A manager who manage equity fund only can invest the money into equity, not bond or anything else which is bound by trustee and its objective. So can totally blame them since they have nothing to choose from.

The main issue why local equity fund mostly suffer losses because of poor performance of KLSE. Although CI manage to hit 1000 today but what is the meaning for the whole market? Nothing, even when CI reached 1000, the counters loss still more than gain one with 400 to 300 ratio.
Also with high management fee and entry fee, it left not much from unit trust holder to gain. eg. a fund manage to make profit of 10%, sound quite good, but after deduct the entry fee of 5% and 1.5% management fee, it left 3.5% for the unit trust holder only. Still think the charges or fee are quite expensive in Malaysia.

The index can go up is much due to some push up by EPF and PNB with few selective buying which can be done easily since liquidity are low as well as volume so a few ten million of buying will easily push the index up few point which is peanut for EPF board or PNB who manage asset of billion. While other than index link heavy weight still like dead and buried state.

The scenario is like they are having large chunks of share in those heavy weight like TNB, MISC, Maybank so push up these stock will make them good profit on paper as well as having good report card so pushing up these stock won't do any harm. That's why you see the index keep on climbing although without much participant from foreign fund.

A lot of listed company are already become GLCs, it is almost impossible to find a heavyweight in the market that EPF or gov investment arm don't have more than 20-30% of share of it.


This post has been edited by cherroy: Nov 3 2006, 06:32 PM

It is quite true also, you can have tons of theory behind you but can't match a few real experience.

Another important factor of investment is timing. Although a property or a stock has good return rate, a better timing of buying with easily maximise your return rate.

Just for example, as Dreamer said, PBB offer good dividen yield while stock is pretty stable to the upside so average return rate is about 7-10% (dividen + appreciation of share price) based on RM6.80 calculation.
But a better timing buying during 98 (once I bought) is 0.88 cents only! So you make RM6 with Rm0.88 capital only in 8 years time which bring you about 600% capital gain turn out to be 75% per annum (not yet calculated the dividen gave out every year).

It sound extreme because of financial crisis during that year which make the share price plunged but what I stressed is timing is also an important factor that will maximise your investment return rate. Economy has cyclical characteristic, so it is important to look for bottom before making investment accordingly. Although bottom is difficult to be certain but at least don't buy or invest when something is already sky high.

sorry about the calculation, I don't look into it since I just simplified it since the what I stressed at that statement is that the importance of timing besides other factors.
I just simplified with Rm6.80-Rm0.88 = RM6 gain in 8 years and RM6/0.88 = 680% gain in 8 years, I know the calculation is flaw, just simply gave 75% which, since I am not using any calculator to calculate it, just a simple mind thought of it. with simple annual rate.
I know it is wrong but the calculation part is not my statement intention.

Sorry about the misleading part.

This post has been edited by cherroy: Nov 7 2006, 06:33 PM

I think sometimes we got reason to sell :

1. Company profit will decline due to deterioration of economy situation, hence low profit -> low dividen.

2. Interest rate will go up, which is related to No.3 below.

3. share price is unreasonable price or price is expensive based on forward PE ratio. Eg. if interest rate is 5% so theorectically forward PE shouldn't be more than 20 since PE ratio of 20 is also about simple 5% return rate. What for you invest in share which give you the same return rate as FD. Forward PE is more accurate to measure, not current PE.

4. Poor prospect or management change (from good to bad)

5. Also, dividen yield must be based on profit earned, special dividen can't be reliable since it is one off which used company acculumated profit to give out. Eg. Pos Holding recent declare special dividen Rm1.++ which is one off.

Share price won't forever go up or go down. If economy situation or share market has peak that better sell it first and taking its profit. After all, like everybody said, it is still a paper profit untill you sell it.

Several criteria are the key in analyst a company for share trading purposes, generalise only.

1. Its management
2. Earning aka PE ratio (forward PE)
3. Asset or NTA of the company, some company did hold a lot of assets which is undervalued in paper (like KLK)
4. Prospect of the company especially its core business
5. Dividen yield
6. Liquidity of the share
7. Healthy cash flow, a company may earn/profit a lot but huge and pro0longed negative cashflow will bring down the company also, the better exmple is TNB, profit a lot but facing serious cashflow problem.

A share is active or not is less important since if you are talking of investment rather than speculative, the trading volume won't be so important unless you buy a lot. Some quality counters only trade a few each day but bare in mind if the liquidity is poor, it is easy to be manipulated, also can't attract fund to buy it.

This post has been edited by cherroy: Nov 10 2006, 01:13 PM

Above mentioned are quite good company also but one need to mention is Bjtoto although giving out high dividen yield, its management previously has previous bad track of record using bjtoto's huge cash flow to financial its parent company debt through inter-company loan while Bj-toto get none from interest from it. (if not mistaken in the range of RM800mil). Although it is not against law but is totally unfair to the minority shareholders.

Bj-toto now basically is a 'empty' company after 2 round of capital repayment but fortunately its business nature generate huge pile of cash every year which support its high dividen.

lol, somebody come here to promote mlm again.

If someone really want to classify the MLM as investment, no problem for me (although personally I don't but rather a modified pyramid scheme, MLMers will flame me on this. Especially those concentrate on charging joining fee rather than product itself that serve no purpose to the social economy)
However, some MLM business model may exceptional that come with good product and offering good business. I don't say MLM is totally evil since sometimes there is no clear boundary between MLM business and conventional business.

But one thing for sure, MLM is not a risk free investment as claimed rather it is a pretty high risk investment if you stay at lower end of the 'pyramid'. Basically it just like top end feed on the bottom end. So it you at the top then definitely you can get rich fast but majority will be stuck at the bottom.

Haven't start or build the career, already think of retirement only sum up those MLMers want to make rich fast but lazy to work.

Genuine successful and rich people won't ever think of retirement even they already have billion of assets. They still work like everyone else. If every rich people also think like this, how can a society progress, already have money then don't need to work anymore.

Sometimes, just can't stand the word from MLMers, financial freedom, time freedom, only MLM is the best, besides MLMers, others are just a bunch of dumb people don't know how to make money.

This post has been edited by cherroy: Dec 5 2006, 04:49 PM

Talking like this mean that, he/she has no idea of what mean for investment and risk behind. Every investment has its risk, high or low only. Even you own a property and rent it out, you still carrying the risk, not risk free as claimed.
Eg.
Unable to collect the rental (not that unusual)
House being destroyed by disaster.
Property depreciation, although not that common but it did actually happens especially during recession or wrong strategic location.

Dreamer,
That's why I said it is not that unusual, quite common actually.
So think twice before investing in property just for the sake of rental collection, sometimes, it is also problematic if you are unlucky to meet those 'rude' tenants, there are a few case, although not many, some rude tenants refuse to move out even not paying the rental. There are several cases, police has to involve in it. Sometimes, depends on luck also if you can meet some nice tenants pay for promptly while keep your house/shop in good shape.

Remember, sometimes rental also not enough to cover the housing loan. So make your calculation right before investing. Purely heard people said buying houses or shoplots surely make money is not 100% true.

Haiyo, BNM has come out the statement months ago there is no such thing called swisscash UT and the Swiss Embassy has publicly denied anything to do with their country as well. It is a well constructed scam or pyramid.

Whenever something that too good to be true, better double check. If the return is so great, EPF board and all the funds in this world might as well dissolved and invest all the money into it.

Reit generally generated about 6-7% yield but due to infavourable tax structured on the income distribution, it is not that popular here. (local being taxed at 15% while foreigner 20%).

So if a reit yield 6% but after tax left only 5.1% which is only slightly above FD rate, that's why reit is not so attractive here. Overseas like Singapore, the reit income is tax free (for 5 years or something like that,not sure) while others also being taxed at a much lower rate.
That's also why most of the reit traded at below IPO offer price due to lack of interest especially from foreign investors.

If gov gave tax exemption on reit, definitely this industry will have much better future.

This post has been edited by cherroy: Dec 15 2006, 08:51 AM

Not necessary when you see the on the foreign fund perspective especially those so called emerging fund that invested in those developing country like Thailand, Malaysia, India etc.
Foreign fund has plenty of choice, if that region is not favourable, they might as well pull the fund together go to elsewhere like India,, Brazil or Scandinavia country which is more exciting, not necessary Malaysia.
Also, Malaysia has a bad track record of sudden capital control also, while rules and regulation keep on changing which most foreign investors are more afraid of. While Singapore is more likely to benefit from the Thailand issue since they are well know to have most liberal and stable regulations among the region.

I don't quite agree as reported by newspapers that those hit by currency crisis like Thailand and Malaysia (S. Korea is a exceptional) has recovered and stronger now and can withstand another crisis. Yes, trade and financial situation is improving from last time, no doubt, much better than last time but not as strong as reported.
Still those country rely heavily on lower currency rate to boost export which eventually push start the GDP growth while domestic consumption is still relatively weak. If not the export growth, their economy might still at stagnant stage.

When you invested the money, the money is with Trustee aka in trust account that maintained/controlled by trustee. All asset, invested money in the form of shares, properties etc is on trustee name.
The money is not with fund manager or director of fund.