Ocean Sky International

For a value guy what is the difference between 1.2X vs 1.3X, or 0.5X vs 0.6X intrinsic? Intrinsic value cannot tell us good indication of when to buy/sell though it is the basis. I'm not saying that we should time and trade, I am saying that we spread out trades so that our execution can be much better. Idea & execution comes hand in hand.

Mr Market never demand that you do a binary yes or no. Maybe is an option

(16-09-2013, 02:03 PM)specuvestor Wrote: For a value guy what is the difference between 1.2X vs 1.3X, or 0.5X vs 0.6X intrinsic? Intrinsic value cannot tell us good indication of when to buy/sell though it is the basis. I'm not saying that we should time and trade, I am saying that we spread out trades so that our execution can be much better. Idea & execution comes hand in hand.

Mr Market never demand that you do a binary yes or no. Maybe is an option

Yea, I agree that it's ok for a value guy to hold at 1.2, 1.3x intrinsic value. However, we are talking about more than 2x the intrinsic value, no?

Why should one not sell at 1.2X, 1.3X intrinsic but wait till it was above 2X? My point is one could start selling 10% each at 1.2, 1.4, 1.6X etc at a staggering manner rather than just all at a certain level. Even at most painful times, selling 1/3 or half helps a lot in execution and psychology.

Valuation and execution are separate things. We know a company is underpriced or overpriced, but when and how we execute it is different.

(15-09-2013, 04:14 PM)oys-ter Wrote: In future, if there is a similar situation and you feel that there is potential for RTO, i suggest you can sell half and keep the rest for possible price appreciation.

(14-09-2013, 10:22 AM)EarnestLearner Wrote: Hi all,

I am trying to understand my "mistake" with this trade but cannot figure out the rationale. Hopefully fellow buddies can help to point out what went wrong.

I bought at 18 cents in July, sold before they go 13 cents XD in early Sep for 32 cents.

My thoughts for selling are:
1. NAV around 25 cents, after 13 cents dividend, not much meat left. I don't want to end up with an almost empty shell like what I had with Lion Asiapac after their special dividend.
2. Up 80% from my purchase price, and within 2 - 3 months. Obviously, I got lucky. So I can't resist the temptation to take profit.

However, now that after XD, the price today is 32.5 cents! So it seems that I "lost" 13 cents as I sold before dividend go XD.

What did I do wrong huh?

What would you have done in my shoes?

Purpose is not cry over spilled milk but to learn from the experience. Appreciate if fellow buddies can enlighten! Thanks

An investor or trader should normally have an exit plan ready when he/she took a position. The questions should be (1) Did you already had a robust exit plan when you took your position? (2) If yes, have you followed your exit plan?

If the answer is 'No' to either question, i humbly suggest that is your mistake.

If the answer is 'Yes' to both questions - i humbly suggest you might want to consider the following: Whether you are buying or selling, do put yourself into the shoes of the person who is doing the trade with you. If the other party is the seller, he is not going to sell you an undervalued stock, so who is correct? Similarly, if the other party is a buyer, he is not going to buy an overvalued stock, so have you clarified with why the other party is willing to buy from you? Asking these hard questions and seeking their answers regularly in a rational and informed manner, will be able to add a qualitative dimension to our decision making process, to supplement the quantitative nature part of it.

(14-09-2013, 10:22 AM)EarnestLearner Wrote: I am trying to understand my "mistake" with this trade...

Many investors equate losing money (or in your case, not maximizing profits) as a "mistake". To paraphrase Graham, you're neither right nor wrong because the market agrees with you. You’re right because your facts are right and your reasoning is right.

Let's say you can make a bet on the roll of a die. If it rolls '6', you lose all your money. Otherwise, you double. You rolled the die, and indeed, it rolled a '6'. Was the decision to play a "mistake"?

If there's indeed a "mistake", it should be discovered in the reasoning, not in the market price. And thus, let us turn to your reasoning:

(14-09-2013, 10:22 AM)EarnestLearner Wrote: My thoughts for selling are:
1. NAV around 25 cents, after 13 cents dividend, not much meat left. I don't want to end up with an almost empty shell like what I had with Lion Asiapac after their special dividend.
2. Up 80% from my purchase price, and within 2 - 3 months. Obviously, I got lucky. So I can't resist the temptation to take profit.

IMHO, (1) is perfectly sound. As for (2), my humble suggestion is that the selling decision should always be independent of your purchase price.

PROPOSED ACQUISITION OF APPROXIMATELY 45.15% OF THE TOTAL ENLARGED SHARE CAPITAL OF OCEAN SKY INTERNATIONAL LIMITED


PROPOSED RESTRUCTURING OF MARINE SUPPLY BASE BUSINESS INTO OCEAN SKY INTERNATIONAL LIMITED


RESTRUCTURING OF MANAGEMENT TEAM

• Appointment of Mr Lee Kon Meng (Peter) as Chief Operating Officer of Ezion
Holdings Limited
• Captain Larry Glenn Johnson will remain as Executive Director of Ezion
Holdings Limited while taking up position as the new Chief Executive Officer
cum Executive Director of Ocean Sky International Limited

http://infopub.sgx.com/FileOpen/Ezion_Me...eID=257948 [Media Release]

(Not Vested)

It looks like Ezion, YHM and Ocean SKy is going to become an Oil and Gas behemoth soon.

This stock looks so overvalued. If Ezion is so bullish on the business why they are buying the stock at 70% discount to NAV + taking options at such a low price. I wonder why market is so excited about Ezion deal

(01-10-2013, 06:49 PM)buddy Wrote: This stock looks so overvalued. If Ezion is so bullish on the business why they are buying the stock at 70% discount to NAV + taking options at such a low price. I wonder why market is so excited about Ezion deal

I did look at the financial statements of Ocean Sky International. I believe the acquiring of Ocean Sky International is more beneficial to Ezion shareholders than Ocean Sky shareholders. However, I seriously don't know how Ezion is going to find the money to acquire Ocean Sky especially that it's debt is pretty high now. It appears that Ezion is going to use shares again to acquire Ocean Sky and that would possibly dilute the shareholdings of Ezion.

(01-10-2013, 06:49 PM)buddy Wrote: This stock looks so overvalued. If Ezion is so bullish on the business why they are buying the stock at 70% discount to NAV + taking options at such a low price. I wonder why market is so excited about Ezion deal

Perhaps market is excited by the following public information:
1) PE of 10x
2) Dividend yield of 32%!
3) Dividend growth of 82%!
4) Takeover target

Looks overvalued to me too after running through the financials, announcements (10c takeover price) and the earlier post by "EarnestLearner". This reminds me not to rely solely on price parameters.