Author: Singapore Stock Picker

Yangzijiang Shipbuilding: A review of my margin of safety

Since YZJ underwent that big drop in August, I’ve been paying more attention to its media releases. Since September, I’ve traded some of the shares to my position when the stock was between $0.90 to $1.10. The last week, YZJ released its 3rd quarter results for 2019 and confirmed my decision to hold on to the stock for my dear life. For readers who are new, here’s a recap of my investment checklist. (A) Is the Company Profitable? (B) Are the Profits Real? (C) Are the Profits Sustainable? (D) Is the Stock Cheap? (E) Is the Manager Track Record...

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A Sure Lose Trading Strategy

Last week, a colleague introduced me to this “sure win trading strategy”. He described to me a method that sounds quite similar to my mom’s strategy. Interestingly, it is the second time I heard it this month. A classmate mentioned it to me and said he thinks he can make 20% returns a month. When I heard these 2 guys declare the strategy will work, I was fascinated. Uncle Warren makes less than 30% annualized and you can make 20% a month! What’s the deal? Profitable Strategy or Pseudo Science? Here’s the strategy. If a stock I buy goes...

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Hate your circumstances? What can you do about it?

A redditor asked the following question a few weeks back. I quote and rephrase in square brackets People over 35 earning less than 4k, do you ever see yourself earning more than that? If [not for] food delivery or [private hire vehicles (PHVs)], where else can below average folks like us with no IQ, intelligence, [network] or social skills earn this kind of money in our lifetimes? reddit user GardensByBombay He wasn’t trolling but I felt like I couldn’t help him. I earn a salary well above the $4K figure; answering him will either end up coming off as...

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Should you Invest with the Big Boys?

A recurring theme in investment forums and blogs is the reference to institutional investors as saints when a stock’s price rockets and as villains when stock prices fall. You know the institutions as The Big Buyers. The Big Boys. The BBs. You know some of them and read about them on the news. When you hear that a sovereign wealth fund (SWFs) or famous asset manager holds shares in a company you want to invest in, you feel validated. They must have done their homework and decided it was a good investment for them. But is it necessarily a...

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The Investment Portfolio – Q3 2019

With the trade war in full swing, the final stages of Brexit playing out, and the US President’s impeachment proceedings underway, the stock market has become extremely volatile. Bank stocks have taken a hammering from the fall in interest rates. One of my key holdings, Yangzijiang shipbuilding, also had its chairman summoned for a corruption investigation in China. As a result, my lifetime annualized returns figure collapsed to 9.5% due to Yangzijiang suffering a massive drop in stock price. Influenced by the louder chorus of voices warning of an impending recession, I’ve slowed down the rate at which I...

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The Great Thomas Cook-Out

If you have been following financial media, you might have come across the failure of a travel company called Thomas Cook. 600,000 British citizens were left stranded overseas, tens of thousands of employees left hanging, and perhaps hundreds of hotels, resorts, airports were left holding the bag for Thomas Cook shareholders and managers. Before Monday 23rd September 2019, I didn’t even know who or what Thomas Cook was. After Monday, it is easy to ride on the wave of media bashing and predict the past. Let’s try to enjoy some good-old-hindsight-investing and rationalize what happened. The Case First and...

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LendLease Global REIT IPO

I heard a lot about the upcoming LendLease Global REIT IPO so I got a little interested and took a closer look. I approach all IPOs with a high degree of skepticism bordering on paranoia. This IPO is no different, so I approach it with a “if-it-is-so-good-why-are-they-offering-to-sell-it-to-me” mindset. Before I start, I would like to point out that FinancialHorse, one of the blogs I follow, covered this IPO quite well. He presents opinion about why he thinks the REIT is a good deal and brings up good points. I would like to take the other side of the argument....

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Points to Check Before Buying a Stock

I’ve received a few questions from redditors and readers about my process for picking a stock. Mine is just one of the many checklists out there, so please understand that these are guidelines, not hard rules. There are times when it calls for points to be ignored or emphasized and you should make up your own mind about it. I start off from a lead on a company. It can either be due to personal experience, reading news, or a hot tip from a friend. Sometimes, it is from randomly surfing SeekingAlpha. Once I get a lead, I will...

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Are You Sheep Waiting to be Fleeced?

If you have been following financial blogs or doing your own research, you must have been on the receiving end of targeted ads that sound like this. “Hello, I am XXX and I am here to share with you my secrets.” “I make $4,000 a month from my bed, sign up for a free seminar to know more!” “Stock trading is easy. I’ll show you my secret system” “Escape 9 to 5. Join my free Forex seminar and I will show you how” The videos usually show charismatic speakers living the high life, driving a brand name car, enjoying...

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When should you sell a stock?

I’ve been grappling with the problem of when to sell a stock for some time. A combination of laziness and incoherent thinking led me to a never ending chase for an answer. To give you a sense of the confusion, here are 3 examples with very different outcomes for me. Scenario A. I bought Visa in 2015 at $75 a share. Every 6 months, the stock reaches new heights. I added more stock each time I had spare cash. Today, it is my single biggest holding, but somehow the thought of selling to “take profit” never crosses my mind....

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The Investment Black Swan

Yesterday, shares in a company called Yangzijiang Shipbuilding (YZJ) plunged 20% in a single day. It is one of my major stock holdings. I don’t follow my portfolio in real time, so by the time I knew what was happening trading of the share was halted. Naturally, people want to know what happened. There are rumors circulating that the CEO is involved in a corruption scandal. There are also suspicions of trading bots running haywire and causing the collapse in stock price. However, as investors, our job is not to speculate. Speculation about what happened is useless. What is...

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How do You Determine the Price of a Magic Box?

Today, my family attended a party in an executive condominium (EC) development in Yishun. To those unfamiliar with Singapore, Yishun is a sub-urban area that is on the outskirts. It is pretty isolated by Singaporean standards. My wife got a little curious about property prices in the area. We took a look on property websites and discovered a typical 3 bedroom condominium in Yishun was selling for $1,000,000 Singapore Dollars or US$740,000. I commented that it was a rip-off but my wife countered that it was expected for an EC in Singapore to cost that much. We then had...

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