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Sizing my investment in SPH.

Saturday, February 11, 2017


A journey through time with SPH.

When I tell people I am a blogger, some assume that I am IT savvy. People who say that are probably not very IT savvy. We only need to know how to use a word processor to blog.

My generation and those who are older would remember that in between typewriters and PCs, we had word processors. Their time on Earth was pretty short, however.

I am really a dinosaur. If I were to look for a job today, with my qualifications and skills, I would probably have a hard time getting a job that pays more than $3,000 a month.

From being economically inactive to being unemployed? I shudder at the thought.

I still like hard copies of newspapers, magazines and books. I tried using an e-book reader which someone gave me many years ago. I didn't like it.

I should have sold it when it was still worth $500 but it was a gift. Now, it is just another item collecting dust at home but I can be rather sentimental.

Being sentimental can be a terrible thing for an investor, of course, as we constantly tell ourselves not to fall in love with our investments. Well, I can only try my best as I am only human.

I am lucky that I am also pragmatic. I like to think that being pragmatic helps to temper any sentimentality in me. 

When I spoke with somebody who bought SPH shares recently, I said that I wouldn't buy SPH shares today. It happened so quickly that I surprised myself a little bit.

I have always suspected that there is more than one AK inside me. Spooky!

I have been an SPH shareholder for many years and doing a back of the envelope calculation tells me that, taking in the dividends collected over the years, my earlier investment in SPH is almost free of cost.

However, dividends collected for my later investment in SPH probably managed to do only a bit more than cover the decline in its share price over the same number of years.

Like it or not, media remains the core business of SPH and that business is very much disrupted. 
On hindsight, SPH should have ventured more aggressively into real estate but they didn't. 

I remember Dr. Tony Tan mentioned that selling their land in River Valley was a mistake many years ago. He was right.

Now, we see disruption technology everywhere and our investments could get disrupted one way or another. 

Being rather old fashion could be a problem for an investor like me as I am not always in touch with the changes in technology nor fully aware of the implications of such changes on the ground.

Having said this, until I could find replacement investments for income, I was quite willing to hold on to my investment in SPH. It is still an entity which has a relatively strong balance sheet and is still generating an income for me.

Recently, as things turned out, I added several income producing stocks to my portfolio and I decided to let go of my later investment in SPH.

This effectively reduced one of my larger non-REIT investments by half, boosting my cash level which would allow me to take bigger positions in other income generating investments.

I am retaining my earlier investment in SPH as it is almost free of cost and I still hope to benefit from possibly the sale of Seletar Mall to SPH REIT at a later date.
Related post:
Fate of my investment in SPH.

3 comments:

AK71 said...

Lee Jiahui:
What about your niece's sph?

AK:
My niece became a shareholder in 2009. Her entry price was relatively low. She has received 8 years of dividends including the special dividend from the listing of SPH REIT. She won't add to her investment but she is OK to keep her investment and to continue receiving the smaller dividends in future.

For those who are somewhat lost, see:
At what age to start investing in stocks?

Kevin said...

Hi AK,

You have evolved ok and not a dinosaur. i noticed you started to attach youtube videos on your blog posts unlike before. :P

I think the problem with SPH is the management team. They are clueless on how to bring the company to the next dimension. They are not proactive in seeking new opportunities in the current economic landscape. For example, they can partner Singtel or ST electronics in the ICT education space. SPH can provide the content and Singtel and ST electronics provide the tech portion.

You look at Singpost, they are also affected by disruption which affected their traditional mail business but they evolved and went to take on new businesses which are e-commerce and logistics. Their previous CEO, Wolfgang Baier did a great job in the transformation and I am sure they will begin to reap the gains in no time with the partnership of Alibaba being their second largest shareholder.

I also agree with you that I wouldn't buy SPH shares today if the status quo remains as such. :P

AK71 said...

Hi Kevin,

Thank you for the compliment. I will continue to include what I feel are interesting video clips in my blog as I spend quite a bit of time watching stuff on YouTube these days anyway. :)

You are not the first person to tell me that SingPost which is also an old economy entity like SPH is doing something right to fit into the new economy. I did spend a bit of time looking at SingPost just a few months before Alibaba came into the picture but gave up after the share price went through the roof. I remember mentioning in my blog before.

Today, I spent most of the morning and almost the whole afternoon re-looking at SingPost. I am hoping that an incomplete analysis (which is what I always do) will give me some idea as to what might be a reasonable price for me to pay for a small investment in a multi-billion dollar entity that is going through a massive transformation in an effort to stay relevant.

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