During the 2nd Quarter of 2012 I have identified (on behalf of the Partnership) several companies in Bursa Malaysia which basically ‘flew under the radar’ – having a small (if any) number of investors following their stocks. They are simple and easily understandable businesses, attractively priced, and doing the basic things well – sell more of the same product and passing incremental cost of raw materials to customers. We initiated positions in their stocks with a healthy dose of amateurish hesitation from my part. But before long, others took notice of these companies and their stock prices soon moved up quickly and are now beyond our buying range.
Two lessons here – buy big with conviction and if you are a buyer of stocks, you better hope prices won’t skyrocket; else you’ll be priced out. In short term the quick, sizeable return will make you look good and may even lead you to be boastful and overconfident in your investing capability, but it hurts your performance in the long run.
Year
|
Partnership
|
Public Ittikal Fund
|
FBM KLCI
|
ASB
|
YTD 2012
|
22.2%
|
5.31%
|
4.5%
|
N.A
|
Sources: Morningstar Malaysia & Maybank IB report
The Partnership’s capital standing until 30th June 2012 is presented in the preceding table, measured against FBM KLCI benchmark index and the largest unit trust in Malaysia in terms of fund size, Public Ittikal Fund. Returns are reported with dividends reinvested, excluding advance payment (new capital) added by partners during the year 2012 but before the pre-agreed advance payment return. Be mindful of the presented numbers, for the return on the Partnership’s investment in Bursa Malaysia equities has to be measured against ASB’s return at year end, over a minimum period of three years.
We now have 85% of AIN Partnership capital invested in Malaysian stocks, the rest we stick to cash. Also worth noting, during the months of April – June 2012, we received RM13,323.15 of new capital from existing and new partners. We treat this as advance payment from each partner, drawing a pre-agreed return per annum which will be added to the partners’ beginning capital for the year 2013.
I personally expect the stocks investment climate in Bursa Malaysia to move southward in coming months. When this happens, rest assured I will remain as candid and you will be made aware of your money’s performance, as much as mine.
