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January 2012 Portfolio Review and Final Post

Musicwhiz — Tue, 31 Jan 2012 09:28:00 +0000

It is with some bittersweet feeling that I pen this last and final post, along with my portfolio review for January 2012. As mentioned in my previous portfolio review for 2011, heavier work commitments and a desire to spend more time with family and friends has resulted in my decision to stop blogging after this final post. However, please be assured that all historical posts and information will be left intact, so readers can continue to browse and access sections of my blog for information and learning.

For the month of January 2012, I added about $10,200 worth of SIA Engineering to my existing holdings, as I noted that there was quite a vicious and unexplained sell-down on one of the days of the month (I think it was January 13, 2012) which allowed me to comfortably pick up some lots. As a result of this, and interestingly, at …

My Value Investing Journey

Musicwhiz — Thu, 26 Jan 2012 00:15:00 +0000

It has been about 4.5 years since I first started serious blogging about investing and investment, and since then it has been a very steep learning curve for me in terms of acquiring knowledge, improving my analysis and sharpening my focus on companies. At the same time, I had also acquired important character traits and temperament which also aided in my journey to compound and grow my money. I guess this second-last post is to summarize my journey so far, and to collate all that I had learnt. I will also be penning down my plans in the medium-term, and how I plan to grow my portfolio; along the way I will also talk a bit about personal finance and its importance in helping one achieve one’s money goals.

Acquiring the right skill set and mind set for value investment

I guess you could say that I started out …

Value Investing Recap Part 2 – Psychology and Temperament

Musicwhiz — Thu, 19 Jan 2012 16:09:00 +0000

Part 2 of my investing recap will focus on the psychological, mental and emotional aspects of investing, which are arguably just as important (if not more) than the quantitative and qualitative aspects of analysis into a Company and its business model. This is because having the wrong psychology can often scuttle an investor’s best intentions, even if he is a certified expert in analysis. The inability to control and master destructive emotions can cause significant losses for an investor and result in him not being able to preserve capital. Behavioural Finance is a very new field which combines finance theories with psychology to come up with models of investor behaviour which deviate from the rational and logical “standard” model. I will be touching on aspects of behavioural finance research with quotes and simple examples from the book “Investing and the Irrational Mind” by Robert Koppel. At the same time, I …

Value Investing Recap Part 1 – Research and Analysis

Musicwhiz — Sat, 14 Jan 2012 15:17:00 +0000

As part of my concluding posts for this month, I shall be doing two major recaps on value investing and will be focusing on two major aspects which I feel are equally important if an investor wishes to obtain a successful, consistent and decent return on investment. These two sections shall be split into “Research and Analysis” which gives a revision on what one should focus on with regards to the numbers, financials and operating statistics; and “Behavioural Finance and Temperament” which sums up the emotional fortitude and attitude an investor should have when he approaches investing and the stock market. I guess readers can take these two posts as a final culmination of my 4.5 years of blogging and intensive thinking and analysis on various companies. I shall give my best attempt to distil my current knowledge and understanding of the proper concepts of investing into these two …

December 2011 Portfolio Review and FY 2011 Year-End Review

Musicwhiz — Sat, 31 Dec 2011 04:00:00 +0000

For this year-end review, I will be doing a comprehensive review of various aspects of my portfolio, covering cost, yield and also benchmarking against the STI during various months of the year. The reason for this is to get a better understanding of how my portfolio has been growing to date and over a period of two years, and how my returns have been affected (if at all) by the recent crisis. Another aspect which I will be looking at is the benchmarking as it would indicate whether I should simply stick to index funds or whether I should doggedly continue my pursuit of analysing individual companies and investing in them. Obviously, if my stock-picking skills are so bad that they stink, I would be better off saving my own time buying into ETFs than wasting it on futile analysis. At the same time, at the end of each section, …

Boustead Singapore Limited – 1H FY 2012 Analysis Part 3

Musicwhiz — Mon, 26 Dec 2011 05:26:00 +0000

Part 3 will be interesting, as I delve into Boustead’s leasehold property portfolio and also its dividend history. I guess I had already mentioned quite a bit about Boustead’s prospects based on its divisions in prior reviews and analyses, therefore I shall not dwell too much on the same facts again in case I start putting readers to sleep! Basically, the underlying thrust of the Group’s strategy is still the same, though of course they are shifting their focus to earn more recurring income from their real-estate portfolio rather than endure the lumpiness from their Water and Oil and Gas divisions. This will be a slow and ongoing process and I am willing to wait as “Rome was not Built In A Day” to use the popular phrase.

Boustead Leasehold Property Portfolio

As can be seen in the table above, Boustead currently has nine leasehold properties in its portfolio, and …

Property Chilling Measures

Musicwhiz — Wed, 21 Dec 2011 10:00:00 +0000

Readers would know that I seldom blog about property (there are only five posts on this in the last four years!), as I am generally not very good in this area and am still experiencing my steep (and extended) learning curve. There are so many aspects to consider when it comes to investment property that it would take many years to really understand how things work, including the witnessing of the entire bull-bear cycle which is far more drawn out as compared to a full stock market cycle. My last post on property in June 2011 centred mainly on expectations and the so-called “Perfect Storm” (record supply of land, falling demand and rising interest rates). Note that about 6 months since then, all these have yet to come to pass, which is why I feel the Government has suddenly introduced another set of harsh (some even say draconian) measures …

No related posts.

Boustead Singapore Limited – 1H FY 2012 Analysis Part 2

Musicwhiz — Fri, 16 Dec 2011 10:00:00 +0000

Part 2 of this three-part analysis will focus mainly on divisional analysis, as Boustead has four very distinct divisions which make it one of the harder conglomerates to put a value to. The interesting thing about Boustead which has somehow eluded me all these years (but which has somehow perplexed many an analyst) is that it has four disparate divisions which makes it a very difficult company to classify. On one hand, it is not an oil and gas company even though it has a strong energy-related engineering division and has contracts in many countries around the world for waste heat recovery and boiler systems. Neither is it purely a real estate development company though it has a large (and growing) portfolio of industrial leasehold properties and is considered a niche player in the biotech, logistics and aerospace industries. The best way to describe the company to someone (and mind …

Personal Finance Part 26 – Wealth Cannot Last More Than 3 Generations

Musicwhiz — Sun, 11 Dec 2011 04:00:00 +0000

The above title represents a very intriguing concept which has been known to the Chinese for millennium, and there is even a Chinese Idiom which states so “Fu Bu Guo San Dai”. Interestingly, while reading “Millionaire Teacher” written by Andrew Hallam (a new book written on investing and personal finance, written by middle-class millionaire teacher Andrew Hallam), I also discovered that he had written about the exact same phrase, though he did not elaborate too much about it. Basically, this teaches us that wealth earned by the first generation can seldom, if ever, last past three generations. The reason for this is so obvious in its simplicity that it is surprising that most adults fail to grasp it – money which is not “earned” tends to be squandered. How does this fit into personal finance? A lot can be learnt about how people behave under various circumstances, and I will …

Boustead Singapore Limited – 1H FY 2012 Analysis Part 1

Musicwhiz — Tue, 06 Dec 2011 10:00:00 +0000

Boustead released their 1H FY 2012 results on November 14, 2011, and frankly it was not as disastrous as I had anticipated, considering there was an economic tsunami at our doorstep which would affect most companies. Though the numbers did not look spectacular, the Group put up a credible performance in general, with my only grouse (for the last few years, actually) being Water and Wastewater Division.

This analysis will be split into the usual three parts. Part 1 will touch on the financial statements, including income statement (briefly), Balance Sheet (more important) and Cash Flow Statement (the lifeblood of any company). Part 2 will focus on divisional analysis, and will break down the contributions by each division to Group revenue and PBT, and compute PBT margins as well. Part 3 will discuss Boustead’s industrial leasehold asset portfolio, dividends and also the plans and prospects moving forward, and how …

November 2011 Portfolio Summary and Review

Musicwhiz — Wed, 30 Nov 2011 09:22:00 +0000

November 2011 will go down as the month where the Euro crisis escalated in severity, as even Italy, Germany and France got into some form of trouble. With no ready solution in sight, it looks as though Mr. Market will remain pessimistic for the foreseeable future, which means it is a good environment indeed to consider the purchase of equities. In the USA, political wrangling also ensured that there was no ready fix to their burgeoning debt crisis, which is threatening day by day to spiral into something as huge and unmanageable as the Euro Crisis. To add fuel to the already raging fire, China has also announced a sharp and unexpected contraction in its purchasing index, which signals a sharp decline in manufacturing activity. With housing in decline as the Government there reins in runaway prices, the prospect of a hard landing has spooked investors worldwide and stoked the …

MTQ – 1H FY 2012 Analysis Part 2

Musicwhiz — Sat, 26 Nov 2011 02:00:00 +0000

Part 2 of this analysis will focus more on the qualitative aspects of MTQ – the sections which many analysts find tough to quantify, but which I feel is also extremely important for any analysis to be complete. Note though that these observations were made from a combination of interactions with Management, articles/interviews with The Edge Singapore and my own opinions and conclusions drawn out from the facts and data.

Oilfield Engineering – Bahrain Operations

As early as Jan 2010, MTQ had already announced their plans to expand into the Kingdom of Bahrain, and steps and processes had been put in place to gradually ease their way into the Middle Eastern country, from the purchase of equipment to the hiring of staff and the engagement of a main contractor to carry out construction of the Facility for their Phase I expansion. At the time, very good reasons were provided (which, …

SIA Engineering – 1H FY 2012 Analysis Part 2

Musicwhiz — Mon, 21 Nov 2011 10:00:00 +0000

Part 2 of this analysis shall focus more on the operational and qualitative aspects of the Company, and will be shorter (thankfully!) than Part 1. I will touch briefly on operational performance, major events (for MRO and JVs) as well as talk a little about prospects for SIAEC in a new untapped consumer segment for airlines.

Operational Performance

Line maintenance saw a +4.4% increase in flights handled at Changi Airport, from 54,546 to 56,967 for the half-year. The good news is that four new contracts were signed with established companies such as UPS and DHL (logistics and freight forwarding companies), while three contracts were renewed (Jetstar Asia, Air China and Air Mauritius). The issue I have is that the presentation slides do not show if SIAEC actually lost any customers. If we assume that they are simply building on their base with four new contracts then it would …

MTQ – 1H FY 2012 Analysis Part 1

Musicwhiz — Wed, 16 Nov 2011 10:00:00 +0000

MTQ released their 1H FY 2012 results on the morning of October 31, 2011, and it capped a long-awaited update from the Company after its recent spate of acquisitions and troubles in Bahrain. Suffice to say that I did wait with some trepidation for the results and had expected it to look very poor due to the high amount of leverage taken up not just for the expansion in Bahrain, but also for financing the deal for the acquisition of Premier Sea and Land (PSL). This analysis will, like SIAEC’s, also be divided into two parts for ease of reading.

Part 1 will dwell on the usual financial numbers and key ratios (which have sadly deteriorated), as well as discuss on cash flows and dividends; including financial effects of recent corporate developments. Note that since 1H results did not include a detailed segmental breakdown of revenues and operating profits/margins, …

MTQ – 1H FY 2012 Analysis Part 2

SIA Engineering – 1H FY 2012 Analysis Part 1

Musicwhiz — Fri, 11 Nov 2011 10:00:00 +0000

SIA Engineering (SIAEC) released their 1H FY 2012 results on October 28, 2011; and following that on October 31, 2011, they released a set of presentation slides which were used to present to analysts at the analyst briefing. Since it has been a while since my original purchase of SIAEC, and subsequently I had also added to my initial position on two separate occasions, I thought it timely for me to do an analysis and review of the Company. I shall limit the analysis to the financials, cash flows, associates and joint ventures (JV), dividends as well as some of the qualitative aspects and growth prospects for the Company. This shall be divided into two parts for ease of reading.

Part 1 shall focus mainly on the financials and numbers including the year on year comparisons and nine-year history, cash flow categories and presence of free cash flow (FCF), …

Personal Finance Part 25 – Holistic Tracking of Personal Finances

Musicwhiz — Sun, 06 Nov 2011 04:00:00 +0000

When thinking about personal finance, a colleague once asked me if my wife and I keep track of our spending and our mortgage balance, as she was also keen to settle down with her husband soon and wanted to find out the proper way of managing finances. This made me do some soul-searching and think about how I was personally monitoring my financial life and what spreadsheets I had on me which helped me to achieve this. Thus, this post is about the different aspects of one’s finances which one should track in order to ensure most bases are covered and you do not receive a “nasty surprise”. Unsurprisingly, it is Singapore-focused and some aspects (such as CPF) may not be applicable to international readers. However, I do feel that it is comprehensive and would welcome further constructive ideas or suggestions from readers on how to improve further.

The need …

October 2011 Portfolio Summary and Review

Musicwhiz — Mon, 31 Oct 2011 10:45:00 +0000

October 2011 was somewhat weird, considering the negative sentiment which pervaded stock markets and the economy from August to September 2011 seems to have somewhat dissipated. In fact, in an embarrassing turn of events, the local market has rocketed up more than 10% after I wrote my piece on “My Second Bear Market”, and is a testament to how difficult it is to gauge and predict short-term market movements with accuracy. Apparently, that post is now irrelevant, but I assure that the lessons learnt are still applicable and the fact that I am able to say that my financial position has improved should at least be of some comfort to me. I am also proud to admit that I have absolutely and completely no skill or special foresight in predicting market movements, so for readers who have somehow stumbled upon this blog looking for something akin to the Holy Grail, …

Boustead – FY 2011 EGM Highlights Part 2

Musicwhiz — Wed, 26 Oct 2011 06:00:00 +0000

Here is Part 2 of the highlights from Boustead’s recent EGM held on October 13, 2011 at Starhub Green.

On Energy-Related Engineering and Water and Wastewater Engineering Divisions

I was rather concerned about how the state of the world economy had affected oil prices, to the extent that they had hit one-year lows recently. When I asked about how this would impact the energy-related engineering division, the reply was that oil and gas will always be an integral part of the requirements for the economy; and the Middle Eastern countries would continue to chug along producing this key commodity for major markets. Boustead’s upstream and downstream divisions are still receiving healthy enquiries, and there were many smaller contracts which were concluded which would not be announced due to their size. Another factor was the secrecy required for contract announcements for this division – some of Boustead’s clients have stringent requirements …