Courage Marine: Awakening.

On 11 Sep, a reader, Wong, asked if it would be a good idea to accumulate more units at 18c.  I avoided giving a straight answer as usual and replied:

"If you have excess funds lying around and if you think that the shipping industry has turned the corner, 18c seems inexpensive.

"If you already have a large investment in Courage Marine, then, you have to question how comfortable are you to increase exposure to this company.

"In my opinion, Courage Marine is fundamentally sound. If there should be nasty surprises in the macroeconomic environment, Courage Marine would most probably survive because of its strong balance sheet. Shipping is a cyclical business. We have to ride the waves."

Courage Marine's share price has been trapped in a range between 18.5c and 19.5c for a long time and there are some whom I "overheard" in Bully the Bear's cbox being sick of holding on to the shares.  Patience is a rare commodity, after all.

With more people conversant in TA, charts are revealing its secrets to more market participants and there was a huge sell queue at 19.5c today as many recognise it as a strong resistance. However, there was heavy buying up in the first half hour of trading and 3,696 lots were bought up at 19.5c.  Trading volume is also impressive so far with a total of 5,247 lots changing hands.

Is Courage Marine awakening? If the resistance at 19.5c is taken out convincingly, it could very much be the case. Good luck to fellow shareholders.

Related post:
Courage Marine: Range bound.

Rights and wrongs: Charlesming's perspective.

Charlesming is the blog master of Time to Huat and also the person who introduced me to the world of Technical Analysis (TA). 

For anyone who might have wondered how a techno dinosaur like me would start a blog, well, although it was primarily because of boredom last Christmas Eve, Charlesming was the person who planted in my head the idea which led me to find out more about blogging during that night of boredom! Reminds me of the movie "Inception"! 

A comment from him recently shows the thinker that he is and I am putting it up as a separate blog post here:

I personally feel that not all rights issue are equal. Rights are issued for various reasons. The exercise price is important to find out if we are getting a good deal. Another important aspect is to figure out what the funds raised are for. I agree REITs need to continue to 'trade'. 

Ideally there is no need to buy and sell assets, save on the cost of doing so and just generate a stable yield forever. The world doesnt stay the same forever. With a large portion of the income distributed via dividends, REITs simply dont have the funds to make accquisitions. Question is, do we agree the accquisition they are interested in, is in good taste and value? If I deem so, I dont see a problem in supporting the rights issue. If I dont let go of 10c, how to gain $1? That is not to say that all rights issues are worth me putting up that 10c.

 So I feel it is inaccurate to downplay rights issue as a return of dividends. While partially true,there are some deals where I would like to pay them back some dividends so that they can grow and get more dpu for investors. On the other hand if they make a 'hopeless accuisition' where I cannot see how my 10c can be made to work harder to generate that $1 then I will not support it. I may sell the rights, and/or I may let go of the entire stake I own even.

 Taking it one step further, a rights issue gives me a choice. A placement to a private investor(s) gives me zero choice and I cannot help but watch my stake get diluted . This is where I may get a little annoyed.

It is inevitable rights issue (and in some cases placement) is a way of life in REITs and companies looking to expand their business. All are not equal and investors have to figure if the company is doing the right thing, at the right price, and ultimately, at the right time too (market sentiment).

 As for the word 'fool' I suppose it can be subjective depending on the context used. An investor, whether buying it at a cheap or overvalued price is a fool or not, could depend on many factors. Could we be fools who over analyze? Could we be fooling others and ourselves, with our own biased opinions? Fool or not, the market is the only one who is right.

One of the lil quotes that I like - "Listen to your heart. It is on the left, but it is always right'.

I prefer to think (as a trader and investor) if I profit after selling something and the price continues to head up, I just take it as its for someone else to profit. One of my own strategies is to take partial profit along the way up. This makes me a winner regardless of the price action thereafter.

 Just my 2 cents worth from my very limited knowledge. I hope to learn over the years.

Related post:
REITs: Simply explained?

Gold and Silver highest in the last 12 months.

Gold is currently at US$1,267.51 an ounce while silver is currently at US$20.42 an ounce. These prices are higher than in June 2010 when I blogged (again) about how we should hold some gold and silver as a hedge against all other forms of investments and against fiat currencies. What little exposure I have to these two precious metals is turning out rather nicely.

In the short run, I see immediate support for gold at US$1,260.00 an ounce and immediate support for silver at US$20.20 an ounce.  Gold is now challenging resistance at US$1,270.00 and if it does break this, it could go much higher.

On 20 June 2010, I blogged that "if we believe in charting, silver's longer term trend is still up and I would buy more on weakness." That view has not changed.

Related post:
Hedging and precious metals.

Gold hit $1,269.45 on the London Bullion Market on Tuesday afternoon, beating the previous record of $1,265.30 struck on June 21. Read article here.

Addition on 15 Sep 10:
Gold prices under the continuous contract set a new all-time high of $1274.60 per ounce, well above the previous all time high of $1266.50 per ounce. Silver prices continued their ascent as well. Specifically, the December contract for the precious metal hit $20.55 per ounce.

K-REIT: Trading bands.

It seems that the worst is over for office rentals in Singapore. There is a general expectation that things have stabilised and we could even see some upside next year.  I have a small position in K-REIT in my frozen portfolio and this small investment is actually enjoying a paper gain now.  So, when would I sell my stake?

We could do a very simple TA for K-REIT even if I do not have access to today's data on ChartNexus. Price touched a high of $1.28 before closing at $1.26. It opened at $1.27 and touched a low of $1.25. So, picturing it mentally, it formed a black spinning top today. That it touched a high of $1.28 is significant as it confirms $1.28 as an important resistance level. Volume was only half of yesterday's which suggests a lack of conviction by sellers today even as price action formed a black candle.  So, the indecision suggested by the black spinning top does not have strong downside pressure, I feel.  In case of continuing downside, where do I see support?

Looking at the chart, it is quite obvious that $1.22 was a major resistance level and I expect this to provide immediate support in case of a move downwards. If this breaks, the next support is at $1.16.  Having said this, you could have noticed an interesting phenomenon. K-REIT seems to be trading in a 6c trading range recently: $1.16 to $1.22 and $1.22 to $1.28.  This is useful information for anyone who is interested in profiting from some range-bound trading.

In the event that $1.28 resistance is taken out, one could therefore expect $1.34 to be the next resistance level if this phenomenon continues to play out.

Singapore office plays better bet vs developers: Morgan Stanley
Tuesday, 14 September 2010

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