Understanding the Habits of the Rich

Fancy getting rich? Here are the rich man’s habits.

Seminars, webinars, Social events/ gatherings, book launches... These right here are some of the main events circled on the rich people’s calendars!

Ever wonder why?

At one of the many book launches I have been to I had a chance to chat up the local best-selling author Azizi Ali, brilliant mind I must say. He told me that the number of books published in a country mutually relates to the wealth of the citizens.His explanation therefore was the more publications per annum, the more the development countrywide hence increase in the wealth of the individuals.

Not so long ago while I was at a luncheon with this brilliant friend of mine, he mentioned that “rich people seldom eat alone”. I was quite ecstatic because this is a habit that I unknowingly practiced for quite a while now. What he said is totally true come to think about it. Its quite funny that there is an entire book dedicated to this subject “Never Eat Alone”. If you read this book, you will learn a thing or two and where you have been going wrong all his while.

According to the above scenarios, did you notice the common customs of the rich people?

Ask yourself why the rich become richer, the poor become poorer and the “Average” stay stagnant?

THE RICH ENJOY READING. TREMENDOUSLY!

In this dynamic era, the rich still find time to read despite the diverse media. They have plenty to choose from that is to say magazines, books, newspapers, and  of course the internet which is the most dominant of them all.

In this world we live in, you have got to spend money to make money. I know it may sound cliche but take a look at the those thousand dollar seminars and courses, they are always full to the bream! They never go unattended, why? Simply because the rich love to learn. If you fancy an opportunity to meet all these filthy rich people all congregated in one room, I suggest you attend one seminar or course in the area near you. Trust me.

Now I understand not everyone has a couple of thousands of dollars at their disposal that is why I advise you to get familiar with the term webinars. This term is a derived from two words that is to say web and seminar. Thanks to technology we now have webinars which you too can enjoy from the comfort of your couch. They are always scheduled to happen at some stipulated time over the internet. Usually there is a number of slots available depending on the organiser of the webinar. Guest speakers and renowned financial consultants are the people that run these webinars. 

Are you rich yet?

NO! Me neither. So until we all regard ourselves rich, let us acquaint ourselves with the these terms below:

●     Seminars

●     Book launches

●     Webinars

●     Courses

●     Social events/ gatherings

This way, we will keep track of the rich and hey we could be involved in their circles.

Thank me later!

This is a guest post by KCLau. KCLau is the best selling author of Top Money Tips for Malaysians. His popular personal finance blog is one of the most visited websites in the financial blogosphere with thousands of email subscribers. He also hosts regular and free online financial training featuring different financial experts. You can follow his latest updates by visiting www.KCLau.com. 

Trader's Diary 29/7/13

By Smoking Gun

Bought 100,000 shares of Hi-P on 28/7/13 at 0.805. No other positions added or exited during this period. All in all relatively good day for the portfolio. Net cash invested still remains at 49% of portfolio.

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The author and/or interested parties may have positions in the stocks mentioned. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Rationale for  investing in Hi-P as explained by the narrative below;

How to Become a Financial Planner?

After the two series of article on Financial Planning and Financial Planner. Some of you may asked: "Is it difficult to become a Financial Planner? What's the requirement needed?"

Hmmm... Good news is it is not difficult, but the bad news is it's not easy either and the requirements for sure will be raised in the future.

So, how?

In Malaysia, those who practice as Financial Planner must pass any one of below examinations:

1. Registered Financial Planners (RFP) issued by Malaysia Financial Planning Council (MFPC)
2. Certified Financial Planners (CFP) issued by Financial Planning Association of Malaysia (FPAM)

After you have passed the said examination, it doesn't mean that you're a Licensed Financial Planner straight away. Why? It's just serves you an entry passport only. Once you have accredited the qualification, you must apply the required licenses with Bank Negara Malaysia (BNM) and Securities Commission (SC) before you can carry out financial planning activities.

By then, you can claimed the following title:

• Financial Adviser Representative (FAR) by BNM
• Licensed Financial Planner by SC

Please take note that passing the said examinations doesn't carry you the titles, getting the licenses does. If not, you're deem to have convicted an offence which can land you in jail or subject to hefty fine.

Other requirements include:

• Must be a Malaysian citizen
• At least 21 years old
• Have minimum 3 years related experience
• Must be a FULL time practitioner
• Then, you must fulfill the minimum hours for personal development programs every year

Next, we will talk about "The Challenges Faced by Financial Planning Industry in Malaysia"

This article was contributed by Alex Yeoh, a licensed financial planner with a reputable financial planning firm. Finance Malaysia blog will work together with Alex in bringing more interesting articles on personal financial planning. You may reach him via email alexyeoh@vka.com.my

Trader's Diary 25/7/13

By Smoking Gun

Been swamped with work and a stream of friends and relatives visiting all at the same time during the last few days, so not been updating my blog on a daily basis. A few trades were done in the mock portfolio. Here is how the portfolio stood at day end.

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The author and/or interested parties may have positions in the stocks mentioned. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

During this period, I added 200,000 shares of Centurion to the portfolio, while I took profit on 200,000 shares of OKH Global at 0.515 for a 14.4% gain. Overall portfolio is up 1.2% since inception, while cash uninvested still stands at nearly 60%. The portfolio shall be more reflective of the efficacy of my trading methods once the invested portion of the portfolio is closer to 80%.

Here's my rationale for the Centurion trade which took place on the 17 Jul 13.

 Looking at Centurion's M index, from a reading of 2.52 to 42.69, it jumped up to 270.72 yesterday (16 Jul 13) and carried over to 334.85 today (17 Jul 13). This was accompanied with rising prices and MFI and successfully broke its 52 Week High (BrH%). Breaking the 52 week high is normally a precursor to a continuation of the uptrend.

My rationale for selling out on OKH

My sell signal is based on the readings of the MFI. An drop in excess of 3 points will prompt me to liquidate my positions. On the circled readings on the MFI, yesterday's reading of 69.44 which was a drop of 3.5 points from the preceding day, prompted the sell yesterday. This was confirmed by weaker prices today. A drop in the MFI in excess of 3 points will indicate a significant money outflow, and as part of the trading discipline, we shall exit if this happens even at a loss (in this event, we made some money)

New Fund: Kenanga Asia Pacific Total Return

After merging with ING Funds Berhad, Kenanga Investors Berhad launched its first new fund of the enlarged family. In this uncertain global economic environment, how much return can a fund generated was the main concern for many investors. Want to get higher return? Then, we cannot runaway from higher volatility! Are there any balance in between?

Yes. To cater for such investors, this new fund aims to provide a compounded rate of return of at least 10% per annum over market cycle (5 years) by investing in a diversified portfolio of Asia Pacific equities.

3 Reasons WHY it benefits you:

Well... Unlike others, this fund DO NOT has any benchmark constraint. This allows flexibility in identifying and implementing the most optimum investment strategy. Picture below shows the differences between Absolute and Relative return:

Still not yet convinced? How about the proven track record?

Click here to download prospectus

Source: Kenanga Investors Bhd

The Debasement of Major Currencies Crash & Asset Class Returns As At 30 June 2013

By Guest Blogger, Salvador Dali, Malaysia-Finance

June was a torrential month. We had people running for the escape shutes just on the likelihood of QE being tapered down in the near future. In reality, its just the usual holiday season for most finance industry people ... as usual when there are not much going on, it takes little to move things down. Then the whole world searched high and low for reasons to explain that phenomenon. Many times, its just profit taking. Because seriously, look how easy it was for markets to return to some normalcy? You tell me that what started the rout in inescapable fear and loathing, suddenly reversed course.

Emerging markets stocks and bonds took the brunt of the hit. Remember this trend, when the markets crash due to the finality of the debasement of major currencies, this is what will happen, magnified 5-10 times at least. Just look down the asset classes, every single one except cash is down. Remember this ....



The funny thing was that gold even went down. Of course in a real major correction based on the debasement of major currencies, the developed marlets bonds will TANK in a big way, followed by their stock markets as people pull funds away. They will also pull funds away from emerging markets stocks and bonds. Emerging markets bonds will be the most vulnerable - because they attracted the most inflow over the past 5 years as funds seek out better yields with "better currencies". The debasement of major currencies (USD, Euro and yen) is nothing new, there are a lot of believers, just that we do not know exactly when it will happen.

But why, what is the justification that the debasement crisis will end in tears? There is debasement just by looking at the amount of money printed by most central banks over the last 5 years alone. Technically, in the US alone, they might need only 1/10th of the amount of money running in the system. OK, that might seem scary already. Even if you try to take back half of that, you know there will be dislocation, no matter how well planned. Pumping in is fun, just like alcohol consumption in a party. The way out never is.

Two, the QE funds are largely not flowing through the real economy. Big and small banks, but mainly big banks, are benefiting enormously by taking these funds at zero and getting their 0.2%-0.4% margins leaving that in the interbank. Is it any wonder that even behemoths like Bank of America and Citigroup are making billions again - its not from lending, its not from trading, its not really from investment banking.

Already the real economy is not getting the credit they need to jump start. They can see the low rates but they cannot borrow realistically. Those who do borrow are using it for unproductive ways again, e.g. flipping houses, or carry trades. These inflate certain asset classes (stocks and REITs mainly) but doe not provide the multiplier effect down the entire economy.

When central banks sells bonds again (to soak up liquidity), the big guys holding the cash will demand for much higher interest rates = you go from zero to 3% and then 6% quite fast. Sharply higher rates will pummel all stocks and the chain reaction goes around. Only this time, the severity is pronounced because its not a one off event, investors can see the amount of liquidity to be called back. Even if central banks stopped the soaking up process midway, the confidence is gone. Confidence is one of the greatest asset in valuing assets. 

If QE did what it was supposed to do ... lend to businesses and people who need them, you would have seen a great multiplier effect of more money moving around, improved business velocity ... which would then enable the economy to better weather the turning off of QE or soaking up of liquidity later on. 

The strange thing is that you cannot just sell one currency and thats the end of it, it has to be converted into another currency. But as you can see from the last two paras, everything will collapse in a debasement correction as currencies of all sorts will collapse.

HKD will be under some strange pressure when USD falls by 20% in a week. It might finally prompt a reweighting of the HKD to a basket of currencies. The emerging markets will be very busy defending their currency, not because they are not stronger than the developed currencies but because their bonds have attracted so much foreign money that the moment they all decide to exit the bonds, it literally means that yields may double from 4%-6% to 10%-18% overnight as the ringgit, rupiah, baht will be sold down tremendously as funds repatriate. This will cause an even bigger collapse in emerging markets stocks even though they may be fundamentally superior to developed markets' stocks.

The strange part which i mentioned was that last month sell down did not see gold prices rise as that should be seen as the best alternative if you do not want to hold currencies. 

This piece of advice will be worth millions to the right person. In a debasement of major currencies correction, almost nothing is worth buying. Except hard assets, but not just any hard assets, if USD is tanking then holding a USD property does not help. Pick the right country that can ride out the storm and come out stronger and your net wealth intact.

Buy UK properties, buy Singapore properties, buy large tracts of farmland or idle land in Malaysia, Australia, NZ, buy gold certificates. Looks like many Malaysians already have a great read on the upcoming disaster, many have been ploughing headstrong into UK and SG properties. However, me thing the total exposure to all the hard assets above should be between 30%-60% of your total assets. Get closer to 60% when the storm is near. Currently it is not.

So, when will this happen? I think come next May-September, plenty of time still. There is still the possibility that this event can be further delayed: if QE stops and the markets rumbled but steadies ... however, the central banks DO NOT sell bonds i.e. no soaking up of liquidity .... then its like postponing the inevitable. It will come, if you do not soak up the liquidity the markets will correct the realignment for you. They will just lose confidence in developed markets bonds, then developed markets stocks, then assets of most things, just like you saw from the figures in the month of June 2013 only multiplied.

Once that train starts, you can see a few months of high anxiety. Bernanke should be so glad to get out of his position so that he does not need to go through that.

A Guide To Home Loan Refinancing

For those who have never been exposed to the concept of “refinancing”, home loan refinancing may seem like a baffling notion.  After all, what good could possibly come from getting a new home loan… just to pay off your old one? Wouldn't you just go back to square one after the whole process? These could be some of the questions you’re asking yourselves, and understandably so.

In reality, home loan refinancing is a widely-adopted practice with many potential benefits. Home buyers far and wide undertake it in order to lower the interest they’re paying on their home loans, reduce their monthly loan repayment amounts, and generally alter their loan terms to better suit their financial needs.  In fact, some even refinance to free up cash riding on the inherent values of their properties!

Want to refinance your home loan in Malaysia?
Click here to compare different rates by different banks.Courtesy of: iMoney.my

[Property] 3 Critical Factors to Watch Out by Year End (July 2013)

Ever since the property boom started in 2009, right after the global financial crisis, investors were laughing to the bank. But, can these sustain until next year? Many analysts doubt so. Why?

The most crucial determining factors might uncover itself in the next few months, approaching year end. In short, we have summed out to the below 3 critical factors:

1. Banning of DIBS
   This is not a secret anymore. Speculation rife up recently, saying that BNM may ban the Developer Interest Bearing Scheme (DIBS) by year end. BNM is studying the implications of DIBS which benefiting speculators more than serious buyers. Note: Singapore already banned such scheme few years back.
   
   
2. Interest Rate hike
   BNM also may revised the Overnight Policy Rate (OPR), which determine the cost of financing in the country including Base Lending Rate (BLR) for mortgage loan. A 25 basis points hike was expected. This will affect all type of loans, except fixed interest loans. Let's get prepare for higher monthly loan installment amount.
   
   
3. Higher RPGT
   Coming this 2014 budget to be tabled on 25th Oct, watch out for higher Real Property Gain Tax (RPGT). Currently, it was 15% for first two years and 10% for disposal from 3rd year to 5th year. Note: RPGT was much higher before 2008.

In our view, once DIBS was banned, developer no need to bear the interest, financier no need to bear the risk, new launching properties should be selling at lower price. Then, this is bad news for existing property, especially bought under DIBS before?

Example, phase one selling at RM500k under DIBS, phase two selling at RM500k without DIBS. No effect?

Think again... More supply now releasing for secondary market, assuming phase two also selling at same price, which is very good already. Right?

Trader's Diary - 17/7/13

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Added another stock to the portfolio, Falcon Energy. Mock portfolio is now 43% invested. Kreuz had a small bump up today while the rest were meandering.

Liked Falcon Energy on the M Index. Activity not on the high side first. B rated stock. One to hold on for a couple of weeks.

Trader's diary - 16/7/13

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.


Slow day. Didn't add any new positions today. Didn't like how OKH Global was trending. MFI starting to slide. Rule of thumb, if the MFI slides 3points below the high watermark, then look for exits. May have to exit at a loss. Hopefully it will not be to great a setback. Elsewhere equity and bond markets look stable for the moment. There would be some noise from Bernanke's congressional testimony on Wednesday night but methinks the impact would be muted as the markets had already taken cue from some his soundbites earlier last week. The conditions are right for a good trading market for the rest of this month. Looking to add more trades in tomorrow.

Smear Campaign against Palm Oil Industry

This article is originally published on Salvador Dali's blog Malaysia Finance Blogspot. The author, Mr Koon Yew Yin, is a well known Malaysian investor and many regard him as the Warren Buffett of Malaysia. Best known for being the one of the founders of IJM and Gamuda, Mr Koon is also a philantrophist and writes regularly on issues that is dear to him.

Fight the Smear Campaign against the Oil Palm Industry

Koon Yew Yin

A few weeks ago the sky was covered with smoke from the burning of forests in Sumatra to clear land for agriculture. Many in Malaysia and Singapore were affected by the haze.  Some observers in the west used it as an occasion to bad-mouth the oil palm oil further. In this article, I will try to share some facts of life in the oil palm industry so that Malaysians will not join the western world in their smear campaign.

Firstly, we must remember that the west had cut down their forests and trees centuries ago to develop their countries.  Malaysia and Indonesia are both new comers in the development scene and have been felling our forests for only a few decades now.  Of our tropical agricultural crops, oil palm is the most recent cash crop commodity.

Although there has been a rapid rate of exploitation, it still occupies a small proportion of our total land area.  The oil palm industry in Malaysia accounts for 15.5 per cent of total land area and only 4.5 per cent of total land area of Indonesia.  A large proportion of the oil palm plantations are also not newly felled forest but are old rubber plantations that have been converted to this more lucrative crop.

Many in the public know of my views which are critical of many developments in the country.  However, praise needs to be given when it is deserved; and our home grown oil palm industry is one which deserves all our support. This support is important in view of the sustained criticism made against the oil palm industry by lobby groups that have their origin in the west.

Why We Should Support Our Oil Palm Industry

There are many good reasons to support our oil palm industry in Malaysia and Indonesia. These are some of the most important.

1.    Firstly it is not only Felda settlers that are dependent on the crop for a livelihood. Malaysia’s annual US$25 billion (RM79.75 billion) palm oil exports support some two million jobs and livelihoods along the sprawling value chain. This means that one in every five working Malaysian is dependent for his or her livelihood on the crop.  

2.    Plantations have borne the brunt of the bad publicity. However, the small farmers are also affected. More than 40 per cent of oil palm planters in Indonesia are smallholders whilst in Malaysia they contribute to 38 per cent of the country’s palm oil output.

3.    Environmental activist groups such as World Wildlife Fund, Friends of the Earth and Greenpeace have launched many campaigns alleging that the expansion of oil palm plantations have destroyed forests, threatened endangered wildlife and robbed indigenous peoples of their land. Many of their arguments are not based on fact but are sensationalized from a small and atypical number of cases.

4.    The anti-oil palm lobby in the west includes pro-soya bean and rape-seed groups who see oil palm as a major competitor and have recruited food lobbyists to play on fears of the health hazards of palm oil consumption. . Together with environmental activists, these well-funded groups have created trade barriers to the global oil palm trade under the pretext of environmental activism.

5.    In a fair contest amongst competing vegetable oils, palm oil will win hands down. The oil palm tree is the world’s most efficient oil crop because one can harvest five tonnes of oil per hectare. This is 10 times more productive than soya bean planted in the West, including United States and five times more productive than rapeseed, Europe’s main oil crop.

6.    It is an undeniable fact that palm oil is the cheapest and most popular form of cooking oil for consumers, including many poor families in the west. Should trade barriers to benefit rapeseed farmers who are already heavily subsidised by the European Union (EU) government be successfully implemented, this will hurt consumers all over the world.

7.    Also should alternatives to oil palm be grown, more land would be needed to produce an equivalent volume of oil to replace palm oil, resulting in more deforestation and problems for Mother Earth.

8.    Oil palm smallholdings and plantations meet the United Nation’s Framework Convention on Climate Change which defines a forest as an area of 0.5 to one hectare having more than 30 per cent canopy cover and having a potential height of two to five metres. To accuse the industry in Malaysia and Indonesia of contributing to global warming is sheer nonsense. In fact oil palm trees just as with other forest species, produce oxygen for us to breathe and act to counter coal and oil emissions which are the major cause of global warming.

9.    Finally, the western environmental activists’ campaign against oil palm plantation expansion, in the name of “saving rainforests”, is a violation of international norms and Malaysia’s and Indonesia’s sovereignty.

Appeal to Malaysians

In a keynote address to over a thousand delegates at a conference organised by the Incorporated Society of Planters (ISP) in Sibu, Sarawak, recently, Datuk Amar Abdul Hamed Sepawi, Chairman of Sarawak Plantation Berhad warned,   “We’re at a crossroads. It’s time for oil palm planters to adapt to the fast-changing world of ruthless vegetable oil politics if we want to stay relevant in this market”.

Conclusion:

I trust all Malaysians will circulate this article to all their contacts to fight against the smear campaign against our palm oil industry and eventually I hope consumers, all over the world, will not buy soyabean or rapeseed oil which is more expensive and not really superior to palm oil.

Trader's diary - 15/7/13

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Added a new position today, 200,000 shares of OKH Global at 0.45 at 4.28pm. Shares closed a shade off my price at 0.44. Rest of the positions are status quo.

Made my decision to add OKH very late during the day mainly from the sudden surge in volume. That resulted in a heightened M of 329 very very quickly. Looking at the past few days of trade, M was lingering around the 40-60 mark and today's activity was 6X that of the said period which was highly significant. Liked the strong price movement that accompanied the surge in volume, coupled with a successful break of its 52 week high (BrH% = 105.88). MFI also steady with big jump today-always a good sign. Should be good, this one.

Trader's diary 12/7/13

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Added a new position today, 100,000 shares of Kreuz. No change on previous positions.

Normally, I would not buy a stock where the M Index is just 143.43.. but if you look at the previous days, the trading volume was virtually non-existent, so even at 143.43 looks like a significant pick up in activity for this counter. I also like the fact that the BrH is trending up and should test the 52 week high soon. MFI looks healthy to support a run-up.

Total cash invested is now close to 30%.

Trader's diary 11/7/13

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

World equities rallied on 11/7/13 in the aftermath of Bernanke's comments. Dow and the S&P 500 registered new highs at the close of trading. At home, the Straits Times Index surged 1.9% earlier. Despite that, it was not really a good trading market today on the SGX as the surged was mainly concentrated on index linked stocks while most of the trading stocks remained subdued. We only introduced 200,000 shares of Kori to our trading portfolio yesterday at 4.50pm 11/7/13 at 0.41 within our rules of maximum of 10% per single stock exposure. As we are building up the portfolio, invested portion of the portfolio is only 18% whilst the uninvested cash is at 82%.

We based our decision to purchase Kori on the following criteria.

1. M over the past few days of 11.57, 156.63, 14.86 and followed today with a huge surge to 2,509.

2. Surge in M accompanied by strong price action up 7.9%

3. Decent volume in value terms of $6.4m

4. Big jump in MFI from 22.57 to 37.9

Our earlier buy Hiap Hoe had a good surge in the morning, touching a high of 0.78 before tapering off to close at 0.755. MFI showing an increasing trend which shows sustained interest while the M is still at elevated levels of 390.45 earlier today despite tapering off from the previous days 463.09. 

Markets today will get a boost from the strong showing of the US and European markets. Conditions elsewhere look supportive. Will be a good trading day today.

New Fund: AmAsia Pacific REITs Plus

Do you remember the AmAsia Pacific REITs fund? I'm sure you have heard about it. Yes, backed by its success story, AmInvestment Management Bhd has launched a new version called AmAsia Pacific REITs Plus. The word "Plus" is used as a continuation of the AmAsia Pacific REITs and the fund may invest in listed equities in the real estate sector.

The fund aims to provide regular income and to a lesser extent capital appreciation over the medium to long term (at least 3 years) by investing in real estate investment trusts (REITs) and equities in the real estate sector.

What's the strategy?

Minimum 70% in REITs and a maximum of 29% in listed equities in real estate sector, which are in the Asia Pacific region. This is the asset allocation of the fund. Diversification in terms of country and different REITs sub-sectors (etc. residential, commercial and industrial) is expected.

An active allocation strategy will be employed by fund manager, based on macroeconomic trends and REITs market outlook of respective countries in Asia Pacific region. Meanwhile, bottom-up security selection strategy will be used for equities, with focus on undervalued companies.

Who is suitable for this fund?

• Those who wish to have investment exposure in real estate sector through a diversified portfolio of REITs and real estate equities in Asia Pacific region.
• Those seeking regular income and to a lesser extent capital appreciation over medium to long term

What's AmInvest aiming?

4% payout on yearly basis, which AmInvest said is achievable and is higher than fixed deposit rate offered by banks. AmInvest favors Australia, Singapore and Japan for REITs and China, Indonesia and Thailand for listed equities.

Click here to download the fund prospectus

Model Portfolio - Start Date 10/7/2013

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

My Trading Journal
I started this blog to record my thoughts and ideas on trading stocks. There are many blogs and forums on Singapore equities and some of them are really informative and insightful. I don't intend to go that route with my blog due to my time commitments, although once a while, I intend write at length on certain subjects. However, readers can have an objective assessment of my methods of stock picking and trading philosophy by assessing the performance this mock trading journal. The starting position is $1m and the inception date is 9/7/13

I have only two simple trading rules for this portfolio which are as follows;
1. Maximum Exposure into any given stock at any time - 10% of portfolio
2. Minimum Stock Positions as % of Portfolio - No minimum

At 4.40 pm, 10/7/13, I bought 130,000 shares of Hiap Hoe at 0.74 for a total gross trade value of 96,200 which is within my 10% single stock exposure limit rule. Hiap Hoe fulfilled all the criteria on the P8118.com system and so enforced our conviction to buy.

First thing we look for is the reading on the M Index as compared to the previous five days (bottom right hand side table). Hiap Hoe's latest M reading is at 463.10 compared to 64.61, 27.66 and 16.07 for the previous 3 days which represents a significant leap in trading activity for the stock. (100 being normal trading volume for any given stock). The next thing we look at is whether the jump in M is accompanied by a positive price action, as this implies that there is a surge of buying interest in the stock due to the bidding up of prices and volume buildup. Conversely, we ignore those high-M stocks with negative price action. In this regard, Hiap Hoe is up by 3c, so it confirms the first criteria.

To support our trading decision, we look at the other indicators to provide further validation. The MFI and BrH has to be trending up over the last five days. So for Hiap Hoe, again no problem there as well as the other indicators look very healthy with nice steady rise. We will look at the MFI for signals to sell, normally if it drops 3 points from the high watermark point, we will exit the positions. In this regard, the high watermark is 54.58 as of today. This means if the MFI drops to less than 51.58 we will exit the position even at a loss. If the MFI climbs to say 56 tomorrow, then the exit signal will be triggered when MFI is at less than 53 and so on.

I will try to update the values of the Mock Portfolio on a daily basis although I may not be able to give full commentaries due to other commitments. However, feedback is welcome and appreciated.

Singapore Market Overvalued?
I was attending an investment seminar organized by a private bank a week ago, and the key takeaways from their experts were;
1. The expected tapering of US QE has moved significantly forward to 2014 as compared to 2015
2. Bond yields and interest rates are expected to trend upwards
3. All asset classes to experience headwinds, equities will still outperform in Japan and Europe and places where monetary policy remains easy.
4. Gold prices set for rebound.
5. Singapore equity market is very richly valued as compared to peers and risk sudden outflows in capital due to several factors i.e. rise in US interest rates, China economic woes worsening etc. At 16X prospective earnings, Singapore looks fully valued

Name	P/E	P/B	Est P/E	Est P/B
HANG SENG INDEX	9.47	1.31	18.46	2.67
KARACHI 100 INDEX	9.44	1.76	17.74	1.52
Straits Times Index STI	12.95	1.41	16.54	2.22
CSI 300 INDEX	11.05	1.53	16	1.77
S&P/ASX 200 INDEX	19.55	1.89	14.79	2.84
NZX 50 Gross Index	20.15	1.87	14.47	1.59
HO CHI MINH STOCK INDEX	13.62	1.76	14.17	1.34
SRI LANKA COLOMBO ALL SH	12.21	1.69	13.56	1.75
KOSPI INDEX	26.86	1.07	13.55	2.1
TAIWAN TAIEX INDEX	22.14	1.7	13.35	2.18
FTSE Bursa Malaysia KLCI	16.92	2.34	11.92	2.04
STOCK EXCH OF THAI INDEX	16.6	2.3	11.33	2.01
NIKKEI 225	26.05	1.55	9.97	1.07
NSE CNX NIFTY INDEX	16.21	2.52	9.72	1.22
JAKARTA COMPOSITE INDEX	17.93	2.81	9.52	1.4
PSEi - PHILIPPINE SE IDX	18.82	2.81	8	1.66
Name	P/E	P/B	Est P/E	Est P/B
CAC 40 INDEX	15.62	1.23	14.66	2.26
DAX INDEX	15	1.43	13.56	1.75
FTSE 100 INDEX	16.14	1.8	11.79	1.17
STXE 600 € Pr	18.51	1.62	11.75	1.66
S&P 500 INDEX	15.75	2.38	9.73	1.22
Source: Bloomberg

Given this challenging environment, stock picking becomes even more critical for investing/trading success.

"X"pensive AirAsia X IPO ?

Slate for its debut trading tomorrow (10th July 2013), can AirAsia X follows the footsteps of its sister company AirAsia? What would happen tomorrow pretty much depends on the fair value given by various research houses.

AirAsia X is a leading long haul low cost carrier since operating on Nov 2007, primarily in the Asia Pacific region. Currently, it serves 14 destinations acorss Asia, Australia and the Middle East, with 11 A330-300 planes.

Investment analysis:

1. Benefits from synergies as part of AirAsia group
2. Strong brand name
3. Operate in the fast growing aviation market in the world
4. Lowest unit cost base in the region
5. Strong ancillary income at RM141/pax and expected to grow further

How about the risks?

1. High jet fuel price
2. World crisis i.e. war, terrorism, epidemic outbreak
3. Slowdown in world economy
4. Emergence of other long-haul LCCs
5. Delaying of KLIA2 which may hamper its growth prospects
6. Strengthening of USD against MYR, because 79% of its debt is denominated in USD

So, what's the fair value?

Either Rm1.40 or Rm1.20 given. Seems like this is not an exciting IPO for investors. Anyway, tomorrow debut most likely will remain in positive territory because there is a "king card" in hand. Yes. Maybank Investment Bank will be the stabilizing manager who can purchase up to 15% of the total number of shares offered under the IPO. No worry.