Thursday, January 10, 2019

The Hongkong Stock Market Dilemma

Being a value investor and probably an educator, as well as a researcher, I am very confused over the back-testing I have done via the Hongkong Stock Market.

In this post, I have stated that my back-testing shown that Hongkong Stock Market do not react well to Top 5 Criteria Test Version 1, Top 5 Criteria Test Version 2 and TUB Score Version 2.

However, in the event, I do not follow these metrics to invest in Hongkong Stock Markets - I do not feel that I have a significant margin of safety.

I have also mentions my dilemma in this InvestingNote post and many gurus had also provided their views. Do read them in the comments to the InvestingNote Post.

My Dilemma Stated In InvestingNote
Anyway, I am going to find the answers to my questions again. This answer has to make sense and be easily explainable to others as well.

Here I go again...

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.

Saturday, January 5, 2019

Updates and Revelation of Big Idea 2

As per my Big Ideas Investing Theory, many of you may not really know the company behind my Big Idea 2.

It is a company which I have held for more than 2 years and I had communicated significantly in my blog.

Since 18th Sep 2018, Big Idea 2 has announced that it is in talks to sell one of its 76% owned subsidiary. This subsidiary is the company's main Cash Cow!

As of yesterday, the company had announced that it had confirmed the full disposal of the subsidiary with a gain of over US$69 Million!

Abstract from Announcement

Abstract from Announcement
This is probably the best news I had heard for my investing journey since 2018!

Anyway, without further ado, it is time to reveal the company... the company is Chuan Hup Holdings Ltd!

With the help from the calculation method as per my previous post on the company, the indicative book value of the company seem to be in the range of between S$0.500 to S$0.545.

In Short

With the book value in mind, my strategy to exit my holdings will be an art. I plan to do it in 3 tranches. The first tranche will be in the range of $0.350 to $0.400. The last tranche will be to wait for the next dividend announcement.

In the event, the share price of the company did not react accordingly to my plan, I will also plan to buy more instead.

In my opinion, this event also emphasized that my way of investing probably requires at least 2 years of holding before a significant gain arises!

Do also note that as of 15 Dec 2018, the company, at the price of S$0.295, has been deem as an undervalued company via The Ultimate Scorecard. 


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

Please do your own due diligence before you invest this counter.

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, December 27, 2018

Big Idea 12

This article contains PORTION of the information from the 4th Scorecard Newsletter written on 27 Nov 2018 for my Moat Scorecard subscribers. Full disclosure was provided for the Moat Scorecard subscribers. 

This new Big Idea was stated in both my previous 3rd and 4th quarter reporting. But it has not been revealed yet. For the last post of 2018, I will be talking about this final Big Idea in my current portfolio.

As I had already sold 2 big ideas previously, I currently have 10 big ideas that is based on my Big Ideas Investing Theory.

Big Idea 12 is a new company in my portfolio since I only purchased it in October this year.

Reasons Why This Counter Qualifies as a "Big Idea"

1. Great Balance Sheet

Big Idea 12 Balance Sheet

If you look at the balance sheet, you will be able to understand that the company has high cash, high current ratio, low leverage and low gearing. This just simply shouts that this is a very good balance sheet.

2. Free Cash Flow Generating

For many companies, profits do not necessary generate into cash flow. But for Big Idea 12, its profits have constantly been able to generate into Free Cash Flow since 2015. This has increased its cash holding from S$136 Million in 2015 to S$203 Million in 3rd Quarter of 2018.

However, it is important to note that since a high amount of the company’s business operation is in China. There are restrictions in bringing the cash out of China. As of Annual Report 2017, over S$139 million of cash are subjected to China control regulations unless it is for normal dividends.

With that, this brings me to the next point...

3. Dividend

Since capital controls in China only allow the company to export these funds out through distribution of normal dividend means, this meant that Big Idea 12 will probably keep paying its dividend on a regular basis.

In my opinion, I have come to realise that dividend or special dividend could be a double edge sword. Too much of it will push the share price up to an unsustainable level.

Since the company is able to generate free cash flow consistently, this should not be too much of a concern. In addition, dividend is another form of return for me in order to reward me for holding on to a good company.

In Short

This is definitely not the full article that I wrote for the Moat Scorecard subscribers. In that article, there are more positive pointers and I also commented on some negativity on Big Idea 12.

From the above reasons, you may see that I purchase this company due to many of its positive financial reasons. Nevertheless, if you come to realise which company it is, you will have also knew about Big Idea 12's competitive edge.

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

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.

Tuesday, December 25, 2018

My 15% Portfolio - End Of 2018 Record

I released my 2017 record on last year Christmas day. So I decide to release my 2018 record today.

It has been a year. But what a year it has been! It was fantastic last year, but it is very bad this year. Basically since December last year till now, it has been a roller-coaster ride.

This is how I feel
As I was reading Simple Investor's review for 2018, it made me feel like "what have I done all these years"! He should have been the front for Fundamental Scorecard!

In my view, he is someone whom is super discipline and thoroughly follows his own method - the Moat Scorecard.

Nevertheless, I have to say I still prefer my current method of diversification through methods.

Without further a do, lets take a look at my current stocks holdings...

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 3rd Quarter 2018
Current/End of 2018
Singapore Telecommunications Limited
Singapore Telecommunications Limited
Chuan Hup Holding Limited
Chuan Hup Holding Limited
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
Singhaiyi Group Ltd
Singhaiyi Group Ltd
The Hour Glass Limited
The Hour Glass Limited
Powermatic Data Systems Limited
Powermatic Data Systems Limited
APAC Realty Limited
APAC Realty Limited
Tiong Seng Holdings Ltd
Tiong Seng Holdings Ltd
New Big Idea (Yet to Reveal)!
New Big Idea (Yet to Reveal)!
The Walt Disney Company (USA Counter)
The Walt Disney Company (USA Counter)
Quarterhill Inc. (USA Counter)
Quarterhill Inc. (USA Counter)
Facebook, Inc. (USA Counter)
Facebook, Inc. (USA Counter)
Alibaba Group Holding Limited (USA Counter)
Alibaba Group Holding Limited (USA Counter)

Additional: A.Plus Group Holdings Limited (HK Counter)

Additional: Norbord Inc. (USA Counter)


Before I continue, I will just reveal my overall portfolio performance is negative 11.16%! (Now you know how I feel after reading Simple Investors Review).

The main difference during this quarter and last few quarters are that there are lesser changes now in my portfolio. With 2 addition overseas companies, I have about 18 companies in my portfolio. My Big Ideas Investing Theory, which consist of only Singapore companies, have resulted in minimum changes within my portfolio as it contributes about 65% of my overall portfolio.

My Plan for 2019

1. Continue my Big Ideas Investing Theory for the Singapore Companies and do not allow it to fall below 60% of my portfolio. There should be less than 10 companies within the Big Ideas Investing Theory.

2. I intend to expand the total companies in my overall portfolio to a maximum of 20 companies. But the new companies should consist of only overseas companies. The reason is due to the following post. After backtesting my theories for the overseas market, I decided that I want to get MORE involved in the overseas market especially 2019 when all indexes have came down. But despite investing in the US and HK market for about 1 year, I still consist myself a newbie. Thus, I want to diversify more in terms of the number of companies for about 20% to 25% of my overall portfolio.

3. Think thrice before investing, think thrice before selling. This is a reminder to myself and do not make a rash decision.

4. Must have an intrinsic value. This is another reminder to myself. Recently, I made a purchase on A.Plus Group Holdings Limited and the price flew after a week of holding! But at that time, I do not have any fair value of the company so I was very confused of whether what I should do. Luckily, I held on to it and the price is at HK$0.810 as of today.

In Short

Although I really envy Simple Investors' returns, but I also understand my own way of investing. As per my returns post, I do understand that my track records will only appear after a longer holding period of more than 2 years.

After being an investor for so long and already having my own investment method, I do still believe in my own way of investing. At the end of the day, invest in companies that (1) produce free cash flow consistently, (2) owns little debt or even few liabilities and (3) have significant margin of safety.

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

Saturday, December 22, 2018

Who Let The Fed Out?

I woke up this morning to realized that the US market has fallen for 3 consecutive days.

I seriously felt fine since I anticipate the drop in a post stated in November.

But this time round, it hit me quite hard because I was going to do my review for year 2018 soon. Since my portfolio has consist of some US counters, my paper losses will be more huge.

With that out of the way, I guess I felt really great moving into 2019. Whenever I look ahead, I felt kinda of excited and believe opportunities will arise especially for fundamental investors like me.

For those that are still in the dark, I felt it is time to summarize what had happened in 2018:

1. Since Fed hired Jerome Powell as the Chair, he has been on track to increasing interest rates.

2. As interest rate increases, fixed deposit interest rate becomes higher. Investors started to move their funds into safer haven with some many crisis calls. Less traders were in the market. Banks also increased their fixed deposit interest rate, such as CIMB giving 1.9% interest rate for fixed deposit.

3. Furthermore, Singapore Government also continued to increase the number of ways to save via Singapore Saving Bonds. Over $3.7 Billion has went out of the market and into Singapore saving bonds.

4. On the other hand, interest rate increases also caused companies and individuals to have a harder time in borrowing. Debt becomes more expensive and many companies started finding alternatives to finance debt.

5. For many individuals having floating interest rate on their existing mortgage, they also find it hard to even make monthly instalment payment. There are articles with headlines such as "High-end auctions on the rise in Singapore" and "One in four properties for auction in January to October is a posh asset" in the news recently that amplify the seriousness of the situation.

Basically, interest rate increases cause liquidity to exit the market. As safe haven yield becomes higher, the market starts to cool down and companies also start to slow down.

All these are happening as we see trade tensions around the world happening - US-China Trade War/Technology War and even our every own Singapore-Malaysia Ties.

Lets' also not forget that quantitative easing around the world is stopping.

In Short

If you are worried about everything that is happening around the world, may I suggest you re-read what I wrote previously:

Steps To Take In A Market Correction
More Thoughts From This Market Correction

I shall end of this post with this quote:

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.