Saturday, February 28, 2009

Why do Rich People commit suicide during recession?

This is one of the articles publised in our latest FREE ebook ( eMoney Tips Apr 2009 edition).  Click here to download now !   There are many more interesting articles in there. 

Just want to leave comment ?  click here !

Allow me to start by expressing my sincere condolences to …

Adolf Merckle (March 18, 1934 – January 5, 2009) was a businessman, and one of the richest people in Germany.[1] He was educated as a lawyer but spent most of his time investing. He lived in Germany with his wife and four children. Merckle made a speculative investment based on his belief that Volkswagen shares would fall, when, in October 2008, a support of Volkswagen by Porsche SE sent shares on the Xetra dax from 210.85 to over €900 in less than two days, resulting in losses estimated in the hundreds of millions of dollars for Merckle. Adolf Merckle committed suicide on January 5, 2009 by throwing himself in front of a train near his hometown of Blaubeuren

Patrick Rocca seemed to have it all. A poster boy for Ireland’s Celtic tiger economy, he lent Bill Clinton his helicopter whenever he was in Ireland for a round of golf and rubbed shoulders with Tony Blair at gala dinners. Mr Rocca, 41, died from a single gunshot to his head at the family home in Holmeleigh, an exclusive residential enclave on the edge of Dublin’s Castleknock Golf and Country Club. His end was as swift and dramatic as the reversal of fortunes for some Irish banks, including Anglo Irish, which the Government is nationalizing and in which Mr Rocca was said to be heavily invested. He waited until his wife took their children to school before he shot himself in the head.

Outside Chicago, real estate mogul Steven L. Good was found dead in his Jaguar, apparently from a self-inflicted gunshot wound. Good was the chairman and chief executive officer of Sheldon Good & Co., a major U.S. real estate auction company. The death comes amid great turmoil in the country's real estate industry. In his role as chairman of the Realtors Commercial Alliance Committee, Good commented on tough conditions last month at a business conference.

René-Thierry Magon de la Villehuchet, also known as Thierry de la Villehuchet for short (born in Saint-Malo, France in 1943, died in New York City, New York USA 23 December 2008) was a French nobleman, money manager and businessman, and one of the founders of Access International Advisors (AIA Group). The AIA Group is a research analyst investment agency that specializes in managing hedged and structured investment portfolios that involve commercial physical and biological research.[1][2] On 23 December 2008, de la Villehuchet reportedly committed suicide.[3] He was found dead in his company office on Madison Avenue in New York City.[4] His left wrist was slit[5] and de la Villehuchet had taken sleeping pills, in what appeared to be suicide.

The list just goes on and on …

Don’t get me wrong, it is not like ALL rich men go kill themselves when things go wrong. People who lost their life during this Great Depression are mostly NOT rich people actually. Neither is there any disrespect to these people here. These souls were all once great men and some were even indirect great mentor to me personally. It takes a very special and strong characteristic for a person to reach this big, this rich and this successful in life! A very strong driving force indeed. Unfortunately, sometimes this same characteristic drives them over the edge also.

Of course each of them would have a very personal reason for what they did and the absolute truth is that we will NEVER know what really happen! However, knowing some of them personally and even served some of them before, they probably won’t mind if these of their recent LAST stories can be used to instill some good for the rest of us.

Some people would say the cause is Greed. Some would say just a bad day, One Big Bad Turn. Some surviving financial experts even blame the deceases with all kind of cursing words. However, the most neutral comments come from psychologists who study human and society behavior and most of them said, “A block in mind that is stronger than all other beliefs at that particular moment”. There are many possibilities for the ‘block’. It could due to pride, lost of confidence or many others. But the fundamental is THEY THINK They Lost More Than They Could Afford in whatever they care most !

Well, whether they think wrongly or they really lost that much or they lost what they care most …

… that is all due to Lack of a Personal Finance Plan!

One may have great passion, great forecast and great business plan which include one of the world’s best financial plans for what they do best, but unfortunately NOT a PERSONAL one. As a matter of fact, most of their decisions were correct and that was how it got them to where they were – a large empire! Sometimes in business it takes guts to overcome risks. And every cycle in a business major decisions making may mark a new era or fall flat on their faces to start all over. Like a rolling snow ball. It gets bigger and bigger rolling downhill but it only takes one small valley to slow it down or sometimes completely shatter it.

Take a step back, it is actually NOT fair to claim they DO NOT have personal finance plans at all. They do have insurances and investments, what more could they possibly should have had? Sometimes it’s the little difference that makes a big impact.

Its due to Lack of a REAL SOLID Personal Finance Plan !

Income shouldn’t matter in your personal life long plan because they changes and may change out of your control! If you follow the model shown below, income is NOT a part of personal finance plan. Income is a pre-requisite but it is not a PART IN your personal finance plan. So no matter how much or how little income you are earning now, you can practice personal finance planning and you should. The first step to start is to setup an automated way to save your income, either in percentage or a fix amount depends on how consistent and the type of your income. ( read more in ). So no matter how much you are earning, if you do not have this first step setup, you are most likely NOT have a REAL SOLID Personal Finance Plan yet even if you have bought insurance, mutual funds, stocks and properties.

So if you are still responding, “I could have easily earned more in my business/investment” when someone is “selling” you personal finance vehicle, you are most probably do not have a REAL SOLID ground at a PERSONAL level yet. You are still focusing too much on Income and not your life long plan.

If you are still comparing and deciding whether to buy a property or mutual fund, gold or insurance etc. You may still not able to distinguish the difference between income and personal finance plan.

If you still think multi-millionaire is your main target now and thinking hard all sort of ways to get rich without setting up the First Step mentioned above, you are still missing one big point in your life. One that may save your life and retain the happiness of the people who love you … ONE day !

So go now to setup a standing instruction transferring part of your income into another account that you have limited withdrawal capability. Then forget about it most of the time in any particular year.

Livermore told anyone who'd listen to follow his Wall Street strategy -- increase your position as the market moves in your direction, and quickly cut your losses. But he often failed to heed his own advice. He lost two fortunes, accumulated a third, and lost that, too. In 1940, in the bar of the Sherry-Netherland Hotel in New York City, he shot himself to death, leaving $365,000 in debts and a rambling, 8-page suicide note to his second wife. "I am a failure. I am a failure. I am a failure," it said.

The 65-year-old Frenchman, an aristocrat and professional investor, was deeply shamed and depressed, friends and family said. He felt he had ruined the lives of his clients, many of whom were friends. His brother, Bertrand, called his brother's suicide an honorable act. "At first he thought he'd be able to get the money back," Bertrand said in a Paris phone interview with The Associated Press after his brother's death. "Gradually he realized he wouldn't be able to. He trusted Madoff completely."

old note :

This is an article written and will be published in a FREE ebook in the making in respond to kclau .... once the ebook is released or my submission is rejected, the content of this article will be released in this post. Stay tune .... while enjoying the other contents.

Thank you for your time !

One of the Darkest day for KLSE:KNM

I recommended before KNM is a worth buying stock because its current price is below its worth. But today marks one of the darkest day for such a recommendation. Let's face it straight flat to the face and see what happens ...

First of all, the support lines for KNM is 0.40 followed closely by 0.395 as shown in graph below.

KNM has been re-bouncing or more correctly lingering around 0.40 support line for quite some time. A lot of speculator are waiting to queue at 0.40 but never got their wishes come true. Until today and they regreted their wishes were granted. KNM drops all the way to 3.70

Why and What Happen ?
First of all, let's review what support lines mean. It means the price may bounce back up when it touches that level but if it break that level then it will fall much further. In KNM, there is no apparent next support line and it will go FREE FALL if it breaks 0.395 !! Which in this case, once KNM drops below 0.395, it goes straight to 3.70 !!

Why and What Happen ?
Actually the answer was anounced later at 6:17pm

Notice of Shares Buy Back - Immediate Announcement

Date of Buy Back : 27/02/2009
Description of Shares Purchased : Ordinary shares of RM0.25 each
No. of Shares Purchased : 1,500,000 shares
Minimum Price Paid For Each Share Purchased : RM 0.370
Maximum Price Paid For Each Share Purchased : RM 0.390
Total Consideration Paid : RM 574,005.00
No. of Shares Purchased Retained in Treasury : 0 shares
No. of Shares Which Are Proposed To Be Cancelled : 0 shares
Cumulative Net Outstanding Treasury Shares As At To-Date : 40,135,100 shares
Adjusted Issued Capital After Cancellation : 0
Date Lodged With Registrar of Company :
Lodged By :

27/02/2009 06:17 PM

Ref Code: 20090227NI00515

Actually one could have detected this as early as 10:06am when a series of constant high volume sell transactions are done.

If you remember the concept of supply and demand, when there are more selling than buying, the price will drop. Especially when the buying pattern consist of many small lots but selling is done by a few big quantity ! This means some big shots are selling off this stock !

This can be further observed at 12noon, 2:50pm, 4:10pm, 4:30pm and 4:40pm.

The green color shows the price. The red color shows the sell volume and blue is the buying demand.

You may observe you can hardly see any blue in that graph. So its almost no doubt this stock is going all the way down !

What to do now ?

If you have purchased this stock and already lost more than 10%, the general rule of thumb is to cut loss now. However, if you do not have any other better choices/stocks anyway and if you believe the fundamental business of KNM is still strong then you may choose to hold on to another 15-20% lost. All purely speculation at your own risk.

If you haven't bought this stock yet, you will need to find out what the next support line is and prepare to buy it assuming no new surprising news.

btw, KNM will be giving out 1.5 cents dividen early March. 1.5 cents out of 0.37 stock price is 4.05% pay out, which is better than today's FD @ 2+ % ( see top right for latest best FD rate ). And you could have earn this 'annual' FD rate in just within a couple of weeks ! Which is equivalent to a 100% annual gain. But ofcourse, stick to 4.05% is a more realistic figure.

So a lot of small players will be accumulating this stock like mad but there is no clear signal what the big guy will do. Supposingly in this no-support-line condition, price will drop like no one's business. I even suspect there is some internal dealing for this downside so the risk is still high on this stock where speculation is more than fundamental analysis.

The best reason to buy this stock now is you don't care about the dividen and recent lost of projects, if you know you can keep it for 2-5 years, this is still a keeper !

me ? I am accumulating more bullets and hope to hit jackpot yes ....
Blogged with the Flock Browser

Tuesday, February 24, 2009

Stock Picks methods 2009 02 24

First scroll down on MalaysiaPersonalFinance blog on the left hand side.  There is a link to download KLSE End Of Day data.

Select the latest date and you should be able to see a list of that day's stock data. 

Copy and paste that into a text editor

Subsequently use a spreadsheet program to filter out stocks between RM 0.10 to RM 0.50 (?)  then sort the stock list by volume.

There you go !  Here is a list of stocks that you may consider !

First, find something that you understand and like, have a strong feeling about etc.  For example;

You think oil price will go back up eventually, then you may want to look at KNM, Scomi, Ramunia etc.
You think Malaysia has the best resources for furniture industry - LCL.

To understand what a business does, you may check from  Just enter the stock name at top right corner and click search ! 

click on the Fundamental link to view more info about this company.  You may need to sign up as a member first.  I think it should still be FREE.

Then, make sure the company has been strong by making sure its pass years Return on Equity are always more than 15% !!

If current stock price is below its worth, then you can buy this stock as per the assumptions made in your worth calculation method.

Don't forget the Qualitative assesment - the management. Which is very important to make sure pass year records can be repeated in future.

Lastly after passing all the criterias above, you may use trend and technical analysis to further fine tune the timing of your entry point !


The following has ROE >= 14% for the past 3 years :


After analysing the EPS growth trend
and calculated their worth,
revised with latest released EPS data
there is only one stock worth buying now

KNM worth is RM 1.10 and current price RM 0.405  ( seems suspicious but lets review this in detail next )

followed by 2nd best choice

PANTECH worth RM 0.41 but current price is RM 0.455.  Cann't buy now but just a small gap away.

The rest of the stocks has too big a gap between its worth and current market price so they are out for now !

One interesting stock is DUFU where I couldn't find enough data for assessment but its past 2-3 years record seems great except the most recent 2 years EPS trend downward.  ( which is common to ALL businesses )

Sunday, February 22, 2009

Earn in ALL market conditions

If you know the trend, you can invest to earn in all conditions including up trend, down trend and even side trend... (tbc)

On an Up Trend, simply buy when the price has rebounced slightly after touching the bottom line - the support.  When the price drops a bit after touching the top line - the ceiling.

One very important reminder is NOT to spot the LOWEST nor the HIGHEST point.  Technical analysis or trend info obtained this way is not the right tool for that.  Indeed, we observe if it rebounce or breach through the expectation to confirm previous trend analysis.  If fail to get confirmation then re-analysis is required.

People who get dissapointed with Technical Analysis are the ones who were trying to use it to spot the Exact points !

On a Down Trend, you may sell first buy later - Short.  Basically it means you promise to sell item A at price A but you don't really have item A yet.  So you would need to buy item A at a later time at price B in order to fullfill your promise earlier.  If price B is lower than price A then it still matches buy low sell high concept.  The only tricky part is buy low later, sell high now.

Performing short in malaysia stock market is not that common.  I am quite sure all online trading accounts wouldn't be able to do that by regulation.  So if you really interest in short, you may need to use an experience agent or broker.  Make sure you enquire the detail process of short and what goes behind it.  Each agent may have slightly different tricks and may affect your shorting strategy.

Without ability to short, you may still do long during a down trend with higher risk.  For this scenario - do long during a down trend - you may need to learn a few more methods to identify fake and real rebounce.

Most people know how to trade during up trend.  Some people knows how to trade during down trends.  Almost no one would advise you how to trade in a side trend.  That is because when the trend goes side way, it is as good as gambling.  ( don't forget the mother of technical analysis comes from gambling methodologies )

So the best you can do is to apply some strategies on your investments.  Below is one example.

At any point of time during a confirmed side trend, do both long and short at the same time.  Short position should be higher than long position.  If the trend goes up, you can close your long position to take profit.  Keep the short position until the trend goes down, then close the short position to take profit.  Earn twice in a side trend, one sooner than another !

Don't get too excited yet if this is new to you.  If reverse trend earning method is complicated (as shown in down trend example above), then ofcourse this side way so called gambling methodology would have much more dangers hidden in it.

Anyway, the idea is not to limit yourself in investment.  You can almost always earn money in all conditions if given the right tools and methods.

Now, lets finish the first sentence of this article.

If you know the trend, you can invest to earn in all conditions including up trend, down trend and even side trend... if  the trend continues.

Wednesday, February 18, 2009

Best Income Range for Income Tax planning

Income tax act mentions that Income Tax Rates For Resident Individuals (personal income tax ) With Effect from Year of Assessment 2002 is as follow

Chargeable IncomeRMRateTax (RM)
On the first2,5000%0
On the next2,5001%25
On the first5,000-25
On the next15,0003%450
On the first20,000-475
On the next15,0007%1,050
On the first35,000-1,525
On the next15,00013%1,950
On the first50,000-3,475
On the next20,00019%3,800
On the first70,000-7,275
On the next30,00024%7,200
On the first100,000-14,475
On the next50,00027%13,500
On the first150,000-27,975
On the next100,00027%27,000
On the first250,000-54,975

So income tax calculation is as simple as determining your chargable income after minusing all the income tax deduction you are eligible for.

After calculating the actual paying tax verse your chargable income, you can find out the actual effective income tax rate you are paying. Below show a list of effective tax rate

income tax effective rate
2500 0 0.00%
5000 25 0.50%
7500 100 1.33%
10000 175 1.75%
12500 250 2.00%
15000 325 2.17%
17500 400 2.29%
20000 475 2.38%
22500 650 2.89%
25000 825 3.30%
27500 1000 3.64%
30000 1175 3.92%
32500 1350 4.15%
35000 1525 4.36%
37500 1850 4.93%
40000 2175 5.44%
42500 2500 5.88%
45000 2825 6.28%
47500 3150 6.63%
50000 3475 6.95%
52500 3950 7.52%
55000 4425 8.05%
57500 4900 8.52%

The obvious fact is that the more your chargable income is, the more tax you pay.

However, there is a small 'gap jump' due to the way the tax rate is implemented, so called step rate.

The blue graph shows the effective tax rate you pay based on your chargable income on X axis.
The bar belows shows the differences between 2 effective tax rate, or so call the increase gap.

Basically it means if your chargable income suddenly go above certain range, your effective paying rate will S U D D E N L Y increase more than usual as shown in the pink bar above.  Namely everytime when it goes beyond the step income, ie. RM 5,000 RM 20,000 RM 35,000 etc.  However this gap increase becomes less significant when it goes beyond RM 35,000.

If you look carefully at the effective income tax rate graph, you may observe it has a curve pattern like below.

This curve confirms that the B E G I N I N G of the curve has a S T E E P E R rate than the E N D of the curve.

So the B E S T income for your income tax planning is when your chargable income is close to but not exceed 
RM 5,000
RM 20,000
RM 35,000 etc.

The W O R S T income is when you go slightly beyond;
RM 5,000
RM 20,000
RM 35,000 etc.

So when you are in the worst category, perhaps you can buy more books or donate some money ?

Monday, February 16, 2009

Bank Negara Museum Opening May 2009

Malaysia's Bank Negara Museum opening this May 2009 !!

Where Money Matters and Practical Knowledge is Important ...

BEST Personal Finance Software for Dummies and Business

My real point of view on Personal Finance Software is you don't need one.  However, the reason I say that is NOT that you Really Do NOT need one, its just that MOST of us do NOT need one.

Its a matter of value for money.  Most of your finance needs can be captured, analysed and provide you enough insights by using a simple spread sheet program like Excel, Google Docs ( FREE Online) and Open Office ( FREE offline).

Another key differences is that P E R S O N A L finance is very Personal !  Everyone has their own very (1) unique views, (2) different needs and slightly (3) different ways they want to handle their personal finance.  So when there are LESS stone casting rules, its HARDER for a software to fully satisfy your needs.

The real benefit of Personal Finance Software tool is to help do things that you cann't or more difficult to do in spreadsheet.  So automation and synchronization of finance data among banks, investment accounts etc. become the major use of Personal Finance Software tool;  NOT so much on budgeting, analysing pattern, calculating profit ratio ... which become secondary requirments when assessing which Personal Finance Software to buy.

This has already been proven in USA market where below listed the top 10 PAID personal finance softwares in USA.  The usefullness is basically ranked by how wide and well it can interface to other systems.  They cost about MYR 100 only each !  There are also free ones like MINT and mores

read full review here

A 'good' personal finance software that does not have interfaces usually doesn't even make it to the comparison matrix, for example : YNAB

However, remember the inflation story ?  ( The real inflation is your own inflation, not the one published by your goverment. )  Likewise, if the best personal finance software that can integrate with 600 accounts but you have none of those 600 accounts, it is still USELESS to you !

Guess what, NONE of the world top, best, free personal finance software tool is suitable for non USA people.  Ok may be Canadian still can use it but Asia or especially Malaysia is so far out that its alsmost absolutely has NO use at all !

So lets look at Personal Finance Software for most of the readers on this blog - Malaysian. ( You may also take a look at kclau's research work on this topic.  )

In short, there is NO good personal finance software for Malaysian !  As a matter of fact, there are NOT MANY choices at all.  However, there are tons of Small Business Accounting Softwares !
Taxsaya : The cloest Malaysia "personal" software I can find for dummies.  Basically a lot of data entry and it will calculate tax return for you.  However, they are onto something 'NEW' and currently NOT promoting this FREE software for dummies.  You should download the old 2007 version before they take it out.

wangtool : The best "comprehensive" personal finance software for personal business use.  Although simple and easy to be used, this is still an accounting based software.  You will need to understand balance sheet, differences between income, expesense, asset and liability etc. before you can use this - NOT that personal I would say.

Bank Negara provided excel file for budgeting - download here

So whats next without a good option ?  The future then !  Well, indeed a lot of people in personal finance industry do realize this fact and have been trying to come up with a good solution.  Lets see who we can hope for ...
Arisoft said they wanted to develope one but eventually did not and forgot about it because its not worth enough business sense to do it.

mtsen has been talking about this since more than 10 years ago and he even said he has the best architecture design that can cater for ALL PERSONAL needs even without any pre-defined rules !  But until today he is still talking about it only ... there is no light in the tunnel this guy will put his thought into action at all ... :p

don't give up yet, all is not bad.  As of right now, the best wish we can keep is with kclau's latest effort to put up a free online budgeting software.  He is now conducting survey on what people are looking for ... his 3rd survey is here.  As stated in the beginning of this article, I personally do not see great benefits of a budgeting tool but any personal finance software HAS TO start with a budgeting feature.  Again, this is the best match and closest good effort we can hope for.

Do you use or know any good personal finance software for Malaysia, Singapore, Indonesia, Philipines or Brunei ?

Sunday, February 15, 2009

USA Top 10 Stocks 2001-2008

Reference from Motley Fool that these are the top 10 performers since last recession, you can read their full article here.



Market Cap. on March 1, 2001
(in millions)

Return March 2001 to November 2001*

Total Return 2001-2008

Southwestern Energy

Oil & Gas Exploration









Apple (Nasdaq:AAPL)

Computer Hardware




Gilead Sciences 
(Nasdaq: GILD)




(Nasdaq: PCLN)

Internet Retail




ITT Educational Services

Education Services




Strayer Education

Education Services





Systems Software




Flowers Foods





Range Resources

Oil & Gas Exploration




This is the kind of article you should be very cautious when reading them.  Because the best this table can do is to mislead you for your next course of action.

As a matter of fact, there is really not much more than just saying these are the stocks who DID GOOD exactly from march 2001 to 2008.  If you shift the starting period to 2002 and 2003 ( ie. 2002-2008 and 2003-2008 ) you may be surprise to see how Apple, Mcaffee etc. significantly drop/rise in the ranking.  These two did good in the 2001-2008 ranking is NOT because they DID GREAT but because they DID TERRIBLY BAD to start with ie. in 2001 ( or as a matter of fact since 2000 ) and therefore as an overal growth compare from 2001 to 2008, their PERCENTAGE of growth is BIG.  Apple did great in the front period of 2001-2008 while Mcafee only improve slightly later at the end of period 2001-2008.

So It is much MORE important to see the trend of the growth rather than just the growth itself.