Author: 10% Per Annum

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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Cogent buyout offer – thoughts and (lack of) options

The spate of buyouts targeting logistics companies on SGX has continued with the latest target – Cogent Holdings. Cogent received a buyout offer from COSCO shipping, another company listed on SGX. Interested investors can read more about the buyout offer here. Investors would normally thank their lucky stars upon buyout offers as these offers often represent a significant premium over the target company’s most recent share price. Unfortunately, I cannot say the same for myself as Cogent’s offer packs only a miserly premium. A comparison with other logistics buyout offer this year illustrates the point. Cogent’s offer is by...

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Micro-Mechanics – time to sell after 146% returns in 13 months?

The management of Micro-Mechanics has an annoying habit – They seem to enjoy releasing financial statements right smack in the middle of the trading day. As yours truly is a poor salaried man slogging his life away during office hours, I have always found it tough to follow their fortunes in a timely manner. The management’s handling of today’s 1Q’18 results release was no different. Imagine my shock when I scrolled through my holdings during lunch time – Micro-Mechanics was up 7%! Needless to say, all was instantly forgiven. The counter eventually closed at S$2.03, up S$1.18 since my...

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9 stock picking tips from The Essays of Warren Buffett

About Warren Buffett: Warren Buffett is a value investing legend. While his purist value investing style might not appeal to everyone, there is no denying its time tested effectiveness. Investors of Berkshire Hathaway, Buffett’s investment conglomerate, have seen a 20.8% annualized return in market value over a period of 51 years from 1965 to 2016. About the Book: This book is simply a curated and reviewed version of most of Warren Buffett’s essays written over more than 20 years. The book touches on topics far beyond stock picking and investment. In particular, Corporate Governance and Accounting both formed insightful...

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Singapore’s Residential Market – Sustainable Recovery?

I realized that it has been a rather long time since I wrote a macro piece (especially for a self proclaimed macroeconomic focused value investor). As such, given the current hype over Singapore’s residential market, it appears high time to review this particular sector’s fundamentals. The Hype The spotlight on Singapore’s residential market was primarily driven by the recent spate of en-bloc deals by different developers. While unlikely to top 2007’s en-bloc craze, 2017’s en-bloc figures thus far have proven to be the greatest in the past 10 years. Source: Bloomberg This was soon followed by news that Singapore’s...

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HY17 (Apr-Sep) Portfolio Review – Increasing lead over the Index

This is the 3rd half year report since my investment journey begun in April 2016. Portfolio Results Since the last portfolio review in March, time-weighted returns of my portfolio had increased from 34.01% to 55.43% (+21.42%). In contrast, the index had only gained +3.84% over the same period to finish at 19.35%. As a result, my portfolio’s lead on the index had actually widened rather significantly since the last portfolio review. All-time XIRR since portfolio establishment in April 2016 stands at a healthy 27.38%. To recap, I had set myself the dual objective of attaining returns exceeding 10% per...

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Book Review: 5 takeaways from Mohnish Pabrai’s The Dhandho Investor

About the Author: Mohnish Pabrai is an accomplished fund manager and unabashed fan of Warren Buffett. Pabrai’s Investment Fund had outperformed all major indices and over 99% of other managed funds by delivering an annualized return of over 28% after fees and expenses from 1999 to 2006. About the book: Pabrai illustrates the concept of “Dhandho” and its applications to investing through examples of how vastly different individuals became successful entrepreneurs. He then distills his stock investing approach by sharing exactly how he selects counters. I would classify this book as a true and underappreciated classic. Here are 5...

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Book Review: 5 takeaways from Joel Greenblatt’s You Can Be A Stock Market Genius

About the Author: Joel Greenblatt is the founder of Gotham Capital, an investment partnership that achieved 50% annualized returns from founding in 1985 till close in 1995. $1 invested with Mr Greenblatt during the partnership would have snowballed into $51.97 in less than 10 years! About the book: You Can Be A Stock Market Genius is the 2nd Joel Greenblatt’s book that I have read. Compared to “The Little Book that still Beats the Market“, this book is likely written for more advanced investors. The book specifically discusses the merits of investing in special situations ranging from spin-offs to restructurings....

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New Counter: AEM Holdings Ltd

I am pleased to add a new counter to my portfolio, especially since it has been more than 4 months since I last bought anything. Despite the new addition, my portfolio’s cash position stands at a healthy 27%, in line with my portfolio re-balancing goals (here). Equity: AEM Holdings Ltd (SGX: AWX)   Business: Semiconductors Markets exposed: Global Stock exchange: SGX Purchase price: 2.31 (Cum Dividends) Purchase month: September 10% per annum thesis:  AEM is now considered a fast grower, having turned their business around. Introduction: AEM is involved in the semiconductor industry, specifically in the back-end chip assembly...

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Divested Tai Sin for 16% annualized return

Summary I have decided to divest and take profit on Tai Sin due to fundamentals trending apart from my initial investment thesis. Note: price includes transactional costs Despite the failure of my investment thesis, I am happy to book an annualized gain exceeding 10% per annum. I attribute this to the large margin of safety that Tai Sin had in February at S$0.398 per share, which has diminished with my sale Price to Earnings ratio of 10.2.  With this divestment, and in line with my portfolio goals (here), I have also raised my portfolio cash holdings to 37%.  Divestment...

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Book Giveaway: Poor Charlie’s Almanack (NEW!)

While I would prefer to be known as a generous and altruistic individual, the unfortunate truth is that I simply bought the wrong version – this book is written in traditional Chinese, which is in turn way beyond my level of command for the language. While I am unable to comprehend the book, my hope is to benefit someone who is both capable of understanding the writing and interested in finding out more about Charlie’s wisdom. I am giving this book away for free, but reserve the right to charge for postage. Interested individuals can fill up a short google form here....

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InnoTek 1H’17 Results Review – Crucial Year Ahead

InnoTek had released their 1H’17 results on 12th August, which you may find here. This is my first results review for InnoTek since my initiation (here). Unfortunately, InnoTek had performed below my expectations and reported disappointing results. Overview   Year-on-Year comparison Source: InnoTek Press Release Revenue for 2Q’17 slid 3.2%. Gross margins was marginally weaker by 1%. Net Profit and earnings per share were both hammered, falling almost 77%. To top if off, 2Q’17 was a quarter of negative cash flow, although InnoTek did generate positive free cash flow of S$0.8M for 1H’17. The decline was driven by lower demand...

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Divested Keong Hong for a 11.2% annualized return

I wrote in early June about my plans to re-balance my portfolio (here). In summary, I had wanted to: 1) Increase cash position to at least 20% of my portfolio 2) Increase percentage of portfolio vested in companies with more resilient demand 3) Increase holdings only in companies with strong balance sheets With my portfolio re-balancing plans in mind, I have divested my holdings in Keong Hong (SGX:5TT) at $0.48 per share to record a respectable 11.2% annualized profits. Together with an increase in savings over the past 2 months, my portfolio cash holdings has now increased from around...

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Sapphire 1H’17 Results – Turnaround Continues

As the saying goes, it never rains but it pours – unfortunately for myself, a few of my holdings had chosen to announce results today just as I am scheduled for a busy weekend. Faced with a list of counters which I would ideally like to look at, I have nonetheless prioritized the review of Sapphire’s results as this will be my first review since establishing a position in this counter (here). Overview   Year-on-Year Comparison   Source: Sapphire’s 1H’17 Financial Statement Despite a 11.8% year-on-year revenue growth, Sapphire’s operating profits had slumped 12.1% over the same period. This...

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