Stock As One Of Investments

Basically all investment options contain the profit opportunities on the one hand and the potential losses or risks on the other. As the savings and deposits in banks have a small risk because it is stored safely in the bank, but its weakness is that profits are smaller than the potential gains of the main stock. Investing in property (house and land) the longer the price is higher, but are also at risk if displaced or occur, a fire against the house, while the business itself (self-employed) loss at risk while investing in gold has a risk of price drops.

Capital Gain is a profits from the sell or buy stock in the form of surplus value from the value of the sale and purchase of stock. For example, when you purchase worth $ 1,000 per stock and then sell for $ 1,500. So the difference of $ 500 is called Capital Gain. stock are securities of the most popular among securities in the capital market. Why? Because when compared with other investments, stock allow investors to earn a return or a greater profit in a relatively short time (high return).

In addition to the return, the stock also has properties which is a high risk when the stock price may also degenerate quickly or delist its stock on the (abolished recording) of the exchange so for buying and selling should seek the buyer or the seller himself and has no stock market reference price. With the characteristics of high risk high return is then investors need to continue to monitor price movements of stock held, so that the right decisions can be generated in the right time.

Dividend is the company's profit distributed to stockholders. Usually not all corporate profits distributed to stockholders, but there are parts that are replanted. The amount of the dividend you receive is determined by the General Meeting of stockholders of the company. But what should be noted is that the dividend policy the company does not always pay dividends to stockholders but depending on the condition of the company itself (particularly with regard to benefits achieved). This means that if the company suffered losses of course, a dividend will not be distributed in the current year.

Capital Loss is the opposite of capital gain, which is a condition where you sell stock you have below the purchase price. For example stock of a corporate X you buy at a price of $ 1,800 per stock, then the stock price continued to decline until it reaches $ 1.300 per stock. For fear that stock prices will continue to fall, then you then selling price of bicycles so that you suffered a loss of $ 500 per stock. That capital loss that can happen to you.

Liquidity Risk, Company-owned, was declared insolvent by the court or the company is dissolved. In this case the claim rights of stockholders can last priority after all the company's liabilities can be paid off (from the sale of the company's assets). If there are leftover from the sale of the company's assets, then the rest is distributed proportionally to all stockholders.
However, if there are remaining assets of the company, the stockholders will not receive anything. It is the heaviest risks of a stockholders. For that a stockholders is required to continuously follow the development of the company whose shares are owned.

Touch Wood

Be amazed at the level of creativity we humans can possess. Even if you have the ideas, its the tenacious execution that is just as if not more difficult. The amount of work for just a commercial and it probably wasn't cheap at all. The entire concept rides on the theme "touch wood", as in when you are holding your phone. NTT came up with a kidney shaped phone with a wooden back cover, very elegant. The advertising pitch was to bring the one-ness of wood in its natural environment, the forest. The branding is exceptional.

Touch Wood in a Japanese Forest with Bach

Go to the woods of Kyushu, Japan. Engineer a massive xylophone (or is it a marimba?) to run down the slope of a forested hill. Take a wooden ball, place it at the top of said instrument, and push it. What do you get? Bach's treatment of a traditional church hymn! Namely, "Jesu, Joy of Man's Desiring."

 And, all this for a Japanese commercial for a kidney-shaped smartphone with the tagline, "Touch Wood." I may be late to the party on this one, but when I think of all the time it took to set this up, the precision and measurements used to adjust it and actually make each piece, and how many takes the film crew shot, it continues to inspire even if it's a year old.

And, here you can see how it was made:

AirAsia X Listing / The Tony Fernandes Effect

In light of the listing of Air Asia X, I think its worthwhile to repost this which I wrote last month. When Tune Insurance came out, I think I was the only sucker touting it as a good thing. It opened weak and stayed that way for a few weeks and then surged past my fair value.

So how about AirAsiaX? It will go round the same route as Tune Insurance, i.e. open weak around RM1.35-1.40 (this was my original estimate when the touted IPO was around RM1.35, that range would be moved lower 8-10 sen based on the final IPO price) and stay around IPO price for a few weeks and then move to my year end fair value of RM1.70-1.80.

I call it the Tony Fernandes effect. While most people may not like his personality ... calling him brash, entitled, too in your face ... most will still acknowledge that he is a very good entrepreneur and business person. That also sums up my personal view of Tony.

The TF effect also has it that many critics (analysts and reporters) like to cut him down to size. Hence it is very unlikely that TF will get favourable press. Of course many will say AirAsiaX is a tough business, its not budget airlines you know, its over crowded, its cyclical, blah blah ... For all... please refer back to what you said about Tune Insurance, then talk to me.

The TF effect also has the rest of the world always thinking TF and AirAsia are always dreaming up of new companies to list and churn and make money for themselves. While that has some truth in it, it is also fair to say that TF is making use of the capital markets wisely. Tap it to enrich stakeholders and using other people's money to grow the company. Nothing sinister in that.

Its very hard for TF to get respect. Some might even say there is racial undertones involved. Whatever it is, check your biases. To me, its already very very difficult to have the lowest cost per mile as a budget airline. I think its so much easier to replicate that for long haul. There is still too much fat in long haul airline industry. 

To me, Tune Insurance is more attractive than AirAsiaX, but even so, I think it will prove to be a good investment if you hold at least 6 months-1 year. Before your bitching even ends, get your socks ready for Tune Hotels, just to grate you guys even more. That I think will be the most attractive of all.

BIG loyalty cardholders who have travelled on AirAsia X Bhd (AAX) over the past two years can subscribe for the long-haul, low-cost carrier's initial public offering (IPO) shares using the blue form. There are over 18,000 BIG members, of which 1,800 are Malaysians. However, those without the card but have travelled on AAX over the past two years and before June 10 are also eligble to use the blue form, as long as they get a BIG card before 5pm tomorrow, when subscription for the retail shares closes. This segment will pay the same price of RM1.45 a share as other investors and are also eligible for the free tickets that are being offered as part of the IPO offering. By using the blue form, they would not have to compete for the allocation of shares under the white form category, a source said.
Both the blue and white forms were for retail investors, who, incidentally, had oversubscribed for the shares by one time thus far. A total 50 million shares are being offered to retail investors under the blue form category, and 160 million shares by way of white forms.
To lure retail investors to subscribe to the IPO, AAX is dangling a zero-fare return air ticket to any destination flown by the airline to investors who buy 10,000 IPO shares, and three tickets for those who buy 100,000 IPO shares as part of its shareholder benefit programme. However, they will have to hold the shares for a minimum one year to be eligible for the free ticket, with a maximum period of three years. Of the 592.59 million new shares, the institutional offering is for 538.01 million shares and the retail offering, 252.11 million shares.
AAX intends to use the proceeds to help fund new aircraft acquisitions, as its expansion goes into overdrive over the next four years by adding 22 Airbus A330-300s to its fleet. It also has a firm order for ten A350-900s beyond that.

S&M Show Podcast

Today's topics: Eastland Bhd, MBSB symptomatic on our country's problems with personal loans, the need to revamp our archaic Insolvency laws.

Today's song pick:  You'll Never Get To Heaven, written by one of the top 3 songwriters of the modern era, Burt Bacharach ... sung inimitably by Dionne Warwick.

Get Tough On Personal Loans & Property Loans ... PLUS Revamp Insolvency Laws Please

Bank Negara Malaysia�s (BNM) move last Friday to tighten consumer lending will be negative for loan growth but the impact will not be significant, CIMB said, as it urged investors to hold on to their holdings in banks. The three measures the central bank announced were 1) a maximum tenure of 10 years for personal loans, 2) a maximum tenure of 35 years for property loans, and 3) a ban on pre-approved personal financing products.
In a kind of related newsbite, Nancy Shukri has indicated that changes will be made soon to Insolvency laws, a promise made by Najib back in 2012. Its about time to change these laws as it is not befitting of a developing economy like ours.
While I strongly agree that our personal and property debt should be reined in further, ... we also need to know that there is a highly inequitable treatment of those who fall under bankruptcy in the Malaysian system.
Vivian Hsu no67167

I have written before on the dire need to revamp Malaysia's archaic bankruptcy laws. Let's look at hard facts:

a) Inland Revenue Board CEO Dr Mohd Shukor Mahfar is 'embarrassed' to explain clearer the issue of why five million people in the country who are eligible to pay taxes but only 1.7 million are active taxpayers.

b) As of October 2011, there were 235,908 (probably closer to 300,000 now) individuals who were still declared bankrupt, according to Insolvency Department's Datuk Abdul Karim Abdul Jalil. On average 51 new ones are added everyday.

Take the two together, this is to say that nearly 5% of those working are bankrupts. Yes, I know some are not working. So we are still looking at 1 in 20 of our workforce.

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The trouble with our system is that bankruptcy runs in perpetuity (i.e. almost never ending till you die). Unlike in HK, Singapore and many forward thinking economies where you only have 4 or 5 years to pay down your debt and after that you are free from the debts.

Why is it so important to implement a limited period for bankruptcy?

1) Being bankrupt means you are also literally removing 5% of the working public and 5% of households from participating in the real economy. Cannot do business, cannot get loans, even job hunting may be a problem every now and then.

2) The Malaysian archaic system overly favours the banks and financial lending institutions. When its in perpetuity, the banks can clamp down on you for the rest of your life. We have to make banks and other lenders also responsible for their part in giving out the loans. Look, even creditors to EU give haircut once Greece is in trouble. That is why banks in Malaysia can be so bloody aggressive with credit cards, they know they have a very long recourse to make your life a living hell.

3) The 250,000 figure will jump exponentially soon. Why? Just look at the way they are dishing out the study loans under PTPTN. Look at the surge in personal loans by non bank institutions, look at the aggressive credit card schemes. When you give out RM30,000 or RM40,000 or RM50,000 to someone and their job is only likely to pay them RM2,000 when they graduate, if they graduate, and if they can find a job then, ... you are going to have huge problems. Plus, we haven't got to the credit card users yet.
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4) Even fuckers who end up in jail for a few years and come out, they are free ... not if you are a bankrupt, man, they will drag you till you go to your grave.

5) The onus needs to shift back to the banks and other institutional lenders for a more balanced and equitable solution. For far too long have the banks been operating giddily under such a protective umbrella in their favour. There has to be a fairer distribution of risk for lending and borrowing. I am not suggesting that debtors need not pay, I am saying you need to give them a limited timeline.

6) When you take out 5% of the household from the real economy in perpetuity, it has a lot of indirect repercussions: cannot get study loans for children, making it very difficult to reverse their position as their job prospects may be affected as some companies frown on their status, etc. Needless to say, these 5% will also NOT play a part in the real economy in an effective manner - talk about dropping an anchor on the economy, it weighs heavily especially if its in perpetuity.

7) We have NO UNEMPLOYMENT INSURANCE or other similar SAFETY NETS. If our economy tanks, or the industry we are in tanks, and we are suddenly out of a job ... it becomes very easy for us to spiral swiftly to bankruptcy if you have car loans, housing loans, etc... and no job.

8) Our current laws stifle entrepreneurship. When they try to start businesses, they usually have to take loans, sometimes they will fail, you do not want to punish a risk taker too much by literally barring him/her from ever being an entrepreneur again. We all know that to have a vibrant economy, we need more risk takers, not shut them down the moment they fail. Many successful entrepreneurs will tell you they needed to fail a few times before striking it.

9) It is also precisely these laws that causes many to go for the "ah longs" to make ends meet. No one will resort to these avenues if we have a saner approach to this mess.

10) In HK its automatic discharge after 4 years, in Singapore its 5 years. There are just as many genuine cases as there are people who deliberately do not pay there as in Malaysia. Taking away 5% of the working population from participating in the real economy is a travesty - it has enormous multiplier effects, each person probably affects the livelihood of around 4-8 other younger and older people dependent on that person for financial well being. 

And this is the most important reason of all, we need a KINDER, GENTLER society and government, that embraces all and not excessively punishes some.

p/s I know there will be many who will harp on bigwigs and connected individuals amassing huge loans from government linked banks and government linked financial institutions, and not paying back. That is a separate issue altogether, and should NOT be lumped into what I have written above. Heck, most of these connected people do NOT EVEN EVER get slapped with a bankruptcy notice, so they really do not count - theirs is a matter of poor government governance, lack of accountability, poor or no enforcement, running circles around regulations, the lack of political will to enforce or do the right thing, no checks and balances. So these are TWO related BUT almost entirely separate issues.

A Different Burger Story - Wallop Pork Burgers

The whole of KL have been inundated with premium burgers, mainly beef burgers. We have My Burger Lab, Burgartory, etc... But everyone should know that pork burgers beat beef burgers anytime of the day. We have Ninja Joe, it is good but there are many things they could do better.

There is another decent pork burger place called Wallop, find KAYU Nasi Kandar and its in one of the shops. Again, they may not be as cool or spend heavily in design for the place, but they are sincere about their burgers.

Get the extra bacon ....

Bun 7/10
Pork patty 8/10
Condiments  6/10
Chips  6/10

There are a few things they could certainly improve on ... the cheese, get better cheeses. Besides normal bacon, provide crispy bacon as well. Must have french and english mustard on the side. Love the raw onions but should also have caramelised onions. To be fair, its more a mom and pop shop and they try hard. Give it a go.

This Must Have Happened To All Of Us When We Were Young .....