Sunday, November 05, 2017

Migration of email

I read from Investingmoat's article here that Yahoo finance is not functioning anymore, hence it affected the spreadsheet to track one's portfolio. I knew this would happen one day. Yahoo finance used to be my number 1 get to site to get things on finance, but after Yahoo had been bought over, things just started to break apart at the seams. After yet another series of email hacks, I finally threw in the towel and said my goodbye to the very first email that I had for 20 over years.

I knew it's going to be somewhat of a major operation to switch email, especially one that I had used for so long. So I listed out a couple of steps to migrate over:

1) Change and inform all the email address in websites that I follow

I have last pass, which is a password management website, so this step is a breeze. I just go to each and every website that has my yahoo email registered under them, and change the email address there and then. There are some websites with accounts tied to email address, so unless I'm prepared to open a new account, I've no way to change it. I guess those are a rarity. No choice. Despite yahoo being my main work email, I didn't email all my contacts with regards to the changes. Unlike changing a handphone number, I think this step is not necessary.

2) Update and change every email that you received for the next 2 weeks or so

There are bound to be some website that I've missed out, so for the next 2 weeks or so, every email I received is updated to my new email address. There are some sites that send less frequently, so I guess those are by default not urgent enough to affect me. It's okay to miss those.

3) Keep track of the old yahoo email, but don't use it for future correspondence

Use the new email to respond to any email you received from the old yahoo account. After a while, you should get lesser and lesser email from yahoo, which is the whole point of this exercise. But I will still track this account. If you're a signaller in army, it's just like putting this yahoo 'channel' in 'scanning' mode. You use one email but you scan several. And oh, I'm nostalgic. Once every blue moon, I like to go to my sent folders in yahoo and see what are the things that had happened in the past. I see it like the facebook's memory function, or just simply a time capsule where all my memories are stored digitally somewhat in my yahoo email. I'm sentimental like that.

That's it. Those steps should allow you to change the most urgent ones first, followed by the next tier of urgency and so on.

Before you jump to another email, you might want to consider the longevity of the company. Back in 20 yrs, I didn't expect yahoo to go bellyup like this, but hey, it's still a better bet than some of the smaller internet companies I suppose. I migrated over to Google if you must know. I think Google stands the best chance of serving me for the next 20 years or so I hope.

Monday, October 23, 2017

Debut of the Wizard and the Fighter-rogue

The four of them stood at the cavern entrance to the mythical beast. They had sailed great oceans and climbed ragged mountains to reach where they are standing now. The wizard took out his spellbook and did some last minute memorisation of the needed spells, while the fighter-rogue adjusted her utility belt, double checking that all the tricks of her trade are right where they are. Both of them are anxious. They looked at each other’s eyes, thinking of the day where they got married and had marched down the aisle, hands held together. The feeling is much the same – a mixture of fear and anticipation. The other two fighters – both sisters – drew out their swords and tightened the leather strap of their shields. The husband and wife team are level 10 while the two sister fighters are level 1. The latter are recruits from the tavern at the bottom of mountain and they joined the party without hesitation when they learned of their quest.

Out of the cavern came a deafening roar. As the party forms a semi-circular formation at the entrance, a furry creature came out of the entrance. It was a kitten, complete with its big eyes that can melt a thousand hearts and more.

The two sister fighters laughed at the ‘beast’. So this is what they had been toiling for the past week? They unsheathed their swords and walked towards the kitten, which is now rolling on the ground, innocently licking its paws. The wizard shouted out a warning to both of them, but they seem enchanted by the cuteness of the kitten. The younger of the sisterly fighters squatted down to pat the kitten. Before she even touch it, she was gone. A distant shout can be heard echoing down the mountain. A swipe by the beast, too fast for the naked eye to see, and too sudden for the mind to phantom, had thrown the fighter off the cliff! The elderly sister was stunned by the sudden attack; the beast had drawn first blood! She tried to unsheathe her sword but before an inch of the sword is lifted out of the scabbard, she too was gone.

The fighter-rogue had sneaked behind a boulder while all this was happening, and was disappeared in plain sight from the beast. Crouching and moving as silently as her training allowed, she opened her utility belt and threw a potion at the beast. It contained all 120 ml of pure holiness from the twin peaks of Breastopia and it is said to induce sleepiness in the beast. As the glass vial breaks and the white liquid spills out, the beast lapped up the liquid. The beast seems to be satisfied. But with a loud and sudden burp, and the beast screams out a deafening cry again.

As the fighter-rogue was covering her ears to block out the noise, the wizard gripped his staff and shouted a word of power. With a bright flash of light and smoke, he had summoned the ancient guardian spirit “Grandma” to deal with the beast. As the smoke dissipates, a silhouette can be seen. An elderly figure walked out of the smoke and smiled a toothless grin. Grandma did not wait; she waved her hands and cast Taunt on the beast. It worked! The beast was eyeing Grandma with its big beady eyes, and ignoring the rest of the party. The fighter-rogue took the chance to quaff down a potion of recovery while the wizard prepared another spell. Everywhere Grandma moves, the beast followed it like the little kitten that it appeared, but it seems that the spell is going to end soon. The beast can be seen fighting off the spell as it struggled, shaking its head occasionally to somehow shake off the enchantment.

The fighter-rogue opened her utility belt again and took out a pacifier of ease from the Forest of Avent. By then, she has sneaked close enough to the beast to push it straight into the mouth, and it was just in time as well because Grandma dissipates like a smoke and fades into thin air, just like the way it had materialised into this plane. The magical pacifier seems to work; the beast quietened down for a while. The wizard waved his hands in intricate patterns of power. At the right moment, he threw a figurine of a green dog and soon another guardian spirit was summoned. It’s the fearsome Scout the green hound.

This is the figurine of Scout the green hound, needed to summon the guardian spirit

The hound howled into the cold mountain air and magical notes can be heard. The wizard shouted to the fighter rogue to cover her ears, because the howl can cause an 5 by 5 area effect of sleepiness. As for him, he is immune to sleep spells; he had problems sleeping as it is. With the pacifier of comfort and the sleep spell howled by the hound, the beast appeared lethargic and slumped on the ground.

The battle is over, at least for tonight.

Thursday, September 21, 2017

Getting the most out of a Rights Exercise

Just got news that Capitacom trust (CCT) is issuing rights to acquire Asia square towers 2. It's a 166 per 1000 shares @ $1.363, renounceable rights issue. This means that for every 1000 mother shares you hold before it goes ex-rights (XR), you are entitled to 166 shares of rights, which you then need to go to the ATM before a dateline is up to subscribe to it by paying $1.363 per right shares.

Here's the timeline for the major events of the rights issue:

I've been answering a lot of posts on rights recently, especially on Investingnote, so I thought I might want to consolidate all the stuff and recap all the posts I've made on the rights. I don't think I have updated my information on rights exercise in this blog ever since SGX implemented the 100 shares board lot instead of the 1000 shares. 100 shares makes it less complicated actually; less things to hack.

Basic rights information

Before going into the strategies part of rights exercise, let's have a breakdown of what to expect. The timeline for rights goes like this:

1. You get announcements of a rights exercise. Pay attention to the x per y shares @ z price. "z" is the subscription price for the rights exercise. For example, a 25 for 1000 shares @ $1.25 means that for every 1000 shares of the mother shares you hold before XR, you are entitled to a 25 rights that you need to subscribe at the atm for @$1.25 per rights price. Take note that upon subscription of the rights (by paying $1.25 per rights), you are converting the nil paid rights (so called because you haven't subscribed to it; you are just holding the rights to convert to ordinary shares) to ordinary shares.

nil paid rights => before you subscribed by going to atm for it
paid rights = ordinary shares => after you go to atm to pay for the subscription per rights shares

If you don't subscribe to the rights before a certain date, the rights will expire worthless.

2. There is "renounceable" and "non-renounceable" rights exericse. Sometimes non renounceable rights exercise is called a "preferential offering". Renounceable rights means that the rights can be sold off if you don't want to subscribe to it. This means that there will be a nil-paid rights trading period where you can sell off your nil paid rights. Note that if you don't want to subscribe to the rights by going to the atm, the rights will expire worthless. I can't stress that enough. If you don't want to subscribe, go and sell your nil paid rights during the nil paid rights trading period. For this CCT rights exercise, it's renounceable, so the nil paid rights trading period is from 4th Oct 2017 to 12th Oct 2017. During this period, you can sell off your nil paid rights or buy more if you want.

The mathematics of it all is described elegantly below:

Nil paid rights price + Subscription price = Price of mother shares after XR

The subscription price for this cct rights exercise is 1.363. Let's say upon XR, the price of cct mother share is at 1.450. The nil paid rights price should be trading at 0.087 (1.45 - 1.363). If the price of the nil paid rights is way below 0.087, then the logical question to ask if this: is the mother share overvalued or the nil paid rights undervalued? It presents an arbitrage opportunity here. But this is advanced technique to play with rights, and it's highly advisable for newbies not to do it unless you know what you're getting into. Don't want you to get into a quagmire of doom.

Link on difference between preferential offering and renounceable rights: here

3. Know how many entitled rights you have. You can calculate yourself by dividing your shareholdings by 1000, round down to the nearest integer and multiply that by 166. For example, you have 5500 mother shares before XR, so you'll be entitled to 5500/1000 = 5.5 = 5, then 5 x 166 = 830 rights shares entitled. ** If you don't want to calculate manually, or want to confirm, wait for the Offer information statement (OIS) to be sent to you. In it, there'll be a circular on the whys of the rights exercise, and the how to the different scenario where a shareholder can subscribe to the rights. Most important, there will be a form where they will tell you explicitly how much rights you are entitled to. You can either fill the form, send a cheque and post it to them for rights subscription, or just ignore the form and go to the atm to subscribe for the rights. In the above example, you are entitled to 830 rights @ 1.363 each, so you have to pay $1,131.29 to convert the nil paid rights to ordinary shares. And you have to do so by 19th Oct 2017, if not it'll expire worthless.

** update on 22nd Sept 2017: I asked my broker whether we will get fractional and proportional allotment of rights, meaning that if we have 900 shares, do we get (900/1000*166 = 149.4) 150, 149 or 0 shares? He said we will get 149 and not 0, because it is proportional, and 149 and not 150 because it is rounded down, not up. I learn new things everyday.

4. You can also subscribe to excess rights above and beyond your entitled rights. Using the above example, you have 5500 mother shares before XR, so you are entitled to 830 rights shares. Beyond that, you can apply for another 1000 excess rights. In total, you have to pay (1000+830)*1.363 = $2,494.29 for all the rights. You will definitely be able to get 830 new shares, because well, that's your entitlement. But for the excess rights, preference will be given to round off odd lots and the rest is luck. The issue here is, after the new board lots is changed from 1000 to 100 shares per board lot, it's unclear whether the rounding of odd lots is still based on 1000 shares or the newer 100 shares. If it's based on 1000 shares, it's likely you will get 1000 - 830 = 170 excess rights, minimally. If it's pegged to 100 shares per board lot, it's likely you will get 900 - 830 = 70 shares minimally. I am for the latter, not the former.

How much to subscribe excess? I think if you hold very little holdings before XR, you can potentially double your holdings by getting a lot more excess rights. Let's say you have only 1000 shares, you'll be entitled to 166 rights shares. Rounding to 200 shares will likely give you another 34 excess rights. But you might get another 500 shares of excess because you're lucky and you have small holdings. So in total, from 1000 shares before XR, you might get 1000 + 200 + 500 = 1700 shares, of which the extra 700 shares, 166 is your entitlement, 34 is for rounding off odd lots, and 500 is just that lady luck shines upon you. 700 shares @ $1.363 each will lower your average price way below the theoretical ex rights price (TERP).

If you have much more holdings, then don't think so much lah, just put 1.0 times the holdings before XR. It's unlikely you will get excess rights beyond the number of shares you hold originally. Let's say I have 5000 shares, I'll be entitled to 830 rights shares. I'll just apply 5000 - 830 = 4170 excess rights, so that in total, I'm applying for 5000 rights. Likely you won't get it all, but you'll hit some and the rest will be refunded back to your account.

Link to step by step guide on using ocbc atm to subscribe for rights: here

5. Check for the rights shares to come in. For this cct rights exercise, the expected date of commencement of trading for the rights shares is 27th Oct 2017, 9am. The expected date of crediting of rights units is on 26th Oct 2017. I'll check the CDP account around night time to ensure that the rights shares are credited into my account if you're using non-custodian brokerage. If that's slow, try checking the refund in the bank account where you applied for the rights. From the amount of money refunded to you, you can back calculate to see how much excess rights you got. The slowest confirmation is after a few days, you will get a snail mail of the rights shares you get through your physical mail box.

From fastest to slowest:

a. Check refund of funds in same bank acct linked to atm during subscription
b. Check CDP for stock holdings. Will need a pin number from them, so go apply beforehand
c. Check physical mail box for snail mail confirmation

Strategies for rights player

Now that the basic is covered, let's talk about strategies. There are strategies for existing shareholders who already holding shares before the rights exercise is announced, and there are also strategies for people who want to take advantage of the rights to get into the company at a favourable time. These are the wannabe shareholders. I must say rights issue favour the latter rather than the former. That's just the way it is.

I further define two types of player: the casual and the advanced one. Casual ones are usually newbies, but need not be, and quickly wants to get over the rights issue as soon as they can. Advanced players want to hack the rights and get a more favourable price, meaning getting their average price below the theoretical ex rights price (TERP).

w: no of mothers shares before XR
x: no of rights shares successfully subscribed
y: price of mother shares before XR
z: subscription price of rights shares

TERP = [(w*y)+(x*z)] / (w + x) 

As you can see, to get a lower average price, you need to get much more excess rights beyond the rights ratio. If the rights ratio is 166 shares for every 1000 shares held before XR, to get a lower price than TERP, you need to get more rights shares than 166.

Link for casual rights player: here
Link for advanced rights player: here

For existing casual shareholders:

a. Just wait for offer information statement (OIS) to come in. It'll inform you of the number of entitled rights shares you have.
b. Go atm and subscribe to the entitled rights
c. At the same time, apply for the excess rights. There's also a $2 admin fee charged by every bank.
d. Wait to see how much excess rights you get
e. Update your spreadsheet/program on your holdings

For existing advanced shareholders:

1. Sell all your mother shares before XR, buy back after XR and after the price drops lower than TERP
2. Buy more mother shares before XR and take adv of the drop in price, be entitled to more rights, apply for excess
3. Buy nil paid rights during nil paid rights trading period, esp when there are opportunities for arbitrage, subscribe to entitled and also apply for excess

* 2 and 3 can be combined, but make sure you know what you're doing

For casual wannabe shareholders:

a. Buy the mother shares before XR
b. Wait for OIS to inform you how much entitled rights you have. If you bought too close but still before XR, the OIS might not reach you on time. So calculate manually.
c. Go atm and subscribe to the entitled rights
d. At the same time, apply for the excess rights
e. Wait to see how much excess rights you get
f. Update your spreadsheet/program on your holdings

For advanced wannabe shareholders:

1. Buy in after XR, at or below TERP, and skip all the rights exercise
2. Buy in before XR, get your entitled rights, apply for excess

2a. To decide how many lots to get in, look at the table below:

Since preference is given for excess rights applicants to round off odd lots, and assuming that the rounding of odd lots is for 100 shares per board lot, it make sense to change the number of shares you want to buy before XR to maximise the odd lots rounding. For example, if you get 1000 shares before XR, you are entitled to get 166 excess. To round off to the next nearest round lots, you are almost guaranteed to get 34 excess rights (to round to 200 shares). Can we maximise that rounding so that you can get the best out of it?

I didn't show the whole table, but you need to get in 47,000 shares so that you can get 98 shares of rounding. But we haven't looked at the average price of all the shares, after including the rights exercise. No matter what price you got in (must be reasonable of course) for the mother shares before XR, the advantage of getting more 'guaranteed' excess rights for the purpose of rounding odd lots reach a diminishing returns after 5000 shares. For the above table, I use an entry price of 1.70 for the mother shares. You can see that there's a slight dip on the average price for 5000 shares.

But all these just to shave off less than 0.005 cts on your average price? That's why I don't do such hacks anymore. It's just not worth the time. In the past, where the board lot is 1000 shares, there's some savings to be had, but not anymore.

Just ignore this method safely, knowing that you are not going to hack a lot to get a lower average price using this method.

3. Buy nil paid rights during nil paid rights trading period, subscribe to entitled

* 2 and 3 can be combined, but make sure you know what you're doing

This should do it! The end-it-all guide to rights exercise for newbies and a good refresher for oldies!

Monday, September 18, 2017

3 buckets of time revisited

Haven't really blogged out any article for nearly a month because I was busy with work. It's my peak season now before I can have my well deserved rest towards the end of the year. This year is qualitatively different from any years that I've been through, but I will blog about such things when my work for this year truly dwindles down.

I want to talk about the 3 buckets of time and I've been spending quite a while thinking about it. I had written an article on it last year, here. Each day has 24 hours, and if we divide the amount of time we have daily by 3, each bucket of time will have 8 hours.

The first bucket is meant for sleep. That's like 8 hours down the drain. The second bucket is for work so that we can earn money to buy the necessary things needed for life, like food, shelter and a lot more beyond survival. That's another 8 hours down the drain. It's this 3rd bucket that I'm most interested in right now.

Before I had a child, my last bucket of time is mainly spent on the following activities:

1. Gaming
2. Reading
3. Shopping/cafe/walking around in malls
4. Exercising
5. Friends
6. Household chores

With a kid, my last 8 hours of time is spent on:

1. Family (and kid)
2. Gaming
3. Household chores
4. Netflix
5. Grocery shopping

I introduced to myself another sort of bad habit, which is watching Netflix. Gaming is still in the list of activities, but the quality and quantity of gaming is much much reduced. I only have a small segment of time to game, much less than what I would have without a kid. Reading is thrown out of the window and there's just no way to do it. At least not for now. It's not that I don't have the time, it's just that it's extremely tiring to do it, so I could only hope to vegetate myself in front of a tv binge watching on Netflix. It's a bad thing, I know, but until I'm still in survival mode and not yet in a steady state to move out of this comfort zone.

I suspect more and more, I would have to take some time out of my work and sleep bucket to increase my third bucket of time. I would increasingly have to spend more time with the kid, sacrificing sleep and work along the way. I think this might last for the next few years until the situation is stabilised but till then, any 'me time' would have to be reduced. I'm not complaining; there's joy in taking care of the kid. I think a lot of people don't want kids because they are not prepared to sacrifice personal time for another person, namely the child. It's a personal choice, so I'm not here to make judgements. But better to open both eyes to know the consequences of the decision. It's the worst case scenario to want a kid but not prepared to sacrifice, or not want a kid but not prepared to be lonelier in the future. Can't escape the cause and effect of actions.

But back to the 3 buckets of time. I think it ties in with the concept of frugality. I define frugality as the efficient use of limited resources, which also includes time. I've to think of ways to streamline my work flow and make it better. Somehow, in between all these, I also have to slot in time to do homework for stocks. Thankfully the two systems I implemented towards the end of last year is bearing fruit. I blogged about it here. I'm very used to the work flow now and I must say it saves me a lot of time. There's less time looking at my watchlist to see what stocks to buy, because I only do my homework once every week (more if needed), and I'll just stick to my plan.

We can't increase our daily bucket of time beyond 24 hours, but we can optimise and waste less time, and that's the best we can do, isn't it?

Tuesday, August 22, 2017

The 4 Seasons (part 2)

I wrote a article about the different seasons using the MACD (moving average convergence divergence) indicator here. In it, I talked about how the four seasons can be characterised objectively by looking at the slope and the positivity/negativity of the histogram. Let's see if we can replicate that into another indicator - the moving average.

There are a few kinds of moving average, and usually I'm using exponential moving average (EMA) because they are more sensitive to the latest price movement. Moving average should be drawn in a pair, one shorter and one longer term with the longer one being twice that of the shorter one. That means if you use 10 days MA, you should include 20 days MA as the longer term line. It doesn't really matter which days you're using, it could be 50/100, or 100/200, but for the purpose of this article, I'm using my 13/26 days EMA. 13 days EMA is my short term line and 26 days EMA is my longer term line, unless otherwise stated.

Here's the matrix:

I'll illustrate with an example: Singpost
(The red line is the short term line - 11d EMA and the green line is the long term line - 22d EMA)

Different stocks are like different countries in different hemispheres. Some are freezing in deep winter while others are sweating in hot summer. Some have longer summer and shorter winters, while others have longer winters and shorter summers.

Let's have a look at the different index:

DJI : after a prolonged summer, it's autumn now

S&P: autumn had given way to winter. The first snow just fell a few days ago.

HSI: It's still bright and sunny, but to the observant ones, some of the leaves on the trees are turning brown and starting to fall

Nikkei: strange weather phenomenon. Very long summer, a fake autumn, another shorter summer and a brief autumn, bringing us to winter now

STI: winter is coming (or had already come).

This is neither a rally to buy or to sell, it's simply weather reporting. I'm not even forecasting. Doesn't matter whether it's summer or winter, we just make sure we fatten ourselves during summer to prepare for winter, and do the necessary prep work to plant the seeds just when the last snow falls to prepare for the bright sunlight during summer.

Sunday, August 20, 2017

My little life coach

Time flies. My son is nearly 7 months old now and personally, it feels like I've had him for like 7 years. They say that the day passes slowly, but the years spin by fast. I totally agree. Each day leads to night and the night merges into day again, so while you're doing your routine and trying to get by each day, you'll realise that months or years had gone by without you noticing.

Now that the 'honey moon' period for being a first time father had died down, it's all about the daily grind. I think I spend a lot of time with him, but it's always not nearly enough. From a needy and helpless baby, my son has grown to become opinionated. If the milk is not nearly warm enough, or if you didn't hug him in a way that he is accustomed to, he will make his displeasure known to all within a 500 m radius. He is getting harder to take care, because he is less like a rag doll and more like a human now. When the day is bad, I'll remind myself this: would I rather a listless, unresponsive child for me to assert my will onto, or a cacophonous crying baby that is alive? Easy choice there.

He is getting heavier with all the tonnes and gallons of breast milk, expressed so painstakingly and patiently by his mother, and sucked through his tiny toothless mouth. My arms and back muscles are also getting stronger in order to carry him for longer and longer periods of time. The journey thus far might be difficult, but I always remind myself that my son will not be a baby forever. One day, he will grow out of hugging his not-so-cool parents and not wishing for one more kiss or one more bed time story. Everything has his own time and season, so dance in the rain while it's raining.

On reflection, I think everything about having a kid is antithesis to being financially free. Here's a list of things:

1. I get to work lesser hours because I need to spend more time on family. Less work less pay less savings. You can compound the lost savings @ 5% over 30 yrs and see how much you actually 'lost'.

2. My electricity and water bills rose up faster than STI over this year. It used to be about $100 to $120 per month, but now it's dangerously hovering around the range of $180 per month. That's like a 50% increase.

3. I'm such a shopper these days that I qualified for GOLD member for qoo10 for several months now. To qualify for a GOLD member, you need to spend certain amount and consistently. And that cost money. Babies consume a lot of disposables. I'm sure all the diaper, wipes and milk formula companies are smiling all day because they are earning money while my son eats, poops and sleeps all day.

The 'baby monster'

But these things no longer concern me. Loving and nurturing my son concerns me. I think if you're thinking about me, me and me, you're not ready for a kid. It's nature's way of doing a filtering and selection process for parents, sussing out those that are not ideal to take care of the helpless, pinkish little humans. Only crazy irrational people who don't mind delaying their financial freedom plans by sacrificing their income and ramping up their expenses will want a kid. And most importantly, those same irrational human being must have a spirit of self sacrifice for something other than yourself (you can argue that your kid is but a vicarious extension of yourself, of course, but that's a different fight for a different day). But now and then, nature screwed up and let certain people slip through the cracks, to the detriment of their child, and perhaps their parents as well.

If you can survive the financial bombs that are sure to hit in your general direction, and also survive the daily grinds of taking care of the kid, you get to taste the sweet fruits. You get to see the world in the eyes of the child again, but this time, with a matured and hopefully reflective mind. You will join your child to giggle at ordinary things viewed with extraordinary innocence. Every sunrise marks a brand new exciting day of discovery and adventure, shortened only by sun set. You'll see the really important things in life - a heart to love, a hand to hold and a warm megawatt smile. Those simple things will take you all the way up the highest mountain and down the deepest sea and back.

Come to think of it, I think it's a fair trade. I feed, shelter and nuture my son, and he in turn teaches me life lessons.

Monday, August 07, 2017

Surviving vs Thriving

There's a difference between surviving and thriving. When you're surviving, you care only about the bare essentials to maintain status quo. When you're thriving, you strive to exceed and improve the current situation. Both requires different mentality and preparation. I share with you some examples in our daily lives:

1. Taking care of children

I think I'm still at the surviving mode. I feed, shower, change and make sure the baby is alive. But I wouldn't go so far to say that I thrive yet. I'm essentially doing the basic things. Now that I'm used to the routine and the demands of taking care of a baby, I must say that it's getting comfortable. Not comfortable in the sense that it's easy, but comfortable because I'm habituated into the different task and I'm reasonably skilled in the different skillsets needed. It's time to go to the next stage where I thrive. I've been reading and researching on the various things to stimulate the baby so that it will have maximum synapse connections. It will no doubt demand even more energy and effort that I'm currently putting, until I'm used to it, so at least for the initial stages it's going to be hard and tiring.

2. Portfolio

We always think that when the crisis hits us, we're going to make it out of it like Alibaba. But it might not be the case. To survive a crisis is hard enough, because usually more than one bad thing will happen. You might lose your job for example, so are you sure you can put in your investible cash into the market and watching it sink lower and lower and lower? Are you sure you won't need it for other things? To thrive after a crisis, you must be psychologically AND financially prepared for the downturn. You must have psychological and financial reserves. I wasn't prepared in this two aspects the last few rounds, so hopefully I am in the next coming one.

3. Work

We can survive our work by doing the bare minimum requirements not to get fired. But to truly thrive in it, we must put in the extra effort and take the initiative to do things that we are not in our pay grade yet. We do this to improve and also to prove to others that we can take on higher responsibility, which hopefully, comes with a higher pay as well. It might not be just about job scopes, but it could be relationships as well. Are you just surviving on the current relationships with co workers and your bosses, or are you thriving? If you're wondering why others are always getting promoted over you, why others are favoured over you, maybe you are merely surviving in their eyes.

Those are a few examples of surviving vs thriving. But all of these examples have the same underlying commonalities. They are:

1. To thrive, you must first survive. 

2. You must have something steady in your lives before you can take the necessary risk in order to thrive. 

3. You must be prepared to put even more effort and energy to thrive, because the game rules for surviving and thriving is different.

The 1-2-3 steps can be looped in a feedback cycle for improving any aspect of your life. First you learn how to survive. You master the survival skills needed, and after a while you no longer need to think or use much energy. That's when you know you reached steady state. You're ready to learn how to thrive, if you so wish. Not everyone wants to go on the next stage and it's perfectly okay. Next, you need to unlearn all you learned during your survival state and learn how to play the big league game of thriving. After a considerable time, you again reached a steady state where you don't need to expend much energy and effort. That is the new state of 'survival'. This process keeps looping 1-2-3 continually until you stop wanting to go further or you can't master the necessary skills to go up one level or you just run out of life.

How much effort do you need to do all these? Some people count it by hours, so citing some expert out there, it requires about 10,000 hours to reach a certain level of mastery. I prefer it count it by the sacrifice needed. To reach mastery level, you need to be sufficient obsessed over it to sacrifice everything in the midst of learning. Maybe it's called passion, but I find it too vague and over-used. Everyone is using 'passion' to talk about some things that they just acquainted with in the last 5 minutes.

Passion should be defined as wanting to thrive in something by sacrificing your energy and time to the exclusion of everything else. Most people wants the mastery without the sacrifices, and it can't be done. Maybe they don't want it badly enough. Everyone wants to go to heaven, but nobody wants to die.

Wednesday, August 02, 2017

CDL Htrust rights are out

The CDL H trust rights are out. I applied with DBS atm and I've received the refund this morning already.

I don't have any mother shares before the whole rights exercise and before it goes XR, I bought 3000 mother shares at $1.645 each. My entitled rights for this 5 for 1 rights issue @ $1.28 means that I have 600 entitled rights. I applied for excess rights and got 500 shares. In summary:

Mother shares: 3,000
Price of mother share before XR: $1.645
Entitled rights: 600
Excess rights: 500
Total rights: 1,100 @ 1.28

Average price before comms: $1.547
Average price after comms: $1.55411

Since the price of the ex rights mother share is now at $1.610, it's already in the money. Damn, I love entering reits/trust when they exercise rights. Good quality ones will bounce back within months.

Tuesday, August 01, 2017

The 6 Errors in Month-end Accounting

Every first of each month, I'll do my month end accounting for the previous month. This means that I will do a bank reconciliation to make sure that all the accounts are properly tallied and accounted for. Today, when I was doing the same thing I had been doing for years, I realised I had a surplus of $1k. That is, my actual cash that I counted had about $1k more than the amount that is reflected digitally. This is usually a happy problem for some, but for me, any amount more than $50 is a huge major red flag. That means there's some major discrepancy somewhere.

Usually the problem lies with the income part. I must have forgotten to record some cash that I received. In the midst of trying to find out where the error occurred, I discovered yet another major error. I had 3 records of my income, and all three had to tally each month, if not it's another major red flag. Somehow, I had not received cash, but I had in my records that I had received it, and after some investigation and confirmation from the affected parent, I found out the error. It was rectified immediately and all records are tallied now.

This is all thanks to YNAB. If not for that software to do double entry accounting, I probably wouldn't have discovered the error. That brings me to the gist of this post. What are the possible errors that might happen when doing my month end accounting?

1) Error of omission

This is exactly what happened to me. I received cash, but I had omitted the transaction records in my books, so my actual cash holding is more than what my records say I should have. This is quite common. Oftentimes, it'll be some purchase of food or drinks that I had forgotten to record down, but if the difference is only a few dollars, I usually ignore that. It's not a major flag unless it's more than $50.

2) Error of commission

This is when you record things in the wrong account. For example, I draw out money bank A, but I recorded it as bank B. I've encountered this before too, and it's fairly easy to spot. Both accounts will be wrong by equal amount, so a little investigation will shed the light on where the problem area is.

3) Error of original entry

This is when you are supposed to record $11.60 but recorded $16.10 instead. If it's not a big amount, it's actually okay. But if it's a big amount, it's going to be hard to check the records. Especially when there are so many records on food transactions for me. Without the original receipt to counter check, I'll say it's quite impossible to find out, especially if it's cash transactions. Thankfully for bigger items that cost more, I usually use credit card, so there's already a paper trail.

4) Compensating error

This is when you received $500, but you keyed in as $300. At the same time, you also spent $400 from the same account but keyed in wrongly as $300. The positive error and the negative error cancelled each other out. This means that while the balance sheet is balanced, it's wrongly balanced. So far I've not had such errors. Or maybe I haven't discovered it yet...gasp.

5) Error of principle

This is fairly common because of auto-correct in hand phone. Sometimes when I spent $10 in my wallet, it'll deduct $10 from my bank account instead of wallet account. That's an error in principle. Usually a month end bank reconciliation will discover such errors.

6) Error of complete reversal

This is when you are supposed to take out $10 from account A and put into account B, but you keyed in that you take out $10 from account B and put into account A. This is not an issue, because the smart YNAB software will prompt you when such things happen. At least the obvious ones.

Thursday, July 27, 2017

A second that lasted for eternity

There's so many things to take picture of and to take videos of, especially when you have a kid. There are kind advice to take more videos and pictures so that you can remember those special 'first' that happened for your child. I remembered that when I was younger, I don't really have much photos to show for. But at the very least, I have some photos to show for. My parents had a lot lesser, and my grandparents even less so. Perhaps each major milestone, they will have a family portrait or so. Those formal, all suited events to commemorate someone's wedding or graduation. Significant events. These days, we take pictures of every little inane thing that happened in our lives. More is not more. As we have more pictures, each picture takes a smaller share of the significance of the collective pictures taken. It's like the last squeeze of the water colour pastel; it's not enough, so you add more water to dilute it so that you can paint the sky blue. But you ended up with a shade of blue so diluted that it's like a copy of a copy of a copy of the real azure sky.

Does having more pictures mean that the next generation will have much more things to remember their childhood? Not necessarily so. A picture or a video can sometimes distract us from enjoying the moment as it happens. Imagine you are looking up the night sky to watch the national day fireworks. In order to enjoy that ephemeral moment for an eternity, you look away at your pocket, whip out your phone, turn to the camera app and look at the fireworks through the filtered lens of your hand phone screen. That picture you took of the fireworks is not the fireworks you actually experience without the distraction of taking a photo. First of all, it's a series of static pictures and is no where near what you can observe directly. Secondly, even if it's a video, there's the missing boom of the fireworks and the accompanying echoes that reverberate through your whole being, or the strange mix of your sweat and the smell of the smoke as the fireworks explodes up, lighting the night sky. Or the feeling of holding the hands of your loved one as you share this special moment together. It's just different from watching a grainy video taken from your phone.

Before my son was born, I was musing over whether to get a good camera to take pictures and videos of our shared experience. I decided not to, because I know I'm not such a person. In retrospect, and on hindsight, I think I made the right choice. I'm know that I'm not such a person, and I also know that I don't want to be such a person. The former is who I am, but the latter will define my future self and chart my destiny. Choice is important. Even if the everyone is doing it, doesn't mean that I should do it too. Why? Choice.

I'll still take my videos and pictures of my son, who is getting more vocal by the day. I'll still take pictures of his silly grins and videos of his funny times. But those are insignificant moments. For the really significant moments, like watching the fireworks with him under the night sky while holding his tiny hands, and watching his bright brown eyes brighten just as the fireworks exploded into a dizzying display of lights and sounds, I know I won't be whipping out my hand phone. I'll be busy enjoying the moment, soaking in the sight and the sound, and committing it to memory.

When I'm old and my vision fades together with my hearing, I know I'll still be there, holding his tiny hands, watching and hearing the fireworks together, like it's my first time.

Tuesday, July 04, 2017

We all have our own poison

What's your poison?

Everyone has one. For some, it could be expensive branded watches. For others, it could be handbags with Italian names on it. But a poison need not be expensive things too. It could be something that is 'costly' to your free time, like painting or doing models of tanks etc. It's just something you would willingly go to in your free time.

For those who fuel their poison by spending a disproportionate amount of their salary into it, who are we to say that they are shallow and materialistic? They are not spending our money and they certainly not seeking our permission for it. However, I think as part of the bigger financial bloggers group, we tend to disapprove of such wanton spending. You must save a portion of your salary. Oh, you must separate between needs and wants clearly.

But there is another extreme, someone on the opposite side of the fence. Someone who knows only needs and do nothing to satisfy his wants. It's all the future that matters, and all the spending follows strictly according to plans in order to hit this milestone by that age. Maybe for these people, their poison is an insidious one - to be proud of their own frugality by thumbing down on others. It's something that I hate very much whenever people are talking about hitting x amount by y age. They treat savings like a sports, where everyone is competing with each other by subtle hints of how much they can withstand hardship and control their wants. What's the reward? Boasting rights.

I see financial independence as a more holistic ideal though, not just the cold hard math. To really reach financial independence, you must be free of money. Usually people take it to mean that they have all the money they need for their expenses without having to work ever again. But I think being free of money means we no longer treat money as a symbol to accumulate, to show off, or to satisfy some inner psychological needs, but to see it as a means to exchange it for something that serves a greater good. In that sense, a millionaire who holds his money so tightly is as equally shackled as a indebted man who spends all his money on material goods. Both are still controlled by money, but each is satisfied by different aspects of money, with the former treating money as a security blanket and the latter treating it as a power and status symbol.

Some people are so poor they only have money.

But let's get back to our poison. I used to spend quite a lot of money buying guitars and amps. I'm not that good enough to justify those purchases, so I inherently know it is wrong. After dabbling with it so some years, I hardly touch them now and they are all lying in cabinets and shelf, acting as re-purposed dust collector. Oh, before that, there was a gaming phase where I spend a lot of money buying sega games. Back then, I thought that if only I could have more money, I could spend the whole day gaming away without a care in the world. Little do I know that years later, when I have the means to fund my gaming adventures, living vicariously as an elf or a wizard blasting away at demons that threatened to destroy the world, I no longer have the time to play. How many years of my life had been spent chasing digital gold coins and collecting unique, digital swords, staves and shields?

While I don't regret the time and money spent on such poisons (oh, they are such joy), one must wonder what is it that I do love so much currently that will inevitably walk down the same path as my old sega games and my dust collecting guitars?

Do I want to continue doing it now, knowing that my passion for it might run out in the future? Or should I abandon it and embrace minimalism? Could minimalism be, by itself, a re-purposed dust collector in the near future?

That is a thought worth thinking about. Perhaps, like all medicines, the dosage makes the poison.

Wednesday, June 28, 2017

Bigscribe mega event of the year: Investors Exchange 2017

Bigscribe is having a mega event, called Investors Exchange 2017, this July. Those who know Bigscribe and had attended their value for money talk would know that everyone takes away something of value from attending the talk, so this mega event is no difference. Here's the line up of the speakers and their topics:

Teh Hooi Ling - Strategies for successful equities investing

She is a former SPH journalist and author of the "Show me the Money" series. She has her own fund now, called Inclusif Value Fund. I read her books and loved her articles on straits times, and found her to be sensible and always a delight to read.

Xeo Lye - Identify market trends the George Soros way (writes on Xeolyenomics blog)

I know him as a great runner and the designer and founder of the financial/economics game Wongamania. He is a macro person and has very deep knowledge of economics and how to apply it to investing on an individual level.

Vina Ip - 7 Deadly sins of Singapore property buyers (writes on Propertysoul blog)

If you want to find out about properties, she is the default blog to go to. She has many years of experience and offers great advice on everything related to property. Can't go too wrong if you are interested to learn more about property.

Joel Sim - Master your mind, master the market (writes on mrfinancesavvy blog)

I know him as a equities broker and is a great trader. He will share with you about his craft as a professional trader and what are the things we should look out for. His years of experience in his field makes him someone that I will listen to.

Christopher Ng - 50 Shades of dividends investing (writes on Tree of prosperity blog)

What a sexy titillating title. He is very much himself over here and he shares actual experience with his status as a financial free man. Chris always do his research and shares it with folks who attends his talks. It can be controversial and unconventional, but I guarantee it will definitely set you thinking.

Kenny Loh - How to use the 3 musketeers of REITS to find strong REITS (writes on MystocksInvesting blog)

I read his blog for so many years now, and he runs a REIT investing course for a while. Here, he will share with you how to avoid common mistakes that REITS investors make and introduce a very simple and free tool to cut down your REIT research efforts.

Elvin Liang - The Art of Scuttlebutt (writes on epsilonluxe blog)

Ex-banker, current remisier. I think he is one of the few who applies both FA and TA to his investing. Here, he will share with you about scuttlebutt, a concept first introduced by Philip Fisher. If you want to know how he applies it to investing, you might want to hear what he has to say.

With this kind of line up, I think you don't come to the talk with just a cup of Starbucks. You come here with redbull laced coffee, a pen and notepad to write notes! The details of the event you can get by clicking on the picture below:

The key details are listed here:

Date: 29th July 2017 (Sat)
Time: 1pm to 5pm
Venue: DBS Auditorium, MBFC Tower 3, Level 3
Price: $65 (regular), $49 (early bird fee)

The early bird fee of $49 represents a near 25% discount from the regular price, and it will end in about a week on 8th July. So book your tickets fast. Don't just spend $49 on a good lunch; spend it on some mind food as well, lol

Sunday, June 18, 2017

My first Father's day

Today is my first Father's day. It's usually a quiet event, unlike Mother's day, but I like it because it's a quiet event. I don't need fancy roses or wild celebration or chocolate cakes; just a nod, an appreciation and a pat on the back is good enough. It's a team effort, where the glory is not for any individual parent but for the entire family, together as one.

I rehashed this old post, which I still think is very meaningful. Perhaps now, as a newly minted father, it's even more meaningful. I still get touched reading this. Happy father's day to all the daddies who might be earning the money for the family, or the chores they do to take care of the family.

Enjoy :)

My Father

When I was a kid at 5, I never liked my father. He wasn't there when I needed him, to teach me how to bike. Each night I want a kiss from him, before tucking me to bed. Wasn't there to comfort me, as I cry myself in bed. When I grow up as a man, I don't want to be like him.

When I was a teen at 15, I seldom see my father. He was sleeping when I leave at dawn, at work when I sleep at night. Two persons with the same surname, a stranger inside my home. When he took leave from work, stayed at home to rest, he'll often yell and shout at me. His work can't even earn enough, to buy the coolest gadgets, or bring me to exotic countries, that my friends had been since six.

Teenage years was over, and I just turned 25, but when I think about my father, I still hate him very much. When I graduated I didn't invite him - don't want others to know. I'm ashamed that he will arrive, with the smell and sweat of his toil. What's the point anyway? He'll just stand and not mingle. He'll be in a corner and not smile, maybe his time spent is not worthwhile. But I'll start work soon and earn my keep, I'll find a wife and have a kid.

When 20s flew past and I turned 35, I despise father very much. He retired with white hair and tired eyes, does nothing on a couch he sits all day. He keeps calling me to come home for dinner, but I'm too busy with life and has no more vigor. He asks often for more allowance, but I couldn't give him more than just a pittance. "How can I give you more", I said, "when I have my own family to care for?" Despite working all day and night, I just barely earn enough to get by. But that's okay cos my kid's the reason, for me to live and work hard till I too am beaten. I promise to teach him how to bike, and a kiss on the forehead before he sleeps at night. I know I've said that since yesterday, but work as always keeps me at bay. But I promise again my child one day, all the promises I've made I'll pay.

I was 45 when my father left, didn't attend his wake I must confess. Hardly had time to rest after work, but there's still a duty I cannot shirk. So I took leave and stayed at home, to make sure my kid is not alone. I may have raised my voice a little, but my love for him you cannot belittle. I know his friends travel, and their daddies buy them gifts, so that's why I've saved up a little, for a surprise on Christmas eve. I hope this savings won't be used up, to pay for emergencies. But sadly I'm ashamed to say, that it had always been that way.

With tired eyes and greying hair, I struggled at 55. I never thought I'll say this, but I think about father all night. Wasn't invited when my kid graduated, and I don't think I'll find out why. But I'm still proud of him and it's okay, as long as his future's bright. Besides I'm too tired from work to smile, I'll probably stand in a corner. A few more years I'll be retired, and then things will be all right.

I retired from work, aged 65, and there isn't much things to do. So I sit on a couch and wait all day, for the time my kid comes home. There is oft one pair of chopsticks, though I cook his favourite dish all day. I know why my allowance is so little - he's got his family to take care of. Sadly between his kid and his father, I know quietly I'm ranked down further. Father sometimes I'll think of you, calling me home to eat your stew. Father sometimes I miss you so, why didn't I call to say hello?

Now I lie bedridden all day, my age is 75.  What I really want to see, whenever I opened my eyes, my kid my grandson surrounding me, to tell me everything's alright. But the closest thing I'll get, is not the warmth of gentle hands, it's an old faded photo, trapped in a cold and sullen frame. How could things begin so right, in the end become so wrong? I can't stand, can't do anything, except to reflect and think what's wrong.

Kiddo, when I leave this world, don't ever be like me.

Daddy, you'll see when I join you soon, I grew up just like you.

Wednesday, June 14, 2017

The 4 Seasons

There is a time and season to do certain things, and most things go about in their own cycles. It's the same for investing or trading. There's a time to sow the seeds, a time to wait, a time to harvest and a time to just lie in bed and do nothing. Today, we're going to talk about the seasons in my trading.

There are 4 seasons: Spring, Summer, Autumn and Winter. Each defines a certain mood that characterizes both the change in climate as well as the activities that follows it.

Spring: A new hope, a new beginning. This signals a change from the cold harsh winter months. The first shoots breaks out from the soil to welcome the warmer climate.

Summer: Hot hot hot. Every one is coming out to play while the sun shines the brightest and longest. Full bloom of the flowers.

Autumn: Weather starts to turn a little cooler. The colourful bloom of flowers is all but over while the leaves shed to prepare for the winter months ahead.

Winter: Cold, dry and lifeless. Animals hibernate, humans hide in warmth together.

We can tell which season by looking at an oscillator like the MACD histogram. Just look at the slope and the direction of the histogram (is it above the x-axis or below?).

Spring: MACD slope is positive, histogram below x-axis
Summer: MACD slope is positive, histogram above x-axis
Autumn: MACD slope is negative, histogram above x-axis
Winter: MACD slope is negative, histogram below x-axis

So, do you buy during winter, spring, summer or autumn? It depends on your school of thought. I'm a counter-trend person, so I'm much more active during the coldest part of winter towards spring. I think most trend followers will be much more active during summer. No wrong or right, just preference and temperament. I'm long only, so I try to buy during winter and sell during summer, but I can imagine a short only person doing completely opposite of what I do i.e. sell during summer and buy back during winter.

Let's take a look at STI with regards to the 4 seasons. Below is the daily chart of STI.

First of all, it can be a complicated year with more than 4 seasons. Blame it on climate change lol! We see winter-spring-summer-autumn then followed by a complex winter-spring-winter-spring and finally summer season.

But let's zoom out and see the weekly chart. The weekly chart allows us to view the bigger picture, which is about 5 times more than the daily chart. Why 5 times? There are typically 5 trading days in a week, so each bar on the weekly chart represents 5 trading days worth of information. Hence, looking at the weekly chart allow us to see the macro view in a way that the daily chart can't allow us to see. It's like looking at the hour to hour weather vs day to day weather and month to month weather. As the time frame gets longer, you see the bigger picture at work.

What do you see? I see a summer and an autumn that is long gone since April. Not sure which season we're in right now, because it looks like a protracted autumn or an incoming winter. Or maybe the weather will change and we're back in summer? Who knows such things? (Those who are interested might look at the monthly STI to see another perspective of the situation we're in.)

I know since it's not the deepest winter yet, hence my watchlist is almost empty, I should make hay while the sun still shines. When the cold wind nearly dies down, and just before the robins and the first shoots are out, and while the bear is hibernating, I'll be there. In the meantime, Bully the bear will prepare for winter by eating more to put on enough body fats to make it through the winter LOL

Friday, June 02, 2017

My almost half year reflection

Time only gets faster and faster as we get older and older. It's the same for this year. Before I knew what happened, June is here and almost half a year is upon us. Let's have a review on what had happened in this year so far.

1. Greatest event of the year - birth of my son

My son continues to be the source of sleeplessness, frustration, joy and happiness for me. Life is a lot different compared to a few months back when me and my wife are still living as a couple. Now with the '3rd party', we effectively reduced our weekly trips out tremendously. It's a quick sneak out to get groceries, or to have a bit of dim sum, but that's pretty much it. It's baby - work - baby - sleep cycle for me. I'm not complaining, nor am I missing the life as a couple without kids, but I'm just noting down the differences.

2. Reading goal of 52 books a year - way off track

Can't do that. I realised in the first month of my son's birth that I can't hit my reading target. With a baby, everything comes to a standstill when he cries. I'm in my 11th book now, and it'll be a cause for celebration if I can hit 15 books in this year. But so be it. I'm changing my reading habit and reading deeper now (actually, I'm studying books now), so I welcome the change. I'm letting go of this target for now.

3. Savings 50k per year - on track

I'm working a little lesser this year because I need some time off for my family. It's the 5th month into the year and I've accumulated about $29k in savings, so I'm sure I can hit my target savings of 50k per year. This is a good achievement for me, because I know my spending had increased in some areas. As a result of lifestyle changes, some other areas had reduced spending as well. I'll give a few examples below:

My water & electrical bills shot up by 30% to $160 per month. Likely because of the overnight air-conditioning since the baby sleeps better. Cooking more often at home now too, so these two reasons are main cause of the increased bill size. Should see more increase in the latter half of the year as the unit charge of water and electricity goes up.

My restaurant bills went down from 66+%, from about $300 a month to about $100 or even lesser. That is because the frequency of restaurants trip decreases tremendously. I'm eating more at home as my mum came over to help us cook for meals. Hence the groceries bills also went up from $300 to about $800 per month, more than doubled.

I also bought quite a lot of stuff from qoo10 until I'm now a GOLD member. Bought stuff from Lazada and redmart too. Usually these are baby stuff but there are also home improvements things that need replacement due to wear and tear. Crazy year this is.

4. Relationship with mum - from average to strong

My mum is a great help. Besides bringing an experienced hand to help us and guide us in taking care of my son, she also cooks for me and my wife. Home cooked food is the best, seriously. I think my health went up a few notches after eating a few months of home cooked food. I also see how my mum handles the baby gently and never lost her patience. It must have been like that when I'm a baby in her arms too. I think the cycle has gone one full round. It's important to forgive whatever wrongs your parents had done to you (or not done for you) because we're all struggling as parents to give and love our kids the best we can do. I think because of the constant interaction with my mum, all of us, including my wife, had a stronger relationship with each other. That is the best side effect that happened when my son arrived.

5. Health goals - non-existent

No exercise, no pull ups, no jogging. Nothing. To be honest, even if I can muster the time, I might not have the energy to do so. Constant lack of sleep makes it hard to commit to anything. I think this situation will improve as the baby grows older and more independent, but as of this year, I doubt I can do anything about it. Not now. The only healthy thing is a diet based kind of system, not the exercising kind. Also stopped intermittent fasting because I keep getting hungry. Probably is the lack of sleep that causes the body to scream for more calories.

6. Starting Journalling - beginning of a new habit

I've been journalling these days. This meant that I write short notes on whatever happened to my mind along the day. I've purchased a google app for this purpose. I think it serves two purposes - first it helps me in my mind training to not judge anything and write down anything that crosses my mind stream. Secondly, it serves as a diary of sorts and helps me to colour my life. If I don't jot down the things that happened, I think each day will pass by even faster. I want to note down all the little things that happened in my daily lives so that I can look back a year later and see what happened. That should be interesting.

Such a drastic change to my lifestyle. Is it worth it? Yes, it's still a resounding yes.

Thursday, May 25, 2017

Is Haw Par a golden tiger or a sick cat?

This is a guest post by the kind folks over at Investingnote. It seems that now they have an in house technical chartist and an analyst as well. Good for them. It's quite a detailed analysis with FA and TA perspective, but this kind of company isn't my cup of tea, LOL. The chart failed to trigger any buys in my system, so yeah, it's good to know about the company and keep it in mind the next time you use their signature muscle rubs or ointment.


A Golden Tiger: $Haw Par(H02 )

This column is jointly written by @fayewang, @calvinwee, @gordon_ong and @devinnath

 -Faye is both a fundamental analyst and economist by nature. She is a global thinker who’s open-minded and enjoys learning from the market.
 -Calvin is a fundamental analyst at heart and an ardent disciple of value investing. He relishes the process of searching for undervalued stocks and enjoys collecting dividends from his stocks.
 -Gordon has a demonstrable interest in equity investments, financial markets, and negotiating deals. As @NTUInvestmentClub president, he has an understanding of what factors drive an organisation’s success. -Devin is a technical analyst who balances FA and TA in his investment decisions. He believes in using news and FA to spot the right stocks and rely on TA to give him the lowest risk-to-reward ratio possible.

Brief Background: Haw Par Corporation Limited is engaged in manufacturing, marketing and trading healthcare products; providing leisure-related goods and services, and investing in properties and securities. The principal activities of the Company are licensing of the Tiger trademarks and owning investments for long-term holding purposes, the history of the brothers Haw and Par traced back to the 19th century. The company distributes its products in the Americas, Africa, the Middle East, Asia, Australasia, and Europe.

Product Segments: Haw Par operates in four segments, namely
1) Healthcare - principally manufactures and distributes topical analgesic products such as Tiger Balm and Kwan Loong.
2) Leisure - provides family and tourist oriented leisure alternatives through its owned and operated oceanarium, including Underwater World Pattaya in Thailand.
3) Property - owns and leases out various investment properties in the Asia region.
4) Investment - invests primarily in quoted and unquoted securities in Asia region.

Performance Summary: Haw Par recorded a dip in profit from operations and investments of 2% mainly attributable to lower dividend income from investments. However, it should be noted that all operating segments generated higher profits in FY16. The healthcare business segment continued to contribute significantly to the Group’s revenue with a 16% increase in revenue from $152.6 million to $176.4 million. Correspondingly, healthcare’s profit increased 37% from $48.1 million to $66.1 million with higher sales and reduced operating expenditure. However, revenue from the leisure business segment registered a sharp drop of 34% to $8.4 million due to the closure of Underwater World Singapore (“UWS”) in June 2016. Therefore, leisure recorded profit of $0.9 million in FY16 compared to loss of $4.3 million in FY15 due to the one-off impairment charge in fixed assets of UWS in 2015.

Financial Highlights:


 1. Operating performance Haw Par Corporation’s revenue has increased steadily since 2012, and this is also reflected in its profit before taxes. However, PBT decreased slightly by 1.6% yoy due to the lower dividend income received from investments. In that light, it should be noted that all of its operating segments generated higher profits yoy, however the profit contribution from Investments dropped by 31%, leading to an overall decline in PBT.

2. Financial & cash position Haw Par’s Operation Cash flow recorded yoy increase since 2012, and FY16 was no different since it reported higher profits across all its operating segments. However, there was a sharp drop in its total cash flow by 30% yoy. This is attributed by the decrease in financing cashflows by $24.8Million. Correspondingly, it recorded a fall in the lower cash and cash equivalent in the balance sheet by 0.51% yoy.

3. Segment performance Traditionally, Haw Par Corporation derives its revenue from the investments income segment. The overall group revenue for FY16 at $201.6 million grew 13% yoy, with Healthcare and Property recording 16% and 25% increase in revenue respectively. Operating segment profits before interest expense and tax for Healthcare and Property grew 37% and 22% respectively. However, investments income decreased 31% due to lower dividend income from investments.

4. Stock information Haw Par Corporation has a very low D/E ratio of 2%, hence it can raise additional financing if they wish to acquire more assets in any of their business segments. On the other hand, Haw Par does not have a remarkable ROE and ROA, hovering between 4-7% from 2012-2016. This is likely because most of its business segments are in the mature stage and have limited growth potential. However, it should be once again noted that it derives most of its revenue/profits from its interest in UOB, UIC and UOL group, hence its overall profits is highly dependent on the performance of these 3 companies. Haw Par has a dividend yield 1.9% for FY16. We were unable to find a comparable company for Haw Par Corporation in the SGX stock universe, hence, we decided to skip the peer analysis for Haw Par Corporation.

SWOT Analysis


1. Renown of brand. Brand of Haw Par retains a history over 100 years that can be traced back to 1920s. With famous Tiger Balm as its representative product, Haw Par held competitive advantages of competition in the healthcare industry considering exceptional brand awareness. Despite the long history, Tiger Balm became iconic for the sake of its incorporation in Singapore traditional culture. Brand loyalty is another benefit from well brand management. It is brand loyalty that become a significant obstacle for new entrants, as they may fail in the competition due to strong brand loyalty of customers to existing players.

 2. Uniqueness of products. Haw par differentiates its Tiger Balm from other healthcare products with secret herbal formulation. Therefore, the effect of substitution seems limited to Tiger Balm. For sure there are other pharmaceutical manufacturers who provide analgesic products, for instance, liniments or oils made by using Chinese medicine. Nevertheless, they can merely bring competition but cannot replace Tiger Balm. In Singapore market, the uniqueness of Haw par is more apparent, it is difficult to find a listed company that operate similar business as Haw par does.

 3. Organic Growth of Core Business. Though Haw par is involved in various industry such as property, leisure, and investment, its core competency is derived from healthcare segment. Growing proportion of profit from investment segment has been observed in recent years, which makes Haw par looks like an investment holding firm. However, it is worth noting that revenue generated from its healthcare products enjoy continuous growth with an average rate of 40% over 5 years.


1. Haw Par’s leisure segment. Main business of Haw par’s leisure segment is its Underwater World Pattaya (UWP) in Thailand and Underwater World Singapore (UWS) in Singapore. Profit contributed from Leisure segment has experienced continuous decline since 2012. The segment suffered from loss in financial year of 2015, which is related to the terrorist attack at Bangkok in August 2015 and flash flood in Pattaya. Leisure’s profit swung to black in 2016, while Haw par decided to close UWS afterwards. The close was claimed due to the expiry of lease contract on Sentosa island, albeit more likely to be for profit improvement purpose.

2. Investment portfolio. In Haw par’s balance sheet, financial assets occupied 81.9% of its total net assets. In other words, majority of its net assets is made of securities of UOB, UOL, and UIC, which worth $2 billion in 2016. Therefore, Haw par’s profitability is closely tied to the performance of UOB, UOL and UIC. The investment portfolio cannot be considered as absolute ‘weakness ‘of Haw Par, but it exposes Haw par with greater volatility to the performance.


1. Further expansion. To fully utilize the renown of Haw par’s brand, Haw par can make more efforts to expand their business for greater presence in the global market. At the current stage, income generated from local market merely occupies 18.6% of the total number, meanwhile 35% of the revenue contributed by other Asian countries outside the ASEAN area. Based on the data, we can conclude that Haw par has exploited and penetrated the Asia market, but seems has not started its exploration in other potential countries. With sufficient cash in hand and light debt burden, Haw par is at an appropriate position for global expansion. The expanding strategy can be introducing new products in various markets through franchise.

2. Segment restructuring. Haw par has closed the Underwater World Singapore (UWS) in Sentosa island, thus the segment of leisure greatly shrunk in 2016. As mentioned in the weakness part, the leisure segment suffered from plummeted revenue and the loss even eroded profit from other business. It might be wiser if Haw par gradually shift their investing emphasis to healthcare and investment business only.

3. Long-term flourish healthcare industry. The growing number of aging population and better awareness of healthcare jointly lead to stronger demand for healthcare services in the future. Advanced technology allows Haw par to extend its products line and seek for more opportunities in this resilient industry. Threats: 1. Increasing competitors. Rapid growth in healthcare industry has attracted more companies to enter and share the market pie. Increasing number of competitors is the biggest threat Haw Par is facing now. Products such as Yunnan Baiyao from China and Mopidick’s from Japan have brought intense competition to Tiger Balm.

Key Drivers & Limitations 
Expanding to new markets and modernizing the Tiger Balm brand

Haw Par’s strategy of widening Tiger Balm’s product offerings to include Medicated Plasters, Mosquito Repellents, Cooling Patches and Lotions, as well as modernising the packaging and marketing strategies, seems to have revitalised its attractiveness to consumers. Haw Par has also successfully capitalised on the recent ASEAN mosquito virus outbreaks to increase sales. With such outbreaks being frequent within the region, Haw Par has a consistent sales driver.

Haw Par has also capitalised on Tiger Balm’s brand strength to attract distributors and remain asset-light – recently, it has partnered with Alkem to expand its distribution network in India. Haw Par’s distribution network remains formidable throughout the world. Such a business model means that Haw Par can sustain its high margins in the foreseeable future.

Acquisition for growth in Healthcare/Leisure segments 
Haw Par is currently seeking acquisition targets to utilise its net cash position. It has stated that it may do horizontal integration of other healthcare products to add to its Tiger Balm brand. Such an acquisition will support the overall business-level strategy of dominating the topical analgesic market through consolidation under a single brand. Haw Par also seeks to acquire leisure destinations to utilise its decades-old expertise of running tourist attractions. Depending on the acquisition target, this will most likely increase Haw Par’s low ROE and unlock shareholder value. Haw Par seeks to maintain its low profit margins; hence it will most likely acquire products rather than expand overseas using physical stores.

Exposure to Banking and Real Estate Sectors
Haw Par not only has equity investments within banking and real estate, but also has its own property division. Hence, its asset value and investment income stream are exposed to the high earnings expectations on SG banks, as well as occupancy rates/rental yields from its SG and MY properties.

Analysts’ Opinion 
Key takeaways by @calvinwee

Haw Par is a household brand synonymous with its flagship product: Tiger Balm. However, with deeper analysis, one will realize that over the years, Haw Par Corporation has diversified into different business segments such as leisure and property. Also, management has shown great prudence in maintaining a strong balance sheet and free cash flows. Most importantly, it derives a substantial portion of its profits from UOB, a big 3 bank in Singapore. I am of the view that its healthcare segment has the potential to grow, albeit at a slower rate, with its expansion into European and US markets. Barring no major changes in the 3 companies that it is vested in, Haw Par Corporation is a safe haven amidst the volatility in the market.

Comments below is written by @Gordon_ong:

Haw Par is a Portfolio of UOB, UOL and UIC at deeply discounted values 
To find out what is Haw Par’s current equity stake in UOB, UOL and UIC, we first assume that there are no changes in shareholdings since FY16 annual report. To test this assumption, we will see what is the fair value change on these financial assets (FVOCI) for 1Q. If there are no changes in shareholdings since the last annual report, the fair value change should be 182m.


 The actual fair value change as stated in 1Q report is 189m, almost the same as assumed. Hence, we can conclude that there are no significant changes in Haw Par’s investment holdings.


Hence, based on the share price of $10.43 and market cap of $2.290B, the Total Enterprise Value is $2.015B. This TEV includes a liquid portfolio of 3 shares with combined market value of $2.2B, Investment Properties of $200M valuation, and a business worth about $1B. Based on a sum-of-parts valuation, TEV should equal to $3.4B and market price should be ≈$15. It can be argued that the market has grossly undervalued the price of Haw Par. In fact, purchasing Haw Par shares means acquiring an investment portfolio for cheap, as well as a stake in the investment properties and the underlying Haw Par business for free. 

Usually, stocks that trade at a discount to NAV have negative operating profits. However, in Haw Par’s case, not only is the Tiger Balm healthcare business still profitable and growing, the net assets are not hard-to-dispose-of fixed assets, but equity stakes in other businesses. 

One consideration is whether Haw Par is a “value trap”, a.k.a Haw Par will hoard the dividends paid by its investments within its business without distributing to its shareholders. Even in this worst-case scenario, as Haw Par’s main businesses are profitable, defensive and secured by a deep economic moat (brand strength), Haw Par’s cash position and equity stakes will just grow indefinitely until a catalyst unlocks value for shareholders e.g. continued growth of healthcare product segment or some form of M&A. To test whether Haw Par hoards cash, we simply measure the investment income received vs. dividends paid out.


 While Haw Par does retain a portion of its investment income, its other business segments contribute such that the total dividends paid is higher than an equivalent weighted portfolio consisting of UOB, UOL and UIC. Notably, healthcare segment’s growth in new markets support Haw Par’s ability to pay out higher dividends recently. 

The Dividend Payout Ratio and Historical Dividend Yield also show that dividends from Haw Par is near equivalent to investing in a weighted portfolio of the 3 stocks. Even though the dividend yield of Haw Par is slightly lower, the excess cash is going into Haw Par’s cash reserves. Hence, the 48 b.p. is not lost, but merely locked up within Haw Par’s cash reserves, which shareholders still own a stake of. 

Overall, Haw Par does indeed distribute its investment income from its equity portfolio to its shareholders. A shareholder of Haw Par will gain more dividend benefits compared to directly holding an equivalent portfolio of the three shares. As the risk of Haw Par suddenly hoarding investment income is negligible given its track record, there should not exist such a discount on valuation for Haw Par’s equity portfolio. 

Unless you believe that UOB, UOL and UIC are grossly overvalued by the market, as long as Haw Par’s TEV remains lower than the market value of its equity portfolio, it makes complete sense to buy more of Haw Par. While acknowledging that Haw Par has been consistently undervalued for the past 10 years vis-à-vis its equity holdings, the gap between Haw Par’s value and its equity holdings has narrowed, signaling that the market has taken notice. 

Investors should view Haw Par primarily as an Investment Holding company at discount prices, with its success as a healthcare product company as a pure bonus.

For investors interested in $UOB(U11), can consider purchasing shares through $Haw Par(H02) for greater value. A portfolio of banks, real estate and healthcare seem to fair well against interest rate risk. Vested in Haw Par; DYODD. Downsides: During expansion, management may decide to modify Haw Par’s healthcare segment from an asset-light distribution model to an asset-heavy model, requiring cash. However, unlikely based on conservative management’s previous reinvestment rate. Also, SG Banking and Real Estate sectors may weaken affecting value of equity holdings – yet holding an isolated UOB/UOL/UIC stock will be even worse in that scenario. 

Technical Analysis 
 From TA (Technical Analysis) perspective, followings are the analysis of Haw Par as of 23rd May 2017. This part is written by @devinnath.


-Taking highest high and lowest low from 12 month time frame (July 2016), it appears that Haw Par stock price has been testing the resistance line at $10.500 since the beginning of May 2017. 
-Channel width is considerably wide, contributed by the bullish steam at the start of 2017 (Jan-Feb). Although an untested weak support range is formed between $9.745 and $9.837, strong support remains low at $9.360 
-Stochastic Oscillator (14,3,3) and MACD (12,26,close,9) both agree that there is no apparent highlight of trend being formed in the past month, although both indicators signalling a slight uptrend (MACD : 0.1117) and minimal buying pressure in the market (slow %K = %D : 65). 
-Parabolic SAR on the other hand acknowledges the position of the price on upper boundary of Bollinger Band (20,2) by showing a possible price stop and reversal, hence the stock price might be taking a bearish stance in the near future. 

I believe that it is rather reasonable for investors to expect a significant attempt to break the strong resistance line at 10.500. This attempt will be indicated by a sharp hike in price above $10.500, which the result will determine the future trend direction of Haw Par stock. 

Best case scenario: If price manages to break the resistance line and stays there for at least 2 days, then high chance it will continue to take its bullish stance. Once its position is reinforced, it will be the perfect time to enter the trade. 

Worst case scenario: If price fails to stay above the resistance for 2 days, similar event with 12th May might reoccur, e.g. price broke through the resistance but failed to maintain its stance as bearish engulfing pattern appears the following day. It will form a double top pattern which might impose a very strong selling pressure. This might be followed by breaking the weak support towards the strong support line. 

Conclusion: In order to mitigate risk, It will be in our best interest to wait and see how the market behaves around the resistance and let time reveals itself. 

This article is written by by @fayewang, @calvinwee, @gordon_ong and @devinnath from InvestingNote. 

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