There must be an explaination to every market movement

When Dow skidded 2.65% or Nasdaq suffered bungee drop 3.85%. Most people will get very excited and surely want to find some kind of explanation for it.

Some says:

No matter where they look, investors are seeing economic trouble.

Stocks and interest rates plunged Tuesday after signs of slowing economies from China to the U.S. spooked traders who were already uneasy about a global recovery. The Dow Jones industrial average fell 268 points, or 2.7 percent, and dropped below 10,000. The benchmark Standard & Poor's 500 index dropped 3.1 percent to close at its lowest level since October.

http://azdailysun.com/business/article_3cc537ee-6970-5a3e-af0b-16c13ae845a9.html

The smarties say:

Earlier in the day, the Conference Board downwardly revised a leading indicator of Chinese economic growth. Investors were also jittery about the expiration of a European Central Bank program to extend 12-month financing to European lenders.

A double-dip recession is still widely viewed as unlikely. But the drop in confidence is just the latest sign suggesting the economy could lose steam in the second half of 2010 and perhaps grow more slowly than in the first half.

Weak job creation is a central part of the problem. Friday's report by the Labor Department on the job market in June is expected to show private-sector hiring perked up in June as the Census Bureau laid off temporary workers. But gathering signs of economic headwinds suggest future job growth could be slim.

Among these headwinds: signs that the housing sector is heading into a new downturn, and financial conditions that have turned less supportive of growth as stock prices decline, the dollar strengthens and credit markets struggle. The global backdrop has grown more uncertain as European governments such as the U.K. and Germany turn their attention to closing budget deficits.

http://online.wsj.com/article/SB10001424052748703374104575337143601301602.html

I say:

All these arguments are old arguments -- no case I said. The real problem is liquidity is thin. When someone decided to unload, thinly traded market tend to magnifying the volatility. Reduced betting size, less active are the best way to save ourselves from heartache and headache. Unless you really don't care and taking a long term position, buying something cheap at any given day. I mean really a long term position before you call your broker and NOT after you buy and lost money then changing your position.

Buy Silver

Uncle Jim is back and making the same pitch. Buy something depressed - silver, agriculture commodities especially sugar. Oil is going go higher in the long-term. Hang on to your gold.

Sentiments are improving

A few things happening in the markets.

First the World Cup, instead of looking at computer screen, most people will look at big screen holding beers and cheering with friends at cozy bars or minum teh tarik under the pondok.

As summer season is already here, big western investors already started to pack their bags heading to nice beaches or hosting barbeque at their holiday homes. When lack of directions, most people will sit still -- kind of like self fulfillment prophecy. Just flip through the newspaper, no exciting news. Even there is, the writers seem to be exhausted and unable to excite readers.

The European debts fear triggered many governments to seize the moment talking tough. We got to keep our public finance in control. You can hear it from the Great Britain to Japan, West to East so to speak. This rattles investors or gamblers a bit as reduction of public spending will slow the world economy. People tend to overreact especially they think consumer spending surely will go down. In case you have not been following on the Malaysian second hand car market, prices are going up. Used Nissan Fairlady gone up by 10%.

Some good news have been ignored.

The US factory orders have been improving months after months. Some argue, we are at the restocking cycle. It will fade away but don't forget restocking is part of the economy recovery and normally will go on for a while(2-3 years). This is quite a telling sign that the world economy is recovering.

The US consumer sentiments have been improving months after months again.

Lastly, the US financial sector, a chunk of the index, had taken the beating very hard started to rise. Things does not look so bad as originally imagined, as always.

(Reuters)Banks climbed after lawmakers agreed on rules that did not make dramatic changes to derivatives and proprietary trading, two highly profitable businesses in lawmakers' crosshairs. The bill must still be approved by both chambers of Congress before it can be signed into law.

JPMorgan Chase & Co (JPM.N) rose 3.7 percent at $39.44 while Bank of America Corp (BAC.N) gained 2.7 percent to$15.42.

The S&P financial sector .GSPF, which is down 8.4 percent over the past quarter, rose 2.8 percent.

"Regulation is less onerous than people's fears, so you're seeing a bit of a relief rally in the financials today, which obviously is helping," said Michael James, senior trader at Wedbush Morgan in Los Angeles.

Oracle Corp (ORCL.O) gained 1.7 percent to $22.60 a day after it posted a stronger-than-expected quarterly profit on solid sales of new software.

"This could be a sign of a pick-up in tech spending, which may mean other tech firms are going to report strong numbers," said Andy Fitzpatrick, director of investments at Hinsdale Associates in Hinsdale Illinois.

http://www.reuters.com/article/idUSTRE65L1KF20100625

PS, thanks for coming back to check on my "boutique blog" frequently despite of very low activities by Turtle. Turtle appreciates your support very much.

Bought 1,500 shares. KSL @ $ 1.39

Bought KSL. 1500 shares at $ 1.39

KLCI 1335

KSL Holdings. Low profile, deeply undervalued.

(Business Times)CORPORATE Malaysia had hardly heard of KSL Holdings Bhd (5038) until, one fine day, the Johor-based property developer announced that Templeton Emerging Markets Group of Franklin Templeton Investments had bought a little over 5 per cent of the company.

What could have possibly caught the eye of the globally renowned fund management company that most of corporate Malaysia had missed?

Not just any executive in Templeton at that, but chairman Mark Mobius himself.

As KSL executive director Ku Tien Sek tells it, it was due to an unshakeable belief of Mobius that the Iskandar Malaysia development in southern Johor would boom.

"In his thinking, the next five years will see tremendous growth in Iskandar," Ku told an audience of analysts and fund managers in Kuala Lumpur yesterday.

KSL has four major projects in Iskandar Malaysia. It owns 446.8ha there.

And, as Ku tells it, it was a story right out of every listed mid-cap company's dreams.

"One fine day (last year), I was informed that Mark Mobius, not a managing director or anybody else but Mark Mobius, wanted to come and see us. So we made an appointment and he came, and we showed him our 'Tamans' (residential developments)."

Ku also remembers clearly a question Mobius asked him during tea after visiting KSL's developments.

"He asked me, 'Tell me what happened to you, Ku? Why is your stock like that? There are no related-party transactions or anything like that, and yet your share price is way below your net tangible asset value.'"

What ensued after that was an interview with Mobius, which entailed Ku describing in detail the company's processes and management controls.

According to Ku, what tipped the scale was when he explained that KSL bought its own building materials, which it then provided to its subcontractors, as a means of protecting the quality of its developments.

Impressed with the company, Mobius immediately declared his intention to buy a 5 per cent stake in the company.

"Mark Mobius promised me that they would be with us between five and 10 years until the com-pany grows to its potential," Ku said.

Read more: The Malaysian gem that Templeton spotted http://www.btimes.com.my/Current_News/BTIMES/articles/pksl1/Article/#ixzz0rD9SUD5R

Cheap valuation company is quite hard to find. Even you found it, you will have a lot doubts. Another value trap? Another Gram's dog? But KSL is truly attractive. I was at first thought there must be something wrong with this company and it will stay cheap. But I change my opinion after reading their annual report. It's a very easy to read annual report and you get the feeling these folks are down to earth. At the end of page 90, I agree 100% this this company is truly under-valued. Under-valued unjustifiably!



Look at the list of major shareholders, institutional funds like Lembaga Tabung Haji, Public Mutual, Templeton, JP Morgan, etc have been building their positions quite nicely as at 7 May 2010.



With the owners still holding substantial stakes and a group respectable shareholders, buying into this company this will make us feel a lot better.

Two main reasons of why I like this company:-

(1) Big margin of safety. They have 2,100 acres of land. If we value the land-bank just at RM 16 per sq feet, landbank worth 1.5 billion or 4.40/share.

(2) The company management has a very clear idea how they want to develop the landbank. See below table.



At 1.38, this stock is selling for less than 2 times forward PE? Assuming they take another 3 - 5 years to realize that RM 700 mln revenue, at the same depressed 5 times earning multiple, it will push the share price to RM 3.70. Entry at RM 1.38 and exit at RM 3.7 in 5 years time will give us annual compounded return of 22%. In the meantime, they will pay us a net dividend yield of 2.7% every year.

Disclosure: No position(yet).

Titan Chemical is purely for speculation purpose

I posted a chart yesterday without knowing what was going to happen. The post was purely based on sentiment analysis and a bit of value analysis though I did not make a full blown write-up. Now that I saw this being announced today, I will have to inform my readers that buying into Titan now is purely for speculation purpose. When sentiments turn sour, stock price can unwind violently. Trade at your own risk.

(The Star)KUALA LUMPUR: Titan Chemicals Corp Bhd’s major shareholders is currently in talks with a third party to divest their stakes.

In a filing with Bursa Malaysia, Titan said the Chao Group and Permodalan Nasional Bhd (PNB) were presently in "informal discussions with a third party subsequent to a proposal which was presented to them by that third party".

“There is as yet no outcome, event or other development from such discussions,” it said in the statement.

StarBiz reported today that the Choa Group and PNB were in talks to divest their stakes in the petrochemical company. The prospective buyer could be a foreign party.

Titan said the company was presently not contemplating any corporate proposal.

“In addition, we have not received any proposal from any other person concerning our shares or business,” it said.

It said it would make an announcement, if warranted by events or developments, at an appropriate time.

Titan rose 7 sen to RM1.53 at 12.30pm.

Trading Idea : Titan Chemical Corp Bhd

People has been trying to exit this stock for a long time. You can see though the stock is trying to head higher, people are dumping shares faster than anything else. My "feeling" is sellers should exhaust themselves soon.

This is one of the cyclical stocks which is trying to catch up with the valuation. Basing on last 4 rolling quarters, the stock is selling for 5X PE. Tagging 7X PE will translate to a target price of RM 1.96. The question is will value investor bite into this? If not, watch the momentum. Wobbling around 1.67 - 1.70 will have to take money off the table. Stop loss is 1.35.

Disclosure: No position