Dr Chan Yan Chong 曾渊沧

By Dr Chan Yan Chong, 11 October 2013

Last weekend, I was invited to Singapore for an investment seminar that was co-organised with Shares Investment. While I was there, I took the opportunity to go on a side trip to Malacca. It has been 20 years since I last visited Malacca. Malacca has basically not changed over these 20 years, except that there are more tourists than before, and most are from China. From the Tuas Checkpoint at the westernmost tip of Singapore, I crossed the causeway into Johor before hitting the highway. During the nearly three-hour drive, there were no signs of houses on either sides of the highway, only miles after miles of oil palm plantations.



Recently, many Singaporeans have become keen to invest in property in Malaysia. At the last investment seminar, many people asked me questions relating to this development. Seeing how the scenery along the way between Johor and Malacca had remained virtually unchanged for the past 20 years, it goes to show that economic development in Malaysia is just plodding along. In recent years, Singapore property prices have kept rising, while bank interest rates have remained low. This has caused many cash-rich people to cast about anxiously for something to invest in. So, many of Singapore’s property developers went across the straits on a development spree and then came back to market these projects in Singapore, thus attracting throngs of Singaporeans rushing in to invest.

Twenty years ago, many Singaporeans also rushed in to invest in properties on the Indonesian island of Batam, and lost money.




One rule of investment is never to rush in with the crowd.


We should always be wary of investments and equities that everyone is scrambling to buy.

A small portion of these investors may be fleet-footed enough to have sold off during the feeding frenzy, and more people would rush in when they saw that these lucky few had made money.

The tail-end of the crowd would then become the players who could not grab hold of a seat in the game of musical chairs, and this is the basic principle of all investments, wherever you go.

However, droves of people would tend only to register the fact that those lucky few had made money, so they want to have a share in the pie, only to forget about risk.




The outlook for the Singapore and Hong Kong stock market would depend on the direction of the Chinese stock market, which is growing in influence as the day goes by.

The vast majority of new stocks listed in Hong Kong in recent years are H shares from China. Singapore also saw a similar increase in Chinese S-chip stocks. Even if we disregard the H shares or S-chip stocks, local listed companies are increasingly focusing their businesses in China.



As more and more Chinese companies are listed in Singapore, we are faced with shares which vary wildly in quality. Someone asked me how should he avoid those shares that would suddenly plunge or even be suspended from trading? My answer is: it is unavoidable, and you can only blame your luck if it happens to you. The only thing that you can and should do is to avoid placing your bets on second and third tier stocks that you are not familiar with.

Personally, my holdings are primarily blue-chip stocks, and that is a discipline that long-term investors should keep to.

Do not trust in the myth of a hole-in-one;


==> investment diversification is still the most important and fundamental rule of the game.








www.sharesinv.com/articles/2013/10/11/us-shutdown-temporary-catastrophic-repercussions-on-default/

Dr YC Chan - October 2013 newsletter dated 1 Nov 2013:


After US Fed’s meeting on 30 October, matters relating to bond purchases and extremely low interest rate remained status quo. US Stocks however, dipped after hitting new high. The reaction is not unusual after short selling on good news.

Before the good news was announced, the stock markets went up, which means the concluded result was expected by the markets.


Since the Fed’s market withdrawal forenounced in May this year, US stocks have dropped 3 times, conspicuously to rock bottom:
1st  time in mid June;
2nd  time end of August;
3rd  time early October. 

The withdrawal does not happen this time round, but it will definitely happen in time to come. Thus I believe US stocks will repeatedly go up and down under the shadow of market withdrawal influence.


For the short term, US stocks will move independently depending on the performance of individual listed companies. The local market should have its focus on the Third Plenary Session of the Chinese Communist Party and the the People’s Bank’s money supplies.


US Fed will have another meeting in December. It should be the last meeting attended by the incumbent Chairman Bernanke who initiated the Quantitative Easing Monetary Policy (QE) of the US. Morally Bernanke should not simply leave as it is.

==> Thus I am somewhat concern the December meeting might unexpectedly Start to Withdraw from the markets prior to Bernanke’s
departure, and to let him handle the post withdrawal issues.





12 月，美国联储局将再开一次会，这应该是现任主席伯南克最后一次参加的会议。美国的量化宽松是他发明的，他在道义是实在不应该拍拍屁股离开，因此，我是有些担心 12 月的会议会出人意料地开始退市，让伯南克在任满之前做出退市的行动并处理退市后所发生的问题。


In December US Republican Party and the Democratic Party will negotiate once again on US national debt ceiling issue.

The October 17 agreement was to push back the issue for 3 months; Republicans will keep using the debt ceiling issue to force Obama to cut governmental
expenditures.

In September this year, US financial expenditures were surprisingly in black with some surpluses. I believe this could be the result of the Republicans’ past successful automatic deficit reduction budget plan. In fact, if Obama would follow Clinton not spending frivolously, US tax revenue would exceed expenditure with no deficit, and the debt ceiling issue would not have happened.  

A while ago, the share price of Sky One Holdings plummeted.


Since large numbers of dragon stocks and those Singapore companies with investments in China public listed in Singapore,


problems often surface due to

~~ relatively poorer corporate governance in China.

~~~ On the other hand,
there could be some people, reporters in particular, having received money from a 3rd  party, purposefully spread unfavourable faked news of a company to let its share price drop, so that the 3rd  party who pay the money make profit from short selling prior to the faked news. Lately the Chinese Public Security Authorities arrest a Guangzhou New Express （广州新快报）reporter suspected of spreading unfavourable faked news of Hong Kong listed Zoomlion (中联重科).



How do we tackle this kind of problems?

The only way is to diversify your investments.



Be wary of those manipulated dragon stocks. Do not over panic, search into the sources of the news to see if it is from some ones with motives spreading rumours.


如何面对这类问题？

没有别的方法，唯一方法是分散投资，炒作的特别厉害的龙筹股更加小心，出了问题也不要过度惊慌，要仔细分辨消息来源，会不会是有心人制造的谣言.......


NOL has turned around in 3rd quarter. The worst scenario of freight forwarders should be over.


海皇轮船第三季总算扭亏为盈，航运业最坏的情况应该已经过去。



P/S: Dragon Stock (龙筹股) refers to Singapore listed China stock with main operation or business in China. 
龙筹股是指那些主要生產或者经营等核心业务在中国大陆、而企业在新加坡交易所上市掛牌的企业股票。

       Examples - Yangzijiang Shipping, Cosco Corp and Yanlord Land

告别2013年，2014年有何展望？

With 2013 ending, What is the Outlook for 2014?

曾渊沧博士 Dr YC Chan - 20 December 2013 Newsletter:

With US continuously setting Record Highs, lots of people are worried that the stock market has reached the peak with bubble formed.


I think the stock market is NOT likely to burst yet. Now is Only the EARLY Stage of Bubble.

美国股市屡创新高，不少人担心已接近见顶，形成泡沫。

我认为应该不会这么早爆破。现在只是泡沫形成的初期。


Everyone needs to Remember

- NOT to be OVERLY GREEDY,

- DON’T INVEST too Much Fund into those Speculative Penny Stocks with No Underlying Business Fundamentals.


大家只要记住不要太贪心，不要把太多钱投入那些专炒供求而无实质基础的三、四线股便行。

www.sharesinv.com/zh/articles/43411/

曾淵滄專欄：低吸雙馬股考功夫 — 24 Apr 2014