"I am AirAsia X... The Destroyer of Wealth"

The glamour and attraction of an airline! And especially an internationally recognised brand name associated with someone toasted as being `Malaysia's greatest entrepreneur'. And the best thing since the invention of Roti Canai.

AirAsia X (AAX) - a company that had created millions for its original shareholders upon its IPO and listing on Bursa Malaysia. But later destroying the capital of many others - people who had bought into the legendary Tony Fernandes' much-vaunted business and managements skills.  

Glamer, Gelama... Tak rasa attracted ke with this image that evokes `success', `savvy', `allure' ? AirAsia, AsiaAsia X, Tony Fernandes et al - when it comes to PR, glossy adverts, impression, they are way up there. The man and companies who could do no wrong. Just do a casual search and you'll see how fawning journalists write glowing reports about them.

Here are some of the facts:
IPO Price: 1.20 (July 2013)
Today's Price: 0.21. Or, - (minus) 99 sen
In less than 2 years, investors who `were lucky' and had gotten AAX through balloting, and had held on, have lost 82% of their capital. This is even worse than Felda Global Ventures' (FGV) share price performance.

If you'd look at previous reports by various so-called `investment pros and analysts', wide-eyed journalists and comments by mainstream investors comments (i3investor.com is a good place), many had believed Tony Fernandes is a sort of magician, miracle worker, someone who could walk on water even.

After all, AirAsia had gone from an IPO price of 1.20 in June 2010 to its peak at 4.20 in August 2011 - a 250% profit in just 14 months later! Your RM10k investment would have become RM35,000. Their investment in AAX - it was in the naive belief that "Anything that has to do with Tony Fernandes is bound to achieve greatness!"... "I fully believe in Tony Fernandes! He's Da Man!"...

AAX's capital-destroying performance from listing until today.

But in less than two years, Air Asia X was already facing severe cash flow problems. It had to call for a rights issue. In layman's term, this is when a company asks investors to cough out additional cash. This isn't a bad thing if the proceeds are to be used to expand a business - to buy income-producing assets, for instance, which will result in bigger profits in the future. But not when it's to make up for shortfalls. That's a clear indication the management had failed. 

This post isn't to disparage Tony Fernandes - I have better things to do lah. I'm just stating the facts, of what things are. And, more importantly, to explore possibilities to make some money. "And what might these be?", you might ask.

Well, consider this - when it comes to share prices, the most critical factor isn't really how well or badly a company is doing, although these do influence things, of course. It's "perception", "sentiments" and the all-important "trend" - of whether the bias is upward or downward. These are way more important than things like Price Earning Ratio (PER), Dividend Yield, Net Tangible Asset, Gearing etc. Let the accountants-type and analysts at the research departments of investment banks worry about these.

So, back to AAX: let's look at it this way - buying it at 0.21 now is better than two years ago, at 1.20. Same stupid unit of the same company but at an 82% discount. It doesn't mean one will definitely make a profit, of course, for it's ALWAYS possible for "cheap" to become "cheaper". However, I'd fancy my chances at this price. Should it climb back to just 0.42, those original investors with their 1.20 units will still be way under water. But you'd be making a 100% profit!

Learn the basics about technical analysis. You can also utilise the free version of ChartNexus, for example. If you see AAX having reached its bottom, and possibly starting on an uptrend, that's a great opportunity to try make some money.

Screenshot of AAX from the ChartNexus desktop software. Basically, one shouldn't try "to catch the bottom" and buy when the current price is lower than the 20-day and 50-day Moving Averages (red and blue lines respectively). Even though it feels "like a bargain", as shown above.

Disclaimer: I'm no expert when it comes to the stock market and technical analysis. Or whatever analysis for that matter. I'm writing this for the sole reason that I have a big mouth and simply don't know how to keep quiet. So, if you were to buy AAX based on this post - and then make a loss - don't come looking for me with a big stick ala Walking Tall, okay? BUT if you do make a profit, you're more than welcome to share it with me :-)

Nazri Aziz: "Please be a Raja Buta & Bisu. Or Else"

One of the reasons why I had not written a blog post is this: the time and effort tends to be spent on updates and comments at Facebook. The following is from today, at Dato' Shamsuddin (Small Talk) Nawawi's wall. Since he had tagged me and specifically asked my opinion about what minister Datuk Nazri Aziz had said (his warning to the Johor Crown Prince), I felt obliged to respond to his request. These `comments' qualify as blog posts, so I'm turning them into such here. Maybe that's how I should do it, i.e. reconcile Facebook updates and comments with the blog here...(?)

[...]
Saya amat setuju dengan apa yang Dato' Sam tulis di atas tu. Fair, accurate & reasonable-minded.

Tentang peranan institusi di-Raja, telah ditetapkan dalam Perlembagaan bahawa kita mengikut sistem Constitutional Monarchy. Secara amnya, Sultan dan kerabat tertinggi perlu apolitical - tidak memihak kepada sesuatu parti politik. Namun, saya tidak setuju dengan apa yang sesetengah pihak kata tentang apa Raja patut dan tak patut buat. Khususnya statement oleh seorang Ahli Majlis Tertinggi yang appointed tu (bukan voted in). Walaupun dia menteri, dan walaupun dia lulusan undang-undang.

Perlu diingatkan bahawa Institusi Raja adalah satu component yang essential dan berkedudukan amat tinggi dalam Perlembagaan negara kita. Pada pendapat dan interpretasi saya, "Apolitical" tidak bermakna "Jadi tunggul kayu", "Dok diam-diam". Perlembagaan tentang institusi Raja ini tidak totally rigid dan peranan Raja tidaklah begitu terhad sepertimana yang beberapa pihak katakan. Jika dan bila Baginda sendiri pilih dan tentukan (bukan obligated) -- scope dan range penglibatan Baginda adalah pada mana-mana level di antara skala "Total disinterest" hingga ke "Partisan Involvement". Saya rasa Baginda ada hak untuk bersuara dan memberi pandangan terbuka dalam banyak hal, khususnya yang mendatangkan kesan kepada negeri dan negara.

Dalam beberapa keadaan, pendapat terbuka dan penglibatan Raja akan dapat menyelesaikan situasi yang complicated, dan menjaga kepentingan rakyat. Contoh yang baik di mana seorang Raja telah menggunakan kuasaNya secara efektif, dan melindungi kepentingan rakyat (bukan individu dan golongan tertentu sahaja) adalah dalam isu Menteri Besar Selangor tahun lepas. Jika Baginda mengambil sikap Total Disinterest, golongan tertentu akan dapat manipulasi berbagai keadaan, yang hanya untungkan diri mereka sahaja.

Saya rasa itulah contoh yang boleh digunakan oleh Institusi Raja dalam socio-economic-political negara sekarang. Kita tidak perlu ikut apa yang Queen England buat, yakni sebagai figurehead tunggul kayu. Situasi, environment dan variables di negara kita adalah berbeza. Jadi, kita lakukan dengan cara sendiri. Institusi Raja perlu evolve mengikut zaman. Secara peribadi, saya sokong Raja-Raja Melayu ini memberi pandangan mereka secara terbuka tentang berbagai isu. Tiba masanya untuk Raja-Raja Melayu menjadi payung untuk melindungi kepentingan rakyat dan negara.

Bagi saya, statement yang dibuat oleh Raja Johor itu bukanlah "political interference". Ia adalah berkaitan dengan financial, ekonomi yang mana terdapat impak terhadap rakyat dan negara. Perkara yang Baginda suarakan itu juga membabitkan ekonomi negeriNya, serta persepsi pelabur dan orang-orang asing. Berbanding dengan negeri-negeri lain, Raja Johor adalah yang paling involved dan proactive dalam aspek-aspek socio-ekonomi di negeri tersebut. For better or for worse, itu adalah isu separate.

[And followed up with this...]

Saya harap menteri ini serta penyokong tertentu tidak akan ambil tindakan bodoh untuk whack. Mungkin 'PR expert' (kononnya) Lim Kok Wing, yang baru baca buku Sun Tzu "The Art of War", sekarang dah rasa diri sebagai 'strategist'. Mungkin dapat inspirasi dari over-used slogan "Attack is the best form of defence", dan bagi idea untuk Menteri Yeop belasah Raja. Guna modal "Big China developers in south Johor", misalnya.

Kalau lah ini dibuat sebagai retaliation dan cubaan untuk intimidate, saya nak gelak aje. Akan menunjukkan kepada semua bahawa Yeop & Company tidak kenal Raja Johor, tidak faham dynamics sokongan ramai rakyat (termasuk yang bukan orang Johor). Cuba lah, Yeop...