called statistic analysis, I found out that if we could buy a company in growing stage and with low pe, we could actually earn money in bull market.
Since then, I filtered out with my searching criteria, and I had some lists. I tried to do some asset allocation.
On year 2005, with harimau's introduction, I bought topglove at very high price, which was rm5.00. Anyway, at that point of time, I didn't realized what the risk was. Fortunately, I sold it at higher price, at that point of time, the pe reaches more than pe, which I thought was a little bit crazy.
Why I chooses topglove at that time?
- the management wanted to be the top glove maker
- it started to expand the business to down stream, which means it can control the cost by itself.
- the big player in the market is getting lesser, it gives topglove bargain power to control the selling price
- it has a better efficiency system compared with other players.
Why I sold out?
I change target to mah sing, which was considered low pe, high grow.
I never regret on this investment because it teached me that a good investment not only because of the business itself, but also the price that I bought.
Always remember - price is what you pay, value is what you get.
I started to use roe, pe, cagr to find out the business that I thought was in high grow trend (actually this is so called momentum investing), and I did some sort of so called statistic analysis, I found out that if we could buy a company in growing stage and with low pe, we could actually earn money in bull market.
Since then, I filtered out with my searching criteria, and I had some lists. I tried to do some asset allocation.
On year 2005, with harimau's introduction, I bought topglove at very high price, which was rm5.00. Anyway, at that point of time, I didn't realized what the risk was. Fortunately, I sold it at higher price, at that point of time, the pe reaches more than pe, which I thought was a little bit crazy.
Why I chooses topglove at that time?
- the management wanted to be the top glove maker
- it started to expand the business to down stream, which means it can control the cost by itself.
- the big player in the market is getting lesser, it gives topglove bargain power to control the selling price
- it has a better efficiency system compared with other players.
Why I sold out?
I change target to mah sing, which was considered low pe, high grow.
I never regret on this investment because it teached me that a good investment not only because of the business itself, but also the price that I bought.
Always remember - price is what you pay, value is what you get.
Thursday, November 20, 2008
How to pick stock （part 9)
ROE in detail
Why i want to have a blog to concentrate on roe is because roe means how efficient on the management manage to earn more money with the capital given. It is a guideline for some investors including me to pick the stocks when I was start leaning.
Ok, now let me explain a little bit details on ROE. It is the combination of 3 elements
1. Net profit margin (net income / revenue)
It is a way to measure what is the bargain power or monopoly power for that company to sell a product in higher profit margin. In other word it could also due to the cost control by the company.
The trend on profit margin can tell us in which stage the products/services sold by the company. If the trend is going higher then we are to tell that the company is getting better in term of the business. Some reasons: economy of scales, cost control, bargain power.
So this is actually a very important factor for me when I choose a company. I would like to have a higher profit margin stock given the similar financial situation or same book size.
2. Asset turnover (revenue / asset )
Asset turnover is a tool to measure how efficient is the company to generate the revenue given the current asset. Normally this kind of company (higher asset turnover) would be a net cash flow company because they don't need a too big asset base to generate the business. This is second factor which I myself would like to focus on.
3. Equity multiplier( asset / equity)
This is leverage ratio, means how aggresive the company is to provide the asset for company to generate the revenue, and hence get get the profit from there.
I always think that this ratio should be between 0 to 0.50 in order to get a better credit rating as well as the business control, it doesn't mean that a bigger market cap company but how special is the company to aim a correct target and beat the rest competitors.
To be continued...
Why i want to have a blog to concentrate on roe is because roe means how efficient on the management manage to earn more money with the capital given. It is a guideline for some investors including me to pick the stocks when I was start leaning.
Ok, now let me explain a little bit details on ROE. It is the combination of 3 elements
1. Net profit margin (net income / revenue)
It is a way to measure what is the bargain power or monopoly power for that company to sell a product in higher profit margin. In other word it could also due to the cost control by the company.
The trend on profit margin can tell us in which stage the products/services sold by the company. If the trend is going higher then we are to tell that the company is getting better in term of the business. Some reasons: economy of scales, cost control, bargain power.
So this is actually a very important factor for me when I choose a company. I would like to have a higher profit margin stock given the similar financial situation or same book size.
2. Asset turnover (revenue / asset )
Asset turnover is a tool to measure how efficient is the company to generate the revenue given the current asset. Normally this kind of company (higher asset turnover) would be a net cash flow company because they don't need a too big asset base to generate the business. This is second factor which I myself would like to focus on.
3. Equity multiplier( asset / equity)
This is leverage ratio, means how aggresive the company is to provide the asset for company to generate the revenue, and hence get get the profit from there.
I always think that this ratio should be between 0 to 0.50 in order to get a better credit rating as well as the business control, it doesn't mean that a bigger market cap company but how special is the company to aim a correct target and beat the rest competitors.
To be continued...
How to pick stock (part 8)
Cash flow statement
Cash flow statement is increasinly important when you come to do the analysis. Basically it is divided by three elements,
CFO - operating cash flow
CFI - investing cash flow
CFF - financial cash flow
Of course, with these three elements, we are able to tell which stages is the company now. For a company which CFO minus CFI equal positive means that it has a very strong cash flow to support it, and it has some certain competetive advantage so that other competitor cannot overtake it.
With the positive cash flow, the management can decide whether to invest in bigger project or return back the excess cash to the shareholders.
So far from what I observe, cash flow statement is the most accurate part in the financial statement. I would strongly recommend you to focus more on this part.
Cash flow statement is increasinly important when you come to do the analysis. Basically it is divided by three elements,
CFO - operating cash flow
CFI - investing cash flow
CFF - financial cash flow
Of course, with these three elements, we are able to tell which stages is the company now. For a company which CFO minus CFI equal positive means that it has a very strong cash flow to support it, and it has some certain competetive advantage so that other competitor cannot overtake it.
With the positive cash flow, the management can decide whether to invest in bigger project or return back the excess cash to the shareholders.
So far from what I observe, cash flow statement is the most accurate part in the financial statement. I would strongly recommend you to focus more on this part.
How to pick stock (part 8)
Cash flow statement
Cash flow statement is increasinly important when you come to do the analysis. Basically it is divided by three elements,
CFO - operating cash flow
CFI - investing cash flow
CFF - financial cash flow
Of course, with these three elements, we are able to tell which stages is the company now. For a company which CFO minus CFI equal positive means that it has a very strong cash flow to support it, and it has some certain competetive advantage so that other competitor cannot overtake it.
With the positive cash flow, the management can decide whether to invest in bigger project or return back the excess cash to the shareholders.
So far from what I observe, cash flow statement is the most accurate part in the financial statement. I would strongly recommend you to focus more on this part.
Cash flow statement is increasinly important when you come to do the analysis. Basically it is divided by three elements,
CFO - operating cash flow
CFI - investing cash flow
CFF - financial cash flow
Of course, with these three elements, we are able to tell which stages is the company now. For a company which CFO minus CFI equal positive means that it has a very strong cash flow to support it, and it has some certain competetive advantage so that other competitor cannot overtake it.
With the positive cash flow, the management can decide whether to invest in bigger project or return back the excess cash to the shareholders.
So far from what I observe, cash flow statement is the most accurate part in the financial statement. I would strongly recommend you to focus more on this part.
Tuesday, November 18, 2008
How to pick stock (part 7)
Balance Sheet
Balance sheet is the document that access
The current financial situation of the company as well as long term prospect of the company. It tells us the performance of the company long back ago and how is it now.
The basic part here is asset = liabilities + equity
Asset
Asset is the total holdings under the company. In general, asset is a tool who can generate profit to the company. For example, car, buildings, equipment and so on.
There are two kind of assets, one is current asset and another one is fixed asset. Current asset means the asset which can give the benefit to the company within a year while fixed asset refers to the tool that give you benefit more than a year, such as the machine, buildings, equipments and so on.
Liabilities
Liabilities is the obligation of the users to pay the money back to its creditors. The more the liabilities, the more risky the company is, if and only if we compared it with the same category stock if else where equal.
Equity
Equity is the total shareholdings plus / minus retain earnings/loss. It is a good indicator whether the captial can support the revenue or not. Otherwise we would end up rise the capital by verificaion.
Balance sheet is the document that access
The current financial situation of the company as well as long term prospect of the company. It tells us the performance of the company long back ago and how is it now.
The basic part here is asset = liabilities + equity
Asset
Asset is the total holdings under the company. In general, asset is a tool who can generate profit to the company. For example, car, buildings, equipment and so on.
There are two kind of assets, one is current asset and another one is fixed asset. Current asset means the asset which can give the benefit to the company within a year while fixed asset refers to the tool that give you benefit more than a year, such as the machine, buildings, equipments and so on.
Liabilities
Liabilities is the obligation of the users to pay the money back to its creditors. The more the liabilities, the more risky the company is, if and only if we compared it with the same category stock if else where equal.
Equity
Equity is the total shareholdings plus / minus retain earnings/loss. It is a good indicator whether the captial can support the revenue or not. Otherwise we would end up rise the capital by verificaion.
Monday, November 17, 2008
Social networking and how mobile becomes another way of evolved
I just recently actively involved in the online social networking system, which is facebook.
What I did was just to download the facebook gadget from iTunes and installed into the mobile phone.
After that I can just easily do the connection and interaction with my friends. Just for example, I went for Vietnam trip, where I can easily took the photos by using the phone and uploaded to facebook.
Not only that, I can easily approve and send message to my friends. I can also easily knowing what my friends are doing now by viewing the post by them.
Ok, what I want to express here is that, the world is changing rapidly. With the power of social networking, we can perform the online marketing via advertisement, in various social networking. Based on some researches, the best marketing tools are via Internet.
To be continued...
What I did was just to download the facebook gadget from iTunes and installed into the mobile phone.
After that I can just easily do the connection and interaction with my friends. Just for example, I went for Vietnam trip, where I can easily took the photos by using the phone and uploaded to facebook.
Not only that, I can easily approve and send message to my friends. I can also easily knowing what my friends are doing now by viewing the post by them.
Ok, what I want to express here is that, the world is changing rapidly. With the power of social networking, we can perform the online marketing via advertisement, in various social networking. Based on some researches, the best marketing tools are via Internet.
To be continued...
How to pick stock (part 6)
Financial terms
There are a lot of financial term which I would like to explain it in the business way.
Current ratio
Current ratio = current asset / current liabilities. This is the measurement to check whether the current working capital can support the current situation. The higher the ratio the better the company. This is because with higher ratio, the lower posibility the company goes bankruptcy.
Net Profit ratio
Net profit margin ratio = net profit / revenue. This is a measurement to check whether does the company has the bargain power over its supplier and customer. Take for example, bat has very high profit margin is because of its business model in Malaysia. The higher the better.
Asset turnover
Asset turnover = revenue / asset. In other word, it tells us how fast or how effecient of the revenue been generated from the asset. The more higher the better.
Equity multiplier
Equity multiplier = asset / equity. This is leverage ratio. It is good if the current cash flow can support its growth, otherwis everyone will fall down again.
There are a lot of financial term which I would like to explain it in the business way.
Current ratio
Current ratio = current asset / current liabilities. This is the measurement to check whether the current working capital can support the current situation. The higher the ratio the better the company. This is because with higher ratio, the lower posibility the company goes bankruptcy.
Net Profit ratio
Net profit margin ratio = net profit / revenue. This is a measurement to check whether does the company has the bargain power over its supplier and customer. Take for example, bat has very high profit margin is because of its business model in Malaysia. The higher the better.
Asset turnover
Asset turnover = revenue / asset. In other word, it tells us how fast or how effecient of the revenue been generated from the asset. The more higher the better.
Equity multiplier
Equity multiplier = asset / equity. This is leverage ratio. It is good if the current cash flow can support its growth, otherwis everyone will fall down again.
Sunday, November 16, 2008
How to pick stock (part 5)
With the four years experience on practical gained from investing and three years of professional theory gained from CFA, I started to become more sophisticated investor.
Since year 2006, I began to set my stock picking philosophy, where I can show you here:
1. Never invest in a company that you do not understany throuroughly.
It can protect you from the begining of the investmet. There are too many so called investor whose investment period can actually less than one year or even one month or few days. This is the most dangerous risk when you started investing, as if you do not know the business that you are investing, then you will not know what is the instrinsic value inside it. For what contrast to the cut loss strategy, the more you understand the value of the company, the more you should invest in it when the price goes down. This helps me a lot espcially when the stock price goes down to my original buy price.
2.invest in strong financial status company or efficient company which is worth for long term holdings
This rule is to protect me from making a serious mistake to put a major investment into a single stock. Sometime when I think of putting a lot of money in it, I will think of future prospect of the company.
3. Buy at the reasonable price
There are few ways that we can know whether should our investment is done successfully. First, we must find out the intrinsic value. There are a lot of method to find out the intrinsic value, where I can share with you I'm another blog. Secondly, we must find out the margin of safety that we require. Take for example, when we get the intrinsic value, we could set 50% margin of safety, we can buy the stock when the stock price is less than 50% of the intrinsic value.
Based on this two, then we are able to justify the purchase price. We must always be patient to wait for the right price. Normally the right price always found in bear market, not bull market. So, I think now we can start to find out which company is worth to buy for long term.
4. Buy on the intangible asset - people and branding and system
The more I learned about the investment, the more I can make use of it to do the business. So far what I learned from there is we must have a good management team who can really help the shareholders in creating sustainable growth. I can have another blog to talk about this in detail.
5. Be nature (lately added)
This rule is just added as I learned from the Tao de ching. It teaches me that nothing is last forever, including our life, relationship, family, friends, career as well as our investment. This, we should always stay calm and rational when the market is volatile. It does not mean that we should be always contrary with others, but just don't be over react from outside. When you are earning, always prepare for the wost time, but when you are in the worst time, you should also look forward to the good time to come. I think this is the way we do business as well
After that, I can talk in detail of the financial terms, my experience of each stock, rules that I set, and finally talk about the attitude of investing.
To be Continued (part 6 - 9 financial terms) ...
To be continued (part 10 - 15 experience in each stock) ...
To be continued (part 16 - 20 rules that I set)...
To be continued (part 21 - 22 attitude of investing)...
Since year 2006, I began to set my stock picking philosophy, where I can show you here:
1. Never invest in a company that you do not understany throuroughly.
It can protect you from the begining of the investmet. There are too many so called investor whose investment period can actually less than one year or even one month or few days. This is the most dangerous risk when you started investing, as if you do not know the business that you are investing, then you will not know what is the instrinsic value inside it. For what contrast to the cut loss strategy, the more you understand the value of the company, the more you should invest in it when the price goes down. This helps me a lot espcially when the stock price goes down to my original buy price.
2.invest in strong financial status company or efficient company which is worth for long term holdings
This rule is to protect me from making a serious mistake to put a major investment into a single stock. Sometime when I think of putting a lot of money in it, I will think of future prospect of the company.
3. Buy at the reasonable price
There are few ways that we can know whether should our investment is done successfully. First, we must find out the intrinsic value. There are a lot of method to find out the intrinsic value, where I can share with you I'm another blog. Secondly, we must find out the margin of safety that we require. Take for example, when we get the intrinsic value, we could set 50% margin of safety, we can buy the stock when the stock price is less than 50% of the intrinsic value.
Based on this two, then we are able to justify the purchase price. We must always be patient to wait for the right price. Normally the right price always found in bear market, not bull market. So, I think now we can start to find out which company is worth to buy for long term.
4. Buy on the intangible asset - people and branding and system
The more I learned about the investment, the more I can make use of it to do the business. So far what I learned from there is we must have a good management team who can really help the shareholders in creating sustainable growth. I can have another blog to talk about this in detail.
5. Be nature (lately added)
This rule is just added as I learned from the Tao de ching. It teaches me that nothing is last forever, including our life, relationship, family, friends, career as well as our investment. This, we should always stay calm and rational when the market is volatile. It does not mean that we should be always contrary with others, but just don't be over react from outside. When you are earning, always prepare for the wost time, but when you are in the worst time, you should also look forward to the good time to come. I think this is the way we do business as well
After that, I can talk in detail of the financial terms, my experience of each stock, rules that I set, and finally talk about the attitude of investing.
To be Continued (part 6 - 9 financial terms) ...
To be continued (part 10 - 15 experience in each stock) ...
To be continued (part 16 - 20 rules that I set)...
To be continued (part 21 - 22 attitude of investing)...
Saturday, November 15, 2008
How to pick stock (part4)
On the way I invest, I learned a lot of financial term, it really helps me a lot. I started to use the financial term find out the stocks that fulfill my searching criteria that I explained earlier.
Some of the good return and bad return that I experienced other than topglove was:
1. Mahsing (good)
2. Rubhd (good)
3. Ytl (good)
4. Ytlpower (good)
5. Fonics (bad)
6. Megan (bad)
7. Public bank (good)
8. Ksl (bad)
9. Plenitude (good)
10. Digi (good)
I will explain to you on why I failed and why I success on the above investment in another blog. You can check my blog later.
Some of the good return and bad return that I experienced other than topglove was:
1. Mahsing (good)
2. Rubhd (good)
3. Ytl (good)
4. Ytlpower (good)
5. Fonics (bad)
6. Megan (bad)
7. Public bank (good)
8. Ksl (bad)
9. Plenitude (good)
10. Digi (good)
I will explain to you on why I failed and why I success on the above investment in another blog. You can check my blog later.
How to pick stock (part 3)
4.Dividend yield
Dividend is one of the way to access the current financial situation of the company or how the top management to decide the cash flow management. For example, if company has positive cash flow, it would be able to establish a good dividend policy, such as to distribute certain percentage of the earnings to the shareholders. Investors actually can also make the investmet decision based on their needs. Some investors who are conservative maybe can invest in low growth company with strong cash flow to lower the risk of capital loss by getting return by receiving dividends. Normally a well managed company would establish a stable dividend policy.
5. Debt ratio
Debt ratio is one of the key element when I make investment decision. It is calculated by divided the total asset by total debt or long term debt. This is a way of measurement of the current financial health status of the company. With this ratio analysis, we can detect how aggresive of that company to achieve higher glowth.
6. Current ratio
Current ratio is measured by divided the current liabilities with current assets. With this ratio, we are able to tell whether can the company survive in short term. I am actually conservative investor. So this is actually a good judgement to dEtermine whether should we take the risk of investing in that company.
To be continued...
Dividend is one of the way to access the current financial situation of the company or how the top management to decide the cash flow management. For example, if company has positive cash flow, it would be able to establish a good dividend policy, such as to distribute certain percentage of the earnings to the shareholders. Investors actually can also make the investmet decision based on their needs. Some investors who are conservative maybe can invest in low growth company with strong cash flow to lower the risk of capital loss by getting return by receiving dividends. Normally a well managed company would establish a stable dividend policy.
5. Debt ratio
Debt ratio is one of the key element when I make investment decision. It is calculated by divided the total asset by total debt or long term debt. This is a way of measurement of the current financial health status of the company. With this ratio analysis, we can detect how aggresive of that company to achieve higher glowth.
6. Current ratio
Current ratio is measured by divided the current liabilities with current assets. With this ratio, we are able to tell whether can the company survive in short term. I am actually conservative investor. So this is actually a good judgement to dEtermine whether should we take the risk of investing in that company.
To be continued...
Wednesday, November 12, 2008
How to pick stock (part 2)
After the top glove investment, it helped me a lot and I had learns some new terms, some of it really affected me a lot, such as ROE, PE, NTA, CAGR and so on which I will describe in more details in another blog later.
Financial term:
1. ROE - a measurement on how many cents the company earned when one dollar of equity spent. The higher it is, the better it is. However, we would need to take into consideration of other things after we take care of it.
2. PE - price per earning ratio. We normally invest based on future PE ratio. It determine when should we buy and sell.
3. NTA: the nta means net tangible assets. In other word, this is a measurement to the clients asset. Normally roe is derived from eps devided by nta.
To be continued...
Financial term:
1. ROE - a measurement on how many cents the company earned when one dollar of equity spent. The higher it is, the better it is. However, we would need to take into consideration of other things after we take care of it.
2. PE - price per earning ratio. We normally invest based on future PE ratio. It determine when should we buy and sell.
3. NTA: the nta means net tangible assets. In other word, this is a measurement to the clients asset. Normally roe is derived from eps devided by nta.
To be continued...
How to pick stock? ( part 1)
This is something that always in my mind since my first investment on year 1998. I was actively invest in Stock market since year 2004, as I made use of my internship period (three semesters) to learn a Lot of investment skills from cari, http://Chinese.cari.com.my.
Below is the way where how I picked the stock and how I changed the investment style.
1. Tips
At first, with the limited knowledge on investment, I was learning out the investment through the sharing of the net friends in the forum. I just follow what they said and I started to getting invested in then stock market. At that time, it was very quiet market, what I invested through was topglove.
Case: top glove
Top glove was growing very fast at that time, it grew up by opening up a lot of factories and took up a lot of oem businesses. At that point of time, SARS just happened and it made the world to be more cautious about the cleaniness of the environment. Another advantages that Malaysia glove industry enjoying was the electric tariff set by the government. This gave the opportunity to top glove to faster the growing processes.
Under dr. Lim leadership, they had made the vision of become number one glove maker in the world.
Buy when we look back, the pe ratio had been rocket high until it created room of dropping. Anyway, this was the first successful investment of mine in my life. I would like to thank harimau who like sharing with us last time.
Lesson learned:
1. It is good to invest in the company who just started growing instead of stabilize the growing period.
2. We must know when to sell if the stock price is much higher than intrinsic value even if it is a good investment.
3. We cannot build the self confident if we only follow what other people did.
4. It is always a chance to make a good investment, provided you know when to buy and when to sell.
Below is the way where how I picked the stock and how I changed the investment style.
1. Tips
At first, with the limited knowledge on investment, I was learning out the investment through the sharing of the net friends in the forum. I just follow what they said and I started to getting invested in then stock market. At that time, it was very quiet market, what I invested through was topglove.
Case: top glove
Top glove was growing very fast at that time, it grew up by opening up a lot of factories and took up a lot of oem businesses. At that point of time, SARS just happened and it made the world to be more cautious about the cleaniness of the environment. Another advantages that Malaysia glove industry enjoying was the electric tariff set by the government. This gave the opportunity to top glove to faster the growing processes.
Under dr. Lim leadership, they had made the vision of become number one glove maker in the world.
Buy when we look back, the pe ratio had been rocket high until it created room of dropping. Anyway, this was the first successful investment of mine in my life. I would like to thank harimau who like sharing with us last time.
Lesson learned:
1. It is good to invest in the company who just started growing instead of stabilize the growing period.
2. We must know when to sell if the stock price is much higher than intrinsic value even if it is a good investment.
3. We cannot build the self confident if we only follow what other people did.
4. It is always a chance to make a good investment, provided you know when to buy and when to sell.
What is next after the crisis?
There is some forecasts by my chairman, that the current crisis not only gives the impact on the stock market, but it also creates long period of recession to most of the europe countries and america.
This cisis is different from Asia crisis on year 1998, as it started first in America and later on in Europe. The distrust of each bank has increased the libor or so called interbank interest rate. As of now, most of the government has tried to increase the money supply to reduce the interest rate and also try to calm the public down on the nervousity of current crisis.
What I can forsee is that the so called hot money would be again come out to seek the opportunity of investment especially most of the prices of the asset, such as commodities, securities, derivatives, has reached the historical low.
I do not know how long is the recession is, and I am not sure will it be a depression. But what my concern is with the greater money supply, it helps to create a sustainable inflation. With the inflation and growth of population and the demography changes, there would be certain industries benefit from the crisis.
What I believe is that, with the smartest and greedyness of the human natures, I can forsee more and more innovative products would be introduced to the public. In the end, who is always stay at it's circle of competency wins.
This cisis is different from Asia crisis on year 1998, as it started first in America and later on in Europe. The distrust of each bank has increased the libor or so called interbank interest rate. As of now, most of the government has tried to increase the money supply to reduce the interest rate and also try to calm the public down on the nervousity of current crisis.
What I can forsee is that the so called hot money would be again come out to seek the opportunity of investment especially most of the prices of the asset, such as commodities, securities, derivatives, has reached the historical low.
I do not know how long is the recession is, and I am not sure will it be a depression. But what my concern is with the greater money supply, it helps to create a sustainable inflation. With the inflation and growth of population and the demography changes, there would be certain industries benefit from the crisis.
What I believe is that, with the smartest and greedyness of the human natures, I can forsee more and more innovative products would be introduced to the public. In the end, who is always stay at it's circle of competency wins.
The world is curved - summary after read
This book is written by d smirk on year 2008. It mentioned about the current financial world has a lot of uncertainty eventhough globalization happens in every where, it seems like unpredictable and out of the control by each central bank.
This book started up with the current financial crisis - subprime crisis in US, and took more example to explain the uncertainty of current financial situation. The securitization of the loan had created the bubble of financial market since year 1982 and because of the globalization, the whole world cannot escape or immune from the economy slow down.
The author used china, England, and japan ad well as italy, Germany to further elaborate the impact of the global money to each country. For example japan, the low interest rate provided by the japan central bank has helped the export industry to stay competent with the rest company in the world. Wheras it also created oportunity for housewives to invest in higher return asset. This make japan housewives but not central bank to control the economy of japan.
As a conclusion, I believe that crisis means disaster but also means opportunity. It creates an opportunity to central bank in each countries to tighten the regulation and hence create a more efficient yet regulated market.
Another thing is that, we should also know how to diversify our asset into different asset classes, so that we can reduce the systematic risk or market risk involved.
This book started up with the current financial crisis - subprime crisis in US, and took more example to explain the uncertainty of current financial situation. The securitization of the loan had created the bubble of financial market since year 1982 and because of the globalization, the whole world cannot escape or immune from the economy slow down.
The author used china, England, and japan ad well as italy, Germany to further elaborate the impact of the global money to each country. For example japan, the low interest rate provided by the japan central bank has helped the export industry to stay competent with the rest company in the world. Wheras it also created oportunity for housewives to invest in higher return asset. This make japan housewives but not central bank to control the economy of japan.
As a conclusion, I believe that crisis means disaster but also means opportunity. It creates an opportunity to central bank in each countries to tighten the regulation and hence create a more efficient yet regulated market.
Another thing is that, we should also know how to diversify our asset into different asset classes, so that we can reduce the systematic risk or market risk involved.
Tuesday, November 11, 2008
Mrt
Singapore public transport system is famous among the world. The smrt company is currently doing the upgrade on it's train where by you can easily tell where the location you are in now by looking at the light in the map on the train.
All the costs are bear under Smrt itself as a added value service provided to the public. Of course, it not only can help locals but also foreigners on knowing where they are, and providing a more efficient and effective way on the travel.
According to the source, the project is targeted to be implemented by year 2010. What I can forsee is that with the IR to be launched by 2010, we can expert there will be more people who is taking the public transport.
Hopefully with the well planned system, Singapore can achieve the status of global city, and we can benefit from there.
All the costs are bear under Smrt itself as a added value service provided to the public. Of course, it not only can help locals but also foreigners on knowing where they are, and providing a more efficient and effective way on the travel.
According to the source, the project is targeted to be implemented by year 2010. What I can forsee is that with the IR to be launched by 2010, we can expert there will be more people who is taking the public transport.
Hopefully with the well planned system, Singapore can achieve the status of global city, and we can benefit from there.
Monday, November 10, 2008
Mah sing (bursa Malaysia) update
MAH SING is my long term investment since year 2004. And it proved me that the its business model can survive in this competitive world.
Currently, MAH SING has 16 projects on hand, and it has recently acquired a land in setapak for 13million, for a GDP of 118m. It is quite a awesome move where it ventures into KL to develop the commercial property.
It is about 5.4 acres freehold land. So I believe it is a good investment provided the reasonable purchase price.
Provided the outlay of 13million and GDP of 118m, it is a good opportunity and meet the requirement of MAH SING business model, which is high asset turnover.
This is actually the second investment of MAH SING since this year so far. I would forsee MAH SING would start a bigger investment by next year once it finishes the Icon projects in Jalan Tun Razak.
With this project, I believe It can produce a discounted cash flow of 50m+-, and hence enhance the Nta by 0.08rm.
Conclusion:
If Mah Sing keep invest using small outflow, with the cash of over 100m, I believe it can go for 1B project in shorter period.
Currently, MAH SING has 16 projects on hand, and it has recently acquired a land in setapak for 13million, for a GDP of 118m. It is quite a awesome move where it ventures into KL to develop the commercial property.
It is about 5.4 acres freehold land. So I believe it is a good investment provided the reasonable purchase price.
Provided the outlay of 13million and GDP of 118m, it is a good opportunity and meet the requirement of MAH SING business model, which is high asset turnover.
This is actually the second investment of MAH SING since this year so far. I would forsee MAH SING would start a bigger investment by next year once it finishes the Icon projects in Jalan Tun Razak.
With this project, I believe It can produce a discounted cash flow of 50m+-, and hence enhance the Nta by 0.08rm.
Conclusion:
If Mah Sing keep invest using small outflow, with the cash of over 100m, I believe it can go for 1B project in shorter period.
My background
Some of my background:
I was born in Malaysia, one of the south east asia countries, where it has a lot of natural resources, such as petrol, palm oils, and others.
My first investment was in year 1998 (financial crisis). The first investment became failure when the firm that I invested went downlisted due to bankrupcy. Since then, I learnt that I could not buy the penny stock. And when I think back, I was very happy that my first investment was failed, otherwise my phillosophy of investment would not changed.
My second investment was in year 2002/03, when I was Univestity student. This was a good learning chance for me to learn that we could not buy stocks at the bull market (peak period), and if so, we must buy a good stock where its business can grow steadily in long run.
Since then, I started to learn more investment skills, especially when I learn from Cari (http://chinese.cari.com.my ). From there, I learnt about fundamental analysis (e.g. ROE, PE, NTA, etc) and I would also know how to determine whether is it a good investment or not by accessing the current stock price and the expected return.
I again improved myself by attending the CFA Courses on year 2005 and passed level I on the same year itself. My main focus is property industry, service industry, consumer industry, and financial industry.
Currently my entire portfolio had reached 6 figures (in RM). Although it is just a small amount for many people, but it took me about 5 years from 4 figures to 6 figures, by saving and investing.
I would like to use 7 years or less to achive my dream of become a millionaire in Malaysia. Hence I would like to help more people on investing and be a better man everyday.
Welcome to give some comments on my blog, so that I can also learn from you. It is the world of collaboration, I would like to thank to every friend who gives me support, and allow me to still survive in the world of investment.
Regards,
Jack Phang
I was born in Malaysia, one of the south east asia countries, where it has a lot of natural resources, such as petrol, palm oils, and others.
My first investment was in year 1998 (financial crisis). The first investment became failure when the firm that I invested went downlisted due to bankrupcy. Since then, I learnt that I could not buy the penny stock. And when I think back, I was very happy that my first investment was failed, otherwise my phillosophy of investment would not changed.
My second investment was in year 2002/03, when I was Univestity student. This was a good learning chance for me to learn that we could not buy stocks at the bull market (peak period), and if so, we must buy a good stock where its business can grow steadily in long run.
Since then, I started to learn more investment skills, especially when I learn from Cari (http://chinese.cari.com.my ). From there, I learnt about fundamental analysis (e.g. ROE, PE, NTA, etc) and I would also know how to determine whether is it a good investment or not by accessing the current stock price and the expected return.
I again improved myself by attending the CFA Courses on year 2005 and passed level I on the same year itself. My main focus is property industry, service industry, consumer industry, and financial industry.
Currently my entire portfolio had reached 6 figures (in RM). Although it is just a small amount for many people, but it took me about 5 years from 4 figures to 6 figures, by saving and investing.
I would like to use 7 years or less to achive my dream of become a millionaire in Malaysia. Hence I would like to help more people on investing and be a better man everyday.
Welcome to give some comments on my blog, so that I can also learn from you. It is the world of collaboration, I would like to thank to every friend who gives me support, and allow me to still survive in the world of investment.
Regards,
Jack Phang
Sunday, November 9, 2008
Some background of Jack Phang
Myself:
Start investment since 98 (Asia Financial Crisis), and then learnt a lot of investment skills in Cari (http://chinese.cari.com.my), and know a lot of friends who are pro in equity investment.
I would like to make use of the latest technology to share with all the friends who like and passion in investment, especially in equity investment.
I'm currently working in Singapore, as a Business Analyst, I would like to thank to my family, especially my parents who grew me up and provide me a very good education.
I am welcome every friend who visit my blog to give some comments on my blog and introduce my blog to other friends who also love in investing.
Regards,
Jack Phang
Start investment since 98 (Asia Financial Crisis), and then learnt a lot of investment skills in Cari (http://chinese.cari.com.my), and know a lot of friends who are pro in equity investment.
I would like to make use of the latest technology to share with all the friends who like and passion in investment, especially in equity investment.
I'm currently working in Singapore, as a Business Analyst, I would like to thank to my family, especially my parents who grew me up and provide me a very good education.
I am welcome every friend who visit my blog to give some comments on my blog and introduce my blog to other friends who also love in investing.
Regards,
Jack Phang
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