This is exactly the moment i am waiting for...
 | |
| The breakout in gold is here. It's time to be long gold. Back in 2011, gold enjoyed a big rally. As the European debt crisis grew worse, prices shot from $1,550 an ounce to a high of around $1,900. This big rally was followed by a big decline… one that took gold back down to the $1,550 level. From May through July, gold held steady around the $1,550 level. It then began trading in a tight price range. In this range, gold's day-to-day volatility fell to its lowest point in over a year. These periods of tight price ranges and low volatility often precede big price moves…
That "decision-point" arrived the next day… Wednesday's comments from the Federal Reserve led the market to think more financial stimulus is on the way. That resulted in a selloff in the dollar and a rally for gold. The metal shot out of its trading range. Take a look… .gif) Over the very short term (two to 10 days), gold is likely to pull back near its breakout level. Markets just like to frustrate traders before moving substantially higher. So if you're already long gold, you can expect to give back some of your gains over the next week or so. But the longer-term picture is clear. Gold has good fundamental reasons to move higher. And it has registered an important price breakout. You can trade this rally with a gold fund like SPDR Gold Shares (GLD) or Swiss Gold Shares (SGOL)… or with a quality gold miner. Gold stocks are incredibly cheap right now… and could rally triple digits over the next year. Names to consider here are Goldcorp (GG), Barrick (ABX), or Yamana (AUY) in the U.S. As for Singapore, You can take a look at my previous blog post here. Thanks to paikia, he helped on some clarification on the SPDR Gold ETF (http://www.spdrgoldshares.com/sites/sg/): the lot size is just 10 shares so at the current price of $162.03 = US$1620.30. That seems comfortable for most investors :) Whatever method you choose, make sure you're on the right side of the market. Right now, that side is long. |
28.8.12
GOLD Breakout $_$ on 28/8/2012
22.8.12
Diversification with High Income Yields' Plays
Chance upon a very good article written by a Money Morning Writer... It focuses on the type of income generating instruments and their risks + how you can diversify away the risks.
I didn't really notice there are so many income generating instruments so let me share with you the list here:
How to Be Safely Diversified and Earn Hefty Yields
If you're not at all concerned about yield, diversified income investing is easy.
The market is full of consumer goods companies offering 3-4% yields some of which have staggering records of dividend increases for 30, 40 or even 50 years.
Provided these companies are not overpriced, they make very good long-term "heirloom" investments since they are very nearly recession-proof. What's more, once companies like these have established a track record of dividend increases for several decades, they take pains to keep it.
But the truth is a 3-4% yield on its own simply doesn't cut it for most income-seeking investors.
In Ben Bernanke's rotten world, a few select high-yield investments are practically a necessity these days.
After all, if you are looking to establish a $100,000 income stream, you'd need nearly $3 million in principal if your yield is in the 3-4% range. For many income investors, it's just not enough.
The problem is once you start to look for companies with a 5% yield or better, the selection of investible companies becomes much more narrow.
And here's what I know about narrow: it tends to concentrate your investments in a few sectors, which can be risky.
The good news is this diversification problem can be overcome. Let me explain.
The Search for Attractive Yields
In today's market, there are two types of companies that offer attractive dividends in the 7-10% yield range. They are real estate investment trusts (REITs) and energy/resources master limited partnerships (MLPs).
Both these investments benefit from special tax treatment, which means they don't pay corporate tax, provided they pass their income through to investors as dividends.
Although they are tied to the real estate cycle in apartments, offices, warehouses or retail buildings, equity REITs make solid investments.
They're not to be confused with the high yielding mortgage REITs that currently benefit from the Ben Bernanke yield curve.
The largest of these are American Capital Agency Inc. (Nasdaq: AGNC) and Annaly Capital Management(NYSE:NLY) both of which pay yields in excess of 13%. They invest in long-term fixed rate mortgages and finance themselves in the short-term repo market.
That's a very dangerous game, which promises to blow up when interest rates eventually rise. So don't get fooled by those gigantic yields, stick the property REITs.
On the other hand, MLPs offer investors the chance to benefit from the resource extraction business, whether oil, gas or mining. MLPs routinely pay yields over 6%, with some into the double-digits.
The snag to watch here is that income stream for most of them is tied to a finite pool of assets, or will expire in a finite period of time.
Since your investment is essentially "on the clock" that means that what you see is not precisely what you get; you have to look closely under the hood.
In this case investors need to make sure the yield is high enough and the pool of assets or life of the company long enough to justify the overall investment.
Another sector that offers high dividend yields is shipping.
With a 9% yield, companies like Safe Bulkers (NYSE:SB) offer investors the return from a fleet of ships, operated as bulk carriers (in SB's case) or as tankers.
The problem here is that shipping is a highly cyclical business. It depends not only on world trade and the strength of the world economy, but also on the shipbuilding cycle. In good years, the world's shipyards all operate at full blast and produce too many ships for the amount of trade available which eventually weakens the shipping market.
Even More Ways to Spread the Risk
Income oriented investors are thus likely to end up with a portfolio heavily weighted in real estate, resource MLPs and shipping. That's a start but doesn't quite do the job.
They will have nothing in tech, little in emerging markets, and not much in consumer staples (which typically yield in the 3-4% range).
They may have a few investments in electric utilities which can yield above 7% if the market is depressed. But the wise investor will be careful here - utilities' returns often have a maximum, imposed by the local regulators, but no minimum. If storms, earthquakes or unusual costs hit, utility profits and dividends can be decimated.
To be properly diversified, investors should consider these two sectors as well.
One is the financial services sector, where a number of companies making mezzanine debt and equity investments pay good dividends - a typical example is BlackRock Kelso Capital Corporation (Nasdaq: BKCC) which yields over 10%.
Here investors need to avoid companies that dilute net asset value by frequent share issues, since the managers of such companies typically make their return on assets under management. A couple of insurance companies also pay good dividends and can from time to time be interesting.
The other source of diversification is the international funds sector. There are a number of closed-end funds, such as the Mexico Fund (NYSE:MXF) which pay out a substantial percentage in "dividends" each year.
Provided the market in which the fund invests is healthy, this can be a good way of boosting income, while offering exposure to an interesting international market -Mexico itself is currently attractive. While purists will argue that part of these dividends is paid from capital, they at least offer the investor a good cash flow from a source outside the real estate, energy and shipping sectors.
Finally, another approach to income investing is to mix the 7-12% dividend yields from real estate, MLPs and shipping with "heirloom" blue-chips from other sectors yielding 3-4%, giving a blended cash flow yield of perhaps 6%.
For the safety-conscious yield-seeker, this may be the best strategy of all.
Good Investing,
Martin Hutchinson, Editor
Permanent Wealth Investor
I didn't really notice there are so many income generating instruments so let me share with you the list here:
- REITs
- MLPs (more popular in USA)
- High yielding mortgage REITs
- Shipping Trusts
- Utility (think Telecommunications / Electricity... people cant live without)
- Financial Service Sectors
- International Funds
- Big Stable Companies with steady, progressing annual dividends
Meanwhile, Enjoy the article below :)
How to Be Safely Diversified and Earn Hefty Yields
If you're not at all concerned about yield, diversified income investing is easy.
The market is full of consumer goods companies offering 3-4% yields some of which have staggering records of dividend increases for 30, 40 or even 50 years.
Provided these companies are not overpriced, they make very good long-term "heirloom" investments since they are very nearly recession-proof. What's more, once companies like these have established a track record of dividend increases for several decades, they take pains to keep it.
But the truth is a 3-4% yield on its own simply doesn't cut it for most income-seeking investors.
In Ben Bernanke's rotten world, a few select high-yield investments are practically a necessity these days.
After all, if you are looking to establish a $100,000 income stream, you'd need nearly $3 million in principal if your yield is in the 3-4% range. For many income investors, it's just not enough.
The problem is once you start to look for companies with a 5% yield or better, the selection of investible companies becomes much more narrow.
And here's what I know about narrow: it tends to concentrate your investments in a few sectors, which can be risky.
The good news is this diversification problem can be overcome. Let me explain.
The Search for Attractive Yields
In today's market, there are two types of companies that offer attractive dividends in the 7-10% yield range. They are real estate investment trusts (REITs) and energy/resources master limited partnerships (MLPs).
Both these investments benefit from special tax treatment, which means they don't pay corporate tax, provided they pass their income through to investors as dividends.
Although they are tied to the real estate cycle in apartments, offices, warehouses or retail buildings, equity REITs make solid investments.
They're not to be confused with the high yielding mortgage REITs that currently benefit from the Ben Bernanke yield curve.
The largest of these are American Capital Agency Inc. (Nasdaq: AGNC) and Annaly Capital Management(NYSE:NLY) both of which pay yields in excess of 13%. They invest in long-term fixed rate mortgages and finance themselves in the short-term repo market.
That's a very dangerous game, which promises to blow up when interest rates eventually rise. So don't get fooled by those gigantic yields, stick the property REITs.
On the other hand, MLPs offer investors the chance to benefit from the resource extraction business, whether oil, gas or mining. MLPs routinely pay yields over 6%, with some into the double-digits.
The snag to watch here is that income stream for most of them is tied to a finite pool of assets, or will expire in a finite period of time.
Since your investment is essentially "on the clock" that means that what you see is not precisely what you get; you have to look closely under the hood.
In this case investors need to make sure the yield is high enough and the pool of assets or life of the company long enough to justify the overall investment.
Another sector that offers high dividend yields is shipping.
With a 9% yield, companies like Safe Bulkers (NYSE:SB) offer investors the return from a fleet of ships, operated as bulk carriers (in SB's case) or as tankers.
The problem here is that shipping is a highly cyclical business. It depends not only on world trade and the strength of the world economy, but also on the shipbuilding cycle. In good years, the world's shipyards all operate at full blast and produce too many ships for the amount of trade available which eventually weakens the shipping market.
Even More Ways to Spread the Risk
Income oriented investors are thus likely to end up with a portfolio heavily weighted in real estate, resource MLPs and shipping. That's a start but doesn't quite do the job.
They will have nothing in tech, little in emerging markets, and not much in consumer staples (which typically yield in the 3-4% range).
They may have a few investments in electric utilities which can yield above 7% if the market is depressed. But the wise investor will be careful here - utilities' returns often have a maximum, imposed by the local regulators, but no minimum. If storms, earthquakes or unusual costs hit, utility profits and dividends can be decimated.
To be properly diversified, investors should consider these two sectors as well.
One is the financial services sector, where a number of companies making mezzanine debt and equity investments pay good dividends - a typical example is BlackRock Kelso Capital Corporation (Nasdaq: BKCC) which yields over 10%.
Here investors need to avoid companies that dilute net asset value by frequent share issues, since the managers of such companies typically make their return on assets under management. A couple of insurance companies also pay good dividends and can from time to time be interesting.
The other source of diversification is the international funds sector. There are a number of closed-end funds, such as the Mexico Fund (NYSE:MXF) which pay out a substantial percentage in "dividends" each year.
Provided the market in which the fund invests is healthy, this can be a good way of boosting income, while offering exposure to an interesting international market -Mexico itself is currently attractive. While purists will argue that part of these dividends is paid from capital, they at least offer the investor a good cash flow from a source outside the real estate, energy and shipping sectors.
Finally, another approach to income investing is to mix the 7-12% dividend yields from real estate, MLPs and shipping with "heirloom" blue-chips from other sectors yielding 3-4%, giving a blended cash flow yield of perhaps 6%.
For the safety-conscious yield-seeker, this may be the best strategy of all.
Good Investing,
Martin Hutchinson, Editor
Permanent Wealth Investor
21.8.12
Far East Hospitality IPO - Sure Profits?
After some quiet time without any interesting IPOs,
Here comes a favourite among Singapore conservative investors: Far East Hospitality IPO!
First and foremost - The Details of the IPO
Here comes a favourite among Singapore conservative investors: Far East Hospitality IPO!
First and foremost - The Details of the IPO
- Prospectus Link here
- Offering Price: $0.93
- Opening & Closing Time for IPO; Commencement of Trading Time
- Targeting to raise about S$1.49 billion, Far East Hospitality Trust is the largest initial public offering (IPO) in Singapore this year.
- Trust's portfolio consists of seven hotels and four serviced residences in Singapore and is valued at over S$2 billion
- 4th hospitality trust in Singapore; Other three: CDL Hospitality Trusts, Ascott Residence Trust & Ascendas Hospitality Business Trust.
Pros
- Institutional tranche of the IPO was over 30 times subscribed.
- All the properties are situated in Singapore; easy to conduct due diligence on tenancy rate & stable outlook since Singapore tourism is still growing healthily
- REITs have out-performed the STI as a whole & is seen by the local investors as safe yield plays -> more interest -> higher price
Cons
- High Price of $0.93 is deterring some investors from joining the "fun"
- Yield of 6% is slightly lower compared to other REITs
My 2 Cents
Ever since the STI has risen by so much, people are waiting on the sidelines for more positive indicators. I believe people will utilize their cash-pile to subscribe into IPOs while they are on the wait.
Furthermore, with cornerstone investors like Aberdeen Asia, APG, NTUC income & the IPO being 30x subscribed shows Great Demand!
Nevertheless, i won't recommend people to hold onto this stock as a 6% yield for hospitality Reit isn't really sufficient for me since you are taking more risks as compared to Healthcare Reits or Shopping Mall Reits which are more stable.
Punt and Get out of there Asap! :D
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
16.8.12
Singapore REITs safer than houses
Gotten an email from my stock broker again.. a very detailed analysis on why
You can have access here: http://www.mediafire.com/?f2egf1j4tec8eh6
The 4 key points they talked about are summarized below:
My Two Cents
Although REITs are still showing that they can deliver good returns to the investors; the distribution yield will become lesser if the price of the REITs go up.
Thus, I believe when you are choosing your REITs, you will still do better in selecting REITs with constant progression in yield and has room for growth.
Going forward, capital appreciation of REITs may not be as robust as before since all the mid-caps are experiencing high volumes -> with risk appetites going up -> less people will turn to REITs for stable yield.
Nevertheless, they are still good for passive investing; especially for ladies who want to get higher returns but not interested (or will lose sleep) upon seeing the fluctations of the stock markets... (Monday and Tuesday is one such good example =p)
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
REITs
are safer than houses?!
The 4 key points they talked about are summarized below:
- Earnings and balance sheets resilient; A low interest rate environment and a firming SGD should continue to support yield compression
- REITs delivering steady and dependable 13% DPU growth in 2Q
- Sector gearing remains comfortable, at 31%, providing flexibility for acquisitions.
- Valuations returning to long-term averages; risk perception to pre-crisis levels
My Two Cents
Although REITs are still showing that they can deliver good returns to the investors; the distribution yield will become lesser if the price of the REITs go up.
Thus, I believe when you are choosing your REITs, you will still do better in selecting REITs with constant progression in yield and has room for growth.
Going forward, capital appreciation of REITs may not be as robust as before since all the mid-caps are experiencing high volumes -> with risk appetites going up -> less people will turn to REITs for stable yield.
Nevertheless, they are still good for passive investing; especially for ladies who want to get higher returns but not interested (or will lose sleep) upon seeing the fluctations of the stock markets... (Monday and Tuesday is one such good example =p)
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
15.8.12
Why Stocks Jump so High today!?
If you take a look at 14/08/2012 Top 20 Volume, you can see MAJOR Stock movement for Noble group, Sakari, China Minzhong... (and many more like STXOSV, Yang Zi Jiang etc..)
These are the stocks i have talked about or looked at past few months... So why have they jumped so high or rose so much in price today?
I have talked about why i believe STI will rise just a few months back... and now... STI points to a whole year high of 3,087.84!
I am now an advocate of Active Portfolio Management *Opportunity Investing* (where i spot Undervalued Gems ready to burst and hold them on for a few months or even a year+)
I strongly believe i can achieve 20% or more Returns Annually using this method and hope that You can join my newsletter stock picks when it is launched in due time! [Please support by "Liking" the Google+ icon so i know how many out there are interested :D]
Meanwhile, i will do a re-shuffle of my aims for the blog... Separating them into Passive Investing & Active Investing soon. Stay tuned for the updates!
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
These are the stocks i have talked about or looked at past few months... So why have they jumped so high or rose so much in price today?
- Because i have mentioned about the stocks (Just joking!)....
- Global markets are recovering (going from "Wah whole Europe is going to collapse -> Global Recession! to "Oh... now U.S. recovering, Europe not so bad liao")
- This is a bit tricky here... As always, ask around people or look at stock forums.. when many people are holding cash (lots of cash in their portfolio) and once stock markets are on the uptrend, what will they do? Pump them in the stock markets!!
- The stocks are Undervalued, having being beaten down badly to the post-2009 financial crisis levels because of the uncertainty in markets...(e.g. Noble below)
- Bright Prospects & Positive triggers from news annoucements (Look at Noble - http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_6C09FA1D98A594DD48257A59002F5118/$file/1H2012-MediaRelease.pdf?openelement)
My 2 cents
I am now an advocate of Active Portfolio Management *Opportunity Investing* (where i spot Undervalued Gems ready to burst and hold them on for a few months or even a year+)
I strongly believe i can achieve 20% or more Returns Annually using this method and hope that You can join my newsletter stock picks when it is launched in due time! [Please support by "Liking" the Google+ icon so i know how many out there are interested :D]
Meanwhile, i will do a re-shuffle of my aims for the blog... Separating them into Passive Investing & Active Investing soon. Stay tuned for the updates!
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
10.8.12
SELL Creative Singapore at $3.39 on Aug 9
Despite a happy moment for Singapore on its 47th Birthday, one firm is in trouble after chalking up 3 years of consecutive losses - Creative Singapore.
Creative has reported its earnings (or losses) report after market closed on Wednesday and markets are still closed due to National Day.
An important announcement is made after its Full Year reports as seen below:
*************"
Name of Issuer: CREATIVE TECHNOLOGY LTD hereby gives notice that:
(i) it has recorded pre-tax losses for the three (3) most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
(ii) its market capitalisation as at 08-08-2012, the last market day on which trading was not suspended or halted, isS$237.1 million.
(Trading is deemed to be suspended or halted if trading is ceased for a full market day.)
(i) it has recorded pre-tax losses for the three (3) most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
(ii) its market capitalisation as at 08-08-2012, the last market day on which trading was not suspended or halted, isS$237.1 million.
(Trading is deemed to be suspended or halted if trading is ceased for a full market day.)
The Company wishes to draw investors’ attention to Rule 1311 of the Listing Manual which states that the Exchange will place an issuer on a watch-list if it records:
(i) pre-tax losses for the three (3) most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
(ii) an average daily market capitalisation of less than $40 million over the last 120 market days on which trading was not suspended or halted. For the purpose of this rule, trading is deemed to be suspended or halted if trading is ceased for the full market day."
(i) pre-tax losses for the three (3) most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
(ii) an average daily market capitalisation of less than $40 million over the last 120 market days on which trading was not suspended or halted. For the purpose of this rule, trading is deemed to be suspended or halted if trading is ceased for the full market day."
**************************
News Articles can be seen here:
Luckily Creative is not a small-cap company, but however, more bad news await for Creative...
1) Currently embroiled in a lawsuit with a vendor over a wireless broadband network project
2) Creative does not expect an improvement to be registered at the end of the current quarter & is expecting to report an operating loss for the year.
3) Company said the overall market for its products remains challenging
The technical conditions also back up the fundamental analysis...
If you look at the chart, Creative is at the tipping point of a descending triangle. If such bad news and net losses keep pillng up, i believe there is only one way for it to go... Down.
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
8.8.12
Temporary Decline, Long Term Rise on the Radar
| |||
| It's happening again… the sneers, the nasty e-mails, the public ridicule… And that's just from my friends. "How's that big stock market decline working for you?" my friend Mark asked me yesterday. It's not working very well, of course. The S&P 500 has worked methodically higher since I started banging the caution drum a few weeks ago. The S&P 500 closed near 1,400 yesterday – up 2.5% in just the past month. So despite warning signs from the Volatility Index, the NYSE and Nasdaq Summation Indexes, and the McClellan Oscillator, owning stocks has been a profitable strategy. Hence, the public ridicule. Of course, that ridicule occurred back in April as well – when the market ground higher despite multiple caution signs. Eventually, the caution proved warranted… The S&P 500 dropped 9% in May and erased all of its gains for the year. The market is near the exact same condition today. So despite the nasty e-mails and sneers, I think it's best to err on the side of being too cautious right now. Please understand, I'm not bearish on stocks… I still think stocks will end the year slightly higher than where they are now. But jumping onboard the momentum train when the S&P 500 approaches its high for the year and a number of technical indicators turn bearish does not seem like a good strategy to me. Rather, it seems more prudent to use any hard declines as buying opportunities. And given the look of the following chart, we may be nearing the start of one of those hard declines right now…  This is a 30-minute chart of the S&P 500 – which works best as a short-term timing tool. The index is tracing out a bearish rising-wedge pattern, and it is bumping up into the resistance line of the wedge. This resistance should at least cause a pause in the uptrend and a decline back toward the support line at about 1,370. Notice, however, the negative divergence on the MACD momentum indicator. While the S&P 500 has made a recent series of higher highs, the MACD indicator is still below its July 30 high-water mark. So the momentum behind this most recent rally is weakening. This is a good clue that the next move lower in the market might develop into more than just a small pullback toward support. It may end up retracing the entire move higher over the past two weeks… and challenge support at 1,330. Bulls will do better waiting to buy at that level rather than chasing the market higher right now. Best regards and good trading, Jeff Clark
My Two-Cents
I believe the trend has gone up too fast in a short period of time. Some consolidation will occur and the STI may drop back to the Horizontal support line and continue to climb up thereafter.
Nevertheless, I have already stated in my previous blog posts
that...
stock indexes all over the world will bounce back again! I still want to reiterate my point that the Worst is over, and even the not-so-bad news will push the markets up! Especially when i see from the forums everyone has the CASH vault ready.
You won't want to be missing from the Bull Run when everyone is pumping their available cash into equities!
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
|
4.8.12
Why Analyst Reports are Useless *Sakari and China Minzhong*
After suffering from a long decline... my stocks finally rebounded! So Happy that Patience works for Value Investing! *Sob*
Sakari Chart
China Minzhong
When you do Value Investing, the most important part is not to believe in hearsay or be affected by "Bombardment" from Analyst Reports.
Analyst Reports are there for the short term - Urging you to buy/sell quickly for them to earn commission, but not earn money for you! Lol..
Just to reiterate like what many Analyst Reports churn out Sakari Target Price hitting $1 or something and China Minzhong to hit $2.20 if you go browse through last year reports. To me, Analyst Reports are there created for people who don't believe in their own-selves.
According to a past research or experiment by the famous Straits Times Investing Section journalist lady (sorry i forgot her name), she generates Percentage Gain/Loss using various methods to Buy Stocks:
- PE Ratios
- Analyst Ratings
- Dividend Yield
- Any 2 more which i can't remember at the moment
I remembered that the % win was the LEAST for following the Recommendations by Broker Analyst Reports.
However, to say a word of fairness, Broker Analyst Reports are a source of timely and useful information right at your fingertips. It is vital that you absorb just the information but ultimately, you stick to your own judgement and pick the winning stocks according to your own methodology!
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!
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