Dr Tee (Ein55)

Actions on High Dividend Blue Chip Stocks (Example on Singtel)

Posted on July 21, 2018 Written by Dr Tee (Ein55)

The decision to buy high dividend blue chip stocks (eg. 5-6% dividend yield for Singapore Telco and REITs, etc) depends on 3 main strategies which have to be aligned to 3 personalities.

Here is an example of Singtel (SGX: Z74), a strong blue chip in Singapore, current share price at $3.31, falling nearly 25% from $4.30 / share since a few years ago, dividend yield is about 5.3%, Optimism is 28%. Let’s learn to take action (Buy / Hold / Sell / Wait / Shorting) based on different unique personality.

1) Trader for short term capital gains

– Singtel share price is still a falling knife (although not as sharp as M1 and Starhub which dropped more than 50% in share prices) in short to medium term stock prices, therefore may not yet a good buy for traders who need support of strong uptrend. Singtel share price is affected in short to medium terms by Level 4 (global stock market weakness), Level 3 (weaker Singapore STI index) and Level 2 (bearish Singapore Telco sector, including Starhub and M1), despite the Level 1 business is still strong for Singtel. Although current short term bearish stock market supports shorting (profit from falling price), usually a stable dividend stock with strong fundamental may not be a good choice for shorting.

Possible Action: Wait.

2) Investor for long term capital gains

– Possible to be a contrarian investor to buy low for Singtel (it was less than 25% Optimism when price is nearly $3, even it may get lower in share price, long term holding would have high chance of winning. The concern is more on short to medium term share prices correction, especially global / US stock market is still at high optimism, there is a potential threat of global financial crisis, it may not be wise to hold a stock unless it is defensive with high growth in nature. Singtel is considered a defensive stock but a slow growth stock.

Possible Action: Wait.

3) Investor for long term passive income

– Since the objective is to collect dividend, falling in share prices have exchanged for higher yield for Singtel (5.3% currently). Singtel fulfills the criteria of a dividend stock with stable business (despite slow growth) with stable free cashflow and consistent dividend payment. The critical consideration for passive income investor is on the overall return. If one has $100k capital, is it satisfied to get $5.3k annual return (regardless of up and down in share prices)? What if Singtel share price drops further, yield goes up to 8%, will an investor regret of not able to get $8k dividend? So, the decision depends on reward expectation or greediness of an investor. If compares with bank interest rate (1-2%), property rental (2-3%), even current moderate yield of 5-6% dividend stocks are considered better. In general, the spread between yield of blue chip dividend stocks (5-6%) and risk-free investment (eg. 4% for CPF, 2% for Singapore Saving Bond) is narrow. The trick is on capital allocation, maximize the yield by entry in phases. It means if one could not hold the capital with little return in bank deposit, it is fine for investor to consider 5-6% return (ignoring the share price could drop by the same amount in certain week) with partial capital. Bulk of capital may be reserved for higher yield return aligning to the next global financial crisis

Possible Action: Buy (partial capital only) or Wait

It is clear by now there could be different possible actions for the same stock because the right decision has to be aligned with own personality, eg. holding for short term trading or long long term investing, aiming for capital gains or dividends or both, reward expectation and risk tolerance level, etc.

Learn from Dr Tee to learn 10 different stock trading and investing strategies (including high dividend blue chip stocks as a strategy), aligning with 10 unique personalities.

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

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

Posted on July 20, 2018 Written by Dr Tee (Ein55)

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

Filed Under: Uncategorized Tagged: Acquisition of Wheelock Properties

Food Chain of Stock Market (弱肉强食)

Posted on July 18, 2018 Written by Dr Tee (Ein55)

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.

Filed Under: Stock Market Tagged: Food chain of stock market

Key Learning Points from Ein55 PA Course on Personal Action

Posted on July 15, 2018 Written by Dr Tee (Ein55)

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

Filed Under: Personal Analysis Tagged: Personal Action

Century Investment Opportunity in US China Trade War

Posted on July 12, 2018 Written by Dr Tee (Ein55)

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.

Filed Under: Macroeconomy Tagged: US China Trade War

5 Strategies in Property Stock Investing

Posted on July 11, 2018 Written by Dr Tee (Ein55)

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.

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

Recovery of Singapore Property Market

Posted on July 6, 2018 Written by Dr Tee (Ein55)

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

Filed Under: Property Market Tagged: Singapore Property Market

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

Posted on July 5, 2018 Written by Dr Tee (Ein55)

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.

Filed Under: Uncategorized Tagged: crisis stock investing

Singapore Car COE (Cat A) at Low Optmism

Posted on July 4, 2018 Written by Dr Tee (Ein55)

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.

Filed Under: Value Investing Tagged: Singapore Car COE

4 Positions of Economy vs Stock Market

Posted on July 4, 2018 Written by Dr Tee (Ein55)

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.

Filed Under: Macroeconomy, Stock Market Tagged: economy vs stock

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