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Friday, January 20, 2017

My Career Story - Past, Now & Future

For the past 6 years I have been blogging, I have not really talked about how I transition my career growth from one to the next.

It is not because that I had purposefully avoided them, but rather there is no impending urge to think and reflect about how I had transitioned from each stage to the next.

I had mentioned several times in my post about how important human capital is in the journey towards financial independence and they are part of the important equation to reaching that stage.

A good friend of mine and a fellow blogger, Chris (author of Re-ThinkWealth) recently shared an article with resonates with what I've gone through from each stage of my career journey - beginning to now.

In the article, the writer shared about his own experience in his 19 years in the IT industry and what he believes to be the optimal position to take as an employee. In this article, I am going to try and define the pace according to my experience.




There are many different type of characters that we see and worked with throughout our career lifespan. Some are unique, some are interesting but for the most part they are fascinating. Here, I am going to just group them in general terms.

Different Type of Employees

1.) The Gung-Ho Style (The "Outperformers")

These are the type of employees which are typically motivated by personal self-drive and competition.

They do not like to sit idle or achieve targets without purpose and are always going for the win.

Because of the commitment they promised to achieve to themselves, they typically work overtime beyond the normal working hours and at the end of the year, they clocked in many unutilized leave and/or time-off hours without knowing when they are available to take them.

Verdict: At the earlier stage of my career and when I was still single, this is the kind of approach I took to accelerate my career in the first few years. While the promotion at the end of the year was beyond my control, it was more of the self-drive and motivation that pushes me through these unwarranted but important stage of my career. 

Until this date, they become the backbone to which I had pushed myself to the limit, giving myself a chance for "delayed gratification" at a later stage when I knew I was going to settle down and slow down the pace of my career.


2.) The 9-to-6 Style (The "On Timers")

These are the type of employees which goes to work on time and goes home right on the dot, no more and no less.

While it is not impossible to achieve, they are often not the "star performer" of the company as the society bends on giving the award more to those that devotes extra time and efforts beyond. Special mention on the word extra and beyond here.

They are usually either family oriented or have activities that they would like to engage outside of work after working hours. Because of this, it is imperative that they only work according to what's set in the employment contract, and are agreed upon at the start. If the boss makes them work 30 min late, you'll often hear complaints from them, though they are generally harmless in nature.

Verdict: I am at this stage of my career where I demand stability and the "on-timers" because of family commitment mainly. I do still bring my laptop home and work from home after working hours as and when I needed to but they are often only activated if the matters are truly urgent in nature.

My other activities after working hours include spending quality time with family, vacationing, reading, analyzing my investment, writing this blog, watching my favorite US and Mediacorp drama and many more...

This is usually the stage where I no longer achieve that "promotion" status at work year after year anymore and I settle down with what I think I optimally can achieve, both inside and outside of work.


3.) The Flexible Style  (The "Part-Timers")

These are employees which tend to come in early and leave early or come in late and leave late. Either way, they have a flexible working pattern due to certain commitment that they have outside of work.

Some may also choose to work as part-timers for half a day if their working environment allows. These are usually position which are not critical to the daily business operation of the company and their roles allow them to work flexibly in different timezone.

Verdict: This is definitely something which I want to venture out to in the next 3 to 5 years. My current role doesn't seem able to fit in the part-timers role but it can be flexible if we try to work things out. My ideal is to eventually go for a 4-day work week so I'll but we'll have to see more about that.


Final Thoughts

There are obviously no right or wrong in these decisions. 

These are just some of the simple sharing which I had experienced and envisioned it to be in the coming years. 

The goal was always to start off very strongly during the early stage and set up a good base, then slowly stepped off the gas on the corporate ladder once there are other priorities that set into my life. This doesn't necessarily mean that you are slowing it down, but it means that you are stepping on in some other priorities in your life.

Don't let hard work refrain you from pushing beyond what you are capable of. You may be surprised by what you are more than capable of.



Saturday, January 14, 2017

"Jan 17" - SG Transactions & Portfolio Update"‏

No.
 Counters
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
1.
CDL Hospitality Trust
50,000
1.405
70,250.00
14.0%
2.
Ireit Global
73,000
0.725
52,925.00
11.0%
3.
Fraser Logistic Trust
40,000
0.94
37,600.00
8.0%
4.
Lippo Mall Trust
80,000
0.37
29,600.00
6.0%
5.
Kingsmen
45,000
0.64
28,800.00
6.0%
6.
ST Engineering
8,000
3.40
26,720.00
6.0%
7.
M1
10,000
2.10
21,000.00
6.0%
8.
FCL
10,000
1.645
16,450.00
3.0%
9.
Micro-Mechanics
15,000
0.87
13,050.00
2.0%
10.
Singtel
3,000
3.83
11,490.00
2.0%
11.
Sabana Reit
30,000
0.355
10,650.00
2.0%
12.
First Reit
8,000
1.275
10,200.00
2.0%
13.
UMS
15,000
0.62
  9,300.00
2.0%
14.
OCBC
24
9.38
     225.00
1.0%
15.
Warchest*
150,000.00
30.0%
Total SGD
488,260.00
100.00%


This is the first update of the the beginning of the new year.




Since the start of the month, the market has been on a tear run over the last couple of weeks, sending the STI up and well over the 3,000 mark. When the market is up, there's obviously lesser compelling things to buy so I have to look for opportunities harder. If any, it would be to lock in some of the gains first. My strategy is always having the intention to hold them for long term, but if Mr Market is offering me a good 10% gains in the short term, I'll lock it in first.

There's a few changes that I've made towards the end of Dec last year since the last portfolio update.

First, I've divested all my position in Ascott Reit at $1.135 and use the same proceeds to add onto my existing position in CDLHT by adding them more at $1.305. This is a direct hospitality switch as I've made my intention to divest Ascott for the longest time ever. With this, CDLHT has now become my largest position and it has not disappoint in recent weeks.

Next, I also divested all my position in Spackman at $0.193, given the good short term gains after one of the catalyst is played out and I have used the same proceeds to buy Lippo Mall Indonesian Retail Trust (LMIRT) at $0.37 which I blogged over here.

In the early month of January, I also identified a good opportunity in Sabana Reit and hence bought them at a price of $0.34. I have blogged about my purchase here in my previous post so I will not repeat much here.

In the past week, I have also taken the chance to lock in some of the gains in OCBC and M1 by divesting them respectively at $9.34 and $2.10. The divestment in M1 is partial since I have several batch which I've bought over the past month. I am still holding 10,000 shares of M1 after divesting.


Net Worth Portfolio (Jan 2017)

The portfolio continued to benefit from the market run up in recent week as it closes once again at a personal new record high of $488,260 (+2.7% month on month; +41.3% year on year; this includes capital injection, dividend reinvested and capital gain unrealized).


As a result of a few divestment, the cash portion has also increased to about 30%. This is a comfortable level of cash holding at this point and should the market continues to go up further, I'd be sure to increase this part of the cash portion even higher.


Dividends (Jan 2017)

I had received my first batch of dividend for 2017 on the 11th Jan for Singtel of $204 (3,000 shares of $68). It's a good start.

More to come on the Feb month which I am looking forward to.


Other Investment

Some people call this speculating or betting.

For those who knows me well, they would know that I call this an investment. This means that like any stock purchase, I made a conscious decision to weigh the risk and the reward and if the returns (and probability) is in my favor, I would initiate a position in it. Nothing much difference from what I do here and what I've been doing all along.


My Bet with Singapore Pools

I've initiated a position in Chelsea FC to win the EPL by the end of May. I bought them towards the end of Dec at an odds of 1.65 and added them further in recent week after their historic run was brought to an end.

I've made this investment my sunk cost, so I've written everything off here mentally in case things does not work out. I think this is the right approach one should take if they are going into the casino and doing all these stuff.

If they work out well, I'd be getting a massive lump sum proceeds in May. This would be a wild card for my aim to end the year with a stretch target of $600k by year end.


Personal


I am prepping myself up to be extremely busy over the next couple of months.

This is due to the incoming 2nd baby by the end of this month and thereafter I'll have a lot of work and roles to do, both home and at work. With this, I do foresee a significant drop in involvement in both blogging and social meetup with fellow bloggers and peers.

I'd have to see how this works out before I can feel things out more appropriately.

Other than that, wishing everyone a good start to the new year and keep streaming ahead.


Monday, January 9, 2017

Recent Action - Sabana Reit

I made my first transaction for 2017 that I've monitored for quite some time.

Sabana Reit is probably one of the most hated Reits in the whole universe of S-reits at the moment. And they are rightfully so. Investors who has been with them since the IPO has seen the share price go up to as high as $1.3+ before plunging all the way down to today's post-rights price of around $0.34.

I was waiting and observing and waiting further to get this real cheap and I finally managed to get them today after queuing for the stock on a GTD basis since last Friday.

I managed to purchase 30,000 shares of Sabana Reit at a price of $0.34




Reasons Why I'm Buying

1.) This is a classic example of buying a company at a cheap price. To me at least, I find it compelling enough to add this to my portfolio.

Pre-rights - Equity is at $596m, while outstanding shares is at 778m. Divide them and you get the NAV of about $0.766.

Post-rights - Equity raised about $80.2m, so new equity will be at $676m, while outstanding shares will increase by about 310m to 1,088m. Divide them and you get the NAV of about $0.62.

They are using the funds to buy the 3 properties which is near or slightly less their market valuation, so that will not help the NAV by much unless industrial sector recover as a whole.

Buying them at my purchase price would mean that I'm buying them at 45% discount to their book value. That gives me sort of margin safety. They have proven that in some cases, they are still able to divest their industrial properties at market valuation. That's a relief for the industries as a whole.


2.) Dividend yield is also compelling. I'm talking about sustainable dividend yield here.

The management did not guide whether the acquisitions via rights will be accretive in nature, but a quick guess should be it's not.

Pre-rights TTM DPU is at $0.0477 while I'm expecting a 15% impact to the DPU for post-rights to come at $0.04 since they are on master lease and they provide more visibility in terms of lease renewal.

The property in Eunos comes with income support for 5 years while the property in Changi comes with income support for 3 years.

Based on the current share price I bought, it provides an earnings yield of 11.7%. Since they are distributing 100% of their earnings via cashflow method, that would constitute a dividend yield of around 11.7%. That's pretty good to me in terms of dividend yield.


3.) Gearing has come down as a result of this financing from pre-rights of 41.5% to around 39% post-rights issue.


4.) There's a strategy to getting the mother share of a Reit that asks for rights issue that are not accretive.

First level plunge - This is the usual normal plunge once rights issues are announced because investors are typically not perceptive to put more cash into an existing "lousy" stock.

Second level plunge - This plunge is made worse if investors can ascertain that the funds used for the acquisitions are not accretive. This usually happens when the mother share is trending down and is typically a bad idea to raise cash via rights. This is when the bulk of investors holding the mother share are all dumping their stocks, sending a spiral wave together with the short seller. As investors, we should still wait for more meats to come. We should never try to buy the mother share and apply for excess rights here because the game for that 1,000 vs 100 shares are now no longer favorable to investors.

Third level plunge - This plunge is when the mother share goes ex-rights and the rights start trading on the market. Typically, we are left with investors who just want to hold on to their battered mother share but doesn't want any further involvement with the rights, so they are selling the rights. The rights get sold cheaper which means that the mother share would continue to go down, otherwise there would be arbitrage opportunity.

Finally, if you are still crazy enough wanting to go in like me, this is when you get in - Monitor the rights trading for a few days, and the mother share price will stabilize at some point. To me, this is the best opportunity because all the crap has hit the fans and has happened, so the bulk of the news is over. 

This is also when I start buying them, when no one bothers to look at it and the news has died down.

My call is that at $0.335/$0.34, the share price has stabilized and bottomed and that's where the risk reward would come into play.

Unless there's new development or news that has not come into play yet, I don't think it'll drop much further, supported by their fundamentals (someone asked me if Sabana still has fundamentals, lol).

I decide to give the management another chance to repent and atone to make it better.


Friday, January 6, 2017

2nd Chance Properties On Issuance of Bonus Warrants

The management of 2nd Chance Properties announced a proposed bonus issue of free warrants on the basis of One bonus Warrant for every One existing ordinary share to the shareholders.

The size of the bonus warrants issued is as much as the paid-up share capital of the company, which is currently at 755,396,152. The enlarged capital would immediately be double of that size should all the proposed warrants is exercised.

The exercise price of the warrants is specified at $0.25, which is not far away from the current market share price of around $0.23.




I wrote a few articles on 2nd Chance previously (Link Here) and warned on their method of financial engineering.

This proposed warrants is a "replacement" of the current existing warrants at $0.40 which is expected to expiry on 24th Jul 2017.

To me, it looks like the goal of the management is to do this:

Borrow money -> Issue high dividends -> Push up share price -> Issue Warrants -> Enlarged share base -> Conversion money used to repay borrowings.

The management seemed confident that the conversion at the exercise price will take place so they went ahead to increase their gearing meanwhile.

Not sure to me but it seems that the management is sort of putting a cap on the existing share price to $0.25 on the enlarged share base. If I am buying the company after the warrants proposed issuance at a price higher than $0.25, I'd see a wave of enlarged share base of capital coming in which dilutes my holdings as a new shareholder. If I am an existing shareholder looking to hold this for a long term, I better make sure that I am entitled to this bonus warrants so I could hold the wild key of potentially not being diluted since it remains the same for existing shareholders.

Always a good case study on financial engineering.

Thursday, January 5, 2017

Sniffing Opportunities in 2017

The market has only been trading for about 3 days since we enter 2017 and it has been on a strong run upwards.

The STI for instance, has increased by about 70 points for the last 3 days and it looks like it will continue to surge higher upwards. They are still reasonably cheap by historical standards and it does looks like valuation will revert back to the mean even when gdp and earnings expectations for 2017 are not going to be fantastic.




It appears that 2017 will be a period of slow growth when various sectors are still uncertain about what are they trying to expect from the economy. In Singapore, growth is going to slow down over the next couple of years and it'll be interesting to see how the government is going to steer the monetary policy comes budget next month.

It feels to me a bit like the market has taken a bit of complacency here since Trump won the US election. From an extreme gloom scenarios before that, positive news and optimism seem to surround the market these days with headlines hitting investors who are left behind chasing the market. This is the definitely the catalyst start for the next correction / recession in the stock market, when valuations go up faster than the earnings or expectations.

I try not to bet on predictions and this is the same reason why I've been on the market one way or another. At the moment, my holdings in equities stand at 70%, which is a good allocation in my view. The rest of the 30% can be used to pounce on opportunities should they arise.

During this period where we are unable to spot any compelling opportunities, it is important not to get into the head thinking of trying to strike every single bat. It pays off sometimes to be patience and quiet on the transactions and not be forced into making a mediocre transactions. This is something I've been constantly reminding myself everyday.

Meanwhile, it is important to continue to follow the progress of the company we are vested or interested in and continuously preparing for extensive research even during moments where there are nothing to buy.

A one-off impactful scenario will easily create an irrational panic scene where we will see fear in the market and that's where the big money is laying on the floor for us to swipe.

Being able to insulate our thoughts and emotions from herd investing allows us to think calmly and deeper into our strategies and revisit them again when the temptation to deviate is near to us.


Friday, December 30, 2016

2016 Review & 2017 New Year Resolution‏

This week is reflection period as we clocked down 2016 to the last day of the year.

Personal Objective is always something personal which I look back from time to time to see where the indication of the goal is. They are not exhaustive by any measure but they give a direction to where I wanted to focus during the year.

I tried to do this at least once every 6 months to see where the progress is. The last review was during the mid year sometime in Jun (Link Here).




2016 Review

1.) Individual Performance vs Market Benchmark

I understand there's a couple of people who kindly commented on the process in my previous post on the XIRR return.

They are very good feedback which I will take into consideration and revise the process moving forward.

Notwithstanding that into consideration, I think I did pretty reasonably well for this year on this one.

Verdict: Pass


2.) Dividend Income of $24,000

This was a rather stretch goal to begin with as I did not keep much of the passive strategy as much as I would have liked. I also bought and sold companies during the year instead of buying and keeping them.

I didn't do well on this one as the amount of dividend income fell short in 2016.

Nevertheless, I'll try again for this in 2017 and hoping to achieve on the same this time round.

Verdict: Fail


3.) Attend at least 3 AGMs

I completed this in the first half of the year and completed 5 AGMs.

It has been a true pleasure to attend the meeting and get to know more insight talking to the management and knowing the company's prospect.

I would do the same again in 2017 as much as time permits.

Verdict: Pass


4.) Better Health and Fitness

With kid(s) around, everyday is tough and tiring with so much activities to fit into a regular day.

However, health has visibly improved as I began to construct my sleeping pattern more regularly (no more midnight football) and eat healthier food.

I also exercised more regularly by swimming at least once every weekend.

Verdict: Pass


5.) Increase spending on intangible relationship and learning

There's a lot more meet-up this year as compared to the last.

One of our 2016 Meet Up

More relationship building, more long lasting friendship and more networking, all for the good cause of helping one another become a better person.

Verdict: Pass


2017 Goals

1.) Portfolio Networth of $600k

I'm going to give myself quite a big stretch target here so I have put $600k as a goal by the end of next year.

I am expecting a capital injection in the range of $40k next year, so the rest would have to come from either dividend or capital gain.

Let's try to see if this is achievable.


2.) Dividend Income of $24,000

I'm going to redo this goal because it is one of the only one which I failed to reach in 2016.

This would equate to a $2k/month dividend income so that'll be a rough ball-figure park for me to note.


3.) Build up on the Child's Portfolio

I'll have two kids by the time 2017 hits so I'll need to work around and think of building this up in tandem with my own portfolio.

The goal is to buy companies that have decent growth and roe over time since this will compound for many more years to come. In the local market, I'd be taking a close look on banks to do that.


4.) Project Miles

I am on the personal project of chalking up miles so that I will be able to redeem them for my traveling hobby.

Currently, I am using the Citi Premier Miles as well as the Amex Krisflyer and the points have been chalking up nicely. To date, I have about 60,000 miles notwithstanding the bonus miles received.

I'm unlikely to travel in 2017 due to the newborn situation so I'm keeping this for 2018 and beyond.


5.) Influencing Personal Finance and Investing Interests Amongst Close Friends

I've received a couple of requests, both online and offline about asking me to help them to start engine their financial journey.

I think this is just about getting them interested in personal finance and some of the basic finance 101 stuff which allows them to get going for the much longer run. Once they are well equipped with the handling of money, then the harder part would be onto the how to grow the money, which is essentially what I am doing at the moment.

It's nice to be able to just extend my assistance in any way they need.


Summary

So 5 goals there for 2017 to aim for.

I hit 4 out of the 5 goals in 2016 and I am looking forward to hitting all bulls eye on 2017 target.

Happy new year everyone and have a blast year ahead in 2017.



Wednesday, December 28, 2016

Recent Action - LMIRT

This will be a quick update on my latest addition to the portfolio as I tried to allocate some capital from the profits made on Spackman sold this week.

I added 80,000 shares of LMIRT at a price of $0.37. My rough calculation tells me that's about 9% yield on the dividend.

People who know me knows that I used to work as an employee there so I'd probably not talk too much about the specifics operational performance of the company. 

CEO Alvin has also since then left and is currently vacated temporarily by Albert Cheok.

The main reason I'm buying this right now is I am predicting a few phases of growth in the next couple of years, both in terms of micro and macro.



Macro Factors

The tax amnesty reform is a super huge thing that happened across in 2016 for all Indonesians. These amount of money will be used for fiscal policies in improving the infrastructure of the country.

GDP growth seemed to bottom in 2016 and has seen a reversal in the last 3 quarters and expected to drive up further in 2017 and 2018. 

The rupiah currency has also seen some strengthening as a result of this reform.




The government has introduced a string of reform policies in a bid to build up the economy back and they streamline and welcome foreign investment into the country.

Central bank has also eased rates and required reserves for helping the economy to pick up.


Micro Factors

Operationally, rental reversions continued to be strong over the last 20 quarters and is expected to pick up even further in 2017 and 2018 as economy picks up.

The company has 23% of the lease that needs to be renewed in 2017, so I see this as a positive growth which will contribute to the bottomline.



The company has bonds and term loans that ranges from 3% to 5.18% with a weighted average expiry of 2 years. The company has recently acted by issuing a perpetual bond to refinance the existing term loan expiry albeit at a higher yield since this is classified under the equity portion of the balance sheet. Interest costs will reduce as a result but distribution will have to be considered for these perpetual security shareholders.

Summary

I am not expecting too much for this other than for the dividend yield and the natural growth from the organic portfolio.

This would fall under the 9 + 2% strategy, at least of what I see in 2017 and 2018.

I'll review again every quarter of the performance and development.

Thanks for reading.


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