7 Warning Signs of A Bubble

1. When the price of the asset goes beyond it's intrinsic value (when the price goes 'parabolic' 90 degree angle instead of at a 45 degree angle on a chart). Use an 'intrinsic value calculator'.

2. People say, "This time is different!" Don't believe you're the exception. Stick to the rules.

3. When Aunts and Uncles (laymen) join the investing party (optimism is at an all time high) when they normally don't invest in the market.

4. The media sensationalises high returns and overnight millionaires.

5. Increased use of leverage (borrowing money and using margin to buy stocks) by speculators.

6. The talk of the town. Everywhere you go everyone is recommending to invest in a certain market.

7. When doubters and skeptics are disregarded.

Year In Review 2020 - Annual Financial Report

Presenting 2020 Annual Financial Report! 

Key Highlights & Notes From CEO

Financial Milestone (2020)

1. Passive income grew by $150/month despite COVID recession
2. CPF MA exceeded BHS, CPF exceeded FRS 2020. Top up another $7K.

Achievements (2020)
1. Liquid net asset value grew 11% despite topping up $7000 to CPF-SA
2. Total saving rate of 81% % (77.4% in 2019, 80.8% in 2018, 80.5% in 2017)
3. Safety passive income now cover 84% of our recurring expenses (skewed by COVID)
4. Portfolio market value grew almost $100K (inclusive of capital injection and gains)
5. Portfolio XIRR for 2020 at 14.23%
6. Yearly dividend exceeeded $10000! ($8300 in 2019, $7800 in 2018, $4900 in 2017)

"And they say money doesn't grow on trees... well, they grow on Mapletree."

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Income Statement (2020)
Total income is about 4% higher despite the massive bonus cuts (no mid year and year-end) and dividend cuts (circuit breaker)

Passive income still grew around 25% thanks to the largest ever capital injection in 1 year.

Expenses were about $3000 lesser (in line with 2018), with the signicant ones being:
1. Birthday angbao to parents (gave about $600 than last year)
2. Lenovo S540 Ryzen 7 Laptop (about $1400)

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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), heavily skewed by working from home (an average of twice a week in office)

Random discovery time!

1. Lottery spending was only $120 (lowest ever). Won a single System 7 Group 6 of $40.

2. I ate fast food 60 times (60 in 2019, 64 in 2018, 70 in 2017, 81 in 2016), counting only lunch, dinner, supper. Same a last year and think we'll maintain this.

3. I brought 14 (48 in 2019, 22 in 2018, 11 in 2017, 31 in 2016) cups of Bubble Tea

4. I brought 9 cups of Cafe drinks (17 last year)

5. Visited restaurants 32 times (37 in 2019, 32 in 2018, 20 in 2017). Most expensive single trip restaurant is $34.

6. Only 2 KTV sessions and 2 movies! (RIP Teo Heng)

7. 10 Taxi/Grab trips this year. Overall, spent about $400 less on transport expenses.

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Brokers Promotion Galore
Just as banks cut back on interests, we have many competitors entering the local brokerage scenes. After much research, I finally went with Tiger Brokers (for now) due to its numerous promotions (free stock vouchers, angbaos, etc... I have earned around $150 now, on top of the CNY hamper).

I will probably eventually move to IBKR SG once my global portfolio reach a more significant amount, mainly due to the following:

1. Accessibility to London Stock Exchange for Irish Domicile funds (IWDA, EIMI, here I come). 

2. Near spot forex exchange rate (with $2 minimum), compare to closest competitors 0.3% to 0.5%. It is not even close. All commission and forex exchange fees would count towards off-setting the minimum $10 activity fee.

4. A lot of its competitors pricing are "promotional pricing". Will it still be as cheap once they secure enough market share?

5. IBKR is a long-standing internationally renowned broker, secured by SIPC for up to $500K USD (think of it as the SDIC equivalent in Singapore)

Investment Moats has an incredibly comprehensive guide on IBKR:

https://investmentmoats.com/money/easy-step-by-step-guide-setup-interactive-brokers-ibkr

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CPF Actions

At first I only expected to top up for 1 year, but it seems to be becoming a regular thing (heh), especially with interest rates at an all time low. 4% risk free is really difficult to beat, and I have since discovered even more CPF "hacks" as the government introduces even more incentives.

1. In 2021, CPF introduces the Matched Retirement Saving Schemes. Being a housewife, it's a no brainer to top up $600 for my mum (100% returns?!)

2. My parents also earn up to 6% on the first $30K which is really incredible. Even blue chips stocks and reits might not yield you that amount.

3. Having met the FRS, I can actually transfer any additional amount to my parents (basically earning the extra interest, from 4 to 6%). And my parents are at the eligible age to draw out, meaning I am in a way "spending" my CPF money.

4. Any unused amount would be return to your own CPF account (if you do CPF transfer). If you do a cash top up, it is consider a gift and not recoverable (will be distrubuted according to nomination).

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Outlook For 2020
We finally ventured into foreign market and I brought my first ever foreign holding in HKEX - Alibaba.

I forsee myself buying more foreign stocks to diverse away from my Singapore holdings - my watchlist includes FAANG, Tesla, ARK ETFs and HK Tech ETF 3067, but they are really pricy at the moment. Any significant correction would be great to add more positions.

Life Updates 2019-2020

1. 2019 I've been watching a lot of  "Chinese Games" let's play - 洛克群侠传，武林群侠传前传，中国式家长, 天命奇御, 还愿 (This is darn good and strongly recommended). It is an odd digression from the norm.

2. Lot of "edutainment" channels that are really poisonous. Listing my personal favourites:

Edutainment: 老高,  健客行, 李永乐老师. 

Crime Solving: X 调查, 老K奇谈, wayne調查

Political Discussion/Entertainment: 夜问, 宅卡拉

Movies: 老邪说电影，大象放映室

For Sleeping: 街头象棋

Good Old Entertainment: Onion Man

3. English channels wise, I'm hooked on cute animals like MilkyBokiTan, MochaMilk, MayaPolarBear. I also watched variety like FamilyFeud, Weakest Link 2020

4. Games wise I'm still mainly playing Hearthstone, and in end 2020 got hooked on Legends of Runeterra. Mobile wise I've crashed ThroughTheAges. Board games acquired on impulse - Smartphone Inc. Upcoming: Democracy 4. Frankly speaking, I don't have much motiviation to look up new games haha.

5. Social media, got hooked onto 全民 Party through the circuit breaker period from Apr 2020. Oh, Tik Tok is really quite addictive too...

6. Work-wise there isn't really nothing much to say. Operational stuff takes up a majority of the time, and I'm hoping for more opportunities to strengthen my visualization, analytics and maybe even machine learning skillset. Started on Azure and Power BI learning. Hope I have to motivation to compete more LEARN courses. 

7. Ended something that barely got started... it should have ended much early. I don't know why it took so long. At first it was Jan, then "one last chance" in Mar, but I kept felling back into the trap. Jul was the final straw on the camel back. When that moment hit and everything came flooding back into my mind (for a few weeks it was as bad as Jan 2020)...... I knew I have to end it once and for all. It took for a few months but I hope it's all over. 

8. Insomnia issues continue to plague me occassionally. God... I really need to stick to a regular seeping schedule. It is also a cause of my weekend headaches (napping for too long)

9. Since Dec 2020, I have largely been able to maintain my fitness schedule, running at least once a week and up to as much 3/4 times a week. I have also passed my IPPT with incentive! 

Letter To Shareholders (18) - Performance Review 2020H1

Economy Commentary
2020 has been so insane that I don't even know where to begin.

From Covid initial discovery in China, lockdown of Wuhan, first case in Singapore, us first being hail as the gold standard, the global pandemic, outburst in dormitories, the Circuit Breaker and now "on the road to recovery".

Everything happened so fast and it's been one hell of a rollercoaster - the market saw it fastest collapse in history where it took a mere 16 days to reach Bear Market. I could not believe my eyes when I saw blue chip companies and REITs with strong fundamentals (capitaland, mapletree) collapsed >10% overnight.

The crash was so dramatic it shook me to the core - at one point I almost capitulated emotionally (I had to ignore all daily portfolio updates). At its trough, I was down almost $80K. Thankfully, logic won in the end and I manage to persevere. As of end June, I've recovered $50K. Still, this thing is far from over and theres no telling if my portfolio can recover fully or plummet back beyond March's level.

It is always easy in hindsight to make comments like "you're so lucky to encounter a crash of a lifetime and buy big". Well, after this episode, I'll say someone deserve it if he has the guts to.

No amount of fancy charts and complicated tables assuring me that since 1939, the markets always recovered after dropping a single day of 10% can help you. No amount of Warren Buffett quotes that the markets always recover, belief in innate humanity in each of us to work towards a better tomorrow, etc... can hep you.

You must  have that unwavering conviction. All the logic can do is only appease the mind, but not the the heart when your portfolios is tanking. 

"All I could think of was my portfolio going to zero and getting a margin call from the broker to tell me that I had wiped out my account. There can’t be a recovery, if there is nothing left in the pot."

This is why I neverinvest with borrowed money.

In 6 months, we've seen numerous bankruptcies and layoffs, plus the fraud of Luckin Coffee ($50 to $3 in months), the collapse of Wirecard (once the pride of Germany), how Hertz stock can go up 300% after filing for bankruptcy. 

Closer to home, I suffered badly at the hands of Eagle Hospitality Trust (painful and valuable lesson, that the integrity of management matters more than whatever assets value they show on balance sheet). We also see blue chips like Comfort Delgro, SATS and SIA being decimated by the Circuit Breaker.

Performance Review Highlights / Acquisitions & Developments
We took massive action during the crash, dollar cost averaging 4 times into STI (spending over $40,000). brought Capital Comm Trust (at an insanely cheap price, partly to avoid odd lots after merger), DBS (long-term holding), and Accordia Golf Trust (on news of acquisition, which is now confirmed).

The 2 biggest event in our portfolio was the suspension of EHT (managers and sponsor are now accusing each other of all sorts of shenanigans, facepalm) and the demerger of SCI and SCM. 

SCI, EHT and Kimly now stands as the 3 biggest bleed in my portfolio. 

On reflection, what would I have done differently and what mistakes did I make?

SCI: If I have to think of an excuse, it would be a combination of bad luck and blind faith. I still believe the utilities business is defensive, but who would have thought oil would crash to $20 and at one point of time even went negative? I also had faith on its status as a Temasek backed company, but SCI could have easily been Keppel. In all, Temasek-backed only "ensure" the company doesn't go broke, but it doesn't mean you won't lose money (they can always issue cheap rights and have Temasek underwrite it).

Kimly: Greed. Over-focus on its "defensive" business as a coffee shop, not realizing that it's still subject to market forces (competition from food court, increasing cost of foreign labour). And of course, as a smaller cap, there is always the chance of governance issues.

EHT: I already knew it was largely gambling and speculation when I first brought into it. I knew insiders were selling cheap even at 50cents and the problems of Queen Mary - but the dirt went far deeper than I thought, to the point of outright fraud. Covid was the last straw which broke the camel back. We really need to stick with reputable companies

There were little chance I could have avoided these 3 companies. What I could do better is to manage my asset allocation so I did not invest as much in speculative positions.

Operating Highlights - Income
Income grew around 15% due to higher bonus (record high) and higher salary (unexpected promotion). Dividends were largely in-line with last year.

Received a decent amount of "SG Package" which was used to offset certification exam.

Operating Highlights - Expenses
Expenses were much, much lower (from $9800 to $7100) especially in Q2 thanks to the Circuit Breaker. That's $2700 lesser than less year!

No big expense except for a Mayday concert ticket (which was postponed to next year)

Operating Updates
With the massive cuts to interest rates, banks deposits are no longer attractive (you can only get the same if you satisfy the difficult conditions of DBS Multiplier).

We decided to move out from CIMB (0.5%) to Singlife (2.5% for first $10k, 1% for subsequent).

Passive income from bank interests will be greatly reduced this year and fall even more next year once my CancerCare plan hits 12 months.


Outlook
The good news this term is the launch of several low cost brokers - Tiger Broker and IBKR (Singapore). I figured once the DBS Multipler 3 tier interests is up at year end, I will start diverisfying into overseas stocks. Singapore old economies will no longer do.

I will most likely tap on IBKR (Singapore) for IWDA and certain China stocks like Tecent if I could not find a good diversified China ETF then.

Humanity’s progress has never been smooth. There are always things to worry about. But tomorrow will be a brighter day.

Circuit Breaker Games

Apps & Games

- Bench

- 全民 Party

- Airconsole

- Houseparty

- Board Game Arena

- https://netgames.io/games/

- https://www.pokernow.club/