Saturday 23 November 2019

Recent actions and thoughts


-Added SingHoldings
Ø  Relatively safer stock pick
Ø  52 weeks closing price of 37.5 cent to 41.5 cent, fluctuations of roughly  11-12% is not volatile
Ø  Will be cash rich after Parc Botannia project which is 95% sold is done.
Ø  Lack of projects moving forward a key risk, but trading at 0.6 of book value even with Parc Botannia not fully recognized yet is too attractive preposition.
Ø  1 cent to 1.375 cents dividend equate to 2.5% to 3.4% yield.
Ø  Recent buying of shares by owners at 37.5 cents could be a sign of a price floor

Sold half of Uni- Asia Group
Ø  Totally dumb decision in portfolio decision making sense as it's a loss making position and I sold half of it only.  Dumb decision make as a result of personal reasons but still dumb from portfolio management basis
Ø  When the position its loss making on the portfolio, usually I should have done 1 of the 3 options. 1) Hold and as the stock's financials are okay. 2) Add more if the financials are acceptable and the current price is an attractive buy. 3) Sell all of it as the results/prospects might not be as ideal as to what you have researched. I ended up doing none of the 3.
Ø  Results wise 3Q was decent as Hotels reached new occupancy rate and the absence of fair value losses resulted in a profitable quarter albeit barely. Cash flow remains strong and debt to equity has gone down.
Ø  4Q estimations perhaps -1 million to 1 million in bottom line. Equating to roughly 1.2 cents of loss/ profit. Key upsides that might affect earnings will be improve in hotel operations and closing of more marine related deals. Key downsides that might affect earnings will be a sharp drop in dry bulk rates and impairment losses of dry bulk vessels.
Ø  Personally after making a dumb decision, I am not sure what unpredictable action I might do with this counter.

Added Shinvest (a company that has rise by 200% this year)
  • -Fair value I think would be at least $3, though the main factor affecting valuation will be the decision of management in handling their investments
  • -Hopefully I would have time to attend the agm and hopefully they would be willing to share their plans moving forward.
  • -Always a psychological barrier for myself to add a counter that has ran so much this year but there will always need to be a first time to overcome such barriers.


KSH Holdings
-Results showed improvement in results which is good but cost of construction as a percentage of the construction revenue actually increased again.
-This leads me to believing that some project margins might not be profitable at all.
-As such there will be heavy reliance on Gaobeidian and the local projects that are in the form of associates and joint ventures.
-Affinity @ Serangoon looks like the best in margins. Thought I have some reservations about the margins of Rezi 24.
-A good amount of income also comes from loans to its joint ventures and associates.
-Ultimately the decision not to add this stock into my portfolio came from the really poor and deteriorating construction margins.

Tat Seng Holdings

-Cash flow generations remain excellent in 3rd Quarter
-Results although poorer than 3Q previous year, but that was to be expected as corrugated prices have been at lower levels as well.
-On closer look, depreciation this year is higher by about 900k while results was only poorer by 600k hence there has been an improvement in the business despite last year having higher corrugated prices.

The year has been kind to me, very thankful for that. Since one of the aims was met this year, its time to think about the year ahead...

Saturday 2 November 2019

Thoughts on 5 years of investing

November 2019 actually marks my 5 years into investing. 5 years of trying different methods of investing. 5 years of doing the same definitely not easy.
Happy 5th Anniversary!

(What a 5th anniversary could look like)

(What these 5 years actually looked like to me)
(Credits to lovelinuscom)

Will be sharing some thoughts to what I have seen, felt and observed in these 5 years. Do note that these thoughts are definitely biased and might be wrong as well.

1) It's possible to be investing for 5 years and still be unable to encounter a take-over offer or a rights issue.
The former is probably due to luck and the latter would be picking companies with high levels of cash and low debt. Avoiding reits would also help in avoiding a rights issue

2) People who are awaiting a 'crash' like 2009 are probably still huge in cash since I have started investing.
Unfortunately, the STI has not reached the 1500 levels (1594 in 2009) from 2014 to 2019, the lowest it ever went while I was investing was about 2629 in 2016. Hence people who thought that in 2016 the oil price crash and the china penny stock crash was actually gonna send the STI to 2009 levels would probably be still logging in to their bank accounts on a regular basis thinking how much of it should go into SSB and telling themselves the crash is definitely coming as its long 'overdue'

3) Power of compounding > Waiting at the right time
This point has been illustrated many times online on a numbers basis. However the psychology of losing money is too strong for some people. For others, it's about whether they can compound well. Index funds have decent past results but naysayers would always say 'Past performance does not guarantee future results keke'. Ironically it's also some of the naysayers that say the 10 year once crash is due and mocking those that say 'this time it's different'

5%  Compounding
10% Compounding
15% Compounding
20% Compounding
25% Compounding
2% Bank Interest Compounding


The last % is the amount u would have to lose in a market crash to lose to 2% Bank Interest Compounding which we all know is just a layman assumption as interest rate falls, it's difficult to find a pure play deposit and obtain 2% interest in each month.

4) For stock-picking, idea generation is important.
I have probably came across roughly 40 stocks in just 5 years that I have bought and sold some. So it's safe to say each year I probably need to have about 8 stock ideas that I would execute. The number of ideas would definitely fall when one is being more concentrated. I would say 5-6 ideas a year is pretty good already.
Another thing would be that you cannot expect all ideas to do well, it will not. There will be some hits, some misses and many more refining and going back to the drawing board to redo the process again.

5) Attending Company Agms are important even if not all Agms are particularly useful.
That is one way I seek some confidence in holding stocks that are relatively less known and those that I have quite some losses in. In particular to those that are in deep red, attending agms would allow me to gather some thoughts to if I should average down and when I should.
My thoughts would be that
If one would buy insurance to cover the risk of yourself falling ill or be unable to work, why would you not seek some form of insurance to your own investments even if it's not fool-proof.