Tuesday, October 31, 2017

Interview with "Reader Who Uses The Scorecard Method"

I will like to apologize for the delay in posting. I had wanted to do a "Reasons to come for the Investing Workshop" post on Sunday, but it ended up sounding too HARD-SELLING, thus I reverted it to draft instead. However, the short publication got "crawled" into my InvestingNote page and some people seem to be quite turn off by it. I guess I made the right choice in turning the post into draft.

Anyway back to the main topic... 

This will be an interview with the "Reader" whom had supported me since late 2016. Not only has he read my blog regularly, he has also came for my seminars numerous times and followed my scorecard method since the "Enhanced Triple S Scorecard" days.

The reason I interviewed him was because I felt he was a bit different from the regular investors. Most investors seems to focus on news, financials or charts. But from my conversion with him, he get inspirations from observing "businesses around him" (Something I did at the start too) and understand how some of the businesses operate. I felt this was an X-factor that can make him a very good investor in time to come.

As for me, I am just glad that my sharing has helped people to invest.

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

1. Tell us more about yourself.

Reader: I am 30 this year and working in the Public Service. Even though I had a relatively comfortable childhood, living below my means has been really helpful in my investing journey thus far (I've only been investing for about 2 years).

2. How did you get into investing?

Reader: I was inspired after looking at my parents' CDP statements.They had mainly blue chips, some of which they have held since the 1990s. The dividends which they had been collecting over the past decades inspired me to start investing.

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

Reader: My approach is very much skewed towards income investing. Besides dividend yield (which can be quite misleading), I also usually look at the payout ratio, EPS growth and other relevant metrics. I also try to read more about different business sectors to get a better understanding of how likely the company is able to grow due to the disruption in various industries these days. Some of the blogs which have inspired me are paullow investment journey, a pen quotes and thumbtack investor.

4. Understand that you have been using the scorecard since the Enhanced Triple S Scorecard days, how have it helped you in your investing method?

Reader: The scorecards have made me realise the importance of cash flow and cash holdings of the company with the metrics like free cash flow and ratios like P/FCF.

5. Understand you are also a Fundamental Scorecard website subscriber, how has it benefited you so far?

Reader: The fundamental scorecard has streamlined the process, where previously subsribers would need to input the figures on their own, now there is a one stop portal where you can see stocks that score highest on the Ultimate Scorecard and Full Analysis easily. I would recommend it especially if you are too busy to do your own analysis.

6. So far, what is your best investment and worst investment since you started investing/trading?

Reader: My best investment would probably be KSH Holdings which got me about 50% gains and I have sold it some time back. Although it did not pass the super scorecard at that time, I decided to invest in KSH because of their consistent dividends and cash flow.

Worst investments... so many to choose from. Probably Starhub or Singpost which taught me the importance of cutting losses and not to 'fall in love' with any stock even if they are 'blue chips'. Left my positions with about 10-15% losses (less after dividends).

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

Reader: I've been looking at some real estate stocks such as Straits Trading and Low Keng Huat as well as healthcare REITs like First REIT and Parkway Life REIT.

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

Reader: Although I'm probably not qualified to give anyone investing advice, when I just started investing, I was reading financial blogs and newspapers (you can read many financial newspapers for free at NLB). I believe in continuous learning and still read a lot of financial blogs till today. I think the most important part of investing is controlling your emotions (and also don't use leverage for investments).

If you are interested to know more about the Ultimate Scorecard or the Fundamental Scorecard Website, do click on this LINK to sign up for our 2nd Value/Growth Investing Workshop

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

Tuesday, October 24, 2017

Fundamental Scorecard = Mechanical Investing

I had learned about a new term after reading about Lazy Singaporean's Blog Post - Is mechanical investing a form of index investing?

It was the first time I came across this term, "Mechanical Investing".

After I googled, I found that Investopedia state that mechanical investing is a form of "buying and selling stocks according to a screen based on predetermined criteria, usually with the help of technical indicators such as relative strength or momentum. This method allows traders to enter transactions without emotion and backtest their strategies by using historical data from any time period."

It seems that without any prior knowledge of this term, I have been following mechanical investing via my scorecard method.

Although I am not a trader, but I have been practicing "buying and selling stocks according to a screen based on predetermined criteria" via the scorecard method. I have also "backtest these strategies by using historical data from any time period". Thus, I believe I have been following mechanical investing subconsciously.

Other pointers in the Lazy Singaporean's post is also worth mentioning:

1. Mechanical investors do not care about the industry, news and anything outside the factors listed. As long as it meets the criteria, they buy it.

TUB: For me, I have yet attain the enlightenment of deserting all emotions, news and industry and solely following on the Ultimate Scorecard picks in the Fundamental Scorecard website. But if a counter passed the Ultimate Scorecard, it does provide me with a HUGE sense of comfort to just go ahead to buy the counter without the need to do indepth fact finding. 

2. However, we could go one step further by creating our own index, which might or might not beat the broad index over time.

TUB: Fundamental Scorecard website has a surprise coming for its members soon next year. And it is deeply link to the above sentence. 

3. This is where it gets interesting, because such mechanical investing approaches have been actually proven to beat the market over the long run.

TUB: This post discusses about very successful investors, such as Walter Schloss, Joel Greenblatt, James O'Shaughnessy and Joseph Piotroski, following mechanical investing. I have not yet reach their level yet. Based on the latest post of my portfolio, for the 1st 9 months I have achieved 13.6%. It is not amazing, but to me, this is a good start if I could have 13% for each of the next few years.

In short, I really believe the Fundamental Scorecard website is promoting mechanical investing. This will definitely help retail investors in ignoring the "noises" and concentrate on the facts of each counter.

If you are interested to know more about our Fundamental Scorecard website, do click on this LINK to sign up for our 2nd Value/Growth Investing Workshop! We will be discussing about our Fundamental Scorecard website during the seminar!

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

Thursday, October 19, 2017

Life After Getting Your Own House

I just started to live in my new house for a few days. And what follows was unpredictable.

Housework, cleaning, buying stuff, cooking, arranging for rectification, putting mahjong paper and then it repeats.

I no longer have any time for reading and much less for blogging. Over the last few days, I only looked at the stock market for about 10 to 15 mins each day.

Then one day, Simple Investor SG messaged me "Market drop suddenly".

Although I do not have enough time, but I still looked at the market for 5 seconds. Then I saw the STI at 3,334.91. I replied Simple Investor SG, "inform me only if STI was at 3000". Then I went back to my housework.

It is only on a afterthought that I realised why did I have this "super heck care" attitude?

There are a lot of reasons behind it.

1. Experience - I guess having been through a few number of hiccups, I don't think a minor correction will affect me. Furthermore, I have already allocated a percentage of cash that to reinvest in the market.

2. Already In-The-Money - As per my latest portfolio update, I am already on a 14% gain this year. Thus, I have more buffer for my portfolio to fall if necessary.

3. Ultimate Scorecard - I have a number of counters that has passed the Ultimate Scorecard. Thus, this kept me calm even in the mist of correction. The reason is because I know that for a counter to pass the scorecard it must have a certain number of abilities. Furthermore, if required, I can also keep the counter for a longer period.

In short, I believe my limited time in future must be used more effectively. Therefore, there will be more usage of fundamental scorecard website, less analysis of individual counter.

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do click on this LINK to sign up for our 2nd Value/Growth Investing Workshop!

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

Friday, October 13, 2017

Our 2nd Value/Growth Investing Workshop

Building on the success from our 1st Value/Growth Investing Workshop, Simple Investor and I will be conducting our 2nd Value/Growth Investing Workshop on the 3rd November 2017.

You can read about our 1st Value/Growth Investing Workshop from these bloggers whom came for it.

Write up by Brian of 3F:

Write up by Christopher of Growing Your Tree of Prosperity:

Write up by Richard of Invest Openly:

In additional to their feedback, we have also gotten other feedback from the participants. And so we will be presenting the investing workshop a bit differently this time and we believe it will be BETTER than the 1st Value/Growth Investing Workshop.

Rather than quantitative, it will be more qualitative. Be it newbie, or experience investors, I believe you will definitely gain something.

Furthermore, my friend, Poh Lin, will be sharing another useful topic on insurance that day. Do come if you are interested.

The details of this investing workshop is as follows: -

Date: 3 November 2017, Friday
Time: 7.00pm to 9.30pm
Location: International Plaza, 10 Anson Rd, #36-05A, Singapore 079903
Price: $20 

We will also be showing our valued website, Fundamental Scorecard, that day and explain on how the website assist us on our investment decision on a regular basis.

If you are interested in this workshop, do click on this LINK to purchase the tickets.

For those who had already purchase the tickets, thank you for your support!

We looked forward to your participation!

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!

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

Sunday, October 8, 2017

Another Unique Method - Bottom Fishing

How should a regular retail investor hedge against a raging bull run? If you feel the market is going to turn and you don’t want to SHORT, what can you do?

I am generally a LONG only investor managing a very low 6 digit portfolio figure. I don’t SHORT and I also don’t know how to short.

I have the belief that Mr Market is slightly overheated. However, even if I think it will crash, I still believe in staying vested rather than timing the market. This is because over the long term, I DON'T KNOW WHEN MR MARKET WILL CRASH.

(The joke is on me. I always felt that 2017 will crash, but look at how fast it has rise! Lucky, I continue to stay vested.)

I have the opinion that there are many other retail investors out there with the same thoughts. So I hope sharing of this method will enlighten them.

Do note that I have spoken about this method before in this post before. But since the bull run have been very strong, I like to emphasize on this method again.

I call this method “Bottom Fishing”.

1) Find Counters at 52 weeks Low Share Price

Basically it meant that you invest in the counters that are at their 52 weeks low share price, coupled with a variance of up to 5%.

This is also based on the assumption that for a counter to hit its 52 weeks low share price, it is already at a very low price. In the event Mr. Market decide to crash, the counter may not fall as much as compared to other counters.

Furthermore, the 5% variance is for the investors to have more selection.

2) Check the 52 weeks Low Share Price Against Share Price Over The Last 3 to 5 Years 

After finding a list of counters at 52 weeks low share price, the next thing I normally do is to check the general trend of the share price for the counter over the last 3 to 5 years.

If the current share price is also close to the lowest share price over the last 3 to 5 years, then I believe that in the event Mr Market crashes, the counter will fall even lesser than expected.

3) Find Out the Reason/s Why The Counter is at 52 weeks Low Share Price

For the 3rd step, it is important to understand and evaluate the reason or reasons that caused the counter to fall to its 52 weeks low share price. Thus, you will need to read up on the counter as much as possible to understand why the share price has fallen so much.

At this point if you are uncomfortable with the counter, MOVE ON.

4) Check For Any Possible Catalyst Or If The Counter is Fundamentally Strong

Once you understand why the share price has fallen to its 52 weeks low share price, you should also check whether if there is any form of catalyst for the share price to rise back in the short term. If not, do also find out if the counter is fundamentally strong (I normally uses the Ultimate scorecard to check on its fundamentals).

It is only after you have done with all the checks, and you are satisfied with the answers, then you can buy the counter.

I personally believe in this method and I did that once with the REITs (Read here).

In a way, this method works better for REITs because of the following:
  • Its share price is generally range bound unless it did some right issues or its tenant cannot pay.
  • In addition to the low share price for the REIT counter, the dividend yield provided more “buffer” if the share price continue to falls. For example, if the dividend yield is 5%, that means your counter will be able to fall 5% more since the drop in share price can be covered by the dividend.
  • Finally, for REITs, its business model is rather stable. Their revenue is rather predictable and their balance sheet is reasonably strong due to their huge fixed assets. I believe there is also a guideline on the amount of debt a REIT can take on. Thus, this limited the debt a REIT can take on if it becomes too aggressive.
Therefore, if you also have the belief that the market is slightly overheated and you want to take some precaution, you can also try out this method.

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!

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

Wednesday, October 4, 2017

A Matter of Questionable Management

Singhaiyi Holdings Ltd (Singhaiyi) was a great call previously by me. I average upwards when it announces an exceptional Q1 2017.

However, its recent purchase of Sun Rosier is a bit hard to accept. There were explanations that their purchase price was too high. Nevertheless, I decided to hold on to them as I believe the management may have a different view.

But I realized Singhaiyi missed out reporting that it was awarded a public tender of a string of commercial units from OKH Global Ltd (OKH) when they were the only bidder.

Announcement made by OKH on 11 Jul 2017
No announcement by Singhaiyi on 11 Jul 2017
For those that do not know, Singhaiyi and OKH technically are owned by the same parent company - Haiyi Holdings Pte Ltd. 

This meant that this was actually a related party deal. From my experience, I doubt any related party deal will be fair to the minority shareholders. Furthermore, not announcing the "award" makes it looks like Singhaiyi maybe on the losing end.

To justify the deal, I tried looking into the announcement. But more questions follows.

For the information above, without knowing the size of the property, how will I know the current market value stated in the report are reasonable? 

Although there are ways to check the property size (like reading pass annual reports), but I just felt there was no need to. It just seems to me the management just wanted to hide some fact.

In addition, the following section gave me the facts to finalized my thoughts:

Seriously?!?! 1 BID!?! 

In Short

The purchase of Sun Rosier had already made me felt Singhaiyi will not be sharing the gains with us - the minority shareholders. Coupled with the lack of announcement of winning the public tender, these actions just made me uncomfortable holding onto this counter.

Nevertheless, it is important to note that the company may still have a good financial year 2017 due to the initial gains in Q1 2017. 

But I just had too many questions about how Singhaiyi is being managed. Thus, I decided to just sell off all my holdings.

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!

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

Tuesday, October 3, 2017

This Counter Flew Up Into The Sky!

Sometimes Mr Market screw you up, sometimes Mr Market give you surprises!

Ocean Sky International Ltd (Ocean Sky) was a counter I bought on 31 Jan 2017. It is a micro-penny counter that went under a structure change at the end of last year. They change their business from manufacturing clothing to becoming a construction company.

I was a bit disappointed when Ocean Sky released its full year results for 2016 on 1st March 2017. Its net profit was boosted by “other income” – recognition of fair value gain on investment property in Cambodia, and its balance sheet has significant “goodwill”. In my opinion, these are just “air” fundamentally.

Nevertheless, I kept holding on to it because I believe the company will need to drive the share price up with business activities. Furthermore, this counter is rather illiquid. Share price move up and down significantly, but only due to small volume.

However, I realized the company started to announce the purchase of properties to develop since April 2017.

It started with a proposed shop house development project in Cambodia, then followed by a purchase of a GCB for redevelopment and then came 2 major announcements – the collaboration with Tiong Seng Holdings Ltd (Tiong Seng) on the redevelopment of the 2 sites at Jervious Road and the redevelopment of Sloane Court.

However, even after the news of the collaboration with Tiong Seng came up, nothing much happened to Ocean Sky share price.

It was at this time that I kept accumulating on Ocean Sky counter, even though I also have Tiong Seng.

Then on 27 Sep 2017 late night, Ocean Sky made the announcement of proposed disposal of the investment property in Cambodia.

On 28 Sep 2017 morning, the share price suddenly ROCKETED. It increased 65% within 1 day!

So what will happen to my Ocean Sky holdings?

Although I am VERY TEMPTED to just sell all my holdings, but I only sold down 45% of them. Right now, my average share price is about $0.058 (Yes, accumulation of an illiquid counter is very hard, that is why its not a very low price).

For the rest of my holdings, I will try to wait for the next quarterly financials to be announced around 14 November 2017 before deciding on what to do later.

Nevertheless, for those intending to enter at the high share price now, be prepared for the long winter.

Because when the news of the disposal of the investment property fizzle down, the counter may become illiquid again. The share price may most probably drop again and the next catalyst may only be from the collaboration's developments announcing its TOP many years later.

In addition, there is always the risk of the deal of the disposal of the investment property in Cambodia falling through.  

So if you want to buy now, do think carefully. It is not that this counter do not have any fundamentals, it is just that you must have the ability to hold FOR A LONG TIME.

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!

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