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Of primates and their diet!

Friday, June 3, 2011

The title of this blog post belies the gravity of the subject on hand. Before we go into the subject proper, a bit of background information is necessary for the uninitiated.


Some might know of an infamous cbox owned by LP, the blogmaster of Bully the Bear. LP is a very decent sort of chap and is always concerned about people, having their best interests at heart. LP is also G.O.D. (Gorilla of Design) in his realm (i.e. his blog and cbox).

G.O.D.? Yes, LP is able to decide on how things look, how emoticons should be abbreviated and how abbreviations would turn out in his cbox. Most of the time, he is a benign G.O.D. but he is fully capable of dishing out caustic remarks and more. He also has the ability to excommunicate any recalcitrant cboxer and eradicate spamsters! Now, that is power!

In the zoo that is LP's cbox, there are larger primates of the gorilla class and smaller primates of the spider monkey class.  I am sure there are also baboons, orang utans and, maybe, a Yeti or two. The primates of different sizes represent investors and traders of different financial means.

In the cbox, we also refer to Sabana REIT as banana REIT just for fun. I cannot remember who started it but it was probably by some disgruntled investor who bought into the REIT at $1.05 a piece thereabouts. Some have referred to it as an expensive banana.


Regular readers would know that I blog about Sabana REIT regularly, starting from its IPO days. However, I only initiated a long position at 92.5c a piece, weeks before it started trading CD with a maiden DPU of about 3c. This was where FA and TA married nicely. FA identified a good undevalued buy and TA gave some hints as to when to buy. If only I am so consistent every time.

Last night, someone whom I believe to be of gorilla class in LP's cbox told me that I was being "suan" (Hokkien for "teased") by a fellow blogger. I went to read the blog post and I share LP's opinion that the blogger was most probably trying to warn spider monkeys to behave like spider monkeys and not behave like gorillas. So, a gorilla might be able to eat a few kgs of bananas in one sitting, a spider monkey could suffer from heartburn doing the same thing or worse! This is generally good advice, of course.

Then again, I have met spider monkeys with great appetites. They could eat a lot of bananas and not grow fat, avoiding the complications of over-eating. Some might say that the complications could come much later in life. Well, this could indeed be the case.

What do I think? Personally, if I have identified something which I believe is a winner, I would go in big. By this, I mean building up my position in the company to be at least 10% of my total portfolio. I am also not averse to building it up to be 20% or more of my total portfolio.

I remember a time when my portfolio size was much smaller, ST Engineering and SPH were the lion share of my total portfolio. In mid 2009 to early 2010, Healthway Medical, Golden Agriculture and Saizen REIT formed the lion share of my total portfolio. How did I do? Quite well, I believe.

However, the recent triple disasters to hit Japan dealt a blow to my investment in Saizen REIT which by that time was about 40% of my total portfolio. 40%? Yes, I liked the fundamentals and I liked the turnaround story which did finally pan out by end of May 2011 with YK Shintoku's CMBS fully repaid.

Unfortunately for me, the triple disaster wrecked a picture of recovery, technically and fundamentally. Informed by TA, I partially divested my investment in the REIT and suffered a small loss. This is a pitfall of a strategy of concentration as compared to diversification. Potential rewards are greater but the level of risk would be proportionally higher. So, we have to stay nimble as circumstances are fluid. This applies to all primates, from gorillas to spider monkeys.

In conclusion, if a spider monkey sees a gorilla wolfing down bunches of bananas and if the spider monkey wants to eat just as many bananas, it could. If it did, I would not say that it would, for sure, suffer from indigestion since it could be a spider monkey with a huge appetite although it might. I would say that it could suffer from malnutrition because it might not have seen what other food the gorilla could be eating as well. Primates are, after all, omnivores.

Oh, if anyone is interested to know, my overnight buy order for more Sabana REIT units at 92c was filled this morning.

30 comments:

Alan said...

Hi AK,

Its my first time buying shares and i have some confusion that i would like to clarify. Im using Poems internet trading platform and my buy order for capmallsasia was executed yesterday. The shares was reflected in my poems account under "Outstanding payment" today.

May i know when will the shares be reflected in my CDP account?

I have EPS linkage with my bank but im kinda confused on how to make payment VIA I-banking.

Do i click on investment and trading-->EPS-->Select "Payee Name"(Poems), "Payment Type(Do i select lump sum or individual contract payment)?" After that clicking "submit" and enter the amount of outstanding payment?

Its weird that when i click on contract for payments, it says no contract due for payment..

Appreciate your help.. Thanks

Alan said...

Hi AK,

I have checked with my Poems broker and he told me i wont be able to see any outstanding contract due for payment in my I-Banking account. However, i can still proceed to make a lump sum payment to poems even if there isn't any contract for payment reflected.

Just wondering is what he said correct? As my colleague told me a contract should appear in I-Banking.

My shares were executed ytd, considering T+3. Is today the last day i can payment to avoid a force sell by the brokerage?

Thanks

AK71 said...

Hi Alan,

I can only say that you should listen to your broker. Don't listen to me or your friend on this one. ;)

If you listen to your broker and something goes wrong, you have recourse. If you listen to your friend or me and something goes wrong, you are on your own. ;p

Alan said...

Hi AK,

Maybe i should just follow what he said tho i still have doubts..Btw do u have any idea how many days does it take for the shares to be reflected in CDP account?

Thanks alot

AK71 said...

Hi Alan,

Is is normal to have some doubts and even hiccups initially. Once you get used to your broker's ways and procedures, you would be fine. I cannot imagine Poems doing anything shady. ;)

You might not believe this but I actually do not check my CDP account online. Perhaps other readers would be able to help here. Let's see if someone would respond to your question with something definite. :)

Alan said...

Hi AK,

Maybe i'm too paranoid. Haha. Thanks

cif5000 said...

Can u gimme the link to the gorilla blog?

AK71 said...

Hi cif5000,

Here you go:

http://createwealth8888.blogspot.com/2011/05/following-someone-investing-idea-2.html

Enjoy. ;p

Anonymous said...

For the moment, I thought you had your nick renamed to AK47 !

Wah.... who dare to poke fun of you leh. Got eyes no tazan ah (as least for me in the S-REITs blogs).

Anyway, just as I was being jeered at for owning an Opel Turbo-charged diesel van as my ride, instead of the typical sedan, I felt the same for you. Cool it.

The winner is the one with the cash in the pocket and gets to brag about it. not those on installment this and there hor.

Keep up the good work of your blogging, it is very helpful to newbies like me.

avant follower

huat ah....


SnOOpy168

AK71 said...

Hi SnOOpy168,

Haha, renamed to AK47? What gave you the impression?

You are always so encouraging and full of praise. Thank you but I can't help but feel that you are overestimating me. ;)

I am very happy if people find my blogs helpful in any way. My blogs are just me putting down some of my thoughts in print, so to speak. Nothing too profound. :)

mark said...

I also have a petrol driven kangoo. What's wrong with it? The very fact that it has a high ceiling was a huge plus.

Alan -> Assuming you bought on Friday 3rd June, it will appear in your CDP on Monday 6 June but will appear under (2) Available which means it is still under contra. Once you paid for it, it will appear under (1) Free.

Your purchases made on Fri is due on Wed 8 June 5pm. U need to sell it off by the close of trading on Wed or make payment by then for it. Actually payment while due can be held by the brokage firm till T+5 failure of which it will be force sold but that's another thing. Rule of thumb try to make payment by Wed.

Since u selected EPS, U can do the EPS anytime during contra period. Make sure you are EPS into the correct account. Use Lump payment.

PS - I am not a TR and hence whatever I wrote is based on my knowledge and not official. Phillips has an FAQ. Most of your questions are answered there.

AK71 said...

Hi Mark,

The Kangoo is a van but drives like a car. I have always thought it is rather cool. ;)

Thanks for helping out with Alan's queries. :)

Alan said...

Hi Mark,

Thanks for making the effort to explain. Definitely makes me understand better.

Thanks AK for asking readers to help out too.

Cheers! may fortune keep rolling in for u guys :)

mark said...

Yeh my kangoo has windows throughout the back so it is ok for passengers too. 1.4L is underpowered and fuel efficiency is under 10km per L but it is ok. It delivers all that I need for now. :)

AK71 said...

Hi Alan,

Mark did all the work but you are welcome. ;)

AK71 said...

Hi Mark,

Wah, sounds like your Kangoo is a fuel guzzler. At the next service, change to a good synthetic engine oil. Might help. Oh, check when was the last service too. If it was more than 6 months ago, time for another service probably. ;)

mark said...

AK - When i took it over from my mom (actually it belongs to my mom) we had it serviced. And we put it half synthetic engine oil. Mechanic said for kangoo not good to use full synthetic. It drives a lot smoother. I was told doing 10KM is not bad already it used to do lesser. I think it has to do a lot with european cars in general.Not the friendliest of the lot but such is the way it is. Cannot compete with honda jazz. :P


2 years 8 months to go before COE runs out. It will be scrapped worthless.

mark said...

Alan - no worries. Glad I could help. I had the same questions just some years ago when I started. I appreciated a little help here and there so if I know a thing or two I will try to help too. :)

If u intend to pick up the shares,get the money in as soon as u can to avoid any headaches. If u intend to contra, my opinion is that u should use CFD and not MMF where the contra period is so short.

And yes, don't end up getting your buys forced sold. You will get suspended for a week. That is a phillips regulation. Example, you are trying to contra by selling off on the last day it is due but the counter gets halted. The next day u will have to pay up since it is due, else it will be force sold. Trading halt is not an excuse for not meeting the contra period although it is not your fault at all. Contra counts during all trading days. It excludes non trading days. By trading day I refer to when the exchange is open and it's a trading day for the market.

AK71 said...

Hi Mark,

Wow, it was even worse before? I cannot imagine.

Apparently, the Audis, VWs and MBs these days do a lot better. My friend says his VW Passat does some 14km/litre. I was very impressed. That is similar to the Mazda2!

I guess things improve over time. In the meantime, enjoy the Kangoo. ;)

Anonymous said...

thanks to you guys, now I really missed my Opel Combo 1.7DTi (Turbo diesel) van.

It picks up as fast and can sprint to 130km/h easily.

Had helped in the 2004 tsumami relief efforts by picking all those donated mineral water from petrol station all over sg. My van was loaded to the brim. Yet can manage 80km/h easily.

Fuel consumption is a joke - as good as my Honda Superfour motorbike (about about 18-20km/L).

I missed my Combo.... :-(

SnOOpy168

AK71 said...

Hi SnOOpy168,

18 to 20km/litre is amazing! Opel is German. Renault is French. Hmmm....

My English tutor when I was in JC would scoff at French cars and called them French rubbish. In those days, my dad had a Renault18. haha..

mark said...

160km/h in a van? Isnt the speed limit 70km/h? LOL

I think it is manual drive? That's the problem. I'm an auto transmission guy.

Darn the fuel consumption. Oh well.

Alan said...

Hi Mark,

Thanks for ur advice. Btw, i bought the shares on thurs, until now its still not reflected under CDP. Is it normal? I couldn't find the "Available" and "Free" tab in my CDP home page..

mark said...

alan, it should be. I am not sure if you are looking under the right place. Are you looking under the 'holdings' tab? Whatever stock you bought/own is reflected there.

Anonymous said...

Hi Ak,

I am thinking of buying Sabana reit for thir high yield.

is 92.5 cents a good price to go in ?

thank you

regards
phyllis

Alan said...

Hi Mark,

Yup. Im looking at that. I've checked with cdp, they say it will appear under my holding tmr.. Thanks for ur help ;). Have a good day ahead

AK71 said...

Hi Phyllis,

Sabana REIT has a forecast DPU of 8.81c and at a unit price of 92.5c, the distribution yield is about 9.52%. Ask yourself if you are happy with this and if you are, look at the other numbers. If they are good as well, I think you have a green light. ;)

Sabana REIT: DPU of 3.04c

bummy said...

HI AK (gorilla),

I had a good laugh reading your banana post.

I feel like the spider monkey trying to follow the gorilla since what is good for gorilla may be good for the monkey. Reality is my appetite is different from the gorilla, so while I may have a hearty appetite, my stomach do not always prefer the similar type of banana as you. In addition, I prefer eating slowly while some prefer a quick meal. And yes, I am omnivores too

AK71 said...

Hi bummy (fellow gorilla),

I am pleased that my blog has provided you with some amusement. Indeed, it was one of my aims when I was penning this blog post. :)

Your comment on your appetite and dietary preferences is well noted. May you grow strong and healthy. ;)

Paul said...

Hi Alan

I know this post is a little late but I believe the account you have opened with POEMS is the Phillip Cash Management Account (PCMA)which works slightly different from the usual cash trading accounts from other brokerage.

My experience with PCMA is that the individual contract for your trades will not show up in your EPS links via your IB.

The only way to pay POEMS if you have a PCMA is through the 'lump sum' payment.

Hope this helps.

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