Saturday, October 30, 2010

Turtle Portfolio Update - November 2010

(Click on the image to see details)

As usual, received $ 888 saving for the month of November 2010. Portfolio gains 22% since its inception. Sitting on almost 50% cash. Getting increasingly difficult to find places to deploy cash. I am neither bullish nor bearish. KLCI is valued above historical average. Now is selling at almost 19.XX times and pushing it above PE 20-22X will be very susceptible to reversion to mean.

Options that available to Turtle to deploy money:

1. Do nothing - put all money into FD 2.85% and wait for corrections

2. Deploy dividend yield strategy - REIT 8% and some other high dividend yield counters 4-6%.

3. Trade on lower liner/small cap - allocate up to 15% book value to this strategy. Retail participation seems to be at a healthy level. 27 - 35% of retail investor will spice up the market a bit.

I still have not decided yet.

Sunday, October 24, 2010

The Art of War and Investing --- Part II, god of Gamblers

If you watch this short clip before enter the trading floor everyday, I'm pretty sure that you can pysho yourself -- convince yourself that you are the god of Stock Markets. It will make you feel very confident to make a swing of 5-10% intra-day profits everyday.

I probably may NOT be very qualified to make a lot of comments because I do not have many actual experiences to share. Most of the following are from my brief venture into this approach(I quit because I don't feel the money I won justified my efforts and stress that I went through), imaginations, readings and also knowing a few people are who are from this school. By the way, instead of calling them gamblers, day traders, speculators and etc, I prefer to call them The Street Fighters(;-.

1. Street smart, these guys are smart but just don't expect them to be a 1st class honor in Accounting -- instead of looking into IS and BS(Balance Sheet and Bull Shit) numbers, they can read your face like a book. They are the master of crowd psychology. They know who they can "eat" who they got to stay out.

2. Chart reading skill is in their blood. They have good trading system. In and out based on a system. Trust no one but computer(especially the Quant).

3. They react very quickly to news, breakout, trend-line, support, resistance, moving average, convergence, divergence, price-volume, correlation, etc.........It's all part of their system.

4. They know they are playing with fire, a lot of stuffs they bought are back by nothing. All they care is PRICE ACTION. It's price action that make them money, period!. The modus operandi is: You can make money in bull or bear markets but only pigs and sheeps got slaughtered.

5. If you can't tell what is the probability of moon will show up tomorrow, you are disqualified to be a street fighter. These guys are master of calculating odds, they only take odds in their favor. Real Street Fighter only care pay-off and the odds of winning.

6. Strong discipline of cutting losses and also taking profits.

7. Strong risk and money management. They know that they can be wrong, don't put all eggs into 1 basket.

8. Very comfortable with uncertainty. Love for thrills and speeds.

9. Be like a machine -- never fall in love with stocks. They focus on batting average. Natural sportsmanship, they can handle victory and defeat very graciously.

10. These SOBs are tough. They have very strong mental toughness. They will keep fighting and never give up.

11. Wide contacts and probably have some informer networks.


1. If you believe EMH(Efficient Market Hypothesis), for most of the time, price already reflecting the known facts. You are probably too late to catch after a long white bar shot up by 10%. For most of the time, if we are lucky we may have the last 2 puffs before things roll over.

2. For most of the average retail investors, picking and reading the charts, news feed, trading system is easy. However, trusting the SYSTEM without questioning them even though they are counter-intuitive for most of the time. The right golf grip actual feel very odds, so it's trading system. Trending system for example is very easy and simple to follow but taking emotions out and trusting the system is difficult. That's how 95% of people fail.

3. Riding on trends too long is dangerous because it can breed over-confidence, excessive leverage that bring most people down to their knees. I prefer young investors to lose 10 - 20 k at the beginning their Street Fighting career than winning 50 k. A guy or a gal winning 50 k will probably will start to play with margin - leveraging up in a big way. They can destroy what they build in 10 years in 10 days.

4. Forecasting future by looking at past price action? A librarian is probably the best Street Fighter on earth, just to borrow from W. Buffett.

5. Here is the catch-22. First you need to trust the machine 100% and allow no human intervention. If you intervene, then you are not trusting your machine 100%. If you allow machine and human intervention to co-exist then there is a possibility of machine or human emotions can betray you. Things will be very ugly if you know what I mean........

6. Too obsessed with tools will be no difference from Graham purist. Just numbers and charts and news feed, rumors, etc ...... without understanding business, reasoning, cause and effects are not sustainable for a long period of time.

7. Large amount of money requires a lot of trading ideas, a lot of trading ideas will lead to two possibilities (a) over-diversification (b) over-trading. I have my doubts that one can beat the market by this approach without leveraging or taking concentrated bets. Taking concentrated bets and not back by anything solid is not for the faint heart.

Saturday, October 23, 2010

Mean Machine Exhibition, AutoCity Juru

I am doing my part as a Penangnite to promote Penang a bit. This is a big exhibition displaying a lot of exotic cars commonly seen in Kuala Lumpur such as Lamborghini, Ferrari, Porshe, etc.....but not so common to be seen in Penang. That shows how Giam Siap(kedekut) Penangnites are.

The organizer is expecting 60,000 people will turn out today Oct 23 and tomorrow Oct 24. Perhaps the old fashion persuasion will work........Girls.......

These pictures were taken in 2008(I had better reveal the source in order not to get into trouble.

The Art of War and Investing ---- Part 1

It's has been a while I did not touch on the investment philosophy.

Sun Tzu said:

Know [the] other, know [the] self, hundred battles without danger; not knowing [the] other but know [the] self, one win one loss; not knowing [the] other, not knowing [the] self, every battle must [be] lost.

The obvious that everyone knows is know the enemy and know yourself, hundred battles fought hundred wins. But what is less obvious is this

Not knowing the enemy but know yourself, the winning rate is only 50%. In his words, One Win One loss.

Translating this into practical investing. We must know what kind of investors out there just like knowing major martial arts out there. What are the strengths and weaknesses of each school? I like what Bruce Lee said you have to balance between instinct and control. Too much of control then you are too scientific then you are turning yourself into a mechanical man. If you push yourself to the other extreme on instinct then you are just too unscientific.

We ought to know that each type of investing school has its own strengths and weaknesses.

Let's start with Value Investing.


1. Attention to details especially on accounting(quantitative side)
2. Analysis driven
3. Value rationality rather than emotions
4. Patience
5. Strong discipline sticking to a set of principles
6. Self knowledge
7. Generally introvert allow them to be away from crowd to be independent thinker
8. More interested in the thinking process rathar than answers/solutions
9. Hands on -- going to the source rather than depending on secondary analysis


1. Too theoretical
2. Unable to connect theoretical numbers with business reality. Lack of qualitative analysis.
3. Could miss big pictures especially on macro development will affect micro events
3. Too rigid and sometimes miss big opportunistic profits
4. Patience sometimes come at a very high opportunity cost
5. Poor market timing due to buying and selling based on valuation
6. Too focus or specialized give birth to blind spots -- missing a large new trend.
7. Buying too many stocks without knowing the business intimately especially Graham purist(buy whatever fit your screening criteria)
8. Too skeptical of everything ended up buying nothing

Friday, October 22, 2010

Value stocks re-rating

It's nice to see so many value stocks are being re-rate now. It's also imply that rational investors find that many stocks are stretching the limit, based on a number of valuation metrics.

One of the biggest mistakes of retail investors is selling out too fast because they have been sitting on losses or non-performing for too long. If we have some value stocks in our portfolio, we should hang on to the ride for a while -- either to maximize gains or minimize losses.

But we also need to pay attention not letting too much greed getting in our way because a big move in value stocks tends to attract momentum players. At some point of time, this group of players will know how to cash out based on their technical assessments. A savvy value investor will need to know when to cash out. I missed twice 25% cash out opportunities on my MUI since 2008. I am going learn to be smarter this time round. Have a nice weekend.

Thursday, October 21, 2010

A confused and desperate market

The market is getting confused.

(The Edge Malaysia, Oct 20) NEW YORK: World stocks and commodity prices fell sharply on Tuesday, Oct 19 after China, the engine of growth in an anemic global recovery, raised interest rates for the first time since 2007 to curb its booming economy.

Wall Street also was hit by fears that U.S. banks might be on the hook for billions of dollars in souring mortgage bonds, driving stocks to post their biggest loss in two months.

The dollar rallied broadly on China's unexpected 25-basis-point rate increase, a move that could mark the start of a more aggressive phase of monetary tightening in the world's fastest-growing major economy.

First the markets condemned China for not taking strong actions to tackle property bubble. When China got serious and raised interest(unexpectedly), the market got scared thinking that would slow down the emerging economies.

Then the market got desperate buying back stocks, find an excuse that the Fed is reaffirming that the US economy will have a modest growth.

They got panic again this morning when they saw this headline which was in-line with what the expected yesterday.

(Bloomberg, Oct 21)Asian stocks fell for a fifth day, the benchmark index’s longest losing streak since May, after China’s economy grew at the slowest pace in a year. The dollar strengthened against 11 of 16 major counterparts.

The MSCI Asia Pacific Index lost 0.4 percent to 129.22 as of 1 p.m. in Tokyo. China’s Shanghai Composite Index slumped 1.3 percent. Standard & Poor’s 500 Index futures were little changed. The dollar surged to 81.83 yen in Tokyo before paring gains to 81.09 yen, unchanged from late yesterday in New York. The dollar was at $1.3918 per euro from $1.3964.

Stocks fell as data from China’s statistics bureau showed the country’s economy expanded 9.6 percent in the third quarter, the slowest pace from the same period a year earlier. The dollar appreciated after the Wall Street Journal reported that U.S. Treasury Secretary Timothy F. Geithner said the major currencies are “roughly in alignment,” suggesting there’s no need for further weakness in the greenback.

The US dollar begins to rebound, a sign of fear is coming back a little bit.

When I said 2 days ago I will take a break until the first week of November, there were 3 reasons I do that :-

1. Risk and reward is not attractive at this level. Anyone buying KLCI at 1,500 will have an expectation that it will go up to 1,700 or 15% earning growth for 2011. I would expect that we will have some growth in 2011 but the rate of growth will be slower than 2010 for sure.

2. After making a new high, I want to see how strong is the support when the market pull back a little bit. If the market is able to absorb about 5-7% pull back without much problem, then taking some fun trades will be fun.

3. It's very difficult to make money when we markets are volatiles. When winners and losers are canceling each other, the nett gain will be very limited. Sometimes we have to let go some gains in order to avoid many losses(unnecessarily).

I probably still have not answered why after first or second week of November? Volatility should reduce quite a bit:-

1. market strategies will project strong Q3 into 2011. I believe Q3 '10 will have best ever quarterly results for 2010. The real sell-off will be in Q1 2011 when they see Q4 results of which I think will be a lot weaker than Q3 '10.

2. political uncertainty will be resolved.

3. Last 2 months of the year are typically more favorable to equities.

Tuesday, October 19, 2010

What if Obama losses control in mid term election?

(Click on the image to see details)

Market research firm Birinyi Associates went back to 1945 to take a look at how the market reacted to different mid-term elections. What the market research firm found was that, yes, stocks do tend to rise in the months just before and right after midterm elections. But, surprise, surprise, what actually happens in the elections, not just the fact that they are held, does make a difference.

In general, Birinyi found that going back to 1962 stocks jumped nearly 10% in the two months before and three months after midterm elections. But in elections when there was a change in the majority in either the House or the Senate, the market did considerably worse. In the six midterms going back to 1945 where there was a switch in the party in power in Congress stocks rose just 6% in the five months around the election. What's more, when the majority switched from Democrats to Republicans, the stock market did even worse. Take a look at the chart at the top of the post. When the donkeys became elephants, stocks tended to fall. The market lost 6% when Republicans took power during Truman's presidency, and 4% when Republicans took over the majority in 2002. The Gringrich-lead 1994 Republican take-over of Washington produced a lackluster 3% stock market return.

So will this happen again? I think it might. A lot of strategists have been explaining past positive midterm results and why Republicans are a good thing for the market by saying that gridlock is good. Markets and companies perform best when Washington gets out of the way. And a do-nothing-Washington might be the best when the economy is good. But at a time when we have lackluster economic growth, and a ballooning budget deficit to deal with, we need all the help we can get, even if that help comes from Washington.

Read more:

My comment
I generally do not like to predict market direction based on stuff like this. But I know it will have some impacts on the market because they hate uncertainty, especially whenever there is a major change of control.

If you look at the chart, 2002 was the only year that market losses since 1945. Why? The market fears that Democrat is blocking whatever market friendly programs by Bush.

Coming to this time round, there are two ways of looking at it. If Republican wins, the market may perceive that they can stop some of Obama ambitious and crazy programs, that may boost the market confidence further. Quite a number of people really dislike Obama now.

However, if the economy is truly weak and intervention is necessary and Democrat is losing influence, recovery will be a lot weaker. Hence a weaker stock market later. Me? I will be taking a break from the market until the first week of November if you know what I mean -- sitting on the fence. Historical data has no meaning to me now.

Saturday, October 16, 2010

It's time to put MUI on a trial stand

If you looked at my Turtle portfolio, MUI is the only stock that I am losing money. The stock depreciated by 36%. I pick up this stock on Feb 28, 2008. If I include the 8% p.a. opportunity cost, I am sitting on 56% loss. KCLI benchmark was at 1,368 when this stock was bought. Yesterday KLCI closed at 1,489, the difference of Index gain is 8%. That makes me feel better but it is still a 44% loss.

However, assuming I was capitulated in March 2009, sell it for 0.14, take a 50% loss(RM 1,416) and reinvest in FBMKLCI-EA(KLCI ETF), 1,416 would have turned into $ 2,124. I would still won't be able to recover my losses. My original allocated capital will still be 25% lesser(2,800-2,124) than what I put in.

From opportunity cost, not cutting losses when it hit 20%, relative to benchmark return, I am guilty on all three counts.

Now, let's turn turn to my original thesis of the investment. You can view my original entry here:

I listed 5 catalysts:

1. Make it less complicated. Looking at revenue, it has three core businesses: Retail, Financial Services, Hotel. Not too bad.

2. Get rid of their debts. Then was 873 mln debts, 778 mln cash. Now 549 mln debts and 557 mln cash. Not too bad.

3. Expected earnings was around 112 mln net income or $ 0.058/share. Today is $ 0.002/share(based on ICUL dilution). I'm way off the mark here. The share price is experiencing overhang due to this issue. I can blame it on weak economy and etc but hey, since this stock is under-owned by smart money, the simplest way a retail investor will value the stock is PE ratio. They will go straight to this line x 4 and estimate what the stock worth. Boo....booo.....

4. Property was at cost and not at market price that worth more than $ 1.1 billion or 0.38 on diluted basis. Okay

5. 34% Laura Ashley controlling interest. The stock depreciated by 25% from the day I valued MUI. With the dilution effects, 34% interest worth probably around $ 0.09/share today. Could have been better.

(Click on the chart to see Laura Ashley price movement. You can get it from Yahoo with ALY.L ticker)

The stock is still undervalued from asset stand points but it doesn't move because the catalysts were not obvious to smart money and ICUL conversion over-hang. Undiscovered gem is good if I want to buy a big block of illiquid stock that allow me to accumulate for a long period of time.

Overall, I would rate myself C- or D for this pick. Let me leave this stock alone in my portfolio as a reminder: nobody is perfect. Admitting that I have a lemon will not depreciate who I am.

Friday, October 15, 2010

Behavioral Finance Summarized

Whitney Tilson is a respected fund manager. He is one of the few who shorted and made money out of the 2008 crisis. I found his public presentation that I thought that will benefit many of new and "old" comers.(Click on any of the following images(17 altogether) to see details)

Tuesday, October 12, 2010

Investment Rule # 1 and Rule # 2

We all have heard that rule # 1 in investment is do not lose money. We all have heard and understand the rule # 1, no more reminders please. We all also know rule # 2, don't forget rule # 1. The begging question is HOW and not WHY.

Here is a list of my humble suggestions:

(1) If have been poor before, swear to yourself that you will never allow yourself to be poor again. Remind yourself the second hand clothes that you wear during Chinese New Year. You are on your Japanese slippers going around the whole kampung. You get your chicken meals only 3 - 4 times a year. Remind yourself that how you have to count how much money in your pocket before you enter an eatery shop so that you don't have to end up washing plates or got thrown when you have insufficient fund.

(2) If you are born and grew up comfortably in your whole life. Go and visit old folks home or orphanage at least once/year. Remind of yourself that you will never want to be in that position and appreciate and protect everything you have.

(3) Once a while, put only RM 10 in your wallet and take public transport. You will know how is it feel like when you lose your freedom of movement and down to last few pennies.

(4) Avoid socializing in high society. They will extract all the inferior complex juice from you -- your ego will grow exponentially and eventually swallow you alive.

(5) Practice solitude. Learn to be alone. Stay away from the crowd - turn-off that damn TV, newspaper and Internet.

(6) Tell yourself that you don't need to beat the market index especially when the market have moved up substantially.

(7) Tell yourself that you don't have to play by the rules the pros are playing -- you can stay 100% cash. You will receive 3% risk free interest. Remind yourself that you are not a fund manager.

(8) Don't buy a stock after reading a 40 pages research report.

(9) Don't pick up that damn phone to buy stock when you feel that you have 90% confidence that a stock will move by 20% in 3 months and 20% below an analyst fair value estimate.

(10) Whenever you feel that you have achieved Superinvestor status.

Sunday, October 10, 2010

New Car, Used Car, Modified Car --- Part II

I used to hear the argument of changing to a new car every 5 years is the most economical way to enjoy the ride. The argument was low maintenance cost and you can redeploy your money by trade-in your old car.

I also hear the argument of buying a 5 year second hand car and sell it when it reaches 10 years old is the most economical way to go. The argument was the car price has dropped substantially after being used for 5 years. The maintenance cost will somewhat be manageable.

The last group, the cheap skate, is to continue to stretch the car another 5 more years by doing a major restoration when the car reaches 10 years old.

There is nothing wrong with each view but it's about time to run the numbers as objective as possible.

(Click on the image to see details)

I have a maintenance log book on the cars I owned from the beginning. I found that the first 5 years maintenance per km was around $ 0.09, 6 - 10 years is around $ 0.18 and would expect it to go up to $ 0.23. The cost calculation was based on roughly 30,000 km per year mileage.

Arguing on the maintenance cost alone may be able to sway a lot of people that buying a new car is a no brainer. However, beside maintenance cost, when we take into consideration of opportunity cost(just the down payment to be generous), insurance, interest charges, monthly installment, etc, the picture will change drastically.

In my table, I listed three scenarios. The first scenario is to buy a new car around $ 330 k. The second scenario is to buy a used Subaru around 5 years old. The last scenario is do a major restoration buy putting in $ 20,000, I did not assign a new car or used car cost in this scenario as the car is fully depreciated.

After I run through the numbers on a spreadsheet, I find that owning a new EVO or equivalent will cost me $ 4,672/month. That is almost 818% higher than restoring my car. How about owning a used Subaru? The number is somewhat makes me feel better, $ 1,973/month but it's still will cost me serious money. The last scenario makes me smile because it will cost me roughly $ 509/month only.

I don't know what's wrong with me that somehow I have this rebellious DNA in me. Most people will naturally pick a Camry or Honda Accord when they move into their mid career progress. I somehow feel conforming to the norm is not me. If I decided to follow the crowd -- have that clean good boy image minus the fun. Just substitute $ 0.09/km maintenance cost for a new Camry or Accord. A new Camry or Accord will cost around $ 140 k. The ownership will come to around $ 1,700/month.

The conclusion? The ownership cost will pretty much depend on the personality. It's highly personal and I had better stop here so that I will not offend anyone further unintentionally. Cheers!

Saturday, October 9, 2010

New Car, Used Car, Modified Car ---- Part 1

After waited patiently for 3 weeks, my car modification project finally reached about 90% completion. I did a test drive this evening and finally I think I need to declare that I'm a petrol head graduate now. The feeling behind the wheel was extremely satisfying. I can literally made my car dance lively on the road and also almost certain that I pissed off a few guys in the process(those were driving too slow or driving big cars).

I am not sure how much horsepower the car got now but it is certainly feel it has almost doubled. My car was having about 150 hp before the modification, I would guess it should have around 280 hp now. I will let you know the official number after the dyno test.

The mechanic team did a superb modification job. These guys are "racers" themselves and they paid a lot of tuition fees from their own pockets over the years doing modifications to their own cars. So, I hope and glad that I will side-step some of the expensive mistakes. They literally transferred almost everything the other half of the car to my car - engine, transmission system, braking system, air-conditioning, etc. My car now is at least 5 years younger in terms of mileage, cutting by half from 300,000 km plus. I was lucky that the previous car owner was a careful owner, he just changed a new timing belt. NGK Iridium spark plug and cable were new too. Save me a few hundred Ringgit. What is more important, the engine was in a very good condition, no signs of carbon build up. This is the first thing you should be looking out and ensure no leakage too.

We tweaked the suspension system a little. I have chosen Tein SuperStreet producing excellent handling performance on the road. I can literally dived into sharp corner without stepping on my brake. I can see the car behind me will be separated by at least 100 - 200 meters after they completed the corner. What I like the most is, it feels soft on the road.

The next important thing was choosing a good intercooler, got a very good deal with a big Aluminium intercooler that cost only half of regular price.

Installed a blow-off valve to prevent compressor surge when I drive the car hard -- pushing the car above 5,000 rpm.

I was telling my team that I want to keep my car low profile and requested them to make my exhaust system as quiet as possible. They did a good job recommending the options. The system came with 2.5" pipe, longer bullet and muffler. They also recommended a thicker muffler to reduce vibration, hence more quiet. I was contemplating to go for S flow but they advised me to go with straight flow since it's a turbo-charged engine. S flow will sacrifice performance at the higher RPM.

There are few more things I have not installed yet. I need to send to my car back to finish the last 10% -- need to install a fuel regulator(SAAD), boost meter(Apexi), turbo timer(Apexi) and lastly e-Manage(the ultimate killer) to determine the optimum A/F ratio.

All in all, the whole project comes to $ 20 k. The purpose of this entry is not to talk about my car modifications project but to share personal finance lessons. I would not advise young people(less than 35 years old) to get addicted with this hobby. This hobby can be even more expensive than golf, if we are not careful. Sticking to a car less than $ 40,000 is certainly the best way to go until you have build up substantial reserves. Those suffer mid-life or long side of mid-life crisis will probably benefit more from my sharing. After working hard for a number of years, at some point of time when we know that we can afford Mercedes Benz, BMW 5 series, EVO, Subaru, Golf GTi, Mini Cooper, Renault Megan, Ford RS, etc but not rich enough to own a throphy car like Lamboghini, Ferrari, Cayenne, Carrera, Boxster, etc - choices were simply too many and what should we choose? Like beauty, it's in the eye of the beholder. Will share my story in Part 2. Good night.

Thursday, October 7, 2010

Not sure what to write

Have not been updating my blog since last Saturday. As usual you should have guessed that I was on the road. My eyes are half closed now, so let's make a quick one.

Not many things caught my attention for the last few days except

1) Japan central bank lowered interest rate to zero.

2) KLCI managed to stay above 1,480 today.

3) Dow broke 11,000 just two hours ago.

Long live relative return game. Deflation and Inflation will continue to co-exist. Advance economies may continue to experience deflation and deleveraging while emerging economies will continue to enjoy strong money inflow, inflating assets. Emerging economies will have no choice but to raise interest rate and attract more hot money. The script of 2003 - 2007 is being re-play now. Emerging stock market may zig or zag but it's a matter of time, it will surpass 2007 high.

Saturday, October 2, 2010

Wall Street: Money Never Sleeps

I did not get a chance to watch the movie Wall Street: Money Never Sleeps until yesterday. I made an U turn heading to cinema desperately trying to avoid a long queue packed up all the way to Penang bridge from the industrial zone.

If it was not because of Micheal Douglas presence, the movie would have gone off the cliff. He is such a charismatic actor. The story line was predictable to those who have been following 2008 financial news - bailouts, moral hazard arguments, housing and energy bubbles, etc. The movie did not position itself very clearly, was it a documentary, a thriller or a pure drama? It did not leave a strong impact on me like An Inconvenient Truth or The Devil's Advocate.

Sometimes watching a movie will teach us more about life than listening to high power pow wow conference speakers. One of the themes got me thinking was emerging of a new media - blog. There have been some debates going on whether blogs are part of a main stream media. Does it has a capability to reach the masses and swaying the market? The movie director projected that a tiny blog runs by Gekko's daughter Winnie did have such a great impact by exposing Bretton and brought him down to his knees.

In real life, can "new media" really sway the market?

(The Star)KEEPING tabs with new media is not easy for every one.

The explosion of news portals and blogs makes it a bit more challenging to follow all that’s being reported and rumoured. Market regulators are no exception.

A recent case highlights this.

Last week, a popular online news portal, The Malaysian Insider, ran a big article speculating that “an option to build a casino is on the table for the Karambunai IR (integrated resort)”.

The article appeared on the news portal’s website on Sept 21.

It didn’t take long for that information to seep into the market. The next day, the shares of Karambunai Corp Bhd (KCB) were actively traded and shot up from from 5.5 sen a piece to 8 sen by the end of that day.

Two days later, on Sept 24, the stock had risen by some 227% to hit a high of 18 sen.

It is interesting to note that the authorities only queried KCB on Sept 24, three days after the Malaysian Insider article first appeared. And Bursa Malaysia’s query to KCB was based not on the Malaysian Insider article but on an article that a “mainstream” newspaper wrote on Sept 22, about the same casino issue and which had referred to the Malaysian Insider article.

It is understood that the reason why Bursa did not query KCB earlier is because, firstly, the Malaysian Insider article did not specificially mention that KCB would be getting a casino licence.

The Malaysian Insider article only mentioned that the casino was an option for the Karambunai IR project, the latter of which was also a mere concept.

On the surface it seems like it could. There was another incident how a good company market cap was wiped out merely due to some silly poison pen letter rumors. Any sane person would not have acted but why they did what they did? Never ass-u-me the market is sane. The market can be insane, period.

(TheEdgeMalaysia)KUALA LUMPUR: Shares of Mudajaya Group Bhd continued their precipitous descent, plunging 20.5% yesterday, on investors’ jitters about an informal probe on the company by the Securities Commission (SC) as a “poison-pen letter” made its rounds.

Shares of the construction company tumbled RM1.01 to close at RM3.92, from RM4.93 on Wednesday, erasing RM156 million from its market capitalisation. Earlier, the stock fell to an intra-day low of RM3.75, the lowest since early November 2009. It was also the day’s top loser. Trading was heavy with 11.66 million shares changing hands.

The stock has slumped 35.7% from its recent high of RM6.10 on July 22, just before the selldown sparked by reports of the SC probe into the company.

Back to the question, can a blog sway the market? My answer: it's depends. A blog may have a few hundred to a few thousand readers daily. The readership reach is like a pimple on an elephant ass. It is unlikely to sway the market. However, if the main media picks up the story and begin to run them, it will reach the mass audience. It may sway the market for a couple of days and will not last more than 1 - 2 weeks.

Should you act when you see something you like on a blog or main media? I normally will apply the 7-day rule. Postpone the purchase until 7-day later. That was to confirm whether it was a infatuation or should consider serious dating.

Friday, October 1, 2010

Turtle Portfolio Update

(Click on Image to see details)

Turtle accepted take over offer from AK on Tanjong for 21.80/share, cash is in-transit now. Proceed from Tanjong sales and current cash on hand are pushing my cash level to about $17,248 or close to 48%. I am still waiting for opportunity to deploy cash.

Remember Sell in May and Go away? May is one of the better time to off-load and traditionally, October is a scary month but also one of the best opportunity for bargain hunt. A general rule will remain as a general rule, still have to monitor the actual events.