Wednesday, May 22, 2013

Crazy Car Prices in Singapore but everyone's lapping it up!

This is my 10yr old mitsubishi car in Australia. I bought it for aud$2.5k(yes, it is only $2,500) in 2004 as a student. I sold it for aud$1k($1,000) to a used-car dealer after I graduate. In comparison to Singapore car prices? *GULP* Not an apple to apple comparison... but still it is crazy prices.

Anyway, I am in the market to replace an old car and went to see Audi A4 and Jaguar XF at the showrooms today. Well, I can only say the price has come down but is still higher than when i bought my mercs in 2009. Probably a good $40k higher(as compared to the prices of Audi and XF then).

An interesting thing about everyone's lapping it up. Why? Well, I went to the Audi showroom and there is no fewer than 3 CHINA couple looking at it. I think I was the only singaporean buyer at that time. But can you imagine how much RICH FOREIGN people there are in Singapore. Overheard one of the CHINA husband on the phone talking looking at cluster-landed housing and met him on my way to the carpark and he was driving a brand new Mercs R-class, so he probably was buying for his wife? Overheard another China couple talking and they were telling the salesman they are looking for a WEEKEND CAR! wow.. i've heard of weekend homes, but they are in the market for a weekend car.

Probably will head down to Corals@Keppel to look at the showflat and see how many CHINA couple I can find there. Yes.. my nick name is "顺风耳".. hehe..

I am getting more and more convinced we are truly becoming the Financial Hub of Asia, the Monaco of Asia and the epicenter of ASIA.. where the HOT MONEY FLOWS.... Things will only get more expensive. No doubt about it.  Please don't hope for any major correction in housing prices or car prices if there is no major recession to scare people. But Corrections in Stock Market definitely will happen!

And finally, this is funny as hell . You just looked at the reaction of these multi-millions actor/actresses.

Friday, May 17, 2013

What to look out for in a Company

I always read the Business section in its entirety (note: I read every section in its entirety to be honest). Besides the things I've already mentioned, the obvious things to focus on are revenue breakdown by whatever segmentation they choose, key business relationships, and key business risks. The main things I'm trying to answer in this section are:
1) Where is the crown jewel of this business? I want to identify the cash generator/main earnings driver for the company. Most of the time this isn't going to be the same segment as what I'm looking for in #2, but it's very important to understand what the majority cash generator is for the company. Normally a company can't survive long enough without its bread and butter to develop any high-growth areas, so determining the key risks to it are just as significant as determining the catalysts to the explosion of another segment.
2) What is the major growth generator? Having a cash cow is great, but doesn't make for a compelling investment if it's growing top line at 1% annually. Normally management will make a point to highlight any major growth in a particular segment, but then again sometimes they won't. Always have this question in your mind when you're looking through segment information. If sales as a % of revenue have moved up from something like low teens to mid-thirties over the past few years, all the sudden you may have a good idea of where growth is coming from... or where a segment will have to pick up the slack as a crown jewel business starts to wither away...
3) Where are the key risks for #1 and #2? Section 1A will always list the risks to the business. A certain chunk of business risks seem identical in every company and can probably be skimmed, but firm-specific risks can be very important and disclose some important information. The things you can usually glaze over include the standard "macroeconomic conditions" clauses, litigation risks (unless it's a litigation-heavy business like a medical supplier, car company, airline, etc.), and key man statements. Specific things to look for might be in regards to expansion plans re: the growth engine and market share or other revenue losses re: the crown jewel. Management will usually outline what they think is scary about both of these things, and that will help you build a foundation for what you need to go out and investigate after you're done reading the K.
Go to the link below to read more.

Sunday, May 5, 2013

Jeff Gundlach on Why own Bonds.

“Let me be clear. This is absolutely wrong. Yields are NOT going to rise any time soon.”
There is one thing about being an asset manager. Timing is everything. The synonym for“early” in the investment business – is “wrong.” If you had bought the Nikkei two years ago you would now be right – after losing about 20%. Now is the right time.

Talking heads on CNBC started talking about a new bull market in stocks.   REALLY? That started 4 years ago folks.   We are likely closer to the end of a bull market cycle than a beginning.
Lastly, why own bonds, because they are negatively correlated to stocks. You may not get rich - but you will survive the long term investment game.

Friday, May 3, 2013

Fun Theory : GuocoLand unveils tallest building in Singapore

Fun theory about how market peak co-incides with tallest buildings.

All three buildings were conceived in the bull market and built through the peak, only to open for business amid the worst office-space market in decades.
As each of these buildings were completed, they opened during down-trodden markets.

The signal to sell appears when the tallest building is conceived or begins construction.

Guess what.. :)

Someone just conceived and will begin construction of the tallest building in Singapore! :) It's due for completion in 2016. Of course.. It is still shorter than most of the tallest building in the world. But it is tallest in Singapore :) How much of a correlation do you think it will be between market peak and tallest buildings?