Saturday, April 30, 2011

Potential Short Term Trade: Golden Agri

Let's first look at GAR's weekly chart.

We can see that GAR is on a long term uptrend, and hence, two choices here: trade from long side or step aside.

I will choose to go long on GAR, explained on the daily:

We shall look at the indicators first:
The Force Index (Long Term) shows a nice bullish divergence, indicating lack of power in pushing the price down.

The MACD lines show no divergence, they rise as price rise.
The RSI also show no divergence.
Stochastics show a deeply oversold condition.
However, oversold can remain oversold for a long time. Just look at Wilmar.

Indicators don't show any juicy bullish divergences, yet what I like about this potential trade:
1.) GAR is very close to it's strong support at 65c. Look at the line I drew.
2.) When GAR was bullish in 2009 and 2010, it bounced from value zone to upper channel line. Likewise, when GAR was bearish this year, it bounced between value zone and lower channel line.

Looking at the chart now, GAR is slightly below the value zone. I daresay we've resumed the bullish trend of STI now. Hence, prices should trade between upper channel line and value zone, in a uptrend.

Target Entry Price for this trade: 65c to 66c
Profit Taking target for this trade: Midpoint between Upper channel line and value zone @ 70c to 71c
Stop Loss: 61c, though I don't expect it to go there.

Thursday, April 21, 2011

How I almost got conned into buying a "savings product" from an insurance agent

Writing this post after quite a debate on ILP on La Papillon's chatbox.

Back in late 2010, when I was fresh to the stock market and unused yet to the intricacies of finance, I was approached at Harborfront MRT by one of those people who asked me whether I'd have time to fill up a survey form. I did, and this was how the saga panned out.

The survey form has a few questions, some of which I could remember are:

1.) What is your monthly income?
Isaac's Selection: $500 to $1000 ( I was an NSF at that time)

2.) Which banks do you use?

Isaac's Selection: Citibank and POSB

3.) Are you aware that there are products out there with higher interest rates than what you can get in banks?

Isaac's Selection: No

At that point, the agent came out and did a sales pitch, briefly:
1.) We can offer you >3% (cue the :o face here) per annum! With just a minimum of $80 a month investment!
2.) We can let you take out $200 per annum ( :o again) after the first two years!

I then asked her what company was this from. I shall not reveal it here, suffice to say it is a big listed international insurance company.
I was pretty intrigued (didn't know about bonds, REITs and stuff back then) and decided to leave my cellphone number with her. It helped that she was willing to travel to near my army camp to discuss it further.

A week later, we did meet up near my camp, during my lunchtime. (which was 2 hours. I love the army)

She discussed it with me and mentioned there are 2 options. 15 year and 25 year redemption period. I was pretty shocked, for the time period was extremely long. She also did up one of those computerised quotes for me.

The gist of it was:
-I was to pay them $78 a month, for the next 25 years. Total of $23,400
-There will be death cover of $25,000 and some minor illness cover, of which i was to pay $3 a month. (The investment portion was thus $75 a month).

-ASSUMING I was to NOT take any cash out from this policy for the next 25 years, my payout was to be about $28,000 to $30,000 in the year 2035.

-There might be some increase in payout ratio if they had a good year.

-Essentially, my best case scenario was to get back $31,000 in 2025, worst case $28,000. Now, what is the compounded interest for that? Roughly but less than 2%!

Hey! I thought I was promised 3% at the MRT station?

Taking a closer look at the policy, the amount used to pay for the administrative charges and commissions was a whopping $1,500! :o face from me now!

That's over 6% of the total policy injection into the agent's pocket!

And she didn't even buy coffee for me! (She bought for herself!)

I emailed her back and mentioned that I would not be taking up the policy for it provided me with useless coverage ($25,000 compared with the $400,000 I have now from SAF Aviva and the compulsory $25,000 from CPF and another $100,000 term insurance my parents bought) and poor returns.

She was very persistent and reminded me that this policy "beri good wans...give you protection and investment leh! Pruss so cheap leh! $78 a month nia! "

Erm...I thought you pitched this as a pure investment policy?

When I replied that SGS Bonds gave about the same yield(my father told me) , she mumbled something about the risk involved with equities!

Lesson Learnt: Do you own due diligence!

Sunday, April 17, 2011

Hyflux Preference Shares

Hyflux is offering  S$200 million worth of Cumulative Non-Convertible preference shares at 6% p.a.
Cumulative in that if they do not pay you this time, they have to pay you the next time around. They will also recall the shares at par value in 2018, failing which, they will step up to 8%.

Pros of this:
1.) High yield in a currency with historically low interest rates.
2.) 8% if they do not recall the shares in 2018.
3.) If price opens high, can stag off for quick profit

1.) Hyflux is a terribly cyclical company, may face difficulty paying out the dividends during bad times; having said that, the cumulative portion guarantees 6%, just not the timing
2.) Hyflux's equity is lower than liabilities.
3.) Why did they need to find financing at 6%, unless banks are reluctant to lend them more money?Concerned with their balance sheet, they only are willing to lend at a high interest rate?
4.) SPH and Starhub have close to 6% dividend yield. Having said that, SPH/SH do not guarantee this high payout. 

I won't be applying for this CPS. minimum bid is at $10,000, i can only afford to bid $10,000. Probably just going to waste $2.

Saturday, April 16, 2011

Some Travel Lobangs for those interested

All fares are all in.

Singapore to Melbourne on Royal Brunei Airlines @ $631. Ongoing promotion to celebrate their new port-of-call at Melbourne.
Fly from Singapore to Bandar Sri Begawan, then to Melbourne.

Singapore to New York City on Delta Airlines @ $920. Book till end of April for outbound travel to June. Not available on Delta's website, but available with travel agents like Zuji, STA Travel and Mustafa.
Fly from Singapore to Narita and then on to John F. Kennedy Airport.

Singapore to Sydney on Garuda @ $800. Outbound travel all the way till August. Again, not available on their own site but available with travel agents like Zuji, Mustafa and STA.
Fly from Singapore to Ngurah Rai Airport (Bali) on a codeshare with SQ on SQ equipment, then on to Sydney on Garuda. Return from Sydney to Jakarta and then on to Singapore, all sectors on Garuda.

Wednesday, April 13, 2011

Why I won't subscribe to Mapletree Commercial nor buy HPH Trust

Simple reason.

Yield is at 5% for Mapletree Commercial. '

Yield is at 5% for HPH Trust, in a depreciating US Dollar.

DBS NCPS was offered at 4.7%.

Why bother taking on more risk for a poor return, when one can easily have gotten 0.3% less yield for a much better peace of mind with DBS NCPS?

Mapletree Commercial might make for a good stag, but I sure am not holding it for it's yield.

Sunday, April 3, 2011

March 2011 Portfolio Update

Having liquidated my lone S chip- Dapai International with reasons here, my Long Term holdings now consist of only 5 stocks:

Stock Bought Buy Price
MIT $0.930
Sabana $1.050
First REIT $0.700
ST Engineering
Poh Tiong Choon Log 0.48


MIT: At my buy price, 93c at IPO, gives close to an 8% yield + 12% capital gain at closing price of $1.05. Not divesting because: Reasonably high yield at my price and peace of mind from a strong parent. Even as CIT, First, Sabana and AIMSAMPIREIT give almost 10% yield at their price, I'm willing to accept a lower yield for MIT's "blue chip-ness", so to speak.

Sabana: 8.22% yield this year and 8.5% projected yield at my price, $1.05. 11% capital loss currently. At current prices, Sabana gives a 9.5% yield- highly attractive yet commensurately high with erstwhile troubled AIMSAMPIREIT and CIT. Not divesting, as I only have 1 lot, so will just chuck this into the freezer. Seeing heavy selling by BB's recently, having touched an all time low of 92c last week. AK71 of ASSI has a summary of Sabana here.

My first freezer stock.....  :(

First REIT: Saw heavy selling during the Japanese crisis, has recovered somewhat but not to the fervour of January 2011 yet where it touched a high of 77c due to a highly favourable OCBC research report. Gives me a projected 9.5% yield at my buy price and also 5.5% capital gain YTD. Received a small dividend in Jan 2011.

Poh Tiong Choon Logistics: I bought this for pretty dumb reasons here and I probably suffer from confirmation bias now. Looking back, it was a POOR decision to buy at that point. Why? Look at the technicals at the time I bought. Way above the value zone. I was very "gian gian" to enter. Luckily for me, I didn't suffer too heavy a paper loss.

As for the fundamentals: PTC showed a pretty good 2H 2010 profit turnaround. Insiders are still buying and buying and providing a support at 43cents. I usually see 100 lots buy queue at 43cents everyday. 2cents dividend coming next month.

ST Engineering: A very blue blue chip, owned by our government. No need to say anything. 11.55cents coming in May. Nice capital appreciation for me too :)

May looks to be a good month: $400 coming from the government due to budget 2011, 11.55c a lot from ST engg, Sabana distribution, maybe First and MIT too.