Buyers turn to Kajang as KL home prices rise

By Star Online: Business
27 October 2012

THE past couple of years, in tandem with the rise in property prices in major towns and cities in the country, Kajang's property market has generated quite a bit of interest among both developers and house buyers.

Located about 20km from the city of Kuala Lumpur, Kajang is benefiting from its second-tier location status as Kuala Lumpur and Petaling Jaya prices move beyond the affordability of ordinary salaried workers.

Two property negotiators based in the area say much of the interest of late is due to improved accessibility with the various highways that have been completed, and not so much because of the soon-to-materialize MyRapid Transit system (MRT).

Quote - Sharpening the ax

Abraham Lincoln said that if you have one hour to chop down a tree, spend 40 minutes sharpening the ax.

Quote - Keep on asking

Rudyard Kipling : “I keep six honest serving men, they taught me all I knew— their names are What and Why and When—and How and Where and Who.”

Individual investors are destroying their wealth - 7 sins that individual investors commit

From Market Watch
By Howard Gold
20 October 2012

NEW YORK (MarketWatch) — OK, individual investors, do me a favor: go to the mirror and take a good, long look.

Now tell me honestly that you really know what you’re doing with your money.

Not too many of you left? I thought not.

Two huge bear markets, a housing depression, a financial crisis, and sudden market blowups from the flash crash to the Facebomb have sent investors fleeing in terror from stocks, which seemed to offer the promise of easy riches in the 1990s.

But I also suspect many people have realized that investing — or at least active investing — just isn’t for them.

That wouldn’t be surprising, given the findings of a 2011 study by two leading academic experts on individual investors’ behavior.

Brad Barber of UC Davis and his colleague Terrance Odean of Berkeley examined nearly the entire body of research on how individuals invest, covering more than 40 studies.

This is much more than the usual “review of the literature”; it’s a painful catalogue of how individual investors make every mistake in the book and wind up either losing money or badly trailing no-brainer index funds.

Among the various sins that investors commit — and which cost them dearly — are:

•Trading too much, incurring big fees that more than wipe out their gains

•Selling winners while clinging to losers

•Focusing too much on individual stocks and not diversifying their portfolios enough

•Falling for stocks that get extensive media coverage or are trading near their highs

•Engaging in thrill-seeking behavior that confuses investing with speculation or gambling

•Trading or investing in financial instruments they don’t understand

•And, finally, despite all of the above, believing in their own superior investing ability

#Self-reflection: Those highlighted are some of my traits currently, should make improvement on.

10 lessons from the market crash of 1987

From Market Watch
By Wallace Witkowski
19 October 2012

SAN FRANCISCO (MarketWatch) — Twenty-five years ago, on Oct. 19,1987, the Dow Jones Industrial Average plunged almost 23%, its largest one-day percentage-point drop ever. While the crash didn’t usher in another Great Depression, it did introduce investors to a new era of stock-market volatility.

Even though market controls, such as circuit breakers introduced after the “flash crash” of May 6, 2010, are designed to avoid another crash like Black Monday, markets are still susceptible to severe and prolonged downturns.

U.S. stock prices are close to the record highs achieved five years ago, before the housing and financial crises decimated them. The Dow is near its all-time high of 14,164.53. Similarly, the Standard & Poor’s 500-stock Index is approaching its all-time high of 1,565.15. The ascent to a potentially new peak, however, is coming up against a potential bout of volatility that’s expected with the November elections and the economy’s “fiscal cliff” of government spending cuts and tax hikes in January.

With that in mind, MarketWatch polled several money managers who witnessed Black Monday about lessons from 1987 that are relevant to investors today.

BJCORP - Personal Technical Analysis 19-10-12

Personal Technical Analysis
19 October 2012

The price has been trending up with higher-low since it was supported at 0.595 on 11 Sep 2012 until today.
The higher-low is further evidenced by the higher-low of RSI and MACD along that period.
Both fast (46.2) and slow (41.6) STO leaves room for further upside as the indicator is still way off overbought level of 80.0.
Immediate resistance is at SMA50 of 0.66, second resistance will be at 0.695.

P/S: I am holding shares of BJCORP at average price 0.8342 since buying it in 26/4/12.
Mistake: Did not analyse both fundamental and technical aspect of the stock when buying, simply thought that it will rebound right after a sharp fall.

Lesson: Analyse both intrinsic value and the trending of the stock before buying, a big fall in price does not guarantee a rebound, do not go against the trend. #lessson1

Get set to buy stocks after a market crash

By MarketWatch
18 October 2012

SAN FRANCISCO (MarketWatch) — Wall Street has never been a market for old men — but when the going gets tough, the graying veterans get the 3 a.m. call for help.

Today’s stock-market gurus were 25 years younger on Oct. 19, 1987, when they learned a painful lesson in the throes of a full-blown investor panic. The Dow Jones Industrial Average lost almost a quarter of its value that day — its worst single-session percentage drop ever. “Black Monday” conjured fears of that other October crash almost 60 years earlier, which ushered in the Great Depression. 

In fact, the day after Black Monday was a terrific time to buy stocks.

A $10,000 stake in the 30 Dow stocks on Oct. 20, 1987 would be worth more than $137,000 now, according to investment researcher Morningstar Inc. That’s an 11% annualized return, including dividends, and even factoring in shareholders’ “lost decade” between 2000 and 2010.

But buying at points of maximum pessimism takes steel nerves most investors don’t have. Few of us could readily follow Baron Nathan Rothschild’s famous dictum to “buy when there’s blood in the streets — even if it’s your own.” Fear and doubt, in our own lives or caroming off of global, large-scale events, are powerful and limiting emotions.

So how do you take the plunge after a plunge?

The old Masters of Wall Street: how well they understood — and still do. Market pros see the wisdom in Warren Buffett’s admonition, channeling his mentor Benjamin Graham, to “be greedy when others are fearful, and fearful when others are greedy.”

They realize, as the revered market analyst Bob Farrell noted in his famous “Market Rules to Remember,” that there’s money to be made given that “fear and greed are stronger than long-term resolve.” 

And they respect Jack Bogle, founder of the Vanguard Group and the patron saint of the individual investor, who has said time and again that “investors win and speculators lose.” 

After the market closed on Oct. 19, 1987, it was easy around lower Manhattan to recognize who worked on Wall Street: they looked ashen and shocked. Yet a few investors read the situation differently. The next morning they arrived at their offices with wallets open. 

Templeton was one of them. “Let’s find stocks to buy” was his reaction to the crash, recalled Martin Flanagan, now chief executive of mutual-fund firm Invesco Ltd. and then the chief operating officer of Templeton’s firm.

“Today you could see that was an obvious thing to do,” Flanagan recounted in an obituary of Templeton in July 2008. “At the time it was not obvious at all. To have that kind of conviction and leadership is absolutely unique.” 

Most of us, in contrast, would be inclined to sell on the cheap during downturns and hold tight when prices are expensive.

“In fearful times, people think that returns will be low and risk is high. In times of exuberance, people think that returns will be high and risk is low,” said Meir Statman, a finance professor at Santa Clara University in California.

Statman added: “First, understand this is a natural emotion. Second, find ways to counter it. You have to be a contrarian with your emotions. If your emotions say put it all in gold, you should have another voice — a voice of reason — saying if gold is so good, the price must be reflecting that.” 

Easier said than done. What in someone’s wiring allows them to override the instinct to run from danger, and to give up a seat at the table when everyone else is eager to play? Statman ventures that its helpful for investors to think like traders, who tend to see the big picture. They realize that one bad day in the market isn’t going to wipe them out, so they regroup and get back on the horse.“Losses are part of what you are going to experience,” Statman said. “It’s not the end of the world.”Behavioral studies show that people with such an attitude don’t have as much loss aversion — our strong preference to avoid losses even more than make a gain. “They know that not every decision is going to be a winning decision, but they ask themselves, What is a smart decision?” Statman said. “If they continue to make smart decisions, then luck is going to average out.”

Big scores after tumultuous events can also iron out a lot of misses.

“Opportunities to make fortunes usually come in times of greatest dislocation,” said Soo Chuen Tan, a managing member of investment firm Discerene Value Advisors in Stamford, Conn. “You can train yourself to look for dislocations and read all the material on value investing and see the returns one can get if one invests at points of maximum pessimism.

“But that only takes you part of the way,” Tan added. “An important element of value investing is psychological temperament. You either ‘get’ it in your gut, or you don’t. When you read a headline about Greece blowing up, do you think, ‘Where’s my cash and can I move it to a safer bank account?’ Or do you say ‘When’s the next plane out to Athens?’”

[Source]

PADINI HOLDINGS - A decelerating growth trajectory

By AmResearch
18 October 2012


HOLD

Price RM1.89 

Fair Value RM2.00

We re-affirm our HOLD recommendation on Padini Holdings, with a lower fair value of RM2.00/share vs. RM2.57/share previously, based on a 10% discount to our DCF value, following a downward revision on earnings. Our fair value implies a PE of 12x on FY13F earnings.  

AIRASIA - Back to square one

By AmResearch
15 October 2012

HOLD

Price: RM3.06
Fair Value: RM2.80


It was reported in local dailies this morning that the deal to acquire PT Batavia Air is off. It is said that AA will continue with organic growth in Indonesia and the reason for cancelling the deal was: (1) high cost of restructuring Batavia Air; (2) Management time and resources required to turnaround Batavia.

PLANTATION SECTOR - Impact of new export tax rate system

By AmResearch
15 October 2012


Positive for Sabah upstream players. We believe that the export tax structure to be implemented on 1 January 2013 would give upstream plantation players more avenues to sell their CPO products. They would not have to depend on the local refiners to buy their products.

Plantation - Feeling the pain without the tax free quota

By Kenanga Research
15 October 2012


The Malaysia Ministry of Plantation Industries and  Commodities (MPIC) has decided to cut the CPO export tax and scrap the CPO tax free quota from 1-Jan-2013 onwards. The new CPO export tax will be between 4.5%-8.5%, to be determined on a monthly basis. In order to increase bio-diesel usage by 0.3m mt, the B10 Program has been suggested for the unsubsidised sector. We believe that the news is overall negative to the Malaysian upstream players due to the expected lower net Average Selling Prices (ASP) realised for CPO. However, this will benefit Malaysian downstream players due to better margin from the lower CPO feedstock cost. The B10 Program is commendable and should provide a lift to international CPO prices by ~RM150/mt if the program is implemented successfully and reduces the inventory level by 0.3m mt. The overall impact is positive to big cap planters with significant downstream exposure in Malaysia such as IOICORP, SIME, KLK and FGVH. However, pure upstream players who are likely to suffer lower earnings are GENP, IJMP, TSH, UMCCA and TAANN. We are maintaining our CPO price estimates of RM2,975-RM3,000 per mt for CY12-CY13. However, our existing calls and Target Prices (see  page 2) for planters are currently UNDER REVIEW with a high chance of Target Prices being cut for the pure upstream players but minimal changes for the big cap planters.

Boom time seen for oil and gas

By Star Online: Business
13 October 2012

WITH more oil finds and disruptive technologies coming onstream, the level of merger and acquisition (M&A) activity in the oil and gas sector is set to increase.

It’s going to be a boon for oil and gas service providers as the abundance of opportunities propel these companies to expand into new regions and grow bigger through acquisitions, say oil and gas experts from Ernst & Young.

Some key game changers include shale oil potentially becoming very big in China and technology making it progressively easier to get more certainty in striking oil. Renewables will likely not pose a huge threat to conventional hydrocarbons, at least for the next few decades.

“It used to be a 1-in-8 chance of striking oil. Now with technology, it has become 1 in 2, and 1 in 3 chance,” says Ernst & Young LLP Partner, Global Oil & Gas, Transaction Advisory Services Andy Brogan.

AirAsia - Crystallizing Valuations

By OSK Research

12 October 2012

The impending IPOs of AirAsia’s sister companies AirAsia X, Tune Insurance and associate Indonesia AirAsia will be positive for the group as this will crystallize RM806m into AirAsia’s valuations. Incorporating the IPOs’ pricing and the latest market cap of its Thai associate Asia Aviation, AirAsia is trading at an attractive 8.6x PE vs the sector average of 12x. The proposed Batavia acquisition has been called off, which we don’t find surprising given that it is debt-laden. We maintain our BUY call on AirAsia, while keeping our RM3.91 FV based on 12x FY13 EPS. 

Pharmaniaga is an under-researched gem

By Star Online: Business / HDBSVR
10 October 2012

PHARMANIAGA BHD

Target price: RM10.35

PHARMANIAGA Bhd's main business is the distribution of pharmaceutical products. In the first quarter ended March 31, 60% of the group's revenue was derived from its concession agreement with the Ministry of Health, which expires in 2019.

Technical Analysis - Stochastic Oscillator

By StockCharts.com


Introduction

Developed by George C. Lane in the late 1950s, the Stochastic Oscillator is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods. According to an interview with Lane, the Stochastic Oscillator "doesn't follow price, it doesn't follow volume or anything like that. It follows the speed or the momentum of price. As a rule, the momentum changes direction before price." As such, bullish and bearish divergences in the Stochastic Oscillator can be used to foreshadow reversals. This was the first, and most important, signal that Lane identified. Lane also used this oscillator to identify bull and bear set-ups to anticipate a future reversal. Because the Stochastic Oscillator is range bound, is also useful for identifying overbought and oversold levels.

Technical Analysis - MACD-Histogram

By StockCharts.com

Introduction

Developed by Thomas Aspray in 1986, the MACD-Histogram measures the distance between MACD and its signal line (the 9-day EMA of MACD). Like MACD, the MACD-Histogram is also an oscillator that fluctuates above and below the zero line. Aspray developed the MACD-Histogram to anticipate signal line crossovers in MACD. Because MACD uses moving averages and moving averages lag price, signal line crossovers can come late and affect the reward-to-risk ratio of a trade. Bullish or bearish divergences in the MACD-Histogram can alert chartists to an imminent signal line crossover in MACD. 

Inexpensive ways to increase your home’s resale value

By Star Online: Business
6 Oct 2012

WHEN it comes to selling your home, the old adage “location, location, location” is the mantra for success.

However, a strategically located property is not the only criterion for getting the best resale value for your home. First impressions can speak volumes for potential buyers when they walk into a house that's up for sale, and for many, appearances can either make or break a deal.

That's where home-staging comes in.

Technical Analysis - Relative Strength Index (RSI)

By StockCharts.com


Introduction

Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. Signals can also be generated by looking for divergences, failure swings and centerline crossovers. RSI can also be used to identify the general trend.

RSI is an extremely popular momentum indicator that has been featured in a number of articles, interviews and books over the years. In particular, Constance Brown's book, Technical Analysis for the Trading Professional, features the concept of bull market and bear market ranges for RSI. Andrew Cardwell, Brown's RSI mentor, introduced positive and negative reversals for RSI. In addition, Cardwell turned the notion of divergence, literally and figuratively, on its head.

Wilder features RSI in his 1978 book, New Concepts in Technical Trading Systems. This book also includes the Parabolic SAR, Average True Range and the Directional Movement Concept (ADX). Despite being developed before the computer age, Wilder's indicators have stood the test of time and remain extremely popular.

Technical Analysis - Moving Averages - Simple (SMA) and Exponential (EMA)

By StockCharts.com


Introduction

Moving averages smooth the price data to form a trend following indicator. They do not predict price direction, but rather define the current direction with a lag. Moving averages lag because they are based on past prices. Despite this lag, moving averages help smooth price action and filter out the noise. They also form the building blocks for many other technical indicators and overlays, such as Bollinger Bands, MACD and the McClellan Oscillator. The two most popular types of moving averages are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). These moving averages can be used to identify the direction of the trend or define potential support and resistance levels.

Here's a chart with both an SMA and an EMA on it:

 

Technical Analysis - Bollinger Bands

By StockCharts.com

Introduction

Developed by John Bollinger, Bollinger Bands® are volatility bands placed above and below a moving average. Volatility is based on the standard deviation, which changes as volatility increases and decreases. The bands automatically widen when volatility increases and narrow when volatility decreases. This dynamic nature of Bollinger Bands also means they can be used on different securities with the standard settings. For signals, Bollinger Bands can be used to identify M-Tops and W-Bottoms or to determine the strength of the trend.

Note: Bollinger Bands® is a registered trademark of John Bollinger.

Technical Analysis - Moving Average Convergence-Divergence (MACD)

By StockCharts.com

Introduction

Developed by Gerald Appel in the late seventies, the Moving Average Convergence-Divergence (MACD) indicator is one of the simplest and most effective momentum indicators available. The MACD turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average. As a result, the MACD offers the best of both worlds: trend following and momentum. The MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge. Traders can look for signal line crossovers, center-line crossovers and divergences to generate signals. Because the MACD is unbounded, it is not particularly useful for identifying overbought and oversold levels.

Note: MACD can be pronounced as either "MAC-DEE" or "M-A-C-D".

Here is an example chart with the MACD indicator in the lower panel: