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Decided to make adjustments on the way I blog & share due to time constraints and other commitments. In the coming weeks you should see them. Short updates but more frequent & concise.

Friday, June 13, 2014

Ole Ole Ole...

My Predictions for the World Cup 2014

"So can meteorologists perhaps offer a clue, or two, as to who will triumph in Brazil?

To date, there have been 19 World Cup tournaments. The home side has triumphed on six occasions; playing on home soil obviously brings big advantages to the home team.

Familiarity with the surroundings, experience of playing in the stadia, and national fervor and support are obvious factors, but what about the climate?

At a time when much fuss is being made of the summertime temperatures players would face in the 2022 tournament in Qatar, we would do well to remember that Brazil has a vast range of climates and that some of the games are being played in the heart of the Amazon rainforest where the weather is likely to be oppressively steamy.

It is to be expected that players who are best acclimatized to these conditions will do well and this is another factor in favour of the home team, or those teams in neighbouring countries who experience similar climates.

But let us accept that climate is not the main reason why the home team has won almost one third of the tournaments.

Instead, if we consider the remaining 13 tournaments, we see that on 10 occasions the tournament has been won by a team playing in a climate zone they are used to.  

Those winners were:
1938 Italy in France; 1950 Uruguay in Brazil; 1954 W. Germany in Switzerland; 1962 Brazil in Chile; 1970 Brazil in Mexico;1982 Italy in Spain; 1986 Argentina in Mexico; 1990 W. Germany in Italy; 2006 Italy in Germany; 2010 Spain in South Africa.

(In the case of Spain’s victory, although the tournament was on a different continent, the southern African winter is similar to that of a European summer.)

That leaves 3 victories for a team playing away from their familiar climate zone:  1958 in Sweden; 1994 in the US; 2002 in Japan and S. Korea. Who won those tournaments? Brazil, Brazil and Brazil.

So what conclusions can we draw from all this. Firstly, a European side has never won outside its familiar climate zone. England, France, Italy, The Netherlands and even Germany would all have to make World Cup history to overcome the climate and triumph in Rio.

Secondly, South American sides are likely to do very well.  Argentina may have had an indifferent run-up to the World Cup, as have Uruguay, but they could do very well in 2014.

Thirdly, inevitably, Brazil are just too good. They can win anywhere.  It may be because of the racial ‘melting pot’ which perhaps produces athletes best able to cope with a variety of weather types. Or it may be because the country’s footballers have played their club football abroad for many decades and they have the experience.

The most likely reason though, is that they are usually the best team in the world. In the coming weeks we shall see if that remains the case."
Source - Al Jazeera

Wednesday, June 4, 2014

Aboi's Updates For June 2014

KLSE TECH REVIEW

Here's the link for my last market sense: Aboi's Updates for April 2014
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

Recap my April's commentary. 

[1]  However I see no fundamental reason why the index would go higher at this month of the year though my end of year Bursa target is still 2000 (assuming no financial crisis). For the month of April I've created two resistance lines @ 1850 (can be breached anytime) and 1880 (though it is highly unlikely). Indeed. It did NOT breached 1880 and we had a mini bear until mid month until it came back hovering lower than 1870.

Unfortunately I did not post an article about May so let's talk about June. I've created two resistance lines @ 1890 and 1900 (though both not likely). Two supports line namely 1870 (profit taking) and 1850 (pullback). However indicators looked weird. RSI and volume shows no clear signs but RSI do suggest a crossover maybe imminent while MACD shows bearish more likely to outweigh the bull. Volume is a huge surprise. I did not follow more recent news but something is brewing, smart money is planning for a move. The volume coupled with lower closing shows an up thrust which to me is a sign of weakness. It would suggest to me to conclude that the sell in May trend (Sell in May and Go Away) is becoming sell in June - opportunity to accumulate some positions coming?No change to my end of year Bursa target of 2000 (assuming no financial crisis).

As usual AMP Capital has a really good compressed weekly information (freely available, no sign ups) on weekly global market & global economic updates. It is usually updated every Monday afternoon so go read it when you have the time.


Second, my portfolio reversed May losses
Added a small figure of RM400 but reversed the losses incurred during May of roughly RM4500 so that's good. Once you get into fundamentals of stocks and have good holdings, you will learn to ignore emotional swings like me :). Supermax finally corrected after it's great bull rush, however it's still a SOLID BUY. Last checked, Supermax is heading for more exports overseas! Icap managed to add some value after months of trading sideways. All mutual funds performing well and nicely. Kenanga gave a handsome income distribution. I also increased my position in Aberdeen's World Fund. Read my post Aboi To Finally Invest In Aberdeen Islamic World Equity Fund about exposure into developed markets: US, Europe and Japan.



PORTFOLIO REVIEW
Portfolio composition. Equities 50%, Mixed Assets 15%, REITs 10%, Bonds 5% and Cash 20%.
Targets for returns p.a. Equities 12%, Mixed Assets 8%, REITs 6%, Bonds 5% and Cash 3.75%.

Notes
**Changed Supermax from HOLD to BUY, lower than fair value.
**Changed Genting from BUY to HOLD, recent aggressive expansion impacts future cash flow.
**Changed AmDynamic Bond from BUY to HOLD, impeding interest rate hike does not bode well for bonds.
**Kenanga Growth Fund gross income declaration of RM0.06/unit. (announced but not yet received; this causes initial drop in net asset value; if reinvested: 483 new units or RM479 in cash)
**Added another RM2500 into Aberdeen World Fund.
**Added AIA endowment fund as part of cash management. To date since obtaining it in 2011 has performed on par with fixed deposit interest rates or ~3.50% to 4.00%. Total returns depicted is less due to early years higher charges. I swapped this with my cash holdings so I can personally use the cash.

Comments
#1 Portfolio target for the fourth portfolio year @ RM140k for April 2014 has already EXCEEDEDPortfolio target for the fifth portfolio year @ RM152k for April 2015. The TWRR (time weighted annual return rate is now at 10.90% vs my target of 8.80%).


Updated 'My Plan' for 2014
***Please NOTE that KEEP IN VIEW is not the final decision***
[1] Invest roughly 25% of cash balance in Aberdeen's Islamic World Equity Fund. CONFIRMED and I will do so via cost averaging method until June. Added more positions in April. Last will wait for end of June.
[2] Invest in a new mREIT: Time To Revisit mREITS in 2014 KEEP IN VIEW, waiting for opportunity when yields are right. Still monitoring.
[3] Invest another fund, diversify further into small cap-medium cap companies where I have no exposure. KEEP IN VIEW, yet to do any research.
[4] Possible buy of gold commodity: Speaking Of Recent Gold Demand Trends KEEP IN VIEW, my opinion is that gold will see resistance at $1340. Gold is experiencing correction now, very promising. As expected gold is correcting. Be patient and wait.
[5] Par my remaining cash balance to 10% level. This will be done using my already 4 year old endowment fund with a projected 4% return p.a to better reflect my portfolio composition, currently the cash is sitting ducks with absolutely no returns. CONFIRMED but I have not decided how to integrate it into my portfolio. Will do this for May update. Integrated.
[6] Taking a look (not invest) at Padini holdings. CONFIRMED and expect a post within this week. I promise to have one in June.
[7] Put some cash into Fixed Deposit.  CONFIRMED. Pushed to end of year due to opportunities that maybe coming.


Disclaimer: The reports, analysis and recommendations in this blog are solely my personal views. I do not link to any investment body or company. As such, I will not be responsible of any of your investment decision. Consult your investment adviser or come to your own conclusions before making any investment decision.