Spurs swept Grizzlies back home by 4 - 0

My favourite NBA team, Spurs had swept Grizzlies back home by 4 - 0!

Like this picture :)

Path to the CFA (Part 5)

I passed CFA Level II in August 2009. Right after that, I spent 3-month time on travelling in overseas to Singapore, Bangkok and China. I came back to KL in November when the class for CFA Level III commenced. This time the number of classmates reduced by another half of the size (about 16 classmates) from the class of Level II as the passing rate for CFA Level II was less than 50%.

As usual, since I was a full time student, I read the curriculum materials 8 hours per day before going for classes. Normally I would reach the class 30 minutes to 1 hour earlier, so I could meet my study group for discussions. The study group was formed by 4 classmates including me. We shared our study experience and raised certain topics that we found difficult to comprehend for group discussion. When it was 1 month before the exam at June 2010, despite the class was over, I still met my study group once a week for group studied at 1 of the unoccupied classroom in Kasturi college. Finally, our effort paid off as all members of my studied group passed the Level III exam! Whereby the passing rate for the whole class in Kasturi college as well as the whole world was only 50%.

In my opinion, the standard of Level III was not as tough as Level II, probably because there were more theory topics than computing topics in Level III. In addition, I found few topics in Level III such as behavioural finance, financial planning and methods of computing investment return (Global Investment Performance Standards) were very to read and understand. Indeed, I further read more books and journals related to those topics that I aforementioned and these have improved my investment assessment skill greatly.

The time to look to for job after completing the full-time study of CFA was so right on track that the world economy was recovering from the finacial crisis since 2008. I took a month of break and travelled to New Zealnd for few weeks after I got the result of Level III and only back in mid-September 2010 for interviews in few Investment Banks which were referred by my friends from the study group. With the reference from my friends, I had gone through few smooth interviews and had few offers on my hand. At the end, I decided to take the offer from a smaller bank, as I hope that a small size bank would not have much stress working environment than the bank. I commenced to work again on in October 2010, and I would still need to accumulate another 2 more years to qualify for the application of the CFA Charter title.

Suria Capital Berhad's Intrinsic Value?

Recently I had done a simple calculation on the intrinsic value of Suria Capital, which is estimated to be RM2.47 per share, and would like to share some of my working here. The excel modelling is simple and may not be accurate, so read this at your own risk. :p

Suria Capital Berhad

Forward: A huge RM43bil problem over non-bank lending

http://www.malaysiakini.com/news/231359

A huge RM43bil problem over non-bank lending

Jose Barrock, KiniBiz 11:28AM May 28, 2013

A major problem is brewing in the financial services sector - specifically through the lending of development financial institutions (DFIs), non-banking financial institutions (NBFIs) and credit cooperatives. 

This is in the form of a near two-thirds increase in personal financing last year by these non-bank institutions to RM43 billion last year.

Judging by Bank Negara Malaysia’s Financial Stability and Systems Report 2012, there are clearly issues which are getting out of hand, if unchecked.

“It’s all in the Financial Stability Report 2012. It is quite shocking... read it, it’s a good thing that after the Financial Services Act (2013) comes into force all these will come under the purview of Bank Negara... things have gotten out of hand,” an official from one of the larger banks told KiniBiz.

He added that while Bank Kerjasama Rakyat (Bank Rakyat) had already received a memo or note from the Central Bank, the rest were also in the crosshairs and unlikely to get off the hook easily, once the Financial Services Act 2013 kicks in.

Other than Bank Rakyat, some of the DFIs operating locally include Bank Simpanan Nasional Bhd, Bank Pembangunan Malaysia Bhd and Export Import Bank of Malaysia Bhd, to name a few.

Whereas NBFIs include Malaysia Building Society Bhd (MBSB), which is controlled by the Employees Provident Fund, RCE Capital Bhd controlled by businessperson Azman Hashim of Arab Malaysian group or now Am fame, and other non-banking credit providers such as Courts Mammoth Bhd, and Aeon Credit Services (M) Bhd, among others.

Meanwhile, the credit cooperatives have an umbrella body, the National Cooperative Organisation of Malaysia or Angkatan Koperasi Kebangsaan Malaysia (Angkasa). 

Angkasa is the sole body which has an interface with the Accountant-General’s Office that facilitates salary deductions for government employees.

MBSB especially, is currently being closely watched by Bank Negara, the banking official said.

MBSB is defined as a Scheduled Institution under the Banking and Financial Institution Act 1989 (Bafia) - and as an exempt finance company - thus allowing it to undertake financing activities in the absence of a banking license.

Bank Negara, it seems, is trying to end this special provision of MBSB.

RCE Capital Berhad在最新业绩报告(2013 Q4)出人意表地陷入亏损

RCE Capital Berhad ("RCECAP")向公务员的薪水里自动扣除部分来还贷的生意模式都面对坏账的问题，虽说是因为采取了更严格的MFRS而导致坏账的增加，但这也显示出本地金融业将开始步入金融泡沫破裂的前奏。

国家中央银行("BNM")应该是为了避免人民过度借贷和不想重蹈覆辙类似美国的次级房贷债务风暴，已经开始采取贷款紧缩政策。非银行金融机构如MBSB和RCECAP已经被BNM盯上了，我看BNM会设下更严厉的借贷条件来防止过度借贷，可能会逐步的对银行金融机构设立严厉的借贷条件，所以那些过度借贷个人贷款或房贷的朋友可要小心了。

最后就是美国经济和中国经济将逐步好转，而且美联储已经放话要退出量宽政策，长期来看美元将会加强进而利息会逐渐的提高，即时那些过度借贷的人可能会面临偿还高利息的难题。

看来BNM的紧缩贷款政策和长期利息高升的趋势下，马来西亚经济和楼市的荣景将会到了一个尽头。

因为以前的Nestle，所以今天的Oldtown

几年前当我在为Nestle做估值研究时，发现到Nestle当时的内在价值跟它的市价RM20++相差无几而且其本益比已经将近30倍，所以我决定不买进。现在Nestle的市价已经是RM60++而本益比还是接近20多30倍，那Nestle现在还是那么贵？那多几年后Nestle的市价升到RM120我还是因为它起了那么多本益比那么高所以不买进？

后来我在近期才领悟到巴菲特如何从以往只买烟屁股的股票进化到买进强劲品牌的公司，如何凭着投资人和生意人的直觉找出拥有护城河的品牌公司跟普通公司之间的差别。品牌公司的股价会因为业务有增长并逐步步入成熟期而提高其派息率而会起得更高，那我现在因为本益比高了所以卖了品牌公司的股票焉不是个错误的决定？品牌公司能以数值化的本益比来加以定义么？品牌公司值得多少钱？多少倍的本益比才是高？20倍？30倍？我只想强调投资是门艺术，有时需要靠直觉，而光靠数字思考，将会让我错失更多的机会。

同样的道理也能适用在Oldtown。现在Oldtown的本益比是22倍，它有没有可能再升高呢？如果Oldtown的税后盈利接下几年都能增长15%至20%，如果它的本益比就好比Nestle那般即使股价长年不变的企稳在20倍以上，那意味着Oldtown的股价将会根据其盈利而在4至5年开个翻达RM5.20。我就在此做个记录看4至5年后Oldtown的股价会如我所料的升高至RM5.20。

Mr. Fong Siling's speech in a forum (held on 16 March 2013)

Yesterday (16 March 2013) I attended an investment forum held by Nanyang and Hong Leong Bank. The speaker of the forum was Fong Siling, who is a famous and successful Malaysian share investor. The forum was held at the Nanyang's office at Kelana Jaya and it commenced at 2.15pm. There were approximately 1,500 to 2,000 audience present at the forum.

Long story short, I was disappointed with the forum, I would only rate the forum 5.5 out of 10. The 1st reason of my disappointment was that despite Mr. Fong is very knowledgeable and willing share his opinion experience to everyone, but he is not a good speaker. Probably due to time constraint and Fong had a lot of things to tell and share, so he did not simplify and convey most of his message in layman term and this could be quite difficult for those investment amateur to understand what he was trying to convey.

However, there were few worth noting points shared by Fong. Fong has been invested in the market for 40 years. He was very humble to tell the audience that he is not a smart investor, but through his hardwork in reading annual reports, doing investment research and never distract from his long term value investing framework, eventually he ripe a great achievement from his investment. He had been emphasising in order to be successful in shares investment, ones must not have the attitude that assuming investment in shares is akin 'playing stocks' nor short term speculating. It is all about knowing the business and investing part of the shareholding of the business, understand the valuation of the business and invest at the right time with cheap cost. His five yardsticks on selecting stocks are shown below:

1. Return on Equity ("ROE")

2. Cash Flow ("CF") and Free Cash Flow ("FCF")

3. Price-to-Earnings Ratio ("PER")

4. Dividend Yield ("DY")

5. Price-to-Net Tangible Asset ("P/B")

The second problem was that the organiser, Nanyang did a very poor arrangement in avenue and MC, as the avenue were overrun by excessive crowd and was very stuffy, and THE MC did not conduct properly for the protocols of the forum.

Last but not least, the quality of the Q&A session was very poor. I strongly believe that when we are investing, we should emphasise more on the process of investment instead of the outcome of investment.With the right investment strategy and framework and execute this strategy and framework disciplinarily (which is the process), and the desire outcome will come along the way of the process. But I observed that most of the Q&A raised by audience were too outcome oriented instead of seeking advice from Fong on how to improve their investing skill in accordance to their risk return profile and investment time horizon.

This proves the quote from Warren Buffet is right that "...Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace， and those who read their Graham & Dodd will continue to prosper...". So I regret that investing community in Malaysia is not as educated and matured as other developed countries, and to be thankful of the existence of this group investors so I could continue to grow my fortune via value investing.