Author: 10% Per Annum

Portfolio Update: Took profit on InnoTek and Micro-Mechanics

Summary I have decided to sell out on my positions in both InnoTek and Micro-Mechanics as they appear fairly valued given the risk-reward stand off at this point of time. All divestments made in 2018 by Author, price includes transaction costs However, I continue to like both counters and will continue to monitor them closely on my watchlist. Divestment Rationale – InnoTek I last wrote about InnoTek after their mid year results were released in August last year (here). Then, I mentioned that InnoTek was facing a difficult time securing demand for their office automation and consumer products, and that...

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Portfolio Update: Took profit on InnoTek and Micro-Mechanics

Summary I have decided to sell out on my positions in both InnoTek and Micro-Mechanics as they appear fairly valued given the risk-reward stand off at this point of time. All divestments made in 2018 by Author, price includes transaction costs However, I continue to like both counters and will continue to monitor them closely on my watchlist. Divestment Rationale – InnoTek I last wrote about InnoTek after their mid year results were released in August last year (here). Then, I mentioned that InnoTek was facing a difficult time securing demand for their office automation and consumer products, and that...

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Book Review: 5 things I learned from Joel Tillinghast’s Big Money Thinks Small

About the Author: Joel Tillinghast is a protégé of Peter Lynch who has managed Fidelity Low-Priced Stock Fund since 1989. Today, the fund manages over US$40 billion and owns over 900 counters. Despite its massive size, the fund that has outperformed both the S&P500 and Russell 2000 by an average of 4 percentage points per year. About the Book: From companies to avoid to stock selection, Tillinghast discusses all his investing philosophies in his book “Big Money Thinks Small”. Published in 2017, the book provides both recent examples that younger investors can identify with, as well as the classic...

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Some reasons to be bearish that make sense

I wrote about some reasons to be bearish that don’t make sense last week. Since then, the Dow Jones Industrial Index had posted its worst week in two years with 2 days of free fall exceeding 1000 points. In fact, had the Dow lost any ground on Friday, it would have been the index’s worst week since the financial crisis in October 2008. I guess this provides the perfect context for discussion on reasons to be bearish that makes economic sense. 1) Treasury Bond yields are rising 10 year treasury bond yields have accelerated since the start of the year...

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Why some reasons to be bearish don’t make sense

Equity markets are off to a great start in 2018 with stock indices around the world scaling new heights. In fact, January 2018 was not just a good month for stocks, it was a great month even by the average “good” standards – the Standard & Poor’s 500 stock index gained 5.62%, its best January since 1997. As the bull market runs further and longer, many investors are finding new reasons to be bearish. However, here are some recent ones that don’t make sense: 1) Trailing P/E for US indices are too high relative to history Price to Earnings...

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Book Review: 5 things I learned from David Einhorn’s Fooling Some of the People All of the Time

About the Author: David Einhorn is founder and president of Greenlight Capital, a value-oriented hedge fund that returned 16.5% a year from 1996 till 2016. He is best known for correctly identifying Lehman’s balance sheet deficiencies ahead of their downfall in 2008 though his track record of spotting accounting fraud extends far beyond Lehman. About the Book: This book details Einhorn’s struggle to expose fraud at Allied Capital despite his possession of overwhelming evidence. “But the most troubling material concerns an issue that is bigger than Allied and Einhorn’s battle: it’s the way criticisms of corporate behavior are received...

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The Fall of Singapore Post since 2015

2017 was a fantastic year for all investors as prices went up across almost all asset classes. This was true for most investors in Singapore’s stock market unless you somehow managed to pick up duds like.. Singapore Post. At S$1.25 per share, SingPost’s share price had declined 41.6% from its peak in January 30th of S$2.14. Frankly, it is quite amazing that a company with monopoly in mail management and a hand in logistics and ecommerce can fare this badly in a bull market that had picked up other logistics players like Global Logistics Property (GLP) and Poh Tiong...

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5 takeaways from Guy Spier’s The Education of a Value Investor

About the Author: Guy Spier is perhaps best known for co-bidding with close friend Mohnish Pabrai to win idol Warren Buffett’s charity lunch in 2007. As a fund manager himself, Guy Spier is no slouch. His Aquamarine Fund boasts of a cumulative return of 463% from 1997 till 2014 compared to S&P 500’s 167%. $1 million invested in the fund would therefore be worth $5.63 million in 2014, versus $2.7 million if it had been invested in the S&P 500 over the same period. About the Book: While the book does covers Spier’s philosophy towards investing, investing itself is...

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New Counter: Emperor Capital (HKG:717)

Equity: Emperor Capital (HKG:717) Business: Financial ServicesMarkets exposed: Mainly Hong KongStock exchange: HKexPurchase price: HKD 0.582 (including transaction costs, excluding FX costs)Purchase month: December 10% per annum thesis:  Emperor Capital is an undervalued fast grower. Earnings growth in the coming quarters might serve as a catalyst for revaluation, which in turn has the potential to transfer Emperor Capital into a multi-bagger. Introduction: Emperor Capital is a boutique financial services firm with the following 4 main segments: Financing, Brokerage, Placing & Underwriting and Corporate Finance.  Its operations are mainly in Hong Kong, where it has 10 branches. The firm also...

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Book Review: 5 types of Moat from Charlie Munger – The Complete Investor

About Charlie Munger: Charlie Munger is best known as vice chairman of Berkshire Hathaway and the ever affable partner of Warren Buffett. However, Munger was already well established as an outstanding investor way before becoming Buffett’s right hand man – Munger actually ran a partnership from 1962 to 1975 and achieved average annualized returns of 19.8%. About the Book: This Book is titled ‘The Complete Investor’ and author Tren Griffin does not disappoint. From the basics of the Graham value investing system and Munger’s pieces on human psychology to important investors’ attributes as well as key points to look...

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Divested Cogent for 73.4% annualized returns

Summary Following the $1.02 cash offer by Cosco for Cogent on 3rd November (here), I have finally divested my interests in Cogent for $1.01. All divestments made in 2017 by Author, price includes transaction costs Divestment Rationale Reasons for divesting now are primarily twofold: 1) Increased Opportunities (for other investments) I have been keenly observing the share prices of counters in both my portfolio and my watchlist. It seems that after a protracted bull run, we are finally experiencing a sharp correction amongst mid and small caps on the Singapore Exchange.  1-month share price trends from Yahoo Finance This...

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New Counter: SUTL Enterprise Limited

Equity: SUTL Enterprise Limited (SGX: BHU) Business: Marina Development and Management Markets exposed: Mainly Asia Pacific Stock exchange: SGX Purchase price: 0.701 (including transaction costs) Purchase month: November 10% per annum thesis:  SUTL Enterprise has the potential to be a fast growing multi-bagger should they execute their business strategy right. Introduction: SUTL Enterprise is best known as the owner and operator of ONE°15 Marina Club located at Sentosa Cove, Singapore. Their business expansion model is premised on a two-pronged approach – marina owner-operator and marina manager. My friend Eric had done some amazing research on SUTL Enterprise which I highly...

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Portfolio Update: Accumulated More of Hock Lian Seng

Hock Lian Seng is a counter that I have reviewed extensively since my purchase in December 2016. You may read about the write ups here. Despite the counter providing annualized returns exceeding 50% since initiating the long position, I have decided to take advantage of the recent dip in share price to accumulate even more of Hock Lian Seng. Equity: Hock Lian Seng Holdings Limited (SGX: J2T) Business: Engineering, Building & Property Development Markets exposed: Mainly Singapore Stock exchange: SGX Purchase price: 0.460 (resulting average cost of 0.404, inc. transaction costs) Purchase month: November Considerations: 1) Portfolio Balancing I...

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Divested Valuetronics for 106% annualized returns

Summary   I have decided to divest my position in Valuetronics as my initial investment thesis of a turnaround  made in April (here) has been realized.   All divestments made in 2017 by Author, price includes transaction costs As the table shows, the divestment of Valuetronics represent my largest realized gain till date. Divestment Rationale 1) Turnaround is Complete The key investment rationale was that Valuetronics’ twin engines of Consumer Electronics (CE) and Industrial and Commercial Electronics (ICE) were finally both firing concurrently. This had indeed played out perfectly with the firm recording between 7%-10% q-o-q growth in revenue...

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Book Review: 5 takeaways from Edgar Wachenheim’s Common Stocks & Common Sense

  About the Author: Edgar Wachenheim is the founder, chairman and chief portfolio manager of Greenhaven Associates. The fund currently manages over US$6 billion. In the 25 years since the founding of the fund in 1987, Greenhaven Associates had produced market beating returns of 19% per annum on average. About the Book: Unlike other books which discuss theories on stock pickings, investment principles or even investing psychology, this book adopts a case-based pedagogy. Edgar shares details of several investments made by Greenhaven. He illustrates methodologically how each investment thesis surfaced before detailing the probabilistic approach towards assessing these theses...

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