Singapore Exchange (SGX)

[CityFarmer]

Like most things in life, "Begin with the end in Mind". We should always start with a story, before any investment.

For me, SGX is a stalwart, base on Peter Lynch terminology. Stalwarts are stocks that generally buy for a desired gain, then sell and repeat the process with similar stories.

(vested)

I believe that SGX has the following characteristics which it very desirable for long term investors.

Strategically
1) Monopoly (Singapore is only big enough for one exchange in the next 20 yrs, IMO)
2) Capital flowing into Singapore dollar perceived as a safe haven currency. Equities and other instruments will benefit from this trend.

Financially
1) Strong operating cash flow and free cash flow
2) Consistent Dividend Payout

However, entering a position at the right valuation is still important.

I agreed with most of the points, but let me add-on few more.

SGX's earning CAGR over the last 3 years was 1.6%, and over the last 5 years was -6.8%. The last peak was 2007, and last bottom was 2009. Will SGX go thru the same cycle again? It will and should be.

I am still in the process to convince myself that SGX is a grower that worth a long term holding of 10 years or longer.

(vested)

I will just want to point out that SGX during its peak sells at S$14-$16. Given a dividend of ~S$0.3 per year in today's terms, the yield is 2%. Even after 7 yrs, the stock has hardly went above S$10. Many investors are still in the red (including dividends) after so many years.

Good stock at a bad price will still make an investor lose money.

The story will likely repeat in the near future. May I conclude that we shouldn't hold it too long a term? May be shorter than the cycle of 7-10 years, or much shorter?