Saturday, January 02, 2021

Excellent technical support from Dell, Penang

 My Dell All in One desktop computer had a technical issue. I keep getting a sharp sound every minute.

I called Dell Technical support. They have an excellent website. After I logged into the website, it was able to recognize my computer. I was soon able to connect to a technical person. He spent about half an hour to update my drivers. He think that the sound was caused by a corrupted driver. The problem was fixed. The technical support is located in Penang. The support personnel was working on a third shift during the weekend. I find the support to be excellent. I wish that our young people in Singapore could provide this kind of support. I guess that our problem is the high cost of labor in Singapore.

Surely this kind of job is better than delivery food or driving a private hire car?

Compare current price with target price

 The table belows compare the current price (1-1-2021) of the stocks in my watch list with the average of the 1 year price target set by analysts.

We have to look at the 1 year target with caution. In most cases, the analyst put up their target a few months ago and did not update the target based on information that is available subsequently. These target are outdated for stocks that have volatile prices.
Nevertheless, I find the comparison to be useful as an indication of the value of the stock.
Some of the hot stocks have significantly grown above the target price of the analysts. Some of the poor performing stocks have fallen significantly below the target prices.
I have computed the ratio of the current price to the target price. It suggest the appreciation or depreciation that may occur when the stock prices move to the target.
I am now holding several stocks that are considerably below the target prices. I expect (or rather hope) that some of these stocks will move towards the target price in a year or two.
Where the current price is considerably higher than the target price, I am likely to reduce my exposure or sell the stocks entirely.

Take risk and make progress

Why did Christopher Columbus sail west?

He wanted to find a new route to China and India. He knew that the world is round and he was confident that he could reach the destination using a new route. That was how he discovered America.

Was it risky for Columbus? Sure it was. He was exploring into the unknown. He did not know what lies ahead. However, he was confident about his ability to deal with the unexpected. He was willing to take the risk for the reward.

What about Singapore's approach of dealing with the covid pandemic?

Transition of Joe Biden

 Wisdom of the Crowd: 88% of the respondents said that president elect Joe Biden had handled the transition well, in spite of the lack of cooperation from Donald Trump's administration.

4 hour workday

 Wisdom of the Crowd: 84% of the respondents support the concept of a 4 hour work day.

Wisdom of the Crowd - New Issues

1. Do you welcome the cancellation of the High Speed Rail between SG and KL?
2. Should Singapore and Malaysia improve the clearance at the checkpoints.

Show respect when giving comments

If someone post a view and gives his reason, I will read and understand his view before I give my comment.

If I disagree, I will give my view and the reasons for my view. I will still show respect for the view posted by the author.

I will not act in an arrogant manner, namely to presume that I am right and the author is wrong. I recognize that he (or she) is entitled to his view and must be respected.

If I am not clear about the view that is posted, I will avoid giving a comment. I may ask for clarification. I will not misinterpret the view and give my comment based on the wrong implementation.

I hope that this "code of conduct" can be observed by everyone posting views in social media.

Cancellation of High Speed Rail between Singapore and KL

I support the cancellation of the High Speed Rail (HSR) between Singapore and Kuala Lumpur.

The project was poor conceived at the start. It was difficult to create a joint venture between two countries with different views of how the project should be structured and financed.

This reminded me of the closure of Malaysia Singapore Airlines (MSA) in September 1972.

An important benefit of the HSR was the joint immigration clearance. A traveler can be cleared for both countries at embarkation on either end.

Why can't this joint clearance be implemented at the existing land crossings? There is no reason to have separate clearance which adds to the time and hassle of traveling between the two countries.

The need for a smooth system of clearance was obvious for more than a decades. It is insane to reply on the HSR to implement it.

A more sensible approach was to implement joint clearance at the land crossings independent of the HSR. If this was done, we would have joint clearance many years ago. It would ease the pain to travelers.

I hope that both countries will now implement the joint clearance, especially as there is a low traffic during the pandemic travel restrictions.

I hope that our political leaders take the sensible decision and act now.

Thursday, December 31, 2020

Wisdom of the Crowd - New Issues

1. Will there be a serious stock market crash in 2021?
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.

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

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.

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