Cory Diary : Has China Won?

This is more a political view so if we could take something out on investment ideas it will be good but the intent of my concern is more grave.

Here's an interesting Video. On surface is logical and sensible. However I also notice the author is a local Indian who sides with the CCP which I find it quite amazing that he has crossed ethnic line which we all may know India and China have been on border conflicts for a long time. Very few can and he has my full respect because is not easy. If we have looked at rivalry Democrats and Republicans of America tops people, you would appreciate crossing ideological lines are not only rare but also difficult. Below link to the interview on the book "Has China Won?"

https://www.youtube.com/watch?v=li6xcTsVPB4

The concept that China has strong meritocracy system which I find it ridiculous considering Xi changed the rule and appointed himself to the post forever which is kind of ironic.

China has best 30 years because American, Japan, Taiwan, Korea and EU companies come in to invest in China to open factories. And they are still heavily reliant today. As we speak today, there are comment that more than 600 Millions Chinese are below poverty lines. We can help them by making sure China do not spend more on unnecessary ventures. I don't have actual data to reference on but the below link can gives us a good idea.

https://www.scmp.com/news/china/society/article/2183771/chinese-disbelief-us295-monthly-salary-makes-them-middle-class

The book and commendatory keeps me worried because I am not so sure is this helping China or making the situation worst for the Chinese people. First of all in my mind, China is not ready at all to take on America or the band of White Nations today. I am a realist and my work do keep my awake of ethnics diversity and their thinking. When they are not in threat they can be the nicest people you ever know. Best of friends. But when comes to a time when their job is at risk, chances are everything comes loose in a very convert way you can never imagine.

So to thumb down United States has an effect of fanning the nationalistic feeling of the Chinese people ( Humiliated century ago) and make them even more want to fight to be number one which is completely unnecessary, and illogical. A number two in the world (We are talking the World) even for the next 50 years for China is an amazing feat and it will gives enough time for others majority to catch up to build a more robust and developed China.

So why this message. United States is a benign power. They do not have territorial aggression but economic development. In fact the return space travel with SpaceX successful launch is a good example of technological might of the nation that utterly keep many dumb-folded. Suggestion to undercutting their defense is dangerous as this will further encourage CCP going further can result in a major war that could send them or maybe everyone back to stone-age and this is completely unnecessary. We need to stop this ego thing.

Cory

2020-0531

Cory Diary : May'20 Performance and Financial Review

Broad View

For the past 5 months the market has been rattled by Covid-19 and is still on-going. Things seem to get better when they learned more about-the virus and how to manage it more efficiently. The amount of rescue packages are so significant I am not sure how long we can sustain this amount. To be fair, the hope is for a quick V-shape recovery without significant lost in jobs.

Coming June, with the pace of opening up expects to gear up, things may not be the same again. The cost of business is going to get higher which could mean our expenses are going to go up as we have to move past the on-going virus in our community and needs for engagement with the world. Post-Covid will be a phase of managing Covid and not no more Covid. Not unexpected, there will be "Green Lane" between countries providing a network of safe passage for their passengers and therefore their economy. The channels between China-Singapore will be important for tourism.

Over the week we have on-going crisis between US and PRC in which HK is now the battle ground. I have seen how Americans beaten Russia (Cold War), Japan (Economic Miracle), and how they take on Venezuela, Iran, North Korea, Libya, Syria,Zimbabwe, Cuba, Iraqi, Indonesia , Ukraine Issues into submission, War or Economic destruction. Each time they prevail by Hook or by Crook. Things could look uglier. "Is a fight like I am willing to take a stab as long you take more."" So one of the concern is will it be like a two steps fall we faced in Year 2008 GFC. 


Investment

The main reason I do investment in stock market is to get meaningful returns to support retirement by not taking too much risk for a gamble on a quick-rich scheme. This is reflected in capital injection in net has been fluctuating zero and as of today is not quite observable so far on additional investment. Due to that as you can see below Pie Chart, my savings are up. Stock Equity portion reduced with increase in bonds.

There is a lot of capital recycle and re-balance through opportunity based quick turnaround trading. So if I am to put broadly between Pre-Covid and now, I would say the portfolio size remains about same (including investment cash), small loss currently but with much higher dividends yield of $58k currently vs $53k in Year 2019.  Squeezing out 5K for a 5% yield product requires S$100k for that matter. So you could say I just got 5k more dividends out of thin air but this is in context that a few of the stocks I have will report lower dpu such as CMT and CRCT (I presume).  The Portfolio is more robust today as is structure with increase bonds and more defensive counters or recovering ones.

In portfolio management I have the experience of being easily succumb to fallacy of large number of counters that we could take reckless risk on the rationale that is just a few percentage of the overall allocation. Therefore I have more than fair share of fees to be paid to the market which over time can be costly to portfolio compounded returns. This have changed much in recent years to control such behaviors of feeling rich.

There are still times where it is unavoidable due to black swan or misstep that we encounter lemons. This is where portfolio sizing comes in and ability to cut loss when needed. I would be careful to say that mitigation is not itself justification for higher risks. As I wrote this, remembered a passage in Michael Leong Investment book on his thought process of cutting loss during major recession which I adapt with some modifications to suit my risk profile and retirement needs. Basically retaining core investment and doing timing trades for obvious.


Performance

For the month of May performance, P/L YTD -3.8% (Xirr - 4.1%). This is much better than STI Index YTD -22% (or very roughly -20% after taking it's div into consideration). So the reduction of bank segment kind of improves a bit. The higher cash build-up and higher dividends in the portfolio is what I wanted for now. I would probably have to see what's next when the economy opens up.

Retail Reits have been enjoying recovery in their prices with easing of Covid measures. To be factual there is still some way to go to Pre-Covid level but regardless one or two steps fall this counter is for long haul. Nevertheless most others Reits are somewhat within the fluctuation boundary prices then or above. Having half the portfolio with Reits/Trust surely enjoyed the recovery provided we do not have lemons within. ie EHT. This is something I need to constantly remind myself to not go just for yield or to gamble recklessly.

To end, do invest safely and with due diligence. This time can be different but we never know.


Cory
2020-0530

Cory Diary : Poverty

More than 20 years ago,  I worked in a local company and has a good Malaysian friend as lunch buddy. As a young graduate then whereas he is very experience and knowledgeable but lesser educated. In one of our discussion, we talked about stocks and he commented he don't have enough saving to do that. I could not comprehend that time because I am just new into the job and have enough money to dabble in stock market. Fast forward today, I think there are variety of reason probably. This is best summaries by this teacher below on pitfall that can fall into us today.

A Video which I thought is excellent from this Chinese Teacher who is able to collect wealth of information on why people are poor. A lot of controversy however this makes us think how to do thing more smartly. How can we not fall back below poverty line. How can we be richer.

I hope this can help some of us.


Cory
2020-0521