The Small Cushion That Warrants Provide

Posted by (The) Boring Investor | Sep 10, 2017 | Investing |

I have a small, speculative strategy affectionately called the “minion strategy”, which involves throwing a small amount of money into certain depressed stocks that have the potential for a turnaround. The money is mentally written off the moment it is invested. The strategy is described in more details in Meet The Minions. Since the money will be written off anyway, if the stock has a warrant, I would choose the warrant over the mother share, as warrants are cheaper and rise (or fall) proportionally more than the mother shares. One of the recently added minions is Ezion warrant. As...

It Is Possible to Survive a Currency Depreciation

Posted by (The) Boring Investor | Sep 4, 2017 | Market Review and Trends |

Since that fateful day when Britons voted for Brexit a year ago, the British Pound (GBP) has fallen by 11.8% against US Dollars. Worries about Singaporean companies’ investments in UK were raised in the aftermath of the vote. However, the fall in GBP was small fry to one Singaporean company which faced much larger currency depreciation in the countries it invested in. The company is Food Empire, which derived 58% of its revenue from Russia and 13% from Ukraine in 2013. In Mar 2014, Russia annexed Crimea from Ukraine. International sanctions on Russia followed suit. Both the Russian...

It Is Possible to Survive a Currency Depreciation

Posted by (The) Boring Investor | Sep 4, 2017 | Market Review and Trends |

Since that fateful day when Britons voted for Brexit a year ago, the British Pound (GBP) has fallen by 11.8% against US Dollars. Worries about Singaporean companies’ investments in UK were raised in the aftermath of the vote. However, the fall in GBP was small fry to one Singaporean company which faced much larger currency depreciation in the countries it invested in. The company is Food Empire, which derived 58% of its revenue from Russia and 13% from Ukraine in 2013. In Mar 2014, Russia annexed Crimea from Ukraine. International sanctions on Russia followed suit. Both the Russian...

Did Hyflux Make Money for its Ordinary Shareholders?

Posted by (The) Boring Investor | Aug 27, 2017 | Shares & Derivatives |

Hyflux is an interesting case. In FY2016, it reported a net profit attributable to owners of $4.8M but a loss per ordinary share of 7.51 cents. Its net asset value correspondingly dropped from $0.56 in Dec 2015 to $0.45 in Dec 2016. The main reason? There are a few different types of owners of the company. Besides the ordinary shareholders, there are preference shareholders and perpetual capital securities (perps) holders. The net profit attributable to owners of $4.8M has to be shared among these different types of owners. Both preference shareholders and perps holders have prior claims over ordinary...

Buying the Most Expensive Integrated Shield Plan When Young and Downgrading When Old

Posted by (The) Boring Investor | Aug 20, 2017 | Insurance |

Integrated Shield Plans (IPs) are hospitalisation insurance plans offered by private insurance companies to cover hospital stays in public and private hospitals. They are integrated with the basic Medishield Life plan run by CPF. There are typically 3 types of IPs, namely those covering Class B1 wards, Class A wards and private hospitals. For ease of reference, they are named as Class B1, A and P plans respectively. Annual premiums increase with age and are most expensive for Class P plans. For this post, I will use the IPs offered by my insurer as the basis for discussion, since...

No Need to Maximise Profits with Cash of Last Resort

Posted by (The) Boring Investor | Aug 13, 2017 | Investing |

CPF funds are my cash of last resort in investing. I have quite a good record of investing my CPF funds. However, that statement would be incomplete, because majority of the time, the funds are parked in bank preference shares and collecting regular dividends that pay higher than CPF Ordinary Account’s interest rate of 2.5%. On equity investments, there were only 2 occasions when CPF funds were deployed. The first was during the market doldrums during 2000-2003, when I ran out of cash for investments and had to rely on my CPF funds. The second was to buy more...

What Are Driving Those Numbers!

Posted by (The) Boring Investor | Aug 7, 2017 | Shares & Derivatives |

The quarterly earnings season has started and I have been busy reading the financial results. It is sometimes frustrating that the reports do not reveal much about why the business is doing well or poorly and whether the trend will continue. The reports contain a lot of numbers and some discussions, but most of the time, the discussions just regurgitate what the numbers already show. To illustrate what I mean, I will use M1’s financial results as an example, but it is not the only company that has the issue. The figure below from M1’s financial results shows the numbers...

Properties and the Arrival of Robots and Automation

Posted by (The) Boring Investor | Jul 30, 2017 | Property |

Recently, I went to view some houses and realised how expensive houses have become. A 2-bedroom condominium in Jurong could go for $1 million and a 4-room HDB flat in Clementi could sell for $700K to $800K. If you read my past blog posts on Properties, you would know that I am not a fan of properties in the long-term, mainly because of the ageing population in Singapore (see Properties, the Population White Paper and the Land Use Plan for more info). In the past 1 year, I have also begun to worry about robots and automation taking away jobs...

Oil & Gas, Show Me the Orders!

Posted by (The) Boring Investor | Jul 24, 2017 | Shares & Derivatives |

When I sold out of Keppel Corp in Jan at $6.16, my colleague laughed that I had sold too early. Nevertheless, I was pleased to get out of Keppel Corp before it announced results for 4Q2016. I was concerned that orders were not coming in fast enough to replace those orders that had been completed and that Keppel Offshore & Marine (O&M) would show a loss for 4Q2016. True enough, Keppel O&M reported a net loss of $138M for 4Q2016 after asset impairment. I was concerned that Keppel O&M would continue to report losses from that point onwards. Nowadays,...

Interest Rate Hedging Smoke Screen

Posted by (The) Boring Investor | Jul 16, 2017 | Market Review and Trends |

After US Federal Reserve increased interest rates in Dec, Mar and Jun, and after Yellen’s congressional speech last Wed, interest rates are confirmed on the way up. This will impact companies with large debts, especially REITs, as higher interest expense would mean lower distribution for shareholders. The usual response that companies give to questions of rising interest rates is that they have hedged the majority of their loans by swapping floating loan rates for fixed loan rates. However, are such measures adequate to mitigate the impact of rising interest rates? If you ask any person who took up a...

Which KrisEnergy Should I Buy?

Posted by (The) Boring Investor | Jul 10, 2017 |

If you read my earlier post on My Oil & Gas Fightback, you would know that one of the stocks I am interested in is KrisEnergy. The main reason for my interest in this stock is because it can potentially turn around quickly when oil price recovers and become a multi-bagger. However, there are 3 KrisEnergy counters listed on SGX, namely, the KrisEnergy stock itself; a warrant named KrisEnergy W240131, which is convertible to the stock and will expire on 31 Jan 2024; and a zero-coupon bond named KrisEnergy z240131, which will also mature on 31 Jan 2024. Which...

Wills, Trusts, AMDs and LPAs

Posted by (The) Boring Investor | Jul 3, 2017 | Personal Finance |

I just attended a 2-day estate planning talks on wills, trusts, Advanced Medical Directives (AMDs) and Lasting Powers of Attorney (LPAs) organised by RockWills Corp Pte Ltd. There are some interesting facts about them that I share below. Wills Most people know what is a will, so I will skip the basic facts and mention what I learnt from the talk. As you may be aware, you need to identify who are the executor and trustee of the will. The executor is the person who will carry out all necessary actions to distribute the estate according to the wishes...

How Long Would You Hold A Value Stock?

Posted by (The) Boring Investor | Jun 25, 2017 | Shares & Derivatives |

9 years and 11 months! That is how long I held on to a value stock known as Frencken. I recently sold it in Jun at $0.515, having first bought it in Jul 2007 at $0.535 when it was still known as ElectroTech. In between, I averaged down twice, at $0.33 in Jul 2010 and at $0.365 in Jul 2014. The figure below shows the share price performance since May 2005. Frencken Share Price Performance Since 2005 As you can see, for a very long 9.5 years, the share price never recovered to its previous levels, until only recently....

Fundamentals of Stock and Bond Picking

Posted by (The) Boring Investor | Jun 18, 2017 | Fixed Income |

You have probably heard of the study in which monkeys throwing darts on a dartboard with stock names on it could produce portfolios that outperform those picked by professional investors. A few reasons were given for the outperformance, such as size of the companies, Price-to-Book valuation of the stocks, etc. I wonder if the same study were to be repeated for bond picking, would monkeys still outperform professional investors? There is no study on the above, but my answer to it is probably not. When you pick a stock to buy, you are expecting it to change in the...

How to Avoid Cleaning Out Your CPF Balance When You Take a HDB Loan

Posted by (The) Boring Investor | Jun 11, 2017 | Property |

When you apply for a loan from HDB to buy a flat, it will take all the money from your CPF Ordinary Account (OA) before giving you the loan. This is to reduce the loan amount that you need to service. If you wish to avoid an empty OA account, you can temporarily transfer some of your OA balance out of CPF before you apply for the HDB loan. The pros and cons for either approach are discussed in Clean Out CPF Balance When Taking HDB Housing Loan? A reader recently asked me how to temporarily transfer some of...

Author: (The) Boring Investor