The FBMKLCI closed at 876.75 on 31 Dec 2008. Accordingly to the annual report of Keck Seng, it had investment in quoted shares that had a market value ofRM360,967 millions.
Yesterday, the FMKLCI closed at 1317.94. Using these figures to assess the market value of its share investment, the portfolio should have a market value of about RM542,278 millions. This is only a rough estimate because about 75% of the shares are outside Malaysia. What I understand is that they are mostly invested Wilmar International, Singapore which is under Robert Kuok. Assets-wise, Keck Seng is very rich. The problem is when is Keck Seng going to unlock the value of its assets. Keep in mind that they have 10,000 acres of land in South Johor. These lands will become more and more valuable as the development of Iskandar Malaysia becomes a reality.
Key Statistics of Keck Seng as at 31.12.2009 are:
Share Cap: 241,393
Reserve: 951,913
Long term borrowings: Zero
Short term borrowings: 23,887
Cash and short term investment: 351,852
Current assets: 635,587
Current Liabilities: 122.946
Earnings per share: 42 sen
Last Done: 4.78
So what do you think of Keng Seng as an investment? What's on your mind? All comments are welcome.
马 到 功 成. Success is when the horses come. Success goes only to those who dare and act, it seldom goes to the timid. The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
Wednesday, March 10, 2010
Tuesday, March 09, 2010
Reading the Annual Report
When you look at a woman, which part of her anatomy do you look at first? Is it her face, her bosom or her bottom? It is all a matter of choice. It doesn't matter so long as you get to look at the whole picture. Now, when you look into an annual report, it is the same. Which statement do you prefer to see first. Is it the income statement, the cash flow statement or the balance sheet? Personally, I go straight for the balance sheet to find out what the company has and what it owes others. If I don't find things attractive there, I will just close the report, avoid the stock and move on.
The things that I pay attention in the balance sheet are: Paid-up capital, par value per share, retained earnings, current assets, and current liabilities. I pay special attention to its cash position and how much debt it has. If its debt is too high, when compared to its equity, I will normally lower the grading of the stock. Don't forget that all companies that folded are those with very high debt.
From the balance sheet, I go to the income statement , the cash flow statement, and then the CEO's statement, or Chairman's statement. If both are available, I'll read them both and also the notes in the annual report to ascertain that the company is not involved in any litigation. Lastly, I will go to the page that shows the names of the majority shareholders. A strong major shareholder is a advantage. Take the case of YTL Cement whose major shareholder is YTL Corp.
Things to consider when assessing a company are as follows: a) Calibre of management; b) Modal of business; c) Earnings per share; d) Dividend yield; e) Cash and debt position; f) Barrier of entry; and g) sustainability of profit.
The things that I pay attention in the balance sheet are: Paid-up capital, par value per share, retained earnings, current assets, and current liabilities. I pay special attention to its cash position and how much debt it has. If its debt is too high, when compared to its equity, I will normally lower the grading of the stock. Don't forget that all companies that folded are those with very high debt.
From the balance sheet, I go to the income statement , the cash flow statement, and then the CEO's statement, or Chairman's statement. If both are available, I'll read them both and also the notes in the annual report to ascertain that the company is not involved in any litigation. Lastly, I will go to the page that shows the names of the majority shareholders. A strong major shareholder is a advantage. Take the case of YTL Cement whose major shareholder is YTL Corp.
Things to consider when assessing a company are as follows: a) Calibre of management; b) Modal of business; c) Earnings per share; d) Dividend yield; e) Cash and debt position; f) Barrier of entry; and g) sustainability of profit.
Monday, March 08, 2010
Iskandar Malaysia
Iskandar Malaysia covers 2, 217 sq kilometers. This is nearly 3 times the size of Singapore. (1 sq km = 247.105 qcres).
Nusajaya Medical Park, a subsidiary of UEM Land has a joint venture with Columbia Asia to build a 70-bed hospital in Afiat Healthpark in Nusajaya. Toward this end, a sale and purhase agreement has been entered between UEM Land & Columbia Asia involving the sale of a piece of land of more than 1 hectare for RM4.818 million in 2008. This will roughly give you an idea how much lands cost in the region.
Keck Seng
Resort World Singapore (RWS) is already up and running. It commenced business on 14 Feb 2010. According to reports in the media, it is now raking in millions of dollars daily (whether this is true or not is uncertain). Come April 27, 2010, Marina Bay Sands, also in Singapore, will commenced business. These two casinos will definitely boost the tourism industry of Singapore. Because of the close proximity of Iskandar Malaysia (IM) to Singapore, the IM is sure to benefit tremendously from these developments in Singapore.
We do have a master plan to develop the IM. But so far, it's all thunder and no rain; all talk and no action. Is there anything that is up and running; anything that we can be proud of to tell the world, so far? Time is of the essence and speed is everything. I think we have too many red tapes to deal with. If we want to achieve Vision 2020, please buck up. Time and tide wait for no man.
Keck Seng has no less than 10,000 acres of land in South Johor. The lands have not been revalued since 1980. Once they are revalued and the land value is unlocked, the price of Keck Seng will explode. I hold some shares in Keck Seng. I hope it will not be too long before Keck Seng reward its minority shareholders.
We do have a master plan to develop the IM. But so far, it's all thunder and no rain; all talk and no action. Is there anything that is up and running; anything that we can be proud of to tell the world, so far? Time is of the essence and speed is everything. I think we have too many red tapes to deal with. If we want to achieve Vision 2020, please buck up. Time and tide wait for no man.
Keck Seng has no less than 10,000 acres of land in South Johor. The lands have not been revalued since 1980. Once they are revalued and the land value is unlocked, the price of Keck Seng will explode. I hold some shares in Keck Seng. I hope it will not be too long before Keck Seng reward its minority shareholders.
Sunday, March 07, 2010
Accept Full Responsibility
One thing you must learn, not only in the stock market, but in life as well, is to take full responsibility for all your actions. This means that whether you fail or succeed you must not blame others.
In my younger days I went into a joint venture with partners that I chose. Unfortunately that venture didn't turn out well. It failed miserably because of poor management and lack of integrity. The venture eventually folded and we went our separate ways. We are still friends even though I didn't like the ways they ran the business. If there is anyone to blame, it is myself. I picked the wrong partners; it was my lack of foresight.
I learned one very useful lesson in this failure. "Never depend on others to make money for you. If you can't be hands on to manage the business, don't go into it."
In the stock market, it is very easy to blame your broker or someone for that 'sure tip'
when the trade turned sour. But there is one thing you must not forget. It is your decision to listen to the tip after all. So,next time you are tempted to buy a stock because of a strong tip, remember to take full responsibility for your actions.
Research well before you buy.
In my younger days I went into a joint venture with partners that I chose. Unfortunately that venture didn't turn out well. It failed miserably because of poor management and lack of integrity. The venture eventually folded and we went our separate ways. We are still friends even though I didn't like the ways they ran the business. If there is anyone to blame, it is myself. I picked the wrong partners; it was my lack of foresight.
I learned one very useful lesson in this failure. "Never depend on others to make money for you. If you can't be hands on to manage the business, don't go into it."
In the stock market, it is very easy to blame your broker or someone for that 'sure tip'
when the trade turned sour. But there is one thing you must not forget. It is your decision to listen to the tip after all. So,next time you are tempted to buy a stock because of a strong tip, remember to take full responsibility for your actions.
Research well before you buy.
Friday, March 05, 2010
Lake at Taman Wawasan, Puchong
What a sight for sore eye! Can't the Subang Jaya Municipal Council do something about this? What is our town councillor doing?
This lake should be converted into a fishing spot that can become an asset of the town instead of a liability. The park at Jalan Wawasan 4/6 is also littered with bottles, old shoes, old umbrellas and all kinds of rubbish. What the hell is our government doing? What happened to all our tax money?
What will foreigners say when they come here?
Thursday, March 04, 2010
Be Smart Don't Smoke
Beyond dispute, smoking is bad for your health. Smoking is open burning. It contributes much to global warming.
There was a time when smoking was considered and generally accepted as smart. This type of mentality has changed. Smoking is no longer smart. Look at the ministers of our country. Which one of them smoke? None, right? Smart people don't smoke now.
So, why don't you stop smoking? "I tried, but I couldn't stop the habit," is the normal answer. What nonsense! There is no way one can give up drinking water. But to give up smoking is really not that difficult. I was a smoker; many of my friends were smokers. We have all given up. So why not you?
Cigarettes are expensive these days. Assuming that you spend RM10 for smoking each day. That means you have to spend RM3650 in a year. Do you know that to get RM3650 a year as interest from the bank, you need to deposit with the bank RM182,500!! (Banks pay 2% interest per year)
So it goes to reason that the moment you stop smoking, you have gotten yourself a winning tottery ticket of Rm182,500! Doesn't this mean anything to you?
Once you stop smoking, your food will taste better, your drinks will taste sweeter, your health will improve, and you will have a better sex life. So be smart, be healthy, be a non-smoker. I was a smoker; I gave up for the same reason.
If you like this article, please email it to your friends. Thanks.
There was a time when smoking was considered and generally accepted as smart. This type of mentality has changed. Smoking is no longer smart. Look at the ministers of our country. Which one of them smoke? None, right? Smart people don't smoke now.
So, why don't you stop smoking? "I tried, but I couldn't stop the habit," is the normal answer. What nonsense! There is no way one can give up drinking water. But to give up smoking is really not that difficult. I was a smoker; many of my friends were smokers. We have all given up. So why not you?
Cigarettes are expensive these days. Assuming that you spend RM10 for smoking each day. That means you have to spend RM3650 in a year. Do you know that to get RM3650 a year as interest from the bank, you need to deposit with the bank RM182,500!! (Banks pay 2% interest per year)
So it goes to reason that the moment you stop smoking, you have gotten yourself a winning tottery ticket of Rm182,500! Doesn't this mean anything to you?
Once you stop smoking, your food will taste better, your drinks will taste sweeter, your health will improve, and you will have a better sex life. So be smart, be healthy, be a non-smoker. I was a smoker; I gave up for the same reason.
If you like this article, please email it to your friends. Thanks.
Wednesday, March 03, 2010
Day Traders
Day Traders are the darlings of remisers and broker firms. Without them, the commissions generated in the market would be greatly reduced. These group of people should be given free lunch everyday.
A Day Trader normally makes several trades a day and closed out his positions all within the same day. Day traders do know care about the fundamental aspects of the stocks they buy. The smart ones who study charts closely and follow price trend or patterns may have a chance to win. Sadly the majority of day traders are not proficient and professional enough to make a profit. They play on margins and before long, many of them, not only say bye bye to their hard-earned cash but also gotten themselves in debt.
If you want to be a Day Trader, learn the trick of the trade first or you will be tricked in the trade.
A Day Trader normally makes several trades a day and closed out his positions all within the same day. Day traders do know care about the fundamental aspects of the stocks they buy. The smart ones who study charts closely and follow price trend or patterns may have a chance to win. Sadly the majority of day traders are not proficient and professional enough to make a profit. They play on margins and before long, many of them, not only say bye bye to their hard-earned cash but also gotten themselves in debt.
If you want to be a Day Trader, learn the trick of the trade first or you will be tricked in the trade.
Money Money Money
I work all night, I work all day, to pay the bills I have to pay
Ain't it sad
And still there never seems to be a single penny left for me
That's too bad
In my dreams I have a plan
If I got me a wealthy man
I wouldn't have to work at all, I'd fool around and have a ball
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
A man like that is hard to find but I can't get him off my mind
Ain't it sad
And if he happens to be free I bet he wouldn't fancy me
That's too bad
So I must leave, I'll have to go
To Las Vegas or Monaco
And win a fortune in a game, my life will never be the same
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
It's a rich man's world
Ain't it sad
And still there never seems to be a single penny left for me
That's too bad
In my dreams I have a plan
If I got me a wealthy man
I wouldn't have to work at all, I'd fool around and have a ball
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
A man like that is hard to find but I can't get him off my mind
Ain't it sad
And if he happens to be free I bet he wouldn't fancy me
That's too bad
So I must leave, I'll have to go
To Las Vegas or Monaco
And win a fortune in a game, my life will never be the same
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
It's a rich man's world
Tuesday, March 02, 2010
Cult Stock
What is a Cult Stock?
A Cult Stock is a stock that has insignificant fundamental value but a large investor following. People are lured to cult stocks because of big stories, normally regarding big contracts about to be signed or newest discovery in oil, gold or drugs that can do wonders.
The majority of Mesdaq counters (now renamed AEC counters) are Cult Stocks. Many people got their fingers burned buying there counters. Don't go for Cult Stocks. The odds of winning buying Cult Stocks are heavily against you.
Monday, March 01, 2010
World's Billionaires
Bill Gates lost $18 billions in 2008 but regained the tittle as the world's richest man in 2009. What happened to Warren Buffett? Read here.
Bear Raid
What is a Bear Raid (BR)?
A BR is a strategy to push down the price of a stock. Only a big trader or a cartel of traders is able to do this. Many people will suffer devastating loss of money in a BR. Accordingly to security law, a BR is illegal and the manipulators can be fined or imprisoned.
In countries where short selling is legal, a BR usually commenced with short selling followed by heavy aggressive selling and the spreading of negative rumors. These activities cause the prices of the targeted stocks to plummet. When the prices have dropped to a sufficiently low level, the manipulators will buy back the stock.
If you are a proficient chart reader, you should be able to detect these selling and buying activities. The BR is the opposite of the Pump & Dump strategy. Savvy investors and smart traders are able to profit from these manipulations. Can you?
A BR is a strategy to push down the price of a stock. Only a big trader or a cartel of traders is able to do this. Many people will suffer devastating loss of money in a BR. Accordingly to security law, a BR is illegal and the manipulators can be fined or imprisoned.
In countries where short selling is legal, a BR usually commenced with short selling followed by heavy aggressive selling and the spreading of negative rumors. These activities cause the prices of the targeted stocks to plummet. When the prices have dropped to a sufficiently low level, the manipulators will buy back the stock.
If you are a proficient chart reader, you should be able to detect these selling and buying activities. The BR is the opposite of the Pump & Dump strategy. Savvy investors and smart traders are able to profit from these manipulations. Can you?
Sunday, February 28, 2010
Bear Hug
Do you know what is a Bear Hug? In stock market jargon, a Bear Hug is a very generous offer made by one company to take over another company. A Bear Hug is usually made when there is doubt that the target company will be willing to sell. When a Bear Hug is made, the deal would normally be done because the management of the target company is legally obliged to look after its shareholders.
Red Crabs
Do these crabs have any economic value? They should be turned into fertilizers, if not food.
Never trade without a stop-loss
The certain way to profit is to limit the impact of your bad decision and maximize your good ones.
-Dr Steve Sjuggerud
Excercising your trailing stop, no matter how painful, is the right thing to do if you are a trader.
-Dr Steve Sjuggerud
Excercising your trailing stop, no matter how painful, is the right thing to do if you are a trader.
Saturday, February 27, 2010
Wang Yung-ching
Taiwan's second richest man has to pay $645 million inheritance tax. I wonder how come such a rich man is not able to manage his tax competently. Read more here.
There is a time to reap and a time to sow
Brutus:
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures. (Shakespere)
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures. (Shakespere)
Using the above quote as an analogy, clearly there is a time to reap and a time to sow.
Buffett said, " Our favourite holding period is forever." Please don't take him too literally. His number 1 rule is not to lose money. But in 2008, he lost billions when he bought Conoco Phillips when oil was over $100.
Even great man can be dead wrong. It's easy to get swept up in a great rally when excitement is immense.
Euphoria is your enemy. Take heed!
Friday, February 26, 2010
Cash Flow Statement
Cash is the king, they say. If a company does not have enough cash to pay its staff or workers, it will be in trouble. All utility bills, phone bills or payments for raw materials must also be settled in time. Therefore it is essential that you look into the Cash Flow Statement (CFS) to see how money flows in and out of the company. Avoid companies that have cash flow problems.
The CFS is one of the three important financial statements in an annual report. The other two are the Balance Sheet and the Income Statement. If you have not studied accounting before, reading and understanding these statements will not be easy.
Nothing of value is ever achieved without hard work. So, no matter how hard it is, you must upgrade yourself if you want to become competent to compete with others in the stock market. Don't forget that some of the finest brains are there.
The CFS is one of the three important financial statements in an annual report. The other two are the Balance Sheet and the Income Statement. If you have not studied accounting before, reading and understanding these statements will not be easy.
Nothing of value is ever achieved without hard work. So, no matter how hard it is, you must upgrade yourself if you want to become competent to compete with others in the stock market. Don't forget that some of the finest brains are there.
Thursday, February 25, 2010
FimaCorp (Stock Code:3107)
Right on the heels of Plenitude is FimaCorp which announces excellent 3Q result. For the 3 months ended 31.12.2009, EPS jump to 25.06 sens while revenue goes up to 75,497. This compares well to 54,801 in the preceding year's corresponding period.
FimaCorp is in the business of trading and producing security and financial documents. It has income from rental and management of commercial properties. It is also in oil palm production and processing. It has 6,374 hectares of oil palm in Indonesia of which 5,656 hectares are matured.
The financial position of this small cap stock is extremely strong. Cash and bank balances at 87,691 has jumped 272.58% from a year ago. For a more understanding of this company, you can read it at Google Finance.
As usual, buy, sell or hold at your own risk. Good luck.
Wednesday, February 24, 2010
Oprah Winfrey
With an estimated net worth of over $1 billion, an Academy Award nomination, an Emmy-winning hit talk show, an XM satellite radio show, successful magazines (O, The Oprah Magazine, along with O at Home), and a cable channel (Oxygen Media, which she co-founded), Winfrey is an international media phenomenon. But even Winfrey, whom some considered so powerful that her campaigning for President Obama sealed him the election, has been vulnerable as of late. First, her school for girls in South Africa was hit with the second sexual harassment scandal in two years. Then she took a drubbing inNewsweek for supposedly giving a platform to dicey new age medicines. And, over the years, her ratings, though still the highest on daytime TV, continue to dwindle. Nevertheless, Oprah is still considered one of the most powerful forces in television--and the world.
PRESS RELEASE Date: 23 February 2010
PLENITUDE SECOND QUARTER RESULTS JUMP THREEFOLD ON STRONG PROPERTY SALES - Q2/10 Revenue jumps 202% while Net Profit surges 126% -
Kuala Lumpur, 23 February 2010 – Plenitude Berhad (“Plenitude” or the “Group”) reported an impressive threefold jump in its second quarter revenue for financial year ending 30 June 2010.
The Company announced its second quarter results ended 31 December 2009 (Q210) with a net profit of RM23.1 million or equivalent to 126% surge from the previous year’s corresponding quarter. The reported quarter revenue jumped to RM109.4 million, an increase of 202% from the previous year’s corresponding quarter.
According to Plenitude Executive Chairman Madam Chua Elsie, the strong demand and return of consumer confidence in the property market has benefited Plenitude particularly properties in Puchong, Johor and Penang which contributed substantially to this quarter’s performance.
“Our maiden luxury project in Penang, Bayu Ferringhi was in great demand and to date, only a few Bumiputra units of the condominium are available” she said. The subsequent launch of the 2 1⁄2 storey semi-detached homes in November 2009 to much fanfare by celebrity guest Phua Chu Kang also garnered much interest and sales.
“During this reporting quarter, our development in Puchong namely Taman Putra Prima also did exceptionally well. The high demand for our new launch, Phase 8A which consists of 197 units double storey terrace houses set a record sale for our subsidiary where all the units were sold out within two months from the launch date. The commercial development of 2 and 3 storey shop offices have also been sold out. We are of course extremely excited and driven by these developments,” added Mdm Chua.
Page 1 of 2PLENITUDE SECOND QUARTER RESULTS JUMP THREEFOLD ON STRONG PROPERTY SALES
“Sales for our other townships in Sungai Petani, Kedah and Taman Desa Tebrau, Johor also continue to rise. The attractive low interest rates offered by banks have also supported the increase in sales,” commented Mdm Chua.
“Plenitude’s continued strategy of prudent management, selection of strategic product launches have proven to be key factors in delivering our financial results today”
“We are pleased with our Company’s results for this reporting quarter as it continues to showcase the dedication and commitment of our team in delivering results to shareholders. We continue to stress on providing high quality products and services to our customers and we believe we have built a good and solid reputation in the market place,” she added
The cumulative half yearly results for financial year 2010 saw a profit after tax of RM34.9 million over revenue of RM167.3 million. This represented an overall increase of 49% and 61% in net profit and revenue respectively. Drawn on fundamental growth, Plenitude is poised to develop positively as the uptrend continues.
Given this positive environment, the cumulative half year earnings per share also soared to 25.83 sen compared to 17.38 sen for the same period last year.
Tuesday, February 23, 2010
Plenitude
Plenitude is poised to rise tomorrow following the release of excellent quarterly result. To the management of Plenitude, I say, Bravo, Well Done, Keep Up Your Good Work!
Telekom
On September 28, 2007, TM announced a revamp of its corporate structure, de-merging its fixed-line and mobile businesses into two separate companies: "FixedCo" and "RegionCo". FixedCo will comprise its domestic fixed-line business, internet service provider and other ancillary businesses. RegionCo will comprise Celcom, its domestic cellular operator, and all of its international operations. The de-merger exercise is scheduled to be completed by Q1 2008 and both FixedCo and RegionCo will be listed on Bursa Malaysia by June 2008.[4][5]
On December 10, 2007, TM announced a special dividend amounting to RM 1.6 billion to its shareholder. TM further added that after the demerger, Fixed Co. will adopt a dividend policy of a minimum RM700mil or up to 90% of normalized net profit, whichever is higher.[6]
On April 11, 2008, Telekom Malaysia announced that TM International will be listed on the Bursa Malaysia by April 28, 2008.[7] TM International is renamed as Axiata Group Berhad in May 2009.
Dialog Telekom customer base as of end 2008 was 5.5 millions
(The above article is an excerpt from Wikipedia)
As at 31.12.2009, the key statistics of TM are as follows:
Share Capital: 3,5343m. Total capital and reserve: 6,987.5m. Par value per share: RM1. Borrowings: 6,713.2m Cash & Cash Balances: 3,249m. Current assets: 6,180. Current liabilities: 4,441m. EPS: 18.30. Net assets per share: RM1.92. Last done price: RM3.35 per share.
TM has just announced a final dividend of 13 sen per share. Whether this is tax free or not, is not known yet. Earlier, it has paid an interim dividend of 10 sen per share. TM is paying more than it earns. Is this a reflection that it is confident of its future earnings? Of interest is that TM has a dividend policy of paying out RM700 million or 90% of its normalized earnings yearly. For those who are looking for good yield and safety of principal, this stock merits consideration.
Monday, February 22, 2010
Resort World Sentosa (RWS)
Will RWS be a roaring success? It's casino commenced business in the lunar year of the tiger on the 14 Feb 2010.
The Income Statement
When we do business, income is the first thing we look at. A company cannot survive without income. An Income Statement is a financial statement that covers a specific period. It is normally for 3 months or for a year. I have often heard someone said that the company made a lot of money. But when I asked him what was the earnings per share (EPS), he was not able to tell me that. This means that the person did not know about earnings. Earnings must always be looked at as EPS which is net earnings divided by the number of shares issued.
An Income Statement (IS) is also known as a Profit & Loss Statement or a Statement of Revenue or Expense. They are all the same.
An IS is divided into 2 parts, namely the operating and non-operating activities. The operating activities discloses information about revenues and expenses that are a direct result of the regular business operations.
The non-operating activities disclose revenue and expense information about activities that are not tied directly to a company's regular operations. For example, if a textile company sold a factory or some old plant equipment, then this information would be in the non-operating items section.
Ideally, revenue and EPS must go up in tandem. So when you look at EPS, don't forget to look at revenue as well.
An Income Statement (IS) is also known as a Profit & Loss Statement or a Statement of Revenue or Expense. They are all the same.
An IS is divided into 2 parts, namely the operating and non-operating activities. The operating activities discloses information about revenues and expenses that are a direct result of the regular business operations.
The non-operating activities disclose revenue and expense information about activities that are not tied directly to a company's regular operations. For example, if a textile company sold a factory or some old plant equipment, then this information would be in the non-operating items section.
Ideally, revenue and EPS must go up in tandem. So when you look at EPS, don't forget to look at revenue as well.
Sunday, February 21, 2010
Genting
If you own shares of Genting or Genting Singapore, or intend to buy shares of these two companies, you own yourself the responsibility of finding out what is happening in the casino at Sentosa, Singapore. Here is the link: Teething problems at casino Don't forget to read the comments. They give you plenty of information of what is happening there. All feedbacks are welcome. Thanks.
Saturday, February 20, 2010
Know what you buy
What is a Balance Sheet (BS)? If you don't know this, you need more help than you think.
Simply put, in the annual report of a company, the BS shows you what a company has and what it owes others on a specific date, usually the last day of December or June of a year. When you read the BS, make sure you note this, the date.
Before you buy any share of a company, you should take a look at the BS. This is actually "a must" if you want to invest intelligently. Yet how many people do this. I believe as much as 90% of the people don't do this. This is because, most people are interested in the price than the value of a stock. Because these people are traders, they normally do not bother to look into the fundamental aspects of the company they are buying.
"Why bother about the company? What matters is that the prize must be moving up." That's probably what they are saying.Yes, that's what really matters. But they forget to ask what's moving up the price or why the price is moving up.
Warren Buffett once said, "Only when the water has receded, would one know who's swimming naked." What did he mean by this simple statement? I take it to mean that when the market is at the top, everyone is happy and there are no losers; it is only when the market has turned down, then only we know who's who.
Do not count your winnings when the market is near or at the top. Count your winnings when the market is at the bottom. And if you have won when the market is at the bottom, then only you can say you have won.
Simply put, in the annual report of a company, the BS shows you what a company has and what it owes others on a specific date, usually the last day of December or June of a year. When you read the BS, make sure you note this, the date.
Before you buy any share of a company, you should take a look at the BS. This is actually "a must" if you want to invest intelligently. Yet how many people do this. I believe as much as 90% of the people don't do this. This is because, most people are interested in the price than the value of a stock. Because these people are traders, they normally do not bother to look into the fundamental aspects of the company they are buying.
"Why bother about the company? What matters is that the prize must be moving up." That's probably what they are saying.Yes, that's what really matters. But they forget to ask what's moving up the price or why the price is moving up.
Warren Buffett once said, "Only when the water has receded, would one know who's swimming naked." What did he mean by this simple statement? I take it to mean that when the market is at the top, everyone is happy and there are no losers; it is only when the market has turned down, then only we know who's who.
Do not count your winnings when the market is near or at the top. Count your winnings when the market is at the bottom. And if you have won when the market is at the bottom, then only you can say you have won.
Friday, February 19, 2010
Acid-test Ratio
Gold does not corrode in acid. To confirm that their gold nuggets are indeed gold, gold miners submerge them into acid for the test. If the nuggets do not get dissolved or destroyed, they have passed the test.
To determine how solvent a company is, you can use the acid-test ratio to find out. The acid-test ratio means: Cash + A/cs Receivable + Short Term Investment divided by Current Liabilities. If the result is less than one, view it with extreme caution.
To determine how solvent a company is, you can use the acid-test ratio to find out. The acid-test ratio means: Cash + A/cs Receivable + Short Term Investment divided by Current Liabilities. If the result is less than one, view it with extreme caution.
Thursday, February 18, 2010
Emotion
Joy, sorrow, fear, hate, love, greed and hope are all parts and parcels of emotion. Emotion can make you laugh, cry, perspire, tremble with joy or excitement, or shake with sorrow and even irrationalize your action.
In the stock market and in live, it is important that you control your emotion or else, others will control it. Invest wisely and you will live comfortably by retirement age. Trade unwisely or gamble, and chances are that you will have to work until you can work no more. Choose your own destiny.
In the stock market and in live, it is important that you control your emotion or else, others will control it. Invest wisely and you will live comfortably by retirement age. Trade unwisely or gamble, and chances are that you will have to work until you can work no more. Choose your own destiny.
Sunday, February 14, 2010
Saturday, February 13, 2010
Ajinomoto
Though Ajinomoto is a safe stock to invest, it is not suitable for those looking for quick money. The stock is normally thinly traded and lacks volatility. Traders should avoid this counter. For investors with a long term horizon and looking for a good dividend yield, this stock is recommended.
China is concerned about their overheating economy. It's intention to raise bank reserve by another another 50 basis points come Feb 25,2010 has caused jitters in the US stock markets. After opening down 116 points, it eventually closed at 10,099 this morning, down 45.05 from it previous level.
China is doing the right thing. Speculation in its property market is excessive presently. If it doesn't take preventive measures to cool down its economy, it may follow the US market that has a severe downturn in 2008. If this happens, many people will get hurt not only in China but in other countries as well.
China is concerned about their overheating economy. It's intention to raise bank reserve by another another 50 basis points come Feb 25,2010 has caused jitters in the US stock markets. After opening down 116 points, it eventually closed at 10,099 this morning, down 45.05 from it previous level.
China is doing the right thing. Speculation in its property market is excessive presently. If it doesn't take preventive measures to cool down its economy, it may follow the US market that has a severe downturn in 2008. If this happens, many people will get hurt not only in China but in other countries as well.
Friday, February 12, 2010
A Sleeping Beauty
Ajinomoto ( Aji - Stock Code 2658 )
For the year ended 31.03.2009, Aji has a paid-up capital of RM60,798,534. The par value of its share is RM1 each. EPS is 31.19 sen and total dividend paid out is 17 sen
Aji has just announced a set of commendable result for the three months ended 31.12.2009. Its EPS at 15.67 sen compares well with the earnings of its previous corresponding period of 9.17 per share. For the 9 months ended 31.12.2009, the EPS is 36.94.
On a conservative estimate, the full year's EPS should not be less than 52.61 sen, assuming that the 4th quarter result is somewhat similar to that of the 3rd quarter. At yesterday's closing price of 3.38, the forward PE ratio is 6.4246.
This stock has a clean balance. As at 31.12.2009, it has reserve of RM141,836,000. Its total current asset is RM135,137,000 while its total current liabilities is only RM21,294,000. Cash & bank balances stand at RM50,574,000. NTA per share is RM3.33. It has zero debt.
The Ajinomoto brand needs no introduction. They are very well known and used by every household in more than 100 countries. At less than RM3.40 per share, this stock is a Sleeping Beauty.
For a more understanding of Ajinomoto, click here to learn more
Disclaimer: The writer is not responsible for any action you take after you have read this article.You buy or sell at your own risk absolutely.
For the year ended 31.03.2009, Aji has a paid-up capital of RM60,798,534. The par value of its share is RM1 each. EPS is 31.19 sen and total dividend paid out is 17 sen
Aji has just announced a set of commendable result for the three months ended 31.12.2009. Its EPS at 15.67 sen compares well with the earnings of its previous corresponding period of 9.17 per share. For the 9 months ended 31.12.2009, the EPS is 36.94.
On a conservative estimate, the full year's EPS should not be less than 52.61 sen, assuming that the 4th quarter result is somewhat similar to that of the 3rd quarter. At yesterday's closing price of 3.38, the forward PE ratio is 6.4246.
This stock has a clean balance. As at 31.12.2009, it has reserve of RM141,836,000. Its total current asset is RM135,137,000 while its total current liabilities is only RM21,294,000. Cash & bank balances stand at RM50,574,000. NTA per share is RM3.33. It has zero debt.
The Ajinomoto brand needs no introduction. They are very well known and used by every household in more than 100 countries. At less than RM3.40 per share, this stock is a Sleeping Beauty.
For a more understanding of Ajinomoto, click here to learn more
Disclaimer: The writer is not responsible for any action you take after you have read this article.You buy or sell at your own risk absolutely.
Wednesday, February 10, 2010
The bulls hit back
It's all green at Wall Street as the market closes this morning. The Dow closes at 10,058.64 up 150.25. S & P is up 13.78 at 1,070.52 and gold is now 1,076.70 per ounce, up 11 dollars.
Debt problems in Portugal, Italy, Ireland, Greece and Spain (PIIGS) will probably be solved. The White Knight is the European Union. It has come to the rescue.
So, perhaps we are going to have a Chinese New Year rally as we come closer to THE TIGER. Let's pray and hope for the best.
Debt problems in Portugal, Italy, Ireland, Greece and Spain (PIIGS) will probably be solved. The White Knight is the European Union. It has come to the rescue.
So, perhaps we are going to have a Chinese New Year rally as we come closer to THE TIGER. Let's pray and hope for the best.
Tuesday, February 09, 2010
Market poised to drop further
The Dow lost 103.84 points and broke the 10,000 psychology level early this morning on concern of debt problems in Portugal, Ireland, Greece and Spain (PIGS). Other concerns are the unemployment rate rise in the US and Obama's move to restrict the activities of big banks in America. Of concern also is that China may suddenly cool down. The Dow closed at 9,908.39. This means that it has dropped 817 points or 7.6% since Jan 19, 2010.
Today, here in Malaysia, we are likely to have another down day. Be prepared for another beating!
Today, here in Malaysia, we are likely to have another down day. Be prepared for another beating!
Monday, February 08, 2010
Quotable Quotes
Wide diversification is only required when investors do not understand what they are doing.
Warren Buffett
Warren Buffett
Sunday, February 07, 2010
mYprice
In a race, the winner shot into prominence, while the losers faded away even though fractions of a second separated them.
In life, man against time, speed is what really matters. That's what 4G is all about.
A wonderful idea needs a great company to make things happen.
Comrades, put on your thinking cap, the prize money is there for the taking.
The USD1million challenge is on. Go to mYprice to know more.
Best wishes.
In life, man against time, speed is what really matters. That's what 4G is all about.
A wonderful idea needs a great company to make things happen.
Comrades, put on your thinking cap, the prize money is there for the taking.
The USD1million challenge is on. Go to mYprice to know more.
Best wishes.
Quotable Quotes
When considering a potential investment, the first step is to look for sectors that are experiencing growth.
SmallCapInvestor
SmallCapInvestor
Saturday, February 06, 2010
Quotable Quotes
Stay away from leverage. Nobody ever goes broke that doesn't owe money.
Warren Buffett.
Avoid companies whose debt to equity ratio exceeds 1. The higher the debt, the more risky the company is.
Warren Buffett.
Avoid companies whose debt to equity ratio exceeds 1. The higher the debt, the more risky the company is.
Friday, February 05, 2010
Bear Trap or Bull Trap
What's the difference between a Bear Trap and a Bull Trap?
A Bear Trap is a false signal that a rising trend of a stock or index has changed when actually it has not. Those who short will lose money when the market resumes its uptrend.
A Bull Trap is a false signal that a downtrend in a stock or index has reversed when actually it has not. Those who buy lose money when the downtrend continues.
Simply put, a BearTrap is a trap to trap the bears, whereas a Bull Trap is a trap to trap the bulls. So you see, whether you are a bull or a bear, you can be trapped.
A Bear Trap is a false signal that a rising trend of a stock or index has changed when actually it has not. Those who short will lose money when the market resumes its uptrend.
A Bull Trap is a false signal that a downtrend in a stock or index has reversed when actually it has not. Those who buy lose money when the downtrend continues.
Simply put, a BearTrap is a trap to trap the bears, whereas a Bull Trap is a trap to trap the bulls. So you see, whether you are a bull or a bear, you can be trapped.
Knights
In the corporate world, we have many kinds of knights.
White Knight, Black Knight, Gray Knight and Yellow Knight
Do you know what they are?
A White Knight is a company that makes a friendly offer to a target company that faces a hostile bid. It is best remembered by the phrase: A White Knight to the rescue!
A Black Knight is the opposite of a White Knight. It is a company that makes a hostile bid to takeover a target company. A Black Knight is usually thought of as someone having unpleasant personalities and is normally associated with kidnapping nubile girls, burning villages and slaying peasants.
A Gray Knight or Grey Knight is best thought of as a waiting vulture waiting to scoop up any leftovers. It is actually an unsolicited second bidder in a corporate takeover.
A Yellow Knight is a company that attempts a hostile bid to a takeover but chickens out at the eleven hour and ends up with a friendly merger discussion instead.
White Knight, Black Knight, Gray Knight and Yellow Knight
Do you know what they are?
A White Knight is a company that makes a friendly offer to a target company that faces a hostile bid. It is best remembered by the phrase: A White Knight to the rescue!
A Black Knight is the opposite of a White Knight. It is a company that makes a hostile bid to takeover a target company. A Black Knight is usually thought of as someone having unpleasant personalities and is normally associated with kidnapping nubile girls, burning villages and slaying peasants.
A Gray Knight or Grey Knight is best thought of as a waiting vulture waiting to scoop up any leftovers. It is actually an unsolicited second bidder in a corporate takeover.
A Yellow Knight is a company that attempts a hostile bid to a takeover but chickens out at the eleven hour and ends up with a friendly merger discussion instead.
Thursday, February 04, 2010
A Sleeping Beauty
A Sleeping Beauty is a stock that is undervalued and is ripe for a takeover. Such a stock has a strong balance sheet with plenty of cash in the bank. It is ill-liquid and normally not covered by stock analysts.
Tuesday, February 02, 2010
Value Trap
What is a Value Trap?
A trap is a trap no matter from what angle you look at it.
When the price of a stock drops substantially, many people look at it as undervalued and buy. When the stock eventually declines further, it means that they have walked into a trap. This is called a Value Trap.
A trap is a trap no matter from what angle you look at it.
When the price of a stock drops substantially, many people look at it as undervalued and buy. When the stock eventually declines further, it means that they have walked into a trap. This is called a Value Trap.
Thursday, January 28, 2010
PEG - the way to an undervalued stock
Print
ShareWhat if you could find a stock that not only was undervalued but had the possibility of big growth? I know what you're thinking, that it's nearly impossible to find those stocks. It's the holy grail of investing: a value stock that also has growth.
But here's a little secret. They do exist.
And no, they're not some $1 stock with little volume or other risky fundamentals.
Using the PEG Ratio to Find Great Stocks
Benjamin Graham, long considered to be the "father" of value investing, found that a low price-to-earnings ratio wasn't enough to unearth the true undervalued companies. He looked to the PEG ratio instead which combined both value and growth.
The PEG ratio is calculated by taking the price-to-earnings (P/E) ratio and dividing it by the growth rate.
Screening for PEG ratios under 1.0, which is considered the "magic" number for undervalued stocks, I was able to find dozens of companies that are cheap, have double digit growth and a Zacks Rank of #1 (strong buy) or #2 (buy).
Even though we've seen a huge stock market rally over the last 9 months, companies with low PEG ratios are clearly still out there.
I whittled down that list to 5 companies that are dirt cheap and have outstanding fundamentals.
5 Stocks With Magic PEG Ratios
Deckers Outdoor Corporation (DECK - Analyst Report), the manufacturer of the ever-popular UGG Australia brand of shoes and boots, has a PEG ratio of only 0.56.
The third quarter was a record quarter as UGG sales jumped 19.1% worldwide. Analysts expect 5-year earnings growth of 22.63%. The Zacks #2 Rank (buy) stock has a forward P/E of 12.8.
Force Protection Inc. (FRPT - Snapshot Report) trades with a PEG ratio of 0.57. The company manufactures ballistic- and blast-protected vehicles which have been recently been used in Iraq and Afghanistan.
Given the increased troop deployment to Afghanistan, analysts are projecting 5-year earnings growth of 20%. Force Protection is a Zacks #2 Rank (buy) stock and has a forward P/E of only 11.5.
Corinthian Colleges (COCO - Snapshot Report) hasn't gotten much love from investors even as it has surprised on estimates 4 quarters in a row. The higher education company which offers associates, bachelor's and master's degrees in a host of areas, has seen explosive growth during the recession as people return to school to train for new careers.
Corinthian Colleges has a PEG ratio of just 0.35. In fiscal 2010, Corinthian is projected to grow earnings by 87%. Growth isn't expected to be limited to just this year as analysts see 5-year earnings growth of 24.09%. The Zacks #2 Rank (buy) stock is trading with a forward P/E of just 8.5.
You can see the recent weakness in the stock in the 1-year chart below.
Teva Pharmaceuticals (TEVA - Analyst Report) seems an unlikely candidate to be both a value stock and have growth. But the generic drug giant has expanded its business due to its acquisition last year of Barr Pharmaceuticals.
Analysts expect big earnings growth in 2010 of 34.41% and project five-year earnings growth of 21.66%. The company has a tremendous history of beating estimates. The last time it missed was in 2007.
Teva has a PEG ratio of 0.60. It is trading at 12.9x forward earnings. Teva is also a Zacks #2 Rank (buy) stock.
True Religion Apparel Inc. (TRLG - Snapshot Report) has a strong brand in a hot segment of the clothing market: jeans.
The company has been able to grow even during the rough retail environment of 2009. By the end of the third quarter of 2009, True Religion had 66 retail stores compared to just 36 stores the year before. It forecast having 70 stores by the end of 2009.
True Religion sports a PEG ratio of only 0.23 as analysts expect big 5-year earnings growth of 43.5%. On a purely PEG ratio basis, True Religion is the best value of all of these 5 stocks. The Zacks #2 Rank (buy) stock is trading at just about 10x forward earnings.
The Holy Grail of Investing Does Exist
Value stocks don't have to be boring. Growth stocks don't have to be expensive. The Holy Grail of investing does exist if you dig deep enough. Use the magic of a low PEG ratio to find great growth stocks.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
Tuesday, January 26, 2010
An Understanding of Gold Price
From Wikipedia, the free encyclopedia
The Brown Bottom (or Brown's Bottom) is a term used to describe the period between 1999 and 2002, when gold prices were at their lowest in 20 years following an extended bear market.[1][2][3][4][5][6]
The period takes its name from the decision of Gordon Brown, then the UK's Chancellor of the Exchequer and later to become Prime Minister, to sell approximately half of the UK's gold reserves in a series of auctions. At the time, the UK's gold reserves were worth about US$6.5 billion, accounting for about half of the UK's US$13 billion foreign currency net reserves.[7] The UK government's intention to sell gold and reinvest the proceeds in foreign currency deposits, including euros, was announced on 7 May 1999, when the price of gold stood at US$282.40 perounce.[8] The advance notice of the substantial sales drove the price of gold down by 10% by the time of the first auction on 6 July 1999.[1]With many gold traders shorting, gold reached a low point of US$252.80 on 20 July.[8] The UK eventually sold about 395 tons of gold over 17 auctions from July 1999 to March 2002, at an average price of about US$275 per ounce, raising approximately US$3.5 billion.[8]
To deal with this and other prospective sales of gold reserves, a consortium of central banks - including the European Central Bank and theBank of England - were pushed to sign the Washington Agreement on Gold in September 1999, limiting gold sales to 400 tonnes per year for 5 years.[7] This triggered a sharp rise in the price of gold, from around US$260 per ounce to around $330 per ounce in two weeks,[7] before the price fell away again into 2000 and early 2001. The Central Bank Gold Agreement was renewed in 2004 and 2009.
Gold prices remained relatively low until 2001, when the price began consistently rising in a protracted bull market. By 2007, the price of gold had reached US$675, and the loss to the UK taxpayer was estimated at more the £2 billion, as the euros bought with the proceeds had also risen in value.[1] The gold price briefly passed US$1,000 per ounce in March 2008,[9] before reaching all-time highs of $1,043.77 on 6 October 2009[10] and $1,048.40 on 7 October 2009,[11] by which time the loss to the UK taxpayer was approximately £4 billion. Gold prices continued to rise, passing US$1,100 per ounce in early November 2009.[12]
The decision to sell gold at the low point in the price cycle has been likened to the mistakes in 1992 that led to Black Wednesday, when the UK was forced to withdraw from the European Exchange Rate Mechanism, which HM Treasury has estimated cost the UK taxpayer around £3.3 billion.[1]
Tuesday, January 12, 2010
The Uses of Silver
- Traditional
- Industrial
- Emerging
- Medical Applications
- Mirrors & Coatings
- Solar Energy
- Water Purification
- (Silver has many uses. The ones mentioned above, extracted from The Silver Institute are quite comprehensive.)
Wednesday, January 06, 2010
Useful Tips
To trade or invest successfully, you must have the knowledge to choose, the patience to wait, the will to win, the discipline and courage to implement, and most importantly, the wisdom to act wisely. Of course you must have cash as well.
Monday, January 04, 2010
Gold Analysis
The current bull market in gold is far from over. In fact it is only beginning.
While it has come off its highs, gold is still up 30% this year and, many factors still point to a long term bull trend.
Author: David LevensteinPosted: Monday , 28 Dec 2009
As we see the end of another year, and even though the price of gold has come off its highs of over $1225, the price gold gained some 30% this year. Now, as the dollar rebounds from it's lows, and as most equity analyst are looking for global equities to continue upwards, there is talk that gold has made it's high. While we are all entitled to our opinions, I believe that these analysts fail to see the bigger picture and that the price of gold has a long way to go before this bull market peaks.
From the 1980's high of $850, gold was in a bear market for some 21 years. During those years, the International Monetary Fund (IMF) as well as most central banks around the world tried to sell as much gold as possible. Some of the sales were done with "impeccable" timing such as the sales made by the United Kingdom that sold a large portion of their gold during 1999 and 2002 when the price of gold was around $275. And, as these bankers disposed of their gold holdings, the bullion banks in London and New York kept going short gold by using the futures markets.
The reason for me mentioning this is because I believe there are still many people who are of the mindset of this era and fail to see that since 2001 gold has been in a very strong bull market and still is. And this bull market is far from over. Yet, even to this day, the major bullion banks in New York maintain unusually large short positions of gold. One simple trading rule is to always follow the trend. If they can't see this upward trend, then perhaps they are looking at their charts upside down!
While the price of gold is influenced by many different factors the major driving force has been the lack of confidence people have had in all the major currencies, especially the US dollar. And, as some of these currencies have done well against the US dollar, gold has gone up substantially against practically all these currencies. It has gone up against the US dollar, the British pound, the Canadian dollar, the Chinese Yuan, the Swiss Franc, the Russian Rubble, the South African Rand, and the Mexican Peso, just to mention a few of the currencies.
Now, because the US dollar has lost more than 30% of its value since 2001, there are many investors who believe that the it is set to rebound in a big way during 2010 and thereby cause a drop in the gold price. Frankly, I don't see it. I still see the trend for the US dollar as downward, and while we may expect to see it rally during this down trend, I doubt that we are going to see a complete reversal in trend. How is this going to be possible when the current national debt of the US is around US$ 12 trillion and counting? And, while inflation remains very low worldwide, with these expansionary monetary policies, it is a matter of time before we see inflation increase. And, this will be just another catalyst for the gold price to make more new historic highs. When this happens the current price of gold will look like bargain prices.
As this financial crisis continues, it is expected that more countries will encounter financial problems. Already, there is talk about Ireland, Spain, the UK in addition to Greece and Dubai. And despite the fact the investors usually rush into the US dollar as the ultimate safe haven, it is a matter of time before they realize that things have changed and that the US dollar is not going to be the store of wealth that it once was.
Technicals
It seems that the current correction in the gold price has found good support above $1075. While there may still be more selling pressure in the gold market, I believe that we will see the end of this correction during the month of January.
About the author
David Levenstein is a leading expert on investing in precious metals .He brings over 29 years experience in futures, equities, forex and bullion. And, although he began trading silver through the LME in 1980, when it comes to gold, he has traded gold bullion, gold coins, gold shares, gold ETF, gold funds and gold futures for his personal account as well as for clients. Over the years, David has been published in dozens of publications and has appeared on CNBC and Summit TV (South Africa), and is a regular guest on JSE Direct, a premier radio business channel in Johannesburg, South Africa. He is also a regular commentator on www.kitco.comand www.mineweb.com David has lived and worked in Johannesburg, Los Angeles, London, Hong Kong, Bangkok, and Bali.
For more information go to: www.lakeshoretrading.co.za
Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice.
Sunday, December 27, 2009
Gold - the ultimate Currency
Man has an affinity for gold. Since time immemorial, gold has been a much sought-after metal. It is a symbol of wealth and power. People of all ages treat it as precious. The price of gold was about US$35 per ounce in 1946. As of Dec 24, 2009, it was traded at US$1,105.20 per ounce. For comparison, a shop house in 1946 that costs Malayan dollars 20,000 is worth about RM500,000 now.
In the past, the price of gold has been rather slow. But in the last 10 years, it has taken a turn for the better. From below US$300 per ounce it has fairly quickly reached US1,227.50 per ounce. This is highest price of gold so far.
Gold and the US$ do not go the same way. When the US$ appreciates, the price of gold drops. This is evident in the last 3 weeks. Gold was last traded at US$1,105.20 per ounce on Dec 24, 2009. From its peak, it has dropped about 9.979%. Many analysts call it a correction. Is it a correction, and how much will it correct? From my reading of the chart, I would say that it is a correction and it is likely to come down to about US$1000 per ounce before trending up further. So watch it carefully, if you want to invest in gold.
China is now crazy for gold. Until a few years ago, the Chinese in China are not allowed to invest in gold. Now, it's the other way round. The Chinese government wants their citizens to buy and hoard gold. China has a population of 1.3 billion. Imagine how much impact the price of gold will be affected if this group of 1.3 billion people became interested in gold and started to buy and store gold. The recent increase in the demand of gold could be due to this change of heart in China.
Gold has many uses. Chief of which are for jewelry, coinage, dentistry and for the electronic industries. Our ever-upgrading use of technology has actually been a major factor in the recent increases in the demand for gold.
The paper currency everyone uses now is called fiat currency which is sure to devalue over time. Gold on the hand is sure to appreciate.
How do I invest in gold? The fastest and easiest way is to buy jewelry. However, this is not a smart way. Because when you buy jewelry, a certain amount of fees for handling and craftsmanship has been added to the price. This means when you later sell back the jewelry to the shop, you will have to sell it at a discount. Besides this, jewelry also attracts robbers and thieves who may attack you when you least expect it.
Buying bullion or gold bars also carries the same problem of risk. Perhaps opening a Gold Account at Maybank maybe the answer. If you wish to find out more, just give them a ring.
Another way to invest in gold is to buy gold mining stocks. At the New York Stock Exchange, there are many gold mining stocks you can buy. Some of these mining stocks are: Goldcorp Inc. (GG), Eldorado Gold (EGO) and Barrick Gold Corp (ABX).
Silver normally goes hand in hand with gold. Thus, if you believe in gold, you should also consider investing in silver. One silver stock that I like is SilverCorp (SVM) now selling at under US$7. I have bought 1000 shares at 6.46 per share.
Disclaimer: Whatever action you take as a result of reading this article is your own responsibility. You buy or sell at your own risk.
Happy New Year and may 2010 be a Golden Year.
In the past, the price of gold has been rather slow. But in the last 10 years, it has taken a turn for the better. From below US$300 per ounce it has fairly quickly reached US1,227.50 per ounce. This is highest price of gold so far.
Gold and the US$ do not go the same way. When the US$ appreciates, the price of gold drops. This is evident in the last 3 weeks. Gold was last traded at US$1,105.20 per ounce on Dec 24, 2009. From its peak, it has dropped about 9.979%. Many analysts call it a correction. Is it a correction, and how much will it correct? From my reading of the chart, I would say that it is a correction and it is likely to come down to about US$1000 per ounce before trending up further. So watch it carefully, if you want to invest in gold.
China is now crazy for gold. Until a few years ago, the Chinese in China are not allowed to invest in gold. Now, it's the other way round. The Chinese government wants their citizens to buy and hoard gold. China has a population of 1.3 billion. Imagine how much impact the price of gold will be affected if this group of 1.3 billion people became interested in gold and started to buy and store gold. The recent increase in the demand of gold could be due to this change of heart in China.
Gold has many uses. Chief of which are for jewelry, coinage, dentistry and for the electronic industries. Our ever-upgrading use of technology has actually been a major factor in the recent increases in the demand for gold.
The paper currency everyone uses now is called fiat currency which is sure to devalue over time. Gold on the hand is sure to appreciate.
How do I invest in gold? The fastest and easiest way is to buy jewelry. However, this is not a smart way. Because when you buy jewelry, a certain amount of fees for handling and craftsmanship has been added to the price. This means when you later sell back the jewelry to the shop, you will have to sell it at a discount. Besides this, jewelry also attracts robbers and thieves who may attack you when you least expect it.
Buying bullion or gold bars also carries the same problem of risk. Perhaps opening a Gold Account at Maybank maybe the answer. If you wish to find out more, just give them a ring.
Another way to invest in gold is to buy gold mining stocks. At the New York Stock Exchange, there are many gold mining stocks you can buy. Some of these mining stocks are: Goldcorp Inc. (GG), Eldorado Gold (EGO) and Barrick Gold Corp (ABX).
Silver normally goes hand in hand with gold. Thus, if you believe in gold, you should also consider investing in silver. One silver stock that I like is SilverCorp (SVM) now selling at under US$7. I have bought 1000 shares at 6.46 per share.
Disclaimer: Whatever action you take as a result of reading this article is your own responsibility. You buy or sell at your own risk.
Happy New Year and may 2010 be a Golden Year.
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