Sunday 5 November 2023

Traders Zone: Forex Outlook- EUR/USD Poised for more Upside?

Contributed By: The Big Fat Whale

The news of the week has been the Fed's decision to hold the Fed Rate unchanged, and more importantly, there could be a pivot from their policy (ie: a possibility of rates decreasing). 

However, with inflation still hovering around 4%, that is short of their 2% target. Thus, our view is that the Fed rate should not see a huge drift and would be stabilising at current rates perhaps till the end of the year.

For this forex outlook, our focus will be more on analysing the technical analysis of the major pairs to highlight trading opportunities for the week ahead.


EUR/USD Charting Analysis

Eur/Usd Chart


We look at the 4-hour chart for the EUR/USD, it seems there is a possibility for further upside for the week ahead.

We will be hunting for entries around the 1.065-1.07 region with a stop at 30 pips which is in line with the Average True Range. 

The hint of not only a pause in the hike of the Fed rate but a potential pivot has driven the surge in EUR/USD. They have successfully broken out of their consolidation range for the month of October.

Our target for EUR/USD for the week ahead will be 1.078-1.08 region.


USD/JPY Charting Analysis

USD/JPY chart


Our view of USD/JPY is that the uptrend is still intact. It is indeed a good time to be going to Japan for holidays given the weakness of the Yen. The last time Yen was this weak against the USD was in 1990.

As long as the 148 level holds, we will be looking to place trades on the long side. 

A reversal of the trend would need to see a convincing break below the 148 level.


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The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. The content is not directed to any investor or potential investor and may not be used to evaluate or make any investment. Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stockbroker or financial advisor.

Friday 3 November 2023

Retire in Style for Singaporeans in Malaysia- Johor Bahru

Contributed By: The Big Fat Whale

We believe that the escalating costs in recent times have really made us wonder if retirement is even possible. Do we have to work till much older than the legal retirement age of 63 years old? Are we able to retire in style?

Therefore, quoting from Bruce Lee, we should: "Be like Water", adapt to the conditions and be open-minded about the options available. We can create a greater lifestyle, lower our cost of living and embark on an incredible adventure.

With a lifestyle arbitrage, using the same amount of retirement funds, we could stretch our scarce funds or have an upgrade in living standards.

We decided to start a retirement series with Malaysia as our first coverage.

Our focus will be retiring on Johor Bahru as it might be one of the more viable options for Singaporeans. Other popular spots in Malaysia are Penang, Kuala Lumpur and Malacca.

 Malaysia Long Term Visa

So for a start, we will look at the requirements for a visa to have this sort of living arrangement.

For Singaporeans, there is no need for a visa if you do not intend to stay for a period exceeding 30 days. So in theory, you just have to clear the customs every month in order to renew your 30 days.

We are not sure if there will be issues if you keep crossing the border especially if you are still working. There could be a need for you to pop by your office a couple of days a week.

From the interviewees from this article by Channel News Asia, Work from home in JB: Some Singaporeans are relocating amid border reopening, hybrid arrangements, it seems there should not be too much of a problem with regards to not obtaining visas for Singaporeans intending to embark on this lifestyle.

Nonetheless, for those who want everything sorted out and be by the book, there are two visas that you could find applicable:


Malaysia My Second Home Program

To qualify for this program, the applicant must have liquid assets of at least MYR500,000, a monthly regular income of at least MYR10,000 and make a fixed deposit in a Malaysian bank of MYR300,000, half of which can be withdrawn to buy a house, purchase health insurance or pay for their children’s education.

After two years, part of the deposit may be withdrawn to use the car purchase concession, as long as a minimum balance of MYR150,000 is maintained during the entire stay in Malaysia under the program.

Click Here for the Full Article:

Monday 16 October 2023

Propnex A Value Play- Is Spore Property Prices Correcting?

Contributed by: The Big Fat Whale

  • Propnex is trading at a PE of 11 and a dividend yield of 7.6%
  • They have the largest amount of agents in Singapore
  • Earnings have fallen by 18.8%
  • Propnex Price has dropped 32% from their peak
  • They have an impressive Return on Investment of 37%

Propnex has been a stock on our radar due to its great return on investment metric. Sadly, we have missed the good run that they had over the past 2 years. So with the recent correction in price, is it turning into a value play?

The stock market is a forward-looking proxy for the economy. Is the recent weakness in the price of Propnex an indication of a correction of Singapore Property Prices ahead?

We did an article on a likely property crisis in late 2022, and we still hold to the view that our thesis is valid.

We will dive into the different elements to hopefully unearth some useful insights. More importantly, we would like to know if Propnex at its current level is an investment worth considering.

 Property Price Trend- Singapore

Singapore Private Property Price Index


Let us first have a look at the property price trend in Singapore to have a better feel of the general direction. Looking at the URA Property Index which has done a coverage of private home prices, we are still seeing an uptick in the prices.

There was a slight decrease in 2023Q2 but for 2023Q3, the prices reverted back to their uptrend.

Looking through the charts from 2000, there were 3 evident corrections for the Singapore Property Market. They are in the early 2000s (9/11 and Sars), 2008 (Global Financial Crisis) and 2014 (Euro Crisis).

Singapore HDB Price Index

Source: HDB

The HDB (Public Housing) Price Index is showing an even stronger upward trajectory. There was no drop in prices for 2023Q2.

In essence, Singapore property prices are still in unchartered territories by reaching new highs. Even with the upsurge in interest rates, the government's restrictive policies (literally at 60% taxes for foreigners to buy a property- it has killed the interest of this segment), and big tech layoffs, the property market has remained resilient.

Click here for the Full Article:


Friday 6 October 2023

Is Paramount Warren Buffett’s Greatest Investment Mistake?

Contributed By: The Big Fat Whale 

  • Buffett's Position is Down Close to 60%
  • Streaming Business is still in transition
  • Huge One-Off Losses from Programming Charges of 2.4 billion dollars
  • An Interesting Turnaround Play


Paramount has been on a downward spiral since the start of 2021. Even Warren Buffett's endorsement and investment does not aid in slowing the decline. Berkshire Hathaway, as of this write-up, has a 15.4% stake in Paramount which makes it the biggest shareholder.

Based on Barron's estimate, Berkshire got their Paramount stake (93 million shares) at an average price of close to $30. Based on the current price of $12.5, Buffett is down by close to 60%.

The boiling question will be:

Is Paramount going to be Warren Buffett's Greatest Investment Mistake?


Video Streaming Industry Growth

Video Streaming Growth- Paramount

Source: Statista

We have no doubt the streaming business is an extremely competitive industry. Only Netflix is able to churn out profits at this juncture.

Also, to keep consumers engaged, new content has to be regularly created in order to prevent subscribers from leaving their streaming network. So all these will require massive investments, not unlike the airline business. Amazon has budgeted 15 billion dollars on content creation for 2023.

Statista estimates that the revenue in the Video Streaming (SVoD) market is projected to reach US$95.88bn in 2023. Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 9.47%, resulting in a projected market volume of US$137.70bn by 2027.

Grand View Research is more optimistic and is projecting an annual growth rate of 21.5% till 2030.

Video Streaming Subscribers- Paramount

Source: FlixPatrol

Looking at the subscriber numbers, there is lots of room to grow for Paramount as they are currently in 7th position. With the combination of Paramount+ and Showtime, it would make it a more enticing package for consumers to onboard to Paramount's streaming offer.

However, we are of the view that consolidation is likely as there are just too many players. With the price war to gain market share, it will hurt the bottom line and only the fittest will survive. This explains why only Netflix is able to net a profit, likely due to their economies of scale.

Click Here for the Full Article:

Wednesday 27 September 2023

Will Country Garden Collapse with their Debt Load?

Contributed By: The Big Fat Whale

Recent headlines from major publications such as Reuters, Bloomberg, CNA etc., have painted a bleak outlook for Country Garden. It seems to point that they would likely default on their debt which could potentially lead to a collapse of the whole company.

Country Garden was the largest real estate company in terms of sales in China last year. They generate 96% of their cashflows from real estate sales.

Headline numbers put them in debt of 196 billion US Dollars (1.4 trillion RMB). There have been also delays in the payment of interest on bonds and postponing the repayment of a key loan.

With the slowing of China's economy coupled with inflationary pressure on construction costs, it has been a tough time for China developers. Country Garden is also not in the most ideal target segment, 60% of their property projects are located in 3rd to 4th-tier cities.

This is the segment where prices have fallen the most and the target buyers have low purchasing power.

We decided to have a look at their financials to have a better sense of the situation. Before we move into the numbers, let's look at the background of Country Garden so we can paint a better narrative of their current predicament.

Background of Country Garden

Yang Guoqiang founded Country Garden in 1992 in Beijiao Town, Foshan City. He built the company from scratch, having previously worked as a farmer and on construction sites.

The company now has interests in property development, construction, fitting and decoration, property management, and hotel operations in a wide variety of global markets.

It was listed on the Stock Exchange of Hong Kong in 2007 with its annual sales exceeding RMB100 billion in 2013. The Company made it to the list of Fortune Global 500 for the first time in 2017.

In 2015, Chinese insurance giant Ping An became the second largest shareholder in Country Garden by acquiring 9.9% of the company for US$800 million.

Forest City Johor Bahru

China made up the bulk of their business with 3125 developments as compared to 31 overseas developments. But what we could relate to when we talk about Country Garden, will be their grandiose Forest City Project that is just across the Causeway in Johor Bahru, Malaysia.

Forest City is meant to be a US$ 100 billion dollars development that was hyped up to be a paradise with turtles and white-sand beaches. To date, only US$ 4.3 billion has been invested and housing less than 10,000 residents. It is a far cry from their 700,000 projection.

Click Here for the Full Article:

Wednesday 20 September 2023

Is ARM IPO Overhyped?

Contributed by: The Big Fat Whale

It has been a while since an IPO has rocked the financial markets. The ARM IPO has been the highlight since its launch last week at the price of $51. At a PE of over 100, is it worth a look at or is it simply overhyped? Let's take a closer look.

Giving some backdrop, Softbank took ARM private in 2016 at a valuation of 32 billion US dollars. Based on their listing IPO price of $51, it gives it a valuation of $54.5 billion dollars. Softbank still owns 90% of the company after this share offering.

The demand has been overwhelming with the IPO shares being ten times oversubscribed but it could be due to only 10% of the company being up for grabs. The first day gain was around 25% with the price touching $64.


ARM Business Model

ARM was established in 1990, Arm began as a joint venture between Acorn Computers, Apple Computer, and VLSI Technology. ARM was publicly listed on the London Stock Exchange and the Nasdaq Stock Market from 1998 until 2016 when ARM was taken private by SoftBank Group, our controlling shareholder.

"Our open and flexible business model provides access to high-quality CPU products for a wide range of potential customer types and end markets. We license our products to semiconductor companies, OEMs, and other organizations to design their chips. Our customers license our products for a fee, which gives them access to our designs and enables them to create Arm-based chips. Once a chip has been designed and manufactured with our products, we receive a per-unit royalty on substantially all chips shipped. The royalty has typically been based on a percentage of the ASP of the chip or a fixed fee per unit, and it typically increases as more Arm products are included in the chip. Our business model enables the widest range of customers to access Arm products through an agreement best suited to their particular business needs"

Source: ARM IPO Prospectus

Think of ARM as the architect or designer behind the brain of your smartphone or tablet. They create the blueprint for a type of computer chip called a "processor." This processor is like the brain of your device, handling all the calculations and tasks it needs to perform.

ARM doesn't actually make the physical chips; instead, they license their designs to other companies (like Apple, Samsung, or Qualcomm) who then manufacture the actual chips based on ARM's designs. So they will earn licensing fees for each chip that was produced.

ARM is constantly compared to Nvidia as the two forefront stocks to benefit immensely from the development of the Artificial Intelligence Industry. From what we have read, ARM is more focused on the Central Processing Unit (CPU) whereas Nvidia is focused more on the Graphic Processing Units.

Here are the differences between the two products:

  • CPU: CPUs are essential for general computing tasks, running operating systems, office applications, and tasks that require precise calculations and control. They are the primary computing component in most computers.
  • GPU: GPUs are essential for graphics-intensive applications, including gaming, video editing, 3D modelling, and scientific simulations. They are also increasingly used for AI and machine learning tasks due to their parallel processing capabilities.

In summary, while both the CPU and GPU are vital components of a computer, they serve different purposes and excel in specific types of tasks. CPUs are versatile and handle general computing tasks, while GPUs are specialized for graphics processing and parallel computing tasks. Many modern computers and devices use both CPUs and GPUs to optimize performance and efficiency for a wide range of applications.

A Publication By The Big Fat Whale

Click Here for the Full Article:

Friday 15 September 2023

Golden Village Cinemas as a Value Play?- Revisiting Investment Thesis

Contributed by: The Big Fat Whale

In an earlier article, we have covered Orange Sky Golden Harvest which is listed in Hong Kong. They are the owners of the popular Golden Village cinemas. They also have a presence in Hong Kong and Taiwan. Their latest foray is into China with a 360 theatre in Suzhou that is meant for live performance- it is able to house up to 2700 spectators.

Source: AAStocks

The stock has seen exciting movements after our article, on a quick upsurge to 18 cents in March 2023 from the 6.5 cents level. It has actually reached our target (18 cents) which was highlighted in our report. It was mainly speculative flow as it has since retreated back. The catalyst was mainly due to the newsflow that TVB is getting their stars to do live-stream sales on the Taobao online platform.

This is our recently published book where we touched on how we go about valuing stocks and our insights into the investment world. Authored by a Chartered Financial Analyst, it encompasses 2 decades of experience in the market that is condensed into this book. Hope you can lend support to our website and gain insights into the world of investment by purchasing the Kindle Ebook (Sample Copy) or the Paperback.

Loss More than Doubled

Source: Orange Sky Golden Harvest Announcement

Recently, the company has seen a further drop in prices to a low of 4.6 cents, which could be due to their latest financial results announcement. The headline number is the loss has more than doubled on a half-yearly basis.

However, the loss has more than doubled because there was a non-recurring gain in the first half of 2022 of HK$56.5 million. If we exclude the one-off gain from the disposal of office property, there was actually a 64% reduction in loss. So things are turning better from the numbers itself.

Click Here for the Full Article:

Thursday 7 September 2023

Is it Time to buy Sea Ltd after a 90% Plunge?

Contributed by: The Big Fat Whale

There has been lots of talk about Sea among investors, especially so, with the almost 90% plunge from its peak at around $350. At its peak with a valuation north of 200 billion US dollars in late 2021, SEA dwarfs the valuation of all 3 Singapore banks combined. 

It has been a tough journey for SEA, as their valuations have taken a hit of close to 90%. With such an attention-grabbing drop, it led to us examine if SEA's current valuation is worth a look at.  SEA was highlighted in our recently published book, where it came to our attention when it was just trading at $10, but it has been a rollercoaster ride since then.

There have been many reports on SEA where they went in-depth on their business model, so we will just highlight their 3 main business which is namely: Ecommerce-Shopee, Digital Entertainment- Gaming(Garena) and Digital Financial Services- Maribank, SeaMoney etc. We will be focusing more on their outlook given what we have read so far and based on our analysis of their financial ratios.


Sea Financials

Stock/Price P/EP/BPrice/CashFlowPrice/SalesDebt to EquityInterest CoverageCurrent RatioReturn on Investment

Looking at the financial ratios of SEA, it does not seem to be a real bargain from a value investing point of view. P/E of 86 and even the price to cash flow of 28 don't look like a bargain at this juncture. However, they could just be turning around as Shopee was bleeding in the initial stages but has since managed to churn out a profit on an EBITDA basis. Do note that they were on a huge cost-cutting exercise recently which could have led to the profits in the ecommerce division.

This gives us hope that the trend will persist and with the network effect of their platform, better profitability days are ahead. Sea has been profitable on a net income basis over the last 3 quarters.

Click Here for the Full Article:

Friday 14 July 2023

Fiverr – Investing in the King of Platform for Freelancers

Contributed by: The Big Fat Whale

It has been a treasure-hunting time for battered growth stocks. After our
previous article on Teladoc, this time round we would like to touch on Fiverr. We are trying to shortlist companies that have a proof of concept, a runway for sustainable growth and a sound business model.

Fiverr is a platform that connects freelancers with business owners looking for services in various digital projects, including website design, content writing, and voice-overs. In recent times, even artificial intelligence and data analytics is added to their portfolio of services. Their main competitor would be Upwork and


Growth of the Freelance Market

According to a report by Growth Market Reports, the online market was valued at USD 5.1 billion in 2022 and is expected to reach USD 18.3 billion, expanding at a CAGR of 15.1% by the end of 2031.

The market growth is attributed to the rising adoption of freelance platforms by established companies around the world increasing the talent pool for businesses and providing secured jobs and payments to freelancers.

Source: Fiverr Investor Deck

There is a huge addressable market for freelance services of 247 billion US dollars just in the US and we have not touched the other parts of the world yet which Fiverr have a foothold on. To put things in perspective, Fiverr's revenue for 2022 is just 337 million US dollars.


What is Going Well?

With the world moving more into an open work concept where freelancers and remote working could be part of the human resource set-up. Adding on, the migration of traditional freelancing activity to the online world is just in its infancy with a good growth runway.  The prospect of Fiverr's business model as a platform marketplace for freelancers and employers looks sustainable and viable.

Source: Fiverr Investor Deck

Also, Fiverr has one of the most recognisable brands in the freelance marketplace. Their bigger competitors are Upwork and Their growth metrics such as active buyers and spend per buyer have also been on a good upward trajectory. The average spend is 262 dollars which is lower than their main competitors as Fiverr clients are usually acquiring a one-off service rather than on a long-term project basis.

Click Here for the Full Article:

Saturday 1 July 2023

Is Teladoc a Buy Now?- Revisiting Investment Thesis

Contributed by: The Big Fat Whale

With the growth stocks being in a slum, it is a time for value-oriented investors to go through the rampage and see if there are any potential multi-baggers to be found.  We love to search in out-of-favour sectors and themes, as the margin of safety would be more prevalent.

Previously, we published our research on Teladoc which is almost 1.5 years ago, our closing thoughts were that it was in a sunrise industry with a bright outlook, but despite them falling 60% from $300 to $125, we have our reservations and preferred to stay on the sidelines. We advise you to go through our previous article so as to have a better comprehension of the issues we will be touching on in this article.


It has since fallen by another 80%, from $125 to its current level of $25. The dramatic fall has attracted our attention and we decided to revisit it to see if there could be a change to our initial thesis of staying on the sidelines.

Click Here for the Full Article:

Saturday 6 May 2023

Negative Equity Stocks- Is it An Outright Sell?

Contributed by: The Big Fat Whale

Recently, I have been looking up Oracle's financials to see if it is something that I would add to my watchlist. In a usual filtering process, using value investing metrics such as Price to Book, Debt to Equity and Return on Equity, Oracle would never appear in the list.

The reason being it is having negative equity. In simple terms, when you take their total assets and net off their total liabilities, they are coming in with a shortfall.

So it brings us to the question:

Are Negative Equity Stocks an Outright Sell?

Negative equity stocks, also known as “underwater stocks,” are shares of companies that are trading below their book value or the total value of their assets. In other words, if a company has more liabilities than assets, it can result in negative equity. While negative equity might seem like a cause for concern for investors, there are situations where it may not necessarily be a bad thing.


Why Negative Equity Might Be a Cause for Concern?

Negative equity can often be a red flag that something is not right with a company. It could indicate that the company has taken on too much debt or made poor investments, leading to financial troubles. In such situations, the company may struggle to pay off its debts and interest, which can lead to bankruptcy.

Negative equity may also be a sign of declining or stagnant revenues. If a company is losing money and not generating enough cash to cover its operating costs, it could result in a negative equity situation. This may be due to increased competition, changing market conditions, or poor management decisions.


Why Negative Equity Might Not Be a Bad Thing?

While negative equity might be a cause for concern in many cases, there are situations where it may not necessarily be a bad thing. For instance, a company with negative equity may have a large number of intangible assets, such as patents or brand value, that are not reflected in its book value. Such companies may be worth more than their current market value, even if their book value is negative.

Say, for example, McDonald's is one of the world's most recognisable and valuable brands, the brand value is estimated at 42 billion dollars. On their books, it is only valued at less than 2 billion dollars.

The value will only emerge when the business is sold with the total brand worth (the additional 40 billion dollars) highlighted as goodwill in the acquiring company accounts.

Market Values vs Book Values (In Millions) - Credit: OShaugnessy Asset Management

Also, when companies are acquiring other companies, the intangible assets/goodwill would be subjected to writing off on a gradual basis. So using back the McDonald's example, the 42 billion dollar brand value would see a write-off every year, despite the Mcdonald's brand value might be getting more valuable through advertising strategy and etc. The effect on the financial statements would be lower profitability and hence lower book value.

The company could also be buying back their shares in an aggressive mode or paying back huge dividends that would have an impact of turning the company into a negative equity situation. Even Apple, thou it is not in negative equity, Apple has negative retained profits as the company have been aggressively buying back its shares for the past few years.

Another reason why negative equity might not be a bad thing is when a company is undergoing a turnaround or restructuring. If a company is making strategic changes to its operations, such as selling off unprofitable divisions or reducing debt, it may be able to improve its financial position over time. In such cases, investors may see an opportunity to buy the stock at a lower price before it turns around.


Are Negative Equity Stocks an Outright Sell?

From a Singapore market perspective, I believe it is usually the case as negative equity stocks are not very common. It is negative equity for the right and logical reason, which translates to the company being in distress.

However, the US markets have lots of good quality companies that have been in negative equity situations at some point in time. Some examples will be Home Depot, McDonald, Yum Brands and Oracle.

Instead of writing a negative equity stock off, if the company have strong branding or is an established name, we should look beyond the trees. There could be other metrics such as revenue growth, profit growth, interest coverage and positive operating cash flow that we could look into. If there is a contradiction to the base thesis for the negative equity scenario which is a red flag by itself, we should revisit the investment decision.

As for Oracle, I am still in the midst of my research. The huge negative equity figure could be due to their huge acquisitions through the years and goodwill have to be written off that could have led to a negative equity situation. After saying that, their acquired companies could be worth more than what they are acquired at which the negative equity is more an accounting exercise than what Oracle is actually worth.

Given that their software solution and Java program create a sustainable moat for the company, I will not be too bothered by the negative equity situation. Nonetheless, at a PE of 30, there could be a better entry level.

To sum up, being in negative equity does not mean it will be an outright sell but more due diligence would be needed if the company is an attractive investment based on its growth and earnings prospect.


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The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. The content is not directed to any investor or potential investor and may not be used to evaluate or make any investment. Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stockbroker or financial advisor.