First of all, I’ve to say my thanks and appreciation to a young blogger at this blog called KT Wealth – aka “Cookieguy”.
C&O Pharma
I came to know about this S-chip called C&O Pharma from his blog early 2011.
This stock looks promising for an M&A play as Sumitomo had just bought into the company. I don’t copy and buy. I “borrow with pride”. I placed this S-chip under my stay tuned watch-list.
When C&O started to climb from 35 cents to 40 cents in high volume last July 2011, I piggy-backed on board at 42 cents (market moved faster than me) and continue to buy on the way up to 49.5 cents – when news finally broke that Japanese Pharma Shionogi was taking C&O private at 50 cents.
At 49.5 cents, the arbitrage profit is “only” a few hundreds; but hey! Money is money!
All in all, I made around $11,000 for this swing trade – not bad for 3 months of “non-work”.
I took $3,000 of the profit and went for a 2 week vacation around Greece and Santorini Island.
I happy like bird.
Nera Telecoms
This “investment” was a trade gone wrong. And I’ve been holding it for 8 years… But the good news is that at the take-over price of 45 cents, I would make about 25% in capital gains plus a 2 bagger from the dividends collected over the years.
Nera Telecoms is one of my 3 main core holdings making up my 50% equities position vested in the market. So the potential dollar amount gains are much higher than last year’s C&O Pharma M&A trade!
Yet, I am not exactly thrilled…
Context is everything!
Why one M&A I happy, the other M&A I not so thrilled?
Let me illustrate by sharing this property en-bloc story that happened in Queenstown during 2009 - HUDC Gillman Heights.
Despite the challenge of the minority dissenters (went all the way to High Court), the majority of the residents got what they wanted – en-bloc windfall!
Or so they thought. You sell high; but you have to buy high too. Remember the ballistic rise in property prices from 2009 to 2011?
All of sudden, this “windfall” can only afford smaller condos at locations further away than Queenstown from the city centre… Talk about inflation!
For C&O Pharma, the M&A happened just before the October 2011 “correction”. Wonderful!
But for Nera Telecoms, this ##@!#^$*% M&A happens now in mini-bull market. Buttocks!
Even if I got my “windfall”, what can I buy that’s value for money in SGX now?
Bull market rally or bear market rally?
If I believe it’s a bull market rally, I would close my eyes and buy high, and hope too sell higher.
But since I believe this is a bear market rally (and it will probably go higher and higher), I rather be patient and fearful when others are greedy.
OK, I’ll take the cash from Nera Telecoms and probably rotate it into another asset class that’s less co-related to equities (if I can’t find another equity horse to ride).
Start planning for 2013 after the 2012 US Presidential elections?
China is not the only country that “massages” their statistics ;)
P.S. In case you forget, my trading time frame is 6-18 months.
Singapore Man of Leisure (welcome to my blog; just google it!)
