MALAYSIA NATIONAL DEBT CLOCK

Our national debt (consisting of all govt borrowings) explained in a timely, simple and informative manner using a debt clock.

The site can be found here.

Today 28/6 is RM613Bil ++ 

The 4 Diseases of Investing

Teaminvest Co-founder Professor John Price, recently recorded an informative 4.5 minute video about the behavioural biases that often block rational decision-making about investments.

It’s titled “The 4 Diseases”. In the video he explains the four common behavioural biases and fuzzy thinking affecting the way we assess investments. He calls them:

Get even-itus
Consolidatus-profitus
Trade-a-filia
FOMO

Watch the video and see if you suffer from any of them? - Self awareness will improve your investment decision-making!

Click here to see video

NOTES: Stock selection - Read the annual reports - Read all the analysts reports - Visit the stores or use their products and services If you find that at the end of the day, the performance of the portfolio is not that good, or mediocre at best, in many cases there are various reasons. They often have not taken into account behavioural biases, the sort of fuzzy thinking that is automatically in their mind that blocks out their rational decision. These are the 4 behavioural biases, which we refer to them as:

• Get even-itus
• Consolidatus-profitus
• Trade-a-filia
• FOMO

Get even-itus

The disease of hanging onto a stock when the price has gone down until you can get even. "Don't worry dear, it is going to come up back again." The problem is, if the stock has gone down, the chances are it is going to continue to go down and best it is going to be a mediocre investment. It is much better to face the fact that you have a loser, you lost money and to move on.

Consolidatus-profitus

This is the opposite to get even-itus. This is the disease of always taking a profit when the price goes up. It looks great and you can tell your friend at the dinner party that your stock went up 20%, 40% or 50% and you sold it. The problem is what you are going to do with that money. Studies have shown, on average, people who sell just to take a profit end up putting their money back into the market in a stock that underperforms the one they got out of. #

Get even-itus and Consolidatus-profitus are two sides of the one coin; generally hang on to losers and sell winners. The opposite would be better, that is, sell your losers and hold on to your winners. They water the weeds and cut the flowers. It would be better they water the flowers and cut the weeds.

Trade-a-filia

This is the disease of just loving to trade. Most people who would never dream of going to casino betting on roulette or any of the casino games or machines,yet when they are on their internet and looking at their stocks, they trade far too often. It is so simple to trade on the internet and they get drawn into it. But studies have shown that on average, the more a person trades they worse they do. I am not referring to their transaction costs but actually their performance diminishes. Instead of looking for great companies that are going to make you money year after year, they think they can get a short term profit. In the short term, the share prices are much more random than most people believe. So this is a disease of trading too often. In this regard, women are better investors than men, because overall, women trade less than men.

FOMO

This is the 4th disease, the FEAR OF MISSING OUT. You read about a particular stock and its price is going up and you think, if I don't get in now, I am going to miss out, instead of taking your time and evaluating the stock properly.

These 4 diseases really work together and at best give you a mediocre performance that is far far below you optimal performance.

You should work to eliminate these 4 investing biases or diseases, consciously. Use tight filters to filter out the best companies to concentrate in.

Be alert that you are not slipping into these investment biases. Eliminate these investing biases and your performance will be much better.

Source: http://myinvestingnotes.blogspot.com/2015/06/the-4-diseases-of-investing-evenitis.html

Why is the value of the ringgit falling?

How low has the ringgit fallen?

Before closing on 3 December 2014, the ringgit dropped to as far as 3.4455 to the US dollar – the weakest it had been since February 2010.

In the first quarter of 2015, the ringgit’s value continued to weaken. On 11 March 2015, the ringgit traded at 3.7105 to the dollar. The Malaysian Insider reported that there was the perception of a “looming crisis”, with the value of the ringgit being close to 1997 levels.

On 8 June 2015, the ringgit dropped to 3.7743, the lowest since January 2006. On 9 June 2015, it fell to its lowest value against the Singapore dollar in 30 years, trading at RM2.77 to the dollar.

How big was the drop and when did it start?

On 1 December 2014, the ringgit had its largest two-day depreciation since the 1997-98 Asian financial crisis, falling 2.4% to 3.4300 to the US dollar at closing, from 3.3465 per US dollar on Thursday 27 November at closing.

On 12 June 2015, it was reported that the ringgit had dropped for four consecutive weeks in the year’s longest losing stretch so far.

What caused the drop in the ringgit’s value?

Bloomberg reports that the depreciation is a ripple effect and “reflection of the absolute collapse in oil.” As oil is one of Malaysia’s main exports, the declining price of Brent crude oil of 38% from its June 2014 high is affecting the currency.

The falling value of the ringgit in June 2015 has been attributed to the prospect of the US increasing its interest rates. Some people (for example former Finance Minister Tun Daim Zainuddin) have also laid the blame at the 1MDB financial debacle. Deputy Finance Minister Datuk Ahmad Maslan in turn has blamed the former Prime Minister Tun Dr. Mahathir Mohamad’s criticism of the government for the weakening currency.

What caused the drop in oil prices?

Oil prices have fallen because supply has been exceeding demand, mostly due to high production of oil in the US. The price of Brent crude oil has now fallen to a four-year low. OPEC (The Organization of the Petroleum Exporting Countries), has so far declined to cut back on its production of oil too.

In June 2015, Bloomberg reported that the world is facing its longest oil glut in three decades as supply continues to outpace demand.

What is the fall out of the weakening currency?

The Bloomberg report states that the government is “already under fiscal pressure” and the central bank may be willing to accept the ringgit weakness to boost other exports and offset the drop in oil prices which will undoubtedly impact the economy.

Channel News Asia reported that “lower oil prices will impact Malaysia’s trade and fiscal balance negatively.”

As of June 2015, the credit ratings agency Moody’s continues to give Malaysia a positive outlook, but the Fitch credit ratings agency has given Malaysia a negative outlook. Fitch is threatening to downgrade Malaysia’s credit rating.

What are the predictions for the ringgit?

In December 2014, Credit Suisse Group AG lowered its three-month ringgit forecast from 3.38 per dollar to 3.49 per dollar. Reuters reported that the ringgit would continue to fall until oil prices stabilise.

In December 2014, Channel News Asia report reported that oil prices will only “stabilise by the middle of next year and may go up toward US$80-85 into late 2015”, so they foresaw a rebound for the ringgit late into 2015.

In 2015, the ringgit’s value has weakened month on month, apart from some slight relief in late April when the currency strengthened. However, since late May, the ringgit has again seen a sharp decline in value.

As of June 2015, central bank governor Dr Zeti Aktar Aziz believes the weakening currency to be a short term problem. On 19 June 2015, the ringgit pulled back against the US dollar with an uptrend, its value rising to 3.7050/7090 per dollar.

Mabel Ho and Ling Low


First published December 2014, updated March 2015 and June 2015.

Source: http://poskod.my/cheat-sheets/6-things-know-falling-ringgit-value/

VIDEO - GMT RESEARCH ON AIRASIA

On Vimeo a teaser video by GMT Research was released giving a few (but not all) of the hot issues that the co has raised on AirAsia.

The video can be found here.

Off late, it is not facts or accuracy that matters but just the need to create doubt and influence the investing public in general by viralling the simplistic conclusion.

It allows the simple minded investing public in general to connect the dots between the entities. They will assume and judge it as one plus one equals two and that is all to it.

Another video from Bloomberg TV -

Compounding the fact there is a weak market for some months now, it is no wonder GMT Research chose this as the time to expose the weakness in AirAsia. Hence, the willingness to sell AirAsia shares.

Analyzing My Worst Loss Yet

My comments: Folks this is a real life story of a trade that went horribly wrong. The stock is a US stock. He made some horrible trading mistakes that all of us can make if we are not careful and let our guard down. I just like the way he wrote it, in all honesty and sincerely. Enjoy the reading and learn the lessons.

Hold and hope is not a strategy. I honestly have lost count of how many times I've told people this, yet it is the very situation I allowed myself to fall into earlier this year. The end result was this nasty $60,000+ loss.

Early in 2014, I was just beginning to trade listed stocks a bit more actively, and the setup that I decided to focus on was buying afternoon breakouts. I had a clear set of criteria for what I was looking for: I wanted the breakout to occur after 2:30, I wanted the stock to be trading well above its average volume, and I wanted the stock to have had at least one hour of consolidation since its last high. Below are a few examples that demonstrate the action that I was looking for:

On February 13, 2014, I believed that I found a similar setup in the making. The ticker was GENE, and it had a very strong morning, spiking to a high of $2.36 (twice) and then consolidating. Below is an image of what the intraday chart looked like by 12:30:

The setup looked great. All I had to do was wait for a breakout to occur after 2:30, like my rules dictated. There was only one problem - I wasn't going to be in front of my computer for most of the afternoon, because I was planning to spend it with someone very special:

Despite being in the middle of one of my best months ever, for some reason I REALLY didn't want to miss this play. So I made an impulse decision to put in a "Stop-Limit" buy order right before I left. I set the price range for my order from $2.37-$2.39. For those of you who are not familiar with this type of order, it meant that if GENE hit $2.37 (the new day high), my buy order would become active and purchase shares up to a limit of $2.39. As if one impulse decision wasn't bad enough, I made a second one. I decided to put in 40,000 shares for my order, a HUGE position size for me at the time. Even now, I don't think I ever play listed stocks this large. Once my orders were in, I walked away and went for a ride:

While I was off having fun, GENE's pattern was playing out. Since I had entered automatic orders before I left, I had very little control over WHEN they executed. My rules dictated that it had to be a late afternoon breakout because I had seen many early day breakout attempts fail. When I put my orders in, I HOPED that GENE wouldn't make its move until 2:30 or later. Unfortunately, this did not turn out to be the case. GENE tried to break out at 1:09, was quickly stuffed, and I was now long 40,000 shares in a stock setup that did not at all fit my criteria.

I do not recall exactly what time I returned home, but I know that it was before the market closed. By now GENE had faded under $2.10, and I had been down well over $10,000 unrealized on my position. GENE was bouncing a bit into the $2.20s again, and I decided that I should try to downsize into the bounce. Unfortunately, only about 2000 shares executed, and the stock began to fade again.

It was here that I got stubborn. I did not want to admit defeat and take a five-figure loss. I rationalized, "GENE is still up on the day! It could easily gap up and run more tomorrow!" So I took my 38,000 shares from $2.38ish overnight and decided to hope for the best the next morning, despite the weak close. Here is what GENE looked like at the end of the day:

The following morning, GENE did not offer any relief. The stock gapped down and never could break any higher than $2.05.

It spent most of the day in the $1.90s, and I knew that I was looking at about a $20,000 loss if I chose to cut it. Once again, I let my potential unrealized loss make my decision instead of what the price action was telling me. I looked at the daily chart up to that point and tried to form a plan:

My plan turned into one of "hold and hope." I HOPED that GENE's daily consolidation would form a higher base than the previous low. I HOPED that there would be another press release of some sort that would spike the stock back towards $2.50 so I could take a smaller loss. I never once formed a plan for what I would do if the stock just continued to fade. During these past six months, I just sat and waited for that spike I HOPED I would get to minimize the damage. Instead, I got this:

In hindsight, I probably should have cut the loss when GENE broke below the 52-week lows of $1.30ish. Unfortunately, all I could hear in my head was, "But that will be a $40,000+ loss!" So I kept waiting for some sort of spike. The closest thing I got was a press release and spike on July 7 back to $1.30, which, unsurprisingly, acted as resistance. I once again failed to cut the loss or even downsize. Only when GENE finally broke the new 52 week support of $1.00ish did I decide enough was enough, and I slowly cut my loss into the ensuing fade.

While I made mistake after mistake on this trade, I did do one thing well. I didn't average down. While this loss is my largest to date, it certainly wasn't catastrophic to my account. Where many traders blow up is by continuing to add to their failing position, all the way down to zero. Had I tried averaging down into this with the thought that it couldn't possibly go any lower, my loss almost certainly would have been twice as bad, if not worse.

It is okay to be wrong sometimes, and it is okay to make mistakes. What separates the successful traders/investors from the unsuccessful ones is their ability to learn from them. Don't sweep your mistakes under the rug and forget about them - analyze them and learn from them. The lesson here? Don't ride horses during trading hours.

Short sellers put AirAsia in the crosshairs

   Oscar Siagian | Getty Images

Budget carrier AirAsia has become the latest target of short sellers, with the shares in a tailspin despite analysts saying there's nothing new in a negative research report from GMT Research.

"People don't want uncertainty," said Mohshin Aziz, an analyst covering AirAsia at Maybank-KimEng.

"People get fearful and dump the stock," he added, noting that short-sellers' track record of successfully pushing down shares with negative reports may also be spurring selling.

The type of investors who like to buy into airline shares may also be a factor, Aziz said. "It has a habit of attracting eager beavers," Aziz said.

It is, after all, an old joke: How do you become a millionaire? You start with a billion dollars and invest in an airline.

The stock has certainly reacted to GMT's report; shares were down as much as 12.8 percent in intra-day trade Wednesday, touching 1.43 ringgit ($0.38), their lowest level since 2011 and marking a nearly 35 percent drop month-to-date.

It's not entirely clear what's in the report from GMT, which calls itself an accounting research firm, not a short seller. GMT's website said its report questions AirAsia's "accounting, profit generation, cash flow issues, leverage and group structure," but it didn't release the report to non-subscribers, saying it has a press embargo until June 24.

Several other analysts' reports noted that GMT is setting a target price of around 1.20 ringgit for the shares; those reports cited GMT as questioning AirAsia's solvency, raising the possibility of a dilutive rights issue and concerns the carrier might have inflated aircraft lease income from associates.

For his part, Aziz said there are no new issues in the report .

"We and the analyst community have already deliberated it meticulously," he said in a note last week, adding that AirAsia's accounts were transparent and its auditing firm, PwC, respectable. Aziz rates the stock at buy, with 2.45 ringgit target.

To be sure, one of the GMT accusations cited by analysts carries the weight of a legitimate concern, even if it's not new; the parent company is owed around 2.8 billion ringgit by its Indonesian and Philippine associates and some of these payments are overdue.

In the wake of the GMT report, AirAsia CEO Tony Fernandes issued a letter to investors dated Monday outlining strategies to reduce the carrier's gearing levels, including a move by the Indonesian and Philippine associates raising equity of around $100 million each from their local partners to pay the parent company -- a step Fernandes said was "in final discussions."

He also said he expected AirAsia's net gearing level to fall to around 2.0 times by the end of this year, from 2.47 times currently, which was already down from 4.2 times "a couple of years back."

Some analysts were skeptical of suggestions the loans to associates represented an existential threat.

"Even under the unlikely scenario of Indo AirAsia (IAA) and Phil AirAsia (PAA) going bankrupt and 100 percent of the receivables owed by related parties are written off, our analysis shows that AirAsia will remain in a very solvent position," Jian Bo Gan, an analyst at CLSA, said in a note earlier this week.

While he noted the risk those receivables might become impaired, he added that not only was the risk not new, the current low oil prices could "forgive" the associates' competitive issues, making a full write-off unlikely. He kept a buy call, with a 3.10 ringgit target.

The shares' sharp drop spurred the carrier to file a statement to the Malaysia stock exchange midday Wednesday.

"Management would like to assure the investment community that the company has a solid footing, strong balance sheet, rich in assets and good business outlook," the statement said, citing its ability to boost its first quarter earnings despite the fallout from the crash of flight QZ8501. AirAsia is taking "strong corrective action" at IAA, expects it to break even by the end of the year and meet its payments to the parent company, it said. It expects PAA to reach profitability in the fourth quarter. It plans initial public offerings of both associates in 2017.

Not all analysts, however, are shrugging off the carrier's potential negatives. AllianceDBS cut its target price to 1.80 ringgit from 2.30 ringgit.

"AirAsia's depreciation policies seem aggressive vis-à-vis its peers," Tan Kee Hoong, an analyst at AllianceDBS, said in a note Tuesday, citing higher figures for aircraft's useful life and residual value. "This distorts earnings quality, and could lead to future losses when the aircraft are eventually disposed."

Tan is also concerned that AirAsia, which this week was named the world's best budget airline by Skytrax for its seventh straight year, may be propping up the bottomline with unsustainable interest income from amounts due from its associates and joint ventures. But even then, Tan is sticking with a Hold call on the stock.

AirAsia is just the latest in a string of companies targeted by extremely negative independent research reports. Often, other analysts note that these reports contain no new information, but the stocks generally drop anyway.

Singapore-listed Noble Group's shares are down as much as 40 percent from their February peak before research firm Iceberg Research published a series of anonymously written reports attacking the company's accounting practices. In 2012, Carson Block – the short-seller who founded research firm Muddy Waters – issued an attack on Olam; its share price is still down around 17 percent from its levels before that report.

Source : http://www.cnbc.com/id/102765018


My comments: Folks since AirAsia shares are short-able, short sellers are attacking this stock after using the GMT Research report as excuse. And just my hunch folks ...usually this type of article come out just before a rebound ...to attract the last group of ppl who want to cut-loss or bailout, etc ...the article is to CON-vince them to sell now ...well just my 2 cents ok!!

IPI growth slows to 4% in April, slower 2Q GDP expected

KUALA LUMPUR: Malaysia’s Industrial Production Index (IPI), which tracks overall industrial activity, grew at a slower pace of 4% year-on-year (y-o-y) in April 2015, compared with a revised 7.1% y-o-y in March.

According to the Department of Statistics, the slower growth was driven by an increase in outputs in the manufacturing, mining and electricity sectors. The manufacturing, mining and electricity indices recorded production growth of 4.1%, 3.9% and 3% respectively, according to the latest statistics.

The IPI figure was below market consensus of 4.5%.

In seasonally adjusted terms, the IPI in April 2015 recorded a marginal decrease of 0.4% month-on-month, following declines of 1% in manufacturing, 1.9% in mining and 1% in electricity. Under the manufacturing sector, output growth of 4.1% y-o-y was recorded in April, driven by increases in petroleum, chemical, rubber and plastic products (3.6%), electrical and electronics products (4%) and food, beverages and tobacco (5.5%). The mining sector registered growth of 3.9%, thanks to the increase of the crude oil index of 15%.

The slower April IPI pace comes after the implementation of the 6% goods and services tax (GST) which took effect on April 1, hurting consumer spending and demand.

For the first four months of the year, overall IPI rebounded by 5.8% against 4.7% growth a year ago.

AllianceDBS Research chief economist Manokaran Mottain said going forward, it remains cautious, especially in light of the headwinds of low crude oil prices and uncertainties in global demand for manufactured exports. “While softer commodity prices contributed to declines in most exports, the implementation of the GST may have hit the production side, given the uncertainties in the cost of production, especially for manufactured goods,” he said in a note yesterday.

Given the April data, AllianceDBS expects gross domestic product growth in the second quarter of 2015 to be weaker at between 5.3% and 5.5% compared with 5.6% in the first quarter. “For the full year, we maintain our forecast at 5% [compared with 6% in 2014],” said Manokaran.

Source : http://www.theedgemarkets.com/my/article/ipi-growth-slows-4-april-slower-2q-gdp-expected



My comments: Folks this is a very bad number ...almost 50% down m-o-m ...due to GST I believe ...slowing growth as rakyat are not spending as much ...possibly leading to lower sales lower profits etc ...

KL quake possible as ancient fault lines reactivate, says expert

Kuala Lumpur is located near the epicentres of ancient fault line zones. – The Malaysian Insider file pic, June 11, 2015.

Following the quake tragedy in Sabah, there have been concerns that an earthquake may also hit Kuala Lumpur and according to a geological expert, such misgivings are not misplaced.

This is because the federal capital is located near the epicentres of ancient fault line zones, Universiti Malaya Geology Department Associate Professor Mustaffa Kamal Shuib told The Malaysian Insider.

These fault lines seem to have been reactivated by active tectonic plate boundaries and this, he said, was a cause for concern, especially since many structures in the city were not built and designed to withstand earthquakes.

“The general perception has always been that Peninsular Malaysia was safe because we are far from the Pacific Ring of Fire which surrounds us, but in recent years, there is evidence of earthquakes with focal points or epicentres right under our feet, due to the reactivation of old fault lines,” said Mustaffa.

Asked what causes the reactivation of fault lines, Mustaffa said Malaysia is surrounded by so many active tectonic plate boundaries and the Sunda Shelf, which the country sits on, is being compressed.

Peninsular Malaysia is at the centre of the shelf, also known as Sundaland, which is absorbing all the stress from around it.

“Sooner or later, the earth has to find some release by breaking through old fault line systems,” said Mustaffa whose field of research is structural geology and tectonics.

“This causes earthquakes," he said.

Mustaffa said he and his team first detected epicentres in 2007 and 2009 in Bukit Tinggi, near Genting Highlands, in Pahang, but some of these occurred to the west, near the KL fault zone.

The quakes were not strong but it is hard to say if they will increase in magnitude in the future, he said.

“The strongest one we have detected so far is a magnitude 3.5 in Bukit Tinggi.

"When we have epicentres (like Ranau, Sabah which was recently hit by a magnitude 6.0 quake) there is a possibility of earthquakes hitting the fault line zone," he said.

Mustaffa said in the past, Peninsular Malaysia had suffered tremors from distant sources and places like Sumatra and the Philippines, but now there was evidence of seismic activity in fault lines detected in the Peninsular itself.

There are four fault zones in Peninsular Malaysia – Bukit Tinggi, Kuala Lumpur, Lepar (north of Pahang) and Seremban (Negri Sembilan).

Universiti Malaya Geology Department Associate Professor Mustaffa Kamal Shuib (in checked shirt) with the team from the Malaysian Meteorological Department mapping out fault lines. – Pic supplied, June 11, 2015.All have epicentres along them, Mustaffa said.

A 3.5 magnitude earthquake may not cause destruction but could damage buildings and structures, said Mustaffa.

“However if there is a higher magnitude earthquake, most of our buildings are unfortunately not designed for it,” he said.

On Tuesday, Kuala Lumpur mayor Tan Sri Ahmad Phesal Talib had said that DBKL would review the construction of new highrise buildings in Kuala Lumpur, especially the safety aspects of these buildings to withstand earthquake tremors.

He had said the views and advice of relevant experts would be sought with regard to this. Phesal was asked to comment on a local media report which touched on Malaysia's location that put the country at risk of earthquake tremors in future.

Asked about early detection and warning system that can be put in place, Mustaffa said that he was currently working together with experts from the Meteorological Department to study and map out seismic activity along old fault lines in Sabah, Sarawak and Peninsular Malaysia.

This report will be submitted to the Science, Technology and Innovation Ministry which is funding the effort, he said.

"We started this study about two-and-a-half years ago and will be finalising our findings any time now," said Mustaffa who has been attached to Universiti Malaya's Geological Department for 30 years.

“Based on this, we will decide on places where seismic stations need to be built.”

Meanwhile, Singapore Earth Observatory Professor Kerry Sieh was reported as saying that the Earth goes through cycles of seismic energy release, and less release and more release.

"We have definitely been in the active cycle in the last 11 years since 2004. All the magnitude 8.4 earthquakes and bigger, up to 9.2, they all happened in the last 11 years. Several of those have been in Asia," he told Bernama.

The previous active cycle was in the 1950s to mid-1960s, which saw several earthquakes with a magnitude of a high 8 and above 9. But for the next 40 years, there were no records of a quake with a magnitude above 8.3, until 2004.

"We don't know whether we are at the end of the cycle or not," said Sieh. "My hunch is we will continue to see a larger number of large earthquakes. But that's only a hunch because we don't really have a way of telling whether we are at the end of the cycle or not." – June 11, 2015.

- See more at: http://www.themalaysianinsider.com/citynews/greater-kl/article/kl-quake-possible-as-ancient-fault-lines-reactivate-says-expert#sthash.cEHn19Ka.dpuf

My comments: Folks this story does not look good (in future). Especially IF this happen in KL. All the while we were told we are super safe from earthquakes .... I pity the stock market investors when this happens!

Frontkn the Flying saucer stock (part 3)

This is Frontkn chart at 1/6 after a scary last week for investors. It did look like it would keep on dropping so much so that many weak investors gave up and sold out.

But today (after reporting increasing income last Q), the stock rebounded and closed above the highest point of last Friday ...(see chart above) ...does it look like a FALSE - BREAK DOWN / FAKEY SETUP ??!

As per an article in www.learntotradethemarket.com - a Fakey setup is described as - "Often times the stock will appear to be headed one direction and then reverse, sucking all the amateurs in as the professionals push price back in the opposite direction. The fakey setup can set off some pretty big moves in the stock". 

AN EXAMPLE OF FAKEY SETUP CHART