Tuesday, May 10, 2016

Generating 30% a year by buying the Dip on Vicom : A look back at the trade idea

I had written about Vicom a year or so back.

Old post on Vicom in March 2015

The trading idea was

"I think the current spike is due to the special dividend of 9.5 cents.

Chances are this is setting up the share for a steep fall once it reaches ex-dividend.

The share price is trading at 6.55 as of this post.

My estimate is that it will trade to below 5.8 when it goes ex-dividend.

That should set up a good long term buying opportunity.

The way to evaluate this would be

a) Does Vicom trade to below 5.8 SGD from now till Dec 2015?
b) A year from now, assuming one buy below 5.8 SGD and holds it till ex-dividend date of 15 August 2016, what is the return one has made?"

It is time to answer part (a).


Vicom traded below 5.8 SGD by August 2015.

In fact, right now it is close to revisiting the lows of August 2015.

The question now is, will it do a run up till August 2016?

This right now is very attractive as a risk return, so, if we buy now below 5.8 and hold it for its run-up, it might be worth it. Even, in case it does not run up, the risk of falling below 5.5 is very low, so it is a low risk investment opportunity.

As is normal, let us wait till August 2016 is over before we examine whether the return estimate of 30% holds.

Disclosure : Neither long nor short, currently, likely to go long in case share price falls below 5.8 SGD. 
  
Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures

Monday, May 9, 2016

Outperform the Market by 2% a year - Evaluating the RP ratio a year on

I had written about the RP ratio about a year ago.

Here is the old post on the RP ratio.

Post on RP ratio

The STI Index was at 3459.97 and the STI ETF at 3.46

The way to measure this is one year later, 

a) what is the return for this equal weighted investment vs STI vs STI ETF?
b) Has this outperformed?

The STI is at 2760 at the time of writing and the STI ETF at 2.8

The returns are -20.3% for STI and -19.1% for the STI ETF.

As the saying goes, a picture speaks a thousand words.

The RP ratio does outperform the STI ETF by more than 2% a year.



In short, if you are looking to outperform the market the RP ratio would help.

Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures



Monday, April 18, 2016

One Trade for a 30% return in 1-2 years - An Approach to trading Religare Health Trust

This post is to outline a trading approach for Religare Health Trust.
Image result for religare health trust


The approach is simple

"Buy Religare Health Trust when its 50 day MA breaks above 200 day MA from below and sell when it breaches from the top."

The exhibit below is a look at Religare Health Trust over the last five years.



You will see the golden cross on March 31, 2014.

In the next chart you see the breach below, marking the exit point.



This shows that one would have entered Religare Health Trust in March 2014 at 0.855.

The exit would have been in July 2015 at 0.995, using the trading rules of breach of 200 day MA, A return of 16%. 

When one adds the dividends collected in the period, the returns increase to 30%.

The reason i am posting today is that we are approaching a key 200 day breach up of the 50 day MA. i.e. this stock is setting for a move up.

The approach is to enter if it moves up beyond 0.98 which is its 200 day MA.

The next step would then be to hold the position till the breach and report on the results.

As usual, I will review the approach after a year or two , because normally it takes between a year to 15 months for this to play out.

Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures

Monday, April 11, 2016

An Approach to trading CapitaRetail China Trust














Image result for technical analysis does it work


This post is to outline a trading approach for CapitaRetail China Trust.

The approach is simple

"Buy CapitaRetail China Trust when its 50 day MA breaks above 200 day MA from below and sell when it breaches from the top."

The first exhibit is a look at CapitaRetail China Trust over the last five years.




This shows that one would have entered CapitaRetail China Trust in March 2012 at 1.19.

The exit would have been in May 2013 at 1.56, using the trading rules of breach of 200 day MA, A return of 31%.

Similarly, in exhibit B, you see the next entry in April 2014 at 1.445.




Exit would have been in July 2015 at 1.62 using the trading rules of breach of 200 day MA, A return of 12%.

The reason i am posting today is that we are approaching a key 200 day breach up of the 50 day MA. i.e. this stock is setting for a move up.

The approach is to enter if it moves up beyond 1.46 which is its 200 day MA.

The next step would then be to hold the position till the breach and report on the results.

As usual, I will review the approach after a year or two , because normally it takes between a year to 15 months for this to play out.




Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures

Thursday, April 7, 2016

One Ratio to rule them all - Update on the Low EV / EBITDA portfolio

I had done a post on a low enterprise value ebitda portfolio for Singapore.

Details are there at this link


The original investment hypothesis was that

a) This portfolio will outperform the market
b) It will exhibit lower volatility and draw-down.

Looking at the volatility in the market, I wanted to check how this portfolio is holding up.

The portfolio is amazing as it significantly outperforms and shows lower volatility and lower draw-down.


It is amazingly down, only 8%, while the benchmark STI ETF is down 18%.



That is 10% out-performance in the last year plus.

Full Disclosure : I own positions in BRC, CDW, Lee Metal and PEC.

Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures