In my previous post about Noble here , I wrote that Noble is performing badly with a bad ROE and a bad D/E ratio. When these 2 ratios are faring badly, the company is heading for disaster.
But that's not the worse. The worse is- the commodities market is NOT showing any signs of improvement at all. When the industry is not improving, how can Noble's financials start to improve? Not to forget, it needs to continue paying its debt.
Today, Noble shares were cut to junk by Moody's.
"The worsening year-long rout in commodities, which has punished prices of raw materials that Noble handles from oil to copper, has overshadowed cost-cutting plans and will likely hurt access to funding and challenge its profitability, it said."
Noble's share price has now dropped to 0.41.
Please do not think it is 'Cheap'.
Stocks look cheap because the prices have dropped since its high time.
HOWEVER, there are always reasons what caused the price to drop and majority of the time, these reasons are due to valid rational decision thinking by the elite traders and banks.
Only very occasionally, very miraculously, will share price experience a sudden irrational emotionally driven drop in price. That will mean the price is 'undervalued' beyond a reasonable doubt. And yes, it certainly won't last long for such price to continue.
Remember, investment is certainly not a gamble. Much research and hard work is needed.
If you cannot resist the temptation to make money quickly, you are bound to lose a lot in the stock market.
Tuesday 29 December 2015
Wednesday 23 December 2015
My Christmas Present from Interplex
Hello,
Here's wishing everyone a very Merry Christmas!
Baring fund has announced their plans to buy Interplex at around S$450m with each share price at around $0.82.
This price is definitely a premium over its average share price over the year. The premium is about 62%!
I bought Interplex at $0.68 and that means I will be making some profits for this takeover. Yay! Good news! :D
The year ended with some profits and some losses for my overall portfolio. Although I picked some good buys, I also made some costly mistakes ;(
Ah well, think long term ;)
Good luck, everyone. Hoping all of you have a blessed year ahead. :)
Here's wishing everyone a very Merry Christmas!
Baring fund has announced their plans to buy Interplex at around S$450m with each share price at around $0.82.
This price is definitely a premium over its average share price over the year. The premium is about 62%!
I bought Interplex at $0.68 and that means I will be making some profits for this takeover. Yay! Good news! :D
The year ended with some profits and some losses for my overall portfolio. Although I picked some good buys, I also made some costly mistakes ;(
Ah well, think long term ;)
Good luck, everyone. Hoping all of you have a blessed year ahead. :)
Sunday 20 December 2015
Recent Actions- Sell/Buy
Hello,
Just thought that I should share some of my recent stock actions.
Summary:
1. Bought Ascendas reit @ $2.22
2. Bought Frasers Centrepoint Trust @ $1.81
3. Bought STI ETF @ $2.86.
4. Bought OCBC @ $8.72
The Fed has increased its interest rates by 0.25% , citing an improvement in the US economy and business confidence.
Stock prices are the NPV (net present value) of its future free cash flow, a higher interest rate will mean a higher discount rate and that translates to lower NPV (lower stock price). This is the reason why stock market in SG went a nosedive last week.
Although business borrowing costs would increase due to a higher interest rate and that translates to possibly lower returns for Reits, I still went ahead to purchase Ascendas Reit @$2.22 and Frasers Centrepoint Trust @ $1.81.
These 2 Reits have a strong rental occupancy portfolio.
A-Reit has a well diversified portfolio, with 5 main property segments and situated at well located areas. It has a stable portfolio with 89.8% of portfolio revenue committed for FY15/16 and a portfolio average lease to expiry of about 3.6 years. They have also acquired One@Changi business park recently.
Frasers Centrepoint Trust has very well located shopping malls in the heartlands such as Causeway point and it enjoys consistent high occupancy rate.
I also bought STI ETF at $2.86
What I observed was that before a major announcement is to occur, Singapore's stock would experience a major fall on the day before. I grabbed STI ETF at $2.86 on 15.12.2015, the day before FED announced its IR decision. (Considering US time zone)
Lastly, I bought OCBC at $8.72
Well, I am not some finance economy expert but my observation is that bank stocks do generally better in a higher ir environment, possibly due to a myriad of many many factors. (Business confidence, better IR spreads to profit from)
In 2007, when the US ir was a crazy 5%+, OCBC stocks were at its highest (then) of $8+. When the financial crisis came about and ir suddenly took a nose dive to 0.2%, OCBC stock went tumbling down to $4+. Of course, there are many other reasons accounting for this so my addition of OCBC is more of a hedge to my portfolio.
Although the US has cited sustainable business growth, better economic performance and more jobs in the US, Singapore's economy does not look promising at the moment.
Economists have trimmed Singapore's growth forecast to 1.9% with the manufacturing sector faring the worst.
With that, I say, hold up your war chest and acquire some good business or ETF along the way :)
Just thought that I should share some of my recent stock actions.
Summary:
1. Bought Ascendas reit @ $2.22
2. Bought Frasers Centrepoint Trust @ $1.81
3. Bought STI ETF @ $2.86.
4. Bought OCBC @ $8.72
The Fed has increased its interest rates by 0.25% , citing an improvement in the US economy and business confidence.
Stock prices are the NPV (net present value) of its future free cash flow, a higher interest rate will mean a higher discount rate and that translates to lower NPV (lower stock price). This is the reason why stock market in SG went a nosedive last week.
Although business borrowing costs would increase due to a higher interest rate and that translates to possibly lower returns for Reits, I still went ahead to purchase Ascendas Reit @$2.22 and Frasers Centrepoint Trust @ $1.81.
These 2 Reits have a strong rental occupancy portfolio.
A-Reit has a well diversified portfolio, with 5 main property segments and situated at well located areas. It has a stable portfolio with 89.8% of portfolio revenue committed for FY15/16 and a portfolio average lease to expiry of about 3.6 years. They have also acquired One@Changi business park recently.
Frasers Centrepoint Trust has very well located shopping malls in the heartlands such as Causeway point and it enjoys consistent high occupancy rate.
I also bought STI ETF at $2.86
What I observed was that before a major announcement is to occur, Singapore's stock would experience a major fall on the day before. I grabbed STI ETF at $2.86 on 15.12.2015, the day before FED announced its IR decision. (Considering US time zone)
Lastly, I bought OCBC at $8.72
Well, I am not some finance economy expert but my observation is that bank stocks do generally better in a higher ir environment, possibly due to a myriad of many many factors. (Business confidence, better IR spreads to profit from)
In 2007, when the US ir was a crazy 5%+, OCBC stocks were at its highest (then) of $8+. When the financial crisis came about and ir suddenly took a nose dive to 0.2%, OCBC stock went tumbling down to $4+. Of course, there are many other reasons accounting for this so my addition of OCBC is more of a hedge to my portfolio.
Although the US has cited sustainable business growth, better economic performance and more jobs in the US, Singapore's economy does not look promising at the moment.
Economists have trimmed Singapore's growth forecast to 1.9% with the manufacturing sector faring the worst.
With that, I say, hold up your war chest and acquire some good business or ETF along the way :)
Monday 23 November 2015
What is one astonishing fact about Warren Buffet?
99% of Buffett’s wealth was earned after his 50th birthday
Warren buffet started investing at age 11.
From 11 to 50 years, he spent 39 years in his investing career but only made the bulk of his wealth after age 50!
No, his 39 years won't wasted. This is the Magic of Compounding.
His investment returns are a whooping 15% and he is able to beat the SNP500 index of approx. 8% returns.
Warren Buffet understood this concept which few were able to, and with his prowess in investing, he is able to earn much much more (Billions and Billions)!
I have written a post about the magic of compounding here previously- how an average person at age 25 can earn $1m by age 55 through investing at 4.5% returns. I still think that it is achievable.
That said, investment requires hard work- prudent investment decisions, a tad of luck, discipline and perhaps many other factors. If you are not able to read financial statements consistently, my honest advice will be to put your savings into OCBC 360 account.... its interest is good given the risk involved.
Warren buffet started investing at age 11.
From 11 to 50 years, he spent 39 years in his investing career but only made the bulk of his wealth after age 50!
No, his 39 years won't wasted. This is the Magic of Compounding.
His investment returns are a whooping 15% and he is able to beat the SNP500 index of approx. 8% returns.
Warren Buffet understood this concept which few were able to, and with his prowess in investing, he is able to earn much much more (Billions and Billions)!
I have written a post about the magic of compounding here previously- how an average person at age 25 can earn $1m by age 55 through investing at 4.5% returns. I still think that it is achievable.
That said, investment requires hard work- prudent investment decisions, a tad of luck, discipline and perhaps many other factors. If you are not able to read financial statements consistently, my honest advice will be to put your savings into OCBC 360 account.... its interest is good given the risk involved.
Thursday 12 November 2015
Why is Noble a bad buy even at $0.47
I know there are many Noble fans in Singapore. Sorry, but I really cannot super cannot understand why are people still buying Noble in this market?
Before I study its financial statements released yesterday, let's look at how Iron ore prices importing from China have dropped since last year. I relate to Iron ore since Noble group has a major business unit in metals and mining.
From a high of US$160+ in 2013 to the current $40+ now, the Iron ore prices have dropped so much. When iron ore drops, metals/mining/scrap all others drop too.
In fact, the commodities market has sucked so badly this year and it is of no surprise that companies dealing in this sector will face a drop in profits. When your revenue drops but your fixed costs remain, it just means that the profit will drop a lot more.
But here's the thing:
Sorry to say, metal prices show NO signs of recovering as of now.
This is because I work in the frontline of metal commodity prices so I do have some knowledge on the prices.
So if it's still not recovering, can I safely say that next quarter's financial results will still be as disappointing? Which means stock price may drop even more?
Now, let's go on to Noble's financial results:
1. ROE (Return on Equity) Based on info provided by Noble: 5%+
A healthy, growing company should have an ROE of >15%. 5% is not even 1/3 of that omg..
2. D/E ratio is 2.80+ approx.
This is like super high. A healthy company should be looking at <1
3.When ROE sucks and D/E also sucks, the company show signs that it is heading for Disaster.
If you have a high ROE and a good D/E, it is a very good growing company. If your ROE is low but D/E is also low , it implies that the company is surviving but nothing fantastic.
But if your ROE sucks and your D/E also sucks, then likely it is heading for a disaster.
4. Profits dropped 83%,
Not a surprise when commodity prices drop so much. However, cash flow is now positive and it seems that Noble has done a good job in cutting costs.
I can't determine what is a good price to buy given that the earnings are really volatile in this terrible market.
Conclusion:
Will only consider to buy when the commodity market in general show signs of picking up.
Before I study its financial statements released yesterday, let's look at how Iron ore prices importing from China have dropped since last year. I relate to Iron ore since Noble group has a major business unit in metals and mining.
From a high of US$160+ in 2013 to the current $40+ now, the Iron ore prices have dropped so much. When iron ore drops, metals/mining/scrap all others drop too.
In fact, the commodities market has sucked so badly this year and it is of no surprise that companies dealing in this sector will face a drop in profits. When your revenue drops but your fixed costs remain, it just means that the profit will drop a lot more.
But here's the thing:
Sorry to say, metal prices show NO signs of recovering as of now.
This is because I work in the frontline of metal commodity prices so I do have some knowledge on the prices.
So if it's still not recovering, can I safely say that next quarter's financial results will still be as disappointing? Which means stock price may drop even more?
Now, let's go on to Noble's financial results:
1. ROE (Return on Equity) Based on info provided by Noble: 5%+
A healthy, growing company should have an ROE of >15%. 5% is not even 1/3 of that omg..
2. D/E ratio is 2.80+ approx.
This is like super high. A healthy company should be looking at <1
3.When ROE sucks and D/E also sucks, the company show signs that it is heading for Disaster.
If you have a high ROE and a good D/E, it is a very good growing company. If your ROE is low but D/E is also low , it implies that the company is surviving but nothing fantastic.
But if your ROE sucks and your D/E also sucks, then likely it is heading for a disaster.
4. Profits dropped 83%,
Not a surprise when commodity prices drop so much. However, cash flow is now positive and it seems that Noble has done a good job in cutting costs.
I can't determine what is a good price to buy given that the earnings are really volatile in this terrible market.
Conclusion:
Will only consider to buy when the commodity market in general show signs of picking up.
Wednesday 11 November 2015
Can you resist the temptation to make money quickly? & Some quotes from Warren.Buffet
STI went up last week when US jobs data are good.
Then STI went down this week rapidly when China's economic data is bad.
These few months, the stock market has been very volatile and I spotted some speculative stocks like Noble and Ezra trading at highs and lows.
It seems that it is really quite tempting to make money quickly by buying such speculative stocks but I am strongly against such techniques as you can get your hands burnt badly.
Let's revisit some quotes from my super idol Warren Buffet:
1."Never attempt to make quick money on the stock market."
Sound investing can make you very wealthy if you are not in too big a hurry. Buy on the assumption that they close the market the next day and not re-open it for 5 years.
2."Buy Businesses, Not stocks"
All there is to investing is picking good companies at the right times and staying with them as long as they remain good companies. Businesses you are willing to own forever.
3."Invest in great companies"
It’s better to buy wonderful company at a fair price than a fair company at a wonderful price.
My targeted actions during this volatile period:
1. Be Patient.
Mentality of an owner, not speculator. Long term investment horizon please.
2.Read and read financial reports.
Investigate and find out Why, Why , Why and read the competitors financial reports to see where is the industry heading.
I am telling myself to spend more time on reports than Facebook.
3. Before I buy and sell, think carefully of the risks and opportunity cost first.
I made some horrible careless investment mistakes in the past and I am learning from it. Hopefully, I am much wiser now.
Good luck to all other investors there!
Then STI went down this week rapidly when China's economic data is bad.
These few months, the stock market has been very volatile and I spotted some speculative stocks like Noble and Ezra trading at highs and lows.
It seems that it is really quite tempting to make money quickly by buying such speculative stocks but I am strongly against such techniques as you can get your hands burnt badly.
Let's revisit some quotes from my super idol Warren Buffet:
1."Never attempt to make quick money on the stock market."
Sound investing can make you very wealthy if you are not in too big a hurry. Buy on the assumption that they close the market the next day and not re-open it for 5 years.
2."Buy Businesses, Not stocks"
All there is to investing is picking good companies at the right times and staying with them as long as they remain good companies. Businesses you are willing to own forever.
3."Invest in great companies"
It’s better to buy wonderful company at a fair price than a fair company at a wonderful price.
My targeted actions during this volatile period:
1. Be Patient.
Mentality of an owner, not speculator. Long term investment horizon please.
2.Read and read financial reports.
Investigate and find out Why, Why , Why and read the competitors financial reports to see where is the industry heading.
I am telling myself to spend more time on reports than Facebook.
3. Before I buy and sell, think carefully of the risks and opportunity cost first.
I made some horrible careless investment mistakes in the past and I am learning from it. Hopefully, I am much wiser now.
Good luck to all other investors there!
Tuesday 27 October 2015
Oxley retail bonds review (5%)
There has been much hype on this Oxley retail 5% bond, spanning over 4 years maturity. However, it is unrated and that means I can't rely on any Moody's analysis to discern whether it is a good deal a not.
I have to analyse on my own then. After studying its financial report and ripping it apart, below are my takeaways and humble thoughts.
Before I go to the financial jargon, I need to express that this is only my opinion and may not bear any truth at all. Analysis and thoughts are of personal opinions only. For every statement I make here, I will put 'I think'. (but it is up to you to discern what I say correct anot ;P)
FY 2014: $377,367m
FY 2015: $142,705m
Oxley holdings has achieved very impressive profits in Year 2013 and 2012, when the property market in Singapore was booming.
However, after the cooling property measures were implemented, many developers are facing a lackluster response in its properties. It is no surprise that Oxley was badly affected by it too.
Oxley has plans to expand overseas aggressively instead but looking at its financials, I do not find them promising. (to explain later)
A. Your marketing strategies CMI. (cannot make it)
B. You are not getting the response that you want, i.e, demand is not that good.
I think that it is option B because Oxley's marketing agents are mostly from Huttons and Huttons really produce impressive results in other properties previously. When you spend so much more on marketing yet get poor results, it just shows that your products are not as good.
Debt ratio (Total liabilities/Total assets) = 0.85 approx
The industry encourages standard of about (0.3~0.6) only.
Debt/equity ratio (Debt/equity)= 5.807 approx.
Other companies are <1.......
I think Oxley has too much leverage and it is risky.This means that if their business fail, I think I will be in queue 1,000,000 to get back my money lor omg. (Just joking, queue no. is a fake anyhow say number)
Look at its fixed notes it previously issued:
I think those that were issued in Year 2013 were for its projects in Y2013/Y2014 which did receive resounding success. Oxley should be able to pay them.
But for notes issued now, the money I think will be used for its overseas projects venture moving on but this leads me to the next point.
Forget its FY2015 poor performance. I think future plans are very important and the strategies form the crux of whether the company is a good investment a not.
Looking at this table, I really do not think Oxley overseas projects are promising.
A. Projects in Cambodia
I go to Cambodia- Phnom Penh every single year (I'm not a Cambodian btw) and I have some close friends there. There is an association there which I am committed too and has a close relationship with. As such, I think I have some knowledge to really say how Phnom Penh is like. And this is what majority of Phnom Penh is:
1. Mud & uneven roads
2. Slums
3.Corruption
4. Poverty
5. Main language of the people is Khmer
6. More well off people work as factory garment workers
7. Less well off people open shops infront of their living area and sell the same stuffs that other shops sell too.
8. Children not wearing underwear and running around
9. many many other scenario depicting a 3rd world country
Phnom Penh has a very very long way to go for foreign investments. And to build high rise condominiums and to attract expats to stay there, well, I think, more likely they will become AirBnb.
I do not think that Oxely's property developments in Phnom Penh are promising although their first project there did receive a good response.
B. Projects in Malaysia
Exchange rate of those people who bought properties in Malaysia during year 2013 when the market is booming there: SGD 1: MYR 2.65
The exchange rate now: SGD 1: MYR 3.05
Exchange rate in future: ????
With a very questionable government, weak currency, poor security, I think the property market there is certainly not as attractive as in year 2013. As such, I do not think that projects there will receive good response.
Also, Setia Berhad, the leading property developer there, has much more competitive advantage in its home land as compared to Oxley.
Given that Singapore's developers are facing a weakening demand here, and Oxley's prime focus is shifting to overseas with such projects in such countries, I do not have the confidence in their ventures.
5. You can get 5% yield elsewhere too
5% yield capital guaranteed by AAA credit rating from Moody's is a must grab.
But when it is unrated and it has poor future strategies, then I think it will be better if you put your money into blue chip stocks or diversified reits- Probably 6% over 7 years horizon, your money is safer.
I have to analyse on my own then. After studying its financial report and ripping it apart, below are my takeaways and humble thoughts.
Before I go to the financial jargon, I need to express that this is only my opinion and may not bear any truth at all. Analysis and thoughts are of personal opinions only. For every statement I make here, I will put 'I think'. (but it is up to you to discern what I say correct anot ;P)
1.Profit before tax dropped from FY14 to FY15 by a whopping approx. 62%
 |
FY 2014: $377,367m
FY 2015: $142,705m
Oxley holdings has achieved very impressive profits in Year 2013 and 2012, when the property market in Singapore was booming.
However, after the cooling property measures were implemented, many developers are facing a lackluster response in its properties. It is no surprise that Oxley was badly affected by it too.
Oxley has plans to expand overseas aggressively instead but looking at its financials, I do not find them promising. (to explain later)
2. Marketing expense increased 99%
I think when you increase your marketing expenses by 99% but then your results decrease by 62%, it means:A. Your marketing strategies CMI. (cannot make it)
B. You are not getting the response that you want, i.e, demand is not that good.
I think that it is option B because Oxley's marketing agents are mostly from Huttons and Huttons really produce impressive results in other properties previously. When you spend so much more on marketing yet get poor results, it just shows that your products are not as good.
3. Debt ratio and D/E ratio is high
I think it is high.Debt ratio (Total liabilities/Total assets) = 0.85 approx
The industry encourages standard of about (0.3~0.6) only.
Debt/equity ratio (Debt/equity)= 5.807 approx.
Other companies are <1.......
I think Oxley has too much leverage and it is risky.This means that if their business fail, I think I will be in queue 1,000,000 to get back my money lor omg. (Just joking, queue no. is a fake anyhow say number)
Look at its fixed notes it previously issued:
I think those that were issued in Year 2013 were for its projects in Y2013/Y2014 which did receive resounding success. Oxley should be able to pay them.
But for notes issued now, the money I think will be used for its overseas projects venture moving on but this leads me to the next point.
4.No confidence in Oxley's overseas projects venture
Look at this:
Forget its FY2015 poor performance. I think future plans are very important and the strategies form the crux of whether the company is a good investment a not.
Looking at this table, I really do not think Oxley overseas projects are promising.
A. Projects in Cambodia
I go to Cambodia- Phnom Penh every single year (I'm not a Cambodian btw) and I have some close friends there. There is an association there which I am committed too and has a close relationship with. As such, I think I have some knowledge to really say how Phnom Penh is like. And this is what majority of Phnom Penh is:
1. Mud & uneven roads
2. Slums
3.Corruption
4. Poverty
5. Main language of the people is Khmer
6. More well off people work as factory garment workers
7. Less well off people open shops infront of their living area and sell the same stuffs that other shops sell too.
8. Children not wearing underwear and running around
9. many many other scenario depicting a 3rd world country
Phnom Penh has a very very long way to go for foreign investments. And to build high rise condominiums and to attract expats to stay there, well, I think, more likely they will become AirBnb.
I do not think that Oxely's property developments in Phnom Penh are promising although their first project there did receive a good response.
B. Projects in Malaysia
Exchange rate of those people who bought properties in Malaysia during year 2013 when the market is booming there: SGD 1: MYR 2.65
The exchange rate now: SGD 1: MYR 3.05
Exchange rate in future: ????
With a very questionable government, weak currency, poor security, I think the property market there is certainly not as attractive as in year 2013. As such, I do not think that projects there will receive good response.
Also, Setia Berhad, the leading property developer there, has much more competitive advantage in its home land as compared to Oxley.
Given that Singapore's developers are facing a weakening demand here, and Oxley's prime focus is shifting to overseas with such projects in such countries, I do not have the confidence in their ventures.
5. You can get 5% yield elsewhere too
5% yield capital guaranteed by AAA credit rating from Moody's is a must grab.
But when it is unrated and it has poor future strategies, then I think it will be better if you put your money into blue chip stocks or diversified reits- Probably 6% over 7 years horizon, your money is safer.
Conclusion
I will not buy Oxley's retail 5% bonds because the risk does not justify the returns.Monday 26 October 2015
Recent Action- Sold Capitamall Trust
I sold CapitaMall Trust today and as such, I will not be entitled to its dividends.(ex- dividend date 28.10.15) After factoring this opportunity cost, I still think that at $2.06, it has reached its potential. I shall reap my profits now and gain entry again perhaps next year.
Looking at its 3Qtr 2015 financial report, below are my takeaways:
1. Net property income dropped.
Net property Income has dropped again, consecutively since 2Qtr 2015. The drop is about 0.7%. I expect that it will continue to drop until the 3 malls which are not faring well now brushes up in its rentals.
2. 3 main properties facing a drop in rental income:
IMM
Rental was affected due to renovation works but a link bridge to Devan Nair Institute is completed. Only after all renovation works done and the mall is fully operating then the property income will increase.
JCube
This is a headache.. seriously.
With three shopping malls at Jurong East, west siders are spoilt for choice. Jcube is also very out of the way for shoppers and most of the time, I do not make any effort to go there at all as it is really inconvenient. Furthermore, the toilets stink. The most disgusting toilets are awarded to Jcube, like seriously. Lol.
Anyway, recently there is a revamp at Level 2- a mini Bugis street look alike. I find that appealing since there are many clothes to shop and it really belongs to a league of its own- teenagers. The ice skating rink is a good attraction too.
Clark Quay
After the liquor laws kick in, Clark Quay has become much quieter than before. Previous tenants like MOF are no longer operating. Some clubs are finding it tough to survive too.
Good news is that Zouk will be renting a place here but that will only start in June 2016.
I expect that the rental incomes of these 3 properties will only start to improve in 2016 onwards which translate to weaker income for 4th Qtr 2015 and 1st Qtr 2016. Before I see this stock price dropping, let me sell it first.
3. I expect Finance cost to increase.
Finance costs for YTD Sept 2015 was lower due to low interest rates in Aug 2014, Nov 2014 and Feb 2015. However, moving on to the next Qtr, I believe that the interest rates have risen quite a bit and that will translate to higher finance costs.
4. Good move to buy Bedok Mall
Bedok Mall's business is buoyant and there is high human traffic. However, I do not think that this mall alone will be able to salvage the other three dropping incomes.
5. Better opportunities for my $
Frasers Centre Point trust is certainly doing much better. Almost all of the surb-urban malls enjoy good human traffic. The recent financials are good too.
I will accumulate my war chest by cashing out CMT and divest to other better performing stocks now.
As for CMT, let it sort out the ailing 3 mallsand I will make an entry again probably next year.
Looking at its 3Qtr 2015 financial report, below are my takeaways:
1. Net property income dropped.
Net property Income has dropped again, consecutively since 2Qtr 2015. The drop is about 0.7%. I expect that it will continue to drop until the 3 malls which are not faring well now brushes up in its rentals.
2. 3 main properties facing a drop in rental income:
IMM
Rental was affected due to renovation works but a link bridge to Devan Nair Institute is completed. Only after all renovation works done and the mall is fully operating then the property income will increase.
JCube
This is a headache.. seriously.
With three shopping malls at Jurong East, west siders are spoilt for choice. Jcube is also very out of the way for shoppers and most of the time, I do not make any effort to go there at all as it is really inconvenient. Furthermore, the toilets stink. The most disgusting toilets are awarded to Jcube, like seriously. Lol.
Anyway, recently there is a revamp at Level 2- a mini Bugis street look alike. I find that appealing since there are many clothes to shop and it really belongs to a league of its own- teenagers. The ice skating rink is a good attraction too.
Clark Quay
After the liquor laws kick in, Clark Quay has become much quieter than before. Previous tenants like MOF are no longer operating. Some clubs are finding it tough to survive too.
Good news is that Zouk will be renting a place here but that will only start in June 2016.
I expect that the rental incomes of these 3 properties will only start to improve in 2016 onwards which translate to weaker income for 4th Qtr 2015 and 1st Qtr 2016. Before I see this stock price dropping, let me sell it first.
3. I expect Finance cost to increase.
Finance costs for YTD Sept 2015 was lower due to low interest rates in Aug 2014, Nov 2014 and Feb 2015. However, moving on to the next Qtr, I believe that the interest rates have risen quite a bit and that will translate to higher finance costs.
4. Good move to buy Bedok Mall
Bedok Mall's business is buoyant and there is high human traffic. However, I do not think that this mall alone will be able to salvage the other three dropping incomes.
5. Better opportunities for my $
Frasers Centre Point trust is certainly doing much better. Almost all of the surb-urban malls enjoy good human traffic. The recent financials are good too.
I will accumulate my war chest by cashing out CMT and divest to other better performing stocks now.
As for CMT, let it sort out the ailing 3 mallsand I will make an entry again probably next year.
Monday 28 September 2015
Will I buy stocks now?
Just a very quick Q&A..
1. Why did the STI drop so much this week?
The main reason was due to China' slowdown in economy with China's manufacturing activity falling to the lowest level in 6 years.
2. Are there any signs that China's economy is improving?
No. As someone working in the Metal commodity industry, I have first hand knowledge of China's metal prices such as in Iron Ore, finished products and scraps. The prices are dropping so much that it is really rather depressing. It is still dropping now and then.. I am afraid that this quarter's performance may even be more dismal.
Chinese construction market is slowing and it has an obvious effect on its metal prices. Working backwards, I can only believe that China is facing a negative demand brought about by a slowing economy. I can see the correlation in China's metal prices and China's economy and China's stock prices and Singapore's economy and Singapore's stock prices..(You get it).
3. Will I buy stocks now?
The short answer is No. I believe that prices have yet to hit rock bottom and metal commodity prices are not showing any sign of improvement.
4. Will I sell my stocks now?
No. Warren Buffet says 'If you can't hold a stock for 10 years, then do not think of holding it for 10 minutes"
My stocks are for long term and I still firmly believe in the companies that I have chosen.
And really, there is no reason why I should be selling at a loss!!
These are really my humble thoughts. Feel free to leave a comment. Thank you!
1. Why did the STI drop so much this week?
The main reason was due to China' slowdown in economy with China's manufacturing activity falling to the lowest level in 6 years.
2. Are there any signs that China's economy is improving?
No. As someone working in the Metal commodity industry, I have first hand knowledge of China's metal prices such as in Iron Ore, finished products and scraps. The prices are dropping so much that it is really rather depressing. It is still dropping now and then.. I am afraid that this quarter's performance may even be more dismal.
Chinese construction market is slowing and it has an obvious effect on its metal prices. Working backwards, I can only believe that China is facing a negative demand brought about by a slowing economy. I can see the correlation in China's metal prices and China's economy and China's stock prices and Singapore's economy and Singapore's stock prices..(You get it).
3. Will I buy stocks now?
The short answer is No. I believe that prices have yet to hit rock bottom and metal commodity prices are not showing any sign of improvement.
4. Will I sell my stocks now?
No. Warren Buffet says 'If you can't hold a stock for 10 years, then do not think of holding it for 10 minutes"
My stocks are for long term and I still firmly believe in the companies that I have chosen.
And really, there is no reason why I should be selling at a loss!!
These are really my humble thoughts. Feel free to leave a comment. Thank you!
Thursday 20 August 2015
My actions in this bear market
Here's what I have strategized during this horrible bear market.
1. Console myself that STI annual returns was about 8-9% throughout the past 28 years.
Here's the chart:
From year 1987 to Aug 2015 now, the returns was 265.62%, over 28 years annualize as 9.48%.
STI has fluctuated many many times but the general trend is upward. One should treat stock investments as a long term serious commitment, and have the patience to ride out the rocky waves from time to time. My investment horizon is 10 years at least, not 10 months or 10 days.
This brings out to my next point:
2. Be patient, hold my stocks.
I read somewhere about the psychology of most investors and why majority lose money in stocks. Credits to the rightful owner of this picture (which I do not have the source).
Are you selling your stocks now? are you selling it at a loss?
Why are you selling it at a loss when you should be selling it at a profit?
Is it because your stocks are junk? wait, if you stocks are junk, why have you bought them??
This brings about to the next point again.
3. Look at the fundamentals
Although one should treat investment as a long term horizon, it is also very important to look at the financial statements of the company periodically. I have great interest and excitement whenever I look at the company's financials!
Is the company doing reasonably well and having a decent growth rate? how is the industry doing? how is the management? what have they conveyed as their growth strategies?
If the company does not seem to be doing well either because the company is lacking in groove, lacking in management leadership or generally because the industry has slowed down and show no signs of improving, then yes, it is time to cut your losses.
Other than that, if the company has strong fundamentals, it is best to HOLD and not sell at FEAR. pls omg.
4. Dollar cost averaging
'Dollar cost averaging' is an investment term used to describe the purchase of unit trusts. However, the principle can be applied when buying stocks.
It generally means that one can buy stocks gradually, inching bit by bit when stock prices changes.
Meaning:
500 lots at STI ETF $3.02
500 lots at STI ETF $2.80 ( if it really goes this low)
and then buy again when it drops further till when it finally starts going up.
This will mitigate the loss as the stock price is averaged out. Eventually (perhaps years later) when the stocks go up again, that's where the profits can be seen.
That being said, I am going to buy STI. I do have other blue chip stocks in mind that I think are really undervalued but I will not be sharing it here.
Till then, I will also not be logging into POEMS to check my portfolio. x.x
1. Console myself that STI annual returns was about 8-9% throughout the past 28 years.
Here's the chart:
From year 1987 to Aug 2015 now, the returns was 265.62%, over 28 years annualize as 9.48%.
STI has fluctuated many many times but the general trend is upward. One should treat stock investments as a long term serious commitment, and have the patience to ride out the rocky waves from time to time. My investment horizon is 10 years at least, not 10 months or 10 days.
This brings out to my next point:
2. Be patient, hold my stocks.
I read somewhere about the psychology of most investors and why majority lose money in stocks. Credits to the rightful owner of this picture (which I do not have the source).
Why are you selling it at a loss when you should be selling it at a profit?
Is it because your stocks are junk? wait, if you stocks are junk, why have you bought them??
This brings about to the next point again.
3. Look at the fundamentals
Although one should treat investment as a long term horizon, it is also very important to look at the financial statements of the company periodically. I have great interest and excitement whenever I look at the company's financials!
Is the company doing reasonably well and having a decent growth rate? how is the industry doing? how is the management? what have they conveyed as their growth strategies?
If the company does not seem to be doing well either because the company is lacking in groove, lacking in management leadership or generally because the industry has slowed down and show no signs of improving, then yes, it is time to cut your losses.
Other than that, if the company has strong fundamentals, it is best to HOLD and not sell at FEAR. pls omg.
4. Dollar cost averaging
'Dollar cost averaging' is an investment term used to describe the purchase of unit trusts. However, the principle can be applied when buying stocks.
It generally means that one can buy stocks gradually, inching bit by bit when stock prices changes.
Meaning:
500 lots at STI ETF $3.02
500 lots at STI ETF $2.80 ( if it really goes this low)
and then buy again when it drops further till when it finally starts going up.
This will mitigate the loss as the stock price is averaged out. Eventually (perhaps years later) when the stocks go up again, that's where the profits can be seen.
That being said, I am going to buy STI. I do have other blue chip stocks in mind that I think are really undervalued but I will not be sharing it here.
Till then, I will also not be logging into POEMS to check my portfolio. x.x
Sunday 2 August 2015
My portfolio in this terrible market
Omg the stock market has fallen from a high of STI 3500 during its Peak to the current 3195 now.
No idea when is the bottom. However, my portfolio has remained relatively 'unscathed'.
To recap, this was how my portfolio looks like and I explained briefly here.
The majority of my stocks are Trust & Reits and as they are more stable, they form a good backing for my overall portfolio. I am still gaining a net positive in these Reits and as a result, they mitigated the loss in my blue chip and growth stocks.
My reits stocks: AIMS AMP, Keppel DC
My trusts stocks: Capitamall (waiting for a better price to sell), FrasersCentre point trust
My blue chip stocks: Keppel, StarHub, Raffles Medical
My growth stocks: Q&M, Amtek Engineering, Hyflux, Alibaba
Sigh. If only entire portfolio is made up of Reits right? Yeah.. during a downturn, I think that way. But when it is bullish, things go the opposite way and I contemplate why I didn't buy more growth stocks. (lol)
Reits, bullish or bearish, they are relatively stable.
No idea when is the bottom. However, my portfolio has remained relatively 'unscathed'.
To recap, this was how my portfolio looks like and I explained briefly here.
My reits stocks: AIMS AMP, Keppel DC
My trusts stocks: Capitamall (waiting for a better price to sell), FrasersCentre point trust
My blue chip stocks: Keppel, StarHub, Raffles Medical
My growth stocks: Q&M, Amtek Engineering, Hyflux, Alibaba
Sigh. If only entire portfolio is made up of Reits right? Yeah.. during a downturn, I think that way. But when it is bullish, things go the opposite way and I contemplate why I didn't buy more growth stocks. (lol)
Reits, bullish or bearish, they are relatively stable.
Thursday 9 July 2015
Ezra Review- What's wrong with this company??
The very 'hot' stock recently is Ezra. Not that it is bulling in hotness, but boiling in danger and facing so much uncertainty that it is so hot. Someone very close to me is vested in it and is very troubled, so here I am, trying to offer a little advice.
Today's financial results- 10th July was released.
Oh my.. So many things that I conclude (purely based on my very humble thoughts, may not be factual so pls don't send me a lawyer's letter)
Pls read this with discretion and kindly note these are just what I THINK*
1. Company seems to show that they do not know how to control expenses
Revenue dropped by 3%. By right when revenue drops, one should see a drop in Expenses such as income/administrative. However, for Ezra, their expenses increased by so much.
Wow, cannot cut pay of high mgmt.? don't wish to retrench people? cannot control expenses? MNCs will come out with drastic cost cutting measures, including cutting high salaries of top mgmt. and board wide retrenchment. I don't see it in Ezra.
If it needs to be done, it has to be.
Which leads me to the next point.
2. Operating profit dropped 81%
Erm. That's like so close to having a negative profit already. The company still tried to sugar coat the announcement that their revenue maintained despite such challenging environment.
Pls open your eyes big big and look at the financial statements.
3. Offering rights to repay perpetual securities
I *think* this means that the company might be unable to pay off their debts, so they have to offer rights to raise money.
Not that they are raising money to fund growth. They are using it to pay their perpetual securities and bonds!
Which means.. more debt?
Conclusion: My advice
1. If you are not vested: Good for you, pls do not buy. Wait until the Saudi Arabia and the shale oil producers in USA have worked out a win win situation for the oil price to start climbing up. Otherwise, oil price is likely to remain low for a few years more.
2. If you are vested:
1. Have you bought the rights?
If yes: If you bought the rights at $0.1, you should sell it when trading commence, of course at a higher price.
If no: wait and observe today's price, since you have a week more to buy the rights.
Today's financial results- 10th July was released.
Oh my.. So many things that I conclude (purely based on my very humble thoughts, may not be factual so pls don't send me a lawyer's letter)
Pls read this with discretion and kindly note these are just what I THINK*
1. Company seems to show that they do not know how to control expenses
Revenue dropped by 3%. By right when revenue drops, one should see a drop in Expenses such as income/administrative. However, for Ezra, their expenses increased by so much.
Wow, cannot cut pay of high mgmt.? don't wish to retrench people? cannot control expenses? MNCs will come out with drastic cost cutting measures, including cutting high salaries of top mgmt. and board wide retrenchment. I don't see it in Ezra.
If it needs to be done, it has to be.
Which leads me to the next point.
2. Operating profit dropped 81%
Erm. That's like so close to having a negative profit already. The company still tried to sugar coat the announcement that their revenue maintained despite such challenging environment.
Pls open your eyes big big and look at the financial statements.
3. Offering rights to repay perpetual securities
I *think* this means that the company might be unable to pay off their debts, so they have to offer rights to raise money.
Not that they are raising money to fund growth. They are using it to pay their perpetual securities and bonds!
Which means.. more debt?
Conclusion: My advice
1. If you are not vested: Good for you, pls do not buy. Wait until the Saudi Arabia and the shale oil producers in USA have worked out a win win situation for the oil price to start climbing up. Otherwise, oil price is likely to remain low for a few years more.
2. If you are vested:
1. Have you bought the rights?
If yes: If you bought the rights at $0.1, you should sell it when trading commence, of course at a higher price.
If no: wait and observe today's price, since you have a week more to buy the rights.
Sunday 5 July 2015
Understanding stock price support levels of Starhub & M1
Hello,
In my previous blog post here about how StarHub was such a good buy on 29th June at $3.70, I received a comment that M1 trading at $3.23 now might be a good buy too even though I have missed SH's boat.
However, I would like to explain in detail about the concept of price support levels and how it is important in investing.
1. What is 'Support' and 'Resistance' in stock price?
Pls see figure 1.
As quoted from Investopedia, "Support is the price level through which a stock or market seldom falls (illustrated by the blue arrows). Resistance, on the other hand, is the price level that a stock or market seldom surpasses (illustrated by the red arrows)."
2. Therefore, one should buy at Support level and sell at Resistance!
3. Why StarHub was a better buy than M1 at $3.70
In my previous blog post here about how StarHub was such a good buy on 29th June at $3.70, I received a comment that M1 trading at $3.23 now might be a good buy too even though I have missed SH's boat.
However, I would like to explain in detail about the concept of price support levels and how it is important in investing.
1. What is 'Support' and 'Resistance' in stock price?
Pls see figure 1.
As quoted from Investopedia, "Support is the price level through which a stock or market seldom falls (illustrated by the blue arrows). Resistance, on the other hand, is the price level that a stock or market seldom surpasses (illustrated by the red arrows)."
2. Therefore, one should buy at Support level and sell at Resistance!
3. Why StarHub was a better buy than M1 at $3.70
SH price support level since 2014 was at $4.00. At $3.70, it has broken the price support level and it is a rarity to drop by 7.5% of this support level on 29 June.
On the other hand, M1 at $3.23 (current price now), this price support level was already broken through in June, before the greekexit crisis. On 29 June, M1 reached its lowest at $3.16, a drop of only 1.85% of its support level. At this price level, there is no 'rarity' in its pricing.
4. Time value of money
If I had bought SH at $3.70, it was as good as buying the same stock in June 2013, this was the selling price 2 years ago.
However, at $3.23 for M1 now, it is only as good as buying this stock in Jan 2014.
If both were to maintain the same earnings as compared to previous years, by 'time travelling' to the stock price of SH 2 years ago, it is a much better buy.
Conclusion:
Understanding Price support and resistance levels is useful when discerning when to buy and sell.
Market sentiments seem to regard SH as a better stock due to its stronger price support levels, although M1's financials might be better.
Wednesday 1 July 2015
StarHub- Missed the boat
So.. SH was trading at $3.70 on Monday, finally breaking through the $4.00 which it had strongly held on for the past year. Monday (29 June) was the day when major stocks experienced a terrible diarrhea.
I was contemplating so hard whether to buy as it seemed to go free fall and with so much uncertainty over the Greek bailout.
Anyway, fast forward three days later, major stocks have slightly rebounded.
At $3.94, I can't exactly say that SH is trading at a good value as it has too much debt. However, I notice that it has better resistance than M1 when the latter fares better in its financials instead.
Missed the boat. No idea when I can take such a good chance again. Arrrgh.
I was contemplating so hard whether to buy as it seemed to go free fall and with so much uncertainty over the Greek bailout.
Anyway, fast forward three days later, major stocks have slightly rebounded.
At $3.94, I can't exactly say that SH is trading at a good value as it has too much debt. However, I notice that it has better resistance than M1 when the latter fares better in its financials instead.
Missed the boat. No idea when I can take such a good chance again. Arrrgh.
Friday 5 June 2015
Pre-IPO stock options- Scam anot?
Sigh.. Recently, my friend told me that he bought a Pre-IPO stock in Singapore and he is convinced by the person talking in the seminar that he can earn a few times over. He says he trusts his friend who took him in and the institution.
Wow. seriously amazing. That's like 200%? 300%? 400%?
Meanwhile, these are the average returns of all other investments:
0.025% savings account
1.3% 1-year FD
3.25% OCBC 360 Account
7.8% S&P 500
15% Warren Buffet
Gua gua....
I have no idea what this Pre-IPO is about, what the seminar is about, who the person selling is so I can't say anything much.
BUT
1. Are you worth millions?
Sorry, if you are not worth millions I don't think you can get a pie of the Pre-IPO stock. Pre-IPOs are normally allocated to investment banks who are the underwriters and have lots of money. Unless you are the favorites of the investment banks (which means you are very very rich), you would perhaps be given a pie. Most people don't even have the connection to these investment banks.
2. Unpopular stock
I think it is very laughable when a company needs to set up a seminar to convince people to buy its Pre-IPO shares. Lol can you imagine Alibaba doing that last time? Do they need to? Or Facebook or twitter doing that? If they need to set up a seminar to convince people to buy, then sorry, it is probably a very lousy stock.
3. Too good to be true
High risk comes with high returns. Most investment vehicles can only have the average returns of at most 8% or a little higher if you are very good at it. It is very difficult and very unlikely to have abnormal returns consistently, like seriously can people use their brains to think????
Sigh. There have been so many investment scams being reported but why do people keeping falling and falling for them over and over again?
4. IPO may never materialize
There is no guarantee that the company will make it to the actual IPO or the actual price.
That's my input for this Pre-IPO don't know scam or not scam. I say, please, if you do not know what to invest or how to invest, I think it will be better if you just put your $ inside the ocbc 360 account.
Meanwhile, if any readers knows about this Pre-IPO thing, do enlighten me.
Thank you~
Tuesday 26 May 2015
Starhub Stock Review (II)
I previously blogged that Starhub (SH) was trading at an insane price of $4.43 (here) and that was overvalued. I have sold off SH at $4.39 and it didn't surprise me that it is now trading at $4.02, near to its 52 week low.
The big drop came about after SH announced that its profit from operations has decreased by 15% when compared to 1Q2014. EBITDA was also 8.5% lower for the quarter.
With my analysis of $4.04 a share, P/E is 19.95 times. SingTel's P/E is 18.5 and M1's 18.48. This might mean that at this current share price, it is not exactly an attractive stock to buy. The D/E is 4.63 (really high) whereas the other 2 telcos are 0.37/0.56 respectively.
The PEG ratio is also high as compared to other Telcos. :(
I think the only saving grace is still its attractive dividend payout. But I wouldn't risk buying the stock and then half a year later, see a drop in price value again. End up my net return would still be the same or even worse.
Technical jargons aside, I wouldn't buy this stock yet. Not now.
The big drop came about after SH announced that its profit from operations has decreased by 15% when compared to 1Q2014. EBITDA was also 8.5% lower for the quarter.
With my analysis of $4.04 a share, P/E is 19.95 times. SingTel's P/E is 18.5 and M1's 18.48. This might mean that at this current share price, it is not exactly an attractive stock to buy. The D/E is 4.63 (really high) whereas the other 2 telcos are 0.37/0.56 respectively.
The PEG ratio is also high as compared to other Telcos. :(
I think the only saving grace is still its attractive dividend payout. But I wouldn't risk buying the stock and then half a year later, see a drop in price value again. End up my net return would still be the same or even worse.
Technical jargons aside, I wouldn't buy this stock yet. Not now.
Monday 18 May 2015
QnM share Part II- Caution
In my previous post, I mentioned that QnM is a good buy, and I vested it at $0.81. That was when market open after the financial results released the night before.
Omg today I look at the price and it shot up to $1!
At $1, the dynamics is very different from $0.81. It might be overvalued given that the P/E is a whooping 80+/- ! Nobody knows for sure that their acquisitions in China and Sg might be soaring with good revenues in the next quarter and the equity it faces might be a challenge.
I urge investors to take a cautious approach for this particular stock please.
Omg today I look at the price and it shot up to $1!
At $1, the dynamics is very different from $0.81. It might be overvalued given that the P/E is a whooping 80+/- ! Nobody knows for sure that their acquisitions in China and Sg might be soaring with good revenues in the next quarter and the equity it faces might be a challenge.
I urge investors to take a cautious approach for this particular stock please.
Tuesday 12 May 2015
QnM Dental - Potential growth stock?
QnM Dental posted a very positive financial results ending 1st Qtr 2015.
1. Big jump in profit before tax
The Group’s 1Q15 profit before tax rose by 173% to $4.5 million from $1.6 million in 1Q14.
173%!! The increase was mainly due to contributions from acquisitions of their China investments.
2. Current Holdings
They have 60 dental clinics, 1 mobile clinic, 3 medical outlets, and 1 aesthetic clinic in Singapore.
In Malaysia, 3 dental hospitals.
In China, 4 dental outlets.
My take is that dental healthcare is a consistent sustainable business to be in, as many companies in Singapore provides dental benefits to their employees. In addition, when one ages, it becomes a need to see the dentist more often.. Just look at my parents, at the age of 60+, they have spent thousands on dental care!
3. Ambitious expansion plans
Now this is the exciting part. QnM has requested for a trading halt earlier this week and yesterday, they have announced their proposition to acquire 8 dental clinics located island wide.
Their profit target amounts to approx. $16.10 million.
Key dentists to be in charge to sign long term service agreements.
Apart from this, they have plans to expand into private dental healthcare in the PRC, Malaysia and through other acquisitions.
Conclusion:
Although I do have a little concern on over aggressiveness of expansion plans, at this moment I think QnM is promising.
Vested at $0.81 today when market open. :D
1. Big jump in profit before tax
The Group’s 1Q15 profit before tax rose by 173% to $4.5 million from $1.6 million in 1Q14.
173%!! The increase was mainly due to contributions from acquisitions of their China investments.
2. Current Holdings
They have 60 dental clinics, 1 mobile clinic, 3 medical outlets, and 1 aesthetic clinic in Singapore.
In Malaysia, 3 dental hospitals.
In China, 4 dental outlets.
My take is that dental healthcare is a consistent sustainable business to be in, as many companies in Singapore provides dental benefits to their employees. In addition, when one ages, it becomes a need to see the dentist more often.. Just look at my parents, at the age of 60+, they have spent thousands on dental care!
3. Ambitious expansion plans
Now this is the exciting part. QnM has requested for a trading halt earlier this week and yesterday, they have announced their proposition to acquire 8 dental clinics located island wide.
Their profit target amounts to approx. $16.10 million.
Key dentists to be in charge to sign long term service agreements.
Apart from this, they have plans to expand into private dental healthcare in the PRC, Malaysia and through other acquisitions.
Conclusion:
Although I do have a little concern on over aggressiveness of expansion plans, at this moment I think QnM is promising.
Vested at $0.81 today when market open. :D
Monday 4 May 2015
How to have $1m by age 55 & what if you do not invest..
It is no secret: Start investing and saving 30% of your savings at age 25!!
This is like a super conservative estimate:
Assumptions:
1. At age 25- Salary of $3k. Saves 30% of annual salary.
2. Saves and invests at 4.5% returns
3. Salary increases at 5% until age 30, thereafter increasing at 3% until age 40. Savings correspondingly increases too.
4. Salary reaches a max of $5k until age 45. Salary drops to 4k thereafter until age 55.
I think saving 30% of your salary annually is not that difficult right? I haven't even take into account of all the bonuses during the year end! 4.5% returns in investment is attainable, most achieve at least 7-8% for the better investors. Well if you manage to get at 5% returns, you can achieve $1m at age 53 :) calculation done.
There is no secret, the compounding effect is most powerful and benefits most during the early stages so one should really start investing and saving early.
Investing early case scenarios:
Let's further take a look at Peter and Mary case scenarios. Both of them save and invest at $700 per month, or $8400 annually. However, Peter only started saving diligently at age 35 whereas Mary started at age 25, about 10 years early.
Their portfolio at age 60:
As you can see, Mary has about $700k+ in her portfolio whereas Peter has only $400k+. That's such a big difference of $300k+!
If you do not invest AT ALL
Lastly, if you do NOT invest at all. If you were to save 30% of your annual salary and put all into the bank... ok last just assume you put all into fixed deposits as it is very safe and secure. The return is 1%.
The graph has explained itself. Your portfolio will only be 50% of what the 4.5% return portfolio have, even if both saves at the exact amount of $700 per month.
The conclusion of this post is: Save and invest early, save and invest consistently!
This is like a super conservative estimate:
Assumptions:
1. At age 25- Salary of $3k. Saves 30% of annual salary.
2. Saves and invests at 4.5% returns
3. Salary increases at 5% until age 30, thereafter increasing at 3% until age 40. Savings correspondingly increases too.
4. Salary reaches a max of $5k until age 45. Salary drops to 4k thereafter until age 55.
I think saving 30% of your salary annually is not that difficult right? I haven't even take into account of all the bonuses during the year end! 4.5% returns in investment is attainable, most achieve at least 7-8% for the better investors. Well if you manage to get at 5% returns, you can achieve $1m at age 53 :) calculation done.
There is no secret, the compounding effect is most powerful and benefits most during the early stages so one should really start investing and saving early.
Investing early case scenarios:
Let's further take a look at Peter and Mary case scenarios. Both of them save and invest at $700 per month, or $8400 annually. However, Peter only started saving diligently at age 35 whereas Mary started at age 25, about 10 years early.
Their portfolio at age 60:
As you can see, Mary has about $700k+ in her portfolio whereas Peter has only $400k+. That's such a big difference of $300k+!
If you do not invest AT ALL
Lastly, if you do NOT invest at all. If you were to save 30% of your annual salary and put all into the bank... ok last just assume you put all into fixed deposits as it is very safe and secure. The return is 1%.
The graph has explained itself. Your portfolio will only be 50% of what the 4.5% return portfolio have, even if both saves at the exact amount of $700 per month.
The conclusion of this post is: Save and invest early, save and invest consistently!
Sunday 26 April 2015
My portfolio of stocks
This is how my portfolio of stocks is like, or what I try to have:
My investment strategy:
Long term -10yrs at least
Conservative risk appetite
Aim for passive income
1. Blue Chip Stocks
Blue chip stocks are stocks belonging to well-established and finally sound companies that have operated for many years. They are normally the market leaders in their respective industries. For e.g. Starhub/Singtel/SembCorp/Keppel/CapitaLand/UOB
Their earnings are consistent, sustainable and provide stable dividends. Once in awhile, I would just need to take a look at their financial statements to see their earnings and future growth. I wouldn't be too worried about their performance.
2. Trusts and Reits
Reits is a stock that invests in real estate directly and typically offer investors high dividend yields and highly liquid method of investing in real estate. For e.g., AIMS AMP CAPITAL INDUSTRAIL REIT comprises of a portfolio of industrial real estate properties in Singapore. They have warehousing/logistics/Manufacturing/Business parks. What I like about trusts and reits are the relatively stable stock prices (one that does not fluctuate much) and a consistent dividend payout.
3. Undervalued stocks
I tend to keep some cash at my bank to spot on undervalued stocks and make an immediate 'Buy' when the stock market makes a slight correction. For e.g., there was a very brief period where Capitamall trust was selling at $1.9+ and I quickly made a purchase of it.
Of course, due to market efficiency, there are always reasons that justifies that value but having analyzed their financial reports, I believed that it was a worthy purchase and one that might be undervalued. True enough, it didn't take long before it sets back to $2.++ price, a price that holds it stable for the past year.
Such market corrections are not the norm, and it requires some analysis on each individual stock.
4. Potential high growth stock
I think spotting a good potential high growth stock is one of the most ardent task and requires one to look carefully at the fundamentals, analyze the industry, analyze the current value and then determine whether it is worthy to purchase. Not easy, but I guess the returns are one of the highest. That's where we have Warren Buffet..
So here it is, my portfolio. I think that it is relatively conservative as I just looking at a stable flow of passive income.
Do NOT day-trade:
In addition, I am not an advocate of Day trading, nor do I encourage anyone to be. The main reason is because only a very small percentage of day traders (perhaps lesser than 10%) can consistently earn from it. Today, you might be able to earn thousands from it but tomorrow you can lose everything. It is really, a form of gambling. Technical analysis, to me, does not make much logical sense.
Long term -10yrs at least
Conservative risk appetite
Aim for passive income
1. Blue Chip Stocks
Blue chip stocks are stocks belonging to well-established and finally sound companies that have operated for many years. They are normally the market leaders in their respective industries. For e.g. Starhub/Singtel/SembCorp/Keppel/CapitaLand/UOB
Their earnings are consistent, sustainable and provide stable dividends. Once in awhile, I would just need to take a look at their financial statements to see their earnings and future growth. I wouldn't be too worried about their performance.
2. Trusts and Reits
Reits is a stock that invests in real estate directly and typically offer investors high dividend yields and highly liquid method of investing in real estate. For e.g., AIMS AMP CAPITAL INDUSTRAIL REIT comprises of a portfolio of industrial real estate properties in Singapore. They have warehousing/logistics/Manufacturing/Business parks. What I like about trusts and reits are the relatively stable stock prices (one that does not fluctuate much) and a consistent dividend payout.
3. Undervalued stocks
I tend to keep some cash at my bank to spot on undervalued stocks and make an immediate 'Buy' when the stock market makes a slight correction. For e.g., there was a very brief period where Capitamall trust was selling at $1.9+ and I quickly made a purchase of it.
Of course, due to market efficiency, there are always reasons that justifies that value but having analyzed their financial reports, I believed that it was a worthy purchase and one that might be undervalued. True enough, it didn't take long before it sets back to $2.++ price, a price that holds it stable for the past year.
Such market corrections are not the norm, and it requires some analysis on each individual stock.
4. Potential high growth stock
I think spotting a good potential high growth stock is one of the most ardent task and requires one to look carefully at the fundamentals, analyze the industry, analyze the current value and then determine whether it is worthy to purchase. Not easy, but I guess the returns are one of the highest. That's where we have Warren Buffet..
So here it is, my portfolio. I think that it is relatively conservative as I just looking at a stable flow of passive income.
Do NOT day-trade:
In addition, I am not an advocate of Day trading, nor do I encourage anyone to be. The main reason is because only a very small percentage of day traders (perhaps lesser than 10%) can consistently earn from it. Today, you might be able to earn thousands from it but tomorrow you can lose everything. It is really, a form of gambling. Technical analysis, to me, does not make much logical sense.
Friday 24 April 2015
Fraser Centrepoint Trust Stock Analysis
This is a follow up of the review of FCT's 2Q2015 financial results originally posted here .
1. Operational performance
The remaining renewals in FY2015 are mainly at Northpoint, Causeway Point (CWP) and Yew Tee point. Yew Tee point forms the bulk of the renewals.
I do not have much concerns over CWP. Personally, as someone staying in the North and then having moved to the West recently, CWP has been a very bustling mall since years ago and is always packed with people in the weekends. It is not a surprise because at Woodlands, this is the one and only shopping mall to go. Many republic polytechnic students also go there to shop or dine after their studies. The next nearest is either SunPlaza which is really crap or Lot1. Lot1 isn't that popular compared to CWP too.
As for Yew Tee point, I can relate it as a small Plaza in a suburban area fulfilling a myriad of basic needs for the people living around there. Having been there several times, I do think the shopper traffic there is relatively good.
Fraser Centrepoint has strategically locate their retail malls at the suburban areas and most are doing well, except pehaps for BedokPoint.
2. Gearing ratio
Gearing has reduced from 29.3% to 28.6% and % of borrowings on fixed rates or hedged via interest rate swaps has increased by 12%. This means that their debt and risk management is improving.
Interest rates, however, has increased.
3.Outlook
Some of the challenges include manpower shortage, competition from online sales and slowing retail sales growth. However, rising average household income and population coupled with low unemployment rate, I think one can expect a sustainable performance for FCT.
1. Operational performance
The remaining renewals in FY2015 are mainly at Northpoint, Causeway Point (CWP) and Yew Tee point. Yew Tee point forms the bulk of the renewals.
I do not have much concerns over CWP. Personally, as someone staying in the North and then having moved to the West recently, CWP has been a very bustling mall since years ago and is always packed with people in the weekends. It is not a surprise because at Woodlands, this is the one and only shopping mall to go. Many republic polytechnic students also go there to shop or dine after their studies. The next nearest is either SunPlaza which is really crap or Lot1. Lot1 isn't that popular compared to CWP too.
As for Yew Tee point, I can relate it as a small Plaza in a suburban area fulfilling a myriad of basic needs for the people living around there. Having been there several times, I do think the shopper traffic there is relatively good.
Fraser Centrepoint has strategically locate their retail malls at the suburban areas and most are doing well, except pehaps for BedokPoint.
2. Gearing ratio
Gearing has reduced from 29.3% to 28.6% and % of borrowings on fixed rates or hedged via interest rate swaps has increased by 12%. This means that their debt and risk management is improving.
Interest rates, however, has increased.
3.Outlook
Some of the challenges include manpower shortage, competition from online sales and slowing retail sales growth. However, rising average household income and population coupled with low unemployment rate, I think one can expect a sustainable performance for FCT.
Wednesday 22 April 2015
Fraser Centrepoint Trust 2Q2015 distributable income rose 14%
With the increase in net income of 3% by Capitamall Trust for 1Q2015 (mentioned here), it is not a surprise that Fraser Centrepoint Trust (FCT) results were positive as well ^^
FCT did better as its increase was a whooping 14.4%! Distributable per unit increased by 6.2%, a pretty good figure.
"FCT’s property portfolio comprises the following suburban retail properties in Singapore: Causeway Point, Northpoint, Anchorpoint, YewTee Point, Bedok Point and Changi City Point..The Properties are strategically located in various established residential townships, and have a large and diversified tenant base covering a wide variety of trade sectors. "
And with that, I totally agree.
If you are looking at a good source of passive income, this is a stock to consider :D
FCT did better as its increase was a whooping 14.4%! Distributable per unit increased by 6.2%, a pretty good figure.
"FCT’s property portfolio comprises the following suburban retail properties in Singapore: Causeway Point, Northpoint, Anchorpoint, YewTee Point, Bedok Point and Changi City Point..The Properties are strategically located in various established residential townships, and have a large and diversified tenant base covering a wide variety of trade sectors. "
And with that, I totally agree.
If you are looking at a good source of passive income, this is a stock to consider :D
Tuesday 21 April 2015
CapitaMall Trust Financial Results 1st Qtr 2015 Stock Review
Capitamall Trust has released their 1st Qtr 2015 Financial Results. Trusts and Reits are a good source of dividends as they have rather consistent payouts. However, their stock prices do not fluctuate much so do not expect much capital gains.
Most buy Trusts and Reits to park money into it and leave it there for a long long time. They then enjoy the dividends payout and return of about 4.7% which is pretty good.
Anyway,a good sign that Capitamall Trust's Net property income has increased by 3% and DPU (Distribution per unit) is 2.68cents per share (annualized as 10.87 cents) which means it has increased.
Their shopping malls such as Plaza Sing, IMM, Junction 8 are always packed with people and have high occupancy rates. Well I enjoy shopping and I tend to think that Singaporeans will continue to shop during weekends as long as the economy is not facing a drastic recession. Look, there aren't many places to go in Singapore and with Singapore's very hot climate, I would think that majority of the people prefer air conditioned places like Shopping Malls.
Yes, I think can buy, ideally at $2.21 (today's lowest price).
Most buy Trusts and Reits to park money into it and leave it there for a long long time. They then enjoy the dividends payout and return of about 4.7% which is pretty good.
Anyway,a good sign that Capitamall Trust's Net property income has increased by 3% and DPU (Distribution per unit) is 2.68cents per share (annualized as 10.87 cents) which means it has increased.
Their shopping malls such as Plaza Sing, IMM, Junction 8 are always packed with people and have high occupancy rates. Well I enjoy shopping and I tend to think that Singaporeans will continue to shop during weekends as long as the economy is not facing a drastic recession. Look, there aren't many places to go in Singapore and with Singapore's very hot climate, I would think that majority of the people prefer air conditioned places like Shopping Malls.
Yes, I think can buy, ideally at $2.21 (today's lowest price).
Sunday 19 April 2015
Keppel Corp Financial Results Stock Review
Finally I had some time to analyze their financial results which were released last week.
A key part of being a sound and informed investor is to really read financial statements properly and 'between the lines'.
It was posted that the net profit increased by 6% compared to the same period in 2014. I find that this figure is not meaningful as they used "profit attribute to shareholders" and not "operating profit. "
This is my analysis:
1. Operating profit dropped YOY
Operating profit dropped year on year. Looking at the red box figures below, the drop is about 4%.
2. Operating Profit dropped QOQ
Take a look at the 1st Qtr 2015 Results:
A key part of being a sound and informed investor is to really read financial statements properly and 'between the lines'.
It was posted that the net profit increased by 6% compared to the same period in 2014. I find that this figure is not meaningful as they used "profit attribute to shareholders" and not "operating profit. "
This is my analysis:
1. Operating profit dropped YOY
Operating profit dropped year on year. Looking at the red box figures below, the drop is about 4%.
Operating profit dropped Quarter on Quarter. I thought I saw wrongly when I compared the 4th Qtr of 2014 to the 1st Qtr of 2015.
This is the 4th Qtr 2014 results:
Take a look at the 1st Qtr 2015 Results:
That's like a 57.2% drop!? I am not sure whether this is seasonal so I would not really be overly concerned about this, albeit I would take a more cautious outlook.
3. Order book is disappointing
I get that oil prices have fallen drastically, and the oil and gas sector is not looking good now. But the new contracts secured so far for 2015 hasn't been assuring. It is only $0.5B so far..2015 has another 9 months to go and I don't foresee a miracle happening for new contracts being secured.
4. Other sectors not performing as well too
Keppel group comprise of 4 main sectors- Offshore and Marine, Property, Infrastructure and Investments.
Offshore & Marine: Dropped 17%
Property: Dropped 22%
Infrastructure: Dropped 26%
Investments: Increased by almost 6 times
The only redeeming factor was Investments, which they have attributed it to 'the sale of investments'.
The worst performing segment was Infrastructure which was due to a lower contribution from the power and gas businesses.
5. EPS increased
EPS has increased to 19.8cts, compared to 18.7cts for the same qtr 2014. I would take this with a pinch of salt though.
Conclusion:
It is no wonder that by the time you see this, Keppel Corp stock price has fallen to $9.27 (it was trading at $9.4+ before the announcement of results).
Haizzzz. Don't look promising as their business is highly dependent on oil (Offshore+ Infrastructure).
I shall wait for the 2nd qtr results before purchase. Perhaps I am looking into a $8+ (low) price now before entering. Unless Mr Oil price is up again.
Wednesday 15 April 2015
StarHub Stock Review
StarHub has reached a new high again.
$4.43!!
For the whole of Year 2014, it has been hovering at $4.10+, reaching a low of about $4.00+ and then a max of about $4.20+.
Puzzling me especially when the latest financial statements haven't been exactly promising (net operating income fall, although gross profit increased).
With the 4th Telco coming up soon, I expect market share of the Telcos to be more diluted. There will be more competition with better mobile and data plans. That probably means a relatively slow growth (granted that population increase means a bigger consumer base).
The Price/Earning is 20 times. Crazy or what?
Sometimes I think people aren't really sure what to invest so they put their money into the highly raved SH and just go on shut off mode. That is fine too, especially if you do not want to constantly monitor the market and you are ok with returns of 4.5%.
For me, I can use the money to generate more returns with better growths. So SH at the moment is a No for me.
For the whole of Year 2014, it has been hovering at $4.10+, reaching a low of about $4.00+ and then a max of about $4.20+.
Puzzling me especially when the latest financial statements haven't been exactly promising (net operating income fall, although gross profit increased).
With the 4th Telco coming up soon, I expect market share of the Telcos to be more diluted. There will be more competition with better mobile and data plans. That probably means a relatively slow growth (granted that population increase means a bigger consumer base).
The Price/Earning is 20 times. Crazy or what?
Sometimes I think people aren't really sure what to invest so they put their money into the highly raved SH and just go on shut off mode. That is fine too, especially if you do not want to constantly monitor the market and you are ok with returns of 4.5%.
For me, I can use the money to generate more returns with better growths. So SH at the moment is a No for me.
Dividends paying stocks in Apr/May 2015.
Hello there.
If you haven't know, Apr is a bountiful month. Many stocks pay dividends during this month!
These are the stocks which I expect dividends to be paid out in Apr/May 2015 and are in my portfolio:
Of course, I have bought the stocks at a much lower price, so my yields are higher than the stated above.
My basis is also on past historical dividend announcement dates in 2013/2014.
The yields are based ONLY on their dividends, which I took reference from Year 2014 data. The dividends are generally consistent and stable. Some stocks enjoy both high growth and high dividends, which makes their yields much higher than stated.
It is important to know that you have to purchase the stock before the Ex-dividend date. Also, knowing in advance when are the dividend paying months allows you to monitor the stock prices early and only take position when the stock has a slight correction.
I tend to think that stocks prices generally fall after the ex-dividend date. But if you are looking into a long term investment horizon, then this slight fall shouldn't be a deciding factor. Wouldn't it be good if you can earn one more dividend payout?
Heidi.
If you haven't know, Apr is a bountiful month. Many stocks pay dividends during this month!
These are the stocks which I expect dividends to be paid out in Apr/May 2015 and are in my portfolio:
Of course, I have bought the stocks at a much lower price, so my yields are higher than the stated above.
My basis is also on past historical dividend announcement dates in 2013/2014.
The yields are based ONLY on their dividends, which I took reference from Year 2014 data. The dividends are generally consistent and stable. Some stocks enjoy both high growth and high dividends, which makes their yields much higher than stated.
It is important to know that you have to purchase the stock before the Ex-dividend date. Also, knowing in advance when are the dividend paying months allows you to monitor the stock prices early and only take position when the stock has a slight correction.
I tend to think that stocks prices generally fall after the ex-dividend date. But if you are looking into a long term investment horizon, then this slight fall shouldn't be a deciding factor. Wouldn't it be good if you can earn one more dividend payout?
Heidi.
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