my hupsteel investment

i had some discussion with my friend and here are the points. i bailed out way before its 5:1 consolidation and before it slumped further.

- true that it is heavily undervalued with hard asset and cash backing but:

- warning signs started in 2013 when it was paying out double its earnings as dividends. Most probably the boss himself did not see this oil crisis and he thought that he probably could ride it out with so many years in this industry and with the company's long history, moreover its new property was coming up and rental income could bolster its cash flow. But the oil crisis hit hard and the property market, industrial one which it was in, caused a double whammy effect. End effect is a 90% cut in dividends. This should be a clear signal to investors.

-dividends are important to the investor. But we need to check the sustainability of it. 

how people make money from the stock market

1) trading, buying and selling with little regard for stock fundamentals. can buy low and sell high and complete the trade within a day is ideal.  but how many people can really do that sort of thing?

2) value investing. quite the reverse of 1). lots of people call themselves VI. but how many people really are? True VI is hard. how many people have the patience to wait for the stock price to realise its potential? What if the calculation is incorrect? Does the returns commensurate the risks of waiting?

3) waiting for GO. there are a number of counters falling into this catogory. when this will happen? really no one knows? What if it does not happen? does one get paid while waiting? these are the questions one should ask

4) peter cundil/ warren buffet style...these involves skills. skills in picking up the right counters, which not everyone would be able to master however hard he/she tries. but the reward can be immense for the successful ones

5) dividend investment. construction of a portfolio which pays dividends mthly and just keep adding. to me, this is one of the easiest.

what's your method?

Portfolio simulation. 50k is enough to pay 9months of dividends a year. Bao Chi

A friend of mine said that my investment method is only reserved for pple with more funds.

Not true!

i decide to do a portfolio simulation with less than 10 counters, probably good for people with little time for monitoring yet want to reap the benefits of investing in the stock market.
(I am vested in these counters)

$50,000 is enough to buy into these counters to earn meaningful dividends for reinvestment, since now the lot size is 100 instead of 1000. 8 counters means an allocation of about $6,000 per counter.

1) Singtel
2) Singpost
3) Reit ( plife, suntec, capitacom)
4) SPH
5) ST ENG
6) OCBC

Notice these are big blue chip counters, probably the bluest of the blue chips in singapore. And notice that most of these counters have gone international, thus reducing the risk of single country.

Any of the above counters going bust is very unlikely.

They will likely be around 10 years time.

Buying into these counters will give the investor dividends in

January
February
March
May
July
August
September
November
December

Whenever dividend comes, simply invest them into counters which would be paying dividend soon. And repeat the process.

Using this strategy, a cagr of >10%, (usually 12-15%pa) is easily achieveable.

NOTE; FOCUS ON USING CASH FLOW TO INCREASE CASH FLOW. DON'T KEEP LOOKING AT PORTFOLIO SIZE. OVER TIME, THE PORTFOLIO HAS TO KEEP UP WITH THE INCREASED CASH FLOW(IE DIVIDENDS)

happy chinese new year!

Wish all readers a happy and prosperous CNY 2016!!!




so far into 2016, 4 of the counters in my portfolio raised dividends: plife capitacom suntec and singpost.

this shows that doing the necessary research and buying into the correct counters is very important

in my next post, i shall show how to play this investment game with a porfolio simulation

Portfolio update 31/1/2016

Dividend by month

1) uob singtel
2) plife suntec capitacom lian beng namlee
3) spost lum chang
4) taisin
5) steng kepcorp sci singre suntec uob sph
6) tcil plife ocbc
7) engro spost
8) metro stamland suntec plife uob singtel spost capitacom
9) steng sci singre ocbc
10) tcil lian beng noel gifts
11) taisin plife spost suntec lum chang hupsteel
12) sph

Activities:

Plife suntec and capitacom all announced an increased DPU.

Lian Beng maintained 1c in Feb 2016 as it did in Feb 2015, a testament of its dividend paying commitment to shareholders

Nam Lee is paying on 17/2/2016, which is different from the past, when it used to pay in March.

Nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters as well as the counters which are about to pay dividends soon.


DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?
3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

IF THE ANSWERS ARE YES OR UNSURE, STAY CLEAR OF THIS COMPANY

IF THE ANSWERS ARE NO, KEEP REINVESTING & STAY HEALTHY & STAY HAPPY. 

Wish readers a Prosperous Chinese New Year!!!

features of my portfolio which made me survive this crisis so far

1) diversification to 20 counters - which involves mixture of big mid small caps, and widely different industries with national and international businesses

2) organising the counters such that I receive a good payout every month

3) nearly exiting one counter left a few shares - hupsteel in oct/nov 2015.
- reasons for buying are no longer valid : core business survival is a question mark and dividend cut of 90%. this proved to be a very good decision!

4) as usual, none of my counters will account for more than 10% of my portfolio. the O & G counters : keppel corp and semb corp will not keep me awake at night. anyway, they are very unlikely to go bust or even skip dividends, at most reduce the amount payable.

the winning event is actually my portfolio itself, the fact that it's supplying me with the cash flow to buy even more at low fire sale prices.

cheers!

Strategy for 2016

much the same from 2015

core concepts and principles

1) dividend every month and keep adding every month

2) slow shift from local to international for added safety reasons ;

-increasing stake in companies with international biz eg singtel singpost ocbc uob capitacom suntec just to name a few.

- looking at Mapletree log/greater china, frasers centrepoint trust,  cdl trust.

3) with this increasing emphasis and stakes in companies with international businesses, i don't care too much about interest rates hikes, economy good bad etc...as far as my portfolio is concerned. they all do not matter really, in the long term.

No one can tell what's on whose mind and no one can tell where the next bomb might fall, basically. So I'd rather have an all-weather and an all-conditions workable portfolio than worry about things which no one knows.



SIMPLE QNS TO ASK URSELF

1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?
3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

IF THE ANSWERS ARE YES OR UNSURE, STAY CLEAR OF THIS COMPANY
IF THE ANSWERS ARE NO, STAY VESTED AND/OR ADD MORE



thanks for reading!