Apr 12, 2019

Cory Diary : This Time is Different ... Really ?

The World has been on low growth environment for a long time way before 2008 Global Financial Crisis. This is precipitates with low interest rates.During this time a few great innovations take hold.

One is ride hailing apps. Connecting passenger and cabs seamlessly. We also see the growth of internet orders maturing for foods and goods items. Follow by Video streaming services. Few other apps that I have been using which is unheard of  before the crisis

1. Reporting baby status by nanny
2. Condo Services notification for parcels
3. "Live" Stock prices
4. Forex Exchange Rates
5. Company Outlook Emails and OC
6. Messenger Services
7. Mobile games
8. Banking Services

and many others. They have changed and improve our lifestyles. During this time, Retail Malls continues to prospers.Many people is still accustomed to shopping, eating and meeting outside the virtual space to connect.  Quite a few Reits benefit much from it. As the saving grows, so are the needs for yield despite ever lowing with higher prices. There is demand with increasing cash with limited safer and reasonable returns investment opportunities.

Surely Beat STI in term of grow and dividends, right ?

Logically people are worried that the market might crash based on increasing valuation. Using my favorite example again CMT. CMT today is 5% yield stock. Maybe 4.9%. Is cold hard cash and not some "future promises" as in dot come era where there aren't fundamental to speak of. Is a brick and mortar. The building is literally sitting there with good location and connectivity.  The "artificial flooring" is 2.5% thanks to SSB which is theoretically risk-less for those who want the game to continue going for prosperity.

Even at 4%, many people may still choose CMT over SSB assuming the business returns maintain which is likely, and reason being there is demand with the system brimming with cash be it saving or earning. Will I sell at 4% ? Not sure. I will deal with it when times come but I am holding tight. Will we ever reach that level ? I think unlikely as something else could attract the cash for better returns. Even then, the CMT price may likely flatten out as any outflow will result in higher yield and the balancing act would comes in.

Stock price crashing ? Really ? Maybe if there is recession and people out of job and need to cash in on CMT stock. This will be market wide implication and not just CMT I suppose. And will this hit CMT mall business ? Interesting to find out.



  1. For a city-state like S'pore with limited lifestyle & recreation alternatives, shopping malls are a good reflection of a big chunk of S'pore consumer economy.

    Being such an open economy, whenever global recessions hit, S'pore economy will usually go down 50%-60% as reflected in overall SG stocks. This was seen in AFC, dotcom bust/911, GFC. I suspect it was the case also during 1985-1986, although I was too young to comprehend.

    Hence this will be the rough drawdown for CMT in the next big recession, just like during GFC (which actually didn't hit us & Asia very hard).

    1. 50% stocks down is GFC. Is as keen to depression which happens once on few decades. Since them reits have learn alot from it. The managers today are better prepared on loan liquidity. Nevertheless 25% is possible on a recession. There are 2 ways i think for now to go about it while we wait for the recession which has to be big enough to come. Accumulate the amount from saving while waiting or sell existing holding prior to crash. Today me probably more on accumulating saving to invest during recession. I wish to able to do timing of selling my holding first if I can predict with reasonable accuracy.

  2. Nice and interesting thoughts. Really enjoyed reading.