Acquisition of Undervalue Property Stock (Wheelock Properties) by Parents / Grandparents

Posted on July 20, 2018 Written by
Wheelock Properties
In the last 5-day Ein55 class in July 2018, a student submitted homework on a portfolio of giant property stocks in Hong Kong including Wharf Holdings (HKEX: 0004). The major shareholder is another giant stock, Wheelock & Co (HKEX: 0020) which also own an undervalue Singapore property stock, Wheelock Properties (SGX: M35).
 
Similar to many other Singapore property stocks, Wheelock Properties has been undervalue (Price to Book ratio < 1) for many years, as much as 40% discount at one time. Besides, the company has not been appointing a CEO since 2012 as there is little activity for expansion, a strong signal of potential acquisition.
 
In Jan 2016, share price of Wheelock Properties dropped to around $1.35, below 25% Optimism, an excellent opportunity for acquisition by major shareholder. The opportunity was missed, share prices went up for last 2 months but again corrected down over the past few months from $2.09 to $1.55 after the global stock market correction, as well as 8th round of property cooling measure in Singapore, price was less than 30% Optimism. This time, the parent company from Hong Kong, Wheelock & Co is not hesitating anymore, showing hands to propose the acquisition at low price. With full ownership of Wheelock Properties, especially after the development, all the undervalue assets could give much more return to the major share holders.
 
Although an investor may be too late now to act on recent news with acquisition of Wheelock Properties (SGX: M35), but one could still consider the parent stock, Wheelock & Co (HKEX: 0020), which is much stronger and still undervalue with 50% discount in Price to Book. The grandparent stock, The Wharf Holdings (HKEX: 0004) is also as strong. However, patience is required for these undervalue asset to appreciate. From Optimism and Fundamental Analysis, Wheelock & Co (HKEX: 0020) is the best choice of all 3 generation of stocks, having undervalue assets, moderate Optimism (39%) and very strong fundamental with active businesses. There are many other undervalue property stocks in Singapore, much undervalue and stronger in fundamental than Wheelock Properties.
 
There are close connections among regional stock markets (Singapore, Hong Kong, Malaysia, etc), especially for property stocks, either through common major shareholders or family own businesses. Therefore, when an opportunity is missed, an investor may seek the next best opportunity by understanding the company structure to understand the children (subsidiaries) or parents/grandparents (major shareholders stocks).
 
For Ein55 graduates, you could learn the advanced strategy for regional property stocks and other undervalue stocks in the next charity course on 20 Oct 2018 with Discounted NAV Stocks, Ein55 Mentors Chye Tin and Isabel are busy with the preparation of course notes and new case studies (different from previous DNAV course). Details will be email to Ein55 coaching students about 1 week before the course, if there are seats available, then we will share with remaining graduates (you may contact Dr Tee if invitation email is not received and interested in joining this charity course).
 
For general public, you may learn about undervalue property stocks with discounted asset strategy from Dr Tee free 4 hour course, register next course in www.ein55.com
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Filed Under: Uncategorized Tagged:

Food Chain of Stock Market (弱肉强食)

Posted on July 18, 2018 Written by
Food chain of stock market
In the nature, there is always a food chain, only those fittest ones could survive in each position. Sharks could swallow small fishes which eat little shrimps.
 
Similarly, in the food chain of stock market, institutional investors (big sharks) could determine the mega direction of stock prices, while retail traders (small fishes) follow the trend of stock prices, left behind speculators (little shrimps) who react to the uncertain daily market. Size is power, usually little shrimps are sacrificed, lose out in speculative stock market, especially when a stock is being manipulated.
 
Blumont in the penny stock crisis a few years ago was a good example. The big sharks (big boys) started to pushed up the stock prices, then small fishes (retail traders) who follow the uptrend could buy high sell higher to make money. Eventually when the share prices were manipulated, pushed up 100 times, it attracted some little shrimps (speculators) who just want to get rich quick but ending up a great loss when the big sharks start to sell all the shares, following by clever small fishes (traders) who follow the trend to get out with some gains or little loss, while the ignorant speculators continue to hold as long term investor when making a loss, ending up losing 99% of stock value, holding until today without clear understanding what went wrong.
 
There are many other similar examples of food chain in stock market (dotcom bubble in year 2000), property market (subprime crisis in year 2008) or even Bitcoin (from rally in year 2017 to crisis in 2018). There are many valuable past lessons which could be learned from food chain of stock market:
 
1) Big funds with smart investors could take the lead in investment markets but could also suffer when there is a global financial crisis which is a disaster in the world of nature. However, smart investors are usually longer term in holding or having strong fundamental business with sufficient past profits to last through the cold winter. The chances of survival is high.
 
2) Retail traders are smaller in size but if one could learn to follow the direction of money flow, sensing the potential market risks, chances of survival is also high but one has to be very flexible, including cutting loss when market direction is reversed.
 
3) Speculators could make a lot of money sometimes but high risk high gain strategy could get burnt eventually. Even if one could make many small profits, one big risk could wipe out all the past earnings when falling into a crisis without proper diversification. The worst is the stock invested (speculated) may have weak fundamental, one could lose all the fortunes with speculative investment which is worst than gambling.
 
A small shrimp may not necessarily be the loser in food chain of stock market. An investor with small capital could outsmart big funds if one could buy much stronger fundamental stocks in a portfolio, able to wait patiently to buy low and sell high (for cyclic stocks) or hold long term (for growth stocks) with market optimism, following traders to ride the trends in stock prices.
 
Learn from Dr Tee to invest & trade giant stocks with small capitals. Register 4hr free stock investment course here.
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Filed Under: Stock Market Tagged:

Key Learning Points from Ein55 PA Course on Personal Action

Posted on July 15, 2018 Written by
Learning the best stock trading or investing methods is still insufficient. One has to take personal actions with systematic strategy, aligning to own personality. Ein55 graduates learned from Mentor James Hon on PA course #4: Personal Action. Here are the key learning points:
 
1) Alexander Elder: Beginners focus on analysis. Professionals operate in a three dimensional space: Sound Psychology, Logical Trading System & Effective Risk Management Plan.
 
2) Apply Systematic Approach: Professional Traders condition themselves to avoid acting emotionally in situations that raise their stress when they need to stay calm.
 
3) Good Trader Behavior:
– Find the System that suits me.
– Understand the System’s statistical edge through experience.
– Experience develops confidence [endurable].
– Confidence assures discipline [persistence].
– Discipline is the Holy Grail.
 
4) It is to look inward to understand who you are:
– Are you a Trader? Are you an Investor?
– To find a system to match your personality.
– To understand your risk tolerance so you will trade with a calm state of mind – your ability to manage your emotions, aka, be detached.
– To develop your personal trading plan with proper risk and money management.
– To develop your enduring confidence in your own system that you will follow consistently.
 
5) Take Action now: No journey of 1000 miles can be made without the small steps ; no river or sea can be formed without the streams.
 
For general public, you may learn from Dr Tee on applications of PA (Personal Action of Buy, Hold, Sell, Wait, Shorting) in stock market, registering 4hr free stock investment course: www.ein55.com
 
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Filed Under: Personal Analysis Tagged:

Century Investment Opportunity in US China Trade War

Posted on July 12, 2018 Written by
The US China trade war has become real and escalating to a bigger scale with time. As a result, global stock markets suffer, including China Shanghai index is at low optimism < 25%. US is the only major economy which still has bullish stock market (S&P500 is still above 2700 points) for short term. Other global stock exchanges in Asia, Europe, etc, are bearish in short term, global investors are worrying if this may trigger the next global financial crisis.
 
China has several lose-lose options to fight against US, including depreciation of RMB (inflation would be rising then, a potential monster for China) and the worst case, selling or dumping of US treasury bond, both elephants of US and China would get injures this way when global bond market may be crashed.
 
China starts to understand the consequence of depending on external markets after joining WTO about 20 years ago. It gains more foreign capitals but lose the strong control as last time. In a longer term, China has to form stronger alliance with other countries such as Europe, South-east Asia, etc, One-Belt-One-Road project is moving in the right direction but not timely for current political crisis. China also needs to speed up internal capability development in advanced technology (eg semiconductor, high speed computing, AI, 5G, etc), financial strength (currency, stock, etc), military, and ensure sufficient critical agricultural products such as soya bean (start to grow itself but not enough to cope with current demand if supply from US is reduced during trade war).
 
Every 100 years or so, there is usually a change in super power at country level (eg. from Spain to British to America over the past few hundred years), there is a strong trend for China to emerge as the next challenger for US as No 1 economy after unsuccessful rise of Japan and Europe over the past few decades. In the ancient time, real wars may be occurred before the new super power could take control. In the modern time, the “war” could be more complicated: political or financial (trade, economy, stock, currency, bond, commodity, etc) but the consequence could be as severe as real war.
 
Crisis is usually an opportunity, especially at country (Level 3) and world (Level 4) levels. A stock trader and investor may position differently to profit from this once a century trade war between 2 super power.
 
As a trader, trend following is crucial. To long (buy low sell high), the only stock market with higher probability is US. If not, shorting (profit when share price is falling) could be a higher probability trading for other global stock markets in short term. Alternatively, a trader has an option to wait patiently for the recovery of global stock market including Singapore.
 
As an investor, not everyone could capture the falling knife in share prices, buying strong fundamental stocks at lower price as it still has the short term momentum which may drive lower. A smart investor has to compare the low and high of individual stock (Level 1) with the low and high of mega stock market (eg. indices, Level 3). Optimism strategies can be applied for relative comparison of stocks at Level 1 (individual business), Level 2 (sector), Level 3 (country) and Level 4 (world).
 
Learn from Dr Tee to position in stocks with this century investment opportunity from US China trade war. Register a free 4 hour course.
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Filed Under: Macroeconomy Tagged:

5 Strategies in Property Stock Investing

Posted on July 11, 2018 Written by
Property Stock Investing
Property stocks are usually highly cyclic as it is subjected to political economy (eg. government cooling measures), project duration (TOP) and economy cycles (demand vs supply). At the same time, property market has gradual growth of about 2-4% over the decades, supporting the growth of property stocks. More importantly, passive incomes through dividend from property rental is a bonus.
 
There are 5 main strategies in Property Stock Investing or Trading:
1) Cyclic Investing (Buy Low Sell High)
– Suitable for cyclic property stocks, especially for penny stocks or small cap stocks which are more volatile. The capital gains could be tremendous.
 
2) Dividend Investing (Buy Low & Hold Long Term)
– Suitable for passive income through regular dividend payment, similar to landlord of a property, collecting monthly rental consistently despite the up and down in property price. The key is to buy low to maximize the dividend yield (for property stocks) or rental yield (for property).
 
3) Growth Investing (Buy Low & Hold Long Term)
– Suitable for growth property stocks, usually are blue chips with strong fundamentals to support the long term growth.
 
4) Momentum Trading (Buy High Sell Higher)
– Suitable for short term trading of property stocks during bullish economy but full compliance of exit strategy is required when uptrend has ended.
 
5) Undervalue Investing (Buy Cheap Sell expensive)
– Suitable for value investor who view property stocks as asset, buying at price much below the net asset value, selling when price is above valuation in future. Patience is required for this conservative strategy.
 
For all the 5 strategies in property stock investing to perform well, the common requirement is to buy only giant property stock which has strong fundamental.
 
If you are in Singapore, learn from Dr Tee through 4hr high quality stock and property investment course (free), register in www.ein55.com. First come first served till tickets are sold out).
 
If you are in overseas, learn through video course (75% discount is given, only $25 now) by Dr Tee.
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Filed Under: Property Market, Stock Market Tagged:

Recovery of Singapore Property Market

Posted on July 6, 2018 Written by

Singapore property market

Singapore property price has recovered steadily, current Optimism (1 Jul 2018) is 59%, comparing with last quarter results of 50% optimism on 1 Apr 2018. If the same strong rates of recovery continue, especially with speculation of property market without further cooling measures, Singapore property could exceed the critical 75% optimism (selling zone) in about 2-3 quarters, reaching 100% optimism peak in probably 1-2 years. By then, bubble will be back to Singapore property again, a potential high risk for investor who needs to hold for a few years due to property tax.

The past 7 rounds of cooling measures by Singapore government is only political economy, having limited correction on Singapore property market.  When the fear has subsided, greed will come back to buy high sell higher in property market.  Property developers have been rushing over the past 2 years to bid for higher land price for property development, implying the future property has to be sold even higher for developers to make profits.  However, when a true crisis comes, when many people lose the jobs, lose money in stocks due to falling down in prices, the fear could be back to property market again, the next correction could be significant.

In the next global financial crisis, both Singapore stock and property markets likely will drop to low optimism again, this will be great opportunity to buy & hold for long term investing, may not need to sell high in future as property is defensive in nature.

I was busy with teaching of Ein55 class last night, did not know that last night government has started the 8th round of cooling measure for Singapore property after I wrote this article. Government tries to slow down the growth of property market, implying property investment would be more suitable for longer term investing. There will be more opportunities in property stocks which trader and investor could still benefit from both the cyclic and growth natures of property market.

Learn from Dr Tee workshop to position in current property market, as well as property related stocks, profiting from the next global financial crisis. Register here: www.ein55.com

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Filed Under: Property Market Tagged:

Crisis Stock Investing – Buy Low Sell High (Not Buy Low Sell Lower)

Posted on July 5, 2018 Written by
Crisis Stock Investing
Crisis stock investing is attractive to buy low sell high with potential huge capital gains when share prices recover one day. Here are a few general rules to follow:
 
1) Capital allocation less than 10% (striker position in a portfolio) as the investment is higher risk to exchange for higher potential gains.
 
2) Before Buy Low, ensure the stock is still a giant stock with reasonable fundamental (accepting the facts business could decline over the past few years due to crisis), eg positive earning or cashflow, despite in declining mode.
 
3) Ensure it is a higher level induced crisis, eg. sector correction (L2), country crisis (L3) or global financial crisis (L4). If it is only a business crisis for individual stock (L1) while the competitors are healthy, do not buy low as the company could bankrupt eventually, one could lose all the investment this way. Even a stock is traded at 1 cent per share (previous high could be $1), it is still expensive as it could drop to $0 value or price.
 
For Ein55 graduate, I have posted the details of Ein55 strategies (quantitative) for crisis investing in Ein55 graduate web forum under thread of “investing strategies” – “Crisis Investing Strategies”, specifically on What to Buy & When to Buy.
 
For general public, you could learn more about crisis investing at Levels 1-4 from Dr Tee free course, register here.
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Filed Under: Uncategorized Tagged:

Singapore Car COE (Cat A) at Low Optmism

Posted on July 4, 2018 Written by
Singapore car coe
A smart investor may buy Singapore car COE similar to investing. COE price in Singapore has been bearish in Singapore over the past few years, although one could not “short” at COE but it is possible to wait to buy low for car/COE. Existing car owner may scrap the old car and sell back remaining COE at higher buying price last time, buying new car at lower COE.
 
Singapore car COE Cat A of $25000 may be considered Low Optimism <25% if past $1 COE is considered a very rare case which may not be repeatable. More conservative car buyer may consider to buy when COE falls below $15000 at even lower optimism supported by potential bearish stock or global financial crisis.
There are 3 possible cases with 3 unique strategies:
1) Current car owners who have renewed car COE already at higher price. They may scrap the car and get back COE at higher price when purchased last time. Buy new car with lower price.
2) Current car owners who will renew the car COE, similar to investing in stock at low optimism, since the trend is bearish, there is room for further correction. It is not wrong to buy new car or renew COE at current low optimism price.
3) New car buyer, current price discount is only for COE, not yet for new car as economy is still not bearish. With enough patience, it is possible to get car with Cat A COE < $20000.
 
Either buy car or buy stock, there is something in common: buy low. Always remember the principle of shopping when investing: Price is what you pay and value is what you get. Learn from Dr Tee on how to get high value investment with low price.
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Filed Under: Value Investing Tagged:

4 Positions of Economy vs Stock Market

Posted on July 4, 2018 Written by
Economy (master) and stock market (dog) is similar to master walks the dog, now dog is behind the master who is walking faster. When both master and dog are slow, then it will be a concern, regardless who is ahead
 
There are 2 relative positions (behind/ahead) with 2 overall paces (fast/slow) with 4 scenarios of economy vs stock market:
(1) Bullish market – master (economy) could be ahead/behind stock (dog), while both are walking at faster rate
 
(2) Bearish market – master (economy) could be ahead/behind stock (dog), while both are walking at slower rateeconomt
 
Now could be scenario (1) bull market with economy ahead of stock market but if the dog is too slow until the master is also slowed down, it could become scenario (2), turning from bullish to bearish.
 
Learn how to position in these 4 scenarios of economy vs stock market, register for free course by Dr Tee.
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Filed Under: Macroeconomy, Stock Market Tagged:

High Probability Investing with Optimism Strategies

Posted on July 3, 2018 Written by
High Probability Investing with Optimism Strategies
When most people feel that it is the best time of economy and stock market, then the chances of stock market crash or global financial crisis would be high. Let’s look back the past market peaks in years 2000 (before dot com bubble) and 2007 (before subprime crisis), the market crashes always happened after an euphoric stock market with support of bullish global economy.
 
Feeling is qualitative (correct in principle or direction but not measurable), may not be suitable for stock investing. A better way is to apply a quantitative method of High Probability Investing with Optimism Strategies. Currently over 75% Optimism for US and world stock market, probability of downside (75%) is more than upside (25%). When we play a poker card game with possible numbers between 1-10, when your opponent has card No 7, your chance of winning (from possible No 1-10) is not high as the chance of getting No 8-10 is only 30% (3/10).
 
Even a player may not know what is exactly the No of next card, one could apply probability over several chances (not having only one chance to win all or lose all), the winning rate would improve accordingly with larger number of trials. This is how most insurance stocks and casino stocks could have rising share prices over longer term, supported by a profitable business with a game of probability, even future is uncertain.
 
This is the same for investing, even one may not know exactly when a market could reach a peak or crash eventually, if one could master these successful factors of success, high probability investing could be achieved:
1) Diversify over 10 giant stocks with strong business fundamental
2) Buy low optimism stocks aligned to level 1 (stock), level 2 (sector), level 3 (country) and level 4 (world). Sell when optimism is high.
3) Follow market trend in actions of entry and exit
4) Mind control: be fearful when others are greedy, be greedy when others are fearful
5) Money management: allocate fund with unique investing clocks for cash, stock, property, commodity, forex, bond, etc.
 
Even we may not know exactly when the global stock market may crash (no one could do so unless the person predicts everyday that “today market would crash”), we could understand that the remaining days of bull market are limited, exit strategies are crucial now unless the stocks on hold are defensive growth stocks for long term investing.
 
Don’t apply “Hope Strategy”, buying a stock and hoping for the best outcome. Use Probability Strategy instead, making the right decisions aligned with high probability factors mentioned above.
 
Learn from Dr Tee FREE 4hr stock investment course in Singapore on High Probability Investing with Optimism Strategies + FA (Fundamental Analysis) + TA (Technical Analysis) + PA (Personal Analysis). Take Action to Register: www.ein55.com
 
If you are busy or living outside Singapore, sign up for video course (75% discount, only $25): https://www.investingnote.com/store/products/discover-giant-stocks-value-investing-strategies
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Filed Under: Market Optimism, Stock Market Tagged:
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