28 April 2015

My Singapore Team of Dividend Stocks 2015

My first 11 team of dividend shares have remained largely unchanged over the past year.


(1) OCBC remains my stalwart to guard the goalpost. An increasing interest rate environment can only benefit the banks.


My defence is built around Real Estate Investment Trusts (REIT) in the form of (2) Capita Commercial Trust, (3) Capita Retail China Trust and (4) Mapletree Industrial Trust.  That gives me 3 REITs covering commercial, retail and industrial properties, with some exposure to China. 

My fourth defender is (5) Vicom.  a proxy play for car ownership in Singapore. It could be facing some windy resistance as there are supposedly less cars that require routine inspections over the next 3 years. But will there ever be less cars in Singapore? Not in my view. So long as there is a high level of demand for car ownership, there will be business in car inspections and Vicom is dominant in this regard.


Midfielders need to control the play. They have to create opportunities for offensives, and at times have to roll back to the defensive. For this, I am standing by (6) Boustead, (7) Hour Glass, (8) Kingsmen Creative and (9) SATS.

Boustead is about to break off its property business. For Hour Glass, its founders continue to buy its stock. I view that as positive. Kingsmen Creative has been doing well, expanding regionally and in Greater China. There are many MICE events and theme parks being built in the region. SATS on the end could face some issues with the airline business somewhat affected by negativity with the number of unfortunate air crashes and economic challenges.


For the offensive play, I am looking for some excitement, in particular, growth players that may not be as yet high yielding but have the potential to go far. No change to my strikers with (10) Global Logistic Properties (GLP) and (11) Yangzijiang, giving me exposure to China, Japan and Brazil.

The poor outlook of the shipping industry could well affect Yangzijiang. Likewise, the slowdown in China could well see impacts to both. I'm normally averse to holding China plays. But I'm making an exception for Yangzijiang. It however requires some close watching.


Nothing has therefore changed after a year to the team composition. But it looks like there could be some challenges in the performance of my first 11 in the year ahead. To mitigate, I've expanded my team by beefing up the bench strength and recruited (12) GK Goh, and (13) Keppel.

GK Goh holds a portfolio of interesting investments (more) with significant insider buying in recent months. Keppel on the other hand is my contrarian play. There is much fear in the market given its lack of new contracts and poor segment outlook in oil and gas. But with a Price-Earning ratio so low, it's too good to ignore given my long term outlook towards my investments.

Play ball! Oh wait, wrong game.

[Disclaimer: I hold all the above stocks. But this is not a recommendation to buy any of these. Do make your own assessment before investing, always. I acquired them at different times over the past five years (post Global Financial Crisis) and have benefited from their growth and reinvestment of dividend payouts since.]

24 April 2015

Size Matters - How Much Is Enough? [updated]

Size matters. No sleazy thought please. Rather, Singapore Man of Leisure had an interesting article on Size Does Matter for Income Plays where he blogged about an investment approach to reap a $50,000 per annum income. The question he posed was, just how much capital would be needed to do this?

He offered a few possibilities and discussed the implications of: (a) $1 million at 5% yield; or (b) $500K at 10% yield. His conclusion however was to go with (c) $2 million at 5% yield. Why? Because the earlier options all hinged on the assumption that the portfolio do not diminish due to a fall in market value. So doubling up the portfolio provides a buffer in case the portfolio should collapse by 50%.

I thought maybe there's a solution to this involving less capital. I'm making an assumption from historical past that any collapse of that magnitude would likely see a recovery within 5 years. With that assumption, I could keep 5 years worth of cash at half of $50,000 (i.e. $25,000) per year, and add that to $1 million at 5% yield. So that way, even if the portfolio collapse by 50%, it would still generate $25,000, and can be topped up by another $25,000 from the safety buffer. Hence, the total portfolio needed is simply $1 million at 5% yield plus $250,000 in cash.

What say?

As an after thought ... come to think of it, with $2 million at an expenditure of $50,000 a year, that's 40 years worth of retirement budget! If one is already at age 55, I guess there's no need to invest or do anything hairy with it? The only risk is living too long, specifically, beyond age 95.

20 April 2015

Is it that Difficult to Stay Healthy While on a Cruise?

LadyIronChef blogged about 5 easy ways to exercise while on holidays. Essentially, the calories expended in the 5 activities look like this:

Walk - 3 hrs, 405 kcal
Hike - 2 to 3 hrs, 674 to 1014 kcal
Swim - 20 min, 115 kcal
Circuit around hotel room - 7 min, 58 kcal
Dance - 2 to 3 hrs, 930 to 1395 kcal

The above made me recall about my last cruise experience on board Royal Carribean's Mariner of the Seas.

Great views and great entertainment, even if they're somewhat cabaret like. Shrek is the theme on board this ship.

As always for cruise, it was a food binge of immense proportions. Staying in a Grand Suite came with greater benefits, including the use of the VIP Lounge. That meant even more food! What's a cruise without the food?

I figured my daily food intake was in the region of 3,000 kcal. Maybe more. I could be in denial. Since my Basal Metabolic Rate was in the region of 2,000 kcal, that meant I had to exercise away 1,000 kcal per day. No small feat to achieve given that I only averaged 200 kcal on a normal working day, and perhaps closer to 500 kcal a day on weekends.

Turns out, it wasn't too difficult to accomplish on board the cruise ship. An hour per day in the gym clocked about 500 kcal. Walking to restaurants for meals and to various entertainments from the bow to the stern, and from the stern to the bow of the ship several times each day meant that I also clocked more than 10,000 steps per day. That works out to another 500 kcal or so. It's a lot of serious walking. There, 1,000 kcal a day expended to shed the excess.

No net weight gain. Pays to stay healthy. Exercise away for the good life.

Great health, good wealth! Enjoy your next cruise.

17 April 2015

4 Financial Options in 4 Months

It's only been 4 months since the start of the year. But if one were to reflect back, it seems like a roaring year with lots of significant changes affecting our personal financial options.


Seems progressive.

14 April 2015

Thank Goodness we had Medical Insurance!

Over the past year, my wifey experienced a muscular injury which seriously affected her quality of life. After struggling for a year, and weeks of therapies, the specialist recommended that she undergo a keyhole surgery to fix the problem.

We decided to go ahead with it. The sufferings had gone on long enough. The surgery took place late one evening and required an overnight stay at the hospital for the anesthesia to wear off. I drank quite a bit of coffee while waiting. Coffee Bean was a beneficiary.

Guess how much was the bill? $14,000+!

No doubt it was for an A class ward and would surely have been cheaper had it been a C ward. After deducting the Medishield component, the co-payment part worked out to be $4,500+. That's still quite a hefty sum!

Fortunately, I had placed my wife on a Medishield and Medishield+ type of plan with a private insurer. So even the co-payment part was fully covered. In the end, the total amount we had to cough up was $zero. This included the medications and follow up treatments.

The annual payment for the two policies was $786 a year. Looks like we have recouped almost 18 years of payments with just one surgery. Not that we really wanted to "profit" in this manner. Regardless, it goes to show how important it is to have hospitalisation and surgery insurance.

Are you covered yet?

p/s: Can I claim for the coffee too?

And if you're really hardcore, here's how the procedure looks like (*ouch*): Rotator Cuff Repair

10 April 2015

Ready, Aim, TARGET!

A Path to Financial Freedom posted an article on Psychology in Crisis and Herd Investing. Worth a read.

I pretty much prefer to buy a share of a company if I have a reasonable idea why the company will likely be viable as a business for the longer term. For instance, it sells essential products (or products with a brand) that are consumed at an increasing rate as the world (its customers) develops.

One such company I was watching was Target. Wifey and I have personally visited their stores and have always preferred to shop at Target than most other retail stores. Many of the rest tends to feel messy, disorganised.

But Target was having a really bad time at one point. Its credit card business was hacked into and created a huge problem with its customers. Its expansion into Canada was running into trouble. It seems there are significant differences in the shopping habit of Canadians compares to the Americans, and likewise with the supply chain. It didn't help that Walmart had already set foot on Canadian soil much earlier and had established its presence.

I kind of felt that the credit card thing was really a transient problem. It would eventually blow over. The Canadian thing was something else. It would continue to bleed unless Target found a way to turn things around. The alternative of course was what eventually happened. They exited from the pains. That's when I decided it was the right point to buy.

Over the past months, the shares in Target has risen several tens of percentage points. It has been a good buy.

Is this a Cigar Butt situation that Warren Buffet speaks of? I don't think so. There is life beyond that one puff. Target remains as my midfielder in My US Team of Growth/Dividend Stocks.

Play ball!

08 April 2015

So What? Is it Worth Buying a Stock with a Lot of Cash?

ValueEdge had an interesting post on the The Art of So What?

I recall an encounter once where my boss was running through a proposal with his boss. His boss then said, "So?" After providing a response, he was again asked, "So?" And this went on for five more times. It wasn't asked in a malicious way. It was a matter of fact, trying to dig deeper into the subject. Finally, having dug in five levels deep, he then went on to analyse the issue strategically. Fascinating to say the least.

Sometime back, I came across an analyst report about a stock. It said that the cash and equivalent that a company had was greater than the market value of the company (i.e. number of shares x price of the shares). And so it came up with a target price for the company. I bought into the idea.

The company in question was however not doing well. Its business was bleeding. The cash that was talked about soon disappeared as its operating expenses sucked away all the cash. Within a few months, it had lost half its value, and the cash was gone.

I should have asked "So?" a few more times.

Lesson learnt: It's the business that matters.