Cory Diary : Equity Allocation - Radar Chart

Has been quite some time since last report in equity allocation. With the clean up done and funds raised, we have less than 2 months to have the portfolio finalize for next year. One minor change is the addition of the slider lines in the chart which may help with the visualization of % allocation that I used to do without needs of it myself.

It has been quite a fun ride this year and how the rebound immediately after the reits sell down in the last couple of days. Again this attest to the need to be constantly vested in the game which 70% suits me so far for dividend returns. And if the market is to swing down, I have sizeable cash for opportunity. Nevertheless the cost of holding cash is there which therefore I have been diverting some to CPF housing refund while we wait for monthly salary to re-fill it back. 

At one time I cast the net wider and scoped more than 10 reits which then funneled it down to 8. I also did quite a number of re-balance while at the same time diverting more shares to DBST for lower cost structure and Rights management ease.

The major change is the clearing up of STI ETF and investing directly to fund. This will helps improve the yield of the portfolio further while the Bonds of roughly 20% allocation remains unchanged.

Cory

2020-1107

Cory Diary : Wash my Cards ( 大洗牌 ) - US Election Fever

This week has been nothing but tumultuous. The past few days market drop send worrying reminder on what happened in this year March. People who time it well that time or yield play has a record recovery while those who left and never seen again have only regrets. This time round is likely due to re-resurgence of Covid 2nd Wave in EU and US Stimulus Talk held up prior to US Election.

The Market has been in the mode where sell down happens very quickly while the climb back up is over a long period of time. Therefore it seems that is usually good that we have opportunity funds or so called War Chest when such event happens. Alternatively, what I do is to reduce my holdings on non-core stakes this week regardless of profit/losses so that I could re-deploy them later. Cash is King as said. I would think about 30% of Non-Fixed portfolio probably.

This time round, Reits are slightly harder hit as you can see from the chart on the dive for reason I think is due to past weeks relatively directionless market. Many of this business are earning good money just lesser due to Covid rebates or lockdown. So in that perspectives, correction could happen but that should be relatively mute compared to businesses that are in long term downtrend. So technically speaking, we should buy more as it goes lower. Just watch the bullets and pace to do it.

Considering we have been working from home for months, robin hood and robo-investing are aplenty dabbling in the stock markets. Property curbs not helping. In all historical crashes my feel is that the market has new players who are not adverse to risk finally meet their fear inflection point who are not in tune of what recession actually means. With a bigger influx this time round driving up DJIA and Bitcoins as we can see in US Markets. With Covid Salary support package reducing, we could see more retrenchment locally. And this could mean a longer trend of poor job prospects.

In YTD performance, the portfolio recovered very well to parity in Mid-Oct but the last few days of volatility basically pulls it back down very quickly to -4.2%. This starts with almost 1K drops in DJIA. ( Pelosi not helping ). Even though the portfolio outperform STI ETF by more than 20%. (STI YTD is -24.7% YTD), there is no celebration budget out from it. The bleeding is fast and furious even though is more a cashflow in nature till we start getting out of market. This is despite the portfolio has about 21% bond allocation. ( Excluding SSB ).

The stop gap measure is  to do a major shake up of the portfolio eliminating non-core stakes such as Koufu, Ascendas-i Trust, and even MNACT which I was just building up... %@^%$(*. The final nail is the just released last Quarter result doesn't look pleasing as seems like the impact is worst than expected. So after deducting all the costs, is kopi money ytd for it.

Another major change in the portfolio is to clear-off STI ETF in my nominee account as banks stake in the portfolio are sizeable enough today. This will help improve the yield further when I re-invest the money.  One other shake-up is to reduce Aims Apac Reit by half (2nd Tier). In YTD perspective, is cut loss but risk lowered significantly for the portfolio. Feel comfortable about it since the DPU is no longer in significant advantage over say some of the core and larger reits can provide.

The goal is to protect capital, maximise dividend, risk adjusted.

Bazooka Ready.

Cory

2020-1031

Cory Diary : Widening Wealth Gap - What can we do about it ?

The World we are in today is changing fast during Covid times to those who managed to get onboard and those who are left behind. By logics the result is more due to demand/supply economics at play rather than purposeful conspiracy cronyism broadly.

In the past I have wondered why would one want to study till degree just to work in service industry on specific segment where higher education seems not so practical unless we go up management level or specific role in communications where is not aplenty and may need.

Say for 2 different positions. One in Restaurant Service and the other in MNCs. Salary gap is like a gulf as in $2K to $6K respectively as an example. Imagine one has to work like 3 months to get equivalent salary to one in MNCs or Civil sector. Is it no wonder most of this work has to go to foreigner as the specific skill sets can be picked up by average person without needs of higher education abroad. The situation is even worst when we try to compute the saving rates between them as it is aren't directly proportional. Which implied if you are in low band salary, hardly any saving so don't even think of investing.

One would argue to push up the salary of this bottom which is kind of no brainer on surface but the cascading nature will pull everyone up too resulting null effect by inflation and make things worst destroying the little savings we have. And if it does  go through artificial means,  we will have brain drain ... . And the social on the whole will be downgraded in value with escalating cost. This hidden cost is real.

 

Covid basically accelerates the situation to be more pronounce. If we look at many other service sector like Insurance, Cab, Food delivery and even property agents. There will be a day many deals can be done online or autonomous vehicles. Where people can arrange house visits online in 3D view themselves without need to go through agents. The goods days could be gone. So don't be too hang up on why some of this jobs get paid relatively well for now or near future.

The World is moving towards Lao Ban, Entrepreneurs, Management or in practical term for many to be a shareholder if we want to do better. There will still be good jobs around just that it get smaller by the day as automation and efficiency kicks in. And the demand for specific skillset in-depth goes up. As in is a good thing to human kind as more people becomes more developed to do higher value added things and that's provided we educate and equip ourselves with the necessary skillset to learn continuously. 

Sadly most people is not cutout to be Lao Ban,  Entrepreneurs or Management. Shareholder is the easy path but risk is not less in stock market as there is a lot of room to go wrong. Sometimes I feel Time is running out for many in our generations and later, to catch on the bandwagon else you or your offspring's will be condemned for eternity spiral at the peasant levels. This sounds like a very negative notes. However is exactly such fear that keeps us on edge. Survival the fittest ? Situation is bleak for those who do have fallback plan and lives like YOLO and so to speak to their generation coming will ends badly in probability. The world is constantly moving ahead while they are left behind.

So is there really no hope for General Services, Hospitality and Airlines ? Maybe we need to make very bold decision to overcome. Example Northern Hemisphere winter is coming and Europe has entered huge second wave.  Singapore strength is our Hot Weather. Can we promote Covid-Escapee Travel with 6 months Visa with special rights ?

This could be a huge draw to foreigners. How can we manage the risk to general population. Charge one time entry special fee ? One thing is our Hotel and Malls could be filled to the brink if is successful. We may requires special travel only by SIA with proper partitioning and cleaning for each one-way trip. There will also be staycations initially. We may even allow this group to rent our condo and hdb to make it more feasible. Do we need to consider medical support that is slightly more expensive than residence with no subsidy but at more affordable rates. Many questions but time is running out.

Feeling Bold.

Cory

2020-1026