PublishedbyIanTaiWealthPublications

Copyright2016byIanTaiWealthPublications

Allrightsreserved.Nopartofthispublicationmaybereproducedinany
formorbyanymeans,electronic,photocopying,recordingorotherwise
withoutpriorpermissionofIanTaiWealthPublications

Disclaimer:
Thisbookcontainstheideas&opinionsofauthors.Itisintendedfor
education&illustrationpurposes.Itisnotintendedtobea
recommendationtobuy,holdorsellanysecuritiesdiscussedherein.
Theauthorsandthepublisherarenotstockbrokers,registered
investmentadvisors,orsubstantialshareholdersofanysecurities
mentionedinthedigitalbook.

Althoughwehavemadethebesteffortstoprovidethemostaccurate&
uptodateinformation,nowarrantyorguaranteeisgivenforthethe
accuracy,reliability,orcompletenessoftheinformationprovided.The
authorandpublisherdisclaimanyrewardsandresponsibilitiesforany
gainsandlosses,whichmayariseasaconsequence,directlyor
indirectly,fromtheapplicationofanyideas,strategies,techniquesand
casestudiesmentionedinthedigitalbook.

Theauthorsandpublisherdonotguaranteeanyresultsorinvestment
returnsbasedontheinformationcontainedherein.Wesuggestthe
consultationoftherelevantinvestmentprofessionalpriortoembarking
onanyinvestmentplan.

2016 Bursaking.com.my

TableofContents

Introduction:
So You Have RM 10,000 to Invest

Contributor 1:
If I have RM 10,000 to Invest by KCLau, Founder of KCLau.com.

Contributor 2:
If I have RM 10,000 to Invest by Ian Tai, Creator of Bursaking.com.my

Contributor 3:
If I have RM 10,000 to Invest by Jonathan Lai, investment coach at
InvestBursa.com

Contributor 4:
If I have RM 10,000 to Invest by Aunty YY, Power Blogger at KLSE-Talk -
.

Contributor 5:
What Choice Investing is About by CF Lieu,
CFP CERT

Financial Planning Manager
of Cheng & Co Wealth Management Sdn Bhd

Contributor 6:
If I have RM 10,000 to Invest by Alex Tan, Managing Partner of VGrowth Capital
PLT

2016 Bursaking.com.my

Contributor 7:
If I have RM 10,000 to Invest by PC Wong, Author of 2 POPULAR Bestsellers,
'Invest in Foreign Shares' and 'Invest in REITs'

Contributor 8:
If I have RM 10,000 to Invest by Michael Law, Author of POPULAR Bestselling
Book, Simple Strategies to Profitable Investments in Stocks

2016 Bursaking.com.my

Introduction:
SoYouhaveRM10,000toInvest

Howwouldyoustart?

Doyoustartbychoosingaproduct?

Whichisbetter:UnitTrusts,Stocks,Bonds,Gold,orSilver?

Ifyoupreferstocks,thenextquestionis,Whatstocksshouldyou
choose?InMalaysia,youhaveaboutiqueof922stockstochoosefrom.
InSingapore,youhaveanother724stocks.

Howthen,wouldyouchoose?

Doyougoforcapitalgains?Or,doyouinvestfordividendyields?

Doyoutraderegularly?Or,doyoubuyandholdoverthelongterm?

Whichstrategyisbetter:Fundamentalanalysisortechnicalanalysis?Or,
isitacombinationofboth?

Andthelistgoeson.

Ifyouarenewtoinvesting,mostlikely,youwillfindthesequestions
overwhelming.

ThisBookisabout

Ifyouareoverwhelmed,donotworry.Itisperfectlynormal.Many
investorssharedthesameconcernswhentheystartedtheirjourneyto
becomesavvyinvestors.

2016 Bursaking.com.my

Often,thissavvinesscomesalongthewayinbitsandpieces.Afterall,
Romeisnotbuildinasingleday.

Youmayfindsomeanswersinthisbook.

Someareinunison.Somecontradicts.Why?

HowItIsWritten?

Thisbookisacompilationofideasfromtopauthors,bloggers,writers,
trainersandinvestorsinMalaysiaonhowtheywouldinvestiftheyare
givenRM10,000.

Theyhavethefreedomtoexpresstheirbeliefsandopinions.No
restrictions.Nolimits.Yup.Itsfreestylewriting.

Ouranswersdifferaswedifferasindividuals.Wearedifferentinterms
ofeducationbackground,job,financialposition,maritalstatus,lifestyle,
investingskills,andinvestingpreferences.Yup.Itsaboutindividuality.

Inthesubjectofinvesting,thereistrulynoanswerthatis
onesizefitsall.Morepractically,itisaboutfindingoutwhatworksand
adaptittosuitourpersonalinvestmentneeds.

Insteadoffindingtheholygrailofinvesting,thisbookisabout
expandinghorizons.Itiscreatedtoextendourvisiontothepossibilities
ofinvesting.

ThePowerof8

Asthepublisher,Imfortunatetobeintroducedandbefriendedwith
talentedindividualswhoaregenerousinsharingaboutwhattheyknow
onthesubjectofinvestingandhowtheydoit.

2016 Bursaking.com.my

Insteadofoneguru,youwouldnowbeexposedtoeightdifferent
perspectivesonhowonewouldinvestiftheyaregivenRM10,000.

Letsbegin.

Regards

Ian Tai

PublisherofIfIhaveRM10,000toInvest

2016 Bursaking.com.my

Assumptions:

ThiseBookisproducedwiththefollowingsetofassumptions:

1. Youdonothavecreditcarddebt.

2. Youhavesetasideemergencyfunds.

3. Youdonotneedtoincurhugeexpensessuchaswedding
expenses.

4. TheRM10,000iscapitalforthesolepurposeofinvesting.

5. InvestingintheMalaysiancontext.

6. Youfullyunderstandandagreethatthematerialspublishedis
solelyforeducationalandillustrationpurposes.

7. Youareabletodecidewhetherthematerialspublishedfitsor
doesnotfitintoyourownpersonalinvestmentneeds,objectives,
plans,strategiesandstyles.

2016 Bursaking.com.my

HowdoIInvestinRM10,000Now?
WrittenbyKCLau

So,youwantto:

a. Beat Inflation?
b. Increase Your Purchasing Power?
c. And to meet your Future Financial Goals?

However,yougethitwithatsunamiofWhatIfssuchas:

a. What if I invest in the wrong business?

b. What if I invest too much?

c. What if I invest too little?
d. What if this is a bad idea?

Yes.Investingisabouttakingrisk.Butif,theriskiscalculated,then,it
willalwaysdoyoumoregoodthanharm.Howdoyoudothis?

Well,theclevertrickistogetabove10%inreturns.However,the
chancesofthishappeningwithin1or2yearsisunrealistic.WhatIam
moreinterestedinishavingalongtermperspective.Longtermrefersto
5yearsandbeyond.

2016 Bursaking.com.my

HowtoStartInvestingwithjustRM10,000?

Obviously,theRM10,000isnotenoughtoinvestinpropertiesasprices
haverisenalotsince2011.Thepriceofagoodpropertymay,atleast,
beRM200,000toRM500,000.

Atminimum,theamountofcapitalneededisatleast15%ofthe
propertysvalue.YourHoldingPoweriscrucialinpropertyinvestment.
Thisisbecauseyouneedtobecommittedtoserviceyourmortgage
whichusuallyisonamonthlybasis.

Sincepropertyinvestmentisoutofthequestion,stocksareyourbest
bet.So,whichstockswillyouchoose?

Therearesomanydifferentstocksinthemarket.Sinceweareona
budget,Iwillskipunittrustbecauseofthehighcostofentry(3%6%
upfrontcharge)andyearlyholdingcostof1.5%inmanagementfees.

Ifyouinvestinunittrust,thefundmanagermustproduceatleast11.5%
inreturnstobringyouanetreturnof10%.Inthe1styearalone,thefund
managerneedstomakeaminimumof5%8%returnstohelpyou
breakeveninyourunittrustinvestment.

Hence,itmakesperfectsensetoinvestdirectlyintothestockmarket.
Youwillgetsharesofwellestablishedbusinesseswithgoodfuture
prospects.

RM10,000inOneStockorFewStocks?

Diversificationisoneofthegreatesttacticstoreducetheriskofany
investment.Youmaywanttodiversifyyourinvestmentinto25stocks
tospreadyourriskoutthinly.

2016 Bursaking.com.my

However,itdoesnotnecessarilymeanthatyouwillbeinvestingRM
2,000oneachstockifyoubuy5stocks.Youhavetofactorinthe
transactioncostswhenbuyingshares.Ifonesingletransactionisunder
RM1,000,thepercentageoftransactioncostyoupayishigher.

Forinstance,sharesofHuaYangBhdistradingatRM1.83ashare.
Youractualcostpersharewouldestimatedtobe:

a. IfYouBuy500shares

Cost per Share

= ((RM 1.83 x 500) + RM 42) / 500 shares
= RM 1.91

b. IfYouBuy2,000shares

Cost per Share

= ((RM 1.83 x 2,000) + RM 42) / 2,000 shares
= RM 1.85

Note:
TheRM42istheestimatedcostforfacilitatingthepurchaseofshares.

Personally,Ialreadyhavehundredsofthousandsinvestedinthestock
market.Hence,havingRM10,000meanstoppinguponeortwo
additionalstocksintomyexistingportfolio.

WhatStockstoBuy?

2016 Bursaking.com.my

Afteryouhavefoundagoodbrokeranddecidedtogoaheadwiththe
plan,nowcomesthemostimportantstep.

Youhavetodeterminewhichcompaniesareworthinvestinginand
whichstockswillgiveyouthedesire10%inreturns.Thereare2rulesto
keepinmind:

Rule #1:
Only Invest in Good Businesses

Researchstockslikeyouarewritingathesis!

Thereisnoexcusefornotdoingyourhomework.Evenseasoned
professionalsdonotmakechoicesblindly.

Acompanythatisdoingwelltodaymaynotdowelltomorrow.Youhave
tocatchthegoldengoosewhichisabusinessthatisprofitableallofthe
time,evenduringeconomicdownturns.Mybestguesswouldbelooking
atthosethatdidwellduringtheglobalrecessionin2008.

Businessesthatknowhowtodeploytheircapitaltogetgoodreturnsis
alsorelativelysafetoinvestin.Forinstance,ifacompanyisabletoget
3%returnfromcapitaldeployed,IwouldratherputmymoneyinFixed
Deposits.

Whytaketherisk?

YoucangethigherfixeddepositratesfromAllianceandPublicBank.

So,thekeyistolookatthefinancialratioknownasReturnonEquity
(ROE).Iwouldsimplyignorebusinessesthatgeneratebelow15%in
ROEperannum.

ROE = (Shareholders Earnings / Shareholders Equity) x 100%

2016 Bursaking.com.my

Ifyouhavedoneenoughresearch,youwouldhavealistofgoodstocks
tomonitor.

Rule #2:
Pay the Right Price

SayIwantadiscount!

Youprobablydonotknowthatyoucantreatshoppingforstocksasa
bargainhuntingstocks!

Ifyougettoowngreatassetsatbargainprices,then,whynot?

WheretoFindGoodValueStocks?

Somebusinessesarecyclical.

Theirrevenuesaredependentonbusinesscycles.Theamountof
returnswilldependontheoverallprosperityoftheeconomy.Hence,
whatgoesdownwilleventuallycomebackup.Sinceeconomic
downturnsarenotpermanent,investorsshouldnotbequicktojudge
anddismissthesecompanies.

Atpresent,stocksinthepropertydevelopment,oil&gasandother
relevantsectorsaredepressed.Thismeans,peoplearefearfulofthese
stocksmissingtheirprofits.Overall,moststocksinthesesectorsare
hammereddownbyexcessiveselling.

Therearestillgemsintherubble.Inotherwords,therearestocksthat
arestillprofitableandgrowing,butyet,theirstockpricesaredown.

BeyondMalaysia,lookingattheHongKongHangSengIndex,stocks
aresellingbelowitsnetassetvalue.

2016 Bursaking.com.my

Ofcourse,ifyouhavedoneagreatdealofresearch,findingthebest
stockswouldnotbetoodifficult.SomelistedcompaniesinHongKong
arewellknownbrands.

Imagine.

Onceyouboughtastock,themarketclosedforthenext5years.This
means,youcouldnottradethestockforthenext5years.Howwould
youinvest?

Naturally,youwilllookforcompanieswithcharacteristicstoperform
manytimesbetterthantodayattheendofthe5yearperiod.For
instance,WarrenBuffettholdsontosharesofCocaColaformany
decadesbasedononesimplelogic.

If human population keeps increasing,

the first soft drink in their mind is
Coke!

Totrulyreapthebenefitsfromthestockmarket,youllhavetobeinthe
waitinggame.

About the Author:

KCLauisafinancialeducator.Hehaspublished6booksandcocreated
adozenofonlinefinancialcourses.Youcandownloadhispopular
MoneyTipseBookwhichispackedwith44moneyhacksforabsolutely
freeat
http://KCLau.com/lp

2016 Bursaking.com.my

IfIhaveRM10,000toinvest
WrittenbyIanTai

HereiswhatIwoulddo.

#1:SetMyObjectives

1. Iintendtobuildastockportfoliothat
pays growing dividends
over
thelongterm.

2. Iwouldsplitthecapitalinto2categoriesofstocks,dividendand
growth.

3. Dividend stocks
arestocksthatpayoutconsistentdividends,
preferablyonaquarterlybasis.Iamexpecting,atleast,5%in
dividendyieldsinmy1styearofinvestingindividendstocks.

4. Growth stocks
arestocksthathavepotentialtogrowinvalueover
themidtolongterm.Personally,Idonotsetatargetonhow
muchcapitalgainsIwouldmakefromgrowthstocks.Thisis
becauseIdonotcontroltheupsanddownsinstockprices.

5. Mypriorityforgrowthstocksistoachievecapitalgains.However,
Iwouldstillexpect,atleast,4%individendyieldsinmy1styear
ofinvestingingrowthstocks.Thisisbecauseitishigherthanthe
currentFixedDepositratesof3.3%perannum.

6. IfIcouldnotfindmyselfagoodinvestmentdeal,IwouldparkRM
10,000intoa3monthFixedDepositaccount.Thisisatemporary
measureuntilIlandedmyselfwithagoodinvestmentdeal.

2016 Bursaking.com.my

My Investment Objectives
No. Categories

DividendYields

CapitalGrowth

DividendStocks

5.0%

Low

GrowthStocks

4.0%

High

NoDeal

3.3%

None

#2:MyInvestmentMethod

Ichoose
mid-term investing
asmypreferredstrategytoachievetheabove
objectives.Thisisbecause:

1. Iaminterestedtoownsharesoffundamentallystrong
companies.Itisonlycompaniesthatgrowprofitsconsistently
thatisabletopaygrowingdividendsconsistently.

2. IammorefamiliarwithfinancialreportsasIamanACCA
graduate.Hence,itmakessenseformetoenhancemyskillsas
a
fundamental investor.

3. Iintendtorunthisportfolioonasemiautopilotbasis(atmost,30
minutesaday).ThisisbecauseIamnotaguywhoenjoys
monitoringchartsonadaytodaybasis.

4. IvelearnthowtousetheSMACrossoverMethodtoidentify
pricetrends.Ifindithandyenoughtopreventmyselffrombuying
shareswhentheyareoverpricedandtosellshareswhenthey
areunderpriced.

My Investment Method
= Value Investing (Fundamental) + SMA-Crossover Method (Technical)

2016 Bursaking.com.my

#3:HowISelectGrowthStocks

Case Study 1: Mah Sing Group Bhd

Fundamentals
MahSingisoneofthelargestpropertydevelopersinMalaysia.Ithasa
trackrecordofachievinggrowthinrevenues,profits,cashreserves,and
dividendpayoutsoverthepast5years.

Figures in RM Million
Year

2011

2012

2013

2014

2015

Sales

1,571

1,775

2,006

2,905

3,109

Earnings

169

231

281

339

387

Cash

634

544

808

614

1,280

Dividends

47

69

104

118

157

Growth Prospects
MahSinghasunbilledsalesofRM4.75BillionasatDecember31,
2015.Itplanstolaunchseveralmajorprojectsin2016suchas
Southville@KLSouth,LakevilleResidenceinTamanWahyuand
LamanAyuTownshipinRawang.Furtherahead,MahSinghasa
remaininglandbankof2,540acresworthRM28.1BillioninGross
DevelopmentValue(GDV).

Note:
Mydefinitionofagrowthstockisonethathasrevealed
tangible plans
to
expandforfuturegrowth.Itisnotaboutbuyingastock,hopingitto

2016 Bursaking.com.my

doubleinshareprice.Hence,beforeinvesting,Iwouldbeinterestedto
knowingreatdetailhowastockintendstoderiveincomeinfutureyears.

Valuation
AsIwrite,MahSingistradingatRM1.47ashare.In2015,itmadeRM
0.157inearningspershare(EPS).Hence,P/ERatioworksouttobe
9.36.Itisslightlylowerthanits5YearP/ERatioAverageof9.77.

Technical
3-Year Price Chart

Source:Bursamarketplace.com

Note:
BlueLine=ActualSharePrice
PinkLine=SMA40Line(TracksShortTermPriceTrend)
PurpleLine=SMA100Line(TracksLongTermPriceTrend)

Hereismyobservation:

2016 Bursaking.com.my

1. AtRM1.47,itwas34%belowitspeakpriceofRM2.23achieved
inMay2013.

2. MahSinghasmovedonadowntrendsinceMay2013asthe
PurpleLinewasabovethePinkLine.

3. All3lines:Blue,PurpleandPinkaremovingdownwards.

4. InmidApril2016,thePinkLinehascrossedabovethePurple
Line.Itusuallyisthe1stsignofaswitchinpricetrend,froma
downtrendtoanuptrend.However,Iwouldpersonallywaitalittle
longertoconfirmthechangeinpricetrend.

5. Now,basedonthechartabove,all3lines:Blue,PurpleandPink
aremovingupwards.Ibelieve,thiswouldconfirmanuptrendin
shareprice.

Dividend Yields
MahSinghasdeclaredanannualdividendpayoutofRM0.065ashare
forfinancialyear2015.ThepaymentdateissetatSeptember15,2016.
Thus,ifIbuyMahSingatRM1.47,thedividendyieldtobereceivedis:

Dividend Yield
= RM 0.065 / RM 1.47
= 4.42%

I Would Consider Selling If

1. ThefundamentalsofMahSingturnbadinfutureyears.

2. IftheBlueLine(ActualSharePrice)startstoclimbsteeply,I
wouldgetreadytosell.

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3. TheBlue,PurpleandPinklinesstarttomovedownwards.

4. ThePurpleLineclimbsabovethePinkLine.

#4:HowISelectDividendStocks?

Case Study 2: Axis REIT

Fundamentals
AxisREITisthe1stIslamicbusinessspace&industrialREITin
Malaysia.Ithasbeenincreasingitsnumberofpropertiesandtenancy
baseoverthepast5years.Thishasresultedinhighersalesandincome
distributionfrom2011to2015.

Figures in RM Million
Year

2011

2012

2013

2014

2015

Properties

27

31

31

34

34

Tenants

121

135

130

134

140

Sales
(RM000)

117,726

136,241

143,585

140,049

165,675

Distribution
(RM000)

72,480

65,466

88,789

92,684

92,114

Growth Prospects
In2015,AxisREIThasRM2Billioninassetundermanagement(AUM).
ThemanagementtargetstoincreaseitsAUMtoRM3Billionby2018.It
hasacquiredAxisShahAlamDC2in2015.

Inaddition,AxisREIThascompleted4singlestoreydetachedfactories
inMukimKulai,JohorforRM61MilliononJanuary28,2016.The

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managementhas3moreacquisitionsinitspipeline.Theyincludea
warehousefacilityinSiLC,JohorforRM41Million,awarehousefacility
inPasirGudangforRM33MillionandawarehousefacilityinSungai
Choh,SelangorforRM42Million.

Technical
3-Year Price Chart

Source:Bursamarketplace.com

Note:
ActualSharePrice
GreenLine=SMA40Line(TracksShortTermPriceTrend)
OrangeLine=SMA100Line(TracksLongTermPriceTrend)

AsIwrite,AxisREITistradingatRM1.63ashare.Hereismy
observation:

1. Itis18.5%belowpricesofRM2.00atPeak1and10%below
pricesofRM1.81atPeak2.

2. AxisREIThasmovedonadowntrendsinceJune2015.The
OrangeLinewasabovetheGreenLine.All3lines:Blue,Green

2016 Bursaking.com.my

andOrangelinesaremovingdownwards.

3. InMay2016,theGreenLinehascrossedabovetheOrange
Line.

4. Sincethen,all3lines:Blue,GreenandOrangeLinesare
beginningtomoveupwards.

Dividend Yield
Thelast4distributionpershare(DPS)ofAxisREITwasasfollows:

Figures in sen
Period
GrossDPS

Q22015

Q32015

Q42015

Q12016

2.15

2.20

2.00

2.05

IthaspaidoutRM0.084inGrossDPS.IfAxisREITcontinuesto
maintainitsDPSatRM0.084overthenext4quarters,Iwouldexpect
thedividendyieldtobe:

Gross Dividend Yield

= RM 0.084 / RM 1.63
= 5.15%

I Would Consider Selling If

1. ThefundamentalsofAxisREITturnbadinfutureyears.

2. IftheBlueLine(ActualSharePrice)startstoclimbsteeply,I
wouldgetreadytosell.

2016 Bursaking.com.my

3. TheBlue,GreenandOrangelinesstarttomovedownwards.

4. TheOrangeLineclimbsabovetheGreenLine.

#5:BuildaWatchlist

AsIwrite,theKLCIistradingat1,637points.BasedontheSMA200
indicator,ithasbeenmovingonadowntrendsincemid2014.

5-Year Price Chart

Source:Marketwatch

Itisawelcomingsightforvalueinvestorslikemyself.Thisisbecause
therearemoreopportunitiesforvalueinvestorstobuysharesof
fundamentallysolidcompaniesatmuchattractiveprices.Thus,Iwould
notlimitmyselftoonlyMahSingGroupBhdandAxisREIT.

WithBursaking.com.my,Iambuildingawatchlistofstocksthatare
fundamentallysolidandmonitortheirsharepriceclosely.Therefore,I

2016 Bursaking.com.my

wouldreservesomecashinhandwhichenablesmetocapitaliseon
otherpotentialgooddealsinthenearfuture.

InsteadofallocatingRM5,000intoMahSingandtheremainingintoAxis
REIT,IwouldlimitmyinvestmenttoamaximumRM2,000pershare.
Hence,

If Im given RM 10,000 to invest today, I would:

No. Stocks

Category

Capital

GrossDividend

MahSing

Growth

RM2,000

4.42%

AxisREIT

Dividend

RM2,000

5.15%

3MonthFD

StandBy

RM6,000

3.15%

About the Author

IanTaiistheCreatorof
www.Bursaking.com.my
,auniquelybuilt
websiteforvalueinvestorstosiftoutstocksthatgrowprofitsconsistently
frommediocrestocksthatdont.Hebuilds,maintains,andupdatesa
databasecontainingover850+stockslistedmainlyinBursaMalaysia.

Heproduceseducationalmaterialsonstockinvestingintheformof
newsletters,eBooks,andvideos.Theyareeitherreadilyavailableon
www.Bursaking.com.my
orarecirculatedtoover800Community
Membersnationwide.

Torequestafreecopyof5DifferentMethodsofMakingaProfitinthe
StockMarket,youmaydropanemailat
hello@Bursaking.com.my
.

2016 Bursaking.com.my

IfIhaveRM10,000toinvest
WrittenbyJonathanLai

Sinceitspeakinmid2014,theMalaysianstockmarkethasbeen
experiencingarollercoasterride.Doyoufeel:

a. Frustratedwhenyouseeyourinvestmentgoingsouth?

b. Excitedwhenthemarketismovingnorth?

IusedtobewhenIwasanewbieinstockinvestingyearsago.But,with
correctinvestmentmethodologyandmindset,Ihavelearnthowtoown
riskfreestocks.Today,Ifeelhappyregardlessofthedirectionofthe
stockmarket.

HowdoIdoit?

BuyLow,SellHigh?

Itissimpletobeawinnerinthestockmarket.Buystocksatlowprices
andsellthemathigherprices.Mostofusknowthat.

However,mostofthetime,weforgettheGoldenRuleasaresultof
generalmarketsentiment.Withoutaclearmindset,wetendtobuywhen
themarketishot.Then,weexpecttothemarkettogohigher.Ifthe
marketcomesdown,wetendtopanicandsellshares.

Theseareactsofspeculations.Itisthereasonwhysomeofmyfriends
gotburntwhenthestockmarketfalls.However,Ididnotfacethesame
consequencessimplybecauseIaminvesting.IknowwhatIamdoing.I

2016 Bursaking.com.my

adoptedaninvestmentphilosophywhichshieldedmyinvestmentfrom
marketfluctuation.Itisasfollows:

Buy Quality Dividend Stocks at Low Prices and Keep Them Forever,
as long as their financials is fundamentally intact.

Ibuyonlywhenthemarketisrecoveringfromacrisis.Pleasedotake
notethatIamreferringtoacrisisandnotamarketadjustment.

Idonotknowwhenthenextcrisiswillcome.But,whenitcomes,
everyonewillsurelyknow.Canyourecallwhenthelastcrisiswas?To
me,thelastcrisiswasin2008.Itwasknownastheglobalfinancial
crisis.Themarketstartedtorecoverinearly2009andthatwasthetime
Itookmypositions.

7yearslater,Icontinuetoholdontothesestocks.Yes,thestockmarket
continuestomoveupanddownthroughoutthe7yearperiod.However,
Idonotclearmypositionswhenthemarketisdown.Why?

Thisisbecausethecostofmyinvestmentislow.Ithasyettoreachthe
previouscrisislevelin2008.

BeforetheNextCrisis

YoumaywonderwhatIamgoingtodobeforethenextcrisiscomes.
SinceIcantpredictwhenitwillcome,therefore,Iwillnotdoanything.
But,thereisonethingforsure.Ifthenextcrisishits,Iwilldelightfully
waitforitsrecoveryandgoonmyshoppingspree.

HereisanotherpopularquestionthatIreceived.

What should an investor do with his existing shares during the crisis?
2016 Bursaking.com.my

Myobjectiveistoholdontoqualitydividendstocksforever.Thus,Iwill
continuetoholdontothemregardlessofmovementsinthestockmarket.
Thisis,ofcourse,iftheycontinuetobefundamentallyintact.

Wont Your Investment Shrink in Value?

Youarecorrect.Butitispurelyonpaper.Personally,Iamlooking
beyondthis.ThereasonisbecauseIhavebeenholdingontothesehigh
dividendyieldingstocksforyearsatlowcost.Yearsofdividends
receivedhaveeffectivelyreducedmycostofholdingontotheseshares.

Infact,someofmysharesheldtodayhavezeroininvestmentcost.I
haverecoveredmyinvestmentcostfromyearsofdividendsreceived.
Thesestockscontinuetopaymedividends.ThisisalsowhyIamnot
worriedabouttheupsanddownsinthestockmarket.

SinceIhavenomoneyonthesestocksandcontinuetocollectdividends
fromthem,whywouldIwanttosellthem?

AskingtheExperts

ThereisonemoreissuethatIwouldliketoaddress.Everynowand
then,thereisalwaysaninterviewwithastockmarketexpert.People
oftenseekforhisrecommendationsastheyareregardedhighly.
Personally,Ibelievesomeoftheopinionspresentedaregoodand
helpful.

However,mostlistenerstendtoacceptthesetipsandrecommendations
unconditionallywithoutfurthervalidation.Thismayleadtoadisastrous
endingtotheirquestofinvestingsuccessfullyinthestockmarket.This
worriesmethemost.

2016 Bursaking.com.my

Today,newsandinformationsareobtainedinnotimewhichhelpsusto
maketimelydecisions.Thejustificationoftheseinformationsplaysa
veryimportantrole.Wouldntyoufeelmoreconfidentifaninvestment
decisionismadebasedonyourpersonalexpertiseandunderstandingof
thestockmarket?

Youareeffectivelyeliminatingunnecessaryriskasaresultofmaking
wrongdecisionsbyblindingacceptingtheopinionsofvariousstock
marketexperts.

Personally,Itreatopinionsoftheseexpertsasreferences.Iwillfilter
thembeforeadoptingthemintomyprocessofmakinganinvestment
decision.Thisrequireslearningandpractise.Actionandexperienceswill
furtherenhancemyabilitytomakeeffectivedecisions.

HowtoFish?

IhaveastockinvestmentcoursewhereIteachmystudentstodotheir
ownfishing.Idonotfeedthemfish.Thismeans,Idonotprovideany
stockrecommendationdespiteknowingthatsomestudentsmayexpect
metodoso.

Anystocksusedascasestudiesareforillustrativepurposes.I
emphasizesonstudentsperformingtheirownfinancialanalysis.They
havetodotheirownfactfindingandnotrelyingonrecommendationsby
others.Iwouldshowmystudentswheretheycanlookforthese
informationandhowtoassessthem.

Tomakethelearningprocessmoreinteractiveandeffective,Iwould
requestmystudentstosubmittheiranalysisoftheirchoiceofstocks.
Theywouldexplainonhowtheymaketheirinvestmentdecisionon
thesestocks.

2016 Bursaking.com.my

Afterusingmystyleofanalysingstocks,someofmystudentshave
filteredoutsomewellknownbluechipstocks.Theystartedtohave
doubtsandseekformyadvice.

Theiranalyticalworksaresoundandlogical.However,theylack
confidenceovertheirworkastheyseemtonegatingtheinvestment
crowd.Howcouldthesebigwellknownbluechipcompaniesbefiltered
out?

Yes,theymaybebigandwellknown.But,whosaysthatthesestocks
arequalityinvestments?Whatisthebasisofgood?Isitbasedon
generalimpressions?Isitbasedonwhattheinvestmentmarketis
saying?Isitbasedonwhatthegeneralpublicissaying?Canthesebe
validated?

Mymessageis:

1.

Dont just listen and believe in these general information and

opinions.

2.

Be yourself and do your own analysis.

3. Only your analysis could tell you what the truth is.
4. Have Strong Belief in Own Analysis is key to success in stock
investing.

Personally,Iwillkickthesestocksoutofmyradaraslongastheyfailmy
evaluationprocess,eveniftheyarebigandwellknown.

BacktotheTopic

2016 Bursaking.com.my

IfIhaveRM10,000,Iwillinvestin
QualityDividendStocks
bydoingthe

following:

1. Iwillusemy
Analytical Processes

toidentifyamaximumof5
qualitydividendstocksduetolimitoffunds.

2. IwillallocateamaximumofRM2,000foreachstock.

3. Iwillbuythesestockswhentheirsharepriceisrecovering.I
couldobservethisbyusing
Technical Processes
.Atthisentry
point,thechanceofamarketdownturnisrelativelylow.

4. Myinvestmentcostwillbecomelowerduetosubsequentyears
ofdividendtobereceivedandtheusageofPoint3.

5. Whenthenextcrisishits,Iamnotworriedaboutwhetherthe
marketisgoinguporcomingdown.Thisisbecausemycostfor
investinginshareswouldgraduallydroptozeroastheycontinue
togeneratereturnstome.

6. Afterall,thestockmarketiscyclical.Itwillfallwhenitpeaksand
willclimbwhenithitsthebottom.AllIneedtodoistoreact
accordinglywhenatrendisformed.Anothercrisiscanbeviewed
uponasagoodtimetobuyshares.

Today,Ibelievethattheprobabilityofamarketdownturnishigh.Hence,
Iwouldratherstayatthesidelinesforthetimebeing,patientlywaitingfor
theopportunitytohuntemerges.Ifthatisthecase,then,whatshouldI
bedoingwiththeRM10,000?

IfIputitinfixeddeposits,inflationwillerodethepurchasingpowerofmy
money.Hence,IwouldchoosetoinvestinRealEstateInvestment
Trusts(REITs).

2016 Bursaking.com.my

WhyREITs?

ItreatinvestingREITsasanalternativetoinvestinginproperties.Here
arethemeritsofinvestinginREITs:

1. Itisbackedbyphysicalproperties.

2. Propertyvaluationsaredoneexpertly.Thereisnothingtohide.

3. Idonotneedtohavehugeamountofcapitalanddonotneedto
borrowmoneyinordertoowntheseproperties.

4. REITsareeasiertobeliquidatedthanphysicalproperties.The
tradingrulesareexactlythesameasstockinvestments.

5. WithREITs,Ibecomeacoownerofproperties.Iamentrusting
myfundstothefundmanagerwhichactsonmybehalfto
managetheseproperties.Yes,theywilltakecareofthe
maintenance,seektenantsandcollectrentalincomefromthem.
Itshasslefree.

6. Dividendswillbedeclaredfromtimetotimebythefundmanager
afterdeductingalloftherelevantcostsfromtherentalincome
received.TheywillbedistributedtounitholdersofREITs.

ToinvestsuccessfullyinREITs,Iwill:

1.

Seek REITs with Net Asset Value at least 10% higher than their
share prices.

2. Seek REITs that pay out at least 6% dividend yield after deducting
the 10% in withholding tax.

2016 Bursaking.com.my

Bydoingso,Iwillindirectlyownpropertieswithatleast10%discount
frommarketpricewhilereceivingatleast6%inannualdividends.Just
imagine.ThereisaproductthatyoudesirewhichisworthRM100.This
productisnowsellingatRM90withcashrebates.Willyougoforit?

Insummary,IwillinvestinREITsastheyaremoneymakingmachines
whichchurnoutregularcashreturnsandallowmetoenjoypotential
capitalgain.ThisisdonewhileIamwaitingforbuyingopportunitiesfor
QualityDividendStocks.

About the Author

ThisisapostbyLaiSengChoy.Heistheauthorof2investmentbooks,
InfiniteWealthandFreedom.Bothbooksdescribeandsharehis
personalexperiencesonstockinvestingandmoneymanagement.

Inaddition,Laiupdateshisblog,FinancialPlanningDIY
(
http://financialplanningdiy.blogspot.com/
)tosharehislatest
developmentsandfindings.Heisalsoaninvestmentcoachfor
Inve$tBursa(
http://investbursa.com/
)whereheshareshisinvestment
philosophy,knowledgeandprovidespersonalguidancesonstock
investingtohisstudents.

2016 Bursaking.com.my

IfIHaveRM10,000toInvest
WrittenbyAuntyYY.TranslatedbyIanTai.

IfIhaveRM10,000toinvest,Iwouldchoosetoinvestinstocks.Thisis
ifIdonotintendordonotknowhowtostartasmalltradeora
homebasedbusiness.Thereare3primaryreasonswhyIpreferto
investinstocks:

1.

Low Barrier of Entry.

Theminimumamountofsharestobepurchasedissetat1Lot(100
shares).IfastockispricedatRM1ashare,theminimumcapitalto
investwouldbejustalittlemorethanRM100afterincludingtransaction
cost.

2. Liquidity

IfImadeamistake,Icanselloffmysharesataclickofabutton.This
allowsmetocutfurtherlossesearlier,thus,preservingcapital.

3. More Forgiving

Ibelieve,investinginstocksismoreforgivingthaninvestingin
properties.Forstocks,theamountlostwouldbelimitedtomy
investmentcapitalofRM10,000.

Meanwhile,itisnotthesameforpropertiesastheyareilliquid.Just
imagine.Youpurchasedapropertyatabadlocationandfailedtorentit
out.Inasoftmarket,wherethereisanoversupplyofproperties,itwill

2016 Bursaking.com.my

takemanymonthsoryearstodisposetheproperty.Atthemeantime,
whoisservicingthemortgagepayments?

HowYouCanBuyBillion-RinggitPropertiesinthe
StockMarket?

HaveyoubeentoPavilion,MidvalleyMegamall,SunwayPyramidor
SuriaKLCC?

AreyouawarethatthesepropertiesaretrophyassetsofvariousREITs
listedonBursaMalaysia?

IfyouinvestinREITs,theREITspropertymanagerwouldmanage
theseBillionRinggitpropertiesonyourbehalf.Thisincludesproperty
maintenance,findingandretainingtenantsandcollectingrentfrom
them.Asaminorityshareholder,youwillreceiveregulardividend
payoutsfromtherentproceedsoftheseproperties.Itshasslefree.

StartwiththeBasics

Firstly,investinginstocksisaboutbuyingandsellingsharesofpublic
listedcompanies.Whenwebuyshares,webecomeminority
shareholdersofabusinessenterprise.

Do you want to own shares of a profitable company or shares of an

unprofitable enterprise?

Thechoiceisobvious.Hence,thekeyistofindprofitablecompanies
whichpayoutdividendstoitsexistingshareholdersfromaportionof
theirprofits.Asinvestors,weshouldfamiliarizeourselveswiththe

2016 Bursaking.com.my

companysfinancialperformances.Thisinformationcanbeobtained
fromthestocksannualreports.

Inaddition,weneedtounderstandthatthebusinessworldis
everchanging.Nothingremainsconstant.Awellreceivedproducttoday
maynotbewellreceivedtomorrow.

Forinstance,iPhonehasbeenthetopsellingsmartphonebrandinthe
worldforthepastfewyears.In2016,AppleInchasexperienceda
declineiniPhonesales.

Thus,thereadingoffinancialreportsdoesnotendafterwehavebought
ourshares.Weareresponsibletokeepourselvesabreastwiththelatest
financialprogressbyreadingandinterpretingthestocksquarterand
annualreports.Thesereportsareeasilyaccessiblefromthecompanys
websiteortheofficialwebsiteofBursaMalaysia.

ASmallPartnerofaBigCompany

BeforeIcontinue,pleaseallowmetoemphasizethat:

Buying shares is about becoming

a small Equity Partner of a business enterprise.

Abusinessenterpriseneedstimeandefforttogrowinvalue.Just
imagine.Howmucheffortisneededtorunasuccessfulshoppingmall?
Themanagementneedstocollectrent,repairandmaintaintheproperty,
renovatetheproperty(ifnecessary),decoratetheproperty,andorganize
eventstoattractshopperstodomoreshopping.

Itisadaytodayfocusfromthemanagementtoensurethecontinual
successofashoppingmall.

2016 Bursaking.com.my

Unfortunately,theupsanddownsinsharepriceovertheshortterm
remainsasthemainfocusofmostinvestorstoday.Thefinancialsofa
companyseemstobelesssignificant.

Letsgetthisstraight.

In stock investing, one must be prepared to hold onto a stock for at least 3 5 years. In other words, you are entrusting your capital to the management
so that they can use the money to grow their business enterprises.

HowtoAllocatetheRM10,000?

Personally,IwillinvesttheRM10,000into2stocks.Theyare:

1. KarexBhd(RM2.47x2,100shares=RM5,187)

2. SunwayREIT(RM1.59x3,000shares=RM4,770)

2016 Bursaking.com.my

Personally,theminimumholdingperiodforbothstocksaresettobe3
years.

KarexBhd

Profile:
KarexBhdisthelargestcondommanufacturerintheworld.Inaddition
toclientsrangingfromglobalbrandowners,governmentand
nongovernmentagencies,KarexBhdmanufacturescondomsunderits
ownbrands,namelyCarexandINNO.Theyaremainlyexportedto
countriesintheMiddleEast.

Source:AnnualReport2015ofKarexBhd

2016 Bursaking.com.my

Basic EPS
Year

2013

2014

2015

6M2016

EPS

5.62

7.85

9.51

6.72

KarexBhdisagrowingenterprise.Itwaspubliclylistedin2013.During
theyear,KarexBhdhassetatargettoincreaseitscondomproduction
capacityupto5Billionpiecesperannumby2015.

AccordingtotheChairmansStatement,KarexBhdhasindeedraisedits
productioncapacityto5Billionpiecesofcondomin2015.Hence,the
managementwasabletodeliveronitspromisesmadein2013.Thisis
positive.Afterall,ifwebuysharesofKarexBhd,weareentrustingthe
managementteamtogrowourinvestmentcapital.

2016 Bursaking.com.my

Future Growth Plans:

Movingforward,KarexBhdtargetstoincreaseitsproductioncapacityto
6Billioncondomsby2016andto7Billioncondomsby2017.

Also,onOctober3,2014,KarexBhdhasacquired55%ofGlobal
ProtectionCorporationforUS$6.6Million.Itisacondomandlubricant
distributoroftheOnebrandproductsandothertrademarkedbrand
nameproducts.StartinginDecember,OneCondomisavailableon
shelfsof7Eleven,GuardianandAEONWellness.

ScreenshotofOneCondomFacebookFanPage

Why do I buy Karex Bhd?

1. ByattendingtheAGMofKarexBhd,Idiscoveredthattheprofit
marginishigherforcondomsmanufacturedunderitsown
brands.

2. Atpresent,KarexBhdsP/ERatioisover30.Thestockisoften
deemedasbeingovervalued.

3. Personally,Iamwillingtobuy2,100sharesofKarexBhdata
totalpriceofRM5,187.ThisisbecauseKarexBhdisagrowing
company.IhavefactoredinthepotentialgrowthofKarexBhd

2016 Bursaking.com.my

whenpurchasingitsshares.

4. ImayconsidersellingoffsharesofKarexBhdifthemanagement
failstogrowitsearningsinthenearfuture.

5. Onthebrightside,ifKarexBhdisabletosustainearnings
growthinthefuture,Imayhandsomelyreapmyrewardsthrough
capitalappreciation.

JustImagine.

YouhaveboughtsharesofPublicBankBhd,TopGloveCorporation
BhdandLPICapitalBhdwhentheywerenewlylisted.Youheldthese
sharesoverthelongterm.Howmuchreturnswouldyouhavereceived
fromtheseinvestments?

Investing in a Growing Market

Justafewyearsback,weweretalkingaboutscarcityinoilresources
andhowexpensiveoilpriceswouldbeinthefuture.Today,the
Americansareabletoextractshaleoilandthus,substantiallyincrease
globaloilproduction.Thisenablesustoconsumeoilatcheaperprices.

Ifwelookatthepropertymarket,wefindthatthereisanoversupplyof
residentialproperties,shoppingmallsandofficespaces.

Arethereanyproductsinthemarketthatisgrowingindemand?

FromtheAGM,KarexBhdmentionedthatitisnotworriedabout
receivingmoreorderbookforitscondoms.Themanagementisfocusing
onexpandingitsproductioncapacitytocatertohigherdemandof
condomsinthefuture.

InsteadofaQuickRichScheme,isntitbettertoexchangeyourRM
5,000withsharesofagrowingcompany?Attheveryleast,theseshares

2016 Bursaking.com.my

areregisteredunderyournameandthus,givingyouasenseof
ownershipofatangiblecompany.

SunwayREIT

Profile:
SunwayREITpaysoutdividendsamountingtoaminimumof90%ofits
realizedearningstoitsunitholders.Thedividendpayoutsareregularly
madeonaquarterlybasis.

Thismeans,ifyouareaunitholderofSunwayREIT,youwillreceive
dividendsonceevery3months.

Themapbelowshowsthelocationofallinvestmentpropertiesownedby
SunwayREIT.

2016 Bursaking.com.my

Ibelieve,youarefamiliarwithSunwayPyramid.Itisthetrophyassetof
SunwayREITwhichaccountsfor60%ofSunwayREITsnetprofits.

2016 Bursaking.com.my

ForthelatestquarterendedMarch31,2016,SunwayREIThasreported
tomake2.23seninEPS(EarningsperShare)anddeclared2.37senin
DPS(DividendsperShare).

LetusassumethatSunwayREITcontinuestodeclare2senofDPSfor
everyquarter.Thus,IwouldexpectSunwayREITtodeclare8senof
dividendsperannum.

Thismeans,ifyoubuy1,000unitsofSunwayREIT,youwillstandto
receiveRM80inannualdividends.Atpresent,thepriceofSunway
REITisRM1.59perunit.Thus,yourinvestmentfor1,000unitsof
SunwayREITwouldbeRM1,590.

Asaresult,

Dividend Yield
= (RM 80 / RM 1,590) x 100%
= 5.03%

2016 Bursaking.com.my

ItishigherthanputtingyourmoneyinaFixedDepositaccount.
Moreover,SunwayREIThaspotentialtogrowitsearningsinthenear
future.Thisisbecause:

1. Sunway Putra Mall

hasreopeneditsdoorsinMay2015after
massiverefurbishment.Sincethen,theshoppingmallhas
experiencedimprovedoccupancyrate.

2. Sunway Putra Tower

and
Sunway Putra Hotel
hasreportedhigher
incomesincethereopeningofSunwayPutraMall.Theyare
connectedwithSunwayPutraMall.

3. Sunway Pyramid
isexpandingitsnetlettableareawiththe
developmentofSunwayPyramidPhase3.Thisdevelopmentis
expectedtocompletebymid2016.SunwayPyramidwould
receivehigherrentalincomeifthemanagementisableto
successfullyletoutthespacesatSunwayPyramidPhase3.

4. Themanagementhasmentionedthatitwouldacquirenew
investmentpropertieswhentheopportunitytoinvestarises.

Basedonthemanagementstrackrecordandcapability,Iamwillingto
investtheremaininghalfoftheRM10,000intoSunwayREIT.This
wouldbealongterminvestment.Iwouldconsiderdisposingunitsof
SunwayREITif:

1. ThereisachangeinthemanagerialstructureofSunwayREIT.

2016 Bursaking.com.my

2. SunwayREITisunabletogeneratestrongfinancialresultsinthe
future.

Caution!

Pleaseberemindedthattherearerisksinvolvedinstockinvestment.

Tomitigateriskofinvesting,weshouldfamiliarizewiththecompanyand
itsfinancialpositionsfirstbeforeinvesting.Weshouldalsocontinueto
keepourselvesupdatedwithitslatestfinancialperformancesafter
acquiringsharesofthecompany.

Thisarticleisintendedtosharemythoughtprocessandjourneyasa
stockinvestor.Itisnotintendedtoproviderecommendationonstock
investing.Hence,Iherebydisclaimedanyriskandrewardfromany
gainsandlossesarisingfromthedirectandindirectusageofthe
materialspresentedabove.

Regards
Aunty YY

About the Author

Today,itisAuntyYYspassiontoincreaseherownershipofdividend
payingstocksandtoshareherlatestshoppingdealsinherblog,
KLSETalk

.
Presently,AuntyYYsblogisamongthe
mostfollowedMandarinwrittenstockinvestmentblogsinMalaysia.

2016 Bursaking.com.my

What Choice Investing is About

TakenfromWarrenBuffettsResponseon
HisInvestmentinCoke
WrittenbyCFLieu

OnApril30,2016,BerkshireHathawayhasheldits51stannualmeeting.
Itisthefirsttimethatthemeetingisstreamedliveglobally.

Duringthemeeting,WarrenBuffett,theCEOofBerkshireHathawayand
CharlieMunger,theconglomeratesViceChairmanhaveheldcourtfor6
hours,fieldingquestionsfromjournalists,analystsandexisting
shareholdersofBerkshireHathaway.

Whatdidtheysay?

Lotsofthings.

Or,intheeyesofsomeprominentcommentators:NothingasUsual.

2016 Bursaking.com.my

Nothingrefersto:

There is nothing you can take home

and apply directly to make money instantly.

TheMillion-DollarQuestion

Heresthehighlightofthemeeting.

WarrenBuffettwasasked:

Should shareholders of Berkshire Hathaway be proud to own shares of

Coca-Cola?

ItwasaclassicGotchaquestion.

Butyouknowwhat,Buffettsimplyeludedthatveryquestion.

Instead,BuffetttalkedaboutChoice.

Choiceisabout:

a. How much Coke he chooses to consume (4 - 5 cans a day)

b. How no one is forced to drink Coke

CharlieMunger,whoisalawyerbytrade,arguedthatthequestion
ignorestheproductsadvantagewhichbasicallyis:

2016 Bursaking.com.my

Coke Tastes Good!

Itisjustliquidcandy.BuffettmentionedthathedrinksCokebecausehe
likesit.Jokingly,headded,Ifyoudowhatyouwant,youwilllive
longer!.

AfterlisteningtoWarrenBuffetttalkingaboutwhateverhewantstotalk
aboutduringthemeeting,thereisonelessonthatwecanbringhome.
Thatis:

Make Your Own Choices

MoreQuestionstoBuffett

Movingon,Buffettwasaskedspecificquestionsregardingthemorality
ofCocaColaandalsoontheprocessheusestochoosehisstock
investments.

Timeandtimeagain,hedemurred.

Itisnotourbusinesstojudgeonhischoicesmade.Also,theresults
arisingfromhischoiceishisalonetolivewithit.Itisclearthat:

Buffett is not influenced by

what his shareholders and other people think
about his investment choices.

Forinstance,BillGatessatinthefrontrowduringtheannualmeeting.
WeknowhowchummyGatesiswithBuffett.However,despitetheir
friendship,BuffettdoesnothavesharesofMicrosoftinhisportfolio.As

2016 Bursaking.com.my

wedigfurther,wewillfindthatBuffettdoesnotbuysharesofApple,
GoogleorFacebook.

Herearethetop10sharesheldbyBerkshireHathawayforthe4th
Quarterofyear2015:

No. Stocks

%
of
Portfolio

No.of
Shares
(Million)

Share
Price
(US$)

WellsFargo

19.78

479.7

54.36

KraftHeinzCo.

17.97

325.6

72.76

CocaColaCo.

13.03

400.0

42.96

IBM

8.46

81.0

137.62

AMEX

8.00

151.6

69.55

Phillips66

3.81

61.5

81.80

Procter&Gamble

3.18

52.8

79.41

USBancorp

2.75

85.1

42.67

WalMart

2.61

56.2

61.30

10

DaVitaHealthcare

2.04

38.6

69.71

Thesestocksaccountedfor81.63%ofBerkshireHathawaysstock
portfolioattheendof2015.

Thus,ifBuffettbuyssomethingsandchoosesnottobuyothers,we,the
BuffettWatcher,cantrytofigureitoutonourown.

TheannualmeetingisnotjustaboutlisteningtowhatBuffetthastosay.
Moreimportantly,itistoabsorbinwhathestandsfor.Throughhis

2016 Bursaking.com.my

preaching,theaudiencewasgivenawindowintohisviewoftheworldof
stockinvesting.

Wearefreetoagreeortodisagreeonhischoicesofstockstoinvest.

Also,hereiswhatIbelieve.

IfyouchoosetonotinvestinsinstockslistedonBursaMalaysia
(GentingBhd,BritishAmericanTobaccoandCarlsberg),youshould
notjudgeandcondemnotherinvestorswhoinvestedtheirRM
10,000intothemastheyreapgooddividendsfromthem.

Thisisbecause,ifonecondemns,itisakintocriticizingBuffettforhis
investmentinCocaCola.

ImnotsurewhetherCocaColaismorallyandethicallyasound
company.Letusnotforget.TogetherwithBillGates,WarrenBuffettis
thefounderofGivingPledge.Itisanorganizationthatinspireswealthy
peoplearoundtheworldtodedicatethemajorityoftheirwealthto
philanthropy.

Youwillfindalotofwealthyindividualswithabigheartonthewebsiteof
givingpledge.org.

2016 Bursaking.com.my

About the Author

CERT
CFLieu,
CFP
isafinancialplanningmanageratCheng&CoWealth
ManagementSdnBhdinPenang,Malaysia.ItisasubsidiaryofCheng&
CoGroupofCompaniesandapracticeofficeofStandardFinancial
AdviserSdnBhd(StandardFA).Heisalsothefounderof
http://HowToFinanceMoney.com
.
whichisoneofthetoppersonalfinance
knowledgewebsitesinMalaysia.

2016 Bursaking.com.my

IfIhaveRM10,000toInvest
WrittenbyAlexTan

RM10,000

Notconsideredsubstantial.

Nottoolittle,either.

Youcandefinitelycreatemassivewealthifyouareabletoinvestand
reinvestitathighrateofreturnsformanyyears.

Hence,donotunderestimatethepowerofRM10,000.

IfyoumanagetosaveRM10,000everyyearandinvestthemtoget
goodlongtermreturns,chancesare,youwillachievefinancialfreedom
in20years.

Letusstartbyassumingthatyouhavegraduated,workedforayear,
andmanagedtosaveupRM10,000.YoudecidedtoinvesttheRM
10,000intothestockmarket.

However,youhavenoideahowtoinvestandareafraidoflosingyour
hardearnedmoney.Ifthissoundsfamiliartoyou,dontworry.Ivegot
yourback!

DiversificationMakesNoSensetoMe

Personally,IwillconcentratetheRM10,000intoonecompany.

Yes,youdidnothearmewrongONEcompany.

2016 Bursaking.com.my

Warren Buffett mentioned,

Diversification is protection against ignorance.
It makes little sense if you know what you are doing.

Butthatonecompanyhastomeetcertaincriterions.Iwillelaborate
furtheronthisverysoon.

IfyourestrictyourselftobuyingonlyONEcompanythisyear,most
likely,youwouldspendmoreofyourtimestudyingabouteachcompany
beforeinvesting.Ifyouhavedoubtsofanopinionwhichcannotbe
backedbysolidfacts,youwillpassontheinvestmentopportunityand
continuetohuntforabetteropportunity.

Academically,somemayarguedthatinvestorswouldsignificantly
reducedownsideriskbyhavingmanystocksintheirportfolio.Theprice
appreciationinsomestockswouldoffsetthepricedepreciationinother
stocks.

However,letusbearinmindthatthepotentialupsidegainswillbetaken
awayfromyouasaresultofhavingadiversifiedportfolio.Asaresult,
youstandtogetlowreturnsfromtakinglowrisks.

Ibetlowreturnsisnotwhatyouwant.Personally,Idonotwantiteither.

Here,Iwouldprovidesomeindicationsonhowtoachievehighreturns
withlowinvestmentrisk.

How to Reduce Your Investment Risks

FocusonAnalysingEachCompanysBusinessRisksandJotThem
Down.Investinthecompanywiththelightestbusinessrisks.

2016 Bursaking.com.my

Inmyperspective,therearegenerally2sensiblewaystoobtainhigher
returns:

a. Invest in an Extremely Undervalued Mediocre Company

b. Invest in a Slightly Undervalued Wonderful Company

Iprefertoinvestincompanieswiththelightestbusinessrisks.Aslightly
undervaluedwonderfulcompanywillbeprioritizedduetoitsbusiness
qualities.Thesequalitieswillpavethewayforundisruptedprofit
growths,whichultimately,leadstoeverincreasingshareprices.

However,ifyouarenotabletofindsuchbusinesses,theformerwhichis
anextremelyundervaluedmediocrecompanywiththelightestbusiness
risksshouldgiveyouabetterreturnthanfixeddeposits.

ThisiswhatIcalled,focusedorconcentratedvalueinvesting.

Togiveyouaclearerpicture,Iwillshowyouacasestudyofmine.

Case Study: Padini Holdings Bhd

Source:Bursamarketplace.com

2016 Bursaking.com.my

TheaboveisthesharepricechartofPadiniHoldingsBhdfrom2012to
2015.In2015,Padinicaughtmyattentionwhenitssharepricefellfrom
RM2.00inJuly2014toRM1.30inJuly2015,a35%dropin1year.

However,thedropinsharepricewasnottheonlyreasonwhyIlooked
intothiscompanyandIwillshowyouwhy.

#1:ICheckedtheBusinessModel

Padinidoesnotengageinmanufacturingactivities.Itdesignsand
outsourcesthemanufacturingoffashionableapparelstooverseas
manufacturers.ThecompanycarriesbrandswhichincludePadini,
PadiniAuthentics,Seed,P&Co,PDI,Miki,Vincci,VincciAccessories,
Tizio,andBrandsOutlet.Ibelieve,atleast,someofthesebrandsare
familiartoyou.

#2:ICheckedontheMajorShareholders

IalwaysprefertoinvestincompanieswhichtheManagingDirectorowns
asubstantialstakeinthecompany.Mr.YongPangChuanisthe
ManagingDirectorofPadiniHoldingsBhd.Heholdsmorethan40%
directandindirectshareholdingsofthecompany.Withreasonable
remunerations,thisensuresthatthedirectorsinterestisinlinewithits
shareholders.

#3:ICheckedontheProfits

In2015,thecompanyiswillingtoabsorbGST.Thus,ithasaffected
profitabilityin2015.Iopinedthatcustomerswouldsoongetusedtothe
6%GSTimposition.Afterall,theimpactofGSTtowardsretail

2016 Bursaking.com.my

consumptionisshorttermandnotexpectedtobelongterm.Assuch,
theGSTimpactdoesnotworrymemuch.

Figures in RM Million
Year

2011

2012

2013

2014

2015

Sales

568.5

726.1

789.8

866.3

977.9

Earnings

75.7

95.3

85.4

90.9

80.2

Source:AnnualReportsofPadiniHoldingsBhd

#4:ICheckedontheCustomerFlow

Likeanyothercompanies,Padinifacesstrongcompetitionfromother
retailingbrandssuchasH&M,Uniqlo,andZara.Someinvestorsdonot
feelcomfortableinvestinginafashionbasedcompany.Itisjustamatter
ofindividualpreference.

But,Imusttellyouthis.

Accordingtoitswebsite,Padiniistheleaderinthemultibilliontextileand
garmentindustryinMalaysia.Themanagementsfocusondelivering
stylishyetaffordableclotheshasimpressedme.

Padiniseverincreasingsalesarecontributedbygainingcustomer
loyaltythroughofferingvaluableproducts.Thisalsoexplainswhywecan
alwaysseeverygoodcustomerflowinPadinisoutlets.Ihavestrong
convictionthatMalaysianswillcontinuetopatronizePadiniformany
yearstocome.

#5:ICheckedontheRentalCost

2016 Bursaking.com.my

RentalisthemajorcostincurredbyPadiniasitopensitsoutletsin
shoppingmalls.Fromitsannualreports,wediscoveredthatthe
managementhasbeenmanagingitsrentalcostswell.Itisdoneby
havingPadiniConceptStoretohouseallbrandsunderPadiniHoldings
Bhdunderoneroof.

Thisisabrilliantmoveasitreducesrentalcostperunitandhas
producedhigherefficiencyandcostcontrol.Thus,despiteincurring
higherrentalexpenses,itsproportiontoannualrevenuesremainsat9%
overthepast5years.

Figures in RM Million
Year

2011

2012

2013

2014

2015

Rental

51.2

62.5

71.5

80.9

87.7

Sales

568.5

726.1

789.8

866.3

977.9

%of
Sales

9.0

8.6

9.1

9.3

9.0

Source:AnnualReportsofPadiniHoldingsBhd

#6:OnForeignCurrencyRisks

Padiniisexposedtoforeigncurrencyrisksasitpurchasedmostofits
finishedgoodsfromitsmanufacturersinChina.Theweakeningof
RinggitMalaysiamayadverselyimpactthecompanysprofitability.

Inmyopinion,IbelievetheRinggitwouldeventuallyrecoverasour
countryseconomicfundamentalsremainintact.IftheRinggitdoesnot
recover,theimpactofhigherimportcostsshouldbelargelymitigatedby
thecontinualsalesgrowthachievedbyPadini.

#7:ICheckedontheFutureGrowth
2016 Bursaking.com.my

Here,IhaveextractedanewsarticlefromTheStarOnlineonPadini
HoldingsBhd.ThetitleisPadiniforgesahead.

The group is taking bold steps forward, having invested in an e-commerce

platform and planning 16 more stores next year. Only 3 of them would be
located in the Greater Kuala Lumpur area.

Thus,Iwishtoparticipateinthisgrowth.

#8:IBoughtPadiniataDiscount

Asmentioned,PadinisshareswentdownfromRM2.00ashareinJuly
2014toRM1.30ashareinJuly2015.Thus,itislikeenjoyingadiscount
of35%ifIpurchasePadinissharesatRM1.30ashare.Inaddition,we
canuseP/ERatiotovaluesharesofPadiniHoldingsBhd.

IfwelookatitsP/ERatio,itisnotonlybelowits5YearAverageof
12.32,butalso,itisthelowestrecordedsince2012.

Year

2011

2012

2013

2014

2015

P/ERatio

9.21

12.70

14.56

14.25

10.90

#9:IHaveMyInvestmentPlanforPadini

Myplanwastoinvestabout20%ofmyportfoliointoPadini.Iama
DollarCostAverageranddonotbelieveintimingthemarket.Ifpriceof
Padinissharesgodown,Iwouldbuymoretoaveragedownmy
investmentcostinPadini.

2016 Bursaking.com.my

Thus,IhadbeeneagerlywaitingforpricestodroptoRM1.20ashare.I
prayedthatitssharepricewouldnotsurgeuntilIhavecompletedmy
purchaseinPadini.Unfortunately,sharepriceofPadinihasbeen
increasingeversinceandIdidnothavetheopportunitytoaccumulate
moresharesofPadini.

Source:Bursamarketplace.com

AsIwrite,sharesofPadiniaretradingatRM2.38ashare.Youcan
calculatemyunrealizedreturnsforyourself.

Inaddition,duringthisperiod,IhavebeenreceivingdividendsasPadini
paysoutdividendsonaquarterlybasis.

Dividends Declared since July 2015:

No. Item

PaymentDate

Amount

FirstInterimDividend

Sep21,2015

RM0.025

SecondInterimDividend

Dec31,2015

RM0.025

ThirdInterimDividend

Mar28,2016

RM0.025

2016 Bursaking.com.my

SpecialDividend

Jun29,2016

RM0.015

FourthInterimDividend

Jun29,2016

RM0.025

Inmy1styearasashareholderofPadiniHoldingsBhd,Iwouldreceive
RM0.115individends.Thisworksouttobe8.85%individendyields,
wayhigherthanputtingmymoneyinFixedDeposits.

Dividend Yield
= (RM 0.025 + RM 0.025 + RM 0.025 + RM 0.015 + RM 0.025)
/ RM 1.30 x 100%
= 8.85%

Todate,IamstillasatisfiedshareholderofPadiniandIcontinuetohave
strongfaithinitsbusiness.

WhatsMyMessage?

Iamnotheretoshowyouhowmyinvestmentshavebeendoing.

Instead,Iwanttoconveytoallmyreadersthismessage:

It is the process of going through

the investment analysis that makes the difference.

Ifyouarestillnewtostockinvesting,Iwouldencourageyou:

1.

To keep learning

2016 Bursaking.com.my

2. Practise with small amount of money.

3. Being patient is key as Mr. Market likes to fool impatient investors.
4. Do not get too confident.
5. Keep looking for loopholes in your analysis.
6. Keep Conservatism in mind.
7. Avoid Treating Diversification as a means to reduce risk.
8. Spend more time to dig into each companys business risks and
invest in one that has the lightest risk.

These,Icansay,willbethebestwaytoreduceyourinvestmentriskin
thestockmarket.

Thanks,
AlexTan
ManagingPartnerofVGrowthCapitalPLT
www.valueinvestingstock.com

About VGrowth Capital PLT

VGrowthCapitalPLTwasformedwiththeprimaryaimtoinvestinthe
stockmarket.AlexTanwasapproachedbyaninvestorwithasixfigure
startupcapital.Thepartnershippractisesconcentratedvalueinvesting
inundervaluedyetwonderfulbusinesses.

2016 Bursaking.com.my

IfIhaveRM10,000toInvest
WrittenbyPCWong

Thecurrentglobaleconomicoutlookisextremelyweak.Weareonthe
vergeofyetanotherglobalfinancialcrisis,whichcouldbeworsethan
2008.Thereareseveralindicatorswhichsupportthisview:

1.

Debt

TheworldisfloodedwithdebtasmuchasUS$230Trillion.Withglobal
GDPofUS$70Trillion,itisequivalenttoaDebttoGDPratioof329%!

The3majoreconomies,theUnitedStates,JapanandChina,have
Debt-to-GDPratioof356%in2015,517%in2014and346%in2015
respectively.

Assetpriceshavebeeninflatedduetouncheckedcreditgrowthandnow
allofthesearecominghometoroost.NoamountofQuantitativeEasing
(QE)andNegativeInterestRatePolicy(NIRP)canpulltheworldback
fromthebrinkofthenextpotentialfinancialcalamity.

Thenextglobalfinancialcrisiswillbeadebtcrisis,coveringboth
sovereignandcorporate.

2. Derivatives

GlobalfinancialderivativesareestimatedtobeintheregionofUS$700
TrilliontoUS$1.5Quadrillion.HowmuchisUS$1.5Quadrillion?Itis

2016 Bursaking.com.my

1,500,000,000,000,000!Youcangiveeachofthe7Billionpeopleon
planetearthUS$215,000.

Ifadebtcrisisoccurs,theunravellingofthefinancialderivativeswillbe
fastandfurious(nopunintended).Itcouldmakethe2008crisislooks
likeachildsplay.

3. Baltic Index

TheBalticIndexisthebestindicatorofglobaltrade.Ithasplungedmore
than97%fromitspeakin2009.Itisnowbelow300pointswhichisthe
lowestinitsrecordedhistory.

Recently,Maersk,oneoftheworldslargestdrybulkandcontainer
shippingcompany,announcedawhopping84%dropinprofitsin2015
from2014.Asitstands,globaltradelookssettogetworse.

Baltic Dry Bulk Index

Source:Bloomberg

TheBalticIndexisameasurementoftheshippingratesforraw
materials.ThefallintheBalticIndexindicateslowdemandforraw
materials,hence,thelowpricesincommodities.Thisistheresultof
majorcontractioninmanufacturingactivities.

2016 Bursaking.com.my

4. PurchasingManagersIndex(PMI)

PMImeasuresthelevelofactivitiesinthemanufacturingsector.A
readingabove50indicatesanexpansioninmanufacturing.Meanwhile,
areadingbelow50signifiesacontractioninmanufacturing.

PMI Data of the United States

Source:tradingeconomics.com,ISM

PMI Data of China

2016 Bursaking.com.my

Source:tradingeconomics.com,ISM

TheUnitedStatesandChinaarethetwolargesteconomiesoftheworld.
Thecontractioninmanufacturingactivitiesinbothcountriesisworrisome
asitcanresultinaglobalrecession.

5. Gross Domestic Product (GDP)

US GDP Growth Rate

Source:tradingeconomics.com,BEA

USGDPGrowthRatehasbeenlowerthanitsaverageof3%4%
achievedduringthebullcycleinthe1990s.Thisisdespiteaseriesof3
quantitativeeasing(QE)unleashedbytheUSFederalReserve.As
shownabove,USGDPGrowthRateseemstobestalling.

Thiswilltranslateintolowerjobsgrowthanddisposableincome,which
inturn,affectsconsumerconsumption.Consumerconsumptiondrives
70%oftheUSeconomy.

Walmart,Macysandotherretailershaveannouncedtheshuttingof
severalhundredstoresnationwide.TheUnitedStatesisexperiencing

2016 Bursaking.com.my

unprecedentedjoblossesduetoweakeninginthemanufacturing,
miningandoil&gassectors.

China GDP Growth Rate

Source:tradingeconomics.com,BEA

ChinasGDPGrowthRatehasfallenfromthehighsof10%inthe2000s
to7%in2015.Economistshaveexpectedthefurthersofteningin
ChinasgrowthinGDP.

FromtherecentFifthPlenummeeting,ChinahasreviseddownitsGDP
GrowthRateto6.5%annuallyoverthenextfewyears.Chinaisshifting
frombeingamanufacturingdriveneconomytoaconsumptionbased
economy.

Chinahasatremendousdebtproblemespeciallyamongitsstateowned
enterprises.Manyareillpreparedtowithstandtheshockwavethatis
approaching.Severaloftheseenterpriseshavefailedtomakeinterest
paymentsontheirbonds.Manymoreareexpectedtobebankruptin
monthstocome.

Attheendof2014,ChinascorporatedebtstoodatUS$16Trillion.This
couldpushbanksintoacrisismode.Itisnotsurprisingthatupto10
majorhedgefundsareleveringtobetagainsttheRenminbi.

2016 Bursaking.com.my

Ihavesharedwithyoumajorindicatorswhichpointtowardsamajordebt
crisis.Itisquiteunliketheworldhaseverseenbefore.Globalstock
marketscouldcollapse.Countriescouldgobankrupt.

Howcouldyoutradeinaspiraloffallingsharesand
commodityprices?

TheansweristoshorttheUSindicesandpurchasegoldrelatedETFs
(ExchangeTradedFunds).

Goldisoftenmistakenasacommodity.Itneverwas.Goldshistoryover
thelast4,000yearscanattesttothat.Itisratherapreciousmetalwith
valuestored.Throughouthistory,goldsoarsindemandwheneveradebt
crisishappens.Itisnodifferenttoday.Therefore,Iseegoldasanideal
hedgeagainstapotentialdebtcrisis.

HowdoyouinvestinETFs?

First,youneedtoopenaforeigntradingaccount.

Malaysiahasseveralbanksthatofferforeigntradingaccountservices.
Theyareasfollow:

2016 Bursaking.com.my

InvestinginaRM10,000Portfolio

RM10,000foraportfolioofforeignsecuritiesmayseeminsufficient.But,
itisjusttherightamounttogetstarted.Here,Iwouldplacetheminto2
ETFs.Theyare:

iShares Gold Trust (IAU)

IAUoffersinvestorsanavenuetoparticipateinthegoldbullionmarket
withouttakingphysicaldeliveryofgold.Itallowsustobuyandsellgold
similartotradingsecurities.

Ifyouareanintradaytrader,youcanprofitfromthedaytoday
movementingoldprices.

Personally,Ibelieveitisahedgeagainstthedeclineinmajorstock
marketindicesandthus,protectingmyportfolio.Ipreferitbecauseitis
convenientanditisacosteffectivewaytotakepartingoldwithout
owningitphysically.

IAU (10-Year Chart)

2016 Bursaking.com.my

Source:Morningstar

Duringthepreviousfinancialcrisis,theIAUreachedapeakofUS$
18.12.AsIwrite,thecurrentpriceisUS$12.03.Itis34%belowitspeak.
UsingtheexchangerateofRM4.10perUS$1,itisequivalenttoRM
49.32ashare.

OftheRM10,000,Iwouldallocate70%ofitintoIAU:

140 shares x RM 49.32 a share = RM 6,904.80

Proshares Short Russell 2000 (RWM)

RWMisanETFthatseeksareturnof1xthereturnoftheRussell2000
Index.Hence,itisanETFthattracksinverselytotheRussell2000.The
Russell2000Indexconsistsof2,000componentstockswhichservesas
abenchmarkforsmallcapstocksintheUnitedStates.

Russell 2000 Index

2016 Bursaking.com.my

Thetop5sectorsoftheRussell2000are:

a. Financials

b. Information Technology
c. Healthcare
d. Industrials
e. Consumer Discretionary

Thetotalweightageofthese5sectorsis85.57%.Poorsentiment
towardstheUnitedStatesandtheglobaleconomywouldimpactthe
performanceoftheRussell2000.Thiswould,inturn,benefittheRWM.

RWM 10-Year Chart

2016 Bursaking.com.my

Source:Morningstar

Duringthepreviousfinancialcrisis,theRWMhasreachedapeakof
US$458.86.ThecurrentpriceisUS$73.10.Itis84%downfromits
peak.Personally,IwouldchoosetheRWMasanotherhedgeagainst
theimpendingglobaldebtcrisis.

The IAU tracks the price of gold.

The RWM tracks inversely to the Russell 2000.

TheRWMcarrieshigherdegreeofrisk.Thisisbecause,any
developmentwhichcausestheRussell2000torisewillimpacttheprice
oftheRWM.

Afterunderstandingtheriskinvolved,IwouldallocatetheremainingRM
3,000intobuyingtheRWM.AtUS$73.10,thepriceofRWMisRM
299.71ashare.Hence,

2016 Bursaking.com.my

10 shares x RM 299.71 = RM 2,997.10

Hence,ifIhaveRM10,000toinvest,Iwould:

No.

Investments

Shares

Costs

IAU

140

6,904.80

RWM

10

2,997.10

Total

9,901.90

About the Author

PCWongearnedhisdegreeattheNationalUniversityofSingaporeand
whatfollowednextwasaseriesofstintsinseveralmultinationaland
publiclistedcompanies.PCWonghasbeeninvestingactivelyinforeign
marketsforthepast5years.

Presently,hehasauthored2POPULARBestSellingBooks,'Investin
ForeignShares'and'InvestinREITs'andconductshisregularwebinar
trainingsessionswithKCLau.com,theleadingpersonalfinanceblogin
Malaysia.Formoreinformation,pleasevisit
www.investforeignshare.com.

Lately,hehaswrittenadigitaleBook,YourPersonalGuidetoForeign
SharesInvestment.ItisavailableattheDigitalBookstoreof
Bursaking.com.my
.

2016 Bursaking.com.my

2016 Bursaking.com.my

IfIhaveRM10,000toInvest
WrittenbyMichaelLaw

MyInvestingRules

1. Idonottradeonmargin.

2. IbuyfundamentallygoodcompaniesthatIamfamiliarwith.

3. Ibuystocksthatdemonstratedconsistentearningsoverthe
longterm(5years).

4. Myminimumreturnoninvestment(ROI)is6%perannum.This
canbeachievedeitherbydividendyields,capitalgainsora
combinationofthe2gains.

5. Stocksareundervaluedbyagoodmargin.

6. UsuallyP/ERatio<15.

Simpleenough?

Here,IwouldsharehowImade280%incapitalgrowthbyapplyingthe
investingrulesmentionedabove.

Case Study:
Boilermech Holdings Bhd

In2012,IfirstgottoknowBoilermechHoldingsBhd(Boilermech)by
readingtheEdge.Itwasnewlylistedin2011.Afterspendingsometime
onfactfinding,Idiscovered:

2016 Bursaking.com.my

#1:AboutBoilermech

Boilermechdesigns,manufacturesandrepairsbiomassboilers
predominantlytocustomerswhoareinthepalmoilmillingindustry.
Thesebiomassboilersareusedtogeneratesteamforthepurposeof
powergeneration,sterilisation,heatinganddrying.

#2:WhoaretheShareholders?

QLGreenResourcesSdnBhdisthesinglelargestshareholderof
Boilermechwith35.03%.Meanwhile,QLGreenResourcesSdnBhdisa
whollyownedsubsidiaryofQLResourcesBhd.

Therefore,Dr.ChiaSongKunemergesasthelargestshareholderof
Boilermech.Dr.ChiaisappointedastheChairmanofBoilermech.His
son,ChiaLikKhaiisappointedasanExecutiveDirectorofBoilermech.

Thiscaughtmyattention.

Dr.ChiaistheManagingDirectorofQLResourcesBhd,a
welldiversifiedleadingagriculturebasedcompanybasedinMalaysia.
QLResourcesBhdhasagreattrackrecordofbuildingwealthforits
existingshareholders.

Figures in RM Million
Year

2007

2008

2009

2010

2011

Profits

63.2

80.8

89.3

106.9

124.6

Market
Cap

616

818

806

1,350

2,458

Source:AnnualReportsofQLResourcesBhd

2016 Bursaking.com.my

#3:TheFinancialsofBoilermech

Fromitsannualreport2011,Idiscovered:

Figures in RM Million
Year

2008

2009

2010

2011

Revenues

43.0

60.0

98.8

120.1

Profit
AfterTax

2.9

4.2

12.3

13.9

#4:FutureProspectsofBoilermech

Bydiggingfurtherintobothitsannualreport2011anditsIPOdocument,
Ifound:

1. AsatApril30,2011,theoutstandingorderbookrecognizableas
revenuesforBoilermechstoodatRM209Million.

2. BoilermechhasraisedRM11.5MillionfromitsIPOonMay5,
2011.Fromwhich,RM4.0Millionisallocatedforbusiness
expansionactivities.

3. Asat2011,Boilermechhasatotalcoveredareaof4,756square
meters.Itisabletodeliverupto5boilerspermonth.

4. TheexpansioneffortswouldincreaseBoilermechsproduction
floorareaby2,378squaremeters.Itisexpectedtoenablethe
companytodeliveranadditional3boilerspermonth.Thiswould
allowBoilermechtoexpanditsmarketpresencetoboth
MalaysianandIndonesianmarkets.

2016 Bursaking.com.my

#5:ThePriceIPayforBoilermech

Inmid2012,BoilermechssharesaretradingatRM0.71ashare.The
companysEarningsperShare(EPS)in2011wasRM0.0621.Hence,
BoilermechsP/ERatiowas:

P/E Ratio:
= RM 0.71 / RM 0.0621
= 11.43
= Below 15

Therefore,IdecidedtoinvestinBoilermech.

#6:WhatHappenedNext?

Icontinuedtomonitor2things,profitsandshareprices.

FiguresinRM
Year

2012

2013

2014

Profits(Million)

19.3

23.7

31.0

EPS

0.075

0.092

0.120

SharePrice

0.76

1.00

2.95

P/ERatio

9.87

10.87

24.58

IfoundthatBoilermechhascontinuedtogrowitsprofits.Thisispositive.
Duringtheperiod,itssharepricehasclimbedrapidly.

2016 Bursaking.com.my

ThegrowthinBoilermechssharepricehasoutpacedthegrowthin
Boilermechsearnings.Asaresult,P/ERatiohasincreasedfrom11.43
(below15)to24.58(above15)in2014.

Hence,IbegantoselloffsharesofBoilermechataroundRM2.70a
share.Asaresult,inmid2014,IhaverealisedRM2.00incapitalgrowth
fromeverysharepurchasedinmid2012.Thisworksouttobea
whopping280%in2years.Thisexcludesdividendyieldsreceivedinthe
2yearperiodforowningsharesofBoilermech.

About the Author

MichaelLawwasintobusinessjournalismandinthestockmarket
industry.Throughhiscareer,hehasinterviewedmanycorporate
personalitiesandadvisedmanyclientsonstockinvestmentsover15
years.HeholdsaBachelorofScienceDegreeincivilengineeringandis
aMBAGraduate,majoringinFinance&Economics.

HeisalsotheauthorofaPOPULARFinanceBestseller,Simple
StrategiestoProfitableInvestmentsinStocks.Youmayclick
here
toget
acopyofhisbestsellingbookatdiscountedprices.

2016 Bursaking.com.my

Conclusion:
YourInvestmentToolbox
ToJumpstartYourInvestmentSuccess

Congratulations!

Youvemadeittotheendofthisbook.

However,wedonotwanttoleaveyouhanging.Thisiswhywewouldbe
leavingyouwithanarsenaloftoolswhicharecapabletojumpstartyour
successinstockinvesting.Theyinclude:

Blogs:

KCLau.com

Valueinvestingstock.com

KLSETalk

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Newsletters:

KCLau.com

Bursaking.com.my

Justfillinyourname&emailaddressatthedesignatedboxes.Youwill
receiveregulareducationalupdatesfromthe2websitesabove.

2016 Bursaking.com.my

Videos

KCLau.com

Bursaking.com.my

DigitalBooks:

5StepstoBuildWealthInvestingintheStockMarket
(Author:IanTai)

REITHowOrdinaryInvestorsBuildExtraordinaryWealthinMultiBillion
DollarCommercialPropertiesWorldwide
(Author:IanTai)

YourPersonalGuidetoForeignSharesInvestment
(Author:PCWong)

2012:
(Author:AuntyYY)

2014:magic
(Author:AuntyYY)

PhysicalBooks:

SimpleStrategiestoProfitableSharesInvestment
(Author:MichaelLaw)

InfiniteWealth
(Author:JonathanLai)

2016 Bursaking.com.my

(Author:AuntyYY)

OnlineInvestmentCourses:

Bursamethod.com
(Facilitators:PeterLim&KCLau)

Investforeignshare.com
(Facilitators:PCWong&KCLau)

Investbursa.com
(Facilitator:JonathanLai)

DataCompilation&InstantStockFilter:

Bursaking.com.my

ForallreadersofthiseBook,youwillbeentitledtodiscountofRM50a
yearfortheYearlyMembershipofBursaking.com.my.Thediscountis
applicablefornewsubscribers.

TogettheRM50discount,pleasedropusanemailat
hello@bursaking.com.my
andattachedthiseBookwithintheemail.

2016 Bursaking.com.my