Reflection of 2009

2009 year was a great year for my investment portfolio. I have recover my 2008 losses and earn a tidy profit in the year 2009. Some of my proudest stock pick in last year include keppeland,FSLtrust and suntecreit. I have thrown every penny i have into the stock market as i deem many stocks are trading at a ridiculous low price. It is only a pity that i do not have extra money to invest in. If not, i will be even a step closer in acheiving my lifelong goal. This also higlight an important lesson which is to always to maintain a certain level of money with you to capitalise on once in a life time opportunity.

2009 was a year when many people become fearful. There was much uncertainty about the economy and many people was fearful that they will lose their jobs. I too was also very worried about my investment portfolio which at that time was suffering from quite a big loss. But being a great fan of Warren Buffett, i turn to his words for advice. He famously mention time after time in TV interviews asking investors to be greedy when others were fearful and fearful when others were greedy. That was when i realise that i have to be greedy and buy in stocks even though there is so much uncertainty in the investing world. After my buy in, the stock market shoot up in the second half of the year which i did not see it coming. I thought there was still some time where i can accumulate undervalue stock. Nevertherless, i was greatful to have accumulate some good stock at that period of time.

Buffett's advice has once again proven to be so true and relevant in today investing world. if i have taken some advice from the so called financial experts, the result would be very much different.Ironically, my portfolio size has grown considerably till now since the onset of the financial crisis. I hope that it will still continue to grown bigger in this year and i am smart enough to spot and buy good companies at great price. There is still a long way of achieving my primary goal of retiring at 40 but i will continue to works towards in acheiving it. I am still waiting for my next breakthrough for my investment portfolio which is to include real property in it. Let hope that that day will not be far away.

Looking ahead in the year 2010, there are still many uncertainties but what is certain is that i will hold Buffett advice dearly in my heart.

The Magic of compounding with REITS

In my previous posts which is in January 4,where the market is irrationally pessimistic, I encourage my readers to be invested in Singapore REITS as the prices of these shares are very cheap. If investors who have bought REITS in between the period January and February will have make a decent gain. Going forward, i will still stick with my strategy as mention in my previous posts but will a little alteration. This time I will be investing in REITS using the money that i have collected from my past holding of reits. There will be no capital injection into my investment for now as my resources are drying. As mention in my previous posts, the two REITS that I have recommended made some money for me.I will continue to make more purchase if i will that the price is reasonable. Others REITS that i am looking now is Capitalcommercial,starhill and capitalmall. Feel Free to comment about my investing strategy and click the advertisment by nuffnang to show support for this blog. Thanks

Trading Strategy for 2009

Happy New Year to all my reader(if there is still any)It has been a while since my last post.
2008 has been a turbulence year for investors. Many have suffer financial losses and I am no exemption. In the year 2009, my focus will be on REITs which have been battered badly. Many of the REITs have reach below IPO price. I do not see any upside for REITs for the short term as prices of property and rent will continue to fall. However, when the financial crisis is over and the economy start to pick up, share price of REITs will go up. Another factor that will push the share price of REITs up is inflation. We have not seen the last of raging oil prices, and when the economy pick up oil prices might be higher than the previous pick. Therefore REITs will provide a hedge against inflation. The problem now is that we do not know when that will happen.

Some of the Reits that i have been buying
Suntec
Fcommtrust

macCookPFS-Undervaule gem

Due to the pessimism of the investor, a lot of stocks have fallen below their intrinsic value. One of them would be MacCookPSF. Net tangible asset stands at $1.02 per share while share price is trading at $0.49 which is approx 52% discount.
If dividend payout is the same as last year, dividend yield would be approx 25%. Which mean that if you hold on the stock for 4 years (assume dividend payout do not change) you would have gotten back the sum of capital invested. Only if you are willing to hold on that long

$0.49- share price as at 110808

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High Yielding stocks

High dividend stocks should form part of your portfolio and even more so when the market is volatile. Having stocks with high yield for the long term can be very rewarding. Ten year worth of dividends is not something to be ignored.

Dividend yields function as a reliable forward-looking predictors of stock prices. high dividend yield are associated with a deeply oversold market and vice versa. Eventually, the market will recognise that and the price will correct itself.

So which are the high dividend yielding stocks in the market right now.
1) Allco reits
2)Suntec reits
3)UOB kayhian
4)Gk goh

Security analysts-Should u trust them?

Why is it that some of the highly trained and well paid professionals have failed in their analyst?They will ask you to buy when the price is high and sell when the price is low. It can be attributed to four factors:
1) The influence of ramdom events
2) The productionof dubious reported earning through "creativity" accounting
3) The basic incompetence of many of the analyst.
4) The loss of the best analysts to the sale desk or potfoilio management

Asia the next superpower

Saw a article in times magazine saying that US might lose its place as a super power to Asia countries. Here are some the reasons why:

1) More Asian names in Forbes richest list

2) The biggest ferris wheel is in Asia

3) The biggest casino is in Asia

4) The tallest building is in Asia

5)The rise of China and india

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Low consumer confidence in US and record high oil prices.What you should do?

American consumers' confidence slid further in the latest week, as escalating gasoline prices and the weakening economy drove the measure near its historical low, a report showed on Tuesday. The ABC News/Washington Post Consumer Comfort Index fell to -49 in the week ended May 18
from -47 the previous week, just one point away from its all-time low of -50 hit in February 1992. The index, started 22 years ago, ranges from -100 to +100. 'Surging (gasoline) prices correlate strongly with falling confidence, and gas is up another 7 cents this week to a new high of an average US$3.79 a gallon with the holiday weekend approaching,' the news outlets said in a statement. 'The weakened economy more generally, along with the ongoing credit and housing market crises, are adding to the damage.' Earlier on Tuesday, Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP economic optimism index rose to 40.3 in May from 39.2 in April, which was the lowest in the index's history. In that gauge, a reading below 50 indicates pessimism.

Oil soared to a record above US$135 a barrel as worries about US tensions with Iran heightened speculative fever in a market driven by concerns about tight global supplies and strong demand.

Market has become more volatile and unpredictable, investors should take profit in the month of may and adopt a wait and see attitude. Or switch to more defensive stock. I believed that stock prices should fall i the coming months and investor to scoop up some bargains.

Contemplating my buy on FJBen

Current valuation for Fjben is looking quite attractive with current PE ratio standing at 6.9. Fj ben has hit a low of 0.39 from a high of 95 cent. Earning per share has been increasing steadily since 2004. And I believe that it will continue to increase in the 2 to 3 years ahead as there are many major events taking place that will attract a substantial amount of tourists to Singapore, that is beneficial to Fjben retail business.

My take on the Singapore economy

The overall economy of Singapore is growing at a strong healthy rate with last year GDP growth figure hitting 7.7%.But many economist forecast growth will slow down in between 4 to 6 percent this year due to sub prime mortgage trouble in US, and might get lower if US goes into recession. However, there is still light in the tunnel. The remaking of the Singapore story is still intact. Singapore’s transformation into a global city and its evolution into a mother of all hubs- financial/wealth management, tourism, education, healthcare, research and development are coming along nicely.
That and the development of the two integrated resorts with casinos and the Republic hosting Formula One race and Youth Olympics will set to boost the general economy of Singapore especially the tourism and retail industry.
All in all, we set to look a slower growth rate for the 2008. After two years of exuberant growth in the economy, Singapore is looking to move towards the mature growth stage in the coming years. A recession in Singapore is highly not likely in the next 2 to 3 years. What holds after the next 2 to 3 years for Singapore economy is anybody guess.

Stick with predictable earning companies in times of uncertainty

Right now we still have no idea whether US will go into a recession. However, more and more signs are signalling that US is heading towards recession. I would like to urge investors to take a cautionary appoach towards investing, invest in companies with predictable earnings. Reits and business trusts are safe haven where investors to park their money in times of uncertainty. Cheers

My Latest Buy=Allco

AllcoREITS.. It is a undervalue stock. Net tangible asset per share is twice the amount of price per share.

When US sneezes,Asia now does not catch cold

It used to be when US sneezes, Asia catches cold but now it may not be true anymore.
Asian economies have become less dependent on US economy though tot completely immune to its changes.
Asia growth remained cautiously optimistic. Asia had increase in export diversification away from the US.
For singapore, there is still growth to be seen. Order book for construction companies have been soaring. Lian Beng has just reported that its profit has increase fourfold.
Occupancy rate for hotels in Singapore has been increasing and will be higher when the integrated resorts are ready.
Outlook for retail , telecommunication, transport sectors remain optimistic.
with the recent sell down, investors can buy in when there is fear and sell when the market recover and when greed take over investors.

Oil related companies

With oil prices hitting a all time high, inveator may want to consider to invest in these oil related companies.
Blue Chips
Cosco Corporation
Keppel Corporation
SembCorp Marine
Yangzijiang
Mid-Tier
Ezra Holdings
Jaya Holdings
KS Energy
Swiber
Small Caps
Aqua-Terra
Beng Kuang
See Hup Seng
SSH Corporation
Swissco International

OIL HIT $100 PER BARRELS

With oil hitting US$100 per barrels, get ready to embrace for more bad news ahead in the year 2008.

Pulses magazine- A must have for investors

The revamped issue of Pulses is being produce by Business Times and is a must have for investors. It provide up to date and accurate company analysis,valuable market insights by experts and analysts recommendation for stocks . If you want to what is hot and what is not for year 2008. Go get a copy of Pulses

Stock market prediction in 2008

2007 has been a good year for investors, Singapore's economy has seen strong healthy growth. Also, there are many upcoming events like F1 and completion of integrated resort will push our economy to grow in years to come. However, things are not looking that good in US. Sub prime mortgage problem has taken a toll on its economy. Financial stocks has taken a beating and housing price fell to its lowest many years.
The main questions for investors in 2008 is whether Us will go into recession? I feel that US will experience a period of slow growth in next year but not recession. US election is coming next year and you seldom see US economy experiencing recession when there is election. Also there is no sign there US consumers is slowing down on its spending. As long as US is still spending, all should be fine in the year 2008. And Singapore should be able to grow wihout the hidurance of the US economy.

Happy investing
Cheers
Wishing my readers Happy New Year

Seven investor traits

Mark Sellers, founder of a Chicago-based hedge fund, argues that the best investors are born with particular psychological traits that others can never learn
By TEH HOOI LING SENIOR CORRESPONDENT

WHAT makes someone a great investor? It's something you have to be born with, said Mark Sellers, founder and managing member of Sellers Capital LLC, a long/short equity hedge fund based in Chicago. Apparently, it's not about your IQ, the education you've had, the books you've read, or the experience you've accumulated. 'If it's experience, then all the great money managers would have their best years in their 60s and 70s and 80s, and we know that's not true,' he said in a speech to a class of Harvard MBA students. Intelligence and learning are obviously necessary too, and are sources of competitive advantage for an investor, but there are structural assets some possess that cannot be copied or learnt by others. 'They have to do with psychology and psychology is hard wired into your brain. It's part of you. You can't do much to change it even if you read a lot of books on the subject,' said Mr Sellers. He said that there are seven traits great investors share that are true sources of advantage because they cannot be learned. You are either born with them or you aren't.

The seven traits are: One, the ability to buy stocks while others are panicking, and the ability to sell at a time when other investors are euphoric. 'Everyone thinks they can do this, but then when October 19, 1987, comes around and the market is crashing all around you, almost no one has the stomach to buy,' Mr Sellers said. 'When the year 1999 comes around and the market is going up almost every day, you can't bring yourself to sell, because if you do, you may fall behind your peers. 'The vast majority of the people who manage money have MBAs and high IQs and have read a lot of books. By late 1999, all these people knew with great certainty that stocks were overvalued, and yet they couldn't bring themselves to take money off the table because of the 'institutional imperative', as Buffett calls it.'

Two, the great investor has to be obsessive about playing the game and wanting to win. 'These people don't just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they're still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they're going to neutralise that risk. 'They often have a hard time with personal relationships because, though they may truly enjoy other people, they don't always give them much time. Their head is always in the clouds, dreaming about stocks. Unfortunately, you can't learn to be obsessive about something. You either are, or you aren't. And if you aren't, you can't be the next Bruce Berkowitz.' (Berkowitz was a managing director of Smith Barney and set up his fund Fairholme Capital Management in 1999. Since inception, Fairholme Fund has returned 18.7 per cent annually on average.)

The third trait of a great investor is the willingness to learn from past mistakes. 'The thing that is so hard for people and what sets some investors apart is an intense desire to learn from their own mistakes so they can avoid repeating them. Most people would much rather just move on and ignore the dumb things they've done in the past. 'I believe the term for this is 'repression'. But if you ignore mistakes without fully analysing them, you will undoubtedly make a similar mistake later in your career. And in fact, even if you do analyse them it's tough to avoid repeating the same mistakes.'

A fourth trait is an inherent sense of risk based on common sense. 'Most people know the story of Long Term Capital Management, where a team of 60 or 70 PhDs with sophisticated risk models failed to realise what, in retrospect, seemed obvious: they were dramatically overleveraged. They never stepped back and said to themselves, 'Hey, even though the computer says this is OK, does it really make sense in real life?' 'The ability to do this is not as prevalent among human beings as you might think. I believe the greatest risk control is common sense, but people fall into the habit of sleeping well at night because the computer says they should. They ignore common sense, a mistake I see repeated over and over in the investment world.'

Five, great investors have confidence in their own convictions and stick with them, even when facing criticism. 'Buffett never get into the dotcom mania, though he was being criticised publicly for ignoring technology stocks. He stuck to his guns when everyone else was abandoning the value investing ship and Barron's was publishing a picture of him on the cover with the headline 'What's Wrong, Warren?'. Of course, it worked out brilliantly for him and made Barron's look like a perfect contrary indicator.' Mr Sellers said that he is amazed at how little conviction most investors have in the stocks they buy. 'Instead of putting 20 per cent of their portfolio into a stock, as the Kelly Formula might say to do, they'll put 2 per cent into it. Mathematically, using the Kelly Formula, it can be shown that a 2 per cent position is the equivalent of betting on a stock which has only a 51 per cent chance of going up, and a 49 per cent chance of going down. Why would you waste your time even making that bet?' The Kelly Formula arose from the work of John Kelly at AT&T's Bell Labs in 1956. His original formulas dealt with the signal noise of long-distance telephone transmission. It was then adapted to calculate the optimal amount to bet on something in order to maximise the growth of one's money over the long term.

Six, it is important to have both sides of your brain working, not just the left side - the side that's good at maths and organisation. 'In business school, I met a lot of people who were incredibly smart. But those who were majoring in finance couldn't write worth a darn and had a hard time coming up with inventive ways to look at a problem,' said Mr Sellers. 'I was a little shocked at this. I later learned that some really smart people have only one side of their brains working, and that is enough to do very well in the world but not enough to be an entrepreneurial investor who thinks differently from the masses. 'On the other hand, if the right side of your brain is dominant, you probably loathe math and therefore you don't often find these people in the world of finance to begin with.' So finance people tend to be very left-brain oriented - and Mr Sellers said that that is a problem. A great investor needs to have both sides turned on, he said. 'As an investor, you need to perform calculations and have a logical investment thesis. This is your left brain working. But you also need to be able to do things such as judging a management team from subtle cues they give off. 'You need to be able to step back and take a big picture view of certain situations rather than analysing them to death. You need to have a sense of humour and humility and common sense. And most important, I believe you need to be a good writer.' He cited Warren Buffett as one of the best writers ever in the business world. 'It's not a coincidence that he's also one of the best investors of all time. If you can't write clearly, it is my opinion that you don't think very clearly,' Mr Sellers said.

And finally the most important, and rarest, trait of all: the ability to live through volatility without changing your investment thought process. This, said Mr Sellers, is almost impossible for most people to do; when the chips are down they have a terrible time not selling their stocks at a loss. They have a really hard time getting themselves to average down or to put any money into stocks at all when the market is going down. 'People don't like short-term pain even if it would result in better long-term results, he said. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. 'This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. 'But most people just can't see it that way; their brains won't let them. Their panic instinct steps in and shuts down the normal brain function.'

HAPPY DEEPAVALI

WISHING OUR INDIAN READERS

HAPPY DEEPAVALI

George Soros words bring investment opportunities

Billionaire George Soros who is famous for causing the collapse of Bank of England warn that US might be on a verge of a serious correction.

"We have borrowed an awful lot of money and now the bill is coming to us," he said during a lecture at the New York University, also adding that the war on terror "has thrown America out of the rails."

Asked whether a recession was inevitable, Soros said: "I think we are definitely in for a slowdown that I think will be a bigger slowdown than (Fed Chairman Ben) Bernanke is seeing."

Soros said that, for now, China is the "absolute winner" in economic terms, and will continue to see its economy soaring during the next few years.

If China's economy is to expand and grow, it would be wise for investors to allocate some funds to invest in good quality China company.

I would highly recommend investors to sell away shares of companies that highly dependent of US for revenue.