Responsibility

The internet, full of its trolls, memes, too much self-hate, too much self-love, throws up a gem once in a while.

This is a story about four people named Everybody, Somebody, Anybody and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that, because it was Everybody's job. Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn't do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.
- That's Not My Job

Came across this from a forum post. No reason to credit the poster since he or she did not credit the originator, nor was it original.
Dug around a little and found that it's a condensed version of a poem written by Charles Osgood (Wiki). Sharing and remembering to tell myself this.

“The Responsibility Poem”

There was a most important job that needed to be done,
And no reason not to do it, there was absolutely none.
But in vital matters such as this, the thing you have to ask
Is who exactly will it be who’ll carry out the task?

Anybody could have told you that Everybody knew
That this was something Somebody would surely have to do.
Nobody was unwilling; Anybody had the ability.
But Nobody believed that it was their responsibility.

It seemed to be a job that Anybody could have done,
If Anybody thought he was supposed to be the one.
But since Everybody recognized that Anybody could,
Everybody took for granted that Somebody would.

But Nobody told Anybody that we are aware of,
That he would be in charge of seeing it was taken care of.
And Nobody took it on himself to follow through,
And do what Everybody thought that Somebody would do.

When what Everybody needed so did not get done at all,
Everybody was complaining that Somebody dropped the ball.
Anybody then could see it was an awful crying shame,
And Everybody looked around for Somebody to blame.

Somebody should have done the job
And Everybody should have,
But in the end Nobody did
What Anybody could have.

The M1 Disconnect

Back in October 2016, i watch this stock fall together with the sector in what was a fairly lackluster year for equities. I thought to myself, it's pretty significant off the highs, i am going to take a pessimistic estimate of its earnings, and then find an entry that will make me feel comfortable.

That entry came and i took up a position in M1. News of fourth Telco were fairly widespread then and coupled with some political uncertainties around the world, were some of the reasons thrown out for its decline.

It was a few days before they announced their results so i did some calculations on whatever latest results they had and took my own estimations of the fall in Earnings and therefore yield. Telcos have had a good run since 2010 together with the population boom and has became a fairly stable and good yielding defensive stock.

Stable in the sense that the price doesn't fluctuate much and the yields are fairly high. Considering that their revenue are pretty steady due to many of us being tied to contracts, it is not unreasonable to call it defensive and describe it that way.

Having said that, i entered expecting that the next 12 months dividend should come up to around 12c.
Now that their 2nd quarter results are out, and i have held it almost to full 12 months, i am pretty disappointed to see that even my estimates were too optimistic. Actual dividend comes up to only 11.1c and you can kind of extrapolate that the rest of the figures are not healthy.

The price has since fell big time after this recent earnings announcement. While i strongly advocate proper money management of cut loss, i am still holding it. I hate to admit it but i think i do still suffer from loss aversion. There are some positive stories that i am still hoping to play out so that is keeping me in.

Maybe not so much a disconnect per se, but more like a lag in bandwidth.

As of this post, the price has not fell enough for me to consider adding more stakes. I did not take a big position (relative to full portfolio) so i have some room to add. Management has since warned that Full Year net profit will be lower than last year and i am going to estimate that the next half year will see a poorer showing in percentage wise than the first half.

Lessons learn here are that i need to consider more factors in my estimation. Clearly the fourth telco is known, and the threat should probably worth more than i gave it credit for.

The Salted Fishes in My Freezer

I won't have noticed how fast time passed if not for the fact that the last post was already a month ago. I really need to pen more content than i am currently doing.

Since this is the new month, new half of the year, I want to start talking about my portfolio which till now hasn't been revealed. Fun Fact: There's more days from July to December than Jan to June so its actually closer to half today than on the last day of June.

But before going to the portfolio, i just like to share about this two salted fishes that are sitting in my financial freezer. I define them as the duds that i have failed to cut loss on,, which i really should. They are unlikely to make it back to the price i entered but hey, i'm like you, i'm still there waiting for one day when it happens. The returns will be shit of course but whatever, 咸鱼翻身 (google translate) you know. 

Image from: Retail News Asia

Salted Fish #1

Construction counter. Entered in its heyday when there were good news about a potential exciting overseas venture. I was still new to the market and the knowledge of the market pricing in all the "maybe" information has not dawned upon me yet. Then, a string of bad news happened to the firm. Talk about when it rains, it pours. Cut loss was a theoretical know-how at that time as well. So nope, did not cut when i could. At one point, i was at 80% loss. 

Salted fish is still in the freezer and it always reminds me of the mistakes i made in the past. Looking on the bright side, it taught me cut-loss, efficient market pricing and even a share consolidation exercise. I might have also made another further mistake by averaging down not so long ago during a rights issue. Though it hasn't fall much lower than that price ever since. 

There's still a tinge of hope (which is bad). But honestly, that is the end of adding to this salted fish.

Salted Fish #2

When i entered, it was a shell investment holding company. Hyped by the stakes taken by a very prominent broker in Singapore taking it on an RTO exercise, it was marketed to be a play on the future of the real estate it then owns just across the straits to the north. As i watched it move, the classic FOMO (Fear of Missing Out) stirred within me. Of course, being human and also extremely new, i succumbed to it. Guess what, i succumbed on the very last retrace which turned out to be the exact downfall. Talk about fear of missing out on catching falling knives. Two lessons in one go, how lucky was I.

This was a good story because the very next day after i entered, a brokerage even called for a trading curb on this counter. Guess what, it was the sole brokerage that i was using. This might have exacerbated the fall for all i know. But there was I, panicking due to the fall and having no means to dump it other than calling my broker. Couldn't contact him and had to be put through to a colleague to give instructions to dump it. 

So why is it still in the freezer? 

I did not dump all the shares i had purchased. I left the last one lot (at that time) so that i could remember this event. That is stupid because i doubt i would have forget given the kind of emotions i was feeling at that time. Anyway, there were warrants that were given for free and i got myself into some kind of unwarranted mess (pun). 

Got forced to learn what warrants were and how it worked. There were occasions where i thought about selling the free warrants which i really should but they have since lapsed and expired. There is no point in exercising because the mother share was cheaper than the exercise price. 

By now, it should be fairly obvious what counter this is. Including the contra loss, i am at 90% loss. And it is so cheap now that it might not even pay for brokerage if i sold. There is really zero hope in this guy recovering to break even but i am including it in my portfolio returns because this is what it is. 

Summary

I made mistakes before, and they cost me quite a sum of money at that time. This two counters took out about 5% in my XIRR over 3 years because a lot of it was committed in the early years. I have obviously paid my school fees and learned my lessons as the new counters are doing much better.

They are still in the freezer as unfortunate reminders. What are some of your salted fish?

Mum's Advice that Works For Investing Too

There are some wisdom and advice that your parents told you when you were a kid.

Don't trust strangers easily
Don't receive candy from people you don't know
Don't open the door or you'll be snatched

They served us well when we were young. There's one that will continue to be valuable advice even in the world of investing.


SGX My Gateway

People often wonder where to get news; where to get more information and do this so-called homework or due diligence.

One place that i can recommend is here.

SGX My Gateway

I don't work for them, nor do they need my miserable marketing but it has some value.

Subscribing to them gives an Economic Calendar of major data releases expected in the coming week. This mailer typically comes on a Friday with a look ahead on Earnings report by SGX listed companies and also some major government or financial institutions upcoming reports.

Now, they also give a weekly investment update on various topics including market and sector reports and highlights. Most are good to know data and some of the updates do teach important investing concepts to newbies.

On 30th May, they released an update on the performance of STI 3 Year Dollar Cost Average Returns. If you're interested, you can look it up.

It seems like a very good returns percentage to report. Especially when STI isn't exactly high at the moment. It even shares about using IRR (Internal Rate of Return) vs ROI (Return on Investment) and their differences. This is good because it teaches about measuring investment performances.

But there is something wrong about the way some numbers were presented. Some numbers that probably need not be part of the article and is slightly flawed in thinking.

What is the problem? 

In the last paragraph, it compared the returns of the Top 5 performing STI constituent stocks with the Bottom 5. While i don't doubt that the numbers are correct, and i haven't bother to verify, i am pretty certain they forgot that SATS was not even in STI 3 years ago.

STI components are reviewed twice a year. So in that 3 years, at least 6 reviews have taken place which may or may not lead to a change. And typically, each change involves up to 3 component stocks. They are reviewed according to a set of criteria. Clearly, the comparison of top 5 vs bottom 5 is meaningless because bottom 5 often gets replaced with better performing components.

Now, the maths will still likely give you the return they declared since it is based on month end closing price of STI ETF. But doing that analysis into component level does no good to the article and exposes them on this systemic flaw of their analysis.

Your mom told you not to trust strangers. I think it's good you verify everything even if they're from trusted source. Including your favourite financial bloggers or your investing buddy next to you.

Bitcoin Bubble Blitz

If you had Bitcoins starting 1st Jan 2017, you would have almost tripled the worth of your Bitcoins as of today.

This should be the best performing asset so far, coming from around 1000 USD per Bitcoin to a intraday high of 2780 USD per Bitcoin last week. Having read through some of the asset bubbles in history, this blitzy rise seems like a bubble in the making. Now that it is appearing in the news so much, i went to read up a bit more about it.

The technology is Blockchain and the currency is Bitcoin. Blockchain is a decentralized database, which in this case is like a ledger. Similar to traditional accounting, transactions go into the ledger (blockchain) as blocks which needs to be verified by nodes. Miners are special nodes that works on a kind of mathematical problem which sets the transactions into a block that becomes part of the chain. They then get some Bitcoins for their Proof of Work.

I may have gotten some details wrong, but that's pretty close to what Bitcoin really is.

There are also alternative cryptocurrency and platforms available which adopts blockchain technology such as Ether and Litecoin. All of them have seen impressive rise together with Bitcoin. And the rise could be explained by several regulatory reasons in Japan and China.

But when you have assets that increases in valuation in this manner, there are bound to be herhistory have shown how it is likely to end. Now, Bitcoin might see more positive regulation and structural changes to become more mainstream. So is this still early in the bubble? 

Sit around with me and watch this drama unfold.

Check this Investopedia page out for quick highlights of historical asset bubbles.