Contradicting situations or maybe not

DJIA @ 17,879.55
S&P @ 2068.02
Record highs since 2008 while the STI struggling to get past 3400. This is just because of the nature of investors in Singapore, they are less risk adverse. Nonetheless,  we are seeing market tops all around us. As i suggested before many many times, we will break to new highs before the next big crash.  This is how markets move, this is the natural law.
Slumping energy prices will have effects on energy exploration, extraction and refining companies. There will be more M&A activities over the last quarter of this year.  Oil has collapsed into a bear market as global demand has slowed.
These may seem like contradictions but they are not.  We are getting ever so close to the tipping point by 1st quarter 2015. I am getting ready,  Are You?

Hyflux - Chart Trends

Recent downtrend of Hyflux has me a little on the edge. Was worried back in 3rd quarter when it broke through the $1.20 major support level. Since then it has taken a nose dive to lows that hasnt been seen recently.

Below is the chart analysis:

If you havent already noticed. The lowest it went in 2008 was $0.732. This is for me the last support level which if crossed, panic will set in to hyflux shareholders. What is the company doing wrongly? Is its ability to win water projects in the region totally diminished? Are they getting too comfortable and used to low performance level of the company/stock/management, dare i say it, lack of expansion? Are they not able to cope with the cumulative preference shares which they issued @ 6% back in Apr 2011?? Their dividend pay-out has also taken a hit. These are questions that pop into any rational persons mind who has interest in this counter. 

It is time to do fundamental analysis on Hyflux again to warrant further investment. Or it is time to accept your losses. We will just have to wait and see where it goes by end of this year, touching close to $0.732 region is "inevitable", just a matter of WHEN and not IF.

Silver Now and Then

Recently read one fellow blogger's post on Silver and decided to do abit of research myself. Here is the link to Got Money Got Honey's post on "Pre-Holiday Silver Sale"

Since i am also on a silver accumulation plan like him, my case is more involuntary because i invested in iSilver Trust (SLV) for a short term of 6-12months. That was initial planning. That was then. Now silver has come down to levels which are attractive for further accumulation. Here below is the chart:

 If cost of production is between $15-20, (which i read somewhere -I cant verify that information), it would make sense to buy silver below of within that range. Looking at the 5yr chart, it also seems that prices have come down to where is started end of 2009. 

Looking ahead, i do believe silver or Gold for that matter is a good asset class to accumulate. Whether we buy physical asset of in the form of ETFs is another discussion altogether. Current spot rate of Silver seems attractive for further accumulation for my case. I will look into this and execute closer to $16.20. Perhaps next week.

 

 

Starhub Chart Aug2014

Interesting to note Starhub is at a crucial turning point. I used to trade this counter several times when it was below market value (like less than $3/share). Frankly i missed the ride to $4.00 haha Oh Well nevermind. Recently out of curiosity just looking at the price chart to see how is it doing, I noticed that it was at at very strong supporting line, bounced off at $4.05 - $4.11 range line several times. See below Chart:

 I have strong feeling, it will go for new highs towards the year end. However if it breaks through this strong support line, then it might go all the way down to below $3.50, which is when i will become more interested in Starhub. :D

Happy Investing!

2014 - Year of Profit Taking

2014 has been a slow year for me personally. I have made very little transactions but here are the profit/loss so far this year:

25-03-14	1211	BYD Company	HKD	+75.68%
20-05-14	G13	Genting SP	SGD	+1.17%
29-07-14	XOM	ExxonMobil	USD	+40.11%

Perhaps I am following too closely to Warren Buffetts rule no. 1 which is "Never Lose Money". Still i am happy with the profits.
However I must acknowledge the fact that, I could have done alot more with my holdings if i took losses on some counters, moving larger capital around to faster growing markets. This did not happen because I did not want to incurr unncessary transaction fees plus take a loss. 

XOM, I decided to close it off couple of days ago because S&P and US markets in general are nearing all time highs. Its time to get careful when other are greedy. XOM has reached by target price anyway @ US$104. (if you see my previous posts on XOM target price) So thats why it is time to lock in those profits. 

Genting was quite a loss of time for me. Unable to close off the trade at higher profits because of greed and promise of higher prices. Anyway decided to close that chapter without any loss, wasted 1 year behind that. 

It is true when they say "Time is Money", longer i am able to hold on to some counters, more chances of it bouncing back, then it is all about the timing and execution. Anyway 2014 has been a year of patience and profit taking rather than venturing into riskier options. 

Currently I am looking into Chinese stocks which are still below valuation. Particularly Bank of China (HK:3988). Watch out for that to bounce back to above HK 4.00 by end of this year.
  

Afraid of the Bubble?

In the last 5 years, you will have heard about bubbles at some point, either from your close friend, investment "guru" or  in the news. Many people keep saying the stock market is in a bubble already. 
I have been watching the markets for very long time, recently did not execute any trades because of this fear. If we are really in a bubble, how will we know? What can we do to prepare for the big bursting of the bubble??

Actually every market also can have a bubble, some more active than others. Industry experts always take the safer stance and warn us if a bubble is imminent, going to burst, corrections going to happen and so on. Personally I like to listen to them and will agree if it is logical. However most of the time, I just do my own research first before taking any action. So should you.

DEFINE A BUBBLE: Markets always go through ups and downs. So everytime there is a correction, doesnt mean a bubble burst. So please "Investment Guru" on TV if you are reading this (which i doubt) STOP beating the drum everytime. A market bubble is usually the result of irrational exuberance, disconnected from the core fundamentals, where prices shoot up due to unexplained demands. 

Best way to look at whether or not there is a bubble is to look at the instrinsic value of a stock which is usually determined by their cash flow, expected growth and risk (liabilities). Naturally if cash flow increase, growth rate climbs, risk drop then the stock price should go up (by right), this cannot be considered a bubble. On the opposite side, if the stock prices go up as cash flow decrease, growth rate is negative and risk is higher, this is a bubble.

For me I like to look at price earnings (PE) ratio and interest rates. See graph below:

    
As you can see, we are no where near the high PE ratios required to start panic. Partly is due to the low interest environment created by the FEDs and this is affecting markets all over the world. Also notice how long term interest rates are inversely proportional to the PE ratio. 

Looking forward into 2015, I do feel interest rates will continue to be low and markets artificially manipulated. So until then I clearly have no worries of an impending bubble. The million dollar question is what is going to happen by the end of 2015 and starting 2016. 
Hopefully by then, I would have reduced my exposure to stocks to 20% in defensive counters, and holding the rest in cash to be deployed when required. 
 

China Goaxian

China Goaxian is a weird one. 

First confession: I have had holdings in it for a long time since its IPO in Singapore. There was this whole hoo-haa about accounting fraud, as a result of which it got de-listed from the SGX. 
My feelings at that time was, "ok fine, shit happens", if i can afford to invest in such a company, i have to be willing to lose 100% of my investment. It was a moment of realisation how things can really go against you.
 
This year as soon as it got listed back, they issued warrants to existing shareholders, of which i was one. Lets see how this plays out in the coming years.

Second confession time: I monitored trading volume and price movements for several weeks so i could buy in equal number of stocks at almost 90% discounted price. 
That was my second bullet. Now i just wait for the opportunity to get out of this dreadful counter as soon as i can hit my target price. 

Recently, ChinaGoaxian has come into the limelight for being a very promising stock, so called multi-bagger. All i have to say to people who are trying to get a piece of action from this counter is be very careful. If investing in ChinaGaoxian has taught me anything, it is to stay away from penny stocks.

Only trade in the past 6 months

First post in a very long time, did not get time to write regularly since i have been travelling quite a bit. Internet is such a commodity when you are overseas in a third world country. Still i try my best to monitor every now and then on market performance and direction. 
For some reason, markets have not been favourable to me in the past 6 months or so during which I did not make any trades. Not enough profit for some, and failed to execute in time for others. However i did have to take profit on my BYD holdings this morning. Here is the chart below. It was just right timing for me to sell before it goes down further.

Holding period: 1 year approx.
Profit: 74%
Actually the sell position is slightly wrong on the image above, i didnt manage to sell at the top. I was late slightly, sold it at HKD48.25
We can never expect to sell at the top anyway, always remember not to be greedy and wait for too long. Take profit as you see fit. I am happy with the returns, so i wanted to share with fellow bloggers. Perhaps i will pick this stock up again after its correction, because i still believe that rechargeable lithium batteries for portable devices and automobiles will be huge in the future.Long journey awaits for BYD in the near future pre 2020.  
 

January and STI update

I didnt have any entries in January because of frequent travelling and work piling up, but it is good that i did not look too much into the markets and make any unnecessary mistakes.
As there was nothing of interest to me in January, looks like worldwide markets are sluggish to say the least. Retails investors as well as Big fund managers are too weary of the cutting down of stimulus by the FEDs. Leaving those of us with investments feeling like we are stuck at the moment, neither having the confidence to buy nor having the courage to sell. 

What are we to do? Just hold on with our investments or run away? Looking at the chart below, it is safe to say STI is still int he short term bear market unless it break through the significant 3100 barrier.

However the crossing of this red line to the upside, will signal me to start looking for good selling prices on the counters i already hold. As i have said time and time again, towards the end of 2014 is not going to be good for holding stocks.