Wednesday, August 24, 2016

Random thoughts: Caught between a rock and a hard place?


Chill, this is not as serious as the heading suggested, ok?

If you are pragmatic, pursuing FI and generally frugal, but your wife wanted the finer things in life, something along the line of 5C, what would you do?

I guess depending on the threshold and how big is the gap, everyone's answer will be different. I guess not many would allow the family fiances go into ruin by living like there is no tomorrow. But how about taking a loan to live in a private condominium? How about a maid? A car? Annual overseas trip, best enrichment classes for children.

I felt very blessed that my wife did not ask for the sky, but I would definitely prefer to save more and live maybe another one of two notch below my means? So, is giving in to your wife necessary means you are throwing cautious into the winds?

I had my quarrels, so here is just my personal sharing of Dos and Don'ts.

Don'ts

1) Don't raise your voice when talking about money matters.

2) Don't tell her you know of a blogger AK that achieve FI below the age of 40, and how inspired you are by him. (You can be inspired but don't expect her to be)

3) Don't expect mountains to shift in one night

4) Don't expect her to give in all the time

Dos

1) Do show her how tight the fiances really are. (Provide breakdown)

2) Do give in whenever possible, hey, you married her to give her a good life, remembered? You said that in that vow, material satisfaction is still satisfaction.

3) Start changing your habits first. Stop taking your starbucks coffee, stop taking cab, buying comic, etc. Look at your favorite PC game flashing outside that shop, and talked about the storyline, the gameplay, how it has accompanied your childhood. If she said the magic word "buy", you strike lottery, and say, "Its Ok, I rather save the money for the family"

4) Give her more control over "assets", sense of security is precious. You will be surprised how often women will say, "Its Ok, thank you" when you offer to pay without her asking, and asking if she like to have something without her even looking.

Of course, we all like to be in those drama stories, where we all suffer together and then later, because of your frugality and hardwork, you achieved FI and can live like no tomorrow, you think she should also have delayed gratification so that both of you can have a bigger pie later on in life.

Good for you, I live by the day. Thank you





Recent action: Bought Singpost

Just a head up.

Singpost fell in higher volume today. Guess Alibaba might finally decide no deal for venture of Quatium Solutions? Perhaps the next CEO also ran away? LOL

I believe Singpost can grow earnings by 10-20% over the next 2 years, with or without Alibaba. Of course, a JV with more capital injection is welcome. With Alibaba, it might grow at an higher end of that range. 

As mentioned in previous post, logistic is the crown gem.

Quarter to quarter, they might not be doing well. But it is growing ok YOY ( seasonality is a factor). December is the peak period and a weak Q2 should not be over-extrapolated.

SP mall will be back in operation soon and the omni channel will be the next frontier to be fought in e-commerce and Singapore and Singpost has first mover advantage in SEA.

I might be wrong, I have no insider information.

Again, the tactic is simple. Buy small, start small and if it falls, buy again. 

The next 2-3 months will have plenty of market moving news.

Appointment of CEO, even the non-appointment of one after the acting CEO assure investors it should take place this year will be a mover.

The review to be taken by the new team, including dividend payment sustainability 

Alibaba's commitment or lack of, to grow its presence in SEA through Lazada and Singpost or with Lazada only. 

Have fun, get ready for the ride. 

I didn't even go into Fed ...  


Friday, August 19, 2016

Random thoughts: did what I want, without FI

Yesterday was kind of memorable for me. 

Before that, I was very busy at work, overseeing a lot of responsibilities for the first time. I was very kanchong as I was afraid of not doing it well. Maybe it will affect many people, and some people rather drastically if things dun turn out well, I did not sleep well for the past 1 week. Yesterday was the last day, it was a load off my shoulder. 

I took "leave" from my wife, spent a longer than usual time with my dad at dinner, and did night cycling with my friends. 


We call ourselves the uncles riders.

We were chit chatting how long have we not cycled, and I realized it has been more than 4 years. 

As we cycle along east coast, I enjoy every moment of it, and felt young.

The beautiful full moon out at the sea.

The amusement of seeing so many people, adults included playing Pokemon go.

Didn't know I could ride to Marina Barrage from east coast. It was a beautiful place, beautiful view. 


The weather was cool, not too humid with the breeze making me feel refreshed.

Didn't know cycling felt so exhausting. I am indeed turning weak. 

Although physically tiring, it was mentally liberating. 

Little pleasures in life. And the tough week prior to that is the icing of the cake. 

Saturday, August 13, 2016

Random thoughts: Order of importance


Words are important, it is a tool of communication.

But, while what is said is important, what the speaker felt is even more important. 

While what the speaker felt is important, how you feel is more important. 

While how you felt is important, what you do about it is more important.

While what u did is important, how convinced is your actions is right is more important. 

While being right is important, how it achieved its intended consequences is more important. 

While achieving is important, how it can be sustained achieving is goals in the long run is more important. 

When you understand what is most important, you no longer get bothered by the words. 

Who is bothering you? I, myself or me?

Not the above? 

That's a lot of people bothering you man!

Recent Action: Yangzijiang

"I am a poor Poker Player, I let people know my move. LOL"

"I am also inconsistent, since I was just blogging about restraining my buy"

Hey, Rolf and SMOL, see I preempt your poking first. See how I see you up up and even before I pen anything down, I thought about your reactions.

OK, enough bullshit.

While the STI is showing plenty of resilience, Yangzijiang is falling.

Plenty can go wrong with YZJ.

It can suffer a double whammy, HTM turn sour and the lower Margin of shipbuilding is already playing out. If you google HTM or more macro... there is plenty of articles on the bad debts of China and how YZJ will have to write down it HTM

First of all, let me say I just bought at half of what I would usually buy, so that I can reinforced it 60 cents. I look at YZJ by the business rather than numbers.

That it is a alpha shipbuilder is not in question, of course the reason why it is alpha has also got to do with its strong balance sheet which is helped by HTM. You can't take that away for better or worse. While they have been reducing their HTM, this latest quarter show an increase in HTM assets and more "government-linked" projects. This is my story:

Government is twisting YZJ's arm in the restructuring of shipping sector. The bad debts restructuring of yards, should be transfer to its new investing company in which it had an 11% stake. It is for the private sector to share the burden, but some sweeteners are also given, such as the first building orders from SOE.

The risk of this company going bad is not low.

So what is the meat to invest? YZJ is going up the technology value chain. I read shipping news at least weekly, way before LNG and gas carriers are the "in" thing, they are already claiming their ambitions in this sector, the same with large containership, etc. In short, they read the industry very well, also restricting that rig building to only 1. (Now laid up in Tai Chang yard, might not be delivered in the end.)

Second, they have been shareholder friendly. Dividends at 30% payout since IPO, I expect dividends to be 3-3.5 cents this year. But it is still a decent 4% as I wait for the upturn. There is also no fund raising yet.

Third, the shipbuilding cycle is at its bottom. No one knows how long more it will last. But it has been around for more than 5 years, and when the 3 Korean Giants who are all market leaders bleed big time, and that China has only 70 yards in the white list, and according to Yuan going to be only another 35 going forward, we know the sector is in doldrums. YZJ have at least 1.5 years without any orders to continue to keep its yard busy. Cancellations risk not accounted here.

Fourth, reward is reasonable high.

Fifth, Ren's leadership. His son is already COE, although he is still clearly in charge. Succession planning anyone? He is candid, not shy from admitting his mistakes. With government's arm-twisting to invest in RongSheng, he managed to say "Not yet", and "No" to more rig orders. Everyone can say HTM will blow, it might, just like DBS also got a big slap in the face. I will not underestimate his ability, there is already impairment done for HTM, my take is when his HTM blows up, China Banks will also blow... It is not going to be nice wherever you are...

Conclusion:

YZJ is not your bao jia durian. Its valuation is attractive for a reason. It is risky.

It is a risk I will take.

Wednesday, August 10, 2016

Random thoughts: All that I did not know about Singpost

This is a random thought series. No numbers or valuation call. 

I was rather intrigued by Singpost business, creating an Eco-system to feed  into logistic. Singpost aim to be an e-commerce logistic player, many forgot the "logistic" behind the equation. But here goes, what I didn't know, or cannot confirmed till now. I was very intrigued reading the annual reports of Amazon, and EBay, and Internet rocket, the owner of Lazada which Alibaba bought a stake in.

1)B2B, C2C, B2B4C? = SMS?
 In E-commerce there is B2B, C2C concept etc. Alibaba's Taobao is kinda of C2C, consumer to consumer. But I guess the Giants like EBay, Amazon are all BC2BC all rolled into one (my own understanding). Isn't alibaba too? Consumer and Business, the line is not that clear if u ask me.  

Singpost claim it is B2B4C, it makes me think which company doesn't provide the logistic support, either through in-house capabilities or through 3-party, so the 4C is hardly important, in my sense.

2) e-commerce and marketplace
 I didn't know there is a difference. Ecommerce, you owned the inventories and if successful, u have a higher margin of return, marketplace u just get everyone in as the middleman, so you need volume (much more than e-commerce) to bring in the tilt. Singpost, Taobao is defintely more/ all marketplace 

3) e-commerce start-up keep burning cash for a long time

I read that Taobao was cash burning for a long time, not sure if it has already turn the table. But Internet-rocket has a stable of online companies, almost all are unprofitable in the 3-5 years in operation. Lazada, food panda, and all its subsidiaries etc, while market leaders, are all unprofitable. 

My own understanding is this:

Ecommerce is the bait, the many money spinners are actually something else. Alipay for Alibaba, Logistic for Singpost, Venture capitalists for Internet rocket.

5) Beside scale, products and consumers' experince count

Amazon annual reports are really good read. I always think of scale as a crucial factor in ecommerce. 

They talk about speed of delivery, in-house products differentiation (shows), etc. 

It also talk about Coporate culture, which is really enlightening, taking risk etc. The "consumer experince" part is not something I keep hearing when I read about Singpost. It seem they are more focus on scale and variety of products.

6) omni channel marketing 
Jagged peak omni channel marketing technology is touted as one of the reason  why it was acquired by Singpost. I just realize it means merging of online-offline retail experince through multiple e-platforms.

It's an important piece if the SP mall at paya lebar is to be successful.

Conclusion:

I am writing to summarize what I read so that I can crystallize my thoughts. If my info is inaccurate, I stand to be corrected. 

I mean I now see Singpost through more facets other than "Alibaba's Magic", which is the much touted info by analysts after its corporate governance issue.

I also have more opinions on the reports by analysts instead of taking them wholesale. For one, I do not think Alibaba will give up Quantium Solutions through Lazada. I think "consolidation" is going to be theme of big players, the smaller players will hope to cash in by being "absorbed"

I am not saying that Alibaba's investment will go through, but I don't think the main determining factor is the competition of Lazada

The acquisitions of 2 small US e-commerce companies also made more sense now. US is one the biggest e-commerce market in terms of product offerings, it cannot be a missing link in Singpost's offering regardless of how stiff the competition is.

But I think the acting CEO is stretching it when he said it allowed Asia pacific customers access to US and vice versa. I don't really think US consumers need anyone else beside EBay, Amazon to get anything from the rest of the world. (With the exception of China perhaps) 



Friday, August 5, 2016

Random thoughts: overcoming the urge to "buy"

Regular readers would have know that I kaisi and sold quite a bit of shares immediately after Brexit. Cash is now about 30% of my investible fund. Usually, I would be "dying" to replenish my portfolio to maximize dividends.

Surprising, my Emergency fund and my investible fund is both at my "historical" high, I would usually have a hard time keeping my hand off trigger, but this time now, I am really quite restrained given that I am looking at several counters that I have researched on earlier. 

So what cause the change? 

Laugh, it's because I have been reading SunTze War Strategies, both Sun Tze and Sun Bin's work. 

Ok, this is a random thought series, move on now if u are Into financial stuff. 

Despite my hectic work schedule, I have been reading 2 books on and off. The first is "Alibaba" and second, Sun Tze War Strategies.

Initially, I read just the online PDF version, it didn't give me the kick. So I borrowed the book version where Sun Bin's version of the "science" of war is also included. It is more specific and elaborated. 

It was a very engaging read as compared to when I was reading it during college days, because i saw a different dimension to the theories. I keep trying to find parallel with the investment world. 

Even when I was reading how Alibaba killed off eBay because of its "complacency", I can relate to its concepts of war. The fund raising strategies etc, keep ringing parallel, it's like reading 2 books at the same time.

I used to think of money as "soldiers" and counters as "territories" that offer dividends or capital gains. 

Slowly, I began to feel that money are soldiers but counters are "generals"

That go hand in hand. 

The tactics, the overall strength, the wealth etc... 

Everything I feel like buying now, I got this nagging feeling, 孤军无援。No reinforcement. 知己,I realize my annual injection of capital to this investible fund is really small, maybe just 10K a year. How do I hold and defend my territories, how can I support my "generals"? 

Also, I keep asking myself, how confident am I in making money out of this? I am no longer so gung ho. 

Also, I start to question how much I might "win" if my assumption is right, and how much I am willing to "lose", the win lose profile do not seem very favorable except for 1 counter. 

It seems very silly on hindsight that I am willing to take 20-30% profits with also 20-30 possible loss. Where is the meat to risk the "troops"

I also look at business at another angle. I see the management as really part of the business, and begin to really appreciate that business even with the low profits at the wrong cycle. 

I start to look at the elements of victory, such as timing, terrains, formation, etc and I felt very inadequate that all I have is perhaps using "timing" and "terrains"

I do not have with me the tools of "mass destruction" aka fire of leverage, my formation is perhaps only 1 type, but I do have my empire behind me. (My wife did not oppose to my investments)

So I decide to be very selective in my battle. 

Sitting on cash used to be very bo Liao, as there is nothing to blog about, but now, I keep thinking of "养兵千日,用在一时” (same as Buffett's swing hard once for home run)

The irony is, I also felt less motivated to share what I think of an business, of course I know how I feel does not "move"
Market, but I somewhat feel that the least people talk about certain angle of a business, the better, at least before I buy the company. 

Ok, enough bullshit. Thanks for reading.