Old Chang Kee recorded a big loss in Q4.

I received a small handful of messages regarding Old Chang Kee's latest results and this is a quick blog about the matter.

Old Chang Kee is a fantastic cash flow generating machine and it remains one of my better although smaller investments. I have no intention to let go of my investment because nothing has changed.

Of course, when I saw the article in The Business Times declaring a huge loss for Old Chang Kee in Q4, I took notice. I spent one minute looking at the financial statement and decided that all is well.

One minute? Yes, only one minute.

I just looked at the income statement to see what has changed. Noticing a spike in expenses, especially other expenses, I scrolled down to find the reasons for the spike.

What I was looking for was whether the spike was going to be material and whether it was going to be enduring in nature. Some of the increase in expenses will continue to be challenging. Labour cost. Rental cost. You get the idea.

However, most of the increase in expenses comes from a revaluation loss which is a non cash item. Non cash item does not affect cash flow. So, unruffled, I went back to gaming.

To be investors, we should pick up some basic knowledge about accounting. Leave the more complicated stuff to the professionals but we should have some basic knowledge.

Financial statement:
http://oldchangkee.listedcompany.com/newsroom/20170529_174958_5ML_AYW9SB1XWVC26BOD.1.pdf

Related posts:
1. Income Statement.
2. Recommended books.

Still making money in Croesus Retail Trust. Peace.

Hi AK,

I wrote to you a few months ago and told you a prominent blogger sold all his investment in Croesus. I asked you if you would be selling too. You gave me one of your typical AK answers. Now, a few months later, I am kicking myself because I sold half of my investment since I was not sure if I should stay fully invested. It was my biggest investment. If I had your conviction, I would have avoided this loss...

Hi R,

I have the feeling that you might not have understood the investment enough to give you the conviction to hold on to a substantial position in Croesus Retail Trust.

Your position could have been too big and peace of mind eluded you.

Money not made is not the same as money lost. By holding on to half of your original investment, you are still making money. Lesser by half but you are still making money.




Peace of mind is priceless. By reducing your investment by 50% when you did, know it or not, that was what you were after. 

Now, please don't lose something precious like this by saying you should not have sold.

Best wishes,
AK
Related post:
History with Croesus Retail Trust.