Company prospecting: Fallen angels

Some ideas for 2017? LOL

Fallen angel initially is used to describe the downgrade of bonds to junk status. I remember attending the fifth person's invest X congress that define fallen angel security to that that fallen 90%

I take 50% from its PEAk for it and I have the following:

90% fall Parkson Retail Asia

 

70% fall - APPT

 

About 50% (thereabout), the following:

Sabana

 

Yangzijiang

 

Silver lake 

 

All of them face varying challenges. With the exception of PRA, all are still profitable.

PRA

While PRA has no debts,  its balance sheet is weaker than it seems. It's current ratio is only about 1. Also there is no proper closure to its misadventure in Vietnam. There is emphasis of matter on the amount provided for compensation, and the AR didn't shed much light either. Hence it didn't score well in Coporate governance, especially in the area of manpower (i.e resignations and appointment of very young daughter to very senior post, but such practices is not uncommon for Malaysia companies) 

It faces over-expansion problem. Even it's home turf Malaysia is not doing well. Structurally, it faces Macro-political instability and weak ringgits. Weak currency should boast tourist dollars, but it is not happening and I Suspected it got something to do with the political situation as well as the onslaught of e-commerce

It's star performer, Indonesian's market, has also dulled. 

There is efforts to diverse its product and service offering to appeal to more mass market, if I read the AR and brands they bring it correctly. However, this diversification is carried not from the position of strength and I am skepetical. 

However, if u believe the change in product offerings, reduced pace of stores expansion and year-end festival spending can be the turning point, even for the short term, this could be a meaningful short term trade.

This is no alpha company of cyclical recovery play, but the price is making it interesting.

Verdict: Not vested, watchlist level interest only.

APTT

If u ask me, this company's valuation is interesting. At current price, if u demand a 10% yield, u need 3.8 cents. The current dividend of 6.5 cents is not sustainable, but Mr market is thinking even 3.8 cents might not be sustainable. LOL at 40% cut in payout is already factored in. 

I used to owned it, and I did ask my wife to exit around 68 cents. Still profitable if u take into considerations dividends. Heng.... 

However, I am not touching this. Direct opposition to PRA, APPT's  Taichung expansion  is really too slow. Also, I personally think PAY TV business is dead in terms of Growth prospect. That is why I bought and later sold off M1 but never touch starhub. I consider pay TV a liablility not diversity.

It is so pervasive, the use of apps in streaming of channels or movies/ series; whatever. I am sure all of u heard of VIU, minx etc ... 

I walk past Singtel Mio TV advertising a particular movie, but I have already seen the show. Also pay TV in both Singapore and TAIWAN where APTT operates is not cheap. Basic cable is about $25 a month, and as the name suggests, it's just basics. The broadband business is not growing either. The catalyst has to come from TAi Chung. 

Verdict: Not vested, not interested.

Sabana

Even dogs should have its day or price. But personally, having gone through the fustration with what the management is doing, I will just give this a miss. 

Yangzijiang

I already bought a small stake in this. The reason I bought into this is direct opposite of Sabana, Ren Yuan Lin has successfully push YZJ yard up the value chain of shipbuilding and has shown his business acumen in reading the industry conditions. An alpha company not doubt. 

Textbook theory shows that we are near or at the bottom of shipping cycles. Big names have burst, Hanjin, the remaining in Korea and China are restructuring. BDI and Freight rates have bounced off historical low (this is the worst cycle, with BDI at 200s) 

There is requirement for greener engine and lower emission of sulphur etc, all these possibly creating demand for newbuilds as supply reduced through closure and early scapping of ships

Below is just a screen shot, I have reading such articles more than twice. 

 

There is a clarison research which I can't find now that show how 2016 is a year with abnormal year with high scrapping of ships.

Of course, HTM is a concern, but it is a reason why it is coping in the downcycle.

Also, Ren has hint that he is ready to increase dividend payout to maintain a decent yield (some analysis says 4%) as he reward shareholders to wait out the storm with him. 

Verdict: Vested. Small amount. 

Silverllake

silverlake is another out of favor company. It has stop growing and profits is dropping if u strip off the one-off disposal gains. 

It's recent acquisitions have also cause expenses to increase much faster than both revenue and profits. 

However, the lower profits is due to lower software project revenues, due to the lower capex, the more important maintainance revenue is still growing. 

Also, barring unforeseen circumstances, the milking of GIT can go on longer than what most people think, if Silverlake sell another 6 million shares every quarter, they could go on for 9-10 quarters.  

One catalyst could be a solid EY special dividend.

Verdict: Not vested, but very interested. Keeping my powder dry for a volatile 2017, but will

Most probably get it if it falls further. 

So that's all folks. 

What's your radar for 2017. Share lei. 

Random thoughts: My report card for 2016

At the end of 2015, I Blog about the goals for 2016.

It's quite funny now when I revisit it. This is because I started with 2015 has not been an easy year for me. 

This year, my work in terms of KPI really sucks. My department had a "historic drop" is quality passes. My mum passed away, and the caregiving part is tough. But today, as I penned this, I thought "God" has been merciful and kind to me in 2016. This holiday, I only had a 8 days break, the shortest holiday, but I am still thankful. 

There is a window I felt I am at the verge of depression because I seem to see "suffering everywhere", but I thought in its totality, 2016 is awakening.

I digress. My goals this year, and next.

----------

Health:
Physical--
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)

Verdict: Fail in all counts. F

I am not going to give a number to this anymore. I will eat and indulge as I feel like it, exercise as and when I need it. Bite me.

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

Verdict:

I still feel it. I think I passed. C+ 

I coping. 

Family/Social
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.

Verdict: B

Did ok on most counts. Being spending a lot of time as compared to the past with my dad. Managed to meet new bloggers and ex-colleagues. 

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

Verdict: F 

Didn't do both. Cannot even remember these 2 points LOL


Capital
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"

Verdict: C+

Done most of it, although the quality and quantity might not be that good.

Work
除去心魔，找回热诚


Verdict: A-

While I did buckle and cried when my pupils' results are horrible, I recovered very quickly. I start to see clearly myself. 

I had really enjoyed teaching, and my pupils progressed. While targets are not met, it is a number game. While my confidence is shaken, it did not hurt me as badly as 2015. 

It is another "awakening". Looking back, I really enjoyed going to the classrooms most of the time, for both my P4 and graduating class. 

In conclusion:

My mission for 2017 （poem form)

顺其自然，我就是我。

魔是我，我傲视一切。

我修，去些傻气，

能悟多少就多少。

我放不下，就背着。

他妈的累了，就丢下。

丢不下，就坐下来休息。

能走多远，就多远。

想比一比，追一追前面的人，

就狠狠追。

不想追，就不追。

说我没恒心，我答复你：咬我啦

我什么也不是，我什么都是。

真的咬我，我扁你。

随心笔：虚荣心

 

记得念小学的时候，

学校要建生态花园。

校长叫我们都捐钱。

他说前人种树后人乘凉。

他叫我们鼓励父母慷慨解囊。

现在想起来，他应该也对老师施压了。

因为从不管我的老师，

突然知道我的父母是小贩，

叫我鼓励他们捐多一点。

小贩中有捞得风生水起的，我父母不是。

我把所有的积蓄拿了出来-十元。

我叫我爸爸给多一点。

我爸爸很不愿意，

我说校长、老师说的，

他就拿了十元。

我在回复表上写了20元。

老师在班上一个一个地问我们捐了多少。

我骄傲地说$20.

如果我没记错，已经是全班第三名了。

还有一两个也捐二十元，

一个捐了$50，最高的$100。

虚荣-就是想证明自己真的比别人强。

我的新校长还要把最好的25学生放在同一班。

我很想挤进去。我成功了。

我排二十几名。

虚荣-就是没有朋友，被排挤也没关系，因为名声好。

长大了，我学了投资，投资股票。

很多人听到我买股票，都觉得我很有钱或有智慧。

其实我两者都没有，就只有贪念，想赚多点钱。

后来网上很流行把自己拥有的股票价值告诉大家。

有些更棒，股息就已经几十万了。

那时候，为了出位，一拿花红就买股票，

想很快地“入榜”

虚荣-就是没钱也要打肿脸皮充胖子，

想比别人拥有的多。

后来知道自己比不来了，也不想比了。

在灵魂深处的角落，却还在比。

想比幸福，希望自己“与众不同”，希望自己花钱花得幸福，希望别人“吝啬”而失去更多，这样，又能“高人一等”

虚荣-就是不知所谓的卓越感。

都是虚的。荣华富贵。

说不比了，谈何容易。

你以为放下了，其实只是变相的缠绕。

我以为释怀了，以为心魔走了，

其实我就是魔，

魔就是我。

被驯服的狼，还是不是狼？

狼能像蝴蝶一样蜕变吗？

面对自己，才能看清。

看清后，才能接受。

接受后，才能释怀。

释怀后，再慢慢、慢慢地放下吧。

放下的虚荣，不必捡起来。

别回头。

小心它跟着你。

你爱慕虚荣吗？

 

Random thoughts: An online temptation

Lol.

Just talking about an email offer to become an aflilate for a particular subscription. I had always wanted to earn some kopi money from blogging if possible

I had really want to try my hand on it. Especially after some correspondences with the Marketing Manager, the product seems decent enough, and perhaps even of quality. The analysis are sharp and some could really be rather useful for some readers.

I was talking to a few blogger friends and after thinking over it during my holiday, decided to give it a miss. And most probably it will be a while before I attempt anything like that again.

Some reasons for letting the "opportunity" slips:

1) 自知之明（know my limits)

I know my traffic, those who visit my blogs are mostly regular, while some popular counters' analysis might attract higher traffic, I know it's a long way before I can monetize it properly .

2) Competition 

I know the Marketing manager sent a blanket invitation to all/ more active bloggers. I am

Not sure how many will bite. But I have a sense that my readers overlapped with the more popular or established one, so why would they pay through my blog? 

3) Neutrality

I always believe in everyone being responsible for themselves. I blog quite a bit about various companies, if ever, any reader followed my analysis and lost money, I will not lose a wink of sleep. Most probably those who read my blog knows better than me anyway. 

However, I do appreciate the fact that whatever I wrote is truthful to my own convictions, although my convictions might change. I find it a bit hard to trade my neutrality off perhaps for just one or two case of referrals' commission. 

There is advice from a renowned blogger that banner advertisement could still allow me to keep my neutrality. I was really very touched when he keep a lookout for me and kept me in the loop as he banters with the owner. I appreciated it a lot although to him, it is just asking (举手之劳）But, after sitting on it, I dun think anyone will want to put a banner with my traffic. LOL. So ... it goes back to point 1, I know my weight.

4) 初衷（why I started blogging)

Before I started blogging, I was quite inspired by AK ability to earn some "peanuts" just from writing. I though how nice it is to earn some money from writing 

When I started writing, I am so happy when I do get readers. Hey, there are people interested in my blabbing.

Then I start to know a few bloggers, and the community become slightly more friendly.

As it progress, my blog become my personal diary of sorts.

Adsense was the milestone for me. It means I have enough readers to be accepted. Never mind I have not even gotten a single cent for it.

So it came full circle. I think I will continue to just write for fun, to bo Liao, to vent ...

While it's tempting to know "how much" sillyinvestor is worth, I decided to go for "priceless", there is no

Monetary value attached yet, then see "in my face" when I go all out to canvass for online income to realize it is "worthless". Ya, I scare to lose, my skin thin, bite me. LOL

It is a fun experience, and perhaps also an opportunity for me to know myself better. 

All the best to the rest. I think I will earn by selling my expertise ... (give a bit of tuition)

Investment rules for myself to obey in 2017

I realized I have been rather trigger happy. I am going to set these rules for myself for 2017

1) Any buy entries must fulfilled one of the three investement theories. A cyclical recovery play, growth drivers play or strong FCF, negligible debt yield plays.

 

2) All entries must come with a potential exit plan with potential reward. POTENTIAL reward should not be lower than 35% in a entry, to accord for the macro risk that this bull market it marching into its 9th year. 

3) 2017 to exit when potential is met regardless of how well market/ sentiments is doing. 

4) If there is no potential buys that meet the above one or more 3 criterias, than 2017 should be the year where cash goes to 50% of portfolio. 

5) Final most important rule: Obey all rules and accept opportunity cost loss, aka money not earned. Treated it as emotional/ zen training test. 

I have been trimming dead leaves (borrowing and adapting from Farmer), I have sold Lippo Mall Retail Trust and M1. Cash is slightly above 40% of portfolio with the sale and small capital injection of 2K (winks)

Random thoughts: A wonderful Tai Zhong Trip

I didn't have much expectations for the trip. Our family trip overseas are usually stressful more than anything else, when I need to plan for this and that.

This time round, we went together with my wife's cousin. It is a trip planned by them. I thought it's one of those boring trips with commercial demonstration and buying

But, This is a trip that I always wanted. Getting close to nature. The Feng Jia night market isn't too bad too. But really what recharges me is the beautiful scenery.

When I am having lunch at 纸箱王，a restaurant with all furnitures and cutlery are made of papers, I have this grateful feeling that I am able to afford this. I always feel like a waste of time and money when I goes overseas, but not this time. 

 

The Taiwanese has a sense of humor. Their male toilet is call, 观鸟室，and female toilet call 观鸡室。it's not a cheap naming, but really birds and chickens on display inside the toilet. Obviously there is a reason why I can't show photos in the 观鸡室。

 

 

The view at 清境is really nice, we went to the top of the mountain, it is really frecking cold, but the view equally breathtaking.

 

  

 

I feel at the top of the world. I tease my wife and feel like we are dating again. 

One of the moments, I would like to turn back clock.

 

The words at the back is "时光隧道”，my wife ask me why not take a photo at the train station instead?

I said, I wish I can turn back clock and be with you all over again. LOL ... 

Seldom have the mood to “siao Kian" my wife. 

Accordia Golf Trust

I didn't see much views about the potential privatization of sponsor by MBK.

Reading about the tender offer, offer a few insights that I think are important but not reported by the various news agency.

1) “Year 2020 problem”
It means a problem that may cause a reduction in golf demand in circumstances where a majority of postwar baby-boomers who lead the current golf demand will be over 70 years old.

My thoughts: It is a direct conflict with AGT's management claims that the seniors have more time to play golf and it is a opportunity. Also, 70 years old is arbitrary figure isn't it? 2017 could well be the problem if 67s are not healthy enough to play golf.

2) It is stated that "MBK Partners Group was interested in investing in the Company, had agreed to the Company’s management model including the Circulating Business Model".

The Circulating Business Model consist of the asset light strategy, but the focus is on the upstream expansion of golf courses and upgrade of existing courses, and also with a look to overseas expansion for strategic alliances.

So, if the sponsor-to-be if going to buy assets at a quickened pace, the greater the probability of asset injection, isn't it? That is when the puzzling statement came in:

"However, after the implementation of the asset-light strategy using the business trust, although the Company prepared for selling to AG Asset the golf courses owned by the Company, because the unit price of the business unit of AG Asset remained low, and it took time to discuss and coordinate with related parties, AG Asset is unable to raise funds for acquiring the golf courses owned by the Company"

Stripped off the corporate structure, AG asset basically refer to the Accordia Golf trust. It is very obvious management 's intent is to raise funds through placements or rights, instead of debts. Otherwise, why does the low unit price matters?

My final thoughts:

Will MBK be able to find partners? Will AGT become a dumping ground? A strong sponsor is good only as far as it willing to be fair to shareholders. Case in point is the difference the past LMIR and Ascendas Reit. Both have strong parents. Look at Ascendas's recent acquisitions, while the purchase price might appear pricey, there are reasons to explain it. Lipuit Village, anyone? 4-5 years after it is acquired, it occupancy still did not cross the nation average of 85%. But Kemang Village is finally yield accrretive.

AGT's price has been retreating abeit very slowly while STI is going strongly.

I thought such pessimism is rather uncalled for. First, the privatization might not go through, the major shareholders just owned less than 30% of Accordia Golf Japan.

Assume the deal goes through, it will again take a while before the "upstream" actions flow "downstream".

  

Random thoughts: Human capital

Human capital? 

What comes to your mind? 

The amount of money your skills and network can generate, payoff? Right? In simplicity, our work. 

My work for the year 2016, is drawing to a close, as usual,I am going to review my human capital.

When I started 2016, I wrote E3. I want to do be effective, efficient and engaging in my teaching. I think I done all three. I do not want to review how effective, neither do I want to put a value to it, I know I have make a conscious effort in these areas and I made progress. Period.

That is the capital part.

Now the human part. 

That is the high point.

I never thought I would almost break into tears talking about a pupil. She did very well for my subject. In the past, she would already be a asset to my KPI, a plus, a cause for joy. But because she did badly for the rest, she couldn't get into even normal stream. Whenever I think of her, my heart aches. Human... 

I have a colleague just gotten married. We discuss work even late into the night, and it will go on to philosophical views on teaching, people and expectations etc. 

On the day after her wedding, she texted me to thank me for attending the wedding. She told me she felt like crying when she saw me. 

She said she wanted to take a picture with me, made me feel like her father. Human... She said she really appreciate the trust and confidence I have on her regarding her work.

On the last day of school day, my co-form organized a class party. My pupils ask me for ice-creams LOL.

I remembered jumping with joy when running towards them at the canteen. Human... I felt like a little kid again. My pupils start bringing food to me, some told me their mother prepare it with them, so just wanted me to taste more food. I felt like a star.

I remember telling a mother during end of year meet parent session, that her daughter is visibly unhappy from semester 2 onwards. And in term 4, even more visibly so. I was rather afraid that I might make things worse. But luckily the mum felt apologetic and when I checked with my pupil the next day, she told me her mum did sayang her and told her that she is sorry for pushing her so much. But the weirdest thing is, I felt no positive energy from her. 

I even manage to have some exchanges about work, life, philosophy about academic pursuit with a parent, something that never happened in my past decade as a teacher. She even send me videos about a wonderful teacher, how that teacher touched life. That video is how we use human capital not to prosper, but help others. 

My supervisor ask me, what is my high point. I told her help my colleague get a good appraisal grade and see her smile when I told her she finally made it... 

The dark side of human.

I lost quite a bit of self-confidence, self-doubts about my capabilities as a manager has set in. 

I remember, only ticking "communication and team building" as strength in the list of areas in my review paper. I can't honestly think of other strengths.

In fact, this post on review of human capital, I can't find anything else to write, except people. Can't write results, systems set up, culture etc. 

But it's ok. Its what that matters most to me. 

How has your work been? 

随心笔：抱抱

在那你最难过的瞬间，

我真的很想抱抱你。

我想对你说：“你很优秀，你尽力了。”

我相信这条路，只要你不失去信心，还是会通往“罗马”

可惜，我找不到机会。

你不会看到我写的。

你的内心充满了泪水吧。

我记得你紧张时，都会紧捏双指。

如果你又紧张又难过或自责，

捏成一团的手，会不停的扭曲。

那一瞬间，我看见你双手在颤抖，

眼睛红了，但是嘴里还带着微笑。

那是我看到最凄凉的微笑。

你走向我，我想握着你的手，

但是，你的眼睛不红了，也失去了光彩。

我再去找你时，你周围有很多人。

你看起来没事了，或许难受的是我吧。

我也想抱抱自己，告诉自己我尽力了。

你一定要像上我的课时一样坚强，

相信付出会有回报。

是的，我不知道你怎么想，

因为我还是没机会跟你说话。

我觉得“付出会有回报”这句话很刺耳。

你才十二岁，又这么勤劳，为什么不能好运一点。

我也怀疑自己的付出是否值得。

或许我想抱的，更多是我自己。

我想抱抱我所有的孩子，

我没骗你们，我真的相信你们，

不过，可能我太在意成绩了，

所以虽然我觉得大部分的你们已经满意了，

我还是不满意。

“谢谢你老师”，在电梯一角，

另一个家长亲切地对我说。

我看你真心地向我行了一个礼。

我很欣慰， 不过无法控制心魔的我，

不知道为什么当我听到“也教我女儿时”，

觉得很讽刺，觉得你妈妈在嘲笑我。

“为什么会这样？好好检讨？”

这责备的话，反而对我影响不大。

我了解你的性格，也明白你的出发点，

我真的没生你的气，不过我有点受不了旁边的虚伪眼光。

做为一个老师，我觉得我尽力了。

做为一个人，我觉得我很成功。

因为我亲爱的同事，

你们竟然都用你们不同的方式来安慰我。

你竟然陪我聊了这么久，气愤地说：“难道不能接受失败吗？”

谢谢你做我的镜子，让我看见了自己的心魔。

我说过，我给自己一天的时间自怜自哀。

明天，我会再面对一切。

我知道，“主任”这两个字压得我快喘不过气。

我最放不下的，其实是这两个无谓的字。

可惜，我没的逃避。

不过我心仪的接班人啊，

你果然像我想的，很坚强。

你没像你外表那么感性。

不过你的确善良。

权利本来就应该握在善良却又冷静的人手中。

你责备我散播负面能量，

还是这种真心话，让我舒坦。

让我抱抱自己，明天我会继续拥抱生活。

我的孩子，如果有机会看到这个，

要抱着希望奋斗，失望也无妨，

千万别像刚遇到你们时，

就只是“过日子”

我不知道你们是否像我一样失望，

我还记得你们手握拳头，说：“yes"的样子！

我记得你兴奋地问我，“我做到了吗！”

我很渴望，很渴望再看到。可能我太贪心，希望马上能看到。

我鼓励你们的话，我会全用在自己身上。

老师会是个好榜样。 

Random thoughts: my pupils' dream job

It is winding down to the end of the year. 

I introduce Windows Publisher to my pupils, and asked my pupils to do a business card for themselves.

I told them upfront, choose something u want to be, u like, dun worry about money, forget about your parents ' expectations for a while. It is just a fun exercise, think of a job that will make you happy!

If really being a lawyer or doctor is what you want, go ahead. 

My top class has the most pupils wanting to be doctors. It is still the most popular job. But it is very interesting that it of a class of 32, the second popular job is to be a singer and a piano teacher.

I told my class my first choice since I was a little kid is to be a teacher, second choice, singer! They laughed. One pupil ask me to sing. LOL

But surprise, surprise! They is so much creativity! I enjoyed myself. So what are the top few creative/interesting  jobs my pupils aspired to be?

1) Hacker ( love this P6 guy, super beng, but he not say say only ok, he showed me some "coding", and my jaws dropped)

 

2) Pokémon Trainer ( LOL, well, I think that's cool)

 

3) Rami burger chef 

4) Ice-skater ( She is only P4, after she finished her business card, she watch a u-tube on skating. I asked her if she knows all those stunts, she told me she could, she already won 2 golds, and her coach told her she has to wait 2 years before she can take part in international competition! "Got eyes cannot recognize Tarzans") 

 

5) Writer

6) Anime creator 

Then I did some cheapo chit chat. I ask, "if I am sick, will u take care of me and give me a discount?", some doctors aspirants readily said yes! Some pondered  a long time and said "ok la". I tease them, "how much discount would I get? " She said "10%" Hmm... I think I need to emphasize generosity more.

I had fun! I thought I got to know my pupils better in this 1 "bo Liao" session than the whole year for most of them. 

When I printed out the name cards and gave it to them, one P6 girl was elated! And she kept it in her wallet, very proud of her name card. Made my day. 

Random thoughts: Pokémon exhibition at SEA

My weekend outing.

 

It is quite a ex exhibition, for $8, u get a pokeball, and u can use it interact with 4 machines to get clues on what Pokémon is hidden in it. There are 8 machines, some with clues like height or weight is just a waste of time.

The funny thing is, when u use your pokeball at the end to reveal the answer, you pokeball is actually reset and u can play with the various machines again, like clue on their voice, shadow etc.

So, if u really want to have fun, go in a group, solve the puzzle, but do not tell each other the answer. Once u reset the ball and gotten your answer, swop it with your friend and play it again. 

LOL... cheapskate I know ... 

The photo taking session with pikachu is at 430 pm if u are interested. 

 

 

Ascendas Reit: A weird share price pattern?

I am writing here because I felt there might be some "pattern" in Ascendas Price movement.

Granted, all industrial reits are facing some weakness with fear of interest rate hike and spike in industrial vacancy.

But lets start with this picture.

If only this is the chart for its share price. You can see from here, with the exception of GFC, A-reit has an unblemished track records for raising DPU. Of course amount available for distribution grow much faster than increase in DPU, due to dilution of shares. And we are going to have the ECS issue overhang now, beyond the macro issues of Interest rate hike and vacancy.

But what I want to point out is there is always a fall in price following an announcement of placement and then followed by an recovery in price. 

I would like to give credit to A-reit Website, it made tracking of its performances a breeze.

http://ir.ascendas-reit.com/news_search.html?search=placement 

Here are the placement dates:

11August 2016

18 Dec 2015

9 December 2015

19 March 2013

14 March 2012

11 April 2011

31 March 2011

11 August 2009

15 Jan 2009

2011 is the furthest I can go with Ascendas Website, I can go further with Yahoo chart but I decided to stop.

Ascendas is a active manager who acquire and divests properties. Given that the DPU is generally raising lets say they pass the acquisition test, so have they divests at a loss?

Using the same method, 

http://ir.ascendas-reit.com/news_search.html?search=divestment

With the exception of  Block 5006 Techplace II, where there is no mentioned of premium or discount of sale price (lets assume it is a discount) the rest of divestment is from the lowest of 5% to double of it purchase cost.

Risks

I would think the manager pass its test in execution. 

But there are still 2 risks, in buying this business/ manager. 

1) Overvaluation, 2009 onwards is a bull-run for the stock market. 

2) Track records start from 2009, it stumbles in 2009 although it did recover

3) Track records especially that of manager's performance has more correlation to future performance than otherwise, however, that is assuming Singapore's economy is not going to the dogs. Also, there is no "track records" in Australia.

4) Given its sheer size of managing industrial properties. It is impossible for it to grow by just buying 1-2 properties. It need to either do an "Australia Stunt" or for the general industrial rents and occupancy to improve. 

Conclusion

Well, A- Reit has a prudent capital management system, one can wait for the price to fall further to reduce overvaluation risk. Assume A-reit can at least maintain the DPU for the next 2 years, it is yield of 6.6% at current price, definitely not Crisis level valuation but I would think it is good enough. (Annualize 1 H would have beat this DPU of 15 cents)

As for risk 2 and 3, I think thy are valid. I am not implying that it will go up soon post ECS, just that I thought the placement issue seem so recurring and predictable that I share this weird pattern. Is the "rights/placemnet is bad" for Reit Myth so entrenched, that whenever it happens, it is going to fall, regardless of what is happening in its business foundations. Granted, placement is usually done with a discount, but it should happen at announcement not completion.

I did a tracking of placement's discount some year back, with the exception of 2009, it is usually in the range of 5-9%

Random thoughts: A 3-part lesson about thinking out of the box

SMOL keep writting about his teachers; it gave me the itch to write about my teaching. 

There is a chapter about Lim Bo Seng, our War Hero. Instead of the usual lesson, (it's after exam), I ask the pupils to extract info from the text to make into a pamphlet .

I told them to choose sides, if u are Guerilla fighters on Lim Bo Seng side, what would write in the secret pamphlets  about his death? If u are Japanese imperial Army, what would u write in the Phamplets? 

In this exercise, I challenged this top class that it is easier to write from Lim Bo Seng's Side perspective. I am glad quite a few tool out the challenges and wrote from the perspective of Japanese Army.

When I explained their "errors", I did not focus so much of the content, but the target audience, the setting, era which the pamphlet should be in and most importantly the "purpose" of writing this pamphlet. The purpose of writing from the side of Japanese is lost for those who wrote in that angle except for 1 boy. 

I told them to think about issues from different perspectives. 

The third lesson, it was a vocabulary revision exercise. Given this is a top class. They do not have problem. 

I have this decoding game (through answering quizzes) where the pupils decode and key in to code to a tinyurl page and it will lead them to a page with a Pokémon creature ! They are supposed to do a screen shot and the creature is considered "captured" 

There is this mad rush to decode for the prize to 6 pokemons. This is so much excitement.

After I have the prize to the fastest player, and ensure every group has at least one player with 4 creatures captured, I change the challenge.

Every one in the group must have at least 4 creatures. I told them to think out of the box. 

I saw every group frantically trying to solve the puzzle with those already done telling them the answers. Some groups just stick to themselves and continue to solve the puzzle as soon as possible. 

It took about 5 min for 2 groups to complete the task. I told them I can do it in 10 seconds. "How?" They asked. I said, just take photos of the 1 player's work, and all of you will have the "creature" at the photo gallery, isn't it?

One boy protested loudly," see! I told you, Cher! I thought about it but he said it is cheating!"

I ask the pupils to think about "cheating" as the bell went. 

The following day, I ask them about cheating, think about perspective, and what is their take. I gave my take on the whole thing. I also link it back to the topic about Japanese and Guerilla fighters and ask them who is right and who is wrong. Why is it wrong? They said killing is wrong. I ask them, you mean the Guerilla fighters did not kill Japanese? Is it if you are Japanese, you fight for Japanese, if you are Chinese, you fight for Lim Bo Seng? Is that right? I saw confuse faces.

The sad thing is, I felt that the whole thingy is a flop. As I only see "spark" in one person's eye, and a few pupils "pondering hard" about what I said. Most pupils gave me the "huh, never mind, this is not examinable" or "totally lost" look. Then the usual deadly "ignorance   Noding of heads" LOL.

But no regrets. I had fun. 

Random thoughts: Avenger station and Genting Jurong

It is a family day. Went to Avenger station exhibition at science center. Avenger Exhibition is a "business" of Cityneon. So do I like it?

I don't. I ask my son and godson, do they prefer Avenger or plain simple "science center" which we visited too. My son preferred science center.

This is a lot of "ho-ha" at the entrance of Avengers, downloading App, logging into their Wifi, registering etc.

It seems like there is "customize" interactive exhibits. I was expecting a blow-away experience, since I heard Las Vegas exhibition is a big success. 

No lor, the app is quite a letdown. The unlocking of "quiz", "photo templates", and videos and audios are quite "redundant. 

The scoring is only through quiz. The long queue at Iron Man zone, to put it plainly, it just a Wii Game (movement sensor) with a big TV and it is hardly even a game. The killing of Ultrons I suspect is "automatic" as long as you move your hand. 

Boring, is my personal verdict, and I prefer Science Center, with a free Science Show about "sound" that is surprising entertaining. 

There is a new exhibit on Climax change, and with my son older and able to read the instructions, the exhibits are really interactive. I was also quite mesmerize by the 21th day hatching of chicks, and I see chicks trying to break open their shell. 

I went Genting Jurong to scuttlebutt. Yes, I am interested in Genting Singapore, but that is before the recent strong Quarter. 

Genting Jurong has only 1 F&B outlet which only serve Buffett. I am surprise, and it is not cheap. It is $45. It is also rather cram, although it's lobby is classy. I do not see any entertainment. 

Venture Corp and Lee Metals

Last Friday was the day Singpost, Venture and Lee metals results were out on the same day.

I have wrote a post about Singpost, it's results is below expectation. As for Venture, the recovery story continues.

 

It is a very good set of results. 

Not only has the recovery continued, margin has continue to improve. There is no more info on the different segments, but I guess the medical testing segment is continuing to expand. 

The funny thing is Abeerdeen is always selling more than they are buying.

Cash pile is increasing. The good dividend of 50 cents is in safe hands now, since Q4 is usually the strongest quarter.

There were 2 years when dividends were 55 cents, if Venture repeat that stunt, it will be a catalyst, otherwise, steady as it go, is fine too.

Lee metals' story is intact. While the headlines might be ugly, it is one alpha steel company that has stable NP of profits. Many steel stockists are already in the red, so having stable profits is no easy feat. 2 cents dividend should be able to be maintained. 

For non-reit/ trust counters, only ST engineering and Yangzijing has yet to announce results.

Venture has done above expectations.

Sembcorp Industries and Lee metals is within expectations.

Singpost below expectations.

Singpost Q2 - My thesis is challenged

i did not expect the dividends cut policy to be announced before the announcement of the CEO.

I shall not talk give a summary of the quarter report, readers can look at them themselves. There are several negatives in this report.

 

Of the above, the one that throw me off my comfort zone is higher cost in the e-commerce business. 

This cost, the "last minute fulfillment of labour" smell like poor execution by Global Trade, and the business in it US, I am not sure how much "control" singpost has. It's IT investment is going to continue since the Omni-channel technology need investment to get it ready for Singapore.

 

The logistic segment, which is the "crown jewel"  has stagnate even at "top line" level. Where is the "feeding through" of the jump in rev in e-commerce. 

There is clarity now with dividends, 60%-80% of underlying profits.

Looking at the scenario of EPS of 6 cents, 7 cents and 8 cents for this FY, we can work out the best case and worst case scenario of  dividends is 3.6 cents to 6.4 cents 

The best case scenario look quite palatable and if we factor in the growth in SP mall and cost snergy from 2017-2018, the dividends could be higher than 7 cents if we see growth of 20% from 2017-2018.

But that is the best case scenario. 

The next quarter will be D-day report card. Beside the usual Christian season, Alibaba has is eastern version of single day (figures are inflated, china business like to have phathom orders to boost their online ratings)

In the short-term, I see a sell-off on Monday. Hold tight.

Below is purely speculation:

During investor conference for last quarter, the covering CEO, mentioned that there is some discussion how Lazada can fit into the scheme of things. 

With the announcement of Lazada buying Redmart, with its distribution network of grocery, I wonder if there is any "breakdown" in value addedness of goods channeled through Singpost Network. If Lazada announce cross-carrying of products in redmart, then its BB.

Alibaba is not the key player in Singpost's fortune now. US subsidiaries and associates are.

随心笔：内战

心跳加速，思绪混乱，决定好的，又改变了。

跑得很急，在追寻心安，还是道理？

转得很快，因为没有立场，

在轰炸声中，想找一个据点，牢牢守住。

正当你以为你守住据点了，突闻兵变，

这回，敌人从背后来了。

好乱。

谁走过？

怎么眼前的一切这么平静？

到底眼前的是幻觉，还是内心所向是虚无缥缈的？

突然，一切又平静了。

暴风雨要来了吗？

Random thoughts: Wrong

My concept of "Right" and "wrong" is always evolving.

I used to self-righteous when I was a teenager, then I saw different perspectives such as time, place, intention and stand etc, I felt it is a world of grey.

It seldom bothers me anymore, what wrongs other do unless it very badly affect me, which seldom happens. It should not anyway, for example, if u say you have chosen the "wrong" wife, then it would  really badly affect a person, but how can that be? In such a case, like a failed marriage, I would have to bear big responsibilities too, it would be wrong to have a "victim" mentality. In "Victim" mentality, we ceded control and responsibility to external factors.

However, it is possible to be a "perpetrator". I now understand the phrase "when u own the bank 1 million, it's your problem, but when u owned the bank 10 billion, it's a bank problem" There is indeed the choice of "lesser evil" after balancing all trade-offs, and decide a "wrong" affect less people, then "correcting" it does.

I am giving myself an excuse to do wrong, so just excuse me.

Company prospecting: Talkmed

(not vested)

I have been crawling through medical companies, especially those offering direct services to patients. But have not go into those upstream, the manufacturers of medical equipments, products.

One thing that struck me is the high lofty valuation of above 30 PE is more of norm than exception. It is a sector that seems that it can do no wrong, however, looking at the companies, I would think that this is a myth. Of course there are well-managed companies like Raffles Medical, and companies with visible growth potential etc. There are also companies who are struggling

I am at first attracted to ISec, but when it bought Singapore clinics, I stopped looking. It reminded me of healthway.

Talkmed is a company that is a super multi-baggers from its IPO, even after recent correction, it is still a 5 baggers. I thought it would be another company with insane valuation. But nope, it is at PE 18, and surprise surprise, have a dividend yield of 4%, and is debt free.

It's has its link with Parkway, with refererral of patients through SCC and Parkway agreement, I am not sure when this arrangement will end, but the bulk of revenue is concentrated with its CEO, while this is itself a risk, I believe his "reputation" is more valuable than the referrals,however, to build up his "disciples", the referrals might be important.

Talkmed has stopped "growing" over the last few quarters, and there is associate "loss" with its Hong Kong investment. However, my thesis is this is an misunderstood counter. Here is why?

1) A new hospital cannot possibly break even within a year. It is wonderful results if it break even after 1 year, 2 years perhaps is a more reasonable timeline?

2) it's has run up so much, it is the most over-valued. If u look at the healthcare universal of listed companies in Singapore, it is the most attractive if you look at it in totality, balance sheet strength, yield and PE. Even "growth" is more visible if u ask me.

I have no idea how HK company will work out, reading through the doctors' CV, and it does seem impressive, typical your premium private care doctors. The concept of one-stop cancer care, and most importantly, comfort, it does seem to appeal to what the rich would want if they are diagnose with cancer. If u compare this with the doctors ISEC bring into their fold, even with profits guaranteed clause. Vietnam Venture has already yield results although it would be a long while before it could contribute meaningfully.

I would have invested if my cash level is high. But, I would keep my powder dry.

On a side-note, I also do not think think healthcare is a "ever-green" sector. Yes, Singapore is aging, there is demand for healthcare, but not all companies will benefit from this trend universally. I also find the healthcare insurance system in Singapore a timebomb.

Many are being persuade to buy the top IP plan, and the insurers are raising premiums because there is wastage.

Look, if u are ill, u go to A&E at a premium hospital, even if u are not that serious to need hospitalization, what would u do? Pay for the consultation and medicine in cash or ask to be hospitalized and then claim? Will the private hospital has the incentive to reject your request?

Is private care really worth 300- 1000% premium over govt. care? There is some muttering about regulation in private care, if it happens, I suspect there would be some pressure on "premiucare"

SingPost - the first catalyst has happened

The alibaba deal is on.
http://infopub.sgx.com/FileOpen/SGX%20Ann.ashx?App=Announcement&FileID=426494

Next is the confirmation of CEO.

The better than expected results due to peak season of Christmas and Year end Celebration

2017, awaiting the SP mall to contribute.

Am I dreaming?

Why not? Greater fool theory? Alibaba is willing to pay 1.75 for SingPost new issue shares. I am not complaining. The capital injection would Rediced the debts.

I believe the analysts will stir fried the news . Lol

A reflection of my investing approach

For quite some time, I found it hard to explain my approach. Value investing? Dividend investing? I am not going to pull my hairs over the words, but I realized I have many unanswered questions as I reflect on my investing journey.

First of all, let's go into the buy side of investing.

I am definitely not pressing the "buy" button using numbers as the only decision. Not that numbers are not important, but no way am I going to base an decision by some ratios like ROE, P/B, PE etc. The numbers are never static, and it is the future numbers that are more important, and the future numbers are determined by growth, and the current numbers determine the margin of safety.

Now, I think I have 2 approaches to finding "growth" in stock, and 1 approach in finding "safety"

1) Buying alpha cyclical stocks, wait for reversion to mean, and for "growth" to take place in the form of "recovery"

Those counters that I have bought using this approach include Golden Agri, Yangzijiang, Sembcorp Industries.ST engineering, and most recently M1

I would say my track record for this approach is horrible, as I usually bottom fish too early. Of all the counters listed above, I did average down for all except for M1 (too recent), I usually average down when a counter is down another 15-30%.

It works well for me for Yangzijiang, ST engineering, I made a decent profits from YZJ (The previous round of buy-sell net 30% profits is 2-3 years ago) Averaging down for ST engineering allowed me to reduced stake at break-even price, and stayed above water.

But I was "burnt" for averaging down for Sembcorp Industries. It had fallen some 40% from my average price at its trough, and I have cut loss at 30% for half my stake. 

Taken in totality, including dividends, capital loss and gain, both realised and unrealised, it would be a nett-loss of about $300. 

Verdict- Failed. 

At highsight, I could have improve this approach in 2 ways. 

Buy later. Whatever I have wanted to buy at first salvo, wait for another 10% fall. 

Sell earlier when average down fail. 

2) Find potential growth drivers that is likely to materialize, but with stock price yet to be chase up. 

Those counters that are brought under such approach include MIT, SingShipping, Ascendas Reit, SingPost, Lee Metals, Cogent and APPT

Of course, the key words are "likely to materialize", and I could still get it wrong. With the exception of Lee metals, I have no need/chance to average down, although I did bought back after selling, which I think is different from averaging down.

There are plenty to reflect on in this approach. 

Lee metals' growth is AustVille TOP. It did happens, and I was sitting on 20% gains excluding dividends. However, when as Austville is an opportune one-off windfall, the "story" of investment then become that of cyclical play and also the third approach which I will talk about later. 

APTT growth are Taichung penetration, cross-selling of products and also broadband market. It didn't work out and my wife exited with capital loss. I was lucky that exited earlier due to the need of cash, and I exited earlier.

Now, taken in totality, even without taking into consideration dividends, it was a gain of $3400.

That is taking into consideration that APTT did not have the growth materialized. 

However, the gains would have been much lower, have I not offload A-reit and SIngshipping when market is at 3300-3400. The irony is I also sold Cogent too early, it will be muti-bagger instead of a 30% gain.

Verdict- Passed with a stroke of luck. 

On hindsight, how could I have done better? I am not sure if I could have hold on to Cogent longer? Perhaps I could have done staggered profit taking instead, like I did for Singshipping? I would have missed the opportunity to sell A-reit all at once, but nett-nett, it would still be more profitable. I am also not so sure about selling on confirmation of good news. If I have waited for Cogent to confirm its Jurong development project, I would have also waited for APTT super drag feet entry into Taichung, and like my wife, exited with capital loss.

I should not have change the story from growth drivers to cyclical plays, in the case of Lee metals. When the story changes, the actions should have been different there and then

The third approach, I was not looking so much for growth, but stability and attractiveness of yield.

3) Stable companies with attractive yield

Those bought under this approach include LMIR, Sabana Reit, Silverlake Axis, Venture, HPHT, Accordia Golf Trust, Parkson Retail. Putting them together suddenly make me realized with the exception of Venture and Sabana Reit, all of them have their operations overseas. LOL

One need not agree with my choice but I considered LMIR stable then as Indonesia retail scene is booming, and Accordia Trust has survived Japan Quakes very well in terms of distribution. 

With the exception of LMIR, again, none need averaging down.

Again, taken in totality, I seems I have make a good profits on $2300 without taking into considerations dividends again.  

Verdict- Passed with a stroke of luck. 

How can I improve? I am not so sure about this group. Venture I sold and bought again, LMIR I just endure the capital loss and receive dividends and it is recovering well with the rest of the reits. (I think I am in the money now, with dividends.)

FSL- The odd one - Catalyst play.

Expect resumption of dividends to boast share price. Exited at 5% profits. At one point it was a 35% paper loss, but I didn't average down nor cut loss. I kinda of loss with this. So I will say bye bye for this for the time being. 

Conclusion

Cyclical plays should be treated with utmost care, I will bear this in mind in dealing with Yangzijiang, and to a lesser extent, Lee metals. Yield, if sustainable, does provide some support to falling prices. 

Profit taking should be staggered. 

One cannot mixed growth drivers investing with cyclical plays, such as in the case of Lee metals and perhaps to a certain extent, ST engineering. 

My results would be better have I stick to approach 2. In fact, Capital Commercial Trust fit nicely into approach 2, but I stopped short because of the lame excuse of "over-exposure" to leveraged instruments

This is a personal reflection on entry and exit, and is meant for my personal consumption. How well researched on a company business model and track records is still first and foremost the most basic trail of thoughts. 

Has the fundamentals of M1 and SPH caught up with valuation

I doubt anyone would disagree with me that the fundamentals of these 2 companies are being affected by competition. M1 by a highly possible 4th Telcom player and SPH by alternative news digital platforms.

But that is only half the question, a better question would be "has the challenging outlook being reflected in the shares price, and has it overshoot to the downside?"

Personally, between the 2 companies, I would go for M1, notwithstanding the fact that its latest quarter results sucks. It blames the fall in net profits to higher depreciation and ammortization costs, but there is more than meets the eye.

If you look at 9 months result, there is indeed a significant increase in amortization and depreciation from 86,1mio to 93.3 mio, but if you look at 3Q results by itself, the difference in YoY depreciation and amortization is a mere 1.3 mio. The real cause is the reduction in ARPU. The lower handset sales while affect revenue will also cause higher cost of sales, so in a while, it will offsets one another.

Is reduction of ARPU worrying? You bet, since the competition has not even started.

I have assume the following in the face of a 4th Telcom.

1) It costs a 10% fall in ARPU to the price competition
2) It manage a 10% market share within 2 years, and cause 25% reduction in M1 mobile's market shares.
3) M1 continues to pay out 80% of earnings.
4) M1 is able to maintain its NP before the "war" begins

I expect a 5% dividend yield with the reduced earnings in 2018, and the price should be $2.2 I made a bid for today but did not get anything. But I will not bid anymore tomorrow.

Because as you can see, assumption 1 should be worse since without competition, it had already worsen by 10%.

Since I gave a damning report, why did I still say I chose M1 over SPH. 

Any real fight with the 4th Telcom will only starts in 2018 earliest (10% market share), I assume of the 10% loss, half of it comes from M1. It might not be too bad.

I do think with a reduced earnings, M1 can sustain its operations albeit at a lower earnings. There are also 2 silver linings in M1 report, cash flow is still strong, and they are still growing their subscribers base. However, it is due to a higher penetration rate, and I suspect Singtel and STarhub will both report an increase in subscribers. 

With SPH, it is not going to easy. It has already increase ASP, but its reduced dividends of 18 cents is already above 100% payout. 

I do not think print will go the way of the dodo, but I seriously do not know the "bottom" and hence I cannot predict what price is a fair price since I cannot predict future earnings and hence yield. 

However, SPH shares price's fall is not as bad as M1. If you ask me, SPH competition is 2 folds. One is direct advertising competition, such as google and other online platforms. Next, readership. If readership of papers continue to fall the attractiveness of advertising through print is going to be even lower. 

SPH is in news business. Beside speed of updates in news, there is another issue of news print. I get news alert from 4 different news apps on my phone. If I want my finance news, I go for reuters and bloomberg, there is no need to wait for Straits Times to reproduce their news. 

Then why is the price holding up relatively well. I think its due to the speculation of timing of injection of Seletar Mall into SPH reit and the possibility of special dividends. 

However, I will watch M1 closely. 

随心笔：儿童节

儿童、儿童，最珍贵的就是童真。

童真让围绕在你们身边的人年轻，快乐。

你们背负着大人的期望，寻找着自己的梦想，有时很迷惘，很累吧？

儿童节，还是儿童结？

心结能解开吗？

你们的自信，需要胜利来建立吗？

为什么你们越来越少笑？

因为你们明白了什么叫现实。

你们还哭，也许哭得更多，但是越来越无声。越无声，越凄凉。大声哭的，没啥事。

祝天下的儿童，还有童心的人，儿童节快乐。

Random thought: That feeling of being young

That feeling of being young?

Having a hell lots of fun, enjoying every single part of company, fussing over the wrong words said.

"Torn" the night as I used to say it.

Saying nothing and listening, trying to make a good impression.

Feeling free to do whatever one like, and yet felt important to make an impression.

So excited that I keep blabbering rubbish. 

Screaming and shouting over a scoring of a game. Feeling tired yet wishing the day has not ended. Wanted to take it cool but also wanted very badly to win. 

That was a camp, I felt younger by 20 years. 

The nice rainbow yesterday mark the start of a feeling forgotten since a decade. 

Reliving it again, a blessing. 

Doing company prospecting is risk management rather than prediction

This is somewhat triggered by B's post on swiber and the issue of hindsight commentary.

It is not difficult to find what's wrong with swiber, MPM, etc. but personally, DYODD is more about self-accountability and comfort level rather than anything else.

I remembered MPM had a price surge when it first announced its foray into Rig, if u have exited then, MPM is still a profitable (perhaps very) for some. I didn't because I am not comfortable with the rig being built without a charterer. Does that mean I am a genius? No la, just that I am uncomfortable with that fact. Similarly, I thought oxley will blow itself up sooner or later, but it's properties keep selling like hot cakes and it's going places, and those overseas projects are also generally successful. But I am still uncomfortable, it's not about whether we are right or wrong, but how u think of its risk reward profile. And if can u forgive yourself if you are right and uncomfortable about the risk but went in nonetheless. 

Cases of I am wrong about the companies earnings and still make money:

1) CMPH

2) Gaoxian (exited when dual listed)

3) Venture (growth drivers did not come from 3D printing and Penang cost control ,rather it's from life sciences) 

4) ST engineering ( AIMs and LSG did provide the growth, but offset by MRO) 

Cases of being right about the companies' earnings but still lose money:

1) Lee metals

2) LMIR

Then there is many cases of being right about the earnings but sold too early:

1) CES

2) Cogent

3) Silverlake axis

So all in all, I agree with B that "I told u so" is rather meaningless.

We need to get BOTH the earning forecast right, as well as the entry and exit right.

But the fun part is "reading the industry and management", equally fun as making money. 

Random thoughts: Weekend musings

Gold is worth 200k or a million?

The explanation years ago, by minister/ minster or state is the level of competition, meaning the number of competitors are vastly different. One go through the heats, semi finals than finals, while another went straight to the finals.

I felt for someone with an inherent disadvantage, the heats and semi finals are in his/ her life stages, and it may not be any easier. 

I was just amused until my colleague told me its "unfair" and the disparity is too big.  It means me wonder if the public miss the point. 

Recognition is good, important in fact. But can be measured in dollars? Ask the parents if there is no prize money, will they send him to USA? I dun know, I am not them, but I think they will. 

Then the issue of "signaling", what are we teaching our young kids with this disparity? 

I think we are teaching "reality". At the same time, the winners and the winner wannabes, they are trying to prove to others and most importantly to themselves what they are made of, value is intrinsic, less extrinsic, and when it is extrinsic, it is hardly monetary. "I do not wish to let down those who supported me so much in this journey", rather than "shucks, just 0.4 seconds and it's a quarter million"

Of course, there is nothing wrong tangling carrots. But u catch rabbits when u tangle carrots. There is a difference between scavengers and hunters, although they are not mutually exclusive. T-Rex is also a scavenger at times, but a pure scavenger can never be a hunter, and a rabbit never a eagle. 

Work and Tacomb   

I read plenty recently about "dog eat dog", office politics, etc. while I am glad my sector is relatively tamed in "politics" and basically no real "back-stabbing" (since our pay has nothing to do with targets and sales, at least not significantly ), I wonder if those who complained about "politics" are part of the politics.

I realize how much people take things "personally" and do not "speak their mind" and they claim its for self-defense.

Ya, blame the world, they made me who I am. While defintely, survivability will change a person, how many decisions you made is really a "survivability" decision? Will doing what u believe is right or refraining from doing what is wrong cost you your job? Seriously? 

Now, one more level, will that decision cost you that performance bonus? Seriously? Seriously, u think your boss is really blind that he/she will take whatever bad mouths about you at face value, or is that what your boss observed and hear overlapped? Or are you just afraid that it might cost you your performance? 

I am a male prositute, I want money and need my income, I am not an contender for FI, but I still do what I believe, whenever I could, say what I think is right, whenever suitable. Did it cost me my job, my promotion, my performance? 

No, maybe not yet. My boss hint I "low EQ", I am ok. I know where she is coming from. My RO told me to toe the line when a decision is made, that I agree. I dun seek to "change the rules", 

But I am not helpless within the rules, there can be so many creative interpretation of rules? How about being shameless and live in your belief as long as possible until it is not possible (power taken away, or warning given) and be ready to say "I am sorry". That is how I cope... I felt horrible when I failed myself, but less when I am reprimanded for not toeing the line that is counter to my belief. 

My staff sometimes ask me, "like that how? Can meh, sure a not", I tell them do what u believe is the best for your pupils, as long as you can. Then I will apologize on you behalf. 

I know I am the odd one and weirdo. That's why I am planning my succession. I think my organization can only take my harming/ toxic for 5-6 years, before the system caught up with us. So I am passing my helm over slowly, and when the time is right, I will extract myself to poison another place ... LOL.

While, I am not at odds with myself over my core beliefs, I do think my capacity to grow the unit is really limited. Always ready to pass on to the next better player. 

Random thoughts: "beautiful souls"- a thought-provoking book

"Beautiful souls" is a wonderful book, it is cognitively stimulating and emotionally disturbing. It contains 4 true stories about  the courage and conscious of ordinary people in extraordinary times.

Just 1 story, and it stirs me. The story about the police captain who falsified papers so that Jews can stay in Swiss. 

It is not just a recount of what happens but also explanations of why it happens, with modern explanations why people do what they did. 

I remembered LP and I were talking about neutral good/evil. We weighed our options before committing. 

I found that this weighing of options, would properly mean I would have done the opposite, if I was in his shoes. Sending the Jews back to Austria. 

I had a break before reading the whole chapter, (waiting for my wife to finish her facial) and I thought to myself, if everyone is like him, wouldn't the place be swarmed with Jews and become a obvious target of hilter, who already annexed Austria? 

The author addressed this point, the "delegate" or shifting of obvious responsibilities to higher "doctrination", it also attempt to explain why the Nazis were able to do systemic killings. In short, they hid behind "were told to so", "others were all doing it" and there is a "greater reasoning" for all these.

The 3 factors applied also to the other side, who simply followed orders to send back the Jews to Austria. 

There is also one explanation that the "proximity" to the refugees, is why the police captain couldn't say no, while other captains "afraid of moral dilemma" simply delegate the duties of sending teh Jews back to more junior officers. 

The explanations are backed by modern experiments and not just by theories. There is this experiment of effect of "carrot and stick" but the test  was just carrot, and someone need to press the button to send electric shock of various intensity to a actor who will pretend to be uncomfortable, protest, shriek in pain and pass out. There are various variables introduce for the experiments but a high 60% of people would just continue to administer pain even if the actor is at the verge of passing out 

After the police captain was caught breaking the law, not only was he dimissed, experince hardship, but also had his reputations smeared that he was corrupted and receive monetary and sexual favors from those he helped. 

I shall not go into details, but the book classify those with moral courage into 2 groups, one who simply did what is right within his power, and others with conviction to lead opposition (change the world), the police captain belonged to the former.

While I was marveling at what moral courage he possessed and thinking he was angel on earth and happy they history has finally returned his name, the author wrote that the "glorifying" of his deeds decades after he died is yet another example of how he is extraordinary, gave the masses the excuse to delegate responsibility to be good to others within our power. We all could have done the choice under his circumstances, we need no superpower. It was like a big slap in my face and I felt ashamed. It's a bit like how my centuries, China has abused "Confucius" to confuse and enslaved the masses. 

A book that is worth reading. I am glad I picked the book. My paraphrasing of the content might not be accurate, just feel really like blogging about reading it. Pardon me. 

The numbers behind SIngpost

I have said in the comment section in my previous post that I expect Singpost to grow by 10-20%.

So here is how the numbers add up.

Recovery of rental income from SPC mall.

SPC mall rental loss is about 4-4.5 mio annually, if you track the last 3 quarters of loss of income.

When redeveloped, the retail space will double. Not just that, a check at property Guru of rental rate at the nearby Paya Lebar square show psf rental of $25-$27

Even assuming $20 psf for 25000 sqm of retail space, we know the recovery of rental loss will be significant.

Next, the expenses. Depreciation cost has increase due to Logistic Hub TOP, but the savings in expenses might have to materialize. If we look at expenses, the depreciation of Logistic hub will be 5-6 mio annually, so the potential in savings should be more than that to offset it.

Third party warehouse rental expenses at Q1 stands at 35 mio, there is no info on the area of warehouse of the new logistic hub except that it covers 2 floors out of 3. Assuming two-third of the 550k is warehouse space, 360k sft of in house warehouse would already net expenses savings in excess of 5 mio. (Assuming dirt cheap warehouse rate of $1.2 psf is what Singpost is getting now, which i believe is very conservative)

So the cost savings calculation and revival of SPC mall would have almost nett 10% of the growth needed for the underlying profits.

If the Alibaba JV does materialize, which I think it will, then the capital injection can be used to pay down debts or fund further growth. I do think it will materialize not just because management "suggested" it would during the Q4 analyst briefing, but also that it made no sense for Alibaba to ditch Singpost for Lazada, since Indonesia is Lazada's turf, but Singpost's Asia share is less than 20%. It made more sense for it to complement each other. Apparently, the market do not think the JV will materialize and hence the lower valuation and fall in price. If the deal does not proceed, Singpost's shares price might further go down, but that would make it more attractive since the underlying business is still good, unless Alibaba not only decided not to increase its capital in SIngpost and quantium but pull out totally. That scenario is a bit extreme in my view.

If the deal does go through, the market will rerate it upwards again (Alibaba's contracted price to increase another 5% stake of singpost is $1.7), most probably, with possible synergy from Lazada's movement of goods feeding through.

All in all, it seems a rather good risk-reward profile.