Vard Holding analysis and market sense

Vard Holding

FA: P/E 12 - 14, close to fair value about 15, not so attractive. BVPS 0.65, fair, no discount. Dividend yield: nil

Conclusion - not attractive

TA: Using support/resistance analysis, First resistance 0.96, first support 0.88, second support 0.79.
Momentum analysis - going down.

Conclusion - fair to down

Analysts rating:
More hold than buy. Target price from 1.10 to 1.45
http://sgx.i3investor.com/servlets/ptg/ms7.jsp
Conclusion - fair to negative

Sector sentiment:
I have heard about shipping sector and commodities sector are bottoming out since about 8 months ago. But relative to overall market indices, Singapore Shipping sector is still relatively under-performing.
Conclusion - stay defensive, can adopt wait and see approach

Market sentiment
From volume and price actions, overall market including western and Asia, sentiment point to cautious, and tend to stay defensive as market is worrying western especially US market which hovering at all time high prone to deep correction. Experts point to about 20 - 30% correction if panic situation worsen.
Positive view: Shanghai-Hong Kong Stock Connect going to bring positive sentiment to both stock exchanges and may bring up sentiment to Singapore too.
Shanghai-Hong Kong Stock Connect
沪港通
Investors ready for Shanghai-Hong Kong stock link
The Impact of Shanghai-Hong Kong Stock Connect

Furthermore, SSE is still at low level compared to above 6000 all time high and HSI is having one of the lowest P/E in the world about 9 - 12 compared to US market about 17.
Conclusion - cautious optimist - betting on china related counters

CK Choy

Journal 2014/09/16

Yesterday HSI continue retreat despite SSE gain. Overnigt US market rebound. Hence expecting HSI to firm up. But HSI today morning closed due to typhoon. Looking at the overall sentiment, market is cautious but I'm a bit optimistic and seeing HSI may firm up if reopen in the afternoon and hence may help sentiment in Singapore.
Currently in the morning Singapore counters open remain flat, can consider intraday contra buy in the morning and sell in the afternoon.
Eg Genting ( trending down from 1.3 and accelerate fast from 1.2 to current 1.105 ) , for contra only.
Property counters, Capland, OUE, short to mid term. Chip Eng Seng, buy at 0.92, 0.89, for short to mid term.
Wilmar, 3.12 to 3.13, short to mid term

CK Choy

CCK's Keys to Successful Trading

by ckchoy

We have heard a lot of topics related to Keys to Successful Trading, either through attending seminars, books, internet sources and so on. How to make XXX amount of money from a short period of time through market. So many versions, so many patterns, so many mindsets and so many stories until so confusing. So what are the 'real real' keys. Can we simplify all and draw a conclusion?

Let me share with you CCK's version of Keys to Successful Trading. Again, this is not a model answer, and let's first try not to focus on whether this is right or wrong to draw such conclusion. This is my experience that I would like to share.

Let's start. So... what are the keys?

1)Method?
It sounds like this is a very basic start, as we all need to have a/some method(s) to follow so that we know when to enter and exit. Methods can be TA ( Technical Analysis ), which TAs you apply? Eg Moving Average, RSI, trend, support/resistance and so on; can be FA ( Fundamental Analysis ). Yes it is one of the key. But can we say that if we have solid methods then we sure will make money consistently? No there are chances that we will still lose money, not only small amount, it could be big, bigger then what you made before, and so on. It could be your methods are right but somehow at that time other factors come in, like major unexpected news against your trade, human emotions change, or what we call, no luck.

2)Skill?
It sounds better and it is the second level of requirement of successful trading. Skill can be the ability to read TA charts, the knowledge to read FA reports, the experience to read first hand news as soon as possible, the fast reaction to key in your orders and so on. Yes skill is also very important, but same thing, it is not foolproof. There could be more people that are skilful than you, and it could be the luck not there.

3)Experience?
Aha...sounds logical and common sense? No matter how solid the methods we use and how skilful we are, time will tell whether that will ensure a consistent profit, so experience is important right? The more experience ( the older we are... ha ha) we have the higher chances of successful trading? Ginger the older the spicier. Finally we found the answer? No, if it is true, then the more trading experience a person has, the more profit he will make, but we know it is not necessary true. In fact, past experience is just as good as a past reference. You can show me past 1 year, 2 years or 10 years trading profit, but they still cannot be used to project your next year profit and future profit. Future is always unknown. Yesterday you make 100 buck doesn't mean tomorrow you sure will make 100 buck and doesn't mean you will not lose. Last year you make XXX amount of money may not mean this year you can make XXX amount of money and will not lose. Even though you show last 10 years record, also cannot predict your 11th year profit/loss.

It is same as a past TA chart is only as good as past reference, if it can 100% predict future trend, then everyone will make money consistently using past data.

So tired and waste time reading so many nonsense still can't get the keys?

4)Discipline!
You have heard of money management is important, how trading psychology works, how we can control our emotions to successful trading. Yes they are true, but you need a key thing to follow them consistently - Discipline. We may not be able to know the trading outcome, ie win how much or lose how much, but with discipline, at least we can control and minimize the loses hence protecting our capitals. 留得青山在，不怕没柴烧

5)Luck!
This sounds so funny, ridiculous and nonsense. Don't you tell me after we learnt up so much and so many things now you want to tell me all because of luck? So might as well we learn nothing and pray for luck? I don't mean we should stop learning, instead we should keep on learning but don't forget luck is a key.
Yes, it is very true, most of the time we need luck to standby us, especially how much we can win from the market. We can't decide and control how much we can make, but let market show us. For example, if today's market is in a very tight range bound, don't die die say must make 20% today. If today's market swing fast like a roller coaster or has a very strong trend, you thought of making 30% is enough, market may give you 100% or 200%, so don't any how demand from market and don't underestimate market.

Conclusion
Let's simplify - yes CCK's experience tells that the keys are Discipline and Luck.
I understand most can accept Discipline is important and it is a main key but not many can accept Luck.
But let me tell you this and you will feel better to accept Luck is important and good.
If we win money from casino, most of us will agree it is all because of luck and will not bother much to risk ourselves more and expose big to our betting.
But how about we somehow can win consistently from market through trading? Many of us will start to think we are the king of trading, and so confident that we start to multiply until overcommit. I can tell you, there is no Guru and expert in trading but only winners and losers. Either you are a winner or a loser, that's it. Don't grade yourself so many different kind of levels like what novice lar, amateur lar, what experience lar, what expert, what Guru, what God of the market, what legend lar... you only make yourself more confused and most importantly, make your ego control you.
Everyday I'm a fresh student of market. Accept Luck as a key factor so that we can stay humble and market will reward us.

Is It Time To Buy Now? - Is this a million dollar question? Not really!

by ckchoy

As a retail trader/investor, where you are a person that keen on catching opportunities in stock market,  I believe you might have experience people around you asking you such a question "Is it time to buy now?" For some, they may think in heart
" Hey I'm not GOD, I also want to know the answer"
or
" If I know, I will be rich"
or reluctantly and answered eg
"Hard to say, if more bad news coming, market may tank more"
"This type of market very hard to play, may win a bit and lose a lot"
"If Euro problem solved, market of course will rally, if not, will continue tank more"
"So much bad news around, I don't know how to digest, not sure what will happen to the market"
"I can see market started to rebound slowly, but will it snap back down? Is this rebound/rally sustainable? QE coming? More China's rate cut? More banks in Europe bailed-out cases pop up?"
and so on.

Instead of only focus on general global news especially on political and have no idea of what's going on next, why don't bring in some basic figures to support your view? Be it TA(Technical Analysis), FA(Fundamental Analysis) or macro-economic (eg inflation rate, interest rate, GDP etc).
Using quantitative figures not only can let you jump out of indecisive infinite loop, it may help you continue improve your experience on market view, a positive cycle to your trading/investing experience.

Below are only some samples for illustration, please do not take the numbers and comments seriously.

Sample answer 1 - TA, short term, using STI index as reference, support play
I look at the short term(few days or week) chart and it is showing uptrend. However, I notice STI has run up 9 straight days, perhaps market is a bit overbought. But since market is in uptrend, I will long the market but wait for a pull back first. From the chart, I see STI possible to make a healthy pull back to around 2920 before I enter.

Sample answer 2 - TA, mid term, using STI index as reference, breakout play
Hey, I'm more conservative, I like to take mid term(weeks to month) view. It looks like a sideway market in mid term, hence I would like to wait for STI to breakout 3000 before I consider jump into the market.

Sample answer 3 - TA, long term, using STI index as reference, conservative play
I'm super conservative, to me long term market is still in downtrend, however I have such support levels in mind, 2920, 2880, 2850, 2800, 2770, 2750, 2700, 2680. As I'm conservative, I would wait for 2680 before I enter the market.

Some may think, hey Sg market is a low volume market comparatively. I like to use HSI ( Hong Kong's Hang Seng Index ) or Dow Jones/S&P as reference.

Sample answer 4 - TA, HSI, support and resistance play, volume breakout play, Dow, S&P
Last year when the Euro crisis started, HSI down from 22000 to 16200, then rebounded sharply to 21700. And this year May the Euro crisis brought into the game again and HSI retreated back to 18100 before rebound back to current level of 19800.  In between I notice the flip flops show strong support around 18200 and strong resistance around 19500. Hence I would long/short around this support and resistance. But if volume breakout and HSI were to stay above 20000, I would turn bullish.
I'm considering the Dow should be trading in the range of 12000 to 13000, and S&P 1250 - 1400.

Sample answer 5 - FA, STI
Historically, STI fair value is around 15 - 25. Current level of 13 is below fair value and considered cheap. However short term market is volatile and there are still a lot of uncertain in the markets. I'm not hurry to buy but would buy on any dips as current level do offer cheap valuation for a long term investors.

Sample answer 6 - FA, specific counter, P/E
KepCorp which is trading about 9-10 P/E which I think is undervalued. It is time for me to do accumulation.

Sample answer 7 - FA, specific counter, value investing
Capland is trading below its NAV of 3.5 which I think is worth considering even though the previous and coming quarter results were/are not that impressive.  Current share prices should have already factored in 40% drop of value in future, let's say 2-3 years time.

Sample answer 8 - FA, sector, earning
I have done my research, coming quarter banks most likely will continue report better than expected results. I'm betting short term on banks for its quarter result.

Sample answer 9 - FA, macro-economy figure, longer term
Singapore inflation rate stays high around 5% per year which I think is not a healthy sign, I expect market to remain volatile. As a conservative investor, I would like to see inflation start to cooling down before I would consider enter the market.  Best is when it comes down to 2-3%.

Sample answer 10 - and so on.

Have you done your homework? Let me check with you: Is it time to buy now?

失败与成功只差两行

by ckchoy

失败与成功的投资者所经历的都有所相同，只是成功者多做了两行。

失败的投资者：
星期一大举进攻
星期二以守为攻
星期三破釜沉舟
星期四背水一战
星期五两袖清风

成功的投资者：                            
星期一大举进攻
星期二以守为攻
星期三破釜沉舟
星期四背水一战
星期五两袖清风
星期六面壁思过
星期天卷土重来

Buy-cut-buy vs buy-and-hold strategy

by ckchoy

When stock prices are in uptrend, investors can make profit easily. One may set a target price using TA or FA. It is either making more or making less. For example, one might have taken profit at 10% - 20% gain but upon sold, seeing the share price kept rising and hit 100% gain, he may curse himself not able to ride the bigger gain. Whatever, the heart inside still smiling as he is still making profit, he will not have hard feeling on it.  Everyone can handle profit well.

How about losses?  A lot of investors and people cannot handle losses well including me. But small losses vs big losses do make a different. And many of us can have a control of our losses.
Let's look at these strategies
buy-cut-buy vs buy-and-hold

When market started to move weird, example, small drops bit by bit now and then.  These losses started to accumulate, this may give hints that market is in downtrend. And upon market started to have panic selling and in big plunge, then market may have chance to reach bottom.
As market is dynamic, past history only  good enough for reference, hence the so called percentage drop amount analysis and time period analysis to judge a bottom is not always accurate. For example is it a 40%, 50%, or 80% drop mark a bottom? A 10 years, 8 years or a 4 years mark a economy cycle? For the past economy ran itself going thru the peak, recession and recovered on its own. But nowadays there are interventions like fund injections, bailout and many more steps to shorten the recession but this will make the market reaching its peak fast and slump back to down again in shorter period.

Let's say stock abc dropped from 12 to 10 and an investor decided to buy in, but then stock abc continue sliding to 5  before it hit the rock bottom and climb back to 14.

For a buy-and-hold strategy the investors will going thru the cycle seeing his portfolio in 50% loss, (stock abc moved from 10 to 5) and he needs a 100% gain (stock abc to climb from 5 to 10) and then see a 40% gain finally from 10 to 14.

For a buy-cut-buy strategy, one can buy a stock and then set a stop loss let's say 2%, but must remember to buy back after cut. Usually when market started to move down fast substantially, it may take about 1 to 5 times before we catch in the right rock bottom price. And remember market will not move down in straight line to hit it's bottom, there will be rebounds in between, hence we may even make small profit even though we caught a wrong bottom by using buy-cut-buy strategy. So we can estimate we may need to endure only 6 to 8% loss before we catch the rock bottom price, compared to a 50% loss if using buy-and-hold strategy. And then when the stock price move up to 14, The buy-cut-buy strategy will make 180% gain vs 40% gain of buy-and-hold . The 6 to 8% loss incurred compared to 180% gain will be nothing.

What about if stock abc never recovers and trades around 5 for a very long time? Then for the buy-and-hold strategy can almost say the 50% loss is realized, but for the buy-cut-buy strategy, he only will lose about 6% to 8%

We can apply these strategy to blue chip stocks and non-blue chip stocks. Of course blue chip stocks tend to be lower risk and have higher chance to bounce back and hit even higher price. Non-blue chips on one hand can surge few folds but on the other hand it also can be a forgotten stock and still stagnant at a low price for a very long time.

It depends on your risk profile.

Trading business

by ckchoy

Stock trading is about probability, but
How to determine the probability in trading? It is only a rough guide:

The most popular tools are TA ( Technical analysis using charts ) - there are plenty of TA charts, just google.
1) TA may increase your probability to another 5%
2) watching market full time and have a feel of the market sense will increase your probability to another 5%
3) homework will increase your probability to another 7%
4) trading experience will increase your probability to another 10-20%
5) stick to discipline consistently will increase your probability to another 40%

So if trading with 1) to 5) together, will increase your probability to another 67-77%

It is common for beginner to lose money in trading because lack of experience. However, if a beginner is disciplined, using TA and doing homework, he will have a probability of 52% to make money consistently

Well, some may ask, if all the people can trade with 1) to 5), then wouldn't be all the people can succeed in trading? Yes sound easy. But easier say than done. How many people can consistently do these all the time? I won't say must do 1) to 5) consistently, as long as you can make up > 50%, it is good enough.

90% of the people will drop out some of the points, especially point 5), how many people can be so discipline all the time? Only robot can, because human have emotion.

Don't forget market is dynamic, traders need to consistently review the TA tools. Today's tool that let you make money doesn't guarantee it will do the same for tomorrow.

How many people can watch market full time? Only day traders/stock broker can.
How many will do homework consistently? Once a while will take for granted not to do homework and just place a trade.
And what is trading experience? You may have 20 years trading experience but those experience may not be applicable to today's market as market is dynamic.

Consistent, persistent -> easy? Perhaps only interest and passion can help.