As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

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Tuesday, 16 November 2010

DBS to sell preference shares to retail investors. Really ah??? (2)

Read? DBS to sell preference shares to retail investors. Really ah???

Yesterday, two colleagues asked  me can buy or not?

This is what I told them?

  • It is dumb to compare the yield between a risk-free, short-term  instrument like fixed deposit and long-term capital-locking instrument like NCPS when you are very sure that you will be holding it for the next 10-20 years. Anything comparing with near zero returns will make you feel damn shiok! But why lock up your capital for 10 years when every 4-5 years a big bear will come?
  • The current low interest rate 0.X% has only ONE way to go that is UP i.e. 1%, 2%, 3%, 4% or even higher. Nobody know exactly when but the way UP is definitely certain when governments start increasing rate to fight inflation.
  • DBS (mother share) is currently trading at around 4% dividend yield so does DBS NCPS 4.7% still make interests-wise sense when you already have clear intention of holding it over the next 10 years.
  • When interest rate rises, probably stock price of DBS NCPS 4.7% may have to fall even below par to offset the rise in interest rate to attract new buyers. That is the way that risk-reward mechanism works in the market.
Good or not, they decide themselves. LOL

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