2020 – Game Plan

So we are in the first month of 2020.

What will the market be like this year? Well, for me, no point thinking about it … what is important is what is my strategy forward. To be frank, I am still mulling over it.


Broad Outlook

We have the US markets reaching new highs frequently, while some of the Asian markets have languished.

For one I think the Sg REITs is not undervalued (given the run-up in 2019). And I probably won’t be taking a stake in it, unless it is for diversification. On the other hand, there are still values to be found in the HKEX and some local dividend stocks are looking not overvalued.

Much of the attention in 2019 I felt is on Sg Reits which no doubt had a good year. And you can’t miss it with many financial bloggers who are heavily invested in Sg Reits highlighting that.

I recalled back in late 2017 and early 2018, I was slowly moving away from equities. To quote my blog post published on 1 Jan 2018:

“The reason why I am reducing my stock holdings is primarily that I feel that equities are on the expensive side, and market volatilities are low…. again, there is no science about it.”

Today we are in 2020. Approximately 2 years.

So what has happened?

STI Index

  • SPDR Straits Times Index ETF (ES3)

2018: For that year, the price of this ETF dropped by approx. 10.4%. Its dividend yield was 3.45. (Net approx -6.95% return)

2019: For that year, the price of this ETF increased by approx. 5%. Its dividend yield was 3.66%. (Net approx. 8.66% return).

If I just look at the ETF price: On 2 Jan 2018, the opening price of the ETF was $3.45. On 2 Jan 2020, the opening price of the ETF $3.286. So price-wise, there is a drop of 4.75% drop (if we don’t factor in dividend).

If we factor in dividend, the total dividend for 2018 and 2019 is $0.233 per share (0.113+0.12). So total change per share (price + dividend) from the start of 2018 to start of 2020= $0.069. An approx 2% return for 2 years (if we factor in dividend and did not reinvest the dividend).

Moved sideways in my opinion.


  • Lion-Phillip S-REIT ETF (CLR):

2018: The price of this ETF dropped by approx. 8.5%. Its dividend yield was 2.99%. (Net -5.51% return)

2019: The price of this ETF increased by approx. 15.7%. Its dividend yield was 6.64%. (Net 22.34% return).

If I just look at the S-REIT ETF price: On 1 Jan 2018, the opening price of the ETF was $1.08. On 5 Jan 2020, the opening price of the ETF $1.181. So price-wise, there is an increase of 9.4% (if we don’t factor in dividend).

If we factor in dividend, the total dividend for 2018 and 2019 is $0.112 per share (0.035+0.077). So total change per share (price + dividend) from the start of 2018 to start of 2020= $0.213. An approx 19.7% return for 2 years (if we factor in dividend and did not reinvest the dividend).

It does show the power of dividend.

What will the next 2 years be like? Would I be better off holding on to bonds (give me 2+% yield anyway), with much less mental strain? We can value the tangible numbers/profits, but hard to value the intangible (mental strain).

Moving Forward

Sector-wise I am eyeing bank stocks, HK property & Reits, local dividend stocks. I feel that bank stocks act as a counterbalance to other stocks which tend to drop when interest rates rise (typically REITs, properties and generally stocks with more debts on their balance sheets). Bank/finance stocks although technically, not at rock bottom price-wise, have not soared as much.

Some of the local dividend & growth stocks are starting to look attractive again price-wise. Nevertheless, that does not mean I won’t be buying any of the local REITs (for diversification).

How will the stock market pan out in 2020? I have no idea. I have been reading articles that state that QE4 has started and the repo crisis.

  • The Fed will be growing its balance sheet again, but don’t call it ‘QE4’ (read here)
  • ‘QE4’ and $US270 billion of cheap money fuelling market weirdness (read here)

I always feel that the US markets are priced too high for comfort.

And no point spending too much time thinking about the world economy.

All I know is that if the market tank, I will still be buying stocks albeit at a faster pace.

Local vs Overseas Stocks: There is a reason why I created a Hong Kong income portfolio recently. Some of the counters are knocked down due to the unrest in HK. Price-wise, quite a no. of the HK centric stocks I bought in late last year are turning green, although that is really not what I am focussing on (which is the dividend income streams).

As I don’t use Standard Chartered Online Trading or FSMone to purchase stocks from the HK market, there are monthly fee (of $2 per counter per month), and each time the dividend is issued, the broker takes a small fee / small percentage, even though Hong Kong does not impose withholding tax on dividends for the stocks I bought. In the big scheme of things, these can be covered by the dividend – but still, it is a nagging thought at the back of my mind.

Ultimately, I intend to balance out or be more focus on creating another Singapore income portfolio. I probably won’t be increasing the no. of HK stocks. Recently I bought my first local dividend stock for this year – an extremely small position in DBS.
Portfolio allocation: The proportion of my war chest is significantly high as compared to my stock holdings. That can be a good or bad thing. In the long term, it would be a drag to the overall performance. Although the war chest technically is still earning income (via bond interest), it would not be able to match the performance of stocks’ performance in the long run.

Given the above broad outlook above, what I will be doing is to incrementally park the excess cash each month (salary minus expenses) into stocks, while trying not to touch the war-chest. If opportunities arise this year, I will convert part of the war-chest to stocks. I still like having a significant war-chest, but I think proportion wise I need to diversify into more equities. My aim is to build up monthly passive dividend income.

I was recently notified of my bonus, so will be getting a lump sum soon. Having thought about it really hard… I reckon I will stick to my monthly amount for buying stocks (which is not much). To continue building up my passive dividend income (although there aren’t that many cheap or reasonably priced stocks).

So far most people surveyed in Investing Note will purchase stocks with their bonus.


Somehow the below article just sticks with me.

  • A taxi driver retires at 33 after amassing 40,000 HSBC shares (read here)

To quote the above article:

“He started buying HSBC stocks when it was trading at around HK$150 a share. He has pursued his plan even though the stock price plunged at one point to HK$33, sticking to his commitment regardless of the market’s ups and downs.”

Having said that, I will be moving the bonus/remainder amount to SRS then my war chest.

留得青山在,不怕没柴烧 (as long as the mountain is green, there will be firewood)

Posted in Portfolio | 2 Comments

Income Streams

This post is a quick stocktake of my current holdings.


Actually, when I look at my holdings, very little of it is in cash. Why? The key reason is this quest for Yield. Cash earns little or no interest.

Haven’t been ‘tidying up’ my portfolio for a while, and I am glad that we have handy tools in Investing Note or StocksCafe to help to track our portfolio. Perhaps StocksCafe can have a section to track the interest of Bonds (eg. Short Term Bonds, Singapore Saving Bonds, Money Market fund), CPF, etc.

For a long time, most of my funds are in Short Term Bonds, Singapore Saving Bonds, Money Market fund… and they still are. I reckon it is the waiting that is the hardest to do. To buy at a reasonable price or cheap price. However, there are pockets of opportunities here and there. The Hang Seng is one of them.

I will just quote Howard Marks for a while here:

  • Howard Marks: This Is Not a Time to Be Aggressive (read here)

“Thus, this is not a time to be aggressive in your investing. The biggest challenge is to get a decent return in this low-return environment. The biggest risk is that you and others take big risks because you feel you have to in a highly competitive environment, leading investors to exhibit herd behaviour in this respect.”

Moving into 2020, I don’t really have a rigid plan to follow. I will continue to purchase bonds (including my CPF account) and stocks, but it won’t be in big steps. I am quite happy to stay in the status quo unless there is a crisis and plenty of bargains can be found again. Although in the long term I may not be able to outpace inflation (more of that later on).

Hope these bonds and stocks will be like tiny streams adding on to the bigger tributaries.


The low return environment has many implications. For one, many have to take on more risks to seek equal or higher yield.

One of the blogger whom I do regularly follow, Sam Dogen, creator of the popular Financial Samurai blog has recently decided to go back to work full time.

  • This 42-Year-Old Retired Over Seven Years Ago, But Now Believes He’s Headed Back To Work. Here’s Why. (read here)
  • 42-year-old millionaire: I tried to retire early at 34—but failed. Here’s what went wrong (read here)

And he has this to say:
“I’m a believer of “low interest rates for life,” but I didn’t think the 10-year bond yield would ever drop to below 1.5% in 2019. I thought we’d stay around 2.5%.

Now, instead of only needing $2 million in additional capital to generate $50,000 at 2.5%, I need $2.5 million in capital to generate the same $50,000 in passive income at 2%.

At 1.5%, the required capital to generate $50,000 in passive income is over $3.3 million. Seeing such a large shift in the goalpost when you don’t want to take more investment risk is disconcerting.”

The way I interpret is, part of the reason for Sam, is that he would rather get (a job) active income rather than get more passive income via higher-yielding risky assets at this point of time.

Indeed for many, it is best to just wait it out. No point chasing after risky yields. There will come a time when there are plenty of bargains to be found. No point going crazy at this point of time.

For others, they believe in following a systematic approach to investing, be it during good times or bad.
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections than has been lost in corrections themselves.” Peter Lynch

I do like following Joseph Carlson’s Youtube channel which centres around Dividend Investing, News, Commentary. It’s like a reality series centred around an investment portfolio.

You can check out his portfolio here.

Too bad we don’t have tools like M1 Finance or Robinhood in Singapore (available to people with US bank accounts).

  • Does anyone know if Singaporeans can use M1 finance? (read here)

Via M1 Finance, the dividend which Joseph receives is automatically used to purchase shares of the stocks in his portfolio which have underperformed (although whether that is a good thing in itself is questionable). No matter how small the dividend payout is, M1 Finance was able to automatically portion it and purchase fractional shares.

It is a great tool if you are a dividend investor, and believes in regularly reinvesting the dividend. It is also great for tracking your stock portfolio performance.

Ok, back to my Stocktake.

Chart 1.JPG

Let’s think about yield.

First of I have no idea if the Insurance Cash Value has any yield…hmm….. (never really thought about that :P).

Other than that, below are the yields I can list out.

Actually, CPF is really a great way to earn interest at very little risk. The Singapore Saving Bond interest rates have been going lower, and I would rather park my money into Short Duration Bond at the moment.


Yup, it is fairly conservative, and I believed the time to max out its full potential is not here yet. I am not even sure if it would beat inflation.

  • S’poreans see inflation rate of 3.2% in next 12 months: Poll (read here)

When I talk about Warchest, I typically mean my bond (Short Term + Singapore Saving Bond) and Money Market Fund holdings. These are fairly liquid and can be easily converted to cash to purchase stocks.

There is a reason why I spread out my Singapore Saving Bond purchases: So that I can have interest payments at different months of the year.

Well, on hindsight, I could have gotten a slightly better yield if I have bought the whole lot earlier (with interest rates dropping), but I am not really too bothered by this percentage differential yield.


For NIKKO AM Shenton Short Term Bond SGD, I am able to track the daily increment cash profit via Fundsupermart.

As for CPF, I always wait for the annual financial report.

So that is for bonds (and CPF).

Same for the dividend stock portfolio, by having a diversified portfolio, the payout dates would also be spread out. The other advantage would be to help to minimise risk (to a certain extent).

StocksCafe has a great function of showing the projected dividend payout dates and projected dividend payout amount. Of course, all these are after all projected. With the on-going crisis in Hong Kong, the payout might be reduced. Nobody knows what the short term future will be. Below shows the payout dates of my various stock holdings (PS: I have removed the no. of shares and payout amount).

Table Stocks.jpg

I reckon these are just small steps for this year. I will continue adding to the portfolio slowly next year. Nobody knows if we would have a recession in the US or Singapore in 2020. Or if the stock market will crash. Like what STE mentioned, “If you are in wealth accumulation stage , crisis is your friend and you should not be afraid of crisis.” (read here).

Frankly, the monthly passive income is not much, but on a regular basis it does help and hopefully, it will snowball.

The ability to hold on to stocks for the long term is easier said than done. I think the key is what one should focus on. In my opinion, for property owners, the illiquidity of properties can turn out to be a blessing in disguise.

  • The Strength To Hold (read here)

To quote Mr Tako:
“You’ve probably heard all of this advice before — Hold stocks, don’t trade a lot, think like a business owner, etc etc. But at the end of the day it seems that most investors just keep ignoring this advice. Why?
I can only speculate here, but it might have something to do with the mix of capital gains vs. income. Business owners like a landlord or cafe-owner focus mostly on income. Yield from the investment.
In contrast, common stockholders are laser-focused on capital appreciation. They focus on growth and want it fast! That fast growth orientation isn’t always a good thing.”

I reckon the focus for both Mr Tako and Joseph Carlson is the same and that is on the earned dividend income and the fundamentals of the business behind the stocks.

I always feel that assessing dividend stocks is the inverse of assessing growth stocks – although both methods will end up with the same metrics. For dividend stocks, you study the yield first then working backwards to study the payout ratio, fundamentals and growth. After all, no companies can forever payout out dividend more than its earnings with deteriorating financial fundamentals and no or negative growth and shrinking business.

Secondly, it is always much easier (psychologically) to hold on to stocks when you have bought the stocks at reasonable and cheap prices. Mentally it is just much easier. Of course on a wider context, the fundamentals of the company should be strong and the business in which it is operating in, is not dying. That is easier said than done.

It is a constant process.

In the case of Joseph, he is always tweaking his portfolio, weeding out the less desirable stocks and adding on to those with better fundamentals and growth stories. Some of them are dividend aristocrats or growth dividend stocks which pay out consistent and increasing dividends while others are leveraged retail / commercial REITs which payout inconsistent dividends (which he uses the dividend to add on to the growth dividend stocks).

I have yet to find equivalent monthly dividend stocks in the local or Asian stock markets such as Realty Income or LTC Properties (listed in the US market – which are among the top holdings of Joseph Carlson).

And I am still searching…

Well, that’s the update I have for today.

Posted in Portfolio | 3 Comments

Hong Kong Dividend Portfolio

It is near the end of the year, and I am looking forward to a break from work, hanging out with my family. It will be just somewhere nearby but well, it is nevertheless good to have a break from work.

This will be just a short post.

I have not been blogging much and won’t be blogging much, as I felt that there isn’t much to talk about. There are long periods with no ideas… but I reckon that is just how it is.

So yes, Hong Kong .. I don’t think the protest has ended yet. However, there is relative calm over the past few days prior and after to the recent district election.


I have been scooping up some Hong Kong related stocks. Not all of these stocks are listed on the Hong Kong Exchange though.

I don’t think investing should be fun. However, I particularly like the way Kyith put it: “Gamify your financial life” (read here). Other than work and family, I don’t have much time to do anything else, but with what little free time I have, I do enjoy finding out about stocks. And so like I mentioned in my earlier post, I like to take small steps in building a dividend portfolio.

Anyway, not sure if it is a big or small step. There are now 9 new stocks in my portfolio. These stocks are either Singapore listed stocks (with businesses in Hong Kong) or Hong Kong-listed stocks (their businesses may or may not be heavily focused Hong Kong).

I don’t think I will invest heavily going forward, as I don’t want to increase my exposure to stocks overall. If the opportunity presents itself, I would like to pick up some undervalued Singapore or Malaysia listed dividend stocks or US growth stocks.

Stocks still occupy a low percentage in my overall investable portfolio (the rest are in money market funds, short term bond fund, Singapore Saving bonds or just plain old cash). Kind of reminds me of Ray Dalio all-weather portfolio. However, not like his at all, but his portfolio does have a high proportion of bonds.

On another note, some time back I was playing monopoly with my son. I realised that unlike him, I tend to go aggressively into buying whatever real estate I land on. Although by doing so I amass assets at a relatively fast pace, buying houses and hotels faster than him, but I am often low on cash. There are times – I kinda ‘self destruct’ eg. ran out of cash and unable to pay the rent when I land on his property. In most games, I do end up winning, but it kinds of made me understand where my weakness is.

Of course, investing in real life is much more complicated…. that goes without saying. I guess it is important to stay in the game, and the real opponent is myself. And there is no time limit.

I did notice that there are other bloggers who have started blogging about HK stocks.

  1. Venturing Into HKG / CHN Market – My Experience (read here)
  3. Undervalued Hong Kong Toy Company with 184% Potential Profits and 13.3% Yields (read here)
  4. Undervalued Company with 18.2% Yields (read here)

Ok, I don’t think I can handle 30 stocks like STE. Then again, I don’t have as big a war-chest as his. Like him, I am not familiar with the Hong Kong market, and I agree that it is a good idea to diversify, which he termed as ‘net casting’. So in a way, I take small ‘bites’ at a number of stocks.

I was thinking back as to what Monish Prabai mentioned about going for low risk and high uncertainty situations/stocks. Ok ideally, we all like low-risk low uncertainty stocks, but these are hard to find and often these stocks are way over-priced. On the other hand, we may be able to find gems in low-risk high uncertainty stocks since investors sometimes confuse uncertainty with risk. They are not the same.

In the short term, there are lots of uncertainty in the business of the company, and these could result in depressed prices (which in some cases present very low risk). Ultimately, it requires a long-term outlook, and not many people are willing to wait.

  • Mohnish Pabrai: Low-Risk, High-Uncertainty 100-Baggers (read here)

Of course, there are no guarantees in investing. Some may say that the long term outlook for Hong Kong is extremely dim, but how long is long… will the protest last for 3 years?

One thing is for sure, there is a lot of uncertainty for Hong Kong in the near term going forward.

Maybe I am just optimistic by nature. However, Hong Kong like Singapore is a small, high-density city with few natural resources (eg. not much land anyway), depending heavily on tourism and its financial sector. For how long can Hong Kongers sustain the economic blows that come with it? What will the working class (with families to support) depend on, if the unemployment rate hit an all-time high?

Yes, this is the first recession for HK after a decade, maybe some have forgotten what a crisis feels like.

There are also many stocks which are unaffected – as their businesses are not heavily focussed in Hong Kong itself. It may not exactly be a low-risk situation now as the Hang Seng has been holding up, perhaps moderate to low risk kind of situation.

It is not exactly low risk for all stocks.

Nevertheless, with the protest, the prices of many financial / bank stocks and property-related stocks in the Hong Kong Market are affected. So looking at the table below, I realised quite a number of these are bank stocks and property-related stocks (S/No 1 to 6).


Just listing the dividend yield for information, as I am sure the future dividend payout will drop. The earnings in the P/E will also drop in the coming months.

In general, the P/E and P/B are generally lower than the historical median P/E and P/B. In the case of property-related stocks, I tend to look at the P/B ratios.

Then there are companies which may not be that affected by the protest. For instance, Guangdong Investment Limited – Its non-cyclical water supply and infrastructure businesses generate 75% of the total revenue.

  • Guangdong Investment Limited: Defensive Assets Providing Double-Digit Dividend Growth (read here)

A crisis like this sort of exposes the differences between the different sectors/stocks.

On the other hand, in the case of Dairy Farm – I think this stock epitomise the concept of high uncertainty (low risk is debatable). Was surprised by its high dividend payout ratio and high P/E ratio. I can see that Dairy Farm is trying very hard to maintain its annual USD 0.21 dividend payout. It is unlikely to sustain in the long term unless earning improves.

In fact, its share price has started to drop since early 2019.

Investors are probably spooked by the restructuring cost and expected period, plus the industry headwind. I imagine long term investors of Dairy Farm probably aren’t the growth stock kind of investors to start with.

To quote the below article: “Supermarket operator Dairy Farm International reported on Thursday its 2018 net profit dropped 77 percent to US$92 million (S$124.27 million) after a US$453 million restructuring charge for the food business in Southeast Asia.”

  1. Dairy Farm 2018 net profit dropped 77 percent on Southeast Asia food restructuring charge (read here)
  2. Dairy Farm Group CEO says restructure will take some years (read here)
  3. Dairy Farm Group CEO says restructure will take five years (read here)
  4. DairyFarm’s new CEO shuts down lossmaking stores in Singapore (read here)

It did not help that the Maxim (50% owned by Dairy Farm) was heavily targetted in the Hong Kong protest. It is like the perfect storm.

The target prices in the recent analyst reports vary from USD 5.4 to USD 8 (during the HK protest). Not reading too much into it.

That’s it for now.

Posted in Hong Kong Shares | 7 Comments

Income Investing and Hong Kong

Personally, for me, I find these past few months and years difficult as an investor. For one, we are currently in the longest bull run in history. In other words, we are entering an unchartered territory so to speak.

  • Market milestone: This is the longest bull run in history (read here)

I have been contemplating creating a dividend portfolio for some time, and I reckon it is timely that Kyith came up with the post below.

  • Why Living Off Dividend Income in Retirement is Not Perfect (read here)

The key points below as mentioned by Kyith are:

Bottom line is this:

  1. To earn a higher expected return, you have to take on market risk. You have to put your capital in a position that the capital may go down. This means you need to live with volatility
  2. Cash flow only from fund, stock, bonds payout only is going to be volatile
  3. You can make it work if you are OK with volatile income

Ok, I am not going to sugarcoat the fact that from my personal view, investing at this time when valuations are high (esp. in the US markets), the odds are against me.

And the word “volatility” is a nice way of saying seeing unrealised losses.

It is almost every single day I read about news about the impending recession (and that Singapore has narrowly avoided a recession).

It is no wonder that we are facing inverted yield curves.

Note: Under unusual circumstances, investors will settle for lower yields associated with low-risk long term debt if they think the economy will enter a recession in the near future.

Look, I can continue to mine for stocks and study their valuation. But the possibility of finding value stocks are lower.

I still believe fundamentals of stocks are important. Although I have fallen into traps myself whereby despite the sound fundamentals of the companies’ financial, the stock prices still crashes (often there are other issues such as the industry-wide issues, sudden crisis, or geopolitical risks etc).

With that being said, going forward, there are some ideas which I have been toying with.

Firstly, I do think there is nothing wrong with keeping the majority of your cash in just pure cash (as in, in the bank account) or money market funds or short term bond funds. These are essential dry power that would come in handy in times of crisis. This is what I have been doing for the longest time.

I may be wrong, but I do believe that we are heading towards a long protracted downturn (contrary to the crash we had in the Great Financial Crisis of 2007-2009).

The stock market is long overdue for some ‘cleansing’.

To many, we are currently in an ‘everything bubble’, unlike the subprime crisis in the GFC. Government everywhere are using whatever means to prop the economy up (with many having negative interest rates). Ask Howard Marks what he thinks about negative interest rates, and he would say he doesn’t know – in fact, many of us wouldn’t know.

However, as someone might put it, negative interest rates are not a long term solution. And as Howard Marks put it – It is not the Fed’s job to prop up the stock market.

For one, companies may lack the incentives to push forward. Imagine a race, whereby at the end of the race, the future value of cash would be worth less than what it is now (in an inflationary environment)… companies would be motivated to compete and rush forward, to earn more cash as soon as possible. On the other hand, in a deflationary environment whereby there are negative interest rates – whereby the future value of cash is more than what it is now, there is no hurry to push forward. Banks are just pumping cash into the system.

Well, it effectively means that lenders pay borrowers for the pleasure of taking their money. This sounds slightly disingenuous, but in reality, it is a reflection of the economic conditions where there is too much money supply and not enough investment demand.

So with that premise in mind eg. an ‘everything bubble’ and a slow (and some might say painful) decline in stock prices… what am I to do? It is like watching a train wreck (heading towards you) in slow motion. You know it is going to happen, but what can you do? You can’t avoid it, you can’t stop it but have to face it for the longest time…

You can call me a pessimist, but from what I can see – in the best-case scenario, the stock market might just fluctuate along at the current levels (range bound) for years…. there may not be a drastic crash or sort. But at the same time, there won’t be a super bull charge. It is a slow and painful going nowhere sort of market.

For many who lack the patience (like me sometimes), or need the income, it is especially painful.

The game plan which I am talking about here is more psychological rather than fundamental/technical.

“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.” Charlie Munger

Rule 1 – Have Min. 50% War-Chest Ready

Like I mentioned earlier, there is nothing wrong with keeping lots of dry powder in my war chest. After all, staying invested is not without its worries. And everyone has his or her own risk tolerance (and also depends on your age, how much risk you are willing to take, etc). As mentioned by Kyith, you have to be ready to live with volatility. That is easier said than done. Everyone says they can do it until they get punched in the face.

For me, for one, I will be keeping lots of ready dry powder in my war-chest (like more than 50% of my investable money). And in tune with the long protracted slowdown, it is really sort of slowly dripping in and investing – with the knowledge that I will be seeing a lot of my initial investments in the negative territory for a long time (right after I bought them). And that is probably why I am in no hurry to add stocks.

I can be like adding 1% or 2% of my net worth per month… Maybe do 1 or 2 trade per month (or more). Maybe even fewer trades (depends on the situation) at a slower rate (or stopped). Rest of the time doing nothing at all.

Why not wait for the actual crash, then invest? You may ask.

Of course, there is always the other 50% of my dry powder in my war-chest that comes in handy. But let’s be frank, we would never know when is the lowest point (only in hindsight). It can always go lower (even after the slight uptick in the stock prices).

The key is not to lose your guts and keep investing. Do it at a rate that is comfortable for you.

“Everyone has the brainpower to make money in stocks. Not everyone has the stomach.” Peter Lynch.

From another angle, I can be 100% invested now. And frankly, it really depends on the individual.

For me personally, knowing myself, I would probably freak out if I am fully invested and I lose 60% to 80% of the value in a crash. Even in a slow and long crash, I would freak out. Would I stay invested then, would be a big question mark.

I am not trying to be a hero here. There is no prize for being one anyway. I am not saying that others can’t do that (for some – to reach Alpha, that is the way). If you have the risk tolerance, you can do that… in the long run, stock prices would recover, provided that the fundamentals did not deteriorate.


Rule 2 – Adhere to Allocation and Diversification Principle

Allocation and diversification are important when it comes to volatility. There is really a big difference when I am 100% invested in a single stock and that stock crashed 50%, as compared to being just 20% invested in a basket of stocks and some crashed 60% while others dropped 40% (overall maybe just a drop of 10% of my total investable cash).

At the end of the day, it is just not worth it to have sleepless nights worrying if you have made the wrong decision and if your future (or your family’s future) is compromised – no matter what the end profit will be. I would gladly go for low Beta stocks anytime – which might mean lower capital gain.

Rule 3 – Get paid while waiting

Make time your ally.

After all, from the start, it is clear that waiting will be a big part of the strategy.

The beauty of treating the portfolio as a dividend-generating machine is that time is a great ally. The longer the wait, the more income it generates (provided the companies’ fundamental remain ok).

I am not sure I have the tenacity of the Taxi driver as mentioned in the article below though…

  • A taxi driver retires at 33 after amassing 40,000 HSBC shares (read here)

And it is in line with the long protracted drop… The drop in stock prices, might, in fact, result in a greater yield.

A Recession and a Market Crash are two different things. Stock markets can do well at the start of recessions – and the two might not coincide exactly. So no point getting too excited when we see the word ‘recession’. The crash may be some time away.

To quote the article below: “It’s just that the stock market cycle rarely lines up perfectly with the economic cycle…..The problem with trying to time the stock market by calling a recession is that I could give you the exact start and end date of the next economic contraction and you still may not be able to profit from that information. The stock market is simultaneously forward-looking, backward-looking and maybe even sideways-looking so the fall in GDP is never going to line up perfectly with the decline in stocks.”

  • Everything You Need to Know About Recessions (read here)

Nevertheless, you get paid while waiting.

And in many cases, a recession spells doom for the stock market.

Nobody like a crash – but if given the choice, I would much rather prefer a slower rate of drop than a sudden drop (but often investors don’t have a choice anyway). And if the sudden crash does happen, the drip rate will just increase.

It might be a rabbit hole (as termed by Kyith). It might even be a value trap. So always keep an open mind. I am always aware that I would pick the wrong stock at some point. Some would be lemons. There are no guarantees. However, in any situations, it is always about the odds.

Rule 4 – Invest when there is Optimum Fear

I think this might be the hardest to do. Like what do I mean by Fear, what do I mean by Optimum…. like defining the impossible.

Even now, one may ask – where is the fear now? When the US markets are still near their all-time high. Irrespective of the Trade Wars and Brexit.

In fact, we don’t have to look very far. Sometimes ‘Fear’ just come to you.

Hong Kong itself seems to have self-created their own recession, and stock market crash (and in some countries in Europe like Germany- recessionary fears are already there).

  • Hong Kong enters recession as protests show no sign of relenting (read here)
  • Hong Kong chief Carrie Lam says city is in ‘technical recession’ (read here)
  • Hong Kong is sinking into a recession with no recovery in sight (read here)
  • Hong Kong Markets Are Calm as Protests Linger and a Recession Looms (read here)
  • Germany tumbles into recession as economy hit harder by Brexit than Britain (read here)
  • German recession looms as industrial orders drop more than expected (read here)
  • Germany may have entered recession in September, says central bank (read here)
  • Germany’s economy may have already slumped into recession, its central bank says (read here)

As per my previous article on being Anti-Fragile (read here), my antenna kind of go up when I see the word recession. I go towards it rather than run away from it.

  • Here Are The Countries On The Brink Of Recession Going Into 2020 (read here)

Actually, I thought my wait would be longer.

“Typically these inversions occur 12 to 18 months before a recession,” (read here)

Let’s get back to Hong Kong. I think a single post here would not be enough.

Whether is it the right time to invest in HK is a great debate. There is no right or wrong. Lots of articles have been written on this. Many bloggers have written about it as well. Many are against investing in HK stocks now and for good reasons.

However, if you believe in the long term viability of this financial hub which is a gateway to China, then the 5 months-long (and likely longer) protests will just be a blip. There are no guarantees in investing. But one thing is for sure – FEAR is very high there now. Optimum? Close.

If one has no time to study on HK stocks – investing in ETFs will do as well.

In the history of Hong Kong, this is without a doubt one of its ‘high point’. Or shall I say “low point”?

When will the protests die down – I do not know. Will it be over soon – I don’t think so (which I feel from my investing strategy point of view – does not really matter also). It might even drag on until the whole world is in a recession – the perfect storm. Or not … and one’s wait might be in vain.

The economic downdraft caused by Hong Kong’s protests is worse than that during the SARS epidemic and the 2008 global financial crisis, Chief Executive Carrie Lam said. (read here)

However, for one thing, I know for sure, by the time people say it is safe to invest – then it is too late. In investing, you only have yourself to trust.

I like to think that I am early in the game… Actually, for many HK stocks, they are already off the Aug 2019 lows. The protest is already more than five months old. The articles below are more than 2 months back. To many, it may be already too late.

  • China can’t get enough of Hong Kong’s sinking stocks (read here)
  • Hong Kong stocks at ‘compelling’ lows and could be a buying opportunity, strategist says (read here)


However, on a much longer horizon… I do believe we are still early in the armageddon. No point going crazy at this time. Technically, the Hang Seng has been holding up quite well – despite the upheaval. Trending down yes, Crash? (eg. steep double-digit drop) – not in my opinion.

Anyway, all these do not matter much, it is the average valuation over the long term. Are you buying on average at a low valuation or high valuation historically…

Rule 5 – Invest in Quality Companies that pay a consistent dividend (with not too high payout ratio)

I think we all know utility, banks, REITs, Property counters often give good dividends.

  • 5 Reasons Why Warren Buffett Is Investing in Banks (read here)

To quote the above article: “Investors’ fears of another collapse of banks in the next downturn are likely overblown, which is something Buffett might have already figured out. This has led to billion-dollar investments in banks over the last decade.”

Numerous articles are written about banks – as often reported, banks unlike during the previous GFC are now more sound, and financially stronger these days. How true is that is anyone’s guess (I take many articles with a pinch of salt). But we have been through more than a decade of low-interest rates environment (and for a bank to generate a decent profit is not easy – and many banks did just that).

This is my personal view, and I could be wrong. With many countries already in negative interest rate zone, I don’t see how much lower rates can go. The possibility of rates staying constant or even going higher is always there (odds are high).

Rates cannot stay negative for long, yes, it does give a boost initially to the economy but it is not a long term solution. It does more harm long term than good. Short term rates might go lower, but long term (and since I view investing as long term) – rates will go higher from what we have now.

Banks thrive in an increasing interest rate environment.

On the other hand, in a recession, banks without a doubt would get hit badly upfront. There are no two ways about it – but there are always exceptions. HSBC wasn’t that badly hit in the last GFC. And given that HK (unlike Singapore) has China.

“It’s the start of the end of an era of super profitability in Hong Kong,” global head of bank research at Citigroup Ronit Ghose told the Wall Street Journal.

To make matters worse for Hong Kong’s banking industry, the city must match interest-rate cuts made by the U.S. Federal Reserve, causing lending to become a less profitable venture due to the city’s fixed exchange rate with the U.S. dollar. (read here)

But on a long horizon, the risks have been priced in (if not priced much more than expected).

So when you combine HK + Banks (double pessimism), there is a myriad of stocks which one can pick now (or even for the months ahead).

One can pick up quality banks at a discount now.

Of course, there could a bigger crisis or crash ahead – a global recession or worldwide market crash — and the stock prices you see now could go even be lower.

I haven’t invested in HK banks before but I have invested in Sun Hung Kai properties before and did invest when its stock price was around HKD 80+… now it is in the range of HKD 112 to 115. Kind of shows how elevated property prices are now in HK.

Seldom we see stocks of quality companies trading down… will it get lower – why not? Should you buy? Your decision – depends on your circumstances.

As mentioned, there are many good dividend companies in HK exchange (utility, banks, REITs, Property counters) – it might be more worthwhile ‘mining’ there.

I am also not adverse to Utility, REITs or Property counters – I think there are gems in each class (irrespective of the interest rates environment). The keyword here is Quality – that would be a topic for another post.

On another note – when you invest in giants like BOC, HSBC, Standard Chartered, Sun Hung Kai, Hong Kong Land- there are already certain levels of diversifications. They don’t just operate in HK. Having said that, I am not going to sugarcoat – the HK risk will still be there. Prices might stay depressed for years and there could be opportunity costs. Various factors to consider.

I am not trying to get high dividend yield stocks that have already been trending down prior to the geopolitical crisis. Always go for minimally decent companies.

Companies everywhere face headwinds. Banks have to deal with the digital transformation, and fintech, etc… Nevertheless, banks have been proactive in cutting cost, and yes some have started to cut their head-counts (such as HSBC – On Monday, Quinn said the bank would accelerate its efforts to cut costs, which included previously announced plans to eliminate less than 2 per cent of its workforce and reduce the bank’s wage costs by 4 per cent over the course of the year. Read here).

Go low, go small, go slow, go long- Super long…

The next quarter financial reports for many of these companies would not be pretty (but I reckon these have been priced in). And for property / REIT counters, the results would not be out immediately since many tenants have signed lease agreements. Outlook nevertheless will not be pretty.

HSBC is first of the major banks in Hong Kong to report their quarterly results.

  • HSBC misses third-quarter estimates, but Hong Kong business ‘resilient’ despite protests (read here)

Didn’t I say, Rule 4 might be the hardest rule to adhere to. But before I start pumping cash into the portfolio – just remember Rule 1 (No hurry).

The worst maybe 1 or 2 years later. And deterioration will not be evident so early.

  • Hong Kong bank profits seen falling 67% in JPMorgan’s worst case (read here)

If all else ‘fails’ – like I mentioned earlier – nothing wrong with keeping 100% of your investable cash in your war-chest. There are really times when it is more worthwhile not being invested at all. Having the majority of your cash in the war-chest. In fact, the time to invest is often short and few in between.

As someone once mentioned, as you scale up – you see all these simply as asset allocations. Moving funds from cash to bonds to equities. At times it makes sense to be more in cash, at times it makes sense to be more in stocks or bonds, etc. Ultimately it is about the cost – reward equation.

Often, it is the situations that favour those that are prepared… You don’t know when. Just be ready when it comes knocking.

Posted in Personal Finance | 7 Comments

Are we truly living?

I chanced upon Kyith’s blog post “An “Extreme” Early Retirement Life is Not so Extreme. It looks Pretty Good”. Read here.

In the post, I was introduced to Jacob Lund Fisker and his philosophy on Early Retirement Extreme (ERE) in this podcast interview at Radical Personal Finance in 2014.

One key point, mentioned is that people tend to separate their work and entertainment in their life (and refer it to their work-life balance).

To quote: Focusing on one specific career all one life and then engaging other activities ‘at a spectator level’ (eg. eating at an expensive restaurant or visiting to some tourist location). A human should be able to ” change a diaper, plan an invasion, butcher a hawk, design a building, write a sonnet, comfort the dying, balance accounts, give orders, take orders, act alone, work together….. specialisation is for insects“.

To Jacob, one should be working and playing at the same time. Mastering thing is engaging to him. Jacob’s general prescription for a successful job-free life is to find activities that cover the combination of meaning+fun and theoretical+practical— albeit not necessarily at the same time.

Jacob Lund Fisker is a Danish astrophysicist and writer.


Somehow I just can’t help finding similarities between him and someone who is on the other side of the globe- Liziqi.

You can watch about who she is and her philosophy in life. Ziqi is from China.

She originally worked in the city but went to the countryside to look after her grandma. Thereafter, she started filming her life in the countryside.

In her Youtube channel, she makes everything seemingly from scratch. Being able to master all these tasks on her own. At one point in the video, she mentioned that when she worked in the city, it is about survival. When she worked in the countryside, she feels like she is truly living.

Perhaps she is one person whom Jacob Lund Fisker would agree is someone who is truly living. Someone who can direct his/her own life. Having the freedom of lifestyle.

While we spend an exorbitant amount of money on good food (pesticide-free, organic, fresh.. etc), or nice furniture, or fine crafts or embroidery (even fresh air, and nice environment) … she did it at a fraction of the cost. With the maximum utilisation of the resource, she has around her. While mastering a skill at the same time.

And enjoying the end product …When she does a meal, she often ends the video with her enjoying the meal with her grandmother. Or wearing the dress she dyed herself or wearing the embroidery she did.

For many of us, to resolve issues, we just throw money. For others, they will find other ways to resolve, without spending too much money.

For many of us, our life just revolves around work, and on weekends – going to restaurants, watching sports or movies or TV, etc…

And we all know that eventually, for many of us, our career will end. The world is always developing, past skill sets may become obsolete. When we are old, we may not be able to earn as much as what we are earning when we are young. So what will our life be like then?

Are we going just continue throwing money inefficiently at problems? Is there a bottom to this? To tackle the emptiness, you can throw A LOT…. of money on luxurious holidays, fancy restaurants, and getting people to entertain you… Just being a consumer.

I am aware that Singapore has no countryside. I am also not advocating that we be like Ziqi, not to that extend. Just that perhaps in little ways, we can change our mentality of just being a consumer.

I reckon we have to keep learning new skills, mastering things we enjoy, and creating value.

On another thought, how can we care for the people and environment around us, and provide for ourselves?

Food for Thought.

Posted in Personal Finance | Leave a comment

What is it with Property…


I happen to listen to the talk show in which Brian (from A Path to Forever Financial Freedom) was invited to share his thoughts on Parc Clematis (click here).

When it comes to property, I always felt that it is a difficult subject…. Because my wife (and my family) is now involved.

It’s got to do with the definition of property. How one would define it.

It is not like how I would treat a stock. Whereby it involves only me and my own fundamental analysis. I can view a stock purely as an investment.

For one, I think having a 2nd investment property would be a good source of passive income, but then, a property can be more than just an investment. It can also be our next home (for others it is a ‘lifestyle’). So that is where the complications lie.

Frankly, I don’t like to upgrade unless I am reasonably financially comfortable (eg. whereby most of the mortgage is paid and we can clear most of the monthly mortgage via the rental income (from the 1st property)) or our salary. Eg. the monthly loan is not much.

Then comes the price. Sure we can go for a cheaper condo. However, in many cases that would mean a smaller condo at a more remote / less accessible location or in a non-mature estate.

Sure we can go for a studio apartment (when deciding to go for a 2nd property), but it would not fit my family. So in that sense, it would be just an investment, not a home. And seriously, I don’t think we can ever afford a third property that is reasonably big in our lifetime (well not in Singapore anyway).

Going back to the earlier point. I am actually a simple guy with very basic needs. If I am a bachelor, I can probably get by with a small studio apartment and eat hawker food almost every day.

Or stretching it a bit further, I can squeeze my family into a 800+ to 900+ sq ft condo unit (which typically in the Singapore context – would mean a unit with an effective area of 700+ sq ft to 800+ sq ft, after excluding the balcony and AC ledge areas).

But then in retrospect, would we be comfortable?

Survive? Yes.

Like it? Big question mark.

An upgrade from my current lifestyle? A Bigger question mark.

And would I survive the complaints from my wife in a tiny apartment? Not that I have a lot space to hide or run… hahahaha…why pay money to kill myself right?

So it is always a tug of war between deciding between buying a property as an investment or as a home.

Or sure, we can sell our current property which is a HDB apartment. Then invest in 2 private properties (each under a separate name – me and my wife).

However, we like our HDB flat, and it is hard to find a reasonably priced condo that can match its location and size.

Yes, we can stretch ourselves financially and buy a reasonably sized condo at a good location. However, the thought of paying that 12% ABSD, is in my wife’s words….”Super Bo Hua” eg. Not worth it …hahahaha…. Yeah, we would like to upgrade, but we don’t actually desperately need to. And we would rather stay in our HDB flat then squeeze into a tiny condo apartment.,. and pay monthly maintenance for the facilities we hardly use (and god forbid paying monthly maintenance for a private lift and a carpark lot – I don’t own a car). And frankly, I don’t see ourselves enjoying much of the amenities within the development.

In some cases, the ABSD just tilted the balance slightly between being comfortable financially and being stretched by the resulting mortgage.

For a $1.7+ mil condo, ABSD alone would be more than $200k. Including all the other taxes/fees and buyer stamp duty- we could probably reasonably afford another HDB flat.

Then I am probably thinking, I probably can find a better use for that cash (and invest in something better).

Sure, property in Singapore is cheap compared to Manhatten (quote and unquote) or Hong Kong. However, somehow occasionally I do feel the sense of being sandwiched. It is like sure, technically we can afford it, but it just does not make any financial sense. Perhaps I am just too rational.

Well, that is me. My wife might think otherwise (she would occasionally say that perhaps we should embark on the next chapter. To look forward to something different).



Posted in Property | 1 Comment

Market Crashes and Being Antifragile


For people my age (or older): We are the children of the Great Financial Crisis of 2007 to 2008. For instance those people in the late 30s, 40s, 50s, etc…

Well, in retrospect, at that time, I didn’t have much savings, and of course, in comparison to now, the amount I invested then is but a pittance when compared to the amount I invested nowadays.

However, still, the rain will pass and the sun will come out. Sub-consciously, it may have changed the way I view investing in the stock market.

Look basically, I do not believe in timing the market. However, given the limited time (and resources) I have, I seem to be unable to find suitably price equities.

Yes, there are many dividend-paying stocks that are offering juicy yields, but I looking at their historical P/E and base on the intrinsic values I have calculated, it is just not within my own margin of safety level.

So I wait for Fear, while sitting on a “higher than normal” percentage of cash. And having a wish list of stocks, while trying to read some quarterly or annual reports per week.

Yes, I know when Market Crashes, there are many who are freaking out (and losing lots of money), and it does not really appear appropriate to be jumping for joy in front of them.

Heck, in the recent Dec 2018, there are already people who had suicidal thoughts due to the huge unrealised losses in their stock portfolio.


Well, I can relate the video by Phil Town below.

And in his Video, Phil Town mentioned about this term “Antifragile”. You can fast forward to 4.15 min.

In his book, Antifragile, Nassim Taleb defines it as below:

Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure , risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better. This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, good recipes (say, chicken soup or steak tartare with a drop of cognac), the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance … even our own existence as a species on this planet. And antifragility determines the boundary between what is living and organic (or complex), say, the human body, and what is inert, say, a physical object like the stapler on your desk.

The antifragile loves randomness and uncertainty, which also means— crucially—a love of errors, a certain class of errors. Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them— and do them well. Let me be more aggressive: we are largely better at doing than we are at thinking, thanks to antifragility. I’d rather be dumb and antifragile than extremely smart and fragile, any time.

It is easy to see things around us that like a measure of stressors and volatility: economic systems , your body, your nutrition (diabetes and many similar modern ailments seem to be associated with a lack of randomness in feeding and the absence of the stressor of occasional starvation), your psyche. There are even financial contracts that are antifragile: they are explicitly designed to benefit from market volatility.

Antifragility makes us understand fragility better. Just as we cannot improve health without reducing disease, or increase wealth without first decreasing losses, antifragility and fragility are degrees on a spectrum.



For me personally, I kind of accepted the fact that a huge crash is heading my way (probably sooner than I expect). Like I said, I am a child of the Great Financial Crisis of 2007 to 2008.

Yes, I will still freak out, but in an odd (or shall I say perverse) sort of way, I am kind of looking forward to it. By the way, I am still invested in stocks (and still have losses in my portfolio). But I also have a higher than normal percentage of cash (from my own historical standpoint).

Not sure, I can be like Hulk or Iron Fist eg. become stronger under stress (or chaos)…

Perhaps I can steal a line from Steve Jobs. Maybe, I guess every event in our life is like a dot… you may not know why this particular event happens to you now. But later in life, if you join all the dots together, it sort of all make sense.

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.” Steve Jobs

For people who have suffered huge losses in their portfolios due to the recent stock market volatility… some will give up, some will remain the same, while others will thrive in the next huge crash or correction. So which will you be?




Posted in Portfolio | Leave a comment

2 Scenarios – What are your choices?


Scenario 1

Imagine, I come to you and made you two offers:

  1. Offer A: You have a 50% chance of making $3300 and a 50% chance of losing $3300.
  2. Offer B: You have a 100% chance of making $2000.

Which will you choose? I reckon most people will choose Offer B. I probably would take Offer B.

Scenario 2

Now I come to you again, and again made you two offers:

  1. Offer A: You have a 50% chance of losing $3300 and a 50% chance of losing $0.
  2. Offer B: You have a 100% chance of losing $2000.

I reckon most of us will choose Offer A.

Of course, not all of us will make the above decision eg. Choosing Offer B in Scenario 1 and Choosing Offer A in Scenario 2.


In fact, for many Singapore retail investors now, the above scenarios are very real.

In Scenario 1, imagine you have a war chest of approx $100k (just cash, let’s not go into SRS).

You can (A), buy $100k worth of Singapore Saving Bonds that yield you approx. 2% in the 1st year, which will give you approx. $2k tax-free and is almost 100% risk-free.

OR you can (B) buy $100k worth of OCBC stocks that currently have a dividend yield of 3.269% which should give you approx. $3269 worth of tax-free dividend income. However, given the current volatility of the stock market, you might end up losing $3300 overall (or more) by the 2019 year end.


In Scenario 2, imagine you are sitting on an unrealised loss of $2k from a stock. By selling now, you would have a 100% chance of losing that $2k. However, by waiting it out, you might turn your $2k loss to zero or make it worse eg. becoming a $3.3k loss.

Ok, I reckon the weightage in amount is not exactly the same in both Scenario 1 and 2.

However, I guess there is some truth in what two psychologists, Kahneman and Tversky’s Prospect Theory hypothesized. Prospect Theory contends that we value each of the components of a final outcome differently as well, basing decisions on perceived gains rather than perceived losses.


“We have an irrational tendency to be less willing to gamble with profits than with losses. This means selling quickly when we earn profits but not selling if we are running losses.”

In gist: Loss Aversion. Losses loom larger than gains.


However, if we think deeper, not all people adhere to the above choices. They might choose Offer A in Scenario 1. Then we start to question why would they choose to go for Offer A.

The theory made some assumptions.

The theory is applicable if there is a neutral reference point. Eg. we are assuming all participants have the same wealth.

But in reality, $2k means different things to different people. To someone with a $5 mil net worth, $2k relatively insignificant as compared to someone who has only $100k (and part of it might be borrowed). Eg. Diminishing sensitivity.

Or it could from a different Reference point. For someone who started with zero and made $1k, he might feel better than someone who made $2k and lost $1k. The former view it as a profit, while the latter view it as a loss (although both end up with $1k profit).



People are after all complex beings. Some seasoned investors just intuitionally go against the trend.

I reckon there are other factors, whereby people are all under different circumstances. For instance, people tend to be more risk-averse when they put all they have in, or they are in dire need of cash etc.

Cognitively we can skew this psychological bias, if we are aware of what are the factors.

Or there might be a simpler answer – they basically maxed out their purchase of Singapore Saving Bonds hahaha…




Posted in Portfolio | 1 Comment

Reflections 2018

I was recently reading this post by Kyith, about tracking our net worth.

I do it all the time (well, not every day, periodically, sometimes, a few times a week or once a month when I am busy).

You see I have this goal, this purpose to achieve a certain net worth. I have this number in my mind. I think it is great… it keeps me motivated.

Remind me of this speech by Arnold Schwarzenegger below.

And yes, the markets did not do well this year. The post by Invest in Yourself below resonates with me.

I am feeling cash poor this year (read here)

Ever had the feeling whereby you take 1 step forward, but end up 3 steps back? I kind of feel like that looking at my net worth this year.

It was a busy year for me (both at work and with the family). It was especially hectic at work during the 2nd part of the year. You know the situation whereby people resigned with no replacement hired, and the ‘ball’ sort of landed in my lap.

At the beginning of this year (2018), looking at my net worth then, I thought to myself, hey perhaps I can finally achieve my financial target. Even if I am just depending on my active job income (with no capital appreciation from stocks), it might be within reach at last.

But alas… the prices of the remaining stocks I was holding tanked dragging down my net worth. My net worth did go up this year, but far lesser than I have anticipated.

So it is now, what it is… The focus now is on strategizing moving forward, and since it is now near the end of the year, it is a good time for some self-reflection.

It has been a bad year so far (financially), BUT…

Yes, there is actually a BUT. A silver lining so to speak. Yeah, I reckon many of us focus too much on the negative and did not think about the ‘what if’. We are often too hard on ourselves.

The thing is I have been selling off most of my shareholdings since late 2017 (or even earlier). Currently, shareholdings make up just 12% of my overall net worth (excluding the property I am staying in). Yes, it still hurts, when prices drop, but it could have been worse.

And if I just consider shares vs cash/SRS/SSB/Money Market funds (basically liquid funds), the percentage ratio is 20:80. Actually, I think for this year, by just doing almost nothing, this percentage dropped further due to the share price drop (used to be 35:65 at the beginning of the year).

If I had not sold off and kept the majority of my net worth in stocks, the pain would be much more, if not intolerable. We all have different threshold levels for pain (for unrealised losses). For some, they are well aware of this threshold, for others, not so (and starting to find out).

It is easy to say – Stay invested at all times. But try being 90%-100% invested at all times, and see how it feels when the markets tank. Use all you have, your CPF, SRS, Cash, Emergency funds – just dump in stocks…

Imagine your whole net worth dropped by 30% within a few months… your colleague, Mr Do Nothing (who happens to sit beside you, and who just bought a new car), who is a below average worker, who did not track his spending, did not care about his savings and did not spend his time studying stocks/companies, did not invest in stocks, basically heck-care, actually end up miles ahead of you financially..You did not even get to smell or touch the 30% cash. And you start to wonder how long the market will stay in bear market mode. And what if it goes even lower, and you need the cash for some emergencies.

On the other hand, I could also be bashing myself with no selling off ALL my shareholdings early enough. There is simply no end. There is always a better ending. But why go into that now. Can I change history?

You know, I seldom go into Stocks Cafe, but when I do go in occasionally, I will look at some of the portfolios listed there (under the “Shared” link). I do recall that when I went in some time at the beginning of the year, many of the portfolios showed positive returns (in green) – YTD, 1yr, 3yr… Today when I went in, the majority of the portfolios (I reckon more than 90%) show negative returns for YTD or 1yr…some with close to negative 30% YTD returns.


There are many methods in investing… the dollar cost averaging, the buy and hold forever strategy, the active trading version, etc. To me, there is really no right or wrong method, but rather what suits you.

And I guess, it also depends on how dependent one is on passive income (eg. at which stage of life you are at). If I am a retiree who is heavily dependent on dividend income, then it does make sense to be invested all the time. My focus would then be not on the net worth, but the income (and really I think that is one good way to view stock price fluctuations).


On another note, despite the big drop in percentage in holdings of stocks (from 2017 to now), the annual amount of passive income actually only drop by 24% yoy. Then again, my passive income wasn’t big, to begin with.

Well, I reckon ‘I invest like a girl’ this year (or even last year). However, the fact is, I still have my goal in sight. If I don’t achieve via passive stock investing income, then I will do it the old fashion way – via my job income (even if that means late nights every weekday night if my health permits), or the little steps in being careful with my spendings and saving as much as I could.

Warren Buffett Invests Like a Girl: why women are investment naturals (read here)

If I don’t achieve my ‘magic figure’ this year, then I aim for next year, or if not, the year after. Yes, it might be a low figure for some, or given my pace, a loser’s pace… well, heck, I do it my way, the way I am comfortable with.

The truth is, I personally feel that we would see more pain moving forward, and a longer one at that. I did peep at some of the stocks I have been eyeing and they did not reach the bargain bottom prices yet. That is the more frustrating part. I am a sloth when it comes to investing, always late to the party… I don’t even know if they will ever reach those prices with a good enough margin of safety. I could be waiting for nothing, ever. And I have no target date to invest.


The S&P 500 chart looks bad for this year.

  • S&P 500 drops more than 2% to new low for 2018, Dow dives 500 points (read here)
  • We are now in a bear market — here’s what that means (read here)

But in the bigger scheme of things, it is a mere blip.


To quote from this post by A Wealth of Common Sense:

“But I do know that human nature makes it difficult for people to handle the types of losses we’ve experienced over the past few months. It invites overreactions and increased volatility of emotions.

It’s always possible these losses are an outlier…or they’re a sign of things to come and things only get worse from here…..

What I do know is the history of stock market performance shows that the longer you extend your time horizon, the higher the probability you have of seeing gains. This relationship seems to hold following a big down quarter in stocks, as well.

I’m not positive this will happen again because nothing is ever guaranteed but expected returns have likely risen from where they were just 3 months ago.”

Warren Buffett is famous for holding his stocks forever, but he is also famous for sitting on a huge pile of cash for a very very long time… Yes, personally, I dislike holding a high percentage of cash earning next to nothing. Currently, some are in the bank, some are in Singapore Saving Bonds while the majority are in a Money Market Fund – the current interest I receive (pathetic yield) just about right to give me more than enough “lim kopi” money per day :p

Well, if no bargains I like, then I have to make do with these.

Yeah, kind of an anti-climax. All along I just thought investing is the way forward. I save, I invest… but invest in what. I have a small circle of competence. I only have so many hours per week to research in stocks/ companies. Companies I knew well.

For some stocks with strong fundamentals and stable businesses, with good dividend yields, their stock prices actually went up (some by a lot) during this correction. I reckon it is the flight to safety. Makes the waiting longer.

It also takes determination to sit with that pile of cash and wait for the right price. Damn frustrating at times. Yes, shorting is one way, but if I am thinking about long-term, that is not the route.

In the end, moving forward, instead of thinking of selling to stop the pain, my mentality now is on how to slowly pick up bargains. And given the war-chest, it might take some time (if I am not progressively buy in).

Don’t give up on your goal.

Posted in Portfolio | 2 Comments

Quick Valuation Study for Sarine Technologies Ltd. (U77.SI)

Intrinsic Value Study


 In gist:

Sarine Technologies Ltd stock price on 14 June 2018 is S$0.895. At current price, there is no margin of safety. The above study shows that the intrinsic value is S$0.67.

The earnings of Sarine Technologies will need to improve in the future quarterly/yearly reports to reverse the negative earnings growth trend (and improve the stock’s intrinsic value).

In addition, the above calculation did not factor in the recent 1Q 2018 results (which is a good set of results).

Every so often when I do a new post, people will ask me if I would be buying or selling the shares at the current prices. Actually, on a side note, I don’t really think I should be advising on stock picks (I am not really qualified to do so). The main motive for my posts is for the blog to serve as my personal journal.

I think ultimately one needs to form his/her idea on the intrinsic value of the stock. Doing a calculation above is one method, but I feel for some stocks, it should not be the only method and may not be suitable (esp. for stocks will uncertain historical earnings).  Reading about the development of the business and its industry is equally important in forming your own evaluation.

I think the wrong way is to depend on stock prices to form your judgement. Eg. look at the stock price, and try to figure out what is going on. The market is there to serve us not to instruct us. 


Well, I’m not as optimistic as other analysts’ reports. Nevertheless, numbers are just one part of the equation.

  • Maintain ADD with Unchanged target price of S$1.53 (read here)
  • 3Q16 At Low End of Expectations. Still A Buy (S$1.97) (read here)

And I am still long on this company, stock (otherwise I won’t be reading up on it).

Most investors hate uncertainty, and who can blame them. However, businesses are messy by nature. It takes time to study them. And this is one company that is seriously testing my patience.

Posted in Sarine Technologies Ltd | 4 Comments