Tuesday, August 25, 2015

The Value Portfolio - Recent Actions and Views

I’m back.

I’ve been too busy at work and have no time to blog.

When it’s the time to blog - Everything turned red. Thus, I end up using the time to review my portfolio and the potential companies I can invest in.


This time round I will list down all the companies I have a stake in:
  1. ISDN Holding Limited
  2. Sin Ghee Huat Corporation Limited
  3. PNE Industries Limited
  4. Chuan Hup Holding Limited
  5. LHT Holdings Limited
  6. TTJ Holdings Limited
  7. Accordia Golf Trust
  8. M1 Limited
  9. Singapore Telecommunications Limited
  10. Sapphire Corporation Limited
  11. SEMBCorp Industries Ltd
  12. Macquarie International Infrastructure Fund
  13. Suntec Real Estate Inv Trust
  14. Oversea-Chinese Banking Corporation
  15. SATS Ltd
  16. CH Offshore Ltd
  17. Maxi-Cash Financial Services Corp Ltd
(I have been told by many gurus that I am too risky when I realise my holdings in my previous post. Hopefully this revelation will ease their worries. In addition, I will proceed to explain why I invested in each individual companies when I have more time – After the BLOODBATH ease.)

From my previous post, you can see that I have divested all my holdings in HTL International Holdings Limited (Even if it is a value stock, the business really doesn’t seem to worth the time). Currently I am still holding to about 40% of cash.

I intend to divest all my “In-The-Money” companies (Maybe SATS, M1) to improve my liquidity and maybe some of those companies that I deem are Overweight in my portfolio (Yet to fully review).

I decided on the above actions is because:
  1. STI/Singapore Stock Market does not seem to be rebounding any time soon. My stocks are either in red or near my initial buy price. Selling these “In-The-Money” Companies will improve my liquidity and in future I may be able to buy them at an even lower price.
  2. Each individual stock buy/sell price spread is getting too wide, even for those heavily traded stocks. The trend seems to be going down.
  3. I have heard it more than once that there is going to be a major correction in Sep soon. (Yes, it is still not major yet.)
  4. World events are not smooth sailing ANYWHERE – China Stock Mark, Chinese Yuan depreciating, China PMI going down (Maybe due to all of the public cash stuck in assets?), Greece PM resign (WTH… I thought that is over?), North Korea/South Korea Tension, US intention to increase Interest Rate by year end (It’s not confirm, is it?), DOW JONES falling about 2000 points in 3 months, SIBOR Rate has started to rise (do you feel that your housing loan instalment is rising?), List firms and even Govt Statboard are issuing bonds to the public (when did you this kind of frequency previously?).
  5. Finally – Many Fund Houses are keeping a lot more Cash at this moment (like they are predicting something major is going to happen soon…Read James Moniter).
  6. I am selling these blue chips only after receiving the most recent declared dividends.

However, I am still not in a hurry to sell all my stock holdings (and I have still yet to panic and can sleep well at night.) because:
  1. Many of the business that I invested in are companies with CONFIRMED recurring income (esp the blue chips). Some other companies are also value plays and averaging down will put me in a better position.
  2. If you have invested in a good company, why sell? You should only sell if the company you invest in has changed its fundamentals OR you no longer see it the same way (new revelations).
  3. I am a value investor and I believe in my views. If you are easily swayed by the market chats, you should never invest or even trade in this market. An investor must have his own views and stand by them if you think you are right (NEVERTHELESS, if you read that you are wrong, and YOU ARE REALLY WRONG, you should accept and move on. You must be able to separate the noises from the correct views.)

Lastly, I will end with the advice I always gave to my friends whenever they intend to enter the market, “It must be your disposable cash and you must be able to accept to lose all these cash. In this way, if the market falls, you will still be able to sleep peacefully at night.”

If you cannot accept any market correction of another 30% to 50%, please keep the money by your side. 

Any actions stated above are only for my own portfolio. Please do your own diligences before you enter or exit any investment.  

Sunday, August 2, 2015

The 5th "An Evening With AK & Friends" (1 August 2015)

Yes I went for the 5th Session of “An Evening with AK & Friends”.

Unlike some of you, this is my first time going for this session and I really appreciate the knowledge that was discussed during the 3 hours session.

Basically it was a session talking about CPF, Insurance (By Christopher Tan from Providend Ltd) and “AK talking to himself” as usual.

(Note: I am not a very good writer and never really take any notes. So I will just write from my memory and in point forms.)

Firstly we talk about CPF, Medisave, CPF Life and Minimum Sum as follows:

CPF SA has a guaranteed 4% return (as of now) – 1 of the best risk free return out in the market. 

Medisave Life – It is a better form of Medisave that do not discriminate between illnesses and will cover your whole life.

Minimum Sum - This is the most interesting part of the discussion. It is stated that the minimum sum, currently at $161k, will increase 3% every year so that everyone can have at least 650/mth to spend when they retire.

Top Up on Minimum Sum – We can top up our SA to build up for our Minimum Sum for our RA in future. HOWEVER, whatever money we voluntary top up in our SA for the Minimum Sum, we are unable to take out at age 55. It must be for retirement age. At age 55, we are only able to take out the sum of money from OA+SA that is on and above the minimum sum, and that is contributed by Salary.

CPF as Bond – Basically as investor, we can take CPF as a bond for diversification as it is risk free and has a guaranteed 4% return currently.

Next we discuss slightly on Insurance. AK explained that everyone should not save on insurance premiums and everyone should have a Life, H&S and Critical illness insurance. As for Investment-Linked Insurance, we should just do it on our own.

After the break, AK started to talk to himself.

We also talk about the investing mindset. AK explained that everyone should have their own view and not just blindly follow anyone.

He also explain how MACD (Moving Average Convergence Divergence) works and how this might help investors.

We also talk about various stocks, such as Wilmar, SPH, Saizen Reit, Croeus Retail REIT, Sabana REIT, Accordia Golf Trust, OUE, ST Eng, Noble, Starhub, M1, Keppel Corp and Sembcorp. (Disclaimer: these discussion were not just on buys but also sells.)

 What amazed me is the depth and information AK is able to dig out before investing on a particular share. He doesn't only look solely on FA or TA. He basically also look at the business model, the company, the marco factors and also its managers (esp on REITs).

Conclusion

In short, this was a great talk for me as it was fun and wasn't boring in any ways. I also learned that I am still not as good as I thought. There are still many ways that I can improve on my analysis such as the way I look at business model and companies. In addition, I also met AK in person, as well as many other financial bloggers. Looking forward to the next session (if there is any).

Saturday, August 1, 2015

The Value Portfolio

At last, time to talk about my Portfolio...

A few facts before I start on the exciting stuff:
  1. Invest/Trade with only what you can afford to lose – so that you must be prepared to loss all before putting your hard-earn money in. This is to curb against the emotions of accepting losses and looking at paper losses.
  2. Invest in Companies and not “Short Term Trading” – This meant that I look at the companies, business model, financials and not just the charts and price.
  3. Min Technical Analysis – I still look at charts and try to avoid a company whose share price recently rise significantly, or another that’s at a 52 week high.
  4. Portfolio Action and Not Monthly/Daily Action – I invest via a pool of funds. For example, if the fund size is $10k, this meant that I do not try to buy shares for the portfolio by adding more cash to the portfolio. Any increase in the portfolio should be due to the share price appreciation or dividend given.
  5. Resources are limited – This makes you select you stocks more carefully as your funds are limited and you are also able to track your gain and losses in detail.
  6.  Diversification – I have read around that you will need to diversify but not excessively. My current view is that a portfolio should have around 8 to 12 stocks.
  7. Value Investing – My methods are not like those hardcore net-net investor but is still roughly similar. In addition, with all these uncertainties (high STI, Greece, China, etc) in the current (or even future) economy, I believe Value Investing is the way to go as you try to pick out the company with the “toughest build that can whether all kind of storms that’s ahead of it”.
  8. Small Cap Favoritism - Due to the way I analyse for this portfolio, most of the stocks that I am in contact with are all small cap companies.
  9. SG Stocks only - I have yet to venture into overseas shares. Thus, all the shares in this portfolio are only listed in SGX. 
Note that this is a new portfolio that started in April 2015 and I have yet to develop my Value Stock Scorecard then, thus in future when I discuss about each individual stock/company in this portfolio, it may not be deem as a Value Stock.

The portfolio consist of:
  1. ISDN Holding Limited & here too!
  2. Sin Ghee Huat Corporation Limited
  3. PNE Industries Limited
  4. Chuan Hup Holding Limited
  5. HTL International Holdings Limited
  6. LHT Holdings Limited
  7. TTJ Holdings Limited
  8. Macquarie International Infrastructure Fund
  9. Accordia Golf Trust
I am still looking at other shares to build up my portfolio till max of 12 shares and about 46% of the portfolio are still in Cash.

Do note that added some of the links above to companies' name that are the blog posts that I discuss previously on some of the shares above. I will also proceed to write an individual update on each individual stock/company listed above and explain on my rational that time as well as my plan ahead.

PS: Do your own due diligence before making any similar stock purchase.