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Saturday, January 03, 2015

Stock Investing & Some Predictions for 2015

When it comes to investing in the stock market, you need to be extremely choosy in selecting stocks to buy if you want to survive in the survival of the fittest.  You can’t simply buy a stock, sit on it and hope to be profitable. 

Without an in-dept study of a stock before buying it, your chance of being profitable is less than that of the player in a poker game who plays without looking at his cards. 

My first priority in stock investing is safety of principle. For this reason, I always insist on value when I buy. 

Every stock has a company behind it. You need to check up the company and find out what it is all about. Some of the things, you must look into are: the balance sheet, the cash flow statement, the income statement and the Chairmen/CEO’s statement. This will tell you a lot about the company and how it is likely to fare going forward. 

In our computer world, this is not too difficult a task. Nowadays, every listed stock has a website where you can look into at your own convenience. 

I like to combine Fundamental Analysis (FA) and Technical Analysis (TA) when I buy. This is to ensure that what I buy are fundamentally sound and at the right time. 

Knowing FA & TA alone is not enough to guarantee success. You have got overcome one big obstacle….. Yourself. 

The stock market is controlled by Greed, Hope and Fear. Greed causes you to hold on to an overvalued stock. Hope causes you to hold on to a losing position which may cause irrecoverable damages to your portfolio if you average down indiscriminately. And Fear causes you to sell in a panic sale when you should be buying. 

To overcome these potent forces, you must have knowledge, wisdom, discipline and patience. Lacking in any one of them is most undesirable.

When you are in the stock market, you are competing with some of the best money makers in the world. Fortunately, the market is also full of  simpletons, the naive and the inexperienced. 

Stock investing or stock trading is a zero-sum game. 

You can’t expect to make money from someone who is as good or better than you. Thus, if you want to succeed, you have to keep upgrading yourself all the time. 

The stock market is never efficient. The price does not always reflect the value of a stock. Very often stocks become overvalued because of over-optimism; they can become undervalued because of over-pessimism as well. Those who know can exploit this inefficiency to invest profitably. 

In concluding this article, here are my parting words:

Never buy a stock without doing an in-depth study of it.
Never overpay for a stock even though it is a great one.
Never buy a stock without having a good look at its chart.
Never be impatient. (Many mistakes are made because of hastiness.)
Never go against your charts.
Never buy in a downtrend, especially when the downtrend is at the start after a prolong uptrend.
Never fail to use a stop-loss and a trailing stop-loss if you trade.
Never fail to change with the circumstance. (It is not the most intelligent who can survive in a crisis but those who have the ability to adapt well.)

My predictions for 2015 are as follows: 
Crude oil prices will remain low unless productions at some producing countries are disrupted by one thing or another. By low, I mean below US$75 per barrel.

Malaysian Ringgit will remain subdued against the US$.

GST will impact our stock market negatively.

The FBM KLCI high of 1892 will not be surpassed in 2015.

Equities listed in the US will do well.

Equities listed in Bursa will not do well except for a few export-oriented stocks.

Europe will recover slowly.

WLC.TO., a stock listed at the Toronto SX will have a great run this year and the next. (The stock is lasted traded at C$0.57.)

If you like this article, please send me a Friend Request at FB where I am known as Ben Gan.

The New Year 2015 has just commenced. May all my readers be blessed with good luck and have a fruitful year. 


Tuesday, December 16, 2014

Why Oil Has Fallen and What It Means To You

The price of oil has fallen by nearly half in just six months, a surprising and steep plunge that has consumers cheering, producers howling and economists wringing their hands over whether this is a good or bad thing.
The price of a barrel of oil is just under $58, down from a summer high of $107, and lower than at any time since the U.S. was still in recession in the spring of 2009.
So what's going on? A global imbalance of supply and demand that is rippling across the world economy, for better and worse.

Monday, December 08, 2014

MMSV A Hidden Gem

MMSV was established as the investment holding company of MMSV Group in conjunction with the listing of MMSV on the ACE Market (Formerly known as MESDAQ Market). Currently, MMSV has 2 subsidiary companies namely Micro Modular System Sdn Bhd ("MMS") and Evolusys Technologies (Malaysia) Sdn Bhd ("Evolusys"). MMS is designing and manufacturing industrial automation, as well as designing precision die sets, jigs and fixtures. Evolusys is developing hardware and software for automation and test solutions. For more information, click here.

For the 9 months ended 30.09.14, the EPS of the company is  5.36 sen. In the corresponding period of the previous year, the EPS was 2.46 sen. This is an improvement of 117%. 

The company is progressing well. The Board of Directors expects the result for the remaining quarter to be reasonably good. Assuming that the last quarter comes in at 2.88 sen which is the same as the third quarter, then the EPS for fiscal year ended 31.12.14 will work out to be 8.24 sen. At the last traded price of 53.5 sen per share, the forward PE works out to be 6.49 which is undemanding. 

For the fiscal year ended 31 Dec 13, some key statistics of the company are as follows:
Net Profit Margin: 22.17%; Return on Equity: 31.09%; Current Ratio: 2.09; Quick Ratio 1.61. 
EPS: 3.08 sen. Total debt to total equity: 0.0012. These statistic figures are expected to be further improved for fiscal year 2014. 

Dividend per share was 1 sen last year. In view of the improving result, I expect dividend for this year to be 2 sen. 

My overall view is that at 53.5 sen, this growth stock is a buy.


Investment is not without risk. Be aware of the forwarding-looking statements in this article and buy at your own risk. You are fully responsible for your own action. 

Friday, October 24, 2014

ECS Moving Higher


The trend at ECS has reversed. It is now on track to move higher. The stochastic is in a strong momentum.

Wednesday, October 22, 2014

CBIP On track to move higher


The 4th golden cross is performing to expection. Hold on to your shares.

Saturday, September 06, 2014

CBIP at its 4th Golden Cross




The above daily chart of CBIP shows 4 golden crosses. If you examine the chart closely, you can see that the first golden cross appeared on May, 20 (closing price 4.55); 2nd golden cross was on Jun 13 (closing price 4.42); 3rd golden cross was on July 21 (closing price 4.61) & the 4th golden cross was on Sep 9 (closing price 4.82). 

Now,  assuming that you had bought at the closing price of all these golden crosses, you are still okay, considering that the last traded price was at 4.82. 

Please bear in mind that TA (technical analysis) is not a science. So, if you are looking for certainty, you are sure to be disappointed and frustrated time and again. 

It's true that many chart users throw away their charts after having been at them for some time, but sooner or later have come back to them for reference. And each time they come back, they have become more efficient and wiser in reading charts. 

In the olden days, there were no clocks. People depended on cockerels to herald the arrival of dawn. It is said that when the cockerels crow for the 4th time, then dawn has actually arrived.

Whether you may use this analogy here is left to be seen. I shall give CBIP the benefit of doubt and buy more of it at this golden cross.

Investment is not without risk. You listen to me at your own risk. 



Friday, September 05, 2014

Lodge Your Complaints


If any one of you is aggrieved in any way by misleading or irresponsible statements, please complain to SC or Bursa.

The addresses are as follows:

aduan@seccom.com.my

aduan@bursamalaysia.com

As small investors, we must cooperate and do our best to protect our own interest.

Unite and move forward for a better tomorrow.