Technical analysts consider the market to be 80% psychological and 20% logical.

Technical analysts consider the market to be 80% psychological and 20% logical. Fundamental analysts consider the market to be 20% psychological and 80% logical. 

Psychological or logical may be open for debate, but there is no questioning the current price of a security. After all, it is available for all to see and nobody doubts its legitimacy. 

The price set by the market reflects the sum knowledge of all participants, and we are not dealing with lightweights here. These participants have considered (discounted) everything under the sun and settled on a price to buy or sell. These are the forces of supply and demand at work. 

By examining price action to determine which force is prevailing, technical analysis focuses directly on the bottom line: 

• What is the price? 
• Where has it been? 
• Where is it going?

Even though there are some universal principles and rules that can be applied, it must be remembered that technical analysis is more an art form than a science. As an art form, it is subject to interpretation. However, it is also flexible in its approach and each investor should use only that which suits his or her style. Developing a style takes time, effort and dedication, but the rewards can be significant.

*****Long term investing based on Buy and Hold works for Selected Stocks

It sure beats FD rates and it is safe too.
http://spreadsheets.google.com/pub?key=tWENexpUrXS_RMxB7k73RgQ&output=html

Click: Dividend Yield Investing - Stock Selection is still the Key
http://myinvestingnotes.blogspot.com/2010/03/dividend-yield-investing.html

Click also:
How can the average investor improves his investment returns in stocks?

and here too:

Dividend-paying companies: major shareholders must be willing to share their profits with their investors through good dividend payments.

Chart Analysis: Technical analysis can be as complex or as simple as you want it.

Chart Analysis

Technical analysis can be as complex or as simple as you want it. The example below represents a simplified version. Since we are interested in buying stocks, the focus will be on spotting bullish situations.




Overall Trend: The first step is to identify the overall trend. This can be accomplished with trend lines, moving averages or peak/trough analysis. As long as the price remains above its uptrend line, selected moving averages or previous lows, the trend will be considered bullish.

Support: Areas of congestion or previous lows below the current price mark support levels. A break below support would be considered bearish.

Resistance: Areas of congestion and previous highs above the current price mark the resistance levels. A break above resistance would be considered bullish.

Momentum: Momentum is usually measured with an oscillator such as MACD. If MACD is above its 9-day EMA (exponential moving average) or positive, then momentum will be considered bullish, or at least improving.

Buying/Selling Pressure: For stocks and indices with volume figures available, an indicator that uses volume is used to measure buying or selling pressure. When Chaikin Money Flow is above zero, buying pressure is dominant. Selling pressure is dominant when it is below zero.

Relative Strength: The price relative is a line formed by dividing the security by a benchmark. For stocks it is usually the price of the stock divided by the S&P 500. The plot of this line over a period of time will tell us if the stock is outperforming (rising) or under performing (falling) the major index.

The final step is to synthesize the above analysis to ascertain the following:

• 
  
  Strength of the current trend.
• 
  
  Maturity or stage of current trend.
• 
  
  Reward to risk ratio of a new position.
• 
  
  Potential entry levels for new long position.
  

http://www.stockcharts.com/school/doku.php?id=chart_school:overview:technical_analysis

Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements.

Technical Analysis:  Techniques for predicting market direction based on

• (1) historical price and volume behaviour and 
• (2) investor sentiment.

Learn more here:
www.stockcharts.com
Select "Chart School."
www.e-analytics.com
Glossary of technical terms

www.prophet.net
The number one website on technical analysis according to Forbes and Barron's.

and:
www.chartpatterns.com
www.stockta.com


Technical analysts:  These investors essentially search for bullish or bearish signals, meaning positive or negative indicators about stock prices or market direction.


Dow Theory:  Method for predicting market direction that relies on the Dow Industrial and the Dow Transportation averages.

Learn more here:
www.dowtheory.com
www.thedowtheory.com


Support level:  Price or level below which a stock or the market as a whole is unlikely to fall.

Resistance level: Price or level above which a stock or the market as a whole is unlikely to rise.

Relative strength:  A measure of the performance of one investment relative to another.

Moving average: An average daily price or index level, calculated using a fixed number of previous days' prices or levels updated each day.

Hi-lo-close chart:  Plot of high, low and closing prices.

Candlestick chart:  Plot of high, low, open, and closing prices that shows whether the closing price was above or below the opening price.

Point-and-figure chart:  Technical analysis chart showing only major price moves and their direction.

'All cash' versus '80% cash and 20%' stock portfolio

When the market turned downwards recently, some bloggers declared that they had cashed out and were 100% in cash.  Yes, the market did turn down further, but then it rebounded quickly and to a higher level.

"When the market goes down, people think it will continue to go down."

"After the stock market has gone up, people think that the probability of the market continuing to go up is high."

If we slashed our stock-market exposure every time we felt uneasy, we would buy high, sell low and garner disastrous investment results.

Also these short-term events that we react to need to take into consideration two desirable yet conflicting goals - one goal is to avoid being poor and the other goals is having a shot at being rich. Each goal is desirable. The question is, how do you allocate your portfolio between these two goals.

Is being 100% in cash at any time a sensible action? Experts are unlikely to suggest an all-cash (or all-bond) portfolio. After all, a mix of 80% cash (or bonds/ and 20% stocks will have comparable portfolio gyrations, but with a significantly higher expected return. At the other extreme, advisers probably won't recommend an all-stock portfolio. They will plunk at least some money in conservative investments (cash or bonds), to temper the stock portfolio's price swings and provide money in an emergency.

Knees of Jelly or Nerves of Steel: Fixating on Risk Can Sink Your Investment Portfolio

As we settle on our portfolio's stock allocation, maybe we should forget about risk tolerance and instead focus on four other factors.

----

As you decide how much to invest in stocks, a lot supposedly rides on whether you have knees of jelly or nerves of steel. But this notion of risk tolerance is a dangerous idea.  For proof, look no further than our reaction to recent market movements.

Our tolerance for risk, it seems, has plunged along with the market. But clearly, that doesn't mean we should cut back on stocks. If we slashed our stock-market exposure every time we felt queasy, we would buy high, sell low and garner disastrous investment results.

• "After the stock market has gone up, people think that the probability of the market continuing to go up is high."  
• "When the market goes down, people think it will continue to go down." 

What to do? As we settle on our portfolio's stock allocation, maybe we should forget about risk tolerance and instead focus on four other factors.

1. Taking Aim: "This fixation on risk isn't getting us any-place. Instead, people should think about the goals they have." You might want a cash reserve to cover emergencies and help you sleep better at night. But you also want to amass enough for retirement, which means buying stocks in the hope of notching high returns. "One goal is to avoid being poor. The other goal is having at being rich. Each goal is desirable. The question is, how do we allocate our portfolio between these two goals?"

2. Hitting the Target: "People don't understand risk very well. Most people will underestimate the risk of bond investments, because they don't understand interest-rate risk. And even after the great performance of the past few years, they'll overestimate the risk of a diversified stock portfolio over the long term."

It is better for you to be educated about risk and figuring out what sort of investment returns you need to meet your goals. You then have a mix of stocks and conservative investments that you think will generate the returns you need. "At that point, you typically change your professed tolerance for risk, rather than changing your goals. You can see the tie-in between the portfolio's risk and the accomplishment of your goals. It provides the motivation to take risk and stay invested when things look grim." Still there is a downside to this approach. "Once you have the portfolio that is most likely to meet their future needs is an aggressive portfolio, you tend to ignore short-term risks. But the problem is, it's these short-term events that you react to."

3. Biding Time: As you decide how to divvy up your money between stocks and more-conservative investments, time is a critical factor. Even if you are an aggressive investor and you need high returns to meet your goals, stocks may not be a wise choice if you have a short-time horizon. "Any money needed in three years or less should be saved rather than invested, and that means Treasury bills, money-market funds and certificates of deposit. But your time horizon is longer than you think. Your kid may be three years from college. But you won't pay the last bill for seven years."

4. Pick a Reasonable Range: No matter what your age or professed risk tolerance, experts typically recommend that long-term investors have 50% to 90% in stocks. Sound like a lot in equities? Initially, you may not be comfortable with such hefty stock exposure. But with time, you should get used to the market swings. And the fact is, without the stocks, you may not amass enough to reach your goals. "You may indicate that you are very risk averse, but then you may not be able to afford to be that conservative."


Source: Jonathan Clements, The Wall Street Journal, June 6, 2000.

Mar 6, 2010

The Australia property fair

---

Yong: ‘We have excellent choices for landed properties with prices ranging from AUD350,000 onwards’.

If you are onsidering property investment in Australia, the ONE Australia Property Fair 2010 at Cititel Mid Valley, Kuala Lumpur, is the place to be this weekend.
There are a fine selection of residential and commercial units available for interested investors and property hunters.
Those coming to the show will also benefit from free consultation and be enlightened by knowledgable speakers at the property seminar.
It will showcase over 15 new prime projects in major cities such as Melbourne, Sydney, Perth as well as Queensland by established and reputable developers.
Various types of property will be presented, ranging from luxury waterfront projects to affordable students’ apartments as well as townhouses, landed properties and commercial units.
A special seminar titled “ONE Australia Property Seminar” will be held and will feature a series of interesting topics like Investing In Australia-Your Choice of State, Property Investment in Western Australia, Australia-Your Migration Options, Living & Studying In Australia as well as Transparencies and Clarity in Understanding Australian Property Investment & Finance.
Cyan Event Management had brought in a group of established developers and real estate agencies from Australia to showcase their property projects to Malaysian investors last July at the ONE Australia Property Fair in Kuala Lumpur and Penang.
Cyan Management managing director Charles Yong said Australian properties were much sought after by Asian investors, including Malaysians.
He said most local businessmen perceived the foreign property investment as ideal.
Decision factors include proximity, value, capital growth, currency exchange, living standards, education system and political stability.
It was highlighted recently that the number of Malaysians migrating or going to Australia for tertiary education and career opportunities has increased over the past year.
This is a good indication for the demand in Australian properties remaining strong in years to come.
“We have excellent choices for landed properties with prices ranging from AUD350,000 onwards as well as affordable units in Melbourne below AUD180,000. “Parents can check out good accommodation units for their children from the list of developers, who among them will be releasing a new phase residential project for Malaysian investors at the fair,” said Yong.
He said the exhibitors would be able to provide assistance and useful information during the fair.
For enquiries on the fair, contact Cyan Event Management at 03-7981 1725, 7980 8950 or email at oneaustproperty@gmail.com or visit www.oneaustraliapropertyfair.com.

Having a concrete plan to financial freedom

Saturday March 6, 2010
Having a concrete plan to financial freedom
By FINTAN NG


fintan@thestar.com.my

Financial freedom is a distant dream for the vast majority of working people, it is made almost unattainable by the generally low wages and inflationary pressure that many here have to struggle with.

An observer says it has become increasingly difficult to rely on just a day job to achieve that freedom as wages here have not kept up with inflation.

This person has a day job and several side incomes including running a dragon fruit farm and being involved as an agent in the Malaysia My Second Home programme.

Some, like Ginger Leong, say “forced savings” is their path to financial freedom. However, she acknowledges that whatever is saved now may not be enough due to inflation and other commitments.

Many also find it hard to even start on the path to financial freedom as they are confronted by a plethora of investment instruments available as well as the endless numbers of books and blogsites on financial management.

What most people need is guidance on how to sift through all the information out there and come up with what Whitman Independent Advisors Sdn Bhd managing director Yap Ming Hui says should be a “down-to-earth” and sensible view on achieving these goals.

He tells StarBizweek that most people “dream of achieving financial freedom” but “they don’t have a workable or concrete plan”.

Yap, who wrote a book, Roadmap to Financial Freedom, says defining goals – a “self-defined good life” for attaining financial freedom – is important.

“Not everyone can become wealthy but everyone can achieve financial freedom, however those who want to achieve it must have a roadmap as a guide to know what is the optimum investment that needs to be made,” he says, adding that even people with average assets and incomes can attain their financial goals.

Yap defines financial freedom generally as “an optimum financial position whereby your wealth is optimised to match your optimum financial needs and wants”. In this respect, “wealth” can also be defined as “assets”.

He realises that individuals have different goals, needs and wants but says this can be simplified to two components for the purpose of mapping out a roadmap - optimisation of assets and identifying and managing financial needs and wants.

Yap says needs and wants should not be viewed strictly from the financial context alone but from a bigger picture - the higher context of life.

“Most people will just concentrate on optimising their wealth but just concentrating on making more money is not true financial freedom if needs and wants are not defined,” he says.

Yap says when a person embark on the path to achieving financial freedom, some of the questions to ask are: How far is that person from their goals? If situations come around that will impact finances, what will that person do? What’s a person’s next move suppose to be?

Standard Financial Planner Sdn Bhd chief executive officer Alfred Sek says that freedom has been achieved as long as there is no stress from financial problems or commitments.

“Achieving it is a gradual process, people adjust as they go along, so if they earn more then they adjust their goals, similarly if they earn less than they adjust too,” he says.

Sek says in his experience advising clients on their finances, flexibility is important. “There are no real yardsticks, personal situations and needs are different,” he says.

http://biz.thestar.com.my/news/story.asp?file=/2010/3/6/business/5757178&sec=business

By YVONNE TAN | Mar 6, 2010

PPB to expand flour mill, property businesses

---

yvonne@thestar.com.my

KUALA LUMPUR: Diversified company PPB Group Bhd hopes to utilise its RM1.29bil in proceeds from the sale of its sugar business to expand its existing businesses of flour milling and property.


Its managing director Tan Gee Sooi said after paying its shareholders about RM600mil in special dividends from the total sum, the remaining would be used to build more flour mills overseas as well as to enlarge its landbank here.

“Out of Malaysia, for example in Indonesia where the population is huge and consumption is growing, there are a lot of opportunities for the flour milling business while for property, we will look for suitable landbank here,” Tan said after chairing a press and analyst briefing here yesterday.

Based on the group’s latest financial results for the year ended Dec 31, 2009, 20.71% of operating profit came from its grains trading, flour & feed milling segment while the property segment contributed a mere 2.77%.

The largest contributor to operating profit was the sugar and cane segment, coming in at 62.85%.
PPB Group proposed last October to sell its entire stake in two sugar units and land used for sugar cane cultivation to Federal Land Development Authority for RM1.29bil.

At the same time, its 49%-owned associate Grenfell Holdings Sdn Bhd also said it would sell its stake in plantation group and sugar refiner Tradewinds (M) Bhd for RM207.53mil.

With the sugar business out of the group’s operations, Tan expects this year’s financial performance to be “satisfactory”, backed by contributions from its grains trading, flour & feed milling segment, particularly from its Indonesia operations which Tan said “has expanded very fast”.

PPB recently commissioned a 1,000-tonne flour mill there. Tan said production capacity for the plant was expected to reach 65% by year-end and that the company had plans to establish more mills there.

Analysts are generally positive on the company’s Indonesia plan given that wheat prices have come off 40% from its peak and there is no controlled pricing in Indonesia.

On new downstream activities, Tan said PPB expected to commission a RM105mil bakery in Pulau Indah by the end of this year, producing loaf bread and subsequently a variety of buns.

It also hoped to form joint ventures to go into the frozen food business in Japan, Tan said.

PPB Group Bhd’s net profit for the fourth quarter Dec 31, 2009 fell 3.2% year-on-year to RM351.53mil as lower selling prices of flour resulted in lower revenue contribution from its grains trading, flour and feed milling segment.

However, net profit for the entire year rose 25.6% to RM1.62bil mainly due to higher contribution of RM1.21bil from its 18.4% associate Singapore-listed Wilmar International Ltd.

Dividend Yield Investing - Stock Selection is still the Key

Mr has left a new comment on your post "Dutch Lady posts 4Q net profit of RM16.05m, warns ...":

Dear Mr bullbear,

Sorry to write to you here, but I don't know how to reach you.

....I want to ask you if you can recommend say 5 stocks with High Dividend Yield that you can recommend to invest for long time.

I am a 43 year old family man with a full time job and no interest nor time to monitor the market. Maybe once or twice a month.

My goal is to just beat the fixed term deposit rate. Now is so low, only 2% to 2.5%. Very hard to earn passive income like this.

I need some real solid recommendation, stocks that I can hold for a long time. A friend swears by PBBANK. But I am concerned the price may be too high now.

I plan to start with RM50k first. Maybe split into 5 stocks with RM10k each.

What do you think of PBBANK? What is a good entry price? Can you recommend a few others that pay high dividend for me to consider? I appreciate the final decision is mine and mine alone, and I will not blame you for any losses. But please explain your reasons.

Thanks and kindest regards,

Mr Teoh

-----

Dear Mr. Teoh,

It is not easy to give you advice other than some very general ones.  You will find enough materials in this blog to answer your questions.

Since you asked, I thought a better approach would be for me to collate some examples to help you answer your own questions. 

Click here:  It sure beats FD rates and it is safe too.
http://spreadsheets.google.com/pub?key=tWENexpUrXS_RMxB7k73RgQ&output=html

Warren Buffett often looks at the stock he buys as equivalent to a bond.  The cost price for the stock is the 'equivalent' to the price paid for a bond.  The earning yield of the stock is the 'equivalent' to the coupon rate of a bond.

He likened his stock as equity bond.  Unlike a bond that pays a fixed coupon rate for its lifespan and repayment of the initial invested capital, an equity bond (stock) if chosen well, can deliver increasing earnings (and dividends) over many years.  Its share price likewise will appreciate with its increasing earnings.

The trick in dividend yield investing is still to focus on the earnings and earnings growth potential of the company.  All these are embodied in a simple phrase, that is, choose and only invest in good high quality companies bought at bargain or fair prices.

Regards.


Click:

Dividend-paying companies: major shareholders must be willing to share their profits with their investors through good dividend payments.

http://dividendsvalue.com/

• 
  

  Div-Net Associate Member

  
  Dividends Value
  The Dividend Guy
  Dividend Growth Investor
  Barel Karsan
  Dividend Tree
  Buying Value
  Associate Members

How can the average investor improves his investment returns in stocks?

How can you improve your investment returns in stocks?

The adage, "Buy low and Sell high" and pocket the profit, is well known. I like to also remember it this way: "Never buy high and Never sell low".
The subsequent discussion applies to investing in high quality good stocks bought at a bargain only.

How can the average investor improves his investment returns in stocks? More specifically how can an average investor improves his return to 10% annually? Even better, to above 15% annually and consistently? Let us examine some factors affecting investment returns.


1. Stock selection
This is important. You wish to have a stock that gives you a good total sustainable return over many years. You will need to invest in those stocks with a high ROE of at least 15% or more. Also, these stocks should have good earnings growth (EPS growth) that is consistent and sustainable. Such companies run businesses with a huge competitive advantage over their competitors with a large moat.


2. Buy when the selected stock is selling at a low price.
This is the better way to get superior return - the potential return is higher with concomitant lower risk. Invest in "value stocks". A good portfolio should always have cash available to benefit from a bear market or a correction or panic sell in a bull market/or a specific stock.


3. Taking profit
Profit should be realised from sales of stocks in the following situations:
(I) when the stock is obviously overpriced, or
(II) when the sale of the stock frees the capital to be reinvested into another stock with potentially better return.

Not taking profit in the above situations can harm your portfolio and compromise its returns. In other circumstances, let the winners run.

Underperforming stocks should also be sold early. Hanging onto underperforming stocks is costly too. There is the opportunity cost that the capital can be better employed for higher return. Also, hanging onto these lack-lustre stocks reduces the overall return of your portfolio.


4. Reducing serious loss
When the fundamentals of a stock have deteriorated, sell to protect your portfolio. This decision should be make quickly based on the facts and situations, in order to keep your losses small.


5. Diversify, but not overdoing it
According to Buffett, adding the 7th stock to the portfolio reduces the return without reducing the overall non-systemic risk. of the portfolio. Select the best 6 stocks. If you need to add money to your portfolio, buy more of these preexisting stocks when they are offered at a good or bargain price. If you identify a better stock to invest, perhaps, this should replace one of the preexisting stocks in the portfolio.


6. Asset allocate according to your risk taking ability

It is perplexing to know of investors whose days are affected by the swings in the market. You should not bet your total networth into the stock market. Allocate the amount that you are willing to risk.

Many long-term investors are always riding on a significant amount of gains. This means that they will only lose their capital in very unlikely extreme situations.


7. So far so good. The hardest part: getting wired like Buffett!

To invest like what Buffett, you need to be knowledgeable and able to execute 'coldly' (or cooly) without being affected by emotions. These are among the harder skills to master. Have you wondered what drives this blogger to write on investing? Through writing, rather than lurking, you can focus on the facts and solidify your knowledge, philosophy and strategy.

Admittedly, there is no single philosophy or strategy; but you should have one to guide your investing. It prevents you from over-reacting to emotions and circumstances, that may harm your portfolio and investing returns. As this discussion assumes the portfolio contains only good quality stocks, it prevents you from "Buying high and Selling low" due to falling prices in the market. It may allow you to benefit hugely from the volatilities and follies of the market; making volality your friend.

Understanding and mastering this field of behavioural finance is yet another challenge to higher investment returns for the investors.

Who's Number One? Is Warren Buffett the greatest investor of all time?

Is Warren Buffett the greatest investor of all time?  That question can never be settled.  But a good case can be made for Mr. Buffett.

The table lists a few of the most successful investors in history.

http://spreadsheets.google.com/pub?key=tMLFgBSmLlxG3SxBnf_3eFg&output=html

A couple of them - George Soros and Peter Lynch - show higher compound average annual returns than Mr. Buffett's.  But that doesn't truly settle the debate.

Mr. Lynch, for example, compiled a sparkling 29% annual return as manager of the Fidelity Magellan Fund.  At first blush, that seems to top Mr. Buffett's 27% annual return.  However, during the 13-year stretch when Mr. Lynch was burning up the track, Mr. Buffett did even better:  up 39% a year, according to Morningstar, Inc.

Mr.  Soros, manager of Quantum Fund, also has a higher annual return than Mr. Buffett.  But Mr. Buffett has maintained his performance for a longer time.  Also, notes Edward Macheski, a money manager in Chatham, N.Y.,  Mr. Buffett racked up his king-sized returns without much use of leverage, or debt, to magnify investment results.  Hedge funds, such as those run by Mr. Soros, Michael Steinhardt, and Julian Robertson, often use heavy leverage.

The Buffett record shown in the table is a composite.  From 1957 to 1969, his main investment vehicle was Buffett Partnership Ltd.  In 1965, the partnership acquired a controlling interest in Berkshire, which became Mr. Buffett's main vehicle in 1970.

Source:  John R. Dorfman, The Wall Street Journal, August 18, 1995.

Can you, or indeed anyone, consistently beat the market?

Can you, or indeed anyone, consistently beat the market?

In other words, is the market efficient?  This is a question that every investor needs to think about because it has direct, practical implications for investing and portfolio management.



If you think the market is relatively efficient,

• then your investment strategy should focus on minimizing costs and taxes.  
• Asset allocation is your primary concern, and you will still need to establish the risk level you are comfortable with.  
• But beyond this, you should be a buy-and-hold investor, transacting only when absolutely necessary.  Investments such as low-cost, low-turnover mutual funds make a lot of sense.  
• Tools for analysing the market, particularly the tools of technical analysis, are irrelevant at best.  
• Thus, in some ways, the appropriate investment strategy is kind of boring, but it's the one that will pay off over the long haul in an efficient market.

In contrast, if you think the market is not particularly efficient,

• then you've got to be a security picker.  
• You also have to decide what tools - technical analysis, fundamental analysis, or both - will be the ones you use.  
• This is also true if you are in the money management business; you have to decide which specific stocks or bonds to hold.

In the end, the only way to find out if you've got what it takes to beat the market is to try.

• Be honest with yourself:  You think you can beat the market; most novice investors do.  Some change their minds and some don't. 
• As to which tools to use, try some and see if it works for you.  If it does, great.  If not, well, there are other tools at your disposal.  

Six Significant Dividend Increases

Six Significant Dividend Increases

By: Dividend Growth Investor   Monday, March 01, 2010 9:50 AM

Any company could afford to boost distributions in a single year. Any type of business could also have a high yield, especially if it distributes all of its cash flows to shareholders. It takes a special kind of a business model to afford a proper balance between investing back into the business and distributing excess profits to shareholders. It is even more exciting when those distributions have been increased regularly for over ten consecutive years. I have highlighted six dividend stocks each of which has consistently raised distributions for over two decades. Altria Group, Inc. (MO: 20.4, 0.06), through its subsidiaries, engages in the manufacture and sale of cigarettes, wine, and other tobacco products in the United States and internationally. The company's board of directors raised its quarterly dividend by 2.90% to 35 cents/share. This is the 43rd consecutive dividend increase for Altria Group. The only reason why the company is not on the dividend aristocrat list is because its dividend payment is lower due to the spin-off of Phillip Morris International (PM: 50.65, 0.68) in 2008 and Kraft Foods (KFT: 29.06, 0.07) in 2007. The company does have a policy to return approximately 75% of earnings to shareholders in the form of cash distributions. Stock currently yields 7%. (analysis)

Kimberly-Clark Corporation, (KMB: 60.01, 0.02) together with its subsidiaries, engages in the manufacture and marketing of various health care products worldwide. The company's board of directors raised distributions by 10% to 66 cents/share. This is the 38th consecutive annual dividend increase for this dividend aristocrat. The stock yields 4.40%.


The Chubb Corporation (CB: 51.21, 0.09), through its subsidiaries, provides property and casualty insurance to businesses and individuals. The company raised its quarterly dividend by 5.7% to 37 cents/share. This was the 45th consecutive annual dividend increase for this dividend aristocrat. The stock currently yields 2.90%.

CenturyTel, Inc. (CTL: 34.13, -0.44), together with its subsidiaries, operates as an integrated communications company. The company raised its quarterly distributions by 3.60% to 72.50 cents/share. This increase would represent the 37th consecutive year where this dividend aristocrat has boosted annual distributions to shareholders. The stock currently yields 8.50%.

Piedmont Natural Gas Company, Inc. (PNY: 26.38, -0.12), an energy services company, distributes natural gas to residential, commercial, industrial, and power generation customers in portions of North Carolina, South Carolina, and Tennessee. The company boosted distributions by 3.70% to 28 cent/share, marking the 32nd consecutive annual dividend increase. This high yield dividend aristocrat yields 4.30%.

Donaldson Company, Inc. (DCI: 42.37, 0.1), together with its subsidiaries, engages in the manufacture and sale of filtration systems and replacement parts worldwide. The company's board of directors raised distributions by 4% to 12cents/share marking the 24th consecutive year of dividend increases. This dividend achiever currently yields 1.20%.

I view Kimberly-Clark (KMB: 60.01, 0.02) and Chubb (CB: 51.21, 0.09) as attractively valued stocks. I plan adding to my position in Chubb (CB) this month. Piedmont Natural Gas Company (PNY) looks like an interesting company for further research. Altria (MO: 20.4, 0.06) and CenturyLink (CTL: 34.13, -0.44) are two high yielding dividend growth stocks, which also spot high dividend payout ratios. I would choose tobacco over telecom however, because once you are addicted to it is difficult to stop using the product. With telecom you could easily cancel your telephone and get a cell phone or simply use Skype instead. Donaldson (DCI) does seem like a company that could be included in the dividend aristocrat list over the next one or two years. The problem is the low current yield, the anemic dividend growth rate and the high price/earnings multiple of 27.

http://www.istockanalyst.com/article/viewarticle/articleid/3904657

Malaysia Increases Interest Rate as Recession Ends

Malaysia Increases Interest Rate as Recession Ends
March 04, 2010, 6:33 AM EST


By Shamim Adam

March 4 (Bloomberg) -- Malaysia’s central bank raised its benchmark interest rate for the first time in almost four years, saying record-low borrowing costs were no longer warranted as the economy emerges from recession and inflation accelerates.

The ringgit rose as economists predicted central bank Governor Zeti Akhtar Aziz will continue to raise rates. Asia is leading the global recovery from the worst recession since World War II and Australia, China, India and Vietnam have tightened monetary policy to fight inflation and avert asset bubbles.

“We should expect a few more upward adjustments,” Suhaimi Ilias, chief economist at Maybank Investment Bank Bhd. in Kuala Lumpur, said after the decision. “The central bank has the luxury of time to raise rates gradually. Other central banks will look at domestic conditions before making their moves.”

Indonesia’s central bank left its reference rate at a record-low 6.5 percent today. Australia this week raised its benchmark for the fourth time in five meetings, by 0.25 percentage point to 4 percent.

“The overnight policy rate was reduced to historic lows in early 2009 as a key measure to avert a severe and fundamental economic downturn,” the central bank said in a statement today. “These conditions no longer prevail. The domestic economy has since improved significantly and is now on a path of recovery.”

Ringgit Rises

Malaysia’s ringgit rose to 3.3585 a dollar after the rate decision, the strongest level in six weeks. The currency has gained 1.5 percent this year, making it the best performer after the Thai baht in Asia outside Japan.

“The Monetary Policy Committee decided to adjust the overnight policy rate towards normalizing monetary conditions and preventing the risk of financial imbalances that could undermine the economic recovery process,” the central bank said. “The stance of monetary policy continues to remain accommodative and supportive of economic growth.”

Asian policy makers risk creating asset bubbles and fueling inflation by keeping interest rates “too low for too long” in their attempts to boost domestic demand, Standard & Poor’s said in a report yesterday.

Malaysia’s Zeti has said in the past month that any increase in rates should be viewed as a “normalization” and not a “tightening.”

Exports Climb

Southeast Asia’s third-largest economy emerged from its first recession in a decade last quarter, and Prime Minister Najib Razak has said he expects this year’s expansion to beat the official growth forecast of as much as 3 percent.

Malaysia’s exports may climb this year at twice the 3.5 percent pace predicted earlier as the global recovery revives overseas sales of Sime Darby Bhd.’s palm oil and Intel Corp.’s computer chips, International Trade and Industry Minister Mustapa Mohamed said this week.

Before today, the benchmark rate was at its lowest level since it was introduced in April 2004, and had been unchanged since February last year. Malaysia’s borrowing costs are among the lowest in Asia, below the Philippines’ 4 percent benchmark.

The benchmark FTSE Bursa Malaysia KLCI Index fell 0.2 percent at the close today.

Attract Capital

“A rate increase may be good to attract some capital inflows,” Geoffrey Ng, who manages $1.2 billion of assets as chief executive officer at HLG Asset Management Sdn. in Kuala Lumpur, said before the decision. “The foreign-exchange reserves have been rather flattish in recent months and the country has been facing quite a bit of capital outflows. On the flipside, the risk is that the equity market will take it in a wrong way.”

Malaysia’s consumer prices rose for a second month in January, climbing 1.3 percent from a year earlier.

Inflation may accelerate later this year as the government studies a revamp of its fuel subsidy. Malaysia aims to come up with a new fuel-subsidy system before presenting the nation’s annual budget in October, Domestic Trade and Consumer Affairs Minister Ismail Sabri Yaakob said today.

Prices will increase “gradually” this year and inflation should remain “moderate,” the central bank said. It’s forecast for inflation takes into account possible adjustments in “administered prices” and rising global commodity and food prices, it said.

Bank Negara policy makers next meet to review interest rates on May 13. The central bank kept the statutory reserve requirement unchanged today. The measure determines the amount of money lenders need to set aside as reserves.

--With assistance from Michael Munoz in Hong Kong and David Yong in Singapore. Editors: Stephanie Phang, Lily Nonomiya

http://www.businessweek.com/news/2010-03-04/malaysia-increases-interest-rate-as-recession-ends-update1-.html

• MARCH 4, 2010, 10:35 A.M. ET

Malaysia Raises Rates 

By ALEX FRANGOS

In a sign of the rapidly improving economic fortunes across Asia, Malaysia's central bank raised its benchmark interest rate Thursday and noted the "economic recovery is firmly established."

Malaysia is the first of the medium-sized, export-oriented economies in Asia to raise its target interest rate. Its move will be closely watched in the region, where policymakers have moved gingerly away from the extraordinary policy stimulus put in place during the global financial crisis.

Similar macroeconomic conditions in Taiwan, South Korea, Thailand, Singapore are likely to lead to rate hikes in coming months. All have benefited from their exposure to China and the restocking of inventory in the U.S. and Europe, especially for technology-related goods. Indonesia's central bank kept its interest rate steady on Thursday, saying that inflation remains under control.

"Now that Malaysia has moved, other central banks in the region may feel more comfortable doing so as well," said Matt Hildebrandt, economist with J.P. Morgan in Singapore. He added, though, that tightening would happen only gradually amid concern about the global economic outlook.

Malaysia's rate increase comes after China and India tightened credit through raising bank reserve requirements. Australia, whose economy is heavily reliant on Asian demand, has raised its benchmark rate four times since October, most recently on Tuesday. Vietnam raised rates in December to fight off speculation on its weakening currency.

In recent weeks, Malaysia and other area economies including China, Taiwan and Thailand, announced stronger than expected fourth quarter growth, surprising government economists and hastening the need to return interest rates to more normal levels. Prices have begun to rise across Asia. That combined with the ultra-low interest rates, could spark a dangerous bout of inflation.

"Growth is expected to strengthen further," Bank Negara Malaysia said in its statement accompanying the quarter percentage point hike in the benchmark overnight policy rate, to 2.25%. "Prices will gradually increase during the year," it said, while predicting that "inflation is expected to remain moderate." The bank noted the risks of "rising global commodity and food prices."

Thursday's hike was the first move by Malaysia's central bank since it dropped rates for the final time in February 2009. It was the first rate increase since 2006.

The tightening of monetary policy in the region highlights the gap between recoveries in emerging economies, especially in Asia, and the developed world, where interest rates are expected to remain at rock bottom levels for several more months if not longer. That dichotomy could lead to investors to shift money into the higher interest rates of Asian currencies and away from the U.S. dollar, the euro and the yen.

In the policy statement, the Malaysian central bank cited the "continued improvement" in exports, "particularly from the regional economies," an allusion to the strength of trade within Asia. Traditionally, Asia's export-led economies have relied substantially on demand from the U.S. and Europe. Malaysia's economy grew 4.5% in the last quarter of 2009 compared to the year earlier, helped along by strong consumer spending and trade.
While that relationship between the consumer in the developed world and the producers in the emerging world remains intact, there are signs that growing demand from consumers and businesses within the emerging markets, especially in China, has the potential to fill in for the sluggish buying power among Western consumers.

"A higher proportion of our trade is now with the region," said Malaysia's central bank governor, Zeti Akhtar Aziz, in an interview last week. She said more and more of the products Malaysia ships to China are for Chinese consumers, rather than components that will be assembled into goods for Americans and Europeans. "That's a new development and it has intensified," she said.

Write to Alex Frangos at Alex.Frangos@wsj.com

http://online.wsj.com/article/SB10001424052748704187204575101031978300278.html?mod=googlenews_wsj  

What BNM's normalisation of policy means
http://tauke-saham.blogspot.com/2010/03/what-bnms-normalisation-of-policy-means.html

Buffett's tips for new investors

3/2/2010 12:01 PM ET
Buffett's tips for new investors

The world's most famous investor lays out his basic principles in this year's annual letter to Berkshire Hathaway shareholders.

By The Wall Street Journal

Every few years, critics say Warren Buffett has lost his touch. He's too old and too old-fashioned, they claim. He doesn't get it anymore. This time he's wrong.

Quiz: How much risk can you tolerate?
It happened during the dot-com bubble, when Buffett was mocked for refusing to join the party. And it happened again last year. As the Dow Jones Industrial Average ($INDU) tumbled below 7,000, Buffett came under fire for having jumped into the crisis too early and too boldly, making big bets on Goldman Sachs (GS, news, msgs) and General Electric (GE, news, msgs) during the fall of 2008, and urging the public to plunge into shares.

Now it's time for those critics to sit down for their traditional three-course meal: humble pie, their own words and crow.

On Saturday, Buffett's Berkshire Hathaway (BRK.A, news, msgs) reported that net earnings rocketed 61% last year to $5,193 per share, while book value jumped 20% to a record high. Berkshire's Class A shares, which slumped to nearly $70,000 last year, have rebounded to $120,000.

Those bets on GE and Goldman? They've made billions so far. And anyone who took Buffett's advice and invested in the stock market in October 2008, even through a simple index fund, is up about 25%.

This is nothing new, of course. Anyone who held a $10,000 stake in Berkshire Hathaway at the start of 1965 has about $80 million today.

How does he do it? Buffett explained his beliefs to new investors in his letter to stockholders Saturday:

Inside the Berkshire Empire


Stay liquid. "We will never become dependent on the kindness of strangers," he wrote. "We will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity. Moreover, that liquidity will be constantly refreshed by a gusher of earnings from our many and diverse businesses."

Buy when everyone else is selling. "We've put a lot of money to work during the chaos of the last two years. It's been an ideal period for investors: A climate of fear is their best friend. . . . Big opportunities come infrequently. When it's raining gold, reach for a bucket, not a thimble."

Don't buy when everyone else is buying. "Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance," Buffett wrote. The obvious corollary is to be patient. You can only buy when everyone else is selling if you have held your fire when everyone was buying.

Value, value, value. "In the end, what counts in investing is what you pay for a business -- through the purchase of a small piece of it in the stock market -- and what that business earns in the succeeding decade or two."

Don't get suckered by big growth stories. Buffett reminded investors that he and Berkshire Vice Chairman Charlie Munger "avoid businesses whose futures we can't evaluate, no matter how exciting their products may be."


Diversify your portfolio
Most investors who bet on the auto industry in 1910, planes in 1930 or TV makers in 1950 ended up losing their shirts, even though the products really did change the world. "Dramatic growth" doesn't always lead to high profit margins and returns on capital. China, anyone?

Understand what you own. "Investors who buy and sell based upon media or analyst commentary are not for us," Buffett wrote.

"We want partners who join us at Berkshire because they wish to make a long-term investment in a business they themselves understand and because it's one that follows policies with which they concur."

Defense beats offense. "Though we have lagged the S&P in some years that were positive for the market, we have consistently done better than the S&P in the 11 years during which it delivered negative results. In other words, our defense has been better than our offense, and that's likely to continue."

Timely advice from Buffett for turbulent times.

This article was reported by Brett Arends for The Wall Street Journal.


http://articles.moneycentral.msn.com/learn-how-to-invest/buffetts-tips-for-new-investors.aspx

icapital.biz is 'unpopular' and 'unloved' during this bull run!

29.7.2009:  NAV per share of icapital.biz was RM1.87; icapital.biz share price was around RM1.80.


3.3.2010:  NAV per share of icapital.biz was RM2.08; icapital.biz share price closed at RM1.72.  This price was a 17.3% discount to its NAV.

.  
Also read: Closed-ended funds: Why a discount, anyway?

Learn to be long-term greedy when others are short-term fearful.

The bullish lesson?
Learn to be long-term greedy when others are short-term fearful. Going against the herd is never easy, but if you truly believe in a company's long-run demand story, major downturns can offer the very best buying opportunities. 

As Warren Buffett reminds us, "Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

The bearish takeaway? 

There's just no substitute for knowing a business model cold.  The only way to reasonably predict a company's fortunes is to know exactly what sort of strategies management is pursuing, and questioning if they can actually create value by doing so.

As Buffett once wrote, "Equity Investment Strategy = Evaluate the Business in Its Entirety."

The final Foolish move
Investors often focus strictly on stock price movements, without realizing that developing a proper stock-picking process counts most.

http://www.fool.com/investing/general/2010/03/03/tuesdays-hottest-stocks.aspx