TM- Timely Repurchase of Shares?

As expected after the ex date of the capital repayment of TM, the shares depreciated about 30 sen from the last close of 6.04 on 26 July 2012. In fact it went down lower than 30 sen to 5.65! I was watching the trend closely but could not really decide when to enter (secretly hoping it would go down lower still- Big deal!). My better half decided to repurchase his shares at 5.70 and I was still being smugly hesitant.

TM- the relentless rise post-capital repayment on 27 July 2012

The week went by and the buying volume gradually increased by the thousands. As usual I like to buy when everyone else seems to sell on late Friday afternoon but somehow people seemed to still keep buying the shares, erasing the usual pattern of lethargy in the market on Fridays. I was rather perplexed initially then it dawns upon me that this stock is not going to retreat despite the volatile financial situation at the global level. I went in to buy at 5.72 on 3 Aug and when wanting to buy additional shares, within minutes it went to 5.73 and my remisier advised me to stop and wait for a "better price" on a Friday? No, I told her firmly (no risk, no gain), please continue buying  at 5.73 and last Friday week, the closing price was 5.75.

And the price continued to rise even to 5.90 last week with the closing being 5.81 last Friday 10 Aug. And so the decision to buy at that price was kind of lucky I would say and not due to clever investing skill. It would have been wonderful had I decided to buy at 5.65! All the same, it was not a timely repurchase in the real sense of the word but it is when you note the sudden focused price uptrend at the point just after I repurchased the shares. I envy my better half's decisive timing though, buying at the bottom of the trough.

As usual, I will stick to Burton Makiel's ( Random Walk on Wall Street ) advice to buy and hold as I believe in TM's long term's prospects of giving high dividends to its investors and wait for another capital repayment exercise in 2015?

By the way, TM might just announce another dividend distribution later this month to be paid by September? I cannot wait for that pocket money.

MAXIS - Ananda, Market Reaction and Panic Selling

Regret and disappointment  were overwhelming when I read that Ananda Krishnan, the multi-billionaire major shareholder of MAXIS  suddenly sold a substantial number of shares of the telco below market price last week. Right after the news the share price depreciated fast down to 6.26. As most of us who read articles or books on investment would have known that when an owner of the company sells his shares, we should also follow suit. The logic is why should the owner of a supposedly profitable company dispose of his shares? Is the company heading for lower bottomlines? ( read profit/dividend).

When Uncle Ananda sneezes, we all catch a cold!

I bought the shares high at 6.385 in the middle of June 2012 and had witnessed the short rally when the price appreciated right to 6.92 in early July but did not sell as I was thinking of getting the high dividends declared every three months. I held on to the shares rather arrogantly.

I  noticed the nervous selling down  in the market of MAXIS shares following the news. I was also in the state of  apprehension myself and was thinking that I should cut my losses fast by selling at 6.37 last Friday 27 July 2012.

I asked my remisier to queue in the morning and it seemed nobody was buying. In the meantime, I read an online article on the subject and came to understand  that Ananda actually sold his shares to PNB and EPF. I felt relieved as I knew these mammoth institutions exist to make money for their members/investors and they are not likely to sell off the shares as the stock generates good dividends. By 2.30pm the same afternoon, I called up my remisier and asked whether she was able to sell my 50% shares and she replied in the negative. I told her immediately to cancel it while hoping that my decision and analysis of Ananda's action were correct.

And later, true enough the  shares began to recover and today the price has gone up to 6.57. Some people would have made quite a sum had they bought my shares at 6.37 last Friday!

Panic selling due to herd mentality is not abnormal in a stock market. People react to news, negative or positive to defend their positions. Individual investors are supposed to find out fast the reasons behind such action and analyse the information so that a decision made either to sell or to buy is based on rational analysis and not on emotion. But really, it is easier said than done and one can always be wise  after the event. In my case, I made the decision to withdraw the selling just in time.

I believe Ananda would not have done anything to destabilise his company. Moreover he only sold 5% of his holding of 70% and he has also just become one of the cornerstone shareholders of the third largest IPO in the world, the IHH! MAXIS shares appreciated from 5.39 early in the year to 6.92 middle of July so his selling them  at 6.21 to the "safest" institutions in Malaysia would have already made him enough money to fund his new business/ acquisitions including IHH.

By the way, have we ever heard that MAXIS's customers are dumping the telco? A big  "NO", so the generation of income will still give  a generous dividend of 32 sen annually ( provided past performance is sustainable).

Yes, I also initially reacted mindlessly to the news of Ananda's shares' disposal and nearly dumped  50% of my shares but by the stroke of luck, no small  investors could have foreseen the temporary hiccup in the market and so refused to touch those shares I had wanted to short!

Dividend Leader of the Pack

From now on, and for a period of  time, I will keep MAXIS shares for its high dividend-yielding nature.

AMB - Value Trust Fund is My Choice

My experience with mutual funds at the beginning of my investing adventure was not good at all. I remember losing so much on the funds that I purchased through a foreign bank. Among them were Amglobal Properties, Pacific GDP Momentum,CIMB Climate Change, Hwang DBS Select fund and the hopeless structured funds. Come to think of it, the bankers who sold these funds to customers really had no clue as to the funds' historical performance and the economic and financial circumstances in which they operate. They only know how to sell and get commission on top of it.

Before you jump up to defend the bankers by saying that every investment has risks and that I need to read the prospectuses before I invest, let me just tell you that many of us small investors just do not have the time to go through those thick books and what more many do not even understand the quality of risks and the terminologies used to describe them. All we want is to invest our money and get more out of them than mere low-interest saving (of course with no loss of sleep especially when your standard 60K saving is guaranteed by PIDM).

Nice to look, nicer to have

Yes, I do a lot of readings on investing and now have become a lot wiser. And so when my banker at a local bank introduced to me AMB value trust and with an explanation and description of the fund's sterling performance whose dividend rate was 10% last year, I was encouraged and decided to purchase it when there was a discount of 3.5% of the sales charge in May this year. I bought quite a substantial number of units at 0.5585.  And today I noted that the price had gone up to 0.5926 on 24 July 2012. My calculation shows that I have made a gain of about 3% in just two months. Well of course if you were lucky on the stock market, you could make a lot more than this but I am rather satisfied with the income generation as I have set a five-year period for this "low risk" investment.

Moreover, AMB Value Trust has been declared as the Best Equity Malaysia Fund in 2012 in the five-year category. Finding a gem among the multitude of funds available is not easy but I must say my confidence in mutual fund has been restored though I will definitely not going to put my money in just any fund now.

The dividend declaration for this fund is at the end of next month (August) and will be reinvested automatically. I hope it will continue to perform despite the global financial uncertainties due to the eurozone debt woes which never seems to end.

TM - Skipping the Capital Repayment 2012

Since the announcement of the proposal for TM capital repayment in June this year, I have already calculated what I would have earned should I choose to dump all the shares before ex-date on 27 July. In fact I noticed that the shares started to rally in late June following the mandatory parliamentary approval of the repayment and well before the formal announcement made by TM in early July.

The short rally where the share price went up to 6.33 was noted immediately following the official statement. The repayment of 30 sen a share is not at all attractive for me as I have accumulated the shares from May 2009 when prices were RM 2.62-3.14. In my posting in 2009 I was lamenting the drop in TM share price  wiping out the 98 sen per share capital repayment exactly three years back. My buy and hold strategy for this blue chip  really pays. I have also begun to "love" the shares, refusing to sell when it  started to appreciate in values and still continued buying when it was RM4.34 last November 2011.

It would be foolish of me to hold on to the shares just to get the capital repayment which only constitutes a small percentage of my gain. Knowing full well that the post-capital repayment price is going to drop at least by 30 sen a share, I decided to dispose of all my shares, realising my gain and waiting breathlessly to re-purchase them after the financial exercise.

My only regret last week was for not selling all those shares at 6.28! Instead I sold portions at various prices from 5.83 to 6.28 believing that the price would still rise (greed knows no bound) and today 24 July when the price started to slide downward due to current poor market sentiment that I came to my senses and sold the final portion at 6.13 per share. It is a typical investors' greedy behaviour, when prices are going up, they tend to hold on to the shares and when the price is spiralling downwards, they helter-skelter sell in panic. I would have made much more have I not been too greedy. Lessons which, sadly, I forever never seem to have learnt!

It is interesting to see how much TM share would cost on 27 July. How does one know whether it will be going up or down? I bet, as always, I will have some rationalisation of my action and be wise after the event. Historically following capital repayment, the share this time would be 30 sen less than the last day of trading before the ex-date, in this case would be around 5.85? Let us all wait and see.

The capital repayment would enable more people to buy the shares at a lower price.As TM is a telco, it is regarded as one of the defensive stocks in a volatile market and I certainly am not going to let the opportunity pass by. As I said in my posting in 2009, I believe in TM as a profitable company which yields high dividend for its investors. To me its share price appreciation is a real bonus and the current capital repayment is dispensable.

IPO- The Moneymaker ?

Like many other small investors, I used to think that an IPO (initial public offer) issued by a company is a way of making fast and easy money. In fact it used to be that about 10 years ago but somehow, lately I noticed that the valuation of IPOs has tended to be on the high side. Examples are PChem at 5.04, ARMADA at 3.60 and now FeldaGlobal at 4.60 and Gas Malaysia at 2.20.

I remember  Air Asia IPO was at 1.25 and so as ThPlant. These were affordable prices for  individual investors and as a result wealth was shared all around. Higher valuation gives the impression that the company is doing well and also extend more opportunity to institutional investors to get the shares.

Another consideration now in light of the Facebook IPO fiasco about 10 days ago, is the nonavailability of certain information regarding the company to retail investors who apply the IPO in good faith only to suffer losses as the price depreciated following the listing. Some people who are in the know stood to get a lot of money from this unlevel playing field. FB IPO lost some 18%  of its value by end of the week of its listing.

Facebook  IPO - The fumbled sale of the century (Getty Image)

The hype about this tech IPO was over the top. Everyone who intended to make money was almost sure that the listing was godsend. What they forget is to look at the fundamentals of the company and its business model.

Selling advertising space in FB used by some 900 mil  people, sounds very good but how much earning has the company achieved prior to it being made public? Sure FB Inc. made money but the people who put their money wishing for the share price to soar are sure disappointed this time.

Imagine FB Inc. was valued higher than SHELL which has tangible assets unlike the former . That in itself should have alerted some investors to rethink their intention.

So Facebook IPO is no moneymaker for small investors.

As I said before this very public fiasco, I had faith in IPO. I have applied so many and got some and not others. And I must admit I did make some money but with higher capital outlay like in the case of PChem. Now I am wishing I have not applied for Gas Malaysia IPO which closed on 25 May 2012. The valuation is made at 18 times its PE and it was pointed out on 27  May that the prospectus which I failed to read was rather vague on the financial performance of the company apart from being affiliated to big names like Petronas Gas. I am rather worried that much as I wanted to lessen my risks during these "unusually uncertain" times , I  still have a soft spot for IPOs. Emotion is not good in investing.

 I hope I am wrong about Gas Malaysia Bhd IPO.

As for FeldaGlobal IPO valuated at 4.60? I think I am going to give it a miss and buy the shares in the open market a few weeks after the company's listing.

Lipid Lowering Drugs: A Patient's Experience

Lipid lowering drugs (statins) have been vaunted as the "miracle" drug to reduce or prevent morbidities and mortalities due to heart attack. Experts quoted research findings testifying to that effect. But like any other drugs, statins have side-effects. The only difference is some patients suffer more than others. Another point worth mentioning is some patients accept the side-effects while others, perhaps too adversely affected might complain about them.

I have come across many patients with different behavioural responses to the medications prescribed to them. As I like to engage patients to talk about their health in relation to their medical conditions, I tend to get a lot of feedbacks from patients. I find these feedbacks valuable as they form a part of sharing of experiences which could help other patients who are less vocal or suffering in silence.

And so today I had one patient who came in without an appointment, insisting agitatedly to change one lipid lowering drug labelled S which she has been taking for the last four years with another labelled L.

Upon checking my medical notes, I actually changed the S statin to L statin four months ago when I discovered that her lipid was still elevated despite being on S for such a long time. However on her subsequent visit two months later I inadvertently reverted the statin prescription to S. After taking S for nearly a month she observed that her brain became "jammed" again, yes, that was how she described it. She felt she was more depressed and also forgetful. Her joints ached and she felt generally "down". she said her problems were greatly reduced ,in fact for the first time in many months, she felt much better when she was on L statin (for the two months she was on). She was adamant that she wanted it to be reverted to L. I happily obliged.

Well, I listen to my patient intently because she is the one taking the medication and she should know best what and how she feels while on the drugs. Compliant patients will report genuinely to enable us to individualise the medications and reduce adverse effects and consequently improve their quality of life.

In the meantime her lipid level is monitored every six months to observe the effects of the prescribed statin.

Statins are known to affect the muscle and some patients are affected more than others. While this is noted in the literature, large scale studies normally would not capture so called "isolated" observations. And there is always that possibility that pharmaceutical-sponsored research would somehow skip negative findings of the drug under trial. It may sound preposterous but it has been reported.

Taking cognizance of evidence-based medicine, medications are tailored to indicate the compliance with the standard practice. However anecdotal evidence needs to be looked at for optimisation of therapy for individual patients.

And you would not be able to optimise the treatment unless you engage your patients. Quite often patients complain that doctors do not talk enough to them or that they are scared to tell the doctors what they are experiencing. It is a tragedy for patients who are in this predicament, they see doctors regularly and yet are not able to express their  fear and anxiety. Try putting  yourself in their shoes.

For all doctors out there, do engage your patients because as the saying goes , we cannot always cure but we can always comfort. Addressing their fear and anxiety and listening to them is a major part of their therapy.

AMB Unit Trust at 3% sales charge till...

As a form of diversification I have decided to purchase some AMB (Amanah Mutual Berhad) unit trust. My banker at Maybank had tried to persuade me to buy these units since early last year (2011) but I was skeptical ( without even looking at the annual financial report!). I am more comfortable with the "regular" PNB unit trusts like AS1M,ASM,ASN3 and ASW.

Last week Agnes (the persistent banker) had texted me that AMB unit trust was selling at a discount of only 3% sales charge as opposed to the usual 6.5%. My interest was piqued. I started to look for the information on this unit trust and the prospectus and was encouraged to invest. In fact I truly regretted not investing in it much earlier Launched in 2003, this PNB-owned unit trust fund has been making impressive progress giving an upside of 167% over the period. Of course you will realise that past performance is not a guarantee of future income distribution ( as they always like to remind investors!).

I withdrew some of my saving last Thursday (11 May 2012) to purchase this Unit Trust and was looking for more fund before the deadline of the discount sales charge that is today 15 May 2012! Was counting myself lucky when I received a text from HSBC on Friday 12 May, that my BNM Bond (SSR) acquired in 2009 would mature on 14 May 2012, Monday. Gosh,the 50k capital "out of nowhere"! I was adamant all of it would go to AMB unit trust. So you could imagine my desperation to get back that money in time before 4pm on 15 May today.

I checked online for the credit  last evening , but still not in. This morning I enquired "left,right and centre" for the fund as it was going to be a last minute purchase kinda thing. The telebanker said it was BNM which was delaying the crediting and the HSBC branch manager was trying to influence us to buy their managed unit trusts by saying that they could also give us a 10% return to rival AMB and that past performance is not a guarantee...blah,blah......and at 4pm there was still no sign of my "money". I was disappointed to say the least.

And just now at about 9.30pm  (15 May 2012) when I checked online, there it was my 50k nicely nestled in  among the transactions. Well, I missed the discount and now hoping that the AMB unit trust price would fall following the Eurozone crisis with Greece possibly withdrawing from the Euro (or being ejected). I noticed today there is a broad selling down across the board at Bursa Malaysia in tandem with other regional markets.

As I am no longer risk-happy like I used to be, I am into unit trusts and let the fund managers deal with the market volatility. Luckily, I  managed to come out of the market just before the selldown, leaving only my telco stocks which are broadly defensive. Though AMB unit trust is an equity fund , I feel a lot safer to be in a group rather than on my own as I am looking for returns beyond five years of investment. Trading and speculation are out as far as I am concerned (for the time being :).... at least)

A discount of 3.5% is quite substantial if you were going to buy a lot of units. As usual one can never be lucky all the time and come to think of it, the process of fund acquisition in fact constitutes half the fun of investing,