Tuesday, January 21, 2014

Investing

BRT Realty Trust

I bought BRT shares at $5.9999 on 19 May 2010 and sold them at $7.0095 on 27 December 2013 (US time). Ignoring the transaction cost, the profit made is approximately 16.8%. If the transaction cost is included, the profit made is approximately 13.3%.

It does not hold quarterly conference call, it seems to be the case, as I cannot find any transcripts of them. That is good habit every C-suite management should have. It is high quality REIT being managed very carefully.

I first know this firm when I was browsing the established Michael F. Price’s portfolio. I compare it with other American REITs and I was amazed that it is really well-run. Because of that, there is not a day where you have sleepless night. It is so comfortable that you can wait until Mr Market recognises its actual value. Unfortunately, I sold it as I am preparing to use sales proceeds to buy US-based insurance firm.

By tax regulation, REIT has to maintain the status of REIT by paying 90% of income to the shareholders in the form of dividend. BRT has not done so since 2010. The Board of Directors confirms that it will not pay dividend in 2014 on 10-K form for the current financial year 2013. It seems that it is calibrating itself with a new project to build Teachers Village site, which is started in 2012. Its financial is tight and BRT is able to generate positive profit because of one-off gain of the sale of particular asset in the last two years. It is the positive consequence of having solid balance sheet position.
There is certainty that the interest rate for the loans in the future will increase to match the interest rate movement which is partially controlled by the Federal Reserve. As a result, there will be tight interest rate spread since it obtains mortgage debt to acquire properties in the view that it can make money. It was disclosed that 75% leverage is used. Thus, Mr Market is likely to see and wait how it survives for the next 2 years with such business model. That is why it is moving sideway for a long time.

Pace PLC

I bought Pace PLC (LSE: PIC) at 175 pence (1.75 pound) on 10 September 2012 and sold at 355 pence (3.55 pound) on 9 January 2014. At the same time, we received three dividends from PIC during the holding period:  GBX1.192, GBX2.092, and GBX0.928 (per share). As a result, I made a profit of 103.1%, net of transaction costs.

Source: it is taken in my room

I first know about Pace PLC when I received the modem from the Singtel contractor to set up fibre broadband connection. Well, I was surprised that Singtel was not using 2wire. A close investigation on Pace reveals that Pace PLC acquired 2wire from consortium consisting of few big giant firms. Anyway, Pace modem-cum-router do not have impressive wireless signal such that you cannot receive it from two rooms away. However, its software setup looks better and informative than that of 2wire.
Spending few days, I learn that it has products for pay-per-view TV. I notice that it has very good business relationships with American customers for pay-per-view TV products. That is unique characteristics given that Pace modem-cum-router don’t click well to many Singnet users.

On the price chart, it has grown from 2007 to middle 2011. It drop dramatically at late 2011 due to Thailand flood. It is because it has facility there to manufacturer the hard disk for its products. However, it responsed quickly by changing the supply chain to ensure that the customers get the products. All is well in 2012.

The upside is driven by ‘twin drivers’. First driver is the recovery stage from hard disk supply. Thailand flood is merely temporary problem that can be easily fixed by anyone. Second driver is the good business relationship between Pace PLC and its Amercian customers. This should create additional sales if the management is competent enough. Both of them did happen anyway. Best of all, poor wireless signal from Pace modem-cum-router didn’t cloud my judgement. All that said can be good reference of Buffett’s quote: “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results”. The third driver is not within my expectation – PIC acquires a good company for cash consideration. There is empirical study that whoever use cash to acquire company yield good results in stock market performance as if it is signaling that it has a lot of cash to spend. With that acquisition done, PIC is now viewed to be the next giant in the network industry.

Beam Inc

We bought Beam Inc at US$61.10 on 28 February 2013 and sold $83.50 on 13 January 2014. With that, I made a profit of 36.7%, net of transaction cost and withholding tax and including dividends.

In fact, I wanted to hold it for the next 5 years but Suntory Holdings, one of the largest Japanese multinational firms, announces its intention to acquire Beam Inc at $83.50 per share. It is highly probable that Bill Ackman, one of the shareholders, approve the sale of Beam Inc to Suntory Holdings.

I know that a lot of humans love drinking alcohol to relief themselves in any form. With that in mind, I went to look at few firms in the alcohol manufacturing industry. Beam Inc is a perfect candidate whereby it has spin-off unrelated businesses. This was engineered by Bill Ackman. The price is very reasonable and offers significant discount from its going-concern-based book value. Beam Inc has quite number of well-known alcohol brands, especially Jim Beam. The rationale of holding for the next 4 years is to leverage on the brands in order to generate consistent sales growth.

Unfortunately, the plan is cut short by stunning timing from Suntory Holdings to acquire it. Originally, the rumour has it that one of the largest alcohol firms, Diageo plc, is to acquire it. But Diageo PLC rejected the rumour.
Books

Book Title: What's behind the numbers?
Authors: John Del Vecchio and Tom Jacobs
Rating: 8/10
Remark: carefully selected financial ratios to identify the cons of the companies but there is technical analysis coverage which I am not pleased with. I personally think there is no need to have best of two worlds as long as you have sharpen your fundamental skill that bring you plenty of profits rather than being concerned about purely the entry and exit prices.

Book Title: The Detective and The Investor:Uncovering Investment Techniques from the Legendary Sleuths Author: Robert G. Hagstrom Rating: 8/10 Remark: The author is well known for writing about the interpretation of Warren Buffett's stock picking methods. In this book, he bring famous detectives from mystery and crime fiction stories into stock market. I think it is really good start for any beginners to the stock market.
Book Title:  Keynes and the market : how the world's greatest economist overturned conventional wisdom and made a fortune on the stock market
Author: Justyn Walsh
Rating:7/10
Remark: If you are knowledgeable about value investing, you will find this book familiar. For those who have little knowledge, you will find it interesting.

 Book Title: Den of Thieves
Author: James B. Stewart
Rating:8/10
Remark: The author did a good job to write real-life stories of insider traders who were caught with much details. At the last chapter, it serve good reminder for all of us to treat people nicely as you would deem to be by your own standard of nice treatment.

Book Title: Manual of Idea : the proven framework for finding the best value investments
Author: John Mihaljevic
Rating:8/10
Remark: This author is the brother of my friend whom I met last year. This book is great for anyone who need the directions on how to do value investing. Those who are experienced will find this book as 'usual book'.

Book Title: Abnormal returns : winning strategies from the frontlines of the investment blogosphere
Author: Tadas Viskanta
Rating: 8/10
Remark: The author carefully weight the nature of each investment topic and pointed out the merits of them. I think this book is good for confused parties who are interested in investment.

Book Title: Boomerang : the meltdown tour
Author: Michael Lewis
Rating:9/10
Remark: He wrote very well about his investigation on the problems Iceland, Ireland and Greece have with respect to the financial meltdown.

Book Title: Investing between the lines : how to make smarter investment decisions by decoding CEO communications
Author:
Rating: 9/10
Remark: It is one of the greatest discoveries to develop qualitative data that define the quality of the communication made by CEO of each firm on the annual report.

Movies and Dramas

Monster University (Hollywood Animation 2013)
Synopsis:
A bright small-sized and green-colored monster wants to be scarcer, enrolling into the Monster University. At that school, he majors Scaring subject in order to be scarcer. However, the way he looks is not that scary. The big question is whether he can be scarcer.
Rating: 8/10
Remark: It is a great lesson that tells us that even though we have weaknesses, we need to find way to compensate that in order to achieve our dreams.

Planes (Hollywood Animation 2013)
Synopsis:
A cropper-duster plane, Dusty, wants to participate in the race. Realists tell him that he is not built for it. Nevertheless, he went for it. How will he fare in the race?
Rating: 8/10
Remark: Interesting story

2 Guns (Hollywood Movie 2013)
Synopsis:
A two guys want cocaine from drug cartel dealer in exchange of the passports. However, the drug cartel paid them in cash. As it is not in the agreement, they rob the bank in the hope that they took the drug from there. Instead, they find a lot of money. What will they do next?
Rating: 7/10
Remark: Not so exciting story twist.

Sniper Trouble (Hong Kong Drama 2013)
Synopsis:
One SDU sniper and his best buddy, former SDU sniper were pitting each other. The latter want to confirm whether he is better than the former. Did he find out the result?
Rating:8/10
Remark: The story is pretty good.

Will Power (Hong Kong Drama 2013)
Synopsis:
Lawyer complete with his nemesis at court for various cases. Off the court battles, they began to know each other better. However, a billionaire's son hired him to over-write the inheritance will on the court. Can these two lawyers be still friends?
Rating: 8/10
Remark: The chemistry is so good that I watched whole episodes.

 Red 2 (Hollywood Movie 2013)
Synopsis:
Two names, secret cops for America, were exposed on the piece of secret paper on wikileak. American military office wants them to spill out what is going on. They decide to find out what happened and why they are exposed out of sudden.
Rating:8/10
Remark: Good action chemistry.

The Flu (Korean Movie 2013)
Synopsis:
A foreigner with contagious virus entered Korea illegally. A rescuer was in the 'trap' where he was trying to help a doctor's daughter with that virus. The state is in chaos. Everybody went revolt. Is there any cure?
Rating:9/10
Remark: Emotional show.

Azooma (Korean Movie 2013)
Synopsis:
Due to the meeting with the client, the mother couldn't fetch her daughter back home. The daughter met the rapist/molester. With no evidence on hand, the cops couldn't put him in the jail. She did the most radical way to have her justice to be done.
Rating:7/10
Remark: The story is good but the turn off factor is the flow of the story being shuffled over the length of the movie.

Medical Top Team (Korean Drama 2013)
Synopsis:
A ambitious  male doctor wants to create top team that consists of best of best doctors in their own specialized field. There is political battlefield over how top team should be utilized.
Rating:7/10
Remark: I liked medical shows. This drama may have shown some medical scenes but it has more love factors in the story.

Hanzawa Naoki (Japanese Drama 2013)
Synopsis:
At mega bank, the branch manager blame the loan manager for approving a loan without doing any sufficient check on a firm that is actually window dressing its accounts. The loan manager went on to find ways to get the loan amount back.
Rating:10/10
Remark: It is top class show with excellent acting. It is almost realistic banking show with Japanese culture.

 Wolverine (Hollywood Movie 2013)
Synopsis:
Wolverine saved a Japanese solider's life during the end of the world war 2. In few decades later, that Japanese wants to extract longevity out of Wolverine. How will he do it?
Rating:8/10
Remark: The action is good. There is unexpected twist.

 Paranoia (Hollywood Movie 2013)
Synopsis:
A young man is trying to obtain top executive position in corporate America. With his folly, he was trapped with only one option given by his former technology company. The owner of that company want him to steal blueprint of a technology item from the owner's former company. How?
Rating:7/10
Remark: I think it is good story to tell us that our wants may be imaginary and we will realise that we don't need them by the time we used them before.

Kurokochi (Japanese Drama 2013)
Synopsis:
Kurokochi is trying to find the truth behind 300 million yen robbery. He does this by doing dirty tactics.
Rating:8/10
Remark: The story is interesting together with main character's first class vocal acting.

Elysium (Hollywood Movie 2013)
Synopsis:
In the year where the Earth is overly populated, rich people create Elysium, a space shuttle alike land outside the Earth for them to live. There is a kid, living in children home. He wanted to live in that Elysium. Can he achieve the aim when he is adult?
Rating:7/10
Remark: The story is decent.

Legal High 2 (Japanese Drama 2013)
Synopsis:
A male lawyer with zero loss in any law case is about to take the most impossible case with his female understudy who dislike his methods. The case is about a lady who allegedly murdered soon-to-be husband. Whole Japan dislike her as media expose her about how evil she is. Will he lose that case for the first time?
Rating: 7/10
Remark: Great story

Doctor X 2 (Japanese Drama 2013)
Synopsis:
Doctor X is back to perform many difficult surgeries in Japan.
Rating:7/10
Remark: It is all usual stuff just like first part.

Rush (Hollywood Movie 2013)
Synopsis:
This movie tells the real life story between James Hunt and Niki Lauda. In 1976, they were completing for the position of the world champion.
Rating:9/10
Remark: It is brilliant!

Closed Circuit (Hollywood Movie 2013)
Synopsis:
Two lawyers on defence team are to defend the suspect who the British cops classified him as the murder of 120 innocent victims in the terrorist bombing. They begin to find the actual truth and what will secret cops do?
Rating: 8/10
Remark: Solid story with realism but the ending falls short.

Out of Inferno (Hong Kong Movie 2013)
Synopsis:
There is a fire in high-rise building. A fire captain who doesn't save his cloest kin before strangers knows that his wife is in that building. What kind of decisions will he make?
Rating: 7/10
Remark: Interesting fire scenes. Story is smooth and consistent.

The Terror Live (Korean Movie 2013)
Synopsis:
A caller told the radio station's news anchor that he is going to blow a bridge. News anchor did not believe until he did it. What will he do next?
Rating:9/10
Remark: The ending is well done together with entertaining story. There is surprising twist.

The Spy: Undercover Operation (Korean Movie 2013)
Synopsis:
A husband kept the his job as a secret from his wife. His job is to be spy for his country. He has missions to fulfill which his wife doesn't know. One day, during the mission, he met his wife in Thailand. How shall he deal with the sudden appearance of his wife, who have not him yet in Thailand.
Rating: 8/10
Remark: It is abit similar to 'Mr and Mrs Smith' movie.

Jobs (Hollywood Movie 2013)
Synopsis:
This movie discusses the early life of Steve Job's creation of Apple Inc.
Rating: 7/10
Remark: Little interesting show

Riddick (Hollywood Movie 2013)
Synopsis:
Riddick found himself in a unknown planet where there is no humans living there. He is figuring out how he can survive in that planet.
Rating: 7/10
Remark: Decent

Runner Runner (Hollywood Movie 2013)
Synopsis:
A guy who has no money to pay for his university's fee attempt to use his mathematical mind to play poker online. But he lost all. However, he discovered a fraud and attempt to inform this to the owner of the online game.
Rating:7/10
Remark: Decent

Despicable Me 2 (Hollywood Animation 2013)
Synopsis:
A unknown item took an important headquarter located in unknown land with powerful magnets. Top secret police wants to know who did it. It has no choice to hire ex-villain to find out the culprit.
Rating: 7/10
Remark: Decent


Title: The Company You Keep (Hollywood Movie 2012)
Synopsis:
A local reporter for a local newspaper was under pressure to provide interesting stories to the reader. There is a sudden news that FBI arrested a lady who was hidden away from the cops for 30 years. FBI is now on the track finding her partners who were involved in the bank robbery. He checks out and exposed the identity of one of her partner. What kind of story will he want to write on the paper?
Rating: 8/10
Remark: Slow suspense together with comfortable twist of the story, albeit not so sudden.

Title: White House Down (Hollywood Movie 2013)
Synopsis:
A guy is trying to get a job that protects US president in order to make his daughter happy. However, his application was rejected on the ground that he is below par compared to top class university graduates. After interview at the White House, he took his daughter a tour around White House together with official tour guide. Few minutes later, terrorists attacked White House.
Rating: 7/10
Remark: It is somewhat similar to other movie with the same theme although different actions. It is unfortunately that it was produced at the wrong year.

 

Tony Del Piero wrote and posted at at 9:51 pm