Jun 16, 2021

Cory Diary : Changing Expectation

I have faint memories of my first home, a one-room HDB flat in Toa Payoh more than 45 years ago. As a child, I rarely ventured beyond our block and spent most of my time in the long, dark common corridor that was flanked by units on both sides. The building itself was a long block with a central area connecting two blocks. In those days, chewing gum was abundant and unsightly patches of gum stuck to the cement floors.

Our entire floor, which had more than 20 units, had no lift. It only stopped on specific floors, so we had to climb the stairs for the rest. Once or twice, someone urinated in the lift, and the smell was unbearable. Often, one of the corridor or stairway lights would be spoiled, and if we were lucky, it would be dark for that segment of the corridor, otherwise, the flickering lights would blur my vision. Thin railings fenced off both ends of the corridor, and from our end, we could see the open space carpark below. Owning a car was a luxury in those days.



One interesting social behavior was that neighbors would leave their doors open, and there were no gates then. A small hump on the entrance prevented water from flowing in or out of the unit when the cleaner washed the corridor. I would often visit my Malay neighbors across the walkway just to explore, and they were always welcoming to a three-year-old Chinese boy's "intrusion" visits.

It was also the first and last place where I witnessed my father and his friends praying in the direction of Mecca. I loved the carpeted area where my elder sister and I would lie down and watch TV. Our black-and-white TV was large, almost like a table, and watching it too much probably resulted in my having to wear glasses at an early age. I still remember the cartoon with the song "Gu Gua Gu Gua Xiao Qin Wa...", about the story of a frog. The entire unit size was probably the size of a living room space of a 4-room flat, so there was no separation between the bed and the living room.

There was a narrow pathway connecting the kitchen to the backyard, and the narrow side was fenced with a railing at the bottom, so I could see what was happening on the ground floor. Once, I was naughty and dropped an eaten apple stem a few floors above, hitting a young girl's arm on the ground floor. She shrugged it off and walked away.

Right at the back of the backyard, we needed to make a U-turn to get into the toilet. The door was made of flimsy metal sheet, and it made a cranking sound every time we used it. We had to squat to get our business done, and I never really understood which direction I should face, but squatting was easy then. It would be a feat for me to try today. Back then, you could slip and have your feet stuck inside the shit hole if you were not careful. There was also a rubbish chute in our backyard, but it smelled.

Doing laundry used to be a strenuous task for housewives, involving rubbing clothes on a washboard in the toilet. It seemed like my mother did this all day. However, I found the process interesting. The long bamboo pole used to hang the clothes was heavy and angled, making it a challenge to handle when it was loaded with wet clothing. It required a certain level of skill to hang them out to dry under the hot sun. I still recall the practice of our neighbor, who lived one floor above us, slamming the bamboo pole against the outside wall to notify us that she planned to hang wet clothes. My mother would then quickly collect the dried clothes.



Our home was simple, lacking a table, with only a master bed neatly tucked against the inner wall. The floor was polished cement. Across from the bed was a window where my mother placed her vintage sewing machine.

Surprisingly, our home did not have a fan or air conditioner, but I hardly ever felt hot. Perhaps we were conditioned to the climate in those days, or the room temperature was much lower. Life was simple back then because we did not have mobile phones, computers, or washing machines. However, we did have a charcoal oven in the backyard for cooking Chinese medicine for hours. It was also the place where my mother would slaughter chickens, which was quite gross, with blood dripping down.

I just remembered that we did not have a water heater, but I never felt very cold while taking a shower. In the kitchen, we had a medium-sized fridge, which was already common and invented by the 1970s. Other than that, I can only recall the washing basin next to it. We hardly ever ate outside, as my mother would cook all our meals, visiting the wet market, which was within walking distance. Supermarkets and coffee shops were unheard of, and our expenses were very low.

Living like we did back then would make it much easier to raise a family with less money, even after adjusting for inflation. However, I could never live like that today unless I had no other choice.



Cory
2021-0616 - First Pass

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Jun 14, 2021

Cory Diary : Investment Updates

Last week we seen a change in tone in the market. There appears to be more buys of Local Reits than Banks/Index. So their performance charts is closing in. If this trend continues we will see good result for the local market.


Sheng Siong

One of the stocks I am keenly interested in is Sheng Siong. It has been in and out of my portfolio for years as I never view it as long term holding even though I invest based on long term expectation of returns. This time round after the significant correction from high $1.85, it has seen 15% correction today. Decide not to wait further and increase my investment in Sheng Siong. Allocation wise is now 3.8% of my portfolio. Still not large enough. We will see is there further opportunity.


SGX

Blogged about SGX a few times I guess. Elaboration of one is here. ( Link ). Price has increased from 8.71 to 10.73 at today trading. 23% increase for 10 months wait. Current yield is about 3% but if we are to value based on this we cannot be further from the wrong as the rational we buy has more weight in its growth and steady returns. Currently allocation has grown to 6.3% from market capital gains as I have not manage to buy more this year. While it is not in the same business as iFast, both has the Financial, Technology and Moat themes. Basically fintech businesses. Their future will last a long while than the 3 major banks. 

So how to assess the situation. At this yield, as mentioned above, people who are willing to buy at this price is looking mainly for capital gains through growth now. How I wish they setup crypto exchange wing instead of collaborating with DBS. Oh well I am vested in DBS but that is not the same. To estimate the growth takes too much work for me right now as I have to read up more as is no longer low hanging fruits though I am confident is not high high up there yet. Hold for me now. 


MINT

On current right issue. Allocated slightly more than 1lot (old system ... ). Excess yet known. Hopefully I can get a lot more than anticipated. At price 2.64 is rather cheap for a Reit with good amount of DCs and good yield. Having say that I could potentially buy more from the market if necessary to further build up my allocation in the portfolio. If I am to rank all the strong reits, Mapletree Family is number one imo.

The next move of my action in the counter if there are will likely be right after Excess allocation as there could be opportunities. There should be some meats for upside supported by good DPU.


VICOM

So far this year, this counter price is a little boring as it is not moving much. Not much News since I last reviewed. I do not have a good grasp of the situation to be sure should I play more or others. I am more engrossed with many other counters and has neglected it. Dividend wise is ok but not great. Maybe it is still absorbing the 1 to 4 splits. What I don't see enough here is the growth story compared to SGX. Vicom is quite behind in this aspect. I would rank it long term safer than Net Link BNB Tr however Vicom is much less dynamic. Another Hold in my Portfolio.


Astrea 3.85%

Cleared all finally. I blogged earlier on shift to CPF focus for my bond segment and this month I have the opportunity to do just that. At 1.049 after Ex-dividend, it has 2.2% yield after cost. Still good lah. Do note this yield calculation can varies between people but I sold mine with this data in mind. So pls DYODD as usual. CPF is giving me 2.5% for OA. 4% for SA. If I have a lot of spare cash, I could continue to hold till each year CPF Top-Up however I may not get the sell price I want since this proceed is for funding my warchest. I may regret so there is no right or wrong. Is still a good place to park money.


Cory

2021-0614

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Jun 11, 2021

Cory Diary : Sustainability of Dividend Income

In this post I like to blog about how I try to rise and maintain my conviction in dividend investing. When we talk about dividend investing, the play is about total returns of the stocks. Therefore, DPU + Capital Gain/Loss. What this mean is the measure of shareholder total returns in any of this forms.

Realized gain is actually not so fruitful exercise other than incidental situation to rebalance the portfolio or when there is fundamental change in the company. If one does not have the main mindset of continuing run the dividend business through compounding the portfolio growth with long term skin in the game, this strategy will be painful to your Health. haha. So the first mindset is, we don't realised capital gain or cut loss unless specific condition as mentioned is needed.

Quality Companies come with a price. Reits performance are usually ties to Sponsor, Credibility, Capability and Business. A good sponsor provides support of low funding cost when Reits borrows from the bank. The Reit/Sponsor Credibility is the most important however but as long it satisfies enough returns in a Win-Win situation, investors will be willing to push up prices. Management capability play a big part too. Another key area is the business type. I won't be interested in Ship Business as their depreciation is real and heavy whereas investment in properties are much more robust and can even grow with inflation. 

Yield is tricky. Forward yield is more relevant than current yield when comes to long term investment. It helps to support price and if it doesn't, an opportunity to average down for higher dividend returns in the future with lower cost. Current yield can spikes due to decrease in stock price. So one must do their home work to understand the mechanics on price decrease reasons. If a Reit is sold down without good justification, is a gem to get them. However if we are anticipating consistent poor performance or ticking time bomb ie. First Reit sustainability of contract, high yield can also be a Warning to avoid. When a yield keeps going lower but DPU maintains well, this likely due to increase in stock price. That's mean the Reits are probably doing it right and if this can last over a long time it will look more expensive. There could be situation where the DPU drops with increasing stock price. The Market may feel good about the future but one has to make sure stock price can be sustained.

Business Risk comes in many form. Short Lease, Depreciating Currency, Poor Future Contract, Poor Cycles, High Borrowing Cost, High depreciation, High maintenance cost, High Perpetual Cost, High Gearing, Bad acquisition/Sales, High Taxes, ... . If we feel a specific event could change the dynamics significantly, we may need to re-balance or cut loss. This has nothing to do with whether I still make money from the current investment or not.

Diversification to me helps to mitigate my wrong choice. ie. Retail Reits. For example I use to have CICT mainly. But today FCT is more but I still retain some CICT. In-addition I have MCT on accumulation path for months. Many decision needs not be 1 or 0. Of course to maximize profit, we may have to do that and this are probably for Experts. Am I ? It also depends one's risk appetite. Between counters I may do within sector rebalance as needed with changing market situation. There is also need to look at broader and deeper diversification such as Industrial Reits due to Covid.

This result a Portfolio of Reits where we can play around the allocation with specific needs. If we do this right, we will see compounding growth in Value and sustainable Dividend over many years. After learning for many years, maintaining a dozen stocks of Reits are not really hard because the business usually are not difficult to understand unless one try to be picky say between 1.1 or 1.2 performance differences. And I could be wrong and still be ok and will not be left far behind. Will there be a day we will see a large fall in our portfolio. You Bet ! A 1M size on large crash say 50% drop, is 500k capital loss. A big test on you. Will you Hold, Buy or Sell ?


Thinking ....

Cory
2021-0611

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.