My mother is at a ripe old age, and already a great grandmother. Older folks derive an immense sense of pride and joy in seeing the expansion of their family bloodline - children, grandchildren, and great grandchildren even.
For years since I started work, I've been making it a point to contribute 10% of my income to her. She hadn't found much of a need to spend. So she had been systematically saving the money into a bank savings account.
Recently, she showed me her passbook. Yes, she's still using a passbook! More than 20 years on, the savings had snowballed to well over $200,000. That's quite a tidy sum indeed.
She has some interesting intentions over how this would be used.
Firstly, should she run into any medical problem, this sum would be used to pay for medical contingencies. To ensure that someone else would have access to it, the savings account book was hence set up as a Joint Savings "or" account with me.
Secondly, if she passes on, her intention is that I should inherit the sum. As far as she is concerned, the money was from me and it's only fair that it should end up with me eventually (if any is left).
Personally, my thoughts were that the money I gave her was for her to use and to spend as she saw fit. I have no expectations for any sort of inheritance.
My mother is a most frugal person and remains very much a saver rather than a spender. In part, her sense of cost is very much anchored to her childhood. Hence, she really has difficulty contemplating paying for expensive meals, or even the taxi fare.
Several points I get from this:
- Frugality and savings can generate a tidy sum by retirement.
- Set aside a sum for medical emergencies; this risk increases with age.
- Have someone you trust to have access to the cash; not going to help you if you're in serious trouble and someone can't get access to it for you.
The only downside is that keeping the sum in a savings account hasn't exactly been ideal with the negligible interest rates that we've been experiencing. But it's not unreasonable either given that this hoard has to be kept fluid, and in low-risk form.
Seems like a reasonable plan? I thought it was quite prudent.
The side note that I had was over when my mother should have communicated this intention? It's fortunate that she is still in fairly good mental and physical health despite her age. Although, I can observe in recent years that she can get pretty confused. I think it is best to establish such an arrangement much earlier.
Fruits for thoughts.
Meanwhile, HELLO 2015!
Investment through the ages, from cradle to grave.
30 December 2014
SingPost - From Postal Service to eCommerce
Not too long ago, SingPost was viewed as an excellent dividend stock on SGX. Being the monopoly in postal services, it was viewed as a bedrock income stock. However, with the advent of the Internet and pervasive mobile device access, one wonders what dinosaur still need to send letters around? Numbers have been clearly dwindling in this regard.
So it is with some risk, and I feel with much strategic foresight, that SingPost brought in a new management team and started embarking on exploiting their strength, rapidly moving into eCommerce logistics by acquiring several companies. At the same time, exploiting technology to enhance and improve efficiency in their traditional postal services.
If it was once a dividend-value stock, it is now more like a growth company. Its future could yet be most exciting.
Interestingly, I read that the US Postal Services (USPS) has also started thinking along this line, recognising that its existing reach could well put it in a position to challenge UPS and FedEx. USPS has been suffering from losses and cutbacks in recent years. They're a bit slow aren't there?
Being small can sometimes a be a strength - by being nimble, complemented by foresight and the courage to take action to reshape its future. Being large has benefits in terms of critical mass, and therefore enjoying economy of scale. But a large machinery moves too slowly sometimes, grounded by its inertia.
See previous:
SingPost Joins Hand with Alibaba and the 40 Thieves
So it is with some risk, and I feel with much strategic foresight, that SingPost brought in a new management team and started embarking on exploiting their strength, rapidly moving into eCommerce logistics by acquiring several companies. At the same time, exploiting technology to enhance and improve efficiency in their traditional postal services.
If it was once a dividend-value stock, it is now more like a growth company. Its future could yet be most exciting.
Interestingly, I read that the US Postal Services (USPS) has also started thinking along this line, recognising that its existing reach could well put it in a position to challenge UPS and FedEx. USPS has been suffering from losses and cutbacks in recent years. They're a bit slow aren't there?
Being small can sometimes a be a strength - by being nimble, complemented by foresight and the courage to take action to reshape its future. Being large has benefits in terms of critical mass, and therefore enjoying economy of scale. But a large machinery moves too slowly sometimes, grounded by its inertia.
See previous:
SingPost Joins Hand with Alibaba and the 40 Thieves
29 December 2014
Boustead - a Hive Demerging
The headline of an article in The Edge screamed "Boustead Proposes a Break-up"! Sounded disastrous. Actually it is not. Essentially, Boustead is mooting to separate its property business into a REIT and to distribute the shares of this new company to its existing shareholders via a distribution in specie. It's like receiving dividends in the form of additional shares, except that these are for a separate company that is also listed on the stock exchange.
Sounds interesting rather than disastrous. However, some shareholders are not in favour as Boustead could lose some of its inherent diversity to withstand ups and downs with its respective business sectors if it hives off the property business.
Regardless, Boustead has maintained a pretty steady performance over the years. It is one of the stock in my team selection: My World Cup Team (of Dividend Value Stocks). I remain vested in this company.
Sounds interesting rather than disastrous. However, some shareholders are not in favour as Boustead could lose some of its inherent diversity to withstand ups and downs with its respective business sectors if it hives off the property business.
Regardless, Boustead has maintained a pretty steady performance over the years. It is one of the stock in my team selection: My World Cup Team (of Dividend Value Stocks). I remain vested in this company.
27 December 2014
Buyout interest in euNetworks (a GKGoh associate)
There is quite a bit of coverage in this week's The Edge on GKGoh, especially over the possibility of a buy out of euNetworks, an associate company.
Strange that there is so much interest in euNetworks considering that it has been loss making thus far. The potential probably lies in its role as an incumbent of fibre networks in major European cities. It is likely difficult for any new entrant to be able to lay new networks in such mature cities.
Meanwhile, GKGoh continues to trade at a discount to its book value (P/B is 0.72). So that remains attractive to me personally. I always find it strange when a company is valued below its book value when there is no apparent reason. Unrecognised value, or simply the norm for an investment holding company to suffer a discount?
I particularly like its holding of Boardroom, another stock on the SGX, and its Australian aged care holding. Boardroom has shown steady business and dividend payout. The Australian holding will likely provide a regular income stream as well.
I like that the founders/insiders have been buying their own stocks regularly in recent months.
A key risk lies in that the original founder is already 70 years of age and is looking at his succession. He has two sons in the company. Will the next generation be able to run the investment holding company as prudently and successfully?
See previous assessment:
G K Goh - who is this guy?
Strange that there is so much interest in euNetworks considering that it has been loss making thus far. The potential probably lies in its role as an incumbent of fibre networks in major European cities. It is likely difficult for any new entrant to be able to lay new networks in such mature cities.
Meanwhile, GKGoh continues to trade at a discount to its book value (P/B is 0.72). So that remains attractive to me personally. I always find it strange when a company is valued below its book value when there is no apparent reason. Unrecognised value, or simply the norm for an investment holding company to suffer a discount?
I particularly like its holding of Boardroom, another stock on the SGX, and its Australian aged care holding. Boardroom has shown steady business and dividend payout. The Australian holding will likely provide a regular income stream as well.
I like that the founders/insiders have been buying their own stocks regularly in recent months.
A key risk lies in that the original founder is already 70 years of age and is looking at his succession. He has two sons in the company. Will the next generation be able to run the investment holding company as prudently and successfully?
See previous assessment:
G K Goh - who is this guy?
25 December 2014
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!
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!
04 December 2014
3 Events in Recent Weeks
Thoughts on 3 events over these past weeks:
1. SGX Crashed. Traders must have moaned and groaned until it was recovered. Pity those software and systems engineers involved in the fiasco. Must have stressed until 'lao sai'. Who benefits? Maybe nobody. Who suffers? Those who trade. But being a value investor, it was a non-event. Fascinating, and marginally amused.
2. Oil Slips. It's been a steep and slippery slope downhill. Beginning to look like Gold. Who benefits? Those who use a lot of oil in the first place. So transportation companies ought to benefit. Yeah for SIA! Who suffers? Those who make money selling oil. Oh no for Chevron. How will it affect Union Pacific? Mixed feelings, given that it is a transportation company but its current business loads seemed to be from moving fuels around. Not doing anything, but watching with interest.
3. The Glass Splits. Not that it's broke, but the shares of The Hour Glass went through a stock split of 3 shares for every 1 share. Effectively, that meant the price also dropped to 1/3, all else unchanged. Interestingly though, there was quite a bit of selling thereafter. Probably some people didn't know what had happened and thought it had crashed. Sounds like an opportunity, so I bought more.
1. SGX Crashed. Traders must have moaned and groaned until it was recovered. Pity those software and systems engineers involved in the fiasco. Must have stressed until 'lao sai'. Who benefits? Maybe nobody. Who suffers? Those who trade. But being a value investor, it was a non-event. Fascinating, and marginally amused.
2. Oil Slips. It's been a steep and slippery slope downhill. Beginning to look like Gold. Who benefits? Those who use a lot of oil in the first place. So transportation companies ought to benefit. Yeah for SIA! Who suffers? Those who make money selling oil. Oh no for Chevron. How will it affect Union Pacific? Mixed feelings, given that it is a transportation company but its current business loads seemed to be from moving fuels around. Not doing anything, but watching with interest.
3. The Glass Splits. Not that it's broke, but the shares of The Hour Glass went through a stock split of 3 shares for every 1 share. Effectively, that meant the price also dropped to 1/3, all else unchanged. Interestingly though, there was quite a bit of selling thereafter. Probably some people didn't know what had happened and thought it had crashed. Sounds like an opportunity, so I bought more.
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