2. Will the world go into a serious depression?
Thursday, December 31, 2020
Wisdom of the Crowd - New Issues
2. Will the world go into a serious depression?
WOTC - Sale of investment product by banks
Wisdom of the Crowd - 100% of the respondents said that the current practice adopted by the banks in selling investment products should be changed.
WOTC - Increase of 35% in Medishield Life premium
Wisdom of the Crowd: 88% of the respondents said that the increase of 35% in Medishield Life premium is not justified.
The Great Reset, as discussed in World Economic Forum
This video explains about the great reset which has been discussed in the world economic forum for several years. It is a new world order based upon central planning and digital currency.
The presenters speak about the great reset in a somewhat negative sense, pointing out to the risk of corruption, loss of privacy and government control.
I personally believe that the world economic order needs to be changed, central planning is the key and that corruption could be prevented with transparency.
Wednesday, December 30, 2020
My analysis of LMIRT (Lippo Mall)
I invested $80,000 in Lippo Mall. It has dropped $50,000 in value, or more than half of my invested sum. The current share price is $0.062.
Lippo Mall is having a rights issue to purchase a "flagship mall" in Jakarta. It is carrying out a rights issue at $0.06 to raise $180 million for the purchase of this mall. This has caused the share price to drop from $0.10 to $0.062 over the past few months.
Here are the details of the malls owned by LMIRT in Indonesia.
http://www.lmir-trust.com/
They own 30 malls with a portfolio value of $1,826 million and a net letable area of 913,958 sm. This works out to $185 per sf (compared to $2,000 psf in smaller malls in Singapore).
Furthermore, the share price for LMIRT is only 28% of asset value. A shareholder of LMIRT pays only $185 X 0.28 = $52 per sf of retail space in a mall in Indonesia.
In the chart below, the price to sale of LMIRT is 1.1. The average for the 4 other REITS is 11.67. It LMIRT has a price to sales ratio of 11.67, the price would be $0.65. On this metric, LMIRT is undervalued by 90%. Insane, right?
There could be several problems with LMIRT that account for its severe undervaluation. There is a risk that it may go bankrupt, if it does not earn enough to pay off its debt.
I think that this is not likely to happen. The net operating income (mainly from rental less expenses) is $100 million (trailing 12 months) compared to interest expense of $45 million. This was probably the worse case situation due to the lockdown caused by the pandemic. When the malls open in 2021, the net operating income should be higher than the current value.
Furthermore, I expect that the Lippo Group, which is the sponsor of LMIRT, will support this trust and ensure that it does not go bankrupt.
In view of the under valuation of this stock (as suggested by the price to sales ratio), I have decided to buy more stock to average down my cost and also to take up the rights issue.
I am not able to see any report from the stockbrokers. So, I have to do my own analysis.
Tan Kin Lian
Note - this is not financial advice. Please do you own analysis before you decide to invest in this stock.
Monday, December 28, 2020
North South Corridor
It cost $7.47 billion SGD to build the North South Corridor (21.5 km) in Singapore. This works out to $347 million per km.
The Boring Company (under Elon Musk) is able to build a tunnel for one lane of vehicle at a cost of $10 million USD per mile. This works out to $21 million SGD per km.
The North South corridor probably has 3 lines of traffic on each side. This is the equivalent to four Boring tunnels.
The cost of 6 tunnels of 21.5 km using the approach of the Boring Company would be $21.5 X 6 X $21 = $2.7 billion SGD. This is 36% of the $7.47 billion that is spent.
It will also take a shorter time to build the four tunnels using the Boring Company approach
Here are some information of the tunnels built by The Boring Company
https://en.wikipedia.org/wiki/The_Boring_Company
I know that there are big differences between the two types of tunnels. The comparison may not be reliable. We probably have to consider other costs and technical aspects.
But, as a rule of thumb, the approach adopted by The Boring Company seem to reduce the cost by 64%.
The North South corridor probably has 3 lines of traffic on each side. This is the equivalent to four Boring tunnels.
The cost of 6 tunnels of 21.5 km using the approach of the Boring Company would be $21.5 X 6 X $21 = $2.7 billion SGD. This is 36% of the $7.47 billion that is spent.
It will also take a shorter time to build the four tunnels using the Boring Company approach
Here are some information of the tunnels built by The Boring Company
https://en.wikipedia.org/wiki/The_Boring_Company
I know that there are big differences between the two types of tunnels. The comparison may not be reliable. We probably have to consider other costs and technical aspects.
But, as a rule of thumb, the approach adopted by The Boring Company seem to reduce the cost by 64%.
Sunday, December 27, 2020
People use their common sense
My friend was disappointed. He said that people are now crowding the malls. Why are they acting irresponsibly? Are they not afraid of spreading the virus?
I told him - the people use their common sense. They are not stupid. They can see that the virus is mild. If they think that the virus is dangerous, they will hide at home.
The ministers (I shall not call them insane) continue to scare the people using the media, but many of the people are tired of being scared.
Some will continue to be scared, but many others now think that the restrictions (e.g. maximum of 8 in a gathering) are excessive and unnecessary.
Saturday, December 26, 2020
Blue tooth tracing in Beijing
My friend told me that Beijing has introduced blue tooth tracing (just like our Trace Together app).
It is well used.
Beijing allows free movement of people, without any restriction.
His previous office held a function with 700 people. There was no limit on the number.
If there is any infection, it would be detected by the Blue Tooth tracing.
He was quite surprised that Singapore is adopting the following measures:
* Safe Entry by QR
* Trace together
* Limit to 8 people per gathering.
He asked - why not just rely on the Trace Together, which has been proven to be the most effective way of contract tracing, and leave out the Safe Entry and crowd control?
As the community spread has been nil for several weeks, why is Singapore still carrying out many layers of precautions?
I told him that I will send his question to the covid ministers (I shall not call them insane minsters).
Sell your stock at an over valued price
I made a profit of over $400,000 by investing in Tesla and Nano Dimension. In both cases, they were valued on growth and future prospects. Their current profit do not justify the prices that I bought them.
At each point of time, I decided on have an idea of the price range that I am happy to keep the stock. If it falls towards the lower end, I will buy more stock. If it goes to the higher end, I will sell them.
I form my opinion of the price range based on the YouTube videos that are put forward by the investment bloggers. They made a research of the stock and the business model. They look at the technical indicators of the stock price. They gave their reasons.
I listen to a few bloggers. I find their research, explanation and technical analysis to be very useful. However, I may or may not agree with their opinion. I form my own opinion after listening to a few views.
This approach worked well for me. I made a good profit using this approach during the past year.
I now consider the price of $660 USD for Tesla (TSLA) to be too high. I have sold off all my stock. I may buy Tesla at $550. I may talk a short position on Tesla (using CFD) if it goes to $700.
I consider a good price range for Nano Dimension (NNDM) to be $9 to $10.20 USD. I will buy the stock at $9 and sell it at $10.20.
I review my price range daily, based on the market movement and the videos put up by the bloggers. They tell me what is happening. I find the information to be useful to form my own views.
Don't catch a falling knife
I held 200 stock of Tesla at $600 USD (pre-split) in early March 2020. Due to the pandemic and "shelter in place", Tesla stock dropped to $350. I saw a loss of $50,000.
I did not cut loss. I held on to the stock. Instead, I bought another 300 stock (average cost $400) while the price kept dropping. My friend advised - Don't catch a falling knife. (He is smart, isn't he?) Tesla stock turned unexpectedly. Later I learned that their Shanghai factory opened earlier than expected, and it produced many cars. Tesla stock short up to $800 by May. I sold off all the stock at an average price of $650 and made a gain of over $100,000. If I had followed my friend's advice to cut loss, I would have suffered a loss of $40,000 (or thereabouts). What is the lesson? * Don't listen to platitudes (don't catch a falling knife) * Understand the stock that you invest in, so that you can be confident under stress * By ready to hold a stock that is oversold in a panic. It will get over. * Never invest with borrowed money * Wait for luck to be on your side. Agree or not? https://fisca.sg/ArticleDisplay.aspx?ID=808Lost $1 million in Singapore stocks
My friend said that he lost $1 million in Singapore stocks over the years. But he said that he had received this amount in dividends over the past years. He must have invested in these stocks for a long time.
He probably did not invest in the index fund (STI ETF). If he did, he probably would have earned a modest return, depending on the period of his investment.
See the chart below showing the chart of the index over 19 years and the annual return (excluding dividends). The average dividend yield is probably around 3% each year.
Within the Straits Times index of 30 shares, the financial sector did well, but the industrial sector did poorly.
If my friend had invested heavily in the industrial and transportation sector (e.g. Keppel, Sembawang, Singapore Airlines, Singapore Press, Neptune Orient Lines and Singapore Telecoms), he would have done poorly.
If he had bought the S chips (i.e. the China stocks listed in Singapore) or in some questionable small cap stocks, he would have done very badly.
I did not ask my friend what he had invested in and over which period of time. I suspect that his experience is typical of the many Singapore investors, but they probably form a minority.
Poor performance of Singapore stock market
Several investors expressed disappointment at the poor performance of the Singapore market, compared to overseas stock markets.
I found the following table in this link.
Over the past 10 years, the Singapore stock market was the worse performing among the 23 markets surveyed by the website. I was not able to find the names of the other markets, but they are probably from the developed markets.
What is the reason for the poor performance of the Singapore blue chip stocks?
I hazard a guess. The poor performance probably reflect that Singapore business cost is too high and that reflects in lower profits for businesses that have to compete globally. We have become uncompetitive for the past 10 years, maybe longer.
I also find the business practices in Singapore to be inefficient and wasteful. We spend a lot of money doing things that appear to me to be wasteful and unnecessary. Most of these are compliance cost imposed by the government.
It is important for Singapore companies to undergo a "detoxification program" to get rid of wasteful and costly activities.
Thursday, December 24, 2020
Closing the border to travelers from the United Kingdom
Dr. Anthony Fauci is the top public health official in America. He was asked in an interview - should America close the border to travelers from the United Kingdom?
Dr. Fauci replied in a soft spoken voice - At this juncture, closing the border would be over reach. (TKL uses the world "over react").
He said that they should monitor the situation and decide later, based on a better knowledge of the mutated virus, whether it was necessary to close the border.
In making this statement, Dr. Fauci took into account the economic impact of closing the border to these travelers.
Basically, Dr. Fauci said that we do not know at this time if it was necessary to close the border. We should monitor the situation before taking any hasty action.
I agree with the approach recommended by Dr. Fauci. We should not over react to any risk. We do not know if it will become serious or not. We cannot, at this time, assume that it will be very serious and close the border.
My crystal ball asked me to send the video recording of the interview to our ministers (he did not want to call them 'insane', out of respect to them).
Do you agree?
Wednesday, December 23, 2020
Unexpected profit from Nano Dimension
Here is my unexpected profit from Nano Dimension in two months.
https://fisca.sg/ArticleDisplay.aspx?ID=804
Wisdom of the Crowd - New Issues
1. Is the government hasty in implementing phase 3 of the circuit breaker
2. Are you worried about the new waves of covid infection?Vote in
https://tklcloud.com/Crowd2/vote.aspx
Prioritizing the economy over public health
Earlier, Minister Wong said that phase 3 of the circuit breaker will start after 70% of the population has downloaded the Trace Together app or collected the token.
Recently, the prime minister announced the start of phase 3 towards the end of the year. Someone pointed out that only 50% of the population has Trace Together. He asked - is the government prioritizing the economy over public health?
I give my views.
Tuesday, December 22, 2020
Shameful incident!
Singapore is mentioned specifically by this technical expert from the World Health Organization about our contact tracing effort.
I am not proud of this mention. In fact, I am ashamed.
Why?
This WHO expert said what is obvious. She said that the data from Singapore showed that the asymptomatic cases do not spread the infection.
Hey!
Why did we have to rely on the WHO expect to make this observation? Why can't our own infectious diseases experts and scientists say it?
Are we so scared to give our professional opinions?
This is insane! And shameful!
A more effective way to stop the covid infection
We should stop the useless safe entry recording and divert the resources to a more useful, more effective strategy to deal with the covid infection.
Here are my views.
Westpac - Australian bank
Someone asked me - is Westpac (an Australian bank) a good investment?
I made an analysis here.
Creating sufficient jobs for the people
Many developed countries face the challenge of generating sufficient jobs for their population. A high proportion of the people are unemployed and under-employed.
The young people, who are the first time job seekers, find it difficult to get a job in a sluggish economy. There is the fear that automation will destroy many of the existing jobs.
The above problems have been evident for many years. The pandemic of 2020 made the matter much worse.
Singapore is now facing the above challenges. It will be very tough for the people, for the young and for the retrenched workers.
What can be done to ensure that there are sufficient jobs for the people?
I create this video to share my views. I hope that you will spend 30 minutes to watch the videos and tell me - do you agree with the suggestions?
Zoom - is it a buy or sell at the current price?
Here are my views about Zoom stock as an investment. It has dropped 30% in two months since the likely approval of the covid vaccine.
At what price will I buy this stock?
Sunday, December 20, 2020
Simplify CPF system
I suggest that the CPF system should be streamlined and simplified as follows:
a) The rate of CPF contribution should be uniform for all workers, and should not vary according to age. For example, it should be 20% of wages for workers and employers
b) Contribution for workers above age 55 should be voluntary.
The current system of CPF contribution is complicated and difficult for employers and workers to plan.
We should return to a uniform contribution rate that applied when the CPF system was first started.
Agree or not?
Increase of 35% in Medishield premium
Wisdom of the Crowd: 70% of the respondents find the increase of 35% in Medishield premium to be unjustified. 30% do not mind the increase.
Transition of power in US
Wisdom of the Crowd: 88% of the respondents said that president elect Joe Biden had handled the transition well.
Wisdom of the Crowd - New Issues
2. Will the vaccine be safe?
3. Will you take the vaccine early?
Vote in
https://tklcloud.com/Crowd2/vote.aspx
Saturday, December 19, 2020
How to use technical analysis
In this article, I explain how I use technical analysis combined with a fundamental approach to make stock investments. It has been profitable for me.
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