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Celebrity investment blogger who knows it all?

Saturday, October 18, 2014

I have been rather busy with a personal project lately and will continue to be busier than usual in the coming weeks. So, I could be absent from blogging for a day or two (or a few) from time to time.

Of course, I will try to reply to comments, emails and PMs in FB in a timely manner but if I don't, it is because I am too busy to do so. Please pardon my tardy replies in such instances.

This is, perhaps, another reminder that AK is a regular guy who can only try to do what he thinks is right with what limited resources (which includes time, of course) he has.

I know that many readers have come to think of AK as someone a bit more than ordinary. 

I know because I get comments such as:

AK is a super idol? 
If I were on American Idol, 
X-X-X.


So, is AK extraordinary?

I have never felt anything more than ordinary.

I don't feel very wealthy. 

I don't feel very smart. 

I don't feel very wise. 

There are wealthier, smarter and wiser people by the truckloads. 

An important difference is that AK has a blog and likes talking to himself a bit too much, I feel.

I shared with a friend who is in the business of investment education recently that I fear that some are beginning to think that I have all the answers. 

This is a problem that investment educators have. 

People think they have all the answers because they are regarded as gurus. If they don't have the answers, then, their credibility could be discounted.

Well, you might have heard this saying before:

"Good things not cheap. Cheap things not good."

So, expensive is better. Expensive course means instructor must be guru lor. 

Then, cheap is not good. Cheap course means instructor is half guru, maybe. 

What about free? 

Aiyoh, so simple. 

Free means instructor is not guru lah! (Where did I put SMOL's instant noodles cooking pot?)




AK is not an investment educator and he is definitely not a guru. 

ASSI is free for all to read and does not have advertising campaigns or other marketing efforts to "gurufy" AK. 

(The only ads are the ones you see in my blog which hopefully will help to make me some pocket money for the hundreds of hours I put into blogging. Sorry, I couldn't help myself.)

In fact, I periodically blog about how I am just a regular retail investor.

So, to the many readers who contacted me recently as well as those who are thinking of contacting me on whether it is the right time to buy certain stocks, whether their investments will be safe and whether the market has hit bottom, please forgive me when I mostly say I don't know (for now).

I will, however, say that if you have yet to pick up FA and TA, please do so. There are great books out there. 

If you don't know where to start, my blog has a list in the right sidebar titled "Food for thought". 

You might want to start by reading the books listed there. Education is necessary but it doesn't have to be expensive.

Remember, AK's path to financial freedom is not the only path. I am not so dogmatic as to insist that there is only one correct way.


It takes time to discover the path you are best at walking but while we are on the same path, I could share what I know with you but there are many things which I don't. 

So, I appreciate a hint, a nudge or a wink whenever you think I am walking into a "longkang". On that note, happy walking.
-----------------
UPDATE (29 July 2017):
I am so used to saying that ASSI has more than 2,000 blog posts. I must remember that we have more than 3,000 now.



Related posts:
1. Five revelations from a regular retail investor.
2. Revisiting AK's simple strategy with Charlie Munger.

SembCorp Industries: Increasing exposure.

Thursday, October 16, 2014

In a sea of red, I had many choices and I decided to increase my exposure to SembCorp Industries at $4.84 a share. This was one of the supports I identified in a reply to a reader. Read reply: here.




Based on what I feel are undemanding assumptions of a 40c EPS and a 15c DPS, my additional investment has an assumed PE ratio of 12.1x and a dividend yield of 3.1%. I feel that it is probably another fair entry price and, so, I did not bring out the heavy artillery.




With $4.84 failing to hold and the stock closing at $4.82 a share, we could see lower prices if sellers should continue to overwhelm buyers. Then, we could see $4.78 and $4.72 tested next.

The trading volume is very high on a massive down day. I cannot help but wonder if I could have a chance to buy SembCorp Industries at a PE ratio of 10x or lower in the coming weeks or months.

That would be when I bring out the heavy artillery.

Related post:
SembCorp Industries: "A safe price of entry."

Vard Holdings: Bloodbath.

Wednesday, October 15, 2014

When a reader asked if I might be nibbling at Vard Holdings, I took one look at the charts and said I would need dentures made of titanium before I dare think about it. See comment: here.

If we look at the weekly chart, we will gain insight into why share price hit 63c before rebounding. That is where we find the 150% Fibo, a relatively strong golden ratio. With share price closing above the 138.2% Fibo, we might see immediate support forming at 67c.

Vard Holdings: Weekly chart.

However, with such a high volume sell down today, there could be a follow through and, in such an instance, the question to ask is whether we might see the 161.8% Fibo tested and that is, approximately, at 59c.

Weekly momentum oscillators, and I am looking at the CMF and the MACD, are not supportive of a reversal. With lower lows looking set to form, unless there is a dramatic reversal with higher volumes on buy ups in the next two sessions, we could see a lower share price in due course. Any near term rebound in share price would probably be selling opportunities for both stale bulls and short sellers.


There are many types of mushrooms in the woods. This mushroom, I am not able to tell with confidence if it is edible or not. So, I am not nibbling.

When in doubt, I stay out. I have a delicate stomach.

Related post:
Vard Holdings: Initiating coverage.

Tea with TheMinimalist: Selecting a good financial advisor.

Tuesday, October 14, 2014

I am happy to publish another guest blog by TheMinimalist and this time the focus is on how to select a good financial advisor:

In this guest blog, I want to talk about a topic that is close to the hearts of many readers here which is picking a good financial adviser to work with. 

Why is it important? The reason is that the majority of us are clueless when it comes to managing our money. That’s why we read blogs like ASSI, which, in my opinion, is one of the best places to start in educating ourselves on the topic of personal finance.


Seek to establish a lifetime relationship with your FAs.
It is unfortunate but from my regular interaction with financial advisers (FAs) in Singapore,  I notice that most of them have no freaking idea about financial planning. I notice that they like to forge transactional relationships with their clients. What this means is that they approach their prospects, present their sales script, address any possible objections and then close the prospects. Rinse and repeat.

I find this a very worrying situation in Singapore. 

Firstly, financial planning is all about systems and processes, NOT products. For example, how can one set up a disciplined system to save at least 10% of one’s income each month? The answer can be found in my previous guest blog. 80% of the financial advisers will not even bother to go through this with you. Why? They don’t earn a single cent, duh! (Take note that most FAs in Singapore are still commission-based, a terrible system if you ask me.)

Secondly, financial planning extends far beyond selling insurance products.
An obvious area to bring up here is investment planning. I am seriously surprised by how most of the FAs are lacking in investing knowledge. Ask 80% them about fundamental/technical analysis and they simply give you a blank look. For those new to AK’s blog, fundamental analysis (FA) and technical analysis (TA) are the main due diligence processes before making an investment decision. FA tells you what to buy while TA tells you when to buy/sell off your investments. 


It’s not difficult to be financially literate so long as you are willing to put in the time and effort to pick it up.

Now, what do I consider is the million dollar question to put to your prospective financial adviser? Here’s the answer:

“Could you show me your financial plan?”

Huh? That’s it! Not education level? Not net worth? Not personality? Those are important questions but they are NOT the most important one.  Here, let me explain why.

Majority of Singaporeans do not have a written financial plan!

A financial plan (or financial blueprint) is the best piece of evidence to reflect the competency of a FA. Logically, you engage a FA to manage your finances for the long-term. If the FA cannot even plan out his own finances, how in the freaking world will you ever expect him or her to be capable of advising you on your finances? 


To give another example, you will not ask a designer to renovate your new house based on some arbitrary designs right? You will show designers the blueprint of your house, tell them what you would like installed in the living room, study room etc. You will talk through the plans with them; confirm that you are satisfied with everything first before starting renovations.

I previously mentioned that the FA industry is under-developed due to the commission-based system. This is mainly because the interests of the FA and the client can never be aligned. The FAs are focused on closing sales, selling high-premium products that can generate the highest % of commissions for themselves. Budgeting with the clients? Er...

Am I recommending a fee-based system then? My short answer is yes but this is not the best solution. This is because fee-based planning in Singapore is very expensive. A typical financial plan with a professional financial planner can cost upwards of S$4,000. (AK: Wow!)

What is the best system then? In my opinion, it is self-education through experts but I’ll leave this discussion for another day.

Since I like my blogs to be practical, here are some actionable items for you:


  1. Find out what a financial plan is. Talk to a professional planner. If you can’t afford to engage one at the moment, do not worry. I’ll discuss constructing a DIY financial plan for yourself in future guest blogs.
  2. If you are meeting financial advisers now or in the future, ask them to show you their financial plan. If they can’t produce one, please think TWICE about engaging them for their services. He or she is a financial salesperson, NOT a professional planner.

P.S If you have found my guest posts useful; please feel free to share it among your friends via FB or e-mail. J


Note from AK: 
I think I shall have to t-loan from SMOL his instant noodles cooking pot on behalf of TheMinimalist. Works quite well as a helmet.

Read other guest blogs by TheMinimalist: here.

OUE Limited: A nibble.

Monday, October 13, 2014

On 25 September, I wondered in a blog post if I might be given a chance to pay 50c for what was worth a dollar. I am referring to OUE Limited's stock, of course.

Twin Peaks.

Although already trading at a hefty discount to NAV back then, I was concerned about how its luxury condominium project, Twin Peaks, could be a drag on performance. Also, looking at the charts then, selling pressure showed no sign of weakening. So, I decided to wait.

Today, I became a shareholder of OUE Limited as my overnight buy order at $2.01 a share was filled.


As the NAV/share is $4.04, I have paid 50c for what is worth a dollar. My wish came true.

It is a very small long position as sentiments are still very bearish and if the $2.00 psychological support should give way, we could see lower prices.


Could we see $1.96 or even $1.92? It could happen but it might not. If it should happen, I suspect that it could be a slow slide downwards. So, I am not going to be too hasty or "show hand" as some readers would say.

If the stock should be well supported and if the support at $2.00 should hold, then, I could add more to my long position if a reversal should take place.

Related post:
OUE Limited: An asset play that could be cheaper?


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