Author: InvestingNook

Investment Idea: City Developments Limited

We would just like to thank everyone who participated in last night’s InvestingNook LIVE Webinar. Many who were unable to attend requested for a replay of the webinar last night so I will be sharing the recorded version here.  The topics that we discussed were as follows: Topic 1: Summary of Capital Cycle Approach Topic 2: Quick overview of City Developments and how its valuations relates to the market cycles Topic 3: Where I see City Development’s valuations today Topic 4: Launch of our new ValueScreener service Do check out the webinar replay where we share on why we think City Developments...

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Thoughts on City Developments Ltd (Webinar)

Almost every Singaporean would have heard of City Developments Limited (CDL). CDL is one of Singapore’s top property developers and is a leading global real estate operating company with a network spanning 29 countries and regions. The Company not only does real estate development, they own multiple top grade office buildings as seen by the Grade-A office buildings in CBD, Singapore and has a hotel business segment branded as Millennium & Copthorne Hotels (M&C). The Capital Cycle CDL being a property developer would be subjected to the ups and downs in business cycles otherwise known as market cycles. I have...

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7 Sins of Investing – Pride

Having covered Sin 1: Lust in the previous article, I will be covering on Pride in today’s article. Sin 2: Pride – Being Overconfident Everyone possesses an egoistical side, that need for face. Males more so than females. There are always moments in our life where we are blinded by our own pride/overconfidence. This could be us thinking that since we are working in a certain industry, we somehow become experts in it or years of successful investment returns resulting in us thinking we are investment professionals. At times, just by owning a good, that sense of ownership results in pride and resulting in...

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7 Sins of Investing – Lust

Having covered on the Seven Sins of Fund Management previously, I would be covering on the Seven Sins of Investing. Investors have been constantly making the same mistakes that have landed them in trouble for decades. They are either enticed by the latest trending company, crowd mentality, overlooking important details, etc. In this series of Seven Sins of Investing, I would be devoting each subsequent post on each sin. “When it comes to money, we are operating as if we were in the jungle, having to deal with predators like tigers,” says Brad Klontz, a clinical psychologist and associate professor of financial planning at...

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Thoughts On Temasek’s Offer For Keppel Corporation Shares

Just yesterday, Temasek has announced that an indirectly wholly-owned subsidiary of Temasek Holdings – Kyanite Investment Holdings will be making a partial offer to acquire 30.55% of shares in Keppel Corporation at S$7.35 per share in cash. You may read more on this here. Currently, Temasek already owns 20.45% of Keppel Corporation and if the deal goes through, Temasek’s total holding will rise to 51%. At the offer price of S$7.35, it represents a premium of approximately 26% over the last traded price of S$5.84 and a premium of approximately 21% over the volume weighted average price of S$6.07....

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Seven Sins of Fund Management

Over a decade ago, James Montier penned a white paper titled Seven Sins of Fund Management. It covers the most common behavioural biases among investors and makes for a timeless, enlightening read. While the full report is 105 pages long and can be found here, we will be summarising this report in this article today. Sin 1: Forecasting An enormous amount of evidence suggests that we simply cannot forecast. Montier suggests that anchoring bias and over-confidence cause investors to continue relying on forecasts in their investment decisions. Sin 2: The illusion of knowledge Investors appear to believe that they need to...

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Ways to Prevent Losses When Investing

Most financial articles out there focus on methods of generating profits and discuss upside potentials of companies. They talk about how you can make tons of money but never on how you can avoid losses. It is an inherent characteristic where we tend to avoid pain, loss and regret by focusing on the more positive aspects of life. This attitude, however, won’t get you far in investing. Many investors out there lose money, but we only hear about the stories of overnight superstar traders. The entire financial media is upwards biased so don’t take everything as the entire picture!...

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Investment Ideas: Singapore Banks

Recently, I have had the pleasure of chatting with my friend, Stanley over at Value Invest Asia, another great blogger within investing circles. We talked about a range of topics from the investment strategy to one of our investment ideas in the markets today – namely the Singapore Banks. Stanley has kindly recorded the whole interview and interested investors can watch it via the youtube video below.  For readers interested to read the full transcript, we will be sending it out by the end of this week. For those interested, do leave your name in the google form...

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Common Investing Mistakes To Note

Very often, we come up with a solid plan ready to conquer the world and dive head in eager to grow our portfolios. No matter how ready we are, we are bound to make mistakes. Being aware of the pitfalls will decrease the likelihood of you committing the same mistakes too. In this article, we will be guiding you through the entire process step by step, highlighting the common mistakes most investors make while investing. Preparation Being ill-prepared. After seeing how your friends are making big bucks off the financial market, you may feel like there is absolutely no need...

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3 Criteria When Buffett Looks For Companies

Investors face tough decisions when it comes to finding investable companies. Analysing the huge amount of data available out there is crucial when trying to find investment ideas that is suitable for ones portfolios. This can be an arduous process. So, how should individual investors interested in purchasing stocks find investment ideas? What investment criteria should they be using when shortlisting a list of potential companies? Therefore, developing a simple set of investment criteria to follow can make the shortlisting process a much simpler task. In today’s article we will be sharing on 3 key investment criteria Buffett uses...

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4 Key Pillars of Deep Value Investing

As deep value investors, we seek out low-risk investments that have great upside potential. Such ideal investments do not exist in the eyes of the academics. Since the advent of the financial market, it is clear the deep value investing produces phenomenal performance over the long run. If your time horizon is more than 3-5 years, deep value investing is definitely the way to go. Warren Buffett, a legendary value investor, best years were when his fund was still budding. When his funds were smaller, he was able to utilize the deep value approach to generate such phenomenal performance...

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Brief Introduction to Capital Cycles

There are many ways to search for deep value opportunities in the financial market. Some wait for financial events that affects several companies temporarily. Often, such cases may surface stocks with depressed prices far below their intrinsic value. However, there is little certainty if you’d wait for such random sporadic events. Years may go by and opportunities may not even arise. There is nothing wrong with looking out for such situations. However, to make the searching process more intelligent, we start by asking a few questions. When do these opportunities usually arise? What should you be looking out for?...

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Thinking About Operating Leverage

We, as retail investors, tend to extrapolate financial performance into the future. It’s a simple and useful technique of gauging normalised earnings power, provided it is done in the right scenario. However, there is one situation where simple extrapolation of profitability will yield very misleading results. That is when a company has high operating leverage. What is operating leverage? Operating leverage measures a company’s fixed costs as a percentage of its total costs. A company with a large proportion of fixed costs (high operating leverage) will earn a large profit on each addition unit of product sold. For such...

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How Behavioural Biasness Affects Investment Performance [Part 2]

This article is the second part of a two-part series on aspects of behavioural biasness that are important in our daily lives as a value investor. If you have not looked at the first article, I strongly encourage you to do so before reading on. To summarise, the following are the three aspects we have shared with you in the first article: Power of incentives Denial Consistency and Commitment Why is having a basic awareness of behavioural biasness so important? Having the knowledge equips us with the tools to make better decisions. Being conscious of the common psychological pitfalls...

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Thoughts On FED Rate Cut

So just last night, the US Feds declared that they will be cutting the interest rates by a quarter point. You may read more about it here. However, I just wanted to point out this excerpt from the article that I found rather interesting. Markets were also looking to Mr. Powell for more. The widely expected move from the central bank was initially greeted with a shrug in financial markets, where investors have been factoring in a rate cut for months. But the stock market turned lower after Mr. Powell began his news conference at 2:30 p.m., as investors...

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