Any good stock to buy?

Any good stock to buy?

The most common question usually being asked amongst retailers when they meet with others "kaki" retailers or someone from the stock broking firms is always this simple one: Any good stock to buy?

After all, we ask with some hope that perhaps that person may be able to provide us with the next mini Nestle or Public Bank stocks. Honestly if one is to ask this question to our Malaysian's stock "guru" of Capital Dynamics Asset Management Sdn Bhd Managing Director, Tan Teng Boo, and if  Tan is kind enough to say this to you, "Buy Company ABC". Chances are you will go and buy this stock called Company ABC.

Why? Because the reputation of Mr Tan Teng Boo is awesome enough to convince us to act based on his recommendation.

But if someone is to ask Kassim this question, I am sorry to say I have none. Why? In my many years of trading experience, I have always been asked this question from time to time by many of my close and good friends. And based on my feedbacks from them, only about less than 10% actually took some actions to purchase based on my sharing of ideas in investing (I wouldn't say it as a recommendation from me).

Followers with different thoughts

Even then, this less than 10% group of followers (I think "followers"  sound a better word) also consisted of several different kinds of followers with different thoughts. There was this lady follower who followed me, but she would wait until the recommended share's price has dropped to below my buying price. She reckoned that if she is able to buy lower than me, she is already safer in the first place! True enough, many times I bought some shares, the price will move down below my original price giving her a golden opportunity to buy at lower price!

Then there was this young male follower who would also try to use this practise. At least that was his theory. But in practise, it was the other way round! Several years back when TSM Global Berhad's shares price was at its peak (at that time) at RM2.15 plus, I was just starting to invest in it. I shared with him about my investment in TSM. But he said he could wait and would monitor the share price first and only start to buy at the RM2.00 levels. TSM fell down to RM1.95 and I continued to buy more.

But this follower did not buy at RM2.00 levels or below. He set a new buying target, that was RM1.80. Guess what? TSM recovered and went on to reach a new high of RM4.00. Did my friend buy any TSM shares? He did! He bought at the RM2.60 levels!

See, he would dare to buy at higher price, but would not dare to buy when it was trading at lower price. Well, to end this TSM issues, both of us sold at just above RM3.10 levels. We had a good laugh together when we talk about this. I am sure he would be grinning a smile when he reads this. Because he knows who I am referring to.

Another good follower who is an Indian who was retiring at that time came to see me. He said he has some spare cash (about RM10,000 plus) to invest. He asked if I could recommend him one counter which is not in debt, cash rich, pays dividends and in a steady business. I showed the sms message which my remisier sent to me. The details of the sms message was the numbers of TSM shares I bought and the amount due.

Isn't this proof enough to him that I wasn't just recommending to him any "Tom, Dick or Harry "stock? I was recommending him to this TSM Global shares which I had just committed ahead by investing a handful lots. Again, I shared with him that I would not recommend him any stock that I was not a shareholder of it.

I had to be in the firing line first! No question about it. Years later when we caught up again, I asked him if he had invested in TSM shares. The answer was no. The reasons for not investing in TSM were countless. I did not bother to ask also. But he was shocked when I told him that I sold off the shares for a five figure profits after holding the stock for more than a year. (Well, hopefully, I will be able to write about my lucky investment in TSM Global Berhad in my future blog. I am still "bitter" that TSM Global Bhd had agreed to the proposed takeover offer for its shares at RM1.25 a share from West River Capital Sdn Bhd (WRC) and the joint offerors, which hold a 28.07% stake in 2012).

My blog "Kassimsthoughts.blogspot.com" was set up in the first place with my intention to share about my involvement in the stock market. That is why I prefer to share my views on stocks which I have at least some interest or stakes in it. This way, I would be more committed to share my thoughts and views.

So to Mr Stanley Teo

who posted this to me on Nov 14, 2013.

Thank you so much for enjoying my blog and respect me for walking the talk. As for recommending you some undervalued stocks, I really do not have at the moment others than what I had bought and shared it on my blog.

Buying more shares of "Slow and Steady" Mercury Industries Berhad

Mercury Industries Berhad, as predictably posted a 3rd Qtr results that was very much expected recently. Mercury announced an earnings per share of 4.08sen which was 30% higher than the corresponding period of 2012. Latest cumulatively period of nine months is 12.4sen which is 5.7% higher than the corresponding period.  

Once again in an annualised basis, the earnings per share would be 16.5sen for financial year 2013. Based on the last three years' dividend record of 8sen each year, a 8sen dividend for 2013 (dividend announcement usually is on May) seems a highly probably happening.

I am also most aware that a stock with predictably boring earnings would not appear attractive to those seeking quick and fast gains or with high earnings growth story. Stock such as Mercury would perhaps be termed as another type of investment such as a "unit trust stock". We all know that when we invest in unit trust, we do not see our investment grow immediately. Only in the later years are we able to see the difference similar to investing in unit trust.

That is why I am very comfortable with my investment in Mercury. On one hand, there is the 8sen dividend per share to look forward  to (which I believe is payable some six to seven months away only) and yet the company is able to save another 8sen in its growing kitty.

As such, I have decided to increase my investment in Mercury by buying more shares. The writer bought an additional 5,000 shares at RM1.25 on Dec 3, 2013, thus bringing his total investment to 31,500 shares. That was the only 5,000 shares traded on that day.

The closing price of Mercury was at RM1.27 on Dec 11. The price was just 2sen higher than my latest additional purchase price. As a matter of fact, the price was traded at  between RM1.20 to RM1.27 prior to the closing date on Dec 11, proving once again that what ever price I bought, there is always the very high probability of the price going lower at a later stage. But as I have always share, you need to be brave to invest more when your conviction told you so.

So once again, Kassim is walking the talk.

Mr Stanley Teo, would you dare to join me?

Ajinomoto (M) Berhad

Dear Mr Sim who asked if I have any comment for this stock?

A kind Mr CMH replied : Cash rich share

By the time this blog go for posting, Ajinomoto's share has risen to a 52-week high of  RM5.15 from a 52-week low of RM4.16. Ajinomoto closed at RM5.02 on Dec 11. Good for you Sim if you have bought it earlier.