S-chip in a mess

I was quite busy these few months, didn't finish the company result analysis. I guess it is still alright, since the economy would only get worse, not getting better. So be it, what have been stuck is already stuck.

The recent news on Sino Env and Celestial just highlight to us again, the corporate governance issue of SGX listed China company. I think investors have doubts on the China company partly because we didn't really see the real business and we didn't really know how they do their business.

Sino Env went down because of the Chairman problem which could potential create a share over hang. Time is bad, if you are over leverage personally, it is a risk. Celestial wise, if I read correctly, is the convertible bond come calling. Actually I never expect them would be in this stage. Since the company is government supported entity, I guess it should run "correctly". But never say never. Figures I don't have. I just hope it can pull through the refinancing.

What has been taught in tex book is correct.
1. When you use debt, you enhance the shareholder return, but you also increase the risk
2. Small cap is more volatile, since there is limited resource available to them

Don't put all your money in small cap only. A certain level of diversification is needed, no matter how good the company is.