Poor Learn Rich (穷小子日记) has reached 10,000 views!!

穷小子日记 has reached 10,000 views. 穷小子 started his blog on 25 Apr, so it took exactly about 2 months to hit 10,000 views.
This is much thanks to thefinance.sg and sginvestbloggers for sharing 穷小子日记 for the past 2 months.

OCBC Scrip Dividend Scheme holds the highest of views record so far. Of course, the next will be Standard Chartered trading: No "No Minimum Commission" which is recommended by dollarsandsense.sg and this was subsequently shared by sg.finance.yahoo.com as well.

What an experience during past 2 months. All in all, thanks all the viewers for the support.
穷小子 will continue to share his investment experiences and observance.

Poor Learn Rich (穷小子日记)

One Up on Wall Street By Peter Lynch

穷小子 has finished the book early of this year. For those who have not heard of him, he is one of the greatest investors of all time. When Peter Lynch is the manager of the Magellan Fund at Fidelity Investments, he averaged a 29.2% annual return, consistently more than doubling the S&P 500 market index and making it the best performing mutual fund in the world. The assets under management increased from $18 million to $14 billion during his tenure. Lynch is consistently described as a "legend" by the financial media for his performance record, and was called legendary" by Jason Zweig in his 2003 update of Benjamin Graham's book, The Intelligent Investor. More of this bios can be read here.

Why is 穷小子 recommends this book? Reason is simple, because it is easy to understand. 穷小子 does not have much of finance background to begin with. If he can understands it, and so can you. Main take away from this book for 穷小子 is that, observe the environment, observe on what is happening in your surroundings. The next most "in" stock may just be around the corner in your neighbourhood.
Starbucks is one of the good examples to relate in this. Every where and every when 穷小子 goes, Starbucks seems to be full house forever, or almost as to say. This has always been much on the scene we had seen when the first Starbucks store came to Singapore in 1996.

How does Starbucks performed throughout all these year?
A simple answer tells it all. If one had bought 1,000 during its IPO in 1992, the value is estimated to be at $302,048 after its sixth splits in 2015. On a side track, an interesting calculator from Starbucks website for all these calculations to share.

穷小子 is not suggesting that Starbucks will be around here forever, but it is a good example to illustrate at least until today. 

Of course, not forgetting the six types of stocks which Peter Lynch had identified.

1) The Slow Growers
2) The Stalwarts
3) The Fast Growers
4) The Cyclicals
5) Turnarounds
6) The Asset Plays

Bottom line is that 穷小子 is not suggesting that Peter lynch is not good in his financial analysis, and hence his stock pick is by observing only. Of course much is still needs to be done after that. By observing is just the first step to identify a rare gem.
This method is useful and applies significantly to 穷小子. He doesn't not has much of financial fundamentals in it, observing the surroundings may just be a good start for him, and together with his basic-reading skills in financial reports reading.

Few of his famous quotes:

• "Invest in what you know and why you own it."
• "Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it."
• "If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them."
• "Investing without research is like playing stud poker and never looking at the cards."
• "Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they're going to be higher or lower in two to three years, you might as well flip a coin to decide."
• "If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes."
• "There's no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or worse, to buy more of it when the fundamentals are deteriorating."

Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it

OCBC scrip dividend received today

This is a review post about OCBC Scrip dividend Scheme.
100 of OCBC shares from the payment of Scrip dividend was credited to 穷小子's CDP account today. Including this, it would be the third time 穷小子 had opted for Scrip Dividend Scheme.
The decision made in May to opt for shares has been right so far.

To recap, the scrip dividend price is $8.11, the price which is after the 10% discount from the determined price at $9.01.

Dividend Announced	$0.18 per share
Cash dividend value	$810.18
Amount of shares received via Scrip Dividend	100
Determined Price for Scrip Dividend (after 10% discount)	$8.11
Scrip Dividend Price as of 28 Apr 2016	$811.00
Last Closed Price	$8.45
Scrip Dividend Price as of today	$845.00

For anyone who needs the events timeline information

If 穷小子 have opted for Cash dividend instead, he would have received $810.18 only, rather than the value of $845.00 today. Although it seems to be a difference of $34.82 only, it is actually an additional of 4.29%.

Moreover, this 100 of OCBC shares will be included in the formula for computing the next scrip dividend which usually falls on August, about two months from now on. Let it Grow! Let it Grow!

The power of Scrip dividend and Compounding effects.

 

Sold off Noble after 5 years.. Finally!!

Sold off my Noble after holding for more than 5 years.. Finally!! Have mentioned before that this is one of the few major bad decisions which were made so far. Well, the price which I bought was at $2.16 to be exact, with 3000 shares. In another words, I just write off a huge 88% loss, more than $5,000 from my portfolio today. This post shall and must be parked under "Mistakes" category to remind myself about it. It is really an expensive and painful mistake indeed.

Made a series of bad decision in this actually:

Honestly, to begin with, I can't even remember why this was bought in the first place. Based on Yahoo finance, $2.16 is very near the all-time high of $2.51, which was somewhere around 2008.
Didn't read any of its financial reports at that point of time. It was bought purely with guts feel, speculations and gambling style. Another minor factor is I don't wish to miss the price, afraid that it may goes higher.
Speculates and gamble. Impatient.

When the price began to drop to a low of $1.05 by the end of 2011, a naive decision was made. Can't remember much clearly again, but the decision to hold onto it was much based on the price movement. Since it came down from a high of $2.84(est.) to a low of $0.47 (est.) in 2008 and managed to come back to a $2.34(est.) in 2011. I was just hoping the same would happened this time.
I truly understand what is "history doesn't tells you the the future" means now.

The price was ranged around $0.81 to $1.44 from 2011. I didn't pay much attention in Noble during this period, just hold it and hoping that the price could reach $2 one day.
False hope.

When the reports by Iceberg Research and Muddy Waters in 2015, that is point when I start to take note about this stock again. Yet I didn't study their report again but only by reading the reports from Iceberg Research and Muddy Waters, and their target price was $0.10. Perhaps I'm in a denial stage at this point of time. Only thinking that since have already suffered from more than 50% loss in this, how much can it gets worse. The price shall recovers once this incident cleared. All these are just noises in the market, and Noble had rejected all of these allegations after all.
Nobody would admits even though if the allegations are true right?

When Noble's CEO unexpectedly announced that he will resigned due to family reasons earlier this week, this is the time when I am finally awakes. It was too late, the price was at $0.30, already incurred a 85% paper loss. I am waiting for a better price to get out this time.
Paper loss should be considered as a loss too

Today Noble Group founder and Chairman announced to step down within 12 months. Noble also said it would cut headcount and together with rights issue announcement:

• 1 Rights Share for every 1 share in Noble Group held, issued at SG$0.11 per share, representing a discount of approximately 63% to the closing price of SG$0.300 per share on the Singapore Stock Exchange on 2nd June 2016, being the last trading day of the Noble Group shares prior to the announcement of the Rights Issue, and a discount of approximately 46% to the theoretical ex-rights price of SG$0.205 per share.

In layman's term, meaning to say I am entitled for 1 share at $0.11 for every share which I owns. In another words, I need to fork out $330 to "buy" the rights for the 3,000 shares which I owns.

I finally make the decision based on facts and not emotions this time:

First of all, feels so cheated. The announcement of CEO's resigns on 4 days ago actually says that Mr Richard Elman will continue in his role as chairman and executive director. Excuse me. Continues his role for another 4 days only?

Secondly, the way I see from Noble's rights issue announcement, Noble is using their last resort to save the company. They are still in US$3.97 billion net debt (as of 31 Dec 2015), despite raising US$2 billion within the next 12 months.

• The rights issue, together with the sale of Noble Americas Energy Solutions (“NAES”) announced last Monday and the previously announced sale of low return assets and working capital reduction measures will, in aggregate, generate US$2 billion in additional liquidity over the next 12 months

Lastly, the ex-rights price will be diluted to the theoretically of SG$0.205 per share. My take is that it will be lower than $0.20 per share after ex-rights. With the Minimum Trade Price set by SGX, how will Noble possibly to comply it? Do a share consolidation? It is more like a rinse and repeat process to me.

Noble's decision to rights issue is an ultimatum for me to hold on to Noble shares. 穷小子 will not throw any more money into it for the rights issue. $330 is not a huge amount, but that would be about 42% of the current holding Noble shares value, based on the closing price at $0.26 today. A drop to the current $0.26 is about 88%, and to have it back to the $2 days needs about 800%. What are the chances here? Hence made the sell call, take the loss and move on. If the price miracle-ly goes up, then so be it. It is just another unlucky if this really happens.
A series of bad mistakes had resulted in 穷小子 to suffer a hefty loss of at least $5,000, it may not be a lot to others, but this is definitely be the price that 穷小子 gonna pay.

Standard Chartered trading: No "No Minimum Commission"

Some may have heard about it, I have heard about it. Standard Chartered trading will be charging a minimum of $10 per transaction from 01 Aug 2016 onward. It will no longer be "No Minimum Commission". Since having Stanchart Trading account last year, always hoping that this day will not have to come that soon. Anyway, I have yet to receive the notification letter personally though, but should be expecting it soon.

I have a deep pocket which will deposit all of my shares in The Central Depository (CDP), trades via traditional brokerage, with POEMS as my main, and iOCBC and UOB Kay Hian as my backup. This pocket is usually for those contract value with more than $9,000 and these shares are supposed to be held in CDP for the long run.
On the other hand, there is a shallow pocket, for any trades which is less than $9,000 or less than 1,000 shares per transaction. This pocket is mainly for smaller trades, maximize profits with lesser commission fees, for averaging purposes, and to curb my "hand itchiness" from buying shares.  All of these are transacted via the Stanchart Trading.

With the breaking of this news, shall continue with this two pockets method for my investment journey until 01 August only, unless there is a new low/no minimum commission platform in town. Stanchart aims to expand their profits by implementing a minimum commission fees as their first steps. No doubt it may includes the custodian fees or another other fess sooner or later, it is just a matter of time. Subsequently, this account will then be kept in the cold for 穷小子 since it defeats the purpose of having it in the first place.

What would 穷小子 do?

• Those stocks with contract value ≤ $3,500 and less than 1,000 of shares,
All will be sold. In fact have sold all those with 100 of shares holding only today.
POEMS is having a promotion for this with a minimum commission of $10 only and it is safe keep in CDP. *Promotion till 30 June 2016, hope it extends.
• Those stocks with contract value ≤ $3,500 or less than 1,000 of shares but are planned to hold for long term,
Use these 2 months to buy as much shares as possible if the price is good. After which, transfer them to CDP at $10.70 per counter
• Those stocks with higher contract value and more than 1,000 shares and are planned to hold for long term,
Transfer them to CDP too
• Those stocks which are planned to hold for mid-term,
Leave it in Stanchart trading account until the day it sold off

Any other scenarios shall be case by case determined.

Another 穷小子's favorite is no more, but no hard feelings with Standard Chartered though. Standard Chartered is a profitable company after all, it doesn't make sense with how will they managed to sustain all those administrative and postage charges without any minimum commission fees.
穷小子's style don't mind paying the $10 minimum commission, but Stanchart should at least upgrade the current trading platform. There is no mobile-supportable platform, no e-statement, no live-price. Bottom line is that there isn't much features, basically it is just purely for buy and sell only.

Shall explore DBS Vickers cash upfront and other brokerages for a lower commission deal.

This statement may be true from 01 August 2016