These days I have not had much time to post due to work and personal commitments. The lack of momentum is affecting my train of thought so why don't I just write whatever I feel like writing today. Be it about the markets, asset classes or even about life. Like I always tell my protege, I love thinking about life and how it really sucks. Haha. Just kidding. Lets get back to reality and maybe some of my passing thoughts or even sarcasm.
The past two weeks have been good for two of my favourite stocks. Auric pacific and QAF. Both of which are still strong buys on my list but I know many of you are too impatient to wait and like higher beta stocks. Over my investment career, I have always liked the under the radar kind of stocks to achieve my alpha and it has worked. So I beseech all of you to consider taking the patient approach to investing and you will see the returns. Be it over 2 - 3 years.
One stock that has moved weaker over the past two weeks has been Dukang which I can only attribute it to the fall in Baijiu prices in China over the past month. The mainland distillers have also suffered in terms of stock price performance so it should not be looked upon as a company specific move.
Was screening the for stocks in Japan recently and for those who know me will understand why I have been so bullish on Japan over the past two years. No thanks to the earthquake and ensuing nuclear fallout, the Japanese market recovery stalled. I believe barring any acts of god that we are on the way to a multi-year recovery in Japan and am looking to put some money there. Problem that I am facing is the weakness in the Yen. I do believe that it is a catch-22 situation because one of the key reasons that I am bullish on the Japanese market is the anticipation of a weaker Yen. Found a couple of stocks which made me interested but I am still trying hard to translate their info from Japanese. When i finally graduate from my Japanese classes I will tell you guys more.
IPOs are all coming back, with the explosive debut of Cordlife and now we are going to see Bumitama Agri make its highly anticipated debut. For me, when there is a flux of ipos coming to the market, it is a signal that a correction is coming. Ipos tend to come in when the market has a sustained rally and when it becomes overbought in the short term. Market volumes have also come down in March and early April. If you are looking to trade be wary, if looking to buy and hold, take this opportunity to buy.
In recent times, it has gotten tougher for me to find anything worth writing about because most of the good penny stocks in Singapore has been sieved out and it is getting harder to find undervalued gems. I am currently looking to accumulate more of the ones I picked so far and probably venture out to foreign markets. Suddenly, I am starting to sound more like Temasek, moving out of Singapore into foreign markets to establish a foothold. The main difference is that I will not have other vehicles for which I can hive off my assets at an attractive price to. For those following the news, will know what I am talking about.
Many of my clients who hold DBS in their stable of stocks have been asking me about what I think. Even the guy whom I play badminton with asked me whether it was a good move or not. For those who have been working with me will know that I have never been a fan of DBS for a very simple reason. Poor management....There is without a doubt that by valuation, DBS is very attractive compared to the other two banks but I would have to put a discount on its valuation for the fact that DBS is country owned and thus may not be thinking so much for its minority shareholders. Their track record for acquisitions has been as good as Whitney Houston's choices in life. Suicidal. That is why over the years whenever DBS is linked with any acquisitions, the stock always takes a hit. For me, this is a clear illustration on why top fund managers steer clear of state owned companies because they have to tend more to the state's interest than minority shareholders. Just ask Sinopec and Petrochina.
Right at this moment, DBS shareholders understand how K-Reit unit holders felt when Ocean Financial Center was bought by K-Reit from Keppel land. Talk about getting F*$ked up your butt. All I can say is, try not to touch companies with poor management record. Leopards will never shed their spots.
Now there are talks on the European crisis rearing its ugly head once again and this time they are talking about Spain once again. The yields are no doubt moving higher at this moment but the speed of the rise and the levels are no where close to what we saw in August last year. The market is not silly and it understands that the Euro crisis is not even close to being solved. The problems underlying are structural and it will take time to solve. This is exactly what the ECB bought with their Long Term Refinancing Operations...TIME. Now the market is watching the moves which the governments will take to address these structural issues and time is of the essence. If the moves are right and the markets are convinced, more time will be given. The biggest danger the world faces now is complacent thinking which will lead to passive behavior in terms of structural reforms proposed. The election cycles are just starting now with the May elections for France, followed by the US and soon Germany. Will the fear over losing their political careers lead to passive behavior by the incumbent governments? That is something which I would advice to monitor closely.
Still too busy with work to look at the company which I wanted to look into. Will write more the next time. Have a good week ahead!
Best,
SVI
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