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 (with may or may not be heavily focused in businesses in 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 win, 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 | 6 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?




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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

The Curious Case of Sarine Technologies Ltd (SGX: U77)


I have previously done a few posts about Sarine Technologies.

  1. The 2 Financial Pillars of Sarine Technologies (read here)
  2. Sarine Technology (Gemological) Laboratory: Will this Tech Company be the Pick-axe to the Diamond Gold Rush? (read here)
  3. Sarine Technologies: A turn for the better? (read here)
  4. My thoughts on Sarine Technologies Ltd (SGX: U77) (read here)

In some of my previous posts I mentioned about the financial performance of the company.


Annual Financial Performance

Below is a snap shot of the annual performance of the company.




The recent years’ performance has been erratic. FY 2017 was not a good year. However, it is worth noting that the revenue and the net profit of FY 2017 is higher than the lows of FY 2015.

Expenditure wise, Cost of Sale and Sales & Marketing Expenses have not ballooned significantly.

Below is a snap shot of the recurring revenue of the company.



Year on year there appears to be an improvement, looking at the recurring revenue performance of FY 2017. Despite the drop in total revenue in FY 2017 in comparison to FY 2016, the recurring revenue, on the other hand, continues its upwards march in FY 2017.

In addition, the proportion of recurring revenue to total revenue has been steadily increasing, in line with the increase in the installed base of Galaxy System.

On a more immediate and micro view, the recent Q1 Net Profit performance released in May 2018 has been the best ever since FY 2015. However, it is worth noting that the Q3 2017 and Q4 2017 performances have been a great disappointment.



Reading through the past reports from Sarine Technologies, analysts’ reports, etc, over the years, we are aware that there are issues that impacted the financial performance of the company.

  • Overly aggressive rough diamond pricing and stagnant polished diamond prices;
  • Existing polished inventory resulting in significantly reduced quantities of new rough diamonds entering the midstream;
  • Deterioration of the diamond manufacturing industry;
  • Illicit operations of parties infringing on Sarine’s intellectual properties.

So it is like a fresh breath of relief when one reads the recent May 2018 Q1 Financial Statements. The significant growth in revenue on a sequential quarterly basis, driven by higher equipment sales and increased recurring income, reflects renewed robust activities in India’s midstream diamond manufacturing sector.

  • Equipment sales and recurring revenues rose amid renewed robust activity in the midstream diamond manufacturing sector;
  • Installed base of Galaxy® family systems grew to 357 units with 12 deliveries to customers in Q1 2018; overall recurring income represented about 45% of Group revenue;
  • Sarine’s ground-breaking AI-based 4Cs diamond grading reports were met with enthusiastic market reception;
  • To support planned adoption by additional higher-volume retail customers, an additional diamond grading lab to open in India in May 2018;
  • Balance sheet remains strong as at 31 March 2018 with short-term investments, cash and cash equivalents totaling US$35.5M and no debt.

Even the issues Intellectual Property (IP) Infringement (eg. Diyora & Bhanderi Corporation and a number of their related entities using an illegally modified version of an older release of Sarine’s proprietary Advisor® program (version 5.x)) appear to be slowly resolved.

One is through judicial recourse, while the other more long-term effort is through the adoption of Sarine’s newest Advisor® 7.0 (which is protected by proprietary home-grown cloud-based cyber protection). To date, over 12,000 installations of its 20,000 over installed systems have migrated to the latest version.

And the recent quarterly financial performance does indeed seem to support the above mentioned good news.

  • Sarine Technologies Q1 profit up 27% to US$3.1m (read here)
  • Sarine reports 27% rise in 1Q18 earnings to US$3.1 mil (read here)
  • Sarine kept at ‘add’ by CGS-CIMB on IP protection progress, continued growth (read here)
  • India Upturn Boosts Sarine’s Results (read here)
  • Sarine Secures First Retailer for 4Cs Grading (read here)



Share Price unaffected by Good Q1 Results

So it is odd that share prices continue to plummet downwards, even after the release of the good Q1 results (nevertheless it is just one quarter).


From a high of SGD 2.88 in early 2015 (given the announcement of the deterioration in earnings starting from the 1st half of 2015), the share price has dropped to SGD 0.98 on 25 May 2018.

That is even lower than the share prices in 2015 and 2016 when the earnings were worse (Note: FY 2017 Net profit was higher than FY 2015 Net profit).



In the past, it was easier to understand why Sarine Technologies stock prices dropped.

  • Why Did Sarine Technologies Ltd’s Share Price Plunge 17% Last Week? (read here)


Personally, I am not surprised that the financial results of Sarine Technologies are getting better. If you have read about the progress of Sarine Technologies, you probably wouldn’t be either.


I do believe that given time, Sarine Technologies will sort out the issues. Moreover, fundamentally, the company is still strong (cash rich), and have improving recurring profits. Many of the problems are due to external market conditions.

They have been actively seeking out opportunities from the down-stream and up-stream sector of the diamond industry while pushing out new and better products and securing more business tie-ups with other related companies.

The business itself is highly scalable.

Geopolitical Risks


A member in Investing Note highlighted that a possible reason could be the recent conflicts coming out from Israel and the Middle East region. I must say, the Geopolitical risk is the one factor which I did not consider when evaluating Sarine Technologies.


However, this itself is highly debatable. Do the conflicts have a direct impact on the stock prices of Sarine Technologies?

  • Biggest Flare-up on Israel-Gaza Border Since 2014 War – a Timeline (read here)
  • Palestine: What has been happening since WWI (read here)
  • Israel seems to be preparing for war with Iran, U.S. officials say (read here)
  • Israel v Iran: Are they heading for a war? (read here)

Below, I did a simple chronological timeline of the recent events against the share price of Sarine Technologies. There have been more news in the month of May 2018.


Nevertheless, some may view the current share price as a good entry price (regardless of the geopolitical risks). For me personally, I don’t intend to sell the Sarine Stocks that I currently have, after all, my primary focus will still be on its financial performance and not its share price. The price is there to ‘serve’ the investor.


“[Benjamin] Graham would tell you that the market is there to serve you, not to inform you. And basically, he would tell you that sometimes the market will be very, very wrong. And if you look at stock prices as buying pieces of businesses, you will be able to recognize when the market is very wrong” Warren Buffett

A quick check on Spiking, revealed that Sarine Technologies have been buying up their own shares (without a single sell) from Nov 2016 till 27 May 2018. (read here) No doubt they are still sitting on big unrealised losses (from their early buys).



Shall end this post with this small emotional tune.

Posted in Sarine Technologies Ltd | 5 Comments

The month of May and US treasury yield curve (2018 Version)


I did a post on the US treasury yield curve back in May 2016 (read here). As quoted in that post (with reference to a newspaper article): A sign that a correction is coming is that the US treasury yield curve is close to as flat as what you see before previous crises.

  1. US Treasury yield curve flattens to lowest level since financial crash (read here)
  2. The 10-year Treasury yield has hit the 3% level — here’s what that means (read here)
  3. 2-year Treasury yield posts largest weekly climb in three weeks (read here)

“A flattening yield curve is traditionally a harbinger of a recession to come, suggesting little inflationary expectations because of slowing economic activity. Why buy 10-year when you get nearly as much return from shorter dates,” Blain told CNBC via email. (Extract from 2nd article above)

The yield spread between the 2-year and the 10-year rate stood at 43 basis points, around its narrowest in about a decade. (Extract from 3rd article above)

I think every day, is a day closer to the next big crash. Although we never ever really know when.

So how is the yield curve now in comparison to the one in May 2016? See below.


From the above, we can see that the yield curve is flatter now as compared to the one in May 2016. That is not surprising.

But what if we compare the yield curve to the one prior to the 2007 Great Financial Crisis? Eg. The curve in Oct 2007? See below.


Surprising, the yield curve now is similar or even flatter than the yield curve in Oct 2007. Hmmm….


Basically, in my case, I still have a significant portion of my portfolio in risky stocks which aren’t really showing much profit so to speak. However, if I compare my liquid cash (war-chest) to stocks, the proportion is a low 35% vs 65%.

There are many many shares which I would have liked to purchase but have held back. Actually, it is never an easy task. (esp. when I think about the cash sitting there and doing essentially nothing)

I don’t believe in timing the market, and have always stay invested (even now). This year wasn’t a profitable year for my stock portfolio.

Nevertheless, one must always be prepared mentally and to allocate sufficient war-chest for the occurrence of a crash. As much as I would like to paint a rosy picture and say that a Crash would never come… but it will. Not if but when.

Whether you are already invested in the stocks you believe in or have been aiming for some stocks….

“People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.” 
― Peter Lynch 


Posted in Portfolio | 4 Comments