[/caption]
I guess April 2009 can be dubbed the “Month of Reflection”. Why do I say so ? This was the month where leaders from many countries as well as central banks mulled over the effects of their policies and also waited for signs of improvement (so-called “green shoots”). While it is highly debatable that we have put behind the many years of excesses, over-leveraging and excessive risk-taking; it is also questionable if things can continue to worsen as they have for the past 12 months. Arguably, this is because the decline has been so sharp and the recession so protracted and extensive that most are of the view that “things cannot get much worse”. Whether this is true or not will only be known on hindsight, unfortunately.
Thus, as retail investors, one should take a long-term view of the world economy and of the ability of companies to survive and sail through the storms relatively unscathed. A quarter or two of bad earnings and missed expectations are not to be confused with the permanent and pervasive value destruction which a company would be subject to as a result of this downturn. The devil is in the details and it requires diligent study and analysis to weed out the survivors from those who fall by the wayside. Already, many S-Shares (China companies listed on SGX) have fallen prey to the downturn and their shares have been suspended. These include (but are not limited to) Ferrochina, China Printing and Dyeing, Fibrechem, Guangzhao IFB, China Sun, China Sky, Oriental Century and more recently, Sino-Environment. They are suffering from a myriad of problems and serve as a good lesson for investors to learn from and ensure that one treads carefully when selecting companies to invest in. I consider myself fortunate to have escaped the carnage thus far and the numerous land mines which have been scattered across the barren landscape to ensnare the unwary investor.
April 2009 did not throw up attractive opportunities for investment, hence I have kept my powder dry and continued to build up on my savings and cash stash in anticipation for opportunities to average down further. While many “experts” have opined on the fact that markets are in a recovery phase as the recent rebound was about 20-25% from the bottom, my view is that of adopting a neutral stance and to continue to monitor my companies closely, while of course keeping a watchful eye on economic developments and getting updates on industry reports concerning the companies I own.
In terms of Singapore corporate reporting, the season will really kick off in May 2009 with the blue chips reporting results. I would also be expecting full-year result from Tat Hong, Pacific Andes and Boustead as well as quarterly reports from Swiber and China Fishery. The consensus expectation is for earnings to dip by 30-40% as a result of the recession, but not many have considered the future earnings potential for these companies once the recession lifts (and yes, it would eventually lift, the question is simply that of “when”). Singapore’s GDP contraction is poised to be the worst on record but the silver lining is that things will probably improve closer to the end of 2009. By the time news tickles through that things are indeed getting “better”, valuations may not be as attractive as they are currently any longer. Read more...
Musicwhiz Porfolio 2009
January 2009 Portfolio Summary and Review
February 2009 Portfolio Summary and Review
March 2009 Portfolio Summary and Review[caption id="attachment_2374" align="alignright" width="150" caption="Musicwhiz portfolio"]
[/caption]
I guess April 2009 can be dubbed the “Month of Reflection”. Why do I say so ? This was the month where leaders from many countries as well as central banks mulled over the effects of their policies and also waited for signs of improvement (so-called “green shoots”). While it is highly debatable that we have put behind the many years of excesses, over-leveraging and excessive risk-taking; it is also questionable if things can continue to worsen as they have for the past 12 months. Arguably, this is because the decline has been so sharp and the recession so protracted and extensive that most are of the view that “things cannot get much worse”. Whether this is true or not will only be known on hindsight, unfortunately.
Thus, as retail investors, one should take a long-term view of the world economy and of the ability of companies to survive and sail through the storms relatively unscathed. A quarter or two of bad earnings and missed expectations are not to be confused with the permanent and pervasive value destruction which a company would be subject to as a result of this downturn. The devil is in the details and it requires diligent study and analysis to weed out the survivors from those who fall by the wayside. Already, many S-Shares (China companies listed on SGX) have fallen prey to the downturn and their shares have been suspended. These include (but are not limited to) Ferrochina, China Printing and Dyeing, Fibrechem, Guangzhao IFB, China Sun, China Sky, Oriental Century and more recently, Sino-Environment. They are suffering from a myriad of problems and serve as a good lesson for investors to learn from and ensure that one treads carefully when selecting companies to invest in. I consider myself fortunate to have escaped the carnage thus far and the numerous land mines which have been scattered across the barren landscape to ensnare the unwary investor.
April 2009 did not throw up attractive opportunities for investment, hence I have kept my powder dry and continued to build up on my savings and cash stash in anticipation for opportunities to average down further. While many “experts” have opined on the fact that markets are in a recovery phase as the recent rebound was about 20-25% from the bottom, my view is that of adopting a neutral stance and to continue to monitor my companies closely, while of course keeping a watchful eye on economic developments and getting updates on industry reports concerning the companies I own.
In terms of Singapore corporate reporting, the season will really kick off in May 2009 with the blue chips reporting results. I would also be expecting full-year result from Tat Hong, Pacific Andes and Boustead as well as quarterly reports from Swiber and China Fishery. The consensus expectation is for earnings to dip by 30-40% as a result of the recession, but not many have considered the future earnings potential for these companies once the recession lifts (and yes, it would eventually lift, the question is simply that of “when”). Singapore’s GDP contraction is poised to be the worst on record but the silver lining is that things will probably improve closer to the end of 2009. By the time news tickles through that things are indeed getting “better”, valuations may not be as attractive as they are currently any longer. Read more...
Musicwhiz Porfolio 2009
January 2009 Portfolio Summary and Review
February 2009 Portfolio Summary and Review
March 2009 Portfolio Summary and Review
[/caption]
I guess April 2009 can be dubbed the “Month of Reflection”. Why do I say so ? This was the month where leaders from many countries as well as central banks mulled over the effects of their policies and also waited for signs of improvement (so-called “green shoots”). While it is highly debatable that we have put behind the many years of excesses, over-leveraging and excessive risk-taking; it is also questionable if things can continue to worsen as they have for the past 12 months. Arguably, this is because the decline has been so sharp and the recession so protracted and extensive that most are of the view that “things cannot get much worse”. Whether this is true or not will only be known on hindsight, unfortunately.
Thus, as retail investors, one should take a long-term view of the world economy and of the ability of companies to survive and sail through the storms relatively unscathed. A quarter or two of bad earnings and missed expectations are not to be confused with the permanent and pervasive value destruction which a company would be subject to as a result of this downturn. The devil is in the details and it requires diligent study and analysis to weed out the survivors from those who fall by the wayside. Already, many S-Shares (China companies listed on SGX) have fallen prey to the downturn and their shares have been suspended. These include (but are not limited to) Ferrochina, China Printing and Dyeing, Fibrechem, Guangzhao IFB, China Sun, China Sky, Oriental Century and more recently, Sino-Environment. They are suffering from a myriad of problems and serve as a good lesson for investors to learn from and ensure that one treads carefully when selecting companies to invest in. I consider myself fortunate to have escaped the carnage thus far and the numerous land mines which have been scattered across the barren landscape to ensnare the unwary investor.
April 2009 did not throw up attractive opportunities for investment, hence I have kept my powder dry and continued to build up on my savings and cash stash in anticipation for opportunities to average down further. While many “experts” have opined on the fact that markets are in a recovery phase as the recent rebound was about 20-25% from the bottom, my view is that of adopting a neutral stance and to continue to monitor my companies closely, while of course keeping a watchful eye on economic developments and getting updates on industry reports concerning the companies I own.
In terms of Singapore corporate reporting, the season will really kick off in May 2009 with the blue chips reporting results. I would also be expecting full-year result from Tat Hong, Pacific Andes and Boustead as well as quarterly reports from Swiber and China Fishery. The consensus expectation is for earnings to dip by 30-40% as a result of the recession, but not many have considered the future earnings potential for these companies once the recession lifts (and yes, it would eventually lift, the question is simply that of “when”). Singapore’s GDP contraction is poised to be the worst on record but the silver lining is that things will probably improve closer to the end of 2009. By the time news tickles through that things are indeed getting “better”, valuations may not be as attractive as they are currently any longer. Read more...
Musicwhiz Porfolio 2009
January 2009 Portfolio Summary and Review
February 2009 Portfolio Summary and Review
March 2009 Portfolio Summary and Review
