Monday, November 12, 2018

Fundamental Scorecard Is Already 1 Years Old!

Dear Readers,

It has been some time since I wrote something on my blog. I had a very busy 2 weeks.

Last Friday, Simple Investor and I had our FSC Exclusive Meet Up in celebration of Fundamental Scorecard being 1 year old!

Firstly, we like to thank everyone whom came, especially those that came on VERY SHORT NOTICES. THANK YOU VERY MUCH!

Secondly, this was a tab too late as Fundamental Scorecard had already been around since September last year. Nevertheless, we had a wonderful time and we hope everybody enjoyed as well. 

At the Exclusive Meet Up, we asked for feedback in order to service you better and be able to produce products that you want.

We had also announced our new Telegram Group to have a more intimate sharing of details with our subscribers and readers. In fact, anyone can join the Telegram Group. If you are interested to join, do click on this LINK.

We also wanted to conduct full day courses and asked for suggestions. Hopefully what we eventually came up for will be to our subscribers' and readers' liking.

Here are some pictures from the event:

Once again, Simple Investor and I had a great evening that day and hope everyone whom attended also had a great evening!

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! 

We have also released the Moat Scorecard with InvestingNote. Do take a look!

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Thursday, November 1, 2018

The Tech Powerhouse Face-off

This article contains information (except the companies' name) from the 2nd Scorecard Newsletter written on 29 Sep 2018 for my Moat Scorecard subscribers. 

For the 2nd issue of Scorecard Analysis, I like to bring you attention to 2 Tech Powerhouse listed in SGX – Company A (Coy A) and Company B (Coy B).

As taken from their website, this was how they describe their business:

Company A

“We are a precision engineering group which specializes in manufacturing high precision front-end semiconductor components and perform complex electromechanical assembly and final testing services. Included in our core business is the production of modular and integration systems for original semiconductor equipment manufacturers. Aside from semiconductor industry, we also cater to other industries including in electronic, machine tools, aerospace and oil & gas industries.”

Company B

“Coy B provides handling and test solutions to the most advanced manufacturers in the world.  We help our customers deliver many of the most successful products in the 5G economy including microprocessors, high speed communications, IOT devices, and solar cells.”

Despite having slightly different business, they are technically in the same industry – the semiconductor industry.

As we knew, the Semiconductor industry has been a very hot and popular industry for traders and investors in over the last 2 years.

However, their share price has been dropping drastically. WHY? 

Company A

Company B
One of the reasons could be semi-related to the trade war. Investors might be worried that the trade war could potentially affect the future revenue of the semiconductor giants in USA for the long term. Thus, these investors could have sold their shares in these semiconductor giants.

With that in mind, it is important to note that Coy A and Coy B  main customer is actually a major US listed corporation.

Coy A – Company C (Coy C)
Coy B – Company D (Coy D)

So, could it be that Coy A and Coy B share prices were affected by the share prices of their customers?

Coy A (Red) and Coy C (Blue) Share Price Graph
Coy B (Red) and Coy D (Blue) Share Price Graph
Do note that only 1-year graph has been taken in view that relationship between Coy B and Coy D has only been 1+ year only.

From the graph, we can see that the co-relation between Coy A and Coy C is higher than that of Coy B and Coy D as Coy B share price has risen too much. This could be due to investor’s insane expectation of Coy B relationship with Coy D in the past. 

Despite having a high co-relation between Coy A and Coy C, another blogger (unable to disclose link) had actually stated that revenue of Coy C does not really affect Coy A. 

This meant that Coy A share price is potentially more affected by NEWs of its major customer rather than actual facts! 

As for Coy B, the share price could have fallen due to previous high expectation. After all, the company has already announced that their relationship with Coy D in the following year will not be as strong as the past years.

With that, does this mean that we should buy on dip? 

If that is the case, let’s see which company is actually better. I will be using the different scorecards to conclude which company is probably a better investment at this point in time.

Nevertheless, do note that each scorecard method is based on a certain strategy and even if the company did not pass that scorecard, it does not necessarily mean the company is not a good investment.

Full Analysis Scorecard

Company A

Company B
The Full Analysis scorecard is focused on looking for growth. It also looks for causes of concerns that investor should look out for as well as if the current share price is close to its value.

Overall the scorecard seems to deem Coy B as a more growth-focused company. In addition, Coy A seem to have more causes of concern. 

Aside to the revenue, net profit and operating cash flow graphs, it also seems to suggest that Coy B as more growth oriented as compared to Coy A graphs which are more consistent and flatter.

Winner: Coy B!

Ultimate Scorecard 

Company A

Company B
The Ultimate Scorecard is looking for companies that are undervalued at that share price base on a series of criteria. It gives a score to each of the criteria. By summing up the score, if a company scores more than 8 points, it is undervalued. Do take note that this scorecard also has a focus on cash related criteria.

Based on the value stock score, it seems that Coy A is more undervalued than Coy B. However, as per asset value, both of them are still priced higher than their book value. 

On the other hand, Coy B also seem to generate more cash than Coy A in recent years. This also relate backs to the growth Coy B is generating in recent years.

Nevertheless, based on the criteria listed, Ultimate Scorecard will have preferred Coy A.

Winner: Coy A!

Moat Scorecard

Company A

Company B
The Moat Scorecard is the latest addition to the scorecards we created. It mainly focused on qualifying something qualitative into a quantitative number. This will provide users to understand if the company has a competitive advantage in its industry. Do note that this number is not plucked from the sky. It is a conclusion of calculation of numerous quantitative figures of the company.

In view of the pictures above, the scorecard seems to suggest that Coy A has more competitive advantage as compared to Coy B. One of the reasons that Coy A could have a better competitive edge was because it has a more consistent and longer history with Coy C. As stated above, Coy B started its relationship with Coy D only for about more than 1 year.

This can also interpret that the relationship between Coy B and Coy D is not as strong as Coy A and Coy C considering the number of years they are together. Sounds like some relationship advice!

Thus, the Moat Scorecard deem Coy A as having more competitive advantage.

Winner: Coy A!

In Short

As per the 3 scorecards’ theories above, Coy A is the more preferred company. The main reason will probably be that Coy A has a longer and consistent working relationship with its main client as compared to Coy B.

This also bring about another factor that Coy A performance, in terms of revenue and net profit, has been flatter as compared to Coy B. It could also be an indication to Coy B’s investors of how the revenue of Coy B may continue if it continues to work closely with Coy D only.

Nevertheless, we should not discount the possibility that either company could find other major clients and break out of the cycle of working closely with only 1 major company.

For these 2 companies, it is also very important that they continue to innovate with more research and development. If not, their moat will probably be eroded soon enough in this time and age, and their share price will suffer as a result.

With that, I bring this newsletter to a close and hope you like what was written.

Please do your own due diligence before you invest this counter (if you knew what it is).

Confused with Coy A, Coy B, Coy C and Coy D? Then Sign Up with our Moat Scorecard using InvestingNote now!

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! 

Oh... and do remember, please like our Facebook page (T.U.B Investing & Fundamental Scorecard) and follow me on InvestingNote.

Tuesday, October 23, 2018

My 15% Portfolio - Changes After 3 Quarters

I must have been too busy lately - juggling too stuff and having too many things on my mind.

This is because I realise I have forgotten to put up a post on the update for my portfolio. Thus, here is a short post on my update.

Please do note that this update is as of today, which is already 23 days off from 3rd Quarter 2018.

Prior to taking a look at the changes in my portfolio, let me emphasize on the following:

1. This portfolio review is calculated from 26 Dec 2017 and the aim is to review the total portfolio gain after 1 year.

2. The counter's initial share prices are their respective share prices on 26 Dec 2017.

3. The gain and loss stated is just a simple calculation of the difference in share prices, ignoring the transaction fees.

4. At times, if stated, the gain could include dividends.

5. This review will include my overseas counters in USA and Hong Kong.

End of 2nd Quarter 2018
End of 3rd Quarter 2018
Singapore Telecommunications Limited
Singapore Telecommunications Limited
Chuan Hup Holding Limited
Chuan Hup Holding Limited
Captii Limited
Sold All At 24% Loss
Japan Food Holding Ltd
Japan Food Holding Ltd
The Trendlines Group Ltd
The Trendlines Group Ltd
Starhill REIT
Starhill REIT
HongKong Land USD
HongKong Land USD
Ellipsiz Ltd
Sold All At 25% Loss
Sysma Holdings Ltd
Sold All At 5% Gain
Singhaiyi Group Ltd
Singhaiyi Group Ltd
The Hour Glass Limited
The Hour Glass Limited
Powermatic Data Systems Limited
Powermatic Data Systems Limited
The Walt Disney Company (USA Counter)
The Walt Disney Company (USA Counter)
Quarterhill Inc. (USA Counter)
Quarterhill Inc. (USA Counter)
Win Hanverby Holdings Ltd (HK Counter)
Sold All At 27% Loss

Additional: APAC Realty Limited

Additional: New Big Idea!

Additional: New Big Idea!

Additional: Facebook, Inc. (USA Counter)

Additional: Alibaba Group Holding Limited (USA Counter)

Do note that I do realize that it is almost impossible to make a 15% gain in the current market conditions. In addition, I have continue to sell the companies that no longer fit my strategy even at deep losses.

I had managed to keep my portfolio at 16 companies -  just 1 additional company from my last portfolio update. There are also 2 new big ideas which I will state in the future. One of the existing companies have also been upgraded to a big idea. For the Big Ideas Investing Theory, the current 11 companies contribute to over 70% of my portfolio.

In Short.

Despite my big losses reported for my last 2 updates, my overall portfolio is down at about 6.96%. As per my historical return, I believe that once I continue this strategy for at least 2 years, I will eventually make a gain for the portfolio.

Thank you for reading.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote

Monday, October 15, 2018

A Consolidation of Different Thoughts

Dear Readers,

It has been some time since I wrote my last post. Thus, I will be consolidating many of my thoughts over this time in short articles below in this post.

Happy Investors Despite A Bloody Market

Picture taken from Moltey Fool
STI had went down from over 3100 points to the current 3045 points as of today. Although you still seem to notice people stating that they had exit the market with “many bloody wounds”, but its seem that there are also many people looking forward to this drop.

For myself, I basically went through excitement, panic and indifferent in a few days. Since then, I have stayed indifferent to all the market downturn as I felt maybe there are still many people looking to enter the market.

On the other hand, my portfolio has since dropped about over 6.5% since 26 Dec 2017. This is almost similar with the drop in STI ETF (including dividend). In any case, I am still not performing better than the market. But I believe I will get there.

Anyway, I have added a tab where I will be updating my portfolio performance on a weekly basis for my own tracking. You can see how the performance of my portfolio changes over time.

Summary of Big Ideas Investing Theory

As for the Big Ideas Investing Theory, the following is a short review of what have happens to the companies:
  • Big Idea 1, 2, 3, 5, 7, 8, 9, 10 – Remains in the portfolio.
  • Big Idea 4 and 6 – Sold Fully (read it here)
  • Big Idea 11, 12, 13 – After selling the Big Idea 4 and Big Idea 6, I had re-deploy some cash into these 3 big ideas. Big Idea 11 is an existing company in my portfolio that has been upgraded to a Big Idea. Big Idea 12 and 13 are new additions. I will be writing about these companies in due time.
Currently, there are 11 different companies within the Big Ideas Investing Theory and contributing to over 65% to 70% of my portfolio.

Diversification in Strategy, not Companies

Picture taken from mnacritique
This was something I shared during the last seminar organised by IN.

Previously I use to have over 25+ companies. In my view, that was one of the way to diversify being a value investor. Do note that I was having a smaller warchest to invest with at that time.

After creating the Fundamental Scorecard Website and being somehow influenced by Simple Investor, I decided to consolidate my portfolio. I sold many companies in my portfolio despite making losses.

Even with lesser companies in the portfolio, I still managed to diversify my portfolio via different strategies.

If you have read about the Fundamental Scorecard website and Moat Scorecard via IN, you will know that Simple Investor and I had create 3 different scorecards using 3 different investing style.

By understanding the theories behind each investing style, I am able to diversify simply by investing in the companies that passed each scorecard method. 

When I Sell

Similarly, during the seminar, someone also asked us a question of when I sell. For me, the answer is simply selling the number of shares that is on and above my core holdings of the company, assuming nothing fundamentally has change, when the share price increases above my intrinsic value.

For example, I have 5000 shares of core holdings for Singtel at 3.40 and I believe the intrinsic value of Singtel is $3.40. When the share prices falls drastically to $3.20, I bought an excess holdings of 3000 shares in Singtel. When the share price rises to $3.50, I sold all my excess holdings of 3000 shares of Singtel. In this way, my core holdings’ average share price will eventually get lowered every time I buy below my intrinsic value and sell above m intrinsic value.

Buy Core Holdings: 5000 x 3.4 = 17000
Buy Excess: 3000 x 3.2 = 9600
Initial Average Price: 26600 / 8000 = 3.325
Sell Excess when Share price Rises = 3000 x 3.5 = 10500
New average price = (26600-10500) / 5000 = 3.220

Furthermore, I will sell all my holdings of a company, including core holdings, in the event (1) Fundamentals has change, or (2) New and BETTER Opportunities Arises.

Basically, that's all my thoughts for now. I will be writing about the new big ideas in the next few posts. 

I hope you look forward to them. Thank you for reading.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Wednesday, October 10, 2018

The Road Less Traveled To Destination Unknown

This post was actually named as "Crazy Crazy Asian". This is because I am not rich YET. But I am sort of crazy.

That is what some of my friends said about me.

Firstly, they commented that there is no logic in my recent choice of employment.

"So you went from a bank to a FI and now a fintech... this is not a path one will take."

Next, they asked me, "how did you find time for all these other stuff I am doing?"

Other stuff: Being a blogger, an investor, intending to have a fund, a co-founder to fundamental website, doing all sort of seminar, and also all these collaboration.

Finally they commented that every crazy move has a plan. But my moves seem to be all over the place.

After hearing about all these comments and some self reflection, I do realize that I am quite CRAZY.

Thus the term - "Crazy Crazy Asian".

I do seem to be taking on the road less traveled. In fact, I believe only a few traveled.

But where is the destination? Why am I doing all these?

At the start, my aim was to eventually be a Crazy Rich Asian. I tried all sort of possible way to earn extra income. But it was in vain.

Then I eventually start to blog to just share some of my investing journey.

But as I blog, I started to learn too. Then as I share, a hobby became a passion. Then I realize I seem to be "okay" at it. Then I thought I should try to start to earn from this passion.

As time passes by, investing has become something that is so intertwined in my life that I believe my destination will have something to do with it.

Therefore, I thought of a dream plan not long ago - which I hope can be my destination and lead me to possibly becoming a Crazy Rich Asian.

The dream plan is:

I will teach with a database of methods for you to subscribe to. Eventually I will also somehow start my private fund.

Thank you for reading my post.

With that I like to apologise for the lack of post once again, I will try to come up with a better one soon!

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! 

We have also released the Moat Scorecard with InvestingNote. Do take a look!

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.