Bursa Tech Checkout WW36'11 (Happy Raya & Merdeka Folks!)

For those who find it hard to follow I suggest reading through my previous posting on how I am using technical indicators as a trend seeker.

1. First Attempt on Tech Analysis Part 1
2. First Attempt on Tech Analysis Part 2

Bursa KLCI

DOW Jones

Previously I said 'I'll give Bursa a 90% chance to pull up based on good but slow growing world economy., which was true to a certain extent. Yet you can see the heavy selling has been halved since then, moving on I will expect Bursa to test the 1480 as its first resistance and the 1510 as its second before heading up to another mild bull run. You see, when it crashes it goes down fast and hard and the recovery is quite often thrice as long as the downhill (which means the recovery will take us until end of November). Because it is Raya & Merdeka now, there won't be much activity among counters. Do expect Bursa to have a sharp rise after the festivities assuming the DOW is still at its 11,500 level or higher so it's a steel bargain to get some cheap counters right now =)

And a few attempts to answer some of the emails I am getting recently and some which I haven't replied for months (I apologise):

What kind of cut loss strategy can we take for miscalculated DCF?

Frankly I haven't given much thought on this at all. Well there is no hard rule for the level at which I should stop and cut my losses. I do have the idea that for a short term investor it will be a smaller % where else for a long term perspective I'll say 20% is a good choice. When I mean 20%, it does not apply during a recession as the stock might go down to half its value. Provided that the fundamentals of the company is strong I usually do not sell even during very harsh times e.g. SUPERMAX.

I am interested in your way of calculating the fair value of a company is using DCF modelling....Would you like to send me the sample spreadsheet as my reference for my own investment use?

Sure, just ask me. DCF is an extremely flexible valuation model and hence very susceptible to variations with small shift of input values. Though it has served me pretty well for the years, it could be daunting to pick up for a starter. Take time to adjust the settings and play with it to get the best balanced of risk-fair value-discount rate.


I'm using these criteria I found online to evaluate banking stocks. When you have the time, i appreciate if you could scan the coverage on banking stocks by Dynaquest. Thanks so much. How's your investment in US? Eagerly awaiting your analysis on US stocks.

For the rest of the people who may find this useful. Click on it to expand.

I'll try to find time to scan these banking stocks and thank you very much for getting those criteria. No doubt it will prove valuable for me when I do start research on banking stocks. Talking about US stocks, you could begin to understand Options Basic Tutorial in Investopedia as a start. This is an important new element beside Tech and Fundamental analysis. It is the same as in Malaysian stocks where I use 80% fundamentals and 20% tech while for the US based market, I'll tap onto their fancy financial instrument called Options.

I notice you are bearish on Intel and bullish on AMD and these are the only US based stocks you have covered so far.

I'm an electronics engineer in PG and that says a lot haha. Yes, your statement is true. When looking at companies I often look at its potential not more on what it is achieving at the moment. Because Atom is losing its steam and Intel's failure to enter the smartphone market investors do not see any big potential growth within Intel even though it has been hitting record profits for many quarters. While AMD is not that well off either, it has successfully groomed out an unique product called fusion APU that has proved to be a viable competitive lineup for the least 3 years ahead. Bullish on AMD until the end of the year, fingers crossed that it should hit between $8-$10.

Dr. Aya Nakata - A real dentist by profession from Nagoya!!

What other investment blogs or articles/websites do you follow most or contently used?

www.malaysiafinance.blogspot.com

www.btimes.com.my

www.fool.com

www.thefoolinvestor.blogspot.com

www.wikiinvest.com

www.tradingeconomics.com

It's longer than this but I can remember those that I frequent often. I'll update the list when I get back to civilization in 10 days =) Going travelling.

Can you share about your choice of HwangDBS SIF? Frankly there's a lot out there to choose from but how did you came about with it.

I will cover this in more detail in the future. Meanwhile you could read this previous post of mine first: http://aboiwealthpot.blogspot.com/2011/04/give-me-break-pb-fund-fanatics.html. I generally use the four rules as mentioned in that post as my filter for good funds. It has served me well so far having seen my initial investment of RM6000 (not deducting out the one time sales charge of 3%) has grown to RM6176.90 in just 6 months, a 3% return. If unassuming the sales charge it is a whopping 6%. This % of returns is what I have expected from my conservative portfolio.