Dec 2013 NAV per unit = S$508.55
Dec 2012 NAV per unit = S$465.32.
The end of the year seems like a good opportunity to take stock and carry out a review of what went right and wrong.
A key mistake is SMRT.
1) There is a lack of understanding of the details of the business. The core business revolves around maintaining our public transport in Singapore. In fact, this is implicitly assumed. Based on the annual report, there is a lack of emphasis on engineering and maintenance but on financial returns. I should have picked this up during my analysis of the company.
2) There is a lack of effort done to critic the management of the company. SMRT is a company with its core business revolving around engineering and maintenance. This company should naturally be ran by management familiar with these principles. Needless to mention, there is a lack of technical personnel in the senior management.
3) This company provides public service and revenues are closely tied to the recommendations of the Public Transport Council. Any fare increase to offset business cost can be hampered due to various reasons (such as political motivation during election period). The upside of the business is therefore limited.
Unfortunately, there are no major investment success this year. I did not manage to identify the big winners in our market to make huge investment returns.
Coming 2014, I will focus on the following methodology to increase the returns of my investment.
Firstly, the investment will be made from a top down approach. Identify the key investment sectors that will benefit from the macro trends and business will benefit from it.
Secondly, perform financial analysis to gauge the operating efficiency and financial attractiveness of the investment.
Lastly, enter the position at the right price. Its all about price
Wish all readers a wonderful year of investment in 2014. Watch out for the hike in fed funds rate. It will be an incredible opportunity for investors !
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