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!

Monday, June 26, 2017

My 10% Portfolio - Changes After 2 Quarters

It has been almost 2 quarters and the time has come again to review my 10% portfolio again.

Before I go straight into the counters in my portfolio, it is important to note and emphasize on the following:

1. This portfolio review is calculated from the start of the year and the aim is to review the total portfolio gain after 1 year.

2. Some of the counter's initial share prices are their respective share prices at the start of this year (Especially those counters in this post).

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 be including dividends.

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

These are the updates to my 10% Portfolio:

As per Previous Post
Oversea-Chinese Banking Corporation
Oversea-Chinese Banking Corporation
Singapore Telecommunications Limited
Singapore Telecommunications Limited
ComfortDelGro Corporation Limited
ComfortDelGro Corporation Limited
Bukit Sembawang Estates Ltd
Bukit Sembawang Estates Ltd
M1 Limited
M1 Limited
Chuan Hup Holding Limited
Chuan Hup Holding Limited
Hock Lian Seng Holding Ltd
Hock Lian Seng Holding Ltd
ST Engineering Ltd
ST Engineering Ltd
Ellipsiz Ltd
Ellipsiz Ltd
PNE Industries Limited
PNE Industries Limited
Suntec Real Estate Inv Trust
Sold at 10% Profit!
LTC Corporation Ltd
Sold at 10% Profit!
Frasers Centrepoint Limited
Frasers Centrepoint Limited
Captii Limited
Captii Limited
Far East Hospitality Trust
Sold at 10% Profit!
Singapore Post Limited
Singapore Post Limited
BBR Holdings (S) Limited
Sold at 20% Profit!
Maxi-Cash Financial Services Corp Ltd
Maxi-Cash Financial Services Corp Ltd
Ocean Sky International Ltd
Ocean Sky International Ltd
Tiong Seng Holding Ltd
Tiong Seng Holding Ltd
Boustead Singapore Limited
Sold at 5% Profit!
Yongnam Holdings Limited (Sold at 10% Profit and Bought again after it falls!)
Sold at 5% Profit!
Samudera Shipping Line Ltd
Samudera Shipping Line Ltd
Falcon Energy Group Limited
Sold at 15% Profit!
Starhill Global REIT
Sold at 5% Profit!
AGV Group Ltd
AGV Group Ltd
CapitaMall Trust
Sold at 5% Profit!

Additional: NikkoAM-StraitsTrading Asia ex Japan REIT ETF

Additional: TTJ Holdings Limited (Bought again!)

Additional: Japan Food Holding Ltd

Additional: Singhaiyi Group Ltd (Yes, bought again!)

Additional: The Walt Disney Company (USA Counter)

Additional: VASCO Data Security International, Inc. (USA Counter)

Additional: Textron (USA Counter)

Additional: Sitoy Group Holdings Ltd (HK Counter)

Additional: Alco Holdings Ltd (HK Counter)

There are currently 27 counters (22 SG and 5 Overseas counters) in my portfolio. On an overall basis, I am currently achieving a total gain of about 14.2% since the start of the year!

I am currently still looking to reduce the number of counters in my portfolio to between 15 to 20 counters (excluding overseas counters). I believe a much more concentrated portfolio may bring about a higher rate of return.

It is also important to note that in my last review, I bought more REITs counters (Starhill Global REIT and CapitaMall Trust), excluding those already in my portfolio (Suntec Real Estate Inv Trust and Far East Hospitality Trust), with the aim of hedging against a bear market.

However, in this review, you can see that I have sold all my REITs and have bought NikkoAM-StraitsTrading Asia ex Japan REIT ETF instead. But I have not reversed away from my previous view of hedging against a bear market.

I made the above decision is because it allows me to reduce the number of counters in my portfolio, and NikkoAM-StraitsTrading Asia ex Japan REIT ETF is already a diversified REIT counter which is able to achieve my view of hedging against a bear market.

As of now, do note that there are a lot of changes on going for T.U.B Investing:

1. "T.U.B Circle" will be upgraded in 2 to 3 months time. This is a very exciting progress that I am really looking forward to it. Do like our Facebook page (T.U.B Investing) and follow me on InvestingNote to get the latest updates!

2. Super Scorecard is being upgraded further at this moment. The "Ultimate" extensive research is being done on this scorecard. Look out for it.

3. I am also going to review a list of my watchlist counters that I believe could be the "Next Big Thing" since I have been missing out on these exceptional gain counters, such as AEM and Micro-Mechanics.

Please do your own due diligence before you invest in any of the stocks in my portfolio.

Saturday, June 17, 2017

Random Thoughts In My Mind

As an investor, you will always run into many thoughts that will influence you and make you think much more. So these are the thoughts I had over the length of this week...

Concentration vs Diversification

It has been rather dull lately while waiting for Fed to announce the increase in interest rate. Regardless, the Stocks in Singapore did not move much. Rather, it seems that the US market is beginning to be on a downtrend.

Nevertheless, my mind is quite focus on reducing the number of counters in my portfolio and increasing my warchest.

One of the reason was that I met a friend recently (he is a very good investor and he will be in the upcoming interview series) and he commented his belief to me - "Invest in ideas you believe in the most". 

Despite disagreeing with the concentration in his portfolio, his words did influence me. It made me think a lot about each of the counter in my portfolio. In addition, I also felt my portfolio was too diversified and this did affected my returns. In my opinion, a portfolio with 15 to 20 counters will be good enough for diversification.

Currently, I am trying to manage this "feeling" in order not to rush into any impulsive decision, and relook into each counter in my portfolio/watchlist.

Rowsley Ltd downtrend

This counter has been on a downtrend for a few months now. Apparently it seems that one of the major shareholder has been selling. But the other shareholders did not buy the extra shares immediately.

I was interested in this counter previously. But my Super Scorecard save me from it, if not I will be holding on to a huge paper loses now.

Then I came up with a conclusion - It seems that "the rich can afford to lose much more or hold much longer. But as retail investors, we cannot".

My Bias

As investors, we will have our own biases,

For me, I do not like company acquiring new companies with issuance of new shares. I also tend to not like companies with extensive operations in China.

Thus, these bias may have caused me to jump into conclusion without understanding enough of the subject company.

This result in disagreements among my fellow investors and even my colleagues. Nevertheless, I guess we can always "Agree to Disagree, but everyone of us should also listen with an open mind".

In future, I will have to try to understand more before making comments of any particular counters.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Monday, June 12, 2017

Investing in Hong Kong Listed Firms

Many of you will have heard about my reluctance of investing in S-chips. Thus, my investment into Hong Kong Listed Firms will most probably have shocked you, since many of the Hong Kong Listed Firms are located or have affiliations in China.

Do read this post to understand the initial reasons I invest in US and Hong Kong counters.

In addition to the reasons in the post, another factor is my work. My current work requires me to understand the culture of China companies and the China companies financial. Through the process of learning, I understand why there are so many scandals with regards to Listed China Firms (such as those in Hongkong and Singapore).

One of the reasons is the China invoicing/receipt system. Every invoice is tracked by the government centralized system, so that it can track back and tally with the company's tax submission.

To get around this system, companies may have another "system" for cash and carry items. These items may not have been recorded in invoices when sold, but will still be included in their revenue.

Therefore, you will always be able to find scandals about Listed China Firms explaining that the auditors being unable to account for a certain receivables or revenue.

To keep the story short - For me to be willingly to take the risk and invest in a Hong Kong counter, it should pass the following criteria:

1. Pass the Super Scorecard with at least 8 points (I stated previously that I wanted the counter to be able to score 10 points, but it is VERY HARD to find counters scoring so high. Therefore, I give in and reduce that to 8 points.)

2. The main headquarters should not be located/registered in China.

3. The main bulk of the companies' customers should not be within China. The "Cash and carry system" will most probably worked for products that can be shipped within China. For those products that are require to be export, the risk for this issue will be reduced.

After about 3 months, I finally decided on the 2 Hong Kong counters that I will be investing in.

To summarized, I had actually reviewed a lot of Hong Kong Listed counters using the Super Scorecard and here are the list of counters that I reviewed and ignored:

Do note that this review is done over the cause of 3 months and the current score of the counters may have changed due to either updated financials or changes in prices.

1. Eagle Nice (International) Holdings Limited - 7 points
2. PAX Global Technology Limited - 4 points
3. Emperor Entertainment Hotel Limited - 8 points
4. Win Hanverky Holdings Limited -7 points
5. Tao Heung Holdings Ltd - 8 points
6. Ajisen (China) Holdings Limited - 7 points
7. SUGA International Holdings Limited - 4 points
8. Kingmaker Footwear Holdings Limited - 4 points
9. Playmates Toys, Inc. - 7 points
10. Le Saunda Holdings Limited - 8 points

These are the 2 counters that I invested in:

1. Sitoy Group Holdings Ltd - 11 points

You may not know this company. But you will know its main customer - Coach, Inc. With more than 50% of their revenue coming from US companies, we can at least be somehow assured that the financials are real.

Furthermore, if you google this company and you will find many articles about it between 2014 to 2016. However, there isn't much write up now, which is most probably due to its "did not meet expectation" results.

Nonetheless, it fulfills all my criteria. Thus, I bought it.

2. Alco Holdings Ltd - 9 points

I had actually reviewed this company a long time ago. But I waited for a long while before I bought it. This was because it was basically operating in the electronics-retail industry and I believe this industry is too saturated and competitive.

However, after doing so many Super Scorecard reviews, I realized that for a Hong Kong company, to be able to score 9 points is simply amazing.

In addition, after doing more research, I realized that over 90% of the company's revenue is from USA and their products are actually sold under a very famous trademark in USA.

Thus, with these information, I decided to purchase this counter.

For now, I decided to keep my investment in Hong Kong Listed Firms to just 2 counters. Then at the end of the year, I will review my results, including those investment in the US listed firms, and evaluate if I am on the right track with my theories.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Wednesday, June 7, 2017

Technical Analysis - My Point Of View

I bet you have heard me saying, "I know nuts about TA (aka Technical Analysis)".

I also don't know what pink line, blue line and purple line is about.

I also don't understand how drawing a cup can help me with the trade.

And this is the craziest, how does a dragonfly help to trade?

But I do feel I know something about technical analysis and that is "Support".

This is not done by drawing any lines on the chart. But this done by using your eyes!

In my smartphone, I have this app where I watchlist over 40 counters.

Every day I scroll through the app and look at the 40+ counters. After a while, you will realise, for every counter that "is liquid enough", it will have a support price.

Certain counters will hardly fall below a certain share price, unless events such as consistent bad quarterly results or negative news broadcast about the counter, becomes public news.

Thus, in my opinion, this will be the "Support" price for the counter.

An example is the following counters, which I have been watching for a few months:

- Singtel - $3.700
- Comfort Delgro - $2.400

Another example that have shown what happen when a support price is broken is Singpost.

In my opinion, its previous "Support" price was $1.300. However, since this "Support" price has been broken, the counter has been on a freefall.

Another factor about "Support" price is that I believe it will mainly happen to Blue Chips. This is because I believe this theory will mainly worked on Blue Chips as only these counters are liquid enough or has enough BBs to support the counter at that certain price.

These insights also allowed me to produce "The Stable Stock Analysis" within the Super Scorecard.

It was based on a "forever holding period" view. Therefore, for a counter which passed "The Stable Stock Analysis", the investor should be buying in tranches/batches, whenever the counter reach that share price or a share price lower than that.

The eventual view is that, with good management, the company will definitely be able rise back to a much higher share price over a long holding period.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

Saturday, June 3, 2017

This Comeback Kid Rises 20%!

Over the last 2 days, the market seem to have become "happier". But at the back of my mind, I am always having a cautious view - "Expect the Unexpected".

Do note that "Comeback Kid" is a nickname that I give to a counter that I had divested completely, and re-purchased at a later date.

The previous "Comeback Kid" was Singhaiyi Group Ltd, which I had written in the previous post.

For this post, the "Comeback Kid" is TTJ Holding Ltd (aka TTJ).

I really regretted selling this counter. 

My actions were largely influenced by the "noises" after TTJ announced its 2016 full year results. 

At that time, TTJ order book reduced significantly to about $50+ million and there was not much direction indicated about the company's future direction in the quarterly reports. 

Furthermore, as the CEO holds about 85% of the shares of this counter, there were "noises" that the CEO will most probably "low-ball" the minority shareholders - by producing poor results in 2017 that resulted the share price to fall significantly and then delist TTJ at a very low share price.

Therefore, I decided to divest all of this counter at 37.5 cents on 17 January.

However, TTJ was still able to achieve 13 points (almost full marks!) for the Super Scorecard with its 2016 full year results.

Over the next few months, I kept wondering if I made the right choice as TTJ share price continued to range between 37 cents to 39 cents.

It was after a long deliberation that I decided to repurchased TTJ at 37 cents on 28 April. 

It was basically due to this 2 reasons:

1. Continued to score 13 points for the Super Scorecard 

TTJ was able to maintain 13 points in the Super Scorecard, even after the announcement of its 2017 1st Quarter and 2nd Quarter results.

2. A Clearer Future Direction

While I was doing my research during the write up of the construction sector, I realised that TTJ has initiated to get accredited as a PPVC manufacturer (as per BCA website). This gave me a clearer picture of the company's future direction.

"Lucky Me"

Soon after my re-purchase of its shares, TTJ announced that it had purchased some land, property and equipment in Johor for its future projects.

Furthermore, on 22 May, TTJ also announced on that its order book had increased to $166 millions.

With these positive news, its share price climbed steadily to the current height of 45 cents!

In Short

The conclusion of this lesson is that I have to believe in my own Super Scorecard and ignore all other "noises".

For those who is interested in The Super Scorecard, do read up on the Launch of T.U.B Circle. This is a 3 months subscription at a very low price of $20 which will give you access to my database of over 40 Super Scorecard of various counters AND YOU WILL ALSO RECEIVE A SUPER SCORECARD TEMPLATE AND ITS HANDBOOK! If you are interested to sign up, feel free to contact me.

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