Wednesday, March 30, 2016

The Shit Charade Continues

If every time Yellen opened her damn trap and the S&P500 shoots up 30 points, they should schedule her to make speeches every single goddamn day.

Now let me get this straight...

The US stock markets exploded yesterday because Yellen pretty much said rate hikes were not going to happen and that the US can drop back into ZIRP, and if needed, follow the playbook of other central banks and go into NIRP hell.

So lower rates for longer it good for stocks, but that's only being put in place due to the "weakening global growth environment".

The reason for low rates is a shit economy, but stocks are going up? This is a shit show in its purest form.

Japanese industrial production just crashed. So have HK exports and South Korea exports, both of which have been somewhat correlated in the past to global trade. The number of reports and statistics showing "worse since 2008/2009" have never been higher.

The facts are simple.

  • It has been 8 years and 9 months since the last US recession. After next month, there has been only 1 time in history that there has there been a longer period of uninterrupted growth. That ended in the tech bubble. Given that recessions are cyclical, as every month goes by, it progressively increases the odds (which are already very high) of a recession occurring. (statistically speaking)  
  • US stocks are at excessively high valuations, which have always lead to a decline in prices from the levels that we are at now (GAAP PE 23X).

The premise is deadly simple: US stocks has risen tremendously for an extended period of time. This is just not sustainable.

To paraphrase Jason Zweig, buy high, sure die.

The stock market is not the economy, and if people think pigs can fly, so be it. Buyers beware the bear.

Monday, March 28, 2016

Singapore Savings Bond: Mar 2015 Review, May 2016 Preview

Hey everybody, here's my monthly post on the SSB closing and the forecast for next month. I'm trying to streamline my posts to make them more condensed and info-packed in a regular structure, so it's both easier for readers to quickly digest the article and for me to pump them out on a regular basis.

I have made a similar posts in previous months, and I think I will stick with this format.

First up is update of the subscription of the previous issue. As previously mentioned, the SSB will probably have $300 million available to be issued every month of 2016. While it is a HUGE drop from the $1,200 million that they were offering in 2015, the SSB take up rate has been... pathetic, so it makes sense to cut down on the total offer to boost up the fill rate. It looks a look less sad now.

For the March 2016 SSB, a just as pathetic take up rate of just over $25 million was done. That's almost 8% of the issue. Demand for SSBs look low to actually even decreasing in the future. By just looking at the absolute amount, you can see that demand is falling.

This month, as expected, the yield curve was manipulated by moving the 1 year rate down to match the 2 year rate. Of course, having a yield curve inversion is a no-no. This move is similar to what happened for the Dec 2015 issue last year, but of a much smaller magnitude. The 5 year rate strangely showed a higher than normal deviation from its predicted value.

Moving onto the next SSB, we use the same old-fashioned method of looking up the data from MAS and constructing the table below. As a refresher, the current month's rates are used as a proxy for the issue in 2 months time (For example: Mar 2016 rates are used for the May 2016 issue). Also, if you are in the first 3/4 of the current month, you application this month is for the bond that is too be issued on the 1st of next month (For example: Mar 2016 applicants will receive the May 2016 issue). I hope this clears up some of the confusion people have regarding the names of the issues.

With 18 out of 22 data points available for this estimate, I think that this estimate would be rather accurate as compared to the previous months. I would hazard a guess of 0.99 / 0.99 / 1.76 / 2.12 as the final yields.

One thing that you might notice is that we have the average rate of the 1 year being higher than the 2 year AGAIN. At Central Banking 101 classes, they will tell you that this should NEVER happen (since yield inversion signals a broken / breaking credit market). So, just like how we saw the Dec issue be manually adjusted to limit the 1 year yield against the 2 year yield, I am expecting the exact same kind of market manipulation for the May 2016 issue yields.

This upcoming issue looks set to be the weakest SSB issue since it has started. All time lows in the 2, 5 and 10 year returns should be posted in the next issue. The current month's issue is definitely better than next month's issue, if your decision were really that simple and binary.

I would not be applying for this month's issue, and I'm 99% I will not be applying for next month's one as well.

Sunday, March 27, 2016

Saved Money by Being Lazy: Food Delivery

In this modern world, things are crazy and upside down.

On this long Easter weekend, I decided to spend my Sunday at home being lazy, watching some dramas, reading some chapters of my book and tidying up my areas.

Naturally, I was too lazy to be bothered to go out and face the frenzy of the long weekend crowd. Traffic would be bad, people would be everywhere and queues would be long.

No, instead I opted for the lazy method. I decided to order in some food.

Now, as many of you might know, with the arrival of Food Panda and other alternatives, the food delivery scene is getting a lot a lot more interesting. I found out about a $20 Deliveroo promo code and I had read a review a while ago strongly praising and recommending the delivery service. I decided to plug in my postal code and see what's available around me.

Wow, quite an array of decent food choices. I did notice that the food offerings were a bit more "premium" compared to the many listings on Food Panda, but then I also ready somewhere that they are a bit more particular about who they work with and the quality of the take-out food being provided.

In the end, I settled for a burger place nearby that would usually be a 10 minute walk away. I selected my food, keyed in my promo code and I was very surprised to find out that my dinner was discounted $23. $20 for the promo code for being a 1st time customer and $3 because delivery charge is being waived for this Easter weekend. Nice!

In the end, my $58 dinner (not all for me!) was kicked down to just $35!

Imagine that.

1) Not only didn't I move my lazy ass at all, but
2) delicious restaurant grade food was available and
3) brought to my doorstep in about 30 minutes.
4) And I got a massive discount.
5) And I paid my credit card (to add to my monthly spending).

I thought it was a pretty amazing thing.

I would attach photos and give my reviews, but I'm a finance blogger, not a food blogger. 

Of course, the promotion for 1st time users is always the most enticing. I remember Food Panda + ShopBack had a pretty sick discount on my 1st order. This Deliveroo discount was also pretty awesome.

If you have never tried these food takeaway services, I would highly advise you to try them each just once, along with a good 1st time user promo, so you can enjoy food that you like to eat, at a cheaper price than you normally pay, at the comforts of your own home.

I have to admit, both Food Panda and Deliveroo were pretty good food delivery services, but I don't know how often I would actually use their services. I still find it absolutely mindblowing how I can get food delivered to me at a cheaper price that what I would have to pay, without the hassle of queuing and travelling to the location. Of course, for some people the atmosphere and ambience is a very big part of the dining experience. To me, good food at fair prices is the most important. I guess different people are willing to pay for the different aspects that are important to them.

Any suggestions for other lazy food options?

Friday, March 25, 2016

The Yen, Oh Man

If you have never heard of Horseman Global, you are in for a real treat.

It's a hedge fund that has been generating phenomenal returns since 2012:

2012: 16.27%
2013: 19.15%
2014: 12.63%
2015: 20.45%

Over 4 years, that's a disgusting 88% returns in a mere 4 years.

And guess what's more amazing? This hedge fund has been net SHORT since 2012. 

So when this guy speaks, I listen and I listen good. ZeroHedge breaks it down, but the idea isn't too complicated to understand.

I was just talking to my friend recently about the strange relationship that the Yen has on financial markets, so this is quite coincidental.

Although Japan is blowing up their economy on multiple fronts (bad policies, horrible demographics, weakening technological advantage) and that should eventually translate to the Yen being much less valuable, the carry trade with the Yen is also very significant. The Yen is pretty much the world's favourite pair for carry trade since forever. So although I do think that the Yen eventually becomes significantly weaker in the future, I still do think that in the short-term (less than 3 years) the Yen will strengthen along with the declines of the global equity markets.

In all honesty, I have little faith in the long term competitiveness and value of Japanese companies. Don't get me wrong, I love the place. But as an investor, I really don't see anything too awesome about Japan fundamentally at all. Japan has a lot of structural problems that isn't being addressed, especially by weird government policies.

Wednesday, March 23, 2016

Just some commentary

Hi guys, sorry for the lack of updates recently. The market has been dead boring, so there really isn't anything much to talk about regarding market moves. Perhaps tomorrow with the budget announcement, we'll have some juicy topics to talk about.

Just some quick commentary.

I recently found out about InvestingNote and you can follow me on my profile here. I'll probably be using this site to make commentary on stocks, but most likely mainly for the STI ETF, as well as names that I personally monitor. I like that it is a web-based site that can load up my chart preferences. Even though I do have Chart Nexus installed on my computer, it isn't on all my computers that I use. Most of the time I just resort to ShareInvestor and look at the basic price chart, but with InvestingNote my technicals get loaded up as well and that's a good thing. I only just joined today, so I'm still exploring the site and its features.

First up is the US indices. I am still mega bearish on the US indices. Fundamentally, nothing has changed, yet stock prices have soared 13% from its recent low, in an almost straight line fashion. This is on the back on reduced earnings and companies freezing buybacks due to reporting blackout. I am pretty sure that the indices end lower from this very elevated level that we are on.

This indirectly is also the same call for the STI, which is a really strong rally on the back on nothing fundamentally changing. Although I believe that the STI is cheap by plenty of valuation metrics, I am not an aggressive buyer until they correct along with the US indices. We need to take the hit of the collateral damage before I see the index, as well as the underlying economy recovering.

As much of a Gold and Silver bull as I am, I believe that this move too of the precious metals is way way overbought and we will have to move lower. I'm looking for the precious metals to make a higher low in the mid 11xx region, where I am planning to increase my positions of them again. It then goes without saying that the weak USD should have a bounce, given how badly it has performed recently. The USD/SGD has come down significantly from the 1.43 high mark. I find it absolutely hilarious how every single bank analyst were calling for USD to the 1.50+ levels. No bank, I repeat, NO BANK called for a lower USD. I have been adament that the bullish move in the USD is unsustainable. Even if and when we do bounce on the USD, I believe that the USD will generally be muted in the future, not bullish.

Of course, linked to the dollar moves in Oil, so I have to also believe that Oil would make another low in the near future when the USD bounces. However, I'm not all doom and gloom about oil, but neither am I ultra bullish on it either. To me, it's just kinda meh and will piss around $30-60 for a really long time.

Anyway, these are all wild speculation that I am pulling out of my ass. Feel free to think of me as delusion and continue to carry on as per normal. Look forward to an update on the SSB soon!

Monday, March 14, 2016

Singapore Most Expensive City To Live In?

Since a few days ago, the same annual survey that shows that Singapore is the most expensive city in the world for 2016 has made news and has once again riled up all the strongly opinionated Singaporeans to weigh in with their expert commentary about how it is so fucking unlivable in Singapore due to the increased "costs of living".

And of course if you look hard enough, you can find the hardliners who think that socialism and having an alternate government would make things better for everyone. Whether or not that is true, I leave you to examine Venezuela as a case study of socialism in today's world and form your own educated opinion.

Finally, someone (Prentice Mathew) has got fed up with the misinformed public and come up with a piece that is short enough for people with ADHD to read, yet packed with enough information to prove his point - "that this latest study by the EIU - full of caveats and disclaimers - is no true indication of living costs".

Of course, if you had been more curious and visited their website, it clearly states, as well as being DISCLAIMED TO DEATH, that "the survey itself is a purpose-built internet tool designed to help human resources and finance managers calculate cost-of-living allowances and build compensation packages for expatriates and business travellers."

Are you an expatriate or business traveller in Singapore?

I would guess not.

Singapore isn't crazy expensive if you aren't being ridiculous with your money

Seriously, even fast food is oddly cheap here. It is priced to compete with a full meal from a hawker centre, but yet in other nearby countries in the region, it is priced at a premium (probably due to segmentation targetting strategy, but this is still a very obvious difference).

It costs just $26 to get married, but holding a grand wedding and having the performance that you are from a reasonably well to do family can cost you tens of thousands. Of course, "face" is sooooooo important in Asian society that it's worth going into debt for, right?

When I was a student in Europe, taking the public transport to school costs 3 Euros one way, and another 3 Euros back home. It cost 9 SGD a day to go to school. Now tell me how expensive Singapore public transport is again? After day 2 I was walking to school for an hour a trip for the rest of the week and on the weekend I bought a 2nd hand bicycle for 50 Euros so I didn't have to burn money every day I woke up and had to go to school. At least in Singapore, you know that as a student, your transport costs are basically going to be capped at $85 (which is the cost of a monthly pass) or even lower at $52 if you decide to just take a bus everywhere and be a bit cheap about it. 

What eats at me is this self-entitled notion that came out of thin air, that every single person ought to be able to afford and own a car and park wherever they want and drive anywhere at anytime and it should be... "affordable".

The proven and simplest way to shoot up your transportation cost is to own a car. The percentage of the population that do not own a car has seen almost no change to their transportation spending while those who own cars have seen it increase along with the price of cars and maintaining them. 

With more MRT lines, more MRT stations, more buses and an overhaul of bus operators, it is blatantly obvious that the government is heavily investing in public transportation infrastructure. Even the very soft approach of dealing with Uber/Grab is a clear signal that anything which alleviates the demand of transport will be seriously considered. This further weakens the argument that cars are necessary for their convenience and flexibility. 

Many people are also disregarding HDBs, which is of course the most important piece of the puzzle since housing expense is probably one of the largest expense in most households. I've already did an on the ground check recently, BTO HDBs are at the very least 50% cheaper than the cheapest private housing accommodation available, but it is more likely that it is even cheaper than 50%, since many private accommodations are being launched over $1200 psf. 75% cheaper even maybe?

Of course, for all the people that like to complain, don't worry, I've got something for you too. If you think I'm peddling bullshit and Singapore really is such a bloody ridiculously expensive place to live in, why not put your money where your mouth is and migrate to all those cheaper places? Try living in Italy where they are giving away free houses? How about a free house in Japan (read more official stats to corroborate that these kind of stories are the norm, not the exception)? How about moving to USA and buying $1 homes? Plenty of "cheap" options available.

Just like any investment, talking about the "price" of something is for the noobs. It should almost always be price relative to something else, such as underlying value. I would say that personally, I feel that I am getting very good value for the price that I am paying and for the specific living factors that I get to enjoy in Singapore. Safety. Efficiency. Connectivity. Trustworthy. Diversity. And food, glorious food. These are the things that I get to enjoy living in Singapore. Yes, living in a hut in Africa is really really really really cheap. But that's because it sucks balls to live there.

But anyway, the point is to talk about how wrong people are about the excessively expensive cost of living in Singapore. Yet most men have watches from the premium core and above, while "entry level" handbags for women start at the accessible core. And of course, not forgetting how everybody has the latest iPhone.

Then again, what is money for if it isn't spent to make you happy? I just hope the things that you spend your money on truly makes you happy.

1. The survey does not reflect of the cost of living for locals
2. Being "cheap" is not the only metric for quality living
3. If you spend your money on stupid shit, you aren't allowed to complain about cost of living.

Friday, March 11, 2016

[SGX Portfolio] Feb 2016 Update

As mentioned previously, this will be my attempt at having a monthly update of my SGX portfolio. I have also updated that page to include the historical growth of my portfolio. I find it personally encouraging to know I've come so far from where I started. Hopefully other people may be inspired and also decided to embark on their financial journey.
"The journey of a million miles begins with a single step"
Anyway, here are the current stats of the portfolio as of end February 2016.

Total Cost    $27,175.90     
Unrealized Gains-$3,208.90
Accumulated Dividends $1063.77
Realized Gains$628.89

*Total Cost is initial purchase cost of the current portfolio
*Unrealized Gains represents the unrealized capital gains on securities still held in the portfolio
*Accumulated Dividends is the total of all dividends collected thus far

*Realized Gains will only take into account the final net capital gain or loss after including transaction costs to close a long position on a security. 

I have not bought anything in the month of February, although I am watching a few names which look very attractive to me in the long run. In fact, to be honest, many names look pretty attractive for the long run investor. However, I feel that if that if this recent market recovery is just a relief rally within a bear market, a depressed market would lead to these beaten down names becoming even more attractive.

I have collected a tidy sum of dividends this month of $72.14. What is interesting to note is that this amount is 38% more y-o-y compared to Feb 2015's dividends. Is my portfolio income growing? I sure hope so!

The month of March looks like that there would be plenty of dividends coming in as well. I am especially looking forward to the Saizen special dividend, however I am more inclined to register the entire transaction (including selling off the residual shares) as realized capital gains instead of dividends. If I don't do this, it would quite artificially surge my "expected dividends", which for this special dividend, can no longer be expected in the future.

Annual income from dividends is now expected to be about $1664 for a full year, (taking into account Keppel's cut) but of course I collected some and miss out others by not owning them the entire period. That brings the expected monthly income to $138.74 and daily income to be $4.56.

Based on the dividends I am expected to collect, my portfolio dividend yield on cost is estimated to be about 6.13%. I have taken the lower bound estimate for most of my counters, so it is quite possible to have surprises to the upside. My portfolio yield is rather stable around 6% now, since new additions are generally on the upper end based on their individual yield history.

In the coming months I expect the Singapore stock market to continue to perform poorly. My current strategy is to just brace myself and incrementally add on oversold opportunities. If my thesis is right, there are going to be plenty more opportunities in the coming months. I remain heavily in cash.

I plan to accumulate the blue chips as we continue to sink, while I leave the very juicy and highly attractive REITs to be accumulated when the market is recovering (and rights issues which require additional capital are already over). I would aim for quality and stability on the way down, but on the way back up I should be spraying all over and going for those which I think would have rather handsome upside opportunities.

What drives me with the sharing of my SGX portfolio is to show people an example of how one can work towards their dreams - with discipline and hard work.

Rome wasn't built in one day. Everybody has to start somewhere.

Where are you heading?

Monday, March 7, 2016

SGX Portfolio Back In Profits

With the market making its miraculous recovery over the past 2-3 weeks, my SGX portfolio has been having phenomenal returns.

Counting my realized returns (banked) and dividends collected (banked), it is now more than my unrealized losses, meaning that I am finally back in the positive zone!

Also cute to note, both my gold miners position and precious metals portfolio (which is much larger than my SGX portfolio) is now positive as well. From being -32% and -7% respectively, shooting back into positive territory makes me rather happy. (However, I do think that the rally in precious metals has been also quite giddy, so I would expect a pullback.)

Of course with the STI still off its highs, the only way that I could have achieved this was if I was buying quite aggressively when we were falling (and below current levels), which I was. From Nov 2015 to Jan 2016, I increased my portfolio value on cost by almost 40% and added in about $7000 of fresh funds to buy stocks.

However, while everyone is now bringing out the champagne glasses and celebrating how they have been so steady and steadfast with their emotions, I caution that we ain't even seen the worst of it yet.

While many markets in the world have officially gone into bear markets (and maybe even recovered from them!), one of the most over-valued and most influential markets has yet to crack - the US markets. Although I believe that Singapore is cheap in the long run by many metrics, I don't believe that we would be sheltered from the fallout. The US is one big fat domino set to crash and wreck the whole board for all other players. (Great piece of why the US is a stinker STILL)

By not "chasing after the boat", I'm implicitly betting (by sitting in cash) that this market rally is just a temporary bounce and we will head lower from where we are (1999.99 on the S&P500 lol and 2814 on the STI).

Perhaps I'm a super crazy and pessimistic person, but this in no way feels like "the start of a new bull market" to me. I really ain't buying any of it. Worst case scenario, I miss the first start of the bull market in my investing career. Best case scenario, we get financial armegeddon and I feel good about myself.

If I think everything is going to head down lower, then what on earth am I buying? I'm planning to open a new position in Brazil, increase my position in Russia and also add on precious metals on oversold conditions. Further on into the cycle, I'll be looking to buy up local blue chips at bargain prices.

Anyway people, don't mind me. Just a crazy guy acting out in his own little corner. Carry on.

Thursday, March 3, 2016

Dollars & Sense Calls Out CNA Crap Reporting

Dollars & Sense recently posted a really good article that tackled the very very shoddy reporting of the Bibidari BTO exercise.

The mistakes pointed out my D&S are very common ones made the financially unsavvy, confusing ratios and rates and making assumptions. However, freaking CNA should not be making these kind of very basic mistakes.

A 12.8 oversubscribed ratio means something very very different from 12.8 per cent application rate. In fact, the error is HUGEEE. The reported 12.8% rate is 100 times less than the 1280% oversubscription. That's a freaking huge margin of error. Unforgivable.

The misinterpretation of the 1st and 2nd time applicants was also very well dissected and explained by the D&S team. The CNA article did not highlight the very important fact that 2nd time applicants are applying for 5% of the units.

Personally, I feel rather irritated and agitated that this kind of crap standard reporting made it past the editors and onto the tape. News is supposed to inform people, not misinform them. The author ought to be penalized by doing such bad writing.

I feel that the D&S team has really come a long way from their SCB gaffe a while ago and they are really consistent in churning out quality articles that are very relevant to the local scene. I enjoy reading most of their articles.

Wednesday, March 2, 2016

My $30 Investment In My Health

About 6 weeks ago, I decided to buy a miband ($30.60 from Qoo10 with a coupon). You may have seen people walking around with this strapped to their wrists.

I have previously used the earlier version, but I found the band very flimsy and fragile. I had to use rubber bands to keep the unit firmly in the band, and also another rubber band to keep the band from dropping off from my wrist. It was a good product, but unfortunately the part of the band that required no technology in it was it's largest failing. After a month, I stopped using it.

I know friends and family who have gone on to get other wearables - fitness focused and not - from the Samsung Gear watches, to iWatch (which I hate) and even the ones like the Nike Fuelband and Fitbit. Almost next to nobody consistently uses their wearable anymore, with the main gripe being that it's pretty retarded to change it once a day.

When the updated version of the miband came out, I heard that they made massive improvements to the band (the part which I had the biggest gripe about) and also added in a nifty heart rate monitor. Although the heart rate monitoring is on demand, it is possible to hack the band and get continuous heart rate monitoring, but that would of course dramatically affect your battery life. However, because the hardware is already there, it wouldn't be a big leap in expectation to assume that Xiaomi might include a software patch in the future to allow users to customize how their band works and fully accept the reduction in battery performance.

Anyway, enough for the review about this band and it's backstory.

The best features of the miband are: long battery life (~30 days!!) and an accurate sleep monitor. These are the 2 main features that I use it for. It has to have long battery life to monitor my sleep, or else it would be like all other wearables that are being charged while you sleep (making it impossible to monitor your sleep!). Since I have gotten the band, I have been collecting data on my sleep and it has been helping improve my quality of life.

When I first got my band, I continued my life as normal, just letting the band monitor me. I found out that on weekdays, I only got an average of 4 hours 54 minutes of sleep a day!

When I went to my trip on Japan, my sleeping average shot up to 7 hours and 21 minutes. That's about an extra 2.5 hours of sleep every day!

After I realized how sleep deprived I was, I have committed myself to slowly change my sleeping habits. Since my holiday in early Feb, for the past month, I've been getting 6 hours and 6 minutes of sleep on average for weekdays.

Just that extra hour of sleep and I can already see the effects on my health and life. Now I am not so groggy when I wake up in the morning. I have almost altogether skipped my "usual" lunch coffee because I am no longer feeling tired and lethargic. I also have more remaining energy to be more active in the evenings, compared to feeling lazy and being a slob at home. I feel more rested and that added energy helps me to not turn down social gatherings and also skip on my exercise days.

Personally, my current goal is to try and sleep longer and well. I am targeting to hit 7.5 hours consistently on weekdays and 8 hours on the weekends, if that is possible. I got those numbers from reading these articles (here and here). I think it will take me a while to slowly adjust and extend my sleeping pattern and hours, but so far, I am quite happy with the results of that added extra hour of sleep.

Now the next thing I have to do is to make sure I stop skipping my exercise days! Gotta put that extra energy to go use!

I have to admit that sometimes I get too caught up in things that I lose perspective. Staying healthy and keeping fit ought to be a priority to me, and this is something that is important independent of your financial standing. I don't want to be that rich guy with health so poor that I can't enjoy my wealth. And probably neither do you.