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Friday, September 28, 2012

Albert Edwards: We will see a repeat of 2007 Dejavu

It has been a while since we heard from SocGen’s uber-soothsayer Albert “Ice Age” Edwards. He is now back, and with quite a bang, reiterating a line from Marc Faber that will prove 100% accurate in a few short years. The French bank’s forecaster, who has proven accurate in his prediction of the Asian Financial Crisis and the tech bubble bust in the 1990s, has made his call again that the S&P 500 will go down to 500 points within the next 18 months. Apparently, he claimed that what the Fed did with the QE3 was somewhat a repeat of what the Fed did in 2007. He also predicted that there will be a China hard landing, seeing an underlying growth in China sliding to as low as 3 - 4%.


Deja vu? “the last time I reduced my equity weighting to 30% was 8 May 2008 when the S&P was stlll standing at 1400. Keep plenty plenty of cash over the next 18 months. There will be once in a generation opportunity to buy very cheap equities within the next 18 months - Albert Edwards.



Sunday, September 23, 2012

The Story of a Mexican Fisherman

I came upon a great story in the web written by Heinrich Ball.



An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "only a little while."

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years."

"But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

The moral of the story -- Know where you’re going in life — you may already be there.

Should you give an allowance to your parents?


There's an article recently published in the "Sunday Times" which debates whether working children should give part of their allowances to parents as a form and gesture of appreciation and respect. This, of course, is debatable and it varies from one family and culture to another.

--> Click here to read <--



From the interviews of some of the working adults in the articles, we know that some do give part of their salary received every month to their parents as a form of respect while some do not practice this. Those that do not give their parents any allowances argue that their parents have enough to support themselves hence they do not see the need to contribute.
 
I personally (and solely only my personal opinion) feel that if parents have sufficient income (or even earning higher income than yourself) to support themselves, then there is really not a need to give allowances to them. Of course, by not giving the money to them I don't mean spending it on booz, party, gambling or branded goods. What you can do with these money is to utilise it to either make downpayment for your house, investment on your financial planning or savings on your children's education. You get it.
 
My point is "respect" needs to be earned -- not simply by giving a fixed allowance to them every month but rather spending it on quality with your parents on weekends and treating them well. Fair enough, I don't give my parents any allowances unlike most of my colleagues which did so. But what I do contribute is spending quality times with my parents every weekends. We eat, laugh and tell stories together as a family. The smile within the heart is probably what they will rather desire more than simply receiving an allowances from their children.



Tuesday, September 18, 2012

"Sep 12" - Transactions & Portfolio Update



Counters
No. of Lots
Average Price (SGD)
Total Value (SGD) based on average price
Market Price (SGD)
Total Value (SGD) based on market price
Total Dividends collected (SGD) since purchase
ST Engineering
5
2.82
14,100.00
3.47
17,350.00
1,240.00
SIA Engineering
3
4.12
12,360.00
4.13
12,390.00
0.00
Noble
2
1.12
2,240.00
1.325
2,650.00
0.00
FraserCenter Point Trust
12
1.505
18,061.00
1.775
21,300.00
500.00
First Reit
7
0.82
5,765.00
1.02
7,140.00
204.00
PLife Reit
10
1.85
18,507.00
1.95
19,500.00
270.00
Boustead
3
0.88
2,650.00
0.96
2,880.00
60.00
Singtel
2
3.05
6,100.00
3.32
6,640.00
180.00
Neratel
14
0.42
5,920.00
0.45
6,300.00
400.00
Ascendas Hosp. Trust
5
0.89
4,450.00
0.905
4,525.00
0.00
QAF
2
0.70
1,400.00
0.72
1,440.00
20.00
Unit Trusts
-
-
6,300.00
-
6,300.00
-
 
 
 
97,853.00
 
108,415.00
2,874.00

I've made a few changes to my portfolio for the month of September due to the recent rally resulting from the QE3 announcement made by the Fed.

I've accumulated 3 lots of Parkway Life Reit more to my portfolio due to lagging price as people seek for more aggressive stocks due to the recent QE3 announcement. I've also always liked the healthcare sector, especially in Singapore - notably shown now that IHH (a healthcare sector) will be replacing NOL as one of the STI components.

I've also added 3 lots of SIA Engineering into my portfolio on the basis of consistent Q1 result and low beta defensive stock. The RSI indicator is also at the acceptable range at the moment. Assuming similar to last year, it will be announcing it's dividend soon and this will be enough to support the current price imo.

My decision to take profit off my ST Engineering partially is due to the recent 52-week high. Furthermore, the RSI indicator also shows that it is currently in the overbought region. My thought on this is that there will be strong resistance at 3.50 which it did test a few times but unable to break further. A strong support is seen at 3.47.

On the receiving side, I received a total of S$390 from dividends (S$150 from Plife Reit and S$240 from ST Engineering) this month. The next major dividends I will be receiving will be in November when the majority of the stocks and REITS will be distributing its dividends. Until then, I guess we'll enjoy the QE effect until election and fiscal cliff looms ahead ;)




Relax & Fun with B -- Introducing an Aircon Specialist

This month's "Relax & Fun" Section introduces an Aircon Specialist - Mr. Simon See.

For those of you who need aircon servicing or cleaning, you may approach Mr. See from his details below. Great price, excellent workmanship and superb service - look no further.

Thursday, September 13, 2012

Welcome IHH; Goodbye NOL


IHH Healthcare has replaced Neptune Orient Lines as one of the 30 constituent stocks in the STI as a result of the half-yearly review by SGX and the FTSE Group.

Good or bad?

CapitaLand Ltd Keppel Corp Ltd
CapitaMall Trust Noble Group Ltd
CapitaMalls Asia Ltd Olam International Ltd
City Developments Ltd Oversea-Chinese Banking Corp Ltd
ComfortDelgro Corp Ltd SembCorp Industries Ltd
DBS Group Holdings Ltd SembCorp Marine Ltd
Fraser and Neave Ltd SIA Engineering Co Ltd
Genting Singapore PLC Singapore Airlines Ltd
Global Logistic Properties Ltd Singapore Exchange Ltd
Golden Agri-Resources Ltd Singapore Press Holdings Ltd
Hongkong Land Holdings Ltd Singapore Technologies Engineering Ltd
IHH Healthcare Berhad Singapore Telecommunications Ltd
Jardine Cycle & Carriage Ltd Starhub Ltd
Jardine Matheson Holdings Ltd United Overseas Bank Ltd
Jardine Strategic Holdings Ltd Wilmar International Ltd

Wednesday, September 12, 2012

Review of the STI Constituent Stocks

There will be a review tomorrow for the STI Constituent stocks by the SGX and FTSE Group. Will we see any changes in the bluechip index of the STI??? I would love personally to see Ascendas REIT gets inside the main STI index.


Current Constituent of the 30 STI components

CapitaLand Ltd Keppel Corp Ltd
CapitaMall Trust Noble Group Ltd
CapitaMalls Asia Ltd Olam International Ltd
City Developments Ltd Oversea-Chinese Banking Corp Ltd
ComfortDelgro Corp Ltd SembCorp Industries Ltd
DBS Group Holdings Ltd SembCorp Marine Ltd
Fraser and Neave Ltd SIA Engineering Co Ltd
Genting Singapore PLC Singapore Airlines Ltd
Global Logistic Properties Ltd Singapore Exchange Ltd
Golden Agri-Resources Ltd Singapore Press Holdings Ltd
Hongkong Land Holdings Ltd Singapore Technologies Engineering Ltd
Neptune Orient LinesSingapore Telecommunications Ltd
Jardine Cycle & Carriage Ltd Starhub Ltd
Jardine Matheson Holdings Ltd United Overseas Bank Ltd
Jardine Strategic Holdings Ltd Wilmar International Ltd

Reserves: Hutchinson Port Holdings, Yangzijiang, Keppel Land, Ascendas REIT and UOL.

Tuesday, September 11, 2012

Premier Wen: China will meet 2012 growth targets

NEW YORK (MarketWatch) -- Chinese Premier Wen Jiabao said Tuesday that his nation will meet its official growth target of 7.5% GDP growth in 2012, though he acknowledged that the Chinese economy is facing significant pressure. "It is true that the Chinese economy is under notable downward pressure, but with our efforts to shift our economic model, better allocate resources and implement more reform and opening up, we have the ability to keep the economy in good shape," Wen said in a speech at the World Economic Forum's meeting in Tianjin, according to a statement released by WEF. Wen, who is due to retire in a few months, also said that China's growth may be slowing, but it is more stable. "We will give greater priority to stabilizing growth and maintaining the continuity and stability of our policies," he said.                    

Hang on investors!!! This could well be a breakout for some of the commodities and property stocks. With possible QE coming in within the next few days, things could look interesting this month.

Sunday, September 9, 2012

Fast forwarding decision on your life

Many people would relish the opportunity to rewind back on their lives if they had the chance to do so. But what about fast forwarding on your life? What if you have the power to fast forward on events in your life which you may deem as boring or just purely horrible. What if you have the power to fast forward Monday to Friday (TGIF!!!) or skip some of the "boring" moments in your life such as work or projects assigned to you which you didn't like. Would you have make a decision to do so?
 
 
 
 
I happened to rewatch a movie called "Click" starring Adam Sandler this past weekend on my computer and I would encourage you to watch it if you have not watched it yet. The movie has a very emotional and touching story to the plot and I actually feel that it is one of the few movies these days which allows real life reflection on the audience. Ok. Anyway, basically to summarize, the main character gets hold to a special remote control one fine day which allows him to fast forward on events in his life. Needless to say, he fast forwarded on events which he didn't like and before he knows it, he has come to near the end of his life without realizing it. I wouldn't want to spoil the rest of the story in the movie so watch to find out the ending :).
 
Just like the main character in the movie, we are abided by rules and commitments in our everyday lives. We work 5 days a week and miraculously hope that Monday could somehow turns to Friday when we wake up. Whenever we are faced with our peak season at work or clients which we dislike, we would wish that we had that special remote control to fast forward on that particular event. In fact, in all certain situations, we've all had an urge to fast forward past a moment in our lives.
 
Now unless you have that special remote control from the movie (unfortunately I don't), you would have realised by now that you cannot actually fast forward time. This is actually a good thing since if we do have control to fast forward on our lives, we would probably have used it a million times and our lives could be over by now before we even knows it. So it leaves us with two choices: trying to unsuccessfully make life move faster, or enjoy and love the events no matter how much you hate it.
 
In essence, the desire to try to fast forward our lives creates this feeling of uneasiness. If one takes an honest and careful look at those moments with a sense of uneasiness, then what you would get is a feeling of uneasiness. In contrast, if one can act efficiently but with a sense of easiness in those moments, then you would come to realize that in fact everything is just simply ... beautiful.
 
"Life is what happens while you're busy making other plans." Try to fast forward and you miss it!
                                                                     John Lennon


Friday, September 7, 2012

Next bubble looming in dividend stocks?

Dividend paying stocks have been on a decline -  I mean ... the yield, of course. With interest rate around the world seems to remain low for at least until 2014, we could see people rushing for yield to get their returns and this would ultimately lead to yield compression. Remember during the GFC time when some yield on stocks would represent 20 - 25%? Now it is nowhere even half near that high. What we are looking at now is only between the range of 5 - 6% at best.

Rank – Capital Gains

REIT
Aug-12
Dec-11
Gain
FCOT
$1.120
$0.740
51.4%
Fortune Reit HK$
$5.630
$3.760
49.7%
AIMSAMPIReit
$1.305
$0.945
38.1%
K-REIT
$1.120
$0.830
34.9%
CapitaComm
$1.420
$1.055
34.6%
SuntecReit
$1.445
$1.075
34.4%
First REIT
$1.000
$0.760
31.6%
CDL Htrust
$2.030
$1.545
31.4%
MapletreeLog
$1.110
$0.845
31.4%
Cambridge
$0.620
$0.475
30.5%
StarHill
$0.735
$0.565
30.1%
MCT
$1.100
$0.850
29.4%
Ascendasreit
$2.360
$1.830
29.0%
CapitaRChina
$1.480
$1.150
28.7%
MIT
$1.360
$1.075
26.5%
AscottREIT
$1.250
$0.990
26.3%
LippoMapleT
$0.435
$0.350
24.3%
FrasersCT
$1.785
$1.440
24.0%
Sabana REIT
$1.045
$0.875
19.4%
CLT
$1.125
$0.950
18.4%
CapitaMall
$1.980
$1.700
16.5%
SaizenREIT
$0.158
$0.140
12.9%
PLife REIT
$1.920
$1.790
7.3%
FE-Htrust
$0.985
$0.930
5.9%
A-Htrust
$0.890
$0.880
1.1%
*REITS table on capital gains

Bubbleologists may be misreading the dividend frenzy. Both the anti and the advocates generally attributes the latest rush to dividends as a result of the persistent Euro crisis and recent hiccups in the China growth story. Fearing a global slowdown, the thinking goes, investors are shifting out of economy-sensitive cyclical stocks such as commodities (Noble, Wilmar, Olam, Sakari) and shipping (NOL, Cosco, YZJ) in particular into sectors like utilities, telecoms (Singtel, Starhub), REITS and consumer staples (SPH, etc) — considered defensive in nature because of their maturing business and steady cash-flow even in hard times and their commitment to paying a dividend.

Yet this defensive shift is but a small part of the story. What’s really driving the trend to dividends is the low yield environment that has almost everyone, not just the retirees now, so desperate to secure an income stream that they have begun moving up the risk ladder. With the 10-year Singapore bond yield trading at a record low of 1.3% and bank fixed deposits paying close to peanuts, the dividend bubble may yet takes its time to slowly form a bigger bubble and until then we will happily wait cause this bubble will not burst for a while now.
 
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