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Marco Polo Marine: My comment in another blog.

Tuesday, December 2, 2014

I stumbled upon a blog on Marco Polo Marine and I was reading the comments section and felt compelled to make a comment to correct one of the readers. This was my comment:


For readers who are interested in the blog I am referring to, you might want to follow the link here to read the rather well written article: Valuestocks.sg: Marco Polo Marine - Still waiting.

For readers who just want to know what could have compelled me to make the above comment, this was the comment responsible for my response:


It seems that AK the blogger has been gravely misunderstood. It is either that or I have misunderstood what I should be doing as a blogger or whether I should be blogging at all.

Some time off from blogging to do some serious thinking is probably in order.

Related posts:
1. Portfolio review: Unexpectedly eventful.
2. Managing exposures in AK's portfolio.
3. The matter of letters and FY 2014.

49 comments:

dorshii korshii said...

Hi AK71:)

No need to take time off to do some thinking. No need to always look out for what others write about you. Call me cynical or in a enlightened-zen state about human nature….we are always going to get stuff like this. It is a reminder that we are not the image of The Creator. Humans are fallible.

You have always said that you were merely talking aloud. You are not in the charitable business of looking out for other investors' interests. You are also not a licensed publisher.

Kind Regards.

dorshii korshii said...

I forgot to add this : We are not our brothers' keepers. Parents are. Even brothers snap at each other's feet. Such is the order of things in life.

yvvuj said...

Sounds like a case of dammed if you do, dammed if you don't. Don't be disheartened. I will tell you that I followed your blog and I went into MPM with eyes wide open, after agreeing with your analysis. Do I blame you? If we start going down this path we will have everyone to blame for everything. Every incidents like this should just be taken as a learning experience. Should you stop sharing your purchases after this? Should you stop sharing your dividend amounts after this? I think you should do what you think is right. Can't please everyone, AK. :)

E H said...

AK

I noticed people often justifying their purchases of counters/stocks by saying things like: "Oh, I am buying at a discount to NAV...the P/E only X times...EPS is XXcts. Great value!"

Things are rosy until prices dip further or asset values drop.

Come on people. Buy something at a price you are comfortable with for at least 10 years. If not, put a stop loss.

Don't buy because you perceive it to be value for money now. Or you followed others blindly.

Cheap can only get cheaper. Don't be blind.

Richard Ng said...

AK : I guess we just cannot please everyone! Just keep doing what you are doing and hack care about those negative energy...

RayNg said...

Like that the person can also blame all the analysts out there as we know that their views are not always right.

If someone just follow other blindly due to greed and short cut (not doing due diligent), they have themselve to blame.

Assi AK, please continue do the right things. Cheer!

Steven Yap said...

Hi AK,

Since when did you force people to read your blogs?
They read your blogs because they wanted to, you never force them.

When they make profits did they share it with you?

Its up to the readers to be discerning on everything he reads. No one should be expecting to be spoon feed from a blog or blogger... This is basic manners.

Please keep doing what you are doing. IMO, you are doing fine. Some people just feel they can blame everything on everyone but themselves.


Best Regards,
Steven

Stoical Keynes said...

Hi AK,

I wonder what would happen in an alternate universe if oil price had suddenly surged and MPM turned out to be a multi-bagger at this stage.

If he had sold in May, would he blame you if he had followed your actions?

Or would he then think that he is "better" than you if he hadn't sold.

Or maybe he might even share the "profits" with you? LOL

victorlsl1 said...

I think you should stick to what you started off with. along the way, you lost your way

ahpengpeng said...

Hi AK,

我为您觉得愤怒。。

您是sharing your own experiences and investing journey, which I like- and also the way you pen the articles..

我想说的是every reader should exercise their own judgement... the reader should take responsible of his/her own actions if he/she choose to follow you..

我支持您!

SC said...

You know what it feel like when you are being accused or misunderstood for something you are not or not meant it to be such.

Sound like deja vu.

Simple Investor said...

AK, i also follow your blog quite regularly. MPM also happened to be a stock I bought after reading your analysis. Fortunately, I cut when things are not looking well for them.
End of the day, we must all manage our stock holdings diligently. Ultimately the buy/sell decision comes from us alone. Just like how do we blame all those broker houses analysts who frequently give a wrong call. We can choose simply to ignore their reports in future.

AK71 said...

Thanks to all of you for the comments.

I appreciate the encouragement and advice.

I will see if there are ways I can do better but, ultimately, blogging is a hobby for me and I must enjoy doing it. :)

yeh said...

Well. I have 65 lot and I didn cut loss and blame ak although I read his blog then bought the shares.

In fact, marco polo is a good company and it did fly a bit ( highest to 445 cent) only that time i didn sell.

Now i still believe believe in ak's foresight of MPM and MPM management. I think marco polo still worth to invest. Although now i am sitting in quite a sum amount of paper losses
:(

Nightmare_Angel said...

Hi AK,

Please continue to blog. You are one of the few financial blogger which I feel is genuine and always give valuable and truthful thoughts. The blogging community without your presence will be a real pity.

I've been in your shoes before and got accused by others but well, it did affect me initially but after some thoughts, I brush those negativity away simply because I've done no one wrong and my conscious is clear. Time will tell and "Qing Zhe Zi Qing". :)

Cheers
Qin Liang

Small Time Investor said...

Hi Ak71

It's like following someone who keep strikes 4D . When they strike , no one complains . When they never strike , they know who to blame .

Regards

Small-Time Investor

AK71 said...

Hi yeh,

I can only hope that I am right in my investment decisions. I know I cannot always be right, of course.

So, you have to be mentally prepared that I could be wrong but I do appreciate your kind words. :)

Although I have trimmed my position, my investment in MPM is still quite sizeable and is probably about 3 times larger than yours. Having said that, we must remember that position sizing is about sizing an investment in relation to our own portfolio and not someone else's.

So, remember to size all our investments according to our own level of comfort. :)

kwee kok yeo said...

Hi AK

There will always be some cynical blogger out there to put the blame on you when things are not going right or just plain jealous. Ignore them and the truth will be there for everyone to see.

I make my own decision when buying stocks and read blog to enrich myself and have some comfort level, ultimately I will be responsible for my own decision. No one is pointing a gun at my head when I click buy button so why blame when the fingers is your very own.

Please continue to blog and afterall, you are just talking aloud. Ha Ha...

AK71 said...

Hi all,

I guess I am still a boy scout at heart. I am concerned with doing the right thing and I would rather have happy readers than unhappy readers.

In a way, I am glad I stumbled upon the blog and, more specifically, upon that particular comment. It shows, perhaps, that there are things I can do better in.

In a chat with another blogger in FB earlier, I said that I try to be holistic in the things I blog about. I blog about position sizing and I blog about how I manage my portfolio too. Basically, I try to share my experience in my blog without reservation although there is nothing really sacred or noble about it.

Investing is not just about identifying a possible winner and definitely not about plonking down everything including the kitchen sink on a single counter.

Despite my best efforts, there are people who think that I have ulterior motives as a blogger and this saddens me.

After episodes like this, it takes a while but I will recover although everytime something like this happens, it saps away some of the blogging energy I have left.

I look inside me and I see that I still want to blog. There could come a day when I might not see that anymore and I don't want that.

So, I will have to, perhaps, restrict myself when it comes to blogging about specific stocks in future.

I will just have to see how it goes. :)

Chua Poh Huat said...

Hi AK,
Don't take it to heart. you are kind enough to share your investment journey with us(internet users) FOC. It is human nature to blame once they lost their investment, if they win big do they thank you. So AK, please continue to share your investment experience and other stuffs......

PH

Dividend Chaser said...

Hi AK,

Keep the faith. Hold on. Things will get better. It might be stormy now but it can't rain forever.

Don't give up blogging.

Money Honey said...

We cannot control how others think of us and what they 'talk' about us. This is cyber-bullying! It is an act of cowardice.

Take a break if you must.

But Never say Never and continuing with blogging. Cheers!

Dolly Yeo said...

I read your blog almost everyday listening to you talking to yourself and others sharing their experiences. You answer everyone's questions and try and help them or get others to help. It is really hard work.

You often remind us to manage our finance amongst reminding us to save and know what we are doing. I can see you have no life, adding value to others and not being appreciated, can be quite painful.

I hope your fans including myself could support and encourage you to continue the good but not to forget you have a life. Having said that, for selfish reason I would look forward to what you have to say each time you blog.
Whether it's about being mindful of our expenses or where to get cheap food, or remembering to take care of our parents. Your blog is not only about investment, it's about life skills and values.
Thank you AK!

That person who play victim and play the blame game obviously wants others to do his homework. His pattern will get him no where because he has no self-responsbility to his own life.

One person not appreciating your work out of 6 million. Do you think he matters?
Take care.

blauereiter said...

Hello Mr Ak,

Please continue to blog. This experience might have left you with a bad taste in your mouth, but there are so many of us here that have benefited from your articles and insight, myself included, and we are thankful :]

Howard said...

AK, it is common for people to blame others for their own misadventures. And no one appreciate others when they do well. Society and education's fault.

So chill AK. Nobody owes anybody an explanation. Your readers know that you have always remind readers to do their home works.

Andy said...


Actually DMG just issue another report on Marco Polo Marine and is extremely bullish about it $0.6 Target price. So you are not alone in feeling the company got huge prospect.

Report:
http://research.dmg.com.sg:9898/UploadPDF/SG_Marco%20Polo%20Marine_Results%20Review_20141201_OSKDMG.pdf

AK71 said...

Hi all,

Thanks so much again for the encouraging words. :)

If I do continue blogging, people like you are probably one of the strongest reasons why I would want to do so. :)

KL said...

Hi AK,

Its time like this that people like me surface from our lurking to say a big thank you for blogging.
I've learned so much and benefited from your words of wisdom.
Please always remember that many here appreciate all your effort.
It takes a situation like this to realise how important you have been in my financial journey.
So teacher, thank you once again, now I know how to fish.

KL

AK71 said...

Hi KL,

Thanks so much for your kind words of encouragement. I don't know if I am teacher material but I am glad that my blog has been helpful to you in some ways. :)

I hope I wouldn't have to wait till another episode like this to hear from you again. ;)

qook said...

Please continue blogging! Don't take this to heart. It is the words of the lazy who don't wish to do their hw and blame others. There will always be unappreciative people around but for every one of him there are so much more of us who are grateful. I have been learning much since I found your blog and really appreciate all your "life" lessons as well.

Cory said...

Every downtrend there will be new suckers who face losses which they could not manage. Nevertheless i feel is good practise to add disclaimer to help them understand as part of your advise, not to trust or follow blindly and you are not obligated to inform change in your position.

AK71 said...

Hi Cory,

It might be easier for me not to blog about stocks at all. Haha.

Anyway, I will see how things go. It is less stressful to blog about my penny pinching habits and the food I eat, for examples. ;p

AK71 said...

Hi qook,

Sometimes, I wonder what people actually learn from my blog. haha... How to cook oatmeal, maybe? ;p

Thanks for the encouraging words. I appreciate your comment as well as the comments from everyone here. :)

SOLIDCORE said...

Hi AK,

Was reading up in detail on the changes to SGX this year, eg 100 lots which will commence on 19 Jan, I I realised that in March, there will be a minimum trading price for shares under 20 cents.

Looking at MPM's historical prices, it fell below 20 cents during the previous GFC, so its really up to anyone's guess if there would be a share consolidation since the current share price doesn't seem that far off from 20 cents.

On a side note, I've been thinking about Offshore and Marine counters as a proxy to the current oil rout. As much as oil could go either up or down, realistically there must be a balance between demand and supply, so my crystal ball is showing that there could be more upside than down. Any thoughts of taking more nibbles in your offshore and marine related counters? :)

AK71 said...

Hi Solidcore,

In another recent comment here in my blog, I said that I would like to buy more of SMM and SCI if they should test their recent lows.

After reading MPM's annual report, I feel that if MPM should trade at half of its NAV (or close to it), I would probably be buying more too. There is no reason why productive assets should be so heftily discounted.

I have an inkling the the rig that MPM is to take delivery of in November would find a client soon enough. It is a higher spec rig and would probably displace some older rig in Indonesian waters.

Frankly, I would be quite surprised if MPM's share price would fall below 20c a share, all else remaining equal.

AK71 said...

Marco Polo Marine – Jack-up rig contract could spark a sharp rerating. Marco Polo Marine (MPM) first entered the OSV business in Indonesia in 2010, with little prior experience and no track record. Today, it owns the largest fleet of 8,000-brake horsepower (bhp) anchor handlers in Indonesia and OSVs are the largest contributor to the company’s bottomline.

We see the jack-up rig, to be delivered in 4QCY15, as a potential game-changer to the company in the same way. Indonesia’s net-importer status, burgeoning oil consumption, and strong political will to drive oil & gas investments present a positive macro outlook for MPM. Management has unflinchingly executed their strategy to achieve the vision of being a market leader in the OSV space in Indonesia – we now look forward to their next epoch.

Source: OSK-DMG.

AK71 said...

Talking to myself. I recently started accumulating again at 27.5c.

Contract for the jack-up rig is a key near-term catalyst. MPM’s first jack-up rig is scheduled for delivery in 4QFY15. We expect the company to have begun pre-marketing efforts. While its short-term outlook has been clouded by the plunge in oil prices, we believe fundamentals still support MPM’s rig ambitions:

i) young rigs are preferred over old rigs,

ii) oil prices should resume their uptrend over the 30-year lifespan of the rig,

iii) Indonesia’s voracious appetite for oil could lead to a lot of offshore drilling activity, even in the near term.

As contracts in Indonesia tend to be shorter-term in nature (especially with the anti-corruption regulations recently being implemented), we expect MPM to secure short-term contracts to begin building the rig’s track record.

... we think that valuations have troughed at 0.5x P/BV. Our SGD0.60 TP is pegged to 1.2x BV.


By OSK-DMG analysts: Lee Yue Jer, CFA & Jesalyn Wong.

ozxinvest said...

Hi AK,

Don't accumulate, gobble please! :P

The company can bundle the jackup and OSVs as a package, so I hope the contract value could be a lot bigger than just by chartering out the jackup alone.

More on the cabotage law and the jackup rig marketing strategy:

"Thanks for your email. We appreciate your kind interest on our Group. To the extent that we can provide as clarification without veering to providing material, price-sensitive information, we will aspire to do so to shareholders.

Cabotage in Indonesia was implemented progressive over the past few years, starting from less sophisticated vessels. All else being equal, a ID-flagged vessel should get a higher day rate when implemented because this is a very high barrier to entry.

And if in line with other vessels there is a upper limit leeway of 10% to 15% granted to ID-flagged vessels. This means that in the first instance when there is a lack of ID-flag vessel, the authorities will administer what is called a “dispensation” for duration 3 months, i.e. re-apply every 3 months. However, once a ID-flag vessel is available at US$165k vs US$150k non-ID flag i.e. 10% premium, the operator is obliged to sign on with the ID-flagged vessel.

We are pre-marketing with a main view of South East Asia in mind which is the incidentally most active region for newer jack-up rigs (i.e. 40+ out of about 65). We can compete based on competitiveness not strictly just on prices but on bundled services (i.e. our AHTSs as part of the overall package together with chartering of the rig). Then there is also the “replacement” demand of suggesting to charterers to switch from vintage rigs to more efficient premium ones."

yeh said...

hi AK

i have too much marco polo at 0.37

well,limited cash:)

not like you:)

AK71 said...

Hi ozxinvest,

I think that at the back of my mind, I am still holding on to the possibility of buying at a 50% discount to NAV. So, reluctantly, I am accumulating slowly at higher prices. ;p

Thanks for sharing the reply from MPM. That is very good input. Much appreciated. So, you buying more now at 29c, I guess? ;)

AK71 said...

Hi yeh,

I have limited cash too, you know. -.-"

Always good not to invest so much that we lose sleep at night. Must size our positions so that we have peace of mind. You know yourself best. :)

ozxinvest said...

Hi AK,

I have been buying since it went down from 36.5c to 27c.

I do wish to continue to buy more if it continues to drop below 27c but I also limited cash already, not like you, got multiple warchests...

So please gobble! :P

Now I am probably just doing the last part of the game, wait lor. Only a few months left, just a blink of the eye only mah.

ozxinvest said...

Just like Chinese New Year goodies- bak gua etc., buy cheap when no one is buying, somemore, no need to queue! Pay double for festive mood?! Nah.

AK71 said...

Hi ozxinvest,

There is no doubt in my mind that Marco Polo Marine's stock is now more undervalued than it was a year ago based on the discount it is trading to NAV. :)

Not knowing whether it would ever trade at a 50% discount to NAV (although it came rather close at one point), I decided to start accumulating as I believe that the jack up rig could be more of a positive than a negative.

There are other stocks which I have been accumulating and would like to buy more of. They are all competing for my resources which might be more than the average retail investor's but still quite limited. -.-"

Well, despite this, you might be interested to know that my investment in Marco Polo Marine has almost doubled in size from a month ago. ;)

ozxinvest said...

Hi AK,

I agree there is a limitation of how much we can buy up on a stock/stocks and we must know our limitation before we get ourselves into trouble , although we wish that we can buy up all the stocks that are on fire sale in the market.

Appreciate your generous disclosure on your recent accumulation and support for the stock, enough for me to get a rough figure from your past comments (:P).

I have been monitoring the market depth and transactions closely since June last year, at least now I knew that there is one real buyer for the last one month. Some times, I wonder if the sellers were real too, and probably it's just the traders pitting against each other, thus sending the price of the unwanted shares lower and lower.

I don't know if there is really a next big crash coming but I do think that the oil rout which has sent most O&G stocks down more than 20% and some more than 50%, is a mini crisis which is a good test for those who are invested in O&G before the oil price plunge, and a good opportunity for those who are not.

I do hope that we will have a very good outcome by the end of this year and even better by the end of next year, and the year after the next.

NAV above 70c and EPS above 10c. Possible by next year? Just my imagination.

Good luck to you and to all the shareholders who are still holding on to the ship and sitting on paper losses.

AK71 said...

Hi ozxinvest,

Yikes! You did a CSI on my holdings? I should have been more careful. -.-"

This will continue to be an "accumulate on weakness" investment for me, all things remaining equal. ;)

Good luck to us all! :)

AK71 said...

Singapore’s Marco Polo Marine has booked an increase in net profit in the second quarter ended 31 March 2015 despite a drop in revenue, amid the challenging operating conditions of the offshore market.

Profit for the second quarter of its financial year 2015 rose 26% to SGD3.8m ($2.85m) from SGD3.02m in the same period of last year.

In the first half, Marco Polo Marine’s profit jumped 79% year-on-year to SGD11.21m, boosted by the one-time gain of SGD2.92m on the disposal of a subsidiary, recorded in the first quarter.

The offshore services and marine logistics firm noted that for its second quarter financial period, oil prices seemed to have stabilised at higher levels compared to the previous quarter, but they are still at levels about 50% lower than what they were in the corresponding period last year.

“Without a broad based recovery in sight against the backdrop of a tepid global economy, sentiments and demand for vessels are expected to continue to be adversely impacted with the offshore oil and gas exploration activities in the region remain muted,” Marco Polo Marine commented.

It added that its offshore business of the ship chartering operations is expected to be the main driving force behind its financial performance over the next 12 months, while its tugboat and barge division is anticipated to remain challenging.

The company also said its shipyard division “continues to be firmly and broadly engaged with its new shipbuilding programme, targeting mainly the mid-sized OSVs and in meeting internal demands as well as those from BBR.” PT Pelayaran Nasional Bina Buana Raya tbk (BBR) is an indirect subsidiary of Marco Polo Marine.

With regard to a jack-up rig order, the construction is progressing as planned, according to Marco Polo Marine.

“Amidst the persistent weakness of oil prices and cut-back on exploration work by operators, market daily charter rates for jack-up rigs are not expected to recover meaningfully from their current subdued levels,” it said.


Source:
http://www.seatrade-global.com/news/asia/marco-polo-marine-books-increase-in-q2-profit.html

imaginator said...

Hello AK, first time posting a comment on your blog (and not sure if you will see this since this post is 6 months old).

I am reviewing my investment in MPM. Shares we bought at 0.40 and 0.32 previously.

1. Price is depressed now, but the company is still profitable and does not seem likely to be in the red any time soon.
2. P/E is at a super low of around 5.5X.
3. Company is buying back their shares.
4. NAV is 52 cents.

My only concern is that their previous quarter earning is boosted by a one-off earning of $4.5M from favourable exchange rate.

Still, I am considering to increase my holding in MPM.

Have I overlooked anything with my short analysis? What are your thoughts AK?

AK71 said...

Hi imaginator,

You will find updates and discussion on Marco Polo Marine in the comments section of another blog post here: Marco Polo Marine: Drilling for higher income.

I believe that the management's track record shows them to be prudent and competent especially in the way they sailed through the global financial crisis, for example. However, it doesn't mean that they won't make mistakes in the future.

Mr. Market is probably concerned about the rig that Marco Polo Marine has to take delivery of by end of the year. Although the timing of the delivery is smart since the Indonesian Cabotage Law will expand to cover jack up rigs in the new year, the crash in crude oil price means that it is harder to charter out the rig. This is the wild card.

Marco Polo Marine's balance sheet is rather weak. So, they really need to charter out the rig. If they don't, the balance sheet would become more heavily burdened.

Will they charter out the rig in time? That is still a question mark and I think Mr. Market is taking a wait and see attitude now. If we should add to our long position and I did add to mine, we have to understand that it is more of a speculative position now.

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