Friday, April 23, 2021

Random thoughts: No Free Lunch, a good deal will do.

This post is about "free lunch", kind of conincide with SMOL "nothing is free".  I find it cognitive dissonansing that people spend plenty of time searching for the best deal, when I thought a good deal should suffice. Yet the people searching for the best deal, end up spending more than usual. Below are some of the paradoxes I can't wrap my mind around. 

Buying to consume, or consuming to buy

Whenever there is a promotion in the supermarket, I know of someone who will grab it and feel very satisified that they saved some money. Yet, when I ask if they actually use this, they will also be defensive and say that they will surely be of use. So, you are "consuming" something that is cheap so that you can go on "offers" collection spree. It seems counter-intutive to me.

Even if there is no doubts that certain products will be used, are you over-consuming it, simply because there is an offer. Net net, it might seem still a good deal to some, but personally, I consume what I like, whenever I like it, I do not like to buy something to store it, because I knew I would consume it someday, and feeling obliged to consume it.

One Red flag I think consumers can ask themselves is this: Do you worried that your stuff will expired? I think if we consume in a "need or want" fashion, we hardly need to worry about Ribenna or Butter expiring isn't it? Over-consumption plus wastage is a horrible combination if you ask me.

The exception to this is something of regular consumption. For example, petrol for car, toilet paper (Everyone need to shit, right) etc. When there is an offer, you grab it and you save, is a good deal. Because there is no wastage and also no worry about feeling obliged to consume it. 

The best deal is free delivery

Whenever I hear people talk about offers, I keep hearing "delivery is free", I shall not labour on this point. SMOL has poke about this. 

Better features are worth the deal

I am someone who will pay for effeciency. In my work, I pay for several online platforms so I can create games and resources faster. I sometimes upgrade free learning software to paid versions, so that my pupils can enjoy certain features like mulitiple pages drawing, tagging, to skills etc. 

Value is questionable. Some of my colleagues might feel that there could do without those features (or some do not prepare lessons anyway), or that the valueaddness is not tangible enough. Yet, it provide tangible benefits for me, as it save time for me, and I get to deliver the lesson the way I wanted it and it gave me satiafaction. A few dollars a month, adding up to tens of dollars seem reasonable to me. 

However, after I switch to Xiaomi, I never look back at Samsung or Apple. I do know Apple has better camera and privacy protection, etc. But I realise I do not really need the best camera, and a 300 dollars Xiaomi served me just as well. Also, given that I need no extra money for a handset, I could go for SIm only plan that frankly, offers much better deal in terms of data and talktime.

Second in point is milk powder. When my son is young, I cross the border to do groceries. Money was tight in those years and I shudder when I recall those time when I was just making ends meet. I am really grateful for the time now. Anyway I digressed. 

Milk powder is 25% the price of  what Singapore is selling. Even if you take into account currency difference, it should not make so much of a difference, especially if it is the same brand

Out of curiosity. I bought another tin in singapore, and scrutiniesd every single ingredients As i expected, the Singapore version contain a formula that helps the development of "good eyesight", and hence the Malaysia version is missing 3-4 ingredients.

Yet, given there is "no choice" of purchase of cheaper version, I feel that it is a rip off of consumers in Singapore.  


In case, any reader think that I am trying to preach frugality, I am not. I am quite loose with money, I will be the last person in the bloggersphere that should talk about that. Frugality is a virtue, you should visit ASSI. 

In fact, I am a believer, buy what you want, what you can afford, as long as it makes you happy. If collecting offers give you joy, go ahead. We are all creatures of vices. But please, do not breach "good deal" and "savings benefits" to me. Just tell me you enjoy shopping and collecting offers, and although sometimes, you worried about storage and expiry, you can't help it. I would think you are someone honest with a high degree of self-awareness, and respect you for it. 

Now, if you turn around and think about the headers for investing.

1) Are you investing to earn, or earning to invest?
2) The best deal is free commission (Do you know the difference between custodian account or CDP account?)
3) Better products means a good business

Hope I didn't irritate you with my post LOL

Friday, April 9, 2021

Accumulated more Capitaland

There have been much written about Capitaland split into a listed CLIM, an investment manager with an lodging arm. There is an 10% discount to the "offer price" of about $4.1. I think the 10% discount is an opportunity for me, as I see value in the new CLIM entity. This 10% is not an mispriced opportunity. The deal will only be closed by the end of the year, a lot could have happen. Also, it is not an cash offer, and the value if CICT could go up or down, making the deal sweeter or more sour. Hence, the 10% discount is justified. However, I took a longer term look at what would be the value of CLIM, and I believe it is not too shabby. The proposition for this deal is that valuation should improve, as investment managing business has NAV of 2.6, and yet CLIM is valued at NAV (1). I do not think CLIM would traded anything near 2.6, at least not soon after the split without the company proving it execution records. Yet, I hardly think such a business model should trade at a discount to NAV. So the odds of losing is low. (Not to mentioned the discount of 10% should provide a bit of buffer)

Let me restate some.numbers u can find online.

Investment and management fees in 2020 is around 700 Mio.

We know management fees for reits and funds are very stable as wth the case of ARA (before delisting) records, but there might be some volality with Ascott lodging business, althought the margin for Ascott lodging managing business is better.(70bps compared to 40 bps.) ARA before it delisted is doing 45 bps.

Using NP margin of about 50 percent from fees collected. I estimate EPS of around 8.5 cent to 10 cents, so in terms of PE, CLIM is hardly attractive. ( If u think 3 dollars is attractive price post demerger and 4 dollars is good exit price)

I assume 3 billion of capital injection to improve is funds or REIT business, and the growth to 160K keys materialize ( read the edge article) on this.

Assume 0.5 percent asset acquisition fees, 15 Mio + Increase in AUM management 12 Mio + 60 mio (increase of 30 k keys management )
for easy calculation, let's just assume 90 Mio (calculation is to get a sense, nvm to be exact,imho) and 50 percent of it will become profits so is 45 Mio.

We are looking at predictable high single digit growth of Clim EPS over the next 2 years or 3.

Nothing exciting, but reasonable again.

In all, if u look at PE growth, neigh...
If u believe in PB alignment Swee.

In totality, is a reasonable deal if u pay below 3.5 ( which u will be doing if u have been buying in the last 5 years, since not it is not often that it goes above 3.5 and stay there) 

Finally, the deal is hardly the deal of the century, but is it better than no-deal? 

I believed it is better than no-deal for most people with investment horizon of not more than 2 years, and are vested in the last 5 years.

You might not agree with me. Investors seldom agree with each other. But, pitching this as a dumping of troubled assets and comparing it to Sembmarine is pushing it too far

So what are your thoughts? 

Friday, April 2, 2021

Random thoughts: What I crave since a child?

Think I am getting old, keep thinking about the past. As i watch my son grows, I often had memories of myself coming back to me.

When I was child, I was the youngest. I wasn't from a well-off family, but neither were we poor. I crave riches. I am envous of my cousin who had the latest toys. He had a store-room of mask (thunderbirds transformed vehicles).I spent long time looking at kids playing video games (rental of 1 hours sega genesis, and my favourite was golden axe)

I remembered I was looking at toys with a neighbor and commenting insensitively that "u have money, you buy lor" 
I remembered pestering my mum to fulfilled a causal remark to buy me a toy. 

When I become a teenager, I didn't shake that off. But added to that, I craved attention and adoration. 

I hide my envy better, but had not come to terms with them. I always wanted recognition from others, friends, teachers and particularly girls. 

I remember doing a lot of "unique and idiotic" stuff just to get friends' attention and praises. Like painting with my hands although I know nothing about it. Waiting eagerly for my friend to praise me when I perform a song with my friends at a elderly hospital. 

During secondary and college days, I have insecurity with money. Looking backwards, I wondered why I always break out in cold sweat and having this crazy thoughts that we were bankrupt and my dad has to go snatching a 50 cents coin from others. (Maybe I am crazy)

As I become a young adult, I have all these too. Envy, comparison with others make me suffer from inferior complex. Secretly comparing myself with my secondary friend who is doing much better than me. But one thing did progress. While I feel inferior, I no longer habour any unkind thoughts against my friend, I just respect and admire his status and capabilities.

As I crossed over to my 40s. I understood that these sins are still with me. As human perhaps, they would always be with us, and we need to be constantly come to terms with them and keep it in check.

Affirmation takes a different form. Although I need little affirmation from peers or superiors, I realised I still crave a lot of it from my pupils. 

Riches, perhap is one thing I am more contented with. With jealousy of others with bigger portfolio at a younger age abated, I really do not feel much about it now. I am comfortable with my "wealth" and "rate of accumulation". I am at days insecure about my financial well being, but that is intrinsically triggered rather than externally triggered. I believed while money solve a lot of problem, how badly the future plays out depend on the choices made there and then too, and not just what we do now. 

In fact, as I blog, I find the noise of "what's the point" getting louder and louder whenever I feel like blogging about a company and its results.

I hope my son will be at peace with himself as he grows.