Cory Diary : When Family Planning and Financial do not mix ... we have lesser babies

I have an exchange with a guy recently on why Singapore has dwindling birth rate. The reason he gives are cost of living and job security. Not surprisingly this looks common among developed world therefore internally I feel this reasons are derived from common sense logic and need not necessary be the case. We barely scratch the surface of the truth which I think could start from Stress.

Stress can comes from anywhere. Jobless, Insecurity, Lack of Self Confidence, No Money ... . But why mainly developed world ? Because we think too much. As we have better education, ability to plan ahead and see further actually becomes a hindrance to family planning. We also start to procrastinate for life partner as well. On top of this, lifestyle has changed and arrange marriage loses it's tradition and shine.

When the guy is in mid 30s and above, and more financially secure, sadly our lady biological rhythm do not change with time. When she hits 35, fertilization deteriorate rapidly. Women start to have difficulty getting pregnant as years go by. Even if she does, there is higher risk of birth defects and miscarriages.

To add further, Stress impacts on animal and humans alike. Our reproductive systems shutdown and we have more secondary effect like illness. An extract from an article. " In animal populations, as in humans, some individuals have better coping mechanisms to deal with stress, which gives them an adaptive advantage.".

The luckier ones have parent helps.  The much longer route would to be wait for financially security. How many hits it and in time is the problem. Unless one able to climb the corporate ladder quickly or in covert jobs this won't be easy. Personally I feel the easiest route would be not to think too much. Maybe the plan is to forget about family planning and just go ahead. :)


Cory
2018-1024

Cory Diary : Why are we trying to beat the system ?

Apartment loan

When I bought my apartment years ago, I wanted to have more cash flow therefore decided to tap of CPF OA. By then I have some knowledge on Good Debts.  Fast forward now, if I have to go through this again today, I would have leave CPF alone. First of all the amount I tapped is just 5% of the housing value. The hassle is not only unnecessary, and if the amount is to be compounded, I would have less saving in total as I need to pay myself the CPF interests that has been borrowed. In addition for comparison, CPF is AAA rated, backed by Singapore government. If I am to buy a private bond, it would be much lesser returns and unwarranted risk to private companies. This totally do not make sense for myself as my exposure to CPF is not major.


Minimum Sum

By age 55, I could withdraw amount above minimum sum. I would expect a number of people to do that. Let's think about it. Why are we so keen to withdraw the monies. CPF is design to support our retirement and to safe guard our golden years. So it seems illogical why people is rushing out the door once they hit the age. The main reason could be the mistrust of institutions. The other is they just want to spend it before their times are up. Both of which is illogical to me. For one, most of my monies will still be denominated in Singapore dollars. And if there are distress in government debts, even saving bank could be frozen or cut. So is either I have a stake in Singapore future or am I not. The later reason on money available to spend is not only irresponsible but there are high risk of financial difficulties if one reached 70s-90s. The one viable scenario I could think of is when I am much way above the minimum sum that drawing some out will give a better return (Not guaranteed) or lifestyle which I COULD AFFORD.


My CPF Plan

Unlike other segments where there are risks, CPF is safer than bonds of good interests. Personally to me this one of the best available investment tool available to be managed at portfolio level offering stability and respectable growth. Ironically, the lock-in is the best part of the system which provide robust protection to citizen. As most of my assets are Non-CPF it will be unlikely I will ever need to do early withdrawal. This will form a nice retirement portion to supplement my monthly income at 65. If I could exchange off min sum at 55 for higher interests, I would opt-in !















I am sorry if there are dissenting voices due to political differences therefore CPF. To me this is purely my personal judgement on financial standpoint as an average investor to go along with the system available to work with us. At the end, if there are money in my CPF-Life once I passed, that's my legacy to my children definitely but certainly I would't want to be HDB as this could mean I have failed as a parent to bring up my children sufficiently.


Cory
2018-1023

Cory Diary : Saving Rate

Pride

Always pride myself about personal saving because I don't really have to plan for it. Being an engineer before, I always have a better gauge feel of manufacturing cost and the quality of the product before I buy. Even after,  I will still think for a while. I would take a walk around the shop or do something such as striking a light conversation with the sales. Interestingly, I would often decided not to buy after. Quite a number of times I found the specs are not to my expectation. Another major reason is I dread of another thing to manage at home. And every time the thoughts come in this is enough for me to say no many times. Maybe I have this minimalist potential.


Value

Going back to value. There are few things I look out for. One of them is weight. Generally a metal object is more sturdy and harder to produce vs plastic materials. So it will often costly to make. The surface of the product is another factor I look into. The texture, pattern, smooth or old plain design. Some has water flow marks or poor plating. I will give a poor rating for non-branded plastic products use in food.

How the parts are jointed is a good indication of the design and the manufacturing process. If you buy a notebook with gaping holes between parts, and to make it worst, unevenness as well this could give an indication on the overall quality managed by the product team.

To go deeper, I would looks for design, durability and usability. But I would rather exchange for "disposable" products which is like 2 to 10 times cheaper rather than getting an expensive pen of high reliability that I hardly ever use unless the purpose is for decoration purposes or significance. The final is servicing. A recognize brand do command a better premium that I am willing to have more cash to let go. How large is up to individual.

Of-course is not always the same exact criteria. But this habits and what to look out for helps to contain my spending habits. Year 2018 is special because of a number of big ticket items. Excluding Pension/CPF and Stock dynamics into the equation, just take home salary, is about 30% saving rate. This is markedly down from 40% to 50% range previously but is all worth it because is for Immeasurable Value.


Cheers

Cory
2018-1021

Cory Diary : Passive Income Plan with recent volatility

STI Index has corrected about 10% this year. From 3402.92 on 29th Dec'17 down to 3069.17 last friday. Yield improved from 3.3% to 3.68%. For people who invest now, that's $3,380 more dividends for a million dollar portfolio in STI Index. I would be celebrating on the increase value.

We can said similarly for Reits as well. While existing investors are still nursing capital loss this doesn't really matter as long the investment is stable type because the price will return long term. If is not, and fundamental yet change in the company performance, this shouldn't be bad anyway.

My next challenge will be when I should increase my stake. Since we have hit a 10% reduction, I think is time we could explore some sizable injection. But I won't use up all my reserve. Good news for those still on salary. Your reserve will continue to grow as long your expense is managed.

I would avoid growth stocks since I am not so sure about the bottom. I only know the market is cheaper for my dividend strategy. So if the market goes lower I would still be ok. As for dividend stocks, I would focus on more robust counters. STI Index if I am not so particular with higher yields and lack of ideas. And probably 6% range on Reits. The next question will be which will fit better to my portfolio.

First Reit recent change while neutral do pose some anxiety. I wouldn't want to add more. Maple families are still on the lower yield range. So are ParkwayLife. FCT and Fraser L&R doesn't looks like corrected enough. The issue I have with FCT is the yield doesn't meet the cut and I have CMT. Fraser L&R still has 7% though. So this could be a candidate and I already has some stake in it. The other is Aims Reit. But I have Ascendas Reit which provides better coverage.


Cory
2018-1018

Cory Diary : CapitaMall Trust and WestGate

Manage to sit down and do a quick read on the circular regarding the acquisition of Westgate. It has been a long while holding to an investment report physically. I think CMT have done well in providing good investment knowledge on this.

One of the key variables provided is the gearing dependency on Debt funding ranging at 70%, 85% and 100%. Gearing shifts from 31.5% to 34%, 35% and 36% respectively. What is more interesting is the DPU gains which increase from 11.16 cents to 11.18, 11.25 and 11.33. The most will be 1.5% increase in DPU. Another to know is the interest rate used to compute the above is 3.25% for the additional debts. For a 3.5% it will be about 0.2% impact to DPU.

The main impact is the gearing if is total debt funded. I would think they may maximize private placement amount first to mitigate gearing to the point where DPU gains from existing operations do not cause reduction in dpu level to be not accretive. The other possibility is that valuation up largely from existing property which could help mitigate the gearing space.

Interesting item I found is that the agreed value is much lower than other properties nearby even though the yield is only 4.4%. The key is the strategicness of the asset long term. The other positive is the portfolio overall improvement which is where CMT strength is. A similar learning could be FLT. If FLT emerges better, why wouldn't CMT which has even more stable income and stronger sponsor ?

We could see more exciting future for shareholders.

Cory

2018-1003

Cory Diary : Reits 2018 Updates

Started writing on this last Friday night and then i broke off from my usual routine to finish it in one go. Too many things going on in my mind recently. One of them is work where we need to plan for mitigation plans due to tariff. Is sure going to be more costly for Americans but considering the significant amount of jobs created, looks like it could be a net plus for average folks. I will be expecting companies to start to move some of their production at least to other countries to reduce their cost from operating in China. Pace could speed up if the tariffs increases some more. From the looks of it, businesses in China will not look good as America is a Consumer Market of the world.

Another thing that keep me busy is Mew Two is now available in Raid. For those who is not familiar, is Pokemon Go game. Yup, I am still in it. The game keeps me busy with some exercise but just be careful on the roads. The other problem is if I am too near to garden or vegetation, there may be mosquitoes. Is still quite amazing that the game attracts a crowd. To take this Pokemon will need about 10 players and indeed a team effort until a lady came up with 4 phones at one go on the raid. Anyone need a new friend please message me. I need to complete a mission ....

Back to investment. I have shown my portfolio of equities previously. This time round I am writing about each of the reit/trusts as I can. My thoughts, fear, wish, dream ... whatever. Don't say what the hell this guy blogging on Friday night. I always could do and anytime whenever I feel the urge and when time permit. The first 2 Reits are the blood vines of Singapore and the other 3 are tapping E.Asia/Australia. As long the country and East Asia do well. So I do have a stake to ensure Singapore continue to prospers at least. In REIT investment I have the opinion that I do not have to max out my earning. I would prefer 有钱大家赚. So as long they perform well consistently, Management / Employees or private placement shareholders are welcome to earn form it.


ASCENDAS REIT, CAPITAMALL TRUST

This stocks have long history of dividends. If I can remember, there maybe some placements along the way. What I focus is the growing DPU. And that's what all matter isn't it ? I remember the former one hits 8% yield years ago. Now the yield has come down to 6% (give and take....) so there is nice capital gains on top of dividends. Is it attractive now ? Well, we can have some financial crisis and money got suck out of the system and stock price could drop to 6% price level. Will it really really happen? I dunno but I do know there is a lot of cash out there. A 2% yield drop could mean more than 20% reduction in stock value. Will take 3 years to recover if the stock continues to stay low. But I can wait while collecting the dividends. I would think is best to size my investment appropriately as there is some fluctuations over the years. I am not too worry if it goes lower. This is provided fundamentally the business has not changed to bad. If we have added up all the DPU and Capital gains over the years, the returns are in many times that we have invested.The thing is we need to have skin in it and forget about trying to time a perfect entry. The dpu would cover them over time.


ASCENDAS-HTRUST, MAPLETREE IND TR, MAPLETREE NAC TR

This is another class of reits that is well managed so far. The hospitality sector has seen it's dynamics so able to grow consistently is not easy.  Industrial reit is not cheap I would say. But the growth is there. Maple family has been on growth path so there will be rights issue along the way. My wish is that they stay within private placement sphere. Able to attract this class of private money is like giving confidence to the companies. If we are to issue rights to existing shareholders, I am not sure is it because they have problem to raise money without giving significant discounts. And this may be worrying. I use such indication to reinforce my judgement. So I am ok to earn lesser as long the path is right and make the company more powerful. The Maple managed malls is recent addition. There seems good potential to provide strong DPU. The gearing is high though so I am only comfortable to add only some for now. This 3 reits performance are more dynamic than CMT and Ascendas in my opinion.


FIRST REIT, PARKWAYLIFE REIT

Both Medical Reits. They don't manage the hospital operations. Both if we are to use P/B to value them, will be relatively expensive. The reason I believe is the stable earning it provides at constant growth and the properties. Their moat is high. Really high. Let put it this way. If my wife is pregnant, and need to do NIPS test. And the facility recommends say NIPS+ and the cost increases from $2000 to $4000. The additional $2000 can detect down syndrome much more accurate from 90% to 99%. Will you pay ? Happily, I will. And if there is a invasive test which cost only $500 with 100% accuracy but there is 1% chance she will miscarriage, will you choose this option ? I think most will say no way ! That's how safe is Medical Reit as their tenants have wider ability to pay.

But not all reits are the same. I am always wary of First Reit sponsor. If you have been following this reit, the Sponsor has not been in strong financial position due to over expansion in other businesses. However there are still many hospitals along the pipeline and they have been able to maintain strong DPUs. Is pretty hard to fake giving out money if they aren't making money out of it. The recent event is a case to watch more closely as the sponsor find innovative way to raise money without losing control of the reit. That's how I read it. I don't get to be sleepless over but need to watch it. I feel is unlikely to be a "Sabana Event". I did reduces my exposure a little bit from it and as a result took some losses from it YTD since is reference to end of last year price. Some analysts are positive over the deals. I take it with pinch of salt. The dpu is still good for now.

As for ParkwayLife Reit, I have size it such that I can be relax on it. The 4+ dividends is low but I can accept it as it helps spread my exposure with stable returns long term.


FRASERS L&I TR

Australia currency has not been doing well for couple of years. So I think it does has some impact on the returns. As long the DPU growth able to covers it, the Reit should be ok. They have freehold assets over there so this do make up for long term. They do has rental reversion but I feel it is not a surprise as there is clause within the contract that up the rental fee annually which can move it past the market rate.So not surprisingly when is up for renewal, there is reversion to mean at least. The European acquisition is something I do not really like as it draw away the future funding space so I sold all after. However the current yield is good and do not see reduction of it near term after rights issue. Another concern I have is that they aren't maple. I returned with smaller position nevertheless due to the strong yield.


NETLINK NBN TR

This is not "HPH Trust" or many Trusts out there in my view. Their asset has long term value and good moat.
Singtel hold the max they could on this one which tell me something. The G5 future rest on even more Fibre optics. Down side is that charges are regulated from my read in the internet. The DPU will be stable but I will not be surprise to see fluctuation. Some people hope for deeper correction before they go in. I do not think this make sense. The annual dividends is about 5.8% yield from the top of my head. If we park the money temporarily in SSB is about 2% short term. Opportunity cost is 3.8% yield. The waiting time outside could be expensive.If I am to part my money in other equity, I lose my opportunity fund.

If the Trust is indeed stable even $0.90 to $1.0 is not expensive. Here's the growth I hope for. But then will I sell ? Not if I have enough stake in it to do partial. Will the price go lower and lower. I feel is unlikely to happen unless manhole get obsoleted. They have good profitability improvement from cost cutting. How much can this go without affecting the operation or future growth is unknown but there is limit. I hope to see management take some stakes from the market. So far yet seen.


Cory
2018-0928

Cory Diary : Radar Chart 2018-0920

There are currently 24 stocks in my portfolio. Reit/Tr allocation about 51%. They help to support the portfolio yield to 4.7% at least for now. Probably 5% if we includes the US stocks tracked here. Hardly need to monitor many of my stocks in the portfolio now. Primary focus or should I say most of my investment time spend is for new stock, and for the 9 Reit/Trusts for special announcements other than counting dividends received. haaaa

Keppel added. Sold ST Engineering on sudden spike. No longer vested in Sheng Siong. Has seen awesome returns for the pass few years.  Moving forward, I would probably find time to up my stakes in existing Reits/Trusts which has lower exposure but timing has to be right.

5% yield portfolio is nothing to shout about. There are room to improve with stability in mind. Capital gains are much harder for me. Well, maybe except Creative which I enjoy large gain in a day contra. I like to use this logic. If a stock able to give 4%-7% yield annually without much DPU reduction or maybe some increase, and there aren't fundamental deterioration in the business, stock price doesn't matters. I like to repeat to myself again ... STOCK PRICE doesn't matters !

Will I ever get it ?


Cory
2018-0920

Cory Diary : PRC Market Crash 2.0

Shanghai Composite Index closed 2702. The last time we see this level was in 2011. Trade War certainly takes it tolls on them while DJIA is at the opposite 26,000 high range. STI Index is impacted as well. The last time this happens  was in 2015 when PRC market crashed. So if PRC market decides to have major shake up next time, I should know what to do. Don't blur for the 3rd time ... well I dunno  :)

That's the risk of market. We just have to manage it. Now, if STI index is to pickup, where should I be in ? Banks I think. And what I should avoid ? Probably Property related counters. The curb this time is 一針見血.

Cory

20180909

Cory Diary : Update on Trades 2018-0908

Singapore Saving Bond

Plan to apply for another switch in Singapore Saving Bond ( SSB ). Can't help it as is more than 20% up from a year ago. As last time, I expect the switch to be quite straight forward. Recall the bond I want this month and applied for the coming one same time. Unless we see significant jump in interests from SSB, this should be the last batch near term.


OCC 5.1% NCPS

Yes, it has been recalled. Vested in this for 7 years of varying amount. Total return is about 15k.
It will take some time for the capital to be returned to my account. Decided to replace some of the "Dividend Gap" with Ascendas Reit giving about 6% due to recent placement news. I thought is a good opportunity.
Price may go lower but I don't think it will affects much long term since it is a stable large reit.


JD.com

My foray into US market is not smooth sailing this week. CEO was arrested on rape allegations. He was allowed to leave without bail. So I will hold on to it for now.


That's all I can quickly remember !


Cory
2018-0908

Cory Diary : Investment in Personal Time

One of my team member's father passed away yesterday in his office. We were in shock as his father is only 53. The primary cause speculated was Work Related Stress. While we strives for higher income or financial independence, first rule of investment probably should be to make sure we can take care of our family and ourselves well. And this kind of capped our limit on how much we can push our goals. However we must never lose sight of healthy lifestyle. Investment in our own personal time is equally important.

Just recently my team scored above 90% in Company survey in overall key score on employee feedback on favorable responses. This is 6% above from last year and about 20% ahead in company average. I am pleased because we are in Best-in-Class Category. There are many questions asked in the survey but not all is used to compute the key measurement score. That's do not mean those questions asked that do not have the weight-age in it is not important but more due to relevancy. One of such question asked is Work Life Balance. We hit 96% Positive and remaining 4% above average on this one.

Some people maybe skeptical on such survey but based on my experience this gives management a good indication on where the company and teams are heading. And what we should focus on in the future to direct it. Happy Employees Happy Profits. Over the years my management style has changed on reflection of such surveys as well. This is my 15th I think. Every-time I look at newly promoted manager, deep in my heart i know it will take him a decade probably to catch up without mentor / guidance in people management because I saw it all.


Cheers

Cory
20180905

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