How to look for investment red flags – that will save you a lot of pain and money (Part 2)

In our first part of looking for red flags, we touched on issues like management and the balance sheet for signs of corporate ills. This world is plagued with inefficient companies, the good ones are usually expensively priced, and the lousy ones are usually priced so cheap they actually look enticing to investors who aren’t discerning and careful enough. Here are several more red flags to look … [Read more...]

Here’s why the Ringgit is crashing

The Malaysian ringgit has been one of the worst performing currencies in Asia since Donald Trump won the recent US election. Having spoken to several economists, currency strategists and traders for their views, here are a couple of possible reasons why. 1. Higher US treasury yields Suddenly, US government bonds, the safest investments in the world, don’t seem so appealing anymore with someone … [Read more...]

Here are the top 5 stock investment styles. Find out which one works best for you

There’s more than one way to skin a cat. Like the rather gruesome phrase (probably coined by a psychopath), there is no one specific investment style you must follow to achieve investment success. There are countless examples of investors who’ve succeeded using entirely different and sometimes diametrically opposing investment styles. Warren Buffett is the third richest man in the world … [Read more...]

Why we will be rejecting ARA Asset Management’s privatization offer of $1.78 per share

Many of you reading this article would be aware that The Fifth Person has been following ARA Asset Management (ARA) very closely as we have a vested interest in the company since 2012. I am writing this article since quite a few of you wanted to know whether we will be taking up the recent privatization offer made by a consortium led by founder John Lim. The short answer is: “No, we are … [Read more...]

Donald Trump and the lessons we can learn from an unpredictable 2016

We’ve watched with shock or surprise, depending on whose camp you’re on, as Donald Trump ascended to the White House. Nearly everyone was caught unaware of The Donald’s surge of support from the swing states of Florida, Ohio, Pennsylvania and Wisconsin. The New York Times begun the night by projecting a strong 85% chance of Clinton winning but a few hours later they projected a 95% Trump … [Read more...]

NeraTel announces long awaited special dividend… Here’s how much

Nera Telecommunications has declared a 15 cent special dividend from the disposal of its payment solutions business to Ingenico Group S.A. in May for $88.4 million. For 3QFY16, the telco group reported a loss from continuing operations net of tax of $1.32 million after the divestment, reversing from a profit of $1.6 million for 3QFY15. Including the divestment gain of $66.2 million, profit … [Read more...]

Confirmed: John Lim-led consortium to buy out ARA Asset Management in $1.8 bil deal

ARA Asset Management on Tuesday announced a joint proposal by a consortium led by group founder and chief executive officer John Lim to privatise the company in a takeover offer at $1.78 per scheme share. At this offer price, which exceeds the highest closing price of ARA shares over the past 2.5 years, the company is valued at close to $1.8 billion. The consortium, which has proposed the … [Read more...]

3 ways to exploit market inefficiency and earn market-beating returns

The markets are generally efficient at pricing securities. So, in that way, I do agree with the general notion of the efficient market theory. What we exploit, and how we invest is to find pockets of market inefficiency, and to exploit the differences between price and intrinsic value. 1. Imperfect information The more coverage a stock receives, the harder it is to find divergences in intrinsic … [Read more...]

How to Spot Cash Cow Businesses for Your Stock Portfolio

My very first exposure to business financing was when my dad lent money to my uncle to start his new textile business. In return, my dad became a shareholder and when the business blossomed a few years later, my dad multiplied his returns many times over. There were other financing options my uncle could have used at that time, but getting help from relatives was definitely an easier option than … [Read more...]

3 easy ways I find new investment ideas fast

“Where do you get your ideas?” This is a common question I often hear when someone approaches me about investing. Finding ideas is not always straightforward and it requires some level of effort and a knack for observing events and things around you. But if you’re willing to put in that bit of effort, I can guarantee that you will find many potentially profitable investment ideas through these … [Read more...]

7 critical steps you must take if you planned for retirement late

There a million articles about why you should plan for retirement early, and they all have one problem: they assume everyone has the luxury of doing that. We tend to ignore the fact that some people start out the hard way, and are on a shoestring budget till they’re 40. Well here’s some help for them: 1. Conduct a realistic assessment of retirement goals The emphasis on realistic. We hate to say … [Read more...]

15 things I learned from Starhill Global REIT’s FY2016 AGM

Starhill Global REIT (SGX:P40U) owns retail and office properties in Singapore, Malaysia, Australia, China, and Japan. Among its properties, Singaporeans would be very familiar with two of Starhill’s retail malls –  Ngee Ann City and Wisma Atria along Orchard Road. Starhill is one of my REIT investments when I purchased it in January this year when Singapore REIT prices took a pounding. It has … [Read more...]

Why Rising Profits Isn’t Always a Great Thing

One of the very first things investors like to look at in a company is profit. If profits are increasing consistently every year, then it usually means the company is growing and doing well. But is it always the case where growing profits simply mean that a company is growing bigger and better? To gain a clearer picture of a company’s growth, you need to look at its net profit margin. What is … [Read more...]

How we made 64.4% returns (so far) in this “boring” Hong Kong company that no one talks about…

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About two years ago, in 2014, there was an opportunity for us. It was a rare investment opportunity that offered little downside risk and we could potentially earn 50-80% in profit in three years. What was obvious then too was that this company was paying its shareholders steady dividends since 2000 and we figured that the company was likely able to sustain the dividends for another ten … [Read more...]

Singapore’s economy faces subdued growth, but inflationary pressures should stay low: MAS

Singapore’s economy can expect a “generally subdued growth environment” but this should keep inflationary pressures modest in the near-term, says the Monetary Authority of Singapore (MAS) in its bi-annual macroeconomic review released on Tuesday. “The external environment will continue to exert a drag on Singapore’s manufacturing and trade related services sectors,” says Singapore’s central … [Read more...]

How to look for investment red flags – that will save you a lot of pain and money (Part 1)

There have been endless articles around talking about how best to screen and analyze for a wonderful company and/or a company that’s trading below its intrinsic value that’s worth buying. From the very best like Buffett to the average retail investor – there have been many times we have invested in things that we thought were good but ended up disappointing us and, perhaps, losing us money. Worse, … [Read more...]

How to construct a deep value stock portfolio

There are two approaches to portfolio construction. In one camp, you have investors who favor a concentrated approach of fewer than 10 stocks. In the other camp, you have investors who prefer a more diversified portfolio of 20-30 stocks. The case for concentration Buffett probably helped popularize this idea by focusing on his “twenty punch card rule”, citing that diversification is really a … [Read more...]

Here are some of Singaporeans’ biggest concerns about ageing

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The majority of Singaporeans between the ages of 30 and 75 are concerned about ageing, according to a research study led by the Lien Foundation and NTUC Income. The study “Supporting Singaporeans’ Aspirations in Aged Care” had surveyed 998 respondents, and found that 82% of them were concerned about ageing in Singapore. All of the respondents held aspirations of having good health, being … [Read more...]

M1’s 3Q results: A stumble before the fall?

Maybank Kim Eng and UOB Kay Hian are keeping their “sell” calls on M1 Limited, further lowering their target prices from $2.04 to $1.90 and from $2 to $1.76 respectively – while CIMB maintains its “hold” recommendation on the stock with a lower price target of $2.55 from $2.80 previously. This comes after the mobile operator yesterday posted a hefty 23.4% decline in 3Q earnings, which came in … [Read more...]

Do you have what it takes to be a value investor?

The term “value investor” has been thrown around endlessly for decades, with prominent proponents like Warren Buffett, Benjamin Graham, Seth Klarman and Walter Schloss. The key principle of value investing is contrarianism — going against the flow of the general markets. Value investing isn’t some arcane, rare philosophy that’s tucked in some secret section of the Library of Congress that only … [Read more...]