Jul 31, 2016

Cory Diary : Did DBS got SWIBER'ed

The Swiber collapse put a possible dent of $350 M into DBS after secured. Unsecured asset to me doesn't mean no value, just much lesser especially during a poor market condition. Even then, I am surprise the total loan exposure is in the tune of $700 M. In my previous reading just 2 weeks ago on Q1 DBS result, it has a profit on $1.234 B. It has an allowance in the report of $170 M.

If is a one-off thing, it could a good thing to buy on dip. However is it ? DBS has to put it whole segment of this portfolio under review again. Q2 may be exciting to read if they allow !

Another question in my mind is whether the Market has fully downgrade Banking from last year level. If so, what we are seeing now is just market sentiments. What we do know is that Oil Price doesn't look like recovering anytime soon. Shale Oil is there as check and balance to the "Evil Cartel". To put it simply, Shale Oil could possibly be the product of QEs. An industry build up from debts and more debts. And once is build up, it put a lid on the cartel every time the oil price attempt to go up.

What this simply mean is that it is going to be a long winter for the oil and gas industry. Question is how long ? For a start, the cost structure as i mentioned previously is not right for the industry. They need to re-size their cost not just the headcount. Anyone want to order offshore rig must be insane.  Are we hoping Keppel and SBM at the mean time be able to do an "Apple Magic" ? Supporting industry like MTQ has a strategy to buy time while company like Swiber attempted a too big to fail stunt.

During this time who will benefits from low oil price ? Start thinking.


Jul 28, 2016

Cory Diary : Fascination with XIRR

XIRR is a feature use in Excel to measure rate of returns. Best for measuring irregular returns such as stock transactions. XIRR is also the formula we enter in Excel spreadsheet to measure investment performance in a compounded way.

Just type in a single cell in the Excel "XIRR(" and a help note will appear "XIRR(Values,Dates,[guess])". Values is the value of your trade transaction. Date is the day transacted. Typically we can ignore "[guess]".Basically we only need to care for "XIRR(Values,Dates)". If you have weird answer, then "[guess]" needs to be use but this is rare and is due to mathematical solution which has more than one answer.

We know through common sense that for $1000 investment in $1 stock price of a company, if we are able to sell at $2 after holding for a full year, the return will be 100%. If we use XIRR, it will shows 100% too as table 1.

Table 1 on 100% return exactly a year

1-Jan-15 ($1,000) Invested Amount
1-Jan-16 $2,000 Take Profit
XIRR 100%

What if I am only able to sell my stock at $2 on 20th Feb'16 instead of earlier 1st Jan'16 date. This will get complicated in calculating my performance mentally but not with XIRR as in Table 2 below. The performance is 84% which make sense since we take longer to achieve the same profit as in table 1 above.

Table 2 on 100% return more than a year. Time is money !

1-Jan-15 ($1,000) Invested Amount
20-Feb-16 $2,000 Take Profit
XIRR 84%

What if I am able to sell my stock at $2 within  7 months time. The answer is in Table 3 below.
Performance shoot up to 230%.

Table 3 on 100% return in just 7 months

1-Jan-15 ($1,000) Invested Amount
1-Aug-15 $2,000 Take Profit
XIRR 230%

In Summary

We are use to think how we earn last year compare to this year. The problem is this year has not ended. Is only 28 July today and we have 5 more months to go before we know how we perform in 2016. Therefore using today performance measured will skew a lot higher in % if you make an interim profit but much lower in % if is an interim loss of the year.

Thus, Table 3 performance is only for interim reference and not the final result till the year ended. To maintain 230% return at year end, your profit needs to be able to scale to $3300 as shown in Table 4. Which is why performance will decrease over time as chances are, we will not be able to hit $3300 profit from a single trade.

Table 4 To achieve 230% for a full year period

1-Jan-15 ($1,000) Invested Amount
1-Jan-16 $3,300 Take Profit
XIRR 230%

Over the years with consistent performance measured in all your trades, if we are able to achieve strong XIRR results, It will likely reflect your performance capability. The longer the better. I would say 5 years minimum so that a single good trade in your earlier trading days will be properly "amortised" in a compounded way. This is lifetime XIRR measure and a key portfolio measuring tool.

Final Final !

Another thing to watch is the weight-age. The bigger investment you make the larger the impact too on XIRR. This is especially so in later years since with growing income and returns, your investment will get significantly larger that will minuscule your XIRR performance in your earlier years in comparison.

Thus, be aware of fund manager which market their performance using short period and low fund amount to jack up their performance. Only to see their performance flatter after you have subscribed to them.


Jul 26, 2016

Cory Diary : Cutting Loss in Stock Market

Need to ask myself DEEPLY. Especially after cbox sessions this days ....

When cutting loss, do I based on fundamental of the stock to decide, wait for good price that can hit or the price we enter ?
Do we logically think Market will react to push up the price for us to sell or it works in a mysterious way that it will always fluctuate to our buy price for us to sell ?

When have lots of cash, no cut loss. Use the money in the bank to buy more in new investment.
Are there direct connection between cutting loss and how much money in the bank ?

Switching Horse better or Cut loss better ?
Some people like gambling addict. Cannot cut one till they chop fingers.
Macro factor, switch horse also die. Bet both horses, die too.
I think when to switch matters. When to change animal matters too (Market segment). Right ?

Is my stock a good horse ?
Money is hard earn, don't know what to do, cash first then talk. Want to freeze like I did in 2008, can too but make sure we ride good horse. Dividend players sure like this and buy more. Got guts bo ?

Need Maths meh ?

War Memorials
Mun siong


Jul 24, 2016

Cory Diary : XIRR Performance - Mid Year 2016

Share investment is Passive as I do not need to run the business behind each stock. I am not answerable for their business. Therefore the amount of time spend researching on the stock is relatively minimal compared to typical worker effort.

Many people have different kind of definitions. Mine can change overtime ! I do not feel like pricking the logic today. Instead of challenging views and web definitions, maybe is better instead to explain the inner voice on what we really want. Do we need an alternative income that can boost one current salary with minimal effort and in the process supplement retirement needs. Is that what's matter ?

XIRR Performance

There are 4 scores because i feel it matters. The first is how much am I able to grow my invested returns over the years. The second is for this year performance.

The third is stripped of PS and Bond to see how I perform in the stock market. This are further measured based on 2 different dates, 30 Dec'16 and 23 July'16. The later has higher score assuming I sell everything on 23 July'16. The other is on 30 Dec'16 which extend my investment period by another 5 months.

All year portfolio returns 6.7%. Every $100 invested, returns is $6.70 compounded. Quite hard to move this XIRR needle as the overall score has a damping effect by Bonds and Preference Shares. Unfortunately there is no easy solution.

Equity 2016 returns is 9.7% and 15% based on XIRR year end measure and this week performance respectively. Immediate plan is to shift my non-core Equity to more fixed returns by year end.

Outlook to watch

1. Oil Price
2. SG Property Measures
3. China and Indonesia Debts
4. SG Telco Markets
5. Trump Presidential Campaign
6. RMB Weakening

I do not think Brexit worth a spot currently as it takes a long time to unfold. Added Trump because I feel Trump strength and impact to global has been underestimated despite all the hooha. I think can be as real as "Hitler" in action just not in brutality. RMB weakening is beginning to show and the impact is yet fully absorbed. Spratly islands is just a diversion currently.


Jul 23, 2016

Cory Diary : Experience in New Private Apartment enquiries

Like to record my experience on my property enquiries on a new private apartment. Using $1M amount as a reference calculation on the loan and fees needed. Recorded to the best of my memory re-collection using one hour of my morning time today to type. Hopefully no error in my understanding and re-collection.

Property Agent
An agent Trust Worthiness is important. Diligent and supportive are key criteria. Willingness for long term relationship will indicate his character clearly. Getting the right person is the first step in my property search. He is also the key person i ask about home procedures, lead time and industry practises.

In Principle Loan
Getting support from the bank on how much I can borrow and criteria to meet are important especially for those who are based oversea. We do not want last minute surprise risking the initial 5% deposit of the property value if we decide not to proceed with the deal. Provide as much information as possible for correct assessment by the bank.

Paper Work
Each bank may have slightly different expectation that I need to provide. Need to get ready and available on the moment notice. Talk to the bank. Credit Card statements, Salary Statements, Employment and Income Proof etc.

Ideally we like to be present to preview, ask questions, sign and handover our cheque for the home we want to buy in the show room. However you can ask someone else to sign for your intention if you are not available and trust their advice. There is a 5% booking fee that can be use to offset the initial 20% for first property. There maybe penalty on specific amount of the 5% if you fail to follow through on the purchase.

Initial Amount
I need to pay up 20% of purchase price for 1st property. Using $1M, that's $200 K in Cash and OA CPF. So if you find difficulty even at raising this amount maybe that property is not for you and need to adjust your expectation accordingly. Personally it should be well above my budget and above allocated emergency funds for housing.

Need to prepare to take a loan of $800 K. There is small sum of processing/valuation fee.
If you are oversea, time your returns to settle loan matter and lawyer. At least 3 weeks.
I included consideration on job security and emergency fund amount in my decision of the property value I would like buy. There is also age restriction on the tenor period i can borrow which will affects the monthly re-payment amount

Another key consideration is Interest rate. A Low interest rate is a double edge sword. You pay lesser for your borrowing cost but you may find yourself in over-leverage territory easily due to the low base of the rate. A small hike may impact your ability to continue to service your loan or affect your quality of life. Although the regulatory requirements and banks have built-in some safety measures we need to do our sum.

Personally to me, low interest rate stability for the entire loan term is important as I may not want to re-finance, and need to meet a host of criteria again. So sudden jump in interest rate due to board rate mechanism will not work well for my case especially in low interest rate environment.

I also need to do declaration on other loans such as car loan, housing loan, provided guarantee to someone, over draft and credit cards etc. You maybe surprise they can directly hit the amount you are allowed to borrow quite significantly. So be careful on this and be prepared for buffer. I have a well paid relative who have to borrow money from poor me because they mis-calculate the amount needed and need to tie over short-term cash flow problem.

In-addition to the 20% purchase price amount at minimum for those with first property, need to be prepared for the following

Booking Fee : 50 K. Get your cheque book ready. I am a little uncomfortable handing over blank cheque to the developer to signal our intention to purchase. Is done on-site and widely practised afaik. Authority should prohibit this practise with strong penalty against developers. There is room for issues and also put buyers at a disadvantage in pricing of development. I hope someone can bring this up to appropriate authority as it does not make logical sense.

Lawyer Fee : 2.2 K. Their service is worthy. Make sure the firm is in your bank approve shortlist.

Stamp Duties : 29 K. May varies with individual condition. So check up with your agent and lawyer.


Jul 20, 2016

Cory Diary : Selling a Dream

A Dream is Mathematically Insane. Practically Impossible. Is Basically Irrational.

Toto Strike assumes $1 M. Someone drawing 100 K annual income get 1 Toto strike every 10 years surely. Those drawing 250 K annual salary will reduce to 4 years. Can strike Toto 10 times in 40 years !

Want to get out of rat race ? Work hard and Smart. Study hard if you can. Save and Invest I like. Marry up also can. Will make it easier. Is not sure win but the path to success is there.

Want to vote for a dream because it is so attractive, addictive and memorising and hopes. A chance for the few. We need to realise. Is the gambling in us. The laziness in us. The wilfulness in us. The greediness in us.

Beware of people who sell you a Dream. Keep Dreaming.


Jul 19, 2016

Cory Diary : Reading DBS GROUP HOLDINGS LTD First Quarter 2016

DBS Stock Price 8th July '16 : $15.70 since the low of $13.02 Feb and high of $21.43 July last year. That's +17.1% from bottom and -36.5% respectively from top. That's more than one third drop in price.

DBS First Quarter 2016

Retail income increased 29%. Loan and Deposits up 35%. Investment product flat.
Strong results. Used 8th July price to compute below.

Non-Performing Loans (NPL) 1.0%
Past quarters increased from 0.9% to 1.0%. Percentage increase 11%.

NAV $16.39
Increases $1.09 from $15.30 2015Q1. That's 7.1% up.
BV will be 0.96.

$1.92 annualised. That's 12.2 % earning yield. PE 8.5.

Regular Dividends assuming 60 cts (Yield 3.82%,  Shares 2,502,742,178) that will be at least $1.5 B annual distribution. 1Q16 earning alone is $1.2 B. Attractive room for Capital Growth.

Overall appears the company is doing well. The steep drops in stock price is puzzling to me. The current price is trading at $16.10.


Jul 18, 2016

Cory Diary : Middle Income Crisis

Gross Monthly Income From Work
Median Gross Monthly Income From Work of Full-Time Employed Residents for Year 2015 : S$3949

Monthly Income
After deducting Employer CPF : S$3375

"The variable portion of your wages can include the 13th month bonus or Annual Wage Supplement (AWS), bonus and variable payments. These payments are not compulsory, unless they are in your contract."

Assuming 3 months including AWS, Annual Income including employee CPF : $50,625
If you are drawing annual income in the range of $100,000, do you still consider yourself "Middle Income" ?


Jul 16, 2016

Cory Diary : Frasers Centrepoint Trust 3Q16

3Q16 Results Highlights

The main theme is North Point on-going AEI. Not to be mistaken by the picture, 3/4 area from the right is the up coming malls below North Park Residences ( Integrated Condo ) which will be attached to North Point of FCT in the left 1/4 area. The whole area will be the future north star of Singapore with integrated facilities such as library, community centre, mrt, bus interchange ground, garden, condo with lots of pools, Cinema, Food courts, malls and more malls. Hospital and schools nearby and a bridge connected to the hinterland.

Financial performance

• 3Q16 DPU of 3.04 cents, up 0.1% year-on-year (3Q15 DPU: 3.036 cents)

Some pressure to maintain the continue DPU growth or same (0.1% up) especially from the statement that 3Q16 distribution to unitholders includes $2.1m from cash retained in the previous quarters. It would have been negative per the Net Property Income of $31.2 million, 5.1% lower year-on-year which translate to annualised 5.3% yield instead of 5.7%.

North Point AEI reduced income by $1.74 M. Cushioned by rental increase specifically Causeway point 9.x% rental revision which is nothing to shout about considering we are comparing to average rental 3 years ago. Looks to me Phase 1 upgrading has much more impact than Phase 2 so FY2017 quarter reports should expects to be better. One more quarter of AEI bottom i suppose.

• Net Asset Value per Unit of $1.90 as at 30 June 2016 (31 March 2016: $1.91)
Share price last $2.12. Book Value is 1.11.

• Gearing level at 28.5% as at 30 June 2016 (31 March 2016: 28.3%)
Which i kind of like it.

Moving forward, I would rate high chance of interest rate hike soon with DOW breaking 18 K level clearly this week which may affects borrowing cost as currently FCT interests is just 2.259%. Do note large lease expiry in FY2017 and FY2018 so retail and sg economy will matters then.


Jul 12, 2016

Cory Diary : Equity Dividends 2016 Q2

Still in the atmosphere of Brexit, market is roaring back. So much on the fallout !At the same time Telco has a good run with talks on the 4th Telco viability. Seems like everyone has forgotten about the slow growth of major economies. True to my prediction, it is exciting time !

(updated for privacy) 

Year to date (Q2 '16) (updated for privacy) .  There will be challenge beating (updated for privacy) in 2015 due to I have taken profits on a number of counters and with more to come if the market continues to pick up.

 I have done some mitigation by re-balancing some of the returns to fixed instruments. And am now exploring for other opportunities on the remaining cash. New risk will be Indonesia and deeper risk will be China.


Jul 9, 2016

Cory Diary : Reading UOB Bank First Quarter 2016

UOB Stock Price 8th July '16 : $18.15 since the low of $16.81 early this year and high of $25 last year. That's +7.4% from bottom and -25% respectively from top. That's a wide range of pricing so what's are the fundamental change during this period ?

UOB First Quarter 2016

Let start with loans and operating performance by Country information. What I find interesting is Greater China information which records S$28 M profit reduction. Indonesia registers strong profit growth which maybe at a huge price which i will come later.

Gross Loans
Operating Profits

Non-Performing Loans (NPL) 1.4%
Past quarters increased from 1.2% to 1.4%. Percentage increase 16.7%. Greater China has a reduction from $218 M to $158 M. Indonesia has significant disproportionate amount of S$564 M accounting for 20% of NPLs. This raise the question of how well Indonesia is performing.

Exposure of Asset
5.9% Greater China, S$19.5 B of which half in RMB. There are $15.9 B Customer deposits in Greater China. Profit $69M (6.4%). Unable to locate clarity on RMB exposure but with local deposits there will be natural hedge against currency fluctuation which is critical.

4% Oil and Gas and 3% Other Commodities

NAV $18.22
BV using share price $18.15 will be 0.996. Not expensive.

Loan to Deposits Ratio
LDR using net loan over deposits has comes down from 81%-84% to 80.7%. This is on the back of increasing loans. Lot's of cash in the system.

$1.84 annualised. That's roughly 10.1%. PE 9.8.

Regular Dividends assuming 70-75 cts (Yield 3.85% ~ 4.13%,  Shares 1,607,291,000) that will be at least $1.125 B annual distribution. 1Q16 earning alone is $766M. With the payout ratio less than 50% of earning, Capital Growth will be strong plus factor. 5% growth translate to $0.90 potential capital gains annually.

Overall is still a healthy and profitable business even though there is a a little slow down. One thing to know is Indonesia. Will UOB throws more into it. Whats up that we don't know about ?

By the way, UOB first half 28th July'16 report coming up.


Jul 6, 2016

Cory Diary : Read up on Retirement

The whole idea of Investment is so that we have more money. People who say they don't probably already have enough. That's the reality unless we are trying to poke holes into exceptions.

Instead of re-inventing the wheel I should tap on other brains. There are plenty strong logics out there as anonymous I like to share.

Here you are.

Cannot imagine that after working hard for 30 - 35 years, you would want to cut back everything and live like a hermit upon retirement?

Retirement is a time to take back your life and live! Do the things you want to do, travel to places and experience other cultures and pamper yourself.

When planning for retirement, always plan for more. For eg., if you think you would only require $84k pa ($7k pm) in retirement, aim for $100k pa ($8.5k pm).

It is better to continue working now as long as you can, than having to re-enter the job market at 60 when you find that your money runs out!

I think these comments about retiring early at 40 or 50 are coming from middle-class folks stuck with average income in jobs they hate, and they spend their time online dreaming about retiring early cos they can't in real life. 

What's wrong with working until 60 or even 65? The wise are happy to contribute back to society and nurture the younger generation. Some people like me enjoy every day at work.

The irony of working towards retirement: the higher the person's salary, the faster the wealth accumulation process, and the earlier one can retire. But the opportunity cost of retiring is also higher, and it becomes so much harder to retire.

I'm a retired millionaire who've worked very hard for many years. Long hours, frequent travels. It's good to finally stop my rat race. Made millions from my salary, bonuses and investment gains. Time to smell the roses. Also to take better care of my body. I was at a high risk of heart attacks and stroke had I continued my rat race.

Life now is so much more peaceful and serene. No more getting stuck in early morning traffic and late nights. Can spend a lot of time exercising in my condo gym and swimming pool. I can also do ad hoc projects and volunteer at charitable organisations which I choose. 

Life is much more meaningful now. I've never been happier in my life. My passive income from my portfolio of investments gives me more than what my family's needs.

Choosing the right high paying career and being excellent in investments are key ingredients towards financial success and financial independence.

So much Collective Wisdoms and Experiences out there. Hope you enjoy  !


Jul 4, 2016

Cory Diary : Preference Shares Viability

Preference Shares investment only make senses if the company payment is sustainable. This is an important logic. And the compensation amount varies within this defined scope of risk.

For Bank Preference Shares, dividend payment to common share holder is a norm especially in our local situation and where bank stability is utmost important. Therefore PS holder has much less risk to accept non-cumulative condition. For others, cumulative criteria will be required. Nevertheless we need to understand the risk in both.

In the uneventful situation of corporate bankruptcy, even though PS holders rank higher than common shares, in reality i am doubtful it will be much better off. In such restructure, most likely debts, and bonds if any, would have taken most of the piles in the new entity leaving little or nothing to the rest.

Therefore when we invest in PS, the rationale of why companies issue as such is important. In bank situation they need to meet regulatory requirements. PS to them is a cost.

For some companies that value cashflow due to market dynamic, they like to avoid situation of technical default. Therefore PS instrument will be ideal. I will be wary if is not cumulative for such cases. The company will still be able to pay up later. So a good record of dividend payments to common share holders are important. Even then it will not exceed 5% of my portfolio.

If there is risk in payment in the future, PS price would likely be adjusted along the way to detrimental of PS holders who attempt to get out if listed in SGX for trade. Therefore the only recourse is to cutloss provided there is liquidity or hope uneventful will not happen.

Another situation that i can think of is in REITs due to regulatory debt ratio requirement. Therefore issuing PS may help to bypass it to allow larger profit for distribution. We need to understand in detail why not through placements or rights. In CMT case ( correction: actually a retail bond), the company background can command cheaper cost without facing dilution I believe. Is an exception rather than a norm in my opinion.

Beyond such risk level, I will not easily accept as logicially it does not make sense. The litmus test will be ... is the issuer desperate. If it is, i would avoid. I will need strong justification to part my money where the potential to earn a lot more from common stocks are so much higher and at lower risk relatively.


Jul 3, 2016

Cory Diary : Portfolio Design Re-Make

Everyone has problems they need to handle regardless big or small. I have my own set of issues too. One of my nudging problem is the shower head. Yes ! Minor things do frustrate the life out of me in a slower ways but they do. The shower head is always slanted at an angle and I have to stand shower at an angle. I could not have it friction locked properly for weeks. Finally one day something strikes me to act on it with a solution. I rotate the shower head providing a counter torgue to the piping attached to the head and the problem solved in seconds.

I should make a laundry list of all my problems down to minute detail and work on it one by one or leave it hanging as future actions. Maybe i would kill all creeps in my life. :P Thanks to the hot Taipei weather recently i have enough spare time generated by staying at home with boredom. And something strike me again.

Have been looking for ways to improve my method to increase my capacity and decision making. I like to do it with realistic perfection and enjoys the process of constant improvement. So i took an hour to revamp my portfolio sheet design on how i like to track my sg stock investments better.

Portfolio Summary Page

This is the summary page of all my Singapore Stocks. It tracks summary of each counter. Portfolio performances of all counters ytd by xirr and actual returns. Support/Resistance level. Exposure/Risk level. Yield. Business sector. Released P/L and unreleased. Dividends and theoretical max.

Counter Trading Page

This track every trades by counter. Including rights, dividends, split etc. It also measure counter level performance over the years and year-to-date (ytd). Expense made and notes. Is a minor tweek this time to support more notes comment to support my decision making and action process.

Everyone has a way to track their trades and I am sharing with my Diary.


Jul 1, 2016

Cory Diary : Last day of week after Brexit

After 2 days of dramatic drops across the world after Brexit, the market has rebounded and returned to normal. It has proven that many doom day experts are just mere mortals. And monkey can decides as well.

As of today XIRR YTD hits 5.2%. (Performance from  Jan'16 till to date ). It would have been much better have I not mitigate my exposure taking profits on some counters. Meaning, do nothing. Nevertheless is still a relieve nothing worst has happened which we all should appreciate.

I have taken the opportunity to buy back CDL and acquired more bank shares. And hopefully get something cheap to replenish my portfolio. I am still a little careful in case there is fallout later.