Saturday, June 17, 2017

Random Thoughts In My Mind

As an investor, you will always run into many thoughts that will influence you and make you think much more. So these are the thoughts I had over the length of this week...

Concentration vs Diversification

It has been rather dull lately while waiting for Fed to announce the increase in interest rate. Regardless, the Stocks in Singapore did not move much. Rather, it seems that the US market is beginning to be on a downtrend.

Nevertheless, my mind is quite focus on reducing the number of counters in my portfolio and increasing my warchest.

One of the reason was that I met a friend recently (he is a very good investor and he will be in the upcoming interview series) and he commented his belief to me - "Invest in ideas you believe in the most". 

Despite disagreeing with the concentration in his portfolio, his words did influence me. It made me think a lot about each of the counter in my portfolio. In addition, I also felt my portfolio was too diversified and this did affected my returns. In my opinion, a portfolio with 15 to 20 counters will be good enough for diversification.

Currently, I am trying to manage this "feeling" in order not to rush into any impulsive decision, and relook into each counter in my portfolio/watchlist.

Rowsley Ltd downtrend

This counter has been on a downtrend for a few months now. Apparently it seems that one of the major shareholder has been selling. But the other shareholders did not buy the extra shares immediately.

I was interested in this counter previously. But my Super Scorecard save me from it, if not I will be holding on to a huge paper loses now.

Then I came up with a conclusion - It seems that "the rich can afford to lose much more or hold much longer. But as retail investors, we cannot".

My Bias

As investors, we will have our own biases,

For me, I do not like company acquiring new companies with issuance of new shares. I also tend to not like companies with extensive operations in China.

Thus, these bias may have caused me to jump into conclusion without understanding enough of the subject company.

This result in disagreements among my fellow investors and even my colleagues. Nevertheless, I guess we can always "Agree to Disagree, but everyone of us should also listen with an open mind".

In future, I will have to try to understand more before making comments of any particular counters.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Monday, June 12, 2017

Investing in Hong Kong Listed Firms

Many of you will have heard about my reluctance of investing in S-chips. Thus, my investment into Hong Kong Listed Firms will most probably have shocked you, since many of the Hong Kong Listed Firms are located or have affiliations in China.

Do read this post to understand the initial reasons I invest in US and Hong Kong counters.

In addition to the reasons in the post, another factor is my work. My current work requires me to understand the culture of China companies and the China companies financial. Through the process of learning, I understand why there are so many scandals with regards to Listed China Firms (such as those in Hongkong and Singapore).

One of the reasons is the China invoicing/receipt system. Every invoice is tracked by the government centralized system, so that it can track back and tally with the company's tax submission.

To get around this system, companies may have another "system" for cash and carry items. These items may not have been recorded in invoices when sold, but will still be included in their revenue.

Therefore, you will always be able to find scandals about Listed China Firms explaining that the auditors being unable to account for a certain receivables or revenue.

To keep the story short - For me to be willingly to take the risk and invest in a Hong Kong counter, it should pass the following criteria:

1. Pass the Super Scorecard with at least 8 points (I stated previously that I wanted the counter to be able to score 10 points, but it is VERY HARD to find counters scoring so high. Therefore, I give in and reduce that to 8 points.)

2. The main headquarters should not be located/registered in China.

3. The main bulk of the companies' customers should not be within China. The "Cash and carry system" will most probably worked for products that can be shipped within China. For those products that are require to be export, the risk for this issue will be reduced.

After about 3 months, I finally decided on the 2 Hong Kong counters that I will be investing in.

To summarized, I had actually reviewed a lot of Hong Kong Listed counters using the Super Scorecard and here are the list of counters that I reviewed and ignored:

Do note that this review is done over the cause of 3 months and the current score of the counters may have changed due to either updated financials or changes in prices.

1. Eagle Nice (International) Holdings Limited - 7 points
2. PAX Global Technology Limited - 4 points
3. Emperor Entertainment Hotel Limited - 8 points
4. Win Hanverky Holdings Limited -7 points
5. Tao Heung Holdings Ltd - 8 points
6. Ajisen (China) Holdings Limited - 7 points
7. SUGA International Holdings Limited - 4 points
8. Kingmaker Footwear Holdings Limited - 4 points
9. Playmates Toys, Inc. - 7 points
10. Le Saunda Holdings Limited - 8 points

These are the 2 counters that I invested in:

1. Sitoy Group Holdings Ltd - 11 points

You may not know this company. But you will know its main customer - Coach, Inc. With more than 50% of their revenue coming from US companies, we can at least be somehow assured that the financials are real.

Furthermore, if you google this company and you will find many articles about it between 2014 to 2016. However, there isn't much write up now, which is most probably due to its "did not meet expectation" results.

Nonetheless, it fulfills all my criteria. Thus, I bought it.

2. Alco Holdings Ltd - 9 points

I had actually reviewed this company a long time ago. But I waited for a long while before I bought it. This was because it was basically operating in the electronics-retail industry and I believe this industry is too saturated and competitive.

However, after doing so many Super Scorecard reviews, I realized that for a Hong Kong company, to be able to score 9 points is simply amazing.

In addition, after doing more research, I realized that over 90% of the company's revenue is from USA and their products are actually sold under a very famous trademark in USA.

Thus, with these information, I decided to purchase this counter.

For now, I decided to keep my investment in Hong Kong Listed Firms to just 2 counters. Then at the end of the year, I will review my results, including those investment in the US listed firms, and evaluate if I am on the right track with my theories.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Wednesday, June 7, 2017

Technical Analysis - My Point Of View

I bet you have heard me saying, "I know nuts about TA (aka Technical Analysis)".

I also don't know what pink line, blue line and purple line is about.

I also don't understand how drawing a cup can help me with the trade.

And this is the craziest, how does a dragonfly help to trade?

But I do feel I know something about technical analysis and that is "Support".

This is not done by drawing any lines on the chart. But this done by using your eyes!

In my smartphone, I have this app where I watchlist over 40 counters.

Every day I scroll through the app and look at the 40+ counters. After a while, you will realise, for every counter that "is liquid enough", it will have a support price.

Certain counters will hardly fall below a certain share price, unless events such as consistent bad quarterly results or negative news broadcast about the counter, becomes public news.

Thus, in my opinion, this will be the "Support" price for the counter.

An example is the following counters, which I have been watching for a few months:

- Singtel - $3.700
- Comfort Delgro - $2.400

Another example that have shown what happen when a support price is broken is Singpost.

In my opinion, its previous "Support" price was $1.300. However, since this "Support" price has been broken, the counter has been on a freefall.

Another factor about "Support" price is that I believe it will mainly happen to Blue Chips. This is because I believe this theory will mainly worked on Blue Chips as only these counters are liquid enough or has enough BBs to support the counter at that certain price.

These insights also allowed me to produce "The Stable Stock Analysis" within the Super Scorecard.

It was based on a "forever holding period" view. Therefore, for a counter which passed "The Stable Stock Analysis", the investor should be buying in tranches/batches, whenever the counter reach that share price or a share price lower than that.

The eventual view is that, with good management, the company will definitely be able rise back to a much higher share price over a long holding period.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Saturday, June 3, 2017

This Comeback Kid Rises 20%!

Over the last 2 days, the market seem to have become "happier". But at the back of my mind, I am always having a cautious view - "Expect the Unexpected".

Do note that "Comeback Kid" is a nickname that I give to a counter that I had divested completely, and re-purchased at a later date.

The previous "Comeback Kid" was Singhaiyi Group Ltd, which I had written in the previous post.

For this post, the "Comeback Kid" is TTJ Holding Ltd (aka TTJ).

I really regretted selling this counter. 

My actions were largely influenced by the "noises" after TTJ announced its 2016 full year results. 

At that time, TTJ order book reduced significantly to about $50+ million and there was not much direction indicated about the company's future direction in the quarterly reports. 

Furthermore, as the CEO holds about 85% of the shares of this counter, there were "noises" that the CEO will most probably "low-ball" the minority shareholders - by producing poor results in 2017 that resulted the share price to fall significantly and then delist TTJ at a very low share price.

Therefore, I decided to divest all of this counter at 37.5 cents on 17 January.

However, TTJ was still able to achieve 13 points (almost full marks!) for the Super Scorecard with its 2016 full year results.

Over the next few months, I kept wondering if I made the right choice as TTJ share price continued to range between 37 cents to 39 cents.

It was after a long deliberation that I decided to repurchased TTJ at 37 cents on 28 April. 

It was basically due to this 2 reasons:

1. Continued to score 13 points for the Super Scorecard 

TTJ was able to maintain 13 points in the Super Scorecard, even after the announcement of its 2017 1st Quarter and 2nd Quarter results.

2. A Clearer Future Direction

While I was doing my research during the write up of the construction sector, I realised that TTJ has initiated to get accredited as a PPVC manufacturer (as per BCA website). This gave me a clearer picture of the company's future direction.

"Lucky Me"

Soon after my re-purchase of its shares, TTJ announced that it had purchased some land, property and equipment in Johor for its future projects.

Furthermore, on 22 May, TTJ also announced on that its order book had increased to $166 millions.

With these positive news, its share price climbed steadily to the current height of 45 cents!

In Short

The conclusion of this lesson is that I have to believe in my own Super Scorecard and ignore all other "noises".

For those who is interested in The Super Scorecard, do read up on the Launch of T.U.B Circle. This is a 3 months subscription at a very low price of $20 which will give you access to my database of over 40 Super Scorecard of various counters AND YOU WILL ALSO RECEIVE A SUPER SCORECARD TEMPLATE AND ITS HANDBOOK! If you are interested to sign up, feel free to contact me.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Tuesday, May 30, 2017

A Review Of The Recent Results Of A Comeback Kid, A Landbank Monster and A Samurai Chef

With another wave of results being released, I will be doing my 2nd review of some of the counters in my portfolio.

Read the 1st review here.

The Comeback Kid - Singhaiyi Group Ltd - Full Year 2017 Results
[No Review via Super Scorecard]

Read here for the past write up of this counter.

The reason this counter was name as  'Comeback Kid" because I bought, sold and bought this counter again over the space of 5 months.

In January, I purchase this counter in at 97 and sold some of it at 113 within 2 days due to the sudden rise. By mid-Feb, I sold all of the remaining shares of this counter at 135.

In April, I decided to repurchase this counter over 3 tranches at 120, 116 and 117. This was because based on my previous write up, I believe there are still many catalysts yet to be realised Thus, I was hoping that during the release of results, the company will be providing some catalyst to push the share price up.

However, this did not materialize and the share price went to to a maximum of only 125.

For now, my decision is to hold and average down, if necessary, as one of the main catalyst has not yet been realized in any of their past financial reports - that is the revenue and profits in "The Vales" and "City Suites" has yet to be included in any of the past reports.

The Landbank Monster - Bukit Sembawang Estates Limited Full Year 2017 Results
[Super Scorecard Result - 7 points/Just Pass]

Read here for the past write up of this counter.

This is one of my favourite counter because:
- Unlike its competitors, it has a huge landbank that are freehold and these land are stated at cost.
- Cash pile can continued to pay numerous years of dividend of 33 cents.
- Super strong balance sheet with very low liabilities.
- High free cash flow.

With the above positive pointers, despite revenue falling almost 50% and net profit falls 21%, I will continue to hold this counter.

Nevertheless, we still need to be cautious about this counters' developments. As stated in their full year financials, it is stated that "Other operating expenses increased by 81.4% as compared to FY2016 mainly due to additional allowance for foreseeable losses on development properties of $5.8million for Paterson Collection".

The Samurai Chef - Japan Food Holdings LtdFull Year 2017 Results
[Super Scorecard Result - 6 points/Fail]

Read here for the past write up of this counter.

For those that followed my blog will know that I bought this counter only on Early-April.

At that time, I was predicting better results and hopefully higher dividends. However, the company did produced better results but the dividend remains, Therefore, the share price did not really rise.

Nevertheless, it is important to note the main positive point - "...the board (“Board”) of directors of the Company (“Directors”) intends to recommend dividends of at least 50% of the Group’s audited consolidated net profits attributable to shareholders per financial year, an increase of 10% from the current target dividend payout ratio of 40%.." - of this full year results.

Therefore, I will continue to hold this counter despite the Super Scorecard Results change from pass (previously was 7 points) to fail.

In Short

As stated above, I will most probably continue to hold these 3 counters for a longer period of time or at least till 2018.

But as per stated previously in the last review, I am currently re-balancing my portfolio. Thus, I may still change my decision on a later date as I am already sitting on paper gains for the counters above.

For those who is interested in Super Scorecard, do read up on the Launch of T.U.B Circle. If you are interested to sign up, feel free to contact me.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Pssst... I will be coming up with "The Ultimate Workshop" most probably in the last week of june. Stay tuned.