Showing posts from 2016

Look out for Outlook in 2017

This might be my last blog post in 2016 and at this point of time , is very common to see many articles appeared in newspaper or magazine on peoples ( or so call experts / economist ) writing about “Outlook “ for stocks market , property market , economy , industrial , sectors etc…
If you key in the “outlook 2017 “ in Google , you will get 132 mil results about this topic !! Since ancient world or mankind history , we like to do prediction and look out for something which may affect our life. People have always yearned to see into the future, to peek around the corner and make sense of what’s going on.

From Swiss Alps to Dubai Desert Safari ( STE Photos sharing )

Noticed that many friends and financial bloggers have been busy updating their portfolio’s performance recently , some are happy with outstanding & flying colors result which out-performed the market and some with lagging achievement.
But one need to take noted that measuring of performance is only meaningful in the long run and not by just few quarters or years of investment and also the performance is to judge our ability of picking right stocks , not to compare with others.

Mean Reverting or Fundamental Change ?

Since early December , the stock price for some of the STI counter has increased much as compare to few months back . Just to recall what I have written in August to explain the concept of “ Linear Regression and Reverting to Mean “ in my blog about “ My Investment Strategy “ ( Click here ) .

Of course there are concerns about China’s economic situation & debt stress in O&G industry which affecting the bank stocks and also some other concern in counters like GLP / ARA / HKG Land separately .
*** ARA might be different case as price increase due to propose of privatization .

“Saving Glut and Low Real Interest Rate” : How this may impact your investment.

Saving : A Virtue or a Vice

The habit of saving always being referred to as a form of “virtue “ in our life and also being encouraged by our parents or financial planner almost universally.
Classical economists regarded saving as a virtue and the act of saving virtuous, because according to them, when an individual saves more by spending less on consumption goods, he accumulates a surplus. This surplus can be utilized in the interest of the economy as a whole in term of investment.

STE Smart Beta Index - Quarterly Update ( 4Qtr 2016 )

Hi  All,
As written before , I will try to update the STE Smart Beta Index on quarterly basis and re-balance the portfolio on yearly basis .
Append below , please find the latest update :
Index just slightly outperformed the STI Index by merely 0.8%  since 28 Aug 2016 ,one quarter result may not reflect the long term trend , we may need to see this in longer time horizon to gauge the performance if there is any "smart factors" in this kind of criteria selection.

Be Realistic on Your Stock Market Return Expectations !! ( Investment Return vs Market Return )

The behavior of the stock market is inherently so complex that no single variable can predict how the market is going to behave next or what would be its future returns - at least not on a regular and consistentbasis. 
Market swing like pendulum from optimistic to pessimistic and occasionally overshooting which resulted a panic situation.

In the long run, corporate earnings and dividends have provided a steady underlying stock market return. 

You are Not so SMART ! Why I still not happy with $10,453.02 profit I have made recently

As investor who has gone through many business and market cycles in the past 19 years of investing , Yes ! I still made a terrible mistake and succumbed to our own biases in trying to time the market.
Although we still can feel some ripples effect from US Presidential Election from time to time but I think its impact on stock market has mostly subsided, as we could see that Dow Jones Index rebounded strongly after that and keep trading at record high recently.

Dividend Update : 4th Qtr 2016

Finally , all the financial result for my holding been announced and I’m expecting to collect this dividend amount in 4th Qtr 2016 .
Total dividend to be collected in 4th Qtr will be$ 39,345.39
***TTL Dividend excluded Return of Capital from Sim Lian ( due to privatization ) and Religare Health Trust ( on partial asset disposal ).

Value in the eye of beholder : Is DBS really worth $16.06 ?


We often look at things by setting our own standardsand base on our ownyardsticks and same apply to company’s valuation. Everyone may have their biases when come to valuation and value is more than just a number.

All Valuation are Biased !!

According to Aswath Damodaran ( a Professor of Finance at NYU’s Stern School of Business ) in his book “ The Little Book of Valuation “ try to warn us that “all valuation are subjected to biased “.
“ You almost never start valuing a company or stock with a blank slate. All too often , you view on a company or stock are formed before you start inputting the numbers into the model and metrics that you use and not surprisingly , your conclusions tend to reflect your biases. The bias in the process starts with the companies you choose to value.

I read therefore I write

These two pieces of news from The Business Time (Weekend) on 5 Nov made me think and write this blog post eventually.

P2P Investors in a fix as car firm director “disappears “

“ Crowdfunding investors are likely on the hook for roughly $600,000 in loads to parallel importer named TLC Cars that failed to deliver on sold vehicles – and whose director is now uncontactable . “ write the paper.
P2P (peer-to-peer ) investment platform and Crowdfunding seems getting popular in Singapore with many platform being established recently , like “ Capital Match , MoolahSense , Funding Societies, New Union , etc “

Demographics Trends and Investing – A case of the “ Land of the Rising Sun “

From Tree to Kite 
A report compiled with the Japanese government’s co-operation few years ago warned that by 2060 the number of Japanese will have fallen from 127 m to about 87 m, of whom almost 40% will be 65 or older.  
The 2012 government report said that without policy change, by 2110 the number of Japanese could fall to 42.9 m, i.e just a third of its current population.

Predicting the US 2016 Presidential Election : Will Nate Silver Make it Again ?

The signal and the noise

Who is Nate Silver ?
Nathaniel Read"Nate"Silver(born January 13, 1978) is an Americanstatisticianandwriterwho analyzesbaseballand elections. He is currently the editor-in-chief ofESPN'sFiveThirtyEightand a Special Correspondent forABC News.  Silver first gained public recognition for developingPECOTA,a system for forecasting the performance and career development ofMajor League Baseballplayers, which he sold to and then managed forBaseball Prospectusfrom 2003 to 2009.

Can we really depend on “Dividend Income “ for Retirement ?

Risks of Living on Dividend Income

“Dividend income” investing has been deep-seated in most of investor’s mind, as ways to achieve Financial Independence and living off dividends in retirement is a dream shared by many. 
In today’s environment marked by rising life expectancies , extremely low bond yields, and a 7-year bull market, retirees face challenges on all fronts to build a consistent income stream that will last a lifetime. But the questions is “ Can we really depend on just dividend income for our retirement or is it sustainable ?”.

Why do people still lose money in the stock market despite doing a lot of reading , attending courses , analyzing ?

Market always move in Cycle

There are numerous versions of views and ideas developed by various market pundits and investors on market cycles, including Robert Precher’s Elliot Wave Theory, Harry Dent’s long wave theories and Ray Dalio’s debt cycle theories.
The cycles could be as long as Kondratiev waves” ( 45-60 years ) or  shorter as “ Kitchin cycle “ ( 3-5 years ).

These cycles are closely tied with large-scale economic business cycles and have an important impact on investment, financial, cash flow and personal retirement planning.

Animal Spirits and Stock Investing

John M Keynes may be famous for his metaphors of using “ Beauty Contest “ to explain and describe the investors' perception which caused the price fluctuation in stock market  and “ Musical Chair “ of how investors speculate in the market.

You may find these two interesting metaphors here (Keynes on Beauty Contest) and here (Keynes on Musical Chair) if you have never heard about it.

HDB , Condominium or CPF ( for Retirement ) ?

It has been continuously being a hot topics about whether one should transfer their CPF money from OA ( Ordinary account ) to SA ( Special Account ) to earn a higher return of interest rate .

Different people ( bloggers ) are having different view about this issue and each might have their own valid reasons or argument to put forward.

“Scissors , Paper , Stone “ : Can Game Make you a Better Investor ?

Game theory has been studied since the 1940s, it has only recently been applied to the world of finance. Game theory champions garnered the 1994 Nobel Prize in Economics, and today this theory is used to analyze everything from the baseball strike to spectrum and casino licenses’ auctions.

 Increasingly, game theory is also making its ways to behavioral finance for better understanding and decision making in financial world.

According to Financial Post , “ Game Theory is a powerful tool for predicting outcomes of a group of interacting firms where an action of a single firm directly affects the payoff of other participating players.

Will SPH Succumb to “Creative Destruction” ?

SPH might be the best case to study the “ corporate reinventing “ in local context as it try to evolve from traditional printed media to a more creative digital world . Corporate Reinventing has happened at such long-term leaders as IBM, Xerox, and Samsung. 
Over the past century IBM has gone from manufacturing adding machines to inventing the PC to earning the majority of its revenue from services.

Are Stock Returns Normally Distributed?

According to “ Fama & French Forum : “ Distributions of daily and monthly stock returns are rather symmetric about their means, but the tails are fatter (i.e., there are more outliers) than would be expected with normal distributions. (This topic takes up half of Eugene F. Fama's 1964 PhD thesis. Eugene Fama is 2013 Nobel laureate in economic sciences) 
In the old literature on this issue, the popular alternatives to the normal distributions were non-normal symmetric stable distributions (which are fat-tailedrelative to the normal) and t-distributions with low degrees of freedom (which are also fat-tailed). The message for investors is: expect extreme returns, negative as well as positive.

Keeping Track of Your Dividend

How did you track your dividend income ?
I guess we all have ways to keep track on our stocks transaction in order to calculate our return , be it in form of CAGR or XIRR
But how about dividend income? as income investor , do you have ways to keep track on your dividend received ?

Concept explained : What is CAGR & IRR by Investopedia
What are the main differences between compound annual growth rate (CAGR) and internal rate of return (IRR)?

Regression Line for Major Stock Market Indexes

Mean Reversion :
Received inquiry from friends / readers about "plotting regression line " for major stock markets other than STI .

Would like to reiterate here that the " regression line " is just a "statistical phenomena " same as other indicators in Technical Analysis where we are just using past price trend or movement to manipulate or so call " forecasting " the future price movement .

Good Financial Journalist That Could Shape Your View in Investing

My Investing Mentor :
We often seek for “ Guru “ or mentors in our journey of investing and this person represents a role model, someone you look up to and wanted to emulate for all the right reasons. Some may pick international renowned and successful investment gurus like Warren Buffet , Peter Lynch , George Soros , Seth Klarman , Walter Schloss etc.

“Slowness “ and Investment

Time and Speed :
What is the very first thing you do when you wake up in the morning ? Washing up yourself ? Draw your curtain and spring out of bed and do ten push-ups to get your blood pumping in the morning ? 
Thinking of what color of shirt to dress ? No, the first thing everyone do, is check the time . ( some may argue that, no , is opening your eye first… kidding :) 

Patterns , Patterns , Patterns !

Did you see any patterns in below charts /images ? Can you relate this to Investing ?

Few Important Mathematical Concept in Investing

Stumbling upon this blog post from one of the famous Financial Blogger from HKG (取之有道)

Other than the famous “Rule of 72” which is well known by most of value investors , below are few more mathematical concept which I think is also rather important for anyone who is involving in stock investing.

Concept explained : Rule of 72 ( by Investopedia )
The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annualrate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.

Success in Investing : Skill or Luck ?

<Edited with additional info and video clip >

Investment Success : Skill or Luck ?

We always attribute our success in life or any aspect in life ( e.g career development /doing business / investing ) to our skill or performance but does “luck” has any place in these successful events.
If we think that skill ( talent ) play a very important roles in investing ,, then you may find that some very talented or intelligent people fail in investing ( e.g Newton ) , and if you think that investing is purely on luck , then we may have puzzle to explain the success of great investors like Warren Buffett or Peter Lynn and others in beating the markets for multiple years .

Sell Everything before Market Crash !

Will there be another market crash in 2017 ?
The unlucky 7

Whenever there is year ending with 7 , the stock market will collapse and have crisis. For example, the name for the1987stock market crisis is Black Monday. Interest parity arbitrage trading and currency war fueled the
Asian Crisisin1997. It involves borrowing a cheap currency with low yields and investing in a stable currency with higher yields to earn spread income, known as positive carry. Hence the name, carry trades.

Why There is NO Unit Trusts ( Mutual Fund ) in My Portfolio

I guess most investors also having experience of buying unit trusts (aka mutual fund) or may be having unit trust in their portfolio at certain point of their investing life. 
Depending on situation, some may have bitter experience and few lucky one may have made money from their investment in unit trusts.

Why The Wrong question is being asked in Investing !

Forecasting or predicting the market movement

Sometimes I have been asked by friends on how will the market or certain stocks perform in coming months or what will be the direction of index moving towards in next year or so. 

Even in every investment seminars , one may notice that the most question people like to ask to those investment “ Gurus “ will be “ how do you think the prospect of STI index in 20XX ? or What do you think about the performance of Bank / O&G / property sector in coming months ?

"Lies, damned lies, statistics ! ” How this may influence your decision making in Investing ?

How to Lie with statistics !

As investors , we have been bombarded by news and statistics every minutes and seconds , as we know well, some of these news been exaggerated and statistics or figures used also questionable .

 We need to understand the figure behind these statistics and how is it derived to ensure that we have not been lied by statistics. 
“ How to Lie with statistics “ is a fascinating and short book ( only 122 pages ) . Although this book is written in 1954 , but the contents & principles still very much relevant and just as valid in today’s context  (perhaps even more so, as it's so easy to acquire statistics due to our current technology) .

Darrell Huff gives people the tools to talk back to statistics.

Happy Mid-Autumn Festival ! ( STE Photos sharing )

祝大家“ 中秋节快乐!”  No posting about investing today , would like to wish all my friends and readers a very happy  " Mid-Autumn Festival "  and enjoy your gathering & bonding with your loved one & family members .

What If Everyone only invested in Index ETF ?

what if ?

This is a fascinating and interesting book by Randall Munroe , a former NASA roboticist with a degree in Physics and also the author of xkcd:volume 0( a stick-figure webcomic ).

Munroe get thousands of questions submitted by readers and he answers a modest subset of those that not only pique his interest but are amusing and offer the potential to use real science to explore concepts, the world around us, and day-to-day mysteries of life and the universe.

Saving vs Investing for Retirement : Which is more important ?

Saving vs Investing :

Everyone wants to be the genius investor who would beat the market and turn a small amount of cash into a fortune.

 We continuously search for “ multi-bagger “ in our investment portfolio ,unfortunately it's pretty difficult to do that and hard to achieve “Alpha “ by most of retail investors.

Dividend vs Share Buyback : Which is better ?

Dividend vs Share Buyback

Why US market is trading upward even as investors big and small are selling ?

According from an article from Fortune , most people assume what has kept the market afloat this year after sinking 11% at the start of the year was a mixture of better news out of China, oil prices stabilizing, and indications that the Fed won’t raise rates as much as thought. But the real thing buoying the market could be something else: Stock buybacks.

The Greatest Gambler's Fallacy

What is the 'Gambler's Fallacy'

The gambler's fallacy is when an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future.

I'm a "Speculator " !


My Investment Strategy : 3 Ts 3 Ms ( part 3)

According to Mencius studies , the “人和 “ (or People’s Harmonization ) is the most important part in any war game or battle , same apply for investment , I think this is the most difficult and challenging part , yet the most vital to ensure success of our investing in stocks.

In The Art of War (孙子兵法) , Sun Tzu , a Chinese military philosopher and strategist in the 6th century BC , he mentioned :

ABS ( Alpha , Beta , Smart Beta )

When Alpha Becomes Beta
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