Wrapping Up 2010

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Annualized compounded return for Turtle portfolio is about 10% or 0.857% per month. I don't take this result too seriously. It's just an indication that I have allocated the money in the right place in relative to our assets such as bond, money market, etc. Seeing how the seed money of 3,000 with diciplined monthly saving of 888(a few months were only 620) grow to almost 40,000 is coming from quite a long way.

I hope I can continue to head in the right direction in 2011 based the game plan that I have laid down(see my yesterday post). Cash level is quite close to 1/3. I am pretty much overweight China for whole of 2010. I am lucky that I have a few home runs to compensate for non performing Chinese related stocks or else I will be eating dust. I have no regrets and will need to continue to stay patient because the big cap Chinese stocks are cheap. It is selling for roughly 10X PE with double digit growth potential in the next few years.

I need to make some tough decisions to rebalance some of my holdings into high dividend stocks. Hmmmm ..... I have a few "dogs" that that I need to lighten up before 1H 2011 or I need to start buying high dividend stocks for whole of 2011.

I may have made a few wild swings but overall valuation and fundamentals approach have served me well.

I want to take this opportunity to wish everyone A Happy 2011 New Year. Take Care !

Turtle's 2011 Investing Strategy

I was at first very tempted to start this review by citing all kind of fantastic charts with standard deviation, historical PE, length of bull runs and etc, etc, etc. Then I decided not include any of them because these charts are useful in stable environments. BUT they are useless in chaotic and confusing environments.

Two things will remain the same, the developed world is still undergoing deleveraging. Environments like these will force them to meddle with the markets -- i.e. either having more QE or devaluating their currencies.

In the ugly beauty contest, emerging markets appear to be prettier than their developed markets nieces. The cause and effect analysis is more QE or extended period of low interest rate in developed markets(cause) mean the higher the emerging markets/assets(effect) and volatile commodity prices(effect). Aha did I said volatile, yes, the only thing that I am very certain is this. 2011 is going to be a very more volatiles. Environments like these will be heavans for TRADERS. OMG, did I just say TRADER? Yes, you got to have gut to ride on momentum, take profit, cut losses ........ There will be time that people got scarce out of nothing. We all need to understand that LIQUIDITY can come very fast and intense but LIQUIDITY also can REVERSE very fast. At the point of they are thinking that they are going to die, SUPERMAN will come out of no where to rescue them. In other words, we will see Mr. Market a lot more active next year.

So, navigating through 2011 will be simple. I will make sure that I have three buckets: 1/3 of money in trading, 1/3 of cash to take advantage of Mr. Market 1/3 of cash in high dividend stocks. I will need to rebalance my portfolio soon.

High dividend stocks that I like are Maybank, Public Bank, LPI, BJ Toto, Amway, Alcom, BAT, PIE, PET GAS, Petronas Dagangan, UAC, DELEUM, NCB, The Star, TM, MPI, YTL Power, Mesin Niaga, Digi, Maxis and Bi Port and REITS except those with heavy office exposure.

Three of the dogs that have been unloved are Chinese(CIMBX25) and Japanese(Nikkei 225 index in Singapore Exchange) stocks and iCapital.

My best 2010 investment: Canon EOS 550D

Canon EOS 550D, Rebel T2i. Sounds pretty much like the Terminator. Scary it might sound but surprisingly, very friendly and intuitive for people who can be easily intimidated by gadgets. I picked up this camera from Gurney Plaze just a few days before we went for holidays. With less than 30 mins tutorial by the sales person and carrying a small manual, I managed to master the basic and shot some great pictures. This shows how intuitive it is. What I like the most is the sport mode. It can capture the actions of my daughter running around, cycling, giggling, etc --- perfectly. The quality of the pictures was superb. It's neither too static nor blurry. It captured the carefree spirit of the kid.

It cost me $ 2,899 with 8G of memory card, a tripod and micro fiber cloth. This is my first DSLR and I must confessed that this is my best 2010 investment pick. Between this camera and an iPad or my other shares pick, I must say this one win hands down. I am glad that I did not pick up the iPad and force to use my 5 Mega pixels hand phone(EOS 550D has got 18 Mega pixels) to capture the precious holidays moment.

See the video, you will know what I mean. Please understand that I am not endorsing the horse race gambling but this review just popped up on top when I Googled it. This review brings up the essence of what this camera can do for you. This is a medium end DSLR and not a very high end but good enough for amateur photographers.

By the way, going holiday the old fashion way was very satisfying. No computer and Internet, switched off the handphone, NO STOCK MARKETS, no TV, no newspaper, etc. This forces us to talk and listening to one another.

Now that I have a fresh mind, in the next few days I will try to tackle the question that many readers care a lot : What are my investment views for 2011? Stay tuned.

In holidays mood

It's all time low. I have posted 7 postings only through December 23. In part, I was busy traveling in the last 2 months. The other reason is a lot of efforts needed now to uncover "undervalued" stocks. Since I am working on a very compressed schedule, it's time that I don't have.

It's Christmas time. It's time to slow things down a little and do a bit of reflection. I don't want to pretend to be religious and on and off you can see I am just an ordinary man -- capable of sinning or thinking/doing worldly things. But no matter what happen, I still have a duty to tell the world that God has given his only Son to the world. That is the greatest gift that mankind has ever received. I will remind myself constantly, instead of just sitting on the receiving end, we ought got to make some sacrifice, big or small, learn to give.

My family and I will take a few days off -- real time off. I asked my wife, what Christmas gift that will make her really happy yesterday. She told me, she will be very happy if I don't bring my notebook along during this Christmas break. My instant reaction was no way. I struggle a little bit, if that is what will make the whole family happy, why can't I sacrifice for them. After all, turning off the stock markets for a few days will have no material impact to my portfolio. If my work collapse by just turning off my notebook a few days, then I have not done my job as a manager. That mean I have not given enough time to coach my people year round. I know the stock market will not collapse, I know my portfolio will be OK, I know my people will be able to do things by themselves because I have spent enough time to coach them. So it's kind of irrational side of me wanting to feel in control. Well I suppose if I know the truth, the truth will set me free. Just learn to trust the One above, trust less on myself. Just give up wanting to control things. So, I told her that I will be gladly agree to her Christmas wish. I will not be bringing my notebook and business megazine and bring only Bible. They are so happy that I will give 100% of my time to them. I never see them this happy for a while. When I start giving, I am receiving as well. I am feeling very liberated.

To all bloggers out there, thank you for sharing your thoughts. I did benefited from some of the gossips, analysis, news curating, etc. I hope my sharing have benefited you all too.

It's time that I hit the pusblish post button, switch off my notebook and go holidays. Have a blessed Christmas.

DRB-Hicom inks collaboration agreement with VW to assemble CKD cars in M’sia

(The Edge) KUALA LUMPUR: DRB-HICOM BHD [] has entered into a collaboration and license agreement with Volkswagen AG (VW) and Volkswagen Group Malaysia Sdn Bhd (VGM) to collaborate in the assembly of Volkswagen vehicles in Malaysia.

Under the agreement, VW has granted DRB-Hicom the the exclusive, non- assignable and non-transferable right to assemble selected completely knocked down (CKD) VW models with VW’s specifications and quality requirements in Malaysia.

For its part, VW will supply CKD kits and provide relevant engineering and technical support to enable DRB-Hicom to assemble the CKD models and their parts.

DRB-Hicom will then sell the products exclusively to VGM’s subsidiary for onwards distribution and sales, and it will also import completely built-up VW brand passenger cars which in turn would be sold to VGM’s subsidiary.

DRB-Hicom said on Tuesday, Dec 21 that by becoming an exclusive assembler of selected models of VW brand passenger cars in Malaysia, the collaboration would allow it to expand its vehicle assembly and component manufacturing activities and further strengthen its position in the local automotive industry.

“The collaboration will also allow the group to participate in VW’s future export programme for certain Volkswagen brand passenger cars to the Asean market,” it said.

The company said the collaboration expenditure would be funded by internally generated funds and bank borrowings.

DRB-Hicom said the parties had agreed that the collaboration’s expenditure would not exceed €133.7 million.

When I was traveling in China, the streets were full of Volkswagen cars. Volkswagen has done a wonderful job there. Will it be able to duplicate the success in Malaysia or South East Asia?

Malaysian market is getting too crowded. For a start, they will bring in Jetta and Passat and aim to install capacity of 40-50,000 which is about 8% market share(tough to achieve this number overnight). It will not have immediate impact on Proton sales except may be Proton Perdana. They are more in direct competition with our so called "Proton" upgrader. It will have more impact on Vios, City, Camry, Accord, etc. To some extend it will give Naza a fight in Peugeot's CKD cars or Mercedes C class.

Volkswagen builds very solid quality car. However, they need to overcome some perception issue as most people still perceive European cars are not as reliable, fuel economy as Japanese car. Many also think the maintenance cost is high. You will be surprised if you talk to some of Volkswagen owners. If they give you 5 years guarantee. I will can tell you they are extremely competitive. If they can survive in China market, I can tell you that these guys are good.

They are very smart not to bring in Polo or Golf which they have to wrestle with perception of lower CC will be underpowered. What they have done with their TSI technology is wonderful. I think they have done a wonderful job and live up to what they claim frugal and fast. Need justification? Nevermind, I will tell you this story another day.

Is Lotus turnaround plan too risky for Proton?

You know that I have written quite a few companies that have investments in their subsidiaries that carry good brand names. You can unlock the value by breaking it up, take it private, spin it off, sell it, etc.... But I am not too sure about Proton investment in Lotus. For sure it worth more than 1 dollar(damn, I hope I didn't remind our leaders about MV Agusta)



When you mentioned Lotus and able to connect with its brand, I guess people will call you uncle when you go to a wet market. The famous car was featured in James Bond, the spy who loved me. Well that was released in 1977. Now you know what I mean.

To be in supercar business is tough. Really tough but a few succeeded after executing some very bold plans and the period of prosperity was in their favor.

As noted, the 2014 Lotus Esprit is part of a daring turnaround-and-growth plan that aims to emulate the recent success of Aston Martin, Ferrari, Lamborghini, and Maserati. Not so long ago, those four brands were small-scale money-losers as Lotus is today, and they prospered only because they came under the wings of mass-market automakers that were willing to lay down big bucks for improved products and production methods that each brand needed to achieve higher sales and solid profitability. Ford Motor Company turned Aston Martin around over a decade of ownership. Lamborghini went through several owners and financial crises before finding refuge at the Audi division of giant Volkswagen Group. Ferrari and Maserati have long been the crown jewels of Italy’s Fiat, which has committed to resuscitating long-troubled Chrysler.

We’ve mentioned that Lotus has its own deep-pockets protector, Malaysia’s Proton Holdings, which has promised over $1.2 billion to fund the British’s automaker’s expansion. But however impressive that sum may seem, $1.2 billion doesn’t go very far in the car business these days, and Proton has already invested untold millions to keep Lotus alive over the past 15 years. That means the bosses in Kuala Lampur will expect their “English Patient” to pay back this latest investment, and the sooner, the better--or else. But as many analysts have already opined, the odds of success are quite long, considering the still-fragile state of the global economic recovery and the fact that Lotus will be taking on much-stronger brands in a premium-price market where it has no experience. As Autocar’s Steve Cropley observed, “Lotus has been selling [far less expensive] cars and it hasn’t found enough customers for those. Its factories and people aren’t used to making high-value cars...and its [very few] dealers aren’t used to selling them…[T]his is one case where hopes and expectations are separate.”

For his part, CEO Dany Behar is confident, as he told Cropley, that Lotus can successfully grow itself “from a niche sports car company to a builder of a range of premium sports cars...We have the opportunity to change everything--to do things from a better position--and that’s what we’re going to do.” He terms Proton not only a “strong” financial backer but “fun to work with,” and claims a good many people “believe we can do this thing just as passionately as I do.” And he insists the plan is pragmatic and do-able. For example, “we’ll outsource things that aren’t our specialty--just like every other modern manufacturer does. That, and clever design, will help a lot with the quality thing.”

OK, fine. But the devil is in the details, and Lotus’ turnaround plan could be derailed before it reaches the station by factors beyond the company’s control. Or maybe not. For now, then, the only “buying advice” we can give is to stay tuned for further developments and, if you’re inclined, think good thoughts for Mr. Behar and company.

http://consumerguideauto.howstuffworks.com/2014-lotus-esprit5.htm

The original strategy of Lotus was to build a supercar competing against Ferrari, Lamboghini and Aston Martin at much cheaper price. I begin to see some advertisments when I was traveling in China. And the Chinese are crazy about owning some exotic cars. If they want to be sucessful, this is the sweet spot. If you miss it, that's it -- gulung tikar.

Let's look at the line up.
1. New Espirit


Launching year 2013.
Engine: Lexus-sourced V8/V10. 500 hp
Price: $ 110 k pounds

2. New Elan



Launching year: 2013
Engine: Evora's V6, 400 hp
Price : $ 75 k pounds

3. New Elite



Launching year: 2014
Engine : Lexus 2+2 V8, 500 hp
Price : ??

4. Eterne



Launching year: 2015
Engine: 5 litre V8, Lexus LS600h. 500 hp?
Price: $ 120 k pounds

5. New Elise

Launching year: 2015
Engine: Toyota 2.0 litre, 4 cylinders. 300 hp
Price: $ 40 k pounds

Looks like pretty much a complete line up here to target at Ferrari, Lamboghini, Aston Martin, Porsche, Japanese sport cars, etc. The man behind it seems to be from the right background. They also managed to attract some people from top supercar that willing to accept at much lower salary because of a sense of mission to rebel against establishment. The plan seems to be gutsy enough -- do or die kind of mission.

One question remains though, will it drain Proton resources? Proton bosses denied that(go to this link http://www.bernama.com/bernama//v5/newsbusiness.php?id=549201) but foreign media said Lotus CEO said that they have at least 1.2 billion Proton backing over a period of 5years.

I was a little bit confused with Proton strategy here:

1. Are there any synergies or transferable technology to Proton? The platform and target market are so different. If you put in those great Lotus tuned handling and high end engine, can they sell at lower price? In other words, mass market and niche market are like water and oil --- can never mix well one.

2. Will Lotus success boost Proton sales? Ferrari success did not boost Fiat sales, why should there be an exception in this case?

3. Assuming Lotus is successful in their turnaround plan, should they just congratulate themselves and collect dividend? I am damn sure if that is the objective we have better options.

4. Is Proton chasing after their own shadow? They want other people's technology, they want regional expansion and the same time they want to be the boss and they want to retain their control. Where can like than one!

5. Will Proton has any multiplier effects on Malaysian economy? Seriously?

As a consumer and a tax payer, I am not happy at all. Good night.

Suvarnabhumi Airport – Fast becoming my favorite airport

I used to like Changi airport a lot. Free internet and reasonably price food. Clean and organized environment. But you are paying RM 800 plus for the airport tax. If you are transiting back-to-back, you are just paying a big sum of money for nothing.

We all know that the political turmoil in Thailand did affect their tourism quite a bit. I have no choice but ended up with very screw up connecting flight on Thai Airways. I have almost 7 hours of lay over in Suvarnabhumi Airport.

So I landed here at 8.40 am. After checking out from the plane, I proceeded to get my next boarding pass. Then checked into Louis’ Tavern dayrooms. Thai airlines surprised me with a complementary day room for my 7 hours transit. This is a great idea for traveler to refresh – shower and work.

I did some crazy thing after I checked into the room. Nice 3 star environment but much better than airport lounge, you can just put down all your luggage enjoying all the privacy privilege. I went for a Thai traditional massage, crazy thing I know. I have always skeptical to do that because I have always thought that they are not as good as those masseurs in down town and you get charge B 300 more. To my surprise again, she did a very good work out on my body. I feel like getting younger by 10 years after the massage. I was so satisfied that I tipped the masseur which you typically don’t do that when you get charged at higher price.

Went back to the room, I was not too sure whether my hunger play tricks on me. The complementary lunch was good. I got a very simple meal. Started with Zero Coke. Then they served me with really hot mushroom soup and a hot burn. Shortly after I whacked the starter, nice fragrant green curry chicken and steamy soft Thai rice arrived. Yummy.

Well it’s time to work but then……..there was this little problem. You have to go to the information counter to get your Wireless Internet Service. They only give you 15 minutes per voucher. Well, after having a great workout and filled up my stomach, I have nothing to complain. So I went back and forth between my room and information for 3 times to get that 45 minutes “free internet” access. But I have no complain because the receptionist was serving with big beautiful smiles (not too sure I was happy with the overall experience or the receptionist was really beautiful that playing tricks on me).

Can our KLIA be more creative instead of just giving away our income by reducing price? Changi will have to buck up too.

Got to go now! Sawadee Krup.