Friday, April 11, 2014

Be Prepared for the Loss of your Job

When corporate firms signal their intention for restructuring an organization, there will always be uncertainty that sends their employees morale down their spiral. In today's context, we see pressures coming in from top management and shareholders on how they can come up with a leaner processes that will drive up their profit margin and lower their overhead.

No levels are secured - from the junior assistant to the Director level. Anyone at any point in time can be retrenched at the mercy of where the company direction is going. That's what happens recently to SPH who undergo restructuring in order to have a leaner processes and eliminate inefficient resources.

I've spent two years at my current company and now I've probably undergone two major restructuring within an organization itself. Some people who are close to me are directly affected and it is never easy for an organization to go through that in the short span of time. Morales are down, employees are uncertain and productivity to a certain extent goes down in the short term. The overall direction of the company may be going the right way, but as an employee you never are going to relate the same way as a shareholder does.

In these circumstances, the question people usually ask is how well are you prepared for such a retrenchment? Do you have an alternative plan on how are you going to cover your basic expenses for the family? Do you have any transferable skills that will enable you to find another job elsewhere? Maybe here are a few things to get you started:

1.) Have an Emergency Funds

This is where the importance of emergency funds kicks in. You should be prepared to work around your finances well even when things are going well for you. The idea is you never know what is going to happen next to you as long as you work being an employee depending very much on that paycheck at the end of the month.

2.) Regular reviews of monthly expenses

Conduct regular reviews of your monthly expenses and see which of the expenses you can easily strike off from the lists and which is the more important ones. You should be able to segregate the necessities from the luxuries and work on covering the basic necessities expenses while you are still working.

3.) Enhance your productivity

Consistently enhance and upgrade your skills in order to meet the requirement the world needs. Always remember that CHANGE happens within our world whether we like it or not. It is always up to ourselves on whether we want to change for the better that can improve on our productivity and marketability.

4.) Build up your passive income

The idea of passive income is to allow you to eventually do nothing but still receive a stream-flow of income, for whatever use you want it for. To start young means you will have a much longer time to build up your sandcastle so that you will have a canon stream of income when you get older while your employability does get lower.

Most people in Singapore are tied down to major necessities expenses such as housing, cars, renovations, education loans, parent allowances, school fees, maids and so on. This is why money management is even more important for these people who knows that they cannot absolutely afford to lose their job. Working on the above 4 points will at least gets you the start they need, but it needs to start early - when your job is still relatively "Safe".

Tuesday, April 8, 2014

FCT finally acquires Changi City Point

FCT has finally announced a proposal to acquire Changi City Point at $305 Million to inject the abovementioned asset into their existing sub-urban malls portfolio.

I’ve got a feeling that investors have been waiting for this acquisition for some time now, given the recent lacklustre organic growth opportunities especially on their performance for YewTee and Bedok Point in the recent months.
My take on Changi City Point
For those who have not been to Changi City Point, they are a sub-urban malls located in the heart of Changi Business Park and is close proximity to the residential estates of Simei, Bedok, Expo and Tampines area. Strategically, they are well placed on the heart of the more congested sub-urban areas, so crowd will not be an issue. More details on Changi City Point is as follows:
Gross Floor Area (sq ft)
Net Lettable Area (sq ft)
No. of Committed Leases
Breakdown by Types
Percentage (%)
Committed Occupancy Rate as of 28.02.2014
The one thing I wanted to highlight if you have not been to Changi City Point is that I always feel their malls are too concentrated with F&B. As you can see the breakdown from the above table, F&B alone makes up 39% of the entire leased area. Comparing this to other FCT malls like Causeway Point and Northpoint, their F&B only makes up 23.5% and 28% of the entire netted lease respectively. That is not to say it is bad for Changi City Point to have such a large concentrated F&B as part of their committed lease, but the higher gross rental they can derive from these and you can probably understand why they do so.
Based on the table below for the other 2 FCT malls, we can see that F&B, Fashion and Beauty are consistently the main income generator while Department Store, Education and Supermarket are consistently the main income destroyer for FCT. Having said that, we cannot have a mall that is full concentrated only on the main income generator as it will defeat the purpose of having a diversified mall. A right mix of tenants is desired. I just wonder with the high F&B concentration for Changi City Point will have an impact on competition and a drop-out from these high numbers in the future that will impact DPU.
Causeway Point
Top 5 Leased by Trade Mix
Top 5 Gross Income by Trade Mix
Department Store
Department Store
Top 5 Leased by Trade Mix
Top 5 Gross Income by Trade Mix
My take on the acquisition
Management have indicated that the acquisition will be yield-accretive for investors.
As part of the equation to finance the acquisition, management have decided to go with the private placement instead of issuing rights issue which supposedly can benefit the larger minority crowds.
Given that the acquisition will most likely be funded by half equity half debt, we probably will see gearing rising up to around 35% (739/2135) which is still prudent in management’s view.
While I most probably cannot participate in the private placement exercise, I hope they do not set its price too low to institutional investors as it will affect the market sentiments of the stock price which currently sits at $1.78.
Given FCT management track record of maximizing shareholder’s value in the past years, I have no doubt that they are well on track to achieve another round of high record DPU for the company as well as the shareholders.
Vested with 30 lots of FCT as of writing.

Thursday, April 3, 2014

Improving on an investor "Exit" Strategy

If you have been investing for some time, you would probably have developed some kind of an exit strategy in selling your assets. Whether your assets are stocks, funds or properties, all of us would have an exit strategy preference that is different from the other. 

For instance, if we are talking about stocks, these exit strategies are probably the most common you would see:

1.) Valuation Strategy - Based on the intrinsic value calculation of a company, you would be able to come up with a valuation figure that you think the stock is worth for. If the stock hits your target price, you take profits off the table and wait for a better opportunity to enter should it drops below your valuation price.

2.) Chart Pattern Strategy - This strategy usually applies to traders who buys and sells through the different chart patterns. Resistance, Support, Double-Bottom, Moving Average are all parts and parcels of trading chart patterns. The gap spread is usually small and traders don't usually hold the trade for long periods of time. They come in and out as soon as they see opportunities.

3.) 52 Weeks High Exit Strategy - Many investors usually sold their stocks once their stocks hit its 52-week high. They look at the stock's historical high to base their sell position. In most cases, the stocks continue the uptrend momentum and create a new higher 52 week high.

4.) Contra Strategy - These investors usually do not have the money to hold stocks for long periods of time. In the short time span, these investors will be able to receive the profit gap difference without having to fork out any amount of money. This looks like a very dangerous move to me.

5.) Pre-Ex dividend Strategy -  This is a strategy which I've contemplated to try in the past and it has bring good results at times. This is a strategy that you sell your stocks before the stock goes ex-dividend and purchase it once it goes lower. For some stocks which I have tried in the past like SPH, this strategy usually yields good results, especially if it is used after the Dec dividend.

As you can see above, there are many different types of an exit strategy and there are no right or wrong, as long as it's proven right for you. For me, I always have a target price for stocks I wanted to exit at. A price that you will not purchase at is probably the price that you will be willing to sell.

 Is there any exit strategy that is particularly more suited to you? Anticipating to hear...

Friday, March 28, 2014

Generating Income on a Friday evening!!!

It's been a while since I last went to a focused group survey, especially on a wonderful Friday evening when you can use the time to enjoy a nice dinner with your loved one, watch a movie with your friends or chill-out with your colleague. Instead, I chose to spend the time on a focused group survey I signed up for.

The remuneration has to compensate for the time loss, so I thought it was a good time to earn extra earnings for the month. For the past surveys I have gone to, my remuneration was not too bad (Extra Income). This time, I received $200 for a two-hours focused group discussion. That's money that is able to cover almost 15% of my monthly expenses together with my wife. There were also light refreshments which includes pizza, bread and some drinks. So I thought it was overall worth the effort, especially since the discussion takes place within distance from my home.

I am going to repeat again what T.Harv Eker used to say in his book. "Never Reject Money". It taught us the importance of every single income earned and saved and converting the rest into residual passive income. Respect money and it will respect you back.

It's now time to enjoy the rest of the evening on a Friday night ;)

Friday, March 21, 2014

My Transition from a Single to Married Life -- Financially

I see the way the human nature (for most people) transition over time in 3 big steps, from single to married life to having extended little minions in the family members.

As I am close to the end of having our own personal honeymoon world in these past 9 months of marriage, I would like to share on the difference between leading a single to married life before moving on to having little Bs bugging for daddy :)


Savings percentage is probably one of the major difference financially between leading a single or married life.

When I was single (until 9 months ago), I used to save home a huge percentages of my active income every month. If you see some of the expenses posts I've made in the past years, my savings rate usually goes as high as 80% to 90% each month. I rarely spent on anything major for myself except a couple of good food here and there, but my passive income usually takes care for it.

As expenses start to go up in my married life together with my spouse, savings rate naturally goes the opposite way. Based on the expenses we recorded in the past 9 months, I am still proud to say that we've kept the discipline and momentum going. My savings rate are these days down to about 50% but that is still a respectable figure after seeing articles of so many people who is earning so much but yet save so little.


Power play often plays a big part in a couple's marriage. This concept means that if one is earning more than the other, then he or she should contribute to the expenses ans savings more than the other.

For us, we like to keep it simple and not being too calculative about money. As long as both of us keep our expenses well in check and be honest with one another, I do not mind contributing to the expenses.

I usually allow for my wife's money that she earned to be spent on her desire consumer goods. So if she wants to buy groceries, we can use our money but if she wants a $5k bag, then she needs to earn that money first herself.

Common Goal

You can probably see that our two person's honeymoon world is not the longest in the world. 9 months is all we have and boom our little baby is here.

For this to happen, I often talked to her about budgeting the right amount if we are going to have kids in the future. The cost of living and raising kids in Singapore are probably not the cheapest and I think to be cautious we will probably need $700k to raise for one single child until graduation. If we want 3 children, then we multiply that figure by 3, which is getting ready for the future expenses that we are going to incur. It's think before action, just what everyone needs.

How is married life for you? Does discipline between couples matters the most?

Money $$$ - Difference between respect and disrespect

I came across these two pictures which I do not know fully whether it holds truth, but if it is then we know what is the kind of respect we do need to give these two different people.

Christiano Ronaldo, a player at Real Madrid football club is the current FIFA World Footballer of the Year who earns the highest wage amongst all other footballer in the world. Yet, the way he respects and donates his money deserves our respect.

Contrary, Liam Ridgewell, a player who plays for Westbrom uses his "excess" money as a tissue paper to clean his butt. 

What can we say about these guys? It does seem like it's his own money to begin with to do whatever he likes. Does that look a little overboard?

Friday, March 14, 2014

"Mar 14" - SG Transactions & Portfolio Update"

No. of Lots
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
FraserCenter Point Trust
SembCorp Ind
Ascott Reit
FraserCommercial Trust
First Reit
ST Engineering
Mapletree Greater China Commercial Trust
China Merchant Pacific
Plife Reit
Second Chance
Ascendas Hosp. Trust
Mapletree Logistic Trust

Total SGD


I think I'm pretty much done with my Mar transactions hence the earlier post than usual.

For Mar, I have once again further accumulated Sembcorp Industries at the price of $5.25 after the stock bounced off from its resistance high of $5.50 earlier. It is the second consecutive month of accumulation of the same stock and you can see why I am bullish about the stock. The EDGE in this week edition also features Sembcorp and you can pick the news up in the newspaper. If you don't have the newspaper, you can refer to my previously posted content which features similar content it was talking about. With the addition, Sembcorp has now become my top 3 holdings just below FCT and Vicom.

In the same month, I have also divested off partially my holdings in SPH after it hits a high of $4.18. Looking back at today price, the selling looks a good deal as the stock has went up higher in the past few weeks. I'm still awaiting to see further updates from SPH to see if this is indeed a good long term hold.

My portfolio is now just somewhat $6k short of my biggest first cap milestone of $250k which I will be posting when is due. I hope I can reach them by the next 2 months as Apr and May tends to be the most fruitful months among all season, with bonuses and dividends coming in from both sides.

What about you? Any stocks you find interesting lately? Let's share...