The Perfect Storm of the Stock Market II

[tenyawph]

The stock market is always an interesting place. 

 

For a few companies, announcement of better profits resulted in a plunge in their share prices.  An example is Cityneon.  For some, there are no discernable movement in their share prices. Examples: ComfortDelgro, DeClout, etc. For others, their share prices shoot up, as expected.  Examples: CityDev, Oxley, Sembawang Marine, Thai Beverage, etc.  

 

On the other hand, the announcement of declined profits resulted in a rise in their share prices (after a small price correction initially).  An example is Keppel Corp.  In an extreme case, an announcement of continued high losses (y-o-y) resulted in a rise of their share prices.  An example is Ezion.

 

So what is happening here?  It is the future outlook/prospect of the company that determines its share price performance, in relation to the percieved value vis-a-vis its share price of the company.  Is the company currently undervalued or overvalued?   Companies like Keppel Corp, Semb Corp, Semb Marine which have been battered down hard over the past 2~3 years are perceived to be very cheap now.   The same argument goes for DBS Bank in Nov 2016. 

 

For some companies meeting expected good results, it is sell on news.  For others, releasing unexpected good results, it is buy on news.    But this is just a general rule; there are always exceptions.     

 

Finally, if the overall market sentiments are good, more people are willing to take more risks, even bad companies can benefit from share price rises.

 

Enjoy the ride while it lasts (for how long, who knows?).  Remember, always be prepared for the unexpected.

 

 

 

[Hosaybo]

Like the rest part, "be prepared for the unexpected". A lot of sentiments are built in share price. Generally there is a buoyant feel in the past few months for the market.

[Ktglfc]

Like the rest part, "be prepared for the unexpected". A lot of sentiments are built in share price. Generally there is a buoyant feel in the past few months for the market.

 

Agreed.

Don't have to put all your spare $ now into the market ...

 

Keep some for the expected ... and in the long run, benefit from this :)

[tenyawph]

 

Enjoy the ride while it lasts (for how long, who knows?).  Remember, always be prepared for the unexpected.

 

The main bulk of my war-chest has been on stand by since Sep 2016, when I first started stock investing.  I have allocated about 20% of it in stocks with the remaining in cash.  Definitely not the most optimal (and aggressive) way in terms of maximising return.

 

However, since I cannot tell the direction of the stock market in the future, be it tomorrow, next week or month, this is my conservative way to earn a decent return, and yet have sufficient ammunition to buy cheap when there is an unexpected market crash. 

 

To date, I am happy to announce that I have exceeded my own modest expectation: >15% return in 5 months - a big part has got to do with selecting the right stocks + the recent stock market rise (vs a 10.7% rise in STI from 2,800 to 3,100). 

 

The big question now is this:  Can I sustain this performance consistently and on a yearly basis?  Or this is just a fluke and never to repeat again?

 

Watch this space for future updates.   

[Throttle2]

Lets not call it a fluke but most people who are in the market made pretty decent gains in the last year.

So with your knowledge and sensibility (which i do believe you have, having read some of your posts) together with general market upswing, an above average return can be achieve.

 

But as i said before, managing $500k is different from managing $5mil is different from managing $50mil. You can do your own stock picking for a $500k portfolio

For $5mil it will be much much more difficult

For $50mil it may not make sense.

 

As for me, i wont care about sustaining an above average return for a small part of my investable pot

I would rather sustain an average moderate return for the entire sum of my investable pot.

 

Happy investing folks

[tenyawph]

There are 2 CEOs which I admire, one from Oxley and the other from Sapphire Corp.   Heavily vested in both these companies.

[tenyawph]

I expect Mr Trump is going to continue to lay out his grand plans (which in turn 'talk up the stock market') at the coming congress session and the 3-month old bull market is going to charge further forward, which is currently taking a short break by holding steady.   

 

It is not quite a 'show hand' time yet but talk has to be converted to real action sooner or later, failing which, a market pull-back is inevitable since it is built upon expectations that are yet to be fulfilled. 

 

The financial quarterly reporting season is almost over and I am practically running out of stock investment ideas.

 

So I am sitting tight, looking forward to the next quarterly reporting season to futher validate my current stock investment, while ironically, also waiting for a possible market crash in the U.S. stock market upon which I will be able to unleash my 'divisions' which have been waiting long enough for such an event to happen.  I don't have a crystal ball so this might not happen in 2017 but perhaps later.

 

Patience, patience, patience....... 

[Ktglfc]

I expect Mr Trump is going to continue to lay out his grand plans (which in turn 'talk up the stock market') at the coming congress session and the 3-month old bull market is going to charge further forward, which is currently taking a short break by holding steady.

 

It is not quite a 'show hand' time yet but talk has to be converted to real action sooner or later, failing which, a market pull-back is inevitable since it is built upon expectations that are yet to be fulfilled.

 

The financial quarterly reporting season is almost over and I am practically running out of stock investment ideas.

 

So I am sitting tight, looking forward to the next quarterly reporting season to futher validate my current stock investment, while ironically, also waiting for a possible market crash in the U.S. stock market upon which I will be able to unleash my 'divisions' which have been waiting long enough for such an event to happen. I don't have a crystal ball so this might not happen in 2017 but perhaps later.

 

Patience, patience, patience.......

Patience is the key :)

[Mercury1]

Just took a quick look at Sapphire's 2015 AR for interest sake, what I notice were

 

 

Asset - Largest amount (46M) was listed as from acquiring a subsidiary, but I could not trace back the details from their subsidiary co's (Ranken/Mancala)

Asset- Trade Receivables, they have 124 M owing from projects primarily in China

 

Both these make up 50% of their Total asset value, and their cash plus their cash holding seems quite thin, personally it seems risky. No doubt the Raken rail business in China might drive the company for growth but just curious what caught your eye on this stock? 

 

There are 2 CEOs which I admire, one from Oxley and the other from Sapphire Corp.   Heavily vested in both these companies.

 

[tenyawph]

Just took a quick look at Sapphire's 2015 AR for interest sake, what I notice were

 

 

Asset - Largest amount (46M) was listed as from acquiring a subsidiary, but I could not trace back the details from their subsidiary co's (Ranken/Mancala)

Asset- Trade Receivables, they have 124 M owing from projects primarily in China

 

Both these make up 50% of their Total asset value, and their cash plus their cash holding seems quite thin, personally it seems risky. No doubt the Raken rail business in China might drive the company for growth but just curious what caught your eye on this stock? 

 

I like the fact that this company has turned around from a massive loss making one to a profitable one.   Their core business is in railway infrastructure and they are letting go of their mining business.

 

The company's growth potential looks very good, as China has announced that they intend to spend 5.3 trillion yen to increase their railway infrastructure by 2020.   

 

https://www.bloomberg.com/news/articles/2016-12-29/china-to-have-30-000-kilometer-high-speed-rail-network-by-2020

 

In addition, I hope that Sapphire can grab some business in the building of the High-Speed Railway in Malaysia, now that Malaysia has drawn closer to China recently through the signing of a MOU  worth RM143B.

 

http://www.malaysiakini.com/news/361327

 

Lastly, their debt gearing has been cut by half, based on recently released presentation of their latest results. 

 

Unfortunately, Sapphire is not on the radar of research analysts, and it is thinly traded for most of the time.  In other words, an unexciting and largely ignored stock counter for now.

 

I am expecting this stock counter to rise very slowly, as long as it can consistently announce increasing profits every quarter, and more people start to notice.

[Sdf4786k]

Just took a quick look at Sapphire's 2015 AR for interest sake, what I notice were

 

 

Asset - Largest amount (46M) was listed as from acquiring a subsidiary, but I could not trace back the details from their subsidiary co's (Ranken/Mancala)

Asset- Trade Receivables, they have 124 M owing from projects primarily in China

 

Both these make up 50% of their Total asset value, and their cash plus their cash holding seems quite thin, personally it seems risky. No doubt the Raken rail business in China might drive the company for growth but just curious what caught your eye on this stock? 

 

If you read the book from good to great. Sometimes the CEO is either extremely talented or extremely lucky.

 

the risk part has evolved so much that now, it would seem all the senior management are rule by morale hazard.

[tenyawph]

If you read the book from good to great. Sometimes the CEO is either extremely talented or extremely lucky.

 

the risk part has evolved so much that now, it would seem all the senior management are rule by morale hazard.

 

Luck favours the prepared.  CEOs who are nimble will go look for opportunities to go into. 

 

There is always the execution risk which can never be totally ruled out.  Projects can fail due to unforeseen circumstances, fraud, political risk, etc.

 

So don't put everything into a single basket.          

[Mercury1]

Thanks for the insights, do agree on the potential Rail business. I will keep a lookout on its performance but from the sidelines Huat mate 

 

 

I like the fact that this company has turned around from a massive loss making one to a profitable one.   Their core business is in railway infrastructure and they are letting go of their mining business.

 

The company's growth potential looks very good, as China has announced that they intend to spend 5.3 trillion yen to increase their railway infrastructure by 2020.   

 

https://www.bloomberg.com/news/articles/2016-12-29/china-to-have-30-000-kilometer-high-speed-rail-network-by-2020

 

In addition, I hope that Sapphire can grab some business in the building of the High-Speed Railway in Malaysia, now that Malaysia has drawn closer to China recently through the signing of a MOU  worth RM143B.

 

http://www.malaysiakini.com/news/361327

 

Lastly, their debt gearing has been cut by half, based on recently released presentation of their latest results. 

 

Unfortunately, Sapphire is not on the radar of research analysts, and it is thinly traded for most of the time.  In other words, an unexciting and largely ignored stock counter for now.

 

I am expecting this stock counter to rise very slowly, as long as it can consistently announce increasing profits every quarter, and more people start to notice.

 

[Wt_know]

Trump, we love you ... give you A+++

Edited March 1, 2017 by Wt_know

[tenyawph]

I expect Mr Trump is going to continue to lay out his grand plans (which in turn 'talk up the stock market') at the coming congress session and the 3-month old bull market is going to charge further forward, which is currently taking a short break by holding steady.   

 

It is not quite a 'show hand' time yet but talk has to be converted to real action sooner or later, failing which, a market pull-back is inevitable since it is built upon expectations that are yet to be fulfilled. 

 

The financial quarterly reporting season is almost over and I am practically running out of stock investment ideas.

 

So I am sitting tight, looking forward to the next quarterly reporting season to futher validate my current stock investment, while ironically, also waiting for a possible market crash in the U.S. stock market upon which I will be able to unleash my 'divisions' which have been waiting long enough for such an event to happen.  I don't have a crystal ball so this might not happen in 2017 but perhaps later.

 

Patience, patience, patience....... 

 

Thanks to Mr Trump's speech to Congress, the U.S. stock market has roared ahead.  It is looking rather toppish now, and I am pretty sure that the bull market will continue to charge forward, especially the financial stocks, in view of the Mar rate hike which looks certain.  Our 3 local banks will follow suit as well.

 

Will the DJ Index move from 21,000 to 25,000?  I think so, as the stock market has a tendency to overshoot expectations. Will the rise last till the end of the year?  I don't know. 

 

For me, I am looking forward to the next quarterly reporting season, starting from Apr 2017, which happens in less than a month's time.  Hopefully, it will further boost the value of my current stock holdings. 

 

My divisions at the border will have to wait......

[tenyawph]

Investment in the stock market is a marathon.  It is not a sprint.  You have to be prepared to invest for the long haul.  For the past 5 months, I have done long term holdings as well as dabbling in short term play. 

 

Verdict:

Long term holding of a stock (after you have done extensive research on it before you buy) is way superior than short term trading (go into a stock to catch a buying momentum, i.e. speculation).  Holding long term allows you to eliminate the market noise (short term price ups and downs) and the chance of capital gains is more assured.

 

That said, it is also important to watch out for any news that will directly impact the stock.

 

One thing I have learned and which I will apply is this: When you are holding onto a stock, and there is no apparent reason for it to dip suddenly, it is an opportunity to buy on dips to accumulate more of the stocks.  Examples: wide gyration in share prices experienced by CityDev and Capitaland which I capitalised upon.

 

Laslty. it is ok to have a stock that goes into negative territory.  It is hard to time the entry into the market, and this has happened to me several times (bought too early), only that the price eventually recovered and moved up.

 

Having said that, do watch out if a stock goes into a prolonged down trend i.e. price keeps trend downwards.  Usually there will be news that cause it to behave as such.   Learn to sell a losing trade. Cut losses early.  I exited M1 at $2.34 before it went south to hit a low of $1.90 (due to expected competition from the 4th telco) and now it recovered to about $2.09.  I had half a mind to go buy back when its share price was hovering around $1.95 but I hesitated.  Yes, M1 is making reduced profits but it has a pretty decent dividend yield at the price of $1.95.    

 

Currently I am monitoring these 3 stocks.  DeClout, Cityneon and Yuuzoo.  These 3 stocks have reported higher profits, yet DeClout and Yuuzoo are trending towards their 1-year lows.  Meanwhile, Cityneon has corrected from a high of $1.21 to hit a low of $0.77 (a third from their 1-year high) before recovering to $0.81.  What gives?  I don't have the answer yet. 

 

Currently, I am vested in Cityneon with 15,000 shares at an average of $0.813 (through stock nibbling at different price points).  The technical charts say that this stock is headed towards $0.60 while fundamentals point to $1.20.  Who to believe? Time will tell.

 

 

[Ktglfc]

Investment in the stock market is a marathon. It is not a sprint. You have to be prepared to invest for the long haul. For the past 5 months, I have done long term holdings as well as dabbling in short term play.

 

Verdict:

Long term holding of a stock (after you have done extensive research on it before you buy) is way superior than short term trading (go into a stock to catch a buying momentum, i.e. speculation). Holding long term allows you to eliminate the market noise (short term price ups and downs) and the chance of capital gains is more assured.

 

That said, it is also important to watch out for any news that will directly impact the stock.

 

One thing I have learned and which I will apply is this: When you are holding onto a stock, and there is no apparent reason for it to dip suddenly, it is an opportunity to buy on dips to accumulate more of the stocks. Examples: wide gyration in share prices experienced by CityDev and Capitaland which I capitalised upon.

 

Laslty. it is ok to have a stock that goes into negative territory. It is hard to time the entry into the market, and this has happened to me several times (bought too early), only that the price eventually recovered and moved up.

 

Having said that, do watch out if a stock goes into a prolonged down trend i.e. price keeps trend downwards. Usually there will be news that cause it to behave as such. Learn to sell a losing trade. Cut losses early. I exited M1 at $2.34 before it went south to hit a low of $1.90 (due to expected competition from the 4th telco) and now it recovered to about $2.09. I had half a mind to go buy back when its share price was hovering around $1.95 but I hesitated. Yes, M1 is making reduced profits but it has a pretty decent dividend yield at the price of $1.95.

 

Currently I am monitoring these 3 stocks. DeClout, Cityneon and Yuuzoo. These 3 stocks have reported higher profits, yet DeClout and Yuuzoo are trending towards their 1-year lows. Meanwhile, Cityneon has corrected from a high of $1.21 to hit a low of $0.77 (a third from their 1-year high) before recovering to $0.81. What gives? I don't have the answer yet.

 

Currently, I am vested in Cityneon with 15,000 shares at an average of $0.813 (through stock nibbling at different price points). The technical charts say that this stock is headed towards $0.60 while fundamentals point to $1.20. Who to believe? Time will tell.

 

Agreed on buying long term :)

Just hold, collect dividends and don't worry so much ...

If one keeps on monitoring his stock performance, then it will be too stressful liao

 

For me, I am just looking at those boring stocks like Sheng Siong, Old Chang Kee ... because I always shop there or eat the food

[Galantspeedz]

http://www.businessinsider.com/cuban-on-investing-diversification-is-for-idiots-2011-8?IR=T&r=US&IR=T

 

 

anyone agree with Mark Cuban?

 

All that asset management, diversification, that's for idiots.