Stocks to watch: Maybulk

Despite almost a halving of charter rates for vessels, Maybulk saw a significant jump in profits for the fourth quarter ended Dec 31, 2009 (4Q09), thanks to improvement in the group's quoted investments and higher contributions from associate companies.

http://www.theedgemalaysia.com/business-news/160134-stocks-to-watch-astro-mas-telekom-maybulk.html 


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Maybulk's profit jumps despite fall in charter rates

Written by The Edge Financial Daily

Monday, 22 February 2010 23:24

KUALA LUMPUR: Despite almost a halving of charter rates for vessels, MALAYSIAN BULK CARRIERS BHD [] (Maybulk) saw a significant jump in profits for the fourth quarter ended Dec 31, 2009 (4Q09), thanks to improvement in the group's quoted investments and higher contributions from associate companies. Maybulk registered a net profit of RM88.4 million, which was a marked improvement compared to RM3.2 million in the corresponding quarter of 2008. The turnover in 4Q was RM82.6 million compared to RM138.1 million in 2008. The vastly improved earnings resulted in improved earnings per share (EPS) of 8.84 sen for 4Q09 compared to 0.32 sen in 2008. The board proposed a final single-tier dividend of 15 sen per share, amounting to RM150 million, for FY09. In the current quarter, the group's other operating income which mainly comprised a reversal of mark to market losses and gains realised from the disposal of quoted investments amounted to RM39.2 million while contributions from associates were RM19.1 million. Both administrative expenses and finance cost were also lower than last year's. Maybulk's associate companies are PACC Offshore Services Holdings Group, Eminence Bulk Carriers Pte Ltd and Novel Bright Assets Ltd. For the year ended Dec 31, 2009, Maybulk posted a net profit of RM243.8 million, a decline of 47% compared to a net profit of RM460.9 million recorded in 2008. This was on a revenue of RM303.7 million in the FY ended Dec 31, 2009 as compared to RM721.2 million in the corresponding period a year earlier. However, the FY08's results included gains from the disposal of four ships of RM327.3 million. In FY09, Maybulk sold its over-aged handy-size bulk carrier Alam Sempurna for a gain of RM8 million. Compared to 3Q09, revenue for the quarter in review was lower at RM82.6 million. In the preceding quarter, revenue was RM98 million. However, this was cushioned by reduced operating expenses of RM43.2 million against 3Q's RM59.1 million. In FY09, Maybulk's performance was affected by a decline in charter rates and its reduced fleet size. Maybulk stated that the Baltic Dry Index (BDI), which is an indicator of the charter rate, was volatile throughout the year resulting in lower comparative average Time Charter Equivalent (TCE) for the drybulk fleet of US$19,076 (RM64,858) per day versus 2008's time charter average of US$37,953 per day. Going forward, Maybulk stated that it will be challenging as indications of increased spending in exploration and production in the oil and gas sector have yet to translate into higher rates due to the current over-supply in the offshore segment.

Singapore winds down economic stimulus in budget

Singapore winds down economic stimulus in budget
Written by Thomson Reuters
Monday, 22 February 2010 19:37

Singapore today announced a smaller budget deficit for 2010/11, as governments across Asia start to unwind the stimulus policies introduced at the height of the financial crisis last year.

The government halted income and property tax rebates introduced last year and said it will phase out subsidies paid to employers to hold onto staff amid a strengthening labour market.

But the government will raise spending to boost productivity, which lags developed economies such as the United States, Japan and Hong Kong.

“The economy is improving here and around the world and so is the business activity,” said David Cohen, an economist at Action Economics. “Maybe the government feels it’s time to tighten up their fiscal largess as the economy can afford it.”

Finance Minister Tharman Shanmugaratnam expects a basic budget deficit of $7.2 billion, or 2.6% of GDP, for the fiscal year beginning April 2010, down from an estimated S$8.5 billion, or 3.3% of GDP, this fiscal year.

Singapore last week raised its economic growth forecast for 2010 to 4.5% to 6.5% from 3% to 5% after reporting better-than-expected fourth-quarter GDP.

The overall budget balance for FY2010/11 is an estimated deficit of $3 billion, or 1.1% of GDP.

The basic budget deficit excludes transfers by government to various endowment and retirement funds as well as the net investment returns from the country’s massive reserves.

Singapore last year tapped its reserves for the first time and introduced a $20.5 billion “resilience package” on top of its regular budget to save jobs and help businesses.

The government originally expected a $14.9 billion basic budget deficit in 2009/10 but the shortfall turned out to be smaller as the economy recovered in the second half of 2009 and the boom in the residential market boosted stamp duties.

India, which will announce its 2010/11 budget on Friday, is likely to announce a narrower deficit of 5.5% of GDP, Citigroup predicts. Hong Kong, which will unveil its budget on Wednesday, may dole out income and property tax waivers given the government’s strong finances.


Also read:
http://www.theedgesingapore.com/blog-heads/manu-bhaskaran/12348-manu-bhaskaran-new-directions-for-singapores-economy.html

Latexx's successful ongoing expansion plan should ensure strong growth for FY2010 and FY 2011.

Latexx CEO Low Bok Tek revealed an aggressive expansion plan to boost the company's rubber glove capacity in May 2009.

Planned targets were:

• beginning of 2009 - 4 billion pieces per year
• end of 2009 - 6 billion pieces per year
• end of 2010 - 7.5 billion pieces per year
• 2012 - 9 billion pieces per year.

Present targets:

• Latexx completed 3 double former lines at its newly built Plant 1 before Chinese New Year, increasing capacity to 6.6 billion from 6 billion at the end of 2009.
• Additional lines will be added to Plant 1 to up capacity to 9 billion pieces a year by the end of 2010 - 2 years ahead of target.

Latexx was successful in clinching new multinational customers to take up the 3 billion pieces a year capacity at Plant 1 even before it was completed.

• In 2008, it sold 2.68 billion pieces.
• It sold 3.82 billion pieces in 2009, 43% more than 2008.
• In Q4 2008, Latexx sold 750 million pieces.
• In Q4 2009 alone, Latexx sold 1.15 billion pieces.

All of Latexx's plants are located on a 50-acre site in Kamunting, Perak.  Latexx still has 12 acres of unutilised land to build plants 7 and 8.  Each plant has the capacity to produce 3 billion pieces of gloves a year.

• Plant 7 has already been cleared, which could boost its capacity by another 3 billion to 12 billion by the end of 2011.

Although the lines can be used for the production of both nitrile and natural latex gloves, Latexx is focusing on nitrile gloves for its new lines, because the margins for nitrile are higher than for natural rubber glove.

• Nitrile accounted for 20% of glove production in 2009.
• By 1QFY2010, this percentage will increase to 35%.

Latexx's successful ongoing expansion plan should ensure strong growth for FY2010 and FY 2011. 

Net profit surged:

• from RM15.2 million in 2008
• to 52.2 million in 2009
• as net profit margin expanded from 6.8% to 15.9%.

Judging from the company's

• rapid expansion plan and 
• rising margins arising from economies of scale and 
• higher nitrile production, 

a FY2010 net profit of RM 100 million is within reach.

Successfully boosting capacity by 3 billion pieces of gloves a year in 2010 will set the stage for a surge in 2011 profits, which will benefit from

• Plant 1's full-year contributions, and 
• additional contribution from Plant 7.

Latexx is conserving its cash flow for growth, so dividend yield may not be so attractive.

Net debt at end of 2009 - RM 57.4 million
Net gearing:  47% in 2008 declined to 33.7% in 2009.

Estimated cash flow in 2010 - RM 110 million
Capital expenditure in 2010 - RM 75 million.

The share prices of rubber glove companies have corrected on fears of an impending oversupply in 2011.  Although the new supply will reduce the current shortage, it need not necessarily lead to a price war, which is detrimental to all players.

Margins may be squeezed but industry growth will continue at 8% to 10% per annum, probably faster for Malaysian rubber glove companies due to outsourcing by multnationals and the exit of small players.

In a world where growth is uncertain, rubber glove companies are attractive because:

• they enjoy steadily rising demand which is recession proof,
• pricing power to pass on rising raw material costs, and
• low PERs of less than 10 x compared with almost 20 x for the large plantation and construction companies with cyclical earnings.

Ref:
Latexx:  Overachieving its growth promise
by Choong Khuat Hock
The Edge Malaysia 22.2.2010

Supermax: Future Prospects and Internal target for FY2010

Prospects

The rubber glove industry continues to be on a strong growth path despite the current global financial challenges and global economic uncertainties. In addition to the organic growth of 8-12% annually, global demand has been boosted by the ongoing H1N1 pandemic and growing demand from emerging markets as well as the healthcare and hygiene sectors.

The Group currently operates 8 wholly owned manufacturing plants and has 5 overseas distribution centres. The growing demand which is continuously being tapped by the Group’s wide global network of 750 distributors in over 145 countries and 5 distribution centres augurs well for the Group in terms of business stability and sustainability in the long term. The Group’s investment in overseas distribution since year 2001 has benefited and yielded greater market penetration in selected market territories.

The ongoing refurbishment works as well as the construction of its new Meru plant which encompasses the installation of 16 new lines with added capacity of 2.3 billion pieces of gloves per annum, is also expected to contribute to the Group’s performance going forward.

For the current financial year, the Group has achieved earnings per share of 48.37 sen, which had already surpassed its original internal target of a minimum 27 sen for year 2009 as well as the revised target of 44 sen. In view of this better than projected performance, the Company has now revised the internal target for FY2010 from the initial target of 50 sen earnings per share to 62 sen or RM168 million Profit after Tax for FY2010.

http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/ba387758ae37412b482568a300466fb6/da19a43ca011aaac482576cf003baf58/$FILE/SCB%20Q4%2709%20Bursa%20Anncmnt%20Notes%205pm.pdf

The best dividend-paying stocks

The best dividend-paying stocks
The best dividend-paying stocks, provide not only income, but significant capital appreciation.


Related readings:

Evaluating Dividend-Paying Companies
The importance of not buying shares near the top of the market peaks
Dividends Are Still the Linchpin
Ten Principles of Dividend Growth Investing
How and Why Do Companies Pay Dividends?
The 10 Best Dividend Stocks of the Past Decade
Investing for income: Dividend yield and Dividend cover ratio
The case for Dividend Growth Investing
The concept of valuing a share according to its dividend
Importance of dividend yield in the evaluation of the worth of a share.
Dividend yield prevents investors from being side-tracked by irrelevant events.
Dividend is a sure thing
Recession or not McDonald's increases dividend for the 32nd year 

Warren Buffett's concept of Equity Bond

Warren Buffett’s Concept of Equity Bond in Action

How to pay less personal tax

Monday February 22, 2010
How to pay less personal tax
By ANG WEINA

THE 2009 tax-filing season for individuals has arrived. For many of us, April 30 will be just another day (perhaps accompanied by scrambling for our just-in-time filing) to settle our dues with the Inland Revenue Board by submitting the Form e-BE and paying any balance tax.

Before clicking the button to complete the e-filing, take a second look at the figures keyed in. Is the amount of tax calculated the lowest it can be? Here are some tips on saving tax that would not get you in trouble with the law.

1. Know your income: What is taxable and what is not.

Gone are the days when you agonise over the delay in receiving your Form EA from your employer. It is now a law for employers to issue the Form EA to their employees no later than the end of February. The key point to note is not all income in your Form EA is taxable! Scrutinise all the items in Form EA to see if there is any which should be tax-free. For example:

Travelling allowances

If you receive travelling allowance, up to RM2,400 for your travels from home to office is tax-free. What this means is if you receive an allowance of RM12,000 for such travel, you can deduct RM2,400 and only RM9,600 is taxable. Further, travelling allowance of up to RM6,000 for official duties is tax-exempt.

Meal, parking and childcare allowances

Many employees receive these allowances, do you? You would be happy to know that you can enjoy such perks with no worries about paying tax thereon (up to RM2,400 in the case of childcare allowance).

2. Make the most of all tax-free benefits.

Medical benefits

Medical benefits for traditional medicine including ayurvedic, plus maternity benefits are also tax-free.

Interest subsidies

Your employer may have subsidised interest on your housing, car and education loans. In the past, these subsidies would be taxable on you. Now you would be glad to know such interest subsidies are tax-exempt (so long as the total loans do not exceed RM300,000).

Broadband and telephone benefits

Who can leave home without the iPhone, Blackberry or PDAs nowadays? Getting such a device from your employer plus reimbursement for broadband and telephone bills are tax-free. So take advantage and enjoy the latest gadgets and services.

3. Know your limits.

Just as in drinking and driving, stay within the limits to avoid any trouble or triggering tax.

If you have enjoyed any staff benefits like discounts on your company’s goods or services and kept within the RM1,000 a year limit, you should enjoy tax exemption thereon.

Did you receive a small token from your employer on your achievements in service excellence, innovation or productivity which brought on a smile? Don’t blame your employer if they kept the awards below RM2,000 as no tax should be levied on you. Neither is the award for your long service with the company (for more than 10 years) forgotten. As long as your employer kept the value of all awards to you within the RM2,000 limit, the smile should remain on you.

4. Look for more tax-free income.

Bank interest income

You will note a subtle difference in your bank statement nowadays as it no longer shows the amount of tax withheld. Bank interest income is now tax-exempt.

Dividends

Dividends need not be entirely taxable. Have a good look at the dividend voucher. If it states that the dividend is “tax-exempt”, then it is not taxable anymore.

5. Gain more deductions.

Purchase of sports equipment

If the slimming fad has caught on with you, keep the receipts of your purchases of any sports equipment. A claim of up to RM300 is a small incentive to shape those curves and muscles in a big way!

Have receipts or evidence to support more deductions

Medical expenses for your parents certified by a medical practitioner (restricted to RM5,000);

Medical expenses for serious diseases for self, spouse or child (up to RM5,000), including a complete medical examination for self, spouse or child limited to RM500;

Basic supporting equipment for disabled self, spouse, child or parents (ceiling of RM5,000);

Disabled person (self) (RM6,000);

Disabled husband/wife (RM3,500);

Education fee (self) up to tertiary level for the purpose of acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications for a masters or doctorate level, undertaken for the purpose of acquiring any skill or qualification (limited to RM5,000);

Purchase of books/journals/magazines/similar publications for self, spouse or child (up to RM1,000);

Net deposit in National Education Savings Scheme (ceiling of RM3,000);

Purchase of personal computer for individual (maximum deduction of RM3,000 allowed once every three years);

Premiums on life insurance plus EPF and other approved fund contributions (subject to RM6,000 restriction);

Premiums for education or medical insurance (restricted to RM3,000);

Relief of up to RM10,000 on the housing loan interest paid (conditions apply);

Payment of alimony to former wife (maximum total deduction for wife and alimony payment is RM3,000);

Zakat other than monthly zakat deduction from salary; and

Fees/levy paid by a holder of an employment pass, visit pass (temporary employment) or work pass.

The rule of the “game” of keeping your tax liability to the minimum when preparing your tax return Form e-BE is to do it right within the law. For a start, make the website of the Inland Revenue Board, www.hasil.gov.my, one of your favourites from now until April 30 to access its easy to read guides. Happy e-filing!

● Ang Weina is executive director and global employer services leader with the tax practice of Deloitte Malaysia.


http://biz.thestar.com.my/news/story.asp?file=/2010/2/22/business/5708847&sec=business

http://www.asiaone.com/News/AsiaOne%2BNews/Asian%2BOpinions/Story/A1Story20090506-139612.html

Learn to Invest in 10 Steps

Learn to Invest in 10 Steps

Learn To Invest In 10 Steps

Investing is actually pretty simple; you're basically putting your money to work for you so that you don't have to take a second job, or work overtime hours to increase your earning potential. There are many different ways to make an investment, such as stocks, bonds, mutual funds or real estate, and they don't always require a large sum of money to start.

Step 1: Get Your Finances In Order

Jumping into investing without first examining your finances is like jumping into the deep end of the pool without knowing how to swim. On top of the cost of living, payments to outstanding credit card balances and loans can eat into the amount of money left to invest. Luckily, investing doesn't require a significant sum to start. Gain more insight in Invest On A Shoestring Budget and Should I Invest Or Reduce Debt?.

Step 2: Learn The Basics

You don't need to be a financial expert to invest, but you do need to learn some basic terminology so that you are better equipped to make informed decisions. Learn the differences between stocks, bonds, mutual funds and certificates of deposit (CDs). You should also learn financial theories such as portfolio optimization, diversification and market efficiency. Reading books written by successful investors such as Warren Buffett or reading through the basic tutorials on Investopedia are great starting points. Get started with our Investing 101 tutorial.(listed below)

Step 3: Set Goals

Once you have established your investing budget and have learned the basics, it's time to set your investing goal. Even though all investors are trying to make money, each one comes from a diverse background and has different needs. Safety of capital, income and capital appreciation are some factors to consider; what is best for you will depend on your age, position in life and personal circumstances. A 35-year-old business executive and a 75-year-old widow will have very different needs. Read more in Basic Investment Objectives and Investing With A Purpose.

Step 4: Determine Your Risk Tolerance

Would a significant drop in your overall investment value make you weak in the knees? Before deciding on which investments are right for you, you need to know how much risk you are willing to assume. Do you love fast cars and the thrill of a risk, or do you prefer reading in your hammock while enjoying the safety of your backyard? Your risk tolerance will vary according to your age, income requirements and financial goals. For more insight read Risk Tolerance Only Tells Half The Story,  Personalizing Risk Tolerance and Determining Risk And The Risk Pyramid.

Step 5: Find Your Investing Style

Now that you know your risk tolerance and goals, what is your investing style? Many first-time investors will find that their goals and risk tolerance will often not match up. For example, if you love fast cars but are looking for safety of capital, you're better off taking a more conservative approach to investing. Conservative investors will generally invest 70-75% of their money in low-risk, fixed-income securities such as Treasury bills, with 15-20% dedicated to blue chip equities. On the other hand, very aggressive investors will generally invest 80-100% of their money in equities. Find your fit in Achieving Optimal Asset Allocation.

Step 6: Learn The Costs

It is equally important to learn the costs of investing, as certain costs can cut into your investment returns. As a whole, passive investing strategies tend to have lower fees than active investing strategies such as trading stocks. Stock brokers charge commissions. For investors starting out with a smaller investment, a discount broker is probably a better choice because they charge a reduced commission. On the other hand, if you are purchasing mutual funds, keep in mind that funds charge various management fees, which is the cost of operating the fund, and some funds charge load fees. Read The Lowdown On No-Load Mutual Funds.

Step 7: Find A Broker Or Advisor

The type of advisor that is right for you depends on the amount of time you are willing to spend on your investments and your risk tolerance. Choosing a financial advisor is a big decision. Factors to consider include their reputation and performance, what designations they hold, how much they plan on communicating with you and what additional services they can offer. For more tips, read Shopping For A Financial Advisor and Picking Your First Broker.

Step 8: Choose Investments

Now comes the fun part: choosing the investments that will become a part of your investment portfolio. If you have a conservative investment style, your portfolio should consist mainly of low-risk, income-producing securities such as federal bonds and money market funds. Key concepts here are asset allocation and diversification. In asset allocation, you are balancing risk and reward by dividing your money between the three asset classes: equities, fixed-income and cash. By diversifying among different asset classes, you avoid the issues associated with putting all of your eggs in one basket. Learn more in A Guide To Portfolio Construction and Introduction To Diversification.

Step 9: Keep Emotions At Bay

Don't let fear or greed limit your returns or inflate your losses. Expect short-term fluctuations in your overall portfolio value. As a long-term investor, these short-term movements should not cause panic. Greed can lead an investor to hold on to a position too long in the hope of an even higher price – even if it falls. Fear can cause an investor to sell an investment too early, or prevent an investor from selling a loser. If your portfolio is keeping you awake at night, it might be best to reconsider your risk tolerance and adopt a more conservative approach. Read When Fear And Greed Take Over  for more.

Step 10: Review and Adjust

The final step in your investing journey is reviewing your portfolio. Once you've established an asset-allocation strategy, you may find that your asset weightings have changed over the course of the year. Why? The market value of the various securities within your portfolio has changed. This can be modified easily through rebalancing. Read more on this topic, and the consequences for ignoring these changes, in Rebalance Your Portfolio To Stay On Track.

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Investing 101: Introduction

Printer friendly version (PDF format)

Have you ever wondered how the rich got their wealth and then kept it growing? Do you dream of retiring early (or of being able to retire at all)? Do you know that you should invest, but don't know where to star

If you answered "yes" to any of the above questions, you've come to the right place. In this tutorial we will cover the practice of investing from the ground up. The world of finance can be extremely intimidating, but we firmly believe that the stock market and greater financial world won't seem so complicated once you learn some of the lingo and major concepts. 

We should emphasize, however, that investing isn't a get-rich-quick scheme. Taking control of your personal finances will take work, and, yes, there will be a learning curve. But the rewards will far outweigh the required effort. Contrary to popular belief, you don't have to allow banks, bosses or investment professionals to push your money in directions that you don't understand. After all, no one is in a better position than you are to know what is best for you and your money.

Regardless of your personality type, lifestyle or interests, this tutorial will help you to understand what investing is, what it means and how time earns money through compounding. But it doesn't stop there. This tutorial will also teach you about the building blocks of the investing world and the markets, give you some insight into techniques and strategies and help you think about which investing strategies suit you best. So do yourself a lifelong favor and keep reading.

One last thing: remember: there are no "stupid" questions. If after reading this tutorial you still have unanswered questions, we'd love to hear from you.

Next: Investing 101: What Is Investing?

Table of Contents

1) Investing 101: Introduction

2) Investing 101: What Is Investing?

3) Investing 101: The Concept Of Compounding

4) Investing 101: Knowing Yourself

5) Investing 101: Preparing For Contradictions

6) Investing 101: Types Of Investments

7) Investing 101: Portfolios And Diversification

8) Investing 101: Conclusion

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Warren Buffett's Worst Mistakes

Warren Buffett's Worst Mistakes
by Eric Fontinelle
Monday, February 22, 2010


Warren Buffett is widely regarded as one of the most successful investors of all time. Yet, as Buffett is willing to admit, even the best investors make mistakes. Buffett's legendary annual letters to his Berkshire Hathaway (BRK-A) shareholders tell the tales of his biggest investing mistakes.

There is much to be learned from Buffett's decades of investing experience, so I have selected three of Buffett's biggest mistakes to analyze.

Conoco Phillips

Mistake: Buying at the wrong price

In 2008, Buffett bought a large stake in the stock of Conoco Phillips (COP) as a play on future energy prices. I think many might agree that an increase in oil prices is likely over the long term and that Conoco Phillips will likely benefit. However, this turned out to be a bad investment, because Buffett bought in at too high of a price, resulting in a multibillion-dollar loss to Berkshire. The difference between a great company and a great investment is the price at which you buy stock, and this time around Buffett was "dead wrong." Since crude oil prices were well over $100 a barrel at the time, oil company stocks were way up.


Lesson Learned


It's easy to get swept up in the excitement of big rallies and buy in at a prices that you should not have -- in retrospect. Investors who control their emotions can perform a more objective analysis. A more detached investor might have recognized that the price of crude oil has always exhibited tremendous volatility and that oil companies have long been subject to boom and bust cycles.


Buffett says: "When investing, pessimism is your friend, euphoria the enemy."

U.S. Air

Mistake: Confusing revenue growth with a successful business

Buffett bought preferred stock in U.S. Air (LCC) in 1989 -- no doubt attracted by the high revenue growth it had achieved up until that point. The investment quickly turned sour on Buffett, as U.S. Air did not achieve enough revenues to pay the dividends due on his stock. With luck on his side, Buffett was later able to unload his shares at a profit. Despite this good fortune, Buffett realizes that this investment return was guided by lady luck and the burst of optimism for the industry.


Lesson Learned


As Buffett points out in his 2007 letter to Berkshire shareholders, sometimes businesses look good in terms of revenue growth but require large capital investments all along the way to enable this growth. This is the case with airlines, which generally require additional aircraft to significantly expand revenues. The trouble with these capital-intensive business models is that by the time they achieve a large base of earnings, they are heavily laden with debt. This can leave little left for shareholders and makes the company highly vulnerable to bankruptcy if business declines.


Buffett says: "Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it."

Dexter Shoes

Mistake: Investing in a company without a sustainable competitive advantage

In 1993, Buffett bought a shoe company called Dexter Shoes. Buffett's investment in Dexter Shoes turned into a disaster because he saw a durable competitive advantage in Dexter that quickly disappeared. According to Buffett, "What I had assessed as durable competitive advantage vanished within a few years." Buffett claims that this investment was the worst he has ever made, resulting in a loss to shareholders of $3.5 billion.


Lesson Learned


Companies can only earn high profits when they have some sort of a sustainable competitive advantage over other firms in their business area. Wal-Mart (WMT) has incredibly low prices. Honda (HMC) has high-quality vehicles. As long as these companies can deliver on these things better than anyone else, they can maintain high profit margins. If not, the high profits attract many competitors that will slowly eat away at the business and take all the profits for themselves.


Buffett says: "A truly great business must have an enduring "moat" that protects excellent returns on invested capital."

The Bottom Line

While making mistakes with money is always painful, paying a few "school fees" now and then doesn't have to be a total loss. If you analyze your mistakes and learn from them, you might very well make the money back next time. All investors, even Warren Buffett, must acknowledge that mistakes will be made along the way.


Click: Warren Buffett's Worst Mistakes

Read: The Buffett Philosophy

The Buffett Philosophy

Warren Buffett is a proponent of value investing, which looks to find stocks that are undervalued compared to their intrinsic value. Financial metrics like price/book (P/B), price/earnings (P/E), return on equity (ROE) and dividend yield carry the most weight on the Buffett scales. In addition, he seeks out companies that have what he calls "economic moats" - high barriers to entry for a competitor who may wish to invade the market and erode profit margins.

The Bottom Line

There's no shame in being a coattail investor, especially when that coat belongs to Warren Buffett. While all stock investing comes with some risk, a basket of these six stocks is a diversified way to participate in an economy that is by all accounts growing after the worst recession in decades. These market leaders have high barriers to competition, are fairly priced and, regardless of what short-term stock prices say, should deliver long-term value to shareholders. As Buffett himself said, in the short term the market is a voting machine, in the long term, it is a weighing machine. Buffett has an uncanny ability to pick the stocks with the greatest potential for growth, ensuring that the profit scale will always tip in his favor.
   
Baby Buffett Portfolio: His 6 Best Long-Term Picks
Berkshire Hathaway’s 15 Biggest Stock Holdings

****Growth stocks as a class has a striking tendency toward wide swings in market price (II)

The striking thing about growth stocks as a class is their tendency toward wide swings in market price.

But is it not true, that the really big fortunes from common stocks have been garnered by those 

• who made a substantial commitment in the early years of a company in whose future they had great confidence and 
• who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?

The answer is "Yes."  

Click to see:
10 Year Price Chart of Top Glove

But the big fortunes from single company investments are almost always realised by persons who have a close relationship with the particular company - through employment, family connection, etc. - which justifies them

• in placing a large part of their resources in one medium and 
• holding on to this commitment through all vicissitudes, despite numerous temptations to sell out at apparently high prices along the way.

Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove


An investor without such close personal contact will constantly be faced with the question of whether too large a portion of his funds are in this one medium. 

Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove


Each decline - however temporary it proves in the sequel - will accentuate his problem; and internal and external pressures are likely to force him to take what seems to be a good profit, 


Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove 
1 Month Price Chart of Top Glove 

but one far less than the ultimate bonanza.

Click to see:
10 Year Price Chart of Top Glove



Comments:

1. Be a good stock picker.  
2. Think as a business owner.
3. Always look at value rather than the price.  Do the homework.
4. Buy and hold is alright for selected stocks.
5. Compounding is your friend, get this to work the magic for you.
6. Mr. Market is there to be taken advantage of.  Do not be the sucker instead.  BFS;STS.
7. Always buy a lot when the price is low.  Doing so locks in a higher potential return and minimise the potential loss.  But then, if you have confidence in your stock picking, you would have picked a winner - it is only how much return it will deliver over time.
8. Never buy when the stock is overpriced.  Not observing this rule will result in loss in your investing.  This strategy is critical as it protects against loss.
9. It is alright to buy when the selected stock is at a fair price.
10. Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the the price is still obviously too high.
11. Do not time the market for such or any stocks.   Timing can increase returns and similarly harms the returns from your investment. It is impossible to predict the short term volatility of the stock, therefore, it is better to bet on the long-term business prospect of the company which is more predictable. 
12. By keeping to the above strategy, the returns will be delivered through the growth of the company's business. 
13. So, when do you sell the stock?  Almost never, as long as the fundamentals remain sound and the future prospects intact.    
14. The downside risk is protected through only buying when the price is low or fairly priced.  Therefore, when the price is trending downwards and when it is obviously below intrinsic value, do not harm your portfolio by selling to "protect your gains" or "to minimise your loss."  Instead, you should be brave and courageous (this can be very difficult for those not properly wired)  to add more to your portfolio through dollar cost averaging or phasing in your new purchases.  This strategy is very safe for selected high quality stocks as long as you are confident and know your valuation.  It has the same effect of averaging down the cost of your purchase price.  However, unlike selling your shares to do so, buying more below intrinsic value ensures that your money will always be invested to capture the long term returns offered by the business of the selected stock.
15. Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.  Tactical dynamic asset allocation or rebalancing involves selling at the right price and buying at the right price based on valuation.  Assuming you can get your buying and your selling correct 80% of the time;, to get both of them right for a profitable transaction is only slightly better than chance (80% x 80% = 64%).  Except for the extremes of the market, for most (perhaps, almost all of the time), for such stocks, it is better to stay invested (buy, hold, accumulate more) for the long haul.
16. Sell urgently when the company business fundamental has deteriorated irreversibly. (Reminder:  Transmile)
17. You may also wish to sell  should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality.  However, unlike point 14, you can do so leisurely.
18. In conclusion, a critical key to successful investing is in your stock picking ability.  To be able to do so, you will need to acquire the following skills:

• To formulate an investing philosophy and strategy suitable for your investing time horizon, risk tolerance profile and investment objectives.
• The knowledge to value the business of the company.  
• The discipline to always focus on value.
• The willingness to do your homework diligently.
• A good grasp of behavioural finance to understand your internal and external responses to the price fluctuations of the stock in the stock market.
• A good rational thinking regarding the risks (dangers) and rewards (opportunities) generated by the price fluctuations of the stock in the stock market.

Top Glove Insider action:

Tan Sri Dr. Lim Wee Chai

Disposed 26/1/2007 100,000
Acquired 14/2/2007 34,540,661 (Bonus issue)
Disposed 6/4/2007  6,300,000
Acquired 9/5/2007 1,000,000
Acquired 22/6/2007 500,000
Acquired 12/7/2007 438,900
Acquired 18/7/2007 403,900
Acquired 25/7/2007 157,200
Acquired 12/9/2007 200,000
Acquired 18/9/2007 580,000
Acquired 24/3/2008 50,000
Expiration of ESOS-options 29/4/2008

(The only ESOS-option not converted and expired were those noted on 29/4/2008.  After this date, Mr. Lim continued to convert ESOS-options at regular intervals and did not buy or sell other shares of his company.  The large sale of shares in 6/4/2007 followed the large bonus issue Mr. Lim acquired on 14/2/2007.)

Click to see:
5 Year Price Chart of Top Glove
10 Year Price Chart of Top Glove

From the price chart of Top Glove, we can draw the following points:

The price of Top Glove peaked at around $14 at the beginning of January 2007.
It dropped to around  $9 in February 2007.
In April 2007, the price was around $9.20 when Mr. Lim sold 6,300,000 shares; he did not sell at the highest price possible.
In May 2007, the price was around $8.95, Mr. Lim bought back 1,000,000 shares.
The share price continued dropping to $6.00 in September 2007; Mr. Lim bought back 580,000 shares.
Mr. Lim continued to buy from May 2007 to September 2007 a total of 2.9 million shares.
It was obvious that even Mr. Lim phased-in his buying of the shares at various prices, rather than timing the buying of his shares at the lowest price.

****Growth stocks as a class has a striking tendency toward wide swings in market price (I)

The striking thing about growth stocks as a class is their tendency toward wide swings in market price.


Click to see:
1 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
5 Year Price Chart of Top Glove



The main characteristic of the stock market in the last few decades has been the injection of a highly speculative element into the shares of companies which have scored the most brilliant successes, and which themselves would be entitled to a high investment rating.  (Their credit standing is of the best, and they pay the lowest interest rates on their borrowings.)

The investment caliber of such a company may not change over a long span of years, but the risk characteristic of its stock will depend on what happens to it in the stock market.

The more enthusiastic the public grows about it, and the faster its advance as compared with the actual growth in its earnings, the riskier a proportion it becomes.

But is it not true, that the really big fortunes come from common stocks that have been garnered by those who made a substantial commitment in the early years of a company in whose future they had great confidence, and who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?

Click to see:
10 Year Price Chart of Top Glove

PETRONAS DAGANGAN BHD 19/02/2010

Company Name	:	PETRONAS DAGANGAN BHD
Stock Name	:	PETDAG
Date Announced	:	19/02/2010

Financial Year End	:	31/03/2010
Quarter	:	3
Quarterly report for the financial period ended	:	31/12/2009
The figures	:	have not been audited

SUMMARY OF KEY FINANCIAL INFORMATION

31/12/2009

		INDIVIDUAL PERIOD		CUMULATIVE PERIOD
		CURRENT YEAR QUARTER	PRECEDING YEAR CORRESPONDING QUARTER	CURRENT YEAR TO DATE	PRECEDING YEAR CORRESPONDING PERIOD
		31/12/2009	31/12/2008	31/12/2009	31/12/2008
		$$'000	$$'000	$$'000	$$'000
1	Revenue	5,337,713	5,561,380	15,269,549	19,992,622
2	Profit/(loss) before tax	256,924	68,316	814,905	574,361
3	Profit/(loss) for the period	188,133	43,612	595,059	410,169
4	Profit/(loss) attributable to ordinary equity holders of the parent	187,245	42,471	591,827	406,320
5	Basic earnings/(loss) per share (Subunit)	18.80	4.30	59.60	40.90
6	Proposed/Declared dividend per share (Subunit)	0.00	0.00	0.00	0.00
		AS AT END OF CURRENT QUARTER		AS AT PRECEDING FINANCIAL YEAR END
7	Net assets per share attributable to ordinary equity holders of the parent ($$)	4.4300		4.1900

http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/ba387758ae37412b482568a300466fb6/5af5967889691a94482576cf00367d7f/$FILE/Announcement%20311209.pdf

Click:
http://spreadsheets.google.com/pub?key=tJWbiwysZm_w2XxUUxHAOeQ&output=html

Dutch Lady posts 4Q net profit of RM16.05m, warns of difficult year

Dutch Lady posts 4Q net profit of RM16.05m, warns of difficult year


Written by The Edge Financial Daily
Thursday, 18 February 2010 20:01
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KUALA LUMPUR: DUTCH LADY MILK INDUSTRIES BHD [] posted net profit of RM16.05 million in the fourth quarter ended Dec 31, 2009, up 16.6% from RM13.76 million a year ago as it benefited from favourable dairy raw material prices and effective marketing activities.

However, the company's board expects a difficult year ahead because of an anticipated increase in dairy raw material prices and increased competition.

It said today revenue rose 2.5% to RM169.52 million from RM165.34 million. Its pre-tax profit rose to RM22.99 million from RM19.24 million. Earnings per share were 25.08 sen versus 21.51 sen. It proposed a final dividend of 10 sen, less 25% income tax, and five sen, tax exempt amounting to a total net dividend of RM 8 million (12.5 sen net per share).

However, profit before taxation for 4Q was lower at RM23 million compared with RM26.9 million in 3Q2009, mainly due to higher advertising and promotions costs and lower selling prices.


http://www.theedgemalaysia.com/business-news/159907-dutch-lady-posts-rm1605m-net-profit-in-4q.html

Only an Idiot Would Buy This Today

Only an Idiot Would Buy This Today

By Tim Hanson
February 11, 2010

Think back to last Thursday at 3:45 p.m. The Snowpocalypse was bearing down on Washington, D.C., and the market was about to close down 3%. It was so bad around here that you'd be forgiven for thinking the end was nigh.

And that was just one more day in a whole season of bad news. What in the name of all that is good and sane in this world should we investors be doing to protect ourselves?

The old standby?
The obvious answer is that as uncertainty spikes, investors seeking peace of mind should flock to lower-risk or even risk-free assets such as Treasuries. These, after all, are backed by the full faith and credit of the U.S. government, and that means something -- or at least, it did 10 years ago. But only an idiot would buy Treasuries today.

In fact, financial supergenius Nassim Nicholas Taleb, of Black Swan fame, recently told a conference in Moscow that "every single human being" should short U.S. treasuries. (If you agree, then Ultrashort 20+ Year Treasury ProShares (NYSE: TBT) is your play.) Taleb cited looming hyperinflation and the inability of the U.S. government to get its spending under control, prospects that eliminate holding plain old dollars as well.

What does Taleb recommend instead? Gold.

Gold?
Only an idiot would buy gold today. The price of that commodity is currently north of $1,000 per ounce, and flirting with new all-time highs on a daily basis. According to billionaire George Soros, gold today is "the ultimate asset bubble."

Given what's happened with the last two ultimate bubbles -- real estate and tech stocks -- it may be best to avoid this one. Recall that if you bought Oracle (Nasdaq: ORCL) or Intel (Nasdaq: INTC) in 2000 or Bank of America (NYSE: BAC) in 2007, you're still down 40% or more.

What about bonds?
Both short- and long-term bonds look like another idiot move. Although bonds tend to offer a regular return and better principal protection than equities, remember that interest rates are near an all-time low. As soon as they revert to the mean, today's bonds, both low- and "high-" yielding issues, will get crushed.

Furthermore, thanks to a risk-averse market, high-quality corporate bonds offer next to nothing in terms of yield. This prompted Forbes to recently declare a "monster bond mutual fund bubble." That sounds even worse than "the ultimate asset bubble."

So … equities?
Master investor David Dreman is bullish on stocks, describing them as good hedge against inflation. But again, the stock market was down near 3% last Thursday, unemployment keeps hovering near 10%, and our country still has to survive significant deleveraging. I've heard from several sources that only an idiot would buy stocks today.

Even Berkshire Hathaway (NYSE: BRK-B), a stalwart if ever there was one, has lost its coveted AAA credit rating. As the last two years have shown, the U.S. stock market is not the place for risk-averse investors.

With the U.S. in trouble, you might look abroad.

• Unfortunately, Europe's situation, with Spain, Portugal, and Greece all struggling to meet their debt obligations, looks worse than our own. 
• As for fast-growing emerging markets, they're all going down as soon as the massive China bubble pops -- as short-seller Jim Chanos has predicted that it will. 
• This, in turn, will take down commodity prices as well, so don't seek safety in oil or food.

Thus, you're only courting double trouble by getting interested in Chinese energy stocks such as PetroChina (NYSE: PTR) or CNOOC (NYSE: CEO). Only an idiot would buy any of those!

Have you noticed there's nothing left?

All told, if you have money to invest, and have spent any time at all reading about the markets, chances are you're panicked. You don't know what to buy (since everything's a bubble), and you don't want to hold cash (since its value will just get inflated away).

This is the perfect illustration of why, when it comes to investing in good times or bad, you can't get caught up in the short term, or in breathless market commentary.

In order to make money in the stock market -- which we all want when we're trying to "protect" our portfolios -- you need take a long-term view, diversify across asset classes, and commit to buying great companies at great prices whenever the market gives you the opportunity. After all, anything has the chance to make you look like an idiot in the short term. But if you stay balanced, stay patient, and stay invested, you'll be in pretty good shape.

Are you any of those things?
That's our view at Motley Fool Global Gains, and we've been tilting our exposure more and more toward emerging markets this year because, while we do expect some volatility, we also expect that emerging markets will be the global economic success story of the next decade.

Furthermore, we recently advised our members that they should consider buying CNOOC -- one of the aforementioned Chinese energy plays -- below $150. That's because the company has increased its production guidance, and it remains a very good way to play the inevitable increase in China's energy demand long-term.

Unfortunately, most U.S. investors remain dramatically underexposed to foreign markets and stocks such as CNOOC -- a vital part of any balanced, long-term, protected portfolio. If that describes you, then get our latest stock recommendations -- including today's two brand-new picks -- by joining Global Gains free for 30 days.


Tim Hanson is co-advisor of Motley Fool Global Gains. Berkshire Hathaway and Intel are Motley Fool Inside Value recommendations. Berkshire Hathaway is a Stock Advisor pick. CNOOC is a Global Gains selection. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Berkshire Hathaway and Oracle. The Fool's disclosure policy does not fear the Snowpocalypse, only the Snowmageddon.

http://www.fool.com/features/market-recap/2010/02/11/only-an-idiot-would-buy-this-today.aspx

After Last Year's Stock Rally, Asia Braces for Some Volatility

After Last Year's Stock Rally, Asia Braces for Some Volatility

Heda Bayron | Hong Kong 18 February 2010


Stocks in Asia surged last year, thanks to a massive inflow of capital into the region. But as economies recover, those funds could easily move to seek higher returns elsewhere, creating volatility in the markets.

In recent weeks, Asian stock markets have seen some sharp drops. Hong Kong's Hang Seng index has dropped about seven percent so far this year. Elsewhere in Asia, Japan's Nikkei index and the Shanghai Composite index dropped six percent.

Last year, these markets surged from their lows in late 2008. The Hang Seng index, for instance, ended 2009 up 45 percent.

Garry Evans, head of strategy of HSBC Global Banking and Markets, said in the bank's latest investment commentary that stocks are unlikely to rise the way they did last year.

"The fundamentals of the economy are picking up. What you always have to remember is that the stock market moves in anticipation of that. So the stock market rise last year came down to the fact that the market was anticipating the economy being very good this year," he said.

Stocks last year surged in part because of the stimulus measures governments across the region began to fight the recession and because of low interest rates. Over the past year, billions of dollars in foreign funds flooded into Asia.

But as state spending slows down and as central banks start to tighten credit and raise interest rates, financial experts say investors may move from stocks to other assets, and that could lead to volatility in the stock markets.

Typically, Evans says, stocks suffer sharply during the first round of interest rate increases.

China's central bank says it is important for countries to coordinate stimulus exits because once major developed economies end those programs, capital flows may shift to other assets and economies. And that could mean asset prices, especially in emerging markets like China, may see volatility.

China's curbs on rapid credit growth have triggered selling in Hong Kong's stock market in recent weeks. The territory relied on the mainland's economic stimulus to help it ride out the global slowdown last year.

Hong Kong Monetary Authority Chairman Norman Chan says the city is at risk of capital flight, because more than $82 billion came in over the past year, mostly spent on stocks and property.

"The timing of exit strategy and stability of financial markets, all these will have an impact on the capital flow in the asset markets," said Chan.

Much of the money that flowed into Hong Kong came through stock offerings by Chinese companies. Chan says it will eventually be repatriated to the mainland.

"And therefore such funds would flow out of Hong Kong. But the pressure for capital inflows might persist if equity fund raising remains active and U.S. interest rates remain low," he said.

The danger comes if investors exit the stock market at the same time. But financial analysts say it is unlikely there will be a major disruption because Asia still offers better investment opportunities than do other markets.

Jan Brockmeijer, the deputy director of the monetary and capital markets department of the International Monetary Fund, said a recent briefing that the flow of funds into Asia appears to be "fairly stable." And, he says, not much of it is based on debt or invested in complex, and risky assets.

"The impression we have is that most of it is what they call real money investment and not so much leveraged in nature. That is an important consideration because the extent of leverage to some extent determines also the extent of contagion if markets start reversing," said Brockmeijer.

Many market analysts, such as HSBC's Evans, say investors go to markets where there is still potential for growth, and this year that could be in the U.S. and Britain or in smaller Asian markets like Taiwan.

http://www1.voanews.com/english/news/economy-and-business/After-Last-Years-Stock-Rally-Asia-Braces-for-Some-Volatility-84696092.html