Stocks and Durians-yummy!

I like Durians. Love eating them, though I do so moderately, not because of any health aspects but more because they're pretty expensive.

I see quite a parallel between durians and the stock market.

In trying to bottom pick, we pick durians from the ground. Just don't stand under the durian tree too often; we might get knocked by the thorny durians on the way down...

In value investing, people scrutinize the business, it's financials, and it's valuations. Same for durians. If one wants to buy durians, he will scrutinize it, shake it, look at the color, look at the stem, check if the thorns are sharp and fresh. Lastly, having concluded that the durian is acceptable, we look at the price. Sometimes, durians are in large supply and we can get top grade durians at $10/kg. Sometimes, they are in short supply and cost $22/kg. So, we make a decision based on the current valuation whether to buy. If one deems it to be a value buy, we buy it at whatever Mr. Durian Seller/Mr. Market offers to us. If not, we just walk away, our banknotes safe and sound in our pockets.

We also can shop around. Stall A might be famous for it's Mao Shan Wang, but what if one wants to eat D24? Do we blindly go to Stall A? Sometimes, Stall B, which might not be famous for any cultivar, might offer D24 at cheaper prices. Same thing, we must also shop around for whoever lowers our cost. Sometimes, Stall A customers look down on Stall B customers because Stall B doesn't have a reputation. But, what matters is just the quality of the durians, no? Whether Stall A gives you aircon, more friendly staff, does it matter? I detect alot of snobbery and people turning their noses up at Standard Chartered Bank's offer of 0.20% commission with no minimum. Even though SCB might carry a bigger advantage for small players, people actually will save more when they trade more. If I want to buy $40,000 worth of ST Engineering, my commission for a traditional broker is at 0.275% which is $110+ gst. For SCB, that will be 0.20% which is $80+ gst. Of course, there are many other factors to look into; but I feel that the vibe of disdain and ridicule of SCB customers I get is unwarranted.


For durians, we must also know which cultivars are in season at the time we want to buy, which will offer us the best value for money. Say, in April, D24 from pahang is in season. We will get better value for money for D24 from Pahang in April, than say Mao Shan Wang from Perak. Sometimes, a flood/drought/whatever affects the whole South East Asia region and all durian trees, no matter how good, churn out poor quality durians. Same thing, we should look at the macro events and not just the business fundamentals of a stock. No matter how good a business is, a rising tide lifts all ships, and vice versa, a sinking tide grounds all ships. Even if a company is getting exceptional economic moat, ROE, ROI etc etc, a global economic downturn will sink it's stock price, will it not?

After all is said and done, when we bring the durian back, no matter how good it looked before we opened it, after opening, if there are worms inside, do we hold on to the durian hoping the worm will magically disappear, or do we take decisive action to throw the durian away before the worm replicates and goes into our other durians, or start to affect us?


That's my parallel of durian eating and stock picking. Enjoy both eating durians and picking stocks. Cheers!

NOL MBL eCW110303, SembMar MBLeCW110303

Bought more warrants this time.

I've read that what I'm doing is speculating (momentum trading), not investing. And yep, I agree with it, I am speculating. :)

In the long run, value investing is my target investment style, however, I'm trying my hand out in momentum investing for now. Reason being, i don't have much money, hence warrants can get me large exposure to equities with just a fraction of the cost, being safer than CFD, yet being able to achieve high percentage gains (and losses.)

Anyway, I made a small mistake today. in buying NOL MBL eCW 110303, i accidentally saw the price wrongly and ordered at a higher price than market rate. hence POEMS transacted my order at the current market price, which was not very attractive. I bought 5 lots at $0.24 each, thus immediately losing about $100 since the buy price dropped to $0.230, inclusive of my brokerage fees.

Anyway, i didnt make the same mistake when buying SembMar a few hours later. I placed my order (and double checked!) at a low price, $0.400. SembMar dropped and i got it at that price.

With regards to Coscocorp warrant that i bought last friday, it went thru a tumultuous week, at one point i lost about 20% of the warrant value when cosco dropped below $2. but cosco seems to have rallied with their announcement of the 2 contracts they received, and I'm hoping that the fabled "SANTA CLAUS RALLY" will help me gain some profits for christmas.

Apparently, December to February has historically been the best months of the year, one reason being that retail investors sell off in dec to claim capital loss for tax reasons, and unit trust managers have to transact to meet requirements. not sure how true these reasons are, but since 1930+, most of the market rallies have been at the year end.

Reason for buying NOL:
Profit and revenue rose YOY consistently, Most of the fundamentals look good, it's PE ratio is around 11, however I'm concerned with its high debt level, at USD 1.3 billion, which is 20% of net equity. Bought the short term warrant instead of the share due to the reasons mentioned above.

Reason for buying SembMar:
Revenue has dropped, yet profit has increased, they are in the running for Petrobras' 27 rig building contracts, debt level is pretty good, yet i can't afford it's share price. sigh...

NOL MBL eCW 110303
Buy price: $0.240
Target profit taking level $0.30
Stop loss level: $0.180 (25% away- loss of $350 incl brokerage)

SembMar MBL eCW 110303
Buy price: $0.400
Target profit taking level : $0.460-$0.480
Stop loss level: $0.300(25% away- loss of $350 incl brokerage)

CoscoCorp BNP eCW110530
Buy price: $0.485
Current price: $0.500
Revised profit taking level: $0.580
Revised Stop loss level: $0.385(21% away- loss of $250 incl brokerage)

In a side note,

Why are brokerage charges so HIGH in Singapore? In the US, POEMS comparable internet trading like E*Trade, TD Ameritrade, Charles Schwab, Fidelity charge a FLAT rate of US 7.95-USD9.99 for non advisory! Why is Singapore so expensive? could be due to Economies of Scale i guess.