New year's eve, I'm back home at 9 pm already. Let all the hot gals and hunks cheong their heads off while I'm back home, nice and comfy typing an article. Haha, getting old I suppose, but I never really like the crowds and the cacophony that follows in such a countdown event. If you spot me in such events, most likely you've got the wrong person.
As I was walking home, I was thinking about the problems related to using dividend yielding stocks as a passive stream of income.
These are the things I think are worth thinking about:
1. Longevity...
Thursday, December 31, 2009
Friday, December 25, 2009
Christmas day's reflections
The more I stay in the market, the more I realised that being calm and steady is the only way to win consistently. I've dealt with higher volatile instruments before and the conclusion is that you don't want to be too happy when you win and too sad when you lose. In the short run, what you see is the variability of your system, not the returns. A short run of good wins will be interrupted by a short run of bad losses.Since today is Hohoho day, I use the opportunity to hammer in some reminders for myself with regards to my love-hate-relationship...
Friday, December 18, 2009
A friend and his guru friends
I heard this story from a friend of a friend. He was walking along Raffles city, on the way to run some errand when his broker texted him, saying that NOL is a good buy because of some news or some reports. Whether it's actual news or just rumors is not important, it's sufficient to know that there are some catalyst to trigger the price and he promptly told his broker to buy 10 lots of it.After he crossed a road, he met his friend, who is known...
Sunday, December 13, 2009
An uncertain world and its asymmetrical payoffs
I read a silly post about critical illness. That person commented that there's no need to get critical illness coverage because the probability of claiming such things are very low, to the tune of 5% during their working life. A hospitalization and surgery plan (H&S) is enough. I disagree fully with the comment that having a low probability of claim means that there is no need to cover for it. I shall not comment on whether a H&S plan is...
Monday, December 07, 2009
The blind men and the elephant
This is probably one of the strongest post I'd made on the TA vs FA topic. If you feel offended, I'm sorry.When I started out in the market, I had no clues what is FA (fundamental analysis) and TA (technical analysis). I basically just buy based on broker's reports and hearsay. I remember scanning through CNA forum everyday to pick out those hot counters that people are punting on. Eventually I noticed that the top 30 volume in sgx are these weird...
Saturday, November 28, 2009
An individual as a private company
I've been toying around with the idea that you can treat an individual financials as though it belongs to a company. Long time ago, as I was learning how to read financial statements - those pesky cash flow statements, income and balance sheets - I didn't realise that reading those are similar to an individual's statements. Let me illustrate:Suppose I earn 100k in a year, but spent 70k, thus my savings would be 30k. Isn't this similar to a company with revenue of 100 mil in a year, 70 mil spent on costs, leaving 30 mil profits? Here's the interesting...
Tuesday, November 17, 2009
My 50k challenge
I've recently completed my 50k challenge. What's that? In the beginning of the year, I wanted to save money to complete a few short term goals that will commence in 1-2 years time. It's stated in this post here. Well, a few things had changed since then, but the challenge of saving 50k by 31st Dec 2009 remained.I'm very proud to say that I've done it already, and it doesn't take 12 months to complete that. It took only 10 months. This is not a post to hao lian how much I can save, but rather, I wanted to share the idea that if you really set out...
Saturday, October 31, 2009
What are you risking?
Someone sent me a newsletter that essentially is an advertisement to buy some diversified funds. Attached in the newsletter is this picture which I found it very interesting. This is, of course, not the first time nor the last time I’ll ever see this picture. I’ll like to take some time to think about the myths portrayed in the diagram.The diagram shows the investment risk pyramid, where the highest and presumably highest returns are placed right...
Thursday, October 22, 2009
Diversification
On the subject of diversification, there had been many many articles and books written about it. I'm here to contribute more noise to it and provide another dimension on that subject.
Diversification works very well when the market is in order. We all know that the market is fairly efficient, but not entirely so all the time. To assume that each and every individual is fairly rational when they evaluate their own buy and sell transactions is,...
Thursday, October 01, 2009
Newbie mistake in dividends
Let's say you have reit A with 10% dividend yield at $0.40, then another reit B with 10% dividend yield at $1.00, which would you buy?Reit A, because it's cheaper so with the same capital I can own more so I'll get more dividend? That's what I thought till I calculated it out. Here it goes:Supposedly I have $4000 to invest. For reit A, I can buy a total of 10 lots (4000/0.4 = 10,000). Thus, at the end of the year, I'll have a total of $400 in dividends. (0.40 x 0.1 x 10,000)For reit B, I can buy a total of 4 lots (4000/1 = 4,000). For this reit,...
Wednesday, September 23, 2009
The roaming treasure trove
Ever talked to taxi drivers?
I found myself in that exact position when me and gf took a cab back home. The cab driver is around 60 yrs old. He didn't look like that age at all, but perhaps the dim lighting hid his age well. My gf started to talk to him while I was basically slumping in the seats, having had a hard day of work. It was late, I just wanted to get back home and rest, so the last thing I would do is to talk to a stranger who had no interest in your life at all except for that half an hour or so that it took for the cab to go to your...
Thursday, September 10, 2009
Market happiness theory
There is a disparity between what I see and what the people in power are saying to us. It seems like we're in the midst of a major recession not seen since the great depression. The major economies are in trouble, banks had collapsed, inflation and worse - stagflation is looming, GDP is contracting, unemployment is rising, wage freeze wage cut...these are headlines of what I read in the newspaper. However, the reality seems to be far from the picture.I see people queuing up for property so as not to miss the opportunity to invest during 'recessionary'...
Friday, August 21, 2009
Crash is King
After reading W.E.B's op-ed, I have some thoughts to share. Cash is really not king presently. Look at the returns of the following possible places to park your money:All returns are quoted in per annum time basis1. Cash - savings accounts - 0.1% to 0.25% (DBS)2. Cash - fixed D - 0.1% to 0.7%3. Money market fund - 1-2%4. SGD treasury bonds - 15 yr bonds - 3%5. Stocks dividend - roughly 5% (don't kill me over this figure pls, I know there are higher...
Thursday, August 20, 2009
The greenback effect by Warren E. Buffett
August 19, 2009
Op-Ed Contributor
The Greenback Effect
By WARREN E. BUFFETT
Omaha
IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.
The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging...
Thursday, August 13, 2009
Savings in life policy
I was looking at Tan Kin Lian's blog. He was lamenting on the poor returns of life policy (meaning whole life insurance). He mentioned that it will breakeven after 15 yrs and the returns are somewhat in the range of 3% to maybe 4%. I've some thoughts about it and I would stress that this post is not to criticize him, but rather to voice out my opinions on the same matter.
I totally agree with Mr.Tan that whole life returns is not fantastic. Buying a whole life insurance is certainly not the best way to maximise your returns. But I think those...
Tuesday, August 11, 2009
Driving test
Arggh, the blogger posting site is acting weird again, so it's just plain text from now on...again!I passed my driving test last Friday, on 7/8/9 (nice numbers eh?). It was my second time taking the test and for those who had done it before, I'm sure you'll agree that driving test makes one a nervous wreck. I felt more relieved that happy after I'm over and done with it because I've promised my gf that I would pass once she passed. She passed...so the promise had to be fulfilled. How much did I spend for that piece of elusive paper?2.2k!! A total...
Sunday, August 02, 2009
Wake me up when september ends
For those who is hoping to jump into the market, perhaps you can take a look at history. I posted this article on the seasonal effect of STI since 1985.Based on historical data, average monthly returns for STI is pretty bad. But hey, the market is like a 1000 ml glass with 500 ml of water. It's half filled or half empty. It means either that you should start looking to re-balance your positions or you can start looking at some bargains for the things...
Friday, July 31, 2009
Phillips Money Market Fund
I started to put my money back into the Phillips money market fund (MMF) again. I withdrew the bulk of my money from it when the monthly returns for the MMF dipped to 0.053%. Since the money placed in MMF is not insured by the govt (unlike the bank deposits, which is insured up to 20k), I thought the miserly interest isn't worth the risk, so I placed the bulk back into my savings accounts (which gave me an equally miserably rate).Here's the returns...
Monday, July 27, 2009
Out of action
There's something very wrong with my blogger. I think from what I goggled, something wrong with singnet internet, proxy, blah blah...basically it makes the blogger posting site misaligned. I tried everyday since last Thurs to post something but I can't attach pictures.
I still can't attach any pictures now. BUT at least I can post something.
Looks like I'll be out of action till this thing recovers itself. I've no time to remedy i...
Tuesday, July 14, 2009
Reflections
I know I've not been blogging for some time, so here's my feeble attempt to do that.Blogging has always been a reflection of myself. Though I've not been writing, I've always been reflecting. So, maybe this blog article will just log in some of the things that I've been thinking about since the myriad things I reflect are too short to exist as an individual article by itself.1. Most dominantly on my mind is how to make more money. Ya, I sure know how it sounds like. But that's the truth. I'm still trying to meet my 50k target by this year end,...
Wednesday, June 24, 2009
How to be a millionaire
After reading so many books on financial freedom, I realised these are the ways to be a millionaire. Why are people so obsessed with being a millionaire? I'm not so sure, perhaps it's a milestone in their lives. For me, being a millionaire is not the most important thing to do. How about being able to spend a million for a start? Haha!
Ranked in order of ease, these are:
1. Start off as a billionaire, spend till you become a millionaire
I suppose...
Sunday, June 21, 2009
Bullythebear gathering
It seems like many people prefer sat 10 am to 12 noon. The venue proposed is actually Tea Chapter. You can click on the site here to view it. However, it opens at 11am.I suggest we meet at 1045 am on 27th June, sat, then by the time people comes streaming in, it'll be just nice. They sell some little snacks there too :) I think the gathering will take 2-3 hours.IMPT: Since the response is not warm, I think we'll postpone the session to future date ...
Friday, June 12, 2009
Polling time
Trying to arrange an outing in a tea house recently, so need some feedback from the regulars. Can you please post in the comments:1. The day of the week which you are available eg. Fri or Sat2. The time of the day which you are available e.g from 11am to 3pm.The venue should be the place I mentioned last time, no need to mention it here again. If you're unsure, can always ask those in the cbox.I'll try to arrange it ...
Friday, June 05, 2009
How to motivate people
First of all, a disclaimer. If I really know how to motivate people, this will really be my ticket to financial freedom. To motivate someone, you really need to understand both the science and the art. I've been doing this for 6 years, with varying results. Still trying... Broadly, to motivate people you have to maximise their pleasure and minimise their pain. I'll try to include accompanying examples. Where applicable, I'll use a common example to illustrate the finer points. The example is this scenario where you are bringing your kid to the...
To sell or not to sell?
Do you ever wondered about this - Imagine you have a stock which you had bought at $1.20. The price now is $1.80. It gives out dividend (not guaranteed, of course) at a rate of 5 cents per annum last year (dividend yield of 4.2%), with possibility of increasing its yield every year. Will you sell the stock for capital gains of 60 cts (1.80 - 1.20 = 60 cts) but forsaking 5 cents or more dividends forever?Here's a few ways to valuate this:1. Assuming...
Saturday, May 23, 2009
Disgusting Pac Andes
Pac andes just threw a grenade towards my direction. Make it 2 grenades. It got me hot and bothered!1. First grenade - they are issuing rights on a basis of 1 rights share @ $0.15 for every existing share held. The rights come with detachable warrants, with an exercise price of $0.23 each to convert to 1 ordinary share.Hey, didn't pac andes do a rights issue in 2007 before? And they are doing it again? C'mon...are you so pressed for money to keep asking shareholders to part with their cash?? It's not enough to dump shareholders with rights issue,...
Tuesday, May 19, 2009
How much to save to retire
I was just doing some simple calculations to see how much I need to earn in my working life (assuming I have to retire at 55) in order to sustain myself only till the end of my life. I've a average monthly expenditure of around 2500, all inclusive.So assuming I pass on at age 85,$2500 x 12 x 54 = $1,620,000I probably need this much money now in order to stop working yet be able to sustain my lifestyle till 85. This 1.6 million of course do not include family, or any other commitments that I incurred while I survive till 85...thus it's quite an...
Thursday, May 14, 2009
The father, the son and the donkey
KK shared with me this story in the cbox. I really thought it's a very important lesson to be learned from it. It is happening to us all the time. Since we learn different things from the same story, I'm not going to interpret but leave it open for readers to form their own thoughts about it.----------------------------------A Man and his son were once going with their Donkey to market. As they were walking along by its side a countryman passed...
Friday, May 08, 2009
Wordle here wordle there
This is another wonderful piece of art form I found from PG's website. Indeed very fun - I spent a few hours playing with it just to see the different combination that comes out.Here's a wordle of the books I've read so far this year. The bigger the fonts are, the more times it occurs in the titles of the books I've read :) Have fun trying, it's found here!See? I've read a lot of books on millionaires and a lot of them have the words 'Buffet' and...
Thursday, May 07, 2009
Top-down approach in investing
I usually adopt a bottom up approach towards investing, so it's good to do a top down approach too, just to see the broader picture. I read this little book series (yes, finally completed everyone of them!) called Bull Moves in Bear Markets by Peter Schiff and in it, there are a very investment themes to take note of. Basically the author is very bias towards the near term future of US, notably because of the high amount of debts that it is mired...
Wednesday, May 06, 2009
Microsoft Live Writer review
After listening to what PG had mentioned with regards to my time saving article recently, I decided to adopt and download the free Microsoft Live writer. It's actually a very cool piece of software and I'm testing it right now as I type this article. In the past, I used to type my blog on Microsoft words then cut and paste onto the blogger site, but it seems that this cool piece of software can publish straight to blogger! I can even see how it...
Monday, May 04, 2009
Ways to save your time
As time gets more and more precious, I wondered how else I can do to squeeze more time. Everyone gets 24 hours a day, but some people wasted a good part of their time doing things that are not aligned to their goals or not pleasurable to themselves – in order words, their time got ‘robbed’ by others.Here’s a few ways for me to squeeze more time to really do the things I want to do:1. Blog my articles in Microsoft words first, then cut and paste...
Tuesday, April 28, 2009
Make me an offer I can't refuse!
When we’re talking about investing, what are we actually looking for? The concept is actually very simple. We’re basically looking for a company that fulfills the following:A company that earns the most stable and highest earnings over the longest period of time, selling at a cheap price.(You can replace ‘earnings’ by ‘dividends’ for those who are looking more towards income)While the concept is easy, the execution is certainly not. For example, what is meant by cheap? Am I talking about the cheapness of the price with reference to the past prices,...
Wednesday, April 22, 2009
What I learnt from Mafia wars
After playing the facebook application - Mafia Wars - for some period of time, I've come to realise a few truths in life. You can really learn a lot of serious stuff in games, if you played it seriously enough. I'm so serious to even put in a spreadsheet the various yields one will get if one invests in different kinds of property.Here are the truths in life that I realised by playing the game:1. You need friends around you. Having many friends...
Tuesday, April 21, 2009
China milk quarterly tabulation
I've some time at hand to crunch some numbers for China milk. I've always wanted to do that but never really got around to doing it. Here's the figures:I didn't read through the whole annual report nor its business in details, so let's do it another time then. Here's a few thoughts:1) Despite the s-share saga, there are some s-shares like China milk whose business are still very sound and the debts are not stacked sky high. A cursory look at the...
Monday, April 20, 2009
Hongguo FY08 results analysis
Hongguo released their FY08 results quite some time ago, and it’s only now that I’ve the time and resolve to really sit through and pore over it in detail. Overall, it was quite a disappointing 4Q result – not terribly bad nor excellent, just so-so. It didn’t help that Hongguo did not declare dividends for FY08 too, presumably to conserve cash and stay liquid in this hard and trying times. I’ve been waiting a year for their dividends in vain.Here...
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