Once again, the short sellers have targeted a company listed on the SGX. China Minzhong lost almost half its value today after the report was published. A trading halt was called on the SGX. The allegations suggested that China Minzhong had cooked up their sales to their supposed top two customers. The accusations if true would suggest a pretty unethical (and likely illegal) cooking of the books to make their sales look good.
It's interesting that up till recently, several brokers were making the call to buy this stock. I must say that I have been watching this and another S-Chip (Sino Grandness) for some time but have not yet found the reason to invest into either. I have been looking for a good food company to invest in ever since Hsu Fu Chi was taken private.
At various forums, some posters were lamenting that they had invested a significant chunk of their money into this company. Strange why they have not learnt from Lehman Brothers, Mini-bonds, and various misadventures of S-Chips? Some even went on to say that they vested in today before the trading halt as they felt that even if the two top customers were negated, the impact would not be significant.
Who knows if they might be right? But it's a no go by my books - definitely an OB marker! When the management cannot be trusted to be doing the right thing, it is no longer a company I would want to own any part of. History has shown time and again that things would not come to a good ending. Consider Enron and others like it that have gone the way of the dodo bird. Other indicative signs (though not necessarily a show-stopper) - absence of any dividends, high PE ratio.
Investment through the ages, from cradle to grave.
26 August 2013
02 June 2013
Consult your stock broker
Totally Useless Advice #1
Was watching an episode related to investment recently, and came across a most useless piece of information. The question posed was on what stock to pick at this point in time (in the Singapore market). The advise was to refer to a stock broker. What crap!
Totally Useless Advice #2
Then there was another question regarding generating income from stocks. The reply was to buy blue chip stocks to get good dividend income stream. Rubbish once again!
Totally Useless Advice #3
And here's another one: How should one go about building a retirement income. The answer: buy annuities. No prize for guessing the occupation of the lady giving this piece of advice.
Can we have a better show please!? We're getting horrendous investment advice from TV. Had a more positive impression from past episodes. But this one really irritated the heck out of me.
[Venting]
27 March 2013
Annuity Plans for Recurring Retirement Income
Annuity plans offered by various insurance companies:
http://www.income.com.sg/insurance/Annuity/index.asp
http://www.aia.com.sg/en/individuals/pro..._plan.html
http://www.aviva.com.sg/retirement/for-i...ement.html
http://www.axalife.com.sg/retirement/retire-happy
An alternative approach to provide a regular income stream during retirement. This could be used to augment (a) payout from CPF Life, (b) dividend income stream from stocks, and (c) coupon payouts from bonds.
Acknowledgment: Information was sourced from a post at ValueBuddies.
26 March 2013
Cost of Car Ownership
Here's an interesting website that offers a calculator to compute the cost of owning a car in Singapore: Cost of Car Ownership.
With the price of a Certificate of Entitlement outstripping the base value of a car, it has become one of two major cost of living topic that is a regular conversational piece for taxi drivers.
The other is of course housing.
With the price of a Certificate of Entitlement outstripping the base value of a car, it has become one of two major cost of living topic that is a regular conversational piece for taxi drivers.
The other is of course housing.
26 February 2013
Nest Eggs for Education Funds
Years ago, my wife set up a savings account for each of our child. Contributing $50 a month for several (many!) years, these eventually reach a few thousand dollars. But with the rapidly depleting interest rates at the banks, we finally decided that it wasn't the most optimal approach.
Reviewing the longer term plans, we decided to build these towards their respective tertiary education funds, should they succeed academically. We then revised the monthly contributing to $500 a month by investing in a basket for unit trust funds (aggressive portfolio diversified across several regional funds - US, Europe, GEM, Asia ex-Pac). With the increased earning power, this was viable and sustainable in recent years. Through this, the respective funds have rapidly built up to $50,000 each through a combination of monthly contributions and growth in valuation.
Looking forward, I have shifted towards $600 a month contribution towards a portfolio of conservative money market and short duration bond funds. Coupled with additional top-ups following each Chinese New Year and other miscellenous, it should lead to a nett contribution of about $8,000 a year. In 4 years, when they would be of age for university, the respective nest eggs would have reached $80,000, an average of $20,000 for each of the 4 years at the university. A sum that wouldn't be enough for an overseas education, though it would be a big leg up regardless. More importantly, it should be adequate for local studies.
Looks like they are set.
Reviewing the longer term plans, we decided to build these towards their respective tertiary education funds, should they succeed academically. We then revised the monthly contributing to $500 a month by investing in a basket for unit trust funds (aggressive portfolio diversified across several regional funds - US, Europe, GEM, Asia ex-Pac). With the increased earning power, this was viable and sustainable in recent years. Through this, the respective funds have rapidly built up to $50,000 each through a combination of monthly contributions and growth in valuation.
Looking forward, I have shifted towards $600 a month contribution towards a portfolio of conservative money market and short duration bond funds. Coupled with additional top-ups following each Chinese New Year and other miscellenous, it should lead to a nett contribution of about $8,000 a year. In 4 years, when they would be of age for university, the respective nest eggs would have reached $80,000, an average of $20,000 for each of the 4 years at the university. A sum that wouldn't be enough for an overseas education, though it would be a big leg up regardless. More importantly, it should be adequate for local studies.
Looks like they are set.
08 February 2013
04 February 2013
Pattern of Behavior - A Review for 2013
I was reviewing a past musing I made in 2011 (Pattern of Behaviour) of several interesting companies that I was invested in and monitoring.
Since then, Adampak, Cerebos, Hsu Fu Chi, Kian Ann all went through one form of general offer or another, and have since delisted from SGX. Guess my bets were on the righthorses. The original buys centered around these stocks that paid good and steady dividends. In some cases, they had low Price-to-Earnings (PE < 15) and/or low Price-to-Book (P/B < 1.0) ratios.
More recently, I divested Innotek. Seems like a dead horse. But I may well have divested at its trough (pun).
Of the rest, most are still struggling at the fringe, especially M1, CSE Global, SingPost and Sing Inv & Fin. SingPost in particular faces the challenge of diversifying itself from being overly dependent on a gradually declining domestic market. Consequently, it has been taking on an aggressive M&A track. However, these have yet to pan out. It's all about execution. For the rest, I remain optimistic for the longer term.
Of the balance, Teckwah and Zagro Asia have been doing well.
In nett therefore, out of 12 stocks, 4 exited profitably, 1 exited at a loss, holding 4 that are performing neutral, and holding 2 that are doing well - i.e. 6 wins, 4 draws, 1 loss. Not too bad.
Since then, Adampak, Cerebos, Hsu Fu Chi, Kian Ann all went through one form of general offer or another, and have since delisted from SGX. Guess my bets were on the righthorses. The original buys centered around these stocks that paid good and steady dividends. In some cases, they had low Price-to-Earnings (PE < 15) and/or low Price-to-Book (P/B < 1.0) ratios.
More recently, I divested Innotek. Seems like a dead horse. But I may well have divested at its trough (pun).
Of the rest, most are still struggling at the fringe, especially M1, CSE Global, SingPost and Sing Inv & Fin. SingPost in particular faces the challenge of diversifying itself from being overly dependent on a gradually declining domestic market. Consequently, it has been taking on an aggressive M&A track. However, these have yet to pan out. It's all about execution. For the rest, I remain optimistic for the longer term.
Of the balance, Teckwah and Zagro Asia have been doing well.
In nett therefore, out of 12 stocks, 4 exited profitably, 1 exited at a loss, holding 4 that are performing neutral, and holding 2 that are doing well - i.e. 6 wins, 4 draws, 1 loss. Not too bad.
31 January 2013
Dividend Growth Stocks
For the past few years, I've been taking the approach of looking for value stocks on SGX with good dividend yield. The strategy seems to have worked well so far. Of late, I started examining the dividend growth history of various stocks and it seems that there are a few that stand out significantly:
- The Hour Glass
- VICOM
Interestingly, their dividend payouts in absolute dollars have been consistently rising (dividend per share), supported by increasing earnings (earnings per share). I view with some optimism that Breadtalk may in time fall into this class as well.
Examining the NYSE, there seem to be even more options. These include:
- McDonalds
- Yum! (KFC)
- Coca Cola
- PepsiCo
- Johnson & Johnson [EPS is less consistent]
- Clorox
- Kimberly-Clark
These are all familiar brands with significant global presence. All appear to have been growing steadily over many years. Fastfood, drinks and toiletries - essentials in both good times and bad?
Looks like good stocks to hold onto for a lifetime of consistent and growing dividend payout? Sounds like a plan!
- The Hour Glass
- VICOM
Interestingly, their dividend payouts in absolute dollars have been consistently rising (dividend per share), supported by increasing earnings (earnings per share). I view with some optimism that Breadtalk may in time fall into this class as well.
- McDonalds
- Yum! (KFC)
- Coca Cola
- PepsiCo
- Johnson & Johnson [EPS is less consistent]
- Clorox
- Kimberly-Clark
These are all familiar brands with significant global presence. All appear to have been growing steadily over many years. Fastfood, drinks and toiletries - essentials in both good times and bad?
Looks like good stocks to hold onto for a lifetime of consistent and growing dividend payout? Sounds like a plan!
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