Ninja Trader ("NT")

Never catch a falling gem?

2007-05-30T00:41:00.000+08:00

It has been a long time since I last posted on my blog. Please accept my sincere apologies as i have been very busy with work. I truly hope that i can start posting more regularly going forward but after my June holidays to Japan... hahaha... The blog will make me more disciplined to look at the market each day for attractive set ups.

Gems TV is one gem which you should avoid once it breaks 118 and it is still heading to new lows today and is near the technical breakdown objective of 70 cents. You can see that once a gem loses its shine, the RSI and the stochastic and remain in oversold position for a very long time.

The above chart reiterates a few points which i would like to highlight:

1. The Trend is your Friend

2. The importance of having a stop loss in your trades. Make sure your stop loss is tight.

3. Technical indicators are just as its name imply, an indicator. It would be good to know what are the fundamentals of this company, whether analysts like this company and their fair value for this company as well, As you can see, the technical indicators can remain 'oversold' for a long time so it would be wise to have some FA skills as well.

Adios.

My thoughts on Ninja Trading School

2007-02-06T00:49:00.000+08:00

It has been more than 4 months since i started the Ninja Trading School. I still owe my little ninjas many lessons on how to trade. I hope to complete a lesson on Technical Anlaysis soon!! :( and would like to share some of my thoughts on this little school of mine.

The most humbling experience in setting up this school is knowing that there are many traders who are better than me and yet as humble as ever to actually enrol in my school. hahaha. I dont think i can even trade as well as some of them. There are many hidden dragons among us and I am sure they will continue to do well in their trading. It is their willingness to share what they know that makes them outstanding little ninjas. Without their participation, my "classroom" would have beeen very boring and quiet. Thanks to all little ninjas who actively participate in classroom activities even when yours truly has been caught up in meeting, work and overseas travel.

The most pleasure i derive is to have a group of trading kakis who faithfully appear at 845 am and then disappear at 515pm each day at the trading room. We have indeed mastered the act of appearing and disappearing. Not to mention acquring the skills to watch over our shoulders in case our bosses caught us trading the market. Thanks for all the companion. We were all at a loss when we lost our internet connection due to a small earthquake in Taiwan.

For all the little ninjas who went through this journey with me, thanks for your patience and understanding. I had a great time enjoying your friendship. I hope to continue sharing my trading journey with you. May we continue to enjoy a trusting and fulfilling journey together as each of us seek to find our own personal trading style.

China Milk

2007-02-05T23:40:00.000+08:00

It has been a long time since i last posted on the blog. Bought 10 lots of China Milk at 137 today. Wanted to buy at 134 but my fingers was too slow and was too distracted by the IPO of Sunvic.

It was a good day today as i cashed out 11 lots of my Sunvic Placement shares. I think the recent IPOs (Cityspring, China Farm) and even KSH will do well this week. Just try your luck at the ATM as it is extremely difficult to get them in the public tranche.

OCBC Investment Roadmap 2007

2006-12-04T08:51:00.000+08:00

I attended the OCBC Investment Roadmap 2007 on Saturday Dec 2, where Daryl Guppy was invited as a guest speaker. To be honest with you, I bought his book "Market Trading Tactics" sometime back and I was never impressed with that book. This perception was somehow 'reinforced' today as I walked away learning nothing new except for a slightly better understanding of how Guppy Multiple Moving Average indicator works. He could be a really good trader but somehow I wasn't able to tap into his 'knowledge'.

Anyway, the session on Winners for 2007 by Carmen Lee, the Head of OCBC Investment Research was more interesting. This is the session where she gazes into the crystal book and stick out her neck with 2007 predictions.

Her key message were:

Mid tier property market will catch up in 2007
Electronics may become a 'laggard' play as this is one sector that has lagged the entire market in 2006

Her winners for 2007 will come from the following areas:

Corporate Earnings visibility where earnings for 2007-2008 are clear, such as those in the oil-linked companies (Sembcorp Marine and Kep Corp) with strong order books.
M&A. Singapore has been relatively quiet on this M&A front where even Malaysia is even more active. The M&A scene will likely heat up here.
Undervalued stocks with low price, high yield may find favour in 2007 but investors need a lot of patience and holding power
China Consumer play will still be in vogue
SC shares - Spore listed, non-PRC owner but with PRC exposure such as Raffles Education, HTL, Pacific Andes and Man Wah etc may find favour.

Her 2007 theme is to buy value stocks and her stock picks for 2007 are as follows:

Ezra
Sembcorp Marine
Genting (hot favourite for Sentosa IR)
Pine Agritech
ST Engineering
Singapore Telelcome

Her small-mid cap picks are:

Asiapharm
Biosensor
Bright World (this is her hot favourite)
HTL
Koda
KS Energy
Pacific Andes
Rotary
Tat Hong

Okay i have showed you her stock picks for 2007, you can place your bets now. :)

Hsu Fu Chi

2006-11-26T00:45:00.000+08:00

What kind of name is this? Sounds more like the CEO of SGX? Hahaha. Anyway this is a China F&B play and based on the positive sentiments right now, it should get a decent debut.

Looking at the valuation of the company, let’s take a closer look at the numbers. The gross margins are definitely attractive at 35% to 40% but the net margins definitely disappoints at 9%-12%. Synear and Want Want are able to generate better net margins than Hsu Fu Chi. While Synear is now trading at 30x and Want Want is at 17x historical PE. It remains to be seen if Hsu can attract such a valuation.

Based on my 2007F projections EPS of 5.63 cents and a fair value PE multiple of 15x-20x PE, it would indicate a fair value range of 85 cents to 112 cents. In that regard, a maximum pricing of 85 cents will mean that the counter is fairly valued at IPO price. It would definitely be more attractive if the underwriters can priced it below 80 cents (say 75 cents). The negatives about this Company are the rumors that it has failed to list in Hong Kong previously as well as the untested strength of its underwriter, Cazenove. However, the fact that the public float of 10m shares is relative large and that the IPO application period for the public tranche is only open for 5 days meant that the underwriter has already placed out all its 115m placement tranche and is confident that the 10m public tranche would be fully subscribed as well.

Gallant Venture

2006-11-19T23:43:00.000+08:00

I hope to post to my blog more regularly from now onwards and hopefully will help me and my little ninjas in uncovering little gems on the Singapore bourse.

The technical picture of GallantVentures looked rather bullish as it retriggered the parabolic SAR again and it also broke the downsloping resistance line. It has been on an upward trend since its IPO back in June 06. A longer term trader who wants to be in the market at all times will go long now at 95 centsand the 'cut loss' level is around the 86 cents as implied by the Parabolic SAR .

Fundamentally, the stock is not cheap as it trades at 52x 2006F PE. It may not be fair to use PE as a valuation methodology for a 'real estate' stock. Kim Eng gave two target price, 102 (if Lagoi Bay is developed) and 177 (present value of its total land bank and cashflows). I have no comments on the FA of this stock except that it is 'not very cheap' currently. However, if the value of its landbank rises as the island redevelops and attract more investors, that is another story altogether.

Pirates of the Caribbean

2006-11-13T00:47:00.000+08:00

It has been a long time since I last posted on my blog. I have been very busy with the setting up of the Ninja Trading School and amazingly busy travelling due to work in the last 1 month. Anyway, I just post a few of the pictures which i took during a business trip to the Caribbean. You must be saying 'wow' this is a dream job... but frankly travelling on business to such places is 'no joke'. You have to endure > 22 hours of flight, go through the very troublesome customs a few times and then just stay there for 2 nights alone when everyone around you is there on a holiday...

(The view from my hotel balcony. The Caribbean Sea really looks enticing isn't it?)

Frankly I am not a beach person (afterall, we are in Singapore!) but I must admit the sea with its various layered of crystal blue looks really clean and good. I couldn't help but join in the fun as well after all my meetings...

(The picture of a similar catamaran which i am in)

I decided to make the full use of time by taking a cruise to snorkel with the turtles and over some shipwreck. I sighted some flying fish there! It was really amazing to see that fish can 'fly'! The turtles are truly overfed from the daily feeding and snorkeling session as someone will 'lure in' the turtles with fish meat. The Captain warned all male participants to wear their trunks as the turtles will just bite anything that dangles and looks like a fish.

(stopover for lunch near Sandy Lane where Tiger Woods got married!)

We stopover for lunch at a place called Sandy Lane (the whitish building in the background). While it seemed nothing 'spectacular', it costs more than US$1,000 per room per night!!

HL Asia

2006-09-18T20:54:00.000+08:00

Just to do a quick update on the position in HL Asia... The technical picture for HL Asia remains healthy and even though I am just glad it closes at 154 today (on low volume though), I would prefer to see more interest by institutional investors. It would need to break 155 strongly before we can hope to see it near to 160. In the meantime...continue to fall asleep watching this counter....zzzz.zzzz....

AEM Ever Tech

2006-09-18T00:57:00.000+08:00

This is a chart request from my little ninja.

Fundamentally - AEM reported a good set of 1H 06 results and seemed to be the main beneficiary of an upswing in the semiconductor cycle! DBS gives it a 12 month target of 34 cents.
Based on 06F EPS of 4.9 Singapore cents, at 23 cents, it is last trading at a prospective PE of 4.7x (really cheap!) It's also trading below its projected 06 Dec book value of 24.7 cents! Assuming the Semiconductor upswing remains intact, this stock is really "value" for money.

Technically - AEM chart is on a nice uptrend but is entering its short term resistance zone around the 24-25 cents area. In order to see a better technical picture, i zoomed out to the weekly chart. Weekly chart pattern showed a 'shooting star' candle last week with overbought RSI and Stochastic. This may present a short term (1-3 weeks) correction down to the 21-22 cents support which in my opinion presents another opportunity to buy. The uptrend is likely to resume once the short term correction is over. If it breaks the 25 cents resistance, it should head towards the 30 cents mark.

What other says about my school

2006-09-11T01:25:00.000+08:00

It is always good to receive positive feedback from subscribers on my school. These are unsolicited comments which i had received. Personally these little ninjas have taken a leap of faith in joining my school and rest assured, you will be well taken care of because of your little faith. Frankly if you are still hesitating, i don't blame you! It is already so difficult to trust someone whom we have met in real life, it is more difficult to trust a ninja hiding behind a veil!!

Anyway, Lesson 1 has started. Lesson 1 is on choosing the right brokerage firm. I am covering from ground zero upwards. It is like 'reliving' my experience on how I started onto this path of deciding to be a trader all over again.

IMF is coming to town!! Nicoll Highway will be closed to traffic from 10-20 Sep 2006 and i am forced to take a different route to office! Can the government compensate me for the higher ERP charges i have to pay because of this?! hehehe.. Our govt is really very powerful.. even the Channel 5 movie tonight (Charlie's Angel 2) and next Sunday (Matrix Reloaded) got some standard. While Mediacorp will definitely deny it frantically, somehow deep in my heart, i felt that this is also 'pre-arranged' to screen better shows during this period to welcome the IMF delegates. Personally I think some of the security arrangements are really "over-kill" measures like setting up barricades around the monuments... sigh.. what to do?!?! I am sure the "KFC" woman who planned to do a protest on chicken farming would know the powress of our police force.. and some people just never give up isnt it?!

Its a Noble act

2006-09-06T01:18:00.000+08:00

I am almost done with the setting up of my ninja trading school. The response has been most encouraging and the experience of running a school most humbling (in terms of making me realised how IT unsavvy i am). Anyway, i hope i am done with this school admin stuff (no wonder all the MOE teachers i know say they dont mind teaching but the admin stuff is the killer).

Anyway, the basis in which the school is run is on passion and integrity and frankly i was pleasantly surprised by the 'hot' response. Maybe my expectation was not that high but it was a happy problem. The school is being run very openly (like SMU style?) where little ninjas are welcomed and encouraged to ask questions.

Anyway, in the midst of setting up my website, i initiated a trade alert #1 in Noble on 5 Sep. The seller was JPM but luckily, the buying was much more stronger. Anyway here is the update on the position and it appears to be heading towards 120 in the coming days.

Ninja Trading School

2006-09-03T02:01:00.000+08:00

I have finally set up my trading school. There are still many loose ends to tie such as putting in a glossary, writing articles for the school, uploading the research reports. While things seemed to move slowly as i am a "IT-goon", i believe the efficiency will improve once i get the hang of it. So my apologies for not 'sharing' more for the last many many days. Very tired liao, it is already 2.05 am and still seemed like got a lot of things havent done yet. :( Good nite...

STI update

2006-08-31T00:58:00.000+08:00

I must say that STI chart actually looks very bullish based on today's price action and seemed to be heading towards the 2500-2520 levels in the coming days.

While the sentiments on China stocks have been affected by the "Bio-Treat" shock Q4 losses, the STI component stocks like the banks and property counters look quite stable at this juncture and could be looking to be the main beneficiary of money getting out of China stocks. Transparency and accountability have always been the key issues surrounding China stocks and most China stocks are down.

Tech stocks seemed to be getting back in favour with Jurong Tech and MMI being upgraded by analysts. It seemed like Magnecomp might be the next stock to watch out for but this stock will be more suitable for investors who can 'hold' rather than for traders due to the low liquidity.

I have been busy designing my school and i just want to get it over and done with so that i can concentrate on my trading again!! I must say while designing a website is not difficult, the toughest part will be to actually maintain it up-to-date!! :) My school will start on 1 Sep 2006, whether it is completed or not is secondary. hehehe. I will build the walls and put in the chairs piece by piece with the 'support' of my little ninjas. good night.

A time to Cheer?

2006-08-28T00:01:00.000+08:00

Long Cheer reported better than expected earnings for the year ended 30 June 2006. At the EPS of 11.2 cents, it is current trading at 9.4x and based on DBS latest report on 24 Aug 2006, the projected EPS for 2007F is 16.6 cents. That will translate into a prosepective PE of only 6.3x! (if the projections are accurate).

However the short term technical picture presents a less bullish scenario with the appearance of a doji and overbought indicators (Bollinger Bands, Stochastic, MACD). My short term view is that it will correct down towards the 95-97 cents in the coming days (where the first support is in the middle of the long candle on 23 Aug 06). The stock has also reached its technical objective of 106 from the breakout of its neckline at 87.

While the fundamentals over the longer term looks good, it may be a good idea to hold off your purchase if you are thinking of buying at this juncture. My short term 'bearish view' will be negated if 106 was taken out convincingly.

STI update

2006-08-25T00:06:00.000+08:00

As promised, please find the chart on STI updated as of today (I had problem loading it on Tuesday). The parabolic SAR turned bearish today. A close below 2435 will likely see a retest of the 2400 support.

Straits Times Index Update

2006-08-22T12:33:00.000+08:00

As promised, i will do a quick update on STI. Now this is very frustating that i cannot update the STI chart!!! why why why... forcing me to set up my own website?! :( (I will try to load the chart tonight from home).

Now i have to describe in words? I think upside for STI is limited as the parallel uptrend and the 61.8% fibo retracement all ends at 2520. With the bearish engulfing pattern on 21 August and the parabolic tightening coupled with bearish technical indicators like bearish divergence on MACD and overbought stochastic, my view is that the probability of a correction happening on STI is more likely than another upward movement. Once the parabolic SAR (bearish) is triggered, a likely target will be 2400, followed by 2360. <--- now you can appreciate why a picture speaks a thousand words!

Learning to Fish

2006-08-18T17:53:00.000+08:00

This week is an extremely busy week for me (next week also)! Very the sian. Some of you asked me if there are any stocks to buy, but frankly if i cannot watch the market, i usually wont trade. As a result, i missed several trades such as MMI and Advanced Holdings even though i was contemplating entering these trades at one time. "Someone" actually owed me a lunch because Advanced Holdings crossed 40 cents today. hehehe... one free lunch next week. :P

I would encourage everyone to learn how to fish for yourself. I have been learning to fish for the last 6 years and i can assure you that once you acquire the ability to fish for yourself, you have no fear of the market or anyone. Today, in the world where jobs are no longer secured, i know that even if i get retrenched, i wont go hungry because i have acquired the skills to fish from the market.

Learning to fish is a continuous process and the best time to learn how to fish is when you actually dont need to fish. (just like the best time to look for a new job is when you dont need a job). If you are currently working full time, it is actually the best time to learn how to trade. This is because you dont need to 'trade' for a living. Your family dont depend on your trading to have food on the table. You can choose when you want to trade, you can withstand periods of drawdown because you can cover your losses with your salary (provided you dont kill yourself through reckless trading).

My personal experience (roughly) has been loss-making in the initial 1-2 years, breakeven for the next 0.5-1 year and then positive equity curve from the 3rd-4th year onwards. This is my 3rd year of positive returns and frankly i only trade when i am free. Based on my records this year, i only traded actively for 6 out of 8 months and there aren't actually many trades. The return so far has exceeded 20% but i guess this kind of return may not attract you when all the futures/option trading 'seminars' boast of returns exceeding 100%. However, i am happy with my 20% p.a. target. It is a return i can achieve without excessive risk.

The key to learning to fish is to be still in the game 10 years from today. Start small, learn how to trade, why you enter the trade, set up your own 'trading system' that tell you when to enter and when to exit a trade, put in place money management plan and learn about yourself. Trading is like a mirror. The more you trade, the more you will learn about yourself.

According to Dr Alexander Elder who wrote Trading for a Living, there are 3 areas which you need to focus on when you learn how to trade. He called it the 3Ms. Roughtly it means, Money Management, Mental (psychology) , Methodology. These are the 3 aspects which you need to 'train' yourself in when you want to learn how to Fish. Roughly it means:

Methodology - How do you enter/exit trades. What is your trading system. Devise a trading system that suits you. Set up a trading system that will let you enter a trade during quiet period and exit a trade during hot period.

Mental - How you handle winnings and losses. Do you have the mental strength to stomach drawndown? How to you pysche your brain so that you can perform consistently, able to handle losses and winnings, make money consistently. You can learn all you want about methodology and be well-versed in all the 'chart patterns' BUT if you cannot handle the mental aspect of trading well, (e.g. how you handle your attitude towards wins and losses), you can never be in the right frame of mind to trade. That is why some traders can trade well on paper but when you put him to trade 'live', he cannot do it because he is unable to overcome his mental barriers. Some people just cannot 'cut loss' because cutting loss is like admitting you have lost. If you are unable to overcome that 'cut loss' barrier, you can never be a trader.

Money Management - Do you have a money management plan when you initiate a trade? Money management is like 'knowing when to stop when you are wrong'. If you enter a trade and the market tells you that this is a mistake, your money management plan will force you to 'cut' that position before it spiral out of control. Before i enter any trade, i already know how much i will lose. The key to money management is to make the cut loss 'bearable'. How do you know what is a 'bearable' cut loss. That means if you cut loss of $x amount today and you can still sleep very well, this means it is within a bearable level. If you cant sleep if you lose that $x amount, means it is beyond your tolerance level. The trick is to keep it to 1-2% of your trading equity. I used to have a cut loss level of $500, but i have since shifted that to $1k-$2k.

If you ask me to rank the importance of the 3Ms, i will rank them in the following order: (1) Money Management, (2) Mental Management and (3) Methodology. Methodology is ranked the lowest because it is a skill which anyone can learn (even the hard core Fundamentalist know something about Technical Analysis) but (1) and (2) is something which the pure FA finds it hard to accept. Pure FAs find it very difficult to accept that they are wrong in their analysis, so they are unwilling to put in place a money management plan and as a result, they can never acquire the mindset of a trader.

Happy Fishing.

Its not a Bright World after all!

2006-08-15T11:32:00.000+08:00

Nothing can describe the digust with myself with my trade in Bright World (I will spare you what i think about its management). I entered the trade yesterday morning and cut at pre-open this morning. While my equity account is still positive for the month of August, i was actually very angry with myself for this stupid trade. Usually i avoid holding a stock for its result announcement unless i am very sure it will exceed the expectations. I pulled the trigger in Bright World for the following reasons:

My good friend visited the Company in June in China and gave me a glowing report on the management and company's operations for Q2. His view is that the company will likely exceed the expectations of the analysts.
Most analysts painted a rosy picture (DBSV and OCBC).

What came out was beyond expectation (you can see the company keep its emphasis on 1st half result and not the Q2 result). The results for Q2 was totally unexpected. The top line hardly met 50% of the analysts forecast (downward revision soon?) and the bottom line for Q2 sucks!!

Last night i already know i would need to 'cut' this morning.... and here i go, cut cut cut. :( No hesitation no second thoughts...

思念Thinking of You?

2006-08-14T23:49:00.000+08:00

Synear is one of the better IPOs that come along the way... just apply at the ATM and hope you will get it. This should be easier to get compare to getting 4 out of 6 numbers at Toto. My 'conservative' fair value peg it to about 71 cents even though the peers are trading at higher multiples.

Is it safe to Venture?

2006-08-12T00:46:00.000+08:00

If you are thinking of jumping into Venture at this moment, it may be advisable to wait for a pullback to the $10.80-$11 mark. The $12 resistance level is where the previous support level is and will be a formidable resistance in the short term. You can see that the doji on 10 August fails to close above that $12 level as well. The doji coupled with overbought indicators may indicate possible short term correction. If it can cross the $12 barrier, it will enter into a strong resistance zone where the next target is at $13.

Venture was a good stock in the past (where price >S$20 in the past) but as it grow bigger, it had difficulty showing the kind of growth which investors have been accustomed to. That is why it faced selling pressures for the last 2.5 years since Jan 2004. Now it is trying to seeks new area of growth through acquistions and has bought into DMX and it is now trying to acquire GES.

Straits Times Index

2006-08-07T23:11:00.000+08:00

STI showed a doji today. (yesterday was a close hanging man). I shorted SIMSCI again during the closing time. Although technically you need a confirmation the day after a doji to show 'reversal', i think a correction is on hand for a variety of reasons.

Holiday mood ? (Traders dont want to take a position as Wed is a public holiday)
Uninspiring corporate results ? (Quite a few companies reported 'below expectations' results, such as China Sky, Advanced Holdings, STX... to name a few).
Technical weakness ? (STI near to resistance zone at 2450-2500 and charts indicate weakness in bearish divergence and overbought).

My view is that a possible correction down towards 2420 to 2430 region is on hand in the coming days. A close below 2400-2415 zone would be extremely bearish.

National Day Rally?

2006-08-07T13:58:00.000+08:00

Will there be a National Day Rally?
This was an excerpt from OCBC's report today.

In another two days’ time, Singapore celebrates its 41st National Day. Is there going to be a National Day rally? Traditionally, most market players will be looking forward to a rally in the run-up to National Day, but unfortunately, it is rare if historical information is anything to go by.
We have tracked statistics over the past few years and found that since 1990, the market not only failed to stage a rally but in most cases, the benchmark Straits Times Index (STI) actually headed lower. In 12 out of the past 16 years, the STI actually eased down up to a month before the actual National Day. Post-National Day, the market typically opened lower the following day in 12 out of the past 16 National Days.

Why the fairly lacklustre performance? This could be due to several reasons, with one being that most investors use this period to take short regional vacation breaks. More importantly, the event to watch is the National Day Rally speech, which is the highlight in the month of August.Typically, this takes place about 2-3 weeks after National Day and provides insight into the government's direction for the local economy. Depending on the speech, this could bring some cheer to the local bourse, although not to the same extent as the Singapore Budget in terms of corporate incentives and measures.

Increasing, from the US side, we are also seeing signs that the US Federal Reserve has reached the end of its rate hikes. Is the US Fed finally taking a break after two consecutive years of interest rate hikes? Based on recent comments from policy makers, they are signalling that the US economy is slowing, and economists are now not expecting another 25bps hike at the next meeting scheduled for 8 Aug 2006. Based on the latest Bloomberg survey, about 56% of the economists polled are expecting rate to stay at the same level versus about 62% expecting another quarter-percentage point hike in rate to 5.5% in the early July 2006 survey. While a stay in rate hike is positive, a large part has already been priced in.

Traditionally, high interest rate tends to draw interest away from equities. Currently, the STI stocks are offering an average yield of only 3.6%. Previously, when interest rates were low, stocks were attractive for both potential capital gains as well as higher dividends versus deposit rates. In addition, high interest rates also led to higher borrowing costs.For companies that are highly geared or have high capital expenditures in the past few years that were funded by borrowings, higher interest expenses could dent profitability. One key area of concern is the impact of high interest rates on corporate earnings. Even with a pause in US Fed Fund rate, local interest rates have already moved up drastically in the past two years and together with higher oil prices, are factors that could potentially dent corporate earnings, especially for the SMEs.
Recently, we saw concern over high interest rate taking the shine off local property stocks. Singapore listed property stocks have done remarkably well these past few years with stellar multi-year gains. The SES Properties Index gained 38% in 2003, 18% in 2004, 39% in 2005 and at the recent peak this year was up 29%. Since hitting the high in May 2006, property stock prices have tumbled and the index is now up only 12% for the year.Nevertheless, it is still a remarkable 4-year uptrend for the property sector.

However, one trend worth noting is that since May and together with the most recent round of rate hike, property stocks also took the biggest hit, down about 18% from the high. In a high interest rate environment, property stocks are vulnerable as mortgage rates move higher and we are already seeing the early signs of this being reflected in lower property stock and REIT prices.

Besides property, other segments of the Singapore equity market are less affected. Oil-related companies have seen robust orders in the past 18 months and this more than mitigate the impact from high interest rates and these companies are still poised to enjoy strong corporate earnings growth.Banking stocks have benefited from growing Asian economies and are still seeing healthy loan demand. The surge in 3-month interbank rate is also likely to be positive for banks, especially DBS with its large deposit base. Banks are also growing non-interest income from other fee-based activities. We believe that the big-cap stocks are fairly cash-rich and less affected in a high interest rate environment. (Carmen Lee)

To market to market to buy a fat pig?

2006-08-06T23:57:00.000+08:00

Hi master,
i have a question regarding pfood's recent action .... volume has been high but price has not moved and in fact, kind of languishing ...... is this a sign of accumulation or distribution? what is your take? i suppose it's difficult to determine , but appreciate your views.
thanks,
chocofles

Last Thursday, OCBC technical chartist issued a trading buy call below S$1 before market opens. The price gapped up strongly at $1.03 in the morning but amazingly (or shockingly if you are holding the shares), the share price closed very weakly at 1.01. Looking at the large volume of 11m shares traded, i would view it as a bearish sign and the price chart looks weak to me. I would place the resistance at 1.05 and the support at 95.

Despite its cheap valuation based on historical results, I tend to side with the bears for now. One of my concern is the declining margins due to weak prices for hogs. The Q2 results that will be announced might present a clearer picture. However, Pfood's investment in Pine Agri is doing so well, so that might help to support Pfood. A break above 1.05 will head towards 1.10 while a close below 99 cents will mean a good chance that the 95 support will likely be tested again.

Ninja Portfolio Update

2006-08-03T17:17:00.000+08:00

I closed off all my positions today. I sold Landwind at 50, Pacific Andes at 72 and Luzhou at 77. I guess not that bad for a 3 days work but it could have been better if i had stuck to my trading plan. I wanted to sell first thing this morning but decided to wait and see if there is follow-up buying following US positive close last night. The exact profit amount is S$2,302.45

I am angry with myself for missing the trades on China Fishery, Hyflux and possibly LMA..... Back to 100% cash again. S$102,302.45

I havent got a time to pen down my thoughts on my subscription plan yet. 24 hours is really not enough for me...

Fly like the Wind

2006-08-02T18:39:00.000+08:00

I bought Landwind at 47 before market close yesterday. Some of you who have followed me in at 47 cents already exited at 50 cents today. I present 2 possible target prices depending on your time-frame. Enjoy the flight.

This is a nice braised porridge

2006-08-02T09:53:00.000+08:00

I initiated a buy in Luzhou (泸州）儒粥 yesterday at about 735 cents. Some of you must have got it as well. Anyway, the chart and the 'target price' is here for your reference. I cant remember which house covered this and the target price. Caution: The 84 cents target price is for reference only because i usually get out way before it reach there.

China Milk - I sold my China Milk at 97 today. Too many China stocks now.

Landwind - Initiate a buy at 47 yesterday. Still look okay to me. Need to break 48.5 to run.

Pacific Andes - I am playing the likely good results announcement ? Frankly dont know why i buy this. I had bad experiences playing this one. hehehe.

Today is a new beginning!

2006-08-01T12:38:00.000+08:00

Today is a new beginning! :) I got this feeling that many stocks will run liao! National Day Rally?

Anyway, i bought China Milk at 92, Luzhou at 735, Pacific Andes at 69. Will tell you if i add any more.

STI - Who to believe?

2006-07-31T12:22:00.000+08:00

Today is a very interesting day. OCBC chartist Ritesh Menon issued a bearish "SELL SELL SELL" call on Wave 3 correction STI and at the same time, K Ajith from UOB issued a "BUY" triangular breakout target 2520. hahaha. Who to believe?

This morning, i thought Ajith was right by lunchtime, i thought Menon's view is also not totally illogical. A look at the charts of UOB, DBS and OCBC also present conflicting signs. UOB looks bullish, DBS looks toppish and OCBC looks range bound. Urggh....

My favourite rule is "when in doubt stay out"... as mentioned in my earlier postings, this period is not easy to trade. It will be a good market for the nimble traders.

With regards to my view, i will take no position as to who is right (since market is always right) but watch the 2400 support and 2450 resistance closely. A break above 2450 will head towards the 2580 level while a break below 2400 will mean that the support at 2280 is under threat again. Take care as even the signals are mixed. I guess this reflects somewhat the minds of many people now.

United Overseas Bank

2006-07-27T00:49:00.000+08:00

UOB will announce its results on for 2Q 06 on 1st August. While I had been bearish on STI, UOB is giving me some 'second thoughts' on whether i should be bearish. From the Fundamental perspective, most analysts are giving it buy rating with a median price target of about S$17.83.
UOB has surprised on the 'upside' for the last 2 quarters, it remained to be seen if it can continue to do so for Q2.

Technically, the chart looks like it is ready for a run up to the mark 'X' ~ S$16.50 on the chart above. The parabolic SAR has turned bullish coupled with MACD crossover seemed to strengthen the bullish bias with a very strong support at $14.80. Lets see how the 'story' pans out over the next few days! :)

Havent start a position yet...zzz..zzz...

2006-07-25T15:43:00.000+08:00

Some of you asked if i have taken a position in China Essence. My answer is Nope. I would have alerted you via email if I had taken any positions. I posted what i thought was a nice chart for China Essence. My Ninja Trading Fund still stands at S$100,000. I am not in the mood to trade yet as i still dont see any attractive set ups which compels me to trade. :) Better concentrate on my work first. hehehe

This is one hot potato

2006-07-25T00:23:00.000+08:00

There are many reasons why i am still bullish on China economy and the stocks in there but i will not discuss them here today. I am going to show you one hot potato in the market right now ~ China Essence.

Fundamentally, i would peg its value at about 10x March FY07PE, which is around 79 cents based on a EPS estimate of 7.92 Singapore cents.

Technically, it looks like it is heading towards the 52 week high of 74 cents in the coming weeks. If it can break that 74 cents level, the minum target will be close to 98 cents (12x FY07 EPS).

STI Update

2006-07-21T11:08:00.000+08:00

My view of STI remained unchanged. I think there should be a final leg down that will break 2,280. However, it is really tough to 'trade' these days. You can see so many 'gap ups' and 'gap downs' these days.

One of my brokers was just commenting that her clients were relative quiet except for the buy-and-hold types who called in to make orders during the June-July period. One of the regular traders bought China Sky at 108, cut at 90 only to see it creep back to 100 yesterday. This period will be relatively volatile, i am sure the headlines, geopolitical tensions and interest rate hikes to continue, oil cross US$80 again, ABC reports lower than expected profits, etc will continue to spooke the market.

A good thing about me is that i dont have the time or the energy to trade everyday, so i tend to swing trade more often than not. I dont see any interesting trade set ups yet. If i think there is a sustained upswing, i will 'alert' again. Actually hor, come to think of it, i alerted you to get in on 15th June and alerted you to run on 12th July... hmmm... not bad lah hor...kekeke... take care ah.

Chief Financial Officer

2006-07-21T00:42:00.000+08:00

I just came back from Shanghai last weekend and i met my university classmate there. She has been there for 4 years already and has actually settled down with an ang moh and had a 7 month old daughter. She is running her own firm there in JV with a listed company. I guess being the daughter of the boss of a listed company in Singapore does help a lot in terms of capital, networking and business... hmmm... why didnt i 'chase' her during my uni days ah? (joking lah). She is still very pretty after giving birth to a kid. (*wake up wake up)...

Anyway, China never failed to amaze me in terms of its development. Shanghai is foreever changing. They used to have 1 crossing over the bund, now they have 4. China is where the action and $$$ is right now, everything is so vibrant there. There are so many funds chasing after companies for investments right now. We are talking about billions and billions of dollars here. If you want to earn a lot of $, go to China. If you want to have a safe and peaceful environment, stay in Singapore. It never fails to amuse me that so many of us want to get into China but so many of them (all the pei du mamas) all want to get out of China!!

I had 2 body and 3 foot massages 3 days in a row. In case you start to think crookedly, it is the ultra-clean type but the ladies are definitely younger than the peidu mamas here and errr... there are no sleeaze or curtains hanging here and there. kekeke, whoever says you can't do massage without curtains?!!?. One foot massage for 60 mins cost RMB 75 and one body massage costs RMB 95. Si beh cheap hor!!

I received a call from a friend today. He is looking for a CFO for a China company trying to list on Singapore.

Friend: You got friends interested to be CFO or not?
Me: Why you never ask me if i interested ah?! :P
Friend: You got CPA or not?
Me: wow pian, CPA, CFA, all have.
Friend: You sure you want or not. If you want, i can arrange a few interviews for you now.
Me: How's the pay like ah?
Friend: See how 'dirty' the company is and how skilful you are in negotiating lah. Some get success fees of $200k-$500k when company is listed plus a decent monthly salary
Me: okay, see how lah

hmmm... next time you see a CFO of a listed company, could be me man!! :P better go update my CV now..... zzzz...zzz...zzz....

The Couch Potato Portfolio

2006-07-19T00:50:00.000+08:00

I am in the midst of planning for my retirement and i will share whatever knowledge i pick up with you here. I will share the Couch Potato Portfolio today.

Scott Burns launched the Couch Potato Portfolio (US-centric) in 1991. The portfolio is a perfect candidate for the laziest portfolio. Before Scott introduced this portfolio, he back-tested the data from 1973 to 1991. It performed an incredible 10.29% average annual return for that 18 year period. The result is incredible considering the 1982 bear market and the black monday crash of 1987. The Couch Potato achieved this extraordinary results with:

No complicated accounts.
No diligent reading of the financial newspaper
No phone calls to brokers for "opportunities"
No meeting with investment advisers
Simple tax returns

To create a couch potato portfolio, you need only 2 funds in a 50-50 asset allocation. This mix will see you through all situations.

50% Vanguard 500 Index (i.e. S&P500 no-load fund) The Fund's expense ratio is only 0.18 (versus actively managed fund of at least 1.5). <---- Currently only Lion Capital offers a similar Infinity US500 fund but the expense ratio is higher at 0.97.
50% Vanguard Total Bond Market Index Fund. This fund matches the performance of Lehman Brothers Aggregate Bond Index and has an expense ratio of 0.22. <--- Havent found a similar fund in Singapore yet. If you can find a similar one with such low expense ratio, please share with me.

The portfolio is rebalanced every year (takes only about 10 minutes) to ensure the 50-50 ratio in terms of value stays. No brokers or investment advisers will recommend you index funds but even Warren Buffet advises that most investors are better off putting money in index funds with low management fees than with the hyped up fund managers that charged high management fees. The returns over time from index funds outperformed most actively managed funds.

I am contemplating starting a regular savings plan (say S$1,000 per month) into a no loads index funds (still trying to find a suitable one in Singapore) but the only choice i have right now is the S&P500 offered by Lion Capital mentioned above. I may be forced to wire my funds to my US brokerage account to search for a suitable no-loads index fund by Vanguard. Anyway, i will keep you posted. If you have any experience in this, do share with me. There are many things which i will share later (e.g. SRS Account, using CPFIS etc). If you have already gone through all these hassle, please share them with me. :)

Regards,
NT

Ninja Trading School

2006-07-18T13:28:00.000+08:00

A picture just for creating a link.

A quick update on STI

2006-07-18T12:19:00.000+08:00

Just to do a quick update on STI.

STI is doing a technical rebound and the rebound should be capped at around 2400 for the short term. The support is at 2380 and the resistance is at 2420. I think many counters are looking like STI at this moment (i.e. technical rebound). Do be nimble if you are trading this counter-trend.

Regards,
NT

STI heading towards 2220?

2006-07-17T09:43:00.000+08:00

At this juncture, I think STI will likely test the previous low of 2280 support and if that level breaks, it will head towards the 2200 level. I will side with the bears for now. Stay out of the market if you are not the nimble and disciplined kind as the market place will likely be volatile.

Today i heard the most interesting headline again after missing it for a very long time. Geopolitical tensions. I have not heard this word for a very long time already!! Tensions in Middle East and North Korea, Oil prices at record levels, Poor Corporate Results, phwee... what a load of trouble.

I am back at my usual self. I have shown via live trades from 1 Jan 2006 to May 2006 on how to trade a $100,000 portfolio. The return during this 5 month period was more than 20%, but anyway, i will restart this portfolio again. Stay tuned for more actions :)

Cheers,
NT

Water as an Investment Theme

2006-07-06T14:23:00.000+08:00

You may find the article from Finance Asia interesting. The topic is on Water as an investment theme. There are actually quite a number of 'water-themed' companies listed on SGX and the majority are from China*:

Asia Environment*
Asia Water*
Bio-Treat*
Darco*
Dayen*
Eco Water
Hyflux
Pan Asian Water
Sinomen*

I think the demand for clean water in China will be very great. Basically, the lakes and ponds there are highly polluted and much need to be done to clean up the water eco-system. I remember visiting the Dianchi lake in Kun Ming in June 04, the so-called lake is so greenish in colour that the locals told me no one dare to swim or eat anything from the lake (provided they can catch any fish inside). You can see from yourself how dirty DianChi is...

The Millionaire in You

2006-07-05T22:24:00.000+08:00

I am back in business. I hope this will be my permanent blog for me. I was suprised to be able to get back my blog address - www.ninjatrader.blogspot.com back. It was previously unavailable! So to celebrate me getting back my favourite address, i deleted all my old blogs to start afresh (which is my intention to start afresh anyway).

Besides the World Cup, there are many interesting events that happen to my life. I borrowed the following book from the library and found it to be a very inspiring book. It really sets me thinking about my retirement plan. If you are free, perhaps you should borrow it from the library as well. I paste a picture of the book here in case you dont know what book i am talking about.

This book really set me into thinking about my retirement plan (or the lack of it). Anyway, here is the book review by Amazon. While the bad news is that i dont have a concrete retirement plan, the good news is that i am debt free. I guess i would have to build on this status for my retirement plan. Anyway, go read the book, i am sure you will enjoy it and benefit from it. The book actually made me borrowed 8 more books about retirement planning. I am actually drafting out my retirement plan. I believe it is what you do outside the office hours that will determine if you can 'retire' early or not.

Anyway, part of my retirement plan includes setting up a website. Originally i wanted to set up a free Ninja Trading School and for Google to pay for my charting expenses (monthly about S$250 each month for both futures and stock charting) but after my bad experience with Google, i guess that is not a viable option. Another option will be to get people to donate to my blog via paypal, i think that option is even more unlikely!! My last option is to charge a low subscription fee for giving live email alerts and show members how I trade a real portfolio live just to help cover my cost but i dont think that will make me rich. :P

Anyway, i will update this blog on a daily basis. Do bookmark your browser.

Happy Retirement Planning.