Wednesday, January 22, 2020

Jan 2020 - Portfolio & Transaction Updates

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Top Glove
Ho Bee Land


CFD Leverage @ 2.8%




It's the first reporting season of the new year and we are in the midst of an earning season so there's plenty of reporting and monitoring to do for the companies.

Just to recap on my last Dec portfolio updates which you can view it Here, I was down with only two shares on hand which means it was relatively easy when it comes to monitoring. Plus, it doesn't help the fact that Straco's management does not provide more clarity and updates as we await new information on the flyer.

This month, I've added two more purchases.

The first is a case for Comfortdelgro, which I managed to add a little at $2.21. This company remained trading in range over the past couple of years as we are likely to see more margins pressure this year from their rail business which is likely to taper.

Still, I think trading at a PER of 16x with 4.7% yield is a fair price to pay and wait, whilst it continues embarking on their growth plans on further acquisitions.

On the outbreak of the Wuhan flu crisis, I have also taken a position at Top Glove at an average of $1.72 per share. Coming back of a disappointing quarterly results, I think this year they could do better coming off a lower base. Outlook might also be revised if this outbreak goes viral which likely push demand for gloves and rubber higher for FY2020.

Volume for the past 2 days have also spiked, which sees more players pushing for what likely to be a speculative play.

Since I've taken on this position on a Cfd, I'm likely to hold this for short rather than long term.

The portfolio is still awaiting for a couple of turnaround play so I am not in the rush to overly take a position since we are only in the first month of the new year.

Warchest is also low so I'm looking to recycle only when the opportunity arises.

I'll be flying off during the next couple of days to spend time back with my parents for the festive cny so I think we'll see some break in between the articles.

Meanwhile, have a good cny break, take plenty of precaution and all the best in the rat year ahead!

Thanks for reading.

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Monday, January 20, 2020

Why Reits Are Likely To Stay At The Top For Longer Than Most People Would Expect

The real estate industry cycle has been around for many years.

Traditionally, it has several built-in advantages that make it natural for property owners to receive rental income while awaiting for their property to appreciate in value over time. This is due to the higher affluent population group and the higher GDP for the nation as well as decent inflation rise that will all but contribute to an eventual higher property price.

While traditional real estate usually requires high amount of funds to start with and is out of reach by many retail investors, Reits on the other hand are not. They are investment vehicles that is structured to exhibit the same attributes as traditional real estate but more importantly it allows retail investors like you and me with minimal funds to invest in them.

When investors like us buy Reits, the properties owned are generally incorporating a steady income and cashflow predictability into our income-oriented portfolio. Because of this, most of the returns we are getting should be in the form of the dividends that are being paid out. Capital appreciation is a secondary bonus factor, if any due to the nature that they have to pay out more than 90% of their cashflow income as dividends, leaving only a small amount of retained cashflow for any growth opportunities.

How Managers Are Optimizing Their Cost of Capital

Since a REIT is always raising money to grow, its cost of that capital is one of the most important things to help determine a REIT’s long-term investment potential.

There are three sources of capital: undistributed cash flow, equity, and debt.

The cost of capital is the weighted average of all three sources of capital. Undistributed or retained cash flow is by design (and tax law) the smallest but cheapest (free) source of capital.

The next cheapest is debt,measured by the total interest expense it pays out of the total debt, especially in today’s low interest rate environment.

The most expensive source of capital is equity. This makes sense intuitively because each additional share sold is a future claim on a REIT’s cash flow and increases the dividend cost.

Reits Are No Longer Just An Income Play

Gone are the days that Reits are just an income play.

Kep DC Reit - Effective Debt Structure & Accretive Acquisitions

MLT - Exponential Rise To The Top

Thanks to the sluggish global economy that encourages lower funds rate and cheap borrowings, managers are looking to tap into the credit liquidity to leverage their portfolio in this era of lower borrowings.

They would tap for as much leverage the company could take before considering for more access to funds via the equity route.

That is because the cost of equity is usually more expensive than the cost of debt and it would make more sense for them to consider debt first then equity as their main cost of capital to structure the most effective leverage for growth opportunities.

To the managers, they would look for pipeline opportunities and maintain a cost of capital that is lower than the cash yield on new acquisitions in order for AFFO and dividend to grow sustainably over time.

REIT's leverage ratio, measured by key metrics Debt/Asset or Debt/EBITDA, is important because this is one of the major factor that credit rating agencies use to determine how risky a REIT's profile is. A lower credit rating increases a Reit's cost of debt capital, which could spiral into lower return on investment for any growth opportunities.

So REITS can grow over time and quickly for as long as they find good opportunities aided by cheap cost of borrowings and a rising share price, which compresses the cost of equity lower when they are issuing shares for funding.


Investors are generally afraid that they will be diluted when REITS increase their share counts over time so this leads to active participation from investors who will but contribute to this gracious cycle that will allow more funds for management to grow and seek accretive acquisition that will allow the cash yield from acquisition to be higher than the cost of capital on the equity.

Growing cash flow and a well diversified portfolio would then lead to a rising share price and capital appreciation for the investors.

In fact, the likely they remain at the top, the easier it is for management to look for external opportunities because the growth play is likely to remain a big part for a rising capital opportunities.

The only likely swan that could break this cycle is a liquidity crunch as well as a black swan event which eventually leads to a credit crunch which typically leads to increase in the cost of capital. But by then, REITS are not alone. All of the companies in all sectors around the world are likely to be impacted as well.

Thanks for reading.

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Sunday, January 19, 2020

Reflection On 6 Years of Parenting

In the next few days, our youngest son will turn three years old.

That would conclude that both my wife and I had 6 years of parenting experience since the start of the newly "disrupted" born era in our family.

This comes at a frightening blistering pace given it feels like it was only yesterday that he was a newborn baby, learning to crawl and unable to mumble and utter a single word out of his mouth.

Some days felt incredibly long, especially when we have to continuously change his diapers, fed him through the rigorous lunch and dinner hours and also having to deal with occasional illness such as flu ad fever.

Crazily lots of money have been spent on baby wipes, diapers, helpers, milk powders, books, schools, extra curriculum and entertainment and those are monies that will send us straight to FI had we chose not to have them.

Both my wife and I always had conversations how we wish we could forward time to when he is a little older and a bit more independent so we don't have to be on the mercy of slavery all the time.

But years have gone by and it seems incredibly short to relish back on those memories.

This year, he attended his first school for pre-nursery which would have given him a chance to socialize and interact with the others, forming his own boundaries of friends and social network and learning how to cope with the everyday things. He is still crying after the 2nd week in school but he's learning how to cope better with it now. Eventually, we know that the tears would go away with maturity and the growing up over time.

Often, parents don't realize the amount of real time they are spending with their children because first they are so busy outside working and having their own agendas going out with colleagues and friends and second, they assume the kids will grow up anyway and time spent on kids are never quantifiable by either monetary or personal satisfaction value.

As much as I had often advocate my personal values and take on financial independence on this blog, it is also very much at the end of the objectives to be able to substitute those times used for earning more money to spending more quality time with my families.

I am a strong believer of time that we spent with our families is a pillar support of how we are going to embrace love, kindness and strength at the face of adversity. We are after all a human being and it is important to connect these emotional dots so that the people around us can feel secure and confident about themselves.

It takes time to create and maintain relationships with anyone in this world.

Similarly as parents, we need to take time to cater to our kids' needs.

Every minute and every activities that we do with our kids are memories that will be stored and embraced in their hearts, just as how my parents did the same for me when I was young.

Growing up can be challenging and adolescence difficult at times and as parents sometime we can share our weakest moment too with them - our failures and consequences so they are being made aware of it.

While both our kids are different opposite characters, they both have strong willed characters and probably in due time they are likely to run faster than my wife and I at some point. In those moments, we want to be sure that they are running on the right path and values that we create for them even though those paths may be different.

6 years of our career can be easily quantified by the amount of salary increment or promotions we are getting to check and see if we are on the right path.

6 years of parenting - how do you quantify those successes?

Thanks for reading.

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Tuesday, January 14, 2020

The Misconception About Financial Independence

I've made mistakes in the past talking about the concept of financial independence to people who weren't ready to accept them.

It's incredibly frustrating talking to these group of people who seem to surround it with not only negative connotation that they are not accepting but also refuse to listen to views that other people have.

Since then, I've not openly brought up talking on this subject to anyone I've hardly known unless there's some indication that they are open to listening about different viewpoints.

In the past weeks, I've gone for interviews and met up with people who've questioned my motives when they did a background check and found my articles online preaching and advocating about financial independence and the article that highlights my goal to "retire" at the age of 35.

As much as I can explain to them the whole idea and intention within a short timespan that I have, they simply dismissed the notion and questioned on my long term commitment. After all, most companies would like to have employees that are loyal and remain with the company for as long as the company requires them to be. 

You see, there's nothing wrong being sceptical about this whole thing. There is also nothing wrong with companies wanting their prospective employees to remain and commit with them for a longer term.

What I think needs clarifications is how some people tends to perceive them, perhaps unconsciously or maybe there's misconception about certain things that they heard on the streets that they didn't like. In this article, I hope I could address and explain some of these misconceptions.

You Are Being Lazy

This is the most misconception that people have for those who doesn't understand.

Everyone knows that to reach the state of financial independence, you need a crazy amount of hard work, grit and perseverance before being able to reach the ultimate state that you desire.

The misconception about being lazy is the wrong portray that people have in their minds about sitting by the couch or beach all day doing nothing once you have achieved all your financial goals in life.

And we know that this is hardly true (we'll, technically you can if you choose to do that but hardly anyone I've met has done that).

Most people who've actually achieved the real thing actually goes on to do greater things in life such as spending their time building things and giving back to society and that determination and ambition and the traits of hard work and perseverance continue to play a big role in the activities that they do.

You Are Being Monetary-Focused

The only thing financial bloggers care about is things that are monetary related and focused.

In fact, the opposite is true.

Sure, most of us talk about numbers in our blogs - how we derive certain percentage of compounding interests or how much emergency savings should we hold - things that generally borings and frightens the people but that is not all that we are offering.

This whole thing is larger than monetary benefits alone.

What we are trying to achieve is a sense of optimization of how we should live our lives to the fullest it can be, starting from planning the basic foundation of our needs right, protecting our loved ones with sufficient health coverage, ensuring we have the right investments that can fight off against inflation, finding jobs that we think are aligned with our goal and ambition, doing things that we are good at and many more.

You Are Being Impossible

I can understand why most people are sceptical about this whole idea because I did the same too when I first started.

Most people don't believe that it is actually possible for them to achieve some sort of financial independence at some stage in their working lives even in an expensive first world nation like Singapore where we have one of the highest cost of living in the world.

The social retirement and healthcare security has actually been designed to meet the rising needs against healthcare and lifestyle inflation that we have to cope in our aging days so it is something that has been well taken care of by the government.

To do one step better, there is a need to spend some time understanding the relationship between higher savings and higher returns rate and the number of years you have on compounding. Even if you are not able to match your peers who are earning or saving higher rate than you are at the moment, it is always good to give it your best shot and results will always show that you are glad taking this rather than not.

Thanks for reading.

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Saturday, January 4, 2020

The CPF Context Shows Exactly Why We Remain a Backward Society

This week alone, I've probably seen more than 50 cases of individuals taunting off their CPF publicly on various online portals and forums that appears on my message feeds, without bothering to explain the rationale of why they did so.

I'm sure the scene was meant to be inspiring but taken out of context on a larger picture, it seems a tad sad to mention because it shows once again why are a society of competing in the first place.

Being competitive was one of the main traits that has been engrained in many of the Singaporeans' mindset. That has kept most people going for more each time in a hungry world where we want to simply be better than our neighbour at all other expense.

From young, we are constantly being challenged to race ahead of others from grades to the number of tuitions to the type of holiday destinations that we go.

The benchmark for success for many people is their peers and neighbours and this out of tune illustrations will prove why it is a damaging bridge to the society.

Take this 3 cases below for instance.

Surely, your first reaction is they must have done pretty well over the years to have accumulated a sizeable amount of CPF balances. Assuming a maximum contribution of $2,220 per month based on your employment, you will minimally need to be working between 3.5 to 4 years based on your profile.

But that's about all the story it tells.

A person who posted these balances without explaining the rationale and information such as history of utilizing the CPF or whether the person has bought a house or have children will then be meaningless because the context can vary a lot.

For instance, what is the rationale of case 1 and 2 for having so much in their Special Account? Were they single at the time they made the transfer from OA to SA? Were they someone who were not planning to get married, purchase a house or have children? Or were they someone who has just cleared off all their outstanding home loans and now making a switch to accelerate their FRS retirement needs.

What if this person from Case 1 with a lower CPF balance but is younger and owns multiple assets and higher equities outside?

To have someone who writes that they are earning a free $5k, $7k, $10k or $25k interests from the government that are "risk-free" without explaining the context just irked me off because it doesn't add any sort of value to the public reading it for the first time other than the intention to show off.

Most of these stories are then taken out of context from the general public who brings about the wrong awareness of what CPF  truly has to offer.

From one of the reader that I've talked to recently, I also get a feeling that the CPF 4% interests narratives on the Special Account has also been overly emphasized and taken out of context from people who were following their peers blindly and were actually unsure of what they were really doing with their lives and having the things that they want or not.

The chase for higher returns and what every of their random online peers are doing push them into making some of these decisions that they might feel is not the best at their stages of lives.

Case: CPF 1

Case: CPF 2

Case: CPF 3

To be on the fair side, I think there's a good reasonable amount of people who actually bothers to explain the rationale of each allocation that they put inside the maths of computing their CPF balances on the path to eventual FRS needs.

And this is what we need especially when trying to reach out to a larger audience beyond someone who is already savvy in the personal finance space.

But judging by the amount of one liner post in the past 1 week shows exactly why the Singapore finance community remains a backward society despite the many recent successes of a growing community.

It forms a tribe and a new embryo of circle where people motivates one another through competing against one another and wanting to be better than peers of X age by Y amount.

In fact, there's hardly anyone who has actually benchmark against oneself over how that person has done differently over the years and what sort of circumstances led to that decision.

Instead, the focus has been competing for the highest absolute amount of CPF accounts balance with the most amount of top-ups competing against the benchmark of peers.

This is a first world problem and in another form of cannibal competing.

Thanks for reading.

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Monday, December 30, 2019

2019 Xirr Performance & Other Reviews

As we entered the final phase of the end of the 2019 year, it's time to do a review of how the year went for us and what lessons can we learnt from this year.


From a career's perspective, things are looking rather decent with not much progress from the very last I changed job which means things are not taking a big scale as much as I had expected. Still, it was an interesting year because this is the year I've changed industry and met variety of people in the industry which I would have never met had I remained in my earlier role.

The good thing about the change is it also allows me to look at a different lense on a totally new perspective on start up, unicorn companies and VCs and this will come in a lot handy when analysing the Nasdaq companies for me in the future.


Health on a personal front was excellent this year.

I started eating healthier intake of food such as kale and strawberry for breakfast and less on sugar intake in particular.

I also had time to instil more discipline on exercise and had my children followed me as well.

Because of this, the number of times I fell sick during the year was much lesser compared to the past and this will be a good foundation to continue in the 2020 ahead.


This is one aspect which we deliberately made it a bit of struggle.

Cash flow was a lot tighter this year than the previous year as we had invested most of the cash for our hard cash down-payment for our new house and also made some payment for the hospital bills we incurred.

Because of this, there is very little cashflow that is available for stock investment and hence my focus will be on generating more capital again in the next few years to come through my job.

For some reason, this feels very much like when I had started my first job as a fresh grad some 10-12 years ago, except the difference now we have two homes on hand.

Stock Performance

Stock performance was a little lackluster this year especially in the 2H of the year after I sold off my Vicom and NetLink Trust stakes in Aug.

The first half of the year was exceptionally great as my biggest position Vicom gained 19.2% when I sold all of them at an average price of $7.15. Had I hold it until today, I would have been able to make more as Vicom is currently at $7.77 but it is incredibly difficult to predict.

Since then, the proceeds have gone to other investments that I made in DBS (short), Starhub (short), HK Land, all of which has not really took off in the 2H.

Because of this, the return this year has slightly dipped during the 2H of the year, though still outperform the larger market at 17.4%, as compared to 8.9% for the STI ETF. 

Against, the US market though, it has underperformed with all 3 major indexes gaining more than 20% in 2019.

The next few years is likely to be a rebuilding process for me again and I am certainly hoping that market dips along the way would look to enhance that process faster.

I am also likely to engage the global companies more, especially tech companies in the US, given my current competencies in these areas have widen than before so it will be interesting to have them more diversified into my portfolio wealth building.

Here's wishing every readers of this blog a Merry Xmas and a happy new year 2020 ahead!

Thanks for reading.

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Saturday, December 28, 2019

Willcraft - Your Online Estate Planning Platform

Wills are not something that is often discussed enough within many of the family members because it usually involves talking about death, which is a taboo topic to bring up in the first place. As a result, many families choose to delay because it just doesn't seem too necessary to bring up at this point in time.

But as we learnt from many of the past cases, death can at times comes in an untimely manner and least expected hence it is important to look at them objectively rather than avoiding it totally like a plaque.

Since death is something that will come to us naturally some day or another, we should plan for it, the earlier the better, especially once we start having a family of our own.

Conversations With My Wife

Being a financial writer, I am naturally drawn to anything that is related to financial planning and this includes the likes of having sufficient insurance coverage for the family members as well as estate planning.

Ever since we started having children of our own, we've began planning for the longer term. At the very top of our agenda it includes the immediate needs for the costs of their education, sufficient hospitalization coverage for their health needs as well as a list of all our assets and estates so we know ahead of the plans what to do in the case of an emergency. This especially comes in handy given one of the important lessons I learnt particularly from my Dad's situation.

As a parent, if you do not have a will, the welfare of your child may be quite uncertain and confusing based on the distribution act. Based on the accordance of the Intestate Succession Act, the distribution of the assets will be based on 50% to one of the surviving spouse, and the other 50% to the children in equal portions.

If your children is under the age of 21, then it is advisable to appoint a guardian to act on the children's behalf until they turn 21 under the Guardianship of Infants Act. The assets will continue to be held in the trust.

Having a will directing on some of these instructions just makes things easier to follow both for the guardians and the child.

If you do not have a will, then the process before the distribution takes place, which is called the probate, will take generally between 6 to 9 months.

What to include in a Will?

Here are the lists of what to include in your will:

1.) A list of all your assets. 
2.) A list of all your liabilities.
3.) The beneficiaries (who to give the assets to) and guardians (if the beneficiaries are under the legal age) and how much each will receive.
4.) The executors (to carry out your will).
5.) A revocation clause to revoke any and all previous wills.
6.) A residuary clause that distributes any remainder of your estate according to your wishes.
7.) Funeral instructions.

Is CPF covered under your will?

The answer is no.

You must make a CPF nomination if you want your CPF savings to be distributed according to your wishes upon your passing.

Otherwise, your CPF savings will be transferred to the Public Trustee's Office and distributed according to the Intestate Succession Act.

Why Willcraft?

Willcraft is an online drafting platform that allows you to make a quick, convenient and hassle-free will down only in a few minutes.

Unlike some law firms which charge based on number of hours or clauses, Willcraft's pricing packages come in 3 tiered, depending on the comprehensiveness and complexity of your will needs.

The most essential package is the one with $49 package, which includes 1-to-1 executor to beneficiary.

If you have a bigger families, for example with children, then it is advisable to you take the basic package which costs slightly higher at $99. This includes 1-to-2 executor to beneficiaries and it includes a couple more detailed situations such as how to specifically handle your funeral instructions and procedures.

The Premium package is for more complex situations where you have more than 1 executor and up to unlimited beneficiaries to cater your will situation to.

Once you have submitted your will instructions online, you will have the option as to whether you'd like to engage a lawyer to witness your will instructions that you have effected in the contents.

Willcraft has two lawyer firm partners that they are working closely together with that you can choose or you can simply choose to do away with the witness if you are comfortable with what it offers.

In Singapore, you do not strictly require a lawyer to write a will. However, it is best to engage a wills lawyer if your requirements are complex so they may be able to explain certain aspects of your will content to make it clearer.

I felt that it is a lot more convenient to draft a will online than engaging an external lawyer as my case was more direct and straightforward and I had clear instructions on what to input in the arrangements.

In my case, all I need is a 20 minutes attention on my laptop where I drafted the information of my beneficiaries, executors and witnesses and then it was done and dusted. This beats having to engaging a lawyer where they might charge more for the number of hours that you engage them.

At the end of the draft, you will be brought to a page where you will have to pay for the services that you engage and then your will is submitted.

Overall, I enjoyed the simplicity and direction of what willcraft has to offer and the platform is simple to navigate and use.

If you find yourself wanting to do this end of your financial planning, you can try engaging Willcraft to see how it works for you. The best part is you are able to navigate and try the service until the last part before they bill you, so you can try to see if this works out to your taste.

Disclaimer: This is a sponsored post by Willcraft and you should seek all legal advice from a professional before making a decision.