All in a day's work

Brace yourself for this historic moment of your life! Dow Jones dropped almost 770+ points in one day, that a whopping 7-8% drop!

I wonder when will we ever see this again.

Honestly, being logical people, sit back and think.
Think from a business prospective.

1. You are presented a plan that requires you to fork out a HUGE sum of $.
2. This plan is not complete, there are loopholes/ questions.
3. It is YOUR money and there are people hounding you for it, with a lousy plan
4. It MAY NOT be the final solution.
5. It's not your problem in the first place.

Would you give up your huge reserves? Still hopeful?
Oh well, just a thought.

If some of you still do not know, there has been some major share buyback programs that has been declared recently.

1. Microsoft - US$ 40b
2. HP - US$ 8b
3. Nike - US$ 5b
4. Vodaphone - US$ 2b
5. Anheuser Busch - US$ 1b

These are the biggest companies in the world that has been declaring their Shares Buyback program.

So what exactly is Shares Buyback?
In this post, I'll only address Shares Buyback and not other FA theories or Formulas

First and foremost, please understand that cash used for the buyback can always be used alternatively on new investments, new products or marketing, which MIGHT increase the revenue of the company.

Investor Point of View

1. When the fund buys its shares at a discount, the net-asset value for the remaining shareholders rises.

Imagine a company has $100 in assets and 10 shares issued, making each share be worth $10.

If the Share Price is trading at $9 and the company buys back 1 shares at $9, what is left is assets of $91 and 9 shares.

This buyback increases the NAV per share to $10.11, or 1.1%

2. Buying back of shares creates an impression that the management is confident of the prospects of the company and feels that at current traded price, the company is undervalued.

3. A Buyback reduces the number of shares available, thus increasing the company's earnings-per-share and makes it appear more attractive.

Company's Point of View

Before we go into this area, 2 points to note:

Shareholders and Management are 2 different class of personnel in the Company.

Has it occured to you the fact that instead of a buyback, why not increase the Dividends paid out?

1. The Management of the company might have a clause to receive compensation in relation to the company stock price. This simply means that with the higher the stock price, the more it benefits the mangement, be in stock options or bonus.

2. Stock buyback has the immediate impact on the share price. Short Termist Management will deem this strtegy as the most effective as compared to Divided Payout.

So Now What ?

Look for Cash Flow and Dividends Payout.

Dividend Payout Ratio - With a lower dividend payout ratio, Company A will have more Cash to reinvest in the business. However, do note is the business is worth the investing.

I mailed MIIF my queries during the recent major selldown and I was pleasantly surprised by the warm response by their VP with regards to my queries.

Just for sharing purposes with what I can still remember.

Macquarie bank bas 11% shareholding in MIIF and the directors in MIIF are all on contractual basis. Even if Macquarie Bank in Australia does collapse, MIIF is still independent on itself.

Last year, when the Script Option was announced, only about 20% of the shareholders took up script. That, being said, means that even with script offered, the dilution of current shareholders is not strong, rather, it is not much of a concern.

MIIF takes pride in distributing 100% of its net profit to shareholders and as the CP terms it, is to prevent laziness. With regards to not keeping profits for asset purchases. he gave the explanation that there is sufficient debt facility which MIIF has access to and the returns from the investments will more than enough repay the interests generated. Not forgetting the fact that MIIF has assets that has been set aside ready for sale to generate cashflow, if need be.

With regards to its last div payout, MIIF is generally in a good financial position, although it seems that they have declared above what profits that had been reported in 1H2008, which is not the case. From Jul to Aug, MIIF did received another cash inflow from its operations. As reported in 1H2008, revenue from its new acquistions will be reflected in the 3Q report.

Recent movements in share price could be due to speculations and hedge funds movements. Fundamentally, MIIF is still there same.

This is what I can remember of the conversation I had over the phone. I've have yet verified the statements nor am I going to do so. I've already lowered my average cost and looking forward to the 3Q report and the 2H2008, which will reflect their major movements this year.

Looking at the chart last Dec, it was still a $2.00 counter. Within the 9 months, it lost close to 80% in value. Is that something serious to be concerned about.

In TA, VALUE is not a concern. Fundamentally, it is not one counter I'll put my $ in for long term, time horizon 3 years and more. Not because it is a lousy company but I've not done any analysis fundamentally about it yet.

I'm personally vested last Friday and my opinions MIGHT be biased.

1. Not a strong cause to state when I say that there is a b/o but still it's near the gap price @ 0.67.

2. Check the trades done intra day on Friday and you have a reason to believe that there is accumulation on this counter, although there is strong selling. This is the same to GAR on Wednesday and Thursday when in 1 trade, 6m shares is done, sold down but the market absorbed it. When the selling is done and the accumulation is in process, it could mean some upward strength.

3. Not a frequent user of indicators, but MACD looks to converge and MFI looks good.

Unless I missed out something OR I am wrong in my analysis, do drop me a comment !! Thanks people.

After so many days and weeks of going down, STI and in fact global markets finally "see" some light. In fact, this rally that'd happen took me by surprise.

1. It happens just after America decides to bail out AIG.
2. 2 of the top Investment Banks in the world liquidated.
3. Top banks are still looking for solutions to prevent liquidation due to their credit issues.

The million dollar question, is this sustainable and will this spark another bull run. Personally, No.


The fundamental issues are still lingering and out world's financial big boss is really in some sort of debt concerns. Printing $ and absorbing bad debts is definitely not the long term solution, or am I missing some important knowledge here, if so please enlighten me.
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Technically, as seen, we finally saw HUGE buying up. It's a positive sign, finally but still we need to watch for the resistance level at about 2770, the small gap formed about a month ago.

From the RSI, STI has been in long oversold, but then again, this is no reason to assume that a rebound is at hand, then again, it's is just another indicator that a rally, big or small, COULD be here, it's just when.

Any other technical information can be intepreted from the chart posted.

This topic is on my mind for a period of time.

Why do people chase after IPO. I can never understand.
Doesn't chasing IPOs almost equates to gambling?

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Extracted from Wikipedia,

Initial Public Offering (IPO), also referred to simply as a "public offering", is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.

In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.

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I'd like to draw your attention to a few points.

1. First time.

Alright don't bother about First time. The point I'm trying to bring across is that, companies that are listed may not be companies of a rich history of proven growth. Neither are companies listed for the sole purpose to benefit the shareholders, the "outsiders". If nothing is proven, how can you access it's worth?

2. Seeking capital to expand

Is there a common belief that companies that gets itself listed is a good and profitable company? Didn't it occur to anyone that it is the company that NEEDS the capital, our $, to expand NOT that we need the company to grow our wealth. Is the difference clear enough?

Not forgetting the fact that the capital required is by no means a small amount. It is huge. So by linking the above point, a new company needing huge capital influx, doesn't it simply means that the shares that is offered to the public is not cheap, rather it should be valued at it's maximum already?

3. Underwriting fees

Okay! This is the obvious, no companies gets listed for free.

Well, I don't deny that there could be companies that is very stable getting listed, take MASTERCARD for example. I'm obviously not going into this aspect but the ones that no one hear of. Somewhere out there, some group of people decides to list in SGX and the hype starts all over again.

1. Read/Hear the news of a potential company dealing with oil, not heard of, getting listed.
2. Head towards the atm and subscribe for the shares, and hope.
3. If the subscription went through, celebrate. Else,luck's fault.
4. If @ opening it went higher, credit it to one's intelligence.
5. If @ opening it went lower, REMAIN HOPEFUL and wait for a rebound.
6. Lastly, blame the company but yourself.

There are over 500 companies listed on SGX with proven results and records, why one that is new and unheard of.

Chase IPOs? Think again.

Buying into MIIF is buying into fund more than a business. The primary reason for my inital purchase is for Div play at around 10% p.a.

A glance over the 1H2008 report, this is what I've gathered.

1. MIIF disposed off 4 Assets (namely DUET, MAP, MCG and MIC) that generate Distribution Income, Brussels Airport and TanQuid which contribute a inflow of $35 m in the same period last year.

I've asked the management on this issue and what I've been replied is that MIIF is focusing it's assets into the higher growth Asia region and thus acquired InfraVest, HNE and TBC. As stated, the current drop in revenue should not be of a major concern as yet, as the management states that payment from it's new acquistions are in arrears, which should be reflected in the 2H2008 report. We'll see.

2. SDS scheme that is available will dilute the current shareholders' holdings, but the management has replied that not everyone will take up the scheme and should not affect a great deal, but still 'll continue to remain cautious in this aspect in the long term.

3. By declaring a div of 4.25cents for 1H2008, 'm a satisfied man. Within my expectations.

So far, 'm quite alright with the long term prospects of this counter.

I bought this counter for div play! Let's see if the 1st half will disappoint.

I hope not.

'm quite "bored" reading books relating to investing and dug out this book which I bought at a discount some time back. It has been left lying there for like a good 1 year? ha!

This story has a pretty simple buildup yet a very mystical ending, which tries to drive the point to readers, to chase their dreams. A very simple read.

Flash back about 1 year ago, I picked up TA from an old friend of mine and got myself "addicted" to stocks and patterns. I went through charts after charts and entered my 1st trade. Since then, I've yet to stop or drop this "interest" of mine, but in fact ventured into FA and Business Analysis, the simplified version around March 08.

What then is chasing the dreams, for me? Don't fall into the trap which a lot of people is HOPING, the millions that the market holds or the overnight riches from a gap up. If one chases desperately for the material things in life, honestly he might have lived in vain as this world is but temporal and when time is up, we will have to leave everything behind.

So fellow traders/investors, don't just chase the $. It's important to lead a balanced life or rather a fulfilling life. Be contented.

At the end of the day, look at the bigger picture, how much do one actually need? Just a thought. Cheers.

** This book did not change my opinion towards my goals, but I just thought of a sharing it briefly through this entry.