Random thoughts: value of outsider view

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

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

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

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

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

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

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

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

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

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

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

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

Asian Pay TV Trust- hindsight analysis

I'm Vested interest through my wife portfolio

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

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

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

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

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

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

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

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

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

But according to the analyst report, 

"Uncertainty on Taichung expansion

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

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

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

My guess are:

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

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

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

随心笔：随心笔

人间地狱，由心魔生。

心魔滋润与逃避。

越逃，越困惑，

就像挣扎的昆虫，

引来蜘蛛。

网，逃不掉。

生命之网，你我都逃不掉。

平静。需要时间。

时间是公平的，

每个人都有。

虽然你我寿命不同，

但没有人比较长短，

只在乎幸福与否，

只希望最后的几年不会太苦。

给自己时间，

平静的心需要时间。

慈悲，可能是苦的。

自私，可能是甜的。

心魔，如毒蛇，

越美越毒，

越甜越上瘾。

苦啊！别逃。

给自己时间。

跑一跑，

累了，知道逃也没用。

逃，让自己觉悟。

面对，让自己平静。

时间，好好掌握。

Picture source:

http://apachennov.deviantart.com/art/Run-away-from-amusements-103657149

Random thoughts: Downtime on a cruise

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

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

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

I had wanted 3 things from

This cruise. 

1) good food

2) balcony time starring into the sea and quality reflection time 

3) family time packed with activities 

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

It turns out the food from both main dinning areas suck. I was told

By several relatives that the food is exquisite and really nice. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Preparing for war ... 

Random story: The dark teacher (Part2)

Part 1 here

http://sillyinvestor.blogspot.sg/2014/12/random-stories-dark-teacher.html?m=1

----------------

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

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

He didn't realise it was so tough

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

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

"I have another shape here" said the soul.

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

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

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

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

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

The dark teacher sigh... 

So many shapes, so much effort. 

What makes the shape? 

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

There is nothing to search and everything to find 

Random thoughts: Choice

Life is full Of Choices.

Making choices at every day, and if we include mental choices, we make choices almost every minute.

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

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

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

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

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

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

And how I had taken things for granted. 

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

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

We dun have a choice as we might all

Fall sick, lose our job or die. 

Our way of life is a choice.

There is no better choice. 

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

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

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

My choice is to value add as my position allowed. 

No choice is a happier choice for me. 

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

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

Pic Source: duoban

Business Analysis blind spots

This is a consolidation of "mistakes" I made.

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

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

1) ST engineering

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

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

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

2) accordia golf trust

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

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

The biggest blind spot is the low margin for operating numbers during "ok"

Time is recipe for disproportional weak numbers for weaker time as I believe there is no significant buffer from the minimum fixed expenses. 

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

3) Cogent holdings

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

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

The good thing is it's OCF is getting stronger