"Alternative" investment

The term 'alternative' is very vague.  On Wednesday, we attended a super seminar.  One of the presenters showed how profitable it can be to invest in alternatives during financial crisis.  The lady who presented the talk mentioned private equity and contrarian fund managers.

However, she pointed out that "AQR" is not performing that well recently.  While lots of trades are done today using computer algorithms, mine is basic, basic, basic.  My father's philosophy still reverberates in me.  He bought when others were selling but he only bought stocks that deliver good dividends.  These are stocks that reward with dividends that are higher than interest earned on the same capital.  In the last few buying, I bought SYD and WBC for its consistent dividends.  Investors have been dumping them.

I also buy based on value.  Hence TAS is my favourite top-up stock.  Read my postings on EDE/TAS.

While the above stocks have turned positive for me, FLN has not.  However, based on what I read on its announcement, I wonder why its investors are dumping it.  Until the message is clearer, I would preferentially invest in dividend stocks and... TAS!

Overall, over the last 5 months, I think I have well :-)

Sydney Airport

Some expert nuts in some financial institutions opined that Sydney Airport was overpriced and asked their clients to sell.  So the share price has fallen significantly over the last 2 months.

Perhaps they have a special crystal ball... but did they predict a fall in arrival numbers?  The most recent figures show foreign visitors and local travellers have jumped in numbers without any dip consistently for as long as I have been reading the figures.

So, I ignored those 'expert soothsayers' and may live to regret it ;-)  I didn't sell, in fact, I bought more when the price dipped a lot.

TAS EDE

TAS owns just over 40% of EDE, with no debt.  Hence, its market capitalization should be worth at least 40% of EDE.  Based on simple arithmetic, one TAS share should work out to be worth 150% of EDE share price.  That also means that if the share price of EDE is up 2c, then TAS price should jump by 3c.  This is very basic ratio!

But today, EDE is up by 2c and TAS is up by 1c.  Why would anyone buy EDE when they can get a bargain with TAS?  I have left my EDE shares alone and topping up on TAS.  I put a low bid at 15.5c but it only dipped down to 16c in the last few weeks...

I can't say I am unhappy as the rise in TAS share price has made me profit out of severe loss in the last few years.  Of course, the rise is based on EDE upwards trajectory.

Panic attack

No, not me but the stock markets around the world.

Having a dangerous president is different from having politicians running the House of Congress and the Senate.  Suddenly, the markets realize that Trump cannot destroy the system single-handedly.  A lot of damage will be inflicted but the world goes on.  In fact, China may take up the leadership when the USA chooses to bury its head in the sand.

Consequently, yesterday, I become extra share owner in WBC, FLN and FBR because of the share price plunge.  But it looks like recovery today.  Only Mexico fared badly.

Throwing good money after bad stocks... or buying to lower the average buy price

Lots of small companies seek to raise capital when they are nearly broke or running out of cash.  However, if it is a good company with a strong reason for doing so, it is crazy not to support it.



MLX raised some fund recently but after buying into the rights, it tumbled... only to rise above the issue price.

Also, I have recently (last few months) topped up in ERM, GGG, SGQ, TAS when good news were declared.  Most have been heavy losses but there was no compelling reason to sell.  ERM went up by 3x in 4 months, GGG by 70%, SGQ by 20% and TAS is difficult to calculate due to multiple purchases from 13-25c.

Of course, I have made some bad choices too like NMT and FLN but hopefully they will turn around.

I am glad sometimes that I am brave... but it could have been "stupid"!

Medibank

I hold no shares in Medibank; nor do I intend to.

If it makes too much profit, its clients would complain bitterly... and the paymaster (the government) will realize that it paid too much out.

In addition, I find it puzzling that about a quarter of private patients are claimed by the company to be with it, yet this is not borne out in my patient population.  It is true that in the past, a lot of patients were insured with Medibank private but the dropout has been phenomenal since privatisation.

A few months ago, Healthscope was reputed to be good for people to invest in by some idiotic stock brokers' analysis.  Yet, I can see the decline in the number of cases in the private hospital I work in.  How those dills do their research, sitting in their offices, is beyond me.  Sure enough, recently its share price plunge but the CEO thinks it is an over-reaction.

Medibank announced a good profit today but accounts for disproportional number of complaints.  Well, if I own shares in it, it is very hard to imagine how it can continue to increase its profit when membership is declining.  However, I must say that this is what I observe and it is not a scientific research.