Cory Diary : Equity Allocation Aug'21

Driving more focus into few areas in August. Below a glimpse shot of Equity Portfolio.

Activities

1. Adjusted to 10% Cash Investment fund of Portfolio. Continue to maintain 60k dividend plan.

2. Did some re-balancing down in DBS, Netlink, AMD and IS Asia Bond. Also cleared CICT, AIMS, OCBC & MNACT Positions

3. Some cash back into KDC as the counter is down about 16% from peak. The start of acquisition is a good step for the New CEO.

Portfolio

7 Reits ( Including iReit and Elite Com )

5 Foreign ( including HST )

5 Core ( Including SS )

2 Bonds

Looks to me in clean slate which I feel comfortable.

Evaluations

Quick Evaluation of a few counters. Koufu, VHT, ... , And whether to increase further in HST, Elite, iReit, Sheng Siong and Tesla. Decided to get more of MCT and MIT.

I wanted to dedicate some time on my evaluation methodology but a little lazy. Will do this next time. Basically the time I spend in such is not much as I prefer higher level decision making.

thanks

Cory

2021-0812

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Cory Diary : Multi-Years Compounded Performance

This is a long term tracking chart. The performance includes Dividend received however for ease of tracking, STI dividend was excluded. Therefore, will need to add about 3%+. There is already some elaborate study done on it so is quite safe to do it for aga-ration.

Annual and Multi-Years Compounded S$ Returns

One thing I like about this chart is setup one time without need for modification as is all in %. This is especially so for those who has heartburn to see absolute figures especially younger adults that just step into the adult world, and feels astronomical.

For this chart, there are two vertical scales. Left is to track annual returns. Right is to track Compounded Multi-Years Returns. They are put together because when I first have them drawn, there is good corresponding reference to each other in same scale with different chart representation. Over time the sense of different size proportion looks better if I could include Year 2008 GFC swing, and the scales differentiated.

The annual performance has been coming down over the years due to increasing portfolio size and risk management. It has stabilized for the last 7 years. Trying to breakout from it on risk perspective will be difficult mentally. However my recent venture into oversea markets may change the picture. The US stocks invested have stabilized and recent investment in HK Tech at lows (which can go lower). Moving forward it will be interesting to see how US and HK Markets exposures will do to the returns.

As the chart indicated, compounded returns multi years stood at 7.3%. Only the last figure of the years matter. As for STI, is 0.1% only. And if we include dividend it will be around 3%+. Take note this is S$ and I have written earlier that currency matters if we invest overseas due to strong S$.

Some people will be questioning why STI is so low. Relatively, STI has not been performing well. Another reason is the chart started on Year 2007 just before the Year 2008 GFC. Frankly it can be worst if it has not been held up by the banks and a few Reits this year.

Unfortunately you can't choose when you are born and so are the year we start investing. Take note past returns does not implied future returns.

Cory

2021-0809

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Cory Diary : Short History of iReit Global

Timeline

7th Aug'20 - 1H2020 DPU S$2.85 (3.16 bf. ret), NAV €0.55, 641,862,550 Shares, Gearing 39%.

7th Aug'20 - Propose Remaining stake in Spain. Stock price dropped 3 cents from S$0.67 and then slide down to S$0.575 in early Nov. A significant right issue at 39.5% discount. 

22nd Oct'20 - The acquisition was completed.

28th Oct'20 - IREIT also repaid the €32.0m loan provided by CDL.

10th Feb'21 - 2H2020 DPU S$2.18 (2.42 bf. ret), NAV €0.47, 938,963,000 Shares, Gearing 34.8%.

28th Apr'21 - Propose acquisition of 27 properties of Decathlon France.

12th May'21 Completion of acquisition expected in 3Q2021

30th Jun'21 Placement 11,372,868 Units @0.6155. Stock Price @0.635.

2nd Jul'21 Launch of PO 214 for every 1000 existing units. Closed on 14th Jul'21 PO 201,137,870 Units @0.595. Stock Price @0.635

6th Aug'21  - 1H2021 DPU S$2.30 (2.56 bf. ret), NAV €0.50, 952,302,277 Shares, Gearing 33.3%.

Stock Price 0.635.

In Review

If we are to do comparison on 1H2021/1H2020, DPU reduced by -19.3%. Per 1st Rights and 2nd Rights issue if we take the number literally is -8.3% and -2.2%. For both rights issues, they were DPU dilutive and shareholders are compensated through rights discounts and for savvy holders applying for more excess rights. The first Rights discount 39.5% on large amount of shares while the 2nd Rights issue yet include will be typical and much normal.

So If we understand the complexity of the above we would understand the result below on why iReit needs to reinstate 2020 results as this is already expected, to achieve 17.3% YOY increase instead just on larger share base basis, and not considering the discounts.

So to make it simple, how do we value it ?

Year 2020 yield is 7.2%.

Year 2021 YTD 6.9%.

However we have significantly enlarged base excluding Decathlon France exercise. Between the two dates, shareholders gained in discounts, distribution and capital. Win-Win. Now, how will 9th Aug'21 trading day think is anybody guess.

Hope this helps.

Cory

2021-0808

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Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Trading Log 2021-0808

Do quite a number of trades recently for a number of reasons. So I thought is good time to document my thoughts as my portfolio hits ATH and want to secure my profits for some counters and some rebalancing. Take note this is from memory so I could make some errors so please DYODD as usual.

CICT

Cleared my position when the price bounced back some after Ex-Dividend. My opinion is that opening up certainly will help the malls. Considering I have positions in both FCT and MCT, I could be more focus. CICT still has possible opportunity externally but I decided not to wait. I may come back to look at it again if they work this out well. Don't get me wrong. CICT is still a stable stock to own for dividend but I am looking for more growth and I feel FCT and MCT will likely do better in the long run.

Nothing is better than a picture. This is where I should focus for longer term. Hope this explain my changes with time. Is quite obvious.

DBS Holding & OCBC Bank

With MAS finally lifting of Dividend Curb, the stock is now back to 33 cents for coming quarter. DBS price went past $31. I took the opportunity to take some profit off the table instead. One of the main reason is that the earning has comes down before allowances. I still have large holding in the bank. I also take the opportunity to clear off my OCBC balance shares the same time. A wonderful ride with banks this year with DBS registering the largest gains YTD and indirectly pushing up the STI Index.

SGX

The result of SGX is not so good. Lower rev and profit. What's surprise me is the interests return from Treasury income took a hit due to lowering interest rates. I didn't see this coming. The stock is quite promising. My investment in the stock is I have the gut feel is quite undervalued. When it hits $12, I did not sell. Frankly, I do not know when to sell because I am not ready for it. So the financial report kind of hit it on my head. I decided to take some profit off the table. Again I am still well vested in SGX and will continue to monitor a bit.

Cory

2021-0808

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Elite Commercial Reit - GBP

For those who are not familiar, Elite Commercial Reit (MXNU) is listed in SGX traded in GBP. Initially daunted by the need to manage exchange rate and it's risk, it is now a part of Cory Portfolio that provide strong dividend yield. It does take time for Old Cory to adapt but he really do. And is even better to do it when rate is favorable. Obviously, high yield is meaningless if the business fundamental is not there as it will not be sustainable.

Fundamental

1H2021 Report

DPU 2.63 in which 0.09 advance has already Ex Div. Annualized yield of 7.85% ( @Price 0.67 )

Gearing 42.1% which is slightly high so further acquisition will need to raise fund

Cost of Debts ~1.9% is quite low.

ICR 6.4x cannot be better

Exchange Rate

GBP has been doing very well against SGD. Current 1GBP = 1.88 SGD. So people who has vested since Oct last year enjoyed further currency gains.

Short and Sweet. 

Roger Out.

Cory

2021-0804

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : The Crackdown of China Mega Companies

The Crackdown

China crackdown on Tech and Education sectors have seen major corrections. Investors who are Pro Chinese economy suffered the most if they are vested in share of this Chinese companies. Wonder who's next on the list ?

To give a glimpse how deep it is.

Peak of Alibaba (HK) was HK$307.40, now is HK$189 over 8 months. That's -38.5% decline.

Peak of Tencent (HK) was HK$775.50, now is HK$549.5 in just 5.5 months. Declined -29.1%.

Peak of Mei Tuan (HK) was HK$460, now is HK$215 for -53% in about 5.5 months.

On the positive aspect, the price only slipped back to mid of last year which compared to Education Sector basically close to being annihilated over 5 months. Not going into why they are doing this but certainly CCP does a better job that Trump couldn't for his entire term.

And this comes to how unbelievable it can be on state engineered collapsed of the companies. It is basically one-sided affair without any compensations to shareholders. Can US shareholders sues China ? This going to be serious if they won except that they have never approved their listing. Sounds like CLOB huh ? 

HST

What we have learned is that probably we should  diversify if we want to have China exposure. So that's what I did recently. Initiated new small positions in HST except it is still Tech. So my main worry now is how bad can it get for Tech. Will have to go slow on my purchases. Someone mentioned to wait for uptrend. That's probably a good suggestion. At the mean time, stanch believers of Chinese economies will have hard pills to swallow politically.

Cory

2021-0802

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Equity Performance Report Card Aug'21

Preface

Please spend some time to do a slow read and think else I rather you skip this article. The trading month ended for July and I am more excited on this report card. 

Wealth

If one has noticed, I have been sharing wealth information so that people of My Time benefits. I hardly care less of people who think negatively on such sharing for they are likely in the poorer category in which I could understand they likely will also think money is Evil.

Let me tell you this. You are what you are and money just amplifies who you are. (Says Benny from a youtuber of Café Money)  Just like sex, we Asian hardly talk much on the detail of money and asset as though is some devil schemes from hell. Fact of matters are Sex and Money are major part of our lives that provides the needed motivation and drives. Discussing them will help our life significantly.

Nice Surprise

This morning I got invitation to join Private Client. What a nice surprise though I suspect not much to do with my growing portfolio but consolidation of my accounts. Does it helps to join or more constraints in the future ? I will have to do some investigative work and for the matter is just an algorithm that trigger the invitation and then you get tied probably. When you hit my age with saving and growing salary income and investment, plus the printing thus higher inflation, hitting the amount needed to qualify maybe just matter of time. They probably will adjust the bar higher if it were before Digital Banking Age. To some readers, they would have it long ago so bear with me as I grow. And to younger investors, I have this to say, be patience ! Your time will come.

Digital Banking

With digital banking on the rise with competition, traditional banking no longer has monopoly edge over the consumers. The new frontiers will be Investment Banking and Wealth Management. So collecting clients will be a hobby necessity for survival considering the fixed cost to manage them will be reduced with the automated Digital World.

Report Card

Talk so much today. And here my Aug report card. Is a tooth and nail fight again with STI and manage to edge out a little bit again from last report. So the delta has narrowed to -2% from STI Index. Portfolio hits ATH not surprisingly as this helps to get the invitation. ( grin ). I am still quite positive on the fight till year end.

If one has noticed, I have Cory XIRR (Annualised YTD)  and Cory Yield for comparison and they typically do not deviate much. It should stay that way if fresh fund injection is not significant, and it is so far for my case.

The portfolio still has some room to move up so I am not surprise it will move higher provided there is no broad market correction. Again XIRR for my chart is ytd annualized so the end date of the formula set as 31 Dec'21 instead of today. So that it won't extrapolated the performance which could easily move my XIRR up by another 80% probably. If it happens then it will deviate significantly from my profit yield which is a "Good Checksum" I believe.

Profit yield basically is Total Profit YTD including dividend gained this year alone, divide by Initial investment cost valued on start of year. So XIRR for my YTD hits 9.4%. The stronger performance was due to : -

1. DBS share maintained above 30

2. AREIT moving up

3. MINT scaling up well

4. US stocks doing well

5. SGX is still growing

Foreign Shares allocation hits Stage 2 which is now 10% of portfolio allocation. I am glad so on the market diversification is showing traction.

Cory

2021-0731

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Sheng Siong 1H21

When I think of Sheng Siong. Here's what in my mind. One of iconic brand in Singapore that is doing well in Covid and Prior for a family run business. Reward shareholders and employees. Expansion in China. Outskirt supermarket.

Result 1H21

To sum it up the recent performance, table as above. If we do a fast look, one would think Sheng Siong has a terrible 1st Half but we need to remember that it benefitted disproportionately last year due to Covid lockdown and is not a normal year.

Profit

What we have to do is to view current half below and what is their possible future by skipping Covid Period. Operating Profit for 1st half is already 87% of FY2019 Pre-Covid.

And that's the power of Sheng Siong growth story and this is despite maintaining about 70% of dividend payout ratio. Another Good News is that the subsidiary in China continued to be profitable.

Cory

2021-0730

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : The Secret Trick of Dividend Investing

The Myths

Often people uses DPU as yardstick for evaluation of Reit returns and this is perfect. Obviously nothing matter if the integrity or risk of the Reits are in doubts. If that is the case, why often we see top performer of Reit investor often has low yield Reit ? Many will argue it takes a huge portfolio to achieve the level of dividend needed. That's a huge misconception when one tries to reverse engineer and implied so.

Another key believes is that they buy early in the dividend game, years ago. And so people hope for a big crash before they will consider the same to stretch their dollar. Hello ? did you buy significantly in Mar'20 Covid crash ? If so why is your portfolio still not big ?

Reit Valuation

Valuation of Reit in addition to current yield there is another critical factor which I did not blogged much about and that is price growth. Never mind what's behind that drive it in this article. The essence I want to share is price growth. huh, isn't that blasphemy ? Please hear me out.

In March'21 this year, Mapletree Industrial Trust hits low of 2.52. At this price the current yield is about 5.2% in which DPU roughly 13.2 cents. Some would even say 5%. Not that great and many will ignore it. Fast forward today, less than 5 months later, is now last traded at 2.92 on 7/28. Yield 4.5%.

Now, if we add 13.2 cent and the price delta from Mar to end July of 40 cents, that is 53.2 cents. Now work back the math if we use 53.2 cent / $2.52 = 21% for 5 month works. Think it in yield term this is easily 10 times of March'21, 5.2% yield annualized.

Real Life Example

And this is an example on why I bought Mapletree Industrial Reit this year from Feb to Jul'21 this year. I have a price expectation that it can go higher while I am prepared to wait to collect 13.2 cents annually.  That's the Magic on why Portfolio can compounded fast because is just not dividend even though we are prepared to sit on it. So next time someone tell you his portfolio is small and will take forever to grow, ask him to think again.

I have challenged two huge misconceptions today that most do not know about. And how I grow mine. How much we understand is up to individual. Next, how I know the price has the potential to go much higher ?

That's another Story Telling which sprinkles across in all my articles.

Cory

2021-0729

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Tesla 2021 Q2

Tesla

Spectacular Result from Tesla yesterday. Best Quarter so far.

YOY

Net Income 1.4B from $104M

Non-GAAP earnings per share of $1.45 ahead of $0.98 expectation

Revenue rose 98% to $11.96 billion, from $6.04 billion a year ago

Operating cash flow of $619M

Produced 200k Vehicles

Operating Margin of 11%

Bitcoin-related impairment of ($23 million)

Solar and energy storage business rakes in $810M Rev. 116% from same Q last year.

The business is damped by ...

The chip shortage “remains quite serious,” Chief Executive Elon Musk said in a call after the results. “The chip supply is fundamentally the governing factor on our output,” and it’s hard to say how long it will last because it’s out of Tesla’s control, he said.

 “To better focus on these factories, and due to the limited availability of battery cells and global supply chain challenges, we have shifted the launch of the Semi truck program to 2022,” it said.

and today by Chinese Tech and Education Stocks sell down. Tesla PE has come down from 1200 range many months ago to less than 175 ! with it's  growth. That's how amazing the business ability to scale.

Took the opportunity to do a little DCA on Tesla Shares in a Sea of Red Tides. 

Cory

2021-0728

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Returning to MNACT (Updated)

Mapletree North Asia Commercial Trust

After significant sales in Aims Apac Reit, the portfolio needs some higher yield Reit to compensate for the dividend. One of the consideration is MNACT due to Maple Story ... and of-course the yield. The main concern is the potential rights issue. Nevertheless, no harm to go ahead to initiate some token purchases.

The Business update is out today so I thought is good to take a peek. The table below looks quite ugly. Not sure is an understatement. The reversion -34% on 44% of leases in Festival Walk. Not sure there is more contract focus on earning from sales which are in good recovery phase.

Do note the ICR is Trailing 12 months basis. However much lower rental reliefs of S$4.0 million granted to retail tenants at FW in 1Q FY21/22 compared to the corresponding period last year (1Q FY20/21: S$17.9 million )

Personally I feel MNACT is racing against time before the full impact of FW is felt such that DPU will continues in a reasonable manner with rising retail sales and timely acquisitions. There is also another equation which is the insurance proceed. There seems to be so many unknown and I am glad that currently my stake is small. After reviewing the information, probably to halt further increase till we have more concrete results. But I have no doubt the Manager is capable and doing the best they can.

(Updated 7/28: Decided to clear my small position ~cut loss and move to HST)

Cory

2021-0727

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Why is Reits affected by Interest Rate

Often we hear analysts or in forum the perception that Increasing Interest Rate will affects the cost of Reits Loans therefore profitability. However the correlations on table below tells a different story that Reits do generally well in high rate environments .  Hope this settle once and for all, the myth or maybe there is deeper issues within.

Interest Rate Impacts

A well managed Reits will pass the cost to tenant. A too drastic increase within a short period do affect Reits short term as majority of tenancy agreements are still in force but that's not the argument here. Some Reits have build-in rental escalation tied to sales and inflation. Nevertheless, cost is able to pass down to tenant mitigating the impact.

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Yield Compression

What we know is that when investing in Reits, we looks for yield therefore it is logical that we compared it to other products to decide is it worth the risk or seek better returns. In the scenario movement of Interest Rate upwards, it can cause Yield compression. This make us less willing to invest in Reits unless the yield improves further therefore lowering the stock price.

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Competition Examples

Singapore Saving Bond (SSB ) gives 1.5% annualized (each year) for 10 years. Say the rate doubled to 3% and this allows SSB to give higher rate say 2%. Some people who invest in a Reit logically will switch to SSB considering it is basically riskless to capital. Reit price will naturally falls as there will be more sellers.

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In situation of no good alternative, REITs price will generally rises with strong economic and stability as investors are willing to take larger risk. Another comparison though not necessary guaranteed is CPF giving 2.5% and 4% to CPF OA and CPF SA respectively. Though riskless, there are limitations and restrictions.

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Not all Reits are the same. Some Reits risks are insane. Be careful of Yield Traps and Pitfalls. However, if a Strong Reit is unfairly sold down, remember to "Koi Durians" ! This differentiate Veterans from the Green as Fundamentally, the business unchanged.

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If you are interested to know more about Reits. Try this books !

Making your Millions in Reit

Passive Income from Singapore Reits

Singapore REITs as An Asset Class

Playing the REITs Game

You could be well on the journey to Financial Freedom like me. But please DYODD.

Cory

2021-0725

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Equity Allocation Jul'21

iReit Global

Recent change includes the long awaiting Preferential Offering (PO) finalized. The excess allocation result is kind of surprise yet not. CDP share has more than 2700% excess allocation in term on original rights allocation. This is in consideration that share size is minuscule.

On Custodian account side which is where main bulk of iReit shares are, it is slightly more than 100% excess allocation again in term of original rights given. If we have applied for double the excess, there is likelihood we would have got it as well based on others feedback. This is a surprise. On hindsight, which is a bitch, PP is quite small relative to PO. Well sometimes it takes experience to get through. And then proceed to shade a little off the portfolio to right size the exposure assuming the trading price maintains.

SGX

Is on the tear again. Blogged many times on the significant undervaluation. It has keep growing. Unfortunately we couldn't chase as valuation is an Art especially so when we have sizeable exposure already. It is also one that provides the balance factor on different market sentiment days. It has the potential to grow to join the big 5 of the portfolio allowing more diversification and stability needed to compensate on smaller bond size.

Allocation

Bond investment reduced to 11% but in actual there is expansion in CPF allocation which is not part of this scope. Any interests on Bond/CPF can read ( Here ). Reit allocation lowered to 48% despite recent PO. This is mainly due to reduction of Aims Apac Reit from recent run up. I was second guessing potential rights issue which I have no plan to take up hence the change but on second taught there is possibility of merger which has been rumored for a long time.

We have seen good gains of the portfolio this year. However, there is still room to grow till the end of the year as it has laggards such as Malls and Industrial Reits which will benefit from the recovery of Covid-19 despite hiccups. Maybe we will see 15% allocation if all stars aligned.

Dividend Returns

Dividend generation at sustainable level for the portfolio hits 60k. ( If we leave as it is without injection and say 2% growth, and some dividend growth as well, we will see 4k more dividends each year. This is rough estimate as we need more data with time to get the trend right. The formula will be portfolio value x 2% growth x 5% yield + 2% growth x annual dividend. ) Some injections will push the annual dividend increases to 5k. What this mean is it will take 7 to 8 years for dividend to grow to 100k annual on conservative estimate if we let the portfolio runs on with limited intervention. However, the portfolio which has been living on 7% annualized returns for past decade. So it can be done in 5 years or less. A long stretch goal. Wishful thinking ?

Cory

2021-0722

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : How much is enough before Happiness increases become marginal ?

Perspectives

In Singapore context, what is enough ? First of all we need to view it from personal experience perspective. If you have yet seen S$500 lunch on a daily basis, this aren't going to be your baseline of reference but if you are going to challenge that this is unrealistic, sorry to say you are not in that league yet to even hear about it. So where should we start with ? I think social norm or median average maybe a good starting point. And then we put a plus one or two over it.

Bucket List

Condo maybe the one. Why ? Well, 80% of Singaporeans probably lives in HDB. Don't get me wrong, HDB is really nice and comfortable flat and many are proud of it. However with so many Condo around in every town, is not uncommon to know someone or friends who stay in them. It has it's own facilities and atas feel of being in the "Inner Circle" kind of thing. Pardon my analogy because there are always inner of inner circles (iterations). The fact is Condo is much more expensive on average speaks volume. Will one be happy ? That's depend how affordable is it to you. If you slave for it, then maybe not. However if you able to manage it wisely to give you just enough in cashflow, that may work.

Car ya lah. Damn expensive but how come everywhere can see them. Carpark is usually quite full by late evening. So despite the cost and financial logic, many owns them. Is a lifestyle ok. The freedom and convenience are more important. Well, there are different class of cars and Tesla will be on the road soon. So much it will set you back ? Decade ? forget about it. You aren't earning the amount yet probably. However the time saving can be quite significant if one could afford especially for family.

Holiday lor. Hey I am not talking about Thailand Beach or Malaysia picking (plucking ) durian ok. The real thing like Climbing the Paris Tower or taking Thames River Cruise in London. To be shiok throw in 2 weeks on semi-annual basis will be Perfect ! Wah lao .... . The essence that able to get away to cool cool place, new perspective and out from routine and experiences makes life meaningful.

Family a Must. I say this because I already have one with 2 toddlers. Able to form a family and seeing your children grow certainly has some level of satisfaction and happiness. Of course if you like being Single this does not apply. I aren't going to stir the Hornet Nest which is an ever-growing in today world. Financially, this will definitely speed you up. Maybe that's the main reason why we are in this. But the number one devil is loneliness. Not easy to overcome.

Parental Allowance for those who are in sandwiched class. Able to take care of our old folks give happiness when we can afford. I heard of many stories. If life is hard for you, how about them ? Every family different and is not for us to judge. At least at minimum return what they have onto you. Inflation and Opportunity cost adjusted !

Medical Insurance could be critical for many. One never know what will happen the next day. If we are to worry day-in day-out due to medical cost, able to afford a good coverage is probably necessary insurance or mitigation. Never really believe one should use insurance as an investment tool. This only adds complication that clouds what is really needed. Being focus on Medical, and Life Insurance on the early part of our career helps family. Buying too much of it or wrong insurance products maybe detrimental to one investment finances and cause regrets.

Passive Income obviously needed for most people unless one has significant saving. For Cory case is dividend investing where we continuously compound the returns plus capital injection to grow the passive income annually. Ideally if we can hit a return at age 50 that is near to our salary income of Age 50 this should be very attractive. Yeah, not easy since is a moving target. Maybe a level where we can cover all the other points in the bucket list is a good target and be really happy. Anything more may become good to have. Interestingly there are people who keeps arguing many stuff such as this aren't really truly Passive Income. Dude ! It doesn't has to be. So stop wasting time on pointless argument  and get on with it.

Conclusion

For the Article Title, if we ask a 10 year old, maybe singing and no money is Happiness. For 20 year old yolo is Happiness. And each country could be different due to Education, Tax/Benefits and Culture. This are really multi-facets. However, enough Money can HELP.

From the Bucket List, Happiness level will taper off as checklists are met for specific individual. Looks like there are still much room for Happiness to Grow in this study.

Cheers

Cory

2021-0718

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : The Waiting Game - Dividend Investing

If you are thinking about holding on to the share to collect dividend long term then today Diary is not about it. I have mentioned many times the price of not being in the market. If we use absolute proportion in percentage term say 1 year is 6% yield. 5 years roughly 30% cost for staying away from the market. Therefore is quite risky strategy to play as it can be equivalent to a self create major crash to oneself.

However, there will be times market is so irrational that you wish to buy low to improve your future returns. This happens when there is great fear in the market. Even if one can overcome it, you must have the money to execute it. And this is a dilemma.

Here's an interesting chart on iReit global on the March'20 rout of the market for a fundamentally strong stock. Probably 50% discount. Why people sell after looking through the hindsight mirror is really amazing. What is damn wrong with this Reit stock which we are suppose to collect dividend that people sell at such a low price other than broad market issue.

Interestingly, the best opportunity happens when we could tap on some reserve funds just enough to push us ahead. For example I could reduce my housing installment buffers from 3 years to 2 years. Since I have such fund park in SSB, I would need to rationalise what I could lose doing that. It needs to align with better rates so that I can get them back later.

Releasing fixed deposits are obvious way other than saving. So maybe the best time to retire is when you can get your golden handshake or retirement package. The money has to come in time too. Very Risky ? Maybe so. Dyodd. Since every crash is different. Ideally you have some money lying around. Borrowing maybe interesting option but doesn't seems to align with my upbringing if is for stock market.

Rich ones may try to sell their home quickly if the property is still holding up well and channel the fund to stock market. Savvy ones may try margin borrowing. What are my options ? Maybe a fund that is available due to speculative trading. Is where we cut loss on our long quickly when there is market rout. What others ? 

Will the above chart happen again. You bet it will. Maybe investors will get smarter. Then it can be due to someone being force sold. And that can easily happen when we do leverage in stock market even on fundamentally strong stocks like Ascendas, DBS etc. People just go haywire in market crash. And is a Heaven for dividend yield player.

Cory

2021-717

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Charlie Munger on Diversification

Get 3 best in town, is enough for diversification. He talked a lot of things. Only that rough idea gets into me. I decide to adapt his advise to choose the best few stocks oversea. Currently below what I have. Since US slots are full, I should have at least one more in the other "Town".

1. AMD

2. Microsoft

3. Tesla

4. Alibaba (HK)

There are few choices I know without need for in-depth study. While timing can be better, they are quite beaten currently.

1. TENCENT (HK)

2. Lion-OCBC Sec HSTECH

Enjoy !

Cory

2021-0712

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Comfort Delgro

Covid-19 hits Comfort Delgro badly. Basically the company has to reduce their dividend significantly. Maybe too much, resulting large cash currently. Before the Pandemic, most of the Revenue is in Public Transport however quite an amount of profits do comes from Taxi operation. Their dividends have reached their peak way before Pandemic. A hint of competition ?

Most revenue comes from Singapore follow by UK/Ireland. Rest of the countries are not seeing significant growth. In year 2020 till now the company has a lot of support from the government that basically cover their losses and we know this support will be reducing as we move past vaccination phase. 

In the new Normal, I think Transport Operation will not be same again. There is also a lot of WFH leeway provides by many companies. Is it obvious they have to scale down their operation ? Unfortunately their oversea market doesn't seems moving. 

Continuing to give good dividends without a good support on earning is like cashing out and unsustainable. No doubt their cash level can sustain the company for a period. However from dividend yield or growth perspective, neither looks exciting for years to come unless they manage to ignite their businesses which so far doesn't looks like it will.

With limited cash, do we want to lock-up cash here when we can have Giant Chinese Tech companies on the low ? Another question is transportation a worthy recovery play vs other contenders ? Maybe there is other type of play but likely not my cup of tea.

Just me thinking out loud. Pls DYODD. 

Cory

2021-0710

Not Vested. At least not yet.

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Crossing the Psychological 6 Digits Barrier

For the longest time, every-time a single stock cross over the 100k allocation mark, I would intuitively try to adjust down their exposure percentage psychologically. This ding dong went on for a long time and could only see one or two able to be maintained over it each year

This pose a problem as this may mean many of my stocks allocation will be closer together in value as the portfolio get larger. Therefor a lack of differentiation between them that will drive sufficient return on those which I have more confidence in. Another is the need for more stocks to absorb it or else remains undeployed which is another problem.

This year, there are 4 over 100k with 3 of them near to 150k. Maybe this mark a new beginning in my mental model on allocation size as I feel quite comfortable with it. Hope to hit 5 to 6 depending on the market condition moving forward. 

Is this a New Milestone in my Investment journey ?

Cory

2021-0709

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : CDP and Custodian Accounts

There are mainly two ways brokerage can manage our shares in SGX Market. My first trading account in Poems is cash management account and has the shares held in CDP. This mean I can sell the same shares with another brokerage which manages my shares with CDP.  Another thing I like about Poems is the stock price interface feels timely and able to access for more functionality free like market depth (not always), market summary etc. Foreign currencies management is a breeze for me at least. I like this account because there is a face I know for many years whenever I need help. She even gave me an Ang Pao for my first born.

The much cheaper way in fee is through Custodian account. However as the name suggested, the shares are held by brokerage and not CDP. Due to that, we cannot trade the shares managed through this broker with another. For service, mine is Treasures Account and has Relationship manager. They are quite busy however reaching her is not difficult with WhatsApp but it takes time. The interface is not as good for detail portfolio summary however when come to Rights Issue and tracking balances they are Top. Transfer of fund is also a breeze with saving accounts in the same bank.

Recently, CDP has upgraded to able to use QR Code which allows me to use PayNow instead of mailing in through the mail system which will be bad. As I travel oversea often, ATM is not a good option either. So I am glad they have finally implemented a better way to do this. Glad to know and happy to be a shareholder of SGX shares !

For the recent Preferential Offering, decided to apply excess in both Poems and DBS Treasures as I have shares in both accounts. Wish me luck. Maybe I should get few more Custodian accounts to improve my chance ?

Cory

2021-0709

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : A Peek into Net Worth Growth Rate

A glimpse on Net Worth Growth Rate Table. Like to be upfront that this is not representative of general population. Gives a rough background on one with Graduate education, relatively good job, not new to equity value investment, supporting wife, two toddlers, from a generation of sandwich class, hardly pub, owned apartment, give sufficient parental allowance and a value saver.

Net Worth grows from a low base but it can be compounded quickly to sizeable amount in a decade. So do not think starting from a low base is impossible to reach.

In year 2008, investment relative to saving is not much. So GFC impact is relatively minimal. Interestingly 2015 growth is worst than 2008 as more cash is ploughed into investment that do not yield good result that year. The jump in 2019 is amazing because the portfolio size is already large by then. For the year 2021, if the recovery continues 2nd Half, it could be a good double digit growths.

Net Worth returns do not equate equity returns. Not surprisingly, Net Worth returns are lower due to home property, savings/cash , emergency fund or lower returns asset. Net Worth surely amplifies if we fully invest our assets however this comes with Risk. The key question is how to manage this Risk and why is it needed, as allocation of investment goes higher will we be putting our family well-being into jeopardy.

At the end of the day, from the rate it compounds, we probably won't be able to expense it down to zero if we maintain reasonable lifestyle till we passed. So in essence there is no point taking too much risk just to have the opportunity to achieve too high rate of returns. A lot of wealth do not passed three generations probably as the saying goes What we need is to manage it in a way there is sufficient growth at reasonable comfortable pace and not to compete with others who may have take higher risk based on their own circumstances. Ensuring our future generations are strong enough to compete and not spoon-fed should be the way.

The challenge with higher Net worth after years of compounding is how to maintain the pace and capturing low hanging fruits. Chances are salary and investment will grow it larger as personal expense and emergency funds in absolute term may not grow as fast. Of-course there will be situation such as once we reach retirement, medical expense or "Trip to Mars ticket" etc where there could be drawdown instead if the outflow is large enough. Regardless, no matter how much we earn, if spending habits requires more, growth won't happen.

Cory

2021-0706

PS. Market moves ahead again. Looks like my table needs to be updated. :)

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.