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.
Posts
CW,
ReplyDeleteTrying 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.
How?
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 :(
temperament,
DeleteI 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!
LOL!
Silent readers are learning here. Many here!
Delete1) CW,
DeleteI'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!
LOL!
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?
ReplyDeleteAnd 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!!
Next Bear, I will try STI ETF. ha ha
DeleteHi bro cw
ReplyDeleteMe 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.
SGX got SPDR S&P500 ETF as well as SPDR DJIA ETF ... about 0.1% annual expense ratio ... but I think not so liquid?
ReplyDeleteActually 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.
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).
ReplyDeleteOh I think HK now only 10% WHT (I presume it's under "China" LOL).
http://taxsummaries.pwc.com/ID/United-States-Corporate-Withholding-taxes
Both London & HK have a bunch of Vanguard ETFs as well as from iShares and SPDR.