Malaysia-Finance Blogspot

Guess Who Will Be Moving Up The Richest List Fastest This Year

2012-01-31T02:07:00.000+08:00

The snippet below was taken from Forbes magazine:

Malaysia's Richest

#9 Vincent Tan

Net Worth	$1.25 billion	Source of Wealth	diversified
Age	58	Marital Status	Married, 11 children

Self-made entrepreneur runs conglomerate Berjaya Group, but fortune sank by almost a quarter over the past year as shares stumbled. Owns social networking website Friendster.com and bought shares of Facebook through his Internet company, MOL.com. Failed to get a sports betting license from the government. Hates golf but loves scuba diving and working out at the gym.

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Its very hard to move up the top ten richest list in Malaysia as the gap from one to the other is in the billions. Supposedly, Vincent Tan is #9 with $1.25bn (RM3.75bn). There is a very strong likelihood that Vincent Tan will move up at least two rungs this year. At #8 is Syed Mokhtar with $2.5bn while at #7 is Yeoh Tiong Lay with $2.7bn. Dislodging #6 will be difficult as Teh Hiong Piow has $4.7bn.

Chances are high that Vincent will get to #7 at least this year because his stake in Friendster was swapped totally into Facebook shares. Rough estimates has figured his stake in Facebook at 1%. Facebook is about to list soon at a valuation of at least $90bn, and should get to $120bn-$130bn when it finally trades (if market does not collapse). His stake alone will add at least $1bn to his total.

The other major play is his stake in Cosway, which is rumoured to be sold soon for around RM2bn. Then there is the realisation of his stake in U Mobile, which may be listed as well this year. All said, Vincent may add $1.5bn-$1.8bn (RM4.5-RM5.4bn) to his net worth this year.

How has 2012 been for you so far?

Then Why Have The SC Task Force In The First Place?

2012-01-30T16:47:00.000+08:00

Well, we probably won't see this kind of business reporting in local media, so have to rely on The Straits Times Singapore.

SC task force found Sime Darby triggered E&O general offer

By Yow Hong Chieh

January 30, 2012

KUALA LUMPUR, Jan 30 — A Securities Commission (SC) task force found that Sime Darby Bhd was obliged to make a general offer for Eastern & Oriental (E&O) Bhd shares after acquiring a 30 per cent stake in the property developer but was superseded by the regulator’s top ruling authority.

Singapore’s The Straits Times reported that the task force was of the view that a general offer obligation had been triggered as a new “concert party” was created between Sime Darby and E&O managing director Datuk Terry Tham, who jointly controlled more than 33 per cent in the property concern after the deal.

Malaysia’s takeover rules stipulate that any party that acquires more than a 33 per cent interest in a publicly-listed entity must carry out a general offer for the remaining shares.

A general offer can also be triggered if a new party buys less than 33 per cent but secures management control of the target company.

But the SC’s final ruling three-member committee ruled “in a majority decision” there was no general offer obligation as Sime Darby and Tham were not acting in concert, according to an affidavit by the agency’s second-most senior commissioner Datuk Francis Tan, which was sighted by the Singapore daily.

The committee also accepted the task force’s recommendation that the three groups which sold the blocks of E&O shares to Sime Darby did not collectively control the company and that the disposal did not trigger a general offer.

Sime Darby purchased its controlling 30 per cent interest from three major shareholders — Tham, Singapore’s GK Goh Holdings and a group of investors led by businessman Tan Sri Wan Azmi Wan Hamzah — at the end of August last year in a deal that valued E&O shares at RM2.30 a piece.

The purchase price represented a 60 per cent premium over the value of the shares in the company on the open market when the deal was announced.

The RM776 million deal triggered unease over the widely perceived coddling by the agency of large state-controlled companies at the expense of minority shareholders when exercising its authority on corporate takeovers.

The SC ruled six weeks after Sime Darby’s purchase of the three blocks that the plantation-based conglomerate did not have to make a general offer, prompting E&O minority shareholder Michael Chow to sue the SC for failing to compel Sime Darby to make a general offer for the rest of the shares.

The legal suit could renew debate over the SC’s handling of alleged irregular trading activities and will put pressure on SC chairman Tan Sri Zarinah Anwar, whose husband, the E&O chairman, raised his personal stock holdings in the company just weeks before Sime Darby announced the acquisition.

The SC has also filed an application to recuse the judge hearing the suit as he used to be with the regulator.

Smarter People Own More Stocks

2012-01-29T09:16:00.000+08:00

Business Times - 26 Jan 2012

Smarter people own more stocks, says study
It finds a direct link between IQ and market participation

( NEW YORK ) The smarter you are, the more stock you probably own, according to researchers who say they found a direct link between IQ and equity market participation.

Intelligence, as measured by tests given to 158,044 Finnish soldiers over 19 years, outweighed income in determining whether someone owns shares and how many companies he invests in. Among draftees scoring highest on the exams, the rate of ownership later in life was 21 percentage points above those who tested lowest, researchers found. The study, published in last month's Journal of Finance, ignored bonds and other investments.

Economists have debated for decades what they call the participation puzzle, trying to explain why more people don't take advantage of the higher returns stocks have historically paid on savings. As few as 51 per cent of American households own them, a 2009 study by the Federal Reserve found. Individual investors have pulled record cash out of US equity mutual funds in the last five years as shares suffered the worst bear market since the 1930s.

'It's what we see anecdotally: higher-IQ investors tend to be more willing to commit financial resources, to put skin in the game,' said Jason Hsu, chief investment officer at Research Affiliates. 'You can generalise a whole literature on this. It seems to suggest that whatever attributes are driving people to not participate in the stock market are related to the cost of processing financial information.'

Mark Grinblatt of the University of California , Los Angeles , Matti Keloharju of Aalto University in Espoo and Helsinki , Finland , and Juhani Linnainmaa at the University of Chicago compared results from intelligence tests given by the Finnish military between 1982 and 2001 to government records showing investments the draftees later held. They found the rate of stock ownership for people with the lowest scores trailed those with the highest even after adjusting for wealth, income, age and profession.

While intelligence influenced things that might naturally increase equity ownership such as wealth and income, the authors said IQ determined who owned the most stocks within those categories as well. Among the 10 per cent of individuals with the highest salary, 'IQ significantly predicts participation' in the stock market, they wrote.

For example, people in the highest-income ranking who scored lowest on the test had a rate of equity market participation that was 15.7 percentage points lower than those with the highest IQ.

'If you look at the significance of IQ related to other factors like income or wealth, certainly it plays a very large role,' Mr Keloharju, a finance professor at Aalto, said. 'It's very difficult to get around that problem, but the results are so strong here. We are playing with lots of different controls and lots of different specifications, and all the time things work really well.'

American economist Harry Markowitz won a Nobel Prize in 1990 for his theory that owning a larger variety of assets tended to maximise returns for a certain amount of risk. The 2009 study by the Fed found that 51.1 per cent of American families own stocks directly or indirectly, and of those who do, 36 per cent have shares in one company.

'It's difficult to justify why someone wouldn't invest in the stock market, knowing what a good deal it has been,' said Mr Linnainmaa, a co-author of the study from the University of Chicago's Booth School of Business. 'The classical explanations for non-participation have been participation costs. It's not just that it may be expensive to buy stocks and mutual funds, but people may not have enough knowledge about them.'

Finnish soldiers were an ideal sample because differences in race, schooling and market access are minimised, the authors said. Draftees were about 20 years old when they were given 120 questions in math, language and logic. The authors divided the results into rankings and compared them with stock ownership records. People who don't serve in the country's military such as women weren't in the sample.

'There is an older literature on whether SAT scores of an investment manager's college helps predict his or her success,' Robert Shiller, an economics professor at Yale University and co-creator of the S&P/Case-Shiller home price index, said in an e-mail. 'This paper has a much better measure of intelligence,' and the 'results are therefore a significant advance', he wrote.

Finnish draftees aren't representative of typical investors, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds. IQ is a function of culture and shouldn't be generalised across borders, he said. The authors also failed to discuss whether the test given to the soldiers was a valid way to grade thinking.

Finland's lack of ethnic diversity 'invalidates it for extrapolating it to other cultures', he said. 'That makes it that much more inappropriate to draw inferences from it about other cultures.'

The study's authors said the findings have implications for social policy. Avoiding stock investments cuts returns and may widen income gaps, they said. Individuals scoring lowest on the tests who still owned equities earned as much as 33 basis points, or 0.33 percentage point, a year less than the highest scorers. One way governments could promote better savings might be with plans that let people opt out of stocks, like 401(k) plans, as opposed to opting in, said Mr Keloharju.

'If you look at these people over time, people with higher IQ scores and stocks become wealthier and wealthier at a much faster rate than people with lower IQ scores,' said Mr Linnainmaa. 'It makes them worse off in the long run, even more so than the difference in income.'

Mr Hsu of Research Affiliates said an explanation for why draftees with lower test scores owned less stock is that they found it harder and more expensive to receive financial education. Getting people information on investing at a younger age may help limit the disparity, he said. -- Bloomberg

SC and The Upcoming Private Retirement Scheme

2012-01-26T09:59:00.000+08:00

Managers can now apply for licences to provide products under Malaysia’s proposed private retirement scheme. The Securities Commission answers AsianInvestor's questions about how the system will work.

By Joe Marsh | 26 January 2012

In December, Malaysia’s Securities Commission published eligibility requirements for asset managers to gain a product provider licence under the country’s long-awaited private retirement scheme (PRS).

Ranjit Ajit Singh, managing director at the Securities Commission (SC), here confirms and clarifies some key points for AsianInvestor.

A feature looking at the PRS in detail will appear in the upcoming February issue of AsianInvestor magazine.

AsianInvestor: What does the SC see as the main reasons to set up a voluntary private retirement scheme? Why would (and should) people use the scheme in addition to the existing Employees Pension Fund?
Ranjit Ajit Singh: A well supervised and regulated private retirement scheme (PRS) that facilitates greater accumulation of post-retirement savings can play an important role within the overall pension landscape.

Malaysia’s PRS aims to promote the welfare of the population at retirement through a robust multi-pillar pension framework. The SC is reviewing the existing retirement landscape to make recommendations within the context of developing the private pension industry, which will complement the mandatory contribution to our existing Employees Provident Fund.

Can you summarise the main points of the PRS? For example, rules on contributions, tax allowances, plus the main guidelines/requirements for asset managers providing products.

Private retirement schemes (PRSs) are long-term retirement schemes that contain a range of funds and are offered by approved PRS providers. The PRS framework is intended to provide flexible and convenient fund options for use, by both employers and individuals with different risk-return profiles.

Contributors will be able to control their private pension accounts in terms of investment diversification, portability between providers and flexible payout options. In this respect, the right to choose and to change investment options, as well as providers, is an integral element of the PRS framework.

The tax incentives provide personal tax relief of up to RM3,000 ($967) per annum on individual contributions to approved PRS schemes, as well as tax deductions for employers for contributions above the statutory rate, up to 19% of employees’ salaries. Tax exemption will also be provided on income received by funds within the PRS schemes.

It has been said that the SC will particularly want to see large, experienced asset managers applying to be part of the PRS. Do you have any comment on that?

Only quality private-sector entities with the required expertise in pension fund management or retail fund management entities that meet the relevant standards and requirements imposed will be approved. Eligibility requirements include capital requirements, track record, conduct history and risk management controls.

Applicants will need to outline their business model, such as the proposed range of funds, indicative fees and the charges structure, as well as their resourcing capabilities, systems and process capabilities and member servicing.

Qualitative factors will also be taken into consideration, such as governance structure, reputation and professional standing, as well as track record and commitment to grow the PRS industry.

I understand that applications to obtain a licence to be a provider under the PRS must be in by February 15. What is the likely timeframe after that?
The closing date for licence applications is February 15. The evaluation and selection process will include an examination of the proposed range of funds to be offered by each applicant. On approval as a PRS provider, the SC would then undertake a separate process to approve the PRS itself and to authorise all the funds under the scheme.

PRS providers would be required to offer dedicated retirement funds under the scheme. Other key steps towards full operation of the framework include approving the scheme trustees and the distribution framework to ensure professional conduct and suitability of recommendations made in respect of the PRS to members.

How many provider licences will be approved under the scheme?
That will depend on the applicants and those who meet the criteria. Our primary objective is to have qualified and experienced providers, and these can be institutional or retail as long as they meet the criteria and demonstrate the capabilities to offer PRSs.

The provider-eligibility guidelines are now largely final, but the investment guidelines are still to be finalised – what is still to be ironed out?
As part of the implementation process, sub-working groups have been formed and continuous engagement and consultations are being held with experts – local and foreign, government authorities and industry players. We will finalise the guidelines after this process is complete.

Does the PRS have to be set up as a trust structure?
The PRS will operate as a trust structure, with the scheme trustee having fiduciary duties towards the members, including ensuring that the assets of the funds are segregated from the PRS provider. The schemes will therefore be segregated from the fund provider to ensure that contributors’ assets are protected and under the control of the trustee.

What are the rules on withdrawals from the PRS?
These are being finalised in consultation with relevant parties, including the tax authorities.

Commentary On Selected Stocks

2012-01-26T01:11:00.000+08:00

Hibiscus - There have been people warning me not to recommend this counter when I did so at 70 sen, 80 sen ... I like their projects, but seriously, they have yet to strike oil. They went limit up yesterday briefly, I wash my hands clean from this counter. Some monies are not for us to make. The stock looks very cornered.

CanOne/Kian Joo - Transaction finally went through. Upside would be around RM2.50 at least. I got so many nasty emails asking me to shut up on CanOne, I refused to print them because it was personal and not looking at the facts of the matter. Kian Joo would also go up in tandem as the uncertainty to extracting synergies from both companies are now in play. Possibly Box Pak will be sold. Although I did not think it was prudent, apparently the grapevine is very certain that there will be a G.O. for Kian Joo, which should be at least RM2.40-2.60. You get things right, nobody says a thing, you get something wrong, they whack you as if you were managing their funds. Lighten up people, you follow at your peril. You don't like, don't read la, what is so difficult about that.

MAS - If you must trade, I think MAS is OK. Now that AirAsia has reached its limit on foreign funds shareholdings level, it can only go down not up. That being the case, MAS may have a bit of upside even though I don't really like MAS.

MBSB - It was a good run but the business model remains flawed. I would stay away from the stock above RM2.00.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. I may already have shares in the above mentioned stock/s. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

The Lowdown On China-Stocks On Bursa - Just A View

2012-01-25T09:44:00.001+08:00

You open a conversation topic on Chinese stocks listed on Bursa, you see most people shaking their heads. Most have been burned, and burned royally despite following Benjamin Graham's rules of investing. Well, you have low PER relative to profit growth, most are still registering decent earnings growth. But none are willing to pay out a decent dividend despite having a substantive amount of cash. In fact, what has been more galling was they even had the audacity to push through rights issue.

They drop and drop, even though syndicates have been roped in, they still drop. For the past 3 years or so, the news surrounding China companies listed overseas have been appalling. There have been numerous scams and accounting fraud with China companies using RTO to get listed in the US. The seemingly "clean" SGX has not been spared, last count there were 6 China firms listed there that have gone "bust literally" or have tons of shenanigans like in an Irish fairy tale.

Are those listed on Bursa a ticking time bomb?
Well, I don't know really, but so far so good despite the weak share prices for these companies. If you go by percentage of troubled overseas China listed firms, at least 1 out 5 would have collapsed by now. Why SGX had so much problems with China firms and not Bursa? Well, SGX, being a play by the rules entity, relied totally on the sponsors/IBs to bring forth these issues. If the companies can be faulted later on for accounting fraud or related misdemeanours, then SGX will throw the book on the sponsors/IBs and directors. I think Bursa/SC have traveled the extra mile in ensuring these China firms are genuine, most if not all have been "site-visited" by them. The reliance on sponsors/IBs have not been as great for Malaysia as in the US or Singapore. Notch one for Bursa/SC. (I hope no China stock will get busted right after I wrote this, but knowing Murphy's Law, that is probably what will happen).

Excuses and Reasons, and Orcam's Razor
You can dig and dig at the management for reasons for their underperforming shares. There have been excuses after excuses. One, you can say that the sponsors or parties (VC/PE firms) bringing the stock to Bursa have used the route to sell their shares to realise their gains. Two, they needed to keep cash as the bulk of their transactions are with small vendors and suppliers that want to deal in cash. Three, they do not wish to pay out good dividends as they want to reinvest for future growth. Four, they seem to have no desire to buyback their own shares at 2-3x PER??!!

When share price keeps falling and the reasons and postulations given are numerous, according to Orcam's Razor, in such situations, the simplest explanation is probably the truth. The simple explanation is that maybe the figures are a sham. Now, I used to hold that view till my recent new findings, so hold your horses.

The Real Owners?
This is probably just an opinion but I have heard enough to surmise that the registered owners are, more than likely, not the real beneficial owners of these China shares. The Bursa and SC can go and try to find out more. Don't shoot me, I am just the messenger.

For a China company to list overseas, they need this "paper license" called the "wufi", usually from their municipality or state. I am sure you can see where this is headed. Sponsors are usually some smart people piecing a few companies together to get the "wufi". In most cases the ones with the designation of CEO or even Chairman owns very little of the company. The bulk are supposedly held by the "state chiefs and their underlings". We in Malaysia can easily understand why this works, don't we. To the "chieftains", this is an easy way to regulate for paper profits and also transfer some wealth overseas.

That is why you do not see these companies getting huge bank loans, and they want to keep cash at all levels. Maybe its easier to loot the company of money by expanding and taking on new projects as we all know we can always skim the 20%-30% from any projects undertaken. Maybe.

However, I am not saying all these companies are sinister. At the end of the day, more than likely, the management's hands are tied. There is probably very little they can do (without the "approval from real owners"). This is also something we Malaysians are very familiar with, yes "Proxy"!!!

XDL
Now finally a company goes ahead and does something. Their bonus and warrants issue is a move in the right direction. Some have frowned on the private placement, but why should you frown, they are not placing to you. In fact, having a private placement could be the very trigger that some parties have managed to engage the "real owners" and go through a proper "value creation" exercise, hence they themselves would have secured the parties for the private placement.

Significance
I cannot say this with greater effect. If the hypotheses are true, which means at least most or all of the companies on Bursa are not fraudulent, and to get XDL going through this phase of value creation, which I think will be wildly successful. This could be the catalyst that is needed for the rest of the China companies listed on Bursa to do likewise. As things stand, none of the China firms on Bursa are "fraudulent yet", maybe none are. If enough of them go through the value creation steps led by XDL, it could very well lift Bursa as the "best exchange to list China firms". If this is all true and good, then Bursa and SC must continue to make doubly sure that future China listing go through even more stringent listing checks and balances. So far so good, even with depressed share prices, at least we do not have a total bust up (yet).

If all parties play their cards right, the right playing field will attract the right crowd. This is a chance to take the next step forward for all parties involved.

The Longest Wait For A Food Stall In Ipoh

2012-01-21T09:23:00.000+08:00

I probably never did write much about this food stall because its already soooo damn hard to get food here. Normally I have to wait 30 minutes at least. Well, thanks to the CNY holidays, its more like 1 hour for my bowl of curry mee (Ipoh style).

Is this the most sought after hawker food stall in Ipoh, probably. Why, its got this silly combination of chicken, mee, meehoon, its distinctive curry soup base, barbecue pork, a bit of pork parts, the crunchy siew yoke ... all topped with its stupefyingly good curry oil mix. Its all in the curry oil mix.

A HK entrepreneur bought the sole rights to sell the same stuff in HK for an undisclosed sum, its still doing roaring business in HK. I think they still ship the curry oil mix over.

If you are there, you gotta take a look at their menu ... its damn original.

Still, one hour is still worth the wait. Don't know what it is, its intoxicating, spicy and pretty hot, plus addictive ... but damn slow service man!!!

Kung Hei Fatt Choi

2012-01-20T22:57:00.000+08:00

Below is the actual 24K gold carving signifying the year 2012. Too much money, can go to HK to buy this. Sun Leen Jhun Phou!!! Sum Seong See Sing!!!

CSLA Feng Shui Chart 2012

2012-01-20T15:55:00.002+08:00

Adopt A Dog, People

2012-01-19T16:39:00.000+08:00

Dog owners and dog lovers will shed tears for sure because they know its true and the scene will be the same if the same thing befall us.

Beating The Market

2012-01-19T01:29:00.000+08:00

How to beat the market and become a super investor

By Koon Yew Yin

Risks in doing business:

It is important to stress that all businesses involve risk; hence the selection of shares is also a risky business. This is not the same order of risk as may be involved in going to the casino or betting on the four digits which in 90-99 % or even more of the cases, results in the patron losing his money, if not his pants.

Picking winning stocks means that we pick the companies that can meet the constant challenges of competition, supply and demand, change of fashion and style design, obsolete stocks write off, etc. There are also unforeseen factors such as variation in interest rates, import and export restriction, foreign exchange variation, change in Government regulations, etc. Inclement weather such as flooding affects production as we have seen in Bangkok so that even the most well run of companies such as Toyata and Honda cannot escape it.

Best form of investment

In my view, stocks are the best form of investment. They are tax free, have no management problem, and you can reduce or liquidate all your holdings at any time. There is a classical saying in the market - “You can buy the winning horse after the race”. This means that you can still buy a good share after the company has announced its profit. This does not mean that stocks are entirely risk-free

Fundamentals of Stock Selection

The basic fundamentals for share selection are P/E ratio, NTA, Revenue, cash flow etc. How important are these factors?

The most important criterion is profit growth prospect. Never buy any share if the company cannot make increasing profits. You must buy shares that Fund managers are interested. They are the movers and shakers. Do not buy too much of illiquid shares because it is cheap. It is cheap for some reasons which may keep it at basement prices.

The main reasons why share prices go up include the following:

a. Exceptionally good profit growth prospect

b. Fund managers must be interested, liquidity, publicity etc.

c. Dividends are an important catalyst for moving share prices up

d. Unexpected good news of profit, bonus issues etc. will push up share prices.

When to Sell

When to sell? Do not worry about the daily share price fluctuation if you have a target price. Quite often the share you hold can move up rapidly and continues to go up. You must remember that no share can go up indefinitely for whatever reason. Sell when you are not willing to buy at the price or the reason to buy is no longer valid. Remember you must sell so that you can have funds to buy back during correction. If the fundamentals have not changed, the share price will go up again.

What to Buy

After having seen so many unexpected surprises in the stock market, I consider the safest shares to invest are undervalued oil palm shares. The reasons are:-

a. The production cost for CPO is about Rm 1,300 per ton and the average selling price has been more than double the production cost in the last 10 years or more. The average CPO price for 2011 is more than Rm 3,000 per ton. Which business can offer such big profit margins?

b. The demand and profit are sustainable due to population increase. Moreover, both China and India who are our buyers have been improving their economy. The financial problem in Eurozone and US has little or no effect on our palm oil market.

c. A palm tree will start fruiting after 3 years. It will continue to bear more fruits until it is about 16 years old after that age it will begin to bear less fruits. Only after about 22 years a palm tree needs replanting.

d. The land always appreciates in value.

e. There is good profit growth prospect and sustainable profit

I am obliged to tell you that plantation shares form the major part of my investment portfolio. If you decide to buy, I am not responsible for your profit or your loss.

How to become a super investor?

I started serious investing in public listed shares when I retired from executive work at 50 years old. I was not an accountant nor have I a MBA degree. I was just a civil engineer and I hardly knew how to read a balance sheet at that time.

I started by reading to understand the basic fundamental principles of share selection as practiced by Warren Buffet, Peter Lynch and other great investment gurus. These are the key traits to being a super investor that I picked up.

Trait 1: Be a contrarian investor, that is, the ability to buy stocks while others are panicking and sell stocks while others are euphoric. In 1983 when China declared that they wanted to take back Hong Kong, the people were selling as if there was no tomorrow because the Communists were coming. The Hang Seng Index plunged to about 700. Currently it is around 18,500.

In such a situation at that time, would you buy Hong Kong shares? I did.

Trait 2: Obsession in playing the game and wanting to win. Winning investors don’t just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching. They are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk.

They are obsessed in enhancing the value of their holdings. I am that way.

Trait 3: The willingness to learn from past mistakes. Most people would much rather just move on and ignore the dumb things they’ve done in the past. I believe the term for this is repression. But if you ignore mistakes without fully analyzing them, you will undoubtedly make a similar mistake later in your career.

Trait 4: An inherent sense of risk based on common sense. Most people believe analysts’ reports which are often ‘a buy’ recommendation. It is very seldom they recommend ‘a sell’ because they would lose the business from the company he has recommended ‘a sell’. You must always take any analyst report with a pinch of salt.

I believe the greatest risk control is common sense which is not so common sometimes.

Trait 5: Confidence: Great investors must have confidence in their own convictions and stick with them, even when facing criticism. Buffett never got into the dot-com mania though he was being criticized publicly for ignoring technology stocks. He stuck to his guns when everyone else was abandoning the value investing ship. He was proven right when the dot com bubble bust.

Trait 6: Clear thinking. When considering a share, you must try to understand the nature of the company’s business and its inherent difficulties so that you can evaluate your risk exposure. There are a lot of people who have genius IQs who cannot think clearly, though they can figure out bond or option pricing in their heads.

Trait 7: And finally the most important, and rarest, trait of all is the ability to live through volatility without changing your investment thought process. This is almost impossible for most people to do. When the market makes a severe correction, most people dare not buy more shares to average down or to put any money into stocks at all when the market is plunging. They would begin to doubt their own judgement.

Wishing you a season of happy and profitable investing!

Around The World In 12 Dishes

2012-01-18T22:13:00.000+08:00

These are the 12 dishes/meals to have, according to the food editors of Sydney Morning Herald, in a culinary gastronomic trip around the world. They have intentionally left out Australian restaurants as it was a SMH publication for Australian readers.

Noma, Copenhagen

“Your first course is already here” announces the waiter, indicating the vase of bright nasturtiums and twigs on the table. Inside each flower is a plump snail and a touch of remoulade. So already you’re foraging, picking flowers and crunching through twigs. Then you’re nibbling dried-then-fried reindeer moss, and lichen it. Then you’re raiding a little nest of its pickled and smoked quail eggs. Then peeling shellfish from a hot rock, as if by the seaside. And crunching through blue mussels, their shells recreated in edible form. It’s an extraordinary sleight-of-hand, and it shows that Rene Redzepi wouldn’t know what the term ‘resting on your laurels’ was if it hit him in the face.

Okay, so the vase of flowers appetiser may be bordering on the kitsch - Redzepi doesn’t need to try that hard. But all else is elegance; like the perfect little aebleskiver, a traditional spherical Danish savoury pancake impaled with a smoked muikko (a tiny freshwater fish from Finland). Local, local, local food, reimagined by the best restaurant in the world. TD

Strandgade 93, Copenhagen Tel 45 3296 3297 www.noma.dk

Dinner by Heston Blumenthal, London

Didn’t know what to expect from Heston Blumenthal’s first London venture, ensconced in the very Swish Mandarin Oriental Hyde Park and yet a far cry from the speak-in-whispers and cross-yourself-as-you enter ambience of the Fat Duck. Didn’t know I’d love it so much, either. Somehow he has created a very flexible, upstairs/downstairs brasserie with a very English accent, so that at one table will be a couple in jeans eating steak and chips, and at the next, a group dressed up and having the dining experience of their lives.

Blumenthal and the on-the-job head chef Ashley Palmer Watts serve up historically inspired British food such as roast marrowbone or a broth of lamb with slow-cooked hen’s egg. There are two truly great dishes on the menu that should bookend your meal. The first is the Meat Fruit (circa 1500), a single mandarin complete with leaves that transforms into rich, light chicken liver parfait encased in tangy, fragrant mandarin gel, accompanied by toasted brioche. The last is the light-as-a-cloud-of-drunken-angels Tipsy Cake (circa 1810), served with spit-roast pineapple. So. Damn. Good. TD.

Mandarin Oriental Hyde Park, 66 Knightsbridge, London SW1X 7LA
Tel 44 20 7201 3833 www.dinnerbyheston.com

Brawn at Brawn, London

My favourite London restaurant critic, Fay Maschler, gave Brawn a resounding and very rare five out of five stars. “If I could, I would eat there every day” she wrote in 2010, thereby getting this relly of the popular Terroirs wine bar in Charing Cross off to a very good start.

Set in Columbia Road, Bethnal Green, home to London’s famous flower market (and equally famous riots), it’s a simple, minimalist corner building with a white-walled, semi-industrial canteen feel. Like a pub, it’s a charming and welcoming place, with a great list of natural wines, and a menu divided into Pig, Hot, Cold, Pudding and Cheese. You could order solely from the pig section and grunt with pleasure all the way home. Naturally, it does a great brawn (jellied pig’s head terrine), or it would have to change its name. TD

49 Columbia Road, Bethnal Green E2 Tel 44 207729 5692 www.brawn.co

Osteria Mozza, Singapore

The Marina Bay Sands complex opened with a bang last year, so I was curious to see what all the hype was about. The huge Asian food court in the basement looks fun, but it's packed out, with people waiting behind your chair for your table. Upstairs in the ‘flying chefs’ restaurants (Restaurant Guy Savoy, David Boulud’s db Bistro Moderne, Wolfgang Puck’s Cut and Tetsuya Wakuda’s Waku Ghin), it’s a different story, with very few tables taken the nights I visited.

The best bet seems to be the middle-ground, and the best of the middle-ground is this branch of Nancy Silverton and Mario Batali’s LA-based Osteria Mozza. Sitting up at the cool marble bar exploring the list of dishes based on buffalo mozzarella, burrata and ricotta flown in from Italy is hugely enjoyable; as is this triple-comforting agnolotti with butter and sage, the tiny pasta parcels filled with chicken, veal and mortadella. TD.

Marina Bay Sands, 10 Bayfront Avenue, Singapore Tel +65 6688 8868 www.osteriamozza.com

Spuntino, London

I’m nominating Russell Norman as The Man Who Saved London. After learning his trade managing Scott’s, J. Sheekey and Zuma, he decided London needed a few more fun places to eat that weren’t at the pointy end of dining, and took off on his ownsome. Well, hallelujah.

If you’re just wandering around Soho looking for something to take the pain off the jetlag, then head for either Polpo or Polpetto, his New York takes on Venetian stuzzichini (small plates). The latest from the Norman invasion is Mishkin’s, in homage to the Jewish delis of New York. Then there’s the sassy little Spuntino, with its New York take on trailer trash food, with things like mac & cheese, spicy sausage & cheddar grits, pulled pork sliders and chopped salad, along with Bloody Marys and Bourbons, and these super-thin twirly-wirly fries. TD

61 Rupert Street, Soho, London. No telephone. www.spuntino.co.uk

Thip Samai Phad Thai, Bangkok

Pad Thai noodles are such a staple these days, there doesn’t seem much point in going way out of your way to find a funny little place in Bangkok that is tied up with the dish’s (surprisingly recent) history. But it’s worth it, to see this seminal dish cooked on the street in a huge cast iron wok over hot coals, by a slim young girl in a red T-shirt who must surely be skipping school.

First she puts in three ladlefuls of oil and scoops in a pile of prawns from a plastic bucket. Toss, toss, fry, fry, three minutes. Then she scoops out most of the oil, and adds cubed tofu, green garlic chives, vegetables, stiff white beanthread noodles and a lot of red chilli sauce, sugar and salt from a line-up of buckets, which all comes to the boil super-fast. Then – new wok – she deftly makes an omelette that covers the interior of the pan like a second skin. In goes the contents of the other wok, and – the finished pad Thai is turned out, perfectly wrapped in omelette, onto a melamine plate. That will be 70 baht, thank you ($2). And that’s for the Super Special. JD.

313 Mahachai Road, Samranraj, Bangkok Tel 66 2 221 6280

Au Passage, Paris

Down a dodgy back alley off the Boulevard Beaumarchais is what looks like an old, untouched bar, complete with beer sign outside and old wooden bar and mis-matched tables and chairs inside. Welcome to a little piece of Australia in the middle of Paris, where Aussie-born chef James Henry is cooking in a kitchen only slightly larger than a box of veggies.

Lunch is three courses for 16.50 Euros ($20); dinner is a small blackboard of a la carte specials that costs little more; and it’s just plain lovely, light, fresh, minimalist cookery. My lunch started with bulots (whelks) and mussels in a light cream vinaigrette with warm samphire. Then choppy, chunky tartare de boeuf (au couteau/hand-cut) with finely minced cornichon and shaved baby radishes, and a fresh little cheese with figs and toasty hazelnuts to finish. Perfect. JD.

1 bis Passage de Saint Sebastien, Paris 75011. Tel 33143550752.

Le Dauphin, Paris

How smart. The posse headed up by chef Inaki Aizpitarte, one of The Chosen (that means a fave of Rene Redzepi of NOMA) has solved the problem of being inundated at Le Chateaubriand by opening a smaller, more casual bistronome down the road. A cool, white marble cube designed by Rem Koolhaus, with detail picked out in mirrors and Danish stools, it’s a nice place to be.

Lunch is a reinvented ‘menu formule’. On this hot summer’s day, that means a cool melon gazpacho with fresh raw almonds, a choice of cod or braised lamb cleverly served with the same garniture of tomatoey chickpeas and amaranth, and as at Au Passage, a simple fresh white cheese and fruit for dessert. It’s great value and very satisfying; a clear signpost for the future of dining in Paris. Struggling with my notes, trying to find the right description for this independent gastronomic attitude (cuisine d’auteur?), I asked Aizpitarte ‘comment dites-vous l’expression ‘no bullshit’?’ He looked at me. ‘We say no bullshit’, he said. JD.

131 Avenue Parmentier 750111 Tel 33 1 55 28 78 88

Le Verre Volé, Paris

Another day, another wine bar, another platter of charcuterie, another chunk of sour Jean-Luc Poujouran’s pain levain. God I love Paris. And Le Verre Volé . The walls of this tiny place are lined with wine – it’s essentially a cave, a wine shop – and the worn wooden tables are lined with eccentric locals. It’s a good place to have andouillette, with its smell of the pissoir arriving from the tiny kitchen only moments before the plate; the fat, pale sausage spilling its guts – literally - onto mashed potato and a few green leaves. I order a glass of Pouilly Fume. "It’s very fat, with great complexity," says the waiter. What a coincidence. That’s just how I feel, too. TD.

67 Rue de Lancry, 75010 Paris. Tel 33 148031734 www.leverrevole.fr

Soho Hotel, London

Let loose from the tyranny of porridge or fruit and yoghurt, breakfast on holidays ends up being different every day – the cravings being very dependent on the local circumstances and what went on the night before. This morning, an egg and bacon roll was required. And the best egg and bacon roll is definitely at the deliciously located Soho Hotel in the heart of Soho, because the bread has just the right amount of give, the butter, eggs, and bacon are all real (and thery ask you exactly what you want and how you want it), and the whole thing comes together in the hand as one. JD.

Soho Hotel, 4 Richmond Mews, London W1 Tel 44 2 75593000 www.firmdale.com

Relae, Copenhagen

"That’s where the Redzepis always sit," says Kim Rossen of Relae. Well, if the Redzepis turn up, we’ll move. But until then, we’ll sit up at the bar watching Christian Puglisi and his team plate up some beautiful, simple, blindingly contemporary food in what is tantamount to a party atmosphere. Relae has two short menus of four dishes, mostly plants, with each ingredient at its height. Chicken hearts with babycorn. Leeks with mustard crumbs. Baby celeriac with seaweed veils. And this lovely dish of sheeps milk yoghurt, radishes and nasturtiums. Says Kim: "We cook what we like. We play the music we like. We serve the wine we like." At last! That’s what we want all restaurants to do! JD.

Jaegersborggade 41, Copenhagen Tel +45 3696 6609 www.restaurant-relae.dk

Nahm, Bangkok

So much is smoked, cured, salted, and above all, fermented, in David Thompson’s flagship Thai restaurant in The Metropolitan Hotel in Bangkok; the leaves, the chillies, the prawns, the fish, the garlic. It gives a wild, almost carnal quality to the food here, like eating a rich, smelly blue cheese as opposed to sanitised cheese slices. "It’s definitely where we’re going with our food here," says Thompson. Serpenthead fish, for instance, is salted and sun-dried for two days, then deep-fried until it’s pull-apartable into crunchy splinters. Get some help to put together an order of hot, cold, wet and dry dishes but don’t miss the feral, dark cassia leaf curry if it’s on, or the white turmeric salad with prawns, pork and chicken. Dining is a leisurely affair in the dark, tropical space, and the cooking is uncompromising, sophisticated and bloody hot. JD.

The Metropolitan, 27 South Sathorn Road, Tungmahamek, Sathorn, Bangkok Tel 662 625 3333 www.metropolitan.como.bz

Too Funny .....

2012-01-18T09:28:00.000+08:00

They Are Just Cartoons (Really!!??)

2012-01-17T00:45:00.002+08:00

Sure Can-One

2012-01-14T16:17:00.007+08:00

Well, this will be a record of sorts, 3 postings on the same stock within a week. To be fair, the markets have been very quiet and Can-One/Kian Joo saga is damn interesting. Wish we had a few talented business writers to capture the full script of behind the scenes manoeuvring, strategy, risk management and the personalities behind them ... much like The Barbarians At The Gate (RJR Nabisco), Steve Jobs in and out of Apple over a prolonged period, the disastrous Mike Eisner's emperorship during his stay at Disney, etc.

Anyway, I read The Edge just now, the writer Chong Jin Hun, had more questions on the whole thing. I will attempt to furnish a clearer picture. His last line was a request for Can-One to shed some light on it. I am not Can-One, although I write as if I am a substantial shareholder (lol):

a) "its been a week ... Can-One is not in a hurry to purchase the Kian Joo shares"
Comments: The writer is right in citing the Hong Leong Bank-EON Cap deal where the shares were crossed in one business day. Well, it is Hong Leong. In Can-One's case, the company has to wait for the liquidator i.e. KPMG to act. KPMG is not the beneficial final owner, so you can whack them with a cane, they will proceed diligently and cover their ass at every step. The executive director of KPMG apparently only flew back in over last weekend. Despite gaining the Federal Court verdict, it wanted a written legal opinion from the lawyers that they can proceed (ass covering). Now, more ass covering, they are apparently waiting for the actual original copy of the judgement by Federal Court as they deem photocopies and an actual live oral delivery of the verdict by the Federal Court judge is not deemed as sufficient for them to act (an enormous act of ass covering despite the fact that the Federal Court is the final level, no more appeals allowed). Credible sources indicate that the actual crossing will be Tuesday, Monday will be the release of the original by Federal Court. Go figure.

b) "Some quarters believe that the company may not have enough funds to buy ..."
Comment: Again pure conjecture. To be bidding for it a couple of years ago, the company had already lined up funding. They had been appealing the case over the last 2 years. Why appeal if funding is an issue? The funds are from Kuwait Finance and the crossing broker is MIMB - this from 3 different sources, reliable enough? Which bank does not want to fund this deal, gotta be kidding me.

c) ".. Can-One's delay ... may give the See family another opportunity to block the share sale again .."
Comment: What talk cock you??? What talk balls you??? (Thats funny in Cantonese). Federal Court, final... you want to appeal to the King izzit? Which part of "final" you no understand? There is the case of blocking Kian Joo's bonus and right issue, which Can-One is appealing, date pushed to March. Now, its really a none issue because once Can-One gets the 32.9% block, they will call and EGM and cancel the rights issue. The court case will dissolve then. There is no chance of Bursa acting on Kian Joo's proposal as the indication is that they will wait for all the appeals to be heard or dismissed before approving the bonus/rights. Kudos to Bursa for doing the right thing.

d) " ... gearing of one times, which is on the high side.."
Comment: Errr, 1x gearing is on the high side, I don't know which university you come from ... how to be high when the jump in borrowings is largely in buying a heavily discounted current, valuable, liquid asset??? I guess, if you get a chance to buy a liquid current asset (say shares) at a 30%-40% discount to the market, you won't take it up because you will be geared too high?? What is high gearing, if its more than backed by accretive EPS growth and more important substantive free cash flow to more than pay down interest on loan. All that with a huge buffer in terms of risk management.

e) there was speculation that Can-One will make a G.O. for Kian Joo after securing the block, as written in an article in The Edge as well
Comment: Not going to happen. As things stand you cannot be serious to mount a G.O. as there is still some 65% shares of KJ out there. You are talking about at least RM600m. A more likely development will be a merger: e.g. KJ shares swap at RM2.80 and Can-One shares swap at RM2.60 into a SPV and the SPV will take over as the listed vehicle. That way, The controlling shareholder of Can-One will still control the merged entity. Some of the peripheral assets in KJ can then be sold down to freshen up the balance sheet, or even a lucrative rights/free warrants as well.

Needless to say, the above questions to a large extent are valid, and thats what holding back the share price's uptrend. Watch for upside explosion when shares are actually crossed. Funds will pour in, uncertainty wiped out, some board members of Kian Joo will resign, ... then you have one solid near monopoly, which should be accorded a premium. But also thanks to the "delay" and so called "uncertainties", this has, in my view, presented investors who do their homework, ample opportunities, to buy on the low into Can-One.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. I may already have shares in the above mentioned stock/s. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Quality Time

2012-01-14T11:32:00.002+08:00

Let's face it, we only get back closer with our parents and realise the need to spend more time with them as we get older ... it doesn't have to be that way, the sooner we realise that the better.

Roadmap For Achieving Vision 2020 by Koon Yew Yin

2012-01-12T17:21:00.000+08:00

Look for Mr. Koon Yew Yin's book in February 2012, "Roadmap For Achieving Vision 2020".

Japanese Food Is Some Seriously Gay Food ...

2012-01-11T13:45:00.002+08:00

Seriously funny, must get the book Gay Men Don't Get Fat. I mean it really make sense. Food can be classified into gay, straight or even lesbian. I give you the 3 choices and you label them accordingly: double-decker double beef burger with bacon and fried egg; rocket leaves, pine nuts, mixed garden salad; california roll and salmon skin roll. Soooo easy.... Straight food is full of protein and fat, usually not much different from the real thing when it was alive and usually involves a lot of frying (i.e. cut a slab of meat from the cow, little processing). Gay food is basically stuff that used to be huge but whittled down, went through many processes, beautifully presented, little and clean, frowns on fried stuff ... Lesbian food is earthy, full stop. Soooo simple.

Joshua Bright for The New York Times

In a new book, Simon Doonan categorizes food as "gay" or "straight."

By JEFF GORDINIER

Published: January 3, 2012

“HERE’S a good example of what we’re talking about,” Simon Doonan said. My Cuban sandwich had just arrived, pressed flat and bulging with cheese. He was giving it a withering once-over.

Simon Doonan's book.

“You must be on guard when you see a panini coming toward you, because they can cram an enormous amount of meat and cheese in there,” said Mr. Doonan, the author, Slate.com humorist-provocateur and creative ambassador at large for Barneys New York. “They’re not as little as they look. And then adjacent to that is this dollop of guacamole with, quelle horreur, what are clearly deep-fried chips.”

As if fending off a lard-sucking vampire, Mr. Doonan held up his fork and knife as a makeshift cross.

“There’s a lethal amount of fat in guacamole,” he went on. “A friend of mine was just going off to Mexico, and I said to her: ‘If you get kidnapped, remember to tell your kidnappers: no guacamole. You cannot be in a confined space ingesting guacamole. You’ll become so enormous.’ ”

But wait, I wondered. Isn’t avocado supposed to be good for your skin?

“Maybe if you apply it topically,” he said.

Either way, those chips were all wrong. “Gay chips are baked,” he said. “Straight chips are deep-fried. It’s that simple.”

Mr. Doonan, slim and sprightly at 59, was doing his best to guide me through the dietary pitfalls of a typical lunch in the city. In his eyes, my problem was not merely that I was prone to eating too much, but also that I ate the way a lot of straight men automatically do: with gluttonous, meat-and-cheese-and-avocado-mad disregard for the repercussions.

If I wanted to slim down after the holidays, he suggested, I should try to eat like a gay man.

One of the tongue-in-cheek propositions of Mr. Doonan’s new book, “Gay Men Don’t Get Fat” (Blue Rider Press, $24.95), is that the vast range of the world’s culinary options can be boiled down to two core categories: gay food and straight food. Seeking out a balanced diet of both is the savviest way to stay svelte. Think of it, if you must, as bisexual eating.

“Mix it up,” he said. “Gay men don’t stay trim because they only eat gay food. I don’t live on macarons and lettuce.”

In fact, Mr. Doonan had selected our dining spot, the Knickerbocker Bar and Grill in Greenwich Village, because, he said, its kitchen managed to get that blend right. (And, well, maybe because the place was across the street from the apartment he shares with his husband, the designer Jonathan Adler.)

“It’s actually a very good mixture of gay and straight,” he said, as he surveyed the Knickerbocker’s menu. “Just the words ‘baby arugula salad’ — you know you have some gay options. But then it’s balanced out with some real classics. We have Black Angus meatloaf — that’s the Burt Reynolds of foods.”

And balance, he counseled, was key. A gentleman might succumb to meatloaf, sure, but instead of pairing it with mashed potatoes, he should ask for a salad as a substitute. “Because the Black Angus meatloaf, that’s a whole lot of hetero to digest,” he said.

Dining with Mr. Doonan is like lunching with the “Jersey Shore”-era grandnephew of Oscar Wilde. It does not take long to figure out that his self-helpish bons mots should be sprinkled with liberal shakes of sodium. And it might be pointed out that he’s putting an extreme, satirical spin on tropes and stereotypes that have been in circulation for 30 years, ever since “Real Men Don’t Eat Quiche” drew a similar line in the culinary sand. (His book title is, of course, a wink at the best-selling “French Women Don’t Get Fat.”)

Nevertheless, there are times when his thoughts on the sexual orientation of food can be unexpectedly eye-opening. Straight food, according to the Doonan rubric, tends to be leaden, full of protein, thick with fat. Consider the grub he grew up with in England.

“British food used to be so straight when I was a kid,” he said. “Haggis. Horrible stews. Boiled greens that were gray. Now they’ve gayed it up, and British food is incredible.”

The way he sees it, gay food is lighter and brighter. It feels art-directed, not just tossed together and deep-fried, with an attention to aesthetic and dietary detail.

“Gay foods are more decorative; they’re more frivolous,” he said. “The macaron craze is the ne plus ultra of gay fooderie. I can’t believe any red-blooded straight guy can even walk into a macaron shop. If you wanted to ruin a politician’s career, just publish a picture of him shopping for macarons.”

Meanwhile, Mr. Doonan freely uses “lesbian” to describe certain earthy, healthful foods.

“Organic olive oil, thick porridge, heaping helpings of wheat germ,” he said. “A crusty loaf of whole-grain bread is both ferociously lesbian and wildly heterosexual.”

Mexican food? The ultimate in straight cuisine. Sushi? Its opposite.

“Japanese food — that is some seriously gay food,” Mr. Doonan mused. “I’ve been to restaurants in Japan where they bring out a watermelon in its entirety and they open it up and inside it’s full of ice and one little pink piece of sushi in the middle. Basically, you’re taking sloppy bits of fish and making them into these exquisite little bonbons, and that seems inordinately gay to me.”

Enlarge This Image

Joshua Bright for The New York Times

The book advises men to eat more as gay men do to stay svelte.

Of course, Mr. Doonan knows what you’re thinking.

“I love sweeping generalizations,” he said. “Sweeping generalizations are the key to everything, and they invariably contain nuggets of truth. Sometimes infinitesimally small nuggets.”

And while “Gay Men Don’t Get Fat” is largely laid out as a larkish lifestyle primer for his female fans (“Most of my books are aimed at empowering women,” he said), many of his most piercing generalizations have to do with the feeding rituals of his heterosexual brethren. (Not that he’s likely to persuade many to change their ways.)

“I have a lot of straight friends,” he said. “And a lot of them are a very different shape. The word ‘burly’ springs to mind. And that’s a function of eating too many meatloafs, too many steaks, too many jumbo burritos.”

During lunch, he endeavored to steer me away from predictably straight choices. But my habits were hard to break. He advised me to have a salad. I wanted to start with the Caesar. Mr. Doonan winced, then sighed.

“Um,” he said. “A Caesar salad’s pretty heterosexual. They whip a lot of egg into it.”

Mr. Doonan, who was nattily dressed in a velvet Thom Browne blazer and a custom-made Liberty print shirt, opted for a plate of field greens followed by a bantam bowl of black bean soup. He dodged the glob of sour cream on top. I thought it seemed a rather meager repast. What if he got hungry later?

“I’m a big believer in dried fruit,” he said. “Figs. Dates. Raisins. You have to be careful with the dried apricots because they really do make you gassy.”

How about almonds?

“Yeah,” he said warily. “I’ll do an almond. Or two. Not a fistful. You know when you get those mixed nuts on a plane? If I’m sitting next to a straight guy, he’ll basically take the little container and heave it into his mouth.”

Considering his level of restraint, it came as a surprise that Mr. Doonan had not ruled out sweets.

“They do have something for you on the dessert menu,” he said, reading aloud. “ ‘Churros: traditional Spanish doughnut sticks. Dusted with cinnamon-sugar, served with dulce de leche and chocolate dipping sauce’ — as if they weren’t fatty and heinous enough! They could have stopped at the doughnut sticks and served it with a little fruit compote, but noooo.”

Still, he was craving something simple, elemental, straight.

“Desserts now have a very gay sensibility,” he said. “If you’re looking for a basic apple pie, you’re going to be out of luck.” He kept scanning the menu. “There’s a fresh-baked pie of the day. See, I want to know what that is. I might succumb to it. Because I’ve been quite abstemious.”

Mr. Doonan asked about the pie.

“It’s a cappuccino mousse with an Oreo-cookie crust and whipped cream,” the waiter replied.

Mr. Doonan made a gurgling sound.

“I thought it was maybe going to be organic pears lightly braised in ...” he said, then trailed off.

“We are, how you say, comfort food,” the waiter said.

“Yes,” Mr. Doonan said. “Thank you.”

The waiter dashed off. I asked my lunch companion if he’d be finishing off with that pie.

“God,” he said. “Are you out of your mind?”

Kian Joo and Can-One

2012-01-09T15:25:00.002+08:00

There were many queries following the posting on Can-One.

a) Kian Joo can still dilute by having the warrants issue at 1 sen, if the 32.9% block relinquished their right to subscribe. Comment: That was the case as the court case was still dragging on. It is not going to happen as Bursa rightly has withheld approval pending the decision of the Federal Court. The See family can kiss their sinister plan goodbye.

b) If everyone is saying Can-One is worth RM3.00, why isn't the share racing up to that level? Comment: Its in a rerating process. The court decision is a major factor and catalyst. The second catalyst is the actual crossing of the shares by KPMG, which is supposed to be done today or tomorrow according to market newsflow. The crossing removes the final apprehension, and actually a lot of funds are readying to buy Can-One once that happens. Can-One and KPMG should be working diligently to process this asap so as to take control of Kian Joo (either via appointing their own board members and/or vetoing/approving corporate exercises).

c) Can the See family try to win back Kian Joo? Comment: No, if they are sane. Their stake is less than 10% in Kian Joo, to win control, they have to do a G.O. at much much higher levels (e.g. RM2.60-2.80) and still they may not succeed. If the See family tries that, its so easy for Can-One to up their shares as well with minimal funding requirements. They also cannot do it via Can-One, i.e. take control of Can-One as the controlling shareholder has 51% of Can-One.

d) How will the whole thing develop? Comment: Can-One will take control of the block quickly, call an EGM at Kian Joo quickly, put in their directors and remove some. Call another EGM at Can-One and immediately considers a few viable options. One is to take Can-One private. The other is to go through a rights issue with free warrants, pay down the loan with the proceeds. Or, do a similar merger akin to Sapura/Kencana, where you create a SPV and both parties subscribe shares in it. That would probably value Can-One at around RM2.60 and Kian Joo at RM2.80.

e) 1+1 = 2 or 3? Collectively, they control the bulk of the industry for Malaysia. Hence there will be economies of scale for sure. One thing which many have overlooked is the potential upcoming business of "sweetened milk", which is a major project between Felda and Silverbird. Guess who is the common shareholder in all this?

Can-One From The Wilderness To The Top Of The Pack ... Sometimes Money Just Want To Flow To Your Side

2012-01-09T08:56:00.000+08:00

Can-One has been hogging the limelight but I think the market is still grossly undervaluing the shares at RM1.60.

Can-One has 154.2m shares.

Deal in April/May 2009, Can-One was supposed to buy Kian Joo Holdings Sdn Bhd's 32.9% stake in Kianjoo for RM241.12mil or RM1.65 per share.

Now Kian Joo is RM2.20, which meant that Can-One added "pure profit" on its 32.9% stake to the tune of 2.20/1.65 x 241.12 = RM106m. Divide that by the paid up of 154.2m = RM0.68 per share extra.

Can-One has been illiquid trading around RM1.00 for the longest time, thanks to the court case which was critical to its business outlook.

Let's look at Can-One's results:

		INDIVIDUAL PERIOD		CUMULATIVE PERIOD
		CURRENT YEAR QUARTER	PRECEDING YEAR CORRESPONDING QUARTER	CURRENT YEAR TO DATE	PRECEDING YEAR CORRESPONDING PERIOD
		30/09/2011	30/09/2010	30/09/2011	30/09/2010
		$$'000	$$'000	$$'000	$$'000
1	Revenue	160,555	115,244	463,685	316,880
2	Profit/(loss) before tax	9,794	6,747	24,934	13,853
3	Profit/(loss) for the period	8,184	5,196	21,327	11,339
4	Profit/(loss) attributable to ordinary equity holders of the parent	7,787	4,857	20,012	10,774
5	Basic earnings/(loss) per share (Subunit)	5.11	3.19	13.13	7.07
6	Proposed/Declared dividend per share (Subunit)	0.00	0.00	0.00	0.00

		AS AT END OF CURRENT QUARTER		AS AT PRECEDING FINANCIAL YEAR END
7	Net assets per share attributable to ordinary equity holders of the parent ($$)	1.3480		1.2467

On their own, they are making around 18 sen EPS a year. Let's take the full 2011 net profit to be RM28m.

Kian Joo's annualised net profit comes to RM110m. Can-One will be able to equity account for its 32.9% stake as it can show that it has "control" of the company by virtue of having the largest single block. Can-One's share of net profits = RM36m.

Technically, Can-One's net profit in 2011 (assuming the KJ deal was affirmed back in Jan 2011) would be RM64m. But one would have to deduct the RM241m loan to buy the stake in KJ, so let's whack 7% interest = RM16m. Hence we are supposedly looking at RM64m-RM16m = RM48m net.

On 152.4m shares, the EPS would be = 31.4 sen.

Then a friend said if Can-One has already arranged for the bank loan. It appears from credible sources, the bank loan has been secured long time ago, and would not be an issue at all.

WHAT ABOUT KIAN JOO?
Some are speculating that KJ will shoot up as well as other member of the See family still in KJ may want to buyback more shares, whatever it is, it is hard to get a similar sized block of 32.9%. Even if KJ move up, it will only make Can-One's holdings look even more attractive. If the other substantial KJ shareholders try to make a G.O. on KJ, it will be at higher levels of 2.50 at least, what a good proposition for Can-One. In fact, the play is all at Can-One not KJ. The dissenting shareholders will find that buying more of Can-One and/or accumulating enough to make a G.O. on Can-One would be a lot cheaper and safer way to secure back KJ.

Will KJ try to dilute Can-One's stake? How? You cannot really do that, in the event of a bonus or warrants, Can-One will still get back the 32.9% share. Only way is to do a rights issue, and that is if Can-One cannot/will not subscribe, you think Can-One is stupid? Any rights issue will be taken up whole-heartedly by Can-One. However, they can now block any corporate exercise with their 32.9% anyway. So, what dilution?

HOW CHEAP IS CAN-ONE?
Can-One was very cheap prior to the court ruling because:
a) the KJ case was overwhelming its existing company's operations as KJ's business is at least 3-4x bigger than theirs
b) no fund was willing to buy their shares because Can-One lost the case before, and was in Federal Court on appeal only

Can-One's valuation should be KJ's valuation because effectively, Can-One can trigger a G.O. at anytime and there would be numerous bankers and private equity willing to fund the G.O. at RM2.30-2.40.

Kian Joo's PER is 8x, let's put a more cautious PER of 7x on Can-One's 31.4 sen = fair value = RM2.20

Can Can-One Takeover Kian Joo?
Sure can but very unlikely as KJ is almost 4x the size of Can-One. If they borrow funds, they will be shouldering at least RM400m-500m to go through with the exercise, dangerous as the interest alone comes to RM30m-40m a year. Can-One also cannot issue shares to take over as that would dilute its own holdings enormously owing to the size of KJ. The best possibility is a merger but even then Can-One will need to shore up their balance sheet first, then a merger would be very likely event in the next few months.

Why Can-One's share price is worth at least RM2.20-2.40, and possibly RM2.80-3.00 if they follow the path mentioned in (g):

a) they have the single largest block and can trigger a G.O. at anytime

b) KJ's fundamentals and valuations is not terribly expensive (at 8x) which would make bankers comfortable to fund any G.O.

c) the court ruling is final, no more appeals, cannot go to Privy Council in London la ...

d) institutional funds would now be a lot more willing to get into Can-One and/or Kian Joo, esp the latter which has been tormented by family squabbles for the longest time

e) the flip side is that some of the See family still holding KJ shares may decide to launch their own G.O., which will need to be at least RM2.50 for it to be reasonable ... in any case, you can wrench the 32.9% stake from Can-One for the right price and Can-One would be sitting pretty with a very solid NTA per share

f) Can-One's NTA at RM1.348 would now balloon to RM1.65 just on the premium on the KJ's stake, which would serve to be a very base

g) Can-One can and should be considering a major corporate exercise soon: free warrants, with rights @ RM1.60 (NTA) and maybe even bonus or share splits because they have the business model to call for the rights, they may want to do a 1-for-1 @ RM1.60 coupled with a 1 for 2 free warrants. With the additional RM240m cash, they can whack off the loan to purchase the 32.9% KJ and also strengthen their balance sheet to ready for a complete G.O. for the remainder

h) the final reason why Can-One will NOT stay below RM2.00 for long is with the 32.9% stake in KJ, it elevates Can-One into a stock that is in play. Anyone who wants to take control of Can-One and Kian Joo can now just do a G.O. on Can-One. We all know how difficult it was to do any corporate M&A with Kian Joo in the past owing to the family squabble. By virtue of transforming Can-One into a dai-dee in a chor-dai-dee game, you have to accord a big premium on Can-One now.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Living The Life We Want

2012-01-08T14:43:00.000+08:00

I think this might be an advertising thing, but magnificently crafted and very meaningful, and probably based on some 6 old foggies' true life story. Love the Chage Aska song in the background, On Your Mark.

What Do You Make, Teacher?

2012-01-07T15:22:00.001+08:00

This was adapted and taken from
http://zorro-zorro-unmasked.blogspot.com/

I would like to dedicate this to my favourite teachers from my days at St. Michaels' Institution: the late Brother Ultan Paul, Timothy Chee and Mrs. Foong Thai Hong.

~~~~~~~~~~~

The dinner guests were sitting around the table discussing life.
One man, a CEO, decided to explain the problem with education. He argued:
"What's a kid going to learn from someone who decided his best option in life was to become a teacher?"

To stress his point he said to another guest;
"You're a teacher, Boon. Be honest. What do you make?"

Teacher Boon, who had a reputation for honesty and frankness replied,
"You want to know what I make?
(She paused for a second, then began...)

"Well, I make kids work harder than they ever thought they could.

I make a C+ feel like he was a Medal of Honor winner.Then I give a reassuring pat on the shoulder of another because he showed improvement. He had only two red marks over the last monthly test in which he had three red marks!

I make kids sit through 40 minutes of class time when their parents can't make them sit for 5 min. without an I Pod or a Game Cube.

You want to know what I make?
(She paused again and looked at each and every person at the table)

I make kids wonder.

I make them question.

I make them apologize and mean it.

I make them have respect and take responsibility for their actions.

I teach them how to write and then I make them write.
Keyboarding isn't everything.
I make them read, read, read.

I make them show all their work in math.
They use their God given brain, not the man-made calculator.

I make my Malay, Chinese and Indian students learn everything they need to know about English while preserving their unique cultural identity.

I make my classroom a place where all my students feel safe.
Finally, I make them understand that if they use the gifts they
were given, work hard, and follow their hearts, they can succeed in life

( Boon paused one last time and then continued.)

Then, when people try to judge me by what I make, with me knowing money isn't everything, I can hold my head up high and pay no attention because they are ignorant. You want to know what I make?
I MAKE A DIFFERENCE IN ALL YOUR LIVES, EDUCATING KIDS AND PREPARING THEM TO BECOME CEO's, AND DOCTORS AND ENGINEERS..........
What do you make Mr. CEO?

His jaw dropped; he went silent.

We Didn't Start The Fire

2012-01-06T09:39:00.000+08:00

When Billy Joel came up with the song, it was effective, protest-like, summarising the social and political angsts of Americans brilliantly. Well, this version is best appreciated by Malaysians only, pretty smart, pretty funny too ... How apt "we didn't start the fire" ... hell no we didn't, but we have fires burning everywhere politically and socially. Well done guys.

band: thehavenots

Then and Now

2012-01-06T01:40:00.000+08:00

I especially like the parents-teacher cartoon ...

Plantations Very Ripe For A Robust Run, Watch IJM Plantations

2012-01-04T19:33:00.001+08:00

If you were to read the latest sector reports on CPO, you'd get probably 70% neutral/under weight calls on the sector. The sharper investors would have noted that the outlook of the sector is better than most would think. Selective smaller players have been improving their yields and margins. Genuine corporate exercise to create value and add liquidity have boosted some of the related counters.

The Rimbunan Sawit story has not ended, although the cream of the best returns may be buying just before the recent corporate exercise. Still one cannot and should not deny the compelling valuations still. The most undervalued stock on KLSE is probably Jaya Tiasa, and possibly the most illiquid as well. Its transformation into a CPO centric cum timber play has not registered in most investors' radar. But the illiquidity is barring investors from having a reasonable exposure.

SOP is another recent giant killer. The profits have been superb. The recent 9 months profits almost doubled from the previous 9 months. Again the cream of the return would have been buying around RM4.50 a few weeks back, still there should be another ringgit in it.

Its Not All About The CPO Price
Many are maintaining CPO forecast at RM2,850-3,000/t for 2012E based on a weak global outlook. On a sustained global recovery, CPO price could overshoot with upside of up to RM3,200-3,400/t.

CPO is also correlated to the other soft commodities such as soyabean, even corn and wheat. That has been missing from a lot of analysis. We can expect soy oil and CPO prices to be well supported due to supply constraints issues from related crops due to lower production from US and China as well as potentially lower soybean planting in the Mar-31 US planting intention as corn wins more acreage.

Moderation in CPO supply growth from 9% in 2011E to 4% in 2012E due to reversal in the biological yield upcycle, further exacerbated by La Nina conditions. Analysts have been too timid and cautious in their estimates of effectes of La Nina, and overplaying the impact from E.U. crisis.

Downside risk includes the removal/scale back/delay of bio-fuel mandates/subsidies; Non renewal of US subsidies for ethanol and bio-diesel which expires in Dec-11, will cap upside /soften edible oil prices;

Valuation Implied Currently
The implied CPO price at current levels for most listed CPO counters is RM2,600-2,700/t. Hence all things being equal, the entire sector is overdue for an upgrade of at least 10%. The solid results from mid-smaller players have encouraged more foreign funds, we can expect confidence to return more convincingly. Foreign shareholding level has been slowly rising, from 15.3% in Dec-10 to 17% in Dec-11.

I see a weaker growth in SEA palm oil production and normal demand expansion which will set the stage of a bull market in 1H2012. I would not be shocked if Malaysian palm oil will hit RM3,600-3,800 by June 2012 on strong demand chasing tight supply. CPO prices is going to RM3300 in January/Feb on output made worse by top producers Indonesia and Malaysia entering a flat phase in the oil palm biological cycle tht lasts between 6-9 months.

Analysts Revising As We Speak
I know of a couple of houses about to revise their sector outlook positively even as I write this. This should be an excellent time to load up on plantations. Several positive factors are emerging that might encourage investors to turn bullish on palm oil stocks. The first factor is the weather, specifically, flooding brought about by high rainfall because of the La Nina effect, which might cause production to drop. Just as an indicator, the most recent La Nina in January and February this year, caused production to drop by up to 40%. Typically, a hectare can yield between 1.8 and 2 tonnes of so-called “fresh fruit bunch” (freshly harvested palm oil fruits, before processing). During the last La Nina, this measurement fell to between 1.15 and 2 tonnes per hectare.

Still on the positive side, if OilWorld, an industry research bureau, is correct, global demand for crude palm oil is expected to grow over the next 12 months by 6.8% on year. By contrast, global production is only expected to increase at a slower pace of 4.9%. According to forecasts by OilWorld, the biggest demand growth will come from Indonesia, with an expected demand of 6.82 million tonnes for 2011-2012, up 12.4% compared to the likely 6.07 million tonnes for 2011. Malaysia’s consumption is also expected to grow strongly: up 15.9% between 2011 and 2012, reaching 2.28 million tonnes.

The current La Niña weather pattern has been causing very hot and dry weather in South America which has lead to a late rally in the grain markets after decreased global demand had been driving commodity prices lower.

Soft Commodities Prices

Corn prices increased by 7.7% in December and closed at $6.47 per bushel. Soybean prices increased 5.9% this month to $11.98 per bushel on the Chicago Board of Trade. The USDA estimated that domestic soybean exports decreased by 25 million bushels to 1.3 billion bushels due to a slow pace of shipments, outstanding sales through November, and strong export competition from South America. Soybean prices had decreased 1.9% to $11.10 after the USDA WASDE report release, but the outlook of the South American crop is deteriorating quickly as reports of the La Niña are causing extreme dry heat for the top yielding corn and soybean land of Argentina, Brazil, and the rest of Latin America.

Wheat prices were sent 9.7% higher during December to $6.53 per bushel due to increased speculative buying and the correlation to soybean and corn prices.

If you note the charts of the 3 soft commodities, it is all perking up with strong volume growth over the last few weeks. Birds of the same feather, people.

SOYA BEAN FUTURES

http://futures.tradingcharts.com/chart/SB/?anticache=1325677345

CORN FUTURES

http://futures.tradingcharts.com/chart/CN/

WHEAT FUTURES

http://futures.tradingcharts.com/chart/ZW/

Why IJM Plantations

One, its in the right sector. Two, its volume build up looks great. Three, its Indonesian plantations should bring about significantly higher returns over the next 12-24 months. Four, and most probably, IJM Corp/EPF have been "rumoured" to be keen to take IJM Plantations private, especially in light of the Indonesian factor. The exercise will be highly EPS accretive and value driven from all angles. A G.O. if it happens should be in the range of RM3.60 at least.

Even if the corporate exercise does not happen, the over-riding positives should lift the stock a lot higher from here anyway. Plus, did you know that there is only ONE company issued plantation warrant on the whole of the Malaysian market, yup, IJM Plantation-W.

1	IJM Corporation Berhad	441,832,715	55.11%
2	Citigroup Nominees (Tempatan) Sdn Bhd	101,257,219	12.63%
3	Desa Plus Sdn Bhd	37,000,000	4.62%
4	HSBC Nominees (Asing) Sdn Bhd	23,109,268	2.88%
5	Amanahraya Trustees Berhad	20,334,100	2.54%
6	SG Plantations (Sabah) Sdn Bhd	19,953,947	2.49%
7	Sakilan Desa Sdn Bhd	17,040,000	2.13%
8	Malaysia Nominees (Tempatan) Sendirian Berhad	13,902,943	1.73%
9	Citigroup Nominees (Asing) Sdn Bhd	7,719,971	0.96%
10	Amsec Nominees (Tempatan) Sdn Bhd	6,576,502	0.82%

2011/2012 Quarterly Financial Highlights:-

Click on the respective quarters to view the Financial Result Announcements (PDF format)		2011				2012
		1st Qtr (75 KB)	2nd Qtr (77 KB)	3rd Qtr (81 KB)	4th Qtr (162 KB)	1st Qtr 67 KB)	2nd Qtr (66 KB)
OPERATING REVENUE	RM'000	113,255	133,633	160,426	98,970	128,351	180,933
PROFIT BEFORE TAX	RM'000	38,768	64,692	59,830	32,726	66,387	62,880
PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY	RM'000	29,895	47,336	44,045	25,915	49,474	46,883
ISSUED SHARE CAPITAL	RM'000	400,672	400,672	400,673	400,673	400,856	400,857
SHAREHOLDERS FUNDS	RM'000	1,193,768	1,234,914	1,270,240	1,306,017	1,291,837	1,352,330
TOTAL ASSETS	RM'000	1,413,213	1,432,302	1,495,842	1,504,282	1,568,042	1,567,551
EARNINGS PER SHARE (Basic)	Sen	3.73	5.91	5.50	3.23	6.17	5.85

Today, IJM Plantation rose 11 sen with 3.622 million shares traded, a highly significant jump if you are a value momentum trader.

03/01/2012	2.82	2.81 - 2.85	2.85	+0.03 (1.06%)	578,300
30/12/2011	2.81	2.81 - 2.83	2.82	+0.01 (0.36%)	1,243,300
29/12/2011	2.81	2.78 - 2.82	2.81	0.00 (0.00%)	250,700
28/12/2011	2.80	2.78 - 2.81	2.81	+0.01 (0.36%)	11,100
27/12/2011	2.82	2.80 - 2.80	2.80	-0.02 (0.71%)	3,500
23/12/2011	2.79	2.78 - 2.85	2.82	+0.03 (1.08%)	694,800
22/12/2011	2.78	2.77 - 2.80	2.79	+0.01 (0.36%)	63,500
21/12/2011	2.76	2.76 - 2.78	2.78	+0.02 (0.72%)	26,400
20/12/2011	2.80	2.76 - 2.80	2.76	-0.04 (1.43%)	505,800

IJMP currently has a total landbank of 78,116ha and a total planted landbank of 38,805ha with an average age of 9.4 years as at 31 Mar 2011.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Can You Become A Super Investor

2012-01-03T16:48:00.001+08:00

Can you become a super investor?

by Koon Yew Yin

Many investment psychologists do not think an adult can master all the following 7 traits if he does not have them in his genes or learned them when he was young and become a super investor, like Warren Buffet.

I started serious investing in public listed shares when I retired from executive work with IJM Corporation Bhd in 1983 at the age of 50 years. I was not an accountant nor have I a MBA degree. I was just a civil engineer and I hardly knew how to read a balance sheet at that time.

I started by reading to understand the basic fundamental principles of share selection as practiced by Warren Buffet, Peter Lynch and other great investment gurus.

Trait 1: Be a contrarian investor, the ability to buy stocks while others are panicking and sell stocks while others are euphoric. In 1983 when China declared that they wanted to take back Hong Kong, the people were selling as if there was no tomorrow because the Communists were coming. The Hang Seng Index plunged to about 700. Currently it is around 18,500.

In such a situation at that time, would you buy Hong Kong Shares?

I use all the money I had and I bought H.K. Realty and Trusts at $ 3.60. Its price was $13.60 before the crash. When the former British Prime Minister Margret Thatcher went to Beijing to negotiate the sovereignty of Hong Kong, Beijing rejected the appeal and the stock market plunged further. I bought more H.K. Realty at $ 3.00 with margin finance. Most investors would not buy and they would say that I was mad to try to catch a falling knife. This was the most agonising period when HSBC was selling below $ 7.00.

After several months of negotiation, Beijing granted another 50 years extension of capitalist system. The market rebounded immediately and H.K. Realty & Trust went rapidly back to $13.60. As the value of my holding went up, I bought more and more shares with increasing margin. In 1986, I even bought 47% of a stock broking company, called Kaiser Stocks and Shares Ltd. How I took advantage of the rising trend is history.

Trait 2: Obsession in playing the game and wanting to win. These people don’t just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they are still half asleep, is a stock they have been researching. They are thinking about selling, or what the greatest risk to their portfolio is and how they are going to neutralize that risk. They are obsessed in enhancing the value of their holdings and they have very few friends.

Trait 3: The willingness to learn from past mistakes. Most people would much rather just move on and ignore the dumb things they’ve done in the past. I believe the term for this is repression.” But if you ignore mistakes without fully analyzing them, you will undoubtedly make a similar mistake later in your career.

Trait 7: And finally the most important, and rarest, trait of all: The ability to live through volatility without changing your investment thought process. This is almost impossible for most people to do. When the market makes a severe correction, most people dare not buy more shares to average down or to put any money into stocks at all when the market is plunging. People do not like short term pain even if it would result in better long-term results. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. But most people just cannot see it that way; their brains won’t let them. Their panic instinct steps in and shuts down the normal brain function.

Many investment psychologists do not think an adult can master all the above 7 traits if he does not already have them in his genes or learned them when he was young.

By that time, your potential to be an outstanding investor later in life has already been determined. It can be improved, but not developed from scratch because it mostly has to do with the way your brain is wired and experiences you have as a child. That does not mean financial education and investing experience are not important. Those are critical just to get into the game and keep playing. If you cannot become a super investor, you would still earn more than the average earning of most people.

3rd Jan 2012

Investing Is A Bitch

2012-01-03T00:42:00.000+08:00

What is investing? Door us to win others have to lose and vice versa. Is it the same amount of funds circulating and the game is just people making decisions to shift money either to sell or buy? If it is indeed a zero sum game, then we must make bloody sure we end up more on the winning side. So, who is left on the losing side?

Losing side would be the newbies, the amateurs, the aunties and uncles ... and actually a lot of institutional funds. Look at the performance of funds in general, its not that they can actually outperform the averages. A detailed study revealed that more than 80% of fund managers under perform the very indices that they were benchmarked to.

Let's assume the sum of money in the system stays constant. Companies technically are there to make money from their businesses. Not all manage to of course. Where do they make their monies? From the larger economy that is not listed primarily. Hence all things being equal, the sum of money in the system is not constant, you can put in a lot of funds into the listed markets, or just as well take out a lot of funds from it by being cashed up.

Safe to say now that the amount of funds is not stagnant. Money circulates, reserve banks print money, some back by reserves but the big boys just print, really just print. All things being equal, if you keep pumping liquidity into the system, eventually the market capitalisation just have nowhere to go but up. But is that quality money, is that quality earnings.

You should know where this is going to, that currencies of most kinds have been debased no end over the last 10-15 years by reserve banks who print with abandon. Where is the real value of currencies? Technically speaking the USD is almost worthless but it cannot be allowed to fail. The Euro is getting there as well. The Yen is in a silly situation, as government debt is just astounding and artificially kept alive by the silly amount of domestic savings still seeing JGBs as their only source of investing.

If the top 3 major currencies are a sham, and they are, how is the whole thing going to play out? To answer it would be a savvy economist with greater knowledge than me. All I know is its a stupid platform but the whole platform cannot afford to breakdown as the whole global financial system would crumble overnight.

How to ensure we will end up on the winning side of the investing game (listed companies)? Be wary of your currency exposure. When financial crisis happens, a lot of funds get sucked out of the system and stay sidelined. Those big powers can then print their way out of their misery as the smaller guys cannot say "hey, too much bro". But when financial crisis happens to smaller nations, (Asian crisis), we are expected to borrow real funds from IMF and cut our budgets significantly and suck it up. Thats the wonderful world we live in.

How to be ahead of the game? One, be an issuer of paper/stocks. That means growing a business and listing it. Two, stay close to the top of the pyramid. The pyramid relates to how the stock market works. People at the top are always a few steps ahead of the rest, you could the CEOs, directors, CFOs, syndicates, investors who really do their research properly and can anticipate trends and revaluations. The bottom layer as the pyramid widens, relates to those who buys and sells based on hearsay, third hand research information, gossips, people who jump in blind without any understanding of trading skills or deep technical knowledge etc...

Because at the end of the day there is financial promotion, listing, financial engineering, and then distribution. Thats basically the whole cycle. Earnings growth, PER, NTA are there for academics to talk about stuff,or try to explain stuff. Your justification for buying a stock could be very valid based on deep fundamentals, but you still may not make sufficiently for the risk undertaken. If it was so easy, there would be a lot more millionaires.

There are investors wearing so many different hats, they all find roles which they take on as thats what they know best. There are those Ben Graham/Buffett loyalists who will buy and keep for 10 years. There are the day traders looking for the 2 or 3 bids. There are the momentum traders. There are the technical junkies looking for buy and sell signals. There are the insiders who might be selling or buying for various reasons. There are the program traders. etc. etc.

No matter what hat you might be wearing, make sure you are in the top tier. If not, you might as well get out and do something else. Investing is not for everyone. You want to be a surgeon, you have to be qualified, you want to drive a motorcycle, you need that license, you want advise people on investment, you also need to have licenses ... but you want to buy and sell shares, you do not need any qualification. You have money, thats your chips. Why is something so potentially dangerous, not needing the participants to be "qualified"?

Here's wishing all a profitable year in 2012, failing that, hope that we do not lose our pants at least.

How The Light Gets In

2012-01-02T13:27:00.000+08:00

Sydneysider Kristian Anderson, 35, has been having chemotherapy since he was diagnosed with cancer in October 2009. He made the video for his wife of seven years, Rachel, as a birthday present and a thank-you for her support. The video features cameos by New Zealand Prime Minister John Key -- since Rachel is a Kiwi -- and Hugh Jackman, who appeared in the video after Kristian asked Triple M's The Grill presenter Gus Worland for help.

Music: 'Marry Me' by Train

Sydney man Kristian Anderson, made famous by a YouTube tribute to his wife after he was diagnosed with terminal bowel cancer, has died. (2 January 2012).

His wife Rachel confirmed Mr Anderson died at Manly Hospital just after 8am today.

"My darling husband went to meet Jesus this morning. It was peaceful and beautiful. Funeral details to come soon," she tweeted on his account.

The 36-year-old from Curl Curl had been having chemotherapy since he was diagnosed with cancer in October 2009. His touching YouTube clip was made as a birthday present for his wife and as a thank you for her support. It featured an introduction by New Zealand Prime Minster John Key, because Rachel is a Kiwi.

In his last interview, Mr Anderson told The Daily Telegraph of his love for his wife and their sons Cody, 5, and Jakob, 3.

"I'm not afraid of dying but I am afraid of leaving them behind," he said in early December.

In his last entry on his blog How the light gets in, posted by his wife after his death, Mr Anderson reflected on his battle with cancer.

"The truth being we're all broken, we're all cracked and what so many people see as a fault or a malfunction really is something to be considered useful," he wrote.

"I'm not sure how much longer I have left but it appears that the physical and medical signs are all pointing to my end.

"Thank you for journeying with me this far. I pray you find the same peace I have."

Bowel Cancer Australia spokesman associate professor Graham Newstead said Mr Anderson's battle with bowel cancer touched tens of thousands of people.

"Like many people who in some way shared this young man's journey, those involved with Bowel Cancer Australia are saddened by the death of Kristian Anderson," Professor Newstead said in a statement.

"We are, however, also very grateful to him for his brave and valuable work in raising awareness about bowel cancer."

The disease kills about 4000 Australians each year.

Tribute To The Amazingly Beautiful & Talented Zooey

2012-01-02T02:03:00.002+08:00

Some of you might be wondering what's with the gwailows as the banner. Just as I expected, Zooey Deschanel's first TV series is absolutely marvellous. Funny, witty, off center and probably very close to her real character. No need for me to reiterate what I have written before, below was my gushing tribute about a year ago: (oh, her new series is The New Girl, easily the funniest stuff on TV for a long time since Will & Grace and Friends).

~~~~~~~~~~~~~~~~~~~~~~

You know I never featured Western stars in my blog. Cannot help it but I think Zooey Deschanel is the best thing to come out of music and movies for a very long time. Her looks is so captivating, very 40s, not exactly very beautiful but very intoxicating to look at. If you see her act or sing, her demeanour totally overwhelms you, she is irresistable.

Well, let's hope she stays that way, old soul and pure ... I sure hope she won't get jaded, disillusioned, cynical or get her spirit sucked dry by the peripheral Hollywood types.

She has been in movies from a very young age. Back in 2000 she was in Almost Famous, 2002 in The Good Girl, 2005 The Hitchhiker's Guide To The Galaxy ... but you have to see her in Yes Man with Jim Carrey and her very dominating performance in (500) Days of Summer to appreciate her enormous talent.

In addition, she is a very good singer and songwriter as well. Her album She and Him, sensational and she wrote all her songs.

and even when she does an old song, her old soul shines through ...

For The New School Year

2012-01-01T10:09:00.000+08:00

2012

2011-12-31T10:56:00.001+08:00

Let's kick off with the last posting for 2011. Looking at the trading for the last two weeks, I am seeing a potentially massive run up in the second liners from Tuesday onwards till the last few days prior to Chinese New Year. Why do I say so? The build up activity has been too obvious. Its like investors were all saying to themselves, "OK, let the GLCs and local funds do their silly window dressing to perk up their returns for the year". Nobody is touching the GLCs or index linked stocks for now as the market is too staid and volume not active enough to bring forth any kind of run in the first liners.

So, second liners it is. Some people frown when I pick trading stocks. Some people frown more when they consider those stocks as con jobs. Some people say, what the hell am I doing recommending those stocks?

I am not sure when I was granted a halo with the right to talk about "pristine stocks" only. Stocks are stocks, there is a time for everything. My picks are usually for value momentum trading, not to buy and hold forever. Its a momentum thing, momentum gone, leave it. My favoured short term trading stocks include Dataprep and Versatile. Or, if you prefer brilliantly cheap fundamentals that will take forever to move, do consider Jaya Tiasa and MBM Resources.

Cheers!!!

Best Cartoon Ever

2011-12-28T16:27:00.001+08:00

The Debt Crisis In 2012

2011-12-27T21:10:00.001+08:00

Japan has long been mired by an aging population, sluggish growth and deflation since an asset bubble popped in the early 1990s. The country already has the highest debt-to-GDP ratio in the world--about 220% according to the OECD -- and a debt load projected at a record 1 quadrillion yen this fiscal year.

Based on a plan approved by the Cabinet in Tokyo on 23 Dec, the country is now looking to sell 44.2 trillion yen ($566 billion) of new bonds to fund 90.3 trillion yen ($1.16 trillion) of spending in fiscal year 2012 starting 1 April. That will raise Japan budget’s dependence on debt to an unprecedented 49%.

According to Bloomberg, the government projects new bond issuance will surpass tax revenue for a fourth year. Receipts from levies have shrunk about a third this year after peaking at 60.1 trillion yen in 1990. Non-tax revenues including surplus from foreign exchange reserves also halved to 3.7 trillion yen. Social-security expenses, now at 250% of the level two decades ago, will account for 52% of general spending next year

Moreover, an April 2011 analysis by CQCA Business Research showed that "Japan has an extremely near-future tilted debt maturity timeline" (see chart below). CQCA estimated that in 2010, Japan was able to push 105 trillion yen into the future, but concluded it is doubtful that Japan will be able to continue this.

Chart Source: CQCAbusinessresearch.com, April 2011

Indeed, as one of the major and relatively stable economies in the world, and since almost all of its debt are held internally by the Japanese citizens or business, Japan has been able to still borrow at low rates (10-year bond yield at 0.98% as of Dec. 26, 2011), partly thanks to the Euro debt crisis going on for more than two years.

So as long as Japan could keep financing a majority of its debt internally without going through the real test of the brutal bond market, the country most likely would not experience a debt crisis like the one currently festering in Europe.

But the chips seem to have stacked against Japan now. On top of the new and re-financing needs, the Japanese government estimated that the economy will shrink 0.1% this fiscal year citing supply-chain disruptions from the earthquake and tsunami disaster in March, the strengthening of the yen and the European debt crisis. Moreover, S&P said in November that Japan might be close to a downgrade. After a sovereign debt downgrade to Aa3 by Moody's in August, 2011, it'd be hard pressed to think Japanese bond buyers would shrug off yet another credit downgrade.

Burgeoning debt, coupled with the global and domestic economic slowdown, and continuing political turmoil (Japan has had three Prime Ministers in the last two years, and the current PM Noda’s popularity has fallen since he took office in September), would suggest it is unlikely that Japan could continue to self-contain its debt.

It looks like its massive debt could finally catch up with Japan in the midst the sovereign debt crisis that's making a world tour right now. While some investors might see Japan as a bargain, it remains to be seen whether the country will continue beating the odds of a debt crisis.

Read more: http://feedproxy.google.com/~r/EconForecastFullFeed/~3/TIJNwGPhjtA/debt-crisis-2012-forget-europe-check.html#ixzz1hjsHdRg9

Comment: Funnily, the decision to sell $566bn worth of bonds by the Japanese is uncannily close to the 460bn euro long term funding facility by ECB. While we all should know why Japan's debt problem may not be as devastating as the other sovereign types - in that the bulk of the buyers are NOT foreign funds, the buyers are Japanese, private and institutions, Private as in via their massive postal savings scheme. Even I think its not a severe problem for Japan but the one development which seems critical is that this would mark the fourth year whereby the dependency on bond sales is higher than tax revenues.

It also seems that BOJ is unable to reverse the strength of the yen at all, further crippling spending. The E.U. crisis has caused a lot more funds to be repatriated back as well. The tsunami/quake early in the also caused many institutions (insurance) to bring back funds to yen. The yen is causing untold problems to the Japanese economy.

The twin problems of stronger yen and dwindling economy is very hard to stomach. Even a recent downgrade of JGBs by S&P failed to push local buyers away from JGBs. So, while we see a huge problem mounting, I do not yet see anything that would trigger a major debt crisis in Japan. For that to happen, you have to see local private, businesses and institution shrivelling from buying JGBs, how???

The other related problem is deflation, with slowing consumption and strengthening yen, we have the very silly situation whereby seemingly positives become huge negatives: DEFLATION, STRONG CURRENCY. Unemployment is getting out of hand as the strong currency is exporting plenty of mid-level jobs away from the country at a time when the economy is not growing.

Endgame: Disenchantment by the young and those caught by the nasty shift in economic paradigm..

Will this end horribly?I don't see it, what I see is a slow, long and painful decline for the welfare of Japanese.

Have You Heard Of Macy Chen?

2011-12-27T20:05:00.000+08:00

This was from Pop Pop Music blog, what a wonderful discovery. Sometimes we "look down" on our music heritage" so much so that when respected musicians from overseas start to appreciate the local music on its own merits, then we go "wow, maybe there is something here".

We go through that phase, be in Chinese music, Malay music or various Tamil music ... we would be the last to acknowledge the beauty of Chinese opera, the keroncong or the wonderful instrument called sitar ... but we would gladly pay big bucks to watch fucking Italian opera that we do not understand.

Anyway, read on:

you should check this out!

local distributor, new wave, only brought in less than 10 copies and it was sold out, i have to buy from books.com.

we would write more about macy chen in due course... she is something totally different....

meanwhile, enjoy this video !it is a revelation.

Christmas Time

2011-12-23T01:49:00.004+08:00

What do we celebrate ... most of us will see it as a great time to party, not that there's anything wrong with that. I would sincerely like to share with you three music videos that somehow brings forth the spirit of true Christmas to me.

The first is the Matthew West song about the little boy Dax Locke, One Last Christmas, the kid's last Christmas because he was dying of leukaemia. Its not so much what he is, but what he caused the people around him to do. Its the spirit of loving, giving and being true to oneself. Its about bringing out the best in us. Dax's father started decorating his house with Christmas decorations in September as he wanted his son to at least experience Christmas time ... soon, everyone chipped in as well. Thankfully, the real life story has been made into a movie as well, The Heart of Christmas.

The second music video is my favourite instrumental piece, which I have featured before, this time played by Chihiro, just the piano. Somehow at a time like Christmas or end of a year, the music is more resonant, listen to it and think of the year your have lived, were there regrets, things you could have done better. Its a beautiful piece to reflect and appreciate all that we have.

My favourite Christmas song used to be The Christmas Song by Nat King Cole, I still love that dearly but when Amy Grant came up with Grown Up Christmas List, it was all too poignant and real. We wish that the sentiments in the song represent most of what's deepest in us. I know not of any song more representative that we all do think alike, be it Muslims, Christians, Buddhists or even Agnostics ... that no matter whether we are an Iranian or North Korean, Indonesia, Filipino or Slovakian or Russian ... we all want the same thing, don't we.

The ECB Lending - Folly or Fantabulous

2011-12-22T01:11:00.002+08:00

When the tap finally opens, banks (whether they needed the money or not), stretched out their palms. Much like the experience during the subprime rot when the Fed lent out money at zero rates. As one can see, the yield on government bonds in Italy and Spain did not fall, but actually moved higher. So banks are hoarding again to prettify their balance sheet and maybe capital adequacy ratio, or just having a standby line while they can still access funds because if the Euro crisis gets any deeper, the whole money market could shrivel up.

The good thing is that at least money is moving, the risk of a major bank run has been thwarted somewhat. So, anyone who says that the ECB lending is not a positive thing is looking at much too high expectations. This is precisely the stopgap fear removal. The persistent fear is that dwelling deeper into how to revitalise troubled EU government's finances would eventually lead to extreme pessimism, which will result in people and funds fearing the most, extreme fear will eventually give in to panic if left to simmer - panic will mean massive bank runs all over Europe, thats the last thing you want.

Hence I am reasonably positive that markets will view the development as quite essential in putting the path of recovery on the map. What EU has to contend with most of all is fear and pessimism, fear that collectively they cannot come up with a truly viable and effective solution, pessimism that causes one and all to rein in spending and investment of any kind. Hence, its a vital and crucial move to release the funds, instead of just talks and summits. It won't lower government bond funding cost overnight, that will take some months before the whole thing right itself.

Read further on the excellent article on ECB lending by Simone Foxman:

Early today 523 banks requested an unprecedented €489 billion ($640 billion) in super-cheap funding from the European Central Bank.

But the massive lending operation has garnered only a tepid response from markets, with short-term government bond yields rising in Italy and Spain, and markets virtually unchanged on the day.

So what happened? In general, initial investor reaction suggest that this was not the back-door bailout some were hoping for, and that expectations were simply too darn high.

A few early conclusions:

Banks took advantage of access to much needed liquidity. This was the real aim of this funding operation, and clearly the stigma against borrowing from the ECB is gone.
Easily accessible liquidity is positive for the markets. This counteracts tightening credit conditions in the euro area, at least on a temporary basis, and will also make it easier for banks to meet the 9% capital requirement they'll have to adhere to by mid-2012.
Ideas that banks would make bank on a carry trade—purchasing sovereign bonds to take advantage of relaxed collateral standards and low funding costs and profit from high yields—were probably overzealous. The reversal in bond yields after the operation and the continuing elevation of Italian yields suggest this is not the case.

In general, reactions from Wall Street have been positive, but unimpressed. However, they generally suggest that a similar 3-year LTRO operation in January could have a bigger impact.

Citi's Todd Elmer synopsizes this attitude concisely:

The EUR 489bn was in the EUR400-500bn range that our economists were expecting but somewhat stronger than published consensus that was more in EUR300-400bn. That said, the fat tail was clearly to the right and there were indications that many expected a much larger number than the consensus.

The next question is what is done with the money...Whether the money will be used to buy sovereign debt (the secret wish), or be lend out to businesses (the stated wish) is unclear. There is plenty of liquidity in the system not doing much of anything, so the auctions at the beginning of 2012 will be scrutinized carefully to see if the carry trade is being reignited.

Goldman's equity research analysts waxed even more positive about the move's effects on banks:

The amount distributed is large and equals 165% of total European bank bond maturities for 1Q2012 and a full 63% for the entire 2012. This amount will grow further still, through the February 28 auction, in our view. European banks seem firmly on their way to fully pre-fund all bond maturities for 2012 (and possibly 2013) through the ECB, in our view.

But Morgan Stanley outlined expectations that the move was probably not as significant as bulls had prayed it would be:

With this in mind, we therefore welcome the first 3-year LTRO this week, as we see this as a necessary step to reduce risk in the system of “disorderly deleverage” and even possible bank failure...To be clear, we don't think the LTRO and other bank funding support will stop banks from shrinking entirely and our concerns over 1.5-2.5tr bank delevering remain uppermost in our minds...This may not be the reduction of tail risk at the sovereign level that we might have hoped for, but we certainly welcome the tightening impact on sovereign spreads that it is causing, especially across 2/3 years’ maturities.

All told, the ECB measures did exactly what everyone expected they'd do before the hubbub about a bank bailout flared up last week. They lowered sovereign bond yields temporarily and they will prove a temporary sigh of relief from what has been escalating market pressure on the euro area.

Even so, that's not necessarily a good thing. We've seen lots of reforms by the Italian government recently as the country faces steepening sovereign borrowing costs. But analysts have suggested (specifically, research teams Goldman Sachs and Bank of America) this breath of fresh air might reverse that trend, not to mention increasing activism from the ECB.

Again from Morgan Stanley:

Whether the Governing Council will see a need for outright asset purchases next year will depend on the pace of deleveraging in the banking system and the repercussions on the availability of bank loans to private sector. In our view, the ECB is still too optimistic on growth next year and is likely to revise its estimates down meaningfully in the coming months.

In sum, the liquidity measures were just as successful as anyone could have realistically hoped they would be. The crisis is not "over" and the downward trend of worsening economic conditions probably will not be truly be alleviated, but there are clearly positive immediate repurcussions for the European banking sector.

http://www.businessinsider.com/fallout-ecb-liquidity-operation-2011-12

Dilbert@mamak stall

2011-12-19T16:50:00.004+08:00