Recent Actions - April & May 17

Just a quick update on my stock related activities for the past two months.

S$1,282 contra loss on Rotary Engineering.

S$590 M1 dividends received.

S$121 Comfort Delgro dividends received.

S$400 Capitaland dividends received.

S$97 Suntec Reit dividends received.

 

On the watch list, some of the counters have been inching towards or have reached my buying target price.

I am keeping a close eye on:

ISOTeam - to add more on further dips

Raffles Medical, ThaiBev and Wilmar - to initiate position

Will enter when the time arrives.

 

I have not been that successful in trading recently. However at least I know what went wrong. Will definitely keep these lessons in mind.

Last but not least, I hope to be more active in the market in the coming months. But I won't buy just for the sake of buying. After all a bird in hand is worth two in the bushes.

ISOTeam - Why I Like This Counter

ISOTeam has recently released its quarter results and there are many excellent articles online that discuss about the good and bad of this counter.

Hence I am not going to repeat the same thing. Instead I am just going to write about why I'm still vested and why I like ISOTeam.

Usually when a company caught my eye which led me to delve deeper into the good and bad, I would start with the macro environment and nature of business, and finally the several fundamental criteria which I look out for in a company.

Macro Environment

I like businesses that are in line with and that can leverage on the government's policies.

The outlook for the construction sector at least for the next two years looks promising with the push from our government.

Being in the construction industry though not directly as a builder, ISOteam is poised to benefit from the upgrading and A&A projects coming along as a result.

Nature of Business

Simply put, I like ISOTeam for its defensive and recurring business.

Being an environmental-conscious person, I also like the Green and Eco-friendly initiatives from the company such as the development of green products which could be a new source of income (E.g. enzyme-based pesticide).

Apart from their traditional core businesses, they are also constantly looking into building up other capabilities which ride with the trend around the world.

One example is their installation capability in renewable energy which is an area where the government is heading into (Synergy with government policies).

ISOTeam currently has an order book of more than S$94 million which will be progressively delivered in the next two years (Top line stability).

Looking at the list of current projects on their website (provided the list is updated), one can see that they have quite a number of ongoing projects that will contribute to the top and bottom lines in the near future.

The Management

One big plus for me is the bold and forward-looking management team of ISOTeam.

I like how they grow the company organically and inorganically (New products & services and M&As).

They have also proven to be unafraid to invest when the opportunity arises (Sunseap).

On the M&A side, they have also been aggressive when they deemed the target synergistic to IsoTeam.

One example is Rong Shun, which by the way has a profit guarantee as contribution to ISOTeam's bottom line.

Others

Mr Goh Cheng Liang is a substantial shareholder of ISOTeam. And he happens to be Singapore's richest man as well.

When you invest in the same company with an astute man as Mr Goh, you tends to feel safer.

I'm not saying things will go smoothly for sure. But at least this can makes me sleep more soundly at night. Knowing that my vested interest is the same as this man.

Lastly, there is also a dark horse in ISOTeam. And that is their Myanmar's venture (Growth catalyst).

In my opinion, this has the potential to be the biggest contributory factor in the performance of the company in the mid to long term.


If you believe in the fundamentals of a company and if you don't buy in during the bearish trend, then when?

Lessons from The Big Short

Some time ago I finally watched the movie 'The Big Short' which was about the subprime mortgage crisis that eventually led to the global financial crisis of 2007.

Though the subject is a heavy one which includes stuff like CDOs and such, the movie has comedy incorporated into the plot which I find it laudable.

I would recommend this movie to anyone.

Apart from the entertainment associated from watching a movie, I also derived some lessons from the movie which I felt are applicable to many successful persons around us as well:

1) The guys who got the windfall in the end are rich originally.

2) They have a 'gui ren' to help them (Brad Pitt helping the two guys). 
And this leads to another important point which is the power of Networking.

3) They have luck on their side (the wrong phone call to Mike Baum).

4) They did their homework and stick to their findings.

5) They remain steadfast in their belief even when the whole world goes against them.

Well, personally I feel these are useful guide lines for my investment journey and career. Especially points 2, 4 and 5.

Hope they can serve as a reminder to you too.

True Cost of Car Ownership in Singapore (My Case Study)

I bought my current ride in March 2009 and this work horse has been serving me well for the past 8 years 2 months.

Perhaps it's due to the expiring COE, it suddenly occured to me how much in fact is the total cost of my ownership of the car.

Hence I did a quick calculation to find out.

Of course due to various reasons, the calculated figure would not be 100% accurate. However it is 'more or less there' and serves as a guideline to find out the ownership cost.

1. Car price including interest: $45,000

This was the second lowest price historically for this model and I was lucky to get it at this price mainly due to two reasons.

COE price was low.
Korean won was weakening at that time.

Therefore I decided to seize the opportunity and purchased the car.

This mentality is somewhat similar to my stock investment mentality - I do not time the market. Instead I move in for the purchase once my perceived fair value for that stock has reached.

2. 10 year road tax: $7,200

3. 10 year insurance: $10,000

My insurance premium for the first few years of driving was about $1,200 per annum. Now is about $800.

4. 10 year servicing: $5,000

First three years of servicings were complimentary. After that I did the regular servicings in other workshops outside. Each servicing range from $108 - $128 depending on which package I chose. I send my car for servicing about 4 times a year.

On top of these I also went for the occasional comprehensive servicing which costs more.

5. 10 year ERP: $6,000

6. 10 year season parking: $10,800

7. 10 year petrol: $38,400

My mileage is averaging 14 - 15 km/l of petrol. And my monthly petrol bill is between $280 - $320.

8. Repair: $3,000

The car has no major issue in the first 5 years. After that I only changed 2 major components which were giving me problem - the aircon compressor and cooling coil.

Cost of both came up to about $1,200. Hopefully nothing more from now on.

9. Tyres: $5,000

4 tyres cost about $500 and I changed just about every year.

10. Misc: $2,000

I changed my rims once along with a set of new tyres for about $1,200 when my ride was still new.

To summarise the total cost of my car ownership, it costs me S$132,400 !! to use the car for a miserly ten years in Singapore.

This is enough to pay for the down payment of a condo unit.

Not that I am a strong advocate for cars. I usually take the public transport with my wife during the weekends.

However due to the nature of my job, a car has became a need, not a want in my case.

A Tale of Two Hawkers

Recently wifey and I went to Seah Im food centre for lunch before going to Sentosa.

Initially we ordered our favourite chicken rice which is tasty as usual. In fact this is my top 5 chicken rice stall in Singapore.

On top of that the aunty serving us is very friendly and courteous.

If you are interested, the stall name is Ding's Hainanese Chicken Rice.

After that we decided to try a hokkien mee from a stall with queue. So I went ahead to order.

Funny thing is the front of the stall has a placard that states 'One person one plate' and other conditions.

When my order is done I handed the money to the uncle and proceeded to take two pairs of chopsticks.

The uncle stared at me and with held my change. Then he told me one person one plate.

I don't really understand so I asked "cannot take two pairs of chop sticks?"

He said cannot so I put one pair back and walked away.

But what irked me are the words he said sacarstically before I walked off and I quote: "两块半已经很便宜了还要两个人吃!"

I have met some rude hawkers before but none as guai lan as this. To top it off, the hokkien mee actually tastes quite sucky.

The stall name is Cheng Ji Chao Xia Mian Hao Jian. It faces the main road.