Monday, November 19, 2018

Investing Is So Damn Tough You Are Right

To say that this has been a tough year for investment is an understatement.

Investing, as a general form of growing your wealth is so damn tough that for one not to be losing money is sometimes already seen as a form of success.

I can totally relate why many people avoided them like a plague because contrary to many popular beliefs, it can jolly well diminish your money.


Imagine yourself being invested in Asian Pay TV Trust at the start of the year, having intrigued by its stuttering share price and a high dividend payout.

You might have thought the dividends they pay out is unsustainable hence you made a decision to project them conservatively at the fcf you think they can give out.

When APTT announces their recent results, the management is even more conservative than you are and slashed their dividends like they did to slaughter a dying pig, causing its share price to fall by 50% in one day.

APTT might be a bad example because the more savvy investors could have been advocating investors to avoid them since their ipo days.

What about a stronger company like First Reit, which owns several hospitals in Indonesia and homes in Korea and has triple net lease master arrangements with a solid industry and sponsor background.

Imagine if you are someone who've just started out and would like to form a sustainable decent dividend paying reits and you come across First Reit as a company that has a great background history in terms of both operational and financial.

You got in at $1.20, thinking a 6.7% yield is decent enough for a hospital industry and then out of nowhere got whacked down by 20% in a week without having any clue or news to what was happening.

That is 3 years of dividend panadol that you need to wait before you even recoup back your capital.

Sounds like a ponzi scheme to many.

For those that turns to arguably one of the safest company in Singapore, Singtel did not fare any better.

Singtel earnings have been dragged down by weaker regional performance and their share price have been languishing low, back to where they are in the last 10 years.

You could argue that you receive a lot in terms of dividends over the past 10 years but that's mostly for consolation.

You know that is not good enough.

At the end of the day, you might just turn to the Singapore Savings Bond and decide to wait until the recession is here but I can tell you that by waiting your skills aren't polished enough to handle such situations when it comes.

You'd be just waiting and waiting and waiting.

Investing does not guarantee that you build up your wealth and I do not have an answer to one that can guarantee that you will.

The environment we face in the next 10 years should make it even harder to make money.

It is so damn tough you are right.


19 comments:

  1. stock pick is hard. How doing index investing?

    ReplyDelete
    Replies
    1. Index investing hasn't done that well this year and for past years either.

      The worst part is your mental mind doesn't get stimulated enough haha

      Delete
  2. Prior to recent events, so many keyboard warriors boast about their passive income and hinted how they are in investment. Now most keep quiet. I like your frank sharing.

    ReplyDelete
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  4. Well said. It's important to keep a long term mindset, presently. We need to keep reminding ourselves about the benefits we will reap in 20 years as a result of compounding. I agree, this year hasn't been easy, but hey, isn't life just teaching us something? Stay cool folks and as this year's market has taught us all, stay humble.

    ReplyDelete
  5. Ha! Ha!

    It easy for U to say that.

    i wonder at age 70 + what can i say!?

    ReplyDelete
  6. But i have benefitted from the Time Factor of Market Cycles.

    The only problem is going forward it seems a very different world!

    ReplyDelete
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  8. Imagine the anguish for your lifelong salary vested in aptv being wiped by half

    ReplyDelete
  9. From experience, penny stocks are not easy for outsider to dabble with.

    ReplyDelete
  10. Hi,

    My take is that one focus on dividend investment (spread the monies into as many baskets as possible). The price of the stocks is secondary.

    Ben

    ReplyDelete
  11. The price of a stock is related to P/B, debt/equity, operating cash flow, ROE, etc... all these have a factor in detemining the dividend.

    But market sentiments can overule all these factors.

    So how?

    ReplyDelete
  12. Investing is never easy. Even the hedge fund managers get it wrong . Lesson I've learnt over the year is that you get your fair share of lemons once in a while, and no one's perfect. Even Warren Buffett gets it wrong sometimes... Mr Market may not be correct at this point in time as well. I'm not losing sleep so far, as this is a long game.

    Can't help but notice that your portfolio is almost entirely SGX-focused. Might be worth looking at other countries - particularly US blue chips.

    ReplyDelete
  13. i have a US portfolio for 20 to 25 years.

    Besides, alot of Singapore companies have oversea subsidiary companies.

    ReplyDelete
  14. Most SGX blue chips have many oversea subsidiaries or joint venture companies.

    Even ST Eng has a few.

    ReplyDelete
  15. Nice blog and a very interesting post. Yes, I agree investing is so damn tough especially for those filled with negativeness regarding the same. But yes, I also agree that current environment is not so favorable for the investment.

    ReplyDelete
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