The blue and green - 2888

Blue and Green - the colors of the Standard Chartered Bank logo. Also, my favorite color.

2888 - the stock code of Standard Chartered Bank listed at Hong Kong Stock Exchange. Good number.

2888 announced earning report last week, impressive growth of almost 10%, however the share price did not go up after the report was announced because 2888 also announced share placements - most, if not all of the people perceive this as a bad sign and shrugged off the good earning report.

2888 is very well known as a more prudent and steady banks, not as aggressive as other banks in a lot of ways. The focus of 2888 is on emerging markets in Asia, Africa and the Middle East. You don't see a lot of 2888 logos in Europe and America continents. 2888 was not badly affected by the toxic assets during the financial crisis last year. 288 survived, even though 2888 issued rights to shore up capital last year, 2888 did not need any financial assistance from government.

I read an article written by some experienced analyst/columnist in Hong Kong: http://www.quamnet.com/newscolumnistcontent.action?authorCode=COL_AWO&articleId=1296486

He described banks are like basketball players in a game. 2888 and other big and famous banks might have similar skill set, however 2888 might have better physique and stamina to eventually outplay other players.

I love the article.

2888's share price may not surge above HKD 300 in a few months time, however I see 2888 as one of the precious blue chip you must include in your portfolio - medium to long term portfolio. Just for your information, 2888 does not have any warrants/options traded in Hong Kong, you can tell that speculators are not a fan of 2888, I think :)

Actually, in terms of the ability of rebound, 2888 is not bad at all! From the low of HKD 73.85 on 23 February 2009, 2888 closed at HKD 181.80 today, an impressive JUMP of 146% !!!

I was lucky to have bought 2888 at $76.50 during the drop, however I had to sell it amost immediately at HKD 80+ because I did not have much cash left in my pocket... However I still keep buying 2888 at the range of HKD 100 - HKD 150, will continue to buy - for long term investment.

Last but not least, 2888 has not bad dividend yield as well - a bonus for us, the long term value investors :)

Worth investing?

on my way to work this morning, I was stuck in a crazy traffic jam - the temperature meter at the speedometer was going up - I kept praying that I could make it to the office - trust me, you don't want to have this kind of feeling. It happened few weeks ago - I had to stop my car by the road side to let her cool down before I ccould drive again. Workshop people checked and could not identify any problem. Guess it is old car. She's 8 yrs old and 850cc.

I have been working for almost 7 years now but I never change my car. Suppose to change to a 1.5 car (Toyota Vios or Honda City) 3-4 yrs back but I did not. Most if not all of the working adult at my age are already driving 2.0 car or better.

I was not stingy, like most people thought I was. I was just crazy over stock market investment.

Everytime I want to buy something, I will ask myself: if I put the money I am about to spend on this item in blue chips that pays good dividend, I will achieve my financial goals earlier.

That thought held me back from spending, in fact, I have been short-changing myself (in terms of lifestyle) in the past few years. Until a year or two back, I started to think if I have been doing the right thing.

I thought I was paranoid.

I missed out a lot of things.

Bear market in 2008 did not kill my portfolios, however it makes me think if stock market is all I ever needed? For some reasons, I just happened to watch a couple of disaster movies in the past 1-2 yrs and my thinking process started ever since. what if one huge disaster really happens one day, what if the end of the world is really coming one day?

I want to start treating myself better. I bought an apartment 3 months ago and about to move in. I am buying a new car, probably a 2.0 or 1.8 be end of this year. I am going to buy a watch for myself (I am using my cell phone as watch all this while) - kind of absurd I think... a guy approaching his 30 does not have a watch. well, I almost bought IWC's Mark 16 at Hong Kong International airport 2 weeks ago - HKD 22k +++. I will own that soon - maybe a gift for my 30th birthday.

Now, besides stocks and unit trusts - I do see some other thing worth investing. (one thing I realized that I have not been investing much is love, a relationship, that explains why I am still single...)

Now, when I want to spend on something cost $100, I will probably try to check if I can get it for $80 elsewhere or with discounts, promotion, etc, then save the $20 and put it in my favourite blue chips.

I just love to invest.

Fear and Greed

I read my previous posts yesterday, I shared my feeling during the market crash in Q408. I did not become greedy but fearful. most of the people and I thought the market has more to go down, therefore we waited and told ourselves we will buy when it is lower. In fact, that's FEAR. I admit. I admit I was unable to be greedy when everyone else is fearful.

Today, talk to people around you - I bet some if not most of them are already back to stock market, or planning to get back to the market. I can already smell some greed. Take Hong Kong's Hang Seng index for example. Just 2-3 weeks ago, I was telling myself that 20,000 is hell of a strong resistance and I was not confident that it will break above 20,000. The market proved me wrong, Hang Seng is approaching 21,000 today.

Are we already in Bull market? Is the bear gone or just taking a nap (which means bear will be back soon)? I do not know but seriously, I do think the markets have gone up too fast in such a short time frame.

However, nothing is impossible. Who would have thought Lehman bros would collapse? Who had any an idea that Citigroup's share price will drop till below $0.97? Who could predict that Shanghai index could fall from 6000+ to 1900+ in less than 24 months?

I am not an expert to talk about if the global economy will recover in L, U, W or V shape. I am just sharing my emotions and feelings here.

I failed to be greedy when everyone's fearful. However I think I can easily feel fearful when everyone's greedy. Just like right now, do you feel greedy now? Some people on some stock market forum told me he can't wait to put all his cash in stock market right now. Some people said he will buy anything related to the "Five Star Red Flag"...

I have sold some of my stocks in Malaysia and Hong Kong 2-3 weeks ago - apparently the prices went up after I sold - it is not easy to experience that... it is like, every 1 cent up will translate into 1 virtual slap on my face.

I am still learning - maybe I should just buy now, and buy next month, and buy next next month - setup a savings plan kind of thing. With this, I will not feel regret that I sell the shares too early, or buy the shares at too high the price.

Hmmmm... let me see if this is easy to execute.

Recent movies related to Stock Markets

I have been lazy in the past few months, many events took place and I indirectly participated in some of them. I will update them slowly, however what triggered me to come back here is to share 2 movies I watched recently.

The Taking of Pelham 123 - fantastic acting from both main actors. when Ryder tried to get signal and log on to the Internet, I had a feeling he's trying to monitor the market - it proved me right when I saw him logging in to CNBC website, I actually thought he bought lots of put options (just like how the NYC mayer think) however, he placed his 2 mil bet on Gold... the gold price has gone up to like USD 8900+ if I am not mistaken, isn't it crazy? It makes me think - if there is really a terrorist attack (touch wood), will Gold price react like that too?

It is definitely not right to manipulate the market like that. When I looked at the 3 major US indices dropped like 7%, it reminded me of the financial crisis all of us just experienced months ago.

What is happening right now? Has US markets hit bottom in March already? I don't know. Too many reports, analysis, etc - Just like the rest, i am confused. There are times, we just can't rely on the reports, we have to do some homework.

I asked myself - when good stocks' price fell like crazy few months ago, what was I thinking? Being an amateur, I did not calm myself during the bear market. I did buy some of the undervalued blue chips which I am comfortable with the business model, however I was unable to achieve - be greedy when everyone's fearful.

Now, seems like more and more people are getting greedy - should i feel fearful now?

Ok, second movie - Cantonese movie from Hong Kong <> 窃听风云. Good acting too, story line not bad. Some of the police in the movie heard the bad guy told the girlfriend that the company's share price will go up. The police did not report this but make use of the information to buy the shares then make a fortune. This is considered illegal and they have got the punishment - some dead, some lost their family - it is quite unfortunate because they were dealing with gangsters.

Then, my friend and I start to ask - will you do the same as the policemen in the movie? I told my friend right away - NO. I love money but I won't do illegal things because I believe in making money with my own ability. Also, I believe in karma.

Some people speculate in stock market - they treat stock market as casino - bet big or small - just like buying put and call options, or long / short futures contracts. However, there are differences - in my opinion. For instance, you need more luck in casino than in stock market. You need to do less research for casino games comparing to stock market. etc.

ok, have to stop here. good to start writing again :)

Great Stuff

One my best friends forwarded the below email to me, not sure if it is really from Mr. Warren Buffet but these are certainly great stuff :)

*****
Advice from Warren Buffet.....

Every new year, I adopt a couple of old maxims as my beacons to guide my
future. This self-prescribed therapy has ensured that with each passing year, I
grow wiser and not older. This year, I invite you to tap into the financial
wisdom of our elders along with me, and become financially wiser.

Spending: If you buy things you don't need,
you'll soon sell things you need.

Savings: Don't save what is left after spending;
spend what is left after saving.

Hard work: All hard work brings profit; but mere talk leads only to poverty.

Laziness: A sleeping lobster is carried away by the water current.

Earnings: Never depend on a single source of income.

Borrowings: The borrower becomes the lender's slave.

Accounting: It's no use carrying an umbrella, if your shoes are leaking.

Auditing: Beware of little expenses; a small leak can sink a large ship.

Risk-taking: Never test the depth of the river with both feet.

Investment: Don't put all your eggs in one basket.

I'm certain that those who have already been practicing these principles
remain financially healthy.

I'm equally confident that those who resolve to start practicing these
principles will quickly regain their financial health.

Let us become wiser and lead a happy, healthy,
prosperous and peaceful life.

- Warren Buffet

Are you greedy or fearful now?

it has been quite some time since I last updated my blog, was busy looking for a job... I resigned before Lehman Bros collapsed in Sep 2008, honestly speaking, I would not have resigned if the financial crisis hits earlier, anyway, I have got a new job and started few weeks ago, brand new start :)

while I was not working, I witnessed the dramas in stock markets, few hundred points a day for Dow, few thousand points a day for Hang Seng. It was a great experience and at times, I think it was a blessing in disguise that I was free during the craziest times so that I can witness the VERY FIRST big bear market in my life.

Lots of people got the honey from the bear, I got some too but not a lot. What I did in the past few months was:

#1 Sold some of the weaker stocks and move to the stable quality blue chips (in Chinese, we call it “Change Horse”) – trust me, this works. I sold a weak Malaysian telco stocks at $ 4.58 and changed to a very stable Malaysian bank in Oct 2008 and now the telco’s price is $3.20 while the bank’s price has gone up (slightly up, but at least it is paper gain).

#2 Keep or buy more of the strong stocks in my portfolio – for those quality stocks, I will not sell in a bear market, in fact, I have bought more shares at lower price. I am sure I will be rewarded in long run.

#3 Keep putting money in Unit Trust gradually – I still put few hundred Ringgit each month into the Unit Trust I invest in. It is not the best thing in the world to see your portfolio value shrinks in the bear market but it is definitely very upset to see your portfolio remain the same in the upcoming bull market… therefore I will not stop buying in bear market.

#3 Hunt for “High Cash, Low Debt” – I read lots of articles and forums, most if not all are in the hunt for companies with lots of cash, low or zero debt. In times like this, only those who hold cash can survive, just like the big 3 Autos in US, only Ford is still doing okay and does not need help from government coz she is holding some cash to weather the storm. Some analysts in US mentioned a few stocks with lots of cash and low/zero debt: Apple, Exxonmobil, Cisco, etc.

#4 Hunt for NTA higher than stock price – NTA is Net Tangible Asset, there are believers (I am one of them) who buy the stocks if the stock price is lower than the NTA per share – it is somehow believed that the stock price will eventually go up to match the NTA per share.

#5 Gold – I sold some of my holding when Gold touched USD 900+ in Sep08 but I still keep some. The problem I have for Gold is, there is no interest no dividend or whatsoever return when you hold it, the only thing you can hope for is the price to go up and make capital gain. Lots of people claim that Gold is the safe haven but to me, yeah I agree it will sort of protect the capital but I will rather go for some super blue chips – at least while holding the stocks, I can enjoy some dividend and the share price will not fluctuate too much (having said that, some super blue chips are having roller coaster’s ride these few months). Well, Gold is still in my portfolio but not more than 10% of my total investment.

#6 Real Estate – I thought the financial crisis will allow me to buy some apartment at low price but to my surprise, no desperate sellers and therefore no cheap apartment. My agent told me lots of owners in prime locations are not in a rush to sell the apartment because they either bought the apartment with cash or they have rental every month. Well, maybe Malaysia’s property market is really resilient. What about the properties in the U.K.? It has dropped quite a bit and GBP also dropped more than 25% (against MYR, it was GBP 1= MYR 7 in 2004 and now GBP 1 = MYR 5.10)…

Most of the people are still in fear… I am sure you have heard of the quote “Be fearful when others are greedy and be greedy when others are fearful”.

How many people can really do that?

I have to confess I was not strong enough / experience enough to do it – on 27 Oct 2008, I was in a café with my friend, Hang Seng index dropped like crazy to below 11,000 – the lowest it hit was 10,676… I witnessed that, all the stocks in my watch-list are in negative territory. I did not become greedy, I became a bit fearful – I was thinking:” let’s wait for Hang Seng to break 10,000 and I shall buy when it hits 9,000 or 8,000.

You know what, ever since 27 Oct 2008, Hang Seng went up more than 40% to hit around 15,000+, of course recently it has gone down to the range of 12,000 – 13,000.

If I continue to think like that – I will not buy when Hang Seng hits 8,000 coz I will be telling myself to wait for 6,000 then only I will buy.

This is a very good lesson – at least I found out that I was fearful when others were fearful. Since then I learned my lesson well and start to fine-tune my investment strategy. I am not saying that I am the expert now but at least I am slowly improving.

Are you ready to be greedy when others are fearful? Try, it’s fun, especially when you’re rewarded with your "anti-crowd" strategy.

Saving is sin, and spending is virtue??? (article sharing)

I received this article in my inbox (author/source: Indian Economist), it is considered spam to certain people but I read it and I feel it is very interesting and useful to share with everyone. Enjoy!!!!!!!!!!

Japanese save a lot. They do not spend much. Also Japan
exports far more than it imports. Has an annual trade
surplus of over 100 billions. Yet Japanese economy is
considered weak, even collapsing.

Americans spend, save little. Also US imports more than
it exports. Has an annual trade deficit of over $400
billion. Yet, the American economy is considered strong
and trusted to get stronger.

But where from do Americans get money to spend?
They borrow from Japan, China and even India.
Virtually others save for the US to spend. Global
savings are mostly invested in US, in dollars.

India itself keeps its foreign currency assets of over
$50 billions in US securities. China has sunk over $160
billion in US securities. Japan's stakes in US
securities is in trillions.

Result:

The US has taken over $5 trillion from the world. So, as
the world saves for the US, Americans spend freely.
Today, to keep the US consumption going, that is for the
US economy to work, other countries have to remit $180
billion every quarter, which is $2 billion a day, to the
US!

A Chinese economist asked a neat question. Who has
invested more, US in China, or China in US? The US has
invested in China less than half of what China has
invested in US.

The same is the case with India. We have invested in US
over $50 billion.. But the US has invested less than $20
billion in India..

Why the world is after US?

The secret lies in the American spending, that they
hardly save. In fact they use their credit cards to
spend their future income. That the US spends is what
makes it attractive to export to the US. So US imports
more than what it exports year after year.

The result:

The world is dependent on US consumption for its growth.
By its deepening culture of consumption, the US has
habituated the world to feed on US consumption. But as
the US needs money to finance its consumption, the world
provides the money.

It's like a shopkeeper providing the money to a customer
so that the customer keeps buying from the shop. If the
customer will not buy, the shop won't have business,
unless the shopkeeper funds him. The US is like the
lucky customer. And the world is like the helpless
shopkeeper financier.

Who is America's biggest shopkeeper financier? Japan of
course. Yet it's Japan which is regarded as weak. Modern
economists complain that Japanese do not spend, so they
do not grow. To force the Japanese to spend, the
Japanese government exerted itself, reduced the savings
rates, even charged the savers.
Even then the Japanese did not spend (habits don't
change, even with taxes, do they?). Their traditional
postal savings alone is over $1.2 trillions, about three
times the Indian GDP. Thus, savings, far from being the
strength of Japan, has become its pain.

Hence, what is the lesson?

That is, a nation cannot grow unless the people spend,
not save. Not just spend, but borrow and spend.
Dr. Jagdish Bhagwati, the famous Indian-born economist
in the US, told Manmohan Singh that Indians wastefully
save. Ask them to spend, on imported cars and,
seriously, even on cosmetics! This will put India on a
growth curve. This is one of the reason for MNC's coming
down to India, seeing the consumer spending.
"Saving is sin, and spending is virtue."

But before you follow this neo economics, get some fools
to save so that you can borrow from them and spend!!!