I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!


Click to email CW8888 or Email ID : jacobng1@gmail.com



Welcome to Ministry of Wealth!

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

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Sunday, 9 October 2011

Invest in stocks listed in overseas stock exchanges is investing globally?

Just For Thinking ....

Read? Investing Made Simple by Uncle8888 (10)

Read? Major STI market cycles - Horrible Bears and Beautiful Bulls!

Why do we as local investors in Singapore have developed such thinking that if we don't buy some stocks that are listed in some overseas stock exchanges we are not investing globally.

Are there any strong reasons to justify our local big blue chips listed in  SGX e.g. Keppel Corp, Semb Corp, ST Eng, SingTel, DBS, etc have not diversified their businesses across globally or regionally enough to qualify as MNC in those countries where they have set up their global or regional presence to do businesses there.

Frankly speaking, I know a few fellow investors who have bought some stocks listed in some overseas stock exchanges. Are they currently doing better than me in term of real monetary gains after currency conversion and tax? I don't think so. Their absolute real returns with these global stocks will speak for themselves. So is Overseas moon still rounder, is it?

Saturday, 8 October 2011

Insights into successful investing

A look at empirical studies done by academics can help enhance an investor's performance



By TEH HOOI LING
SENIOR CORRESPONDENT

LAST week, Singapore Management University's (SMU) Sim Kee Boon Institute of Financial Economics organised a half-day seminar on 'The Opportunities and Challenges Facing the Asset Management Industry in Asia'.

One of the presentations was by Melvyn Teo, associate dean (research) of Lee Kong Chian School of Business at SMU. His topic was 'Insights for Investors from Empirical Research'.

I went through his presentation materials and found them interesting, and thought I'd share them with readers here.

Prof Teo highlighted four insights gleaned from empirical studies done by academics which could help enhance an investor's performance.

First is investor pyschology. There is a big field of study called behavioural finance which tries to shed light on the numerous human biases and irrationalities when it comes to investing, particularly in stocks and shares.

Overconfidence

Prof Teo picked one: overconfidence. Overconfidence leads to overtrading, and overtrading results in higher transaction costs. High transaction costs in turn eat into returns.

(Createwealth8888: Overconfidence is not limited to overtading. In investing, overconfidence can lead to investors building up very large position in a single stock e.g. more than 40 or 50% of their capital. They are so confident that their single stock will not turn out to be a mini or micro Black Swan in their portfolio)
A study by Barber and Odean, published in 2000, divided a cluster of investors into five groups, ranking them from those who traded the least to the most. The gross returns of all the five groups were quite similar. However, when it comes to net return, there is a clear relationship between the frequency of trading and net return. The higher the monthly trading volume or turnover, the lower the net return.

The average investor's net return, after accounting for transaction costs, is worse than simply putting money in the S&P 500 Index fund.

My take is that the study was published in the year 2000, probably based on data before 2000. Since then, the world has changed rather drastically. For one thing, stock markets have become a lot more volatile. Increasingly, there are more believers that investors have to actively manage their portfolios, ie trade, in order to preserve their wealth, and also to capitalise on the opportunities to buy assets on the cheap. Getting the timing right, of course, is the proverbial holy grail in investing.

While both men and women share the overconfidence trait, men are more overconfident in their ability to make financial decisions. As such, they tend to trade more. Barber and Odean, in a paper published in 2001, said that men traded 45 per cent more than women, and the trading reduced their net returns by 2.65 per cent a year as opposed to 1.72 per cent for women.

The difference between single men and women is even more pronounced. Single men traded 67 per cent more than single women, thereby reducing their returns by 1.44 per cent per year more than single women.

The second insight presented by Prof Teo related to market inefficiencies. The theory is that the market is efficient, and that the stock price should incorporate all the information that is publicly available about that particular security. 'However, investors suffer from limited attention. They are apt to purchase attention-grabbing stocks that have extreme returns, high volume and significant events,' said Prof Teo, quoting Barber and Odean.

One market inefficiency noted by Prof Teo is the customer/supplier links between firms. Sometimes, the market does not react immediately to the bad news announced by a stock's major supplier, or perhaps even its major customer. 'Investors may ignore these economic links in the short term, resulting in a lagged response of supplier prices to customer prices, and hence predictability,' said Prof Teo.

And when it comes to picking hedge funds, Prof Teo's own study has found that the closer a manager is to his or her investment region, the higher the outperformance.

Meanwhile, his analysis of Japan-focused hedge funds showed that hedge funds managed by native Japanese speakers outperformed those managed by non-native speakers by more than four percentage points a year. And among the non-native speakers, those who are closer to the market outperformed those further away by 2.5 percentage points a year.

Hedge fund managers' incentive structures also matter. According to Prof Teo, portfolios of hedge funds with performance fees and high water mark significantly outperform those with no high water mark and low performance fees.

In another study, Chevalier and Ellison tried to find out if certain types of managers generate better returns. They looked at 2,029 fund-years for growth, and income mutual funds between 1988 and 1994. They found that a manager who graduated from one of the best schools would be expected to achieve an annual return which was more than one percentage point per year higher than that of a manager who attended a school of median quality. Older managers performed worse than younger ones, while managers with MBAs earned about 60 basis points per year more than managers who did not.

Glamour stocks

Further analysis found that young and high-SAT test score managers tended to work for funds which charged lower expense ratios, that high-SAT managers and managers with MBAs tended to hold higher beta portfolios, that MBAs held more 'glamour' stocks, and that younger managers were more likely to be replaced after a bad year.

However, the superior performance of MBAs was fully accounted for when one adjusted for differences in the riskiness of the individual stock holdings. Meanwhile, a large portion of the superior performance of younger managers was attributable to their working for funds which charged lower expenses and to survivorship biases in that the poor performing managers were replaced by their firms, leaving only the better ones in the study sample.

The researchers however did find that there remained substantial performance differences between funds managed by managers from high-SAT schools and funds managed by managers from low-SAT schools which were not explained by observable differences in behaviour or by survivorship biases.

Indeed, a separate study done by Grinblatt, Keloharju and Linnainmaa based on data from Finland showed that Finns with higher IQs tended to have a greater participation rate in the stock market; and the higher the IQ, the better their performance.

Prof Teo's conclusions to the audience are:

Beware of behavioural biases such as overconfidence and their effects on your tendency to over trade;

Take advantage of mistakes that others make in the market;

Invest in securities that you possess an informational advantage in; and

Make sure that your manager is smart and well-incentivised to invest on your behalf so as to minimise agency problems.

Investing Made Simple by Uncle8888 (28)

Read? Investing Made Simple by Uncle8888 (27)

Twin Fears of not-so-rich retirees

Not-so-rich retirees may have twin fears:

  1. Inflation
  2. Bear market
Inflation

Inflation will eat away purchasing power and that will hurt not-so-rich retirees who are more likely to depend on their investment income coming from their accumulated wealth before retirement.

Bear market

Bear market will reduce the wealth level of not-so-rich retirees. It can also be wealth destructive if not-so-rich retirees have to liquidate part of their investment for cash flow during market low. Once this negative return in their investment portfolio is locked in during market low; it will become much harder for their portfolio to recover anywhere near its last peak.

Avoid liquidating any investment during bear market

Facing with one crisis after another, not-so-rich retirees must prepare for the worst bear market and build a resilient portfolio to survive in bear markets and avoid liquidating any investment for cash flow through good asset planning for cash flow.

Investment Income

Some common assets for not-so-rich retirees to receive investment income:

  1. Fixed Income from bonds (capital protection)
  2. Dividend income from stocks (capital at risks)
  3. Rental from properties (investors believe properties are safer than stocks so the risk is lower)
Uncle8888's Investment and Cash flow model

















Uncle8888 is preparing for the worst and avoid liquidating any investment during market low by ensuring that his fixed income and top up from dividend income will be more than enough to meet his basic living expenses during the bear market. In bad times, he will just need to tighten his belt and in good times he will enjoy upgraded life style without worrying too much about his investment and cash flow during bear market.

He will reuse his existing strategy of spending his year-end bonus for his retirement income. Read? Spending year-end bonus and that means he will be spending his last year EARNED income in the current year. In this way he will have absolute control to decide whether to spend freely his EARNED income or retain part of it during bad time to ease the pain for the following year when the economy is not looking good.

How? Will this model work for you if you are retiring soon?

Friday, 7 October 2011

Drillers are getting more cautious!

Drilling behemoth Ensco has hatched an option for a rig newbuilding at Keppel Fels but has let a further optional contract go.


Createwealth8888: Similarly like AOD. More worry of future financing in 2012 /2013???

AOD has an option for construction of one more jack-up rig at Keppel FELS Limited that matures on 30 September 2011. The Board of AOD has resolved to not exercise this option.

Keppel to build third Super A Class jackup for Ensco at US$245 million

Singapore, 7 October 2011 - Keppel FELS Limited (Keppel FELS) has secured a contract to build an enhanced KFELS Super A Class harsh environment jackup rig from Ensco plc (NYSE: ESV) for US$245 million. The rig is scheduled for delivery in 3Q 2014.


This contract arose from the exercise of an option which was part of Ensco’s order of two KFELS Super A Class rigs on 10 February 2011.

Mr. Dan Rabun, Chairman and CEO of Ensco plc, said, “Ensco’s new series of jackup rigs are enhanced versions of the KFELS Super A Class design that will provide increased levels of efficiency for customers. By building these new Super A Class jackups, we will continue Ensco’s tradition of delivering leading customer service with one of the largest and youngest premium jackup fleets in the world.

“Standardisation across our 11 KFELS design rigs improves reliability for customers as we benefit from more efficient construction, training, daily operations, inventory management, and repairs and maintenance.”

Thursday, 6 October 2011

Pillow Stocks Strategy (2)

Read? Pillow Stocks Strategy

What will make an investor feel most comfortable with his investment?

  • Firstly, Return of Capital.
  • Secondly, Good Yield.
  • Lastly, Capital appreciation.
That is the reason why many investors will jump into bonds or perference shares when yield are good and when they become available in the market.

Dividend Investing Strategy

A 10% dividend yield stock will return you your capital in 10 years; and thereafter let you enjoy good yield and capital appreciation

Pillow Stock Strategy

If you believe that dividend investing strategy will work for you; but you may feel that 10 years is just too long to wait. Then think Pillow Stock Strategy. It will help you to:

  • Firstly, Return of Capital.
  • Secondly, Good Yield.
  • Lastly, Capital appreciation.
"Pillow stocks are the best stocks to hold over market cycles." - Createwealth8888


Steve Jobs: Build Your Dreams!

The specch from Stanford Graduate Commencement address delivered by Steve Jobs on June 12, 2005. Some key quotes:


"If you live each day as if it was your last, someday you'll most certainly be right."

"Death is the destination we all share, no one has ever escaped it. And that is as it should be because death is very likely the single best invention of life."

"Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart."

"The only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it."

* Steve Jobs co-founded Apple with Steve Wozniak in 1976, and a year later launched the Apple II - the first desktop computer to have a built-in keyboard, built-in sound and that could produce color graphics when hooked to a color television.

Wednesday, 5 October 2011

IMF warns global recession in 2012 'can't be ruled out'

BRUSSELS - IMF Europe director Antonio Borges warned on Wednesday that a global recession in 2012 'can't be ruled out', citing a possibility that 'activity will turn downwards'.

The IMF released its economic outlook for Europe in Brussels, at a time when the eurozone sovereign debt crisis is mutating into a new banking crisis, and 'therefore we recommend changing economic policy' away from austerity and back towards stimulus, the 100-page report said.

Mr Borges said there had been a major change in market sentiments in recent months, and 'many investors all over the world became far more risk averse than before'.

He added: 'We still predict growth in 2012, but very modest', with the probability the economy will 'stall' by year-end making recession a live threat, especially in Europe.

Changes in fiscal policy would be required, he said.

'If ever there was a more significant recession in Europe - I hope that is not the case but we cannot exclude it - then we might have changed recommendations.

'All those countries with fiscal leeway might want to consider that,' he said, though he specifically ruled out Italy and Spain. -- AFP

Stocks that helped me to recover my losses in 2008/09

The following are stocks that I used to help me to recover my losses in 2008/09:

  1. Noble
  2. Olam
  3. Kep Corp
  4. Semb Corp
  5. Semb Marine
  6. Hyflux
  7. Biosensors
  8. CPL
Noble and Olam were new members added into portfolio from 2009 to fight the old Bear.

So in 2011/12, I may have to add new members to fight this new Bear.  Which ones???

Tuesday, 4 October 2011

Sembcorp bags Modec FPSO deal

Sembcorp Marine has scooped a deal worth almost $100 million from Modec for the supply of a floating storage, production & offloading vessel for Brazil’s OSX.

Hey! Are you good at stocks? (3)

Just For Laugh ....

Read? Hey! Are you good at stocks? (2)


It was only from 2000 that I began seriously doing full time study in the University of Stock Market learning, recording, tracking and measuring my Grade in this field.

I got my MSM (Masters in Stock Market) in 2010

Soon, I may be studying for Ph.DSM (Ph.D in Stock Market) and hope to pass with flying color in 2013/2014 if the course becomes available.





Noble: spin-off and primary listing of its agriculture business

Noble Group Limited (“Company”) wishes to announce that an application has been filed in relation to a possible spin-off and primary listing of its agriculture business on the Main Board of the Singapore Exchange Securities Trading Limited.

The Company wishes to highlight that no final decision has been made on the possible listing proceeding, which will be subject to the market conditions, amongst other factors, prevailing at the relevant time. In addition, any listing will be subject to various regulatory and other approvals.

The Company will keep shareholders updated on material developments as and when appropriate. In the meantime, shareholders and other investors are advised to exercise caution when dealing or trading in the shares of the Company. Shareholders and other investors should consult their stockbrokers, bank managers, solicitors, accountants or other professional advisers if they have any doubt about the actions they should take

DBS cuts rates for Sing dollar deposits

SINGAPORE - DBS Group, South-east Asia's largest lender, said it would cut interest rates for Singapore dollar deposit accounts from Oct 14, affecting a range of deposit accounts.

For instance, DBS has cut the interest rate for the first S$10,000 deposited in its 'DBS Autosave (Personal)' account to 0.05 per cent from 0.10 per cent previously.

'Increasing risk aversion have led people to keep money in the bank rather than putting it to work, like investing in stock markets or buying properties,' said Song Seng Wun, an economist at CIMB Research.

'For the banks, on the flip side, lending activity has also started to ease off as banks become more careful of who to lend to.' -- REUTERS

MSCI World Equity Index Hits Lowest Since July 2010

By: Reuters
World stocks hit a fresh 15-month low on Tuesday while the dollar neared a nine-month peak on growing doubts over Greece's ability to avert a default that would spark a major banking crisis in Europe and accelerate a global economic slowdown.

In a meeting in Luxembourg, euro zone finance ministers said they were reviewing the size of the private sector's involvement in a second bailout package for Greece, a move that threatens to hasten a default.

Ministers also agreed that Greece could wait until mid-November for the next loan instalment from the existing emergency aid programme, putting further pressure on Athens to get to grips with its debt problems. Greece admitted on Sunday it would miss its deficit targets.

While many in the market expect Greece to default at some point, the impact on an already fragile banking sector is still not fully priced in. Franco-Belgian bank Dexia [DEXB-BE 0.988 -0.312 (-24%) ] fell as much as 31 percent on Tuesday on top of its 10 percent fall on Monday, as worries about its heavy exposure to Greece grew.

"What you're now beginning to see is they (investors) are now picking out the banks. Dexia is the weakest," said Justin Urquhart Stewart, director at Seven Investment Management.

"Politicians have to stand behind these banks — whether you call it state support, nationalisation, you have to keep the financial system working otherwise we will end up with another credit crisis."

The MSCI world equity index fell 1 percent, hitting its lowest since July 2010. The index has fallen more than 18 percent since January and more than 24 percent since hitting a three-year high in March.

Dexia vowed to fix its balance sheet after Moody's placed the group on a review for a possible downgrade, warning about its liquidity. According to a Belgian newspaper report on Tuesday, Dexia could be split up and its 'good' assets sold by the end of 2011.

Monday, 3 October 2011

Biosensors Completes JWMS Acquisition

Shandong Weigao becomes a Key Shareholder


3 October 2011, Singapore ‐ Biosensors International Group, Ltd. (“Biosensors”) and Shandong Weigao Group Medical Polymer Company Limited (“Shandong Weigao”) today announced the restructuring of the shareholding in JW Medical Systems Ltd (“JWMS”) whereby Biosensors acquired the remaining 50% equity interest in JWMS from Shandong Weigao. Biosensors now owns 100% of JWMS and welcomes Shandong Weigao as one of its key shareholders, with two representatives on its board of directors.

Under the agreement, Shandong Weigao has received from Biosensors: (i) cash payment of S$160 million (approximately equivalent to US$122 million based on exchange rate of US$1:S$1.3080), (ii) 260 million new ordinary shares, and (iii) US$120 million aggregate principal amount of 4.0% convertible notes due 2014.

Mr. Yoh-Chie Lu, Chairman of Biosensors said, “We are pleased to have obtained approvals for this deal from the relevant authorities and our shareholders. With JWMS now a fully-owned subsidiary of Biosensors, we are well-positioned to increase our presence in China’s fast-growing drug-eluting stent market. We look forward to working more closely with Shandong Weigao. Together, we will continue to build Biosensors into a world class medical device company.”

“Biosensors has become a leading developer of drug-eluting stents. We intend to actively contribute towards its future growth potential,” said Mr. Chen Xue Li, Chairman of Shandong Weigao. “We are committed to working closely with the management and board of Biosensors to further enhance and unlock the value of the company for its shareholders.”

Biosensors will consolidate JWMS’ operations into its own financial results beginning the second half of its financial year 2012.

Buy Gold/Silver as insurance or hedge against inflation? (3)

Read? Buy Gold/Silver as insurance or hedge against inflation? (2)

In the past 10 years, gold has risen from US$300 an ounce to its current US$1,621. This is an amazing rise of 440% over 10 years and it has made Gold looked so precious.

But, can good growth-dividend stock be as precious as Gold?

May be I was so lucky to pick up Kep Corp and hold it tight so I was in a better position to compare and say it.

Even though Kep Corp has been dropping a lot for the past few weeks; but at today closing @ $7.47, it is still an amazing rise of 417% since Sep 2001 when I bought it and on top of that amazing rise in its stock price, I have also received total stock dividends worth 247% of the capital cost of this stock.

Can good growth-dividend stock be as precious as Gold?

What do you think now?

Bisonsesors


Such a long black candle today.
Will more bears come and short it?


Keppel FELS wins order for Safin’s first KFELS B Class jackup rig worth US$199 million

Keppel FELS Limited (Keppel FELS) has secured a contract for its high-specification KFELS B Class rig from Safin Gulf FZCO (Safin) worth US$199 million.


Scheduled to be delivered to Safin in 3Q 2012, the rig will be a refurbishment and upgrade of a KFELS B Class jack-up rig that Keppel FELS purchased earlier this year.

The high-specification KFELS B Class rig will be installed with offline stand building features. It will also have a full 15,000 psi BOP system, 70-feet cantilever outreach, with upgraded mud pit storage capacity of 4,000 bbls and be able to accommodate up to 150 personnel.

Mr Raimonds Namikis, Executive Vice President of Safin said, "The high-specification KFELS B Class is a proven design and with the tight jack-up market, we are delighted to be able to receive it much earlier than if we were to place a new order. In working with Keppel, we are assured of the effectiveness of their proprietary designs and the reliability of their project management. This will enable Safin to meet the needs of our customers and kick start the programme of our premium rig fleet."

Mr Wong Kok Seng, Managing Director of Keppel FELS said, "With the refurbishment and upgrade of this jackup, we are able to provide a high-specification rig on a fast-tracked schedule. Such jack ups are in high demand, especially for those scheduled for delivery in 2012.

"We are pleased to embark on a new partnership with Safin and look forward to supporting them as they expand their offshore fleet and presence in the Middle East. Our keen understanding of our customers' businesses enables us to anticipate their needs and tailor the appropriate products and services for them. "

The above contract is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.

Sunday, 2 October 2011

Biosensors Weekly

The best interest rate in Singapore for senior citizens!

Read? The best Bond fund in Singapore for senior citizens!

Reaching 55. Congratulations! You are now senior citizen in Singapore.

You have special privilege. The National Bank of Singapore upon you reaching 55 will automatically setup a special saving account for you and let you enjoy the best interest rate at 2.5% in Singapore. You are entitled to one withdrawal per year for any amount at any time between your two birthday. I am pretty sure that your younger colleagues, friends and relative will be jealous of your super interest rate in the current market condition.


CPF Investment Account

Do you have some long-term stocks in your CPF investment account receiving good dividends?

If yes, don't close your CPF investment account to transfer them to CDP as cash stocks.

You can do something wonderful with those stocks in your CPF investment account.





Emergency Fund

Do you maintain several bank Fixed Deposits at low interest rate of 1.X% as Emergency fund?

If yes, now you have special privilege to transfer your fixed deposits from your banks to the National Bank of Singapore to earn much higher interest rate at 2.5% for senior citizens.

This is how you do it?

Keep most of your Emergency fund at the National Bank of Singapore to earn higher interest rate at 2.5%; but do maintain some spare money at low interest rate as liquidity fund at any bank in Singapore for immediate cash withdrawal. This is a small price to pay for liquidity and worth it.

 

I am senior citizen and
 a privilege banking customer of
National Bank of Singapore.


Saturday, 1 October 2011

Global Stock Markets Suffer Worst Quarter Since 2008

BLOOMBERG

Daniel Tilles and Shiyin Chen, On Friday September 30, 2011, 2:16 pm EDT


Stocks fell, dragging the MSCI All- Country World Index to its biggest quarterly loss since 2008, while the U.S. dollar strengthened as declines in Chinese manufacturing and German retail sales signaled global growth is slowing. Treasuries rose, and oil declined.

The MSCI All-Country World Index slid 1.6 percent at 2:13 p.m. New York time, extending its decline since June 30 to 17 percent. The Standard & Poor’s 500 Index slumped 1.3 percent. The Stoxx Europe 600 Index fell 1.2 percent. The dollar gained against 15 of 16 major peers, including a 1 percent advance versus the euro. Treasury 10-year notes snapped a five-day drop, extending their biggest quarterly advance since the depths of the financial crisis in 2008. Oil fell 1.6 percent.

Investing Made Simple by Uncle8888 (27)

Read? Investing Made Simple by Uncle8888 (26)







Setting Goals ~ Aristotle



First, have a definite, clear practical ideal; a goal, an objective.
Second, have the necessary means to achieve your ends; wisdom, money, materials, and methods.
Third, adjust all your means to that end!


Investing Goals for most young retail investors


Are you at or near the starting point in your investing journey as Uncle8888 who was 30 years ago and who was also keen to get married and setting up home for his family with kids.

That above graphic is no ordinary graphic for you look at and forget. It is graphic of wisdom in investing for most of us i.e. getting married and setting up family with kids. It has guided Uncle8888 well in his investing journey so it may also guide you in your own investing journey.

First Goal - Your First Home???

When it comes to debating on pros and cons of paying up housing loan (your first home for living) as soon as possible, it will be endless. It is like cat and dog debating on swimming and although some cats can swim.

Read these quotes:

"debt-free and that, to me, is richness enough" - Tabitha Wang

"A man is not a man; until there is a house that he may call his castle. A woman is not a woman; until she has a place she may call her home. And neither a man nor a woman can say anything about their house, until they are the masters of it, and own it outright and unencumbered." - Albert Yang.

Read more? Paying up your housing loan

It is best for you and yourself to seek your own wisdom to determine is your first home is truly your first goal.

Second Goal - Your Kids University Fund

Although your kids can borrow from banks; but as investors we should be able to meet this second investing goal; otherwise can we still consider ourselves as savvy and successful investors?

Final Goal - Retirement Income

We will need to build a robust portfolio for retirement that can fight against inflation and provide a sustainable and minimum retirement income stream during bear markets that will happen in between every few years. We want to avoid liquidating our investment during market low and locking in negative returns and making portfolio recovery harder at the next bull market.

How to build such portfolio for retirement needs?

May be ideas for future posts?

The best Bond fund in Singapore for senior citizens!

Read? The next 10 years (2012 - 2021) Investing Goals


Reaching 55. Congratulations! You are now senior citizen in Singapore.

You have the best Bond fund in Singapore for senior citizens of age 55 and above in the current bonds market condition. It pays yearly coupon rate of 2.5% per annum for CPF OA (aka Bond1) and 4% per annum for CPF SA (aka Bond2). These are the best coupon rate that you ever find in Singapore bond funds under current market condition. Unlike other bonds, these CPF Bonds do not have the typical re-investment coupon yield risk. It is automatically compounded at 2.5% and 4% respectively for Bond 1 and Bond2 if you don't wish to en cash the coupon payouts. Best of all, no maturity date and any time any target. But, only senior citizens of age 55 and above have this privilege.



Read? Work Less and Gone Fishing Planning Room (7)

The next 10 years (2012 - 2021) Investing Goals










Setting Goals ~ Aristotle

  • First, have a definite, clear practical ideal; a goal, an objective.
  • Second, have the necessary means to achieve your ends; wisdom, money, materials, and methods.
  • Third, adjust all your means to that end!

Past Investing Goals (2003-2011)

In this long investing journey, I have successfully completed the Growth path; and by conventional wisdom of investing during retirement phase I should be taking the Income path for the next 10 years investing goals.

Next 10 years (2012 - 2021) investing goals




The current Investing/Trading strategy that takes me along this investing journey from 2003 - 2011 is as below:

But, I realize that there is some weakness in current investing/trading in meeting yearly investing goal. The short-term trading performance will tend to have significant impact on the investing goal. It can either lead to under or over-performing the yearly investing goal and also depends too much on trading profit and losses.

Reserve Capital from CPF OA

Now that I have unlocked the reserve capital from CPF OA for investing. I will have to think of new investing/trading strategy for the next 10 years investing goals and conventional wisdom is to take the Income path.

Strategy A - Change to Income investing and do some fun trading

Dumping most of the reserve capital into fixed capital and also re-diverting most of the current re-cycling capital into fixed capital to stay invested in the stock market for dividends; but retains some re-cycling capital for fun trading. 

This is passive income investing approach. Frankly speaking, I feel that there is nothing to shout about this strategy as there is no shortage of good dividend yielding stocks to pick. Dividend investing will require intensive fixed capital to stay invested in the stock market to receive those dividends so account size really matters. It is relatively easier for investors who have large capital to execute it well to meet their investing goals.

I will just need to pump in enough fixed capital to roughly receive the anticipated amount of dividends to meet the investing goal. If the anticipated dividends fall short, I will then pump in the rest of the reserve capital into fixed capital to make it works.

Strategy B - Change to Income investing, fun trading and fighting the next Bear







It is quite similar to Strategy A, but this one will require lots of patience to see cash rotting in the bank while waiting for the next Bear to come. But, will he come?

In Strategy B, it may limit my capability of pumping in more reserve capital into fixed capital to get enough dividends so there will be risk of not meeting the yearly investing goal.

Strategy C - Continue with current strategy with added capital






Allocating the reserve capital into fixed and re-cycling capital will greatly improve the chance of meeting yearly investing goal and even high chance of over-performing it.

Strategy D - Continue with current strategy but aiming to build more wealth in the next Bear 
  
Pumping in part of reserve capital into fixed capital to raise the level of passive income will improve the chance of meeting the yearly investing goal while waiting for the next Bear to strike to grow wealth.

Conclusion

A, B, C or D?

I still have few more months to think over it. Anyone? A,B,C, D?


Friday, 30 September 2011

Financial Independence Target by Sep 2011: FAILED, F9!


Off target by 16%!!!!


Poor Q3 2011 Performance Report: Down -8.4% from Q3 2010

Read? H1 FY 2011 Performance Report : Down -4.8% from H1 2010

Year Goal Hit Rate

(In 2003, I set some bullish progressive year goals from 2003 to 2011; and 2011 Year Goal is 76.8% of 2010 Total Salary including all CPF contributions. Quite a big goal to achieve!)

Year Goal Hit Rate for 2011 fell by -8.4% from 48.1% in Q3 2010 to 39.7% in Q3 2011
Terribly bad performance!








Active Investing Performance

Since Nov 08 after I have given up active contra trading and revised my active investing/trading strategies.

Performance indicators are as follows:














Today, XIRR hit a new low at 11.6% at market closing price over 2.9 years since Nov 2008

How bad will the portfolio plunge further?

My guess could be around this level:

Morning is world's happy time

Createwealth8888: Why it is very important to get out of Rat Race as early as possible and don't work on weekends.

WASHINGTON: People around the world are happiest in the morning, according to a US study on Thursday that analyzed hundreds of millions of messages on the microblogging site Twitter.


Cornell University sociologists used language software to detect the presence of positive words in 509 million tweets from 2.4 million users in 84 different countries over a two-year period.

Mood peaks were detected early in the day but began to dip mid-morning, about the time most people are starting their workdays.

Another positive peak was witnessed around midnight, followed by a "sharp drop in NA (negative affect, including distress, fear, anger, guilt, and disgust) during the overnight hours," said the study in the journal Science.

The highest numbers of good mood words indicating enthusiasm, delight, activeness, and alertness were found on Saturdays and Sundays, "which points to possible effects of work-related stress, less sleep, and earlier wake time."

Samples from predominantly Muslim countries where the weekends are on different days, such as the United Arab Emirates, showed the same patterns on Fridays and Saturdays as seen in other countries on Saturdays and Sundays.

English was the only language analyzed, though users came from across the globe.

However, modern technology's answer to every emotion -- the smiley or sad face emoticon -- was of little help in the analysis, because "usage was too sparse to be able to detect a consistent pattern," said the study.

- AFP/ck

Thursday, 29 September 2011

SWIBER’S ORDER BOOK SURGES PAST ONE BILLION USD, A RECORD IN CORPORATE HISTORY

- Order book boosted by US$69.0 million in contract wins


Singapore – September 29, 2011 – Swiber Holdings Limited (“Swiber” or together with its subsidiaries, the “Group”), a world class integrated construction and support services provider to the offshore industry, announced that it has secured a slew of contract wins amounting to approximately US$69.0 million including extension options, bringing its order book beyond US$1 billion, the highest by far in its corporate history.

The contracts, awarded by leading offshore construction companies and oil majors, involve a whole spectrum of work from pipeline transportation and installation, subsea installation and chartering of marine vessel. Work for these projects are slated to commence immediately. The pipeline and subsea projects are targeted to be completed within this year and the marine vessel will be chartered for the duration of three years with an option to extend for two more years, consistent with Swiber’s strategy of securing long term contracts.

Keppel Shipyard secures conversion projects worth S$142 million

29 September 2011, Singapore – Keppel Shipyard Ltd (Keppel Shipyard) has secured three conversion contracts worth a total of S$142 million. These conversion contracts are to convert a Liquefied Natural Gas (LNG) Carrier to a Floating Storage Unit (FSU), a VLCC tanker to a Floating Storage and Offloading (FSO) unit as well as a tanker to a Floating Production Storage and Offloading (FPSO) unit.


Mr Nelson Yeo, Managing Director of Keppel Shipyard, said, "We are glad to have the trust and confidence of the global industry for a range of conversion projects. Working closely with our customers, we will continue to enhance and extend our capabilities, and ensure safe and high quality deliveries.”

The first contract is for the fast-track conversion of the LNG carrier Tenaga Empat into a FSU for Malaysian customer MISC Berhad. When completed in 2Q 2012, the FSU will have a storage capacity of 130,000m3 and operate in the newly-developed Melaka LNG Import Terminal.

The second contract is from Dixstone Holdings Ltd which is an association between Perenco Group (Perenco) and Cameroon National Hydrocarbons Corporation (SNH) for the modification and upgrading of the FSO Massongo. Work is expected to commence at the end of this year. The scope of work includes refurbishment and life extension works; fabrication and installation of the cargo offloading balcony and helideck; installation and integration of a 14-point spread mooring system and the upgrading of the accommodation facilities. The available storage capacity of the vessel will be 2.5 million barrels of oil, with four wing ballasts tanks to be converted into cargo tanks. When completed in 3Q 2012, FSO Massongo will replace both FSO Kingsway (Rio Del Rey Basin) and FSO Moudi at Moudi field located 20 miles apart.

This is the third FSO conversion which Keppel Shipyard had undertaken for Perenco, with the previous two projects FSO Kalamu and FSO Fernan Vaz having been successfully executed.

Keppel Shipyard’s third contract is for the conversion of the tanker Umbe into a FPSO unit for Bumi Armada Berhad (Bumi Armada). Keppel Shipyard has been entrusted with all of Bumi Armada’s conversion projects to date; this latest FPSO contract is the seventh collaboration on major projects between the two companies.

Slated for completion in 4Q 2012, the FPSO will have a production capacity of 50,000 barrels of oil per day (bopd), and a storage capacity of 580,000 barrels of oil.

Sabana Reit to buy 21 Joo Koon Crescent for about $20.3m

By KALPANA RASHIWALA


Sabana Shari'ah Compliant Industrial Real Estate Investment Trust is proposing to buy 21 Joo Koon Crescent, a three-storey factory building with ancillary office, for $20.274 million from AVA Global.

Under the sale and leaseback deal, the seller will upon completion of the sale, take a master lease of the entire premises for a four-year term on a triple net basis. Sabana Reit's manager intends to fund the acquisition by debt.

This acquisition, along with the proposed acquisitions of 39 Ubi Road 1, 3A Joo Koon Circle and 2 Toh Tuck Link, announced earlier will see the Reit's aggregate leverage (gross borrowings divided by total deposited property value) rise to 35 per cent from 25.1 per cent at June 30, 2011.

21 Joo Koon Crescent is a JTC leasehold estate of 30+30 years tenure starting from Feb 16, 1994, with a remaining tenure of about 43 years. The proposed transaction is subject to approval from JTC, among other conditions.

Wednesday, 28 September 2011

VSIP SIGNS AGREEMENT TO EXPLORE FIFTH INTEGRATED TOWNSHIP AND INDUSTRIAL PARK

- Located in central Vietnam’s Quang Ngai Province


- Witnessed by the President of Vietnam and Singapore Prime Minister

SINGAPORE, SEPTEMBER 28, 2011 – The Vietnam Singapore Industrial Park Joint Venture Co (VSIP JV) today signed a memorandum of understanding (MOU) with the People’s Committee of Quang Ngai Province to conduct the comprehensive feasibility study of a 1,020-hectare integrated township and industrial park in central Vietnam’s Quang Ngai province.

The proposed development comprises a 500-hectare industrial park located within the Dung Quat Economic Zone, where government-supported special economic zone incentives are made available to manufacturers. Separately, under consideration are 520 hectares of land zoned for commercial and residential purposes near downtown Quang Ngai city.

SEMBCORP SIGNS THREE AGREEMENTS TO EXPAND UTILITIES BUSINESS IN LIAONING PROVINCE, CHINA

Singapore, September 28, 2011 – Sembcorp is pleased to announce that it will be signing three memoranda of understanding (MOU) to explore further collaboration on utilities projects in the Liaoning province, China, at the Singapore-Liaoning Economic and Trade Council meeting later this morning.


MOU for the strategic cooperation between Sembcorp and Liaoning government

The first of the MOUs that will be signed is a strategic cooperation framework between Sembcorp and the Liaoning Provincial Bureau of Foreign Trade and Economic Cooperation to strengthen their collaboration in the development of utilities facilities in the Liaoning province. As part of this strategic cooperation framework, Sembcorp will explore the provision of utilities, including energy and water solutions, to industrial customers, particularly in the petrochemical industry, in various cities within the Liaoning Coastal Economic Area and the Shenyang Economic Zone, including Fushun, Dalian Chang Xing Island and Panjin.
 
MOU to explore investing in centralised utilities projects in Dalian Chang Xing Economic and Technological Development Zone, Liaoning province


Following the signing of the strategic cooperation framework, Sembcorp will be signing a MOU with the Dalian Chang Xing Island Economic and Technological Development Zone (大连长兴岛经济技术开发区) to explore the development of world class centralised utilities facilities on Dalian Chang Xing Island.
 
MOU to explore forming a joint venture to develop centralised utilities project in Fushun Hi-tech Development Area, Liaoning province

Sembcorp will be signing a third MOU with the Fushun Hi-tech Industrial Area Administration Committee to explore forming a joint venture company to develop a centralised utilities project for the provision of energy, water and on-site logistics to the Fushun Hi-tech Industrial Development Area.

Tuesday, 27 September 2011

Olam's long-term commods outlook bullish; cautious on cocoa

SINGAPORE - Singapore-listed Olam International said on Monday the long-term outlook for most agricultural commodities was still bright despite the threat of a slowdown in demand triggered by economic woes, but weak fundamentals could work against cocoa.

Gold and copper suffered their biggest slump since the 2008 financial crisis as another brutal sell-off hit commodities on growing doubts Europe may be unable to prevent its debt crisis from dragging down the global economy But Sunny Verghese, Olam's chief executive officer, told Reuters growing demand for food, and shrinking supply, would support prices in the long run.

'Right now we are facing increasing economic pressures on all markets, and since all asset classes are now more correlated, it is impacting commodity prices as well,' Mr Verghese said in an interview.

'Cyclically we will see probably a correction but over the medium and long term we see commodity prices remaining firm as we see growing imbalances between supply and demand for food.'

Olam, a major global trading house which is the world's largest shipper of robusta coffee, is 14 per cent owned by Singapore state investor Temasek.

The company trades about 20 different commodities ranging from Australian almonds and African cashews to cocoa. It also operates coffee plantations in Laos and a rice business in Thailand. According to its website, Olam has some 10,000 customers.

Mr Verghese said the company was unlikely to raise any equities to support medium-term growth and to achieve a target US$1 billion profit by the financial year ending 2016.

'We have already considerably strengthened our capital base, even if the global capital market completely shuts down for the next couple of years, it does not matter for us because we have raised enough capital both on the debt and equities side,' Mr Verghese said.

'We will raise additional debt capital 2-3 years down the road but right now we don't need any... (and) we are unlikely to raise equity to support this growth,' Mr Verghese said referring the firm's 2016 financial year target.

Olam was bullish on coffee, where high-quality arabica beans rallied to their highest in more than 30 years this year on supply concerns, but the outlook for cocoa was shaky because of a global supply surplus in the 2010/11 crop year.

New York cocoa futures rallied to their highest in 32 years around US$3,800 a tonne in March after fighting in top producer Ivory Coast ignited fears of supply disruptions. Prices have since dropped to around US$2,600.

'So we believe cocoa prices, for example, are still over valued despite the sell-off that happened in the recent past. So we are bearish on cocoa. We see a significant surplus globally, and therefore we expect cocoa prices to trend lower,' Mr Verghese said.

'We expect a surplus, our internal estimates are closer to 450,000 tonnes. I think the market is pricing in now about between 350,000 and 400,000, but we expect a bigger surplus - between 425,00 and 450,000.'

Current global coffee consumption is expected to grow as high as 2.7 per cent, and there will be a lag in supply growth because of minor increases in top robusta producer Vietnam, the world's largest producer of the variety used in instant coffee.

'In the last 10 years, demand has grown by an average of 2.25 per cent per annum. We expect going forward, demand will grow at more like 2.5 to 2.7 per cent per annum. It's already started,' said Mr Verghese, adding that demand for specialty coffee is on the rise.

Olam pegs Vietnam's coffee crop at 1.2 to 1.25 million tonnes in the 2011/12 crop year, slightly higher from 1.15 million tonnes in the crop year to September 2011 because there is few new plantings.

Indonesia, the world's second-largest robusta producer, will see a recovery in production in the main growing island of Sumatra, but domestic consumption is also expected to increase to up to 180,000 tonnes in 2011.

'We estimate Indonesia's local consumption now to have grown to about 170,000-180,000 tonnes. This is this year. It is growing at about 10 per cent per annum for the last, I would say, 5 years,' he added.

Sumatra's production is estimated at 250,000 tonnes in the 2011/12 crop year due to better weather, from 160,000 tonnes in the 2010/11.

On sugar, Olam expects raw sugar futures to find a floor at 24 US cents a pound equivalent to domestic ethanol prices in main sugar producer Brazil, after high prices curbed demand for the sweetener.

Mr Verghese said Olam, which has a market capitalisation of US$4.5 billion, is looking to develop or buy sugar plantation assets in Indonesia or Brazil.

However, he said the company is not currently looking at Indonesia's Papua region where Singapore's Wilmar, the world's largest listed palm oil firm, is trying to set up 200,000 hectares of sugar plantations.

New York sugar futures surged to their highest in more than three decades at around 36 US cents a pound in February after a massive cyclone struck Australia, one of the world's top exporters. Prices have slipped to around 24.80 cents.

'We're seeing for the first time a decline in consumption this year. It has never happened in history,' said Mr Verghese.

'We think 24 cents will provide a strong support. We also see sugar consumption growth being very strong, apart from this year's blip because of very high prices.' -- REUTERS

Saturday, 24 September 2011

Portfolio Stress Test for Big Bear in 2012/2013

Read? Riding through market cycles. No free lunch!

I did a stress test on my portfolio based on my perceived worst case scenario that may happen. The plunge may not be worse than 2008/2009 in super low interest rate of 0.05% and higher inflation rate of 5% environment. The stock market is more likely to be supported as investors simply can't hide themselves too long in Cash.

If you poll or observe the people around you; there are still too many people sitting on lots of cash waiting for opportunity to enter the stock market. They will soon rush in to absorb any selling pressure for yield stocks.

These people know that Cash is not King until you are able to enter the stock market to the ride with the next bull up ; otherwise your Cash is rotting in the bank or money market.


Unlike in 2008/2009, this time I will have more fire powers to rebound with the next Bull so I must sharpen my mind and open my eyes wider to spot the next market gems.




Riding through market cycles. No free lunch!

Read? Sanity Check on the Money Plan against STI Support Levels


Will STI technically enter the Bear market soon?

Struggle within. No free lunch!

Does riding through market cycles make any senses? BTW, there is no free lunch in the stock market. Do or do not! - Master Yoda



Another plunge in 2012/2013???


Friday, 23 September 2011

Three Acts of Kindness!

Borrow the idea from La Papillion


** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."


Read? Why opt-out social scheme works?

There are probably three acts of kindness in us.

  1. Proactive - as volunteers or regular contributors to social causes or charity
  2. Reactive - Participating when approached for social causes or charity
  3. Passive - Will not opt out for social causes or charity

Steeper rise in CPI for August

SINGAPORE: Singapore's consumer price index (CPI), a measure of inflation, rose a steeper 5.7 per cent in August from a year ago.


The CPI had risen 5.4 per cent in July.

The Department of Statistics (DOS) said this was a result of higher costs of accommodation, private road transport and food.

The higher accommodation cost reflected mainly higher imputed rentals of owner-occupied accommodation which has no impact on the cash expenditure of owner-occupied households.

The higher cost of private road transport was mainly due to the significant increase in Certificate of Entitlement (COE) premiums.

Excluding accommodation costs, the consumer price index was 4.4 per cent higher compared to the same period last year.

Compared to July, the CPI for August rose 0.7 per cent, reflecting mainly higher costs of private road transport, accommodation, clothing & footwear as well as "recreation & others".

On a month-on-month basis, the MAS core inflation measure (which excludes the costs of accommodation and private road transport) was 0.4 per cent in August.

On a year-on-year basis, the MAS core inflation measure was 2.2 per cent.


- CNA /ls
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