Saturday, August 1, 2020

Random thoughts: Keppel - Don't be surprised to see price increase come Monday

Keppel has not met the pre-conditions for Temasek offer. 

Temasek can now walk away from the offer and offer a lower bid, or forget the whole exercise as a waste of time and wait for Keppel price to tumble even more, before making another offer. 

Yet, I believe Market might just do the reverse, and the reasons for this are as follow:

1) Keppel underlying profits are surprising resilent excluding the one-off impairments

2) The worst in terms of supply side shock is over. Remember, come 7 August, it is believed that workers can start returning to the yards, and Keppel has enough orders to keep the yards busy. Keppel has 24K workers, and currently only 5 K is working

3) While I believe Covid 19 is going to get worse, I believed there will not be a second lock-down. There will be some tightening of safe-distancing measures or crowd control measures, but unlikely we will see a schronised lockdown again.


If you have been looking at the charts for various countries since the begining of Covid, it is as predictable as ABC. When infections rate is making new high daily, the spike will come sooner or later, this is the case for Spain, USA and Russia etc. Globally, the figures are showing the same trend

Then why no more lock downs? First of all, the damage to economy is hugh. Countries tried lockdowns to get a hold of the virus, hoping to contain it. While it did slow it down, second or third resurgence is seen in many countries, if lock-down just buy you a bit of time, without solving any problem, and  you already have a hugh problem economically, I do not see why anyone would consider a second lockdown. 

Also, I have a conspiracy theory about lock-down. When the lock downs happen, one of the reasons is the world is in dire lack of masks, PPE etc, the lockdowns send almost everyone home as the governments firm up stratgies and address the supply shocks. Now that the world has already went through that phase, I doubt they will go into total lockdowns unless it becomes a last resort. 

4) Demand side shocks should get better. Why do I say this? Everyone is talking about the challenge of a vaccine, and how to get it to the rest of the world, and many were talking about having it this year or perhaps having it next year. All these talk IMHO is management of electoral expectations. Does it really matters to the economy whether you get a vaccine in December or 6-12 months later? There is no agrument about a vaccine anymore, but how quickly and effective it can be circulated among people. 

5) Temasek might not walk away. While Temasek is a commercially run company, I do think there will be plenty of repercussions if they walk away from the deal and return like a vulture for a even cheaper deal, for a local company that employs plenty of locals. If they walk away, they are unlikely to come back. 

Why 51%, with 51% Temasek call the shots, and can restructure the company to unlock values so that the offer price makes sense for them. I am not sure if the restructuring exercise is NTA sensitive, it is more likely future earning accretive or like the Sembcorp Demerger, allow SCM to survive longer in the future. 


6) At $5.4, Keppel is at a price where Temasek first made the offer, when COVID trashed the price to $4.8, and rumors about the deal being off, Temasek stated the offer still stands. I do not think Temasek wants to get a better deal, but rather wants the deal to be done well. Also, Keppel is not in dire state to need Temasek's injection of funds. Temasek would go for the subscription of rights route if that was the case, it is a coporate action to let Temasek restructured the companies for better days.  

Anyway, I like to make speculations, I am more often wrong than right, but it is still fun. I am a retail investor and I am silly, so please take what I say with a bag of salt. If my predictions are wrong, I will punish myself by buying Keppel Corp.

Friday, July 31, 2020

Random thoughts: Open draft 1 of DI journey to myself

Warning: This post is for my own crystillzation of thoughts. 

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When I first start to implement D.I. (Differentiated Instructions) in my department, I only manage to plant the idea, but nothing was achieved, except willingness to look at every pupil at an individual for most of my colleagues. 

I now proposed to do this.

Using Carol Tomlinson D.I as the background theory behind the approach, and connecting Dylan William FA strategies as possible enabler. 

A lot of schools are overly concerned with the how to, which is what the teachers "can do" to differentiate, as that is something actionable and can be easily seen, yet, that is at best showmanship, and at worst, derimental to a class learning, without looking at "according to" of the individual. Readiness is also the main bulk domain to consider, since as a teacher in Singapore, I care mainly about their results, yet, without taking into consideration the pupils' learner profile, we could be barking up the wrong tree for the intervention we wish to implement. 


How do we guage a learner readiness, at the key words here is specific learning goals. So it here where Dylan William  FA comes in. Again, here I caution against using piecemeal FA tool for "report writing" or showmanship. FA is a whole process for learning, and not a tool at any particular stage of learning. It needs not be restricted to a 2-3 periods lesson but be look at through the lense of mastery of a learning outcomes, breakdown and monitored by success criteria. 
 

There is no point knowing where to go, if we don't know where the learner is, and finally, if we do not know how to get there, it is useless.

At certain point of time, there is less emphasis on where to go, or where the learner is, imagine you are taking an major exam in a week or months time, and I would say the teacher would have failed terribly if the pupils do not know where to go, and where they are, they should be slogging at how to get there. It is contextualised and if we silo out thinking, it can be detrimental to learning.

So, for the actionable part of the journey. 

Where the pupil is, how do we systemically work on this.
1) ASW (Analysis of pupils' work) - To cater to readiness of pupils
2) Supplement by interview of pupils - To cater to profile of pupils (Only if ASW doesn't lead to an improvement)

By looking at the mistakes made by pupils, we can understand what are the learning gaps and propose ways to close them. Again, if we look at the Carol's framework, and a common propose solutions by teachers is "scaldfolding" and this is captured by "content differentitation". However, giving pupils peices of work with more help is actually a stop-gap measure, which need to be weds off  sooner or later, and having weaker pupils ALWAYS  doing easier pieces of work without intention of progress is discrimination not differentiation. 

So let me proposed how we can work around the various 4 DI approach. 

After ASW, there could be review of worksheets and learning materials to cater to pupils' readiness, this I believe is already done, although we seem to be looking at broad stroke of marks instead of individual pieces of work when we review our content, and the nuance improvement can be achieved in ASW of work and not just summative assessments when reviewing content. 

My example:
My Pull Out class has their customized oral and writing materials that is closely aligned to the chapter taught. This is to ensure repeition of vocabulary seen, increase opportunities to use these words during reading comprehension, oral speaking and writing. 

Reading passages are summarised and written in simple sentence structures, and not the same as the passages found in the textbook. 

My difficulties:
There are pupils who progress through these scaldfolding and pupils who do not. On highsight, I could have used the ICT purple culture website for pupils to access the HYPY and annotation earlier, so that for pupils who have difficulties in simlified version of it, can still learn. 

Although there are different tier scalffolding in the content, the pupils need to actively access the resouces and move up the tiers of support, and this is where, I find some pupils always struck at the same unrecognised words. They might have access the resources, and read and pronounciate it correctly, but still gotten it wrong when the scaldfold is removed. When these words get my individual's explanation and prompting, they still got it wrong on the third day of practice, as they could not remember it.

I believe the problem is activating learners as owners of their own learning, so that they will monitor they own mistakes and weakness. However, as motivation of the weaker pupils are low, having them do their work consistently and seriously is already a challenge, I am not sure if they are willing to monitor their own portfolio.  

Also, even for pupils who have successful learnt various words through using it, it is not a quick process, and the number of words that can be constantly repeated is constrained by the theme, hence, the impact of results is low, since the decoding competency will still be quite low. 


D.I Processes can be meet with Dylan 3 strategies of  “How to get there"
1) Feedback (Giving individual feedback to move learning forward)
2) Activate pupils as instructional Resouces, having pupils refer to exemplar work and also others' work, to improve their work
3) Activating learners as their owners of their own learning (Self-check, error-detection, refinment of work, corrections etc)

My example and difficulties:
Right now, when a pupil could not meet expectations of a learning outcome, be it graphic stimulus, or oral recording, the teaching goes "offline" whereby I will coach them individually or in smaller groups. I have tried posting better pupils' work online, for pupils to refer to their answers, but this seem like "copying" instead of learning. 

Feedback have been given to pupils, where step by step thinking process, and clearly delineated for easy teaching, and easy customization of advice to adress the particular gap. There is a routine to follow in answering Graphic stimulus interactive writing, after I realised that the question is the problem, not the graphic stimulus. The realisation happens through ASW process of 3 pupils after I seem to spot the similarity of problem for the 3 pupils who did not meet learning outcomes' expectations.

As for interview of pupils, I start to realise in Oral Conversation, and complete the conversation exercises, pupils who answer in English in their mind and then articulate their views in chinese have very horrible sentence structure. To correct the sentence structures, I need to mould their thoughts in word-phrase-sentence process during writing. Yet, oral conversation is a quick and less passive process than writing, hence, I ask pupils to visualise their answers for recount questions in Oral into a picture, and imagine that they are writing a composition. For pupils who are more of visual learners, such a step not only helped them articulate their thoughts more expressively, it also improve the content, and they seem able to elaborate on their answers better. The guess and check method for completing the conversation also worked better for some pupils whereas the translation method work for some others. 

For example, the following pupils have different profiles. 
Linh, Hee Jen - She is visual, when ask to recount an experince through a picture, she can do it well
Chelsa, En Qi - Need examples to repeat, tapping mainly on memory. 
The rest, Justin, Urshea, ZhouJing - Need to be reminded of the various Frames
Cara and Hui En - Seem able to transfer context among writing, oral, reading passages etc best
Nikki - Seems most imaginative, can connect characters with her own stories, should perhaps work on this in her writing.


I tried using music and song to help pupils remember key points before, but it is highly embrassing. But perhaps I should try again once of these days. 

Peer annotation and checks, peer check and feedback always seem to take too long and unproductive


I will stop here. Will continue next week... 

Thursday, July 30, 2020

Random thoughts: Happiness Inflation

Why do we invest? The most common reason I hear is to keep the scrounge of inflation at bay. Personally, I invest because I find the whole process cognitively and emotionally stimulating. Inflation is relative mild in Singapore, we could lose more in investment than inflation, so I didn't really bother about Inflation.

How much money does it cost to buy u happiness then? How long does it lasts? What quality of happiness does it give.

I personally again, feel that as I man whore, I feel money does buy some happiness for me. I quite enjoy having a good meal at a restaurant before Covid. I really appreciate the convenience of a car. 

For people who felt that money can't buy any happiness at all, my contact is at the right corner of the blog, I can help u spend some. 

But, I think we do have to keep our emotional state healthy, just like keeping the economy healthy. There should not be hyperinflation of happiness. 

A good tasting fishball noodles still buy some happiness. Having made a right call at stock and making some money still give me the kick. 

I would say inflation is rather manageable, but compared to being a student, happiness is costing much more now.

I dun need a basketball, someone else in the community center will have it, just go there and play. There is some "law" to follow, but there is no need for sports shoes or a ball. 

I do envy my friend who has the latest game console, but that is more than offset by the joy of playing romance of the three kingdoms at his house. I envy my friend, but never really thought of getting a console myself.

When I earn my allowance during NS and bought my first PlayStation, hell ya, money bought my happiness for months. Enjoying every moment of final fantasy 7, and the best part, my girlfriend and now wife don't mind watching me play game and say the storyline is nice. (Don't think she is lying then hahaha) 

During Uni days, having work part time, I can afford to assembly my own personal PC and play my romance of 3 kingdoms late into the night in the hostel without any nagging. Happiness is bought, and it is really rather worthwhile because it lasted months or even year. 

When I envy others as I grow older, I wanted the same thing. I wanted high pay, big portfolio. Inflation is high. Overseas trip is damn expensive but it is only as good as it lasts. Happiness undergoes runaway inflation. Expectations are high, and sadly due to my incompetence, reality has a gap. They say happiness = reality minus expectations. My late twenties to thirties are the years where the gap is largest 

As I approach my 40s, I allowed my happines to be bought, but I am mindful to control my inflation. I am not as frugal, and I don't thrashed myself after a spending spree. 

I spend quite freely, i like to buy food for my pupils. My colleagues said it's bribery. Well, I am just happy to see them happy, they all leave me and forget me after a year, I dun know what returns I get from them, except happiness in seeing their excited eyes. So nope, it's not bribery, and I will continue to buy "happiness".

Every year, I will spend hundreds on dictionaries for the pupils who have difficulty getting them. I never told anyone as I hear that is a "wrong" thing to do, as there are funds to tap. Nevermind, I buy "convenience" and I don't like to fill forms and ask for other particulars. I was rather upset 2 years ago, when my pupil just smashed it after a few weeks though..

I hope I can continue to afford to buy happiness. How much is your happiness. If it is not expensive, maybe one of these days, I can treat u to your happiness. 


Thursday, July 23, 2020

Random thoughts: An open letter to my friend

I have 2 friends who have started investing, and we have had several chats. I thought I give my coherence thoughts here, what I think are important steps to take.

1) Read, read and read

Understand investment methods, understand business model. Yes, as a retailer, we can never be as good as an insider, but if you are not interested in understanding the business model, maybe the technical analysis route is better for you. Even then, there are plenty to read about TA (Technicial Analysis)

I do fundemental analysis, so I recommend the following reads.


  • Best classic - The intelligent investor  by Benjamin Graham (Read Chapter 8 and 20 again and again)
  • Best classification of companies -  One up in Wall Street by Peterlynch
  • Best research checklist - Common stocks, uncommon profits by Philip Fisher
  • Best industry analysis - The Five Rules for Successful Stock Investing by Pat Dorsy
  • Best execution ideas - The art of execution by Lee Freeman
  • Best Earning modeling analysis - Common stock, Common Sense by  Edgar Wachenheim III
These are the chronic order of my reads, but I would think the Intelligent Investor is perhaps quite complicated, and can be left for later. 

Start hanging around Valuebuddies Forum, although a few veterans have been rather inactive there, it is still one of the best FA forum around. 

Download Bloomberg and Reuters and start getting interested in the business news. There is never a day i spend without reading them. It might also be a good idea to subscribe to "the edge"


2) Start investing

It is never the same, before you start investing. When you skins in the games, you are more motivated to read, more motivated to find out more, and you can find out more about your own disposition and emotions when price goes up and down, and you can apply theories.

Market is off the high, so it is not as risky as compared when STI is hovering at 3200. But I suggest less than 10% of your money, and start only with one or two counter that you are most interested in. See how different it is before your click "buy" and after you do it. 

All the assumptions you had can now be tested.  

3) Find the right company

Here, I mean the right friends and cousels to bounce off ideas. Not workshops that you need to pay to attend. 

Finding the right company, you need to understand them, start downloading their quarterly reports, and annual reports, the annocements. Make judegement, connect dots. Read the notes of Annual reports, yes, it is painful, but after a while, you know what to look for, and it becomes faster and shorter.


EMS business - Valuetronics and Frencken (Short post)

A short consolidation of my thoughts.

One of the Post Covid-19 theme that I had in my mind is China-Plus. The redirecting of supply chains to diversify away from China. Valuetronics come to mind, after Rolf mentioned it in his blog. I decided to look deeper and these are more thoughts. (I no longer do excel or charts, you can read those by downloading the AR)

1) Impressive balance sheet and is in net cash position

2) Vietnam diversification is progressing fine, if you read their reports, it went from one customer request, to expansion by leasing a nearby site to meet demands, to having mutiple customers transferring their operations from China to Vietnam. 

However, when I compared this with Frencken, which has more "global" supply chains, it is obvious that Frencken has more "foresight" or "dumb luck". Frencken earnings are hardly affected as the semiconductor and medical segments are able to expand to offset other weaknesses. 

Valuetronics has better margins than Frencken, but what is worrying is Valuetronics has already lost some US customers (i.e. automobile sector) who has bring their supply chain back to US, and a smart lighting customer. Hence it is difficult to project earning recovery post Covid. 

The Vietnam venture seem more like saving existing customers' contracts than a value-adding proposition that might open up new markets. Valuetronics also has its bulk of its exports going to US as compared to Frencken's. 

With Covid-19, there are plenty of talk about resilence of supply chains as compared to just effeciency of supply chains, especially essential goods. My understanding is medical products/ equipements as well as agriculural food supplies. If I read correctly, Venture and Frencken has customers in the lifescience and medical sector but Valuetronics has none.

If you look at the shares price of the 2 companies, market has given thumbs up to frencken but lukewarm reactions to Valuetronics. For someone who invest in turnaround stories or cyclical plays, and I more interested in Valuetronics and would like to see how market might has misread it's prospects. However I could not find anything yet. 

Saturday, July 11, 2020

Interview of SillyInc CEO by Bi Sai Times

SillyInc is a small boutique investment two man show company. Recently the company has stepped out of Singapore markets and has been actively putting its cash to use. We are pleased to interview the CEO of SillyInc, Sillyinvestor in this maiden Issue of Bi Sai Times

First of all, to see the amount of actions taken, at the end of 2019, "Vested amount is 66K in cash account, SRS 9.3K and CPF 5.7K", but in 1H 2020, Vested amount in cash account is 117K, SRS 11.8 k  and CPF 20.4 K. There is a maiden venture into HK Ex of 5K


Q: Why the venture to Hong Kong Exchange, and why not US? 


A: We did look at US ETFs, but the reason why we went to HK at around Feb is because we find Strong free cash flow generating companies giving yield in excess of 7%, and after studying the companies, we find that there are certain growth drivers that might improve earnings, and the odds of big fall in earnings is very unlikely, and hence the safety of the yield. That assessment was in Feb, when Covid 19 has not infected the world. 


Q:I could see that your overall portfolio is still in the red (refer to appendix), for all your accounts, although the SIngapore Cash Equity seems to be relatively doing better than others. Given the V-shape recovery that has taken place, do you have anything to say about the poor performance of your investments


A: As the name of the company implied,we did make some silly mistakes. We start accumulating equity in late Febuary when the market start correcting and when the market has tanked more than 30% from the peak, we slowed down our purchases when the opposite should have happen. We should have accumulate a little less agressively when the correction started and continue to buy when the market tanks.


However, if we include dividends and trading gains, our total portfolio loss of 4% will be halved to 2%, given that STI is still about 20% off its peak, I think our portfolio did not do too badly


Q: What are some "Bi Sai" or "Dua Sai" investment that you regretted?


A: We are getting apprehensive about SAL, given it is about 15% of our Singapore portfolio. Although we still believed that it is too undervalued and growth should materialised when both Singapore and Malaysia start issuing digital bank liscenses, or as and when existing customers go for a overhual of their systems, which has been a few years overdue. SAL main market is in SEA, and it is one of the market leaders, and SEA is the place for digital growth in either e-commerce or Fintech. 

We are scratching our heads to why is the market undervaluing SAL by so much. So well, if this turn out badly, it will really cause our performance to "lao sa”

Q: Did you manage to dig out any "gold" then?


A:Nope. Our average is too high. SCI at one point of time rose 60% from its bottom, but even then it is just our average price of $2.1 -$2.2, but  it did allow us to sleep better at night. 


Q: I saw that you are divesting more than you are investing.


A: Indeed, we sold out First Reit, Pan United, pare down Areit, and CSE.


Q: What are some of your net buy then?

A: ST engineering, SIA engineering, Sembcorp Industries, Silverlake, DBS, SIngtel, Tai Sin, Hotung Investment, Diary Farm

Q: Many belived that the worst is behind us, and SIngapore Market is one of the laggards in the region, are you going to accumulate further. 


A: Nope, at least not as current level, Second Wave infections is already upon us, look at US, Brazil and Meixco. US in a day, has more COVID cases than WUHAN accumulated. 


Q: But many believed that even if cases increases, lock down is not going to happen again


A: That is true, but even the Republican States that initially refused to mandate the use of masks and is already back pedalling, I believe while a sync world-wide lockdown is very unlikely, the many restrictions that will be heightened will prolong the pain of restarting the economy and going forward, the earnings will get real ugly. 


Q: But many analysts are saying we should write off 2020 earnings, as that is priced in and we should look at the reovery that will come in 2021. 


A: Given that we are 70% vested, if really the markets goes into a bull run, I think we should be contented with the gains we should make with the tide rising. But the 30% insurance is necessary in view of the volality of the market with 2nd wave of infections. I believe COVID19, might not be the black swan anymore, it has already reared its ugly head. US and China enmity is more of a concern to me, as it could badly disrupted trade. That theme of "China-Plus" supply chain is one investment theme we are looking at, and we do want to have some ammunition to buy, when the time is right. So not, we do not plan to buy anymore if market just move sideways


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Appendix:




Thursday, July 9, 2020

Random thoughts: One step at a time

There were many occasions I panicked, and worried about what is to come.

During my uni days, an exchange program with PRC undergraduates cause me to suffer from inferior self-complex for years. I was with a Singapore delgate of scholars and pupils in Dean List. I laugh aloud that my lecturer must not have know the criteria for the exchange program. I am then the neighborhood average friendly spider. 

Just when I thought I should not compare and focus on my strength, I realised the PRC scholars are doing masters and PHD. How will I catch up with them, how to I even compete?

Looking back, life has been good to me. I might not have been a Coporate high flier, but I have no complains. One step at a time. 

When I started investing, I wanted very much to have a big portfolio. When I read bloggers with eye popping dividends and stock gains, I was jealous, and again a sense of inferiority wash over me.

I remember we truing very hard to pump up my portfolio, all equity without emergency fund.

Now, I am happy with my punny portfolio. Well, I wished it could be better. But no sense of urgency to pump it up. One step at a time 

When I am caregiving. I worried about medical costs, fret over suffering of loved ones, wondered if I managed. All I wanted very often was a good night sleep then. Big brother shall provide. One step at a time

As a father, a hubby, a teacher, a son, a Investor. Give your best. One step at a time. Sleep.