Setting my sights on US Market

Currently, I am looking at some companies listed in the US market. Will update once I had purchased them :). I might also add some more S Shares depending on how low the market will go.

Bought Ezra and portfoilo update

Bought Ezra @2.7 on 10 June 2008.

Boring Portfoilo as of 13 June 2008
Asia Enterprises
Courage Marine
C&G
China Sky
Ezra

Overall, Boring Portfolio had dropped 10.4% as of to-date as compared to STI which had dropped 13.95% since Jan 2008. (Jan Opening 3462.69, 13 Jun Closing 2979.56)

Quotes from the Intelligent Investor - Benjamin Graham

"In the depths of a depressed or bear market, the average person can see no ray of light ahead and can think only in terms of worse to come. So too , when an individual company or industry begins to lose ground in the economy, Wall Street is quick to assume that its future is entirely hopeless and it should be avoided at any price. The two types of reasoning are similar and equally fallacious."

"Timing is one great psychological importance to the speculator because he wants to make his profit in a hurry. The idea of waiting a year before his stock moves up is repugnant to him. But a waiting period, as such, is no consequence to the investor. He enjoys an advantage only if by waiting he succeeds in buying later at a sufficiently lower price to offset his loss of dividend income.Timing is of no real value to the investor unless it coincides with pricing that is, unless it enables him to repurchase his shares at substantially under his previous selling price."

When a stock goes down should you sell?

Should you or should you not? The answer is depends.

Depending on your risk appetite, time horizon and amount of $ in your bank account. If you those who cannot sleep over your investment, I suggest you sell them. After all, no money can buy health and mental health. No point becoming a lunatic over some investment.

You might ask what should I invest in then since I still need to build my retirement nest. My suggestion to you is to buy Index Fund. Not just SGX but the world indices around. Point of Entry is important in this case. You want to buy them when the price is reasonable, not on the high hoping that it would go higher.

As for those who choose to remain invested in equities, ask yourself the following.

1. Is the decline of price due to any change in the fundamental of the Co?
2. Is the co reporting any decline in profit or losses?
   

If the answer is no, it is Mr Market feeling depressed and offering you a lower price. You should just ignore him if you have done your homework. This is why it is important to make note to yourself the reason why you invested in the co in the first place. Do not fall in love with your co if it is performing badly , sell it. It is better to cut loss and look for better opportunities with your losers. Time is your friend and your enemy as well if you do not know how to use it well.

Courage Marine

Listed on SGX on 13 October 2005 with an IPO price of $0.220. Courage Marine closes it books on 31 Dec annually.As of 31 December 2007, Courage Marine's assets is held by 96% Equities and 4% Liabilities with no long term debt. The Fleet consists of 5 Handysize and 3 Panamax dry bulk carriers, with total tonnage of approximately 379,675 dwt.

Let take a look at what it matters most for any company, the earnings

Year EPS (USD)
----- ------
2003 0.007
2004 0.032
2005 0.030
2006 0.026
2007 0.057

As we can see since inception, the earning had dropped 0.004 cents per share or 13.3% in 2006 before rising 0.031 cents per share or 119% to 0.057 cents per share.

What I like best about this Company is their margin.

Year Margin (%)
----- ------
2003 33.62
2004 55.57
2005 54.40
2006 49.05
2007 66.78

As we can see, Courage Marine commands a sizeable margin and I typically like company with high margin, it shows that they are able to control their pricing.

Let take a look at the ROE next

Year ROE (%)
----- ------
2003 NA
2004 184.88
2005 41.51
2006 38.48
2007 52.16

I will ignore the figures in 2003 and 2004 and maybe even 2005 since the Company was only listed in October 2005. Why? By the time, the Company was listed. All it left was just 2 months before the Company closed it books on 31 December 2005. Way above, the 15% ROE criteria i have.

Bought today

Putting my money where my short list are. I bought the following

Courage Marine @ 0.42
China Sky @ 1.05
C&G @0.29
Asia Enterprises @0.415

I had investigated their annual reports. These businesses are funded adequately through their operation activities. Have very low gearing, high quick ratio.

Final Shortlist

China Sky - Buy Price $1.05 , Target Price $1.59
Courage Marine - Buy Price $0.425, Target Price $0.76
C&G Industrial - Buy Price $0.29, Target Price $0.74
Asia Enterprises - Buy Price $0.42 , Target Price $0.71