THE INVESTMENT APPROACH OF CALVIN TAN
SPECULATIVE STOCKS WITHOUT DIVIDEND SUPPORT MIGHT CRASH 90% (DR NEOH SOON KEAN) DYNAQUEST
calvintaneng
Publish date: Thu, 11 Oct 2018, 10:17 PM
calvintaneng
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Hi Guys,
I have An Investment Approach I which I would like to all.
I have An Investment Approach I which I would like to all.
WHY IS DIVIDEND IMPORTANT? From Dr Neoh Soon Kean's STOCK MARKET INVESTMENT
WHY IS DIVIDEND IMPORTANT?
Dividend is important for many reasons. The most important reason has been explained a chapter earlier on, that is, dividend is the only benefit which a shareholder can obtain from a company under the normal circumstances. Profit, per se, is hardly of any use to him directly and the assets are only of value if the company is liquidated which is unlikely in a great majority of cases. Apart from this reason, dividend is important for the following reasons:
1) Dividend is a sure thing.
All too often, investors and speculators pay too much attention to profit forecast. It is amazing that so many malaysian companies have the courage to make profit forecast for many years into the future. What is even more amazing is that so many of the investors seem to believe these forecasts absolutely. It is difficult to make a profit forecast a year ahead, let alone five years or even ten years. Such profit forecasts can only be regarded as extremely shaky.
Let us take a recent example. During 1981, when the "property injection game" was at its height, many of the companies which were first getting into property development business gave very rosy forecasts of future earnings potential, as a result the price of these shares naturally went up to tremendous heights. Since then, the housing market softened considerably and the office rental market has declined 40-50 per cent. In just three years, the profit picture of just about all land development companies has changed considerably. I wonder how many of those forecasts made in 1981 can still stand up to scrutiny today.
Dividend is real and it is something which the shareholders can put to some use. Most companies keep dividend at a level they can afford to pay out irrespective of whether it is a good or bad year and is hence a great deal more certain than profit forecast.
2) Dividend provides a link with reality.
When the market is truly 'hot', few of us can keep truly rational and we tend to be swept along in the general atmosphere of optimism. But the dividend yield of a share keeps us in close touch with the real world. As in the earlier example of OCBC, anyone who keeps his eye on the dividend yield of that share would have realised that the price level was totally unreal. Most people would agree that at a dividend yield of 0.4 per cent it would be better to sell a share and invest the proceed in houses or leave the money in fixed deposit.
In the established stock markets of the world, the dividend yield (ie dividend per share/price per share) usually has a steady relationship with the fixed deposit and its interest rate. It is normal for dividend yield to fluctuate at around 1/3 to 1/2 of the long-term deposit interest rate. This means that when fixed deposit interest is around 10 per cent per annum, stock should sell at a price to provide a yield of 3 per cent to 5 per cent. Taking a look at the yield provided by local shares during bull markets, the dividend yield is usually so low as to be meaningless. Futhermore, one should not forget that fixed deposit of 15 months or longer and fixed deposits in National Savings Bank are interest free in Malaysia while dividend has a witholding tax of 40 per cent applied at source.
3) Dividend provides a 'floor' for shares during bear markets.
Stock markets of the world, especially the Malaysian/Singaporean market is not readily predictable. They can collapse so easily into a 'bear pit' with little warning. If we wished to protect our hard earned capital, we must be defensive in our investment approach. One of the best defense is to buy shares with reasonable dividend yield (i.e. a yield of between 1/2 of deposit interest rate). If we buy a share because it pays a reasonable dividend, our loss is likely to be small even during periods of sharp market decline.
For example, we can buy a share which pays 30 cents dividend at Rm5.00 a share and this gives us a dividend yield of 6 per cent. If the share market goes into a sharp decline, the amount this share can fall to is limited by the fact that it pays a 30 cents dividend. If the price is to fall to as low as Rm3.00, it will be giving a dividend yield of 10 per cent which is about as good as what one can get from fixed deposit but with the additional opportunity to capital gain thrown in.
Most people can see that at that price, the share is probably a good bargain and it is therefore unlikely to fall any lower. It has been my experience that with the exception of mining counters, a dividend yield of 12 per cent seems to be the floor below which most stocks will not drop. In sharp contrast, shares which pay low or no dividend at all do not seem to have any bottom and price decline can hit 90 per cent or more.
4) Dividend yield prevents investors from being side-tracked by irrelevant events.
The Malaysian/Singaporean stock market can be characterised by a large number of events which are of little real benefit to the existing shareholders and yet which excite them greatly. I am referring to the large number of bonus announcements, rights issues, property injections, take-overs, and mergers which have made their appearance in recent years. Most of these events are of little, if any, real economic benefit to the existing shareholders of the companies involved.
Despite this, the price of the shares of a company involved in an event of this nature tends to rise sharply. Later chapters will explain in detail why these events are, in the main, irrelevant and some of them may even be damaging.
For the moment, let us consider the following. According to the dividend yield approach to share valuation, a share can have increased value only if there is a likelihood that its dividend will rise faster than originally expected. We ask ourselves in what way events like bonuses, rights, mergers and re-organisations in themselves can improve the future dividend picture of a company. If these events cannot lead to such an increase, the share surely does not deserve a higher valuation.
It is hoped that readers are, by now, at least partially convinced of the wisdom of buying a share for its dividend. In later chapters, the range of dividend yields which is reasonable for different categories of shares will be examined. In the meantime, I leave you with a short ditty that has been popular for years in the US and is still often quoted as advice to first time share buyers.
A cow for its milk,
Bees for their honey,
And shares, by golly,
For their dividend.
The above passage is taken from the book "STOCK MARKET INVESTMENT" in Malaysia And Singapore
By Dr . Neoh Soon Kean of Dynaquest Sdn Bhd (pp 148 to 150) Published in year 1985.
Calvin comments:
According to Dr. Neoh, "A dividend yield of 12 per cent seems to be the floor below which most stocks will not drop".
In the Deepest Depth of the Lehman Brothers' Crisis after Bear Sterns & Lehman Brothers both gone bankrupt Warren Buffet bought into the safety of Goldman Sachs' Preference shares with guaranteed 10% yield.
In KLSE only one stock can give a double digit dividend yield of 10.06% for the next 3 years of 2016, 2017 & 2018 - Pan Malaysian Corp (4081).
PM CORP, in Calvin's View, Can withstand a Coming Financial Tsunami.
Now take heed to Dr. Neoh's warning, "In sharp contrast, shares which pay low or no dividend at all do not seem to have any bottom and price decline can hit 90 per cent or more".
The characteristic of past bear markets like the Tulip Mania, The South Sea Bubble, The Great Depression of 1930s in USA, the Stock Market Rout of Asian Finacial Crisis in 1997/8 and The Lehman Brothers' Debacle of 2007/8 have witnessed many stocks & index crashing up to 90% or more.
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Discussions
Be the first to like this. Showing 26 of 26 comments
Dr Neoh admitted that he missed the bull run of 1993 because he did not believe what was happening then.
2018-10-11 22:43
please la Calvin...times like this calls for flight to QUALITY
re-emphasise "QUALITY" again
2018-10-11 22:45
Lmao how bout ur “quality” Holland stocks like Perisai and Carimin. Don’t even wanna mention Bjcorp and Mui
2018-10-11 22:55
There is no permanent dividend payout of say 10% or 12%, you have to look at the corporate earnings. Astro reduces its dividend payout when profit drop. So I don't agree that dividend provides a 'floor' for shares during bear market especially if the bear market caused by a recession.
2018-10-12 11:08
he is right dividend can only be issued if there is positive cashflow, operating profit.
2018-10-12 11:11
CASH PAYOUT OF 5 SEN ALREADY CONFIRMED FOR DUTALAND
MORE THAN 10% YIELD ASSURED
HOHOHO!!!
2018-10-14 22:09
but bodoh coward calvintaneg, ur butaland now is back to 55sens.
so how????
lol.........
2018-10-14 22:11
doesnt matter since ur overall record is a joke, bodoh coward calvintaneng.
how abt ur favorite bjc and mpcorp, plantation stocks and many others.
all those stocks u also claim to pay dividends but all is go holland.
really is bodoh coward to the max.
lol..........
2018-10-14 22:47
Blog: Impressive earnings & Price Discounts to Assets of Insas bhd & TA Enterprize (Compare & contrast) By Calvin Tan Research
Feb 25, 2018 02:33 PM | Report Abuse
Now if you have honestly and diligently followed all Calvin buy calls you would have also bought all these
1) PM CORP - 3 times up 100%
2) Super Enterprize (Up 200% & taken private)
3) TheStore (Up 50% and taken private)
4) KULIM (UP 60% and taken private)
5) Pohuat (Power huat) up 200%
6) MyEG (My Emas Gold) Up 100%
7) Nylex (Up 60%)
8) Kheesan (Up 80%)
9) SILK (Up 200%0
10) Jerasia (Up 100%)
11) Padini (Up 200%)
12) Drb Up 100%
13) DRB C39 (Up 200%)
14) Ipmuda (Limit Up)
15) Waseong (Up 100%)
16) SkbShutters (Up 80%)
17) TaWin (Up 200%)
18) Ajiya (Up 100%)
19) TMakmur (Up 38% and taken private)
20) Wangzng (King of Fortress) Up 200%
21) Jaks (Up 300%)
22) KPSCB (Up 40%)
23) Prestar (But it before it turns into a Star) Up 200%
24) Masteel (Masteel of long steel) Up 150%
25) Southern Steel (Up 120%)
26) Mphbcapital (Up 30%)
27) Insas (Up 40%)
28) Insas warrant (Or insane warrant. Up 120%)
29) AZRB (A to Z also have) Up 100%
30 AZRB warrrant (Up 180%)
31) HtPadu (Ht SAPU all Govt jobs) Up 80%
32) Pantech (Up 30%)
33) JTiasa (Up 30%)
34) ASB (A sure buy (Up 70%)
35) Ipmuda (Limit up 120%)
36) Mj Perak (Up 80%)
37) CSCSteel (Up 12%)
38) Dutaland (Buta buta beli duta nanti dapat juta) Up 60%
39) BPlant (Bank Plant) Up 20%
40) Carimin (Up 20%)
41) FACBIND (Up 40%)
42) Harrison (Hurry son) Up 25%
43) Maybulk (Up 80%)
44) Mahsing (the singing horse) Up 20%)
45) Ntpm (Up 25%)
46) Notion (Up 50%)
47) KKB (Up 40%)
48) CMSB (Up 20%)
49) Supermax (Up 100%)
50) POS (up 50%)
51) Priceworth (worth it) Up 100%)
52) RceCap (Best of Banking) Up 100%
SEE. Dr Neoh Soon Kean of Dynaquest said if you can pick 70% out of 100% accurate you should be Ok.
So if you check all Calvin stock pick VERY CAREFULLY you will see more than 70% eventually Chun Chun hit bulls eye!
So far I have stocks making 100%, 200% & 300%
6 Stocks were taken private
1) Super Enterprize
2) Kulim
3) TMakmur (Land of prosperity)
4) Wangzng (King of fortress ) This one exceeded
5) TheStore
6) Weida (latest proposal)
And so far not even one stock has gone bankrupt. The maximum loss in one stock is 100%
See Jaks made 300%, Prestar 200%, Super Enterprize made 200%, Pohuat (200%). Either of these stocks can cover 2 total loss
SO FAR NONE IN TOTAL LOSS YET
SO PLEASE OPEN YOUR EYES AND SEE.
Calvin = Call Win
2018-10-14 23:01
but bodoh coward calvintaneng, u alrdy telling a lie on ur csc steel.
u gave a buy call in feb this yr when csc steel is 165 and now csc steel is only 116.
what 12% gain u talking abt???
so r u a liar then????
Posted by calvintaneng > Feb 12, 2018 04:41 PM | Report Abuse
COMPANY NOW FACING STABILITY IS READY TO INCREASE DIVIDEND PAYOUT!!
2018-10-14 23:45
just in case the bodoh coward delete or amend his writings.
Posted by calvintaneng > Oct 14, 2018 11:01 PM | Report Abuse
Blog: Impressive earnings & Price Discounts to Assets of Insas bhd & TA Enterprize (Compare & contrast) By Calvin Tan Research
Feb 25, 2018 02:33 PM | Report Abuse
Now if you have honestly and diligently followed all Calvin buy calls you would have also bought all these
1) PM CORP - 3 times up 100%
2) Super Enterprize (Up 200% & taken private)
3) TheStore (Up 50% and taken private)
4) KULIM (UP 60% and taken private)
5) Pohuat (Power huat) up 200%
6) MyEG (My Emas Gold) Up 100%
7) Nylex (Up 60%)
8) Kheesan (Up 80%)
9) SILK (Up 200%0
10) Jerasia (Up 100%)
11) Padini (Up 200%)
12) Drb Up 100%
13) DRB C39 (Up 200%)
14) Ipmuda (Limit Up)
15) Waseong (Up 100%)
16) SkbShutters (Up 80%)
17) TaWin (Up 200%)
18) Ajiya (Up 100%)
19) TMakmur (Up 38% and taken private)
20) Wangzng (King of Fortress) Up 200%
21) Jaks (Up 300%)
22) KPSCB (Up 40%)
23) Prestar (But it before it turns into a Star) Up 200%
24) Masteel (Masteel of long steel) Up 150%
25) Southern Steel (Up 120%)
26) Mphbcapital (Up 30%)
27) Insas (Up 40%)
28) Insas warrant (Or insane warrant. Up 120%)
29) AZRB (A to Z also have) Up 100%
30 AZRB warrrant (Up 180%)
31) HtPadu (Ht SAPU all Govt jobs) Up 80%
32) Pantech (Up 30%)
33) JTiasa (Up 30%)
34) ASB (A sure buy (Up 70%)
35) Ipmuda (Limit up 120%)
36) Mj Perak (Up 80%)
37) CSCSteel (Up 12%)
38) Dutaland (Buta buta beli duta nanti dapat juta) Up 60%
39) BPlant (Bank Plant) Up 20%
40) Carimin (Up 20%)
41) FACBIND (Up 40%)
42) Harrison (Hurry son) Up 25%
43) Maybulk (Up 80%)
44) Mahsing (the singing horse) Up 20%)
45) Ntpm (Up 25%)
46) Notion (Up 50%)
47) KKB (Up 40%)
48) CMSB (Up 20%)
49) Supermax (Up 100%)
50) POS (up 50%)
51) Priceworth (worth it) Up 100%)
52) RceCap (Best of Banking) Up 100%
SEE. Dr Neoh Soon Kean of Dynaquest said if you can pick 70% out of 100% accurate you should be Ok.
So if you check all Calvin stock pick VERY CAREFULLY you will see more than 70% eventually Chun Chun hit bulls eye!
So far I have stocks making 100%, 200% & 300%
6 Stocks were taken private
1) Super Enterprize
2) Kulim
3) TMakmur (Land of prosperity)
4) Wangzng (King of fortress ) This one exceeded
5) TheStore
6) Weida (latest proposal)
And so far not even one stock has gone bankrupt. The maximum loss in one stock is 100%
See Jaks made 300%, Prestar 200%, Super Enterprize made 200%, Pohuat (200%). Either of these stocks can cover 2 total loss
SO FAR NONE IN TOTAL LOSS YET
SO PLEASE OPEN YOUR EYES AND SEE.
Calvin = Call Win
2018-10-15 00:09
the bigger they are the harder they fall.blue chips no down as much as penny stocks yet....beware
2018-10-25 12:41
Great company at fair prices will come soon
Public Bank got 25% commercial property loan exposure
If public bank kena hit by 4 quarterly losses its share price might crash below rm10
So just keep more cash and wait
As for value dead stocks like Talam which is at all time low it won't fall much
2018-10-25 12:44
Many will fall 90@ that are high flyers now
Many fallen ones will be seeds for future bull stocks
WAHAHA
Sooooo happy now!!
2018-10-30 09:42
might crash, might this might that.....there is no value is talking might this might that....
all forecasts should be accompanied by time, start and end dates be as specified as possible.....and be falsifiable, that is the way to improve skills in forecasting........
2018-10-30 10:05
even stocks with dividend support can crash. Just look at 1997/1998 crisis.
2018-10-30 12:02
penny stocks crash already,so buy lo,blue chips no crash don't buy lo.....hehe
2018-10-30 12:32
calvintaneng buy call on bina puri at 0.4.
today is 0.19
loss 50%
all hail calvintaneng
2018-10-30 16:15
calvintaneng famous holland buy call
1. binapuri
2. UEMS
3. BJCORP
4. Dutaland
5. TA
2018-10-30 16:16
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
calvintaneng
A dividend yield of 12 per cent seems to be the floor below which most stocks will not drop. In sharp contrast, shares which pay low or no dividend at all do not seem to have any bottom and price decline can hit 90 per cent or more.
..............................Dr Neoh Soon Kean
2018-10-11 22:20