Author: Market Uncle

I bought MacArthurCook Industrial REIT on 18 Nov — a bet gone wrong?

Some history 6 November 2009: MacArthurCook Industrial REIT (MI-REIT) announced a severely value destructive recapitalisation plan on the 6 November 2009. 11 November 2009: Cambridge Industrial Trust (CIT) annouced the usage of $10.5m out of $28m from recent private placement to acquire 9.76% interest in MI-REIT. 16 November 2009: CIT alerted MI-REIT unitholders to the value destructive nature of the recapitalisation plan and urge them to vote against the resolution at the EGM on 23 November. They intend to vote out the managers of MI-REIT and install themselves as the manager of the REIT. 17 – 20 November: Separate...

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Cut loss on United Food and Ocean Sky, invested into Suntec REIT on 28 Oct 2009

United Food Holdings Mistakes are mistakes, no matter how they are packaged. United Food Holdings is one of the most spectacular value destructing business on my portfolio. Starting with a huge cash horde which translates into a large cash per share, it can easily qualify as one of my best cigar butt. But as time go one, the management demostrated outstanding capability to drain it with seemingly failed but huge investments (land, soya beans). Ocean Sky International Unlike United Food Holdings, I did not classify Ocean Sky as a cigar butt in the beginning. However, just like any typical...

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Cut loss on United Food and Ocean Sky, invested into Suntec REIT on 28 Oct 2009

United Food Holdings Mistakes are mistakes, no matter how they are packaged. United Food Holdings is one of the most spectacular value destructing business on my portfolio. Starting with a huge cash horde which translates into a large cash per share, it can easily qualify as one of my best cigar butt. But as time go on, the management demostrated outstanding capability to drain it with seemingly failed but huge investments (land, soya beans). Ocean Sky International Unlike United Food Holdings, I did not classify Ocean Sky as a cigar butt in the beginning. However, just like any typical...

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Took profit on Cambridge Industrial Trust and Courage Marine on 2nd October 2009

Rationale Both had almost doubled in share price since I acquired them. For past investments, I would have sold 1/2 of my holdings to recover my capital and let the ‘profit’ grow. But for Cambridge Industrial Trust (CIT) and Courage Marine, I decided to trim my holdings by about 1/3 each instead. I decided to keep more of their shares because I am still confident of their potential to grow much further once the regional and global economy recover strongly. On the other hand, I still took some profit because no matter how big that potential is, I prefer...

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Reinvested remaining proceeds from SPC into KS Energy on 29 September 2009

Motivation Despite the recent oil price correction from above USD $147 last year to current level fluctuating around USD $70, I believe the demand for crude oil for energy needs, and accompanying support services will surge again as the world economy gets back on its footing. KS Energy KS Energy operates in the oil & gas industry. It has 2 main core business segments, trading of capital equipment and provider of capital equipment chartering, drilling and rig management services. It is the latter that I see potential. Business Performance Ignoring other operating income that normally arose from divestment of...

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Reinvested remaining proceeds from SPC into KS Energy on 29 September 2009

Motivation Despite the recent oil price correction from above USD $147 last year to current level fluctuating around USD $70, I believe the demand for crude oil for energy needs, and accompanying support services will surge again as the world economy gets back on its footing. KS Energy KS Energy operates in the oil & gas industry. It has 2 main core business segments, trading of capital equipment and provider of capital equipment chartering, drilling and rig management services. It is the latter that I see potential. Business Performance Ignoring other operating income that normally arose from divestment of...

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Investing in gold, a worthwhile option?

As gold price rose past USD 1,000, there seems to be a renewed interest in investing in gold. I am pretty curious to find out whether this is a worthwhile adventure. USD quoted commodities As with many commodities such as crude oil, gold is quoted in USD. When USD depreciates against major world currencies, gold prices tend to rise in assumption value of gold remains unchanged (neglecting inflation to keep the discussion simple). If this assumption is true, then investing in gold for anybody leaving outside United States becomes more of forex investment than commodity investment. Is gold expensive...

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Investing in gold, a worthwhile option?

As gold price rose past USD 1,000, there seems to be a renewed interest in investing in gold. I am pretty curious to find out whether this is a worthwhile adventure. USD quoted commodities As with many commodities such as crude oil, gold is quoted in USD. When USD depreciates against major world currencies, gold prices tend to rise in assumption that value of gold remains unchanged (neglecting inflation to keep the discussion simple). If this assumption is true, then investing in gold for anybody leaving outside United States becomes more of a forex investment than a commodity investment....

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Reinvested funds from SPC divestment in Thomson Medical Centre on 28th August 2009

Motivation I see potential in SPC and was prepared to hold on for the long term since I got it when the oil industry was in its doldrums. I was still hopeful that more than 10% of minority shareholders of SPC could hang on to their shares. Unfortunately, PetrolChina easily collected more than 90% of SPC’s shares and ‘forced’ me to divest my holdings. As a consolation, at least I’m fortunate to make slightly over 120% on my investment in SPC. Anyway, with funds I raised from my sale of SPC, I plough some back into the market and...

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Reinvested funds from SPC divestment in Thomson Medical Centre on 28th August 2009

Motivation I see potential in SPC and was prepared to hold on for the long term since I got it when the oil industry was in its doldrums. I was still hopeful that more than 10% of minority shareholders of SPC could hang on to their shares. Unfortunately, PetrolChina easily collected more than 90% of SPC’s shares and ‘forced’ me to divest my holdings. As a consolation, at least I’m fortunate to make slightly over 120% on my investment in SPC. Anyway, with funds I raised from my sale of SPC, I plough some back into the market and...

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Traded Tsit Wing for Food Junction on 28th August 2009

With this, I officially threw in the towel on Tsit Wing, making a meagre 8.5% (taking dividend into account) over 3 years. I could either continue to wait for their restructuring efforts to pay off (assuming they aren’t taken private successfully) or look somewhere. I chose the latter given the lack of visibility on how long the wait could be amid deteriorating performance, beginning even before the financial crisis started. Food Junction As the world economies embark on the uneven road towards recovery, opportunities to invest in cyclical businesses trapped in cyclical doldrums get harder to come by. After...

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Traded Tsit Wing for Food Junction on 28th August 2009

With this, I officially threw in the towel on Tsit Wing, making a meagre 8.5% (taking dividend into account) over 3 years. I could either continue to wait for their restructuring efforts to pay off (assuming they aren’t taken private successfully) or look somewhere. I chose the latter given the lack of visibility on how long the wait could be amid deteriorating performance, beginning even before the financial crisis started. Food Junction As the world economies embark on the uneven road towards recovery, opportunities to invest in cyclical businesses trapped in cyclical doldrums get harder to come by. After...

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I bought Super Coffeemix Manufacturing Ltd AGAIN on 13th August 2009

Rationale Super Coffeemix just announced its 2Q 2009 results which I deemed as encouraging (though not as superb without its fair value adjustments on its investment securities). Performance over the last several quarters The table below summarises its quarter performance: A few things to note: Operating profit seems to bottom out in 4Q 2008. Ignoring fair value adjustments of its investment securities, net profit seems to bottom out only in 1Q 2009. Revenue also seems to bottom out in 1Q 2009. Conclusion It remains to be seen whether improvements in 2Q 2009 is sustainable but looking the general numbers,...

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Condominiums – Opportunity or Trap

Upgrade or downgrade? I came across the following article in the 联合早报: 是享受还是受罪. It described someone nearing retirement who ‘upgraded’ to a condominium of 102 sqm and a new mortgage to pay off, by selling his fully paid up EA flat of 145 sqm. When enquired about his rationale, the simple answer was ” no choice, for the comfort, for a better external outlook, will have to suffer a bit”. Selling like hot cakes I read with both amusement and amazement of the recent craze for condominiums, with new units flying off the shelf like hot cakes. Am I...

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Condominiums – Opportunity or Trap

Upgrade or downgrade? I came across the following article in the 联合早报: 是享受还是受罪. It described someone nearing retirement who ‘upgraded’ to a condominium of 102 sqm and a new mortgage to pay off, by selling his fully paid up EA flat of 145 sqm. When enquired about his rationale, the simple answer was ” no choice, for the comfort, for a better external outlook, will have to suffer a bit”. Selling like hot cakes I read with both amusement and amazement of the recent craze for condominiums, with new units flying off the shelf like hot cakes. Am I...

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