Monday, 12 March 2018

Old lessons - facing a 'new worse'

With reference to an old post: A new worse - STI Aug 2011, two more lessons added on:

Lesson Five - Be nimble. Be impatient to the weeds. Slowly rake in the gems when they are on sale and be very patient with the gems.

Lesson Six - if chance permits, short those stocks that fuel the Bear. (Be careful not to short too late. As we can see over the years, major down trends lasted shorter than major up trends.)

STI 10 years - plunge points

Market downturn will always repeat itself again. Triggers may be different but learning points are the same.

How ready are we to face a 'new worse'?


Sunday, 11 March 2018

What swimming taught me about investing

  • Investing is pretty much like taking a plunge. Swim or sink.
  • I could rely on others to keep me afloat, for a while, but not forever.
  • People can set different goals and pace for themselves (I don't need to be like everyone else).
  • The end of a lap always seems very far away (as I am short-sighted, I can hardly see it) when I started out. With consistency and perseverance, I will eventually reach the other end.
  • I swim in the style I am most comfortable and adept in. It may not be the fastest stroke but it should definitely be one that keeps me afloat and moving. Yeah, it's very much each to his own.
  • Strength and stamina will determine how fast and how I you can go. Just like in investing, 3Ms is my strength and account size is my stamina.
  • Lots of time and practice are needed to build both strength and stamina.
  • Conserve energy if I want to do more laps.
We can choose to swim in a peaceful swimming pool, we can choose to swim in the sea. We can choose to invest in boring, constant return instruments or we can choose high volatility ones that could potentially generate high returns.

Wherever it is, stay afloat and keep progressing. :)

Sunday, 4 March 2018

Opportunity costs in stocks market

When we speak of making profits through stocks investing and trying not to lose money according to Buffet's rule, there is a part of the processes which we may overlook. That is - are we able to minimize opportunity costs throughout our investment journey? (In another words, mitigate risks and identify market opportunities.)

Here are some ways in which one may incur opportunity costs (from my retrospective checks as I evaluated my current portfolio performance):

1) Sitting on too much cash in a bull market or waiting for a crash

This is a total opposite of FOMO (fear of missing out). I can think of two possible reasons for sitting on cash - one predicts that a bear may strike soon (fear of losing) or one is not sure which stocks to buy.

These cash on hand sort of erode away in value with inflation (ooh the scary term) as the bull market charges, losing out on capital gains and dividend yields. War chest under-utilised...

Not to mention those friends in the DCA (dollar-cost-averaging) and passive investing faction would probably go like "See, I told you!" with a smirk.

Read also this article by Teh Hooi Ling.

However, we must also bear in mind money management rules as illustrated by famous trader Jesse Livermore's words:

"Remember, you do not have to be in the market all the time. The desire to always be in the game is one of the speculator’s greatest hazards. When playing the stock market, there are times when your money should be waiting on the sidelines in cash.. .waiting to come into play. Time is not money — time is time, and money is money. Often money that is just sitting can later be moved into the right situation at the right time and make a fast fortune. Patience is the key to success, not speed. Time is a cunning speculator’s best friend if it is used wisely."

2) Letting go of 'touchstones' and holding on to 'weeds'

Touchstone refers to a stock that keeps climbing in price (despite retracements) beyond which you bought it for. Inspired and borrowed with pride from Uncle8888's story.

How many touchstones have you picked up in your x-years of investing? Did you pick and throw them back into the sea?

Do you hold on to those stone-turned-useless weeds and watch them rot away?

3) Not following the macro economic news and being unaware of market's trend

I was absolutely guilty of that when I did not read the market reports broadly and diligently for the last 2 years. As such, I have missed dearly the rise of the Semi-conductor sector. I do read reports now and then, however my angle of view was narrow - I only read certain headlines which drew my interest and on those companies which I have vested interest in. With that, the bandwagon passes me by without my realizing!

Just to sidetrack a little... being able to identify value / projected good-earning stocks is one thing, identifying ignited value stocks is another. Watch the ignited ones rocket and hold on tight.
(Creative tech just ignited like fireworks. However, I am not quite sure how sustainable is the 3D audio frenzy.)

Besides having an astute mind in stock buying / selling and good money management techniques, knowing when opportunity knocks is just as important to succeed. Opportunities are only for the prepared.

Read also Time in the market beats timing the market?

Wednesday, 28 February 2018

Watchlist: ThaiBev Y92

"Operating profit was THB 2,794,794,000 compared with THB 7,172,763,000 a year ago. Net operating profit was THB 3,165,037,000 against THB 7,337,061,000 a year ago. Profit before income tax expense was THB 3,993,173,000 against THB 9,149,891,000 a year ago. Profit attributable to owners of the company was THB 2,911,892,000 against THB 7,714,855,000 a year ago. Basic and diluted earnings per share were THB 0.12 against THB 0.31 a year ago. Net cash from operating activities was THB 5,789,946,000 against THB 7,797,559,000 a year ago." First Quarter ended Dec 17 [Source: SGX]

Price watch points as indicated above and I shall wait for the price drop to stabilize. In the meantime, I will do some reading about its earnings and how the company strategizes to overcome headwinds.

Takeaway from its annual report 2017 (FYE Sep 17)

57% from spirits
30% from beer
9% from non-alcoholic beverage
4% from food

Vision 2020

We aim to solidify ThaiBev’s position as stable and
sustainable largest beverage company in Southeast
Asia, and create return to shareholders.

To support and sustain ThaiBev’s growth, we plan to
diversify our revenue streams, increasing revenue
contribution from non-alcoholic beverages and the sale
of products outside of Thailand.

By streamlining ThaiBev’s businesses into three
product groups (spirits, beer, and non-alcoholic beverage)
and identifying core brands within each, as well as
focusing on primary and secondary markets with the
greatest growth potential, we look to expand the
business via a consumer and market-driven approach.

To realise the potential of ThaiBev’s core brands,
robust and efficient routes to all markets are required.
Accordingly, we seek to build on our market leading
business processes and supply chains to strengthen
existing distribution networks, establish new ones, and
also enter into partnerships with third-party distributors
when appropriate.

We strive to ensure that we have a diverse and high
performance workforce, and that the teams behind all
three product groups work together seamlessly,
leveraging cross-product group synergies where applicable,
further strengthening our long term potentials.

- Revenue from sales stayed flat. We shall see how it performs this year with its new acquisitions.
- Net profit margin increased.
- Net cash from operating activities increased.

*** I felt quite positive about the long-term outlook of this stock. The issue now is about picking it up at the right price. ;)

Monday, 26 February 2018

STI 12M returns snapshot

Top 10 highest return

Name SGX Code Market Cap (S$Bn) 23 Feb Close Price (S$) 30 Day Volatility YTD Total Return % 12M Total Return %
DBS Group Hldgs D05 75.9 29.59 25 19.1 61.5
Oversea-Chinese Banking Corp O39 56 13.37 24.1 7.9 43.1
United Overseas Bank U11 46.7 28.07 21.2 6.1 32.4
Genting Singapore PLC G13 15.7 1.3 27.1 -0.8 29.6
Keppel Corp BN4 14.4 7.96 29.6 8.3 18.1
City Developments C09 11.5 12.66 25.8 1.4 33
Venture Corp V03 7.6 26.66 34 30.2 170.2
UOL Group U14 7.1 8.38 22.1 -5.5 27.5
CapitaLand Commercial Trust C61U 6.1 1.69 24.2 -10.5 16.7
Yangzijiang Shipbuilding Hldgs BS6 5.8 1.47 40.6 0 52.6

Top 10 lowest return

Name SGX Code Market Cap (S$Bn) 23 Feb Close Price (S$) 30 Day Volatility YTD Total Return % 12M Total Return %
ComfortDelGro C52 4.3 2 24.4 1 -14.5
Thai Beverage PCL Y92 20.3 0.81 24.9 -10 -13.4
Wilmar International F34 19.8 3.13 19 1.3 -12.9
Singtel Z74 55.2 3.38 14.7 -5.3 -10.4
SPH NS8U 4.1 0.475 37.6 -10.8 -7.3
Golden Agri-Resources E5H 4.6 0.36 23.1 -2.7 -6.7
StarHub CC3 4.3 2.5 37.4 -12.3 -5.7
Jardine Cycle & Carriage C07 15 37.83 19.4 -7 -5.6
Jardine Strategic Hldgs* J37 55.6 50.149 19 -5.2 -5.4
Jardine Matheson Hldgs* J36 59.6 81.98 21.8 1 -5.2

2018 gave a minor heart attack in its second month (I thought winter is coming but seems like it's just the end of summer - 2017 bull run). My portfolio gains have halved just within a couple of weeks then saw some rebound. My zodiac says I should not invest in anything risky this year. I am not sure what is defined by risky. Bitcoin perhaps? (I opened a Gemini account but don't know why it takes forever to get approved, maybe that's for the better.)

Economy is supposedly improving but I still see so many sleeping / slipping giants.

Somehow I don't have much confidence in parking my money to any stock right now. Yet, don't feel like it's the right time to sell anything either. Shall just wait and see.

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