Friday, January 13, 2017

Random thoughts: Annual Report 2016 Sillyinvestor Inc

Chairman statement: 
Dear readers, the theme in 2016 is surviving in a volatile world. There are 2 shocker news: first Brexit and next Trump's election. But the market survived and blossom.

We are proud to announce we have grow from strength to strength. The company manage a dividend of $3849 in 2016, from a capital base of about $57000, giving a yield of about 6.5%. This is a 2.5% improvement in yield and 40% increase in dividend.

However, trading profits is flat or negligible. The small profits in 1H was gone as we increase cash by taking a loss of Lippomall.

However, as compared to a year ago, where the vested amount is 15% lower than market value, we now have a equity portfolio that is 3% in the green. As mentioned in 1H intern report, we are going to include cash in the calculation of our portfolio. Hence the total portfolio size increase 13% to 85K, where 35 K is cash.

As a result, there is a drag in total returns over total asset, which is only an return of 4.4%. The return of STI's dividend yield better at 6% with the STI asset value flat. While we did better and improve our performance compared to a year ago, our performance is sub-par and we will continue to improve ourselves.

Outlook:
It is the management's wish to be conservative in the years ahead. We do not buy Trumpocomics. We believe there are many perilous moments in the calendar 2017. We might further increase cash holding beyond the optimal 50% if the price is right for us to further liquid our portfolio. Beyond heightened political tensions, possible trade conflicts, and terrorist risks, the fate of Euro is a question mark if we look at the coming elections of major Euro countries. Of course, we do not pretend to know how the market will react to these event, just like the market rallied instead of falling post-Brexit and Post-Trump.

The sponsor and founder of company, greenrookie is confident of cashflow, pending unforeseen circumstances, and has pledge to continue with cash injection in 2017. As and when it happens, the company look forward to manage the expanded portfolio but will conservative in the deployment of cash into equity.

Appreciation to readers:
This is a year of readers' activism. The management met up with several bloggers and exchange various investment views. Hence, the management has decided to declare a maiden "coffee treat" to future meet-up, if any. Although management is on course, he might be able to do Wednesday or Friday lunch at the Jurong area from 1230 - 2 p.m. LOL.

Operation review:

Dividend chasing:
While the management's main focus is still dividends, management will not hesitate to sell off profitable companies. The worst performing counter is still Sembcorp Industries followed by Lee metals. The best performing counter is Venture.

CM pacific is privatised, and we added YZJ and SIngpost to our portfolio. We view both counters to be company with growth potential for different reasons.

Trading:
We sold M1, Lippomall trust, Sembcorp Industries, ST engineering and Silverlake axis for varying loss and the gain came solely from Cogent, excluding the privatisation profits of CM pacific.

Online Advertisement:
It finally crosses the threshold of $150. Company see this segment as negligible and might stop reporting its numbers. Although readership has somewhat increased compared to a year ago, the company see no future growth drivers in this area since the management after much deliberation has decided to reject attempts at affiliation links.

CSR:
There is no difference to the beneficiaries we are adopting and the sum donated remained the same. With the change in credit card, there might be some temporary disruption to Sasco

Financial statement:


Footnote:
Nil


Thursday, January 12, 2017

Random thoughts: Becoming a student again

Today, as I drive past NTU, I saw the path which I used to jog, saw the Hostel that I used to live and felt like crying. A bit emo, but don't ask me why. The memories just keep flooding back.

It is just a week, and I think I am a even hardworking student than when I am a undergrad. LOL. I really miss the reading. I went back to level 4 of the library, sit beside the window, the actual spot where I used to mug for exams. I already read 3-4 books although I did not completely read them.

Walking around the campus, it didn't change much except for the spanking new F&B block near block 1 of NTU. It is really a time to "smell the roses". Nope, I didn't actually have more time at hand, I still did some work at night, but there is minimal stress.

It felt like it was only yesterday that I was here, but when I look at the pupils at NTU, I thought: how good it is to be young. I am not so sure whether it is coincident or what, but the conversations that I overheard seem to always revolve around money, the salary or the expense or cost of this and that. Didn't remember doing that when I as studying.

I meet aspiring teacher and downright incompetent ones. LOL My teacher could not take off his jacket because his there is degeneration of tendons, yet he teaches passionately.

I miss my pupils quite a lot, but really glad I need not be caught in the scary typhoon of work.

One of these days, I must go eat swensen and enjoy the student's discount! LOL


 





Wednesday, January 11, 2017

Random thoughts: Risk-reward profile by considerations and assumptions.

I am sometimes able to draw parallel in the investing world with teaching and learning. This time round, it is the reverse, I draw valuable insights from teaching and learning that can be transferred to investment.

We have a module on reflection, and suddenly I realize in investing, we made many considerations but seldom do a check on our most fundamental assumptions.

Let's do this:

I consider 
1) YZJ to be a cyclical play.

2) it to be a alpha company that will gain when turnaround happens.

3) it to be reasonably financially strong, unless u totally discount HTM (low debt)

4) it to be a good dividend payer as I wait. (About 4%)

5) the downcycle to be at bottom although I have no idea how long it will last. (Companies went bust, scrapping on ships increased, rates bottoming out) 

I assume:

1) That the turnaround will come and YZJ will benefit

2) The HTM will not turn sour 

3) I am steady enough to av. In when it falls 20%

4) I have the cash to invest further in this counter

5) It will remain profitable even if profits falls.

6) Falling profits will not cause a plunge of share price beyond 30% 

Of the 6 assumptions, I realise I might not be able to do point 4) since I am only 40% cash and if I double down on other down beaten counters. 
(Highly likely)

The turnaround might never come, or when it comes does not benefit YZJ operations or shares price. 
(Unlikely) 

HTM turning sour.
(Likely)

Fall In profits leading to plunge in price
(Likely)

Thinking through such risk and assumptions thinking, it made me wonder what returns is fair enough to take this risk? 

40-50%? I think it's possible. If we take reversion to mean of 5 cents dividend, and a fair yield play of 5% with prospect of dividend growth, $1 is not an demanding valuation with P/B still below 1. Note that when turnaround happens, earning should improve beyond "mean" and the ships valuation will improve too, further depressing P/B to our favor. YZJ payout ratio is historically around 30% although Ren hint strongly it will increase it this year to maintain a decent dividend yield. 

In terms of operation capabilities, they have scale up the tech chain successfully so there are plenty of market segment where YZJ can tap on. 

Then, how about down side?

It makes me wonder what amount of loss is enough to throw in the towel, and what should trigger that call?


The best scenario is price go down around 20%, I accumulate and it rebound. Possible gain, assume this happens - around $3500

The worst is it went down 20% and I accumulate and it went further down 10% and I cut. Loss will be around $1200

This risk reward profile is good enough for me. 

LOL. Sorry I dun do numbers crunching. This is random thoughts series, when u expect 

Saturday, January 7, 2017

Singpost: 2nd catalyst and 3rd catalyst

Singpost has found a replacement CEO. 

This is a CEO with operating expertise in logistic and freight forwarding. A timely change as it move to synergied its accquistions. With this CEO, I hope this pace of accquistions will stop over the next few years. 

The second catalyst has happened. Market is not excited, but at least not disappointed. Singpost has risen intandem with the market 

The third catalyst, will be out in 2 months. Alibaba has a record sale during Nov 11. Amazon also had record sales.

If u read their analysts meeting notes, Mervin has always "hint" that the loss making accquistions in US is for the longer term, and particular the holiday season is often quoted as an opportune window for  ramped up businesses activities.

How much synergy did the alibaba and Singpost alliance bring? Let's explore the following possibilities:

1) Top line grow in high double digit figure and bottom line is in low single digit QoQ, YOY

2) Top line grow in high double digit figure and bottom line is flat.

3) Top line grow is single digit or low double digit and bottom line is flat or reducing 

4) Top line and bottom line both deteriorate. 

Market will only take scenario 1 or better (both high double digit growth) as a positive calayst.

Scenario  2 will most probably cause some downward pressure but I believe it won't be a heavy sell-off. 

A sell-off will most probably happen if scenario 3 and 4 happens.

Personally, If 3) and 4) happens, it's time to say bye bye. Why?

The Singpost logistic hub which is "supposed to" be more productive is up and running, the capex for this and also the Singpost Mall is mostly spent. 

Demand side, Alibaba is doing brisk business globally and SEA is growing too, these revenues should flow through Singpost's avenues. 

If 3) and 4) happens, I can already predict their explanations. They will be 

1) NP affected by loss of revenue from SP mall which will be online soon (who dun know, stop harping)
2) Their acquisitions are for the long term, and their costs management is US entities has ballooned. 
3) Need more investment to able synergy to happen (huh? Then when will u start to harvest? ) 

Personally, if the fourth quarter is no-go, due to whatever reasons, I think I will start to doubt their execution capabilities.

I am penning down so that I dun give myself excuses when it is time to cut loss/ take profits. 

If scenario 1 or 2 does materialize, then I will go on to wait for SP mall to contribute. The final catalyst.... 


Monday, January 2, 2017

随心笔:我的家-黄浦路

坐在我前面的老爸,
吃着晚餐。
我好像回到了童年时光。

我已经不住在黄浦了,
还记得以前巴不得早点搬走。
这里是新加坡的穷人区吧?
至少,我是这么认为。
常常可以看到无所事事的人,
坐在一旁发呆。
不时,也会看到一些人吸着烟,喝着酒。

这里有一件很特别的杂货店,
不只买烟,还卖烟草。
烟草便宜,只不过要自己包,
不过对身体多些害处。

这里卖报纸的摊位,
还卖色情杂志,
不过不知道为什么最近没了。

我的老家,我休息的地方。
看着我老爸在咖啡店吃着晚餐,
我并没有做什么,也没说什么。
不过,就觉得很轻松。

我以前怪讨厌这里,
巴不得马上离开。
现在,看着这里,仿佛看到我的“根”
回到“根”是休息的好办法。

这里越来越有趣,
卖酒的大姐还是在和老伯伯聊天,
有时还会有一点的调侃。
不过,坐在这些老贝贝的对面的,
是他们的老婆。

这里的叔叔伯伯,
一起玩乐器,在咖啡店。
有吉他,还有二胡,还有不知道是什么的鼓。

这里,让我想起以前没有的,
让我珍惜现在拥有的。

这里,让我什么也不想,
放空自己,没有压力地躺着。

这里,让我觉得我可以拥有很少,
但是过得很好。

这里,让我少些贪念。
这里,让我觉得自己很贪心。
什么都有了,却还想要。

这里是我开始的地方。
开始,什么都没有。
结束,什么都带不走。
但是我们都担心还没有走时,就用光了。
所以一直要...希望可以用不完,永不完...

这里,让我回到过去,
让我珍惜现在。

这里,心里是清静的。



Friday, December 30, 2016

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. 

Tuesday, December 27, 2016

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。