Longtermequity

Carl Jung on the state

2013-01-29T07:52:00.000-08:00

"He saw that the state was treated as a quasi-animate personality from whom everything is expected but that this personality was only camouflage for those individuals who know how to manipulate it."

Also am thinking about the Agency Problem.

The above two concepts may explain why things go wrong in this system of the world.

Ron Paul - our only hope.

2012-01-11T06:15:00.002-08:00

I disagree with Ron Paul on many issues like abortion and climate change.

Still I would vote for him If I were a US citizen.

People vote for candidates for a variety of reason, I am a consequentialist;- to me results matter. A president is not a man you have to admire. Like a plumber, a president is merely one you hire for a specific job.

There are too many sites that discuss the advantages of Ron Paul, so I will bring up only one point that I feel is missed by everyone.

Mexico will thrive if the war on drugs is ended. There is no reason why the standards of living in mexico do not rise to be the same as in the USA. The only thing holding it back is the crime and instability.

And as for the fence along the border, Mexico will have to make a fence to keep the Americans who will want to migrate there for a better life.

Recent purchases.

2010-11-01T04:46:00.000-07:00

Bought Google, because it was cheap (p/e <30).

Bought Tesco, because Buffet bought it. Will exit if Buffett sells.

These decisions are not very well thought out, but I don't have the time to do much research anymore. In both cases I am really assuming another well regarded investor has done plenty of due diligence.

Both companies also do not look very risky to me .

Prefer style over substance.

2008-11-18T02:52:00.000-08:00

"More troublingly, listeners preferred speakers who answered the
wrong question well over those who answered the right question poorly"

"A politician in a debate asked about the illegal drug
problem in America whose answer stresses the need for universal healthcare has engaged
in a successful dodge if listeners have both forgotten that she was even asked about
drugs, and evaluate her highly."

-From here. See a review of this paper here.

Time and Chance.

2008-10-21T05:28:00.000-07:00

I returned and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favor to men of skill, but time and chance happeneth to them all.

Despite our best efforts, the complexity of reality prevents prediction.

Strategic Hotels

2008-10-17T07:00:00.000-07:00

I was drawn to Strategic Hotels (NYSE:BEE) on hearing about Bill Gates taking up a stake in it via his investment company Cascade Investments. Value investors like Bill Gates are usually early to the party. The price has nearly halved since he bought shares and is around 4$ today( 17 Oct 08).

Recently I saw a report that Bill is now going to take an active strategic role in the business.

My guess is that at this price he can simply take over the company, Bill is no stranger to the hotel business, and has a stake in the Four Seasons Hotels.

I will skip detailing a valuation of the company here, I think it is cheap. Bill is no fool and I assume that he has done more due diligence than I will ever be able to match.

I am going long Strategic Hotels.

When to Sell Berkshire Hathaway

2008-09-22T06:16:00.000-07:00

I own some Berkshire Hathaway B shares. I have mentioned my reasons for buying Berkshire in a previous article. So now that I am sitting on a nice profit ( unlike most of my other buys from that time) should I sell now?

I feel that any stock should be sold if

It is overvalued.
There is better alternative.

To address point 1 we need to check if Berkshire is overvalued. To do so you may now use the IntrinsiValuator. It is a nice tool created by some nice guy to help us value Berkshire according to hints that Warren Buffett himself has given.
According to the site if you select "Conservative" in the Assumption field the "Intrinsic Value" for the B shares is 4829 USD. This is above todays (19 sep 08) price of 4595 USD. So we still have some way to go before I feel I should sell. I would sell when it is well above intrinsic value and maybe closer to the Optimistic scenario price of 6500 USD.

As for point 2, Are there equivalent or similar businesses that are available cheaper? To answer that I need to research Leucadia National Corp and Markel Corp. Both these companies are similar to Berkshire. They have insurance operations and use the premiums they receive to invest in diverse businesses. All these companies have well regarded managements and are followed by value investors.

Thats all for now...

My UK Pension Plan strategy.

2008-06-30T03:44:00.001-07:00

After moving to the UK I have been planning to Invest in my company's Pension Plan.

The benefits are obvious:

1) Company matches my contributions up to a limit.
2) Tax is refunded (40% for me) on my contribution to the plan.
3) If I run up huge gambling debts and declare bankruptcy, they can't touch my pension ;-).

I hate pension plans because:

1) The money is locked up, there is no good way to get the money out until I reach 55 ( far away for me).
2) Pension plan administrators pocket big fees for truly awful performance. Nearly all the funds offered to me in my very restrictive company pension have underperformed their benchmark over the last decade. My Plan provides only mutual funds and does not let me buy Shares.
3) If you leave the UK you can only transfer the money out to an approved scheme in your new country.

Still I feel that I should subscribe to the plan up to the limit my
company matches. There are other tax advantaged ways to invest if it were not for the company's contribution. The main disadvantage to me is that t I can not personally manage my money.

The best strategy I can think of is ..

As soon as I leave the company or move to another one I will transfer the money in the old Pension plan to a SIPP (self invested pension plan) that lets you buy individual shares. Any monkey can manage the money better than the typical funds that lurk in most pension plans. If you really have no ideas I suggest you look at the "RIT" investment trust that can be bought like any share on the London exchange. You can see a List of Investment Trusts at Trustnet. Investment trusts in the UK have historically done better than Mutual Funds.

I can Run a SIPP and a Company pension Plan simultaneously. My company refuses to pay to a SIPP directly and insists that they will only pay their contribution to the approved pension plan. However that does not stop me from transferring the Money to my SIPP soon after it is paid to the Company Pension Plan. So I can minimise the time my money spends in an awful fund in the pension plan. To minimize the damage my fund manager can do I intend to select a "Cash" Fund for my company pension Plan.

Unfortunately the average broker for a SIPP pension plan in the UK only lets you buy on the London Exchange and a few selected stocks ( not ETFs) on the major US exchanges. I feel that the best opportunities however are in small dividend paying companies in Asia and some US listed ETFs and a very few dividend paying OTC/Pink Sheet stocks.

3) If I leave the UK I can transfer my money from my SIPP to an approved scheme in another country.

So to summarize I'll always have two Pension plans. The first is a stocks and shares SIPP and the second is the current company pension plan. As I move from company to company I transfer my previous companies pension plan to my SIPP.

I may also transfer the money from my company pension plan to my SIPP as soon as it is paid in.

If I leave the country I can move my SIPP money to a approved scheme in the new country or even to something in Luxembourg.

All the above assumes low costs for transfers. You will have to check with your company pension provider about cost for transfers ( mine has no cost).

So which SIPP should I choose ? My desire is for zero or low costs ( not a percentage of assets) , zero or low transfer fees, ability to buy shares globally, and low brokerage. Hargreaves is a SIPP provider I have been looking at. If you know of better ones that permit excellent International share dealing please let me know.

Disclaimer: I do not own RIT ( I feel I can do better). I suggest RIT just because its past performance is not too bad and it is globally diversified. I also dislike buying Investment trusts like RIT when they trade at a premium to NAV. They usually trade at a Discount.

Top ETF picks for the next decade.

2008-06-25T02:47:00.000-07:00

The last ten years have seen the Asian financial crisis, the rise and fall of the dot-coms, the real estate boom and bust, the Iraq War, and the present credit crunch. I feel that the next ten will be no different with assorted manias, depressions, bubbles and wars occurring just like they have always done before. I see no reason why the next decade will be any better or worse than the last. Here are some ETFs that I feel will do well as suggested by their back tested performance over the last decade.

My top pick for all low risk investors is the DPN ETF . Its Index and back tested performance is described here . Historical data suggests that the consumer staples sector offers good returns with low volatility.

My pick for the next decade for those who do not care about volatility is is the DGS ETF . Its Index and back tested performance is described here . If you are not worried by an occasional 50% fall in value then dividend paying emerging market small cap stocks offer the highest rewards. Even after suffering an initial 50% drop in the Asian financial crisis this index has returned 20% annualized since 1998. Emerging markets

All the index links above show back tested results for the last decade so you can get an idea of the expected volatility and possible returns.

As you can see I like Fundamental Indexing, I own other ETFs from WisdomTree which creates these ETFs. The particular ETFs above were not available when I was last able to invest so I have ended up with some other stuff (DEM and DFE).

ETFs are funds but may be bought on the stock exchange like any other stock. there is no entry or exit load but there is brokerage. The underlying fund usually has a low annual expense ratio, usually .6% to 0.7% for the Wisdomtree ETFs.

Singapore, Taiwan, Korea and Sweden MSCI Index comparisions

2008-05-17T14:08:00.000-07:00

Once again I do a review of the valuation of various MSCI country Indices that interest me. My last similar article is here. All data is as of today (May 17 2008).

MSCI Korea: 10Yr annualized returns: 23.40%, P/E=17.23, P/B=2.62, Samsung=16% of Index.
MSCI Taiwan: 10Yr annualized returns: 2.09%, P/E=17.49,/ P/B=2.67, Taiwan Semiconductor =11.6% of index.
MSCI Singapore: 10Yr annualized returns: 11.05%, P/E=14.71, P/B=2.72, Financials=51.48% of index.
MSCI Sweden: 10Yr annualized returns: 11.05%, P/E=13.73, P/B=3.55, Ericcson=11.93%, Financials=23% of index.

Based on a simplistic analysis of the above I had bought Korea which then had the lowest P/E. Now that I am reviewing the valuation I see no need to change my holdings in Korea. Singapore looks cheap, but with Financials being a major part of the Index I am not sure if now is the right time to buy more.

Why look at Sweden? I just recalled from memory a chart from Jeremy Seigels "Stocks for the long run" which shows Sweden has the best long term return from equities; just slightly better than the US.

Disclaimer: I already own the Lyxor Korea ETF .
I am not sure if the numbers above include reinvested dividends. The P/E also seems to be different from other estimates I have seen, possibly because they may be using only annual figures and not TTM and also because the more bullish analysts usually mention forward P/E instead of trailing P/E.

Avoiding value traps.

2008-04-11T02:40:00.000-07:00

Stocks may appear cheap but may be about to get much cheaper.

If a great company is trading at a ridiculously cheap price then why is management not buying all it can from the open market?

I prefer to wait for management to buy in the open market. This simple strategy will help me avoid value traps.

As an example look at Moody's. A great company facing a few tough problems. I will not buy until the executives use their own money to buy in the open market. You can track insider buying at Moody's here.

My notes on equity investing in Singapore

2008-03-16T06:33:00.000-07:00

I have moved out of Singapore and am (today) in the UK. I will now post my findings on the best way local investors can sensibly invest in Singapore.

IMHO Investors in Singapore seem averse to an open sharing of ideas, I have no idea why. Unlike trading, Investing is not a zero sum game.

It took me a long time to get comfortable with investing here. If I had this information earlier it would have made me more money.

Here are my thoughts on how to go about things.

1) In my personal opinion between DBS Vickers and UOB Kay Hian I prefer
DBS Vickers for the fundamental investor, it has tools for screening,
more access to company financials and research reports, and the UI is tolerable.
UobKayHian seems more tuned to the trader than the investor. I was unable
to check out Phillips Capital. If you invest in markets like Korea - Phillips Capital seems to have access from Singapore unlike the other brokers.

2) The Share Investor magazine is the best way to keep track of
fundamental developments in Singapore stocks. It is the "Valueline" of
Singapore. A must have. Unfortunately there is no internet access to it. It is stocked at nearly every 7-11 store in the central business district.

3) Reuters has good pages (free) for almost all Singapore stocks. As an example see the Reuters page for Bright world precision machinery.

4) There are no taxes on capital gains or dividends (for the stock
investor), this makes Singapore the perfect place to invest.

5) The SGX announcements are a must read for insider info,
unfortunately SGX does not allow you to subscribe to announcements for
only your stocks of interest.

6) If you want stock related rumors and gossip there is the sharejunction site

7) if you want broker research you can get it at remisiers.org.

No investor should listen to the buy and sell recommendations from
his broker but the research is sometimes highly readable as it
presents the data clearly and explains business issues you may have
missed. The buy or sell recommendation at the end of the report is
best ignored. Based on the same numbers my opinion almost always differs
from the broker.

8) You will get sued if you make nasty comments about other people or
stocks so keep your online presence polite. Free speech rights you may be used to in the USA do not apply in the same way in Singapore. Defamation is taken very seriously. If you allege on a internet message board that a person is lying or dishonest you can expect to hear from their lawyer.

Some other suggestions:

1) Do not buy if insiders are selling, insider buy/sells are reported
on the SGX announcements page and in several daily broker reports.

2) Trust in dividends, if a company is profitable and yet cannot pay
dividends be suspicious. There is no excuse for not paying dividends in
Singapore. There is no tax on dividends, so no reason not to pay surplus cash to investors. I do not like companies that need cash to grow. The best companies can grow while paying out cash dividends and taking on zero debt.

3) Do not buy broker "buy" stocks, brokers are too generous with
"buys", buy only the "best" stocks.

4) Ignore technical analysis if you cannot prove with rigorous back testing that
it has worked in the past.

For those of you who still wish to follow my global investing adventures you can subscribe to my many groups as shown on the right panel "My favorite Links" of this blog.
Right now I am most active on my UK Group LongtermequityUK . These groups are spam free and have wide variety of real investors who try to help each other. There is no spam or advertising in any of these groups, only individual investors trying to help each other.

Been Elsewhere

2008-01-24T06:31:00.000-08:00

Have been posting at my UK group and on Caps.fool.com.

Meanwhile am waiting for The wisdomtree india Earnings ETF.

US housing futures

2007-09-23T21:53:00.000-07:00

Wow! now we can trade 5 year housing futures for the US. See article by Matthew Hougan here . A 15%-25% fall in real estate prices - unadjusted for inflation, is expected.

Moody's Coproration MCO

2007-09-16T21:14:00.000-07:00

Moody's (MCO) is an interesting company. To the unsophisticated like me it seems like they give you three letters like "AAA" and get a load of cash in return. Even Warren Buffett holds a stake. It seems like the perfect business to own - has a moat and has low requirements for capital.

What could go wrong? Recently the price has fallen on fears of lawsuits related to its role in the subprime lending mess. I am not qualified to comment but I feel that "Cogitarius" has done a good job summing up the issues on a Motley Fool board here.

So should I buy? Naah! If you know me you know that I have a way of avoiding value traps. I will not buy unless there is some confirmation from insider buying. You can see the insider trades for Moody's here. So if I see more insiders buying in the open market I will jump in.

Top picks - Reasonable valuations and insider buying.

2007-08-24T00:41:00.000-07:00

Bright world precision machinery . Price 0.61 SGD, pe 9 , yield 3%, roe 20-30%, zero Long term debt, p/b 2.5, p/s 2.3. See Insider buying and reports.
Super Cofeemix. Price 0.78, ( last post at 0.71), pe 13, ps 1.83, roe 15, yield 2.8%, negligible LT debt. See insider buying.

So we have two companies at reasonable valuations and with strong insider buying. These are my top picks for the next year. I already hold Bright World and will place an order for Super Cofeemix when I can arrange some cash next week, if it does not rise above 0.8 SGD.

Insider buying in Singapore may not be what it seems. In her book "Show me the Money" Volume 1, Teh Hooi Ling reports ( page 117 ) that - based on a NUS honors thesis by Jaikishin " Insiders tend to conceal information laden buy trades through the use of family members or friends... Insiders also .. buy their own shares in order to support the share price. Or some of the trades were carried out to confuse the market or mask their real intentions."

I am not sure if disclosure norms have changed since that study was carried out(1990) so the results may no longer be valid. She does suggest though that significant buying by multiple insiders may be a good long term indicator.

Anyway do your own research, your investments are your responsibility alone.

Super Coffeemix Manufacturing

2007-08-17T00:15:00.000-07:00

Super Coffeemix Manufacturing . Price .71 SGD, NAV 0.42, PE 14, P/S1.9, ROE 13.7, P/CF 11, LD/E 0.01, Yield 3%. Makes instant beverages (tea/ coffee ready mix) and convenience foods . Has been on my to research list for a long time, somehow I assumed the company had gone private and I forgot about them. Looks like it is still trading. See messageboard. Nice Annual Report , see quarterly report, and here. Sinagpore Exchange sponsored research reports are here .

From the reports we have

- 39,300,000 new ordinary shares were issued to CIM II Pte Ltd at S$0.60 per share, and
- 10,000,000 new ordinary shares were issued to Quek Chee Hoon at S$0.60 per share.
Post issue total shares are 542,542,980 and also we have 900,000 options issued to management.

My guess would be that if management think that S$0.60 is a good price to inject fresh cash then we can consider that to be a good price to buy.

Company has grown sales and gross income June end quarter by nearly 25%. Net profit skewed by other income from property sales. According to Shares investment No 301 Company has been profitable and paid dividends while growing sales and profits since records start from year end 2003. Possible negative is diversification into property development in Jiangsu China.

So it looks like a stable dividend paying and growing company in a defensive business, Reuters give long term D/E of 0.01. It does not pass my high ROE or low p/book screen but I can make an exception if the price is right as signaled by insider buying. Insiders seem happy to buy in the open market at S$ 0.83, price has fallen since then. Am thinking of placing an order.

I have tried their products. My office used to provide their instant tea packets in the cafeteria, the stuff is not great, but it is convenient, instant food will be with us for along time. Am off to make some instant coffee. Noted that its products are stacked in supermarkets and 7/11 stores right next to Nestle equivalents, so it seems to be holding up against the multinationals.

Jardine Strategic - A Margin of Safety?

2007-08-16T11:20:00.000-07:00

If you have read James Clavells books like TaiPan then you will love the Jardine group.

For the background see
http://findarticles.com/p/articles/mi_qn4158/is_20010620/ai_n14393712/pg_1
and
http://en.wikipedia.org/wiki/Jardine_Matheson_Holdings

I own Jardine strategic holdings, bought for its discount to Net Asset Value (NAV as reported in the balance sheet). It had turned up in a ROE/PTB screen I mentioned in an earlier post.

Some recent news.
Jardine Matheson the other jardine company said
"shareholders in Jardine Strategic are being invited to tender Jardine Strategic shares in the range of US$14.00 to US$14.50 per share representing a premium of up to 9.5 per cent. over the average closing price of the shares"

Source http://202.66.146.82/listco/sg/jm/press/p070815.pdf

and

"Net asset value per share up 27% to US$24.69"

Source http://202.66.146.82/listco/sg/jsh/interim/2007/int.pdf

So put simply the offer is at USD 14.5 - a big discount to the USD 24
NAV of Jardine strategic. An unacceptable offer, I am not handing in my shares. But maybe this is simply an ploy by the owners to prop up the price of Jardine strategic to prevent a raider from getting a big stake. The price has certainly risen to the offer price though I doubt anyone investing from the business perspective will sell at the offer price as it is below NAV.

So what you have is company growing in Asia available at a discount to NAV and it will not fall much more because of the buyback offer at 14-14.5USD - a margin of saftey. Right now it is trading around 13.5USD - 1$ less than the top of the offer range.

Stock Screen Analysis

2007-08-12T00:54:00.000-07:00

I will be analysing stocks from my previously posted screens here.

Incidentally I also I increased my ownership of Soundwill holdings and added China Print Power to my personal portfolio. I also recommended TCS (No ADR) and Wipro (WIT ) on the Indian Stock exchanges to my friends and family. I do not like the WIT ADR because it trades at a premium to the Wipro stock on the Indian NSE.

Chinese Estates Holdings Ltd 0127.HK (Hong Kong), price 12 HK$, p/Tangible book 0.72. Latest results say NAV is 16.74 HK$. In June the company said that it MAY be considering takeover offers. That explains the recent price surge, a takeover would be expected to be atleast at NAV. Has recently fallen since peak of 16HK$. Company has paid dividends consistently for 5 years, Has been buying back stock. Did make losses and not pay dividends like other real estate stocks in 2002 , If market values of properties fall, the company must reflect this as a loss, that is the biggest risk. Financial summary. NAV has grown consistently. I like their website, unlike some HK companies the site was easy to navigate and has a lot of information. See review of HK property maket. At 4.7% yields office property is not in a bubble. Worth a closer look.
Melco International Development Ltd 0200.HK (Hong Kong) .HK$12.3, P/Tangible Book 2.0. High growth possible on huge investments in Macau. See announcements . Gambling and Macau! . Joint venture with PBL Melco PBL has ADR.Caps profile for ADR. ADR . Usual search at webb-site.com, turns up nothing interesting. Get your daily Macau news fix here . Article on the Ho family , recent problems.Tough call.
Ellipsiz Ltd ELPZ.SI (Singapore). S$0.57, PE 4.5, yeild 2.5, p/sales 0.7, ROE 30, p/b 1.2, low debt. Semiconductor related business. See messageboard. Fall in prices due to failure of possible takeover. SGX announcements. Report. Slowdown in business expected. Cyclical business, made losses in 2003 but has tripled book value since then. Not cheap enough, prefer growing companies with higher yield or lower p/book. May buy if price falls below book.
Yaan Security Technology Ltd YAAN.SI (Singapore), S$0.22, pe 5, p/s 0.7, ROE 29, Yield 2.8,no debt. Messageboard. SGX announcements .Report. Report. Very competitive business making video security monitoring systems. Sector expected to grow. Like low price. May buy if price falls more.

High ROE and low P/B screens

2007-08-07T01:16:00.000-07:00

The results of my high ROE screen are here.
The results of my Low P/B screen are here.
The results of my 20% annualized return backtested screen are here.
I would have posted these in this article but the table formatting got messed up.

Singapore High RoE/PtB stocks reviewed

2007-07-17T07:34:00.000-07:00

In a recent article in the Business Times Singapore (article removed) Teh Hooi Ling reports her study on using RoE ( return on equity) and PtB ( Price to Book) and the RoE/PtB ratio to select outperforming stocks on the Singapore Exchange. There was an update to the article on July 21(get it before it is archived).

By investing in only the top 10% of RoE/Ptb stocks she claims that from 1990 to 2006 you would have got a 41% annualized return excluding trasaction costs.

I am aware of the errors that can creep into such a study, I will not discuss them here, still I feel she is on to something good. The data on RoE and PTB in the article may be inaccurate. There are a lot of REITS and holding companies so not sure if ROE is relevant to them.

She also published a list of top ranked stocks. Let me analyze these here.

Jardine Strategic . Let me quote Neil McNamara from jardine who replied to my questions on this. "ROE is not a ratio that we would normally calculate for Jardin Strategic due to the significant property interests through its investment in Hongkong Land. However, based on the shareholders funds at 31.12.06, the ROE calculated using the underlying profit for the year is 6.9%. If the net profit is used, which includes the movement in valuesof investment properties, the ratio is 18.5%. The latter calculation will fluctuate greatly from year to year due to the movements in property values. The price to book, based on the net asset value per share at 31.12.06 of US$19.38 (calculated using the market values of the underlying investments) and a share price of US$13.80, is 0.71." . Thanks to Cougar3 who said .."The two Jardines are jointed at the hip and have significant cross-ownership interests in each other.
My guess is that ultimately Jardine Matheson will make a tender offer for the shares of Jardine Strategic they don't own (about 20%) . Of the two at current prices, Jardine Strategic is selling at a significant discount to NAV and imho is. by far, the more attractive
of the two for current purchase. And, if I am right about the possibility of a tender offer by Jardine Matheson for Jardine Strategic this would likely be at a price around NAV in order to be successful. Thus, buying Jardine Strategic might be an attractive way to ultimately own Jardine Matheson at a significant discount to it's current price.Both Jardines are well diversified into core industries with extensive interest in not only Singapore and Hong Kong but mainland China, and all of SE Asia. They, along with Cheung Kong might be considered the equivalent of GE in the US. Hard to find companies that have been in
business for 175 years like Jardine. Despite the big move both Jardine stocks has had over the past 5 years they remain attractively priced and "value" plays imho." A quick check at Shares Investement no 302 shows both companies Jardine strategic and Jardine Matheson have been profitable and paying dividends since record begins in 2002. Am placing a buy order for Jardine strategic.
Noel Gifts. .
New Wave. .
HengXin Tech. .
KSH Holdings. .
TexChem Pack. .
ContelCorp. ..
Transpac Industrial. ROE 27 , PTB 0.95. Investment Company. See SGX announcements. Messageboard. Annual report. According to the annual report the Company has no staff costs as its operations are fully managed by its Investment Manager.See annual report pg 33 note 7, very roughly put investment manager is paid 20% of money made after tax. Income statement not important. Balance sheet shows it has grown book value from 1.55 SGD yr end 2002 to present 4.04 (calculated reported bv, ex latest 0.54 div and previous $0.36 div) and paid nearly 1S$ +latest s$0.54 in dividends. That very approximately means a greater than 20% CAGR book value + dividend returns. Very illiquid. No mention in Shares investment in recent issues so cannot look it up. Did badly a decade ago. Illiquidity and memories of bad years during the asian financial crisis may mean that it may trade at a larger discount of 20% or more. May buy this if it falls more around a PTB of 0.8.
K1 Ventures. .
Nera Telecom. .
China Print Power. ROE 37, PTB 1.7, price 0.255 SGD,see messageboard,sgx. New IPO. According to Shares Investment issue 309 company has been profitable since reports begin from year end 12/2003. Div yield is around 5, p/e around 6, Long term d/e is around 22%. See recent report. Company is in a highly competitive business but I feel it is cheap and has limited downside due to dividend yield. Am placing an order. Update- Aug 14, am shareholder now. Read annual report, Change in auditor explained as due to people leaving old auditor. New auditors may have the same old people. Not significant.
GP Industries. .
China Paper. .
Adroit Innovat..
Plastoform. .
Sunray. PTB around 1 at S$ 0.22, ROE 8.29. According to shares investment no 310 this Obs. &Gyn. medical apparatus maker has been profitable since records begin from year end 2003. 2007 was bad year with revenue declining around 20% and profit declining 50%. No dividends in 2007. Paid 0.007 S$ a year ago,payout ratio then was around 20%. Shares Investment article has phrases like "disruption due to fire in Gatong Industrial park.","restruct in medical industry". Also placed new shares at S$0.46 to Kim Eng in 2006. See messageboard, announcements,report. .Maybe this is just a small company facing a temporary problem. Selling by large holders. Last time an insider bought was here
at S$0.29.Not sure about this one, will pass.
Jardine Matheson. .
NatSteel. .
PCA Technology. .
Jurong Tech Indus. At price 0.93.ptb 1.6, NAV S$.559, pe 5.8 yeild 5.4,d/e >1 See messageboard,report. High d/e will pass for now.
HongKong Land.p/b >1 .See report. Not enough discount to book , will wait for more discount to book.
Tuan Sing. at 0.35 sgd p/b 1.58 ,roe 22% p/sales 1.1, Long term D/E 0.71. See messageboard, announcements , According to Shares Investmnet isseu 210 There have been no dividends or growth in shareholders funds since 2002. Not to my liking.
Allco Commercial Reit. p/b 1.05 at price 1.11 SGD, yeild 4.4 %. See messageboard, sgx announcements, report. Nice Reit promising stable returns, but not interesting to me.
Fortune Reit. HK$6.25, yeild 5.48,p/b 0.73. See, outdated report, Sgx announcements, messageboard,website,factsheet. According to shares investment 307 has grown book value and paid dividends since 2004. Temasek holdings as shareholder gives some confidence to me. Need to investigate more.
Broadway Indus. price 0.81SGD, p/b 1.7,yield .75%,ROE 32, LT d/e 0.15. See messageboard, announcements .Strange quick buying and selling by large shareholders on the SGX announcements page. According to Shares Investment no 307 has grown sales and profits since records start from 2002. Its in highly competitive business of manufacturing small machined parts. Not convinced, would ask for more div yield..
China Printing.price 0.30, p/b 1.5, roe 28,yeild 3.4%, LTd/e 0.05, .See messageboard,SGX announcements. New listing profitable since records available -2005Worth more research.
Bright Orient. SGD 0.17 , p/b 1.1.4,yield 2.48%, p/e 12.9, ROE 9.39,Lt d/e 0. Apparel manufacturing and retail co .See messageboard, SGX announcements. Annual report. Margins low. Will wait and monitor more before investing.
AEM. ROE 18, P/B 1. see messageboard. Legal problems. Senior management, CEO under investigation by CPIB- sent on leave replaced by acting CEO.SGX announcements. Atlantis Investments increasing stake in open market. If you like special situations this is for you.
Valuetronics. SGD 0.26, PE 9, yield 3.4,ROE 33, NAV 0.123, P/b 2.1, Zero Long term debt. Electronics contract manufaturer.See messageboard, announcements, IPO prospectus. According to shares investments 310 has been profitable since records begin from 04, listed on SGX in 07 at 0.26. Looks good to me. Need to compare vs Electrotech.
Singapore Windsor. Price 0.30 SGD,NAV 0.35,p/e 6,p/b .86,yeild 6.18%,ROE 26. PCB related manufacturer ( why so many on this page?). See messageboards,announcements, annual report. According to Shares junction 304 profitable since records begin in 2003. Listed in 2006. Looks cheap.

Its here! DEM - Emerging Markets High-Yielding Equity Fund

2007-07-12T22:24:00.001-07:00

See this announcement. The corresponding index is here.

I have been waiting for this for a long time. Dividend weighted indices where stocks are present in the index in proportion to cash dividends paid appeal more to a value investor than a market cap weighted index where stocks are present simply because their market cap is high. Market cap is (no of shares) X (price per share) or what you would have to pay to buy all the shares in the company.

Anyway the numbers as mentioned in the links above are:

Dividend Yield	6.28
Price/Earnings	14.87
Estimated Price/Earnings	N/A
Price/Book	2.22
Price/Sales	0.68
Price/Cash Flow	5.57
5 year volatility	18%
10 year Index backtest	15%
vs 10 year MSCI EM	9.4%

India and Russia surprisingly have less than 1% representation each. China is represented indirectly via H shares listed in Hong Kong. The ETF expenses are a hefty 0.63%.
The underlying index has a compelling 6.47% gross yield however as they warn
"Gross Index Yield reflects yield on index constituents prior to individual country
withholding taxes and is not related to the distribution yield of the fund." The volatility is also high - not that a buy and hold for decades investor like me cares about volatility.

To summarize I would prefer this to EEM. I admit to a personal bias for fundamental indexing.

I do not have a position in this yet.

Personal portfolio

2007-07-11T20:40:00.000-07:00

Here is what I own and why.

Indian Mutual Funds

HDFC Equity - Not merely outperforming but crushing the indices for 10 years. Manager Prashant Jain has been around with the same fund team for a decade (Zurich then taken over by HDFC). He took over this fund a few years ago when its previous manager Chandresh Nigam left. Knowing that Prashant has an exceptional record with HDFC prudence I decided to retain this fund.
HDFC Prudence - Prashant Jain - manager since 1994. Outstanding record - see the link for yourself. Formerly the fund was a balanced fund 60% equity 40% debt, Now it is an "Equity Oriented fund"70% equity 30% debt. The recent increase in Equity allocation is to take advantage of Indian Tax laws that state - no taxes on equity oriented funds held for more than one year. I am no fan of mutual funds, these have sales loads of 2.5% and annual expenses of 2% but their returns have more than made up for that. I do not like balanced funds either, there is no reason why any long term investor should hold bonds in his portfolio. HDFC equity is preferable to HDFC prudence unless you have some expenditure planned in the coming years and want to limit your downside. I bought this fund a year or so ago as I wanted less downside due to foreseen personal expenses. Now that those expenses are paid for I intend to sell and move to a 100% equity portfolio. The best time to sell this however eludes me. I would wait for a dip in the markets to sell this and buy either HDFC equity ( a no load switch within the same fund house ) or Franklin Opportunities ( will have to pay load).

International ETF's

DFE - See the Index here. Small value stocks from Europe. Fits in nicely with my theme of owning small value stocks. I like the Wisdomtree dividend weighted Indices.
EWY - MSCI Korea was cheap compared to Singapore and Taiwan when I last looked. Was bought when there was tension with the neighbor to the north. I do not own EWY but the equivalent Lyxor MSCI Korea ETF trading on the Singapore Exchange.

International Stocks

Bright World Precision Machinery - Turned up on a Greenblatt style low P/E, high ROE , no long term debt screen. Bought on the Singapore Exchange. I usually sell such stocks when they cross a P/E of 20.
Second Chance Properties - Turned up on a high dividend yield screen. Bought on the Singapore Exchange. Need to review this when latest results come out.
Food Junction -- Turned up on a high dividend yield screen. Bought on the Singapore Exchange. Company faced a recent setback in china. Need to review this. See recent discussions here.
0878.hk -- Soundwill Holdings. Low P/Book stock. Thanks to "idoke" on the chucks_angels yahoo group for suggesting this one. Bought on the Hong Kong exchange.
0557.hk-- City e-Solutions. Low P/Book stock. Thanks to "deepmarginofsafety" on the chucks_angels yahoo group for suggesting this one. Bought on the Hong Kong exchange.
Brk-b - Berkshire Hathaway. Have discussed this in previous posts. This is where I park cash when I have no better ideas.

Recent Sells:

Sinwa - Greenblatt style pick. Bought on SGX. Reached exit point of 20 P/E.
STI - Streettracks Straits Times Index ETF. Like the MSCI Singapore index (EWS) but with many more stocks. Trades on the Singapore Exchange. Attempted sell when the STI hit a P/E of 20. Sell order failed, have to investigate.
2600.hk - Aluminum Corp. of China Ltd. (Chalco, ADR is ACH) . Was a low P/Book pick. Looks like I miscalculated P/Book. Sold as soon as I realized error. Will not ever trust yahoo finance for my data. Was lucky to make a profit.

What I do not own but recommend

My family has investments in assorted tax saving Indian mutual funds and some short term debt funds. Tax saving funds are the best way to make your tax saving investments. Short term debt funds are a good and liquid way to park excess cash you may need in the near future.
My suggested portfolios for Indian Investors are on the longtermequity yahoo group. These may differ from my personal portfolio.

Indian ADRs - losing their premium.

2007-06-05T00:21:00.000-07:00

Infy has lost its premium on the US Nasdaq exchange vs the Indian Bombay stock exchange.

See this page from Equitymaster.

DR Reddy(RDY), HDFC bank (HDB), ICICI (IBN), And Infosys(INFY) are some good stocks with an ADR premiun of less than 5%.

I will write more about these when I have the time. I do not own any of these directly, but may have indirect holdings via mutual fund.

My personal international portfolio

2007-05-31T20:43:00.002-07:00

I intend to track the part of the portfolio that marketocracy.com can track and make it public.
The purpose is to invite criticism and comments.
The dollar amounts are scaled a secret number - 10 times or more. I do not have the 1M to invest that marketocracy needs. The percentages of the holdings are approximately correct.
I have excluded my direct investments in India and Singapore that marketocracy can not track.

Here it is , click on the image for a bigger view...

You can preview the public page here.