Just for Laughs

One day, Jimmy Jones was walking down Main Street when he saw his buddy Bubba driving a brand new pickup.Bubba pulled up to him with a wide grin. 
"Bubba, where'd you git that truck?"   "Tammie give it to me." Bubba replied. "She give it to ya?
"I know'd she wuz kinda sweet on ya,but a new truck?" 

"Well, Jimmy Jones, let me tell you what happened. 
We wuz drivin' out on County Road 6, in the middle of nowheres. Tammie pulled off the road, put the truck in 4-wheel drive, and headed into the woods. She parked the truck, got out,threw off all her clothes and said, 'Bubba, take whatever you want.' 

So I took the truck!" 





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Four brothers left home for college, and they became successful doctors and lawyers. One evening, they chatted after having dinner together. They discussed the 85th birthday gifts they were able to give their elderly mother who moved to Florida .

The first said, "You know I had a big house built for Mama."

The second said, And I had a large theater built in the house."

The third said, "And I had my Mercedes dealer deliver an SL600 to her."

The fourth said, "You know how  Mama loved reading the Bible and you know she can't read anymore because she can't see very well. I met this preacher who told me about a parrot who could recite the entire Bible. It took ten preachers almost 8 years to teach him. I had to pledge to contribute $50,000 a year for five years to the church, but it was worth it. Mama only has to name the chapter and verse, and the parrot will recite it."

The other brothers were impressed. After the celebration Mama sent out her Thank You notes.

She wrote: Milton , the house you built is so huge that I live in only one room, but I have to clean the whole house. Thanks anyway."

"Michael, you gave me an expensive theater with Dolby sound and it can hold 50 people, but all of my friends are dead, I've lost my hearing, and I'm nearly blind. I'll never use it. Thank you for the gesture just the same."

"Marvin, I am too old to travel. I stay home; I have my groceries delivered, so I never use the Mercedes.The thought was good. Thanks."

"Dearest Melvin, you were the only son to have the good sense to give a little thought to your gift. The chicken was delicious. Thank you so much."

Love,
Mama

Which type of Investor are you ?

A good friend of mine once asked me this simple but very pertinent question

Is there a one size fits all style of trading or investing in the stock market ? Interesting question considering that we all know that there are countless methods ranging from the software based "scientifically" packaged to the rule of thumb guess work style adopted by many. 

That said I would like to add my 2 sen worth as follows....

Instead of deciding on any one style it may be better to categorise stocks according to their historical movement trends  and only then decide on the best method to apply....A practical but realistic approach may be as follows...

Heavy weights ( blue chips ) : These are fund managers favourite haunts and hence the the fundamental analysis based method may be most suitable. Changes in performance  ( profits /div yields ) will affect the share price. So it is only logical one should pay close attention to such data and analyst writeups...

Growth stocks : These "aspiring " counters are plentiful and are the favourites of middle level investors, mainly individuals who love a good story line and will lap up well researched reports. As the mix between mid term players and short term opportunists are quite balanced here ,the best suited method could include a combination of technical analysis, fundamental analysis and other momentum based techniques...

Lower liners ( speculative ) : These are the volume kings and form the main stay of top 20s day in day out. Being mainly retail based and where price movement not necessarily driven by fundamentals nor corporate developments, momentum or trend based trading methods are most suitable. Imagine trying to apply fundamental analysis on a PE 100 stock and trying to "justify " its share price climb...You either join the band wagon or sit out the bulk of the trading action everyday in a bear and quiet market as is the case now....

In short it may make sense to know the type of trader or investor you are before you worry too much of the trading methodology.

The above is an article by Chris Choo of Jupiter Securities. Chris will be holding a talk on "Price Action Technique" in selecting winning stocks for intraday and short term trading this coming December 15 (Saturday) from 9am to 1pm at Jupiter Securities Sdn Bhd, Level 9, Menara Olympia. Contact customer service for more information.

AIRASIA - Good Buy or Goodbye

AirAsia’s 3QFY12 net profit stands at RM163.9 mil, dropped by 10.4% compared to the previous year. The decline was mainly attributed to the higher start-up losses in its Japan and Philippines associates and delayed recognition of airport incentives which amounted to RM22m in 3QFY11. In other parts, Thai AirAsia reported an increase in net profit of +3%yoy to THB199.1m and contributed RM9.0m to the group in 3QFY12.

According to management, the group will launch more new routes and increase frequencies on a few routes for FY13 upon taking delivery of 28 A320 aircraft in 2013 (+7 from 21 aircrafts guided previously), which will be deployed in Malaysia (10), Thailand (9) and Indonesia (9). Next year, the group will add 4-5 aircrafts for AirAsia Japan and 3 aircrafts for AirAsia Philippines.

November 2012 Call and Target Price by Research Houses

MIDF  -  Maintain BUY with unchanged target price of RM3.84

TA  -  Maintain BUY with a revised lower target price of RM3.50

RHB  -  Upgraded to OUTPERFORM with fair value of RM3.61

OSK  -  Maintain BUY call with a target price of RM3.39

KENANGA  -  Maintain BUY call with a lower target price of RM3.07

HWANGDBS  -  Maintain HOLD with a targer price of RM2.90

CIMB  -  Maintain HOLD with a target price of RM3.00

AMMB  -  Maintain HOLD with an unchanged fair value of RM2.80

Will the entry of Malindo Airways in 2013 pose a significant treat to AirAsia. It is a fact that there is a certain over reaction by the market to the Malindo news which causes the stock price to dive. AirAsia reiterated that low cost is its key weapon against any new competitor.

AirAsia is last traded at RM2.83.

KLSE - Coffee Talk

Looks like another dreadful day ahead. The KLCI is back above 1600 pts eventhough most of the 2nd liners are zzzzzzzz. Somehow, our KLCI never fails to perform better compared to other countries. Reasoning is simple. There are over a thousand counters in KLSE but the CI is only made up of 30 big stocks and a few big moves on these stocks will bring the CI rallying up. Very smart move .... Malaysia Boleh.

Tiger was down by more than 10% this morning with about 30 mil shares done. We see some upside activity back into Astro after some recent positive coverage by analyst and press. Its still trading below its IPO price. Other than that, the market is generally flat.

CLASSROOM - Cut or Hold

Sometimes the best offense is a great defense. Understanding the importance of capital preservation is primary in any stock investment. There is no way to win all the time, so we need to have a strong predetermined defense to protect against large losses in any unforseen circumstances (such as market crashes, wrong investment decisions, speculations etc.) which, sad to say happens too often these days. The secret to winning in the stock market is to lose the least amount possible when we made the wrong decisions or in event of a drastic market change due to factors beyond our control. No matter how smart we think we are or how good we believe the information or analysis is, we simply are not going to be right all the time.

When we think about selling a stock, the first thing we do (i'm pretty sure all of us does the same thing) is to look at the records to see what price we paid for the stock. We may sell if there is a good profit. If it is a loss, most of us would rather wait than to take the loss. There is an undying belief that as long as we hold on to the stock, the loss is not incurred. Though we logically understands that this is totally naive thinking but for most investors (including yours truly), the HOPE that the price might come back up at least enough to break even is too strong to let go. After all, we didn't invest in the market to lose money.

The question is, what if the price keeps dropping ?. Should we buy more (get stuck with more shares) to average down ?. There are several key factors to consider before putting more money into the stock. Firstly, we need to know what triggers the initial investment. Is it due to fundamental or speculative reason. It will be more risky if it is the latter as most speculative counters are just hit and runs (if you know what i mean). But then again, fundamental counters can also be speculative. A good judgmental call would be, would you buy the stock at the current price if you are NOT holding any ?. If the answer is a firm NO, then there should be no reason to put more money into averaging down. Cost averaging is considered a good long term investment practise (more so if the price drop is due to broad market forces and not company performance related) for quality/blue chip stocks as you are buying it at a discounted value. A good stock will always rebound from its low, it is just a question of time.

There is an old investment saying "take your losses quickly and profits slowly", yet most investors get emotionally confused and take their profits quickly and their losses slowly. Its in the case of "once beaten, twice shy".