Portfolio 28-Jan-2007

My portfolio total gain increase from 76.5% to 81.3% last week. Very much thanks to PBBANK jump from 7.90 to 8.55. At this moment i will not increase my portfolio except for BJTOTO but again is very much depend on how the market will perform next week. I must reckon that is very risky to put your bet right now but when there is an opportunity i will certainly seize it.

BJTOTO (1562, RM4.64) is worth for a quick trade

My guts feeling this stock is worth for a quick trade, it hasn't move any compare to others blue chip stocks. The upside looks very bright, even if it were to turn south, there is always a dividend to cushion which will be paying somewhere around in April. Worth for a try.

Look at the chart above, high was at $4.98 on 30 Nov 2006 and drifting down after that. At this price should be quite reasonable to enter/accumulate. I would adopt a hit & run approach to ride on this "bull", probably with a higher load this time round as i must agreed the greed has succumbed me right now...he..he

BJTOTO - Another Typical Example

Another typical example on BJTOTO :-

Buy Price : $3.90
Buy Date : 19 Dec 2003
Closed Price as at 27 Jan 2007 : $4.64

Dividend Payout Table :-


* Those highlighted yellow were Capital Repayment.

A) Share price appreciation = 4.64 - 3.90 = 0.74

$740.00

B) Dividend earned + Capital Repayment

$2074.05

C) % return per year

(A + B)/3900 * 100 = 72.15%
72.15% / 3 = 24.05%

Wah Oooo.... a 24.05% per year, what more do you want to ask for ?? Lets imagine this, if i spend $4 a week betting on 4-digits. One year i will be spending a total sum of $208 and losing it if luck was not on my site. What happen if i merely invest $4000 on BJTOTO and i got a return of 24% equivalent to $960 every year. Does this sound better to you ? This ensure you striking 4-digits every year. You risk your money betting on numbers, whereas I'm "betting" on company that invented the number games.......

Worth Keeping The Stock For Long Term ?

How would you get benefited by buying high dividend yielding stock and keeping it for long term?
Take a look of below live example:-

Stock Name : GUINNESS
Buy Price : $4.50
Buy Date : 20/10/2003
Closed Price As At 19/1/2007 : $6.10

Dividend Payout Table :-

a) Share price appreciation
6.1 – 4.5 = 1.6
$1600.00

b) Total dividend earned
$1094.40

c) % return per annum
(a + b) / 4500 X 100 = 59.88%
59.88% / 3 = 19.96%

Total return per annum is about 19.96%.

So, if you ask me. I would say is worth keeping it but please have the below considerations as your stock criteria before selecting one:-

1) Must be consistently giving out dividend

2) Dividend payout must be at least 5% and above

3) Financially & fundamentally must be solid

4) Have a strategy on the stock picked (e.g averaging downward)

5) Picked a stock that never die/insolvent

6) Last but not least. Do your homework

Portfolio 15-Jan-2007

Ummmm.. This is my first ever portfolio in my blog of year 2007. Finally, i decide to publish it. Some of the stocks I have been keeping it since year 2002. Take a look, will update from time to time whenever there is a movement. I will try to post a more complete one when i have more time to compile one.

Financial Savvy - Rule 72

Financial Savvy
1) Rule 72

Definition :-
A simple formula to calculate number of years required for your investment to be doubled.

Example :-
An investment of $1000 with a return of 10 % interest rate.

72
--- = 7.2 years
10

The above scenario requires 7.2 years to double up your investment.

Averaging your investment towards financial freedom

Step 1 - How to save money
(sources from : Rajen Devadason)
“If you want to save more, then having your bank transfer a portion – say, 10% or 20% of your salary to a savings account the moment it hits your main account, is a great way to put saving on autopilot”

Step 2 – Invest intelligently
Concept of investing – when come to investing, an arithmetic anomaly can be harnessed to help build huge wealth over a span of 10, 20, or more years. Often, though not always, the lower the price of a security goes, the safer it is and the greater its value as a potential long term investment.

Step 3 – Investment strategy - DCA
Should meet 6 criteria investment asset before a DCA program is embarked on :-
i) diligence
ii) value of the investment should fluctuate over time
iii) investment time frame should be fairly long. ( 5 to 7 years )
iv) invest at regular intervals (1 a month, 1 a quarter or 1 a year)
v) invest at each of those intervals in equal amount
vi) these regular investments should continue through all kind of market conditions – good, bad and indifferent

Example :-
Let’s say you have $6000 to invest. You have 3 choices :-
a) you do nothing significant & keep money in FD earning 4% a year.
b) You invest full sum into a unit trust or a security
c) You gradually invest $6000 for 12 months.
Conclusion :-

Choice a) $240 earned as interest.

Choice b) 6% earned base on the DCA table. An equivalent of $360.

Choice c),

How DCA works

Arithmetic average price = 5.72 / 12 = 0.4767 per unit
True average cost = 6000 / 12633.88 = 0.4749 per unit
Absolute profit = $695.96
Profit percentage gain = 11.6%

Remarks : I have personally tried this on one of the high dividend yielding stock “APOLLO” and it works. Of course the returns are never guaranteed. Nonetheless, I believe doing so could be the smartest resolution you make. The choice is yours. TQ