Just my Take on Investing. Currently in the late twenties, my current target is to reach $75k to $100k of wealth upon reaching the age of 30 years old. As a Singaporean, I like the slower pace of our markets as compared to US markets.
Today, I am here to share on some of my recent trades.
Singtel has been doing well lately but its P/E is getting on the high side at 18+. All eyes on its Ex-dividend date on 26th July.
• Sold some Singtel shares to finally reduce my exposure. Still holding the bulk of it. • Traded on UOB, with a 7.4% in profit. • Traded on Capitaland, with a 10% in profit. • Traded on Sandfire Resources, with a 6.6% in profit.
As you can see, I am once again on selling mode and keeping cash on hand. About half of my investments are now converted back to cash. The markets have been on range trading mode for months, and the upside seems pretty limited.
The CFA journey is well known for its grueling journey.
Being unsure if I should embark on the same path, I went to see what people were saying on the forums. Many shared the same doubt if they will regret doing so despite the high recognition it will provide. Few of the writers who passed CFA has zero financial backgrounds when they just started out (some are even Chartered now)
At the same time, they shared their extensive studying schedule to let us know what we will be signing up for.
From what I read, it feels like we should go for it if we have the heart or passion for it.
It is like how many successful businessmen got to where they are using passion and determination without the need of academic qualifications.
If we are going solely for the hope of getting an attractive salary, do not bother.
This is because we lacked the fire to push through. Moreover, the CFA does not guarantee a high pay check. We "may" get a high salary is the key word to remember.
I have not forgotten the 4 years of part time studies pursuing my degree. (and even promised myself to never pursue another academic certification again)
However, I took my degree mostly for qualification purpose when I had only some interest in the topics covered. (It is lucky that they did covered some finance related modules in Business school)
While I cannot bring back the past and change my profession/degree to Finance, CFA may be an alternative I can turn to now. Or I can get a banking & finance job before taking CFA.
Another thing to be considered is our Skills Future credits. It will be good if the government can top it up for our usage soon. Those who already spent the first $500 on courses will understand this.
While what I mentioned above is easy for me to say, I am still wondering if it is the right call to make.
In the past few months, I hardly had the mood to do anything or even to live.
It is not just random negativity. To make it short, my fiancée and I had broken up when our wedding is supposed to be held this year end. Last year, she voiced out that she is not ready to get married and that we will not be happy together. (There was no 3rd party) It may sound like a joke that our love still exist but we realized what she mentioned was rather true after further months of trying.
It is unbelievable that someone who was so close to you and there for you for 4 years suddenly just disappear. Or perhaps the sole real meaning of life just vanished.
We were lucky most wedding preparations were not yet made but the heartbreak is real. Being someone who overthinks, it was surely a rough period of my life. Sleeping, drinking, jogging, gaming and even working were some great escapes. I lost interest in almost everything including investing.
I even found it oxymoron. Why work so hard to save and invest when money can be lost so easily due to such “mistakes”? Why thrift and not just splurge these money instead on entertainment, gaming, drinking and time wastage? (or even smoking- while I don't smoke) I also wondered why must this happen to me when my life is already quite f***ed.
Good news is I am slightly better now after learning to slowly accept things.
Sadness aside, I am actually having my reservist now and it has been a good time to avoid the stress from work. It was also a pleasant time to quiet down the mind.
During reservist, the regulars in camp will often ask everyone what we are doing outside for work and we may even exchange contacts for job or business opportunities.
How I wished I can tell them that I am making money from home.
Portfolio: Minimal action was taken since last year. Perhaps it was partly due to the lost of motivation during this period of time.
I took a small profit selling Costa Group which was listed in Australia. Due to Brexit fears, I missed adding a multi-bagger which I wanted to buy earlier. (guess what is not yours will not be yours)
My current portfolio is well reduced in size, keeping more cash on hand.
Added more SSB in May 2019. I missed out buying SSB in Feb and March to complete the investment category of DBS Multiplier for the “whole year”. (including months covered by dividends from Singtel)
Career: Decided to try moving out the logistics industry and enter the banking & finance industry since this is ultimately what I will like to do. To be honest, I am already pretty sick of my current industry.
Many said that it is still not too late at the age of 30 while we know the job market is quite bad now. Hopefully, someone will give me a chance to learn.
Reits are popular in Singapore. And there is nothing wrong owning some of them. I personally have not held any Reits for a while (mostly due to point 2 & 3 below). This does not mean that I am not currently looking out for them because I see no harm holding a small substantial amount to diversify.
Below are the reasons why I minimize holding Reits:
It is better to have Reits when we have large capital to capitalize on the given yield. 5% yield on $4000 is mediocre but 5% yield on $40,000 is something. In other words, I feel Reits suit the rich more.
Reits tend to move slow in prices (same for Trusts). Yes, this means they have less speculative movements. However, I am still quite young and able to take more risks by building more cash from price appreciations. Instead of gaining about 5% yield , there are so many better risks-rewards out there to grow our money.
Most of us should know by now, Reits are exempted from taxation as long as they distribute at least 90% of their revenue to shareholders. This explains why their yield are generally attractive. What is expected to happen during down times (declining net profits) in order for Reits to maintain the same payout per share?
Most Reits move with the economy unless we are talking about more defensive Reits like Parkway Life. If we really want to go long term in Reits, I feel it will be worth waiting for the next cyclical downturn.
Most Reits are heavily in debt and some even have debts higher than 40% of their net worth.
In my own opinion, anyone thinking to go "All-In" on reits without diversifying should probably think twice.
Once again, I got rid of Alibaba and this time at a small profit. The cash is then used to purchase Broadcom shares.
I have always longed to own a semiconductor company and finally picked up Broadcom. Coincidentally, Broadcom (Avago) was one of the highest volume customer in my previous job among other tech companies like Dell, AMD, Apple, Keysight etc etc. Probably a waste not leveraging on my work exposure then?
There has been fears that over 20% of Broadcom’s revenue come from Apple but they are slowly moving away from their reliance on Apple (despite their already diversified structure).One fine example is the acquisition of CA Technologies, one of USA largest software companies. They also sold off their Wireless Iot business to Cypress Semiconductor, foreseeing the great competition and capex ahead. This will also help push their focus on things that will more likely work.
Another fear is the obvious trade war escalation since a big chunk of their revenue comes from China like many chip companies.
If you did not know yet, Broadcom is actually a shareholder centric company (while Alibaba is client centric). The company is still growing fast and some of their free cash flow are turned into dividends to reward shareholders. Their dividend yield is one of the highest in the chip industry and they also use their cash to buy back a lot of their own shares -which once again benefit investors.
The dividend will act as a buffer to volatility as compared to other chip companies like Nvidia, AMD and Micron. Still, I did rather prefer Broadcom use some of the cash to pay off short-term debts to reduce interest payments.
I was lucky to catch the latest price uptrend despite not catching the recent bottom of around $200. As Broadcom is a great company and its uptrend still looks intact, I will give it some time to see if it will break out through the next resistance of $270. Happy profiting.
I realized that I have not updated my 30 year old target after passing this milestone back in 2018.
The update is I did not manage to hit $100k net worth but instead only achieved $75k.
Funny enough, I am not upset about the miss. I have tried my best since becoming aware of things.
With time lost, there is only more pushing to be done in the upcoming years.
I just have more rebalancing to do in life to reach my long term goals pertaining to net worth.
Rebalancing of Investments
My strongest current dilemma is on how/ when to rebalance my current holdings despite the decent performance in 2018.
With around 75% in Singtel and 25% in Alibaba, these are apparently extreme investment types. One is a stagnant yield play while the other is an exponential growth play with zero dividend insurance.
Singtel belongs to the traditional defensive industry but is it still defensive now?
I have to admit that there is also partial speculation in Alibaba despite the due diligence done. It is highly dependent on the outcome of this trade war.
However, my current main concern is still Singtel. I wished that I owned less Singtel shares which will translate to more cash to diversify into other cheap companies currently available in the market. With that, I can have a good handful of 4 to 5 companies covering 2 to 3 different stock exchanges.
As mentioned in my earlier post, I have arrived in this situation after acquiring Singtel shares from my fiancée. (There is a joke here too, Singtel is the only company which I dare to invest for my family and yet it was a big laggard compared to many of my previous trades)
Selling some Singtel shares now will only lead to some actual losses. The best way which I can think of is to sacrifice some shares using some of the past dividends received to limit such losses.
Nevertheless, it can be fun and challenging for me to figure my way out since I am stuck in such situation. Once more cash is raised from Singtel, the fun shall begin.
The below points are what I look for in companies.
Guess I am a greedy person who look for great Risk-Return Tradeoff while at the same time seeking insurance from dividends lol.
-Healthy companies (for sure)
-Decent future growth
-Relates to future/emerging trends
-Country diversification in terms of revenue/stock markets
-Decent Yield (% dependent on dividend tax), with controlled payout ratio
I used the word “finally” because it was not a particular good year for me. There are struggles in life as usual, or perhaps what we tend to perceive as problems ourselves. Overthinking?
We really need to learn to take more deep breathes, stop and admire the big blue sky above us to remind us how small our problems are in this majestic world.
I know 2018 may be a good year to some people and friends out there so it is not all bad.
Today is the first day of 2019, and we hereby confront our successes and failures. I was awaiting for the closing bell of NYSE yesterday to conclude my paper losses and overall 2018 performance.
Portfolio for the year was very positive until the big drop from September highs. Some of us are lucky enough to have sold some holdings before the correction happened. My prediction is that any companies we are still holding now should be mostly having paper losses. In my case, Singtel is the heaviest bag I am holding. In Stocktwits forum, we call ourselves “Bagholders” when we are holding on a losing stock.
I guess that the trade war will likely strike a deal within these 90 days while a final agreement will take more time. At least, that is what most of us are hoping for. If this holds true, now will probably be the best time to buy more stocks at cheaper valuations and stocks will rally once again after the deal. (especially stocks with major China revenue exposures)
Before I share my portfolio performance for 2018, I need to highlight 2 things as it does significantly affect the outcome: • During December, I took over all Singtel shares from my fiancée. (since I was the one who suggested her to buy initially and it has already been a year, I feel that it is best I take over ownership and add it to my portfolio) • As for the Singtel shares under my parents, these are totally excluded from my performance.
Merry Christmas in advance! Another year is coming to an end now.
It is unsure yet if 2018 will be a better year in terms of the financial markets but life sure is better this year working for a better company compared to 2017. Work life balance sure makes a big difference. Hope it was a better year for many of you too.
To find out if 2018 was a better year to my money, I shall follow up with a final post to summarize my performance and the good lessons learnt.
Associated British Foods was removed from my portfolio recently as the risks in pounds (GBP) became seemingly high due to Brexit uncertainties. I am lucky to get out early at GBP 24.40 at a profit. It is estimated that the pound can drop by 10-25% to the Dollar if agreements fall out (which it most likely will). Thus, I prefer to have my cash back in SGD.
In contradiction to my last post, I have taken back my words and added Alibaba back for the very long-term growth.
The reason of buying back was due to simple reasoning (yet complicated since I did sold all my shares back in October’18).
USA stocks are mostly expensive, which explains why I am turning back to $BABA for growth. Baidu looks good too. (Some popular US stocks discussed in Stocktwits forum are: Amazon, Apple, Nvidia, Facebook , Alphabet, Microsoft and Netflix)
My prior research was probably insufficient to keep me confident in holding on to BABA earlier.
With further digging, I now have more reasons to back me up now on some past concerns:
Alibaba shares are held by major and reputable institutions such as BlackRock, T.Rowe Price, Vanguard and State Street. Moreover, the SEC are closely watching Alibaba on its reporting figures. Frauds may exist in NYSE but it is at its minimal. Non-GAAP figures may have been used and it can be argued that they are able to reflect more accurately on the operations of a business than standard GAAP.
The reason of having its shares held in Cayman Islands also became more apparent now. As opposed to allegations made, the main reason of doing so was to avoid the PRC regulations that restricts foreigners investing in China companies. Without knowing this, such arrangements once appeared to me as shady.
Of course, risks are still present to foreign investors here.
Investments like Baba should not be for the short term. It may take 2-10 years for share prices to reflect the growth coming ahead.
Alibaba has an attractive PEG ratio of around 1.0. Due to expected growth of around 27% in the next 5 years, it helps explain the current share valuations and high P/E.
Forecasted GBP growth in China is still strong while Baba has many untapped market share to penetrate in China, Taiwan and Asia.
It is obvious Alipay is almost everywhere in Chinese retail as it became a trustworthy brand for vendors and consumers alike. Core e-commerce will also continue to feed into revenues while Alibaba “passively” earns from commissions from each transaction made.
Looming Key risks
Examples are RMB devaluation, trade wars affecting China revenues/investors’ perceptions, China country debts, poor investments made in Media industry.
We know Alibaba is not directly affected by US tariffs (due to revenue largely coming from China) but investors are fearful of how China will be affected as a whole.
Cloud computing is still at a net loss despite its exponential growth.
I was lucky enough to be presented with share prices below the one I have sold previously. (so it is similar to not having sold my initial stakes. Such chances do not always appear).
Anyway, my current exposure is not huge to boost about. Time will tell if the small risk is worth it.
With the downside risks presented in the world, I am switching over to the defensive. It may be a time when doing less is doing more. (time spent on stock search can be minimized due to most companies being somewhat cyclical)
Recent Actions: -Stopped loss on Alibaba at around USD 144; I would take it that losses are taken from previous profits and admit my mistake of owning an overvalued company (who says bloggers only share on their profits?) -Took profit on Sandfire Resources as mining industry is partially cyclical -Added second batch of SSB to build on interest ladder and may continue to do so -Added back Wilmar. It is defensive but I dislike their high debt levels.
Let's wait for 7 more days to see how the market react to US mid-term election to decide on what to do next.
I am currently halfway through the book: The Millionaire Fastlane. It is quite interesting and it changed my view on entrepreneurship.
Its philosophy is however the opposite of many other gurus' as it discourages the norm of saving and investing (buy and hold). The reason is that these actions require us to sacrifice many years of our life before we have a chance to become millionaires. And usually, saving comes down to becoming misers and having a mediocre lifestyle.
From the book, there are three types of people in this world:
Sidewalkers: People who lives a day by a day and tries to consume as much income they have and may even go into debt doing so.
Slow laners: Those who work (be it employed or having a business) and uses the market as their income accelerator. When slow laners become millionaires, they are plagued with old age (probably with poor health) and are "nearing death". Though slow laners are better off than sidewalkers, it is risky to lead such life because many things are dependent on Hope. For our plan to work: We hope to be healthy, we hope the market will be merciful, we hope not to be retrenched. However, hope is not 100% and it is risky to depend on it.
Fast Laners: Those who take high risks in building businesses that produce explosive returns by selling to many or by selling off the business for millions. And for this to work, the business should not require our constant involvement to produce revenue. These people gets rich when they are young and are producers instead of consumers. Time is on their side as they gained freedom young.
While I am sharing his ideas, it does not mean that I fully agree to all that was mentioned. Of course, everyone wants to be a Fast Laner but it is not for everyone. One has to quit their job, and success is not guaranteed.
Away from the serious talk, I am finally going for my overseas holidays after almost a year in Singapore. Traveling is fun but always tiring and a hassle. Understand that most people will need to travel at least twice a year to be suffice but it is really up to individuals. They are also some who can actually bear not traveling for a year or two. Which type are you?
Anyway, it is time to enjoy while I can before the wedding preps and the busy new year ahead.
I have just added Associated British Foods (ABF) from the the FTSE 100 Component into my portfolio. This is the name behind the budget retailer Primark, the Twinings English tea and the famous Ovaltine drink. It is a conglomerate dealing with 5 main business segments: Sugar, agriculture, ingredient, grocery and retail. While I am aware that Brexit decision largely looms and ABF is exposed to its operations in Europe, shares are selling at a compelling price after my due diligence. Over the years, revenues and dividends are rising while debts are well managed.
In any bear case, there are still dividends to collect and I can even add on my stakes. Like Unilever, IFF and Wilmar, it is a known consumer defensive.
In the same week on Friday, I sold ST Engineering and took profit. My action does not imply a guess that it will not continue higher. It may be the right time, or it may be too early. This brings to my portfolio update:
It is funny realizing that I did not invest in any US based companies at the moment while there are a variety of companies from different continents on hand: AU, UK, CN and SG. Alibaba is not considered US based but only US listed. Probably the rationale in my subconsciousness is, US companies are still expensive after the long bull market.
Back to personal life, I have been feeling dreadful about work lately even before reaching the age of 30.
Work means 5 days of repetitive lifestyle, multiplied by about 4 times per month. Spending time with family, gaming and watching TV shows are things I do when freedom is present.
The stress, boredom, fatigue, politics and work related expenses which we face all adds up to the importance and motivation of getting to our financial freedom.