Sunday, September 16, 2018

From Nifty Fifty to Favorite Five

Date: 2018-09-17
Source: Supermoney, Internet info

Those final two years of the bubble reflected a subtle shift from the Go-Go era to the “Favorite Fifty” era. But that metamorphosis didn’t help the other, more conservative, equity funds. Why? Because as the bubble mutated from generally smaller concept stocks to large, established companies—“the great companies” epitomized in the Rochester portfolio, sometimes called the “Favorite Fifty,” sometimes the “Vestal Virgins”—the stock prices of these companies, too, lost touch with the underlying economic reality, trading at price-earnings multiples that, as it was said, “discounted not only the future, but the hereafter. 
But as 1973 began, the game ended. 
And so, on September 24, 1974, out of all the hyperbole and madness of the Go-Go era and the
Favorite Fifty era, and the travail of the great crash that followed, came the creation of the Vanguard Group of Investment Companies.

John C. Bogle, Jan 11, 2006
Forward to "Supermoney"(Adam Smith)

  • FAANG: Facebook, Apple, Amazon, Netflix, Google
  • FAAAM: Facebook, Alphabet(Google), Amazon, Apple, Microsoft

Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG) are the five technology giants trading publicly in the market today, as of 2017. Wall Street grouped these companies into one acronym to capture the collective impact that these companies have on the markets. As of Mar. 20, 2018, the market capitalization of these companies summed up to $472.38B + $760.36B + $888.66B + $136.92B + $757.54B = $3.015 trillion.

Many shall be restored that now are fallen and many shall fall that now are in honor.
~Horace-Ars Poetica

Wednesday, August 1, 2018

Nirvana (凤凰涅磐)

Date: Aug 1st, 2018

This is a followup blog on my July Updates.

In that post, I listed my XIRR since 1999(initial investment), and from 2015(resumed SG investment), the relative good result from 2015 is rather short termed, and is probably due mainly to a) I got in some sizeable position at a relatively depressed SG market in 2016, and b) an improved stock investment skill after many years of lessons learnt in CN/SG market.

I made many mistakes in SG stock investment, brought and sold close to 80 SG counters since D1. Here is a record of my money losing counters, most of which I believe were delisted. The only saving grace is that majority of those were brought and sold before 2005 when I was still a green horn, except QAF which was done in 2017 and I had since then admitted my ignorance and closed that position.

Realized losses in SG stock market

My aim is to further improve my XIRR, to reach 8%~10% in SG. While it seems quite achievable in CN stock market by nominal value given a flux of money supply and higher inflation rate over in mainland, it looks a lot challenging in a more matured economy.

Jack Ma once said: "梦想总是要有的,万一实现了呢".

Tuesday, July 31, 2018

July Updates

  1. On Jul 5th, 2018 evening, Government announced new property cooling measures (the 9th of it?) by raising ABSD(5% extra) and tighten loan limit(LTV) to cool the SG property market.
  2. My stock portfolio's value dropped more than that 5% (ABSD) adjustment on the  next day market opening, contributed by sharp decrease of price quoted on counters, such as: Capitaland, Guocoland and Singtel, as well as STI ETF. Citydev once dropped by almost 20% on Jul 6th.
  3. Koufu IPO(0.63 per piece), applied and got allocated some lots, sold too earlier even though I could have hold it a bit longer(not because its price run-up these few days).
  4. Calculated my SG stock investment XIRR after recent GIC/Temasek result announcement.
  • SGP GDP 1999, 85~86b USD
  • SGP GDP 2017, 324b USD 
  • CAGR: 7.23%

  • STI 1999-07, 2181 (initial investment)
  • STI 2018-07-31, 3319
  • Annualized: 2.22%
  • My XIRR: 5.3%

  • STI 2015-05, 3392 (resume investment)
  • XIRR:  11.6%
Just some quick updates to keep own record.

Wednesday, June 20, 2018

Sinostar Pec (C9Q.SI)

Date: 2018-06-20

I'm a Sinostar Pec shareholder since I came back to Singapore, and have been holding it for 2 years.

I picked this counter based on Ben Graham's net net value investing approach(Fundamentalism: 原教旨主义的 ) and started my initial position when it was $0.09.

It gives me some fond memory and good return after I divested part of my holdings to lower my cost.

I recently notice the counter has turned a bit active with a couple of SGX announcements, showing its CEO Mr. Li Xiang Ping's buying the shares from mid of Jun, average $0.17~0.19~0.20.

But, why didn't he do that earlier when the price was much more depressed?

I'm happy to see the price inching up, but I have no plan to load or reduce my current position.

Caveat: this blog is not a suggestion to buy or sell Sinostar Pec.

Sunday, June 17, 2018

Astrea IV (RMRB.SI)

Date: 2018-06-18

Sold my Astrea IV allocation today.

Par: $100
Coupon: 4.35%
Payment interval: semi-annually
Maturity: 5y (soft, callable)/10y (hard, 0.5% step up)
Subscription fee: $2

Calc formula:
            PV = C/(1 + r) 1 + C/(1 + r) 2 + . . . + C/(1 + r) Y + B/(1 + r) Y

  • PV is the price of a bond,
  • C is the periodic coupon payment,
  • r is the yield to maturity (YTM) of a bond,
  • B is the par value or face value of a bond,
  • Y is the number of years to maturity

A quick Excel formula is Yield function
= Yield (Today(), Date(2023,6,14), 4.35%, Price, 100, 2)

鸡肋(in Chinese Pin ying: Ji1 Lei4): 食之无味, 弃之可惜.

  • tasteless when eaten but a pity to throw away
  • can't hurt you, but can't help you

Sold it at YTM=3.80%.

Pocket some petty cash, that's it. The end.

Tuesday, May 15, 2018

Monday, April 9, 2018

ComfortDelGro (C52.SI)

Data source: from various internet sites, such as Yahoo!, shareinvestors.

ComfortDelGro is a local favorite. Writing anything on it will likely attract some strong objections from either side of the camp.

A few of local bloggers which I followed, in this year, have loaded with this counter upon its recent price weakness. It got me interested too, but to predict future price movement is always a difficult thing, even if not unachievable task. (用中国话来说,是一个容易“被打脸”的事情)

I didn't read all its annual reports before putting down the following analysis, so the assessment is purely mathematical, without a deep business understanding of its competitive environment, future aspect, market price improvement initiatives, or mgmt. effort on unlocking values for shareholders.

I just applied some simple(similar) rules taught by the 'master', from what I recently read.

Financial Info of ComfortDelGro for last decade
ComfortDelGro business is fairly consistent,easy to analyze.

Its revenue is growing at an annualized pace of 2~3%, by observing the history record, its revenue seems increased every 3 years, then kept there for a while, then got another jump, probably related to taxi fare adjustment allowed by gov every few years.

Given the control of government on taxi tariff level, balancing of its profitability vs. general public's affordability, I think this pattern will continue. With the current road traffic loading, as well as general public's ridership behavior will not change drastically, the revenue projection of this counter can be estimated with certain level of confidence.

Its SG&A cost is quite consistently at 4% in recent years, I don't think it will swing too much either in the near future.

Over 10-y average, NI % is 7.1%, ROE 12~13%;  FCF/NP is ~90%, meaning the quality of earning is pretty real. Interest coverage is 20 times, it is a safe company in term of financial health.

Over a 10-y horizon, it earned 2.6B net profit, 2.3B FCF in aggregation: or 260m$ NP, 230m FCF annually (on average).

I ask myself:
  • Here is a business which is allowed to adjust its price level at 2~3% annually(on average), if I was a potential buyer of such business with 250k profit per annum , maybe I'm willing to pay 2m~2.5m? what about 4.5m asking price, is that too high or too low? 
  • Ok, maybe increase a bit, a business offer 300k profit per annum, is 3.6m(to acquire it w/o even counting all the debts yet) a reasonable price tag?

Well, may be yes, may be not:
  1. Because its dividend yield is 5%(2018/04/09, based on Yahoo! Finance info), I'm satisfied w/ this, since it is much better than SGD time deposit
  2. Because it offers ROE 12% @ PB 1.72 at current $2.09/piece, much better than a lot of other SG counters, it is not priced unreasonably inflated
  3. Because it has very few competitors? Its business volume is more or less guaranteed for foreseeable future
Your judgement?

To me, even it dropped from $2.7+ in Apr 2017, to $2 now, it doesn't look like a bargain as it appeared at the first sight.
Caveats, with its gov-link background, similar to SPH etc, it might have a lot of hidden gems(assets), which cannot be simply analyzed by just putting up such a summary table, a serious investor has to thoroughly review its whole potential by reading each year's report and analyst reports.

For me, as a full time employee in other business lines, this is enough time spent on this counter, at least to give a pass, even if those gems can be found later, I'll, at least for now, don't feel being too tempted.

- M&A(w/ internet ride hailing company)?
- AI driver?

P.S. It is very time consuming to keep on blogging. I really admire the persistence of some of the well-know SG bloggers.