Friday, August 26, 2011

Reporting season - comments

The reporting season is over. Quite sometimes i did not review my position, my share holding still the old ones, Hartalega, Public Bank and Allianz. Hartalega posted record quarterly profit of 55mil, the highest among glove players. What i foresee last year happened today as latex glove producers are all suffering but nitrile glove producer is enjoying. However, the market still fail to appreciate Hartalega....again. Although it had running a full capacity, people are blaming it lack of room to expand. For those are running at 60-70% capacity are regard as got room to improve. I really cannot understand the logic especially these arguments are from the so called "analyst". Hartalega had rolled out additional 2 lines at Plant 5 and is planning to build the capacity. After all these materialized, it would it capacity by 35% with the order is waiting to flow in immediately. Hartalega is not that kind of company able to grow by M&A due to its patented in-house production technology, which made them so efficient and lowest cost producer. If they decided to take more market share in future, it would kill off all competitor by lower its margin by a "few percent only". all its competitors. I truly not able to understand why Topglove is more pricier than Hartalega by close to market capital by almost 1 Billion. The market is so illogical!

Public Bank also posted wonderful results, it should be able to make EPS of 100sen this year. It is only trade at prospective PE of 13. Only PE of 13 for one of the best managed company. Once i joke with my friend, why he want to buy Well Fargo, since Public Bank is better? Growing profit quarter by quarter, some said "slow and steady" but i think it is not true. It is growing at the rate of mid teen and above for years you guys still called it slow and steady??

Allianz is making 70mil for 6 months ended 30 June 2011, it is now making more money than LPI, without taking into the account of any surplus transfer from life insurance. Which its market capital is also 1 Billion less than LPI. Is matter of time Allianz will fetch a comparable market capital with LPI.

Although the market is highly fluctuated currently, but i still confident that my share holding is able to withstand that and beat the market.

Monday, August 22, 2011

Owning Asset?

I am of opinion that the landscape of malaysia economy is evolving very fast. The wealth is transfer from the group of lower income to middle income, and from the middle income to group of rich. With asset (especially land and house) appreciated very high and fast, we may face the situation something like Hong Kong and Singapore, where lower income and middle income group struggle to own a shelter. While the rich enjoy the most as their asset being land, house or share appreciate substantially. If this situation persist for years, it is very dangerous to those did not own any asset. Keeping cash is something not wise, provided you are prepared to snatch some asset if prices corrected.

Some think that property market today is a bubble, i do agreed partially especially those recently launched high rises. However, material prices and land cost also increase recently although is not as high as the property prices. I will not surprise if Bank Negara implement more control on property purchase.

I am worrying for those do not own any asset being share or property. Asset free person going to lose the most as asset price keep on inflated. It is true that the market can move up and go down, but if you failed to capitalize, then how? Because property is trending up over long term. Similar to good stocks also, long term it is trending up.

I am of opinion owning asset is way to move ahead. At least you get hurt some and gain some.

Wednesday, August 10, 2011

The Market and Me

The market is highly fluctuated at the moment. Put it this way i am not well prepared at present. My cash level is not high enough to take advantage of it. I still not willing to lower further my cash level until that is really a big steal. If the steep drop of share market happen in September or October it would be better as my source of fund will flow in by then. To me this round of sell off is the correction at the bull market as the profitability of businesses is not affected, only the prices of share went down. It is an opportunity to be exploited.

Besides, i also need fund for my property investment. Although i decided to pull out one of the condo i booked earlier this year due to pricing issue, i am still looking for investment elsewhere. This year i still not buy any property yet as my decision is hold back by this earlier booking. Since this is off, i am prepared to move ahead. There are some similarity between share and property investment, there are only buy the good ones and hold until the market appreciate it. Although the selection criteria are different but the principles are the same.

Both Public Bank and Hartalega reported fabulous financial results but the market still did not appreciate them. As the market is not efficient, however it long term it will. I still believe in this if not i will out from share market long time ago. The price performance of Public Bank and Hartalega is nowhere close to the performance of GLIC companies. Some say they are vomit blood companies as their share prices barely move. I still long on both counters not because i want to prove them wrong but to make money. I wont sway my believe and strategy. As long as they deliver good financial result i am prepared to hold for long term.

I did not update my blog for months because i have nothing to say. Buying share is not day to day business, most of the time doing nothing is doing somethings. My family members and friends are also at the same boats, i rather being conservative to make sure the boats are safe.