Any Experience going through a Bubble and Recession?

[BfGf Money Blog]

As for my father, he mentioned that during 1997 and 1998, butchers were chopping up pork meat while staring at Teletext. And as I was still too young then, I remembered the whole of SIngapore was staring at Teletext and making phone calls to their brokers.

I think that was in 1993/1994 bull run and not 1997/1998. I participated in that bubble too..

Oops! Did I get the date wrong?

HitandRun - any lessons learnt from that period of mania?
or any other observations?

[BfGf Money Blog]

It is a bubble when everyone thinks they are god's gift to the market...hahaha...

In a bubble, there will be goldfingers with Midas' touch:-

Msian 90s boom - Daim boys - Renong/TRI
Dotcom bubble - Richard Li/Steve Case, Companies like i-One-Net, Horizon, CMGI, PCCW, Hikari Shushin, etc

In Japan superbubbles, people paying to eat gold or Sh** (fresh). Land under Imperial Palace at mkt value can buy whole of California
In TW bubble, university students quit school to play stocks. Same too for NUS students during 90s bull run.
In HK 90s property bubble, people paid $$$ to queue numbers for condos. And triads also join in.
In 2007 PRC stock bubble, banner said "Why rob, just speculate in shares!"

I love bubbles.

Oh man,
This is so funny yet scary at the same time. Thanks for your info, it will be going up on the blog.

[BfGf Money Blog]

I am looking to write an article on my blog about investors and their experience going through recessions.

Would like to know what are the noticeable warning signs of a bubble.

I'm a bit puzzled what your article is abt. Is it abt recessions or is it abt bubbles?

Or is it abt bubbles pricking leading to a recession?

Bubbles do not necessarily lead to a recession and a recession need not be caused by bubbles.

Hi AQ,

Sorry I forgot bubbles don't always lead to recessions.

I am actually talking about bubbles FOLLOWED by recession.

Like - 1997/1998, dotcom bubble, 2007-2008.

[ghchua]

Status of these "excellent growth prospects and great value" China companies currently:

AsiaPharm Group Limited Market Cap USD 187mn - Renamed Luye, delisted from SGX and relist on HKSE. Shareholders made money on this one if they hold all the way.
Beauty China Holdings Limited [BCH SP] Market Cap USD 200mn - Delisted. No news since then. Zero value.
Celestial NutriFoods Limited [CENU SP] Market Cap USD 619mn - Suspended for a few years already. Zero value.
China Enersave Limited [CHEN SP] Market Cap USD 48mn - RTO and becomes Charisma Energy, still got some value but massively diluted by rights issue.
China Essence Group Limited [CESS SP] Market Cap USD 151mn - Still listed but almost zero value now.
China Fishery Group Limited [CFG SP] Market Cap USD 700mn - Still listed but massively diluted by a few rights issue since then.
China Hongxing Sports Limited [CHHS SP] Market Cap USD 423mn - Suspended. Almost zero value now.
China Milk Products Group [CMILK SP] Market Cap USD 582mn - Suspended. Almost zero value now.
China Petrotech Holdings Market Cap USD 90mn - Renamed as Universal Resources as business changed from IT to resource company. Last traded 3.4cts.
China Sky Chemical Fibre Company Limited Market Cap USD 594mn - Still suspended but got chance to resume trading.
Cosco Corporation Singapore Limited [ COS SP] Market Cap USD 2684mn - Last traded around 47.5cts.
China Sun Bio-chem Technology [CSBT SP] - Market Cap USD 372mn - Suspended. Almost zero value now.
E-Pure International [EPUR SP] Market Cap USD 200mn - Re-named Sound Global. Listed on HKSE too and made HKSE as primary listing and SGX as secondary listing. Delisted from SGX but still listed on HKSE. Shareholders made money on this one if they hold all the way.
Fibrechem Technologies Limited [FBCM SP] Market Cap USD 419mn - Suspended. Almost zero value now.
Full Apex Holdings Limited [FAPX SP] Market Cap USD 157mn - Last traded around 5cts.
Hengxin Technology Limited [HENG SP] Market Cap USD 104mn - Listed on HKSE also and SGX becomes secondary listing. Wanted to delist form SGX but not successful. Last traded 22.5cts. Shareholders might only breakeven on this one if they hold all the way.
Jiutian Chemical Group Limited [JIUC SP] Market Cap USD 118mn - Last traded 5cts, but bonus issue along the way.
Landwind Medical Holdings [LWMH] Market Cap USD 84mn - Delisted. Shareholders made money on this one if they hold all the way as the delisting offer is attractive.
Luzhou Biochem [LUBC SP] Market Cap USD 182mn - Last traded at around 2cts.
Sunshine Holdings [SUNS SP] Market Cap USD 138mn - Injected new business and re-named as China Mining. Last traded 7.7cts.
Synear Food Holdings Limited [SYNF SP] Market Cap USD 977mn - Delisted but exit offer is unattractive.
United Envirotech Limited [UENV SP] Market Cap USD 56mn - General offer currently at $1.65 per share. Shareholders made money on this one if they hold all the way.
Want Want Holdings Limited [WANT SP] Market Cap USD 2371mn - Delisted from SGX but relist on HKSE. Shareholders made money on this one if they hold all the way.

[Musicwhiz]

Hi MusicWhiz,

I know you should remain subjective and come to your own conclusion with regards to valuation. But how to you tune out from all these noise? Surely, you will be affected or slightly influenced by it somehow.

Hi there,

You can tune out the noise by doing your own research and understanding the Company well. Look at the moat and competitive advantages of the Company and their historical returns. Look for consistency through cycles and pay attention to margins, FCF levels and ROE/ROIC.

What you need to remember is margin of safety - you should buy what the crowd shuns, not what the brokers are promoting. I would avoid anything which looks too expensive to be true, and with someone touting for it to be even more expensive. Doesn't that sound just like The Greater Fool Theory? Buy steady companies which are not affected by hype and "noise", and which are trading at reasonable valuations.

After looking through many companies and reading many broker reports, you will soon realize that some analysts are just trying to smoke their way through - there's no basis for their TP or valuations.

And oh yes, please do not quote my nickname, thanks. I don't mind being anonymous.

Regards.

[BfGf Money Blog]

Hi MusicWhiz,

I know you should remain subjective and come to your own conclusion with regards to valuation. But how to you tune out from all these noise? Surely, you will be affected or slightly influenced by it somehow.

Hi there,

You can tune out the noise by doing your own research and understanding the Company well. Look at the moat and competitive advantages of the Company and their historical returns. Look for consistency through cycles and pay attention to margins, FCF levels and ROE/ROIC.

What you need to remember is margin of safety - you should buy what the crowd shuns, not what the brokers are promoting. I would avoid anything which looks too expensive to be true, and with someone touting for it to be even more expensive. Doesn't that sound just like The Greater Fool Theory? Buy steady companies which are not affected by hype and "noise", and which are trading at reasonable valuations.

After looking through many companies and reading many broker reports, you will soon realize that some analysts are just trying to smoke their way through - there's no basis for their TP or valuations.

And oh yes, please do not quote my nickname, thanks. I don't mind being anonymous.

Regards.

Yup I won't quote your name.

That's good advice. BTW, I follow your blog! LOL

Thanks for guiding a noob like me! I will remember your advice!

[edragon]

Status of these "excellent growth prospects and great value" China companies currently:

AsiaPharm Group Limited Market Cap USD 187mn - Renamed Luye, delisted from SGX and relist on HKSE. Shareholders made money on this one if they hold all the way.
Beauty China Holdings Limited [BCH SP] Market Cap USD 200mn - Delisted. No news since then. Zero value.
Celestial NutriFoods Limited [CENU SP] Market Cap USD 619mn - Suspended for a few years already. Zero value.
China Enersave Limited [CHEN SP] Market Cap USD 48mn - RTO and becomes Charisma Energy, still got some value but massively diluted by rights issue.
China Essence Group Limited [CESS SP] Market Cap USD 151mn - Still listed but almost zero value now.
China Fishery Group Limited [CFG SP] Market Cap USD 700mn - Still listed but massively diluted by a few rights issue since then.
China Hongxing Sports Limited [CHHS SP] Market Cap USD 423mn - Suspended. Almost zero value now.
China Milk Products Group [CMILK SP] Market Cap USD 582mn - Suspended. Almost zero value now.
China Petrotech Holdings Market Cap USD 90mn - Renamed as Universal Resources as business changed from IT to resource company. Last traded 3.4cts.
China Sky Chemical Fibre Company Limited Market Cap USD 594mn - Still suspended but got chance to resume trading.
Cosco Corporation Singapore Limited [ COS SP] Market Cap USD 2684mn - Last traded around 47.5cts.
China Sun Bio-chem Technology [CSBT SP] - Market Cap USD 372mn - Suspended. Almost zero value now.
E-Pure International [EPUR SP] Market Cap USD 200mn - Re-named Sound Global. Listed on HKSE too and made HKSE as primary listing and SGX as secondary listing. Delisted from SGX but still listed on HKSE. Shareholders made money on this one if they hold all the way.
Fibrechem Technologies Limited [FBCM SP] Market Cap USD 419mn - Suspended. Almost zero value now.
Full Apex Holdings Limited [FAPX SP] Market Cap USD 157mn - Last traded around 5cts.
Hengxin Technology Limited [HENG SP] Market Cap USD 104mn - Listed on HKSE also and SGX becomes secondary listing. Wanted to delist form SGX but not successful. Last traded 22.5cts. Shareholders might only breakeven on this one if they hold all the way.
Jiutian Chemical Group Limited [JIUC SP] Market Cap USD 118mn - Last traded 5cts, but bonus issue along the way.
Landwind Medical Holdings [LWMH] Market Cap USD 84mn - Delisted. Shareholders made money on this one if they hold all the way as the delisting offer is attractive.
Luzhou Biochem [LUBC SP] Market Cap USD 182mn - Last traded at around 2cts.
Sunshine Holdings [SUNS SP] Market Cap USD 138mn - Injected new business and re-named as China Mining. Last traded 7.7cts.
Synear Food Holdings Limited [SYNF SP] Market Cap USD 977mn - Delisted but exit offer is unattractive.
United Envirotech Limited [UENV SP] Market Cap USD 56mn - General offer currently at $1.65 per share. Shareholders made money on this one if they hold all the way.
Want Want Holdings Limited [WANT SP] Market Cap USD 2371mn - Delisted from SGX but relist on HKSE. Shareholders made money on this one if they hold all the way.

5 out of 23. Very difficult to choose.

[ghchua]

[5 out of 23. Very difficult to choose.

What about buying all the 23? Those 5 who did well return a few times of the original investment for shareholders, which made up for a few that gone bust. Those who are still listed and trading (aka not suspended) currently still have some value.

[opmi]

Maybe should screen to see who are the promoters that IPO
these companies.

[Musicwhiz]

Yup I won't quote your name.

That's good advice. BTW, I follow your blog! LOL

Thanks for guiding a noob like me! I will remember your advice!

Hi BfGf Money Blog,

Thanks, I didn't know people still follow my (now-defunct) blog!

You have an interesting blog too, I visited it and it's very informative. Keep it going! Do you still own the companies you mentioned (i.e. CES, Keppel Corp, Nam Cheong and Valuetronics)? What are the investment merits for each of these companies?

All the best for your tuition centre business! I could never run a business myself haha so I always admire those who are entrepreneurs.