Cory Diary : HRnetGroup 2019-0622

HRnetGroup

Today price is $0.675. Is a gap down together with quite a number of counters last Friday. Probably the market get winds of Trump eventual strikes on Iran. Fortunately, it didn't. Personally, I feel it could ignite a war as Iran is not like Libya or Syria who are just the receiving ends.

I have been monitoring this counter for some time after I sold my positions. Reason as following Link. However, a number of local investors swore to it. 

Initiated (update: informed) a small position in 2017-1214. Sold informed 2019-0226. Transactions as below table.

Did a collection for the 3 years record. Applied XIRR. Results as above.

Kopi money. So far I make the right decision for myself and also reducing a counter to manage for my limited bandwidth.


Cory

2019-0622

Cory Diary : STI Rebounded 2019 June

STI has been quite volatile. This week it starts rebounding. If one has invested near end of last year, today one would still has nice returns of about 300 points ahead.

As we can see from long term resistance support, averaged down more on STI earlier and is now benefiting from the rebound. Recent low is a test of one resolve. The turmoil of the market doing their sum on our thinking. However, being portfolio buffered, this bring calmness for us to try.

Everyone waiting for FED now. Trump complained last time and likely more this time as he needs more ammunition to fight trade battle with China and EU especially we could see currency war entering the game. Will FED supports ?

Expecting the rate to hold. Chance is 60%. Cut 30%  However, if Powell tries to be funny and raise the interest rates instead, the market could well #$^$%&%^$*%4&*)&. Maybe he will try other options instead. However, should policy be reactive based on data coming in or anticipation in today world. Maybe we need to change with time.

Cory

2019-0619

Cory Diary : Asset allocation 2019 Jun

In my plan for retirement, if it happens, there could be draw-down in my net worth. Next question will be how fast. So I decided to do a rough update estimate based on what I have today.

Roughly, I could see return generation of 113 K annually. This could be generous on the property. Never mind. Just ignore me on that one. However, to meet short-medium term needs, FCF is more important. Which left me with 51.5K annually after removing Insurance, Property and Pension. And this is assuming I have surrendered my Insurance policy. I still have loan to pay up, which implied even with my net worth today, I could not afford to retire for the lifestyle I want to maintain after, without draw-down.

First thing to do is to tackle my most unproductive asset which is Saving. With Gov securities that can double up as Emergency and Housing loan support, there is no need to have such a high saving % allocation which has been my constant issue with saving rate from salary and bonus. This needs to cut down by a third of which I would have my SSB max. and then remainder to war chest.   This saving category includes cash management account which is giving reasonable interests. 

Secondly, my backup plan is to sell my property after 7 years and would switch to further OCR region to increase the psf when I retired for at least same amount. This is not impractical from current caveats logged. However, my wish is to have another property instead and this will required environment to be conducive enough such as removal of ABSD, and my saving rate and investment are reasonable to generate growing dividends.

In a not so good scenario, where I decided to retire immediate,  and my investment returns turn sour. I would estimate 5% draw down after paying up all my loans from the start, will last me for at least 17 years. After which, I am left with Pension and Property. Then the option is to down-grade .... to finance more reasonable lifestyle and my daughter education. At 67 then, maybe is still ok. Still cannot tahan, then I will ask my wife to chip in (my last buffer of buffer which is to clean tables lol ... ) . ha.


Someone said : What about legacy ?

Uncle Cory : Simi lah. Down grade liao still want legacy. You only have one life to live.
...  Legacy is for the rich. Don't act rich if you are not.




Cheers

Cory
2019-0616

Cory Diary : Value-Add in Trade War

“If he shows up, good, if he doesn’t – in the meantime, we’re taking in billions of dollars a month [in tariffs] from China,” Trump tells “Fox & Friends.”

Sounds familiar ? Yup is from President Trump. Interestingly to say it so openly could imply many things ...

1. He is threatening President Xi
2. He purposely want to make sure President Xi lose face
3. He is trying to make sure President Xi won't attend G20
4. He is trying to stall the talk purposely
5. He is not thinking at all
6. He is not interested for trade talk at all. Is all a ruse
7. He is stupid

Let's sit back and think when the 25% tariffs kick-in. First is final export to America cannot be China as the tariffs are too high unless we are prepared to pass the cost to consumer which are specifically American Consumers. This won't happen due to competition for market shares therefore even Chinese companies will have to change their supply chain model.

Secondly, to classify as not China produce there have to be sufficient value-add through the supply chain. Value-Add could be the next level that Trump administration will focus on if Trade War gets deeper. For now, if one need to avoid tariffs is to have the key assembly done in another country say Mexico but there must be enough value-add to the product. Adding packaging or labeling which are cosmetic and naming won't be enough and US will still consider it as Made in China.

What will happen is manufacturers will likely do the minimum to meet the cut-off. This will mean China will still produce the basic raw lower level assemblies. Some jobs will be loss. There will be a slight delta in product cost due to additional touches in Mexico. Consumers probably won't feel much impact.

If this model continues long enough, soon manufacturers will find cheaper eco-system outside china. This could be expedited and permanent if they decided to adjust the value-add criteria higher such that it may not make sense to even do basic assemblies in China. When this happen, product cost will soon come down to norm or even cheaper. This could take a few years to happen though.

The final stage will be when the new eco-system is so establish, Mexico can be a manufacturer not only for America market but also the other parts of the world. At this time, China will start their own protectionist measures requiring their own local value-add to sell in China.

Replace Mexico with few other like countries. Countries that benefits from this trade war will be Vietnam, Taiwan, Mexico, Thailand, Cambodia, South Korea, Japan, Singapore etc. Maybe even India if they open up their market fast enough. Remote choice could be North Korea if they have settled their difference with America.

From what I see, trade war is just a pre-text for bigger things to come. Is about ensuring US stay much ahead. So from this read, who will pays for the tariffs ? Where should we focus our investments ? How the world will be after ? Food for thoughts.

Cory
2019-0614

Cory Diary : Market Euphoria on Reits ?

Market today continues to plough into Reits euphoria. This pushes Portfolio to new high. The story seems to continue. However 2 things need to be cautious. G20 and Fed. Hopefully none will break this rising rhythm as I previously mentioned the gap between risk free rates such as SSB and stable returns of strong Reits. This is still hold true so far.

With money sitting in cash management account coupled with saving banks, opting to max out SSB is a growing option. But this could slow down my portfolio growth for years to come due to compounding effect. This logic holds true for people who sell most and took profits. Once we do that, coming back is aren't easy.

Investment is a long game. Portfolio growth is a priority. Unless we see cliff right in front of us, derailing may not be wise so one would prefer to stay invested. Right now earning is still coming in, continue monitoring. Wish me luck.


Cory

2019-0613

Cory Diary : Bubble Report 2019-0611

Straits Time Index has come down by 5.5% since my last bubble chart report on 5/2. That's -186 points. So investing in ETF is not that straight forward. Timing helps as previously mentioned. 

With the recent correction, I have increased my stake in STI ETF. With corresponding profit taking in some of my REIT counters, ETF is now the largest counter. This can be easily observed from the bubble size.

Let's do a review of the Bubble Chart.

First the bad news.

1. Unlike past bubble chart, there aren't need t do Axis adjustment to fit higher earning. ( Due to risk adjusted )

2. Banks are still in doldrums .... .  ( Trying to bottom fish )

3. STI ETF has come down due to large swing on the straits time index within a month. ( Average down )

Here's the good news

1. Reits / Trust profits have generally been moving upwards eclipsing STI ETF downward moves. Looks like it has stabilised.

2. Portfolio is generally performing which can be seen for the relatively lower profitability of bonds in the chart.


My Plan as mentioned earlier is to preserve the leading gap of my portfolio. Is working so far. Will continue to monitor. What's next. Something I need to figure out.

Here's the link for those who are interested in the progress of the Bubble chart for this year so far.

Cory
2019-0611

Cory Diary : New Heights with Low Risk Portfolio Balance

This is one of the interesting year where we have obvious divergence in the performance of a portfolio high in Reits (~50%) vs STI returns which has fallen to-date to 3.18%. With the much less possibility of Rates increase, the sentiment of Reits have been quite exciting this past week.


Clearly staying invested and believing in the positiveness of Reit so far, dividend investors have benefited a lot from the upwards move if we walk the talk. Nevertheless, we need to stay nimble and monitor the market. Trump has stated Mexico Tariffs is off. That's a relief.

As previous mentioned, I moved some funds to ensure portfolio higher returns gap "Be maintained" relative to STI Index such as with DBS and STI Index. So far they have stay relatively stagnant. I also raised fund when I close my FCT position. Again this is more opportunity base due to the spike and my speculative blood in me to try for capital gains. Don't do this unless you have 7 other Reits and Trusts like me. Grrrrrr....


Xirr hits higher to 11.6% partially helped by realised gains in FCT. The Actual profit is roughly 10.8% which gives me more (updated for privacy)  profit this year. Overall the Portfolio is balanced in such a way that I can sleep better at night. With some spare cash, I am again looking for opportunity. I may decide to max my Singapore Saving Bond. We shall see.

Cheers

Cory
2019-0608