Author: Investment Moats

This OLAM versus Muddy Waters

The latest soap opera on the Singapore stock investing scene have been this guy Carson Block from Muddy Waters saying OLAM balance sheet is weak and it’s a good short target. OLAM CEO came out with a comprehensive defense saying that they are at least $10 billion dollar liquid, because a lot of their commodities asset can be liquidate instantly. Muddy Waters issued a 133 page (!!!!!) report on OLAM. OLAM decide to sue Muddy Waters, saying they are working with hedge funds to short OLAM. Both have agendas At this point, I do not know what to make...

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More evidence of a return of US manufacturing

What would this do to China? It seems that its been proven again and again not to doubt the economic engine of US and how technology pushes things. Technology synergy may finally arrive. Could 2010-2020 be the new industrial age where manufacturing changes? “The way we see it,” says Moser, “about 60 percent of the companies that offshored manufacturing didn’t really do the math. They looked only at the labor rate—they didn’t look at the hidden costs.” Moser believes that about a quarter of what’s made outside the U.S. could be more profitably made at home. “There was a...

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Economic Moat–Are good management a moat?

One of my main pillars when comparing or choosing a stock to invest in is understanding the business model. Understanding the model, its strength, weakness, threats and opportunity goes a long way in Estimating the predictability of cash flow (lumpy or consistent) sustainability of a conservative estimate of cash flow (e.g. In down times can it still pay X minimum amount of dividend I require) Business continuation in next 10 years How susceptible is it to substitute Could company lose its business advantage Would people still expect to use so much of thee goods/services Risk management (how can you...

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Manufacturing – low cost back to high tech

There comes a point where even low cost workers become not as low cost any more. In such a situation, manufacturing have to move to lower cost countries. For companies like Singapore listed Micro Mech, the future seem to be advance automation. I see a lot of good in that if it happens, because to carry out on the flying prototyping and operation of these machinery, you need a certain level of technical competency, something which Singapore can provide. Singapore, a growing hot bed for Start ups may see in the next 10 years more IPOs like these. The...

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Colm O’shea–Hindsight, Market Predictions and Timing

Hedge Fund Market Wizards by Jack  Schwager is a favorite of many hard core managers because it delves into the mind of the people that actually beat the market. It is like a book of trusim and axioms. The first article summarized and profile by financial trends is Colm O’Shea. These three are some of my most enlightening moments: Most great trades are incredibly obvious to everyone after the fact. O’Shea points to his bearish turn at the start of the financial crisis in August 2007, when money markets seized up and LIBOR spiked. To this day, equity people...

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Sembcorp Industries stages rebound–A real long term utilities play

I thought I may have missed out on Sembcorp Industries for the second time when IT rebounded from a low of $4.80 to $5.15. People may prefer Sembcorp Marine since it distributes a larger dividend and have a higher ROE. To me, ROE and margins that are huge are only good to you if you can protect yourself from competition. Most of the time a company will find it difficult. Yangzijiang, other China and Korean shipyards are starting to develop capabilities of building rigs and customers are getting demanding since there are more bidders and economic climate are not...

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Vodafone 6% yielder $VOD

There are many investors looking for a good yielding stock that beats the regular 5 year fixed deposit rates. And what better company then a telecom giant. Telecom companies are good cash flow generators and do better than thee average market during recession. One such stock is Vodafone, which Is the second biggest telecom company in the world. Vodafone have a footprint in Europe, South Africa, Africa, Australia and turkey. Vodafone makes a great stock for many international investors because it is listed In UK, which have no dividend withholding tax. This means that you are not overly penalized...

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Venture Corporation

There are a few enquiries about Venture corporation as a dividend stock since it was added to my Dividend Stock Tracker. The attractiveness stems from a 7.2% current yield, which represents a near 100% payout from last years earnings Venture corporation is net cash, meaning debts minus cash they have zero debts Based on past year’s earnings report the Price earnings is 13 times, EV/EBITDA is 8.5 times. From this set of data, it looks like a good dividend stock. I would like to provide more information to help you make a more holistic analysis. However, I have to...

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I want my future husband to be diligent with money!

The Japanese Government must be desperate. Their population have started to reduce their home ownings of Japan Government debts. As a result they have to come up with advertisement like this targeting young working Japanese guys to buy short term 3 year government bonds yielding less than 1% Remember, according to the research endorsed by the Japanese government, you don’t have to be humorous, good looking or good to hang out with, the ladies will love you if you can save well at a low...

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Aims Amp Industrial REIT–Gul Way almost ready

If you are a Singapore investor and would like a show that increases investor awareness you can tuned in to Investor Central’s videos at Xin MSN. I really like the show because the reporter Mark Laudi always asks questions you and I want to ask. This few weeks they have been in a blitz of Industrial REIT reporting. There are many videos on Sabana REITs. But the focus of this post is on Aims Amp Industrial REIT. You can take a look at the video [here] Mark interviewed the CEO and he discussed a few things: There was a...

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Are HDB Flat better investment than stocks and bonds?

It is probably the trend that property is a good inflation hedge, since it will definitely end up higher in value compare to stocks, which can just die off under mismanagement. It got me thinking while I was studying for my exams. A 5 room HDB flat that you bought in 1999 for $267k. Now can sell for $550k. Duration = 13 years Appreciation = 106 % Annualized returns = (1+1.06)1/13 = 5.7 % per annum If you are not renting it, is 5.7% a good return? I think you have to rent because if you don’t rent it...

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Valuing a REIT: As an equity bond–First REIT

Introduction Many folks have asked me how to compare REITs. In general, I don’t have a certain fixed formula but use the usual PE, EV/EBITDA and Discounted cash flow. For assets that have predictable cash flows, I tend to compare asset A’s yield versus asset B’s yield. End of the day, we want to evaluate returns of x number of cash flows over a period, per unit risk. We will use First REIT, which I notice have came down a bit, and that I am invested at 77 cents versus Ascendas REIT, some LTA bonds and SGS bonds.  ...

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Long Term Market Analysis: Post Election and Massive Head and Shoulders $SPY

Drizzt: long term market analysis is a series once or twice a month where we take a look at longer term trends in the market to get our bearings right on the general direction of where market prices is going. On the day US President Obama got re-elected as the US President the market took a dive. Its probably a good time to do a wrap up and to trash out some things. Weekly S&P500 and STI The long term indicator we use is the cross over between the 17 week EMA and the 43 week EMA. A cut...

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