In the local context of Singapore, there is no Wall Streets but Shenton Way. So in adaptation, this page shall be titled, "One Way, Up!" and "Beating the Way!" A fund, yet to be named, was established with 2 main purposes:
1) to grow the family wealth
2) to provide an on-going savings plan (equivalent to an endowment programme) for Chloe with an investment time-frame of 18 to 21 years.
Rules/Regulations:
As much as I would like to define a set of rules with regards to how the fund will be managed, there will not be any rules with the only exception of the following:
i) no short positions
ii) no CFD, leveraging, etc
iii) no MLM, Time Share, Land banking or similar activities
iv) try to avoid contra positions and if ever engaged in contra positions, to limit potential losses at no more than 4% of the invested amount (for invested amount less than 10,000 SGD) or 500 SGD (for invested amount more than 10,000 SGD)
v) no buying on the spur of the moment because of a hot tip
Based on the above set of guidelines, I hope to grow the family's wealth and lay the foundations for the future.
19 Jul 2010
STI (closing): 2945.42
Counter Bought/Sold: GLD US$10 Bought
Quantity Bought: 100 shares
Price: US$116.76 (exchange rate @ $1.3811)
For the first counter, I have been watching the Singapore market for a while, paying close attention to the US-Singapore Dollar and the GLD US$10 counter. Gold was dropping to its 52-week low while the US-SGD exchange rate had also fallen to its lowest. My personal feel about the market is that it is highly over-bought and may run out of steam. Therefore, my strategy is not to have any positions in stocks of companies.
Gold is a comodity that investors will run to in the event of market correction and crashes. With that in mind, our first position into the market was made.
29 Sep 2010
STI (closing): 3106.03
Counter Bought/Sold: GLD US$10 Sold
Quantity Bought: 100 shares
Price: US$128.30 (exchange rate @ $1.3205)
Before I stepped out of office this morning, I had a quick check on gold prices and was surprised that gold prices had opened at price higher than yesterday's close. It was close to my targeted US$128. The recent US$ had weakened considerably against the S$ but there were still profits that we're sitting on and I want to lock it in. I keyed in an order for US$128.3 as it was the maximum bid I could place in the system. Finally when I checked the order a few minutes ago, I realised that the price was reached and we have successfully realised our first profits!
14 Oct 2010
At the time of writing, I'm not sure if this will be constituted as a valid investment for this fund. Afterall, Initial Public Offers (IPOs) are rarely a form of investments. Regardless of what the current management says about their plans for the IPO to raise cash for further investments, etc, the fact remains that it will be possible that the management, who have been running the business and knows the business, is trying to cash in on the potential value of the company, which may or may not be realized over time.
Having said that, IPOs are very popular to the investors in Singapore and are usually launched with much fanfare and excitement. The first few days of the start of trading, the volume will be highly volatile and so will be its price. Therefore, I have tried to subscribed for 10,000 shares of GIC's GLC at a price of S$1.96 per share. The admin fee was S$2. Results of the share allotment will be announced tomorrow.
*Update:
We managed to get 1 lot during the allotment phase. On the first day of trading, GLD closed at $2.17, which translates to about 9.07% in paper gains. Over the next 2 weeks, GLD closed around $2.20 on average.
DD MMM YYYY
An upcoming IPO is MapleTree Industrial Trust (MIT). While GLP is owned by GIC, MIT is owned by another Singapore government investment holding which is Temasek Holdings. Using the money that were released back to my bank account, we tried to apply for the MIT IPO. Again, the admin fee was $2.
*Update:
We were not able to get any lots from the IPO allotment. Tough luck!
28 Oct 2010
STI (closing): 3129.50
Counter Bought/Sold: MapleTree Industrial Trust Bought
Quantity Bought: 8000 shares
Price: S$1.08
Since we are now cash rich, I want to make a quick decision to ensure that the money is put to more efficient use. In deciding to buy MIT even though we missed the IPO boat, I made the following comparisons based on the limited amount of research I had made:
GLP
At around $2.22 per share, GLP did not mention any dividends so the potential returns will rely entirely on its stock price.
MIT
Based on the original IPO prospectus, the dividend yield for MIT is 8% at the IPO price of $0.93. This equates to a distribution of $0.0744 per share over the next 12 months.At the price of $1.08, the dividend yield is still 6.89%
The main reason for buying MIT will be for dividend yield or capital appreciation of 6.89% or 8%, whichever comes first. Since the distribution frequency is on a quarterly basis, based on the 8000 shares that we currently own, we should expect to get $148.80 in March 2011 and the same amount every 3 months from March 2011. Should the price hits $1.18 before March 2012, we will be happy to exit our position with a healthy profit of approximately $730 or 8.4% gains.
29 Oct 2010
STI (closing): 3142.62
Counter Bought/Sold: Global Logistic Properties Sold
Quantity Bought: 1000 shares
Price: S$2.32
We closed our chapter with GLP today after our successful ballot of 1 lot during it's IPO. At IPO price of S$1.96, a selling price of $2.30 would derive a capital gain of about 17.3%. We certainly did not expect to sell the alloted lot at $2.32 per share at 5:01pm. At that time, about 5 large orders of GLP at S$2.32 meant that our transacted price was S$0.02 higher or 18.4% of capital gain.
Portfolio Report as of 31 Oct 2010
The fund is invested in the following stocks:
Wilmar =$6,370 (@ $6.40)
MapleTree Industrial Trust= $8,528.89 (@ $1.07)
Cash = $2,850.09
20101031.JPG)
Total FundValue = $17,748.98 or $1.044058 per share
Wilmar =$6,370 (@ $6.40)
MapleTree Industrial Trust= $8,528.89 (@ $1.07)
Cash = $2,850.09
20101031.JPG)
Total FundValue = $17,748.98 or $1.044058 per share
% gains/loss = 4.406% gains
STI benchmark gains/loss (since 19 July 2010) = 6.694% gains
So, we did not beat the Way! But that is fine. We made a 4.406% gain over the last 3+ months. That is still better than the measly 0.125% offered by the banks for the entire year! At $1.044 per share, Chloe made $264.35 while Daddy made $484.63 profits on paper.
However, to beat the benchmark, we must find some 10-baggers soon. Otherwise, we will just be performing in accordance to the benchmarks. Given the volatility of the stock market, we do not want to see our fund value diminish together with the STI.
01 November 2010
Chloe is more than 14 months old already. Her total investments into this fund should be $7,000, $1,000 more than her original investment of $6,000 which was meant to be her savings for her 1st year.
This presents a major problem simply because I do not know of any simple process to increase her position into the fund without affecting the shareholder's ratio, which is a messy ratio when I started out with a 6:11 ratio.
Assuming Chloe's additional investment is $1,000 today at the current value of the fund, which is $1.044058, she would be able to "buy" 957.80 units of the fund. If I also put in an additional investment of $2,000, I would be able to buy 1,915.60 units of the fund. Our shareholder's ratio will then be 6957.80 : 12,915.60. Talk about being messy.
If Chloe's investment is raised to $7,000, then my investment would need to follow as well to $12,833.33 to maintain the balance. Decimals are really ridiculous for the sake of simple calculations so I would need to find a solution that will:
1) incorporate Chloe's regular savings goal of $500 per month into the fund
2) adjust the ratio so that it becomes into a 1:2 or 2:3 ratio instead of remaining at 6:11.
To make it into a 2:3 ratio, Chloe's investment will have to be increased from its current $6,264.35 to $8,000 while I need to put in $515.37.
In other words, this fund will receive an additional cash in-flow of $2,251.02 whereby $1,735,65 comes from Chloe while $515.37 would come from Daddy. This will significantly round up our fund to $20,000 and our shareholder's distribution ratio to 2:3.
Peter Lim buying Thomson Medical Center
After a trading halt on Friday, the news is finally out. Peter Lim, who did not successfully buy Liverpool, is buying up shares of Thomson Medical. No wonder prices have steadily climbed from its usual trading range of $1.00-$1.01 to $1.07-$1.08 for the past weeks. Too bad for us, I chose not to enter the stocks at $1.07-$1.08 simply because I was not aware of any takeover news. Then again, how could we, mere mortals, be aware of such news. Having said that, Thomson Medical is a hidden goldmine. Even with declining birthrates, the business of child-bearing is booming as more and more parents become sophisticated and demand for higher medical quality assessment. Thomson Medical is a niche business catering to such businesses. Kudos to Peter Lim for unlocking this goldmine. Next time, can you inform me earlier please?
Strategies for the next quarter
Looking back at our portfolio report as of 31 Oct, I cannot help but worry about the following:
1) Where the next 2-bagger, 3-bagger, or even 10-bagger is coming from?
2) How diversified is the fund to ensure that we remain resilient? Transportation? SMRT? SBSTransit? or Utilities? Precious Metals? Gold?
3) With approximately S$5,000 to spare, am I going to make decisions that will determine a 10-bagger (i.e. $5,000 becomes $50,000) or should I enter into a defensive strategy to maintain a balance within the portfolio?
09 Nov 2010
STI (closing): 3129.50
Counter Bought/Sold: Wilmar Sold
Quantity Bought/Sold: 1000 shares Sold
Price: S$6.90
When I decided to include shares of Wilmar into the portforlio on 25 Oct 2010, I had enough money in the fund to purchase 1 lot. At $6.40, Wilmar is possbily the costliest company (per share) that I have ever purchased. With just 1 lot, or 1000 shares, the relative price movement to profit/loss is simply, for each $0.10 rise, we earn $10 and for each $0.10 fall, we lose another $10, commissions and admin fees not inclusive. Therefore, it cannot be said that I was into Wilmar for the long term. In fact, while writting this summary, I just realised that I have not mentioned about the Wilmar purchase on 25 Oct, but casually included it into the fund's portfolio in my Oct 2010 report. I recall that back then, I had bought Wilmar due to specific technical reasons.
Deciding to buy based on value and executing the order based on technicals is what I am trying to achieve over the years. This is obviously not the best strategy as I would be blinded by technicals while trying to uncover value stocks. Also, it may lead to an early sell-off when patience is virtue in value investing.
Also, on that fateful day, out of the usual 4 technical readings, only 1 of them hit the mark. Nevertheless, I made a punt on Wilmar. The decision then was that if it does not work out, I will liquidate my position and absorb the losses. A few days after that fateful purchase, I relooked at Wilmar's fundamentals and decided that it was good enough to remain in the fund for a little while.
Fast forward to yesterday, the price hit a high of $6.81 before closing at $6.69. I think I tried to sell off the 1 lot at $6.84 but this price was never reached. Today, the price opened at $6.78 and climbed steadily to a high of $6.91 before closing at $6.90 by noon. Looking at the technicals, 2 out of 4 indicators say buy. The other 2 was irrelevant. Still, at $6.90, the fund would have made a tidy profit of $440 out of $6,430. Not bad for 11 working days.
25 Jan 2011
Read in the news today about a call warrant being issued for Apple shares. Apple shares have always been on my radar so I was intrigued. Nevertheless, the rules of this fund will not be amended in anyway for warrants because warrants, like options, are a leveraging product, i.e. they are derivatives. I will not be caught up in any sort of gamble that will wipe away the fund's value. Still, I was tempted to understand more about this warrant. The reason was simple. The strike price was US$400. Apple shares are currently trading at US$337.45. It's recent high was US$348.60. I was beginning to interpret that the warrant will make $$$ if the stock price of Apple rises about US$400 by 18 July 2011.
Certainly, I was not an attentive student and cannot tell the difference between a call and a put as well as being wisely educated about strike price. It took me a long time to "google" for the answers and it certainly proved my earlier interpretation as correct.
If I should become a holder for this warrant, it means that I believe that Apple shares will skyrocket to US$400 before mid-July. Surely, the seller of this warrant must have launched it with bad timing, coinciding with Steve Jobs recent announcements about his leave-of-absence from Apple due to health reasons.
Perhaps, the warrant will interest "shortists" on Apple's stock price while they take a dig at reducing Apple's stock price over the next few months. In case the stock price goes the opposite way, these "shortists" will have a fallback plan if they are invested in these warrants.
I may be wrong in all my analysis, like before. One thing's for sure, I'm not biting into this mumbo-jumbo.
26 Jan 2011
Our first dividend announcement! A "CD" was found next to MIT.SG today. That means we'll be getting our first dividend distribution soon! Excitedly, I checked the announcements on SGX and this is the announcement:
"Distribution of 1.52 cents (SGD) per unit for the period from 21 October 2010 (“Listing Date”) to 31 December 2010 comprising a taxable income component of 1.34 cents (SGD) per unit and a capital component of 0.18 cents (SGD) per unit. "
The date of payment is fixed on 28 Feb 2011. We should be getting more than $100 for our current investment in this trust. Hooray!
*Update:
We got a total of $121.60 on 28 February as distributable income from MapleTree Industrial Trust.
Gold prices have dipped by almost 6.5% from its high of US$139 to US$130 recently but it has rebounded to US$132.25. Due to the stronger Singapore to US currency, that puts GLD 10US$ at S$168.94276 per share. Technically, the price of gold has hit all my pre-requisite signals and we may be back into gold.
SIA Engineering looks good fundamentally as well. With almost very little debt and a good cash flow, I would have entered if not for the current high price of $4.40 per share.
14 Mar 2011
At the last hour, our fund committed to another business trusts in Hutchinson Port Holdings by subscribing to its IPO. The reason why I start this post with a "At the last hour" is simply because the decision was made at the last hour. A lot of things have happened over the past 72 hours. The 9.0 magnitude earthquake that hit the Honshu island of Japan, the tsunami, the series of frequent and violent aftershocks that are still reverberating in Japan, and the threat of nuclear radiation and meltdown at some of the nuclear power plants in Japan could signal the final nail in the coffin to the global economy which is said to be on the "recovery".
With politcal tensions still unresolved in Libya after almost a month, the market is most likely southward- bound. The next question is by how much will the market shrink and should I liquidate our existing portfolios? Of course, the main question of this post is still about HPH.
I shall attempt to answer my main question here. Why should I subscribe to HPH at this time? This is a short term "punt". For a small admin fee of $2, I could possibly get our hands on a couple of lots of HPH, monitor the stock price for a few days and sell off for a quick profit. That is just that. With GLP, we used the same strategy and it had worked well so far and I am not going to deviate much this time. A worrying concern here is that unlike GLP, HPH is launching in murkier water but I have faith that the IPO will follow GLP's pattern. With that , I have tried to subscribe for 22,000 shares of HPH at the maximum price of S$1.383.
The second question that I have posed to myself is something that I do not have the answer to. How the market will react to news is something that no one can easily predict. Besides, I have faith at the moment with MIT and our cash holdings so I do not think that I will be liquidating our positions any time soon. Besides, these damages to the buildings and infrastructure are usually covered by insurances. At this time, my heart goes out to the people affected by this natural calamity. I hope and pray that they are safe.
*Updates:
MIT has issued a statement on SGX that 13 out of 14 properties in Japan are safe except for Sendai Centre, which was hit by the tsunami. They have estimated the cost of reinstating the buidling to be approximately 600 million yen, which is almost S$10 million. What a silly mistake. I had mistaken MIT with MLT. MLT has assets in Japan, while most of the assets of MIT are in Singapore.
*More Updates:
I must say, the result of the balloting announcement is a mixture of good and bad news. While the stock is over-subscribed by approximately 2.89 times, signifying higher demands, it does not signify good times ahead as all 24204 valid applications made electronically were allocated with some lots. In our case, it is probably 18 lots at the price of US$1.01 or S$1.294.
16 Mar 2011
STI (closing): 2971.000
Counter Bought/Sold: MapleTree Industrial Trust Sold
Quantity Bought: 8000 shares
Price: S$1.03
Counter Bought/Sold: GLD US$10 Bought
Quantity Bought: 100 shares
Price: US$136.26 (exchange rate @ $1.27955)
Finally, I caved in.As the Chinese saying goes, 留得青山在，不怕没柴烧. Capital protection to our fund is of utmost importance when the market goes southbound. The nuclear fallout from the 9.0 double whammy of a catastrophic earthquake and tsunami that the poor people of Japan felt last Friday has created a panic selling in the market.
Although I felt sufficiently armed and comforted in my limited knowledge of nuclear power plants, the lack of news coming from Japan and the panicky reports from the various news channels (2Bs and 4Cs, as in, BBC, Bloomberg, Channel NewsAsia, CNBC, CNN and CCTV News) meant that the market is facing its own tsunami bearing south. During the first few days of the crisis, I was confident that the Japanese have it in them to see to a proper resolution to the troubled nuclear plants in Fukushima. As long as the reactor cores are kept cool and completely covered with water, there is little threat. Over the days, I began to see a different outcome, one that is shockingly frightening and I hope, will never happen. There are always 2 containment structure, an external one made of thick concrete and an internal one that houses the cores and control rods that is made of metal. When explosions are seen and heard and aerial images shows the concrete roofs goes missing, and steam is being released, I begin to wonder if the water has evaporated so much due to the very high temperature in the reactor cores. These are probably hydrogen gas build up as a result of adding seawater to aid the cooling process, effectively ending the life of the nuclear power plants. If there is a breach to both the steel and concrete containments, then it is a full-meltdown, an environmental pollution that will take years to clean up.
A few days ago, I discussed the possibility of drawing on some money from this fund to donate to the Singapore Red Cross Society Japan Disaster 2011. We should probably drop the money over at the Singapore Red Cross this weekend. Giving is a virtue that I want Chloe to learn. While it is important to be money-wise, it is of equal, if not greater, to be able to have a kind heart.
Coming back to the fund commentary, with a heavy heart, I liquidated all stock positions and took refuge in Gold.
20 Mar 2011 (currently being re-edited)
The fun'd has overstretched itself this month, no thanks to the high allocation rate from the HPH Trust IPO ballot. Therefore, in order to ensure the fun'd is balanced, I have decided to include a third source of fund for this fun'd. If the fund is a one-off inclusion, then here is the breakdown:
Chloe's total contribution till 1st Mar 2011: $9,500 or 9500 units
Daddy's total contribution till 1st Mar 2011: $14,250 or 14,250 units
Based on the above figures, our fun'd has maintained its 2:3 ratio. Our total combined contributions stood at S$23,750.
I have also calculated the Total Asset Value as S$25,032.28. This is worked out from the following:
8,000 MIT shares @ S$1.05 = S$8,368.98
Cash = S$16,663.30
Based on the above figures, each unit is worth $1.053991 as of 1st March 2011. To ensure that the fun'd has enough to pay for all purchases, I have decided to include an additional source of fund at $25,032.28 (pegged at 100% of our total contributions), yielding an equivalent of 23750 units at $1.053991 per unit.
This means that start from 1 Mar, I can no longer treat each month's contribution as 2:3. I must calculate the unit price of the fun'd and allocate our new contributions by unit.
Therefore, as of 1 Mar 2011, the following share units are in effect:
Chloe = 9500 units
Daddy = 14250 units
'WhiteKnight' = 23750 units
Total Unit Share = 47500 units
Per unit share value = $1.053991
Total fun'd value = 47500 units x $1.053991 = $50,064.56
STI benchmark gains/loss (since 19 July 2010) = 6.694% gains
So, we did not beat the Way! But that is fine. We made a 4.406% gain over the last 3+ months. That is still better than the measly 0.125% offered by the banks for the entire year! At $1.044 per share, Chloe made $264.35 while Daddy made $484.63 profits on paper.
However, to beat the benchmark, we must find some 10-baggers soon. Otherwise, we will just be performing in accordance to the benchmarks. Given the volatility of the stock market, we do not want to see our fund value diminish together with the STI.
01 November 2010
Chloe is more than 14 months old already. Her total investments into this fund should be $7,000, $1,000 more than her original investment of $6,000 which was meant to be her savings for her 1st year.
This presents a major problem simply because I do not know of any simple process to increase her position into the fund without affecting the shareholder's ratio, which is a messy ratio when I started out with a 6:11 ratio.
Assuming Chloe's additional investment is $1,000 today at the current value of the fund, which is $1.044058, she would be able to "buy" 957.80 units of the fund. If I also put in an additional investment of $2,000, I would be able to buy 1,915.60 units of the fund. Our shareholder's ratio will then be 6957.80 : 12,915.60. Talk about being messy.
If Chloe's investment is raised to $7,000, then my investment would need to follow as well to $12,833.33 to maintain the balance. Decimals are really ridiculous for the sake of simple calculations so I would need to find a solution that will:
1) incorporate Chloe's regular savings goal of $500 per month into the fund
2) adjust the ratio so that it becomes into a 1:2 or 2:3 ratio instead of remaining at 6:11.
To make it into a 2:3 ratio, Chloe's investment will have to be increased from its current $6,264.35 to $8,000 while I need to put in $515.37.
In other words, this fund will receive an additional cash in-flow of $2,251.02 whereby $1,735,65 comes from Chloe while $515.37 would come from Daddy. This will significantly round up our fund to $20,000 and our shareholder's distribution ratio to 2:3.
Peter Lim buying Thomson Medical Center
After a trading halt on Friday, the news is finally out. Peter Lim, who did not successfully buy Liverpool, is buying up shares of Thomson Medical. No wonder prices have steadily climbed from its usual trading range of $1.00-$1.01 to $1.07-$1.08 for the past weeks. Too bad for us, I chose not to enter the stocks at $1.07-$1.08 simply because I was not aware of any takeover news. Then again, how could we, mere mortals, be aware of such news. Having said that, Thomson Medical is a hidden goldmine. Even with declining birthrates, the business of child-bearing is booming as more and more parents become sophisticated and demand for higher medical quality assessment. Thomson Medical is a niche business catering to such businesses. Kudos to Peter Lim for unlocking this goldmine. Next time, can you inform me earlier please?
Strategies for the next quarter
Looking back at our portfolio report as of 31 Oct, I cannot help but worry about the following:
1) Where the next 2-bagger, 3-bagger, or even 10-bagger is coming from?
2) How diversified is the fund to ensure that we remain resilient? Transportation? SMRT? SBSTransit? or Utilities? Precious Metals? Gold?
3) With approximately S$5,000 to spare, am I going to make decisions that will determine a 10-bagger (i.e. $5,000 becomes $50,000) or should I enter into a defensive strategy to maintain a balance within the portfolio?
09 Nov 2010
STI (closing): 3129.50
Counter Bought/Sold: Wilmar Sold
Quantity Bought/Sold: 1000 shares Sold
Price: S$6.90
When I decided to include shares of Wilmar into the portforlio on 25 Oct 2010, I had enough money in the fund to purchase 1 lot. At $6.40, Wilmar is possbily the costliest company (per share) that I have ever purchased. With just 1 lot, or 1000 shares, the relative price movement to profit/loss is simply, for each $0.10 rise, we earn $10 and for each $0.10 fall, we lose another $10, commissions and admin fees not inclusive. Therefore, it cannot be said that I was into Wilmar for the long term. In fact, while writting this summary, I just realised that I have not mentioned about the Wilmar purchase on 25 Oct, but casually included it into the fund's portfolio in my Oct 2010 report. I recall that back then, I had bought Wilmar due to specific technical reasons.
Deciding to buy based on value and executing the order based on technicals is what I am trying to achieve over the years. This is obviously not the best strategy as I would be blinded by technicals while trying to uncover value stocks. Also, it may lead to an early sell-off when patience is virtue in value investing.
Also, on that fateful day, out of the usual 4 technical readings, only 1 of them hit the mark. Nevertheless, I made a punt on Wilmar. The decision then was that if it does not work out, I will liquidate my position and absorb the losses. A few days after that fateful purchase, I relooked at Wilmar's fundamentals and decided that it was good enough to remain in the fund for a little while.
Fast forward to yesterday, the price hit a high of $6.81 before closing at $6.69. I think I tried to sell off the 1 lot at $6.84 but this price was never reached. Today, the price opened at $6.78 and climbed steadily to a high of $6.91 before closing at $6.90 by noon. Looking at the technicals, 2 out of 4 indicators say buy. The other 2 was irrelevant. Still, at $6.90, the fund would have made a tidy profit of $440 out of $6,430. Not bad for 11 working days.
Portfolio Report as of 31 Dec 2010
The fund is invested in the following:
MapleTree Industrial Trust= $8,688.82 (@ $1.09)
Cash = $13,971.11
Total FundValue = $22,659.93 or $1.091991 per share
% gains/loss = 9.1991% gains
STI benchmark gains/loss (since 19 July 2010) = 8.3051% gains
Since October 2010, only Wilmar was liquidated at a high of $6.90 per share. Due to uncertainty in the market, the fund did not seek to purchase any other stocks without first doing some due diligence. After our cash top up to a ratio of 2:3, the monthly cash contribution to the fund is in the ration of $500:$750 for Chloe and Daddy. This significantly increased the cash portion of the fund. We did it! We beat the streets! Our fund ended with a gain of 9.1991% gain compared to our benchmark, the STI, which ended with a gain of 8.3051% gain. Here's to a profitable 2011 in advance!
25 Jan 2011
Read in the news today about a call warrant being issued for Apple shares. Apple shares have always been on my radar so I was intrigued. Nevertheless, the rules of this fund will not be amended in anyway for warrants because warrants, like options, are a leveraging product, i.e. they are derivatives. I will not be caught up in any sort of gamble that will wipe away the fund's value. Still, I was tempted to understand more about this warrant. The reason was simple. The strike price was US$400. Apple shares are currently trading at US$337.45. It's recent high was US$348.60. I was beginning to interpret that the warrant will make $$$ if the stock price of Apple rises about US$400 by 18 July 2011.
Certainly, I was not an attentive student and cannot tell the difference between a call and a put as well as being wisely educated about strike price. It took me a long time to "google" for the answers and it certainly proved my earlier interpretation as correct.
If I should become a holder for this warrant, it means that I believe that Apple shares will skyrocket to US$400 before mid-July. Surely, the seller of this warrant must have launched it with bad timing, coinciding with Steve Jobs recent announcements about his leave-of-absence from Apple due to health reasons.
Perhaps, the warrant will interest "shortists" on Apple's stock price while they take a dig at reducing Apple's stock price over the next few months. In case the stock price goes the opposite way, these "shortists" will have a fallback plan if they are invested in these warrants.
I may be wrong in all my analysis, like before. One thing's for sure, I'm not biting into this mumbo-jumbo.
26 Jan 2011
Our first dividend announcement! A "CD" was found next to MIT.SG today. That means we'll be getting our first dividend distribution soon! Excitedly, I checked the announcements on SGX and this is the announcement:
"Distribution of 1.52 cents (SGD) per unit for the period from 21 October 2010 (“Listing Date”) to 31 December 2010 comprising a taxable income component of 1.34 cents (SGD) per unit and a capital component of 0.18 cents (SGD) per unit. "
The date of payment is fixed on 28 Feb 2011. We should be getting more than $100 for our current investment in this trust. Hooray!
*Update:
We got a total of $121.60 on 28 February as distributable income from MapleTree Industrial Trust.
08 Feb 2011
Gold prices have dipped by almost 6.5% from its high of US$139 to US$130 recently but it has rebounded to US$132.25. Due to the stronger Singapore to US currency, that puts GLD 10US$ at S$168.94276 per share. Technically, the price of gold has hit all my pre-requisite signals and we may be back into gold.
SIA Engineering looks good fundamentally as well. With almost very little debt and a good cash flow, I would have entered if not for the current high price of $4.40 per share.
14 Mar 2011
At the last hour, our fund committed to another business trusts in Hutchinson Port Holdings by subscribing to its IPO. The reason why I start this post with a "At the last hour" is simply because the decision was made at the last hour. A lot of things have happened over the past 72 hours. The 9.0 magnitude earthquake that hit the Honshu island of Japan, the tsunami, the series of frequent and violent aftershocks that are still reverberating in Japan, and the threat of nuclear radiation and meltdown at some of the nuclear power plants in Japan could signal the final nail in the coffin to the global economy which is said to be on the "recovery".
With politcal tensions still unresolved in Libya after almost a month, the market is most likely southward- bound. The next question is by how much will the market shrink and should I liquidate our existing portfolios? Of course, the main question of this post is still about HPH.
I shall attempt to answer my main question here. Why should I subscribe to HPH at this time? This is a short term "punt". For a small admin fee of $2, I could possibly get our hands on a couple of lots of HPH, monitor the stock price for a few days and sell off for a quick profit. That is just that. With GLP, we used the same strategy and it had worked well so far and I am not going to deviate much this time. A worrying concern here is that unlike GLP, HPH is launching in murkier water but I have faith that the IPO will follow GLP's pattern. With that , I have tried to subscribe for 22,000 shares of HPH at the maximum price of S$1.383.
The second question that I have posed to myself is something that I do not have the answer to. How the market will react to news is something that no one can easily predict. Besides, I have faith at the moment with MIT and our cash holdings so I do not think that I will be liquidating our positions any time soon. Besides, these damages to the buildings and infrastructure are usually covered by insurances. At this time, my heart goes out to the people affected by this natural calamity. I hope and pray that they are safe.
*Updates:
*More Updates:
I must say, the result of the balloting announcement is a mixture of good and bad news. While the stock is over-subscribed by approximately 2.89 times, signifying higher demands, it does not signify good times ahead as all 24204 valid applications made electronically were allocated with some lots. In our case, it is probably 18 lots at the price of US$1.01 or S$1.294.
16 Mar 2011
STI (closing): 2971.000
Counter Bought/Sold: MapleTree Industrial Trust Sold
Quantity Bought: 8000 shares
Price: S$1.03
Counter Bought/Sold: GLD US$10 Bought
Quantity Bought: 100 shares
Price: US$136.26 (exchange rate @ $1.27955)
Finally, I caved in.As the Chinese saying goes, 留得青山在，不怕没柴烧. Capital protection to our fund is of utmost importance when the market goes southbound. The nuclear fallout from the 9.0 double whammy of a catastrophic earthquake and tsunami that the poor people of Japan felt last Friday has created a panic selling in the market.
Although I felt sufficiently armed and comforted in my limited knowledge of nuclear power plants, the lack of news coming from Japan and the panicky reports from the various news channels (2Bs and 4Cs, as in, BBC, Bloomberg, Channel NewsAsia, CNBC, CNN and CCTV News) meant that the market is facing its own tsunami bearing south. During the first few days of the crisis, I was confident that the Japanese have it in them to see to a proper resolution to the troubled nuclear plants in Fukushima. As long as the reactor cores are kept cool and completely covered with water, there is little threat. Over the days, I began to see a different outcome, one that is shockingly frightening and I hope, will never happen. There are always 2 containment structure, an external one made of thick concrete and an internal one that houses the cores and control rods that is made of metal. When explosions are seen and heard and aerial images shows the concrete roofs goes missing, and steam is being released, I begin to wonder if the water has evaporated so much due to the very high temperature in the reactor cores. These are probably hydrogen gas build up as a result of adding seawater to aid the cooling process, effectively ending the life of the nuclear power plants. If there is a breach to both the steel and concrete containments, then it is a full-meltdown, an environmental pollution that will take years to clean up.
A few days ago, I discussed the possibility of drawing on some money from this fund to donate to the Singapore Red Cross Society Japan Disaster 2011. We should probably drop the money over at the Singapore Red Cross this weekend. Giving is a virtue that I want Chloe to learn. While it is important to be money-wise, it is of equal, if not greater, to be able to have a kind heart.
Coming back to the fund commentary, with a heavy heart, I liquidated all stock positions and took refuge in Gold.
20 Mar 2011 (currently being re-edited)
The fun'd has overstretched itself this month, no thanks to the high allocation rate from the HPH Trust IPO ballot. Therefore, in order to ensure the fun'd is balanced, I have decided to include a third source of fund for this fun'd. If the fund is a one-off inclusion, then here is the breakdown:
Chloe's total contribution till 1st Mar 2011: $9,500 or 9500 units
Daddy's total contribution till 1st Mar 2011: $14,250 or 14,250 units
Based on the above figures, our fun'd has maintained its 2:3 ratio. Our total combined contributions stood at S$23,750.
I have also calculated the Total Asset Value as S$25,032.28. This is worked out from the following:
8,000 MIT shares @ S$1.05 = S$8,368.98
Cash = S$16,663.30
Based on the above figures, each unit is worth $1.053991 as of 1st March 2011. To ensure that the fun'd has enough to pay for all purchases, I have decided to include an additional source of fund at $25,032.28 (pegged at 100% of our total contributions), yielding an equivalent of 23750 units at $1.053991 per unit.
This means that start from 1 Mar, I can no longer treat each month's contribution as 2:3. I must calculate the unit price of the fun'd and allocate our new contributions by unit.
Therefore, as of 1 Mar 2011, the following share units are in effect:
Chloe = 9500 units
Daddy = 14250 units
'WhiteKnight' = 23750 units
Total Unit Share = 47500 units
Per unit share value = $1.053991
Total fun'd value = 47500 units x $1.053991 = $50,064.56
