Saturday, 30 April 2011

TA Breadtalk

ADX: Downtrend
William%: Oversold
OBV: increasing
MCAD seems going up
Fibo Retracement: 0.60 support
EMA(200) found at 0.62

It seems like the downtrend is quite oversold. Based on TA, A good buy will be at 0.62, a better buy at 0.60.

However, based on my previous post, fundamentally I will not buy at 0.60.

(Disclaimer: The above is based on my personal opinion to record my thoughts and thinkings.)

Just for fun since election is coming

Breadtalk Quantitative Summary


Consistent growth revenue margin of >50% 
Net Income around 3-5% in the recent years
Selling, general and adminstrative is high, it will be good if the company can improve on this aspect and thus indirectly improve its net income

ROE is generally consistent although it become lower in recent years
ROA a bit low at around 5%
Retained earning is consistently improving over the years
The company produce postive net cash flow operation, postive FCF. The company is consistently putting money into CAPEX and little on dividend. Personally I think this is desirable.

Financial Health:
Gearing: around 4% consistently
debt to equity: quite low 0.12
current ratio: 0.9 although not greater than 1 but the company should be able to finance the debt in times of trouble. 
The company also has no problem in paying off its debt in less than 1 year if it uses all of its net income. 
Overall debt is low and manageable.

Trailing PE: 15.8
Earning Yield: 6.33%
Cash Return: 8.34%
If use discount rate of 10.5% with 35% marign of safety, it seems like the company is a bit expensive. However, this DCF method is very subjective and hence might not be reliable in my opinion. In term of valuation, I would prefer the 3 ratios above, DCF only serve as a reference.

Good FCF, low debt, good gross revenue margin.
It would be good buy if it can increase its net income margin to at least 10% and reduce its SGA which is unlikely as breadtalk is still expanding its outlets. 
Based on valuation, it is not expensive and yet not cheap. Given the current market condition, I might buy on dip but not at the current price of 0.63. 

Healthway Quantitative Summary

Friday, 29 April 2011

CIT 2011 Q1

The results doesn't look good at all.

Some numbers:

Annualised DPU of 4.06c  - 7.96% at 0.51c closing price.

Gearing is 33.3%

The announcement in this link below is even more interesting.$file/110428SGXCITGrossRentalClarification.pdf?openelement

I think its time to move on.

Wednesday, 27 April 2011

82 of 87 seats contested in Singapore GE

SINGAPORE: The ruling PAP in Singapore was not returned to government on Nomination Day on Wednesday.

It is facing contest in all the 12 single-member constituencies (SMCs) and 14 of the 15 Group Representation Constituencies (GRCs).

There will be a three-cornered fight in Punggol East single-member constituency (SMC), straight fights in all other constituencies except Tanjong Pagar Group Representation Constituency (GRC).

The three-way fight at Punggol East SMC is between PAP's candidate Mr Michael Palmer, the Workers' Party's Lee Li Lian and the Singapore Democratic Alliance's Secretary General Desmond Lim.

In Aljunied GRC, the Workers' Party is fielding party leaders Low Thia Khiang and Sylvia Lim, and members Chen Show Mao, Muhamad Faisal and Pritam Singh. Their opponents are PAP's George Yeo, Lim Hwee Hua, Zainul Abidin Rasheed, Cynthia Phua and Ong Ye Kung.

GRC contest - Ang Mo Kio (PAP vs RP), Aljunied (PAP vs WP), Bishan-Toa Payoh (PAP vs SPP), Chua Chu Kang (PAP vs NSP), East Coast (PAP vs WP), Holland-Bukit Timah (PAP vs SDP), Jurong (PAP vs NSP), Marine Parade (PAP vs NSP), Moulmein-Kallang (PAP vs WP), Nee Soon (PAP vs WP), Pasir Ris-Punggol (PAP vs SDA), Sembawang (PAP vs SDP), Tampines (PAP vs NSP), West Coast (PAP vs RP).

SMCs contest - Bukit Panjang (PAP vs SDP), Hong Kah North (PAP vs SPP), Hougang (PAP vs WP), Joo Chiat (PAP vs WP), Mountbatten (PAP vs NSP), Pioneer (PAP vs NSP), Potong Pasir (PAP vs SPP), Punggol East (PAP vs SDA vs WP), Radin Mas (PAP vs NSP), Sengkang West (PAP vs WP), Whampoa (PAP vs NSP), Yuhua (PAP vs SDP).

Candidates fielded by party: PAP (87), NSP (24), WP (23), RP (11), SDP (11), SDA (7), SPP (7).

Polling Day is on May 7.

- CNA/ir


The election is exciting. Will we see black swan or grey swan occuring?

Tuesday, 26 April 2011

Traits of good companies

  1. High consistent earnings. Good margins
  2. Increasing FCF.
  3. Manageable low debt, short and long term.
  4. Good return on shareholder's money
  5. Good management
  6. Increasing retained earnings...
There are much more, I only listed a few. 

    Saturday, 23 April 2011

    P Dorsey, J Mansueto - The Five Rules For Successful Stock Investing

    Economic Moats (consistent for at least 5 years)
    • FCF/Revenue >5%
    • Net Margins >15%
    • ROE >15%
    • ROA >7%

    Growth - instead of just cut cost or one time earning/selling which is not sustainable. Look for sustainable growth
    Profitability - ROE, ROA, FCF
    Financial Health - gearing, debt to equity, quick/current ratio, interest coverage ratio
    Risks/bear - think of negative aspects
    Management assessment - compensation(executive pay is linked to company performances), character, efficient operations

    10 minutes test
    1. Has the company ever make an operating profit?
    2. Does the company consistently generate cash flow from operation?
    3. Is ROE>10% with reasonable leverage?
    4. Is earnings growth consistent?
    5. How clean is the balance sheet? debt?
    6. Does the film generate FCF?
    7. How many "others" are there?
    8. Has the number of outstanding shares increases markedly over the years?
    If the above pass, go into 10 years summary and do a detailed FA. 

      Wednesday, 20 April 2011

      Sold my excess lot!

      CIT 500 excess sold at 0.505 today.

      Commission a lot. End up only earn few bucks.

      Tuesday, 19 April 2011

      Dear Shareholders

      Dear Shareholders,

      It is very nice to have you as our shareholder. Last year when we need extra money for our expansion, we asked 1 for 8 at 0.075 and you lend to us generously. This year, our business will expand even more, but we need more money to expand in China as well as for our working captial.

      Although inflation rate is around 4% to 5% per year, we will still ask you for the same percentage of money similar to last year, 1 for 8 at 0.075. Aren't we nice? Please lend us your money, we assure you that we will raise our profitability as before - 15 millions in 2009 as compared to 2.5 millions in 2010.

      Do not worry. Our biggest shareholder will definitely accept all the rights. Thus you can be bold and lend us your money for our expansion, sooner or later our company will grow bigger, just like what we had promised you last year. We will keep our promise to raise our profitability to original level. We promise!

      Monday, 18 April 2011

      Brent Oil

      Brent Oil is 12% below the peak of close yet so far.

      Book Review - Alexandra Elder - Triple Screen Trading System

      Screen One:
      Identify the weekly trend using a trend-following indicator and trade only in this direction
      Screen Two:
      Apply an oscillator to a daily chart. Use daily declines during weekly uptrends to find buying opportunities and daily rallies during weekly downtrends to find shorting opportunities.
      Screen Three:
      Use the trailing buy-stop technique when the weekly trend is up and the daily oscillator is down. Use the trailing sell-stop technique when the weekly trend is down and the daily oscillator is up. 

      Using your weekly chart to identify an uptrend, wait for daily stochastic lines to cross below their lower reference line before buying. Immediately place your buy order above the high of the latest price bar. You can then protect your position with a protective stop placed below the low of the trade day or the low of the previous day, whichever is lower.

      Saturday, 16 April 2011

      Golden Rule of Investing

      If you don't understand, don't buy or invest.

      Updated to:

      If you tried and still do not understand, be careful when you decide to buy or invest.

      Some thoughts

      Sometimes many people wonder what is the secret of becoming decently rich?

      Get multibaggers from stock markets?
      Invest in properties?
      Win toto?
      Start up a business?
      Earn more, live below your mean and invest?
      Climb corporate ladder, be director of some company?

      Actually, there are many many ways.

      When you walk on the street, think hard.

      Think of a way which you can earn just a small $1 consistently from everyone which you seen on the street. Isn't this the way which many of the successful person succeed?

      All the above cannot be achieved easily but as long as there is a will, there will be a hope.

      Friday, 15 April 2011

      CIT excess

      i got 1375. How about you?

      Now I got odd lot of 500.

      Thursday, 14 April 2011

      Sharing - CANSLIM by William O'Neil

      My Typical Expenses per week on food and transport.

      Monday to Friday: Breakfast
      • Loaf bread ($2) bought over weekend or biscuit ($2) or $1 zhu chang fen or don't eat. So average <$1 per day. Overestimate. $5.
      • Lunch ($2 to $3) - Average $2.50 per day. Per week $12.50
      • Dinner (eat at home) - parent sponsor or instant noodle with egg and some vege. But I got give them monthly allowance.
      • Transport to work. $1.70 per journey. Total $3.40 per day.  $17 per week
      Sat and Sun
      • More luxurious. Go NTUC bought food to cook over weekend, typically $25 per visit.Sometime less or more.
      Total Spending - $5 + $12.50 + $17 + $25 = $59.50

      Per month = $59.50 * 4 = $238.

      I seem like no life and quite high my spending per month , anyway to reduce further?

      (Disclaimer: The above exclude ad-hoc expenses like meeting friends or go out which occur quite rarely for me given that everyone is so busy nowaday.)

      Wednesday, 13 April 2011

      Rationality in Investing

      Many investors include me have read lots of books on TA, FA, value etc and came out with certain trading/investing rules for ourselves.

      These are my rules. I update them once I learn new things.

      Your rules may be working for you, but if you never follow it, what is the use?

      However, it is easiler say than done. When YOUR hardearned money is involved, it is quite tough to stay rational and invest according to your rule. Most of the time, people end up buy high sell low instead of buy low sell high.

      One way to make sure that you execute your rule RATIONALLY regardless of market condition is writing down your rule and keep reading them before you make any action on the market and make sure that you follow them.

      It is tough but it is important and I think there are many veterans in LP's cbox that had done it very well and get good returns from the market. Let us learn from them :)

      CIT rights 2.51 time oversubscribed!

      Cambridge Industrial Trust Management Limited, as manager of Cambridge Industrial Trust,
      wishes to announce that valid acceptances of Rights Entitlements and applications for Excess
      Rights Units in respect of an aggregate of 331,823,944 Rights Units were received as at 6 April
      2011, being the Closing Date.
      Based on the total number of 132,133,152 Rights Units available for subscription and taking into
      account the valid acceptances of Rights Entitlements and applications for Excess Rights Units, the
      Rights Issue was approximately 2.51 times subscribed.
      The valid acceptances of Rights Entitlements received include the acceptances by the Manager
      and Antares nabInvest Trust of their pro rata entitlements of 1,025,789 and 1,755,000 Rights
      Units respectively pursuant to the Irrevocable Undertakings, representing approximately 2.1% of
      the total number of Rights Units available under the Rights Issue.
      Details of the valid acceptances of Rights Entitlements and applications for Excess Rights Units
      received are as follows:
      Number of Rights Units Percentage of Rights Units
      Acceptances of Rights Entitlements 126,166,586 95.5%
      Applications for Excess Rights Units 205,657,358 155.6%
      Total 331,823,944 251.1%$file/Resultsofrightsissue.pdf?openelement

      wonder how many excess rights I was allocated...

      Tuesday, 12 April 2011

      My attempt at CMA

      Uptrend seems strong from %william R.
      MCAD crossover to uptrend
      EMAC(20) closing upwards towards EMAC(50), might break EMAC(200) soon

      Immediate support:1.84
      Immediate resistance:1.95

      Monday, 11 April 2011


      When the share price goes up, it means that there are more buyers than sellers?
      When the share price goes down, it means that there are more sellers than buyers?

      The two statements above sound logical correct.

      But it is not necessary true.

      There are always an equal number of buyers and sellers. The number of stocks bought and sell in market is alway equal. If not, who buy the xx lots which you had just sold? And don't forgot, the person bought at the price which you sold.

      "When the trend is up, bulls feel optismistic and do not mind paying a little extra. They buy high because they expect prices to rise even higher. Bears feel tense in an uptrend, and they agree to sell only at a higher price. When greedy and optimistic bulls meet fearful and defensive bears, the market rallies. The stronger their feelings, the sharper the rally. The rally ends only when many bulls lose their enthusiasm." Alexander Elder

      Saturday, 9 April 2011

      When to sell?

      Investing, Trading and emotion

      It is easy to say that buy during recession and sell when things are over optimistic. But it is impossible to time the market. 
      In addition, you can buy during recession provided you got cash and got balls. 
      You can sell when your counters are making profits provided you can overcome your human greed nature and will not complain if the counters going up even futher. 

      Of course, can also use TA and FA to determine buy or sell if you are confident that your TA and FA are far more superior than the billion people in the market.

      Emotion in trading or investing is very important.

      (Almost fallen asleep today when reading the Trading for a Living but did not fall asleep when I try to read P Dorsey, J Mansueto - The Five Rules For Successful Stock Investing. Maybe I am really a FA instead of a TA person? But rationally, I think it be good to know both right?)

      Means to increase capital

      Currently my saving to gross bring home pay margin per month is around 55%. This mean that I spend little and save a lot. However, my income is not high, thus no matter how high I increase this margin, the absolute savings is quite little according to my expectation.

      To increase captial, I am thinking to enhance my income through taking more jobs and finding a higher paying job.

      Perhaps I could take up tuition again which I stopped since undergrad year? But this means that I will have less time for my love one as well as time for me to read more books to enhance my knowledge. Is it worth it?

      I could also get a master degree to enhance my market value but this means that I need to spend part of my saving for this purpose. Is a master degree really usefull in today's market? I heard that the ROI from spending time, effort and money for a master degree is not useful sometimes.

      Reflection of my Journey

      Sometimes I just wonder whether I should give up out this journey of freedom. There are so many good investors around like MW, CW, AK, LP, momo etc....and I am so far from them both in term of captial as well as knowledge.  Sometime really wonder, is their level really attainable given my lousy annual pay as well as many room for improvements financial literacy?

      There are many ocassions which I wanted to give up but I did not give up. I could sell all shares I got and give up investing then just depend on earn income be those typical 月光族.

      However, giving up mean you surrender before the enemy comes and finish you off, sign of coward and lousiness.

      I am in education line and I told my students not to give up. If I give up, it means I never did what I peach. I must push on and never give up despite whatever doubts and difficulty I have. Jia you! GOOD LUCK to OT83!

      Friday, 8 April 2011

      Alexandra Elder - Trading for a Living

      I just started reading the first few pages of this book.

      This post is to record my learnings. In the past, I record my learnings in excel or words. Since i got a blog now, let me try recording here to see if it is better.

      According to the book,  there are 3 important things for trading:
      1. Trading Psychology
      2. Trading System
      3. Money Management
      Another knowledge gain: never spend more than 2% of your captial in a single trade.
        What exactly are they? How do I achieve it? I don't know for now. But I know that after reading finish, i must practise it then it will be useful.

        Theory without practical is useless.

        Thursday, 7 April 2011

        will you buy? Mapletree commercial IPO

        Got $700 chicken leg from government

        What about you? Why do I say chicken leg? think about it yourself.

        Wednesday, 6 April 2011

        Buy, hold, average down and invest for long term when price is down???

        One will alway hear other people say: When you buy a stock at $X and if the price drop below $X, you can think of it long term and hold it till it rise back again. Or even better, you could average it down by buying more stocks of the same company such that your price per unit is lower and could earn back potentially more that what you earn.

        The statement above I think is only true to a certain extent. I had been through it and understand what it really mean. For now, I would say it is not "buy, hold, average down and invest for long term." I would say that it is "buy, hold and pray".

        However, basically this is what I am doing now, "buy, hold and pray." I had brought Healthway Medical Group on four occasion.

        When I bought the healthway, I was naive (although wasn't much better now), I did not even understand how to read earnings, PE ratio of financial statements. I was blindly chasing the hype by Peter Lim. My average price now is around 0.164 whereas the current share price is 0.135.

        Fundamentally, after analyse the financial statement of healthway group now, basically it earn around 10m less and has 10m less net income in 2010 as compared to 2009. This is due to high staff cost to retain the staffs and lower revenue. In addition, the PE ratio is around 96 and cash flow is not very good too. Furthermore it want to issue right at 1 for 8 at 0.075 to ask more money from investors.

        Although I do not need the money stuck in Healthway now, but I am still thinking if I am going to sell it. Basically what I am doing is "buy, hold and pray" and believe that the management said "The Group is determined to restore profitability to previous levels." is true. It may really become true but it may also crash further...who knows? The stock market is unpredictable.

        My cut loss skill is still quite clouded by emotions. I need to improve this aspect.  Meanwhile, I think I need to slowly decide as this cut will almost wipeout half of my realised gain so far although it become much lesser if I realised more gain from my current holdings. Hopefully I can decide before Healthway's AGM at end of april.

        Nevertheless, through my experience I had learnt something:

        "Buy, hold, average down and wait for the price to come back is only true for fundamentally strong stock." Example, I will be more than willing to average down stock like Singtel.

        If not, it will become "buy, hold and pray."

        This is an expensive lesson, investors who advocate "buy, hold, average down and invest for long term" please do not make the same mistake as me such that it become "buy, hold and pray".

        Financial Freedom vs Life

        Life is not only about money, financial freedom. What exactly is life about? It has different definition for everyone.

        Although financial freedom is good, but one should never neglect your closed one, especially your love one during the process.

        Living below the means + saving + investing -> old traditional way of getting rich is effective. However, when you need to spend, please do spend. Like going for holidays or eat at some restaurant with your love ones etc.

        We are only young once, even though you may become very rich through the above process when you are maybe 40+ or 50+, but what if that time you or your love one are sick, cannot move or something or worst, your love one are gone? Will you regret that you never spend more time, or treasure your time more with them when you we were young? Will you regret spending your time to learn more about investing, try out investing, do FA, do TA etc instead of spending time with them?

        I do not know about your answer. But I will.

        It is important, although hard to strive a balance, but must try! Good luck to me and you!

        Tuesday, 5 April 2011

        CWT Financial Health

        Does the financial health of CWT looks good? Worth to buy?

        PE ratio based on 1.35 today is = 4.48. Cheap? But can the sudden increase in revenue sustain?

        Updated new sheet

        Monday, 4 April 2011

        My blog is ugly

        Anyone got any suggestion how to make it look nicer?

        Thanks in advance!

        Horse, Cow and Pig

        What a genius way of explaining work life?

        I guess I was a cow till last year, but yet the farmer refuse to feed the cow with decent grass.

        This year, I became a pig. 

        But I wish to be a horse, therefore I wish to change my farm.

        Hopefully I can get a new and better farm soon.

        Wish me success.

        Friday, 1 April 2011

        Thanks LP for the advice

        I didn't know rights got such knowledge in it.
        1. Make sure you got the minimal odd lot
        2. Apply the maximum possible number of lots before XR. If you got 20 lots initially, apply 20 lots extra. 
        Thanks LP


        First time doing my blog.

        Why is there blank between the post? is it due to adsense?

        Reits Rule

        1. Good current price discount to NAV
        2. Low Gearing with good cash flow
        3. High Yield - 8% and above
        4. Consistent dividend with minimal right issues even at recession
        5. Strong sponsor

        My investment strategies - from books and practical experience

        3 key rules
        1. Contrarian Approach - Buy at point of extreme pessimism (Market Bottom), sell at point of extreme optimism(Market Top). Buy on fear, sell on greed. Buy low, sell high. Detect from PE ratio, market sentiments, news, articles, newspapers, people's conversation on street etc
        2. Fundamental and Value Analysis - ONLY buy fundamentally strong stocks(blue chip, reits or others) with long term durable competitive advantage + good balance sheets at discount price and/or with at least decent 6% CONSISTENT dividend even during recession
        3. Technical Analysis - Determine a good entry point depending on market direction (up, down or sideways)

        *Emotion management is important
        *You can never sell at the exact top or buy at the exact bottom - always buy and sell in stages
        *Be patient. Never chase a stock. If you cannot get your price, walk away and wait again.

        Money Management
        50 % cash: 50% stock: Never put entire networth in market. Always make sure that you got spare investment cash to buy when good opportunity arrive
        Diversification into many stocks but not over diversify - look at whole portfolio instead of single stock for performance

        When to sell? (else let winners run)
        want to put money in pocket
        make mistake to buy it in the first place
        need money to make an investment on an even better company at better price
        when the company seems like it is losing its durable competitive advantage or fundamental deteriorated
        during bull market where they is frantic buying such that the current selling price of the company far exceed the economic realities of the company, PE ratio too high

        Hi guys

        This is my new blog. First time doing a blog. I am sort of new to investment.

        I started with unit trusts in 2009 March, bought ILP and stuffs from some financial advisers. That time I had no idea of unit trusts, ILP, stocks etc...

        However, I go for a change. I want to have share in my own financial planning.

        I bought my first stock in Oct 2009. Until now, got stocks and reits. I am mainly a bargain hunter..thats why...oppose the trend