AS OUR 6-month Stock Challenge heads into its last four weeks (April), Sebastian Chong has regained the lead that he conceded to Level 13 in the last round.
Sebastian’s portfolio was up 20.4% as of last Friday (April 3). Level 13’s was up a credible 11.5%.
Other participants have benefited also from the recent market rally. As the economic malaise plaguing the world eases, Li Ka Shing, the Hong Kong billionaire, said in a Bloomberg interview last month: "If you have cash, buy stocks and properties."
Our Stock Challenge participants, who have mostly ‘long’ positions, are bullish too.
DanielXX said: “The recent rally looks convincing, as most markets have broken above their recent 3-month moving averages on high volume. For example, we haven’t seen 1.5 billion shares, both by units and value, trading on the SGX for a while now until recently.”
By the end of this month, we will conclude the Stock Challenge, and award the top 3 players $350, $100 and $50, respectively. (If you wish to take part in the next edition, please send an email to
Here are details of everyone's performance to date:
| Stock | Number of shares | Purchase price ($) | April 3 closing price ($) | Value of holding ($) | Percentage change (including dividend) |
| SGX | 4,000 | 4.46 | 5.80 | 23,200 | +32% |
| Jardine C&C | 2,000 | 8.20 | 12.84cd | 25,680 | +56.6% |
| Capitaland | 3,000 | 2.08 | 2.70cd | 8,100 | +29.8% |
| KepLand | 3,000 | 1.49 | 1.66 | 4,980 | +11.4% |
| Wilmar | 3,000 | 1.87 | 3.36cd | 10,080 | +79.7% |
| Sino-Environment | 20,000 | 0.425 | 0.155 | 3,100 | -63.5% |
| Straits Asia | 8000 | 0.825 | 0.84cd | 6,720 | +1.8% |
| Mercator | 50,000 | 0.115 | 0.135 | 6,750 | +17.4% |
| Li Heng | 20,000 | 0.20 | 0.17 | 3,400 | -13% |
| Yanlord | 5000 | 0.74 | 1.31 | 6,550 | +77.0% |
| Metro | 10,000 | 0.37 | 0.315 | 3,150 | -14.8% |
| Bukit Sembawang | 1000 | 3.61 | 2.54 | 2,540 | -28.0% |
| Synear | 20,000 | 0.115 | 0.22 | 4,400 | +91.3% |
| Ascott REIT | 10,000 | 0.555 | 0.45 | 4,500 | -17.0% |
CapitaRetailChina Trust | 10,000 | 0.565 | 0.77 | 6,700 | +38.0% |
Cash | 587 | ||||
| Total | 120,437 | +20.4% |
Sebastian Chong
Sebastian Chong has invested actively in equities since the 1970s. He is managing director of Financial Info Analysis Pte Ltd, a company he founded after he retired as an accounting professor at the National University of Singapore. He now runs his popular investing website, www.shareowl.com
Sebastian says:
On 3 April 2009, the STI closed at a decent 1,820.87 compared with 1,594.87 on 27 Feb 2009. The STI has risen by 14.2% but my portfolio value has gone up by 20.7% since 27 Feb. The outperformance relative to the index is due to Jardine Cycle & Carriage and SGX primarily and helped by Yanlord and Capitaland.
Last month Yanlord was a poor performer but this month it is a terrific performer. It tends to outperform the STI in a rally and underperform the STI in a slide. In other words, Yanlord is volatile and is a great stock for skilled traders.
Between 27 Feb and 3 April, the blue chips mostly outperformed the small caps because the rally of the last few weeks may be viewed as the first phase of a long bull cycle in my opinion. The March bottom for the STI was 14,455 and that could represent the bottom and not merely a bottom.
Most analysts and fund managers dare not stick their necks out to proclaim that the bull cycle has begun. Let me stick my neck out although there is a slight risk of it being guillotined within the next 12 months.
Yes, we can wait for clear visibility before returning back to stocks but by then the STI might be standing at 2,400 already. There is no free lunch. You can’t have clear visibility plus rock bottom prices for your stock purchases.
Just select your stocks carefully and remember to diversify. I had a good reason for holding 15 stocks rather than just 4 or 5. If Sino-Environment had formed 20% of my portfolio value when I first bought it, I would have been very badly hit. Fortunately it formed only 8.5% of my initial portfolio.
I have not cut loss on Sino even though it is now 15.5 cents compared with the purchase price of 42.5 cents. I bought it in October because it had a great business model with the right business segments in the environmental engineering industry in China. It had growing revenue, operating profit and operating cash flows plus a cash positive balance sheet.
However the share price crashed not because of its business operations but because Sino’s major shareholder, Mr Sun Jiangrong, had pledged all his shares in Sino to a hedge fund for his personal speculative investment activities.
The accounting standards and the stock exchange rules do not require the pledging of controlling shareholders’ shares to be disclosed. Even if their shares are not pledged, there is still a risk of controlling shareholders taking huge risks in their own personal finances.
In theory, it would be very useful to find out more about a listed company’s controlling shareholder’s personal risk profile because a high risk taker in personal affairs imply that he or she could also make very risky decisions involving the listed company’s operations or financing. If Mr Sun is forced to sell all his shares in Sino and cease to manage its business operations, then Sino would lose the key person who built up this dynamic environmental engineering company.
A major change of shareholders also allows the bondholders to demand early repayment of S$149 million worth of borrowings. Currently Sino is being advised by a highly sought after financial restructuring consulting firm, nTan Corporate Advisory, in finding a win-win solution for Sino, Mr Sun and the bondholders.
At 15.5 cents, it is too cheap to sell off Sino shares since Sino forms only a small component of the portfolio and there are fair prospects of resolving its problems. Notwithstanding the 63.5 percent drop in value of Sino shares, my overall portfolio is still up 20.4% since the stock investment game began in late October 2009.
That is the beauty of adequate but not excessive diversification. I still have a balanced portfolio and I only envisage some minor but not major adjustments in the weeks to come.
*****
| Stock | Number of shares | Average Purchase/Short price ($) | 3 April closing price ($) | Value of holding ($) |
| Bright World | 141,000 | 0.293 | 0.175 | 24,675 |
| Jardine C&C | 10,000 | 12.86 | 12.84 | 25,920 |
| Olam | 100,000 | 1.64 | 1.65 | 31,800 |
| Cash | 29,091 | |||
| Total | 111,486 (+11.48%) |
Level 13's avatar
Level 13 is a 31-year-old investor and a business analyst with 4 years of investing experience. Check out his blog for insights on financial matters (mainly equities).
Level 13 says:
I have closed my UOB position on 23 March at $9.50. Personally I don’t see the share prices of banks under further pressure for the next few months as most of the bad news have since been reported and the latest plan of buying ‘toxic assets’ from US Treasury Secretary Geithner will give market sentiment a further boost. As for Bright World, the takeover deal has been called off. I expect the stock price to go down further and damage limitation will be my main aim.
There are 2 new positions I added on 2 April. I have shorted Olam and Jardine C&C based purely on trading reasons. Their share prices went up more than 10% on the day I shorted. The market is near the overbought region as prices have gone up too fast in a short period of time. As such, I expect some profit taking to occur next week.
***
| Stock | Number of shares | Purchase price ($) | April 03 Closing price ($) | Value of holding ($) |
| Swiber | 37701 | 0.495 | 0.440 | $16588.40 |
| China Taisan | 107142 | 0.140 | 0.105 | $11294.91 |
| China Taisan (Dividend) | 107142 | - | 0.01796 | $1924.27 |
| SMRT | 15723 | 1.590 | 1.50 | $23584.50 |
| Capitaland | 5474 | 2.740 | 2.700 | $14779.80 |
| Capitaland (Rights) | 2737 | 1.300 | 2.700 | $7389.90 |
| Cash | $26441.90 | |||
| Total | $102,003.68 |
Kennysjq
Kennysjq is a young investor whose investing approach involves studying company fundamentals with a mid-to-long term horizon in mind. He advocates risk taking with caution because he knows we can’t avoid it. Enjoys his daily Business Times, especially so with an americano expresso.
Kennysjq says:
My portfolio had a gain of about $2,003.68, which is equivalent to 2%. Cash on hand: $26441.90
I exercised my CapitaLand rights this month, giving me a total of 8211 shares. I spent $3558.10 on this. I missed out on a golden opportunity last month. The plan was to purchase more stocks when the STI dropped to below 1500 points few weeks back but I succumbed to the fear of share prices plunging even further. And now, I refuse to buy into this rally.
I believe it is a bear market rally for now but I doubt the STI will drop back to that level as I feel the market is recovering. I certainly hope I will not make this emotional mistake again!
***
| Stock | No. of shares | Price bought at $ | Apr 3 price | Total shareholding value $ | Vested dividend S$ |
| SMB United | 227,273 | 0.11 | $0.14 | 31,818 | - |
| CH Offshore | 113,636 | 0.22 | $0.27 | 30,682 | 0.005 |
| Celestial | 64,103 | 0.39 | $0.105 | 6,731 | - |
| Tat Hong | 43,478 | 0.575 | $0.665 | 28,913 | 0.035 |
| Total | 98,144 | 2,090 (Total) |
DanielXX's avatar
DanielXX is a 30-something investor who is well-known in online investing forums as well as for his blog, where his writings on investing reflect depth of thought and analysis.
DanielXX says:
As of Feb 28, the total value of my portfolio = shareholding value + dividends = $100,234.
It is back to even after being down 7.4% last month! My portfolio has been hit mainly by its exposure to Celestial. My view is that the worst would be over once the company’s annual report is finalized and audited. As for the broad market, the recent rally looks convincing, as most markets have broken above their recent 3-month moving averages on high volume. For example, we haven’t seen 1.5 billion shares, both by units and value, trading on the SGX for a while now until recently.
My view on specific stocks:
SMB United: Dividend is not that great at 1 cent, but it’s close to 8%.
CH Offshore: If there’re no contract cancellations, it’s a potential multi-bagger.
Celestial: Too cheap to ignore, in view of its large operational scale for an S-stock.
Tat Hong: Could benefit from infrastructure theme. Weighed down by Aussie dollar weakness, though.
***
| Stock | Number of shares | Average Purchase price ($) | Apr 3 close ($) | Value of holding ($) |
| China Milk | 20,000 | 0.39 | 0.32 | 6,400 |
| China Taisan | 200,000 | 0.145 | 0.105 (xd) dividend: 1.63 cts | 24,260 |
| China Zaino | 20,000 | 0.21 | 0.16 | 3,200 |
| Sino Techfibre | 20,000 | 0.18 | 0.10 | 2,000 |
| Li Heng | 260,000 | 0.139 | 0.17 | 44,200 |
| Cash | 10,060 | |||
| Total | 90,120 (-9.9%) |
Gary Teh
Gary Teh, 39, is Asia sales director for a semiconductor company. He graduated from Melbourne La Trobe University School of Economics with a Bachelors of Economics with an accounting major in 1991. As for his stock market passion, he has been greatly influenced by his dad who, despite a modest income as a government servant in Malaysia, managed to accumulate a nestegg for a comfortable retirement by investing in stocks for over 30 years. Penang-born Gary has been buying and selling stocks, mainly on the Kuala Lumpur Stock Exchange, since he was around 16. He is married and lives in Singapore.
Gary says:
Early in March, I decided to make some painful decisions to salvage the portfolio. I sold Celestial as visibility has become really cloudy and the threat of permanent loss was real.
I took the cash out and reinvested it in Li Heng, which at least is candid and communicates well and I really like that.
It also approved (management level) a share buyback program to be approved at the shareholders meeting this coming April. In all, I added 210,000 shares to my holding of Li Heng @ 12 cents a share. It was a major investment which has proven to be a right move, as Li Heng closed at 17 cents last Friday.
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