Sunday 11 September 2016

Bye Bye, OSIM!

OSIM has been officially delisted on 26 Aug. This post is a compilation of 2 short stories to remember it. Both are follow-ups from my previous post on OSIM, which you can read at No, I Didn't Buy OSIM at 6¢ During GFC.

The first story is about buying OSIM. When I wrote the post last Nov, 7 years after the depth of Global Financial Crisis (GFC), I never expected I would ever buy OSIM, especially since I did not buy it at 6¢ during GFC. At the time of the post, it was trading at $1.36. As things turned out, OSIM continued to fall from its peak of $2.90, until at $1.025, I decided it was sufficiently undervalued given its past growth records. Thus, the stock that I hesitated to buy at 6¢ during GFC, I had no reservations about buying it at $1.025, 17 times above the price at which I gave it a miss!

Fig. 1: OSIM Share Price

At 6¢ in 2008, I hesitated to buy OSIM because it was losing a lot of money due to a poor acquisition in US at that time. Subsequently, OSIM went from an all-time low of 5¢ to an all-time high of $2.90 for a 58-bagger. However, despite its astronomical rise, I have not regretted giving it a miss at 6¢, for reasons explained in No, I Didn't Buy OSIM at 6¢ During GFC.

At $1.025 in 2015, I decided to buy OSIM because it had fallen from a high of $2.90 to $1.025. It was facing declining business, but given its past growth records and acquisition of TWG Tea, I considered it as an fallen angel. The fact that I had missed out on a 58-bagger did not bother me. What mattered most was whether OSIM could get back to its former growth path. As things turned out, OSIM's founder decided to privatise the company in Mar at an eventual price of $1.39. I made 36% in a short span of 4 months, which covered the difficult period in Jan when stock markets around the world crashed. But like all good stocks being privatised, I was reluctant to see it go and would not get to see if my premise that OSIM could return to its former glory would be correct.

Thus, same stock, but different times, different prices and different actions. There is no emotional baggage involved.

The second story is about other stocks like OSIM. In the same post last Nov, I nearly wanted to quote another stock that had also fallen significantly like OSIM in 2008 and ask readers whether they would buy the stock at 10¢ in Nov 2015, in the hope of finding another multi-bagger like OSIM. The stock in question was China Fishery. See the figure below for China Fish's share price at the time of the previous blog post.

Fig. 2: China Fish Share Price

As things turned out, China Fish went into provisional liquidation barely 3 weeks later. Thus, buying stocks that have fallen significantly does not always produce multi-baggers like OSIM. For every OSIM that rebounds strongly, there are always other stocks that sink deeper!

Like OSIM and China Fish, Oil & Gas stocks have also fallen significantly. Which path would they take subsequently? At the time of this post, Linc Energy, Technics Oil & Gas and Swiber have all gone into voluntary administration/ judicial management.

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  1. Hi there,

    Congratulation that you made money from OSIM!
    The most important rule in stock investing is not to lose money.
    Nevertheless, really hate to see OSIM delisted. One of the legendary stocks in SGX.

    Magically yours,

    1. Hi Gerald,

      Thks. I'm glad to have owned OSIM at least once before it got delisted.