VICOM Monopoly Cash Cow Stock (车运亨通)

Posted on April 14, 2020 Written by
VICOM Monopoly Stock V01 SGX

Vicom (SGX: V01) is an authorized vehicle inspection company in Singapore. Based on LTA (Land Transport Authority) regulation, all vehicles / cars in Singapore have to go for inspection every 1-2 years. Due to this legal requirement, yearly or even monthly cash flow of Vicom is stable and predictable (车运亨通) as number of cars in Singapore is also regulated.

It is a strong economic moat to own this car inspection license because there are only 2 companies (duopoly) in Singapore: 7 centers operated by Vicom (including 2 by JIC which is also owned by Vicom) and 3 centers owned by STA. So, Vicom has 70% monopoly of vehicle inspection business in Singapore. Inspection fee is regulated by LTA, so no difference which company to go, therefore the company has more locations would have more businesses as most drivers would choose the nearest center from home.

Despite LTA announced 0% car growth rate since Year 2018, due to high level of car COE (Certificate of Entitlement to own a car in Singapore) price, more car owners choose to renew the car COE, therefore more old cars which need annual car inspection, helping to compensate for the difference in 0% car growth.  As a result, Vicom earning and cashflow are growing gradually or stable (flat), aligning to vehicle growth in Singapore.

During the 10 minutes car inspection (very efficient flow, saving time for drivers and also quick cash generator for Vicom), from one end to another end (retest may be required if fail the test), $64.20 would flow from car owner’s pocket to Vicom financial account. When this number is multiplied with 70% of all vehicles in Singapore due for inspection, it is tremendous amount of cash. The Capex (difference of Operating Cashflow and Free Cash flow) is limited, only in Year 2018, due to investment in new Bukit Batok inspection center, there was less free cash flow in that year. Vicom also has non-vehicle testing division (SETSCO) but business is not as predictable as vehicle inspection business.

Vicom has been very generous in dividend payment, even it is not a REIT but having similar policy to pay 90% of profits as dividend back to shareholders (only difference is Vicom has the right to change this policy as dividend amount is not regulated by law as for a REIT). In fact, since Year 2017 to 2019, Vicom has “over” paid 120% of its profits as dividend (possible as having retained earnings from the past few decades of business). Current dividend yield of Vicom is about 5%.

Parent company, Comfortdelgro (SGX: C52), has about 2/3 ownership of Vicom, therefore could enjoy 2/3 of stable cash generated by Vicom through dividend payment. Despite taxi business of Comfortdelgro has been in crisis for several years with new challenger of Grab Taxi (disruptive technology) and also during Coronavirus infection period in year 2020 (less passengers), Vicom has been serving as cash cow for Comfortdelgro, providing stability to its business. 

Due to consistent dividend payment with a very stable business (protected by LTA car inspection requirement), Vicom has been a favourite for some dividend stock investors. Due to more demand than supply (for the cash cow with stable dividend payment), Vicom share price has been growing for decades, after share price adjustment, growing from about $0.40/share to $8/share over the past 20 years, going up by 20 times!  It means if initial investment capital was $1000, it would become $20,000 (excluding 4-6% yearly dividend yield for 20 years).

Vicom Monopoly Stock V01 SGX

However, past success records in both business and share prices do not guarantee future performance as stock market is forward looking. Therefore, even an investor may be interested in Vicom for investing from now, has to learn to “inspect” giant stock, only a giant stock (applying Dr Tee’s giant stock criteria) in certified after yearly review, then an investor could continue to hold, even may not need to sell in future stock crisis. In short, Vicom inspects Singapore cars to make money and investor has to inspect global giant stocks to remain profitable.

So, despite slower growth in business but due to it stability and predictability, Vicom is also a growth stock, suitable for long term investing.  A smart investor would apply Dr Tee’s Optimism Strategies to acquire Vicom at low optimism < 25% (currently is about 15% Optimism), suitable for both dividend investing (moderate 4-6% dividend yield record over the past decade, a strong consideration during crisis time) and growth investing (buy low optimism & hold long term for capital gains).

Assuming the worst case scenario that Coronavirus may affect the world / Singapore for more than 1 year (before a vaccine is developed), with over 50% people lockdown at home for over 1 year, resulting in Great Depression for a few years, number of cars in Singapore are unlikely to drop even by 10% base on natural demand and supply (unless it is required by LTA). However, during global financial crisis, it is possible for Singapore car COE price to drop (historical low was $1, could be as high as nearly $100,000) to support the current number of cars. A smart investor may also apply Optimism Strategies to buy Singapore car with low optimism COE during global financial crisis (current COE price of about S$30,000 is only moderate optimism level, not yet a good time for car shopper but $1 historical low COE price may not happen again due to open bidding system).

So, some readers may be tempted to invest in Vicom right away (sharing in this article is for educational purpose, please make your own analysis, in case anyone may think Vicom could go bankrupt one day if LTA may announce that Singapore vehicles no longer need inspection anymore). During the recent global stock crisis in Mar 2020, Vicom share price fell by about 20% (more defensive compared to 30 STI blue chip stocks fell by about 30%), currently recovering more than half of the correction. An investor has to consider both risks and rewards with strategies aligned to own unique personality, not simply a buy after reading this article.

If a smart investor wants to have a complete 100% monopoly of car inspection business (buy a stock means in partnership with company doing business together), then may also consider STA which controls remaining 30% of car inspection in Singapore.  STA could be invested partially through parent company, ST Engineering (SGX: S63), another dividend giant stock in Singapore. Comparing with Vicom, ST Engineering is equally strong for dividend investing but much slower for growth investing (car inspection is not the only business nor main business for ST Engineering).

Similarly, parent company of Vicom, Comfortdelgro, is also a giant dividend stock (dividend yield is 6.5% but a question mark if this is sustainable this year when fewer people take taxi for 6-12 months) but slower growth than Vicom. Comfortdelgro has another subsidiary, SBS Transit (SGX: S61), which is only a marginal dividend giant stock with bus and MRT businesses, not as strong as Vicom.  Vicom has the characteristic of midfielder with 2 main investing goals of passive incomes (dividend) and capital gains.

Vicom is a small size stock, but it is a giant, much better than most 30 STI index component stocks including Comfortdelgro (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

“Crisis is Opportunity” if a company business is stable or growing while the share prices fall significantly due to market fear. Monopoly stock in a stable or growing sector with empowerment by local authority would give unfair advantage to a business. There are over 1500 global giant stocks, some are stronger growth than Vicom and/or better dividend yield than Vicom. “What to Buy” does not mean “Now to Buy”, positioning on a giant stock requires comprehensive LOFTP (Levels 1-4, Optimism 0-100%, Fundamental, Technical and Personal Analysis) strategies.

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Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks of growing sectors with 3 value investing strategies (undervalue, growth, dividend stocks), knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

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Filed Under: Market Optimism, Stock Market Tagged: , , , , , ,

7 Jardine King of Singapore Stocks (狮城股王)

Posted on April 10, 2020 Written by
Jardine Group SGX Jardine Matheson J36 Jardine Strategic Holding J36 Jardine Cycle & Carriage C07 Astra Asii Mandarin Oriental Hotel M04 Hongkong Land H78 Dairy Farm D01 Singapore Stocks Creative Technology C76 Berkshire BRK NYSE Sheng Siong OV8

Jardine Group is not just a company, it is a giant group with nearly 200 years of business history (started in 1832, then controlled by Keswick family for many generations till now).  Jardine group of companies cover many industries, eg. engineering, automotive, properties, hotel, supermarkets, etc.

Jardine group has 7 giant stocks (Jardine Matheson, Jardine Strategic, Jardine Cycle & Carriage, Astra, Hongkong Land, Dairy Farm, Mandarin Oriental Hotel), all are falling to very low optimism (mostly with optimism <10%) over the past 2 months of global stock crisis.  Since 5 of Jardine giant stocks (except Mandarin Oriental Hotel and Astra International – listed in Indonesia) are 30 STI component stocks (contributing to about 15% weightage), it has the strongest influence to Singapore stock exchange, more than individual stock of 3 major banks (DBS, OCBC, UOB) and Singtel.

There are 30 STI index component stocks including 5 Jardine stocks (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

6 Jardine stocks listed in Singapore Stock Exchange are secondary listing (primary listing in London Stock Exchange) and traded in USD (currently at high optimism vs SGD). USD usually performs better in bear market (safe haven), weaker during bull market, the longer term forex disadvantage of USD/SGD (about -2%/year USD depreciation) could be compensated by higher growth of 10+%/year of Jardine stock prices.

So, let’s learn to position in 7 Jardine stocks, all are giant stocks based on Dr Tee criteria but each Jardine stock has different characteristic, which may be considered for different personality of investors.

1) Jardine Matheson Holding – JMH (SGX: J36)

2) Jardine Strategic Holding – JSH (SGX: J37)

Jardine Matheson Holding, JMH is “King” of Singapore stocks (狮城股王), the highest share price in Singapore stock market history. JMH share price was peak around US$70/share a few months ago, before falling by 30% during Coronavirus crisis to about US$50/share. It is costly to invest even with minimum of 100 shares per lot (price in USD) = $50 x 1.43 (USD/SGD) x 100 = S$7150.

Highest stock price may not be always a giant stock, although most of the time, high stock prices are giant stocks, higher prices due to growing business over the decades. For example, world’s most expensive stock, Berkshire Hathaway (NYSE: BRK) managed by Warren Buffett, 1 share alone could be US$344,000 (nearly S$500k, could buy a 5-room HDB flat), currently selling at discount of US$290,000 (for details of Berkshire stock, refer to free eBook by Dr Tee on global Top 10 stocks).

The former Singapore stock king was Creative Technology (SGX: C76) with over S$60/share peak stock price recorded in year 2000 dotcom bubble. After the burst of technology bubble, not only stock price in crisis, Creative Technology also lost the giant stock title, company is no longer growing, share prices declining for 20 years till as low as $1/share. Therefore, long term investing requires monitoring of business fundamental, otherwise buy low may get lower over time, suffering huge capital loss. A common mistake for beginner in stock investing is usually buy a famous brand of stock at historical low price or 5-10 years low, assuming the price may recover in future which may not because future business is the key.

Similarly, during Coronavirus crisis, some sectors are badly affected (eg, airlines, F&B, hotel, etc), an investor needs to review whether the business with losses (more than 90% drop in revenue) could last with cash or net asset available. After the crisis is over, could the business recover quickly?

Jardine Strategic Holding, JSH is sibling of JMH, both are owning each other, a special cross-holding structure which could prevent hostile takeover. See another article of this topic: https://www.ein55.com/2017/03/jardine-group-uob-group-cross-holding-stock-network/

Both JMH and JSH stock performance are very close in longer term (eg over 10 years). Investing in either JMH or JSH is as if investing in Jardine fund of stocks with most the Jardine businesses. JMH has average of 1% higher dividend yield than JSH but JSH has average of about 1% higher yearly growth in share price than JMH, so effect is about the same. More details of JMH in earlier article: https://www.ein55.com/2016/04/choose-stocks-grow-30-times-price/


Both JMH and JSH are considered cyclic growth stocks, need to position with optimism less than 25%, best during global stock crisis or global financial crisis. Due to cyclic nature of these 2 stocks with minimal dividend for protection, it is more suitable for investing during recovery phase of stock crisis, avoid buying low get lower. When positioned right at significant low optimism in a severe global stock crisis, JMH and/or JSH may be considered for longer term holding due to high growth but need to monitor its cyclic businesses to certify that they are giant stocks (based on Dr Tee criteria) as this title of giant stock is not forever, eg. Creative Technology lost this title about 20 years ago.

“Buy Low” could only have chance to “Sell High” in longer term with condition that it is a giant stock. If not, “Buy Low” may become “Lower” in prices.

3) Jardine Cycle & Carriage – JCC (SGX: C07)

4) Astra International (IDX: ASii)

Jardine Cycle & Carriage, JCC is only a subsidiary of JSH but itself is already a giant automotive stock (familiar car brands:  Mercedes-Benz, Toyota, Honda and Kia). JCC also owns Indonesian automotive giant stock, Astra International (listed in Indonesia Stock Exchange).

JMH owns JSH, JSH owns JCC, JCC owns Astra. So, it is as if 4 levels of stock connection but stock performances are close. JMH and JSH could be considered together (either one). Similarly, JCC and Astra may be considered together through JCC (if easier to invest in Singapore stock than Indonesian stock, Astra).

JCC is a dividend growth giant stock (not for Astra), suitable for investing during low optimism stock market, protected by nearly 6% dividend yield (assuming car business drops during crisis, 50% cut in dividend still has about 3% dividend yield left, more than 1% bank interest rate for cash). When crisis is over, likely the growing business will justify for normal distribution of dividend. However, since it is not a REIT (by law needs to distribute 90% taxable income to shareholders as dividend), the company has the right to choose not to give dividend. Over the past 10 years, JCC has record of giving around 3% dividend yield, current high dividend yield of nearly 6% is mainly due to price dropped by about 50% over the past few months of global stock crisis, therefore dividend yield is doubled from 3 to 6%.

If one believes the Coronavirus crisis or any future crisis are unlikely to stop people from buying cars more than 1 year (eg. could not get out of home for 1 year to view the cars in showroom), then crisis in JCC stock prices could be an opportunity. However, for Q1-Q2/2020 with less shoppers due to global lockdown, there could be temporary drop in business which may be justified by 50% discount in share price.

5) Hongkong Land (SGX: H78)

Hongkong Land is a well-known property stock, owning grade-A commercial properties in both Hong Kong central and Singapore marina area. There are quite a few past articles by Dr Tee on Hongkong Land (https://www.ein55.com/tag/hongkong-land/), mainly an undervalue property stock. However, over the past few years, buy low may get lower as Hongkong Land is not only following Jardine group, also affected by Level 2 property sector (Hong Kong / Singapore) and Level 3 stock property, as well as political economy (eg. over 100 days of Hong Kong protesters last year before Coronavirus crisis).

Among all the 7 Jardine giant stocks, Hongkong Land is the “safest” due to property asset selling at over 70% discount (price to book ratio, PB, is less than 0.3). The high dividend yield of 5% (eg from property rental) is a bonus for long term investor of Hongkong Land, providing passive income (even if 5% dividend yield is cut by half for next 12 months, still suitable as defender), no issue even if “crisis” of any form (protester, virus, etc) may last more than 5 years. During Coronavirus crisis, tenants of property could lose money due to less shoppers but landlord (Hongkong Land) still could collect stable rental.

Mid-term risk of Hongkong Land could be high property valuation in Hong Kong may not be sustainable if the average 20 years property cycle of Hong Kong falls from high optimism. So far Coronavirus only affects global stock markets and badly affect business of certain sectors, but not yet on property sector. Even so, long term outlook for Hong Kong and Singapore property sectors are steady gradual growth as a country surrounded by sea with limited land but nearly unlimited future population (both has the top 10 highest population density in the world with growing economy for decades) would support the growing property prices in decades to come.

In short, investing in Hongkong Land stock is an investment in Singapore and Hong Kong countries through as integrated stock and property markets.

6) Mandarin Oriental Hotel (SGX: M04)

Mandarin Oriental Hotel is not only a hotel in Singapore, it has many hotels globally. During Coronavirus crisis, hotel (hospitality sector) is badly affected. So, investor needs to monitor Q1 and Q2/2020 results of Mandarin Oriental Hotel before making decision.

Mandarin Oriental Hotel is a marginal giant stock, the weakest among 7 Jardine stocks. Even before Coronavirus crisis, business fundamental has been declining. Despite 60% discount in hotel asset with PB of 0.4, Mandarin Oriental Hotel is not as valuable as Hongkong Land.

For short term or mid-term cyclic trading strategy, this stock may be considered if there is a strong reversal in price trend, especially when Coronavirus condition may improve but risk is relatively higher than other 6 Jardine stocks.


7) Dairy Farm International (SGX: D01)

Dairy Farm is famous of its supermarket and consumer business (Wellcome, Cold Storage, Seven Eleven, IDEA, etc) in Hong Kong, Singapore and regional countries. During Coronavirus period, supermarket business should perform better (see how crowded when lockdown was announced) as is a consumer staples business, people still need to eat and drink, if they could not go out from home.

However, before Coronavirus crisis, Dairy Farm only has average business performance. It even sells some its seven eleven stores. It has stable dividend payment record, about 4% yield currently, possible to position as midfielder role. Competitor supermarket stock, Sheng Siong (SGX: OV8) performs better than Dairy Farm for business and stock prices. Sheng Siong has recovered the “losses” in stock prices as business is doing too good during Coronavirus period. Sheng Siong is only a young giant stock but does well in the current global stock crisis, having potential to be a true giant stock in future with more proven record.

Therefore, not all sectors are affected by the same crisis. Investor may explore stocks with stable businesses, leveraging on market fear to ask for over 20% discount in those growth stocks. Crisis is Opportunity when stock prices fall due to fear but business is still strong. Crisis is crisis when stock prices fall mainly due to weaker business.

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In summary, all 7 Jardine stocks are giant stocks at low optimism. However, the stock prices have been bearish for a few years, undervalue asset becomes more undervalue each year. Therefore, these Jardine stocks may not possible for traders without strong holding power as buy low may get lower in short term to medium term, unless there is a clear reversal in stock prices to uptrend again.

For long term investors who apply undervalue investing may consider Hongkong Land and Jardine Cycle & carriage stocks which pay over 5% dividend yield (but assume this amount may be cut by 50%). For very conservative investor, Hongkong Land with over 70% discount in asset value (PB < 0.3) is another strong consideration, even if Hongkong Land could not survive the unlikely Great Depression (<5% chance it may happen), investors may not lose the capital due to high safety of margin.

Strategies for investing in Jardine group is similar as other giant stocks at low optimism, multiple entries, eg 1, 3 or 5 “bullets” of capital, first entry at low optimism < 25%, subsequently optional entries could be either downtrend (5-10% lower, average down for investing) counter-trend investing or uptrend (5-10% higher, average high for trading) follow-trend trading if optimism is still less than 25%. It is fine if only 1 “bullet” (1 entry) is triggered (eg. stock market has V-shape recovery), future may follow short term or mid term trading for actions, to be reviewed again.

Sharing above for 7 Jardine stocks are for educational purpose (almost spend 1 day of Dr Tee valuable time writing this long article, hope it is an useful reference for readers). Please make your own decision with independent thinking. If you could read until this sentence, implying you have the determination to learn and apply stock investing.

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Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks of growing sectors with 3 value investing strategies (undervalue, growth, dividend stocks), knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

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Filed Under: Stock Market Tagged: , , , , , , , , , , , , , , , , , , , , , ,

Stock: To Buy or NOT to Buy Now? 左右为难

Posted on April 9, 2020 Written by
Stock To Buy US Singapore

Some Ein55 forum members may not take any action in stock market for 5-10 years which I can understand is to wait for global stock crisis. The current global stock crisis worth attention for long term or even life-time investors.

Global stock market experienced a mini roller coaster ride, major correction of 20-30% in 1 month, recovering about 10-20% in last 2 weeks, leading for US, following by China and Germany (Europe), lagging for Hong Kong and Singapore),So, for current global stock market, “To Buy or NOT to Buy Now” is $1 Million worth of question to many people, especially this could be 5-10 years opportunity, may not come back easily if missed. When positioned right, one could save 5-10 years of waiting time. When positioned wrong, one could lose more (buy low get lower). It is a dilemma when one is standing at a junction of the investing path (左右为难), especially for those who have not done any new entry yet on stock, not sure whether to take the risk or miss it totally.

I just worry that some readers may aim for very low (eg. STI to drop to 0% optimism or S&P 500 to drop to 25% optimism) which is Level 4 stock crisis. What if it never comes eventually (eg. Coronavirus may fade away by summer, V-shape recovery in global stocks and monthly economy).

If one only has 1 bullet for investment, I assume it is trend-following and we just observe the first signal (1 day above 20 days moving average of stock index prices for at least STI and S&P 500, likely for most global stock indices). Next signal may be another 10% higher stock price with 1 day above 50 days moving average of stock prices. Will the readers give up the opportunity because of worry this is technical rebound before falling to another bigger crisis?

To be frank, current “global stock crisis” is only Level 3.5 crisis, which is similar to Euro Debt Crisis or Asian Financial Crisis, a regional crisis affecting half of the world, but not yet for US (only a major correction from high optimism to mid optimism of fair price).

Since we don’t know the scale of crisis (depending on condition of Coronavirus), if one does not follow the price trend (eg bear to bull reversal), insisting to aim for the lowest point (eg. STI below 2000 points or S&P 500 below 1500 points), else no entry, may miss the opportunity if it is just a major correction.

Stock market US Europe Singapore Hong Kong China

Based on Coronavirus world / Singapore condition, Apr 2020 is likely the most severe, double the cases every 7 days (see my earlier article, “predicting” Singapore would double from 1000 to 2000 cases by this weekend, which is coming soon with record daily new high of 287 infected cases today). However, we have a few key references, proving that Coronavirus could fade away in about 4 months if proper lockdown and isolation at home is implemented for 1-2 months.

China – successful model (full cycle completed)

Korea – runner up, cycle nearly completed

Europe / Iran – 3rd place, downtrend for over 7 days

World (US, SG, Asia ex China and Korea) – last phase, some see early signal of 1-2 days downtrend but not stable.

If Coronavirus does not discriminate the country (assuming all follows similar way of 100% isolation at home), then there is a good chance to see positive results as China and Korea, even we don’t know the future. This is similar to stock investing, when we follow certain strategies, even we don’t know the future, the chances of winning are high but one need to take calculated risks (tolerance level is different for each person, some could not take even 1% “loss” for 1 day, regretting immediately after entry).

To compromise in between the fear of missing out (miss the chance if does not invest if the worst is already over) and fear of losing in greater crisis to come (buy low get lower), Ein55 readers may consider multiple entries as described in a few earlier articles.

Here are the summary of steps in 1 possible strategy for current stock market (sharing for educational purpose, please make your own decision):

1) What to Buy

Focus in global giant stocks, prefer 50% portfolio having at least >3-5% dividend yield as protection, in case if it crisis get worse from Level 3.5 (regional / 50% world) to Level 4 (global financial crisis) or even Level 5 (Great Depression, affecting world economy for 2-5 years, similar in scale as 1929 Great Depression), then investors could average down (but trend-following traders need to cut loss following the exit plan).

There are over 1500 global giant stocks (based on Dr Tee unique criteria of Giant Detector). Long term value investor (especially for contrarian investor) may focus more on dividend giant stocks, about 100 in the world. Trend-following traders or investors may focus on growth stocks (may not have dividend). Some could compromise in midfielder stocks on growth dividend giant stocks, having the best of 2 worlds, could invest (for dividend during winter low optimism market) and trade (for capital gains during spring with higher optimism market).

2) Capital Allocation – Multiple Entries

Set a few multiple entries point, decide how many bullets to trigger, could be (1 x 100%), (2 x 50%), (3 x 33%), (5 x 20%), (10 x 10%), etc.

If only 1 stock at 1 time due to limited capital, then reader may consider index ETF (allow diversification, eg S&P 500 ETF, Hang Seng Index ETF, MSCI World ETF or STI ETF, etc), not perfect but safer than only buy any individual stock.

3) First Entry

Trigger the first bullet when see the first signal acceptable to own criteria, eg. counter-trend (eg. when price is below 25% optimism or even coming to 0% optimism) or follow-trend (eg. when see higher high and higher low, or price is above 20 days moving average as a few days ago).

The beauty of trigger the first bullet is one would not worry of missing the boat (eg 1/5 capital may be positioned), even if stock market recovers without returning to lower prices than the first entry, at least the investor still has 1/5 gift from heaven, better than empty handed. Traders may average up to follow the trend after 1/5 is winning and signal becomes clearer, Coronavirus becomes weaker while global QE or stimulus plans could be more (nearly everyone will get Ang Pao or relief fund from local government).

When the first entry is position, an investor would have a reference to compare for next entry, either X% lower to buy more for value investor, or Y% higher to buy more for trend-following traders. X% and Y% could be aligned to own personality, eg 5 or 10%.

4) Remaining Entries (Conditional)

For remaining bullets, one may trigger based on strategies, either counter-trend (every 5-10% lower in prices from first entry, trigger second entry) which is more for investing, or follow-trend (eg. every 5-10% higher in prices from first entry, trigger second entry) which is more for trading.

For trading, needs to have S.E.T. in plan, including cut loss when down by X%, eg 5 or 10% (to protect yourself in case it is just a technical rebound over the past few 2 weeks, still can preserve capital to buy in next reversal signal after the second dip). For investing, lower prices is blessing in disguise as price is lower each time with higher dividend yield, therefore stronger holding power.

5) Hold (Monitor)

Review portfolio regularly, not just to check stock prices, also ensure business fundamental is within expected level (eg. for sectors directly affected by Coronavirus, likely will make a huge loss, may not consider even if they are still giant stocks based on current prices and FA till now which may not have Q1 FA yet).

6) Sell (Exit)

For exit strategies, it is a good problem to have as you probably have make money by then one day, worry if the profits may disappear one day if not sold on time or hoping for higher upside with more capital gains.

You could learn further from Dr Tee in future 6-day Ein55 course, currently focusing more on potential entries and risk management.

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To a country government, probably need to spend 20% of yearly GDP in supporting economy (eg. pay for partial salary) 6-12 months but they could save 1-2 years of GDP (if falling to global financial crisis) or 3-5 years of GDP (if falling to Great Depression). When US stock market falls in last 1 month of crash, about US$12 Trillions was evaporated. So, QE of US$2 Trillions by Trump to save $12 Trillions of people’s wealth hidden in stock market is definitely a good deal (not to mention property market’s wealth which is not affected yet).

When S&P 500 is back to above 3000 points, STI is above 3000 points, global stock markets are back to 90% of original stock level, then global people would continue the bull market, win-win for all parties. Political economy has to consider popular support based on both stock market and economy. S&P 500 is report card of Trump, he only has time until summer (Jun – Aug) to show the report card above 3000 points again (possible as S&P 500 fells from 3300+ points to 2200+ points by 1/3, recovering to 2800 points today, only less than 10% upside away).

There is no need to worry if current stock market rally is dead cat bounce (Technical Rebound) or true recovery (worst is over, boat sailing off without return). Readers may just focus on what are known (intrinsic value vs price, optimism level, business fundamental, Coronavirus trend and successful experiences, government QE, etc – within 55 Ein55 investing styles) today to make a decision with calculated risks within tolerance limit (eg diversification over a portfolio of giant stocks, protected by dividend payment during potential long winter, position sizing, trend-following or simply cut loss when exceed the acceptable loss limit, etc).

I am not asking Ein55 readers to buy stocks now (sharing here is for education purpose, please make your own decision). I am urging all to use the free time at home this month to review your stocks, then taking the right actions (buy, hold, sell, wait, shorting) with strategies aligned to your personality. At least there is no regret when crisis is either over or becoming Level 4 or Level 5 crisis in future as you have planned for them. Even your decision is to do nothing now, it is also fine as you have given yourself a chance by reading until here.

==================================

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

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Filed Under: Market Outlook, Stock Market, Technical Analysis, Value Investing Tagged: , , , , , , , ,

4 Known and Unknown Stock Strategies (知之为知之)

Posted on April 9, 2020 Written by
4 Known and Unknown Stock Strategies

These 4 principles of “known/unknown” (知之为知之，不知为不知) could be applied in stock investing strategies to enhance the probability of success, no need to worry about future known.

1) Known Knowns

– This could be safer way of investing, focusing in known giant stocks with consistent growing business, protected by strong economic moat. Even the stock price could be high, it has higher chances to go higher in future.

In fact, why focus in fortune-telling, guessing the future stock prices or future business? There are lots of known facts which could be useful to make a decision. To avoid another unknown (eg. fake financial data), one could apply diversification over a portfolio of 10-20 giant stocks to minimize such unsystematic risks.

2) Unknown Knowns

– This is area of improvement for all stock investors, eg sharing knowledge in Ein55 forum, allowing us to know the knowns which are not known to oneself, learning from other people’s successes or mistakes (eg recent sharing of GIC / Temasek / Warren Buffett investment experience).

There are potential red flags, risk of business, which one could learn to minimize the risk (eg. high debt, negative free cash flow, etc), may avoid crisis such as Hyflux stock and bond investment with these known facts even more than 5 years before the company crisis.

Company such as Muddy Waters and Iceberg are supporters to find these unknown knowns, providing opportunity for shorting for potential profits by converting the unknown knowns to known knowns later to the general public.

One could convert “unknown knowns” to “known knowns”, strengthen own probability of success, eg. learning one new strategy or giant stock each week in this forum.

3) Known Unknowns

– This could be Coronavirus crisis (only after the breakout), weak global economic performance, high debt, etc, usually reported widely by analysts, stirring great fear in stock market. These are known risks but no one knows the ending, eg when Coronavirus may end.

For uncertain future, a better way is to apply probability investing with optimism strategy, eg buying giant stock at low optimism < 25%, applying multiple entries to fight against unknown future crisis.

Risk of known unknown is investor may be too fearful, dare not take the action of catch the falling knife, also missing the surge when crisis is fading, totally miss the investing opportunity, gift given by crisis.

4) Unknown Unknowns

– Good examples are black swans which no one knows before that and catch most people by surprise after happening, eg. Asian Financial Crisis in 1997 (Forex Crisis), Dotcom bubble (Technology Crisis) in 2000, Gulf War (Political Crisis) and SARS (Virus crisis) in 2003, Subprime Crisis (Property Crisis), Coronavirus Crisis (2020), and future black swan (we don’t know what and when will come, therefore called unknown unknowns).

It is meaningless to worry about sky would fall down (staying at home each day) as one would not able to take any action in stock investing, missing the opportunities. One has to learn to take calculated risks despite the unknown unknowns.

4 Known and Unknown Stock Strategies

For future unknowns in systematic risks at regional or global level and unsystematic risks at business level (eg. management integrity, truthful financial report, etc), both could be minimized with LOFTP Strategies:

L = Levels 1-4 (stock, sector, country, world)

O = Optimism 0-100%

F = Fundamental (Strong / Weak)

T = Technical (Up / Flat / Down)

P = Personal (types of personality)

When we take care of downside in future uncertainties (known unknowns or unknown unknowns), upside in share prices will take care of itself (known knowns and unknown knowns in global giant stocks).

==================================

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

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Filed Under: Stock Market Tagged: , , , ,

Kiasu & Kiasi Crisis Stock Strategy (鱼与熊掌)

Posted on April 8, 2020 Written by
Kiasu Kiasi Crisis Stock Strategy

There are 2 distinct fearful personalities in each person (depending on condition): Kiasu (怕输) and Kiasi (怕死). Kiasu is “Fear of Missing Out” (FOMO), eg. commonly seen in Great Singapore Sales (long queue overnight for certain special offer), afraid of missing the opportunity. Kiasi means “Fear of Death”, safety first in most actions with low risk. Of course, it is possible to have Kiasu and Kiasi together, eg. long queue in supermarket, afraid the food supply may be limited during Coronavirus crisis.

It is not a shame to be Kiasu and/or Kiasi as it is human nature. A smart investor may align one’s unique fearful personality with opportunities in global stock market crisis. This way, the inner potential could be fully maximized to profit from giant stocks at low optimism. Let’s study in more details on both crisis stock strategies.

1) Kiasu Crisis Stock Strategy

This is suitable for contrarian investor with counter-trend investing strategy during bearish stock market, especially when stock prices are far below the intrinsic value, dropping below low optimism <25%. Warren Buffett could be the best example of this type of investor, usually show hands when market is crashed, “be greedy when others are fearful”.

Similar to Great Singapore Sales, when a shopper has only $100 budget, seeing a handbag with 50% discount at $50, may buy 1 first due to fear of missing out (Kiasu) as the opportunity may be on available on that day. It is crucial to reserve the capital as there be another better offer elsewhere or another day with 70% discount.

Contrarian investor is similar to smart shopper, would invest in giant stocks with strong business fundamental with multiple entries. For stock capital of $10k, one may split into several investments, eg (10 x 10%) or (5 x 20%) or (2 x 50%), etc, diversifying over different prices, each entry could be X% apart, eg 5-10% lower each time to justify further investment. This way of average down at low optimism prices would help to get as close to bottom price as possible, even no one would know what will be the lowest price.

Assuming the crisis (buy low get lower) may last for 1-2 years, investing with giant dividend stocks (including giant REITs) with overt 5% dividend yield would help to strengthen the holding power as during this period, one could enjoy 5% passive income (assuming worst crisis may even cut 50% of dividend, left only 2.5%, still higher than bank interest rate of 1+%). When crisis is over (no need to time the market), naturally the investor would enjoy the capital gains when stock prices start to soar, supporting by growing business of giant stocks. Then, contrarian investor may need to plan for when to sell or how long to hold (similar to last few years when global stock markets were in high optimism >75%).

Common failure of this strategy by beginner is to buy weak fundamental stocks at “historical low” price or last 10 years low, which may become lower in future, company may go bankrupt during crisis (eg. certain weak airlines or F&B stocks in Coronavirus crisis), may not have chance to wait for share price or business recovery.

For this strategy to work, contrarian investor requires to invest in a portfolio of giant stocks at low optimism (ideally <25%) with strong business fundamental (following Dr Tee criteria, there are over 1500 global giant stocks). If capital is limited, one may invest in major stock index ETF at low optimism (eg. Hong Kong Hang Seng Index ETF, Singapore STI ETF, China SSEC ETF, etc) which indirectly has diversification over a portfolio of blue chip stocks (although not all are giant stocks).

2) Kiasi Crisis Stock Strategy

This is suitable for trend-following investor or traders, waiting for reversal of share prices from bottom (paying premium of higher prices similar to insurance to ensure price is back to uptrend), still buying at low optimism <25% (but in uptrend price direction). This is integration of trading (trend-following) into investing (waiting for price below intrinsic value of giant stocks).

Safety is important for kiasi traders who could not let the capital stuck in the stock market as regular income (capital gains within weeks or months) is important for short term to mid term trading. Therefore, a stronger uptrend over weeks or months need to be established first (reg. higher highs and higher lows price pattern) before entry.

In case the uptrend or reversal could be a technical rebound, a trader needs to do further deeper market analysis to understand the competing forces of greed (eg. unlimited QE, less cases in Coronavirus, etc) and fear (eg. serious Coronavirus condition, weaker economy and business). For risk management, a trader may apply S.E.T. (Stop Loss, Entry, Target Prices) trading plan, following strictly. When direction is correct, a trader may add more position in the same direction (eg. uptrend prices).

For trend-following investors or traders, the risk of stuck in long winter (low optimism period such as global stock crisis, Global Financial Crisis or even Great Depression) is lower than counter-trend investors, therefore possible to consider growth stocks (little dividend) or some midfielder stocks (mix of growth and dividend stocks), focusing more on capital gains in a more bullish stock market.

==========================

There are about 100 global giant dividend stocks (suitable for Kiasu contrarian investors) and 300+ global giant growth stocks (suitable for Kiasi trend-following investors or traders). It is possible for a smart investor to integrate both kiasu and kiasi strategies together, investing with multiple entries in both bearish and when reversal to bullish stock market with growth dividend giant stocks at low optimism, having the best of 2 investing worlds (鱼与熊掌、实可兼得).

==================================

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

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Filed Under: Market Cycle Investing, Market Optimism, Personal Analysis, Stock Market, Technical Analysis, Value Investing Tagged: , , , , , ,

Grandparents Blue Chip Stock SPH (远虑近忧)

Posted on April 7, 2020 Written by
Blue Chip Stock SPH T39 SGX SPHReit

Singapore Press Holdings (SGX: T39), SPH, is a well-known blue chip stock with 35 years of history of press business. It is popular especially among “grandparents” level of investors as a passive income generator through dividend payment.

In the past (over 20 years ago), there was little competition in this monopoly business, therefore SPH could gain income easily through advertisements with more circulations of hardcopy newspapers. However, in the internet era over the past 10+ years, disruptive technologies have changed the rules of the game, providing more channels of news (mostly free) through webpages, blogs, videos and social media (eg. Facebook).

As a result, number of SPH newspapers readers have been declining over the past decade (while Facebook and other internet users are booming), resulting in gradual falling of business fundamentals (revenue, earning, cashflow, even dividend) during the same period. The share price of SPH has fallen by half from the peak price of $5+/share, supressed further by recent global stock crisis, dropping to only 1/3 of peak price, $1.52/share, the lowest point at least for the past 26 years. Dividend yield is 7.1%, seems impressive (second highest in 30 STI component stocks, just behind Capital Mall Trust) but this could be a value trap.

SPH Historical Stock Prices T39 SGX

A blue chip stock suitable for grandparents time may not be suitable for next generation now. SPH has lost the giant stock title (based on Dr Tee criteria) since 10+ years ago. Long term investing is not simply buy any stock and hold, especially for weaker fundamental stock in a sunset industry (monopoly is not a protection) of press business, buying low in prices would become lower in long term. SPH is a classic example as company never lost money, simply making less profits each year, long term stock investors may suffer huge capital losses if never review the business condition for decade, assuming a stock paying dividend yearly must be worth holding for lifetime.

The high dividend yield (DY = Dividend / Share Price) is mainly generated by share prices falling (1/3) more than falling of dividend payment (1/2) over the past decade. A common mistake of beginner in dividend stock investing is to pursue high dividend yield or simply check company is profitable (SPH has over 5% ROE for the past decade, not a junk stock, despite it is not a giant stock). The understanding of economic moat and business climate is crucial which is disadvantaged to SPH with popularity of internet, full with free news (including when you read this article, no need to pay even 1 cent to SPH).

This negative business cycle would continue, making harder for SPH to improve the financial condition with press business segment, despite promoting digital media over the past few years and reduce the workforce to save cost. 《人无远虑，必有近忧》is a Chinese idiom of wisdom, educating that one needs to have a long term plan, otherwise there might be risks in near future.

SPH new management may know there is a natural limitation in press business (despite considering 101 ways of improvement), therefore a solution way is to diversify into other business. Since SPH with P = Press, therefore it is hard to abandon press business overnight, especially this is an important mission empowered by government to ensure true news are shared with people (instead of internet, sometimes could have fake news).

So, an easy way out is to create second revenue Pillar of SPH with P = Property. Over the past decade, SPH has successfully establish a portfolio of properties (eg. Clementi Mall, Paragon, Seletar Mall, Rail Mall, etc) and even spin off another stock, SPH Reit (SGX: SK6U), to collect rental for some of the properties. SPH Reit is a young REIT with reasonably good business performance but share price is also corrected by 40% over the past 2 months of global stock crisis. In fact, SPH property business contributes to over 50% net profit of company, about 2 times of press business, one day may become Singapore “Property” Holdings.

Besides, SPH also diversifies the businesses to healthcare (eg. Orange Valley Nursing Home), education (eg. Mindchamps) and even Telco (M1 through partnership with Keppel Corp, another blue chip stock which also depends on property business to last through cold winter of oil & gas crisis). However, unlike property business which may be more passive in nature (investment decision), other businesses in different sectors could be out of circle of expertise for SPH, results of diversification have to be proven over time (so far property business is proven to be in right path).

For long term stock investors of SPH who have been making losses (more than 50% capital loss, even if collecting dividend yearly), may be in a dilemma of whether to cut loss (painful) or give SPH a chance to grow in property (proven) and other new businesses (still uncertain) beyond press business. One possible option is to apply “Change Horse” strategy as shared in earlier article, which is to sell a weaker fundamental stock, using the remaining capital to buy another giant stock with strong business fundamental (eg. existing competitors of SPH, internet related giant stocks which have growing businesses with more readers each month) on the same day, as if stock is never sold, just name is changed.

If not, at least SPH stock investor may consider to change P of SPH from Press to Property through SPH Reit (swapping between parent and subsidiary stocks) which focuses on property rental (may not be a giant REIT but performance is better than SPH as a whole). In this way, decade of downtrend in SPH business may be changed to potential decade of uptrend in SPH Reit business (with condition REIT manager is making the right decisions, eg. buying new property at lower price during crisis, etc).

The story of SPH has many hidden learning lessons. Firstly, there are few blue chip stocks which investors could buy and hold for lifetime as disruptive technologies (eg. another grandparents blue chip stock, Comfortdelgro with new challenger in taxi business but condition is more stable than SPH) may change the rule of game or there could be unexpected business crisis at certain point of time (eg. SARS and Coronavirus crisis to airlines sector but this is a short term risk). A smart investor has to regularly monitor the business at least with half-yearly annual reports. Buy a stock means one is in partnership with company doing business together, sharing the pains (if losses or less profits) and fortunes (if more profits which could justify more dividend payment).

Besides, SPH press business is a mirror of some individual who could not control own active job (eg. could be a worker in a declining semiconductor sector or a staff who does not have pay increment for years, etc) as they have been working for decades, not able to change the profession easily. So, if one could learn to convert the active income (salary from a job who may not have a bright future prospect) into 10-20 giant stocks, then literary one has 10-20 “jobs” which could generate money at the same time. The best is these additional incomes don’t need active “work”, therefore it is called passive income with dividend yearly or even quarterly, when holding long enough, potential capital gains due to growing business (with condition focusing in a portfolio of giant stocks, ideally buying low during global stock crisis). If these 10-20 giant stocks could pass the yearly certification process as a giant stock, then an investor may have option to hold for long term or even for lifetime or passing to the next generation as family wealth (this is common for those rich families with investment funds but individual may pass a few giant stocks to the next generation).

Dr Tee is still a long term supporter of SPH newspaper (not stock, but a reader), could not change the habit of reading daily newspaper for several decades. Personally, I hope SPH could continue to be strong in property and new business, so that the press business is sustainable.

So, until SPH becomes a giant stock again (to be proven, see if could pass Dr Tee criteria one day), an investor has the choice to invest in over 1500 global giant stocks, supported by growing business.

In Year 2020, SPH is officially removed from 30 STI index component stocks (investor has to focus only on giant stocks for investing, not just buying grandparents blue chips stocks):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

==================================

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)

Filed Under: Market Outlook, Property Market, Stock Market, Value Investing Tagged: , , , , , , , ,

Compounding Monster of Investing (石破天惊)

Posted on April 5, 2020 Written by
compounding investing coronavirus

The scale of global stock crisis is conditional: whether Coronavirus is short term, mid term or long term. So, we need to monitor the daily new cases of Coronavirus in the world (Singapore would follow the main trend):

World New Daily Cases:
https://www.worldometers.info/coronavirus/coronavirus-cases/

Singapore New Daily Cases:
https://www.worldometers.info/coronavirus/country/singapore/

The virus has a compounding formula of 2X every 7 days (some countries could be slightly faster or slower, 6-8 days), therefore in 1 month with about 30 days, it would have about 4 times of 2X, total 2^4 = 16 times monthly.

The tracking is from Day1 (23 Jan 2020) with about 1000 case in the world (mainly in China) and 1 case in Singapore. We can apply the formula from 23 Jan 2020 to 5 Apr 2020 with about 2.5 months or 10 times of 2X: 2^10 = 1024, approximately 1000 times. Therefore, world just crosses 1 Million cases (1000 cases on Day1 x 1000 times = 1M) and Singapore has just exceeded 1000 cases (1 case on Day1 x 1000 times = 1000 cases).

If this compounding continues, it would double itself every 1 week, eg 2 Millions cases in the world within 1 week, 8 Million cases within 1 month. The average fatality rate is 5% (country dependent, from 0.5% to 10+%, also depends on how comprehensive is the detection of infected cases, especially mid cases or no symptom cases). So, if the growth with 2X compounding is not ending soon, more people in the world would become victims in this health crisis.

The deadly compounding trend may be ended with 2 critical stages. Details of analysis of P1-P5 Coronavirus life cycle, may refer to Dr Tee past youtube video on global stock crisis:

P2) High to Slow Growth

The daily new cases fall from the peak of max daily cases. This would show the transition from high growth to slower growth (lower rate of compounding). Currently only China and Korea have observed this downtrend consistently. Good news is even “Top 5” of Italy, Spain, Germany and Iran are seeing downtrend over the past 1 week, a stronger light at the end of tunnel after 1-2 months of lockdown.

coronavirus stock market

On 3 Apr 2020, there is a surge with over 20k new cases added in 1 day, this is due to 1 time correction added by France for not accounting to cases in nursing homes (previously only for those hospitalized are counted). So, we could not take 3 Apr as peak. Currently no clear ultimate peak is seen for the world, every day is a new peak for the world.

For Singapore, due to cross infections among different international travellers and community infections, the general trend is unfortunately aligned with the world (uptrend with new peak each day). At the point of writing this article, 120 new cases are reported (new daily high) which is not a surprise because the compounding “law” is governing with 2X every 7 days, implying 1000 cases recorded a few days ago could become 2000+ cases by coming weekend, therefore new potential weekly cases of 1000 over 7 days is reasonable to be over 100 daily cases. The worry is next 1 week as it would follow the next tier of “compounding monster” from 2000+ to 4000+ cases until the social distancing could slowdown the spreading of Coronavirus. So, it is right for Singapore government to advise (perhaps should be a “law” as in China and Italy, then it would be labelled as lockdown) to stay at home in Apr as this will be the highest growth rate of Coronavirus, similar to some stock crisis, don’t catch the falling knife by taking unnecessary risks.

US takes the lead as world no 1 in total cases, current uptrend is aligned with the world, each day is a new peak. We need to observe for the first dip, following by 7 days of more consistent downtrend to have a stronger confidence that growth rate is moved from high to slower growth. When cases in US are down, likely the world cases would fall unless new leader in country with high population (eg. India, Pakistan, Indonesia) may continue this world uptrend.

Hopefully, the world may reach a peak new daily case by mid of Apr (could be over 2 Million cases by then), could only confirmed with 7 days of downtrend (observed in most countries in Europe but not yet in US and Singapore and other Southeast Asian countries).

P3) Slow Growth to Zero Growth

After declining from the peak new daily cases (eg. completed in China and nearly for Korea), it would have minimal new daily cases (less than 1% of total cases), considered under control.

In terms of Coronavirus life cycle (P1 – P2 – P3 – P4 – P5 as given in earlier youtube video), here are the countries who take the lead to complete in advance:

1) China (2 months downtrend)

2) Korea (1 month downtrend)

3) Italy (2 weeks downtrend)

4) Spain, Germany, Iran, etc (1 week downtrend)

5) Most countries (less than a few days of downtrend or still uptrend each day)

===========================

So, what is the significance of Coronavirus even one may not worry about health? Well, it would affect stock market and global economy. If Coronavirus may end by summer, then world may follow China economy with V-shape recover, then stock market may experience a rally with support by economic stimulus plans or even unlimited QE (Quantitative Easing or simply “Printing of Money”) by many global countries government.

It means, there is a chance for global stock “crisis” to recover from the flash crash over the past 1 month as the economic crisis is short term. High unemployment rate would gain back the jobs if crisis just comes and go. Consumers after months of lockdown may “revenge” with more shopping (retail sector recovers), more playing (entertainment sector recovers) or more travelling (airlines sector recovers). There is real experience after SARS 2003, world travelling increases due to suppression of demand and supply for 8 months after the outbreak.

However, if the Coronavirus continues beyond summer, the global recession with stock crisis may continue for mid term till 1-2 years later when vaccine is developed.

Of course, if the Coronavirus comes back every winter with a more deadly strain (new mutant), then it may become great depression similar to 1929 for at least 5 years until 2/3 world population are infected, only then the community immunity may stop this virus naturally (similar to Spanish Flu about 100 years ago) but this would be a disaster to mankind.

======================

We could experience the compounding effect of Coronavirus, similarly we may imagine if this is applied in a positive way on growth stock with 2X compounding in share price every few years, it would become 10x or 100x in a longer term. 

There are over 1500 global giant stocks based on Dr Tee unique selection criteria. Some of them belong to this multibagger (3X to over 10X growth of share prices) or high growth stock which one could buy (ideally during a stock crisis) and hold long term or even for lifetime until the growth rate has slower down due to change in business (similar to change in rate on Coronavirus analysis), only then an investor would say farewell to this lifetime partner of growth stocks.

==================================

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)
Filed Under: Market Outlook, Personal Analysis, Stock Market, Value Investing Tagged: , , , ,

World Cup of Global Stock Crisis （危机重组）

Posted on April 5, 2020 Written by
world cup of global stock crisis

In a football game, we need a balanced team with 11 strong players (defenders, midfielders, strikers, goalkeeper), coach, opponent team, referee and audience. Each of them is playing a key role for a successful world cup, highest level of stock investing. Similar for stock investing, the highest level of investing is positioning during global stock crisis, let’s learn how to apply 3 main strategies of dream team.

Defender stocks usually are positioned for passive income (dividend) regardless rain or shine, suitable for all investing at all time but higher yield during crisis. Midfielder stocks usually aim for growth with capital gains and some bonus dividend. Striker stocks may have higher risks but potential return in shorter time is higher when one could take calculated risks.

Goalkeeper is the cash or capital available for stock investing, careful allocation is important. If a team is too defensive, all 11 players would shield around the goal pole (100% cash), then risk is zero but the potential return is also zero (this strategy is possible during high optimism market, take profits by selling stocks and stay risk free, eg over the last 2 years of high optimism market > 75%). In a low optimism market, goalkeeper could be more aggressive, even a goalkeeper may play the role as defender (0% cash, all invested) when opponent (stock market) is very weak (eg. 0% Optimism with global financial crisis).

Coach is in fact each of the investors who is like a fund manager, making the strategic moves for all 11 players, adjusting their roles (more aggressive, more defensive, balanced, 100% cash, etc) based on the condition of stock market (opponent team) which could be different at various timeframes (short term, mid term, long term).

Referee is the investing results, sometimes may declare win or lose, depending on the time of the game (eg. full game or extended investing game in day, week, month, year or never ending game of a lifetime). Some players who violate the rules of stock game (eg. insider trading or fake financial report) would get caught, may be given a yellow / red card or banned permanently from the investing game.

Audience are all the readers of investing article here, who may feel excited, worried, sad or no emotion when reading about stock market. After the exciting investing game is over, audience would be back to normal life, working for others to gain active income. If an audience (reader or learner) is motivated, also taking action (Buy, Hold, Sell, Wait, Shorting) in investing, then the effort of learning will be paid off. If an audience is still an audience (reading hundreds of posts or video daily) without action aligned with own personality, life still goes on, continue the same way. So, to have a positive change in life, one may need to start a positive action.

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So much about the football team, main goal is to motivate beginners to start investing, especially using time (compounding effect) with global stock crisis (buy low for global giant stocks) to change your current life.

There are 3 main strategies during global stock crisis (which falls about 30% over the last 1 month):

1) Dividend Giant Stocks (Defender)

This strategy is more suitable for contrarian investor (investing during bearish stock market, eg in current market). Main objective is to collect high dividend yield >5-10% (acceptable even if dividend is cut by 50%, eg for REITs, still much better than holding to cash with only 1% bank interest rate) through investing in strong fundamental businesses, supported by strong holding power of 1-3 years to face the uncertain crisis.

This method requires multiple entries (for every crisis, eg 10-20% lower prices each time, see my past articles for examples) to average down the price and diversify into 10-20 global giant stocks with at least 3 sectors from 3 countries. For 20 giant stocks (with min 5% dividend yield), assuming 1 giant stock may even go bankrupt (eg. DBS or OCBC, unlikely but assume it happens), this is max 5% permanent loss, which could be compensated easily by holding 1 year with 5% dividend yield.

For value investing, the “cost” of missing the opportunity boat may be higher than buying in falling price because of greedy to buy at the lowest price, eventually untrained investor may either need to pay higher price or totally miss again, buying at just fair price when marketing is recovering.

2) Growth Giant Stocks (Midfielder)

This strategy is more suitable for trend-following investor (possible for counter-trend investor but need to have min 2-3% dividend yield as mid-fielder). The high growth stocks are hard to get low optimism, this requires more patience, when opportunity comes, one may take action, despite the correction in global stock crisis may not be a lot (eg. 20-30%), unlike over 50% price correction in cyclic stocks, but these growth stocks are planned for buy low and hold long term for potential multi bagger (3X – 10X capital gains). Growth stocks investors have option not to sell during the next global financial crisis because the stocks are too good, will be the final 1% stocks to sell unless it is the end of the world (if so, stock market is no longer important to human, therefore no risk at all then).

3) Cyclic Giant stocks (Striker)

This strategy may be considered for shorter term trading or crisis investing (eg oil & gas stocks or crude oil itself, airlines stocks, F&B stocks, etc) with severe price correction during crisis, or for cyclical sectors such as bank, property and technology stocks which follows economic cycles (will fall badly during global economic crisis). Cyclic stocks do not need dividend, therefore risks are higher, more suitable for trend-following, wait for reversal in prices. For counter-trend investing, it is only possible if it is <10% of portfolio or 1 of multiple entries (easy new entry may wait for extra 20% dip before entering again). Crisis investing stocks would suffer real damage in business but should be at sector level, not only on individual stock.

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A smart investor who hopes to enter the bearish stock market right away with less risks through dividend stock, may also combine different Ein55 dividend stock investing strategies developed by Dr Tee, eg:

1) Growth Dividend Stocks

– collect dividend during low optimism, then enjoy capital gains when crisis is over.

2) Cyclic Dividend Stocks

– crisis giant stocks with great price correction and high dividend yield

3) Defensive Dividend stocks

– Dividend stocks with defensive business and stable stock prices

4) Undervalue Dividend Stocks

– dividend stocks with strong assets in property and cash but share price is less than 50% of value with regular dividend payment

5) Lifetime / Long Term Dividend Stocks

– Some may compromise dividend for higher and more stable growth, especially when planning for longer term investing or even lifetime investing (buy low and hold for life).

There are over 1500 global giant stocks, including 100 global dividend giant stocks based on Dr Tee criteria. An investor (coach) just needs to choose 10-20 of them to form a football team (own stock portfolio) to join the current world cup of stock crisis. Winner would gain the highest title of stock investing with potential high return. However, it requires practices and training to achieve this level, eg. playing in a state investing game first (minor stock correction) or country investing game (major stock correction).

Don’t continue to be an audience to cheer for your favourite team or do nothing throughout the game of investing. Instead, join the game as a coach now to form your own stock investing dream team, crisis is usually the best timing to recruit the best stock players who may be discounted by more than 50% in market prices.

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Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 member.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)
Filed Under: Market Optimism, Personal Analysis, Stock Market, Value Investing Tagged: , , , , , ,

Temasek Acquires Crisis Stock Keppel Corp (趁虚而入)

Posted on April 3, 2020 Written by
Temasek acquires Keppel Corp BN4 stock

Temasek has offered partial acquisition to Keppel Corp (SGX: BN4) shareholders at the price of $7.35/share up to 51% ownership over 1 year period (with some conditions applied). Since this is not a full acquisition, some investors may be confused of what is fair price for Keppel Corp. Let’s study this acquisition offer in details.

Temasek owns 20.45% of Keppel Corp, intending to purchase shares owned by remaining shareholders (100 – 20.45% = 79.55%) to top up to 51% (still need 51% – 20.45% = 30.55%). So, it is partial acquisition of 30.55/79.55 = 38.4%. It means for every 1000 shares, 384 unit will be acquired.

The offer price of Temasek at $7.35 is about 20% premium over the average price before acquisition, aligned with several other acquisitions in Singapore. However, it only has 38.4% power, not the same as 100% power as other full acquisition (eg. Breadtalk current acquisition offer of $0.77, price would surge near to this price overnight after the announcement). Assuming the Keppel Corp share price is $5/share (on certain day), the theoretical share price after 38.4% partial acquisition = $5 + (7.35 – $5) x 0.384 = $5.90/share. Reader may replace this equation of $5 share price with any latest share price of Keppel Corp before acquisition.

Over the past 1 month of global stock crisis, Singapore stocks fall by about 30% in average but Keppel Corp only falls about 20%, aligning with 38.4% potential acquisition by Temasek which is about 1/3, therefore the stock corrections is also reduced by about 1/3 from 30% to 20%.

It means the global stock crisis still has about 60% impact on Keppel Corp prices. Therefore, an investor has to make decision mainly based on global stock crisis and current stock market condition with Keppel Corp value, not to assume price would recover to $7.35/share price eventually.

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Keppel Corp is a diversified corporation with 4 businesses: offshore &marine, property, infrastructure and investment. The 2 main pillars are Property (Keppel Land, contributing to about 50% company profits) and Oil & Gas (Keppel O&M, main source of losses over the past few years). Over the past 5 years after the oil price fell from $100 to $27/barrel, Keppel Corp suffers directly as main clients reduce the capital expenditure (eg. oil rigs), therefore Oil & Gas becomes a losing segment. 

Since 2015 crude oil crisis, Keppel Corp has temporary lost the giant stock title, currently a marginal giant (likely will become giant stock again after oil & gas sector recovery). Luckily Keppel Corp still has 50% earnings from Property (eg. Keppel Land and Keppel Reit), even Oil & Gas is a loss for several years (recovering to small profits in last 1 year), the entire company as a whole could still make a profit. Compared with competitor or sibling, Sembcorp Marine (SGX: S51, also owned by Temasek through Sembcorp Industries) which has full risk exposure to oil & gas crisis, losing money for several years, resulting in share prices falling from $5 to $0.70 (last 17 years low).

Some may think it is “cheaper” to invest in Sembcorp Marine stock (85% correction) compared to Keppel Corp stock ($13 falling to $5/share during oil & gas crisis, about 60% correction). This comparison is only valid if both companies are giant stocks (which are not) because “crisis is not opportunity” if business fundamental is weak, eg for the case of Sembcorp Marine. For Keppel Corp, it is still a 50% giant stock due to strong property business. Therefore, investor of Keppel Corp is actually investing in value of Keppel Corp property (main value) while taking advantage of falling share price (due to Oil & Gas crisis). It was a good move in year 2015 (beginning of oil & gas crisis) for Keppel Corp to offer full acquisition of Keppel Land which 100% profits of property business goes to Keppel Corp, offset the losses in Oil & Gas segment in Keppel O&M.

Assuming Temasek could successfully own 51% of Keppel Corp by end of 2020, it is a full control of company. This may allow possibilities of strategic merging of Temasek subsidiaries companies (eg. Keppel O&M and Sembcorp Marine) or restructuring of Temasek companies, eg. Keppel Corp and Sembcorp Industries (Temasek nearly has 50% control), etc, to maximize the asset values.

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During crude oil crisis with Keppel Corp at low optimism prices, Temasek leverages on crisis to have majority control of Keppel Corp at reasonable low price of $7.35/share. This also provides an option for Keppel Corp investors to sell for 20% profit. However, the global stock crisis has disturbed the plans as prices of Keppel Corp are falling even lower than before acquisition news. 

Analysis on Keppel Corp is beyond stock and Temasek, also requires understanding of property market and crude oil commodity market. So, it is a stock with complicated interactions of market signals, reflecting in final share prices. 

Temasek acquires Keppel Corp BN4

Here is a special Ein55 style, 50% Discount Method for investing in Keppel Corp during crisis (with or without Temasek acquisition) with multiple entries to fight against unknown market crisis ahead. Assuming $10 is a common high level prices (occurred during when economy and crude oil market are bullish), an investor may apply 50% discount in prices each time before each multiple low due several unforeseen market crisis.

$10 = High Level Price (potential future selling price level)

$5 = Crude Oil & Stock Crisis (3 times in 2009, 2016, 2020) after 50% discount x $10

$2.50 = Global Financial Crisis (17 years low) after another 50% discount x $5

$1.25 = Great Depression (20 years low) after another 50% discount x $2.50

This is a non-linear version of multiple entries for very conservative investor who hopes to buy low but afraid of prices could get lower. Assuming all the crisis come (hopefully not), this is average price after 3 entries (like Keppel Corp with property pillar could still survive):

($5 + $2.50 + $1.25) / 3 = $2.92

This is lower than using linear average down method at low optimism (assuming 3 entries with $1 lower each time):

($5 + $4 + $3) / 3 = $4

Each method (linear or non-linear 50% discount) has its benefits. Linear method is more likely to achieve in practical market, for those who wish to reduce downside risk through averaging (eg. 3 times x 33% capital). Non-linear method is for very conservative investor, demanding 50% discount each time before willing to take out precious cash from the pocket for investment. During the long holding period (could be 1-3 years, depending on severity of crisis), Keppel Corp investor may be given an average of 4-5% dividend yield (past 10+ years record), assuming the dividend is also cut by 50% due to crisis, one could still get about 2% dividend yield which is higher than fixed deposit in banks with 1% interest rate. After the crisis is over, assuming the average entry price is only $5 (only 1 crisis experienced), an investor may not need to sell at $10 average high prices for 100%, could even sell near to Temasek fair acquisition price of $7.35 which is over 40% higher than $5 price.

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Charlie Munger (partner of Warren Buffett) said the big money is not in the buying and selling, but in the waiting. Global stock crisis may happen only every 5 to 10 years. Similar to a lion ambushed, waiting patiently for target, when opportunity comes near, only then strike for higher chance of winning. It is the same for current global stock crisis, for investors “ambushed” for many years, it could be the right time to plan for a strategy to take action in stocks.

Frankly speaking, there are over 100 global giant property stocks and 44 global oil & gas giant stocks (based on Dr Tee criteria), which are much stronger than Keppel Corp. Some of these giant stocks are also falling in prices 20% – 50% recently, “Crisis is Opportunity” investing in these growing business (value) with significant discount in prices.

There are at least 26 Temasek / GLC stocks in Singapore including Keppel Corp, controlling shareholder with 15% or more ownership directly or indirectly (investor needs to focus only on giant Temasek stocks):
Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), Singapore Airlines (SGX: C6L), SIA Engineering (SGX: S59), Singapore Exchange (SGX: S68), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Sembcorp Marine (SGX: S51), Olam (SGX: O32), CapitaLand (SGX: C31), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascendas Reit (SGX: A17U), Ascott Hospitality Trust (SGX: HMN), Ascendas Hospitality Trust (SGX: Q1P), CapitaLand Retail China Trust (SGX: AU8U), Ascendas-iTrust (SGX: CY6U), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), Keppel DC Reit (SGX: AJBU), Keppel Infrastructure Trust (SGX: A7RU), Mapletree Logistics Trust (SGX: M44U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree NAC Trust (SGX: RW0U).

Temasek stocks portfolio also affect about 15% of STI index stocks, which has strong impact on Singapore stock market. Here are 30 STI component stocks:
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), HongkongLand (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

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Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)
Filed Under: Market Outlook, Property Market, Stock Market, Technical Analysis, Value Investing Tagged: , , , , , , , , , , ,

Wait for Durian to Drop in Stock Crisis 榴莲忘返

Posted on April 2, 2020 Written by
durian stock crisis

Investing in global stock crisis is similar to wait for durian to fall (best if other people’s durian tree). It is fine to wait for durians to drop, eg. DBS Bank (SGX: D05) below $10/share or giant stocks below low optimism level, but if there is a small durian (eg. DBS below $15/share) comfortable to oneself along the way (so low that everyone could reach), may take one first, no need to wait for the biggest durian in the world as luck may not be there all the time (eg. buying at the lowest price).

This way, at least when the durian waiting game is over (Coronavirus fear), each investor has a gift from heaven for investment during crisis.

DBS Bank (SGX: D05) below $10/share or OCBC Bank (SGX: O39) below $5/share is as if durian drops down, some “abnormal” contrarian investors would start to enter. Every 10+ years, this DBS durian only has chance to drop, currently not ripe yet. Other giant stocks fruits (may not as tasty as durian) start to ripe already, hanging low, waiting for investors to pluck with a low price. But some worry the price of future durians may drop further, so still waiting for lower price. Question is durian may stop to drop one day, no one know when is the day, so need to take calculated risk at certain point, otherwise need to accept possibility of missing the opportunity boat one day.

Usually summer time around Jun-Aug is durian season here, perhaps implying more opportunities then. Coronavirus may end by summer for stock market to recover or pandemic may continue longer to cause global financial crisis. Stock investment is similar to wait for durian, must eventually take action (Buy, Hold, Sell, Wait, Shorting), otherwise one may be still empty handed after the season is over (榴莲忘返).

Cash is king when used at the right time. The key is to define the “right time” for everyone, aligned to own personality.

1) Counter-trend investors (buy low sell high) may start to take action in bearish stock market below low optimism < 25%.

2) Life-time investors (buy low & hold for life time) may want to wait for Level 3-4 (eg US) to fall to low optimism or even until global financial crisis happens (eg GDP declines over 10% in many countries).

3) Trend-follower traders or investors may wait until the durian feast is over, there will be still leftover due to over supply, not in a hurry to join the bearish stock market, wait for the trend to reverse first before long the market. Some traders who could not wait till summer, may want to collect “junk” durian by selling to others (shorting at junk stocks in bear market) to make profit.

Despite many global giant stocks are at low optimism (not yet for DBS), but Levels 3 (country, eg. US) and Level 4 (world) stock market are not yet at low optimism (but trending down again this week), so it is prudent to save silver bullets but need to have a plan to trigger it, so that will get something when stock hunting game is over.

Remember to ensure durian tree will not fall first (business fundamental is strong, won’t go bankrupt easily) during the thunder storm (economic crisis), otherwise no more durian in future, investor may also get injure as buy low for weak fundamental stock may get lower or get zero eventually.

So, which type of durian are you waiting to drop? D24 (DBS) or Mao Shan Wang or any global giant durian?

There are 30 Banking & Finance Stocks in Singapore including DBS Bank (investor has to focus only on giant stocks for investing):
AMTD IB OV (SGX: HKB), B&M Hldg (SGX: CJN), DBS Bank (SGX: D05), Edition (SGX: 5HG), G K Goh (SGX: G41), Global Investment (SGX: B73), Great Eastern (SGX: G07), Hong Leong Finance (SGX: S41), Hotung Investment (SGX: BLS), IFAST Corporation (SGX: AIY), IFS Capital (SGX: I49), Intraco (SGX: I06), Maxi-Cash Finance (SGX: 5UF), MoneyMax Finance (SGX: 5WJ), Net Pacific Finance (SGX: 5QY), OCBC Bank (SGX: O39), Pacific Century (SGX: P15), Prudential USD (SGX: K6S), Singapore Exchange (SGX: S68), SHS (SGX: 566), Sing Investments & Finance (SGX: S35), Singapore Reinsurance (SGX: S49), Singapura Finance (SGX: S23), TIH (SGX: T55), Uni-Asia Group (SGX: CHJ), UOB Bank (SGX: U11), UOB-KAY HIAN HOLDINGS (SGX: U10), UOI (SGX: U13), ValueMax (SGX: T6I), Vibrant Group (SGX: BIP).

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Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)
Filed Under: Macroeconomy, Market Optimism, Stock Market Tagged: , , , , , , ,
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