Sunday, December 27, 2015

Random thoughts: convincing my wife against selling HDB flat

Today, as my son entertained himself at the indoors playground, I had a deep conversation with my wife. We talked a lot, from wills, parents to children. 

Eventually, the conversation drift to property. She wanted a shift to a private property and leave it for our son when we go see our makers. She wanted to do it "when the market is right" (my poison)

I told her these:

1) You need to understand these because I might passed away earlier than you. 

2) Misconception of rental money is the best investment money. Many look at the 2-3K rental and believed it is a good investment since the rental can pay off the property eventually. I ask her to consider yield. How much capital is put into the property to generate that few k of rental.

3) I ask her to calculate the yield of her mother private property and our HDB unit. I ask her which is a better investment? 

4) I told her the yield Is even lower if you max out the possible credit to buy that private unit. With leverage there is interest  risk and the possibility of repossession at the worst case scenario 

5) investing in equity, if you have the heart for the volality, required only meaaured injection of capital and there is no risk of leverage (unless you are pro and doing ES or CFD or the likes) 

6) there is no going back to HDB. 

7) better to buy a reasonable studio or smaller unit to rent and sell when the market is right.

She is not very happy with my answers but I think she understands. But if I passed away, not sure if her mind will be in a better state than her heart? 

I wonder why the craze to leave a property to the children. Wouldn't it be better for the children to learn to earn their keep? Of course, if I do stay in a private property when I go see "God", I will leave it to him, but I won't planned to squeeze it out of my life to pass it down.

I used to think it is a lame excuse of adults for vanity for those who over stretch their finances for a private property. They are using their kids as a shield for their own vanity.

I had a colleague who downgraded from a semi-D to a private. He made a profit of almost a million. He told me his wife objected to the downgrade and want to leave the house to their kid. He told his wife it's better to hold cash and take profits and decide what to do later. 

Am I the odd one out? Am I the only one not thinking of leaving a property behind?

When my FIL told me DTL is free, and wanted to try it, I said it will be crowded and I don't like crowds. He asked me to send him to the station and he takes it alone. I told my wife later that it is quite "bo Liao" to ride for the seek of riding just because it is FOC and endure the crowd right? 

She told me many of her colleagues did that today too. 

I seriously think I am "odd" 

Tuesday, December 22, 2015

Random thoughts: 2015 has passed, what I hope to achieve in 2016

2015 has not been an easy year for me.

In 2016, I want to set myself several challenges, and  I hope by putting it down in words, I remembered it and and can review it  year later.

1) Have at least 15 minutes or longer Jogs at least 52 times
(Once a week, I will allow myself to cheat by jogging twice a week at the second half of the year to cover quota. LOL. Hopefully at least I keep jogging and do much better than 52)
2) Not use the lift in school
3) Cut down on breakfast at hawker centers before work. (not more than once a week)

1) To reduce anxiety (Not giving a SMART goal for obvious reasons)

1) Bring back the habit of reading to son before "to each his own reading"
2) Practice mindfulness, dun bring back baggage of  work.
3) Bring my parents for walks more often.
4) No using of phones to blog or play games during visits (bo liao right, should be talking to them more)
5) Meet with old colleagues, friends and bloggers.

1) Bring back the mental habit of "wishing everyone well" at the start of the day.
2) Practice/try mediation

1) Focus on human capital rather than finance/investible capital. Build up competencies by preparing for lessons earnestly and start doing literature review and research.
2) Read more on work related information
3) Stop comparing "money, assets, or networth"


What has passed has passed. The future is just a bubble until it becomes "current"

2016 vision statement:

Friday, December 18, 2015

Random thoughts: a letter to Santa

Dear Santa,

I am quite sure I am too old to be on your  Santa list. I am quite sure I have not been good too in 2015. But, I am still writing to you.

When I saw the bear's wish list at the Flowers Dome, I smiled. So many things in a list. 

I thought "so greedy. Yet so childlike"

When I thought  of what I wanted, I realised I am the most greedy of them all.

I want happiness, good health, resilence, etc.

But then I realise most people who wish for these usually already have such things. So, what I really wanted is the continuity of good health, happiness and such. LOL, talk about greed. Which grown-up ask for iPad or IPhone 6 LOL.
That would be contentment.

Material consumption no longer satisfied my lust, I wanted a lifestyle.

I draft this letter in the morning but it is 10p.m at night, and I still couldn't come up with an item to put in this list. Not that you will give it to me. Perhaps just a list to spite you and proof to myself Santa no longer lived. 

Tried as I might, I thought of the following:
To strike group 1 toto.
(But I don't buy Toto and that would be too scary and errie if I do strike TOTO after writing to you)

Then I thought maybe a new computer with my favorite game fallout 4 thrown in.
(But I realize I don't have the luxury of time since holiday is coming to an end and it is not the same RPG with abundance choices according to reviews I read)

I thought maybe a beautiful gold necklace for my wife. Then I realise I already co-share the costs with her and bought it for her as Christmas
Present. Cheapo right, and damn me for not practicing delayed gratification. Told u I have not been good in 2015.

Maybe a condominium for our family to lived in. So that I need not be jealous of other friends who might not earn as much as me but buying and upgrading properties nonetheless. Those who earn more than me, they already have Mutiple properties already. 
But such expensive Wish is like asking to strike toto, and most importantly,
I think I provide a home and I am a gift to my family more than the bricks and mortar can offer. (I know I very BHB, aka shameless, I dun want to repeat I have been bad for 2015)

All that I wanted, in terms of lifestyle, perhaps is that of Fiancial freedom where I could retired young and have all three elements of time, energy and money. Yes, I think that would make me happy. 

But I did not have the discipline and heart to change my mindset and bring my family on broad on this dream, so it shall remain a dream. 

Santa, you know, I meet someone whose occupation would usually be frown upon or even despised. Nope, "不偷不抢” not robbery or theft. I asked" are you not scared doing what you do?" She replied "so, am I expected to wait for money to drop from the sky?"

I have been bad, Santa, because I expect money to drop from the sky. 

Lifestyle. The most expensive gift. Some people sacrifice more than time to achieve it.

Some achieve it through grit. Some achieve it through lower expectations. Some achieve it through brilliance.

Santa, if u have not fall asleep yet, maybe you can give me one thing. Let Koei create another series of romance of three kingdoms game like that of series 11. Series 12 really sucks and they keep producing brainless dynasty warriors.

I would like that game for 2016? Can? I will try to be good for 2016. Early bird request got discount? 

What do you want? 

Wednesday, December 16, 2015

Case study of first ship lease trust

(Vested interest)

My interest was aroused when Kyith of investment moats and Nick of valuebuddies talk about this company, and specifically, the turnaround in its fortunes. So decided to do some homework and below is my findings.

First ship problems started when several of their charterers defaulted and they have heavy interest costs that dragged down bottom line

So what has changed? First, killing 2 birds with one stone by selling non-profitable bulk carriers and reducing debts. 

Also, moving away from the business model of financing by doing leaseback in the form of bareboat charters to original owners. Now, vessels are source more actively to charterers. 

Fool highlight 3 risks. So I examined the 3 risks.

First, charterers' balance sheet. None actually have a robust balance sheet if you are talking about debt related ratios.(got to do with the industry) but TORM, James Fisher reported higher profits from their Tankers segment than a year ago. Trafigura is a new charterer for FSL Hamburg and FSL Singapore from Petròleo Brasileiro S.A. Both vessels are docked in Q4, "but is necessary to ensure that the vessels can earn the significantly higher contracted charter rates." A tick in execution.

Looking at their remaining Charterers, Yang Ming has turned profitable in 2014 with positive cash flow.

Next, interest rate hike. This is a valid concern, but they have reduced their debt and their existing debts are amortized over 6-7 years. so I guess that somewhat will offset any hike in interest rate.

The third risk is the most interesting. The operating risk. Those in pool arrangement are reported during quarter reports as a group. Vessels might or might not be chartered out and the rate dependable of market charter rate. Next, those charters with TORM are of floating nature, which means L2 charter rate is also dependable on market.

Of those in pool arrangement, FSL London and FSL Santos are idle.

The spot rates for L2 Tankers in Q4 are weaker than Q3, but still higher than a year ago.

Also FSL Osaka, the newly acquired MR tanker is already deployed. Another tick in execution.

Looking at the average rate for Scoprio Tankers, the rate of $16500 per day quoted by FSL trust do indeed look conservative.

GIven than Iran Crude in coming into market, and US export ban on oil might be lifted, I believed the Macro circumstances are favourable for the tanker markets. And will crude oil at 11 year low and projected to stay low till at least late 2016, I felt the odds are in favor of a good turnaround of a ship.

Tuesday, December 15, 2015

Random thoughts: value of outsider view

In the stock markets, we value insider view. People who worked in the industry or even better, executives who worked in the companies, would have insights that others would not have access to. 

But I also enjoyed listening to "outsider thoughts" of my "industry" 

Recently, I was whinning to a group of friends about my work, what stressed me up and the nightmares I am having etc...

Because I am so used to the way of the workings of my "industry" that I forget my "customers" are not just tools for actualisation of my "sales targets"

It suddenly dawned on my how much my pendulum have shifted to the right (although they are many in my industry who are even more "right" LOL) 

Take the baggage off the shoulders. Some of the self-cheerleading, are now a "lame excuses" in the industry but if u think of it from another persepctive, it is a valid reason. It might means an "outsider view" is closer to the basic and truth than you think.

Also, it allows me to see things at a wider angle. 

I also enjoy listening to their worlds. In particularly I like "I dun sell features, I provide a service whereby the features are benefits that help you make a decision"

So I shouldn't teach facts/ skills. I should package them as a tool that help them cope with the system of assessments. LOL

Also, there are so many refreshing perspectives. For example, I for one really like to try what it is like to be self-employed, but the reverse is true too, the self-employed like to experince working for "someone". We all like to venture to unknown territory, maybe that is why humans are scavengers and hunters first, exploring new landscapes before they become agriculturalists.

Also, while we see all the aura and glory of someone, the simple wishes of that party could well be something u grasped in your palm and have little regards for. 

This downtime, the most precious part beside having more time with myself and my wife. Is meeting up with friends. I still have 2 appointments lined up! I am looking forward to them! To feel I am part a particle in the sand and not the ocean. To know that beside the earth, there is the solar system and beyond that "Star Wars" LOL

Saturday, December 12, 2015

Asian Pay TV Trust- hindsight analysis

I'm Vested interest through my wife portfolio

At one point of time, both me and I owned the counter, but I cut my stake to reduce over-exposure.

If we take 8.25 cents dividends, the yield is 12%, Mr market is not that inefficient, the odds are very high that it will not be sustained. 

2 years ago, I blog about APTT. It has 3 growth areas. Taichung as a new franchise area, organic growth through cross-selling. Cross selling suppose to add rev through more broadband and/or prenium digital TV. 

This is their projection. If u look at Q3 results, althought in terms of number of subscribers, they deliver some results, but that is offset by the lowering of ARPU. Poor pricing power=low moat

Taichung provisional license is obtained for a year already. In their last webcast presentation in 2014, they expect contribution from Taichung to only show in 2016. But in my opinon, looking at the subscribers no. In basic cable TV, I do not think 2016 will make a difference. They are basically not making any headway in Taichung at all. Unless Q4 show some significant increase, I would think Taichung venture is a bad investment.

It is a bad investment because capex For Taichung is high and paid by debts. They will be better off staying in their existing 5 franchises.

2016 will be the year when Taichung expansion will be completed and since they have achieve 100% digitalization of set up box, I expect Capex after 2016 to be lower and become more maintainence  in nature. How much is their Capex. I would think 24 mio is a conservative number since management guided 10-12% of Ebita is for maintenance type of capex. 

So if we take capex of 24 mio, interest cost of about 44-48 mio and the conservative  OCF of 120-140 mio, sustainable FCF will be 50-70 mio. And roughly 4 cents distribution plus minus ...

This estimate is even lower than the 5.5 cents distribution estimated by KGI analyst. I would think 4 cents would more likely be a worst case scenario and would happen only in 2017. If I am management, i would not so drastically cut distributions suddenly and would use debts to fill some of the gaps first and perhaps further defer expansion capex and hope Taichung picks up. 

But according to the analyst report, 

"Uncertainty on Taichung expansion
Capex for network build expansion in Taichung is guided lower at S$10m‐S$15m for 2015 (2Q15: S$20m‐S$25m). The rollout of Cable TV is stalled as Asian Pay Television Trust (APTT) is not agreeable to the pricing mechanism proposed by the content providers in the expansion region due to cost concerns. As new competitors have agreed to this, APTT’s strategy is to wait, as APTT believes these competitors are unprofitable and a resolution of this issue may happen in 2016. Meanwhile, we no longer project an increase in subscribers from Taichung."

So if Taichung cannot fail the gap, and 2016 see no resolution. 4 cents distribution is a real reality 

I think there is high probability of bad news than good since SGX issue a query of unusual trading activity ( drop of more than 5% in high volume ) on Friday and there is yet any reply.

My guess are:

A new lower guidance for dividends for 2016 is leaked and/or

Taichung expansion hit a snag and the management confirmed it. DBS research made no mention about APTT stopping the rollout due to content costs. 

Maybe I will ask my wife to set cut loss at 10%? And that will be 51 cents?? 

Thursday, December 10, 2015











Sunday, December 6, 2015

Random thoughts: Downtime on a cruise

Wanted this short getaway quite badly. I could feel myself getting a bit too tense up and I really needed a break. 

The best parting gift I had just before I board the cruise last Friday was a call from a colleague regarding work and a dressing down that I messed up their work as I had not done my deployment properly. 

I knew my little heart was really at the border of depression. I couldn't really relax and when I couldn't get any messages or whatsapp or phone call as there is no signals in international waters, I was worried. Tried as I could, I couldn't shake work off my mind and the fear that when I finally dock at port Klang today and went on data roaming my whatsapp will be flooded with work messages. It didn't. When  I told my wife that I am worried about work and she asked me to relax. I didn't go further about the possibility of a "sick" mind and heart. A lot happened at work and I dun intend this to be a whinny post.  I had hoped the expansive sea and the sound of sea waves will recharge my soul. LoL. So let's go back to the cruise 

I had wanted 3 things from
This cruise. 

1) good food
2) balcony time starring into the sea and quality reflection time 
3) family time packed with activities 

I expected a lot from 1) and little from 3) 

It turns out the food from both main dinning areas suck. I was told
By several relatives that the food is exquisite and really nice. 

I think the food is rather tasteless and the service of waitresses and waiters uneven. Some Are really good; they are attentive and brief us of the possible activities after dinner. They introduce the menu and ask for our input.

I also met downright rude waiter who snapped at us and was damn impatient with questions.

If not for the cafe at deck 5 I would give it a D grade. 

The sea was not what I expected. It was pitch dark at night and with my son beside me, I had no time to let my mind drift freely. But I like my son's company

The activities are rather rich, but the Broadway musical almost made me fall asleep. They are good, and the stage effects are solid, just not my cup of tea for my family. The swimming pools are not meant for kids. The swallow pool is 1.4 m. 

The ironic is the reflection time I had was at the casino. My wife very willingly told me I could go enjoy myself if I wanted. I sense she is genuine and is not setting a trap lol.

So I went. It was ages before I stepped into a casino. I won some initially and start making bigger bets. 

I lose more. There was a point of time when I had  less than 20 credits and I thought of just betting everything and go back to sleep.

Then I somehow got that "investor" in me talking"that's actually how newbie investor do, sell and take loss to ease the pain". I decided to stick to my tactic and play my game slowly.  I am well aware it is all a game of luck.

I manage to claw back almost all my losses and my mind keep telling me to go and cut loss now. But the inner voice also went "keep trying keep trying"

As the  night dragged on and I lost almost everything again and then hit a winning streak again. The cycles remind me of market cycles. But I never quite break even. 

So many lessons/reflections for me in a game. When I am losing. It is very easy to throw more money after bad by making bigger bets and hitting the arbitary "cut loss" to ease the pain.

The ups and downs of the game. Just like the market cycles. I made a mental note not to "show hand" at my last bet. I bet big, it was close to 2am. It was break even or lose more. But I had tough luck. Better to just retire the hands at the right "high" than hope for a bumper harvest for retirement 

I will be back in Singapore tomorrow. Yesterday has passed. I think I need to evolve to "survive ... "

I am pretty sure I will not be the same person if I do what I do for another 10 years. I will be more battle harden lol. 

Preparing for war ... 

Wednesday, November 25, 2015

Random story: The dark teacher (Part2)

Part 1 here

As the dark teacher wait for the souls to come with the possible shapes that determine their after life, he felt quite demoralized.

He remembered how his dark teacher smile at him when he solved the puzzle of "shaping the soul", how the teacher task him to enlighten the others.

He didn't realise it was so tough

"This is my shape" he was brought back from his deep thoughts.  

The dark teacher said "This shape will promise u a life of riches and relative good health, but you will be rather lonely at old age"

"I have another shape here" said the soul.

"Er... Well done, rarely can someone find such a good shape. But be warned, you will hit a low point in a career, and if u can't pick yourself up, it's downhill for u."

The soul pondered about the risk, and asked "anyway to reduce the risk?"

The dark teacher replied " well, I can help you mould the corners a bit and reduce the risk, but your afterlife parents will be of poorer health." 

The soul thought about it. "I can't do that, I will take that risk, leave my parents  health alone"

The soul got mould and went through the cycle of life and time.

The dark teacher sigh... 

So many shapes, so much effort. 

What makes the shape? 

Everyone went all over the place to search. Why not one search from within?

There is nothing to search and everything to find 

Friday, November 20, 2015

Random thoughts: Choice

Life is full Of Choices.
Making choices at every day, and if we include mental choices, we make choices almost every minute.

I look around me, and saw many people struggling with life always putting an effort to put on a smile. 

I saw their lack of confidence of themselves as a bedrock of their empathy towards others.

I thought to myself, many of these people are deprived of "choices"

I offer to drive my TA to school so that he can be in school earlier and we can prepare for the school function earlier. 

When we meet for breakfast, he was trying to withdraw some money from The ATM and couldn't. I asked him what happened, he told me the ATM only dispense $100 notes. 

How long ago when I dun even have $10 in my pockets. Now, although I am a "poor man" in the F bloggersphere, I do not really have a cash flow problem.

And how I had taken things for granted. 

We have a choice and be glad we dun have a choice.

We have a choice to enjoy every minute now as it last. 

We dun have a choice as we might all
Fall sick, lose our job or die. 

Our way of life is a choice.

There is no better choice. 

I am very unhappy at my work recently. I decide to forget my choices. I do have them. 

Transfer after 3 years. Step down after 3 years. Go private... Etc.

I told myself to forget my choices now. I ask myself to accept that it is not something I like, but I will do what I could that I otherwise would not be able to if I am not in the current position. I also told myself to accept that my best is simply not enough but nonetheless I will continue to slog on. 

My choice is to value add as my position allowed. 

No choice is a happier choice for me. 

Bad things happen. No choice. Good things happen, and we think we have a choice?

The choice is there in the mind, and the mind is as flickering as the cloud

Pic Source: duoban

Saturday, November 14, 2015

Business Analysis blind spots

This is a consolidation of "mistakes" I made.

For every business, I want it to be FCF generating, profit resilent (no loss even during AFC or GFC) with clear growth drivers or cyclical on a potential upturn, last but not least a consistent dividend payout. 

Thereafter, I would like to know its challenges and how it might be overcome. 

1) ST engineering

Growth drivers are in smaller segment of revenue contribution. I correctly think the growth will come from electronic - LSG, but it is too small to offset weakness in aerospace.

It is not a real beneficiary of strong US dollar although it has a 20% contribution in revenue from US. Although there is no specific breakdown between segment and country, my guess is the US business is mainly Marine, Land Sysetm, which are both weak currently.

Venture on the other hand, should benefit form currency weakness of ringgit and strength of US.

2) accordia golf trust

Seasonality. Q2 is a seasonal weak quarter, I believed we should not annualise the weak Q2 neither should we do so with the stronger Q1. 

Volality of weather is underestimated. Q1 has cancellation due to inclementweaker, but number is still solid, Q2 has weather problem too, but the numbers is horrible.  

The biggest blind spot is the low margin for operating numbers during "ok"
Time is recipe for disproportional weak numbers for weaker time as I believe there is no significant buffer from the minimum fixed expenses. 

As such, I am glad Lee metals exit its merchandise business, which is based on high volume and low margin 

3) Cogent holdings

Growth drivers that are driven by debts. Cogent holdings reported a good set of Q3 results. Every year, cogent need to pay close to 8 mio to repay its debt. Which is still better than reits because it's loans are ammortized. 

Ther is no details as of whether the debt interest is fixed or floating. The growth driver is the POSSIBLE development of logistic hub in jurong island. It's debt will properly balloon further and be a drag on short term earnings while it is being built 

The good thing is it's OCF is getting stronger 

Sunday, November 8, 2015

Random thoughts: Jason Zweig's concept of mind control

I have Just finished reading the book, The Little Book Of Safe Money, by Jason Zweig.

What really intrigue me is the chapter on mind control, listing a series of unconscious biases that may hamper sound decision making. I was thinking through about it and realize I make several such mistakes/ tendencies. I wonder if there are others like me.

I always feel a stock is cheap after it break a new low from recent low. for example,  when sembcorp Industries keep breaking new low, and then rebounded. That low then became an anchor and I might disregard other quantative research I might have done.

The same as ST engineering. I bought at a low of 3.24 a year ago. It then did rather well and stay above 3.4 for a considerable period of time. And when recently it went to 3.15 with pending CD of 5 cents, I jumped on it. With black Monday it went to 2.77. I made a bid at 2.65 but it was fat hope. Why is 3.15 cheap? Because I thought 3.24 is already cheap. But most importantly I think achor  effect is at play here with the new low appearing after a long hiatus

The cure? Had a rough valuation and stick to it. I thought I will get CCT AT 1.2. I didn't move when it was 1.23. I was stupid. 

The reverse of Anchor can work against one too. It raises so quickly and break a new high. It then dropped from that high. The next time it went back to that high one will be tempered to sell for no good reason except the fear of it falling again. That's how I let go of Venture when it gave me 2.5 years of dividends when all along my concept of taking profits is 3-4 years of advances of dividends. 

Lesson: stick to target buy and sell price, and reason for changing it should not be due to achor effect

I dun really have this problem because I always look at the risk and what it entails and how much I could lose than the profits. Even the calculation of dividend gains is part of risk calculation for probability of eventual capital loss. So I dun get into the trap of looking and think a glass is half full, I will think it's half empty 

Magnets in mind 
I understand this as bias of familiarity. I dun buy household brand name for the sake of it. But I do only buy Singapore shares. 

This seems countertuitive to circle of competence but actually it just mean we should keep expanding our radar.

Halo effect 
I dun usually track "star CEO" although u do have some respect for Ren YuanLin, but I generally do not think "anyone can do no wrong"

But the halo effect manifest itself in my over-confidence on GLC to deliver. While I do not want to pretend that I know the industry better than them or I can be a better CEO on hindsight, all CEOS SHOULD BE judge by results and track records. Sembmarine foray into a Brazilian yard on hindsight is a mistake at the worst possible time. Compare this with Ren YuanLin steering of YZJ. If results is the only yard stick, Temasek should employ Yuan LOL

Also, Keppel is in a similar mess, but they merge the property business unit to offset some of the weakness and they didn't build a new yard in Singapore. I not sure what Sembmarine is doing to address all the problems.

Indirectly vested in Sembmarine through sembcorp industries 

Prediction addiction
Thinking we are predict the short term movement of Market. I do not think I fall into this. Although I predict at least 2-3 years future earnings, and where are the sources of earnings.

The book asked us to write down our forecasts and track our success rate. The purpose is to show that it is futile. 

I think my prediction on earnings of companies has a 50% success rate, not too bad I think. But I could be right about the earnings of a company but still wrong about its price ... Lol 

Examples: Sembcorp industries, lee metals, venture etc etc... 

The blind spot 
We see ourselves too flattery or too kind to our mistakes. In the pure investment context, I see this everywhere. Value investors or self-proclaimed value investors poking at traders and traders poking at "long term" investors.

So to avoid this, avoid halo effect too. Show me the money. A trader who can consistently make money. Respect! A value investor who can consistently make money. Respect! A hybrid who can consistently make money. Respect!

Can I consistently make money? So Far in the last 2 years, think I am still happy with my performance but dun ask me my returns because I dun track it. 

But I am quite sure I never peddle "my way" since I know my limits. Lol

So... What's your bias?

Friday, November 6, 2015

LMIR Q3 results

It is important to look at results at QoQ angle rather than YoY angle. This is because Kemang is bought in Q4 2014.

Operating numbers wise, it is a job well done. The good numbers is somewhat offset by the weakening IDR

It's have a been 3 quarters since Kemang. It has proven to be a good buy, but since Alvin took over there is no more break down of occupancy by malls. So when overall occupancy falls from 2Q, it is hard to pinpoint is it due to the wretched Pulit Village and if Kemang occupancy is further improving.

But I expect interest cost to stay status quo or go down given Lippo is now rated, and the last loan was of the lowest interest rate.

So, LMIR should actually command better valuation, beside the stink reputation of doing a right when price start to recover.

So, am I adding? Nope. Although I did consider when it is nearer 30 cents 

Ng and Ng portolio update

Never mentioned my wife maiden surname is also Ng. LOL

It has been more than 3 months since I last update my portfolio. During this window, black Monday occurs and with the Fed poised to raise rate in December due to strong employment numbers. Expext volality. I will just include the companies we had, no spreadsheet, in order of capital vested, if I remembered correctly. (^ Means owned by both accounts, * means by my wife account)

^Sembcorp Industries


^ST engineering






Ascendas Reit



Accordia Golf Trust

^Gold ETF

^Singapore Shipping Corp

*Ascendas Hospitality


Since my last update:

I have sold Nothing but accumulate Sembcorp Industries, ST engineering, bought back ascendas REIT, CMPH and newly added Gold ETF, accordia Trust and cogent

She has bought back SSC and added OCBC and MIT

Excluding my wife, I am effectively 90% equity. I can't take advantage of downturn if it comes now and fast and furious.

But I am still sleeping well

Thursday, November 5, 2015





Saturday, October 31, 2015

Company Prospecting: Cogent

Cogent is a logistic company. I will not describe its operations, but you can read it here

I was first attracted to it due to its high dividend yield which includes a 1-off special dividend due to its disposal of asset.

My first attempt at analyzing the company didn't really excite me, although company is generating FCF most of the time, its short track records as a listed company see a U-shape yoyo in terms of revenue and profits. "Highly cyclical" I thought. Also, debt is not low.

When I read further, I got really interested.

There are 2 catalysts which I like.

1) The LOI for further expansion in Jurong Island. The deal if materialize will increase gross floor area for operation by almost one-third

2) The Contribution from one-stop logistic hub containers operation. (Details here)

But truth be told, what really wow me is really the qualitative story rather than hard numbers.

First, one logistic hub has a patented design, which I thought really value-add to customers in terms of both costs and time.

There is no need to move the empty container to a warehouse somewhere else, it can be stored.

There is also synergy in the 4 business. I investigate what cause the dip in earnings in 2010 and the main factor was increase in rental. Cogent like other players, rent warehouses from JTC and provide the services and earn from the services.

With the new logistic hub, it has "retired" 2 warehouses and might not renew a third in 2016. 

Another reason why I like it is Grandstand. I felt it has turn around a ghost town rather impressively, although I am sure the reason why it got involved is for the Used Car bus Businesses there, which should be providing some business for its automobile segment of business.

It has also start expansion to Malaysia Port Klang although I would rather not count on it. Malaysia is the only overseas operation contributing less than 10% of revenue. I actually prefer local operations which I felt is less volatile in terms of regulations.

Other things I like, the family owned about 80% of the business but liquidity is not too bad. Remuneration is clean and without options. The Family owned 70% of the business when it just IPOed. and there were frequent buying back of shares. Qualitatively, it seemed like a serious family (Son made CEO and Dad Chairman) with a succession plan. It was the son's concept for 1-stop logistic hub.

Since the logistic hub is the main draw, I calculate for the remaining lease of about 25 years, it need to generate 5.5 mio of NP for the next 25 years to get its cost back. Looking at the Q1 and Q2 results as compared to past year, assume results is generally the same for all segments and the steady improvement of 6 mio for both quarters from a year ago is due to contribution from this hub. Return of asset is about 10%. Nothing to shout about if u ask me. 

As for risks, there is plenty of warehouse supply coming in from
Now till 2016. Reading the prospectus, the concentration of a few major shipping customers for their business is a very real risk too. Both might affect earnings 

Now the numbers:

Cogent's Warehouse business numbers is "contaminated" by property development of Grandstand, it makes it Gross Margin of about 30% look super high when compared to peers like Vibrant, PTC and CWT. Margin for transportation services is 10%, comparable to the bread and butter of PTC.

ROE is 15-20%, good enough for me.  

2Q NP is already 11 mio, according to prospectus, containers and warehousing segment usually enjoy higher business activity in Q4. But just annualized the results it will be a improvement from last year 3 running record year of profits (17 mio excluding disposal profit of 7 mio)

At 22 mio, its EPS is close to 5 cents, which gave it a PE of 6-7. Not too bad

Final dividend is 2.58 cents last year. Which gave 7.3% yield. Special dividend will not be repeated.

Assume 2 cents dividend instead, they will need to pay about 9 mio which thought it will be rather sustainable.

What do you think? Being a long time since I had this luxury of time to do prospecting, and I am enjoying it.

(No vested, yet)


Friday, October 30, 2015

Random thoughts: Q3 sembcorp industries

Q3 results is bad, but it was expected.

I expected it to get worse going forward. 

Sembmarine will be the biggest drag, the delays just started. Utility biggest drag comes from Singapore and was NOT offset by overseas operations YET. India, ASEAN and Australia market bottom line is improving QoQ but nowhere contributing at level where I expects. I send an enquiry to IR asking about the gestation period of India operations before it contribute to bottom line. There is no reply yet, if they do reply, I will update this post. 

As a random thought series, I am not going into the nitty gritty of the numbers or projects. 

It's my reflections. Some of it based on hindsights.

1) I expect weak numbers from
Marine and Singapore Utility market but expect overseas market to offset some of it. Because I believed Mr market might have been over pessimistic, I bought into it, thinking I got it at a low. 

2) I saw the ability to clinch contracts from Municipal governments as a plus point. 

3) I believed that are catalysts such as injection into reit or selling of mature asset

Am I totally off the mark in my assessments? Not actually, 2015 will be ok given its earlier wise allocation of capital.

Will marine winter lasts longer than 2016? I have no idea. Sembcorp will be in trouble if the marine problems drag beyond 2016. 

4) Vietnam land sales is slower than I expected given how "hot" the media is blowing in its direction.

I am not adding. Am I selling? Most probably also not. I remembered Sembcorp was trading at $3 during its recent low, and I slept well, not thinking of adding or offloading.

My strategy was to collect during down cycle and enjoy the upcycle. But if the down cycle is super far from what I believed it was, think this strategy will fall apart. But it do not think it is going the way of dodo and neither do I think they are suspending dividends ... So I will need to endure in the meantime.

How about people who have not got in?
Well, well... I have no idea myself LOL

Tuesday, October 27, 2015

Oxley Bonds

One thing that screams at me is the high debt ratio.

Debt is at about 2.4 billion.

Equity is only 650 mio. 

Scary debt to equity ratio if u ask me. 

The cash is 290 mio but current financial liability is 520 mio. Of course, current ratio is rather healthy at 2.5. But personally I  like to think of cash and perhaps receivables as more "current" as compare to development properties.

I took a look at their projects 

And used square foot research to check on sales. I prefer this portal than URA. If u want details let purchase price etc, u need to pay a subscription or do it manually at URA site. But for me, I just wanted to ascertain if they have many unsold units because that would mean even more troubles.

Surprising, their local residential projects are quite well sold. I did not look at their industrial project, but u can do the same at square foot research. Go for tower view, it is easier to get a sense of how how sales are

So, all in all. 

If execution goes well, and no buyers back out, then cash flow should sustain itself and this bond is safe. 

I am not buying bonds as my CPF is like my bonds allocation. 

Another way of calculation margin of safety for bonds is to used Graham method which is demonstrated by "The boring investor"


Do note that bonds are not necessarily safer than equity, it is relative less volatile but volality cannot be view as risk when solvency is ignored 

Friday, October 23, 2015

Random Brag:How About 30% annual Yield for a reit?

For those who click on this post for the first time because of the heading title, you will be disappointed if you are looking for a Gem or detailed analysis. It is just a simple bragging exercise, and most importantly, I am really curious if sensational headings really do increase click counts (I am not hard up for ad rev, but really curious looking at some headings from some bloggers at aggregated site)

The Reit I am talking about here is A-reit.

The annual yield include the trading gains of buying and selling and buying back again plus 1 year of dividends received.

OK, before my "regular readers" get really pissed off. A lesson learnt is really buy for sustainability of yield and not just yield.

I bought Sabana at yield of perceived  9% and was elated when they announced their Chai Chee acquisition! Wow! With growth driver through acquisition available, I am looking at 10% yield even if positive rental revision is not achieved and 1 or 2 tenancy become multi-tenanted and occupation rate slightly increase. It seems like a stock way undervalued with plenty of MOS.

In the end, you know how the story goes, the placement to fund the acquisition is at a rather  hefty discount and Chai Chee is 50% occupied only (Faint!), and they only managed to renew one master lease (The smallest building).

After this saga, I look at track records, and bought into Acendas Reit, one year ago at September, It was trading at a yield of 6.5% only but I bite because I like the prudence in capital management and its predictable track records of placements (at reasonable discount) to fund acquisition and all of it are yield accretive except for 2009.

When I saw the most recent reports of Ascendas and Sabana again, it further reinforced 2 points. Buy track records than perceived good yield. You are paying your own dividend when capital loss happen when market re-rated the counter for it reduced distribution. That Sabana has so many master leases up for renewal and none with a deal yet, the probability for reduced distribution is very high. If a building is close to full occupancy, there is little reason for a master tenant not to renew its lease so close to the expiry unless it has no plans to do so. A valid counter-argument could be Sabana is bargaining very hard for a higher positive renewal rate. But if you look at management quality, pace of occupancy being filled and most importantly track records, you can easily come to a conclusion if the odds are tilt to your favor.

Now, I was having second thoughts on Ascendas due to its large size, and acquisition of  1-2 buildings will hardly make a dent to its distribution. But as luck have it, the recent market volatility allowed me to collect it again, and I am glad I did, since thereafter it made a big buy at Australia. Management has guided that it will be yield accretive and I decide to trust track records. Although there are views in forum that it is the sellers that get a better deal, I am not concerned as long as distribution improve. From what I read about the acquisition, with its blue chip tenants, and locked in positive rental renewal, chances of a nasty surprise is not high in my humble opinon (Barring unfavorable currency movement ), Best of all, they did not use placement to fund this acquisition anymore, and the odds for yield accretive purchase after cost of acquisitions quarter (1-off) is rather high.

The biggest renewal rate came form business park, and the edge newspaper reported that JTC mentioned the fall in occupancy rate is greater in business park today. What good timing if you asked me, but I believed it also mean going forward we can expect little or no more such pleasant surprises. 

Also, least we get carried away by the strength of improvement of distribution, take note that:

"Included in the total amount available for distribution and DPU was a one-off distribution of taxable income from operations of S$6.5 million (DPU impact of 0.271 cents) for 1H FY15/16 in relation to a rollover adjustment from prior years arising from a ruling by IRAS on the non-deductibility of certain upfront fees for certain credit facilities incurred in FY09/10. The table below illustrates the impact of the rollover adjustment on both the amount available for distribution and DPU"

That is also one -off, and if you take that off, operating results is reasonable good but nothing to shout about.

Another quality industrial reit will be Mapletree Industrial Reit with its growth from BTS and funding of acquisition thus far through cash saved from dividends reinvestment by SH. Capital commerical trust has several things going for it too, but I might not want overexposure to reits and trusts

Only problem is the high valuation above NAV will put a cap on its capital gain prospects.

OK. you can throw your eggs now ...

Thursday, October 22, 2015

Random thoughts: what is the theme of your reframing

We reframe to see things from a different angle. The advantages of it are numerous, I might not see something as a "problem" as compared to someone else. 

I have been going through this process numerous times, until I realize there generally 3 themes behind all reframing exercises.

1) compare to others who are worse

2) looking into the future 

3) philosophy, or religion learning

However, reframing need something in order to work, whatever theme u use.

Denial or acceptance.

I realize I have been in denial that I hate my current work. I wake up and it became a drag to go to work EVERY morning. 

It is only after comparing myself during the PSLE marking week where i simply move on to "work" and today that I realize it.

It is confusing because I love teaching and how could it be that I hate my work at the same time. That's why the denial stage went on for so long 

It is true. The tell-tale signs are there all along, I am not accepting it, therefore the reframing is just an act of denial. 

Can I do something about it? Of course! Reframing part 2! But I am not ready to.

I think accepting it will allow theme 3 of reframing to work better. 

So, is there a better way to "trick" the mind? LOL. 

Again, I went through the lesson of "what I wanted" with my Graduating class since  they are very free now. Strange no one says they wanted riches. Maybe they want to be politically correct or they have "awaken". In fact, most of them have the same mentality of buy one get one/ more free like adults ( u and me)

"If I have luck, I will have everything, also money etc." the only girl that chose health is the one that had a hole in the heart, but again her answer is like "I have health, then I can do whatever I like and get wisdom" still buy one get one free

I shared with them the serenity prayer and told them I used to want wisdom, but wanted courage to change things now. I told them what we wanted changes with time. 

How fast I change my mind. Now I wanted serenity to accept ... LOL

Wednesday, October 21, 2015

Random thoughts: what does "done my best" means?

I think we heard the sentence "I have done my best" rather frequently.

What does "best" entails?

Perhaps the opposite of doing best for something is doing something "effortlessly", and most of the time, the domain is in "efforts" not "results"

So, it is not actually a good thing to hear this sentence. It is used either as a explanation or excuse, the difference behind them is The validity of the reason.

So what is best effort?

Usually it means discomfort or even pain has already set in in the pursuit, or something is already sacrificed in that pursuit and a significant tradeoff has taken place.

However, everyone has a different threshold of pain and that boundary can be pushed. So best can be "more best" if one is willing to sacrifice more and endure more "pain"

The problem is it is not easily sustainable but without doing "best" we don't push our boundary and threshold.

And every "best" shot is like a marker, makes us pause and think: should I go on like this, and is the trade-off worth it.

We all have a choice. The choice might not be available to us immediately or in the short term.

But if i think about it, there is no such thing as we have done our best, u less we are talking about the immediate present. 

Have u done your best for the day? I think I did. Have I done my best as a son, or father? I will only know years later. 

Friday, October 16, 2015

Random thoughts: too iron-teeth in my work?

There is plenty of well-intended advices at my work. Being new to my role, many told me I need to be firm and is "too nice". My boss told me I didn't communicate enough.

The weird thing is: 

1) when I am reflecting how I can do my job better, there were many things which I thought I could have do better, but no one said anything about those,except one. He is a officer from my department.

2) those which are my core values, I do not think i will shift anytime, many have a opinion. LOL

The first thing which I find irksome is "calculative". I do not believe in taking someone for a ride, but I do think we can never be "fair" in workload. 

Having to manage that part is rather "bo Liao" and I felt my limited energy can be better served somewhere.

I made some arrangements on my own so that my staff who got less "rest time" will be "compensated" before they start their work in the afternoon. 

I was called in to my bosses "Twice" to explain why I make those arrangements and that I am making things difficult for my fellow colleague who did not make those arrangements. I explained and I said I understand where they are coming from, but seek their understanding in my decision. Inside me, I am screaming " BULLSHIT, that U did not care enough for your people is your bloody business because they are not under my charge, instead of asking me to lower my standards u should bloody reflect yourself"

I realised many, including, myself, seriously need to go to the lake and see their reflections, and if they are ugly, should put their head into the water and cool Themselves off. 

I am guided by this simple principle, I am not dogmatic in my approach as long as I can get past on this simple value.

I am
Most importantly a human, I tried to be kind whatever I could as long as my kindness do not lead to
Negative consequences. And no, that my way of doing makes people compare unrealistically is your bloody problem

Next, I am a teacher, then a HOD. As long as the heart is with teaching and pupils, I can forgive all. And I hope my staff forgive my lack of adminstration competency too. 

Seriously, I am rather iron-teeth when those two principles are concerned. I wondered aloud if one day I am thrusted to the private world, will I survive?

Let's justs allow me to indulge and live with those 2 values I hold dear, and if I cannot survive here, then let me trade those useless values for the next pay cheque.

Don't tried to persuade me now. I find it full of shit when u claim u are trying to teach me when I felt u are hardly really more competent. 

Monday, October 12, 2015

Random thoughts: a old movie snippet moved me to tears

48min to 53 min
2 years ago, I saw the snippets as part of the MTV by 王杰,couldn't controlled my tears...
Today, again just randomly listening to the songs and saw that snippet again, feeling emotional, but this time round, there is the ending to go with it, and I burst out in tears again....
No movie moved me to tears for a decade if I remembered...

For those who might have forgotten how it feels to cry...

Sunday, October 11, 2015

Random teaching reflection: Differentiated Instructions

There is this inherent struggle in the pass when I think about differentiated instructions (DI) for kids.

At the end of the day, every pupils sit for the same exam, so how can we "short-changed" our pupils by giving them different materials (differentiation in products)

The reflection was the a base-line need to be established first, and then we allow pupils to learn "more" at their own pace.

Now, after teaching a different profile of pupils for a year, I realised I cannot wait for the "base-line" to be established.

I taught in a boys school, and now in a co-Ed school. Girls, who matured earlier, are generally more focused and hardworking. After 1 year of "drilling", most of them could memorized the "good lines" and is already learning the way to apply them and combine them for writing of a ending etc. some of the pupils have problem remembering how to write the words even at the eve of PSLE.i went through with the weaker pupils one by one, identifying the words they had problem "spelling" and make up stories for them  to remember. 

I wonder the reason I didn't do that earlier was because I knew the girls who already learn the words will be "bored to death" for this lesson. 

I could have ask the girls to complete some tasks while I guide these weaker pupils one by one. 

Differentiation by process, now no longer is a textbook concept but a need in the classroom. 

Pitching it at the middle no longer work when the class has a wide diverse pupils of different abilities. 

We have been looking at differentiation at product since it has been the easier way to go about it. Different worksheets and notes for different pupils. 

The difference should not be just about having "more" or "less" or having a "simplified" version. 

We should allow the Higher progressing pupils to analyze and create and not frame their mind to just write a "good" essay.


Back to writing, I wonder why do we write?

The easy answer would Defintely to be able to communicate and interact with others.

Is it just words and grammar that is needed to "interact"

Blogging makes me understand there is Defintely more than that.

Interaction required a "voice" as much as the form. I have been teaching the "form" because the "voice" is not in the syllabus.

It is the "voice" that calm yourself when u are writing a diary, it is the "voice" that allow your readers to "relate" to u.