Critical illness insurance pays you for living? A Wake Up Call Again!

Critical illness insurance – this helps take care of large bills during major illnesses. Critical illness insurance will normally provide a lump-sum payment should you become seriously ill. Although they differ from company to company, typical illnesses and diseases covered by critical illness insurance may include cancer, heart attack, stroke, blindness, Alzheimer’s, kidney failure, etc. A critical illness policy usually has a waiting period for certain diseases or types of surgery. If any disease or type of surgery for which the policy specifics is diagnosed or carried out during the waiting period, no benefits would be paid. You should note that the benefits from a critical illness policy are paid only if the disease or surgery exactly meets the definition in the policy. Definitions of disease are fixed across all insurance companies in Singapore.

Certain critical illnesses have to be in advanced stages to qualify for claims. For instance, only major cancers in stage 3 are able to trigger claims. From the insurance industry’s standpoint, an illness like cancer is relatively common amongt Singaporeans, so insurers cover only the more advanced stages to keep premiums competitive. If all stages of cancer are covered, the premiums would have been prohibitively high and out of reach for most singaporeans.

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Createwealth8888:

Read old posting on? Critical illness insurance pays you for living? A Wake Up Call!

Honestly tell me. Are you fully aware of "waiting period" and "exactly meets the definition in the policy."

Let me know you are fully aware of them and bought it with eyes open wide. It is interesting to know how many people have really bought it with full knowledge.

As people become more aware on availability of early cancer screening, there will be good chance of detecting cancer in its early stage i.e. stage 2. So do you think you are still cover? It is not wise to place all your hope on critical illness coverage to pay for your treatment and medical expenses and have that feeling of peace of mind. It may be wrong!

Investing wisely and compound your returns is still the best form of self-insurance; but it will require you to put in your mind, heart, lots of effort and time in learning the investment skills. Don't worry investment skills can be acquired through learning. If I can do it, I believe you too!

NOL carried 18% more cargo in 4 wks to July 23

SINGAPORE - Singapore's Neptune Orient Lines (NOL), the world's sixth-largest container shipping firm, said on Monday it carried 18 per cent more containers in the four weeks to July 23 compared to a year ago.

NOL said in a statement it shipped the equivalent of 220,200 40-foot containers (FEU) on its vessels in the period, up from 187,400 a year earlier, mainly due to higher shipments on trans-Pacific and Asia-Europe routes.

The average revenue in the period from each container rose to US$3,076, up 39 per cent from a year earlier. -- REUTERS

Judging value in small and mid-cap space

Small caps are inherently riskier, and during a downturn a lot of smaller companies get whacked harder


By TEH HOOI LING
SENIOR CORRESPONDENT

I SPOKE to Singapore-based value fund Lumiere Capital earlier this year. During the interview, one half of its founders, Wong Yu Liang, said: 'If you look at the measurement for the FTSE Small Cap Index, it has dropped 80 per cent from top to bottom. During the Great Depression, the price decline was 89 per cent. So we had a Great Depression in the small-cap sector in Singapore.' Mr Wong's contention was that there was still a lot of value in the small and mid-cap space.

I checked the numbers. The Small Cap Index hit a peak of 1,045.38 points on July 12, 2007. After the world's financial system seized up following the collapse of Lehman Brothers, it plunged to 236.76 points by March 12, 2009. That, to be exact, is a decline of 77 per cent. Not quite as bad as the Great Depression - but bad enough. In comparison, the Mid Cap Index was down 76 per cent, while the bluechip Straits Times Index (STI) shed 67 per cent during that period.

Just as swiftly as prices came down, so they recovered. But there have been different degrees of recovery for companies of different sizes. From the low of 2007, the Small Cap Index has rebounded 126.5 per cent. Its bigger counterpart, the Mid Cap Index, surged 143.2 per cent. And the giants of the stock market, the STI components, just about doubled from the bottom. From another perspective, as at Thursday's prices, the STI was just 20 per cent away from its peak in 2007. But the Mid Cap Index was still 31 per cent below its 2007 peak. And the Small Cap Index? It was still a whopping 49 per cent away from its 2007 high.

Since I'm at it, I decided to compare the performance of these three indices from different starting points up to this week. The charts show the movements of the three indices over time from various starting points. As you can see, the Small Cap Index is almost consistently at the bottom - that is, the worst-performing index.

For example, from Aug 31, 1999 until this week, the Small Cap Index actually lost 42 per cent of its value. In contrast, the Mid Cap Index was up 43 per cent, while the STI gained 38 per cent.

The Small Cap Index under-performed both the Mid Cap Index and the STI in all but one of the past 11 years, assuming one had invested at the start of each year since 2000 and held on until this week. Only from the start of 2009 until now did the Small Cap Index manage to pip the STI. And it never matched the performance of the Mid Cap Index. Perhaps current depressed valuations for small-cap stocks have something to do with index's dismal return numbers. So I calculated the rolling one-year, two-year, three-year and five-year returns of the three indices between Aug 31, 1999 and Aug 12, 2010. There were, for example, 2,498 one-year periods between that period. And there were 2,248 two-year periods, and so forth.

I then found out the median return of the various holding periods for the three different indices. From the second table, you can see that again, the Small Cap Index is the worst performer. The median one-year holding period was -4.1 per cent. This compared with 11.2 per cent chalked up by the Mid Cap Index, and the 9.3 per cent by the STI. In other words, for one-year holding periods, the Small Cap Index under-performed the Mid Cap Index by a whopping 15.3 percentage points, and it trailed the STI by 13.4 percentage points.

The under-performance of the Small Cap Index over two-year holding periods was even bigger, at 27.8 percentage points relative to the Mid Cap index and 15.4 percentage points relative to the STI.

Logically, the findings make a lot of sense. Small caps are inherently riskier. They don't generally have the wherewithal to defend their turf should a bigger competitor decide to come in. Bankers and suppliers are generally less forgiving of smaller companies. And smaller companies generally do not have the capacity to dangle a big enough carrot to attract top management talent. Which is why during a downturn, a lot of smaller companies get whacked harder. And some of these whacks can be fatal.

Smaller companies also typically face an uphill task in trying to grow to the next level. The lack of suitable management talent may be one factor. Then there is the lack of experience in managing expansion, in pacing growth at a sustainable level, instead of trying to go for far too much, far too fast. As a result, many smaller companies get tripped up when an unexpected downturn comes along. The big caps of course have a sturdier ship to steer through choppy waters. Hence their returns are typically rather decent.

But the bigger returns can be had from mid-cap companies. These are companies that have gone through the growing pains, chalked up the enough experience to manage growth, and have relatively larger pool of financial resources and more muscle to get up to the next league. My findings confirmed a previous study I carried out. Earlier this year, I looked at the returns of stocks in Singapore over the past 10 years based on the various groups' initial market caps. I found that stocks with market cap of between $1 billion and $5 billion to be in a sweet spot from which to grow their business. They were the best-performing group in the 10 years to 2009. Of the 27 stocks in that category, the median total return was 10.1 per cent compounded every year for the past 10 years. The average was 10.9 per cent. The return included dividend yield.

I noted then that the second best hunting ground for stocks likely to survive the market's ups and downs was in the $500 million to $1 billion market-cap range. The median return of the 18 stocks in that group was 6.8 per cent a year for the past 10 years, with the average at 4.5 per cent. Companies smaller than the $500 million market-cap level have, on average, yielded negative returns in the past 10 years. While size matters, companies that are too big can find it cumbersome to grow as well. Of the 10 companies whose market cap exceeded $5 billion at the start of 2000, the median return was 2.9 per cent a year, and the average was -0.6 per cent.

Hence the past 10 years' record shows that on the whole, investors have a better chance of picking a decent 'buy-and-hold' candidate among companies with market cap of $500 million and above. The chance of picking a 10-year winner there is 75 per cent, whereas for stocks smaller than $500 million, the chance of landing a winner is about 46 per cent.

Not only that, for the small-cap stocks that didn't make it, the likelihood of them tanking royally is greater. Today's findings show that perhaps one year is too long a holding period for small caps.

Equities are sure win in the long run?

YOUR LETTERS in thesudaytimes August 15, 2010

He wrote: "Equities are sure win in the long run. All other strategies are sure lose."

Not sure anyone out there who are active investors in equities can agree on this?

Yes, I can agree on this but read carefully. Ha ha!

In the long run, all retail investors will be dead!

Dead man or woman doesn't lose but their next generation retail investors (their children) will sure win as they got these stocks free-of-charge from their dead parents.

Fundamental or Technical Analysis? - Revisit 3

Arising from Genting stock price surge, there was another long debate on FA and TA stuff and someone (if I am not wrong, he is a market senior citizen) concluded that FA and TA are just crap.

I tend to agree and I think that I am not alone on these.

"Much of technical analysis is magical mumbo-jumbo that people think will tell them where the markets going. And it never will. It's just a bunch of nonsense. Unfortunately, I've also participated in it" - Larry Williams

Read old posting on? Who is Larry Williams?
 
"I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities." - Benjamin Graham

Read old posting on? What did he really say?
 
Read old posting on? Hey! You can't combine FA and TA - III
 
Read old posting on? Analyst's Company Report or DIY analysis? - It is just numbers guessing game and you can never, never get it right most of the time.
 
These are the reasons when I become more experience and more savvy in investment, I realize that I have to spend less time on stock analysis - TA and FA and still get positive returns from the market. This is known as investment productivity gains - more returns per unit time spent on stock analysis.

 

If you keep spending more and more time on stock analysis, then your investment productivity is low. It is time for you to wake up and improve your investment productivity.

Investing should be simple (not easy hor!) once you become savvy and experience in investment strategies and doing it well shouldn't be consuming so much of your life doing it even though you can claim you are enjoying it but can you confidently say that your family are enjoy it too? Stop kidding! This may be a big joke to them. Give a serious thought on it especially when you have young kids!

Improving your investment productivity is the way to go!

Me, No multi-baggers :-( Revisit

Me, No multi-baggers :-(

Since we are talking on multi-baggers; I can't help myself to catch  this advertisement in The Straits Times paper (may be everyday also have this ads) showing in big and bold wording : MULTI-BAGGER STOCK PICKER

His three multi-baggers are Olam, Ezra and Raffles Education.

I am wondering how many retail investors will believe him and are willing to pay $X,XXX to attend this "How to pick mulit-baggers" course?

Similarly, somehow I think I may be "qualified" to place an advertisement here.

WELCOME TO MINISTRY OF WEALTH

You may discover the secret of picking up few multi-baggers at the next Bear market for FREE. LOL

Createwealth8888 has picked three multi-baggers like:

Besides that Kep and Semb Corp are also high dividend yield stocks

at 26.2% and 20.5% respectively in FY09

Noble's Q2 net profit falls 65% despite record quarterly revenue

By ANGELA TAN


commodities related Noble Group Ltd reported on Thursday that its net profit for the second quarter ended June 30, 2010 fell 65 per cent from a year ago to US$85.88 million.

Excluding one-off gains, the adjusted quarterly net profit was US$47.2 million in second quarter 2010 compared to US$94.8 million in second quarter 2009.

The group achieved a record quarterly revenue of US$12.92 billion, up 80 per cent from a year ago.

The higher revenue level was due to the comparably higher commodity prices compared to a year ago as well as the shift in its revenue composition to include higher priced oil and gas products.

Sembcorp's Q2 net profits gain 13.6%

By JOYCE HOOI


SEMBCORP Industries posted a 13.6 per cent increase in its net profit for the second quarter of 2010, from S$141.9 million a year ago to S$161.2 million.

Revenue fell 12.2 per cent year-on-year to S$2.14 billion.

For the first half of the year, net profit was up 16.2 per cent to S$320.1 million, while revenue was at S$4.54 billion, S$800,000 lower compared to the same period last year.

Earnings per share for Q2 and H1 2010 stood at 8.97 cents and 17.83 cents respectively, up from 7.92 cents and 15.40 cents the corresponding periods the year before.

Me, No multi-baggers :-(

Read? Opportunity In The Stock Market?

Stop throwing away your Touchstone!

Excuse me, are you a value investor?

Read? Value Investing - It is about multi-baggers!

You are a Value Investor only when you have these two characteristics in your portfolio:

1. A few multi-baggers stocks
2. High dividend yield only to you but low dividend yield to the new buyers

If you don't,  probably you are still an income investor and can't really called yourself value investor yet.

By applying the theory of Chemistry doesn't make one a Chemist, right? Similarly by applying the theory of value investing can one call himself/herself a value investor?

When to cut losses?

Read? So hard to sell!

Know how to buy!

Know how to sell too!

It is better to be a willing buyer and a willing seller.

It is very sad to let Market force you to sell either out of frustration or hopelessness.  Even you can say you are immune from losses; but honestly it will still hurt to some extend unless it is not your own money that you have lost.

When to cut losses?

I believe it is extremely difficult to find investors/traders who don't suffer a few big losses in their investing/trading life-time. Even Warren Buffet and George Soros have made big losses more than once.

Learn to bite the bullet and hit the sell button to cut losses when you have other stocks in your mind for quite some time but you have no more money left to buy.  When you do that, in fact you are just changing from a dying horse to another non-dying horse. A dying horse can also recover but when?

You don't need to win back in the same manner that you have lost!

Treasury Bond Yields Pointing To a Bear Market For Stocks

By: Jeff Cox

CNBC.com Staff Writer

In the latest battle over who does a better job of forecasting market movements, bonds are sending a strong signal that a bear market for stocks is right around the bend.

Key Points

A 1.20 percentage drop in the 10-year Treasury yield foretold bear markets for stocks in 1990, 2000 ad 2007.

Investors continue to pour money into bond funds, even after an 8.5 percent stocks' gain since July 1.

Since hitting its most recent high yield of 4.01 percent on April 5, the 10-year Treasury bond has slid more than 1.20 percentage points, a metric that signaled in 1990, 2000 and 2007 that a steep drop in stocks was only two months away, according to research from Gluskin Sheff strategist David Rosenberg.

With the 10-year yield at 2.79 percent in Tuesday trading and the bond market still red-hot despite continued predictions of its demise, the big bear indicator is looming large.

"Declines of this magnitude very often presage the onset of bear markets and recessions," Rosenberg says. "Typically, equities and then economists are late to the game...What is key to note is that the bond market is the tail that wags the stock market's dog—it leads."

Whether the bond market again is foretelling a bear market—a 20 percent drop in stocks from the most recent high—is part of a long-running debate over who does a better job forecasting—stock or bond investors.

Conventional wisdom is that bond investors tend to be more conservative and thus less influenced by fear and greed. That's cited as the reason by some that the bond market does a better job of getting the economy right.

"With all due respect to the stocks guys, the bond guys, when it comes to the economy, tend to sniff things out a little earlier and eventually get things right," says Mike Larson, analyst at Weiss Research. "Bond yield levels have given you key insight into what's going on in the economy. The verdict in my mind is pretty unmistakable."

The concern over what bond market movements portend for the economy come as Wall Street awaits word from the Federal Reserve on what its plans are to juice the economy. The Fed's Open Market Committee meets Tuesday to discuss rates and possible future quantitative easing measures, though some think the central bank has become less an influence after three years of aggressive policy moves.

In the meantime, economic signs, particularly in employment and consumer and business sentiment, are progressively weakening, indicating that if deflation is not on the horizon, then strong economic growth is unlikely either.

"At this pace it would take several years to get back to the level of employment we had before the recession," Larson says. "That speaks volumes about what the true underlying condition of the economy is. To me, the stock market is the odd man out."

Indeed, investors seem to be rendering the same verdict, if not in the recent movement of the stock market—where the Standard & Poor's 500 [.SPX 1121.06 -6.73 (-0.6%) ] has rallied 8.5 percent since July 1—then at least as far as fund flows are concerned.

Equity fund outflows for the most recent reporting week were $688 million, while bond funds saw inflows of $2.1 billion, continuing a trend that has seen the $2.55 trillion taxable bond market average $7.22 billion in inflows per week for the year, according to Lipper data.

Money market funds and their next-to-zero yields also reflected the desire for safety with just shy of $14 billion of inflows for the week, bringing the cash-on-the-sidelines total to $2.82 trillion, according to the Investment Company Institute.

Those eye-popping totals come on top of the nearly $2 trillion in cash that corporations have on the sidelines.

"Why do nonfinancials have a trillion-plus in cash equivalents? There is a reason they do—it's uncertainty out there," says Bob Andres, CIO and wealth strategist for Merion Wealth Partners in Berwyn, Pa. "It's not that they're simply borrowing money at a very low cost and putting money on the shelf. They don't see the opportunity out there. That works against the equity market."

To be sure, the sustained rise in bonds also raises the question of how long the move can last, and whether the driving down of interest rates could be something that ultimately leads to growth.

"Conventional wisdom was when (the 10-year yield) broke three (percent) it was somehow bad," says Kevin Ferry, president of Cronus Futures Management in Chicago. "We're much more inclined to say generationally low funding cost for American companies is extremely beneficial in the medium term. The real trick is going to be how much stress the market can stand."

And there's also the possibility that the bond market is simply wrong and that the economy has only been caught up in a "soft patch" as some bullish economists have opined.

"The extreme pessimism and fear which has been driving bond yields to historic lows is a little bit overdone," says Burt White, chief investment officer at LPL Financial in Boston. "The possibility of a double-dip is minimal. The Fed is going to watch this very closely, and if they feel that we are beginning to see a GDP decline quicker than what they would anticipate or if you're starting to see deflationary pressure creep in, you'll see them put in quantitative easing techniques to put a floor underneath this."

But if the bond market is right and the economy goes beyond the soft patch and into a swamp, stock investors might wish they had paid closer heed.

"I believe the bond market does a much better job of evaluating economic conditions," Andres says. "They're more rational. The equity market is driven more by greed. On top of that, you have Street-side economists always overly optimistic. They love to talk the market up. I think bond guys are smarter."

The Cruel Math of Big Losses - II

Read The Cruel Math of Big Losses

Why I like to diversify into 20-25 stocks of different sectors by building a Noah Ark portfolio - a pair of each kind is good enough to survive the Great Flood.

I could afford 1 stock in the Noah Ark portfolio to wipe out 5% of my total capital and the rest of 19 stocks just need to make 5.3% each for the portfolio to breakeven.

When a portfolio is too diversify, we can't make fanastic gain neither do we lose so badly.

UOB 5.05%NCPS 100 PREFERENCE SHARES

Createwealth8888:

Interestingly, perference shares are traded like ordinary shares in SGX but it still function like Fixed Deposit when it comes to computing of dividends (like interests) payment.

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Singapore, 10 August, 2010 - United Overseas Bank Limited wishes to announce the following in respect of the forthcoming payment of semi-annual one-tier tax exempt dividend on its Preference Shares (trading name: UOB 5.05%NCPS 100):


Dividend Period = 15 March 2010 up to, but excluding, 15 September 2010

Number of days = 184

Dividend Rate = 5.05% per annum (fixed)

Basis of Calculation of Dividend = Number of preference shares held


x Liquidation Preference of $100 per share x 5.05% x 184 days / 365 days

Dividend Payment Date = 15 September 2010

Record Date = 2 September 2010 at 5.00 pm

A Guide to Real Estate Investment Trusts (REITs)

Read and understand the risks:  A Guide to Real Estate Investment Trusts (REITs)

Could you live with just 100 things?

Purchase Power: Will It Make You Happy?

'100 Thing Challenge' advocates liberation from the consumer lifestyle. It might even save you some money.

The 100 Thing Challenge is about breaking free from the spurious message of American-style consumerism that has turned many of us into habitual shoppers. It is about the humble admission that we cannot buy perfection no matter how many times we visit the mall, because we humans cannot be perfect. The 100 Thing Challenge is about removing our facade of consumer stuff to reveal our real selves. And it is about the finding joy.

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Createwealth8888:

• Two of the things I have got rid off - watch and alarm clock. I don't need them anymore instead I use my mobile phone to tell time and set alarm to wake up.
• I rarely carry a pen unless I go overseas and need the pen to fill up form. Most of the time if I need to jot down some notes I use my mobile phone's notepad.
• I can't even recall when did I last bought a book to read. Nowadays I borrow them at the library.
• I don't even have driving licence.
• I don't smoke.
• I rarely eat sweets.
• I don't wear any accessories such as gold chain. I only wear wedding ring (sufferRing LOL)
• I don't use hair-cream to keep my hair nice and steady. Anyway, my hair still look neater than Albert Einstein's hair.
• I don't use Men's Cologne as I don't need to attract mei mei.

Purchase Power: Will It Make You Happy?

By: Stephanie Rosenbloom
The New York Times

She had so much.

A two-bedroom apartment. Two cars. Enough wedding china to serve two dozen people.

Yet Tammy Strobel wasn’t happy. Working as a project manager with an investment management firm in Davis, Calif., and making about $40,000 a year, she was, as she put it, caught in the “work-spend treadmill.”

So one day she stepped off.

Inspired by books and blog entries about living simply, Ms. Strobel and her husband, Logan Smith, both 31, began donating some of their belongings to charity. As the months passed, out went stacks of sweaters, shoes, books, pots and pans, even the television after a trial separation during which it was relegated to a closet. Eventually, they got rid of their cars, too. Emboldened by a Web site that challenges consumers to live with just 100 personal items, Ms. Strobel winnowed down her wardrobe and toiletries to precisely that number.

Her mother called her crazy.

Today, three years after Ms. Strobel and Mr. Smith began downsizing, they live in Portland, Ore., in a spare, 400-square-foot studio with a nice-sized kitchen. Mr. Smith is completing a doctorate in physiology; Ms. Strobel happily works from home as a Web designer and freelance writer. She owns four plates, three pairs of shoes and two pots. With Mr. Smith in his final weeks of school, Ms. Strobel’s income of about $24,000 a year covers their bills. They are still car-free but have bikes. One other thing they no longer have: $30,000 of debt.

Ms. Strobel’s mother is impressed. Now the couple have money to travel and to contribute to the education funds of nieces and nephews. And because their debt is paid off, Ms. Strobel works fewer hours, giving her time to be outdoors, and to volunteer, which she does about four hours a week for a nonprofit outreach program called Living Yoga.

“The idea that you need to go bigger to be happy is false,” she says. “I really believe that the acquisition of material goods doesn’t bring about happiness.”

While Ms. Strobel and her husband overhauled their spending habits before the recession, legions of other consumers have since had to reconsider their own lifestyles, bringing a major shift in the nation’s consumption patterns.

“We’re moving from a conspicuous consumption — which is ‘buy without regard’ — to a calculated consumption,” says Marshal Cohen, an analyst at the NPD Group, the retailing research and consulting firm.

Amid weak job and housing markets, consumers are saving more and spending less than they have in decades, and industry professionals expect that trend to continue. Consumers saved 6.4 percent of their after-tax income in June, according to a new government report. Before the recession, the rate was 1 to 2 percent for many years. In June, consumer spending and personal incomes were essentially flat compared with May, suggesting that the American economy, as dependent as it is on shoppers opening their wallets and purses, isn’t likely to rebound anytime soon.

"I really believe that the acquisition of material goods doesn’t bring about happiness."

On the bright side, the practices that consumers have adopted in response to the economic crisis ultimately could — as a raft of new research suggests — make them happier. New studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo the Joneses.

If consumers end up sticking with their newfound spending habits, some tactics that retailers and marketers began deploying during the recession could become lasting business strategies. Among those strategies are proffering merchandise that makes being at home more entertaining and trying to make consumers feel special by giving them access to exclusive events and more personal customer service.

While the current round of stinginess may simply be a response to the economic downturn, some analysts say consumers may also be permanently adjusting their spending based on what they’ve discovered about what truly makes them happy or fulfilled.

“This actually is a topic that hasn’t been researched very much until recently,” says Elizabeth W. Dunn, an associate professor in the psychology department at the University of British Columbia, who is at the forefront of research on consumption and happiness. “There’s massive literature on income and happiness. It’s amazing how little there is on how to spend your money.”

CONSPICUOUS consumption has been an object of fascination going back at least as far as 1899, when the economist Thorstein Veblen published “The Theory of the Leisure Class,a book that analyzed, in part, how people spent their money in order to demonstrate their social status.

Hey! You can't combine FA and TA - III

Read? Hey! You can't combine FA and TA - II

Read? Fundamental or Technical Analysis? - Revisit 3

By now, you may know that I am NOT a big fan on either FA or TA. But, I believe that FA or TA is just part of the process of stock analysis. There is no need to go to the extreme of either techniques to be equally effective in making good returns on investment. Stock analysis is how we begin our investing journey and not the destination. FA and TA can play complementary role to each other and they are not mutually exclusive as most of the time our brains can handle conflicting views and reconcile them to arrive at more moderate views.

Read? Help me! I am still losing money in my Investment Quadrant - Part 1

Read? Time: The Most Precious and Fairest Commodity Of All

Why I am not a big fan of in-depth FA?

Because of Time. Yes, it requires too much time to do it well.

"Time is the most precious and fairest commodity of all. Kings or Peasants and everybody has the same amount of time, no more or no less. 24 hours a day" - Createwealth8888


In-depth fundamental analysis of a company business will require us to put in plenty of time, effort and energy to do it well especially when we still have full-time job. Some of us may even sacrifice their annual leaves to attend companies' AGM to get close to  the Management to ask a few questions here and there to clarify their doubts and to increase their understanding of company businesses and future plans and thinking that their attendance at AGMs may arm them with edges over others who are not doing it.

BTW, do we see institution investors at AGM? No, right! It is quite obvious that AGM is the not right venue to grill the Management.

As employees the number of annual leaves are limited; but some of us may instead of using their annual leaves to spend more time with family and especially young kids, they trade off their most precious and fairest commodity of all - time and spend it with the company's Management who are there at AGM during their official working hours.

Make no mistake about it. We definitely need to spend enough time, effort and energy on our investment to get better returns. But since I am not willing to spend too much time on FA, then I will need other way to make it up. I find that TA is a good mean to complement this lacking in FA to complete this stock analysis process and get the job done.

TA can help to complement the lack of in-depth fundamental analysis.

The whole market and stock sentiment is shown in the chart and don't under-estimate its usefulness. It does serve a definite and useful purpose. Thing that is useless to human being will soon be obsolete. Can you still recall those things are useful in your childhood days but they are not around now as they become useless?

Market is full of smart investors and money managers

Market is never short of full-time analysts assisting their portfolio managers to filter out good stocks. Market is also never short of full-time smart money mangers such hedge funds, private and institutional investors looking for better returns for their investment. When they uncover them, they waste no time and will jump into them without further delay. All these traces of buying and selling activities from the big boys will be captured in the chart. There is no way for the big boys to hide their footprints.

The recent price and volume surge in Informatics is a good example how Peter Lim and by his tons of followers drove this stock crazy and provide huge returns for its early investors.

The nice thing about TA is that it requires so much less time and effort to do stock analysis once you are experience enough to do it. A skillful chart reader can easily analyse the stock chart patterns for a buy, sell or hold decision in less than 5 mins per chart. It is possible to read many charts in one hour. How many companies can you analyse using FA in one hour?

Less but not More

When we become more and more experience and more and more savvy in investment, we should aim to reduce the amount of time, effort and energy required for stock analysis instead of spending more and more time into our stock analysis and then trade off the most precious and fairest commodity of time for other equally important thing in life especially for those with young family.

Unlike senior citizens or retirees who have plenty of spare time to attend AGMs for free makans or when there are no AGMs some of them may spend many hours at the beach grazing sea-waves or fishing where obviously they know there are so few fishes to be caught.

Diversify and Control the Risk

In addition, I mitigate the risk of picking up wrong companies due to lack of in-depth fundamental analysis by diversifying into more companies e.g. 20-25 counters in different sectors so that I could still afford  a few "bad" companies in my portfolio going bankrupt without any serious financial damage to the portfolio.

BTW, the top 20 blue chips with good dividend yield in STI rarely go bankrupt. So don't worry too much if someone happened to ask you as I can't recall any since the last two great STI bears. When the company doesn't go bankrupt sooner or later, its price may catch up or you wait long enough to collect dividends similarly you will get back your capital.

Every Bull and Bear market may impact you differently. Beware!

Someone said  "I'd prefer to view the viability of any method through at least 1 bull and bear market cycle, rather than number of years."
"Keke, what i meant in Singaporean terms was "I've been through 1 bull, 1 bear, then still unscathed. So i qualify to come and hao lian around :)"

Beware! The next few bull and bear markets may impact each of us differently depending on where we are in the stage of investing life cycle i.e. our level of financial resources, financial commitment, size of portfolio and size of investing account. So the experience of encountering the earlier and later bull and bear markets can be different and impact may also be different. The experience of earlier bull and bear may not be directly transferable to the management of expectation of future bull and bear markets.
 
Let me share my own experience on the two great STI Bear markets:

1. During 1997/98 Asian Financial crisis STI dropped -68.0%
2. During 2008/09 US sub-prime crisis STI dropped  -62.4%

The Great Bear of 1997/98 didn't really hurt me much. I didn't personally feel that it was a Great Bear even though  STI has dropped -68.0%; but I have witnessed some relatives' lives almost  destroyed by their investment losses.

At that time, I have smaller account size for investing and with a smaller portfolio in the stock market the financial losses was smaller too so not too much financial impact. And also at that time, there was no online trading and we have to trade through brokers. It was not easy for small retail investors to trade frequently through brokers. Since I couldn't trade more even if I have wanted and the number of positions in the market was indirectly capped.

But, in the last Great Bear 2008/09, my account size and portfolio was so much bigger than in 1997/98 so  the financial losses caused by the last bear was much bigger. Furthermore with the availability of online trading, I could trade whenever I wanted and that has resulted in having too many positions in the market and escalate the losses further.

In conclusion

When our investing account is smaller we lose small. When we lose small it may be not too difficult to replace the loss by saving harder e.g. when we lose $30K we can replace it by saving harder.

When our investing account is much bigger we may lose big and replacing a big loss through mere saving may be very tough e.g. when we lose $300K do we think it is easy to replace $300K loss by just saving alone?

When we were younger at early 30s or late 20s losing $30K during 2008/9 Great Bear may not be big deal; but when we are older at late 40s or early 50s losing $300K at the next Great Bear may be living hell to some of us as we may be wondering how to fund our kids future university education and our own retirement.

So the impact we may feel in the future bear and bull markets may be different can be quite obvious depending where we are in our investing life cycle and stages of life.

Volume and Price action?

You may often hear this: "without supportive volume a price movement has no conviction" or in another word due to demand and supply of the stock. More demand than supply i.e. more new buyers are willing to buy it higher. More supply than demand i.e. more new sellers are willing to sell it lower.  The new players are the key to drive the price further in either direction.

Some time, we have seen huge volume but with little price movement. Often in such cases, there are little or no new buyers and sellers but may be just transferring of share ownership among current holders. Without more new players coming to the market, price is unlikely to move much.

Similarly, can we say this: "high volume without supportive price movement has no conviction?".

What do you think?

Invest in bonds for retail investors?

Read? SGX launches initiatives to enhance listing, trading of fixed income products

Weekly SGS 15-Year Bond Yield from 2005 - 2010 : 2.77% - 3.57% (range is only 0.8%) and Corporate bonds A rated can be 2% higher than SGS.

Fixed Income Strategy

By spreading out the market risk using a portfolio of SGS, Corporate bonds A rated and Dividend Yielding stocks (at least 8%), it is possible to generate at least 4% returns. 

Olam makes its mark in US$250m bond issue

Createwealth8888:

You may want to look a closer look at Olam if you haven't. Bondholders are not known to be high risk takers and shown lots of confidence in Olam's long-term prospects.
------------------------------------
By SIOW LI SEN


COMMODITY player Olam International yesterday sold US$250 million worth of 7.5 per cent, 10- year bonds - the first unrated Singapore company to do so in international debt markets.

A jubilant banker close to the transaction said that, for international markets, bonds normally have to be rated.

'Many investors in their mandates can't buy unrated paper,' he said.

HSBC and JPMorgan acted as joint lead managers and joint bookrunners for the sale of Olam's US dollar bonds.

For Olam, which counts Temasek Holdings as its second largest shareholder with 14 per cent, this debut in the international debt market has several firsts. It is also the first unrated company in the supply chain industry to tap international markets, and this is its first long-term debt.

'Companies like Noble and Cargill are all rated,' the banker said.

'To be able to access the market as unrated is one thing, but to also be able to borrow for 10 years is another,' he said.

Olam did carry out extensive meetings with investors in Singapore, Hong Kong and London to prepare for its inaugural issue.

Investors were impressed with the strong credit story, its business and its management, he said.

Olam chief executive Sunny George Verghese said the debut bond offering has diversified the group's sources of funding from banks to the capital markets.

Investors were impressed by Olam's unique global position in the world's agricultural industry, he said.

'We are in 20 agricultural commodities and in 64 countries - a footprint that gives us significant edge and competitive advantage,' he said.

Olam was established in 1989 by the Kewalram Chanrai Group (KC Group), which has more than 140 years of trading history.

The KC Group currently owns 22.8 per cent of the total issued share capital of Olam.

Olam's key management team holds about 10.3 per cent, including Mr Verghese's 4.4 per cent.

The company has been on an acquisition spree. Over the past three years, it has made 17 acquisitions which cost about US$1 billion.

Hey! You can't combine FA and TA - II

Read? Hey! You can't combine FA and TA.

What strategies does the Master Chess player good at?

 What strategies does the Master Soccer coach good at?

What strategies do they have in common?

Master Chess player and Master Soccer coach are both good at defence and attack strategies. They are less likely to depend  on one strategy to win many games. Most of the time to win many games, they have to be effective in deploying both defence and attack strategies.

Stock picking is part science (FA), part art (TA), part luck, part intuition, and always uncertain - "not precisely knowing."  (Author unknown)

FA can be thought as Defensive Strategy

In a defensive stratgey, you try to win by not Losing.

In FA, you defend your position by using strong protections such as high margin of safety, low debts, cash rich, low PE, high dividend yield etc ...

You believe that you are well protected in a foxhole staying calm and cool while waiting for good days to come. What happening outside the foxhole are irrelevant

You show no or little concerns over day-to-day stock price movement as the fundamental of a company seldom change every day.

TA can be thought as Attack Strategy

In an Attack Strategy, you try to win by Winning.

In TA, you identify your own set of winning patterns among the ever-changing patterns in the Market and attack it once you can identify it.

But you don't have much protections other than your own ability to recognize what is dangerous, what is safe what is opportunity and what is trap in the Market with whatever tools available and known to you?

Similarly, the concepts are true for retail investors who believe in income investing or profit realizing strategy. Their feeling towards falling and rising stock price can be different.


Just Dividends Only - Defence Strategy


You try to win by not Losing.

You win by collecting regular stock dividends but when stock price is falling you don't feel that you are losing as you are expecting another round of stock dividends coming soon.

When the stock price is rising, you may be happy about it but you can't really claim that you are winning yet.

Profit  Realizing - Attack Strategy

You try to win by Winning.

When the stock price rises to your profit target level, you win by realizing your profit and you begin to look forward to another round of winning.

When stock price is falling, you will soon feel that you are losing even though you haven't lost yet until you have cut losses.

Conclusion

Feeling good most of the time will fuel better investing success so I rather use both defense and attack strategy so that when stock prices are falling I won't feel that I am losing but when stock prices are rising I have won. Whenever I won, it is real money in the pocket. Shiok, right?

Retire early, live longer?

Read? Retire early, live longer

Read? No truth to retirement-lifespan link

Createwealth8888's version of argument

"Retire early from rat race, get a life!" - Createwealth8888

Read the wise words from Anna Quindlen's Commencement Address at Villanova

Probably, some of us may have a Bucket List - A list of things to do before we die. Comes from the term "kicked the bucket".

If we can retire early from the rat race, then we may have more time and energy to fullful some if not all of things to do in the Bucket List.

Hey! You can't combine FA and TA.

Read? Combining FA and TA. Yes, you can!

Borrow the idea from La Papillion

** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."

I am going to do another BIAS!

Stock picking is part science (FA), part art (TA), part luck, part intuition, and always uncertain - "not precisely knowing."

Seriously, have you come across any smart student who will tell you that he/she can't do well in both Science and Art subject at the same time. Most likely you will hear this from dumb student that they can't.

So what must these students do? They look for tutor like La Papillion to coach them to success and become smart students again.

Rotary Engineering posts highest half year revenue of S$389m

announces interim dividend of 1 cent per share

SINGAPORE, 6 August 2009 – Mainboard-listed Rotary Engineering Limited (Rotary) today reported its half-year results for six months ended 30 June 2010. The Group turned in record revenue of S$389.2 million with net profit attributable to shareholders (PATMI) of S$27.5 million. These compare with S$296.1 million and S$17.4 million respectively in the previous corresponding period.

In appreciation of shareholders’ support, the Board of Directors has recommended an interim dividend of 1.0 Singapore cent per share, which works out to a dividend payout ratio of 20% based on first half 2010 profits.

With the 31% increase in revenue, the Group also saw its gross profit rise 23% to S$70.4 million from S$57.1 million in the previous corresponding period. Its gross profit margin remained stable at 18% and earnings per share edged up to 4.9 cents for the period against 3.1 cents in first half 2009.

The Group’s revenue for the latest reporting period was derived largely from its megaproject in Saudi Arabia, a US$745 million EPC contract from Saudi Aramco Total Refining and Petrochemical Company (SATORP) to build a refinery tank farm at Jubail.

NOL Group swings to US$100 million net profit in second quarter

Group revenue up 53%; shipping volume improves; Logistics revenue 45% higher


SINGAPORE, 6 August 2010 – Global container shipping and logistics group Neptune Orient Lines (NOL) today reported a net profit of US$100 million for the second quarter of 2010. That was up from a net loss of US$146 million in the second quarter of 2009.

The Group’s Core EBIT (Earnings Before Interest and Taxes) for the quarter was US$114 million compared to a Core EBIT loss of US$131 million in the same quarter a year ago. Second quarter 2010 revenue increased 53% to US$2.1 billion.

“Continued strong container shipping volumes and improving freight rates have helped return us to profitability,” said Group President and CEO Ronald D. Widdows. “The result for this latest quarter reflects significant progress as we turn around our performance from the economic downturn of 2009.”

NOL reported Core EBIT (Earnings Before Interest and Taxes) of US$40 million for the first half of 2010, compared to a US$353 million Core EBIT loss a year ago. Revenue in the first half increased 44% to US$4.2 billion. Net profit for the first half of 2010 was US$1 million, compared to a net loss of US$391 million in the first half of 2009.

The Group said it will not pay an interim dividend to shareholders. However, the Group will consider a final dividend to be paid based on its current policy of paying an annual dividend of 20% of net profits after tax.

Combining FA and TA. Yes, you can!

Borrow the idea from La Papillion
 ** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."

I am going to do a BIAS!

Read this post on Combining FA and TA
 
Let me show you it is possible to hold and trade, collect dividends and realize profits across market cycles since 2001 by using my oldest and favourite mistress - Kep Corp as case study.
 
FA - Dividend Yield

• Full year dividend yield in 2009 for Kep Corp  = 5.3% (interim $0.15) + 8.1% (final $0.23) = 13.4%
• 2010 H1 Interim dividend is $0.16 and that gives me 5.6% yield

Look at its past dividend history

The true test of a solid company is the one that provides consistent regular dividends and

better still if it occasionally gives out special dividends or does capital reduction distribution.

TA

I have traded Kep Corp 93 rounds since 2001 and that is across market cycles.

Pillow Stock

Kep Corp is my pillow stock since 2001 to collect dividends

Read? Pillow Stocks Strategy

Read? Trading Kep Corp

Conclusion

Combining FA and TA. Yes, you can!

HYFLUX DELIVERS 9% RISE IN 1H NET PROFIT AND DECLARES FIRST INTERIM

• First-half revenue increases 9% to S$241.7 million
• Net profit growth for half year up by 9% to S$33.7 million
• Maiden interim dividend declared at 1.0 Singapore cent per share
• Mitsui joint venture to capture growth opportunities in China’s water sector

One says you can't time the Market. The other says yes, you can!

Who is right?

Can we time the Market?

Yes, you can time your own Market! Why not?

You alone determine the buy price that you are happy with and then wait for it to come to you. When it comes; you just buy it! Period.

You alone determine the sell price that you are happy with and then wait for it to come to you. When it comes; you just sell it! Period.

The whole problem is that people keep adjusting their buy and sell price according to how they perceive the market is doing? Then you can't time the market. Few people can. May be you are of those rare few who can.

SGX launches initiatives to enhance listing, trading of fixed income products

Createwealth8888:

By H1 2011, we small retail investors should be at level playing field with bonds and stocks; and effectively we are our own Fund Manager. Thank you! Mr Magnus, new CEO of SGX.

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SINGAPORE : Singapore Exchange (SGX) has launched its first initiatives to enhance the listing, trading and distribution of fixed income products to build a more vibrant bond market in Asia.


These initiatives include drawing more Singapore-listed companies and other organisations to issue bonds for listing and trading on SGX.

The listing and trading of fixed income securities such as preference shares and convertible bonds will also be encouraged.

SGX also plans to halve the time taken to approve bond listings by streamlining the processes involved.

By the first quarter of next year, SGX expects to offer an on-exchange secondary market for individual and institutional investors to trade Singapore Government Securities (SGS).

SGX's Central Depository has been a custodian of individual investors' SGS holdings since April 1 this year.

A total of 1,229 bonds are currently listed on SGX.

In fiscal year 2010, 200 bonds were listed involving programmes to raise over S$100 billion.

SGX has also appointed Ms Tng Kwee Lian, formerly from UOB Asset Management, as Senior Vice President and Head of Fixed Income to drive the promotion of bond trading to high net worth and individual investors.

President of SGX Gan Seow Ann said SGX offers an unparalleled value proposition to issuers and investors of bonds.

That's because issuers can leverage on SGX's international distribution platform while market participants will have access to one of the world's leading trading venues.

- CNA/il

CapitaLand achieves strong profit growth with 1H2010 net profit of S$591.5 million

Net profit more than doubles compared to 1H2009, excluding revaluations and impairments

Singapore, 4 August 2010 – CapitaLand has achieved a net profit of S$591.5 million for the first six months of the year and a net profit of S$476.1 million in 2Q2010. The strong profit growth compared to the same period last year reflects a recovery in Singapore and the key markets we operate in. Excluding the impact of revaluations and impairments, 1H2010 net profit was S$382.7 million, more than double compared to 1H2009 on the same basis.

Revenue for 2Q2010 grew 48% year-on-year to S$873.9 million. Revenue from CapitaLand’s residential projects in Singapore increased by S$301.4 million, mainly from The Seafront on Meyer and Latitude. In China, there was a reduction due mainly to lower recognition from subsidiaries’ projects, most of the sales having been previously recognised. Rental income from shopping malls rose during the quarter with the increase mainly from malls in Malaysia and China. Ascott, the Group’s serviced residence business unit, also recorded higher revenue as demand for most of its properties improved during the quarter. For 1H2010, revenue was S$1.56 billion, 45% higher than that achieved in 1H2009.

CapitaLand’s overseas markets did well in the first six months of 2010. In 1H2010, revenue from overseas operations rose 10% year-on-year to S$907.5 million. China and Australia were the main contributors. Revenue from Vietnam continued to increase in line with our strategy of growing the country into our fourth core market.

Group Earnings before Interest and Tax (EBIT) for 1H2010 was S$1.19 billion compared to the S$40.2 million recorded in the same period last year. The strong performance was mainly driven by higher profits from residential projects in Singapore and China, and a net revaluation gain from investment properties in China. Excluding the impact of revaluations and impairments, 1H2010 EBIT was S$792.8 million, 65% higher than 1H2009 on the same basis.

As at 30 June 2010, the Group’s net debt-to-equity ratio remained healthy at 0.28.

Understanding Stock Market Risks - Updated

You may often hear this - Investing in Stock Market is risky.

In fact, investment of any kind including setting up your own business by nature is risky, and can potentially cause you lose some or all your investing or initial capital.

Actually as a paid employee you also face similar risks of losing your job when you approach 40s or 50s. It is a well known fact that HR department update this list of employees in these age groups during annual budget exercise.

So what are the possible Stock Market Risks and how can we as retail investors mitigate these risks?

1. Price Volatility Risk

• Need to learn how to time your Entry and Exit points
• Buy in batches by Average In (different from Average Down)
• Sell in batches

2. Companies Risk

• Select top tier blue chips that are likely to be rescued by Temasek.
• Limit your exposure to any stock to less than 10%, and for bigger account size less than 5%
• Limit your exposure to any sector to less than 20%, and for bigger account size less than 10%

3. Currency Risk

•  Invest in Singapore only

4. Lack of Knowledge and Skills

•  Read : http://createwealth8888.blogspot.com/2009/09/investing-knowledge-and-skills.html

5. No Time for Research & Monitoring

You mean other people got more than 24 hours? Time is the fairest commodity of all and everybody has the same amount of time, no more or no less. 24 hours a day!

Wake up if you don't have time and stop dreaming.

6. Liquidity Risk

This risk is associated with the ability to sell out our stocks easily without depressing the price level further and causing potential buyers to retreat to sideline in anticipation of more fire sales coming.

It is true that when we buy stocks which have low liquidity; we can have all the time in the world to buy slowly. I am not sure if the opposite is true when you need to sell? Do you really have the time in the world to sell slowly? Probably, you may have urgent need to raise money; otherwise, why would you be selling?

7. Dilution Risk

Even if you only invest in blue chips that are strategically important to Singapore and the government will never allow them to fail. So there is very little risk of complete failure but you are still expose to the dilution risk i.e. your interests in your holding get diluted by these companies injecting more capitals to strengthen up their balance sheets by raising more capitals through private placement or right issues.

•  Private Placement to Institutions
• You either get out or get diluted. If you have decided to hold on; then it may take a long while for your current holding to get even.
• Right Issues
• Same here. You can choose to get out or exercise your option to prevent your current holding been diluted by subscribing to all your entitled right issues to hold it at higher investment cost.

If you don't, then your interests in your holding will take a long time to get even.

8. Financial Fraud Risk

When it comes to financial  frauds, no companies, market makers, fund managers and etc in this world are immune from them. In the past, major financial frauds have happened and destroyed some well-established institutions or companies and it will definitely happen again.

Gloucester to acquire Noble’s interests in the Middlemount Joint Venture and announces an underwritten equity raising of A$410 million

• Acquisition of the Middlemount Assets and Middlemount Royalty from Noble, subject to shareholder approval

• Independent Expert has provided an opinion that the acquisition is fair and reasonable to Gloucester shareholders

• Underwritten equity raising of A$410 million

OCBC Class B 5.1% Non-Convertible Non-Cumulative Preference Shares

Read? STI ETF - Simple to buy but doesn't mean no emergency exit risk!

Quite like STI ETF - simple to buy but doesn't mean no emergency exit risk!

Perference share is still traded like a stock during bad market condition - its stock price can plunge badly too!

Look at OCBC 5.1% NCPS 100 Weekly chart. It will scare the shits out of you! Even the fund managers have no guts to hold all and have to sell some.

Buying is simple but it may come to haunt you when you unexpectedly need to sell it to meet emergency cash need during very bad market condition. You may be doom!

You love its fixed dividend payment but at what Exit Pricing Risk? There is little capital appreciation and the highest is only $105 when some Greater Fools happened to buy them.

Stock market is a dangerous place to think of just fighting inflation, collecting fixed income and doing capital preservation. We should be doing money and portfolio management and risk control and then aim for both dividends and much higher capital appreciation.

Long-term investing?

Borrow the idea from La Papillion
** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."


I am going to do a BIAS!
 
I keep hearing people say that they are holding them for long-term investing when their stocks are in deep losses.
 
What long-term investing?
 
Jail-term investing is probably the right word to describe this type of holding.
 

Their stocks are serving life-sentence in the stock-market-prison without knowing when they can be released from the prison. They just hope that one day somebody will throw them a presidential pardon to get them out from prison.

 

Sembcorp says keen to up stake in Vietnam power project

SINGAPORE - Singapore's Sembcorp Industries (SCI) said on Tuesday it is keen to increase its stake in a power project in Vietnam being offered for sale by BP Plc .
Sembcorp, which owns a majority stake in the world's second largest rigbuilder Sembcorp Marine, already owns a third of the Phu My-3 Power Company.

'We are interested in buying BP's stake in Phu My-3 power project,' a spokesman for SCI said.

Singapore's The Business Times newspaper reported SCI may want to buy another one-third stake in the $684 million (US$503 million) project.

BP, scrambling to hive off US$30 billion of assets to pay to clean up the worst oil spill in US history, is trying to sell a number of assets in Vietnam. It has tapped HSBC to advise on the sale of Nam Con Son gas project in Vietnam, which is worth US$966 million by one estimate. -- REUTERS

Sembcorp Marine says Q2 net profit up 28%

SINGAPORE - Sembcorp Marine, the world's number two oil rig builder, reported on Tuesday a better-than-expected 28 per cent rise in second quarter net profit, helped by higher margins and earlier completion of projects.

The company, 61 per cent owned by Sembcorp Industries, earned $176.1 million in the April-June period, up from $138.1 million a year ago.

The result beats the $141.6 million forecast of two analysts surveyed by Reuters.

Sembcorp Marine said its orderbook stood at $4.3 billion. -- REUTERS

NOBLE CONCLUDES RECORD US$1.55 BILLION GUARANTEE FACILITY

Createweakth8888:

26 banks lining up eagerly to lend Noble a total of US$1.55B

What does it mean? Banks are not scare to lend out so much money.

-----------------------------------
Noble Group Limited (the “Company”), one of the world’s largest raw material suppliers, is pleased to announce that it has renewed, extended and upsized its existing US$800,000,000 committed guarantee facility originally concluded in May 2009. The size of the facility has been increased to US$1,550,000,000 (the “Facility”) from the targeted level of US$1,200,000,000 due to exceptional bank demand and oversubscription.

The Facility was arranged by 9 mandated lead arrangers and bookrunners, including China Development Bank Corporation, Hong Kong Branch, Citigroup Global Markets Asia Limited, Commerzbank Aktiengesellschaft, Hong Kong Branch, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (trading as Rabobank International), DBS Bank Ltd., ING Bank N.V., The Royal Bank of Scotland plc, Hong Kong Branch, Société Générale and Standard Chartered Bank (Hong Kong) Limited.

A total of 26 banks committed in the general syndication, including Arab Bank plc, Singapore Branch, Axis Bank Limited, Hong Kong Branch, Banco Santander, S.A., Hong Kong Branch, Bank of America, N.A., Bank of Taiwan, Hong Kong Branch, China Development Bank Corporation, Hong Kong Branch, Citibank, N.A., Hong Kong Branch, CITIC Bank International Limited, Commerzbank Aktiengesellschaft, Hong Kong Branch, Commonwealth Bank of Australia, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (trading as Rabobank International), DBS Bank Ltd., London Branch, First Gulf Bank PJSC, Singapore Branch, Gulf International Bank B.S.C., ICICI Bank Limited, Hong Kong Branch, ING Bank N.V., KBC Bank N.V., Industrial and Commercial Bank of China Limited – Abu Dhabi Branch, Lloyds TSB Bank plc, National Australia Bank Limited ABN 12 004 044 937, Royal Bank of Canada, Société Générale, Standard Chartered Bank (Hong Kong) Limited, The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Hongkong and Shanghai Banking Corporation Limited, Hong Kong Branch and The Royal Bank of Scotland plc, Hong Kong Branch.

The maturity of the Facility is extended to August 2012 and August 2013.

The Facility will be used to support the Company, its subsidiaries and related companies in connection with the issuance of trade and financial instruments, particularly letters of credit and bank guarantees.

Keppel pays $86.5m to raise stakes in Philippines yards

By ANGELA TAN


Keppel Corporation Limited, through a subsidiary Keppel Philippines Marine Inc (KPMI), is raising its shareholdings in two associated companies, Subic Shipyard and Engineering Inc (SSEI) and Consort Land, Inc (CLI) to be nearer to its customers in the Philippines.

Keppel will pay $86.5 million (US$63.6 million) to raise its effective stakes from 44 per cent to 83.9 per cent in SSEI and from 33.7 per cent to 38.7 per cent in CLI.

The sale and purchase of shares in both companies is expected to be completed by the end of September 2010, following which, SSEI will become a Keppel subsidiary.

SSEI is a leading shipyard located in Subic Bay, the Philippines, which provides repair, conversion and building services to shipowners and offshore operators in the region. It also carries out routine and specialised machinery reconditioning works, as well as steel fabrication for marine and offshore structures. CLI owns 72 ha of land including the 20 ha on which SSEI is situated.

SML - Sold $4.05, ROC 5.5%

Stuff even more feathers into the pillow stock ...


Round 41: ROC 5.5%, 74 days, B $3.81 S $4.05


Round 40: ROC 5.1%, 48 days, B $3.67 S $3.89
Round 39: ROC 8.8%, 34 days, B $3.47 S $3.80
Round 38: ROC 21.1%, 217 days, B $3.07 S $3.74 (Bought back higher)
Round 37: ROC 17.9%, 29 days, B $1.61 S $1.92

Fundamental or Technical Analysis? - Revisit 3

Read? Fundamental or Technical Analysis? - Revisit 2

Again and again. People will ask me for advice which technical indicators are good to use?

But I don't really use any "good" technical indicators for Entry and Exit signal. I really don't know which are the good ones.

I know most technical indicators are developed by Gurus who claimed that they are reliable and profitable if used "correctly". But, then how outcome so many new indicators were developed when the old indicators are reliable and profitable?

But I still need to know when to buy and when to sell so I use simple support and resistance to determine when to buy and when to sell.

Support and resistance are not known to be reliable. There will always be another new support or resistance once they are broken.

I know I always make mistakes in determining the level of support or resistance but just that I want to make a better simple mistake and that's all.

Financially stupid people are everywhere. Don't be one of them.

Following the First Rule of Finance and managing the Three Cs takes up little time and guarantees financial success:

First Rule of Finance: Spend no more than 80% of your take-home pay. (All expenses including home loans and insurances)

Credit cards: Never carry a balance

Cars: Don't finance. Pay cash for your vehicles.

Castles: Put at least 20% down on your house, and keep the mortgage payment below 40% of your take-home pay.


Investing Can Wait

Before you master First Rule of Finance and the three Cs, investing can wait.

"Buy, sell, profit!" is not easy.

"Save steadily" is the way to go before investing!

If you want to know more, borrow it from NLB.

"Financially stupid people are everywhere. Don't be one of them." - Jason Kelly

High Dividend Yield Stocks? - Part 7

Read? High Dividend Yield Stocks? - Part 6

Next obvious question to ask:

"Is high dividend yield stock at 10% make a better investment than the one at 6% over longer horizon?"

Let assume:

Company C pays out 90% of its earning and that gives you a 10% dividend yield while company D pays out only 30% of its earning and that only gives you 6% dividend yield.

Which company do you think is a better investment over longer horizon?
What is your answer?

C or D?

Management Mind

Most CEOs if not all will know that most investors love dividends. The more dividends the merrier.

CEO doesn't need much of a brain to give out most of its earning as dividends. It is rather easy to do that!

Do you think that those CEOs choose to retain most of the company's earning to build up internal resources instead of giving out most of the company's earning as dividends to make most investors happy are dummies?

Company Future Growth

It is too simplistic to think that Management can grow the company without pumping in more financial resources. Where do you think the additional financial resources come from?

Three possible sources:

1. Retained earning
2. Debts
3. Equities

So those with less retained earning will have to turn to more debts and/or equities to fund its future growth.

Long-term company evaluation

Over long-term the market is a forward looking mechanism, it will most likely to evaluate the companies higher when companies have shown better visibility of higher future earning through their growth capacity.

Lastly, my Answer

I still don't like Company C even though I am hungry for dividend yield.

You leh? What is your final answer?

C or D?

High Dividend Yield Stocks? - Part 6

Read? High Dividend Yield Stocks? - Part 5

Most retail investors will love high dividend yield stocks. Me too and no exception. But just that I don't easily get excited over it.

High Dividend Yield

Recalling some pointers in the earlier posts

• Nothing is forever
• Just because a company pays a dividend now is no guarantee that it will forever, or that the company will even continue to exist. Nor is it any guarantee that the underlying stock is stable
• How does the high yield came about?
• The high yield come from the company paying out 90% of its earning as stock dividends. With little retained earning, it is very hard for the company to grow itself using internal financial resources.
• The high yield come from the company paying out less than 40-50% of its earning as stock dividends. The company has retained most of its earning either for financial cushions or to build up its internal resources to fund its future growth.

Sustainable dividend payment

Let assume:

Company A pays out 90% of its earning and that give you a 10% dividend yield while company B pays out only 40% of its earning and that also give you the same 10% dividend yield.

Which company do you think will be able to sustain your dividend yield at 10% if its future earning takes a hit?

What is your answer?

A or B?

Company A that pays too much of its earning as dividends will not be able to sustain the same dividend payout if its earning gets hit. It will have to reduce its dividend payout and cause your dividend yield to fall below 10%

Company B that pays less of its earning as dividends is in better position to sustain the same dividend payout even if its earning is reduced and your dividend yield is more likely to be sustainable at 10% over economy cycles.

Sustainable Growth

When the company keeps paying out most of its earning as dividends how can it build up its internal financial resources to grow the company? Its growth is not sustainable in the long run without its own internal significant war-chest.

That are two reasons why I don't like Company A.

Lastly

Have you ever wonder how come STI is approaching 3,000 and the current dividend yield of Companies A are still hovering at such high level?

Do you mean that the market is short of savvy investors not interested in accumulating high dividend yield stocks ah?

Think again!