Friday, 30 January 2015
HPH on the Upside
Had a look through HPH Trust chart this morning. Seems that it has finally broke through a major resistance level and is now on the upside. Which also means i wont be taking up anymore positions above US$0.73 See chart below:
The long red line from the start of this counter IPO price to now has been a painful 3 year downtrend, especially if you are like me, in it for the long term (3-5yrs). Over these 4years, i have bought more into HPH so i'm sitting at a comfortable breakeven price. Lets see what the future holds for HPH Trust.
Wednesday, 3 December 2014
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?
Wednesday, 26 November 2014
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.
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.
Friday, 3 October 2014
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.
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.
Monday, 18 August 2014
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!
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!
Friday, 1 August 2014
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:
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.
| 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.
Wednesday, 23 July 2014
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.
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.
Wednesday, 2 July 2014
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.
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.
Tuesday, 25 March 2014
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.
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.
Sunday, 16 February 2014
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.
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.
Thursday, 19 December 2013
HPH Trust going to test bottom again?
I have held HPH Trust from the start of its listing in SGX. One of the reasons for holding on till now would be the promised dividends. Their dividend returns remain above average compared to Bluechip stocks and some REITs even. Now I am wondering if its a good idea to stock up more at lower prices. Look at the chart below:
At the bottom 57cents, it was over 40% discount to its IPO price and a great place to pick up the stock. Unfortunately i did not because at that time nobody knew where the actual bottom would be. Anyway, 2 years have past and we have all observed price movements, strengths and weaknesses of HPH trust.
Since that bottom in Oct-Nov 2011, it has been trending up 85cents but never crossing it. Recently it broke through (green line) uptrend in mid 2013, I knew it is time for major correction again. This time it is going to test the bottom 57 cents again. What is the fair value of HPH by local brokerages? its constantly ranging between 70-80cents.
Even at the forecasted DPU at 40HKcents/share which translates to 5.2cents (US), buying HPH at 60cents or below will give dividend returns approximately 8.6%. Also giving me a chance to lower by buying price significantly.
Time to be patient and just wait for the opportunity to get HPH at discount price.
*The above is not recommendation to buy or sell HPH, dont speculate. Most financial guru's will put HPH on "HOLD" or "SELL" but try not to let them influence your long term vision. Long term investors should not be swayed by price volatility but instead look at returns on investment and gradual growth in portfolio size over time.
At the bottom 57cents, it was over 40% discount to its IPO price and a great place to pick up the stock. Unfortunately i did not because at that time nobody knew where the actual bottom would be. Anyway, 2 years have past and we have all observed price movements, strengths and weaknesses of HPH trust.
Since that bottom in Oct-Nov 2011, it has been trending up 85cents but never crossing it. Recently it broke through (green line) uptrend in mid 2013, I knew it is time for major correction again. This time it is going to test the bottom 57 cents again. What is the fair value of HPH by local brokerages? its constantly ranging between 70-80cents.
Even at the forecasted DPU at 40HKcents/share which translates to 5.2cents (US), buying HPH at 60cents or below will give dividend returns approximately 8.6%. Also giving me a chance to lower by buying price significantly.
Time to be patient and just wait for the opportunity to get HPH at discount price.
*The above is not recommendation to buy or sell HPH, dont speculate. Most financial guru's will put HPH on "HOLD" or "SELL" but try not to let them influence your long term vision. Long term investors should not be swayed by price volatility but instead look at returns on investment and gradual growth in portfolio size over time.
XOM target almost there, Other US stocks to watch
Referring to my last post on "ExxonMobil gets another boost". My profit target price is still $108". I believe this is just a matter of time as XOM closed last night at $99.54, gaining almost 7% since my last article. (i.e. if you have been following).
Other US stocks to watch: Goldman Sachs (GS), Coca Cola (KO), Mondelez (MDLZ), Johnson & Johnson (JNJ), Procter & Gamble (PG).
Keep a close eye on leadership stocks in everysector to gauge an idea of market direction. For example Goldman Sachs price movement provides excellent market direction relative to US, it works for me. This is one the hints you can take away. When a leadership stock such as GS falters, it is time to be skeptical of the market in general. For the past year it has been bullish and last night it broke past $170 barrier. Where is the next stop? $180-$185. When GS reaches, $230-$240 next year, start packing up because some of the smartest people in the world work for Goldman, they invest in their own company. When markets are heading for a downturn, when the economy cannot expand further, M&A deals stop, things start t contract. These people are the first to pull their money out.
Okay, realistically I have gone overboard and exagerrated the above sentiments, but it is true to a certain extent. It has worked for me in the past few years, to follow Goldman Sachs. Might also work for you :)
Friday, 6 December 2013
Suntec REIT potential upside
Looking at Suntec REIT today. In the past year, It was a good trade opportunity if only you took profit after hitting $1.70++ like me. Now the counter has come down to a significant buy level of $1.50
My target is going to be around the $1.90 - $2.00 region. Looking at the graph below, the uptrend line seems to have a strong support. Bearing in mind, in order for the bull run to be intact, it must not drop below the previous low of $1.12
There is also a possibility that it might break the supporting trendline. In which case next support is $1.30 region. If you have been holding for the long run, this might be a good opportunity to buy more into SuntecREIT. Not the forget that the revamped Suntec City Mall and Exhibition halls had opened in Sept this year. Looking forward, Suntec has alot of upside to increading rental returns as they also own some critical/vital property in MBFC.
My target is going to be around the $1.90 - $2.00 region. Looking at the graph below, the uptrend line seems to have a strong support. Bearing in mind, in order for the bull run to be intact, it must not drop below the previous low of $1.12
There is also a possibility that it might break the supporting trendline. In which case next support is $1.30 region. If you have been holding for the long run, this might be a good opportunity to buy more into SuntecREIT. Not the forget that the revamped Suntec City Mall and Exhibition halls had opened in Sept this year. Looking forward, Suntec has alot of upside to increading rental returns as they also own some critical/vital property in MBFC.
Friday, 22 November 2013
Not All Markets Are the Same
Mixed feeling analysing my portfolio today. I know that my entry points have not been excellent in the past for Singapore stocks. Of course over the past several years, my timing has improved. My failure to have proper exit strategy in the past has haunted me and I still hold on to my biggest losses, namely Hyflux (30% loss) and ChinaGaoxian (still 67% loss after they re-enlisted into the exchange). Those two are the main culprits. Otherwise excluding them average loss is 8%. I'm not that worried as almost 65% is allocated to REITS giving me 7% returns on average. REITs on average are not performing well. Gonna get my rights issue+access @ $1 for Ascott REIT soon, so might bring my losses down slightly.
Anyway the reason for this post is to share an interesting point here. How come SGX is lagging while the rest of the world is moving towards new highs? I really dont understand. Thank GOD, I have spread or "diversified" my portfolio to stay invested in US, Japan, HK/China as well.
(*I didnt take into account dividends)
As you can see almost 60% is parked in Singapore. Most of them are in the red but only slightly, this year end rally will help me to exit some positions with profit + dividends. As for NYSE/NASDAQ, holding mainly consumer/defensive stocks like KO and MDLZ with decent returns of 20%.
Best performing market for me is still the chinese stocks, timing was good, entry was just after the bottoming out after 3 years of sluggish growth in China. However i wish i had put more into chinese stocks. Mainly holding BYD Intl and China Insurance.
A good lesson here is to stay diversified then only you can lower your risk.
Anyway the reason for this post is to share an interesting point here. How come SGX is lagging while the rest of the world is moving towards new highs? I really dont understand. Thank GOD, I have spread or "diversified" my portfolio to stay invested in US, Japan, HK/China as well.
As you can see almost 60% is parked in Singapore. Most of them are in the red but only slightly, this year end rally will help me to exit some positions with profit + dividends. As for NYSE/NASDAQ, holding mainly consumer/defensive stocks like KO and MDLZ with decent returns of 20%.
Best performing market for me is still the chinese stocks, timing was good, entry was just after the bottoming out after 3 years of sluggish growth in China. However i wish i had put more into chinese stocks. Mainly holding BYD Intl and China Insurance.
A good lesson here is to stay diversified then only you can lower your risk.
Friday, 15 November 2013
ExxonMobil gets another boost
Important news just yesterday, Berkshire Hathaway revealed last night that it has been holding roughly 40M shares of ExxonMobil since 30th Sept. To me, it just re-affirms my position held for the past year.
XOM last trading price at $93.23
I have written about Exxonmobil (XOM) in the past, and my previous profit taking target was $94. However three things have made me re-evaluate my strategy for XOM in the short term.
1. It is the year end rally, there is absolutely NO WAY i am selling before end of Dec because it is a well known fact that non-defensive stocks tend to fair well in the last quarter.
2. Positive comments from Yellen, the future FED chairman who is going to take over from Bernanke, reassures many weary investors out there.
3. Warren Buffett is the ultimate value investor. He see's ExxonMobil to be undervalued.
Therefore referring to my previous article "How much is ExxonMobil worth?" , I said the following: " true potential for XOM is $125 but only if the market sentiments remain bullish all year long". Now, I can confidently say that it is, XOM will break the $94 resistance either tonight or by next week and head much higher by mid of 1st quarter 2014.
My profit target price has been adjusted to a conservative $108. How did i come up to this value? Its based on my own risk appetite and individual profit taking target fitting into the timeframe or which i wish to stay invested.
Below is a historical chart of their performance, highlighting places where you could have bought this fantastic company. If you are like me, not having the privilege of being born in the 50s or 60s. Its OKAY. look at the chart and pick up stocks that are undervalued. Technically, when they are hitting the historical support line (red line) and about to bounce back.
Something interesting you will notice, there has been ups and downs but staying invested in a value stock over the long term actually does pay off, BIG time.
XOM last trading price at $93.23
I have written about Exxonmobil (XOM) in the past, and my previous profit taking target was $94. However three things have made me re-evaluate my strategy for XOM in the short term.
1. It is the year end rally, there is absolutely NO WAY i am selling before end of Dec because it is a well known fact that non-defensive stocks tend to fair well in the last quarter.
2. Positive comments from Yellen, the future FED chairman who is going to take over from Bernanke, reassures many weary investors out there.
3. Warren Buffett is the ultimate value investor. He see's ExxonMobil to be undervalued.
Therefore referring to my previous article "How much is ExxonMobil worth?" , I said the following: " true potential for XOM is $125 but only if the market sentiments remain bullish all year long". Now, I can confidently say that it is, XOM will break the $94 resistance either tonight or by next week and head much higher by mid of 1st quarter 2014.
My profit target price has been adjusted to a conservative $108. How did i come up to this value? Its based on my own risk appetite and individual profit taking target fitting into the timeframe or which i wish to stay invested.
Below is a historical chart of their performance, highlighting places where you could have bought this fantastic company. If you are like me, not having the privilege of being born in the 50s or 60s. Its OKAY. look at the chart and pick up stocks that are undervalued. Technically, when they are hitting the historical support line (red line) and about to bounce back.
Monday, 11 November 2013
Things To Come
This is not related to the famous science fiction book "The Shape of Things to Come" by H.G. Wells but rather my take on the stock market. Regular readers of my blog would know about my stance on the market today. Take advantage of the market exhuberance but beware of what is coming ahead in 2014. I have said in the past, history tends to repeat itself, even if the Feds keep printing money and delay the inevitable, the outcome will still be the same. Personally i have a bearish outlook for stocks in 2014, i let the chart below do most of the talking.
Eventhough we have not reached market tops, we are quite close. I think DowJones Industrial average is a better indicator of global market cycles than S&P500, Nasdaq or other indices. Of course our very own STI can tell a different story but there is a high correlation between the two.
On first look, you might say the DJIA is moving perfectly between two parallel lines but the bottom in Sep'2002 does not touch uptrending line. Another fact is that the bottom in Feb 2009 was actually lower than Sep 2002, which lets some people believe that we have been in a bear market since 2000. I however, do not think technical analysis takes into account all the things that have changed. We have not taken into account how the index NOW has more components than it did 20 years ago, the revolution of the internet and increase in accessability to trade the market. All these things add to the volatility equation.
What has happened since 1992? We have seen internet bubble and housing bubble. What has allowed for these bubbles to form? Ever since 2000, the central bank's policy has only delayed an eventual bottoming of the stock market. But i am not going to complain about that because it has made many, including myself, to get a decent return from investments.
Recent activities in the stock market and other asset classes is sending a clear signal that bubbles are forming everywhere mainly due to loose printing of money and low interest rates. Many people are quick to forget how often central bank policies have backfired throughout history, as they try to artificially quell inflation. Central bank policies have only three achievements throughout history:
1. Making a few successful traders, filthy rich over a short period of time >>> suddenly they become guru's and start conducting seminars and writing books.
2. Ensure Banks make more money, and also making the wealthy eventually wealthier
3. Eventually failing and sending the world into turmoil
What is happening recently? You must have seen Twitter jumping almost 73% on its IPO debut appearance. Everybody is probably thinking, hey i want a slice of that pie also. But did you stop and think about the business of twitter? How are they able to generate income through advertisements alone? I guess there will always be followers who will buy into the hype but i do not think its a sustainable business model, same goes for Facebook. Another internet bubble in the making perhaps.
In Asia, we see bigger bubbles forming across all asset classes. Look at the Indian stock market which has reached record highs over the past week despite all the problems and massive devaluation of its currency. Its definitely speculator's market, with no fundamentals. Look at the chart below for SENSEX, where is the supporting line for their post 2004 rally?
Housing markets in Singapore, Hong Kong, China and Australia are all in a bubble.
Australian housing market has been on an uptrend since the 1950s and is one of the world biggest housing bubble. Now Aussies are being allowed to use their "superannuation funds" as collateral to buy residential properties, reflating their bubble again. Look at the charts below:
So just beware of things to come. It is not going to get easier. Central banks around the world are clouded by their hubris, endlessly printing money and stretching without contraints. Bear in mind, our financial system as it stands today has a very short history compared to the thousands of years of written history. No body is sure how the future will play out. But i do know for sure, increasing asset price volatility is here to stay.
The best defense would be to:
1. Diversify your assets (Stocks, Commodities, Property etc.)
2. Don't take on "bad" debt. (read Robert Kiyosaki's Rich Dad Poor Dad, in case you are not sure what is good debt and bad debt.)
3. Avoid hyped up IPOs (which gets undue media attention)
4. Hold some cash reserve (SGD is still one of the best in the world)
Since last week you will hear and read in every type of media that the economy is going to get better ahead. Yes it will, I am counting on it. Just be prepared to take profit and close positions.
I leave you with a statement in an article by BoeckhInvestmentLetter which i like very much:
Eventhough we have not reached market tops, we are quite close. I think DowJones Industrial average is a better indicator of global market cycles than S&P500, Nasdaq or other indices. Of course our very own STI can tell a different story but there is a high correlation between the two.
On first look, you might say the DJIA is moving perfectly between two parallel lines but the bottom in Sep'2002 does not touch uptrending line. Another fact is that the bottom in Feb 2009 was actually lower than Sep 2002, which lets some people believe that we have been in a bear market since 2000. I however, do not think technical analysis takes into account all the things that have changed. We have not taken into account how the index NOW has more components than it did 20 years ago, the revolution of the internet and increase in accessability to trade the market. All these things add to the volatility equation.
What has happened since 1992? We have seen internet bubble and housing bubble. What has allowed for these bubbles to form? Ever since 2000, the central bank's policy has only delayed an eventual bottoming of the stock market. But i am not going to complain about that because it has made many, including myself, to get a decent return from investments.
Recent activities in the stock market and other asset classes is sending a clear signal that bubbles are forming everywhere mainly due to loose printing of money and low interest rates. Many people are quick to forget how often central bank policies have backfired throughout history, as they try to artificially quell inflation. Central bank policies have only three achievements throughout history:
1. Making a few successful traders, filthy rich over a short period of time >>> suddenly they become guru's and start conducting seminars and writing books.
2. Ensure Banks make more money, and also making the wealthy eventually wealthier
3. Eventually failing and sending the world into turmoil
What is happening recently? You must have seen Twitter jumping almost 73% on its IPO debut appearance. Everybody is probably thinking, hey i want a slice of that pie also. But did you stop and think about the business of twitter? How are they able to generate income through advertisements alone? I guess there will always be followers who will buy into the hype but i do not think its a sustainable business model, same goes for Facebook. Another internet bubble in the making perhaps.
In Asia, we see bigger bubbles forming across all asset classes. Look at the Indian stock market which has reached record highs over the past week despite all the problems and massive devaluation of its currency. Its definitely speculator's market, with no fundamentals. Look at the chart below for SENSEX, where is the supporting line for their post 2004 rally?
Housing markets in Singapore, Hong Kong, China and Australia are all in a bubble.
Australian housing market has been on an uptrend since the 1950s and is one of the world biggest housing bubble. Now Aussies are being allowed to use their "superannuation funds" as collateral to buy residential properties, reflating their bubble again. Look at the charts below:
So just beware of things to come. It is not going to get easier. Central banks around the world are clouded by their hubris, endlessly printing money and stretching without contraints. Bear in mind, our financial system as it stands today has a very short history compared to the thousands of years of written history. No body is sure how the future will play out. But i do know for sure, increasing asset price volatility is here to stay.
The best defense would be to:
1. Diversify your assets (Stocks, Commodities, Property etc.)
2. Don't take on "bad" debt. (read Robert Kiyosaki's Rich Dad Poor Dad, in case you are not sure what is good debt and bad debt.)
3. Avoid hyped up IPOs (which gets undue media attention)
4. Hold some cash reserve (SGD is still one of the best in the world)
Since last week you will hear and read in every type of media that the economy is going to get better ahead. Yes it will, I am counting on it. Just be prepared to take profit and close positions.
I leave you with a statement in an article by BoeckhInvestmentLetter which i like very much:
"The fragile state of the economy and financial system will continue to require inflation of money and credit, heavy government intrusion into the private sector, and frequent resorting to subsidies and support programs. This will continue to distort relative prices of labor, goods, services, and assets. It will sustain the economy in an artificial state and will compound instability and make it impossible to understand what is real and what is not."
Friday, 8 November 2013
Be a Dividend Investor
A dividend investors goal should be to generate a increasing stream of sustainanle dividend income, through careful selection of dividend growth stocks. Their investment plan must not be dependant on daily market fluctuations. I am not being overconfident but a dividend investor must be able to say confidently that "daily fluctuations have no bearing on my investment plan" because i have bought this stock at a great discount and will keep building on it for the next 10 or 20 years (through 2-3 market cycles).
Dividend investors out there, do not worry because most of your stocks will keep sending you dividends quarterly or annually (as long as the company is well managed, increasing in profitability year after year. What is most important is to focus on quality dividend stocks and purchase them at attractive valuations. In Singapore's short history, there are very few stocks that i can think of which have actually raised their distributions for at least ten consequtive years and may continue to do so for the next ten years.
Companies like Singtel pay out dividends regularly, and it has increased over the past 11 years. They actually are a bit unpredictible because in 2003 and 2009, there was no increase. While on some years, you would get Special dividends, which is awesome.
Take away the special dividends and other distributions and just look at Interim/Final dividends over the last 11 years and take the average:
2002 >>> 2013
5.5c >>>> 16.8c (dividends increased average 10.8% annually)
Which is not bad right?
As dividend investors, we should try and avoid unpredictability. I firmly believe that a strong management team which focuses on consistently sharing a portion of the profits with investors in the form of dividends will continue doing so, as long as the business is able to support it. Dividend Ranking website is pretty good to do the research on dividend history:
http://www.dividendsranking.com/index.php
I pulled this one for KeppelCorp from the above website:
There are of course another part of the dividend equation. In Singapore you can invest in REITs or Business trusts which promise you regular dividends (90% payout for REITs). But REITs are not the same as company stocks. They did not promise an increase in dividends over time, just that 90% of the profits will be payed out, which means if they profit less in the particular year, you get less. Obviously. So there is the risk of unpredictability.
You know i wish investing in dividend stocks could be so easy that you can just buy it and close your eyes. But you cant do that. Investors need to periodically monitor the financial health of their stocks. It should not be very complicated once you have done initial background research on the business and shareholding structure. Fundamentals of the company do not change overnight. Singtel will most likely be in the telecom business the next 10 or 20 years. Keep an eye out for news related to the particular stock such as mergers and acquisitions, that could prove very profitable or spell disaster in the making.
The bottom line is this: Market fluctuations should not scare intelligent dividend investors, instead it should be used as opportunities to build on your portfolio or trim off some profit. Steep drop in prices for dividend paying stocks provide excellent entry points for long term wealth accumulation. Personal note, Watch out for these in the next crash: Singtel, Singpost KeppelCorp, Jardine related stocks or if interested overseas, Coca cola; Colgate; Procter & Gamble; Exxonmobil; Kimberly Clark; Unilever; Merck & Co; Sanofi Aventis; Eli Lilly; Johnson & Johnson. If you noticed, Healthcare stocks have pretty good dividend payout rates but they are slow growth stocks.
Dividend investors out there, do not worry because most of your stocks will keep sending you dividends quarterly or annually (as long as the company is well managed, increasing in profitability year after year. What is most important is to focus on quality dividend stocks and purchase them at attractive valuations. In Singapore's short history, there are very few stocks that i can think of which have actually raised their distributions for at least ten consequtive years and may continue to do so for the next ten years.
Companies like Singtel pay out dividends regularly, and it has increased over the past 11 years. They actually are a bit unpredictible because in 2003 and 2009, there was no increase. While on some years, you would get Special dividends, which is awesome.
Take away the special dividends and other distributions and just look at Interim/Final dividends over the last 11 years and take the average:
2002 >>> 2013
5.5c >>>> 16.8c (dividends increased average 10.8% annually)
Which is not bad right?
As dividend investors, we should try and avoid unpredictability. I firmly believe that a strong management team which focuses on consistently sharing a portion of the profits with investors in the form of dividends will continue doing so, as long as the business is able to support it. Dividend Ranking website is pretty good to do the research on dividend history:
http://www.dividendsranking.com/index.php
I pulled this one for KeppelCorp from the above website:
There are of course another part of the dividend equation. In Singapore you can invest in REITs or Business trusts which promise you regular dividends (90% payout for REITs). But REITs are not the same as company stocks. They did not promise an increase in dividends over time, just that 90% of the profits will be payed out, which means if they profit less in the particular year, you get less. Obviously. So there is the risk of unpredictability.
You know i wish investing in dividend stocks could be so easy that you can just buy it and close your eyes. But you cant do that. Investors need to periodically monitor the financial health of their stocks. It should not be very complicated once you have done initial background research on the business and shareholding structure. Fundamentals of the company do not change overnight. Singtel will most likely be in the telecom business the next 10 or 20 years. Keep an eye out for news related to the particular stock such as mergers and acquisitions, that could prove very profitable or spell disaster in the making.
The bottom line is this: Market fluctuations should not scare intelligent dividend investors, instead it should be used as opportunities to build on your portfolio or trim off some profit. Steep drop in prices for dividend paying stocks provide excellent entry points for long term wealth accumulation. Personal note, Watch out for these in the next crash: Singtel, Singpost KeppelCorp, Jardine related stocks or if interested overseas, Coca cola; Colgate; Procter & Gamble; Exxonmobil; Kimberly Clark; Unilever; Merck & Co; Sanofi Aventis; Eli Lilly; Johnson & Johnson. If you noticed, Healthcare stocks have pretty good dividend payout rates but they are slow growth stocks.
Saturday, 2 November 2013
Genting Singapore 2013
I have a small amount invested in Genting. Currently wondering if it will be good to hold onto or sell and run. Looking at the graph below, I can only conclude one important thing. It has been very fiercely speculated in the past especially since the opening or Resort World Sentosa. One thing is for sure, they have been overbought in the past, they still remain overbought. Technical analysis proves nothing significant as there are no good supporting lines. Performing a Fibo retracement over the longest period available will show that the chart has bounced from the 50% retracement level. It would seem that $1.25 is a strong support price. However, the bottom has not been established for this great bull run. My exit price shall be $1.65 for two main reasons. Dont want to be too greedy and I believe it is in a short term down trend in search for a bottom.
Friday, 1 November 2013
One more bullet for Hyflux
It seems like ages ago when i initially bought Hyflux. It was a rookie mistake; I was trying to catch a falling knife, cut myself and still not recovered fully. Having bought equal amounts at three intervals back in 2011, I have been sitting on my hands throughout 2012. Still hoping that it will turnaround one day.
After firing 3 shots, I am running out of bullets to spare for this counter. I only have 1 last shot left. This is a perfect example of how to break up your investments into 4 equal portions. Buy equal amounts at every 25% drop in value. However I could not do this blindly without technical analysis and/or without believing that the company have potential for future growth. Tech analysis will show me how to spend my last bullet, see below:
From the chart, you can see a beautiful supporting uptrend line since 2001 to now. The question is whether the price now ($1.17) is going to respect this trendline. Since it has bounced twice from hitting this trendline, I can conclude for myself that there is higher chance of bouncing from this trendline once again. My risk of exposure is greatly reduced. My last bullet will lower my buy price to $1.50 region. It has taken me 2.5 years to come to this point. One of my worst performing shares in my portfolio (always been in the red).
It does not take a rocket scientist to see that current price levels seems to be well supported.
ON the positive side: Dividends collected from this counter comes to 4.38% over the last 2 years.(2.1% annually)
Also things are looking good as they have finished the largest desalination plant in Singapore this year. Perhaps they will get more projects in the Middle East and China. There is one thing i know for sure, water is vital for life, we will face more shortages in water supply in the future. Therefor any company that is in this sector has potential for growth as long as they are well managed and reputable. To me, Hyflux fits the bill.
After firing 3 shots, I am running out of bullets to spare for this counter. I only have 1 last shot left. This is a perfect example of how to break up your investments into 4 equal portions. Buy equal amounts at every 25% drop in value. However I could not do this blindly without technical analysis and/or without believing that the company have potential for future growth. Tech analysis will show me how to spend my last bullet, see below:
From the chart, you can see a beautiful supporting uptrend line since 2001 to now. The question is whether the price now ($1.17) is going to respect this trendline. Since it has bounced twice from hitting this trendline, I can conclude for myself that there is higher chance of bouncing from this trendline once again. My risk of exposure is greatly reduced. My last bullet will lower my buy price to $1.50 region. It has taken me 2.5 years to come to this point. One of my worst performing shares in my portfolio (always been in the red).
It does not take a rocket scientist to see that current price levels seems to be well supported.
ON the positive side: Dividends collected from this counter comes to 4.38% over the last 2 years.(2.1% annually)
Also things are looking good as they have finished the largest desalination plant in Singapore this year. Perhaps they will get more projects in the Middle East and China. There is one thing i know for sure, water is vital for life, we will face more shortages in water supply in the future. Therefor any company that is in this sector has potential for growth as long as they are well managed and reputable. To me, Hyflux fits the bill.
Friday, 18 October 2013
Far East Hospitality REIT
Are you surprised that the debt ceiling has been raised further? I am certainly not.
The last quarter of the year has begun, everything is in full swing, an exciting time for people who are just coming back to the markets.
I could have held on to my capital a little longer as the ongoing US government shutdown continued to bring the broader market down and with it many high quality stocks. However i chose to ignore the noise and buy on fundamental strength. Having a vision for the long-term is very important in investing in equities. Build on your portfolio when things are looking down, sit back and relax as people rush into the markets because you have already taken positions.
For example, I have been buying more of Far East Hospitality REITs and CACHE REIT when they were down. My average buy price has come down quite a bit. Fundamentally FarEast is strong but still quite RISKY, technically speaking.
As it is with all recent IPOs, we cannot really judge the fair market value. However we know that there is support at IPO price of $0.93 and more recenly $0.84 (recent bottom). The problem is we do not know how low it can go. What i do know is that Far East is a great organisation and proper management and their property portfolio is strong. If its share price is a true reflection of how hotels and service residences perform during end of year tourism spikes, I am confident that its share price will definitely test resistance levels of $0.96. That is a critical resistance level to cross if the trend is going to reverse. Otherwise, we may be looking at a downward trend without a significant bottom.
The last quarter of the year has begun, everything is in full swing, an exciting time for people who are just coming back to the markets.
I could have held on to my capital a little longer as the ongoing US government shutdown continued to bring the broader market down and with it many high quality stocks. However i chose to ignore the noise and buy on fundamental strength. Having a vision for the long-term is very important in investing in equities. Build on your portfolio when things are looking down, sit back and relax as people rush into the markets because you have already taken positions.
For example, I have been buying more of Far East Hospitality REITs and CACHE REIT when they were down. My average buy price has come down quite a bit. Fundamentally FarEast is strong but still quite RISKY, technically speaking.
As it is with all recent IPOs, we cannot really judge the fair market value. However we know that there is support at IPO price of $0.93 and more recenly $0.84 (recent bottom). The problem is we do not know how low it can go. What i do know is that Far East is a great organisation and proper management and their property portfolio is strong. If its share price is a true reflection of how hotels and service residences perform during end of year tourism spikes, I am confident that its share price will definitely test resistance levels of $0.96. That is a critical resistance level to cross if the trend is going to reverse. Otherwise, we may be looking at a downward trend without a significant bottom.
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