An Unconventional Teacher

morning … i m busying blogging at my trading blog. Hehe. Do visit me at http://cpteh.blogspot.com

One sitting vs two sittings

Currently we are discussing if we should revert back to the one exams sitting for the A-level.

Maths Genius — The Star

KUALA LUMPUR: Anyone can be a mathematics genius by developing his or her own technique to solve mathematical problems, says mathematical genius Shakuntala Devi.

Such a technique could be developed by mere concentration, she said.

However, she said that there was no standard procedure for this, as everyone was unique.

“All they need is the power to concentrate to awaken this gift,” said Shakuntala Devi, 69.

“I do not teach mathematics, only how one should concentrate,” she said in an interview here yesterday, adding that she could turn mathematics haters to lovers.

Shakuntala Devi is currently on a world tour conducting seminars and workshops titled ‘Mathematics through mind dynamics,’ and Malaysia is her first stop.

“The human computer”, as she has been dubbed, will also be travelling to Singapore, China, Japan, Australia and New Zealand as part of the tour.

Shakuntala Devi, who was born in Bangalore, India, to a Brahmin family, has had a love for numbers from the time she was three years old. By five, she was an expert in complex mental arithmetic and was faster than computers.

She founded the Shakuntala Devi Educational Foundation Public Trust in Bangalore.

Her ability, which she described as a gift from God and gives her great satisfaction, has enabled her to make a living since she was three.

Shakuntala Devi, who is not married, is also proficient in Hindu Vedic astrology as it is connected with calculations.

“I write people’s horoscopes based on their date of birth and guide them to better their lives,” she said.

Morning … i m the only teacher in the staffroom … here to check my data in KLSE la.

Well, my bro’s b/day today. Big boy now. Haha

Liverpool is being drawn to play Atletico Madrid, PSV Eindhoven and Marseille. Hmm … have a bad feeling that they could get thru this time around.

Sunday game vs A.Villa … is Barry moving to Anfield or what?

Malaysia Today’s portal being blocked

KUALA LUMPUR: The controversial Malaysia Today news portal was blocked by the Malaysian Communications and Multimedia Commission (SKMM) because its editor ignored many warning letters, Home Minister Datuk Seri Syed Hamid Albar said.

“When they publish things that are libellous, slanderous or defamatory, it is natural for the SKMM to act against these websites whenever necessary,” he told a a press conference at Parliament lobby yesterday.

Syed Hamid said SKMM was only exercising its powers.

“We do not intend to curtail people’s freedom or right to express themselves. Everyone is subjected to the law, even websites and blogs,” he added.

On Wednesday, Malaysia Today editor Raja Petra Kamaruddin lashed out against the blocking of the online portal, saying it was a breach of the Multimedia Super Corridor (MSC) charter.

Under the MSC Malaysia 10-Point Bill of Guarantees, the Government promised to “ensure no Internet censorship”.

It was reported that all 21 Internet Service Providers (ISPs) in the country had been ordered by SKMM to block the controversial website.

The notices were sent out on Tuesday in accordance with Section 263 of the Communications and Multimedia Act.

Datuk Joseph Salang Gandum, the Deputy Minister of Energy, Water and Communications, said he was not aware that SKMM had ordered ISPs to block the website.

“I do not read Malaysia Today. Media practitioners must be sensitive to culture and religion,” he said.

Information Minister Datuk Ahmad Shabery Cheek declined comment as it was not under his jurisdiction.

SKMM chief operating officer Mohamed Sharil Mohamed Tarmizi, who is overseas, declined to elaborate, saying a press conference would be held to explain why such action was taken.

It is understood that this is not the first time SKMM has ordered a website to be blocked.

Malaysia Today remains accessible through its mirror website.

Corruptions in Malaysia

Merdeka for 51 years, Malaysia is still very young, naive and immature. Rakyat are not allowed to say the truth, ACA investigating the JPJ/Puspakom for bribery after 30years or so of KNOWN makan-suap. Yes, we all went thru DRIVING TEST and we know that it is STANDARD procedure that you need to ‘pay’ money if you want to PAS your driving. Hey, dont pretend … for past 30 years, many JPJ officers ‘benefited’ from that. And it is huge amount.

I remember 15 years ago when i wanted to take my driving license and the driving school(MR TAN KEE SAN) said that it is a MUST to pay rm350 if i want to pass the ‘on the road’. WHAT??? And if u want to be SURE to pass, including parking … rm600 was offered for the whole package!! He even has the guts to say that he only take a mere 20% from the amount! Haha. I wish i could punch his face for that … but, i m staying in MALAYSIA, mind u. Oh yeah … now he must be a very rich old man, and has his own WISMA — WISMA TAN KEE SAN at Jalan Ipoh, Batu 3, KL. Can you believe that? Well, i know most of us have our own stories with the driving school or the JPJ officers. From TOP to BOTTOM, it is like a syndicate. Well-organised day-time bribery(or is it robbery?) from the public!

May be they have improved, or may be they have increased their efficiency. The rate? Perhaps it has doubled. YOu are driving for few years, and you might encounter with those policemen. They are ‘forced’ to wear the "SAYA ANTI-RASUAH" badge during a campaign. Haha … but, have not we were asked MONEY from them? Once i said i dont have any cash on me, they will just say … too bad, kita kena saman la, apa boleh buat encik? Then, i told the … i m a cikgu. Oh Cikgu pun kena saman la. I tried to argue that i did NOTHING wrong but u know their motives. Sigh … Wait, we are NOT supposed to tell anyone about it, or else you might be in trouble? That is why they are coming harsh on bloggers for writing their experiences, may it be true or not, as they feel offended.

Malaysia Today writes about politics … so-called sensitive as it involves YAB ..

It exists to serve and not to instruct, it will not tell you whether you are right or not

The rippling effect of the US subprime issue, coupled with the fear of high oil prices and political uncertainties have sent a lot of stocks tumbling to very low levels recently.

At the start of this year, when the market was touching a new high of 1,500 points, some fund managers predicted the market might go even higher.

However, following the recent market crashes, the KL Composite Index fell to about 1,150 points, a drop of 350 points within six months. Now, certain fund managers have started to predict the market dropping below 1,000points in the near future.

Most retailers cannot comprehend how fund managers can change their market forecast by 500 points within a six-month period. The main reason for this is the change in market perception.

Due to the impact of the issues mentioned above and the tumbling stock prices, the fear of weak corporate performance has caused some company owners’ to hold back on expansion programmes. This has resulted in weaker corporate results and panic selling on the stock.

According to George Soros, this phenomenon can be explained by the “reflexive process”, - the feedback loop where a change in stock prices causes a change in company fundamentals, which, in turn, justifies a further drop in stock prices.

He said perceptions change facts; and facts change perceptions. Hence, the drop in stock prices can cause further drop in the company’s stock prices.

According to Phillip Fisher, market prices are determined more by perceptions than facts. Besides, analysts like to place more weight on the short-term performance of a company rather than focus on its long-term prospects.

As a result, when the overall market is coming down, analysts like to lower the target-selling price of a company and increase the target-selling price when the overall market is trending higher.

Risk means uncertainty of outcome. The stock market reacts negatively to risk. Whenever the stock market has a lot of uncertainties, all stocks - regardless of whether they are good or poor fundamental stocks - will be hammered down.

However, we always believe crisis means opportunities. The recent drop in market prices creates magnificent investment opportunities. Even though the market may drop further as there are still a lot of uncertainties and outstanding negative news pending announcement, we believe there is great opportunity for long-term investment.

Warren Buffett believes that the stock market is manic-depressive: it always overreacts to positive as well as negative news. If the overall market sentiment is good, the stock price may surge sky high. However, if the market sentiment is depressive, the stock price may plunge to insanely cheap.

That is why Buffett said: “The market is there to serve you and not to instruct you. It is not telling you whether you are right or wrong. The business results will determine that.”

Hence, the key factor is to purchase the right business at the right.

We believe a lot of investors know which good quality stocks to hold for the long-term. However, they always complain these stocks are too expensive most times. As a result of the recent market crashes, some of these stocks have dropped to quite attractive levels.

Even though they may get even cheaper if the overall market drops further, we need to prepare ourselves by understanding the intrinsic value of the stocks and at what price we will start to accumulate them.

According to Nassim Nicholas Taleb in his book entitled The Black Swan, we should stop trying to predict anything and instead take advantage of uncertainty.

A lot of investors or analysts may spend a lot of time trying to predict the market bottom. We should not try to predict when the market will reach its bottom as we will never know until it happens.

The key thing is to focus on is whether we have already identified which good quality stocks to invest in when the market is getting nearer to the bottom. Instead of trying to catch the stock at the lowest point, we hold the principle that we would be happy if we are able to catch those stocks 20% from the low.

take from THE STAR

GEORGE TOWN: Penang Hokkien may become extinct if no effort is made to preserve and encourage the young to speak the dialect.

This is the observation of author Tan Choon Hoe who has written two books Learn to Speak PHD-Penang Hokkien Dialect and Penang Hokkien Dialect (PHD) for Penangites and Tourists to promote the dialect.

Tan, 47, who teaches English and Hokkien here, described the dialect as the essence of George Town and a part of its heritage. He lamented the fact that Chinese children here spoke very little Hokkien nowadays. “Parents would usually speak to their children in English or Mandarin and the only chance for the kids to learn Hokkien is from their grandparents, if they are still around,” Tan added.

He said it was even more important now to preserve the dialect with George Town’s recent listing as a Unesco World Heritage Site.

“Many people here do not know that our native dialect has become a dying heritage,” Tan told a press conference to promote the sale of the books to raise funds for Penang Adventist Hospital’s needy patients. Penang Adventist Hospital community relation coordinator Chin Hsien Hui said the hospital’s nurses, staff and doctors who were non native speakers took Hokkien lessons from Tan in the hospital to enable them to communicate with patients.

 “Speaking Hokkien to those who cannot speak English, especially the elderly, makes them feel more comfortable,” she said.

The books can be purchased from the hospital, with 30% of the proceeds going to the hospital’s Dr J Earl Gardner Fund. For details, contact Tan at 012-4820038 or the hospital development department at 04-2227603.

My Thoughts

I m one of the many ‘modern’ new parents who is guilty of not speaking my mother tongue with my son, Er. Not many speak Hokkein in Sabah. Perhaps, i should make an effort to speak more Hokkein with my two kids. The only word he know is "boh" means "dont have".

KUALA LUMPUR:

Bursa Malaysia faced connectivity issue in early trade on Thursday after opening slightly lower and suspension was expected to be for the entire morning session.

The KLCI opened down 0.37 point to 1,153.33 on some selling. However, it had not updated the data since then.

In an immediate response, Bursa Malaysia Securities said trading would be suspended for at least the morning trading session from 9am to 12.30pm following a multi hardware failure in its core trading system.

“The derivatives market will continue to trade as normal, however, there will not be any underlying KLCI feed for the FKLI and OKLI trading,” it said. Bursa Securities said all market participants have been duly notified and will be updated periodically of the progress.

 “Bursa Malaysia is investigating the problem and will notify the market of any updates,” it added.

THE STAR

Between the Lines, by C.S. Tan

THE stock market last week had the same theme as the movie “Sum of All Fears” which starred Ben Affleck. The movie centred on terrorism and the fear of an explosive catastrophe. Like the movie, the market was a thriller.

Fears over consumer spending power, interest rates, uncertain corporate profitability and political stability gripped local and foreign investors. That led to a broad sell-off of blue chips as well as lower liners.

The selling, often indiscriminate, caused decimation in the market capitalisation (cap) of listed companies. On the second board, the market cap of 88 companies fell below RM30mil, less than the minimum paid-up capital of RM40mil for companies on this board.

Stamford College Bhd, an old name education group, was modestly profitable, with earnings of RM1.2mil in its latest quarter, yet its market cap had dropped to RM11.2mil.

It’s the same on the Mesdaq market, with 51 companies that held on to a market cap of less than RM10mil each.

Most of the companies with diminished market cap were, of course, those that incurred losses and where a convincing turnaround is not in sight. Furthermore, there are a number of companies categorised under Bursa Malaysia’s Practice Note (PN) 17, some of which may be delisted.

Even so, in the haphazard sell-off, companies that could achieve double-digit earnings growth also suffered double-digit compression in market value. This could be due to too many fears faced by investors over macro factors.

That would eventually lead to good value in some of the stocks if held for a few years. That may sound crazy in these fearful times but Sir John Templeton, who pioneered American international investing, put it this way: “People are always asking me where the outlook is good, but that’s the wrong question. The right question is where is the outlook most miserable?”

It is not that he set out to lose money in markets of misery but he sought to make the most money where share prices were beaten down the most. One of the most successful fund managers, he has a sound track record to prove his thesis.

Air time

The airline industry is seen as being as shaky as the global economy, with frequent media reports that the airline industry will lose billions of dollars this year due to record jet fuel costs.

The general pessimism and negative media reports may indicate it’s time to buy airline stocks.

As Templeton put it, investors should buy at the point of “maximum pessimism.”

Jim Rogers seems to believe that point has been reached in certain airline stocks. He told Bloomberg TV recently that he’s just bought airline stocks, saying, “24 airlines went bankrupt this year. How much more pessimistic do you want to get?”

He speaks with first-hand experience. A frequent flyer, he noticed the planes are full, and there is a huge demand for new aircraft. “If you order a plane today, you can’t get one for several years,” he said, adding that airlines are raising fares.

This is not his first outing into airline stocks. Many years back, while still a partner of George Soros, he got the fund to buy airline stocks at a time when airlines were on the brink of bankruptcy or heavy losses. That turned out to be a good bet.

Airline stocks are certainly a lot cheaper than they were just six months ago. The share price of Virgin Blue Holdings Ltd, which operates a budget carrier in Australia, has fallen 70% so far this year.

Here, Malaysia Airlines is down 30% during the same period while AirAsia Bhd has dropped 47%.

Planting higher

While the global economy is viewed with pessimism on all continents, oil palm continues to flourish on an island of optimism.

Hence, several brokerages and a public-listed planter last week raised their forecasts for palm oil prices.

IJM Plantations Bhd is understood to hold the view that crude palm oil (CPO) prices could hit RM4,000 a tonne again in the second half of the year.

The basis for this is believed to be the floods in the US Mid-West that would further tighten global supplies of vegetable oils. Its view of the average price for the next 18 months is at least RM3,500.

Citigroup raised its forecast from RM3,100 a tonne to RM3,300 for next year while PT AmCapital Indonesia raised its forecast for CPO to about RM3,300 for next year.

In a note last week, Goldman Sachs said CPO is undervalued relative to crude oil and soybean oil which have risen 17% and 7% respectively over the last two months while the CPO price was up just 1%. “We see more upside for CPO prices over the next three to six months,” it said.

One would expect, however, the new US president, taking office next year, to remove mandatory blending of corn ethanol with petrol. This is likely in the face of pressure from several international agencies.

That would reduce the demand for corn, ease the fight-for-acreage situation and reduce prices for the main US food crops - corn, wheat and soybean. However, there could still be some conversion of corn ethanol as a biofuel substitute for high-priced petrol.

In this article, we will highlight a few common and important ‘rules’ that are crucial to most investors.

Your purchase price is irrelevant when you consider selling a stock.

Most people always find it difficult to sell a stock at a price lower than the purchase price because this means making a loss.

For example, if you purchase a stock at 90 sen, you will not sell the stock lower than 90 sen as this means a loss to you.

You will most likely hold on to it until you are able to sell it at higher than 90 sen.

Unfortunately, your stock never remembers how much you have paid for it. You have memory of the purchase price but not the stock.

As a result, some investors end up holding on to lousy stocks with poor fundamentals.

The longer you hold on to these stocks, the higher the losses that you will incur.

Hence, the timing to sell stocks with poor fundamental will depend very much on when you are able to admit that you have made a mistake purchasing them.

Deciding whether to sell when the price is falling or continue to hold on to it with the hope it will recover and break even depends on the fundamentals of the stock.

The target selling price for a stock should be based on the future prospects of the company instead of the price that you paid for the stock.

Thus, you need to “sell the losers and let the winners run”.

For stocks with good value, you should consider holding them for a longer time.

Lately, some second liners with good fundamentals have been hammered down to very low levels. Some of them are even selling at lower than the owner’s cost (lower than book value).

However, not many investors are excited about those stocks although they are currently selling at a very cheap valuation.

Most investors worry that the price will go down further after they have bought it.

It is very hard to predict the market bottom. Based on our observation, certain fundamentally strong stocks may have temporarily found bottom despite the recent market sell down.

We think it is a good time to nibble on some good value stocks and keep them for the long term.

Even though the price will get cheaper than your purchase price tomorrow, we believe the current price should not be too far from the bottom.

Investors need to remember that the returns are based on the selling price. You may purchase the stock at a relatively higher price during a downtrend.

However, if the stock has great potential and you are patient enough to hold on and wait until the market recovers, you can still get higher returns than someone who may be lucky to purchase this stock at the lowest price but sell it too early.

As mentioned earlier, buying before the market reaches bottom is “buy low, sell high”.

However, to a certain group of investors it is safer to buy only when the market has found the bottom and started to recover rather than trying to predict where the market bottom is.

They prefer to buy the stock at a higher price because they believe they can sell it at a higher price. This is “buy high, sell higher”.

For those who prefer the “buy low, sell high” strategy, as you are buying before the market is touches bottom, you need to stagger your purchases so that you have enough bullets to average down your purchase price if the stock price drops further.

For those who prefer to “buy high, sell higher”, they need to prepare themselves mentally to buy at higher stock prices.

This might be a problem to investors as they are not willing to pay for higher stock prices as they always remember the recent lowest prices.

They may end up buying nothing but still hoping the stock price will come down one day.

PETALING JAYA: In a climate of falling global markets, the local bourse suffered yet another downgrade, this time from Goldman Sachs & Co, which named Malaysian stocks least favoured in South-East Asia on concerns over political volatility.

“The premium market valuation that Malaysia enjoyed relative to most of its Asean peers had political stability as one of its pillars – this is now in question,” according to Goldman Sachs.

According to a Bloomberg report, the investment bank’s regional brokerage arm said Malaysia was “in unchartered territory”.

It also cut its recommendations for Malaysia, Thailand, Indonesia and the Philippines to “underweight” from “market weight” previously.

While Malaysia had to contend with the downgrade, investor sentiment was weighed down further by the weak major Asian markets, which registered losses of between 0.39% and 1.83%.

The bearish sentiment was aggravated by the overnight losses on Wall Street on renewed concerns that credit losses in the United States could slow global economic growth.

The KL Composite Index (KLCI) closed 4.92 points or 0.39% lower at 1,257.57, the lowest since mid-April.

Hong Kong’s Hang Seng Index was the worst affected, down 455.6 points or 1.83% to 24,375.76, Japan’s Nikkei 225 lost 1.6% to 14,209.17, South Korea’s KOSPI shed 1.52% to 1,819.39, Singapore’s Straits Times Index fell 1.07% to 3,153.94 and Shanghai’s Composite Index dipped 0.65% to 3,436.40.

In Australia, the benchmark S&P/ASX 200 Index skidded 1.56% to 5,574.20 after investment bank Macquarie Group Ltd fell on more writedown concerns.

S&P had cut its ratings on Morgan Stanley, Merrill Lynch & Co and Lehman Brothers Holdings Inc as it expected these companies to report more writedowns. Lehman Brothers is reported to be considering raising US$3bil to US$4bil of extra capital to strengthen its balance sheet.

On the currency front, the yen posted sharp gains as credit worries prompted investors to bail out of risky yen carry-trades, where the low-yielding yen is used to finance purchases of assets with higher returns elsewhere. The yen hit a high of 103.88 to the US dollar at 4.35pm local time against its Monday closing of 104.43.

In Malaysia, political concerns and weaker corporate results in the January–March quarter also weighed down investors’ sentiment.

Aseambankers Equity Research said winds of uncertainty were holding back sentiment.

It maintained its bearish market outlook as investors generally remained sidelined to assess the political development and inflationary trends. On the external front, there was the impact of runaway crude oil prices and inflation in emerging economies.

It said the KLCI’s underperformance could extend, due to political uncertainties and as inflation caught up.

“Pakatan Rakyat’s threat to wrest legislative power from Barisan Nasional, combined with Malaysia’s late action to bite the inflation bullet (due to extended subsidies), will hold back the KLCI’s relative regional performance,” it said.

Meanwhile, CIMB Equities Research said the May corporate results season was considered significantly weaker than the previous round in February.

Of the 81 companies it tracked, 23% fell short of expectations versus only 15% in the February results period. Only 14% outdid expectations, a drop from 26% in February, it said in a report on the first-quarter results.

On its equities strategy, it said it had dropped the building materials, construction and property sectors from its top overweight sectors after the general election as it expected negative news flow and delays in mega projects to have a negative impact on these sectors.

“Plantations and oil and gas remain our preferred sectors due to their commodity-based earnings prospects. We remain bullish about the crude palm oil price outlook and expect crude oil prices to remain firm, which augurs well for oil and gas service providers,” it said.

It added the rubber glove sector to its top sector list in light of its robust earnings growth and bombed-out share prices.