Black Monday

This post is to commenerate the largest single-day drop in portfolio of my investing journey so far, and the largest absolute number single-day decline (-178 pts) in the STI history.

Even though I went through the oil crisis of 2015, my portfolio was relatively small back then. Like maybe 50k. A 20% drop back then was a mere $10k, nothing more than a couple of months of salary.

Not today. My stocks portfolio have since grown immensely and the daily swings are simply insane (plus minus $5k daily). This is really my first bear market, the first real test of my nerves.

A test of whether I have the stomach to stick to my investing principles and every long-term investing knowledge I have learnt. Every investing article, every warren buffet advice, every financial principle - it is useless if I do not execute them and capitulate like the herd. There is no use "fighting war on paper". 

This could be the once-in-lifetime opportunity to buy stocks for very cheap, and I count my blessings that I still have a substantial cash warchest to average down.

People who kept saying that cash is 'wasteful' and 'low returns' have come face to face with a bear before. The "psychological defence" it provides is invaluable and cannot be measured in dollars alone.

Here's what I have to constantly remind myself:

For my various speculative stocks, there is nothing I can do now. I guess it is a lesson learnt and I might just have to write them off if they don't rebound after the crisis.

For most of my holdings I am very sure they are excellent, solid companies. Why do I care if they crash 10, 20 or 30% today? 

I am not selling . I am looking to buy and hold good companies for the next 20 years.

I am STAYING THE COURSE

“Bear Markets: When stocks are in a Bear Market (U.S., International, or both), you will be strongly tempted to sell at least a portion of your stock funds. DON’T DO IT. This is the time when stocks are on sale at lower prices. Sticking with your allocation means you likely will be buying low and selling higher when you rebalance – the opposite direction of the herd. Rebalance by adding to your stock funds until you have again met your desired asset allocation. This is the most difficult (but most important) thing you can do in a Bear Market.”

So...

How much did I lose in ONE SINGLE DAY?

$13,500

Year In Review 2019 - Annual Financial Report

Presenting 2019 Annual Financial Report! (Yes, it's late and Wuhan virus is now wrecking havoc! Neverthless, we are sticking to what to know as of early Jan)


Key Highlights & Notes From CEO

"Work Hard Now, So We Don't Have To Work Hard All Our Lives"

"When you save for the future, you actually allow yourself to live in the moment.

Most people get this completely backwards. They live in the moment, which kills their ability to save for the future (aka YOLO). My plan is to flip that script. By sacrificing a few years when I'm younger, I am building a financial foundation that will last a lifetime."

This year marks the 3rd into the new job and it could be a good time to move on. We broke some significant financial milestone this time:

Financial Milestone (2019)
1. Passive income enough to cover all basic recurring expenses
2. CPF Met the Full Retirement Sum of 2019

Achievements (2019)
1. Total net asset value grew 21% despite topping up $7000 to CPF-SA
2. Annual saving rate of 78.9% (80.8% in 2018, 80.5% in 2017, 78.2% in 2016)
3. Safety passive income now cover 65% of our recurring expenses
4. Portfolio market value grew 20% (inclusive of capital injection and gains)
5. Portfolio XIRR for 2019 at 14.23%
6. By Pay-Date, distributed over $8300 worth of dividends ($7800 in 2018, $4900 in 2017)

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Income Statement (2019)
Total income was merely 2% higher due to the huge bonus cuts.

Passive income growth was only 7% after selling M1 and Capitamall, and most new dividend stocks were brought later in the year. We also suffered from saving account interest cuts among the various banks.

Expenses were about $3000 higher with the signicant ones being:
1. Higher income taxes
2. Genting Dream Cruise vacation in Feb
3. Taiwan trip in Apr
4. Takeover of all insurance policies
6. Birthday angbao to parents (Same as last year)
5. Samsung Galaxy Note 10

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Balance Sheet (2019)
Survival Burn Rate = Recurring expenses needed for essential survival
LEAN FI Rate = All expenses needed to maintain our current lifestyle
FI Rate = Lifestyle with built-in buffer that we want to achieve in Financial Independence

While the red-line grew significantly, yellow and green line remained flat thanks to much higher discretionary spending.

Our goal remain the same - to exceed 25 years for the yellow line by year 2021.

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Recurring Expenses Breakdown
Categorical expenditures remained pretty much the same as every year. Top expenditures were the essentials - food, travel (transport) and utilities (internet and phone).

Random discovery time!

1. Lottery spending was around $250 (Almost $100 lesser than 2018). Won 1 single Group 6 of $10.

2. I ate fast food 60 times (64 in 2018, 70 in 2017, 81 in 2016), counting only lunch, dinner, supper. Managed to meet my goal (right on the mark!) of cutting down fast food. I think this is as far as I can go for now.

3. I brought 48 (22 in 2018, 11 in 2017, 31 in 2016) cups of Bubble Tea this year, much more than previous years. This is due to... influences from BBT loving colleague. Haha.

4. I brought 17 cups of Cafe drinks (4 last year), similar to reasons above.

5. Visited restaurants 37 times (32 in 2018, 20 in 2017). My most expensive single trip restaurant is $37.

6. Only 5 KTV (10 in 2018) sessions for the entire 2019! (Excluding JB trips)

7. 13 Taxi/Grab trips this year, spending less than $150.

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Portfolio Performance

An exceptional year where we beat the index handily.

This year, we injected almost $40,000 into the stock market (STI, Sembcorp Industries, Eagle, F&N, Capitmall Trust and Accordia Golf Trust).

Year	Portfolio	ES3
2014	-2.94%	7.00%
2015	-8.17%	-10.95%
2016	11.97%	2.69%
2017	22.00%	20.68%
2018	-10.40%	-7.43%
2019	14.01%	8.78%

Our biggest losses remains Kimly and Sembcorp Industries, offset by the insane REIT rally.

Excluding the STI, we have a healthy and diversified portfolio of 12 holdings (up from 11 last year and 10 in 2017).

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Review of 2018 Goals
Missed our goal of hitting $10,000 dividends due to the insane market rally (no chance to buy the good REITs at all!)

Outlook For 2020
We will continue our core strategy of building up a divesified income portfolio backed by index foundation. We are more than 10 year into the bull-run and the music got to stop one day.

Once again, our ammunition have replenished entirely after December, and would fatten even more in March. Hopefully we have opportunities to deploy them before the dividends season come in Q2.

We will be bring forward last year goal to exceed $10,000 worth of dividends - hopefully we get some Great Singapore Sale.

There is a good chance of a income source switch which would definitely have impact on revenue. For now, we would let nature take its course.

Long Term Goals
Our long term roadmap remains the same - And this year marks the year we intend to diversify into more global markets. Although I am personally confident in Singapore, I still could not risk placing all our money in 1 basket. What if we experience a lost decade like Japan?

- Open Interactive Brokers Account (Start with DCA and within 2 years grow it to more than $100K USD when we can enjoy $10 platform fee waiver)
- Indexing World ETF via IWDA + EIMI (Can it drop below $50?). Both ETFs automatically reinvest dividends (i.e accumulating units).
- Indexing for China via Heng Seng Index (HK 2800). China growth in the next 20 years should be immense.
- Local portfolio reached substantial size to start lending shares for extra income

5 Year Masterplan:

Year 2020: Start diversifying into global markets.
Year 2021: Reach "25 Years Expense" Networth.
Year 2022: Eligibility to buy HDB.
Year 2023: Passive income completely cover all-expenses. Save 100% of salary annually.
Year 2025: Financial Independence.

Rationalizing Affairs of the Heart

Although this is still painful, I am grateful for this experience - the pain is short term but the lessons learnt are lifetime. I feel that in the long term I would be a much better person because of it. Someone who is more observant and more initiative.

That aisde, my friend have helped a lot in rationalizing all this, and after thinking about it, I have also come to my own reasons to get over this.

And I think it is super important to write this down, to help me get over it now and to remind me of it in the future.

Now, if I really want to stop our friendship forever and cut off all contact, I would rationalize this whole event with the most negative things about that person, like:

1. Fickle-minded
2. Trying to lead people / laying a trap with false signals
3. Attention-seeking / enjoy the feeling of being pursue by many people
4. Something much worser that I cannot even bring myself to write it here (who would do something like that?)

Now, I do not like to think the worst of people, and I genuinely think she is not somone like that (at least at this point of time).

Even I am confused about what I am feeing, what more someone who is so young? So, I prefer to rationalize it as:

1. She is confused about her own feelings (towards me and others)
2. She is immature / trying to fill some kind of void in her life.
3. She legitly felt obliged to keep to her word.

...

Ultimately, does it really matter?

Action speaks louder than words. She may say one thing. She may keep crying. She may say she regret things and claim she has more feeling for you.

But no matter what was said, the choice she made in the end speaks for everything. 

It does not matter how much a person say she likes you. The fact that she did not choose you in the end already says everything.

At worst, the feeling wasn't there in the first place (and she is all the type of person described above). At best, the feeling wasn't strong enough for her to choose you.

So, what more is there to hold on to?

:)

I felt much better after writing this post.

Complex Emotions

Isn't weird how we can confuse feelings of:

- The Love of genuinely liking someone
- The Regret of a missed opportunity / sense of loss
- The Fear of being alone

Yes, emotions are complex - they are not binary and they are not stand-alone. That makes it difficult to evaluate them in a vaccum.

But sometimes it is really a 当局者迷 kind of thing... you really need someone who have been through this to offer a different perspective, especially when you are someone who is not constantly 'in the game'.

Really happy to talk so much with a good friend for an entire evening. Super thankful for his advice and sharing of his own experience.

Felt so much better and relieve.

Somehow I already feel that I am on the way to getting over this.

Killing My Other Self

Sorry I had to ignore your messages, because anything you do for me now will simply make the ZZ that likes you stronger.

He is no longer wanted nor needed in this world, so I had to do what I can to kill him. 

Everything within my power.

Everything I can. 

He is fking strong. So strong. Much stronger than I thought.

He wakes me up in the middle of the night, when I have having lunch, when I am using Whatsapp, when I am at office. When I am doing fking anything.

He is ripping my heart out and shattering it. He is making me cry, making me feel like dying.

Everytime he comes out, I need to stab him without hestiation.

Each time he show himself, I must show him no mercy.

Give him no chance to build momentum. Give him no chance to linger. No chance to grow.

I don't know how long it will take, but I will kill him.

Even if I can't, I would knock him into a coma forever.

Once he is dead, I can look for and bring back the ZZ that is your best friend.

https://www.youtube.com/watch?v=k0GQSJrpVhM