Tuesday, July 29, 2014

Random thoughts: 35 years has passed...

Just celebrated my birthday yesterday. Yup, it is on the same date as Pusa. Gave me plenty of time to meet up with friends.

When I am at the KTV, my friend asked us:" Do you still remembered what I said was my dream when I am in secondary school?" I remembered doing the same email exercise when I am in university, one of the those silly email survey. It asked me to visualize my life when I am 60 and old...

My friend's answer: to be the best available bachelor, driving a car, enjoying life. He then laments about family life.

My email answer: A lonely single old man, without a loved one, most probable having company with a pet dog.

Both of our realities are different now. Although I might still be lonely come 60, but it is not like I could not find a wife. Yeah, I was so clueless or luckless with relationships that I thought I will never make it...

Another secondary mate wished me 35th birthday through whatspp. I replied: Thanks, how time flies. He agreed, and said its scary.

Looking backwards, many of our "visions" did not pend out, isn't it?

When I am in university, I write poems, talk about philosophy. I thought maybe that will be how I hitch my girlfriend. In reality? LOL...

How about making a projection of amount of money you will have when you are 55? How about a growth compounding rate of 6-12%, whichever you fancy. Its great to envision, but live your present to the fullest now. You might not give a hoot about money when you reached 60...



Saturday, July 26, 2014

Random thoughts: My mental journey with Parkson Asia

Ok. I feel guilty as I penned this.

Remember I blog about Parkson Asia. I bought at 86 cents. I believed it can be a grower. Some short term pains perhaps, but a longer term good company.

When the company fall 4 cents in a single day, from 86 cents to 82 cents, it scare the shit out of me. The dividend yield of 3 plus percent did not provide enough painkillers effect. I sold out.

It became clear, that physiologically the 4% lower limit dividend would require a price of 75 cents.

It hover above 80 cents for quite some time. I key in an alert for 78 cents. It was breached quite soon.

Volume was extremely low, so when I have to make a decision to queue at 74cents or just get it for 75, I choose the later.

Of course, the price went south further. This time round, my mental model is vastly different. The conviction that it's ok, just wait is loud. In fact, I always tried to buy in tranches, I am
Looking forward to get my second tranche with the announcement of FY results, if it disappoint. 65 cents would be the next entry point.

Do note that I am not talking about the merits or lack of in this investment. I am talking about sticking to my plan allow me a piece of mind, and hey, 86cents and 75 cents is not a lot of different given the small amount of shares I bought. But it is a world of different mentally. I now know what I would do to approach other growers theme.

The story remain the same. High cash level, 24 cents per shares will allow it to be in net cash position as it expand aggressively, since the asset light concessionaries model is highly cash generating. The cash level will go down definitely as it expand, and if the gestation period of the new stores take longer, then it's attractiveness will be further reduced. But will this company go the way of loss- making? Highly unlikely as the home turf Malaysia has the biggest share of revenue.

Story the same, but mental strength different, because of the uncertainty of not following my own plan. The earlier is panic and unsure, this latter is calm ... Until the next storm

Friday, July 25, 2014

Random thoughts: To copy or not to copy

I remember when I was in secondary school, my CCA took up a lot of my time. For 4 days a week, we trained after school till around 7 p.m. (I am not kidding), and for days without my CCA, I would go play basketball or videogame at my friend house.

There were times when I could not finished my homework. In fact, although I was in a top class in a very "neighbourhood" school, none of my classmates except the girls were hardworking. So what did I and my buddies do? We copied the girls' work. When the girls couldn't do it, we told the teacher to go through it.

That is why I find it bewildering so many have problems handing in homework after all the scolding, meeting of parents. Talk about creative solution.

When we copied, we copied and tried to understand, it is actually a short-cut way to learning, the girls didn't seem to mind then, so kind and innocent. We laterally formed copy groups. We did well in our exams. Heaven is blind? Did I hear you say?

When I went to junior college, which I never thought I will make it, I decided to "turn over a new leaf" I stopped copying. I insisted that I do it and learn it the orthodox way. My grades suffered greatly, whereas my friend simply continued to just listen and copy what the teachers write on the board, I tried to figure it out myself, ended up I learned less than my friend. I am too stubborn for my own good. I couldn't figure it out and didn't concentrate when my tutor is re-teaching, double whammy.

It is much later in life, when I heard the concept of copyright. Nah, you cannot take the shortcut, the creators will eat grass. It is the case for some start up, for big corporation like Disney, the copyrights allowed them to eat abalone every meal.

Now, come to trading/ investing. There is no copyright issue if you just buy what Warren buys, or what you favorite "zai qiu" (steady)blogger buy. There is no issue of copyrights.

Convention wisdom says, do not copy from others. There are good reasons why. I took such a long time to figure out the balanced way.

When we are in school, when you copy, do you copy from a single pupil or from many people?

Do you copy all the questions and steps or do you cherrypick what you want to copy?

Do you skip steps/workings unless you totally understand how it work?

SO you copy from a guru, scholar, or do you copy from someone who you know is smart enough to get the answer right and will not "bao toe" (betray) you if you are questioned by the teacher for copying. "We discussed the question and did it together" will not work if you copy from an guru.

Do you insist on DIY on every piece of homework, thinking self-discovery is the only path to learning?

Do you copy every homework? Or you copy when you have difficulty managing your time, and have difficulty in certain topics. Do you understand what you are copying?

Apply these to investing, do you see some similarities in the universal rule of copying? Seem like I am more intelligent when I am in secondary school. hahahah

Wednesday, July 23, 2014

Random thoughts: My new workplace

Given that I am still in the same sector/ industrial/ department. I always thought how different can my new workplace be. I also mentally prepared myself that since I decided to step out of the comfort zone on my own, even if I leaped into a sea of fire, I will just have to learn to survive in the sea of fire.

How wrong was I.

It is so refreshingly different. Given we have the same goals, targets and outcomes for the sector, I am rather surprised of the amount of free time I have here. I even have the time and energy to buy a new book "the 7 habits of effective people" to read. I know 25 million have read it, but better late than never. 

My new boss told me that she arranged it that way so that I can ease into the culture and not be overloaded at the start point. I appreciated that.

What I appreciated even more is how close we are at the core of our business here. I really feel like doing what I am supposed to do when I signed up for this job at the first place. And my clients? Wow, I didn't know clients can be so different too. I love them. Innocent and pure. Perhaps not as achieving as my previous workplace, but hey, this is just the very beginning of their journey, who says a head start means you win the race.

I also felt nurturing as a supervisor, first time in my life. Although I do not know if the feeling is mutual, or they detest my style, at least, here I go to the "worksite", observe the work processes, gave honest and sincere advice. I feel they appreciate it too. In the past, I am so busy at my own worksite, that I do not even have time at my office. 

The tough part is the system overhaul that I see will come soon, and the retirement of a competent senior staff. Lets hope I learn enough before she leave.

I set goals to achieved all that I wanted during this window, at least as much as possible, so that when the mad rush comes next year, I will not feel a tinge of regret. I certainly hope I will be able to drive at 4th gear or even go into overdrive when the need arises. I am afraid my engine will fail me since I am now only driving at third gear.

Other intangible benefits include more patience at home, and  energy at home. Life should be like this. The ying and yang. My past allowed me to enjoy my present. So if future turn sour, this it has the potential to improve. 



Thursday, July 10, 2014

Random thoughts: My route to Rome

There are more than one route to Rome. I think I have found mine. I am not sure if it lead to Rome, but I am quite sure I am going to take the path.

One paradigm shift:
Stop worrying about the value of my portfolio. Not that it is not important, but the cashflow of dividends and the robustness of underlying business is more important.

Second shift:
Only look at companies with yield of at least 4%. If u expect growth, 4-5% is ok, if u expect flat or zero growth, at least 6% will be appropriate.

Third shift:
Only buy companies that will survive the next downturn and emerge stronger. Trading of companies that are mispriced is permissible with 2 years horizon. Expect such counters to never recover, and be ready to take the risk, and be nimble. Such counters should yield more than 8% to justify the risk.

4th shift:
Do yearly reinvestment of dividends, there is no need to time the market for correction or bear.

5th shift:
Other savings go into cash. Only invest further with new capital injections when cash form more than 40% of portfolio, or
When market correct 10-15 % ( 30% of cash can be a activated )
When market correct 15 - 25% ( up to 60% of cash can be used)
when market correct 30% - 40% ( Up to 100% of cash can be used)
When market correct 40-50% ( cash backs savings from 2 of my endowments plans can be used)
More than 50% ( CPF money can be used )

Keep expanding radar...