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