4th week going in this hot land

Ever found yourself finding that you have so little time yet so much to do? I'm sure everyone has been in that situation at least once in their lifetime. I am in that situation now.

There are all this great ideas coming into my head about what I can do for my partnership from working at Affin. But then they are all just ... ideas. I can realise those ideas but I am working. Fortunately, tomorrow is one more day of work before the four day holiday begins! And I can't wait for that.

I want to professionalise our partnership, adding new structures, define our roles properly and also plan for the future. At the same time, I am gaining invaluable insight towards how brokerages are running, and at the same time, gaining business acumen that will help me ultimately in funds management.

Our annual general meeting and annual dinner is coming pretty soon. My birthday is also coming soon, but sooner. Can't wait!

The Research Department

Today at work is a very special day. For the first time, since I had started work about 3 weeks ago, I went into The Research Department! It is actually quite a profound department in my opinion and I shall describe how it came about with me actually going inside the department.

I had almost read every single file in the F&A department at where I work and I was a little bored. Thinking about the research department where I believe is the place at which I truly belong because of the analysis of shares which is really my home, I begin to wonder if they have research notes for me to read for free. I always knew that they produce lots of research on different, various companies and that they keep the research somewhere.

So I came to ask one of my colleagues, better known as Chikin, if the research department do in fact give away free reports. She suggested that I ask the librarian in charge of the resource centre which was just next to the department. I declined the first time and just continued on with my business as usual.

But awhile after, on the same day, she asked me again if I would like to see the librarian. This time, feeling convinced, I agreed to follow her to the 3rd floor to see the librarian.

Upon entering the resource centre, I met this young guy, a chinese, who seems to be working at the same place. After introducing himself as Kah Yin, I found out that he was a research assistant. Kah Yin would be the first, if I am not mistaken, research person I would have met in this world and have actually talked to. We chatted awhile about ourselves and where we had studied last time. I also expressed my interest in the Research Department to him and he invited me over to have a look inside the department.

When I went inside for the first time, it was really empty. All the analysts had gone for a meeting and so only Kah Yin and a lady whom I had met on my first day at work were there. The lady, on my first day, greeted me and gave me good hospitality. I was grateful to all the friendly people I had met on my first day. She was one of them. But until now, I still do not know her name. I shall call her as Mrs. X for the moment.

We chatted quite abit, and she asked alot of the typical questions an auntie would ask a nephew she didn't meet for quite awhile. It turns out she is also the admin in charge of the research department.

Soon after, all the analysts returned from the investor talk. I was surprised. All, if not 90% of them were chinese. Unlike my F&A department where there is only 3 chinese people there including myself. It was nice to meet the real research analysts there of which there are only 7 in the whole department.

There were also some young girls who looked quite attractive. Kah Yin introduced me to one of them, of whom I had forgotten her name by now, and turns out she is a research analyst. But other than getting her name and asking if she was a fundamentalist or technicalist, that was all.

I went back to the resource centre with Kah Yin, and after abit more talking, that was the end. It was a truly first time experience in my life being in a research department and being able to communicate with people sharing the same passion as me, or at least I think so. I look forward to future trips, if God allows.

Holidays have been holidays

So far my stay in Malaysia has been nothing short of awesome. However there are some setbacks. Alot has happened since I last blogged, including much time spent at work and with friends, as well as went some places and definitely experienced a few new things in my hometown, even after 18 years of living here.

I have managed to catch up with a few friends already. This week alone, managed to catch up with Keishia, Adeline, Noel, Christobel and Chiew Mei. Catching up with old friends is always good. Even though my holidays are quite short, I plan to catch up with each old friend at least once. I haven't seen these valuable people to me for almost a year already. Some are even longer. We usually, for most of them, catch up after my work time for dinner. The places we go to might be a little pricey to some, but its not the food that matters, it's the environment in which we converse in. The more nicely decorated, the more special I suppose. We indirectly pay for the environment through our food.

The second week of work in an investment bank is definitely not routinal because everyday I find something new to learn. I never stop learning every single day and work never seems to end. With each new day I get closer to my workmates, I feel more at home and I learn something new at work. Work also gives me the feeling and perception that I am not wasting my time and am going through something worthwhile. I suppose I love work. When I am just getting used to the weekend, I used to think, for a minute, if only there was work then I wouldn't need to think of what to do next.

I have also managed to visit some new places I have not visited before. They include The Weld, a shopping mall near my working place. It is quite an old place but it is near where Keishia works. So one fine day I decided to walk over there to have lunch with her. Last week was her last week working for her dad. She plans to enjoy her holidays after that with friends. I also managed to visit back Bangsar Shopping Complex again. Somehow I got charged $5.38 for the parking. Not sure how the 38 cents got accrued. I'm starting to think they accrue by the minute. The place has not changed much, except that the place where I used to work in a Christmas shop has relocated to BSC. So, it felt memorable walking through the place where I used to work. They had set up in the open area on the ground floor, so many people can walk through it.

All seems to be going well. But holidays are coming to an end soon, actually. There isn't much weeks left, and I still have a pack of things to do. Christmas is coming in 2 weeks. I have a whole list of friends to catch up with. I still have to go visit Kuantan one weekend. So that's already one weekend down. Each week I think I can only go out with the car twice. I have about 6 weeks left. I still have to get my uni books which I will have to ask for a day off of work to get them as they only open on weekdays. I shall put a list of friends whom I have to catch up with at least once, so you all can take a look as well:-

Julez, Shafoo, Chooi, Nicole, Jerm, Heng, Marc, Rach, Enn Swan, Joanna, Wei Yan, Minnie, Yi Yun, Yi Wen, and Ivan.

I hope that by the end of the holidays I will have cancelled out the whole list. And, next week Minnie will be working in the same area in KL as me! I look forward to our working and lunching together. May God bless everyone.

I am going to *pawn* year 2 of uni...or so I think

I have been working again lately, and during my work time I have learnt all this cool FRS and their respective disclosures required for financial statements. FRS stands for Financial Reporting Standards. The one I'm learning is the international standards one. So everything I learn now will be applicable and test-able in university. Also coincidentally or not, the standards I am learning is of higher accounting degree level. I have a feeling I will meet it in the second year of uni, which is in about just 3 months time.

So two prospective conditions will be facing me next year, which is, either I will be excited that I have already known all the stuff that they are teaching me or I will be plain bored in class because I already know them! Of course the one I am not considering is that I don't know anything of what they are going to teach me but I find that unlikely. So how do I face the two conditions?

I can continue working on it, and end up doing really really well for the subject, subject to God's will. I can also work on other things, which would give me a good grade, and I also spend time on other things. My decision is to take the second one. I don't really mind very good grades. I just hope and wish to get a good enough grade. And thank God if I do.

Putting that mindset away, I also realise that I have alot more to learn at where I am working. There are so many files flooded with knowledge. I want to read them all throughout my time there! But I doubt I will be able to do that. I have kind of taken advantage of the fact that they really let me loose now it's not so busy second week, and I've taken some free time to sms my friends, catch up with them and all. The only time when I don't mind not catching up on knowledge is when I am using the time doing other worthwhile stuff, such as catching up with friends.

I still have to learn alot from God too, when His teaching is that we should help those who in no way can repay us back. I should really try that some day. I want to explore further.

My working experience in Malaysia

Its comes a time when one has to make a decision during one's holidays: to work or not to work. I have made that hard decision, and the answer is: to work. If you had not known yet, I have been working in Affin Investment Bank lately. I got in from a recommendation by Mr.Ong Lam Keong who is a friend of my dad's. He is a remisier in the firm and obviously has some influence in it, judging by the fact that I got in and he has been working there his whole life!

A little about the company I am working in, Affin Investment Bank. They have two main branches, Affin Securities and Affin Merchant Bank. The word Affin is just a name, I have no idea what it means. But I am working in Affin Securities. The hierarchy structure is as follows: Affin Investment Bank is held by Affin Capital Holdings Pty Ltd which is held by Affin Holdings Limited which is listed on the malaysian stock exchange. Affin Holdings also has Affin Bank and Affin Islamic Bank. A major shareholder of Affin Holdings is LTAT, which is the pension fund for army soldiers. That was a whole lot to take in, but I hope you get it, like I did, after only awhile of clear thinking.

My working experience in Affin has been nothing short of new. I have learnt so much in this first week of my job. They had taught me how to write cheques to specific clients, and sometimes add a charge to it if its banking to a bank with instructions to bank to another bank. They also taught me general ledger, where I had to insert narrations for some entries. I learn alot about corporate culture where the working environment for a company is very important for the success of the company. I am in the Finance & Accounting division of the business. Altogether there are about 20 divisions. They are pretty specialised but not yet as specialised as ING, an insurance company my friend Lesley worked at.

Another thing I learnt alot in the company is about costs. To put it in short, the company is divided into two, the profit centre and the cost centre. The profit centre is where the dealers, remisiers and managers meet clients to gain revenue for the company. The cost centre is where everything else is handled for them and to comply with all the regulations by the securities commission. While I was handling general ledger, I learn alot about claims and general stuff the company or its employees can indulge themselves in. Directors can get free memberships to clubs, they can go for entertainment and claim the cost back, in short, anything that can be traced to work can be claimed back. Of course, they also enjoy alot whilst at the same time spending zero of their money. All they have to do is keep the receipt as evidence, and fill in a claimants' form at the end of every month. The company will refund them.

I'm also given the task of filing payment vouchers, handling charges and claims by dealers and managers. I have learnt alot from that, even though it was just filing. I know which companies the business associates itself with, and also who the main and key employees are. I was also asked to do a simple analysis on financial accounts, and the costs incurred each month. I had to key in the data to an excel spreadsheet and then analyse the data month by month.

But the most extensive experience of all is on fixed assets. Together with Amer, a close colleague of mine, we did sorting of fixed assets, tracing of the assets to each department, checking of the originality of the assets, like where it came from. It must be supported by a purchase requisition, which is really a suggestion order to the purchasing department to purchase an asset. It is funny how Human Resources does the purchasing, employment of people and administration all in one department. Maybe we aren't specialised enough and need to be more. I also asset verification where I had to see if the asset has been written off or is still there.

Alongside all of that, I had also read through many Securities Commission rules including International Financial Reporting Standards. I just realised brokerages have alot of rules to comply with, the main being the capital adequacy ratio. They also have all kinds of risks like the position risk, counterparty risk, large exposure risk, outstanding risk, operational risk and all kinds of other risks. Each time, the organisation must have a high(or low) enough ratio of the risks every day. Amer is responsible for sending it reports to the Commission every single day to update them of our financial health. Learning about IFRS, I also learnt to implement them in real-life situations, not just textbook questions and university. I also learnt about the Anti Money Laundering Act and the Counter Financing of Terrorism Act. Each bank should have a compliance officer, in a compliance division, that checks for suspicious activities going on involving money laundering, which is, turning dirty money into clean money.

I think I have described most of what I have learnt in Affin in just one week! Believe it or not. Besides all of that, there is also the experience of going to work, spending money on parking, socialising with all kinds of people, having lunch at work and going home from work. That is tremendous experience. Actually I started work on Tuesday. So that makes it only four days! I wonder how my further 6 weeks will be. I know I have a few files waiting for me to read them on Monday, as well as been given more work next week since some staff are going on compulsory leave, so I will have a PC to use with internet connection!

If any of my dear readers are planning to do an internship, I urge you to go for it! It is an amazing experience, well, so far. But you also give up free time. So go for it, if you are ready. Cheers.

Malaysia so far

Its already been about a week since I landed down in Malaysia, my beloved home country. So much has happened since. Going out with friends, eating back yummy malaysian food, starting work today, catching up with family, it was a hectic but fun one week.

It is always nice coming back to your hometown and catching up with friends who has been with you for so long while you have grown up, and to be able to chat with them not only on msn but also on the phone again. I believe that old friends are worth so much more than a new friend you could make anyday. Old friends share some memories with you and that money cant'buy. Trust in them you have, and you know that they trust you too.

Food has always been good to eat, but not as good to eat in malaysia. Amongst the malaysian delicacies that have fallen into my stomach include chee cheong fun, kuih, malay nasi, char koay teow, teh tarik and chendol. So far that is all I have eaten and I have alot more to put into my stomach before I leave malaysia. Food here is cheap and nice, who would want to lift a finger to cook when eating out is more cheaper than cooking.

I had also started work today, in Affin Securities. It is a very different but also expectable experience working there. I am working in the Accounts & Finance Department, where I have met many new people, and also getting to know them. My first day at work was satisfying. Working from 8.30 to 5.30 demands alot of food afterwards and rest. But its been a good day, productive to say the least. But working full time during my holidays demands a high sacrifice of time which I could have spent otherwise doing other things.

It is also good catching up with my dad, step-mom, relatives and my grandparent(s). You will never find people closer to you than your family. It is always good to meet them again after a year of not seeing them. You feel the love again from them. Ever tried staying away from parents for more than half a year? You would miss them, no matter how much you feel they didnt give way to you whilst you were with them. No matter how much you like to say that no parents are the best, you would miss them after half a year not spending time with them. Phone calls are nothing compared to meeting them physically.

Well, that was my one week in Malaysia. I look forward to the rest of my holidays in Malaysia, and may God also bless my friends here and in Australia with the best. May the sharemarket also make cheap some of the truly exceptional businesses I have found.

A post for Kenjisan Investments

Coming to the thought of it, I have never posted a proper post for Kenjisan Investments before. Introducing Kenjisan Investments, the premier investment partnership with partners that have a long-term goal of becoming wealthy and be a blessings to others through investing in exceptional businesses. The website is www.kenjisaninvestments.com

Kenjisan Investments was founded about half a year ago. It was nothing then. It hatched as an idea with Jeremy and me thinking about investments. Before that I had done some reading on it, and it had fascinated me alot on how people actually build wealth through businesses. It was full on in me and I had to express this interest to others. Jeremy was one person I told it to. But I never actually thought of investing for others, until he brought it up.

So, without much, or any legal knowledge at all, I started to seriously consider investing for others. I kind of liked the idea, and also really believed I could make money by investing. I called on Chan, my other best friend, to join us. So the 3 of us started investing. Soon before we even bought our first share, I told Kelvin who was involved with me through many business competitions, about our investing partnership. It was a real coincidence, for then, he told me about his past investing experiences. So the 3 became 4.

The 4 of us diligently grew Kenjisan Invesments throughout the months as we loyally added more capital to the pool each month. Our shares were performing badly at first, but then with a fate of God, the tides turned and we were making money. Throughout the times of first growth, there were many challenges. Kelvin and me, who were the main investing recommenders of shares, didn't always have the same opinion. We discussed lengthly about some shares, but eventually we would always reach an agreement. Our learning curve throughout that period was amazing.

Through word of mouth, Kenjisan Investments became more and more known as the time passed by. It became so known to 4 more people that they just had to be members. They are my beloved partners Khim, Jordan, Ming Fung and Thean. And speaking to one of my dear friends, Stella, she opened my eyes to the legal world and sought me to ask me to do it more legally. Due to her remarks, I actually set out on a series of legal endeavours including registration of business, partnership issues, opening of accounts, such tiresome work but worth every second of it.

As for now, we are about to embark on a very interesting and memorable journey indeed. May God bless the way for us.

And off to malaysia!

Today is my last day I will be spending in Australia. I can hear you all saying "really??!!" Well, for 2007 that is. I will be leaving for the airport tonight and will bid farewell to my friends in Aus for the next two months.

I spent my last day in Aus packing up, sleeping a little, playing my last dota game on Bored Aussies and also researching some shares for Kenjisan Investments. Nothing much of a special day. But certainly tonight's flight will indeed make it special.

The day before I went for a barbeque with some good old friends. 1 year old friends, that is. I got to know the lucky bunch about a year ago when I was still studying at East Doncaster Secondary College. People who came are Jadey, May, Derek, Alvin, Nelson, Tiff, Jess, Bryan, Eric, Nick, Nick's cousin, Aaron and Ian. It was a very fun barbeque, but sadly, there were too many flies. And we threw away 8 steaks that we had cooked. But the sausages made up for it.

Something really special also happened in Aus on the recent Saturday. It was election night! It was the Liberal vs Labor. The current standing party is Liberal, whereas the challenger is Labor. John Howard, our current prime minister, up against Kevin Rudd, the potential prime minister to be. It was an exciting day. During the daytime people voted all around Australia. And at night the votes were counted. Channel 7 had a special program from 6 to around 10 something covering the whole election. And I watched it all the way, pretty exciting. Ended up Kevin Rudd winning the election, and there were already talks on which shares would benefit from Kevin Rudd being the leader of the country. So I guess Australia has a new prime minister.

Well, my flight is soon. Jeremy's mom will be sending me there. Bid me farewell friends. Also pray to God for my safe flight there! May the sharemarket do worse(so businesses become cheap) soon! Joshua out.

A special night out occasion

Tonight was truly special. We had a semi reunion at the city during Adrian's 18th. This was at a bar named Eurotrash in the city. So many of past year school people came and it was truly a special time. Never did we have such a time before where so many of our school mates come and clubbed.

It also marks the last time I will probably see all of my ex-school mates before I leave for malaysia, and the last time I see them in 2007. It's always sweet and pleasant to be able to meet up with so many friends before you leave for a long time before you see them again. The special feeling is there. I caught up with most people and I am glad I did. I am glad I came for such a party, thanks to Adrian who spent heaps having that party.

I also want to note that 2007 was truly a achieving year rather than a reflective year. I would say that I didn't bother to properly reflect on stuff that has happened, rather I have focused on achieving in this year. And this was truly a change in my life. So much has been achieved in 2007. Also I couldn't have done it without God in my life.

It is time for 2008 to draw near, but not yet. But I have to start thinking what my resolutions are for the next year. Thinking back, I don't think any of what I have done in 2007 could have been on my resolutions list. It was unpredictable and totally out of the ordinary. How am I suppose to be predict 2008 when I can't ever predict 2007. It might seem far-fetched, but the key to correct predicting is to think creatively, courageously, deservingly yet realistically.

So what would be a good 2008 resolution? I already have a few on my list. They are trying to make a difference in someone's life, writing an investing book and calling it Investing 101, growing and sustaining Kenjisan Investments and getting a girlfriend. I'm not sure about the last one, but will definitely have to see when the time comes. The others I am very sure I can do if I commit myself to it, with God's blessing.

Australia has been a tremendous experience to me. Never would I have expected all these from a country where I came from, Malaysia, without first experiencing all these over here. It is truly amazing when you look back at the things God can let you experience when you're just living in one country. It's when you go overseas that keys start to unlock doors and new doors open to you.

The truly exceptional business

Its been awhile since I blogged a quality investment post. I would like to dedicate this post to the title of a truly exceptional business.

Believe it or not, there lies in this world as rare as precious gems, truly exceptional businesses. They are rare, they are hard to find. A simple indicator, how many businesses can you find that can generate and sustain a high ROE of around 60-80% over the long-term, with little debt? They are almost impossible to find. It is due to their nature of being exceptional.

So what makes the business exceptional? The simple answer: the way they run the business and by the who. A business in an industry with superior economics may well be enough to obtain a high ROE, but certainly not an exceptional ROE, because all their competitors would be achieving the same level too. The difference is in the way the business is run. There is something about the business in which its competitors does not have. To word it: a sustainable competitive advantage. Think about McDonalds, Coca-Cola, Disney, Gilette, VISA or BP Petrol. All of them have a mind share in each of us. Everyone of us know them. Those are the truly exceptional companies. People go to them without even thinking. They have and occupy a part of our mind and our long-term memory.

These businesses with such exceptional value can translate that mind share to profits and high margins because of their uncanny reputation. They can earn high ROEs without pressure on their margins and coupled with who the business is run by, can truly be one in a million.

Management is the liveblood of the business. Businesses, after all, are run by people. And different people run businesses differently. Some people are just more impressive, some are less. Some management can just run a business better than others. What we should look for is exceptional management. And it pays to get to meet with them and know them. By knowing what a good manager is, we know what to look for in these people. By seeing their characteristics, personality, we can tell. The best way to know what these qualities are is by experience. A simple guideline would be honest, able management.

When businesses have all these qualities in one, what you get is a rare gem. Of course, when you find the business, not necessarily will you find the business in all its glamour. Not everyone in the world recognises the value of such businesses. And businesses inevitably has its up and downs once in a while. They might be bogged down with lots of negatives after recovering from a recession. Other businesses might have performed better relative to them, making their stock worth less because of the opportunity cost. My dear friends, ignore all the side distractions, now are the best times to go into a business like this.

Remember, price is what you pay, value is what you get.

The worst is over... or is it?

Exams have ended today...I am so glad. That was the worst I suppose. The last paper I was referring too. Thank God I studied. I wonder how did people who didn't study fare. But overall, many people will get good marks for the last exam. Why? Because assignments and tutorial attendance is worth 50% of the overall. So even if they did bad, assignments will pull them up.

After exams, my close friends and me went to Crown's for a good day spent there. We watched this movie Death at a Funeral, which was so hilarious. Anyone would love that movie. Ah, a good movie I haven't seen in a long time. So awesome. I recommend it to anyone going to watch a movie!

Throughout the meantime, we also went to the casino. I enjoyed looking at many people playing games. I didn't play but didnt feel sad about that. I would only play poker, because I believe the game involves skill, besides just luck. Games like roulette or pokies is just throwing money away. And as some might know, I don't like to throw money away.

So what is to come? Many activities are planned but I would also like to have a free schedule which is not so tight, so I can do whatever I want in my free time. I enjoy the freedom I have right now. Do whatever I want for a few months. I'll be working in Malaysia though, so cut short the few months to lesser months.

Although as tiring as it may be in the coming months, deep down inside me I feel that it is worth it, that working hard pays off. I don't know how well it pays off, I just know that when I look back at time spent, I will have no regrets at all. It has been tested for a few months, and looking back after those few months, I really have no regrets at all. Although there might be some, but I acknowledge the opportunity cost of my time. There are some things you would have to forego by doing others. But the message is do others, don't do nothing at all.

This post is mostly reflective I presume. Hope it offers advice to those seeking for it out there. But God is truly the main person to look for for advice. I will blog some more in the future. Cheers for the market going up today, bringing some people's wealth up.

I'm blogging during exams!

Hey my loyal readers, I haven't been blogging for ages! About twelve days already, it's been a while. My exams have been going well. Before my exams, I had promised God that if I were to do well, I would give him the glory. So here it is, the blessings I have comes from God, and I acknowledge it. Amen? Hallelujah.

It is official now that Kenjisan Investments has 8 members, now recognised by the business registrar. Growing has been fun, but will this growth stop? The maximum number of members is 20, and what happens after that? I have read a bit and it seems the only solution is to become a Managed Investment Scheme. But how do I do that? There are so many rules and regulations to comply with, a challenge, but one that I would not back down.

It is the holidays soon! One more day till the exam is over. W00t. Everyone rejoice. My holidays are packed up so far. This is what it looks like:-

Wednesday - go to crown's and celebrate with close friends
Thursday - meet up with best friend, meet up with kenjisan investments committee team
Friday - nothing on? Maybe go on a date.
Saturday - working
Sunday - church
Monday - working
Tuesday - Meet up with Adrian to discuss business idea, working
Wednesday - nothing on?
Thursday - Go for another Adrian's party!
Friday - 101 scavenger hunt!
Saturday - Annual dinner that I want to go, but I'm working! Cmon, find a replacement
Sunday - church
Monday - nothing on?
Tuesday - leaving for Malaysia!

So that's it. My holiday plans are made publicly known. If anyone is going to do anything the same as me, let me know, we might meet each other somewhere and can catch up. It would be great if you are my friend whom I didn't catch up with for so long and I would like to be a better friend by treating you lunch or something.

The day before exams

Today is the day before exams. Sunday! But happy Sunday this is. It has been very fun so far. Woke up late, gone to church, had lunch with my close friends, met a new chick called Ashley and just finished playing chess with Jerm. Not the kind of last day of studying you'd expect right.

I don't know what lies ahead of me. Exams particularly lie closest ahead to me. Am I really ready for this exam? Everything seems to be in a good condition for me. Yet my calmness is not reflected in other friends who are workjing frantically now to try to cram everything into the last few days. Is it just me who is this crazy? Or is my calmness justified and I should just ignore what everyone else is doing.

May God help us all in the coming exams. I just can't wait to get it over with. Maybe that is a sign that I am not ready? Perhaps, but perhaps not. I want to start focusing on researching shares but without any distractions at all. Something I find very hard to do even when I am in university and no more in Year 12. Distractions are all around me.

But I love this exams too. It's not that exams are a burden. Exams are FUN, get this people. Later on in your life you are not going to sit for any exams ever. And you feel really happy if you do good in exams. So give it its part and study for it. When you do well, not only are you happy, many people will be proud of you. So if you don't do well, don't blame the exam, its you who do not prepare enough. Of course, if you're just the person who believes doesn't excel in exams no matter what then you're excused.

Rest is important! Everyone have a good nights rest tonight. Even if you don't have exams. Rest goes a long way. That's all for this short post. Remember to rest guys!

Friday the 2nd of November

Today is a pretty special day indeed. Friday the 2nd of November. A few things happened today and I am going to be talking about them.

1. VCE started today! Today marks the beginning of VCE for all year 12s in Victoria. A terribly nerve-wrecking yet exciting day for them. And as a tutor for a few year 12 students, I fel for you, my students, if you're reading this. I wish you all the best and I know you will do well! =)

2. Today is my close friend's birthday, Nicole Kee. This is the 2nd year in a row that her birthday has fallen on an exam date. This year she is not celebrating though, or so I think. I really hope she has a party. Then I'll have an excuse to go out and parteh, with friends!

3. Today I successfully completed Kenjisan Investments Share Valuation Model. I haven't yet actually given it a name, but can anyone help me think of a cool name to name it? The model looks complex but I stress again, it is really quite simple. And we can value shares with it! How cooler can that get?

4. Today a train crashed at Nunawading station, near Springvale Road causing many people to be stuck for remedial busses to come pick them up. There was a lot of queue and the Belgrave and Lilydale lines has not yet been rescheduled to open. Many people will be going home late tonight. How do I know that? Oh I watched the news.

5. Today ASX fell 130 points around there. The biggest drop since August. Is this just a one-day sell of or does this mark the beginning of something new? And next Tuesday the RBA is predicted to increase interest rates. Is that the beginning of a coming recession for Australia? What should I invest in? All these takes art and more experience than ever.

6. Today means two more days to exams! And I can't wait for exams to be over. Hooray exam is going to be over sooner because one day has passed. Exams over means I can do whatever I want and I can spend my time researching shares, going out with friends, going out for dates, whatever.

So this is it for the 2nd of November. Hope you all enjoy a good weekend.

How do you measure the real worth of a company?

This dilemma has been following me for quite some time now. It is, how do you tell how much is the real worth of a company? Everyone can understand that a company has worth and that we should always buy a company based on its intrinsic value. But then, the next question comes, what is its intrinsic value and how do we find it?

Going back to basics, all companies has equity. When we are buying a company, we are actually buying its equity. But the price we are paying is not necessarily the worth of its equity. More often than not, we pay more for its equity than its worth. Take this situation, a company's equity is worth 10 dollars but we are paying 15 dollars for it. Is the 5 dollars extra premium or what the company's equity is really worth?

When I say what it is really worth, the idea I get in my head is all the profits of the company that it will earn until infinity discounted back to the present to get a value of what we should pay today.

To learn how to value a company, learning how to value bonds certainly helps. I have learnt that money has a time value. That is, money today is worth more than money tomorrow. That is why we don't pay for bonds at its face value but we pay for bonds at its present value. Its present value is the discounted value of its face value. I hope that makes sense, because you wouldn't want to pay 10 dollars today for a 10 dollars you will get in 100 days time.

For companies it gets a little more complex, because companies don't pay a fix dividend and can borrow to take on debt. That makes it more complicated. And there is also number of shares at different times of a company's life. What we really need to construct is a model that can value a company based on what it is really worth.

I still haven't yet hit the nail on the notion of what a company is really worth. Right now out there in the market, analysts are using popular valuation models ranging from simple ones such as Dividend streams, PE valuation to more complex ones such as Discounted Cash Flow and Relative Multiples. Are those models really what they say they can achieve? That is, find the true worth of a company.

At the time of writing, I am still a novice to this topic. But I publicly declare that I will try my very best to pin this matter down to its nail. I will find out the true way and best way to value a company's shares. Something tells me it is not going to be that difficult. May God help me. Good luck to all you investors out there in the market. Remember buy below intrinsic value.

A handy valuation technique

Hey my readers, I decided this time to treat you all with a valuation technique that I have just learnt. Hopefully you all are able to apply it to shares and start seeing which type of shares are undervalued or overvalued. I learnt this formula while reading and soon had it all worked out, or so I hope.

The formula is as follows:-

The intrinsic value of a share = Return on Equity/Pre-tax Required Rate of Return * Equity per share

Lets try to break it down further. The intrinsic value of share, some of you might be asking what is that? The intrinsic value means the face value of a share that is worth today for that particular company. This is how much the share is really worth today, irrespective of what the market thinks of its price. So, when the intrinsic value of a share is higher than the market price, we should buy the share. If the intrinsic value of a share is lower than the market price, now there is a difference, we shouldn't sell the share just because the market is trading at a premium to its intrinsic value. We will talk about the topic of selling another day.

Return on Equity is the return on shareholder's funds from the company's profit. It is a measure of dollar for dollar. How much you would get back from the business by investing a dollar into it. The ROE figure cannot be looked alone, it must be looked for a few years' financial performance of a company. Looking back 3-5 years of data, we are able to gauge the company's ROE much better.

The pre-tax required rate of return is what you would want to pay for the share at today's price. If you want a rate of 15% pre-tax return on your money, then this figure should be 15%. I hear you saying then that the intrinsic value of a company depends on how much each person is willing to pay for the share, so it is different for different people. Absolutely right. The intrinsic value of a share depends on the person. This figure can also be obtained by looking at it via opportunity cost. What is the second highest return you can get from another asset? Then putting a risk premium for the shares of the company on top of the second highest opportunity, you can get your required rate of return realistically.

Remember that when we are buying a company, we are buying what is left over of its assets after taking over all liabilities, in other words we are buying the equity of the company. That is why I take equity per share. In other words, the whole formula shows how much is the equity of the company really worth. There are a few assumptions to this model though, that is, this assumes that the ROE of the company, the required rate of return and the equity of the company stays the same throughout the whole time. What you are paying today already takes into account the future worth of all that. All earnings are also paid out as dividends. So remember, using that formula takes into consideration all these.

But nevertheless, if its new to you, it might be fun experimenting with it on companies in the ASX, perhaps. This is one good way of how to value a company's shares. If you invest like Warren Buffett, you might even want to add a margin of safety. That is, only buy shares whose intrinsic value is at a certain discount to the market price. Good luck investing!

The last day

Today, as some might know it, is the last day of university. How sad this is, well, for me especially. It is the time when the normal going ons and abouts in university ends. The usual meetups during lunches, club meetings, lectures and tutorials .. it is all for now ending. What a year it has been.

Some might not yet have found their first year at university productive, but I sure have. There are a whole bunch of events that just seemed to zoom through me as I have gone through this year. I shall list some of them out in chronological order, as a time to reflect on and remember time in university as precious.

1. My first enrolment into university, that is when I first met Singaporean friends, as I was placed into a Singaporean enrolment group to tour the university.
2. I got to know what a lecture was and what a tutorial was, I came to know a good Malaysian friend in acc tute class, Becky.
3. I started planning for my future, yet I was unsure of the end outcome, but I still planned and actually came up with something silly such as a 9 year plan.
4. I met Kelvin and Ken, with whom the three of us joined the UBS Investment Banking Challenge and got best first year team, an achievement I am so proud of.
5. I got work in Nando's and have been working there ever since and am also a tutor to a few Year 11 and 12 students.
6. My dad visited during the winter and we have travelled around Australia quite a bit. Now I feel Australia is already like my second home, I am no longer alien to it.
7. In second sem, I started getting busy with shares, and joined the EIC.
8. I got distracted away from studies with the business plan competition and share researches.
9. Jeremy, Chan, Kelvin and me started the investment partnership and we didn't do so well, but what a learning curve it was.
10. We expanded our partnership to incorporate 4 new members and made it more legal with introduction of documents.
11. I met memorable friends which I will have said have changed my 2007 year, they are people like Thean, Ming Fung, Merlin, Daniel Wong, Yang, Mel, Penny, Wei Yan, Sue Ann, Audrey, Kelvin, Ken, Wei Na.
12. But most of all, my two best friends Jerm and Chan contributed the most of all.

So this is it, the end of university, and I thank God for making it a memorable experience. A year well spent.

The Joshua Tree

I am hearing one of the best songs right now, With or Without You. And this song is from an album called "The Joshua Tree" Now, you don't hear that everyday, do you? But the Joshua Tree, why?

Maybe you can help me with that.

Today is one of the best days of EIC. We had almost a 3 hour meeting. And so many turned up, that was great! We also saw many interesting presentations including one by me. Wendy also turned up, my new friend whose this is her first time coming for EIC. She is 2nd year doing Commerce, and wow, what an accomplishment she has already done. She had started up businesses before, but sadly, they went bancrupt.

During EIC, Edward, one of the main founders today asked me whether my investment partnership, Kenjisan Investments, can team up with EIC to do an interview by the Age. The reason they asked us is because we actually have a fund where we pool money together to invest. Whereas they have the actual investment club with all the things a cool club would have. The Age wants to do an article about investment clubs in Australia. How interesting is that! So I agreed, and I can't wait to see what is the outcome.

Also, exams are nearing pretty soon. Study, study, study. But I find myself blogging here. Isn't blogging fun? I do enjoy writing about personal stuff. I have a question to ask my readers out there, what is the best way to ask a person out? Leave your comments and I will see the credibility of it!

Good luck to everyone who has exams. 4 more weeks till its over! Hooray.

So much things has happened

As you can see fromt he broken english of the title, so much things have happened, since I blogged!

It was ages ago since I have blogged. Just cannot believe it. A whole series of events has occurred which I shall relate to you one by one slowly.

Business plan competition update first of all! The business plan is almost complete now. Just the financials left, which will be undertaken by Kelvin. He is already doing his best and I really appreciate that in him. The competition is looking good for us, I have to say. But who knows whether we will make it through. We propose but in the end it is still God who dispose.

Social life update. I have made some new friends, two girls who are in 2nd year, a guy who is in my church who does postgrad medicine and another girl who is the same year as me, but doing commerce & media. It is always interesting to know new friends. You meet up with them once somewhere, but when it comes to second time, shy lah. I am always thinking oh what are we going to talk after the first time, now nothing more to talk already. Everything we finished talking about when we met the first time. But this is a 'flaw' I have to get over with =) As with my old, most valuable, friends, I still keep them. My old friends are the most valuable, with each year adding a million dollars to their worth. You can imagine who are the most valuable friends to me.

Partnership update. Shares, shares, shares. You can't get enough of them. Now Thean has recommended a company called Copper Strike. It is an exploration company with production due in 2009. I also want to start recommending a new company, called St. Barbara. They are also a resources company with which I really want to do more research on. Partnership still undergoing registration, CDIA account not opened yet. Still alot of work to do my friends!

Exam update. Exams are so soon! Oh no. Luckily I started studying a leeeetle bit. But still, there is the main core of the subject still to be covered. Oh may God help me with this. I cannot wait till exam is over!

Fitness update. I must excercise! Who wants to go excercising with me? Someone please. Only then can I find the motivation to excercise. But not hectic excercise. A simple jog will be awesome.

Church update. I so love my church friends! They are like family to me. Especially also now some of them are in my partnership. Church has been quiet lately. Not much activities going on, and I wonder what will happen in the future.

I suddenly found the motivation to blog today. I miss blogging, you can say. It is a medium where I can express what is going on in my world. Only I know that, and it is always good to let someone into it, so that they know as well. God knows everything about us.

Malaysia is also coming soon to me. I will be flying back real soon, like in 1.25 months time! What am I going to do there? Well I will be working for a brokerage firm. Dont know exactly what I will be doing but I hope for the best. If not just make a few friends and pick up a few skills.

Life does get exhausting after a while doesnt it?

Attitude. It is very important. I start to value people more on their personality. But I still am attracted to looks. Nowadays, however, personality is starting to surface as the new 'thing' to go for. No substitute for a person you can really connect with. Hallelujah.

That's all for now. I want to express my thanks here to Jeu Ann who is my student for specialist mathematics. Today is the last day of tuition. VCE exams coming soon. Good luck Jeu!

Business plan competition!

By the grace of God, we have made it to the next round! This round is going to be much tougher, with competition from MBS(Melbourne Business School) So the big question is, what chance does a first year have against graduates and students doing masters? Who knows, with God all things are possible.

It was a while since I have attented the graduate Melbourne University Entrepreneurial(MUEC) launch. It's been even longer since I have joined the competition. This business plan competition was orginally opened to undergraduates. Now it is open to graduates. So, effectively, the undergraduates had to go one round of qualification before they were on the same stage as the graduates. Not everyone made it through, my friend didn't, who was in another team. I am not sure about other teams. But I'm sure one team, TeaLife, made it through. I met a few other undergraduate teams in the launch and we had a fun time conversing and chatting.

Now, we are once again working hard for the competition. What a challenging competition this is! With exams coming up, bogged down by one last assignment, I cannot wait for this whole event to actually be over. Freedom once against. To be able to do whatever I want. Ah, doesn't everyone wish that. Suddenly, I have a craving for breaks. But not like a break where I don't get to meet friends. Breaks full of friends! But also the time and space to be on my own awhile. Honestly, that helps keep one's sanity.

Well, if my business plan team is reading this, good luck to you! We are definitely working hard and if God wills, we may just succeed again to the next round. Good luck to everyone out there who plans to or is in a competition at the moment! How more fast pacing life can be.

Initial Public Offerings - Timing and Motivation

Recently, I have had a Finance Assignment, which in fact I enjoyed doing the most, which I had to write about IPOs - timing and motivation. That was the topic. And wow did I have a great time writing it. Most of my sources came from:

www.investsmart.com.au
www.asx.com.au
www.google.com

Those three websites gave me plenty of statistics and data. Well, enough for a 1000 word essay. I thoroughly enjoyed writing and in the process, I did find out some very interesting facts.

-The All Ordinaries history only goes back to 1900
- There are 2120 companies in Australia, 610 of which only came within the last 4 years.
- The last 4 years were crazy IPO years with average premiums paid on top of issue price of new shares 1 month after issue amounting to 19% on average.
- IPOs are a crazy process. Incredibly complicated(i like) and full of diff motivations
- There are as many motivations as there are listings

Writing a finance essay is like showing off your finance skill and feeling proud of your essay. To all those who reads my blog and does Finance 1, just PM me if you want to know some tips on doing the finance essay. I can't believe some stuff I read on the Online Tutor, they're like asking for all sorts of weird stuff. One guy said he did research on the whole net and found nothing ...

One day I will have my own IPO. But until then, we all will just sit back and learn these stuff first. Not actually participate in it. As a farewell word for my readers, I wish those who are doing their essay now a very good luck!!

The art of patience

Recently I have been bogged down by many events happening in my daily life as I have told in my last post. However, a new event has submerged. The test of patience. Things in my life now seem to be going really slowly. It is like in slow-motion. I am partially worried that my partnership will not be able to be set up in time, because it is taking too long! This idea of setting up the partnership is truly a headache giving one. Now I understand why so many business people feel inflexible. They are so mainly because legal rules need to be in place, they are afraid to lose and other people are too cautious and has influenced them.

This is what is happening to me right now. I will be going back to Malaysia in 2 months time. And I hope that the partnership can be making money on its own by means of investing by then. However, there is so much things left to do. I shall list them down in order below.

1) Got to meet up with partners to get their details
2) Got to submit their details to the ABR and call them to ask them about how to add/delete partners and whether I need to do accounting for the old partnership
3) I need to collect the monies from partners as their starting up and joining monies
4) Got to wait for one partner to submit the editted version of the amendment
5) Got to meet up with partners again to explain to them the terms as well as sign the agreements
6) got to set up a CDIA account with the bank to start investing
7) got to learn how to use CommSec about how to trade
8) Finally, come up with a buy list about which shares to buy
9) Actually buy shares

If, and only if, investing with shares didnt have to be this complex. I'd rejoice. But I guess going through all this difficulty is a barrier down to starting up my company in the future. I thank God for all the help he is giving me. For those reading this out there, hope you can empathise with this and learn a lesson if you were ever to open your own company. I need to have tremendous patience.

The partnership, uni and the buziness of life

Recently, I have been bogged down by many things. Firstly, there is uni and all the assignments. Can't the uni ever give enough of it? The answer is no. I wish I could be participating full time in a business, I can skip the uni part. But I know that uni is good for me, it molds my thinking, it prepares me for my future. Uni really cares about me, that is the message I get.

But what do they really care about? For the first time after I have joined university have I found out that uni is a business. What an exciting, profound thing. And guess what about uni, it is private! Now that makes it even more exciting. Somebody out there, while providing countless education opportunities to so many people, is actually making a profit out of this. And they rarely promote this fact to the media. It is very subtle.

What is the motive of a business? The aim is to maximise profit. I am not getting at university here, just trying to clarify a few things. I appreciate the fact that uni is giving much education to me. But sometimes I feel they are charging a little too much. When somebody cannot afford an education, the marginal person have lost their education to the fact that somebody is trying to profit maximise. That is just not right. Maybe I feel that education shouldn't be in the hands of the private. Maybe it should be public. Since education is a public good. The government could play a more active role in education.

But with government schools already under their arm, is uni a defining heavy load on them? Perhaps so, perhaps not. But we live in an imperfect world, so choosing one relates to an opportunity cost of another. I understand that not everyone is sympathetic. But with all the charitable efforts going around, one would stop and think, hey why are there so many uneducated people, but yet someone is making huge profits running a university? We shouldn't look elsewhere when finding solutions to education, and start looking at removing tertiary education from the hands of private people first.

Enough about tertiary education, and moving on to my partnership. Things have been going slowly so far. My plan is to move my shares together with my original partners to the new partnership, which will comprise of more members and a bigger fund. I am so excited about the prospect. But there are still lots more to do. There are the signing up of the new members, registering of the business, setting up of the banking accounts, choosing which shares to buy and finally, buying shares. This is the slow part. I expect it to be faster after that.

Anyone who runs a business or did it before knows how I feel and understands what on earth am I blablering about. And there is also the business cards. My friend Jordan is going to design a logo for the partnership. I have told him I want a nice, simple logo. And I believe he has the skills to do that. I just cannot wait, and words cannot express how much I anticipate the day when everything is running.

I remain positive but the main reason and objective is going to take a lifetime to accomplish. That is, to be a successful investor. Investing requires alot of doing nothing. If one can do that, then one is a great investor. I leave this post for now. Currently I am blogging when I am suppose to be studying. I'm in university right now, in the 2nd Floor of the Bailieu Lib. So if you read this post as I have just posted it, then be sure to find me at the computers. Good luck to all investors with the ASX posting record high levels!

Hot property

Tonight on television I watched a series called Hot Property. The show featured property investors and how they were faring. It taught me a few lessons on property, mainly that we can make alot of money out of property by renovating and upgrading the house. The show featured a young girl who looked like she was in her late 20s already having a portfolio of 8 million. That was simply amazing. I wish I could do that one day as well. Not with property, but with shares.

I have learnt a thing or two about properties. It is a very rock solid way of making money, almost guaranteed. You don't even need to diversify. That is because house prices don't drop on the norm. They only increase in value over time. Isn't that amazing? An investment that cannot lose? Well, whats the catch? The catch is that value of houses do not appreciate like shares, and that property investors sometimes have to pay stamp duty. And they do not get franked dividends. Neither do they have the excitement associated with shares. Everyone can be a winner by investing in property. Definitely a popular choice amongst many people that they want to be property investors in the future. After all, you can't lose, and that is so attractive on its own.

Another attractive feature which complements the fact that you can't lose in property is that you are able to go to high gearing levels. You can even gear up to 80% of the house. Yes, you do end up paying interest expenses but then, your Return on Equity will be at amazing high levels per year. Risky going to gear at such a high level? Not at all because, remember, house prices don't fall, so if they go up there can only be one winner: you. So the ability to be able to gear to high levels and you can't lose and a tremendous return on equity and the bank is not worried about the loan because it is secured by the property: lets all become property investors?

Recently, I found a real life example of how easy it is to make money if only we have ... money. Two residential areas with old houses on it near my neighbourhood is on sale right now. Yes, two slots with old houses on it. The plan is to buy the land with the two old houses, demolish the old houses, and build 8 new townhouses on top of it. The seller is looking for $1.5m for the land and the building permit. The 8 new townhouses can be sold for the least $500k each. After adding the cost of building the new houses, the total cost would be around $3.1m. And assuming we sell all the houses for $4m, it is a neat $900k profit over the span of 2.5 years? That is why the rich is getting richer. It is still for sale now, but I don't have the money YET, if you do, you can go and take this tremendous opportunity right in front of your eyes right now. I'm assuming you know where I live.

But lets look at it closer, assuming you don't gear, and put $4m of your money over a span of 2 years into the house, and make a profit of around a $1m. That is really only about a return of 12.5% per year on your money. Not much at all. That is even below my required rate of return that is on average 16.16% p.a. By investing in shares, we are able to get even much higher returns on equity. The 12.5% is pre-tax and not including any franked dividends you would get from shares. The understanding here is that when buying the property we go ungeared, but that is seldom the case in real life.

I would still prefer shares over property. I understand that you can make millions out of property, yes. But you cannot make billions with property. That can only be achieved by means of business. And business is what I like. As you can already tell from the many posts. However, investing does include property and it is an asset class not to be underestimated. And I look forward to buying my first property in the future!

To all my readers out there who wants to be a successful investor too, I urge you to consider shares as well as property in your investing career.

The event has passed!

Tonight was a wonderful night. We had our heroes charity event, and wow what an event it was. So many of our friends came, including Jordan and Audrey. My fun at the event is mainly divided into two parts: before the event and during the event.

Before the event, Jordan and me were getting stuff ready, and selling lots and lots of drinks! We sold chocolates too, and we were successful. Hooray for that. Praise God for the good sales. Jordan is naturally friendly, he can attract alot of customers who would buy things from us. I, to a lesser extent, am naturally friendly. But my main strength lies in the planning part, I can plan better than I can sell. Together, we are sales dynamite. Happily selling and increasing our profits we were for about an hour, we had alot of fun in the process and doing what I liked: business.

During the event, I sat next to Audrey and Jordan. The main event was spectacular, with many videos, presentations and finally the main speaker of the night, Pastor Scott Hawkins gave his life-changing speech. I was so glad to see many of friends got saved, and that just made all the difference and the whole event worthwhile. Reaching out to the community is a very noble thing to do. Money is not enough, because hard work is needed too. That was what we had during that night. God was truly working with us. Good to see that Mel brought along many friends as well, almost her whole group from university and Adrian came along too.

I will remember this night as a special event night. Just as a recap from the past, I could be so sure that I dreamt of this night before. Well, part of it. No wonder at one point it all seemed so familar to me, like I have seen it somewhere before. I was so sure it appeared to me in my dream about 2 months ago. It took that long to realise. And this wasn't the first time that my dreams had come true, it happened many times before. Maybe this is a way of God telling me that he is speaking to me through my dreams? What is the point of seeing a screen of the future when that screen isn't particularly of any importance? When the time comes, I will have to make the decision to go to this event or not. Perhaps there is a deeper reason I have not yet conceived yet.

If you know, please do let me know. Looking forward to the future!

Presentations

Lately, I have been having alot of meetings for EIC. Those meetings are sector meetings for presentations made during the main EIC meeting. I think I actually spend more time making those meetings than I did for my recent business plan competition. You might be already wondering why am I putting so much effort into these meetings? The main reason is because I love investing, and those meetings are all above improving our investing skills together as a group and I just enjoy talking about my favourite topic.

The meetings are in a group. And I just love being able to learn how to work together effectively in a group. Those meetings are really enjoyable + i learn alot + my favourite topic. Can I ask for anything better? That made me wonder how come I wasn't interested in investing since I was young. Maybe it was because investing generally needs money, and it is no use talking about it all the time when I'm actually not investing. So far in my investing time, the lesson I know which is the hardest is not mastering the concepts and theories, but the emotional part - mainly patience. That is the biggest factor to overcome of all if I am to be an investing master.

Hopefully, as time passes, so will my patience grow. I will thank God for that of course. Coming back to the topic of presentations, every time in the main EIC meeting, we will present what we have discussed and done throughout the week. It is public speaking in a way. And if this is going to continue every single week, I would actually be public speaking fearless. Good thing isn't it? After so many weeks of joining EIC, i still think that this is the best club decision I ever made, that is to join it. No regrets, full of hopes.

No more trading, not going to be a trader ever

I should stress this point on my blog, that we should always INVEST in the stockmarket, and never TRADE. I might have missed the point, but I will stress it again. NEVER trade, never ever ever EVER trade. Unless you don't want your money, of course. Then you can just give it to me. I wouldn't mind investing it on your behalf.

Today, the sharemarket game has commenced its thrid day of trading. I was happily making money for 2 days in a row, when suddenly my net wealth has been pulled down past the beginning mark because of a small market drop today. Due to desperation, I started trading. My focus was short-term. Part of the desperation came from the fact that some stocks I already held were based on speculation. So when the market dropped, I panicked, and started selling. I bought, sold, bought, sold, until I had incurred a high brokerage fee already.

I've learnt my lesson. Luckily this is not with real life, never ever trade. The meaning of trading is going for a share based on a 'hunch' that it will go up or down but with no real fundamentals. Unless I am REALLY, REALLY sure about a share only would I buy into a speculative situation. But I don't think I can stress this enough, to my readers and to myself. Never trade. I heard about one person who put a million dollars in the sharemarket into a speculative situation and within days he was down to $150,000.

Another good example would be of my good friend's dad. He bought into a stock whom he did not even understand, but he bought it because his friend told him to. From a few dollars the share price dropped to a few cents. It never recovered. Trading is for those who are impatient and just want to get rich fast. They rarely achieve their goals. Only those who are truly chosen to be the lucky ones make it through.

I am sure with all the sharemarket education I have received I can do better than obtain negative returns over time. So why do I need to trade? Good question. I don't. For those unexperienced yet, listen to me for your own sake. Never trade.

Point made.

Heroes Charity Night

My church is organising their biggest rally yet. It is truly going to be amazing as we expect to see up to 600 youths rock up that night and contribute to charity. There are lots of preparations going around right now, and we are already divided into teams so that everyone can play a part in this event. We are partnering together with Koorong.com in helping to donate to charity. For each person that turns up at this event, $1 will go to charity. Yep, just by being there we can help change a live.

Today was a really fun day. My Mondays seem to be special week after week, I wonder why. After having 2 hours of productive classes, Mel, Angela and me went around university giving out flyers for the heroes charity night event. Angela and me went all around uni, passing many friends, unknown people, and my microeconomics tutor, and even my BPA Lecturer, Susanna Ho. For one thing, it was a truly enjoyable experience meeting unknown people, saying hi then trying to get them to take a flyer from me. It is my first time doing something like that, and I truly enjoy it. Angela was way better than me, she was the naturally friendly and enthusiastic type who just went around offering people flyers and they would just take them. The people I met were less friendly, so I had some trouble giving out flyers. Nevertheless, after an hour, we finished giving out almost 150 flyers together!

I'd like to shout out on my blog to anyone who is reading to come for the charity night event. It is this Saturday, 15th September, at 7pm at Box Hill Town Hall. Come, join in the fun, and be a Hero!

Kenjisan Investments created

Hi all, I am proud to finally announce that my partnership has finally been created. It is called Kenjisan Investments. If you are wondering what it means, kenji is actually my chinese name, -san is a japanese word, so people like to call me kenjisan. And Investments speaks for itself. Kenjisan Investments is a partnership officially and legally established on the 5th of September 2007.

The origins of this partnership were as follows. One day my good friend Jeremy Lim came up to me and asked me to start up something so we can invest together. Being very naive but also excited about the prospect, we followed up by investing together in the sharemarket under my name. Soon after, our second good friend, Chan Jun Kai, joined us after I had told him about what we recently did. My recently found good friend, Kelvin Chuah, with whom I have joined various competitions with in university(and won) also decided to join in on this investment journey. With a philosophy and direction in mind, we ran our first investment group together with the aim of being a long-term investor.

Our first three investments started from a humble beginning of $1600, contributed equally by the four of us. We diversified into three shares, and they were recommendations from a financial services company. They were performing badly and over the short-term we were losing out, down to about 15% at one time. But each month since, we have been adding new capital to our group, and our latest investments were based on research done by our own. The latest investments outperformed all other investments and we even managed to break even, offsetting the loss caused by the first 3 shares. To make things even spectacular, since we have invested in the sharemarket, the market index has fallen until the present and is still below the level at which we had started investing.

Soon, our investment pool had grown to a level of $3700. One day, my other friend, Stella Loong, questioned me about our investments. She made me think twice about the way we were doing it, whether it was actually legal to put the investments under my name. Coming to my senses, I felt that it was wrong and that we had to legally establish a partnership. And that was what I just did. A month later, I registered for a Business Name and a Business Number. Our partnership, Kenjisan Investments, with original members Joshua Ng(me), Jeremy Lim, Chan Jun Kai, and Kelvin Chuah was established. My future vision for this partnership is that it will grow, and soon maybe we will be managing an investment pool of more than $10,000.

I look forward to the best. May God be with us throughout the journey which I have committed myself to. Amen!

The start of a national sharemarket game

Two days more to go only for the year's most awaited game of all, the national ASX sharemarket game. So far, so interesting as people have been joining online all over Australia and because of that ASX has set a limit to the number of people who can join the tournament to 24,000. It will be huge as investors or potential investors or investors wannabe all through Australia test their skills against the market.

I have sign up since a few weeks ago already. More excitingly, my dad has signed up. My step mom has signed up. My close friends, Audrey and Sue Ann have signed up. And plenty more people who I have just blurted out at the information about this game whom I am sure would have signed up. It starts this Thursday and I have not yet decided on a strategy!

Actually, I do have one in mind right now. That is, do nothing for 1 week until I have known what others have bought. That would be a good time to buy shares that have gone down, or gone very much down. A good strategy? I certainly think so. There are alot of ways to look at this sharemarket game. Some play it for fun, some play it to win the $5000 grand prize up for grabs. But this game is over a 2 month period only. So it is rather in the short-term, means much speculation. The 'lucky' or skilled player would then win the tournament. We cannot depend on luck, so we would have to be skilled.

I do not expect to win the tournament, but I will certainly try. I believe I have a chance. Knowledge of economics isn't really necessary. We just need to know how to intepret market information in terms of share prices going up or down. And if we can do that, we can already predict the short-term fluctuations in share prices. Not some random walk as tell-taled to us by the famous(and flawed) Efficient Market Hypothesis we all learn in Finance 1.

Sharemarket rallies back up again

Dear Investors,

It has been one week ago when the sharemarket had crashed 11 percentage points. Quite a scary drop in a matter of a week. However, since then, the market has rallied back up to the 6200-level, just 200 points below which it has dropped from. It will just be a short matter of time, in my opinion, before we break that level again and reach new heights. We have just experienced what I would label as a correction. Corrections occur all the time especially in a bull market, just that the one we had experienced was a more severe one compared to the rests.

Why be scared of investing because of a fall? We should always remember that long-term the sharemarket will trend up. Ladies and gentlemen, it is not worth it to keep away from investing because of a single negative aspect of the market. Lets not focus on the one bad, but on the 99 good. We all can profit from the growing economy, so why not invest for your future? I am not saying that you will have to devote significant energies if you want to invest in the market, neither do you need a Commerce degree to invest. There are funds out there known as ETFs that acts like an index. The shares they own are similar to an index's shares. So basically, you can invest in the index. Remember that the long-term view is always upwards. So as long as you put in your money's worth and don't touch it for a long time, around 10 years, I am sure after that period has passed that you would not be disappointed with the growth and dividends you have received throughout that period.

About where we are right now, I believe we are still on our way up on a bull market which is caused by the commodities boom. I do not know when it will end, but it will certainly be a few years before it does. After that when demand for commodities finally lessens, I am sure that prices for commodities won't be that high anymore, and so will revenue for many mining companies. That would bring spending and income lower, hence a recession will follow. That is just the outlook maybe 3-7 years from now. Who knows when it will happen? What you can do now, though, is to not miss out in the profits to be made. It is an opportunity, not a threat. Have a think about it.

Dull times for the sharemarket

I haven't been updating for very long already. Part of the reason was because I have been sick two weeks ago, and now recovering to become well again. Praise God for that. These few weeks though, I've been pretty busy catching up with university homework that I have barely anytime to catch up with the sharemarket. But so happens that this time around, a whole bucket of stuff has happened in the sharemarket. And I've recently purchased my latest share, and am very confident in the future prospects for that company.

If you live in Australia, it is hard not to have followed the Australian sharemarket these past few weeks. Every time you would turn on your tv, you would hear news on the sharemarket with words accompanying such as bloodshed, turmoil, plunge, freefall and many other bloody words. What happened was the sharemarket dropped 11.4% in the last week, signifying one of the largest drops in a week since 1987. The reason for the drop, however, was a little outward. Our market actually 'followed' the US market into correction, as the US market fell because of the latest credit crisis occurring. Nothing really happened to our economy, in fact, because of the budget surplus for this year our economy is actually quite well protected from the credit crisis happening overseas.

So, nothing has changed, except for the fact that the sharemarket fell 11%. For those smart people who decided to fork out some money to buy some shares after the drop would do well over the short-term and the long-term. Share prices are dropping like water but the fundamentals have not changed at all. If only I have cash right now, I would have been scooping up so many great shares at great prices. To name a few they would be BHP, RAMS Home Loans, Rio Tinto and JB Hi Fi.

The market has since recovered by around 5%. Up to date, the market has still been up 4.3% in the year 2007. The outlook seems good for the future, and I don't see the current mining boom going to end anytime soon. This is a perfect time for investing for the long-term. I am glad that I am currently investing. For all those who would want to be investors, now is a good time. Speaking about more recent events, the ASX Sharemarket game has just been up for registration. I was pretty excited finding out about it, and I have called along some of my friends including my family to join in the game. We are given a fictitious $50,000 to invest in shares over a 2 month period and the winner would be the investor with the highest value portfolio at the end of the 2 months. How exciting! I cannot wait for it to start on September 6th.

Tomorrow I shall be discussing my accounting assignment with a few of my close friends. We are to dwelve into Foster's annual report to find some answers to some questions. I really look forward to these kind of assignments I am given. Praise God for the intelligent lecturers who give us homework regarding the sharemarket. For all my readers out there, I apologise for not updating more often, and shall update more often in the future to educate and entertain everyone about the sharemarket and investing.

The dilemma of choice

I am now facing a decision in my investing hobby. It is something like a crossroad, if you ever want to think of it that way. I have to choose between two things, whether I will speculate or invest for the long-term. I know that one way will surely work, but it will require more time. It is quite hard to decide, especially when my portfolio is undergoing a fall because of the recent correction in the market. I look forward to the future, but certainly the present is a hard time that I am going through.

I know that in speculating there are gains and losses to be made. It is only when I am sure that I will gain that I will invest. I have done that fictionally but I don't know what it will be like in reality. Is it any different? I wish someone could give me a word of advice. If I speculate, I will be able to gain back my losses really fast, but I take the risk of losing even more and paying higher tax. Although I really am not sure about this, there is this voice at the back of my head that keeps on telling me that the way to invest is to go for the long-term.

The recent financial advisory seminar I went to by John Hopkins is really still drumming in my ears. The secret to wealth is to compound it over the long-term. What I am really doing today is giving up some leisure and wealth, for the hope of a larger gain in the future. Therefore, I should invest for the long-term where gains will almost definitely come, and I have nothing to worry about.

I will do good to remember that speculators do lose alot of money too. It is said that 80% of speculators end up losing money, so for me to actually speculate would be going against the odds and against all mathematical chances. Am I really that confident that I could beat 80% of people at faring by speculating? I still remember John Hopkins saying that many people don't end up being rich because they speculate in the market. But for the people who patiently wait out their gain end up being really rich, and fairly richer than many others.

As I am writing this, I think you can feel that I am convincing myself that investment is the way to go. It is true, the more I write, the more I feel that I shouldn't speculate. If that means that I might have to wait a longer time before I actually make gains, then so be it. I am willing to wait longer so that I gain wealth in the long-term. I also feel like repurchasing again some of the shares I have already bought. Sounds good that I can reduce the price I paid for my shares by buying it as they are falling. Of course there is a fundamental assumption to that. That is, I strongly believe that the shares will recover over in the long-term. It was I after all who chose them in the first place.

Speaking about shares, this is the first time in my life that I am actually going through a bear market. I wonder how bull markets are like then. But I knew from the moment I started that I started at the end of a bull market, and that things was going to be rough, not smooth. So at least it was expected in a way, and that I hadn't at all did not expect this kind of thing to happen. I accept that things are this way temporarily, but would not be like this forever. I think it has already been 3 months since I've invested. What an exciting 3 months they were, and for the next 3 months to come, I shall face whatever awaits me with a brave heart. I have God to thank for my good health and support as well.

A day to remember

Today was a fantastically hectic day, so busy yet full of fun and I have thoroughly enjoyed it. The reason for blogging is to remember this day, that is Friday the 3rd of August 2007.

I started the day waking up earlier so that I could use the bathroom as my sis and her friend, Vicky, was also in the queue to use the bathroom. I woke up earlier, only to find that my sis was already in the bathroom. Nevertheless, after waiting for her, I showered and got ready for uni. And then left for uni, expecting a full day ahead of me.

Arriving at the Ec & Comm building early, I had expected Audrey to be there already as she is always a tad bit earlier than me. However, she wasn't there. I gave her a call and then waited a few moments before she arrived at the building and met up with me. She was a fun person to chat with while waiting a little longer, and we were soon joined by Sue Ann. We had our ATA tute together, and it was a whole lotsa fun! I kind of blew my tutor away, with remarkable comments on how return on invested capital can be used to measure the usefulness of debt, and that apparently amused Stella alot, together with the whole class.

Next, after finishing ATA, we had to go all the way to the Asia center for our next tute which is Finance 1. Arriving late as I expected, we joined a whole class full of people. There were so many people in this tute. I wouldn't rate it as full or overfull, but over-overfull. There were about 25 of us there. Way too much for a single tute. It was kind of boring but we still had fun, experiencing our second tute together in the same day.

Finally, when tute finished, I had to move on to my next activity of the day. and after leaving and saying goodbye to my friends, I went to the Electrical & Electronic Engineering building for the seminar on Business planning. Some guy called Richard Day, from a company called Melbourne Ventures Pty Ltd, gave us a speech on how to do business planning. It was something totally new I had learned, and wow was it amazing I felt. The seminar was almost 2 hours long.

After that, I had to rush to yet my next activity which was the Entrepreneurial Investment Club Meeting. Today was a special meeting, as we had John Hopkins and Company come over to give us a speech on financial advising and just some general advice about the real meaning of investment and how we should implement it. He and his mates were big burly figures, definitely giving the sense of commanding authority, and businesslike aura emanated from him. It was really interesting, and I had enjoyed it thoroughly, though I had to leave early to meet my friend Rachel.

Arriving early at QV, I then proceeded to the bus stop just to see if anyone was there, and met Khim, my very good friend. We chatted for a while happily, and then was suddenly joined by three people, Derek, some friend I had forgotten his name, and Jordan, who is my very good friend too. Jordan and me then left the rest of them to enter QV to buy a stamp for me, for which I had to use to post a mail for a competition. Jordan then left for bus 305 and he headed home, leaving me alone in QV. I then proceeded to go and find Taylors College, the place where I was supposed to meet Rach.

Travelling along Lonsdale Street, I finally gave up searching independently for Taylors College, as I couldn't find it with my eyes and then proceeded to go into a student accomodation centre to ask for directions. Asking the man if he knew where Taylors College was, he told me "Why yes, it's just opposite". Looking behind him, I realised how blur I was when I saw the sign "Taylors College" glaring above his head. Feeling shamed, I then headed towards Taylors College. A short while later, I met Rach and we then went to QV to buy her some credit and she got some money out from her ATM.

We were going for some travelling. I brought her first to Docklands from La Trobe street, and we walked docklands until it was night time, and I showed her the whole place, and how beautiful it was at night or even during the day. The scenery was indeed very nice. The wind was breezy and the temperature was fairly cold during that time. Overall, we had a nice experience walking by the docks in a sunset condition, but it was getting dark and the sun had already kind of set.

Next, I brought Rach to Federation Square, where we went around touring again. It is her first time seeing Federation Square, and I felt this place deserved more time to hang around at. It is truly a Melbourne landmark area, and cannot be missed by anyone travelling to Melbourne. We went to the building with the Pixar production, but unfortunately we were told that the Pixar production was only for day times. So, we were disappointed but nevertheless moved on. We also took a picture beside a pixar toycar using my phone's camera. Next as we were walking along the Yarra Valley river, we saw the big ferris wheel and suddenly a feeling came over us, and we felt like sitting the ride. Hence, we got onto the ride named "The big sky wheel" where we enjoyed almost 30 minutes worth of going up and down. Rach, was abit scared of heights but I could see she was having fun.

We were getting abit late as we had to meet friends at Lygon street for dinner. We then went back to Swanston Street and trammed all the way up to Arrows Apartment. Then, I met some of her friends Soo Kim and Soo Mei, together with their brother Eugene. They were lovely people, and I enjoyed getting to know them. Apparently, they were from my same church back in KL, but I did not know them. I guess they were much older than me, and had moved to Aus back when I was just a young kid. We then proceeded as a group towards Lygon street, and was joined by Nicholas Yap, another good friend of Rach's. So, it was the group of us, mostly all connected by Rach, heading for dinner at Lygon's. It was a good dinner, we chatted alot and was later joined by Steven, another good friend of Rachel's. We chit chatted all the way until 10pm where I announced I had to leave because I supposedly wanted to meet my 101 friends for supper at box hill. I said my goodbyes to Rach, as I won't be seeing her for some time to come.

As I was walking towards the train station, Sue Ann called me saying that they were going to pancake parlour for supper. I thought they were going to box hill, and I didn't like the decision because there was no public transport to pancake parlour. So i had just left my group of friends, and now I am not sure if I can go to meet my other friends. In the end, I tried to arrange transport from Box Hill but failed, and I ended up missing the last 304 and 305 bus, so I had to take the train from city to Box Hill. Even in the train at that late at night, there were officers checking the metcards of the passengers for validation. Metlink is so sly. At Box Hill, I waited for 286 and then met Jodey, another old friend from East Doncaster Secondary College. We chatted some of the way home, and finally I reached home at around 11 something, a long day out since morning.

God bless those who had long days too!

Entrepreneurial Investment Club

Recently, two days ago, I joined the EIC. It is an investment club with a unique name. It is because the word "entrepreneurial" and "investment" are two words with meanings at each opposite end. Entrepreneurial is related to the more risky, quick and ventures related to business whereas investing is more safe, more guaranteed and the opposite of gambling.

The decision to turn up for EIC's meeting was a fabulous one. I managed to meet a whole bunch of new people who love the same as thing as me, investing. Nowadays, it is hard to find peers who are actually really interested in investing on a same level. The meeting was great as we got to know each other, and the president and vice president introduced the club to us. They started the club two years ago.

The EIC offers both fun and education relating to investments and we got the opportunity to update ourselves on what we know and how far we have gone in learning. The great thing about EIC is that it does not only focus on investing, they also have meeting ups with key people in the industry, they run fund-raising initiatives. They also have outings together and basically we just enjoy ourselves as a club. Looking forward to join the club, I don't only want to receive from them, I want to contribute my skills. I really want to be an active member, not just a receiver.

With this in thought, I look forward to a great time at EIC in the coming years, with investing as my main hobby and interest. Anybody who wishes to run the marathon with me, you can have a look at EIC and decide if you want to join at http://www.einvestclub.com . We look forward to your company.

A new semester

Week 1 has finally passed and I feel much more belonged to university again. This whole new semester showcases a few new subjects for me. For the first time ever, I will be learning Finance in the classroom! I chuckled when I see the professor trying to explain to everybody else who feels so new towards finance what is the role of a bank or the meaning of shares. Personally, I feel it helps to learn it via the classroom, but real learning can only come through practical experience out there in the open.

The other subjects I will be learning are Accounting Transactions and Analysis, Business Process Analysis and Introductory Macroeconomics. For BPA, it is together a whole new subject for me, and I really look forward to discover what they have in store for me. So far I have learnt that, every business needs an Informations System. The reason is to be able to store data, convey data, and intepret data in an easy way through that system. It helps to keep your data in many many files, but an easier way, and it gives less headaches, is to store it in an informations system.

Macroeconomics, the subject I feel most privileged to learn because I am finally understanding what exactly is inflation, and also the meaning of the all-famous term GDP, which stands for Gross Domestic Product by the way. I look forward to 4 months of macroeconomics, it will be a fresh start to a new area of study.

But by far the most useful and my favourite, is Accounting. No other subject can really help me in my investing other than Accounting. It is so practical and actually relates to financial reports. This relevance is what I search for and I know is something that I can definitely take away after my time at university.

I have a feeling second semester will be much better(and less boring) for me and alot others out there. If my co-eds are reading this, wish you all a happy and fun 2nd semester.

Busyness of life

Its been a while since I've last blogged. If you were wondering what has happened, I've just started university second semester and hence I've suddenly got a whole load of tasks on my hands to complete at the moment. Not much has changed, the stock market is still hovering at the moment, and I am still searching for my next investment to make.

Life has got alot of obstacles in my path right now. It is the hardships of life, included together with troubles daily and occasional. Yet, I persevere. I somehow am very stubborn at what I do, what I choose to do. Till the very end, I know that I will be proven right, alot of times I actually do. I've learned to realise that no matter how much the odds are against you, it is not yet the end.

Turnarounds seldom occur but they do occur. If you believe something is right, then by all means, pursue it. Don't be afraid. Trust God, trust you in carrying out your plans. Take risks, because if not, then you will not be going anywhere. If you fail, it is alright. Stand up again, and keep on trying. Time is, after all, not worth much if you do not do anything. And even if you do no succeed at first, the time spent is worth more than any other time.

If thee understands me, thy will know what i am speaking about.

The way Warren Buffett does it

Finally, back to my favourite topic, investing! It's been awhile since I've blogged about investing since my camp. And I'm quite excited to present to you this post this morning. I've just fi'nished reading a book about Berkshire Hathaway(Warren Buffett's company) and the companies in which it consists of. The main theme of the book was to explore the different personas of the managers in which Warren Buffett had bought the different companies from.

When Warren Buffett(WB) buys a company, he doesn't replace the management within. He often jokes that because he only has 9 and a 1/2 employees(one works from mond - thurs) he has no one to send over to the acquired company. That being so, he often buys the company with management in place. There are many great companies out there available at fair prices at which WB won't buy because of lack of the proper management. He looks for owner-managers where the owners are passionate about their businesses. They are all financially-independent but they still work because of the love of it. None of them has to work nor have a contract with WB obliging them to stay on but their whole arrangement is just based on trust and love for the work they do.

WB buys companies that are usually market leaders in their field. They are usually the top of some measurement for their industry in their field. The company might be a jeweller business who sells the most jewelleries per square foot retail space or it might be cheapest and giving the most value to customers among all its other competitors. Those businesses also tend to be private businesses. They are sold to WB because the owners are/were thinking about succession of the business and worried that the business will fail after they're gone. Among the list of buyers, the best one almost all the time would have to be Berkshire Hathaway under the directorship of WB.

The unique feature about Berkshire is that they buy and hold companies for great amounts of time. WB considers those companies he bought "partners for life". He will not sell them but treats it like a wholly-owned business in which there is no way he could sell it. When WB looks at a potential company, he just browses through a few years of financial statements. He doesn't usually visits the headquarters of the company because being so experienced in his field for about 50 years, he knows what he is looking for and doesn't need to do anything further. He would then meet up with the owners and ask them questions about their competitive advantage, their positioning and a little about the history of the company. He pays no regard to the financial statements at that time.

He would then ask them to give him some time whilst he comes up with a worth of what the company is to him at which he regards it as a fair price for the company. He then sends them the price figure and if they agree to it, the transaction takes place. It was just that simple. There were third parties interfering, no investment bankers, no lawyers of that sort. Almost everything was based on trust. WB often was able to get his worth within a few minutes. That amount of confidence in his own ability must have come from God and his many years of experience as an investor.

The whole book went through some of the famous companies WB bought such as HH Brown Shoe, See's Candies, Borsheim's Fine Jewelry, Nebraska Furniture Mart, Justin Industries, Executive Jet, GEICO Insurance, General Reinsurance and The Buffalo News. Berkshire Hathaway can be seen as a parent company which has a long line of fine businesses all hand-picked by WB himself. Berkshire Hathaway's stock is the most expensive stock in the world, listed in the US. If ever you are considering an investment and wealthy enough, a great choice would of course be Berkshire Hathaway.