Me & My Money Series (Sunday Times)

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#71
If we ask dydx, he will most properly say that investment is not about luck, but about looking for a good biz, holding onto it, eventually it will be actualised when another value player comes in for the buyout.

eg, pokka, thomson medical.

Big Grin
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
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#72
I believe there is always element of luck in value investing. And we can see the luck in the form of how fast or slow and how much the re-rating of the value stocks that we buy. Although we can say for certain that re-rating ought to occur, we will not even be able to estimate when it will actually happen. Sometimes we may even cut profits early to chase for another one where we think the gains might be higher but end up losing the substantial re-rating of the previous stock and while waiting for the current one to do its magic. So there is luck required in value investing anyway.
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#73
(15-12-2010, 09:23 PM)ichiran Wrote: Hi Yeokiwi, mrEngineer,

For the purpose of "post-mortem" learning, do u mind sharing the names of these multi-baggers u spoke about? Big Grin

Before 2008...
Osim
Unisteel
FJ Benjamin(bet on warrants)
MAE Engineering, now is called Lereno Bio I think (this one was by luck one...Tongue)
Sing Lun
Kingsmen

The first two were super multibaggers.
FJ was a turnaround play but since I bought the warrants, the leveraging effect was quite significant.
MAE was bought because of bio-diesel fever. But, I sold away after it had multiplied a few times since most of what the management claimed were actually hot-air.
Sing Lun was lucky because of buyout by funds.

Kingsmen is the only one left in my portfolio.

I think most value investors can easily get 50-100% return on their stock selection. But, to get multi-baggers, I think some lucks need to be present. At least that's the case for me Tongue.
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#74
(15-12-2010, 09:23 PM)ichiran Wrote: Hi Yeokiwi, mrEngineer,

For the purpose of "post-mortem" learning, do u mind sharing the names of these multi-baggers u spoke about? Big Grin

I only have 1 multi-bagger which is ARA.

If I kept my Golden Agri, it would be my other multi-bagger.
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#75
(15-12-2010, 05:29 PM)yeokiwi Wrote: I like penny stocks simply because it is possible for penny stocks to go multibaggers. For blue chips, I think it is unreasonable to expect blue chips like SPH, SIA, DBS, Keppel or Dairy Farm to become 2 or 3 baggers during normal period.
there are exceptions though...i still have that blue cdp contract settlement slip of jardine cycle & carriage bought at S$10.30..
jardine matheson..these are the ones also flying realli steady in the sky..

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#76
Wow! Guys, thank you for your sharing!

As they say, luck favours the prepared mind.

In your opinions, is there a screening process that we can follow to increase the probability of landing a multibagger? Eg. Start off with a list of high ROE businesses, then look at whether company has a history of generating increasing operating cash flows, buying the stock at below price to book value etc?

Basically, on hindsight, are there any common factors present for those multibaggers mentioned?
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#77
For my case, I believe it was due to timing of my purchase. I did not purchase ARA at its lowest (although I do know some forumers here do) but cheap enough during crisis levels.

The next key identification was to ensure the sustainability and growth of ROE of the stock purchased during crisis periods. This is a qualitative measure where u need to understand the business and its growth potential. Another area that you can look in would be predicting the media coverage when the bull run arrives. Some stocks would just simply receive media attention when times get better. For e.g. Other than high ROE and it's relation to Li ka shing for ARA, I was not aware exactly how REIT management business works until recently. But if I knew before, I would have increased my stakes then.

Lastly, do not sell and cut profits early as the ride upwards would be tough. It is harder than you think as there will be many times temptation or even "valid reason" to realize profits and you need to resist all that. For e.g. the reason I sold early Golden Agri is because then I realised that the founder history was dubious and decided to get out asap. Also I made a mistake in assuming that there will be immediate adjustment of total outstanding shares after its right issue and impact EPS.

One way I use is to look at the peak price of the previous bull run and ask myself whether it is possible for the stock to reach the pre-peak price levels when the company is better than before.
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#78
He did the right thing by investing in his business! For property, seems that for the 1995 property he bought, it hardly appreciated much over the last 15 years and after factoring in financing costs, it may have just broken even. For shares, his track record is erratic. Smile

Dec 19, 2010
me & my money
There's method to this Mad Jack

Entrepreneur Jack Chin saves over half of his income
By Lorna Tan, Senior Correspondent

Mr Jack Chin has loved eating Chinese pancakes - min chiang kueh - since he was a child. When prospects for his software business seemed uncertain, he and his wife Tan Siew Khuan, both 43, decided to switch to making and selling pancakes under the moniker Pancake King.

From one outlet in Geylang Lorong 23 in 1998, Pancake King has since expanded to 20, of which 15 are run by franchisees. The outlets are mainly in coffee shops, hawker centres or industrial canteens.

In 2005, Mr Chin started Aussie-style restaurant Mad Jack with two friends, who are sleeping partners, with an initial investment of $120,000. He holds 52 per cent of the Mad Jack Group. The latter now has six outlets, with the latest just opened at nex mall in Serangoon Central. Two out of the six are franchised.

Pancake King and Mad Jack have a combined staff of more than 60.

Besides his businesses, Mr Chin owns some shares and investment properties, including two shops and a factory unit.

He graduated from Victoria University of Wellington in New Zealand with a degree in business administration in 1990. Over the next seven years, he worked in the IT industry as a sales manager, before setting up e-learning and software firm Epsys with his wife with $100,000. It ceased operations in 2003.

The couple have two daughters - Rena, 14, and Daena, 11.

Q: Are you a spender or saver?

I used to be a spender before I was 30 but I became a saver after that. I save more than 60 per cent of my income regularly. The savings are reinvested in the business, properties and stock. My wife and I consider ourselves to be frugal.

Q: How much do you charge to your credit cards every month?

I have three credit cards. I charge less than $2,000 to them monthly unless I have big-ticket items to buy or I go overseas. My credit card payments are cleared every month through Giro. I withdraw $1,000 from the ATM as and when I need to. It usually lasts me around one to two weeks.

Q: What financial planning have you done for yourself?

Of my current assets, 23 per cent are in businesses, 59 per cent in properties and 18 per cent in cash and stock. We have full control and manage these assets ourselves carefully.

We are very lucky to own some investment properties that give us annual returns of more than 8 per cent. We bought term insurance for protection only, not for saving.

I cashed out a sum of $600,000 from the stock market in 2007 because I thought it was 'overheating'. In October 2008, I invested $1 million in the market. It was scary when the prices halved a few months later in December. I was afraid of a double-dip recession, so I liquidated my stocks in April, May last year and made half a million dollars. Now I'm holding only shares of Jaya and CH Offshore. When selecting stocks, I look at the company's management team, debt ratio, net profit margin and dividends.

Q: Moneywise, what were your growing-up years like?

I was born into a big family with 12 siblings. No kidding! I am No. 13. We were struggling financially in the early years. My father was an entrepreneur and my mother helped him in his businesses. He started many successful businesses such as a beancurd factory in Tawau, Sabah, before I was born. He also owned a cocoa plantation and a sundry shop. Some of these businesses are long gone and some are still run by my brothers today.

Unfortunately, my father was a hard-core gambler. We lived in a two-storey wooden kampung house in Sabah with the sundry shop on the ground floor. My father died when I was 12.

Our lives became better when most of my siblings started working. I learnt the ills of gambling and know the difficulty of not having enough money. So, I am careful with money. When I was 18, in 1985, I left Malaysia for New Zealand, with just one year of tuition fees and six months' expenses. I worked in various jobs to earn my keep.

Q: How did you get interested in investing?

I am a big fan of Warren Buffett on stock investments and of Robert Kiyosaki on money concepts such as asset and liability, positive cashflow and passive income. I've read most of their books. I met Kiyosaki when he came here.

Initially, I started accumulating cash via my business and invested it in stocks. Though I got very good returns on stock, I later discovered that I could leverage more on property investments for positive cashflow.

Q: What property do you own?

I own one factory unit, two shops and two condo units.

I bought a 2,900 sq ft light industrial factory unit at Kallang Pudding in 2008 for $650,000. The value has gone up to in excess of $1 million. The rental yield is 8.5 per cent.

Of the two shops, one is a 2,000 sq ft shop located in Bedok North and rented to a Thai food eatery. I bought this unit for $1 million last year. The other is also 2,000 sq ft and is at Serangoon Central. I bought it recently for $1.65 million and rent it to another food eatery. The rental yields for both shops are above 8 per cent.

In 1995, I bought a 1,300 sq ft 99-year leasehold condo unit in Serangoon Avenue 3 for $805,000. It is worth about $1 million now.

Last year, I bought a 1,539 sq ft 99-year leasehold condo unit in Pasir Ris for $1.08 million. It will be completed early next year. The current value is about $1.2 million.

Q: What's the most extravagant thing you have bought?

A holiday in Europe with my wife and two kids in June. We spent about $30,000 touring Italy, Austria, Germany, France, Switzerland, Amsterdam and London over 21 days. It was very educational and an eye-opener for the whole family.

Q: What's your retirement plan?

My wife and I don't really have a retirement plan. We focus on achieving the freedom of time, money, health, work choice and so on via passive incomes. We consider ourselves to be very lucky to be doing what we are doing.

Q: Home is now...

It is my condo in Serangoon Avenue 3.

Q: I drive...

A black Lexus RX300 SUV. We got it second-hand when it was 11/2 years old, 'saving' about $30,000 in the process.

lorna@sph.com.sg

--------------------------------------------------------------------------------
WORST AND BEST BETS

Q: What has been your worst investment to date?


During 1996-1997, I bought $24,000 of IPC stock. It became $2,400 after about two years and I sold the counter. The good thing is that my frustration over my investment led me to read books by Peter Lynch and Warren Buffett. I consider The Warren Buffett Way the best investment book I've come across. Not only did it teach me to be a good investor, it also taught me to be a much better businessman. My wife and I did very well in our stock investments from 2000.

Q: And your best?

It's my wife.

Moneywise, it is our business. We started our pancake business with $8,000 in 1998. We managed to leverage it via franchising. Then, we started Mad Jack in 2005. We also managed to leverage with a franchise system. The businesses have been providing us with passive incomes.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#79
nice to have the Sunday times "Me & My Money Series" posted here for members to see...thanks
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#80
(25-12-2010, 07:44 PM)floorfilla Wrote: nice to have the Sunday times "Me & My Money Series" posted here for members to see...thanks

You're most welcome.....

For last Sunday though there was no Sunday Times (due to Christmas); and hence there was no "Me & My Money" segment.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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