Blue Chip Stocks on Bursa Malaysia

Blue Chip Stocks on Bursa Malaysia

The Biggest Companies in Malaysia

As at 31-Aug-07, the Top 5 companies in Malaysia by Market Capitalization are:-

Malayan Banking Berhad (RM45.1 billion)
Tenaga Nasional Berhad (RM43.1 billion)
Commerce Asset Holdings Berhad (RM36.7 billion)
MISC (RM35.3 billion)
Telekom Malaysia Berhad (RM33.3 billion)

I maintain an updated list of the Top Malaysian Companies here:

http://www.light.com.my/list.php

As you can see, our companies are peanuts in size compared with the top US companies such as GE, Exxon, Microsoft etc.But it is noteworthy that we have come a long way since the 1997 - 98 crash when our financial system all but disappeared. From memory, the market cap of Malayan Banking (or Maybank as it is affectionately known here) was less than RM5.0 billion at its bottom.

source: http://www.squidoo.com/larrylam

International mutual funds investment

International mutual funds invest in markets outside of the United States and across the globe.

These funds can be good for diversifying and adding balance to a portfolio. Generally, international funds are more volatile than their domestic counterparts. However, the rewards of investing in foreign markets can be many, allowing investors to fatten their wallets with more than just local opportunities.

1. Understand the difference between international funds and global funds. International funds typically focus on investing outside the United States; global funds invest both inside and outside of the United States.

2. Recognize that investing in international mutual funds provides a way of breaking into foreign markets without the risks brought on by investing with little applicable knowledge. Professional mutual fund managers bring experience and in-depth research to the table, boosting your chances of profiting from your investment.

3. Carefully evaluate the level of risk you can take and your investment time horizon.

4. Determine the portion of your assets you can afford to invest in international mutual funds.

5. Understand that international mutual funds may invest in stocks and/or bonds from markets around the world. An international fund may focus on a particular market or a combination of markets.

6. Recognize that you may need to sit out some rough times in order to realize an international fund’s full potential.

7. Consider the fact that international funds may help you to lower your overall investment risk. As the world’s markets do not move exactly in tune with each other, you could capitalize on a thriving market in one region, even while trouble brews in another country.

8. Research and compare international mutual funds online, using MorningStar.com.

9. Visit the websites of the funds that interest you and request or download prospectuses.

10. Contact a financial adviser to discuss the portion of your portfolio best allocated to international mutual funds. With the adviser’s help, invest in the mutual funds best suited to your goals, risk tolerance and time horizon.'

By Ada Denis
sourced:http://www.articalworld.com/2008/12/how-to-invest-in-international-mutual-funds/

Tokyo Property Market Best for Investment in 2009

Tokyo has replaced Shanghai as the best property market, according to the latest survey by the Urban Land Institute and PriceWaterhouseCoopers.

Tokyo is the best Asian city to buy real estate as it is regarded as less risky than other locations around the world, according to a new report.

The Japanese capital city has overtaken Shanghai in the survey by the Urban Land Institute and PricewaterhouseCoopers.

It is regarded as having the best prospects for 2009 and the lowest risk of the 20 locations covered in the survey of global investors, property developers and brokers.

Singapore is in second place and Hong Kong is third, according to the ULI, a Washington-based research firm, and New York-based accounting firm PricewaterhouseCoopers.

Property values are tumbling around the globe but in Asia the markets with the strongest economies and highest levels of liquidity will be most attractive to investors in the coming 12 months.

Property investors will still be interested in price but they are also expected to put quality as an equally important pointer for decision making, according to Stephen Blank, a principal researcher at the ULI.

"Tokyo is a weaker market than last year, but clearly stronger than other global financial centres," the report says.

"Financing will be the single biggest issue facing the industry in 2009," Blank said.

Ho Chi Minh City was ranked the best market for office properties, followed by Tokyo, Mumbai, Shanghai and Bangalore. Vietnam's former capital city was also rated on top for retail and apartment residential property, the study showed.

This article has been reposted from PropertyWire. View the article on PropertyWire's international real estate news website here. (www.propertywire.com)

A lesson from Warren Buffet

The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Source: http://www.pakdi.net/biz/buy-american-i-am/

Gold Price Increase Due to Inflation?

It's a good thing people do not know what causes rising prices (which they think is inflation) and crashing economies, or they would be really ticked off, or having a revolution in the streets the next day. The cause is too much creation of what they call "money". Artificial demand for real goods and services is caused be artificially creating to much credit, which when accepted, is debt.
Instead of the demand for real economic goods and services coming from the creation, and then spending, of real wealth, it comes from the creation of credit and debt that was not earned because it will not be paid back because there is not enough creation of real wealth to support the future payment of the debt. Debt default causes economic contractions.

Keep an eye out for the amount of debt relative to the amount of wealth. Ratios count, a lot! Also whether the ratio is changing, and if so, which side(s) of the ratio is changing and by how much. There are constants in life, but not many; so are there trends. There are plenty of trends that make huge differences that need watching.

If debt keeps increasing while real wealth creation does not keep pace, or stops, or declines, some kind of economic and financial adjustment has to take place. After all, how long will a debtor be allowed to keep taking on debt when it becomes obvious that the debtor is not doing enough, nor will the debtor be able to in the future, to make the future payments on the debt.
It works the same for individuals, towns, companies, cities and national governments.
The "money" monster is stalking the world.

From the Fed's third quarter "Flow of Funds" report:

Total US credit growth expanded at an annualized $4.99 trillion.

To give that number some perspective, the US has an annualized GDP of about $14 trillion. That means that about 36% of GDP was borrowed. It was not necessarily due to the creation of real wealth, real goods and services.

Imagine what all those dollars are ultimately going to do to the prices of real goods and services; real goods and services becoming scarcer relative to the number of dollars chasing real goods and services.

If someone borrows "money" from a bank, the bank takes that person's I.O.U. and puts it on its books as an asset because, to the bank, it is. If that person takes that "money" and buys debt in the debt market, no real wealth was created. Yet all other things being equal, GDP increases because of those exchanges of "money". A GDP number means a lot less than most people think.
An increasing GDP number can mean that a nation is increasing it total real wealth. It can also mean that it is actully consuming/spending its real wealth, becoming less wealthy. One has to look under the hood, dig into the details, other fundamentals, to know.

By the way, when the bank puts that I.O.U. on its books as an asset, that action increases its reserves. Therefore, since its reserves increased, it is allowed to create more dollars, out of thin air, necessary to make that loan.

If central banks and the banking system as a whole are allowed to create fiat tokens out of thin air, how come "counterfeiters" are not allowed to?

Where was the use of human hands and mind, manipulating nature, being used to create real economic goods and services in these exchanges? Virtually none. Yet GDP increases. GDP can be increasing while the rate of the production of real wealth is actually decreasing. At some point in future time, real wealth is needed to pay off these loans. Let's see now, real debt increasing with real wealth decreasing. ... trouble ahead.

The rate of debt and "money" creation has got way out of line with the rate of real wealth creation. At this point, there is going to be quite the reaction/adjustment/correction. And, it will not be felt just in the US.

Now a days, since 1971 (Brenton Woods Agreement), these huge increases of "money" supply (mostly digital bits on a hard drive) and the huge reaction/adjustment/correction that is inevitable are due to those that control the hard drives that contain the supply of digital bits. Huge increases in supply and the next Great Depression, sure are not due to the invisible hand of a free market. They are due to visable hands that have no business messing about in markets because that makes the markets non-free, which makes the markets not work well, and sometimes to crash.

Source: http://www.goldprice.org/bob/2008/01/inflation-cause-and-effect.html

Mutual Funding

Scrutinize the fund's fees and expenses.

Funds charge investors fees and expenses. A fund with high costs must perform better than a

low-cost fund to generate the same returns for you. Even small differences in fees can translate into large differences in returns over time. For example, if you invested $10,000 in a fund that produced a 10% annual return before expenses and had annual operating expenses of 1.5%, then after 20 years you would have roughly $49,725.

But if the fund had expenses of only 0.5%, then you would end up with $60,858. It takes only minutes to use a mutual fund cost calculator to compute how the costs of different mutual funds add up over time and eat into your returns.

Know how the fund impacts your tax bill.The law generally requires a fund to make a capital gains distribution to shareholders if it sells a security for a profit that can't be offset by a loss. If you receive a capital gains distribution from a fund, you will likely owe taxes on it – even if the fund has had a negative return since you invested in it. For this reason, you should call the fund to find out when it makes distributions so you can time your investment in the fund to avoid receiving a capital gains distribution immediately upon investing and paying more than your fair share of taxes. Some funds post that information on their websites.

Consider the age and size of the fund. Before investing in a fund, read the prospectus to find out how long the fund has been operating and the asset size of the fund. Newly created or small funds sometimes have excellent short-term performance records. Because these funds may invest in only a small number of stocks, a few successful stocks can have a large impact on their performance. But as these funds grow larger and increase the number of stocks they own, each stock has less impact on the fund's performance. This may make it more difficult to sustain initial results. You can get a better picture of a fund's performance by looking at how the fund has performed over longer periods and how it has weathered the ups and downs of the market.
Consider the fund's portfolio turnover rate. A fund's portfolio turnover rate measures the frequency with which it buys and sells securities. A fund that rapidly buys and sells securities may generate higher trading costs and capital gains taxes.

Think about the volatility of the fund.While past performance does not necessarily predict future returns, it can tell you how volatile a fund has been. Generally, the more volatile a fund, the higher the investment risk. If you'll need your money to meet a financial goal in one year, you probably can't afford the risk of investing in a fund with a volatile history because you will not have enough time to ride out any declines in the stock market. Read the fund's prospectus and annual report, and compare its year-to-year performance figures.

These figures can help tell you whether the fund earned most of its returns in a few small bursts or whether its returns came in a steadier stream. For example, over ten years, two funds may have gained 12% per year on average, but they may have taken drastically different routes to get there. One might have had a few years of spectacular performance and a few years of low (or negative) returns, while the performance of the other may have been much steadier from year to year.

Factor in the risks the fund takes to achieve its returns.Read the fund's prospectus and shareholder reports to learn about its investment strategy and associated risks. Funds with higher rates of return may take risks that are beyond your comfort level and are inconsistent with your financial goals. For example, a fund that invests primarily in stocks whose prices may change quickly – like initial public offerings or high-tech stocks – will usually be riskier than other types of funds. But remember that all funds carry some level of risk. Just because a fund invests in government or corporate bonds does not mean it does not have significant risk. For example, the fund's investments could be very sensitive to interest rate changes. Thinking about your long-term investment strategies and tolerance for risk can help you decide what type of fund is best suited for you.

Ask about recent changes in the fund's operations.Has the fund's investment adviser or investment strategy changed recently? Has the fund merged with another fund? Operational changes such as these can affect future fund performance. For instance, the investment adviser or portfolio manager who generated the fund's successful performance may no longer be managing the fund.

Check the types of services offered and fees chargedby the fund.

Read the fund's prospectus to learn what services it provides to shareholders. Some funds provide special services, such as toll-free telephone numbers, check-writing privileges, and automatic investment programs. You should find out how easily you can buy and sell shares and whether the fund charges a fee for buying and selling shares. You can expect funds that require extra work by their managers, such as international funds, to have higher costs.

Assess how the fund will impact the diversificationof your portfolio.

Generally, the success of your investments over time will depend largely on how much money

you have invested in each of the major asset classes – stocks, bonds, and cash – rather than on the particular securities you hold. When choosing a mutual fund, you should consider how your interest in that fund affects the overall diversification of your investment portfolio. Maintaining a diversified and balanced portfolio is key to maintaining an acceptable level of risk.

source: http://www.sec.gov/investor/pubs/mfperform.htm

Know Your Mutual Fund Returns

The SEC has a proposed rule on the docket that would require mutual fund companies to report their annual returns after capital gains taxes. The method proposed would be the "worst-case" scenario, so that investors will know what their real returns are. Perhaps this added visibility will shine some light on one of the least understood drags on mutual fund returns: portfolio turnover.

I'll bet the vast majority of mutual fund investors have no idea what their returns are. Oh sure, you receive your annual and quarterly prospectuses, with the one-, three-, and five-year returns. You might even have Quicken set up to track appreciation and long- and short-term capital gains. Click on a button and it generates a sweet little report with your Internal Rate of Return (IRR) for your mutual fund holdings. Very helpful.You can even take these returns and compare them to the returns of the S&P 500, the benchmark The Motley Fool believes you should use to gauge the performance of all your investments.Did your fund portfolio beat the benchmark? Congratulations! You are in the decided minority since, according to Lipper Associates, over time more than 80% of all actively managed mutual funds fail to do so once all management expenses have been netted out. To be fair, even the indexed mutual funds, such as the Vanguard 500 Index Fund (Nasdaq: VFINX), fail to match the index exactly due to their (minuscule as they might be) expenses, and inefficiencies from having to purchase real instead of theoretical stocks. So, those of you with mutual funds that beat the returns of the S&P 500 over the long term (the only term that matters) have something to be very proud of.

There's one additional problem with mutual funds that transcends the expenses related to active management (i.e., trading costs, front- and back-end loads, advisory fees, super sweet advertising campaigns, lunch at the best tables in New York and London, and all of the other expenses incurred that you pay for). This problem is called taxes. Federal Freaking Taxes. Unless your fund returns are net of all expenses and all taxes, then your gains are going to be more and more horribly overstated over time.According to the SEC and the Liberty Funds Distributor, stock and bond fund investors paid $34 billion in capital gains taxes in 1997, and annually more than 15% of all mutual fund gains are wiped out due to these taxes. This is assuming that there is a gain. Even if a fund value declines, if the fund manager has sold appreciated assets the investor can be socked by Uncle Sam for a few more percentage points.The legislation that made mutual funds legal in the United States back in 1940 also provided that the capital gains for those mutual funds would have to be paid on an annual basis.

One of the best arguments for investing for the long term is that, as long as you hold your stocks, you do not have to pay taxes on them.With mutual funds, your propensity to buy or sell is less relevant as far as the government is concerned. The fund company, with its buy and sell decisions, must distribute the tax liability to its investors every year. So, if a fund holds a company for less than 12 months, you are taxed on the portion of those gains attributable to your holdings at your ordinary income level, which is as high as 39.6%.You will not find any mention of tax-adjusted returns anywhere in your mutual fund literature, unless you are very fortunate.

In some ways this is understandable, as mutual fund companies have no way of knowing what your overall tax levels are. Still, the impossibility of perfection should never rationalize doing nothing.In the last few years, the Securities and Exchange Commission (SEC) has done much to standardize the performance reporting methods for mutual fund companies. I believe that adding a post-tax provision for "pre-liquidated" fund accounts (i.e., those that investors continued to hold through the year without selling), even if it is based on average tax rates, would enhance investors' understanding of the expenses associated with holding mutual funds.However, little has been done to address reporting mutual fund returns on a post-tax basis. The result has been galling. According to Morningstar, the all-fund average annual turnover is 103%. This means that, on average, not a single share that a portfolio starts with on the 1st of January will be there at year's end, and another 3% of the shares that were bought during the year will also have been traded out.

For every trade at a gain, people who have these funds in a taxable account get socked with a bill from the guv'ment.How crucial is the difference? After all, if we are to believe the ads we see in print or on television, plenty of mutual funds are performing way better than the S&P 500. So what if I give up a few percentage points, because I'll still be way ahead, right?Well, first and foremost, "past performance does not guarantee future returns." In some ways, recent outperformance could cause after-tax underperformance in the present and near future. Because so many mutual funds are holding grossly appreciated equities from the past five years (an assumption that flies somewhat in the face of the turnover statistics cited earlier, but bear with me), the post-tax returns for shareholders late to the game will be hindered by the huge tax bills generated by the sale of these equities.

So, investors who came into last year's hot fund too late will get the same tax bill that the long-term holders get, but without the benefit of the actual run up.Annual returns are a notoriously slippery concept. The reality would be simpler if everyone bought and held throughout the year, but that is neither practical nor necessarily beneficial. Investors should be investing to maximize their long-term returns, not to make calculating those returns any easier.Mutual fund companies have been given a free pass from mentioning the after-tax effect of their portfolio management policies. But if capital gains taxes are not a direct expense, what are they?Tax efficiency is one of the holy grails for Foolish investors.

Each bite taken out of a portfolio by Uncle Sam is a lost opportunity, compounded over time. A $1,000 tax bite, if allowed to compound over time, corresponds to an actual opportunity cost of $2,800 after 10 years, $8,100 after 20 years, and a whopping $22,900 after 30 years, compounding at the average historic rate of return for the S&P 500. Currently these are gains that mutual fund companies get to take credit for, but their investors never see. Let's take it a little deeper. Using the average historic returns of 11% per year, if you invest $2000 per year in a tax efficient way, after 30 years you would have a portfolio worth $443,000.

But take a tax bite of only 15% out of those returns per year, and the total portfolio is only worth $271,000.Fortunately, the SEC has a proposed rule on the table that would alter mutual fund reporting requirements to have returns include pre-liquidated tax effects. According to Paul Roye, the SEC's Investment Management Division Director, staff are "very close" to recommending this proposed rule to the commissioners for adoption. For the sake of increased reporting quality and a more informed investment community, I believe this rule to be a positive move by the SEC.Fool on!Bill MannTMFOtter on the Fool Discussion Boards
Correction: In the Fool on the Hill column from October 20, 2000, "Copper Mountain Low," we originally quoted from an interview with Copper Mountain CEO Rick Gilbert, which incorrectly stated third-quarter earnings would come in at 50% above the previous quarter.

The figure should have been 15% and the column has since been amended.
Could this be the next Berkshire Hathaway? In 1957, Bill and Carol Angle invested $30K with Warren Buffett. Now, their stake is worth more than $300 million. You know the Berkshire miracle is once in a lifetime, but we've found another that looks uncannily similar.

source: http://www.fool.com/news/foth/2000/foth001101.htm