Dr Tee Family 100 Years Investing Strategy (百年树人)

Posted on August 26, 2020 Written by

Parents are our best role models for life including investing. Dr Tee will share in this article, both valuable life principles learned from his father (who passed away recently) and also a lifetime investing strategy with 100% success rate practiced by his parents, applicable in both stock and property markets.

Bonus is Dr Tee Grandparents Crisis Investing Strategy for reader who could patiently read the entire article. This investing strategy is proven over 3 generations of Dr Tee family over the past 100 years.

Many people hope to learn a “sure-win” investing strategy. For most practical considerations, there is a certain probability of success for each stock trading or investing strategy but rarely could achieve 100% success rate.

Dr Tee parents have a remarkable achievement to have 100% winning record in both stock and property investment consistently over the past few decades. This lifetime investing strategy may not be suitable for everyone, requiring alignment of similar personality as Dr Tee parents. Let’s learn the details here.

Some people may change mind easily, even for a good investment (stock or property), if the market prices fall down significantly, some may end up sell low with losses under tremendous fear. Alternatively, some people could hold an investment for long term, even over a lifetime but due to declining businesses, suffering permanent losses over time.

Dr Tee parents’ “Sure-Win” Strategy is simple but only if one could align with similar personality (work hard + take right investment action). Here are the 3 main steps:

1) What to Invest

For stock investment, Dr Tee parents prefer giant stocks from country stock index component, especially those with strong business fundamental stocks with good track record (both capital gains and dividend payout) over the past decades. 

Property (house or land with high quality asset) by default is a giant, therefore also a key option for their investment. Their main source of investment knowledge was through reading local newspaper investment articles and discussion with friends having similar interest.

This “100% winning” strategy requires support of a portfolio of giant stocks (reviewing giant stocks status yearly for possible change in business fundamental). Many giant stocks could be found in a country stock index. For example, these are 30 STI component stocks, could be a possible starting point for lifetime investing for an investor in Singapore:

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).

For different country, an investor may start with local stock indices with component stocks, eg. 30 KLCI stocks, 50 HSI stocks, 30 Dow Jones stocks, S&P 500 stocks, 50 SSEC stocks, Top 10 largest NASDAQ stocks, etc.  Subsequently, analyze business fundamental and other critical criteria for giant stocks. Here is a list of 30 Malaysia Bursa KLCI Index component stocks which may be considered for Malaysia stock investors:

CIMB (Bursa: 1023) CIMB GROUP HOLDINGS BERHAD, DIALOG (Bursa: 7277) DIALOG GROUP BERHAD, DIGI (Bursa: 6947) DIGI.COM BERHAD, GENM (Bursa: 4715) GENTING MALAYSIA BERHAD, GENTING (Bursa: 3182) GENTING BERHAD, HAPSENG (Bursa: 3034) HAP SENG CONSOLIDATED BERHAD, HARTA (Bursa: 5168) HARTALEGA HOLDINGS BERHAD, HLBANK (Bursa: 5819) HONG LEONG BANK BERHAD, HLFG (Bursa: 1082) HONG LEONG FINANCIAL GROUP BERHAD, IHH (Bursa: 5225) IHH HEALTHCARE BERHAD, IOICORP (1961) IOI CORPORATION BERHAD, KLCC (Bursa: 5235SS) KLCC PROPERTY HOLDINGS BERHAD, KLK (Bursa: 2445) KUALA LUMPUR KEPONG BERHAD, MAXIS (Bursa: 6012) MAXIS BERHAD, MAYBANK (Bursa: 1155) MALAYAN BANKING BERHAD, MISC (Bursa: 3816) MISC BERHAD, NESTLE (Bursa: 4707) NESTLE MALAYSIA BERHAD, PBBANK (Bursa: 1295) PUBLIC BANK BERHAD, PCHEM (Bursa: 5183) PETRONAS CHEMICALS GROUP BERHAD, PETDAG (Bursa: 5681) PETRONAS DAGANGAN BHD, PETGAS (Bursa: 6033) PETRONAS GAS BERHAD, PMETAL (Bursa: 8869) PRESS METAL ALUMINIUM HOLDINGS BERHAD, PPB (Bursa: 4065) PPB GROUP BERHAD, RHBBANK (Bursa: 1066) RHB BANK BERHAD, SIME (Bursa: 4197) SIME DARBY BERHAD, SIMEPLT (Bursa: 5285) SIME DARBY PLANTATION BERHAD, TENAGA (Bursa: 5347) TENAGA NASIONAL BHD, TM (Bursa: 4863) TELEKOM MALAYSIA BERHAD, TOPGLOV (Bursa: 7113) TOP GLOVE CORPORATION BHD.

2) When to Invest

Dr Tee parents only have middle-class income from active jobs, which salary in cash would depreciate over time. When they got married about 60 years ago in Muar (a small town in Johor of Malaysia), both were having little starting capital. Since young, over 4 decades of working hard, they would gradually convert the cash saving into another form of “fixed deposit” through purchases of stocks (both private and public listed companies) and properties (houses and plantations), which could generate passive incomes (eg. stock dividends and property rentals, much higher than bank interest rates) and consistent growth with enormous capital gains. 

Besides regular conversion of cash into saving (spending very little on themselves, saving every dollar possible for family with 4 children), later into stocks or properties, Dr Tee parents would invest more during financial crisis, especially when they observed the stock index (eg. KLCI Index as they live in Malaysia) was at relatively low level or when there was special sales of house or land below the market prices.

Dr Tee parents worked very hard (like a habit) for whole life, even after they have retired, could not rest well for 1 day, must find something to do each day in kampung.  To them, this is their ideal lifestyle to keep busy (but not stressful) each day. Dr Tee wished they could be more relaxed but looking back now, this could be blessing in disguise as some retirees who relaxed too much, may age even faster.

3) When to Sell

Most of the time, Dr Tee parents would not sell stocks or properties, keeping them long term over lifetime, collecting both passive incomes (which can be used for family expenses or reinvest again) and capital gains. Sometimes when stock index or investment is at high optimism level, they would sell but most of the time, they would simply ignore them, keeping as “fixed deposit” which could compound each year for decades through stocks and properties. Apply this simple method of investing (buy stocks as if property for many generations to stay) on giant stocks, naturally the success rate is 100% over the decades, overcoming all the stock “crisis” eventually.

In a certain period of time for about 10 years, due to high cost to support 4 children (Dr Tee and 3 siblings) university education in US (ringgit was weak vs USD), they decided to sell significant private shares of palm oil plantation (with many times of capital gains). This was rare for them to sell properties or stocks to convert back into cash but children (especially education) are their most important goal in life. They strongly believe that knowledge is the best investment to generate more wealth (eg. with a better job) to support a better future life.

Dr Tee parents were working very hard, saving almost every dollar they could during this period, spending very little on themselves, saving and then investing mainly to provide additional financial shield for children. History seems to repeat itself, it is turn for Dr Tee to do similar planning for family with children. However, Dr Tee could still have reasonable spending (disagree with parents who almost did not spent much on themselves) as children should also work hard to enjoy fruits of life with own creation of wealth.  This way, the “shield” contributed by each generation could be compounded to protect against a major future crisis.  If not, wealth could not last through 3 generations with spending alone. 

Financial literacy could be the best gift for any young generation. Dr Tee is amazed that a few Ein55 graduates are as young as 14 years old (learning together with parents), could understand and apply value investing principles. With compounding return of many decades to come, knowing what giant stocks to invest, these young learners main goals would be to work hard and save more for capital to start the first investment of life one day. 

This “Buy Low and Hold” strategy for long term or even lifetime suit Dr Tee parents personalities.  Some people may not have patience to hold or wish to sell earlier for capital gains to enjoy life, therefore missing the natural compounding growth of giant stock or property, hedging against inflation.  To maximize the compounding over lifetime, one has to start investment younger. Assuming 50 years of lifetime investing (eg. 30 to 80 years old) with average of 10% growth rate, capital gains could be as high as 1.1^50 = 117 times.  Even with a minimal 5% growth rate over 20 years (eg. 40 to 60 years old when retiring), capital gains could be 1.05^20 = 2.65 times.

So, this “sure-win” strategy could be very simple (tested over 100 years with 3 generations) but could be very tough as some people may not able to make sacrifice in life (eg. not willing to invest in oneself to enhance knowledge in own profession or investment), simply wait for gift to drop from heaven (most of the time are speculative news, ending up with big losses).  So, heaven is fair, usually reward those who work hard and follow the right path of investing, even if one forgets about making money one day (eg. Buy Stocks / Properties and Forget), hidden fortune would appear naturally one day when needed.

So, the secrets of making money in investment is not to think of making money, just do the right proven actions, eg: investing over a portfolio of 10-20 giant stocks, buying more during financial crisis, holding long term, then the compounded return would come naturally one day.

My Father Story

Similar to investment, life also has its own cycle. My father (Mr Tee Ching Sin, 郑清森) passed away peacefully recently due to natural aging.  Over the past 10 years, this has been my biggest worry to receive unexpected call from parents in Malaysia which could be potential sad news.  The day still comes with expected call when I was halfway conducting a Zoom coaching class, need to hold my tears to complete the program as this is a commitment, a value shared by my father.

When I observed my parents have been getting older each year, I started to slow down the pace of my work or interest in investment education (used to work 365 days a year, 7 days a week, working nearly all the time), visiting them more often in Malaysia over the past few years. Each time when I said farewell to them when returning to Singapore, I was thinking could this be the last time we meet in life.

More importantly, my father has taught me many positive values in life (not just making money with investment), setting an excellent example with his whole life. Despite he has left the world, sometimes I could still “hear” his voices which is embedded in the subconscious mind (similar to Artificial Intelligence, AI). This is how a “spirit” or family value could be transmitted between the generations.

Similarly, I often use “Dr Tee” as third person narration when teaching investment knowledge to students or writing articles (eg. Dr Tee aims for “giant stocks”, investing when giant is falling during crisis, etc), hopefully this could help to form positive habits of investment in a faster way with AI into their minds when they hear “Dr Tee voices” in their subconscious mind one day.

This article is a special tribute to my father, a short summary of his successful life, not only with “sure-win” investing strategy and hardwork over lifetime, but also for his selflessness to think of family first.  It is a regret that there is travelling restriction to Malaysia during pandemic (requires 14 days quarantine), together with 2 other siblings living outside Malaysia, we join the online ceremony to pay the last respect to our father.

My father dedicated his whole life for family but reward little to himself. During his funeral ceremony today, I have shared my feeling remotely in Chinese (you may use google translator if needed) to him:

爸爸，您是我们心目中，敬重的父亲。

您的3个孩子，姐姐，二哥和我，身在海外，因为疫情的情况下，国家限制旅游，不能回来尽孝，我们庆幸过去与您保持密切联系，亲情永在，不限一时。

爸，身为您的儿女与亲友们，舍不得与您告别。

纵然您已离开尘世，浩瀚宇宙中遨游，您不朽的精神，将永远留在我们心里。

爸爸，多谢您一生无私的付出，栽培了我们四个孩子，海外留学，开阔视野。教育是您留给我们最珍贵的资产，我们也继承了您的精神与理念，与后代分享。

年轻时，为了给家庭增强经济后盾，您毅然放下教鞭，从事繁重的经商活动，过度劳累，透支身心。晚年时，纵然行动不便，您意志顽强，坚持独立活动，心灵手巧，甚至到人生最后一刻。

言传不如身教，您是我们的人生楷模。我们从中观察，学习宽容待人，刻苦节俭，不畏失败，活出自我。孩儿东渊记得，曾经问您为何不多花一分钱在自己身上，却慷慨帮助孩子们与他人。您说人生已无遗憾，家人安康就是最大的满足。

爸爸，请您放心，我们会照顾好妈妈。 您的一生是成功的， 无憾无悔，不枉此生。我们衷心感激您为家庭的无偿付出。

爸爸，愿您一路走好，我们爱您，永远怀念您。

Suddenly, I remember this old song by Taiwanese singer (高凌風 – 牽不住你的手, “Could Not Hold Your Hands”), now finally I could understand the meaning as he wrote this song when losing his father many years ago: https://www.youtube.com/watch?v=xQmQllux1bo

I was hoping to hold my father hands for the last time. I tried to appeal to Malaysia High Commission in Singapore by queuing up before 8am (hope to enter Malaysia without quarantine if pass COVID test in 1-2 days) but standard answer was to fill in online form (which has no option of funeral, mainly ask to sign to agree to pay for 14 days quarantine in hotel after entry to Malaysia with on-site test) and wait for reply which response time is not guaranteed. I sadly called ICA of Singapore for help (hoping there is some special agreement between 2 countries on travelling for special case of funeral, not just on businesses), standard answer is entry to Malaysia depends on Malaysia policy. So, the recent bi-lateral “Reciprocal Green Lane” may not have considered hundreds of thousands of citizens with close elderly family members in both countries (Singapore and Malaysia were 1 country before, hard to separate families apart with a political border).  COVID-19 crisis is not only a health and financial crisis, may also be a family crisis.

I am relieved that online technology (Whatsapp Group Video) has helped to lessen this potential biggest regret in my life. My siblings and I who are abroad Malaysia could follow entire funeral ceremony remotely in an interactive way, praying and talking to my father who rest peacefully, knowing all his children would get united again regardless of obstacles. Except I could not hold my father hands anymore.

I remember a unique subject studied in university time in US several decades ago: “On Death & Dying”. The funeral services are not just for the deceased, also for those who are alive to heal their wounds in heart. It is a way to accept and adjust to new norm in life without the loved one (switching connection from physical to spiritual).

Looking back, I believe my father may have special plan in choice of timing to depart us (knowing that I would try different ways to get there to see him for the last time). Perhaps this was his intention not to trouble 3 of children abroad, not to take any risk in travelling. If so, I may need to thank the authority with hard rules for helping my father to achieve his final wish to help family again.

Father, please Rest in Peace. The best way to repay your kindness in lifelong support is to maximize values of my own life which I promise won’t disappoint you!

Dr Tee’s Grandparents Story

In fact, Dr Tee parents also learned from their parents who have similar personality of working hard, despite low income but knowing how to invest to improve on quality of life. Dr Tee grandparents were very poor (not having any formal education, could only do lower income work) when first came from China to Malaysia nearly 100 years ago.

After many years of working and saving little by little, Dr Tee grandparents grabbed the rare opportunity of Japanese occupation time (1940s) to use life saving in “banana money” to buy a small piece of land with rubber plantations at very low price (a form of crisis investing during World War II), holding for 80 years till today with about 2000 times capital gains. 

Many people lose money in saving cash when Japanese “banana money” became zero value overnight but Dr Tee grandparents converted the cash (paper value) into land (high quality asset), therefore reversing the family poverty destiny, converting crisis into opportunity.  With the first foundation (plantation could generate incomes), they continue to improve family financial condition with more purchases of land with hard earned savings (but similar crisis of low land price was only once a lifetime).

Dr Tee grandparents success (hardwork with special help of crisis investing in property) has changed the future of Tee family (from poor to middle class). This inspired Dr Tee parents to follow similar track of working hard and invest when young (but extending from properties to stocks).  Crisis investing of high quality assets at low price is a high probability of winning if one has holding power.

Similarly, the success of last 2 generations has motivated Dr Tee to study hard (aiming for highest educational level of PhD), then work hard to achieve the career goals (climbing ladder till VP in corporate world, then CEO of own company after becoming financial free) and extending investment from long term investing to short term trading, developing an universal way of “Buy Low Sell High” with Ein55 styles of investing for stocks, properties, bonds, commodities and forex.

Dr Tee owes the current success (both personal life and investment) to contribution of 3 generations of Tee family over the past 100 years.  The same principles of life (work hard with simple life) are not just passed to 4th generation but also shared with over 3000 Dr Tee graduates and over 300,000 public audience over the past 10 years.

Even if you not Tee family member, could you duplicate this simple secret of success in life with “Sure-Win” strategy? Answer is yes but not everyone could do it.  A person must be willing to have a determination of working hard (or study hard in early age) for life, spending little on oneself, converting saving into higher growth investment with a portfolio of giant stocks or properties, investing more during financial crisis time, then holding for high growth over lifetime.

If you could read every word of this article until this here, you have the potential to be the first generation of your family to inspire future generations for another 100 years (百年树人)!

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Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar.

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com


Filed Under: Fundamental Analysis, Market Cycle Investing, Personal Analysis, Stock Market Tagged: , ,

Temasek Giant Stocks Corporate Actions (淡马锡股)

Posted on August 18, 2020 Written by

Having a strong sponsor or major shareholder is crucial for stock investment, especially during period of uncertainty such as COVID-19 stock crisis.  In this article, Dr Tee will review these 7 Temasek stocks with 4 major corporate actions:

1) Keppel Corp (SGX: BN4)

– Abandon of Partial Acquisition by Temasek

2) Sembcorp Industries (SGX: U96) & Sembcorp Marine (SGX: S51)

– Successful Demerger under Temasek

3) Singapore Airlines, SIA (SGX: C6L)

– Impact of Rights & Bonds Issues for Survival

4) CapitaLand Mall Trust (SGX: C38U) & CapitaLand Commercial Trust (SGX: C61U)

– Merger of CapitaLand (SGX: C31) Giant REITs with coming change in 30 STI component stock with Keppel DC REIT (SGX: AJBU)

Temasek helps to manage national wealth of Singapore, having over 40 stocks globally with about S$300B investment (淡马锡股). There are at least 26 Temasek / GLC stocks in Singapore, controlling shareholder with 15% or more ownership directly or indirectly:

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).

At the same time, over the past 1 year, there are 4 major corporate actions in these Temasek stocks which worth review here.

1) Keppel Corp (SGX: BN4)

– Abandon of Partial Acquisition by Temasek

The partial acquisition offer by Temasek (increase ownership of Keppel Corp to 51% at price of $7.35/share) was initiated before COVID-19 stock crisis. Under this unprecedented health crisis, global stock market suffers 30-50% correction. Therefore, it does not make sense for Temasek to acquire Keppel Corp at premium price before COVID-19 crisis. 

Keppel Corp was making loss in Q2/2020, providing an option for Temasek to withdraw the acquisition as cash or capital may be more critical for other Temasek stocks during this period of uncertainty. Temasek could also use the money for other better investment, eg. recently increase stake in BlackRock (NYSE: BLK), a giant fund stock with $4.8B which is clearly stronger than Keppel Corp.

Despite it may be a sound decision for Temasek but other Keppel Corp shareholders could be disappointed with share prices falling below critical $5/share support, nearly last 10 years low. Keppel Corp is mainly supported by property segment of business as Oil & Gas segment has been making losses due to low optimism oil prices.

Keppel Corp stock investor may need to align decision making (sell or hold) with own personality. Current share price is low optimism, it would be “Sell Low”. The situation is different from SIA which is also at low optimism share prices but business is making loss. Keppel Corp still has strong property business while oil & gas has strong potential to recover with rising oil prices (higher demand with fading of COVID-19 threat).  It is also an option to copy Temasek action to “Change Horse” (Sell weaker Stock A, Buy stronger Stock B), eg. transferring the capital to invest in stronger giant stocks such as BlackRock.  Afterall, not all could be a patient long term investor for Keppel Corp to regain giant stock title as 10 years ago during bullish Oil & Gas sector.

Although with controlling ownership (over 51% shares), it may be easier to implement potential plan for merging of Keppel O&M with Sembcorp Marine but if outcomes are beneficial to both stocks, a major shareholding (21% of Keppel Corp) may be sufficient to initiate this potential corporate action in future.

2) Sembcorp Industries (SGX: U96) & Sembcorp Marine (SGX: S51)

– Successful Demerger under Temasek

With abstain of voting by Sembcorp Industries and Temasek, the demerger during EGM is still successful, partly because there is no strong second major shareholder (less than 1% shareholding), especially for Sembcorp Marine.

Fundamentally, parent company Sembcorp Industries (with more defensive utilities and growing land development businesses) is much stronger than subsidiary Sembcorp Marine (declining Oil & Gas over the past 5 years) but 1/3 overlapping in accounting (revenue) has dragged down the share prices of Sembcorp Industries which is tied with the same boat under Oil & Gas crisis.

Therefore, after demerger, Sembcorp Industries share prices generally move higher while Sembcorp Marine is still at relative low price position. In medium term, Sembcorp Industries would become a “new company” without 1/3 negative Oil & Gas business.  In longer term, cyclic Oil & Gas sector could help Sembcorp Marine investors to have higher upside but patience is required.  In general, Sembcorp Industries and Sembcorp Marine are 2 very different type of stocks, differences in share prices would be clearer in future.

Again, Sembcorp stocks investors need to make decision (Buy, Hold, Sell, Wait, Shorting), aligning with own unique personality.  The world of stock market is large, over 1600 global giant stocks, there may be no need to “fall in love” with a stock for life.

3) Singapore Airlines, SIA (SGX: C6L)

– Impact of Rights & Bonds Issues for Survival

Airlines sectors has been in very critical condition, some airlines (without strong sponsor) even go bankrupt as passengers drop over 90% compare with before COVID-19, business could sustain more than 6 months. Vaccine development may take another 6-12 months before COVID-19 crisis could be over.

Impact on Singapore Airlines could be more severe during pandemic as it does not have domestic flights (Singapore is too small), therefore the Rights and Bonds issues came in right time to ensure the company could survive through the most critical 12 months period, before Singapore Airlines could fly again proudly.

However, even after the corporate action, SIA share prices continue to decline, about half price since the beginning of COVID-19, about 1/3 of peak prices (after adjustment of rights issues). In fact, Singapore Airlines business fundamental has been declining gradually over the past decade, not just during pandemic (sudden dip).  This is due to competitive airlines sector which need to provide good services (well known for SIA but at the price of higher cost) at lower price, therefore earnings and profit margin would be affected.

A stock investor needs to carefully select the right industry or sector for investment. During pandemic, healthcare and technology (eg. online / software solution) stocks would have higher chances to recover than airlines stocks. “Buy Low” is reasonable with condition a stock business fundamental is not much affected. It would be a rare opportunity if business of a stock is growing but share prices fall due to fear driven sales during global financial crisis.

4) CapitaLand Mall Trust, CMT (SGX: C38U) & CapitaLand Commercial Trust, CCT (SGX: C61U)

– Merger of CapitaLand (SGX: C31) Giant REITs with coming change in 30 STI component stock with Keppel DC REIT (SGX: AJBU)

CapitaLand is under Temasek portfolio, the 2 giant REITs, CMT and CCT will be merged by end of 2020 to become the third largest REIT in Asia (largest Asian REIT is Link Reit, HKEX: 823). A giant stock may not need to be large in size, internal business strength with strong economic moat is even more crucial.

Merging and demerging are neutral corporate actions, impact depends on the long term plans of major shareholders. Both CMT and CCT are defensive REITs which could generate steady passive incomes (about 5-6% dividend yield, depending on the share prices). However, the growth is slow (but steady), therefore an investor may position as a defender while diversifying capital over a portfolio of other giant stocks including mid-fielders (eg. growth stocks) and strikers (eg. cyclic stocks or momentum stocks).

When CMT and CCT are merged, would form a new stock, CICT with only 1 stock. Therefore, 30 STI index component would invite the next reserve stock, Keppel DC Reit (SGX: AJBU) which is also a REIT but much stronger growth.  The best time to buy a growth stock is usually during global stock crisis (eg. COVID-19 pandemic) with great fear in the market but business continues to make money each month.

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A smart investor may carefully design a portfolio of global giant stocks (defenders, mid-fielders, strikers) while an experienced trader may take action following the trend with S.E.T. (Stop Loss, Entry, Target Prices) in trading plan.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar.

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com


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

Rights Issue and Demerger of Sembcorp Marine from Sembcorp Industries (难兄难弟)

Posted on June 8, 2020 Written by
Rights Issue Demerger Sembcorp Marine Sembcorp Industries Temasek Keppel Corp

Temasek stocks of Sembcorp Industries SGX: U96, parent stock) and Sembcorp Marine (SGX: S51, subsidiary stock) just announce 2 bundled corporate actions of rights issue for Sembcorp Marine and then demerger from Sembcorp Industries. In this article, Dr Tee will compare both Sembcorp stocks and share the possible causes and effects of such actions with deeper analysis.

Recently, Temasek stock of Singapore Airlines, SIA (SGX: C6L) just completed the rights and mandatory convertible bonds (MCB) issues to inject extra capital to save the company from Covid-19 crisis encountered in airlines sector with over 90% drop in number of flights. Temasek would become the sponsor to take up additional rights and bonds if not taken up by other shareholders.

Temasek may have modified the “rescue” recipe for another company (Sembcorp) which need helps under both Covid-19 and Crude Oil Crises.  Temasek owns 49.3% of Sembcorp Industries, a parent stock which subsequently owns 61% of Sembcorp Marine from oil & gas sector (see diagram).

The proposed corporate actions are bundle of 2 actions (see diagram), requiring both to pass together to be effective. Sharing here are for educational purpose, please make your own decision in investment.

Rights Issue Demerger Sembcorp Marine Sembcorp Industries Temasek
Rights Issue Demerger Sembcorp Marine Sembcorp Industries Temasek

1) 5-for-1 Rights Issue for Sembcorp Marine

There are a few ways to “borrow money” for a business, eg. borrowing from banks or issue bonds but this would increase the debt level (both Sembcorp Industries and Sembcorp Marine have relatively high level of debt over asset) and additional cost to business with interest of loans. Therefore, an alternative way is to “borrow” money from shareholders through rights issue as this strategy would not increase the debt level and no interest is required. However, if shareholders don’t welcome this move (may be under pressure to invest with new capital), they may reflect the negative sentiment with lower share prices which affect the market cap of company or hidden wealth of shareholders.

Sembcorp Marine hopes to raise S$2.1 billion under 5-for-1 renounceable rights issue at an issue price of $0.20 per share. Based on recent average price of $0.74 for Sembcorp Marine, the theoretical ex-rights price (TERP) is

TERP = [($0.20 x 5) + ($0.74 x 1)] / 6 = $0.29/share

Since the rights are renounceable (similar to previous SIA rights), current shareholders of Sembcorp Marine may either accept the rights (requires extra cash to invest more on this stock) or they could simply sell the rights in stock market at later stage if action is approved. 

Action of rights issue is a neutral corporate action, there is no right or wrong, decision partly depends on how the new capital is used (eg. paying debt, saving company or expanding the business, etc) and also whether a stock has strong business fundamental or strong sponsor.  Similar to SIA, Sembcorp Marine needs additional capital to cope with the current crisis which is even worse, not limited to shorter term Covid-19 crisis (affecting most sectors) but also longer term oil & gas crisis with bearish crude oil price (affecting most oil & gas companies, including Sembcorp Marine and Keppel Corp, SGX: BN4).

When crude oil market was bullish 10 years ago, Sembcorp Marine and Keppel Corp were still giant stocks, doing well with growing businesses. However, when crude oil price dropped from over US$100/barrel since Year 2015 to less than US$50/barrel over the past few years, businesses of Sembcorp Marine and Keppel Corp (business segment of Keppel O&M) turn to negative, becoming losses.

Sembcorp Marine revenue size is about 1/3 of Sembcorp Industries, seriously affecting the earnings of parent company, which could still remain profitable with support of other business segments (energy/utilities and urban) but it has been weaker over the past 5 years.  Keppel O&M (not listed) also contributes to most losses of Keppel Corp which is mainly supported by property segment. Due to prolonged oil & gas crisis over the past 5 years, these 3 Temasek stocks have lost the titles of giant stock (based on Dr Tee criteria): Sembcorp Industries, Sembcorp Marine and Keppel Corp.

Therefore, as a stock investor, decision of whether to take up rights issue is similar to additional investment, whether Sembcorp Marine worth investing. Currently crude oil market is still at low optimism but it is on recovery phase. It might take a few years for customers (oil producers) of Sembcorp Marine and also Keppel Corp (Keppel O&M) to become profitable and increase the capital investment. So, the cold winter of business might be much longer for Sembcorp Marine and Keppel O&M which could be a stopper for recovery of share prices despite at low optimism level.

Besides accepting / selling rights issue, current shareholders also have the option to sell the stock before corporate actions (but price may correct down if mass market views the action negatively).  If the action is “Sell”, a shareholder may not suffer permanent loss if knowing how to “Change Horse”, use the remaining capital (after selling) to “Buy” an oil & gas giant stock or even a non-crisis giant stock on the same day. During oil & gas crisis period of last few years, a few oil & gas companies actually profit from the crisis, eg. those related to oil storage.

Rights Issue Demerger Sembcorp Marine Sembcorp Industries Temasek

2) Demerger of Sembcorp Industries and Sembcorp Marine

Although Sembcorp Marine is only a subsidiary of Sembcorp Industries with 1/3 revenue but it contributed to most of the losses of parent company. From the chart below, it is shown that over the past 14 years (since 2006), both Sembcorp Industries and Sembcorp Marine behave more like siblings (难兄难弟), instead of parent-subsidiary relationship, having very close long term stock price trends (key difference is Sembcorp Marine is more volatile than Sembcorp Industries).

This implies 1/3 business connection of 2 Sembcorp stocks have contributed to nearly 90% strong correlation in share prices. Therefore, the proposal of demerger of 2 stocks would help Sembcorp Industries more in longer term. Sembcorp Industries shareholders would get compensation through dividend stocks of between 427 and 491 Sembcorp Marine shares for every 100 Sembcorp Industries shares owned. After demerging, since there is no connection in business, Sembcorp Industries would become more profitable (growing earnings contributed by energy/utilities and urban business segments) without affected by possible losses of Sembcorp Marine. Currently, Sembcorp Marine is as if a negative asset (contributing to losses) to Sembcorp Industries, therefore if parent company could sell away with some compensation, this would help Sembcorp Industries become a giant stock again.

After demerger, Temasek would become direct sponsors (major shareholder) for both companies which would become siblings or even cousins in Temasek family of stocks. The future losses of Sembcorp Marine would be sustained partially by Temasek, not by Sembcorp Industries anymore. In fact, energy/utilities (gas / power / water / waste / renewable energy) business of Sembcorp Industries are defensive in nature, would support the future share prices of “new” Sembcorp stock without “Marine” business segment. The smaller “Urban” segment (land and property development) is only 3% of company revenue but contributes to about 25% of company profits, a highly potential segment to grow further when “burden” of Marine is put aside.

To be fair to Sembcorp Marine, it is a stock with high potential but currently more suitable as crisis stock investing, implying if the potential losses in next few years could be sustainable (partly with help of rights issue), when crude oil price may be back to high optimism as 10 years ago, then Sembcorp Marine could outperform Sembcorp Industries. 

Therefore, after demerging, both Sembcorp stocks would be clearer in personalities with more unique businesses. Sembcorp Industries would be mainly suitable for gradual growth, defensive investor. Sembcorp would be more for crisis stock investor who view high volatility (both potential high losses and high gains) as main driver for capital gains. Of course, a stock investor also has the option not to consider either Sembcorp stocks by selling them or not considering at all.

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Current Sembcorp Industries and Sembcorp Marine shareholders have to make a few decisions in the next few months. With support of Sembcorp Industry as major shareholder, likely the rights issue of Sembcorp Marine could be approved. However, this action is conditional based on the approval by both Sembcorp Marine and Sembcorp Industries for the other action, acceptance of demerger of 2 companies, which both Sembcorp Industries and Temasek would abstain from voting.

In short, the bundled corporation actions ultimately depend on minority shareholders for approval, therefore it is fair from democracy point of view. After excluding Temasek and Sembcorp Industries which are 50-60% ownership in both stocks, remaining minority shareholders are scattered (some are big funds), a simple majority >50% votes is required for both companies to approve the entire package.

Therefore, it may be similar to an election process, hard to predict the outcome unless there is alliance or rally among the minority shareholders.  When 1 “party” feels in disadvantaged position, it may not approve, then whole deal would fail.

There are at least 26 Temasek / GLC stocks in Singapore including Sembcorp Industries and Sembcorp Marine, controlling shareholder with 15% or more ownership directly or indirectly:

Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), SIA (SGX: C6L), SIA Engineering (SGX: S59), SGX (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 HTrust (SGX: HMN), Ascendas-hTrust (SGX: Q1P), CapitaR 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).

The results of SIA rights issue and subsequently the Sembcorp resolutions, could give some direction of what possible actions to take for other Temasek stocks which may need help in business. Among the 30 STI component stocks with Temasek control (over 15% share ownership), these 4 Temasek stocks would need more help: Singapore Airlines, Sembcorp Industries (linked to Sembcorp Marine which was STI component stock before) and Keppel Corp.

So, regardless the outcome of Sembcorp actions, Temasek may also consider other options in future, eg. demerger of Keppel O&M from Keppel Corp, merging with Sembcorp Marine for cost saving of 2 oil & gas companies.  For all the actions, there is a positive common point, which they all have a strong sponsor, Temasek.  It is a bonus to have a strong sponsor but a business still needs good management with right strategies for each of the business sector. These performances would be reflected in both yearly financial reports and daily stock prices, especially for longer term trends. So, it may not be difficult for a stock investor to make a sound decision (Buy, Hold, Sell, Wait, Shorting), aligning the right Temasek stock with own personality, supported by growing business.

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On surface, this topic seems to be just on corporate actions of 2 Sembcorp stocks. When understanding further, it requires understanding of 2 current financial crisis, Crude Oil crisis and Covid-19 crisis, when they may end or fade away. When going to another deeper level, it may also involve political economy and global stock market, especially potential impact of US-China trade war. So, a stock investor should master at least 5 key LO-FTP strategies (Levels 1-4, Optimism, Fundamental, Technical, Personal Analysis).

There are 30 STI index component stocks including Sembcorp Industries (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).

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: Commodity Market, Fundamental Analysis, Personal Analysis, Stock Market, Value Investing Tagged: , , , , ,

Deep Thoughts for Life Movie 2020 (生日沉思)

Posted on May 25, 2020 Written by
Dr Tee Birthday 2020

Thanks to friends, Ein55 students and forum readers for the best wishes of my birthday today. Year 2020 is a special period with pandemic, birth and death are alternating major events in life, worth deeper thoughts for everyone.

Usually I don’t celebrate own Birthday but today I have decided to buy a mini cake (reduced calories), spending the time with family at home. Life is a journey which no one knows when it may come to an end eventually. Therefore, it is important to experience the processes, either happiness or sadness, living without regrets.

Looking back, similar to many others, I have been striving in early part of life to pursue higher education, all the way to PhD (through part-time studies while working full time with 2 children born in the same period). Then, career ladder becomes the next target in life, starting from technical path as a junior engineer to senior engineer, principal engineer, manager, director, VP and even CEO of own company today (engineering consulting & investment education).

However, when I have achieved most goals in life, suddenly I felt emptiness as what were important (money, education / job titles, etc) in the past may not be as important today. So, about 1 decade ago, I have decided to make a change in life.

I started to pursue interests (teaching, investment & science), combining these 3 main interest in a new goal in life through scientific ways of investment education. I “work” (or should I say “enjoy) days and nights, almost non-stop for many years with over 100 sessions yearly (6-day Ein55 courses, monthly coaching, free public workshops, charity courses, graduate gathering, invited talks, investment articles, etc).

Despite I enjoy the current interest (or job or work, depending on how you define it), I know it cannot last forever. About 2 years ago, I experience a health alert with giddiness without knowing the cause. After the thorough tests (including sophisticated MRI), doctor conclusion was I am ok and the “medication” is to have a vacation as he knew that I did not have a long break for nearly 1 year.

Since then, I have started to slow down the pace in my interest / job / work, take it easy (reducing number of classes), let nature take its course. I like the “semi-retirement” type of life style, i.e. not working for money (not main goal of life anymore) but still live actively to experience the second stage of my life.

During the past 5 months of Covid-19 pandemic, there was a big impact to this new normal life. In the past, my main worry was how I could stop teaching one day as there have been so many activities, even I cut down on training courses since 2 years ago, there were still nearly 100 events to conduct yearly.

Many people hate Covid-19 crisis but it helps me to learn further about life, understanding that no one or nothing is indispensable. I had to stay at home for the past 5 months, stopping near 50 events planned earlier as life still goes on. There is no financial burden on me, I could retire directly anytime but when staying at home as “caveman” without meaningful activities (watching TV, listening to music, reading books, etc), I get bored easily. For every new event planned, the results were cancellation (by law, no gathering is allowed), getting worse from Feb to May 2020.

The only thing has no change in life is change itself. So, I start to adjust myself again, learning the online technology which was far away from me, starting to develop series of online courses (mostly are free video investment education, 1-7hr) and writing over 200 investment articles over the past 5 months, you can find all in my blog: www.ein55.com/blog. I hope to share my investment knowledge with readers during the global stock crisis in pandemic, even gathering is not possible.

“Crisis is always an opportunity”, true for stock investment, also true for life. If any friend or reader may be in difficult time now (eg. losing job or having financial constraint), remember that the bad time will be over one day, we just need to go through the winter time before the arrival of spring with new hope. Every correction in life would form a strong support (similar to stock investment) for us to spring up higher. This is proven in my life over the past decades, many “crisis” experienced, adjustment done, life still goes on.

In the past few months of “lock down” (different terms used in each country) period, I also experience the unexpected farewell of a few friends and relatives who leave the world forever, not even able to pay last respect to them. By right, death is part of life, a natural process. However, 2 of the friends are similar age group as me, motivating me to treasure each day as bonus in life, take it easy further, leading a more peaceful life from now on.

人生无常，酸甜苦辣的经验，勾画出一场精彩人生电影，本身是导演与主角。望大家过得开心自在、无憾无悔。

Some may be still working hard to support the family, not able to take a rest even for one day, worrying for the future. For most people, even financial freedom is still a bit far away but you may have other wealth in life, eg. healthy body and a happy family. Treasure what you have while adjusting the pace for other challenges in life. If you have done your best, regardless of the outcome, this is a good show in life without regret.

Finally, wish all the best to all friends, students and readers. Thank you for the friendship and support for so many years, making the “movie” of my life so interesting. There is always light at the end of tunnel. The next episode of life will be more exciting, we won’t be disappointed with a neutral mindset, for both life and investment, just do the right things with our beliefs, following the path aligning with our unique personalities.

Tong Yan (Dr Tee)

Filed Under: Personal Analysis Tagged: , , ,

10 Ways to Sleep Soundly in Global Stock Crisis (高枕无忧)

Posted on April 20, 2020 Written by
Sleep Soundly in Global Stock Crisis

“Be Greedy when Others are Fearful” is a famous crisis stock investing shared by Warren Buffett but easy to say, difficult to implement? How “fearful” is fearful? If this statement could not be quantified, it is similar to say, “Buy Low Sell High”, how low is really low?

Here are 5 points shared by a senior Ein55 graduate, Grace, who has consistent positive results in stock investing and trading. I repost here for sharing with other Ein55 readers, adding my own views on 5 more good habits for stock investing, total 10 points to help Ein55 readers, able to sleep soundly during global stock crisis (高枕无忧).

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Grace: The feeling of greed and fear in us is very natural. If we have a plan, it will greatly help us to manage our emotions:

1. For medium term or long term investment, buy quality stocks.

2. Buy companies with substantial cash with no or little debt to ride through the crisis (ie, with the company’s cash, how long can the business last assuming that the company is required to shut down its operations).

3. Diversification of stocks in different sectors and in different countries to reduce the risk.

4. Investor must have holding power.

5. Investor must have patience and conviction.

If you understand the business of the company and have a proper plan for your investment strategy, you would not fear in investing in the company.

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Dr Tee agrees with all 5 points above by Grace, adding 5 more points below, total 10 points for Ein55 readers to start with the right path of stock investing and trading.

1) Select “giant stocks” (following Dr Tee criteria, not just on strong fundamental stocks). There are total over 1500 global giant stocks, one may just select 10-20 giant stocks which aligned with own personality.

2) Divide stocks into different categories (similar to a football team with defender, midfielder, striker). Dividend giant stocks (defenders) may be considered for contrarian investors which aim for lower prices, getting higher yield, suitable for holding during low optimism period with potential economic crisis ahead. For crisis / cyclic giant stocks (strikers), aligned with low optimism of stock but ensure limited crisis to business and sector.  For growth giant stocks (midfielder) or momentum stocks, consider uptrend stocks, using time to compound the return.

3) Don’t borrow money or leverage for investing stocks in longer term. For short term trading, possible to leverage but need to have S.E.T. (Stop loss / Entry / Take Profit) in trading plan with position sizing.

4) Average down with multiple entries for contrarian investor for a portfolio of stocks at low optimism, no need to guess where is the lowest point. Similarly, multiple exits (progressive profit taking in future) at higher optimism for capital gains, no need to guess where is the highest point.

5) Average up for trading when trend is becoming stronger but position sizing and shorter timeframes of trading with higher optimism.

The list may continue. Knowledge sharing is powerful as readers could learn from other people’s mistake (at zero cost to oneself) and leverage on other people’s proven method (which aligned with own personality) in shorten the learning curves to make profit in stocks.

Ein55 readers: Keep it up, you are not alone in this investing journey. Keep yourself active in learning investment. Your “Future You” will appreciate “Today You” for making a difference to take action in learning investment after reading this article.

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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.

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

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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).

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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 Cycle Investing, Market Optimism, Personal Analysis, Stock Market, Technical Analysis, 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.

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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.

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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.

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

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 Optimism, Personal Analysis, Stock Market, Value Investing Tagged: , , , , , ,

Change Horse Strategy: SIA to SATS (塞翁失马)

Posted on March 28, 2020 Written by
SIA C6L SATS S58 SGX

Nightmare of a long term investor is to hold on to a weak fundamental stock with declining share prices over the decade, wasting both time and capital. It is painful to cut loss halfway, therefore many retail traders (especially those who follow tips to invest) may initially plan for short term trading but when encountering global stock crisis falling from high stock optimism, making losses, forced to be a long term investor since then.

Singapore Airlines (SGX: C6L), SIA, is not a giant stock nor junk stock, under-performing in business (see details of SIA stock in another earlier post), both long term investors (hold for 10 years) or short term traders (hold for 1 month) may make significant losses. So, some investors may be mentally conditioned (despite having option) to subscribe to new rights and bonds issues to avoid future share dilution, investing more new capitals in unknown future of SIA in competitive airlines industry.


Many people may think big names (especially blue chip stocks with decades of history) equals to strong companies. SIA is a big reputable company, therefore some may think it is also a good stock investment, especially backed by Temasek, 55% major shareholder.

There are at least 26 Temasek / GLC stocks in Singapore including Singapore Airlines and SATS, 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).

We may study Temasek portfolio (about 40 global stocks, about half are giant stocks, half are non-giant stocks, based on Ein55 giant criteria), focusing on top 10 Temasek giant stocks, buying them at low optimism prices (could be lower than Temasek’s entry price for some stocks now), selling them at high optimism prices in future, protected by Temasek (eg. even for non-giant stocks: Olam, SIA, etc).

Temasek has a giant stock, SATS (SGX: S58), spinoff from SIA many years ago. Although both SATS and SIA are low optimism stocks (both related to airlines industry, suffering in Coronavirus crisis), SATS is a much better opportunity than SIA to buy at low optimism.

SATS controls about 80% of Changi Airport’s ground handling and catering business. SATS has 2 main businesses (about half each), gateway services and food catering services (including to non-airlines sectors). Similar to SIA, SATS is also affected by airlines sector crisis due to Coronavirus spreading, over 90% flights are down, business will be affected in next 12 months. However, in a longer term, SATS has 2 times stronger business fundamental than SIA. The performances of 3 key financial statements over the past decade are exactly opposite for SATS and SIA:

Income Statement:

SATS = increasing earnings

SIA = declining earnings

Balance Sheet:

SATS = increasing equity, declining debt / equity

SIA = declining equity, increasing debt / equity

Cashflow Statement:

SATS = increasing free cashflow

SIA = declining free cashflow

At current share prices, SIA is about 4.9% dividend yield (potential value trap, crisis is crisis), SATS is 5.6% dividend yield (crisis is opportunity).

For SIA investor who holds to SIA stocks with losses but could not sell due to loss aversion, may sell SIA and buy SATS on the same day with same capital remaining (fine even if 50% loss), transferring the fund (soul) from a old horse (SIA) to a young horse (SATS) which has a brighter future and strong energy than SIA to climb higher for capital gains in long term.

This is Dr Tee (Ein55) powerful “Change Horse” Strategy, suitable for those “stubborn” long term investors holding losing stocks for many years. This is a strong Personal Analysis (PA) method as an investor could tell husband or wife that they never actually sell the stock (eg. SIA), just change the stock name to SATS, offspring of SIA. This is important for those who assume sell a losing weaker stock implies immediate loss, they could continue to hold the stock but through transfer of capital to another giant stock, future winning probability would be higher than continue with than the weak stock (may be worse if double the investment with average cost strategy with new rights).

SIA vs SATS may not be the best example to illustrate “Change Horse” strategy because SIA is not a junk stock and SATS is a giant stock but suffering Level 2 (sector) crisis of airlines industry. This strategy will be even more powerful if readers could apply changing a junk stock with a strong giant stock in a promising sector (low optimism in stock prices but not having crisis in business or sector).

A mistake (eg. making losses in stock investing) is not a mistake if one could learn from the mistake, not too late, even knowing after this article. It is a blessing in disguise（塞翁失马、焉知非福）if an investor could learn to overcome own biggest enemy (oneself) to change a weak stock with a giant stock immediately. SATS may not be the best example to “change horse” as there are over 1500+ global giant stocks based on Ein55 giant stock criteria, one may select 10 giant stocks aligned with own unique personality to form a dream team stock portfolio.

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

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.

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Filed Under: Personal Analysis, Stock Market Tagged: , , , , , , , , , , ,

Action in Global Stock Crisis 心动不如行动

Posted on March 24, 2020 Written by
Action in Global Stock Crisis

Market analysts usually like to predict the future. Before 1 month ago in bull market, some still predicted how high US stock and economy may surge. Now, of course predict how low it may drop to the bottom.

Some readers may be confused of so many future market directions, unsure which one to follow, ending up as an observer without taking any action, missing the boat eventually.

It is human nature hoping to buy at the lowest or sell at the highest point of stock market. However, it is not practical to follow these predictions before actions. Each of us need to have a strategy aligned with personality, may not need to be a long term investor, could be short term or mid term trader.

In general, long term investor only need to buy at price below the value with significant discount, no need to buy at the lowest (if got it, treat it as a bonus but not a must to have). An investor just need to define % discount acceptable to oneself, similar to a shopper going for shopping with sales, will trigger a buy when % discount is more than expectation.

For traders, one may add trend-following indicators on prices, waiting for reversal before entry (now is mostly for shorting), no problem if new prices are higher, a confirmation of new trend (eg bull to bear) but always follow SET plan: Stop Loss / Entry / Target Prices.

Action is more important after reasonable analysis (no need to be very precise, especially for longer term investing but overall direction must be correct). Press the button when signals aligned with own personality, not aligned with market analysts or mass market.

Learn further from Dr Tee free 4hr investment course on how to take actions in global stock crisis: Buy / Hold / Sell / Wait / Shorting with 10 different strategies in stocks: www.ein55.com

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 8000 members:
https://www.facebook.com/groups/ein55forum/

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Filed Under: Macroeconomy, Market Optimism, Personal Analysis, Stock Market Tagged: , ,
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