Tuesday, March 30, 2010

Biosensors International: Should I Hang On?

Just a short post. i am holding on to 3 lots of Bionsensors International since last year. at one point, i was hanging on to about 50% paper gains. however, it has been on a serious down trend since the PRC government announced that it would try to make healthcare more affordable to its people.

For those who do not know Biosensors that well, it has often stated that it intends to penetrate the Chinese market rather than the developed markets of Europe or America, where in truth, it would be out-muscled by the bigger pharma boys.

I believe that there is long run potential for what Biosensors is doing. otherwise i would not have bought into it in the first place. however, i am faced with the fact that an industry earthquake occurred, significantly changing the competitive environment it is in.

Its FY10 results will be in end-May and most likely profitability would be sustained. my consideration right now is whether all the bad news have been priced in and whether will it permanently impair Biosensor's earnings growth. judging by the almost non stop fall from two weeks ago compared to a slight uptick in the broader market, a bottom should be reached any time soon

If the latter be the case, then i would be better off taking profit right now. however, the main hurdle i face is where do i park the proceeds should i really sell. i hate holding on to cash because the market seems to be fairly valued right now. do i have to start hunting for a stock again or buy into an existing one?

Monday, March 29, 2010

Doubled My Money! But I'm Not Happy :(

I checked my portfolio today and I realized that I doubled the money (unrealized gains though) I put as capital from a year ago, including those that I freshly injected this year. My total capital base stood at $14,005 while my portfolio stands at Monday closing at $28,275 with $73 not used from dividends.

However, I did not really feel happy. Yes, the obvious point being that most of the gains are unrealized. But rather, I am beginning to feel recently that salary-wise, I might have been short-changing myself.

For those who don't know, I did a four year general degree at the National University of Singapore, but I did not enter the government industry or statutory board (yet) because I wanted to see what life in the private sector would be. Apparently, the harsh reality is that unless you are working for a offshore marine O&G firm or a MNC (most likely a foreign bank), you tend to get crummy pay at a SME.

I will post more about my job hunting experience when I am done with my examinations in 68 days. Right now, I can only say that I got hit in the gut when I realized that my friends in the above-mentioned places got anywhere between 3-4 months of bonus despite 2009 being the "worst year since the Great Depression".
Yes, I got a and kept my job. But then I did not get an AWS because it is not written into contract. And my boss reminded us that we are in the "worst year since the Great Depression".

Lots of Learning Opportunity

Saturday, March 27, 2010

GMG Global: Is Something Brewing?

The share price of GMG Global touched $0.16 yesterday a level it has not seen for sometime. With the fundamentals of the company relatively unchanged, the huge number of shares changing hands suggests two possibilities.

First, it could be that GMG Global is a beneficiary of the shift in interest to penny stocks given the relative lull in the broader market, with retail investors more interested in property (still) and Jack Neo/Ris Low/Random Incidents@RWS news articles.

Second, it could be that as some of the sensible forum posters have suggested, that people behind the scenes are accumulating shares so that they can be used for a future M&A deal. In this case, shares bought back (but they have to be declared don't they!?) will be used as part of the deal to the target, offsetting some degree of cash consideration.

But first, it is not impossible that GMG Global's recent rally was driven by fundamental reasons, most obvious being the climb in natural rubber prices. The price of natural rubber is affected namely by the automotive industry as more cars mean the need for more tires. And recent evidence suggests that with the return of consumer spending in China, GMG Global will be well poised to capture that geographical market as SinoChem International, a PRC SOE, has a strong network in the country.

What Is Likely

Friday, March 26, 2010

Reflections On Stock Picking: Circumstances more than Choice

Nothing much happening this week. The stock market has been rather muted. According to one journalist, most people here were interested more in the property market. In fact some of the celebrities who were here for a charity show, bought a few units worth millions.

The portfolio performed alright, with Biosensors in a continued down trend due to fears that the China market might not be lucrative. Action Asia touched the $0.20 marked while GMG Global saw huge amounts of shares changed hand and climbed back to $0.155 in trading today. Stratech on the other has been struggling to keep me interested. Let's hope that the story will get better when its financial results are announced.

The Problem With Some Investors

Thursday, March 25, 2010

Singapore Petroleum Company: My Best Buy To-Date

For those who follow my blog, you can ignore this entry.

For those who are new, the first stock I bought in my life was Singapore Petroleum Company (SPC). That was almost a year ago in February 2009, when I just started my new job. I had to borrow money from my mother and my brother to fund the purchase. Not only that, I had to use my mother's account because the people at my online brokerage did not want to revise my limits!

Well, if you click on the link on the sides, you will know that I made alot from this first purchase because it was subsequently bought over by PetroChina and then de-listed.

One Reason To Sell
I will talk about my other disposals in future posts. But here, I want to tell you that this is one of the main reasons for a buy-and-hold guy to sell a stock - that is when the takeover offer is there and you can get a very good price selling in the open market because the market has factored a discount.

To be sure, it will be worthless if you do not accept the General Offer and then the stock gets de-listed. Hence if you want to save on the brokerage, at least fill up the letter and return in promptly

Made Money. But it is a pity.

Despite the premium recieved, it was a pity to have to sell away this wonderful company because SPC is really the only O&G company on SGX. Almost every other stock on the SGX is serves the downstream, or is engaged in the highly risky upstream. Hence, without the takeover, SPC would be a very rewarding stock for investors because of its dividends and the reality that we live in a fossil fueled world.

Going Forward
With the delisting of SPC, I think that there are very few long term stocks worth holding, even if they are part of the Straits Times Index. The sector that I am very partial to as a long run sector is the consumer staples. I have not done any research, but I think companies like QAF and Auric Pacific make for stable plays in any portfolio.

Yes, talking about my portfolio. I realised that it is indeed very hard to do anything meaningful in terms of research for a portfolio as big as mine. I think I can let them run nonetheless while just monitoring for SGX filings and other industry trends (which is tough as my portfolio spans industry). Almost remember to walk the dog and not let the dog walk you. Will update tomorrow for portfolio values. Biosensors is taking quite a hit by the news.

Wednesday, March 24, 2010

I Must Hit The $28,010 Mark

The amount of cash that I have coughed out from my pocket, excluding those capital gains and dividends, amounts to $14,005. I am fully invested the last time I checked my bank account, which was earlier in the morning. But I am aiming to hit a portfolio value of slightly more than $28,010 inclusive of dividends, free cash and all capital gains reinvested

Some company updates are in alphabetical order:

Etika International Holdings: Great Company, Great Stock?

The below is excerpted from paid research done by NRA Capital dated earlier in February. Back then, NRA's Angelia Phua had a target price of $0.615. I believe it is due for a re-rating following a recent run up, possibly due to completion of several acquisitions in Vietnam and Indonesia.

There is some upside for the year with $0.80 being my target price for the rest of the year. This is premise on the growth of all its business units due to M&A, as well as, the return of consumption growth with the recovery. Potential pot holes along the way are rising costs of materials. Sugar and tin have been on an uptrend as well, with the former being hit by bad weather. This is a great company but overall not a great stock due to its poor trading volumes.

Capacity expansion to capitalize on growth opportunities

Tuesday, March 23, 2010

Luxury Watches: Audemar Piguet, Patek Philippe and Jaeger Le Coultre

I would love to have such watches but I know that I cannot afford them any point of my life within the next 5 years. Luxury watches, according to my friends, have a store of value because they are unique (if they are the very expensive ones) due to certain proprietary mechanisms and are great investments. What do you think?

The Most Important Financial Advice: Don't Stop Believin'

Begin with the end in mind. If you tire along the way, pamper yourself. Always understand why you are investing, saving or financial planning. I also cannot tell you how important it is to find the job you love and have passion in. If you have to drag yourself to work, it is time to talk to your friends or maybe go for a break. Don't get burnt out but don't give up too easily. And more importantly, Don't Stop Believin' in your dreams.

Monday, March 22, 2010

Standard & Poor's 500 Guide: The Best Resource For Investing In America

I was looking through my portfolio. As you know, the dollar size is not fantastic but hey, I have had a good streak.

So I was thinking through the advice that I have been reading, namely investing overseas. Singapore is really a small market and there are alot of restrictions in terms of growing you wealth. If it were not for the crash, I doubt I would have found any companies that was worth my investment dollar.

Investing overseas is complicated especially with foreign currency risks as well as taxes what not. If you are unsure, you should Google on tax treatments and see how you can best avoid it.

You can of course try to buy ETFs tracking the US stock market, such as those tracking the Dow or the S&P 500. However, if you are adventurous, you could try buying a copy of the latest edition of Standard & Poor's 500 Guide.

Written by an independent agency and in a hard copy format, you are able to make markings and notes for reference, assuming you are a e-book-phobe like myself. It also has comprehensive financial data and financial ratios for your reference. Wonderful for those aspiring stock picker.

The price might be slightly unsettling for some though but it is a worthy investment nonetheless. If you apply the same rules, but with slight modification to the American context, along with their averages (PE, PB, etc) you should do fine.

Sunday, March 21, 2010

Straits Times Index Forecast Review

In my earlier post, I stated that I was of the opinion that 2010 was going to be an up a little year. On a year-to-date basis, the STI has been slightly higher than where it was at the end of 2009. With about 9 months left, I should be on track with my forecast, which has a 25% of getting wrong.

The Dick Davis Dividend

Read the "Dick Davis Dividend" - the book on the left. Despite its thickness, it was very readable as you only have to pick a few chapters. The better chapters are the one towards the back where he shares his wisdom in investing by ignoring the noise you hear from interested persons.

I thought of writing book that has reviews of the books I read, and drats, after reading the DDD, I realised he stole a march on me.

Almost every major book on passive investing versus active investing has been covered in this book. I would say that if you have an advanced knowledge of investing, this is as book you should borrow to widen your knowledge. Took me about two days to read the main points. The rest were mainly advice written in first person narrative, on how to manage your money.

As you can see, I have tinkered with the layout. Hopefully, I can beautify it even more with real photos taken while I am unemployed or something along those lines. Hopefully I don't get unemployed first. haha

Saturday, March 20, 2010

don't be greedy!

Iust a quick post before going for some seminar. was reading tan kin lian's blog talking about land banking as well as the comments by others. I really agree. when so much money is at hand, you must relax and don't get pressured by the sales person. There are really many ways to con people of their money, and the easiest way, which is not even a con tactic, is to pander to their greed.

Because you are greedy, that is why you fall for get quick rich schemes. Consistent high returns from land banking or any regular saving plans really mean high returns for the person selling you the stuff. Always have a healthy dose of skepticism and DIY for your investment. If you really have to time, then outsource your money management to someone at the lowest price (expenses etc) because higher returns can never be guranteed.

Friday, March 19, 2010

An Investing Mistake

The portfolio edged closer to the 10% mark despite the addition of 6,000 shares of Elite KSB, thanks mainly to the rise in Etika International Holdings. With $73 of free cash left for CY10, I would like to focus on an investing mistake.

Wednesday, March 17, 2010

what does a stock for the long run mean?

the little book that builds wealth was one book that i re-read recently. the book will probably be the skeleton for any future book on singapore stocks, which i truly want to write.
their market beating idea is that you should buy stocks that have strong lasting competitive advantages or what he at morningstar.com calls economic moats ( a term attributed to warren buffet)

for those clueless in investing, just think of a local bank versus bubble tea/roti boy craze. this might be an oversimplified example but it is very instructive. one, banks have high switching costs. it is not easy to open and close accounts at the whims of your fancy. two, while banks might grow as fast as the money supply or local population, it always does what it does best, that is, taking you money and growing it by either loaning or investing. so when you look at that bubble tea or roti boy joint. even in its initial phases, some level of logic will tell you that it has close to no competitive advantage.

stock assessment matrix

will review my portfolio base on whether they can be held for a long term... using a mish-mash of criteria.. stay tuned...

Tuesday, March 16, 2010

left with $73

Bought some Elite KSB... Almost fully vested with $73 remaining... Will have to keep it tight...
Meanwhile Etika International has been on ascendancy and Biosensors Inernational in reverse gear... Stay tuned

Sunday, March 14, 2010

research series

hey guys. email me at sgxstockpicker@gmail.com if you want to see my trial research report. i would love to hear comments on how i can make it better. for personal consumption thats all.

Friday, March 12, 2010

Strong Gains From GMG, Biosensors Rattled

The portfolio had a wild ride. GMG Global surged after strong buying interest, probably by institutional investors who were at their corporate presentation. Biosensors on the other hand plunged sharply after the Chinese government announced curbs to keep a lid on luxury medications. Biosensors slipped about 8 cents but I think that is the least of my concerns as it will normalise eventually.

Wednesday, March 10, 2010

100% Equity Portfolio Allocation

For some reason, I bought the latest issue of a financial magazine. i felt like i wasted $5.50 that i will not get back. Under the pseudonym Commonsense Investor, the writer goes on to argue the folly of having all your money in equities. He said, without citing sources, that "several studies have shown that a 100% equities allocation perform no better than a 80/20 (20 being in fixed income). That is if i read him correctly.

I do not know which are the studies he read and I have to admit upfront that I am an equities fan at the moment. Unless I have enough liquidity to purchase corporate bonds, Singapore Government Securities, only seem to do slightly better than if I left it in the CPF OA or SA.

My point is simple. Try not to touch the money in your CPF. When you grow your retirement nest egg, use only money that you can afford to lose into common stock. I have not the minimum sum that I can start investing using CPF funds, but I would assure you that I will not use them other than for public housing or education purposes. There is a reason why CPF is called social security.

Of course some will counter that this is not maximising the returns on your assets. But the question remains, to what ends should should my asset grow to. You can easily calculate how much money you need to life comfortably after your retire with a personal finance calculator on line. If you do not provide a proper estimate to how long you live after retirement, your CPF funds might run out and then you might have to do a reverse mortgage.

What about money set aside for emergency expenses? I am not properly trained to tell you, but i believe keeping that money set aside for expenses, housing loans and medical emergencies in the event of of retrenchment or unemployment in a term deposit, money market fund , gives you a slight edge against the silent killer known as inflation. Please don't use it to buy gold!

Why am I not for bonds? Reiterated, they are not attractive when you consider that there is sufficient spare cash on the sidelines that you have been forced to save and that you should not touch.

The Ultimate Dividend Playbook: Income, Insight and Independence for Today's Investor

The Complete Idiot's Guide to Success as a Personal Financial PlannerFinancial Planning Demystified

Get a Financial Life: Personal Finance In Your Twenties and Thirties

Friday, March 5, 2010

No Comment

No comments for this week. Will have a busy next few weeks trying to study and catch up with work. So far, the picks are doing fine with the exception of Stratech and China Animal Healthcare. Will keep posting screen shot till some thing more thought provoking appears.