Lessons for Investing in OSV Companies from Shipping Trusts

I used to own a number of shipping trusts and lost heavily in them during the Global Financial Crisis (GFC). Like shipping trusts, Offshore Support Vessel (OSV) companies own and charter ships to other Oil & Gas (O&G) companies. Are there any lessons that shipping trusts can teach us about OSV companies? Shipping trusts buy ships and charter them out to shipping companies on long-term … [Read more...]

The Economics of An Oil Exploration & Production Company

Last week, I mentioned that the Exploration & Production (E&P) spending budgets of oil majors hold the key to the recovery of most Oil & Gas (O&G) companies. Moreover, E&P companies are the most direct beneficiaries of the recent recovery in oil price among all O&G companies. This week, we will explore the economics of a small E&P company listed on Singapore Exchange -- Interra Resources. Interra … [Read more...]

The Missing Link Between Oil Price & O&G Profitability

Oil price has moved higher to almost US$50 per barrel recently. Yet, there is a continuous stream of bad news from Oil & Gas (O&G) companies. We had Linc Energy going to voluntary administration in Apr, Ezra reporting quarterly losses of US$283 million at the same time and Technics Oil & Gas going into judicial management recently. Is the disparity between oil price recovery and bad … [Read more...]

Prefs and Perps are Generally Inferior to Stocks and Bonds as an Investment Form

I have been investing in preference shares (prefs) for many years, so much so that I had forgotten that as an investment form, prefs are actually inferior to stocks and bonds. In fact, prefs have been the cornerstone of my equity-centric investment strategy, saving my equity portfolio during severe market crashes, as described in Behind Every Successful Bear Market Recovery is A Cash-Like … [Read more...]

Do Hyflux’s 6% Perps Have Sufficient Margin of Safety?

Hot on the heels of Aspial, Perennial and Oxley, Hyflux has launched an IPO for its retail 6% perpetual capital securities (perps). I used to own its existing 6% preference shares when it launched in 2011. However, that was before I calculated whether it had sufficient margin of safety based on Benjamin Graham's criteria. After I calculated the figures, I sold it off in Jan 2014. Hyflux's … [Read more...]

Understanding Saudi Arabia’s Game Plan on Oil Price

Is the decline of oil price since Jun 2014 a cyclical decline or a structural change? This question has important implications, as it affects whether Oil & Gas (O&G) stocks, which have been severely beaten down, are bargains. If it is a cyclical decline, it is only a matter of time before oil price recovers to higher levels and good business returns to the O&G companies. However, if it … [Read more...]

The Demand and Supply for Oil

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I have quite a number of Oil & Gas (O&G) stocks in my portfolio. Yet, I never go and find out how do the demand and supply curves for oil look like, until Jan this year. The demand and supply curves would provide a clear picture of the territory upon which the battle of O&G would be fought. I always thought that demand would be inelastic while supply would be elastic. It turned out … [Read more...]

Understanding the Accounting for Joint Ventures

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Perennial has successfully launched its second, 4-year, 4.55% retail bond this week. For a discussion on whether the bond has sufficient margin of safety, you can refer to the analysis for its first retail bond here. The purpose of this post is to discuss the accounting treatment of joint ventures (JVs) and associates, using Perennial as an example as it has a fairly detailed breakdown of … [Read more...]

Possibly The Worst Time to Invest – 2 Years On

About 2 years ago, I blogged about setting up a passive portfolio of 70% stocks and 30% bonds and wondered if it could be the worst time to invest. I updated the status of the portfolio a year later in Possibly The Worst Time to Invest – A Year On. In fact, I believe that nothing should stop us from investing and I initiated a second, more spicy passive portfolio last year. You can read more about … [Read more...]

Valuable Info That You Can Only Get From AGMs

It is Annual General Meetings (AGMs) galore these 2 weeks. For most of the past 18 years that I have been investing, I have given AGMs a miss. It was only in the last 2 years that I began to attend AGMs, and I find that there are valuable information that you could only get from AGMs. For a start, very few CEOs are going to volunteer bad news in their Annual Reports or financial statements. … [Read more...]

My Portfolio of Stock Blogs

Besides having a portfolio of stocks, do you also keep a portfolio of stock blogs? I do, and they have made me both a better investor and a better person. Here are some of the stock blogs in my blog list (visible on the desktop version of this blog). BigFatPurse BigFatPurse is one of the few blogs that I always read. I like it because it does not just talk about stocks, but also investor … [Read more...]

The Value of (The) Boring Investor Blog

Today's post is No. 156, which makes it the 3rd birthday for this weekly blog. Usually, the post at this time of the year is on reflection and also some shameless self-promotion. Regular readers can skip this post without missing much. The topic for this year's post is the value of (The) Boring Investor blog. The most direct measure of the value of this blog is the amount of advertising revenue … [Read more...]

Does Aspial’s 5.30% Bond Have Sufficient Margin of Safety?

7 months ago, I blogged about whether Aspial's 5-year, 5.25% bond has sufficient margin of safety. 7 months later, Aspial has launched a new 4-year, 5.30% bond. Since the last blog post 7 months ago, has Aspial's financial strength improved based on the 2 criteria that Benjamin Graham used to analyse bonds, namely, the minimum average earnings coverage and the minimum current stock value ratio? … [Read more...]

Behind Fixed Deposit Home Loan Rates

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Fixed Deposit Home Rate (FHR) loans are loans with interest rates tied to fixed deposit interest rates. Recently, such loans have become quite popular among property owners looking to finance their properties. They like such loans because the interest rates are much more stable than those of the Singapore Interbank Offered Rate (SIBOR) loans. In addition, it is perceived that if banks were to … [Read more...]

Will Bank Deposits Pay Negative Interest Rates?

Negative interest rates have been the rage with central banks around the world, with Bank of Japan being the latest one to join the bandwagon in an attempt to stimulate their economy. Will negative interest rates come to Singapore and will banks pay negative interest rates on our bank deposits?   Just to bring everyone on the same page before I answer the 2 questions, central banks are banks for … [Read more...]

Do Properties or Shares Make Better Investments?

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Singaporeans have a penchant for properties. It is not difficult to understand this, because, land is scarce in Singapore and we often hear stories about people making a lot of money from properties. However, are properties really better investments than shares? A week ago, Today published an article by OrangeTee titled ECs: Gaining Value Over the Long Term, which shows the gains by Executive … [Read more...]

A Comparison of the 3 Local Banks

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A month ago, I mentioned that although the banks have become attractive, there is no more room for errors in my portfolio allocation. Hence, I have not picked up any bank stocks yet. In the past 2 weeks, all 3 banks have reported their earnings for 2015. How do they stack up against one another from the risk point of view? In this post, I will analyse the banks' Non-Performing Loan (NPL) … [Read more...]

Thoughts on Early Retirement – A Year On

Nowadays, seldom do anyone blog about early retirement any more. About a year ago, after I past my 40th birthday, I went through a thinking exercise about early retirement and thought about what should I do if I were to retire, how should I fund my retirement, what are the challenges in retirement, etc. You can read more about these issues in the following blog posts: Retiring at 40 The … [Read more...]

The Evolution of An Investor

2016 marks the 30th year that I have been involved in the stock market. The first 12 years were during my schooling days when I monitored stocks for my father while he was working. The next 18 years were when I invested with my own money after graduation. Looking back at these 30 years, it has been a pretty exciting journey. I experienced the market crashes of 1987 (crash for no good reasons), … [Read more...]

For A Better Tomorrow

These are difficult times for investors. Even for me who have gone through several bear markets, I have felt the stress. However, it is times like these that we learn how to be better investors, building up our strengths in emotional control, investment strategies and stock-picking skills. Bear markets are very good at exposing our mistakes, and learning from mistakes is one of the most effective … [Read more...]