https ://dividendguy67.blogspot.com/2024/04/tenaga.html

A bit of trivia.
I started investing in TENAGA on 28 Apr 2021, so, it's coming to 3 years now.
Over this period, my Total Return (Price gains + Dividends) from TENAGA is 15.18% per annum CAGR.
If I exclude the dividends, then, Price Returns = 10.65% per annum CAGR.
This suggests that the Dividend returns = 4.53% per annum CAGR.

The Dividend returns is not too shabby - didn't match EPF but beats FD hands down still with 4.5% per annum over this 3 year period.

But the Price gains is more than double the Dividend Yields.

Moral of the story? Both Dividend Yield and Price gains matters.
For a solid dividend yield stock, buy when price is low. It helps.

PS. My original conservative return target at entry was around 9% per annum. This one wins faster than I had expected.

For those trading LCTITAN using technical charts, all concerns expressed are fair points.

This week has closed lower than 1.10.
- Yes, the technical bias is downwards.
- Yes, nobody knows where the next bottom is because in a downtrend, supports tend to get broken.
- And if one backtest to Mar 2019 when the strong 4.10-4.20 support got broken the next 12 months was very painful.

So, what should we do. A few other observations:
1. I am underweighted - my neutral position size is 3% of my portfolio and it is now 2.1%. This % comes down because LCTITAN fall at a faster rate than my total portfolio with other stocks.
2. If we go back to March 2019, there was still a high probability win when we combine technical tools with our fundamental beliefs on this stock. When it fall, let it fall until it finds a new base and then accumulate following position size rules. If we are disciplined, the next 24 months also turned out a winner.
3. Back in 2019, the NTA was higher than Price but not much higher. Hence a big fall is not unexpected.
4. Today, the NTA was very much higher than RM1 vs NTA > RM5 - huge cash converted to fixed assets. Less likely for further fall. In fact, this time we see the break below 1.10 has lower volume, suggesting less belief of a much larger fall. Nobody knows of course. Small initial reactions can sometimes gather larger volumes to push down, but given the huge gap and there is a business behind this stock, the odds are less of this happening.
5. This suggests Principle of Alternation is more likely to occur in 2024-2026, than 2019-2021.
6. In other words, as I have anticipated and prepared for this upcoming move, I continue to execute my strategy i.e. lower prices is an accumulation zone, but not greater than my neutral position size.
7. This is because, nobody knows if this stock is going to zero - I think 99% chance it won't, but I am never certain but odds are extremely good that in the next 2-3 years, I will win if I stick to my fundamental + technical strategy. The win size though may not be large (it depends on market) and the time to take to win is uncertain. But I am confident with my approach in the long run for 100 stocks, because Technical Analysis on its own has limitations.

Everyone should have their own strategy. Good luck over the next 3 years.

@warchest, @bbc, it's not about individual who can handle/cannot handle. CEOs and senior management by nature are resilient people. Typically Rohit and other CEO quit in the past likely due to "differences in views" masquerading as "personal reasons" / "better opportunities". It is unlikely that all these CEOs are wrong and the shareholder is right after so many CEOs. More likely, the shareholder demand is wrong / not suited for this line of business.

@ambrose, Malaysia ageing population is not a factor at all. There are many other older (ageing) countries with successful insurance industry.

@donny, it's the same pattern with past CEOs, Rohit isn't the first. The problem is CEO do what shareholders want them to do. They are creative people to extract short term results as what shareholder wanted, but insurance business doesn't work like that when constantly extracting short term results. Insurance is predicated on a large enough size insurance pool, small pools like 400 million GWP have huge hurdles long term.

Divestment is probably going to be good news for Tune, as current shareholder is the problem with its unrealistic expectations on its CEO. It needs both proven Management, Board and proven Shareholder to make Tune successful.

Agree with Sheldon, that in the hands of the "big boys" who can afford to take a longer term view to fundamentally grow the business, that insurance license will come in handy. Problem with Tune is its shareholder who is not willing to wait to do what's necessary to grow its insurance business. If you keep demanding your new CEO to turn a profit in the first year, and not invest in the longer term, you can't grow sustainably in the mid term.

Tune as a Group, is a small company, with Gross Written Premium (GWP) of only RM400 million or so average the past 5 years. You can't get that much profits from such a small GWP, the problem is relatively high fixed expenses compared to allowances and profits that can be priced in the GWP. Shareholders need to have a longer term plan, otherwise, new CEOs that brings with them short term "tricks" may show good result in the first year or two but inevitably sets the company back. Both Ms Khoo and Rohit (ex-CEOs) took short term views but after 5 years combined, has not really changed Tune fundamentally at the business level.

As they say, when there's blood on the streets, odds are better than 50/50 that we'll see a surprise on the upside.

I was wrong about Rohit not leaving, but the news of him leaving allowed price to fall and let me get in at a lower price. I'm sure others will have a better entry price. This is a speculative trading position (hence small).

POHUAT closed highest for the week (1.51) since last swing high in May 2022. Enough to edge my portfolio to make new all time high again today. Thank-you Mr Market!

Nice thing about under-valued, high dividend yield stock is that the longer we hold, the more dividends we received, the lower our average buy cost gets without doing anything.

The dividend is indeed powerful. It lowered my Average Buy Price from 85 sen down to 78 sen. Today, LIIHEN closed 1.06, highest close. This plus 17 other green stocks to offset 16 red stocks, is enough to edge my portfolio to make new all time high again today. Thank-you Mr Market!

Haha ... today, FPI went ex-div, and as I mentioned in my article a few days ago when price was 3.13+, I mentioned odds are good for price to drop to 2.85 and 4 days after I penned the article, it came true! .... LOL.

Nothing's changed for me. Expected price action. From company's left pocket to my right pocket.

Notwitstanding, my portfolio continues to make new all time high today. Thank-you Mr Market!

Yeah. Nice. Thanks to TENAGA and 22 other green counters to offset 12 red ones, my portfolio made new all time high again today. Today is the 5th time in April it made new all time highs. What a wonderful month it has turned out to be. Thank-you TENAGA and thank-you Mr Market!

Similar price action happened 13 Feb 2023, slightly over a year ago. Then, stock came back down hard.
Interesting to see what tomorrow brings. Normally, it shouldn't repeat, but it's hard to say as this would only be the 2nd time.
Sometimes, if a stock wants to rise to make new highs, it needs to shake off the weak holders first. This can be like today's and Feb 2023 price action to fool people to think this is just one-time wonder, one day wonder. After 2, 3, 4 times, traders will queue to sell and then, when enough traders does that, the stock eventually take off with a lot of traders without a position.

For me, I'm playing the long game. The counter is ridiculously under-valued. Lower price is a buy in my book, trouble is the volume on this counter is so thin, it's hard to accumulate.

Yes, closed 4.29, +4.13%. Thanks to TAANN and 22 other green stocks to offset 12 red stocks, my portfolio made new all time high again today. Thank-you Mr Market!

MBMR continues to edge higher. +4.93, +1.44% today. Nice. Thanks to MBMR plus 22 other green stocks to offset 12 red stocks, my portfolio made new all time high again today!

HLIND closed 10.94, touches 11, +2.24% after ex-div 50 sen dividend recently. What an amazing counter. Thanks for HLIND and 22 other green stocks to offset 12 red stocks, my portfolio made all time high again today! Thank-you Mr Market!

Certainly not well from last QR, and high odds of more pain to come.
Markets though is forward looking, and I think you want to consider to have a neutral position (3% capital) at 1.18 Fibonacci support.
Lower prices should increase your holdings, due to the massive Net Cash and its cyclical history.
There are other risks.

I blog about this here - http s://dividendguy67.blogspot.com/2024/04/chinwel.html.
Hope everyone makes more monies longer term.

I own FPI at marginally above neutral position. I like the stock but I would also remind myself not to be too greedy.

One thing to note is the Group MD is 68 years old Taiwanese, and last year a Board member retired. The Group MD apparently was appointed to his position in 1989 ... so, this may not exactly be a young, agile or dynamic company despite small cap. If the Group MD was say 10-15 years younger, with this kind of fundamentals and price action, I would load up even more, but as it is now, it's still good, and so, still deserve a full neutral position (which to me is around 3% capital) and maybe even up to 4% capital position due to its excellent fundamentals, financials, dividends, chart, etc.

Documenting my evolving thoughts here for future reference - http s://dividendguy67.blogspot.com/2024/04/fpi.html

MBMR closed 4.88, +2.95%. Nice. Thanks to MBMR plus 23 other green stocks to offset the 9 red stocks, my portfolio made a new all time high again today. The paper gains on this stock is now 3 times my largest ever trading gains, simply because of Position Sizing. I typically trade much smaller size than my investing size and it is the sitting and doing nothing that delivers the biggest gains for me when we are in a bull market like MBMR. Sit tight and enjoy the ride.

Nice bullish engulfing close today. +4 sen +2.16%, striking distance to potentially break out above 1.92 which it couldn't break out since 2020. That was an ultra strong resistance that held for 3.7 years. If it convincingly breaks through this resistance, this stock can run. Best thing to do is still to sit tight, relax and enjoy. Thanks to UOADEV and 20 other green stocks to offset 12 red stocks, my portfolio made new all time high again today!

TALIWRK back above 80sen, closing at 0.815. Strong +3.16% gain.
Thanks to TALIWRK recovery and 20 other green stocks to offset 12 red stocks, my portfolio made new all-time high again today.

Another green close. Thanks to LIIHEN and 20 other green stocks to offset 12 red stocks, my portfolio made new all time high again today!

I prefer UOADEV to pay me the excess cash as dividends, so that I can reinvest the cash received to earn much higher returns than 5% return on equity that UAODEV does now. Even if that cash is reinvested back into my EPF, I can expect to earn higher than what UOADEV can do. Hence, UOADEWV management should really consider paying out its excess cash as special dividends so that shareholders can reinvest that to earn higher returns that what UOADEV can do at present.

An example of Buffet's quotes can be gleaned in his shareholder letters. See 2020 letter to shareholders:

"BNSF has paid substantial dividends to Berkshire – $41.8 billion in total. The railroad pays us, however, only what remains after it both fulfills the needs of its business and maintains a cash balance of about $2 billion," Buffett wrote. "This conservative policy allows BNSF to borrow at low rates, independent of any guarantee of its debt by Berkshire."

The point is that he doesn't like BNSF to hoard huge amounts of cash, if the railroad doesn't know what to do with the excess cash. He demands BNSF to pay the excess cash out as dividends, so that he can receive that in cash and then reinvest to generate a higher return. In short, he insist on BNSF to be capital efficient. Hoarding excess cash is inefficient.

Dear RJ87,

Buffet/Berkshire doesn't pay dividend because for every $ retained, he is able to generate a high return on equity.

Unfortunately for UOADEV, it's NTA is high around 2.17, because of its Net Cash.
As you said, it's EPS is around say 11 sen (it was higher in the past).
The Return on Equity is only 11 / 217 ~ 5% which is on the low side.

A healthy property company with a sound business model should not be afraid to take up a small debt if need be, since it should be generating a profit every year.

Consider the alternative if it were to retain only 10 sen (or even nil) in Net Cash i.e. still have access to huge amounts of cash by borrowing if need be.

Then, it's NTA would drop from 2.17 down to say 1.5.
Then, the Return on Equity rises from 11 / 150 ~ 7.3%. That's better than 5% you saw earlier (but 7.3% is still not as compelling as many others).

In short, if Management doesn't know what to do with the Net Cash, then, a top quality management would consider giving it back to shareholders. Buffet has repeatedly said this many, many times, in case you are not aware of this concept.

I already collected at 3.26 average (excluding dividends). Nothing to do now but just sit tight and enjoy!

LIIHEN +6 sen, or +6.19% close today. Thanks to LIIHEN and 21 other stocks in green to offset 9 stocks in red, my portfolio made new all time high again today!

For those of you who are still thinking of "Averaging Down", here's an article for you.

http s://dividendguy67.blogspot.com/2024/03/should-you-average-down-or-not.html

Euan Smith has to make a decision in next 3 years - will he be the CEO that transformed ASTRO in the eyes of institutional investors, or will he be booted out in next 3 years.

If ASTRO wants to be regarded as a stock for institutions, it has to do many things, one of which is reverse stock split. Right now, it's clearly a penny stock. It needs to reverse split at least 10:1 to bring it back to RM2.95 instead of RM0.295. Then, recapitalize at RM1.00 (equivalent to 10 sen) to dilute existing shareholder's share and if so, I'll subscribe at 10 sen.

TTM EPS is 0.71 sen. In Q3, they threw the kitchen sink and reported a loss of 0.90 sen. But in Q4, they make back 0.85 sen which looks big, but if sum H2 together, it is still a net loss of 0.05 sen i.e. this company is still LOSING money in the last 2 quarter.

In my 10 sen valuation, I was very generous by awarding ASTRO with 1-2 sen earnings, but remember, last 2 quarters, they didn't make money but lost monies by 0.05 sen. TTM is 0.71 sen, so to get to 2 sen, they will have to TRIPLE the effort of TTM i.e. it would be against the odds to bring it back to 2 sen per year SUSTAINABLE. Price might fall to 10 sen first before settling down at 20 sen (10 times EPS of 2 sen, remembering right now it's only 0.71 sen and last 2 quarters are NEGATIVE).

For declining revenues and declining earnings, plus declining DPS, you don't really want to pay 5 times earnings. If EPS is 1-2 sen, that's 10 sen max. Its NTA is 21 sen, so, if you follow Graham, you want to invest at 70% NTA or 15 sen. It's currently 29.5 sen. Sure it's profitable, but if earnings continue to decline, there's no margin of safety ... I sold half my holdings at 40 sen and will probably hold the other half till 10-15 sen before I consider adding. This might take a couple of years or so ... thankfully, I was highly disciplined in position sizing, and despite owning ASTRO that loses monies, it didn't stop my portfolio from making new all time highs many times since last year.

Press release - CEO still throws big words like "world class content" ... then went on to quote examples of world class "All Stars Gegar Vaganza, Malaysia’s No.1 show, needs no introduction ..". Seriously? You think across the border, All Stars Gegar Vaganza needs no introduction??? Hahaha ... he continues to live in an alternate universe. Guess nobody in Astro has the balls to tell him otherwise.

Still downtrending. Fundamentally still overvalued for declining earnings, declining revenues, declining dividends. Still expensive relative to its NTA of 21 sen.

CEO, Board, management still dreaming. They still aim to be Malaysia's No 1 streaming platform. Still spending trying to achieve this. Hahaha. Just google Malaysia's top streaming platform. I can't find Astro inside that list. Instead I see Netflix, Disney+Hotstar, AppleTV+, viu, all recognizable name but Astro I can't find. Sad ...

My strategy for CARLSBG is longer term. At RM18.54, the dividend yield is 5% which is attractive. Past 10 year CAGR on its business metric is decent, ranging from C- to B+ depending on the metric. It's a boring stock that makes it great for long term wealth accumulation. Long term chart wise, I see the bottom around RM17, but it could take months, or even 1-2 years to get there - I really don't know about the timing.

I blog an update on this stock here - http s://dividendguy67.blogspot.com/2024/03/carlsbg-update.html.

At the bottom, it will form around 3% of my portfolio - I used to own this at 2.4% of my portfolio but because it made new low and because my portfolio grew, it is now 2.2% of my portfolio (excluding past dividends received). As price falls, I expect this % to fall, and when it gets to my accumulation zone, I will add and eventually target 3%. No rush, this is a long term play.

If I have 10 years to work with and if I'm LCTITAN malaysian management, here's what I do.
Next year, throw in the kitchen sink.
Book all losses and book huge loss provisions to report the biggest mother of all losses in 2024.
Book it so big and write off so much that you engineer sustainable earnings over the next 3 years by unlocking provisions.
The stock will crash and rise back up.
But right now, it needs to shake off a lot of weak holders first.
Still early stages.

Current low price is not about losses. It's something else.
Why?
Look at past 7 consecutive quarter loss - total is only 70 sen. Averaging 10 sen per quarter loss.
This is tiny.
The current gap between NTA and current price is at least RM4.
For this gap to be bridged, that's 40 consecutive quarters.
That's 10 years!
It needs 10 years of consecutive losses, to bring the NTA down to current price.

So, to me, it's not about losses.
It's definitely something else.

If there is a sale, for sure the price will shoot up. But market is saying it won't happen, despite opinion and speculative pieces.

If prices stay low, it means the sale is unlikely to happen. Don't hold your breath for this to happen.

Stock NTA is 8.75. Still holding.

MAYBANK is still in bull market. Not interested in selling before ex-div, and buying back after ex-div. The rule about bull market is sit tight. In time, what goes down will go back up and make new highs, if all else equal.

So, I only have 1 key rule. Don't lose money.

Means what?

Means don't average down blindly when you are losing.

If you don't average down, you'll never have big losses.

And if you learn how to fish yourself, in a year, I find 50 ideas quite easily. 1 wrong idea, still got 49 other ideas. My actual win rate is in the region of 85%+. I include LCTITAN since despite entering at RM2, my average cost is now RM1.14 and since today closed RM1.15, it's a win!!!

With the positive bias from a decent dividend yield portfolio, plus a win rate much higher than lose rate, plus never ever lose big from any one trade, your portfolio is just going to make new highs quite regularly. The goal is to beat EPF by 1%-2% but in reality exceeding this significantly more. So, it's not exciting. It's kind of boring. So many others make much, much larger % gains. But I can invest much bigger $ in this. Scaleable. Same strategy whether 5 digit, 6 digit, or 7 digit. Hopefully can keep doing this for long periods of time, to keep accumulating higher than EPF rate. It's subconscious for me now for a few years already.

Think of it this way. When your entire portfolio dividend yield is 5.4%, you know you have an edge. After 1 year, if price don't fall, you earned 5.4%. That's a positive edge.

So, I trade here and there occasionally. Like RAPID - I bet 0.5% capital and now, I lost like 0.3% capital. 0.3% capital is small relative to dividends. Each month, on average, my dividends is around 0.45%. So, whilst RAPID loses over 60%, it is tiny and in less than a month, I made that up from dividends elsewhere. So, my RAPID is not a permanent loss, because more than a month has passed and I have forgotten about my RAPID.

Basically, you want to put yourself in these type of position. Even when you are hugely wrong, you still grow your monies.

And more importantly, is prepare for more price falls.
Let say price falls to 97 sen.
What will I do?
Very likely, as I said, I have already looked at the long term charts.
It will tell me to buy again at 1.00. Smaller.
The great thing about being diversified so much is your emotions doesn't come into the picture.
What's the worst loss that I can have, if price falls to 97 sen, when average cost is 1.14 and at 1.15 it is 3% capital?

1. When price falls from 1.15 to 97 sen, the 3% capital shrinks.
- If you don't average down, your loss shrinks.
- If all else is equal, now, your LCTITAN shrink to around 2.55% capital.
- So, you lose 0.45% capital.
Big deal.

2. Here, you use your chart reading skills. Has it bottomed? Because price action is key.
I can't tell in advance. I have to wait until the chart forms itself. Have to wait for other things.
The decision on when to average down is usually a bit trickier if it's not obvious from long term charts.

So, here, my trading plan is hazy. I'll have to wait and see. But regardless, losing 0.45% capital is tiny. I have many other stocks that offsets these kind of losses. Hence, overall, these tend to rise more than fall because of the higher win rate.

And dividends help.

There's also another principle regarding statistical edge.

If you have an edge in trading - let say 60% win rate, 40% lose rate (my win rate is much higher because I combine fundamentals).

You want to make as many constant bet size as possible. (Hence I diversify with over 33 high dividend yield stocks). The more you "trade", the greater the odds of winning to grow your total portfolio.

This is another key principle for me.

There's a few principles regarding position size. Here's a theoretical example (not talking about LCTITAN anymore).

1. If you first entered at RM2 with 1 lot, and bought RM 1 with 10 lots, your average cost is going to be closer to RM1 than RM2. It has an average cost of RM1.09.

2. If price goes to RM1.5 and you sell 5 lots (nearly half), your average cost will drop to 75 sen.

3. If price goes back down to RM1, and you buy back 5 lots, your average cost will rise to 86 sen.

If you understand this principles, and apply them to certain type of stocks, then, you can get the kind of results that I got. It's mathematics. Combined with charts. Combined with what you know about cyclical stocks and fundamentals.

It's hard to imagine, if your maths are not strong.
I first entered LCTITAN at RM2.

How can my position be profitable now, with an average cost of 1.14?

The answer is mathematics ... plus a combination of buy lower, sell higher, and relative position size.

If you haven't experienced this, it means you have not traded enough nor understand the mathematics.