Nov 28, 2013

Cory Diary : Balancing Act Nov 2013

We are at cross road for STI. Nearing year end makes it more pronounce. I feel is time to do some balancing of the portfolio despite nearing my 200 trades. Frankly I am having fun this year out from those trades which i may elaborate next time.

Cash Level
Raising cash by lowering my down side risk that are sensitives to Interest Rates seem make a lot of sense right now. Not much upsides expected from Reit, Property, Commodity, Shipping etc ... I hate to lose my profit just a month away from book closure ! :)

Re-Balance my Stocks
More exposure on less debt stocks. Reduce holdings that have too much leverage or interest rate sensitives. Banks seem enjoying the ride but the price is a little on the upper side of the trend. I do like to increase my services sector. Property sector seems a no no.

Bonds and Preference
Current exposure to them help. Down side protected with incremental support with time. No plan to change the size though.

Protect my Profits
Double Digits % Returns of Invested so far. It can flips fast if event like Fed announces Taper, as profits this year seems volatile or fragile to me. Is time to slices some losses and do some profits takings to balance their dynamics.


Nov 10, 2013

Cory Diary : ABF SG BOND ETF (A35.SI)

According to SGX site that's roughly 1% -2% dividends. Lower end historically.

Current fund is 1.14 priced under extremely low liquidity matching NTA. As far as Yahoo site, 1.03 about 6 years ago. Implies about slightly less than 2% or returns about 3% including dividends at the low side.

The STI Index is at upper end of the chart. If the market moves up, is better to be in equity. If it crashes based on 2008 GFC is a few percent down.

Interestingly improving economy and tapering have much significant effects moving it 4 bars down in total. That's an estimate of -11% moves negating the dividends gained over the last 2 years who invested just, into negative returns.

6 years today, STI is 10% up. That's also about 3 years of dividends who invest just that time.

Why am i doing all this. For those who are interested in the Bond, the timing seems nice. Will it go lower ? The risk is yours to take.

10th Nov 2013

Oct 26, 2013

Cory Diary : Price of Staying Away from the Market

In Stock Investment, I often encounter situations in which should I wait for the Bear before I invest or should i stay invested. I need to put it to a test at least.

With recent correction of Reits in July, I like to simulate two situations which can tell me something. I can do similar with Preference Shares or any others.


In scenario 1, over 7 years period, the stock enjoyed 30% capital gains before sliding to red -5% loss.

In scenario 2, investment starts on 3rd year and assuming no capital gain or losses.

For a 7% initial yield returns, assuming absolute dividend amount maintains irregardless of stock price, annualized returns for Scenario 1 is higher by 1.8%.

INFLATION is a SIN to One's Financial Well Being.What can be the other ?
Probably PROCRASTINATION. So what can be even worst than that ? Maybe staying out totally or coming in very late in a big way !

26th Oct 2013

Per Wiki,

Procrastination is the practice of carrying out less urgent tasks in preference to more urgent ones, or doing more pleasurable things in place of less pleasurable ones, and thus putting off impending tasks to a later time.

Oct 20, 2013

Cory Diary : Available Funds

For someone who knows me, i put "EVERYTHING" in Excel. Ha. Therefore I can count my Net Worth in "Split Seconds" theoretically.

Not something to brag about but is something i like to write to remember (Share ...). It has to do to control my risk, return and future planning. Without that I am at a loss as i am kind of guy that needs to see the big picture. Something to overcome my shortcoming i guess.

Is no use saying without able to throw out figures on the fly. Here we go.I have less than 2% in Gold. Unfortunately to some is Virtual. Please don't shoot me for that. 25% Pure Cash, not even in fixed deposits ! Around 45% in Fixed Return Instruments. I can break them down and work to report them out at different ways i like.

Cash alone can probably last me for double digit years. Not so if there is emergency or opportunity needs. Maybe i can tap on my Fixed Instruments. Maybe i should continue to draw fixed income. Maybe i need to do some business. Maybe ...

Never mind ! The point is I am aware so I am.

20th Oct 2013

Oct 14, 2013

Cory Diary : Passive Income

According to Wiki, Passive income is an income received on a regular basis, with little effort required to maintain it.

This definition appear more reasonable and easier to understand. The keywords are "little effort" which varies with individuals environment and expertise. A person who invests in stock based on tips, the psychics typically will be temporary and non-recurring whereas one who's after dividends may view the same counter as stable and growing therefore recurring and passive in nature.

This leads to amount of attention required from individuals to monitor their investments which likely go proportional with stress level. If we need to constantly worry to a point to do hourly checks, to me is not passive. If your invested apartment is empty for 6 months of the year since the last tenant and you are not bother about it,  we miss the investment elements of passiveness.

And with most investments, if the business costs can significantly impacts your returns to justify the passive income, and with most cases are opportunity costs or interest payments which you cannot keep up with, losing sleep is a matter of when while inflation continues to creep up on us in the middle of night regardless.

Few things to watch

1. Degree of Recurring Income (income element)

2. Attention span required (little effort)

3. Capital protection against inflation and distribution (sustainability)

4. Personal Liability (investment risk)

14th Oct'13

Oct 3, 2013

Cory Diary : Anyone Care ?

D: I want Ocare.

R: Let's do a vote on Ocare.
R: Ok great you win. We will implement it. ;)

D: Ok let discuss to increase this year budget for everything including loans.

R: Sure ! I will agreed provide you De-fund Ocare.  ( Thug laughter)

D: WTF !

R: No discuss ? O' you thug, you need to be reasonable ! This is a Democratic Nation. Our forefathers ....

D: This is ridiculous !

R: We want to negotiate, the problem is you

D: This is holding our Nation on Ransom !

R: So ? Never mind if people lose jobs. Is not the first time poor people go hungry. We need to keep our Sponsor happy.

D: This time i have enough. You bully. I am not ( Not !! Not !) going to bow.

3rd Oct 2013

Sep 29, 2013

Cory Diary : Potatoes

A News reported yesterday that a lady after biting her fried potatoes, her lips become numb and feel awful. She tear up the potatoes and surprise is greenish inside.

A search in the internet finding !

" Potatoes (like tomatoes) contain poison in the stems and leaves – and even in the potato itself if left to turn green (the green is due to a high concentration of the glycoalkaloid poison). Potato poisoning is rare, but it does happen from time to time. Death normally comes after a period of weakness and confusion, followed by a coma."


29th Sept'13

Sep 27, 2013

Cory Diary : Are we beating Inflation Rate ?

In Taiwan,

1.07% Inflation Rate rate this year
1.355% Saving Fixed Deposit ( 1 Year )

Interesting time for Taiwan saving accounts.

27th Sept'13

Sep 25, 2013

Cory Diary : Interesting Information this week

This week encounter two sites which i find quite informative.

How The Economic Machine Works by Ray Dalio

Though this events happen before the theory and explanations by Ray, nevertheless is good to know he puts the puzzle together. I am not convince he thinks of it out of the blue but based on past events and current situation to explain his logic.

25th Sept'13

Sep 22, 2013

Cory Diary : Second Guessing Fed

People have short memory. Never fight the Fed. I would add Never second guess them. Fed needs to show the world or Americans that they are worth their salary and positions. What's the point if any Tom, Dick and Harry can predict their moves ? They will lose FACE even if they are right !

Interest rates will be remain low if Unemployment exceeds 6.5%, and the Inflation Outlook no higher than 2.5%. Let's see who "Blink" first. We are at inflection point.

22nd Sept'13

Sep 21, 2013

Cory Diary : Mood Swing

Eight things i did to overcome my emotions so far ...

1. Blogging on investment thoughts
This is quite fun if you blog just for your own. Don't do it to please others.

2. Have different varieties of investment in companies, sectors, instruments
Money swing to here and there. This will reduce your risk.

3. Measure all of them as a total value
This will damper the fluctuations.

4. Continue to work
Gives a lot of emotional strength while improving your net worth quicker

5. Re-balancing my portfolio
This allow you to take profit and more investment on lower PE stocks

6. Put more emphasis on FA
This let me overcome irrationality of the market

7. Sufficient Dividend Yields instead of just growths
One of key expectations that my investment has to deliver. Show me the MONEY !

8. Engage with Market Participants
Need to get a feel of the ground. A place to learn wider diversity of views.
Gives you more knowledge to decipher and adjust. Market is a sentiment animal.
And don't fight the Fed.

21st Sept'13

Sep 20, 2013

Cory Diary : Surge and Purge

Yesterday Surge is definitely one of those times (Thanks to Mr. Ben). His words move the World Markets again. There was once a study that said the market major moves go by Surge and Purge paces.

It Surges about a half to a dozen times a year iirc. Just capturing those well we will be on our way to financial freedom. Avoiding all the Purges will definitely bring us to guru status. To less mobile investor, these are definitely not easy and likely impossible.

I saw a Taiwanese Talk Show yesterday on Fundamental Analysis aka FA.
Few things to focus over 5 years. ROE and FCF. For a more practical approach I would add Dividend Yield as another. I would like to add Market Timing on major market moves ... kungfu not perfect yet.

20th Sept 2013

Sep 17, 2013

Cory Diary : CPFIS-OA investors

Read a page from CPF site today. Here's my notes.

83% of CPFIS-OA investors should have leave their money with CPF in 2011 as they make less than 2.5% or lose money. If we think single year cannot be counted, it get worst in 2012 with 84% despite the market did pick-up for the year.

Losses constituted slightly more than half for both years .... so what is going on ?

Few possibilities

1. Low PE/SME stocks that maybe out of reach of CPFIS-OA investors
2. "Loud" counters that is widely known but business wise may not be as good
3. Dividends maybe excluded
4. ...

Whichever the case, we need the authority to manage the scheme properly or responsibly. I would suggest basic investment examination for people who want to withdraw their fund for gold or equity investments.

17th Sept'13

Sep 16, 2013

Cory Diary : BB Codes

For people who likes to play with color

[color=#7FFF00] test [/color]

[color=Chartreuse] test [/color]

You can find many color codes on the tab bar listed in this blog.


16th Sept 2013

Sep 12, 2013

Cory Diary : USD Currency Exposure

Roughly over 20% depreciation for the past 10 years. If compounded likely be around -2.5% annually.

The recent tapering talk may pull up the dollar a little. However USD has been on a long and gradual slippery slope against SGD even in good times as the weakening happens even before 2008 financial crisis.

I will need to be aware the additional returns needed to make-up the differences !

12th Sept'13

Sep 10, 2013

Cory Diary : Simple Parameters of a Reit

Simple Parameters of a Reit

With tapering, i am kind of confuse how large an impact it is. Here's a simple draft note i am working on.

$1M Fund on a 1M Shares priced at par.
Leverage : 40% to $1.4M total funding
Earning Yield : 10% of $1.4M = $140,000

Cost of Loan : 3% implied = $12,000
Earning less Loan Cost = $128,000
Dividend Yield @95% = $115,200 implied 11.52%

What-if Cost of Loan 5% ?
Cost of Loan : 5% implied = $20,000
Earning less Loan Cost = $120,000
Dividend Yield @95% = $114,000 implied 11.4%

For 2% loan cost increase, a lower Yield of 11.4% will be $0.9896. Even with no increase in rent, did Market over-react to the rate hike ?

What-if we start with 5% Earning Yield and 3% Loan cost ?
Earning Yield : 5% of $1.4M = $70,000
Cost of Loan : 3% implied = $12,000
Earning less Loan Cost = $58,000
Dividend Yield @95% = $55,100 implied 5.51%

What-if we start with 5% Earning Yield and 5% Loan cost ?
Earning Yield : 5% of $1.4M = $70,000
Cost of Loan : 5% implied = $20,000
Earning less Loan Cost = $50,000
Dividend Yield @95% = $47,500 implied 4.75%


Put it plainly, an investor will suffer a greater percentage loss for a lower yield counter.

 $       10,000
 $         9,896
from item 1
 $         4,783
 $         4,123
from item 3

This is not saying having a Strong Sponsor, Book Value, Sector, Growth, Management and Gearing are not important.

10th Sept'13

Sep 7, 2013

Cory Diary : SIA Engineering

I am spending time to take notes this weekend due to recent "accidental venture" .... sigh ...( Stress )

So here i am today on my own on the need to conduct deeper investigation. Do take it with a pinch of salt on all the data shown here as i will likely be bias and from an untrained financial background.

This company has strong barrier, stable business, growing and dividends with negligible debt.

"The cash balance of the Group as at 30 June 2013 was $628.7 million, an increase of $105.8 million or 20.2% compared to 31 March 2013."

Low earning yield due to reasonable anticipated growth.
Staff Costs from $123.4 M to $128.7 M = $5.3 M or 4.3% increase

1. Last traded stock price = $4.66
2. The last two half years dividends total = 0.15 + 0.07 = $0.22
3. Last report quarter earning per share = $0.0616
4. Profit Margin above 20% - Historical
5. EPS around 6% - Historial
6. Annualized growth around 6% - Historical

Annualized returns of Dividend Yield based on item 2 = 0.22/4.66 = 4.72%
Annualized returns of Earning Yield based on last quarter earning  = 5.28%

If we consider capital growth element plus dividends, this is a 10% stock with a great business.

There seems to be a nice support around $4.64 from current dip. The next lower will be around $4.48 in my personal opinion. Normally i will get some batches first which account for my high trade frequency, and then go deeper .... sigh ha ha

Take note is just a blog diary. Thanks for reading.

7th Sept'13 (Vested)

Aug 31, 2013

Cory Diary : I see it coming but ...

The most important question after realization is what did I do about it ?

We know Yen depreciation will mean AUD will go down in EXCHANGE RATE
STOP buying AUD. HOLD on to my NTD and USD. No Yen.
I should have SOLD AUD.

We know USD appreciation will mean more expensive BORROWING
HOLD on to my REITs. SOLD down less potential ones.
I should have reduce my REITs further.

We know next month will be another humbling experience in EQUITY
Lock Profit on counter that is volatile. Cut Loss those that may drop further.

We know S-Chips have more mines in the minefield to FALL
No investment

We know Inflation will deteriorate our saving SIGNIFICANTLY
Continue to stay invested. Spend when needed. Avoid Bonds.

We know the equity sell down has been on 2nd HALF court
Buy some sold down counters that may re-vitalize mid-term. CASH is KING.

31 Aug'13

Aug 23, 2013

Cory Diary : Fears in the Market - Part 2

A month ago i wrote about bottom fishing. Today seems to be a stop rest and time to take stock of how earlier fishing goes. Take note i have not much interest in the business nor financial of them other than they were observed to drop that time. From today price, nothing much to shout about other than continue downtrend.

25-Jul-13 23-Aug-13
Gold - US$ 1322 1396 5.6%
Suntec Reit 1.6 1.52 -5.0%
Wilmar 3.15 3.05 -3.2%
SIA 10.29 9.75 -5.2%
Smrt 1.445 1.365 -5.5%
Vard 0.8 0.87 8.7%
Noble 0.9 0.83 -7.8%
NOL 1.05 1.085 3.3%
Average -1.1%

At time of writing, Gold is still trading. Gold up due to fear. Vard has new contract. Without Gold, macro factor wise, I will be worst off but not much.

23rd Aug'13

Aug 22, 2013

Cory Diary : Day of Typhoon

Thanks to Typhoon Trami, Taipei has additional holiday today. It is also a day of Zhong Yuan Pu Du. ( Ghost month ! )

For Taipei, it feels like a Windy Tropical Rain Storm. However due to complex and varied situations of past experiences, city governments are forced to gauge and declare holiday on the safe side of the equation. What is fearful of Typhoon is not the Wind ! Neither being in the center of it ! Is the amount of water it brings causing landslides, swift currents and flooding.

Most residents and business owners are not taking lightly. People avoided the streets and buildings have sandbags ready. Even the President has to rush home from oversea visit to avoid a repeat of being heavily criticized the last time.

The water that is collected from the high mountains after the storm pass when flow down, will burst the river banks, can be sudden in nature and turbulent. Due to this, huge barriers are built within taipei city on both sides of the Dan Shui river, Kee Lung river and other minor rivers.

For mountainous areas it can be extremely dangerous. Once a landslide of huge rocks and mud wiped out an entire village in recent time. Can you imagine thousands of rocks meters wide rolling down with thick flowing mud from high mountains ? No one survived. You will be very lucky to even find a half broken body in the aftermath.

Be safe, no sorry.

21st Aug 2013

Aug 17, 2013

Cory Diary : Right Price !

Another week has past, another taper fear in the market. How have i done so far ?
Compared to STI Index excluding dividends, 2013 so far is about flat. See table below.

If you have invested in reits 3 months ago, you would have suffer -10% to -20% capital losses. However if you have invested a year ago, you are still up +10% to +20% capital gains excluding dividends. Paying the right price for everything is important.

So how am i doing ?

I have more capital today than start of year. Still some way from my idea investment portfolio size.
Hopefully Market allows me to increase further.

17th Aug 2013

Aug 14, 2013

Cory Diary : Preference Shares

Preference Shares(PS) are specific class of stocks where a company promise to pay fixed dividends subject to terms and conditions. Like equity, PS have different risk levels and rewards. For me to invest in PS, things i would look for is as follow:

1. Piece of Mind : Risks from company collapse
Limit myself to safety of the bank which align my motivation to be in PS

2. Sufficient Returns : Dividends in Percent around 4-5% are reasonable
Sufficient enough to ward-off inflation

3. Reputation : Consistency in payments
Calling off once or twice payments will lower my returns significantly for already a low return

4. Currency Risk : Large capital for fixed yield cannot afford currency risk
Ratio of invest amount to yield is high. Shift in rate may wipe-off my returns.

14th August 2013

Cory Diary : Controversial Findings - Lightning

Experiments were done on a human dummy with mobile phone. When is placed in a group without it, 4 out of 5 times, the lightning finds him who has it turned "ON". The remainder got the one who has it "OFF".

Talking about probability. I guess you know what to do next time if you are caught in thunderstorm with a group of strangers.


14th August 2013

Aug 10, 2013

Cory Diary : Capital and Returns

Today i try to compute retirement amount by deciding capital base.

Monthly Consumption and Reserve : S$3,000
Implied Annual Returns Required : S$36,000

Assuming 4% annual return, you will need S$900,000 capital
Assuming 5% annual return, you will need S$720,000 capital
Assuming 6% annual return, you will need S$600,000 capital
Assuming 7% annual return, you will need S$514,000 capital
Assuming 8% annual return, you will need S$450,000 capital
Assuming 9% annual return, you will need S$400,000 capital
Assuming 10% annual return, you will need S$360,000 capital

Inversely, if you have S$1M with 10% annual return, your monthly consumption can be max to S$8,333.

Investing your money and achieving reasonable returns are so important.
Everyone must do it !

10th August 2013

Aug 8, 2013

Cory Diary : Investment Ideas

Investment Steps
Notes i need to use to remind myself in managing my investment portfolio.

Macro View - Decide when is macro trend is in our favor even if our selection is wrong
We can pick the right sector or stocks but when broad market hits, tides will pull you out into the sea.

Stock/Bond Balance - Making your inactive asset to work while optimizing opportunity when arise
Money in bank is one of the lowest return. Is one ticket to life of lacking cash. Balancing between Stock/Bond provides a reasonable basic base.

FA/TA - FA provides Margin of Safety, TA provides optimize trades.
Every time my stock price go down or deeper, FA keeps me sane and confident. Knowing TA help to time my entry and exit points in a more favorable circumstances..

Dividend Backing - Realizing cash out from the system so that it won't be squandered
Investment is to protect and grow our profit to support our life style. Is a mean to an end.

Currency Strength - Living in Global world, holding the right currency to invest is important
S$ is one of the heavens.

Opportunity/Risk - Opportunity is everywhere. Walkaway from uncomfortable risks. Capital preservation is essential.

8th August 2013

Aug 6, 2013

Cory Diary - Index Returns

I have read the 2nd investment book this month that sing the praise of Index Investment. There is a chart which indicate roughly a "Sine Wave" chart of the index over a period of 10-20 years. A diagonal arrow drawn across it points up.

Agreed the management cost of the index fund is low.
Agreed that many funds are suckers.
Agreed needs to be "savvy" enough to try to pick right stocks.

If we use STI Index from 1987-2013, compounding the return continuously, you will get 5.4% returns annually. Not bad !

Few things to watch.

We are measuring from a low trough base to a recent tip high. No one will sell everything at one go nor buy everything at one go either. So on paper we are taking the maximum potential to compute 5.4% which is kind of misleading.

Some chart uses few cycles of waves to extrapolate index returns over says 26 years to beats average returns for the next 30 years. If you have observe closely for the first 15 years, the returns are miserable.
Who can says 15 years not long term ?

I am not saying index investment is bad till i think through again on the maths. At the meantime, think about it with me.

6th August 2013

Aug 4, 2013

Cory Diary : Taiwan Democracy in the Work

Last night was a huge rally in Ketagalan Blvd. in front of the Presidential Office to “bid farewell” to Army Corporal Hung ChungChiu who die in detention barrack on July 20 under suspicious circumstances. 
There were Les Miserable Songs sang by the crowd (I love it when the crowd sings in mandarin) , "真相" laser printed vertically on the wall of the presidential building seeking justice, stage for key opposition figures and artistes. They even have Hung music video made from photos of his childhood days with family members and friends typically seen in Wedding Banquet  The scene was moving. 250 000 people attended wearing white clothes. No joke !

The military was viewed not sincere in their investigation and blaming Hung instead despite there were so many loop holes in their findings. Before all this there were a number of complains and protests by Media, Family and Oppositions. The government and military were forced to act on 18 military personnel of various ranks that directly or indirectly caused his death much later. Some facing 7 years jail time. Despite that, the family members are still unhappy because senior officers were let off lightly and military tribunal issues a token bond sum for all of them leading up to last night huge rally.

The president appears at his funeral this morning 9.00 am Live in TV  with dozen of security men follow with visit to his parent and relatives seeking redress. A huge crowd blocked his way and it was embarrassing for a period of time. He promised to get to the bottom of the matter but was also rebuked by Hung's parent in-front of the press. They spoke well and fluent in front of the TV camera which tells the culture of outspokenness.

To be fair, the president is a nice guy and not above law. He was charged earlier once during office for some claims irregularities which was later dismissed fortunately in my opinion for the good of country. For hung's death, he is taking the matter seriously but he also believes sticking to the rule of law while moving forward with legal review changes after the public is extremely unhappy that Hung dies under Defense of Military management and maybe bias in their internal investigation.

What seen here is democracy at work even though messy and slow. Freedom is in the air. Amazing country.

4th April 2013

Aug 2, 2013

Cory Diary : Horror of Inflation

Often we heard about people who strike lottery loses all their money after a while. Other than spending habits and not investment savvy, they are primary blind to inflation to understand how it works,

Here's a simple chart that tracks annual 4% inflation for a SAVER with $1M.

At 5th Year, a Saver will loses about $185K purchasing power !, if they just leave their $1M under the pillow.

For an average income earner who saves high say $30K annually with 50K annual income, all your saving goes into fighting inflation to keep your asset $1M at $1M at 5th year ! Unfortunately at 4% inflation speed, the effort is still futile.

From the Table above, REAL Net worth actually reduced after working for another 5 years.
This can be seen from the the last column when you loses 615% amount of your annual saving of $30K.

For a person who earns only $30K annually instead of saving, the outcome is much worst ....

2nd August 2013

Jul 25, 2013

Cory Diary : Fears in the Market - Part 1

Sentiment of the market often drives the bust and boom of stocks. Often on hindsights that someone will say if I have done so and so, control my emotion, i would have strike rich !

So what's the fear in the market that has driven things to "recent lows" ?
At time of writing, here's the low.

1. Gold - US$1322
2. Suntec Reit - S$1.60
3. Wilmar - S$3.15
4. SIA - S$10.29
5. Smrt - S$1.445
6. Vard - S$0.80
7. Noble - S$0.90
8. NOL - S$1.05

Anyone dare to bottom fish ? I will be very cautious. Do it at your OWN Risk !
And no whining later please.

25th July 2013

Jul 24, 2013

Cory Diary : Dividend Play

I have been struggling recently on my investment portfolio even though this half year i have relatively good returns. In a recent survey, Singaporeans are found to be more negative than most other nations and this is despite our wealth. So don't fault me ! I am Singaporean after all. :)

With rising rate assumption, theoretically we should see lower yield with increasing leverage. Clearly the tide is working against dividend play. If we are thinking about bond in such scenario, the timing cannot be worst.
And Index ETF is near high.What if identifying growth stock or trading is not our cup of tea. Property yields are not much attractive either and pose to go lower with rising cost. Investor hands are limited with rising inflation.

If we are to look at high dividend counter from Reits which give 6-8% yield, a year wait at the sideline will mean opportunity cost (less Bank fixed Deposit ~0.5-1.0%) around 5-7%. If we think the stock price will not reduce by this amount assuming rate does rise, it maybe worth to invest. In the event rate does not rise or not impact as much, we may have additional buffer to build on year after year. This cumulative buffer increase on longer term will work in our favor even if we encounter crisis in later years assuming the reits are properly managed.

Another area to look at maybe Preference shares. They do come with some risk especially non-cumulative version. I will likely limit myself to Bank PS which give 4-5% if we do not mind the 6-7% premium ! Will this be the final few window of opportunities for me or should I park my fund in Government Bond and wait it out for the next crash which may take a long while to happen ?

24th July'13

Jul 14, 2013

Call me Pessimistic

So far for the first half year has been fruitful for me. SG Stock Investment XIRR YTD = 11.x%. Coincidentally is also the average score for the past 7-10 years of SG stock investment performance. The score includes fixed returns.

Many people will be happy but not me. Why ?

If you are to see below chart, only 39% has been invested. Which mean Networth XIRR will be lower. Further reduce if i included pensions into the count. To me that's quite a significant loss of INCOME if we are financially awake !

While I need to continuously look for way to fix that, i need to be mindful that due diligence is done to make sure there is Quality. For the past few months i have difficulty raising the threshold due to market dynamics. Obviously the best time to do this will be to wait for Regional/Global Financial Crisis like situations some may says. Well is easier to say than done.

I like to also add caution above that. If the wait is 5 years, that's roughly 25% lost returns assuming 5% average return uncompounded.

Also the 2008 GFC Crisis maybe once in a lifetime event to reach 50% and that's provided you catch the bottom and sold on the top which are highly unlikely to happen.

Another possibility is to have another side stream income. I will not close on that possibility completely but it won't be done in a big way.

Sick for the past 2 days while on holiday back here. Is a long time since i had one.
Many thanks to God for my health ! Nothing is more important than that. By the way is also time i start to do some serious spending. Cheers !

14th July 2013

Jul 13, 2013

Life Insurance Projected Yield

I admit am a whore to XIRR when comes to annualize returns in my investment. Can i do so for my Life Insurance Plan ? I know i know .. Insurance is for Insurance. But then no harm in trying to figure out how they compute their yield, right ?

That's a delta of -2.03%. So the devil is in the detail. Next time when you receive the Projected Yield Statement. Think again what it actually means.

13th July'13

Jun 11, 2013

The Danger of Leverage

Pull back in fund has exponential effects on money supply especially so when it is leveraged.

In Singapore due to Property restriction, fund naturally flows into the Stock Market. Yield has been the main theme since January.

We see it this few weeks on the drastic meltdown in our market on slightest hint of QE withdrawal or reduction, despite improving US economy. It is suppose to be a good problem to have not a major correction or igniting a crisis.

The liquidity withdrawal has been intense but where can it go next ? Maybe I should worry about that later and hope we do not have another AFC like happening again. But why do Uncle Sam care ?

Reits suffer selldown in last GFC. Will it suffers similar fate in increasing rate but with improving economy ? Even if rates do materially increase over the course of few years, the yields and increasing rent would have cover sufficiently. Seems like a case of too early sell off and oversold. No one knows when it will stop. Maybe I should get my War Chest ready !

11th June 2013

PS: 40% in Reits ....

Apr 13, 2013

Has the World numbed to Crisis ?

Since 2008 Global Financial Crisis, each country has been taking their "Rightful Step" to print. If is not enough, print more. Just keep simulating one way or the other, in all sort of forms. Call it currency war as you may like but they do not seem malices to me other than survival.

In recent events, neither do the Korean Crisis nor the Cyprus saving tax put a dent to the market  sentiments. Instead Gold crumbles and break key support line which are suppose to be safety heaven but unfortunately offers no interests !

Cash in the market is now so high that people is desperate for returns to beat inflation. This can be seen from dividend counters driven to new low in yield with ever increasing prices.To add oil to fire, asia governments put more stringent constrain on property investment skewing the market further to concentrate on elsewhere.

The danger of holding cash may get us into serious trouble if the uneventful happens as this time round may not be "Cash is King" if the market reacts badly to the ample cash in the system. There seems nowhere to run for most.

The better recourse maybe to protect national currency from being adversely affected by others devaluation who will be most impacted. High score for Singapore and Australia dollars who do not depends on manufacturing exports mostly. Holding them maybe a mitigation plan against "hyperinflation" but i doubt anyone will escape unscathed.

And don't retire even if you can for the next few years.

13th April 2013

Mar 30, 2013

Era of Cheap Money

Low Interests Rate and Pumping Money into the system seems no longer able to simulate the economy vibrantly. We can twist and turn, the fact is US economy is just not moving fast enough despite all the measures taken. Instead it causes inflation to developing nations.

This keeps me thinking why is this so ? For many years since i last remembered, economic progress is about Cycle of Boom and Bust. Is like Ying and Yang. This time round, money is everywhere except investment for recovery growth as the yield is low.

New and Stronger economic activity has to come with motivation of human kind ingenuity. What so being less well off or in desperate condition less engineered from an educated and well connected population ?

Cyprus took the first drastic step of punishing depositors when banks go bust. To the commoner, is a personal disaster especially for those near or retired. Nevertheless it may be a blessing in disguise for the small island in debts.

Japan did similar in another style by engineering inflation. Yes. By shrinking the population purse through inflation, they will have lesser purchasing power overtime which will push people to innovate to stay above the water. 2% inflation target is nothing to shout about frankly but is a step in the right direction nevertheless. Will they be able to finally break years of economic stagnation ?

Will other troubled nations follow ?


Mar 8, 2013

Property Clamp Down

I have been busy lately in the matter of the heart. I have 2 days cool down period and i finally remember my blog. haaa. What should i write ?

When the gov introduced the most comprehensive property measure in Jan this year, this keeps me thinking how to profit from it that week.

We know there is a lot of cash in the systems and it has to go somewhere. Where can it goes ?

1. Stock Market
2. Car
3. Tour
4. Education
5. Casino
6. Fixed Deposits
7. Gold
8. Property
9. Married
10. Baby
11. Charity
12. ....

Most listed are expenses except Stocks. With Gold and Property more of inflation hedge. I choose Stock Market and double up my investment.

Two months later, i am right and wrong.

Right for increasing my stock portfolio significantly. Wrong for not doing enough.... I still have too much cash idling ...

I avoided property counters logically except Reits. Has been enjoying the ride since.
Wish has been better.


Jan 20, 2013

$1M Home Goal

Over this weekend, i have decided $1M (Today Price) home features will be the goal i hope to achieve. So this is what i want.

- Private Condo
- More than 1K sqf (abt $850psf)
- Retirement and Recreational facilities
- Low Pollution and Traffics will be ideal
- Close to ammenties
- Reasonable rental income is a nice option

Next is can i afford ?
- 20 Years Loan (Using 20 for this example. There is a constraint on age: 65. So if you are 45, only 20 years)
- 1.5% Interests Rate

With 20% Cash and CPF, i will need $800K loan to be re-paid in 20 years with interests.
And about 3% stamp duty with cash. Assuming i have no problem with cash and cpf on the 20% and fees.
At 1.5% rate, monthly payment : $3,860
At 3% rate, monthly payment : $4,437 (up 14.9%)
At 5% rate, monthly payment : $5,280 (up 32%)

Total Cost excluding stamp duty, renovation and lawyer fees.
At 1.5% rate, $926,400. Total interests paid = $126,400.
Effective compound rate : 0.74%

At 3% rate, total interests paid = $264,880.

Effective compound rate : 1.26%

At 5% rate, total interests paid = $467,200. Almost half my condo price. I love Banks. :)
Effective compound rate : 2.33%

Investment Return
If I can achieve 3% on average annual property appreciation long term and with rental support bonus, this deal may makes sense. Anything more, else what am i waiting for ?

20th Jan 2013

Jan 8, 2013

Common Sense in Investment Maths

Portfolio Size Matters

Everyone has a mouth, a pair of ears and eyes. And each of us need a basic amount of water, food and air to breath. When come to basic necessity to survive the minimum sum tends to converge.

A 500K of 10% return gives 50K annually. A Million dollar portfolio gives 100K.
If the minimal cost to survive cost 50K, for same investment performance, portfolio size can give you a life of luxury or lives like a beggar.

50K more can allow me to pay a 2 room OCR Condo monthly instalment at current high price, a nice holiday annually, a Car and a Happy Family.

Life Span

When comes to financial planning, a long life may not be a good thing. Escalating medical cost and Inflation can extend your misery.

If the median age is 85 years old, you need to plan probably 90 at least. And this 5 more years can be one of your highest cost in life after you retired due to inflation and expensive medical care.

A dinner that cost $10 after 30 years of inflation at 5% will cost 4 times.

Monthly Insurance Premium

If we pay $200 monthly or $2400 annually for your insurance premium.
After 20 years, termination at 4% compound return is $74 326.

If you can achieve just 7% through investment, for the same period is $118 615.
That's 60% more ! Ofcourse that's provided you can achieve 7% consistently :)


A number of folks believe in teaching their kids on financial literacy early. Rather I feel to teach them importance of money but not investment. Reason being temptation can be high for them to earn quick money that they may not focus in their study and work.

Unless we have sugar daddy, saving up for the seed funds from hard work is important. What we can do as parent (if you are savvy enough) is to help your children to invest their money while they are climbing the corporate ladder instead.


To retire, we must invest because starting the first day of your retirement, absolute inflation cost facing you is at it largest at peak of your net worth. We need to break this inflection point.

A million dollar retirement fund at 3% inflation is $30k cost annually.
A 100K dollar retirement fund at 3% inflation is only 3k.

Is a good problem to have to retire with one million dollar but is a big problem if you fail to invest enough and safely.

8th Jan 2013

Jan 1, 2013

XIRR Introduction

This is meant to give a brief instruction and I mean it. After which do some homework and using logics you should be able to figure out. If you have questions on the way, I will try my best to answer.

Is a measure where we can bring people nearer for performance comparison. This allow us to understand how we do among our peers and against STI benchmark as well, and where we go right or wrong.

XIRR also allows for investment in/out on discontinue and unequal periods. Which make comparison even more accurate say 2012 annualized results can be compared between individuals.

XIRR is a function in EXCEL so it is easily accessible to use.

Here's a Picture sample of a counter. In practise, you can combine all the different counters together if you like.

In this example, Annualized XIRR is 11.3% for the measured periods.

Note: Balance is the remaining shares unsold and valued per current price.

1st Jan 2013