Google+ Followers

Wednesday, August 21, 2013

Funnies From China

By Guest Blogger Salvatore Dali

Originally posted in www.malaysiafinance.blogspot.com

English is a hard language when its not your mother tongue ... things get lost in translation sometimes. In Malaysia it happens, in particular when we get zombies trying to do the English subtitles for movies. These are from China, in now way am I singling them out. Japanese ones are funny as well ... there are also the ones from India, Indonesia, Thailand ... but one at a time.

In case of emergency...

Freshly caught, I hope!

Can I get a fucking heart exam, too?
Some guys (assholes) should really go to the second room.

Thanks for offering.

Lonely Planet said it was a must-see.
Hey, might as well be honest while you are at it!

Hey, you might as well be graceful about it.

Ah, maybe we should wait til they're done.
The police/army are so considerate.

Right?!?!
We certainly need this sign in Malaysia ... car showrooms and Pavilion.

Shh!
Awww ... shucks.

I heard it's protected by UNESCO.

Maybe the oven was broken?
I will definitely try that!!!

Cheap, fast & easy.
What an awesome gift for some of my friends the next time I travel to China.

Monday, July 29, 2013

Trader's Diary 29/7/13

By Smoking Gun

Bought 100,000 shares of Hi-P on 28/7/13 at 0.805. No other positions added or exited during this period. All in all relatively good day for the portfolio. Net cash invested still remains at 49% of portfolio.



Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The author and/or interested parties may have positions in the stocks mentioned. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Rationale for  investing in Hi-P as explained by the narrative below;






Friday, July 26, 2013

Trader's Diary 25/7/13

By Smoking Gun

Been swamped with work and a stream of friends and relatives visiting all at the same time during the last few days, so not been updating my blog on a daily basis. A few trades were done in the mock portfolio. Here is how the portfolio stood at day end.

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The author and/or interested parties may have positions in the stocks mentioned. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

During this period, I added 200,000 shares of Centurion to the portfolio, while I took profit on 200,000 shares of OKH Global at 0.515 for a 14.4% gain. Overall portfolio is up 1.2% since inception, while cash uninvested still stands at nearly 60%. The portfolio shall be more reflective of the efficacy of my trading methods once the invested portion of the portfolio is closer to 80%.

Here's my rationale for the Centurion trade which took place on the 17 Jul 13.
 Looking at Centurion's M index, from a reading of 2.52 to 42.69, it jumped up to 270.72 yesterday (16 Jul 13) and carried over to 334.85 today (17 Jul 13). This was accompanied with rising prices and MFI and successfully broke its 52 Week High (BrH%). Breaking the 52 week high is normally a precursor to a continuation of the uptrend.

My rationale for selling out on OKH
My sell signal is based on the readings of the MFI. An drop in excess of 3 points will prompt me to liquidate my positions. On the circled readings on the MFI, yesterday's reading of 69.44 which was a drop of 3.5 points from the preceding day, prompted the sell yesterday. This was confirmed by weaker prices today. A drop in the MFI in excess of 3 points will indicate a significant money outflow, and as part of the trading discipline, we shall exit if this happens even at a loss (in this event, we made some money)


Tuesday, July 23, 2013

The Debasement of Major Currencies Crash & Asset Class Returns As At 30 June 2013

By Guest Blogger, Salvador Dali, Malaysia-Finance

June was a torrential month. We had people running for the escape shutes just on the likelihood of QE being tapered down in the near future. In reality, its just the usual holiday season for most finance industry people ... as usual when there are not much going on, it takes little to move things down. Then the whole world searched high and low for reasons to explain that phenomenon. Many times, its just profit taking. Because seriously, look how easy it was for markets to return to some normalcy? You tell me that what started the rout in inescapable fear and loathing, suddenly reversed course.

Emerging markets stocks and bonds took the brunt of the hit. Remember this trend, when the markets crash due to the finality of the debasement of major currencies, this is what will happen, magnified 5-10 times at least. Just look down the asset classes, every single one except cash is down. Remember this ....

070113cc.png

The funny thing was that gold even went down. Of course in a real major correction based on the debasement of major currencies, the developed marlets bonds will TANK in a big way, followed by their stock markets as people pull funds away. They will also pull funds away from emerging markets stocks and bonds. Emerging markets bonds will be the most vulnerable - because they attracted the most inflow over the past 5 years as funds seek out better yields with "better currencies". The debasement of major currencies (USD, Euro and yen) is nothing new, there are a lot of believers, just that we do not know exactly when it will happen.

But why, what is the justification that the debasement crisis will end in tears? There is debasement just by looking at the amount of money printed by most central banks over the last 5 years alone. Technically, in the US alone, they might need only 1/10th of the amount of money running in the system. OK, that might seem scary already. Even if you try to take back half of that, you know there will be dislocation, no matter how well planned. Pumping in is fun, just like alcohol consumption in a party. The way out never is.

Two, the QE funds are largely not flowing through the real economy. Big and small banks, but mainly big banks, are benefiting enormously by taking these funds at zero and getting their 0.2%-0.4% margins leaving that in the interbank. Is it any wonder that even behemoths like Bank of America and Citigroup are making billions again - its not from lending, its not from trading, its not really from investment banking.

Already the real economy is not getting the credit they need to jump start. They can see the low rates but they cannot borrow realistically. Those who do borrow are using it for unproductive ways again, e.g. flipping houses, or carry trades. These inflate certain asset classes (stocks and REITs mainly) but doe not provide the multiplier effect down the entire economy.

When central banks sells bonds again (to soak up liquidity), the big guys holding the cash will demand for much higher interest rates = you go from zero to 3% and then 6% quite fast. Sharply higher rates will pummel all stocks and the chain reaction goes around. Only this time, the severity is pronounced because its not a one off event, investors can see the amount of liquidity to be called back. Even if central banks stopped the soaking up process midway, the confidence is gone. Confidence is one of the greatest asset in valuing assets. 

If QE did what it was supposed to do ... lend to businesses and people who need them, you would have seen a great multiplier effect of more money moving around, improved business velocity ... which would then enable the economy to better weather the turning off of QE or soaking up of liquidity later on. 

The strange thing is that you cannot just sell one currency and thats the end of it, it has to be converted into another currency. But as you can see from the last two paras, everything will collapse in a debasement correction as currencies of all sorts will collapse.

HKD will be under some strange pressure when USD falls by 20% in a week. It might finally prompt a reweighting of the HKD to a basket of currencies. The emerging markets will be very busy defending their currency, not because they are not stronger than the developed currencies but because their bonds have attracted so much foreign money that the moment they all decide to exit the bonds, it literally means that yields may double from 4%-6% to 10%-18% overnight as the ringgit, rupiah, baht will be sold down tremendously as funds repatriate. This will cause an even bigger collapse in emerging markets stocks even though they may be fundamentally superior to developed markets' stocks.

The strange part which i mentioned was that last month sell down did not see gold prices rise as that should be seen as the best alternative if you do not want to hold currencies. 

This piece of advice will be worth millions to the right person. In a debasement of major currencies correction, almost nothing is worth buying. Except hard assets, but not just any hard assets, if USD is tanking then holding a USD property does not help. Pick the right country that can ride out the storm and come out stronger and your net wealth intact.

Buy UK properties, buy Singapore properties, buy large tracts of farmland or idle land in Malaysia, Australia, NZ, buy gold certificates. Looks like many Malaysians already have a great read on the upcoming disaster, many have been ploughing headstrong into UK and SG properties. However, me thing the total exposure to all the hard assets above should be between 30%-60% of your total assets. Get closer to 60% when the storm is near. Currently it is not.

So, when will this happen? I think come next May-September, plenty of time still. There is still the possibility that this event can be further delayed: if QE stops and the markets rumbled but steadies ... however, the central banks DO NOT sell bonds i.e. no soaking up of liquidity .... then its like postponing the inevitable. It will come, if you do not soak up the liquidity the markets will correct the realignment for you. They will just lose confidence in developed markets bonds, then developed markets stocks, then assets of most things, just like you saw from the figures in the month of June 2013 only multiplied.

Once that train starts, you can see a few months of high anxiety. Bernanke should be so glad to get out of his position so that he does not need to go through that.

Wednesday, July 17, 2013

Trader's Diary - 17/7/13

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Added another stock to the portfolio, Falcon Energy. Mock portfolio is now 43% invested. Kreuz had a small bump up today while the rest were meandering.

Liked Falcon Energy on the M Index. Activity not on the high side first. B rated stock. One to hold on for a couple of weeks.


Tuesday, July 16, 2013

Trader's diary - 16/7/13

By Smoking Gun

Disclaimer: This is a mock portfolio and all trades referred in the the context of this mock portfolio are purely hypothetical based on actual prices observed during actual trading. This mock portfolio only serves merely to demonstrate the methods in my stock picking and trading strategy and does not represent a solicitation or recommendation to buy and sell any security or financial instrument. The content on this site is provided as general information only and should not be taken as investment advice. The ideas expressed are solely my opinions. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.


Slow day. Didn't add any new positions today. Didn't like how OKH Global was trending. MFI starting to slide. Rule of thumb, if the MFI slides 3points below the high watermark, then look for exits. May have to exit at a loss. Hopefully it will not be to great a setback. Elsewhere equity and bond markets look stable for the moment. There would be some noise from Bernanke's congressional testimony on Wednesday night but methinks the impact would be muted as the markets had already taken cue from some his soundbites earlier last week. The conditions are right for a good trading market for the rest of this month. Looking to add more trades in tomorrow.

Smear Campaign against Palm Oil Industry

This article is originally published on Salvador Dali's blog Malaysia Finance Blogspot. The author, Mr Koon Yew Yin, is a well known Malaysian investor and many regard him as the Warren Buffett of Malaysia. Best known for being the one of the founders of IJM and Gamuda, Mr Koon is also a philantrophist and writes regularly on issues that is dear to him.

Fight the Smear Campaign against the Oil Palm Industry
Koon Yew Yin
A few weeks ago the sky was covered with smoke from the burning of forests in Sumatra to clear land for agriculture. Many in Malaysia and Singapore were affected by the haze.  Some observers in the west used it as an occasion to bad-mouth the oil palm oil further. In this article, I will try to share some facts of life in the oil palm industry so that Malaysians will not join the western world in their smear campaign.
Firstly, we must remember that the west had cut down their forests and trees centuries ago to develop their countries.  Malaysia and Indonesia are both new comers in the development scene and have been felling our forests for only a few decades now.  Of our tropical agricultural crops, oil palm is the most recent cash crop commodity.
Although there has been a rapid rate of exploitation, it still occupies a small proportion of our total land area.  The oil palm industry in Malaysia accounts for 15.5 per cent of total land area and only 4.5 per cent of total land area of Indonesia.  A large proportion of the oil palm plantations are also not newly felled forest but are old rubber plantations that have been converted to this more lucrative crop.
Many in the public know of my views which are critical of many developments in the country.  However, praise needs to be given when it is deserved; and our home grown oil palm industry is one which deserves all our support. This support is important in view of the sustained criticism made against the oil palm industry by lobby groups that have their origin in the west.
Why We Should Support Our Oil Palm Industry
There are many good reasons to support our oil palm industry in Malaysia and Indonesia. These are some of the most important.
1.    Firstly it is not only Felda settlers that are dependent on the crop for a livelihood. Malaysia’s annual US$25 billion (RM79.75 billion) palm oil exports support some two million jobs and livelihoods along the sprawling value chain. This means that one in every five working Malaysian is dependent for his or her livelihood on the crop.  
2.    Plantations have borne the brunt of the bad publicity. However, the small farmers are also affected. More than 40 per cent of oil palm planters in Indonesia are smallholders whilst in Malaysia they contribute to 38 per cent of the country’s palm oil output.
3.    Environmental activist groups such as World Wildlife Fund, Friends of the Earth and Greenpeace have launched many campaigns alleging that the expansion of oil palm plantations have destroyed forests, threatened endangered wildlife and robbed indigenous peoples of their land. Many of their arguments are not based on fact but are sensationalized from a small and atypical number of cases.
4.    The anti-oil palm lobby in the west includes pro-soya bean and rape-seed groups who see oil palm as a major competitor and have recruited food lobbyists to play on fears of the health hazards of palm oil consumption. . Together with environmental activists, these well-funded groups have created trade barriers to the global oil palm trade under the pretext of environmental activism.
5.    In a fair contest amongst competing vegetable oils, palm oil will win hands down. The oil palm tree is the world’s most efficient oil crop because one can harvest five tonnes of oil per hectare. This is 10 times more productive than soya bean planted in the West, including United States and five times more productive than rapeseed, Europe’s main oil crop.
6.    It is an undeniable fact that palm oil is the cheapest and most popular form of cooking oil for consumers, including many poor families in the west. Should trade barriers to benefit rapeseed farmers who are already heavily subsidised by the European Union (EU) government be successfully implemented, this will hurt consumers all over the world.
7.    Also should alternatives to oil palm be grown, more land would be needed to produce an equivalent volume of oil to replace palm oil, resulting in more deforestation and problems for Mother Earth.
8.    Oil palm smallholdings and plantations meet the United Nation’s Framework Convention on Climate Change which defines a forest as an area of 0.5 to one hectare having more than 30 per cent canopy cover and having a potential height of two to five metres. To accuse the industry in Malaysia and Indonesia of contributing to global warming is sheer nonsense. In fact oil palm trees just as with other forest species, produce oxygen for us to breathe and act to counter coal and oil emissions which are the major cause of global warming.
9.    Finally, the western environmental activists’ campaign against oil palm plantation expansion, in the name of “saving rainforests”, is a violation of international norms and Malaysia’s and Indonesia’s sovereignty.
Appeal to Malaysians
In a keynote address to over a thousand delegates at a conference organised by the Incorporated Society of Planters (ISP) in Sibu, Sarawak, recently, Datuk Amar Abdul Hamed Sepawi, Chairman of Sarawak Plantation Berhad warned,   “We’re at a crossroads. It’s time for oil palm planters to adapt to the fast-changing world of ruthless vegetable oil politics if we want to stay relevant in this market”.
Conclusion:
I trust all Malaysians will circulate this article to all their contacts to fight against the smear campaign against our palm oil industry and eventually I hope consumers, all over the world, will not buy soyabean or rapeseed oil which is more expensive and not really superior to palm oil.