Wednesday, 13 June 2018

Portfolio actions

  • It's world cup season plus holiday, so I think that the market will be quite cool at least for these 2 months.
  • Sold all my Keppel Corp @$7.42. Concerns with rising supply of oil and the U.S. sanctions against Iran and Venezuela have caused market sentiments to be mixed about the future oil prices. Since the share price of Keppel (BN4) is co-related to oil prices, I have decided to get out of the roller coaster and sit on the sideline for now. Downtrend is still intact. BN4's dividend yield has became much less attractive compared to the past, thus I shall not enter till the price becomes more attractive.
  • Watching OCBC. Price still on downtrend and meeting it's support point. Partial sold at $12.92. Will its price fall below $12?
  • REITs seem to have taken a bit of punching. Nil action for my REITs holdings.
  • Looks like Singtel and M1's downtrend still haven't end... :( I thought that M1's ECG (price movement) has signaled a dead heartbeat. NO! Its ECG revived, albeit not in the pattern that I wished for. Singtel on watchlist, orders kept lapsing.

  • Placed more spare money into SSB and probably will withdraw some from the not-so-good interest time coming this July.

Who says only holding needs conviction? Buying, selling and not falling in love with a share need much conviction too.

Read also 6 rights, 2 wrongs

Sunday, 10 June 2018

Yet another case of 'diworsification'

Let's see how things will pan out after reorganization for the once-star homegrown Hyflux. I kind of believe that the founder (Olivia Lum) would have the tenacity to pull through, given the way she 白手起家。

I am not vested in Hyflux. Just a thought that we must stay alert at all times in our investments and hope that the ones affected by the woes will see this as a lesson learnt. Staying alert means paying attention to new business ventures and the resulting debts/earning, as well as the impact on the company's cash-flow. (Keep your eyes peeled to any news.) So your alarm bell would ring somewhere before a price landslide goes to 10% and beyond.

Even though as minority shareholders we have no means to control the business direction and its management, we cannot simply take our stake for granted and rest on our laurels.


Saturday, 9 June 2018

Revisit: Invest in one that grows!

Where capital appreciation and long-term yields are our investment goals, putting our hard-earned money in a company that grows (its earnings) is probably more important than one that gives out high dividend payout in terms of yield (yet has poor cash flow and does not grow its revenue much).

However, we should not simply rule out yield in our buying consideration as companies that give good dividend yields are generally less volatile than those that don't. This is because fund managers in times of bad market would rather sell off the shares of the company that give less dividend before the one that do if both trades at the same price [source article here]. So we can infer that good yield could give some kind of cushioning against extreme price drop in times when the stocks market crashes.

The difficulty always lies in spotting that healthy 'chicken' to lay our 'golden eggs'. The golden eggs here refers to BOTH capital appreciation and dividends.

In choosing the 'golden chicken', here are some pointers I have picked up from What To Look for In Dividend Stocks for an Income Investing Portfolio:

- The company should have 3 consecutive years of positive margin.

- Companies that earn a profit can do one of three things: pay that profit out to shareholders, reinvest it in the business through expansion, debt reduction or share repurchases, or both. The company should pay out 50% or less of profit as dividend to use the rest in business growth.

Note that the percentage of net income that is paid out in the form of dividend is known as the dividend payout ratio. This ratio is important in projecting the growth of company because its inverse, the retention ratio, can help project a company’s growth.

- Dividend yield 2-6%. Dividends are dependent upon cash flowof the company, not its reported earnings.

- High ROE with little or no corporate debt.

- For REITs, we want to buy those with increasing DPU and high-occupancy/value properties.

Some of these information can be better scrutinized by looking at the balance sheet and annual report of the listed company to have a better understanding of its revenues and financial health. Numbers being numbers, we should also not forget to find out what sustained the numbers and made its business great. Read also Buying into the right business


^Free cash flow = operating cash flow - capital expenditures - dividends


Wednesday, 23 May 2018

Thoughts about Financial Freedom part III

Previous: Thoughts about Financial Freedom part II

There is an increasing number of blogs and courses these days talking about methodologies of investing in stocks, advocating financial independence or financial freedom (I am using the 2 terms interchangeably in this post, you could read more on their subtle differences here). They speak of how good it is to reach the stage of FIRE (financial independent and retire early) in life, how one could achieve FI through investing (like bao chiak) and package it with methodologies which are often narrowly defined as long-term investing in dividend yielding stocks.

The holy grail of reaching financial independence is not in its entirety about becoming a skilled (passive /value) stock investor. Those who are inspired by Robert Kiyosaki like to talk about portfolio and passive income by investing - forgetting that he wrote financial intelligence is a synergy of accounting, investing, marketing and law. Why did he say that? Becoming a skilled stock investor is just one part of the equation - to help generate an alternative income stream to our daily job or business. It may be perceived by some that once they have learnt the 'art' of investing, they can naturally be FIRE. It might seem more appealingly so in time of a bull market. However, we have to bear in mind that no matter how skilled we are in investing, we are still a tiny boat in the vast market ocean. In another word, we are always at risk of market downturn and capital losses that could be out of our control (heads-up to passive investors who want to sleep on vested stocks LONG term). Nothing wrong with that as long as we are prepared and have the stomach to tide over right? If we want to talk about investing in general, learning how to invest in different assets and knowing when to shift between asset classes to protect and grow our net worth during change of economic conditions, would put us on a higher pedestal and minimize our risk in market crashes.

Back to the part about being inspired financial intelligence by Robert Kiyosaki. Despite being very inspired and all to get out of the rat race (after reading the Rich Dad, Poor Dad book or played his cash flow game), not many of us caught the insights or have the gut to start or acquire a business for 'passive' income. 'Hey, it is not passive' you would argue, since one would be expected to put in more time and effort in running a business than simply clicking the mouse to make investment transactions. But wait, don't you need time and effort to research, analyse, place orders and track your investments too?

I secretly wished that there are more inspired finance bloggers out who would also talk about how they have ventured and failed/ succeeded in businesses, instead of reporting on monthly stocks portfolio performance.

At the end of the day, I realised that we don't need to pursue financial freedom in order to do what we want in life. Achieving financial freedom is nothing more than breaking away from what we dislike doing or are stressing over for earning a living. As long as one's passion could generate a steady source of income to be able to live comfortably - whether is it in investing, running a business, blogging or simply doing your day-to-day routine job, you are already free.

(I am so inspired by Marie Kondo today. Not on the minimalism or tidying part but by how her bizarre passion made her fortune and fame.)

Sunday, 20 May 2018

Comfort Delgro (C52) - my lost treasure after 5 years

Round 1: Bought $1.57
Round 2: Bought $1.46

Sold all at $1.84 in year 2013

Gain: $0.325  :)

But price rocketed in the years after. -.-
Silly me.

Round 3: Bought $2.02

Selling at _________ ??

I guess I won't be selling it anytime soon and likely to be collecting more if opportunity presents itself.

Not going to "let the car drives off without me" again.
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