Invest In Penny...Not An Unexpected Correction!

Now that the strong rally in local market post GE XIII comes into a more meaningful correction; many may ponder..."Is this the end to the rally?"

At this juncture, I view the correction as something anticipated and healthy; just when I said "I won't chase into high prices", I still feel comfy holding onto stocks because of the reasonable entry prices of my position.

Some may argue that the return of retailers may pose risk to the market, However I see this as a main catalyst to drive stock prices higher next...expect correction along the way.

Although my profits came off quite a bit from the peak of around RM25,000 in less than 2 weeks, I don't see the need to take profit as yet.

I'm still hopeful of a big rally (perhaps a superbull) to take place this time around...hence, it's a hold for me. Nevertheless, readers have to be aware that the investing in penny can be tricky at times, as in you should not simply buy into any rumour-milled stocks without considering the financial strength of the stocks. Not time yet to simply buy and simply make (profits).

I suspect we are still at early days of a big rally, until some game-changers start to make appearance, it's a buy and hold market. Of course, it's never harmful to take profit on significant upside...something like 50-100% returns in days, otherwise a 20-30% gain (like MBMR-WA and Marco-WA) won't excite me.

Invest In Penny...It's Day 1, and 2/3 In Equity (Updated)

You know I'm capable of doing crazy thing like this; yes, I'm launching my 3rd portfolio today with an investment of RM300,000 and straight away I put about two-third of the fund to work.

I feel I start to get a hang of this market in terms of what it's going to do and where it will be heading, after a long and winding road in 2012.

Unlike previous 2 portfolios, this one is lazy in nature where I don't see the need to do active management...It's going to be a boring buy-and-hold strategy. Of course, not unless there is significant key events that would turn the market around.

Most of them are warrants and none of the mother shares are speculative, except a few having short tenure expiring in 2014. Nonetheless, the premium they command are just reasonable with the exception of IFCA-WA which has high premium but very low price.

Here you go, easy trades this time around...

 

I find in a market like this, I wouldn't chase into high prices; instead, I'd go for stocks which offer good fundamental amid supported prices to safeguard the downside. Still not a full-blown bull market yet...though it has potential to become one. We shall see...

Alpha Chart...Launching The Penny Portfolio Soon?

Likely, very likely that I'd introduce the new portfolio (3rd on Alpha Chart) very soon. Note that there will be some changes to the format to accommodate to my busy schedule now:-
1. Very brief write-up on selected stocks- No detailed analysis.
2. No day end (immediate) update of stock transactions as this can be tedious- I'll only flash up my portfolio overview.
3. No analysis on all individual stock transaction (buy and sell) shown except for super-performers. Nonetheless, all transactions will be posted irregardless of profit/loss.
4. No exact display of equity/cash allocation ratio- Only rough gauge.
5. Less frequent update of news/financial results related to stocks selected unless they are critical.

I may up the investment amount this time and one thing that will remain unchanged is the theme of the portfolio...Invest In Penny (stocks worth less than RM1.00).

Alpha Chart...No Hesitation; Get Ready To Be Aggressive!

Stock performance in the week after election took many by surprise with a huge rally, which looks more than a relief rally.

I am delighted to see this kind of stock price action and to me this is a new phase of bullishness in the local market, not a blip to the upside.

So what happened to the Crash that I was worried about? Did it just evaporate in thin air? Not really! It's a mere delay of the crash phase that will ensue after a run (or bull run) as I also kept repeating that lower liners are cheap, dirt cheap! The next crash will likely arrive only after this bubble grows bigger.

This clarity in the work-in-progress Congruence will help address my biggest dilemma of the market since 2010 where the disparity between the rich (blue chips) and poor (lower liners) diverged further and further. This leads to the doubt of who joins who i.e. will blue chips crash to adjust to low stock price? or will lower liners play catch up to match blue chips prices?

As we now climb past the wall of worry, including US market, the market is ready to party. Barring any shock to the market amid game-changing catalysts, this market is a safe market (although at historical high) for a big returns! In fact, more signs are pointing to a bullish stock market.

If we get it right, a 50% return is small; I hope to realise my wish where the returns can range from 100-300%. Pending further confirmation that this being a bull run, I may introduce a portfolio...

If it turns out the way I envisage, this is a safe market to be aggressive! I'll show you with the new portfolio...

Alpha Chart...After GE XIII; What's Ahead for Market?

Shifting attention back to market from polls, I start to like the market better from investment standpoint.

As I mentioned that the market is likely to present me with a Congruence soon; the market is slowly shaping up for a positive one. This means there are more profit opportunities ahead.

I continue to like the few stocks I shared before election e.g. Affin, Suria, DRB Hicom etc; in fact there are still aplenty of quality stocks that will race ahead in days to come.

Somehow, after a massive 120+ pts gain the next day after election, the market will likely trade sideway or dip a lil' which will provide room for accumulation.

There are money to be made technically speaking, but I will continue to monitor the many risk factors facing investors. Risk on for now...

FBM KLCI...A Heavy Price To Pay Tomorrow; Not Today!

It's a clear disappointment for Malaysians hoping for a fair election to receive the final polls confirmation as released by EC. The ruling party got away from yet another political Tsunami but not unscathed. Economic fundamentals remain shaky while the further loss of confidence by its people and investors would pose a great risk to the country when the next economic crisis hits. Excessive spending in the run-up to the election would rub salt to the wound of a poor fiscal.

Timing, again will throw a temporary lifeline to the market from the next crisis, because the world is still artificially supporting an ailing economy; but, no economic lies can live on forever! There is always a pay-back time. This may not be far ahead.

I remain doubtful of a strong index-linked stocks led market and don't subscribe to the "foolish" belief in leveling us with countries like Hong Kong and Singapore in terms of property prices...We are not even near from the viewpoint of a fair election and a free market.

Unfortunately, the justice to a fair political scene in Malaysia will likely happen only in an economic crisis. In good times, revolution hardly happens; a heavy price to pay tomorrow...!

I just hope there is not excessive political play of racial issue this time with the ploy of divide and control. It should be not about racial issue anymore...56 years after Independence, and with the muhibah composition of supporters in both camps.  

GE XIII...BN Regaining 2/3 Majority

Looking at the turn of events at votes counting, BN will likely win this election with a 2/3 majority that it confidently forecasted upon final official counting later.

The artificial economic strength of Malaysia will continue to move in tandem with other similar economies with the same act; until the next crisis hit. 

We have been living in a controlled world, and we will continue to live on this...It's the same all over the world, unfortunately. A belief I have held very strongly since I started to understand investment market...It's applicable to sports, corporate world, business and politics.

GE XIII...Malaysia, Vote Right!!!

I feel I have the responsible to write about GE XIII, though I refrain myself from taking a stand on non-market related matters.

It's all too important for Malaysia, after a long history of ruling party control since Independence, to decide what's next for the people and the country.

Just...I find should be the core principle of the 2013 voting decision. I hope to see the votes going for a real strong leadership in the eventual ruling party (whoever wins tomorrow), which will steer the country into the right path of balanced growth for years to come. 

Votes should go to the party with following attributes:-

1. Justice
    - A government that does justice to everyone irregardless of race, gender and age. Unfair and unjust political and economical incidents should be minimised.

2. A Calibre Leadership
    - Quality leadership is at the top of any wish list of any successful organisation or country. No country should live with too many controversial leaders in terms of conduct, transparency and self-interest.    

3. Righteousness
    - A country will only prosper when it's managed in a right manner and driven by the right principles.

4. Uncorrupted Administration
    - Corruption happens only at the expense of rakyat. There is no 2-way about this.

5. Responsible spending of rakyat's money
    - Officials who handle country's money like their own should be made to rule. Campaign monies gotta come from somewhere; surely not personal wealth!

No doubt, change will always come with pain; but not changing in mediocrity can be even more painful over the long haul. Malaysians have to weigh and decide between the two. Both can be painful...but would us rather suffer a short term pain or the long term one?

Mind you that the brightness of our "spectacular" economic transformation the last few years were aided primarily from:-
1. The unlocking of property wealth
2. Malaysia was in the right spot (Asean) as funds exited from the West and looked for a new home
3. Massive liquidity created out of thin air globally and they too need a home with a sexy story 
It's really about right place, right time.

We should not vote for short term benefits...because of free something, somewhere. It's a battle of "Money vs Justice". Malaysia, vote right tomorrow!!!