Back in 2013, I fought a very important battle.
But alas, it was not to be.
I was not prepared. I was not experienced enough yet.
...
Now...
Coming to the end of 2014, another has come knocking on my door.
This is probably the first invitation that I am TRULY interested in.
All the training these 2 years.
All my knowledge, my skills, my enlightenment - It's time to organize and consolidate them.
This is a very very important battle.
I MUST give it my best shot.
Tuesday, December 30, 2014
Sunday, December 28, 2014
First Annual Report
Received my first ever "Annual Report" as a shareholder of Frasers. Fully colored!
In it, the management team lists out:
- How the company has performed over the past year, and the reasons contributing to its success/failure
- Summary of the company assets (value of each property, tenants mix, lease period, etc)
- Financial information (cash flow, liabilities, etc)
- Interesting Stuff (like how it organize charity events for the community)
- The forecast for the future, and how it intends to grow the company
- Proposed resolutions (i.e you get to 'vote') on plans for the coming year
------------------------------------------------------------------------------------------------------------------
It's like you are now the boss, and the management are reporting to you; submitting their progress report. If you are not happy with the company, you are free to sell your stakes away.
It's what I like about long-term investing. Success is based on actual performance of the something tangible, not reading charts and candlesticks.
Too many people treat investment like gambling. They buy stock based on symbols and price, hoping to sell it at a profit to others quickly.
I buy the actual business, and makes decision to buy/sell based on fundamental changes to the company. It's a long and slow process that can't provide instant gratification, but I'm enjoying the process.
Wednesday, December 24, 2014
Financial Summary 2014
2014 marks my first year in investing.
Here's a reflection on each of my pick.
1) Frasers Centrepoint Trust
$2.5 billion total assets with only $800 million total liabilities, growing revenue, profits and DPU.
My first stock - I brought this after months of deliberation and research. And it's my favourite and most trusted one to date.
My confidence only grows when I see how crowded its shopping malls are; I'm feeling secured on how defensive it is, even if it doesn't continue to grow at the same pace in the future.
2) Super Group
Looking back, I must say this is an impulse buy. Not just because the price took a huge dive, but because I didn't really spend that much effort evaluating it.
I was too "eager" after purchasing my first stock, and didn't do as much homework on this one. Thankfully, I held back a little and took a smaller positio.
Regardless, I feel quite safe with their solid balance sheet: $77 million cash with negligible debt. They also have upcoming new products, good track record and a quite specialized food ingredient business.
I don't feel comfortable averaging down, but I'm hopeful holding for the long term.
3) China Merchant Pacific
A strong pillar of my income investing strategy. The yield is amazing for its price - I'm getting ~$700/year from this alone.
It managed to turn Jiuirui expressway from loss-making to profit the first quarter after acquisition.
Strong backing, solid balance sheet, impressive management, and good valuation. The reason I haven't brought more is only because it would tilt my portfolio too much (can't put all your eggs into one basket).
Shall look forward to add more when the chance arrive.
4) Sembcorp Industries
The shares drop quite a bit recently as well with the oil crisis, but this is one purchase I don't regret.
I was even disappointed when the price rebounded as I'm looking to add more positions should it hit $3.8.
Overall, I'm confident of the defensiveness and growth of its utilities segment. As mentioned, garbage always has to be cleared, water and power have to be provided.
5) Cash Holdings
Being new to investing, I still feel much safer with more cash on hand.
Some may see it as missed opportunities, but I see it like my master - who refers to it as an "armageddon fund".
Your cash is like your troops. You need to strike when the enemy is weak, not when it's strong; You'll amass huge casualties.
Moreover, as a newbie, it's much wiser to send small scout forces to 'test water, to gain experience. Having the majority of the force defend the capital makes me feel safer at night.
6) Thoughts
Over the year, I've been saving up a huge part of my income. I must say that I really spend a lot lesser compare to friends of my age. I guess that's one of the benefit of being a loner. :)
I think I have been able to save as much as 80%, sometimes even 90% of my income, excluding any major purchases (which is none in 2014). This aggressive saving has allow me to build up a 2 year emergency fund (which I'll never touch), an armageddon fund (for war), and purchase the stocks above.
I'm really working hard towards achieving financial freedom without compromising on quality of life.
7) Goals for 2015
Next year will be my first "full year" investing. No more "pro-rated". I think there's a need to set some concrete goals, something for me to work towards.
- To achieve an average passive income of $200 per month
I don't want to set the amount too high, as it would force me to make purchases that is not "value for money". At the same time, it should be a reasonable step forward from what I have now.
- To dutifully track my expenses for 1 year
I have done this previously for a couple of months, but it was excel-based, and not in the ideal structure. This time round, I hope to setup a real intelligence system about my spending habits. Categorizing each items and tracking them as I spend (instead of basing them off memory).
Hmm... I need a good mobile app for this though. Hopefully at the end of the year I'll be able to come up with some meaningful charts.
Last but not least, I also aim to read a few good investment books and share my thoughts here.
Here's a reflection on each of my pick.
1) Frasers Centrepoint Trust
$2.5 billion total assets with only $800 million total liabilities, growing revenue, profits and DPU.
My first stock - I brought this after months of deliberation and research. And it's my favourite and most trusted one to date.
My confidence only grows when I see how crowded its shopping malls are; I'm feeling secured on how defensive it is, even if it doesn't continue to grow at the same pace in the future.
2) Super Group
Looking back, I must say this is an impulse buy. Not just because the price took a huge dive, but because I didn't really spend that much effort evaluating it.
I was too "eager" after purchasing my first stock, and didn't do as much homework on this one. Thankfully, I held back a little and took a smaller positio.
Regardless, I feel quite safe with their solid balance sheet: $77 million cash with negligible debt. They also have upcoming new products, good track record and a quite specialized food ingredient business.
I don't feel comfortable averaging down, but I'm hopeful holding for the long term.
3) China Merchant Pacific
A strong pillar of my income investing strategy. The yield is amazing for its price - I'm getting ~$700/year from this alone.
It managed to turn Jiuirui expressway from loss-making to profit the first quarter after acquisition.
Strong backing, solid balance sheet, impressive management, and good valuation. The reason I haven't brought more is only because it would tilt my portfolio too much (can't put all your eggs into one basket).
Shall look forward to add more when the chance arrive.
4) Sembcorp Industries
The shares drop quite a bit recently as well with the oil crisis, but this is one purchase I don't regret.
I was even disappointed when the price rebounded as I'm looking to add more positions should it hit $3.8.
Overall, I'm confident of the defensiveness and growth of its utilities segment. As mentioned, garbage always has to be cleared, water and power have to be provided.
5) Cash Holdings
Being new to investing, I still feel much safer with more cash on hand.
Some may see it as missed opportunities, but I see it like my master - who refers to it as an "armageddon fund".
Your cash is like your troops. You need to strike when the enemy is weak, not when it's strong; You'll amass huge casualties.
Moreover, as a newbie, it's much wiser to send small scout forces to 'test water, to gain experience. Having the majority of the force defend the capital makes me feel safer at night.
6) Thoughts
Over the year, I've been saving up a huge part of my income. I must say that I really spend a lot lesser compare to friends of my age. I guess that's one of the benefit of being a loner. :)
I think I have been able to save as much as 80%, sometimes even 90% of my income, excluding any major purchases (which is none in 2014). This aggressive saving has allow me to build up a 2 year emergency fund (which I'll never touch), an armageddon fund (for war), and purchase the stocks above.
I'm really working hard towards achieving financial freedom without compromising on quality of life.
7) Goals for 2015
Next year will be my first "full year" investing. No more "pro-rated". I think there's a need to set some concrete goals, something for me to work towards.
- To achieve an average passive income of $200 per month
I don't want to set the amount too high, as it would force me to make purchases that is not "value for money". At the same time, it should be a reasonable step forward from what I have now.
- To dutifully track my expenses for 1 year
I have done this previously for a couple of months, but it was excel-based, and not in the ideal structure. This time round, I hope to setup a real intelligence system about my spending habits. Categorizing each items and tracking them as I spend (instead of basing them off memory).
Hmm... I need a good mobile app for this though. Hopefully at the end of the year I'll be able to come up with some meaningful charts.
Last but not least, I also aim to read a few good investment books and share my thoughts here.
Tuesday, December 23, 2014
Year in Review 2014
Been a while since I did one of these.
In the past year, it felt like I've grown tremendously in the financial department (not in monetary terms, but knowledge). Hopefully, my career can progress by the same magnitude next year.
Career
- Completing my 2nd major project. It was tough, taking about the majority of the year, but I've made it.
- Pass an emerging certification in my field. Whew.
- Felt that I could have done much more... If only there is a more...
- Got to know a new group of colleagues, which actually made me feel much better about my past circumstances.
Financial
- Undertook huge steps to improve my financial knowledge, and took concrete steps to act upon them.
- Reading financial articles has now become a daily routine for me. I've even consolidated a personal news feed of my favourite sources.
- Built up a significant war chest in preparation...
- This also mark my first year investing in stocks. In office, I've come across several like-minded friends as well. (though some of them believe in speculation, while I believe in long-term investing)
- Next year, there will be a huge shakeup in my income source. Haiz.
- Shall elaborate more on a separate post on an upcoming post.
Health/Fitness
- Failed the "Incredibly Painstaking Painful Test" for the first time... but I've began actively training for the new test. I've embarked on this journey a couple of times in the past, but always gave up halfway. Not gonna happen this time.
- In terms of health, can definitely feel myself getting older... stretched myself a few times... #_#
Relationship
- Pretty much mixing with the same few gangs.
- Met a new "group" towards the end of the year... and I was prompted about some of them. What? Do you think this is an idol drama?
Others
- I did another tabulation of my "M-Collection". I went to do a search on when was the last time I did this, and it was WAY BACK in 2006. Since then, it was grown from 1110 to 4660. Amazing.
Major Games Played: Hearthstone, League of Legends Season 4 World Championship, Tropico 4, Democracy 3, Stronghold Crusaders II, Prison Architect, 7 Grand Steps, Banished
Major Dramas Watched: Walking Dead, Demi Gods and Semi Devils 2013
Best Let's Play: Walking Dead Season 2, Wolves Among Us
Best Movies: Hobbit 3, Frozen, Baymax
In the past year, it felt like I've grown tremendously in the financial department (not in monetary terms, but knowledge). Hopefully, my career can progress by the same magnitude next year.
Career
- Completing my 2nd major project. It was tough, taking about the majority of the year, but I've made it.
- Pass an emerging certification in my field. Whew.
- Felt that I could have done much more... If only there is a more...
- Got to know a new group of colleagues, which actually made me feel much better about my past circumstances.
Financial
- Undertook huge steps to improve my financial knowledge, and took concrete steps to act upon them.
- Reading financial articles has now become a daily routine for me. I've even consolidated a personal news feed of my favourite sources.
- Built up a significant war chest in preparation...
- This also mark my first year investing in stocks. In office, I've come across several like-minded friends as well. (though some of them believe in speculation, while I believe in long-term investing)
- Next year, there will be a huge shakeup in my income source. Haiz.
- Shall elaborate more on a separate post on an upcoming post.
Health/Fitness
- Failed the "Incredibly Painstaking Painful Test" for the first time... but I've began actively training for the new test. I've embarked on this journey a couple of times in the past, but always gave up halfway. Not gonna happen this time.
- In terms of health, can definitely feel myself getting older... stretched myself a few times... #_#
Relationship
- Pretty much mixing with the same few gangs.
- Met a new "group" towards the end of the year... and I was prompted about some of them. What? Do you think this is an idol drama?
Others
- I did another tabulation of my "M-Collection". I went to do a search on when was the last time I did this, and it was WAY BACK in 2006. Since then, it was grown from 1110 to 4660. Amazing.
Major Games Played: Hearthstone, League of Legends Season 4 World Championship, Tropico 4, Democracy 3, Stronghold Crusaders II, Prison Architect, 7 Grand Steps, Banished
Major Dramas Watched: Walking Dead, Demi Gods and Semi Devils 2013
Best Let's Play: Walking Dead Season 2, Wolves Among Us
Best Movies: Hobbit 3, Frozen, Baymax
Tuesday, December 16, 2014
Big Purchases 2014
Another yearly update on my big purchases!
As predicted, I didn't make many major purchases this year in terms of tech gadgets (except a graphic card to replace the spoilt one).
I guessed a major part was me discovering the importance of using money to generate passive income - I really want to join the ranks of my financial idols, attaining financial freedom.
Still, I do plan to allocate about $1000 a year as my "luxury purchase" funds. For now, I'll snowball it to next year.
In 2015, I don't see any major hoots either.
Phone - I guess I've outgrown it. I don't really use my phone for anything other than FB and Whatsapp. Why do I need quad cores, octa cores, or n cores? Unless something revolutionary and actually useful (like 1 week battery life) comes along, I don't forsee changing my phone anytime soon.
Tablet - Same as the phone, Nexus 7 still serving me well. Was tempted to hoot the Ipad Air 2 for a while, but once again realize how much of a waste it would be. I don't use my tablet for any purpose other than watching Youtube.
Travel - Already planned a trip to Taiwan in June... hopefully this time will come to fruition.
Others - I've actually been looking to buy a good mattress. Not sure if I'm gonna make up my mind and hoot one... good ones are really expensive.
------------------------------------------------------------------------------------
2006 - Complete PC Overhaul (Core 2 Duo) [MEGA]
2007 - 22' LCD Monitor, Sony Ericssion W950i, Digital Camera
2008 - NEC Versa S3500 Laptop [MEGA]
2009 - Cowon S9, Westone 1, Radeon HD4870
2010 - HTC Desire
2011 - Shanghai Trip, Braun Series 7-790
2012 - Mayday's Noah Ark, Major PC Overhaul (Ivy Bridge) [MEGA], Westone UM2X
2013 - Dell 2713HM Monitor, Haworth Zody, HTC One [MEGA], Mayday's Noah Ark II, S.H.E Together 4Ever, Google Nexus 7 (2013)
2014 - PowerColor Radeon R9 270X
Major Purchase - $200 to $1000
Mega Purchase - Near $1000 and Above
As predicted, I didn't make many major purchases this year in terms of tech gadgets (except a graphic card to replace the spoilt one).
I guessed a major part was me discovering the importance of using money to generate passive income - I really want to join the ranks of my financial idols, attaining financial freedom.
Still, I do plan to allocate about $1000 a year as my "luxury purchase" funds. For now, I'll snowball it to next year.
In 2015, I don't see any major hoots either.
Phone - I guess I've outgrown it. I don't really use my phone for anything other than FB and Whatsapp. Why do I need quad cores, octa cores, or n cores? Unless something revolutionary and actually useful (like 1 week battery life) comes along, I don't forsee changing my phone anytime soon.
Tablet - Same as the phone, Nexus 7 still serving me well. Was tempted to hoot the Ipad Air 2 for a while, but once again realize how much of a waste it would be. I don't use my tablet for any purpose other than watching Youtube.
Travel - Already planned a trip to Taiwan in June... hopefully this time will come to fruition.
Others - I've actually been looking to buy a good mattress. Not sure if I'm gonna make up my mind and hoot one... good ones are really expensive.
------------------------------------------------------------------------------------
2006 - Complete PC Overhaul (Core 2 Duo) [MEGA]
2007 - 22' LCD Monitor, Sony Ericssion W950i, Digital Camera
2008 - NEC Versa S3500 Laptop [MEGA]
2009 - Cowon S9, Westone 1, Radeon HD4870
2010 - HTC Desire
2011 - Shanghai Trip, Braun Series 7-790
2012 - Mayday's Noah Ark, Major PC Overhaul (Ivy Bridge) [MEGA], Westone UM2X
2013 - Dell 2713HM Monitor, Haworth Zody, HTC One [MEGA], Mayday's Noah Ark II, S.H.E Together 4Ever, Google Nexus 7 (2013)
2014 - PowerColor Radeon R9 270X
Major Purchase - $200 to $1000
Mega Purchase - Near $1000 and Above
Friday, December 05, 2014
Value of a Car
For the past month, I've had the luxury of having the family car all to myself.
Driving it to work everyday, going to 'faraway places' to attend wedding dinners, etc...
And it makes me wonder, how much value would I place on a car?
To tell the truth, not much. I have no idea why some people place so much emphasis on having a car - to the point that they would pile on debts just to own one.
1. How much does a car TRULY cost in Singapore?
Many people underestimate this. Just look at this article for a good idea.
I can safely say even if you take a cab to work everyday for the next 10 years, it'll still be cheaper than owning a car.
2. What is the OPPORTUNITY cost of using the $ to buy the car, instead of compounding it?
A car is a depreciating asset that loses its value every year, until it reaches a big fat 0.
Let's estimate that value to be say, $200k. Do you know how much passive income you can get by investing that $200K?
If you use that same $200k to buy 100 lots of Frasers Centrepoint Trust, you can get about $12k a year, or $1000 EVERY MONTH.
Take a moment to let that sink in.
...
That means in 10 years, you will get back about $120k worth of dividends + original capital = $320k. And that's not even including capital gains.
If you use it on the car? You can get back, $0. Big fat kosong.
WOW.
Now tell me why the hell you would want to buy that car.
3. Miscellaneous
Maybe it's just me, but here are my thoughts after exclusive usage of the car for the past month:
- Yes, it's convenient and much more comfortable, but it actually isn't that much faster. It probably shaves off like 10-15 mins during the morning rush hour. Finding parking lot is sometime a huge pain too.
- I can spend the 1 hour on train reading news, watching movies, etc... instead of getting stuck in the jam.
- Owning a car comes with many 'additional responsibilities'. People expects you to "give them a lift", etc... Not that it's much of a deal, but it's something worth noting.
Overall, I just feel the cost simply isn't worth it for the little extra convenience and comfort. There's always a cab available ($20, which equals to a day's parking in the city).
Bottom Line
Unless you're in a role that really need that car to generate much more income for you (e.g. Sales), or, you are damn frigging rich, then I see no reason to buy the car.
I have no intention of getting one either in the foreseeable future. I rather have the money generate more money for me.
Once again, compound your $. Even investing in an extremely safe place (e.g STI) will double your $ every 20 years.
Driving it to work everyday, going to 'faraway places' to attend wedding dinners, etc...
And it makes me wonder, how much value would I place on a car?
To tell the truth, not much. I have no idea why some people place so much emphasis on having a car - to the point that they would pile on debts just to own one.
1. How much does a car TRULY cost in Singapore?
Many people underestimate this. Just look at this article for a good idea.
I can safely say even if you take a cab to work everyday for the next 10 years, it'll still be cheaper than owning a car.
2. What is the OPPORTUNITY cost of using the $ to buy the car, instead of compounding it?
A car is a depreciating asset that loses its value every year, until it reaches a big fat 0.
Let's estimate that value to be say, $200k. Do you know how much passive income you can get by investing that $200K?
If you use that same $200k to buy 100 lots of Frasers Centrepoint Trust, you can get about $12k a year, or $1000 EVERY MONTH.
Take a moment to let that sink in.
...
That means in 10 years, you will get back about $120k worth of dividends + original capital = $320k. And that's not even including capital gains.
If you use it on the car? You can get back, $0. Big fat kosong.
WOW.
Now tell me why the hell you would want to buy that car.
3. Miscellaneous
Maybe it's just me, but here are my thoughts after exclusive usage of the car for the past month:
- Yes, it's convenient and much more comfortable, but it actually isn't that much faster. It probably shaves off like 10-15 mins during the morning rush hour. Finding parking lot is sometime a huge pain too.
- I can spend the 1 hour on train reading news, watching movies, etc... instead of getting stuck in the jam.
- Owning a car comes with many 'additional responsibilities'. People expects you to "give them a lift", etc... Not that it's much of a deal, but it's something worth noting.
Overall, I just feel the cost simply isn't worth it for the little extra convenience and comfort. There's always a cab available ($20, which equals to a day's parking in the city).
Bottom Line
Unless you're in a role that really need that car to generate much more income for you (e.g. Sales), or, you are damn frigging rich, then I see no reason to buy the car.
I have no intention of getting one either in the foreseeable future. I rather have the money generate more money for me.
Once again, compound your $. Even investing in an extremely safe place (e.g STI) will double your $ every 20 years.
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