Don't try to predict share price movement

The share price of KNM can reach RM2.00, the bursa can go to RM15, the E&O will go up to RM1.50

OMG, stop letting me to hear that. I do EXPECT the KNM to reach RM2.00 in the very future, but just cant stand people foreseeing the share price like they are god. Warren Buffet said he don't know what is the share price of the companies he bought in next week, next month and next year, he is only able to know how much the companies worth. This is the street investor culture of saying how much the share price can go.

The target price is not the going-to-be price. It is, on another word, the fair VALUE.

A lot of street investor see the analysists' target price is the exact should-be price of a share. For example, RHB Research House (IB or RH or watever) valued KNM at 1.29 target price. After knowing that, a lot street investor will like to say : "RHB said KNM can go to 1.29" OMG, RHB RH only tell it is considered fair and make good sense to buy KNM at price below or at 1.29, but they never promise the KNM will reach 1.29.

Anyway, i never took analysists' target price seriously, i just refer it to support my view on a company. The target price is depend on market trend and sentiment, and is changing from time to time. You can see a target price of a share is going up with the rising of share price. Hahaha, its so funny. Say i tell you KNM today target price is 0.90 when it is 0.80, and tomorrow i call it buy at 1.00 when it is 0.90, then the day after tomorrow i reiterate buy at 1.20 when it is 1.10.

Investor should be able to know the business they are buying, they should learn how to value a company independently without fully depend on analysists' reports.

Remeber, no one in earth can know exactly how to share price move tomorrow, don't pretend you are god. You can only know how much a share worth for yourself.

How market trap work?

There are a lot of investment traps in the market. What is that? Is where rumors showing a company's share price is overly undervalued & performance is over weighted and follow by a sudden upsurge of share price which cause retail investors to rush in buying something valueless at high price. Buying this kind of share is a ticking boom awaiting to burst, an equilibrium game where there are winners & there are losers, the money flow from loser to winner and the winner is always the big guy.

How it work?
- at first the big guy(fund, hedge fun, large cap investors) searching companies background for undervalued companies
- those companies usually have the characteristic of healthy balance sheet, continuous earning record, good indicator of undervalued (low PE ratio, low Price-to-book value ratio) but low dividend yield, low growing prospect
-at the first place, they accumulate the share
-the encourage their friends working at stockbroking firm & publication company to let the public know the share is undervalued
-through various media, retail investors are exposed to the information of the company and accept that the company is good
-but at this time, no investors will move in due to low interest, low sentiment on the share price
- they will ask if the share is good, why the price is stagnant? if i invest now, i'll have to wait for a very long time
- the big guys place a sudden large amount of buying order to push the share price to surge for at least 30% at a rational pace
- retail investor's mind change, they are misguided to look the company as a fantastic company and keep getting in the share
- the big guys use various way to spread the rumors telling the public how much the share price will reach
- investor believe the share price is still way too cheap to get in as they believe the price will reach the price that the rumor tell, that is when the big guys exiting
- once big guys exited, no one are able to support the share price, the share price will eventually at free fall condition

That's it. So, be smart. Be an intelligent investor.
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How to detect movement behind the scene? How to know a company's share is being accumulated/distributed?

First you have to know how to read the buy/sell meter at your stock trading software. Which is a table showing the volume in queue waiting for selling or buying at different prices. For example, if KNM know is trading at 0.845, u may find out that the buy/sell meter show u 3 prices at the left and 3 prices at the right in the table. It is the 3 prices that investors place to queue up waiting some one either to buy it or sell it. And you can see a big number beside the prices, that is the volume in queue. Something like this,



you can see 5,069 lots is in queue to buy at 0.855 & 14,995 lotss is waiting to be sold at 0.860. In NYSE, it is called ASK & BID. So it means some of the investors are biding the KNM share at 0.855 and the total volume they bid is 5,069 lots. While at the right side, some of the investors are asking for the price of 0.860.

If you wanna sell the share at 0.855, you accept the 0.855 bid, & you accept the 0.860 asking price if you wanna buy the share immediately. Or else you bid & ask the price of 0.855 or 0.86 respectively (say 1 lots). Then the 5,069 + 1 will become 5070, same case in the sell side.
Do i make myself clear?

Basically, you see the 3 bars at the left is longer than the 3 bars at the right, that means more volume is being bidded or a lot of investor wanna buy than those wanna sell. So generally the downside support is strong and the upside resistance is weak, the share price go up. The same case at the other hand, if 3 bars at the right is longer, selling pressure is greater, share price generally go down.

Have to let you know that how a share is priced. It is simply is the last donw price of the share. For example, ABC share is priced at RM2 now, u bid for 1.50 after 3 hours, someone sell it to you at 1.50, so the ABC share now is priced at RM1.50. That is how it work, and you can actually able to manipulate the share price at a short while.

So how to use the buy/sell meter to detact any movement behind the scene.
As i mentioned earlier, if the 3 bars at the right is longer than those at the left, the share price will generally move down. But there are situations where the share actually go up. The case is like this, the number of investors wanna sell off the sell is outnumber the investors wanna buy. But some big guy (fund, large capital investors who buy share in millions of dollar where they cant buy on the amount they want at the spot but to buy at a range of prices) wanna accumulate up the share.
If there are really investors wanna accumulate the share, generally the share will move up.

The logic is like that. Those investors are not buying share by queing up at low price, they will accept the asking price immediately instead. This is because by queing up at lower price, retail investors will notice there are strong interest in the market, then there will be more people wanna buy it rather than sell it, when the interest is boosted up, share price move up, the big guy will not have the chance to accumulate it at lower price. Since they wanna buy the share at large quantity and they cant queue up which will boost retail investors sentiment, they will buying up the share asking to be sold, after the 1st best sell price volume is bought they will move on the the 2nd one.
Thus you will see the buying bar is short, but the long selling bar is shorten quickly, since the selling bars are way too long to be shorter than the buying bar, retail investor might feel that there are still more selling pressure, but actually someone is buying it at a large quantity. You can detect it if there are a sudden large volume done.

Let see the example of KNM,
- i am the big guy, wanna buy 1 mil lots of KNM share as low sentiment make it a good time
- more volume asking to be sold than to be bought.
- if i bid 100,000 lots at once will boost up the sentiment & cause upsurge in the share price
- i buy the selling order in queue from time to time, small block at once to make the buying looks more natural & undetectable by retail investor
- after buying share at higher price & drive it up, i have to pull it back
- i sell off some of the share i bought initially to pullback the price
- this is to trap more people to feel the profit taking pressure & make them sell
- Just like playing with kite, i have to control the share price ups and downs nicely so that people keep on selling to make sure i can keep on buying.
- After few days of accumulation to the amount i targeted, i give the market a spark by placing buy order at large quantity while accepting the selling order from retail investors
- i make the retail investors' sentiment at the highest
-i do nothing but looking at the share price to go upward
- After the share price reach the level i satisfy, i do the same thing in the opposite so that i can distribute all my share noticeably and yet the retail investors still feel that the share will be bullish & the buying is still outnumber the selling.

Well, that is generally the mechanism of how the big guy manipulate the shareprice & the retail investors. Anyway, stock selection & price of buying is still depend on the fundamental of the share, this trick is to help investors to know what happen in the back scene and react early.

YTL Power - a 10% cash machine, a low-risk investment and a stable capital gain player

YTL Power has been generous in giving out dividend to its shareholders. My parent have been holding YTL Power share and has been enjoying good dividend payout for decade. Every year, YTL Power pay dividend in form of cash dividend and share dividend (giving extra share unit to shareholders) Since 2004, she paid cash dividend of 10 to 12.50 sen per share every year. Besides cash dividend, she gives out share dividend which, generally accounts of around 5 % yield. Together, the YTL Power is a company famous for 10% yield, where you can earn income which is 10% from the current market value in 1 year. Or put it simple, if u have a 10% yield investment worth RM10, you get RM1 every year. Since 10% is 4 times higher than 2.5% rate of FD, it make the counter a perfect alternative to FD.

Will the company go bankruptcy or go into loss?

This is Uility Business, man!!! This is your safe haven!

Buy and hold strategy is out-dated, but this counter is different story. Utility business is always considered a safe haven to invest in, simply because utility business sell utility that every need no matter the global is in recession or in bullish time. Besides that, the demand for utility is generaly in a uptrend, because the world population is increasing, more people means higher demand of utility. More people need more energy, higher water treatment quantity, higher demand for telecommunicaton services and so on. Global economy is also generally growing, same case here, better demand better utility (energy, water treatment, telco...) demand.

The risk of failure of the business is much more smaller than an airplane crash as long as the pilot of the group is still Francis Yeoh, which has business management style alike his father, Tan Sei Dato' Seri Yeoh Tiong Lay. Where he seek for organic growth of the group and sustainable revenue stream, instead of a sudden one-time leap of profit. "You have to understand your business. We are a regulated business. We do not buy a business to sell it after 2 or 3 years to get the profit. We buy the business and make it the No 1 and let it generate revenue for us. We have license of our business for 100 years, that is why we issued bonds for 30 years, 50 years and we enjoy very low yield for our bond." That might not be the exact phase speaked by Francis Yeoh, but basically that is what he speak in the 2008 AGM that i attended. This show that, Francis Yeoh is not going to risk his business by buying a business that is unable to generate revenue or just want to show how big the company is. Of course, i understand that CEOs may not doing as if what they said, but Francis Yeoh has been showing his great integrity by managing the group as if what he promised. He bought Wessex Water and make it No 1 in UK in term of efficiency, he bought PowerSeraya Limited, Singapore 2nd largest power provider and announced it the day i attend the AGM, and the YTL Power, the first IPP in Malaysia selling power to TNB at the cheapest rate. YTL Power has been there for decades, and its share price is always has a low volatility, it is really a safe haven for investment, is suitable for investors targeting sustainable long-term growth and less volatility.

Safer & Better Dividend gain + Capital Gain

I bought YTL Power last year July at RM 1.77 by converting my FD to this investment. That was the worst time in the market, i have no idea on where to invest. I bought YTL Power as a buy-low strategy because the government just announced the windfall tax on power sector which cause investors' worried on power sector. YTL Power, the least affected-player dropped to below RM 1.70 level. At the moment i bought it i din really try to get in at a lower price, i just have a very simple thought, the dividend-yield is much more higher than FD, i just don't want to hold FD, i just hate the FD paper in my hands. Thus, i parked my capital on YTL Power in hope to get a better-than-FD income and never expect or trying to forecast the share price will go up at that market situation.

Since day 1 owing YTL Power till now i've received 3 times dividend which is 3.75, 4.5 and 3.75 sen respectively. Besides that, i also received a 40 to 1 share dividend which acounts for 2.5% return. If adding in the to-be-pay dividend of 3.75 sen in July, i received a total of
15.75 sen cash dividend per share, which is 8.9% of the price i bought at RM1.77. In addition to the share dividend, the total dividend return in 1 year is 11.4%. In another words, my investment has generated 11.4% income for me, definitely more than 4 times higher than what bank give me. If i didn't convert the investment on July, i'm still waiting July to come to earn that 2.5%.

Is the dividend sustainable?

Yes, i am confident that YTL Power will be continuously giving out dividend for the decades to come as if what she did. In fact, there are people who are much more concern on this, which is the YTL Group and the Yeoh family. YTL Power is the main stream of revenue to the whole YTL Group where 70% percent of YTL Group revenue come from YTL Power. Every dividend declared by YTL Power give a significant impact to the YTL Group Income Sheet and cashflow. You may not take it seriously if YTL Power declare dividend less than the last year by 1 sen, but for the YTL Group, 1 sen is significant enough for the group. I expect YTL Power have better dividend paying power in the coming years as the purchase of PowerSeraya has opened up a new income stream to this utility company.

I believe YTL Power will be giving out dividend more than 13sen from now on since the cashflow stream is larger than before. The strentening of Great British Pound and Australia Dollar will also help strentening the company balance sheet. At the closing price of RM 2.16 on 15 June 09, 13 sen dividend still reflects a 6% dividend yield. Please note that more than 70% of the revenue of YTL Power is contributed from oversee operation, which are from England, Australia, Singapore and Indonesia, thus the position of the currency from those countries have an effect on YTL Power balance sheet and year-end profit.

So, how great is a 10% cash machine? Imagine Mr.A own house worth RM 300k has a rental of RM 900/month which amounts to RM10,800/yr or a 3.6% rental yield. Mr.B own YTL Power stake with RM300k market value, 10% yield amounts an annual income of RM 30,000. Mr.B certainly own a better cash machine than Mr.A.

KNM, enjoy attractive return from the recovery of oil price

It will be a lie if they say they never heard of KNM. I believe KNM is the guy that top the "Most Active List" the most frequent since 2007 untill now. So what make this guy so handsome that everyone is chasing for?



I invest in this company since it was trading at RM 0.425 and called it a hi-risk hi-return investment. There share price growth >120% when trading @ RM1 (2 June) and i still yet to find reasons to sell it. The share price of KNM is predictable cause it is, indirectly parallel to the crude oil price.


Why hi-risk? There have been concern of the failure of the group, this is due to the uncertainties of global outlook. Most economist especially the well-know "Dr. Doom" Nouriel Roubini predicted the economy recovery will not come sooner than 2010 and when it comes, it will come in a slow pace. The recent acquisition of Borsig make KNM bear a big loan repayment and the job-on-hand can not be last long if there are no new order. Thus the risk of failure was there. However, the future is clearer now, seems there are enough economical data to show that the worst is over and the crude oil(CO) price has doubled from $32.80 low.

Why hi-return? Why KNM?

The People : Ir Lee Swee Eng, MD of KNM.

He has been working in the O&G service provider field since he graduated in '79. With 30 years of experience in the field, I'd say he is an expert on this industry. Holding 23.4% stake and he has been buying the share of KNM during the falling of share price in 2008. This is a healthy sign that tell that he take his biz seriously. ( This is an important factors cause some MD acquire a company jz wanna make it look handsome and sell it out later at a better price, but other are trying to acquire as many stake as possible cause they are confident to make their business better and have a passion of owning their own biz.) I'll be meeting him in the coming AGM to get to know more about him.

Vision with action + opportunities

To be a top 5 global manufacturer of process equipment of the oil, gas, petrochemicals, minerals processing and energy industries. Since listed in '03, the group has been actively doing JV and M&A to expand the biz. Successfully, after adding the RM1.67bil-Borsig to the group bringing the total asset to 4.4bil, KNM has biz all around the world (except Africa and the two poles). The after tax-profit grow from 0.11 bil to 1.81 bil in 5 years (04-08) or double annually. This skyrocketing-growth is due KNM has listed on the right time and has catch the wind of the raising of CO price since 2003. The group has insisted on growing their biz even though a challenging time ahead, and is believed will go even further until they achieve their vision.
To conclude, by leveraging on the geographical-advantages and its position in the industry, KNM will surely growth exponentially, again if the economy outlook is recovering, which'll drives the CO price to test USD 100 level again.

Crude Oil Supply & Demand

Jim Roger, the founder of "Rogers International Commodity Index" (RICI) and co-founder of Quantum Fund with George Soros (the one blamed for causing the '97 Asian Financial Crisis) is bullish with commodity. He say with evidence the commodity is a better investment asset that equity, when the equity market turn bearish, commodity is still have more upside to go. When the market recover, commodity is the 1st to recover. The RICI is an index which the index based on a selection of commodities, from Crude oil to coffee bean, with difference weightage. Crude oil is the commodity weight the most in RICI, which has a 21% weightage to the RICI.

It's undeniable that there is only one direction that the international oil supply can go-downward. No matter you like it or not, the petroleum reserve on earth is decreasing and it is decreasing in an shocking rate, and extraction is going to be more and more difficult. On the demand site, it is highly depend on the global economy, which go ups and downs. But the general direction is still upward. This means, the global economy is growing, manufacturing and construction is mushrooming in all around the world(especially china, the second biggest oil consumption country). The oil demand is, again u-want-or-dun-want, is increasing. Some may ask can the alternative energy replace the oil? Yes, i wish so. Alternative energy is still i baby stage, with a lot of countries still not willing to put much money on developing this overly long-term solution. The Dubai prefer to put the petrol-money in tourism, building up the unbuildable, rather than developing alternative energy. The biofuel extracted from corn have been thought to be a alternative to oil demand, but has created food crisis and carbon emission problem.


To conclude, oil is king. It is essential to invest in O&G companies unless you say investment is only for you to kill time. Invest in O&G service providers is as good as invest in O&G companies. Since the O&G companies require the service provider to work for them in developing new oil-ring and other oil-related equipment like transmitting and processing. I choose KNM as she is the leader of this industry in Malaysia. Many people staring at the one-way up share price will definitely doubt how much the share price can go after increasing 200% from the 32.5 sen low on March.


“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” - Warren Buffett

KNM is definitely a wonderful company as i mentioned above, and has more upside to go. Is the price fair? The recent 11 recommendations of target price(TP) range from RM 0.90(TA) to RM 1.29 (RHB). Thus trading at RM 1.00 is definitely a fair price. But I'm not here to tell the reader how much it worth, and suggest to sell when the price hit RM1.29. But I'm here to say that KNM can go beyond that, especially if there are sign of new orders. The valuation of KNM is not based on what the stockbroking tell you (the TP was RM 0.30 on March from one report), the valuation on KNM is based on the economy climate. Never trying to sell KNM off unless the group make silly management mistake or you predict the crude oil price has peak and no way to go but downward (which mayb until the next financial crisis)

"While most of my friends cry, i smile when the oil/petro price increase. Because i'm owing O&G company, the gain because of oil is well-enough to cover my petrol expense for several years"

Let's get it started!

Yes, let's get it started! I start writing this blog to share with the reader my investment mind. I'll be sharing my investment strategies and the companies, which i believe, have very bright outlook in the future. My investment style is basically based on fundamental analysis of the particular investment. Also, you can follow me on the latest economy environment, especially the one you need to know that affecting you investment direct or indirectly.

One of the objectives of writing this blog is to encourage the readers to invest and advice readers never try to speculate, cause it'll eventually bring you no profit. To speculate is to run on a treadmill, no matter how much and how painstakingly you run, you travel no distance and you risk yourself from being hurt. Thus i'll be including the key fundamental factors that make a particular comapany, which i recommand, attractive. This is to help providing reader information on making investment decision.

My investment is like noone's, indeed, different people have different investment strategy, one should develop his/her own investment strategy based on the financial position, financing method, investment objective, risk tolerance, time allocated to investment and many other factors.