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Investment Plans forming in August 2011

Century Logistics announced their Q2 2011 results. Operating Profit has increased and that's comforting. Not sure why, perhaps the exchange rate or their cost control is getting better. The wonderful news is that an interim dividend is announced of 5cts per share.

As for EA Holdings, to my horror there's no liquidity at all for this counter too. My strategy is to hold it until the end of the month and till the quarterly results were announced. It should ride up if another huge revenue/profit comes in. I may or may not cash out to swap for Century Logistics.

Let's wait and see.

Gold has left me flabbergasted. All the research reports are not predicting well. The volatility remains high and is between $1750 - $1780 today. And the margins I have to loss is about 4%, whereas for Shares the total cost of transaction is about 1.5% + RM24. Unless Gold makes another strong leg up from the purchase price, it's not that easy to get another 10+% return.

Next target - EAH

I'm going to aim to stock up on EA Holdings into my portfolio. One would cringe if we see the charts of this counter. It sparkle during it's IPO but now seem to have taken a severe beating. One wonders why? Doubts creeps in whether it's too good to be true.

However upon more detailed analysis, the stock basically double it's base and it's CEO owns 62.5% of it valued at RM30 million. And the fact that when the stock is taking a beating, strangely enough the CEO parted with his money of about RM226,000 for mini acquiring of the stock. Was it to boost confidence? That paltry addition won't help since he's owning more than half the company anyway, he'll go down with the company if it indeed bust.

Q1 2011, Revenue RM11 million, Net Profit RM1.7 million, EPS 1.11cents
FYE 2010 Revenue RM20 million, Net Profit RM4 million, EPS 3.31 cents

Based on strong results, I see it as a bargain. I'm game for this counter.

First Foray

Today was my first foray into the market after I've obtained my CDS account and linked it with my Savings Account.

My first purchase was Public Bank, a very safe dividend yielding stock. Last year's dividend payout was RM600 per share. So at today's price, it's about 4.6% yield.

I looked at Hap Seng Plant to get some so as to profit when their new Q results were announced. But then I saw the humongous selling queue and I backed off.

Century Logistics again has liquidity so dried up that it shot up to RM1.66 with minimal volume. Q1 2011 result wasn't that great, with just RM6.2 million (20% of FYE2010) and EPS of 8.18 cents. Revenue was flat as with last year. Why do they need over RM30million in cash? And what's the use of having almost 5% as treasury shares? The directors controls almost half of this company and the PE ratio of just over 4 is the reason why this counter is still tempting despite the extreme low liquidity and low dividend payout policy.

The best way is to buy into a company that grows for years and this seems to fit into that criteria.

As far as my financial tracking began from Year 2004 - 2011, my total transacted investment income is RM 42455.

I last updated via twitter that those who bought Gold at USD$1780 and above were roasted. This 2 days it's hovering around 1740 and has tested the lows of $1730 twice. Now the buyers at $1750 are gone as well. I still hold to the view that Gold will weaken to below $1680.

Recently the idea of EuroBonds are gaining strength with Germany reluctantly to agree to it, but now do not oppose to such idea. George Soros said that the weak ones should leave Euro, namely Greece who was bailed out with 200 billion Euros and Portugal. Maybe this EuroBond is going to save Spain and Italy.

Swiss Franc has weaken and so shall Yen, USD, Euros, and these liquidity must go somewhere. Emerging market equities or Gold ? Will the rating agencies downgrade another big country for another hammering time? Mind boggling times are here.

Investment Strategy

Blogging this to make a mark on my thoughts and the formation of investment strategy that's in my head.

Matthias Chang is forever the perma-bear, predicting gloom&doom to some somewhat correct predictions but wrong in timing and Dali is almost always long on the market making persuasive analysis on the market overall. I have learnt a lot from both but they are not perfect.

After the Greece debacle which require a second tranche of 110 euro to bailout again. This was soon followed by Spain and Italy where their bonds hold more than 6% of interests. USA did not solve their debt limit problem until the last hour and raised it by a high 2.5 trillion with no view of increased taxes. Then S&P downgraded USA's credit rating to AA+. The market absolutely could not take it anymore and tanked.

In Malaysia, the effects were less and only about 100 points were lost, but a rebound has pushed up 50 points back now. It's hovering at around 1500 now. Meanwhile, Gold exploded to the upside from $1650 to $1810 and then sliding towards $1740. I made a huge exit from Gold at $1750 and somewhat regretted it. I could have made a bigger killing.

It's mid August now and I think Gold will move down below $1700 where I should then be making an entry again. I'm also itching to enter Equities again and Mr. Koon Yew Yin has recommended Plantation sector which the basis of growth in potential earnings concept really intrigued me. I'm planning to enter Hap Seng Plantations as soon as my CDS account is ready. As always, I'm wondering what I should do with Century Logistics. It's a very cheap stock of PE ratio of around 4x and a higher NTA than it's current stock price. But this counter is not moving. Growth in earnings can be seen. Or could it be that their policy of 20-25% dividend payout of net profit is too low? I wonder what do they use their 70% profit for? More expansion?

In any case, I'm happy to make 10% from my Gold this month and my war chest would be doubled by end of this month. Hope I have learned well and will strategise better moving forward.

I'll be posting an update in the very near future. *Crosses Fingers*