Friday, July 31, 2015

Transport Review for Cyclists and PMDs... Finally!


One of the things I mentioned just a few weeks ago was about the state of the transport system in Singapore in accommodating "others" which don't happen to be cars or pedestrians.

Cutely enough, the Straits Times has announced that the LTA will be doing a review about this.

There is a survey thingy, I did it halfway but I stopped. I honestly can't be bothered to fill it up because my thoughts and opinions are being too narrowly classified.

In my mind, this is how I would like the foothpaths of Singapore to be like.  The foothpaths should be widened and have a clear line marked through it.


All cyclists and all PMD (Personal Mobility Devices), electric or not, should all be on the footpath and NOT on the main road. However, the flow of traffic should be in 1 direction only. The direction of traffic should follow the road beside it.

There should be a maximum speed limit of all foothpath users. Perhaps 10km/h if you are travelling at a normal speed, with allowances for overtaking.

If cyclists and PMD users need to travel in the other direction, they should cross the road.

Pedestrians and wheelchair users of course should be able to go in both directions.

If cyclists demand that they want to use the main road, they should all be subject to the same traffic laws as the rest of the road vehicles.

FOR EXAMPLE: Red light = stop. Not suka-suka turn into a "pedestrian" and follow the green pedestrian light, then cross finish become "car" again, wtf.

What does all this have to do with finance? Absolutely nothing. But it annoys the shit out of me that cyclist think they always have right of way on the road and they can also, as and when it suits them, move over onto the foothpath and terrorize pedestrians.

Right of way on the road doesn't mean jack shit if you end up dead.

How To Trade Stocks like a China Farmer

Why even bother working when Chinese farmers can make 4000% in 5 years trading stocks?


Step 1: Invest with your life savings. Emergency fund? Fuck that shit
Step 2: Invest with your relatives and friends money. A good person helps others make more money
Step 3: Don't learn anything new - skills picked up from farming are directly applicable to the stock market
Step 4: Place it all into 1 stock. Only stupid people who pick losers need to "diversify"
Step 5: Leverage that bitch up. When you know you're right, you're right!



Thursday, July 30, 2015

Rate Hike later, probably, eventually... or maybe never?

Seriously, is this a big surprise to anybody? 



Who knows what could happen? Maybe the market corrects then Yellen pussies out and hold off the rate hike. Why not? The Fed has been saying they will be raising rates since forever.


Did everyone get suckered? Good job Yellen!

Wednesday, July 29, 2015

Time for the bottom in Oil?



From 1 year ago,
Keppel Corp has fallen from 11.1 to 7.95, which is a 28% decline.
Semb Corp has fallen from 5.48 to 3.77, which is a 31% decline.
At the same time, WTI has fallen from $102 to just $47.50 a barrel.

It seems that both KepCorp and SembCorp has been trading as equity proxies for crude oil itself.

If oil goes down further, will both of these counters drop even more?
If the stock market suddenly fall, will both of these counters drop even more?

Personally, I think that we are seeing the final gasps for an oil bottom. I've been watching the bounce and recovery for a while and I believe that we have all the 3 things needed for an oil bottom. Rig declines has decelerated, there is general fear in the oil market (smell of the headlines plus net positioning of traders) and I feel that the USD has topped out. This makes me believe that we will be forming a higher low in oil and that we signal to me that oil has really bottomed out.




It's funny how I've been waiting for so many other cycles to bottom out and recover, but it seems the oil crash and recovery has just leapfrogged ahead of all the rest.

Because of this rationale that oil price is at a very cheap price now, I feel very tempted to buy into "oil proxies" and benefit from the recovery of oil.

However, the main thing that is concerning me is with regards to the bigger picture. I don't need to pull out any fancy certs to point of that many stock indices are making lower highs. If we truly are in a bear market in the near future, then I see no reprieve even for oil stocks as selling will be happening across all industries and sectors. It would be foolish to buy now since I would be able to pick them up cheaper in the future.

The fact of the matter is that I find both Keppel and SembCorp to be cheap at these prices, so I do think that I will pick up a lot or few of them in the very near future around these prices. Perhaps I should also be looking into other counters from this sector too.

If oil prices fall, be it from continued pressure on oil prices or a global stock rout, what will I do?

Talk is cheap, very very cheap these days. Buy low sell high? Or buy high and then panic sell? Or sit like a statue and wait for the bottom? I scoff at the idea that someone can accurate pinpoint the bottom and massively load up all their positions at that price (or the top and sell out, for that matter). I'm perfectly fine not being able to buy at the absolute bottom. A good deal is still a good deal for me.

I'm going to buy even more if we head even lower. If I loved it at this price, won't I love it even more if it gets cheaper?

Saturday, July 25, 2015

SBB or Fixed Deposits?

After reading the Straits Times article yesterday and Kyith's post on Investment Moats, I just wanted to share my thoughts on this.

Here are the 2 data sources, 1 from the ST and 1 from FSM.



As you can see from the FD promos, for 1 year maturity, rates ranges from 1.45% up to 1.8%. Comparatively, to hold an SGS and get similar yield to that requires 4 years.

Knowing this is one thing, but how do you apply this knowledge to decide if you should put your money into a fixed deposit or SBB? This is just my personal train of thought, so I could be wrong.


Of course this table is rather simplistic, but it highlights I think the 2 key factors that affect the quantitative aspect of these 2 products, the returns.

A lot of things could happen in 4 years. Interest rates could go up. People who have fixed deposits would be able to roll into higher rates and reap higher returns. Of course interest rates could also drop down (below zero maybe? Haha) and then fixed deposits would have to be rolled into lower rates making the SSB a better choice.

In short, if you think interest rates will rise, fixed deposits would be better. If you think interest rates will fall, SSBs would be better. If you think that nothing is going to happen, then timeframe will be the decision maker.

Qualitatively, of course the 2 products are rather different. Fixed deposits have higher minimum capital requirements and penalty for early redemption, but they are easy to start and have high maximum ceilings, SSBs start from only $500 and early redemption will come with accrued interest, but they are more complex to start since they require a CDP account and some knowledge of the auction process. The maximum amount is also only $100,000, which is much lower compared to fixed deposits. (Haha, I'm saying it as if it's a small amount!)

However, I think that both Fixed Deposits and SSBs should be used as "Cash Management" tools and it is not a substitute for long-term investing. "Investing" in fixed deposits or SSBs is not a good idea if you ask me. You need to assess your own personal situation, future life events and financial goals to know if you should put your money in cash alternatives, stick it in CPF or use it to invest more aggressively.

I think that money kept in FDs or SSBs should be semi-liquid, meaning that it can be liquidated within a month in case of emergency or a near-term expense. While SSBs liquidation follows a monthly schedule, FDs are quicker to liquidate and this should be a main consideration between choosing between FDs or SSBs. Money that is earmarked to be spent within a few years shouldn't go into investments that have capital risks, so these sort of monies ought to be placed in a FD or an SSB, in my opinion.

I know the usual wisdom is to keep 12 months of expenses in cash / money markets / fixed deposits for quick redemption, however I would like to propose an alternative to this.

Perhaps 2 months of expenses can be kept in cash / money markets or a minimum amount of $10,000 in a FD (since fixed deposits usually require a minimum sum), then the remainder could be kept in SSBs.

Since this "emergency fund" will always be in cash or substitutes, splitting between the 2 ensures you have ample liquidity for the first months of an emergency from breaking the fixed deposit while your later months will be covered after your have placed a redemption order for your SSBs. However, should nothing happen, your SSB amount would be steadily generating higher returns than a FD after the initial few years.

Personally, my emergency fund is with OCBC earning 2.25%, which is much higher than both the SSB and Fixed Deposits. However, if your emergency fund is larger than $60k, then by all means consider these for the excess monies. But just because the SSB and FDs exist does not mean you should put your money there.

I always like this saying that I heard at work recently. "Can it be done? Cannnnnnnnn. Should it be done? Maybe not. Can do doesn't mean should do." 

Now, the next big question is, when should an SSB be redeemed and rolled into another SSB with a higher yield curve? This is a complicated question, but I will try to tackle it in the months to come!

Friday, July 24, 2015

I Like Ugly

Honestly, the market is boring the hell out of me. There is nothing interesting anymore, which is why I am blogging less frequently.

Anyway, I've been looking at local stocks and I've found quite a few ugly ass stocks which I am considering to buy soon.

Ascendas HTrust
Asian Pay TV
BRC Asia
Capita Commercial
CDL HTrust
CNMC Goldmine
F&N
Falcon Energy
Far East HTrust
Golden-Agri
Hotung Inv
HPH Trust
Keppel Corp
Mapletree Commercial
Olam
OUE Limited
Sabana REIT
Second Chance
Sembcorp Industries
Sin Heng Mech
Super Group
Suntec REIT

It's a long list of stocks, and I don't think that they are all fundamentally awesome, but as charts go, they have butt ugly charts. 

Why people buy at all-time highs is beyond me. I love looking for these potentially unloved gems. No competition, no news, no hype. This is totally my style.

Since I use SCB as my broker, maybe I'll throw some money at a few of these stocks and see how they go. Or maybe I'll just sit back and continue on with the rest of my life waiting for something interesting to happen in the markets.

Wednesday, July 22, 2015

Going Nowhere Til We Get Somewhere


Dear Bob had quite a few nuggets of wisdom to share, but I like #4 best, which is:

"Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways"

Based on capital returns of the SPY as a proxy for the S&P500, capital returns has been a whooping 14.7% annually compounded over the 5 years.

Exponential rapidly rising market? Check.

Add this to the fact that the S&P500 has been pissing around 2040 and 2140 for the past 6 months, which is an extremely tight range of about 5%.

Going sideways for a pretty long while? Check.

So either the US markets surprise us by breaking out of this tight 6 month range and head towards dotcom bubble valuations (since based on valuations the only other time in history where the stock market has been more richly valued is during the dotcom bubble... but that all turned out fine, right?), or everyone suddenly realizes how ridiculous things are and we head substantially lower.

Gone are the days when people talk about market cycles and look at the history of the markets. Stocks can go only up these days. If they are going down, the market breaks, halts or selling is banned.

Who knows what could happen? Maybe the market corrects then Yellen pussies out and hold off the rate hike. Why not? The Fed has been saying they will be raising rates since forever.


I see plenty of things that can go wrong and bring the market down with it, and very few things that will make everything better and send the market up.

The more days go by, the more I feel confident that this ship is going down. I believe in market cycles and this run has just gone on for way too long.

Nobody rings a bell at the top so everyone can exit their positions at all-time highs in an orderly manner. It's gonna be ugly.

And there's where I hope we are going to.

Back Up The Truck Boys, This Is It


This chart is from Tiho at ASSOL.

Gold miners have been slaughtered and down pretty much 50% in the last 12 months (link to GDX charts). The 10% drop the day before was spectacular. My total position is probably down about 30% I think, and it is a rather large position.

I was buying at -15% 5-year compounded returns, but we've been just been drifting lower. Too early maybe?

No matter, I'm grabbing my balls and hitting this for another round. I want to buy low and I want to sell high. I can't know for sure if we go up from here or if we continue going down, but after looking at the odds and the risk that I'm taking, I'm putting my money where my mouth is at. I'm increasing my position in the miners by 25%.

The 5 year compounded rolling returns of the Philly GSI is currently at the lowest ever recorded figure since '88.

Even if we only drift back to 5%, that is going to be +25% from here. Yeah, you did the math too? Sexy, isn't it?

So how low can it go? (Yes, that post is about Silver, but the PM trade is all in this together)

Honestly, I don't know, but I'm probably chasing this one to zero boys.

Watch me blow up in a spectacular ball of flames.


This is the washout that I've been waiting for. Will I get washed out? Unleveraged investments with my entire portfolio about 65% cash. 

Not a snowball's chance in hell.

Tuesday, July 21, 2015

Cold Yet Or Not?



"Eh, cold yet or not?"

"Mmm... like no leh."

"Orh, then wait lor"



ST reports that MAS MD said that "the softening we've seen is really not all that much", "So its still premature to consider removing any of the cooling measures in place".

I don't really care that much what property experts / industry experts / analysts / your property agent says unless you are telling me that they can affect the outcome of such decisions.

Don't even need to try and guess when they will remove the cooling measures.
They haven't even reached the point where they feel like they should think about it yet.

Maybe a bigger correction of more than 10% is needed to force out cooling measures.

As someone that does not own a house, but is planning to in the near future, I'm hoping for property prices to drop.

Singapore Savings Bond starts 1 Oct!


Wa hot hot hot, fresh off the press!

As CNA reports, and confirmed by the MAS press release, the issue will begin on 1st October 2015 and applications for it will start 1st September 2015.

Personally, I'll just apply for perhaps $1k worth of the SSB so that I understand how it works and the whole process.

The reason why I will not be chionging for as much as I can is because I am sure that there is going to be much better opportunities at hand in the near future. People need to know when and why they should use the SSB as a financial product. Just because it is available doesn't mean that we should buy it.

Read up more about the Singapore Savings Bond in an earlier post that I wrote.

Sunday, July 19, 2015

Term Insurance: DPI vs non-DPI

Whoa, short hiatus. I was overseas for a short break over this long weekend, but I'm back now! Nothing much has been going on with the markets lately, it's a pretty big yawn, so gonna talk about some non-market stuff.

Since the launch of the CompareFirst website, insurance pricing of simple plain vanilla plans has become a lot more transparent to the consumer.

I think this is a good thing because with more information, people who know how to use that information are able to make better decisions.

So anyway, I decided to compare between DPI and non-DPI term insurance. I took my age, picked a sum assured of $100k and chose no critical illness benefit, and these are what I got to compare.


Obviously, the biggest difference is that one is more expensive than the other - $7 to be exact, or 14.5%.


If you are talking about just plain vanilla term insurance, the difference between the 2 is nothing, except one is more expensive than the other.

Why is non-DPI insurance more expensive? I think there are 2 parts.

The first part is the product. DPI insurance has limitations and can only be covered up to $400,000. Also, DPI insurance is really plain Jane, while non-DPI insurance allows you to add on other riders for all those bells and whistles that you like. DPI insurance only has critical illness rider, while non-DPI insurance can come with riders like Personal Accident and Family Income.

The second part is the cost of distribution. Cost of distribution has 2 parts, one is the commission, the other is the cost of marketing the products. Agent commission here is clear cut. in DPI insurance, there are no commission costs. For non-DPI products, there may be a small commission to the agent that serves you. DPI insurance is not heavily marketed and advertised, while non-DPI insurance is a whole product for the company to manage, which includes printing and distributing marketing materials.

If you are looking at term insurance, which is better, DPI or non-DPI?

Clearly, the answer is that it depends on what you want. (you might want to read more about my personal views on insurance here)

If you want the extra riders that non-DPI insurance can offer, then non-DPI sounds better.
If you just want a cheap insurance with a clear and simple policy, DPI sounds better.

If you don't know what you want, you better not put your signature anywhere, anyhow. If don't know, don't do!

Thursday, July 16, 2015

Housing Boom After Elections?

Pffft, and you guys think that I'm the crazy one with conspiracy theories?


Property cooling measures being influenced by elections is just about one of the stupidest theories that I've ever heard, and yet every mother son donkey hamster cow chicken keeps repeating it.

Also along the same train of thought is that the "gahmen" will give out a lot of "freebies/goodies" when elections are coming to "keep everyone happy".


Apparently this is the type of government that everyone want, giving them kool-aid whenever they want or else they will throw a tantrum. Be a well-behaved sedated farm animal. Aww, good boy!

I refuse to believe that our government policies are based on "making the Yes-men happy" but are instead focused on "what is best for everyone in the long run". This article, along with other things I have seen coming from the government shows that their line of thinking is not so simple and self-serving.

If you think that the point of housing policy is to turn existing home owners / property speculators into multi-millionaires, oh boy, do I think that you are wrong.

I'm just speculating here (in thoughts, not in property, hur hur), but I think that the government's aim for their housing policy is to ensure that as many Singaporeans as possible are able to own a house without being over-leveraged.

Falling housing prices make it easier for more people get own property. Yes, no one likes a market price lower than their entry price, but what are they going to do about it? That's right, nothing. Rising housing prices does the opposite and makes houses more expensive for people to own, while enriching existing home owners and penalizing the lower income groups for not owning as much capital. Hmmm, if I was the government, what would I want?

If they have to kill the private market to get what they want, so be it. 85% of us live in public housing anyway. Why should the government ease cooling measures so that the top 15% of Singaporeans with private property can make more money?

Rennie Whang makes the case that things are no longer frothy and are instead turning bad, especially since jobs are being lost in the real estate and construction industry. I don't think the government will shed a tear about real estate agents losing their jobs, sorry.

I'm with UOB that the housing issue will get worse before cooling measures are lifted. Like the BNP article I talked about before, they address and discuss the real "market factors" and don't talk about "elections".

As the MND Minister said before, they want a balance between "buyers and sellers". When the supply boat finally comes to shore as the months pass, people will realize the supply shock and prices will slump. Since the minister says "a collapse in the housing market benefits no one", that is when I think they will remove some of the cooling measures. I think some measures are here to stay for good. Contrary to what he said, a collapse would benefit young and single 1st time buyers like me who have been sidelined out of the market, either by price or by policy.

Bottom line: The housing market and property cooling measures have got nothing to do with elections.



Although I believe that the government will remove cooling measures after a correction, a correction might happen before elections proving both our theories right.

I still believe that the government, as our chief social engineer, is prepared to kill off multiple home owners / property investors so that they can control housing and use it as a policy tool in the future. Hard to imagine? They would never do that? Well, what have they already done with transportation? Oh yeah, that's right....

Wednesday, July 15, 2015

[SGX Portfolio] Dipping toes back into OUE Comm REIT

I exited my position in OUE Comm REIT just very recently because it seemed very fair valued to me, plus I did not want to end up with odd lots, inject a lot of capital and increase my position within my portfolio.

For about a year with this investment I made by 7.2% which is rather decent in my opinion.

Key numbers are $0.92 which is the pro-forma NAV, $0.81 which is the closing price which helps calculates the TERP of $0.731.

I sold off my previous stake at $0.815 which was above the closing price they used, so that's a point for me.

Today I bought back a nibble at a price of $0.705 which is 4% below the TERP price.

With a 9-20 rights issue and my previous stake of 1000 shares, I would have to pony up and buy an additional 1000 shares so that I can exercise my 900 rights and not end up with any odd lots. That would require me an additional $1,300 of capital to make full use of the rights and have my capital investment to be at the TERP price of $0.731.

So not only did I make a small profit by selling my stake off CR, I also managed to reduce myself to a much more comfortable position and get in with a lower price.

Still, I don't like the fact that the REIT only has 2 (3 after the acquisition) properties, but the price is right for me to go back in for a little nibble!

Tuesday, July 14, 2015

The Nostramoney Fortune Telling Machine


<Please choose prediction accuracy level>

<$2, $10, $50>

<$2 selected. Please insert $2 to begin>

*Oohmmmmmmmmmmm*

<Prediction Generated>

Prediction:
US Dollar makes a cyclical peak and falls for at least the rest of 2016
Oil makes a higher low and continues upwards
US markets falls off a cliff

<Thank you, have a nice day>

Monday, July 13, 2015

How Much Lower Can China Go?

Much much much much lower.


As "cheap" as I think the China markets are, it isn't really a "market" if people aren't allowed to sell.

The amount of margin debt is extremely staggering. Until all those farmers go back to work the fields, you can rest assure that it is going to keep on slumping lower and lower and lower and maybe close indefinitely.

I still think the long term prospects of China is pretty good, but their crash is far from over in my opinion. The system needs a good flushing out, and while it might be much more obvious in China, there are like many other systems that need a good flushing as well.

Sunday, July 12, 2015

Transport Thoughts for the Future



I've talked about self-driving cars before, but after seeing this video I realized just how advanced and far the technology has come!

I am really excited about the future of self-driving cars. Imagine if you can travel back and forth with a self driving car, you could prepare your agenda for the day and read your emails on the way to work. If you had a long night, you could even take a nap!

I really like the prospect of this, especially from a safety standpoint. Maybe in the future our children will wonder why anyone would be so stupid to dangerously "manually" pilot a car and risk an accident.

I'm still waiting for the day when public transport turns 24/7 and that people will realize that the cost and "prestige" of owning a car is ridiculous for the premium paid for transportation.

In the big picture perspective, I think too many people are looking at the recent SMRT fiasco in absolute terms. I was out on Tuesday when the trains broke down too, so I was affected too. I have every right to complain, but I'm taking it in stride. I think the only people that should complain are SMRT shareholders if they kena fined, haha. I just met a friend that came back from Europe that was bitching about all the public transport strikes that screwed over his travelling plans. This incident was unfortunate, but really what is the downtime as a whole? I still think that our public transport system is good.

Another thing that I'd like to also talk about is cyclists. I've been a driver since 2009 and I really think that cyclists are the most dangerous things on the roads. I have also been a cyclist and commuted 8km a day on a bicycle before, so I think I have the right to talk about cyclists.

I don't see anything wrong with people wanting to cycle to work and to go to places, but I do not think that the current road infrastructure in Singapore is suitable for cyclists. If people want to cycle, there should be proper infrastructure to support this in an efficient way. Having existing users share the road not only slows down the flow of traffic, but creates unnecessary unsafe situations for both the cyclist and the driver. I personally find it very uncomfortable when I see a cyclist because I know that my driving pattern as well as all the other road users will be shifted slightly.

Whenever a cyclist is on the road, even as much as he stays to the side of the road, basically the entire lane is closed. Regardless how straight or steady a cyclist is, the other factor is also how a regular car driver is able to give space and accommodate a cyclist within the same lane as them. Most feel uncomfortable and give a lot of space in between, and that is fantastic for the cyclist, but shitty for the rest of the people using the roads, especially those in the other lane since the car drive beside the cyclist will "eat" into their lane.

The ones that don't feel uncomfortable, they drive right up beside the cyclist and freak them out. Which is why we have so many cyclists road raging about inconsiderate drivers that almost killed them.

Recently, I've also seen lots of electric bicycles being driven around like circus motorcycles. I saw 3 young boys on a single electric bicycle plying the roads with no helmet. Dangerous? Obviously.

How are people supposed to travel around safely if their preferred mode of transport is cycling or through light electric vehicles, like an electric bicycle or kick scooter? Should they be sharing the roads with cars? It seems very dangerous and bad for traffic overall in my opinion. Should they be on the sidewalk with pedestrians? It also seems very dangerous as well. 

Ideally our roads should be created to safely accommodate light electric vehicles and bicycles, and I think the best and safest way is to look how the bicycle-riding country of the Netherlands have created their roads.


When in denser metro areas, the bike lanes are completely separated from the main road used by cars. This keeps it safer for both the cars and cyclists since the only point of crossover contact is at intersections.


Of course, it might not always be possible to widen the existing roads and have clearly seperated spaces for cars, pedestrians and cyclists together all at the same time. Widening the roads by a metre and clearly demarcating that it is only for cyclists would also make it safer, although there is now no curb between cars and cyclists. Swerving or reckless driving / cycling could lead to accidents in this design, but it is still objectively much safer than the current way we share the road now.

While I think that it is sad that cyclists can get into serious accidents on the roads, I can't help but feeling like many cyclists are completely underestimating the hazards and risks that can be caused by others. Even as drivers, we are all at the mercy of other "idiot" drivers using the roads with us. For the cyclist, they are not exempt to "assholes" on the road as well. However, they have much less mechanical protection compared to drivers and even motorcyclists. Most people that have driven a car before have been in an accident once in their lives. Imagine getting into an accident on a bicycle. With that kind of probabilities, I have decided not to cycle on the roads in Singapore for now until things have changed.

I love cycling, but I really think that cycling in Singapore on the roads is way too dangerous. If I could hop onto my bicycle and cycle 5 minutes down to the shopping centre safely, that would be amazingly awesome for me. Cheap form of transport that is also good for health! But who knows if that would ever really be possible in Singapore?

Saturday, July 11, 2015

Struggling Socialist Country Rejects Modern Technology And Embraces Economically Backwards Policies

Viva la France.

As the WSJ reports, 3 July 2015,


While other countries love to blast how Singapore is so "backwards", I think many countries should shut their stupid faces before they end up looking.... well, stupid.


Singapore has clearly recognized the existence of such disruptive services and have talked and thought about it.

However, people here are on the same page: if the (disruptive) services benefits the commuters and drivers, GO FOR IT.

The government's role is not to protect existing businesses and I am glad that they understand why businesses should not be protected. If it's a viable business, it will survive. If it's a shit business, it will close down.

Although I think that the free markets do a pretty darn good job at serving the needs of people, I don't think that it is always perfect (when more than just pure economic benefits are considered), so I do acknowledge that smart interventions can create something that might be more beneficial on the whole than the free markets. The debate here isn't even about creating surplus value over and on top of market-based capitalism, it's about allowing it in the first place!

The government's job is to clearly mark the playing field, create rules for fair play and ensure those rules are followed. They should not be biased to any (existing) team. May the best man win. FIGHT.

These socialist hedonists are just ignorantly living with high unemployment (normal unemployment over 10%, youth unemployment over 20%) with a badly run government (budget deficits for as long as I can find records... the past 20 years), tut tut tut. Maybe we need to send some economic envoys to France to teach them basic principles of economics and math? (But then again, it's a given their economics is full of shit if they managed to churn out Piketty) Maybe we should colonize these savages until we can properly educate them, then we can give them soverignty to run their own country? The way they do things so... it's so backwards.

Oh the irony. Kill me now.

Adapt and live, or stay and die.

Friday, July 10, 2015

Gun To Your Head: Buy China or USA?

In a heartbeat, China.


Even though this data is not up to date showing the exact values at this point of time, I think it still is a pretty good big picture perspective of valuations around the world.

The irony is that because the China market is tanking, people are flocking out of it. 

What happen to all that crap of "be greedy when others are fearful"? Don't all these stupid China farmers read Warren Buffett?!?

Buy low, sell high. Buy low, sell high. I honestly don't really know anyone in real life that does that. Everyone I've talked about the markets with is telling me that if they were in, they would sell positions and enter at a lower price. Fuck me. Who doesn't know that?

If you sell when it is falling, and buy it back later when it is rising.... isn't that sell low, buy high? Or is it sell low, but buy back even lower? Genius strategy! I don't know why no one else has thought of that so far! LET'S ALL DO THAT!

I'd like to see the entry prices of all these people who apparently bought at the bottom and the start of the bull market, remained in positive unrealized gains the entire way, and then sold out all of it at the top. Talk is very cheap these days.

I wonder how cheap is my talk. Google Adsense values it at $0.60 a day.

Anyway, just want to lay it out that my brain damage is very severe. This is so that people that read the nonsense I write have some sense of what sort of mind they are peering into.


Apparently, I like to buy shit. Help me.

I don't buy into markets or assets that are "breaking out" to "new all-time highs". Perhaps that is another symptom of my brain damage. 

Gun to your head, the stock market is closed for the next 10 years. China or USA?

Why Greece Should Leave the Euro

I feel that this video is the best explanation that I have seen so far. It does not overly complicate things and have kept the issues at hand to be as simple as possible without dumbing it down.


Nigel Farage shoots down the Euro in 4 minutes flat. I have to say, Nigel Farage is one of the few politicians that I really like because he's smart and he's a straight talker.


The solution is not the Euro, it is the problem.

Thursday, July 9, 2015

Zerohedgey? Feeling Edgey?

I realized my posts of as late has been quite... Zerohedge-y.

Which is characterized by being a skeptical critic of the modern financial system, having a huge dislike to Keynesian economics, subtle belief in TPTB, a fetish for gold, and of course, a perma-bear mentality for stocks.


The problem is that ZH is actually right most of the time, which reinforces to me that they aren't that crazy after all.

Personally, I feel very uneasy if I haven't at least screened through the headlines on ZH. I think that they give great news that the main stream media does not report on. Plus the people that comment are hella funny!

People that read ZH really have to be very discerning and objective with the news that they are digesting. Someone without the proper content filtering and emotional controls will leverage up and short the markets after reading ZH for a week. That might not be the smartest thing to do.

Anyway, on a separate issue, I would like to remind people that the STI is not even down 8% from its peak yet.

If you are getting antsy and uncomfortable holding onto stocks now, you better just sell right here, and right now. If stocks drop another 10%, which is well within reasonable possibility to happen, can you stomach and hold onto those losses? Or another 20%? Or 30%?

Investing and immediately making unrealized capital gains and staying that way is pure fantasy. If you aren't comfortable sitting in unrealized losses, the stock market isn't for you. A bear market will also kick your ass.

If you can't take the heat, get out of the kitchen.

I have no dependents. My parents do not rely on my allowance to survive. I'm debt free. None of my investments are leveraged. My asset allocation is quite diversified. My emergency fund is full. My warchest is expanding. My job is secure as far as my eye can see. I have a very high "risk" tolerance. I pay money to jump off things for fun.

I'm not worried for a bear market. In fact, I want it to come. Like seriously, I want it to come. The sooner, the better. Let's not kick the can about this, eh?

Wednesday, July 8, 2015

LOL I TOLD YOU SO

US markets are down 1% and guess what happens?


Official link to that page here.

Here's what I wrote 12 hours ago:


Shit, I should be a fortune teller or something.

The talking heads on CNBC are flippin their shits man. They are just repeating shit over and over again. "We don't really know what's going on but if we stop talking we don't get paid".

China: Because if you can't sell it, you won't have any losses!

UPDATE: 71% of the market is frozen. The added percentage is from stocks being traded to the maximum 10% limit down.


Fresh out of FT:



Basically with the threat of massive blowback from the population, China is pulling out everything that they've got to stop this crash. Everything. The whole she-bangs. The next step is probably to freeze the whole market, haha. 

If you wanna see what the selling carnage in the US is going to look like eventually, China right here is demonstration Alpha.

Why do I say that?

Well, here's a pretty chart for all you "long-term" investors out there:


3% annualized returns over the next 25 years?

Run, Forest! Run!

Refresher on Silver

This is just a link of my old posts because I've pretty much said everything already before.

Why don't I only invest in stocks? I think that it is perfectly within reasonable possibility to profit from any asset class, as long as you aren't going in blind.

Why am I buying Silver now? It's officially the worst bear market for silver since the Hunt brothers tried to corner the market. I like to buy cheap stuff.

Why do I think stocks are less attractive than Silver? I believe in mean reversion and based on that, the risk/rewards for silver outweighs that of stocks to me.

Why do I believe in mean reversion? After reading Jason Zweig's book regarding behavourial finance, I think it is one of the few things that can exploited.

Isn't Silver a risky investment? It depends how you define "risk". My thinking of risk has been greatly influenced and shaped by Howard Marks, and I think it is for the better.

Lastly, I'm not a fortune teller, I don't know what is going to happen next.
I'm not telling you to buy anything.
I'm not asking you to sell anything.

I'm just blogging about what I'm doing.

Tuesday, July 7, 2015

CHIONG AHHHH

Silver down today 5.5% under $15!

Party time, wooooooo!

Accumulating piles of worthless shiny barbaric relics!

Update:
Bought Silver Eagles at $14.80

Crazy? Maybe!
But all the RCM 10oz are sold out :(

Just some passing thoughts

For some reason, lately I'm just not feeling excited by the markets. Everything is so... meh. So I'm just going to ramble on a bit on some things on my mind.

Personally, I am pretty happy to hear the #Oxi outcome. Who knows what will eventually happen in Europe, but I think this is the first step towards addressing the problem instead of kicking the can down the road. Will they go off course and kick the can down the road? I think it's actually very probable. I don't know why people think an exit from the Euro is a given right now.

I am a bit puzzled why both the precious metals have instead been knocked down instead of spiking up. Bitcoin has risen recently with the Greek referendum, increasing by about 15% since early June. Across the board, reports that increased retail demand for precious metals has been hitting the wires, yet there seems to be no translation to actual prices. I continue to eagerly buy precious metals at these prices.

China is back to where it was when I talked about it in April. Yeah, I never really thought a 5 sigma move in 1 direction would last either. I missed "calling the top" in the China indices by a week when I was blasting how their banana traders was buying into the market at PE ratios of 70. After it peaked, I talked about how farmers were becoming full time traders. I mean, what could go wrong?

With China stocks pretty much all moving into official bear market territory, the Chinese government is freaking out. Of course they have to. Millions of dumb retail investors have flooded into the market and most of them are in loss positions. If they were professionals, they would have been in the market a long time ago and still be up over 50% in their positions.

Of course I can pat myself on the back because on 15 November 2014 I did say that China "looks like an amazing buy", but I didn't take actions to my thoughts, so what right do I have to say that? It just is slightly comforting to know that my big picture view on valuations isn't so "fringe" after all.

Basically with the threat of massive blowback from the population, China is pulling out everything that they've got to stop this crash. Everything. The whole she-bangs. They next step is probably to freeze the whole market, haha. Generally, if investors were unleveraged, these sort of crashes can slowly recover and put back investors into equity positive situations. Having to sit in unrealized losses is normal for all investors.

However, Chinese people being... Chinese, they are probably all leveraged up. Guess what that means? Tons of people are sitting in massive losses and thousands are getting margin called or having their entire accounts closed out as we speak now.

It is sad to see such things happen, but that really is the price to pay for not knowing. I swear, people bargain for dollars and cents at shopping markets, but dump tens of thousands of their savings into "hot tips" they read from a newspaper, or worse, a blog. Is it their fault for being so naive? That's a big fat yes to that question. Unfortunately they will have to pay for their own mistakes. I wonder if suicide statistics are published in China. I bet there was a spike with June stats. I'm not being heartless about it. I'm just stating facts. Suicides spike during market crashes.

In Singapore and in the US, everything so far seems to be "contained". I am feeling rather itchy fingered to pick up certain shares that have recently fallen, but I am holding back on going trigger happy. It's just a hunch, but this feels like the calm before the storm to me.

It's getting boring just seeing the markets bounce around going no where, but I guess this is a "development" from the BULL MARKET WOOOHOOO narrative that was everyone's favourite cheer a few months ago. Like a parabola, the market needs some time before it changes direction. Is this what we are seeing now? Feels like it to me.

But then again, I've been on the cautious side and also the "wrong" side for most of my investing career, so what do I know?

That even a broken clock is right twice a day.

Monday, July 6, 2015

[STI Statistics] June 2015

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

As of 30 June 2015

STI Closing Value: 3317.33
P/E Ratio: 13.35
P/B Ratio: 1.28
P/CF Ratio: 10.32
Dividend Yield: 2.78

Monthly Data Series from 2008

Mean P/E: 12.28
P/E Standard Deviation: 3.10

Mean P/B: 1.46
P/B Standard Deviation: 0.21

% of time when the STI is cheaper based on P/E: 63.35%
% of time when the STI is cheaper based on P/B: 19.14%

Comments

The P/E and P/B ratios are still telling conflicting stories about the index. Based on P/B, the STI is almost 1SD below it's mean. The STI does not look significantly cheap nor expensive by any historical measure. Valuation-wise, it seems to be getting cheaper since peaking in July 2014, which was actually a peak for many many indicators globally.

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

*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 onwards from SPDR STI as a proxy
*****Probability calculated with http://stattrek.com/online-calculator/normal.aspx

Sunday, July 5, 2015

The Future is the Crowd


This is a video that I've seen a few years ago, but I happened to just suddenly casually think about it again and the part that got me really, really interested is from 7.28 onwards.

A lot of people are coming out and saying that the future is "big data", but I think that the future is in the power of crowds. People like to use the word crowdsourcing, but I think that crowd technology is more all encompassing.

In the video, the examples he gave about Apache servers, Linux OS and Wikipedia are classic examples of open-sourced collaborations.

However, I do not think that open-sourced collaborations are the only way to tap into the power of crowds, as recent development in "crowd technology" has proven.

Ironically enough, I realized this when I was watching CNBC about a month ago (ironic because CNBC is fos). They were talking about Airbnb and Uber and that really got me thinking.

Both Airbnb and Uber are basically the exact same business model, but applied to a suitable industry and carefully managed to adapt so that they could succeed. They both did the same thing and created the same thing.

1) The assets that they are capitalizing does not belong to them (belongs to the individuals in the crowd)
2) The assets are not being fully utilized by the individual
3) The "slack" in capacity is able to be defined and sold
4) Consumers see value in the "slack"
5) They create a gathering point / marketplace to help individuals sell the "slack" and consumers purchase it


Let's break it down by company. Airbnb first:
1) Assets being used but not owned by them: Living space / houses / rooms
2) Assets not being fully utilized: Vacation home / spare rooms / travelling for extended periods
3) The "slack" can be sold: Living space and duration of stay is clearly defined and can be customized
4) Value of the "slack": Prices are lower to commercial offerings and options are flexible to personal needs
5) Marketplace: A website is born allowing users to list free spaces they have to people who want to rent those spaces


Now, Uber:
1) Assets being used but not owned by them: Cars
2) Assets not being fully utilized: Time when car is not being used for primary purpose
3) The "slack" can be sold: The time and convenience of private transportation
4) Value of the "slack": Prices are lower to commercial offerings and can be easier to obtain service
5) Marketplace: An app is born allowing users to offer rides to people who are willing to pay for it

Both Airbnb and Uber are really, really, really good business ideas in my opinion. They have managed to monetize something that could not have been monetized before. They are asset-light because they don't own the assets, they also don't need to maintain the assets or have large costs for upkeep. They have created a marketplace for themselves that serves a need while they pretty much just risklessly collect commission from establishing and keeping the their marketplace the #1 place for "buyers" and "sellers" to meet.

Can you think of other examples of "crowd technology"? The crowd-funding arena is a prime example with too many examples based on geography. Crowd-lending is slowly becoming a thing, but essentially it works based on the same principles.

If you actually broaden your search and also look for crowd technology that doesn't involve money, you will find some interesting things.


Ushahidi, as introduced by this TED talk, is an information gathering crowd sourcing project to help collate, curate, prioritize and manage important data and news. This was used in many crisis situations and they use the crowd to help them. All they did was to establish a place for the crowd to gather.


On a lighter note, some of you might know that I am learning another language. While I am taking classes, the power of the internet as a supplement to classroom learning is amazing. Lang-8 is a website that allows users to use the power of the crowd to help with language learning. An individual can go on the site to either learn a new language, or correct work submitted by users that are learning his native language. The more an individual of the crowd corrects work by other users, the higher the odds that someone will check his own work. Essentially, you are getting a horde of native speakers to correct your spelling and grammar in exchange for effortlessly correcting simple sentences.

The outcome of crowd technology does not purely have to be for profits. As long as the users of the crowd gathering service is able to benefit by helping each other, it creates a surplus in the system. Without the gathering point, there would be no such exchanges happening, at least no where on the scale made possible by these market place creators.

I think that the future is in the crowd, which involves all of us. I am excited for the future to see what other things in our lives can crowd technology be applied to. We live in exciting times people, exciting times, I tell you!

Does anyone have any interesting examples of crowd technology? Does anyone want to invite me to a start-up that involves crowd technology? Haha!

Saturday, July 4, 2015

Will America do a "Greece"? Most Definitely

This interesting piece by Jon Gabriel is the perfect visualization as well as simplistic explanation of the American debt problem that I've always had so much issues with.


It's an imperfect analogy but imagine the green is your salary, yellow is the amount you're spending over your salary and red is your credit card statement. 

Would you lend money to a country like this? I know I wouldn't lend a person or a company with a balance sheet like this any money. Just because it's a country doesn't change anything. I still ain't going to do it either.

One of the biggest problems that I see in "modern day" finance is the continually touting and distinction that "bonds are for safety, stocks are for risks". Notice the inverted commas. I disagree with that statement. Volatility is not the same as risk.

I can't be bothered to invest in something that will constantly have me playing "musical chairs". This is very different from re-evaluating a stock investment after recent bad quarters and their products and strategies. For a stock, your projected trajectory is up. For the American debt problem, the trajectory is already known, expected and forecasted to be way, way, way down.

Of course, you might be perfectly happy jumping into the stock market right now at nosebleed valuations since "the trend is your friend" and then at the first signs of an equity rumble, "fly to safety" into bonds at record low yields.You can do whatever you want, it's your own money.

I'm just telling you what I won't be doing with mine.

Friday, July 3, 2015

Grexit: Live Free or Die Hard


I saw this picture and it's bloody hilarious to me.

I think the referendum will end with a Yes outcome, but who knows? Not that I think it's right or wrong, but that's just what I think would be the result of the referendum.

Personally, I would rather see an #Oxi (No) outcome so that the can will finally stopped being kicked. The problems that Greece has will not be solved by attending to it another day, it just makes it worse.

Whatever the case, as if my opinion matters, am I right? I'm just a casual observer with no skin in the game.

Like I said before, don't gamble with a man that has nothing to lose.

Thursday, July 2, 2015

[SGX Portfolio] SATS-isfied


Thanks SATS for making my joy, your purpose.

I bought SATS on 19 Jan 2015 along with a slew of other names since it was the first trading day that SGX lots dropped from 1,000 to 100!

I did not blog about my thesis behind it because it was just one of the few counters I had bought and it was just a nibble. At $2.92, I remember that it was not cheap (at least not the kind of "cheap" that I am used to) based on earning valuations, but I do recognize that this is a good and stable company so I didn't mind to venture out of my comfort zone for a little adventure. Dividend yield was a decent 4.5%.

I've been watching SATS steadily creep up since then.


I have been looking at it for a while now and thinking if I should add more on dips or realize the capital gains. While it was still splashing around under $3.2, SATS was growing within my expectations for it, so there was no need for me to be concerned about it's gains. Only recently price shot up from $3.2 to touch $3.7 and now capital gains in quite big and that got me thinking if this is enough for me.

PE is 21 and EV/EBITDA is in the upper 15s. P/B is 2.8, but I don't think that it is very meaningful to a service business like this. From a "value" point of view, SATS is not a cheap company. Add in growth and maybe it is, but I don't like to look at it from that POV. I'm a horrible investor like that.

At $3.69, capital gains from this investment would be a decent 26.4% excluding transaction costs. Including buy and sell costs, net returns would be 25.8%. This is because there was no dividends collected during the holding period of the last 6 months.

At $3.69 and based on my forecasted DPU of 0.14c, dividend yield of SATS would be 3.8%. Of course with a run up in stock price, it is only natural for the dividend yield to compress. 26% stock price increase is met with a 26% compression of the dividend yield from 4.5% to 3.8%. The math checks out.

I like SATS as a company and business, but I think that I will be able to return to SATS again as an investor at a better valuation some point later in the future. I am happy to take some profits off the table now. I sold it earlier today at $3.69.

Buying is the easy part IMO, selling is the hard part. I just hope that I'm right about this. Even if I'm wrong, at least I'm still pocketing a gain from this investment!