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.

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

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.

Thursday, February 25, 2010


Oh Solitude! this must be thy charm that sages have seen in thy face.

FimaCor (Stock Code 3107)

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


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.


“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 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!


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.

Value your life; always wear your seat belt

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.

Genting Singapore

Does this chart look bearish to you?

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.

Sunday, February 21, 2010


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.

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.

Thursday, February 18, 2010


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.

Sunday, February 14, 2010

Saturday, February 13, 2010


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.

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.

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.

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!

Monday, February 08, 2010

Quotable Quotes

Wide diversification is only required when investors do not understand what they are doing.
Warren Buffett

Sunday, February 07, 2010


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.

Quotable Quotes

When considering a potential investment, the first step is to look for sectors that are experiencing growth.


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.

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.


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.

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.