Oct 21, 2018

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

Oct 14, 2018

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

Oct 3, 2018

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