To hire or not to hire a property agent ?

Let me cut the chase and go straight to pros and cons.

For hiring a property agent

1. These guys/gals are doing it for a living, hence they are much more specialized and knowledgeable. They are also supposedly to be a good negotiator. Though this is not a rocket science or required by law that you must sell through an agent, having an expert around to handle a large sum of money will help us to avoid silly mistakes.

2. When money is involved, especially for a large sum, we tend to be emotional. They will be able to advise us in much more objectively(I hope) to come up with a more accurate valuation of the property that we wish to sell. Like investing in share, we tend to anchor or make reference to something that is familiar to us. In this case, we tend to make reference to new launches. But often times, unless you are sitting on hot area, second hand house will tend to be valuated at transacted price. There are owners will not want to let go simply that they perceive that they have lost too much on realizable value. 20% discount to a new house is common.

3. They can access to a larger pool of legal resources and also financial institutions. This will help the buyer a lot in getting legal advice or a loan. This certainly makes the transaction can go through much faster.

4. They help us to screen through the genuine buyers or information seekers. The will make all the arrangement to view our house. If we were to sell it ourselves, then we will have to attend to every potential buyer.

5. If you don’t have time, it’s better to forgo 2% of commission expense and they will do all the works like advertising, taking phone calls, distributing flyers and etc for us.

Against hiring a property agent

1. Why don’t we save the money ourselves? 2% commission on 200 k is 4k, 300 k = 6k, 500 k = 10 k and 1 million = 20 k?

2. A potential buyer will perceive that they paid for the commission. A potential buyer will also suspect the property agent will mark up the price from the minimum value a seller is willing to let go. Some of them will want agent to be eliminated.

3. A property agent may not be familiar with the house and unable to sell the strength of your “product” especially if your house is heavily renovated. Unless the agent is familiar with your area, they may not know where the school, market, mini market, hardware shop, banks, etc……

4. They may want to push the easy sell – good location, high $$$ value, etc. If your house is in the disadvantage situation, it’s the last one they will recommend. This is especially true if you let some of more established property agents to handle them. I contacted one of the very reputable agents and they don’t even return my call after I briefed them my property.

5. In some extreme case of they are motivated by greed (maximum commission), they may push the price to the highest and may reach to a level of not saleable.

6. Online advertising is getting more and more common nowadays. It can reach wider audiences. You can also start to communicate with them via e-mail or cellphone and exchange a few photographs to screen through the potential buyers. If you feel they are genuinely interested in your house, then you can arrange a physical viewing.

7. You are in-charge of the negotiation. You can see all body language and can decide how hard you want to push your selling price. In other words, you are getting all the first hand information.

Tips on selling your old house

I sold my house in a pretty short time. I've done a couple of things on my own based on my common sense like

• First impression counts. I repainted outside of my house six month before I moved out. That clean look would have probably created a very powerful halo effect. I also left a nice pot of palm tree at the entrance. That created a much more inviting welcome.
• Repaint the house interior with white color. It's not expensive, the material cost was less than RM 100 but the effect was good. The other price that I have to pay was myself. I just have to roll up my sleeve and do the job. Always go for neutral color. There is no need to show your personality. Let's the new owner to decide what color they want.
• Mop the whole house to keep it sparkle clean. I did it once a week and luckily I do not have to do it for too long.
• Remove most of the things out of the house. I am sure that you have tonnes of old things that you left in your old house when you moved out. Forget about the sentimental value, just ship it out. If you can't get somebody to do it.
• I removed the Cross from the old house. I know many Christians brothers and sisters may want to condemn me that I sometimes live like a pagan. Unless you want to narrow your potential buyers to your own religion, remember this is a commercial decision. Just pray in our heart that Our Lord will bless the new owner and hope some day the whole family will be converted.
• Bought a big bottle of ceramic cleaner. Get rid of the tiles stain in your bathroom. Just try to make it as "new" as possible.
• I left the house lighting on. A bright house will go no wrong. RM 20 electricity bill will not kill you. Also remember to fix all the faulty bulbs.
• The only accessory that I left was the curtain. This will create a homely feeling.
• Fix the leaking tap.........minor things like this can create a wrong impression. A tap costs RM 10 only.
• Do not do unto others what you do not want others do unto you. Try to put yourself into others' people shoes. People will feel better if you have tried your best to handover a good property to them.

I will share with you more later: whether you should sell the house yourself or go through a property agent.

Connect the dots . .

Can you connect the two dots?

BE CAREFUL WITH HIGH FOREIGN HOLDING STOCKS

Shall we bet on Tenaga?

First let's look at the chart. Well it has not even reached extreme fear of 2009 yet which was at the low end of RM 4 and still very far from 1998.

Then let me take you back all the way back to 1997/1998.



How not to dump share to RM 1++ when you see Tenaga lost almost RM 2 billion plus? If I'm not mistaken that they got hit due to depreciation of Ringgit that had a huge impact on interest expense which dominated in foreign borrowings. For some reasons they were able to get themselves out of the trouble after that.

This time round, the gas shortage is the culprit. It is going to hit them hard, very hard. In quarter 3 ended May 31, they lost almost half a billion. Their chief said, they have spent this much on alternative to gas:

TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said the company had spent close to RM2.1 billion from January 2010 to August this year to substitute gas with distillates (diesel) as a temporary measure.

Read more: TNB: Gas shortage may force us to borrow http://www.btimes.com.my/Current_News/BTIMES/articles/jrtnb/Article/index_html#ixzz1XvvQQDPh

2.1 billion?? the number seems to be very big. He expects there will be an additional spending of 900 million from September - December, wow that is almost 225 million/month. He also expect this will last until next July, which mean another 1.5-1.6 billion expenses on distillates? If what he said is true, Tenaga can report as much as 2 billion losses over next 12 months? I am not really sure investors get the message and able to swallow this huge loss.

I know analysts are still reluctant to cut their rating citing the valuation is cheap.



Agree if you have a long term view and very long term view. I also know their profitability can recover but I want to see how investors react when they see Q4 '11 results. Let say they can make 2 - 3 billion profit per year. Their annual depreciation is about 4 billion and their capex is about 3 - 4 billion. So they can generate Free Cash Flow about 2 - 3 billion per year. They should be able to get themselves out of this mess in 1 to 1.5 year.

BUT..........I doubt many have that long term view. So.............

I will want to wait for a while and see whether 2009 low will be tested before place some chips.

What the hell happened to you Turtle?

Just in case you are wondering what had happened to me, I'm here just to say a few words to tell my readers that I'm still alive. I decided to keep my big mouth stop talking for a while because the market is very confusing and I certainly don't want to add more fuel to the burning bush.

I was thinking whether I should write a piece of serious entry like value investing, ROE here and there. Moat moat here and moat moat there but had decided to save my breathe for another day. Everybody is yawning and waiting for the market for more attractive entry.

Furthermore, most of my visitors are pros. They probably can quote almost any gurus at back of their palms. Just give them the names.

Then I was thinking to scold some of these corporate taikors on their recent corporate exercises but then my fingers were too slow. Most of the exciting and hot news already commented by others. Aiyah, too slow lar, too old but hey I'm still competitive man. Seriously, these taikors are just like crazy Malaysian drivers. Their bad habits seem to be impossible to kick. Like crazy motorists, they seem to take every traffic rule as suggestion only. Nothing seems to work. You fine them, counsel them, blacklist them and now they talk about teaching kids in the school to be a polite driver. Well, when they see their father and mother potong Q from emergency lane, go 100 to 180 km in 3.4 seconds(in Myvi some more) to beat yellow light, do you think these kids will apply what they learn in school? Diversion pulak, why am I talking about this topic? Entah lar. May be some Myvi potong my Perrari from left side leaving me in dust!@#

Seriously, I think we should re-introduce short selling to keep these buggers honest. If you allow them to short to zero, then I think this process will clean up half of these walking deadman on the bursa. Just let these vultures circling those poor fundamental companies and they will kill dishonest management. If you reward those guys that can analyze bad things, I am sure they will a superb job for investors. So no need our SC to issue UMA, query our big shots why do RPT on a willing buyer and a willing seller basis, etc......

But then being uniquely Malaysian, later when we have some small guys lose money(kena short and shot) and after a few demonstrations di sana sini or complaining to a few big guns who are very well connected politically -- short selling rules will be banned again. Here you go again, Malaysians like to drive round and round of a roundabout. This bad habit that we inherited from our old British masters seem to be difficult to kick. Memang first class Opium. That is why divide, confuse and conquer work. The taikors keep screwing and small guys keep get screwed. Sons, stop gambling in bursa Malaysia. Give your money to your mama. She can beat the KLCI benchmark. Wow, how???!!!

FD ma, son. That is how you do it!!!

Should you close both eyes and buy ?

When a company declares big dividend, should you close both eyes and buy? One of the examples is Opcom.

They declared 22.5 sen special dividend recently. And stock price shot to the moon.

However, if you look at the lower chart, the indicator points to distribution immediately. Shit, someone has been accumulating prior to the announcement.

Those rush in and buy are really stupid. Why I said that? When the stock go ex, it will come back to 80 sen. So what is your gain? ZERO, absolutely ZERO. Worst still, after paying 1.4% to broker and I hope it is income tax free, you might even suffer a minor loss.

I think the chance price of this stock to higher is slim. Wrong you said, the company has 72 million cash sitting nicely on its balance sheet. After minus 29 million of this special dividend, it still has about 42 million cash. That will translate to cash per share of 0.33. May be they will pay another round of special dividend?

Well, we will have to take a look how robust is their business. Opcom is in manufacturing of fiber optic. Their business depends a lot on one single customer that is Telekom Malaysia. A few years ago they lost some parts of their business to Leader cable. O Yea, being Mahathir's son was not been able to help. The got to compete on a level field. Their margins suffer when they have to compete. But it has bounced back strongly in FY 2011.

The question is why their revenue doubled in 2010? They said their shipments had doubled. Why it is so? Digging into their annual reports, they said Fiber to Home program has gone up from 350,000 homes to 800,000 homes from 2009 to 2010 and they expect to add another 500,000 homes by 2012. The growth potential seems to be fantastic but end markets growth does not equal to Opcom's top line growth, why ? We got to differentiate installed capacity and utilization. Telekom could have invested way ahead while the utilization is low. Unless, I can get a good data and understand this factor, I will not be able to forecast what will be their growth potential for the next 3 years. It may grow or it may not. If one were to commit fund to it without proper understanding on this key success factor, it's merely gambling.

Turtle Portfolio Update: August 2011, A Terrible Month.

What a terrible August month Turtle Portfolio had. Portfolio shrunk by about 6% comparing August to July. The gain through August 31 is now stood at 13.94%. Portfolio is now 91% invested. I hope the Portfolio will recover in September a bit but again, traditionally this is a very weak month.