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Saturday, March 31, 2012

Why Some Remisiers Need To Change Name?

Some people are very superstitious. Example many buildings the 4th floor are renamed as 3A. Because the number 4 sounds like "death" in Chinese.

Then how about remisier?
Someone told me in Cantonese, remisier sounds like "乱买 share".
It means "simply buy share" or "buy share without planning"

During Chinese New Year, when I wish my remisier 新年快乐 (Happy New Year), my remisier said in Cantonese it sounds like "New Year Fast Down". So I have been advised to wish in other words/wishes.

I'm not superstitious and I think Remisier is a nice name. The origin of the word Remisier is French, means “an intermediary”).

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Friday, March 16, 2012

How to know you have stopped loving a stock or a woman

I thought of ways to find out how to know you have stopped loving a stock or a woman. One of the ways is STOP doing what you had been doing. It means stop doing what you were doing when loving the stock or woman.

Four Scenarios:
1) The ways you love a stock
2) You stop doing what you were doing

3) The ways you love a woman
4) You stop doing what you were doing

The ways you love a stock. When you love a stock, you will do most of the followings:
- Buy it.
- Talk about it.
- Bias, although other stocks appear to be cheaper, but you still prefer this stock
- Monitor it especially the prices
- Average down
- Have confidence in it
- Hold it
- Ignore the bad news
- Read the news if you saw the stock name

How to know you have stopped loving a stock? When you stop doing most of the things

- You stop buying it.
- You stop talking about it.
- You are not bias
- You stop monitor it eg the prices
- You don't want to average down
- You lack confidence in it
- You refuse to hold it
- You accept the bad news
- You're not interested to Read the news if you saw the stock name

The ways you love a woman:-
You think of her every moment
You see her very pretty
You have so much joy when thinking of her
You willing to spend money just for her. Buy her expensive things.
If she ask you to do something, although is difficult you will find ways
You want to be with her all the times
You want to treat her good
You find ways just to see her
You will find all ways to cancel your appointment if last minutes she want to see you or need you to do something.
You will break your strong habit just for her. Eg if you have difficulty in waking up in the morning, but when she want jogging in the morning, you just force yourself to wake up.
You will travel 400km just to buy simple food that she like to eat
You stop at the roadside just to reply her sms, although it is not urgent, because you happy to receive her sms

How to know you have stopped loving a woman? When you stop doing most of the things.

You stop thinking of her every moment
You don't think she is pretty
You don't have much joy when thinking of her
You're not willing to spend money for her. Very hesitant to buy something expensive for her.
If she ask you to do something difficult, you won't do it.
You don't enjoy when you are with her
You only treat her normal, nothing special
Didn't see her, not an issue for you.
If last minutes she want to see you or need you to do something, you said you got appointment
You can't break your habit for her. Eg she wants jogging, but you couldn't wake up.
You are lazy just to travel only 400 meter to buy food that she like to eat.

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Tuesday, March 13, 2012

TSH stock Research Analysis Report Review with Buy Call

TSH share price went up today. I already written the article, thought of posting it later, but because the price went up, it is better for me to post first. I'm lazy to change the figures.
TSH quarterly result was within most analysts' forecast.

Let us look at the figures by using TSH share price of RM2.18 :

PE: TSH PE ratio 14x (Dec 2011)

G: Growth rate forecast about 15% to 25% a year.

G: Gearing is slightly high, but is already reached peak and is reducing.

Y: TSH dividend yield is fairly low, 1.8%

Based on the above, in my opinion, TSH still deserve a BUY. Due to price run-up for the past two years, short-term may have some price upward resistant, but long term I think should not be a problem.

Although gearing is slightly on a high side, but is already reached peak and is reducing as the profit grows.

Dividend is low, but with high growth, can easily compensate the low dividend.

One thing good about TSH is the chance of achieve the growth is high, because they have already planted the tress and now is waiting for maturing and harvesting.

Other reasons to buy TSH is their huge unplanted land and their Wakuba.

Other research houses recommendation on TSH:
Jupiter BUY, with TSH target price fair value of RM2.88.
Maybank BUY RM2.50
HwangDBS BUY RM2.55
Hong Leong Hold, RM2.13
Philip Capital Buy, no target price
Am Research Buy, RM2.60

I have many posts on TSH, please refer here.

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Saturday, March 10, 2012

52 Ways of Making Money in Stock Market - Part 35/52 - Discretionary Account

Discretionary Account can help you to solve the problem of "what stock to buy".

What is Discretionary Account? This is different from investing in unit trust. This is where you invest your money in an investment management company for the purpose of investing in stock market, and you allow them to have discretion to manage the account for you. The discretion include buy and sell.

For example, you pay $100,000 to an investment management account. They will assist you to invest, and they will decide what stocks to buy or sell. Hopefully this account will give you a good return. Quite popular in foreign countries but not so popular in Malaysia.

It is quite flexible,  

The investment management company will charge you a fee, depending on the market value of your investment, about 1.5% per year and sharing on some of the profit that they made for you.

What are the benefits of having Discretionary Account?

1) You don’t have to monitor your stocks or do trading; the fund manager will do for you.

2) Your money is being managed by professional / expert.

3) In my own opinion, because the fund manager is managing for many clients, the shares that they are buying / holding for you, they also buy for other clients. Meaning, it may provide some support to the share price of the stocks in your portfolio.

You have limited control over your own portfolio. Fund manager’s objective may be different from yours.

Not all fund managers are performing well.

When come to selling, the fund managers have so many clients’ shares to sell. You many not be in the front.

Have to incur management fee

Most company impose a high minimum investment amount.

I am not so familiar with Malaysia fund managers’ performances. If you can find a good fund manager and you are not good at investing, you may want to know more about this.

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Tuesday, March 6, 2012

Should Remisier Encourage Contra or Long Term Investment

Remisier is faced with dilemma whether to recommend short-term play stock or long-term fundamental investment to a particular client. This is not an argument but some points for my own case study. The points may be wrong in terms of legality or ethicality. It is a case study for myself in dollar and cent.

If remisier’s clients play contra, it will generate more brokerage income for the remisier as compared with buy and keep. But what if the client always lose money? Very soon he may be stop playing and the remisier will lose the client and will also lose the brokerage income.

Ok, let take Mr A as an example.

Mr A doesn’t play contra, but sometimes use small amount do short term trades.

Majority of his fund is for long term investment.

Those short-term trades he normally lose money.

Those long-term investments he normally make money.

Although his long term trades are not that frequent, but his remisier are earning more and more brokerage income from him. As his investment profit grew, his portfolio also grew. His confident grew, he also continues to inject more money for investment and his average value per order has also increased.

Therefore, it is not a bad idea to encourage client to trade long term. However, in the above case, if his remisier want to make more brokerage income from him, he should encourage him to contra or to do more short-term trade/play. Why? This is because the remisier knows that the amount he uses to contra or play is small in comparison to what he can afford. If he keeps losing money, the impact is not that great and he still will continue to invest in long term. Furthermore, there is no guarantee that he always lose money, he may make more than lose.

Therefore, there is no fixed rule of whether to encourage contra or long-term investment. Remisiers need to know the client’s background. Let us look at the factors below:

If the clients have a lot of money, the amount that they invest is not big as compared with what they can afford, and/or have steady income, don’t worry about them losing the money because they will still have money to play.

Easily Give Up?
If the client will easily give up if losing money, then encourage long-term. Because short-term or contra chances are half-half. If he loses money in short-term play, he may stop investing.

Track Records
If the client has good track records of making money in short-term, then no need to encourage them to invest long-term. Short-term can generate more brokerage income for the remisier. But if the client always lose money, then may need to consider encourage the client to do long-term fundamental investment before the client stop investing.

What is The Best For The Client
Some remisiers are very good. They don’t bother about their brokerage income, but they are thinking about what is the best for the client. For example if the client wants to buy a speculative stock that the price has gone up very high, some remisiers discourage the client from buying. They discourage the client for the benefits of the client, although they will lose out the brokerage income.

But I have a question. How remisiers will know that it is not good to buy at that price and at time? Who can guarantee the price will come down? What if the price keeps going up?

From what we can see, there is no fixed rule of whether to encourage contra or long-term investment. Many factors need to be considered, and most of the factors are about Know-Your-Customers (KYC). What is the best for client or brokerage income also may need to be considered.

Please note that the above is for my own case study purely based on dollar and cent comparison and may not be legally right. This is because the stock market and remisiers are governed by a strict law that specifies the conducts of remisiers. I just want to find out how to improve brokerage income for my own understanding. This is purely a case study on numbers or money. Please refer to relevant rules or law for further info.


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Monday, March 5, 2012

Bonia Stock Research Analysis Review

After the quarterly result, let us look at the figures by using Bonia share price of RM2.20.

PE: Bonia PE ratio forecast is about 8x for Jun 2012.

G: Growth will be moderate.

G: Gearing is very low and soon will be net cash.

Y: Bonia dividend yield is average.

According to the company, Bonia’s growth will be moderate. PE ratio is not high and with moderate growth, Bonia stock in my opinion, still deserve a Hold.

Although the industry is not really growing, what Bonia did was growth through acquisition. That means they buy over other companies, especially together with the “trade mark” or “brand”.  The new business or company will add profit to Bonia, and at the same time Bonia can utilize the trade mark or brand and market it.

After the buying of Jeco, immediately the profit increase significantly. Now they are buying Braun Verwaltungs-Gmbh and Braun Gmbh & Co KG, mainly for trade mark.

OSK has a BUY recommendation on Bonia with a Bonia target price fair value of RM3.38. That is 50% upside from the current Bonia share price.

More on Bonia stock news, here.

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Sunday, March 4, 2012

KPJ Stock Research Analysis Review

KPJ latest quarterly financial result was within most analysts’ forecast.Let us look at the figures by using KPJ share price of RM4.81.

PE: KPJ PE ratio is 21.4x
G: KPJ is projected to grow about 15% a year for 2012 to 2013.
G: Gearing is manageable, less than 0.3x.
Y: KPJ dividend yield us 2.6%.

Based on the above figures, PE ratio is quite high, but the growth rate is just about 15%. KPJ dividend yield is also not high.
OSK analyst said they maintain a BUY call with KPJ target price fair value at RM5.84. This is based on market cap weighted average regional sector PE ratio. They like KPJ because it is a growth stock and also in a defensive sector. They said it is an excellent long term investment and see price weakness as a great opportunity to accumulate KPJ shares.

Maybank research says Hold, with KPJ target price fair value of RM5.10, and MIDF says HOLD RM4.60. RHB has an Outperform rating for KPJ with target price fair value of RM5.09.

Few years back when KPJ PE ratio was low, I spotted it by using PEGGY Method and I wanted to buy but didn’t. Because I was using Dollar Cost Averaging. At that time I bought another stock already and have utilized my monthly investment planning fund. Then it went up and I ignored it and in short period of time, KPJ share price increase more than 100%. This is one of the disadvantages of Dollar Cost Averaging. But I have no regret in using Dollar Cost Averaging because the benefits are more than the disadvantages. Sometimes is not about dollar and cent, it is about planning and controlling emotion, which cannot be quantified.

The Disadvantages of Dollar Cost Averaging, here.

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The information contained in this blog is my personal diary and has been prepared solely for myself. Without any previous reading material or discussion, by just reading my blog contents, reader may misunderstand the contents.
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