Sunday, 30 August 2015

A bloodshed August

August turned out to be a month of "turmoil" for my SRS and IPO accounts and the month for paying school fees to Mr. Market. 

Let's start with my SRS account and the transactions. 

Starburst 

I have been wanting to sell Starburst, especially so after its Q2 results were released, where it had another quarter of declining profits.

I left a standing order to sell at 40c or better before I travelled for a weeklong assignment in different time zone. The only thing positive from the trip was that I took the A380 that has the SG50 flag ^_^


Alas, the trade was never done due to low liquidity even though i shifted my sell order down a few times. It kept "meandering" down slowly and closed below 30c. Urrgh...

I took a very painful decision to cut loss on this position and moved on. Sigh. 

There are so many lessons to be learnt from this investment:

• the initial investment thesis was flawed. It wasn't a fundamentally strong stock and it wasn't for recurring passive income either.  The company's founders probably cashed in when its earnings peaked last year - lesson learnt. Need to do more due diligence on management and fundamentals. Stick to companies with proven management that shows increasing profitability. 

• I should have cut loss early when Q1 seriously underperformed. Under normal circumstances, I would have cut loss when a key support gives way. I deviate from my usual discipline and now have to pay a price for it. *Ouch :( - lesson learnt. Be disciplined in risk management. Don't let the losses ballooned beyond control. 

• The liquidity of the stock is pretty bad. This creates a wide bid-ask spread whenever a crisis happens. Probably the small cap nature of the stock doesn't help. - lesson learnt. Stick to bigger cap or stocks with better liquidity. 

Capitamall Trust

The REITs have fallen to a level which I felt attractive and has priced in a rate increase. I shortlisted 4 REITs which are trading either at book or below book value and have a stable yield of more than 5% on last Thursday before market opens. I am happy to hold on those REITs for passive income in any case should prices stabilize. 


All gapped up above my order price on opening and I ended only buying 10,000 shares of Capitmall Trust at 1.905 :(

Let's see if I can find any more interesting stocks to add in September. 
 
UOB 

I also bought 1,000 shares of UOB for wifey's SRS account at 19.27. This is a beta play. I am betting on a short term rebound in STI. 

Thoughts for SRS

The loss on Starburst is a painful one. It is all about the lack of discipline, wrong choice of stock and being complacent and I paid the price

Another thought that went through my mind was whether a pure equity portfolio is a right one. If I allocate a % to bonds, will it meet my objective of creating passive income from my portfolio with less volatility?

Should I change the strategy and style? 

The losses from Sembcorp and Starburst made me rethink my strategy on whether I should be a more active and responsive investor and whether I should allocate part of the portfolio to less volatile instruments like corporate bonds. 

However, unless the bond market develops further, there will be a lack of choices for bonds. 

I have no answers to my own questions above but it is a path that I need to spend more time pondering. 

IPO

I also lost a sum of money on the IPO of CMC Infocomm. I had previously told my broker that I don't like the fundamentals and don't want the placement shares. He assured me that the stock is well received and has the support of shareholders and against my own better judgment, I took the shares. 

Well, the rest is history. The stock tanked against a bearish backdrop and once again, the lack of liquidity resulted in a wide bid ask spread. 

Frankly, I am happy to live and die by the market. If I made a wrong decision, I am fine to "live with the consequences". I am also happy that I didn't let my position affect my IPO ratings. :) 

What i am more "upset" with is the subsequent reluctance to let me cut loss or sell. Although it may have been out of good intentions, they turned out to be disastrous and contributed to the August bloodshed. 

Ok that is all for a Sunday posting. Enough of my ramblings and time to stay focus. 

Good luck to your own pursuit of financial freedom. :)

Saturday, 1 August 2015

Sembcorp - What could I have done better?

I cut loss on my wife's SRS position in Sembcorp on Wednesday when the $3.80 support gave way.

It is always good to do a recap on my investments to see what went right and what went wrong.

Let's do it on the pictorial view. Easier for everyone.


I bought the position in March with a stipulated cut loss around ~$4 thereabouts. The post is here.

A few mistakes made that i can usually avoid for trading but can't seemed to be able to avoid it for a longer term holding position.
  1. Letting a profit of 9% turned into a loss. In trading - i would be moving my stops up pretty closely and it will take me out automatically.
  2. I never cut loss when it broke $4. Again, violating my own stipulated principles ^_^
  3. Finally did it at when $3.80 gives way realizing a loss of around ~15%
Anyway this is my style of investing. I will gladly admit my mistakes and moved on. Let me see how i can further improved on my SRS investments.

The drop in oil continued to have an adverse impact on sentiments and fundamentals on O&G stocks.


Waiting for the crash to come?

Image result for waiting for durians to drop

On a related note - I injected $12,750 into my own SRS account in July. I am done with the SRS contribution for this year.

Many stocks on SGX are on a cheap sale now and on a strong downtrend. The cash of ~$115k will come in useful when the crash comes. 

Happy SRSing

Sunday, 26 July 2015

Keppel DC REIT

Keppel DC REIT announced a decent set of maiden results that exceeded its forecast. Announcement is here.


I like the low leverage of 26.4% and there is much headway to take on debt should the need arises. It also has a long lease period of 7.2 years.

The detailed results is below.


I also like the fact that they purchase properties from Macquarie Telecom and build in annual rental escalations in the agreements.
This will allow for future upside growth to the DPU



I think the outlook remains healthy as cloud computing and data demand continue to grow healthily.

My portfolio of 15,000 shares in wife's SRS account will yield about $534 and be paid on 28 August.

Happy SRSing

Friday, 17 July 2015

SRS Portfolio - 30 June 2015

No action in June

The SRS portfolio continue to see no action in June. 

The statements are below and the portfolio is showing some unrealized losses. 

The only income received is the interest. I need to "buck" up on this account and start to add some positions when the opportunity arises. 

Investment Strategy

As a reminder to myself, I am supposed to add only long term positions. It should comprise of dividend stocks or REITs. The minimum yield should be at least 3% for stocks and at least 5% for REITs! 

Happy SRSing.



Saturday, 27 June 2015

SRS Portfolio - 31 May 2015

Apologies for not posting for a while. Had been very busy closing a transaction while trying to get a holiday in between. 


May received dividend income from two companies. $275 from Semb Corp and $1,500 from UMS Holdings. I really like the dividend from UMS, need to find more such stocks and add to my passive income portfolio regularly. 

I haven't had the time to monitor or add new positions. Will try to do some serious thinking once i have the luxury of time. Fingers crossed but hopefully will have some down time soon!


My portfolio statements enclosed. The biggest unrealized loss comes from Starburst Holdings. I will hold it for one a while more and see if financial performances improve. 

Happy SRSing



Wednesday, 13 May 2015

Starburst just went burst today....

It was pretty ironic.

The stock that i wanted to buy but missed out, IPS Securex, ran up like crazy from 49c and the one that i managed to get, Starburst, went down the gutters after announcing a very poor set of Q1 results and now i am sitting on a unrealised loss of 3.8k within one day... ouch!! The stock chart looked super ugly

This is the perils of investing in small cap stocks with lumpy earnings..... Although the Company took great pains to explain that Q2 will get some revenue but i am not sure if it will be as good as Q2 last year...

I am so so so so upset with myself.... :-( 

I will need to re-look at how i select stocks for long term investing but first i need to find the time....

Saturday, 9 May 2015

Starburst Holdings Limited



I added 50,000 lots of Starburst Holdings to my SRS account on Thursday at $0.555 each. I first covered this Company when it IPO last year and my article is here.

I will not spend too much time writing about the Company as you can find the annual report here.

The Company specializes in the design and engineering of fire-arms training facilities in SEA and the Middle East. The Company has been growing rapidly for the last three years and net profit hits S$13.159m in FY2014.

The Company has been generating impressive returns for its shareholders as seen by the ROE and ROA


and more importantly, the Company has little debt on its balance sheet and trading at a valuation of around 9.4x PE


The shares are quite tightly controlled with only 20% free float and each founder holding 40% of the Company.


If you want some out-dated research report, DBS and CIMB issued reports in Sep and Aug last year. The links are here and here respectively. While i like the uniqueness of this Company, my concerns will be the lumpiness of the contracts and it is good that they are getting recurring revenue now from range maintenance etc.

This shares hardly trades so if you want to cut loss and get out, it can be an issue. This is a medium term hold for me of about 2-3 years. Hopefully the Company will not disappoint and continues to fire at all cylinders.

Happy firing!


Related Posts Plugin for WordPress, Blogger...

Google Analytics