Badly Bruised Stocks - part II

Today I want to talk about these 2 counters in SGX:

Counter Name	CLOSE	HIGH	VOL	SMA20	DAYS AGO	Ratio to Peak	Symbol
CHINA ENERGY LIMITED	0.056	0.97	2043	0.0629	899	6%	A0G
CHINA SKY CHEM FIBRE CO., LTD.	0.089	1.56	3236	0.1036	898	6%	E90

Both of these counters are currently trading at about 6% of the Peak in 2007 (about 900 trading sessions ago). Both of these counters are S-Chip - China Company Listed in SGX. Imagine someone holding these two counters bought at that price. The kind of pain the investor suffer is understandable. This is a glaring example of not cutting losses. The old wisdom of letting profit run and cutting the losses short is never to be forgotten by any investor or trader. This is one of the most important lessons an investor should learn first.

If you cannot stick to this rule, you are unlikely to make much money unless you are a very lucky person. But now, is it worth to invest in these counters now? Since they are so cheap? In stock market, cheap can go cheaper. They can go trough share stocks consolidation to make it more feasible to trade.

Badly Bruised Stocks

The following counters are badly bruised. They are trading at 30% or lower from their 200 day peak:

Security Name	CLOSE	HHV200	Ratio	HHVB	Ticker Symbol
ADVANCED SYSTEMS AUTOMATION	0.003	0.010	30.00%	139	520
CENTILLION ENV & RECYC LIMITED	0.001	0.010	10.00%	179	C49
CHINA ENERSAVE LTD	0.003	0.020	15.00%	160	5QT
CHINA ENVIRONMENTAL RES GP LTD	0.012	0.075	16.00%	195	M8J
CHINA HONGCHENG HOLDINGS LTD	0.027	0.110	24.55%	169	C0Z
CHINA TITANIUM LTD.	0.004	0.015	26.67%	153	530
COMBINE WILL INTL HLDGS LTD	0.920	3.500	26.29%	183	N0Z
DAPAI INTL HLDG CO. LTD.	0.065	0.240	27.08%	161	FP1
FRIVEN & CO. LTD.	0.030	0.165	18.18%	154	5RF
GEMS TV HOLDINGS LIMITED	0.009	0.040	22.50%	144	AM3
GLOBAL TECH (HLDGS) LIMITED	0.004	0.015	26.67%	171	G11
GOLDTRON LIMITED	0.002	0.010	20.00%	94	536
GUANGZHAO IND FOREST BIOGRPLTD	0.020	0.105	19.05%	199	G21
ITE ELECTRIC CO LTD	0.030	0.100	30.00%	163	581
JEL CORPORATION (HOLDINGS) LTD	0.007	0.040	17.50%	139	J16
JETS TECHNICS INTL HLDGS LTD	0.003	0.015	20.00%	67	J19
JOYAS INTERNATIONAL HLDGS LTD	0.012	0.042	28.57%	178	E9L
LANKOM ELECTRONICS LIMITED	0.005	0.035	14.29%	144	L22
LINDETEVES-JACOBERG LTD	0.012	0.045	26.67%	152	L15
LONGCHEER HOLDINGS LIMITED	0.117	0.760	15.39%	191	L28
LOTTVISION LIMITED	0.011	0.045	24.44%	166	M22
MATEX INTERNATIONAL LIMITED	0.039	0.145	26.90%	174	M15
NAM CHEONG LIMITED	0.135	0.750	18.00%	100	N4E
OMEGA NAVIGATION ENT,INC.	0.400	1.800	22.22%	156	O57
RENEWABLE ENERGY ASIA GRP LTD	0.063	0.260	24.23%	161	5DW
SUN EAST GROUP LIMITED	0.005	0.025	20.00%	194	Y35
TELEDATA (SINGAPORE) LTD	0.009	0.030	30.00%	147	T28
THE STYLE MERCHANTS LIMITED	0.002	0.055	3.64%	167	N37
WE HOLDINGS LTD.	0.009	0.065	13.85%	198	5RJ
YOUCAN FOODS INTERNATIONAL LTD	0.030	0.100	30.00%	173	Y06

If you are thinking of bottom fishing, these are probably counters you can start to check on. However, I had listed them without considering their fundamentals. I simply use a software to filter them out without giving much thought to them. Usually, a broken stock remains broken until some major players decided to play them up or some fundamental change to the situation. A broken stock can remain broken for 2 -3 years or even longer depending on the situation and the management.

Real Estate Investment Trust (REIT)

There is a good article about investing in REITs. There is the link:

http://www.propwise.sg/how-to-invest-in-singapore-reits/

What should you take note of when investing in REITs?
1. Composition of REIT assets - Retail Malls, Hotels, Industrial, Residential, Logistic etc.
2. Geographic diversification and currency risk- Political, Natural disasters etc.
3. Growth of Dividend Per Unit (DPU) - How well they manage 4. Spread over 10 year Government Bond yield - Risk vs Yield comparison
5. Gearing -Leverage - ability to face financial crisis

This is one way to invest for income. Depending on your risk adversity, you can make your choices.

Trade Summary August 2011

August has been roller coaster for me. Things just did quite get into rhythm for me. I found myself not inline with the market. One of the biggest reason is that I was not exactly with the market. I was involved in a project that does not allow me to access the the market information for more than 3 weeks starting from the last week of July. This is the problem. These days, I am quite hesitate to take on new projects. Year 2009 was an example.

 

It has been quite frustrating for me. My counters broke the cut loss point and I didn't get to sell them. One of the problem is also the expectations. With too many analyst promoting the idea of QE3 or its equivalent, one would expect the market to remain stable. However, I believe it was these analyst's companies that are selling away their stocks. This is conspiracy theory but it is widely held true these days. The cycle is simple: the analyst promote buying. Their companies quietly liquidate their positions to retail investors. When they want to buy, the will call for selling so the the prices are depressed.

Moving forward, with the job data from US below expectation, the market is going to continue its volatility with inclination to the down side. Is this a good time to buy in? I don't know. Maybe the situation is not that bad and it will bounce back quickly. Or are we waiting for a real sovereign default to erupt and cause the whole market to panic before we see a real rally? I think we will know soon.