Selling off 2 of the conglomerates to accumulate cash

I took the opportunity today to continue taking profit off the table from my 2 holdings - SIA Engineering and ST Engineering on a rare upside day. Both stocks have given me much profits from the moment I bought them almost 2 years ago. I just have a feeling that both stocks will go much lower than their current market price which is not warranted given their flat earnings, high historical PE and weak market sentiments.

 

As a result of these sales, I am now sitting on a huge cashpile to take advantage of the current weak market sentiment. I can just hope I am right.

 

I'll pick ST Eng - target @ 3.60 and SIA Eng - target @ 4.40 again when prices have turned more attractive levels.

Give your best and Expect the worse

My Sunday mass priest which I went to at St Cathedral on Sunday preached about "Giving your best and Expecting the worse" That way, you won't feel disappointed in life. The fact that there are people who approach life this way shows that there is some evidence to it.

In life, we may see some people who give the least but expect the best. These are the types of people who often would be disappointed the most. Next, there are people who give their best while expecting the best result as well. This is not wrong in the first place but if things do not work out well in the end, there will be even greater disappointments in the end due to the time and effort they have put in.

 

By expecting the worst result, you essentially kills off any hope of disappointment. So any slight positive outcome from it will be treated as a good result.

 

For investor, I would assume it is hard to expect the worst result in the stock market. Mr. Market can take a swing from the very bad to the very good in a number of days. But I certainly hope that investors out there can take prudence in the recent market conditions and hope for the worst result you can endure.

Just for Fun: Toilet in Japan (One of the funniest I have ever seen)

We all know that Japan has a lot of weirdo stuff. So when I went to Japan recently and into their toilet to take a pee, guess what I've found:

 

 

Apparently, the idea is that you will need to aim correctly when you pee and you will win the round. This way it will encourage people to aim properly when they pee and over the course of time, the toilet will be very much cleaner. It will be interesting to have this installed in Singapore toilet of course.

And for the record, I win one and lose twice when peeing. Apparently, my aiming suck!!! :( LOL

Accumulation of REITS play in turbulent times

When I was in Kyoto recently, I climbed up multiple of stairs on my way to reach the Kiyomizudera temple. But on my way down, it was less tiring and it took me lesser time to reach the bottom. The stock market reacts the same way recently. It took a few months to gain momentum to reach the top only to give it back at a much faster rate in a few days time.

The recent market pullback was due to both fear of Fed ending stimulus as well as the weak China PMI index. For the former, this is probably not the first time you and I hear about this. We all know that the Fed is going to reduce its bond buying purchase later this year or early next year on condition that the economy becomes better. So economy better would translate to earnings better. The only jerk movement in the market currently is probably due to fear of easy money flowing out as a result of post QE, thus the huge selldown. 

I bought 2 lots of Ascendas Reit today at the price of S$2.17. Ascendas Reit has been on the uptrend from July 2012 till May 2013, only to give back all again in a few weeks. I personally find Ascendas Reit to be attractive at current levels. It is yielding back to the 6+% levels again after we saw a period of yield compression not too long ago (At the peak, it was only yielding 4.3%). My only concern would be the placement they had earlier in the year which would dilute DPU to shareholders. I certainly hope they can increase their DPU payout which will reward long term shareholders.

I will be a long term shareholder and the only thing that I care is the dividend cashflow I will get for the rest of my life. When market goes down, it presents the opportunity for both you and I to pick up these valuable shares at a cheaper price than before. Hence, it is important that you get your own cashflow going to make sure that you have the sufficient funds to add when such opportunity arises.

"Jun 13" - SG Transactions & Portfolio Update"

Counters	No. of Lots	Average Price (SGD)	Total Value (SGD) based on average price	Market Price (SGD)	Total Value (SGD) based on market price	Total Dividends collected (SGD) since purchase
FraserCenter Point Trust	18	1.85	33,360.00	1.985	35,730.00	1,509.00
SPH	7	4.18	29,310.00	4.33	30,310.00	350.00
Vicom	4	4.91	19,640.00	4.73	18,920.00	0.00
SIA Engineering	3	4.12	12,360.00	4.92	19,680.00	210.00
First Reit	10	0.89	8,900.00	1.24	12,400.00	693.00
Ascott Reit	9	1.305	11,745.00	1.33	11,970.00	386.00
Neratel	20	0.46	9,200.00	0.62	12,400.00	1,200.00
SembCorp Ind	2	5.44	10,880.00	4.94	9,880.00	300.00
Boustead	7	1.15	8,050.00	1.34	9,380.00	140.00
PLife Reit	3	1.85	5,550.00	2.50	7,500.00	635.00
Second Chance	17	0.43	7,210.00	0.435	7,395.00	456.00
Ascendas Hosp. Trust	7	0.89	6,250.00	0.87	6,090.00	319.00
STX OSV (Vard)	5	1.245	6,225.00	1.145	5,725.00	0.00
ST Engineering	1	2.82	2,820.00	3.99	3,990.00	1,378.00
QAF	3	0.71	2,135.00	1.01	3,030.00	140.00
Noble	2	1.12	2,240.00	1.025	2,050.00	40.00
Total SGD			175,875.00		196,450.00	7,756.00

Firstly, I would like to apologise for the lack of posting in this month as I went for my honeymoon trip with my wife to Japan (Hoohoo, I'm going to post all the fun pictures in Japan this weekend).

 

Well anyway, perhaps I was lucky to be away too. It was a turbulent month for the stock market all across the globe as we see volatility spikes up increasingly higher. I was fortunate to have rebalance my portfolio a couple of months earlier to fundamentally good individual stocks which had strong balance sheet. Even with such downturn, my portfolio has not been affected too badly in this case.

 

For the month of Jun, I have added 2 lots of SPH at S$4.29. There are a lot of investors whom I know that are awaiting for the SPH Reits to be listed in July. There are even more investors who are awaiting to see what the SPH management next move going to be with the additional cash. In my opinion, it has been a good move by the parent SPH to list off its properties to the REITS and whether or not they will put the money to good use will be part of the management skills to find value either in media or property business. The management will do well I reckon.

 

I am still awaiting for a couple of stocks to get lower (E.g: Suntec, Cache, FCT, MIT, Comfortdelgro) before I make further moves into the market. As it has been repeated many times by fellow bloggers, cash is king in times of such opportunity. It differentiates the good and the bad and the best from the good. In the meantime, stay vigilant and enjoy the reaps of your dividends in the coming months ahead.