2010 investment challenge

The stock portfolio should grow by 15% at least to match the performance of PIOF under public mutual. The roller coaster ride in the last five years basically burned my earning and does not increase my holding value at all. A few bad decisions like VSI, SCICOM, MULPHA, AIRASIA and EKOWOOD has wiped out my good calls! Its a hard lesson, but a valuable lesson. Non-quality stock like Mulpha and Ekowood should be trading buy only. The time frame should be only a year and any upside or downside of certain percentage should have trigger a buy or sell call. Looking at the history of the share prices in Bursa in the pass 5 years, it is clear that only institutional stock like PBBANK, YTL, Genting and other blue chips with very strong cashflow and stable business is able to ride out recessions relatively unscathe. Their share prices will not drop too drastically, and will recover quite strongly when economy is performing reasonably well. Beware of business that has highly volatile cash flow. VSI is such an example. While it is generally a welll run company, its business nature is such that its destiny is linked to the customer's technology strength and business acumen. It is also highly affected by world economic events such as the great recession. It is also worth noting that despite some analyst brand Ekowood highly, it is such a small brand that the value is small. Its brand value does not attract buy automatically. Rather, it still probably compete on cost as its quality if exist, is virtually unknown to potential customers.

2010 is expected to be highly volatile, especially in the 2H 2010. With stimulus ending in China and US, cheap monetary flow to stimulate employment and economy will stop. With it, it is possible demand for Chinese good will drop and spawn off massive unemployment in China. That itself will jolk the world, who has came to expect China will save the world. Even more damaging, US economy will still be in an anaemic state. Lost of jobs will be closely monitored and pessimism will spread to the world. The sentiment is strong enough to push down the stock market. In fact, it is probably a good time to exit non-institutional quality of a few related companies.

Continue to build on Public Bank's share. TDM and UTDPlant will be trading buy.