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What Would Negative Interest Rate Mean For Investors : A Memo From Howard Marks

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Howard Marks, founder and co-chairman of $122 asset manager Oaktree Capital Management and author of many best selling books ( including the recent one “ Mastering The Market Cycle”) had just published his latest memo.
Latest memo from Howard Marks: Mysterious<link>
“And that brings us to the subject of negative interest rates.  I find them no less mysterious.  The fact that we know what they are – as we do with inflation and deflation – doesn’t alter the fact that we don’t know for sure why negative rates are prevalent today, how long they’ll continue in force, what might cause them to turn positive, what their consequences are, or whether they’ll reach the U.S.”

In this latest memo titled “Mysterious” , he starts with a discussion of many possible causes of inflation and implication of negative rate to our investment and financial institutions , he finds negative interest rates just as baffling and “mysterious”.

Eagle Hospitality Trust : A Case of Narrative Economics

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Disclaimer : The information provided in this blog is for general information purposes only and not a recommendation to buy or sell stocks mentioned in any blog post.( Warning!! Writer owns share in Eagle Hospitality Trust, information & views provided may subject to bias in view of stakes he have in the company.”

I recently ordered a book from Book Depository called “Narrative Economics: How Stories Go Viral and Drive Major Economic Event ”by a Nobel winning economist “Robert Shiller.


Who is Robert Shiller and what is Narrative Economic ?
<From Wikipedia.com >
Robert James Shiller (born March 29, 1946)[4] is an Americaneconomist (Nobel Laureate in 2013), academic, and best-selling author. Shiller has taught at Yale since 1982 and previously held faculty positions at the Wharton School of the University of Pennsylvania and the University of Minnesota. He has written on economic topics that range from behavioral finance to real estate to risk management, and has been co-organi…

Personal Updates- 20 Oct 2019

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Wow, time flies and it has been quite some time since my last blog post on 28 September. I am also quite busy with two staycations inJ.Band Penang in last two weeks after my younger daughter finished her PSLE exam. As usual , we spent great time on movies / food / shopping and of course sight-seeing. My last visit to Penang was few years back where we were onboard cruise ship to Phuket, we arranged a day-trip to Penang and didn’t really have much time to walk around.
Well, this time round we have more time to explore the "beauty" of Penang as we spend  4 Days/ 3 Nights at Penang….:D



0% or Negative Yields Are Becoming The “New Normal”

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Would like to share some great articles on “Negative bond yield and QE”...with more and more central bankers lowering the interest rate and implementing more QE, world is flooded with liquidity and resulting  $17 Billion ofnegative yielding bond sitting and idling on various financial institution’s balance sheet around the world.
What does a negative bond yield mean?< source: Investopedia.com>
Why do investors buy negative yield bonds?<source:ft.com>





With this unstoppable pace of money printing, market will become more volatile... all conventional methods of assets valuation will also become obsolete... you may notice that it will become "new normal" for some S-REITs to have yield lower than 4% (especially from those with stronger sponsor like Mapletree or Capital families).

Keppel DC REIT : Wow ! Wow ! Wow

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Congrats !! for those invested in Keppel DC REIT as share price shoot up to $2.13 as of closing on last Friday. It's about +21% increased vs price prior asset acquisition and equity fund rising announcement on 16th Sep 2019. I am not so sure if the new acquisition will give a DPU boost by more than 21% , else why there is a sudden change in perception or valuation for such asset class REITs after the announcement.

Keppel DC Reit to raise $473.8m to partially fund data centre acquisitions<source:straitstimes.com>



F.O.M.O ? T.I.N.A ? or The Sky's The Limit ?

By looking at the pace and % of the price increases , I think there is some kind of  "euphoria"  for the stock at this moment. Same as previous case on Capital Commercial Reit , we will still need to stick to fundamental valuation for REITs as the growth and revenue is not like those "tech stocks" that it could be "exponential " to some extent.
May be "This Time Is Different ! " , …

President Trump : Make America ( STI Index ) Great Again !

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Not All Index Are Created Equal
I think most of us are using Index as bench-marking against our portfolio’s performance and from time to time, we often hear about buying index as kind of passive investment. Some financial advisors are even proposing “DCA” or dollar cost averaging for Index with “buy and hold” strategy.
“The average annualized total return for the S&P 500 index over the past 90 years is 9.8 %.”
Guess this is the most “eye-catching” phrase that often mentioned in the news which is also the most powerful words to attract investors pouring billions of dollars into Index ETFs under the so called “passive investment” strategy.
But remember that not all Index are created equal, if the index are added with many “toxic stocks”, such index will sure underperform than other world indexes.

七线谱:四大天王( China Big Four Banks)

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The "big four"state-owned commercial banks are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China,all of which are also among the largest banks in the world as of 2018. 
The big four also the world largest in term of total assets base on 2018 S&P Global Market Intelligence report . FYI, DBS rank 71th with total asset of approx. USD$388 Billion.
<Source: Wikipedia.com>
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