Learning from history Genting Berhad 2 year performance

The World Financial Crisis did rattle many stocks and Genting Berhad, mother stock of Genting Singapore, did experience a downturn during that period and also surprisingly another short period durng April 2009 when it was down to only MYR3.20. That translate to about SGD$1.42.

Within two years, Genting Berhad now is trading over MYR10.00 (SGD4.44) or a tremendous gain of 312%

Should this be an indicator of the trend that Genting Singapore could be heading? There are many analysis and predictions for the expected Target Price of Genting Singapore. So this take here is based on not only trend of the mother stock but also plain fundamentals.

Genting Berhad in the old days took 3 years to build the access road up to the mountain to start the building of the resort, hotel and casino. It was estimated to take over 10 years. Very impressive but still no revenue for those 3 years and another few years more to complete the buildings.

Now fast forward to Genting Singapore. The whole resort(apart from a few other sections) is completed and running and making profit in 3 years. And at current revenue estimates, the whole cost of the resort could be paid off in 3-5 years.

One of my earlier articles projected $2.50. My other article suggested about $4.00. So with this article, it is quite solid and possible the price could be in the range of  $2.50 to $4.00 in 2 years.

Comments and suggestions welcome.

Significance of ASX and SGX merger better faster investment options

The buzz surrounding the merger of ASX with SGX is on the news daily in Australia. Every TV news update will have touch-base with this scenario. And about the sovereignty of Australia, a sensitive issue in this patriotic nation. Seeing foreigners buying properties and buying stocks and now buying up their stock exchange. But is it that bad or merely a notion of ill informed citizens?

The case in point is a merger. Not a buyout. The case is a cooperation of resources and size. Not one swallowing up the other. Therefore the outcry is not suppose to resonate much in the longer run.

Now let us look at the significance of this deal. Possibly Singapore investors or those using SGX will be able to access Australian stocks in real time. Currently if your stock brokerage firm is allowing DMA (Direct Market Access) there is a delay time of 15 minutes on stock prices. Not real time. And thus vital changes and price sensitivity advantage is clouded in that delayed relay of pricing. 

Lower fees. Perhaps a lower fees to buy and no more custodian fees on the foreign Australian stock.

I find the whole deal a positive move for investors and for market liquidity as a whole. There is better access to the precious metal and mining companies based in Australia. Remember one of my articles highlighted there are over 200 Mining and Oil stocks in the ASX. And picking up these gems will be easier. Those who are unfamiliar with commodities trading can now buy into the shares of these commodities producers and miners. A better direct investment rather than by proxy. BHP Billiton, Rio Tinto, Orocobre will be easily accessible to investors. There are over 20 Gold companies in ASX alone. Investors have the option now to invest in gold mining companies rather than just Gold.

Comments and suggestions welcome. 

Will 2011 be like 2001 with a Dot Com Bust?

1997 and 1998 saw the Asian Financial Crisis hitting all across Asia. USA was not affected much. But 2001 saw the so-called Dot Com Bust wiping out all under-performing and superficial tech stocks, and rocking big old players such as IBM, Microsoft, Yahoo to their knees. I recall Hotmail even reduced the mail quota to 1 MB and inactive account will be suspended. Nowadays we are seeing free email services giving 1 GB of mail quota.

The lingering question could be from what I wrote before about the "trendlines" - the ten-year bust. And if that is true for 1997/1998 parallel with 2007/2008, so will the 2001 Dot Com Bust be a parallel to the "yet-to-be-named" 2011 "Bust"?

Some people are panicky. Some are shrugging it off.

What sort of financial crisis, financial burnout, financial collapse is possible? And if based on facts like "if USA didn't suffer during 1998 and then had a 2001 bust, so perhaps those who didn't suffer that much for the 2008 Financial Crisis will be the possible candidate" to get a downturn. Could it be a country? A region? An industry?

Let us see: there seems to be a housing bubble in several Asian countries including Australia, Singapore, Malaysia, China. This is a possible candidate. Housing.

Commodities. Gold going way too high. Other minerals and mining companies being propped up excessively. Possible.

Will it be another Dot Com bust - will Facebook go bust, Apple goes bad, will Cisco routers be overtaken by Huawei?

Will another 9/11 hit somewhere unexpected? Strangely 9/11 did not have much of a financial impact on the global markets.

Recent flooding has ravaged various parts of Asia that were producing the staple food rice. How significant is this?

Will oil prices go above the roof again because of demand and because of the decline in USD? Possible.

In conclusion, there is a high possibility of something crashing somehow the next 1-2 years. It may not be as great as the Financial Crisis. But this interim crash is an opportunity. If you know how to spot this opportunity, and have enough resources to buy in when everything is at a bargain for a limited time, you can win it big.

Foxwoods the biggest casino in USA was funded by Genting

Foxwoods is the biggest casino in USA and is operated by the Mashantucket Pequot tribe funded by Genting in 1992.

From harvesting lettuce and maple syrup, we have now become the most profitable casino in the world. Before Lim, we only knew poverty. It was with his faith and trust that we are what we are now.
- Michael Thomas, chairman of the Native American Mashantucket Pequot Tribal Nation.


The late Tan Sri Lim Goh Tong's legacy does not only live on in Genting, but halfway round the world in the Native American tribe of the Mashantucket Pequot.

Unknown to most Malaysians, in 1991 the late Goh Tong helped the tribe that was struggling to grow cabbage by investing in their idea of building a casino, the Foxwoods Resort & Casino, which has now become the largest casino in the world. The chairman of the Mashantucket Pequot Tribal Nation, a sovereign nation within the US located in the state of Connecticut, Michael Thomas said the tribe owed a great deal to Lim for his vision and his confidence in them.

The tribe had approached 23 lending institutions who all turned them down for funding because they were afraid the loan would not be repaid.

A very hands on person, Lim Goh Tong travelled to meet the tribe and see for himself what was this Native American tribe was about and what their ancient values were. And within 48 hours, he agreed to give his support in the form of a US$60mil (RM200mil) investment. To show the magnitude of this seed funding, the revenue for the US government is close to US$2.7bil today from the casino operations of Foxwoods.

During his passing, the tribe gave all due respect in traditional manner. Thomas said this included all buildings in the nation flying their flag at half-mast for a week, while a sacred stone called Wampum which is sourced from a clam called the Quohog would be given to the family. It was important for the world to know that it was the faith Goh Tong had in them that allowed them to succeed beyond their wildest dreams.

Therefore if you have ethics, values, family values, and finally believe, things can change for the better.
MGM Grand at Foxwoods Hotel Mashantucket

Late for Gold then buy Lithium

Almost everyone wants to get into Gold these days. Prices have been on the uptrend. Here I too share my oversight and it happened in 2000/01 when I was at a crossroad of investing a lump sum of my money into two investments - Gold Trust or Other Unit Trust.

Why these two? At that point of time, I had limited stock trading experience and time. What I knew from years of reading was when stocks go down, Gold will quite certainly go up because of factors like safety haven, scarcity and so on and so forth. I was at the the persuasion of the banks to "come and invest in unit trusts" - easy, and steady growth. Yes the key words were that. Growth with very nice upward trend "charts". Past 3 year charts! My mind was lingering on the Gold Trust which was at about $0.60.

So no regrets now.

Instead investment is always about looking forward. And forward looking value for some new research we would believe in. Thereby summarised in my Stock Trading Rules. (see http://denzukefinance.blogspot.com/p/my-trading-system-and-rules.html)

Therefore for the past 2-3 years I have been keeping a watch on this resource - Lithium. It started when the oil prices went out of "control" to over $150 USD a barrel. And when car companies were going crazy about been bigger and larger especially in USA. Inefficient and fuel-hungry machines. Manufacturers were thinking of alternative fuels, and fuel-cell. The downturn changed this too. Being efficient is in. Being green is in. Start to think now to change this. Some vehicle owners started with retro-fitting gas cylinders for CNG or NGV. For the longer term, hybrid cars and fuel cell cars will be more and more mainstream. And for these cars to function, the main product is lithium to store electricity inside the car.

My stock highlight for this sector is Orocobre Limited (ASX based stock).
Here is the chart. From 14 December 2007 till now, there has been a whopping 900% gain. (from about 0.30 to over $2.45) Look at the green "percentage change since" indicator.

Orocobre Limited is an Australia-based mineral exploration company. The Company focuses on lithium, potash and boron resources in Argentina. The Company’s projects include Salar de Olaroz Project, Santo Domingo Project and South American Salars Project. The Salar de Olaroz Project is located in the Puna region of Jujuy, approximately 230 kilometers northwest of the capital city of Jujuy. The Salar de Olaroz Project consists of 118 square kilometers of tenements over a salar (salt lake). The Santo Domingo Project is located in the San Juan Province. The South American Salars Project has approximately 60,000 hectares of tenements on 10 salars in the provinces of Salta, Jujuy and Catamarca. During the fiscal year ended June 30, 2009 (fiscal 2009), the Company drilled 16 vertical cored holes (1136 meters) and six monitoring holes (360 meters).

Insurance system and gambling system similarities and winners

The magic is in creating more numbers. Here are a few examples how numbers or values are being created from a system.

The insurance system is largely based on pooling money or resources together so that if one person encounters a problem, the pooled resources is able to assist that troubled person. The creation of money is also based on this pooled-resources-model. Therefore a $1000 paid, has a pooled valued, of say $100 000 - which is what the sum assured or the sum the insurance agent keeps reminding you with gleaming eyes as if you will hit it as a "jackpot"!

When you deposit 100 dollars into the bank, the bank could take 100 dollars and loan it to someone else for a 10 dollar profit. Therefore "creating" money of 100 + 100 + 10 and maybe another 5 as interest to you. So the original 100 has created a value of 215. Impressive magic.

Gambling system is partly based on this too. You put a "wager" into the machine. And a jackpot is proclaimed to be won when the numbers or pooled amount between the 100 slot machines in the area hits the value between $100 to $500. Each dollar you "wager" moves the ticker. So finally after a few hours, a lucky winner grabs the pooled resources.

You "put" a wager on an outcome. And others put in as well. But the probability is favouring the casino. Example you bet on number 12 on the roulette table. One dollar. It will pay you $36 if you win. Oh great you won this round. And the bets placed by other punters are pooled and given to you. 

The conclusion of these similarities and winning situations - among all these systems - is having a fair game. Or perhaps unfair game. We too want an unfair advantage in real life. Therefore, as you can see, insurance companies make profit, insurance agents drive unneeded luxury cars, banks make huge profits, bankers get insane bonuses, and casinos and number-forecast agencies (4D, Toto, Scratch and Win) will always win.

So buy them. Own them. Own their stocks. Finish.