I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Thursday 31 March 2011

Keppel T&T to sell 35% stake in Wuhu Annto for S$52.6m


Keppel Telecommunications & Transportation Ltd (Keppel T&T), through its subsidiary, has entered into a conditional agreement to sell its 35 per cent stake in Wuhu Annto Logistics Co Ltd (Annto) to Midea for net proceed of about S$52.6 million.

Keppel T&T said Annto is looking into the expansion of its manufacturing business, which does not fit into its businesses.

Keppel T&T intends to use the proceeds to grow and strengthen its core businesses of integrated port logistics and third-party logistics in target Chinese markets.

The book value of Annto was S$31.9 million on 31 December 2010. It is expected to result in a net gain of about S$20.7 million.

Q1 FY 2011 Performance Report : Down -13.6% QoQ

Read? Last Report: Full Year 2010

Year Goal Hit Rate

(In 2003, I set some bullish progressive year goals from 2003 to 2011 and 2011 Year Goal is 76.8% of 2010 Total Salary including all CPF contributions. Quite a big goal to achieve!)

Year Goal Hit Rate fell by -13.6% from 19.2% in Q1 FY 10 to 5.6% in Q1 FY 11. 

The poor goal hit was due to lack of new trading positions in the quarter and rolling forward the realization of profits to next quarter for Olam and Noble.

Active Investing Performance

Since Nov 08 after I have given up active contra trading and revised my active investing/trading strategies.

Performance indicators are as follows:

Historical ROC per Trade Distribution

Going forward, I think the days of high double digit ROC are likely to be over so I must be happy to get high single digit ROC.

Shocking Truth on some Stock Gurus! (2)

Just For Thinking ...

Read? Shocking Truth on some Stock Gurus!

I realized that there are actually two groups of Stock Gurus.

Really Good Stock Gurus

  1. They move on to Private Equity or Investment Management to become Money or Private Fund Managers.
  2. They typically charge 1% management fee and 20% performance fee with high water mark.
  3. They don't anyhow make money from men-in-the-street. They earned their fee from accredited investors.
An "accredited investor" is defined as:

(a) an individual:

(i) whose net personal assets exceed in value S$2 million (or its equivalent in foreign currency) or such other amount as MAS may prescribe in place of the first amount; or

(ii) whose income in the preceding 12 months is not less than S$300,000 (or its equivalent in foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

They called themselves Stock Gurus

  1. They become Master Trainers who can teach you the easy way to make money from the stock market.
  2. They charge only $X,XXX but made their money from the not-so-rich retail investors, sometime from retired uncles and aunties and even NSF men.
See the difference.

Another dose for Mr. SMOL. Hope you like it again. LOL!

Wednesday 30 March 2011

Sembawang Shipyard signs long-term ship repair deal with Canada's Teekay


Sembawang Shipyard, a subsidiary of Sembcorp Marine, has signed a long-term ship repair contract with Teekay Marine Services, Canada.

The contract is for the provision of ship-repair, refurbishment, upgrading and related marine services for a fleet of 137 ships.

Sembawang Shipyard can expect to refit and/or upgrade of 6 to 8 Teekay vessels each year.

Teekay Marine Services is a subsidiary of Teekay Corporation, an international leader in energy shipping which serves the world's leading oil and gas companies.

Second Pillar of Wealth

Just For Thinking ...

For most of us in the working class either as employees or self-employed, our First Pillar of wealth most likely to come from exchanging our precious time, energy, knowledge, and skills for money. Some may supplement it by taking on more part-time jobs.

The Second Pillar of Wealth is most likely to come from exchanging our money, financial and investing skills to Grow money.

You may want to make a definite commitment to spend some of your precious time and energy in building up this Second Pillar of Wealth bit-by-bit, month-by-month and year-by-year.

Acquiring financial and investing skills is not Rocket Science or Nuclear Technology, most of us can do it and after 15-20 years when you look at the size of your Second Pillar, you don't regret it. That is the truth. It is up to you to believe it or not.

Tuesday 29 March 2011

A matter of common sense

MIT's Franco Modigliani Professor of Financial Economics Stephen A Ross gives his take on understanding the 2008 financial crisis. By Genevieve Cua

PROFESSOR and finance professional Stephen A Ross has little patience for the blame game that ensues when the topic of the 2008 financial crisis comes up. In conversations, presentations and articles, brickbats are typically hurled at investment bankers, rating agencies and Wall Street in general who collectively 'fleeced the unwary'. But Prof Ross is having none of that. 'I'm getting tired of talking about the crisis. It's extremely frustrating because there are all the things I think I should know about but I don't . . . There is all the talk about how Wall Street fleeced the unwary. This is a complete misunderstanding of how financial markets work. Markets are there to protect the innocent. Competition is the best protection for the innocent, but nothing protects the innocent from themselves.'

Prof Ross is widely recognised for having pioneered the agency theory and for seminal work on models to price derivatives. Both areas of research are arguably germane to understanding the crisis. The agency theory, in particular, looks into the ubiquitous relationship between principals and agents - as, for instance, between a company and its employees - and hot-button issues such as executive compensation and conflict of interest.

At a recent talk in Singapore organised by the Centre for Asset Management Research & Investments (Camri), he tells his audience of a city manager who invested heavily in mortgage backed securities which subsequently bombed.

'(The manager) said, 'I didn't understand the product; the investment banker told me to buy.' I don't care where you're from. Do you think the investment banker is an angel from God who walks into your door? You have a world where you can get 5 per cent from a government security and someone walks in saying 'I can give you 7 per cent risk-free', and you buy it.

'You can't plead innocent after the fact; that's nonsense. You are the one that's greedy. You thought you could get something for free. The following is true: If it's too good to be true then it's not true. The only way to get more return is to take more risk. Sometimes, people twist that around and say - if I take more risk, I'll get more returns. It doesn't work that way. If there was a guarantee you'd have more returns, there wouldn't be risk.'

So derivatives have a bad rap. But there are trillions of dollars in derivatives out there. Some other people think they're very good. You can't run some businesses without them, because you'll take interest rate risk, equity risk. You don't want those risks. You want the value and you're willing to lay off some of the risk and return to produce a better outcome for you. Even the government recognises that it can't stop this and shouldn't. I hope they have the common sense to let that market continue as it is.

He is sceptical of efforts to raise financial literacy, however. Among investors, such lapses in judgment are a failure of common sense, he says. Can common sense be taught?

'We've gone from a society where if you have a problem, you bear some blame, to one where we say, 'They did it, but I didn't do it'. Before the crisis, returns on capital for taking risk were very low. If you increased risk, you had a very little increase in yield. In the effort to get higher returns, we pushed that too far.

'There are a couple of reasons why that occurred. One is the agency situation: People making decisions were rewarded on a short-term basis for a higher return. Another was that people suspended belief. I don't know if it's naivety, but I do think it's a failure of common sense.'

He recounts the experience of his late brother-in-law, a successful surgeon. He was offered property some years ago, by an individual who had subdivided it into four plots. The attraction was that a highway would ostensibly be built near the land. He bought one of the plots; the seller would himself keep one. 'I said, why did you do this, you don't know this man. 'I listened to what he said - it was very clever.' I said to him, I don't think you understand what you're doing at all.

'If the opportunity is so good, why is he giving it to anyone? If he doesn't have enough money to capitalise on it himself, what kind of record does he have as a businessman? Just ask common sense questions.

'It turns out that the highway was built and the land rose enormously in value. But what the seller did was he kept one for himself and sold three. He kept the one next to the highway, and three are in the hills behind. You know you're not going to win. Do you teach that in school? I don't think so. We all make mistakes. But it's a serious mistake when the institution that takes care of people's welfare and pensions makes mistakes like that. The people who run those institutions - they are the greedy and selfish ones.'

Prof Ross's roll call of achievements in financial research is almost daunting. Based on his profile at the Massachusetts Institute of Technology (MIT), where he is the Franco Modigliani Professor of Financial Economics, he is credited for having invented the arbitrage pricing theory and theory of agency. He was also co-discoverer of risk neutral pricing and the binomial pricing model for derivatives. Models developed by him and his co-workers are standard tools in major securities trading firms. That's in addition to numerous awards for financial writing and options research.

Today, he says sheepishly that he manages his time badly. Still, he is committed to teaching, which he calls his 'fun time'. He teaches one course at MIT during the fall, taking under his wing less than a handful of doctorate students in finance. Speaking about them brings a gleam to his eyes. 'I love my students; they've turned out to be spectacular . . . Several of the greatest professors in the world were my students; how can I not be proud? The biggest thing you can do for students is to get out of their way. They can figure out what to do. You encourage them but don't interfere with them. Otherwise, there is too much of a tendency to motivate them to do what you want them to do, and not what they want.'

Yet, it is not just in academe that Prof Ross is making his mark. He has also parlayed his derivatives expertise into what appears to be thriving businesses. He heads Compensation Valuation, which specialises in valuing complex option contracts and provides valuation services for companies seeking to expense employee stock options.

He is also principal and chief investment officer of Ross Farrar, an investment manager that specialises in the use of derivatives to help alter the return profile of funds and to help hedge corporate risks. Not surprisingly, he bristles at the odium that has been heaped on derivatives in the aftermath of the financial crisis.

'Derivatives are a bit like a scalpel. In someone's hand, it's a weapon, but in doctors' hands, it's life saving. You can abuse anything you want, but you don't ban knives - just as you don't and can't ban derivatives. They improve productivity dramatically.

'I have business that uses derivatives to enhance the performance of large institutional portfolios, and change their risk characteristics. That's the new world. I love doing that. You learn from business what you teach. And what you learn in academe you bring to business . . .

'So derivatives have a bad rap. But there are trillions of dollars in derivatives out there. Some other people think they're very good. You can't run some businesses without them, because you'll take interest rate risk, equity risk. You don't want those risks. You want the value and you're willing to lay off some of the risk and return to produce a better outcome for you. Even the government recognises that it can't stop this and shouldn't. I hope they have the common sense to let that market continue as it is.'

Effects of regulation

In his talk at NUS, he presented an 'idiosyncratic' view of the crisis which he believes was partly caused by the unintended effects of regulation. Basel requirements for bank capital calls for banks to set aside more capital for riskier assets. Assets of the highest quality - with a 'AAA' rating - required relatively less in reserves. This, he says, caused a rush among investment banks to create AAA securities.

'If you hold AAA securities, you can take on more leverage. So what does Wall Street do? They invent AAA securities. Are you shocked that they would create them? . . . Politicians say they're astonished at the greed. For 500 years, investment bankers have been greedy. What kind of naive politician thinks they won't be greedy now and pursue their self interest? It's what you'd expect them to do.'

The failure of quantitative models, also blamed for the crisis, is in part a failure of common sense, he says. 'You put enough data in, good and bad data, and the answer will come out correctly. But the thing you don't spend enough time doing is listening to people who are every bit as smart but don't do mathematics. They have a good qualitative understanding.

'I have a business partner who used to work at a major bank. He left the bank because he said they were making him give corporate loans that were bad loans, simply because they wanted to get more loans out. You need people like that with a good qualitative understanding to help create your data.'

He suggests that the world has not seen the last of big company failures. Part of the problem is the involvement of government in the economy. 'I think there are deep structural problems. We don't understand the role of the political economy. We don't think or write about it - it's that interaction between politics and the economy that brings about crisis.

'We wouldn't have had a crisis - at least not this one - if the US government hadn't been so insistent on supporting house prices. We have the same thing, the same villains today.'

He wonders what might have happened if the US government had not been so quick to let Lehman Brothers fail, or to rescue AIG and Goldman Sachs. What if steps had been taken to set a floor to the value of problematic securities instead? It's an intriguing thought. Today, the value of some of the securities taken over by the Federal Reserve has rebounded significantly.

'Here is a way to deal with things. There was concern then that the mortgage assets were illiquid, and everyone was afraid of what would happen so we had TARP and TAUP. Here's an easier way. I bring to the regulator portfolios of mortgages.

'They can put their guarantee on the pool, that it won't fall below 60 cents on the dollar. You sell the asset at 60 cents on the dollar, and guarantee that no more than 60 per cent will default. The instruments become instantly liquid.'

Prof Ross himself invests most of his funds in illiquid assets, and almost nothing in common stocks. 'I've always felt I had some good information and the best investments I can make are in private, illiquid things . . . I'm in the business of making investments. If I can't see good investments, I shouldn't be in business.'

Tax liens

Opportunities today are not as outstanding as they were during the 2008 crisis. 'I was just amazed. We were seeing mortgage products that I knew you would double your money in a year, and you did. Now, it's not as attractive, and it's all very niche, pockets of funny things.'

An example, he says, is investing in tax liens. These are issued on properties whose owners failed to pay their property taxes. The county in the US auctions lien certificates to generate revenue. If the owners fail to pay taxes, you end up with the property. If they do pay taxes, you earn interest on your investment.

'There isn't a lot of competition in this. You can get 18 per cent return just from the penalties that people have to pay. Best of all, if they can't pay anything, they lose the property and you get it. The tax lien is usually 2 per cent of assessed value.

'Even if the property has dropped to half or 20 per cent of what it's worth . . . you still have 10 to one coverage in terms of collateral, and the wonderful thing is you get a property for 2 per cent investment. That's terrific. That's an example of the things I like . . . funny weird old things.'

Meanwhile, the US, he says, has structural issues that cloud its near-term future. But its strength lies in its ability to assimilate great numbers of talented immigrants. 'I don't know where the world is turning, but the US is a pioneer in so many things. The greatest research in biology is going on in the US. Technology in Silicon Valley, innovations in finance. It really is a big, free capitalistic society. I see the problems and I don't talk enough about the good things.

'There are serious problems . . . The new reality is they really can't make cars as they used to, or steel. It's increasingly becoming a service economy. Service is very valuable and can be very productive. These changes are always difficult. To some extent, it has unenlightened government leadership. Deficits are running out of control. The prediction is a deficit that's a quarter of total budget, that's huge. If that's right, that's very scary.'

Singapore, he says, will do 'wonderfully well'. 'You have a giant next door called China. You're not just going to live with China, you're going to prosper. It's just what you need - great concentration of human capital, enormous skills in trade and production.

'There's a reason we call Singapore the Switzerland of Asia. Someday, they're going to call Switzerland the Singapore of Europe.'

Keppel receives US$8 million from QGOG for early delivery of Alpha Star

Keppel receives US$8 million from QGOG for early delivery of Alpha Star

The DSSTM 38 ultra deepwater semisubmersible rig was delivered a record four months ahead of schedule.

Singapore, 29 March 2011 - Keppel FELS Limited (Keppel FELS) has delivered Alpha Star, the second of two DSSTM 38 semisubmersible rigs, to Brazil’s Queiroz Galvão Óleo e Gás (QGOG) four months ahead of schedule and with zero lost time incidents.

This continues Keppel FELS track record of delivering its rigs on time or ahead of schedule. It is the third early delivery this year, following the early delivery of the semisubmersible drilling tender, West Jaya, to Seadrill and of the KFELS N Class rig, Rowan Stavanger, for Rowan Companies.

Mr Tong Chong Heong, CEO of Keppel Offshore & Marine, said, “This is our second safe and early delivery to QGOG and a sterling record for our company. This outstanding achievement is a demonstration of the great teamwork and synergy we have built with QGOG. It brings to fore the excellence of our efficient processes, project management, innovative methods and the Can-Do spirit which we apply on all our projects.

“We are glad to be able to send Alpha Star off early to contribute to Brazil’s exploration and production efforts, enabling QGOG to anticipate its service from Petrobras. Our philosophy is to provide maximum value to our customers and we look forward to supporting QGOG as they expand their foothold in the deepwater drilling segment.”

The rig has been chartered by Petrobras for six years to support exploration and production activities offshore Brazil.

Mr Leduvy Gouvea, Chef Executive Officer of Queiroz Galvão Óleo e Gás said, “With this early delivery, we are able to start work earlier for Petrobras, and reinforce our status as the premier drilling operator in Brazil. We are confident that Alpha Star will be just as successful as its sister rig, the DSSTM 38 Gold Star, which is performing successfully for Petrobras in Brazil.

“Through the various projects we have been working on, they have proven to be an exceptional partner, delivering projects which exceed expectations and enabling us to efficiently serve the fast-growing oil and gas exploration industry. They share our commitment to provide technologically advanced and high quality products to our customers in a reliable and safe manner.”

Jointly developed and owned by Keppel’s Deepwater Technology Group and Marine Structure Consultants, the DSSTM 38 design is in the league of some of the world’s most advanced drilling semisubmersibles.

DSSTM 38 is rated to drill 30,000 feet below mud line in over 9,000 feet water depth. It has an operational displacement of over 38,000 tonnes and can accommodate 130 persons. It also features both vertical and horizontal riser storage and is configured with eight 3,000 kW azimuth thrusters to keep the rig in position.

Designed to maximise uptime with reduced emissions and discharges, a DSSTM 38 rig is well-suited to handle the operational requirements in the deepwater "Golden Triangle" region, which comprises Brazil, Africa and the Gulf of Mexico.

I won't lose money!

Just for Laugh ....

Gamblers go to casino thinking that they won't lose money or at most lost some money.

Similarly, investors come to the stock market thinking that they won't lose money if they don't panic and over long run, they will be alright with stock dividends. You tend to believe it too, right?

Sembcorp Marine wins contracts worth US$427.6m

Noble Corp (NE.N) exercised options with Sembcorp Marine (SCMN.SI) to build two new harsh-environment shallow water drilling rigs for US$235 million ($296.9 million) apiece, bringing the total it has under construction to four, the company said on Monday.

The new jack-up rigs are expected to be delivered by Sembcorp's Jurong Shipyard in the third quarter of 2013 and first quarter of 2014, and still leave Noble with two options to build new jack-ups.

The vessels will have the capability to operate in water depths up to 400 feet (122 meters) and drill to depths of 30,000 feet.

Earlier this month, Noble said it had landed contracts for six shallow-water rigs off the coast of Mexico, including four that had been idled in the U.S. Gulf of Mexico because of the lack of work.

Monday 28 March 2011

Singapore's CapitaMalls Asia seeks secondary listing in Hong Kong

  • Seeks secondary listing to complement China growth strategy
  • Comes as many Singapore-based companies seeking dual-listings in Hong Kong, Taiwan
SINGAPORE, March 28 (Reuters) - Singapore-based shopping mall developer CapitaMalls Asia said it is seeking a secondary listing in Hong Kong to bolster its expansion plans in China.

The company, a unit of property developer CapitaLand , has submitted an application to the Hong Kong stock exchange, it said.

CapitaMalls said it has sufficient resources to fund its expansion and has no immediate need to raise equity, but the listing would allow it greater flexibility to manage its capital.

The move comes as many Singapore-listed companies, such as Yangzijiang Shipbuilding , have been seeking to list in Hong Kong or Taiwan in a bid to seek higher valuations and widen their investor base. [ID:nL3E7CH0DH]

China's strong economic growth, along with its investments to strengthen its railway infrastructure and public transport systems, is expected to help boost the retail industry and demand for shopping mall space.

"Given the growing importance of its China business going forward, the proposed secondary listing will complement CapitaMalls Asia's expansion in the country," the company said in a statement.

China accounts for about 37 percent of CapitaMalls' total property portfolio by property value and 70 percent by gross floor area. It owns 53 malls across 34 cities in China, the company said.

"With its increasing disposable income and urbanisation, we remain confident that China will continue to experience strong retail sales growth," Liew Mun Leong, Chairman of CapitaMalls Asia said in a statement.

China International Capital Corporation Hong Kong Securities and J.P. Morgan are the joint sponsors of the proposed secondary listing.

Shares of CapitaMalls, which owns S$23.7 billion worth of assets in Singapore, China, Malaysia, Japan and India, are down about 9 percent since the start of the year.

The shares, however, gained almost 3 percent on Friday on market talk of a secondary listing.

The company requested for trading in its shares to be halted earlier on Monday. (Reporting by Charmian Kok; Editing by Saeed Azhar and Dhara Ranasinghe)

Have you started using CAGR or XIRR to measure your portfolio performance?

What gets measured, gets managed.” - Peter Drucker

"Insanity: doing the same thing over and over again and expecting different results" - Albert Einstein

Someone said in a private email to me: Thanks for "pushing" people around you to measure their performance and educating us on the 2 mathematical tools, XIRR and CAGR.  I have started to use them in my tracking.

"Keeping detailed records of your stock transaction is NOT measuring your portfolio performance. Better know the difference" - Createwealth8888

Don't just keep detailed records of your stock transactions. You may have to measure and track your portfolio performance closely and diligently so that you can review your performance result and re-strategize when it becomes necessary.

Investing in the stock market is still a game of strategy like Chess - you need to defend and attack as well as Anticipating the market next moves to make a kill; but sometime the anticipated move may not happen then you might get cornered into some difficult positions and then it is time to re-strategize your game again.

Read? XIRR is easy to use

Like one of my readers, have you also start tracking your portfolio performance using XIRR or CAGR after coming here?

Or you are like someone whom I know and he may still think that it is not too useful. There is no real need to diligently measure portfolio performance. Got cash flow coming to the bank can "oredi."

Sunday 27 March 2011

Shocking Truth on some Stock Gurus!

Just For Thinking ....

Like most Sundays, I was flipping through thesundaytimes papers at air-con KopiTiam while having breakfast with Kopi-O siew dai.

As usual there will be some Stock Gurus advertising how easy they can teach you to make money from the stock market and you can reach financial freedom by following their method but firstly you have to put $X,XXX in their pocket.

On Pg 3, I can't really miss reading off the bold-worded of easy trading in the stock market.

Let recall what did I joke about ... Read? Hey! Are you good at stocks? (2)

Getting an education in University of Stock Market is like this:

  • Successfully completed ONE cycle of a) bull-bear-bull or b) bear-bull-bear
    • Awarded BSM (Bachelor in Stock Market)
    • Made tons of money - 1st Class Hons with Distinctions
  • Successfully completed TWO cycles of a) bull-bear-bull or b) bear-bull-bear
    • Awarded MSM (Masters in Stock Market)
  • Successfully completed THREE cycles of a) bull-bear-bull or b) bear-bull-bear
    • Awarded Ph.DSM (Ph.D in Stock Market)
Here come the shocking truth in Pg 29

A PSLE guy in the stock market teaching newbies at a fee on subject even BSM or MSM may from time to time having problem to earn decent returns from the stock market.

Beware! Financial education is not a regulated market. There is no minimum qualification or experiences required to claim that you are a stock, financial or investment genius. Anyone can claim that they are the like of Tiger Wood in Golf or Warren Buffet in Investing.

Hard Truth on making money from stock market - Real Person that I have know

Few days ago, I have learnt that one woman who was doing well and making good CAGR of 2X%+ during 2008 till mid 2010; but recently her CAGR has dropped from 2X% to 11% due to lack of actions in the stock market as cash on hands doesn't generate the desired returns. She is still doing her Primary so it may be expected.

CPL - Will it break resistance this time?

Investing Made Simple by Uncle8888 (10)

Read? Investing Made Simple by Uncle8888 (9)

Simplify your investing to avoid undesirable stress when you read the news that your stocks were halted and later got suspended.

Why would you want to do that just to make some money from the stock market?
Why stress yourself?

I believe that there are enough opportunity in SGX to invest in non S-Chips to make decent returns. I have been doing that with non S-Chips since Nov 2008.

I don't even care to invest in overseas stocks for the same reason. The blue chips in SGX are also global companies with global presence so there is no real need to look so far away while the pot of gold is just in our backyard and the returns come without further double-edged forex exchange risk.

In investing, managing risks is far more important than dreaming of possible gains.

Read? Understanding Stock Market Risks - Financial Fraud Risk is real! (3)

Saturday 26 March 2011

You can't retire!

Just for Thinking ...

For one good reason why you can't retire even you reach financial independence when work is your identity.

For every new person you meet, you introduce yourself as soon as possible your job. Your job has become an integral part of your life.

More bloggers going full-time

SINGAPORE: Singapore has an estimated 100,000 bloggers, with about half of them registered with blog advertising community, Nuffnang Singapore.

Social media experts said this number is set to rise and more will turn blogging into a full-time career.

Nuffnang said top bloggers can earn up to S$5,000 a month, depending on factors like blog demand and editorial content. Other factors include the blogger's style of writing and blog readership.

Most influential bloggers get about one or two ads a month. And as manager of their blogs, Nuffnang limits the number of ads so that blogs do no get over-commercialised.

But with the lure of money, what safeguards are there to ensure young bloggers do not compromise on their reputation in the blogosphere?

Well-known blog Monoxious.com was created by best friends Dawn and Arissa as a hobby in 2009. Their blog, which caters to teens and young working adults, got only seven unique hits a day when it first started.

However, after gaining recognition from blog awards, it now sees close to 1,000 unique hits a day.

Their fashion-centric blog is among a growing trend of niche blogs.

"Last time a lot of people blog to focus on their lifestyle, like what they did today. But now blogs are more inclined towards niche blogs and it has to be focused on few things like travel, food or fashion and beauty. And I think these niche blogs have more potential to expand than personal blogs do," said Dawn.

Like them, there is a growing number of bloggers who get paid for writing brand reviews or advertorials. This as more brands are recognising the power of influence online, and also the lower advertising costs compared to traditional media.

With such monetary gains, one social media expert said more should be done in schools to educate young bloggers on its pitfalls.

Pat Law, a social media blogger and expert, said: "To begin with, it should come from fellow bloggers to other bloggers. We can start by making it known or having events where you talk about our experience as bloggers. We should have at least a module on social media, why there are some things you should not say or can you bear the consequences if you say what you want to say.

"So if there aren't any educational programmes catered to the very fundamental fact that we are dabbling in social media, it's about time."

Nuffnang said it has about 50 bloggers who have signed contracts with them and those below 18 years must have a parent present to attend meetings regarding the contract.

The parent also has to sign the contract on his/her child's behalf. The terms are explained very clearly to both parent and child to ensure they understand and there is a grace period where they can take the contract home to discuss or consult a third party.

Meanwhile, as a content regulator, the Media Development Authority (MDA) said its policies are aimed at safeguarding public interest, increasing media choices and enabling informed decisions by consumers.

It looks out for content that touches on broad areas like "national interest" and "racial and religious harmony", as well as specific areas such as violence, language, sex and drug scenes.

Only one reason not investing in property for rental income

Just for Laugh ....

I am not their servant attending to the tenant's call to change faulty electric bulbs, attending to night calls of choked toilet, leaking taps, etc.

I don't even fix my leaking tap immediately. Sometime it will take days or weeks till I finally decided to end the nagging to fit it up.

What make me think that I need to respond to such call from the tenants to fix their leaking tap just because they paid me rental. No way, man! I just want to make money from investment in a fuss-free way. Don't Disturb Me. Get it? I am not the Servant!

Passive Income?

When we think of passive income; most commonly we will think of passive income coming from rental income from property and income from stock dividends.

For retail stock investors, such thinking of passive income coming from stock dividends may actually corner them into searching into REITs, Biz Trusts and other defensive counters that are known to pay consistent dividends. Since REITS and Biz Trusts are specially created for investors looking for stock dividends as passive income on regular basis e.g quarterly or semi-annually; probably it becomes the best place to look for high dividend yield. But, the best place may not be the most profitable place in the stock market in term of cash flow.

But, instead of thinking of regular passive income in our portfolio, we may want to change the idea of passive income into cash flow as income on yearly basis. In this case, it may open up more opportunities and not restricting yourself into REITs and Biz Trusts.

Try thinking of cash flow as income over yearly basis; the cash flow can come from realizing your gains from sales of stocks over a year. This cash flow may turn out to be as good as your regular passive income from stocks dividends.

At least, my experience is telling me so. To me, stock dividends is nothing more than just a safe net should I get it wrong. I don't purposely buy the stocks based its dividend yield.

Are you still in doubt? LOL

Friday 25 March 2011

How are you measuring up with your investment return?

Here are some top investment guru's annualized returns

  1. Peter Lynch, he posted a 29.2% average annual return over 13 years
  2. Warren Buffett, from 1965-2005,over 40 years has produced an annual average return of 21.5%
  3. Anthony Bolton, his Special Situations the fund achieved an average annual return of 19.5% over 28 years
  4. Bill Miller, Portfolio Manager of Legg Mason Value Trust (LMVTX). Since inception, his fund has earned 15.25% average annual total returns over 15 years

If considering time and return, I would rank in the order

  1. Warren Buffet - 21.5%
  2. Anthony Bolton - 19.5%
  3. Peter Lych - 29.2%
  4. Bill Miller - 15.25%
I think if we can achieve annualized returns over 10-12%, we can congratulate ourselves to be successful in managing our returns on investment.

So what is your annualized return?

Do you really follow what I buy?

Just for Laugh ....
Do you really follow what I buy? e.g. buying a few cents lower than my purchase price.

Specialists will earn more!

Just for Laugh ....

We all know that specialists in any field tend to earn more than generalists.

Similarly, in active investing/trading, specialists in that few counters will tend to generate greater returns from the market.

Pemex in jack-up push for Mexico

Pemex is preparing a tender for two latest generation jack-up rigs to be built on Mexican soil alongside an unparalled push for more shallow water drilling units.


Kep Corp has been winning contracts from Mexicican. Will it continue to win more with Near Market Near Customer strategy?

Thursday 24 March 2011

China Gaoxian Fibre suspends trading amid audit issues

Createwealth8888: I have already give up on S-Chips in 2008/9. How many more failure of s-chips will convince you to clear of them?


China Gaoxian Fibre Fabric Holdings Ltd said on Thursday that it has called for a trading suspension in its shares after its auditors, Messrs Ernst & Young, could not verify nor confirm the bank balances in its subsidiaries for the financial year ended 31 December 2010.

The subsidiaries are namely Zhejiang Huagang Polyester Industrial Co., Ltd and Fujian New Huawei Fibre Dyeing Co., Ltd.

The company had halted trading in its shares from 22 March 2010.

But it will now request for the trading halt to be converted into a suspension of trading with effect from 9:00 a.m. of 25 March 2011.

Its audit committee has instructed the auditors to carry out an expanded scope of its audit and also met with the Executive Chairman and CEO, Cao Xiangbin, who has indicated that he will cooperate and assist, and will further instruct management to do the same.

In the meantime, the audit committee intends to use its best endeavours to take such practicable measures as may be necessary to safeguard the group's assets.

Monday 21 March 2011

Jurong Shipyard to build US$450m rig from Seadrill


Sembcorp Marine's subsidiary Jurong Shipyard said on Monday that it has secured a US$450 million contract to build a harsh-environment jack-up rig for Seadrill.

The rig is scheduled for delivery in the third quarter of 2013

Thursday 17 March 2011

Is Buy and Hold Dead?

Just For Thinking ...

"Yes, when Black Swans Now a Regular Part of Market Landscape and that means the market will provide opportunities to buy back after realizing gains and collecting dividends too." - Createwealth8888

Black Swans Now a Regular Part of Market Landscape

By: Jeff Cox
CNBC.com Staff Writer

For global financial markets, once-in-a-lifetime events are happening with such regularity that black swans may as well be white swans.

Such supposedly rare occurrences, brought into the national consciousness largely through Nassim Taleb’s 2007 book, “The Black Swan,” have dominated the markets for more than a decade.

They include the Internet explosion in the late 1990s, the ensuing dotcom bubble burst and stock market selloff a few years later, the 2001 terrorist attacks, the collapse of the real estate market that began five years ago, and now, the events in the Middle East and Japan.

The “highly improbable consequential” event is how Taleb frames the Black Swan phenomenon, and each time they arise, the markets react violently.

In his widely acclaimed book, he says traditional models and probability scales, in particular the bell curve, fail investors miserably, causing them to get on the wrong side of the trade primarily from taking on too much risk in their portfolios.

Indeed, the normal course of events—those happening within the belly of the bell curve—have little impact on stocks and other investments. It is only in times of great enthusiasm or great distress that truly impactful moves occur.

“You have to understand that whatever you want to call it—a hundred-year flood, Black Swan, sixth standard deviation—they happen a lot more often than the probability models will tell you,” says Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors, which oversees about $6 billion for high-net-worth clients.

“The market decline in 2000, the mortgage bust, the stock market decline in ’08 and ’09 are supposed to be one-in-a hundred-year events and they’re occurring a lot more regularly. So I think we have to figure out how to rephrase it.”

Whatever you want to call it—a Gray Goose, like the vodka?—the perils for unprepared investors are severe.

The problem is, when these events happen, investors often can’t get out of their own way, zigging when they should zag and zagging when they should zig.

“It comes down to two things: Monitoring your risk-reward and also understanding the behavioral aspects of investing,” Flam says. “Your own psychology is going to be your own worst enemy. You’re going to want to invest when you’re most comfortable with what’s going on around you, and then the stocks have priced that in. You’re not going to want to in invest in times of uncertainty, and that’s usually the best time to be investing.”

From Taleb’s view, the best investment strategy is to construct a portfolio filled with mostly safe investments such as government bonds and the like, with a much smaller portion dedicated to risk in options.

You always have to be focused on not just the upside but the downside as well when investing,” Flam says. “‘Margin of safety’ is what the value investors call it.’”

Protests and government overthrows in the Middle East first upset the market’s rally off the March 2009 lows back in February, and the earthquake and tsunami in Japan—both “highly improbable events”—have caused havoc with investor psychology in recent days.

Reaction, though, has been predictable. Investors have shed risk assets like stocks and have flocked toward the safety of US Treasurys.

That could be a precisely the wrong reaction.

“It’s a buying opportunity here, actually,” says Michael Cohn, chief investment strategist at Global Arena Investment Management in New York. “This is an opportunity to kind of shuffle things around and buy things that are going down."

Not exactly the Taleb strategy, but there is a protection element to it.

Cohn relies on 13 years in derivative trading to use covered calls to limit downside, not a foolproof strategy, to be sure, but one that at least braces for the probability of the improbable.

Strategists at Bank of America Merrill Lynch also are counseling clients to avoid panic selling, saying the strategy of dumping stocks in turbulence and then buying back 20 days later has only worked once—during the 1987 Black Monday crash, which was, yes, another Black Swan.

“Although this strategy helps to avoid many of the market’s worst performance periods, it usually significantly underperforms a simpler strategy of just staying invested,” chief US equity strategist David Bianco said in a research note for clients. “This is because it also misses the best days, which tend to closely follow the worst days.”

After all, nobody said a Black Swan had to be a bad thing.

Tuesday 15 March 2011

Japan Drilling Company awards US$210 million jackup contract to Keppel

12th rig order brings Keppel O&M’s total contracts value to S$4.5 billion in 1Q2011.

Singapore, 15 March 2011 – Keppel FELS Limited (Keppel FELS) has secured a contract worth about US$210 million from Japan Drilling Company (JDC) to build a KFELS Super B Class jackup rig.

Slated for delivery in the first quarter of 2013, the rig will be JDC’s first newbuild rig order in six years and Keppel FELS’ first for JDC.

Mr Wong Kok Seng, Managing Director of Keppel FELS, said, “JDC has been very specific with the requirements from their new jackup building programme. We are honoured that they have selected our proven KFELS Super B Class design to be customised to their needs. This is a win-win partnership that demonstrates the strength of our proprietary designs.

“The KFELS Super B class rig has a highly successful operating track record in many parts of the world. And as with all our projects, we aim to deliver this latest unit safely, on time and within budget to JDC.”

Mr Yuichiro Ichikawa, Representative Director and Senior Managing Executive Officer of JDC who is currently visiting Keppel FELS, said, “We plan to further expand our business operations globally and strengthen our offshore fleet to address the diverse needs of our customers. The utilisation of our existing rigs is currently at an optimal level and we believe that the KFELS Super B class will be an important addition to boost our capabilities and offerings to customers.

“Through earlier repair projects, we have witnessed Keppel FELS’ deep commitment to quality, safety and delivery excellence. We are glad to have found a likeminded partner in Keppel, and look forward to work closely with them to complete an outstanding drilling unit that fits our exacting requirements.”

The KFELS Super B Class design is one of the world’s deepest drilling rigs with drilling depth of 35,000 ft. This rig’s leg structure is uniquely designed to provide enhanced robustness for operations at a 425 ft water depth. The rig is engineered to operate in high ambient temperatures and can accommodate 150 personnel onboard. It features an offline stand building capability to handle drill pipes efficiently, a combined drilling load of up to 2,700 kips and a high capacity hook load of 2 million pounds, boosting overall rig performance and productivity.
Keppel FELS previously completed two KFELS B Class jackup rigs for a JDC joint venture company with Qatar Petroleum, Gulf Drilling International Ltd.

To date, 33 KFELS B Class and Super B Class rigs have been delivered for operations in various parts of the world.

The above contract is not expected to have any material impact on the net tangible assets or the earnings per share of Keppel Corporation Limited for the current financial year.

A returning customer to Keppel, JDC had previously sent its rigs, Hakuryu-5 and Hakuryu-3, for repair and maintenance at Keppel AmFELS and Keppel FELS respectively.

Tokyo shares dive as nuclear crisis escalates

TOKYO - Japanese shares dived Tuesday, with TEPCO losing 24 percent, after Prime Minister Naoto Kan warned levels of radiation leaked from one of its nuclear plants hit levels that posed a threat to health.

Authorities evacuated non-essential staff from the Fukushima Number One plant while Kan told people up to 10 kilometres (six miles) from the exclusion zone to stay indoors.

Shares dived more than 14 percent but rebounded slightly. Corporate giants such as Toyota and Sony were again hit by selling as they have been forced to halt production across Japan while nuclear plant operator TEPCO slumped 24.67 percent, adding to Monday's 23.57 percent loss.

As international concern over Japan's nuclear emergency mounts, Kan said the risk of further releases of radioactive material from the nuclear plant remained "very high."

Panicking investors sent the Nikkei index tumbling on news of the escalating nuclear emergency, falling more than 14 percent before clawing back ground with shares ending down 10.55 percent, or 1,015.34 points, at 8,605.15.

It was the biggest one-day fall since the Lehman crisis in 2008 at the beginning of the global financial crisis.

"It's panic-selling. It's not only foreign investors -- everybody just wants to dump shares," Retela Crea Securities general manager Yosuke Shimizu said of the 14 percent nosedive, Dow Jones Newswires reported.

In volatile trade the yen dived against the dollar before quickly snapping back as traders worried about the escalating on clear emergency.

The dollar rose to 82.01 before quickly falling back to 81.47. It was trading at 81.63 by 0715 GMT.

The Bank of Japan pumped eight trillion yen ($97.8 billion) into the financial system to soothe shaken money markets following a record 15-trillion yen injection Monday.

Japan's biggest ever earthquake and a devastating tsunami that followed are expected to have claimed at least 10,000 lives.

Ratings agency Standard & Poor's placed TEPCO on credit watch as engineers raced to avoid a meltdown in four reactors at the crippled plant.

"There is no sense of calmness to examine the health of the Japanese economy as a whole," said Masayoshi Yano, senior market analyst at Meiwa Securities.

Reactor-maker Toshiba, which fell by its 16 percent daily limit Monday, was ask-only.

Economists say it is still too early to assess the cost of the destruction from the record 9.0-magnitude quake and the 10-metre wall of water that laid waste to swathes of the northeastern coast and triggered an atomic emergency.

The quake and tsunami have damaged or closed down ports, although airports such as Tokyo's Narita have reopened. Transport infrastructure such as train lines and roads have been crippled along parts of the northeast.

Among the nation's top companies Toyota was off 4.83 percent at 3,150 yen while Nissan fell 3.6 percent to 696 and Honda was down 3.81 percent at 2,977.

Sony dived 6.27 percent to 2,390.

The move by the BoJ to pump eight trillion yen came after it said Monday it would inject a record 15 trillion yen to help stabilise the short term-money market, making good on an earlier pledge that it would unleash "massive" funds following the disasters.

The BoJ also said it will double a five trillion yen asset purchase scheme to help buffer the economy from the shock of the catastrophes.

The central bank's priority is to ensure that financial institutions in disaster-hit regions do not run out of funds. Over the weekend it provided them with 55 billion yen to ease the pressure before Monday's move.

The government expects a "considerable" economic impact from the huge earthquake and devastating tsunami that plunged the nation into what Prime Minister Naoto Kan called its worst crisis since World War II.

A mammoth rebuilding task will be required in the aftermath of a disaster whose economic impact is widely expected to be at least as bad as that from the 1995 Kobe earthquake, which killed 6,400 people.

"History tells us that such natural disasters rarely leave lasting damage to the Japanese economy though the short-term effect can be quite a different story," noted Merrill Lynch chief investment office Bill O'Neill.

"Early estimates from this event suggest damages could be as high as $35 billion."

Economists see Japan's growth being hit in the first half, but benefiting in the second half as reconstruction efforts kick in.

But Japan faces a huge challenge in financing a rebuild without expanding a public debt that is already the industrialised world's biggest at around 200 percent of GDP. The nation's credit rating was recently downgraded on concerns that not enough is being done to address it.

- AFP/ir

Noble : Bought back @ $1.98

I last sold at $2.08 and now bought back at $1.98

Placement to BBs at $2.07

Round 13: ROC 20.8%, 185 days, B $1.72 S $2.08 (Price has been adjusted after XB)

Round 12: ROC 5.4%, 190 days, B $1.87 S $1.98 (Price has been adjusted after XB)
Round 11: ROC 10.1%, 45 days, B $3.04 S $3.37
Round 10: ROC 6.5%, 20 days, B $3.07 S $3.29 (Bought back higher)
Round 9: ROC 5.7%, 74 days, B $1.71 S $1.82 (Bought back higher)
Round 8: ROC 34.3%, 100 days, B $0.96 S $1.30
Round 7: ROC 5.7%, 10 days, B $1.02 S $1.09
Round 6: ROC 3.8%, 1 day, B $1.01 S $1.06
Round 5: ROC 12%, 27 days, B $0.965 S $1.08, (2nd Half)
Round 4: ROC 14%, 8 days, B $0.965 S $1.11, (1st Half) - Bought back higher
Round 3: ROC 7.1%, 8 days, B $0.830 S $0.895
Round 2: ROC 31.6%, 20 days, B $0.800 S $1.05
Round 1: ROC 16.3%, 28 days, B $0.910 S $1.08

Monday 14 March 2011

Bought back Cambridge (CIT) at $0.51 (2)

Read? Bought back Cambridge (CIT) at $0.51

Someone asked me why I bought CIT? Good?

I last bought CIT at $0.455 and sold at $0.545. I bought back at $0.51 to subscribe for right issues and some excess at $0.429 which is lower than my last purchase price at $0.455.

So it is just simple Maths for me to do a fair deal. It has nothing to do with TA or FA.

Rights Issue will be offered on a 1-for-8 basis (fractional entitlements to be disregarded) at a price of S$0.429 per Rights Unit (the "Issue Price") which is at a 15.0% discount to the closing price of S$0.505 per Unit on the SGX-ST on 10 March 2011 and a 13.7% discount to TERP

Nikkei Plunges 6.2% After Deadly Quake

By: CNBC.com with Reuters

Asian stocks outside Japan edged up on Monday, with demand for commodity-related shares offsetting the steep drop in Japanese markets following a massive earthquake and tsunami.

Construction and refinery shares across the region saw healthy demand on hopes of bigger profits because of large-scale reconstruction efforts as the country battled to prevent a nuclear catastrophe after the natural disasters that may have killed more than 10,000 people

The FTSE CNBC Asia 100 Index [.FTFCNBCA 6729.08 -142.44 (-2.07%)], which measures markets across Asia, was lost 2.1 percent.

Japan's Nikkei share average closed down 6.2 percent to 9,620.49 [JP;N225 9620.49 -633.94 (-6.18%)], the biggest single-day decline in two years to the lowest since November 2010, with technology companies such as Kyocera and Canon among the biggest drags on the market.

The broader Topix fell 7.5 percent to 846.96, posting the biggest daily decline since October 2008, and bond yields rose on Monday as investors expected the earthquake and tsunami that devastated the country's northeast to take an economic toll and require heavy government borrowing.

The drop on record-high trading volume among the Tokyo Stock Exchange's biggest companies was compounded by fears about the long-term impact on power supplies after the earthquake damaged a nuclear generator. After an explosion on Monday, authorities were working desperately to avert a plant meltdown.

Fears of more aftershocks and further repercussions from the damaged nuclear power plant would probably continue to keep investors on edge and weigh on the market this week.

The yen also slid against the dollar on hedge fund selling after the Bank of Japan announced a total of 15 trillion yen in fund injections to keep money markets stable.

Japanese automakers, electronics firms and oil refiners saw their share prices drop by double digit percentages at one point after having to shut key factories after Friday's earthquake and tsunami, which are feared to have killed more than 10,000 people and severely damage infrastructure.

Shares of Tokyo Electric Power, Japan's biggest utility that owns a nuclear plant that may be close to meltdown, were a big focus for the market. TEPCO ended ask-only at 1,621 yen, down 23.6 percent.

Construction-related businesses rallied on the back of expectations for demand from rebuilding efforts, with Kajima jumping 22.2 percent and Taiheiyo Cement climbing 21.2 percent.

In the month after the earthquake in Kobe in January 1995, construction stocks outperformed the broader market consistently for a year after the disaster, Citi research showed.

nabInvest supports Cambridge Industrial Trust’s Rights Issue

Singapore, 10 March 2011 - Cambridge Industrial Trust Management Limited (“CITM”), as manager (the “Manager”) of Cambridge Industrial Trust (“CIT”), advises that, in connection with the Rights Issue currently being undertaken, it has received an irrevocable undertaking from nabInvest Capital Partners Pty Limited (“NCP”), as manager of Antares nabInvest Trust (“AnIT”), that AnIT will subscribe for its pro rata entitlement of Rights Units under the Rights Issue. AnIT is the beneficial owner of an aggregate of 14.04 million units (the “Relevant Units”) representing 1.3% of the total Units in issue in CIT. NCP has also agreed that AnIT will not, and will procure that the registered owner holding such Relevant Units on behalf of AnIT will not, take any action inconsistent with that undertaking during the period up to and including the date on which the Rights Units are listed on the SGX-ST, without the prior written consent of the Manager and the Underwriter.

Mr Chris Calvert, CEO and Executive Director of the Manager, said, “We are pleased to receive the undertaking from NCP which shows nabInvest’s strong support and confidence in CIT and the Rights Issue. NCP and its parent company, National Australia Bank Limited, are valued partners as well as unitholders of CIT through AnIT. We look forward to their continued support.”

Sunday 13 March 2011

Investors, beware of self-serving bias

Just for Thinking ....

We may see this kind of self-serving bias when it comes to investing.

  • Don't worry about bad news. If the news is bad, it can always get better.
  • It is definitely under-valued based on my evaluation methodologies.
  • Assertion trumps evidence.

Investing Made Simple by Uncle8888 (9)

Read? Investing Made Simple by Uncle8888 (8) on Two-Way Buying Decision

Avoid paying a price for overconfidence
As retail investors, how do you know you have become overconfidence and may have exaggerated your skills in TA/FA?
One common sign of being overconfidence and exhibit the sense of exaggerated superior analytical skills in TA/FA is those who keep on doing Averaging Down on it while the market is aggressively selling it down.
They think that they are right and the market is wrong; but they often forget that in the stock market there are hundreds and thousands of Not-So-Stupid investors or professional Jaws analysing the same set of data and realized that it is better for them to take profit, cut losses or start shorting as the worst is not over yet.
Probably, a two-way buy decision may help to avoid being overconfidence and whether averaging down is more than justified.
 Read more? Beware of Averaging Down!

Saturday 12 March 2011

Portfolio Management - Portfolio Risk (2)

What does Japan Quake tell you something on risk management on your portfolio?

No matter how good you are with your TA or FA or both. You still must at all times protect your portfolio against Black Swan event that may happen and causing big losses to the portfolio. It is lot harder to recover from big losses in the portfolio.

In Joel Greenblatt's brilliant book, "You Can Be a Stock Market Genius", he provides the following statistics by owning the following number of stocks:

  • 2 stocks eliminates 46% of non-market risk of just owning one stock
  • 4 stocks eliminates 72% of the risk
  • 8 stocks eliminates 81% of the risk
  • 16 stocks eliminates 93% of the risk
  • 32 stocks eliminates 96% of the risk
  • 500 stocks eliminates 99% of the risk
Read? Portfolio Management - Portfolio Risk

My risk management rule is based on Investing Capital and not at Portfolio level so that the risk exposure is actually quite consistent and independent of the stock market conditions.

I will keep my risk exposure to not more than 5% of Investing Capital for any single stock and not more than 10% to a sector. For long-term holding for capital appreciation and dividend income, I would like to take back my investing capital ASAP and only leaving behind the profits to ride with the stock market i.e. Pillow Stocks Investing strategy.

"Think of Risks before Profits, then you are more likely to be safe over long run." - Createwealth8888

Friday 11 March 2011

Bought back Cambridge (CIT) at $0.51

Last sold at $0.545 so I got it back lower.

Round 1: ROC 19.5%, 362 days, B $0.455 S $0.545

Thursday 10 March 2011

Swiber wins South Asia award

Offshore construction specialist Swiber has secured a contract worth about $125 million for pipelay and platform modification work in South Asia.

The workscope of the award, from an unnamed operator, covers engineering, procurement, transportation and installation of several pipelines, including platform modifications.

The offshore work will start in the fourth quarter of this year and is expected to be completed by the second quarter of 2012.

GLP to replace SMRT in STI from March 21

SINGAPORE - Global Logistic Properties, which owns warehouses in China and Japan, will replace subway operator SMRT Corp as a constituent of Singapore's Straits Times Index (STI) following a half-yearly review, the index managers said on Thursday.

Inclusion in a benchmark index is often positive for companies as it attracts investments from fund managers as well as investors who track markets via exchange-traded funds.

The 30-member STI, Singapore's most widely followed index, is managed by Singapore Press Holdings, Singapore Exchange and Britain's FTSE Group. -- REUTERS

Keppel Shipyard nets two contracts worth S$170 million

Keppel Shipyard Limited (Keppel Shipyard), a wholly owned subsidiary of Keppel Offshore & Marine (Keppel O&M), has secured new contracts totalling S$170 million for two fast-track projects.

The new jobs comprise completing a Pipe Laying Vessel for Saipem S.p.A (Saipem) and converting a Floating, Storage and Offloading (FSO) vessel for Bumi Armada Berhad (Bumi Armada).

Mr Nelson Yeo, Managing Director (Marine) of Keppel O&M, said, "This is a reflection of our customers' confidence in Keppel's ability to deliver value-added services competitively and with high standards of quality and safety.

"As an integrated solutions provider, many of our client partnerships are shared by several companies within the Keppel O&M group. Such is the case with returning customers Saipem and Bumi Armada who are also collaborating with Keppel Shipyard's sister companies on some of their other projects."

The first contract was awarded by Saipem for the completion of a newbuild pipe laying vessel, Castorone. The major work scope includes detailed engineering, constructing marine systems and outfittings, installing and integrating marine and pipe laying equipment as well as commissioning the marine systems and sea trials.

Sister company, Keppel Singmarine, will jointly execute this project with Keppel Shipyard.

Castorone is expected to arrive in Keppel Shipyard towards the end of 1Q 2011. When completed in mid 2012, the technologically advanced Castorone will be equipped with a Dynamic Positioning 3 system and will be able to lay triple-jointed 12 m (or double-jointed 18m) pipes of up to 60 inches through an ‘S' lay method. The vessel will also be equipped for the future addition of a fixed tower for pipe laying in the ‘J' lay method.

Keppel FELS, another company in the Keppel O&M group, is currently commissioning the technologically advanced Frigstad D90 semisubmersible rig, Scarabeo 9, for Saipem.

The second contract is from repeat customer Bumi Armada for the conversion of a tanker into an FSO vessel. Work which commenced in 1Q 2011 includes refurbishment and life extension works, fabrication and installation of the cargo offloading balcony and helideck, installation and integration of a 12-point spread mooring system, and the upgrading of accommodation facilities.

Mr Hassan Basma, Executive Director and Chief Executive Officer of Bumi Armada, said, "Working with Keppel is one of the partnerships which we have developed over the years of collaboration. One that is built on trust. The first three projects which Keppel has undertaken for us were high quality vessels, delivered promptly and safely. We look forward to yet another FSO to complement our fleet here in Asia."

When completed in the second half of 2011, the converted FSO vessel with storage capacity of 500,000 barrels of oil will be deployed on the Sepat oilfield (Block PM 313), located off the eastern coast of Peninsular Malaysia.

Keppel Shipyard is also currently carrying out the conversion of an FPSO for Bumi Armada, destined for the TGT (Te Giac Trang or White Rhinoceros) oilfield in Vietnam.

The above contracts are not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.

Bull Market Turns Two on 9 Mar 11

Two years after STI low on 9 Mar 2009, I am -1.9% away from Portfolio peak value at 11 Oct 2007; but this time I am less bullish as in 2007. I still have 76.5% of my Investing Capital in cash. LOL!

Wednesday 9 March 2011

Two Years After Market Low, the Little Guy is Back

By: AP

As a historic bull market reaches its second birthday, everyday investors are piling back into stocks, finally ready for more risk and hoping the rally has further to go.

The Standard & Poor's 500 index has almost doubled since March 9, 2009, when it hit a 12-year low after the financial crisis. And the Dow Jones industrials are back above 12,000, about 2,000 points shy of their all-time high.

Little-guy investors appear to be on board. Since the beginning of the year, investors have put $24.2 billion into U.S. stock mutual funds, according to the Investment Company Institute. They withdrew $96.7 billion in 2010.

"It didn't feel right to be back in until now," says Richard Dukas, who heads a public relations firm in New York City. "I still don't want to put all my money in the market, but I believe we've come through the worst of it."

After the 2008 financial meltdown, Dukas and his wife converted their 401(k) retirement accounts into cash. They had been burned during the bubble in technology stocks a decade ago, and Dukas says he has been "extremely skittish" ever since.

Now Dukas, 48, says 85 percent of his portfolio is back in mutual funds, although he maintains a small cushion of cash.

More job security, strengthening retirement account balances and improvement in the overall U.S. economy are some of the factors that have brought everyday investors back to the market. A snapshot of what's happened:

The outlook of investors as measured by stock newsletters and market surveys has been extremely bullish for two or three months, says Mark Arbeter, chief technical strategist for S&P Equity Research.

Many workers have enjoyed seeing their 401(k) balances return to where they stood at the market's peak because they kept contributing during the down years. Many who have maintained their 401(k) accounts for a decade or longer still have some ground to make up because of their larger starting balances.

Americans who still have jobs are as secure as they've been in 14 years. That's because the number of planned layoffs has fallen to a low, according to outplacement firm Challenger, Gray & Christmas.

The combination has boosted confidence and brought investors back to a rising market. The Dow closed Tuesday's trading at 12,214, up 87 percent from the 2009 low. It's still 14 percent below its all-time high in October 2007.

While the economy is improving, it will take a lot longer to erase the abject fear that average investors have felt about owning stocks the last two years, says Jason Trennert, chief investment strategist for Strategas Research Partners in New York.

One reason to set aside their reservations: They can't find a better place to stash their money. The bull market in bonds has ended, money-market accounts are returning 1 percent or less, and the average two-year CD earns no more than 1.5 percent.

As a result, many investors returning to the market are tiptoeing back in. They're buying what Trennert calls "stocks that look like bonds" — dividend-paying blue chips that they hope will hedge their risk by guaranteeing at least a dividend payout.

For example, while stocks like Johnson & Johnson [JNJ 60.71 0.31 (+0.51%) ] and Procter & Gamble [PG 62.05 0.34 (+0.55%) ] haven't gone up much since 2009, their yields — 3.5 percent and 3.1 percent, respectively — mean investors can still pocket something.

"What swayed me is being frustrated having my money parked where it's earning almost nothing," says Debra Condren, a New York business consultant, who has been easing back into the market over the last four months. She still has only 30 percent of her investments in stocks, compared with 80 to 85 percent before the crash.

Besides reinvesting gradually, Condren says she's much more vigilant about her stocks. She says she won't hesitate to sell if she doesn't like what she sees in the market or senses a shift based on world events.

Among professional money managers, the shift back into stocks has been more dramatic. A February survey by Bank of America-Merrill Lynch of 270 top investment managers found them more bullish about stocks than at any time in the past decade.

But history shows experts may not have better insight about what's next. Plus, individual investors notoriously follow the crowd. So is it a worrisome sign that they're flocking back?

"Investors have the tendency to make the wrong decisions behaviorally," says Christopher Geczy, academic director of the Wealth Management Initiative at the University of Pennsylvania's Wharton School.

When they pile in or out of stocks, he says, it often signals that the market is about to turn in the opposite direction.

For instance, investors pumped nearly $91 billion into stock funds in 2007, just as the market was reaching its all-time peak.

Billionaire investor Carl Icahn said this week he is returning $1.76 billion to investors in his hedge funds because he doesn't want to be responsible to them for "another possible market crisis," especially given the big gains over the past two years.

Icahn also said he was concerned about the economic outlook and political tensions in the Middle East.

Yet analysts point to signs that the run could keep going for quite a while, as long as the economy cooperates.

Corporations are still sitting on billions of dollars in cash that they may ultimately put to work in the market.

The S&P 500 has an average gain of 17 percent in the third year of a presidential cycle.

But the market also tends to grow much more slowly in the third year of a bull run.

Stock prices are still not high by historic standards.

The S&P 500 index now trades at 15.6 times the operating earnings of its stocks over the past year, well under the historical average of 19.3.

There are plenty of investors still looking for an opportunity to get back in.

Kenneth Kracmer, who owns a marketing firm in Dallas, is restless after cutting his stock allocation by half, to 30 percent.

But he worries about unemployment, state governments in financial distress and a market he sees as artificially high in view of all the challenging economic news.

Other investors are clearly on edge, too. Before Tuesday, the market had fallen nearly 3 percent in two and a half weeks because of concerns about unrest in the Middle East.

"I want to play it smart until there's a little bit of economic certainty," Kracmer says. "I don't want to get in just before another drop."

Kep Corp's YTD order book.

YTD order wins hit S$3.95b; S$8.3b net orderbook. The latest jackup contract lifted YTD new order wins to S$3.95b and number of jackup orders to 15 units since Nov 2010. Additionally, there are 15 newbuild options granted to rig owners that are yet to be effective

Tuesday 8 March 2011

Singapore's Olam wins Bangladesh rice import tender

Reuters) - Singapore-based Olam Enterprise has won a tender to supply 30,000 tonnes of parboiled rice to Bangladesh at $549.14 a tonne, including C&F liner out, a government food official said on Tuesday.

The state grains importer issued the tender last month as part of efforts to boost reserves amid tight supplies and record global food prices.

Olam Enterprise, a subsidiary of Olam International Ltd. , did not provide the origin of the rice, but the likely source would be Thailand, and the rice is to be shipped in 30 days, the official s

Monday 7 March 2011

NOL carries 5% more cargo in 6 weeks to Feb 11

SINGAPORE - Singapore-listed Neptune Orient Lines (NOL) said on Monday that its container shipping volumes for the six weeks to Feb 11 rose 5 per cent from a year ago, helped by higher traffic on the intra-Asia and Asia-Europe routes.

NOL carried 321,600 forty-foot equivalent units (FEUs) during the six-week period, up from 307,400 FEUs a year ago, the firm said in a statement.

The average revenue per FEU increased 10 per cent year-on-year over the same period to US$2,654 per FEU, helped by improved freight rates on major trade lanes, particularly the transpacific route. -- REUTERS


Singapore, 7 March 2011 – Mainboard-listed Hyflux Ltd (“Hyflux” or “The Group”), today announced that it has been named the preferred bidder by PUB, Singapore’s national water agency, to design, build, own and operate (“DBOO”) Singapore’s second and largest seawater desalination plant in Tuas for a concession period of 25 years.

The new desalination plant is designed to produce 318,500 cubic metres of water per day. The key technology in the desalination process is Reverse Osmosis where seawater is forced against semi-permeable membranes under pressure in a continuous flow condition. The product water will be supplied to PUB at a first-year price of $0.45 per cubic metre based on the warranted capacity of 318,500 cubic metres per day. Hyflux will also be constructing a 411MW combined cycle gas turbine (“CCGT”) power plant to supply electricity to the desalination plant.

Excess power will be sold to the power grid.

The total project cost of the desalination plant and power plant is S$890 million. It will be funded through a combination of equity and project financing. Construction is slated to start by the fourth quarter of 2011, and the project is scheduled to commence operations by 2013. The engineering, procurement and construction as well as operations and maintenance of the project will be undertaken by the Group’s wholly-owned subsidiaries.

Commenting on the tender win, Ms Olivia Lum, Group CEO and President of Hyflux Ltd, said: “I would like to thank PUB for entrusting us with this second landmark desalination project for Singapore.”
“The new desalination plant will incorporate Hyflux’s proprietary Kristal® ultrafiltration membrane technology for the pre-treatment of the desalination process. This will be the second largest installation of our ultrafiltration membranes in a desalination plant after the world’s largest seawater reverse osmosis plant that Hyflux is developing in Magtaa, Algeria. The onsite generation of power will help us drive higher efficiency and cost effectiveness in operations and maintenance of the desalination plant,” said Ms Lum.

The project is situated on a 14-hectare site close to SingSpring Desalination Plant which was also developed by Hyflux. The SingSpring Desalination Plant has a designed capacity of 136,000 cubic metres per day, while the Magtaa Desalination Plant is designed to supply 500,000 cubic metres of water a day.

“This project demonstrates Hyflux’s ability to put together a technologically advanced and costefficient solution while combining a sound financial offering that meet our client’s requirements.

With the global trends moving to the integration of water and power projects, this is part of our strategy to expand our capabilities and sharpen our competitive edge for large-scale international seawater desalination projects in our key markets,” said Ms Lum.

This project is expected to have a material financial impact on Hyflux for the financial year ending 31 December 2011.

Keppel to build US$195m jackup for Mexico


Keppel Corp said on Monday that Keppel AmFELS LLC, the US subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), has won a contract from Mexico's Perforadora Central SA de CV to build a US$195 million jackup rig.

The rig is slated for delivery in the first quarter of 2013.

Insurance - Enhanced Endowment Policy Suck! (2)

Insurance - Enhanced Endowment Policy Suck!

I have received a letter from XXX Insurance company informing me that annual bonus will be credited on 6 Mar 2011.

After paying premiums for the last 14 years, the Net Surrender Value is 90.4% of the total premium paid and it didn't even breakeven after 14 years.

Read? Saving, Life Insurance and Investing - 2nd Revist

Sunday 6 March 2011

Ken Fisher: Kep Corp. Buy it

Read? Buy American In 2011

As long as energy prices stay fairly high, offshore drilling growth should continue. Singapore's Keppel Corp. (KPELY, 18) is a leader in everything about offshore drilling rigs and is particularly strong in areas outside of the Gulf of Mexico. This includes Asia Pacific, Brazil, the Caspian Sea, the Middle East and the North Sea. It grows nicely and has gained market share, yet it sells at only 14 times estimated 2011 earnings and has a 2.7% dividend yield. Buy it.


I am currently reading his latest book: Money manager Ken Fisher’s latest book is Debunkery: Learn It, Do It, And Profit From It – Seeing Through Wall Street’s Money-Killing Myths (John Wiley, 2011).

Hey, investors in Singapore. Inflation has shrunk your money!

The inflation rate in Singapore was last reported at 5.5 percent in January of 2011. From 1962 until 2010, the average inflation rate in Singapore was 2.73 percent reaching an historical high of 34.00 percent in March of 1974 and a record low of -3.10 percent in September of 1976. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy.

If the inflation rate in Singapore continues to remain high e.g. 5.5%, for the rest of 2011, it is going to be a huge investing challenge for me to beat it as not all my money are into inflation-fighting capable type of returns.

Assuming inflation rate in 2011 is 5.5%

  • Money in CPF OA earning returns of 2.5% (negative returns after inflation is -3.0%)
  • Money in Bank FD earning returns of 0.5% (negative returns after inflation is -5.0%)
I have calculated that the Total Returns on my current portfolio value as on 6 Mar 2011 must be at least 14% in order for me to offset the negative returns in CPF OA and bank FD to match the inflation rate of 5.5% this year. This can be a challenging task in the side way trading stock market.

Investing Made Simple by Uncle8888 (8)

Reading? Investing Made Simple by Uncle8888 (7)

Two-Way Buying Decision

For every completed stock transaction, there are  buyer/buyers and seller/sellers. You may have analysed the stock and decided it is good time to buy; but have you equally put in enough time and effort to analyse why they sell?

Never assume the market is wrong and you are right. As retail investors with limited resources, you are better off to be humble and assume that the market is often right than wrong.

To be contrarian-investor, you may dare to go against the crowd's wisdom; but you may still need to understand the cause and the reason for the sell down.

Is reward-risk ratio high enough to compensate you to go against the crowd? If not, better be humble and assume the market is right and avoid it. There will always be enough opportunities in the market.

Saturday 5 March 2011

Noble Group raises $500 million from upsized placement

Read? More news on Noble Group raises $500 million from upsized placement

XIRR is easy to use

Read? Measure, Measure, Measure (5)

As investors, we should be very concern on Rate of Returns on our investment, and Microsoft Excel function XIRR may be the right tool for us to track and monitor our investment performance.

How to use XIRR?


Values is a series of cash flows that corresponds to a schedule of payments in dates. The first payment is optional and corresponds to a cost or payment that occurs at the beginning of the investment. If the first value is a cost or payment, it must be a negative value. All succeeding payments are discounted based on a 365-day year. The series of values must contain at least one positive and one negative value.

Dates is a schedule of payment dates that corresponds to the cash flow payments. The first payment date indicates the beginning of the schedule of payments. All other dates must be later than this date, but they may occur in any order. Dates should be entered by using the DATE function, or as results of other formulas or functions. For example, use DATE(2008,5,23) for the 23rd day of May, 2008. Problems can occur if dates are entered as text.

Guess is a number that you guess is close to the result of XIRR. (Createwealth8888: you can ignore "Guess")

Read? What is IRR and XIRR and how to Calculate it

Should your child start very young?

Just for Laugh ...

Be Tiger Woods of Golf

 He was a child prodigy, introduced to golf before the age of two, by his athletic father Earl, who was a good standard amateur golfer.

At age three, he shot a 48 over nine holes over the Cypress Navy course, and at age five, he appeared in Golf Digest and on ABC's That's Incredible.[22] In 1984 at the age of eight, he won the 9–10 boys' event, the youngest age group available, at the Junior World Golf Championships.[23] He first broke 80 at age eight.[24] He went on to win the Junior World Championships six times, including four consecutive wins from 1988 to 1991.

Be Warren Buffet of Investing

He was a child prodigy in Investing.

Buffett's interest in the stock market and investing also dated to his childhood, to the days he spent in the customers' lounge of a regional stock brokerage near the office of his father's own brokerage company. On a trip to New York City at the age of ten, he made a point to visit the New York Stock Exchange.

At the age of 11, he bought 3 shares of Cities Service Preferred for himself, and 3 for his sister. While in high school he invested in a business owned by his father and bought a farm worked by a tenant farmer. By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.

Read? The Trouble With Warren Buffett's Methods

Do you think you should send your child to learn golf or investing when they are still in primary school?

Investing Made Simple by Uncle8888 (7)

Read? Investing Made Simple by Uncle8888 (6)

After knowing your investing goal and investing time frame, then you must be absolutely very clear on the expected Rate of Returns that you must achieve to reach that investing goal without any single year of losses.

Here is the Maths:

Once you know the expected Rate of Returns that is required, you may need to formulate the right investing strategy based on your capital level and risks profile e.g. focusing on dividends only may not be enough for you to reach your investing goal in your investing time frame.
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