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Sunday, December 03, 2006

Portfolio 02-Dec-2006

KLCI continues to rise 1.86% this week, hitting 1080.11 points, a 10-years high before the Asian financial crisis. With the current local and U.S. economic fundamentals, I am a bit worried on the speed of this bull. I am afraid we are going too fast over the cliff and will face with a hard crash later. As a matter of fact, it is the law of nature that what goes up will eventually come down. Hopefully for KLCI, it will be a soft landing. This is possible if there are more corrections coming in to support the current level, and both local & U.S. governments manage to improve the economy in short time. At the minimum, keeping down with inflation and for god's sake, take less corruptions!

My portfolio outperformed KLCI this week, gaining 3.42%. This is largely due to the rise of Magnum and Tanjong. Magnum has finally broken the RM2.30 level in the last minute of market closing. MPHB also reported they have gained an additional 9% of Magnum share through open market, raising its share holding on Magnum to 49% on 27-Nov. Thus, I believe that the last minute surge on Friday is due to further share acquisition in order to meet the 51% level. If the surge is sustainable next week, I will consider to dispose partial of Magnum stocks at price >RM2.40. As for Tanjong, I will still hold it, maybe until after its earning report in the coming 1-2 weeks as it is still far from my target price.

On the other hand, as bond has an opposite cycle compares to equity, both my PBOND and PIBOND only increased 0.25% in value on week to week basis. Nonetheless, I am pretty happy with the investment and so far, it has given me about 2.6% return (or ~12% p.a.) in 3 months time, much better than bank's FD. I am considering to put in more money when I start cashing out from equity. In fact, it is the best time to go into bond when share market is rocketing high.



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