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Thursday, January 12, 2017

Staying in First REIT or marrying just for the sake of marrying?

I must be getting old. I'm starting to get intrusive questions such as "Got girlfriend or not?", "How come you no girlfriend?", "Why are you still single?", and "Have you considered finding a girl and settling down?" In a few weeks' time, I'll once again be on the receiving end of the same old fusillade.

Apparently, a simple and logical explanation of my situation never goes through:
1). I have no permanent job (see here)
2). I have to "leverage up" to do my Masters first before I can get a permanent post

With such an insecure cash flow, it would be prudent to establish myself first before searching for a life partner. I still have to pay $200 a month for my Nikko AM STI ETF Invest Saver plan (I'm almost there; my annual dividends will soon be able to cover it). I've yet to look through my insurance policy and would most likely get additional coverage. This means more capital injections into my portfolio to cover the insurance premiums. In the meantime, I foresee paying for the premiums from my own pocket.

But no! These people could not take no for an answer. They try to persuade me with all sorts of reasons to get hitched. Today, I will attempt to consider an alternative solution to one of the common queries they pose: "If you don't get married, there is no one to take care of you when you grow old. So when are you going to get married?"

There are a lot of assumptions underlying that clause. It assumes that your offspring will surely become your personal dividend machine once they leave the roost. Other commercial bloggers have underscored that this assumption rests on flimsy grounds. Yes, yes, you may be a good parent, but you never know how your child will turn out in life later on, much less whether are they able to support you with a stream of "perpetual dividend" income for retirement. Anecdotally, I've seen good parents whose kids mixed with bad company and came to an unfortunate end.

Another facet of the clause implies that spouses are guaranteed to be supportive of one another. If the husband is down because of poor health in old age, the wife would be the ideal carer and vice versa. This presupposes a super solid loving relationship, where one cares for the other more than themselves. Ironically, the 2 individuals who continually field the above question to me suffer from a poor marriage, "enduring" their respective spouses with spite aplenty in their relationship. So much for support. -.-

Undaunted, they told me to marry because I'm of a marriageable age. And they want it fast! I sure ain't going to marry just for the sake of marrying. I've yet to meet Mrs Unintelligent Nerd. If I meet her, good. If I don't meet her, I could consider First REIT's nursing homes for my care arrangement instead (since I'm a unitholder :P).

First REIT has three nursing home properties in Singapore: 1). Pacific Healthcare Nursing Home (Bukit Merah), 2). Pacific Healthcare Nursing Home (Bukit Panjang), and 3). Lentor Residence.

A cursory search on Pacific Healthcare's website does not detail the charges for staying in either their Bukit Merah or their Bukit Panjang Nursing Homes. If you "seek more information", you are told to contact them.

In contrast, the Lentor Residence website is slightly more detailed.


The nursing home provides: 1). assisted living, independent living, 2). nursing home care, and 3). day care, social care. 

What are the charges like? Are there any subsidies?



A minimum of $1200 per month. Okay, my distributions from First REIT is sure not going to be able to cover the monthly charges of being a resident of First REIT. >.< 

What about the government subsidies? Subsidies given are based on Household Means Testing (HHMT) by MOH. As you can see in the image below, the amount of subsidy given is contingent on the Household Per Capita Monthly Income. The information could be found here.


I've also found out that all 3 nursing homes under First REIT are classified as Private Nursing Homes which are under MOH portable subsidy scheme, in a MOH article dated December 2007 (strange, can't find any more recent articles). See this link for the article. Do note that the article is found through Lotus Eldercare's website and not through MOH's website. In it, there is a breakdown of the cost by Nursing Homes in Singapore. Owing to the date of the article, I wouldn't be surprised if the information detailed is outdated.

Sooooo, staying in First REIT or marrying some random girl just for the sake of marrying? I'll do neither. :P

Friday, January 6, 2017

2016 Reflections

I'm late to the game. Most bloggers have already wrapped up their reflections of 2016 and have proceeded on towards welcoming the new year.

Investment Portfolio
My dividend portfolio is chugging along just fine.

Soon, the annual dividends will be able to cover the $200/month POSB Invest Saver plan which I am on as well. :)

At a portfolio level, I am overweight on REITs (bad thing!). I have padded my portfolio with some more consumer staples and am looking towards adding more if the sector corrects. Meanwhile, I am eyeing some other ETFs and am considering SSBs.

I have been stretching myself quite thin by reading up on all things pertaining to investment. I will be slowing down in this area.

Insurance Coverage
I will be reviewing my insurance policies and, if need be, purchase additional policies in areas which I am deficient in.

Work
Responsibilities are starting to increase. I think I may be one of the odd one out here. Though frustrating, I get a kick out of completing difficult assignments at work.

As my current role is dissimilar from my previous roles, I need time to think of an effective system to put in place. I think Kyith mentioned this concept in his blog as well. You need wealth machines to generate wealth in the arena of personal finance. Likewise, you need work systems that are able to enhance your productivity, expedite the completion of tasks, and not re-invent the wheel for every "somewhat-similar" assignments your boss throws at you.

Social
I met up with Mr Charming of the Blogosphere a couple of weeks back! Next goal is to meet up with Mr Handsome of the Blogosphere. (Yes, I know there is more than one Mr Handsome in the Blogosphere).

Education
School term has started and it is time for me to put in the grind. I'm done with MOOCs for now and have to concentrate on my career/formal education as peak period is coming up shortly.

That's all for now

Cheers
UN

Thursday, December 22, 2016

Top/Worst performers in my portfolio for 2016

It's coming to the end of the year. In one week's time, we will be ushering in 2017.

So how did my income portfolio fare for 2016? I will officially be recording and tabulating the results on 31 December 2016, but it doesn't hurt to review the performance of my counters thus far. I'm not the type who monitors the prices of my holdings daily, so some of the top/worst performers were somewhat surprising.

I define returns as follow:

((Current Market Price + Dividends/Distributions received) - Purchase Price)/Purchase Price

I have included transaction costs in the above calculation as well

Worst Performers

1). In first place, the worst performer for the year goes to Sabana REIT, with a -35.44% return. I have nothing to say about this. Move along now, move along. Damn paiseh.

I've learned some valuable lessons from this, and it's my first "tuition fee" that I paid to mister market. Since my capital is small, I have lost only $280 for this. It's painful, but not catastrophic. I have since divested this counter.

2). Second place goes to Kimberly Clark Corporation. This counter shouldn't be here actually. I managed to catch it at its lowest due to newbie luck. As my strategy is to nibble in multiple tranches, transaction fees dragged it to the second worst performer, with a -7.63% return.

3). Third place goes to iFAST Corporation, with a -6.96% return. I purchased it when it fell to its IPO price. It still fell further. My investment thesis still stands so I'm not too worried about it.

4). In fourth place, we have VICOM, with a -6.73% return. Similar to iFAST, my investment thesis still stands. However, I purchased it at the wrong price. I will be detailing this mistake in a subsequent post.

5). Rank 5 goes to Starhill Global REIT, with a -3.91% return. After purchasing most of the REITs at their lows at the end of last year/start of this year, Starhill Global was the only REIT that has not moved proportionately as compared to the others. Hence, I got in at a slightly higher price, which explains the negative returns here. No worries here either.

Top Performers

5). In fifth place, we have Japan Foods Holding, with a 14.57% return. Newbie luck here again. I managed to catch it at its lowest. Compared to other restaurant counters, JFH is one of the strongest ones out there. Lean business model, good cash hoard, decent ROE, profit margin, synergy between its franchises, etc.

4). Fourth place goes to Parkway Life REIT, with a 14.63% return. Nothing to comment on here.

3). Third place goes to Dairy Farm, with a 18.99% return. Interestingly, I recall buying Dairy Farm when B of Forever Financial Freedom sold his entire stake in it.

2). Okay, second place is somewhat surprising. It goes to ST Engineering, with a 20.62% return. I know it's a quality counter in my portfolio, but I didn't expect it to do that well. Again, newbie luck here. Managed to purchase it at its lowest.

1). First prize goes to......................*cues music*.............Lippo Malls, with a 27.40% return. After purchasing this counter and after improving my fundamental analysis skills, I came to realize that I may have made a wrong purchase. There is quite a lot of stuff that I don't really know about this counter. I've spent many a times scratching my head as I try to make sense of the corporate actions that were undertaken. The information detailed is quite convoluted and I am unable to make sense of its ramification for unitholders.

And then, you have to look up "north" as well. Veteran bloggers shy away from this counter while newbie bloggers flock towards this counter.....hmmm, I foresee myself divesting this counter some time in the future.

Bonus
Actually, the best performer goes to Saizen REIT, with a 44.28% return. However, since this is a one-off issue, I did not want to classify it as the top performer.

Thursday, December 1, 2016

November updates

So what has Unintelligent Nerd been up to? I'm pretty much occupied with my new job and school. School work is tough. Considering my background, I think I got more than I bargained for by signing up for the 1-year programme in engineering school. For the first couple of weeks, the terms used by the lecturer flew past my head. My understanding has gotten a bit better since then, but there is still much work to be done. I'm done with 3 tests and am left with 2 more next week before the term closes for a much needed break.

The following are some updates in my life:

Work
I'm settling in nicely at my new job. The colleagues are great and we gel well. The only grouse I have is that my commute time has increased to a whooping 3 hours 20 minutes journey each day (1 hour 40 mins to and fro).

Formal Education
One of the goals which I have set for myself in life is to try to achieve a perfect GPA. It is possible to achieve such a goal for these 1-year programmes; there are fewer modules so there is lesser chance to screw things up.

I failed to achieve my goal in the previous 1-year programme I took. This current 1-year programme starts with a blank slate. If I don't screw things up, I could reasonably achieve my goal. However, I'm getting cold feet because it's engineering we are talking about here.......

Informal Education
At the same time, I'm taking a Coursera course on Micro-economics. I find that reading up on the level 1 CFA syllabus without receiving any feedback on my progress/understanding is a sub-optimal strategy to take. With Coursera, at least I'll be able to gauge my understanding of the concepts (in this case, econs) through their built-in quizzes.

Book Reading
Personal development from book reading is put on hold. I think I'm quite distracted lately. I've been reading multiple books halfway. Either I lost interest or do not have sufficient cognitive resources available to digest the materials.

Personal Finance
I have opened a CIMB FastSaver account and have designated it to receive my monthly salary from my employer. Sure, I could get more than 1% interest, but considering all the hoops I have to jump through, the no-frills FastSaver account is more suitable for me.

I have been eyeing some counters on NYSE and Bursa Malaysia. In fact, I have opened a US trading/settlement account with Standard Chartered to trade in the former market. I have just placed an order on a particular US counter and hope the price would fall enough for my order to be filled. The counters I'm eyeing have dropped substantially, though I'm expecting them to drop more. As such, my entry position is but a nibble. If they fall more, I have multiple tranches of cash prepared to average down hard. If it goes up, just sit back and collect the dividends.

I'm still exploring what brokerages could be used to to trade in Bursa Malaysia securities. It does not make sense for me to nibble if custodian fees wipe out my dividends totally.

Recent Transactions
I initiated a new position in Mapletree Industrial Trust in two tranches in November when the price dipped. It is a counter which I have been eyeing for quite some time.

I added to my silver holdings as well.

Friday, November 4, 2016

瞒天过海 as my preferred self-preservation strategy

Being a Facebook user, I am observing more of my friends/peers/juniors taking an interest in personal finance. In my news feed, I see more of them liking the pages of personal finance websites as well as sharing articles on personal finance with one another.

I think that is a good thing. It is good to pursue self-education in the arena of personal finance which, in turn, would set them up with a better foundation in their lives.

However, I'm not going to talk about that group today. Instead, I will be talking about some other interesting folks who, through those online channels, stumble upon investing and made some profits off the stock market and have to broadcast their winnings on social media.

First up, we have our "income investor." Having stumbled onto income investing, he attended an income investing course and applied what he had learned from the course. Upon receiving his first distribution income from REITs, he had to photograph his bank transaction statement and upload it on Facebook, tagging and thanking his teachers in his post, as well as commenting that "I got free money from investing." Quickly, friends descended on him, asking for lunch/dinner treats, and commenting on their luck in having a rich friend. This is not a one-off incident by the way.

Next, we have the hotshot trading couple. After attending a trading course, hotshot couple was eager to apply what they have learned in the stock market. With a 2-year profitable track record, hotshot couple began posting some not-so-nice stuff on Facebook, even once openly denigrating an institutional investor which we all are familiar with. Every so often, he will post a stock chart with a smiley face, fishing for the comments of others. Lately, the couple commented that profits are harder to come by.....

Next up, we have our "value investor." "Buy Low, Sell High" and "Hunting for value" are some of the catch phrases she used. What intrigued me was her underlying thinking behind her recent buy call on Facebook: Samsung Galaxy Note 7 explode --> recall product --> revenue drops --> share price drop --> value stock.

Out of curiosity, I searched for Samsung's share price. The display is set to 5 years.


Well, the price did dive recently. But I wouldn't call Samsung a value stock. 

Also, Samsung phones happens to be in vogue now. You'll never know when they might go the way of Nokia or Blackberry. I have neither the competency in evaluating such companies nor am I keen to become dependent on the vagaries of consumer preferences.

What about the fundamentals? 

Cash flow from operations is decreasing/okaaayy. Intangibles are growing....Nah. Not my cup of tea. I'll pass.

Finally, we have the "investment" guy. I don't know him personally but a friend working in another company used him as an example of what not to say when introducing yourself on your first day of work. "Investment" guy is an intern whose interest/hobby is investing, as investing allows him to live the high life, fund his wanderlust, as well as to retire early. Following "investment" guy's sharing, my friend shared that the meeting room burst out into "oooo", "waaah", "rich kid", "investment siol!", etc.

Readers, I'm not sure what you think of these examples. As a private person (more so when it comes to investing), I think that these expressions are over-the-top. Furthermore, I think that there might be consequences for such expressions.

Look at how quickly people descended on "income investor," suggesting for catch-up sessions in order to get free meals. Now it becomes way harder to distinguish real friends from the false.

Would it be to your advantage if your bosses know that you could "quit anytime" because you are trying to achieve FF/FI (or whatever "retirement" term you use)? You could be perceived as "less dedicated" than your peers, even if that may not be the case.

Why should the company give you increment and bonuses when you are "so rich already?" Hmm.

When there are lay-offs in a recession, who is more likely to get retrenched? The diligent breadwinner who is supporting multiple kids or the young single who shares about the free money that he or she receives from the stock market? I'm sure the bosses' compassion would be directed towards the former.

Don't forget to take into account human envy. If your bosses are ones that did not manage their personal finances well in their youths, your success sticks up like a sore thumb, reminding them of "what could have been" if they had recognized the importance of proper financial management in their early years and have acted on them.

As for myself, nothing to see here. Move along now. I'm just 瞒天过海-ing. I'm just a regular unintelligent nerd who only knows how to work hard, study, and learn. Simi is investing? Can eat one?