Sunday, May 30, 2010

The fiasco at Sime Darby

Sime Darby's latest quarterly report for the period ended March 31, 2010 shows a loss of RM308,630,000. This is incredible! Not showing a profit is bad enough. A massive loss is surely a catastrophe. The core business of Sime Darby (SD) is in oil palm. The price for this commodity has been around RM2500 per tonne for the period. This alone would have generated immense profit for SD. So, what happened? Some one says they have the best brains in the country. I don't know. What I do know is that the best brains do not necessary produce the best results. Very often they are best only for themselves.

The government has assured us that a thorough investigation would be carried out at SD. It best they do it because the world is watching us. Unless we have transparency, accountability and integrity, foreign funds will shy away from us.

Every time a disaster happens, the CEO needs only to step down. He then goes away, a free man, and probably lives happily ever after. Is this enough? The devil must be given his due. Reward him if he delivers. Punish him if he misbehaves; let the action befits the crime.

Those who have bought SD at high prices, expecting good profit, must be cursing now. They have my sincere sympathy. I do not own any SD shares. If I have them, cutting loss or taking profit is the best action I can think of. In other words, I would sell them now.

Some say big is beautiful. I say apples are better than papayas.

Saturday, May 29, 2010

We are what we eat

Men's needs and women's needs are different as far as foods are concerned. Tomato sauce, oysters, broccoli, peanut butter and watermelons are good for men. As for women, papaya, flaxseed, tofu, buffalo meat and collard greens are the super foods for women. To understand more, click here.

Tuesday, May 25, 2010

How good is Richard Russell?

Dow Theorist Richard Russell : Sell Everything, You Won't Recognise America By the End of the Year - By Joe Weisenthal, Business Insider (24/5/10)Print
By Joe Weisenthal, Business Insider
Monday, 24 May 2010 00:29


Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

That's pretty intense!

Update: By popular demand, here's more on what he sees in the market. The gist is that the markets recent gyrations are telling him that the economy is in trouble:

And I ask myself, "Am I seeing things? The April 26 high for the Dow was 11205.03. The Dow is selling as write at 10557 down 648 points from its April high. If business is even better than expected, then why is the Dow down over 600 points? And why, if there were 674 new highs on the NYSE on April 26, were there only 20 new highs on Friday, May 14? And if my PTI was 6133 on April 26, why is it down 17 points since its April high?

The fact is that I've been seeing deterioration in the stock market ever since early-April, and this in the face of improving business news. The D-J Industrial Average is composed of 30 internationally known top-quality blue-chip stocks. These are 30 of "America's biggest companies." If Barron's is so bullish on the future of America's biggest companies, then why isn't the Dow advancing to new highs?

Clearly something is wrong. But what could it be? Much as I love Barron's, I trust the stock market more. If I read the stock market correctly, it's telling me that there is a surprise ahead. And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.

About Dow Theory -- First, we saw the recent April highs in the Averages. Then we saw a plunge in both Averages to their May 7 lows -- Industrials to 10380.43, Transports to 4298.12, next a short rally. If ahead, the two Averages turn down and violate their May 7 lows, that would be the clincher. Such action would signal the certain resumption of the primary bear market.

Just as for years I asked, cajoled, insisted, threatened, demanded, that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (including C and BYD, but not including golds) and get into cash or gold (bullion if possible). If the two Averages violate their May 7 lows, I see a major crash as the outcome. Pul - leeze, get out of stocks now, and I don't give a damn whether you have paper losses or paper profits!

Monday, May 24, 2010

Is it a Correction or a Reversal?

Stock prices stabilized on Friday, but it felt like the selling ended more because of exhaustion than because of some return of optimism.

Since early May, the Dow Jones Industrial Average has lost almost 10% of its value -- officially known as a market correction. But the big question on everyone's mind: Is this just a correction or the start of something worse, a new bear market?

Despite Friday's rally, the Dow ended the week down 4% and firmly in the red for the year. The results were just as bad for the Nasdaq Composite (down 5% for the week) and the Standard & Poor's 500-stock index (down 4.2%). European and Asian markets logged similar declines; oil and gold prices were also down.


So what's going on? Is it 2008 all over again? Or is this just a pause in the market recovery that began over a year ago and, until now, hadn't seen any serious setbacks at all?

Bulls point to rebounding growth in the U.S., robust corporate profits and a very friendly interest-rate environment. Bears talk darkly about Europe's fiscal problems, signs of a slowdown in China and the headwinds of new financial-industry regulation.

During the past few weeks, the bears have had the better of the argument. But Friday's modest recovery shows the bulls can still score points. During tense times such as these, Wall Street professionals often look for key "tells" that will provide a clue as to the market's future direction. Good "tells" are key skirmish points in the market between bulls, who generally want to see prices go up, and bears, who want to see them go down. The winners of these skirmishes tend to win the bigger battle.

Here are four "tells" that will, ah, tell us which way the market is headed.

1 Oil prices: When the global economy hums, it needs more of the black stuff. Thus, oil prices are widely seen as a proxy for global growth. When oil prices rise, quickening growth is on the horizon. When prices decline, look out below.

Oil prices also reflect a lot of other issues. Since oil is priced in dollars, a rally in the greenback, all things being equal, will reduce prices. Also, if folks fear unrest in the Middle East or in other volatile oil-producing locales, such as Nigeria, prices could spike.

For the past year, oil prices as a global growth proxy, despite the other issues, have held up well. Oil prices bottomed early in 2009 at just over $30 a barrel and then zoomed higher even before it became apparent that a global recovery was under way.

Oil is down about 20% from its recent high of $86.84 a barrel. But even at around $70 a barrel, it is up about 14% from a year ago. If oil can hold above $70 and edge back toward $80, that would indicate that fears of a global slowdown are receding.

2 GE stock: In March 2009 as the stock market cratered and panic raced through the system, General Electric shares headed sharply lower, closing at the devilish level of $6.66 a share. GE, the only original member of the Dow Jones Industrial Average still in the measure, traded as though it was headed into oblivion.

But GE recovered from those lows. Investors came to understand that the maker of everything from jet engines to light bulbs wasn't about to go out of business, despite some curious and ill-considered actions at its financial unit. Since that time, GE stock more than tripled, rising to $19.49 in late April.

Since then, though, it has pulled back to $16.42, a jaw-dropping fall of 16% in less than a month. GE is an important tell for two reasons. First, it has a huge global footprint and is in many different industries. Second, its finance arm isn't completely out of the woods. When concerns arise about the banking system, GE gets another kick in the shins.

GE has already dropped quite far. If it continues to fall, even just a little bit, it's painting a dark picture of the future.

3 The euro: Up until recently, most people in the U.S. got along fine without thinking about the euro much. Sure, a trip to Paris might spark an examination of exchange rates, but otherwise the euro just kind of moseyed along in its own European way. That's all changed, of course.

Today we see headlines about riots in Greece, austerity measures in Ireland, fiscal issues in Spain and problems in Portugal. It's like the great summer vacation has moved from the travel section to the business pages.

It can be distracting keeping track of European issues (Did you know Malta is in the euro zone? Did you know Malta is a country?), so the easiest way to make sense of all the grim European headlines is to simply track the euro.

The key element is the pace of the euro's move. It's not necessarily problematic if the euro is dropping (it is down 14% against the dollar this year). It is, however, not a good sign if it is dropping very quickly.

The euro is at about $1.25. If it stabilizes or even drifts lower at a leisurely pace, that would indicate that the euro-zone crisis is abating, which would help U.S. stocks. A fast move down will prompt chatter of intervention and make a bear market more likely in the U.S.

4 The KBW Bank Index: The financial crisis began as a credit crunch that eviscerated the banking sector. When things are bad in Europe, bank stocks, especially the big European bank stocks, fall most sharply. When things look better, they put in outsized gains.

Tacked on top of this, but frequently overlooked amid the civil unrest in Athens and jitters stemming from the Flash Crash of a couple weeks ago, is the fast-approaching new regulatory environment for the financial system. The Senate last week passed its reform bill and now both houses of Congress will hammer out a final law. The G-20 group of nations is working on global banking reforms.

The KBW Bank Index -- which tracks big banks -- will tell us if those regulations are going to bite very hard or merely sort of hard. A really sharp bite will create one more headwind for the broader market. Given how Germany's unilateral move against short-selling rattled investors last week, we shouldn't overlook how new finance-industry regulations might affect the broader market.

The KBW Bank Index fell 16% in the last month. On Friday, however, it was up nearly 4%. That would be a positive indication in what is still a "fulcrum sector" in the market.

Write to Dave Kansas at


Sunday, May 23, 2010

Oil in Sea Pollution

Oil spewing from 5000 feet below water. A way has not been found to stop it yet. It is getting worst as each day passes. Sea creatures must be dying by the millions.
This kind of calamity is bad for the stock market. It can disrupt the transportation of goods from one country to another and cause massive destruction to the environment. Is this due to the greed of man?

Saturday, May 22, 2010

Term of the Day - invest

To engage in any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): sufficientresearch has been conducted; the odds are favorable; the behavior is risk-averse; a systematic approach is being taken; emotions such as greed and fear play no role; the activity is ongoing and done as part of a long-termplan; the activity is not motivated solely by entertainment or compulsion; ownership of something tangible is involved; a net positive economic effect results. (

Wednesday, May 19, 2010

TDM Berhad

TDM has just released its 1Q result for the period ended 31.3.10. It shows earnings of 8.89 sen per share. This is an improvement of more than 4 folds over the EPS of 1.90 sen in the corresponding period of the preceding year. The company is well managed. It has plenty of cash in hand and very little borrowings. Its core business comprises oil palm and healthcare which have great potential for growth and profits.
At 1.95 cum-dividend of 13 sen, there is value for money. Buy some for the long term. Your children will love you for that. Buy before 21.5.10 to be eligible for the dividend.
As usual, buy at your own risk.

Friday, May 14, 2010

The World's Safest Saw

It's incredible!

Current Ratio

What is Current Ratio?

An indication of a company's ability to meet short-term debt obligations; the higher theratio, the more liquid the company is. Current ratio is equal to current assets divided bycurrent liabilities. If the current assets of a company are more than twice the currentliabilities, then that company is generally considered to have good short-term financialstrength. If current liablities exceed current assets, then the company may haveproblems meeting its short-term obligations. For example, if XYZ Company's total current assets are $10,000,000, and its total current liabilities are $8,000,000, then its current ratio would be $10,000,000 divided by $8,000,000, which is equal to 1.25. XYZ Company would be in relatively good short-term financial standing. (

Tuesday, May 11, 2010

10 Pharmaceutical stocks with highest dividend yields

If you believe in dividends, this article merits your attention. Almost all these stocks are listed in the NYSE.

Below are the top 10 Pharmaceutical stocks with highest dividend yields for the last 12 months. One Chinese company (TPI) is on the list.

  • AstraZeneca plc (ADR) (NYSE:AZN) has the 1st highest dividend yield in this segment of the market. Its current dividend yield is 8.30%. Its dividend payout ratio was 37.11% for the last 12 months. Eli Lilly & Co. (NYSE:LLY) has the 2nd highest dividend yield in this segment of the market. Its current dividend yield is 5.66%. Its dividend payout ratio was 52.87% for the last 12 months. Bristol Myers Squibb Co. (NYSE:BMY) has the 3rd highest dividend yield in this segment of the market. Its current dividend yield is 5.26%. Its dividend payout ratio was 70.28% for the last 12 months. GlaxoSmithKline plc (ADR) (NYSE:GSK) has the 4th highest dividend yield in this segment of the market. Its current dividend yield is 4.91%. Its dividend payout ratio was 54.91% for the last 12 months. Novartis AG (ADR) (NYSE:NVS) has the 5th highest dividend yield in this segment of the market. Its current dividend yield is 4.14%. Its dividend payout ratio was 42.06% for the last 12 months.

Abbott Laboratories (NYSE:ABT) has the 6th highest dividend yield in this segment of the market. Its current dividend yield is 3.61%. Its dividend payout ratio was 47.77% for the last 12 months. Tianyin Pharmaceutical Co, Inc. (AMEX:TPI) has the 7th highest dividend yield in this segment of the market. Its current dividend yield is 3.36%. Its dividend payout ratio was 21.52% for the last 12 months. Biovail Corporation (USA) (NYSE:BVF) has the 8th highest dividend yield in this segment of the market. Its current dividend yield is 2.40%. Its dividend payout ratio was 58.29% for the last 12 months. Cardinal Health, Inc. (NYSE:CAH) has the 9th highest dividend yield in this segment of the market. Its current dividend yield is 2.31%. Its dividend payout ratio was 36.37% for the last 12 months. Novo Nordisk A/S (ADR) (NYSE:NVO) has the 10th highest dividend yield in this segment of the market. Its current dividend yield is 1.74%. Its dividend payout ratio was 77.24% for the last 12 months.

Sunday, May 09, 2010

Images in Gold

President Hu Jintao, Former President Jiang Zemin, Late Patriach Deng Xiaoping, and Mao Zedong
Pure gold Disney character dolls showing Snow White and the seven dwarfs, priced at US$300,000 in November 2009
Gold figurines on display in a shop window in Hong Kong in November 2009

Friday, May 07, 2010

Dow creates a record

The near 1000-point drop in the Dow intra-day followed by a 700-point rally must be a record in the history of Wall Street. It is reported that an institutional trader made a mistake by entering to sell 6 billion shares instead of 6 million shares. When participants in the stock market saw the huge volume up for sale, they panicked and sold at the market. This caused the Dow to plummet, and within 6 minutes, it had dropped 700 points. At the end of the day, it was down 347 points.

The debt crisis in Europe is the greatest concern presently. Greece is leading the way. Others in trouble are Portugal, Ireland, Italy and Spain. If the debt disease spread like the H1N1, the amount of damage to the stock market can be enormous. But markets always come back stronger after panic sales. This does not mean you should go in and buy what is offered. I think it's better to wait and see. If you are a chart reader, you should wait for two consecutive good candles before you buy. This may not always be correct. But odds are definitely in favor if you wait for an excellent opportunity before you take any action.

When in doubt stay out.

Tuesday, May 04, 2010

Gold and Silver may be Great Investments.

Why You Must Buy Gold, or Even Better, Silver, Now

By Porter Stansberry
Thursday, August 10, 2006

Many investors believe that gold is a hedge against inflation. And, that’s true... but that’s not the real secret of gold...

The real purpose of gold is to hedge against government hubris.

I won’t get into a political analysis in today’s column – you get enough of that in the paper and on TV. But surely you can see that, around the world, the role of government is at the top of a huge period of expansion.

In Europe, governments have launched an enormous economic experiment: a paper currency that’s not even backed by a single political force. In the United States, the government believes it can spend money it doesn’t haveeternally without consequences.

In Latin America, two governments, Bolivia and Venezuela, have decided that they’re entitled to steal billions in assets from private investors, break contracts and takeover the most important sectors of their economies. In Russia, although it’s not really a break from the past, the government has stolen the biggest energy company and staged a show trial of its CEO.

And, perhaps most dangerously of all, governments around the world have promised their citizens a level of economic security in the form of pensions and health benefits that they cannot possibly afford.

Today, not very many people understand the fallacy of these actions... or their inevitable collapse. But... over time... more and more people will begin to doubt the solvency of their governments and the practicality of their schemes. If the government can’t pay its bills... why am I saving its dollars? If I can’t depend on the government to protect me and my family, how will I pay for protection... for health care... for energy...?

When people have tangible evidence that something has gone badly wrong with the economy, they begin to hedge against it. They hoard real assets. Rich people hoard gold and silver.

Hedging is like buying life insurance. You don’t buy life insurance as an investment, except maybe as a tax strategy... but that goes beyond this metaphor. In general terms, you buy insurance so that, if something terrible happens, your family will have something to live on. Likewise, you should have some exposure to gold and silver in your portfolio. And no, it’s not too late to buy some – far from it.

What you want in a hedge is a lot different than what you want in an investment. With an investment, you need something that’s stable, which hopefully provides a yield, and isn’t going to drive you crazy with volatility. Silver is none of these things. But it is a perfect hedge, because, when things go wrong economically – when there’s a crisis – the price of silver goes bananas.

Why? Because of the silver to gold ratio.

Historically the price of gold has been around 16 times the price of silver. So, for example, based on the long-term historical average ratio, with the price of gold around $650, the price of silver should be around $40. It’s not, of course. It’s around $12.50

Today then, the silver ratio is more like 50. What explains the difference between hundreds of years of history and today? Simple – demand for silver as money. During periods of history when silver has been used as a currency, it has almost always been valued ~ 1/16th the price of gold.

When silver has been “demonetized,” supplies soar as people sell silver for gold and currency. On the other hand, during periods of monetary crisis, the price of silver tends to increase far more than the price of gold as demand for silver is once again created by monetary needs.

This influences the silver to gold ratio heavily in silver’s favor. For example, the ratio returned to its historic range (16) during World War I. It happened again in the early 1970s when Nixon abandoned the gold standard. It also happened most famously in 1979/1980 when gold briefly soared to $800 an ounce and it seemed as if America was really entering a severe money crisis.

My friend and fellow newsletter writer, Chris Weber, wrote an outstanding report on the history of the silver/gold ratio in his April newsletter. I urge you to read it ( I admit freely that Chris’s work has influenced my thinking; it’s not the first time. I’ve known Chris since the mid-1990s. No other general investor that I know, buying regular common stocks, has made more money investing and suffered so few losses in that time. I believe Chris Weber is the single best investor in the world. He’s long silver.

Silver is the best hedge against a money crisis because its price will increase many more times than gold, as the silver-to-gold ratio reverts to its historic average. Silver will once again be worth 1/16th the price of gold. It is now worth only about 1/48th.

Assuming gold hits my target of $2,000 an ounce; gold hoarders will have gained roughly three times their money, based on today’s $650 price of gold. But if you hedge with silver, you could make a lot more... $2,000 gold divided by the historic silver ratio of 16 sees the price of silver at $125 per ounce – roughly ten times the current price.

Given this perspective, I hope you see why silver’s recent move from around $7 to around $12.50 is only the very early signs of a money crisis. It’s going much, much higher.

Even if you think I’m nuts, it’s still a good idea to hedge your portfolio from the currency risks I believe are very real. You can do so easily and safely by taking a position in silver today.

Good investing,

Porter Stansberry

Editor's note: Porter Stansberry is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.

The price of gold today is at US$1,182.70 per ounce and that of silver is US$18.81 per ounce. Please note that the above article was written in August 2006. Thus, it looks like gold and silver are really on the way up. Will this uptrend continue? My opinion is: Yes.

Saturday, May 01, 2010

Companies in trouble

If you have any of the companies appended below, it's time to worry.
The companies are:
Nam Fatt ; Patimas; Mangotone Group; Wawasan TKH Holdings; Luster Industries and KBB Resourses. To understand more, click here.