Monday, 30 March 2015

KL: Sell SHH

I started collecting SHH since May 2014. This process went on until September. I once said that SHH is another INGRESS. This is why I can hold it "tightly" even during the "adjustment" (some people called it small bear) in Oct and Dec 2014, because I have confidence in SHH.

The waiting has paid off. All returns comes in 2 weeks time. But the money has stuck there for 10 months. Maybe I shouldn't ask for more. Considering the whole period, the return is still stellar.

I actually wanted to wait for "open flip" (i.e. 100% return). But the price shot up too abruptly, causing the candle to be out of the upper BB band. This always followed by a pull back, with no exception to any stock.

SHH


Today SHH opened high at 1.56, reached a high of 1.58 and closed at 1.44. A clear adjustment sign is coming. I didn't watch the market at the opening, but soon after the market opened I realized that maybe I should have a look at SHH. It opened high, and I know that I should sell it no matter how. I sold all my shares between 1.50-1.53 in the morning, a decision that looks to be correct at least from now.

This does not mean that SHH will stop like that. A typical trend would be adjusting for a few days (which nobody knows), and then continue its uptrend. Depending on the situation, perhaps I will buy back at a lower price.

I am delighted to have made the right decision. The main reason is, of course, a pull back is inevitable and imminent. The second reason is, I've found another share to buy.

Saturday, 21 March 2015

KL: INARI-WB, a surprise match

The experience in the past few months has let me learnt to only look at the market after it is closed. It has become my habit now.

As I opened my portfolio few days ago, I was surprised to see an additional stock in my portfolio. I was shocked at first, because I didn't make any queue at all on that day. Soon after that I realized that my queue using “Good-till" function has matched at my entry price.

INARI-WB, 1.40. I queued this price last week, didn't think that it would really match. I like this kind of surprise, a transaction which is matched without any expectation and even without my prior notice.

Note: Good-till function, is a function that allows you to queue for a counter for up to a month without entering the queue manually everyday. HLeBroking actually possesses this function. I emailed HLIB sometime ago to enquire for this function. The efficiency of HLIB is absolutely impressive. Soon after that the representative called me and mentioned the risk of using the function "Good till". I said that I understand that and the representative will activate this function for my account. It was available to use in my account since then. When I have free cash, I can queue for a stock at a low price just for fun. Sometimes it really matches, you never know.





Sunday, 15 March 2015

KL: SKPETRO, another downtrend

Crude oil price has been plummeting in the past few months. It has made wide coverage in all kinds of media.  The reason?  All others reasons reported on the media, e.g. over supply, decrease in demand are excuses. Except manipulation, give me a reason how a commodity price can drop 50% in 3 months. The motive? Ask Wall Street.

I couldn't care less about crude oil prices, it has nothing to do with me at the moment. Anyway, I was planning to buy SKPETRO (a component stock in KLCI) in Jan. Back then, the crude oil price was trading at about USD 50/ barrel (I used Brent Crude Oil as reference). Looking back in Dec 2014, that was the most "scary" sentiment you could find in market at that time. Everybody was talking about oil price could go even lower, that the market will crash etc.

The most funny view regaring this that I have ever heard of, is a so-called "financial analyst" who was "sharing his opinion" on the TV during the business section of a news programme. He said that in 2008, there was a subprime mortgage crisis, maybe in 2015 we will have the "subprime crude oil crisis". I really LOL when I heard this, simply because of the fact that if a crash is really coming, would the media let you know earlier?

I do not buy any of these comments. So, I was queuing for SKPETRO, hoping for a rebound. My rationale is simple, I don't believe it can go further down to USD 45/ barrel; but if the oil price rebounds, SKPETRO will follow.

BrentCruideOil Price
(Picture print-screened from Nasdaq.com)

But my queue didn't match at that time. Soon after that, oil price has rebounded  (recover?)  to over USD 60 . And SKPETRO follows the trend, climbing nearly 50% in 2 months.

SKPETRO rebound


I don't like to chase high. So I thought OK, it is what it is, seeking for another opportunity. But then, on 4th Mar, an announcement was released, regarding the designation of a vice chairman. Had he been any other person, the impact would be minimal. But the person of interest in this case has a last name of Mahathir, so you know his influence. The next trading day, SKPETRO dropped 7.2% with volume. Last Friday, crude oil price plunged 4%. Does this imply another wave of oil drop is coming?

This may be a second chance for me to enter. My patience has really paid-off. This time my appetite has gone bigger. I am aiming at C12 (SKPETRO has good fundamental), a new call warrant by CIMB, with the nicest exercise price, lowest premium and 1 year maturity date. But the trend of SKPETRO is not looking good. So I am just looking at a short term rebound trade. If SKPETRO breaks RM 2.00 and going further down, what I will be aiming is a big drop with volume, and that may be a chance to catch for a rebound.

Sunday, 22 February 2015

Currency talk

USD:
"A while" ago I was so innocent and thought that the Kingdom of USD as the international currency will "terminate": to be replaced by CNY, thinking of how fast CN grows. I was wrong. This will not happen, at least for years to come.

In 2008 when US was trapped in the subprime crisis, they "invented" a bond buying plans, or the so-called "Quantitative Easing" -- as the euphemism goes, to stimulate the economy. Six years after the US stimulating programme, I do not see a single sign of weakness in USD. In fact, it becomes even stronger.

AUD:
The experience of living in AU will let you aware that AUD is not a strong currency. Recently, Reserve Bank of Australia (RBA) cut interest rates to a record low of 2.25%. AUD has been depreciating against USD for some time since 2013, because the head of RBA  wants to see AUD to trade at 75 US cents, which I see as a really wise move, because AUD has no "qualification" to trade high (i.e. 1:1 ratio) against USD.

Strangely, many Malaysians mindset still fixed at the era of AUD 1: MYR 3.00+, or hoping that it will soon go back to 1:3+. I am sorry but this is not going to happen. Many people (Malaysians residing in Australia) do not like to hear this, I do not like to hear this as well, but it is a fact. The day of AUD 1: MYR 3.00+ is over. Now it is only AUD 1: MYR 2.80. And this is still with a recent rapid depreciation of MYR. If you really want 1:3 back in the days of 2012, you will have to hope for a quicker depreciation of MYR than AUD. But even if that happens, how worthless is MYR at that time? And how much you could do with it?

A friend of mine said he wanted to put AUD in bank to wait for it to go up. Frankly, how stupid can this thought be? Going back up? No way.

SGD:
Whenever you see newspaper headlines of "MYR hits lowest in XX months/year against SGD" etc, you will see people saying the day of SGD 1: MYR 3.00 is coming next month/year. Please, even with the most basic knowledge of forex, one will know that 1:3 is not happening in at least years. Having said that, SGD is a rather strong currency in my opinion.

EUR:
The European Central Bank has announced a stimulating programme last month. Well, when an idea/method is implemented for the first time, the effect is always good. But will the same trick work again for EUR (or JPY)? And how long can Greece stand before something happen? People have been speculating a collapse in EUR too. I bet this is something EUR's "rival" wants to see.  Will it happen? Only time will tell. But I do not look good on EUR.

MYR:
No cure but only pernicious depreciation. The self-interest gained by you-know-who politically will cause the country to pay the price economically. Maybe 5 more years to sustain?  In these few months MYR has depreciated "considerably" against USD, and is now trading at USD 1: MYR 3.60+.

I am sorry but I do not look good at this currency. If I were to choose a currency to keep, my first choice would be USD, followed by SGD.

Conclusion:
I am not a forex expert neither I know much about it. I just blow some water here. Don't hit me if you want AUD to go high.

Sunday, 1 February 2015

US: Is Apple expensive?

When Iphone 5s/5c was released in 2H 2013, I thought that the sales would go down as there wasn't any  "jaw-dropping" innovative features. The market proves me wrong.

In 2014, 169.22M of Iphone was sold as compared to 150.25M in 2013, a 12.6% increase, according to the global Apple Iphone sales. Note that Apple (NASDAQ: AAPL) has a financial year ends 27 Sep, such that the sales of Iphone from Oct-Dec 2013 will be reflected in Q1 2014. In fact, the sales is breaking record quarter-to-quarter if compared with the preceding year. I was terribly wrong about the trend.

So I observe the way how Apple fans stick to Apple products:  the joy and excitement of having it, the honour of using it, the sense of playing with it and the pride of owning Apple products. Last year, Iphone 6/6+ was released. While the most prominent difference with previous releases is a larger screen, which has no surprise, this time I stand on a view that Iphone 6 will create a record sales as well.

On 27 Jan, AAPL released its latest financial quarter report. 74.5M of Iphone sold in Q1 2015 as compared to 51M in Q1 2014. This is an incredible result. A record EPS of 3.06 with record profit.  2014 full year EPS of $7.36, with a current price of $117.16, this is equivalent to a PE of 15.9.

Now, the question is, is AAPL expensive? Let's look at some technology stocks:

Name    Stock Code    PE
Google    GOOL       28.1
Facebook  FB         69.13
Avago     AVGO       104.13
Amazon    AMZN       Negative EPS, Stock price stood at $354.53!

You can see how "insane" is US market. A stock trading at PE 100 is not unusual. Is AAPL really expensive at a price of $117.16? Of course, I am not suggesting to buy with expectation of AAPL to reach a PE of 100, but if you are confident that AAPL will still grow, then it may look attractive at the current price.

In 2012, my lecturer once said something wise:

20 years ago you can eat apple. But can you eat Apple now?

20 years ago, nobody will ever think that Apple is inedible. Nowadays, when the very same noun is being mentioned, how often it means Apple, and how often will people will think of apple? The answer is obvious, isn't it?

Saturday, 24 January 2015

How to choose a call warrant?

The last time I wrote about call warrant fundamentals was years ago, see CW Fundamentals 1, CW Fundamentals 2, CW Fundamentals 3 for details . Words couldn't describe how fast time flies. Today I am going to write about how I determine which CW to buy.

Make sure you do some homework before buying call warrants. Every one knows it is of high risk. Before choosing CW, I choose mother share. First, mother share must have strong fundamentals, making profits. E.g., I will not buy KNM call warrants. Second, mother share has potential upside. By only having the right mother share, you can expect to have a positive return, because call warrants follow mother share movement.

Lazy people like me will go to i3investor to have a glimpse of all structured warrants available for a particular stock. It contains useful information about warrants listed in a form of table. For example, if I am looking at MYEG CW, search for MYEG, then go to warrants drop down menu. Easy.

MYEG Call Warrant
(Figure print-screened from i3investor)

How to decide which one to go for? For me, I look at the following preference in order.

1. Expiry. No long expiry date no talk. This is so important. Preferably at least six months. Under special conditions (e.g. negative premium, high gearing etc, will consider 3-6 months. Under any condition, I will not touch CW with less than 3 months expiry)

2.1 Premium & gearing. Low premium and high gearing are preferred.

2.2 In my opinion, volume has the same importance as premium and gearing. Liquidity is important (without "so" as in expiry). First, it ensures that the CWs are easy to buy and sell. Second, the buy-sell spread is small if it is traded actively, good for us.

3. Issuer. CIMB always has the "best valued" call warrants. Recently I see that Macquarie releases a lot of structured warrants in KLSE. Isn't this the Macquarie Group, the largest investment group in Australia?

OK. By looking at the first priority, CB, CC, CE and CF are out of consideration. Then, CD has the lowest premium, which is the best among itself, CG and CH (I look at premium more than gearing). But if you look at the graph of MYEG-CD:


Listed for 6 months, it is traded for less than 20 days. Clearly, I will not buy this kind of CW. You will find it hard to buy and sell. So, we are left with CG and CH.

CH has a longer expiry date, a lower premium and s higher gearing than CG. CH is also traded more actively than CG. So the choice is clear. Actually, given its low premium, CF is a good choice too. But it is expired in 4 months. So, I would go for the safer choice with longer expiry date.

Next thing to do? Prepare money, find a target buying price and queue. For call warrant, I will be very particular, even a price bid of 0.005 difference matters to me, because it is bought in quantity.

Saturday, 3 January 2015

2014 Review

3 months return: -46.8%

OK. Faced reality. The fact is, I lost all my 9-month profit (unrealized) in the last 3 months of 2014. I vomit out all profit.

The good thing is, the capital is still there.
The bad thing is, I lost a full year of time and opportunity to grow my capital.

The number of transaction is high. The main reason is, after the "crash" in early Oct, I am completely lost, don't know what I am doing at that time. It would have been much better if I just don't look at the market, but I failed to refrain myself from doing so. I look at it even more frequently than I used to, and trade at a rate that I've never done it before. And the outcome is as expected: I lost even more.

Two big lessons learnt: 1. how to sell a share 2. not looking at the market everyday. I am even surprised at myself that I can now refrain from looking at the market for the whole day. This is really good. I don't plan to make any transaction anyway, why look at it so frequently?