7 timeless pitfalls of investing

Regardless of institutional or retail investors, chances are, they would have committed these sins at one point or another. 1) Placing forecasting at the very heart of the investment process. An enormous amount of evidence suggests that investors are generally hopeless at forecasting. So using forecasts as an integral part of the investment process is like tying one hand behind your back … [Read more...]

San Teh revisited

1.5 years ago, I made a posting on San Teh: http://level13-analysis.blogspot.com/2008/05/appraising-san-teh.html Now I feel its time to sit up and take notice of this sleepy stock again. For the last 6 months, it has been trading at $0.25 to $0.35 with low daily volume. San Teh is currently in a sweet spot to ride on China's construction and infrastructure boom. The catalysts for its share … [Read more...]

Heads you win. Tails I lose!!!

I have to interupt the dummies posting with this latest development from one of the S-chip companies. The majority owner of China Precision has decided to take the company private by offering S$0.28 to buy back all existing shares it does not not own. I am not a stakeholder in China Precision. Nevertheless, ALL MINORITY SHAREHOLDERS SHOULD REJECT THIS OFFER! Why do I say that? Below are some … [Read more...]

Dummies guide to crisis 2007-09 (Part 1 of 4)

When the financial crisis erupted full force in the second half of last year, there was panic all round. This and the next posting will focus on the banks' contributing role in the crisis. Before going into details, one has to understand the basic principles on which the banking system operates. Students at the A-level are taught about "multiple deposit creation," It is the most rudimentary … [Read more...]

Greed and ‘good’ GDP

Once again, greed has reared its ugly head after a hiatus of 18 months. Investors are tripping over themselves for a piece of the action in the world's second best performing stock market. Recently, about half a million new trading accounts are opened in China and the index went up to 3296, a level not seen since June 2008. Many are optimistic that the country can attain the government-set goal … [Read more...]

The surge in China’s stock market & real estate prices

Investors are rightfully worried about the formation of asset bubble after the revelation that Chinese banks lent out US$670.9 billion, a full 91.6% of the country’s lending target for the year in the first quarter. Most are wondering if it was being directed into areas conducive to a long-term recovery. With such a huge sum of money flowing around, coupled with lax regulation and tracking by the … [Read more...]

No better way to lose – Jackpot machines

Last November, a 49-year-old man won the largest UK jackpot ever - playing an online slot machine. His take was £2,086,585. This, despite what we know to be a universal truth: slot machines (jackpot machines) are the worst bet of them all. They take much more than they give. The maths, the science and the psychology are all against you. It's why the machines are the darlings of the casinos: … [Read more...]

Pay 83% premium for hope?

The Singapore stock market has gone spectacularly over the past few months. It would be foolhardy to say otherwise. Apparently, the sense of optimism is now so strong that some speculators are willing to pay a premium of 83% for hope. Enporis Greenz Limited was formally known as Seksun Corporation Limited, which was principally involved in the manufacture of high-precision metal components and … [Read more...]

Current outlook of S-REITs

Real Estate Investment Trusts (REITs) in Singapore are struggling for the first time since CapitaMall Trust, the first S-REIT, was listed in July 2002. Before the US sub-prime crisis took its toll on the economy and property market in Singapore. Like their Asian peers, S-REITs have taken a beating since mid 2008. S-REIT prices have fallen by an average of 61% between end 2007 and 2008. Their … [Read more...]

Thinking from the business perspective

Collin Yeo said... uptrending share price tells you nothing on the business and industry outlook"So what does? Consistent CAGR, strong cashflow, earnings and dividends? What if these doesn't translate into uptrending share price? Would you still buy into the company? Collin, the 4 points you mentioned above form only part of the metrics that an investor should take note of. The list is not … [Read more...]

Beware of interested party transaction

C&G used to be a stock market darling from 2006 to 2007. But this should no longer be the case going forward with their latest announcement. Basically, C&G is signalling to its investors that there is not much light at the end of the tunnel for the textile industry. To me, textile is a commodity and there is no pricing power for companies in this industry. Of course, this does not mean … [Read more...]

Iconic major shareholder holds the upper hand

On 11 March, major shareholder, Tong Jun Kian, announced a mandatory unconditional cash offer for all issued shares of Iconic Holdings (IHL) after having acquired an additional 10.21% stake from Akzo Nobel Coatings via a married deal, increasing his total shareholding interest, together with the relevant persons, in Iconic to 57.12%. The shares are being offered at $0.10, an approximate 20% … [Read more...]

Beauty China turns ugly duckling

To say that it has been a roller coaster ride for the shareholders of Beauty China (BC) in the past 2 days is a gross understatement. No retail investor could have been prepared for the extreme volatility that we have witnessed on BC’s share price. On the morning of 2nd March, BC called for a trading halt pending announcement. BC closed at $0.37 on the previous Friday (27th Feb). The much-awaited … [Read more...]

Value destruction by Contel

I pity those investors who are vested in Contel since their IPO days (although i dont think the number is high). 1.5 years ago, i had a posting, in which i advised all investors to avoid Contel due to its constant and urgent need for capital. On top of that, free cash flow was non-existent. http://level13-analysis.blogspot.com/2007/07/raising-capital-at-contel.html Let me do a recap on the … [Read more...]

Price movement of DBS shares over the past month

The price of DBS has fluctuated greatly in the past 1 month or so. This increase in volatility has benefited short term traders. Fundamentally, there is no change in the business condition and environment that DBS is operating in. All said, these movements are not unexpected and can be anticipated if one is able to understand the effects of corporate actions and read the market well. I am not … [Read more...]

Hear no evil, read no evil

“Many stock commentators are saying that stocks are cheap, dividend yield is high, time to buy.” “A value investor should not be obsessed about short term fluctuation. Long term value is more important. Now is the time to ferret out the wheat from the chaff.” “If it is because of a short term bull market that commentators recommend/ investors buy stocks, it is speculation. Those commentators … [Read more...]

Short term bull, long term bear

Last Friday, the STI closed at 1829.71 points. Within 1 week, it went up 5.15% from around 1740 points. The picture on the right shows that the STI has breached the 50 day moving average ever since it went below that line in June 2008. This indicates a short term bullishness in the market right now. I expect the STI to go higher in the next few weeks and the reasons are as follows: 1) The Obama … [Read more...]

Desperate, Bold Step by DBS

DBS announced today that it will be issuing rights to raise net proceeds of approximately SGD4 billion. Pursuant to the Rights Issue, 760,480,229 Rights Shares will be offered at SGD5.42 per Rights Share on the basis of one Rights Share for every two Shares held. At this moment, there are 2 burning questions on the investors' minds. Why the need to raise capital? Why now? After reading all the … [Read more...]

Updates on Bright World takeover

Recently, the share price of Bright World(BW) came under further pressure as a result of a letter sent to its directors from the Monetary Authority of Singapore (MAS), referring to a possible breach of section 203 of the Securities and Futures Act. What is section 203 of the Securities and Futures Act? Section 203 (Continuous disclosure) shall apply to — (1)(a) an entity the securities of … [Read more...]