Author Archive

Posted on October 3, 2009 - by SGDividends

Playing It Safe.Growing it Slowly But Surely With a Peace of Mind.

Ok yeah we haven’t been updating for soooo long but well…we needed a break. Anyway the meteoric rise of the stock market makes us sick in the belly as we just didnt have any bullets left to pump in. Haizz…just spraying some water guns here and there..pathetic!!!!!Well guess there is a season for everything and we should be thankful. Anyway, now we have got some money and October does seem to be a potential month where stocks are likely to go down after the euphoria. Why do we say this?

Looking at the Baltic Dry Index which according to Wilkepedia is :
“An assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.” It has been going down since June 09 and some stocks are being squeezed into a tight consolidated range between the bollinger bands which classically signifies a impending move.Besides it well know that in Sep and Oct stocks do dip statistically.
(more…)

Posted on May 2, 2009 - by SGDividends

Stock Market Manipulation – US Markets and elsewhere

Retail brokerage customers generally never learn that they paid money for something that failed to be delivered to their accounts. That is because retail customers’ brokerage account statements do not reveal whether delivery takes place; even when no shares are delivered at settlement, share entitlements are still credited to the buyer’s account. Those credited share entitlements then trade in the market as if they were real shares issued by the company. – WorldAffairsJournal Regulation (Spring 2008)

Huh? What’s the above about? It’s about the practice of selling shares without owning any shares, also called “Naked Shorting” and then failing to deliver the shares. In the US market, they use the term “Failure to Deliver” to describe it. The consequence of this act is to increase the number of outstanding shares of a company and basic economics of demand and supply states that when the supply increases, price goes down.

So, let’s say Company A issued 1000 shares. Anyone who owns 1000 of these shares own 100% of company. Let’s say a hedge fund “naked short” another 1000 shares and “fails to deliver” it. These 1000 “naked short” shares are credited as electronic digits into the buyer’s online brokerage account and are paid for by the buyer. The total number of shares appearing as electronic digits are now 2000 shares, but the number of shares legally issued is only 1000…so what now? The buyer has effectively paid for nothing! It has been said that such practices resulted in many good fundamentally strong companies being driven to bankruptcy in the US and it is claimed that this is rampant in that country. It is also conservatively claimed that about 1% of daily shares volume traded in the US market are such ” phantom shares”.

Guess SGX did a fine job to mandate that investors buy back any naked shorted shares in the market within 1 day or else face a fine of $1000.

Read the articles below for more information. Hmm…we wonder how will the companies issue dividends in this case? Read more…

Posted on April 27, 2009 - by SGDividends

Fundamental Analysis is Useless without Integrity

Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without the First, you really want them to be dumb and lazy., -Warren Buffett

One thing good about this crisis is that it gives people a chance to learn things. Having received that mass circulated email as published in the previous article, we just decided to take a look at a randomly chosen certain textile S- share company that has its shares suspended lately. Below is a snippet of announcement issued by the company on 13 March 2009 where it states that Fibrechem is in default of a loan of US$26,365,581 to a consortuim of local and international banks. So who are these banks?

See below for a snippet of the annoucement made on 22 Aug 2006 by Fibrechem.

What really amazes us is that there was little or no clue based on publicly available information that could have led to somebody predicting this could have happened. By looking at their financial statements, both audited and non-audited that were released, leading up to this default, it seemed that this company was flush with cash and settling bank loans were a non-issue.

See below for the financial statements leading up to the event. Read more…

Posted on April 21, 2009 - by SGDividends

Regarding the Recent Bull Rally – Irritated SGDividends

We are very irritated by CNBC and the presenter whose name is something Cutlow or Cudloh or Cartlow. He keeps talking up the market and sometimes we really wish to stuff his mouth with some spicy chicken drumstick but it will be a waste of money. So well……Anyway our auntie and uncle unofficial radar has detected some interest in stocks of late among their ranks which to us contrarians sounds like a bear market rally. Anyway, we really don’t know and your guess are as good as ours. It’s just eye popping to know that Goldman Sachs has issued a Target Price of $3 for SGX. Wow…way to go man.

So since we are unsure, let us look at the recent past to derive some form of tangible data to work with. Of cos past events might not be reflective of future events but hey….thats the best. Let us look at 3 counters which are pretty reflective of the general market sentiment in Singapore. SGX, DBS Bank ( Our late respect for Richard Stanley) and Keppel Corp.

SGX

Read more…

Posted on April 15, 2009 - by SGDividends

Comparison of Wastewater Treatment Companies Listed in SGX

Ok a reader requested us to provide an overview of the waste water treatment. Before we go on, Wastewater pictureit should be prudent to note that we are not experts, in fact, we are just “wannabes”, you know..those act smart kind who always puts up their hands when the teacher asks questions but answer wrongly……so pls verify…The information is culled from various sources, such as prospectus, reuters, annual reports, analysts reports..e.t.c.

Posted on April 7, 2009 - by SGDividends

Comparison of the Big 3 Local Banks in Singapore

‘We try to stick with businesses we believe we understand. That means they must be relatively simple and stable in character. If a business is complex or subject to constant change we’re not smart enough to predict future cash flows. Incidentally that shortcoming doesn’t bother us.’ – Warren buffet

As we always believe in understanding what we invest in and absolutely subscribe to the quote by Warren Buffet above, we decided to start a project that seeks to understand the underlying business model of the different industries in Singapore. In this first post of this project, we are looking at the local banking industry in Singapore and compare among them, in the hope, to understand them better. As new information is picked up, we will just add into it. In time to come, we should be looking into Plantation industry , Oil and Gas related Industry in Singapore, Property Development industry,Waste treatment industry, Telecommunications industry e.t.c. As we learn, we share cos sharing is caring. Yeah like real……. Does anyone still believe this sissy

Comparison of income sources between DBS, OCBC and UOB banks.

Net Interest Income - Money earned by banks from taking ” low interest bearing” customers deposits to make “higher interest bearing” loans out and earning the interest spread.

Non Interest Income – Any income other than the above. See below Read more…

Posted on April 6, 2009 - by SGDividends

Query about DCA and other Investment Stuff

Hi SGdividends,

Greeting to you and your team, thanks for having such interesting blog to enlighten rookie like myself.

Been following your blog for the past couple months, decide to write to you as i wish to hear more about DCA, currently i’m buying STI ETF via poems SBP at $200 mthly.Appreciate if you can give me more views on such, i’m not sure if i am doing the right thing, however the admin charge of $10.70 is definitely expensive.

On top of STI ETF, i’m looking to get some penny stocks but only have limited capital. 3-4k Myself is a passive investor and since i’m young, time is to my advantage. I’m willing to buy and hold.

Due to the recent bull rally, i can’t help thinking if i really miss out the bottom. Rather than waiting and waiting for the uncertainty bottom, i got to be a little pro-active.

I have shortlisted a couple of stocks, hope to hear from your views if you are comfortable.
Bio-treat
Boustead
Cambridge
Celestial
Epure
FJBen
FSL trust
Gen int
Hyflux water trust
Mercator lines
Midas
RafflesEdu

Your comment is purely taken as suggestion and hold no responsible or liable to whatever that may arise.

( a reader)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Hi Dude,

Based on the above, if you are only buying 1 counter ( STI ETF 100) at $200 monthly, then it should not be $10.70 charge. It should be $6.42, since your investment fall into the category of less than $1000 and less than or equal to 2 counters.If that’s the case, your “sales” charge is 3.21% monthly. (more…)

Posted on April 2, 2009 - by SGDividends

How To Reduce Investment Expenses when doing Dollar Cost Averaging

The shortest route to top quartile performance is to be in the bottom quartile of expense. – John Bogle ( Founder of The Vanguard Group)

This post is to do a comparison in relation to investment expenses between Unit Trusts, ETFs through DBSV Cash Upfront and other brokerages and POEMS sharebuilders plan. In relation to sales charges, based on the spreadsheet done below, there is an optimal way to invest, so as to reduce charges or fees, based on the investment amount if one is to follow a monthly dollar cost averaging strategy.

Generally, dollar cost averaging means allocating a fixed amount of money into investments at regular intervals, so as to lower the average cost of the investment, since when share prices go up, less shares are bought and when share prices go down, more shares are bought. The other reasons for dollar cost averaging (DCA)include not having enough funds to buy a pricey blue chip company say, the minimum 1 lot DBS shares and so DCA allows one to slowly accumulate DBS shares. Other reasons includes a person not being savvy enough or having not enough time to monitor the market so as to “generally” time the market to enter.

The reason why we are comparing the said instruments is because these share a common trait, which is, they allow one to so call diversify their portfolios. Well, personally, SGDividends do not use any of this said instruments, that is Unit Trusts, Share Builders Plan or buy any ETFs, but oh well, to each his own.

For those who don’t know what POEMs share builders plan is…read below. Read more…

Posted on April 1, 2009 - by SGDividends

Cash Generating Ability of Singapore’s Blue Chips…a Snapshot

We have compiled a list of STI Component counters showing their Cash from operations from year 2004-2008. Primarily, it is to compare the trend and consistency of their cash generating ability over the years. Please take note that the compiled charts are taken at face value from Reuters. And when we mean “face value”, we mean take it with a pinch of salt ( like how you should treat what SGDividends, Analysts, your stock broker, e.t.c says). Treat us like some noise in the background and really go verify the facts and do your own due diligence..come on..don’t be a pig. Pigs get slaugthered unless they can fly away. Anyway, read the comments at one of our post to understand why we say what we just said…… thanks to that nice chap who alerted us on our mistake in that post…..

Also pls note that we did not include the 3 banks, UOB,DBS,OCBC in the document below. This is due to a small voice that told us not to do it and this is a personal issue….don’t ask. Read more…

Posted on March 31, 2009 - by SGDividends

Buy and Hold Strategy For The Long Term…Rethink again

So what does the term buy-and- hold really mean? How long does one hold to consider oneself such an investor? Frankly, its just an academic jargon which is of no use debating over. Life is larger than this. We were reading up on Marc Faber cos he looks abit like Hannibel Lector in the movie and also because he said that it is a myth that stock markets go up generally in the long run. So well.. this guy is a smart guy..having gotten his PHD in economics at age 25 and having so much experience in the money markets of the world…..his comments is at least worth some consideration. Besides, conventional wisdom says that when one is young, start investing in equities as in the long run, equities in general rises. One can see this is by clicking on the charts for the DJIA (Dow Jones Industrial Average Index).

Taken from the book below……

” The average life expectancy of a multinational corporation-Fortune 500 or its equivalent-is between 40 and 50 years. This figure is based on most surveys of corporate births and deaths. A full one-third of the companies listed in the 1970 Fortune 500, for instance, had vanished by 1983-acquired, merged, or broken to pieces. Human beings have learned to survive, on aver-age, for 75 years or more, but there are very few companies that are that old and flourishing. ” Read more…