Buy Low - Sell High, Buy High - Sell Higher

Many investors prefer to pay low for a stock and hope that its price will eventually rise. However, they fail to realize that sometimes it is better to pay a higher price for a stock that has the potentials for a future growth. The money you will save from purchasing a down stock may not justify your investment if the stock continues to languish.

For example, let's assume that stock X has a P/E (price to earnings ratio) equal to 25, whereas stock Y has a P/E equal to 8. If you are ignorant enough and decide to make your investment decision based only on this metric, then stock X will seem as being overpriced.

Let us make another assumption, namely that stock X has experienced this overpricing for several periods of times. On the other hand, stock Y has consistently been under the fair price of the market.

What is more, stock X is experiencing a trading activity that is near the 52-week high, whereas stock Y has experienced a 20% down in its trailing 180-day average.

Typically, investors fail to recognize that the maxim stating that what goes down must come up and the vice versa, doesn't always hold truth. There are many exceptions back in the history.

If you follow this maxim, you will probably conclude that stock X is about to decrease. On the other hand, again under the maxim stated above, an investor may conclude that stock Y is about to make its big jump since its price is low and the stock market will recognize its strengths. Both assumptions may turn out to be completely wrong.

Buy High, Sell Higher

This strategy is highly recommended if you expect that the stock will continue to grow in the future. Thus, you should not be scared off by the high price. A stock that provides a steady percentage of growth is worth paying its higher price today, because if it continues to grow at this rate, its price will be even higher tomorrow.

You should make a careful research before following the Wall Street pack. You may probably regret that you haven't purchased the stock several months ago before its price has not jumped to the sky. However, if you make a careful research and verify that the stock possesses good potentials for future growth, then you should not be discouraged from investing in it.

Keep in mind that the stock's price will rise and fall in the short term, but over the long term a growth stock will move upwards.

Buy Low, Sell High

Many investors prefer to search for bargains, which they can later sell at a higher price. However, if you decide to apply this strategy you should be well aware that the price of the stock may not rise again.

Value investors tend to look for stocks that are overlooked and undervalued by the stock market. However, price is only one of the factors that are part of their selection process. The key consideration made is whether the stock provides steady potential for future growth.

Final Piece of Advice

Avoid making investment decisions based only on the price of the stock because a stock that is down is not obligatory to go up. Additionally, a stock that is up may come down and may not. Look at the other metrics in order to make a more educated and successful decision.

http://www.stock-market-investors.com/stock-market-advices-and-tips/buy-low-sell-high-buy-high-sell-higher.html

Budget 2012: Highlights

Budget 2012: Highlights
Written by Joseph Chin of theedgemalaysia.com
Friday, 07 October 2011 18:56

Highlights of Budget 2012 proposals announced by Prime Minister Datuk Seri Najib Tun Razak on Friday, Oct 7.
FDIs: Inflows of foreign direct investment have regained momentum. Foreign direct investment increased six-fold to RM29 billion in 2010, the highest growth in Asia. In 1H of 2011, FDI surged further by 75% to RM21.2 billion compared with RM12.1 billion for the same period in 2010. Private investment to expand 15.9% in 2012.
Expenditure: RM232.8 billion to implement all Government development plans, which include the projects and programmes. Of the amount, RM181.6 billion is for operating expenditure and RM51.2 billion for development expenditure.
Federal Government revenue expected to increase 1.9% to RM186.9 billion in 2012 compared with RM183.4 billion in 2011. Ddeficit in 2012 is expected to improve to 4.7% of GDP compared with 5.4% in 2011.
Stimulus package: RM6 billion for Special Stimulus Package through Private Financing Initiative to undertake several public projects. Projects include upgrading and maintenance of schools, including CONSTRUCTION [] of new blocks, upgrading hospitals, flood mitigation programme, upgrading basic rural infrastructure.
RM978 million to accelerate the development in five regional corridors, including building Johor Bahru-Nusa Jaya coastal highway in Iskandar, Johor; heritage tourism development in Taiping in the Northern Corridor; agropolitan scheme in Besut in the East Coast Economic Region; palm oil industrial cluster project in Lahad Datu in Sabah Development Corridor; and Samalaju water supply in the Sarawak Corridor of Renewable Energy.
Kuala Lumpur International Financial District (KLIFD): Income tax exemption of 100% for 10 years and stamp duty exemption on loan and service agreements for KLIFD status companies; Income tax exemption of 70% for 5 years for property developers in KLIFD.
Sukuk: Income tax exemption given for non-ringgit sukuk issuance and transactions is extended for another 3 years until the year of assessment 2014.
ETF: To boost Exchange Traded Funds (ETFs), Valuecap Sdn. Bhd subsidiary, I-VCAP, to provide RM200 million as seed monies for shariah-compliant ETFs. This fund will provide a matching loan subject to a maximum of RM20 million.
FELDA: FELDA Global Ventures Holding to be listed on Bursa Malaysia by mid-2012 to raise funds for the company to be a global conglomerate. Listing will create another blue chip PLANTATION [] company besides attracting international investors to Bursa Malaysia.
Rights and interests of FELDA settlers will continue to be protected by Koperasi Permodalan FELDA as the majority shareholder. FELDA settlers are expected to receive a windfall, with the amount to be announced before listing.
REITS: Govt to extend incentive for concessionary tax rate of 10% on dividends of non-corporate institutional and individual investors in Real Estate Investment Trusts (REITs) for another five years from Jan 1, 2012 to Dec 31, 2016.
SMEs: Government  to provide RM100 million for the SME Revitalisation Fund. This scheme offers soft loans up to a maximum of RM1 million for entrepreneurs to revive their businesses. To help SMEs to commercialise research products, government to set up shariah-compliant Commercialisation Innovation Fund totalling RM500 million with an attractive profit margin.
Hybrid cars: Full exemption of import duty and excise duty on hybrid cars and electric cars will continue to be given to franchise holders. Tax exemption extended until Dec 31, 2013.
Tourism: Langkawi Five Year Tourism Development Master Plan will be launched with an allocation of RM420 million.
Property: Government proposes review of real property gains tax (RPGT) as current rate of 5% not effective in curbing real estate speculative activities. Government proposes RPGT rate be reviewed. For PROPERTIES [] held and disposed within 2 years, the RPGT rate is 10%. For properties held and disposed within a period exceeding 2 years and up to 5 years, the rate is 5%. Properties held and disposed after 5 years are not subject to RPGT.
Schools: RM1 billion for the construction, improvement and maintenance of schools, particularly to cater for the immediate needs of schools.
Civil service, bonus: Government proposes new Civil Service Remuneration Scheme or SBPA which includes an exit policy for underperforming civil servants and for those who opt to leave the service.
Annual increment of civil servants increased between RM80 and RM320 according to the grade. Also civil servants who accept SBPA will receive an annual increment between 7% and 13%.
Compulsory retirement age increased from 58 to 60 years old to optimise civil servants’ contribution.
Additional bonus of half-month salary with a minimum payment of RM500 and an assistance of RM500 to government pensioners to be paid together with the December salary this year.
For 2011, this totals to one month pay with a minimum payment of RM1,000 for civil servants and RM1,000 for Government pensioners. This will benefit 1.3 million civil servants as well as 618,000 Government pensioners. The total bonus and assistance payments for this year accounts for RM4 billion.
Homes: Under My First Home Scheme for those earning below RM3,000, government to increase the limit of house prices from a maximum of RM220,000 to RM400,000.
Government will introduce Skim Amanah Rakyat 1Malaysia for households with income below RM3,000 per month, to benefit 100,000 households. Participants can apply for a RM5,000 loan with a repayment period of 5 years.
Entrepreneurs: Government will allocate RM200 million to develop Bumiputera entrepreneurs and contractors through the Ministry of Rural and Regional Development.
Venture capital: Government will establish MyCreative Venture Capital with an initial fund of RM200 million.
EPF: Tax relief up to RM6,000 for EPF and life insurance to be extended to the Private Pension Fund now known as Private Retirement Scheme. Employers’ contribution be increased from 12% to 13% for contributors who earn RM5,000 and below, benefit 5.3 million EPF contributors.

http://www.theedgemalaysia.com/business/194202-budget-2012-highlights.html

Fame, popularity and riches don't last; only character endures

Monday October 10, 2011

Monday Starters - By Soo Ewe Jin

ONE of the quotations I remember well is this “Fame is a vapour, popularity an accident, and riches take wings. Only one thing endures and that is character.”

My classmate had written that on my copy of the school magazine after we finished our Form 5. Although I did my Form 6 in the same school, this friend went on to another school and subsequently took over his father's business in operating a shop dealing with antiques.

Although this quote has been attributed to different people, includingPresident Harry Truman, the original author is probably Horace Greeley, an American newspaper editor who is known especially for his articulation of the North's vigorous antislavery sentiments during the 1850s.

It was also around that time of my schooldays that we had a new headmaster who decided to fill up the walls of some of the school blocks with interesting quotations and the most memorable one was, “Academic excellence is no substitute for poverty of character.”

Perhaps in those days much of the significance of these wise sayings were lost on us. But now that I have reached an age when looking back seems to be a favourite pastime (thanks also to The Star that is currently in a “down memory lane” mode), I can better appreciate the true value of character.

Fame and riches are indeed temporary, whether one is a celebrity, a world leader or a corporate icon.

In the past few weeks, you saw many flashback articles of the famous and the infamous from as far as 40 years back published in this newspaper. But unless you are aged 40 and above, I doubt if many of these personalities will be known to you.

Character, fortunately, has a longer legacy. And the wonderful thing is that it applies to ordinary people like us.

Many of the heart-warming stories in the Looking Back series hinge on such a legacy. We may not remember specifically the individuals by name but we remember and applaud their positive traits to this day.

Like the honest cabbie who always returned anything left behind in his taxi. Or the man who brought up a baby abandoned at the hospital as his own. Or the people who dug deep into their savings to help save the Ethiopians, the Palestinians or some stranger needing a heart operation. That is what character is all about.

Some of the best teachers I remember to this day are not the ones who drove me to score a string of As. Rather, they were the ones concerned about the health of my soul and that I would know how to make the right choices when I come by the many junctions in life.

My best bosses were also the ones who understood well the ethical foundations necessary to fight the many temptations in our profession. They were the ones who reminded me that few people will remember the stories we write, even if they made the front page. What is more important, opined one, is how that story touched lives or changed society for the better.

These are lessons that I continue to learn to this day. And they often come afresh when young people are about to start out in their careers and they come to this old uncle for advice. And that is when I find the quotation at the beginning of today's column most useful.

Deputy executive editor Soo Ewe Jin agrees with the opening sentence of the tribute to Steve Jobs posted on the Apple homepage “Apple has lost a visionary and creative genius, and the world has lost an amazing human being.” He was indeed quite a character.

http://biz.thestar.com.my/news/story.asp?file=/2011/10/10/business/9664180&sec=business

Guinness Anchor is in net-cash position

Monday October 10, 2011

Guinness Anchor is in net-cash position, is seeking ways to reward shareholders

By TEE LIN SAY
linsay@thestar.com.my

PETALING JAYA: Guinness Anchor Bhd (GAB) shareholders may be in for a reward as the company is in a net-cash position as of June 30, 2011, analysts said. The company has a net cash per share of 60 sen.

“There has been no firm sign of a capital repayment from the company. However, during their last briefing, there were indications that they were looking at ways to reward shareholders,” said one consumer analyst who attended the company's fourth-quarter results briefing.

A research head agreed that the company was considering such a payout. “We are not sure of the quantum but timing-wise, it will probably happen towards the end of its financial year.”

Ireland: ‘Our cash position varies depending on working capital and capex requirements.’

It is common for cash-rich brewers to surprise shareholders with capital repayments. Last year, Carlsberg Brewery Malaysia Bhd rewarded shareholders with a dividend payment of 58 sen after it acquired Carlsberg Singapore Pte Ltd for RM370mil in the fourth quarter 2009.

Carlsberg's special dividend of 58 sen was an improvement from 23 sen in 2009.

With the new contribution from Singapore, Carlsberg's revenue grew 30.9% to RM1.37bil in the financial year ended Dec 31, 2010 while profit after tax increased 74.8% to RM134.1mil.

“Guinness has for several years maintained an informal dividend policy of 85% to 90% of our net profit. We do not expect this policy to change in the near future. Our cash position varies depending on working capital and capex requirements at different times of the year,” GAB managing director Charles Ireland told StarBiz.

GAB has declared total dividends of 54 sen for the year ended June 30, 2011. In its fourth-quarter results briefing in August, it declared a final dividend of 44 sen, bringing total dividends to 54 sen per share for FY11. This is an increase of nine sen compared with FY10. The 54 sen net dividend represents about 90% dividend payout and net yield of 5%.

A spokesman for Carlsberg said that Carlsberg Breweries AS, as a majority shareholder of Carlsberg Malaysia, had supported the proposal to distribute net dividends of between 50% and 70% of annual profits, subject to funding requirements and cash availability for the current financial period to 2013.

“The final special dividend for 2010 was much higher than the undertaking given. This was due to the positive cashflow and after considering Carlsberg Malaysia's funding requirements.” the spokesman said.

Carlsberg declared a five sen gross dividend for the second quarter to June 30, 2011. This was lower than the 7.5 sen it had paid in the previous corresponding period. As of Dec 30, 2010, Carlsberg had net cash per share of 16 sen. Analysts estimated the company had a net cash per share of 11 sen for the financial year ending Dec 31, 2011.

Meanwhile, the consumer analyst maintains her forecasts on GAB on an unchanged dividend payout ratio of 90% per year, translating into attractive yields of 5% to 6%.

A CIMB analyst said GAB's capex this year was expected to double from the historical RM30mil to RM40mil range as it planned to install a new keg at its brewery and invest in new IT infrastructure.

“We have already projected RM60mil capex for this year. Despite the higher capital expenditure, GAB's dividend payout will remain in the range of 85% to 90%,” she said.

For the fourth quarter ended June 30, 2011, GAB's revenue increased 12.97% to RM348.76mil while net profit dropped 18.04% to RM29.08mil. For the entire year, revenue increased 9.57% to RM1.49bil while net profit increased 18.79% to RM181.38mil. GAB had cash and cash equivalents of RM179.78mil.

GAB continues to retain its top position in the malt liquor market (MLM) with a 59% market share.

An analyst said the MLM growth forecast was maintained at 5% to 6% per year, buoyed by more brewer organised events and the special UEFA European Cup 2012.

http://biz.thestar.com.my/news/story.asp?file=/2011/10/10/business/9640227&sec=business

Occupy Wall Street: Righteous anger fuels Wall Street uprising

Paul Krugman

October 10, 2011

Comments 2

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'Occupy Wall Street' growing more organised

The three-week-old campout in a lower Manhattan plaza is an increasingly well organised jumble of people, services and ideas.

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There's something happening here. What it is ain't exactly clear, but we may, at long last, be seeing the rise of a popular movement that, unlike the Tea Party, is angry at the right people.

When the Occupy Wall Street protests began three weeks ago, most news organisations were derisive if they deigned to mention the events at all. For example, nine days into the protests, National Public Radio had provided no coverage whatsoever.

It is, therefore, a testament to the passion of those involved that the protests not only continued but grew - eventually becoming too big to ignore. With unions and a growing number of Democrats now expressing at least qualified support for the protesters, Occupy Wall Street is starting to look like an important event that might even be seen as a turning point.

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"Occupy Wall Street is starting to look like an important event that might even be seen as a turning point." Photo: Reuters

What can we say about the protests? First things first - the protesters' indictment of Wall Street as a destructive force, economically and politically, is completely right.

A weary cynicism, a belief that justice will never get served, has taken over much of our political debate. In the process, it has been easy to forget just how outrageous the story of our economic woes really is. So, in case you've forgotten, it was a play in three acts.

- In the first act, bankers took advantage of deregulation to run wild, inflating huge bubbles through reckless lending. 

- In the second act, the bubbles burst - but bankers were bailed out by taxpayers, with remarkably few strings attached, even as ordinary workers continued to suffer the consequences of the bankers' sins. 

- And, in the third act, bankers showed their gratitude by turning on the people who had saved them, throwing their support behind politicians who promised to keep their taxes low and dismantle the mild regulations erected in the aftermath of the crisis.

Given this history, how can you not applaud the protesters for taking a stand? Now, it's true some of the protesters are oddly dressed or have silly-sounding slogans, which is inevitable given the open character of the events. But so what? I am a lot more offended by the sight of exquisitely tailored plutocrats, who owe their continued wealth to government guarantees, whining that the US President, Barack Obama, has said mean things about them.

Bear in mind, too, that experience has made it painfully clear that men in suits not only don't have any monopoly on wisdom but they also have very little wisdom to offer. When talking heads on, say, CNBC mock the protesters as unserious, remember how many serious people assured us that there was no housing bubble, that Alan Greenspan was an oracle and that budget deficits would send interest rates soaring.

A better critique of the protests is the absence of specific policy demands. But we shouldn't make too much of the lack of specifics. It's clear what kinds of things the Occupy Wall Street demonstrators want and it's really the job of policy intellectuals and politicians to fill in the details.

Rich Yeselson, a veteran organiser and historian of social movements, has suggested debt relief for working Americans become a central plank of the protests. I'll second that because such relief, in addition to serving economic justice, could do a lot to help the economy recover. I'd suggest that protesters also demand infrastructure investment - not more tax cuts - to help create jobs. Neither proposal is going to become law in the present political climate but the whole point of the protests is to change that political climate.

And there are real political opportunities here. Not, of course, for today's Republicans, who instinctively side with those Theodore Roosevelt-dubbed ''malefactors of great wealth''.

But Democrats are being given what amounts to a second chance. The Obama administration squandered a lot of potential goodwill early on by adopting banker-friendly policies that failed to deliver economic recovery even as bankers repaid the favour by turning on the President. Now, Mr Obama's party has a chance for a do-over. All it has to do is take these protests as seriously as they deserve to be taken.

And if the protests goad some politicians into doing what they should have been doing all along, Occupy Wall Street will have been a smashing success.

The New York Times

Read more: http://www.smh.com.au/business/righteous-anger-fuels-wall-street-uprising-20111009-1lfwl.html#ixzz1aLEOPqLM

Never mind the gyrations, see the opportunities.

Beware: massive gains are not a sign of good health

October 9, 2011

JUST when we were getting used to the ''$X billion wiped off shares'' stories, along came a week that wiped $90 billion back on, but neither headline is particularly healthy.

Of course, most investors will happily take the wipe-on over the wipe-off, let alone the occasional wipe-out, but such extreme volatility speaks more of continuing nervousness and uncertainty than investment-inducing stability.

For all the relief of the week's relief rally, nothing much has really changed with the markets. We remain captives of dubious European political resolve and prey to more wild swings over the months ahead as the continent stumbles from one precipice to another.

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The odds are that the Europeans will muddle through, that they won't be totally stupid given the knowledge of this crisis, but it's not going to be a quick process and it will be marked by more sharp falls and rallies along the way.

And then there's the US. While the Europeans stumble along, the Americans are bumbling from one economic indicator to the next with the focus on whether the country could be facing a double-dip recession. It matters less as it doesn't immediately threaten the global financial system, but it still chews up a lot of media coverage and Wall Street sentiment still holds disproportionate sway over the world's markets.

As it turned out, last week's American figures were mainly favourable, topped by Friday night's better-than-expected payroll numbers, but again the fundamentals haven't much changed. The US and Europe are facing an extended period of low or no growth as the world order changes and they collectively deal with their debt habits. Fortunately the developing world is picking up the slack, leaving the global growth rate about average.

The sooner that is generally accepted, the calmer markets will become, allowing investors to get back to trying to pick which companies will perform best. It is a less spectacular pastime than riding the roller-coaster of boom or doom, but considerably better for general health.

Within that general scenario, your columnist remains a rare fish as I'm happy for both the North Atlantic economies and our stockmarket to be flat.

The former because it helps make room for developing nations to live up to their name: to develop, to get their share.

Just as Australia's patchwork economy frees up resources in some industries and regions, encouraging them to travel to those industries and regions that need them more, the global two-speed economy prevents commodity prices going over the top.

And weaker developed nations encourage some developing nations to get over their tendency to depend on Western consumers' credit cards to pay for their growth. The world ends up stronger for the diversification.

As for our stockmarket staying down, that's fine by me as I'm still investing.

I hope to continue working, continue to put money into my superannuation, continue to add to a dividend-paying source of wealth.

Let the traders worry about stocks bouncing around, I'm happy for my super fund to keep accumulating shares in solid companies as cheaply as possible for as long as possible. Never mind the gyrations, see the opportunities.

Michael Pascoe is a BusinessDay contributing editor.

Read more: http://www.theage.com.au/business/beware-massive-gains-are-not-a-sign-of-good-health-20111008-1lew0.html#ixzz1aH13kv58