Random thoughts: Venture's Q2 crystal ball glazing

The US earning reporting season is almost over. I decided to look at Venture's competitors and customers results to guage the odds of a QoQ improvement in revenue and Gross profits.

It seems like the odds are good.

Venture's closest competitors, Plexus and Benchmark electronics, with overlapping sector of customers, both did well in this most recent quarters. Both register YoY and QoQ growth in both revenue and gross profits. Margin are stable.





It can be seen that almost all segments show QoQ growth, all except Plexus's Networking segment, due to loss of Juniper as a customer.

These 2 companies are closest comparables.

The next closest comparable,Jabil circuit,has a rather big Low mix, high Volume EMS segment,so I thought it is not a direct comparable. Nonetheless, it also shows QoQ growth in both revenue and gross profits but significantly negative YoY growth.

Other peers suggested by Maybank like Langard Precision, Planar system, have different products,Planar system deal with Video systems, Langard Lens. Both are showing QoQ and YoY growth.

Next,the customers. That is tricky. Venture has a total of 187 customers.

Big names like HP, Aigilent, NCR, Waters, Glory, Micros, avago, etc etc, show a mostly improving picture. But oclaro, Veriforne, etc has not report their earning yet, HP is flat, So I will not go into details here. Just a snapshot of NCR prsentation of their retail solution segment (POS). Outlook is also generally positive



NOte their backlog will push revenue to improve end 2014 and 2015. Manufacturing of the hardware might have already taken place.

Ok, if Venture end up having negative QoQ revenue and gross profits, its competitive strength is then ... I will lose some sleep... I used gross profits instead of net profits due to the effect of possible 1-off items and high tax rate. If NP is flat but Revenue and Gross profits are improving, I will be more tolerant.

Random thoughts: teaching my son and teaching my pupils

This blog is kind of trigger by LP post on rote learning. I have been thinking about teaching these days too.

Just a few weeks ago, my MIL told me to sign my son up for CL classes. I said No, she said its just $65, her other daughter's child is going, why not just go. She complained I always play with my son, I am not concerned about his future. I told her I will teach him myself. There are many reasons for this decision, although it is easier just to dump him off a weekend class.

1) I want to very clearly signal that what someone has or do, doesn't mean I have to do it too.

2) Language is acquired and not learned at age of 5, at such, once in a week learning of CL at such young age is a waste of time.

3) related to point 2, I believed spending 1/2 hour every day is definitely more effective than a drop and dump once a week lesson, even if I am less competent than the tutor.

4) I am sure I will focus on the language experience; the playing, the speaking, the authencity of activities, the story books I choose. I dun want drilling of vocabulary or exam skills at age 5. That can come later.

5) it is just 3 weeks, and my MIL commented that my son speaks better now. Of course la, his dad is professional, you know LOL( sorry, I can't help myself, my ego just exploded)

I tried to balance exam skills and language experience in school, and LP concept of rote learning, ( I will define it as regular drill and practice resulting in memorizing) is what I applied rather regularly too. ( rote learning means something else to me)

Rote learning is highly efficient and effective. Efficient because it uses the least amount of time, effective because it pertain to exam skills, and have a high correlation with exam results.

But scoring A means you are a proficient language user? Have you know someone who score A but speak like S***? Language is a tool, but also a gateway to culture, a carrier of emotions. It has authentic uses for communication, written or verbal. The ministry is trying to emphasize "interactive" spoken and written language now, which is the right direction, but the assessment has not shifted yet, given we are all pragmatic, efficient driven humanbots, what do we do? Exam skills practice, how to analyze the passage? How to prevent careless mistakes in your answers, although your answers would have shown clearly you understand, but No, follow the standard way of answering because in the end, it will be marked and graded that way.

A problem based approach to language acquisition would be more meaningful, in my humble opinion. But that would mean there is no standard curriculum, how to grade pupils?

Don't get me wrong, practice and drilling is inevitable. But we do not live in a black and white world.

Do you think there is a magic formula where u can trade/ value invest and make money? No, there is no standard answers, just various methods that work well with your mind and money.

My pupils always tell me, they don't know the answers. I say, try, it doesn't matter if you get it wrong. Remember I told you a method to derive the answer? Just try it, I won't blame you if you get it wrong. It is returned blank, usually by 1-2 hardcore pupil. To me, it is far more serious than not knowing the answer, in life, we never have answers to many things! Why is my wife unhappy with me, what I didn't snag that promotion? It's ok not to have the "right" answer, but we cannot stop exploring!! The pupils who do not try usually get it hard from me. Tell me how to survive outside, if you don't know how to think!

Pupils are more than happy when I gave answers. Quick solution, long term pain. Just like I never agree with 5-7 years stint of principals, before they are rotated out. How to build character of a school that way? Some scholar come and know he only has 5 years to prove himself, what would he do? We all know how focus of the short term gains in the Coporate world lead to. Need me to repeat GFC? Would he do things differently if he knows he will be around for 12 years minimum? You bet. I know all the pros and reasons for that rotation, but if that is the case, why is PAP not adopting that line of thought and is doing well, both internally (still in power) and externally ( people are still relatively well off ). Given how the ministry is trying to run school like the Coporate world ( saw Singapore quality class award on school banners few years ago, good riddance with that! Glad we have a minister that talk about value- centric education), how irony they didn't see the flaws of the Coporate system.

Sorry that I Side- tracked a bit. I took a hard look and reflected on my lessons after my first 5 weeks. Plenty of misses, since I miscalculate the workload and curriculum requirement of my new workplace. That is the easy part, I can easily adjusted and catch up. But the verdict of my review, do more lessons that focus on exam skills. It is still a real world out there, put interest at a back burner for now, CA is round the corner.

I am glad I am teaching my son the way I want it. Nope, say all you want, I am not sending him to language classes yet.

Random thoughts: 35 years has passed...

Just celebrated my birthday yesterday. Yup, it is on the same date as Pusa. Gave me plenty of time to meet up with friends.

When I am at the KTV, my friend asked us:" Do you still remembered what I said was my dream when I am in secondary school?" I remembered doing the same email exercise when I am in university, one of the those silly email survey. It asked me to visualize my life when I am 60 and old...

My friend's answer: to be the best available bachelor, driving a car, enjoying life. He then laments about family life.

My email answer: A lonely single old man, without a loved one, most probable having company with a pet dog.

Both of our realities are different now. Although I might still be lonely come 60, but it is not like I could not find a wife. Yeah, I was so clueless or luckless with relationships that I thought I will never make it...

Another secondary mate wished me 35th birthday through whatspp. I replied: Thanks, how time flies. He agreed, and said its scary.

Looking backwards, many of our "visions" did not pend out, isn't it?

When I am in university, I write poems, talk about philosophy. I thought maybe that will be how I hitch my girlfriend. In reality? LOL...

How about making a projection of amount of money you will have when you are 55? How about a growth compounding rate of 6-12%, whichever you fancy. Its great to envision, but live your present to the fullest now. You might not give a hoot about money when you reached 60...

 

 

Random thoughts: My mental journey with Parkson Asia

Ok. I feel guilty as I penned this.

Remember I blog about Parkson Asia. I bought at 86 cents. I believed it can be a grower. Some short term pains perhaps, but a longer term good company.

When the company fall 4 cents in a single day, from 86 cents to 82 cents, it scare the shit out of me. The dividend yield of 3 plus percent did not provide enough painkillers effect. I sold out.

It became clear, that physiologically the 4% lower limit dividend would require a price of 75 cents.

It hover above 80 cents for quite some time. I key in an alert for 78 cents. It was breached quite soon.

Volume was extremely low, so when I have to make a decision to queue at 74cents or just get it for 75, I choose the later.

Of course, the price went south further. This time round, my mental model is vastly different. The conviction that it's ok, just wait is loud. In fact, I always tried to buy in tranches, I am
Looking forward to get my second tranche with the announcement of FY results, if it disappoint. 65 cents would be the next entry point.

Do note that I am not talking about the merits or lack of in this investment. I am talking about sticking to my plan allow me a piece of mind, and hey, 86cents and 75 cents is not a lot of different given the small amount of shares I bought. But it is a world of different mentally. I now know what I would do to approach other growers theme.

The story remain the same. High cash level, 24 cents per shares will allow it to be in net cash position as it expand aggressively, since the asset light concessionaries model is highly cash generating. The cash level will go down definitely as it expand, and if the gestation period of the new stores take longer, then it's attractiveness will be further reduced. But will this company go the way of loss- making? Highly unlikely as the home turf Malaysia has the biggest share of revenue.

Story the same, but mental strength different, because of the uncertainty of not following my own plan. The earlier is panic and unsure, this latter is calm ... Until the next storm

Random thoughts: To copy or not to copy

I remember when I was in secondary school, my CCA took up a lot of my time. For 4 days a week, we trained after school till around 7 p.m. (I am not kidding), and for days without my CCA, I would go play basketball or videogame at my friend house.

There were times when I could not finished my homework. In fact, although I was in a top class in a very "neighbourhood" school, none of my classmates except the girls were hardworking. So what did I and my buddies do? We copied the girls' work. When the girls couldn't do it, we told the teacher to go through it.

That is why I find it bewildering so many have problems handing in homework after all the scolding, meeting of parents. Talk about creative solution.

When we copied, we copied and tried to understand, it is actually a short-cut way to learning, the girls didn't seem to mind then, so kind and innocent. We laterally formed copy groups. We did well in our exams. Heaven is blind? Did I hear you say?

When I went to junior college, which I never thought I will make it, I decided to "turn over a new leaf" I stopped copying. I insisted that I do it and learn it the orthodox way. My grades suffered greatly, whereas my friend simply continued to just listen and copy what the teachers write on the board, I tried to figure it out myself, ended up I learned less than my friend. I am too stubborn for my own good. I couldn't figure it out and didn't concentrate when my tutor is re-teaching, double whammy.

It is much later in life, when I heard the concept of copyright. Nah, you cannot take the shortcut, the creators will eat grass. It is the case for some start up, for big corporation like Disney, the copyrights allowed them to eat abalone every meal.

Now, come to trading/ investing. There is no copyright issue if you just buy what Warren buys, or what you favorite "zai qiu" (steady)blogger buy. There is no issue of copyrights.

Convention wisdom says, do not copy from others. There are good reasons why. I took such a long time to figure out the balanced way.

When we are in school, when you copy, do you copy from a single pupil or from many people?

Do you copy all the questions and steps or do you cherrypick what you want to copy?

Do you skip steps/workings unless you totally understand how it work?

SO you copy from a guru, scholar, or do you copy from someone who you know is smart enough to get the answer right and will not "bao toe" (betray) you if you are questioned by the teacher for copying. "We discussed the question and did it together" will not work if you copy from an guru.

Do you insist on DIY on every piece of homework, thinking self-discovery is the only path to learning?

Do you copy every homework? Or you copy when you have difficulty managing your time, and have difficulty in certain topics. Do you understand what you are copying?

Apply these to investing, do you see some similarities in the universal rule of copying? Seem like I am more intelligent when I am in secondary school. hahahah

Random thoughts: My new workplace

Given that I am still in the same sector/ industrial/ department. I always thought how different can my new workplace be. I also mentally prepared myself that since I decided to step out of the comfort zone on my own, even if I leaped into a sea of fire, I will just have to learn to survive in the sea of fire.

How wrong was I.

It is so refreshingly different. Given we have the same goals, targets and outcomes for the sector, I am rather surprised of the amount of free time I have here. I even have the time and energy to buy a new book "the 7 habits of effective people" to read. I know 25 million have read it, but better late than never. 

My new boss told me that she arranged it that way so that I can ease into the culture and not be overloaded at the start point. I appreciated that.

What I appreciated even more is how close we are at the core of our business here. I really feel like doing what I am supposed to do when I signed up for this job at the first place. And my clients? Wow, I didn't know clients can be so different too. I love them. Innocent and pure. Perhaps not as achieving as my previous workplace, but hey, this is just the very beginning of their journey, who says a head start means you win the race.

I also felt nurturing as a supervisor, first time in my life. Although I do not know if the feeling is mutual, or they detest my style, at least, here I go to the "worksite", observe the work processes, gave honest and sincere advice. I feel they appreciate it too. In the past, I am so busy at my own worksite, that I do not even have time at my office. 

The tough part is the system overhaul that I see will come soon, and the retirement of a competent senior staff. Lets hope I learn enough before she leave.

I set goals to achieved all that I wanted during this window, at least as much as possible, so that when the mad rush comes next year, I will not feel a tinge of regret. I certainly hope I will be able to drive at 4th gear or even go into overdrive when the need arises. I am afraid my engine will fail me since I am now only driving at third gear.

Other intangible benefits include more patience at home, and  energy at home. Life should be like this. The ying and yang. My past allowed me to enjoy my present. So if future turn sour, this it has the potential to improve. 

 

 

Random thoughts: My route to Rome

There are more than one route to Rome. I think I have found mine. I am not sure if it lead to Rome, but I am quite sure I am going to take the path.

One paradigm shift:
Stop worrying about the value of my portfolio. Not that it is not important, but the cashflow of dividends and the robustness of underlying business is more important.

Second shift:
Only look at companies with yield of at least 4%. If u expect growth, 4-5% is ok, if u expect flat or zero growth, at least 6% will be appropriate.

Third shift:
Only buy companies that will survive the next downturn and emerge stronger. Trading of companies that are mispriced is permissible with 2 years horizon. Expect such counters to never recover, and be ready to take the risk, and be nimble. Such counters should yield more than 8% to justify the risk.

4th shift:
Do yearly reinvestment of dividends, there is no need to time the market for correction or bear.

5th shift:
Other savings go into cash. Only invest further with new capital injections when cash form more than 40% of portfolio, or
When market correct 10-15 % ( 30% of cash can be a activated )
When market correct 15 - 25% ( up to 60% of cash can be used)
when market correct 30% - 40% ( Up to 100% of cash can be used)
When market correct 40-50% ( cash backs savings from 2 of my endowments plans can be used)
More than 50% ( CPF money can be used )

Keep expanding radar...