Cory Diary : Wash my Cards ( 大洗牌 ) - US Election Fever

This week has been nothing but tumultuous. The past few days market drop send worrying reminder on what happened in this year March. People who time it well that time or yield play has a record recovery while those who left and never seen again have only regrets. This time round is likely due to re-resurgence of Covid 2nd Wave in EU and US Stimulus Talk held up prior to US Election.

The Market has been in the mode where sell down happens very quickly while the climb back up is over a long period of time. Therefore it seems that is usually good that we have opportunity funds or so called War Chest when such event happens. Alternatively, what I do is to reduce my holdings on non-core stakes this week regardless of profit/losses so that I could re-deploy them later. Cash is King as said. I would think about 30% of Non-Fixed portfolio probably.

This time round, Reits are slightly harder hit as you can see from the chart on the dive for reason I think is due to past weeks relatively directionless market. Many of this business are earning good money just lesser due to Covid rebates or lockdown. So in that perspectives, correction could happen but that should be relatively mute compared to businesses that are in long term downtrend. So technically speaking, we should buy more as it goes lower. Just watch the bullets and pace to do it.

Considering we have been working from home for months, robin hood and robo-investing are aplenty dabbling in the stock markets. Property curbs not helping. In all historical crashes my feel is that the market has new players who are not adverse to risk finally meet their fear inflection point who are not in tune of what recession actually means. With a bigger influx this time round driving up DJIA and Bitcoins as we can see in US Markets. With Covid Salary support package reducing, we could see more retrenchment locally. And this could mean a longer trend of poor job prospects.

In YTD performance, the portfolio recovered very well to parity in Mid-Oct but the last few days of volatility basically pulls it back down very quickly to -4.2%. This starts with almost 1K drops in DJIA. ( Pelosi not helping ). Even though the portfolio outperform STI ETF by more than 20%. (STI YTD is -24.7% YTD), there is no celebration budget out from it. The bleeding is fast and furious even though is more a cashflow in nature till we start getting out of market. This is despite the portfolio has about 21% bond allocation. ( Excluding SSB ).

The stop gap measure is  to do a major shake up of the portfolio eliminating non-core stakes such as Koufu, Ascendas-i Trust, and even MNACT which I was just building up... %@^%$(*. The final nail is the just released last Quarter result doesn't look pleasing as seems like the impact is worst than expected. So after deducting all the costs, is kopi money ytd for it.

Another major change in the portfolio is to clear-off STI ETF in my nominee account as banks stake in the portfolio are sizeable enough today. This will help improve the yield further when I re-invest the money.  One other shake-up is to reduce Aims Apac Reit by half (2nd Tier). In YTD perspective, is cut loss but risk lowered significantly for the portfolio. Feel comfortable about it since the DPU is no longer in significant advantage over say some of the core and larger reits can provide.

The goal is to protect capital, maximise dividend, risk adjusted.

Bazooka Ready.

Cory

2020-1031

Cory Diary : Widening Wealth Gap - What can we do about it ?

The World we are in today is changing fast during Covid times to those who managed to get onboard and those who are left behind. By logics the result is more due to demand/supply economics at play rather than purposeful conspiracy cronyism broadly.

In the past I have wondered why would one want to study till degree just to work in service industry on specific segment where higher education seems not so practical unless we go up management level or specific role in communications where is not aplenty and may need.

Say for 2 different positions. One in Restaurant Service and the other in MNCs. Salary gap is like a gulf as in $2K to $6K respectively as an example. Imagine one has to work like 3 months to get equivalent salary to one in MNCs or Civil sector. Is it no wonder most of this work has to go to foreigner as the specific skill sets can be picked up by average person without needs of higher education abroad. The situation is even worst when we try to compute the saving rates between them as it is aren't directly proportional. Which implied if you are in low band salary, hardly any saving so don't even think of investing.

One would argue to push up the salary of this bottom which is kind of no brainer on surface but the cascading nature will pull everyone up too resulting null effect by inflation and make things worst destroying the little savings we have. And if it does  go through artificial means,  we will have brain drain ... . And the social on the whole will be downgraded in value with escalating cost. This hidden cost is real.

 

Covid basically accelerates the situation to be more pronounce. If we look at many other service sector like Insurance, Cab, Food delivery and even property agents. There will be a day many deals can be done online or autonomous vehicles. Where people can arrange house visits online in 3D view themselves without need to go through agents. The goods days could be gone. So don't be too hang up on why some of this jobs get paid relatively well for now or near future.

The World is moving towards Lao Ban, Entrepreneurs, Management or in practical term for many to be a shareholder if we want to do better. There will still be good jobs around just that it get smaller by the day as automation and efficiency kicks in. And the demand for specific skillset in-depth goes up. As in is a good thing to human kind as more people becomes more developed to do higher value added things and that's provided we educate and equip ourselves with the necessary skillset to learn continuously. 

Sadly most people is not cutout to be Lao Ban,  Entrepreneurs or Management. Shareholder is the easy path but risk is not less in stock market as there is a lot of room to go wrong. Sometimes I feel Time is running out for many in our generations and later, to catch on the bandwagon else you or your offspring's will be condemned for eternity spiral at the peasant levels. This sounds like a very negative notes. However is exactly such fear that keeps us on edge. Survival the fittest ? Situation is bleak for those who do have fallback plan and lives like YOLO and so to speak to their generation coming will ends badly in probability. The world is constantly moving ahead while they are left behind.

So is there really no hope for General Services, Hospitality and Airlines ? Maybe we need to make very bold decision to overcome. Example Northern Hemisphere winter is coming and Europe has entered huge second wave.  Singapore strength is our Hot Weather. Can we promote Covid-Escapee Travel with 6 months Visa with special rights ?

This could be a huge draw to foreigners. How can we manage the risk to general population. Charge one time entry special fee ? One thing is our Hotel and Malls could be filled to the brink if is successful. We may requires special travel only by SIA with proper partitioning and cleaning for each one-way trip. There will also be staycations initially. We may even allow this group to rent our condo and hdb to make it more feasible. Do we need to consider medical support that is slightly more expensive than residence with no subsidy but at more affordable rates. Many questions but time is running out.

Feeling Bold.

Cory

2020-1026

Cory Diary : Exercising Rights Allocated and Access Shares Application using Nominee Account through DBST

This is my first time applying to Exercise my Rights and Excess Shares application through Nominee Account. And I want to have this blogged for future reference.

In Investopedia definition " A nominee account is a type of account in which a stockbroker holds shares belonging to clients, making buying and selling those shares easier."

After selling a chunk of my iReit Global Shares. I am left with 23,000 shares in DBST which works like a nominee account that I would like to try out the experience.

First Step

Receive a notification from DBST in the online Wealth Management Notification Icon. 

 Notification

Second Step

Is important step as any mistake may render application erroneous with unintended consequences.  I heard layout can be different between different brokers and ATMs. So do be very careful and consult your banks or brokers. For my case is as follow.

A) Enter how many shares I like to buy of the entitled shares.

For my case is 10,442. Price at 49 cent. Since the stock as that time is trading at about 71 cents, obviously I like to subscribe all of it. This will cost me only $5116.58 which they deduct later. A discount of $1253 ! as share price lowered to 61 cents.

B) Enter how many shares I like to apply for Excess.

For my case is 60,558. The 558 shares are to round it off to the entitled. It may not be necessary from what I heard but I am not sure. So to play safe I have it make whole. In total I applied 2.63 times excess of what I have. And this cost me $29,673.42.

Kiasu me applied on 2nd Oct which I realised is too early and probably risky because we never know how do market react to the rights issue. And there are rules after you have submitted so I am not going to take any risk to change. Fortunately, nothing serious as the stock price  holds up relatively well and close down around 61 cents.

In total $40,115.42 Cash needed just for the shares to be available for both deductions in my trading/wealth account else  may have problem in the application.

Excess Application

Third Step

As below debit date is15th Oct. In my case the entitled 10,442 shares are allocated to my main holding and cash deducted. Does that mean I can trade the share immediately ? Something to find out ....

Debit

Fourth Step

For my excess application, I get to know on 23rd Oct. Excess 5,558 Shares awarded at 49 cents.

Unawarded remaining cash is returned to my account on same day. What this mean is I gained a delta of 12 cents (Stock price 61 cents) per share which equates to $667. Kopi money !

Finally my total shares count at the end of the exercise is 39,000 Shares. That's 70% increase from initial 23,000 shares holding. hmm hmmm. And a total claim of $1920 from entitled and excess application.

Hope you like my sharing. And as usual DYODD. Warning again ! System application may change over time and process/format can be different between different brokers and ATMs.

Cory

2020-1024

Cory Diary : CPF Life Retirement Study

Key financial thing I have done this month is to do Housing refund 50% to my CPF. Probably will completely pays it off before end of this year. From -2.5% to 4% that's a 6.5% swing from cost to profit.

And this can be done electronically through internet which is what's so amazing about today world. This boost my Pension quite a little for it to compound to age 65 producing a base monthly sum to my future retirement. Which comes to my next investigation on CPF Life.

CPF Life Retirement Study

While I was doing above, it strikes me how much should I put into my RA. Will doubling it provides me double monthly income at age 65 or more ?

As you can see from the estimator almost double. Probably slightly lesser if we try to be a little stingy about it.  The escalating plan is interesting to beat inflation but seems not for me as CPF is not my key dependency ( specific to me ).

While studying it strikes me why would anyone want to choose a Basic withdrawal plan. Not that's it is a lot ( roughly 130 lesser than Standard )? The answer lies with Bequests ( see below chart ).

At age 80, there is almost no money left if we choose Standard or Escalating Plans. However Basic will provide about half the money to beneficiaries upon passing. Now, Basic plan do looks interesting. However doubling the RA Amount initially only double my Bequest. Something I need to watch if I do my step correctly ....

So my preference is Basic 192K for now and depending how I do well in my investment financially, this may change. However once is selected, can't change after 30 days. oh dear. I need to make a note on this.

Watch for any error as I am new to this. As usual DYODD.

Cory

2020-1021

Cory Diary : Repricing Home Loan Package

In a few more months time, my current package will be available to be repriced which was on package based on 2.38% Fixed for 2 years after which FHR8 + 1.88% (0.6%+1.88% =2.48%) where FH is the Period 8 months reference to the column above.

The current DBS Fixed Deposit is as follow.

Since May, DBS announced the FHR8 revision, my total loan repayment has not been reduced s it is fixed package and instead will increase to 2.48% if I do nothing.

What-if I Reprice ?

Per DBS website, home loan accounts are out of lock-in or will be out of lock-in in 3 months’ time are allowed to do repricing. I do not like floating package so will only look into the new reprice Flexi-Fixed package as follow. There is a re-price cost about $300 for Promo.

Fixed in years at 1.5% depending on the flexi-Fixed package which I am interested, follow by FHR24 + 0.9% = 1.8% thereafter. So should I go for 3 Year or 5 Year ? 

That's depend how soon we get over Covid aftermath I guess which could take 2 years. Since there is a free conversion I could ask for contract change per table above if the ever decreasing rate happens once I sign up on the new Contract.

However, if the rate increases then I would want to continue the new contract as long as possible. So looks like 5 years Lock is better option. The 5 years contract states " We will waive the Commitment Fee if such full repayment is made upon the sale of your entire interest in the Property, and no event of default under the Conditions has occurred." (updated).

With the new contract, monthly saving will be $293. That's $3,518 annually. Most importantly is the peace of mind. That's the key point of the plan other than the saving.

Cory

2020-1015

Cory Diary : CPF Housing Loan Refund Experience

In earlier article there is an Issue mentioned regarding low interest rate from the bank (1.1 % DBS Today for 11 months Fixed Deposit ) and higher Accrued Interest to pay back to CPF. It makes sense for me to do something.

The CPF Housing interest is computed on the CPF principal amount withdrawn for housing on a monthly basis (at the current CPF Ordinary Account interest rate) and compounded yearly. If this OA money is put inside SA it would be even higher at 4% !

Therefore  I decided to work on the CPF Refund process. There are 2 methods that I can do online. One is via PayNow and the other eNets. The later I have given up due to some issue getting the code to my oversea mobile. However I am pleased that PayNow works perfect for me.

Selections in CPF WebSite

The steps I took to do it for my case.

Completion Screen in iWealth

CPF Website

1. Login to CPF

2. My Requests > Property > Make a Housing Refund with Cash ... etc  (Decide the amount you like to payback)

3. Select PayNow

iWeath SG

4. Login to your mobile app (I use iWealth)

5. Select Scan & Pay

6. Scan the CPF page QR code

That's it. Upon completion ... the CPF website will reflect the repayment into OA Account.

Cory

2020-1007

Cory Diary : Performance YTD - Trump Tests Positive for the Coronavirus

The STI market was going well till it's decided to change downward course again today. This time for very different reason. The News is that Trump Tests Positive for the Coronavirus. He must be very disappointed that DJIA manage to held up (updated with table) as I typed. 

The talk about IN THING nowadays is the K-Shaped Recovery Economy.

What this may mean is 

1. The wealthy are recovering and the lower-earning are not.

2. The professional workers are largely fine and everyone else is doing awful.

3. Different parts of the economy recover at different rates, times, or magnitudes. 

Well, the wealthy usually does better in most recovery. And you can be a pilot and seriously out-of-job. So the first two points are more divisive opinions between the Rich and the Poor which will drives resentment against the Rich or Rightist view. Likely not going to help the poor but make it worst as this will pigeon hole their thinking. Driving ever increasing wealth gap.

I am more inclined on the last definition in general and this is best seen in stock market. A good example will be Cory Portfolio this year.

As you can see above, the general STI Index performs relatively bad. An understatement frankly not because of the heavier weightage of the Banks but in general in the index.

Relative to Cory which also has large amount of banks and STI ETF, comparatively still drives large gap from the index. The performance has widen by 21.3 points (updated) gap. It would have been even wider have I indulge myself in some tech or medical stocks that I have been consistently avoiding. Oh ! my pain.

So YTD, XIRR -1.3% whereas STI has fallen to -22.5% (corrected). Dividend wise it has been crazy because AGT do a major distribution from the golf sales so YTD more than 89K ... That's a huge jump one time in exchange for capital reversion.

Cory

2020-1003

Cory Diary : Frasers Cpt Tr - I am back !

Opportunity .... to Kio Durian.

Frasers Cpt Tr

On double barrel shotgun this few weeks as right after the return of investment into Mapletree NAC Tr, found myself needing to tap on my War Chest to buy into Frasers Cpt Tr. The opportunity came when the Reit price drops nearly 6% from $2.52 to $2.37 after the announcement.

"The manager on Monday afternoon announced an equity fundraising comprising the private placement and a non-renounceable preferential offering."

In addition, this is discounting the price decline prior weeks from high of $2.72 that is almost 13% discounted price. So in term of relative price point is cheap. Did I really "Kio Durian"  ? Well that's depend on perspective. I last sold my position at $2.07 for just 7 cents profit this year excluding trading cost in May'20. So ya, I am buying back at higher price.

Well, Sept'20 is very different animal from May'20. Covid situation is now a lot better and well under control locally. The malls are opening up and the crowds are returning. So is pretty unrealistic to see a drop below my last traded price.

At current price, abt 5.2% yield probably and with some dividend bonus. Not too bad. Something I can sleep with unless they are asked to do rebate and mall closure again ....

Cheers

Cory

2020-1002