Investment Commitments

I am reading my M5 textbook and I finally come across something which is useful. Ops.

The Know Your Client states that in order for a financial advisor to make a recommendation, he needs to understand the client's investment objectives, financial situation and particular needs. From there, the financial advisor needs to carefully curtail a plan for the client.

This brings me to Investment Commitment. Are you able to commit money to invest on a regular basis? If yes, then you can harness the advantage of dollar cost averaging. I had an unfair advantage because since 2009 onwards, I was the Constant Cashflow Investor. I have strong net income (in my context) which comes in on a monthly basis and I will use them to acquire financial assets. I have a high saving ratio as I live frugally. I am quite proud of how I allocate resources most of the time. Hence, it is possible for me to get out of a "bad" investment (temporary having paper loss), I can choose to continue to buy more and average down the cost. Using this approach, I have seldom lose money and able to either i) grow the portfolio by acquiring more or ii) take dividend while waiting for stock to rise back up and reinvest to compound it further.

I will soon become the second type of investor because there is no income from employment. This is the Lumpsum Investor. They do not have constant income and they rely on an one-time investment, park it there and forget about it. Then how should this type of investor plan the investment game? There are a lot of experts who will recommend going in based on stages. For instance, pump 20% first, if it drops another 10%, pump into another 20%, so on and so forth. However, will it be a concentrated move or diversified investment? This is a tough call. I will think that if you do not have a strong stock broker to work with or you do not good investment skills, just buy ETF. Stagger the lumpsum into the ETF and reinvest the dividend. You should be able to get above average returns. Does this mean I will go into ETF? Yes, if I cannot get above average returns. Alternatively, I will use ETF to invest in countries such as Russia and China. 

Now I am going back to my studies, continue reading page 63 of 519. What a way to spend my Friday evening.

Switching Works!

Recall from my previous Post that I made a major position switching. I sold 20 lots of OCBC at an approximate loss of SGD 9,200 excluding brokerage fees. I took the sum of money and went into stock M. If you follow Hong Kong stock, you will be able to decipher which counter it is. I bought a total of 26 lots in stock M.

On 22nd March 2017, I sold 5 lots as I need to set aside some money for my remaining lumpsum mortgage loan payment.  On 30th March 2017, I sold another 5 lots at 43.85 and 9 lots at 43.9, this is an one-off example that instead of holding on a stock which is losing money, you can cut loss and switch to another stock which can be either:

1) undervalued
2) special situation trade
3) dividend play

The breakeven point for the switching move which I estimated was at about $42, for the 14 lots (those sold on 30/3/2017) which are about $2 higher than the break even point, I consider that as I had already pocketed the equivalent to the special dividend amount. The special dividend will only be issued on 19th May for $2.2 and normal dividend for $0.8. For information, this counter is currently overvalued.

Currently, this move is already profitable and I have covered my previous losses. Before I sold any of stock M, I have 33 lots. I will let the remaining 14 lots continue to run and see whether it will break through its major resistance. When it is closer to May, I will pare down the remaining 14 lots. Whether I will sell 10 lots and keep 4 lots or sell all will be decided later. 

After the sell down, I will switch to another Hong Kong counter. My current HK portfolio is about half a million worth of SGD, HKD is taking a hit recently with the noises in USA due to Trump. I am confident US economy will continue to strengthen and dollars will continue to go up. 

12/4/2017 Update

Recently there are geopolitical tensions in the region. I have not seen any opportunity to acquire more shares yet. I sold another 4 lots of stock M at $44.70 and I am left with 10 lots.

Recently, I am reading a few new books and revisit some of the old books while traveling on train to work. I need to revise my strategy after discussing with my mentor.

Till date, net gain about SGD $9k.  

20/4/2017

I started my new role and decided to cash out a I did not want to look at stocks during office working hours.

After selling my holdings in stock M. I decided to shift the money to buy one US stock. The only good thing from this move is I have recovered my capital (excluding the dividend from OCBC) and I am able to shift the funds to other stock counter.

This is the only single counter which I am shifting, the rest of the portfolio remains untouched. I will just hold and wait.

I always believe in fully invested.

 *Past performance does not guarantee future results

Retrenched!

22/3/2017
At 4.30pm today, my managing director called me into the room and explained to me that due to the current activity levels in the Asia Pacific market, the company had no choice but to close the Singapore office.

We discussed slightly on the compensation issue. 

I finally received the letter of retrenchment. I was made redundant according to the letter. I had written in my Evernote in 2015 "I will make myself redundant when I turn 35." I prayed about it. I did not know God will answer my prayer in his way. It is pretty spot on. My effective date will be 1st April and I need to serve a month's notice. I will turn 35. 

28/3/2017
Today I passed my M1A. It was a close shave because I only prepared based on the CMFAS exam papers.


Two more papers M5 and M6A. 

For the rest of the evening, I spent some quality time with my sister and my nephews. I used to have more time with the elder nephew when I was not yet married with a kid. During the car ride with my sister, she told me she wanted to pay down her house in order to buy another condo. The rationale is to buy a place near to a school which she wants her sons to attend. To me, that is silly but important in the eyes of Singaporean parents. She is committing to two properties which will cost her say $2m. For instance, she moves to the new place and rent out her existing place, the yield will be 2-3% (based on my previous post on the yield of a condominium) and she continues to slave for her 2nd place. Both of my sis and brother in law are specialised professionals in the healthcare sector which provide them with high and stable income. If they only know how to a bit smarter with their money, they will easily surpass me in terms of net worth within a few years. Been a bit smarter, I mean putting money to work harder for them instead of putting them in fixed deposit and intend to pay down the house.

I know they will be rich as her husband's skill set is highly sought after and he operates on one of the most critical organs.

Due to all the exams and administrative stuff, I did not get to follow up much with Singapore market and just eyeing on two of my Hong Kong shares. I sold my 5 lots of one of the stock to lock in some profit. Another 28 lots to go. Take it slowly. The trend is intact and hopefully, a breakout will be seen in days to come. My US portfolio was not affected at all even with all the Trump drama. That is the beauty of having a portfolio which you can sleep soundly at night. 

I bought USD 201 worth of books from Amazon. I need to devour more books than before. Another USD 200 worth of books which I saved for a later purchase date. I have reserved USD 400 for my reading and learning budget. 

A temporary situation

From the movie Sing, Meena said, "I would, I just get so scared." Mr Moon replied her,"You know how to get over right? Do what you love then you'll be great, cause you won't be afraid anymore because you'll actually be doing it, right? Don't let fear stop you from doing the thing you love." You know the problem with hitting rock bottom, there is only one way and that's up.



First, allow me to share a story I found online.

He is the founder of a listed company who is filthy rich. One day, he decided to take a bus to appreciate the lives of normal people. He boarded a bus and took a seat beside the window. He is curious about the people around him on the bus, there was a pregnant lady standing right in front of him and an old woman sat behind him. Everyone squeezed in the bus and surprisingly looking very happy.

Suddenly he heard a sharp remark. "Get up from the seat, do you still considered yourself a gentleman? There is a pregnant lady here who needs this seat!" The rich man saw that the voice came from an ugly-looking girl who continued her rattle, " Yes you, I am referring to you." Soon everyone on the bus was looking at him, he felt very embarrassed. He immediately got up from his seat and gave it up to the pregnant lady. At the next stop, he alighted. Before he got off, he stared at the ugly girl with a loathsome look.

The girl came to his company for an interview, he decided to teach her a lesson. He joined in as part of the interview panel. The girl immediately recognised the man and she was worried. She was feeling cold sweat running down her forehead. The founder told her," Help the five of us to polish our shoes and you will be hired."

She stood there and paused for a long while.

The situation back at home is turning desperate and she needs to put food on the table. She needed this job. She is highly educated and equipped with the right skill set. However, due to her looks, there were a lot of companies which turn her down.

She just needs to let down her ego and the job will be hers. How can she trade her ego for the job?

The founder was thinking that she will never agree to this. 

Never did he expect that she agreed to do it.

She came back with shoe brushes, kneel down and began to clean the shoes of the interviewers. The founder was thinking," Is that all you got? In the end, you still need to succumb to this..." Realisation starts to hit him, he felt that he has gone overboard. Although the girl had humiliated him, her intention was good. He asked his subordinate to pass him the candidate profile of this girl, it is apparent that she is very outstanding from all aspects. He is a man of words and he hired her on the spot. 

She did not express any excitement upon hearing the news. She just smiled and said," Thank you." Then she told the founder, "I have cleaned 5 pairs of shoes, each pair cost $2, please pay me $10 now. I need to be paid this first before I can turn up for work." He did not expect this and took out a note. The girl passed this note to an old woman who is cleaning the street. The founder saw this scene from afar and started to respect her.

Although the girl was been insulted and put in a difficult situation, she was able to get out of the situation gracefully.

The girl was outstanding and she excelled at work. The founder spoke to her, "Back then, when I put you in the difficult situation, what's on your mind?" 

She replied, "When I kneeled down, I just want an opportunity to lift my head high up."

When you are in a similar situation which you need to kneel down humbly, it does not mean that you lose your dignity forever. It is a temporary situation, the lower you bend and the higher you will bounce back.

This story serves to remind me how I was humiliated today. 

Depends on which side of the coin you are looking at

I was reading the Straits Times titled "Young Asian adults likely to face cash crunch in retirement" by Lorna Tan and it was mentioned nearly one-third (30 percent) of millennial investors expect to run out of money later in life. Mr Michael Dommermuth, Manulife's head of wealth and asset management said," While previous generations relied heavily on real estate for their retirement fund, economics and demographics mean that today's millennials need to take a different approach." Young people today will need to start saving, and investing, sooner rather than later. 

My parents' generation relied on properties to help them grow their first pot of gold. The condominium cost only S$500k in 2002 for a 2 bedder + 1 study 1080 sqft in the suburban. Today it can command about S$1,000k in 2017 based on today's market. That's a whopping 100% return. However, you need to look at the economical status of the country at this present moment. Does it seem like a developing stage? Or is it fully developed? In the 1960, a GCB cost about $10k and it will become $20m in today's context because of the inflation and the growing of the nations. However, going forward with the moderate to slow growth, how far can the property market move? With the ageing population, how far can the property market move? Yes, let's open up the flood gate and increase our population to 7m, maybe our property market will see a new high? My personal view is depressing times for the property market ahead.

Interestingly, if you look at PropertyGuru "Singapore millennials look to property for financial security" by Romesh Navartnarajah, it chooses to focus on 68 percent of Singapore millennials plan to purchase a property, with two out of five doing so to generate rental income. Despite having the lowest satisfaction with rental yields in Asia, Singapore millennials (aged between 25 and 34) favour investing in property to achieve financial security, reported the Business Times, citing the Manulife Investor Sentiment Index Survey. 

Recently, we rented out our parents' condo, we realised that there are other hidden cost which will drastically affect your yield. Rental income will be added to your based income which will be taxable. A rented out property will command a higher property tax. You still need to pay for your maintenance fees. Unless you bought the condo at the range of 500-700k range, you will not get a decent yield. Using recent years quantum as a basis, if you buy a 1m condo, less all miscellaneous cost, a net rental income of 2.5 k/month is 3% yield.  You can easily achieve this by buying a property counter or a REIT and save all the headache of been a landlord.

92 Quotes from The Most Important Thing by Howard Marks

Courtesy from 
http://www.arborinvestmentplanner.com/quotes-the-most-important-thing-howard-marks/

92 Quotes From The Most Important Thing

“Successful investing requires thoughtful attention to many separate aspects, all at the same time. Omit any one and the result is likely to be less than satisfactory. (ix)

To me, risk is the most interesting, challenging and essential aspect of investing. (x)

No rule always works, the environment isn’t controllable, and circumstances rarely repeat exactly. Psychology plays a major role in markets, and because it’s highly variable, cause-and-effect relationships aren’t reliable. (1)

First-level thinkers look for simple formulas and easy answers. Second-level thinkers know that success in investing is the antithesis of simple. (4)

You can’t do the same things others do and expect to outperform. (5)

Most people are driven by greed, fear, envy, and other emotions that render objectivity impossible and open the door for significant mistakes. (12)

Inefficient markets do not necessarily give the participants generous returns. Rather, in my view that they provide the raw materials — mispricings — that can allow some people to win and others to lose on the basis of differential skill. (13)

Let others believe markets can never be beat. Abstention on the part of those who won’t venture in creates opportunities for those who will. (14)

The choice isn’t really between value and growth, but between value today and value tomorrow. Growth investing represents a bet on company performance that may or may not materialize in the future, while value investing is based primarily on analysis of a company’s current wealth. (19-20)

Investors with no knowledge of (or concern for) profits, dividends, valuation, or the conduct of business simply cannot possess the resolve needed to do the right thing at the right time. (22)

Establishing a healthy relationship between fundamentals — value — and price is at the core of successful investing. (24)

Bottom Line: there’s no such thing as a good or bad idea regardless of price! (25)

Investor psychology can cause a security to be priced just about anywhere in the short run, regardless of its fundamentals. (27)

Investing is a popularity contest, and the most dangerous thing is to buy something at the peak of its popularity.  (27)

The safest and most potentially profitable thing is to buy something when no one likes it.  (27)

All bubbles start with some nugget of truth.  (28)

Unfortunately, the greater fool theory only works until it doesn’t. Valuation eventually comes into play, and those who are holding the bag when it does have to face the music. (28)

Risk means more things can happen than will happen. (31)

The possibility of permanent loss is the risk I worry about. (36)

Skillful investors can get a sense for the risk present in a given situation. They make that judgement based on (a) the stability and dependability of value and (b) the relationship between price and value.   (39)

Return alone—and especially return over short periods of time—says very little about the quality of investment decisions. (44)

Recognizing risk often starts with understanding when investors are paying it too little heed.  (46)

The value investor thinks of high risk and low prospective returns as nothing but two sides of the same coin, both stemming primarily from high prices. (47)

Awareness of the relationship between price and value—whether for a single security or an entire market — is an essential component of dealing successfully with risk. (47)

So a prime element in risk creation is a belief that risk is low, perhaps even gone altogether. That belief drives up prices and leads to the embrace of risky actions despite the lowness of prospective returns. (48)

The degree of risk present in a market derives from the behavior of the participants, not from securities, strategies, and institutions. (49)

The risk-is-gone myth is one of the most dangerous sources of risk, and a major contributor  to any bubble. (49)

When worry is in short supply, risky borrowers and questionable schemes will have easy access to capital, and the financial system will become precarious.  (50)

Too much money will chase the risky and the new, driving up asset prices and driving down prospective returns and safety. (50)

Investment risk comes primarily from too-high prices, and too-high prices often come from excessive optimism and inadequate skepticism and risk aversion. (50)

When everyone believes something is risky, their unwillingness to buy usually reduces the price to the point where it’s not risky. (55)

When everyone believes something embodies no risk, they usually bid it up to the point where it’s enormously risky. (56)

High quality assets can be risky, and low quality assets can be safe. It’s just a matter of the price paid for them. (56)

Risk control is the best route to loss avoidance. Risk avoidance, on the other hand, is likely to lead to return avoidance as well. (65)

The road to long-term investment success runs through risk control more than through aggressiveness. (66)

Most investors’ results will be determined more by how many losers they have, and how bad they are, than by the greatness of their winners. (66)

Skillful risk control is the mark of the superior investor. (660

You can’t predict. You can Prepare. (67)

Most things prove to be cyclical. (67)

Cycles will never stop occurring. If there were such a thing as a completely efficient market, and if people really made decisions in a calculating and unemotional manner, perhaps cycles (or at least their extremes) would be banished. But that’ll never be the case. (71)

When investors in general are too risk-tolerant, security prices can embody more risk than they do return. When investors are too risk-adverse, prices can offer more return than risk. (75)

The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological. (80)

There’s only one way to describe most investors: trend followers. Superior investors are the exact opposite. (91)

The proper response lies in contrarian behavior: buy when they hate ‘em, and sell when they love ‘em.  (93)

Investment success requires sticking with position made uncomfortable by their variance with popular opinion. (94)

The ultimately most profitable investment actions are by definition contrarian: you’re buying when everyone else is selling (and the price is thus low) or you’re selling when everyone else is buying (and price is high).  (95)

The thing I find most interesting about investing is how paradoxical it is: how often the things that seem most obvious—on which everyone agrees—turn out not to be true. (95)

What’s clear to the broad consensus of investors is almost always wrong. (95)

The very coalescing of popular opinion behind an investment tends to eliminate its profit potential. (95)

If everyone likes it, there’s significant risk that prices will fall if the crowd changes its collective mind and moves for the exit. (96)

Large amounts of money aren’t made by buying what everybody likes. They’re made by buying what everybody underestimates. (96)

In dealing with the future, we must think about two things: (a) what might happen and (b) the probability that it will happen. (97)

Following the beliefs of the herd will give you average performance in the long run and can get you killed at the extremes. (97)

The error is clear. The herd applies optimism at the top and pessimism at the bottom. (98)

It’s not what you buy; it’s what you pay for it. (102)

A high quality asset can constitute a good or bad buy, and a low quality asset can constitute a good or bad buy. (102)

The necessary condition for the existence of bargains is that perception has to be considerably worse that reality. (105)

It’s essential for investment success that we recognize the condition of the market and decide on our actions accordingly. (108)

One way to be selective is by making every effort to ascertain whether we’re in a low return environment or a high-return environment. (110)

When prices are high, it’s inescapable that prospective returns are low (and risks are high).  (111)

You want to take risk when others are fleeing from it, not when they’re competing with you to do so. (113)

High-return environments offer opportunities for generous returns through purchases at low prices, and typically these can be earned with low risk. (113)

Patient opportunism, buttressed by a contrarian attitude and strong balance sheet, can yield amazing profits during meltdowns. (115)

There are two kinds of people who lose money: those who know nothing and those who know everything. (116)

We  may never know where we’re going, but we’d better have a good idea where we are…..and act accordingly. (125)

Randomness contributes to (or wrecks) investment records to a degree that few people appreciate fully. As a result, the dangers that lurk in thus-far-successful strategies often are underrated. (135)

The correctness of a decision can’t be judged from the outcome. (136)

Several things go together for those who view the world as an uncertain place: healthy respect for risk; awareness that we don’t know what the future holds; an understanding that the best we can do is view the future as a probability distribution and invest accordingly; insistence on defensive investing; and emphasis on avoiding pitfalls. To me that is what thoughtful investing is all about.  (140)

You can’t simultaneously go all out for both profit making and loss avoidance. Each investor has to take a position regarding these goals, and usually that requires striking a reasonable balance.  (141)

The bottom line is that even highly skilled investors can be guilty of mis-hits, and the overaggressive shot can easily lose them the match. Thus, defense — significant emphasis on keeping things from going wrong — is an important part of every investor’s game. (143)

Defense actually can be seen as an attempt at higher returns, but more through the avoidance of minuses than through the inclusion of pluses, and more through consistent but perhaps moderate progress than through occasional flashes of brilliance. (145)

There are two principal elements in investment defense. The first is the exclusion of losers from portfolios. The second element is the avoidance of poor years and, especially, exposure to meltdown in crashes. (145)

Investment defense requires thoughtful diversification, limits on the overall riskiness borne, and a general tilt toward safety. (146)

Low price is the ultimate source of margin for error. (147)

I believe in many cases, the avoidance of losses and terrible years is more easily achieved than repeated greatness, and thus risk control is more likely to create a solid foundation for a superior long-term track record. (151)

Investing scared, requiring good value and a substantial margin for error, and being conscious of what you don’t know and can’t control are hallmarks of the best investors I know. (151)

A portfolio that contains too little risk can make you underperform in a bull market, but no one ever went bust from that; there are far worse fates. (153)

This book is more about philosophy and mind-set than it is about analytical processes. (154)

Extremes in cycles and trends don’t occur often, and thus they’re not a frequent source of error, but they give rise to the largest errors. (154)

The power of herd psychology to compel conformity and capitulation is nearly irresistible, making it essential that investors resist them. (154)

At important turning points, when the future stops, being like the past, extrapolation fails and large amounts of money are either lost or not made. (155)

Understanding and anticipating the power of correlation — and thus the limitations of diversification — is a principal aspect of risk control and portfolio management. (156)

The failure to correctly anticipate co-movement within a portfolio is a critical source of investment error.

When capital is in oversupply investors compete for deals by accepting low returns and a slender margin of error. (159)

Bidding more for something is the same as saying you’ll take less for your money. (160)

The best defense against loss is thorough, insightful analysis and insistence on what Warren Buffett calls “margin for error”. (160)

Leverage magnifies outcomes but doesn’t add value. (161)

Asymmetry — better performance on the upside than on the downside relative to what your style alone would produce — should be every investor’s goal. (172)

To achieve superior investment results, your insight into value has to be superior. Thus you must learn things others don’t, see things differently or do a better job of analyzing them — ideally, all three. (173)

The relationship between price and value hold the ultimate key to investment success. (174)

Because of differences in correlation, individual investments of the same absolute riskiness can be combined in different ways to form portfolios with widely varying total risk levels. (177)

A diversified portfolio of investments, each of which  is unlikely to produce significant loss, is a good start toward investment success.” (177)

Philip Fisher - Fifteen Points to Look For in A Common Stock

Point 1 - Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?

Ignore one time gain, it needs to be sustainable increase in sales. Also, it needs to consider the industry cycle. If the industry is at its infant stage, there is a lot of growth. Once it reaches the plateau, there will be minimum growth, follow by decline. When Iphone first introduced to the market, Nokia phone went into decline stage. However, after years of extraordinary growth, other competitors start to enter the market, for example, Xiaomi and Samsung want to have a piece of the market share.

You need to believe in the company's future sales curve. If a company's management is outstanding and the industry is one subject to technological change and development research, the shrewd investor should stay alert to the possibility that management might handle company affairs so as to produce in future the type of sales curve, this is the first step towards choosing an outstanding investment.

Point 2 - Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?

The management will improve old products and develop new ones. The investor usually obtains the best results in companies whose engineering or research is to a considerable extent devoted to products having some business relationship to those already within the scope of company activities. Point 2 focuses on management attitude. Does the company recognise in time it will almost certainly have grown up to the potential of its present market and that to continue to grow it may have to develop new markets in new future?

Point 3 - How effective are the company's research and development efforts in relation to its size?

On the surface, it requires comparison of the research expense with respect to sales and whether this creates a competitive advantage over other competitors. The management needs to coordinate diverse technical skills into a closely knit team and stimulate each expert on that team to his greatest productivity the only kind of complex coordination upon which optimum research results depend. In addition, the coordination with top management is critical to maximise efficiency of commercial research.

Point 4 - Does the company have an above-average sales organization? 

Without sales, the company's survival is impossible. Many things are important to corporate success, sales, production and research are important elements. For steady long-term growth, a strong sales arm is vital.

Point 5 - Does the company have a worthwhile profit margin?

High-profit margin is often eroded when new competition enters the market, increase in cost and other various reason. If you observe that the company is able to maintain high-profit margin over the years, it is a good sign that the company possesses a strong competitive advantage. Stay away from low-profit margin or marginal companies.

Point 6 - What is the company doing to maintain or improve profit margin?

Certain companies manage to improve profit margins by capital improvement or product engineering improvement. They aim to reduce costs to offset the rising trend of wages. The investors should give attention to the amount of ingenuity of the work being done on new ideas for cutting costs and improving profit margins.

Point 7 - Does the company have outstanding labor and personnel relations?

An investor should be sensitive to the attitude of top management toward the rank and file employees. Workers are readily hired or dismissed in large masses, dependent on slight changes in the company's sales outlook or profit picture.  Nothing is done to make ordinary employees feel they are wanted, need and part of the business picture. Management with this type of attitude does not usually provide the background for the most desirable type of investment. 

Point 8 - Does the company have outstanding executive relations?

The company offering greatest investment opportunities will be one in which there is a good executive climate.

Point 9 - Does the company have depth to its management?

Once a company reaches a size where it will not be able to take advantage of further opportunities unless it starts developing executive talent in depth. Does top management welcome and evaluate suggestions from personnel even if, at times, those suggestions carry with them adverse criticism of current management practices?

Point 10 - How good are the company's cost analysis and accounting control?

Only when the company is able to capture a clear picture of financial status, with precise knowledge of true cost in relation to other factors, then they can establish correct pricing policies, focus special attention for planning.

Top management needs to understand the importance of accounting controls and cost analysis.

Point 11 - Are there other aspects of the business, somewhat particular to the industry involved, which will give the investor important clues as to how outstanding the company may be in relation to its competition?

Look at the lease of the land, building, insurance cost relative to others, patents and other competitive advantages.

Point 12 - Does the company have a short range or long range outlook in regard to profits?

Relate this to a salesman, whether he is here to build a relationship with you to serve you on a long term basis or he is just here for the quick bucks. The difference in treating the customers is noticeable.

Point 13 - In the foreseeable future will the growth of the company require sufficient equity financing so that the large number of shares then outstanding will largely cancel the existing stockholders' benefit from this anticipated growth?

If borrowing power is not sufficient, however, equity financing becomes necessary. The attractiveness of the investment depends on careful calculations as to how much the dilution resulting from the greater number of shares to be outstanding will cut into benefits of existing shareholders.

Point 14 - Does the management talk freely to investors about its affairs whe things are going well but "clam up" when troubles and disappointments occur?

How a management reacts to circumstances can be a valuable clue to the investor. The management that does not report as freely when things are going badly as when they are going well usually "clams up" in this way. There is no sense of responsibility to stockholders.

Point 15 - Does the company have a management of unquestionable integrity?

This is by far the most important question. Integrity speaks more than any other issues presented.

EMAS Chiyoda files for Bankruptcy Protection

EMAS Chiyoda Subsea (ECS) has filed for voluntary petition for Chapter 11 in the United States Bankruptcy Court in Houston, Texas.

You can read more here. 

You can also read my post why I want to sell out my banks' positions. ECS carries a smaller set of the debt for Ezra, largest unsecured claims show DBS with claims of around $84.6m and OCBC with $13.1m. 

Will this have a domino effect? We shall see.