Braveheart of Bursa Malaysia

Braveheart of Bursa Malaysia

Braveheart is a 1995 epic historical medieval war drama film directed by and starring Mel Gibson. Gibson portrays William Wallace, a 13th-century Scottish warrior who led the Scots in the First War of Scottish Independence against King Edward I of England.

The story is based on Blind Harry's epic poem The Actes and Deidis of the Illustre and Vallyeant Campioun Schir William Wallace and was adapted for the screen by Randall Wallace. It has been described as one of the most historically inaccurate modern films.

The film was nominated for ten Academy Awards at the 68th Academy Awards and won five: Best Picture, Best Makeup, Best Cinematography, Best Sound Editing, and Best Director.

I really like this movie and must have seen it several times. I like the fighting scenes and I like the bravery shown by William Wallace in inspiring the Scottish people to fight in that final dramatic battle against the superior undefeated English army.

In the current turbulence times at Bursa Malaysia where "red bloods" scenes are almost an every day affair, I am sure there are only few Bravehearts who would dare to pick up cheap fundamental shares to keep for the longer term.

But first, A true story about our own local Bravehearts. In the early part of 2008, my good friend, let us call him Braveheart seeked my advice about his decision to invest a 1,000 shares in Tenaga. At that time, Tenaga was traded at around RM6.50 to RM7.00. I shared with him my opinion but the final decision must come from him.

Braveheart went on to purchase at below RM7.00 and several months later sold at around RM8.50 plus level. Elated with his good profits within several months, he wanted to go for the next more expensive share, Public Bank at around RM9.00 level.

At RM9.00, the share price of Public Bank at that time was considered at its peak's high. But as good coverage and buys initiated by so many research houses were too much to resist at that time, Braveheart was brave enough to go ahead and became a 1,000 shareowners of Malaysia's bluest and most fundamental bank.

Braveheart's timing of purchasing Public Bank shares was just shortly before the beginning of early September 2008 when the US subprime mortage crisis reached a critical stage.

For the next several months and into 2009, the US subprime mortage crisis went on to snowball into the famous Global Financial Crisis of 2008-2009.

The whole world stock market plumented to unprecendental levels. Stock prices kept on falling. Those without fundamental and strong balance sheet and coupled with high debts fell faster than the speed of DC's famous comic hero, Flash.

If you were an investor at that time, you would have that wish that you had never touch the stock market and had contendedly kept your hard earned cash in bank earning paltry interest. At least you could sleep soundly at that time.

Those with strong balance sheet and with fundamental business such as Public Bank was also slowly and gradually declining in share price, day by day. Braveheart was worried by the days and the on-going turmoil that went on for several months affected him physically and mentally.

His daily life was not the same anymore. His daily work was also affected as he could not concentrate properly. Braveheart asked me again if holding on or selling at a loss was a better option. I shared with him my opinion that I would not know the future direction of the stock market, either it goes down or it goes up again.

But Braveheart was worried that his Public Bank share price would keep on declining further, possible from RM7 to RM6 and then to RM5 or keep on going down. If that happened, Braveheart would not be able to stomach such "colossal" loss as that money meant a lot to him. Worse, he would  be highly stressed for as long as that situation persisted.

Eventually, Braveheart decided enough is enough and sold his Public Bank shares at just the RM7 level to another investor (let us called him the New Braveheart).

Well, we shall never know what happened to this New Braveheart who bought this Public Bank share at just RM7. But if this New Braveheart had kept the shares until today, the New Braveheart would have reaped massive profits from his purchase - done at that very turbulence time when all shares were "offered" at a massive bargain by weak investors.

The REWARDS for this New Braveheart is if he had kept the shares until today is something like this ..... Dividends from 2010 until 2014 is a total of RM2560.00. There was a share dividend of 1 for 68 shares in 2010. In June 2014, there was a right issue of 1 for 10 at RM13.80.

The current share price of Public Bank is RM17.50 plus. Yet Public Bank touched a record high of RM21.60 this year.

Today, I am sure my good friend Braveheart must have rued his decision to let go of Public Bank share at times ....when everything seemed gone.

What can we learn

from this above story?

For one, when crisis happens, stock market prices tend to be affected. Weak shareholders would sell in droves after droves. Strong investors who can hold on for a longer time frame will try to bid at lower price. Hence, we see many good companies trading at a huge discount.

It is at this time that those with bravehearts would venture in to buy at bargain prices for some of the most fundamental companies with strong balance sheet and sound management and with a good dividend policy.

We should be the BRAVEHEARTS now with this oil plunging regime offering us opportunities to buy many good stocks trading at near 52-week low.

Only few months back, we would be dreaming to buy those good stocks as there were trading at 52-week high or near that.

As such, I am continuing to purchase more shares that trade near its 52-week low.

Buying 6,000 shares of

Century Logistics Holdings Berhad.

at RM0.64 on Jan 6, 2015.

Century Logistics Holdings Berhad is a Malaysia-based investment holding company. It operates in two divisions: total logistics services and procurement logistics services.

In oil and gas logistics, the Company provides floating storage and transshipment services for international oil trading companies. It also provides procurement logistics services to electrical and electronics customers.

The Company is involved in the supply chain management and ship husbandry for fuel oil traders, including the services for floating storage units (FSU) within the port limits of PTP and Pasir Gudang in Johor.

Century Logistics pays reasonable good dividends, normally an interim followed by a final dividend. Recently it paid out a 2 sen interim dividend on Dec 19, 2014. Let us hope that there will be a usual final dividend when it announces its 4th Qtr results on Feb 2015.

On Sep 23, Century undertook a Bonus Split of 1 : 2 and then a Bonus Issue of 1 : 2. On Oct 2, it closed at RM2.34 and the next day following the adjusted price, closed at 78 sen.

At the height of the oil crisis, it touched a low of 53 sen on Dec 16. So I am not exactly buying at the the 52 week low, but also not near its adjusted high of 78 sen.