Thursday, January 29, 2015

10 Malaysian firms that made Forbes best under a billion

Forbes highlighted Asia-Pacific companies which are consistent performers and make under US$1 billion in sales last year. A simple analysis of these firms, according to sector:
  • Property development : KSL, Matrix Concept, Land & General, Tambun Indah Land, Sentoria
  • Construction/Infrastructure/Utilities : George Kent.
  • Oil & Gas : Dayang Enterprise
  • Telco: Time dotCom.
  • Insurance: Tune Ins.
  • Technology: Inari Amerton, Willowglen.
  • Engineering : Boilermech.
  • Education / Govt Training/ Software : Prestariang.
As we can see, Malaysian property developers  targeting middle-class home ownership (below RM 1 million) book the most sales in 2014. KSL is a big property player in Johor, while Matrix Concept is another property developer based in Negeri Sembilan. In terms of market capitalization, Dayang Enterprise is the most valuable in the list worth over USD 1.5 billion, with RM 4.2bil order book enough to last them until 2018.

Monday, January 19, 2015

Investment Observations, not Rules....

Investment wisdom that Marc Faber shares on his Gloom,Boom and Doom website.

What every investor should know....

1. There is no investment rule that always works.

If there was one single rule, which always worked, everybody would in time follow it and, therefore, everybody would be rich. But the only constant in history is the shape of the wealth pyramid, with few rich people at the top and many poor at the bottom. Thus, even the best rules do change from time to time.

2. Stocks always go up in the long term. Nope, that's a myth.

Far more companies have failed than succeeded. Far more countries' stock markets went to zero than markets, which have survived. Just think of Russia in 1918, all the Eastern European stock markets after 1945, Shanghai after 1949, and Egypt in 1954.

3. Real Estate always goes up in the long term. That's a myth too.

While it is true that real estate has a tendency to appreciate in the long run, partly because of population growth, there is a problem with ownership and property rights. Real estate in London was a good investment over the last 1000 years, but not for America's Red Indians, Mexico's Aztecs, Peru's Incas and people living in countries, which became communists in the 20th century. All these people lost their real estate and usually also their lives.

4. Buy Low and Sell High. Not lowEST and highEST.

The problem with this rule is that we never know exactly what is low and what is high. Frequently what is low will go even lower and what is high will continue to rise.

5. Buy a basket of high quality stocks and hold!
Another highly dangerous rule! Today's leaders may not be tomorrow's leaders. Don't forget that Xerox, Polaroid, Memorex, Digital Equipment, Burroughs, Control Data were the leaders in 1973. Where are they today? Either out of business or their stocks far lower, than in 1973!

Comment: This observation leaves out the time period of holding. Investors typically holds their stocks from mid(a few months-3 years) to long term(up to 5 years). Traders hold anything from between 1 minute to a few weeks at best. I am sure what Marc Faber was observing is that to buy and sell frequently is more profitable than holding and never selling. However, this runs contrary to the value investing principle that Benjamin Graham preached. Graham essentially says that we should purchase value stocks sold below its intrinsic value, and only sell if the fundamentals of that stock changes, or it is overpriced. Holding power is important in value investing. If one were to just buy and not have the ability to hold akin to contra players, I believe one would lose a lot of money trading in the long run) 

Let's look at what happened to companies which were mentioned above. Why did they die and their stocks tanked  :
  • Xerox - Great product(computer), poor marketing leading to its fall. They didn't believe that computers will one day rule the world, and therefore allowed Apple,Microsoft and IBM steal the idea and make it big(and own world dominion). Other interesting read.
  • Polaroid -The birth of digital cameras in early 2000 almost killed this company which made instant photography a hit. Polaroid filed for bankruptcy twice between 2001 and 2009, changed CEOs six times, and made a trip to hell and back. The business was transformed and now rose from ashes by leveraging on its strong brand name. Still, if you were holding its stock in 2001-2009, you'd have been having many heartaches and pondering moments.
  • Memorex -Burroughs bought Memorex and began selling it by bits and pieces. The value of the company began to fall apart when its money-making division was sold off.
  • Digital Equipment - DEC fell due to its inability to hold its senior executives accountable for financial performance after the abolition of the Product Lines in the early 1980s. Another reason was its failure in changing its business model to become a specialist in an area within the IT industry, unlike Intel(microchips) or Oracle(database).
On the side note, interesting why Marc Faber only gave technology stocks as examples.

6. Buy when there is blood on the street.

It is true that very often, bad news provide an interesting entry point, at least as a trading opportunity, into a market. However, a better long term strategy may be to buy on bad news, which has been preceded by a long string bad news. When then the market no longer declines, there is a chance that the really worst has been fully discounted.

Comment: Check the momentum of the stock.

7. Don't trust anyone!

Everybody is out to sell you something. Corporate executives either lie knowingly or because they don't know the true state of their business and the entire investment community makes money on you buying or selling something.

Comment : Recently the Malaysian CIMB-RHB-MBSB bank mega-merger deal fell apart due to rumours ranging from the fact that EPF couldn't vote for the deal and therefore unhappy, MBSB's loan provisioning practice is looser than the other two 'big brothers'. Officially, the interested parties did not proceed  because the deal did not create value for all stakeholders(minorities such as Aabar Investments included).

Look at what Mr Nazir has said the day before the deal was officially called off here on 14th January 2015: "He was non-committal when asked about the current status of the talks between the three banks, saying that they were still assessing the deal based on existing terms to determine whether the exercise should proceed."

So, if you had believed him , you'd have thought that the merger might still have a chance.
He was non-committal when asked about the current status of the talks between the three banks, saying that they were still assessing the deal based on existing terms to determine whether the exercise should proceed. - See more at:
He was non-committal when asked about the current status of the talks between the three banks, saying that they were still assessing the deal based on existing terms to determine whether the exercise should proceed. - See more at:"

8. The best investments are frequently the ones you did not make! 

To make a really good investment, which will in time appreciate by 100 times or more, is like finding a needle in a haystack. Most "hot tips" and "must buy" or "great opportunities" turn out to be disasters. Thus, only take very few investment decisions, which you have carefully analyzed and thought about in terms of risk and potential reward.

9. Invest where you have an edge!

If you live in a small town you may know the local real estate market, but little about Cisco, Yahoo and Oracle. Stick with your investments in assets about which you may have a knowledge edge.

Comment: Beware though, to have a bias towards the company which you work in, and might have all the insider news on, creating a blind spot towards the other perspectives(whether good or bad). Benjamin Graham has cautioned the intelligent investor many times on this, and advised her not to invest all eggs into one basket.

10. Invest in Yourself!

Today's society is obsessed with money. But the best investments for you may be in your own education, in the quality of the time you spend with the ones you love, on your own job, and on books, which will open new ideas to you and let you see things from many different perspectives.

Wednesday, January 14, 2015

A peek into the future?

IBM's take on big data and the world of retailing.

1. Retailers need to filter out noise from data.
2. Predictive analytics strategy 1:
  • observing what people are saying on social media outlets and using that to gauge customer sentiment about particular brands
  • tweets about a brand , especially from a social influencer needs to be analyzed, and that means going through the connections and reputation he/she has in a a given social network.
  • knowing who this social influencer is, and who he/she is saying and then influencing, is getting more and more important over time.
3. Predictive analytics strategy 2:
  • requires actually hunting down unconventional sources of data that can offer some rare insight into your specific business.
  • IBM has access to real-time performance data from some online retailers, giving it data to conduct performance comparisons in a specific sector of retail business, such as apparel or baby products. 
  • Example of usage:
    • Performance comparison between the business and its competitors, especially for online businesses 

Questions to be answered:
1. How is Big Data different from the conventional data analysis from queries that we do from our databases?
2. How is it different in terms of implementing this data?
3. What are the sources of big data? How does a business gain the access to different types of data?

 For more , go to this page.

Saturday, January 03, 2015

Books worth reading during your holiday


TED speakers recommended many books for the public's reading pleasure during the long holidays.

Here's the link to those awesome books:

Friday, December 19, 2014

Book Review: Money: Master the Game - 7 Secrets to Financial Freedom by Anthony Robbins(2014)

I came across Tony Robbin's latest book called Money: Master the Game - 7 Secrets to Financial Freedom while watching a Youtube video promoting it. This is the latest book he wrote, his last book was written 20 years ago. Being curious, I went online and looked it through and see what is different this time. Why would a motivational coach write a book about financial freedom, and is he really the right guy to even talk about it?

Tony starts the tone of the book by debunking myths around personal financial management, suggests ways of planning the reader's personal financial game, making investment decisions and asset allocation, balancing risk and return at the same time. He also shared some strategies and secrets(no books worthy of readers' time is a common book right?) : secrets of the ultra-wealthy that commoners can use too ( WOW, I gotta pay attention, might be the next billionaire!).

What attracted me was not really the steps to financial freedom, because it's such a beaten up topic.
Plenty of writers have already tackled the subject on books and financial magazines, etc. You'd remember of course, the infamous Robert Kiyosaki's Rich Dad Poor Dad and his set of financial freedom books series. It was simple and to the point: Buy assets and not liabilities into your financial freedom.

But the real interesting part of Tony's book lies here: Section 6 of his book, called "Invest like the 0.001% : The Billionaire's Playbook". I'll let you see it for yourself.

Chapter 6: Invest like the 0.001% : The Billionaire's Playbook

Tony set out to find out why these people are rich, and how they made it by interviewing them. By picking the brains of the most successful traders and investors in the American history, Tony hopes to give a new perspective and simple steps that everyone could follow and ultimately reach their own personal goals in life. Some sections are longer than others , ranging from 2 to 10 pages. But if we could pick one idea from each of them, we'd already have 12 to act upon successfully. It's better than we first started and could already have given you the ROI you wanted from this book :)

Final score:
Readibility : 9/10
Content : 8/10
Value for money : 8/10
Action-orientation : 8/10