Posts
Based on priority below to form a better portfolio in reaping further gain during the recovering but manageable risk.
1. Start selling all call warrants the price is more then 100% gain.
2. Last phase of M-REITs portfolio building on those yield still between 9-10%
3. Buying recovering financial stocks mainly CITI CORP. Below 2.80 is a buy.
4. Stock pick in KLSE for 20% return stocks with 4-6% Dividend yield. - Paramount Corp / KPJ Health / Cheetah / Poh Kong
5. Participate into China mutual fund
6. Buy Gold
Happy Trading.
Sunday 26 July 2009
Thursday 5 February 2009
Feb 09 Review
Eventhough is a sad day, but review is still important.
From KLSE to Hang Seng, to Nikkei, to Dow Jones. I believe the market is fully discounted all bad news to come in the next 3 months. Thus, i resume an agressive a buy call to accumulate stocks.
Top Pick for 2009 will be:
1. Citibank, DJ
2. GE, DJ
3. GS, DJ
4. Hap Seng, KLSE
5. Poh Kong, KLSE
6. UMW, KLSE
7. SUNZEN, KLSE
8. AXREIT, KLSE
9. BURSA-CL, KLSE
10. RESORT-CJ, KLSE
Expected recovry of stocks will start from June onwards.
From KLSE to Hang Seng, to Nikkei, to Dow Jones. I believe the market is fully discounted all bad news to come in the next 3 months. Thus, i resume an agressive a buy call to accumulate stocks.
Top Pick for 2009 will be:
1. Citibank, DJ
2. GE, DJ
3. GS, DJ
4. Hap Seng, KLSE
5. Poh Kong, KLSE
6. UMW, KLSE
7. SUNZEN, KLSE
8. AXREIT, KLSE
9. BURSA-CL, KLSE
10. RESORT-CJ, KLSE
Expected recovry of stocks will start from June onwards.
Disappointing Day - Is truth above law or vice versa
I was born in Perak. In fact, today 5th Feb 2009 is a very disappointing day in my life till now. Eventhough i living in Selangor now but Ipoh is always my home town. It is just like an eclipse that i always thought there is always a hope in this piece of land that i born. I mean both Perak and Malaysia. I love the cultures, i love the races (Eventhough many said is a problem but not me), i love the foods i just cant stop loving the country.
Even after March 8 general election, i give BN a chance for state and Opposition a chance to balance the power of BN in the parliment. I initially glad to see BN is in power but with a more balanced opposition. I dislike opposition way to talk about getting MPs from BN to form a government.
I like a "change", but in a democratic way. If the result indicating BN still in power, opposition should respect. Do your best in the 5 states and come in to convince all Malaysian in the next general election.
But now, looking back into the incident in Perak, i would say BN has really disappointed me to the deepest and i am in doubt i can support them again in my life time. To takeover the state government with defected MP is fine for me even i dont like it this way cause it is non democratic. But a few reasons, why is a no go to me:
1. The defected 2 MPs from PKR is in corruption charge.
2. 3 of the MPs defected is lying all the ways, if they intend to join just say it. Is not the right way to teach our next generation that today you say no, tomorrow you say yes. The DAP MPs even worst accusing others and confirmed she will not leave DAP but the next day she is standing beside Najib.
3. The defected UMNO member to PKR rejoin to UMNO. Anyone can tell me, you really voting him if you know him?
To me, no matter who is the next PM is not an issue to me. But, with the 3 simple points above and anyone accept them to be in your team. Your lost trust from me atleast if not all Malaysian forever.
Furthermore, i love my Sultan when i was a child till now. I always proud of him and believe he is the most capable Sultan in Malaysia. He loves the people in the state and the country when he was Agong.
Today, is the day, i am wondering, is law above truth, or truth above law. Just look at my three points. Indeed is a disappointing day.
Even after March 8 general election, i give BN a chance for state and Opposition a chance to balance the power of BN in the parliment. I initially glad to see BN is in power but with a more balanced opposition. I dislike opposition way to talk about getting MPs from BN to form a government.
I like a "change", but in a democratic way. If the result indicating BN still in power, opposition should respect. Do your best in the 5 states and come in to convince all Malaysian in the next general election.
But now, looking back into the incident in Perak, i would say BN has really disappointed me to the deepest and i am in doubt i can support them again in my life time. To takeover the state government with defected MP is fine for me even i dont like it this way cause it is non democratic. But a few reasons, why is a no go to me:
1. The defected 2 MPs from PKR is in corruption charge.
2. 3 of the MPs defected is lying all the ways, if they intend to join just say it. Is not the right way to teach our next generation that today you say no, tomorrow you say yes. The DAP MPs even worst accusing others and confirmed she will not leave DAP but the next day she is standing beside Najib.
3. The defected UMNO member to PKR rejoin to UMNO. Anyone can tell me, you really voting him if you know him?
To me, no matter who is the next PM is not an issue to me. But, with the 3 simple points above and anyone accept them to be in your team. Your lost trust from me atleast if not all Malaysian forever.
Furthermore, i love my Sultan when i was a child till now. I always proud of him and believe he is the most capable Sultan in Malaysia. He loves the people in the state and the country when he was Agong.
Today, is the day, i am wondering, is law above truth, or truth above law. Just look at my three points. Indeed is a disappointing day.
Tuesday 30 December 2008
Last day of 2008 - What a mess & opportunity!
Into the final moment of 2008. A last day, or may be to many it should be a day to pass on faster and enter into 2009. Further pain is expeted in early of 2009 extending the mess from 2008.
In the last week of the 2008, i have taken some closer look into data that crucial for the health of 2009 economy. Well, looks like everyone already known the problem. Dow Jones, Asia Indicies and even KLSE are responding good to bad news. This support my confidence in a recovery is most likely on its ways in March or April 2009.
Oil that have over sold together with crude palm oil tracking the brent crude performance will also more steadier to bad news. Greenback however i see will turn streadier against other currencies in 2009.
Lets hope the worst is gone and below are some forecast in the year of 2009.
KLCI will set a target of 1,100 - 1,200
RM around 3.6-3.8 having pressures from Greenback and a round of interest cut by BNM
Dow Jones will recover around 10,000 - 11,000 by year end of 2009 or higher.
Oil to push back around USD 70-80 per barrel.
Gold around 850 - 900 will find sweet spots.
MAYBANK, UMW, HAP SENG, OSK, TMCLFE, SUNZEN, PANTECH, AXREIT, BSDREIT, HEKTAR & KLCC amount good choice with dividend yield around 5% and above and with a capital upside adjustment of 30-50% from the current level market closed 12.30 pm of 31st December 2008.
An average cycle of investment is my favour that you break your capital into 5 portions. Start January, buy in 20% of your funds every month.
Again if no catalyst come out in 2009, then it should be a good year for stock recovery. Of course not a bull run eventhough is Ox Year!
Happy Investing - - - (PS: Dont forget to help the poor)
In the last week of the 2008, i have taken some closer look into data that crucial for the health of 2009 economy. Well, looks like everyone already known the problem. Dow Jones, Asia Indicies and even KLSE are responding good to bad news. This support my confidence in a recovery is most likely on its ways in March or April 2009.
Oil that have over sold together with crude palm oil tracking the brent crude performance will also more steadier to bad news. Greenback however i see will turn streadier against other currencies in 2009.
Lets hope the worst is gone and below are some forecast in the year of 2009.
KLCI will set a target of 1,100 - 1,200
RM around 3.6-3.8 having pressures from Greenback and a round of interest cut by BNM
Dow Jones will recover around 10,000 - 11,000 by year end of 2009 or higher.
Oil to push back around USD 70-80 per barrel.
Gold around 850 - 900 will find sweet spots.
MAYBANK, UMW, HAP SENG, OSK, TMCLFE, SUNZEN, PANTECH, AXREIT, BSDREIT, HEKTAR & KLCC amount good choice with dividend yield around 5% and above and with a capital upside adjustment of 30-50% from the current level market closed 12.30 pm of 31st December 2008.
An average cycle of investment is my favour that you break your capital into 5 portions. Start January, buy in 20% of your funds every month.
Again if no catalyst come out in 2009, then it should be a good year for stock recovery. Of course not a bull run eventhough is Ox Year!
Happy Investing - - - (PS: Dont forget to help the poor)
Wednesday 3 December 2008
Brief Outlook of 2009 Economy - Where do we go from now?
As of today, 4th December 2008, i am drafting my view in 2009 but will further fine tune when more data is going to be out in this month. SO that i can check-point the following review as closest possible of the outlook of World and Malaysia Economy. Again, i leave the statistic to others but always view from a overall perspective that helpful in aligning your strategies.
For US, which all eyes are on them to when recovery will start before EU, China, Japan, India and the globe will follow together. The concern is whether will it be another dampening story like Lehman to come and further dragging down the entire world equities market for 10 - 20%.
After the Lehman story, US regulators will not allow any major financial institution to fall anymore. Be it artificial or be it necessity to do so, at least, this problem may be solved for now temp. I still think it is unlucky we are at this stage but it is also good that before we all moving into major depression. If regulation and mindset will and can be changed after all learn a lesson, the next 5-10 years may be very good for all to come because most of the bad bloods will be wiped out while more time for new problems to be emerged.
I personally reinforce that the bottoming process is soon to be over however Q4 2008 and Q1 2009 will still look bad. As long as market does not reflect to bad news and there is no more suprise like Lehman, i am optimistic 2009 will be a starting point of recovery from 2nd half and make full swing at 2010. Dow Jones tactically strong suport at 7,500 and KLCI is around 750.
For Malaysia, say our this year GDP is around 5% that dragged down by last two quarters slow down. Also, we will also suffer Q1 2009 and Q2 & Q3 2009 with bottoming process to be ended. The estimation is my observation and believe that we are always one quarter slower to response then others. The current impacted will only be felt in Q1 2009 but we will also slow to feel the recovery only happen in 4th Q of 2009.
For Malaysia property market, put more emphasis in AXREIT and BSDREIT are there are performing well in 2008 and current valuation and yields look cheap. Buying a property may need to be extra cautious but overall over local property market is still healthy. It is always, location, developer and selling points. Overal in New York, prices of real estate is holindg much better compare to other states is a great example.
Many estimated that the current fundamental strong hold of KLSE and country's economy are due to the government intervention. Be it is truth or otherwise, i always believe that it is not too possible these days because of the global hegde fund become much stronger then the government as a trend.
If there is a time that opporutnity emerge to hedge fund on shorting the market, stock options, commodities, there will be always a "Soros" there and we still have a long way down for the local market.
Thus, i am optimistic that a more turned agressive buying mode is a good choice. Beside of short term 3 months "long" as explained previously, mid to long term in 2009/2010 turn positive further. Overall, buy with cash but not with borrowings and relax, go holiday. When you come back, things should be alright.
PS: Merry X'Mas and a Happy New Year. Good and Bad times always come, only "we" and God forever to be around. No worry, be happy.
Wednesday 29 October 2008
Buy now, i mean now ! 30th Oct 08 - Long Index, Buy Oil, Gold & Crude Palm
After analysing the equities markets around the world, especially Dow Jones, Nikkei, Hang Seng, KLCI, STi, Shanghai SE. I believe we are at the edge of entire collapse or staging for a rebound or short term rally.
Most likely FED is going to cut another 25 to 50 basis points follow by a few central banks in the world. This will somehow boost the markets especially when dealers commented that the over night Dow Jones 800 pts rally is not because of heavy buying, but just sellers are gone or over done till nothing to sell.
Long index for a 3 months objective to achieve a 10% contract gain, look for Oil to retest USD 75 - 80 per barrel, Gold above 800 - 825 and Crude Palm Oil recope losses to 1,600 - 1,800 level.
However, commodities are at short term as if things recover or when FED cut rate till 0.75 or 1 percent, that will be a long term stagnent price range for commodities. As dollar will only face upwards in long term when the only direction for the FED rate is upwards.
For equities, advised to further accumulate ROE with 20% after factored in with lowered profits and dividend yield more then 8%. In KLSE, Hap Seng is a top bet now at RM 1.6 - 1.7 level per share. Anything below is a super bargain.
Buying financial stocks in US like GS, AIG, MS are emerging to be good buy. I think, GS at USD 80 - 90 is a better buy. Cause you entered into a price better then Buffett. He bot at 125 with 10% yield promised by GS.
Local front again, recent listed SUNZEN on animal health with focus in organic feeding is super buy with ROE more then 20% at RM 0.21 cens and potential to trade with a PE of 14-16 is likely in 2009. This will be another TMCLFE soon but those who hold on to TMCLFE if you did not unload at 1.50 and above level, now is advise to take on its rights and bonus issues.
YTL Corp acquisition into Singapore REITs also a sign of more bargain in the market.
However, always look for a good governance counter. Distressed with ability to come back in any term, short, mid or long.
The only risk will be Korea KOSPI and if KOSPI is able to house the crisis in next a month or two with no additional selling with big news, i forecast this will be the bottom where Dow Jones 8,000 is a very persisted support, KLCI at 800, Nikkei at 7,000 and Hang Seng at 11,000 level.
Sentiment turns hungry. Buy!
Most likely FED is going to cut another 25 to 50 basis points follow by a few central banks in the world. This will somehow boost the markets especially when dealers commented that the over night Dow Jones 800 pts rally is not because of heavy buying, but just sellers are gone or over done till nothing to sell.
Long index for a 3 months objective to achieve a 10% contract gain, look for Oil to retest USD 75 - 80 per barrel, Gold above 800 - 825 and Crude Palm Oil recope losses to 1,600 - 1,800 level.
However, commodities are at short term as if things recover or when FED cut rate till 0.75 or 1 percent, that will be a long term stagnent price range for commodities. As dollar will only face upwards in long term when the only direction for the FED rate is upwards.
For equities, advised to further accumulate ROE with 20% after factored in with lowered profits and dividend yield more then 8%. In KLSE, Hap Seng is a top bet now at RM 1.6 - 1.7 level per share. Anything below is a super bargain.
Buying financial stocks in US like GS, AIG, MS are emerging to be good buy. I think, GS at USD 80 - 90 is a better buy. Cause you entered into a price better then Buffett. He bot at 125 with 10% yield promised by GS.
Local front again, recent listed SUNZEN on animal health with focus in organic feeding is super buy with ROE more then 20% at RM 0.21 cens and potential to trade with a PE of 14-16 is likely in 2009. This will be another TMCLFE soon but those who hold on to TMCLFE if you did not unload at 1.50 and above level, now is advise to take on its rights and bonus issues.
YTL Corp acquisition into Singapore REITs also a sign of more bargain in the market.
However, always look for a good governance counter. Distressed with ability to come back in any term, short, mid or long.
The only risk will be Korea KOSPI and if KOSPI is able to house the crisis in next a month or two with no additional selling with big news, i forecast this will be the bottom where Dow Jones 8,000 is a very persisted support, KLCI at 800, Nikkei at 7,000 and Hang Seng at 11,000 level.
Sentiment turns hungry. Buy!
Friday 10 October 2008
Bailout failed, Interest cut failed, whats next?
After all, probably the best is to allow all market drop to a good valuation level. Personally, that i feel is really market driven.
I think the bottom should be near. Anytime soon with a few more measures will be out from any angle.
I revised and calling a selective buy distress stocks in KLSE. Preferred Maybank, Bursa and Genting. Should turn from nibbling to agressive buying.
Time is done for REIT as it has done a good job for defensive.
For speculative play, KLK, Genting-CL, TMI-CA are all strong potential buy at this level.
The next steps should be second round of worldwide interest rate cut before end of the month. Again, turn agressive.
I think the bottom should be near. Anytime soon with a few more measures will be out from any angle.
I revised and calling a selective buy distress stocks in KLSE. Preferred Maybank, Bursa and Genting. Should turn from nibbling to agressive buying.
Time is done for REIT as it has done a good job for defensive.
For speculative play, KLK, Genting-CL, TMI-CA are all strong potential buy at this level.
The next steps should be second round of worldwide interest rate cut before end of the month. Again, turn agressive.
Monday 22 September 2008
Short Gold at 950 and above
The excuse of many pouring money to Gold due to dollar and commodities are overdone in short term. No matter the USD 700 billions recue plan is going to be passed or vice versa, Gold will correct back to 850 below level.
If it is passed, confidence of dollar will be back even long term may not be good for US tax payers, if it is not pass, the demand of the whole world confirmed will move south further on most commodities. Thus, it is a call for short of Gold above 950.
If it is passed, confidence of dollar will be back even long term may not be good for US tax payers, if it is not pass, the demand of the whole world confirmed will move south further on most commodities. Thus, it is a call for short of Gold above 950.
Speculation is in control
When during 97 crisis, most Western economy body accused it is due to Asean economy vulnability has caused the currency crisis and is not the hedge fund. Then the fall of Lehman is not also caused by hedge fund, then steve jobs of Apple blamed that hedge fund maliciously plan story about his health and make money from shorting Apple shares, then till oil prices that even US government believe there is no speculation.
Again, tonite Nymex oil in 3 days up more then 20% back to 120 in speculation of US coming rescue bil of USD 700 Billions will spur demand. Even though OPEC said demand is at 2003 low. "In hope of increase of demand send price to up in historical high"?
Dont blame the dollar, cause both the dollar and demand did not giving support for such a high jump in a day. This prove that, hedge fund may not be the root of the problem of an economy woes, but their existence hurt and deepen the problem.
As an investor, i always believe make moeney must have a right way. Earning money because your knowledge and hurting poor in the whole world does not make sense. Boycott hedge fund, that the only way the world will be more peaceful.
Saturday 20 September 2008
Fed and US Treasury RTC action to wipe all bad loans = Danaharta?
Yes indeed is true, this is the final moment and it should be at early stage. If then, Lehman and AIG may be still survive. Late better then nothing and i do positive with this action. But do you feel somthing similar, Danaharta, the word that keep surrounding us during our 1997 currency crisis.
As mentioned, indeed there is no free market in this world. It has becoming a pro-verb for hedge fund and speculators to make huge fortune. But of course because of mis-management at the first place. I use to be a free market advocate but if looking at the recent oil prices, few will question into detail why such price movements are so drastic and if not speculation what it will be? OPEC indicated demand of oil at global scale slow down to 2003 where oil at the level of USD 40 per barrel. Even if dollar is lower, but it cant be 100% contribute to oil increase.
Thats tell the truth of free market, needless to even mention short selling. An equal problem for the financial system that initially designed for hedging but now is more like speculation. The impact, some group of people make huge fortune from a large group of people follow the rules. Also, the most important the poor.
This blog will start and continue to keep outlook of global economy but specialized in Malaysia market. We will discuss how we can make fortune by giving more people publiclly understand the financial system and the objective is also all should be rich in this world.
In conclusion, this new move by FEd and Treasury will definitely create impact in the world market. If there is no bad debt anymore, the U turn is on its way. Even the economy growth may not return fast enough, be sure that hot funds, hedge funds and pension funds .... all will do their job.
Worlwide buy signal emotionally emerged and double bottm has challenged by Dow Jones. Only left is local politics. Maximum is by year end and i believe the market will do well in Q1 2009. Thus, start nibbling equities.
Notes: Source of picture from CNN Money
Wednesday 17 September 2008
AIG, Lehman Brothers --- Anymore?
AIG bailout is a surprise to me because i cannot believe such a hitorical giant has exposed themselves too much in crisis. Dow Jones used to be the advocate of free market. Fed and US government have not stop kept interventing into trouble companies.
The new theory that most economistmust now know, there is no free market in this world. It can be also understood because if AIG is not being rescue, the confidence impact can be far huge then Lehman brothers and more will be dragged to explode the crisis further.
By now, all problems are continuous but i am starting to be optimistic cause most stock market in the world corrected more then 50% and i believe many stocks have been beaten down to as much as 90%.
Probably now, i will still maintain a short in KLCI and the next support should be around 900. I will be also a starting time to accumulated distressed stocks due to confidence but still quality.
I will maintain a buy call in 3 REITs i selected but should increase portfolio in Hap Seng Consolidated, Paramount and Bursa. Cause Bursa is always i consider a long term bet for any exchange in the country.
The new theory that most economistmust now know, there is no free market in this world. It can be also understood because if AIG is not being rescue, the confidence impact can be far huge then Lehman brothers and more will be dragged to explode the crisis further.
By now, all problems are continuous but i am starting to be optimistic cause most stock market in the world corrected more then 50% and i believe many stocks have been beaten down to as much as 90%.
Probably now, i will still maintain a short in KLCI and the next support should be around 900. I will be also a starting time to accumulated distressed stocks due to confidence but still quality.
I will maintain a buy call in 3 REITs i selected but should increase portfolio in Hap Seng Consolidated, Paramount and Bursa. Cause Bursa is always i consider a long term bet for any exchange in the country.
Friday 12 September 2008
Recommended Portfolio at a Galance
Recommended Bluechip - KLSE
Minimum of 10% growth of ROE & Dividend Yield of 6-8% in 2009/10
1. Maybank
2. Bursa
3. PBBank
4. BJToto
5. Genting
Recommended Growth Stock - KLSE
Minimum of 15% growth of ROE & Dividend yield of 8-10% in 2009/10
1. UMW
2. HAP SENG
3. GAMUDA
4. OSK
5. BJCORP
Recommended Small Cap - KLSE
Minimum of 20% growth of ROE with pontential of Dividend yield of 6-8% in 2009/10
1. TMCLFE
2. PARAMOUNT
3. POH KONG
4. GLOMAC
5. EKOVEST
Recommnded REITs and Poperty recurring base earning - KLSE
1. KLCCP
2. STAREIT
3. AXREIT
4. BSDREIT
Minimum of 10% growth of ROE & Dividend Yield of 6-8% in 2009/10
1. Maybank
2. Bursa
3. PBBank
4. BJToto
5. Genting
Recommended Growth Stock - KLSE
Minimum of 15% growth of ROE & Dividend yield of 8-10% in 2009/10
1. UMW
2. HAP SENG
3. GAMUDA
4. OSK
5. BJCORP
Recommended Small Cap - KLSE
Minimum of 20% growth of ROE with pontential of Dividend yield of 6-8% in 2009/10
1. TMCLFE
2. PARAMOUNT
3. POH KONG
4. GLOMAC
5. EKOVEST
Recommnded REITs and Poperty recurring base earning - KLSE
1. KLCCP
2. STAREIT
3. AXREIT
4. BSDREIT
Is a further short in September 08 after the recent political outbreak
Expecting KLCI to further move south due these few days further outbreak in the local politics in Malaysia. I would recommend investor to stop bargain hunting because it is highly unstable and uncertain for the local bourse.
Holding up bluechip is still optimistic but political related stocks are advised to stay in sideline or start to sell off to cut loss. If the turnmoil continue, yet to be tested political counters on corporate governance and performance may face further huge challenge in the coming year.
Also, stay away commodities related counters associated with Palm Oil, Steel, Oil & etc as it yet to find bottom in the coming months for this cycle of commodities worldwide correction. I am forecasting a more long term corection cause a stronger dollar couple with a mild recovery of US economy may aso tempt FED to increase interest rate by a 25 basis point in 2009. Thus, is a 6-12 months correction.
The best bet is still REITs with STARHILL, AXREIT and BSDREIT to be maintained a strong buy call but must base on 8% ROI with every entrance of the trust. As these trust profits are more mature and would be able to house through this worldwide and local crisis.
KLCI will test 1000 level personally i feel it is fragile, Dow Jones will still range bound between 10,800 to 11,800. Asian bourses may be further sell off due to renew concern in European countries slow down. A potential of another 5-10% before a more stable environment.
Holding up bluechip is still optimistic but political related stocks are advised to stay in sideline or start to sell off to cut loss. If the turnmoil continue, yet to be tested political counters on corporate governance and performance may face further huge challenge in the coming year.
Also, stay away commodities related counters associated with Palm Oil, Steel, Oil & etc as it yet to find bottom in the coming months for this cycle of commodities worldwide correction. I am forecasting a more long term corection cause a stronger dollar couple with a mild recovery of US economy may aso tempt FED to increase interest rate by a 25 basis point in 2009. Thus, is a 6-12 months correction.
The best bet is still REITs with STARHILL, AXREIT and BSDREIT to be maintained a strong buy call but must base on 8% ROI with every entrance of the trust. As these trust profits are more mature and would be able to house through this worldwide and local crisis.
KLCI will test 1000 level personally i feel it is fragile, Dow Jones will still range bound between 10,800 to 11,800. Asian bourses may be further sell off due to renew concern in European countries slow down. A potential of another 5-10% before a more stable environment.
Wednesday 10 September 2008
September Update
A short update and trying to reactivate my blog. Indeed, due to current political sentiment, technical volume analysis and the development of global economy, the entire market remain short and searching a bottom.
But this does not limit a long term investor that would like to seek for a 20% ROI portfolio. Long term pick remained Maybank, Bursa and Public Bank.
Mid term pick are Hap Seng, Paramount Corp and OSK. Current 1060 level remain a continue nibbling that if you see a drop everyday, increase your portfolio.
A potential U Turn if Oil hit USD 90 below and settle around the range with final 916 pass.
But this does not limit a long term investor that would like to seek for a 20% ROI portfolio. Long term pick remained Maybank, Bursa and Public Bank.
Mid term pick are Hap Seng, Paramount Corp and OSK. Current 1060 level remain a continue nibbling that if you see a drop everyday, increase your portfolio.
A potential U Turn if Oil hit USD 90 below and settle around the range with final 916 pass.
Friday 14 December 2007
Property Investment is No Magic Formula – Read on!
The value of money becomes smaller every day! Many books written by gurus of property investment and other experts are aiming to help investors to make a fortune from property investment. It is not hard to see why most top tycoons or multi-millionaires and successful businessman are some how related to property investment. Some always say, follow what the rich people do and you will get rich too. I am totally agreeable about this as long as you are not doing something illegal or bad to others.
Article contributed by:-
CL of Estate123
Demand and Supply
There are also arguments from many management gurus that economy is dead. However, the basic rule of demand and supply still valid, as simple as, if demand is more than supply, price will increase. If supply is more than demand, price will decrease. Why is this important to property investment then? Just look at the population growth on earth today. With the rate of its growth, but with only limited land on earth, I believe that property demand will continue to increase and supply will gradually decrease especially at selected urban areas. On the other hand, bonds, stocks, currency and all businesses will have the opportunity to enjoy unlimited expansion. Unlike property, once it is built and occupied a plot, there will be no room for it to grow anymore.
Inflation
What is inflation then? It happens when demand is more than supply and everyone is chasing after a relative limited thing on earth and it is very normal for inflation to happen year after year. Recently, oil prices surged to records high. Commodities like gold, metals even food are all facing the same fate. This is a classic example of high demand over limited supply. Probably in every decade, in certain years, inflation may be suffered faster due to some other factors like higher economic growth, greater spending power and greater demand on things on earth. All these combination of factors has some-how caused “Asset Revaluation”. This is the period where the increase is more than the normal rate of inflation cycle.
Deflation? It happens when recession in an economy where demand is lower than supply. For some items, prices may be decreased, may be due to factors like increase in human efficiency or improved technology, thus resulting in increase of supply. However, inflation and deflation may happen together sometimes. This is clearly seen recently when oil prices increase and computer equipment becomes cheaper at the same time.
Time
Still no clue? Because of inflation happening every year, there is no way that a property price will drop in the long run. Sometimes your investment may not be profitable but the value of your currency will always becomes smaller and this will some-how result in higher property prices.
What has time got to do with the price of the property then? Everyone is saying that we should look for a good location in order to get the best return of property invested. A good location means higher demand for a similar area and this case may cause inflation rate to become higher. A Bad location may mean lower demand growth across time for that area and this case may result in negative, low appreciation or sometimes no appreciation at all.
The second rule of dumb for better property investment is to invest in properties plan by a reputable property developer. To my personal understanding, I like to explain in this way that a reputable developer will normally have a better development plan, huge resources and better political mileage that can muscle greater demand in a shorter period of time and may positively help greater price appreciation. For this case, asset revaluation is happening faster than other property developer.
Conclusion
Buying a property as an investment is a must, because it helps us to hedge against inflation. If you found a good property, the price of the property will increase. However, if you found a reputable developer and the unique location happens to be a hidden jewel, the price of the property will just grow exponentially and you will enjoy wealth faster than others across time. If you invested in a bad property, you may suffer a period of deflation on the property invested and you may become poorer. But it is not something need to be worried, because across time, the price will definitely recover if you have infinite time to wait. (That normally does not happen because life is short!)
Thus, the idea of buying a property with great demand and allow the value to appreciate across time will generate good wealth for you. But it is not the only formula because, sometimes when you do invest in an average location property, the economic factors will do the rest for you. You will become wealthier too.
Article contributed by:-
CL of Estate123
Demand and Supply
There are also arguments from many management gurus that economy is dead. However, the basic rule of demand and supply still valid, as simple as, if demand is more than supply, price will increase. If supply is more than demand, price will decrease. Why is this important to property investment then? Just look at the population growth on earth today. With the rate of its growth, but with only limited land on earth, I believe that property demand will continue to increase and supply will gradually decrease especially at selected urban areas. On the other hand, bonds, stocks, currency and all businesses will have the opportunity to enjoy unlimited expansion. Unlike property, once it is built and occupied a plot, there will be no room for it to grow anymore.
Inflation
What is inflation then? It happens when demand is more than supply and everyone is chasing after a relative limited thing on earth and it is very normal for inflation to happen year after year. Recently, oil prices surged to records high. Commodities like gold, metals even food are all facing the same fate. This is a classic example of high demand over limited supply. Probably in every decade, in certain years, inflation may be suffered faster due to some other factors like higher economic growth, greater spending power and greater demand on things on earth. All these combination of factors has some-how caused “Asset Revaluation”. This is the period where the increase is more than the normal rate of inflation cycle.
Deflation? It happens when recession in an economy where demand is lower than supply. For some items, prices may be decreased, may be due to factors like increase in human efficiency or improved technology, thus resulting in increase of supply. However, inflation and deflation may happen together sometimes. This is clearly seen recently when oil prices increase and computer equipment becomes cheaper at the same time.
Time
Still no clue? Because of inflation happening every year, there is no way that a property price will drop in the long run. Sometimes your investment may not be profitable but the value of your currency will always becomes smaller and this will some-how result in higher property prices.
What has time got to do with the price of the property then? Everyone is saying that we should look for a good location in order to get the best return of property invested. A good location means higher demand for a similar area and this case may cause inflation rate to become higher. A Bad location may mean lower demand growth across time for that area and this case may result in negative, low appreciation or sometimes no appreciation at all.
The second rule of dumb for better property investment is to invest in properties plan by a reputable property developer. To my personal understanding, I like to explain in this way that a reputable developer will normally have a better development plan, huge resources and better political mileage that can muscle greater demand in a shorter period of time and may positively help greater price appreciation. For this case, asset revaluation is happening faster than other property developer.
Conclusion
Buying a property as an investment is a must, because it helps us to hedge against inflation. If you found a good property, the price of the property will increase. However, if you found a reputable developer and the unique location happens to be a hidden jewel, the price of the property will just grow exponentially and you will enjoy wealth faster than others across time. If you invested in a bad property, you may suffer a period of deflation on the property invested and you may become poorer. But it is not something need to be worried, because across time, the price will definitely recover if you have infinite time to wait. (That normally does not happen because life is short!)
Thus, the idea of buying a property with great demand and allow the value to appreciate across time will generate good wealth for you. But it is not the only formula because, sometimes when you do invest in an average location property, the economic factors will do the rest for you. You will become wealthier too.
Subscribe to:
Posts (Atom)