Wednesday, December 31, 2014

2014 in Retrospect

Wow, 2014 has been a pretty interesting year for me.

It's my first year working full-time as an adult. I can't say that I love my job, but I think that I do my work rather well and I am being fairly compensated for my time and skills. Unlike most people, I do not believe in job satisfaction as a necessity - to me it is a bonus. I exchange my time and skills for money, and I am happy with that arrangement. As long as I have my own personal life after working hours to enjoy however I please, that is enough for me.

Many of my friends are having quarter life crises now, freaking out that their degree obtained is useless or they have some new passion they want to pursue. I am not saying that passion and satisfaction are silly things to look for in a job or career. I am just saying that those are 2 things that I personally do not require in my job to be happy and comfortable to continue doing what I am doing. To each their own. I am pretty happy that I have reached a state of zen regarding my career.

Financially, I think I have been doing a horrid job sticking to whole number goals of saving X% or $X every month. When it comes to saving money, increasing the money coming in is not really a change within most of our control. However, we can control the amount of money flowing out. I just live a simple life and make prudent decisions when it comes to money. I don't have the time and patience to track my erratic expenses, and I have enough self-control that I don't need to be shocked by a big expenditure number to cut down on my lifestyle. I already live modestly, all day, every day. As such, I actually save a lot of my salary, which is probably the best thing I can do now early in my life when I don't have liabilities and obligations to hold me back from accumulating a larger base to work with.

As a young working adult, I think a conscious effort is needed to prevent yourself from getting in the "Sorry, I'm too busy" trap that I see many people falling into. I explicitly make extra efforts to meet up with friends, but even then sometimes it is just really hard to catch people at the right time. I find myself making social calls twice a week, which is actually quite tiring after a long day of work. Other than social relationships which are very rewarding in their own way, I spend the rest of my time pursuing my hobbies, mostly things that I can happily do alone. In fact, I have so many hobbies, I am never bored and I am always constantly engaged in one of them. Finally, I indulge in travelling. Don't get me wrong, I don't indulge during travelling, I indulge in it. I fly budget, I take the public transportation and I sleep in hostels / cheap hotels. Travelling to me isn't about luxury and style, it is about the experience and adventure. Travelling is a constant reminder to me that the world is so much bigger than the comfortable little bubble that I am used to living in every other day of my life. It broadens my horizons, gives me new perspectives and reminds me to be grateful for all the things I have.

In the blogosphere, I am actually pretty surprised that I have traffic at all. I know I can be very caustic (most of the time) and that I have some strong opinions. However, I am really glad that I am a small part of this cosy community. I am especially grateful for those that drop by and leave comments. You care enough to share your opinions or enlighten me to other perspectives and that means a lot to me. Sorry I lurk around so much, but I think I devour almost every article written in our local blog community. I rarely comment though, because most blogs don't have an option for Name/URL comments and I have no idea how to change my Google profile, haha. I still want to keep my blog personal, so most of my content will be about what I am doing, looking at and thinking about. I don't think I can ever be mainstream and appeal to mass readers like some other can do, but I am very fine with that.

All in all, I think 2014 has been a pretty enlightening year for me. I must say, I am very happy with my life now. I think happiness should be the end goal that people should strive for, not accumulating a lot of dollars in their banks. If the point isn't to be happy, then what is the point? I don't know about you, but I am pretty excited for 2015! Have a great NY eve everybody, and a great year ahead as well!

Lately I've been posting a lot of damn chio photos. They are from, which have tons of photos under the Creative Commons Zero, which means free for anything! Trying to incorporate some chio photos into my posts every once in a while to break the wall of words that I sometimes assault people with.

It's un-BEAR-able!

"o hai dere, hvnt seen u in a while"

Stocks closing red today? IMPOSSIBLE!


Don't take my word for it, but I'm betting 2015 is not going to be a stellar year for the US stock market. Tepper is just playing with your feelings.

Tuesday, December 30, 2014

BullionStar Coin Purchases!

Yesterday after work, I was so excited because I was going to head down to BullionStar to pick up some coins that I ordered! This is what I saw:

Doh! I came at 7.30pm because I thought they closed at 8pm! In fact, they close at 7pm. Sadded, I made my way home.

Today however, I made sure that I reached at 6.30pm instead!

The showroom was nice and bright and there were so many pretty shiny things on display, nice!

I came in and I was greeted by a staff asking how he could help. I said I was here to pick up an order. He verified my order number, my identification, my items and my payment status in less than a minute. After that he excused himself to go and get my order for me. I walked around the showroom once and snapped just 1 photo, and he was already out!

We went through my order again together and physically checked all the goods. After that I signed a form acknowledging my receipt of the goods, and he packed everything up and sent me off with a bag with my purchases!

Whole process start to end? Less than 5 minutes. Fast and easy, I like!

So I came back home and gleefully played with my coins like a kid with new toys! I put them in direct-fit Airtite casings, and they look gorgeous!

Anyway, this is actually my first time handling bullion coins! I was surprised how big they were, and how SHINY they were!

I am honestly resisting the temptation to buy more coins now, they are really damn pretty, haha!

I have written about BullionStar before, so I'd recommend anyone interested in precious metals to check them out . My vaulted holdings with them is actually getting a bit ridiculous these days considering I am not a "prepper" and I don't think we're going to have an apocalypse, haha! How much of my holdings? Let's say even if you doubled my SGX portfolio, we're not there yet, hah!

Anyway, this is my treat to myself for surviving 2014, my first year as a full-time working adult. I hope you guys had a great 2014 too!

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.

USA, it's time to go Solo

US stocks have decided to go solo as they decouple from everything and anything that might give help support it's prices and give credit to it's already ridiculous and far-fetched rally.

Other Economies
Total World Stock Market (VT)? No.
World ex-US Stock Market (VEU)? No.
Developed Markets ex-US/Canada (EFA)? No.
Emerging Markets (EEM)? No.
Global HY bonds (GHYG)? No.
Total Bond Market (BNDX)? No. (Should be inversed)

Credit Market
US Junk bonds (JNK)? No.
US HY bonds (HYG)? No.
US Long bonds (TLT)? No. (Should be inversed)

Volatility (VIX)? No. (Should be inversed)
Crude Oil? No.

Crude WTI just traded below $53 and the market still can't decide if low oil is good or bad for the economy.

I wonder what relationship crude oil and the S&P500 has.... oh, look what I found.


Anyway, this is now just getting quite ridiculous and unbelievable.

Just unbelievable.

S&P500 - 2090
DJIA - 18045
R2K - 1219
NDAQ - 4315

Monday, December 29, 2014

Singapore Boleh! Jawboning HDB Prices Lower

Singapore is truly one a kind.

National Development Minister Khaw Boon Wan just jawboned the prices of HDB resale flats lower, saying that single digit falls in 2015 would be a "good development". From my reading, he did not imply that we are going to have single digit falls, but rather that single digit falls would be better than double digit falls. So, a double digit fall is definitely within the realms of possibility, which would of course bring more turmoil to the market than a single digit fall.

So anyway, while Yellin (USA represent), Draghi (EU represent) and Kuroda (Japan represent) are telling everyone that everything is fine, Singapore is actually dressing up Minister Khaw as Captain Obvious to tell people that "OEI, TOO EXPENSIVE LA!".

No seriously, he is making it very obvious. Another quote from his post today on the MND blog:
2014 marks the turn of the housing market in Singapore.  Prices have been moderating and the market shifting from a seller’s to a buyer’s market.  The shift is not yet complete and 2015 should see greater stability. - Minister Khaw
Is there another government cooling measure in the works, or is it just going to be a slow drag lower over the next 2 years as JP Morgan predicts?

Whether we have a "good development" or we have a "sustained period of residential slowdown", I think the signs are pretty clear. They are pretty much one step short of heli-dropping pamphlets telling people not to buy property.

From my silent surveying of the battle grounds, I see that the older warriors are getting ready to head back to their bunkers to wait out a long winter, while I see the younger ones similar to myself are wondering if "that was it?" and if they should buy the dip now before they lose their chance.

Anyway, whether we have a steep correction, a slow drag lower, a rebound higher or whatever, I believe that the market moves in cycles (thanks Ray!). We've been a boomin', so is it so crazy to be expecting a bustin'? With a little patience, we will see what happens in the future. (duh, sorry, Captain Obvious moment!)

Sunday, December 28, 2014

2 Lessons From AK

After reading today's post by AK, I felt very enlightened and decided to write a short post about 2 things that I have learnt from his post.

1. Don't ask barbers if we need haircuts

I know it sounds like a silly phrase, but this is a mistake that a lot of people make. The problem of this isn't that the person you might be asking is not knowledgeable about the subject in question, the problem is that his/her interests are most likely contrary to yours.

I am glad that I did not talk to an insurance agent about insurance when I first started out my personal finance journey. Instead, I went to talk to one of my friends who had left the insurance industry and I learnt a lot from her. With her being out of the industry, along with a free meal treat from me, she was more than happy to give me good pointers and tips that no practicing insurance agent would dare openly talk about.

A few months later, after I had voraciously consumed so much information about insurance, one of my friends who had become a full-time insurance agent asked me out for dinner. Of course, the usual question by him about if I have insurance and started saving and investing eventually came out. After a long session of one-sided schooling (not two-way debate), he admitted that there is a lot that he doesn't know, especially when it comes to the investing portion of his insurance business.

This isn't to say that my friend is a con-man, but he's just peddling things that he doesn't understand because that was the way he was taught to sell these products. Sell an ILP, get the most commission. Not saying that ILP is a shitty product with no uses, but it is a shitty product to most people.

And this isn't just insurance agents, it's everybody selling everything. You need to figure out what do they want, for you to assess if they can help you get what you want. Too many people fall into the naive trap of believing in the good and kindness of strangers. When the situation involves money, all bets are off the table. People do silly things for money, we all know that.

2. Don't buy things that have uncertain events already "priced in"

Paying premium for a housing location might be warranted if an MRT station will be built at your doorstep. Paying premium for a housing location might be foolish if an MRT station "might" be built at your doorstep.

This isn't just housing, this again applies to so many things in life.
"Using our in-house proprietary work-backwords calculation formula, as long as this stock continues to grow revenues by X% and earnings by Y% over the next Z years, we recommend a STRONG BUY in this stock. The catalyst for this stock should come from the full operations contribution of expanding into ABC country, which is set to complete in the year 2xxx as long as they are able to raise the funds needed and get regulatory approval."
This isn't to say that growth investing is bad. If you are working on good probabilities that what you are forecasting will be right, or just a bit off if you are wrong, then sure, this approach works great.

However, I see way too many people make investments that have "priced in" a future event..... which does not materialize in the future.

Ever heard of the story of that guy that bought a new condo and car because he was sure he would was going to get a promotion? And then he got fired instead? Haven't we all.

I'm just saying, paying for what you get today, instead of paying for what you might not get in the future is the more sound action between the 2 choices.

Saturday, December 27, 2014

A Small Home For Me Please

I just read this post by AK, and I found myself nodding in agreement the whole time. There was one specific portion which I just loved:
Financially, the shoebox apartment is less burdensome as it was much cheaper to buy and I also pay less in property tax. We always hear people saying Singaporeans are asset rich but cash poor. Although not always the case, many people "over consume" when it comes to their homes. Real estate can be good investments for income but, unless we have and are willing to rent out spare rooms, our homes are consumption items. -AK
I have long maintained that a home is an expense, it is not an asset. Exactly like what AK has said, unless you rent out your spare rooms, you are over-consuming.

Recently I got into a strong debate with my parents. They know that I am looking to move out soon, and they are actually also looking to move house (same house more than 20 years!), so they like to talk to me about property related news.

The debate started off when my father said that he is willing to co-invest and lend me money so that I can buy a larger place for myself. I immediately said no, and my parents were very stunned.

In their mind, a bigger house is a better investment. To be fair to them, my parents have only ever had 1 property, which they bought in the pits of a 1985/86 property bust. Because of this extremely fortunate timing, they have long held the view that the best investment that can be made is in a property. Therefore since property investing is so lucrative, I should channel my funds to buy as big of a house as possible.

However, this is not true. Unless I rent out my extra rooms, I am just living in a bigger, more expensive house. Although I do not mind to play landlord one day, with property yields looking to be in the mid 3% before expenses and taxes, I do not think it is worth it. On top of putting up with living with a stranger, there are so much extra inconveniences to put up with that is so hard to measure. I rather outsource such landlord acts to Saizen REIT. No hassle, double the yield. Fantastic.

Although the property will appreciate in value, bigger properties do not necessarily appreciate faster than smaller properties. I would imagine that their raise in value would be roughly the same if percentages were used, rather than total absolute amount. Of course if you use a bigger capital base to invest, you get bigger dollar value capital returns. Generally speaking of course. An excellent property investor might tell you differently, but he is an expert after all.

Therefore, I don't see the point in paying an extra premium for "over-consumption", which is in the form of spare room(s). 

His other points in favour of a small place have also won me over. Easier cleaning of a small house is definitely a plus point. I also like the idea of living a simple and minimalist lifestyle, not collecting so much clutter and junk in a house. His point about the carpark space was very funny, but also very true.

Now, I know shoebox living is not for everyone, especially for those people who live in private landed housing or lived overseas where houses are much bigger than in Singapore.

Throughout my younger years, I shared a room with my sibling on a bunk bed. All I had to myself is the bed, 4 drawers in a cupboard, a table and a shelf full of textbooks I hated, haha.

When I was in the university, I had a single room to myself and we had shared facilities. The room itself could not have been larger than 20sqm (215sqft), which I am probably inflating for some margin of error. In the room itself, there was a lot of fixtures, like tables, cupboards, wardrobe, so the actual livable area is much smaller. However, I still managed to fit all my clothing and belongings in the room and I was extremely comfortable! It was small, yet cosy.

When I moved to Europe for 7 months to study, I stayed in a 54sqm (581sqft) apartment.... with a roomate! Although we had much less belongings since we were living with just the things we packed in our suitcases, the house actually felt very underutilized. Our bathroom was huge, so if you take that into account and compared to a Singaporean dwelling, my apartment would actually be smaller than most apartment in Singapore. With 2 people we were very very comfortable. When my roomate moved out early and I had the whole place to myself, it felt actually a bit too big for me!

With that said, my point is that I have already lived in a small space for most of my life. I have tried and tested a 581sqft place, so I am very certain that a place similarly sized would be more than sufficient for my needs, which is why I am not considering getting any place much larger than that.

Everyone have to live somewhere. It's just whether you're renting, buying or squatting. For me, I want to buy something that is suitable for me and pay the correct amount. I could continue squatting with my parents and save thousands of dollars, but I think it is time I live on my own. Yes, I am paying for the independence and freedom, but that is something I don't mind spending money on.

Other than taking advantage of leverage and pocketing the difference after the sale (which makes it an investment and not a home purchase), I do not see the benefit of a larger HOME as a single. Right-size to what you need and feel comfortable with, as it is the same with the amount of insurance you should take up, and the investment risks you are assuming. To each their own, based on their circumstances.

Friday, December 26, 2014

Nostramoney: Property Thoughts

As a Singaporean (like all other Singaporeans, especially taxi drivers), I am an expert on the property markets. I'd just like to share my thoughts / predictions of what could happen in the future.

I strongly suspect more government related property cooling measures. However, knowing the government, they will be targeting to inflict maximum pain on "property investors". Why do I say so? I think the government believes that given the land scarcity in Singapore and the need for affordable housing for the majority of the population, people owning multiple investment properties are going against the grain. While the government is trying to keep housing affordable, property investors only gain from the opposite effect. The government will look for a way to align the entire market to their interest, and the way I see it is to penalize or eliminate multiple home owners.

I can envision much tighter multiple home ownership regulations, such as a higher initial deposit percentage, even a large minimum deposit amount regardless of property value, higher ABSD, shorter loan tenures and a longer duration for the SSD to taper off. Of course, these will only stop future speculation, but it does kill off many of the current property investors owning multiple properties.

Short-term, I can see an engineered smack down of the housing market to reduce current home prices. Unfortunately, this might be quite ugly. Probably this will be done by subtly hitting where it hurts, the mortgage-rental dichotomy. When US rates start to take off (probably wouldn't last long though), our rates will move up as well. However, I suspect the mortgage aspect will not be pushing prices up too much. Rates are not going to shoot to the moon unless we get very strong and persistent inflation. Under a normal scenario, close to no damage would be done on this front.

The rent side shows more promise in controlling the market. Rental rates are already dropping due to oversupply of units being added to the market. Little to none of these units are going to be moved off the market anytime soon since the SSD ensures that they remain rental units for the next few years. The supply side is governed mostly by market forces since any intervention will take considerable time to affect the market due to lag.

However, the demand side could be where the government can make some big changes. Singaporeans don't rent, full stop, end of argument. If the government wants to indirectly kill off property investors, all they have to do is to figure out a way to kill off rental demand. Long term, there are plans to have better dormitories which could eat into the OCR single room rental demand. Short term, tightening work visa renewals and immigration policies is probably already being done, making total demand in all segments slide. Corporate investors of private property could also be unfavourably treated, forcing investments out into other more productive sectors.

In the long run, it would seem to make sense to me that the government greatly controls, monitors and regulates the property market since land is such a scarce resource here. In the future, people in Singapore might not even view property as an investment, but rather as a luxury good for personal usage. It's a long-time away with a different way of thinking from our current mentality, but I don't think it's too far-fetched.

Iskandar is looking to be a dangerous money-sucking venture. I doubt it will be viable and buzzing until at least the turn of the decade. There was a week that I was in charge of the office mail, and I swear, the number of flyers and leaflets that came in advertising for industrial properties in Singapore is crazy. And it's not 1 property. It's an array of like a few different places scattered around Singapore. Don't even need to get started about the ones in Iskandar. I hear in the industrial estates, these flyers get put onto cars parked in the lunch areas during lunch time. It does not seem like the good times are here anymore. Buying property and making investments before anything sound happens is the precise and exact way the kiasu Singaporean makes his investment. Buy growth that is fairly priced in - if it happens.

With an on-going mortgage and zero rental demand, Iskandar is set to be a dud and money bleeder. I think a lot of capital will be stuck locked up there, capital that could have otherwise been deployed locally. Anyone who invested in Iskandar that came on the second boat is going to have a sour taste in their mouth.

On the home front, today's front page news of the release of net prices of units sold by developers is going to be very interesting. I think we will be seeing across the board downward revisions to home prices as the net prices will reflect a much truer and accurate picture of what has been happening in the market, without the clever use of whatever tactics to give the illusion of a well-propped up property market.

Supply will continue to hit the market, while demand continues to stay weak. Once multiple owners start feeling the cash drain of another property, they will have to relent. So many are clenching up right now, just hoping to ride out this wave. It's going to be a big and long one to ride out, and I suspect many people will be losing their current tenants unless they drop rates. Many of my overseas friends who have been happy in their locations are now all exploring their rental options once their contract expires. Many are not looking to move into better places with the same amounts. Many are instead looking to stay within the same area, but for much lower prices. If it is a matter of just shifting unit within a condo, they would do it to save the money.

I have been holding the belief that the property market will have a serious correction going into the final quarter of 2015, but now even H1 2016 seems possible too. What has been going on for the past year ain't nothing yet, but looks to be the slow drawn out of process of topping out. Admittedly, the reversal of price is happening very slowly, but I view it as a likelihood of a persisting weak market, rather than resilience and holding power.

Anyway, my current strategy as a potential home owner is just to wait on my butt for all hell to break lose. Buying a property near all-time highs is ludicrous and I think even fair-value is not fair enough for me. There will ALWAYS be boom and bust cycles. As a person considering a house for personal usage, my only goal is to minimize my housing expense. Any appreciation or depreciation of the property will not affect me since I am "consuming" it and I would not sell it, unless to move to another location. And since properties all move in the same cycle together, inflation-adjusted, the gains would be minimal rather than the phenomenal nominal gains that people like to use to lie to themselves.

Of course, all of this is just a simple fictitious prediction of the future by a silly 25 year old young gun on the internet. It can't be true... right?

[Book Review] Value Averaging by Michael E. Edleson

So I have actually read this book several months ago, but I've been just haven't gone about to blog about it because I think that probably a lot of people will think it's lame. Plus, DCA die-hard fanboys will have their entire meaning in life crushed by this book.

There are tons of investment books out there that tell us what to invest our money in. This book does not do that. It doesn't tell you to buy dividend stocks, ETFs or any asset allocation strategy. It simply does not care what you invest in.

This book tells you HOW to strategically invest your capital to accumulate wealth in the long-run. Dollar-cost averaging (DCA) is systematically torn down and killed by the value averaging (VA) strategy. While dollar cost averaging is far more simple and easy to execute, pimping your strategy using value averaging has proven that it outperforms DCA. Think of VA as the DCA+ version.

It is a beautiful strategy, especially if you appreciate the mathematics behind it. Buy more when "it" is cheap, buy less when "it" is expensive. The beauty of this strategy is that it works for any investment. As long as you can hazard a reasonable guess for long term returns, this strategy works.

Of course, there are no pros without any cons. The cons of this strategy is that you have to really understand the theory of it pretty well. The theory isn't really that complicated, but explaining it to someone that has never heard it before is not an easy task at all. This strategy also requires periodic reviews and it is very manual process. Those put off by some basic and menial number crunching and data entry on a periodic basis will not like this strategy at all.

On the flip side, is having a 30-minute monthly review to make sure that your finances and retirement is in order too much to ask? I think taking stock monthly is a fantastic way to remind yourself that you are in charge of your own financial future and encourage you to be a responsible adult.

That said, the past track record of VA is undeniably better than DCA or any other accumulation strategy. Buying low and selling high is age-old, time-tested investing wisdom that this strategy utilizes to beat the rest. Without a doubt, anyone who recommends DCA without at least acknowledging VA as an alternative strategy is living in the stone age of investing. VA has better returns, it is just more complicated to put in practice.

Strongly recommended for people that think DCA is a magical investing buzzword that improves your returns. After reading this book, you wouldn't even dare to suggest DCA without mentioning VA because your conscious will know that DCA is an inferior strategy. Anyone in the stage of accumulating wealth would benefit from this book.

Wednesday, December 24, 2014

Best Options for "High" Interest on Liquid Cash

Extra cash from your bonus this year and not sure what to do with it?

Well, if you do opt to make your money work out for you, I have some suggestions that you might want to explore for your risk-free, easy access emergency money!

Getting a good rate of fixed interest on cash is not easy at all with low rates around most developed countries globally. It is even worse if you need this cash to be liquid. That means, pow, within a week you want your cash ready to go!

Don't worry though, GMGH got your back and has done the dirty research. If you are looking for returns better than the bank rate (0.05% lame, booo), here's the best options of what I've dug out.

The OCBC 360 account is beyond amazeballs. So many people have discovered it and are reaping the simple joys of getting very good returns on their cash with this product. The catch? You need to meet conditions to get the full 3.05% interest. The catch of the catch? You don't need to fulfill all the conditions if you can't; just completing the partial list of conditions already allows you to be eligible for partial amounts of interest as well. See my full write-up on the OCBC 360 account for more info.

SCB Bonus Saver isn't too shabby either. 1.88% is still better than pretty much any fixed deposit being offered on the market today, except that like all the products I listed here, your cash in liquid! The catch? You need to spend $500 a month to be eligible for the bonus interest rate. Considering that you will probably be spending your money with OCBC to fulfill their criteria, this might not be an easy condition to fulfill. Unless you regularly spend more than $1,000 a month, you are probably better channelling your spending to OCBC. See my comparison of the SCB Bonus Saver compared to DBS and OCBC.

CIMB Step-Up Fixed Deposit is actually something that I think a lot of people don't know about, but would be glad to know. They offer a 5-year option that credits you interest every 6 months, and a 1-year option that credits you interest every month. Basically, after your cycle of 6 month / 1 month is complete, you can withdraw your amount with no penalty and keep the interest that you have earned so far! So, while it is technically still called a fixed deposit, it behaves very much like a liquid cash instrument. Personally, my research has shown me that unless you plan to keep your deposit amount intact for at least 3 years, picking the 1 year option is better. 1-year "fixed-deposit" at 1.05% per annum, only $10,000 minimum and pretty much unlimited maximum? Sign me up! See my thoughts on the CIMB 5 and 1 Year Step-Up Fixed Deposits.

Finally, the last product on our list is the CIMB StarSaver (Savings) account. Don't underestimate this guy. With just a simple $1,000 initial deposit and an additional $100 top-up to your account every month, you are eligible for 0.8% interest. Feeling lazy? Just set-up a recurring transfer with your bank to send over the $100 every month and forget about this cash! If you don't have your balance increasing, that's okay, you still get 0.5% interest, 10 times more than what the local banks are giving! Of course, this is SDIC insured for $50,000, so you don't need to be scared of Malaysian banks! Considering the other options above, this is ideal for people who cannot meet those more demanding conditions and minimum sums, but still demand decent returns on their cash. This is for you!

Just because you have decided to hold onto cash doesn't mean you need to let the local banks pay you a measly 0.05% interest on it. These are pretty much the most risk-free options that I can think of which gives back a fixed interest.

This my Xmas gift to readers, heh!

Up, Up, Here We Go?

"Up, up, here we go, go! Where we stop nobody knows"

Honestly, I think this is freaking insane. 1000 DOW points in 5 trading days. It's ridiculous. It's not the fact that the DOW is up a mere 5.88% that bothers me, it's the fact that it's up 5.88% in a week.

No pullback, very little basing before subsequent take-offs. This is a trend follower's wet dream.

To me, this is ridiculous. At this trajectory, the DOW will be 351,000 at the end of next year. Too much exaggeration? Okay, how about 22,000 DOW end of January? Or how about 19,000 end of next week?

We've gone too far, too fast. I vote that we need one of them "healthy corrections" soon.

These kind of explosive rallies are only seen at 2 points. The end of bear markets when the smart money pours in, and the end of bull markets when the retail investors pour in. (a.k.a. euphoria)

Then again, we did have a 5.1% drop earlier this month. So I suppose in today's centrally planned market, that was considered a bear market that we are recovering from.

I'm not saying it can't go higher, but I'll be damned if we do. Like literally. Jesse Felder makes an excellent case for some downside given the huge divergences with all areas of the bond market. A good read with some light touches on energy too.

Anyway, I'm signing off with a timeless nugget of investing wisdom:
You should always become more skeptical of any investment that has recently soared in price, and you should always become more enthusiastic about any asset that has recently fallen in price. - Jason Zweig

Tuesday, December 23, 2014

Happy Holidays 2014!

Last week I mentioned some suggestions on what you can do with your year-end bonus, and remembering what I wrote last month, I listed giving to charity as my 1st suggestion.

So this year, I have decided to give away all my Google AdSense earnings which comes up to $76.89 as of today. I blog as a hobby and not for profit. Maybe if I was a chiobu like Andrea Chong I would consider blogging a viable job. Sadly, I am not. *sobs*

Anyway, on top of that, I have decided to match this amount with my own money one-for-one, and round up the total amount to $10.

So, $76.89 X 2 = $153.78 round up to ~ $160

With that amount in mind, I began my search for the charities that I would like to donate to.

Step 1) Find charities eligible for one-for-one matching donations (double help for the charities!)
Step 2) Find regulated charities (IPC) (Charities Act)
Step 3) Pick 16 charities that I identify with from the overlap

I know some people might scoff at the amount, but it doesn't bother me one bit. Every little bit count and adds up over time. Isn't that what we've all learnt and know as investors? You've got to start from somewhere.

For me, that is here.

Happy Holidays everyone :)

Monday, December 22, 2014

URGENT: Last Day for DBS promotions!

DBS is strangely generous this holiday season. They have 2 promotions now. The fixed deposit promotion ends TODAY, while the Paylah! promotion ends on the 24th.

On top of these 2 promotions, they are also having a $888 lucky draw for customers who register to use SMS banking. I am thinking of registering just for the chance to win, haha.

Although I really like DBS for their convenient ATM network, I actually think that they are a pretty mediocre bank. Then again, I think they probably have a very strong and healthy market share and don't need to fight for deposits. Probably even have too much deposits on hand, haha.

Anyway, 1.5% interest on fixed deposit doesn't seem like a lot to shout about, especially with my OCBC 360 earning interest of 3.05%. However, compared to other options available with a minimum capital of only $1,000, this promotion seems rather good! For people with cash balances over $50,000, I think this fixed deposit promotion is a good way to lock in a nice risk-free rate. This post by Scg8866t got me thinking about fixed deposits like that.

However, their Paylah! app is really very convenient. Since I have started using it and promoting it to my friends, I must say that my friends pay me a lot quicker. Is that a testament to how easy it is to use this app? I don't transfer money to my friends through this app, I only collect money from them! My friends easily help me reach my target monthly spending on my credit like this, haha!

Anyway, if you have spare cash over $50,000 looking for a fixed deposit, consider this POSB promo. If you are comfortable with mobile banking, get Paylah! and get free $5!

Happy Holidays everyone!

Sunday, December 21, 2014

Warning: Strong Opinions Ahead, Sensitive People: DO NOT CLICK

Once I started this blog, one of my main aims is to educate myself about everything and anything that is relevant and has to do with personal finance.

I have made a commitment to myself that I will not stop learning until I am totally comfortable and satisfied with my knowledge that I have attained. It might take forever. Lifelong learning yo. Education can come in many forms. A teacher would be nice, but I doubt it would be cheap, and I also doubt the ability for the teacher to provide me depth of knowledge in the breadth of subjects that I am interested in. Therefore, I think that the most accessible, cheap and unrestricted form of education is still through books.

This year, I have already reviewed 3 books:

Successful Investing is a Process by Jacques Lussier
The Nature of Risk by David X Martin
Investing in REITs by Ralph L. Block

and on top of these books, I still have more to go, and I am collecting more and more, every so often!

I have already read through Value Averaging, All About Asset Allocation and I am finishing a very tough book to read about LIFE INSURANCE. Yes, kill me right? It's painful to read, but it is hands-down an AMAZING read. So, look forward to book reviews of those books soon! I have been so busy lately that I haven't had the time to do so many things!

Okay, now comes the heavy part that some people, who thinks that humans are beautiful, special unique snowflakes who are all different, yet somehow equal, will be pissed off to read.

I am a believer of multiple intelligences. Someone who is not a math genius can be an excellent strategist. Someone who is a poor writer can be an excellent singer. The list goes on. Different people have their strengths and weaknesses and few among us are lucky to have it all. Being intelligent allows your opinions to weight more in the areas of your expertise. Being intelligent across many things merely allows more of your opinions to carry weight across more topics. Being intelligent in a few things does not mean that your opinion is irrelevant. However, it does mean that your opinion is respected and limited to fewer areas.

So what does all this have to do with anything?

I don't know about you guys, but I vehemently HATE people with an air of arrogance telling me what to do, when they don't know what they are talking about. Why pretend you are an expert about something, when you are not? Knowing one obscure magical tidbit of information or having an experience with the subject matter does not justify you as an expert. Opinion is totally fine, people are entitled to their own opinions. Many people have many opinions. Should they all be listened to? I think not. People with no expertise in such areas should not impose their asinine half-wit opinions on others that know more.

Freedom of speech is one thing, Equality of speech is another. You can say stuff, but it could be all be shit. Maybe you even think that what I am typing now is shit. That's totally fine. It's the internet, I can type whatever I want (sort of, anyway). However, equality of speech? You determine whether my opinion is worth a space in your brain. You can write me off as an idiot and never come back to my blog. That's fine too. Stupid people have the right to say things too, but it is up to other people to determine if what they are saying has any value or worth. Voting with your attention.

So anyway, why the sudden rage and angsty post?

I've been seeing lots of "chatter" on my social media lately. I see a lot of people flaming and hating because a person has a certain opinion. I know the way that I might describe it sounds very mild, but the hate is so strong. These people link a person's view to his entire worth as human being. You don't hate the government? Burn in hell you (XYZ Political Party) dog! Too many stupid people with too many stupid opinions, in my opinion.

I was talking to someone recently. He was criticizing that Singapore has no freedom of speech. I just laughed. You can't blame him though, he's a newly converted citizen. Yes, the sort that want to spark an uprising and take down the government. So it can be exactly like his previous country's government. Which he left. Because it sucked. Hmmm, I wonder why. /sarc

Now, hold on a second. Why was I talking about books and now this? What is the link? Well, most of all the touchy and sensitive topics that I have been reading lately involved politics, which is economics. If you don't think economics = politics, you're living in some delusional fairytale world. Anyway, while I was mentally taking note which of my friends will have absolutely zero weight in future political discussions in my mind (friends are still friends for other reasons. I don't pick friends based on their political grasp), I saw a post by BFP about a book he just read.

The book is "Why Not Capitalism?" by Jason Brennan. It is pretty much a direct response to G. A. Cohen's book "Why Not Socialism?". So not only do you get a book that tells you why capitalism is good, it tackles and wrestles the socialism argument head-on! (spoiler: socialism loses) I am very excited to read this book to sharpen my arsenal of weapons to fire against socialism supporters.

So, there's the link. I want to read a book about a specific topic to educate myself because I see so many people with so many strong opinions putting down and spreading hate because of arguments about shit they probably don't know (I say probably, because I am only 90% certain they are wrong, because the idea is still not fully formed in my head yet). I want to be able to cut through the noise and figure out what they are saying is right, and what is wrong.

This is not a pursuit of self-validation that my current stance is right. I used to be a strong believer of Socialism before I realized my arguments were horrible. This is the pursuit of knowledge. If I am wrong, defeat my arguments and give me something better. I am more than glad to change allegiance. If I am right, so be it til the day I am proven wrong.

Friday, December 19, 2014

Stocks Surge but Oil turmoil? Hmmm.... 1 - 1 = 3?

I beg to differ.


Hmmm... so who is this NAIMI fellow?

Saudi Arabia's Minister of Petroleum and Mineral Resources. Check wiki if you don't believe me.

Demand is dropping in my opinion as I have mentioned before. I don't doubt there is oversupply, especially coming from the Americans through the shale oil, but I don't think demand is strong as well.

I mean, is my basis of logic too rudimentary or simple? World growth down, demand for oil is down. Really, that's kind about it.

So, here comes the confusing part: Is lower oil good for the economy?

However, I think we can all agree that by now we have come to the same conclusion about what to do in various situation.

What should we do when we see...

Bad Macro data?
Credit spread widening?
VIX divergence?
Oil dump?
Currency carry unwind?
Inflation expectations lower?

Whatever the question is, we now know the answer. Buy Stocks. The answer is always, buy stocks.


Meowwwwwwww *BOING* *BOING*

Deze market juz be retardid.

Oil dropped 2%
Then it rallied 8+%
Then it dumped and pumped back.
Now it has dumped all the way back to where we began.

Oil over 2 days = no change
US indices over 2 days = 5% higher

Major disconnect much? Besides this disconnect from Oil, we are also disconnected from VIX and credit now.

So I guess Oil has stabalised and its time to go long eh? I'm confused now, is lower oil good or bad for the economy? The story changes every day depending on the colour of the S&P arrow. I can't keep up.

Sometimes I don't know if I'm at the casino or at the circus.

Thursday, December 18, 2014


Because a major index rallying 4.5%+ in 2 days in totally un-rigged. It's not like we're near all time highs, right?

Oh wait... Sorry, I'm hearing something.

Oh, is that right?

I guess we are near all time highs!

Yes, ladies and gents! We are only 1.5% away from making all time highs!

With moves like that, you might've thought we were just coming out of a bear market, haha!

Anyway, yesterday's rally was the 2nd best 1-day move of the past 3 years! I was actually hoping that Janet Yellen would be a dud and accelerate the downside, but I was wrong! Luckily I decided to take some chips off the table.

To be frank, I've still got skin in this short play, but I'm delusionally hopefully for this to be a massive dead cat bounce (along with oil, but oil does look like we are in at least a short term reversal with HHs, HLs) so we would immediately reverse hard back down, or for at least a retracement to get a better exit position.

The immediate rally after every sell-off is getting faster and harder. Soon every 1% drop will be met with a 10% rally! Next thing you know, we're on the moon!

Bonus Bonus, What to do with it?

It's the year end, and you guys know what that means... bonus time!

Well, since everyone like to give their inputs for everything, I thought that I'd also share my ideas for what to do with your bonus money. At least, this is what I am doing with mine anyway.

1) Give to Charity

I don't want to sound preachy or give the image of having moral high ground, but giving to charity is in line with my personal life views and values. Consider it!

2) Patch Up Loose Ends

Had an emergency trip to the hospital? Had to attend more weddings / baby showers than usual? Needed to go on an emergency holiday last-minute or else risk going crazy? All are within reasonable limit of happening.

Use this period to evaluate your current emergency fund, and use your bonus to top-up any shortcomings and keep it in top-tip condition! Nothing helps you sleep better at night knowing that if you get fired from work tomorrow, you have the financial ability to sit at home in your underwear for the next few months watching TV and going for interviews.

Also, remember to pay people back any money if you owe them anything!

3) Give Yourself A Treat that YOU Enjoy

You've worked hard all year, why not reward yourself for making it through life an extra year? The point of the life we live in is not to accumulate as much money as we can. Money itself does not bring happiness, it is the things that money can buy! Giving gifts to family and friends also count as giving yourself a treat. You enjoy the act of giving or the after-effects of a closer relationship!

For me, happiness is cheap and comes in many forms, such as giving my friends a treat, buying a shiny trinket from online shopping or even something as silly as buying new stationery for my desk to make work easier to get by! Don't be a sheep and think that a regular and accepted way to spend your bonus and receive a standard unit of December happiness only comes in the form of expensive branded retail therapy or travel to faraway place.

I'm probably happier just turning on the aircon in the afternoon *GASP* and quietly read a book on the sofa than having a staycay~ at MBS and taking selfies at the infinity pool. Not to say that it's wrong, but I know what makes me happy and I know I don't need to spend a lot of money to be happy!

4) Make Your Money Work Out

I would say the best case scenario for the person who has more than ample liquidity would be to do a VC-MA or to do a cash top-up to their CPF SA. Tax savings plus risk-free 4% per annum, how do you beat that?

Another option for those that don't want to get locked out of their money is to do an SRS contribution. It is an investment account that is tax-sheltered! Why not?

Finally, your own good ol' investment instruments could always use a nice boost if you ever have a windfall. However, instead of just plunking money as you would usually do, perhaps use this opportunity to rebalance your allocations?

5) Buy Snacks To Eat While Writing A Blog Post Telling Others What To Do With Their Bonus


Hehe! So, what are you doing with your bonus this year?

Wednesday, December 17, 2014

Locking up some HOLIDAY GAINZ

Santa Claus rally my balls. But don't worry, it's okay. My balls are happy and glistening just like Rudolf's nose right now, since I went short late November. As you can see, I have been selling the rips all through the past week and it has been serving me pretty well. No guts, no glory, eh?

The little orange triangles are my short entries over the past 3 weeks. Er by the way, this isn't my "virtual trading" account like the 17 year-old kid from NYC. These be real tradez yo.

Anyway, I don't need to justify what I'm doing to anybody. You can believe me, or not. I'm not giving out any advice or offering any services, so I don't really care. I just say what I have done. This is my journal. It irks me that "investors" play blind mice and follow "trades" that they see on blogs and then blame these bloggers if their "trades" aren't spectacular. Honestly, if I had that much power and influence, I MIGHT SAY THE OPPOSITE AND FADE EVERYBODY. I just kid. That would be unethical and totally wrong, right? Oh wait, this is the Internet. Why are you believing everything that you read?

Sorry I got all riled up. Well, back to me then.

So, with the FOMC up later, I decided to book some profits. FOMC days are usually really volatile and it seems like we can go either way really fast. Technically speaking, I guess we can be considered short-term oversold and expect a bounce. The correlation of Oil and the US indices are crazy. Oil at $55 handle. Who would've thought eh? As massively oversold the Oil complex is, and the risk of a strong bounce being very possible, it still is within probability for Oil to sink even lower. Compare this drop to previous times in history. It has been worse before. If the US indices continue to follow Oil, I wouldn't be surprised if we go lower.

Anyway, my trading strategy from here is still the same. I'm going to short the rips, and cover some of my position during dips. I'll let the other half continue running until I see a higher high and a higher low. And then I'll step aside and let this stupid market rally again, and I'll go short. Why short it down instead of buy it up? Valuations are leading me to believe that down is the path of least resistance from where we stand. This bull market is old, and I would very much gladly like to see it die, even at the expense of the global fallout to my other investments elsewhere. Malinvestment requires busts to clean out the system so capital can be redeployed properly.

For those people freaking out, remember, we're only 5% off all time highs. During the GFC, stocks dropped 60%. If you don't feel comfortable with your equity allocation over the past 1-2 weeks, you are holding way, way, way too much equity for your own good. There's no harm "sitting on the sidelines in cash" if you feel comfortable. We aren't fund managers. We don't have monthly, quarterly and yearly KPI to hit, benchmarks to beat and mandated allocation to deploy capital. That, my friends, is our edge as retail investors.

Tuesday, December 16, 2014

Lippo Malls: Parachuting after the falling knife!

Lippo Malls today went as low as $0.305!

LMIRT is actually one of my first few investments that I made back in June.

After reading B's post and SI's post, I just wanted to vomit out the thoughts in my brain so it's not nagging at me to be expressed.

I gotta say, they are both hardworking investors and got down to crunch the numbers given the new information available. Even better yet, they are willing to share that information and their opinions publicly. Awesome folks.

Me on the other hand, I don't think I'm that detailed. Going down to the level of individual properties and acquisitions is just too much work for me. I understand my shortcomings of investment analysis and I think this is my greatest one. However, there are pros and cons to my (lack of) investment analysis.

Because I only read financial statements, it is easier for me to cover a much larger range of companies, since the information is very comparable. I guess my ideal style of investing is actually more along the lines of ghchua or Sanye. When I look at Sanye's portfolios, sometimes I feel weak in the knees and start having dirty fantasies. Yes, that's how weird it is. Their style seems to be to have a watchlist of solid companies and to accumulate them on weakness.

I guess the difference between myself and them is that I am casting a slightly bigger net, so I am catching more things that they would normally give a miss. My watchlist without REITs and trusts is 90+ companies. Doesn't matter though, everyone has their own style which reflects their own edges and also emotional control.

Anyway, back to LMIRT. I managed to pick up some lots on today's price weakness. The yield should be clearly pushing over 8% now.

Following my on previous train of thought, if I liked at 6.7% yield, I would LOVE it at 8% yield! And yes I do, hence the accumulation.

Compared to Saizen and Croesus which is in Japan that is systematically being destroyed by the economic nuclear bomb selfie unleashed by Shinzo (Kanin-)Abe and his government of delusional self-taught economics geniuses, Indonesia DOES have an infinitely better narrative compared to Japan 10-20 years into the future. A huge population, relatively young, with plenty of room for development and growth.

My very deep study into REIT literature has also told me that discounts to NAV are not commonplace. As a retail REIT, LMIRT is actually is a more premium and stable REIT sector. The only thing I see as a real risk in LMIRT is the currency effect. Everything else, I would like to imagine it is a mispricing of the market.

The numbers are attractive and the narrative is good. The only thing that is worrisome is the trend of almost no shareholder value. Will this be a dud? But if so many people are throwing in the towel now, this feels like the best time for me to go in!

Oh GMGH, you silly contrarian!

Monday, December 15, 2014

You Die, I Die, Everybody Die!!!

There has been a lot of oil talk recently, and seeing it reminded me of the above clip.

Unfortunately, as much as I hate to cite irresponsible news sources, I am citing CNBC. On the plus side, I am not quoting them, but I am quoting people that were included in their article.
"It's (oil) actually much weaker than the futures markets indicate. This is true for crude oil, and it's true for gasoline. There's a little bit of a desperation in the crude market,"

"The Canadian crude, if you go into the oil sands, is in the $30s, and you talk about Western Canadian Select heavy crude upgrade that comes out of Canada, it's at $41/$42 a barrel. Bakken is probably about $54."

"In the actual physical market, it's fallen by even more than the futures market. That's a telling sign, and it's telling me that this isn't over yet. This isn't the bottoming process. The physical market turns before the futures,"

Tom Kloza, founder and analyst at Oil Price Information Service

May the best man win, free-for-all fighting. Whoever has the lowest cost of production and can continue bring profitable at this price will survive. That seems to be the current mentality of the oil producers now.

This is simple game theory.

You die, I die, everybody die.

Sunday, December 14, 2014

Property? Don't Forget the Duty!

As some of you might know, I am looking to get a property of my own. I am in the midst of shortlisting properties and figuring out the DIY procedure, so that when (note: not if) the property crash comes, I will be researched and well-prepared to squeeze all those poor sad sods with weak holding power forced to fire sale their poor investment decision for the absolute very best price that I can get.

We're talking about possibly a huge amount of money saved, which to me, I like to translate to how many months and years I would be slaving away at my job to save up that amount. It is sad, but one man's loss is another man's gain. Not many things in life are win-win.

Anyway, when the property market crashes, I realised that there is a few things to note about duty!

1) Seller's Stamp Duty (SSD)

Property that was bought after 13 Jan 2011 that are being resold will be liable for SSD. That means that any recently launched property that you are looking to buy over, the seller has already probably baked in the effects of the SSD into his selling price.

I think this is especially useful because many people don't like to psychologically sell at a loss. So if you can work out what was their rough purchase price with the SSD, that might be a price many are willing to take to quickly exit their position and just be breakeven instead.

This SSD is going to be a real bitch for people who bought investment properties recently that cannot find any tenants and are just bleeding out slowly.

2) Buyer's Stamp Duty

Basically, only the 1st column concerns me, however for the sake of people wanting to buy an investment property and this downturn too, I've left that column intact for your reference

1% of the first $180,000 = $1,800
2% of the next $180,000 = $3,600
That gives you $5,400 of BSD on the first $360,000 of a property,

So, any property above $360,000 (which is probably any condo) will have their BSD forumla as such:

BSD = (Property price - $360,000)*3% + $5,400

A necessary cost and evil in anyone's purchase of a property.

So, that's it for stamp duty. I am going to write another property related post tomorrow that has been on my mind for a while. Anyway, enjoy the rest of the weekend!

Saturday, December 13, 2014

Oil's Slippery Slide

So hey, who else thought that the $60 was going to be a line in the sand?

Woops! Guess not.

I have written about oil last week, so it's not really a surprise to me that oil is slipping.

Anyway, I found an even better picture that shows oil breakeven costs.


Whoever is going around spreading the narrative that, "lower oil prices is being masterminded by the US. they are manipulating the saudis to drop prices so that russia gets hurt" is just full of s***. Lower oil prices hurts the energy sector of the US market like shit.

Please don't get me wrong. My commentary isn't meant to be "Yay, lower oil prices! I told you so! Suckers with all your O&G counters!". I am long term bullish oil. At these prices, O&G counters look really attractive to me! Lower oil isn't the outcome, lower oil is the problem.

I think that the massacre of this industry is going to have massive effects on the broader economy. Talking heads on teevee like to say how isolated the oil sector is, but I don't think they are right. When you hear the word shale, what word always comes along with it? If you said "booming", you're right.

The shale industry has grown massively and rapidly, employing tons of people and borrowing a lot to fund this expansion. If this industry goes kaput, so goes the rest of the economy as unemployment spikes, along with all the other goodies that come along with it.

Lower oil prices isn't the REAL problem. The REAL problem would be if these low prices persist for a low period of time, leaving all the commercial hedges out swimming with no protection anymore. And that is going to be a big problem. Not oil spill, but blood spill. *ba-dum-tissss* Oh come on, give me a comedy award already!

Friday, December 12, 2014

10 Legendary Investment Rules From Legendary Investors

I just read this fantastic article by Lance Roberts, which is such a timely reminder.

These guys are all f***ing legendary. I would rather meet anyone of them instead of Taylor Swift. I actually might pass out if I see them!

(Hey, would you look at that! 10/10 guys! Is finance a sexist world or what? Feminists out there be ragin' right now)

Who Where What
Jeffrey Gundlach DoubleLine "The trick is to take risks and be paid for taking those risks, but to take a diversified basket of risks in a portfolio."
Ray Dalio Bridgewater Associates “The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.”
Seth Klarman Baupost “Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, how much they can lose.”
Jeremy Grantham GMO “You don’t get rewarded for taking risk; you get rewarded for buying cheap assets. And if the assets you bought got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk; you are going to be punished for it.” 
Jesse Livermore - “The speculator’s deadly enemies are: ignorance, greed, fear and hope. All the statute books in the world and all the rule books on all the Exchanges of the earth cannot eliminate these from the human animal….”
Howard Marks Oaktree Capital Management “Rule No. 1:  Most things will prove to be cyclical. – Rule No. 2:  Some of the greatest opportunities for gain and loss come when other people forget Rule No. 1.”
James Montier GMO "There is a simple, although not easy alternative [to forecasting]... Buy when an asset is cheap, and sell when an asset gets expensive.... Valuation is the primary determinant of long-term returns, and the closest thing we have to a law of gravity in finance."
George Soros Soros Capital Management “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.
Jason Zweig Wall Street Journal “Regression to the mean is the most powerful law in financial physics:Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.
Howard Marks Oaktree Capital Management The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.” 

This is of course an ugly ass table if there ever was one, but hell, if I was good at HTML and website editing, the rest of my blog wouldn't look this bad, would it? Anyway, this is definitely a keeper of an article, which is why I'm specifically archiving it in a post on my blog forever! These are timeless quotes, which are gonna be permalinked, just like Bob Farrell's 10 Rules and Jason Zweig's timeless advice.

Check out my shorts!

Check this out.
Each and every single line of that chart shows the daily performance of every trading day since 2014 on a percentage basis.

Given that in a typical year there are about 250 trading days and we are almost at the end of the year, let's just say that maybe 235 days has passed since the start of the year.

Given our historical data, there are 5 times that the market closed higher than its current point today.
There are 234 times that it closed loser than its current point today.

I take it that the odds that the SPX closes below its current level of 2054 to be about... 97.5%.

I like my odds. Shorts baby, shorts.

Thursday, December 11, 2014

The Best SRS Bank?

Back in April, I wrote about the Supplementary Retirement Scheme that Singapore has in place. My conclusion was that the SRS account offers not much benefit for people in the lower tax brackets, considering that your money is locked-up for many years. So unless you are currently being taxed in the 11.5% tax bracket range, there is little benefit of the SRS scheme.

However, for the older people and those in better jobs, putting aside some of your money being taxed above the current $80,000 threshold (that is now liable for 11.5% tax), it would be advantageous to put your retirement money to work in the SRS account to let it grow tax-free.

Anyway, I was just wishfully thinking to myself, "Hopefully I will have to open up and SRS account one day... why not check out which is the best bank currently?"

So which banks offer SRS accounts?

It is clearly listed on IRAS, there are only 3 banks:

DBS (schedule of charges)
OCBC (more info)

So, as you can see, DBS clearly has a nice schedule of charges for the transactions and service fees of the account. I think the most painful thing is the $2 charge per quarter per counter. That means $8 a year for every stock / unit trust you have. Currently, I think I hold almost 10 different unit trusts and more than 10 stock counters! That would be... $160 a year in fees? Of course, if you only invest in a single counter or a single unit trust, then the charge is just $8 a year. But you know, diversification.

OCBC did not list their schedule of charges, so I was a bit confused. I sent them an email asking for their fees regarding the SRS account, and I was pleasantly surprised by the email I received back.

The SRS account under OCBC carries no service fees or transaction charges! With the exception of CDP charges, this is pretty awesome!

UOB also did not list their schedule of charges, and I am very lazy to email them about it. Why? I do not have a bank account with UOB. I think they have great fund management services (I use their unit trusts), but as a consumer retail bank, I do not find them compelling at all. However, snooping around the internet, I did find myself in a Hardwarezone forum and certain users have commented that UOB waives all transaction and services fees. Take it with a pinch of salt and contact UOB for confirmation, aites?

So, from my obviously undetermined but lazily investigation, I have come to the very unscientific conclusion that OCBC is probably the best bank for your SRS account. UOB would be 2nd place even if they do waive all charges. Waiving charges and having no charges are different things, because the waiver can be revoked any time. What is certain though, is that DBS is at the bottom of the league.

FSM replied to a post regarding this exact topic, but the information is a year old, but the evidence that they digged up seem to confirm my conclusion.

TL;DR: People over the income bracket of $80,000 should want to consider opening up an SRS account. OCBC seems to be the best bank for an SRS account.

To those out there with SRS accounts, which bank are you with and what are your experiences with them, and also the fees that you have been paying? Would love to hear from you guys!