4 Apps and a Whole Load of Freebies

Digital wallets and e-transactions have taken some time to materialise. But surely and certainly they have. There now seems to be a myriad of options. I finally succumbed to this form of electronics transaction.

In truth, I didn't have much of a motivation to do so. Most, if not all, credit cards already have this pay wave option, and most transactions below $100 don't even need to be signed anymore.

I finally got round to installing Android Pay, but only because POSB/DBS has some offers to link their credit cards to Android Pay with the first five transactions offering 25% rebates till 30 Sep 2016. So why not?  Anyway, the installation and linking to my credit card was quite seamless and went without a hitch.

Using it, however, was another thing altogether. Must say I'm a noob on this. Wifey told me McDonalds was offering a further $2 rebate with payments via Android Pay. More discounts! So I gave it a go at the McCafe when we went to one outlet for breakfast over the weekend.

Took a few tries before I got it to work though. Other than switching on the NFC function on my phone, and activating the app, I couldn't figure out where on the reader machine I was supposed to place my phone against. Sheesh. Pretty embarrassing. Felt like an old fogey who couldn't handle technology. The staff was not much help, so I guess I sought some consolation in that. After some trying, it eventually worked. Looks like need to place the phone over the right corner of the reader.

Have a cuppa and enjoy discounts over discounts ... at least, for the first few transactions anyway.

And in addition to that, since I was ordering McCafe coffee, might as well use the McCafe app to earn the rewards to lead to a free drink. 5 cups of McCafe coffee will get you that freebie. Speaking of which, here's a trick when ordering at McCafe - you can order the normal McDonalds menu items too. Skip the lengthy queues at the normal McDonalds queue!

And since the McDonalds was at a CapitaMall, there's also their CapitaStar loyalty points programme. Snap a picture of the bill above $20 and get points that can be redeemed for a cash voucher.

So there you have it - 4 apps and a whole load of freebies: Android Pay rebates, McDonalds discount, McCafe free coffee, CapitaStar cash voucher.

My US Team of Dividend Stocks 2015

Like my Singapore Team (of dividend stocks), Team USA has been giving good returns. Below figures are the annualised Internal Rates of Return (IRR) for my investments in these US stocks, inclusive dividends. IRRs would have been even better if not for the 30% withholding tax on the dividends.

GOALKEEPER

(1) Berkshire Hathaway-B (9.5%). Warren Buffet and Charlie Munger. Need to say more? Several of below companies are also held by Berkshire.

DEFENSE

(2) Johnson & Johnson (15.6%). Household products for healthcare and beauty.

  
(3) Proctor & Gamble (7.3%). Household products - toiletries, diapers, etc. We consume plenty of their products without realising it.

  
(4) Exxon Mobil (16.0%). Big oil. Almost everything that moves need it. 

  
(5) Anheuser Busch (20.6%). Beer and theme parks. But it's mostly beer. Addiction.

MIDFIELD

(6) Wells Fargo (26.0%). Big Bank USA. Essential function for a working economy.

  
(7) McDonalds (9.8%). Junk food USA. Kids just love it, dunno why. Struggling of late from menu complexity, and competition from more fashionable competitors.
  
(8) Walmart (-1.7%). Low cost supermarket and departmental store. Has mass market appeal for the price conscious.

  
(9) Union Pacific (12.5%). Railways and long haul cargo via land.

FORWARD

(10) IBM (4.5%). Information technology - Big Data and Data Analytics. Buzzwords of the decade. Still waiting for Dr Watson to make an impact.

(11) Philip Morris (15.0%). Cigarettes. Global addiction, big time.

RESERVE

(12) Chevron (0.6%). Another big oil, similar to but smaller than Exxon Mobil.

(13) Target (29.1%). Another departmental store, similar to Walmart. I prefer to shop at Target though.
--

Interesting contrasts over the performance of Walmart compared to Target, and likewise between Exxon and Chevron. Big oil has of course suffered in recent months. But perhaps gradual recovery in sight. Sounds like an opportunity to continue buying more. Target has done better as I bought at its throes of poor performance over its Canadian fiasco which it subsequently exited.

Many of the companies derive much of their revenues from the global market and continue to thrive, in general. Don't think there will be any significant changes I need to make to this team.

I'm keenly watching a few players to bring on board. Maybe Disney and Visa?

Related:
A US team of dividend stocks

Disclaimer: 
By no means a suggestion to buy any of these stocks. I bought them at different times and have owned most of them for a few years as my approach is generally one of "buy and hold".

McDonalds - Trash in the food, is it still good?

Reputation is Everything

McDonalds has been experiencing a lot of bad publicity of late, especially in Japan. Publicity it certainly wished it didn't have. How about some dental material along with your burger? Maybe it came off the consumer's dental work and had nothing to do with McDonalds? But there was also the human tooth in fries, vinyl in chicken nuggets, and plastic in sundae. Not the kind of free gifts we want from our Macs for sure!

In any case, as a global company, it is hard for McDonalds to guarantee the quality and efficacy of its global supply chain. Making it even harder are the regional franchises with their own supply chains. It's a tough quality control problem. In an increasingly global market, ensuring the quality control of its entire supply chain can really be a bugbear. All it takes is a lapse or two, the loss of trust, and it's major damage to a company's reputation.

Healthy Lifestyle, Trendy Lifestyle

The trend towards healthy lifestyle and hence healthy food isn't helping McDonalds in its mature markets. Past attempts at healthy variations haven't turned out well. Their healthy variants just don't give the same kind of oomph.

In Australia, it is apparently carrying out some experiments at selective outlets with some trendy ideas. Seems Mac is very profitable in Australia. It's always good to experiment from a position of strength.

Trying Too Hard, More is Not Better

In the US, it seems their overly complex variety of menu options have created an execution problem, with stores taking too long to generate fast food. Can't call yourself a fast food joint if it doesn't come out fast enough right?

I recall with fondness the wonderful burgers from In-N-Out. Their menu is really the simplest I have ever seen. No complexities. Yet, the quality of the food is such that it makes you crave for more. Ever seen how they make their french fries? I saw them having a machine that peeled and sliced a potato, and the slices drop straight into the fryer. How fresh can it get?

Simplicity has its beauty.

It's All About Junior

Has the taste bud of its most important customer demographic changed? Their strongest proponents could well be the kids. Give your kids a choice of visiting a Mac, would they say no? They still like it right? So you have the very young who would drag their parents along. And then there're the price-sensitive teenagers. Price matters.

It boils down to children and teenagers. If these are the future of the human race, and they continue to like Mac, the future seems bright for the yellow arch?

Where Goes its Future?

It faces stiff competition from numerous fast food joints in its US market. Is this a passing fad or these are serious alternatives? Is it going downhill like Kodak and the sunset death throes of the wet film business, or is this just a blip in its long history?

Or will this moment in time turn out to be another wonderful opportunity to become an owner of McDonalds I wonder?

Here's a value proposition: If you're a frequent customer of McDonalds, instead of just paying them for your burgers and fries, how about owning their shares and collecting their dividends? Mac pays you instead!?

McDonalds remains a key midfielder in My US Team.

Disclaimer: Do your due diligence!

X'mas 2014

Its X'mas 2014. I've been lazy with blogging of late. In part, this was because I've been travelling on holidays. And watching with some excitement the ups and downs of the stock markets.

Bob the Builder

In recent weeks, I've visited KL and Sydney and couldn't help noticing the extent of construction work going on in both cities. There can be all kinds of bad news (e.g. impact of oil on Malaysia, and mining for Australia), but their economies appear to do fine. Economic activities continue to thrive. Life goes on.

As a trivia ... I didn't realise the significance of the location of the Lindt Cafe at Martin Place, Sydney. Guess what's just across from the cafe?

Slippery Oil

The rapid reversal of the price of oil I think has created opportunities. It's time to start watching the big US oil companies. After all, we need oil for plenty of things don't we? It may just take awhile to see results. I read an article a few days ago which highlighted news from the last major oil crisis. The parallels were indeed stark. So much fear. Opportunity! ExxonMobil or Chevron anyone?

All that Gloom May Not Be Doom

Look at what happened to China recently. It was all doom and gloom a few months ago. Its stock market took a nosedive. It was bleeding nose affair. But in the last few weeks, it  appears to have risen rapidly. There is so much disjointedness between the stock market and economic data sometimes.

Global Business Diversification

It's great to have companies that are global in nature and does business across the global. Consider Johnson & Johnson, Proctor & Gamble, McDonalds and such. In contrast, a company like Empire Food which does most of its business in Russia suffers horribly when hit with a shock like currency devaluation. Roubles rubbles, bubbles jumble, absolutely trouble.

The End of 365 Days Since X'mas

It's X'mas today. That means the New Year is just round the corner. Time to take stock of my portfolio's growth over the year. Looking forward to the crediting of interest to my CPF as well.

Merry X'mas & Happy New Year!

p/s: Actually X'mas is coming again. It's just another 364 days away!

A US Team of Dividend Growth/Value Stocks

Aside from investing in SGX stocks (My World Cup Team (of Dividend Value Stocks)), I also own a smaller portfolio in US stocks as part of my globally diversified investment portfolio. Other regions are held in the form of Exchange Traded Funds and Unit Trusts.

At the moment, my US team looks like this:

Goalkeeper:
  Berkshire Hathaway-B

Defense:
  Johnson & Johnson

  Proctor & Gamble

  Chevron

  Anheuser Busch

Midfield:
  Wells Fargo

  McDonalds

  Target

  Union Pacific

Forward:
  IBM 

  Philip Morris

Berkshire Hathaway is a steady goalkeeper that has proven its worth over the long history since its founding by Warren Buffet and Charlie Munger.

The defensive line of 4 is made up of various companies that are likely to float in good time or bad. Toiletries, consumer medical and household products are things that have high repeat value, regardless the market situation. Oil will always be needed, until alternatives start to make oil irrelevant. But I can't see that happening anytime soon. And beer, will continue to be guzzled, perhaps even more so when things aren't looking good.

The midfield line up is an interesting variety of a financial heavyweight, fast food, large scale retailer and nation-wide train system. Of these, perhaps the more risky one is Target as it continues to face difficulty with its troubled expansion into Canada struggling. The Canadians are really not too enthu' with them.

The forward line up of IBM and Philip Morris will take some time to pan out. It's hard for a smoker to cut a smoking habit. A rapidly growing emerging market will likely generate an increasingly higher demand for their products. Of course, there are many risks given that this is a really unhealthy business and will face regularity pressures with high taxation and domestic product alternatives. IBM ... hmm ... let's see how this IT behemoth transforms itself. It has pretty much given up everything that is a commodity - i.e. the hardware business.

Two interesting key attributes of most of the above companies: (a) many are holdings of Berkshire Hathaway, and (b) they are dividend growth champions! Ironically, Berkshire itself doesn't give out dividends. Warren Buffet has always said that his company can do a better job of capital allocation and it makes more sense for them to invest the money than to give out as dividends. Besides, US tax the dividend payouts. As a Singaporean investor, I would lose 30% from withholding tax for dividends that are paid out.

The first team with the above 11 players are doing well.  However, my bench isn't doing too well - i.e. Coach. My holding in Coach has dropped a third in value.

Coach has been suffering from competitive pressures from Kate Spade and Michael Kors. Its attempt to generate more sales via atfactory outlets has devalued its branding. But still, we see many ladies holding Coach products. The company's financials look good. Let's see if it survives the challenge from the new brands and turn things around over time.

It's an irony isn't it? The problem is the Coach. Muahahah!

Dividend Growth Stocks

For the past few years, I've been taking the approach of looking for value stocks on SGX with good dividend yield.  The strategy seems to have worked well so far.  Of late, I started examining the dividend growth history of various stocks and it seems that there are a few that stand out significantly:

- The Hour Glass
- VICOM

Interestingly, their dividend payouts in absolute dollars have been consistently rising (dividend per share), supported by increasing earnings (earnings per share).  I view with some optimism that Breadtalk may in time fall into this class as well.

Examining the NYSE, there seem to be even more options.  These include:

- McDonalds
- Yum!  (KFC)
- Coca Cola
- PepsiCo
- Johnson & Johnson [EPS is less consistent]
- Clorox
- Kimberly-Clark

These are all familiar brands with significant global presence.  All appear to have been growing steadily over many years.  Fastfood, drinks and toiletries -   essentials in both good times and bad?


Looks like good stocks to hold onto for a lifetime of consistent and growing dividend payout?  Sounds like a plan!