On this journey to financial freedom, I pen thoughts and articles to share...May my readers benefit from the reading and together we become wealthy...in monetary if not spiritually...
Its been a long time since I last posted on Frasers Centrepoint which I've went in and out twice. Today's post is on year end review of 2016 & past 4 years since I started record keeping.
2015 was a bad year for me, as it was the year of loss and I was struck with many "value traps" including OUE, M1 and took losses with Wee Hur and a few unlucky trades like Apple & DXN SP500 BEAR3X.
A lesson that I kept forgetting is to cut loss when my entry reason (typically technical chart setup) no longer works! I tried to kid myself by turning it into long term play, at some points I had to recognize that fundamentals were deteriorating which happened for Wee Hur and had to cut loss and face reality.
Another was, when my technical views were right, for the case of Apple, but market shaked me out; I was unable to handle the emotional upset & re-enter, thus missing the spectacular run in May 2016.
Fortunately I managed to recover the losses, and made a gain of about $10K over the past 4 years. Bulk of the gains were through CPFIS, thus it was locked up, but this year I made a gain of about $3k which I managed to close by year-end 2016.
In 2016, I started tracking more indepth in terms of the amount of gains I managed to capture from each counter's channel, while majority were positive gains, I still had about 31% of them that were losses. That's the normal dealings that happened for trading, and I'll do well to manage it like a business and not hold on to obsoleted stocks holdings (beyond my cut loss risk limit).
A = 30%+ of channel
10
28%
B = 20%-30%
7
19%
C = 10%-20%
6
17%
D = 10% or less
2
6%
F = Loss
11
31%
Total
in 2016
36
trades
I also started to track performance quarterly beginning from 2nd quarter, as monthly was too short when most positions were still open while yearly is too long.
Q4
$2,923.62
Q4%
2.19%
Q3
-$3,073.21
Q3%
-2.30%
Q2
$2,043.01
Q2%
1.53%
In quarter 3, I made a wrong bet on S&P500 through DXN SP500 BEAR3X (SPSX), the result was a loss of -$1331.87; there were few other bigger losses such as Wee Hur which after I held for almost 10months, caused me -$2,315!
At the time of this writing, I managed to sold all my holdings on 13 Dec 16, and do not see myself going into equity markets soon. Even if I do, the positions would likely close next year thus I wrote this earlier review of my past 4 years of learning.
Going forward into 2017, I hope to beat CPF 4% risk free rate (even better & hit the professionals' rate of 10-20% return). To do this, I have to stick to a habit routine of market research & study... Hopefully become wiser and better able to differentiate change of trends & pullbacks.
Top 2 substantial shareholders TCC Assets Limited and Thai Beverage Public Company Limited collectively own 87.62%, should they decide to delist, all they need is to secure 69,020,756 shares which cost only $105.6 million (at $1.53 per share), which is quite cheap considering PE Ratio is only 7.71.
If earning drop by say 30% (9M16/15 fell 26.5%) to EPS 15c, PE is only 10.2.
Looking at the few property stocks that have delisted in recent years, I wont be surprise if Frasers decide to do the same.
Outlook:
- Asset enhancement works at the Centrepoint, on schedule to complete in 3Q16.
- Northpoint City expected to complete in 2018
- Minimal lease expiry for office for remainder of FY15/16
- Frasers Tower expected to complete in 2018
- Sale of units in Australia & China while not fully sold, seem to do ok
- Capital Management seem good with various notes issued at rates lesser than CPF rates for examples; on 21 Apr 16, $250 mil.issued at 4.25%, due 2026; on 21 Jul 16, US$200 mil.issued at 2.5% due 2021, along with capital recycled from sale of 19% interest in Compass Point, One@Changi City to Ascendas REIT...
- net D/E ratio decreased to 0.71x, more leverage space to develop further if good lands secured
- Going forward, expects a tepid growth environment
Weekly Price back at Sept 15 low,
MACD-H 4th green histogram, MACD line flat, may cross above signal line in 1-2weeks; Force index traced bullish divergence.
This counter
was initially spotted on 20 July 16, and that was the date I went in. Waited
sometimes when it dived below, until its 3Q earning was released on 5 Aug 16
(Fri). While the recent upward moves might be due to anticipation of earning
news, the slight dip in earnings should not be much of concerns since earlier
highlighted its PE ratio is attractive enough for me. If the uptrend continues,
then the targets should be achievable in 2-3 months time.
In this post today, I am going to share on 2 things:
1) Pokemon Go, the game & company behind it
2) Pokemon Go, starter tip - how to get your favourite Pikachu as your starter pokemon
3) Pokemon Go, the lazy ethically legal way of playing it without the 5km+ travel
1) Pokemon Go, the game & company behind it
In case you are not aware, Pokemon Go (www.pokemongo.com) is one of the first Augmented Reality mobile games where the imaginary creatures called "pokemon" which derives from Pocket Monster could be "seen" from your phone's camera. And you could throw a device "pokeball" to try and capture these pokemons.
Watch the videos below, to find out more about why this game is hot!!! And you will appreciate why the craze all over the world!
Google even did a "recruitment"video for their search for talents!
Nintendo the company that co-own Niantic, the company which created Pokemon Go; its stock price went rollar coaster along the news of this Pokemon Go!
Look at how its price rose from JPY 14,380 on 6 July 16 all the way to its peak at JPY 31,770 on 19 July 16, a 220% rise in less than 2 weeks! It came half way down after company announced the super success of Pokemon Go will have no impacts on its earning for the current financial year; this led to a disappointment as investors were hopeful that Nintendo could made a comeback to its heyday of Super Marios & its other games to compete with the new generation of gaming companies.
What does this have to do with investing? If you haven't notice, as Warren Buffett often says, great companies are all around us. If you enjoy playing games, a new game is launched & you notice a fast spreading wildfire of interests catching on among your friends & colleagues, this could be one way of detecting potential great companies in the making. Pokemon Go was initially launched on 6 July, 2016 but prior to that, Niantic has already developed another game called Ingress (https://www.ingress.com) whose maps & database forms the backbone of the current Pokemon Go.
The reporter that caught & first announced the news, noticed how the number of downloads were breaking all time records, and how its daily active users fast exceeding other famous apps. like Twitter, & fast approaching other social medias like Facebook, wechat etc.
Imagine you were that reporter that spotted the trend, took a stake before it becomes common news, you can imagine how much your investments would have doubled in 2 weeks!
So the next time you are playing games, say you are researching the next explosive stocks for investment ;)
2) Pokemon Go, starter tip - how to get your favourite Pikachu as your starter pokemon
As promised, I shall now reveal the tip on how to get the Pikachu pokemon as your starter pokemon. First off, all starters will get to choose from 3 of the pokemons (Charmander, Squirtle and Bulbasaur) below, but if you want the main character Pikachu in the movie & animation series; here is how to do:
On the map, do not touch the 3 default pokemons, keep walking away from them. When you walk some distance away, the 3 default pokemons will slowly fade away from the screen, when that happen, it will "respawn" and reappear near you again.
Keep walking away, until they respawn 4 times, from the 4th time onwards, you will notice a 4th pokemon appearing nearby, that will be the popular Pikachu [see screenshot below]
3) Pokemon Go, the lazy ethically legal way of playing it without the 5km+ travel
Now for the lazy way of playing, without the 5km+ walk... nope I am not talking about fake GPS, that is not ethical & you will risk getting banned. For those whom wish to try, go ahead but Niantic has improved their programming and will detect whether you are enabling "mock location" which is a feature that mus be enabled along with fake GPS. So, its not going to work, of course "crackers" those programmers who crack the programming could try & by pass it, but then what's the fun if you just lie down and play? It defeat, the objective of going out & meet new people.
Well, I did promise without the 5km+ walk, but it require some luck, so here is the way.
Most of us lived in HDB, Condo, this is where the GPS signal bouncing happens due to the high rise buildings which caused your character to move around. Eg. when you move to your balcony and stand by the window awhile, you will notice the GPS slow catch on & your character start moving some distance to one side before it then readjust back once your location is slowly "zoom in" and reflect your true location. You could repeat this, by going to the front, back or side of your houses, and see if this will help you momentarily move closer to some nearby pokestops, this way you could pick up some goodies & even fight some pokemons without leaving your comfort home.
So there you have it, one last tips to help you along your pokemon journey.
There are already sevaral pokemon groups on Facebooks;
Pokemon Go SG
https://www.facebook.com/groups/PokemonGoSG/
Pokemon Go North East Singapore
https://www.facebook.com/groups/PokemonGoNorthEastSingapore/
Look around, join various groups to make friends, and for those fans there's even merchandise been peddled at the various groups, for the entrepreneurial ones, who knows you might have a one-time opportunity to monetise this trend if you could identify the needs of comsumers & sell them some real life "pokeballs, pokemons soft toys etc".
Enjoy the coming National Day 8 Aug 16 holiday, have fun! & remember to watch where you are going when you play Pokemon Go ( * v * )")
The recent week was bad with gloomy news all over the places...
From increasing unemployment 2Q16, to Swiber going from liquidation to judicial management (both are bad); not to mention California Fitness closing with alot of people's monies gone from those "good deal" yearly plans that were so actively sold.
No amount of Small Claims Tribunal, Lemon's Law etc. could help in this, when a business cease; unless in the rare incidents when there still cash left after paying all the bills, salaries, then there could be some refunds/return to consumers...
Some value buyers might think these are all one-time incidents only, and eager to catch some value stocks, blue chips etc.that have rose from its bottom in Feb-Mar 16, until cheap become cheaper.
Beware of falling knives!
My advice here is do not buy yet, not this week, not next week, not even the entire August.
Why?
Below is the weekly Chart that I've captured from LTS-ChartNexus software.
If you notice, our STI index rose above 2950 only to come crashing down the past week.
Some optimistic analysts celebrates, because they cited STI still posted a gain in July 16 & predicts STI will soon rise again after retracement to its EMAs.
Me? I don't think so.
If you look carefully, STI hit the resistance, where it previously hit in the week (25-29 Apr 16) but came down. While one may argue the setup is still bullish, due to the higher low twice hit in the week (9-13 May 16) and (27 Jun - 1 Jul 16), this is not a bullish trend.
2 Indicators were shown, one is Force index which measures strengths of the bull (rise) via volume and price increase; the other is MACD, its histograms measures the differences between 12 and 26 moving averages (the default settings), a rising histogram means its fast rising (thus the diverging fast 12 and slow 26 moving averages).
Basically both shows a lower peak versus the previous, thus this fall is likely to hit 2700 & possibly even lower. In a extreme bearish case, it might go close to retest Feb 16's low of 2540, but my gut feel is it will be between 2540 & 2690, a final stab before a true bull run.
It could be similar to the earlier box I've drawn, but don't expect the same; history rhyme but seldom repeats.
It has been on my mind for quite sometimes...especially after reading blogs by ASSI & a couple of others; I finally decided to follow suit. On 23 Jun 16, I transferred $23,265.74 from my CPF Ordinary Account (OA) 2.5%pa to CPF Special Account (SA) 4%pa, topping up my SA to $50,000, at age 31. Then on 3 July 16, I transferred another $50,000 from my CPF Ordinary Account (OA) to Special Account, topping it to $100,000! Leaving aside $28,308.10 in CPF OA for about 17.5 months of mortgage payment. Should I decide to buy HDB BTO, I would have 2 years to save up, increasing OA to $65K before TOP (est.$900 x 30mths incl.bonus). If I top up $7K with cash each yr, that would result in close to $80K, lasting 50mths/4years assuming same $900 CPF contribution (for a $2,500monthly mortgage or $569K loan in 25years@2.35%)
Do note that the transfer is irreversible!
Some Pros & Cons I personally felt:
Pros
Benefit from the "risk free" higher 4% compounding interests rate
Instead of using CPF OA to buy property where 2.6%-4% compounding interests work against you, transfer monies that are not needed in near future (2-3years) over.
If you can set enough minimum sum now in CPF-SA you essentially accomplish your retirement planning as CPF interest kept pace with market interest rates but higher! This means the interests earned in CPF-SA would more or less keep pace with the minimum sum increase year on year.
Finally any excess above the minimum sum amount, at the end of the day, is still available for withdrawal when one hit retirement age, so why not take action for it now?
In the event if you do need to use CPF-OA to help with property purchase, most HDB BTO or Exec.Condo launch takes 2-3years to build, you can always use the time to save up.
Following my own calculations, my CPF contributions would be sufficient to handle my mortgage payments for 17.5 months if I stop work or 50months if I continue to work with voluntary contributions top up each year
Cons
Amount available for CPF Investment scheme, dropped from initial $30K to $8K after OA-SA transfer
This limits the growth of my CPF to contributions, as I have lesser to invest now
Monies are locked away for retirement, and one must set aside take home income to pay for mortgage payment
CPF policies are subject to changes, and we rely on prudent management by CPF of our funds for withdrawal when we retire
Should government one day change or mismanage the country, hyperinflation & depreciation in currency would destroy the savings in CPF!
Brexit has happened! Stock markets crashed, most currencies dropped (including SGD) against USD, Gold rose; so as an individual how would this possibly affect us over here?
First off, in all likelihood, as almost all governments & financial firms are trying their best to assure, nothing significant is going to affect Singapore, due to the limited trade with UK (as a nation).
Unless (1) if you own UK properties, its value now dropped 5% (GBPSGD 1.95 to 1.85),
or (2) if you own UK stocks, depending on the stocks you own, some fell more (eg. Banks) which could results in paper loss of around 20%.
Great if you don't own anything remotely related to UK, but still some of what I am talking about below, are how Brexit would affect the main street people, like you and me, here in Singapore!
Is this worse than "the Great Recession 2007" or repeat of "the Asian Financial Crisis 1997"?
Honestly I don't know.
If we look at a typical boom bust cycle, we might be due for one, since its already 9 years from the last big one in 2007.
Fundamentally, debts have rose quite abit across most nations, corporates & individuals; if we look at Singapore households debts have rose about 3x from 1997.
Before you start to panic, it is important to look at the opposite side of the balance sheet, which is the assets, specifically the net assets (Household Networth).
The substantial increase in household networth can be attributed to 2 factors, (1) general wealth increase, in particular property assets and (2) increase in resident population from about 3million to 3.9million [source: http://www.singstat.gov.sg/statistics/visualising-data/charts/resident-population]
Charts generated from SingStat downloaded data available for reference
So fundamentally, I do not think we are in a bad shape to service those debts (as a nation as a whole).
But you said Brexit could affect us individually, how?
Answer: through contagion effect & currency movement, via the single largest debt payment of average households, the monthly mortgage payment as a result of SIBOR/SOR increase.
Source of Chart: http://www.tradingeconomics.com/singapore/interest-rate
Current 3 months SIBOR rate: about 1%
Source: http://abs.org.sg/rates-sibor
You see, most recently there was a recent spike in Feb 16 to 1% interbank rate, or SIBOR about 1.25% (if you look at consumer's SIBOR from say Moneysmart http://www.moneysmart.sg/home-loan/sibor-trend)
That was the immediate effect prior & after US Fed interest rate raise its interest rate from 0.25% to 0.5%.
Add in the spread of 1% that Banks charged to individuals, the resulting mortgage interest rate is 2.25%.
Should SIBOR go all the way back to 2007 of about 3.5%, mortgage interest would jump to 4.5%!
In the worse case scenario, if the borrowers have max out the loan under TDSR 60%;
the borrowers'gross salary of $4,926 per million loan (divide $2,956.96 by 0.6)
would be wiped out!
However, this worse case scenario is unlikely to happen, as Singapore is one of the few strong financial centres with AAA ratings, thus our currency against USD is unlikely to depreciate that much.
Also, the last time SIBOR was 3.5%, US Fed interest rate was 5% then; as US Fed is likely to defer interest rate further; SIBOR is only likely to increase slightly such as Scenario 2 by 25bp.
Still in this time of uncertainty, individuals might wish to save up more cash to cope with potential increase in mortgage payment or simply to invest in any good opportunities when the uncertainty subside.
I've always enjoyed immensely Adam Khoo's talks & videos, he's even posted actual stock tips when he bought Oil through ETFs in oil companies & oil futures on Youtube. I did a small trade, took a small profit before oil went into a strong uptrend (without me).
Nonetheless I hope this post will provide you with some yardsticks for your next investments ;) *The following is adapted with my own notes, thus do refer to his original book for explanation as reference
7 Screens in Buying Great Companies at Huge Discounts
Consistently Increasing Sales, Profit & Cashflow
Sustainable Competitive Advantage (Economic Moat)
High ROE, Net Profit Margin etc.
High Growth Prospects
Conservative Debt
Debt/Equity Ratio ~ below 50%
High Return on Equity ~ 15%+
Management Holding / Buying the Stock
Stock Price is Below Intrinsic Value
*Stock is in uptrend (moving average is rising)
Added this as the best fundamentals company can still get cheaper, thus its important to buy when its in uptrend!
Screens for Selecting REITS
High Current Dividend Yield (>5%)
History of Consistent Growth in AFFO & Dividends (5-10years)
AFFO, Adjusted Funds from Operation
Formula: Net Income + Depreciation - gain/loss from sale of property - capital expenditure
High Expected AFFO & Dividend Growth
Growth forecase 5%+ with hold/buy analyst ratings
Low Gearing Ratio (less than 40%)
Undervalued REIT stock price
below NAV
Intrinsic Value via Discounted Cashflow
When to Sell
Price above Intrinsic Value + Reverse into Downtrend (price drop below 20, 50 Moving Averages)
Better Investment Opportunity & Return
Price fall as a result of permanent damage to company's reputation and/or Competitive Advantage
Parting note:
- Personally I find it extremely hard to find companies that matches the above that are undervalued; if you come across, I greatly welcome you to post in comments!
- Intrinsic Value (via EPS & discounted cashflow) can varies greatly, also it requires alot of patience to wait for stock price to fall below (say once every 3-7years market cycle)
- Growth are seldom consistent, even the best companies can have a few blips & some may reach its peaks before growth start to slow; when this happens its important to run as trends are likely to slow or change in view of slowing/reversing growth.
Nevertheless, its important to know what you are buying into; as Warren Buffett / Graham says investments are best treated like a business decision.
Good luck & may the trend be with you! ( * v * )")
