What we endeavor to do.

23 Sept 2017

Dear Fellow Investor,

As mentioned in last week’s report many Singapore traders are in a state of paralysis driven by fear, bad news and uncertainty.

The STI index has been steadily correcting having fallen from 3350 to 3201 in the last 1 ½ months.

In my opinion this is a buying opportunity because bullish factors are slowly  diverging from the bearish view of the crowd.

OCBC accumulating at a major support

For example, OCBC which we have held for many of our clients for over  5 years on 22 August announced positive results led by their wealth management and insurance businesses.

Singapore's Oversea-Chinese Banking Corp. reported a nearly 14 percent rise in quarterly profit, largely led by sustained growth in its wealth management business and robust results from insurance operations.

Banking performance is a lead indicator of recovery. and OCBC is a premier Singapore  bank exposed to all major sectors of the economy including property, construction, logistics, telco, and consumer products  

Their share price has been steadily rising and the handsome dividends keep rolling in. DBS and UOB have also been performing well.

Some real world economic facts such as higher tourist arrivals, industrial production up 21 % in July, sea and air cargo volume increasing  support the recovery. Global economic recovery is helping Singapore’s neighbors such as Thailand, Indonesia and Malaysia. This indirectly benefits Singapore.

The wealth management business has been steadily growing in Singapore. The growth has been 8 % year on year while in Hong Kong the rate is 7 % while in Switzerland the growth is 3 %.   Money flow  to Singapore from China, US, Europe and Asia is an emerging trend due to Singapore’s AAA credit rating, stable currency and political stability.

This is the macro view but let’s look at the practical way to pick opportunities.

These are 4 guidelines from Joel Tillinghast a billionaire  UK fund manager and writer of Big Money Thinks Small.

1-          Does the stock have a high earnings yield- that is a low PE

2-          Does the company do something unique that will allow it to earn super profits on its growth opportunity ? Does it have a moat ?

3-          Is the company built to last or is at risk from competition, fads, obsolescence or excessive debt ?

4-          Are the companies finances stable and predictable into the extended future or are they cyclical, volatile and uncertain ?

Most companies fail the test so it takes effort and research to find these gems.

This is what we endeavor to do.

On  27 September  Dolly and I will be traveling to Osaka and Kyoto and returning on 5 October. If you have any queries you may email me   

For account queries you can call our customer service desk @  03 2783 0300

Invest well and grow your wealth

Bill

A castle in Japan with a moat. Our shares must have a moat.