Ernest Lim's investing blog

Unique insights into SGX small caps

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Yangzijiang looks interesting; tests support $0.940 – 0.980 (8 Feb 21)

el15

Yangzijiang (“YZJ”) has weakened approximately 13% from $1.11 on 13 Jan 2021 to close $0.970 on 5 Feb 2021. It has significantly underperformed STI (STI only dropped around 3% over the same period) and is the top STI constituent stocks with the highest potential return (see HERE). Why is it interesting? Read on for more…   Interesting points on YZJ a) Orders are likely to improve in FY21F Based on DBS Research 3 Dec 2020 report, the surge in China (Export) Containerized Freight Index (highest since Mar 2015) and the tripling of the Baltic Dry Index may prompt ship owners […]

Singapore – Asia’s worst equity market YTD, any opportunities ahead? (29 Oct 20)

el15

Dear all It is less than a week from the U.S. election. U.S. markets are understandably jittery. S&P500 has fallen 316 points, or 8.9% from its intraday high of 3,550 on 12 Oct 2020 to touch an intraday low 3,234 on 30 Oct 20. In fact, S&P500 has tumbled 195 points or 5.6% this week. S&P500 closed at 3,270 on 30 Oct. The media has written extensively on the risks surrounding U.S. election since months ago hence the election event risk is hardly a new one. Examples of risks which media has written about is the possibility on contested election […]

Nasdaq – potential bearish head and shoulders formation in the making? (29 Sep 19)

el15

With reference to my earlier write-up (click HERE) titled “S&P500 at 2,979 – limited potential upside (8 Sep 19)”, S&P500 touched intraday highs of 3,021 – 3,022 on 12 Sep 2019 and 19 Sep 2019 but it was still lower than the record intraday high of 3,028 on 26 July 2019. S&P500 closed at 2,962 on 27 Sep 2019. Hang Seng and STI touch one-month intraday highs on 13 Sep 2019 before profit taking sets in. October is likely a volatile month ahead given (just to cite a few examples) more news on trade talks (e.g. U.S vs China; U.S. […]

HRNet – All time oversold levels amid lowest price since IPO! (29 Aug 19)

el15

Dear all Another exciting week! This week, HRNet caught my attention as it approaches all time oversold RSI level. In addition, it is trading at the lowest price $0.560 since its IPO price at $0.900. Given the basis below, my personal view is that HRNet may be presenting a favourable risk reward setup for a long trade. Do look at the basis and more importantly, the risks inherent in such trades.   My personal basis a) Average target price $0.93! Based on Figure 1 below, average analyst target is around $0.930, representing a potential capital upside 66%. Estimated div yield […]

CKH Holdings at 19-year oversold levels; multi-year low price amid 10-year low valuations (6 Aug 19)

el15

Dear all What a hectic and exciting week! This week, CKH Holdings (00001.HK) (“CKH”) caught my attention with its 19-year low RSI level since end Dec 2000. At the time of writing this, CKH last trades at HKD67.60, level last seen around 21 Feb 2014. With such a precipitous decline, CKH is trading below its 10-year average valuations. Given the basis below, my personal view is that CKH may be presenting a favourable risk reward setup for a long trade. Do take a look at the basis and more importantly, the risks inherent in such trades.   My personal basis […]

Why am i cautious going into July… (2 Jul 19)

el15

Dear all, With reference to my market write-up published on 29 May 2019 (click HERE), where I mentioned that the sell-off in the markets revealed interesting trading opportunities, markets coincidentally bottomed on 3 Jun 2019 and staged a strong recovery. I have already sold into strength and reduced my percentage invested in stocks from 150% in early June to 12% now. Personally, I am cautious in the market going into July. Why is this so?   Basis below 1) Markets jumped yesterday following the U.S. / China trade truce announced over the weekend, despite the lack of details on what […]

Investment Strategy 2

el15

After you understand your investment strategy and your risk profile, the next step to do is to plan your asset and currency allocation. Assume that your investment style is moderate, you are in mid twenties and you do not have immediate requirement for your cash, you can invest in a balanced portfolio. You can consider the following allocation: 50% in cash, 30% in equities and 20% in alternatives (ie commodities etc. They are considered alternatives as they typically have a negative correlation with equities.) Even if equities drop 30% and alternatives drop 30%, the overall impact to your portfolio will […]

Investment Strategy Part 1

el15

Investing is like a game. However, it is not a zero sum game. It does not mean that if you win, the other party will lose. For eg. If you buy China Fishery at $0.65, and sell it at $0.70. Does that mean the buyer who bought from you is a sucker? Nope. He likes China Fishery because he thinks it can go up higher than $0.70, perhaps with a 2 year horizon. Does that mean that you should have sold it higher? Nope. This is because you may have a better investment alternative which may not appeal to other […]