Wednesday, February 29, 2012

Which are harder - Selling a losing position or Exiting a winner

Investors need to realise that the way our human brain is wired makes selling a losing position as difficult as exiting a winner. So which do you think is more difficult....or are they both as equally difficult..

We as humans are naturally greedy and for everything we want more. "The more the merrier" as many people say. When a stock is rising (especially in a bull run), you feel good about the stock and this heavenly feeling and optimism is percolating. Even if your original target price on the stock is reached, it is natural to not sell and look for bigger profit. Along with greed is the thought process of why end something when the going is good; why not ride the train and see where it takes us. A friend once asks me this question: "Assuming you buy a stock at S$0.95 and then sell the same at S$1, you make a 5 cent profit. But what if the stock goes on to do well to S$1.20, does the 20 cents difference counts as a "loss" to you?"

Selling a losing position is never easy either. Selling a losing position is seen by many and even for oneself as a sign of giving up. No one wants to lose and as long as you don't sell, you have not "lost" yet as some may proclaim to be. The idea to holding on to a losing position is the hope that it will bounce back one day and you may see light at the end of the tunnel. But what if it don't. Yet, what if it does bounce back one day and you have sold the stock at a loss.

Management, company's goals and your strategy may change over time. So it isn't hard to figure how exiting a winner or selling a losing position may works for you. Across your investment journey thus far, have you ever came across such experiences before?

Thursday, February 23, 2012

~Added Fraser CenterPoint Trust (FCT) to my Portfolio~

I have sold off 17 out of my 23 lots of YangziJiang shares a couple of days ago, given that it has run up quite a lot these couple of days. The results are due in 1 March 2012 but just feel that I needed to get out of this shares as soon as possible as the market outlook is not very stable and I had majority of my funds locked in this particular share.

I also sold off 1 lot of my CapmallTrust and made a little profit.

Having enough funds, the bear came in these past two days which allow me to obtain FraserCenterPoint Trust (FCT) today at an attractive price. At current price, FCT yields about close to 6% and being a strong REITS play, I am very satisfied with the purchase.

Updated Portfolio - 23 February 2012

CountersNo.of LotsAverage PriceTotal Value (SGD)Dividends collected to date (SGD)
CapitalMall Asia201.4328,594.00255.00
ST Engineering82.8222,590.400.00
CapMall Trust11.7051,705.000.00
Fraser Centerpoint Trust101.45014,500.000.00
Unit Trusts--4,500.000.00

ST Engineering Results - 23 February 2012

Singapore, 23 February 2012 - Singapore Technologies Engineering Ltd (ST Engineering) today reported revenue for financial year ended 2011 (FY2011) of $5.99b, compared with $5.98b a year ago. Profit before tax (PBT) registered a 4% growth to $655.2m, while net profit grew steadily by 7% to $527.5m.

In the fourth quarter, Group's revenue of $1.54b was higher than that achieved in 3Q2011 by 11% or $150m. Except for Marine sector, all sectors recorded higher revenue compared to 3Q2011. Marine sector's revenue of $91m was 64% or $164m lower, largely due to the reversal of Shipbuilding revenue in 4Q2011 following the Ropax contract termination. Group's PBT of $184.3m for 4Q2011 was 11% or $18.4m higher than that achieved in 3Q2011. Land Systems and Marine sectors reported higher PBT, while Aerospace and Electronics sectors recorded lower PBT.

Compared to 4Q2010, 4Q2011 revenue and PBT were comparable while net profit was higher by 6%.

Higher EPS and Higher Dividend
Earnings per share (EPS) grew by 7% to 17.28 cents and economic value added increased by 10% to $405m. Return on equity remained high at 29.9%. Cash and cash equivalents and short term investments totalled $1.77b and advance payments from customers stood at $1.27b.

The ST Engineering Board of Directors is proposing a final dividend of 12.50 cents per share, consisting of an Ordinary Dividend of 4 cents per share and a Special Dividend of 8.50 cents per share. Total dividend amounts to 15.50 cents per share, including the Interim Dividend of 3 cents per share paid out in September 2011. This translates to a dividend yield of 5.07%, computed using the average closing share price of the last trading day of 2011 and 2010.

"The Group registered steady performance in FY2011 over FY2010. While Revenue was flat at $6b, PBT increased by 4% and Net Profit grew by 7% to $527.5m. The performance reflects the Group's resilience and its ability to navigate the highly uncertain and volatile economic environment. The Group succeeded in securing more contracts and ended the year with a record high order book of $12.3b.

Barring unforeseen circumstances, the Group expects to achieve higher Revenue and PBT in FY2012 compared to FY2011." ~ TAN Pheng Hock, President & CEO, ST Engineering

Full Year Business Highlights
For the full year, commercial sales accounted for 59% or $3.5b of revenue. The Group grew its order backlog to a record high of $12.3b, an increase of 7% over FY2010 order backlog of $11.5b. $3.9b of the $12.3b order backlog is expected to be delivered in 2012.

With revenue of $1.9b, the Aerospace sector accounted for 32% of Group's revenue. The Electronics sector contributed 25% to the Group based on its revenue of $1.48b, which grew 7% year-on-year. Land Systems sector contributed $1.48b or 25% of Group's revenue, while the Marine sector's revenue of $876m accounted for 14%.

All business sectors achieved significant milestones over the last year.

Aerospace sector was ranked the world's largest maintenance, repair and overhaul provider for the 5th consecutive time by leading trade publication, Overhaul & Maintenance.
Electronics sector entered the high-tech satellite industry offering comprehensive suite of satellite earth observation solutions and services. Its US subsidiary, iDirect Government Technologies, received the US government's approved Proxy Agreement to pursue classified Government and military contracts.
Land Systems sector, through LeeBoy India, stamped its mark on the Indian road construction sector with the launch of its 785i Motor Grader that was engineered and manufactured in India to international standards based on its access to technologies of its US subsidiary, VT LeeBoy.
Marine sector gained a stronger foothold in the Offshore Support Vessels market securing contracts for 12 vessels.
In 4Q2011, the Group announced new contracts worth over $1.26b for its Aerospace, Electronics and Marine sectors. This included the shipbuilding contract to build eight Offshore Supply Vessels for Hornbeck Offshore Services; several naval contracts, and commercial shiprepair and conversion contracts; as well as a LRT communications contract in Taiwan. It also included the five-year contract that ST Synthesis, its facilities management arm secured to provide facilities maintenance services to the Singapore Ministry of Defence. In addition, its US subsidiary, VT Miltope announced that it has the potential to earn up to US$250m (about S$323.7m)* over five years on its teaming with General Dynamics C4 Systems on the Common Hardware Systems-4 programme.

* As this is an IDIQ contract, the amount is not recorded in the order book.

Thursday, February 9, 2012

Which stage have you reached at this point in life?

To All dear friends, which stage have you reached at this point in your life? I think it is fair to say that all of us have gone through one kind of stage or another at our point in life. Others may stay in a particular stage for a long period of time while others move on quickly on to the next stage in the ladder. As we move up the ladder, we went through and accumulate experience after experience and we become stronger each time.

As my good friend have posted in his website, "Success is the result of good judgment. Good judgement is the result of experience. Experience is the result of bad judgment". Do not be therefore afraid of past failure as it will only make you stronger.

At some point in your life however, you may want to move up the ladder and say "I CAN DO IT" and "I WILL DO IT". Only action and determination bring result, not words only. Afterall, together we all aim for one common goal - i.e "YES I DID IT".

"I Won't Do it"
"I Can't Do it"

This is the weakest sign. This is usually a sign of a teenager ranging from 13 to 18 years old. If you still find yourself at this stage in your life, you may want to look at yourself in the mirror and ask yourself why are you at the bottom of the ladder. Push yourself to move out of this stage and after that everything will become much easier.

"I Want to do it"
"How do I do it?"
"I'll try to do it"

This isn't the strongest sign. Having said that, I personally feel that this is the most important stage as the transition from the "I can't do it" to asking questions like "How do I do it?" meant that you want to be successful and are in the midst of finding the solution to your problems - Good sign def :)

"I can do it"
"I will do it"

This is the confidence sign. If you are at this stage in the ladder, you may want to give yourself a pat in your back. At this stage, you may have already found the answer you are looking for and are determined to put things into action. This is the path to success.

"Yes I did it"

This is the ultimate goal for everyone. While this may be subjective for different people with different goals, it meant that you have completed the stage in your ladder and perhaps are willing to share it with others who are still climbing the ladder. Bill Gates are a good example of such.

Wednesday, February 8, 2012

CapMallAsia & YangZiJiang did us proud today!!!

Today CapitalMallAsia and Yangzijiang did us proud. And I would like to dedicate this post to people who are vested with either of the stocks.

Today was the first time CapMallAsia surged through ahead of my average price which makes me overwhelmed and surprised (that they are up 10% at one point near the closing bell). With results coming up this Friday, hope that CMA could continue to surge ahead to greater heights tomorrow and Friday.

As for Yangzijiang, it is currently the only stock lagging in my portfolio and by a miles too. Hope that it is able to surge ahead and close the gap nearer to my average price.

Good day overall : )

Saturday, February 4, 2012

"Why would I trade my asset with a liability" - JP Morgan CEO

A young and pretty lady posted this on a popular forum:

I'm going to be honest of what I'm going to say here.

I'm 25 this year. I'm very pretty, have style and good taste. I wish to marry a guy with $500k annual salary or above.

You might say that I'm greedy, but an annual salary of $1M is considered only as middle class in New York.

My requirement is not high. Is there anyone in this forum who has an income of $500k annual salary? Are you all married?

I wanted to ask: what should I do to marry rich persons like you?

Among those I've dated, the richest is $250k annual income, and it seems that this is my upper limit.

If someone is going to move into high cost residential area on the west of New York City Garden(?), $250k annual income is not enough.

I'm here humbly to ask a few questions:
1) Where do most rich bachelors hang out? (Please list down the names and addresses of bars, restaurant, gym)
2) Which age group should I target?
3) Why most wives of the riches are only average-looking? I've met a few girls who don't have looks and are not interesting, but they are able to marry rich guys.

4) How do you decide who can be your wife, and who can only be your girlfriend? (my target now is to get married)

Ms. Pretty

A philosophical reply from CEO of J.P. Morgan:

Dear Ms. Pretty,

I have read your post with great interest. Guess there are lots of girls out there who have similar questions like yours. Please allow me to analyse your situation as a professional investor.

My annual income is more than $500k, which meets your requirement, so I hope everyone believes that I'm not wasting time here.

From the standpoint of a business person, it is a bad decision to marry you. The answer is very simple, so let me explain.

Put the details aside, what you're trying to do is an exchange of "beauty" and "money" : Person A provides beauty, and Person B pays for it, fair and square.

However, there's a deadly problem here, your beauty will fade, but my money will not be gone without any good reason. The fact is, my income might increase from year to year, but you can't be prettier year after year.

Hence from the viewpoint of economics, I am an appreciation asset, and you are a depreciation asset. It's not just normal depreciation, but exponential depreciation. If that is your only asset, your value will be much worse 10 years later.

By the terms we use in Wall Street, every trading has a position, dating with you is also a "trading position".
If the trade value dropped we will sell it and it is not a good idea to keep it for long term - same goes with the marriage that you wanted. It might be cruel to say this, but in order to make a wiser decision any assets with great depreciation value will be sold or "leased".

Anyone with over $500k annual income is not a fool; we would only date you, but will not marry you. I would advice that you forget looking for any clues to marry a rich guy. And by the way, you could make yourself to become a rich person with $500k annual income. This has better chance than finding a rich fool.

Hope this reply helps.

If you are interested in "leasing" services, do contact me.

J.P. Morgan CEO

I chanced upon this article in the net and found it interesting. I guess this world is full of miss and match and as long as there are willing buyer (demand) and willing seller (supply), there will always....always be a "trade" made :P

Thursday, February 2, 2012

Added CapitalMall Trust into my Portfolio

2 February 2012 - I added a small 2 lots of CapitalMall Trust into my portfolio. With Iluma renovation, JCube and the development of Jurong WestGate to be completed shortly, looks good to load for future upside potential. Will look to add further should there be any further downside. At 1.705, hopefully it'll be a good entry price :)

Updated Portfolio - 2 February 2012

CountersNo.of LotsAverage PriceTotal Value (SGD)Dividends collected to date (SGD)
CapitalMall Asia201.4328,594.00255.00
ST Engineering82.8222,590.400.00
CapMall Trust21.7053,410.000.00