tag:blogger.com,1999:blog-13546517358986507012023-11-16T21:07:16.531+08:00Midas InvestmentsThis site is your go to guide for all things finance related including interviews, recruiting guides, tutorials, investment tips and the latest trends and happenings in the stock market. Some personal stories are occasionally posted as references for greater learning. Find investment tips, equity research reports, as well as general personal finance materials here to build your own financial literacy.Unknownnoreply@blogger.comBlogger82125tag:blogger.com,1999:blog-1354651735898650701.post-27965565150432247782015-01-08T12:36:00.002+08:002015-01-08T12:37:09.298+08:00First Offer On The TableI have officially gotten my first offer from a tech company. The interview was relatively smooth as the industry is one that I am fairly familiar with, even more than the financial industry. I am going to go for more interviews and build up my interview skills as well as hone my experiences. I believe that I need to speak with as many people as possible at this stage of my life, more for learning purposes rather than for deciding what I want to do, as I have a fairly good idea by now.<br />
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With that said, the offer can also be used as leverage for future interviews. I have not really given any acceptance and the team has not really asked me to finalize any process. It was more of a soft agreement and asking me to email them before they send me the term sheet for my internship at a later date so that there will be more concrete details on what is the exact job description.<br />
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My recruiting efforts are not finished yet. I am actually waiting for a couple of big names in the tech world to open up before proceeding with the next part of the application. I am also looking at certain asset management firms and trying to learn as much as possible about valuation methods and skills like VBA and Macro before going for future interviews.<br />
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With that said, this is an interesting time and I am waiting to see how far I can go in the next one and a half year before my official "First Job".Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1354651735898650701.post-2222570887226354232015-01-07T02:49:00.002+08:002015-01-07T02:51:40.418+08:002014 Annual Financial Investments ReportThe year 2014 was a year that saw me taking more risks, and venturing more into the world of saving and investment. I am pleased with myself for being able to perform certain investments at the right time and identifying the right stocks that still have value. The truth is, whenever I look at stocks, past the initial usual screening methods like P/E, ROE, and P/B etc, I will focus more on the qualitative aspect of the business ranging from the company's management as well as strategies and areas of business the company is involved in. There are times where I have been able to identify value stocks but I just didn't feel right investing in the company. For one, I believe Asian companies or global companies headed by Asians are more conservative or more savvy than comparable with the same risk.<br />
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Some people believe in Geomancy and I do find myself avoiding certain companies if their management looks a bit dodgy. There is really no hard way to say how I qualify the various qualitative aspects of the business. However, this is just me and past the initial quantitative screening, I believe more in my instincts as I would like to term it. This is the same with my Japan trade, I still believe in Saizen despite the fall in price and is likely to buy more very soon. One thing however rings true for all my trades, I always google the CEO and the Chairman and see what results come out. With that said, the image below shows my statement for the year.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgo22R7IdM8XEfVf8FrCcPwkiiYyq2XazDTw-FaSX4xlQeRPeHd16KaJ9OsumhQfFnJyl3MiXKrupu1M_TvLU9YXF2-y4-yWHss8s3yVoP3r1v4PjH77KZspjP81PpOitHh6kQQvxohg44/s1600/Annual+Financial+Statements+2014.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgo22R7IdM8XEfVf8FrCcPwkiiYyq2XazDTw-FaSX4xlQeRPeHd16KaJ9OsumhQfFnJyl3MiXKrupu1M_TvLU9YXF2-y4-yWHss8s3yVoP3r1v4PjH77KZspjP81PpOitHh6kQQvxohg44/s1600/Annual+Financial+Statements+2014.png" height="316" width="320" /></a></div>
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The reason why under remarks I put Owe $1.4k is because I took out this sum for money to settle certain expenses and is reminding myself to put it back. If you add in the $1.4k that I took out from my portfolio, the material gains will actually be higher as I used a certain formula to only include existing size and not would be size. Accounting for the $1.4k, my returns are actually over 20%. My portfolio is growing healthier and I am looking forward to this year where much turmoil and shock is expected to hit the market. The interest rate increase might also take a hit at some of my REITs holdings but we should see. All in all, 2014 was a good year. </div>
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In summary, value based investing based on opportune fear and shock is what I will continue to adhere to, and never growing in love with a stock is what I will continue to personify. </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-53883056377614849512015-01-05T01:17:00.002+08:002015-01-05T01:17:54.369+08:00A New Year - 20152014 was a year of surprises and hardships, a year of happiness and sadness. With 2014 officially over, I will review it thoroughly in this post. There were tears, smiles and laughters and I have gained a new realization about myself as well as the people around me. So much has happened, and I managed to push myself towards greater heights, gaining new knowledge, capital as well as hitting some hard to hit goals, both personal and professional.<div>
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Firstly, I would like to thank everyone, both readers as well as my real life friends and family. I have managed to hit a superb 4.9 semester GPA, bringing me closer to first class. My current CGPA stands at 4.45/5.00, a mere 0.05 away. I am really glad that all my hard work, consultations as well as active discussions with friends and professors finally paid off. I am now aiming for a perfect score next semester. I hope I can get into the Deans List for AY2014. </div>
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With regards to my health, I managed to lose some weight, not much but around 3kg. I hope to implement some healthy habits into my lifestyle this coming year and try to exercise more regularly. Some of the resolutions that I set with regards to fitness have been too stringent and might have dampened my spirit many times. However, I will just aim for one thing this year with regards to fitness, and that is to consistently outdo myself when my mind tells my body to procrastinate. </div>
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On the topic of professional development, it is really fascinating. I managed to have one of the best summer internship experience ever, and it has cultivated and built in me so many useful skills ranging from communication to analysis as well as networking skills. I am now still actively scouting for appropriate summer offers as I did not manage to score any first round interview at most of the bulge bracket banks I applied for except one, which I failed as I was too nervous. However, I was able to know what I want to do in the future, and this is unlikely to be something that will change in the near term.</div>
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About my family, my daughter is growing up so fast and she is finally going to Playgroup. I am so proud of her. I am watching her grow everyday and her growth spurs me on even more, to take more tuitions, invest more cautiously and venture out of my own comfort zone more often. My wife has also helped me push myself even harder. I would like to thank them and my mother for her relentless support as well. Watching her work so hard each day is a daily ringing bell for me.</div>
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I started an entrepreneurial venture last year as well but it is still in the development phase. I can foresee potential in my idea but the development is taking too long and since I am not a technical person, there is really very little that I can do to pull the timeline for launch closer. The only thing I can do is to nag and continue to nag at my developer. </div>
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One thing that sort of bothered me in 2014 was that I did not manage to catch up with people I want to catch up with as often as I wanted to as I was too involved with work and taking care of my family. This is unlikely to change in 2015 but I just wish that some free time will open up here and there from time to time. </div>
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On the point of my investment returns, I fall short of a few thousand dollars to push my portfolio to my intended size. However, I was able to continue to have pretty impressive returns and a big part of it is due to diligence and a little bit to luck. I continue to adopt the value investing approach and will continue to scoop up discounts from time to time. I recently exited a few REITs, and entered some oil and gas companies as the valuation was too good to pass, especially with so much fear due to the crash in oil price.</div>
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2015 will be a year full of challenges... I expect it to be even tougher due to rising costs for my daughter's education and will do whatever it takes to make more money. I also have to balance my studies, both university as well as professional. I am learning VBA and Macros on the side in order to get ready for my eventual entrance into the jungle (corporate world)... Until my next post, good night!</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1354651735898650701.post-68565874699317779762014-12-09T12:03:00.000+08:002014-12-09T12:05:17.599+08:00Is Japan Doomed To Recession?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeTAM7KQEfp8sq4kFw6L_Oc1TwnGcIW1fFW0JhdAT5zNFJIZZT1hS1Ej9VO2Q2w2_XpJHW_GVqFXdey14gFVjlXldzdUZMGrCLUB8vud2GR96hoN1JdraVisP-7lhMFTqaeb0loAFuFZY/s1600/jpn.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeTAM7KQEfp8sq4kFw6L_Oc1TwnGcIW1fFW0JhdAT5zNFJIZZT1hS1Ej9VO2Q2w2_XpJHW_GVqFXdey14gFVjlXldzdUZMGrCLUB8vud2GR96hoN1JdraVisP-7lhMFTqaeb0loAFuFZY/s1600/jpn.gif" height="133" width="200" /></a></div>
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Today, I woke up and saw that Saizen REIT, one of my most substantial holding has fallen by quite a bit since I last checked. This was in part due to the recessionary reports about Japan. Abe-san has also called a snap election just two years into his term to garner new support for his economic policies. I am now wondering if the economy is ever going to get its act together. However, Abe-san is really someone to be admired. Decisive and strong, he looks like someone who can really change decades of deflationary pressure in the economy against the pessimism of the Japanese people.<br />
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Well, for now, I am still cautiously optimistic about Japan as there is just so much productive capacity in the economy that is not maximized to its fullest potential. However, the Japanese looks to be extremely complacent and they really need to get their act together before they are overtaken by other emerging economies. They are like an economy that is so risk adverse in guarding their wealth that they do not know that wealth is lost every day through a lack of vitality in the economy. Even a greying labour force can spur the economy. Just look at Singapore and the number of elderly who are still working past their retirement age.<br />
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For what its worth, it is time for the Japanese to start learning from other economies. If there is a lack of consumption, build the habits of consumption into the Japanese people. How do you do that when interest rates are 0 and people are still not consuming? Well, import labour, make expats consume, do whatever it takes to stimulate the economy. Without a strong economy supporting the country, public dissent will be much worse relative to the initial backlash from immigration friendly policies anyway.<br />
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In terms of business culture, break down the traditions. Decades of slowing growth has proven that the old Japanese way of working is not feasible. The world is in a stage of hyper growth and efficiency now due to technological advances, and working more is actually working less in certain situations. Give your employees more freedom and autonomy and rebuild the business culture. Learn from the Americans, and build more billion dollar companies.<br />
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In terms of QE by the Bank of Japan, simply increasing the money supply has proven to be ineffective in generating inflation. There has to be a corresponding policy to complement monetary easing and drive demand. The structure of the economy needs modification. Encourage spending through partnerships with businesses.<br />
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What about tourism? What happened to the Japanese pop culture? It used to be much stronger than the Koreans. What is the entertainment industry doing? If the Koreans work twice as hard, you work thrice as hard. That is what Japan did during the post war periods, and propelled itself from a manufacturing economy into a service and technological economy in just decades. Wake up, learn from the past, and do what you did. There used to be much more dreams in the nation.<br />
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At the end of the day, this is just some ranting by me after looking at how the NAV of Saizen fell from S$1.24 to S$1.14. I do know that everything that I just out-laid needs time to execute, especially in a hyper democratic and bureaucratic government like Japan. However, I feel that traditions are like chains sometimes, and disruption has to occur in order to bring a new age of hyper growth in an economy.<br />
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<b>The question is: can the government and the people work together and push past recession into growth?</b><br />
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Work hard Japan, I am rooting for you. Please don't disappoint me, I am learning Japanese for the future, don't make my learning obsolete and redundant. Lol.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1354651735898650701.post-53632770899286662842014-12-07T12:15:00.003+08:002014-12-07T12:16:00.682+08:00Broking Interview At A Global BrokerageNow, I will talk about my telephone interview for a global brokerage firm. The position is highly coveted and each telephone interview is done in blocks of 15 minutes. I was a bit nervous and did not prepare well enough for some questions that were asked of me. However, I am gonna let you have the benefit of asymmetric information by telling you what are the various questions that will be asked of you:<br />
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<li>What do you know about us and why are you interested in becoming a broker?</li>
<li>Can you tell me what is inter-dealer broking?</li>
<li>What happens to bond prices when interest rates increase?</li>
<li>How do you know about our firm?</li>
<li>Can you tell me the difference between voice broking and electronic broking?</li>
<li>Who are our competitors?</li>
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There were several times I was unable to get the accent and asked for clarification. However, overall, the interview was a great experience and I think that it has helped me build myself even more. For this current recruiting season, I have already done 2 interviews for next summer, and even though both are unsuccessful, I am really happy that I went through them as I was able to gain even more experience.</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-35982097332927269792014-12-04T10:05:00.000+08:002014-12-04T10:06:03.672+08:00Prestigious Government Statutory Board Interview Even though I always aspire towards a fund management career, I recently went for a government statutory board interview. The functions of the statutory board are vital for the correct running of all economies. Throughout the interview, I was able to have some amazing conversations with truly amazing people. However, near the end of the interview, I realized that I was not really a good fit for the program and they realized it as well, sending me a rejection two weeks later.<br />
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For those who are interested, I will post the series of questions that I was asked here. The questions listed here are just to start things off. There will usually be follow on questions.<br />
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<li>Tell me about yourself, your interests and why you are here.</li>
<li>Is there a reason for a poor performance in a particular subject?</li>
<li>What did you do in this particular co-curricular exercise?</li>
<li>Did you do any internship last summer and what did you do?</li>
<li>What are you studying this semester?</li>
<li>Why do you think about this or that?</li>
<li>How do you feel about the property market in Singapore?</li>
<li>What current affairs are you following and why?</li>
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The interview was really fun, and I highly enjoyed it, walking out with a memorable experience. </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-49570366969574475782014-11-29T14:29:00.005+08:002014-11-29T14:29:57.778+08:00William Ackman: Everything You Need to Know About Finance and Investing in Under an HourFor those who are interested, learn about Finance in less than an hour. This is a video contributed by Big Think and instructed by William Ackman, the man behind Pershing Square Capital Management. Learn about the 3 statements in very simple terms from one of the most successful hedge fund manager this year, who posted a close to 35% this year through his bets. This video is short and easy to understand.<br />
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Do enjoy the video and start taking control of your own finances. Financial planning is a skill that is never too late to master.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-63107414993201671972014-11-25T15:59:00.002+08:002014-11-25T16:00:22.958+08:00Death of Investment BanksRecently, I saw this video by Anton Kreil, a former Goldman Sachs Sales Trader and thought it was quite cool. Well, I will not spoil the fun, so enjoy watching the seminar, its around 2 and a half hours and has five parts in total. I have only uploaded one part so feel free to continue watching the rest via YouTube. Afterall, the aim was simply to bring awareness.<br />
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Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1354651735898650701.post-21182154850245832592014-11-16T10:52:00.000+08:002014-11-16T10:52:23.433+08:00Long Awaited UpdatesHi guys, sorry for the delay in post. I have been so occupied with the real world and have neglected the duties of keeping track of my progress. For that, I apologized. In these past few months, there were many interesting things that happened, new enlightenments, new awareness. In the blink of an eye, it is almost close to the end of my semester. There is only around 2 weeks before the start of the various examinations.<br />
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Recently, recruiting season for the major banks has officially ended. I have only applied to less than 50% of the major bulge bracket banks due to various reasons. I re-realized that the wall to climb in order to really be a hedge fund manager cum venture capital manager is a tall one.<br />
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With regards to the stock market, it is really interesting. I have managed to hit a 20-25% return in the past 12 months, with 5% being realized in the form of dividends. This could be because of my high REITs holdings. However, I am considering offloading some of my property related investments for better investments in other stocks. I realized I am truly a value investor as the alternative is just too risky for someone who has a family like me.<br />
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With regards to the stock picks recommended, I am happy that both of my calls in this blog turned out to be correct. I recommended a sell for Vard Holdings, and a buy for Union Steel and both movements have been accurate. For Union Steel, I would really like to see more diversification of their business due to competitive pressure from other regions. Only when that happen can we see its stock being push closer to its book value.<br />
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After my examinations, I would like to re-study DCF and valuation methodologies as I realized I have been neglecting it. I also need to take on more part time work. As always, I will be striving hard for my dream career and continue to watch me grow.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-48689492477914178972014-06-01T16:59:00.001+08:002014-06-01T22:05:03.266+08:00Semester Results Released: Huge Leap ForwardTowards the end of last month, my results for the semester was released, and it was one of the best I ever had. My semester GPA was 4.75 as I S/Ued one course, pulling my CGPA all the way up to 4.32 with 2 A and 2 A-. Through the last few months before my examinations, I have worked extremely hard, asking many questions when unclear about what the professor was asking, as well as doing all my tutorials diligently, while also doing my own study notes. This officially signals potential for me to reach first class despite my first few semesters being less than ideal. I am really happy as I worked one of my hardest ever for the semester and is rewarded with good results.<br />
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With that said, I would like to reflect on what I would have done better for next semester and beyond. Firstly, I have always wanted to study in advance of the lesson but always stopped after a few weeks in. This is really bad and I have to change that in order to get better grades. Next, I will be prone to getting complacent after getting good results for my quiz, like what I did with one of my course when I got 29/30, which eventually got me an A-. Next, some of my revision was done too late and this prevented me from getting A or even A+ for some of my courses. Lastly, I skipped most of the lectures for one course despite it being a relatively manageable subject, and I might not have to S/Ued if I have been a bit more diligent. My target is not to S/U any courses for the next 2 semesters and try to aim for the Dean's List.</div>
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I would like to take some time in this post to thank everyone who has helped me before. It might seem like a small thing for some people, but the fact is, I worked really hard, juggling school work, tuition and part time work, as well as playing and teaching my daughter and spending time with my wife, which results in me sleeping at 2AM or even 4AM relatively frequently during the semester in order to finish up my work and studies. And it all paid off. </div>
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The people I want to thank are in no order of merit and each and every one of them is important to me. First, I want to thank my mother and my wife, for always supporting me and taking care of the family. Next, I want to thank my daughter for always pushing me forward and my brothers for giving their subtle support. I also want to thank all the professors who have been very forthcoming with my many enquiries. I also would like to thank Future Civil Servant for keeping me on track and updating me about day to day administration matters, I would not have done it without revising with him and going through many arguments and debates about the different concepts in the courses we took. Next semester, Future Civil Servant be will gone for an overseas exchange and I foresee an even higher wall to climb without our usual exchange of ideas and concepts for our studies.</div>
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The road is still long, the war is not over, and the battles are going to get tougher. Some of my friends actually experienced a fall in their CGPA and everyone will definitely be working much harder. I will need to stay diligent and alert and hungry, if not I might just fall right back down. Thank you, a tougher battle awaits, and I will try my best to come on top.</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1354651735898650701.post-30355117270566129492014-05-27T00:03:00.001+08:002014-05-27T00:03:04.596+08:00Carousell, A Good Way To Make Some Quick BucksToday, I would like to share my experiences with Carousell, a mobile app. Through the course of using this app, I have been able to get rid of some unwanted books for a total of $12. I am very pleased as this freed up some of the place in my home as well as gotten some cash back for me which I might have thrown away. The official site is here: <a href="https://carousell.co/" target="_blank">https://carousell.co/</a> but this site is just a front for its mobile application.<br />
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After getting into VC as a summer analyst, my whole perspectives of business have changed. There are a lot of hugely successful entrepreneurs out there and they have made me rethink stuff about vying so hard for a banking and finance job. I absolutely love what I am doing now as I have many chances to not only speak with many incredibly smart people, but people who actually create viable products or services that benefit society. One thing that has strengthened that is relevant for the scope of this post today is that I foresee Carousell will be big in the future. They have already secured funding and I do think that they can go even bigger.<br />
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I will no doubt be using Carousell regularly as I am looking to improve my present cash flow situation but I am not going to use the business revenue I get from Carousell as luxury expenditure, instead it will be funding towards my future business project. Now, I am going to start saving hard and maybe start a new business in 1 to 2 years time. Even though I aspire towards entrepreneurship, I will definitely work hard to get into finance and then start something in this world. So many success stories are around me that I wouldn't have known had I not gotten into this industry. I will be a hedge fund manager cum venture capitalist someday, and there will be a name attached to me. Just like Peter Thiel is attached to Paypal, I will be linked to something, real big, real helpful for the community. Until then, I will be selling actively on Carousell to fund raise!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-56324046014264548852014-05-21T19:40:00.001+08:002014-05-21T19:40:33.772+08:00Benjamin Graham - The Intelligent Investor Part 6For previous versions of the review, do head <a href="http://midasinvestments.blogspot.sg/2013/12/benjamin-graham-intelligent-investor.html" target="_blank">here</a> for part 1, <a href="http://midasinvestments.blogspot.sg/2013/12/benjamin-graham-intelligent-investor_16.html" target="_blank">here</a> for part 2, <a href="http://midasinvestments.blogspot.sg/2014/01/benajamin-graham-intelligent-investor.html" target="_blank">here</a> for part 3, <a href="http://midasinvestments.blogspot.sg/2014/01/benjamin-graham-intelligent-investor.html" target="_blank">here</a> for part 4, and <a href="http://midasinvestments.blogspot.sg/2014/05/benjamin-graham-intelligent-investor.html" target="_blank">here</a> for part 5. This will be the last and final instalment of the review. I have learnt so much nuggets of wisdom from this book that I find it a pity to part with this book. I have used the theories in this book to successfully make returns beating the market, coming close to a 20% return for the year including dividends and distributions from my holdings. However, I believe that creating a cash cow from a suitable business venture is also key to becoming financially free, however that is a story for another day. With no further ado, let us head into part 6 review of The Intelligent Investor by Benjamin Graham.<br />
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<b><span style="color: blue;">Activist investing might be able to improve operational efficiency</span></b><br />
In this case, Graham wants us to know that as shareholders of the company, we are essentially part owners of the company. Therefore, the management actually works for us but yet increasingly, shareholders are becoming like tame sheep who listens constantly to the management, agreeing with them on all their decisions during Annual General Meetings (AGM). To be honest, I was disappointed by <a href="http://www.cnbc.com/id/101639390" target="_blank">Warren Buffett no vote status on Coca Cola compensation plans</a> for their executives. I personally echo Warren Buffett's views that it was a bit too excessive but felt that with his holdings and influence, could have prevented the bill from passing.<br />
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<b><span style="color: blue;">Margin of safety is an important concept in investing</span></b><br />
The difference between the price paid and the value of a financial asset is the margin of safety. The greater the margin of safety, the more likely it is for you to gain profits. Forecasting future earnings have been relatively popular in modern times but estimates have to be understated rather than overstated in order for maximum margin of safety in helping one make a sound investment.<br />
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<b><span style="color: blue;">Diversification goes hand in hand with the concept of margin of safety</span></b><br />
Margin of safety gives a better probability for profits rather than loss but a total loss in investments is still possible. However, with the right diversification, the aggregate profits from investing is likely to write off the losses from investing.<br />
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<b><span style="color: blue;">Investing is like doing business, and one should adhere to these principles:</span></b><br />
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<li>Know what you are doing, know your business</li>
<li>Run your own business, and trust someone who can be trusted</li>
<li>Calculate your potential for profits prudently and shrewdly </li>
<li>Have the courage to follow through with your calculations and conclusions</li>
</ul>
<div>
<b><span style="color: blue;">Successful investing is about managing risk, not avoiding it</span></b><br />
Risk is present in whichever investments we made. Successful investment comes from acknowledging the presence of risk, but preparing well enough to manage it, such that there is a margin of safety. Be aware of your investments, so that you will be able to better control your fear when the market swings widely.<br />
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With that, I have come to the end of the review of The Intelligent Investor by Benjamin Graham. I hope you guys have benefited from this review as well! Do keep a lookout for my next review! </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-78714125622488807512014-05-18T21:46:00.000+08:002014-05-18T21:46:16.897+08:00The Cost Of Raising A Child In SingaporeVery often, when I tell people that I am still studying and have a family of my own with my own kid, they will ask me about my expenses, whether it is hefty for someone my age etcetera. Since this is not about my day to day living expenses, I will not include things like utilities, rent. Today, I am simply going to do couples a favour and post my total expenses from the start of my wife's pregnancy journey to my current 9 months old baby girl's monthly expenses. This might provide soon-to-be mothers and fathers a heads up on what kind of expenses to expect. Take note that individual circumstances might vary and my expenses are very conservative as I did not do some checks which were unnecessary like checking the gender of the baby (no matter if its a girl or boy, my reasoning was that I will still love him/her the same). I will also add in additional tips and touch on what are some of the benefits provided by the Singapore government to help with costs of raising a baby in Singapore.<br />
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My wife did her checks regularly at NUH (National University Hospital) and delivered there as well. At that time, we got a senior consultant as others were unavailable. In the end, this turn out to be the smartest move as even though the rate was 20-25% above normal consultants (around SGD$100+ if I remembered correctly), the doctor was very understanding of my status as a student and sometimes waived off the fees. I remain appreciative of her gesture to this day. As a result, the total check up costs amounted to about $1,000-$1,500 for the full 9 months inclusive of trimester appointments, compulsory checks like diseases screening, down syndrome screening (not compulsory but I still did it as I felt it was important, around $200).<br />
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I got a class B something ward for my wife. The room was shared with 3 other ladies. The total costs amounted to around $4,000-$4,200 for the delivery costs, 2 days stay in cost, epidural ($400+) to relieve labor pains. Therefore, I estimate the total costs for the full 9 months until delivery to be about $5,500-$6,000, which incidentally, is close to the amount that is provided by the cash component of the baby bonus for the first baby ($6,000), which is given in 3 batches of $3,000 in the first few weeks, $1,500 in the next 6 months, and another $1,500 6 months later within a total duration of 1 year. Take note that my wife had a natural birth and any complications or advanced surgical procedures like cesarean will be much more costly.<br />
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After the birth of my baby, we went to a polyclinic for her immunisation injections and vaccines, and it was free of charge. A special note here is that the government now also allocates a $3,000 medisave account for a Singaporean baby to defray medical expenses for the baby. The monthly diapers expenses come to about $50, while milk expenses come to about another $50. We also bought a baby cot ($150), a baby stroller ($250), a baby carrier ($70), some baby materials (>$100), some toys (>$100) throughout the 9 months. There was one time we went to the emergency ward for the baby after she came back from overseas and the cost was around $100+ as well. A good policy present is the Child Development's Account (CDA) in which the government performs a dollar to dollar matching up to $6,000 for the first baby before the age of 12. Therefore, one only has to put in $500 a year to maximize the increased balance provided by the government for the child's day to day needs, educational expenses and medical expenses at selected locations.<br />
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All in all, I expect expenses to increase after my baby girl comes of age to go to childcare centres to learn, as well as to make friends (around one and a half years old). However, I heard that there are also subsidies provided by the Singapore government and I will be looking it up as well. The first 9 months of raising a child is definitely manageable, even for a student like me who is making minimum wages every month haha. Of course, I place great emphasis on providing the best for my baby girl and will definitely splurge if there is a need, like spending close to $2,000 overseas for her medical expenses (reclaimed by travel insurance, but will still spend even if it is not claimable). The joy of seeing my baby girl definitely outweighs any spending that I have to made. She has changed my entire life and I will definitely strive much harder for her. At the end of a hard day work, she is able to put a smile to my face, even if I just worked for more than 12 hours.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-47814803388367827592014-05-17T12:09:00.000+08:002014-05-18T01:05:36.347+08:00Benjamin Graham - The Intelligent Investor Part 5This review will be my second last review of The Intelligent Investor by Benjamin Graham. Through the course of doing up this review, I have come to a single conclusion about learning. While it makes sense to do a book review on a book with general concepts, the marginal returns from doing one with abstract concept is minimal and tedious. This is because not only does one have to understand the concepts, but in trying to convey the essence for readers, takes up additional time, incurring opportunity cost to one's investment study journey. Therefore, I have decided to limit any future book reviews to 1 post instead of various parts like The Intelligent Investor by Benjamin Graham.<br />
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On another note, please click <a href="http://midasinvestments.blogspot.sg/2013/12/benjamin-graham-intelligent-investor.html" target="_blank">here</a> for part 1, <a href="http://midasinvestments.blogspot.sg/2013/12/benjamin-graham-intelligent-investor_16.html" target="_blank">here</a> for part 2, <a href="http://midasinvestments.blogspot.sg/2014/01/benajamin-graham-intelligent-investor.html" target="_blank">here</a> for part 3, <a href="http://midasinvestments.blogspot.sg/2014/01/benjamin-graham-intelligent-investor.html" target="_blank">here</a> for part 4 of my reviews of the Intelligent Investor by Benjamin Graham. <br />
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<strong><span style="color: blue;">There are a few tips to avoid accounting pitfalls:</span></strong><br />
<ul>
<li>Read from backwards to discover the things the firm might want to hide</li>
<li>Read the footnotes in order to gain a deeper understanding behind certain items</li>
<li>Learn more from popular financial statements analysis textbooks and guidebooks</li>
</ul>
<strong><span style="color: blue;">To determine a strong company, there are various key indicators:</span></strong><br />
<ul>
<li><span style="color: orange;">Profitability</span></li>
</ul>
Take a look at their earnings on book value. A high rate of return on invested capital usually corresponds with an increase in earnings per share annually. <br />
<ul>
<li><span style="color: orange;">Stability</span></li>
</ul>
Stability is measured by the maximum decline in per share earnings in any of the past 10 years, as against the average of the 3 preceding years.<br />
<ul>
<li><span style="color: orange;">Growth</span></li>
</ul>
Compare against the index with respect to P/E ratio. <br />
<ul>
<li><span style="color: orange;">Financial Position</span></li>
</ul>
Ensure that the companies are in sound financial position. This is seen from their current ratio. Also ensure that companies have relatively low long term debts.<br />
<ul>
<li><span style="color: orange;">Dividends</span></li>
</ul>
A history of continuance without interruption signals a potentially strong company. Compare with respect to the P/E ratio and across competitors in the same industry group.<br />
<ul>
<li><span style="color: orange;">Price History</span></li>
</ul>
Price history is important in assessing whether the market is going to value the company at the right value once an investment is made.<br />
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<strong><span style="color: blue;">Include the stocks into the investment portfolio once they meet the seven statistical requirements for a defensive investor:</span></strong><br />
<ol>
<li>Adequate size</li>
<li>A sufficiently strong financial condition</li>
<li>Continued dividends for at least the past 20 years</li>
<li>No earnings deficits in the past 10 years</li>
<li>10 year growth of at least one-third in per share earnings</li>
<li>Price of stock not more than 1.5 times net asset value</li>
<li>Price no more than 15 times average earnings of the past 3 years</li>
</ol>
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<b>(1)</b> - Not less than $100 million of annual sales for an industrial company and not less than $50 million of total assets for a public utility</div>
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<b>(2)</b> - For industrial companies, current ratio of at least 2 (current assets/current liabilities). For public utility company, debt should not be more than two times the stock's equity at book value</div>
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<b>(3)</b> - Uninterrupted payments for at least the past 20 years (SGX is relatively new so make some reasonable adjustments yourself)</div>
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<b>(4)</b> - Some reasonable earnings</div>
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<b>(5)</b> - EPS growing at least by one third </div>
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<b>(6) </b>- Current price should not be more than 1.5 times the book value of assets </div>
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<b>(7) </b>- Current price should not be more than 15 times average earnings of the past 3 years</div>
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<b>RULE:</b> P/E ratio multiplied by book value should not exceed 22.5.</div>
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<b><span style="color: blue;">Predictive approach is known as the qualitative approach</span></b><br />
This approach involves trying to anticipate what the company will achieve in future years, hopefully accurately. Careful studies might be done to gauge possible factors that might affect the drivers of the company like earnings. This study emphasizes prospects, management, and other non-measurable factors that is necessary to analyze the growth of the company.<br />
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<b><span style="color: blue;">Protective approach is also known as the quantitative approach</span></b><br />
Protective approach is concerned with the price of issue at the time of study. The main study is to assure oneself of substantial margin of indicated present value above market price, covering any possible future disruptions to the business. This approach scrutinizes the measurable relationships between selling price and earnings, assets, dividends and so forth.<br />
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<b><span style="color: blue;">Updates to Graham's criteria for stock selection</span></b><br />
<ul>
<li>Adequate size (should steer clear of stocks with a market capitalization of less than $2 billion)</li>
<li>Current ratio of at least 2 (conservatively financed companies)</li>
<li>Earnings stability (EPS has to be positive for at least a decade)</li>
<li>Dividend record (Dividend payments tend to be a positive sign)</li>
<li>Earnings growth (EPS grows by at last 1/3 over 10 years)</li>
<li>Moderate P/E ratio (Only find stocks whose current price is no more than 15 times average earnings over the past 3 years)</li>
<li>Moderate P/B ratio (Price to book ratio of no more than 1.5)</li>
</ul>
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<b><span style="color: blue;">A summary of the Graham-Newman methods for the enterprising investor</span></b><br />
Here are some of the investment operations done by Graham-Newman Corporation between 1926 and 1956:<br />
<ul>
<li><b><span style="color: orange;">Arbitrages</span></b>: The purchase of a security and the simultaneous sale of one or more other securities considering the exchanges under reorganization, merger or something along the line</li>
<li><b><span style="color: orange;">Liquidations</span></b>: Purchase of shares which were to receive one or more cash payments in liquidation of the company's assets fulfilling a calculated 20% annual return or more and the possibility of a successful outcome was at least 80%</li>
<li><b><span style="color: orange;">Related Hedges</span></b>: Purchase of convertible bonds or convertible preferred shares, and the simultaneous sale of the common stock into which they were exchangeable. Position established at a close to parity basis</li>
<li><b><span style="color: orange;">Net Current Asset</span></b>: Acquire as many equities as possible at a cost for each of less than their book value in terms of net current assets alone, giving no value to plant account and other assets. Purchases made were usually 2/3 or less of the stripped-down asset value</li>
</ul>
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<b><span style="color: blue;">Additional criteria towards stock picking for the enterprising investor</span></b><br />
<ol>
<li>Financial condition where current assets is at least 1.5 times current liabilities, and debt not more than 110% of net current assets</li>
<li>Earnings stability where there is no deficits in the last 5 years</li>
<li>Current dividend stream</li>
<li>Earnings growth significant</li>
<li>Price of share less than 120% of net tangible assets </li>
</ol>
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<b><span style="color: blue;">Two methods have found to consistently provide good results in the longer past</span></b></div>
<div>
<ol>
<li>Purchase of low multiplier stocks of important companies</li>
<li>Diversified group of stocks selling under their net current asset value</li>
</ol>
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<b><span style="color: blue;">Special situations might provide profit potential for the enterprising investor</span></b></div>
</div>
</div>
</div>
</div>
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There are many situations where one can actually make money. Some examples are mergers and acquisitions by buying the stock of the targeted company and selling the acquiring company's stock to hedge the risk, and by looking at book value per share during periods of liquidation (bankruptcy). However, due to the significant time and effort involved in studying merger arbitrage, it is discouraged for individual investors.</div>
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<b><span style="color: blue;">Some suggestions for success in the stock market</span></b></div>
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<ul>
<li>Continual practice</li>
<li>Use a stock screener, with the right criteria for search</li>
<li>Study the management team</li>
<li>Read Berkshire's annual reports</li>
<li>Be disciplined and consistent </li>
<li>Pay attention to what you do and how you do it, ignoring market noises</li>
</ul>
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<b><span style="color: blue;">A formula to determine operational efficiency:</span></b></div>
</div>
<div style="text-align: center;">
ROIC = Owner Earnings / Invested Capital</div>
<div style="text-align: center;">
where Owner Earnings is equal to:</div>
<div style="text-align: left;">
Operating profit </div>
<div style="text-align: left;">
+ depreciation</div>
<div style="text-align: left;">
+ amortization of goodwill</div>
<div style="text-align: left;">
- federal income tax (paid at company's average rate) </div>
<div style="text-align: left;">
- cost of stock options</div>
<div style="text-align: left;">
- "maintenance" (or essential) capital expenditures</div>
<div style="text-align: left;">
- any income generated by unsustainable rates of return on pension funds (exercise discretion)</div>
<div style="text-align: center;">
and where Invested Capital is equal to:</div>
<div style="text-align: left;">
Total assets </div>
<div style="text-align: left;">
- cash (as well as short term investments and non-interest bearing current liabilities)</div>
<div style="text-align: left;">
+ accounting charges that reduced invested capital </div>
<div style="text-align: left;">
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<div style="text-align: left;">
The above formula shows what the company has been able to earn from its operating business and how efficiently shareholders' money is being used. ROIC of 10% is considered attractive. As with previous ratios and analysis, exercise your own discretion relative to industry and peers.</div>
<div style="text-align: left;">
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<div style="text-align: left;">
<b><span style="color: blue;">Stay away from complicated financial instruments and companies involved with them</span></b><br />
As a value investor, I will definitely not be buying a company that has issued many warrants, convertible bonds, preferred stocks. This is because the calculation involved in trying to determine a true value for the stock becomes immensely harder. Another reason is the fact that I do not understand these instruments very well. According to Graham, financial instruments like stock-option warrants are disasters waiting to happen. Equities are also worth less with warrants outstanding as value is being eroded away.<br />
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<b><span style="color: blue;">Study past company and stock occurrences to benefit from Graham's style of intelligent investing</span></b><br />
Read up on as many stock happenings as you can. Find out more about company activities as well as how it can affect stock prices. When in doubt, stick to a conservative way of investing. Rule number 1 in investing from Warren Buffett is to never lose money and rule number 2 is never to forget rule number 1.<br />
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With that said, do keep an eye out for part 6 of The Intelligent Investor, the final and last instalment of the book review. I have learnt so much through the process of reviewing this book and am really glad that I have taken extra time to learn. I will also be doing reviews of Security Analysis, as well as other investment classics by famous investors like Peter Lynch. Do continue to support the site!</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-62754241646913990522014-05-15T22:41:00.001+08:002014-05-15T22:41:29.367+08:00Preparing For My Venture Capital InternshipBefore going for my venture capital internship, I have been doing tons of preparation so that I will be able to contribute massively to my team when my internship begins. I have been doing tons of readings on venture capital as well as actively following the news on Tech In Asia, e27 and Tech Crunch. I have never known that there was so much activity going on in the tech industry but after reading through the news, I am becoming more and more drawn into the world of venture capital.<div>
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These are some of the things I have been doing in order to become more aware and stronger in my knowledge of investment, both in the public market and the tech industry:</div>
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<ul>
<li>Reading up on daily tech happenings</li>
<li>Exercising daily (more for discipline rather than job preparation)</li>
<li>Studying venture capital books, understanding venture capital legends like Bill Draper</li>
<li>Study investment related books, I believe in the maxim "all is one, one is all", everything in the world is inherently correlated </li>
<li>Building up on my excel knowledge</li>
<li>Doing market research for venture capital</li>
<li>Going for networking events to hone my networking skills, with a heavy emphasis on using LinkedIn as my tool for maintaining my networking relationships</li>
</ul>
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I also recently went for a bulge bracket bank networking session and managed to know some professionals who are in research and was really enlightened by the massive amount of information they gave to students. The networking session has really benefited me immensely and I will definitely strive to go for more of such events in the future.</div>
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There are also two things I am doing on top of preparing for my venture capital internship and that includes trying to let more and more people know about my tuition coordination business as well as advanced studying to prepare for my eventual university battle 3 months later. I am really looking forward to everything that is going in my life right now even though I am always fatigued. However, the challenges ahead are only going to increase, and with that, I have to constantly develop myself further as well.</div>
Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-1354651735898650701.post-39005601905771983502014-05-14T00:21:00.000+08:002015-01-05T22:53:18.733+08:00Policy Analyst At A Government Statutory Board<span style="font-family: inherit;">Apologies readers for the lack of updates on my side. </span><br />
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<span style="font-family: inherit;"><br /></span></div>
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<span style="font-family: inherit;">I have landed a summer internship as well, but as my with my dream, I got an internship at a Government Statutory Board as a Policy Analyst Intern. I have always wanted a taste of how it is like to work as a policy analyst, and as exciting as it sounds, I am only three days away from starting my internship. </span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit;">The Policy Analyst title probably sounds cool, but one may wonder what a policy analyst actually do. I will attempt to share the roles and responsibilities of a policy analyst from my own understanding. In a nutshell, <span style="background-color: white;"><span style="line-height: 19px;">policy analysts strive to influence various political and social events, raise public awareness of issues depending on the government statutory board and then attempt to shape government policy in those areas. Through the work of policy analysts in government agencies, we will strive to conduct research, analyze the proposed policies, evaluate the effects of existing policies, and report their findings to the </span><span style="line-height: 19px;">permanent</span><span style="line-height: 19px;"> secretary (if the findings are successful), and once approved, will then be released to the members of the public. It is basically a job that can shape the future of the country through the analysts' extensive research work and critical thinking abilities. </span></span></span><br />
<span style="background-color: white;"><span style="line-height: 19px;"><span style="font-family: inherit;"><br /></span></span></span>
<span style="font-family: inherit;"><span style="background-color: white;"><span style="line-height: 19px;">As discussed previously <a href="http://midasinvestments.blogspot.sg/2013/12/new-author-different-aspirations.html">here</a>, I mentioned that I </span></span><span style="background-color: #fdfefa; color: #222222; line-height: 18.200000762939453px;">hold a strong desire in policy making, and I personally feel that every individual can, and will be able to contribute in one way or another, into the public sector, and to help in building a better nation together. Although I know that things may not always turn out to be positive, I am optimistic about the experience that I am going to have over the next 8 weeks. </span></span><br />
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<span style="font-family: inherit;"><span style="background-color: #fdfefa; color: #222222; line-height: 18.200000762939453px;">I will be sharing my experiences as it moves along, so stay tuned to my updates!</span></span></div>
Terryhttp://www.blogger.com/profile/13958206071353871451noreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-64570762453282357312014-05-11T01:05:00.001+08:002014-05-11T01:05:32.809+08:00Search Engine Optimising Midas InvestmentsToday, I relived my past as a webmaster by tweaking some blogger scripting codes so that I will be able to search engine optimize my blog. I have been blogging for more than a year but was always "puzzled" (could not be bothered) as to why Google did not list my blog in its search engine very favourably despite the huge amount of high quality content on the blog. Moreover, Yahoo did not even list this blog in its directory, leaving me feeling very much confused (momentarily displaced but couldn't care less). This was an insult to my years of experience as a relatively skilled webmaster who earned thousands from the operations of my online business. I will however admit that I was lazy and could not be bothered to optimize my blog. Yet, after realising that I wanted Midas Investments to go above and beyond its current scope of service and content provision to the general masses, I took around 1 solid hour to settle all the nuances of search engine optimization for the blog.<br />
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After tweaking many parts of the blogger template, I am finally able to gain a relatively higher ranking based on results from <a href="http://www.metachecker.net/" target="_blank">Meta Checker</a>. If you operate a blog or website as well, do take a look at how well you are actually letting netizens know about your blog. This site went from a deep yellow Horror rank to a dark green Excellent rank and I was quite happy about the overall outcome.<br />
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To make things brief, some of the things that was done to this blog includes:<br />
<ol>
<li>Making robots follow the site</li>
<li>Meta keywords</li>
<li>Meta descriptions</li>
<li>Making blog post as the relevant search for search engines</li>
</ol>
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I am sure there are readers of this blog who are experts in search engine optimization so please feel free to leave some comments if you have any ideas on how to improve the site's ranking and position. Alternatively, you can drop me a private mail <a href="http://midasinvestments.blogspot.sg/p/contact-us.html" target="_blank">here</a> and I would be immensely grateful. Despite the previous failure in SEO, the site has been able to gain a relatively stable average traffic of 100 unique visitors per day as seen from Google analytics and I would just like to take some time today to say thank you to all the readers and supporters of this site, as well as readers who have taken the effort to comment on the site.</div>
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I will continue to provide high quality contents on investing and general finance matters in general, as well as update readers on my journey to become a top performing hedge fund manager cum venture capitalist. Thank you very much.</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-69235306352969389642014-05-09T00:41:00.005+08:002014-05-09T00:41:59.758+08:00Random Thoughts About China, Vietnam And The WorldI do not usually like to touch on politics. However, politics and economics are very much linked together. A wise policy implemented at the right time can grow the economy while a poor policy established at the wrong time threatens the country's economy. Today, I would like to touch on my personal feelings about China after reading about Chinese ships provoking Vietnamese vessels to drill oil in the South China Sea (<a href="https://sg.news.yahoo.com/vietnam-chinese-ships-ram-vessels-near-oil-rig-134607409.html" target="_blank">https://sg.news.yahoo.com/vietnam-chinese-ships-ram-vessels-near-oil-rig-134607409.html</a>).<div>
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Before I delve into the topic at hand, I would just like to offer my honest opinions on<br />Vietnam. Vietnam is currently the 4th largest potential market in South East Asia, with over 90 million citizens. However, the country is declining at a fast rate. The core of the country is rotten and values are not inculcated rightly. Vietnam has the potential to be a huge economy if the right policies are adopted but its rampant corruption and severe income inequality issues continue to destroy the country's potential. In 2013, the per capita income of Vietnam stands at USD$2000, an embarrassing figure for its huge potential. To put things into perspectives, its per capita income is <b><u>close to some countries in Africa!</u></b> In the times of the Vietnam War, when great generals like Ho Chi Minh and Vo Nguyen Giap stood against the Americans, the sky was literally the limit when they won against the United States. However, decades of hedonistic indulgences has not moved the country forward. Please do not feel that I am against Vietnam or look down on Vietnamese. In fact, I love the country and its culture, but feel saddened by the continuous erosion of the country's potential by its government. I even learnt the language in my first year during university as I felt there was much potential for this country, studying hard enough to score an A. </div>
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Now, why have I touched on this before going into the above topic? It is a very sad fact that as a communist country, Vietnam is unlikely to receive support from global superpowers like the US and other European superpowers like UK and Germany. Add to that the Ukraine crisis and you know that the various superpowers have their plates too full. Moreover, its severe poverty has led to a weak military force that is completely incomparable to China, where more and more reserves are currently being diverted to further develop its military might. The Vietnamese government have been taunted for days and yet no appropriate response has been sent from Hanoi. This is clearly an act of bullying and the national pride of Vietnam is at stake here. From this incident, I gained renewed respect for the Singapore government as the Singapore government was stern in its approach towards the haze incident last year and the naming of ships incident this year. </div>
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Now where do I see things going forward? ASEAN. If the Vietnamese government is able to leverage on ASEAN to put pressure on China, the dispute might have a peaceful ending. However, any weakness on the part of the Vietnamese government will put a stain on its national identity. Most governments which have adopted the right policies have been able to move out of a manufacturing economy after some decades. Japan, Singapore, Hong Kong are some examples of successful transition. Yet, Vietnam remains a predominantly manufacturing economy.</div>
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Now where does the global economy fits into this picture? Firstly, if China is able to gain control of the South China Sea, it will become a major oil producer. This will give it unprecedented economic strength as huge reserves are expected to lie under the South China Sea. Next, China's strong current account surplus and huge foreign reserves gives it flexibility in gaining a stronger foothold on the global economy. In addition, its undervalued Yuan continues to offer it competitive edge in further growing its economy, giving it the best of both a knowledge based economy in certain cities like Shanghai and a manufacturing economy in other cities. Moreover, China is expected to become the largest economy in 2014, displacing US. </div>
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Moving on, we know that China is getting increasingly assertive in their behaviours. There is really no knowing what China will next try to assert against if the taunt against the Vietnamese government goes unchallenged. The Philippines government has made a tough stance by detaining Chinese ships, which I felt was a clear message to China that they cannot be played with. Japan has ramped up its defences near the Diao Yu/Senkaku islands. Now, can Vietnam stand against China?</div>
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The fact is, in light of the global recovery, political issues in the region threatens the regional economy, and hence its recovery. However, I do doubt the possibility of a war as a war does not benefit any parties, but the threat of war is very real. However, as I am not a politician, my takeaway from this whole saga is to continue to invest prudently and steadily.</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-70726082003906724802014-05-06T15:26:00.002+08:002014-05-06T15:28:35.051+08:00Vard Holdings - Hype And More Hype? Vard Holdings is a major global shipbuilder, constructing offshore and specialized vessels used in the offshore oil and gas exploration and production and oil services industries (<a href="http://www.vard.com/about/Pages/default.aspx" target="_blank">http://www.vard.com/about/Pages/default.aspx</a>). After conducting my due diligence on this company, I have determined this company to be <b><u>overvalued</u></b> at its current price, but is surprised by the amount of positive sentiments despite its increasingly bad operating performance on forums.<br />
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Before I go into why the company is not attractive and would not be of value to an intelligent investor, I would like to show the readers the 3 statements of the company. All the statements are compiled from the annual reports provided by the company at its official site (<a href="http://www.vard.com/Pages/default.aspx" target="_blank">http://www.vard.com/Pages/default.aspx</a>).<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihUFN0fPzVafo6IC635TDMEzlamONZB1GLlqh_pAhtYYW8YlwzOMjg0nO49O8coaDelUmPbiyRzvo-G5RQiS9Rl5f9xuc-D3AFbMZi5-Wfno5nrvZexpgj0VXKqlgJ3Z-HtRLN5V55xIU/s1600/Vard+Holdings+Income+Statement.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihUFN0fPzVafo6IC635TDMEzlamONZB1GLlqh_pAhtYYW8YlwzOMjg0nO49O8coaDelUmPbiyRzvo-G5RQiS9Rl5f9xuc-D3AFbMZi5-Wfno5nrvZexpgj0VXKqlgJ3Z-HtRLN5V55xIU/s1600/Vard+Holdings+Income+Statement.jpg" height="320" width="304" /></a></div>
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From its income statement, you can see that EPS has been falling. Not only that, revenue has been relatively stagnant and shows a decreasing trend despite the increase in operating costs and cost of goods sold. Another thing that bothers me about this company is the increase in salaries and related costs despite the company's sluggish performance. One might remember that when I invest in companies, I want a solid and credible management team. However, this company just cannot reassure me when looking through their statements. I invest for the long term and I do not feel safe parking my money at this company and the fact that its key operations are done in Norwegian Krone presents even more risk to me. I would also like to mention the fact that number of shares increased to 1,180 million from 1,025 million from 2010. I hate share dilution that does not add value to the shareholders, and a search on SGX was not able to bring up the relevant announcement, giving me more doubts about this company as I do not know for what and why there was an increase in number of shares. Next, we will move on to the balance sheet.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_zaTbi1DvgRcHMnqVNqFYihUiAoQP07XiKE8FK4h1C-nSbf9DKKUBwmJCgihsmiI3gZnwVdw1vhNrOqD9yiaS6E5GC5z2dmS6NYUcv6YHG7YcflPMkK8fhQF8fJFNQhMmepbUg-ighWM/s1600/Vard+Holdings+Balance+Sheet.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_zaTbi1DvgRcHMnqVNqFYihUiAoQP07XiKE8FK4h1C-nSbf9DKKUBwmJCgihsmiI3gZnwVdw1vhNrOqD9yiaS6E5GC5z2dmS6NYUcv6YHG7YcflPMkK8fhQF8fJFNQhMmepbUg-ighWM/s1600/Vard+Holdings+Balance+Sheet.jpg" height="320" width="194" /></a></div>
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Although the company is relatively strong in terms of its balance sheet. I am just not comfortable with the increasing loans and borrowings. I just do not feel good about this company as I feel that the increase in debt has not generated additional returns for their shareholders. EPS remain low and has fallen by quite a huge margin for the last 2 years. According to Graham, net working capital (CA - Total Liabilities) can be an indicator of a bargain issue but the company's net working capital has fallen from 750 million NOK in 2010 to 427 million NOK in 2013. This doubly reinforces my thoughts that the company is overvalued. Next, let us move to the cash flow statement.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh64f1qMOHqiz5O8Ekm7Apa5f7fCl8T07PbGLuf8skP-rE2juUuyOva6afZL903_F2E5LiOXZiNfUMdMsC9eUhtr_n3DQ8dLxKfXtBDxjTBn3sWN4K-F0fAIGngaJI0HEPI7eZ4DPtav3Y/s1600/Vard+Holdings+Cash+Flow+Statement.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh64f1qMOHqiz5O8Ekm7Apa5f7fCl8T07PbGLuf8skP-rE2juUuyOva6afZL903_F2E5LiOXZiNfUMdMsC9eUhtr_n3DQ8dLxKfXtBDxjTBn3sWN4K-F0fAIGngaJI0HEPI7eZ4DPtav3Y/s1600/Vard+Holdings+Cash+Flow+Statement.jpg" height="320" width="193" /></a></div>
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The key takeaway I get from browsing through the cash flow statement is that the company is burning cash. The company actually have a deficit in cash for the past 2 years but was able to still have a positive cash flow at the end of the financial year from past cash reserves. I do not like a company that is burning so much cash, especially when they have a poor dividend policy (no dividends in 2013 despite a profitable year). One thing significant in FY2013 though is the increase in investments which might lead to higher prospects for the company. However, spendings on investments in FY2012 was also substantial but the company still experienced a lacklustre year in 2013. By the end of the first statement, I was actually no longer interested in the company but to ensure that there is depth and breadth in my analysis, I will go on to the last excel sheet, which is the ratio analysis.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8W6qTO98FiHVpXLLPRuDNN17lCOaJLjpbVbdo1mnGV3DrX5BbDdMy8z-OcsO4RO7pJU3XEC922DqpimJj1kGuytQyuMN_mILenVNZrrDEpn4CRjYHvBR-dORGp5DWHwHWSt6aJNZC7Ws/s1600/Vard+Holdings+Ratio+Analysis.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8W6qTO98FiHVpXLLPRuDNN17lCOaJLjpbVbdo1mnGV3DrX5BbDdMy8z-OcsO4RO7pJU3XEC922DqpimJj1kGuytQyuMN_mILenVNZrrDEpn4CRjYHvBR-dORGp5DWHwHWSt6aJNZC7Ws/s1600/Vard+Holdings+Ratio+Analysis.jpg" height="242" width="320" /></a></div>
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I would just like to highlight several quick ratios in the sheet above. If we take a look at the profitability indicator ratios and the operating performance ratios, we will notice that the company's operational performance is really declining at a fast rate. The company's operational performance is seriously disappointing at its current high valuation. </div>
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To summarize, this company is disappointing but various research reports actually suggest a buy on this company with various forums commenting on the growth prospects of this stock. What is my take on this? I feel that this company does not deserve its current high share price. Moreover, its dividend poor policy makes it doubly unattractive. Be careful before putting money into this stock, the hype on this stock is incredibly strong, with various sell side analysts pitching a buy. At the end of the day, do I think the stock will go up? I think the stock will go up if the market expects it to go up, but over the long run, we will see the stock reaching its true value and personally, I do not think it will be up. What is my target price on this? I did not bother to do a valuation on this stock as I think it will be a waste of time but readers who want to carry out valuation can request the excel sheets from me. </div>
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For readers who are holding on to this stock, I would suggest you to offload. However, if you believe in the hype, you can continue holding. After all, speculation drives prices in the short run. As a value investor, this is definitely one stock I would abstain from. For readers who are interested in similar stocks, you can take a look at ASL Marine Holdings. <b><u>I do not hold any stocks in ASL Marine Holdings as of this moment</u></b>, but after taking a look at it while pondering whether I should do a full fledged competitor analysis, I find possible potential for this stock, in terms of its P/E and P/B ratio, as well as more stable revenue growth and profit margins. Please do your own research before deciding on whether to buy this stock. With that said, feel free to let me know of how you feel about this stock. Thank you very much. </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-82832277991047381392014-05-05T00:26:00.001+08:002014-05-05T00:32:22.916+08:00My Chance Encounter With Mr Tharman Shanmugaratnam Today is a special day. I saw Mr Tharman Shanmugaratnam, the Minister of Finance for Singapore in the afternoon having his lunch. I have always been impressed by him and seeing him up close, so friendly to the people around him was doubly unforgettable. His presence really shook me up and made me more motivated to achieve much more in my life. Some people might say that I am dramatising affairs, but if you truly take some time to look through Mr Tharman's curriculum vitae, you will know that Mr Tharman is someone who is nothing short of extraordinary. I do not want to delve into politics for this blog, thus, I will just focus on why he was able to impress me so much, from his achievements aspect.<br />
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The most extraordinary and remarkable thing about Mr Tharman is that he belongs to the Group of 30, a private, non-profit international body comprised of very senior representatives of the public and private sectors and academia. This Group has members who are extremely influential and knowledgeable from many different countries, each standing at the epitome of their country's financial system. The group aims to deepen understanding of international economic and financial issues, to explore international repercussions of decisions taken in the public and private sectors, and to examine the choices available to market practitioners and policy makers (direct lift from source listed below).<br />
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I will not speak longer about how impressive Mr Tharman is lest someone think that this is a political blog. However, this chance encounter has given me the extra boost that I need to dash forward. I want to become someone that can make a positive impact on people's lives and the many stories that I hear and see around me all day are testaments to this possibility. If it is possible for an immigrant to become one of the most legendary investors in the world today, for school dropouts to become billionaires, there should be nothing to stop anyone from achieving their dreams. The true challenge is in one's mind and seems like its time I stop giving myself so much leeway in my own personal development cum career progress.<br />
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<b>Sources:</b><br />
<a href="http://www.group30.org/about.shtml" target="_blank">http://www.group30.org/about.shtml</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-50381775407094720972014-05-03T17:02:00.001+08:002014-05-04T00:11:57.223+08:00Japan's Economy Hiccup And Saizen REITWith the raising of the sales tax from 5% to 8%, we are currently witnessing declining domestic consumption in Japan. Is this policy going to affect Japan's economic growth? I do believe that going forward, Japan has to start making real and suitable structural reforms to its economy before the worsening of its economy. Quantitative easing by the Bank of Japan and huge fiscal spending by the Japanese government can only aid the economy to grow to a limited extend, and the staggering public debt threatens the root of the Japanese economy. The fundamentals of the Japanese economy need to be fixed before it can escape from its decades of deflationary pressure.<br />
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However, Japan remains a largely closed society and that has prevented it from moving forward to a limited extent. With declining population and a growing old age problem, it would appear that opening its door up to migrant workers might make its economy competitive again. This is a structural solution to the Japanese economy but has never been put up for serious debates. Say what you will about Singapore, but our open door immigration policy has made the Singapore economy one of the most competitive in the world.<br />
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Next, a depreciating YEN has to be substantiated with a growth in current account surplus. However, the trade balance of recent months in Japan have been disappointing. The Japanese economy is now at a deadlock, and it has to tread forward carefully, before its internal debts materializes into external debts issues when more and more Japanese grow disillusioned with the country.<br />
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Structural reforms are the key to any economic policy. Throughout history, we have always witnessed changes to an economy when there is a crisis. For example, Singapore has repeatedly use its employer CPF contributions to withstand the effects of financial crisis in order to maintain a near full employment situation. China has carried out banking reforms and moderate its exchange rate to keep its economy competitive and grow its public and private holding of foreign assets. Japan is now at a crisis, the threat of decreased liquidity is real as market expectations change, and more easing by BOJ might dampen the economy and worsen its Current Account.<br />
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With that said, some of my readers might remembered that I have invested in Saizen REIT. Am I still confident of its growth prospects? The fact is, I foresee earnings to be relatively stable in the next 2 to 3 years. I will still be collecting my dividends regularly on time. I will not sell off this REIT unless exchange rate depreciates significantly against the USD. This is because of all the properties held by Saizen REIT, most are in relatively densely populated areas. However, if there is a clear sign that the Japanese economy can grow no longer and the YEN will never appreciate again and general prices and wages remain low, I will sell Saizen REIT. Even though I really feel strongly for this REIT, I want to be an investor who is rationale and profitable. Until then, a decreased price just presents more value for Saizen REIT.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-8616710761074567852014-04-29T22:18:00.001+08:002014-04-29T22:18:50.368+08:00Initiating Coverage On One Stock Every WeekI have decided to start a new program that allows me greater practice and provide more benefits for my readers. From now on, I am going to initiate coverage on a stock every week. I will be manually compiling all the data through annual reports while listing possible catalysts that could either drive the company's growth or pull the company down to oblivion.<br />
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If there are any stocks that my readers would like to suggest, please feel free to comment and I will do my best to accommodate your wishes and provide the rest of the readers with a decent report. I might or might not use DCF to value the company but rest assured that I will at least list key ratios for comparison out. The first report will come out on 9th of May, Friday. If there are no requests by then, I will simply do a coverage on AIMS AMP Capital REIT, a REIT that I am currently holding but have not initiated coverage on.<br />
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This will also serves as practice for my equity research career so do be assured that I will try my very best to provide an objective analysis as much as possible.<br />
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As for my portfolio, I am currently up by about 13% since the start of the year. The year has been rather eventful for me considering that Mr Koh Wee Meng initiated a huge buy order for Global Premium Hotels at the cut off price of $0.33 just last week, which gives me a paper profit of around 33%. I do foresee more growth for this stock and will therefore be holding for the foreseeable future. Even though the buy order ended last Friday, the price has been steady for about 2 days now.<br />
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With that said, do feel free to suggest possible stocks. I will attempt to give you a decent report with my most truthful opinions. Thank you. Unknownnoreply@blogger.com12tag:blogger.com,1999:blog-1354651735898650701.post-84938036261730850742014-04-28T00:40:00.001+08:002014-04-28T00:41:04.942+08:00Creating A Personal Website For Your Finance Recruiting EffortsRecently, I have noticed an increasing trend of people creating a website for their resume. I was thus wondering if I should do the same seeing as to how I plan to get into equity research for my first job and I really need a differentiating factor against competitors who desire to get into the different investment banks. After reading many different articles, I came to the conclusion that having a website to enhance your resume is actually a good plus to your recruiting efforts if done in the right way.<br />
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Therefore, I have decided to create a personal resume website soon, after my venture capital internship. I also plan to start publishing research reports at my resume website. However, I will not be disclosing the personal resume page live on this blog as I want to be free from scrutiny. After my <a href="http://midasinvestments.blogspot.sg/2013/12/media-appearances-boon-or-bane.html" target="_blank">media appearance last year</a>, I have decided to focus on my own personal development first before further communicating my dreams to people.<br />
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There are a few things I need to fix first before creating my website and that includes:<br />
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<li>Getting in shape, losing at least 5 to 7kg</li>
<li>Continue to read up on investment books</li>
<li>Write a lot more for this blog and polish up my writing skills so that when I do create the personal resume website, it is going to look presentable and good</li>
<li>Get into the CFA society for student members</li>
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With that said, I foresee many busy days ahead juggling even more commitments aside from work and studies. </div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1354651735898650701.post-10299265216585740282014-04-23T23:51:00.002+08:002014-04-23T23:51:19.747+08:005 Interview Questions You Should AskI have gone to countless interviews and through these experiences, have my ups and downs. During one of my most embarrassing interview last year at a bulge bracket bank, I made a commitment to excel in all future interviews and to become a worthy candidate that will never be so unprepared again. Today, I would just like to touch on some of the questions I always ask at the end of the interview. <div>
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<b>What do you think make a great (insert title you are applying for) at this firm?</b></div>
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This gives the interviewer the impression that you really want to excel in the job. Take note that I specifically said "great" instead of just "good". This will no doubt form some subliminal message in the interviewer's eyes that you are suitable to be a great candidate, provided that you did not screw up the front part of the interview.</div>
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<b>What do you most enjoy about working here?</b></div>
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This gives me a perspective into the firm as well as let me know what kind of colleagues I am going to have. You can even see if they are passionate as well when they are dealing with your questions, using it to gauge how enthusiastic they are about their jobs, as well as how you will feel about the job.</div>
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<b>What is your favourite moment at this firm?</b></div>
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By favourite moment, what I mean is performance related moment. As I usually go to interviews for the financial and investment industry, I will ask questions pertaining to market deals, investments made, portfolio companies etc. This can be anything. If you are going for a FMCG (Fast Moving Consumer Goods) interview, you can ask them about their favourite brand marketing experience and things like that.</div>
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<b>Where do you see as the next area of growth in the company?</b></div>
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This question has to be relevant to the interview that you had. You do not want to suddenly throw a curve ball at the interviewer. I usually ask this question to find out what is the interviewer's perspectives on growth in the company. For example, I tend to ask where does the interviewer think the company is going to expand operations in / which region offers the most growth potential and things like that.</div>
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<b>Ask them something they are passionate about.</b></div>
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The last question is something really simple. Pay attention to them when they are introducing themselves to you and at the end of everything, wrap things up and ask them something they are passionate about. Give them leeway to talk and immerse themselves in the conversation. This will make them feel you are incredibly interesting and possibly get them to like you. After all, interviewing is just about making the person opposite you like you and want to work with you.</div>
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With that said, all the best for your interviews preparation. With the summer coming, I hope everyone reading this blog is gainfully employed or preparing for their internship. Do feel free to comment if you have more questions that you think will really set you apart from the pack of dull, monotonous as well as robotic candidates. Thank you. </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1354651735898650701.post-50791829569729413502014-04-18T17:17:00.000+08:002014-04-18T17:17:26.411+08:00Union Steel Holdings - Buy Recommendation<div class="separator" style="clear: both; text-align: center;">
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Today, I am going to initiate a buy recommendation on Union Steel Holdings Limited. I have recently entered into this company at a price of $0.105 for 9 lots, due to limited free cash. I like to put my money where my mouth is, and leave it for you to decide whether you want to enter this company. The current price is $0.108. In my opinion, Union Steel Holdings is an extremely cheap stock right now at its TTM P/E of 6 and P/B of 0.5055 for its most recent quarter according to Bloomberg.<br />
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Union Steel Holdings is engaged in the business of recycling of ferrous and non-ferrous scrap metal, trading of steel products, and non-ferrous metal products, rental of sheet piles, steel plates and beams, leasing of industrial properties as well as provision of scaffolding services and related consultancy services, supply of scaffolding materials and skilled workers and buyback of used scaffolding materials (Union Steel Holdings Annual Report, 2013).<br />
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So as not to bore you with the details, the current Net Asset Value (Total Assets - Total Liabilities) per share is around $0.2. This represents a close to 100% growth potential for this stock. Most stocks tend to reach their NAV and most even overshoot their NAV over time. However, investors might be worried about this stock because of increasing competition in the trading of metal and lowered prices. However, with the recent enhancements of various business segments like recycling business, the company is getting increasingly diversified and offers a certain safety of margin. However, inventories constitute a large proportion of the group's current assets so there might be a certain discount to its NAV.<br />
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Digging deeper, we can see that the group's core operations (Trading & Recycling) are unable to cover the expenses comfortably from the Income Statement (read Notes to Financial Statement Section 6). Yet, rental income continues to be strong and I do not think that there will be any downward adjustments in the near to medium term future, which should constitute a relatively stable income for 2014. <br />
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The most crucial factor that led me to make this investment decision was my faith in the management. Mr Ang Yu Seng has decades of experience and he has led the group out of the Financial Tsunami in 2008, suffering a loss in only one year. Despite business being slow (shown by decrease in revenue from 2010 to 2012), I have faith that he will push the company to greater heights, shown by the recent increase in revenue and profits for the FY 2013. <br />
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As the global economy continues to gain traction, I have faith that the steel industry will pick up once again. This company has been punished by the market which leads to its current low and cheap price. From a valuation point, there is much upside to this investment and from qualititative analysis done on this company, the growth potential remains. Now the question is, are you game for it?Unknownnoreply@blogger.com2