Both stocks appeared to be good value to us.  But since market may not be stable yet, we added gradually and believe that more funds will enter into both counters in time.

With the year on year and month on month data, also the overal export market to other countries.  We should be protected not to slip into recession easily.  Today data re-inforced us that ASEAN will do well for this round.  Even if it is an overall recession again, it should be impacted not as bad as Euro zone and US.  Internal demand also show growth and this is important to me.

Another 1-2 months data will clear the air.  Since the major market correction started in August.  So we will see further but it is a good sign.  We rewarded this result with some mild buying activities.

We have bought additional Bingo (HK), Hap Seng (KL due to its good result), Tomei (good results plus high gold reserve value) and added Sunreit with its booming retail shopping portfolio.

Tomei will be our third selection to increase as our top portfolio from now.

With after listing 2nd quarter annoucement, Oldtown is trading at a PE below 5 times.  Interim dividend annouced is single tier 2.5 cents.  That work out to be 2.1% of price trading at 1.170.  We enjoy their result and this stock is highly undervalued.  2 more quarters result with the same income will increase Oldtown trading value above RM 1.50 easily.  We will reward and support this Co. if there continuous to do good.

Looking at the current economy situation and years ahead, we will stay defensive as we believe it has entered into a period of “No show”.  Means, there will be a period of boring trading sessions across the world facing slow down and rebound.  Thus, stay defensive and buy dividend yield stocks.  The realy dividend era will emerge.

How many times, we heard of people no money to invest, or in a situation that you have pricy assets but cannot offload to buy other cheap assets due to time to time financial crisis.  E.g.  During the 2009 properties crisis, 1997 ASEAN currency crisis.  You have properties in your portfolio but you cannot offload it with a right price and at the right time to buy rock bottom stocks.  The clue is – Cash Flow.  It is important in business thus of course also in investment strategy.

How do you have a cycle of investment?  Do you need 1 Millions or at least 100K to do so?  In fact you do not.  You can start as low as 10,000 and slipt your investment cycle into propotion.  E.g.  30% Income (Cash Flow) portfolio, 30% Growth with dividend equities (Cash Flow), 20% Hedge (Other markets), 10% Highly speculative undervalue equities and finally 10% (Gold) contigency.  Of course the proportion is customizable to one risk appetite and tolerance level.

With a cash flow cycle model, you try to pass through good market and bad market but with continuous return of cash from dividend and income.  You will have good chance to buy low sell high more than anyone.  During the market bullish time, sell your speculative stocks and turn to increase your income portfolio.  During the market down time, using your income from cash flow portfolio to consistently buy into the market.  If it is a rock bottom that need to trigger your contigency, change it to highly beaten down defensive bluechips.  When market recover, turn again your portfolio into propotion. In this cycle, you may not reach super high return but it is the safe cycle for you to continue out perform for your own portfolio.

There are many good income (cash flow) choices in the market ranging from Unit Trust fund that can provide a 5-10% return.  It can be also a REITs in which from Malaysia to Singapore and Hong Kong.  There are more then dozen of choices providing you a 6-10% returns depending on risk and their portfolio.  Easiest way is to split into a 10 investment of REITs to split across your risk.  This will be always your cash flow income source.

For Dividend and growth stocks portfolio, it is not easy to find persistant dividend returns after tax more then 5% but with ROE (return of equities) sometimes more then 20% and dividend around 2-3% are plenties.  Buy into dividend stocks during moderate market sentiment or i should say during a flat to higher or lower sentiment.  This will further provide you a good oppotunity to increase your cash flow but never miss an oppotunity during market run up or the company across years perform better and increase dividend pay out with good chance of capital gain.

We cannot forget that, the best way to give you a good return of capital is to buy undervalue stocks, recovery stocks or sometimes good stocks that temporally in trouble but still financial sound.  In this case, we still need to bet on these counters to increase average return during a good market.  But that depends on your appetite and sometimes a 10% total asset into these stocks may boost your portfolio size by 30-50% in total due to a good pick.  Again, we recommend an average splits across few counters and you only target to hit one or two with 100-200% returns.

“Hedge” is when you need to move part of your investment into not just all into one same economy but different markets.  Thus, if your Asia’s portfolio is down, your Europe’s portfolio may do well.  Or vice versa, if your Singapore’s portfolio doing badly but your Australia’s portfolio may cover back.  “Hedge” is always a form of hedging your portfolio in order to against any drastic event in a particular geographical location.  As of mine many years of investment experience.  The globe has monies but mostly move together in a direction.  Thus, it will help you to protect your fund if something goes wrong.  (Skip this – – If your fund size is not justify or you may have limited knowledge for investing abroad)

Finally, contingency investment in Gold, currency or commodities that always do well during worldwide crisis.  Thus, it is always good bullets for you to act last if there is really something painful in the market.  Your contingency again will bring you handsome returns when recover.

We will discuss this further given more opportunity but the main point is – Cash Flow investment with balance into growth with contigency plan.

As we have always believed CIMB is a bit over price, recent selling pull it back to a good valuation.  A further down will trigger our bargain hunting again.  We evaluating UOA Development and CIMB.  Both are good valuation as of recent drop.

1. Company Business (Does it got a brand? Are they competitive? Their industrial outlook)

2. 1-3 Years Earnings per Share (EPS) / PE Ratio (Preferable below 10, if higher, you need to justify to yourself)

3. Governance / Management (You may likely not to know, but put atleast surface analaysis whether do they have a system)

4. Dividend Yield (It is preferred to beat current interest rate to ensure that you will continue improve investment cash flow)

5. NTAV (Understand its current asset values)

Looks like still good value in the market, we decided to mild bargain hunt these stocks.

At KLCI 1460 – 1480, HSI below 20,000 and STi below 2,800 triggered our bargain hunting. We will buy again as Dow Jones dropped more then 170 pts again. We will buy unles KLCI drop below 1440 and we will wait for a far lower entrance.