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.


Cory
20160704

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.

Cory
20160703

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.


Cory
20160701

Cory Diary : Britain voted to be out of EU

Could not comprehend why is it so bad about it. In fact I did not even put it as something to watch that can cause another Lehman moment. Some News commentators said is a Black Swan Event which i disagree.

I do not think is hard at all for BreExit vote as below pic but stock market sentiment cannot be under estimated. So I took profit in CDL which has large exposure in GB prior to the vote. I did not anticipate significant impact to others. Dow drops more than 600 pt. My feeling now is there will be more impact coming Monday in SG market. Now my leg is a little shaky because I should have done a little more to mitigate it. Always room for regrets LOL.

BreExit comment

CDL Trades

When Singapore was kicked out of Malaysia Federation, many people think this is the end. LKY cried. The other side was hoping we will failed and down the road we will begged for return at their terms. We didn't. We succeeded beyond the wildest dream.

We need to get back to basic. What's the purpose of a Country ? To have a population that can work together. Policy and government that serve them. Democracy in place. EU takes away all that.

To make it worst, EU immigrants policy alienates the population similar to situation for the Singapore gov when they open the doors too wide that we lose our cultural and togetherness as a nation. They did crawl back and we see the 70% support votes. Unlike Singapore, EU Leaders did not. The British citizen don't even know who they are yet they are the one that decides EU immigrant policies and so i heard.

Leaders today are politically correct to avoid being branded racists and doing the right thing but they forgot about Nation Building. Is not just about Economic. Is about happiness. Is about emotion. Is about togetherness of the Citizens in the country ! And this takes effort and time to integrate and be accepted. Only when we get all this right, then there is value in economy. I am proud of the British people recognising this despite all odds against their parties, institutions and the famous. Just like in America, Trump represents the frustration of Americans. He did not so to speak, "Influence" them. He just represented them. The sooner leaders understands their population and the ground not grass root, they will lead better.

Near term there will be volatility in the market due to sentiments but it also mean opportunity from fear. Cascading effects will only create more opportunities so I need to go slow in my entry.


Cory
20106625

Cory Diary : What Expenses to cut ?

Expenses have been talked about for some time among bloggers. We know saving is important. Ability to grow our income is even better. Taking care of our owns family cannot be forsaken. Neither can we do away with insurance.

What if I have multiple or huge loans and I got retrenched and I do not want it to be a life style changing event ? Here i will go about it. Total up my lifestyle expenses, work out the cash flow and finally filtered out the options.

EXPENSES

Monthly Expenses

Parent Allowances : 600 ( at minimum )

Hospitalization Insurance : 100 ( Saving/Life $250 )

Housing Loan : $1000 Interest ( $4000 Principal ) (arbitrary)

Utilities/Telco Bills : $200

Clothing : 200

Transport : 220 (Multiple of wife/kid will roughly be a car expense )

Food : 620

Cable TV : 50

Newspaper : 30 ( Prefer to read from paper. To me is quality of life )

Hobby : 50 ( Personal Interests )

Sports : 70 ( Exercise and Meeting with Friends )

Groceries : 180

Annual Expenses

Home Decoration and Appliances : 2000 (arbitrary)

Computer and Home Equipment : 1400 (arbitrary)

Travel : 2000 (arbitrary)
Medical : 500 ( Clinic )

Special Meals : $1200

This works out to  S$3912 monthly expenses after tax to support.


CASH FLOW

Monthly Cash Flow is important because some of our investments takes a longer term return path such as housing loan and "Saving" Insurance which requires monthly payments.

-3912 Expenses

-4250 Housing loan and Insurance
+2100 CPF Deduction to support home loan assuming i have a sizeable sum of cash inside.
+2600 Dividends ( Based on my current Passive Income )

I will need income of minimum $3462 monthly to support the above if I am retrenched. Luckily my dividends and CPF buffered the problem. Can you imagine without ?

What are my other big ticket options.

1. Find a job/ Part time that can fulfilled the gap at minimum. ie. Potential.
2. Married a hardworking wife ie. hmmm do i have to wait till retrenched ? Married up shiok right. Not an option since this negate the problem itself even though it is an option if you have options to choose a life partner. LOL
3. Increase my investment to double my dividends. ie Possible. Required large saving. I should work on it asap.
4. Get a cheaper home. ie. Down grade lah. Sian man. Move it lower. "Desperate" option. Can last some time.
5. Divest investment property. ie. Maybe can consider based on market condition. To sell at right time maybe important.
6. Borrow from Relatives and Friends ie. Not small sum ... Matter of principle not to tap them unless i have gone through desperate measures ie. Cut expenses ... and still not enough
7. Retrenchment Benefits. ie. Choose companies that values employee. This may mean going to Civil Service and MNC first in my early career. ie. if 1 year service equate to 1 month severance. 15 years is 15 months of salary. This can buffer many years of cash flow.

LIFE STYLE

Why am I not cutting down on expenses ? Back to the top. I want to maintain my lifestyle.
Need to anticipate to avoid this decision altogether in later life because is painful after a life time of work. So it comes to Saving and getting a job options. But I can't get another job if I am still with one now. That's left with me the only Option that is Saving. Obvious enough. :(

These narrowed to a few things I could focus on.

Saving => Increase Dividends
Extravagance must be avoided in my early years. Fewer travel. No car. Take bus. Fewer restaurants. No expensive celebrations. No smoking and drinking. No gambling. No expensive clothing. Don't buy unproductive things that will be kept in the store room.

Cash Flow => Increase Dividends

No wonder there is advise not to pay up our housing loan. Is the cheapest loan we can get to bump up dividends to support it. Cash is King only when we can use it.

CPF => Buffer home payments when needed. Meantime getting good interests and additional insurances.

Retrenchment Benefits => Good benefits is important. Choose your company wisely. And use the benefits to support your dividend income when possible. The last thing we want is to spend on holiday trip unless you have enough.

What others ? Tell me leh.

Cory
20160620

Cory Diary : FRASERS CENTREPOINT TRUST

Home Work

Noticed a significant drop in FCT yesterday. This caught my eyes as I have been waiting for a good time to re-enter. A check in regular sources have no obvious news. Some retailers attempt to collect. There is a rather large selloff after trading hours at $1.89 which appear to be from a single entity. Do note some time back there is news of CEO change.


Previous Trades

May have to click the picture below to see the details. Recorded rationale on the trades that time.
I like the Mall Business at suburb which rental is not impacted. AEI keeps me a little awake which i blogged earlier.

(updated for privacy)

There is some resistance around 2.00 to 2.02.  I am a poor timer, quite busy recently due to company re-org, fear of losing and no insider. So decided to sell FCT without waiting for the next dividend distribution.


Next Step

Bre-Exit is round the corner. US has another major gun incident. Market quite shaky. Our local economy still in the muddy water. With the FCT AEI still in the midst. Will wait for reports and better opportunity. I really like this Mall counter.


Cory
20160618

Cory Diary : Misconception in numbers

Prefer penny stocks because i can buy more lots ?
While it may makes speculative senses that penny stock may have higher price variations by percentage term, buying large priced stocks only means fewer lots. The returns from penny or large cap stock for same percentage amount change will still yield same absolute returns mathematically.


Do highest dividend pays ?
A stock price $1 with 5% dividends will distribute 5 cents. To achieve 10 cents return in a year few things can happen.

a. Company has higher returns increasing dividend to 10%
b. Company made a lost, stock price drop to $0.50. Dividend will increase to 10% too.


Do averaging down works ?
Stock Price $2. Company report bad result and price drop to $1.5. That's -25% losses.
Buy equal amount at $1.5 again. Total cost is $3.5 now. Magically -14.3% loss. Feel good right ?

What happen Company report another bad news and price dropped to $1. Loss will be (-1-0.5)/3.5.
That's -42.9% loss ! Double edge sword. Like to guess absolute loss ? That's how a gambler starts to chop fingers. That's why margin trading is risky too.


Dividend Strategy takes forever. Market Crash will eliminate all my returns !
Each year 8% dividends. On the 5th year is 40% returns. That's buffer you for another Global Financial Crisis like 2008 scale. We are in our 8th Year now.


Cory
20160614

Cory Diary : Hyflux Hyflux 6% PerCapSec

Notes on my investigation on Hyflux recently listed (corrected term) Hyflux 6% PerCapSec

Hyflux 6% PerCapSec
The recent Hyflux Hyflux 6% PerCapSec# is listed in SGX. Therefore is similar to buying equity through your brokerage. The returns is like a bond in the sense we get fixed returns. And is distributed to your bank account if you have setup like your dividends. The key difference is Hyflux need not have to pay those dividends if they are in bad situation for example in financial distress which unlike bond will result in default.

Why Hyflux issues Hyflux 6% PerCapSec ?

Here the reasons I believe.

1. Need to roll over their earlier issued PS else higher rate
2. Need larger amount now to continue growing
3. More expensive to obtain loan from bank
4. Fewer restrictions and need for flexibility
5. Technically no default if they fail to distribute
6. Not considered debts
7. SCA Business Model required intensive capital investment and Cash flow support

Investment Rationale - Hyflux 6% PerCapSec
Rate is 6%. The good thing about this Hyflux PS written term is that they are cumulative. This means if they fail to pay me this time, the interest will be accumulated and compounded. In-addition, the company will not be able to distribute dividends to their shareholders. There is also a call date 4 years later else there will be stepped up terms. This will encourage Hyflux to re-call and likely issue new PS as needed.


Key Items in my thoughts

Will the company go bust ? I see no reason why the government will not let it happens. If water supply is critical, they can ensure operation continues while the company restructure. If there is no left over after debts, this will only means existing shareholders and PS holders have nothing in the new company. And this is the risk we need to be prepared for. Other scenario will be the traded share may comes down significantly and not recalled after 4 years. Can there be negotiated hair-cut ?

Cash Flow is the key risk which is why I think Hyflux makes the right decision to go via the PS route to allow them have flexibility in managing their cash flow considering the size and complexity involve. They also need a lot of money to scale and support the current business model to grow quickly.



Their focus on Growing recurring income to build a sustainable business with scale is the right one in my opinion. It has been developing and growing predictable and recurring revenues from O&M services, asset returns and membrane sales. Their technology is proprietary.

From the looks of it, the Business Model long term has a strong case. In fact, the mother share will be interesting too at opportune time. An attractive asset to Temesek to invest in the future.

Overall Hyflux 6% PerCapSec seems safer than I previously thought it will be. There is still risk which I need to be prepared mentioned above and the unknowns. Also to bet on the success of a business, 6% is not a lot of money. But if I am convince the success is high, then the compensation maybe reasonable. I think it should do well but we can never be sure.


Cory
20160612

Cory Diary : Cory Portfolio 2016 0607

Portfolio Management

has been my key strategy for a long time which includes Safe Bonds and Preference Shares. I am able to stomach losses and keep me sane. Most importantly I have the mental coolness to make the right decision of Re-Balancing my stocks. This is another key strategy in my investment plan. The recent years strategic addition which I mentioned a few times in my earlier notes are the Dividend Strategy introduction and inclusion of STI index.

On the left, is my current proportion of my asset.
As you can see, my Cash and FD are still a little high. I am a conservative guy ! It takes me a long time to bring down my cash/FD to this level.

Together with my CPF, Property, Basic Insurances, Pension, Fixed Deposits and Cash, they form a net web of safeguards. With this, DIY Investment is a very viable plan to me and this model has works for more than a decade.

Invested amount has been growing steadily since 2011(roughly) if I remember correctly. XIRR is similar to annualized returns for each year.

Cumulative XIRR  continues to slip down from 15% to 6.3%  due to recent mute years. A 6.3% Cumulative XIRR means compounded returns of 6.3% and for me already achieved for almost 10 years per below chart. For every $1 invested in 2007 will be roughly $1.45 today. This data is as raw as it is. No hidden cost, no mark up, no time based tricks that you often seen over marketing materials. Real returns right into my account if I sell everything into cash. No accounting trick or mark-up valuation model.

DIY Equity investment

My believe is I can only Trust myself to take care of my own money and retirement. So I have strong interests to make sure I succeed. And the real fear is I do not want to wake up one day to find out my Fund Manager is no longer in normal operation due to fraud, redemption issue or receive poor performance excuses. Their operation are total Black Box to me and this option is logically unacceptable.

Neither is it acceptable to me that my money in them  has low returns. Needless to say, losses. Some maybe desperate enough to provide guarantee. Even if they say they will, what's make you think they can when the uneventful comes ? Neither performance based rewards make sense to me as their zero fees are irrelevant to my losses.

Whatever printed document they can update me or articulate holds no water. This is real issues which is a big concern and which I can and should control. And this start my DIY journey of learning to do on my own as Equity Investment today is relatively easy to learn and understand, in my personal opinion. I can continuously tweak and improve my model with time. I am rather conservative and I constructed it as such into my plans. Really glad and never look back.

Happy Investing !


Cory
20160607

Cory Diary: Net Worth, Equity and Market Outlook

Net Worth

Rather conservative in my money so far in 2016 mainly due to the poorer economic expectation. However I am not entirely convince there will be a major crisis in the scale of 2008 Financial Crisis that requires me to pull the plug in my investments.
















.





Trending up much YTD (Year to date) with the increase due to higher cash position not allocated to investment. Chart is rather flat for past one and half year due to larger increase in property expenses,  spending to support a better Lifestyle ( yeah ! ), China Market Crash ( Shock ! ) and Taxes Paid  ( sad ... ).


Interim SGX Equity Investment

XIRR: +3.84% YTD (Today compared to 31 Dec'15)
STI Index: -3.36% YTD (Today compared to 31 Dec'15)

Quite please with the current returns compared to Index. I still makes a number of conservative "mistakes".

1. Being slow in reducing unprofitable positions
2. Not in larger amount movement in my portfolio
3. Holding too much cash. Cash/FD hits 40% of my total worth (excluding property).
    Opportunity cost is a little draining on me.

Continues .... to avoid sector in

1. Commodity
2. S-Chip
3. Shipping
4. Oil Support and Service

and please with,

1. Financial sector allocation
2. Cutting losses on some Industrial sector counters
3. Dividends Strategy


Outlook to watch

1. Oil Price
2. SG Property Measures
3. China Debts
4. SG Telco Markets


Cory
20160601

Cory Diary : Dividend Investing ( Cap Rate, Convertible Bond and Capital Distribution )

This is my 2nd part on the topic of Dividend Investing. This week note is about Cap Rate, Convertible Bond and Capital Distribution which I did a quick exploration from recent reading of Suntec Reit 1QFY16 Results.

Key Highlights
1. Completion of Suntec City Phase 3 and Suntec City Office
2. Higher distribution per unit of 2.371 cents which was 6.3% higher than 1Q FY15
3.Capital distribution of S$4.0 million from the sale proceeds of Park Mall.

More cut and Paste from previous announcements that I manage to find.

• "consideration of S$411.8 million (the “Divestment”),"
• "Park Mall Investment Limited (“JVCo”) of which Suntec REIT has a 30.0% interest has been set up, to redevelop Park Mall into a commercial development comprising two office blocks and an ancillary retail component (the “Redeveloped Property”)", 
• "Suntec REIT’s 30.0% interest in the JVCo", 
• "As the consideration is based on the latest valuation of the Property, there is no gain on the Divestment when compared to the latest valuation of the Property."

The dividends it can generate based on 2,506,484,326 units have it not been sold is roughly  $13,961,117 for a year. If we apply to 1Q16 units using 2,526,912,798 number, this would have been reduction of 0.138 cents dividends.

4. Office portfolio stable in 2016
5. The debt-to-asset ratio stood at 34.7%
6. Construction of 177 Pacific Highway in North Sydney schedule to complete by the second half of 2016. More cut/paste from previous announcements that I could find. "Upon completion, the acquisition will be DPU accretive with a projected initial NPI yield of 6.9% in Year 1" , "Leighton Properties to pay a coupon of 6.32% p.a. during construction phase", "Leighton to provide a rental guarantee for 4 years for any vacant space upon completion"


Results

Note 1: S$280,000,000 of Convertible Bonds due in 2018 which are convertible by holders into units of Suntec REIT at any time on or after 28 April 2013 at a conversion price of S$2.111 per unit.
Assuming the bonds are fully converted based on the adjusted conversion price, the number of new units to be issued would be 132,638,559.


Thoughts
Well, is quite an amount of work to do which I did not anticipate when I started my investigation this round. Every topic in the title worth their own page. And there is more to learn and dig further. However time is an essence and we need to strike a good balance between time and risk.

Question 1 : Convertible Bond Logic
There can be Bond conversion dilution if share price hit $.2.11. Assuming all converted, roughly 5% or more dilution. Share price increase will be more than 20%. Good problem to have.


Question 2 : Parkmall divestment logic
The dividends loss is due to the sale for a consideration of $411.8 million. On first look, is a DPU falls if we ignore the Capital Distribution of $4M. However with this amount it can funds the distribution for 100 quarters theoretically assuming ...., had it not use for re-investment or loan reduction.

Divestment/re-investment strategy makes sense considering the cap rate for Suntec Reit is rather low. Therefore viewing the Reit using Cap Rate alone is myopic without considering it's ability to rejuvenate itself while realising shareholder value in key locations. Capital Distribution is part and parcel of Suntec Reit attribute in it's returns as a whole we have to be accustom to.

What is Cap Rate ?
Capitalization rate, commonly known as cap rate, is a rate that helps in evaluating a real estate investment. Definition: Capitalization rate, commonly known as cap rate, is a rate that helps in evaluating a real estate investment. Cap rate = Net operating income / Current market value (Sales price) of the asset.

As it stands based on $1.73 share price with relatively low gearing, Dividend+Capital Distribution is roughly 5.5%. Is a 9.5 cents on my annual returns and/or buffer for market volatility. Long run I feel shareholder value needs to be protected which is something everyone should watch in dividend investing especially in Reits. With current information insights I found, is this good enough for me ?


Cory
20160424

Cory Diary : Dividend Investing ( DPU - Dividend Per Unit )

Done some home work last weekend on Soilbuild Business Space Reit. Quick glanced through many of the quarterly reports while trying to decipher the recent results given by a few bloggers. Reason i am working on this is because of it's high dividend yield and past quarters stability.

There is mention about increasing absolute income for distribution and the annualized dividend is up.
Occupancy fell and the current DPU is down 4.7%.

I did found there's a a share placement prior year for a property resulting the total units differ between the two reported quarters. To get us into the right perspective before we all confuse ourselves with the numbers. We are talking about performance between 1Q FY16 and 1Q FY15.

Income for Distribution
Increasing income by itself is meaningless as this can be due to acquisition and when broken down to per unit, is what's matter. If there is share placement or rights issue, this will reflect as well in appropriate time frame.

Annualized Dividends
Annualized dividends is quite misleading too by itself because it's inherently tie to the share price taken from specific time or period. And a reducing share price can significantly push the yield up. In a deteriorating business environment, the capital loss can be so significant that long period of dividends could not make up for it.

Table - Lease Expiry

Finding of Interests

1. Between 1QFY16 to 1QY15: Unit increased by 15%
    Mainly due to private placement and some draw down for property acquisition

2. If we take DPU 1.633 cent of 1QFY15 and after acquiring the new property of which rental
    contribution is $7,870,000 annually. How much will it contributes quarterly to it ?

To simplify my calculation, assume minimal increase in loan cost since is mainly private placement.
And using the 1Q16 increased units as a base calculation, the formula will be
= 100*(7870000/4)/938010400 = 0.21 cents contribution to 1QFY16.

Without the property acquired, the distribution income of 1QFY15 contributed 1.42 cents to 1QFY16 assuming everything equal. This is also assuming increased units are solely due to the private placement which is likely not but for this exercise.

Adding both values we will get around 1.63 cents which is what we should expects assuming business stays level for 1QFY16. However DPU fell by 4.7% and this is on the back of 2% lower occupancy (from 96.8% to 94.8%). With more leases up this year and next (table above of 2016 and 2017 shown only) there will likely be continue impact.


Cory
20160419

Cory Diary : NetWorth Logic

One of the most contentious argument in deriving Net Worth and skew most of our calculation is the Property and Loan, simply is the biggest ticket item for most people.

Let's use a scenario to prick the logic. If a multi-millionaire has a 5 Million apartment and has a monthly balance of zero after loan and spending whereas a 5K salary man owning a HDB with also outstanding loan has a saving of 100K. Does it make sense to say the HDB man has higher networth than a man who has a 5 Million apartment who has zero saving ?

The best way to know is not whether we need to service the loan or not. Or who has higher saving. To know net positive or negative, I would get the market value of the property and minus all the outstanding loans. Property Market value may change, so does your Net Worth. We are just reflecting Reality of it. That's the whole idea.

An asset is an asset. Net Worth is not about creating buffer, safety zone, principle, financial planning, living standard or whatsoever. It is what it is.

Cory

20160413

Cory Diary : Macro-nomics - Where is my "Do" ?

Let face the fact, if one is able to get the macro picture just a step or two ahead, relatively consistent, he would probably be advising some political heads. And he won't be sitting here typing on his personal blog.


However is a good exercise for investor to at least know what the hell is going on with the world. And how the macro conditions impact his investment thereby devising a broader strategic plan rather than micro level investment decision to mitigate the impact and hopefully take advantage of it.


For a start I will take a broad look on 10 year STI chart. Why not max, 5 or 1 year chart. Just believe me lor lol. Ok ! The chart fits better to the human manageable level of cross over for myself. Does't mean is factual or agreed by experts. Is just me ! me !

Looks at the chart with the circle mark. Just didn't cut it right ? Hold my cash tight tight ? make sense ? If it does cut, this make the music complete ?! ( Do Re Mi Fa So La Ti Do) perfect time to add, 'tio bo" ? Joking lah.

If the green green line go further down instead, together with the red, oh oh. So let's pray hard no major negative news for this coming weeks lor.

Cory

20160411

Cory Diary : The Cost of Money

If I am to earn $1000 in a week while he takes 13 weeks for the same absolute amount, we both earn same $1000 in the world of Classical Relativity. In Special Relativity, he has aged 13 time faster than me. I am 13 times more efficient ! And Time is the Cost of Money.

Let's do an example from another perspective where I borrow $1000 instead. What's the holding cost between 1 year and 13 years ? See table below using compounding logics.

Years	Borrow	Interests	Cost of Money
1	$1,000	3%	$30.00
13	$1,000	3%	$468.53

In absolute amount, the cost is 47% of the $1000 for 13 years. Don't be blinded to holding cost. Is a huge one.

Cory

20160406

Cory Diary : Middle Age Crisis - do I have a plan ?

Remembered countless once running in the military with SBO, Helmet and Rifle. The run is like short 10 minutes but I swear is like forever. This is felt by most with varying fitness level. Reason being the pain to endure the gruelling training is agonizing. Time clicks at it slowest. After which when returned to bunk, an hour of rest time quickly past. Well I did feel good about my achievement after.

Time flies very fast when we are enjoying life. Most will likely earn good salary between age 35-45. And this is the time where we feel the power and the wealth generation capability of ourselves. The joy of family, car, kids, condo and vacations. But one thing fall to many folks especially those working in MNC. You can be made redundant at your prime for the very thing you have as the corporate renew itself with the business cycle with new blood and cost structure.

Life do not maintain an even course of distribution. It is up to us to even them out. Uneventful things happens to many. Just like sickness and death, it will comes. Unlike something beyond our control, fall of income or no income is a logical expectation that it can happen to many and not a rare occurrence. Therefore one must always be prepared for it. There is no excuse of not doing the required for the rainy days when we are in the height of earning power.

I always think how can I manage my life if I am to be retrenched. Do I have the needed skills to find equivalent salary scale job. Will I have to start from basic from economic standpoint since i may not be much better than a fresh graduate hire. Should I try to be housing agent or taxi driver ? Attempt some business ? Or am I capable to call it quit and retire for good. This needs to be planned out especially so for those with kids and non-working partner.

If one has done some homework, even a 50% saving of a 10K job may not be enough after 15 years of  good salary to maintain certain lifestyle. Once we know the limits and expectations, we understand the problem better and manage our budget wiser at our prime. So when the day comes we are prepared. Once we reach our goal, every day is a bonus.

For myself, I prefer to call it quit for good at the minimum end. Wife no work. Children at University. Life till 90.  Outstanding loans. Insurances. Allowances ... And then work back with my family on what we should do. Using a semi-passive portfolio to sustain my family expenses, and work back all my asset class to determine how much is needed. Then I determine how much I need to save to support my plan. I also need to figure out what I can cut and reduce to be practical. And what I can put back as I work longer. I also need to make sure I have sufficient experience and knowledge to tie me through the up and down of the markets. This comes in handy as I can be very speculative and learned some lessons. Notice all the the "I"s. Is about owning the problem. Not the government, parent, company or god.


Cory
20160328

Cory Diary : Is all about Inflation, Stupid !

According to mom ( http://stats.mom.gov.sg/ ) the gross monthly income from work is as follow.

Gross Monthly Income From Work

 Median Gross Monthly Income From Work (Including Employer CPF Contributions) of Full-Time Employed Residents

Mid-Year	2006	2007	​2008	2009	2010	2011	2012	2013	2014​	2015
Levels ($)	2,449	2,543	2,897	2,927	3,000	3,249	3,480	3,705	3,770	3,949

 The average annual increment compounding % probably roughly about 5.4%.

Going to another website on Singapore CPI, the chart as below. Roughly 2.7%. Thanks to the tapering off in 2015-2016 due mainly I believe to the property curb and low oil price. It would have hit 4%.

What this means for saver is we are able to save half of our annual increment. Perfect !
But wait .... let's look closer on CPI basket.

Notice something ? Housing and utilities constitutes only 26.3%. Didn't some guru say ~ 35% of our income for housing ? Or Property curb on 60% of our gross income ? So why CPI did not match them. Is CPI meant more toward people who live in average HDB value ?

If the Median income is $3949 that's about $1000 allocated for housing and that has to include interests and principal down payment. Some may argue is not right since property is yours.

Fine ! Let's use rental instead of property purchase. A 4 room HDB easily fetch $2500 monthly for a family. Sorry ladies, wife has to go to work and we are still more than $500 short in allocation.

Cory
20160317