Sunday, November 30, 2014

[STI Statistics] November 2014

Hi all, this is my monthly post analyzing the STI.

Feel free to send me requests for more statistics, especially if you have the raw data for me to work on. I am looking quite desperately for the old data on P/E and P/B monthly values of the STI before 2008. If anyone can get me the P/E and P/B statistics of the STI OLD from a Bloomberg terminal, that would be greatly appreciated and included.

As of 28 November 2014

STI Closing Value: 3350.50
P/E Ratio: 13.59
P/B Ratio: 1.34

Monthly Data Series from 2008

Mean P/E: 12.16
P/E Standard Deviation: 3.21

Mean P/B: 1.47
P/B Standard Deviation: 0.21

% of time when the STI is cheaper based on P/E: 67.20%
% of time when the STI is cheaper based on P/B: 26.79%

Comments

The P/E and P/B ratios are still telling conflicting stories about the index, however both ratios have come down from the previous month, which seems to have peaked in end July. The STI looks to be in a topping pattern to me.

Considering how the index has not pulled back substantially yet, I am still waiting for an opportunity to enter some long positions. Still no rush.

*Straits Times Index values from Yahoo Finance
** P/E and P/B Ratios from SPDR STI as a proxy

***Data Series 2008 - 2014 from Bloomberg
****Data Series 2014 from SPDR STI as a proxy
*****Probability calculated with http://stattrek.com/online-calculator/normal.aspx

[XMM STI ETF Investing] November 2014 Update

As mentioned previously, this will be my attempt at having a monthly update of the small portfolio that I am running for my sister and mother. The aim to have as little downside risk as possible, and maximize returns from there.

No changes to the portfolio this month, I am still playing it safe because the STI doesn't seem to offer any very compelling entry points yet. It looks fair valued, but I just feel a buying opportunity coming around soon.

Here are the current stats of the portfolio as of end November 2014.

30 November 2014       Sister             Mom               Total       
Amount Contributed
$10,129.00
$13,306.12
$23,435.12
Percentage
43.2215%
56.7785%
100%

30 November 2014  Stocks  BondsCashTotal
Amount Contributed
$0
$8,086.68
$15,348.44
$23,435.12
Percentage
0%
34.51%
65.49%
100%

Bonds are in UOB SGD Fund Class A with 4731.82 units.

Cash is earning 3.05% from filling up the remainder of my OCBC 360 account.

Additional $400 was added to Cash.

1) Calculate end of month stocks / bond / cash value, update both totals
2) Times by contribution percentage to find end of month value of each contributor
3) Add in $400 to both totals
4) Recalcuate new percentage of contribution
5) Recalculate new percentage of assets

Swiss Gold Vote Fails

Based on unofficial results the Swiss Gold referendum today has failed. The official results will be out soon, but it should not change.

I'm hoping for a nice sell-off in both gold and silver where I will be accumulating physical stock to faithfully keep for myself. Gold in SGD below $1500 and Silver below $20 would look very tantalizing to me.

 
I am already prepared to stock up on some physical holdings, out of the financial system, out of any third party vaults and safely stored (figuratively) under my pillow.

I have ordered a few coin cases and coin boxes, perfect for me to immediately store my bullion right after I have purchase them. They should be arriving soon, within 2 weeks time! I can't wait to full up my cases and boxes with shiny pretty bullion. You know what's probably the funniest thing? I could probably display this out in plain sight and no one would even know its true value, haha.

[SGX Portfolio] November 2014 Update

As mentioned previously, this will be my attempt at having a monthly update of my SGX portfolio.

Here are the current stats of the portfolio as of end November 2014.

                                                                         Lots         Average Price   Dividends Collected
Croesus Retail Trust
1
0.900
$54.00
Saizen REIT
1
0.875
$31.00
CDW
1
0.131
$6.26
Asian Pay TV Trust
1
0.760
$41.20
Lippo Malls Retail Trust
2
0.3925
$20.60
New Toyo
2
0.275
$6.00
Chuan Hup
1
0.285
$10.00
Hotung
3
0.149
-
OUE Commercial REIT
1
0.805
-
Hock Lian Seng
1
0.270
-
Global Investments
3
0.141
-
Perennial CRT
1
0.520
$9.50
Singapore Reinsurance
1
0.295
-
Valuetronics
1
0.300
-
China Fishery
1
0.300
-

Total Cost    $7,646    
Unrealized Gains$197
Realized Gains$0.56
Dividends Collected$178.56

*Realized Gains will take into account the final net profit or loss after including transaction costs to close a long position on a security. Dividends for closed positions will be grouped under realized gains. Dividends that has been collected for positions still held (which are realized) are separately counted.

I am holding off increasing my holdings in both New Toyo and Lippo Malls even though there is price weakness. I don't want to bet too much on the underdogs. I picked up China Fishery when it's price was smashed down 10%. I've always thought that it was a decent counter, just waiting for an interesting entry point. This impulsive move down felt like a good time to dip my toe into it. It has gone down further, I am wondering if I should take another nibble.

I have accepted the offer on Perennial China Retail Trust (PCRT) to convert my units to Perennial Real Estate Holdings Limited (PREHL) unit, so next month I will probably get 524 shares of PREHL. Once trading of the 100 share lots start next January, hopefully I can figure a way to even out my shares. Odd lots make me feel uneasy, haha.

Annual income from dividends is now expected to be about $545 for a full year, but of course I collected some and miss out others by not owning them the entire period. Doesn't seem to be any counters declaring dividends next month.

Based on the dividends I am expected to collect, my portfolio dividend yield on cost is estimated to be about 7.2%.

The watchlist is quite big, around 70+ stocks, which comprises about 10% of the SGX listings. I am looking to trim it down a bit.

I am very eager for the drop in share lots from 1000 to 100, because it will enable me to have access to much more companies that used to have a very high capital requirement. However, this will only happen in Jan 2015.

I am resisting loading up on shares even though I see some very tempting picks and the broad market feels fairly priced. Markets rarely go sideways for so long, so something is definitely happening behind the scenes. I think this month we will finally see where we are heading.

Saturday, November 29, 2014

Gold and Silver Blind Test: Who is the cheapest dealer in Singapore? (Part 2)

The price of precious metals were hit quit hard on Friday, with Silver getting smashed down. With the year coming to an end, it also means that my bonus is coming! I am now finally almost ready to collect and keep physical bullion with me on hand at home (as opposed to my current holdings which are safely being stored in a vault). That is why I am now checking up on the dealers in Singapore to take a look at their prices.

Back in August, I did a blind test to see who are the cheapest dealers in the market today for physical precious metals. As some may know, I keep my own personal holdings with BullionStar. This is my form of "audit" on them to see if they deserve to have my continued business.

Since it is a weekend, it is good for me to do this test. All prices are "frozen", since exchange rates and metal prices are not moving. This makes it much easier when I go around to all the different websites to see what is their current price right now if I decided to go immediately purchase from them.

I visited an array of websites so that I can get as many quotes as possible. I tried to put in very similar products to each category to make them comparable, but it is not that easy. Many of the dealers also do not sell every particular weight size as well. Goldprice no longer quotes prices on weekends I think, while Gold Online has disappeared.

I don't even bother with Ebay, the premiums are high and once you include the shipping costs, it's insane. That goes pretty much with most of the other big online retailers you see online. They are big and trustable no doubt, but their premiums are high.


So, here are the reference gold and silver spot prices that I have used to calculate the "premium over spot", as well as the prevailing exchange rate.


So here I am looking at Gold in the different sizes of 10g, 100g and 1kg bars. As per usual, the small weights have a much larger price premium while the larger weights have a much smaller price premium. Simple economics of scale.

As you might notice, BullionStar is now consistently the cheapest dealers, with GoldSilverCentral always trailing behind in almost every weight. 1 Silver 1 and SilverBullion are not very attractively priced. Perhaps they are better Silver dealers, hence the names? We shall see now!


Now turning to Silver, the first thing that you might probably see is again BullionStar tops the chart by being the cheapest Silver dealer! SilverAG is actually pretty competitive, but BullionStar is still significantly cheaper. More than 100bps is a big deal to me.

1 Silver 1 is actually really badly priced, but SilverBullion is not much worse as well. For being Silver dealers, I don't see them being very competitive at all.

Conclusion

This isn't the perfect test to tell which dealer has the best price, but I think has done a pretty good job to paint a realistic picture of the physical precious metal prices and premiums of local dealers.

I must say I am very happy with the results.

BullionStar is the cheapest dealer for both Gold and Silver. Since the last review that I did, they must have done their own market research and have since significantly priced their products more competitively. I am very very pleased with how they have improved their pricing structure, as well as increasing transparency by releasing their audit and insurance information.

Since it really offers a comprehensive one-stop solution for all my precious metals investing needs, I still give it my two thumbs up and #1 ranking. I will still continue to keep my holdings with BullionStar as well as continue my purchases with them.

I have written a full review about them before and I must say that I have been very happy with them as my precious metals dealer so far. Continue the good work BullionStar, you are being monitored, but so far so good! Congrats! 

Full disclosure: If you enter BullionStar through my site, and you buy anything, I get a small commission.

This is my main source of blog revenue. I prefer this to asking for "donations" because I rather you get something that you want as well, instead of a tip.

Whether you buy at BullionStar directly or enter from my site, the price you pay does not change.

My personal precious metals investments are stored with BullionStar and I pay the same fees as any other regular customer.

Friday, November 28, 2014

Oil On The Streets

OPEC decided not to cut production, no surprise. Who cares about maximizing profits, if the demand for your goods is declining?

Global GDP is trending downwards while yields are, I dare say, crashing down all over the world. Must be because the economy is recovered, right?


Now, while I don't rule out that cheaper oil might be good for non-oil businesses, it is going to be a real bitch to the USA. Since their "shale boom" recovery, they have been aggressively expanding their oil production with the view that oil is only going to go up. Most of the shale oil producers don't make money with oil under $70.

Don't get me wrong though. I believe that oil is going to go up in the long run, and drag along with it all other energy alternatives that progressively price themselves to be viable alternatives with oil gets too expensive. We're living in a world run by an insatiable need for electricity. Are you reading this post on an electronic device, or did someone print it out on a piece of paper? I thought so. However, along the way we can experience some bumps and I believe that this is one bump right now.

I see things in the oil spectrum getting a lot worse before it becomes a lot better. (one of my reasons why... consider this a reward for exploring my links) Just how much oil do you need to do share buybanks from low interest rate loans? Not much at all. If the economy is hoping that "lower gas prices" will help "give the consumer more confidence" and "reduce business costs", well, what can I say? Maybe not?

I think the drop in oil is simply due to oversupply, or conversely, the much less used word, lower demand. No one wants to say such taboo words, but I ain't a financial journalist. While a lot of the marginal producers suffer, the big players will be able to supply oil still. The question is: Will demand be able to consume enough oil to keep prices from sliding?

The current narrative that I am working with from a distanced perspective is that the US will be correcting late into next year, bringing down oil prices with it. I think it is just the old age of the bull. Investors are up to their neck in stocks. Millenials sitting on the sidelines is bullshit. These people don't save any money, let alone have spare to allocate in stocks. I just don't see where else the fuel can come from realistically. Anyone who wants to be in is already in. Anyone that has stayed out is sure as hell ain't going in at these prices. But in our centrally planned world run by Keynesians, anything is possible. So, while I am bracing myself (and portfolio) for a global slowdown going into next year, I am not betting the house on a crash. I am staying nimble, because honestly, nothing makes sense anymore.

Want know the real reason why oil dropped? I think it's because just now my neighbour sneezed at midnight.

Thursday, November 27, 2014

More Property Related Government Policies Coming?

I just read this news piece on Reuters, "Singapore c.bank says it might do more to contain household debt".
"The risk of a downturn in the global economy even as the supply of new housing comes onstream and rental markets weaken could put further downward pressure on the property market,"
The central bank said it will continue to monitor the property sector and take appropriate steps to maintain a stable and sustainable market. Private property prices remained at an "elevated" level even though they have moderated, it said.
it will take more steps if needed to keep household debt at manageable levels.
In other countries, the central banks, legislative and administrative branches of the governments are so poorly structured and run, it is near impossible to agree on a policy decision, let alone pass it and put it in place within a realistic timeframe.

Singapore is a unique country that benefits ironically from it's "smallness". Because of its size and structure, policies can be changed quickly and enforced quickly as well.

If Singapore ever wanted all the MRTs to run in the opposite direction, it could be done within a week. Public announcements on every media, posters and signboards for a week. Then suddenly overnight they would mobilize a hundred private contractors to switch all the signs and the next day, everything will run like clockwork. Some dumb TRS and Stomp! articles later, and within a month it would be as if it was always running this way.

In most circumstances I would say that government intervention is usually bad. However, when the government is acting on basic, age-old conventional wisdom (logical, non-radical ideas) and in the best interests for their citizens, how can I argue?

So unlike other governments that jawbone, I believe that this is a massive hint, just one step behind the announcement of policy makers actually meeting and discussing this issue. Something will be done.

My take is that the Singapore government feels the property sector is still too expensive. Instead of stemming borrowing, they much rather strike the source of the increasing household debt - rising housing prices. If prices of houses were to go down, new borrowers will be borrowing at much safer levels. 

However, I strongly doubt that the risks to the housing sector is higher interest rates, at least for the next few years. Looking at the tea leaves, we're in a global grind. It is hard to see interest rates accelerating to the upside. Yes, they are very low. Historically low. Weirdly low. But as long as our policy is to play with the central bankers of other developed countries, our interest rates are going to stay low. 

That is not to say that they will not do anything until interest rates rise. I think the report is in fact telling us the opposite. They will do something before that can happen!

So, I wonder how they will be centrally planning and engineering the broad decline of property prices in Singapore? Whether it is due to just the global economy stalling for a while and causing a recession, or through a new government policy, my gut feeling is that property prices are going to head down further from here.

Welcome to Crazytown


We're over the 5DMA for 28 days (29 if today closes above it, and it looks like it will). This has never happened before in history, EVER.

Frankly, this is madness. At this trajectory, we'll be at 2320 by year end. Cheers to seasonality and of course, awesome fundamentals.

What irks me is the fact that bonds have long ago decoupled from stocks. The 30 year yield is dropping even though stocks are surging to the moon. Yes, price is price and it is the most important thing. However, the bond market is bigger than the stock market and it has been crying wolf for a few weeks now.

Bonds up, stocks up, everything up. What could possibly go wrong?

Brace yourself. Volatility is coming.

Tuesday, November 25, 2014

[SGX Portfolio] Buy: China Fishery

China Fishery? Wth company is that? Good question. It's a fishing company.


Simple business model: Buy boat, catch fish, sell fish.

If you are wary of "China companies", so am I. But I find this company quite professional and clean-cut actually. Their sustainability report is also damn chio.

This is really more of an asset play if you ask me. Their NAV is USD $0.59. If you want to be conservative and use a rate of 1.2, their NAV in SGD is $0.708. At $0.30, it is now selling at a discount of 57% to NAV.

But okay, what else? EPS is 3 cents USD. Again, using a rate of 1.2, their PE is 8.3. I wouldn't say that it is really cheap, but a multiple of 8.3 seems all right, considering that stocks like SGX are trading at PE multiples of 25. Really? That much growth? Hokay, if you say so.

Using the lower USD/SGD exchange rate of 1.2 (which we are at 1.3 now), I think my NAV and PE values are on the more conservative side. It seems like this stock has lost a lot of faith from investors, hence it's poor valuations in the market.

The 2 things that bothers me is the fact that revenues are increasing, but overall net income is not. They are also intending to redeem the senior notes to stem off the bleeding on interest expense that is eating into their profits. I wonder how they can secure good financing options, but I don't rule out they asking for more equity.

On the plus side, equity has been consistently rising over the years while dividends have been paid every single year. Two ticks in my book.

However, with the need to redeem their debt, who knows if they can afford a dividend this time around. It will be very interesting to see how they manage this situation.

No one said investing in cheap companies is gonna be easy. They are cheap for a reason, but a 10% drop on the day feels a bit like an overreaction to me. Could get lower, but hey I can't see the future. All I see is something that looks like a good deal to me right now.

Monday, November 24, 2014

How much does it cost to REALLY get married in Singapore? $26.

Some people might think I'm joking, but yes, I shit you not.

The steps are pretty simple. File a notice, verify your documents, grab 2 mates and head down to the ROM to get solemnized. I'm serious.

Pulled from the ROM website itself.


Now, some people will hey, what about the solemnization? Well, TECHNICALLY if you're a cheap douchey kind of person, it is free.


So there you have it, you can choose to give the solemnizer a token of appreciation for their time and effort in helping you solemnize your wedding.
The real actual cost of getting married in Singapore? $26.

The real cost of living up to the expectations of your families, friends and culture when it comes to marriage and all its associated NECESSITIES (/sarc)? $44,000 - $90,000. (source: DS and SGYI) But, that's a whole different thing.

Lesson of the day: Living up to expectations are shit expensive. Getting married is not.

This my public service announcement for today. That is all. Dismissed.

Sunday, November 23, 2014

How To Make Yourself Look Damn Pro

Ben Carlson from A Wealth of Common Sense nails this one on the head directly.

Want to look like a pro? Change your timeframe. That's it. Anyone can look like a pro now! No need to thank me, you're all most welcome.

People that slap around gold bugs cough up the 40% drawdown statistic since its peak in 2011.
Now expand that time frame to start from 2000 and you get a 350% increase in the price of gold.
Or start from 1970 and gold has been up 7% annualized a year.

Assets go up and down. It shouldn't be a surprise to anyone. Just look at this chart, there are no consistent winners or consistent losers.



And yes, even commodities can be a good "investment" over time. If I can sell it more tomorrow than I bought it for today, then by golly, give me as much as I can take. It could be monkey poop for all I care. Because, I don't really care. Whatever makes money, well, that is what works.

That said, it is of course okay to decide to stick with just a few asset classes or styles of investing. There is no holy grail investing solution for everyone. Do what you are comfortable with. It's your own money anyway.

Personally, after doing some thinking and reflection, I think I am very comfortable and happy with my experience with REITs so far, so I am definitely going to focus my efforts on researching and investing in them.

There is more than one way to where you want to go. You just need to solve a simple navigation question.

Friday, November 21, 2014

Baby, I'm Back!

I've been away for the past 2 weeks doing you-know-what, and now I'm back! I'll be ferociously catching up and digesting news and market moves over the past 2 weeks, so I'll be lagging my usual posts and momentum since I will be trying to bring myself up to speed.

So, I am back just in time to see China cut rates and ECB fire off a round of stimulus. Naise.

Now, with so many markets near all-time highs, this tweet from ZH sums up almost precisely how I feel.


I ain't buying all this mumbo jumbo voodoo keynesian-economics central bank nonsense. Most of the positions that I am in and holding for the long term, I am very happily holding. My only regret so far has been trying to fight the status quo, which is shorting equities every now and then and getting burnt.

I have to admit, my biggest mistake is assuming that this mania and euphoria cannot perpetuate forever. I am now going to play a lot a lot more cautious. Why be cautious when the stock market is clearly overvalued? Answer: Venezuela.


I'm not even back for 6 hours and I already need a break, haha.

Monday, November 17, 2014

Do-It-Yourself In a Property Transaction

A few weeks ago, I saw a CEA advert in the newspaper highlighting certain rules of the property market, in case consumers were not aware. One of the rules that caught my eye was that "Agents are not allowed to tell you that you must engage the services of an agent".

If they can't tell me that, is it because I actually do not need an agent?

Well, the answer is yes, you do not need to engage a property agent. You are allowed to Do-It-Yourself (DIY). The CEA consumer guide brochure was quite explicit about it, but it did not elaborate.


Don't get me wrong, real estate agents aren't freeloaders that earn money doing nothing. They do have value. However, I am against blanket 0.5/1/2% commission fees for work which is essentially same for a $500k condo and a $10 million bungalow. If I can do the transaction myself then I will save my side of the commission. Whoever is selling me their property, well, he can just pay his agent commission out of his own pocket. Not really my problem.

DIY is apparently not as obscure at I thought it would be. Back in 2012, 1 in 10 HDB resale transactions were done DIY with no agent. That means BOTH parties did not use an agent. This really is a lot more common than I imagined.

However, information and guides on this process is very scarce. I would have imagined that at least a few people would have at least complained or talked about their experience doing a DIY transaction. I have only 3 resources so far and I have only skimmed through them. PropertyHub gives a very precise overview, PropertyGuru elaborated on the OTP, while URA has all the officially worded stuff.

"The tedious paperwork" that requires the rare expertise and skills of a professional property agent seems to involve just 3 things:

1) OTP
2) Sales and Purchase Agreement
3) Certificate of Title

I haven't read much about the entire process, but I hope that as I read and learn more about this DIY process, and I will blog and journal my experience to other to know of this option.

In all frankness and absolute honesty, I am not pissing on the real estate profession. However, just like the insurance profession, the real estate profession is a dying and shrinking profession. Their value has been greatly eroded by technology. Sure, 15 years ago when no one used the internet much, finding and matching buyers and sellers was a task that no ordinary Joe could do. Property agents WERE the market. On top of that, managing newspaper ads and liaising appointments on landlines isn't easy.

However, with the internet, many things have changed. The internet has now made this very opaque market transparent to anyone with an internet connection. I don't see much value of a property agent other than haggling ability and paperwork skills. The better ones have experience, "gut instinct" and a better visibility of market depth and prices. That's not to say that it isn't valuable. But.... 1% of a $1 mil property is a lot of money. If property agents offered their services fee-based, I wouldn't even give 2 shits about doing it DIY, I would engage an agent.

It's the same problem as the entire financial industry. Charge me for the labour and work, but not based on how much I can afford. Unless your cost scales with the price, you can just bugger off.

It's not personal, it's just money.

Welcome to the future.

Start-Up Considerations

As a young guy with seemingly a lot of energy (I waste a lot of time pursuing very trivial hobbies) and with quite a few entrepreneurial classes and knowledge under my belt, I am now flouting the idea of a start-up with one of my like-minded friends.

I have previously had an IDEA for an app, but an IDEA isn't a business. I think it would have been a good app at that point of time, but with the speed of change in that arena, I feel that this idea is currently no longer viable. It's only a matter of time before we progress to the next generation of ideas, and that would completely remove the need for this technology. The life of this idea is just so short and it really isn't long-term.


So a few weeks back having beer with one of my friends, we dreamed up an idea. Later when I got back home, I spent the rest of the week during my free time researching and thinking just how viable this idea is.

Anyway, I just wanted to share some of the interesting things that I found through my research.

Virtual Office gives you a business address with mail collection/forwarding services. $8-60 per month.

Mail Services scans yours mails to softcopy and/or forward your mail to you. $20-50 per month depending on volume and postage

Hot Desking / Co-working is suitable for small businesses that aren't perpetually churning business, with more ad-hoc and project based work, making work periods erratic and renting on a permanent basis wasteful. Internet is usually provided, with printing and meeting facilities available per usage. Usually comes at a nice location with a good pantry. $20-50 per day

Hot Desking / Co-working permanently is a more permanent solution, but still 1 step away from a full office. This means that all the usual infrastructure like internet, copiers needn't be forked out to enjoy at good rates. Usually permanent renters will get round the clock access. If you want your own personal fixed location, you have to pay more, but you get own space and usually a locker. Hot desking are about $300-600 per month. Personal desks are $500-900 per month.

Other nice extra services that might be offered on a usage basis are Phone Answering services and Professional services (Company secretary, auditing).

Finally, although our start-up will be a service, others might actually have physical products that they need to store. Renting a self-storage unit might be a good idea, since security and insurance can be settled quite easily. Scaling up/down is also quite easy.

As of now, my friend and I are still in the initial stage of our start-up idea. The name of the company, the idea and all the basic stuff like the business plan aren't even ironed out yet, so there's no rush for us. Our idea isn't tech-based, so we don't have no worry about moving quick. If we really do go ahead with our idea, it is nice to know that there are options available for us to slowly scale up and expand in a economically feasible way.

Unless there are more than 4 workers and a need for a round-the-clock employee manning the office and phone lines, I think using a combination of these office solutions would likely be cheaper than renting a single venue and equipping it and managing it yourself.

Anyway, this is just the research that I've come up with. I'm sure I definitely haven't covered anything and missed out on some points, so feel free to add in anything in the comments!

Sunday, November 16, 2014

Something Smells Fishy... Bad Breadth?

Something feels kind of funny to me regarding the STI. The index itself has been playing rather nicely, grinding upwards in general, but my portfolio and many of the stocks on my watchlist are not seeing this strength. It feels like there is a disconnect between the top index constituents and the rest of the market.

Of the 100 issues that I monitor, most of them have peaked out in late May or in July and many are far away from their previous highs. They all look like they need at least a 10% pop to get near their own highs.

In fact, I see many stocks slipping and losing previously thought strong supports. A whole bunch of stocks look attractive to me now, but I am sure that once the STI halts its ascent and starts heading lower instead, a wave of negative sentiment will push some tickers to extremely attractive points.

Examples of tasty looking treats to me are: Keppel, OUE, Sembcorp, Sembcorp Marine, SIA Engineering, Singapore Finance, Super Group. Who's to say their downside is over? I am not buying them yet, but these are just some tickers which have really ugly charts recently. With issues like this pushing lower, the STI grinding upwards doesn't seem very healthy to me, but that's just my feel of it.

http://divergencetrader.com.sg/bull-tired-still-charge/

Reading this post by Divergence Trader and studying his unique CADI indicator overlay seems to confirm the lack of participation of the market.

However, many of the REITs and Trusts seem to be holding up quite well though. Seems like no one really believes in the rate hikes? I've been hearing a lot of kopitiam chatter about buying REITs, sure win, cannot lose. It's making me more skeptical of that whole arena.

On the whole, I feel that are actually many issues that are really quite attractively priced for the long-term investor, but it looks like deeper bargains might be coming around soon.

Anyway, no rush, being a retail investor is great, haha.

Saturday, November 15, 2014

Thinking Outloud

I've been effectively cut out from the outside world the whole of this week. Not too shabby actually, it gives me a nice break from watching the markets, which I must concede is a guilty pleasure of mine. What a geek, amirite?

Anyway this breather has given me some good time to step back and think about things from a bigger perspective, so I'm just going to pen down my thoughts.

Switzerland's gold referendum - this month's end, we will be seeing the outcome of the Swiss gold vote. After having toured pretty much the whole of Switzerland a few years back, I must say that I have the deepest respect and the highest regard for their country and society. I was thoroughly impressed earlier this year by their complete shutdown of the minimum wage referendum that their socialists tried to pass. Though the MSM barely mentions it, I personally think it is was an important moment for their country and libertarians who advocate free markets. I suspect that the news was glossed over because it is fundamentally different from most developed economies who have minimum wage in place, and there is where most of our international news come from. I think the Swiss are really pragmatic and sensible people. It isn't personal, it's just good business. A gold backed currency might just be the thing that can hold their central bank in check, to resist the temptation of debasing their money, much like what Japan has done to themselves. Too many people care about nominal growth even if there is no real growth. Better ask Zimbabwe how that turned out for them. A soaring stock market does not mean a healthy economy, but far too many people overlook this.

Oil and Gold - Somewhat related to this is gold and "black gold". Of course I have deeply vested interests if the prices of precious metals soar (refer to my many previous posts on this pain trade), but I try to be open to many angles of analysis. Both gold and silver soared at the very end of the week, so I suppose my P&L is less negative now, haha.

With oil just puking itself out, it's definitely due for at least a retrace sometime soon, it would seem. I don't believe that this strong dollar is sustainable at all, but who knows? If the dollar does reverse, then we might see my ideal scenario of the previous metals taking off. Oil however, seems to be having a demand and supply pressure that is pushing prices down. I doubt it is because of alternatives, so it is because the global economy is slowing down? I'd vote for that as the likely scenario.

I see miners as offering extreme value at this point. Although profits are mainly driven by the prevailing market prices of the commodities that they sell (which has been dropping), the other side of the story is that their costs are also dropping (cheaper oil, trimmer operations) which would help their short term operations. With exploration and future production being sacrificed for current survivability, I think certain commodities could realistically be more expensive in the future. Gold miners have reached crazily cheap historical valuations that are pricing them as horrible investments. I would beg to differ. Better margins could see this sector take off, considering the massive massive hate in this sector. Ki chiu, who actually has exposure at all to this niche segment? I suspect not many. Bull markets don't appear once everyone is already in and nicely positioned. It appears once everyone has left it for dead.

Commodities - I have been reading a book on asset allocation, and I must agree that yes, commodities are for speculation. It generates no yields and pays no interest, but if you think that it is trading below its fair value, you would buy it wouldn't you? As such, I do not recommend commodities as a staple in a long term portfolio for investing. It should merely be an in-and-out trade, identifying times of price weakness and taking a position, and exiting when prices have recovered. Now the only problem is trying to find out if they are cheap, or if they are expensive. Hmm.... However an exception is precious metals as a form of portfolio insurance and a "put" on your wealth and purchasing power. Precious metals will always have a place in my portfolio in that regard, though the insurance portion will always be kept small, while the speculative portion may balloon.

Equities - There is absolutely no way anyone who is a long term investor can tell me with a straight face that the US markets are attractive. Quote me anything with the words forward / future / expectations and I can show you how wrong these analysts have been in predicting them. What we know for a fact is that the market compared to its own self is historically expensive. I am a believer that comparisons to historical rolling performance in percentage terms is very mean reverting. I just can't bring myself to allocate anything here. Can it still go up though? Yes, the market can be very irrational at times, and I believe that this is no different from other crazytown times like the dotcom bubble. I don't even think a blowoff top is possible with the current allocations and leverage. I just can't see where the fuel driving up a higher market could be. Of course I could be wrong, I've been repeating this for so long, but it only seems to be getting worse. Even a broken clock is right twice a day, but I sure hope that's not me. I'll be bullish the day I feel that the market is attractively priced, and now it clearly isn't.

One of the things that I have come to realize lately is the broken yield curve. Usually an inversion is seen when something bad is going to happen. However with ZIRP, a yield curve inversion is impossible. Therefore, flattening of the yield curve itself should be as scary as an inversion, especially at these low rates. Just food for thought.

On the flip side, China and Russia looks like amazing buys, with Russia looking a lot more attractive. I just read an article that Apple is now worth more than the entire Russian stock market. If Apple was liquidated, the proceeds is enough to buy over the entire stock market as well as give every single citizen a brand new iPhone6. Overvalued Apple or undervalued Russia? Or both? With the ruble dropping so hard lately and the market falling deeper in the pits, Russia looks so good to me!

Anyway, these are just some of the thoughts and it's accompanying train that I've been thinking about since I've not much other constructive things to do. Feel free to share your thoughts, would like to see what other people about these thoughts. There's no right or wrong since it all boils down to your time frame. At the end of the day when you close your position, the person who made money was right. Although, some people might be more right than others, haha!

TL;DR: long precious metal miners, Russia. short USA

Sunday, November 9, 2014

Sunday Ramblings

Today is a bit of a lazy day for me.

The Invest section of The Sunday Times was just plain outright boring, so I turned over to the internet to check out what interesting reads I might find online.

Firstly, I was very intrigued by Uncle CW8888's post on dividends and high-yield stocks, and of course the less often thought about relationship of the payout ratio. I think he is very right to point out that if higher yields is not necessarily better, especially if payout ratio is high.

Technically, the ideal company should have high yields but a low payout ratio.

Although it might be intuitive to think that a low payout ratio with a high yield is the best, actually a lot of research that has shown the opposite. On average, companies with a slightly higher payout ratios (60-80%) tend to perform better than those with lower ones (30-40%). The reason that many have suggested is that a low payout ratio of 30-40% is an easy target for many companies to hit, but a higher payout ratio reduces a lot of retained earnings and makes profitability and efficiency more emphasized.

I wonder if there is an ideal number or range for the (inverse payout ratio X yield) variable.
Eg. A company with 90% payout (10% retained) and 8% yield is 0.008
A company with 40% payout (60% retained)  and 3% yield is 0.018
Therefore, company with 40% payout and 3% yield is technically "better" in terms of giving back to the shareholder, while retaining earnings for the company? I don't know.

I also found Ladykiller's post on spread trading to be a really good introduction to it. From what I understand, it's hedging within a specific play (airlines, precious metals) and instead just focusing on the relative value of the two investments to each other. Pretty interesting, I quite like this idea!

I think long Silver, short Gold could be a great pair for a spread trade, since the Gold-Silver Ratio (GSR) is at multi-year highs! This is definitely a trading strategy that I will read up more about to see if it is suitable for me.

Finally, an updated spreadsheet on the dividend champions of the SGX, which I had actually previously talked about. Now it is updated with the latest values and also includes REITs and property tickers which were previously excluded.

Still, I take their values with a pinch of salt. Although the data is extracted from Reuters, I don't know how accurate it is. I checked on the total debt to capital on some of the tickers and they are wrong, so just use it as a sort of rudimentary screen I suppose.

I re-ran some of my filters on these stocks with a large margin of error (since the data doesnt seem that accurate) and I looked at my resulting list. It looks very similar to the watchlist that I have already, haha. I saw a few additional names and I went to read their latest quarterly reports and read up on their businesses. Some looked great, others not so much. In the end, I added in a few rare finds to my watchlist which I think look very promising!

Okay, this is probably the last post from me for a while, I will be away for the next 2 weeks, probably sleeping in the wet jungles since it's rainy season now. Wa, sian.

Preparing to spread some holiday joy

One of the bloggers that I really admire is the real and the original Money Honey. Sad to say, but I created my blog and picked out this name before I stumbled upon him. (A bit embarrassing because I think people will also agree that our names are easily mixed up!)

Money Honey donates to a lot of different causes, and I am made more aware of many of these organizations because of his posts. Recently, he also set up a portfolio to self-fund his charities. Total respect.

Just the other day I was thinking to myself, what have I done for society lately?

I used to participate in programmes that was organized in school, like donation drives, activities with kids, home visits, etc. I also vividly remember putting in quite a decent sum (of my $2 daily pocket money!) into the Sharity envelope when I was in Primary school. I used to do flag days as well, and I always triumphantly return with 2 full cans. I've been told each full can of coins is probably about $100!

However, since I started working, I don't think I have been doing much. My HR department auto-deducts a token sum to the CDAC fund, and I still drop all my loose change into flaggers when I see them. (Once you flag, you really know how tough it is for the kids doing it, especially when they are usually shunned and ignored) Other than that though, it seems like nothing more.

Well, I stumbled along the interweb and I found this thing which is quite interesting: ComChest will match your donations until the end of the year, dollar for dollar! With that, I have decided to put aside some money and donate to charity! I signed up with SG Gives so that I can donate some money to various charities and manage my donations through this portal. From that portal, I can donate to a few selected charities and causes in one-shot, instead of having to visit multiple sites and fill multiple forms.

Over the next month or so, I will be reading more about these charities and I will pick a few that I will make a donation to. Of course, before the end of the year, so that the charity will get double the donation from the matching grant! :)

Anyway, don't get me wrong, this is not a call for action to anyone reading this post. This is just me sharing about what I plan to do with a bit of my holiday bonus at the end of the year, that's all :)

Saturday, November 8, 2014

Look at Shipping when Online Shopping!

I just saved 25% by spending an extra 15 minutes comparing prices online.

I think most people by now must have realized that buying goods directly off the internet is HEAPS cheaper than buying from a brick-and-mortar store.

PROS: Convenience and better prices
Not subsidizing rental
Not subsidizing labour
24/7 availability

CONS: Low Confidence and Poor Experience
No ability to touch and feel item before purchasing
No personalized assistance from shopkeepers

Clothes are one thing that I think are not the ideal goods for online purchases. With such variance in size, cutting, fabric, etc, I think it is hard to have a online substitute of a retail store.

However, I am a fan of buying standardized goods online. Any good that you know is the same thing if you bought it in Thailand or Taiwan. A mug. A calculator. A letter opener. (Just listing the things I saw on my desk) All these things, regardless of location sold, if they have the same brand, they are more often or not produced from a single country of origin, with the same quality and then distributed around the world. These are the goods that I am talking about here. Same quality and same product, regardless if you bought it from Shop A, Shop B or Website C or Website D.

Being in the working world, I am exposed to a lot of new things that I previously did not know about. Singapore is such a global trading hub that you see ships delivering goods from one part of Europe to a trading house in Singapore, only to be sent back to Europe again but to a different country. The ability to arbitrage prices is still around today, although opportunities are shrinking each day as more information becomes readily available on the public domain.

Anyway, I just wanted to share an online shopping experience that I had recently.

Most people would think that Ebay or Amazon or the big online retailers would have pretty good prices right? Well, wrong.

(just buying some sporting good that isn't available in Singapore)

By just goofing around and comparing prices, you can see that buying directly from the retailer might not be the most price friendly in terms of the item itself, but the shipping cost was actually what made the difference.

Just like for investing, Capital Gains + Dividends = Total Return
It's the same for online shopping, Product + Shipping = Total Price

Too many people get caught in the price of the product itself and forget to look at the total price, very similar to how many investors only look at yield these days and are blindsided to the total return.

So perhaps the next time when you think about buying something, you might want to consider buying it online where you might get extra rebates or discounts with your credit cards. And be sure to check around on a few different websites to compare prices. And never forget to check the shipping charges because they are the sneaky ones that can really kill you!

Thursday, November 6, 2014

Ladies & Gents, may I present the Bear Case?


To be clear, this is specifically regarding the US stock market. I do not think that the Singapore stock market is over-valued, but I think that if the US markets go down, so does most of the world.

While many people have been cheering the US Stock market higher, along with the rest of the stock markets around the world, I do not believe that much further upside is present at that point of time.

My first few points will be from Peter Tenebrarum from The Acting Man.

1) II Bullish Percentage had the largest 2 week change in 20 years
2) Bearish Percentage is a mere 15.1%
3) Bearish Percentage at the bottom of the October correction was only 17.3%
4) Rydex money market assets at levels last seen in the late 1990s
5) Rydex bear assets are lower than at the 2000 peak
6) Rydex bull/bear ratio at historical high 
7) NAAIM exposure is diverging
8) St. Louis Fed SFI showing high complacency
9) Mutual Fund Cash Level at historical low cash levels
10) NYSE Margin Debt seems to have topped out
11) NYSE Investor Credit is at historical negative levels

My next points will be from John Hampton from Solarcycles.

12) Gap-up exhaustion similar to 2000 peak
13) JNK making lower highs
14) XLY:XLU ratio making lower highs
15) Spike and divergence of bullish percent put/call ratios similar to 2011 year end decline
16) V-bottoms occurring ever 2.2 months instead of the historical frequency of every 1.6 years

My last points will be from Doug Short.

17) Market cap to GDP at +2SD, only surpassed by dotcom bubble
18) Wilshire 5000 to GDP at +2SD, only surpassed by dotcom bubble
19) Real S&P Composite is 82% above the regression
20) Shiller PE10 is 32% above the regression (20% of the time at these high valuations)
21) Q-ratio, arithmetic change and geometric change only surpassed by dotcom bubble
22) Average of 4 valuation methods going back 100 years show only 1929 and 2000 as being higher

I must admit that the bull case is equally strong though:
1) Money printing
2) Irrational investors
3) And, the trend is your friend?

Until it isn't, of course. What more do you need for the bull case other than, "Hey, it's going up!"?

I wish I could say that this is the market top and we're only heading down from here, but I can't. The short-term movement of the markets can be caused by anything. We could definitely go up from here, it is a possibility. But is it very probable? I don't think so. Are we now at a fair price? Well, you decide for yourself. Or better yet, you just wait and see what the market decides.

Although I have made my bearish case, I must concede that many of these indicators may not be the best and most accurate ones. However, I do think that cross-referencing and finding many different independent data that points to the same conclusion does make for quite a compelling case.

But then again, money printing and irrational investors. How do you beat that?

Is 15 the magic number for Silver?

I hate to sound like a conspiracy theorist, but it's quite hard to argue with logic.

When you make a trade, you know you need ample liquidity so that you can have execution at the best price, especially when you are making big trades. "Fat finger" bullshit reasons are far too common these days, no one even reports it anymore. No one blows through the order books with a HUGE order during arguably the lowest period of market liquidity unless they are intentionally trying to move the market. Well, that's what happened today in the PM market. Someone took a massive dump in the precious metals market.

Now, I know that I am putting on a pretty interesting show for those people that are watching to see how I deal with this "max pain" Silver trade so far. Silver is one of those "barbaric relics" that generate no yield, has storage and opportunity costs, all on top of rusting in front of your very eyes. But in all honesty, I am actually not sweating much at all about these price drops. I have for quite a while said that I can reasonably foresee Silver to be heading down to $15 level:
1 Oct 2014 - "I see very big long term technical patterns that target the $14-15 area, so I wouldn't be too surprised if it heads down to that level though."
19 Sep 2014 - "$15 USD looks to be a good price target based on technicals."  
3 Sep 2014 - "Beyond that, it is reasonable that we could go down to as low as $15. I've seen quite a few patterns that have $15 as an objective."
11 June 2014 - "Silver is so beat down, I do find it very hard to see it considerably lower, I dare say $15 should hold its own."
Of course, as someone long this investment with previous price anchors, it would be nice to see it make a reversal at any price level and start heading up. However, I still do give technical analysis some credit, which is why I have just been strategically buying on weakness. Could it be the last dip? Maybe, maybe not. Doesn't really matter.

On 13 June 2014, I said that I would be enacting an accumulation plan in Silver, buying more as the price dropped. My lowest price target I had was $14.70 then.


If prices really do drop below $14.70, I might get worried a wee bit, but hey, if prices have declined so much from it's 2011 peak, can they really decline anymore? Of course, but I'm hoping not, haha! I have heard calls for $11 Silver, but I really don't see how it can crash to that extent.


This chart is actually just a month old, and Silver has since gone down to $15, representing a 70% drop from it's peak in 2011. Can things get worse? Probably, but not as bad as the 1980 move. The 1980 Silver crash saw Silver going from $40 to $12 in a crazy drop, while drifting to $5 over the next few years. The bull market in Silver to the 2011 wasn't anywhere as parabolic as the 1980 move, so I don't think we are going to have a 90% correction. If we keep drifting lower into next year, this would historically be the most drawn out bear market for Silver since the 1960s. Time seems to be ticking to force this bear to sleep.

On top of $14.70 being a strong technical support from my charts going way back on the monthly, I think that there are fundamental reasons to help this case as well. A mine has already decided to suspend sales, while another cuts CAPEX on exploration. A good argument is that silver is a by-product of other mining, but there is still a point where the primary producers just won't release supply at horrible prices. Mining costs have been falling and recent estimates puts it at $14, but miners are cutting costs all over the place and are in survival mode, hoping to ride out these low prices. With CAPEX being reduced, current cost-cutting relief is given to the market at the expense of future supply. Eventually the high-grade stuff will slowly get depleted and costs will slowly creep up again as they move into lower-grades.

I must concede that I have not been following my plan well. Sorry to disappoint, but even I am facing massive emotional and psychological barriers dumping a 30% allocation in Silver. With each dip, I release another barrage of shots. Though my ammo box is actually quite healthy, I think I am only going to give this "target" a few last shots. After that, I am going to play the waiting game and I WILL emerge victorious. I have to save the rest of my ammo for when the big boss comes around.

Right now, I am really putting myself on the backburner just watching my targets and waiting for the right opportunity to strike. I have already made all the moves that I am comfortable with, and now I am just waiting for something interesting to happen. While that unfolds, I will be working on trying to earn myself more ammo!

Monday, November 3, 2014

Investing in (insert your favourite investment / asset class) for the LONG TERM

For me, one of the things that irritates me a lot about the whole finance industry is when people mix up and confuse investing and trading. If you don't know the difference yourself, then you are probably doing one of them wrong. To me, the main distinction is investment horizon. A trader is short-term while the investor is long-term.

Very interestingly, I came across a part of the Research Affiliates website which has very nice graphics and information regarding their 10-year real expected return forecast of different asset classes. Give the page a click-through, I think it is very interesting to get an insight into the minds of smart quants.

http://www.researchaffiliates.com/assetallocation/Pages/Core-Overview.aspx

GMO also releases their forecast for some asset classes as well, but theirs is the 7-year returns, not 10-years. Perhaps you can look at US small cap and large caps of both tables and see why I really don't like the US markets.

However, the main thing that I want to share is the RA Investment Beliefs (pdf version):

1. Investor preferences are broader than risk and return. 
People do not rationally make investment decisions most of the time. Many behavourial bias set in and distorts their choices.

2. Prices vary around fair value. 
While prices can deviate from it's "fair value" over the short-run, it will not be able to deviate too far and will bounce around it's "fair value".

3. Lack of conviction (and/or internal governance constraints) restrict/prohibit investors from exploiting long-term value.
Many people rather fail conventionally than to succeed unconventionally. Managers and professionals face career risks and mandates that forces them into choosing certain (unwise) choices, while individuals face ridicule and loneliness adopting an investment style different from the rest.

Conclusion: The largest and most persistent active investment opportunity is long-horizon mean reversion.

Their strategy is to simply buy low, and sell high, or even at fair-value. Figure out what is cheap and buy it. Figure out what you have that is expensive or fair-valued, then consider selling it. Wash, rinse, repeat.


This brings me to the second thing that irritates me about the finance industry: There are some people that say that REITs, dividend stocks, blue chips, equities or gold are the BEST investment ALL the time. They are feeding you bulls**t.

There is time and price to buy and sell for everything. People might have been loading up on tech stocks during the dotcom peak, but hey, there are stupid people in this world too. People can engage in buying and holding whatever investment they like, but they should know the short-comings of their investment and strategy. They might be trading simplicity for volatility and the opportunity cost of not selling high, and re-entering at a much better price, but with more units.


No matter how good and fantastic the underlying investment is, there is a price when it is just stupid and ridiculous to own it. A Ferrari is sure as heck a nice car, but for $5 million bucks, you can just leave it in the showroom and let it collect dust and rust. If you can nod your head to that, now flip that table around. 

No matter how shitty and crappy the underlying investment is, there is a price when it is just so irresistible and tempting to own it. A Chery QQ selling for $500 bucks is a steal no matter how you cut it. Even if it's a crappy car and rattles when you drive it over 60km/h, you still can sell it for its parts and make money off it.

Everyone has their own investment style, beliefs and strategy. Buying and holding isn't wrong. Dollar cost averaging isn't wrong either. Buying only gold and keeping it under your pillow isn't wrong too. (naw, I'm kidding, this is probably wrong!) However, you have to know what is it about your investments and strategy that allows you to make money.


For me, I choose to believe that there is no single investment that will give you the holy grail. The answer is not REITs, it is not dividend stocks, it is not ETFs and it sure as hell isn't gold. Instead, my holy grail is a process. It is the process of systematically identifying what is cheap so you can buy it, and what is expensive so you can sell it if you own it, or avoid it if you don't.

Don't get me wrong. You can invest in the STI ETF only for your whole life and end up with a nice nest egg. However, I'm not satisfied with just mediocre. If I was, I would just log in to DBS ibanking right now and sign up for POSB Invest-Saver and be done with investing for the rest of my life.

That's what we all want isn't it? That's why we put in so much time and effort into investing, right? If our returns are not going to beat an index, then boy are we stupid for wasting so much time doing something that a person with no knowledge can beat us at. 

What do we want at the end of the day from investing? Enlightenment about the financial markets and how they work? Oh please, if you're not in it for the money, maybe you're playing the wrong game.

Saturday, November 1, 2014

REITs: Credit Rating and Yield Mispricing?

The other day I was curiously just wondering to myself, is there any link between the credit rating of REITs and their corresponding yield?

It would make sense that the best credit rating REITs would also have the lowest yield, since they are the "safest", while REITs with lower credit ratings would have a higher yield. I would imagine it is something similar to bonds, from the investment grade spectrum, down to the junk stuff.

I reference a post that I made early on about credit ratings, as well as Wiki's table for Credit Ratings to help me come up with the info below. I also used the data from Reitdatato get the yields.

First, the Investment Grade stuff:


Followed by the Non-IG stuff:


Can you spot any "mispricings" based on credit rating alone? 

Some of these REITs seems to be yielding a bit high compared to their peers within the same credit rating group, no? MapleTree GCC and SoilBuild seems to look awfully attractive on this chart, don't they?

This chart like this makes me feel like going out and picking up some of these counters, especially the ones within the same grouping but with higher yields. However, credit rating and yields shouldn't be the only thing prospective investors should look at. I personally think that P/NAV is the very important metric to look, but there are many more things to consider as well.

Then again, perhaps the stock market doesn't really care about things like credit rating, since shareholders are equity holders, not credit lenders. I would just imagine the companies with the best credit ratings would also be the best companies to own as a shareholder too, is that something too far off to reason?

Anyway, this is just something that I was thinking about to myself, and since I went out to gather the different information from all over, I just thought I'd share my findings.

[XMM STI ETF Investing] October 2014 Update

As mentioned previously, this will be my attempt at having a monthly update of the small portfolio that I am running for my sister and mother. The aim to have as little downside risk as possible, and maximize returns from there.

No changes to the portfolio this month, I am still playing it safe because the STI doesn't seem to offer any very compelling entry points yet. It looks fair valued, but I just feel a buying opportunity coming around soon.

Here are the current stats of the portfolio as of end October 2014.

31 October 2014       Sister             Mom               Total       
Amount Contributed
$10,106.10
$12,876.92
$22,983.02
Percentage
43.9720%
56.0280%
100%

31 October 2014  Stocks  BondsCashTotal
Amount Contributed
$0
$8,072.48
$14,910.54
$22,983.02
Percentage
0%
35.12%
64.88%
100%

Bonds are in UOB SGD Fund Class A with 4731.82 units.

Cash is earning 3.05% from filling up the remainder of my OCBC 360 account.

Additional $400 was added to Cash.

1) Calculate end of month stocks / bond / cash value, update both totals
2) Times by contribution percentage to find end of month value of each contributor
3) Add in $400 to both totals
4) Recalcuate new percentage of contribution
5) Recalculate new percentage of assets

[SGX Portfolio] October 2014 Update

As mentioned previously, this will be my attempt at having a monthly update of my SGX portfolio.

Here are the current stats of the portfolio as of end October 2014.

                                                                         Lots         Average Price   Dividends Collected
Croesus Retail Trust
1
0.900
$54.00
Saizen REIT
1
0.875
$31.00
CDW
1
0.131
$6.26
Asian Pay TV Trust
1
0.760
$41.20
Lippo Malls Retail Trust
2
0.3925
$6.80
New Toyo
2
0.275
$6.00
Chuan Hup
1
0.285
-
Hotung
3
0.149
-
OUE Commercial REIT
1
0.805
-
Hock Lian Seng
1
0.270
-
Global Investments
3
0.141
-
Perennial CRT
1
0.520
-
Singapore Reinsurance
1
0.295
-
Valuetronics
1
0.300
-

Total Cost     $7,346   
Unrealized Gains$191
Realized Gains$0.56
Dividends Collected$145.26

*Realized Gains will take into account the final net profit or loss after including transaction costs to close a long position on a security. Dividends for closed positions will be grouped under realized gains. Dividends that has been collected for positions still held (which are realized) are separately counted.

I increased my holdings on both New Toyo and Lippo Malls when there was price weakness. It does seem to be drifting lower still though. I picked up Valuetronics when it's price was smashed. I've always thought that it was a good counter, just overvalued. It reached a price where I felt comfortable owning it.

Annual income from dividends is now expected to be about $540 for a full year, but of course I collected some and miss out others by not owning them the entire period. I am expecting only 1 of my counters to pay out dividends next month, and it is Lippo Malls.

Based on the dividends I am expected to collect, my portfolio dividend yield on cost is estimated to be about 7.3%.

I have identified good business models which I like, but I have yet to delve deeper into the financials of most of the companies that are on my current watchlist now. The watchlist is quite big, around 70+ stocks, which comprises about 10% of the SGX listings. I am looking to trim it down a bit.

I am also looking forward to the drop in share lots from 1000 to 100, because it will enable me to have access to much more companies that used to have a very high capital requirement. However, this will only happen in Jan 2015. I will start checking the fundamentals of the companies that I look to add in my future watchlist though.

I am resisting loading up on shares even though I see some very tempting picks and the broad market feels fairly priced. Markets rarely go sideways for so long, so something is definitely happening behind the scenes.