Author: DanielXX

A post from a long-lost blogger

I received another of my Google Adsense cheques just recently, and was frankly quite surprised to get it because I haven’t been posting for more than siz months. To be sure, I haven’t been active for probably more than 2 years with my hotstocknot picks, as my last few postings were more rants on than anything else. But this shows the quality of my blog, and I’m speaking in all frankness without bragging. The fact that people continue to come back to read my postings on various stocks several years back — and why they should NOT buy it...

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Resorts World Casino – An Analysis

This is meant to be an analysis of the casino demand dynamics — not the IR. As far as I’m concerned, the centerpiece of both the developments is the casino, and everything else, including the convention centres or Universal Studios, are but secondary. The casinos are meant to subsidise all the other developments, so if they fail, the peripheral IR developments will be in trouble. So there’re “crowds and crowds of people queueing to enter the RWS casino”, according to our mass media. Let’s sieve out the opinions and go for the facts. The consistent number that was reported...

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How To Make Money in Stocks Part 7: Pick Low-Hanging Fruit

Allied to this theme is: don’t try to understand the whole world! (actually that was the original title, but I thought the low-hanging fruit thing sounds more professional) Actually in my view, investing is a very simple process compared to most other forms of work in the world. Not making money from investing, mind you, but the process in itself. All the talk and academic theories about structuring portfolios, optimising risk-return etc, does it really do anything but add two or three percentage points of return over the market (if one is lucky)? But people actually make a good...

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City Developments @ 6.01 (Property/ Singapore)

Main issues Weak sector outlook SOTP valuation is below current price I have been very bearish on property for quite a while, and this latest hotstocksnot coverage shows that I have not lost this pessimism over this sector yet. My recent views over Singapore property are well-documented in my Trendspotting blog article in February titled “Continued weakness in Singapore residential housing”. In it I outlined the liquidity situation, supply-demand dynamics and valuation comparison to historical prices and concluded that private residential demand plus prices will remain weak through the next 1-2 years. My views sector-wise have not changed. Though...

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The G20 conference

And so, after half a year of waiting, finally the G20 meeting convenes this coming week. Will it be another NATO (No Action Talk Only) meeting ie. an anticlimax yet again? I tend to think that this will come to be seen as a key event in the annuals of financial history, because of a few factors: (1) it has been six months in the making, which gives various participants the time to think things over and lobby for support; (2) the economic collapses following the Lehman bankruptcy have confounded even the most pessimistic estimates, hence conferring the political...

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Continued weakness in Singapore residential housing

I was thinking which of my blogs I should put this article in and decided that the Trendspotting one is the most appropriate although the article is not highlighting a trend to buy into; rather it is advising against buying into something. Besides, I haven’t written in Trendspotting for some time already. There has been pessimism over the property market since mid-2008, and justifiably in my view, given the potential looming supply of private homes coming onstream over 2009-10. However, recently there appears to be a wellspring of renewed optimism in the market, magnified through the press, over the...

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Technical Analysis- A somewhat scientific look

I like reading the Review segment of the Straits Times because there are occasionally interesting analysis, and Andy Ho sometimes has interesting articles. This guy writes extensively on a variety of topics ranging from health to science to philosophy to political systems to economics … all of which interest me (save maybe for health). Saturday’s article in ST is the inspiration for this latest blog entry. I had read a book on chaos theory some years back, which is the subject of Andy Ho’s article, but had not really made the connection to stock market dynamics then, probably because...

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On Temasek Holdings

I do not often like to comment on political issues too vehemently but sometimes I feel so strongly about certain subjects in which I feel I have a reasonable overall grasp, that I have to blurt it out. Temasek is still a political organisation as of now, no matter their claims about how commercial they are (tell me how commercial you are when the former CDF can go straight from the SAF to Head of Portfolio Strategy of the organisation), and I think it will be difficult to shake off the political links. I mean, how can it possibly...

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Developing An Investment Philosophy Part 5

A friend joined a fund management firm recently and was amazed at how the analysts were expected to cover multiple geographical markets simultaneously, since the firm managed several Asia-Pacific funds. How was he supposed to do it, he wondered, since he previously was only familiar with the Singapore market. Indeed, was it even humanly possible for a person to cover many markets at the same time? To me, there are three distinct aspects to developing one’s expertise and effectiveness in the stock market: depth, breadth and philosophy. Be deficient in one aspect and he will be a much less...

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CapitaCommercial Trust @ 96 cts (REIT / Singapore)

Main issues Rents set to fall Interest expense set to rise Relative yield valuation is not attractive And finally I resume my Hotstocksnot coverage. It has been a turbulent year and I have been so absorbed, enthralled and traumatised by the stock market that I preferred to spend time on my own stockpicking rather than highlighting hotstocksnots. Besides, valuations had plunged and it was getting difficult to find overvalued stocks. CapitaCommercial Trust (CCT) had dived together with the general market, especially with the REIT segment, since the middle of 2008, hitting as low as 60 cents in early December....

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Reflexivity revisited

Let’s review the various perspectives about the relationship between stock prices and “business fundamentals” as most people understand it. First, there is the advice given by the Sage of Omaha about Mr Market being manic-depressive and that the prices he/she/it quotes can have a disconnect with underlying fundamentals. Then there is the typical technician’s/efficient market theorist’s view that price reflects underlying fundamentals, even though it might not seem so at the time to the outsider. And then there is George Soros, who advocates that market prices can actually actively influence fundamentals. The last view is known as reflexivity, a...

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Stockpicking in a bear market

By: DanielXX Stockpicking in a bear market can be a hazardous business, because going long in deflationary conditions is by definition an attempt to pick a bottom (whether intermediate bottom or long-term bottom) on the stock price. It is easy to be bloodied by the falling knife, especially if one attempts to catch it naked (eg. contra, no ability to hold). One could thus simply choose to avoid risk and not hold stocks altogether, which is the reason why we have a bear market at all — risk aversion leads to lower volumes and the stock prices drop by...

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Structured Products fiasco- What’s reasonable, what’s not

By: DanielXX It is surprising that this storm has still not abated about one month after it initially started following Lehman’s failure which ignited so-called “credit events” in many structured products offered around the world, most prominently in Hong Kong and Singapore (I wonder why these two countries in particular). With all due respect to the victims, my conclusion is that in Asia, money (and the loss of it) strikes at the raw emotions (and the corresponding activism) of people much more than anything else (eg. intangibles like democracy, politics, environment). As this issue is covered almost every day...

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Screening S-stocks

By: DanielXX DanielXX’s intro: The below is extracted from the Nextinsight share investors’ site, a no-nonsense website whose founders include a former business journalist and a head of a well-known local investor relations agency. The article is written by Sim Kih. The writeup was in turn based on a lengthy JP Morgan report on the dangers of S-stocks. The reason for my highlighting this article is that it offers many key insights on what things to look out for when stockpicking S-chips, or so-called “warning alerts”. An article worth archiving for future reference. It is my belief that once...

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Understanding stock valuation

By: DanielXX To me, understanding valuation, or why the stock is priced the way it is over an extended period, is one of the, if not THE, key risk management method for the stock investor/trader. This is as opposed to the approach of many traders who use technical analysis, momentum trading, cut-loss etc. Indeed, if I may generalise, the upside gains from an investment comes from astute understanding of business dynamics and growth potential, but management of downside risk comes from understanding of the valuation. There are several issues on valuation that I’ll discuss here. First of all, understanding...

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