4 Mapletree / Temasek Giant REITs (一叶知秋)

Posted on May 10, 2020 Written by
Mapletree Trust, MCT, MIT, MLT, MNACT, Temasek, REIT

Mapletree Investment is 100% owned by Temasek, a company with strength in private property funds and managing 4 Singapore giant REITs:

1) Mapletree Logistics Trust, MLT (SGX: M44U) – Giant Logistic REIT

2) Mapletree Industrial Trust, MIT (SGX: ME8U) – Giant Industrial REIT

3) Mapletree Commercial Trust, MCT (SGX: N2IU) – Giant Commercial REIT

4) Mapletree North Asia Commercial Trust, MNACT (SGX: RW0U) – Giant Commercial REIT

Learn further on how to position in these 4 Singapore REITs after cross comparison. MLT and MCT are 30 STI component stocks while MIT is the next to consider in reserve list for STI.

1) History & Sponsor

Among the 4 Mapletree REITs, MLT is the longest history in stock market (listed in year 2005), following by IPOs of MIT (Year 2010), MCT (Year 2011) and MNACT (Year 2013).  Despites all the 4 REITs are giant stocks (according to Dr Tee criteria) but 3 of them are relatively young giant stocks, only MLT has experienced the last Global Financial Crisis in Year 2008-2009 with share prices dropped by over 70%.  Mapletree has 6 other private property funds which may be listed as well in future, following similar REIT model.

In the recent global stock crisis in Mar 2020, all these 4 REITs are corrected by about 40% (MNACT is even cut by half for share price due to additional fear when Coronavirus was first started in China in Jan 2020).  Nevertheless, the scale of recent stock price correction is still not comparable with 2008-2009 subprime crisis.  During a global financial crisis, it is important to have a strong sponsor, which 4 REITs have: Mapletree Investment which is 100% owned and supported by Temasek.

In short, the main risk of 4 REITs is with cyclical stock prices due to economic cycle (i.e. potential capital loss, especially during global financial crisis), not so much on business risks.  When Coronavirus crisis is over or fading away, tenants would resume the business, continue to pay for the committed rentals.

2) Type of REITs

All the 4 REITs have different focuses of industries and countries, eg. MLT is on logistic REIT (Singapore / global), MIT is on industrial REIT (Singapore / global), MCT is on commercial / retail REIT (Singapore) and MNACT is on commercial REIT in North Asia (Hong Kong, China, Japan).

Geographically, each country has different economic performance but most of the REITs portfolios are in Singapore and Asia which have been growing over the past decades.  REITs focus on rental collection, therefore tenant stability (ability to pay rental with agreements) are related to economic cycles of each country. REITs usually are diversified over a portfolio of clients, tenants from different industries, therefore risk is relatively lower.

The current Coronavirus crisis has limited impact, even during lockdown period, property owner (REITs) can still collect most of the rental (partially supported by local government) but distribution of dividend may not be on time for Q1/Q2 2020 as REITs may reserve some cash for planning during the uncertain Year of 2020. For longer term investor who could hold more than 1 year, this should not be an issue as dividend kept (if any) would be distributed back to shareholders at later time.

3) Business

Fundamentally, all these 4 REITs are strong, disruption of Coronavirus crisis has limited impact. The dividend yields are currently around 4+% for MLT, MIT and MCT, below the minimum expectation of 5% for dividend investing (which is achievable if an investor could take action in Mar or Apr 2020 when share prices were under 30-40% correction, this window of opportunity is closed when over half of the correction is recovered with V-shape recovery in share prices).  MNACT still has 8+% dividend yield, mainly due to heavy correction in share prices (50%), recovering slower (less than 30% of total correction) than the other 3 REITs. 

Mapletree REITs are more suitable for positioning as midfielders, both capital gains (mainly for trading when stock market trend is more bullish in short term to medium term) and moderate dividend yield as bonus (about 3-4% is fine).  For long term investing, entry of Mapletree REITs or any giant dividend stock has to be aligned with STI or world stock market at low optimism, usually during a Global Financial Crisis.

Since Mapletree Investment strength is in property development and management, a good REIT manager would help to improve dividend yield with new property into REIT portfolio.  These 4 REITs have gearing ratio less than 40%, still having potential to grow bigger, especially for MCT (only 33% gearing ratio, far below 45% maximum gearing ratio allowed by current law). MCT is more concentrated in Singapore, benefiting from government plan on “Greater Southern Waterfront”, Vivo City contributing to about 1/3 of revenue.  Concentration could be viewed as a risk or an opportunity, depending on whether the focused properties are higher or lower quality.

Interestingly, 3 out of 4 REITs CEOs are female for MLT, MCT and MNACT.  REITs are relatively stable businesses, delivery of committed goals are key for any CEO, whether male or female management. The best judgement of a new management performance is through positive financial report of at least 3 years.

4) Timing & Return

The best time to buy a giant REIT is usually during crisis. The only question is how low is low to buy a stock. Therefore, dividend yield >5% is a reasonable criteria for dividend stock investor. A giant REIT or dividend stock investor may also consider entry in batches (if afraid of buy low get lower in share price), entering for every 10% or X% lower in share prices. 

In fact, an investor of REIT is similar to a REIT manager who consistently looks for better properties at lower prices to maximize the passive income with higher yield. It is much easier for a stock investor, just need to click a button to buy a stock to invest. However, since it is so easy, some investors may not consider properly: What to Buy, When to Buy/Sell.

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There are at least 26 Temasek / GLC stocks in Singapore including these 4 Mapletree stocks, controlling shareholder with 15% or more ownership directly or indirectly (investor has 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).

Dr Tee likes leaves of maple trees, still remember the first leaf collected about 3 decades ago in fall season when studying in US.  When the maple tree leaves turn into red color, it is a spectacular view, making fall or autumn as the most beautiful season (northeast of US near Canada and also Japan have nice views of maple trees during the fall). Change in leaves colors (一叶知秋) is similar to stock investment, showing the investment clock with 4 seasons, an important skill to master on how to take 4 actions: Buy, Hold, Sell, Wait. When an investor knows What Giant Stocks to buy, the remaining questions are simply When to Buy/Sell and How Much to Buy/Sell (position sizing, entry/exit in batches).

There are other giant REITs in Singapore and globally which an investor may consider beyond these 4 Mapletree REITs. 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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5 Genting Group Casino Stocks (神机妙算)

Posted on April 30, 2020 Written by
Genting Gerhad casino stocks Malaysia Singapore Hong Kong Plantation

Genting Group is a famous regional casino with 50 years of history, started in Malaysia (Genting Highland), then extending to whole world, including Singapore, UK and US, currently aiming for Japan casino license.  Usually there is no certainty in a business but casino is a unique sector which is almost guaranteed to win due to the “unfair” design of games (神机妙算) in favour of the house if there are positive incoming tourists in the region with supporting local government.

Casino stocks are usually cyclic in nature as business is dependent on economy condition, especially on wealthy gamblers (VIP and premium members) which may have more capital for gambling when stock market is bullish or vice versa.

Read the article further to understand the potential of Genting Group, both risks and opportunities, not learning only 1 but all 5 Genting stocks: Genting Berhad, Genting Malaysia, Genting Singapore, Genting Hong Kong, Genting Plantation.

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Genting Berhad is the parent stock, owning other 4 subsidiaries Genting companies with 4 distinct businesses:

1) Genting Berhad (Bursa: 3182) – Malaysia Giant Blue Chip Stock

2) Genting Malaysia (Bursa: 4715) – Malaysia Giant Casino Stock

3) Genting Singapore (SGX: G13) – Singapore Giant CasinoStock

4) Genting Hong Kong (HKEx: 678) – Hong Kong Cruise / ResortStock

5) Genting Plantations (Bursa: 2291) – Malaysia Giant Palm Oil / Property Stock

Genting Group main business is related to casino (main focus of this article). It diversifies business into plantation / property (through Genting Plantations, a giant stock but affected by low optimism palm oil prices) and cruise / resort (through Genting Kong Hong, a weak fundamental stock, would get worse during Coronavirus crisis).

Genting casino business depends on licenses issued by local country: monopoly in Malaysia, duopoly in Singapore (another casino is MBS – Marina Bay Sands), competing with many others in UK (the largest casino operator) and US. Despite casino is a “sure win” business, it requires huge capex in building the casino and integrated resort, paying high tax to local government and business is dependent on tourism (eg. casino business is badly affected for at least 2 months without income during global lockdown).

An investor may invest directly in Genting Berhad (parent stock) if requires more diversification of businesses and also casino business over the world (not dependent on certain country). Here, we would focus on 2 casino stocks in 2 countries, Genting Malaysia (which includes casino in Malaysia, UK, US) and Genting Singapore (which includes casino in Singapore and possibly Japan if license is obtained).

2) Genting Malaysia (Bursa: 4715) – Malaysia Giant Casino Stock

The founder of Genting is Mr Lim Goh Tong (林梧桐) who was already a successful businessman before taking high risks in building the first casino in Malaysia without government assistance in 1960s. During the construction of Genting Highland resort (which later becomes a casino), he nearly died 6 times in various unexpected accidents. He is awarded the only casino license (more than 50 years till now), a legend in Malaysia history. 

When Dr Tee was still a small kid, I remember my first trip in life was around 9 years old to Genting Highland. Of course, I could not enter casino as a child.  After growing up, I have been to casino all over the world: US (Las Vegas, Atlantic City), Malaysia (finally), Macau (a few there, see earlier article in my trip report to Hong Kong / Macau), Australia (Melbourne, Brisbane), etc, except for Singapore (well, there is admission fee for local Singapore people).  I like to visit casino but I seldom gamble (similar to windows shopping) because I understand lower probability of winning for most games, only those who are lucky may win eventually (with condition to stop gambling for the rest of life after the win). Instead, I like to watch the reaction of gamblers, 9/10 are not smiling, likely losing money, trying to gamble more to win back the money.  

Stock “investing” with stock tips or rumour or “insider news” is similar to gambling. A smart stock investor has to firstly understand the business (both risks and opportunities), sector prospect and stock market outlook for country and even the whole world. Let’s learn step by step here.

Genting Malaysia is a giant casino stock, business has been stable over the past 10 years, growing in revenue but stagnant in net profit, partly due to higher tax and also global expansion plans with more casino. It could generate steady cash flow (due to unlimited greed of gamblers who volunteer to donate or contribute money unknowingly) and having a culture to pay dividend which is growing each year (current dividend yield is 6.3%).

Of course, cash flow of Genting worldwide casino would be reduced by at least 2/12 months during the global lockdown, 20% or even more deduction in Year 2020.  The situation would improve gradually when Coronavirus has subsided over the next few months. It is hard to stop an addicted gambler from gambling for 2 months, likely the person may double the capital for gambling next time when Coronavirus fear is over. It is a sad social issue why some people are against gambling as it could destroy a family, although it also brings additional national revenue.

Over the past few years with weaker Malaysia stock market, Genting Malaysia has dropped more than 50% in share prices (low in last few months of global stock crisis is comparable to 11 years low in Year 2009), currently at low optimism < 25%, aligning with bearish KLCI Index in Malaysia (recovering in last few weeks). Both Genting Berhad and Genting Malaysia are 2 of 30 KLCI component stocks in Malaysia. More importantly, casino business has 50 years of history in Malaysia, the monopoly business would continue to be a strong economic moat for Genting Malaysia. When KLCI recovers, both Genting Malaysia and Genting Berhad would get more support in uptrend share prices.

3) Genting Singapore (SGX: G13) – Singapore Giant CasinoStock

Singapore took a long time to finally accept casino operating in the island.  Many years ago, Singapore gamblers have to go overseas (nearest is cruise in international sea or Genting Highland) when nature calls. Now, they could gamble within the island (local people has additional restrictions such as admission fee but probably could only stop some people such as Dr Tee from visiting), either in Resort World Sentosa (RWS, belongs to Genting Singapore) or MBS (belongs to Las Vegas Sands, NYSE: LVS, another overseas casino stock with reasonable business fundamental).  This way, at least the losses of gamblers could be recycled to help the Singapore needy people (through government tax) and also Singapore investors (who invest in Genting Singapore).

In fact, gamblers of Genting Singapore are mostly from overseas, eg. China, Malaysia and regional countries. So, lockdown in the regional during Coronavirus pandemic would definitely affect the Genting Singapore business.  During the last few months of global stock crisis, Genting Singapore share price is corrected by about 40%, low of 51 cent/share is 11 years low since Year 2009 (last Global Financial Crisis). Currently Genting Singapore is still at low optimism < 25%, aligning with bearish STI Index in Singapore (recovering in last few weeks). Genting Singapore is 1 of 30 STI component stocks in Singapore, trends of prices are well aligned with country and global stock market due to better outlook of Coronavirus condition.

Singapore government has granted both Genting Singapore (RWS) and MBS to expand further in future with more investment in non-gaming infrastructures to exchange for exclusive casino licenses till year 2030.  Building of integrated resort and other new tourist attractions (capex for casino companies) would help to attract more overseas tourists to Singapore. So, this is a positive long term plan but will take up a lot of cash (capex) from Genting Singapore which may reduce the free cash flow and dividend for the next 10 years.  The application of casino license in Japan is both a risk and opportunity for Genting Singapore as the share prices will be up or down, depending on the unpredictable outcome.  Regional expansion is a good move, especially in related casino and integrated resort business. For Genting Singapore and most casino, main revenue generator is gaming business (over 70%, especially VIP and premium members). “Integrated resort” is mainly a way of marketing to attract more tourists to come, which some of them would drop by casino during free time, contributing some money to local economy through gambling.

Both Genting Singapore and Genting Malaysia are cyclic in nature for share prices, therefore buying casino stocks at lower optimism prices in bearish economy would have higher upside potential as casino business is more defensive in nature (assuming Coronavirus pandemic would end eventually, gambles coming back again). However, it is more suitable for investors with stronger holding power because what if economic condition is beyond recovery (eg. permanent job loss, lower productivity with negative GDP, etc), stock market may fall to a new low during global financial crisis (of course, gamblers would continue to gamble, especially when they have limited money, thinking casino is the quickest place to make money). Genting Group has good culture of dividend payment over the decades, the same Lim family (Chairman is son of founder, Lim Kok Thay) would help to support the stock investors with 5-6% dividend yield (assuming casino may lose 50% gamblers, still have 3% dividend yield) during the winter time.

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So, gambling in casino is to give money to casino (not acceptable). However, investing in casino stock is to share the profits of gambling with casino and contributing high tax to local government to help the needy people (could be considered). However, not all casino stocks are good, therefore careful selection is important. In fact, there is another casino giant stock (the owner is also the Top 10 richest person in Malaysia, same list as Lim Kok Thay, boss of Genting Group) listed in Hong Kong, even stronger than Genting casino business.  I won’t mention here, interested readers may do a google of Top 10 richest person in Malaysia and their related businesses.

There are 30 STI index component stocks including Genting Singapore (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).

There are 30 Malaysia Bursa KLCI index component stocks including Genting Berhard and Genting Malaysia (investor has to focus only on giant stocks for investing):
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.

It is better to learn how to fish (investing), instead of waiting for the fishes (stock investing ideas). 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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7 CapitaLand Giant REITs for Dividend (CMT + CCT = CICT) (双剑合璧)

Posted on April 29, 2020 Written by
CapitaLand Giant REITs for Dividend

CapitaLand is Temasek property giant stock, having 2 giant Singapore REITs: CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT). Many Singapore investors like REITs for passive income generation through quarterly dividend payment. After the announcement of merging, both REITs suffer about 40% price correction during global stock crisis with Coronavirus fear, dividend yields are more than 6%, attractive for long term investors.

Some potential REIT investors would like to know should they invest in CMT or CCT before the merging, which one has more potential, or should they wait until the merging of 2 REITs into CapitaLand Integrated Commercial Trust (CICT), the largest Singapore REIT by June 2020.

Read the article further to find out the critical answers for CMT and CCT, not learning only 2 REITs but all 7 stocks related to parent stock CapitaLand, including 4 REITs and trusts in the same group: Ascendas REIT, Ascott Residence Trust, Ascendas India Trust and CapitaLand Retail China Trust.

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CapitaLand is the largest property developer in Asia (after merging with Ascendas and Singbridge), becoming a key Temasek property investment portfolio.  CapitaLand has total of 6 REITs / Business Trust in Singapore:

1) CapitaLand (SGX: C31) – Singapore Property Giant Stock

2) CapitaLand Mall Trust, CMT (SGX: C38U) – Retail REIT Giant Dividend Stock

3) CapitaLand Commercial Trust, CCT (SGX: C61U) – Office REIT Giant Dividend Stock

4) Ascendas REIT (SGX: A17U) – Industrial REIT Giant Dividend Stock

5) Ascott Residence Trust (SGX: HMN) – Hospitality REIT Dividend Stock

6) Ascendas India Trust (SGX: CY6U) – Business Trust Dividend Stock

7) CapitaLand Retail China Trust (SGX: AU8U) – Retail REIT Dividend Stock

In summary, all 7 CapitaLand group of stocks have reasonable strong business fundamental, all 6 REITs / trusts may be considered for dividend investing but only 3 of them are giant REITs stocks (based on Dr Tee giant criteria): CMT, CCT and Ascendas REIT. Sibling stocks of Ascott Residence Trust, Ascendas India Trust and CapitaLand Retail China Trust are relatively weaker, more suitable for pure dividend investing but subject to cyclic stock market risk (eg. capital loss during global stock crisis with limited long term growth). Parent stock, Capitaland, is a blue chip stock, behaving as if a fund with all the subsidiary stocks, more suitable for low capital investor who needs diversification.

There are 30 STI index component stocks including CapitaLand Mall Trust and CapitaLand Commercial Trust (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), 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).

By law, 90% of REIT incomes has to be redistributed back to shareholders in the form of dividend, therefore it is a popular passive income generator. If a REIT pay 4 times yearly, an investor with 3 REITs could receive 12 payments yearly, helping to offset monthly expenses. When return from monthly dividend is more than monthly expenses, an investor would become financial free. However, certain REITs may not pay consistent dividend due to unstable business and a few could even go bankrupt if not properly managed. Business Trust (eg. Ascendas India Trust) seems similar to REIT but it is not required by law to pay dividend, therefore creating an uncertainty in the future which dividend payment is not guaranteed.

In this article, we will focus on 2 giant REITs, CMT and CCT which will be merged soon. Sharing is for educational purpose, please make your own decision. Before merging announcement, CMT performs relatively better than CCT from overall investing consideration.  So, CCT investors would benefit more than CMT investor.

CapitaLand Giant REITs for Dividend CCT CMT

The merging deal is for CMT to acquire CCT by exchange every share of CCT with 0.72 share of CMT + cash $0.259/share.  Since the announcement from 22 Jan 2020 until today, CMT and CCT share prices are closely correlated as mirror image with this formula:

CCT = 0.72 CMT + 0.259

It means after the merging announcement, there is not much difference now as CMT and CCT prices movement of stocks follow the equation above closely. Even if an investor is interested in CMT, the decision of whether to invest now or after official merging in June 2020, should be based on stock market outlook, not expecting any drastic change in share price after the official merging.  In fact, over the past 2 months of global stock crisis, both CMT and CCT dropped by about 40% in share prices, even after recovering in the last few weeks, CMT is still at low optimism < 25%. In general, before merging, CMT is more defensive while CCT is more cyclic, therefore future CICT REIT may behave in between both REITs, more cyclic than CMT, more defensive than CCT.

Coronavirus pandemic has affected both CMT and CCT as some tenants may not pay rents on time but this could be recovered later when Coronavirus has ended or fading away over the next few months.  Occupancy rates of both REITs are high (about 99%), any withdrawal by tenant (eg. a few weaker F&B or consumer companies may not be able to sustain) may be quickly replaced by new tenant but rental increase would be limited. If Coronavirus is not a long term issue (under the worst case, vaccine could be developed in about 1 year), major correction in share prices for either CMT or CCT could be an opportunity to accumulate with dividend yield around 6%. Assuming the worst case of losing 20% tenants (dropping from 99% to 80% occupancy) if Coronavirus may stay for 1 more year with 20% people in the world staying at home during lockdown, average dividend yield is correct to around 5%, still better than keeping cash in bank with only 1% dividend. When crisis is over, an investor could enjoy the capital gains with potential share price appreciation due to market greed.

Before merging, CMT and CCT already has joint portfolio, eg. Raffles City (40% CMT, 60% CCT). After merging, the new CICT REIT would dominate both retail shopping malls and offices in Singapore, having more capital to expand in overseas.  However, inorganic growth through more acquisition (eg. overseas properties) may or may not add value to CICT as it depends on expertise of REIT manager, able to find high quality properties at discounted prices (eg. during economic crisis), adding more potential to DPU (dividend per unit). Over expansion sometimes may result in higher risk (higher gearing ratio, which would become higher after merging as CMT has to pay some cash to CCT investors) but acceptable for CICT with dual level sponsors of CapitaLand and Temasek.

There could be more merging and acquisition activities during the global stock crisis. A giant stock does not need to be the “biggest” company, more importantly, strong in fundamental with growing business, therefore even a small company could be a giant stock.

A smart investor may consider only the strongest subsidiary giant stock of CapitaLand group, which is protected by the sponsor CapitaLand, which is further protected by another bigger sponsor, Temasek.  This implies for the giant stock to fail (eg. go bankrupt), it has to hurt CapitaLand or even Temasek first.  However, safer stocks may not be the best choice for investment as growth are limited.

There are 52 REITs and Business Trusts stocks including CapitaLand Mall Trust and CapitaLand Commercial Trust (investor has to focus only on giant stocks for investing):
AIMS APAC Reit (SGX: O5RU), ARA Hospitality Trust USD (SGX: XZL), ARA LOGOS Logistics Trust (SGX: K2LU), Ascendas Reit (SGX: A17U), Ascendas India Trust (SGX: CY6U), Ascott Trust (SGX: HMN), Asian Pay Tv Trust (SGX: S7OU), BHG Retail Reit (SGX: BMGU), CapitaLand Commercial Trust (SGX: C61U), CapitaLand Mall Trust (SGX: C38U), CapitaLand Retail China Tr (SGX: AU8U), CDL Hospitality Trust (SGX: J85), Cromwell Reit EUR (SGX: CNNU), Cromwell Reit SGD (SGX: CSFU), Dasin Retail Trust (SGX: CEDU), Eagle Hospitality Trust USD (SGX: LIW), EC World Reit (SGX: BWCU), Elite Commercial Reit (SGX: MXNU), ESR-REIT (SGX: J91U), Far East Hospitality Trust (SGX: Q5T), First Reit (SGX: AW9U), Frasers Centrepoint Trust (SGX: J69U), Frasers Hospitality Trust (SGX: ACV), Frasers Logistics & Commercial Trust (SGX: BUOU), FSL Trust (SGX: D8DU), HPH Trust SGD (SGX: P7VU), HPH Trust USD (SGX: NS8U), IREIT Global (SGX: UD1U), Keppel Infrastructure Trust (SGX: A7RU), Keppel Pacific Oak US REIT (SGX: CMOU), Keppel DC Reit (SGX: AJBU), Keppel Reit (SGX: K71U), Lendlease Reit (SGX: JYEU), Lippo Malls Trust (SGX: D5IU), Manulife Reit (SGX: BTOU), Mapletree Commmercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), Mapletree North Asia Commercial Trust (SGX: RW0U), NetLink NBN Trust (SGX: CJLU), OUE Commercial Reit (SGX: TS0U), ParkwayLife Reit (SGX: C2PU), Prime US Reit (SGX: OXMU), RHT HealthTrust (SGX: RF1U), Sabana Reit (SGX: M1GU), Sasseur Reit (SGX: CRPU), Soilbuild Business Space Reit (SGX: SV3U), SPH Reit (SGX: SK6U), Starhill Global Reit (SGX: P40U), Suntec Reit (SGX: T82U), United Hampshire US Reit (SGX: ODBU).

Learn from Dr Tee 4hr Free investment course on global dividend giant stocks to collect passive income during low optimism in stock crisis, then enjoying capital gains with growing share prices when crisis is over.

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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Healthcare Giant Stock Q&M Dental (骨肉相连)

Posted on April 24, 2020 Written by
Healthcare Giant Stock Q&M Dental QC7

Healthcare stocks (eg. hospital business, pharmaceutical companies, vaccine development, etc.) are having competitive advantages, therefore those with growing businesses are usually growth giant stocks. Between life and money, which is more important? The choice is clear (金钱诚可贵、生命价更高) to put life at a higher priority, therefore healthcare has been a high growth sector in most countries.

Q&M Dental (SGX: QC7) is a young healthcare giant stock with focus in dental services. The company started business in year 1996, having main businesses in Singapore (79 branches), Malaysia and China.  For China, due to stronger competition and higher cost, subsidiary stock, Aoxin Q&M (SGX: 1D4) with poorer business there, is not a giant stock, not performing as good as parent stock, Q&M Dental.

Q&M Dental has so many branches all over Singapore in many convenient central locations, despite it is not a monopoly business, this ease of access has become a strong economic moat. It is hard for neighborhood experienced dentists to compete with this rising star which has sophisticated facilities (eg. x-ray, etc) and better customer services.

There was one day last year, Dr Tee tooth was not feeling well, since my teeth has been in good condition for many years, I need to go around to look for a suitable dental service.  Q&M may not be best in dental skills (some are younger dentists with only a few years of experience), so I try to book for appointment with more senior dentist with over 10 years of experience (similar to selecting a stock with long history of business performance). Despite there are 3 Q&M branches within 1km radius from Dr Tee place, I was surprised that I could not get an immediate service as appointments are required and all full until the next day.  To cut the story short, a dental checkup with clean was over $100 (normal rates, Q&M has help the dental industry by setting some minimal standard fee), finally become a more serious issue which needs root canal operation and crowning, spending over $2000 as I engaged the most senior specialist for a more reliable service (not life and death issue but a good tooth could last lifetime is crucial when observing my own parents).

For certain non-urgent health issues, it is possible for some people to drag or ignore it to save cost. However, when there is sudden tooth pain (骨肉相连), even within Coronavirus pandemic, there is no choice but to visit a dentist ASAP. Therefore, dental industry is a consistent growing business and price is non-negotiable (demand more than supply). There are shortages of dentists in Singapore. There are about 2000+ dentists in Singapore, over 10% are from Q&M. To overcome this issue, Q&M has even started own College of Dentistry to train future dentists for own companies (perhaps cost could be lower). I observed my own dentist has to be multi-tasking, attending to 2 patience in 2 rooms within the same hour (while another patience is waiting, eg taking mold for crown, etc).

A few months ago, when Dr Tee students were reviewing Q&M stock, the prices were at lower optimism level, especially during the Coronavirus pandemic period with global stock crisis. Q&M has growing business, profitable with strong cash flow. This year, it will give special dividend (ex-dividend in May 2020), an investor could get about 5.5% dividend yield (usually about 2% dividend yield). Q&M share price is undervalue considering the growing business for decade but share prices have been declining over the past 5 years, dropping more than half to 36 cents, last 6 years low.

Recently, share prices of Q&M surged suddenly by 2 times to about 70 cents, mainly because of a news that Q&M has acquired a company with COVID19 testing capability.  Similar to another healthcare stock, Biolidics (SGX: 8YY), share prices also shoot up by a few times which are purely speculative trading.  Biolidics is not a giant stock but investors assume it would become a giant, benefiting from Coronavirus crisis. Question is, after the health crisis is over, can the company continue to sustain a few times of business growth to support the share prices? Therefore, after senses are back, share prices of both Q&M and Biolidics are corrected to more normal high prices to reflect the positive hopes.

In fact, Q&M has strong business fundamental in dental services, does not need this speculative news at all. It is good that few people aware of this stock. Unfortunately, the share prices go up too fast, hope readers have chance to buying at lower optimism before that when prices were below 40 cents.

Some people may not care about stock investing but they do worry of rising healthcare and dental cost as human body and teeth are similar to a car, there could be “wear and tear”, need repair and maintenance each year to stay in top condition. Dental cost could be minimal, still over $100 for regular check-up, also could be over a few thousand dollars if getting complicated (eg. tooth implant). A mechanics could ensure a car is fully repaired before charging the fee. However, a dentist or medical doctor could not guarantee a service will have positive results but patients still need to take the risk and pay for full services.

Let Dr Tee show readers a way to get free dental or even medical services for lifetime. It is simple, just look for giant dental or healthcare stocks (eg. hospital related), buying their shares at lower optimism prices. Even healthcare stocks usually don’t give a lot of dividend, for $10000 capital, minimal 2-3% dividend yield could pay $200-$300 for regular dental check-up of a small family. Healthcare stocks usually are positioned more as midfielder, minimal dividend with higher growth for capital gains (eg. over 10% appreciation in yearly share prices, could be $1000, could help to pay for minor surgery cost).

Q&M Dental is still a young giant stock, performance is not as steady as other proven global healthcare giant stocks. So, a smart investor may leverage on high healthcare costs overseas, investing in those giant stocks to profit from rising healthcare industry.

There are 37 Healthcare Stocks in Singapore including Q&M Dental (investor has to focus only on giant stocks for investing):
Accrelist Ltd (SGX: QZG), Alliance Healthcare (SGX: MIJ), Aoxin Q & M Dental (SGX: 1D4), Asia Vets Holdings (SGX: 5RE), AsiaMedic (SGX: 505), Asian Healthcare Specialists (SGX: 1J3), Beverly JCG (SGX: VFP), Biolidics (SGX: 8YY), Cordlife (SGX: P8A), First Reit (SGX: AW9U), Haw Par Corporation (SGX: H02), HC Surgical Specialists (SGX: 1B1), Healthway Medical Corporation (SGX: 5NG), Hyphens Pharma International (SGX: 1J5), IHH Healthcare (SGX: Q0F), ISEC Healthcare (SGX: 40T), IX Biopharma (SGX: 42C), Lonza Group (SGX: O6Z), Medinex (SGX: OTX), Medtecs International Corporation (SGX: 546), OUE Lippo Healthcare (SGX: 5WA), ParkwayLife Reit (SGX: C2PU), Pharmesis International (SGX: BFK), Q&M Dental Group (SGX: QC7), QT Vascular (SGX: 5I0), Raffles Medical Group (SGX: BSL), RHT Health Trust (SGX: RF1U), Riverstone Holdings (SGX: AP4), SingMedical Group (SGX: 5OT), Suntar Eco-City (SGX: BKZ), TalkMed (SGX: 5G3), Thomson Medical Group (SGX: A50), Tianjin Zhong Xin Pharmaceutical Group (SGX: T14), Top Glove Corporation (SGX: BVA), Trendlines Group (SGX: 42T), UG Healthcare Corporation (SGX: 41A), Vicplas International (SGX: 569).

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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.

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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.

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Stock: To Buy or NOT to Buy Now? 左右为难

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

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

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

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

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

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

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

Stock market US Europe Singapore Hong Kong China

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

China – successful model (full cycle completed)

Korea – runner up, cycle nearly completed

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

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

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

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

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

1) What to Buy

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

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

2) Capital Allocation – Multiple Entries

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

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

3) First Entry

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

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

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

4) Remaining Entries (Conditional)

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

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

5) Hold (Monitor)

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

6) Sell (Exit)

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

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

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

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

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

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

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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, Stock Market, Technical Analysis, 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.

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Grandparents Blue Chip Stock SPH (远虑近忧)

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

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

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

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

SPH Historical Stock Prices T39 SGX

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

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

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

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

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

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

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

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

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

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

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

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

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

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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.

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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)

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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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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.

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