Happy Chinese New Year

Happy new year to all my friends and readers!

2 pictures I found most interesting :

 

 

May you have a prosperous year 

1st guest post from Ted of Redbrick

I receive no rewards/ compensation of whatsoever from this blog post. My intention is simple, someone ask me for help, I help.

Red brick, is talking about HdB loans options. I do not see how providing convenient to Ted in this case can anyway turn out detrimental to my readers and I believe the info might be quite useful.

Again, I emphasized, I do not endorse anything and receive nothing in return. 

Here goes:

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Buying a HDB flat for the first time can be an intimidating experience. It’s probably the first big ticket purchase in your life that will take the next couple of decades to pay off, so you’d definitely want to rake in as much savings as you can.

 

Perhaps you have not really thought about what kind of loan to take up. If you don’t already know, you have a choice between taking up a HDB or bank loan, as long as you are eligible for them.

 

You might want to hold on to your cash and pay off your home loans using your CPF, but did you know that taking up a bank loan allows you to pay less interest? This is because bank interest rates are lower as compared to the CPF Ordinary Account (OA) interest rate which home loans are pegged to. 

 

And while the down payment required to take up a bank loan may be higher – at 20%, with at least 5% paid in cash as compared to 10% with a HDB loan, fully payable with your CPF –you get to enjoy greater flexibility in retaining your savings in your CPF OA. Conversely, upon the collection of keys to your new home, HDB will wipe out your CPF OA balance to reduce the loan quantum required for you to service.

 

In the following infographic, we run through the main factors to consider while taking up a home loan for your HDB flat, and the main differences between taking up a HDB loan and a bank loan.

 

To find out more about taking up a bank loan vs. a HDB loan, refer to our full guide at http://www.redbrick.sg/blog/home-loan-singapore-ultimate-guide/

 

The team at Redbrick Mortgage Advisory has more than 60 years of banking experience and is proficient in structuring and sourcing for the best financing terms for both residential and commercial real estate in Singapore, Malaysia, USA, UK, Japan, Thailand and Australia.

随心笔：谁是你的伯乐

我们都想遇到伯乐。

但是，如果我们不是千里马，

遇到了也没用。 

世间上有多少伯乐？

有多少千里马？

相遇的几率并不大。 

别再感叹，

志在千里。

别再感叹，

自己不是驴。

真的千里马，

也是好驴。

等着吧，忍着吧。

我不是千里马，

所以我容易遇到伯乐。

我是驴。

你叫我背，我就背。

你叫我跑，我就跑。

你叫我游，我也会先游。

若有一天 ，看到新主人。

我就跑。我就逃。

我不是千里马，

我是自己的伯乐。

Coporate announcement: Portfolio update

As mentioned during the annual report of Sillyinvestor Inc, we will continue to trim our portfolio to hold more cash as and when opportunity arises.

The management does not think there is anything fundementally wrong with the company. The privatization of parent company is just noise. 

With a holding period of 15 months, the return has been 16% including dividends. We feel it is a fair return as we await opportunity.

The management want to take full advantage or a bear/ correction as and when it happens. Management believes it should not need to wait more than 2 years. yes, we are attempting the impossible, trying to time the market. 

In the 2 years, there might be opportunity loss in holding cash, but management is trying to press the reset button on its investment.

There is unlikely to be further selling in the portfolio as the company is already 50% cash and this ratio will further increase with injection of capital soon. 

However, if there is any counters hitting or nearing targeted sell price, management will sell too. But with current prices, management think it is unlikely it will happen soon. 

The vested equity portfolio value has fallen to 43k as a result of the disposal. But total portfolio value including cash has improved to 85k. 

Disclaimer: Readers are advised against taking the coporate actions as any advice for buy or sell, either as a follower or contrarian. 

Statically, you stand a better chance as a contrarian though. LOL

随心笔：重来

我们有多少次机会重来，

或者需要重来。

重来不是改变，

因为没东西改，

没什么可变。

什么需要重来？

当情况已无药可救，

当一切才刚开始，

当危机就在眼前。

但是，那些走得很远的，

重来谈何容易。

重来，就是放下一切拥有的。

重来，就是承认自己错了。

不过，那些走得很累的，

重来可以是轻松的。

重来，让你拥有新的一片天。

重来，再走回一样的路？

我们每天都在走一样的路，

还重来什么。

Random thoughts: Annual Report 2016 Sillyinvestor Inc

Chairman statement: 
Dear readers, the theme in 2016 is surviving in a volatile world. There are 2 shocker news: first Brexit and next Trump's election. But the market survived and blossom.

We are proud to announce we have grow from strength to strength. The company manage a dividend of $3849 in 2016, from a capital base of about $57000, giving a yield of about 6.5%. This is a 2.5% improvement in yield and 40% increase in dividend.

However, trading profits is flat or negligible. The small profits in 1H was gone as we increase cash by taking a loss of Lippomall.

However, as compared to a year ago, where the vested amount is 15% lower than market value, we now have a equity portfolio that is 3% in the green. As mentioned in 1H intern report, we are going to include cash in the calculation of our portfolio. Hence the total portfolio size increase 13% to 85K, where 35 K is cash.

As a result, there is a drag in total returns over total asset, which is only an return of 4.4%. The return of STI's dividend yield better at 6% with the STI asset value flat. While we did better and improve our performance compared to a year ago, our performance is sub-par and we will continue to improve ourselves.

Outlook:
It is the management's wish to be conservative in the years ahead. We do not buy Trumpocomics. We believe there are many perilous moments in the calendar 2017. We might further increase cash holding beyond the optimal 50% if the price is right for us to further liquid our portfolio. Beyond heightened political tensions, possible trade conflicts, and terrorist risks, the fate of Euro is a question mark if we look at the coming elections of major Euro countries. Of course, we do not pretend to know how the market will react to these event, just like the market rallied instead of falling post-Brexit and Post-Trump.

The sponsor and founder of company, greenrookie is confident of cashflow, pending unforeseen circumstances, and has pledge to continue with cash injection in 2017. As and when it happens, the company look forward to manage the expanded portfolio but will conservative in the deployment of cash into equity.

Appreciation to readers:
This is a year of readers' activism. The management met up with several bloggers and exchange various investment views. Hence, the management has decided to declare a maiden "coffee treat" to future meet-up, if any. Although management is on course, he might be able to do Wednesday or Friday lunch at the Jurong area from 1230 - 2 p.m. LOL.

Operation review:

Dividend chasing:
While the management's main focus is still dividends, management will not hesitate to sell off profitable companies. The worst performing counter is still Sembcorp Industries followed by Lee metals. The best performing counter is Venture.

CM pacific is privatised, and we added YZJ and SIngpost to our portfolio. We view both counters to be company with growth potential for different reasons.

Trading:
We sold M1, Lippomall trust, Sembcorp Industries, ST engineering and Silverlake axis for varying loss and the gain came solely from Cogent, excluding the privatisation profits of CM pacific.

Online Advertisement:
It finally crosses the threshold of $150. Company see this segment as negligible and might stop reporting its numbers. Although readership has somewhat increased compared to a year ago, the company see no future growth drivers in this area since the management after much deliberation has decided to reject attempts at affiliation links.

CSR:
There is no difference to the beneficiaries we are adopting and the sum donated remained the same. With the change in credit card, there might be some temporary disruption to Sasco

Financial statement:

Footnote:
Nil

Random thoughts: Becoming a student again

Today, as I drive past NTU, I saw the path which I used to jog, saw the Hostel that I used to live and felt like crying. A bit emo, but don't ask me why. The memories just keep flooding back.

It is just a week, and I think I am a even hardworking student than when I am a undergrad. LOL. I really miss the reading. I went back to level 4 of the library, sit beside the window, the actual spot where I used to mug for exams. I already read 3-4 books although I did not completely read them.

Walking around the campus, it didn't change much except for the spanking new F&B block near block 1 of NTU. It is really a time to "smell the roses". Nope, I didn't actually have more time at hand, I still did some work at night, but there is minimal stress.

It felt like it was only yesterday that I was here, but when I look at the pupils at NTU, I thought: how good it is to be young. I am not so sure whether it is coincident or what, but the conversations that I overheard seem to always revolve around money, the salary or the expense or cost of this and that. Didn't remember doing that when I as studying.

I meet aspiring teacher and downright incompetent ones. LOL My teacher could not take off his jacket because his there is degeneration of tendons, yet he teaches passionately.

I miss my pupils quite a lot, but really glad I need not be caught in the scary typhoon of work.

One of these days, I must go eat swensen and enjoy the student's discount! LOL

 

Random thoughts: Risk-reward profile by considerations and assumptions.

I am sometimes able to draw parallel in the investing world with teaching and learning. This time round, it is the reverse, I draw valuable insights from teaching and learning that can be transferred to investment.

We have a module on reflection, and suddenly I realize in investing, we made many considerations but seldom do a check on our most fundamental assumptions.

Let's do this:

I consider 

1) YZJ to be a cyclical play.

2) it to be a alpha company that will gain when turnaround happens.

3) it to be reasonably financially strong, unless u totally discount HTM (low debt)

4) it to be a good dividend payer as I wait. (About 4%)

5) the downcycle to be at bottom although I have no idea how long it will last. (Companies went bust, scrapping on ships increased, rates bottoming out) 

I assume:

1) That the turnaround will come and YZJ will benefit

2) The HTM will not turn sour 

3) I am steady enough to av. In when it falls 20%

4) I have the cash to invest further in this counter

5) It will remain profitable even if profits falls.

6) Falling profits will not cause a plunge of share price beyond 30% 

Of the 6 assumptions, I realise I might not be able to do point 4) since I am only 40% cash and if I double down on other down beaten counters. 

(Highly likely)

The turnaround might never come, or when it comes does not benefit YZJ operations or shares price. 

(Unlikely) 

HTM turning sour.

(Likely)

Fall In profits leading to plunge in price

(Likely)

Thinking through such risk and assumptions thinking, it made me wonder what returns is fair enough to take this risk? 

40-50%? I think it's possible. If we take reversion to mean of 5 cents dividend, and a fair yield play of 5% with prospect of dividend growth, $1 is not an demanding valuation with P/B still below 1. Note that when turnaround happens, earning should improve beyond "mean" and the ships valuation will improve too, further depressing P/B to our favor. YZJ payout ratio is historically around 30% although Ren hint strongly it will increase it this year to maintain a decent dividend yield. 

In terms of operation capabilities, they have scale up the tech chain successfully so there are plenty of market segment where YZJ can tap on. 

Then, how about down side?

It makes me wonder what amount of loss is enough to throw in the towel, and what should trigger that call?

The best scenario is price go down around 20%, I accumulate and it rebound. Possible gain, assume this happens - around $3500

The worst is it went down 20% and I accumulate and it went further down 10% and I cut. Loss will be around $1200

This risk reward profile is good enough for me. 

LOL. Sorry I dun do numbers crunching. This is random thoughts series, when u expect 

Singpost: 2nd catalyst and 3rd catalyst

Singpost has found a replacement CEO. 

This is a CEO with operating expertise in logistic and freight forwarding. A timely change as it move to synergied its accquistions. With this CEO, I hope this pace of accquistions will stop over the next few years. 

The second catalyst has happened. Market is not excited, but at least not disappointed. Singpost has risen intandem with the market 

The third catalyst, will be out in 2 months. Alibaba has a record sale during Nov 11. Amazon also had record sales.

If u read their analysts meeting notes, Mervin has always "hint" that the loss making accquistions in US is for the longer term, and particular the holiday season is often quoted as an opportune window for  ramped up businesses activities.

How much synergy did the alibaba and Singpost alliance bring? Let's explore the following possibilities:

1) Top line grow in high double digit figure and bottom line is in low single digit QoQ, YOY

2) Top line grow in high double digit figure and bottom line is flat.

3) Top line grow is single digit or low double digit and bottom line is flat or reducing 

4) Top line and bottom line both deteriorate. 

Market will only take scenario 1 or better (both high double digit growth) as a positive calayst.

Scenario  2 will most probably cause some downward pressure but I believe it won't be a heavy sell-off. 

A sell-off will most probably happen if scenario 3 and 4 happens.

Personally, If 3) and 4) happens, it's time to say bye bye. Why?

The Singpost logistic hub which is "supposed to" be more productive is up and running, the capex for this and also the Singpost Mall is mostly spent. 

Demand side, Alibaba is doing brisk business globally and SEA is growing too, these revenues should flow through Singpost's avenues. 

If 3) and 4) happens, I can already predict their explanations. They will be 

1) NP affected by loss of revenue from SP mall which will be online soon (who dun know, stop harping)

2) Their acquisitions are for the long term, and their costs management is US entities has ballooned. 

3) Need more investment to able synergy to happen (huh? Then when will u start to harvest? ) 

Personally, if the fourth quarter is no-go, due to whatever reasons, I think I will start to doubt their execution capabilities.

I am penning down so that I dun give myself excuses when it is time to cut loss/ take profits. 

If scenario 1 or 2 does materialize, then I will go on to wait for SP mall to contribute. The final catalyst.... 

随心笔：我的家-黄浦路

坐在我前面的老爸，
吃着晚餐。
我好像回到了童年时光。

我已经不住在黄浦了，
还记得以前巴不得早点搬走。
这里是新加坡的穷人区吧？
至少，我是这么认为。
常常可以看到无所事事的人，
坐在一旁发呆。
不时，也会看到一些人吸着烟，喝着酒。

这里有一件很特别的杂货店，
不只买烟，还卖烟草。
烟草便宜，只不过要自己包，
不过对身体多些害处。

这里卖报纸的摊位，
还卖色情杂志，
不过不知道为什么最近没了。

我的老家，我休息的地方。
看着我老爸在咖啡店吃着晚餐，
我并没有做什么，也没说什么。
不过，就觉得很轻松。

我以前怪讨厌这里，
巴不得马上离开。
现在，看着这里，仿佛看到我的“根”
回到“根”是休息的好办法。

这里越来越有趣，
卖酒的大姐还是在和老伯伯聊天，
有时还会有一点的调侃。
不过，坐在这些老贝贝的对面的，
是他们的老婆。

这里的叔叔伯伯，
一起玩乐器，在咖啡店。
有吉他，还有二胡，还有不知道是什么的鼓。

这里，让我想起以前没有的，
让我珍惜现在拥有的。

这里，让我什么也不想，
放空自己，没有压力地躺着。

这里，让我觉得我可以拥有很少，
但是过得很好。

这里，让我少些贪念。
这里，让我觉得自己很贪心。
什么都有了，却还想要。

这里是我开始的地方。
开始，什么都没有。
结束，什么都带不走。
但是我们都担心还没有走时，就用光了。
所以一直要...希望可以用不完，永不完...

这里，让我回到过去，
让我珍惜现在。

这里，心里是清静的。