Don't build traps for ourselves. (FKA "The worst type of readers.")

We might have all heard of the saying that "no publicity is bad publicity". 

Well, it is generally for people in the entertainment industry since anyone who wants more people to recognise them and be aware of them would "benefit" from all forms of publicity.

After photos of his sexual escapades were made public, Edison Chen was able to land a deal with Carl's Jr. to be their spokesperson for the launch of their "Thick Burger" in Asia! 

What a boon from his indiscretion!





Well, in the last two days, off the top of my head, traffic to my blog increased by some 25 to 30% because of an edited version of an old blog post of mine appearing in Yahoo! Finance Singapore.

I am still trying to fathom if this is good news or bad.

Follow the link to Yahoo! Finance Singapore and you will see tens of comments and almost all are negative. 

Many are downright rude while most are dismissive. 

So, this is bad, isn't it?

I cannot draw the conclusion that it is bad because none of these negative comments appeared in my blog. 

So, the writers of the negative comments probably did not visit my blog at all. 




They made assumptions and passed judgement based on one edited version of an old blog post of mine.


Then, what about all the traffic that Yahoo! Finance Singapore sent me? 

These are probably people who are more open minded and who bothered to find out more about me and my ideas. 

So, this should be good, right? 

The willingness to find out more could be the first step to a new journey.

After blogging for almost three years, I have encountered many types of people. 

There are many who are appreciative of what I have done although I am not sure that I am all deserving. 

There are also rude ones who called me names and even questioned my motives. 

I am very sure I don't deserve such treatment. 





However, these are not the worst. 

Not the worst?

I believe the worst are those who pretty much dismiss what I have shared to be fairy tales.

The worst are those who think that I am a prolific fiction writer and that my claims that people can escape wage slavery are spurious.

Actually, for those sceptical readers of the edited version of that particular blog post of mine in Yahoo! Finance Singapore, if they would only make the effort to visit my blog and read the unedited version including the comments left by some readers, they would be able to appreciate how it is all possible.





A life with greater financial security for any regular wage earner who is not disadvantaged in any way is possible.

Often, the traps we find ourselves in are built by ourselves.










 

Related posts:
1. Article published in Yahoo! Finance Singapore.
2. Do you want to be richer?
3. Wage slaves should be fearful.
4. ASSI is an affiliate of BetterWorldBooks.

Buy gold and silver as insurance.

Anyone who is regularly reading news on personal finance would have come across articles on why gold and silver prices are set to rise even higher. Marc Faber and Jim Rogers, both people I respect, are just two prominent figures who have put forth compelling reasons to own some gold and silver.

Personally, when I started this blog, I also wrote about the real value of gold and why silver would be a better buy than gold after I researched the gold:silver ratio. I started a separate blog on the precious metals later on because I want to concentrate on blogging about investing for income here at ASSI.

We just have to do a quick check online to see how much the prices of gold and silver have appreciated since I started blogging three years ago to see how well anyone who invested in these metals have done in that time.

My current attitude towards buying physical gold and silver is like my attitude towards paying for insurance. To own physical gold and silver is an insurance against the inherent flaws of fiat currencies. Just like how we put aside a certain sum of money annually to pay for our insurance policies, I believe that setting aside 5% of my annual income for the purchase of gold and silver as insurance is not too much.

So, am I saying that I do not buy gold and silver now with the hope of making more money in S$ terms? Well, if we think of gold and silver as a form of money, then, buying gold and silver in the hope of making more money in our home currency is like forex trading. It would make more sense to trade in paper gold and silver then.

Buying physicals would be more suitable for anyone with a crisis mentality.

I am posting this article here in ASSI instead of my blog on the precious metals because the latter's readers are probably conversant with the reasons why we should be in precious metals. I want to reach out to readers here in ASSI who might not have any position in the precious metals yet.

Let me guess. Some of you are probably wondering if it is a good time to buy now. Well, if we believe in the thesis that the precious metals are set to rise much more in price over the next few years and if we are holding them as insurance instead of trading them for short term gain, the question becomes less important.

Technically, there is some near term weakness and if we want to wait to buy lower, a 5% correction in price could see buyers returning. Remember, however, that technical analysis is all about probability, never certainty. It never hurts to hedge.

Related posts:
1. Silver bullion coins.
2. Gold and silver: Important assets to own.
3. Gold or silver?
4. Silver: Some views.
5. Silver: Weekly chart.

Olam: Renounceable Underwritten Bond-Cum-Warrant Rights Issue.

Olam, in response to Muddy Water's claims, said that they "have more than enough capacity to meet ... repayment obligations of S$1.5 billion in the next 12 months, as well as ... likely capex of S$1-1.25 billion in the same period" and that "without raising any further debt (they) can easily meet ... debt repayment obligations and pursue ... planned Capex, in addition to meeting the on-going working capital needs." Then, why are they issung bonds-cum-rights now?

This reminds me of CitySpring Infrastructure Trust's claim a few years ago that they did not have to issue rights and that people who said they had to didn't understand their business. It could also be a coincidence that Sunny Verghese was also the chairman of CitySpring Infrastructure Trust then.

Each 1,000 shares owned will get to subscribe for 313 bonds with a face value of US$1.00 each. The bonds have a 5 year tenor and a coupon rate of 6.75%. This unsecured bond will raise some US$750m for Olam.

Each 1,000 shares owned will also be given 162 free warrants. Strike price of warrants is US$1.291. The warrants expire in 5 years and cannot be exercised in the first 3 years. This will raise US$500m for Olam if all the warrants are eventually exercised.

Full details here:
Olam International announces proposed US$750 M Renounceable Underwritten Bond-Cum-Warrant Rights Issue

Rights issues to strengthen the balance sheet is bad news for shareholders as it dilutes EPS (eventually, in this case). It also admits that the balance sheet was weak in the first instance. What are shareholders to do? It is Hobson's choice.

"Temasek is committed to take 100% of rights not subscribed by existing shareholders." Just like the case with CitySpring Infrastructure Trust, Temasek Holdings could end up enlarging its share of Olam.

　
"The Transaction is available to all its equity shareholders and provides a unique and rewarding opportunity to participate in the long term growth of the Company." This requires a leap of faith and I certainly hope for all shareholders that things improve from here.

Share price could take a hit tomorrow. $1.35 perhaps?

Related post:
Olam: A time bomb?

Article published in Yahoo! Finance Singapore.

Some time ago, I was approached by MoneyMatters.SG for permission to re-publish a few of my older articles. I consented as I feel that if more people could access my writings and benefit from my ideas, it would make me very happy.

Today, I found out that an article was re-published in Yahoo! Finance Singapore on 28 November 2012 under the Special Features section. Although edited, the message is intact and the spirit has been retained.

Link here: http://sg.finance.yahoo.com/news/want-richer-065248352--sector.html

If you feel that this article could be useful to your friends or family, please feel free to share it. If we can help people to better themselves and improve their financial health, we should.

Help people to help themselves. I like this. :)

The original post (unedited):
Do you want to be richer?

AIMS AMP Capital Industrial REIT: 4.35% Fixed Rate Notes.

AIMS AMP Capital Industrial REIT is raising $30m in the debt market from the issue of unsecured 4.35% fixed rate notes in a private placement. This is the second series of such notes to be issued.

The first series of such notes was issued in August 2012 and was 5x oversubscribed. Those notes were at 4.9% fixed rate and mature in 4 years in 2016. That exercise raised $100m.

The second series of notes are to be issued on 5 Dec 2012 and will mature on 5 Dec 2019. The money raised will go to repaying a $28.8m secured bank loan due in Feb 2014.

There are improvements in the second series over the first:

1. The cost of debt is lower at 4.35% compared to 4.9%.

2. The tenor is longer at 7 years compared to 4 years.

These improvements are significant as they suggest that there is a strong demand for debt issued by the REIT. The demand is so strong that lenders are willing to accept a lower yield for a longer tenor. This bodes well for future issues and also lends confidence to investors in the REIT as funding concerns are addressed.

One of the major criticisms of the REIT model was that the long term investments in real estate were accompanied by short loan tenors, usually three years, from lenders in the past which were the CMBS (now exinct) or banks. Longer loan tenors provide stability.

However, the longer tenors of medium term notes attract a higher coupon rate when compared to shorter term bank loans. The higher coupon rate also reflects higher risk to lenders from the notes being unsecured. The bank loans AIMS AMP Capital Industrial REIT secured in the past have an average of 3.3% in annual interest burden, if I remember correctly, which is much lower than the coupon rate of the current exercise but I guess we cannot have everything.

AIMS AMP Capital Industrial REIT has the same BBB- credit rating as CDL-Hospitality Trust and I expect the REIT to issue more of such notes in future. Could we perhaps see a 10 years tenor and a 3.5% coupon rate in the next issue?

Related post:
AIMS AMP Capital Industrial REIT: 2Q 2013.

Useful information on the REIT:
Corporate Profile Seminar Presentation (17 Nov 2012)

Capitamalls Asia: Longer term uptrend.

Earlier this month, I mentioned that we want to accumulate shares of Capitamalls Asia on any correction in price. Well, it happened while I was away in the USA and anyone who bought some then for a trade would book a 10% gain by now.

Daily chart

Weekly chart

As price rose, volume has been falling. The MACD, a price momentum oscillator, has not formed a higher high even as share price did. The MFI, a momentum oscillator that takes in both price and volume, likewise is lethargic. The negative divergences thus formed suggest a possible correction in share price is near.

In the longer term, share price is likely to continue strengthening as the uptrend is intact with all the MAs rising. So, the appropriate strategy for me continues to be to add at supports. I would look to the 50d MA for guidance as to when to add to long positions.

Related post:
Capitamalls Asia: Any correction is a buying opportunity.

Top 1,000 websites in Singapore.

In my first year or so as a blogger, I would track and analyse my blog's traffic and I even published reports complete with charts every few months. A reader said that I was producing quarterly reports like listed companies. Anyway, after slightly more than a year doing it, I stopped. I guess the novelty wore off.

Today, I look at Alexa and was pleasantly surprised to find that ASSI has made its way into the top 1,000 websites in Singapore. I feel that this is probably a milestone and so, I am sharing this bit of discovery here with my readers. If ASSI were indeed a business like some people tell me it should be, I guess a special dividend could be declared. ;-p

Related posts:
1. Alexa (Part 2).
2. ASSI 1Q 2011 quarterly report.

Singaporeanstocksinvestor.blogspot.sg's three-month global Alexa traffic rank is 348,802. Visitors to the site view an average of 1.4 unique pages per day. The site is relatively popular among.

  

Alexa Traffic Rank
	995 Rank inSGTraffic Rank in Country A rough estimate of singaporeanstocksinvestor.blogspot.sg's popularity in a specific country. The rank by country is calculated using a combination of average daily visitors to singaporeanstocksinvestor.blogspot.sg and pageviews on singaporeanstocksinvestor.blogspot.sg from users from that country over the past month. The site with the highest combination of visitors and pageviews is ranked #1 in that country.

Buy stuff from your favourite online stores and get them to ship over to Singapore using vPost! Three lucky customers will win a dream vacation!

Details here: vPOST.

Marco Polo Marine: Patience will be rewarded.

I added to my long position in Marco Polo Marine as long term support was tested. Today, its share price touched a high of 35c before closing at 34.5c on the back of rather high volume. The positive divergence between the CMF and price action has played out. The MACD is rising in the negative territory and we could see price going higher and momentum going positive once more. A retest of 37c, the high of the double top, could happen.

Daily chart.

Weekly chart.

Fundamentally, Marco Polo Marine presented an impressive set of numbers:

All-time high net profit of S$21.3 million against consecutive 8 years of record high revenue at S$89.8 million and record high gross profit at S$29.2 million for FY2012.

Record gross profit and net profit attained with margins at enhanced levels of 32.5% and 23.8% for FY2012, representing increases of 4.4% points and 3.0% points over FY2011 respectively.

Operating cashflow position reversed from a net cashflow used in operations to a net cashflow generated from operations of S$34.5 million in FY2012.

EPS of about 6.3 Singapore cents for FY2012, representing an increase of 23.5% over FY2011, while NAV per share increased by 14.4% to 41.4 Singapore cents as at 30 September 2012.

Declaration of a special interim dividend of 0.8 Singapore cents per share for Q1 FY2013.

See: Media Release.

In earlier blog posts, I stated my reasons for believing that Marco Polo Marine's share price is too low and that we could see a much higher price over time.

If we expect Marco Polo Marine's shares to trade at similar valuation to its peers, a PE of 8x would value each share at 50.4c. This implies a 46% gain from the last closing price of 34.5c.

Patience will be rewarded.

Related post:
Marco Polo Marine: Accumulation mode.

Vending machines in the USA.

On this last trip to the USA, I came across a couple of vending machines that I have never seen before anywhere else.

Guess what this one was selling?

Scratch and win cards! US$3.00 each.

What about this one?

Electronics! Amazing, isn't it?

In a situation where there is a shortage of space and labour, vending machines could be the answer for products which might not really need salespeople.

In Singapore, we see machines selling drinks, snacks and even Gardenia bread. However, we have not even touched the tip of the iceberg. They could be one of the answers to Singapore's problem with high rentals and a shortage of labour.

Related post:
Distinctly Japanese.

Yomeishu: Win Megumi and a beverage mixer!

The everyday person works very hard on a daily basis, taking a toll on their health.

Yomeishu is able to restore and maintain your well-being with natural ingredients.

You can win the goodness of Megumi (a liqueur made with 13 oriental herbs for everyday relaxation), and a Japanese beverage mixer just by answering a simple question!

20 winners will be picked each week for 5 weeks.

This week’s entries close on 28th November 2012.

You could be a winner at:
Yomeishu Guess & Win!

Be cautious even as we accept higher risks.

When I did a Diploma in Business, I had to study Business Law. One thing I remember is that something we buy has to be "fit for the purpose it was built for" and be "of merchantible quality".

So, let's say you bought a contraption which was supposed to keep food fresh but it did not; then, it was not fit for the purpose it was built for. If the contraption really did keep food fresh but it started to fall apart within the first week of use, then, it was not of merchantible quality.

Singapore's Lemon Law which kicked in on 1 September 2012 stipulates a 6 months period in which buyers now have to take action on any defective product. This addresses the issue of "merchantible quality".

In the weekend edition of The Business Times, I read an interesting article on whether conventional wealth management wisdom which says that people nearing retirement should have more of their wealth in conservative bonds is "fit for purpose". This actually raised a question in my mind as to whether wealth managers are providing products which are fit for purpose or are they self serving sales people.

In the few encounters I had with wealth managers, I was advised to be more aggressive with my investments because people in their 30s and early 40s could afford to do so. One asked me why was I so conservative when I told him I was not interested in any of his proposals which sounded rather risky to me. I was then advised that only people nearing retirement should be more conservative.

So far, my personal experience with wealth managers has not been positive, having lost much money through products they sold to me. Unlike physical goods, wealth managers do not have to provide any guarantees as to a financial product's performance. This could be the reason why when the Mini Bonds and other structured products offered a "capital guaranteed" feature, they drew so many investors. Of course, they were not of "merchantible quality" but no buyer could tell until things fell apart. Unlike physical goods, it was too late to do anything.

In an environment of very low interest rates and high inflation, we have to seek higher returns on capital to protect our wealth. However, we have to exercise caution even as we accept higher risks.

Related posts:
1. Low interest rates' a double whammy for some.
2. To protect our wealth, we have to take risk.
3. Fraud: Like taking candy from a baby.

Silver bullion coins.

Sharing photos of some silver bullion coins I own:

I still believe that people who have some extra cash should own some investment grade gold and silver as a hedge against the flaws of fiat currencies. Where silver is concerned, I think the Canadian Maple Leaf is one of the purest around. Relatively cheaper too.

Read my latest piece on the topic in my blog on precious metals:
Gold and silver: Still important assets to own.

Related post:
Buy gold and silver as insurance.

Olam: A time bomb?

The high profile standoff between Muddy Waters and Olam is not about something new. Earlier this year in June, I wondered at Olam's share buy backs as well. I blogged about it and attached a section of research done by Kim Eng on the company then.

What Muddy Waters has said does make sense and Olam has to focus on its business rather than its share price.

Should Olam come to collapse (as we believe it will), its use of much-needed cash to buy back shares at this time should give rise to questions about whether fiduciary responsibilities have been breached – particularly given the possible existence of individual motivations that are not necessarily aligned with those of Olam’s lenders.  - Taken from Muddy Waters' open letter to Olam.

To read the letter in full, go to Muddy Water's website: here.

So, is Olam going kaput in time? I know that Sunny Varghese was at the helm of Cityspring Infrastructure Trust. I was not impressed with that entity and was lucky enough to exit with a small gain. Is he able to do much better with Olam?

Short sellers could home in on Olam in time and it would be interesting to see how things turn out.

Related posts:
1. Olam: Share price up on buy backs.
2. Cityspring Infrastructure Trust: Rights issue.

First REIT: 30,900,000 new units.

First REIT is having a private placement, issuing 30,900,000 new units at 95c each. This is to help pay for acquisitions announced earlier in September.

How will this impact existing unitholders?

Other than the advance distribution for the period 01 October to 25 November which is nice to have, existing unitholders' interest in the trust is going to be diluted.

The REIT has approximately 632,645,000 units in issue. The 30,900,000 new units will add 4.88% to the total units in issue.  Based on an estimated pro forma DPU of 6.77c, post acquisitions, the DPU post private placement is estimated to be 6.455c or 1.614c per quarter.

In 3Q 2012, the DPU was 1.68c. Annualised, it gives us 6.72c. So, unit holders seem to be better off pre acquisitions and private placement. We are likely to see a 3.93% reduction in DPU in future.

At a price of $1.02 per unit, I now estimate a distribution yield of 6.32%. If unit price should decline to 95c which is what the private placement's investors would be paying, distribution yield would be 6.65%.

The advantage of the private placement is that it would strengthen the balance sheet of the REIT without incurring hefty costs which would come with a rights issue as the amount raised is not big. However, the expected dilution and a possibly lower DPU in future is unpalatable.

See announcement: here.

Related posts:
1. First REIT: Acquisitions in Manado and Makasar.
2. First REIT: 3Q 2012.

Flew United Airlines SG-Japan-USA (but never again).

Added on 12 April 2017:

OMG! This is what they do on United Airlines these days?



I won't fly United Airlines anymore.
------------------
I am back! It is good to be home.

It has been a while since I went on a trip to the USA. I no longer enjoy very long flights and flying to the USA takes a VERY long time. 

Then, there is the time difference which I find harder to adjust to as I grow older. 

Then, there are all those pre-dawn flights which means being at the airport at 3 or 4am which means waking up in the middle of the night. 

Then, there is the returning to Singapore past midnight. Really tiring.

There is always a need to layover in an Asian city and although some would complain about this, I actually enjoy such layovers. 

I always fly American airlines like United, Northwest or Delta to the USA and the layovers are always in Narita, Japan. 

It is the same this time.

A two to three hours layover is just about right. I would have enough time to have a hot meal and do some window shopping in the airport as well. 

On this trip, I had a bowl of hot udon soup on my outbound journey and a very delicious cheese and ham toast on my inbound journey.

Many hungry for a hot meal!

A bowl of hot udon soup for 750 Yen. Think this is expensive? Try ordering the same in the USA!

DOUTOR has more than 900 outlets in Japan! 

Croque Monsieur is a toast with three types of cheese and ham!
Add a bottle of Genmai Cha for 550 Yen. Heavenly!

Ah, makes me feel like going on a holiday to Japan again. The JPY has weakened quite a bit since my last trip in December 2011. Should I? Hmm...

See photos of my December 2011 trip to Japan: here.

LMIR: 3Q 2012 DPU 0.73c.

A reader sent me an email and asked if I would be writing about LMIR's 3Q 2012 results. I admit that I was wondering if I should just skip it this time.

LMIR announced a DPU of 0.73c which is lower than the 0.79c declared in 2Q 2012. This is despite the fact the distributable income improved 37.9%, year on year.

In my blog post on the REIT's 2Q 2012 results, I was optimistic that the REIT's DPU would improve further as its gearing of 9.3% meant that it had plenty of debt headroom for yield accretive purchases. However, the management has squandered the enviable low gearing level as a slew of recent acquisitions were DPU dilutive in nature. Post rights, I estimated a DPU of 0.815c and it does not look like it is going to happen anytime soon.

Unless unitholders were active in acquiring nil-paid rights as they were sold down to 2.1c, I believe we were better off pre-rights compared to post-rights. Pre-rights, we were enjoying quarterly DPU in excess of 1c and unit price was very much the same level as it is now. Those of us who bought into the nil-paid rights cheaply would have made capital gains of between 20+% to 40+% in less than a year, excluding income distributions received in the same period. Those who did not do so are not any better off.

Only time will tell us the quality of a REIT's management and LMIR's has disappointed so far.

See 3Q 2012 financial statements: here.

Related posts:
1. LMIR: 2Q 2012 DPU 0.79c.
2. LMIR: More acquisitions and lesser DPU again.
3. LMIR: More benefits from acquiring 4 malls?

Build a bigger retirement fund with CPF-SA (UPDATED).

Young working adults could use their CPF-SAs to grow their retirement funds, risk free, at a faster clip.  

This is a valid and relatively fuss free approach to long term wealth accumulation.

If you think that the additional 1.5% per annum paid on the CPF-SA does not amount to much, I would encourage you to read a blog post of mine written more than two years ago. 

In the last few paragraphs, I explained how transferring funds from CPF-OA to CPF-SA could significantly boost returns.

See: 
Do you want to be richer?





The additional 1% interest paid annually on the combined first $60K in our CPF accounts is another strong incentive for us to use our CPF accounts to grow our retirement funds.

If you are interested to know more, go to the comments section of the blog post:

Want to be wealthier without higher risk?

For risk free, long term savings with significantly higher returns, the best option for average Singaporeans is still the CPF-SA.






Other related posts:
1. SRS, CPF-OA and CPF-SA.
2. SRS: A brief analysis.

Protect your iPad mini.

Thinking of protecting your iPad mini from knocks and don't want to spend too much money at the same time? How does US$3.81 sound to you?

Yes, for only US$3.81, you will get a TPU shell for the iPad mini! Free shipping!

It comes in various colors too!

 

Shop online at:

 and search under New Arrivals.

You can't miss it!

Related post:
Save money with low prices and free shipping globally!

Category A COE hits record $77,201!

The premium in Category A, for cars below 1,600cc, surged $6,200 in the lastest bidding exercise, surpassing the previous high of $73,501 set in early August.

Easy financing is contributing to continuing demand. "Demand is still there, even as the economy slows down, and it is being propped up by cheap loans. So, as long as the monthly repayment is within the buyer's budget, he will get that new car."

(Source: The Business Times, 8 Nov 12.)

My reaction to this bit of news? This is totally mind-boggling!

Boggled at #1:
$77,201 for a certificate to own a car and a small one too.

Boggled at #2:
If monthly repayment is within budget, buy the car!

There are many rich people in Singapore. Bloomberg reported that there are 17 millionaire households out of every 100 households in Singapore in June 2012! Exact figure: 188,000 households.

I guess if buyers are able to afford a car at such astronomical prices using their own savings and if they really need the car, it is ok. If they don't need a car, why buy one?

However, if buyers are only able to afford a car because of the cheap loans available (which suggests that they have insufficient savings), it is not ok. This is especially so if they don't need a car.

Just off the top of my head, buying a $120k 1.5 litre Japanese car today and, to lose as little money per year to depreciation as possible, driving it for 10 years could see the buyer taking back only $7k at the end of the period. That is a loss of $11.3k per year or $942 per month!

In the above scenario, if the buyer draws a monthly salary of $4k, almost 25% of his monthly earned income is gone with the wind! If he really needs a car, it would be more prudent to look for a pre-owned car with a monthly depreciation of $400 or so. This would be a less destructive 10% of his monthly earned income.

People usually look at the running cost of car ownership: petrol, parking, road tax, insurance, ERP, maintenance and repairs. They sometimes forget depreciation which is a bigger than ever consideration in today's environment given the high price of the COE.

Any person thinking of buying a car in Singapore now, please think and think again.

Related posts:
1. Quick, buy a new car cheaper now!
2. A new car for $75,000?
3. Bought a new car!
4. The price of my car now.

President Obama wins! What next?

President Obama has been re-elected! Seems that Mr. Ben Benanke's job is safe. More quantitative easing, a weaker US$ and stronger inflationary pressure? Seems like it.

People are concerned about the "fiscal cliff". Could it turn out to be a non-event? Could the Democrats and Republicans reach a compromise?

What is the "fiscal cliff" all about and why should we be concerned?

If the current laws slated for 2013 go into effect, the impact on the economy could be dramatic. While the combination of higher taxes and spending cuts would reduce the deficit by an estimated $560 billion... the policies set to go into effect would cut gross domestic product (GDP) by four percentage points in 2013, sending the economy into a recession.

See full write up at: The fiscal cliff explained.

President Barack Obama won re-election in a tight campaign, besting Republican presidential nominee Mitt Romney in enough swing states to secure four more years in office.

The specter of gridlock would undoubtedly loom before Obama as he confronts an immediate task in addressing the series of automatic tax hikes and spending cuts – the so-called “fiscal cliff” – set to spring into place at the end of this year. As Obama won a second term, House Speaker John Boehner, R-Ohio, said Republicans’ retention of their House majority meant “the American people have also made clear that there is NO mandate for raising tax rates.”

Read full story at: NBC News!

The story does not end with President Obama's re-election, for sure. Another chapter is about to begin.

Want to be wealthier without higher risk?

More than a year ago, I wrote about a conversation I had with someone who was worried about the effects of inflation on his personal wealth. By chance, I met him over the weekend and we spoke briefly. He lamented that he did not listen to me as he could not come to terms with the idea that to protect his wealth, he had to take risk.

This reminds me of a saying in Hokkien I heard recently:
Afraid that grasping too loosely might let the bird fly away and that grasping too tightly might kill the bird.

So, fearing the wealth destructive effects of higher inflation, he wants higher returns from investments that have higher risk but the problem is that he cannot accept the higher risk!

If not for the fact that he looked so serious and troubled, I would have made a joke out of it.

This person is very careful with his money. Perhaps, too careful. Well, he has a family to care for and with young kids, I suppose he is right to fear risk. If there should be an investment that would offer him high returns with near zero risk, I am sure he would have jumped on it, but is there such a thing?

Anyway, I did not know what to say to make him feel better and after making some small talk, I bid him farewell. Would you know what to say to make someone feel better in such a situation?

Some people are just ill disposed to risk taking. Live and let live, I guess.

The paradox is that he is actually already taking risk by leaving his money in his bank account in the current low interest rate, high inflation environment and he is definitely not growing any wealthier.

Related post:
To protect our wealth, we have to take risk.

Music and movie!

 

 

I am Your Superstar -

Win a 2NE1 Limited Edition Autographed CD

with Nikon CoolPix S01!

Find out how at: NikonClub!

 

It is movie time!

 

Do you have a pet? Everyone who has a pet would know how heartbreaking it is when your pet leaves you.

For Victor Frankenstein he doesn't want to lose his beloved pet dog Sparky. He brings Sparky back to life only to face unintended and monstrous consequences.

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Sound Global: Smart money is buying.

On 17 Oct, I mentioned a downside target of 48c for Sound Global's share price. This might or might not materialise. Personally, I am not averse to buying a few bids higher if the technicals tell me that it could be a good idea.

As Sound Global's share price declined, volume has also declined. This picture of a low volume pull back suggests that the selling is weak. Indeed, looking at the MACD, we see a higher low possibly forming. Looking at Chaikin Money Flow, we see how money flow has turned positive even as its share price weakened lately.

Immediate resistance is at 51c while immediate support is at 49.5c.

This is another stock I am accumulating on weakness.

Water treatment investments are set to double in the 12th Five Year Plan Period (2011-2015) to CNY430b in an effort to improve China’s wastewater treatment rate to 85% by 2015, from 77% currently. Commercialisation and privatisation of the Chinese water treatment market is also a long-term trend. With over 20 years of experience, Sound Global has become one of the leading one-stop integrated wastewater treatment solution providers in China, with a respectable market share.

 

In our view, Sound Global’s revenue will be supported by: 1) continuous order wins thanks to a long-term relationship with the government, and 2) more BOT projects entering their collection period. A hike in water tariffs in China will also have positive effect on revenue.

 

Although we are positive on Sound Global’s revenue outlook, its high net margin of the past few years would be very hard to maintain, in our view. Recent high-cost borrowing will weigh on the company’s net margin for the next few years, assuming it does not redeem the senior notes before maturity.

 

Sound Global is trading at a large discount to its peers (6.7x FY12PE based on consensus vs average of 12.8x for HK-listed peers and Hyflux’s 16.7x). We currently do not have a rating and target price on Sound Global. However, we think the deep discount may not be justified given Sound Global’s comparable net margin and higher-than-peers ROE. Sound Global is worth considering if investors are looking for cheaper alternatives.
 

(Maybank Kim Eng, 8 Oct 12)

Related post:
Sound Global: Accumulate on weakness.

CapitaMalls Asia: Any correction is a buying opportunity.

CapitaMalls Asia's share price is enjoying a strong follow through after breaking resistance. Further increase in share price is likely to meet stronger resistance at $1.93, the 138.2% Fibo line. Overcoming this resistance level would see the next two golden ratios at $2.00 and $2.07 providing resistance.

It remains to be seen if $1.84 is resistance turned support. Stronger support is at $1.705 as that was a many times tested resistance that finally gave way after a period of seven months. Bears would have to be out in full force and more in order to push the share price below $1.705 as the bulls who missed the boat earlier would likely try to get on the boat at this very price, give or take a couple of bids.

All the daily MAs are rising and the picture has turned nicely bullish. Any correction to test supports would be a buying opportunity.

We reckon there may be opportunities for CMA to monetize some assets in 2013, such as Queensbay Mall and its 50% stake in ION Orchard. With continued strong underlying performance from the malls, we maintain our BUY recommendation. Target price is raised to SGD2.25. (Maybank Kim Eng, 29 Oct 12)

Related post:
CapitaMalls Asia: Broke resistance.

China Minzhong: Accumulate on weakness.

There are a few stocks which I would like to accumulate on weakness in the near term. China Minzhong is one such stock.

Many like Jim Rogers have put forth a convincing case of an impending food crisis. In the event of global food shortages, it is logical to expect food prices to rise. So, investing in food producers seems to make good sense.

Improving numbers, insider buying, an experienced management and the right industry, I believe China Minzhong is a good company to invest in. Also, there could be more positive catalysts and these could push its share price higher.

After hitting a low of 53c in early June, its share price rose to hit a high of 87.5c on 19 Oct. That is a meteoric 65% increase in a short span of 4 months.

The daily chart is showing some fatigue. Some consolidation is to be expected. The immediate support is at 78c. If that should go, next supports are at 74c and 70c. The MACD which is a pure price oscillator suggests that supports could continue to be tested. However, the Chaikin Money Flow does not show any significant outflow of funds which suggests that long holders are not in any hurry to sell. We could see share price doing what Daryl Guppy calls a correction using time which means people waiting on the side hoping to get back in when there is a price correction could be disappointed.

The weekly chart shows quite clearly that the downtrend has reversed. Breaking immediate support could see share price declining to test the 20w MA in the longer term. This currently approximates 71c. As the 20w MA is rising, the longer term support would be a higher value over time. The declining 100w MA, currently at $1.10, could cap any further price increase in the near future.

Buying when there is a test of supports with longer term MAs rising seems like a good idea. However, remember, TA shows where the supports and resistance are but it does not mean that they will be tested.

Related post:
China Minzhong: Opportunity in slowing momentum.

“If food inflation in China remains high, there is a high chance that the management’s revenue target (of 15% growth) could be surpassed.” Maybank-KE keeps a Buy call with $1.16 target. Read full article in The EDGE.

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