Singapore Stock Pick 2016.
Please view it as a reference and always apply it with timing ! Buy and Hold will not guarantee profit. If the price is to drop by 50%, no amount of dividends will help to cover the losses.
Singapore Stock Picks 2016
Thoughts
Singapore Stock Picks 2015
The Stock Picks for 2015 was published in The Edge in Feb 2015. Although this is a much overdue posting, I felt that it is still good to document it for review when the year 2015 is over.
As at 9 Sep 15, 9 out of 10 recommended counters were in RED. The only 1 that’s positive is Sheng Siong Group.
As I have said in Jan 2014, ” Again, I need to caution on investing in these counters blindly or simply ‘buy and hold’. I have illustrated earlier that, if based solely on fundamentals, the probability of getting the counters correct is only 50-50. “
My Market Comments in Forbes
On 3 Feb 2014, an economic analyst wrote an article in Forbes saying that “Singapore’s Bear Market May Have Just Begun”.
I looked at my chart and challenged his views technically. True enough, the market rebounded and turned out as what I have expected.
Just some sharing of my thoughts with you guys.
Cheers and have a good weekend ahead.
Jayson
Singapore Stock Picks 2014
Before we move on to 2014 stock picks, let’s look at the performance of those stocks which were selected by a local research/trading house for the year of 2013. Of the 12 recommended counters, 6 were negative and the rest were positive. Of the negative counters, Biosensors, CDL and CapitaMall Trust were the hardest hit. They ranges -10.56 to -31.84. Of the positive counters, the star performers of the year include Ezion Holding (+58.57%) and M1 (+21.11%).
For me, I would deem the stock picks by local research houses as fundamentally good stocks as at the beginning of the year and it is important to apply technical analysis to these counters to avoid pitfalls and maximise profit. People always ask about recommended stocks to buy for STI, but they forget about timing. The local houses have spent so much resources and research on these counters and have put across their choices, with their reputation at stake. I am sure there must be strong basis on their selection. Fundamentals considerations comprise of expected earning, intrinsic value, potential upside etc. But these criteria are dynamic and no one can guarantee that the expected earning would not change. For example, no one would expect earnings of CDL or other property related stocks would be so badly affected until the implementation of TDSR by MAS in the middle of 2013. Property counters, including REITs were hit. Apply technical analysis will allow one to get away early before the counters took a deep dive. It also reinforces the idea of applying both fundamental (taken care of by the analysts) and technical analysis when one trades, be it long or short term.
The stock picks for 2014 was published by the Sunday Times on 29 Dec 2013. I want to document it for review on 31 Dec 2014. This will also be useful for readers who want to have some reference at any point of the year. Again, I need to caution on investing in these counters blindly or simply ‘buy and hold’. I have illustrated earlier that, if based solely on fundamentals, the probability of getting the counters correct is only 50-50.
Last but not least, I wish everyone good health and a prosperous 2014.
Breakout System
Sometimes it is rather difficult to have the patience to wait for a price pull back. Often, it is within the traders’ psychology not to chase the price upon breakout.
When a trader longs a position at a higher price, it is definitely further away from its support, below which the trader can define the stop-loss. There are 2 options that traders can set the stop-loss, either above or below the true support. The former will expose the trader to higher risk (as it was further away due to the breakout) while the latter will be more likely to be triggered, thereby resulting in losses.
The skill of finding the true / resistance (to take profit) becomes very crucial. An experience trader can actually ignore the indicators by just observing how the price behaves when it is near to the support / resistance. Many times, the indicators give mixed or conflicting signals when used together. True support is the strongest support nearest to the current price.
Having said that, most traders would be so psychologically affected and they would not have the right mindset to participate in subsequent breakouts when the prior attempts failed.
For swing trades that last for a few days to a few weeks, the focus should always be entering near support (for long) or resistance (for short). The detection of the strength of the imminent move should always be intraday. Otherwise, it is always safer to wait for pull backs to initiate trades.
Trading is just like mathematics. Only when the defined risks are small with the probability of winning high, can the overall profit be sustained.
Flexible ‘bamboo’-style value invesment approach
Came across an interesting article by THE EDGE (The week of May 20, 2013), under the section of Personal Wealth. The title of the article :
Asian-style global investing – Capital Dynamics founder and fund manager Tan Teng Boo uses a flexible ‘bamboo’-style value approach towards international equity investing (By Kelvin Tan).
Below is an excerpt (gist) of the article.
‘Bamboo’ approach
To achieve long-term gains, Tan bascially uses a value investing approach with a global macro overlay. Like most value investors, the fund manager evaluates the attractiveness of companies by comparing their long-term intrinsic value and current traded stock prices. Companies which are traded at a deep discount to their intrinsic value are said to offer ‘a good margin of safety’, he says. But for stock-picking in emerging markets, Tan – differing from traditional bottom-up value investors – takes into account macro-economic factors such as GDP growth, inflation rates, interet rate, and politics.
He reasons that using a pure value investing approach in Asia and other emerging-market regions does not work because there are many other external macro factors that influence the price of stocks. “If you invest in the US, you don’t have to worry about capital controls and you don’t have to worry about who will be the next prime minister. If you apply [the] Fishers/Graham [value investing] method in Vietnam, South Africa or Malaysia, you will be dead,” says Tan.
A classic case is Malaysia, where politics is a crucial factor that could impact the prices of stocks, according to the Capital Dynamic founder whose company manages a Bursa Malaysia-listed, closed-ended Malaysia equity fund called iCapital.biz Berhad. “If you see a new government the next day, all those existing government-related companies would have been bashed. So, in emerging markets, you cannot take the typical Benjamin Graham and Warren Buffett value investment approach because valuations of companies are not just a function of how well they are run. The social and political milieu should also be taken into account,” says, Tan, who describes his value investing approach as “intelligently eclectic”.
Interview with Andrea Unger
Trading Insights From Three-Time Winner Of World Cup Trading Championships Andrea Unger – by Louis Kent Lee and Ong Qiuying (31 Oct 2012)
I have read this article from Shares Investment and felt that the part on risk management is particularly important. Decided to keep a record of this article for reference and as a reminder of proper risk managment.
Book by Dr Jacinta Chan – A Glimpse
Recently, I have come across a book by Dr Jacinta Chan. As I was having some time in the bookshop, I browsed through the book and found some of her words which are rather strong but enlightening. I wish to share her words and I shall quote this paras from her book:
A Note to the Trading Apprentice
Do not be fooled by randomness
Why should we spend time arguing with the random walkers when we can be quietly making profits? Let the professors continue to teach random walk theory in business schools. Why should we bother them in their academic world when we can be making profits in ours? The person who is right in the market is the one who makes money in the long run.
Random walk was what I learnt in school. But in what seems to be randomness, there are repeating patterns. This is what advocated in fractal geometry theory by the reowned mathematician Benoit Mandelbrot. Our task here is to decipher some of the helpful patterns with professional technical tools to harvest profits in the repeating habits of history.
Let the research analysts do their fundamental research; we do not need it. Fundamental analysis course have cost me and many others many years of missed profits. This is what I meant when I said, not only do you not need a finance or economics degree to trade, you are much better off without one. You just need to know what the professional traders who are making money in the market know.
You will have realised by now that technical analsysis, whether involving subjective pattern recognition or mechanical trading systems, is based on the four concepts of price-volume relationship, trading ranges, trend identification and buy and sell signals that we learnt about earlier.
– Dr Jacinta Chan
Financial Times Guides to Technical Analysis: How to trade like a professional
Dr. Jacinta Chan trades equities and futures. She has a Ph.D. in financial statistics and teaches finance. Her research is focused on adjustable trading algorithm systems, tested on futures.
Jayson's Financial Trading 