Which investment and personal finance bloggers to follow? (5 revelations from a regular retail investor.)

Whether we like it or not, many things in life have to be measured. However, it gets rather irksome when people want to measure us against others. 

If you get the feeling that AK is going to be ranting in this blog post, you are right!






My school results were measured against my cousins' all the time, I remember.

When I was a bit older, I told my mom and my aunts very firmly that I didn't like that. They stopped.

I think it was more fun for them than it was for me.

Now, for investments, it is the same thing. For some people, is not enough that we do well, we must be the best. 

Why do some people get so fixated with measuring and comparing everything?






"Wah, you are short! I am long!"

(Hey, I am talking about positions lah. Think straight hor. Huh? What do you mean 64 positions? Aiyoh, I don't know what you are talking about.)

Anyway, it gets so tiring sometimes that I wish I do not hear or read anything like this for a long time. 

It just gets quite pervasive at times.

I have been asked by some people on and off to give more details regarding my portfolio so that they can decide if I am beating some benchmark. 






What benchmark? 

The only marks I know on benches are graffiti in the public parks which might include the odd phone number offering some services by some people. 

Huh? Financial services? 

You say leh?

When I politely declined (for the umpteenth time), some people asked, 

"How would I know if you are worth following if I don't know?"

Wah! WAH! WAH!!!!!

Which color tastes better?

Hey, bro. Here are a few things I don't mind revealing:

1. Don't follow me. 

I have this fear of stalkers. I don't know why. I am just so scared of being stalked.

2. My investments might beat the index or they might not. I don't really care. 

All I care about is getting in with a margin of safety and having a dividend yield that makes sense. 

OK, sometimes, I get a little adventurous but I try to make sure that the occasional misadventure will not kill me. Yes, what I do care about is not losing money overall.





3. I never claim to be an expert or a guru. 

I am just a regular retail investor who got lucky quite regularly (I will admit). I say this all the time. There are some people who believe me and although not all are polite about it, I have no doubt that they are all clever chaps.

4. I am not very clever at spotting growth in companies. 

I can't seem to see very clearly what is in the future. I don't think anyone can guarantee growth. So, I rather get my hands on something which is more or less guaranteed, trying to avoid being stung at the same time.





5. The only person you should really follow is yourself. Know yourself. Know your temperament. Know your aptitude. 

You could be good at some forms of investment. Then, just stick to these.  If you want to be the best in the field, well, go ahead. Just, please, don't think that I feel the same way and that I have to be the best too.

OK, now I have a blog post I can direct some people to in future.

Related posts:
1. Motivations and methods in investing.
2. Market gyrations, my portfolio and a sabbatical.

Singapura Finance: 1 for 1 rights issue.

I have been a Singapura Finance shareholder for a few years. If you have not heard of Singapura Finance, well, it is not surprising as it is one of those sleepy stocks that don't really shout out for attention.

Why did I become a shareholder a few years ago?

1. They have a good track record of rewarding shareholders with meaningful dividends.

2. The stock was trading at a big discount to NAV. (It still is.)

Nothing exciting, really. Just the usual stuff I look out for.

In the last few years, however, earnings came under pressure. EPS declined and dividend per share (DPS) also declined.

The reason really is due to the low interest rates environment and the Chairman said:

"The Singapore Dollar interest rate, which closely tracked the US Dollar interest rate, remained at an exceptional low level throughout the year. As a result of the continual low interest environment coupled with the relentless market competition, interest margin was subjected to immense pressure and deteriorated further during the year. Against such challenging external backdrop, and the need to provide additional collective impairment for the loan allowance, the Group profit after tax for the current year declined 21.2% to $5.3 million." (Taken from Annual Report 2013.)

How are things looking now? Results improved in 2014 and profit after tax rose 10.2%.

Now, with interest rates likely to rise next year, it seems that Singapura Finance might do much better again in future. To ready themselves, they are strengthening their capital base by having a 1 for 1 rights issue at an issue price of $1.00 per share. This rights issue is renounceable which means that shareholders could sell nil-paid rights in the open market if they do not mind having their shareholdings diluted.

I know that some readers might be thinking about possibly buying Singapura Finance's stock now to participate in the rights issue. If you are one of them, you might want to consider the following first:

With a theoretical ex-rights price (TERP) of $1.275 per share, nil-paid rights selling at any price lower than 27.5c (when they start trading) would be "cheap". At a NAV/share of $2.10, a share price of $1.55 is cheap (26% discount to NAV) but, post rights, NAV/share becomes $1.55 or so. So, the TERP of $1.275 is less cheap (17.75% discount to NAV, post rights issue). Of course, rights shares at $1.00 each represents the best value for money (35.5% discount to NAV, post rights issue).

Expect EPS and DPS to half as well, ex-rights. 3.5c and 2.5c, respectively, perhaps? Of course, this is assuming that everything else remains equal and that there is no improvement in business performance in future which seems unlikely to me.

For existing shareholders to subscribe for the rights allotted to them is, ultimately, to show confidence in the management that they will be able to improve earnings by more than 100% in due course. It has to be more because even if earnings should improve by 100%, it would mean that business performance has not improved one bit on a per share basis. Then, it would be better not to have had the rights issue.

I will subscribe for my rights as I am confident that interest margin will improve in future although the business environment is likely to stay competitive. I will apply for excess rights too but I will give the nil-paid rights a miss.

Taking part in the rights issue is to believe that the additional funds will generate a much higher EPS in the medium term. In the short term, business performance could continue to be lacklustre and whether this would put downward pressure on the share price or not is hard to say.

See announcement on rights issue: here.
Visit Singapura Finance's website: here.