Thailand Returned 300% More Than Singapore In Past 10 Years And That Intrigued us

While browsing around the web for news, Mr Budget came across these tables that I thought would be interesting to document it here.

The first compares the 2019 global market returns, ranked best to worst, with its 2018 return as a comparison. The second is global total returns for the 2010s decade.

Source

Some interesting notes:

  1. Saudi Arabia returned double digit returns in 2018 and 2019.
  2. Both 2018 and 2019 saw a negative return for the Malaysia market.
  3. IT, Consumer, Healthcare and Real Estate is still the biggest growth sector in the US, and probably applies to other economies too.
  4. In the past 10 years, Thailand and Philippines returned the most, charting a growth of 181% and 154% respectively. Singapore on the other hand – 63% while Malaysia is at 33%, and China 71%. 

Point number 3 is interesting, and when we look at our portfolio, most of our investments are also in the IT and Real Estate industry, and if there are any opportunities that arises from healthcare or consumer products, we will be taking a closer look at them. 

But what caught our attention was point number 4, that Thailand and Philippines has been returning good rewards to investors. We’ve occasionally heard about Thailand being a good stock market haven for investors, but we have never really paid much attention to it. Of course, how can we do that when there are just so many things for us to monitor, especially since we are investing in the Singapore market, the US market, and are looking at the Hong Kong Market now. 

However, the lack of time shouldn’t be an excuse for us – looking at the total returns over the past 10 years of Thailand vs Singapore, Thailand returned 300% more as compared to Singapore! 

We also did a quick check if Saxo or DBS Vickers, both the brokers we are using, to see if they allow us to trade the Thai stock market, and to our surprise, they don’t allow us to do that!


Source

It seems like we may soon need to open up or change another brokerage account! 

Are there any readers who have traded the Thai market? Where should we start at? 

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Razer’s CEO Just Sold Off US$117M Of His Shares – And That Troubles Me.

Update 7th December : A reader pointed out that there might be a miscalculation on the site where the insider transaction is obtained. Hence the information here might be misleading. Will do another update once I look into the numbers the coming week.

One of the stock Mr Budget is holding is Razer, as you might noticed from our portfolio page.

Razer is a meaningful stock to Mr Budget, as he is an avid gamer. He is also a big supporter of the brand because Razer is founded by Singaporean Tan Min Liang.

At one point earlier this year, the stock price appreciated to a high of HKD2.18, marking an almost +45% gain for the stock counter.

However, the stock price has since then plunged over the past 6 months to a low of HKD1.19 this year. 

Razer share price as of 4th December 2019

I have been quietly looking at this counter and asking if I should average down since the counter is now in the red. 

On the one side, the company has been showing yoy increase in revenue, and is actively investing in new areas of growth such as fintech etc. This is to open up new revenue streams. Because of these various investment activities, the company has not been generating profit, but is forecasted to be profitable in 2-3 years. 

Razer is also operating in a high growth industry: the gaming space where price can be quite inelastic among hardcore gamers. To me, I really believe that Razer can be the new Apple, especially since some of their products are arguably better quality than Apple’s recent product. 

Apple’s current market cap is at 1.15T, while Razer is only at 10B market cap, and there are tremendous market share for Razer to capture.

Besides that, Razer is also investing in the Fintech space, as if the gaming space is not lucrative enough for them. It is also moving into mobile gaming.
Here are some financial highlights from Razer:

  • 1H2019 Net Revenue +30.3% to 357M
  • 1H2019 Services Revenue +110.5% to 35.7M
  • 1H2019 Net Loss Narrow from 57M to 48M

However, their share price kept dropping. Surely something is wrong.

As I dug deeper, I realised that the CEO has been offloading his shares in the market, and that disturbed me a fair bit.

According to Simply Wall Street, in November, both the CEO and the CFO have been offloading their shares at HKD1.40. The shocking part is that, the CEO sold US$117M worth of shares! While the CFO sold off almost US$4.4M worth of shares.

Disclaimer: Our only source of this insider trading is through Simply Wall Street.

Insider selling is usually an indication of the lack of confidence on the company’s upcoming performance, though it may be for other reasons (such as taxation purposes).

This is a huge red flag for me, and I wish I can drop the CEO an email to ask him why did he sell off his shares, especially since immediately after he sold the shares, the next day he gave an interview on CNBC stating that the company is in a great shape, and that they are continuing to invest in new growth areas.

Article published the day after CEO sold US$117M of his shares

I remember one thing I learnt from Fifth Person’s investment quadrant is that, you can observe a company by seeing if the management practice what they preach.

Why would the CEO and CFO sell their shares but claim that their company is in a good growth trajectory? In this case, something is clearly not adding up and my confidence is quickly diminishing. 

I asked myself, does this have to do with the Hong Kong Riot? I highly doubt so as majority of Razer’s revenue comes from US and then Europe, followed by APAC, so the Hong Kong riot should have negligible impact on the counter.

So we will wait for the next financial update from Razer to see if they continue to see high segmental growth in their gaming revenue, service revenue as well as if there are any ROI from their various new growth areas.

Otherwise, we may be looking at cutting our losses on this counter. 

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monthly updates

What Have We Done This Month Towards Our Financial Goals – November 2019

So November has came and gone now.

While everyone else is doing a monthly portfolio update, we thought it is more meaningful to document what we have done this month towards our financial goals.

Mr Budget
Position Added: Lendlease, Ascendas REIT, Powermatic, SE, PDD
Take Profit: Frasers Logistics Trust, Asian Pay TV Trust

Mrs Budget
Position Added: N/A
Take Profit: N/A

Here’s a graphical representation of what we have done this month towards our financial goals:

So as you can see, it was a busy month for Mr Budget. As previously shared, Mr Budget took profit on Frasers Logistics Trust and Asian Pay TV Trust.

You can read more about the reasons why here

With the proceeds and using up some of his cash savings, Mr Budget added on 5 new counters.

The first counter was Lendlease, which was also mentioned in the previous update

The second counter added was Ascendas REIT. Mr Budget has been eyeing this REIT for a while now, and with the recent price weakness, Mr Budget decided to pull the trigger and went in to buy some Ascendas REITs for long term investment. 

If you have been an avid follower of the finance space, DBS Bank has been actively promoting their new roboadvisor, the DigiPortfolio. DigiPortfolio, which invests in NIKKO Straits Times Index ETF and NikkoAM-StraitsTrading Asia ex Japan REIT ETF

If you look into the portfolio composition, the highest REIT holdings for the various portfolio under DigiPortfolio is Ascendas REIT. 

Other than the fundamentals of the REIT, this gives us a lot of confidence in Ascendas REIT seeing that the REIT takes up a substantial portion on the various exchange traded funds. If the funds are buying in, surely they know more than what we do.

We foresee strong growth from Ascendas in the long term especially since they announced that they will be acquiring 30 properties from Capitaland, increasing the DPU performance in the future.

The third counter I added is a bit speculative: Powermatic Data.

We first came across this counter while tracking Kyith’s investing activities. He has been purchasing the counter as of late, and while digging deeper, we also like what we see. 

Powermatic is a computer components distributor, and its a good growth company riding the 5G tech wave, providing customised wi-fi solutions. 
Its recent financial report shows the following:

  • YOY revenue +30%
  • H-YOY profit +46%
  • Total current assets S$39M, Total cash S$35M with no borrowings. This is a company loaded with cash.
  • They have investment properties of almost S$19M, and S$4.7M in plants and equipments.
  • They have a total headcount of 88 person generating S$21M in revenue, translating to S$240,000 revenue per person.

There are other bloggers too that agree that the company is undervalued.

Hence Mr Budget took a small position on Powermatic Data, and we have a very good feeling about this counter. We like that the company is cash and asset rich, strong financial growth, and is in a high growth industry.

The fourth counter that I added on recently is SE, or the parent company of Shopee. Mr Budget has also been sharing that he has been eyeing SE for a while now, as he is very impressed with the continued growth of the company. He finally pulled the trigger and added the counter in.

And the final one is PinDuoDuo, with the catalyst being Amazon opening up their new store on the Chinese e commerce platform. Pin Duo Duo’s addition is also a way for us to get some exposure to the China market. 

Other than the rebalancing of his portfolio and the annual clean up, Mr Budget also made a small contribution to his EPF account in Malaysia to enjoy the annual 6.5% interest rate. This amount will be used for retirement purposes.

Mrs Budget, on the other hand, has not made any purchases or sold any of her existing positions. The good news this month was that, Keppel Corp’s share surged on news of Temasek’s acquisition, hence lifting the overall portfolio value of Mrs Budget.

So that’s an update from us this month. 🙂

How have your month been? 

Monthly Tracking

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I Almost Bought This Stock Which Just Plunged 98% In One Day!

Remember the company that was introduced by the WeChat scammer?

Basically, the stock analyst who added Mr Budget “accidentally”, suggested that Mr Budget should trust her and to buy HK 3313, a stock that will see a 10-20% short term gain.

Also Read: I Was A Target Of An WeChat Investment Scam, But Made Some Money Off It!

News just broke today that the share price plunged 3800% from a high of HKD14.82 to HKD0.30 today. 

The counter was actually the world’s best performing stock leading up to the crash. Even the crypto crash could not rival this 98% share price plunge! 

According to the official news, MSCI, a well known global index shared that it will not be adding the counter onto its index, after “further analysis and feedback from market participants on investability”. No-one from the Artgo company can be reached for further comments too.

The more I read about the various reports on Artgo, the more the company looked like it was under financial engineering and artificial price inflation to get retail investors to pump up the price.

The fundamentals of the company does not make sense at all – in 2018, the company lost 400M RMB, and is valued at over 40B RMB? Shouldn’t the government officials have noticed this red flag?

It is quite scary to know that the market is also prone to price manipulation, and that the ones with money and access will and can control the market.

They would even come out with elaborate internet / WeChat scams to get retail investors to throw in their money to pump up the share prices, before they dump all their shares. At the end of the day, you can only blame any victims on their greed.

Lessons to note:

  1. Invest in companies with proven track record with solid financial fundamentals.
  2. Invest in dividend paying companies.
  3. If something is too good to be true, it probably is.
  4. Don’t be sucked in by get-rich-fast schemes.

Stay safe everyone! 🙂 

(Title is a bit dramatic – I looked at the company finances and it was very big obvious red flag)

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I Was A Target Of An WeChat Investment Scam, But Made Some Money Off It!

Scams involving money have been widely reported, and one such investment scam works like this (write up taken from Seedly): upon gaining the trust of their victims, the scammers would encourage their victims to buy specific shares on the Hong Kong Stock Exchange, promising them guaranteed profits.

Should the scammers convince enough victims to buy the mentioned shares, the price of the share increases. The scammers, then, sell their portion of shares and disappear with their profits. This sell-off lead to a dip in share price, higher than the price of which the victim invested.

While Mr Budget counts himself as a relatively smart person, I never thought I will be a target of one such scam.

So earlier 2 weeks ago, Mr Budget received a friend request on WeChat from a female contact. 

Before this, Mr Budget has a friend who told me that he is in a conversation with someone on WeChat which he identified as a scammer. The “scammer”, would have added him “accidentally” and introduced herself as a stock analyst from Hong Kong. 

Throughout his conversation with the scammer, the “stock analyst” would drop a few counter recommendations to my friend, with the promise that those counters will increase in price.

So far, all the stock recommended have all risen in price and have never been wrong. So that intrigued my friend to continue chatting with her to get more “insights”. He is still talking to her until today, and the “stock analyst” has been very patient in engaging with small talks with my friend.

My friend has never made any trades / taken any positions on the stocks recommended so far.

So back to Mr Budget – the day finally arrived when I received a friend request. When the request came, I knew immediately that this could be one of the scammers.

The scammer, added me saying that she added accidentally from her suggested contact list, and proceeded to introduce herself as a stock analyst after some small talks.

To keep my suspicion low, the first few days of chatting involve getting to know me, talking about the weather and other basic conversational topics. I tried to ask her more on Hong Kong’s riot and politics (since she said she’s a stock analyst of HSBC), but she quickly deflected the question. The is probably a sign that this topic is not part of their “playbook” and she wouldn’t know how to answer me.

On the third day of chatting, she suddenly told me that her client made a neat 20% profit on a stock counter – HKEX 3313

Of course, that piqued my interest and I told her that I would have missed the boat and won’t be looking at the counter. She said that the counter will continue to go up another 10%, and it did. 

However, I replied that the price doesn’t make sense for me, and she introduced another counter – HKEX 0826.

So I went to take a look at the finances of the company. Tiangong is a relatively large cap company dealing with high speed rail in china, with decent historical financial performance. 

In my mind, the scammer will need to make sure that I make a small profit, thereby gaining my trust, before “scamming” me. Since the company’s financials roughly checked out, and it is in the interest of the scammer to ensure that I make a profit, I took a small position on the counter. 

Surely enough, the next day, the counter went up by 2-3%. 

The scammer also asked me to enter the position at a particular odd lot, so that she can track if I really did enter the said position. She also required me to screenshot my position, which made me even sure that this is 100% a potential scam.

After the next day, she asked me to offload the position, and after minusing the fees, I made a quick 2-3% in gain. 

And then she dropped the bomb.

After seeing that I made a profit on the counter I bought, she asked me to prepare S$100,000 to invest in a new counter, which she said will go up by at least 30%.

However, she will only reveal the counter to me the next day at 2pm.

To this, I told her, I do not make investments like this. I would have to look at the counter, study its financials, understand the business roughly, before taking any positions. I told her any investment without looking at the company is gambling.

And she became slightly agitated, saying that this is not gambling, and that the risks are properly managed.

In my mind, I went “what the hell is this justification?”. At that point I realised that she kept asking if I have the money, and if I can make the trade at 2pm, all without telling me the counter.

So I started ignoring her texts and then she stopped texting me.

For those who were scammed, I’d think there are many tale-tell signs that reveal if you are under a scam or not. If something is too good to be true, it is probably too good to be true. 

Overall, a very interesting experience, and I manage to make a couple of hundred bucks in just 1 day. 

Do you have any similar experiences? Do let us know. 🙂

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Trades Executed: Frasers Logistics, APPT, Lendlease

Earlier today, Mr Budget executed three trades in his Singapore portfolio, and I thought to document down the various reasons why.

Frasers Logistics And Industrial Trust

First, Mr Budget sold off Frasers Logistics and Industrial Trust.

Mr Budget holds a relatively small position in FLT and over the past one and a half year holding it, I recorded a 25% increase in gain including the dividend.

As the position is small, the profits were less than S$1000. 

FLT is a strong and stable counter, with properties mainly in Australia.

Their financials looked ok and has been increasing steadily. However, while the company recorded an increase in DPU, when translated the gain from SGD to AUD, the DPU actually dropped. Because of the worsening of the currency, the saw a declined in DPU in terms of SGD terms.

AUD vs SGD Forex Rate over the past 5 years
Source: FLT Annual Report
FLT share price on 7th November 2019

However, the share price has rallied much this year, and is now trading at a premium.

I think the market is pricing in all the plans the management has made (Frasers is a strong sponsor with good track record). Because of the worsening of the currency (external market force), I foresee that the REIT will have a challenging time keeping up with the numbers.

Other financial bloggers have also exited their position:

  1. Kyith from Investment Moats – Partial exit on 2019-05-03 and then 2019-07-12 (still holding to 33000 units)
  2. Fifth Person – Exit full position few months back

DBS Treasures also reported a TP at S$1.27 before revising the TP to S$1.4 today.

With all the bad signals, I took profit on the position so that capital can be deployed on other opportunities.

Asian Pay TV

Asian Pay TV is a counter that I bought without much research when the price came down after the trust announced a cut in dividend. 

I believe that the market oversold the counter and hence I jumped on the ship. You can say that we took a small gamble position on this and it didn’t pay off much.

I have been waiting for an opportunity to offload this seeing that the price doesn’t move much.

Although the management has good plans to rejuvenate the business, with insider stock buying giving off good confidence, I realised that I am not very excited about the space that the business is in. It’s a sunset industry and I don’t think we will see a huge business turnaround.

Mr Budget sold off the position at break even point, and only made his gains from the dividend, translating to about 5-6% in gain in one and a half year. 

As the year end approaches, its a good time to tidy up the portfolio and clean up some messy early day trades I bought.

Lendlease Global Commercial REIT

Finally, with the proceeds from FLT and APTT, Mr Budget picked up Lendlease REIT.

Mrs Budget has a sizeable position in Lendlease already, and Mr Budget decide to add onto this position as it might be a long term multi bagger. 

Lendlease is notably the REIT behind 313 Somerset, and with a strong sponsor, there are future opportunities for the sponsor to inject more properties into the REIT. 

I will not touch about the fundamentals of the REIT as I am not an expert (there are many other financial bloggers who wrote great analysis on the REIT along with the risks), but will share some signals that gave me the confidence to jump on the ship.

Signal 1: Earlier last month on 14th October, Temasek announced that they are adding on their position on the REIT, from 4.98% to 5.01%. 

Signal 2: Earlier yesterday too on the 6th November, BlackRock also announced that they have taken more positions on Lendlease, now holding 5.01% of the REIT.    

Temasek is probably the largest fund in Singapore, and BlackRock is the 8th largest fund in the world, and they probably know more than I do. The fact that they are adding onto their position probably means that they agree that the REIT will only continue to go up. 

With this addition, Lendlease will form the core position in Mr Budget’s Singapore portfolio – 10% of Singapore’s equities, or about 2.6% of Mr Budget’s overall net worth. 

In my earlier post, I did mentioned that I won’t be making any investments soon, but it seems that I’ve decided to do an annual portfolio clean up. The net cash flow from these is zero hence I’m still happy with the % cash in my net worth.

So here’s hoping that Lendlease will continue to HUATS all the way!

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What Have We Done This Month Towards Our Financial Goals – October 2019

So October has came and gone now.

While everyone else is doing a monthly portfolio update, we thought it is more meaningful to document what we have done this month towards our financial goals.

Mr Budget
Position Added: Hong Kong Land, Centurion, AIMS AMP (SG Equity)
Cut loss: Beyond Meat (US Equity)

Mrs Budget
Position Added: Lendlease (SG Equity)
Take Profit: Facebook (US Equity)

Basically adding on to dividend generating counters as well as cutting loss on non dividend generating counter, relating to what I have mentioned in my previous article.

Related article: New Investing Rule – Only Invest In Dividend Paying Companies

In terms of overall net worth, Mr Budget is still pretty much in the same position as the month before due to the cut loss position on Beyond Meat, as well as forking out a chunk of money to be used as Ping Jing for the upcoming Guo Da Li. Most of this offsets the gains in his SG portfolio as well as gains from the monthly salary.

Here’s a graphical representation of what we have done this month towards our financial goals:

For the next few months, I don’t foresee myself to be adding into any investments, as Mr Budget will have to fork out additional money for the renovation of his overseas condo in Malaysia, to be used to provide rental income as well as short to mid term investment.

If there are opportunities to sell off the condo, Mr Budget might consider doing so as the monthly mortgage for the condo might be slightly stressful.  Will probably talk about my overseas properties in the future.

So what have we done this month towards our financial goals? 

  1. Mr Budget added on S$12,000 worth of positions onto dividend generating assets.
  2. Mrs Budget added on S$8,000 worth of positions onto dividend generating asset.
  3. Started this Mr and Mrs Budget website – articulating our thoughts into words gives us clarity on our financial plans, and hopefully open up new opportunities to us in the future.
  4. Booked our honeymoon trip to Japan using miles! This will be our first ever business class experience. 🙂

How have your month been?

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New Investing Rule – Only Invest In Dividend Paying Companies

Mr Budget recently came across a thread on Quora which is quite interesting – What is the wisest financial advise you have heard from a rich person. 

According to Mr Wonderful, one of the sharks of Shark Tank, he follows a few investing rules:

  1. If a company has no cash-flow, don’t invest! A company without cash-flow is valueless and nothing more than a speculation.
  2. Never buy a stock that doesn’t pay a dividend

He adds on further by explaining his investing rule with proper stats: “Over the last 40 years, 71% of the stock market’s return came from dividends, not capital appreciation”

“Don’t wait for the stock price to go up, get a check every other month and take your share of profits. I’ll never own a stock that doesn’t pay a dividend,” ~ Mr. Wonderful.

I think this is a very good yard stick that I will be using to guide my purchase decisions in the future. I also read somewhere that companies who have a dividend policy are more savvy in terms of capital allocation and capital utilisation, as compared to companies without a dividend policy. 

Strong companies will always give a share of the profits back to the shareholders. Companies that produce dividends on the other hand, have to ensure that their cash flow is strong enough on a regular basis to make the dividend payout and thus are managed differently.

This is also reflected in REITs – all of which have dividend policies and their prices have been increasing over the past decades. 

Another reason why this is a good investment barometer is that, when the cash of the company starts running short, dividends are among the first expenditures to get cut. That will serve as a good indicator of how the company is performing in terms of capital utilisation.

What this means is that, for growth stocks without dividend policies, Mr Budget will have to be more mindful about deploying our investment capital into them. 

Some of Mr Wonderful’s other rules for investing:

  • no more than 5% in any one name
  • no more than 20% in any sector
  • volatility is the enemy, so stick with less volatile large caps and dividend payers
  • Take your age, and put that percent of your wealth into bonds

This is a good reminder as Mr Budget just liquidated Beyond Meats, a counter which I bought few months back and suffered a 60% capital lost.

The counter was bought without proper analysis at the fear of missing out, and subsequently caused a 60% capital lost.

The Mrs asked me why did i not hold onto it – but what i didnt tell her is that, for me to recover my position and break even, the counter would have to go up by 120%, a highly unlikely case given the increased competition and the wearing off of the novelty.

Hence, it’s better for me to just cut loss (one of my biggest lost position) and to see if I can deploy the cash into something else.

And this time, into a dividend paying counter.

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