Friday, October 24, 2014

Power of Motivation



Power of Motivation

Recently I discovered that a SYT (sweet young thing - but this SYT is not a thing, but a young sweet lady) who is actively posting meaningful, inspiring, thoughtful and motivating notes on her facebook. And she does it happily from time to time. At first Kassim did not pay much attention to her postings, but as Kassim begins to know her, Kassim begins to appreciate her kind efforts to share all those good notes on her facebook. (Above is one of the samples from her)

Some of her notes are very motivating ones. Some will make you pause for a moment to reflect of the meaning of the notes. Although we could source all these from various websites, (I know most of us would be too lazy to do that), we tend to get on with our lives on a regular daily routine without a thought for some reflection. It is only when we notice certain eye-catching Motivating notes that inspire us or remind us of our wonderful lifes that we have.

So each time you come across a motivating notes anywhere, be grateful and thankful of that person(s) who take the unselfish step to put up the notes. A big syabas to them! Keep up the good work!

A personal thank you to this SYT too! I know she will be reading this post and I told her that one good turn deserves another. In this instance, my expression of appreciation of her effort, hopefully will motivate her to continue with her good efforts. (See, sometimes the motivator needs to be motivated by another motivator!)  Is Kassim confusing you? Ha ha. Share with you one more tip. This SYT has unforgettable deep dimples when she flashes her golden smiles!

Motivation can come in various forms. Kassim remembered when he ran his first Mas International Marathon in Penang in 1993. As Kassim had only been able to finish a half marathon in 2.30 hours, the confidence and strong will to finish the full marathon within the 6 hours stipulated time needed extra motivation to finish the race.

So what did Kassim do to motivate himself to finish the full marathon race? Kassim printed out an A3 size paper with just 3 words : I DID IT! The idea was to imagine and vision the finishing scene as Kassim is crossing the finishing lines and taking out the folded A3 size paper and show it to the waiting crowd, including his then little boy, spouse and several good friends that he had done it.

Did Kassim finish the race? Yes, such was the motivating factor during the race as Kassim was struggling all the way after the half way mark. Kassim eventually finished the race with just one minute to spare.

Motivation can also has an effect when it comes to investing. If a top fund manager or let us say a fund managed by Warren Buffet starts buying one local company listed in Malaysia, it is very safe to presume that many of us would be jumping into the wagon to join in the buying frenzy and thus sending the stock price north sharply.

Similarly when a few top fund managers or a few big well known fund start to sell, many of us are likely to follow them, again resulting in a sea of red.


Selling by two directors of MFCB

Recently there was a report released by  PublicInvest Research posted on Sep 30, 2014 featuring Mega First Corporation Berhad (MFCB). It initiated coverage with an Outperform call and SOP-derived  fully  diluted  target  price  of  RM3.85. 

The various reasons given were really very "motivating" factors for many readers which prompted heavy demand for MFCB's shares the moment trading started that morning. The share price went to touch a more than decade high of RM2.77 before settling down at RM2.66 on heavy volume of 4,913,100 shares.

Unfortunately, on that very day, one of its directors disposed off 60,000 shares at RM2.67 in the open market. Then on Oct 2, an announcement from MFCB reported that another director disposed 50,000 shares on Sep 29 and again another 35,000 shares on Sep 30.

Such prior and post disposal of shares by the two directors at such a short time during PublicInvest Research's report confused and rocked investors' confidence deeply. Why? If directors who hold sizable stakes in their own company sells the shares, especially when the company has been given an excellent coverage by a reputable research house, who would investors trust?

Kassim would definitely be very confused and lost. While it is the rights of anyone or investors of any company to buy and sell shares of any company, it is definitely different when it involved those directors - whom investors trust them to lead and run the company in a profitable manner.

Directors should be very mindful of their timing to sell as this will send out a very different kind of signal to investors. Perhaps the time to sell their shares would be when the company's share price are trading and consolidating at a tight range and with no research's house coverage at that time.

That is why Kassim always like those major shareholders/directors/founders of companies who are very committed in running their ships. They do not get involve in selling, instead they implement share buy backs from time to time, thus reducing the number of shares left in the open market.

Ironically, MFCB has been very actively purchasing its shares back from the open market. There are 20,488,500 shares cumulative net outstanding treasury shares as at Aug 27, 2014.


Kassim's responsibility as a blogger

As a blogger myself, I am also very mindful about the thoughts of my readers, followers and  close friends who are investors. I know some of you would have read my postings and possible be influenced or motivated by my postings to buy certain stocks which I shared.

That is why I am particularly carefully of the timing of my posting which involve the selling and purchasing of stocks related. I would rather share my posting immediately or soon as possible the moment I bought certain stocks. I do not want to be accused of "accumulating" first in a comfortable way and then releasing my posting "promoting" that particular stocks, hoping others would join in to buy and push up the share price higher.

Imagine I had been inviting readers to join me to invest in Mercury Industries Berhad for the long term. Then two weeks later, I post to inform about my entire disposal of Mercury. And it so happen after my disposal, Mercury shares came down. How would you (as my followers or my readers) feel? Especially when you are still holding on to Mercury shares?

Would you ever trust me again? See, my responsibility as a blogger is more than you, readers and followers and friends. You can sell and buy quietly without anyone knowing, but I can't.


An email from Pn Lee Bee Swan

Pn Lee expressed her joys of being able to purchase 1000 shares of Harrisons Holdings Berhad at RM3.41 on Oct 14, 2014. She asked if it is still a buy at RM3.79 (on Oct 23) and what are the other undervalued counters. She would like to invest in Mercury Industries Bhd but at what price?

First, I would not know how the price direction of Harrisons is going to perform in the future. If the performance is good, it would reflect in the share price. The recent "mini-correction" of the global stock market also hit many counters on Bursa Malaysia. Many counters became attractive and "undervalued" overnight.  But which one is more undervalued and offer higher opportunity for faster chances of share price rebounding?

Mercury's last traded price is RM1.37 on Oct 24, 2014. My last purchase of Mercury shares was at RM1.59 for 4,500 shares on June 2. Although my purchase qualified for the 10 sen dividend paid recently, theretically I am still staring at a paper loss if compared to the current price of RM1.37.

Yet I am not bothered at the slightest. Unless Mercury's earnings shrink in the future, that would be a different story. But if Mercury's earnings improve or at least maintain the 16 sen earning annually, than the current price is definitely a steal due to the depressed market sentiment.

So Pn Lee, shall I welcome you to join Kassim to be the owner of Mercury?

Tuesday, October 14, 2014

Star's strange decision - paying more dividends than it earned



Star's strange decision
than it earned


According to my good friend working at The Star, he told me that the company recently celebrated its 43rd Anniversary celebration in September. Ever since the company announced a one month ex-gratia bonus on its birthday celebration bash more than a decade ago, it has always maintained that bonus payment on its every birthday. As a matter of fact, it has became a norm among staff that a one month ex-gratia bonus is always there when Star celebrates its' birthday celebration.

This time, my friend did not really enjoy the food dished out on the celebration day. Why? Well, all good times must come to an end, sometimes. For the first time, Star did not make any announcement of a one month ex-gratia bonus payment on that day and up to today, at time of posting. Most staff were quite shocked and disappointed. This must be the first time the celebration's "buffet spread" was not really an enjoyable one.

Days before the birthday celebration, management had taken the trouble to address the staff about the company's drastic cost-saving initiatives. Various measures were being implemented such as scaling down its Sarawak operation, staff VSS, eliminated a top management post, considering using thinner 42gsm newsprint (vs. 45gsm currently) to lift yield per ton by 5-6%.

It is believed that Star has also ceased publishing its business Shanghai and entertainment magazine Faces.

Another reliable source told me that Star has also not send its non-sales support advertising team for its bi-annual team building seminar due this year. The last one was held in Bukit Gambang, Pahang in 2012.

With so many initiatives and measures to cut cost, employees would be very much in a position to understand and support the company's moves.

But Star's decision to pay a nine sen dividend for its 1st Half Year's earnings is rather strange. Star only managed to earn an earning per share of 7.54 sen. Isn't it better to pay out a maximum dividend of 7.54 sen or less to its shareholders if the company is in the drive to cut cost? We all know that in the financial world of survival, do not spend more than you can earn and you will be quite all right, at least. 

Shareholders would happily accept even if a dividend of 7.54 sen or less is given. But Star is paying out more than it earned. So the extra money must come out from its coffers. Why pay extra to its shareholders?

To calculate how much Star is paying out, I am using simple calculation of 9 sen dividend minus 7.54 sen earned for the first half 2014, there is a extra of 1.46 sen or RM14.60 to be paid out to per share. Mutiply this RM14.60 by 738,563,602 shares and the amount is a whopping RM10.7 million plus!

This whopping RM10.7 million plus if divided equally amongst its 1500 employees (a rough guess) comes to a RM7,000.00 plus per employee! Imagine how happy employees would be if this windfall is given to them instead of the shareholders. Motivation to help and go in line with the company's objectives would be strongly supported by its employees!

However, it is the shareholders that would be pleased to receive this "additional" amount of dividend particularly those several major shareholders. Imagine if you own 51 per cent, there is an extra of RM5 miliion in dividends! How useful in this times when prices of everything is up except the stock market!

On one hand, the company tried to share its cost-cutting initiatives with its loyal employees, on the other hand, it paid out more money to its shareholders than it earned. See, talking the walk and walking the talk are seriously hard to understand.

This led me to ask this question : Is Star interested in taking care of its shareholders rather than its employees?

How would you feel if you are an employee of The Star?

How would you feel if you happen to be an employee and as well a shareholder of the company? My dear friend happens to be an employee and a shareholder as well. This time, he can't really have the best of both worlds.
As Deepavali is around the corner, Kassim takes the opportunity to wish all Hindus a Happy Deepavali Day.

I hope to make this occasion a very joyous one with this message taken from the internet.

May This Diwali be as bright as ever.
May this Diwali bring joy, health and wealth to you.
May the festival of lights brighten up you and your near and dear ones lives.
 May this Diwali bring in u the most brightest and choicest happiness
 and love    you have ever Wished for.
 May this Diwali bring you the utmost in peace and prosperity.
 May lights triumph over darkness.
 May peace transcend the earth.
 May the spirit of light illuminate the world.
 May the light that we celebrate at Diwali show us the way
 and lead us together  on the path of peace and social harmony

 WISH U A VERY HAPPY DIWALI