Singapore Exchange (SGX)

[gautam]

My sentiments exactly.
Reits can call for rights but i dun remember sgx doing that. Thats a big diff.

[Temperament]

Ya lol!,
Most Blue Chips,
Sooner or later will revert to it's mean historical price and then some. Though people like to say history doesn't repeat itself exactly. Or past event is not guaranteed to repeat itself. Does it matter if price wise gives you MOS value buy? But that's my style only.

[Temperament]

My sentiments exactly.
Reits can call for rights but i dun remember sgx doing that. Thats a big diff.

Ha! Ha!

For me, any company that call for rights issue is an opportunity to buy or to sell or to do nothing. Aka (not willing to commit more money yet unwilling to sell if have mother shares). In this case, i will sell the rights only if renounceable. If not, i seem to lose out lol after the rights issued.

Most of the times, me treat rights issue as a "suspect" to investigate further. Sometimes, you can make some money when the Market is "playing" with the rights issue. Of course you will be taking the risk in case the Market is right and is not trying to fool the public.

[Nick]

Hmm..put it another way. If u own a share which costed u $1 a decade ago which pays u a yield of 4c, wldn't u be delighted to own it if it has gone up to $10 today and pays a similar yield % which amounts to 40c today?
If not, wat r ur thoughts?

I would just use 'yield' based on current market valuation and compare it with other prospective investment yields to decide if it remains to be the best value there is available.

Original Investment: $1.00
Dividend: $0.04
Yield: 4%

Current Investment: $10.00
Dividend: $0.40
Current Yield: 4%
Yield on Cost: 40%

If we keep using yield on cost as a yardstick, few (if any) investment opportunity will surpass it. But what you paid for is history. What matters is what you can get today. If there is a similar Company (maybe HKEX) going for 5% yield, one might say using yield on cost, the current investment is better ie why sell something yielding 40% on cost for a 5% yielding instrument. But the reality is much different:

New Investment: $10
Yield: 5%
Dividend: $0.50

You actually get more cash-flow switching. This is very trivial example and investing is generally far more complicated - no 2 investments is alike !

With that being said, I do agree with the idea of compounding returns from growing dividends. It is difficult to lose money from such a strategy IF you can find a company that is able to grow its profits consistently and purchasing its equity at a reasonable valuation.

If you don't mind sharing, do you think SGX can continue to grow its profits at reasonable levels in the current decade ?

(Not Vested)

[gautam]

Hi nick, i agree wif ur point tt if we use yield now at cost price as yardstick, few other investments will surpass it. Taking the case of sgx, its past 10yr cagr is ard 16-18%. I am not vested in this. But if i were, taking my focused investm style, i think i will sit tight for the next 10yrs as the likelihood of this performance repeating is high.
Imo, investment can be as complex in analogy to a patient receiving medicine for flu. He could question that panadol prescribed might not be good for his liver or that flu tablet might cause too much drowsiness. Each medine has at least 5-10 side effects. The alternative less stressful way is to just take the medicine and rest and get well.
Haha. To me, i don't know much about accounting and i only bother about protecting and growing my money. I am not saying that knowing a lot is bad. But to me, i look at the company, its core parameters and ask myself whether i think this company which has been ard for the past 20-30yrs, will it be around for the next decade or so.

[gautam]

The stock market is a very perilous place and has its ups and downs out of our control. Life too has its ups n downs. If both downs were to coincide, i think i would be one very stressful man. Thats y i took this approach of buying into undervalued co with rising div with an unblemished div paying history.

[Temperament]

The stock market is a very perilous place and has its ups and downs out of our control. Life too has its ups n downs. If both downs were to coincide, i think i would be one very stressful man. Thats y i took this approach of buying into undervalued co with rising div with an unblemished div paying history.

And may i ask again, your rising dividend of a stock is based on YOC, or current yield or something else? i am not sure.

[gautam]

I din ask u a few posts ago. Could you clarify what yoc stands for? I will then attempt to address ur question. Thanks.

[Temperament]

I din ask u a few posts ago. Could you clarify what yoc stands for? I will then attempt to address ur question. Thanks.

O.K.
YOC is short cut for yield on cost.

[gautam]

Ok. If u notice those companies with a sustainable economic moat n which have been ard for the past 20-30yrs, the average yield of one such company is often ard a certain %. Some 2-3%, some 3-4%. Sure, good yrs it goes up a bit n vice cersa for poor yrs. Personally i am keen on a 3-5%yield at time of entry. But tt alone is not not enough. More impt to u is tt no skipped payments n ability to raise div over time cos those characteristics say a K of words on the company.