Wednesday, October 17, 2012

Learn From a Fool - Believing that I Can Find a Ten Bagger

I wrote two posts recently about my investment mistakes and some mistakes that I nearly made.  I guess that as one grows older and has a longer time spent in investing, one will certainly make some mistakes here and there.

The next mistake I will like to highlight it a mistake that can perhaps only be described as ..... sheer craziness.

There is perhaps this unspoken dream amongst investors to find that ten bagger stock - the stock investment that will return your investment capital by ten-fold.  That is an alluring argument since most investors start off with a small capital base and to multiply your returns with a 5 to 10% returns seems almost meaningless.  After all, a 10% return on a $1000 investment is only $100 in profits.  Yes, we all know about the effects of compounding.  But in the Singapore stock market, most stocks don't make 10% year in and year out.  They go up 10% one month and drop 20% the next month.  So it is almost impossible to get a consistent 10% return every single year.

But most people still hang on to the dream that they might find a stock that will appreciate in value by 10 times or more.  How many stocks are actually capable of doing that in the Singapore stock market?  Some times, in the blind pursuit of such a stock, many investors throw in lots of money on a penny stock hoping that it will increase in price by ten-fold.

How possible is that?  You judge for yourself.

Monday, October 15, 2012

How To Buy US Stocks in Singapore

I received a query from a reader about how to buy a particular US stock from Singapore.  This is a common question that I get and I thought that I might as well answer this through a blog post instead of replying to the email.

First of all, you will probably need a brokerage account.  When you open a stock trading account with a brokerage firm like UOB Kay Hian, they will give you the option on which markets (e.g. Singapore, Hong Kong, U.S) you want to trade in.  There are a few particular forms that you will need to fill in. To trade the US market, you will need a W8-BEN form which is downloadable from their website (usually).

I leave you with a few links that might be useful if you are interested in opening a trading account. As it is really self-explanatory, I will leave it up to the reader to navigate the technical details of how to open a stock trading account to buy US stocks that are listed on the US stock markets.

  1. UOB Kay Hian.  http://www.utrade.com.sg/index.jsp  (go to the top menu bar on Getting Started and read the questions.  Pretty self explanatory)
  2. POEMs.  http://www.poems.com.sg/ (go to Getting Started on left column)
  3. Standard Chartered.  http://www.standardchartered.com.sg/personal-banking/services/online-trading/en/index.html
  4. OCBChttp://www.iocbc.com/


Sunday, October 14, 2012

Dynasty REIT IPO

Dynasty REIT is the first RMB denominated REIT to debut on SGX. The sponsor is ARA Asset Management Ltd and its estimated yield will be around 7%.  The IPO price range is from SGD0.86 to SGD0.94 with expected listing date on SGX on 30 Oct 2012.

Dynasty REIT holds commercial properties in Nanjing, Dalian and Shanghai.

Given that this year seems to be bumper year for IPO, I think it one should proceed with caution.  Singapore REITs are trading at a high price now and Mr Li Ka Shing is probably a good market timer when it comes to cashing out of the property market.  As the saying goes, buy low sell high.

I am not vested and will probably not be subscribing for the IPO.  I don't usually subscribe for IPOs anyway.





Sunday, October 7, 2012

A Fellow Investor Passes On - Only learnt the news today

As I was flipping through some investment magazine today, I just read the news that Mr Dennis Ng had passed away.  I had a particularly weak feeling in my stomach as I have sort of "known" Dennis through his regular posts in the old Wallstraits forum and also seen him appear on TV as well as youtube videos.

Though I never met him in real life, my knowledge about investments and personal finance would have been much poorer without his selfless sharing.  If I recalled, he even left a comment on this blog before though I can't really remember which post it was on.  He also contributed to CPF's IMSavvy site.

To find out about his passing so late is quite a shocker to me.  He left at a very young age and certainly was still in his prime.  A weak feeling went through my entire body as I read and re-read the news time and again.  He passed on in Jul 2012 but his knowledge that he has shared will probably endure in the minds of those who were willing to accept his ideas.

It is sad to know that Singapore has lost somebody who was passionate enough to stand up for his beliefs in personal finance.This news is only a stark reminder to me that life is too short to let it pass it by just like this.  Enjoy your life even when you have not accumulated your first million. My heart goes out to his family and friends.

Friday, October 5, 2012

Learn from a Fool: Mistakes I Almost Made Last Month

I almost made some serious investment mistakes last month.  While reading various analyst's reports, I came across trading BUY calls  for Bumitama Agri and Golden Agri.  In what was an almost rash moment, I was very close to buying into those shares hoping to make a quick buck that just seemed so tempting to resist.  After all, the upside forecasted by the analysts in their target price suggested that I will get a good return on my investment.  And besides, I had also liquidated quite a fair bit of my other shares.

It was good that I was too busy to think much about it over the past weeks and so I did not enter into any positions.  The prices did go up a little and finally slipped due to expected weak crude palm oil prices.  Apparently, there is going to be an oversupply in the near future and palm oil prices are expected to be low in the near future.

It shows that one should not be too quick to jump into investment decisions based on other people's analysis.  At the end of the day, all forecasts and projections are just anyone's guess.  We can make educated guesses but that is what it remains at the end of the day - just an educated guess.

Monday, October 1, 2012

Ng Teng Fong Family - Singapore's 40 Richest

Ng Teng Fong, born in 1928  in the small rustic prefecture-level city of Putian, located within the eastern province of Fugian, People’s Republic of China was never a stranger to hard work.  As a boy and eldest of eleven siblings he learned early on the value of perseverance.  His parents moved the family to Singapore when Ng was at the tender age of six to pursue a family owned soya sauce factory and grocerry shop.  He worked arduously to contribute to the success of his family’s business as a factory hand and repairman of bicycles for years and as the eldest son, was expected to carry on the family legacy.  Ng Teng Fong however had other aspirations, which to the chagrin of his parents did not involve the soya sauce business.

In 1950, Ng set out to realize his goal of becoming a business mogul in his own right.  What he lacked in formal education he made up for in desire, ambition and internal fortitude.  After a failed provision shop venture, Ng was able to rebound acquiring enough funds to establish his own property development company in 1960.  Under the capable tutelage of billionaire Eliya Thamby, the Far East Organization (FEO) was born and all of Ng’s dreams were finally realized.

A billion dollars is quite an outstanding net worth for any family let alone one person.  The astronomical figure has easily made Ng Teng Fong named number one in Forbes Asia while he was alive. And although rich beyond comprehension, his lifestyle was a complete oxymoron to his financial worth.  Not one to indulge in the flamboyant and extravagant self-deserving life that most billionaires thrust themselves into; Fong lived a rich but humble life.  Although one of the largest real estate developers in Hong Kong, Fong lived in the same house for over thirty years and was known for packing his lunches.  The simplicity of his lifestyle was in direct contract contrast to the fortune he had accomplished.  Perhaps his simple lifestyle was because of his humble means that he was raised, or being in the position of poverty as a young man may have been the reason for his modest living.

As the first of its achievements FEO developed a housing community comprised of 72 terrace houses at Jalan Pacheli in Serangoon Gardens, in Singapore.  These homes, as part of the now exclusive Singapore community, sold for $20,000 each in 1962.  Following closely on the heels of this success Ng ambitiously threw his hat into the hotel arena constructing a $5.5 million Singapore Forum Hotel on Orchard Road.  The first in a very illustrious portfolio of luxury residences the Forum Hotel boasted an Asian inspired experiential experience that is still coveted today.

With the success of that development, the company ventured off into hotels.  From there, his developments continued to flourish, in hotels, residential developments and other endeavors.  And although he was on a steady slope of success, he did nearly go bankrupt when a local institution withdrew credit facilities.  However, with creative financing strategies, he rebounded and maintained his successful and ever growing business in the long run.

Ng established many companies throughout his career and in addition, he would purchase large land opportunities for retain and commercial developments.  He was also aggressive at purchasing land during the property crash in the early 1980s, which later proved to be an intelligent business move. His investments and smart business practices sustained his companies and businesses through downturns.  He became known for his prudence in property and acquiring new land.

After several decades of diversification and expansion Ng Teng Fong had launched his company into the forefront and by 1994 his portfolio was estimated at HK$60 billion in property holdings in Hong Kong.  His expansion endeavors dubbed him the “King of Orchard Road” as he continued to exercise dominion over Singapore’s prime shopping district with the construction of Lucky Plaza in 1978, Orchard Plaza in 1981, Far East Place in 1983 and Claymore Plaza in 1994.

As his net worth continued to ascend into the higher billions, Ng remained grounded.  The Sino Group’s famous developments include the Conrad Hong Kong grand Royal Pacific hotels, Central Plaza in Wanchai and the Centrium in the Central district. He became one of Hong Kong’s largest real estate developers and one of the largest landholders.

Ng Teng Fong’s financial savvy coupled with his aggressive acquisition practices preserved the health of FEO even through several economic downturns.  The patriarch Ng Teng Fong, died at the age of 82 on February 2, 2010 of a cerebral hemorrhage and is survived by his wife, Tan Kim Choo, his two  sons Richard Ng and Philip Ng and seven other children. At his death, Ng was at an estimate 7.8 billion dollars.
Today the estate is estimated to have about a net worth of $9.2 billion with the number one spot among the 40 richest families in Singapore.   His true rags to riches story is one that only dream of accomplishing.  As Forbes Asia richest man, his inspirational professional journey led him to develop over 1,000 properties.  His sons carry on the family business.

Ng Teng Fong left a legacy of hard work, financial prowess and dedication.  His two eldest sons have equipped with their father’s financial savvy and have continued along the same successful current of business.  Philip Ng is an MIT graduate and manages Singapore's interest (FEO) while brother, Richard Ng manages the Hong Kong side of business (Sino Group). Together, they are the coexcutors of their father's estate.  A hospital to be built in Jurong will be named Ng Teng Fong hospital.

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