Sunday, 27 January 2013

Taking Ownership!

The first step towards financial freedom is taking ownership.

You have to take ownership of your own investment decisions.

One of the goals which i set for myself from 2013 onwards is to trade less and invest more.  In other words, i aim to cut down the capital which i put into trading and channel them into investing. 

I have always been taking ownership of my own investment decisions, however, to progress in this financial freedom game, I also want to invest into businesses which i would like to own. In simple terms, it means investing like a business owner.

If you remember one of my post, i was actually contemplating an investment into JB Foods Limited in Sep 2012 but i never act on that idea. I have to take 'ownership' of my lack of action. Obviously Sam Goi (the Popiah King), being a savy investor see a good business in JB Foods and bought a 16.67% stake for 27c each via placement last week.


The market reacted positive and sent the stock to an all time high. Sam Goi is one solid investor and with him as a strategic buyer, i am sure you can see more doors opening for JB Foods. In fact one possibility could even be JB Foods becoming a supplier to SuperGroup which he has a significant stake as well. Perhaps a best selling cocoa 3-in-1 in the pipeline?

It brings back memories of an upset anonymous reader who left sore comments about JB Foods when it was first traded.I think this reader was probably trading contra and is not taking ownership of his own decisions. If he has held on to now, he will be back in the black since last Friday. I am against contra trading and i think it is one of the fastest way of losing money and making your broker rich.

I have a reader who read my post in September and bought into JB Foods at 31c. Unfortunately, i think she sold it on Thursday morning, probably around 36c (for a 16% gain) but leaving quite a fair bit on the table (another 7c or 23%) as of last friday. The next question then is, should you sell when the price "gap up"? 

The answer to this lies in your time frame and whether the stock has reached your intrinsic value. The value i first mentioned in my Singapore blog was 48c-60c if you still remember it but of course, i have not done further work on the values since that write up. 

As mentioned i am trying to invest more and trade less and that means having a longer time horizon (holding period) for my stocks, especially those stocks that i purchase in my SRS account (which i am sharing with you real time).

I was at the Investment Summit seminar today. If you want to know some of the stocks which was being mentioned, you can gain access via the section "exclusive to friends" on my facebook page. I will update that page again if i attend the seminar tomorrow (but most probably will not be able to attend the full session).

It is by no means a recommendation to buy those stocks now. You will have to do your own homework and take ownership of your own investment decisions and your financial life!

Even Gaylin has reached my upper end  'target of 57.5c'. My IPO post was here. Perhaps the market is really getting too hot? You will have to decide for yourself if it is time for you to exit if the valuation is too rich.


Take ownership today and wish you all the success in your pursuit of financial freedom.

Tuesday, 22 January 2013

The king and I

Kingsmen

13082011544 Source of picture here.

I couldn't believe my eyes when i saw the price on Kingsmen last friday. It was flashing to me at 70c. I contemplate if i should add 8 lots to my SRS account as I have been monitoring this counter for a while.

A check with SGX announcement seemed to indicate that there was some inappropriate payments but the amount is not material. I decided that i can afford to wait for a few days till the selling subside.

One moment of hesitation, *blink* and the opportunity to take the king hostage disappeared as well. 


Dutyfree

I have been analyzing Dutyfree last week. I quite like the stock and the business in which it is in but unfortunately, the share buyback is helping to boost the share price and the valuation is not cheap at current price. One way will be to wait for the price to drop to around the 30-33c region and that could happen when the Company enters the "black-out" period. 

According to SGX best practise, the blackout period is "two weeks before the release of quarterly results" and "one month before the release of Company's full year results". The Company announced its full year results on 28 April 2012 and if the same logic is applied, the blackout period will probably be from 29 March 2013 to 28 April 2013. 

Perhaps i will revisit this counter again closer to that period and see if the share price at that point in time is worth investing.



Expectation versus Reality - Ezra

Ezra presents a very interesting picture. The stock has ran up quite a bit due to high expectations of its results and when investors don't like what they 'see and hear', the prices came crashing down as well.


Cash and Crash

I have quite a fair bit of money to deploy from the SRS account. As of 31 Dec, the cash stands at $61,150. However, i can't find many compelling reasons to buy for long term. I would prefer to see a meaningful correction before deploying the cash. 

Happy SRSing. Feel free to drop me some ideas if you have any suggestions on the stocks which i should add to my SRS portfolio.

Thursday, 17 January 2013

JPM Investment Strategy and a good website to share.

Please find enclosed the 2013 strategy by JP Morgan.

I stumbled on a good website where i was researching on a stock today.  The website is Next Insight and it even had a Q&A session with Logistic Holdings, which will be listed on Catalist tomorrow and my write up on the IPO is here.

I will share with you the stock which i am researching on later and whether if it is a stock which i will add to my SRS account.

Happy bedtime reading.

Reading is to the mind what exercise is to the body." – Richard Steele

Wednesday, 16 January 2013

Tortoise and the Hare

Here is the DMG Singapore Jan 2013 strategy and the UOBKH 2013 strategy for your bedtime reading.



I am sure you have heard the story of the Tortoise and the Hare. In the end the Tortoise won the race by being "slow and steady".

If I may add on the analogy, the Tortoise is like Investing and the Hare is like trading. Why do i say that?

I have mentioned in my blog that you have to know yourself and the time frame which you are in.

People who likes to trade are usually impatient. I took up trading because i want money fast. But money that comes "easy" also go away easily. You make $1,000 easily, you also spent that $1,000 easily. You forget to keep that $1,000 as equity for future "losses" and capital draw down. It is like the hare that "run quite fast" and then decided to "take a break". So you spent the $1,000 on shopping, holidays and meals. People who trade are earning an 'active income'.  Don't be mistaken, it is possible to make money from trading but it is just that you take a "higher risk" due to the bigger position and that you are constantly looking for the next trade and you are "glued" to your chair closely monitoring your position. 

People who invest slowly are like the tortoise. They take time to build up their capital slowly and in the end, they are able to build up a strong foundation where the amount of passive income they receive each month is sufficient to pay for their monthly expenses. They are able to withstand the market shocks and reach their goal of being "financial free" one day and actually finish ahead of the hare.

If you have not taken the first step towards investing, it is time to think about your future and plan for the future to create a portfolio that will allow you to retire early and you don't have to worry about the "colour" of your boss's face everyday. :)

Happy investing. It is a lifelong passion.

Saturday, 12 January 2013

SRS Portfolio as at 31 Dec 2012 & Investment Strategy 2013

Portfolio


During the month of Dec, the portfolio received the following dividends:
UMS Holdings $100
SPH Holdings $170
Interest $2.35

The portfolio also receive capital gains from Keppel Corporation and UOB Ltd.

The value of Starfish SRS portfolio as of 31 Dec 2012 was $36,865 and the cash was $61,650.87 = $98,335.87

Invested Capital = $82,875. ROI as of 31 Dec 2012 = 1.19x

Subsequent to the year-end, the value of the portfolio including cash crossed the $100k mark for the first time.

Investment Strategy 2013

After giving it much thought, i think a long term strategy of investing in dividend paying stocks is a sound one. It is able to generate passive income and yet preserve the capital. Some of the heartache will be to sell Cache, Starhub and Suntec and perhaps not buying China Merchants. However, the ability to invest in promising stocks such as Ezra and Ezion which i have missed and mentioned in Oct last year is an important one and such potential capital gains may shorten the time to "retirement" in a significant way. As such the investment focus of Starfish SRS will still be long term dividend-paying stocks with some positions in promising growth stocks and opportunities big cap trades. There is quite a huge amount of capital to be deployed in 2013 and perhaps i will increase my exposure to each position i take from the usual $5k to $10k and may consider adding to my existing positions if the price is attractive.

Effect of Compounding

The argument for compounding effect is a strong one. Assume the capital i have invested grow at 6% per annum and i reinvest the dividends. The table will look somewhat like this:


As you can see, i am "close" to the value of $98,946 at the end of 2012 but i will need to increase that value to $117,633 by end of 2013 if my "projected growth rate" is assumed to be 6%.

The sensitivity table below shows you how the portfolio will grow at the different "growth rates" at the same invested capital of $312,375.


This is why if you can grow your portfolio by 8% over a period of 30 years, you will be able to retire comfortably due to the effect of compounding. The worst to happen perhaps is to open a SRS account but not utilize the cash in the account to invest.

Happy investing.

Tuesday, 8 January 2013

"Snake" Investment Strategy

It's Maybank Kim Eng's turn to issue a 110 page investment strategy report for 2013 with 4 investment themes using a well designed "year of the snake" theme.

I will not make your life easy, you will have to read them to help you in your insomnia and i think i have shared enough reports for you to last a few days or even weeks.

Maybank 2013 Singapore Strategy.

As in all investment strategy, read them to know what the analysts and brokerage houses are thinking but take all price and valuation targets with a huge pinch of salt.

I have shared with you previously on what i think about Analysts Reports. It is good for form your own opinion on whether you want to invest or trade the companies.

Happy Investing.

Monday, 7 January 2013

More Investment Strategies

Here you go.

Three more Singapore investment strategies for your consideration.




Dividend Warrior has a good blog on dividend investing here. He can be pretty inspiring in the pursuit for financial freedom the passive way (buy and hold kind). Perhaps this is one of the smartest way. To do nothing and be passive and collect $ every few quarters and then re-invest those dividends into other dividend paying stocks. Over time, the virtuous cycle will grow bigger and bigger through compounding. The younger you start, the better it is as you have a longer investment horizon and can ride through the various cycles.

You will have to adopt a strategy that suits your work conditions, temperament and style. We all have to start somewhere and the reason for starting my blog is to "inspire" you to start your own journey (and to force me to constantly review mine). My past strategy has been a mixture of dividends and capital gains but i am thinking if i should seriously devote SRS to passive dividend investing.

I will share with you the returns on my SRS account and my thoughts on the 2013 investment strategy in the upcoming post (after i receive my December SRS statement).

Happy SRSing.


Saturday, 5 January 2013

Singapore 2013 Investment Strategy

January is usually the time where many brokerage houses come up with investment strategy reports for you to plan your investments as well as inform you the various investment themes which they favour.

Personally, I like to read strategy reports to give me a quick overview and help generate some investment ideas on where i should allocate my capital. Read these reports and form your own judgement and opinion.

The DBS 2013 strategy's link is here. I will attach more such reports if i come across strategy reports that are worth sharing.

I have not received my Dec SRS statement. I will do a short post on my thoughts of 2012 as well as share with you its "performance".

Do plan for your own investment strategy as everyone of us is unique and has different risk profiles. 

Many of us spent days and hours to plan for our holidays, shopping, work, studies but don't put in the effort to plan for their investments. A 2013 new year resolution perhaps?

Happy planning and investing. May 2013 be a fruitful year for everyone. 
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