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Showing posts from November, 2017

What I learnt after 1.5 years of investing

It is that time of the year whereby people start reflecting what they have done for the past year, and their investing journey. Due to my usage of dual brokers (poems and maybank) and the inability to automatically track dividends and transaction costs via excel, I scoured the blogs of investment bloggers and came across sgxcafe, a nifty tool to track transaction costs and dividend yield all in one convenient package. My capital gain in the short run is not stellar for this year as expected for a long term buy and hold strategy.This is to be expected. There is always a sinking feeling when your portfolio is in the red rather in in the black, but the dividend gain and the winners managed to cover for the short term losers and I still made a consolation prize profit. At least I kept myself from actively buying and selling and incur more transaction costs, which will effectively had eroded the meagre earnings I made. Thank god I am not a fund manager! I would have lost my job for failing…

Development of Fintech and Bitcoin

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Fin-tech and disruptive technology is currently one of the hottest discussed topic. While other countries are moving towards regulating or outright banning cryptocurrency, Singapore is aggressively positioning itself to be the industry leader in this disruptive technology. Now, project Ubin is announced and significant support is given by the government and major financial institutions to support this cause. It is indeed an exciting yet troubling development that will affect how banking operations will function in the future. My understanding of bitcoin is of 2 discreet components. I will be focusing on the technological part followed by the valuation part.

The technology portion of bitcoin's distributed ledger is top notch. Operating from my circle of competence, it is a way to move information from one organisation to another in a transparent way whereby everyone can see the evidence of the movement, but the information is encrypted so that no one can know the exact contents, me…

Law of One Price

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I discovered a market mispricing of a company named Tianjin Zhongxin while scouring through the internet and blogger posts. One seemingly promising pharmaceutical company dual listed in China and Singapore, apparently has arbitrage opportunity between 2 markets.

I am not sophisticated enough to buy a share in Singapore, do a cross border to Hong Kong and trade it via Hong Kong stock connect to earn arbitrage profit from TJZX Shares. (Not sure if is it even allowed) Nor am I brave enough to do a proper arbitrage position by longing in Singapore and SHORTING in China Stock connect. (I believe china does not allow shorting of most shares).  Shorting is a no go for me as you incur limited profits and potential unlimited liability!!! I will not be able to execute a convergence trade strategy explained by Benjamin Graham, but there is definitely upside potential for longing TJZX SG.
https://en.wikipedia.org/wiki/Convergence_trade

I am going to do some research regarding arbitrage profit o…

Convergence trading

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In economics, there was a widely accepted theory named the Law of one price, whereby the same good should be sold at the same prices, if you remove the transportation, for-ex and other administrative and misc costs. The popular Big Mac index is a popular illustration of this concept although its credibility is also disputed
https://en.wikipedia.org/wiki/Law_of_one_price
https://en.wikipedia.org/wiki/Big_Mac_Index is a so called popular

Surprisingly, there is little documentation about convergence trades in academia finance, despite sharing common roots. Economics explaining why money functions and how it flows, and finance tracking its actual movements and on the practical applications. My curiosity is piqued when I was made aware of HSBC HK/ HSBC UK, TJZX China A and TJZX SG, and this recent discovery, HKL USD and HKL GBP. Theoretically, in efficient financial markets, the law of one price should hold, and triangular arbitrage should eliminate pricing anomaly. In actuality, the gap i…

Accounting Fraud

http://fifthperson.com/confessions-of-an-s-chip-ceo/
Textile companies in China (cyclical company)

This story has been circulating around since April 2009 but we thought it was such a good read and contained so many valuable lessons that we decided to share it once more here. The story below is from an email purportedly written by a former S-chip CEO.
If you’re not already familiar, S-chips are Chinese companies listed on the Singapore Stock Exchange and notorious for corporate scandals including embezzlement, forgery and accounting fraud.
While it’s wrong to assume that all S-chips have accounting issues, this story (along with some juicy bits about KTV bars and nightclubs) reveals how innocent investors are sold the investment potential of an S-chip, invest their hard-earned money, only to later discover that the stock is worth nothing.
The authenticity of this story can’t be proven but it still highlights the importance of always being on your guard against characters who ar…

Chews

Chew is an exciting story, abeit a boring business. This stock was in my watch list for a very long time due to its easy to understand business, impressive profit margin, low debt and good cash flow. I held off buying the stock as it had just recently divested it's chicken farm in lim chu kang, and is holding on a huge pile of cash. It's pe ratio appeared cheap but I wanted to monitor it's usage of its capital and future developments before cashing in. A monopoly in eggs in sea cucumber in Singapore counts very little as there are much more cheaper alternatives in neighbouring countries such as seng choon in Malaysia. The nature of Singapore's high land cost and poor economics for poultry rearing made its long term economics highly uncertain. Sure, dangui and codecyps eggs sound cool, but there are not a required input in most dishes, and from a cost perspective they are simply unable to compete with rivals with lower costs of production. Unfortunately, speculators hav…

ETF Investment strategies by Aniket Ullal

ETF Investment strategies by Aniket Ullal

1) Transition from traditional to emerging mindset
Traditional Emerging Investment Approach Passive vs Active Trad-able beta Asset Allocation Usually by institutional and sophisticated investor Multi-asset allocation available to all Fund and security selection Undervalued stocks and 5 star mutual funds Find targeted ETF (sector-ail. Asset type, specific themes, country investing) Execution Quarterly reporting, end of day NAV Daily transparency, intra-day liquidity
Transition from commission based to fee based advisory Informational advantage is no longer monopolized by specific brokers and fund managers. Research is widely available and any investors can access the same information. The supposed confidence in the expertise of brokerages and financial institutions is eroded by the 2008 subprime crisis. High commission fees does not lead to beating the market. Actively managed funds often fail to beat or even match index retu…

Portfolio 2017

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Stock NameModeQtyAvg Cost Price
Total CostPercentage ASCENDAS-ITRUSTCSH25001.13ASCENDAS-ITRUST2,812.5020.5554540471ASCENDAS REITCSH10002.25ASCENDAS REIT2,250.0016.4443632377HYFLUXCSH40000.57HYFLUX2,260.0016.5174492965RAFFLES MEDICALCSH20001.31RAFFLES MEDICAL2,610.0019.0754613557SINGTELCSH10003.75