Thursday, May 31, 2007

We missed the boat! Dow breaks all time high 13,633.08

What a pleasant surprise!

I was aware that Dow had a strong showing last night, after it reversed a -52 pts drop to a +36 pts before I went to bed. I didn't know that it closed +111.74, breaking new high too!

Yesterday there was a FED meeting. The interest rates remain unchanged at 5.25%. Nearly all participants viewed core inflation as "uncomfortably high" and left the rates untouched for the seventh straight session. That left quite a number of economist saying that the fed minutes suggest strongly that the FED might left the rates unchanged for the rest of the year.

Shanghai bourse closed +56 while HK rallied strongly to close +340. Too bad STI was closed, otherwise we would definitely have participated in this worldwide rally too. Dow remains the only bourse strong enough to deflect the direction set by china's stock performance.

Actually what's important is that yesterday's Dow performance. It's tonight. If Dow closed positive, STI wouldn't have any excuse not to rally even though it's Fri. Let's see how it performs later. Dow futures stand at +26. Europe is all green.

Tmr might see some action in SIA and pac andes. I hope more action on pac andes, vested interest :)

Wednesday, May 30, 2007

Firefox 2 rocks!

During market downdays, I always like to post nonsense.

Firstly, it keeps my mind off my bleeding portfolio and all the red ants marching around my watchlist. On the other, it keeps me from doing silly things like

1. Buy more (there's a time to buy bargains, but not now as the technicals don't suppot it)

2. Sell existing stocks (don't, i mean don't buy high sell low)

3. Sell existing stocks short and buy back at the end of the day (i have hit rate of 1/5...I won't do it)

4. Worry sick over it (bulls and bears...yin and yang, can't escape)

Let me talk about the internet browser that I used. I used mozilla firefox, the best ever internet browser since netscape. There's a whole list of things why you want firefox instead of internet explorer - faster, customisable (almost everything!), tabbed browser, and best of all --- extensions.

Yes, you can download extension to make your firefox browser work better. I downloaded a few:

1. Firefox extension backup extension (FEBE) - makes a backup of all of your bookmarks and extension you've downloaded at planned interval you've key in - absolutely a must have! I've lost bookmarks and felt I've lost my handphone...this is definitely useful

2. Fission - Works like mac computer where the progress bar is in the address bar (safari style) - purely aesthetics reasons

3. IE tab - I downloaded this because some website do not support firefox, esp government websites. Using this extension, I can switch between a website opened by firefox or internet explorer, just like that! Nifty extension because I always use this to open my trading platform (DBS and POEMS)

4. Reminder fox - a little notepad that irritates me to good cause - it'll just keep popping out until I've completed my task. Serves as a organiser embedded in your browser

5. Save session - I discovered this yesterday! Saves me soo much trouble. Basically I opened a set of websites everytime I switched on the computer. I don't want to click on all these website daily, so this extension allows me to save a snapshot of the website before I exit my browser. The next time I opened the browser, it'll give me exactly the same websites where I've left off! Must-haves!

6. Smart bookmarks - makes a whole lots of small icons for immediate access to common websites. Makes my internet experience so much better, another must-haves

7. Splash - adds a splash screen. Purely aesthetic reasons. A splash screen like this size pops out whenever you opened firefox. Sort of like a beautiful way to greet your internet experience.

Here's a screenshot of how the whole experience is like:

What's really cool is the ability to add on widgets just like windows vista (actually vista copied this cool idea from mac computer). Widgets are downloadable, customisable applications in built onto your desktop (can be your browser too for firefox). I've downloaded a To-do list, weather forecast, calender, clock, stock index (you can customise this too!). It's so beautifully rendered in, really want to recommend to you!

Here's a screenshot:

The wallpaper is not part of the deal :) I just like how cool apple computers are as I've been using it since I'm a kid till I'm 17.

So YES, there is another world out there besides microsoft! I even have the free office suite program, quite good too. But that's another day another time. Do youself a favour, try out firefox:

Oh no, I'm not paid to advertise firefox to you. I might, if I have more visitors, haha :)

Pac andes results out

Pac andes results are finally out.

Total revenue increased 48.9%, net profit attributable to shareholders increased 49.7% (including exceptional gain due to dilution of its interest in China fishery through share placement). Net profit excluding this exceptional gain increased by 38.1% (instead of 49.7%).

Pretty impressive results. Musicwhiz did quite a brief analysis on the numbers and I posted the link below.

They are going to do a rights issue, subject to shareholders approval. Preshares dividend proposed is 1.08 cts per share and post right dividend proposed is 0.54 cts per share. If the rights issues goes on as planned, the number of shares will double, and the price will drop by half.

One thing to take note is their higher gearing last financial year. Total gearing is 116.9% from 82.3% a year back. That's a lot of borrowing!

(This is so ridiculous...i see pages and pages of balance sheet, income sheet and I just don't know what they are referring!! My goodness...I need to know how to do this kind of things!)

Back to technicals.

CSC made a gap on 22 May on announcement that they won a contract for Marina IR. Looks like it wasn't a breakaway gap as I had initially thought it was. CSC is covering the gap before it can move up. Intermediate support trendline, horizontal support line and gap support gives 0.335/0.340 as a pretty strong support. It shouldn't drop below that. Fingers crossed.

Swiber had been dropping like bird shit lately and it went below ema20 the last session. Swiber is now resting on support at 1.70 but it could give way anytime. The next important support level is around ema50 days and horizontal support level 1.62. Hopefully it'll hold, otherwise swiber will be in serious trouble. It would be especially important to see that the long term support trendline does not break i.e. if it goes below 1.57 or so, we could see swiber finding the next lower support at 1.38. Now that's totally unacceptable (not to mention unlikely, looking at stochastics and rsi as they are going to find support soon).

STI broke out of the rising bear wedge on the downside, as expected for this kind of formation. The good thing is that volume did not pick up when it broke down, at least not so bad. STI tried to go above the support turned resistance trendline but it can't. If it can't go up, it had to come down, and so it did today. EMA 20 days seems a good support for STI, having provided support on 21st March, 30th April and 25th May (basically every end of month, come to think of it). So I boldly claim that it would continue to act as support!

If it breaks below ema20 support at 3487 thereabouts, it might find another horizontal support at 3450 therebouts. The next one would be 3400. If 3400 breaks, all hell breaks loose because STI would go below ema 50 days...very bad. The last time STI went below ema50 days was this year, end of feb where it dropped 120 pts (3.7%). I stress this - STI didn't even come close to ema50 days for like 11 months or so (last year it went below ema 50 days around May and July period). Beyond that, I don't even have data.

My belief is that STI would touch 3450 (also happens to be fibo retracement 61.8%). We still have 60 more pts to drop, haha :)

Good luck and sit tight! Happy vesak day tmr!

Tuesday, May 29, 2007

Another boring day

Market is boring today.

Like a headless chicken without the direction given by Dow, STI just trends sideways. It's towards market close that STI went up. Volume is very low, 1.9 million only. Most of the counters that I had dropped. Oh well, not everyday is Sunday.

Sort of expected it. Most of the company had already announced their earnings (still waiting for Pac Andes though) and there's no news to push STI further. We're in Dow's hands now. If Dow rallied tonight, I think we might see some action, though I doubt it.
This week is also a short trading week with Thurs as Vesak day. I guess can just go for holiday then come back next week, I don't think you'll miss out anything.

Dow futures +24 now, Europe a mix of red and green.

Chapter 2

Have a few minutes to do some reflection on chapter 2 of intelligent investor.

Chapter 2 talks about the effects of inflation. Interestingly, last time I wasn't too concerned about inflation. I thought it was only an academic concept, as useless as newton's 1st law, so to speak. But as I grew older, the diminishing purchasing power of dollar becomes more apparent. Money is a relative concept; it's only worth as much as what you can buy.

It's hard to measure inflation, but a good and conservative 'averaged' estimate of many years would be 3%. The opposite of inflation of deflation - equally not good - where the dollar you have now can have more purchasing power.

What's the relationship between inflation and investment?

Let's examine 3 scenarios that I came up:

1. Put $1000 under your pillow

Assuming inflation of 3% per year, by the end of the year, your $1000 under your pillow will be worth $970. Not exactly a good investment choice.

2. Put $1000 in bank, say fixed deposit at 2.5% (i know it's ridiculous)

After 1 year, your money increases by 2.5%, but inflation erodes that to -0.5% (2.5% - 3%). In effect, you end up with $995. Not bad compared to scenario 1, but over longer period of time, you still lose out. Not exactly a good investment but better.

3. Put $1000 in stock market, with returns of 10% (a pretty okay returns)

After 1 year and inflation taken into account, your $1000 principal becomes $1070.

That's what inflation can do to your investment.

Between bonds and inflation, it's usually said that stocks can offset inflation because the companies can pass on the cost of inflation to consumers, thereby offsetting inflation. But Graham found that it's not necessary true. Inflation offsetting works if the inflation is not excessively high or excessively low.

In this chapter, Graham again stress the importance of this idea: You don't know for sure if anything is going to happen. Hence, he never recommends putting 100% in stocks or 100% in bonds, and one must always maintain a percentage of one's capital in different assets, just in case.

Not really agreeable to this.

But one lesson that stays after reading this chapter this is: A good investment returns is one that at least beats inflation (3%), at least beat long term treasury bills rates (around 5-6% in S'pore). Should try to beat the market average, because if we can't beat the market average, might as well invest in exchange traded funds (ETF). Less work, market averaged returns. Not too bad, I'll seriously consider ETF.

Oh, one more thing. Putting money in cash deposit is actually spending 3% on nothing. Don't do that.

Monday, May 28, 2007

Average monthly performance of STI since 1985

Read an interesting article on business times online just now, thought of sharing it here.

Above is the average performance of the different months of the year. In summary

1. Best month = December (totally agree!)
2. Next best month = January (again, totally agree!)
3. Followed by October, then April and finally May

Statistics also showed that 6 out of 9 Mays were negative months, it's just the three Mays that returned positive are strong enough to bring the average up significantly.

The most volatile month is October, followed by May.

4. The worst performing months = August and september (that's why Oct is good for bargain hunts)

This kind of seasonal data is very very important. It means we should prepare more cash to bargain hunt around Oct to ride the end of season good performance, stretching from Dec to January (so called capricorn effect).

What a boring market today, even though STI was up by 26 points, all my counters dropped. I scanned through sgx announcement just now, here's a few worthy news:

1. Fabchem reported 20% plus minus drop in net profit (lucky i sold all out last yr)
2. Tiong woon won 119.5 million contract in thailand
3. Tat hong reported excellent results - 200% increment in profit
4. Genting - resolution passed at EGM today

US having Memorial day today, so they are not opening. Tmr we'll see how Nikkei, china and HK performs as they will determine our direction. STI really no backbone, cannot move itself..hiaz...

Europe mostly green.

Reflections on the little book that beats the market (blue)

This is the second little book series which I've read. I previously read the green one on value investing. This blue one is also about investing, as opposed to trading. Quite interesting.

The author uses very simple language that explains perfectly what does 'analysing' a company's value means. I'm not going to talk about that. Instead, I'm here to share what the book describes as a magic formula to beating the market (which I view sceptically). The results of data testing over 17 yrs (US market) is indeed very very impressive. Here's the magic formula in my own words:

1. The key concepts of the formula is number 1: return on capital and number 2: earnings yield.

2. The idea here is to rank all the stocks in the market (regardless of large or small caps - it works equally well, better for small caps) using those two central concepts. Rank no.1 is for those with the highest return on capital and a separate ranking is used for earnings yield with the highest earnings yield as rank no.1 too. Add the two ranking together and buy those stocks with the lowest combined ranking (i.e. those with the highest return on capital and highest earnings yield combined)

3. There is a free dedicated website for it :
It's for the US market though.

4. The key thing here is to diversify into 25 - 30 stocks because some of the stocks chosen by the ranking system will suck big time. But the key is that the average returns will be tremendously high, over a long term. It never lost money in a 2-3 year time frame. Each stock is held for a period of 1 yr and repeated application of the formula is need.

The specific formula for return on capital is

EBIT/(net working capital + net fixed assets)

EBIT (pre-tax earnings is used) instead of earnings after tax because this can be used to compare different companies with different debt and tax rates with the distortions.

Net working capital + net fixed ssets (tangible capital) is used instead of total assets. Goodwill and other intangible assets are removed.

Earnings yield formula used is

EBIT/Enterprise value

Enterprise value is the market value of equity (including preferred shares) plus net interest bearing debt

An example provided in the book will make it so much clearer

P/E ratio for company A = 60/6 = 10 (price per share divided by net income per share)
P/E ratio for company B = 10/3 = 3.33

E/P for A = 6/60 = 10%
E/P for B = 3/10 = 30%

You earn 10% for every dollar purchased for company A while you earn 30% for every dollar purchased for company B. P/E for company A is so much higher than P/E for company B, which means you pay more price for the same earnings for A than B.

That makes company B a better buy right? Well not really.

It's better to look at earnings yield or EBIT/EV

EV for A (market price + debt) = 60 + 0 = $60
EV for B = 10 + 50 = $60
EBIT for both A and B = 10

That makes the earnings for both company the same! Whether one pays $10 per share and owe $50 per share (company A) or one pays $60 and owes nothing is the same. That's why EBIT/EV is used to calculated earnings yield rather than just E/P.

But the book doesn't conclude which is a better buy. I have to analyse this myself. In bad times, because company A does not borrow any money to finance its business (no gearing), it is actually better. Company B need to pay interest and might affect its cash flow, especially during recession, so the survivability might be questionable. I think I need more information.

I need to see what's the long term debt to assets ratio is like for company B. Might be reasonable. Argghhh..I don't difficult.

Skeptical as I am (esp about owning 20-30 stocks), I think I learnt some good lessons here on the use of the 2 ratios used in the magic formula. It makes sense.

Saturday, May 26, 2007

TA charts for CSC, Yongnma and Lian Beng

I did a TA on the three construction stocks that I owned, CSC, Yongnam and Lian Beng and found a lot of similarities in them. All of them have ascending triangle formations, a bullish sign. That's another sign that construction play is going to be hot the next bull run, possibly in mid June (that also means I expect the correction to last till then).

Firstly, what's ascending triangle? It's a bullish formation with a ascending support trendline and a horizontal resistance line. An important characteristic is that the volume must contract while the formation is building up. A good sign is an expansion of volume after it breaks out of the horizontal resistance line.

CSC is the first to break out of ascending triangle. The volume decreases steadily and on 22 May when it announced that it won a S$240 million contract for Marina IR, it gapped up on heavy volume. Now it's well supported at 0.370. I think it's a breakaway gap, which means I won't expect to see the gap on 22 May covered up any time soon. 0.370 should be a strong support, followed by 0.330.

Yongnam is also in the same formation, though it's a bit loose. Seems to be in channel trendline (consolidation) well inside the ascending triangle. Still valid I think, since it also exhibits decreasing volume. The two trendlines meet on 3rd week of June, that's the latest time to see a breakout on the upside. I suspect it'll be much earlier than that. If it does breakout, I must see an expansion in volume, something like CSC.

Lianbeng's ascending triangle formation is the most established and well formed. It starts all the way back from Feb/March period, extending over 3 months. I suspect if it breaks out on the upside, the force will be strong on this one :) Again, decreasing volume all the way back from Feb, with well spaced highs and lows defined by the two converging trendlines. Converging point is 1st week of July.

We'll see who wins more of the Marina IR and Sentosa IR. Supposed to come very soon :)

Friday, May 25, 2007

DBS error trade - greatest joke in my trading life!!

No joke man, first time I know of water sprouts in Singapore! My parents sighted the water sprout over at our home at Tanah Merah too.

It happened around 230 pm and lasted for around 15 minutes. Incredible! Too bad I missed the show.

Back to STI. STI didn't do too badly. First of all, it broke out of the rising bear wedge on the downside, as expected. Here's the chart for STI. Quite a lot of interesting things happening today!

Dow finally crumpled yesterday after several days of opening high but closing negative or neutral. As I said, this is a bad sign. If it cannot go higher, it must go down. After down 84 points last night, STI was affected adversely. It went below the lower trendline of the rising bear wedge, which was predicted by me and a forum friend 2 days ago. It came sooner than I expected though, I was thinking next week or the following week.

Anyway, the good thing is that we're supporting by exponential moving average (EMA) 20 days. As long as STI stays above ema20 days, I think we're fine. If ema 20 days break, next level of support at 3450, thereafter is a rather unacceptable support at 3380. I don't think we'll see that yet as I believe underlying trend is still up. This is just a retracement so far as I can see.

Did you guys notice the long shadow of the candlestick today? It touches 3124, meaning that the lowest of today is 3124. You know why? hahah, some joker from DMG broker house sold DBS at $0.27, compared to yesterday's close at $24.5!! That's a discount of 98.9% !!!

09:01:18 23.900 1,000 Buy Up
09:01:14 23.900 10,000 Buy Up
09:01:13 23.900 5,000 Buy Up
09:00:54 0.270 35,000 Buy Up
09:00:53 0.270 22,000 Buy Up
09:00:53 0.270 100,000 Buy Up
09:00:52 0.270 10,000 Buy Up
09:00:51 0.270 20,000 Buy Up

09:00:42 22.614 213,000 X
09:00:30 23.800 4,000 Sell Down
09:00:28 23.900 2,000 Buy Up
09:00:27 23.800 37,000 Sell Down
09:00:16 23.900 10,000 Buy Up
09:00:12 23.900 71,000 Sell Down
09:00:11 24.000 100,000 Buy Up
09:00:06 23.900 1,000 Sell Down
08:59:02 24.000 250,000 X

Below is the chart for DBS. See how ridiculous it is? Screws up the whole chart for DBS! haha :)

There's a 100 lots buy at 0.27. If that fellow sell immediately, he straight away gets 2.4 million in 1 min!! What the hell right?! Good right? No!

The most ridiculous part is that SGX cancelled all the trades at 0.27. Why? DMG said it was an honest mistake, so it was cancelled. The main point here is, if I accidentally keyed in to sell DBS at 0.27, and the trade went through and I said it was an honest mistake, will my trade be cancelled? Or if I want to buy a warrant but press sell instead, am I allowed to cancel because it's my honest mistake?

If this opens up a floodgate of cancellation due to honest mistakes, I'm fine with it. But in my heart, I know that small retailers like you and me had no such privileges. I would have to pay for my mistakes. What sort of double standard is this? Totally unacceptable. Nobody to protect small retailers, sigh...

This error trade caused STI to plunge 400 pts to reach out intraday low, a mouth dropping 11% drop, but of course it got corrected and we just closed -43.

Some news to share:

1. Yellow page - CEO resigned. Wow, looks like big big battle for control at yellow page board of director. Vested.

2. Eng Wah - Rose up 0.170 to close at 0.575, intraday high of 0.610. I believe that's the highest ever for this money losing company. Looks like their strategy of reverse takeover for the japanese drug company works, even though they have a shares placement and today have bad market sentiment. Not vested.

3. Genting - 28 May (monday) have EGM. Have sources might go up to $1.06. Do your own due diligence pls. Vested.

4. Federal - Have sources that say next tues have some breaking news. But be aware that most of the good news have been priced in. Price have been steadily increasing from 0.505 to today's 0.645 for the past week. Not vested.

5. Lian Beng - this one really rumor only, haha :) Close links with Genting is all I can say. Vested small small, 5 lots at 0.350. Sources said hold long term, strictly not for contra.

Above rumors are solely for my information only. Not an inducement to act upon them. As for all types of information taken from any sources, do your own due diligence because I do not bear responsibility for your profits or losses.

Dow +60 now. Europe a mix of red and green.

Like to add that my portfolio didn't suffer much. At most drop 1-3 bids only. It's a sign that I bought very near good support or that the drop in market is not broadbased but restricted to index stocks only. Comparing this with recent big market corrections, this time my damage is minimal. It could be a result of good stocks (minimum china stocks, mainly construction and offshore stocks).

Thursday, May 24, 2007

Chapter 1

In chapter 1, Graham makes the distinction clear between an investor and a speculator/trader. An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Anything which does not have these 3 elements are speculation.

I realised that Graham keeps talking about the margin of safety principle, with regards to investments.

I believe that it's very important to distinguish whether you are speculating/trading a stock or if you're investing in one. Neither have anything to do with the time period of holding the stock. This is in stark contrast to what many have thought - if you're holding long term, you're investing; short term - you're speculating.

Investing requires a analysis of the business in an attempt to find out the value of the business. Graham keeps emphasizing that the price of the stock goes in tandem with the prospects of the business. The sounder the business, the higher the price. But if you're bought a stock that had good fundamentals but had a high price, the 'promise of safety of principal' is compromised. Therein lies the important lesson in value investing - buy a stock for what it is worth in the future, not at the present moment.

That also means that if I bought a stock that had broken new high, regardless of whether it's fundamentally sound or not, I'm speculating that the stock will, because of the maniac levels of buying, push the stock higher. That's not investment, that's speculation.

I believe that knowing whether you're entering a stock based on speculation or investment makes it easier to exit. Why?

If it's for speculation, I would exit when

1. there is no follow through buying after a breakout (loss)
2. Bad market sentiment (loss)
3. Below my cut loss level, usually defined by 8% loss, or below support level (loss)
4. when price target is reached or going to be reached (gain)

If it's investment (meaning that I buy in at a fraction of its intrinsic value to guarantee safety of principal, usually in a downturn), I would exit when

1. The full value of the stock is realised (that is also the moment when momentum buying starts). You sell when you can, not when you have to. (gain)
2. There's a change in business fundamentals that affected the value of the stock (possibly losses)

Did I miss out anything?

It's disastrous when you mixed up speculating and investing. It's worst when you thought you are investing, when you are in fact speculating (like me). As such, it's better to make sure the stocks you buy are fundamentally sound.

I used to buy stocks at high on speculation that a breakout had happened, but when it didn't went through, I proceeded to hold on in the hopes of a rebound when I should have just cut.

I know a stock, called southern packaging. It's very illiquid, because nobody knows it. The price to book value is around 0.76, according to someone who posted it in the cna forum. I'll keep this stock in view as a case study.

Another stock that my broker recommended me was beyonics. It was below book value per share too. Recently it went to realise the its true value, rising from 0.30 to 0.55. Interesting case study. When I know more, I'll go and calculate all these to verify.

CSC reported 127.6% increase in net profit!

I was just talking about STI with any forum friend about the high possibility of STI falling since we're stuck in a bearish rising wedge formation, as posted in the last blog posting.

Today we saw that happening. STI was well supported at 3510, exactly the lower trendline supported by the formation, with ever decreasing volume. I guess we'll be seeing STI rising next week again. This rise is not a good sign either because ultimately, the formation is a bearish sign. Take heed!

STI closed at 3530, down 28 points.

Exciting news!!

1. CSC reported an 127.6% increase in net profit, with revenue increment of 18.1%. Rumors are flying that this year they are going to give dividends, but it turned out to be false. One good thing to take note is improvement in operating margins from 6.2% to 10.4% in FY07. This means more of the 240 million contract they just won will go into their coffer and less into related cost. Excellent, I look forward to it rising tmr!

CSC closed down 0.010 at 0.375.

(It better be, I'm still on contra with 20 lots of CSC at 0.385, with another 5 lots bought much earlier at 0.305. A total of 25 lots!!)

2. Wilmar had a lot of fishy things going on. I was looking at the counter around 430 pm. These are the transactions:

17:05:04 3.600 1,300,000 X
16:59:52 3.360 50,000 Buy Up
16:59:21 3.352 50,000 X
16:59:13 3.340 15,000 Buy Up
16:59:04 3.340 5,000 Buy Up
16:58:01 3.340 43,000 Buy Up
16:57:03 3.320 3,000 Buy Up
16:56:55 3.320 10,000 Buy Up
16:56:06 3.340 700,000 Buy Up
16:55:47 3.320 30,000 Buy Up
16:55:42 3.320 59,000 Buy Up
16:55:40 3.300 5,000 Sell Down
16:55:33 3.320 407,000 Buy Up
16:55:07 3.300 20,000 Buy Up

Kelong anot? At 4:55pm, the price was just 3.30, but upon at closing, it jumped to 3.34 with lots of buy ups. X refers to married deals. The most fishy thing is the closed day matching at 5:05 pm, 1.3 million shares bought at 3.60!! Incredible...what do those big boys know that retailers don't??

There's this BB trader that I know who told me that Merrill Lynch are the ones that bought the 1.3 million shares at 3.60. The funny thing is that they made an error trade!! hhaha, lose a lot of money man :)

It's so fishy they got queried by SGX for abnormal trading behaviour, really funny :)

3. This is the not so good news. Yongnam had completed the shares placement exercise to raise funds for the building of steel fabrication plant over at M'sia. The issue price of the placement is at 0.33 per share, representing a discount of 9.5% to today's closing of 0.365.

The placement is given to Halyconia Asia fund Ltd, a subsidiary of CIMB Bhd, the parent company of CIMB-GK Securities (a research firm). Tmr the new shares will start trading...sure drop to near placement level at 0.33 because value of the company is the same while shares have increased, hence diluting the price.

I can only hope much of this share drop had been factored in since they gave this shares placement announcement last week or so. Luckily I bought my 5 lots at 0.345, at least quite close to the shares placement issue price.

4. DBS had incorporated a new subsidiary - DBS(china) after getting all the approvals and license to operate in China. DBS huat already :) OCBC and UOB, I heard, are still waiting for license and approval.

5. Engwah did 675 million reverse takeover of Japanese firm Transcutaneous Technologies Inc (TTI), an R&D oriented Biotech company. They had already got a selling product, a transdermal drug delivery system, where they paste a sticker onto your skin to deliver the medication to you, instead of using needles. I'm quite sceptical of this. After their failed attempt at Crazy horse, they went into this new business. They are will sell all their cinema business and change their name after the whole thing went through. Quite interesting eh? Oh, they are going to do a share placement exercise to raise funds, at 0.38 per share, representing a discount of 6.17% from last close of 0.405.

Needs a re-valuation of this company that is always in the red.

6. Yellow page delivered not too good results. Net profits droppped 13.1%, net revenue increase 1.6%, meaning that they sell more but lose money. I also realised that 98% of their non-current liabilities are from borrowings. Highly leverage company huh? No wonder their NAV (or book value) per share is 67, so high. I wonder how they are going to survive in bad times. Anyway, they pay good dividends, time to run after I get the dividend. 4 cts per share, not too bad. A total of 7.5 cents per share given for this FY.

Dow futures at -14 now. Europe is all red.

Wednesday, May 23, 2007

Rising bear wedge in STI

Oh my, what a big mistake i've made in the past!

This pattern, which I formerly called the ascending triangle, is actually a bearish sign. In fact, it's called a rising wedge, a typical bearish reversal formation.I was discussing this with a forum friend when he told me this is called a rising wedge.

A few conditions need to be fulfilled before it can become bearish.

1. Decreasing volume as price go up and down inside the rising wedge. We do have decreasing volume if you draw a line marking all the days where we have highest volume.

2. It will become bearish if the price falls below the support line, especially so if we have expansion in the volume when it breaks support line.

Might be negated if price breaks out of top resistance line convincingly.

If STI didn't drop out of support line, we might see a showhand near 1st week of june, where the two trendlines converge. Here, we'll see how gets the upperhand and STI will move accordingly. Usually we won't have to wait till then to see, from my experience.

Take heed! (and prepare for great singapore sale!)

Lian Beng won S$14 million contracts in Maldives

A few news to share:

1. Tiong woon acquired a crane leasing firm for S$6.6 million. Tiong woon itself deals with equipment leasing and supplying, so this should compliment its business expansion plans. I had a bad brush with Tiong woon before. Last year I bought it and sold at a loss because construction sector wasn't that fantastic. Sort of regret now. Oh well, I might look into this company again when my holdings are a little less tight.

2. Yellow page had scheduled the extraordinary general meeting on end of June. The purpose is to settle the resolution of ousting a few directors off the board. Let's see what sort of development this tussle will bring. Yellow page closed -0.030 at $1.41. The 4Q outlook for yellow page isn't strong. Usually it's one of their worst quarter due to lack of advertising revenue as they are preparing their order book for the next financial year. But the dividends should prevent yellow page from sliding. Yellow page is one of the highest dividend yielding stock in SGX. I just don't like its fundamentals. Anyway, their results would be out tmr before market opens. I'll see what sort of dividends they give. Might want to sell off this stock that had been in my portfolio since I started trading last may.

Oh, nearly forgot this: one of the directors resigned with effect from today. He isn't involved in the boardroom tussle, so who knows why? He is supposed to be an expert in directories business overseas, so his expertise is supposed to guide the company ahead. With his resignation, what is Yellow page's direction in the future. I must look at their prospects in the coming earnings report tmr.

3. Lian beng, a construction company in singapore (I've got vested interest in this, bought 5 lots at 0.350 this monday), secured 2 contracts worth USD9.4 million in the republic of maldives. That's an equivalent of S$14 million, a small deal, but a deal nevertheless. The two contracts are for the installation of a wastewater collection and disposal system (my specialty, haha) and construction of buildings for community and educational purposes in Maldives. I wonder since why they actually set up a base over at Maldives to be able to clinch these awards. These 2 contracts will not contribute to their balance sheets for the financial year ending 31st May 2007.

Happy news, but from the price action of today, either there are no insiders speculating on Lian beng, or the impact of the award isn't significant. I nearly missed the announcement on sgx website, until I saw someone posting it at cna forum.

Genting is coming up again. Repeated failed breakouts made a lot of people wary of this stock. MACD histogram is going to do a crossover. Genting broke out of downtrend and stochastics is trending up. Macro wise, if I'm not wrong, genting is going to hold a meeting on 28th may for clarification of certain issues regarding Sentosa IR. Might bring out genting as a speculator's stock again. We'll see.

Sigh...chicken out, never buy when it's down. Looking at it technically, the downtrend from 7 May till now is just to cover the gap on 2nd May. The gap serves as a good support for the stock to rebound. But I was too chicken to believe myself that Straits asia is still a good stock despite losing money then. Must really follow Graham's way: buy when nobody wants it, and sell when everyone wants it. Contrarian attitude is the correct way to go. Once 1.24 is broken, we can go further up.

Dow is up 51 points now. But judging at the way the past few days are, dow might just end up closing neutral to slightly down. I don't like the way this goes, might be heading for bigger retracement. Europe is all green. STI closes 19 up at 3559. Rather good support level at 3540 for STI.

Marina bay IR

Was introduced to this website where they posted pictures of the future Marina bay IR. WOW!

Taken from:

Okay right, first impression is that it really looks like 3 ancestral tablets. I like the concept of the sky garden which forms a link connecting all the 3 towers. It really look big, quite impressive!

I'm sort of looking forward to it. Heard that they are going to introduce brand names in the shopping area which cannot be found anywhere else in singapore. Talk about exclusivity. I wonder if there are any charges to enter the resort, those kind of pay per visit thing. I hope not, cos I'm looking forward to entering it just like I go city hall/marina bay area. My usual haunts.

Night view looks pretty. I guess with the annual fireworks near new year or any big holidays, it'll attract quite a big crowd. Sometime like the harbor area over at HK. This architectural building will definitely boost the sky line of singapore, which some people touted as boring.

More relevant question here. CSC won the 240 million contract. I wonder how much of it will go into their coffer - i.e what's their profit margin? Marina bay area is made of marine clay, bad soil conditions might erode the profit margin. But I guess it's the recognition and brandname (intangible assets) of building such a big project that will propel CSC to greater heights. I hope CSC will clinch a foundation/geotech project over at Sentosa IR too. That will sweeten the deal!

Boring market day, that's why post rubbish here, haha!

Tuesday, May 22, 2007

oh, more newzzzz

Again, a chokeful of news to digest.

Pacific andes posted this announcement
(it's too long, so join them all up without any breaks for the links)

It's about the rights issue. They are going to issue rights (rights to purchase 1 new share for every share you have) at $0.52 per rights. It has received in principle approval from SGX, so I should be getting the offer soon. I heard from cna forum users that in right issue like this, they will send you an offer to accept the right, so you can pay thru ATM or through submission of a form, something like that. I'll update when I know more.

Will I subscribe? DEFINITELY yes! With the rights issue, more shares will be available in the market, thereby diluting the price, but I'll still want it! At 0.52, it's a great discount to the closing price of $1.19 today. I believe it have a great fundamentals. I'll be able to back it up when I know more.

Next, china fishery announced that it had acquired three purse seine vessels in Peru with combined fish hold capacity of 692 m³. That increases total purse seine fishing fleet size to 26. Since china fishery is a subsidiary of Pac andes, it should reflect positively on pac andes balance sheet. Coming soon, the results for pac andes.

Another one..more exciting...yellow page had more boardroom tussle. Confirmed that they are going to hold an extraordinary general meeting to oust some directors off the board. Haha, one of them is Helen Yeo, the who's who name list :) I'll leave it there.

I read more on ST that the 2 persons that wanted to oust those directors feel that the directors are not doing their best to bring out the best in Yellow page. They feel that changing them would revitalise and bring new ideas to the board (I totally agree!). Yellow page would do much better if it ventures overboard rather than stuck in singapore with its meagre advertising base.

Anyway, yellow page closed up 0.050 at $1.440. I guess investor liked that idea?

Straits asia charts getting nice after closing up 0.09 to close at 1.22. CSC closed up 0.04 at 0.375 (what a disappointment, I thought it'll close above 0.40). As promised, I'll only buy when they won contracts. Bought too much actually, 20 lots at 0.385.

Lesson 1: Don't buy in the morning as enthusiastic buyers queue overnight in a bid to get in

Lesson 2: Don't buy so many lots at one shot. A more rational me would have bought on 5 lots at 0.385, then another 5 lots if necessary at another time/day.

I hate myself. Never seem to learn these 2 lessons, keep repeating them again and again.

Oh, I finally sold OCBC warrants at a profit after holding for 3 weeks. 5 lots at 0.32 and 5 lots at 0.215 makes my average buy price of 0.2675 for 10 lots. Made a profit of around $140. Enough already, though I think the charts can support further rise in price. DBS and UOB, esp DBC, made a dash from the start of market opening. This is due to positive news from China that DBS had finally settled their license thingy for operation in china (something like that).

Lesson 3: For CANSLIM theory for short term gains, buy the LEADER not the LAGGARD. I so regret not buying DBS warrants when I was deciding between the three. UOB I straight away eliminate out because of bad charts formation. It was a choice between DBS and OCBC. I chose OCBC because it had more room to run, whereas DBS had already ran. It was so wrong... yes, i made profit in the end, but it could have been less agonising and even more. Good lessons here.

Anyway, enough of warrants for now. No index warrants for me (except exceptional circumstance like dow +500/-500). I'll see if the situation tempts me to buy stock warrants again. Probably not soon.

STI close up 25 pts. Dow -8 now. Europe mostly green.

Reflections for intelligent investor

Just read the introduction of the Intelligent investor by benjamin graham.

It pretty much says that the book is more about investing philosophies and mindset, rather than the exact details of how to select stocks. But I supposed in the clarification of the concepts, they would have to include some sort of examples to illustrate it, perhaps that's where I would have to read in between the lines to get out the gist of the stock selection based on Graham's method of value investing.

The most important points that I get out of the introduction chapter is this:

1. The future value of your investment depends on the price you pay now.

2. A stock that you buy is not just pixels on a computer screen - it represents a business with its growth that has nothing much to do with the stock price

3. To reduce the risk of being wrong, we must practice the 'margin of safety' principle. From other books I've read, it would be two-thirds the intrinsic value of the stock.

Hmm, so far so good. I agree totally. I had some difficulties applying no.3 though. Firstly, I do not know how to know the intrinsic value of a stock. Secondly, it's hard to control the emotions when the stock you like flew off. It's hard not to play catch up with the stock. I guess that is where discipline comes in.

Seems like both warren buffet and benjamin graham are very concerned with price to book value. Book value, as far as I know, can have different name like Net asset value (NAV). Basically, it's just total asset - total liabilities. I read somewhere that it's better not to include intangibles asset like goodwill, branding etc into the total assets.

Alright, that's all for now.

Monday, May 21, 2007

CSC won $240 million contracts for marina IR

Quite a lot of news reported today.

First and most importantly, CSC finally released reports of its wholly owned subsidiary, L&M foundation specialist Pte Ltd, won a 240 million contract for the marina IR. The work is scheduled to commence in June 2007 and to be completed by Feb 2008. This means that at least a part of the contract sum will be reflected in this year's FY :)

I liked the fact that foundational works are completed so soon. Fast in fast out system is very good for asset based construction firms and the quick entry and exit means they have better cashflow. Tmr should see a surge in the price, possibly opening at 0.40 cts (i'm just guessing here!).

Another news is of Yellow page. Yellow page declared trading halt today. Announcement made in SGX mentioned that there are some internal conflicts where 2 non-independent, non-executive directors of the company wants 5 members sitting on the board of directors to be removed. They are going to announce an extraordinary general meeting to make this happen. So happening, reminds me of robinson and isetan not so long ago. I'm not sure what to make of this, when it's so close to their earnings report (on 24 may before market opens). Yellow page went up to intraday high of 1.42 before closing +0.03 at 1.39. ONE of the highest price I've seen for a long time.

I guess no such thing as bad news in publicity.

Today I itchy hands go buy Lian beng, a construction firm, another major player in singapore. That brings my total portfolio of construction related stocks to 3 - Yongnam, CSC and LianBeng.

The analysis is done after I bought, to rationalise my buy, haha! I bought mainly because it broke out of resistance at 0.350 with high volume (2.5 times average 50 days volume). Went I left, it was still lingering at 0.360 and I didn't want to chase the stock so far from resistance turned support, so I queued 5 lots at 0.350, right at the support level. Who knows after a few min, I got the confirmation that I bought it.

Some idiot sell down at matching, otherwise lianbeng was well supported at 0.35 all the way till 5pm. Awaiting breakout with possible target price of at least 0.41. MACD histogram going to cross over too. Shouldn't be too bad a buy, based on technicals.

After the announcement of the first contract for Marina IR, I think that should open up the floodgates of contract to come for the next phase. Since geotechnical foundation works are completed by Feb next year, I believe the next phase should be either steel or concrete based superstructure contracts. Stocks that come in mind would be Lianbeng, yongnam and tiong woon. Tiong woon is not really those hard core construction company, it's more a supporting company that supplies the cranes for heavy lifting etc. I expect more contracts to come in the coming months, latest by Jan next year, more likely Oct period.

How do I arrive at this timeframe? June is the commencement of the foundation/geotech works, May is the announcement for the contracts. Feb next year shall see the completion of the foundation works, so latest by Jan, we should know who are the next contractor(s) for the next phase. I expect it to be even earlier because the scheduling of the works did not be sequential, but rather overlapping. Halving the time from June to Jan (8 mths) and adding onto June, I get Oct period. That means by oct, half of the Save foundation for the IR is finished, so we can start superstructural works on it without waiting for the other half to be completed.

That's my wild guess.

I don't know why straits asia made a sudden rally. Increased 0.060 to close at 1.13 today.

Dow is up 3.6 while europe is mostly green.

Oh, nearly forgot to mention this. Rate hike doesn't seem to do much to cool the heads of investor over at china. China went down a bit when it opens but recovered quickly to close 1.04% up. Seems well absorbed. STI and HSI too.

Sunday, May 20, 2007

Survey time

A short survey. C'mon, try it.

Decision 1: Choose between:
A. A sure gain of $240
B. 25% chance to gain $1000

Decision 2: Choose between:
C. A sure loss of $750
D. 75% chance to lose %1000

I'll talk about it later in the posting, but make sure you chose it now :)

Reading through this book now.

It's called clueless in banking and finance.

It's a brief overview of the entire banking and finance industry, ranging from the purpose of banking to the different types of debts or equities instrument to raise capital. Learnt SOoo much from this book alone that it's even to kickstart more reading if I'm interested in certain aspects of it. Now I now what's tranche, what's underwriting and footsie :) haha

There's this interesting survey talking about how behavioural finance show us why investors do not behave rationally, therefore making markets not as efficient as what we learn.

The survey earlier on was conducted with a sample of 150 people. The majority of respondents chose A (84%) and D (87%), meaning that they prefer to have a sure gain and avoid the sure loss. Is that your choice? haha :)

The rational choice is not A and D. You can actually calculate the expected returns based on the different choices.

If you choose A and C,
1st case: 240 + (-750) = -510 (100%)
2nd case: 240 - 750 = -510 (100%)
Expected gain = - $510

If you choose A and D,
1st case: 240 + (0) = 240 (25% chance)
2nd case: 240 - 1000 = -760 (75% chance)
Expected gain = 240x0.25 + -760x0.75 = - $510

If you choose B and C,
1st case: 1000 + (-750) = 250 (25% chance)
2nd case: 0 - 750 = -750 (75% chance)
Expected gain = 250x0.25 + -750x0.75 = - $500

If you choose B and D,
1st case: 1000 + (-1000) = 0 (18.75% chance)
2nd case: 1000 + 0 = 1000 (6.25% chance)
3rd case: 0 + -1000 = -1000 (56.25% chance)
4th case: 0 + 0 = 0 (18.75% chance)
Expected gain = 0x0.1875 + 1000x0.0625 + -1000x0.5625 + 0x0.1875 = -$500

I'll just spare you the maths and just showed you the essential working to derive the expected gain/loss from choosing different scenarios.

The rational choice here would be either to choose B and C or to choose B and D, as it would result in the likelihood of losing less. If all the 150 participants chose randomly, the chances of getting A and D individually would be close to 50%. The high percentage of respondents choosing A and D means something.

Market efficiency can only work if investors are rational, which they are not. If they can't even make rational choices, how can we assume that they would react rationally and price in all the news and information available to them? I'm not even going to talk about information and news that are not available to them.

Interestingly, the book mentioned that the rational economic choice would have been B and C. They did not even go through the calculation themselves to find out the other rational choice. Hahhaa, says more about rationality in human behaviour.

Want to know my choice? I chose B and C. I did not work out the probabilities before coming up with my decisions. I chose it because in technical analysis, I've trained myself to cut losses and maximise profit. B would maximise my profit while D would minimise my losses, hence my decision. I always prefer sure and smaller losses compared to huge but probable losses.

China raised the interest rate the 4th time this year, in its attempt to curb the overheated economy. I wonder what sort of impact we'll see in HK and Shanghai bourses tomorrow. From past experience, it might even rally further, because it has been priced in.

We'll see tmr.

Friday, May 18, 2007

Timing the market, or time in the market?

Been thinking a lot these days. On what? On the amount of money that I paid to the market (21.7k loss now!) and on my trading strategies and how it could have been better.

For today's market, I just want to make some comments on CSC. I posted a few days ago that the huge buy ups over at CSC is something to look out for. Today too, there are very huge buy up - 10,000,000 buy ups at around 0.330. There are several 2 to 5 million buy ups too, way way too big for retailers to buy. Must be fund/institutional/high net worth individual or groups a.k.a Big boys or BB.

CSC announced trading halt around 12, still pending official annoucement. Rumors are already flying (from reuters and wan bao) that CSC is going to announce contracts for IR sentosa. We'll see the big news from the relevant authorities over the weekend, much like the F1 race.

Been pretty cautious (read:chicken) lately. Missed my fair share of speculative stocks. Might be good. Today is really the best one. Ferrochina - i've been eyeing this the whole morning, but when I read my emails for a few min, it ran up 0.060. luck at all for this year.

Enough of the daily comments. I've been thinking about all my value investing as a strategy, instead of my purely technical based one. I know nuts about FA, that's why I go TA. Not a good excuse, that's why I went to upgrade my knowledge.

Was trying to upgrade my FA knowledge when I came across this wonderfully new book at national library, which I went ahead to borrow. I just finished reading today.

Talks about a lot of issues, most of it I agree totally, after reflecting on my last year's transactions, as well as this year

These are most of the stocks I bought around last year and the price now.

1. Fibrochem: then 1.17, now 2.50, increased 114%
2. Adampak: then 0.22, now 0.44, increased 100%
3. Koda: then 0.50, now 0.90, increased 80%
4. Tiong woon: then 0.375, now 0.675, increased 80%
5. ECS holdings: then 0.365, now 0.565, increased 58%
6. Cosco: then 1.87, now 2.77, increased 48%
7. China essence: then 0.685, now 0.98, increased 44%
8. Pac andes: then 0.835, now 1.19, increased 42.5%
9. Sinopipe: then 0.375, now 0.445, increased 18.6%

Of course there are the bad ones:

1. Longcheer: then 1.195, now 0.650, decreased 46%
2. China diary: then 0.685, then 0.48, decreased 30%
3. Yellow page: then 1.67, now 1.36, decreased 18.5%
4. Media ring: then 0.48, now 0.41, decreased 17%
5. China sun: then 0.715, now 0.66, decreased 8%

What do u guys notice?

1. Cut loss is very important for speculative stocks. Most china stocks are speculative because their fundamentals are not strong. Any ipo with CHINA in it would surely attract a lot of attention. Those that are strong are listed mostly in HK. I don't know why we're getting the 2nd rated ones. Without proper cut loss, minor loss snowball to huge loss.

2. Time in the market is important. I bought the correct stocks a year ago, based on nothing but broker's call. It dropped and it recovered higher than my buy price. Of course, if I cut loss (which I did for some), i'll get nothing.

I guess the point here is to buy on stocks which you are confident. Stocks I buy must be those that I would add more if the price drops!!

3. Now I admit I know nothing (and i still don't) about the fundamentals of those stocks I listed. But even then, the price increment is so much more than the price drop! This amazes me tremendously. I bought last time before knowing any TA, FA...just pure brokerage cover, I'll buy. Look at what happens a year later. Some drops, but those that I did hold would more than cover those that I lose. With proper cut loss and sound fundamental analysis, therefore choosing good stocks shouldn't be a problem. Combining this with technical so that I will buy near support level, I don't see how I can lose money?!

When I'm ready, I'll work out the FA of those stocks I mentioned in this post. I want to see exactly why holding certain stocks ensure profits while some gets in the dump. Cheap doesn't mean good, even I know that. Stocks are cheap for a reason. I WANT to know those reasons for those stocks I bought last year.

I'll work on this ... I will!

Thursday, May 17, 2007

My book is here!

STI went up by 24 pts, after dow closed 3 digits up yst night (+103)

Yst I was just thinking of selling CH offshore, but now, I think can make it already. Saw some reports saying their share shld be at least 0.72, based on their asset value per shares in the market. Anyway, DBS vickers have a target price of 0.66, while UOB KH have a tp of 0.85. I bought near historic high at 0.665 (why am I the last fool?!) so I'll wait. Probably won't add in, already have a lot of positions at hand.

Genting went up and went down. Seriously, I think i'll be better off not looking at it. Come back at the end of this year to see if there's any changes, there's better. Without any news coming from the award tender of the IR, I think all the construction stocks plus genting will not have any major movement. Why are the authorities delaying the annoucement? I thought they are going to announce in May? Half of may is gone, what are they waiting for?

I just need OCBC to inch up a little more and I can sell off my OCBC warrants at breakeven. SERIOUSLY had enough of playing warrants. I'll be happy to leave without a loss and spare me the agony of watching it closely on a daily basis. Straits asia went down to close at 1.07, after a strong opening. I wonder why. Too chicken to buy at 1.07, though I did queue to buy at 1.06. I guess too many positions makes u scared to commit more though I am quite confident of this stock.

My book is here! Thanks to bershire business books, had it imported all the way from US because it seems like all of singapore is out of stock. I browsed through it, quite difficult reading. Let me finish the books that I had in hand from national library first, then I'll start on this. I'll post my reflections as I read through.

That's all for now.

Wednesday, May 16, 2007

No charts today

Not really in a mood to write anything serious.

Trying to get out of several stocks:

1. CH offshore - immediate downtrend. Don't know why I bought it in the first place...

2. Genting Int - beaten up from $1 to 0.925 yst, today rose a little up to 0.955. I believe can hold, but do i want to hold now?

3. OCBC call warrants - medium to long term this is certainly undervalued. But the problem is can I hold for long? My warrants expire in end of july. I bought more yst to average down, something I don't do often nowadays. Hell, I don't even play warrants now. Trying to desperately get rid of this one without losing my pants. I bought yst because there is a sudden panic across the region as they speculate china might do certain measures to control the speculation in their bourses. Inflation data is also coming out yst night. So, I took the opportunity to buy more ocbc. I haven't regret average down.

Others got beaten down. CSC, yongnam are are beaten up very near my buy price. Since they haven't won any contract, I won't look into adding on, even if they went below my buy price.

Straitsasia got me worried. Results out yst but not fantasic, drop 40% net profit because as the management said, the coal prices were fixed 6 mths in advance. So 2006 happen to be the peak of coal prices, that's why their profits dropped yoy between 2006 to 2007. I believe in their future earnings, so will hold. Looking extremely attractive at 1.08, mt entry price (see previous blog posting). But i chicken out, and didn't buy. In the end, it went up to 1.14 before going downhill to close at 1.10.

Pac andes as strong as ever, on the backing of china fishery strong earnings, it went up to close 0.050 up at 1.180. Still waiting for their earnings report, plus news of their rights issue. Will definitely subscribe to their rights. Results should be out this week or next.

My intelligent investor book is coming tmr. I should be a wise disciple of it. Some of the ideas contradict CANSLIM theory and of course TA. Will see what works for me.

Monday, May 14, 2007

Yongnam trading halt ; swiber excellent Q1 results

Yongnam declared trading halt today.

This evening announcement points out that yongnam decided to 120 million new shares at 0.33 (a discount of 9% of today's closing of 0365).

It's a mixed news, if I am to interpret it. From my experience, most shares that do share placement would experience a selldown. But some forum users mentioned that yongnam had a share placement in the past and it skyrocketed despite it. The share placement is used to generate more capital for the acquisition of land in m'sia and for the construction of a steel fabrication plant, with the balance for balancing accounts.

It's good news because they are using the capital raised for expansion purposes. But the market might not think that way. All shares placement penny shares have to be paid careful attention to. But yongnam had won contracts in dubai, together with pending IR annoucement, it might not be such a bad move. I'll see how tmr the market reacts to this news. Most stocks will move towards the price of the share placement, which in this case, is 0.33. I might sell off if the reaction is bad then buy back cheaper at 0.33. See how first. Technically shorting it, haha

Swiber had a wonderful earnings report for Q1 fy 2007. I sort of expected it because today swiber suddenly rallied up 0.14 to close at all time high of $2. From the $1.29 average buy price to $2, it certainly has come a long way. Revenue increase 205.8%, with new profit increasing 101.1% from Q1 fy 2006. Swiber broke out of triangle formatinon, so I guess we'll see more increase in price tmr. Tmr is not a good day to accumulate more swiber. I must remember NOT to buy it tmr!!

HSI had a splendid day, increasing +500 from the start. If and when china bubble burst, we are so going to experience the great depression. Hearing stories on how anybody just don't know anything and invest makes it all the more scary. They seem to believe that the govt won't let the stock market crash before beijing olympics next year. While, I do hope so.

I need to prepare myself for that scenario. Better start reading more on value investing. I believe that's the time to make my purchases on excellent valued stocks and hold for long. Still waiting for my book to arrive from US.

Gems TV is so going to be dead. Issued a bad earnings report and today it had a breakaway gap on the downside. This stock is shorted so badly that volume shoots to 0.12 Billion (from the average of 5 million). Went down 21.7% alone today. This is for educational purpose. Just like ausgroup, this is in the opposite direction - down.

Dow is up 25 points, europe mostly red

Friday, May 11, 2007

Volume trades analysis

I'm free now. Let's take a look at how volume helps us to decide if BB (big boys) are playing and accumulating a particular stock.

This is the trades for CSC.


14:53:21 0.320 10,000 Buy Up
14:53:13 0.320 100,000 Buy Up
14:52:57 0.320 10,000 Buy Up
14:52:52 0.320 50,000 Buy Up
14:52:48 0.320 50,000 Buy Up
14:52:11 0.320 50,000 Buy Up
14:52:00 0.320 300,000 Buy Up
14:51:59 0.320 500,000 Buy Up
14:51:41 0.320 50,000 Buy Up
14:51:32 0.320 10,000 Buy Up
14:51:13 0.320 20,000 Buy Up
14:51:05 0.320 20,000 Buy Up
14:50:46 0.320 10,000 Buy Up
14:50:31 0.320 500,000 Buy Up
14:50:11 0.320 200,000 Buy Up
14:49:59 0.320 300,000 Buy Up
14:49:17 0.320 100,000 Buy Up
14:49:11 0.320 30,000 Buy Up
14:49:09 0.320 20,000 Buy Up
14:48:44 0.320 200,000 Buy Up
14:48:00 0.320 10,000 Buy Up
14:47:45 0.320 20,000 Buy Up
14:47:33 0.320 50,000 Buy Up
14:47:06 0.320 30,000 Buy Up
14:46:25 0.320 20,000 Buy Up
14:46:24 0.320 100,000 Buy Up
14:45:36 0.320 10,000 Buy Up
14:45:35 0.320 10,000 Buy Up
14:44:42 0.320 10,000 Buy Up
14:44:06 0.320 50,000 Buy Up
14:43:24 0.320 20,000 Buy Up
14:42:05 0.320 50,000 Buy Up
14:41:30 0.320 100,000 Buy Up
14:41:20 0.320 35,000 Buy Up
14:41:15 0.320 50,000 Buy Up
14:40:47 0.320 30,000 Buy Up
14:40:36 0.320 20,000 Buy Up
14:40:20 0.320 30,000 Buy Up
14:40:16 0.320 50,000 Buy Up
14:40:08 0.320 20,000 Buy Up
14:40:04 0.320 1,355,000 Sell Down
14:39:32 0.320 517,000 Buy Up
14:39:31 0.320 50,000 Buy Up
14:39:31 0.320 20,000 Buy Up
14:39:30 0.320 5,000 Buy Up
14:39:30 0.320 100,000 Buy Up
14:39:30 0.320 100,000 Buy Up
14:39:29 0.320 500,000 Buy Up
14:39:29 0.320 100,000 Buy Up
14:39:29 0.320 200,000 Buy Up
14:39:28 0.320 100,000 Buy Up
14:39:26 0.320 500,000 Buy Up
14:39:24 0.320 10,000 Buy Up
14:39:18 0.320 20,000 Buy Up
14:39:15 0.320 20,000 Buy Up
14:39:15 0.320 200,000 Buy Up
14:39:05 0.320 40,000 Buy Up
14:39:03 0.320 30,000 Buy Up
14:39:03 0.320 300,000 Buy Up
14:38:59 0.320 30,000 Buy Up
14:38:56 0.320 100,000 Buy Up
14:38:51 0.320 100,000 Buy Up
14:38:38 0.320 10,000 Buy Up
14:38:36 0.320 300,000 Buy Up
14:38:35 0.320 50,000 Buy Up
14:38:35 0.320 10,000 Buy Up
14:38:34 0.320 50,000 Buy Up
14:38:33 0.320 40,000 Buy Up
14:38:32 0.320 20,000 Buy Up
14:38:32 0.320 50,000 Buy Up
14:38:29 0.320 5,000 Buy Up
14:38:28 0.320 100,000 Buy Up
14:38:28 0.320 30,000 Buy Up
14:38:26 0.320 50,000 Buy Up
14:38:24 0.320 200,000 Buy Up
14:38:21 0.320 200,000 Buy Up
14:38:16 0.320 100,000 Buy Up
14:38:07 0.320 200,000 Buy Up
14:38:05 0.320 200,000 Buy Up
14:37:58 0.320 300,000 Buy Up
14:37:57 0.320 10,000 Buy Up
14:37:57 0.320 50,000 Buy Up
14:37:54 0.320 50,000 Buy Up
14:37:52 0.320 500,000 Buy Up
14:37:48 0.320 30,000 Buy Up
14:37:46 0.320 200,000 Buy Up
14:37:22 0.320 50,000 Buy Up
14:37:09 0.320 20,000 Buy Up
14:37:03 0.320 50,000 Buy Up
14:36:59 0.320 20,000 Buy Up
14:36:52 0.320 50,000 Buy Up
14:36:48 0.320 200,000 Buy Up
14:36:09 0.320 50,000 Buy Up
14:35:51 0.320 30,000 Buy Up
14:33:17 0.320 30,000 Buy Up
14:33:07 0.320 50,000 Buy Up
14:31:14 0.320 50,000 Buy Up
14:31:00 0.320 250,000 Buy Up
14:30:04 0.320 100,000 Buy Up
14:29:37 0.320 30,000 Buy Up


Here, the first thing to notice is that there are more pple buying than selling. Hence, buying pressure is high and selling pressure is extremely low. These are signs of people accumulating; which means that buyers are more enthusiastic than sellers. Chances of stock going down is quite low.

If such strong buyups happen when a stock break out of it's 52 weeks high, or out of triangle formation, or breakaway gap, we can be sure of a good long run ahead.

Second thing to note is that the buyups are not small. 500k lots at 0.320 is $160,000. Not a lot of retailers are capable of buying such big lots, contra or not. Such a huge buy ups (personally, anything more than 100 lots is big to me) are signs of BB accumulating. Institutional buys (banks, investment houses, high net worth pple, fund managers) means that the stock will have a lot of room for run ups, cos these people have more info available to them which is not easily available to small time retailers like us.

Watch out for CSC

Thursday, May 10, 2007


Longcheer did something funny.

After posted lousy results, the stock actually increased in price. Well, I take it as a good chance for me to dump this stock. I have not an ounce of regret selling it at 0.68 even though it closed at 0.695 today. FA poor stocks shouldn't have a place in my portfolio.

OCBC even though it posted stellar results, actually closed down. Really what is happening. Somebody trying to reap huge rewards by acting contrary? Hmm...

Today midsouth increased 0.030 to 0.78. But i didn't buy. I bought CH offshore though, on breakout. But it closed down below my buy price of 0.665. Well, lousy luck these days.

Trying to get a copy of Intelligent Investor by benjamin graham, but guess what? When I don't want to buy, I see loads of copies here and there. But when I wanted to get it, all the bookstores went out of stock. Seriously what dump luck I have. Probably have to order a copy online or get from NUS co-op.

Not in the mood for anything. Europe all red, dow -60 now. Tmr another profit taking day.

Wednesday, May 09, 2007


Some stocks recommendation:


This one is from a forum friend. He said tmr is the results of midsouth. Today buyup action is quite good, not much volume and huge lots buyup.

Horizontal support at 0.725
Trendline resistance turned support near 0.725
Intermediate resistance at 0.775
Gap resistance ranging from 0.745 to 0.78...needs to overcome this in order to proceed further
It'll be nicer to see it retrace to 0.725, see it test the support then I'll be more confident of it

Lian Beng

News from my broker told me that there are 3rd hand rumors there genting and lian beng have close relationships...might end up having major contracts.

Disclaimer: Not an inducement to buy. Do your due diligence, and I bear no responsibilities for your losses or gains. I post it here mainly for my own research and documentation.

Superb rebound by STI

A mix of good news and bad news.

First the bad news. Longcheer reported 3Q results today. The heading reads "Longcheer holdings 9-month revenue rises 13% as handset sales volume soar 50%; 4Q FY2007 expected to better that of 3Q2007".

Just reading the headlines seems good. In the past, I'll just settle on the headlines since I don't know how to interpret the financial results. But now, looking closer I realise a few key findings:

1. Sales volume increased 46% in 3QFY2007
2. Total revenue till end of 9 months (who the hell calculates this?!) increased 13%
3. BUT net profit drop 15% from 9M06 to 9M07!
4. AND net profit drops 54% from 3Q06 to 3Q07!

If sales volume increased so much but net profit still drops, it just means their profit margin is decreased. Equivalent of selling more things but earning less. Net profit drops 54% is totally unacceptable, though 3Q is not their strong quarter.

Alright, that's it. DUMP LONGCHEER. Period. No need to look at how the management thinks if 3G will drive the growth or something. I don't want to hold it anymore. I don't even want their dividend if there's any, not interested in this cancerous tumor in my portfolio anymore. Tmr I shall see the remaining 5 lots I have.

Next one is better news. OCBC, which I've bought the warrants, reported better than expected results.

Net profit increased 60% yoy, and this excludes a one off gain of 90 million for the sale for an office property (which is the RIGHT way to count net profit). Revenue growth is 26%. Market expectation for OCBC was 34% and OCBC beats it hands down and it closed up 0.1 to $9.50.

My real call warrants have no volume (i purposely bought an ultra ulu warrants to shield myself cos I can't monitor daily) but my game warrants still not bad. I also bought synear call warrants, pending on their excellent results out this fri. Earn 4000 bucks in the game (bought 80 lots). HOW I WISH I HAD ACTUALLY BOUGHT IN REAL LIFE, just freaking 5 lots I happy liao. I just bought the synear call today and it increase 21.62% when I came back...sianz..

Third news -- yongnam secured 60 million civil and structural steel works contract in dubai, expected to complete by mid 2008. As for all construction projects, payment is in stages according to the project stages, so it'll contribute positively for the current and the next financial year. It went from 0.34 (lowest intraday) to close at 0.375, almost hitting the target price set by some research company weeks ago.

Just a side note: this blog I really spent a lot of time researching the facts and doing out the charts. At the end of the day, I felt better, regardless of whether I made money or not, because I felt that I learnt a lot. Guys, if you're in this investing business, I suggest you do the same too. It's the fastest way to build up your knowledge. To build up your portfolio, first build up your knowledge. At times, I can spend up to 2 hr doing everything for this tiny space in internet. It's worth all the time. Sometimes there's so much to say that I forget stuff...

Swiber and SAR went up too fast. Didn't even have time to load up already started cheonging. Esp Swiber. I feel that swiber is just waiting for general market sentiment to clear out before rallying all the way to hit $2. SAR also, looks like all my entry position all over-run by today's movement. Oh well, I'm not complaining.

Later tonight at 215 am, FOMC is going to have meeting. General consensus is keeping rates the same, but it's the vote and accompanying statement that might shed some light on future rate hikes/drops. As of now, dow is not going to have much movement.

Here's the list of results that will be out on Thurs and Fri


ECS holdings
Haw par corp
Jardine C&C
Petro Food
Pine agritech
Sunningdale tech
Straits trading


Allied tech
Parkway hldings

My portfolio goes back to less than 22k loss! Great trading tmr!

Tuesday, May 08, 2007

Confirmation of yst's distribution

Another boring market day...just keep falling.

Today marks the 2nd day of fall, confirming yesterday's distribution. If we are alert, we can always see the signs of market retracement long before others and get out safely. Yesterday's average volume, opening up high and closing negative is a sign already. Today is just the confirmation.

Most shares fell. Not unexpected of course.

Swiber made an annoucement that they won 21.3 US million offshore installation project in indonesia. They really powerful, keep winning contracts. Once the base in Brunei and middle east is established, I think can look forward to getting more. I'll be looking for more opportunities to add more to this stock. Before that, of course must look at overall market sentiment.

UOB reported 17.9% increase in quarterly profits, slightly below expectation of 20%. Somemore there's no dividend, maybe that's why it dropped. I hope OCBC can do better tmr at lunchtime, then my warrants will have hope.

Possible entry points for stocks

Straits asia resource (SAR)

Support at 1.07
Fibo retracement 61.8% at 1.08/1.09
Trendline support around that level too.
Possible entry position will be at 1.07 to 1.09. It's impt that trend line support is maintained, if not, I won't add onto my position. Closing price of today already went below my buy price of 1.13.


Charts dun look too good now.
Possible entry points is at short term support : 1.65
and medium term support: 1.40

If it hits 1.65, I might enter again, depending on other indicators. Weekly charts show more might delay adding position. Anyway, I'm sitting comfortable with profits at my average buy price of 1.29. It's a long way down from where I buy.


Genting is still inside the triangle formation formed from weekly charts. As long as it does not go out of the formation on the downside, I'll have faith in it. Interestingly, resistance turned support line, horizontal support and lower trendline of triangle all meets at the same pt. What does it mean? I don't know. That pt happens around next week, so I think we can expect a rebound. Need a news trigger to boost genting.

I'm not looking to buy more of genting at this moment.

STI should be finishing its downturn soon enough. In fact, I'm expected it to U-turn at 3420, which is both the horizontal support and lower trendline of triangle formation. Hope it doesn't break the lower trendline. If it does, next level is 3350.

I didn't manage to get any lots for yuanbao IPO again! unlucky, always didn't get any. I hope STI hits 3420 in the morning, then rebound from there just before lunch, in time for OCBC results. Market expectation is 34%. Judging from DBS and UOB, which isn't too far from expectations, I think OCBC should be around there too.

Cheong ah!

Monday, May 07, 2007

First day of distribution

Today STI went up as high as 3520 before tumbling down to -8. HSI too. Volume is average and not low.

This marks the first day of distribution. Could be profit taking or just the start of the retracement. Quite a lot of my counters are sold down, but unlike I'm not cutting most of them because now I really know what I'm holding.

Those speculative ones with weak charts are the first to go off. I'm talking about Genting and longcheer. Yongnam and CSC are for medium term, so I won't look at it now. Swiber and straits asia are for longer term, with solid business and new contracts kept coming in. In fact, if swiber or strait asia fall more, I'll sell those lousy ones and buy more, esp Swiber.

My OCBC call went up closer to my buy price, still waiting for it to rally upon OCBC's results. Looks like UOB going to announce results tmr, and not today. But today the price of UOB fell (well, OCBC fell too, to compare).

Too tired to do any analysis or chart reading.

Too bad I'm not around the whole day. I joined the warrants hotshot competition (it's free, you should join too to experience what it's like to trade warrants - educational experience) and today is the first day of trading, but I didn't do any trades. I would have bought HSI calls, and LOTS AND LOTS of OCBC and UOB call warrants. Haha, tmr i'll got hoot tua tua for OCBC and UOB calls.

I also applied for Yuanbao IPO. 20 lots at offer price of 0.40. Again, like buying 4D, see if I get any lots. Heard it's very hot, so not likely again. Grey market area is around 0.80, so easily 200% profit if I get any lots. I'll know by tmr 7 pm.

Dow +32 now. Europe a mix. Let's hope the pent up excitement at China's week long holiday at provide the last burst of fire to light up this bull run. Cheong ah!

Friday, May 04, 2007

Straits asia trading halt?!

Wow, can't monitor today, but STI cheong so much, again confirming the rally displayed over the last 3 days.

Volume is still heavy though it's lighter, possibly because of the weekends. HSI overcome the resistance at 20,800 already, must be an exciting day!

The counter that shocks me somewhat was straits asia. During lunchtime when I checked, the counter was trading like 1.15 or something. I was still wondering why it
suddenly dropped so much when I realised that today is the XD date. They are giving off dividends and I didn't know!! I hope this doesn't happen again, I ought to be more aware of this as it could aversely affect my stock price.

Below is the news extract that caused the stock to halt trading at 2pm and resumed trading with a vengeance at 3pm today
4 May 2007


Straits Asia Resources Limited ( SARL ) is pleased to announce that it has secured the rights over a large coal tenement in Central Kalimantan situated some 50km east of the Mt Muro Gold Mine that it operates for its Australian parent company. The tenement is adjacent to BHP sMaruwai Coal Project, which hosts a world class deposit of high quality coking coal and is currently being brought into production.

A first stage programme of sampling and field mapping on the property undertaken by
consultants, has confirmed that the tenement contains significant outcrops of both high calorific value coking coal of Eocene origin as well as Miocene thermal coal.

A second stage programme currently underway has identified that some 35 outcrops of Eocene coal occur in a two km wide belt that dips southerly at 18º to 50º. Within the belt there are at least eight seams which range in thickness from 0.25m to 2.5m and have strike lengths of 2.5 to 4 km. The exact number of seams is yet to be confirmed and will require further field work including drilling. From initial sampling, the calorific value of the coal is around 8,000 kcal/kg (adb). In addition to the Eocene coal, about 60 coal outcrops of Miocene coal have been located in an eight km long curved formation. The seams generally dip to the east at between 10º and 50º. The
coal seams identified to date are between 0.15 to 1.0 m thick, but in many places the absolute thickness has still to be measured in test pits. Potentially, more than 6 seams within the formation have strike lengths that vary between 3 and 6 km. From previous work it is known that the calorific value of the coal is around 6,000 kcal/kg (adb).

David Toms, Chief Executive Officer explained, A key feature of SARL s expansion strategy is to widen its operating base beyond our highly successful Sebuku Coal Operation. The new Laung Project area is potentially very exciting as it forms part of a region that looks set to underpin the next wave of coal supply growth from Indonesia. Our team s experience in developing projects within Indonesia gives us the expertise and resources to successfully develop this opportunity at a time of increasing demand for coal products.


Straits asia went as high as 1.31 before closing down at 1.22. I think the research house needs to upgrade tp already. The flag target of 1.21/1.22 has been reached and is far exceeded because of the positive good news. This is a good lesson that not all stocks will far after they declare XD. I've seen 2 stocks that didn't fall this week already. One is ferrochina (even went up sooo much) and the other is straits asia. Theoretically, the price of the stock will drop to reflect the value, but sometimes sentiment for the stock is so strong that the drop will be negated.

Genting didn't break out...oh well. Let it accumulate more first. Support at 0.985 held, so I'm not worried. I guess we really need to wait another 2 weeks. We should see a breakout on the upside or downside by the 3rd week of May. I'll hold on till then, unless something drastic happens.

DBS released a set of marvelous results: 19% increase in year on year, 11% increase quarter on quarter. That fits into the expected quarterly rise in profits of 12% I posted yesterday. I think OCBC shouldn't do too badly either. On hindsight, I should have bought DBS. Buy the leader, not the laggards. And the leader in banking is DBS, or UOB, definitely not OCBC I think. Oh well, we'll see if the same expected profits is true for UOB on monday night.

Today my OCBC call warrants fell a bit. OCBC didn't cheong as much as I like today. Not a problem as it's a fri. Not a lot of people wants to hold overnight because of the uncertainty.

Dow perform magic again. Now it's +34. I haven't seen dow so strong before. It's been the dun-know-how many consecutive rise in price. I've checked the long term charts (since 1935) for dow, and found that it's surprising bullish. Maybe got time I'll analyse more. It's interesting because I've never used such a long charts before. The support/resistance and trendlines for this kind of long term charts will be super significant.

I hope when China market opens on monday, they would realise how much fun they had missed out on their week long holiday. Cheong again! Europe side only 1 red, the rest all green :)

Haven't posted this for some time (i forgot), total loss: 22.2 k