Tracking my portfolio

There is a reason why I track my stock portfolio performance.
Occasionally I would look at the percentage profit and loss of each stock. Currently it looks like this (see below). The percentage profit and loss excludes dividends received.

I was reminded of the carnage in the Singapore stock market recently which saw the index fell from almost 3500 (April 2015) to almost 2600 (Jan 2016) – an almost 25% drop from the top.

And I was holding all my stocks all along (butt naked). In fact I actually increased my holdings from Jan 2016 to Aug 2016. I tend to buy more when my portfolio looks like a murder scene (lots of red).

“I’m always fully invested. It’s a great feeling to be caught with your pants up.” Peter Lynch

In retrospect, at one time in April 2015, my overall portfolio shows an un-realised profit of almost 9%. This swiftly transformed into -11% in Feb 2016. So overall it was an almost 20% decline.

So back to why I look at the percentage profit and loss of each stock in my portfolio. Of course I like it when there are profits and when the overall value of my portfolio increases. However, I am still many years away from the end of my ‘investing life’.

I understand that markets do fluctuate, but values don’t. Value do change but at a much much slower pace (as compared to stock price fluctuations). The fundamentals and performance of a company takes years to change (unless there is a seismic shift in their business process).

I typically just track the earnings performance of the company which I have invested in, and would only take notice if there is a drastic change (for the worse) in their earnings reports.

I may be susceptible to anchoring bias as I always like to buy at a lower price from which I have initially bought. This is probably the main reason why I look at my portfolio – to see if there are bargains to be found in the stocks which I have invested in.

If this is a game, the winner is the one with the lowest average price (provided the fundamentals of the company did not deteriorate). And I think I would be playing this ‘game’ for many years or decades to come. Unless the property market crashes big time, and I find value in the properties I am eyeing for (I might shift my cash from stocks to property).

At this moment I do not find value in most of the stocks I am interested in…. While I do like the fact that some of the stocks have significant unrealised gains, I am scratching my head as to where to invest. Frankly, the market does not care what I think or feel, and I can neither force or change the market. Consequently I did not really invest in stocks / P2P loans or Invoice financing recently. Neither do I think it is a good time to invest in properties as well.

Well, I have at this moment focused  my attention to channeling my resources to increasing my war-chest. Hope I can achieve a 6 figure war-chest by the time the next market crash comes.

These days on weekends I spend more time with my son- Playing badminton, flying kites, playing lego, playing cards, going to the library, or just watching TV together.

Opportunities will come.

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The search for yield

It has been an uneventful month for me so far.
I have been trying to find values in the stock market and looking for some good yield / income producing stocks to purchase – however no results so far.

I have also been looking at QAF, Sheng Siong, REITS (in general – notably First REITS and Parkway Life REITS) … I don’t find any value at the moment.

Pertaining to my P2P loans / Invoice Financing portfolio, due to the recent regulatory requirements by MAS, the platforms which I have been using are either offering Invoice Financing or Private Placements. I am unable to participate in the latter (Private Placements). It is also difficult to participate in the Invoice financing loans as these are often fully subscribed when they are launched.

I have subscribed to the auto financing option with Capital Match – however the amount which was automatically invested for each loan was low. I tend to activate and deactivate this auto funding option quite frequently as I do not particularly like loans related to the Oil and Gas industry or Construction industry. So I have yet to manage to increase auto funding amount beyond $1000.

With the regulatory requirements by MAS, investors are unable to participate in more loans, until platforms obtain their regulatory clearance.

My passive income has received a boost so far this year due to the P2P loans and Invoice financing. However having said that, I have yet to receive the payments from two SME companies. One is in arrears for 4 months and the other is in arrears for 2 months. A bank has started bankruptcy proceeding with the former.
Yup, P2P loans (unsecured loans) are indeed risky.

Well, back to my passive income. Even with the defaults, this year’s passive income is still higher than last year’s. So am trying to find ways to further increase it next year….
So back to the search and waiting.


The upside to this is that my war-chest has increased – either from repayments from the P2P loans / Invoice financing loans which I had participated earlier, stocks which I have sold, my active income (from my job), and yes from stock dividends…

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Sold my Sun Hung Kai Properties stock

I have recently sold my Sun Hung Kai Properties Stock.
I have previously written why I bought the stock in Feb 2016 (read here).

Selling any stock to me is never easy.
In general, I am trying to increase my war chest and reduce my exposure to cyclical stocks.
As per one of my earlier post (read here), I wasn’t sure of the reason for the sudden rise in its stock price in recent weeks.

The property market in Hong Kong seems to be getting tougher with Sun Hung Kai Properties lowering margin (despite the strong sales). The company has been offering discounts and promotions, reducing costs to buyers by as much as 20 percent, to compete for sales as overall volumes declined 35 percent in the six months ended June from a year earlier. (read here)

Incidentally the China stock market has hit 7 months high amid optimism about the upcoming Shenzhen-Hong Kong Stock Connect and speculation about property merger and acquisition activity (read here and here).

I don’t foresee an imminent crash in the US market (well I sucks at market timing anyway), given that the Yield Curve (the difference between the 30 Year Treasury Bond and 3 Month Treasury Bill rates) is still positive (click here).

However like I say, I am slowly turning my portfolio to be more defensible (leaving stocks which I am comfortable holding even during a market crash), reducing my stock holdings extremely slowly and increasing my war chest.

Posted in Sun Hung Kai Properties Limited | 2 Comments

Re-visiting Chipotle Mexican Grill, Inc.

I have previously written about Chipotle Mexican Grill, Inc. in 6 Feb 2016 (read here).


There are many things I like about the company:

  • Its good balance sheet (Chipotle has an immaculate balance sheet with no debt and $190 million in cash);
  • Strong growth for many years (increasing ROE, ROIC, ROA and free cash flow);
  • The management aggressive share buy backs in 2015 and 2016.

    The company has also announced plans to open a burger restaurant called “Tasty Made” this year which will exclusively focus on burgers, fresh cut French fries and milkshakes.


      Chipotle Has Bought Back 2 Million Shares in 2016. Should Investors Be Happy? (read here)

      Has Chipotle Mexican Grill Lost Its Appetite for Buybacks? (read here)

      Can “Tasty Made” Become The Turnaround Trigger For Chipotle Mexican Grill? (read here)

    Yes, the recent food scare in 2015 which caused its stock price to drop seem like a good opportunity to pick up some of these stocks. E. coli outbreak and other incidents sent sales plummeting starting at the end of October 2015.

    On 6 Feb 2016, when I did the post on Chipotle Mexican Grill, Inc., the stock was trading at around USD 480. On 12 August 2016, the price was at USD 397.33, even lower. If I was interested in the stock then (in Feb 2016), I probably would be more interested in it now. Moreover, earnings has started to recover- coming off the worst two quarters in company history (read here).


    However, what is perhaps more important are the things I don’t like:

  • Its growth has faltered even before the food scare.
  • Although it has swung back to profitability in the second quarter, but the earnings weren’t spectacular. Chipotle’s same-store sales declined 26.5 percent. Transactions fell 19 percent during the quarter, suggesting that much of the sales gains were due to the strong promotions. Chipotle also saw its food costs as a percentage of sales rise 110 basis points to 34.2 percent. (read here)
  • I have not tried their food before, and am not aware of their service standard.
  • It has no dividend payout. Which means that there is nothing to hold on to, if stock prices crash drastically.
  • And yes, the US market (S&P 500) is at historical high. The average P/E ratio of S&P 500 since the 1870’s has been about 16.7 (read here). Today, the P/E (TTM) of S&P 500 is at 20.5 (read here). Not exceedingly high, but nevertheless higher than the average. I would have preferred a perfect storm when the market crashes causing the stock to plummet further. This would provide a bigger margin of safety.
  • 1I am like a vulture circling a wounded prey, waiting and waiting. And oh yes, in the meantime, still trying to build up my war chest.

    Nevertheless, let’s do a quick trailing PEG and intrinsic value calculation of the stock.

    1) Trailing PEG

    P/E: 58.88
    Dividend Yield (%): N.A.
    EPS compound growth rate (5 yrs): 21.77%
    The trailing PEG will be 58.88/21.77 = 2.7. Which is not good (> 1).

    2) Intrinsic Value
    Intrinsic Value calculator_21

    Looking at the above, the stock price on 12 August 2016 at USD 397.33 is much lower than the calculated intrinsic value (USD 1,010). In fact, it is approximately 61% lower than the calculated intrinsic value.

    Interestingly, the intrinsic value I calculated in 6 Feb 2016 was USD 718 (read here).

    However, the intrinsic value (USD 1,010) as shown in the table above is excluding the exceptional bad year results of 2015.

    Let’s do the calculation again, but this time using the TTM (Trailing 12 months) results for this year (assuming that is the final results for 2016 – although highly unlikely). Please see below.

    Intrinsic Value calculator_31

    Looking at the above, the calculated intrinsic value is now USD 331.35 which is much closer to the stock price on 12 Aug 2016 (USD 397.33). Unfortunately, the intrinsic value is lower than the stock price. Hence, there is no margin of safety.

    Nevertheless, I do hope that the stock price will drop further and present a bigger of margin of safety should I decide to dip into it.
    In the meantime I will be checking their earnings periodically and observe if the recovery is consistent (or better) which might signal growth in the future.

    Posted in US Stocks | Leave a comment

    Growth Spurts

    Good things come to those who are patient and they often come in spurts. I noticed that some of the stocks in my portfolio have experienced some ‘growth spurt’ in their stock prices in recent days.


    Although I am happy but I do understand that short term volatility does not really mean much. Not sure if the stock prices will remain at the higher level for long term though. Am not really a trader…
    Ultimately it is their earning growth and fundamentals.

    Nevertheless, let’s take a look at them. Enjoy the good times while it last. :p

    One of them is SMRT. After the announcement of the buyout offer by Temasek, shares of SMRT Corp rose sharply after they resumed trading on the Singapore Exchange on 21 July 2016.


    The stock was trading at $1.495 on 8 July 2016, and on 12 Aug 2016 it was trading at $1.625. This represents a almost 9% jump in approx. 1 month.

    Nirvana Asia
    Another candidate for privatization. Private-equity firm CVC Capital Partners announced on 8 July 2016 that it agreed to pay $1.1 billion to buy out Nirvana Asia Ltd., Asia’s largest funeral-services provider by revenue.


    The stock was trading at HKD 2.12 on 14 June 2016, and on 12 Aug 2016 it was trading at HKD 2.86. This represents a almost 64% jump in approx. 2 months!

    On 5 August 2016, ISOTeam announced that it has clinched 13 new private and public sector contracts worth $20.11 million. SG Wealth Builder did a good post on the company and its recent development (read here).

    With the possible strong growth moving forward, the share price of this counter has also increased exponentially.


    The stock was trading at $0.30 on 12 July 2016, and on 12 Aug 2016 it was trading at $0.40. This represents a almost 33% jump in approx. 1 month.

    Colex Holdings Ltd

    A thinly traded stock (which partly explains the lumpy stock price movement). Nevertheless, it is a consistent over achiever when it comes to earnings.
    On 2 August 2016, the company announced that profit before tax in HY2016 was S$4.358 million, an increase of S$0.859 million or 24.5% from S$3.499 million in HY2015.
    However, I am really surprised by the almost 18% increase in stock price on 12 August 2016. Well, since it is a thinly traded stock (at any given day, only a few trades are done by a few investors), I won’t be surprised if the stock price drop just as fast over the next couple of days.


    The stock was trading at $0.40 on 27 July 2016, and on 12 Aug 2016 it was trading at $0.54. This represents a almost 35% jump in approx. 2 weeks!

    Sun Hung Kai Properties Limited

    I am not really sure what caused the sudden rise in stock price. I am aware that on 12 July 2016, the former co-chairman of Sun Hung Kai Properties, Thomas Kwok, who had been jailed for corruption in December 2014, was released on bail.

    However in recent times, the developer only managed to beat its residential sales target for the first half of the year by sacrificing profit margins as it offered sweeteners to entice buyers. In fact, Sun Hung Kai’s strong sales came at the expense of lower margins. The company has been offering discounts and promotions, reducing costs to buyers by as much as 20 percent, to compete for sales as overall volumes declined 35 percent in the six months ended June from a year earlier. (read here)


    The stock was trading at HKD 88.05 on 28 June 2016, and on 12 Aug 2016 it was trading at HKD 111.30. This represents a almost 26% jump in approx. 1.5 months.

    Well, there are also stocks in my portfolio that have under-performed.
    Been looking at some US stocks which I feel is undervalued (but not undervalued enough :p).

    Posted in Uncategorized | Leave a comment

    Why I prefer dividends from shares for passive income in Singapore


    Ways to passive income
    There are numerous ways of generating passive incomes. For instance, interests from bonds / P2P loans / Invoice financing, dividends from stocks, rental income from properties, etc.

      Personally, in Singapore, I would prefer dividends from stocks.

    There are many ways to choose dividend stocks. However, the most important thing to avoid is not just choose any high yielding stocks without checking their financial fundamentals and also if their price are undervalued.

    Comparing P2P loans and Invoice Financing with Stocks

    When it comes to P2P loans and Invoice Financing, although the yields are typically higher than stocks, I personally feel that the risks are higher if we are to compare these to some of the financially stronger dividend yielding stocks. The balance somewhat tilt towards favorably to dividend stocks with strong fundamentals.

    I reckon these might include Raffles Medical (Dividend yield: 3.25%), Vicom (Dividend yield: 3.11%), Kingsmen Creative (Dividend yield: 4.62%), QAF (Dividend yield: 4.46%) and ST Engineering (Dividend yield: 2.99%).

    Looking at the above, one might think that their yield are nothing spectacular. That is especially obvious when you compare that to the potential yields from P2P loans and Invoice Financing where the annual simple interest can range from 10% to 16%, and annual effective interest (if you reinvest the monthly repayments) can range from 18% to 28%!

    However, while a higher interest is one of the main advantage of P2P loans and Invoice Financing, there are also a number of drawbacks.

    Decisions again and again
    Firstly, unlike stocks, there are loan tenures for P2P loans and Invoice Financing. P2P loans typically has a term of less than one year, while invoice financing is even shorter – less than 3 months (mostly 1 month).

    Hence, if you have invested in a great stock whose fundamentals are getting better each year, there is a good chance that earnings and dividend payout would increase year after year, for many years to come. In the US, they have the Dividend Aristocrats list which contains companies in the S&P 500 Index that have increased dividends every year for the last 25 straight years.

    Should the above materialise, the yield after many years when taken in relation to your initial buy price would have multiplied many fold. And that is not considering the potential paper gains from the rise in stock price.

    On the other hand, although the initial yield of P2P loans & Invoice financing are higher, every month (or at the end of the term), I would have to pick another loan / invoice financing to fund. This is not easy. P2P loans and Invoice financing are currently experiencing a ‘gold rush’ effect, as investors flock to invest in these funds almost as soon as they are launch. There is little time to analyse the companies’ fundamentals and often than not I am not able to participate as these loans are quickly funded. This rush to participate may sometime cause me to be less vigilant in analyzing the risks. And in order to achieve a high effective interest return, I am exposed to new funds / risks almost every month.

    Moreover, the fundamentals of some of these SMEs are not strong (not surprising, since if they were, they might have approached and received bank loans instead). A single late payment from one of their clients might affect their cash-flow. Being un-secure loans, should the companies go under, priority would be given to repayment to bank loans instead.

    Moving targets
    There are also cases whereby the companies are not truthful about the liabilities they have. They could have also taken on more loans once they obtain a loan from a P2P platform – those increasing their risk exposures.

    Yes these could similarly happen to listed companies. However from my experience, I seldom have these issues with fundamentally strong listed companies, with long histories of earnings growth.

    On the other hand, in my P2P loan portfolio, 1 company has been in arrears for 3 months and a bank has started bankruptcy proceeding against the company. For another company, they have an outstanding debt with their current factoring house of which they have not informed the platform previously (they claim they were not aware of it). Luckily, 2 directors of the borrower who are personal guarantors (husband and wife) have at least 2 private properties in Singapore that could be refinanced. Consequently, the platform have forced them to refinance one of them immediately, so as to obtain the cash to settle the debts.

    No hurry when it comes to stocks

    Coming back to stocks. I have plenty of time to study and read about the companies I want to invest in. I can easily find articles or analysts’ reports for many of them online. I do not need to make rash or quick decisions. I can mull over it over many days. I can also bid for the stocks after trading hours. Markets will always open on the next weekday. Yes, I don’t always get to buy at the price I want, but I am sure if I am patient enough, opportunities will come knocking again. And I am not just limited to the stocks listed on SGX, but also those in the US markets, Hong Kong exchange, KL exchange etc…

    Yes, stock markets crash from time to time. We have recessions and economy slow down. Your initial capital invested in stocks might vaporize in these events. However, similarly for P2P loans / Invoice financing, there would also be increased defaults and loans in arrears should these events occur.

    So what about property? After all many Asian Billionaires became rich via real estate (read here).

    However, the rental yield in Singapore is low. Gross rental yields in Singapore remain poor, at around 2.5%. And that is not factoring the interest you have to fork out each out for the mortgage, annual property taxes, etc.

      You wouldn’t own a Singapore condominium for rental yields! (read here)

    Only a small correction
    In addition, home prices in Singapore have increased 92 percent since 2003 but have only dropped 9 percent from their peak since September 2013. I doubt the downtrend will reverse anytime soon.


      Why the ABSD and other property cooling measures should stay (read here)

    However, unlike shares, bonds or P2P loans, to a buyer, a residential property is part financial asset, part basic human need. And as stated in the article above: “When the cost of acquiring property becomes prohibitively high, as is the case in cities such as Hong Kong and London — driven by foreign investment flows and extraordinary monetary stimulus — we may condemn an entire generation of young people and couples to sharing rental flats or rooms or living with their parents well into their adult years. This may have implications for the country’s push to get more young people to start their own families and boost fertility rates.”

    I reckon that when there is no control and free market principles are at play, given the low interest rates & low unemployment – there is a high chance that property prices will enter bubble territory. The high prices are welcomed by existing home owners, but a bane to young couples seeking to buy their first apartment.

    I have a colleague who has just gotten married this year. He, together with his wife was unable to purchase a BTO HDB flat, and had to buy a resale flat. Consequently, they bought a $600,000+ old resale flat somewhere near the central region of Singapore. Although it is a good location, I wonder how many years they need to pay to clear the mortgage.

    Yes, the starting pay of graduates are slowly rising. Based on the latest Joint Graduate Employment Survey, the median gross monthly salary for fresh graduates employed in full-time permanent employment last year was S$3,300 (read here).

    With a starting pay of $3000++ and a mortgage of $600,000++ (and probably some student loans) – it might be too stressful for some young couples. Having uncontrolled ultra expensive properties is akin to stealing wealth from the next generation.

      Singapore ranked world’s most expensive city for 3rd year running (read here)

    Nevertheless, there are rare times when investing in properties make sense (when the property market crashed). However I felt that now is not the time yet.

    Posted in P2P, Portfolio | Leave a comment

    Super Group – change for the better?

    I have previously written posts about Super Group (read here and here).


    It appears that Super Group’s financial is taking baby steps improving (read here). Main weakness appears to be due to weakness in the Thai baht and Malaysian ringgit, and expenditure on advertising and promotional activities for its new products.

    I don’t view the currency weakness as detrimental to the financial fundamentals of the company. It is a constant threat, and it fluctuates.
    The expenditure on advertising and promotional is only justified in the long run if it bears fruit. This is probably the bane of this highly competitive industry. The initial promotion for new products would be high, however if the products are welcomed and accepted by the consumers, the long term benefit would be great. And recurring cost can be reduced.

    As the 5 years EPS growth is -4.47, the trailing PEG would be negative.

    However, the free cash flow has been increasing in recent years.

    I did a quick intrinsic calculation of the share, it appears that the current share price ($0.775) is below the intrinsic value.

    Intrinsic Value calculator_Super Group1

    The above intrinsic value is around the same value as the intrinsic value I calculated in Jan 2015 which was 0.9 (read here).

    I have started to nibble at this stock.

    Posted in Super Group | 4 Comments

    Turning Active Income into Passive Income

    Stamp Collecting & Computer Games

    When I was young, my cousin and I used to collect stamps. We would soak the used envelopes (which have stamps on them) in the water to separate the stamps from the envelopes. Then we would leave the stamps out to dry and put them neatly in an album. Sometimes we would buy used or new stamps to add to our collections.

    Being young, we do not have much cash nor much mail. So our stamp collections are limited. We don’t actually spend a lot of time collecting or buying stamps. However, every so often I would take out the albums and enjoy flipping through the pages to look at my stamp collections. Occasionally I would rearrange the stamps in the album and think about how I got these stamps.

    As I grew older, my dad bought me a computer. And well, I did use it for games..heheh :p
    Of the games I played – I tend to like ‘strategy’ games like Starcraft, Koei Romance of 3 Kingdom, or even simple city planning games like Sim City. Somehow, I am not really into action / shooting games like Doom or Quake. Yeah, I sound really old hahaha.

    Investing and Temperament

    However, the point I am driving at – I think there is a little bit of similarity between Passive Investing and hobbies like Stamp collecting and ‘Strategy’ games. I particularly like the way Kyith put it: “Gamify your financial life” (read here).

    Besides knowledge and determination, I think temperament is equally (if not more) important. To build up a portfolio, it takes time and planning. Whether you are investing for Capital gains or Passive income, profits do not appear overnight. As what people would normally say “Time in the market is more important than timing the market”.

    Well, these past few months I have not been investing much in the stock market. In recent months, I also did not add significantly to my P2P loans / Invoice financing portfolio as well.

    One reason maybe because I am busy at work. The other reason could be due to the anchoring bias. I have been tracking some stocks and their prices have not dropped (in relation to their prices many months back), or the prices of the stocks in my portfolio has not dropped below the prices which I have bought them. Interestingly, 2 stocks in my portfolio might be privatized and de-listed (Nirvana Asia and SMRT) while one ETF (Lyxor Japan (Topix)(DR) UCITS ETF will be de-listed on 22 August 2016 as the fund has not attracted sufficient investor demand.

    With regards to my P2P loans and Invoice financing portfolio, I don’t intend to have a large proportion of my investment fund in them. Of the loans I have funded, 1 loan has been in arrears for 3 months. A bank has begun bankruptcy proceedings against the borrower. The platform’s appointed debt collector has also been engaged by other financial institutions to begin debt collection proceedings against the borrower. A confirmed default (whereby I don’t get back the remaining sum I have invested) would wipe out most of the interests / gains I have accumulated so far for my P2P loans and Invoice financing portfolio. In a way, the risks involved for these loans appear to be much more than a conservative well funded stock with a 3% to 4% dividend yield (at least it is highly unlikely I will lose all of my investment in any particular stock).

    A peek into my portfolio performance
    Nevertheless, when I do not study or read about stocks / companies or when I don’t feel like buying shares, I tend to look at my portfolio and ‘strategize’. Kind of similar to how I would flip open my stamp albums in the past. Well, ok… in the case of my investment portfolio, there aren’t really anything tangible. Nowadays almost everything is ‘digitized’. They are just basically numbers. However, I would sometime dissect these figures and try to see how my portfolio has performed.


    Well, as you are aware I am trying to increase my passive income. However, I am not overly aggressive in seeking out high passive incomes …eg. just invest in high dividend yield stocks. Nevertheless, having a decent yield is one of my criteria is seeking out assets for my portfolio.

    Anyway I have done a few charts to study the performance of my portfolio for the year 2016 (eg. from beginning of Jan 2016 to beginning of Aug 2016). I did not include the actual cash value as I like to keep it private, and I felt that it doesn’t help in illustrating my points.

    Ok, the below chart (Chart 1) show the accumulated value of Total Net Worth (excluding the value of the property I am staying in).

    The below chart (Chart 1A) is a subset of Chart 1. My stock portfolio value constitutes a portion to my net worth. However, the value of this portfolio tends to fluctuate up and down monthly. It also reminds me that my accumulated net worth is never fixed. In the event of a market crash, a significant portion will just ‘evaporate into thin air’ quickly. So mentally I am not so fixated by the net worth value.

    On normal or good months, I like to look at these values, but during bad months / market crashes, I tend to ignore them and focus on what stocks are undervalued.

    The below chart (Chart 1B) is also a subset of Chart 1. My P2P Loans & Invoice Financing portfolio value constitutes a portion to my net worth (albeit a smaller portion). The portfolio value doesn’t really fluctuates much, as basically I am just investing into loans / Invoice financing and collecting interest monthly.

    Conversion rate (from active income to passive income)

    This bring me to the question: What is the conversion rate monthly from my active income (salary from my full time job) to passive income (stock dividends & P2P loans / Invoice financing interests), for the year 2016 so far.
    I know the cumulative values of my net worth and portfolios, but as my goal is to slowly build up my passive income, this question is important.

    So first I start by charting out the cumulative values of my active income for the year 2016 so far (See below Chart). There are some errors in my figures in my own record as I only track my salary after CPF deductions. So the values are not the actual salary I am getting per month.

    Next I chart out the cumulative values of my passive income for the year 2016 (see below chart). As you can see, there is a spike in month of May due to the inflow of stock dividends.

    Next come the interesting part. Each month I would divide the cumulative value of my active income & passive income by 12 (total no. of months per year). This would be the ‘average monthly’ Active / Passive income value during that particular month. However, I will only get the final confirmed average monthly active / passive income for 2016 at the end of the year 2016 or beginning of year 2017.

    For instance, if cumulative value of active income for Jan is X1 and cumulative value of active income for Feb is X1 + X2, then the average monthly values I will get for Jan is X1/12 and (X1+X2)/12 for Feb. So month after month, the value will either be the same or more.

    See below chart. It compares the value of the ‘average monthly” value of my active income with that of my passive income.

    With these values, I am able to get the percentage of the average monthly passive income when compared to my average monthly active income. The goal is to each month, I try to increase the percentage of my passive income. This is not always easy as I do not receive stock dividends every month (payouts are lumpy). On the other hand, my monthly salary is fairly constant except I normally get my bonus in Jan and pay rise in May.
    I view the below chart as the most important charts of all (among the charts shown above).

    As you can see, ‘my highest score’ is approximately 14% for the month of June. eg. Assuming this becomes my ‘final score’ for the year and if my total monthly income is $1000 (passive + active income), $123 will be passive income while $877 will be active income. If my total monthly income is $3000, then $369 will be passive income while $2631 will be active income. Or a more simplified way would be if my active monthly income is $3000, then my monthly passive income would be $420.

    At this point of time, I do not know what is my ‘final score’. What would be this percentage value at the end of the year. Hopefully I can increase my passive income and increase this percentage value by the end of the year.

    Alternatively, I can cheat and reduce my average monthly active income (eg. quit my job, take a lesser paying job)… hahaha. Just joking.

    Posted in Portfolio | 4 Comments

    Interesting month

    This shall be a short post.
    The past few weeks have been eventful for me.

    – Well work wise, it is getting busier. Working later. One of the colleague has resigned, while my immediate superior has been hospitalized.

    – The announcement by Temasek to take SMRT private is another interesting turn of events after LTA’s takeover of SMRT’s rail assets. I do own some shares of SMRT. However since most of the shares were bought in 2010 / 2011, the prices which I have bought them were in the range of $2.10 to $2.13. So if the privatization is successful, I would have lost money. Personally, I think SMRT non rail business is doing fine, and I don’t mind holding on to the shares.

    – Earlier this month, another of the stock which I have invested in (Nirvana Asia) may also be bought out. On 8 July 2016, Private-equity firm CVC Capital Partners said that it agreed to pay $1.1 billion to buy out Nirvana Asia Ltd., Asia’s largest funeral-services provider by revenue. They would pay three Hong Kong dollars (39 U.S. cents) a share to take Nirvana private.
    Nirvana Asia was only recently listed in end 2014. I do particularly like the business model of this death care company.

    – The final most unexpected piece of news is from my parents (who are in their lates 60s and late 70s). They bought a second property (a 2BR condo unit) for approx. $1.1 mil. They just wanted to enjoy life at the late stage of their life. Oh yeah, with their age they can’t take up any loans, so they need to pay it off within 4 years before the TOP. My dad said he probably have to empty up all his savings and shares to pay for this.

    Posted in Uncategorized | 6 Comments

    Singapore Property past and future (Same old same old?)


    Kyith Ng from Investment Moat recently posted a great article about Singapore Property price growth over the years.

      How has Singapore Home Condo, Landed and HDB Property Prices Grow over Time? (5 years, 10 years, 20 years) – read here.

    In the post, he shared the below table.

    As with all great articles, it always spark a thought process in my mind. Looking at the table, I am curious as to what are the figures in the year 2015 (and also 2016, since we are more than halfway through the year).
    2015 wasn’t really a good year for the Singapore property market.

      Private property prices down 3.7% in 2015: URA (read here)

    The Cyclical Property Market

    So assuming that the figures are sort of like the previous down cycles (from 1982 to 1986 or from 1997 to 2003), the colour of the cells in the table for the year 2015 and 2016 might look like what is shown below.

    After all, prices have eased since the 2013 peak. Private home prices, for example, have been falling for 11 consecutive quarters and the resale market for Housing and Development (HDB) flats has had a similarly weak period, even though the fall in prices is much less than the surge from 2009 to 2013.

    So let’s assume it really look like the table above, and you think to yourself, “Wow!… looks like we are in the midst of the downtrend in the cyclical property market, and it looks like a great time to enter (or prepare to enter the market)”. Some might think that since the cycle is always the same, the future is pre-determined…

    We have often heard of how people made great fortunes from property and of people who wished that they had bought the properties in the down years of 1997 or 1998 (with the greatest declines). In any market, the hindsight is always 100% crystal clear.

    The future is never the same as the past, however they often rhythm.

    Property: A complex commodity

    A property, as a commodity is fairly simple to understand. After all, I am sure all of us use one. However, unlike most other commodity, when it comes to property there is a social and political agenda. If it becomes too expensive, citizens (esp. first time buyers) would feel marginalized.

    In Singapore, the property market is unlike any other commodity / stock markets. Properties are highly regulated by the government (from the supply of land for sale, restrictions on foreigners owning properties here, fees / duties / taxes on properties, etc).

    Let me put it in another way. When it comes to stocks, for the typical retail investors there isn’t much restrictions on how much shares they can buy (or sell) now or 3 years from now (unless they own a huge amount of shares for a particular company and threaten to take ownership of the company – which is highly unlikely). There is also no duties or taxes for anyone deciding to buy another 10,000 lots of the same stock, within any time period. I am not talking about Options or Derivatives… just simple stock trading.

    Pricey properties and cars in Singapore

    Maybe a better example to use would be another item close to the hearts of most Singaporeans – Cars.

    If you have been living in Singapore for a number of years, you would know that in Singapore, cars are extremely expensive and so are properties. In the case of cars, this is partly due to the COE (Certificate of Entitlement). Well, it is understandable, given the limited land / road in this island state, the number of vehicles have to be restricted in some ways.

    If I can draw a parallel between cars and properties – the COE of a car would be like the Stamp Fee of a Property. However, for the former (COE), it is subjected to a bidding process – its value fluctuates base on the demand and supply. On the other hand, the stamp fee is a flat percentage of the selling price of the property.

    In so many ways they are similar (pricey in land-scarce Singapore), yet in so many ways they are dissimilar when it comes to regulatory policies.

    A dichotomy between properties and cars in Singapore

    To some, both properties and cars are essentials. The must haves in their daily lives. Ok, this is really arguable. And I don’t think a single post is sufficient to discuss about this.

    For some families, consisting of working parents with young kids and aging grand parents, a car is a life saver. With a car, the daily morning & evening rush to and from work / child care centres / schools / clinics / grand parent’s place / gym, etc is a lot easier and faster.

    There are families with no cars, but there are also families with 2, 3 …4 cars. There are even people who collect cars as a hobby (then again, there are also people who collect properties as a hobby :p).

    It is no wonder that there was a question raised in the past on imposing taxes/duties on people who buy a second, third car, etc. Similar to the ABSD (Additional Buyer’s Stamp Duty) when it comes to properties in Singapore.

    Citizens / PRs / Foreigners have to pay ABSD for their second, third properties, etc… so why not cars? After all, a family with the means to buy 2 or 3 cars might not necessarily require a car as desperately as another family with lesser means and who have more kids / aging grandparents / disabled or terminally ill members, etc.

    Having said that, I can understand why some families need more than 1 car. For instance, if both parents are working in sales and both need a car for their work… etc.

    However, when it comes to residential properties, I find it hard to understand why a family need 2 properties in Singapore. Maybe one as a vacation home (in sunny Sentosa), or for investment. Eh.. or because the husband and wife can’t stand the sight of each other and want to live apart?

    Well, there are some possible situations:
    – The couple is buying the other unit for their aging parents (but then it could be in their parents’ name).
    – Or their work places happens to be at opposite ends of Singapore – the husband works in the West while the wife works in the East, so they bought one property in the West and one property in the East. The husband stay in the East while the wife stay in the West, so that their commute to work on the week days is easier, and on weekends they stay together in one apartment :p…. yeah probably not likely in tiny Singapore.
    – Or the second apartment is for the mistress / lover.

    There are many ways to view a car or a property.

    We can view a car as a utility / functional item, but in some situations it could also be seen as an investment (eg. when you rent it out). For example a limited edition Lamborghini kept in mint condition overtime could be viewed as an investment. Or if you lease out your vehicles and use it as a means of generating side incomes (as a Uber driver) etc…

    Similarly, a residential property can be seen as both a utility / functional item (when you stay in it) or as an investment (when you rent it out).

    Property cycle: Same but different

    Coming back to the table shown above.
    So assuming that we are again in the midst of the downtrend in the cyclical property market, and you think that it is again a good time to buy a property. But are things the same as in the past?

    For one – was there ABSD (Additional Buyer’s Stamp Duty) or TDSR (Total Debt Servicing Ratio) in the years from 1982 to 1986 or from 1997 to 2003? Was the downtrend then and now caused by economic factors, actual supply and demand or by policies and regulations?

    Then again are the figures a true reflection of your buying price, especially now. For example, the price of property might have drop by X%, but by buying a second property the drop would be more than X% (you need to factor in another 7% or 10% due to ABSD). So how relevant is this table now (to some segments of the population)?

    Regulation by itself is a double edge sword. With no regulation, the market is prone to volatility and sudden boom and bust. Segments of the population will be marginalized and priced out of the market. Too much regulation, it would stiffen the free spirit / entrepreneurship and again marginalize another segment of the population. Creating a build up of demand.

    Is it a good time to buy a property (for stay or investment)? Keeping in mind that in the three years since the cooling measures were introduced, URA data show that average prices across both private and resale HDB markets have only declined 10 per cent.

    And lastly, do you think the ABSD and other property cooling measures should stay?

      Why the ABSD and other property cooling measures should stay (read here)

    Shall leave you with this song.

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