Little Book of Value Investing.

For anyone who wants to learn about value investing, I discovered an easy to read book.

The message I got is that value investing is easy enough but most people do not have the patience for it.

"Patience is sometimes the hardest part of using the value approach. When I find a stock that sells for 50 per cent of what I have determined it is worth, my job is basically done. Now it is up to the stock. It may move up toward its real worth today, next week, or next year. It may trade sideways for five years and then quadruple in price. There is simply no way to know when a particular stock will appreciate, or if, in fact, it will."

Of course, there are many ways to make money from the stock market and value investing is probably one of the best known, if not the most popular.

Get a copy for only US$ 6.48 to US$ 7.48.
Free shipping globally.

"Buying stocks that have fallen in price and yet still offer a margin of safety has resulted in successful investments."

I enjoyed the book which I feel is a well written primer on the subject of value investing. It is also inexpensive which makes it a value for money read as well.

Related post:
Warren Buffet: The world's greatest money maker.

Marco Polo Marine: The longer term picture.

I have blogged about how the daily chart of Marco Polo Marine spots many negative divergences and how anyone who should go long at present would have to do so in a measured manner. This means not throwing in everything including the kitchen sink.

How big could a correction be if it should happen? Looking at the weekly chart, we see that share price could pull back to support at 36.5c which is where a golden cross has just formed as the 20wMA made a bullish crossover with the 100wMA.

42c to 36.5c? Wah! That is a 5.5c decline or a 13% fall. If that scares us, we should stay away. After all, it could happen. Look at the volume on the weekly chart and we will see how it has been declining as share price tried to push higher.

Then, why am I not selling?

I like to marry FA and TA. In an ideal situation for me, FA tells me if a stock is undervalued and TA tells me when to buy. It is also true that FA tells me if a stock is overvalued and TA tells me when to sell. Remember, these are ideals.

Technically, I observed how trading volumes in the two black candle weeks are much lower. They are much lower than volumes in the white candle weeks. This suggests to me that sellers lack conviction.

The MACD on the weekly chart is still rising. There is no let up in the positive momentum. OBV has been rising over the longer term which suggests that there is more accumulation than distribution going on.

Add the fact that the stock is still undervalued given Marco Polo Marine's numbers and prospects as well as comparison to peers, there isn't a strong case for me to sell. In fact, the case to continue accumulating on weakness is much stronger.

Related post:
Marco Polo Marine: Taking reference from trendlines.

Beware of Chinese New Year goodies!

OMG!



A timely reminder for some, perhaps.

Confession: I have been eating bak kwa and pineapple tarts liberally the entire week! No wonder my pants feel somewhat tighter. Oh dear.

CapitaMalls Asia: Reduced exposure.

Although analysts from Citibank, OCBC and more have given CapitaMalls Asia glowing reports, the long black candle which was formed yesterday on the back of very high volume was ominous.

Breaking immediate support provided by the 20d MA earlier in the week, the bearishness was confirmed as trading started under the 20d MA. It then went on to hit the 50d MA at $2.06 before recovering a bit to close at $2.08.

The question to ask now is whether the 50d MA, the new immediate support, would hold. The MFI has formed a lower high. The MACD has formed a lower high. Negative divergences aplenty and bearing in mind that prices go down a river of hope, I put in an overnight sell order at $2.12 to reduce exposure.

If we look at the weekly chart which provides a longer term picture, the 20w MA is still under $2.00. Currently, it is at $1.93. So, in the event of further high volume selling, we could well see the share price going lower to this longer term support.

The longer term uptrend is still intact but we cannot discount the possibility of a stronger correction in the shorter term. So, as I try to be pragmatic instead of being overly bullish or bearish, I have reduced exposure at what I think is the support turned resistance at $2.12.

LMIR: An unimpressive 4Q 2012.

I don't have much to say other than how unimpressed I am with the results.

DPU: 0.74c (payable on 5 March)

Gearing: 24.5%

NAV/unit: 56c

Occupancy: 93.5%

The management could possibly work on positive rental reversions for leases expiring this year. They could also try to push occupancy closer to 100%. All these would contribute to a higher DPU.

Please, no more acquisitions at least in 2013. For now, efforts should be on improving the performance of the recently acquired malls.

If there should be any acquisitions and it could happen since gearing is at only 24.5%, I hope that the management will be more careful in their efforts.

Careful? Yes, to ensure that DPU does not get watered down again. This was something I talked about in past blog posts.

LMIR really tests one's patience and the management's record leaves much to be desired.

Related post:
LMIR: 3Q 2012.

See slides: here.

Saizen REIT: DPU 0.66c.

With the JPY having declined almost 20% against the S$, I was expecting a reduction in DPU, everything else remaining equal.

However, all else did not remain equal and instead of a reduction in DPU, an increase to 0.66c is what we have.

What did the management do to improve the DPU?

1. Aggressive buying back of units from the open market.

2. Continual buying of new properties in Japan.

3. Lowering finance cost through loan principal repayments.

4. Improved occupancy from 91.0% to 91.7%.

To be fair, the REIT actually deployed its cash reserves with regards to point 3. Whether it is able to continue doing this depends on their level of cash reserves in future.

So, there is still a possibility that we could see future DPU reducing not just because of a weaker JPY but also because future loan principal repayments could be made from the REIT's income.

However, if it should happen, I believe it to be just short term pain as future DPU could be then enhanced when finance cost becomes reduced further, everything else remaining constant.

I am happy with the numbers reported and will be even happier when income distribution takes place on 22 March 2013.

See announcement: here.

Related post:
Saizen REIT: Still a buy?