Saturday, June 23, 2018

Preparing myself for the Japanese Discount

It's strange, but I quite enjoy reading the stuff put out by the research guys by Stansberry Churchouse. Their recent article is about the precarious demographics that Japan is facing.

Perhaps the reason why I enjoy a lot of their articles is because we tend to approach the some topic, but I get to see someone else's perspective.


I have talked about Japan's structural demographic issues and their policies to address it before, in Sep 2015 and Dec 2014. Fast forward to 2018 and what do we have? BOJ still printing money to push up asset prices, and are now owning 80% of eligible ETFs.

Do I have to explain again why debt isn't good for countries? Well, if you're not planning to pay altogether, then you've got a great deal lol.

I'm certain that in my lifetime Japan will have an event that will really shake up their status quo. I'm not specifically trying to target Japan, I'm a financial asshole and I wish for hell on the global financial markets. It is just that for me, Japan is very clearly going down a very dangerous path for their country.

Personally, I like Japan a lot. You can see how much fun I had in Japan for a week for just $1.4k.

One of my fantasies is to have an apartment in one of the major cities downtown and spend 1-2 months a year escaping the SG heat and enjoying being somewhere else (I realize, CNY is an excellent time because the Japanese don't celebrate CNY and the weather is still nice and cool). Well, the new Japanese rental laws changed, maybe I can rent out the apartment for half a year, then leave it empty and visit during the other half? Mmm, one of the things on my to-do list should think about how I can make this fantasy idea into a reality in the future. Japanese real estate are all freehold too, if I'm not wrong. I wouldn't mind to pick up a 1 or 2 bedder Japanese apartment should Japan hit a wall economically.

Anyone with experience or info regarding direct purchasing of Japanese residential property?


Wednesday, June 20, 2018

Blinded by Yield

I think in Singapore, one of the most popular investing styles is income investing, mostly through dividend paying stocks and REITs, supplemented with retail bonds.

To be honest, it is a strategy that I myself is quite fond of.

Kyith wrote an excellent piece about HY dividend stocks and some ways to think about them. I think it's a great read, especially for people whose analysis consists of only looking at the headline dividend yield number.

Business profits could drop.
Dividend payouts could drop.
Demand for higher yield could increase, price would drop.

Some people might think that fixed income investments might be better, since the payouts can't drop. That is true - to an extent. Payouts could just be cancelled and stopped altogether, ala Hyflux style. Worst still, the principal could just be defaulted on. So are bonds are safe? It really depends which one. This is an example of an extremely unsafe bond.

Almost 3 years ago, I was analyzing Telcos, which are known to be steady dividend payers.

Singtel has gone from 4.03 to 3.16. (minus 22%)
M1 has gone from 3.19 to 1.54. (minus 52%)
Starhub has gone from 4.00 to 1.54. (minus 62%)

Even counting in the dividends paid out over that period, things are not pretty.

Previously when I was focused on SGX, I did invest in M1 and I cut my losses at 19%. I cut losses with Starhub at 5%.

Anyway, I'm just saying don't be too caught up in the yield numbers because earnings don't expand perpetually.

It's easy for me to comment freely since I no longer own any stocks, but I think chasing high yield numbers is one of the most sure way to die. Ask the people that chased Sabana, HPH, APTV and the infamous Rickmers.

If the yield is really so irresistible, why isn't everyone else buying it and bringing the yield down? There must be a really good reason.

Betting on attractive yields relative to its own historical yields is a better approach, in my opinion. Not every REIT is the same, and to just select them based on raw yields alone is really too basic and doesn't take into account the unique characteristics of each REIT. I'd do the same for P/NAV, and then look for the good stuff which have been irrationally swept up in the mess that is affecting everyone.

Anyway, this is just my observation as a bystander. I think so many markets are crazily overvalued. And this is true within the crypto markets as well. It's madness the valuations that some projects are getting.

If everything goes to shit, I might honestly decide to de-risk my portfolio and move some of my wealth back into traditional yield stocks. Yes, buying depressed assets at firesale prices is a low risk move, not a high-risk one.

By the way, I'm positioned for a global financial meltdown, so yeah, I'm kind of biased.

Tuesday, June 19, 2018

PSA: Argentina will NEVER repay their century bond

Source: Wolfstreet

Wolf Ritcher wrote a nice piece on this. Will just copy my favourite bits here. (For reference, the bonds were sold at 90 cents on the dollar)

So don’t cry for Argentina’s investors that inexplicably bought $2.75 billion of 100-year bonds with a 7.125% coupon in June last year, at the peak of the cheap dollar-debt benightedness. 
Everyone knew that Argentina would default on these bonds before they’d mature, as it has defaulted repeatedly on its foreign-currency debts, and that it was only a question of when it would default and how many times. 
But the lure was just too juicy to not bite, in an environment where central-bank shenanigans (NIRP) were producing negative bond yields in Europe and Japan. And even in the US, ZIRP was still not fully banished. In the ensuing pandemic chase for yield, which had lasted years, investor brains were systematically starved of oxygen.
The thing is, Argentina hasn’t even defaulted on it yet, though 11 months after selling the bonds, it has already gone begging to the IMF for a bailout. And the IMF, in another bout of debt-benightedness, has agreed to lend it $50 billion. But those $50 billion won’t be used to pay off the century bond. They’ll be plowed into government spending and will disappear, leaving Argentina with an additional $50 billion in dollar-debt.
It’s not crazy for Argentina to have undertaken this piece of 100-year gaucho showmanship – in fact, you have to admire it for being able to pull it off. But it’s crazy for investors to have fallen for it. 
But now investors, including the hot money, are once again getting burned in the emerging markets, and the emerging markets are once again getting burned by their exodus. You’d think someone might have remembered that from the last few times it happened. But no. These old sins are repeated endlessly.

You couldn't see this happening? It's a freaking trainwreck in action slowed down frame by frame so you can watch it implode beautifully over this 100 years.

Don't say I didn't say. I said it twice, in May 18 and Jun 17. Before the IMF bailout, but after they raised interest rates to 40%, lol.

I ain't even worried about sticking my neck out for this one.

Clear as day for me about what WILL happen. It's not a question of "if", it's just a question of "when". This is inevitable.

I just need to be right once over the next 99 years. I've got history on my side as well, since Argentina has already defaulted 8 times since 1827 and never got past 63 years without a default. Lol, easy bet.

Remember, your masters would like to remind you that sovereign bonds are the safest things ever.


Oh, since I'm on a related topic.


What could possibly go wrong?

Be safe out there. If you won't look after your own money, no one else will.

Saturday, June 16, 2018

Quick Updates

Crypto markets are dropping and I'm busy wearing my helmet catching falling knives.

Lots of interesting progress are being made on the tech front. Lots of trash also raising obscene amounts of money.

I'm rather busy doing a few personal crypto projects.

Things ought to be quiet on my front for a bit while I busy myself making money.

I shall report back triumphantly about my endeavours as I'm done with each of them.

One week on and I'm already at 1% of my $50,000 goal. Steady as she goes.

$500 in a week from clicking here and there, best sidejob ever lol. Also, it's been a slow week. Things ought to pick up next week, heh.

Thursday, June 14, 2018

Things You Could Never Imagine

"I'm watching Donald Trump, the current President of the United States meeting with North Korean leader Kim Jung Un for a peace treaty in Singapore, on CNN with commentary from Dennis Rodman wearing a marijuana ICO cryptocurrency t-shirt."

Never thought that this is real life eh?

Well, it is, lol.