Turtle Portfolio Update - July 2009

(Click on the image to enlarge)

Added $ 888 saving for the month of July 2009.

Comment on Tanjong Results (30 April 2009)

Two Thumbs Up!. The below chart and excerpt will speak by itself.

Group revenue for the current quarter increased to RM979 million, a 21% or RM169million increase over the corresponding quarter in the previous year (“corresponding quarter”). Group operating profit is, at RM338 million, higher by RM68 million.

Power Generation revenue increased by 21% from RM572 million to RM693 million in the current quarter mainly due to higher capacity and energy payments from its Malaysian power plants. The operating profit of the Power Generation segment has increased by RM65 million or 33% to RM265 million in the current quarter due to the aforementioned increase in revenue and lower corporate and business development costs.

Gross sales proceeds from the NFO business increased to RM530 million from RM520 million due to two additional draws conducted in the current quarter. There was a reduction in NFO prize payout ratio from 64% to 63%. The operating profit of the Gaming segment remained at around RM62 million with an increase in totalisator expenses in the Racing Totalisator business.

In the Leisure segment, improved attendances and spending in Tropical Islands together with the contribution from TGV Cinemas Sdn Bhd (“TGV”), (which became a wholly-owned subsidiary on 31 July 2008), resulted in a RM39 million revenue increase from RM35 million to RM74 million in the current quarter. This enabled the Leisure segment to report an operating profit of RM1.2 million in the current quarter as compared to a RM2.2 million loss in the corresponding quarter.

Net investment income has reduced mainly due to the recognition, in the corresponding quarter, of investment gains from the disposal of the Group’s interest in Arqiva amounting to RM62 million.

For the period under review, Group profit attributable to shareholders was lower by RM10 million from RM201 million to RM191 million. Accordingly, net earnings per share was lower at 47.5 sen from 49.8 sen in the corresponding quarter.

Shell Refining Company

Annual report is one of my best source of investment idea. Want to share about my recent read on Shell Refining Company. As the name suggested, this is a refining company.

Number of shares outstanding: 300 mln
Market Capitalization : RM 3,060 mln
Latest price : RM 10.20 / share

The refining capacity has not been growing much. It will do very well when the crude oil is on the rising trend because they are sitting on stockholding gains. You can this below chart, they did very well in 2004, 2005, 2007 but wobbling when crude oil see-saw in 2006 and collapsing in 2008. I believe the profit will swell in 2009 as the crude oil price is rising from low of US $ 40/barrel to almost US $ 70/barrel.



You can see the relationship even clearer in the following chart.



The below table shows you important relationship between rising crude price oil and profitability.



Lastly, they have been very proud of themselves because consistently churning out above industry refining margin.



On the price action, nothing very exciting except one sharp rise in 2004 and have been consolidating for years. The stock price is as cool as cucumber though the crude oil price was shooting through the roof. This stock is not for speculative play but for those who are extremly patient and happy with 5-7% dividend yield. The other option is buy on break-out from RM 11.70 from previous all time high in Sep 19,2005.



Disclosure: No position.

‘Dangerous Time’ to Avoid Stocks, CLSA’s Napier Says

June 25 (Bloomberg) -- Stock investors can look forward to another few years of gains as central banks engineer a return to inflation, providing a tailwind for global markets, according to CLSA Ltd. strategist Russell Napier.

An acceleration in inflation from zero to 4 percent is historically associated with gains in stocks as the benefits of rising prices accrue to profits instead of labor earnings or debt holders, said Napier, the author of “Anatomy of the Bear,” a study of bear markets.

The best bets for investors remain Asian equity markets, which are likely to be driven by domestic demand-related growth and will be less affected by problems in Western countries, said Napier, Institutional Investor’s top-ranked Asia strategist from 1997-1999.

The 10-year price-to-earnings ratio of the S&P 500, another long-run indicator of stock values, was 15 percent above its average, according to Smithers and data compiled by Yale University’s Robert Shiller.
Napier counters that central banks have the ability to manufacture inflation, citing a Milton Friedman comment that “inflation is always and everywhere a monetary phenomenon.”

The U.S. M2 money supply, the broadest indicator currently tallied by the government, has climbed 1.9 percent in 2009 from the year after logging a 9.6 percent increase in 2008.

“Because they’re printing so much money and because they’ve seized control of the commercial banking system I think we’re likely to get strong money growth,” Napier said. “It wouldn’t surprise me at all if the main inflation we get is in asset prices.”

http://www.bloomberg.com/apps/news?pid=20601213&sid=axHWS_QU0OCQ

As long as the US markets move side way or with a bit of rise, I do think Asian stocks are going to rally.

B(R??) I C still the best place to be?

3 out of 4 BRIC are still the best place to be in terms of growth. I believe Asia Pacific as well but I could not find my reading source in term of % growth rate. I still believe emerging markets growth story. It will be the source of globla growth while the advanced countries are wounded. I do not believe globalization is dead, sooner or later, emerging markets will have spill over effects on advanced countries(when their currencies are cheap enough, strangely). If I can find time over the weekend, I will elaborate further.

Moody's: USA still AAA - for now

(MoneyCNN)TOKYO (Reuters) -- Moody's Investors Service said on Tuesday that the U.S. government's triple-A credit rating was safe but added that it could be at risk if Washington were unable to bring its public debt back to a downward trajectory.

http://money.cnn.com/2009/06/23/news/economy/moodys_aaa.reut/index.htm

Am I shock? No, absolutely not! Any comment ? No comment. What do you think my readers? Leave me with some comments.

Moments spent with your children are priceless

(The Star) “Sacrifices generally have to be made for unusual success – whichever career path you follow,” Johnson wrote.

“And for those inventors and corporate pioneers whose life is their business, then it is all too clear where their ultimate priorities lie.

“Yet almost every entrepreneur I have known regrets not spending enough time with their children when they were growing up.”

VS.

We have clocked up 16 years of being full-time homemakers. Our well-meaning friends, especially financial planners and unit trust consultants, like to talk about our foregone income.

They tell us that the reason we cannot send our children for an overseas education is that we did not build up our financial nest when we were most able to.

http://biz.thestar.com.my/news/story.asp?file=/2009/6/22/business/4122361&sec=business

Do we always have to make tough choices ? Career(business) vs. family ? I am not trying to preach to anyone but just express personal opinion. To begin with, I don't think I am a perfect father. With that qualifier, as usual, let me make some pragmatic comments. Most people will think every consequence is a result of our own decision. In another word, they think you always have a choice --- to choose career or family. In real life, it is not so simple. We all born with equal rights but not equal talents. Some will end up as millionaires, billionaires, some will end up with something else -- forever cannot meet the ends.

If one is an entrepreneur, they will constantly battle with all kind of problems, mortgage whatever they have to build a successful business, it may be easy for others to do arm-chair critic saying they have a choice -- give up everything and spend some time with their children. If they hit a roadblock, it not a choice to balance (win-win)but it's a win-lose proposition -- concentrate 100% to remove all obstacles or get wipe out. If know many friends got wipe out more than once before suceeded in business.

If one needs to hold 3 jobs to cope with the family expenses, again are you going to tell the poor chap to reduce 3 jobs to 1 job - reduce one house to 1 room, 3 meals to 1 meal? Think about that.

My pragmatic view is try to live to the fullest if you have rich parents. If one has poor parents, do not be disheartened, accept the shortcomings, fight to break the vicious cycle.

To those with comfortable job but not spending enough time with their children -- shame on them. Boo....boooo......

Happy belated Father's Day!

How to drive American nuts?

How to drive American nuts? Easy, very easy .... just tell them they are not number 1. Soon China will overtake America on investment spending.



http://www.economist.com/businessfinance/displayStory.cfm?story_id=13871154&source=hptextfeature

Maybank Research, AmResearch maintain sell call on Star

(TheEdgeDaily)KUALA LUMPUR: Maybank Investment Equities Research and AmResearch Sdn Bhd have maintained their “Sell” recommendation on Star Publications (M) Bhd at RM3.18 with target prices of RM2.54 and RM2.40, respectively.

http://www.theedgemalaysia.com/business-news/16807-maybank-research-amresearch-maintain-sell-call-on-star.html

Most of students of Warren Buffett will be attracted by newspaper stocks because of him making a big fortune in his Washington Post investment. However, Internet development has posted extremely tough conditions to newspaper operators. I have been following the Star for a while though this stock has NOT been exciting as they are quite poor with their capital management -- not return[ing] money to shareholders when they don't have good idea to deploy their cash. They got itchy trying regional expansion as domestic market is just too small.

The Star announced they acquired 20% of 701 SOU Hong Kong, a new online directory services provider in China for S$5 million (RM12.2 million) from SPH Interactive International (SPH). SPH is one of the successful leading newspaper companies in Singapore.

This is how the online directory look like.



This product launched in China last November, 701Sou.com is attracting an average monthly visitor rate of six million and a return visitor rate in excess of 28per cent.

The start up losses unlikely to dent any of the Star earning but they are sending a very dissapointing message to those hoping to reap higher dividend. They think the Star will declare 0.14 dividend in FY 09(due to softer adex and funding Singapore event management company Cityneon) vs. previous FY of 0.21. If the stock price reaches their target price of around RM 2.50, the worst case scenario of dividend yield will be 5.6% while normalized level will be around 8.4%.

If one has too much cash in FD, this is not a bad place to put some money at RM 2.50.

Can we invest relying on gut feeling?

My recent post of "can you sleep soundly at night" is resting on a theory of trusting your gut. What is gut feeling ?

"an instinct or intuition; an immediate or basic feeling or reaction without a logical rationale" - Wiktionary

Great trader like George Soros relying a lot on instinct to complement his theoretical framework.

“I rely a great deal on animal instincts,” he wrote in his 1995 book, Soros on Soros. “When I was actively running the fund, I suffered from backache. I used the onset of acute pain as a signal that there was something wrong in my portfolio. The backache didn’t tell me what was wrong – you know, lower back for short positions, left shoulder for currencies – but it did prompt me to look for something amiss when I might not have done so otherwise.”

His body will warn him of danger ahead, though it might not know very specifically what went wrong, he just know something is wrong. He will search very hard of what could possibly goes wrong and retreat way before the crowd gets it right.

A new investor should not and never use gut feel because their perception has not sensitized with enough experiences yet. Experienced investor that accumulated with too much knowledge about markets, companies, crowd psychology, economic indicators, etc may want to use their gut feel [to] break analysis paralysis. What do you think?

Obama: 'A sweeping overhaul'

Keeping this for future reference -- one of important milestones to prevent financial crisis recurrance. I picked the key points from money cnn.

"We did not choose how this crisis began. But we do have a choice in the legacy this crisis leaves behind," Obama said. "So today, my administration is proposing a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression."

1. One of Obama's more drastic moves would be to abolish the embattled Office of Thrift Supervision and merge it with the Office of the Comptroller of the Currency.

2. Two regulators would get expanded powers under the Obama proposal: Treasury and the Federal Reserve.

Obama called for the creation of a council of regulators chaired by the Treasury secretary to work alongside the Fed to monitor system-wide risk.

However, the Fed would have most of the power for systemic risk, Geithner said. Top administration officials decided to give the Fed more power after looking at other nations with regulatory councils.

Treasury would also get veto power over Fed decisions to make emergency loans to companies teetering on the verge of collapse. Over the past year, the Treasury has been signing off on such loans. But Geithner said the power should be formalized, since Treasury plays an important role safeguarding taxpayer spending.

3. The White House also aims to tighten up supervision of the securitization markets, requiring firms that originate a security to keep 5% of the "securitized exposure." That means whoever created the financial product would still hold a piece of it, even as it got resold, and would have some interest in its ultimate performance

4. Rating agencies have been blamed for exacerbating the financial crisis by giving top ratings to bad financial products. The official speaking Tuesday did not offer details as to how rating agency oversight might be toughened.

5. Finally, the White House plans to build on the role of the Federal Deposit Insurance Corp., now charged with taking over bad banks, and give it and other regulators more power to take over and unwind other kinds of troubled financial companies beyond banks.

Boon is back posting

Just a very short announcement: Boon of BHC Investment is back posting. Good to hear that he is back in good spirit. I wish him and his family well.

Key test: can you sleep well at night

JP Morgan used to have a friend that so worried about his stock holding. He asked him "what should I do ?" He replied "Go and sell your stocks". A few days later, his friend still asked him the same question, his reply was simple " Go and sell your stocks". The frustrated and worried friend asked him what was his point. You need sell down your stock to your sleeping point to match your risk tolerance. If you have taken too much risks, then reduce it to a point that you can sleep soundly at night. I am not suggesting you should or should not do it, only you yourself know what is your risk tolerance. I still can sleep well though the markets are correcting so there is no real concern yet and I know I have not taken excessive risks.

Say One Thing but Do Another Thing

This was what they(Russian) said:

June 15 (Bloomberg) -- The dollar rose the most in a week against the euro after Russia’s Finance Minister Alexei Kudrin said the nation has full confidence in the U.S. currency.

http://www.bloomberg.com/apps/news?pid=20601083&sid=a6MOljSewiLk

This was they did:

June 15 (Bloomberg) -- International demand for U.S. financial assets grew more slowly in April as China, Japan and Russia trimmed holdings of Treasuries, a shift that may reinforce concern demand for American debt will wane amid record deficits.

http://www.bloomberg.com/apps/news?pid=20601083&sid=aRADYHh._dKQ

This was what happened:



This is what I should do:

TA ANN -- Deteriorated Fundamentals

I spent some time going through Ta Ann annual reports to assess whether there are any gems to be picked up. I was debating whether I should publish what I learned as I concluded that Ta Ann fundamentals have deteriorated mainly due to very unfavorable macro-economics. Today's post is about what not to buy and not what to buy. Read on if you are interested.

Basic information

52wk Low RM 2.20 52wk High 7.45, last closing price 4.60, up 110% from low.

Market capitalization : 984 mln, shares outstanding 214 mln

Ta Ann has three core businesses if you look their 2008 revenue contributions - manufacture and sale of plywood (52%), palm oil(25%) timber concessions, harvesting ans sale of logs(17%).



The logging business is a very profitable business with profit margin of 20-25%, with the CPO hanging around 2,000 - 2,500, it's a low 20% margin. Unfortunately, plywood segment is the biggest revenue contributor but it has most volatile profit margin. You can see the profit has shrunk tremendously despite of the management implement a lot cost cutting measures.



Cost of good sold sky-rocketed due to higher material input, glue and diesel costs. It was really a disaster in 2007, 2008 and going into 2009. The pricing power has been poor due to very poor demand especially their end market is Japan.



See below chart, disastrous Japanese housing starts though it has shown some stabilization.



Gearing was around 0.12x in 2004 but has gone up to 0.55x, debts incurred for plywood and plantation business.

With the margin collapsed in Q1 2009, I feel the share price ran way ahead of itself.



Even the profit can go back up to RM 90 - 100 mln range, the share probably worth about RM 5 - RM 6 / share. Even though the appetite for commodity related stocks is improving, I may consider below RM 3 / share. The rationale mainly due to bigger contribution from plantation and stable logging business while waiting for plywood business to recover.

7-S Framework adapting management model for investing, Part 3

There are countless tests can be found if you Goggle Investment Personality. The one that I like better is designed by Mark Tier. He is basically thinks that there are three primary personalities: Analyst, Trader and Actuary.

The Analyst is personified by Warren Buffett. He carefully thinks through all the implications of an investment before putting a single dime on the table.

The Trader acts primarily from unconscious competence. This archetype, epitomized by George Soros, needs to have a “feel” for the market. He acts decisively, often on incomplete information, trusting his “gut feel,” supremely confident that he can always beat a hasty retreat.

The Actuary deals in numbers and probabilities. Like an insurance company he is focused on the overall outcome, totally unconcerned with any single event. The Actuarial investment strategy is, perhaps, best characterized by the legendary investor Benjamin Graham. It’s also the basis of most successful commodity trading systems.

You may want to visit http://marktier.com/Main/ipp.php to learn a bit more.

You can also take a test to tell you what is your natural investing personality at http://marktier.com/ipp1/qpage.php

The other site that I found useful to determine

Your investment experience and knowledge
Your self-confidence
Your ability to cope with stress and use your emotions to your advantage
Your capacity for assuming risk
Your preference for solving problems in a group or on your own

The link is http://www.capitalinternational.ca/action/KeysToInvesting?page=InvIPQ

Disclosure: I am not associated with anyone of them.

7-S Framework adapting management model for investing Part 2(Correction)

A reader corrected me Warren Buffett is a Virgo not Leo, that's show I am really not into Zodiac stuffs.



I will be back with more scientific stuffs on personality soon. Take care.

7-S Model, adapating management model for investing Part 2

Before I talk about investing strategy, let's touch on one common topic: know thyself. Do you know yourself well? Some people has no clue of who they are and resorted to Feng Shui, astrology and etc. For the fun of it, let me just post astrology signs personality.





Warren Buffett born on August 30, 1930 --- so he is a Leo. Does that fit him?

George Soros born on August 12, 1930 -- so he is also a Leo.

Same star both are billionares but different investing style ..................... say goodbye to our personality theory ............................. flush it down to the toilet???

7-S Framework adapting management model for investing, Part I

I read two books a long time ago called "The Art of Japanese Management by Richard Pascale and Anthony Pathos and "In search of excellence" by Tom Peters. They mentioned organization not just structure but consists of 7 interconnected elements.





I am sure many of you would have seen this in a typical strategic management textbook. What it means you need every element to harmonize with each other. If you have these elements clashing with each other, then the results will be disaster. If your strategy is to be a cost leader, then you have to make sure that your structure, system, staff, etc to align with each other. You got make sure you hire someone to be very detailed, very strong operationally, penny pinch culture, be ruthless to cut cost(no loyalty to suppliers for example), formal structure and strict reporting system, etc. They style will be very button down, forget about flexi-hour, working from home, big canteen serving free flow Coke and etc. If you hire Steve Job to execute this strategy, then I am pretty sure you know what will be that outcome.......fail! Bill Gate will probably do a better job.

I will be back to post on how to apply 7-S to investing. I got a feeling many of my smart readers already know what I am going to say but never mind I will go ahead to state the obvious. See you soon.

Is everybody getting tired ?

I'm getting a bit tired posting around the same subject. I believe we are going through a transition period with a lot of mixed signals before we all can see green lights. Flipping with good news and bad news for a sustained period will cause fatigue or indifference. I have a similar feeling when I read on regular posts by other bloggers --- everyone seems to run out of subject to blog. However, as any experienced marathon runner will know that you got to keep going to breakthrough through the wall. You might want to take notice of this sentence:

(Bloomberg) Fed funds futures contracts show a 58 percent probability of a rate increase by November on signs that the economy is bottoming.

http://www.bloomberg.com/apps/news?pid=20601109&sid=atcGwpCBRaSU

Financial panic is easing.

June 9 (Bloomberg) -- The U.S. Treasury approved 10 banks to buy back $68 billion of government shares, reducing officials’ authority to intervene in everything from lending and hiring strategies to compensation policies.

“These repayments are an encouraging sign of financial repair, but we still have work to do,” Treasury Secretary Timothy Geithner said in a statement released in Washington today.

Today’s decision reflects rising pressure from banks to free themselves of government stakes that left them vulnerable to political interference, following a popular outcry against Wall Street bailouts.

The Treasury didn’t name the banks. JPMorgan Chase & Co. is among those allowed to repay Troubled Asset Relief Program money, a person familiar with the situation said yesterday. Morgan Stanley said it is among the group, in a release within minutes of the Treasury’s announcement.

Goldman Sachs Group Inc., American Express Co. and State Street Corp. are among those that have sold shares and debt unguaranteed by the government, steps officials have sought to demonstrate lenders can go without federal stakes.

Let me open my card. I don't believe we will have 3 - 5 multi-year bull run but 1-2 year is entirely possible.

Turtle Portfolio Record Housekeeping

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Now, why bought into Tanjong? Trying to cut a long story short. Defensive nature of power business and gaming plus 6-7% dividend yield. Not many stocks qualified for buy and hold, this is one of them. Recent Egyptian plants refinancing costs charged out as expense caused profit declined in the last financial year quarter plus people going after higher beta stocks will encourage people liquidate lower beta stock like this present a good opportunity to accumulate. The stock has rather been resilient throughout the crisis except a sharp drop in October 2008 but recovered pretty rapidly.

Turtle bought 200 shares of Tanjong Plc

Turtle bought 200 shares of Tanjong PLC at RM 13.5/share.

Overly pessimistic on US dollar?

Just looking at the present data in term of federal debt to GDP for the US is not as bad it's seems. However, looking into future, from Bill Gross's tone, is very worrisome:

Private sector deleveraging, reregulation and reduced consumption all argue for a real growth rate in the U.S. that requires a government checkbook for years to come just to keep its head above the 1% required to stabilize unemployment. Five more years of those 10% of GDP deficits will quickly raise America’s debt to GDP level to over 100%, a level that the rating services – and more importantly the markets – recognize as a point of no return. At 100% debt to GDP, the interest on the debt might amount to 5% or 6% of annual output alone,.......

...... promise that Federal spending for Social Security, Medicare, and Medicaid will collectively increase by 6% of GDP over the next 20 years, leading to even larger deficits unless taxes are increased proportionately. Collectively these three programs represent an approximate $40 trillion liability that will have to be paid. If not, you can add that present value figure to the current $10 trillion deficit and reach a 300% of GDP figure – a number that resembles Latin American economies such as Argentina and Brazil over the past century.

The obvious solution to both dollar weakness and higher yields is to move quickly towards a more balanced budget once a sustained recovery is assured, but don’t count on the former or the latter. It is probable that trillion-dollar deficits are here to stay because any recovery is likely to reflect “new normal” GDP growth rates of 1%-2% not 3%+ as we used to have. Staying rich in this future world will require strategies that reflect this altered vision of global economic growth and delevered financial markets. Bond investors should therefore confine maturities to the front end of yield curves where continuing low yields and downside price protection is more probable. Holders of dollars should diversify their own baskets before central banks and sovereign wealth funds ultimately do the same. All investors should expect considerably lower rates of return than what they grew accustomed to only a few years ago. Staying rich in the “new normal” may not require investors to resemble Balzac as much as Will Rogers, who opined in the early 30s that he wasn’t as much concerned about the return on his money as the return of his money.

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2009/IO+June+2009+Staying+Rich+in+the+New+Normal+Gross.htm

Will the US debt goes over 300% GDP? Do I have worry? Yes I do but let's hope the decline will be gradual and orderly. However, living in Asia makes me feel better hoping our currency will rise against them.

Am I getting complacent?

After I made a U turn from bearish to bullish sometime in March '09, commodities, emerging market and equities continue to race ahead. There are people caution us not to get complacent. Am I getting complacent? It's always good to check our thinking and mood, never ever trust yourself. The way I do self examination is looking at facts honestly.


(Click on the chart to enlarge)

My simple reason was people are still fearful, instituition pros are still fearful though not overly feaful. Their asset allocation for equities have not reached 70-80% which is an excellent time to short stock. Cash level has not reached typical complacent level yet.

My past experience taught me I must buy when there is blood on the street. The second important lesson is continue to buy if I can find cheap stock(after Index goes up quite a bit(20% or more from bottom) though it is getting harder. The final stage, which is most dangerous stage when everyone is talking about stocks. If you have friends that are conservative and not buying stock now but they suddenly feel a lot more secure getting into buying stock, talking about PE 15 - 18 X is cheap and etc, that is the time we got to be very worried.

Goldman oil forecast

(Money CNN)Goldman Sachs (GS, Fortune 500) raised its end of 2009 oil price forecast to $85 a barrel from $65 and introduced a new end of 2010 forecast of $95.

"The recent rally in WTI (U.S. crude) prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity," Goldman said in a research note.

http://money.cnn.com/2009/06/04/markets/oil.reut/index.htm?postversion=2009060408

Is it true that economic activity recovered? The signs are getting better.

June 4 (Bloomberg) -- The European Central Bank kept its benchmark interest rate at a record low of 1 percent today after first signs of an economic recovery emerged.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8B1TJc.u.As

June 4 (Bloomberg) -- U.S. stocks rose for the fifth time in six days as government reports showed the number of Americans receiving unemployment benefits fell last week while worker productivity increased.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQCvWVZ53mxI

I have no doubt that the economic had hit the bottom but the issue now is recovery rate.

Ah Long

(The Star)KUALA LUMPUR: Some 80% of the 870 cases involving loan sharks recorded by the MCA Public Services and Complaints Department since January last year involved habitual gamblers.

Department head Datuk Michael Chong said these gamblers were “defaulters” and not “victims”.

“By defaulting on their payments, their family members suffered at the hands of the loan sharks.

“These gamblers are defaulters. Don’t call them victims, they don’t deserve to be called victims. Their family members are the victims,” Chong told The Star yesterday.

He said most gamblers got into trouble with loan sharks after losing their bets on international football matches and other games such as roulette, and they needed to continue borrowing to recover the original sum.

“If he loses RM1,000, he will borrow another RM1,000 to recover the loss. When he loses that, he will then need to borrow RM2,000 to recover the original RM2,000.

“All of them never think. They only think of paying back their debts by winning from gambling,” he said.

However, Chong said most of the time, the complainants would not admit to being gamblers until they were coaxed or exposed by their family members.

He said the department had advised the complainants in 95% of the gambling-related loan sharks cases to “disappear and not return” until they had enough money to pay back their principal sum.

“In some cases, their families have disowned them for repeatedly getting into trouble with loan sharks.

“In fact, less than 5% of the cases we handled have been able to immediately and fully settle their principal sums,” he said.

I agree that these guys do not deserve sympathy. If this were to happen to my friends and relatives - brothers, sisters, father, mother, grand-father, grand mother, etc. I will not step in to help, simply because we cannot condone wrong doing.

There is a difference between a guy needs capital to earn a living (micro-credit) and a guy seeking an easy way out. Those small timers seriously wanted to start small new business will work damn hard not to default and keep paying back their principal. These group of people deserve assistance. I heard on the radio this morning the government considering setting up a fund to help, I think it's a waste of time. They need to get down to the root before jumping the gun.

Why am I not selling out my position ?

I have been reading other people views that record high insider selling, earning dilution by converting debt to equities and overbought conditions should invite correction. The question is how deep will the correction takes place, if it is shallow and going up very quickly, selling out now and not buying back fast enough will miss more gains. Worse still when it goes up a lot higher that trigger us to buy at higher price and correction sets in will cause us to lose money-lah. One interesting view by Marc Faber is this:

"I believe that a correction should unfold in the period directly ahead, but that the market lows we reached either toward the end of last year (in most emerging markets) or in March of this year (in most developed markets) should hold. Also, the correction I expect could take the shape of a sideward movement in the major averages, or even not occur at all. After all, I can assure my readers that there are lots of big institutions out there that completely missed the powerful rally since March 6 and are now nervously waiting for the market to come down. Should markets not correct on the downside, these investors could lose their patience and their sudden rush into long positions could lead to another stock market upside explosion."

By declaring my saving going back to $ 888 from $ 620 (see May 30 entry) is demostration of my conviction to hold a similar view.