Monday, July 17, 2017

Cryptocurrency - For The Daredevils Only

Having read about cryptocurrency on Straits Time (1 and 2), I think it is widely misrepresented. 

There are some truth in these articles but I believe the concept of asking people to invest in this product is simply just wrong as of NOW.

Reasons being:

1. Marketing being root of all evil.

I think cryptocurrency is a disruptive technology on cash. But people seem to have misunderstood the use of cryptocurrency.

It started as a form of payment and not investing. But a lot of websites started marketing it as a form of investment product (due to cryptocurrency being subjected to free market forces) and people started to buy to keep.

But it is technically useless if a cryptocurrency becomes super expensive.

If a bitcoin is $2k currently, what can you use to pay it? Use bitcoin to buy diamond? Or buy a loaf of bread?

2. Bubble Creation

In addition it gets too expensive, the product will create a bubble. A very dangerous bubble because it is not backed by physical asset, but just technology.

Many people say blockchain cannot be hacked or data cannot be steal. But we cannot expect the same 10 or 20 years down the road.

Who will have thought of that Uber can disrupt the Taxi Industry? If you ask a Comfortdelgro investor 5 years ago, he will have tell you "No way lah! This will not happen!".

Anyway, due to the free market forces being in play, wild swings occur to the prices of cryptocurrency (Read this blog post here). Due to the wild swings, many of the people that bought cryptocurrency are speculators rather than investors.

3. Not widely recognized, government intervention required.

Cryptocurrency is not widely recognized.

For it to be useful, it has to be widely recognised. For it to be widely recignised, we need government intervention such as Japan making bitcoin a legal form of payment system on April this year.

But if more and more people use cryptocurrency, its value will drop. Increase in demand will result in drop in price.

This maybe catastrophic.

Think economics, the cryptocurrency is at its high price due to its niche market acceptance. With government intervention and regulations, things can be catastrophic especially for those holding on to it now. 

But I am a traditional guy (I have yet to use Grab and Uber once) so I could be all too skeptical in this aspect. Furthermore being a value investor, I am not really that much of a risk-taker.

Do note I do not discredit the aspect of a cryptocurrency being a long term potential play. But the "long term" may really be too long and money could potentially be placed elsewhere to have a much more safer and guaranteed return.

As stated in the past few posts, I still owe the readers on a tech firm I invested in as well as there will be changes to T.U.B Circle and Super Scorecard. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Sunday, July 9, 2017

Battling On 4 Fronts

Other than busy with changes in T.U.B Circle and Super Scorecard, I have also gotten my keys to my HDB BTO flat. Thus, these few weeks I will be extremely busy and I apologize for a lack of updates in this blog.

But don't worry, as the post on the upgraded scorecard and the post on the new "technology" counter that I invested in will be out soon!

Nowadays, market has been stagnant and at times, seems to be on the downtrend. Many of my watchlist counters' prices are at very tempting level for me to enter. But my portfolio is currently already engaged in 4 different "battles"!

Battle 1 - Netlink Trust IPO Application
This is the first time I tried applying for placement shares. Thus, I have to allocate some cash for this battle. If I am not allocated any placement shares, then I will apply for the public offer.

If this was a week earlier, you will hear me saying that I will not be applying for this IPO. However, this IPO seems like it will be "very hot" and I believe the share price will shoot up on its debut.

On the other hand, if I lose this battle (which meant that I did not get any IPO shares), I will just loss some application fees.

Thus, this battle is worth the fight as the potential upside is very high!

Battle 2 - CDL Hospitality Trust Excess Rights
When CDL Hospitality Trust announced their rights issue, it gave me a view that this could be a very similar opportunity to the one I experiment with Sabana REIT. The spread between the rights issue price and the share price at that time was rather huge.

I purchased the mother shares, which will allow me to apply for the rights issue and also the excess rights.

My belief is that CDL Hospitality Trust's share price will return to the norm eventually (Read Bullythebear's post), and if I am able to get all my excess rights, the upside could be huge!

However, if I loss this battle (which meant that I did not get any excess rights), I will be stuck with some of CDL Hospitality Trust's mother shares. This does not seems that bad as well.

Battle 3 - $ To Average Down ComfortDelGro and M1

ComfortDelGro share prices has been on the downtrend lately, falling all the way to 52 weeks low. I did not really know why did this happens. But many blame it on Uber and Grab disrupting their taxi business.

M1 has also been on the downtrend and is expected to be continue this way due to these 2 announcements (such as 1 and 2) by MyRepublic. Furthermore, if the strategic review by SPH, Keppel T&T and Axiata Group Berhad did not materialized then we should expect M1 to fall MUCH MORE.

Therefore, if these 2 blue chips continue to drop in price, I must have enough money to average down.

I will loss this battle if I do not to have not enough money to average down when the time comes.

Thus, I must pace myself correctly when I average down.

Battle 4 - $ To Averaging Down The Rest Of My Portfolio

Other than the counters stated above that has been on the downtrend, other penny counters in my portfolio such as Singhaiyi and Ocean Sky International has also been falling in price.

I will also need to allocate some cash for me to average down these counters. Similarly, I will lose this battle if I do not have enough money.

Therefore, in additional to pacing myself, I may also have to sell some counters to increase my warchest.

Eventually, these are just 4 battles. My portfolio is the war. 

You can lose some battles but you must win the war!

As stated in the past few posts, there will be changes to T.U.B Circle and Super Scorecard. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Tuesday, July 4, 2017

FANG and BAT - A Must Know In 2017

Do you know what is FANG and BAT? Do you know them?

If you are currently reading this via my facebook page, you will already be using one of them.

FANG is currently the acronym for four high performing technology stocks in the US market – Facebook, Amazon, Netflix, and Google (now Alphabet, Inc.).

On the other hand, BAT is currently the acronym for the 3 top technology stocks in the China market – Baidu, Alibaba and Tencent.

I believe the following technology stocks should also be mentioned – Apple, Microsoft, Tesla, and Netease.

If you still do not know any of them, you should know them now. After all, I believe one way or another, you will have already used them directly or indirectly.

This is the year where everything seem to be involved with technology. After all, technology brings about efficiency.

Furthermore, I believe, from the way these companies are innovating and improving, it is really hard to really come up with a share price for each of them. After all, the only constant for FANG and BAT right now seem to be “change, grow and improve”.

Thus, this brings me to a point that maybe it’s time I should look more into technology stocks in Singapore or Overseas.

I have been trying to skip them since it is hard to really know about their revenue generation strategy. But I believe this is the time to start opening up my narrow mind and accept the greater possibility.

As of now, I am already targeting a Singapore stock with some technology expertise, which I will reveal in my next post probably.

As stated in the past few posts, there will be changes to T.U.B Circle and Super Scorecard. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Monday, July 3, 2017

3 Things I Learnt About REITs Masterclass

When I was approached by Chlorophyll Inc to help them review about their REITs Masterclass course, I am actually quite reluctant. This is because I do not really invest in REITs and I am more interested in capital gain.

Furthermore, B has also gave his review. Therefore, I wondered what else could I offer to the readers?

Nevertheless, I decided to give the course a try in order to become a more "complete investor" and also hopefully to provide the readers with another perspective of the REITs Masterclass course.

Since I had completed the course, here are 3 things I learnt about REITs Masterclass:

1. Not Only About REITs Investing

Even though this course is focus on how to choose the best REITs to invest in, but the information taught can be easily use on non-REITs investing as well.

As the course teaches you how to look at REITs from its business model and structure, this can be also used in how we analyse the companies from its business point of view, rather than solely from the numbers.

2. How To Use Existing Available Free Resources To Get Ahead Of Others

The course teaches us to learn to use the available free online resources to understand more about each respective REIT. A step by step approach is also explained in the video.

An example is using to analyse the hospitality REITs. Mind-Blowned!

3. Learn More About Overseas REITs

If you thought that REITs Masterclass only discuss about Singapore REITs, you are absolutely wrong. This course actually also discusses about various overseas REITs. This will really broaden an investor's mindset and provide another possible channel for REITs investor to invest in.

I am glad that I have gone through the REITs Masterclass course as I believe I have, at least, brush up my analytical skills when I look at the qualitative aspect of each businesses.

If you are interested, do click on this LINK to sign up. You can also put in the coupon, TUBINVEST at the course landing page.

Currently there is a promotion going on for a limited number of sign ups. So if you are interested, do take action now!

Please understand that this is a sponsored post and I will earn a small commission if you click on the above link. But there will not be additional fees!

As stated in the previous post, there will be changes to T.U.B Circle and Super Scorecard. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Wednesday, June 28, 2017

An Interview With "Simple Investor SG"

For this month interview, I will be interviewing "Simple Investor".

He is the owner of the Simple Investor SG website, which provides the "Full Analysis V14".
We actually knew each other when he came to my Sharing Session last year. But our friendship only developed when we found each other on the InvestingNote platform again early this year.

His investing style was more directed towards growth counters with a business edge, while I am influenced more by value investing and contrarian thoughts.

Despite us continuing to agree to disagree on many aspects of our individual investing methods, but he was the one that told me to "Invest in ideas you believe in the most".

He was also the one whom help me realised that NikkoAM-StraitsTrading Asia ex Japan REIT ETF is itself a diversification mechanism.

This made me realise that, as investors, we should be open minded and be ready to hear what others has to say. You will never know when a conversation could help you improved your investing views.

Without further ado, let's get straight to the interview questions and his answers!

1. Tell us more about yourself. 

Simple: My name is John, and I am the founder of Simple Investor SG. In my day job, I'm in charge of running a small business.

2. Understand you have a database website, how did you come up with the idea? And how it is suppose to help investors?

Simple: As both a businessman and an investor, I came to realise the importance of figures in a business. Many people make avoidable mistakes in investment because they either do not enough research, or choose to justify the figure (e.g. PE 20). Hope kills, especially in investing.

I started Simple Investor to simplify the process of doing proper research before investment. Our full analysis is the result of such a simplification: by highlighting warning signs and any investment potentials in a company, subscribers can quickly identify good companies to invest in.

By the way I'm a fan of your Super scorecard too, amazing stuff.

3. How did you get into investing?

Simple: I started investing 9 years ago, after calculating how much was required for me to retire. Shocked by the amount, I turned to the internet and ended up with investment as the only thing I could start on at that point in time.

4. What is your thought process when it comes to stock-picking?

Simple: Instead of picking stocks, I prefer to think of it as buying a business. The stock market is a place where one can get a 10 million dollars company at 1 million dollar and people will be calling you crazy (for doing such a risky thing). In terms of investing style, I'm closer to a growth investor, because the companies I pick are usually ahead of their competitors (and thus they tend to grow).

Firstly, I look at the quality of the company, with the following criteria: performance (rev, net income, cash flow), debt, returns (ROE / ROC) and finally PE.

Any company that fails a quality check is one that I would likely reject.

After that, the price comes into play. I only go for companies that are fairly valued (either currently or in long term), and DCF provides an estimation of intrinsic value.

Never overpay.

5. What is your best investment and worst investment since you started investing/trading?

Simple: Worst investment would be the ones I made immediately after starting out. Believing that my portfolio allocation will reduce my overall risk and wanting a higher returns for my "high risk high return" portion, I decided to invest in Blumont. Turns out holding Capitamall doesn't actually prevent you from losing money.

Best investment is something non-investment related - taking up the opportunity to run a business, even though the pay isn't great. Once you have experience of being responsible for a company, you realize those figures on the financial statement is much more important than most people think they are. If you are a boss and you have some money made in the past, would you use those capital to take over a company that is bleeding cash?

Investment wise, my best investment would 800 Super discovered by my database. Went in 15% of my capital at 0.774 at all time high, because of the value identified by full analysis. Current it's at 1.34.

6. Any thoughts about the current market situation?

Simple: If I had any idea about where the market will go, I wouldn't be telling you (I don't though).
Any great business bought at a fair price will survive a crash, so I would suggest people to look more at the company then the overall market. It gets harder to find value in a bull market, but that doesn't mean value found will be any less valuable because the market is high.

7. Able to reveal which stocks are currently on your watchlist?

Simple: I have Nordic on my watchlist. A watchlist is one you wouldn't add at this price, but will add when it drops.

Usually, I just buy stocks I'm already holding if I do have the capital.

The stocks I am holding are my best ideas, so I'm one who adds on to them as long as there is still value.

8. Finally, any advice for newbie interested to get into investing/trading?

Simple: Advice is something everyone can give, only take them from those you want to become. If you want to learn, then learn from the best. For FA that would be Warren Buffett.

As stated in the previous post, there will be changes to T.U.B Circle and Super Scorecard. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!