Thursday, October 12, 2017

Makin' money thru spinnin' things

I think this will be a more "fun" post than usual?

Every once in a while, I will come across posts from other financial bloggers emphasizing the importance of developing a side hustle to diversify one's income streams. Out of curiosity, I have searched the net for viable side hustles. The answers are almost always the same. Be a writer. Be a celebrity blogger and earn through page views. Create an e-business. Create apps. Man! This is hard! I can suka suka pull off any of the above with ease meh? 

Then I looked around me and observe other more non-conventional methods to earn money. Normally, they are hobbyists who, in the process of enjoying their hobbies, hone their expertise in their craft to a sufficiently high level. I have a friend who started her own online bakery business after taking her baking skills to the next level. I have another friend who started her own online florist business after realizing she has the passion and gift in that particular area. And then there's photographers who are able to immortalize beautiful memories on film.

I have enough on my plate already, but there's no harm thinking what I could potentially do right? A half-baked idea which I had was to consider starting a statistics tutoring/consulting business. I like that idea, but seriously, is there a non-bookish hobby that I am sufficiently skilled in and could monetize if I so wanted to?

Then, one day, it hit me! Donkey years back in secondary school/poly, a significant part of my life revolved around yoyoing. Yes, that roundish thing that is connected to your finger by a string. I've worked as a yoyo performer before and have been invited to perform for kids on several occasions. 

Is it all just up-down, up-down, and loop the loops? Nah. Enjoy the following 5 yoyo videos (roughly 3 mins each) featuring the 5 yoyo divisions:

1A division: Single yoyo, string tricks
2A division: Two yoyos, looping tricks
3A division: Two yoyos, string tricks
4A division: Offstring (yoyo not attached to string. Yes, yoyo could fly off)
5A division: Freehand (yoyo attached to string, but string not attached to finger but to a counterweight such as a dice. Yes, yoyo, string, and dice could fly off)

Featuring Hiroyuki Suzuki, 1A division World Yoyo Champion for 2012. He has won 1st in 1A multiple times, but I think this is one of his best performance. Some people call him the world's fastest player. And look at his horizontal tricks. Mind-blowing!

Featuring Shu Takada, 2A division World Yoyo Champion for 2012. I just love his infectious enthusiasm for yoyoing. Great stage presence too!

Featuring Hajime Miura, 3A division World Yoyo Champion for 2016. During my time (LOL! I sound so old), 3A was still an underdeveloped field. Well, things have changed after almost a decade.

Featuring Rei Iwakura, 4A division World Yoyo Champion for 2016. Multiple times world champion for 4A. I also love his great stage presence and confidence.

Featuring Takeshi Matsuura, 5A division World Yoyo Champion for 2012. One of the younger world champions.

Hope you all enjoy the videos!

Now, for some random yoyo trivia:

1). For those observant enough (hardly anyone though!), they may notice that Unintelligent Nerd has a scar on his face that came as a result of a yoyo smashing into his face. It happened while he was performing and there was blood all over the place. He went to A&E to had it done up.

2). Not enough evidence that yoyos are dangerous? Unintelligent Nerd's metal yoyos have cracked the floor tiles at home and have smashed the ceiling lights before.

3). It's not the yoyo; it's the player. Unintelligent Nerd has observed kids who got their parents to buy them a $100+ yoyo and couldn't do anything with it. And then sell it off to others for 5 bucks. -_-

4). A $100+ yoyo? Seriously?!?!?! So ex for a toy! Errrr, by the way, there are $1000 yoyos too. It's marketed as aircraft grade titanium, precision-weighted, gold-plated, etc.....etc....

5). I think I qualify as a collector also? I think I have more than 50 yoyos lying somewhere around the house. My most expensive yoyo cost like $150? 24K gold-plated some more. Shit! Time to get shot by other frugal financial bloggers liao. Toh long! Give chance, I recant my non-frugally ways liao! It's been years already!

6). Meanwhile, those national masters/national grand masters of yoyoing use their old-school wooden yoyos. No metal to increase yoyo weight to spin longer. No ceramic ball bearing to reduce friction. No precision-engineered yoyo halves to increase stability, etc. Just think of them as the Uncle CW of yoyoing (e.g. over 50 years of yoyoing experience and contribution to the yoyo community). Just give the world champions in the yoyo videos above a noob old-school wooden yoyo and let's see who is the real McCoy. (Okay lah, to be fair, they will still do exceptionally well with a noob old-school wooden yoyo).

Hope you all enjoy this post!

(Okay, time to wear my anti-flame suit with regards to point 5 above >.<).

Sunday, October 1, 2017

PhD Prostitutes

A couple of days back, I saw the following article being circulated on my social media feed:

This is not new to me. I have read articles on the increasing amount of student debt in the United States. Students leverage up to pursue a degree in order to live the American Dream. Once they have gotten their coveted degrees, they are faced with the sickening realization that this is not enough. Masters! PhDs! You need MOAR to edge out against your competition.

But are post-graduate qualifications really worth it? It depends on your major. In certain spheres on the internet, humanities and social science majors receive a lot of flak for their choices. They pay hefty tuition fees, acquire critical thinking skills (which is debatable), and receive job offers that do not commensurate with the tuition fees they paid. Instead of receiving prestigious job offers in Academia, they are left destitute as interest upon interest of debts pile on.

Articles, such as the above, highlights the cracks of the humanities and social sciences fields. They provide people with a glimpse of the dark underbelly of said fields. I remember trying to find the contact of a US researcher in my previous job. What I got when I threw in the researcher's name into Google were not academic publications. Instead, it was an interview where she shared that her temporary contract jobs in Academia paid her the same amount as her previous job as a grocery store helper. Minimum wage! Now with the added burden of paying off her student debts!

Even in STEM (Science, Technology, Engineering, Mathematics) fields, there is this difficulty to secure jobs for PhD holders. There is a thread in the BIGS World Facebook Group where Azrael of The Tale of Azrael commented the following:

So what am I to do, seeing that I am certain that research is my calling? Bide my time and build my funds. Think, and think again of the ramifications of each decision. Build up my dividend stream in a deliberate manner. And (Very Important!).

(Eh? First time Unintelligent Nerd recommend against personal development/professional upgrading? Must be he "sot sot" liao!)

Friday, September 29, 2017

Q3 2017 Portfolio Update

I didn't bother to find the exact date, but I should be 2.5 years old in the market as at September 2017. When I first started out in investing, I read voraciously (both books and blogs) and checked the prices of stocks in my watch list fastidiously. Now? I really couldn't be bothered with the latter.

I am predominantly an income investor who invest for the long term. Once I identified my target, I allocate a sum of money that I am comfortable with to it. The amount I allocate varies, depending on the counter's riskiness and the extent of opacity I have on that particular counter. Therefore, the counters which I have more knowledge and conviction in are given a higher weight in my portfolio than counters which I am less knowledgeable in. Once done, I check up on the individual counters from time to time.

Sometimes, I think I am pushing my luck with my sloven ways in portfolio management. Whenever there are new corporate actions, I observe bloggers, investment sites, and forums bustling with activity. Yours truly is the clueless clown who is last in line to get and react to any new information. There have been multiple instances when I logged in to my bank account and realized that there are dividends that I do not know of that have come in! How unbecoming of me!

What's with my ramblings? My Q3 2017 dividends were lesser than my Q3 2016 dividends. At first, I don't even know why that is the case until it dawned on me that I have been trimming down my portfolio in Q2 2017 (see here). Clueless? Much.

Moving forward, I expect dividend income to drop further. I am waiting for the payout from Croesus Retail Trust in end October. Once CRT is delisted, it will deal yet another blow to my portfolio's income generation.

Next, we have my USD-denominated counters. Do note that the y-axis for the above chart is different from the first chart. I am still getting nowhere in terms of dividend income from my USD-denominated portfolio. Well, if I really wanna force some sort of silver lining to focus on, I could say that: Hey! I got some kopi money in Q3 2017 instead of a big fat zero in Q3 2016.

Portfolio Actions in Q3 2017
I am still cautious and am still holding tightly to my cash. However, my itchy fingers got the better of me, so I nibbled on Singtel, Raffles Medical Group, and General Mills.

Singtel to increase my non-REIT income and reduce my exposure to the REIT sector. I was already vested in Singtel previously.

Raffles Medical Group to average down. When I first initiated a position in RMG, it was a nibble as well. Back then, the price has corrected slightly, but the earnings multiple was still fairly lofty. I kinda knew it would fall further but my itchy fingers got the better of me, so I initiated a super small position to mitigate the risk of the potential fall.

It is a psychological thing, really. It is something that I must learn to overcome myself. I either learn to: (1) accept and internalize the fear-of-missing-out feeling, wait for value to emerge and enter at a safer level, or (2) nibble a new position and nibble down together with the down trend.

New position in General Mills. Consumer staples company facing some headwinds. Nuff said.

The Bleeding ones
Ho ho ho! The consumer staples sector is bleeding.

In my portfolio, J.M. Smucker and Hormel Foods are bleeding. Will be looking forward to nibble average down if the price permits.

Kimberly Clark is going to bleed soon (with reference to my entry price), so it's back on my watch list. Same goes for Welltower REIT.

At the SGD-portfolio side, the bleeding ones are the usual culprits (QAF, Raffles Medical Group), so I am not too concerned. There's a new member to the list though (Kingsmen Creatives).

Net worth breakdown
I think it would also be helpful if I include a section on my net worth breakdown. It's more for identifying how prepared I am for a market crash (available cash for investment against what I currently have in equities).

The pie chart depicts the breakdown in my net worth across the various asset classes in percentage (pie chart neither includes my CPF nor my emergency fund). To be conservative, I computed my precious metals allocation at spot price even though I am holding everything in physicals. 

Moving forward, and after deducting allocations to our emergency fund, I will be trying to increase the proportion of cash held in the overall pie chart of my net worth. That's provided if gold/silver prices doesn't pull back and tempt me and I don't suffer from "itchy finger" and nibble on equities further.

Sunday, September 24, 2017

Physicians Realty Trust: How are the Acquisitions funded?

Now that Physicians Realty Trust is on a downtrend, it is time to revisit a particular aspect of the counter.

Physicians Realty Trust is a medical office REIT listed on the NYSE. It went public in 2013 and, since then, have been embarking on an acquisition spree. I first came to know of the counter when I looked through the holdings of some other US financial bloggers and it piqued my interest. I have left it at the back of my mind as it wasn't the right time to invest in the counter back then. Months later, the share price has fallen off quite a bit.

My main concern is how are the acquisitions funded. Is it by debt, equity, or both? If equity, does that mean I have to prepare myself to subscribe to rights on a frequent basis, in order to prevent dilution of my holdings?

At IPO (year 2013), gross real estate investments were $124 mil. At 31 December 2014, the properties were valued at $819 mil. At 31 December 2015, the number was $1.6 bil. At 31 December 2016, the number was at $2.9 bil. From this trend, it could be inferred that Physicians Realty Trust has been aggressively acquiring medical office properties. This trend is still continuing. The REIT highlighted that it is on track to achieve its 2017 acquisition guidance to bring in $1.2 to $1.4 bil worth of assets (see here).

See below for Physicians Realty Trust's Balance sheet. The columns, from left to right, are for year 2016, 2015, 2014, and 2013, respectively.

Shareholder' equity has been growing over time. It grew from 204 mil in 2013 to 1.7 bil in 2016. This is corroborated by the increase in the weighted average number of shares outstanding (see below). The columns, from left to right, are for year 2016, 2015, and 2014, respectively.

I would like to highlight the quadrupling of shares outstanding along with the introduction of Operating Partnership units and other dilutive securities in year 2015. As a REIT investor, I would not like to see this ballooning.

What about dividend growth? With all the acquisitions, the top line has definitely grown. What about the investors' pocket?

Sorry to disappoint. It has been flat from 2014 to 2016. In 2017, the distribution for the latest quarter rose from 0.2250 to 0.2300 QoQ. Not much, but it is improving.

What am I going to do? Nothing.

Will I eventually buy it when its price drops further? Maybe, as some sort of bond proxy when there's an even greater margin of safety.

Not vested in Physicians Realty Trust

Friday, September 22, 2017

Emergency Fund and other Miscellaneous Updates

Since writing this post, I have been faithfully allocating a portion of my salary to our emergency fund. For the months of August and September, I contributed a total of $3000 to the emergency fund, bringing the total sum up to around $14000. Assuming a monthly contribution of $1500, our emergency fund will hit the target sum of $20000 in January 2018.

Well, I could accelerate the process though. I could consider bumping up the monthly contribution amount. But is this worth it? It will make me cash-strapped and miserable for the next few months, just to hit the target, at most, a month earlier?

Then there's also that small sum of money that will come in from the delisting of Croesus Retail Trust. Should it go into our emergency fund or to my war chest? As it stands, I'm going to allocate it equally between our emergency fund and my war chest.

The more I think, the more I question my own judgment. Is $20000 really sufficient to tie my mum and I over any setbacks that could arise from a recession? If that's the case, $25000 sounds like a better number. Wait! Why not $30000? The action that I will take from this realization is to continue contributing a smaller sum each month to the emergency fund once the target $20000 is hit. Therefore, I could scale up my contributions to my war chest while still maintaining some sort of contribution to our emergency fund. So, that's that.

Recently, I have also been thinking of plonking down my CPF monies into investment. For now, this is just a thought experiment. I transferred the entirety of my OA to my SA after my first year in the workforce, to aid in the compounding as well as to "try it out." Since that single occasion, I have done nothing to my CPF funds.

Sure, I could compound my CPF funds faster if I leave my OA at $0 perpetually. I'm glad that prudence won out and that there are still funds in my OA right now. I am currently trying to evaluate, from various angles, what are the drawbacks from investing with one's CPF monies during market crashes. After all, a veteran financial blogger once implied that market crashes provide sufficient margin of safety to invest your nest egg in quality, high-yielding companies that would be able to beat the OA (and, maybe, the SA) interest rate. Anyway, I can't do much. My OA is still underfunded and it will take some time for it to grow.

On the work front, my contract is renewed for the next two years. Similarly, my colleagues' contracts are also renewed. I am still cautious as it is not a funding issue but a data collection issue (see here). Soooooooo, if the numbers do not come in, the project would still fold. Oh yes! My colleagues are already celebrating (......and inflating their lifestyle). -.-

I am also on the lookout for a Critical Illness Insurance policy. That is one area where I am still lacking coverage. As there are some changes in the policy in my work place, I can no longer use my company's flexible benefits for education. Instead, I could use those same benefits for insurance instead. So, all is not too bad. I am thankful.