2013 Action Items

Here are the items I intend to tick off for 2013

Portfolio Review 2012: Portfolio 30.2% vs STI 20.6%

The Straits Times Index opened at 2,646.35 on the first trading day while my portfolio started at SGD 42,053 at the start of the year. In the beginning, I had bought some Etika International and sold my holdings of Asiatic Group. More recently, I bought some Petra Foods and sold off China Animal Healthcare, Stratech Systems and TPV Technology. But for convenience, let me use those values I have given.

Cut loss on Stratech, TPV and ChinaAnimal Healthcare

I finally sold off three of the four stocks I said I would be selling. Stratech has been in the red for a long time. This was made worse by me subscribing to the excess rights which are not accounted for her. My initial investment of SGD 1,000 halved with no dividends in between.

clearing stock on Thursday

I intend to clear the following stocks: Stratech TPV Tech China Animal The stocks above are deep in the red. I might sell off Action Asia as well for i did not anticipate that tablets.can do such a good job entertaining people on road trips.

away on holiday

am in sri lanka at the moment for a holiday. will be back soon to do a portfolio updaye.

Not enough money for HDB downpayment

It is a bit late as this story has gone some rounds. The blogger (who is studying), to avoid any cash outlay on the first 5% of his HDB BTO delayed documentation such that his girlfriend (who make about 2,500 per month) can accumulate enough CPF in her account to pay for the down payment as the process is being delayed. He is of course trying to ensure he does not cough out cash because he wants to use it for the investment game, hence he rather taps his girlfriends CPF. He has been criticised by other blogger for gaming the system. Issues of ethics aside, I would say that if he can make the decision to commit to a flat, that is great because of the long lead time to completion. The flip-side is that he has to be sure that his partner is the one during the period which the flat is completed. If things do not work out between the two, and that cheap housing was the reason for signing up together, it will be very messy personally and financially.

bought more Petra Foods

(Updated)

Bought two lots of Petra Foods at 2.81 per lot. Payed for them using dividends from Elite KSB and I am left about SGD 370 worth of free cash. Petra foods is so illiquid that it ended the day lower than i had bought. When I checked the SGX website, Petra Foods announced for a trading halt citing a material announcement. This is quite worrying for me even though I feel its fundamentals are good.

Elite KSB despite disposing its main asset is slowly on the rise. If you add back the special dividends  it is worth at least 61 cents. I have got no more free cash but i am tempted to sell all my shares that are not worth at least SGD 1500 per company. They look increasingly small as I shore up my individual positions. I am hoping to get to an efficient level of maybe 3000 dollars to keep transaction fees low.

Examining Singapore's scholarship system

There has been an exchange of letters regarding Singapore's meritocracy in view of the scholarship system. The original letter by Harvey Neo essentially argues that scholarships pervert meritocracy because scholarship holders because they are fast-tracked in their careers compared to non-scholarship holders, with little or no relevance to their actual work. The rebuttal came from Bryan Chow and I reproduce here the more relevant paragraphs:

Sam Goi takes 14% stake in Etika

In a very interesting development, Sam Goi, the very prominent Singapore businessman has taken a 14% stake in Etika International. This caused an increase in its share price yesterday. Etika's share price has been sliding for some time and this is welcomed. Long term wise, I suspect that Sam Goi might use this stake as a way on injecting some of his assets (TYJ is not listed) but it just speculation on my part.

Pokemon - getting started

I am not sure why but at work today, I decided that I wanted to collect pokemon cards. Before I had my dinner, I popped by Bishan and found a store selling them. After I had my dinner, I made a trip back to Bishan and plunked some money on card protector, card box as well as 12 booster packs. I guess my journey to the world of pokemon starts now. 10,000 hours to being an expert.

Visiting Legoland soon

A group of friends have decided to take a day trip across the Causeway to visit Legoland about a month from now. I did a quick search online and despite its proximity, there are so many deals that will get us there.  Will post something after the trip is done.

Property discussions continued

In earlier post, I wrote about my colleagues who had bought or sold property. Colleague A is now developing a rude awakening because she cannot find a property (specifically condominium) with the size she has in mind, with her current budget. Her original intention was to sell her current property, rent and wait for the crash. But with rents of at least SGD 6,000 being asked, any profit gained after deducting for interest and CPF will be quickly diminished. I do think that there is nothing wrong with renting a HDB. I am sure it is much cheaper over a longer period than a condominium, but that is just me. Time is now ticking for her as she has to move out by early next year.

Etika FY12 earning down 23.8 per cent

You can read more about their results here and here. This stock forms the biggest part of my portfolio. Ever since the stock announced a bonus issue, its share price has been on the downward trend for a very long time. It has stopped announced new acquisitions but margins are still hurt by volatile raw material prices to the extent it has ventured into the retail F&B business. I know we should not have hope when investing, but I do hope that the stock recovers in its share price.

Olam: Like a bridge over Muddy Waters

Olam International's stock plunged on Tuesday after a negative report by Muddy Waters Research, a company known for not so positive reports as well as shorting them. Now, Olam International has threatened to "take appropriate legal action against" Muddy Waters. I do not own shares in Olam but this is the second time that a research company has issued something negative on it, specifically its accounting practices. And apparently, the analyst that wrote it is no longer with CLSA, although it is not clear whether he/she left as a result of that report.

where have all the bloggers gone?

I found some time recently and was trying to catch up on the Singapore stock market by reading blogs. I was quite disappointed however because there has been a lack of good posts. Not unlike Rockson Tan, some of the good bloggers to read on and off have gone into cold storage mode. Music Whiz has sworn off blogging at the start of the year, Donmihaihai posts as infrequent as ever, while Wealth Buch is slowing down because he is concentrating on his tuition business. Ghchua still posts his portfolio on a monthly basis but due to the sheer size of his investments, he offers not much in depth analysis. Most of what I can find is mainly day to day posting of videos and link, without much company analysis (SGX-listed companies!).

What constitutes a good blog? There are four things that I look out for, namely, relevance, regularity, research and revealing. As I have named myself, I am most interested in companies listed on the Singapore Exchange because that is the extent I can invest my small amount of money. Having said that, I recently acquired NYSE-listed shares as part of my company's performance bonus. Secondly, regularity in posting is always good in general and by that, twice a month would be a good frequency. This is related to the fact that I am more interested in the medium and long term  (anything from two years out) horizon and daily postings will not bring much value. This leads to the third point, the research content of the post. Simple charts and some opinion would be good enough. This would involve revenue and earnings from the past five years and just a paragraph in the investment thesis. Finally, a good blog or post should reveal a lot about the blogger's personally life. When we can relate to someone even if he is anonymous, we stay a bit longer on the person's blog. Which is why I tend to follow WB's post as he is about the same age as I am and of almost the same educational background. But if you do boast of a 500 k portfolio I think there will still be a stream of followers, both good and bad, like for this guy. 

Most of the good blogs I know out there done by Singaporeans are mainly on food and politics. I do no read food blogs but blogs on politics tend to be better because they are highly relevant and have a constant stream of material to focus on. But why are there so many crummy blogs on stocks. I think the proliferation of not so good blogs on investments is due to one main issue, the lack of an incentive. There are very few identified financial bloggers and most have remained anonymous. Those that are out there tend to already have a business giving financial advice. Those that are not out there, such as myself, can attest to the fact that the "passive income" from Adsense and Nuffnang. Therefore, there is not much incentive for anonymous bloggers to write extensively on a company (other than for the love of it).  And as a result, one of the tactics to drive traffic and clicks on a blog is to re-post links. I am guilty of this sin about 50% of the time and my defence is that there are blogs that exists wholly to re-post content without adding any of their insight. 

Why am I saying all these? I guess the main reason is that I am looking for investment ideas and need someone to seed my investment thesis. There use to more bloggers with good analysis but sadly, the longer you are into it, you just cannot be as enthusiastic as you used to be.

Not enough time

I have not been spending enough time tracking my stocks. The months of September and October have been so busy for me that I do not even have enough time to spend on my hobby. I guess this is a good thing in some ways. Firstly, I have developing my skills by reading as well as enrolling for a masters programme. Although it is early days, I do feel that the masters has not been as stimulating as I had hoped for. Secondly, I have been spending time either with my loved ones, family or exercising. Lastly, it just occurred to me that I  went to Japan in July and spent a good 10 days there. I will have to do a write up on it then.

What is not so good is that I am not able to monitor the performance of the portfolio as accurately or reliably as I had hoped for. Well, you cannot always win them all. 

Bought Petra Foods

I bought two lots of Petra Foods at SGD 2.64. It was between this or Wilmar International. I am buying into this stock because it is a consumer staple and non-cyclical stock. This brings my invested cash to SGD 34,000, there about because I net off the dividends that came in.  I will figure someway to track the performance of my portfolio given this change. At the moment, the portfolio comprises mainly those companies that deal with food or commodities. the top five holdings as a percentage of current portfolio are: Elite KSB, Etika International, Petra, GMG Global and UOB-Kayhian. 

Property discussions

Recently, two colleagues I know made bought or sold properties, all of them private property. Colleague A just gave birth and so a bigger house was in order. However, she was not going to buy another property but rent from someone for the next 12-24 months. Colleague B bought a private apartment because she was in no way eligible for HDB housing. I on the other hand, am in the process of putting money down for a HDB flat that will only be delivered in 2016. It is affordable - around SGD 550 k for 90 + 3 square metre or SGD 569 per square feet. It is affordable because my colleagues are dealing with millions of dollars.

It is apparent that there will be a difference in opinion between the three of us and it is apparent from the conversations that I had. Let us analysis each of our positions.

Colleague A: Market has reached a peak. Sell now to realise the gains, and rent a place in the medium term and hope to pickup a cheaper unit when the market cools down when the supply comes online.

Analysis: I think that this is a good move, provided she rents a much cheaper place in the medium term. Otherwise, any capital appreciation might be wiped out from renting from a hot market. I did tell her that she should just rent a five-room HDB but she said that she is used to living in a condominium.

Colleague B: Just bought a unit and hence Colleague B's actions disconfirms her own belief that the market will keep going up. Her theory is that the government will not allow the market to crash

Analysis: She is suffering from buyer's remorse. She is partially right in believing that the government will not allow the property market to crash. This is backed up by the fact we are heading towards 6 million people in Singapore by some time frame.

Myself: 2016 is a long time. If I wait any longer, I will have to buy a resale flat or worse, an expensive private home. My theory is that the market will crash in 2015-2016 but I cannot wait till be proven right.

Analysis: I agree with Colleague B but I am okay even if the market crashes because I still have the option of staying in the HDB in 2016 onward and wait for the next cycle. Moreover, the effects of the loan will not come in till much later. More importantly, which part of the market crashes matters a lot. while I do not think that the government will engineer a crash in Public Housing, it may try to cool the Private Housing sector because it drives prices in the resale market. 

What do you think?

portfolio up 10.5% YTD

After a long while, I am finally back up, having bought a new system, although the monitor is still the same.

It was a very busy month of September for me. On the working front, I had to prepare two big reports as well a smaller update. The regular report faced some hiccups as the people I had to coordinate with were either on long planned leave or had other simultaneous deadlines. It did not help that I had to provide more support than expected for an ad hoc report. On the school front, I had to prepare for presentations and submit writeups. The group I was allocated with was massive and we thus face some coordination issues. 

It was so hectic that I did something silly, that is I applied for Stratech's excess rights, even though it was not my intention. For consistency's sake, I will just show only 21,000 shares of Stratech in my portfolio. My only gripe is that I was not sure what I was doing at the ATM then!

Having said that, the portfolio was up 10.5% on a year-to-date basis. I will probably have to run through the dividends to see if I might have missed any out for the records. that should bump up my investible cash for next year.

where is the market trending?

I was terrified when I took a closer look at my portfolio. Some of my winning positions have sank into the red or have seen their margins diminish. For instance, Etika, which now forms more than 20% of my portfolio is down 13%. Their share price has failed to gain any strength since going ex-bonus one year ago.

I would like to dip my hand in the market but there are things holding me back. Firstly, I am in the process of selecting a flat from the HDB, and I will need to increase my reserves significantly. Also, in the short term, I have to save up to pay for my Masters programmer of which I just started.

But the main reason holding me back from adding any more cash is that the market does not seem to be heading anywhere. Perhaps, as a child of the 2007-8 crisis and 2009 recovery, I am used to seeing very low valuations for good companies.

Let us agree that company fundamentals and broader market conditions matter, both feeding into each other and thus driving market expectations. Based on those points, we are not clear on what we should see. One the one hand, companies are seeing a recovery in their top and bottom line. On the hand, both the developed and emerging economies are heading for an economic slowdown. Any recovery seems fragile, hinging on how Europe gets out of its debt crisis.

Maybe as a result of having more responsibilities or as a side effect of ageing, I feel more gloomy. I think that it is a possibility that we will be in a multi-year recession (despite it being Obama's re-election year) just that we are not able to see it tile we are much deeper into it. I hope I am wrong.

so many things

The computer is still not working as I have yet to buy a replacement CPU. This will be another outflow of money, which is compounded by me free spending ways this week. Asia-Pacific Breweries takeover has become yesterday's news. I find that this episode reinforces the prescription for conservative investors to buy consumer brands. I have made this point before, citing Jeremy Siegel's book, that consumer staples (he also mentions healthcare) make good long term stock due to the barriers to entry of building and enduring and endearing brand. I extend my congratulations to those who have been hanging on to their APB shares. I think Heineken will be better partner than Thai Beverage but what do I know, I prefer drinking wine!

computer crashed

My computer has crashed and it has made blogging impossible other than on my brother's laptop. Please bear with this as things should recover once I get the funds to buy a new desktop computer.

Euro 2012 "Investment" Thread

Decided to take $250 out to "invest" in the European Football Championships. This post will track the "performance" of my "investments. Note that I do not condone gambling, and that everything has to be done in moderation. It is only when you lose your sense or proportion, do you spiral down the abyss.

Bets Made and Result or Returns
1. Germany as Champions. Bet $50.
2. Holland as Champions. Bet $50.
3. Holland vs Denmark 4 goals. Bet $5. Lost
4. Germany vs Portugal 4 goals. Bet $5. Lost
5. Italy vs Spain 3 goals. Bet $5. Lost
6. Croatia vs Ireland 3 goals. Bet $5. Lost
7. France vs England 2 goals. Bet $5. Win $18
8. Ukraine vs Sweden 3 goals. bet $5. Win $19.50


Cash balance: $167.50

Elite KSB to sell off core business to Lee Say Group

Elite KSB on 21 May 2012 entered into a conditional sale and purchase agreement with Kendo Trading, a subsidiary of the Lee say Group, for the disposal of the entire issued and paid-up shares in each of the capital of its wholly owned-subsidiaries, KSB Distribution , Jordon International Food Processing , Soonly Food Processing Industries and SAFA Gourmet Food. Full announcement here. 

My understanding of this announcement is that the poultry distribution business is being sold off to a bigger but private company (Lee Say) and that all that remains of Elite KSB Holdings are its unsold investments, proceeds from the sale and one property that they did not manage to successfully sell earlier this year. Shareholders such as myself will have to guess whether it any special dividends will be announced upon completion of the sale.

No simple way to pick winners

I recently finished reading "The Halo Effect" by Phil Rosenzweig, a book which focuses on the delusions that business managers tend to suffer. Those who have read "The Black Swan" will find similarities in the book, such as their attack on the use of faulty statistics.

For instance in Halo, the author pointed out that studying and identifying the characteristics of successful companies at a point in time, without looking at the not so successful companies, will only introduce a bias in the analysis.

While we might try to identify the commonalities amongst the winners, replicating their methods may not bring about the same results, due to the flaws in our identification process as well as execution. Luck also plays a part. Bringing the logic in Halo over to stock picking, there cannot be a sure win method for picking winning companies. Having said that, there are ways to increase your probability of success, such as by reducing your costs of investing and by having diversification.

Does this mean that stock picking is dead?

Quick update of things I have not done:

I have not sold Stratech or ChinaAnimal yet, since the market as a whole has been week. I am trying to find my DBS token (which generates a number) as I cannot recall whether I left it in the office or at home.

Time to sell China Animal Healthcare?

I have four lots of China Animal Healthcare bought in January 2010 and am now contemplating selling it even though it remains slightly out of the money. For those unfamiliar with the stock, China Animal Healthcare is company that manufactures vaccines for livestock and its operations are based predominantly in China. This was what I said back then when I bought the stock:

"Thought I managed to get a bargain buying in at 26.5 cents. Turns out the bottom is even lower, closer to 22.5 cents that is despite an earlier runup to 30 cents. I don't think this is a bad stock. will have to see how the proposed qualifications to its manufacturing facilities will pan out. hope this S-Chip wont burn me."

China Animal Healthcare has had plenty of exciting developments. It has had strong revenue and earnings growth since listing on the Singapore Stock Exchange via an RTO at the end of 2008. For FY2011, the company recorded a 30% increase in revenue and a 86% increase in PATMI.

China Animal Healthcare has also had private equity firms like BlackRock take a stake in the company through the issuance of convertible bonds. China Animal Healthcare is also listed on the Hong Kong Stock Exchange.

From the chart above, after the strong run up in 2009 that saw it almost touch 40 cents, China Animal Healthcare's share price has since struggled the past 3 and 12 months. Year-to-date it is lagging the STI and year-on-year, it is down 27%.

Why do I want to sell China Animal Healthcare? The most important reason is that despite the stock's strong fundamental growth, it has not been realised in terms of share price. It is currently trading at 8 times earnings and I think that the market has priced in all its growth as well as possibilities of accounting fraud (guilt by association). Furthermore, its insiders an unknown group of investors have decided to sell off big chunks of shares during 1-2 months ago.

I should be selling it once I see the "correct" price. This selling may or may not happen the next 10 trading days, but I definitely will not be picking China Animal Healthcare's shares in the mean time.

Results out: Noble, China Animal and Auric

Full year results for Noble Group, China Animal Healthcare and Auric Pacific were out on February 28. Noble posted 42% increase in revenue but profit fell 28% due to "transitory events" that occurred in the third quarter. Noble announced a US 1.65 cents dividend for the full year.

China Animal Healthcare revenue up 30% but profits surged 84% due to better margins for its products. China Animal announced a RMB 3 cents dividend.

Auric Pacific's revenue increased only 0.4% but earnings grew 36% due to low-base as well as investment related gains. Auric declared dividends of SGD 3 cents.

GMG Global makes big acquisition

GMG Global recently announced its full year results and a big acquisition. The acquisition of a Belgian company already in Africa, Siat,  is is expected to cost GMG Global SGD 230 million in cash. I will try to provide an extended analysis much later but for the moment, this acquisition represents an exciting development due to its scale. According to the announcement, Siat has total natural rubber concession of approximately 51,500 hectares. Since the takeover by SinoChem, GMG has embarked on mega deals, consolidating its position and adding capacity. But is this sustainable?

Sarin Technologies

Here are some charts and articles on Sarin Technologies. The company makes machines that cuts diamonds. It has doubled in terms of share price five years ago, and at its lowest in 2008/9 financial crisis, increased 10 times in terms of share price. Interestingly, this stock has been covered by donmihaihai.

The chart that I have generated above shows quarterly revenue and earnings, as well as the 4 period simple moving average of earnings and trailing twelve months earnings.  Had you bought it the time it announced its first quarterly loss for FY2008 which was announced in February 2009, held it till today, you would be sitting on a very good dividend yield and capital appreciation!

Earnings Brief: Capitaland, Sarin and Elite KSB

Capitaland announced that its earnings for FY2011 fell 10.8 per cent to SGD 3.01 billion. Profit after tax and minority interest fell 25.8 per cent to SGD 1.06 billion. The company has proposed a 6 cents ordinary dividend along with a 2 cents special dividend.

Maker of diamond cutting machines Sarin Technologies announced FY2011 revenue of USD 57.8 million, along with earnings of USD 17.4 million. US 1 cent ordinary dividend was declared.

Elite KSB HY2012 revenue edged 4.3 per cent higher to SGD 46.9 million, with PATMI of SGD 3.7 million. To most people's disappointment, there was no dividend declared although it has declared a sale of property.

Stuff I am thinking about : China Animal, Neratel and others

I had a quiet weekend spending money, buying stuff for my weekend football games. Unsurprisingly, I went to Queensway Shopping Centre to get my new pair of boots as well as some footballs.

But before I went there, I read a few posts online regarding China Animal Healthcare and its interesting sell queues. I spent a little time vexing over this issue because while the writer had put a positive spin on it, most of us cynics would try to understand the underlying reason as to why a substantial shareholder wishes to pare down its stake in the company. It is worrying because against the backdrop of a broader penny stock rally China Animal Healthcare's share price has been stuck at 24-26 cents. Furthermore, this selling is ahead of the company's announcement of its results. The truth will out.

The other thing that I was thinking about is ST Engineering's acquisition of Nera Telecommunications. The stock has not moved much in terms of share price, but it has rewarded those who hold it for its dividends with a decent yield. For some, it will be a pity. However, it is almost inevitable when a company that is consistently generating cash but not able to grow in size, to be swallowed up by a bigger entity. The alternative would be for the company to be taken private. In this case, I guess the offer by ST Engineering is too good to resist and maybe most of its senior management wants to take a break.

We are already into the second month of trading and things have started looking shaky as one head of equity research put it. I will hold my breath.

Etika shows recovery for FY 1Q2012/13

Revenue increased 19.6% to RM 246.7 million for the three months ended December 31, 2011. Profit after tax, minority interest grew 35.8% to RM 5.4 million. Margins have improved slightly due to stabilising of raw material costs. These numbers are not impressive but point towards a recovery as the company gains momentum in its effort to reap the synergies from its earlier acquisition. More here.

My Holdings As Of February

The chart above shows my holding based on their current market value. It shows clearly how concentrated I am to just a few stocks, although there are 12 names on that list. The top three holdings - Etika, GMG and Elite KSB - make up slightly more than half my portfolio value. Overall, I have a good mix of cyclical and defensive stocks.

Stocks that I would dispose of would be the three smallest holdings - China Animal Healthcare, TPV and Stratech - because it is not effective holding on to them. That is unless I average up and the prime candidate would be TPV. I am getting jittery over China Animal because its share price does not seem to move in line with the broader penny rally.

The column chart above shows the profit per share in absolute terms as well as in percentage terms. Biosensors is the only "multi-bagger" with slightly more than 200% gains and there are four stocks that are in the red. I will probably overlay and updated chart with this to form my next commentary. This second chart shows just how average I am, but I have managed to avoid big losses.

Calling for stock ideas (SGX-listed)

Hey Guys,

I am looking to invest in SGD 5,000 for at least two years. If you have good ideas, post them in the comments section. Many thanks!

Don't trust people with your money too easily

This is a great read from http://www.cxoadvisory.com/investing-demons/ which tells us not to trust the various experts in the market. The article struck a cord with me because I was reading some forecasts which incidentally were grounded on Technical Analysis. Some of the Technical Analysis are too fuzzy, often requiring the retesting or confirmation of multiple levels in between. Upon careful reading, they often seem to say "if the stock does not go up, it might go down or stay the same".

Portolio and other updates

This is an interesting read from Uncle8888. He shares with us his very long experience and journey holding on to a stock that eventually rose multiple folds in price. My only issue with his post is that the returns will only be fantastic if the whole portfolio comprised multi-baggers. Anyway, I have provided an update of my portfolio on my other blog. Feel free to read.

Some random things that have caught my attention this week, were the scandal that has rocked the Ministry of Home Affairs and the one that have affected the Worker's Party. I bumped into my friend and while talking about it, I told him that last time, Goh Chok Tong did tell people to leave Steve Chia alone, when news broke out about his inappropriate relationship with his maid.

But my friend pointed out that one reason why no one in the PAP has told the media and public to steer from discussing the private lives of politicians, was that its own house was in disorder. That did not occur to me. My own take is that this even will cost both side votes. More interestingly, I would not be surprised that more skeletons will appear from the MHA closet, as investigations probe further.

Why should you publish a book?

I read this link from that was fed to me through my LinkedIn account and it has reignited my desire of publishing a book. To summarize his article, he says that bloggers should self-publish due to the ease and channels available to them in this current age. Furthermore, bloggers already have content, they just need to repackage and enhance that content to monetize it. Although his article is America-centric, I do observe one or two bloggers having done so, one investment blogger who I really cannot remember his name but received plenty of online flak after he published. Another is a political blogger, who published his poems. Interestingly, self-publishing is something a lot of "entrepreneurs" who have made it  big through real estate investments or internet marketing have done. When I go to my local Popular bookstore, I see stacks of them with their faces plastered but I am sure it is used to drum up their "credibility".

Considering that I only have three years of investing experience, I do not think I have enough experience to publish into a book. Once you publish, you lose your online anonymity that drove you to blog under a pseudonym. Furthermore, there will be a lot of time and money (lesser than before) involved to put what you have said into ink. That is despite having published them in your blog. Ultimately, the reward for self-publishing is just the act itself. You may not get the money or recognition but you can consider it a mission accomplished.

Buying a pair of jeans

I am going to buy a pair of Levi's jeans soon for casual occasions. This would make it my fourth pair in my short life. My first two pairs of Levi's were heavily "discounted" because I used vouchers to offset the total bill. The vouchers were given to me by an army mate who went off with the cheap jeans I had loaned him!

I had to throw away the first two because I slowly put on weight (sigh) and as a results, not only could I not fit into them comfortably, they developed "holes" where the sun does not normally shine. Apparently, this is a common problem faced by people with big thighs.

As most people know, a pair of Levi's jeans is not cheap, costing on average SGD 120, depending on design and season. I have worn other brands of jeans before, and the differentiating factor is their design. Some generic brands either ride too high or ride too low, with no texture in the fabric. This makes is slightly difficult to match the top you are wearing, a comment which I have received. For these reasons, I am making a trip to the Levi's store nearby instead of some other brand.

What have I learnt over the past three years?

My official journey into the investing world started about three years ago. As I have always repeated, I bought my first stock in the now de-listed Singapore Petroleum Company with most of the monies borrowed from my mother and brother. The company eventually got bought over and I made a small fortune. In those three years, I have grown that one-stock portfolio into something slightly bigger, whose market value is worth SGD 44,000 built upon SGD 30,000 of cash injections. Apart from capital appreciation, I have also learnt many valuable lessons, of which I will share.

1. Have a decent paying job. One of my regrets during my university life was not being proactive participating in events as well as not earning some money to tide through things. Thus when I came out, I was in an unenviable financial position of having to eventually pay off my student loan (I still am paying) and not enjoying the lifestyle of an adult. As a consolation, this is a position shared by most of my peers. 

It is important to have a decent paying job because it has an impact on future income as well as your emotional health. What constitutes a decent varies from education level, my definition of a decent paying job is the amount of money that a non-high flier makes. For me, I joined an SME, but my benchmark was the entry-level civil sector. This is because about 60-70% of my university course mates went to work for the government.

A decent pay is also important because so many other bloggers such as MusicWhiz and WealthBuch have shown that the more you can earn, the more you can save and invest. At SGD 45,000 after working three years, I know its not a significant amount compared to those already in the market but I feel that I am slightly ahead of the curve. To that end, I am trying to explore what options I have to increase my monthly earnings.

2. Do your research before buying. There are many investment styles when buying a stock - fundamental and technical analysis being the dominant strands. What is common between the two styles is that they involve a significant amount of research before the order is made. In the first style, an investor goes through all the financial reports and relevant marker studies. In the second style, there is plenty of interpretation of data.

Just because you did your research, does not guarantee that you will make a profit. Random walk theorists will argue that it is not statistically conclusive that more research leads to market beating returns. However, it will be clear to you what your motivations are for buying the stock. And by devoting sometime to the research process, it clears your mind and lets you "see" better. This is a better course of action that buying due to herd instinct or emotions. Once the stock does not move according to plan, you will also be in a better position to cut loss, which is the next point.

3. Be prepared to cut loss. As I write this, I have stocks whose initial sizes were around SGD 1,000 and are now in the red. As mentioned in an earlier post, I have sold off my stake in Asiatic. We must always be prepared to cut loss when the stock does not move according to the story you had envisioned, even more so when the stock does not move with the broader market. I have seen for myself how friends and relatives around me had the opportunity to cut loss at down 20% (a good threshold) but refuse to do so. Worse still, they average down on the stock only to see shares slump even further. Recently, I read that a blogger got stuck in Berlian Laju as the counter has been suspended pending debt restructuring.

Cutting loss is one of the toughest things to do because we realise the loss. But it is a necessary thing to do to minimize the damage done to your wealth. My own rules are not more than 20% down and not out of sync with the market.

To conclude, what I have shared is not groundbreaking but lessons that are very close to my heart. If you feel there are things that I have missed out, do let me know.

Losing weight through walking

I have recently started walking for about one hour in the evening. I do this when I do not feel like going for my run at work or if it rained at the evening slot. This was also motivated by my pregnant colleague's. nurse's advice. She told her that she should try to walk for an hour after each meal. My colleagues felt that it was a difficult task considering they have to lug their swollen tummies around. Moreover, where do you find so much time anyway to walk at least three hours? Anyway, for those who are health conscious, you can visit this website, Calorie Counter ,where you can have a reference how what you have to do to burn off the calories from a Snickers bar for example. Some of my friends and colleagues have also used it as their daily calorie counter, for diet purposes.

Bought 20 lots of Etika, sold off Asiatic

I bought 20 lots of Etika after selling my stake in Asiatic. I had thought of selling all losing positions but I felt that that would be too drastic. That would also require me to sell off my stake in China Animal Healthcare. Nonetheless, I am monitoring the market to sell into strength. I has been quite some time and some of these stocks do not seem to recover.

2011 Top Picks Review

Name	Action	31-Dec-10	31-Dec-11	% Change
Loyz Energy	Long	0.36	0.46	-20.88%
Kreuz Holding	Long	0.32	0.44	-27.27%
GMG Global	Long	0.11	0.30	-62.71%
Auric Pacific	Long	0.54	0.66	-17.56%
Biosensors	Long	1.43	1.13	26.55%
Keppel Corp	Long	9.30	11.32	-17.84%
UOB	Long	15.27	18.20	-16.10%
Wilmar	Long	5.00	5.63	-11.19%
Genting	Short	1.51	2.19	68.95%
Transcu	Short	SUSP	0.08	N/A

About a year back, I recommended some stocks that I thought would make readers money. On average, an equally weighted portfolio would have lost about 8.7% compared to the almost 15% shed by the STI, and that is not including dividends. The equally weighted portfolio would have a slightly smaller loss had Transcu not been suspended.

It can be seen that 2011 was not a very good year for stock picking. My suggestion to long Biosensors, short Genting and Transcu were the only profit making ones and that would give me a hit rate of 30%, which is worse that flipping coins.

My choice of small caps took more damage than the large caps, which is not unexpected as small caps tend to suffer from higher volatility. GMG was the worst performer of the lot as it had announced a 1-for-1 rights issue. Of the large caps, Wilmar did the best and this was probably because it had faltered for quite sometime due to uncertain outlook as well as the failed listing of its China arm.

We have seen a strong start to 2012 and the optimist in me tells me to wait for the dust to settle down either in February or March before committing. The mistake is always to buy into a strong market.

A dollar saved is a dollar earned

The moral of today's post is that your path to financial freedom must depend on the lifestyle you want to lead.

My colleague shared on Thursday that he has a very big piggy bank that he kept his change. He stashed away enough to eventually buy an iPad. Last night, I paid off one of my largest credit card bills ever since taking on my own card. The bulk came from lessons I had signed up and books I had bought on Amazon.

Financial freedom depends on the lifestyle you want to lead for the obvious reason that whatever you can save to spend at a later date, depends on how much you can earn and how little you can save, adding in the interest. Some people have no qualms taking SQ  while others camp on the websites of budget airlines for that super-fantastic offer. Some people prefer taking a cab to work even if they are not in a hurry to get to work.

However, there is a distinction between sloppy spending habits and lifestyle preferences, unless of course sloppy spending is part of your lifestyle. A simple example of a sloppy spending habit would be that you drink Coke everyday at home. But instead of buying a big bottle from the supermarket, you buy a can from the 24-hour convenience store. This is sloppy because it is much cheaper to buy your fix from the supermarket and furthermore, you do not have to consume it immediately.

Hence the piggy bank photo for today's post. I will set aside an amount for my daily expenses, and if there is any left, I will put that in. Alternatively, if you have higher spending power, you can try having a bank account that is for such surplus. I have a ex-classmate who told me that using a certain card to pay for her renovation gave her a considerable amount of cash back, although there is a cap. One way round the cap is to use different cards but that might prove to be an administrative inconvenience.

For myself, shopping for books on Amazon is much cheaper than buying from the local bookstore because the books I am looking at cost at least  SGD 100 and buying from Amazon gives me great savings. If the book is a small item, I will still buy from the bookshop as I do not have to wait about 1 month for it to ship over.

I do recognize then when you do save money on something, you spend it elsewhere. Piggy banks and savings account are not immune to those with a weak will. However, it is always a first step towards financial freedom by rediscovering simple saving and better spending habits. Sedikit-sedikit lama-lama menjadi bukit.

It is the Chinese New Year weekend, perhaps you too could start saving bit-by-bit on Wednesday!

http://investorsingaporean.blogspot.com/

Dear All,

I hope your New Year has been great. I have since started posting at http://investorsingaporean.blogspot.com/ .
I will do an as-and-when update there, so do continue your support.

Many thanks.