Cory Diary : A Chat with my Wife on financial planning

I have some chats with my wife on family financial planning. Here's how it goes.

Innocence Cory :
In 2 years time I would have (updated for privacy) passive income. That should be enough to cover our annual expenses without touching my principal. That's exclude yours as well (Hinting : I could quit anytime ... )

Stressed Wife :
Where got enough. How about your housing loan ? Baby how ? Parent allowance leh ?
I want to go Europe. I think our home is too small. My parents also need to be cared. (Hinting : what ?! )

Innocence Cory :
This amount is already above Median Income leh. As long we do not overspend that should be ok. You need to stop throwing away fruits that is not in perfect condition, finish up all the foods and less choosy in the place we can eat. The apartment is small but still bearable... (Hinting: Is you )

Stressed Wife :
Those sorted fruits i thrown out has cut or damaged.  Those restaurants known for roaches and hygiene problem. The apartment is too small for kid to grow. Get it ? But we can do away with the Aquariums. (Hinting: Here's your pain )

Innocence Cory : ... , ... ( Sweating )


Cory
20180902

Cory Diary : HDB Logics

Once I did a rough compounded computation of my parent HDB apartment if they were to sell it after interests payment. That's 5% compounded over 30 years excluding the saving from the occupancy. So to cut it short, HDB Singaporeans benefits significantly from it from financial standpoint. One of the best investment vehicle nation wide. Nevertheless is a social policy and there are restrictions. Regardless, the net benefit is much more else 80% would not have stayed in it. I have hear many opinions so far and Cory today is trying to decipher them.

1. What's the alternative ?

Most people have not much choice. HDB is affordable. Environment good. Personally HDB is an excellent choice and not out of no choice. I said that because this is from an angle that HDB is not an entitlement which Singaporeans think it has to be. In the real world, public housing is not given for most couples. In many countries they could only rent, buy expensive condo/apartments or cheaper old housing in the outskirts which are out of the way or of poor environment. In Taipei as I know, is the weak, disabled and real poor that has opportunity to rent public housing for a period only, and after that they are thrown back for another draw. You can't even own them.

2. Extended Lease ?

When we buy HDB, the contract clearly stated 99 years lease. Unlike Condo, HDB owner do not own the land underneath. So technically, we can't enblock and therefore works within the stricter guideline of HDB. The much more expensive Condo is on 99 years mainly as well. It would not make sense that Condo which is priced much higher are on same terms. The new HDB VERS scheme at 70 gives resident a choice to get out of it. But what is key is that people will start to put a more reasonable value on re-sale flat. It would have been better I feel if they could restrict aged HDB from young couple owning them. 

3. Legacy

HDB is a social housing program. That's mean we need to ensure continue supply of land and housing. If there is residue value after the owner pass on, good ! Else the property should return to the state for recycle. The last thing we want is for the rich children to hang on to it detrimental to the poor as the rich (sorry. I am not against rich. I hope to see more deserving ones) are in much better position to benefits from it. By having it recycled, we re-distribute the land with new housing as a baseline for everyone and that's mean our future generations to come. 99 year lease is a very long time. Most would have change for another apartment anyway. My parents switched to their 3rd HDB apartment in the past 40 years. New apartment every time as is cheaper.

4. Ownership

Should one own them ? Personally every young couple should. I would go for the biggest new apartment available if I could afford. But if we are still confuse whether is good for them, you have a choice. There is no regulatory requirement to own one. Sorry being sarcastic on this one but the alternative could be the worst financial decision to make not to buy one meant for masses. And the last thing to do is to influence our friends and relatives not to have one. Of-course those in ivory tower, you can afford to skip this section.

5. Can't Sell

Some mentioned higher HDB re-sale price will not help much as the replacement flat for similar conditions will be smaller in size. That's true but I can accept it for newer flat. I could have the options to downgrade to smaller apartment, rent out the apartment or room and help my expenses. Those who do well could also sell/rent it and stay in their Condo and that would be ideal for me. I know some will do it reverse and it works for them.

6. Future is not given

Some say we will not see similar gains from HDB in the future. I would say what's our alternatives and is it still attractive? And again I have a choice. Cannot predict the future but I have a stake to make it better. And hopefully logic minds prevail to keep the game going.

Cory

2018-0901

Cory Diary : Managing Risk and Goal update 2018-0819

Every investment has risk. In a theoretical situation if we lose a portion of our money into a few risky bonds or shares, we just need one to fail and there are good chance we will retard our financial freedom by years. If we could lose a large portion, then it maybe better not to do anything as this could severely impact our financial situation. Why ?

Currently Singapore Saving Bond is about 2.4% long term guaranteed for 100k limit, Bank deposits range 1% and CPF about 2.6% - 5% for now with specific restriction and benefit applies. Depending on investment size, combination of it may apply. But I could see that for relatively safe returns are about 3% for retirement size fund. This return is not enough for retirement and could only supplement in my opinion. Why ?

For a million dollar investment size that's about $30k annually or about $2.5k monthly excluding inflation. This may not fit my lifestyle as I feel there is no point in surviving on basic or bare minimum. And for a family, this may not be ideal as this could reduce options in what we can do with life. 

So I decided to come out with 3 scenarios below and conclude what I need. Do note that while doing this exercise, 0.5% difference matters.

Scenario #1: $1M capital, Expense $2,500, 3% returns, 2% Inflation and Capital draw down

Allowance of $2,500 with 2% increment annually. At Age 48, this method will last me for 42 years. And my capital used up at  89 year of age. Is a draw down in investment capital. The problem with this is that I could survive beyond 89. Secondly, I still have to ensure 3% annual return on average. And will not be enough for a family. Neither is there enough buffer for investment fluctuation nor better lifestyle.

Scenario #2: $1M capital, Expense $4,000, 6.8% returns, 2.5% Inflation and Capital draw down

Allowance of $4,000 with 2.5% increment annually. At Age 48, this method will last me beyond 100 after with some bonus years to go. I have increase the expense by 0.5% for buffer. The problem with this is the ability to achieve 6.8% return on average with 100% confidence. Even then, the income is average for a small family. Is alright if the kids are grown up though.

Scenario #3: $1,350k capital, Expense $5,000, 5.2% returns, 2.5% Inflation and Capital draw down

Increased allowance of $5,000 with 2.5% increment annually. At Age 48, this method will last me till 98. I am happy with this variables.  More room for flexibility in income and expense variations. To be clear this scenario is retirement without saving needed.

Cory Analysis

To draw this further, I could ask for 1% growth in underlying portfolio.This will retard investment capital reduction. Now, for $1.35M investment size, returns can be lowered to 5.2%. The next question will be what investments will allow me to support the draw down and to secure $5K monthly expense ? One thing for sure, I do not need to take too high risk to achieve financial freedom but how to protect my investment to obtain desires.

Once the above Portfolio is achieved, every month salary is technically bonus to my financial freedom. Goal has become clearer. Obviously, real world do not work in straight forward manner so is good to have buffers and lengthen our retirement age.

Cheers

Cory

20180819

Cory Diary : Cruising Mode - Portfolio

It has been a month since my last update on portfolio performance. I am excited to report it because it comes a long way of recovery against STI. More like STI dancing around me. Why ?

At this point in time, for STI to catch up there will be few scenarios. One potential is DBS comes backup. With my greater exposure in STI Index plus having WFC, and OCBC. I would be happy it does.

The other is O&G recovery. I have no good feel of this industry. The only buy I would seriously consider is Keppel which is in one of my potential list. 

Thirdly, I screw up. 24 counters currently. Max 10%. Often I am tempted to move pass my own barrier. And there are't any local tech stocks. ops.

Cory

20180806

Cory Diary : Summary of my thought process in investment

Investment to me is fun. I will do a lot of adjustments to my portfolio to get it feel right. Obviously I am in this learning curve process and after more than 15 years there is still a lot to be learn and unlearn. I could be an historian that record my own success or failure, and have it shared. Surely the end goals will be to maintain our wealth and if possible grow them safely to support our family lifestyle.

Nevertheless, I do have regular job and my compensation is at different level from my market returns. Hence, the confidence in executing all the trades I need to do. Even then what I do is try not to lose money. Occasionally I would make the mistake and learn from it.  There is always wish to have more money that I am willing to "play" that I am comfortable with. No one in practical sense will be ok mentally to lose a sizable portion of their fortune. And this jolly well be in my mind always else is the first step towards investment pitfall.

This year the key learning experience is again making sure every bullets count no matter big or small. I realize the outcome is much better if I put more due diligence and thought process into each trade I made. Another is to do small bites. Never-mind the trading cost as long we are not doing micro-trading. It will be painful to fall into penny wise pound foolish mistake. That's doesn't mean we should not chew bigger if we are confident. It does save a little.

The other thing I would be careful is Over-Exposure. This can works deep and bad into our psychology. So far I try to stay around 10% max per counter. I could go lower if I can manage. Once a position hit this level, the hope is the stock is flying or above water to avoid the tendency to average down. And I wouldn't want to re-evaluate my position at this point in time. Is the wrong process unless there is fundamental change. And cut loss could be an alternative option.

Recently I have been trying MACD, Bollinger Bands and Moving Average to time my trades. And this is usually after I am comfortable with the fundamental. However I am not so FA in a few of my counters. There is some anchoring reasoning into the current price. For such, this is really TA. Quite an amount of calculated risks decision being made into my thought process but is another fun learning experience.

Singapore market has been listless to me. Not exactly if you have been hitting jackpots. And in my continue search for investment opportunity I see US market opens up. Ability to tap on global market is quite attractive. The growth potential is huge therefore capital appreciation as well. And this is good for segment where I want to invest for growth as this can last for much longer period compared to regional or local market. What this mean is lesser focus on local growth short stories muddled with manipulated risks. Even with recent Facebook mega correction, I am still positive in the counter. While I anticipate large price movement volatility with gains in recent months, the market bring the largest in recent history to throw at me. Who says market is not watching you ? I blinked once maybe twice and then move on with my daily life.

Lastly, I have to keep in mind of Holding Cost. One easy way to understand is to use a stable reit dpu to estimate. Since First Reit announced their result, I could use 8.7 cents or 6.5% yield assuming minimal risk from sponsor situation. At current $1.32 price, I could absorb price down to $1.23 for the first year of holding the shares without losses. One year is not really a long time. If I leave money in the bank, it could be just a blink in the eye for time to lapse. I could also saved a lot more from income and my cost of doing nothing will build up significantly. As such if I think I could stomach this level of losses, and potential to lock in amount for dividend play, this could be an attractive counter and margin of safety will not be worthy a wait. Then what level will I consider ? Maybe at least 2 years of dividends. If can achieve 3 will be awesome as this will be almost 20% correction. We aren't see nothing yet to use war chest.

Some people and specifically analysts have been expecting Reits much larger correction with constant rate increases. Clearly this is not happening. More reits record positive dpu in recent quarter results. This could be implied that we need to see events on multiple fronts and dimensions. Not just increasing rates mean lower profits. That's completely absurd. Surely Reits will crash one day. The question is how long the wait  and how much ? After we have compute the total compounded then we can clearly comment.

Last I heard this month SBB allocation is in the range of 15K to 15.5K. Hope I hit the later which means I max out my switch. This segment is one of my housing installment supports. I still hear friends saying Government is running out of money and need to issue bonds to retailers like me. If that is the case, issuing bond at high rate than needed, limiting them to S$100k while expanding the funding size run contrary to their opinion. I hope this do not make their friends poorer but if they do not have much in their "Piggy" bank it doesn't really matter much probably.

Cory

20180729

Cory Diary : CAPITALAND MALL TRUST 2Q18 ( CMT )

Have been blogging CMT for some period of time. It is an investment of good cash flow and long term returns. Most of their properties are of high quality. If they are to sell them today, it won't be at NAV but sizable upward jump due to their unique location as they are tied to the Vines of Singapore.

Investor who has vested in this Reit would have appreciate the peace of mind. In fact if the reit registered significant jump of dpu, this would be a cause of worry ironically as there could be negative returns that comes along as well. What i like to see is like a sail boat constantly moving ahead in cruising speed.

Q2 2018 Results - CMT

Nav : $2.01 which is not expensive at all. Considering the earning capability, current trade price of $2.16 is just a slight premium.

Cost of debts : 3.1% That's another strength of the reit to keep cost low despite increasing rates. In fact, interests coverage ratio of 5.7x.

Leverage : 31.5% room for more borrowing and growth

Distribution Income for the quarter hits S$100M registering 2.9% increase over same period last year. Annualise returns 5.27%.


What more can we ask ? Maybe shopper traffics.

What to look for ? Funan !

What we continue to need ? A manager that think ahead. Please maintain.

Cheers

Cory
20180720

Cory Diary : Financial Literacy

I have a group of ex-secondary school classmates which by chance get to meet again since last year. Since then we have been active in chat group. After more than 30 years, they all look more or less the same. Not sure about others, but there has been attrition, re-join and mia individuals. Surely there will be difference in opinions, a little offline gossips and past grudges.

There were quite a few who are dead against institutions aka government in the chat group. So whatever PAP do, there is motives. Mistrusts ran high. One of them use to be my close buddy.  Lost touch with him as we go on separate way after our "O" levels. In those days there aren't smartphone. Let me describe his life now from my perception that I have formed.  We were one of the pioneer batch of normal stream education. As I could remember, his family appears to be below average as they have problem paying utility bills some time. We often go for mini-hike in the afternoon after school. And would comb the forest hill on our way home. It is as close to nature as we could get in developing Singapore. There were a lot of adventures. He went on to technical institutes whereas I am fortunate enough to excel in my study and manage to get a place in a Junior College.

My impression is that he do not have good jobs for past decades and he has in-depth frustration with the government. And in recent time probably for 5 years found a stable job that he is good at. A manager and has some work across the causeway. His salary about S$4k appears to be below average considerating his level of technical soundness and knowledge. There were some considerable stress and sometimes appear to need to work till late into the night. Married and has a son who just finished his primary with average score. He owned a car and stays in HDB.

Here's his financial status I think. In his late 40s, he do not have much saving. And probably about 5k to 10k in stocks the most at any one time. Mindset for him is that this are "vice trade". He would also like to take out as much money out from CPF as soon as regulation allowed as he do not trust them at all. And the money will be use for his son education. Singapore Saving Bond is just another outlet for the government to tune up their national Ponzi scheme. Inflation grumbling is always from water hikes to hawker meals. Every time where is a bad news by Temesek or GLC investments, they will point out that the funds are losing nation money which could have reserved to help the poor and needy. There is a believe tax is too high locally.

With such mindset, there is no way I could advise him to even go for safe investment like SSB which technically safer than saving account or fixed deposits. How nice if he could sell his SSB allocation which I would gladly take up to increase my limit. At least there is some use for him. I think we finally agree to disagree. At late 40s, trying to change each other mindset is next to impossible. He is still a good friend that I cherish over political divide. I view myself nationalistic and wish to keep the game going with the right formula to succeed.  I wish him well.


Cory
20180714

Cory Diary : Portfolio Building Plan 2018-0707

What a surprise Property Curbs. This time gives a big blow to the stock market on the day when almost everywhere else market is up and STI recorded -1.99% on 6th July on a cloud of Trade War up day internationally.

Looking back since last year on rising interest rate, Bank and Property Counters have very good run. This has become unhealthy to the nation and young people. So timing could not been better despite trade war overhanging the market which our government celebrated with an implosion. The curbs specifically targeted investment homes while keeping the supply of lands up.

For those who are interested in rough maths (else ignore this section), a million dollar 2nd apartment that only requires 3% before any ABSD, now requires 12% to top it up instead of 7%. That's means $120K ABSD. For annual saving of $30K, this will requires 4 more years to accumulate. And with LTV @75% ... that's another 1 more year.

Being in my late 40s, and my bad timing foray into OCBC, I am not happy but I could understand why they have to do it. Things do not look that bad considering my Reits counters and surprisingly Singtel managed to counter the down trend a little. This is further damped by Bonds/Pref. And this is where strength of portfolio comes in to bring me sanity. I am 4% up from STI after the death cross performance. For now, appears my portfolio is leveling off in Comparison Chart below.

2018-0707 Comparison Report

As in my earlier articles, I have been holding back on purchase in Keppel, DBS, STE and Ascendas Reit which are in my potential list. But I did procure a few lots of STI ETF. Despite the current negative sentiments on the property curbs my re-balance trades typically result in more investment cash as mentioned as I am still concern that the Trade War could escalate significantly and timing is critical to secure enough funds for dividend investments for the future.

Cash hits 15%. Bullets ready.


Cory
20180707

Cory Diary : Shopping List 20180701

Successfully secured this month SSB 2.63% result with $12.5k allocated. I hope to hit max again this month. This do not count into my dividend tracker as I deem them as buffer for my property loan support plan. 

Relative unscathed so far this year with -2% returns. I am pretty aware thing could turn for a worst. Need to buff up my war chest so I will be controlling my equity purchase much tighter and to take profit on any equity much easier on those that is not core holdings.

Hot List

There is sufficient buffers. I could acquire or some more of them at any moment. I am still withholding my firepower in view of trade war. Not in order of priority.

1. DBS - Start with small planned. And see any further correction. Not top list.

2. Keppel Corp - Potential

3. STI ETF - Acquire in stages. Not expensive

4. Ascendas Reit - Average down planned

5. ST Engineering - Not in top purchase list. Hope to increase my holding

Tempting List

They have hit my buy price but I have enough exposure in them. So tempting but I must not buy until i see some crucial indicators.

1. Singtel - Regional telcos pickup in profitability needed. Look for uptrend in price.

2. Netlinktrust - Directors significant purchase needs to happen and next dpu/results review.

Waiting List

1. Aims reit - Sold all. Price flat currently.

2. FCT - Sold all. Price flat currently.

3. MLT - Premium. Not enough MOS.

4. HRnetgroup - Like to expand if enough MOS.

5. Vicom - Sold all. Price not moving.

6. JD.com - Still under consideration

7. HP Inc - Still under consideration

Cory

20180701

Cory Diary : In Search of Golden Cross P3

This is continuation on my personal portfolio tracking against STI Index Part 3 (P3). It has becomes a study of how market dynamic changes STI and me. Since I last blogged few weeks on this subject, the broad market has turned for the worst. I was hoping for market rebound and hope to be able to align to the recovery with STI if not better.

It appears Singapore economy are more tied to China to Shanghai index with the trade war. On such days, US market can go opposite or has relatively minor retraction whereas Shanghai index could fall like "waterfalls" and this means bad news for STI Index.

Looking at chart (Left), this how the tracker goes so far till yesterday. Yes ! Is a cross but a death cross. I have finally beat STI by 1.2 percent point. Well, not exactly. Technically speaking since both lines are pointing down that's an obvious downtrend.

The cross is make possible due to sell down of bank stocks and my "Fixed Equity" acting as a strong buffer. I think US stocks helped some. I do not think it has much to do with my Part 2 in overall strategy sense. It was planned for a rebound not a downtrend. At this point of time, I do not have much stocks to sell so it could be a hold till recovery comes. I have build some war chest to benefit from further downside as I sold more than I buy past month net-net. Max possible dividend by year end could hits just above 40K.

There were few other observations in the market. One is surprise Keppel significant sell down despite oil price holding relatively well. Reits generally have corrected down a level on average which I think is healthy. While Singtel has moved down, M1 and Starhub got further sell down as well in-addition to previous selldown ...pardon my english. And sold down in Singpost, ST Eng, Comfortdelgro and those tech stocks . Stocks are certainly selling at discount now. Have we seen enough value ? I would watch China and Trump next move.


Cory
20180623

Cory Diary : Portfolio Management 20180619

I have been holding this article for 3 days for the fear of my first attempt to time "my escape" when Trump suggested Tariff list. However the market crawl back quickly and I feel wolfed. Will this time be another "fake news" ? Well, Trump up the fight immediately right after China hit back. That's round 2.

With battle started, STI is possibly entering the down trend phase. My portfolio is down and to date performance -1.9% this year whereas STI Index -3%. Looks like it takes a market dive for me to catch up as bank falls have larger impact to STI index. Now that the trade war is back again on the table we could see much large volatility in the negative direction. Personally I do not like China to react equally to the US action. Being a developing nation, an equal reaction is bad to their economy if US keeps countering. So I hope is the start to earnestly resolve the dispute. Unfortunately, China hit back. Trump do a side kick immediately. How is this going to end ?




Here's my logic. The US buys world products using USD printed money. While imports goods becomes more expensive to USA, printing money is not going to get much harder. What would happen is manufacturers will move out of China over time. There could be instability to China many times ZTE impact to jobs. Sometimes is better to be at short end of the stick than no stick, if one feel mistreated. The American is hitting every trading partners and not just China so I think this level of confidence probably means they think will win outright.

Banks

I do not have much luck with direct investment in banks so far. Even relatively recent exposure in OCBC sees some correction whereas STI Index returns are relative better. Timing matters. So I always managed my size in banks to be small versus STI Index ETF. However, my recent adventure in WFC (US) do ok as I took the dip opportunity to secure some. Securing enough MOS is good.

Singapore Saving Bond (SSB)

As I have max out my investment in SSB, I did a switch switch to higher 2.43% yield. Submitted again this month to replace my low 2.04% batch for 2.63%. I won't be adding more to treasury for now. 

Reits

With recent correction, Parkwaylife, CMT and Ascendas are good options as I do not yet see risk in their dpu which is golden. They covered Medical, Malls and Industrial Parks.

FCT is good too but decided to boot to preserve my capital. CMT Reit, I have much bigger stake as their size provides more risk comfort with relative good yields. Parkwaylife is still relative expensive relative to other reits but like First Reit which I have good exposure into, they command a good premium due to income strength. I like to retain them as Core.

Industrial Reit wise I would put Ascendas higher up than Aims Reit which I sold off recently. It has large foothold and good track records. I could returns to Aims Reit if there is good correction in price. Industrial warehouse income is ranked lower. MIT reit (correction), I have some exposure but do not have enough confidence and familiarity. The price is at good premium so I only have it to provide some diversity. I won't add more. But is nice to have a maple in me so I am happy. My timing to sell FLT is not so good. I could have save some money from the rights. But no use to cry over spill milk. I do make good profits from it though so "Spread the Wealth !".

Blue Chips

Companies like Singtel, Keppel, ST, SIA, ComfortDelgro, Vicom etc. I have good enough exposure in Singtel as mentioned earlier with competitive markets around regions. I made the right choice to reduce my holding. It has since corrected at new recent lows. I also have some stake in ST. It would be nice to get another one. Probably SIA or Keppel. I am leaning more to Keppel. A good option is to expand ST stake so that I do not need to monitor too many counters. I hope the recent Trade War between US/China will help me to get them at good price. Possible return to Vicom if the price correct significantly. This one not easy.

Growth

I prefer large corporation tied to world for growth and this likely to be found only in US stocks.

One of them is Facebook. I also benefits quite an amount from HPQ which is not in tracker and probably is time to offload as they record quite significant gains. They manage to beat expectations for 16 consecutive quarters against lowing tide of World PC market share. The future world probably belongs to software that hinge on their products but I do not see the company taking advantage of it to tap on their hardware to do that like Apple do. Not that is easy.

SME

No plan to look at new or increase my SME counters.

Cory

20180619

Cory Diary : Inflation and Currency

There are 2 things to watch that can manipulate what we think about how much asset we actually have with time.

Inflation

The typical one is the lack of understanding of Purchasing Power. The typical normal is I have $100,000 today and as long we lose no money in scam, investment, spending etc, 10 years later and is still $100,000, mentally people will be ok. And that will be a big mistake in the current world. In the past 10 years, for the same property, price has doubled. This excludes the possible rental income we can extract from it less interests.

The important question to ask is that where is the middle ground of this extremes ? Is zero the right answer in order not to lose real money ? Let put this way. If "inflation" is 3% annually, after 10 years, $100,000 will have to grow to $134,400. What this mean is $134,400 is the break even of not losing money. And if we do nothing, that is 34% loss. That's huge.

Currency

The world is connected and supply chain is efficient. In the ideal world, an iphone price in Singapore vs one in US assuming everything the same, after currency rate, should be about the same. But then interesting we often hear about Mac Donald Burger index when we translate the same burger in USD term, can be vastly different between countries. Why ? 

There are few few reasons I could think of. First is property space efficiency. In Singapore, the Malls are highly developed. The rental psf on average is costlier relative to less developed countries. The other is Singapore employee cost is much higher despite large foreign workers intake. However this allows more locals to move to higher value jobs aka higher salary. Singapore being a city state also means that most of the raw materials are imported which will command a higher cost structure on average. Imagine when Singapore dollar depreciates against the dollar. The cost will just escalate. The good way about it is to be in better value job that can command higher earning power.

Ideally we need continuously higher salary to maintain the same level of living cost. While this can compensate,  our saving in the bank couldn't since they aren't a function of salary increase. So many people needs to keep working and longer to keep up with inflation as saving in the bank is not working at all. The rich knows that and need to make their wealth work hard. The most average will be able to get by with good job and prudence. The poor will be in the rat race immersing themselves in conspiracy theory and negativity. Hard Truth ?

I wrote this to remind myself not to slip into one of no return.

Cory

20180609

Cory Diary : In Search of Golden Cross P2

Presented with the opportunity again for the 3rd time this year. I am 1% less in difference from STI this year. Italy Crisis causes the market to dip.  Provided me the 3rd chance.  Did something I never dream of. Here's what I did.

1. Further expand US stocks
2. Sold off Aims Reit to secure the value
3. Accumulate more bank shares
4. Next, I will probably target STI Index.

Why Aims Reit ? Main reason is it did not drops as much as others. My thought is that if the market rebounds for Reits, I have others Reits to benefit from. If Aims Reit drop later instead, I will buy some back.

Secondly, I have good exposure through Ascendas Reit for industrial sector which theoretically more robust though lower yield. Let see how it goes.


Cory
20180602

Cory Diary : Net Worth 20180526

Been some time since last blogged about Net Worth. This has not been my priority for some time. Out of curiosity I do a quick calculation on the percentage change. Up 2.3% for the first 5 months. That doesn't seem a lot in percentage term but for a salary man, that is something.





Breakdown of my Net Worth is as above. If we are to count Gov Sec, Bond/Pref and Equity, total percentage is 51%. That's a good improvement since I last tracked them at 44% (link). Deposits/Saving reduced to 20% accordingly.

Equity and  Bond/Pref

Half the segment is in Trust/Reit. So I am a believer of dividend play. Started increasing my US stocks tracked for growth. Feels pretty good so far on the move and has been slowly increasing my allocation to it. This make sense considering globalization of the world we are in and optimising potential of larger growth. The hassle is currency rate and exchanges for tracker.

A bit tricky in my excel computation to make it more automated. However, I like the fun throughout. One good thing about US trade is the diversification to the Singapore currency. A stronger Singapore dollar has a negative implication to my USD investment. The trading cost is higher through local broker.


Net Property

Value after loan deduction. Owning a property is a good hedge against inflation and a good diversification from equity. Furthermore there is place you can reside and call home. Tracking the value means the re-sale value done in the market to give a rough estimation of my property.

Property asset is highly leveraged so this sector health is dependent on employment to keep up with payment. One of the key aspect of owning property is the monthly installment and interest rates. This needs to be monitored and re-financing timely.

With current ongoing en-block fever, there will be market for new and resale private properties. So I do see some good support as long the rate is kept low enough to support borrowing. In my view TDSR is just a delay fuse. Once the initial shock is overcome, it will be a proportionate control valve to income.

Current Singapore yield has decreased from few years back, however if we think is norm that yield has to come back up for property to flourish like before then my only concern is norm could change in one form or another. Assumption may not be valid in the future.


Gov Securities, Saving and  Fixed Deposits

Gov Securities is where I park my housing emergency funds. This will help minimize the risk that I have to sell my dividend generation equities to cover my future payment plan in the event I do not have a regular job.

Technically, Saving/Fixed Deposits portion of asset is not put to active use. In absolute value this is large sum of money. In tiering investment structure for efficiency, this should be the least combined. Will need to find opportune to tap on them further. Time wait for no man. Every month here, I lose some to inflation and opportunity cost. For a salary man this cost is large.


Insurance

Changed my mind to sell off my policy considering the surrender value is returning 4% therefore it makes no sense to increase idle saving pool. Yes, life is about change. Admission is free.


Cory
20180527

Cory Diary : In Search of Golden Cross

The banking strength in 2017 and 2018 have skewed the stock market quite significantly. But just to get on-board them midway (assuming) is not easy at current high price. The only consolation I have is STI Index so far which capture a fair bit of the banking actions.With reasonable amount I decide to plunge into OCBC which has recently dipped due to "poor" result. Hopefully I did not catch the tailwind (correction: end of ) of the banking sector. I was proved wrong twice during the first 4 months of the year when STI Index charge ahead against my personal returns every time the performance gap narrowed (see below).

Chart: The 2 area marked red circle almost crossed but it didn't. Both time thanks to the Banks. Hence, my search for Golden Cross goal in 2018.

Another counter is Wells Fargo making its way as the 2nd US stock listed in my tracked portfolio. Together with OCBC, makes up 4% of my tracked portfolio now. Facebook and Wells Fargo are not existing US stocks. They are bought recently and has been in positive territory since with 15% and 2% gains respectively. A good start and get to enjoy the larger movements in US Markets. However, I am pretty aware it can be the reverse too.

In the first 4 months of the year I have been playing hit and run on some of the smaller stocks. Design Studio, QAF, Neratel and Singapore O&G specifically. They all have one thing in common which have poorer results. Sizing and cut loss are done pretty quick to mitigate impacts. One thing I found out about myself is that for this year my numb mode is around 2% investment size for such counters. And this will probably be the my guidance ahead.

On the Reits front for Q1, on average probably break even as dividends cover their capital loss.
This sector enjoyed good run last year and so is better for them to take a break and stay flat this year. Is no fun to see them running too far ahead and then collapsed from exhaustion. I would like to see better NAV before they take the next leap as they could run ahead of fundamental in the quest for higher dpu. And that means higher property price.



Cory
20180512

Cory Diary : Recent Trade Actions 20180507

This year is flat. Hovering around 1% gain currently which is still below STI Index. Strategy wise I am not changing much. Our Banks valuation are rich so is tough for me to enter to close the gap. Few trades I did worth thinking more.

Singtel

Reduced further with the poor results of associates as I need to manage the risk of over-exposure. And with the coming of TPG, the battle could be tougher. Regional wide telco margin pressure will be a new shift. The main impact is my 2018 dividend. So I hope to come up something to compensate.

Frasers Cpt Tr

Decided to come back on this counter after making the mistake of selling it earlier. One thing I learned is what a strong sponsor can do to support the dpu. Anyway, kick-start with a small position as is my believe that Malls are here to stay and the stability of their earning power is reasonable.

Frasers L&I Tr

Reduced further as the main reason to invest is no longer there. Sizable gearing increase without sufficient DPU compensation in the Euro Acquisition seems not so good a deal. We could argue is good for currency diversification but that itself is a weakness of the reit inability to overcome through internal earning.


Cory

20180507

Cory Diary : US Stock injection into SG Portfolio Tracker

I tend to keep my US stocks low profile. There are few personal reasons. Decided to do a first this time. Reason being my portfolio should have a better diversification tracking in management considering bulk of my shares are in SG Trust/Reits, Index and SG Bonds/PS.

Will be selective at first. Injected Facebook into my tracked holding and slowly expand if I am happy with the move. The complexity is they are traded in USD. So currency movement do affects my overall returns and risks. 

One logic to consider is the exchange rate. My consideration is how I can compute them on paper appropriately into Singapore dollars when they stay in USD cash account. This means that if USD is to depreciate 10% within a year, my open US stock and cash will have -10% fluctuation in returns. As for closed US stock, if their cash is stays in USD cash, their real profit will have to be adjusted.  I do not believe in paper loss.

Tracking Method consideration

1. US Buy/Sell trade price.
2. S$ translated Buy/Sell value will be dynamically updated.
3. S$ Profit/Loss will be dynamically updated for open trades.
4. Profit/Loss will be dynamically updated in S$ for closed trades unless I have them converted back to S$ then it will be locked.
5. Available US$ cash will not be tracked. Neither will exchange cost for simplicity.

Hope this new chapter of my investment portfolio management proves wise and provide better excitement to my listless SG stocks. I am excited !

Cory

20180422

Cory Diary : CAPITALAND MALL TRUST 1Q18 ( CMT )

Quick collection read from today CMT 1Q18 report

• DPU 1.8% YoY. That's about 5.4% yield at today $2.10 stock price.
• Operating expenses decreased 4.7% which is quite significant.
• Raffles City Singapore (Joint Venture) NPI is up. Was not so good in previous report.
• Gearing lowered to 33.5%

Nice set of result. And we still have Funan Mall as a wild card.  To top it up, Sale of SSC for S$248.0 million. That's a good premium and helpful buffer for many quarters to come. Not sure I have opportunity to accumulate more next week.

Cory

20180420

Cory Diary : Compiling NetLink NBN Tr

NetLink NBN Tr - closer review

IPO price S$0.81 at lower band range. S$2.3 billion IPO is the biggest in Singapore since 2011. Singtel will hold about 24.99 per cent of the units in NetLink NBN Trust, which will own all of the units of NetLink Trust.

Consists of 10 Central Offices and approximately 76,000 km of fibre cable, 16,200 km of ducts, and 62,000 manholes then. Providing services for 89% of the residential homes in Singapore (2017). NLT is the sole network company for Next Gen NBN, it dominates the wholesale provision of dark fibre connections for residential premises.

3Q18 earnings came in at $21.7 million, 32.5% higher than IPO forecast, due to lower operating and staff costs. "The first distribution period will be for the period from 19 June 2017 to 31 March 2018 and will be paid on or before 29 June 2018. However, July'17 is when it get listed. About 8 month plus.

Unsecured loan 588,542,000 @ 2.53%
Units : 3,896,971,100
Depreciation : $36,897,000


Annualized Yield ( Price 81 cts )

Dividend cost @5% Yield  ~ $158M
Expect to achieve from cash flow.

Dividend cost @6% Yield ~ $190M. DPU will be 4.86 cents.

High side would be @7% yield. ~ S$221M cost. Stars need to be aligned to hit this. Alternatively, stock price has to go down to 69.4 cents if we maintain 4.86 cents dividends.

The upside is stable population or growth projection. Stable Earning. Low maintenance. Singtel major shareholder. Control of operating cost is especially key. The other will be commercial space expansion.The hope is most of the infra can last more than 15 Years. Therefore maintenance cost will be relatively low supporting cash flow for dividends.

The risk could be interest rate which will be few years later relative to earning. Technology and Competitor  not in visible horizon. However, infra cost needs to be monitored that could affect earning. Will be interesting to read next earning report and the first actual dividend for the 8 months.


Cory
20180415

Cory Diary : Is this a Start of Trade War ?

Just came back from hiking in Jia Yi farmland recently. 24c and windy weather. Excellence walk on some unplanned and very secluded locations. Used pedometer and the max day count is 20268 which could be more than 12 km. Quite an adventure I would say especially walking pass 3 unchained street dogs and a traditional cemetery hill plus a 1 km detour. I do not find it appropriate to take a snap ... kind of regretted.

This is probably the kind of life i love to have when retired. Travelling around the country and going to unknown places. Of course safely. Free from the dynamics of the market especially recent trade disputes while my money works for me. A trial run i guess.

We are in early rattle of possible trade war between China and America. And if this further deepen we could see significant impacts to trade between the two countries. Some economists think Russia, Australia and others may benefits. I think there maybe short spike of demand but we could see a global reduction in demand after due to more expensive cost inputs to production reducing affordability. Therefore recession could be on the card to many countries since America is a key driver to world consumption. China is no small market either even though the goods are of lower pricing relatively.

I do not see how Trump and aides would come down from this stance. There is some fair logic in his argument and he tries to do what he says he would. People who are against him will be fired. So the only main recourse I think would be to watch China closely till the next presidential election. Whether PRC would want a peaceful development for next 20 years or a major detour they have to do their calculation as manufacturing base will re-locate away from China to other Asian locations as time goes by. Once they start moving it will be hard for them to come back.

What i did is to build up my war chest for now. Potential max dividend from SG equity reduced to less than 38K. So if I am wrong, I won't be too bad. With SSB, further Treasury and FD, this would help mitigate. I also took profit from some of my US holding. I guess this level of cash is good for stable property installments ... and time for more local hikings in Taiwan.



Cory
20180408