Green Investing..... making impact with your money

Recently, I watched a documentary titled "An Inconvenient Sequel: Truth to Power " by former Vice President Al Gore. This film is about making an impact on climate through government supports on  policies change and corporate's responsibility. Really good enlightenment  movie and I would encourage everyone to watch it if you really care about Mother Earth.

I'm not going to give a long lecture on climate change here in my blog. I will let the movie do all the talking. So, what can we as investors do to make a different for our environment? The answer found in "Green Investment" or "Eco-Investment" which gaining popularity in recent years.

           Eco-investing or green investing, is a form of socially responsible investing where investments are made in companies that support or provide environmentally friendly products and practices.

Putting your hard earned cash in companies that invested heavily on environment initiatives doesn't means it will not be highly profitable. Looking back at my past investments in those companies that give me some of the be best returns. Plus, you will gains more than just dollars in long run. The keywords is "Sustainability" for long term. Some examples of my green investments:

Starbucks - plans to create 10,000 eco-friendly stores globally by 2025, eliminate single used plastic straws by 2020, support sustainable coffee beans farming.

Apple - target zero carbon footprint with 100% renewable energy, design products with highly recyclable.

Capitaland -  ranked in the Global 100 Most Sustainable Corporations in the World index, 93% of CapitaLand’s buildings has a Green Mark Gold rating.

Of course, I did invest in companies that not so Eco-friendly in the past which I had regretted. Some of the energy hungry, polluters, high carbon footprint companies like SembCorp, SembMarine, Sumatec and Noble. Moving forward, I will avoid investing in those companies and allocate more capital funds for green investments. I encourage you to rethink about your investment's objective and do your part as "socially responsible investor".

Here, I would like to end the posting with one of my favorite song " Don't Be Afraid" (Fist Fight theme song) - by HANA. Enjoy.

- WILLIAM CHENG WL

Alibaba...... Treasure Cave Looting continue 2018

Alibaba continued to be my favorite "treasure Cave" in 2018. However unlike in 2017, I'm very conscious about BABA high share price. After a good 100% run up from base $90, this stock is no longer considered "under value" based on my assessment. Hence, I deployed a totally different trading strategy for this time. I don't feel "Buy and hold" trades will be the right strategy as compared to my old trade in 2017 (Refer to my previous posting on Alibaba). My "short term swing" trade strategy kicked in early 2018.

I had make several short term trades from Jan to June 2018, whenever I felt the price was right at that moment. It turn up to be right calls to loot this "Treasure Cave" again and again. Within 6 months, my trading profits net at $18,997 after minus commission.

After June, I stopped making new trades on this counter and took a break from the market. There was a shift in the macro economic conditions, trade war heating up and the market indices were reaching its peaks. I was hoping for a market correction to happen. Mr. market presented a great opportunity to trade again when the correction really took place in Nov/Dec. Without hesitate, I "ransacked"/buy call on this Treasure Cave again at end of 2018. I will write about this on different posting later. 

 " Having a clear "Exit" strategy is the most important plan that every investor should know before making new trade."

I will write about Singapore Market on my next posting.

-WILLIAM CHENG WL

  

Alibaba....... Great "Treasure Cave" Discovery in 2017

Most of us may know this story as Alibaba and the 40 thieves. How he discovered a cave full of treasure. Below is the story recap from Wiki:

One day, Alibaba is at work collecting and cutting firewood in the forest, when he happens to overhear a group of 40 thieves visiting their treasure store. The treasure is in a cave, the mouth of which is sealed by a huge rock. It opens on the magic words "open sesame" and seals itself on the words "close sesame". When the thieves are gone, Alibaba enters the cave himself and discreetly takes a single bag of gold coins home. 

Well, I did found a "Treasure Cave" through my investment journey in 2017. The cave called "Alibaba", a NYSE stock listing with ticker "BABA". I got interested in this stock after watching their single day gala 11.11 events. Since listing in 2014 around $100, this stock hovered below $100 for sometime in 2017.

I noticed this company has a very high growth rate >50%. It had been very consistent in net profit growth year over year. The characteristic I like about this company is the business model and the economic moat they build around their core business. Their business model which focus on B2B and B2C online e-commerce are the future trend with great potential for multi year growth. Looking at what Amazon did to US marketplace, you know Alibaba's valuation is compelling. Alibaba has a strong economic moat which no one else can challenge their dominance for very long time. They are no.1 in China and the next biggest competitor is miles apart in comparison and not profitable.

So making the story short, the quality attributes that I like about Alibaba are:

1. Right business model at right market trend
2. strong economic moat - King of the jungle
3. high growth rate, >50%
4. Low PEG ratio <1.0
5. Very profitable, positive cash flow

I know Alibaba is unappreciated by the market and I should grab this opportunity uncovered this "Treasure Cave" before others do. I started buying Alibaba (Shout "Open Sesame") when it dipped below $100 and continue to accumulate more along the way. The share price continued to move in upward trend as they started releasing positive results and forecasts in their quarterly earning.

I set my exit plan in motion when the share price hit above $170 to $180. I felt the share price had risen so much that it had outrun its potential earning growth. The PE ratio expanded too fast. It was time to sell and looked for other "Treasure Cave". So, i finally called for "Close Sesame" by the end of Nov 2017.

With the share price increase almost 100% since I first started investing, I make a nice return on my investment for a period of 10 months. This was one of my best "treasure Cave" I ever discovered for that year.

- WILLIAM CHENG WL