Thursday, April 30, 2015

New OCBC 360 Account Review!

One of my more successful post with non-regular readers was actually my review of the OCBC 360 account when it first came out and the comparison between similar accounts by DBS and SCB.

I'm sure many have heard of the rumours beforehand that it is close to impossible for OCBC to keep up these levels of interest rates indefinitely. I've all along felt that a change and revamp by them would be coming soon, and I smelt that it would very similar to Citibank's Interest Plus account.

Today though, the news of the new conditions of the account are out!

The new account changes did come with some good news that I did not expect!
  • Account balance eligible for the bonus interest increased from $50,000 to $60,000
  • Salary crediting bonus increased from 1% to 1.2%
  • Interest on account balance increase

There were the bad news that we already know:
  • 3 GIRO transaction bonus dropped from 1% to 0.5%
  • Credit Card spending bonus dropped from 1% to 0.5%
  • Credit Card spending bonus criteria increased from $400 to $500

And finally there is the ugly that we have been preparing for
  • "Insure" or "Invest" to get bonus interest of 1%

To cut through all the crap, the OCBC 360 account is now only good for getting you a 2.25% interest on your account balance of up to $60,000.

It's been a while since I've actively seeked out competitors and sniff out their offerings, but I am quite sure that this 2.25% is still one of the top products around, if not the top product itself.

Personally, I thought that they would split the bonus interest and link it to a home loan, but I knew that it would definitely be linked to "insurance" or "investments".

Full details of the "wealth bonus" can be found here, but I broke it down (caution, possible human error)

First off, let me say that I think that this is absolutely retarded. I believe that insurance should be insurance, investments should be investments and when you mix the two, you get a half-fuck version of both things which are half as good but twice the price. 

My personal pet peeve is when people try and label and call something which is an insurance as an "investment". Especially anyone in the financial industry. Especially people on the frontlines that advise customers what to buy. Especially when their customers don't know what they are buying. There is a special place in hell for these people.

I am a firm disbeliever of whole life insurance. In Singapore, where there is no estate tax, it makes absolutely zero sense to have whole life insurance. Ask an insurance agent who works in any other country in the world. If your country has no estate tax, they would never. ever. recommend whole life insurance. Unless of course they have *their* best interests at heart, and not yours. I read a 400 page book all about and exclusively about life insurance. I will rip your face off and feed it to you if you come here and talk shit to me. Especially. If. You. Are. An. Agent.

Insuring yourself yearly with $2,000 worth of premiums is extremely excessive. I don't think I pay more than $50 a month and I already feel that I am over-insured. I have no house, no car, no liabilities, no dependents. What about you? My yearly premiums are less than $600. Trying to hit the term insurance target of $2,000 might probably only make sense if you are buying insurance for your family members as well. However, in all honestly? Not practical.

No further comment on whole life insurance.

I think endowment plans are like shitty fixed deposits that are locked up for years. On the bright side, you get insurance. If you want to get the endowment plan, get it and never read anything more about personal finance, because you will live to regret it.

If you think you can combine insurance and investments and get an outcome which is better than getting each individually (along with paying commissions and admin fees), you need urgent medical help regarding your mental sanity.

I just spoke to someone from OCBC, the normal sales charge for unit trust is 5%, which is day-light robbery, but they normally go to 3%. I guess this is the standard rate for most banks. Private banking customers usually get a lower rate, but I highly doubt it is less than 1.5%. Phillip does 0.75% or 0% by the way.

If you invest $40,000 in unit trust within a month, you will get the bonus 1% interest for the next 12 months. When I read it, it looked like it was $40,000 per month to get that 1% interest for that 1 month, but I guess what I read was wrong. Either that or what the lady told me was wrong. It doesn't really matter, the sales charge is already the dealer breaker. An additional $900 in sales charges is not offset by the extra $600 gained from the 1%

In summary, the OCBC 360 got nerfed, but it is still a good account. To repeat myself, the OCBC 360 account is now only good for getting you a 2.25% interest on your account balance of up to $60,000.

I would not even think about the insurance or investment products to get the 1% bonus and I will advise all my family and friends not to even bother about it.


Wednesday, April 29, 2015

More Important to be Right or Alive?

While casually surfing the internet reading trashy news, this particular article popped up and I read it.

Well, the article is written by the Straits Times and there is a legit video, even though it was posted on All Singapore Stuff (far from my idea of a good content provider).

Even though the pedestrian light was flashing green, the girl still had right of way to cross the road, regardless of what she was doing. Clearly the driver is at fault for not seeing the girl crossing. I bet he feels horrible about it.

However, is the girl too at fault? I don't think that she is at fault for crossing when the light is in her favour. But I do fault her for assuming that she is right and not being more conscious of her own safety. It should not be taken for granted that you can always cross the road safely. Yes, it should be safe, but it is not always the case. She should have paid attention while crossing the road because, as this is a case study for itself, drivers do make mistakes too. As long as people drive cars, cars will always be dangerous because of the human element of error.

This brings me to another ad, somewhat related, that was in New Zealand to tell people to slow down.

However, the main point of the ad is the same. Sometimes other people do make mistakes, and even if you are right, that doesn't mean that you're going to walk away victorious.

Now let me bring that idea over to investing and about my personal experience. I have long held (and still do) that the US markets are overvalued and expensive. And yet they still keep hitting new all time highs. I'm an idiot, aren't I? When I first started, I was so sure about my fundamental analysis of the broad US economy and its (at least) bleak short term future. Horrible / misrepresented underlying data alongside a soaring stock market fuelled by unconventional monetary policy?

Sounds like a jackpot bet if I ever heard any! Unfortunately, another lesson I learnt is that the stock market is not the economy. You would think that they go hand in hand and follow each other closely, but sometimes (which are times like these), there is a massive divergence that just stays that way stubbornly for long periods of time. I have short the indices before I finally realized, and I have been steamrolled by them.

I'm very confident that in a few years from now, everyone will look back at this period and go, "Seriously, what were we thinking?" and my expectations will be proven right. Until I can see signs that the stock market is finally wising up to the reality of the economy, I am sitting this one out. My crystal ball's accuracy is not very good in the short term, I must confess.

The light might be green for me, but I am not going to cross the road if I can see stupid cars trying to go.

Tuesday, April 28, 2015

Why Diversify?

Ask Celladon. It's fun all the way until the last minute when you start to vomit.

12 month returns: +117%
13 month returns: +250%
14.5 month returns: -61%

There is very clear mathematical proof why diversification is good for you. However, I also do believe that there is such thing as di-worse-ifying, which is rampant and an excessive fetish for extreme diversifying. After a certain point, diversification has very marginal effects because of diminishing returns.

My personal stance is that basic diversification is absolutely necessary, even if you do have a single asset class portfolio. The diversification bonus contributed by the first few additions of independent investments are substantial.

At the end of the day, just know that if you diversify with asset classes (instead of only within asset classes), you're probably going to end up with very decent long run returns with reduced volatility that many would be jealous of.

The easy man argument against diversification is that "Diversification works.... until it doesn't!". Well, when all hell breaks lose, most things don't work. People that sell lower yielding "safer" assets like IG bonds or fixed deposits like to come up with that sort of defense to try and get them some AUM. It's not to say that their point is moot, but they are only arguing half of it.

There are many ways that lead to Rome. Just because Warren Buffet said so doesn't mean that 100% stocks is the only way to Rome. And that also doesn't mean that if we try to walk his path, we will get to Rome as well.

The romanticism and heroism of being of a hardcore chiongster with 100% stock allocation has to stop.

Monday, April 27, 2015



No comments necessary.

How Low Can It Go?

Normally, the answer is zero.


I just blogged about relooking at Silver to add to my portfolio, but I don't think people realize what an amazing opportunity Silver is right now.

Tiho from ASSOL has came up with a fantastic fantastic analouge of the previous silver bear markets.

His main points are that:
  1. The 1987-1993 silver bear market looks the longest, but the actual maximum drawdown was in 1991, and silver stayed in the dumps for the next 2 years
  2. This makes the current bear market in silver the longest bear market since silver has been freely traded and priced by the market
The only time in history when silver corrected deeper was during the Hunt Brothers fiasco back in the 1970s, which caused the epic bubble bursting from 1980 to 1982.

So, apart from that one-off occasion of the market trying to be cornered, this current bear market is the deepest and longest of all the silver bear markets that we have ever seen in recent modern history.

This is clearly a situation where there is blood on the streets. Not a single soul is trying to sell anyone any precious metals. Buy what is out of favour and what is cheap? Tick and tick.

On top of being in a perfect situation (in my opinion) for investing, silver itself as a precious metal has many attractive properties. Personally, the most important property is the fact that it is a monetary metal and it has intrinsic value to it. This means that silver can never go to zero. It has value as an industrial metal, for jewellery and as money.

Understanding about fiat money and the amount of credit floating around in the world makes me extremely uneasy. If you knew too, you'd be uneasy as well.

I recently read an article about one of those traditional investment superstars (for the life of me, I can't remember who. Maybe it was Howard Marks?) and he was saying that he likes to manage his downside risk and let the upside take care of itself. He allocates his money based on how much money that investment could possibly lose, and he puts most of his money is whatever he thinks is the least likely to lose money.

I will continue to accumulate Silver. At this price, it is hella attractive to me. If it goes lower, fuck yeah. I accumulate through Vault Grams with BullionStar. That's just how I do it anyway.

Silver has been a shitty investment for the past 5 years, that's for sure. But just how long will it continue to stay like that? Forever? How low can it go?

Definitely not zero.

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.

Saturday, April 25, 2015

Silver Sniping

Hey guys, in line with the tin foil hat piece that I wrote yesterday, I just thought I'd write about precious metals too!

It'll be a short post since I've actually been very busy recently not being a nerd and having a very happening social life. I'm doing the "if you keep drinking, you can't get a hangover" trick this weekend.

(Mega kick ass bullion charts from BullionStar!)

While MOST people look at the prices of precious metals in USD, I think that since we invest in SGD, it is prudent to also look at the value of precious metals in SGD.

The last time when precious metals spiked down was late Oct, early Nov, and I managed to sink in quite a sum at those nice low prices.

Now, prices of precious metals are inching back towards those levels again, which are making me excited about entering this trade again.

One of my counter trend thesis is that the USD is a pos currency and it is not going to the levels of 1.42 which analyst from all over has been calling out, after the fact when the USD/SGD rate shot from 1.23 to 1.40.

At 1.35, analysts were still saying that it's going back to 1.40+, but now that it has sunk down to 1.33 the entire herd of sheep analysts have run over to the other end of the boat calling for a stronger SGD. Typical.

I think that the SGD will reach parity with the USD over the next decade, but the path towards there is not a straight path. Now with everyone back on the "strong SGD, weak USD" trade, it worries me that the USD strengthens from where we are now. It probably would. And the minute all the analysts flip flop again, the USD will once again fall. C'est la vie.

I have long past my purchasing of precious metals as portfolio insurance and I am quite deep into it in speculation. Along with my physical precious metals investments, I am also heavily invested in precious metals mining equities. These are HUGE positions in my portfolio. That just goes to show how big my tin foil hat is.

I'm not leveraged at all, so I can sit in losses for the next 20 years if I have to. Is it pain watching it go down? Nope, not really. I don't even know the prices most of the time. I check maybe once a week. I swear, I sleep like a damn baby with these open positions.

I'm not writing this post to convince you that precious metals is a good investment because I honestly don't know if it is, plus I don't really care because you shouldn't be listening to 25 year olds blogging on the internet for investment ideas. If you do, you have much bigger problems than you realize.

Precious metals look cheap to me. I remain accumulating on dips.

Friday, April 24, 2015

Take Out 'Em Tin Foil Hats Boys!

Today we take another dip into the Twilight Zone brought to you by me, your curator of our fringe content provider, Zerohedge.

The largest sovereign wealth fund in the world, Norway, has comes out guns a blazin'. Slamming central bankers manipulating markets, the obsession on monetary policy and high frequency trading, it's pretty much the trifecta of conspiracy theories.

Steen Jakobsen has come up with another view. I do respect the man immensely for always speaking his mind, rather than conforming to market consensus. Ready for what he thinks?

With "zero growth, zero inflation and zero hope", he thinks a crisis correction is the only possible outcome of a zero environment. I concur. He also thinks that when the Fed hikes later this year, that would be the catalyst. Again, I agree and have said that before as well.

Zerohedge had this chart posted on their day end recap, and I think it is something pretty interesting to note.

Which is strongly corroborated by this data, which is jobs dropping at the fastest pace in 6 years.

In the last 50 years it has never been more expensive for the average Joe to buy stocks. Hmm...

I think it has to be said again and again and again until I get this drilled into my thick skull,

The stock market is not the economy.... (part 1) (part 2)

Of course, it is entirely possible for these levels of valuations to persist or even increase. No one said that the market was rational. - GMGH, 25 Feb 15

Which coincidentally is what the youngest billionaire in the world just reiterated in a different form about the tech industry now. If all your investors are momo investors placing irrationally high levels of growth on your company and it still looks expensive, maybe it really is expensive?

I mean, if the CEO of Exxon just said oil prices looks crappy for the next few years, who are you going to believe? Him or that analyst that just graduated and has been on the job for less than 5 years?

Bear with me until the bear market comes, then I'll be right for sure. Don't you know that broken clocks are still right twice a day?

Wednesday, April 22, 2015

[SGX Portfolio] Valuetronics or Expensivetronics? 70% in 6 months!

Wa, really keep going up ar? SELL!!!!

I bought Valuetronics almost exactly 6 months (and a week) ago for a fantastic price of just $0.30 a share. From my analysis back then, I thought Valuetronics was an unbelievably flashing buy. I was only hoping that it would go even lower so that I could totally back up the truck. At $0.26, I would be paying $1 for every $1 they had in their bank and getting the entire business free.

Just two months ago I did a follow up on Valuetronics again. Share price had gone up to $0.45 in just 4 months representing a massive 50% capital gains. I was debating with myself if I should take my money off the table and leave, or if I should continue sitting tight and see where we end up.

Today, the share price hit a high of $0.51 and I decided to throw it in. I'm cashing my chips out and walking away with a massive 70% gain over 6 months.

I know it's not a great way of finding calculating EV/EBITDA, but I'm hella lazy to calculate the ttm figures. Anyway, valuations are for the gist of things, I don't operate based on rules and arbitrary numbers.

When Valuetronics was priced at its peak back in late July last year, it's EV/EBITDA was 7.64 and it was trading at a pretty huge 87% premium over NAV.

When I bought Valuetronics in October, it's EV/EBITDA had dropped to 5.65 and it was selling at a nice 10% discount to NAV. Definitely a value stock by any standard at that point of time.

Today Valuetronics is trading at EV/EBITDA of 6.88 and it has a premium of 43% over NAV.

Perhaps I am selling too prematurely, but judging by it's own stock's history, it was not much higher where it faltered the last time around. It's ascent is too fast and too furious for me to handle. Dammit. I would rather hold this stock with it's high dividend yield and modest capital gains for as long as I can. Why does it have to sky rocket away from me like that? Damn all you Valuetronics investors that ran up my price! How is a value investor like me supposed to get by?

It's no secret that I'm probably one of the most bearish people out there yelling that the sky is falling. However, that sentiment is aimed towards the US markets and probably Europe. Even though I really don't think that the local markets are overvalued, the fallout of those economies will have global effects and they would not be localized.

I've been on a selling spree lately. What's wrong with me? If the stock market keeps going up, I might not have anymore stocks left to sell!

Twilight Zone: Reality Breaks Down at 0%

The year is 2015. People are looking to lend away their money to make a return. In return for lending the Swiss government your money for 10 years, you will be rewarded with a return of -0.17% per annum.

No, there is no need to blink your eyes. It is correct, NEGATIVE 0.17%.

If you have heard of the Stanford Marshmellow experiment and about delaying gratification, you would realize that this scenario is put on all backwards. Instant gratification should be heavily discounted to future/delayed gratification. In other words, instant gratification should cost a whole lot more than delayed gratification.

The financial world is currently sailing in uncharted territory where banks now pay people interest for having taken up housing loans with them.

Imagine that! Getting paid to borrow money. Not only do you get the money that you borrowed, you are also receiving, not paying, interest!

Now that the Euribor just went negative, banks will pay each other for borrowing money from each other.... wtf?

How does that make any sense?

It shouldn't.

Most people are at a total loss of why this is even happening and can't explain it. David Merkel from the Aleph Blog breaks it down fantastically why rates can go negative. To me, the way I see it is that negative rates are pretty much the same as negative GOFO rates for gold, where banks actually pay people to keep gold with them, rather than the normal situation, where people pay banks to keep their gold for them.

While the worded theory makes sense, I am definitely sure that negative rates is causing all sorts of hell to break loose on many financial models used by institutions.

I understand why negative rates are happening, but that doesn't make me comfortable that it is happening.

It's like knowing that a tsunami is about to hit. Hell yeah, you know what caused it in theory. Would you feel comfortable if you were standing on the beach?

To my knowledge, I have no exposure to any of these bonds with negative yield. I'm out on the mountain watching news about the tsunami on my TV.

Where are you?

Tuesday, April 21, 2015

[SGX Portfolio] 30% in 1 month? GRAB IT AND RUN!

Almost exactly 1 month ago (and 1 day), I took the dumpster dive and jumped into Civmec to mop up the stragglers after it has fallen 50%.

Today I sold all my (tiny) holdings which I bought at $0.40 for $0.52, which represents a 30% gain.

I am a firm believer that the absolute amount doesn't matter and my tiny portfolio should be run as if it was a million dollar one. The only question is, is the effort worth the reward? I think it is, because I am still learning. So the percentage gain is what that matters to me, not the dollar amount.

I could be a pompous ass and say, "Ooo, look at me, I pocketed 21 years of income!", but I think we all know what sort of trade this was. It was an opportunistic dumpster dive. Very much like Valuetronics. However, I am much less confident of Civmec's quality, which is why I am still holding onto Valuetronics, which has run up a lot more than a mere 30%, while I am letting Civmec go.

This clearly isn't a yield stock, it only has 3 years of dividend history and a paltry current yield of 1.4%.

Therefore, this is a stock for capital gains. Personally, I like to use the yardstick of 8% returns per annum if I'm dealing with a stock that I know no special information about (which I have no clue for most of my stocks anyway), the capital gains from just 1 month is a very healthy and decent 30% which comes to about 3+ years of capital gains with my expectations or to slightly over 2 years of gains for people which much higher expectations (looking for over 10% a year).

Believe me when I say that I do want to be a long term investor. However, when I see such gains on the table already, gains that I was only expecting a few years down the road, I take it. In that sense, perhaps I can never get one of those mythical "multi-bagger" stocks unless I hold it for many years, like 9 or more (since for 100% capital gains at 8% a year, it'll take 9 years).

And honestly, I am okay with that. I don't need to have tons of multi-baggers to have a good portfolio. That just isn't my style.

My current portfolio is such that I have a certain heavy bias on a few stocks, with just 6 stocks making up almost 50% of my portfolio while 20 others make up the rest. However, this isn't how I would like it to be like. I would like to change this if I could.

Unlike most of the people I've seen running tight ship portfolios, I just find it too scary that my eagle eye focus and analysis on those companies might be wrong and that it blows up in my face.

Personally, I would love for my portfolio to be made up of maybe 50 or more stocks and they all only hold a small percentage each. I don't believe that I am smart enough or have the time to closely watch a handful of stocks. I rather watch the big picture and don't look at individual names too closely. Therefore, snagging a multi-bagger only affects me a little. I want to have a strong all-rounded army throughout all the ranks, not a few superhero generals to do all the fighting.

I am loosening my reigns looking for the perfect stock. It doesn't exist. I rather have a big group of almost perfect stocks, than a small group of perfect ones paid at perfect price, that could turn imperfect anytime.

Monday, April 20, 2015

Higher Price, But Better Value?

AK's post is a very timely one.

A quick summary:
QAF was trading at 93c last year, with a PE ratio of 16.6X.
Today, QAF traded at $1.14, with a PE ratio of 14.5X, excluding the one off gains.

Recently, I have sold off a stock for 5 years of upfront yield. Very rightly so, people have commented to dig deeper into my rationale and decision for selling. I think such a question should have an answer, at least to myself personally, if I do not want to divulge the real reason publicly. However, I have no qualms about sharing my reason.

Personally, I do not believe in the Efficient Market Hypothesis (EMH). I think behavioral finance ensures that this cannot be true. The current stock price is not the entire wisdom of the market put together, it is the price where all the active buyers and active sellers meet.

I think that stock price is made up on 2 fundamental things, and that is earnings and multiples. The earning of the stock can be determined by many things, and so can the multiple of the stock. I think that the multiple of the stock is less "visible" than the price to most people.

When I sold off my stock, I believe that within the next 5 years, one of 2 things would happen: I would be able to enter back into a valuation lower than I sold off at, or I don't plan on entering back into this stock at all.

If a stock went from $1 to $2, that would imply a 100% capital gain. However, if earnings went from 10c to 50c, valuations would have actually dropped from 10 to 4.

Would I buy the stock with a PE of 4 even though it is now 100% more expensive than the price that I exited?

Would you?

I would.

So, yes, price might keep rising, but if valuations do go down, I would be interested again. It doesn't mean that if price runs away from me, I would be locked out of that stock forever. Price should not be an anchor.

I agree with AK on this: The price doesn't matter, only valuation does.

I have talked about AK's point on this before, and I did say that both the price and valuation are important, but that is assuming that we are not talking about stocks. Whether a stock price is $5 or $0.50 cents is totally irrelevant. If you have $5000 to invest, the only difference is if you end up with 1,000 shares or 10,000 shares.

Price anchoring is dangerous, but I must admit that sometimes certain numbers stick with me and give me a bias. I am working on it and trying not to let such things affect me. They shouldn't.

Sunday, April 19, 2015

Shut Up, the US Recovery is Real

Recently, I have come to know of a prominent bank's forecast regarding interest rates and also some currency views. It isn't that hard to find such information these days, many of the banks publicly publish their "Market Outlooks" daily or weekly on their websites, just that it isn't so obvious to those who are not looking for it.

However, I am tried of hearing things by all these "forecasters". They might as well be fortune tellers with crystal balls, since their consistency and accuracy is about as good as mine - meaning nobody keeps track of it and they can say whatever the hell they want. Hell, the banks ought to hire me to vet their views, I can immediately punch holes into half of their jack-shit analysis which they stole of some article written by someone else.

But I do keep track of what they say. It is super clear to me. They all are restricted massively by career risk. After making a few bold calls, if they are wrong, they all just follow the market herd consensus. They cannot afford to be wrong again while the rest of the market is right. Once people forget about their past calls, they try to be bold again.

I've heard some people say that these bold forecasters just like to be different, to be contrarian. I disagree. They are speaking their mind and they are throwing out their best guess on what they think is right, even though that might not agree with the market. However, because of career risk, they shy away from saying what they think is right if they are wrong long enough, to saying what they know will be safe for their career. It's tough for me to respect their views anymore.

After seeing one such... professional financial fortune teller (some of you might call them economists) flip flop all over the place about everything he has said previously, I just shake my head.

Here are some key herd views that everyone has. Like literally everyone:

The Fed will raise rates end of this year.
The Fed's dot plot forecast is accurate.
The US recovery is REAL.

So, is the Fed's dot plot forecast accurate and they will raise rates based on that?

LIFT OFF IN 3, 2... Oh wait fellas, postponed. But next month we'll do it!

Whoa, what happened to all those rate hikes? DID THEY LIE AGAIN, WTF?!
(Source: FRED)

I mean, the Fed has been so open, transparent and honest about what they have said since 2009 about their rate guidance. Is it even remotely possible that they will lie again and again and again and again and again and again and again?


So, is the US recovery real? Unemployment is down to 5.5% (pffft, in Singapore, what are we at, 2%?). I mean, who gives a crap about labour participation rate, right? The unemployment rate is more important!

Plus, the quality of the jobs does not matter at all. Quantity over quality. Part time jobs, full time jobs, they are all the same! As long as you have a job, you should be happy, right? Part time jobs for everybody!!!

I know for some people, they might be confused, but I am being very sarcastic here with my commentary. To me, this whole thing is a joke.

However, I honestly do think that they Fed will hike rates this time. Everyone would not be able to believe it and mass panic and confusion ensues. We go back down to zero again.

Hey, if economist can shout out stuff that doesn't seem to make sense, why can't I talk about all the crap that is floating around in my head too? Anyway, I am sure whatever I think is totally inconsequential. For one, I get paid diddly squat to share my thoughts, while these guys in suits and ties get paid well enough to drive sports cars to work. Obviously, you get what you pay for, right?

So, step right up ladies and gentlemen! Make an investment, TODAY! I am sure you can offload your purchases to the next greater fool tomorrow. Trust me, I am an (unpaid) economist!

My House Hunt so far

This post stumbled into my radar when I was surfing the internet. Although it is a very short post, I think it is very sweet and concise. However, it did remind me about what I have NOT been doing, which I should be doing very soon.

I did read Property Soul's book, which I am very glad that I did. I feel a lot more knowledgeable and a lot more skeptical about the Singapore real estate market now. I think it's always better to be a skeptic when encountering something that you don't really know much about at first. Just smile and nod until you figure out what is happening, but be aware and observe closely.

I have been keeping rather close tabs on the property projects that I am interested in. I just saw a recent transaction that seems to be defying the trend of the market and it is an increase in price compared to the last unit sold.

Taking into account the market rate rental, really lowballing monthly condo fees, his return based on his buying price should come in at 4% gross. I would imagine that someone with that profile (buying a small property and paying premium over market) would be an investor and not a home buyer. Using a low tax rate of 7%, his "net" return should be 3.7%. In reality, it would definitely be lower especially if any maintenance is needed. Take into account that I'm not counting any utilities fees at all. Throw those in and we'll see expenses go up by at least $150 and net returns might be just sitting over 3%.

A close confidant that I speak to regarding my house hunting told me that it is such a waste that the unit I have been watching got snapped up. However, thinking to myself, do I really want to buy a property that yields 3.7%? That is also the upper end estimate. The lower end estimate comes in at about 3.3%. Is that a good price to pay for a property?

I don't really think so. 3.7% means that it will take me 27 years to recover my capital. I'm actually aiming to snag something of at the very least 5% gross, which obviously does not exist in today's market.

However, if you compare to other properties in Singapore where the gross return is just over 3%, you're looking at slightly over 2.5% in terms of actual real returns. The other project that I was initially eying is yielding gross 3.2% and estimated net 2.6% on the high end. And this is calculated with the last price transacted, which is the lowest transacted price in the past 3 years.

From the data that I am looking, it is painting a conflicting picture. Projects setting new lows are still lower yielding than some projects which are setting new highs. Are some areas overvalued, while others are seen as undervalued? Perhaps the Singaporean property investor is looking at net yields of 3%, so anything over is cheap, and anything under is expensive.

My feeling of the general market sense is that, "pffft, all the naysayers about housing prices correcting and interest rates rising are all bullshit". There has been renewed volume as well as decent pricing in the recent launches as seen at Kingsford Waterbay, Sims Urban Oasis and Northpark Residences.

However, I still don't think that the worst is over yet. More supply will hit the market. Rental remain extremely muted. Interest rates have spiked (but correctly slightly) and we are moving closer to a possibility of interest rates moving up due to the Federal Reserve. Personally, I think that rising interest rates are a hugely overblown talking point about property. It affects the marginal homeowner, which meant they were overleveraged anyway. Building up a sensitivity analysis that takes into account that short term rates before adding bank spreads can hit up to 2.5% is not something crazy to do in my opinion.

Anyway, my personal point of view is that the Federal Reserve will not be able to raise rates to their normalization goal, not even close. I think they will raise rates, the world will freak the shit out, forcing them to plunge back to the zero bound. Rising rates followed by market hysteria could be a good catalyst that prompts the correction in housing prices, as well as correction in other assets.

Back to me though. I will continue to maintain a watchful eye on the projects that are on my list. I will slowly but surely finish the RES notes that my friend gave to me. I am hoping that with all my distractions and super happening social life, I can finish my readings by mid May. After that, I hope that I can finish my tail end of my property research and come up with a nice clean process to buy a house, with all the details jotted down.

My expectations for a correction is H2 2015 and I think an opportunity could arise as early as H1 2016. Pure, unadulterated, unsubstantiated, wild speculations.

Listen to 25 year olds talk about properties at your own damn risk.

Saturday, April 18, 2015

Upgrading yourself Online: Coursera and Udemy

I think that the soul grows old once we start to stop learning.

Shoutout to the sweet couple at Bf Gf Money Blog for this good lobang they found! 

Udemy is a website that is very similar to Coursera. I think those of you who have tried your hand at some free online courses must have definitely stumbled upon Coursera. I remember taking courses on Philosophy and Roman Architecture maybe 2 years ago when my mind was more curious about breadth of knowledge.

Nowadays, I have to grudgingly admit that I think about personal finance and money a lot. I know it is a problem, it is making me a more dull person. Who likes listening to people talk about the markets or the economy? I don't even watch news anymore, it is so inconsequential. I make it an extremely strong effort to steer clear away of all these topics when I am out with my friends. It makes social time a lot more fun by not being so serious all the time.

So, when I stumbled upon Udemy, it renewed my interests in learning new things once again. It is very similar to Coursera.

Coursera has free courses offered by universities and taught by professors. I find that the courses on Coursera are quite serious academic stuff and they are prepared and taught quite professionally. Why wouldn't they be? These professors have been doing it on a daily basis in real life for many years already! Courses like "Finance for Non-financial Professionals" and "Personal & Family Financial Planning" would probably be better, cheaper and less biased than paid ones you can find being advertised. There are plenty of other subjects covered other than stuffy business ones, and they go all over the place, like "Fundamentals of Human Nutrition" and Psychology, Music, Arts, Programming!

However, one of the biggest limitation of Coursera is that these courses are not "on-demand". That means that the courses and materials are only open for access during a certain period, which is usually the duration of the course and maybe a bit of extra. Another limitation are the types of courses available. Because they are university courses taught by professionals, there are limits to the type of content that is available, as well as the type of teachers conducting the course.

This is where Udemy comes in. All courses are on-demand, and the course contents are permanently available, meaning that access to them don't expire. This is really important if you want to learn something at your own pace, which is probably why we are turning to learning over the internet in the first place. Since pretty much anyone can sign up to publish and teach courses, you get people from all over who are very interested in teaching. The ability to teach isn't a piece of paper that says you are qualified to teach, but it is mostly the experience in the content and also a passion to share that knowledge.

One of the main things that I have found browsing the Udemy site is the content of the course. While Coursera teaches a lot of courses that you might be able to find in a university, many of them are purely academic and it is to increase your knowledge and understanding of a specific topic. On Udemy, it seems that most of the courses are aimed at teaching very immediate, actionable skillsets, such as language speaking, photography or software training. The goal at the end of the courses all seem very similar - to equip you the a specific skill that you were looking to acquire, and to ensure that you can perform that skill.

So, I find Coursera very enriching mentally, but not so useful in real life. I find Udemy much more focused on practical usage. Because of the focus on acquiring specific skills, many Udemy courses also teach you how to monetize that skill further down the road once you have practiced and improved it. Becoming a freelance web page designer, app builder, dog trainer, Airbnb host, bartender, photographer has never been so simple and easy before.

I think that I have shared this before casually perhaps just rambling in previous posts, but one of my interests is actually in education and teaching. If not for the lower pay and weirder hours (relative to by current job), I might have probably ended up as a teacher today.

So, it came to no surprise that the course that caught my eye the most is a course about teaching online! Very inception-ish, I know. Because of the really good deal being offered by Udemy now, all courses on their website cost only $19 to take (until Monday). This course about teaching online costs $499 regularly, so only paying $19 for this course would be a total steal for me! I think online teaching is a great idea. You develop and publish a course once, then collect passive income on it! It has no on-going costs, it has no expenses. There are no hassles involving renting a venue, organizing classes, dealing with tough or disruptive students. I don't see any RISKS involved in such an online venture. The worst case scenario? You spend a month planning, producing, publishing your content and you have no students. Even then, it would still be a learning experience!

Of course, the biggest problem that I have is that I don't really have anything to teach yet. I won't want to teach anything related to finance, unless it is in academia. Blowback can be huge, and basically anyone that takes your course will just be gunning for stock tips. Lame.

As much as I want to learn new things, I'm actually going to be very occupied over the next 2-3 months. I have a project at work ending soon, and I'll be starting a even bigger one after that. I'm already committed weekly to a language learning class. I also haven't finished reading my books and the RES course notes. I haven't started a series of posts that I have been wanting to do. And I also haven't trimmed down my watchlists of stocks. Seriously guys, where do all the free time go?

Anyway, the point of this post is to help shed some light that it is entirely possible to learn things and skills to upgrade yourself. Sign up for a course, acquire a skill, improve that skill and freelance on weekends. Design a logo once every weekend for $50 and that's $200 a month. Help a friend design a simple website for their small online business and charge them a rate below the market. Beef up your portfolio with small and simple jobs and one day who knows, with your own proprietary template, you can do quick weekend jobs and beef up your income by a sizable amount.

Too many people complain about their situations in life and what are all the reasons caused by everyone else that put them in such a position. They believe that where they are is where they always will be and they can't do anything to change their future.

The path to anywhere worth going isn't easy. Learning and developing a new skill isn't easy either. If it was easy, everyone could do it and it would become absolutely worthless.

Friday, April 17, 2015

It's Bubble O'clock on the HK Exchange!

Not to be mistaken with the HSI, the HKex is basically the Hong Kong version of our SGX.

The official quotes can be found on the HKex website itself, but I went over to look at Yahoo and Bloomberg to check out their ttm PE. Guess the ttm PE ratio!


Holy shit batman.

In the past month, the stock has rocketed 62% based on.... fundamentals? Who knows?

The last time we saw a rocketship move like this was just prior to the last financial crisis. Looks like things didn't end too well last time.

I wonder how things will end up this time?

Of course, things are always different this time around.

Thursday, April 16, 2015

40% Off Enough for Sarine Tech?

Since it's peak of $3.25 on 1st October 2014, Sarine Tech has shaved off a whooping 40% to be at $1.975 where it closed today.

Is this 40% discount enough to entice me to be an investor?

I've stumbled upon Sarine before and it is on my watchlist. Personally, I think diamonds as a decorative jewellery are great... for jewellery shops. My innate bias that will leave me a bachelor forever aside, their business is pretty niche and interesting, with not too many other competitors, I would imagine.

As with almost all the companies I invest in, I claim to know no special knowledge in whatever they do. In fact, I gloss over them most of the time. Their numbers are more important to me, and I must say that Sarine has very sexy margins for their business. In fact, it's bordering disgusting. 70% gross, 30% net? Good on them!

Nice balance sheet, zero debt. What's there to complain about?

Valuations though, that is getting out of hand. Even with a 40% decline in share price, guess what's the EV/EBITDA? 21. No point looking at P/B for a company like this.

T from apenquotes wrote his perspective about Sarine, which I thought was very detailed and well done. From a growth investor's point of view, Sarine was a buy for him and he added it to his portfolio. I think it's always good to look at the opposing point of view to help with your own argument.

However, to me, Sarine is just plainly and simply way overvalued (yes, still) even after considering its fantastic earnings growth in the past. Sure, earnings has doubled over the past 5 years. If history repeats itself, that would bring EV/EBITDA to 10 in 5 years time. I still think that's expensive.

Herein lies my problem why I can never be a growth investor. I am always skeptical about the growth of the company and its future. My mental hardwiring has been better built and set up for value investing. I'm not saying that one way is better than another, but that is just my style and preference.

I'm probably going to remove Sarine from my watchlist. Unless valuation drops another 50%, which I doubt it would, I ain't going to be interested. I'll leave this up to the quality and growth boys to play with this stock.

Wednesday, April 15, 2015

5 Years of Advanced Pay

One of my inspiration to set up my local SGX portfolio is actually based on what I learnt from reading the DIY Income Investor who is based in the UK.

I've always believed that buying is the easiest part about investing. Don't know what to buy? Surf the net for 5 minutes. There are tons of "gurus" out there trying to sell you things that they are "buying as well". Try to be more discerning and know how to cut through the crap. Advise on what to buy is everywhere, all around you. The hardest part is actually selling. I don't even think I do it right most of the time myself, but I'm trying to learn, adapt and improve.

So it was a very refreshing for me to see SillyInvestor pocketing some gains based on what looks like a variation of the DIY Income Investor's sell rule. SI took capital gains worth 4 years of income, while the DIY Income Investor stretches it a bit more and tries to go for 5 years of income of capital gains.

Personally, I very much like this sell rule because it helps you harvest your stocks while giving you a comforting psychological reason for doing so. I think for me, this is especially useful because I invest mainly for dividend yield. My preference is dividend yield. I don't really like capital gains very much.

"Investing in stocks for yield? STUPID OR WHAT? Stocks for capital gains, bonds for yield! Go back to school! Boooo!"

All right buddy, whatever floats your goat.

So for my previous portfolio sales, if I look at it in "years of income pocketed", then it looks like this:

CDW gave me 41% of capital gains, which is just shy under 5 years of income.
Hock Lian Seng gave me 41% of capital gains, which is 8 years of income.

Today I just sold off my nibble with Falcon Energy for 25.5% capital gains. This sale of Falcon Energy is an exact pocketing of 5 years of future income. However, if adding in transaction costs, it would be similar to CDW, just shy under 5 years of income.

At $0.295 per share, Falcon Energy had a ttm DPU of $0.015, which translate to a current yield of 5.1%. When I first bought Falcon Energy at $0.235, the yield was a lot more attractive at 6.4%, but the run up in price has compressed it yields.

On a macro note, I still do not believe that Oil has made a bottom yet. Of the 3 criteria I am looking out for, the only thing that I have seen so far is the seeming reversal of the USD. Actual fear has been increasing if measured in outflow from USO although it does not look sustained yet and rigs are still falling, but it is decelerating. Signs are pointing that we are around the bottom. Have we past it? Many people seem to think so, but I am less hopeful. My concession though is that I think that the USD has topped out and the unwind slowly begins. That would be supportive of oil prices, which in turns helps the industry.

Based on my previous forecast (hatam anyhow guessing), I am looking for the signs to signal me to buy in May. I honestly do like stocks like Keppel and SembCorp, but the macro factors are not agreeing with me just yet. Of course if you look at price action, they both seem to have made good recoveries so far. Its not easy to find perfect investments when all the stars have aligned. If I had that skill, I wouldn't be here blogging.

I would be in my penthouse taking a massive morning dump while overlooking New York City.

Get Paid to take out a Housing Loan

Where? Spain. The banks will pay you to have an outstanding loan with them.

Whenever I think we are approaching the limits of human stupidity and things just can't get any worse, things get worse and I suddenly remember that there is no limit.

To infinity and beyond.

Tuesday, April 14, 2015

Who Said Money Can't Buy Happiness?

Of course, I know that intangible things like "love from family and friends", "being healthy" and "pursuing a passion" are some of the most common things that people derive happiness from, but a huge misconception is that these things come a whole lot easier with money. Money doesn't have to play a huge role in that. Poor and rich alike both strive for these things.

Haven't you heard about celebrities complaining how they had some bad experiences with "friends" that only hung out with them for their money? Or how rich bachelors have problems finding a girl that isn't after their money? Sure, you can buy your girlfriend a giant diamond ring, but do you really think that it would make her love you more? Pursuit of passions comes in different price tags too. A good book or a simple hobby like jogging can be enjoyed by anybody. If you need to go hunting for extreme wildlife on an illegal safari in Africa, maybe, just maybe, you need a bit too much to get you a hard-on about life.

But having a big mansion to cry about your failures in life while drowning yourself in your favourite 25 year whiskey as your super hot bimbo trophy wife makes you your favourite caviar, foie gras and lobster sandwich.... that sure helps getting over it and moving on.

Personally, I am a very strong disbeliever of upsizing you lifestyle as your income grows. I'm still going to visit my favourite hawker uncle to eat my favourite oyster omelette whether my bank account has $1,000 or $1 million. The only difference is that I can buy $10 instead of $6, and I can afford to go for multiple heart bypasses.

While I think that for most things in life have to be compared on a relative scale to get a clearer picture and a better, more fluid, more realistic comparison and standing, I think that lifestyle goals should be in absolutes. And here's some proof about that.

I was talking to a friend, and my proposition was that the key to happiness is having low expectations in life, and mentally giving yourself a lot of excuses why you should realistically have low expectations (multiple factors each with a margin of error, multiplied out, how can you be certain of anything?). So far, it has served me pretty well.

He then went on to agree with me, but to build up on my line of thought that turned out to be very two dimensional. He said that my current mode of thinking is very good about being instantly happy with the outcome of individual events, but it doesn't say anything about your happiness after that in retrospect and it does not say anything about how you view your life, which is a series of many many events.

He thinks that happiness in a 3D state involves having a process after the event, to register happy outcomes or to correct and deal with unhappy outcomes. This can be done through either a thought process to develop synthetic happiness, or else by having a problem solving process that aims to increase the probability of a happy outcome the next time the event occurs.

Sorry, I don't know if I ventured too far off into very philo-esque territory and it is becoming hard to follow my train of thought, but after re-reading what I just wrote, although seemingly irrelevant, I think that it is related to the topic of being happy so I shall just leave it here in this post as part of my insane ramblings. I know it isn't anything new, but perhaps it might be enlightening to some to read a different perspective on happiness.

TL;DR: Money isn't everything, but it sure as hell helps a lot. Happiness is about managing your expectations, not about collecting expensive things or expensive experiences.

Bonus Video: Synthesize your own happiness from unfavourable outcomes

Monday, April 13, 2015

MoolsahSense: Seoul Yummy Follow-up

I blogged about Seoul Yummy, the 3rd campaign of Moolahsense a few weeks ago. Just thought I'd give some updates about it.

Over the weekend, I decided to visit their flagship store at Bugis+ to try out their food with my friend who also enjoys Korean culture and cuisine!

(Photo Credits: Eugenia from Spacestardom)

They have a policy of not taking reservation for their Bugis outlet after 6pm, and I can understand why. I was supposed to meet my friend for dinner at 7pm, but she arrived 15 minutes earlier, so she went to queue. Once I arrived, she had just reached the front of what was a small queue and we were immediately seated. 30 minutes into the meal, I saw a long queue outside! Not Llao Llao long, but still a pretty decent queue given the array of other food choices available in the area.

We ordered their signature combo set and got potato pancake, budaejigae (부대찌개) and ice cream. I was quite disappointed that their bingsoo was not available, bummer.

As always, I am a horrible food blogger because I always forget to take photos of my food and I just whack! So the only photo I have is of the budaejigae (because it wasn't something I could eat straight away), which was actually quite generous with the amount of meat. Since I also have no skill and I never use filter, it looks a lot uglier than it actually was!

The banchan wasn't that awesome to me. There were just 6 of them. Kimchi, ikan bilis, tofu and a few others. I enjoyed the tofu. The kimchi was very normal, a bit on the more mild side, not anything to find fault with, but not anything to be excited about.

The potato pancake was... like prata. It was quite small, perhaps 15cm in diameter? To be totally honest, I have never had Korean potato pancake before, although I have had many other kind of Korean pancakes before. It had the texture of very chewy prata. Maybe they used too much flour for this one? I don't know, but I thought it was really weird. If they had indian curry instead of the soy-based sauce, I would have probably enjoyed the dish more, haha!

The budaejigae was actually very well sized. Very authentic looking with the baked beans, spam and hot dogs. The soup was tasty and well seasoned. There was enough noodles for both of us, and there was plenty of meat. I think that is the usual problem with budaejigae, skimping on the meat. That was not a problem here.

They place a portable gas stove on the table and put the wok/pot with the jigae on top of it, and let it heat up and cook in front of you which is the norm at most Korean places. The only issue was that for some reason our gas stove was super slow! I checked to make sure that it was at the biggest flame, but the table beside us that sat down later got their food boiling before we did! Minor gripe, but because of the slow cooking, we were actually stuck in the restaurant for a pretty long time. They almost had a full turnover of diners since we were just so slow. Not a problem for me though since my friend and I was busy chatting, but it could be a problem for other people.

The ice cream came on a pretty plate/bowl thingy and it was just normal ice cream. I mean, how good can restaurant ice cream get? No bingsoo, haiz.

I thought that the service was good. It was easy to catch the service staff attention and they seemed to know their jobs very well. The branch seemed to have two managers supervising and they were doing a good job keeping everything smooth running in my opinion.

With 2 drinks, our total bill came up to $31 per person nett. I think it was a bit pricey for the food we got, but then again I also think that we made bad choices. I would have ordered from the ultimate two combo and have kimchi pancake, kimchi fried rice, doenjangjigae and a meat side dish, but "Army Stew" is all the rage at Korean places these days.

From the MoolahSense website, I can see that this current campaign has already managed to raise it's target amount of money of $200,000 and have exceeded that by amount $50,000. The amortizing rate of 10% translates to about a 5.5% returns in a calculation that we are more familiar with. Since it has exceeded its target amount, the rate will probably be bid lower, so perhaps returns of 5% would be more realistic for investors now.

I don't think I am an expert in Korean food, but I think I eat Korean food a lot more than most people do. When I was younger, the first vegetable that I enjoyed eating was kimchi. After being exposed to Korean cuisine from my own growing up days and also from visiting Korea, I know what good Korean food tastes like and I also know that it doesn't have to be expensive to be good. Unfortunately, although Seoul Yummy ticks all the boxes for me as a business in terms of service and operations, I thought the food could have been better, especially for the price that they are charging.

I will not be taking part in their campaign, but I wish them luck! Hopefully I have a better experience there the next time I go too, haha!

On a final note, Dollars & Sense posted an article about P2P lending, and I will be checking out the other people in the scene, Capital Match and Funding Societies.

Quis custodiet ipsos custodes?

Translated from Latin: Who will guard the guards themselves?

Or in this case twisting the meaning a little, who will protect you from the protectors?

I just saw this post from ZH, which is absolutely disgusting.

In the first video, it's showed at least 5 police officers beating up a tasered man who is on the floor. The rest are casually watching.

In the second video, police get into a scuffle with a family, beat them, tase them and then executes one of the boys. The ironic part? The family was a travelling religious band.

I was already sick in my stomach from watching a previous video of the guy getting shot 8 times in the back from running away from a cop.

This is just too much. After Eric Garner (again murdered by police on camera), I would have thought that the police would actively try to control their excessive use of force for everyday situations. Clearly, they have not.

While many are saying that police violence is on the rise, others are saying the AWARENESS of police violence is on the rise with the advent of smartphones and other video recording advices. I think both.

I think too many people really take the safety of Singapore for granted. If something like this happened here, it would be headline news for weeks. In America, a police officer kills someone every 6.5 hours. I guess since it's so common, nobody really cares anymore.

I hear damn a lot of talk about people fed up with Singapore and want to migrate, but no action. Just trawl through comment sections from cesspools like TR Emeritus and you'll see what I mean. They are people who just rage against the system, but obviously don't do anything about it. I don't know how these people will migrate though, since a 2.8% fare hike in public transport ruffles their panties. Maybe they can sneak onto a bus to JB or something.

I have been to many places around the world. There are very very few places which I find are safer than Singapore. Most of those safe cities? Small town community with like less than 300 people. Which is a whole different situation from a freaking tiny island with 5+ million people running around.

I don't know about you, but I have trouble trying to recall when was the last time I saw a policeman in Singapore. And that is a good thing in my opinion. Since I usually only talk about economic progress on this blog, here's to us winning America in social progress as well.

Sunday, April 12, 2015

Sunday Rant

Question everything, or else know nothing

This isn't the blog that gives you investment tips and make you rich. This is a blog about my own personal financial journey. Sure, I share bits and bobs of what I am doing, sometimes in such an excited and explicit fashion that it is so easy to "copy trade" me. Maybe I even go a bit overboard and seem to strongly recommend a certain investment. Don't mind me, I do get carried away sometimes, which is why I don't care how fugly my blog looks with that hideous disclaimer running down the left side bar on every page, but I think that it is absolutely necessary for readers to know that this is the internet, where everything can be made up. If you are using REAL money to follow people you don't know based on what they type and post on the internet, good luck to you buddy.

Of course all the bulls out there bloody hate to read my posts where I talk shit about the market, how it's overvalued and stuff. I'm a fringe nut that keeps rattling on about the TPTB and crazy conspiracy theories. I get it. Nobody enjoys getting their default view challenged, myself included.

"What a fucker, hoping for the markets to crash"

Good thing I'm not writing comments on other people's blog about how I think that they are wrong and how it will be so funny when they are wrong.

You know why I don't? Because I don't really care.

Jesse Felder from the Felder Report writes the best article to describe how I am feeling right now.

I think it is absolutely insane that the current mindset of the "passive investor" sheep herd is that you have to be all-in 100% stocks right now, or else you haven't got the balls to invest or you are not investing correctly.

Were these the same people that were 100% long gold in the 2000s or 100% short financials during the GFC? Of course not. These people aren't "investors". They are "stock investors". Buy stocks. Buy them low, buy them high, buy them all day. Bear market? Buy! Bull market? Buy! Seriously guys, whatever. Whatever floats your boat, bakes your cake and makes you happy and makes you money, I guess that's the correct strategy for you.

Am I sounding caustic? Maybe because I am trying to. If I only talk about rainbows and ponies, I don't think people will understand the point that I am trying to dive here that the markets can be a vicious and evil place. Not just the stock market, but all the financial markets. You think the bond market is easier than the stock market? You'd get your balls bitten off all the same, but in double-quick time.

Like the folks from Biwii puts it, it's fine to sit in cash when the crystal ball is foggy.

If you think that you need to be 100% in stocks right now to prove that you are "investing the correct way", go ahead. Show me what you are made of. No guts, no glory, right?

But might I also remind you, no brains, same story.

Lately I've been listening to progressive house and chillstep, so here's something to cool everyone down this hot day.

Saturday, April 11, 2015

Oh China, That Don't Impress Me Much

Anyone who is reading the right kind of news would know the insane move that has happened in China stocks. A massive 5 sigma move to the upside as calculated by Tiho from ASSOL.

Guess what? Back in Jul 2014, I did give a shoutout that I was eyeballing China as a contrarian play with a lot of potential. It was about 38 when I talked about it, and it just went up to freaking 51.

That's a pretty intense 34% explosion in roughly only 9 months. However, most of the move was made in the past month. 24% since March. Sheer madness.

Guess what again? I did queue up and placed bids for the UOB China ETF back then in Jul 2014, but my orders never got filled. After the run up in September, I thought for sure it's going to cool off for quite a bit and I could enter in a long term position. Instead, it has been marching steadily up since Oct until it's crazy parabolic now.

(From Jul 2014. Up 34% since then. 100% more to go to catch up with SPY?)

Sure, it's hella far away from catching up to other indices around the world so upside might seem plausible, but given the time factor in this equation, I think not. I think China stocks have been priced far too pessimistically just a year ago, but with the intensity of this move, I question if this upside swing is sustainable. I highly doubt it is.

Some of the spillover effects has leaked into other Asian markets, but to a much lesser degree. I have long held the view that places like HK and SG are cheap markets to be in, but vulnerable to collateral damage if there is a financial fallout. Other Asian markets like Malaysia and Indonesia, not really.

If the water settles down a little, I would be more bold in entering my position. If my order had filled in Jul 2014, I would most definitely confirm plus chop be taking my money out and locking in my profits now. I haven't seen a more clear cut example of a panic-buying, market melt-up like this in a while.

While China has much less ridiculous valuation that most of its Western peers, China is not without its own problems.

New paradigm, or same old shit? You decide.

It's funny to me, because I still much rather invest in Russia than China, but I know most people prefer the opposite. YTD, Russia is up 21%.

I have been putting my money where my mouth is at since I blogged about it in Sep 2014 all the way until Mar 2015. Because since market soundbites dictates that "only losers average down losers", I have been a labelled loser engaging in this losing strategy by averaging down my losing positions (yes, my precious metals positions too). My current "averaging my losses" strategy for Russia is up 7%. I expect this to go up a lot more in the long term future. Sorry for the disappointment lads, but I don't invest just to beautify my monthly report card to impress you.