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

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Value Investing
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Tuesday, 27 February 2018

Seductive Yield Trap Or Yield Hog???

We need language Master like SMOL know the difference. Right?

If you look closely from left to right year on year and always wishing for more to come. Seductive yield trap or yield hog?

After 14 years; DBS also becoming sexy yield of 16% from 2018 and sustainable for the next few years.

On the other hand; we have When a Giant Gain Causes Pain (4) . Investing may be simple but never easy to handle emotionally! It will be continuous struggle even in winning game! Why? Many of us are not so mechanical or Automatic. Time for Robo investing? LOL! But; that is outsourcing like buying a Robo floor sweeper to do the job; but Robo can't lift or move away your chairs to sweep it.


  1. CW,

    Trying to "suan" me?

    What to do?

    Some are naturally "gifted" to count with precision to 2 decimal places, while some like me know the difference between teal and turquoise ;)

    相声 works better with a partner so let me chime in for the younger and "whiter" readers:

    Before a stock goes to 10 bagger, it has to pass through the 2 bagger stage.


    Should I sell 1/2 my position when a stock doubles and take back my capital safely and only put my unrealised profits at risk? You know, capital safely under my pillow?

    Or do I let my winner run to be the next 10 bagger?

    Its not just % yield to consider.

    The STARTING position size and the CURRENT position size of our 10 bagger can have a bigger impact on the capital gains and dividends in $ received!

    If you automatically "assumes" 14 years ago dividend yield 3.5% and now 19% meant you get more in money terms, then you don't know HOW to do verification or HOW to ask the right questions...

    What if its 14 years ago 100,000 shares, now only 1000 shares? You do the math ;)

    That's why competent fundamental investors always use cash flows to verify the so called accounting "profits".

    And cash flow is another word for counting in money ;)

    Anyone who has been in a shepherd position would know we never evaluate a KPI in isolation.

    We need to review it with at least 1 or 2 more KPIs to have the proper context and perspective.

    Just like you don't look at dividend yield without looking at dividend payout ratio. And if you more advanced, you would consider dividend growth rate too ;)

    Yield hogs just look at the current dividend yield :(

    1. U can look at all financial data and ratios to see how each is interrelated.
      But can U spot any cooking of the book?

      Blue chip or not.

    2. Anyway, there is always more then one way skinning the cats.
      Mastering one is better then knowing all but mastering none.

    3. temperament,

      I am showing support to CW's statement that "investing may be simple but not easy EMOTIONALLY to handle".

      Theory is easy.

      You try holding to a 10 bagger stock for 14 years as it vacillates between 2 to 10 baggers...

      Taking our capital back when our stock doubles allow us to sleep sounder at night, but there's a price to pay as in "halved" the future capital gains and dividends :(

      But if that 2 bagger turned into a "giant that causes pain", we'll be so glad we not greedy!

      Everyone is different. There's no wrong or right answers.

      Except on hindsight, everyone is genius!


    4. Silent readers are learning here. Many here!

    5. LOL.

      SMOL i see.

      I am the one choosing 2 baggers * 5 cycles lol.

      How many of us can know Apple or Microsoft can grow so many times.

      My HP keep for about from 1985 until now, I think it is only about 3 to 4 baggers in terms of spin offs + HP.

      Actually if take inflation into account, I am not sure.

      Anyway, my maths is limited to calculate accurately.

    6. i saw on TV program, even Bill Gate himself has been surprised by Microsoft success.

    7. 1) CW,

      I'm in a bleeding heart mood today...

      You make a good catalyst!

      Without you, I'll have no opportunity to sharpen my saw ;)

      2) temperament,

      Who knew in Dec 2008 when DBS raised 4 billion in rights issue (ask shareholders for money back), the price will recover to where it is today 9 years later?

      When in 2008, everyone were dumping financial stocks due to the Lehman crisis?

      Temasek on hindsight must be kicking why buy Stanchart or UBS when they could have used the drypowder on our 3 local banks instead!


    8. Ya lol.

      I had 2 lots DBS but I only dared to subscribe for one lot.

      On the other hand i even subscribed for extra rights issue for Capitalmall & Ascenda or Capcomtrust. IIRC.

      He who dares win or die lol.

      He who freezes may not die but sure lose.

      Always nothing is for sure in investing.

  2. Definitely requires quite a bit of company analysis. Sure, there are the handful of "obvious blue chip" long term dividend payers. But how cyclical are they? Will they be whacked more than other stocks in their next down cycle? What & where are their disruptions over next 5 years? Do they have huge monopoly-like competitive advantages, moats?

    And these are just the business aspects, before even going into the financials, and their management/culture. Else may end up having to buy 50 counters & after 1 or 2 bull-bear cycles, distilling into 4 or 5 true "yield of dreams". LOL!

    Too much work for my lazy brain ... so I just do top-down trend following... :P

    Maybe during the next -50% bear, I'll devote 20% of portfolio into a few of those "obvious blue chip dividend payers" and sit on my hands and HOLD ... or izit HODL?? LOL!!

    1. Ha! Ha!

      Think will do the same.
      At least a portion of my portfolio.
      Can't afford not to as maybe have one to the most 3 cycles left to play.

    2. Actually, SPY or SP 500 is better then STI ETF because of more evenly weighted diversified.
      But our currency doesn't depreciated one.

  3. Hi bro cw

    Me also think same same lei :)
    Cos easy for me also as my limited knowledge in reading company financial report... hehehe
    I don't have US stock acc & heard people say US stock will kana heavy US tax... maybe thinking on sti etf or Nikko am etf which both also from sgx.

  4. Yes, a local financial adviser had written an article how Singaporeans lose out to Americans in the long run investing in USA.

    But, but, if U can Keching, Keching $$$ spit out, why not?

    Is there a local Spy 500 ETF?

    If there is, is there any difference by investing in Vanguard Spy 500?

    1. SGX got SPDR S&P500 ETF as well as SPDR DJIA ETF ... about 0.1% annual expense ratio ... but I think not so liquid?

      Actually americans have to pay more investment tax than us --- they got capital gains tax & also have to pay income tax on dividends (which is like 20% for average earners & 30+% for high income).

      As foreigners we don't have to pay capital gains tax (which is a huge advantage) ... only the dividend withholding tax --- either 15% or 30%. Since Singapore doesn't have tax treaty with US, hence we kena charged 30% .... IF we buy from S'pore or buy directly on US brokerages.

      IF we buy US-oriented ETFs / US company secondary listings in tax-treaty jurisdictions (e.g. London, HK), then it's 15% dividend withholding tax.

      BUT .... for me, I focus on growth equity US ETFs which have low dividends anyway. Plus various US brokerages have zero-commission trades for various brands of ETFs, allowing me to employ cost-efficient trend following. So giving Uncle Sam 30% of lowish dividends is OK lah, quid pro quo, haha!

      The other thing to watch out for is the long-term decline of USD ... So you want to make sure that many of the underlying companies in the ETFs do international business ... whereby they are earning revenues in non-USD which may retain stronger purchasing power.

    2. Thanks Spur.

      For me it's a bit too much info liu.

      Though it's really good info for who people looking for the "lobang".

      Especially - "IF we buy US-oriented ETFs / US company secondary listings in tax-treaty jurisdictions (e.g. London, HK), then it's 15% dividend withholding tax".

    3. Incidentally, is US individual stocks bought from tax-treaty jurisdictions (London or HK) included?
      Or only ETFs?

    4. Both US individual stocks & ETFs .... although practically speaking, more useful for ETFs as there are very few individual US stocks listed overseas (a handful in London & Frankfurt).

      Oh I think HK now only 10% WHT (I presume it's under "China" LOL).

      Both London & HK have a bunch of Vanguard ETFs as well as from iShares and SPDR.


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