Tuesday, 10 October 2017

Pennies are Better than Blue Chips for Trading?

I am not so much of a trader for 2 reasons.

1. I'm a lousy chart reader.
2. I'm investing for an income portfolio.

However when opportunity strikes I would enter some small positions here and there for hopefully, some quick bucks. The holding period for my trading positions usually range from 5 days to 6 months though I am often not nimble enough when the trend moves against me.

Anyway through my poor and amateurish trading eyes, I noticed that the price of blue chips usually move within a tight range and is usually more influenced by the big boys.

Sometimes the big boys choose to sell or buy a particular blue chip contrary to the news in the market.

Take for example CapitaLand. Despite a slew of positive news recently, its share price has been inching down last month (though thankfully it has recovered slightly since last week).

I took a look at the top institutional sells then and if I remember correctly CapitaLand was among the most heavily sold counter amongst the big boys.

On the other hand, price of pennies are more easily influenced by retail traders / speculators who are in turn, often influenced by market news.

Big boys usually shun the pennies since there is often not enough volume on the other side of their trades to effect their transactions anyway.

This means that the pennies have higher volatility and the share prices have potential for greater swings than that of blue chips. Profit-taking opportunities are higher too.

Having said that, I also noticed technical analysis is sometimes not applicable to pennies due to for example, fast price swing on piece of news before the charts can capture.

Of course this might be due to my own inadequacies in TA.

For pennies, the risks are higher. But the potential rewards are correspondingly higher too.

Last but not least, a gentle reminder which I always keeps in mind: Only buy what you can afford to lose.

Sunday, 1 October 2017

Stock Screening on a Wet Sunday

Feeling curious on a rainy Sunday, I decided to do my periodic stock screening which I have not done so for some time.

Using my usual screening criteria, the result actually surprised me this time.

I use the P/E, P/B, dividend yield, net profit and gearing in terms of debt/equity for my screenings.

P/E - Less than 10. However for today's screening I set it as 20 with reason given below.

P/B - Less than 1. Depending on the circumstances I usually do not want to over pay for my stock.

Dividend Yield - At least 4%. Above the risk-free interest rate from CPF.

Net Profit - At least 10%. I feel more comfortable with this figure as I feel there is more sustainability in the business.

Gearing - Less than 40%. Obviously I do not feel comfortable investing in a company with high debt level.

So with this set of screening criteria, I managed to get only 3 counters this time. These are:

1. Frasers Centrepoint Limited
2. Global Investments Limited
3. Keong Hong Holdings Limited

This is a far cry from the previous screenings where I usually get at least 10 - 20 results. If I set the P/E ratio to 10, Global Investments Limited will be out of the picture.

So what does this tells us about the current market?

Anyway for Frasers Centrepoint, it has always been in my watch list. I have no qualm in investing into this company once my TP hits.

For Global Investments, I have only recently started to read up on this company. Without more in-depth understanding I won't take any further action for now.

For Keong Hong, I have previously done some study here. It continues to be in my watch list.

With focus being on my new company now, I will probably be less active in the market unless good bargains appear.

Good luck everyone.

Friday, 29 September 2017

Reviewing Comfort Delgro in Wifey's Portfolio

Price of Comfort Delgro (CDG) has dropped since I bought it for wifey's dividend portfolio last month. This is mainly due to the double whammy of recent negative news.

This begets a question - Will I cut loss and sell it? Simple answer is no.

This is because the Grab / Uber factor has been overly played and I believe it has largely been priced in. Furthermore if I assume a drastic worst case of 10% drop in dividend next year, based on our purchased price the yield is still a respectable 4.3% (above my criteria of 4% CPF interest).

In fact I am looking out for an opportunity to buy in for myself and wifey.

I have previously sold my holdings for a small profit when the price hit $2.3x about a month ago.

Another important question is - Do I expect CDG to languish below $2 for the next 3 - 5 years? Simple answer is no again.

At this point of writing, CDG has a closing price of $2.08. It has risen for 2 days but this is probably due to the shorts covering.

I personally expect the price to drop again in the near term before rising to a stable point when market realise the fear is actually not that fearful.

Already I am seeing some analyst reports saying the above.

Sometimes it's funny to see how quickly they change opinion. Faster than the prata man opoosite my place flipping his prata : )

Tuesday, 12 September 2017

September Oh September

Hope everyone is doing well so far.


I realised I hasn't been blogging as much as I would like to in September. This is because there was a major happening in my career recently.

In August I left the company in which I was employed as well as being one of the shareholders. Due to certain disagreements between two of the shareholders - and I'm not one of them, a decision has been made to close down the company.

So now I'm striking out on my own. No longer with partners.

Incorporating the new company was easy. There are many companies out there offering incorporation service for a fee. I engaged one of those to incorporate my new company.

What's occupying my time are stuff that are often taken for granted such as:

Creating my company logo
Designing and printing my name card
Creating letter head
Designing and creating the content for my website
Selecting a host and creating the email accounts
Creating my company profile and individual product catalogues
Creating quotation, DO and invoice formats
etc

These tasks look mundane and I too took these for granted when I was an employee previously. However what needs to be done got to be done. So who else but me.

Most of the designing stuff can be outsourced to professionals. But I wanted to be frugal on this front as I need the funds to be put to better use.

On the bright side I have already completed several projects, thanks to the support from my customers!

I would say it is a good start for me.


On the other hand, I have increased the frequency of my runs recently. I have always love running but for various reasons, I have not been running as much as I would love to.

My pace has suffered as a result however I should be able to return to my old pace soon. Not that I care much about the pace, just that it serves as an indication of how 'lazy' or 'hardworking' I have been.

Most importantly I love what I do and I do what I love and this helps me to maintain my healthy lifestyle.


Just to show off before I log off!

Our dear traffic police sent me a surprise letter, complimenting me for being a careful driver for the past 5 years. Instead of a compliment I would very much prefer some tangible rewards though. 😁

And the environmental-conscious me is thinking why sent a hardcopy compliment? Actually an SMS will suffice.

And I thought I can show off! More than half of the motorists have received this compliment as well. Lol.. 😂

Wednesday, 30 August 2017

August Updates

August has been a good month for me in terms of investments.

Dividends

Dividends Collected

S$1,486.57

This comes from M1, SingTel, OCBC, CapitaLand Commercial Trust and Suntec Reit.

Stocks Purchased

Mapletree Logistics Trust @ S$1.185

This purchase forms part of my long term portfolio. Reasons for entering have been shared here.

Comfort Delgro @ S$2.18

Bought a second tranche when the price took a battering recently. This lowered my average price and subsequently I sold my holdings to take in some profits.

However I will enter CDG again once the opportunity arises as it is still a solid stock that I fancy and my belief in its fundamentals remains unchanged.

Wilmar @ S$3.11

I have been monitoring Wilmar for some time and when the price dropped recently to what I felt is a value with sufficient safety margin, I decided to make my maiden purchase into this commodities giant.

This will be a short term trade for me as it does not fits into my long term plan.

Stock Sold

Comfort Delgro @ S$2.33

Sold CDG for a small profit during the mini run up on news of possible collaboration with Uber. Decided to lock in the profits first for deployment elsewhere.


Last but not least, I received a bonus S$100 in the form of NS50 vouchers. Cheers!

Tuesday, 29 August 2017

Surprise Call from M1

I have always been satisfied with M1's customer service in my close to 20 years with them.

From the way they handled my queries over the phone to their staff at the front line, perhaps I have been lucky. So far I'm pretty impressed with their flexibility and initiatives.

Today I received a call from one of their customer service officers who offered me a loyalty voucher with quite a substantial amount to re-contract with them.

On top of that he also told me to delay my purchase (if any) to next month as phone prices will change after end of this month and Comex is coming so I might get a better deal!

I am pleasantly surprised as I was actually looking around for the past two weeks for a replacement for my 3 year old phone which apparently is nearing the end of its life 😞

Looking beyond the surface, this actually tells me that instead of being reactive to market changes, M1 is in fact proactively trying to retain customers.

Kudos to them 👏

Apart from that they are also coming up with promotions to get more customers on board. One example is the 300 mbps broadband plan @ $23 per month for the first year for customers who do not need a 'free' router.

I almost wanted to tell the CSO not to offer so many incentives especially handset subsidies to customers 😀

The above together with the initiatives I highlighted in my previous posts, further reinforce my belief that the sun will be shining brightly for M1 soon!

Friday, 18 August 2017

Wifey's S$20,000 Portfolio

Wifey recently got interested in investment for passive income too.

So one fine day she asked me to build up a dividend-paying portfolio for her with S$20,000 as the base capital.

The first thing I did was to look through my watch list for suitable stocks with dividend yield of at least 4%.

After identifying the stocks I waited for the opportune moment with comfortable price point to buy in for the long term.

After several weeks the first stock I bought is M1 at $1.86 pre-XD.

Weeks later, another opportunity arose. I bought Mapletree Logistics Trust at $1.185 when the price dipped.

Finally when the price fell yesterday, I bought Comfort Delgro at $2.18.

So as it stands wifey's portfolio now consists of the following:

M1 @ 4,000 shares (+ another 2,000 shares bought previously)
MLT @ 5,000 shares
CDG @ 3,000 shares

There are several more stocks in my watch list which will be added if the opportunity arises.