An Evening with AK and Friends – 23 March 2015 Thanks AK for inviting me to his second "chit chat" session. I also met a few familiar faces Brian (who will be speaking at next week's event), Kendrick (I told you that I'll be meeting you soon) and Winston (enjoy your trip ya).

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  AK's guest panel of friends: Ser Jing (from Motley Fool Singapore) Rusmin (from The Fifth Person) Sean and Leong (from Value Investing College) This time round, introduction was kept to a minimum and while questions were not as fast and furious, there was more in depth analysis on the stocks that were covered. Without going into detail, here are some of the topics that were discussed. Q. What are your thoughts on Nobel? Panel:

• Dislike that it continue to raise money from the public.
• Business model is complicated.
• Negative cash flow.
• Not a good stock to invest for income.
• Institutional buying does not guarantee that the stock will do well.

Q. Views of Fed raising Interest Rates? Panel:

• There is no need for Fed to raise Interest Rates. When US currency goes up, interest rates will follow suit.
• It is not in Fed's interest for Interest Rate to go up too fast for fear of losing its competiveness.
• Be prepared for all possible scenarios - War Chest.

This was followed by a lengthy discussion on "Eat Bread With Ink Slowly" and Asset Allocation. Eat - Emergency Fund Bread - Borrow. With - War Chest Ink - Income (passive) Slowly - Sizing. AK mentioned about Marco Polo Marine to cite an example of sizing. This led to another discussion on asset portfolio as shown in the picture below. The base is income, followed by Growth + Income, Growth and finally Speculative (Casino). For AK, the size of his speculative stocks is no more than his annual dividends so that if he loses everything, he only needs one year to replenish his lost. Vicom, Straco and Super Group are mentioned as an example of a Growth + Income stocks. AK brought up several points on Straco and Ser Jing handled it well. Food Empire was also mentioned as trying to follow the business structure of Super Group. Q: Any thoughts on the direction of Oil and Gas? Panel:

• Oil will not likely drop to $20+ a barrel which is the breakeven price of production.
• Current low oil prices is not a fundamental issue but rather a cycle.
• Look for companies that will benefit from a fall in oil prices.

Q. Views of a weaker Singapore Dollar? Panel:

• Exports will benefit.
• ST Engineering mentioned as a company that will benefit from a weaker Singapore Dollar.

Q. Is it a good time to buy NeraTel? Panel:

• Depends on the dividends you are expecting. 6 cents is not sustainable.
• Talked about the new projects that may bring about growth.

Q. What do you think of the Singapore Market. Panel:

• Based on the Market PE, it is fairly valued.
• Talked about Hong Kong market PE which is in a single digit now but has to be very wary of what stocks to buy because regulations there are different from Singapore.

Q. How many counters do you have (directed at AK)? The question is not for AK to reveal his portfolio but how many stocks a part-time investor can handle. AK:

• About 10 REITs but focus mainly on AIMS, First REIT and Saizen.
• Non-REITs will include ST Engineering etc.
• AK also mention that he prefer Sembcorp Industries than Sembcorp Marine because utility business is relatively stable.

Q. As interest rates continue to rise, do REITs still make good investments? Panel:

• Look for low gearing and how their loans are structured. Fix rate loans are preferred.
• There was a discussion on Frasers Centrepoint Trust and Capital Mall Trust.

A reader brought up a few points on CPF and AK mention that it is not in the government interest to have too big a change. At least for the next few year, interest rates will not change much and one should try to make full use of it. Q. What are your views on SGX minimum trading price? AK:

• Impact should be minimal since it is only a share consolidation.

Q. What are your views on Ringgit? AK:

• Over the long term Ringgit will continue to slide. To hold or sell will depend on the individual's exposure based on their portfolio.

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My final thoughts: It reinforces my belief that the market is fairly priced now and it is not easy to find low hanging fruits. I will stick to nibbling my company shares and building up my war chest.