For small retail investor like Uncle8888 who has a full-time job to take care and his earned income is enough to feed his family of five member as single household income. It is tight but manageable!
He has learned one lesson after looking back at his past 16 years records in long-term investing and short-term trading. It is better NOT to speculate in the stock market for monthly or daily cash flow.
Trading for a living is a full-time job. Are we financially off better in trading for living or working for a living?
We should be true and honest to ourselves after we have tried our hands on it.
Golar LNG and Schlumberger sign Memorandum of Understanding
LNG today announced that it has signed a Memorandum of Understanding
with Schlumberger to co-operate on the global development of greenfield,
brownfield and stranded gas reserves.
the Memorandum, Golar and Schlumberger have agreed to jointly market
gas monetization solutions to owners, investors and governments. Golar
will contribute the Floating LNG assets and technology while
Schlumberger, via its special project management division, will provide
upstream development knowledge, resources and capital. The intention of
this integrated offer is to gain access to a wide range of uneconomic
gas reserves by delivering low-cost LNG production solutions.
is a ground breaking agreement that will provide resource holders with a
completely integrated package both reducing risk and securing financing
for gas projects. The main aim of the venture is to accelerated the
time it takes to bring proven gas reserves into production.
parties have initiated their activities and have already made solid
progress expecting to announce the first project within the next two
Some people tend to forget that Kep Corp is a conglomerate and not a pure O &G player so it is extremely difficult to analyze its future and transformation!
What did you see?
CW, seen you invested in KepCorp >15 years, how does it's SBU fit into BCG matrix?
1. Star 2. Cash Cow 3. Question mark 4. Dog
What can we see from the PAST and make some guess into its FUTURE?
It is quite clear. Right?
How about Cash Cow?
Why does Kep Corp choose to return dividends in specie for former K-Green and K-REIT to its shareholders and not keeping cash cow for itself?
Probably two reasons:
(1) Let shareholders themselves to decide to continue to get small regular milk or one-off small meat
(2) Avoid pumping in more capital to feed these cash thirst BUs.
Back to (1) How much more pro-rated dividends does royal shareholder get from ex K-Green and K-REIT on top of dividends from Kep Corp? ex-K-Green (2010 to 2015) : $0.15 Kep Corp (2010 to 2015): $2.89 + 5.2% more K-REIT (2013 to 2015) : $0.056
Been following your blog for a while and
noted that you have investments in Keppel and Sembcorp. Recent news is
that Sete Brasil may be filing for bankruptcy, if true, that will really
affect both companies.
What are your views and are you still holding onto shares of both companies?
The PAST is NOT the PRESENT. The PRESENT is NOT the FUTURE.
Entries/Exits. That will shape our own investing experience over long run and likely we will make decisions based on that experience. Good or bad feeling! So we are biased based on that feeling. Right?
Learning from wise men of the past ” If you have a worry problem, do these three things: 1. Ask yourself: “What is the worst that can possibly happen?” 2. Prepare to accept it if you have to. 3. Then calmly proceed to improve on the worst.”
Newton said: "If I have seen further it is by standing on the shoulders of giants."
When companies started cutting dividends during crisis to save themselves; and what if the cut is even worse than our most conservative estimate. It may seriously impact our desired level of "passive" income in the Land of Financial Independence.
With Kep Corp cutting its FY 15 dividend to 34 cts instead of market expectation of at least 40 cts. This is a good reminder to Uncle8888 on the importance of strengthening his Tap 1 in his Three Taps Solution for Sustainable Retirement Income for Life.
Can we as small retail investors seriously depend on dividends as bulk of our "passive" income in the Land of Financial Independence?
For Tap 3 cash flow, Uncle8888 has downsized the cash flow on his two top holdings in view of more uncertainty in the next two years as follows:
Kep Corp's dividend to 30 cts in 2016, 28 cts in 2017 and 2018
Semb Corp's dividend to 10 cts in 2016, 8 cts in 2017 and 2018
Revised Cash Flow for Tap 1 (Interests) and Tap 3 (Just on Dividend Income)
2Q FY2016 Financial Summary Revenue: $195 million, unchanged from a year earlier Operating profit: $98 million, down 4% Net profit: $84 million, down 3% Earnings per share: 7.8 cents, down 3% Interim dividend per share: 5 cents1, up from 4 cents All figures are for the year except for figures in brackets which are for the year earlier, unless otherwise stated Singapore Exchange (SGX) today reported net profit of $83.7 million ($86.6 million) for 2Q FY2016. Revenue was largely unchanged at $194.6 million ($195.1 million). Expenses increased $3.5 million or 4% to $97.1 million ($93.5 million). Earnings per share was 7.8 cents (8.1 cents), and the Board of Directors has declared an interim dividend of 5 cents (4 cents) per share, payable on 4 February 2016, in line with the stated dividend policy. Net profit for 1H FY2016 was $183.0 million, up 11% from a year earlier ($164.2 million), on the back of a strong first quarter.
Outlook Our results this quarter reflect persistent weak market sentiment. The outlook for global markets remains uncertain as market participants adjust to the recent change in US interest rate policy, slower growth in China and volatile commodity prices. While we have successfully launched a number of new initiatives this past quarter, including SGX Bond Pro, their initial contribution to business performance will be marginal. We remain committed to our long term growth strategy. We are focused on managing our costs, and operating expenses for FY2016 are now expected to be between $415 million and $425 million. This is lower than the previously announced range of between $425 million and $435 million.
Technology-related capital expenditure is now expected to be between $70 million and $75 million, lower than the previously announced range of between $75 million and $80 million, as we re-prioritise our projects.
1. Distribution per unit (DPU) of 0.93 Singapore cents was declared for the quarter ended 31 December 2015.
2. Group revenue for 9M FY15 was S$427.9 million, 12.5% higher than
9M FY14, with full quarter contributions from the Crystal and KMC
acquisitions, partially offset by (i) lower revenue from City Gas as
town gas tariff decreased with lower fuel prices, and (ii) higher
negative CRSM(1) adjustment incurred by Basslink and the impact of the outage of the link since 20 December 2015.
3. Profit attributable to Unitholders of the Trust of S$15.5 million
in 9M FY15 were higher than the last financial year as a result of
contributions from the Crystal Trust and KMC acquisitions.
4. 9M FY15 distributable cash flows of S$90.7 million, was S$53.5
million higher than 9M FY14, mainly due to contributions from the
Crystal and KMC acquisitions.
5. Net asset value per unit as at 31 December 2015 increased to 35.3
Singapore cents from 12.3 Singapore cents as at 31 March 2015. This was
primarily attributable to the issue of new units in connection with the
Crystal and KMC acquisitions and mark-to-market gains of derivative
instruments, which were partially reduced by distributions paid.
6. Gearing(2) as at 31 December 2015 was 34% compared to
52% as at 31 March 2015 as a result of the lower gearing of the Crystal
assets and KMC.
Gearing reduced significantly to 39.3% and High portfolio occupancy of 99.3% as at end-2015
Key Financial Highlights •
Income distributed to Unitholders for the fourth quarter of 2015 ("4Q
2015") and full year 2015 (FY 2015) rose 17.8% and 5.4% year-on-year
("y-o-y"), and remained constant on a quarter-on-quarter ("q-o-q") basis •
Higher distributable income was achieved despite the lack of income
from Prudential Tower, as well as the absence of rental support from
Ocean Financial Centre and Marina Bay Financial Centre ("MBFC") Phase
One • Improvement in distributable income was due mainly to higher
property income from all assets in Singapore and Australia, as well as
higher contributions from share of results of associates and share of
results of joint ventures • Distribution per unit ("DPU") of 1.68 cents for 4Q 2015, amounting to a total of 6.80 cents for FY 2015
Key Capital Management Highlights •
Gearing level reduced significantly by approximately 8% to 39.3%,
considerably lower than the Monetary Authority of Singapore's (MAS)
revised gearing limit of 45% • Maintained fixed-rate loans at 70%
which safeguards against interest rate volatility and provides certainty
of interest expenses as well as financial and operational flexibility • Average cost of debt remained stable at 2.5% and interest coverage ratio at a healthy 4.4 times •
Completed almost 100% of refinancing requirements in 2016, and
maintained well-staggered debt maturity profile with weighted average
term to expiry at a healthy 3.7 years • Almost 100% of income from Australia hedged up till the third quarter of 2016 ("3Q 2016")
Key Portfolio Highlights •
Concluded a total of 114 leases, equivalent to approximately 1.6
million sf (attributable space of approximately 800,000 sf) of prime
office space in 2015, bringing overall portfolio occupancy to a high of
99.3% • Of the total new leases signed during the year, half were
from tenants who were new to Keppel REIT's portfolio, one quarter from
tenants new to Singapore and the remaining one quarter were expansions
by existing tenants • Approximately 30% (32 leases) or 480,000 sf
(attributable space of approximately 222,000 sf) of space was committed
in 4Q 2015 • Tenants from the telecommunications, media and
technology ("TMT") sector accounted for half of the new leases signed
during the quarter • Achieved high tenant retention rate of 90% as at
end-2015, and positive rent reversion averaging 13% for all new and
renewed office leases in Singapore • For leases expiring in 2016,
the Manager is already in advanced negotiations with these tenants and
is likely to achieve high retention • For leases expiring in 2017,
the Manager is also proactively engaging these tenants and is likely to
renew most of these leases as the majority of these tenants are in their
first renewal cycle • Approximately 75% of total leases not due for renewal till 2018 and beyond, when limited new office supply is expected •
The Government of Western Australia (WA) commenced its 25-year lease at
the office tower on the Old Treasury Building site in Perth in November
2015 • Announced divestment of interest in 77 King Street in Sydney
for A$160 million or S$160 million, which is approximately 40% and 27%
above the original purchase price and latest valuation respectively
MAKING MONEY: The most
popular piece I've published in 40 years of writing these Letters was
entitled, "Rich Man, Poor Man." I have had dozens of requests to run
this piece again or for permission to reprint it for various business
Making money entails a lot more than
predicting which way the stock or bond markets are heading or trying to
figure which stock or fund will double over the next few years. For the
great majority of investors, making money requires a plan,
self-discipline and desire.
I say, "for the great majority of people"
because if you're a Steven Spielberg or a Bill Gates you don't have to
know about the Dow or the markets or about yields or price/earnings
ratios. You're a phenomenon in your own field, and you're going to make
big money as a by-product of your talent and ability. But this kind of
genius is rare.
For the average investor, you and me,
we're not geniuses so we have to have a financial plan.(CW8888: Ants can continue reading. Grasshoppers can stop here!) In view of this,
I offer below a few items that we must be aware of if we are serious
about making money.
Rule 1: Compounding:
One of the most important lessons for living in the modern world is that
to survive you've got to have money. But to live (survive) happily, you
must have love, health (mental and physical), freedom, intellectual
stimulation -- and money. When I taught my kids about money, the first
thing I taught them was the use of the "money bible." What's the money
bible? Simple, it's a volume of the compounding interest tables.
Compounding is the royal road to riches.
Compounding is the safe road, the sure road, and fortunately, anybody
can do it. To compound successfully you need the following:perseverance
in order to keep you firmly on the savings path. You need intelligence
in order to understand what you are doing and why. And you need a
knowledge of the mathematics tables in order to comprehend the amazing
rewards that will come to you if you faithfully follow the compounding
road. And, of course, you need time, time to allow the power of
compounding to work for you. Remember, compounding only works through
But there are two catches in the
compounding process. The first is obvious -- compounding may involve
sacrifice (you can't spend it and still save it). Second, compounding is
boring -- b-o-r-i-n-g. Or I should say it's boring until (after seven or
eight years) the money starts to pour in. Then, believe me, compounding
becomes very interesting. In fact, it becomes downright fascinating!
In order to emphasize the power of
compounding, I am including this extraordinary study, courtesy of Market
Logic, of Ft. Lauderdale, FL 33306. In this study we assume that
investor (B) opens an IRA at age 19. For seven consecutive periods he
puts $2,000 in his IRA at an average growth rate of 10% (7% interest
plus growth). After seven years this fellow makes NO MORE contributions
-- he's finished.
A second investor (A) makes no
contributions until age 26 (this is the age when investor B was finished
with his contributions). Then A continues faithfully to contribute
$2,000 every year until he's 65 (at the same theoretical 10% rate).
Now study the incredible results. B, who
made his contributions earlier and who made only seven contributions,
ends up with MORE money than A, who made 40 contributions but at a LATER
TIME. The difference in the two is that B had seven more early years of
compounding than A. Those seven early years were worth more than all of
A's 33 additional contributions.
This is a study that I suggest you show
to your kids. It's a study I've lived by, and I can tell you, "It
works." You can work your compounding with muni-bonds, with a good money
market fund, with T-bills or say with five-year T-notes.
Rule 2: DON'T LOSE MONEY:
This may sound naive, but believe me it isn't. If you want to be
wealthy, you must not lose money, or I should say must not lose BIG
money. Absurd rule, silly rule? Maybe, but MOST PEOPLE LOSE MONEY in
disastrous investments, gambling, rotten business deals, greed, poor
Yes, after almost five decades of investing and talking to
investors, I can tell you that most people definitely DO lose money,
lose big time -- in the stock market, in options and futures, in real
estate, in bad loans, in mindless gambling, and in their own business.
RULE 3: RICH MAN, POOR MAN: In
the investment world the wealthy investor has one major advantage over
the little guy, the stock market amateur and the neophyte trader. The
advantage that the wealthy investor enjoys is that HE DOESN'T NEED THE
MARKETS. I can't begin to tell you what a difference that makes, both in
one's mental attitude and in the way one actually handles one's money.
The wealthy investor doesn't need the markets, because he already has all the income he needs. He has money coming in via bonds, T-bills, money market funds, stocks and real estate. In other words, the wealthy investor never feels pressured to "make money" in the market.
The wealthy investor tends to be an expert on values.
When bonds are cheap and bond yields are irresistibly high, he buys
When stocks are on the bargain table and stock yields are
attractive, he buys stocks. When real estate is a great value, he buys
real estate. When great art or fine jewelry or gold is on the "give
away" table, he buys art or diamonds or gold. In other words, the
wealthy investor puts his money where the great values are.
And if no outstanding values are
available, the wealthy investors waits. He can afford to wait. He has
money coming in daily, weekly, monthly. The wealthy investor knows what
he is looking for, and he doesn't mind waiting months or even years for
his next investment (they call that patience).
But what about the little guy? This
fellow always feels pressured to "make money." And in return he's always
pressuring the market to "do something" for him. But sadly, the market
When the little guy isn't buying stocks offering 1% or
2% yields, he's off to Las Vegas or Atlantic City trying to beat the
house at roulette. Or he's spending 20 bucks a week on lottery tickets,
or he's "investing" in some crackpot scheme that his neighbor told him
about (in strictest confidence, of course).
And because the little guy is trying to
force the market to do something for him, he's a guaranteed loser. The
little guy doesn't understand values so he constantly overpays. He
doesn't comprehend the power of compounding, and he doesn't understand
money. He's never heard the adage, "He who understands interest -- earns it. He who doesn't understand interest -- pays it."The little guy is the typical American, and he's deeply in debt.
The little guy is in hock up to his
ears. As a result, he's always sweating -- sweating to make payments on
his house, his refrigerator, his car or his lawn mower. He's impatient,
and he feels perpetually put upon. He tells himself that he has to make
money -- fast. And he dreams of those "big, juicy mega-bucks." In the
end, the little guy wastes his money in the market, or he loses his
money gambling, or he dribbles it away on senseless schemes. In short,
this "money-nerd" spends his life dashing up the financial
But here's the ironic part of it. If,
from the beginning, the little guy had adopted a strict policy of never
spending more than he made, if he had taken his extra savings and
compounded it in intelligent, income-producing securities, then in due
time he'd have money coming in daily, weekly, monthly, just like the
rich man. The little guy would have become a financial winner, instead
of a pathetic loser.
RULE 4: VALUES: The
only time the average investor should stray outside the basic
compounding system is when a given market offers outstanding value. I
judge an investment to be a great value when it offers (a) safety; (b)
an attractive return; and (c) a good chance of appreciating in price. At
all other times, the compounding route is safer and probably a lot more
profitable, at least in the long run.
Without more investment capital coming from their human asset through earned income and more savings; it is extremely tough to fight future inflation with only their financial assets without using assets draw-down strategy. They will need superior investing skills to grow their investment portfolio and investment income over market cycles to be sustainable.
The Road to FI 2.0 from FI 1.0 is so much tougher without the assistance and financial support from his human asset.
What do seasoned retail Investors with adequate level of stocks holding and strong war chest fear the most?
Slowly scroll ...
War Chest: Collect interests
Stocks holding : Collect Dividends So, we either collect interests from our war chest or collect dividends from our stocks holding.
Flat market: Collect dividends from our stocks holding AND collect interests from our war chest.
Falling market: Buy slowly, reduce our war chest, reduce interests but increase dividends. Rising market: Sell slowly, increase our war chest, increase interests but reduce dividends. How fearful can it be?
Disclaimer: Stock trading involves significant risks. Create Wealth trader is not a licensed Investment Adviser and will not be responsible for any losses which you incurred. You are advised to always do your own homework before making any trading decision.