Updates on my Investments 101010

A friend of mine just commented that I have not written on my blogs for a very long time. Yes, I have been lazy. To cover myself a little, I have also been super busy with my new work regime over the last 10 months. In any case, I was not in the mood of working for the last couple of weeks and monitored the market and have been the following investments.

Stocks. As I need to raise some money for my renovation of my new home, I sold my profiting First Reit. It has been one of the best investments which I purchased, giving me on the average 8% yield each year. After the renovations, i monitored the market for good buys. I queued for a few stocks, namely Raffles Education, Pacific Shipping, Starhub, China Aviation, Suntec Reit and my beloved First Reit. For the record, my 1st priority is still to grow high yield stocks. Pacific Shipping, Suntec Reit and Fiest Reit are in that category. Starhub is one of the big chip which offers high yield, about 6-7%. As for Raffles Edu and China Aviation, I felt that both are in the growth industries. I had both these stocks some time ago and felt that both companies should be able to grow. In any case, I have gotten Suntec Reit and Pacific Shipping. First Reit has grown out of my reach. Both Suntec Reit and PacShipping are either breakeven or just slightly up by couple of %. I am now about 85% heavy on Reits and Shipping trusts. Think I have readjust a bit. I am too heavy on First Lease Shipping trust, about 25%. Will reduce my exposure when the price is right. If possible, will reduce to about 15%.

Unit trusts. My existing funds crashed >50% a couple years back and has not recovered. My China fund was the worse hit. Till now, I am still down by 40%. The other funds, ie Legg Mason SEA and AIA Acorns of Asia, are both still down by about 7-8%. I have read a no. of articles about yield or income funds. After doing a bit of research on Fundsupermart, I went in and purchase some Pru Mthly Income Plan Cl A. It seems to have a good record and I am thinking of transferring my Cash Fund money to this fund. I have also purchased LionGlobal Thailand and Schroder AS Gold&Metals A Acc SGD. I made small investments each for these 2 funds due to the good reviews and the fantastic run ups over the last few months. As expected, over the last 2 weeks, both these 2 funds have increased by 4+% each. Right now, I am considering to have some regular investments into a fund, ie putting a fix amount of money into a fund every month. Right now, my heart is to Schroder AS Gold&Metals A Acc SGD, as gold is much more stable than any other sectors or industries.

With my recent purchase of the high yield stocks, I have yet to achieve $1000 in yield every 3 months. My aim is to have $1000 in yield every month. This means that I have to put in about 300% of my existing capital into the stock market to achieve that aim.

My Buys and Sells for Last Half Year

I have not written in this blog for 9 full months and am pretty ashamed of it. The last 9 months was bad for my investments as the markets tanked. During this period of time, my main investments were:

1) Stocks.
A) Buying of warrants which I failed miserably. I started buying warrants using swing momentum and was gaining a bit, but when the markets start to get irrational, my winnings was wiped out in a blink of the eye and got into more losses. My weakness is that I often do not get out of a losing trade. Mainly trading in HSI warrants under Macquarie.
B) The other investments I have made, which I have gathered and will accumulate, are the high yield stocks. Mainly the reits or shipping trusts. Presently, I have First Reits, Lippo Maple Infrastructure Reits, Cambridge Industrial and First Shipping Lease Trust. My priority is to get the highest yielding stock. Currently, these stocks are giving at least 8%pa dividends. My aim is to accumulate enough to get some passive income from these stocks. Target is $10k/yr from dividends by 2015(7-8yrs).

2) Funds
The funds did badly over the whole period. I made the mistake of putting money into a China fund and it is now <70%.>30%. I have also supported a friend, who has just joined the insurance field by buying a couple of funds. I have not monitored the funds but I know it is losing money.

3) Lastly, over the last few months, I chanced upon an investment which is a bit controversial. It's basically a high yield deposit. As the "bank" does not have the reputation to guarantee the amount, it puts down a collateral to the depositor. I have tried with small amounts over the last few months and have received the interest and gotten back the principal.

I have a few stocks under my radar and is itching to buy but i am very tight in cash. Moreover, I heard that the market has a good possibility of going down again. Thus, I am staying put. When I have the money, I will put most of it in my yield stocks first before considering the others.

Selling Centillion

It has been more than 2 months since i posted any blogs. Within this short period of 2 months, a much anticipated correction has occurred. Even before the correction, I was closely monitoring Centillion and i was very disappointed when it issue the new option shares to Equation and Oei Hong Leong. Each subscribed for 948,742,172 shares at $0.008485.

I wondered what was the management thinking. To raise funds, why would they give such a steep discount to these 2 investors? The price was at about $0.20. If any of these 2 investors were to dump their shares even at a discount of 50% of the $0.20 price, they would still have made >1000% of their investment in this deal. It seems too shady to me.

So when the price was slowly falling with weak supports and volumes, I cut my losses at $0.175 about one month after i bought the shares. I was relieve to see that the shares did indeed plunge to $0.10 within the next month(Aug 07).

Centillion the Waste Recycling Turnaround (B)

I vested in this company Citiraya for quite a while before the CIPB came knocking on their doors. It was a darling stock at that time. After the dust settle, the new management changed the name to Centillion and revamped the structure. It is now slowly coming back.

Ever since it was "re listed" in Oct06, it was mostly hovering at $0.15, once going down to $0.11. From early Jun 07, it raised to a high of $0.22. To me, the business model is a sound one and most importantly, a profitable one. Basically, Centillion clears waste from PCB and IT manufacturers. From the PCB boards, they retrieve the gold treads and sells the gold.

Anyway, I believe this is a good company with a new management. Moreover, Temasek and Oei Hong Leong also vested in this company. Thus, when Centillion slowly drops to $0.195, I see that as a resistance and bought 10 lots. Till now, it has been hovering at $0.195-0.21. I see the potential of this stock to go to $0.3 in a couple of months time. My stop loss is $0.16(~20%). So lets see how it goes. I will be back to close this when I finally sells this stock.

My Jasper Investment Trade

I started looking at Jasper Investment when it remained in the top volume for many days. Though it hovered around $0.025-0.035 for quite some time, the volume transacted each day was still significant.

Fundamentally, I must admit i did not do a lot of research but I do know that its earning has increased and the company's plans is blossoming.

There is not much TA to be done as the price is quite stagnant. Thus, when the price dropped to $0.025, I bought 50lots. I intend this purchase to be a short one as I hope and believe it will behave like what it has been behaving for the last 1-2weeks. My target is just $0.03 and my stop loss is $0.02.

I was rather disappointed as even thought the price is at $0.03 some of the days, the sell queue was too hugh and I never got the the start of the queue for each time. But to my relieve, my sell trade was transacted, making me a small profit of $190+. Though this is a small amount, it is a 15% return for 2 weeks of waiting. I have traded a small amount for this stock as I have not gained enough knowledge about this company and was only basing on the volume and the small trading band.

Overall, though I have made a good choice in trading this stock, I will not be doing such trades much as I believe in trading in good quality companies.

Schroder's BRIC fund

Schroder's BRIC is all about emerging markets. BRIC stands for Brazil, Russia, India and China. All 4 markets are considered at a very fast pace and the potential is great.

I bought BRIC a little while after its inception early last year. To be more exact, I bought it in late Apr 06. It is now a little more than one year and with its present return of 21%, I am more than satisfied. It's a pity that this investment was not with my money. Anyway, I have sold all my BRIC units.

I again bought BRIC using my CPF in late Jan 07. My rational then was to get as much returns as possible in a very short term (2-3 months), hopefully before the expected correction. Unfortunately, the correction came before I could realised the profits. When the correction came, my returns was about 4% and after the correction, it was minus 10%. The fund basically lost about 14% within that 1-2weeks. Luckily, it quickly rebounded within the last 2 months. Though it has yet to reach its peak(before the correction), it has given me 3+% within the last 3+ months. Though it might not look much, for one, if you compare to the CPF interest, 3+% is definitely better than 2.5%. Furthermore, this 3+% was achieved within 3+ months. Annualised it and you will get 10+% pa.

For now, I am clearing all China related funds, as i still strongly believe China will trigger the coming correction.

I am thinking of exiting from my Henderson Asia Pacific Property fund, but as it gave dividends on the 15 Nov 06, I am thinking of holding on for a few more days to see if they give another round of dividends on 15 May 07.

My Recent Sells in my Funds

I was disappointed at the mild correction in late Feb 07. STI only dropped about 10% and then rebounded back to its original level in within a month. That is too fast and now, the index is going to record highs every week. I view this as negative as the faster you climb, the harder you will fall. Coupled by the overly overheated China market, I believe Spore market will be experiencing another correction soon. There are a lot of reports that the China market is already over valued. It's PE is now >40 times and by comparison, Spore's market has a PE of only about 16. Note: PE is price over earnings and it is a measure of how fast a company can recover its capital. For me, the number should be as small as possible. In China, uncles, aunties and even monks have poured that hard earned money into the stock market, without knowing the fundamentals of what the companythey have bought into are doing. When the big institutions(also called Big Boys) feel that they cannot sustain such risks anymore, they will pull out of the market and a sell panic will occur. As such, I believe the China market will initiate the next correct in Asia. Though i believe a correction is coming, I do not forsee a drastic correction as the Chinese government will take all measures to prevent a collapse of its economy before the Olympics next year.

As such, I have exited my pure China funds. I have sold my DWS China fund as it has acheived 5% returns in the last 2.5months. I feel that is sufficient. In addition, I have also exited my Shenton Greater China fund. For this 5.5 year-old fund, it has given me an average of 19%pa return, which I deemed terrific. My target for funds is 7-10%pa returns.

My last recent exit was the free Shenton Income fund. This exit has nothing to do with the expected correction. I exited as this fund is only <$30. Though I have exited this fund, I viewed this fund as a good fund for stable income and will definitely add to this fund when I have more money for investments.

I will be monitoring the market for next couple of weeks to determine when to sell my BRIC fund. Unless something more drastic happens, I don't think I will be selling off my property funds and the global equity fund.

Funds Holdings

I bought my 1st fund(can't remember the name but it's a internet fund) about 9 years ago during the internet bubble. Luckily, I bought only $1,000 because it nosedived to $200-300 ever since the internet bubble burst. Subsequently, the fund house decide to close this fund and I only got back $200+.

Then in 2001, I decide to read more about funds and bought Shenton Global Equity($1k) and Shenton Greater China($1k). Both these funds have quite impressive historical performances. The global equity is for diverification and the China one because I feel China would do very well in coming years. I deduced right. I am proud that Shenton Greater China fund has returns of 104% of of today. If divided by 5.5years, it means it has grown an average of 19% each year. As for Shenton Global Equity fund, I started to add $100 to it every month for the last 1 year. So the returns have been much muted by this addition of funds. But before I have added this RSP(Regular Savings Plan), this fund was way better than the China fund. Even at the price, and with the RSP, I am still getting returns of about 70%.

Last year at around this time, I felt that the market is very bullist and funds are a good buy. But problem is that I do not have cash and my CPF is stuck because of the intention to buy a new house. So I recommended to my sister and wife. My wife put $5k and my sis put $1k with me for my investment. I bought Schroder BRIC fund($2k wife and $1k sis), Henderson Global Property fund($3k wife). I also bought Henderson Asia Pacific Property fund($1k+ $100/mth RSP). This fund is more for Ryan. HAPP has also given me a dividend of $71.18(2.3%). As of today, BRIC is up by 20%, HGP is up 14.5% and HAPP is up 14%. I felt that this 1-year returns has been quite impressive. For funds, my target return is 5-10% pa. As there was a promotion in Fundsupermart, I got $25 worth of Shenton Income fund FOC. Though it is not much, this fund has also grown 4.5% and has also given me dividend os $0.33. And at the same time, both my wife and me left some money in Fundsupermart's cash account which was giving about 2.6% interest. It has converted to the Cash fund which gives daily interest(2.4-2.8%). From the compunding point of view, I think the effective interest is around 3%pa.

In Feb 07, though i believe a correction is coming real soon, I got impulsive and bought Henderson European Property fund($10k), Schroder BRIC fund($10k) and DWS China Equity fund($20k) with my CPF. I was quite happy for the 1st 2 weeks as each of these 3 funds were climbing at a steady rate. All were up between 2-4% within 2 weeks. I was a bit panicky when the 28 Feb 07 came. All became negative within that 2 days. I was thinking of selling both DWS and BRIC but held on in the end. Anyway, as of now, HEP is now 2.8% up, BRIC is 3% up and DWSCE is 5.3% up. Think this is also not bad for a <3mths fund investment.

Lastly, one of my goals is to grow my investments(both stocks and funds) at a steady rate and one of the actions which I have done is to put a small amount of money into these 2 investments on a monthly basis. Besides the 2 RSPs, I add $200/mth to my stock investment porfolio. As for my funds, I intend to save enough for my emergency fund before I continue putting more money into the fund investment account. The amount should not be less than $300/mth.

I will write more about my recent switches and actions in my next blog.

My Transactions So Far

Sold my only holdings, SMRT @ $1.45 and SembMarine @ $3.40 in Jan and Feb as i believe a correction is coming. Think selling SMRT at that time is good as it went down to $1.3+ after i sold. The opposite could be said about Sembmarine. It flew to 3.6+ immediately once I sold. Anwyay, i believe in not regreting your decisions, be it good or bad, as long as you learned a good lesson.

In early Feb, my bro-in-law told me that YongNam has a very high chance of getting the IR contract as it is the only steel structure counter in Spore. I did not take action as I did not have any cash. My sis bought 10lots @ $0.22. IT flew to $0.34 in 3 weeks. My sis was greedy and held on. It nosedived back to $0.22-23 during the end Feb-early Mar period.

Since this counter has shown that it has potential, I bought 10 lots @ $0.235 on 5 Mar 07. I thought of selling when it was hovering around $0.28 but stuck with it as it was in top volume for many days. As i research more into YongNam, I got to know that the construction industry is booming with the IRs, en-blocs and condo developments. There were a few interesting counters: BBR, CSC, Lian Beng, Tat Hong. I chose BBR because it is still only $0.16(ie not risen too much). And i do see their logos at some contruction sites, ie means thye do have a presence in Spore. I bought BBR 10 lots @ $0.16 on 18 Apr. A research house also wrote an article with a buy rating on BBR with target price at $0.20. Thus, my target is $0.20.

Next, greedy me also bought CSC 6 lots @ $0.31 on 19 Apr. CSC because it just acquired L&M, G-Pile and Soil Investigation. With these acquisitions, it becames the biggest foundation and Geotechnical Company in Spore and region. I believe it will rise further due to their involvement into Malaysia(with acquisition of G-Pile). And there are not many foundation companies in Spore. So their chances in getting the IR and en-bloc developments are higher. My target is $30%, ie $0.40.

Between 16-20 Apr, I see that Lottvision was riding the bull and has risen very fast. Forums was praising it for going into China market for their gambling biz. So i got even more greedy and bought 5 lots @ $0.66 even i know i do not have the money to pay. I was hoping to contra it off within T+3. Unfortunately, the price only fell and after T+3, the fall was quite alarming and I quickly cut loss @ $0.53. It hit my -20% stop loss. I lost $705. Side note: it rose again after i sold!

As i would need money to fund my CSC purchase, I sold 5 lots of YongNam as it hit my target price of $0.34. I sold at $0.36 on 30 Apr. I profited $600. I sold the remaining 5 lots on 30 Apr @$0.35 as i fear thaat there is a correction coming from China. Got $550 return on this sell. Reports are saying China market is very high, with P/E above 40 and too many ignorance people coming into the market.

So right now, I have only CSC and BBR on hand. I feel CSC has the potential but some big investors are pressing the price down as there is always a very big sell queue @$0.325.