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

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

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

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

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

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

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


Cory
20160328

Cory Diary : Is all about Inflation, Stupid !

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

Gross Monthly Income From Work

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

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

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

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

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

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

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

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

Cory
20160317

Cory Diary : Burst Week helps my portfolio to hit XIRR YTD : 0.21%

For some unexplained reason, this week STI ended with about 200 Points up. This explains why one should try to avoid timing the market as the burst can evaporate away as fast as it comes. I hope it won't but I am ok if it does as just being positive in returns are rare in recent times :)

As mentioned in my earlier article (note the period), is one of the good time to buy stocks for future greater returns be it dividends or capital gains. There will always be the other reflection that challenge myself that it can always go lower. Mind here we are talking about broad market and not individual stock. And if we are to look at the STI chart see link, we are at one of the low points of STI. So collecting some stocks do makes sense to me.

While I can cut losses and go away. I will always be the loser. I do agreed the need to cut losses when fundamental has changed but going away at market low is one of Sin in investing. We could have re-balance to others prudently and ride the market. There will also be others who at this time has been holding on to loser, and has floated with the rising tide. This maybe the best time to re-balance your portfolio before the current reverse.

Since I blogged to collect slowly which indeed I did, in the sense I am much better off than average since is build onto the existing portfolio. However people who has timed their investment and show hand would have done much better than me this time but the point is THIS TIME. There are many others who timed wrongly and missed the boats or cleared their war chest halfway down that we have not hear much from them since. I am here for the long run and I will.



Cory
20160305

Cory Diary : Retrenchment

Having worked many years in large corporation, retrenchment is not a new thing. This usually happens with Business consolidation aka Organization changes. Often it comes down to just poor business environment and need for more profitability. When tough calls come, someone has to be let go and we can roughly guess who will be though not with some uncertainty. Nevertheless the uneasiness is always there.

Well to cut the story short, I got a cold call from my upper management just before Chinese New Year and quickly realised there has been a major re-organization. Fortunately to me, I have been selected to lead the combined teams. However, never has it been so close this time when it comes down to two pick one decision. I am the more expensive one but my competitor, you know, has never been there except when coming to Office Politics. Well, I get to keep my unbroken record (Touchwood) and get Rewarded with More Work and Same Pay !

Have you notice this comes at a time when the property market is down trending, stocks are in "Recessive mode" and Bonus is horrible. Seems like bad things ( Almost Everything ! ) comes at the same time. But then, why can't they ? Aren't they are inter-related ? Is there a natural law to prevent it ? I hope the weather and health don't join in the game of life but what can we do if it does. With all the negativity, there are always people out there who got their property force sold, stocks completely crashed and no bonus ! Relatively speaking, I am in much better position and should feel gratify as things can be much worst.

One thing I always like to remind myself is not to take things for granted. Keep improving our Value and Knowledge. Be Prepared for the rainy days. And last but not least, Cherish what we have.

thanks for the read Investment buddies !

Cory
20160302

Cory Diary : War chest

Even though Chinese Stock Market has been my primary concern in my earlier blog  ( link ) near end of last year. Never would I expect the Chinese Stocks to come down so fast and furious. Artificial brutal control do not work well in a capitalist market structure where there aren't good fundamental to support it. Is a good thing that they removed the newly introduced circuit control as this can allow the market to quickly stabilize to the right sustainable level. Question will be what is the Right Level ? If we look at the Shang Hai Index chart, there are few support level bands ~ 29xx, 26xx and 24xx. Considering China economy has not been growing well for more than a year, shooting to 5200 is really crazy. Now with correction on-going, back to 24xx level is not impossible. Whether authority will allow them to fall to that range is another matter. This is also complicated with local stock trading market conditions, de-valuation pace and market size.

In Singapore local context, is a double blows. In addition to China related issues, low oil price impacts are another serious concern. Huge industries and services are basically in a life damaging event. However all this issues may provide a life line to the local property sector. And I anticipate some of the curbs will be softened or removed. And despite poor Chinese export, import by America is not significantly reduced. In fact US GDP and Job Market are growing well. What this may mean is that other countries probably have eaten up China share of export. So I believe the world is still doing ok. Yuan will have to continue to devalue to make themselves cheaper. This process will stop the bleeding but will take years to reverse noticeably.

Therefore further drop in Singapore Market is likely sentiment and temporary. Soon we will realise we are over sold and STI will bounce back to a more reasonable stable level.

Below my War Chest Pie Chart ~ CPF, Pension, Property and Insurance info removed. Having tapped on 10% of my reserve, I am ready for more battles as it comes !

Cory
20160111

Cory Diary: Reading Frasers Centrepoint Trust Annual Report 2015

Just received the latest annual report this week. Taking some notes.

Titled "SUSTAINING LONG-TERM GROWTH". This tells me something or am I reading too much into it ?

Financial Highlights
Share price is below book value.  6.3% Yield. Less impacted by the poor retail environment.

AEI
Northpoint - 2nd largest mall in the portfolio will undergo AEI in phases over 18 months. There's hint on possible acquisition of new assets in their sponsor's portfolio. Nevertheless I look forward to the NPI number due to the AEI impact !

Occupancy and Expenses
84.2% occupancy in Bedok Point. Maybe they should sell it than holding the baby for the parent. Anyway is only 3.8% of the Reit. Changi Point will be something we need to understand in next few quarters. Overall expenses increased 14.9% which is above Gross Revenue and NPI growths.

Financing
Gearing 28.2% at 2.4% cost. If interest go up to 2.8%, cost may increase by $2.9M for $718M loan. Most of the debts (38.7%) is less than a year which means around $1.11M hit. NPI for Q4 alone is 31.7M. So impact looks minimal less market sentiment.

Thoughts
Northpoint NPI is $36M for FY2015. The integration and key spots upgrades will be nice and strategic. Let's put a $3M price tag to operation. Is the figure realistic ?

Headwinds are interests cost, lowering rental revision and reducing HEKTAR income. If another acquisition comes in 2016 this will further boost the distribution considering there is still some room to gear.


Cory
20160102

Cory Diary: 2015 Investment Performance

Every year I assess my performance and this year is no different. My wish is, this can be my sustainable alternate income that I can do alone as my own boss and hopefully supports my retirement meaningfully. I do not believe handing over my fund for investment purpose to friend, institution, insurance or unit trust. You have to learn to do it yourself be it passive or full time and no one will be more passionate than your own to make sure they are manage safely within your own parameters. I enjoy the experience and learning process.


There are 2 key metrics.

Year to Date Performance : Using Excel XIRR for total Stock Value on 31 Dec 2014 and 31 Dec 2015 (Closing Price). I like to use XIRR because it is simple to use and can also support assessing performance due to dividends, new entry and sales of my stock throughout the year at irregular time.

Whatever I earned in 2014 becomes part of my original capital in 2015. This mindset is important so that I won't lose them back to the market easily as the worst enemy is usually ourselves due to recklessness and overconfidence.

Life Investing Performance : XIRR again but across all trades and dividends throughout my investing lifetime. Is same as annualized performance multi-years. It becomes harder to understand as weight-age comes into play recent years as my Portfolio size grows much larger due to capital injections which skew the result towards recent years performances.

Both metrics do not include idle cash in the banks as I do not fully invest my capital. My intention is to measure my investing skill in counters traded in SG Equity which includes Bond and Preference Share. Therefore exclude Fixed Deposits, Pension, CPF, Insurance, US Stocks and Property.


Results

2015 XIRR : - 5.17% including dividends. If we use last day closing price of each year, STI is down -14.34% excluding dividends. Dividends for 2015 collected is $31,169.

Divested M1, Saizen Reit, Challenger, Marco Polo Marine, CMT Reit, Semb Corp Industrial, Lum Chang and Boustead. I did well in getting out from Semb Corp industrial and Marco Polo in the early part of the year. Unfortunately I was a little early on  Saizen Reit as I would have registered some gains due to the takeover. Bad luck I guess. I am a little late on M1 and have to cut loss on it. Missing out on transportation sector is a mistake too. And relative to my portfolio size, my dividends can be better.

What I am please about this year is my return to Bank stock and more Reits. Avoided shipping and commodity stocks. Expanded my Bond size which will provide added stability though will lower my potential returns. Will emerge with 17 main counters in 2016 which I feel is about right and near my bandwidth limits of 20.

Multi-Year XIRR : +6.51% (across 12 years. Total Dividends collected $147,829 ). Annualized return has come down due to the largest portfolio size accumulated into year 2015 and due to lower 2014 returns. 2015 portfolio is roughly 7.5 times larger than 2008 Global Financial Crisis period. I also found out despite the outsize portfolio of 2015, the absolute loss is lesser than 2008.


2016 Strategy

More Capital Injection, Add Transportation Stocks, More Financial Stocks. More dividends focus.
Will need to re-look as it goes. The key is staying nimble.

Cory
20151231

Cory Diary : Impact of Increasing Rates on Home Loan

As all property owners, with increasing rates and weakening economy, there is some worry we may have difficulty paying our loans. We need to have a feel to assess how much an impact it can be in the future. So here's what I did using an on-line loan calculator for my calculation.

For a respectable condo size and location, S$1.125 M dollar price tag rounded up to $900 K loan amount at 80% loan to value. Applying DBS FHR18 +1.8% ( 3rd Year ), FHR18 is around 0.6% currently per DBS website. 

Loan Rate 2.4%

This works out to $5,958 monthly repayment for a 15 years loan. That's provided monthly income hits $10,723 to get a loan and assuming you do not have any other debts like credit card or car loans. Any of this debts will hit right into the calculation of your monthly income value. So beware.

Let's ease a little and pull the loan longer to 30 years. Monthly Income requirements down to $6,735 for a monthly repayment of $3,509.

Loan Rate 2.6%

Monthly Repayment: $6,043 (15 year loan), Income Required: $10,723 ( No change )

Monthly Repayment: $3,603 (30 year loan), Income Required: $6,735 ( No change )

Loan Rate 3.0%

Monthly Repayment: $6,215 (15 year loan), Income Required: $10,723 ( No change )

Monthly Repayment: $3,794 (30 year loan), Income Required: $6,735 ( No change )

Conclusion

The delta is a few hundreds buck more monthly. While is still a hit in the pocket it doesn't look as bad as I thought it would be. One of the main reason is the repayment has two components. Interest and Principal.

For a 15 year loan of the last example, when Interest go up to 3% , Interest cost is $1,215 but the Principal amount is still $5,000 which remains unchanged. Interest/Principal Ratio is 24.3%.

For a 30 year loan, Interest/Principal Ratio is 51.8% due mainly to lower principal repayment amount of $2,500. For people who overstretch themselves to buy a property using longer repayment period, few hundreds dollar increases can be a pain as they have lesser disposable income.

Cory

20151229

Cory Diary : Portfolio updates 20151226

Seems nothing is safe out there. And things hanging over likely be China Stock Over Valuation and Singapore Growths. The 3 local big banks have seen dramatic price reduction in the range of -20 to -25% despite good overall earning. That's a crash isn't it ? Even the Telco is not spared ranging -20% to -30%. M1 more on the 4th Telecom impact.

Idle Ships

If we are thinking this is all about stock price or employment rate then we need to look and get a feel on the ground. Tell these to those vested in Property, Oil and Gas, Commodity, S-Chip, Shipping counters and things are much much worst than STI indicated -15%.

And then on the job front, there are folks that are't looking for jobs or just retrenched. A gathering recently of old university mates happen to have 3 couples with their mates or themselves out of jobs. And their the other half's either in not so well paid job or stressed for job change. Don't believe ? Talk to those highly qualified taxi driver and you will understand the loss of knowledge and experience to the industry. Are their jobs gone for good ?

Matter of time, i think the Gov will have to start loosening the foreign migrants intake to lessen the manufacturing blow. Non-Essential Property curbs on the developers. What else ? Likely weaker S$. They probably just need one more bad news to stir the ground before they have to act without damaging the votes.

This month i add some positions into Banks and new cash into Bonds. Sold M1. Sounds more like re-balancing before the year ended as things may have to get worst before it gets better. I Wish not.

Merry Christmas

Cory

20151226

Cory Diary : Portfolio update 20151012

If someone has said in the beginning of the year that China will be the main reason that STI enters correction territory it will be quite hard to accept. Such is the market dynamic. Hard to anticipate even for expert.

Is the correction over with recent days run up ? Well just looking at the 1 yr and 2 yr charts, seems so. However 5 yr and 10 yr charts are yet confirm. That's my own view. Time will tell !

My portfolio ytd went down -5% at the worst period and recovered to -2.6%. STI still at -10% today.
Relative wise i am doing ok but i could have done much better if i have cut loss faster as said in my earlier article.

For those data craze, Equity at 37%. Cash/FD 39%, Structured Investment/Bond 11% and others.
China could have cause another major crisis. It didn't so far. Else i could have tap my war fund.

Decided to sell Saizen Reit as i feel the Japanese yen will continue it's weakening mid term and this gives me some anxiety despite all those hedging in place. Hope to find a replacement soon. Still holding to some Starhub shares though no increase. I feel the impact of 4th Telco will be mitigated by immigration long term.

I sleep well with current portfolio set up and that's all matter. cheers.


Cory 20151012

Cory Diary : Traps to Avoid

Portfolio Management


Land Mine  ( 地雷 )

As the name feared, the misfortune of stepping on one is terrible. Will likely to have a limp blown off. A dent that is not easy to recover from. In stock context probably -50% to complete loss in a counter and depending on it's size in the portfolio it can be quite damaging to my overall returns.

The fewer stocks I have in my portfolio, the higher my concentration. Too many stocks and i will exceed my bandwidth to monitor them.


Growth Stocks  ( 成长股 )

High PE typically. To maintain this story the growth needs to be there to sustain. Below expectation news or even loss may have double blows to the stock price. When I foresee possible slower growth in the future is it time to take something off the table.

This can also be terminated early due to pump and dump situation enacted by syndicate. A syndicate can comprise of business news editor, analyst, broker, banker, insider, forum/blog manipulator and speculators. They will use means to push up stock with convincing storyline after securing sizeable position.


Doubling Down  ( 双倍下注 )

Can also include averaging down or similar methods. Some people has the concoction that stock price fluctuates within a fixed band. That stock works like newton theory. While so far it works for DJIA / STI Indexes over medium-long period and higher, company stock can go to zero value or stay low for life.

If the mindset is like gambling, this can be dangerous. Stock market is a place where price can be manipulated or influenced. The future of the company lies with the touch of people that manages it. Therefore bias. Thus, the outcome can be worst than going to casino to gamble.

Few of the traits i seen on successful turnaround is change of management (competent), was hit by black swan event, due to bad market sentiment, have management integrity and having strong moat.


Dividends  ( 分红 )

Ability to generate cash flow to reward shareholder is a good indication on the health of the company to most layman. Be careful if company issues rights, borrow more or cash calls that exceed returns. At the same time keep watch on potential capital loss if any that may negates many years of dividend.


Market Trend  ( 市场走势 )

Going against market trend can be mind blowing to my portfolio negatively. When a particular industry is in possible down trend for a long period, will it better to re-balance my portfolio ? Some people can spot the gem against the tide. Good for them. That's my bonus.

I can do the maths on it. Some stock gives good cash flow and i maybe ok to hold if is medium term. However if the business change is more fundamental maybe I need to change.


Cory 20150829

Cory Diary : Market Fear

I have been working on my SUM on getting a good yield for past months but couldn't get a good discount on equity that i am comfortable with. Every time i look back to 2008 financial crisis price and i will shook my head. If i have done so and so, i would have been shaking leg like AK do. Well not exactly like him. But you know what i mean ?

Fast forward today, chance upon it, thanks to Shang Hai Stock bubbles and slow demand, the world in chaos. FEAR set in. What-if the market falls further ? A dead cat bounce ? Past data may not correlate to today ?

No Action is an Action too ! 

A check on the STI chart there is a huge gallop dive. I decided to take additional position in STI index. A spread out stake in Banks, Telco and the Blues. A calculated risk but likely help me support at least average 7% returns as the upside is very good for mid to long term even if it falls further.

Cory 20150825

Cory Diary : Portfolio Interim Result

The Eruption and Burst of Shang Hai Index reflects logically that poor earning of the economy will not be able to sustain the bull in the long run. While Singapore market avoided the crash so far, the sell down has been quite significant in recent weeks on specific counters.

Telcos have moved down a notch, O&G industry has been disastrous, Shippings have been lowering for a long time and Commodities have already fallen one after another. If we use STI 3370 (2nd Jan'15), YTD STI is almost 5% lower at friday close STI 3202.5. On average most investors are probably around -3% territory after dividends.

My Equity Portfolio performance has been mute. XIRR YTD +1.24%. Though still in positive territory thanks to Dividends (updated for privacy) . Even then i am not sure this will hold on in the next few weeks if we do not see positive news coming in.

Investment Segment wise as follow.

REIT has been holding up well so far which occupies a quarter of my stocks portfolio. I have little exposure to property counter which may change after election.

TELCO holds another quarter. So far net net they have been ok ytd after dividends.

BOND/PREFERENCE SHARES combined occupies another quarter of my portfolio. They are always the ones who provided the damping stability when the market is volatile. I do not believe in TRUSTs.

The remaining quarter invested in some niche services, retail industries and STI ETF. While i have scaled down significantly my O&G related counters in recent weeks, not all are done fast enough. This reminds me that i need to cut loss more swiftly due to Macro Factors coming in.


Cory 20150802

Cory Diary : Expenses needed for Retirement

First of all, calculation is futile if we do not consider Inflation and Reasonable Lifestyle. This is not saying Medical is not important but major expenses are covered by Insurance and/or CPF Medisave/shields. Getting the right coverage on hospitalization cost is important in my opinion. But trying to jack up your retirement amount to anticipate payment for serious illness that cost say $300 K direct from pocket is not meant to be as typical retirement plan that is realistic to be prepared for many.

For the start i will not retire till i meet my minimum requirement lifestyle. After working so hard for years and to retire like a "beggar" is not an aspiring thing to do. However i am willing to trade off some big ticket items to derive the core expenses.

Transportation
Doing away with private car, i should save a big chunk. Taxi is a reasonable alternative and do save a lot of hassle. For couple/family it may be more efficient to have a car. Do note the table is for a person but that doesn't mean we should go integral multiple by family size.

Holiday
Mainly regional. $2000 annual is high side. Reason being i like to take into consideration for more expensive occasional continental tour after accumulating unused expense allocation over the years. I thought this is needed lifestyle i wish to maintain.

Medical
This portion is more for normal sickness. Critical illness or hospitalization should have more dependency on insurance and CPF medical coverages. In-addition saving up some Emergency Fund i feel should be allocated but separate from the table.

Loan
For typical family i think likely to be our home or investment property. For Singaporean, most people should be able to pay off their HDB loan by mid 40s if they want to. They are quality housing at affordable prices.
For those with Condo or investment property, the outstanding loan maybe heavy but rental returns should cover. So for most this is well covered. There maybe those in negative territory but this is more like investment losses as to stock markets.

Children
Once they finish their studies, child should be on the own. It doesn't make sense to me that we have to care for them or their families in retirement table. Is your job to make sure they can as Parent. If they can't today, what's make you think they can after you are gone ? Often many parents are proud of their children. What use if they are scholar or doing well if they need you to support them ? Those parent who are truly proud is when their children is taking care of them and subsiding their retirement !

Retirement Sum
This works out to about $3200 monthly ( $38,400 annual ). Do adjust for inflation annually as the amount is today money. Assuming CPF life gives minimal $1 K. We only need about $2200. A $700 K Portfolio with just 4% returns would have cover it easily. And we Only needs $450K for 6% annual returns ! And you are doing all this with your main capital still intact on the day you die. So theoretically, there is even more room for us to play with after topping up for inflation.

Enjoyable Retirement is not hard if we are willing to let nature takes it course. Well, at least for Singaporeans.

Cory
1st June 2015

Cory Diary : Measure of Success in Life

There's an online discussion recently on the measure of success in life.

Someone say able to spend like $2M annually ...

Another conclude from Warren Buffet still lives in his old home while Bill Gate in Huge mansion.
Gate succeed ...and Warren a failure

One says  "live simple life better; got money spend; no money save up to get what u want...then tats your achievement fulfilled"

Most people probably want to measure by marriage and children. Maybe with a car and home thrown in.

When I was young, i do quite badly. Normal Streamed and still last 10 in class my earlier years.
Local University is my goal. Somehow I did it. Get a good job next which i did. When i was younger, able to achieve financial freedom is. Sadly is not. My goal changed when i am there. Frankly living on other dreams, one after another. So what's next ? Here's what i am coming at.

Seek our inner self. Do some soul searching. Life is short.

Measure of Success = Living the life you want to live

And go away peacefully. :)


Cory
26th May'15

Cory Diary : Save Your Saved

Trying to control my excitement this afternoon in staff meeting. Just as soon i have gone through the weekly agenda, i pulled up the Compound Interest Formula to the projected screen. A 10 minute effort before the meeting started while i was waiting for everyone to arrive.

"I like to show something to all of you today. Here's the formula of compound interests for $1000.

Year 1, 3%, $1030 ...
Year 5, 3%, $1159 ...
Year 24, 3%, $2033

Your money just grow and doubled just with 3% annual compounded after 24 years. Now think it this way, if you do nothing with your money and let the inflation monster eats them 3% annually. Yes you still have $1000 absolute on paper but you are actually left with only $481 in real material term that you can use.

Compound Effects are double edge sword. Doing nothing is quite a damaging no action move. What can make this worst ? A saver who holds $1,000,000 for 24 years. The effect is multiplied 1000 times up / down according to her action. ( In-between if saved overtime ). If  you are a super passive saver, you are just working your ass off to fight inflation in your twilight years to Save your Saved. You aren't Saving.

Step back from your work and think for a moment. "

Two of them walk off before the session ended for another meeting. One excited. Two others not sure...
Maybe i should try again ...

Cory
21st May 15

Cory Diary: Property

Visited a show room recently so thought i pen something to share from my learning. Elsewhere maybe different as i am no property expert. Read this as my personal thought talking to myself and not advise.

Room Size

The show room units are truly well designed. Is a promise of future living. However rooms are really small if you are "HDB type". And if you plan to wait longer so that it can grow bigger in future, we may need to accept it that is not going to happen even if price gets significantly lower.

Decoration

Kitchen, Flooring, Air Con, Toilet, Doors are all done up. The lights are excluded. Conceit piping/wirings.

Fridge and Washing/Dryer machine provided. There is a glass section through the kitchen.

If i am to value it, maybe 100k effort max.

Facilities

Is quite huge. In fact, 2/3 of the land mass. The "public area" looks beautiful. So only 1/3 is unit space. So unlike HDB, the common area in private condo is really private. So you have to pay for it which will works into the unit price.

Unit Price

Unless you go for investment, 2 Bed Room (BR) is rather small for a family. For the 3BR, easily hit S$1.1 M price tag for well located unit and good project location like this one i have visited. That's kind of high i thought but not after i do the maths.

From the forum information, the land was bided $1077 psf ppr. The unit on average were sold $1300 which doesn't add up as per analyst this will put the developer selling the unit sightly below cost. Well businessman do this for reason i think.

Strategy

1. Integrated Strategy/Strategic reasons - Meaning they can earn from malls and to protect their market share and margins.

TDSR and 80% 1st Home loan

2. Is the demand affordability due to TDSR and 80% max loan limits. The person who thought of this is ingenious.

Here's why. If we target household who are employed, Median household income S$8300. Max loan allowed is about 5K monthly payment using rough estimation.This mean S$1.1M unit is already brink due to 80% loan max with 220K ( CPF+Cash ) for this example. All the figures can varies but the point is the concept that restrain the bull.

Thus the developer will have problem moving units if priced higher psf. Buyers are constrained by the 80% ratio, TDSR, CPF and available cash. In addition we have the ABSD that cap on PR and Foreign investors. For people look on 2nd property ... the hurdle is even higher ...

The unit area has to shrink some. This trend will be hard to change. Probably integrated development is the way to go for the future.

Cory

1st May 2015

Cory Diary: World of Warcraft (WOW) Online Economy

Every time when there's a major patch in the WOW game, there will be new contents, game play change, new crafting materials and more character levels. In addition, the currency in the game using Gold coins will suffer through significant Inflation Spikes.

After several rounds of patches (analogy to Economic Cycles), ones will learn the pain of inflation and the obsolescence of old materials used in crafting or consumption. Few facts in the game. There's aren't property and coins are virtual (not backed). The best way to beat inflation is to work to provide service by helping to beat Instance BOSS for players of new characters for weapons / equipments or improve our levels, develop new skills and produce new materials to trade. The enterprising ones will organise the service and do hard trades. Other than that is to convert most pre-patch materials to coins either through sales in auction before they become worthless. Cash is King !

In real life as time or technology progress, it will be home material decays/spoils/obsolete. Crude Oils and most Commodities don't go away other than Price Fluctuation but is not easy for most. Property do get old or lease shorten much but that's across a long period for you to manage it and subject to economic conditions and cash level. Entrepreneurs are few. For most, other than some fixed low returns and saving, our cash is subject to harsh inflation.

Well there are also alternative which is to continue to Work like in the game. But this may mean retirement at later age even if we are doing well and saved some money. 20-30 years down the road after your final pay check (several patches of the game), you will realised your purchasing power eroded significantly . Just ask yourself how much you pay for your bus ticket or a bowl of noodles 20 to 30 years ago. And soon you will be like your elders and complain things are expensive just like when i was in the game after every patch. I refused to buy this and that. And miss out some fun. Or go through the hard way to get them which may be a a lot more expensive process to do. We need to be at the forefront to actively tackle the issue before it becomes a problem especially so for those who like to retire early.

We know from the game, holding on to old things won't work well. Inflation is slippery slope.We need to keep learning and have the willingness to take on new things that suits us to stay ahead of the game.

My solution is to try to make Money from Money in real life which the game couldn't. To Save, Preserve and Grow our Capital. And for this, I have to Invest Prudently. I am not saying this is easy and risk is real but there simply not much alternatives for the old me. My Strength is Wisdom and Capital, so make use of them wisely.


Cory
26th April 2015

Cor Diary : Gold Metal

Recently i have been trying to simplify my investment yet achieve the stability and diversification needed.

Everything is up for review. Few things I did so far.

- Increased holding in STI ETF and Bond.

- Sold DBS Preference Shares.

- Sold significant portion of my USD and NTD

- Build up some cash by taking profit on a number of run up stocks

I could not find a suitable equity to re-balance into currently. Probably need to find an entry point some time later this year.

Another area i am looking at is metal. Gold has been in my portfolio for a couple of years already and since i last sold around 1700 ( half of them i guess ), it has only been routine value update on my overall net worth which constitutes roughly 1%+. Is there more for hedging when the World or Singapore go seriously wrong.

Inflation wise, i think property is already good at mitigation. I can't imagine myself taking sampan with gold to escape either. As my Gold is virtual, the transaction cost impact is low. Decided to sell all my Virtual Golds. They were held in USD and NTD. And i expect to have some forex gains too. Great ! Achieve another level of simplification.

What else ? hmmm

Cory

20th April 2015

Cory Diary : Falling Knives

In stock investment my thought is always about Capital Preservation. Thus, if we take care of the down side, we win mid to long term consistently. What does this actually means ?

1. Avoid landmines by not going into their field no matter how attractive it is
    S-Chips, Commodity stocks

2. Management Integrity
    Any listed companies screw me once (that works against minority shareholder), i will ban them for life

3. Industry Issue
    A good example i think is shipbuilding/owner.A rather competitive industry which will stay that way.

4. Look for Reasonable Dividends with robust Growth potential together with sufficient profit margins
    Basically has certain level of moat, skill set, positive practice or stability in grind into the company


Cory
17th April 2015