Hello there!
It has been such a long time since I have blogged. Apologies, as I have not made any move in the stock market recently until Brexit happened.
The market fell last Friday (24.06.2016) and a strong rally happened so much so that I was thinking "Have the markets gone crazy or what???!"
Frasers Centrepoint Trust reached its 52 week high of $2.12 and I sold it off immediately.
I have blogged before on when you should sell a stock here and I was rather convinced that it might be overpriced.
I like the saying "A bird in the hand is worth 2 in the bushes". In this case, since I have made a 10% gain over the year, I quickly sold off the stock.
Will repurchase when the market comes to its senses again :)
Showing posts with label Some thoughts. Show all posts
Showing posts with label Some thoughts. Show all posts
Friday 1 July 2016
Monday 21 March 2016
When should you sell a stock?
The market has been bullish these 2 weeks.
I would like to maximize my profits, sell at the peak (hopefully) and repurchase when the stock is low. However, to time the market is very difficult and I do not encourage that too.
But there are still some very valid reasons on when I sell my stock.
A P/E ratio that is ridiculously high or a very bullish stock that keeps going up within a short period(a few days) without any significant company news can indicate that the stock is being driven by speculators.
I monitor the stock market every hourly x8 hours x 5 days a week x 12 months a year, and so far it has been 1 yr 8 months. Really eat too free lol.
There was a time where Q&M irrationally shot up to $1.00 at its peak. The normal trading price was around $0.68-$0.72 over the year.
StarHub traded at its peak of $4.46 when the average over the year was about $4.05-$4.18 before the 4th Telco came in.
For one to see when your stock is overvalued, I think you would really have to know your own stock SO WELL until you know how it might behave according to STI's movements.
There are some technical movements and volatility (we call that 'Beta' in a stock) unique to each stock Some stocks have very high beta (Noble) whereas some stocks are forever so stagnant (Reits). You can only confidently sell your stock if you know it has suddenly behaved irrationally.
In 2015, the announcement of the 4th Telco came and there were already plans for its entry. That was a good time to say goodbye to Starhub and M1 :(
A shift of fundamentals include the overall industry outlook and the company's competitiveness.
True enough, A-Reit hit a high about 2 months later and I sold it off again. I am still pessimistic about the market especially in the US side. I highly believe that US is heading for a recession this year.
Digress, I do need some funds for my war chest. I do not think that my opportunity cost to hold off a bit later will be that high.
Well, these are just my opinions learnt through several heart aches; I hope I am improving :)
I would like to maximize my profits, sell at the peak (hopefully) and repurchase when the stock is low. However, to time the market is very difficult and I do not encourage that too.
But there are still some very valid reasons on when I sell my stock.
1. When it is very likely (i.e. beyond a reasonable doubt) that the stock is overvalued.
A P/E ratio that is ridiculously high or a very bullish stock that keeps going up within a short period(a few days) without any significant company news can indicate that the stock is being driven by speculators.
I monitor the stock market every hourly x8 hours x 5 days a week x 12 months a year, and so far it has been 1 yr 8 months. Really eat too free lol.
There was a time where Q&M irrationally shot up to $1.00 at its peak. The normal trading price was around $0.68-$0.72 over the year.
StarHub traded at its peak of $4.46 when the average over the year was about $4.05-$4.18 before the 4th Telco came in.
For one to see when your stock is overvalued, I think you would really have to know your own stock SO WELL until you know how it might behave according to STI's movements.
There are some technical movements and volatility (we call that 'Beta' in a stock) unique to each stock Some stocks have very high beta (Noble) whereas some stocks are forever so stagnant (Reits). You can only confidently sell your stock if you know it has suddenly behaved irrationally.
2. When its fundamentals have changed
In 2015, the oil price started to spell trouble and that was a good time to sell oil stocks like Keppel when it was trading at $9+.In 2015, the announcement of the 4th Telco came and there were already plans for its entry. That was a good time to say goodbye to Starhub and M1 :(
A shift of fundamentals include the overall industry outlook and the company's competitiveness.
3. When you know you have a better opportunity
I sold Capital mall trust when I earned some decent profits then and I believed that at that particular time, it has hit a high. I sold it off and bought Ascendas Reit when I honestly think it was undervalued (at that time). This is a reason to sell a stock- to purchase a stock that is performing better (hopefully undervalued).True enough, A-Reit hit a high about 2 months later and I sold it off again. I am still pessimistic about the market especially in the US side. I highly believe that US is heading for a recession this year.
Digress, I do need some funds for my war chest. I do not think that my opportunity cost to hold off a bit later will be that high.
Well, these are just my opinions learnt through several heart aches; I hope I am improving :)
Wednesday 24 February 2016
Another scam: Aquilaria Tree Scheme
The Aquilaria Tree Scheme
I read Straits Times today and saw this news:
The "deal" in summary:
Pay $230 per sapling or $550 per semi-mature tree
Tenure: 6-7 years when tree matures
Returns: 6-7 times when Agarwood is harvested from each tree
What does this mean: 100% returns averaged out in 1 yr.
In 2013, my friend proudly told me her investment in this Aquilaria Tree. She said that she bought a few trees and when these trees matures, it produces Agarwood which can be sold. She can sell at $400-$600 for each tola of Agarwood oil harvested.
I told her then that this was very likely a scam. How can there be such a good deal? $400 return after 6 yrs when the investment is only $500?
SURE ANOT? 100% return?
She told me that she was very sure. The investors even told her they could bring her to see the actual trees planted. Furthermore, it was a Singapore based company.
Hai.. so now this Singapore company has folded and gone MIA. Hard earned money of my friend all gone..
Previously, I have written a post about Pre-IPO Scams, link here.
How to identify potential investment scams:
1. It promises high returns with a very low risk.
What is high return?
Returns through various investments:
0.025% savings account
1.3% 1-year FD
3.25% OCBC 360 Account
7.8% S&P 500
15% Warren Buffet
Warren Buffet, one of the richest person on Earth, returns from the stock market is about 15%. Do you honestly think that you can get an investment that yields a higher return than Buffet consistently and at a low risk?
2. You are enticed through telemarketing
A good investment will be secretly kept in wraps and for traders/big investors to earn. Heck, if I can earn via arbitrage or if I know a very good investment, I will keep it a secret and profit hugely myself.
If a good investment has to be promoted through telemarketing, it is just desperate.
Lastly, some lessons to learn:
1. 'Alternative Investments' such as venture capital, private equity, hedge funds, real estate investment trusts, commodities as,precious metals, rare coins, wine, and art are normally directly sold to people with high net worth. You may a private banker from a known bank helping you to invest in such things.
Such a creative idea... Aquilaria Tree and agarwood lol.
2. Read more and understand better before investing. You should be sure of what you are buying, please read more and please read from expert reports. If you do not know anything, at least GOOGLE.
3. If you cannot resist the temptation to make money quickly and easily, you are bound to lose money. I have written a post here . There is no easy and quick money in the world la alamak. Warren buffet reads 8 hours a day and is innately talented, and his returns are 15%.
Ok, that's all from me in this matter. :)
Sunday 14 February 2016
It is here.. Robots replacing humans for jobs.
Last weekend, I went to MacDonald's to buy an ice cream. Wow.. when I stepped in, instead of the usual cashiers and tables in the usual lay out, I saw this:
SELF SERVICE KIOSK.
Now, instead of queuing, all I had to do is to press a touchscreen, make some selections, pay on the spot, and Tada! I get a queue no. and I wait for my ice cream, all done in less than 10 minutes.
JOBS REPLACED BY SOFTWARE BOTS-BILL GATES
In 2014, Business Insider wrote an article where Bill Gates states that "People don't realize how many jobs will soon be replaced by Software Bots"
This what he said:
I digress a little. I am hugely interested in what experts say about future developments, especially when people like Bill Gates had been very spot on on their predictions decades ago.
Bill gates, in 1999, predicted about Social Media/Home monitoring/Internet payments/ mobile devices/ price comparison sites ..etc.
It was scarily accurate.
Now, I have to sit up and seriously look into what he says lah!
Instead of jobs being replaced by foreign talents, I think the real danger is software bots -_-
WHAT DOES THIS IMPLY?
In 20 years time, these jobs will become irrelevant:
In 20 years time, I will be in my 40s-50s and my job falls nowhere near the 'safe zone' :(
In 20 years time, our children will be the ones facing the brunt and unless they have high skill sets, it's going to be difficult for them.
Lastly, CANNOT BEAT SOFTWARE BOTS? JOIN THEM.
Become a software developer.
Unfortunately, it is really 'easier said than done'. A coder needs to possess really innate logical thinking and clearly, not anyone can do it.
SELF SERVICE KIOSK.
Now, instead of queuing, all I had to do is to press a touchscreen, make some selections, pay on the spot, and Tada! I get a queue no. and I wait for my ice cream, all done in less than 10 minutes.
JOBS REPLACED BY SOFTWARE BOTS-BILL GATES
In 2014, Business Insider wrote an article where Bill Gates states that "People don't realize how many jobs will soon be replaced by Software Bots"
This what he said:
“Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing. … Technology over time will reduce demand for jobs, particularly at the lower end of skill set. … 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”
Bill gates, in 1999, predicted about Social Media/Home monitoring/Internet payments/ mobile devices/ price comparison sites ..etc.
It was scarily accurate.
Now, I have to sit up and seriously look into what he says lah!
Instead of jobs being replaced by foreign talents, I think the real danger is software bots -_-
WHAT DOES THIS IMPLY?
In 20 years time, these jobs will become irrelevant:
In 20 years time, our children will be the ones facing the brunt and unless they have high skill sets, it's going to be difficult for them.
Lastly, CANNOT BEAT SOFTWARE BOTS? JOIN THEM.
Become a software developer.
Unfortunately, it is really 'easier said than done'. A coder needs to possess really innate logical thinking and clearly, not anyone can do it.
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.
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!
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