A Review of Investments for 2015

2015 has actually turned out to be a horrendous year, or a wonderful year, depending on how you look at it as an investor. Checking against the STI, I realised it has actually suffered a -14.3% dropped compared to this time last year. Taking into account 3% of dividends which the STI index would not have accounted for, that would actually be -11.3% net in terms of total returns.

So if you're sitting on a 11.3% loss, you're pretty much doing market normal. You're normal. On the other hand, if you've been buying throughout the year when the market dropped, it's probably going to turn out great in the longer run. That is, provided you didn't buy a bunch of junk! You had a lot of guts and I wish you success! You're probably abnormal.

My stock investment has returned an IRR of -1.2% for 2015 inclusive dividends reinvested into the portfolio. So I guess I should take some satisfaction that I have outperformed the market for the 6th year running. Can I gloat somewhat?

However, my long term IRR has continued to slide: from ~20% (2012-13, 4-5 years), to 17.3% (2014, 6 years), and now ~12% (2015, 7 years). A case of reversion to mean? Still, 12% over 7 years is not a bad long term performance. I'm consoling myself.

The shares portfolio is taking on a more global outlook as I've started investing into other regional ETFs (esp. Europe, Asia-Pac and Japan) on top of my current holdings of Singapore and US shares. If this was a fund management company, I should probably use some other global benchmarks. But I'm not, so I will continue to reference STI as my benchmark, because that's what my opportunity cost is. I'm only accountable to myself.

Bought:
  Anheuser Busch (US)

  ARA Asset Mgt
  Aspial (bonds)
  Boustead
  Capitacom Trust
  Capitaland
  CIMB Asiapac Div ETF
  Exxon Mobil (US)
  Global Logistic
  HongKong Land
  JMH
  Keppel
  Lyxor Europe10 ETF
  Lyxor Japan10 ETF
  M1
  OCBC
  Second Chance
  The Hour Glass
  Union Pacific
  YZG
  Zagro Asia

Rights Issues Subscribed:
  ARA Asset Mgt

Sold:
  nothing!

Lots of buying, not much selling. To be precise, I've sold nothing throughout the year. I've been a stooge. Gave nothing away.

Dividend income grew marginally to $11,168 for 2015. This would have been higher of course, except that I chose to accept all options offered in the form of scrip dividends (i.e. additional shares in lieu of cash) as per previous year. I'm too lazy to figure out what the exact dividend amount would have been. But I estimate it would likely be in the region of $14,000 for the shares portfolio. That's not enough to live off my lifestyle on, yet.

But from an overall perspective, the total portfolio of shares, unit trust, investment-linked and cash/bonds has finally breached the 7-figure zone. The journey is progressing well. The point of "inflexion" (a.k.a. financial independence) is coming.

Despite a tumultuous 2015, here's wishing you a wonderful 2016 next. Happy New Year!

A Tale from Taiwan Trip

It's the year end and so it was time for my usual sojourn to some overseas destination. Fascinatingly, it seems many friends and colleagues also went to the same country - Taiwan! I wonder why? Did the exchange rate dropped and I didn't realise it?

Anyway, we were on the lake cruise at Sun Moon Lake on a bright sunny December day. The cruise (or ferry rather?) made two stopovers, first at a temple where the famous "cha ye tan" (tea-boiled egg) store is, then at a second stop where there are some streets with roadside food stalls and souvenir shops, before looping back to the start point.

The temple was no biggy, though it was a decent walk around and uphill somewhat. Good exercise with all the food binge in Taiwan. The egg was good! So it was worth that exercise.

On the way back for the final leg, we queued up to board the boat as the incoming passengers alighted.  The Captain was loitering along the queue line cracking jokes. As he past our group, he said, "Singapore!" Spot on. Guess our slang and twang was quite inescapable.

Then he passed by one of our party and said, "You're the most beautiful mother I've seen today!" Guess it was quite a compliment. Except, she's a young lady, barely 20 years old. We had a good laugh. He's blind or what? Either that, or it was the most crafty insult?

When the Captain found out his mistake though, he mumbled something to the effect that in that case, he shouldn't miss the chance. He went over to scribble something on a piece of paper and passed the slip to this lady. It was his Line contact. Line is popular in Taiwan.

That's the fastest pick up attempt I've seen. Girl wasn't interested, so I guess he lucked out. No can do.

But the thing is, this guy wasn't shy to test water and then plunge in quickly. Perhaps none too subtle. But he certainly seized his chance when he saw an opportunity.

Is that what entrepreneurial spirit is about?

Is that how we should invest? Test to assess, and if the condition seems good, plunge in?

Hits and Misses - Did I make the right financial choices?

Thinking back to the financial decisions that I had made over a span of 20 years, I wonder if I had made the right financial choices?

My very first home was a 5-room flat bought off the resale market. House hunting was quite an effort of visiting house after house. It's a pretty exhausting exercise. And by the seventh attempt, we pretty much reached a point of fatigue. It was at what would be deemed a ulu (out of the way) area known at Yishun. Whenever I mentioned that I lived in Yishun, the look from friends was one of "kampong" in a far far away land. There were actually goats along the roadside then! And to add to the kick, you get lots of helicopters flying around for novelty. The novelty wore off soon enough, and gets rejuvenated each year before National Day when the chopper with the National flag flew past. It wasn't much of a financial burden as the monthly installment payment was well within the means of a pair of newly weds. I was barely three years into the working market and didn't have much of an income for anything more anyway. So I guess this wasn't a bad decision as I did not overly burdened myself with a high level of debt.

I rate this a "hit" (right choice).

It was more than 12 years later that I decided to "upgrade" to a condominium. When I upgraded to an e-condo, it was another "ulu" out of the way kind of place - Yew Tee. "Where's that?" friends would say with an extreme look of puzzlement. It wasn't an expensive place given it's "ulu"-ness. In addition, I took whatever cash and CPF we had to pay down the principal. Now here's where I have some doubts today. While it certainly reduced the loan capital rapidly to below $100K within a year, I wonder if I should have just lived with the higher level of loan, and use that cash to invest into the market instead? Returns of 6-8% annualised would certainly have outstripped the loan interest of 3%. Plus, I could have refinanced the loan after a few years. But because I had paid down the principal to below $100K, it seems the banks weren't keen to offer refinancing.

I think this was a "miss" (bad choice).

I started investing innocently being a noob in investment. And the very first means was via insurance related means. Compared to not having any form of investment at all, it was a good start. I could rate this a "hit" compared to having no investment whatsoever. But being a bit more tuned in to options today, I would certainly say this has been a "miss". It wasn't the best of returns, though it has given positive returns. Could have done better!

Overall, a "miss".

We stayed off owning a car for several years and relied on public transportation to get around. Thank you LTA! Considering that the car is a depreciating expense, this was probably wise.

I rate this a "hit".

When my second kid was born, my wife and I decided that it was time to get a car. With a maid in tow, five person just wasn't going to fit into a taxi. Our very first car was a second hand Suzuki Swift. It was quite low cost. But you get what you pay for! The car gave us quite of bit of angst when the aircon started to behave like a heater. And one fine day, we started getting steam coming out of the bonnet. Looked like we had bought ourselves a train. Stung by this experience, we went on to buy a brand new Nissan Sunny. On hindsight, I really cannot explain why, but we changed from one Nissan Sunny to another once every three years for the next ten years. Were we crazy or what!? I guess we should plead insanity.

Definitely a "miss".

Our latest car is a Toyota Wish. A family car for a growing family. It has lasted more than six years this time. And with the price of COE in stratospheric levels, it looks like we will continue to operate it for more years to come. It has been a substantively more fuel efficient car than the Nissan Sunnys we owned previously. It has been reliable, with a few incidents of deflated tyres to spice things up. It didn't take too kindly to running over nails I guess? Notwithstanding that it is a depreciating asset, I think overall it has contributed to a certain quality of life.

So I would rate this a "hit".

Housing and cars, two VERY big cost items for Singaporeans. At $12,000 per year for car ownership, that's $184,000 that has gone to Neverland. Seems like a few hits and a few misses for me. How's yours?

Stock Take for 2015 on To-Do's - The Force Awakens!

It's almost the end of the year. Time to do a bit of stock take.

Fully contributed SRS. Checked.

Made donations to charity. Checked, checked, checked.

Contributed $7,000 to wife's CPF-SA. Checked.

Watched Star Wars.  Oops, not yet.  Time to feel the Force yet again.  The last time I did that, I was sitting in the first row of the cinema after having spent a whole afternoon of footdrill training for National Day Parade (marching contingent). Wasn't a good feeling when the screen goes scrolling with the intro.

As a stop gap, probably should go buy a Subway sandwich and get the freebie Star Wars keychain?

Bread Street Kitchen @ Marina Bay Sands

We've probably all heard his rantings on TV. Often, these were nasty remarks that pierce right to the heart. At times, it looks like he was about to get a stroke. Ah, Gordon Ramsey. Perhaps his bark is louder than his bite. And it was his food that I was more interested in.

He had found it worth his while to set up a restaurant in Singapore. And of course, it has to be at an upmarket location at Marina Bay Sands. His Bread Street Kitchen sits at one corner of the complex. Wonder what's the story behind the name though? Gordon wasn't around to answer that question.

Wifey and I decided to make a visit there on our special day. It was a long walk to the restaurant, a walk filled with much expectations. The restaurant itself seemed pretty innocuous from the outside.

With a view facing the bay though, the restaurant is actually at a very nice spot. Fascinating place for people watching too. Many joggers and tourists went traipsing by as we sat our table. I think the ambiance would probably be even more fantastic at night?

We ordered an appetizer, main course and dessert each.

I had ordered the Black Angus Steak (10 oz). When the waitress asked for my choice of sauce to go with it, I took whatever the first thing it was that she said. I didn't know what it was actually. I was completely clueless. When the dish came, it was some gooey yellowish stuff. But, it was REALLY, REALLY GOOD! Turns out it is "bearnaise". Never heard of it before. But apparently, bearnaise and steak is a match made in heaven. The steak itself was impeccable. Yumz.

My dessert was Monkey Shoulder Cheesecake with Sorbet. I was expecting a cheesecake. What came later looked like a pudding, along with a scoop of sorbet. But the taste, oh the taste! Googling the Internet, I discovered that Monkey Shoulder seems to be a whiskey. The sorbet was of course sour. But when I mixed the two, the sourness wasn't there at all. Most intriguing. The whiskey, cheesecake and sorbet blended together to offer a completely different taste experience. There is a logic to the blending. Here's a case of 1+1 does not equal 2. Yumz once again.

The meal of course didn't come cheap. It cost about $100 per person. They actually have much cheaper set meal options. But no regrets. Well worth the price from my perspective. And to top it off, the bill came discounted. Apparently, Citibank Visa has a 10% discount deal. Cool.

Oh, the service? Simply put, fantastic! I wish all service staff were so attentive, and well informed. Gordon must be paying them well.

Everything came looking great, and more importantly, tasted great! It definitely did not disappoint. Well done Bread Street Kitchen! Thoroughly enjoyed the dining experience.

Boteyju San - satisfying a crave for Japanese food

Tuesday was Deepavali. It was great to have yet another public holiday to take things easy. Zen. Happy Dewali to our friends.

I've yet to satisfy my craving for Japanese food despite having gone for a week's sojourn in Tokyo two months ago. Having no other plans for the day, wifey and I decided to give it a go at a Boteyju San restaurant at Star Vista.

Guess we were early. The restaurant wasn't crowded and we managed to get a table for the three of us. I noticed the restaurant was largely laid out for 2-seaters. Perhaps that's more of their typical clientele. Like many such restaurants, orders were placed using a Tablet (iPad?).

I ordered a mixed set which came with servings of wagyu beef, salmon and chicken, along with some potato and vegetables. Tasty enough, although the beef was a tad overcooked.

My daughter ordered the garlic fried rice. It was really tasty! Fragrant.

Wifey went for the yakisoba. It was quite good as well.

The main feature was probably the okonomiyaki which I believe this restaurant is famous for. It didn't disappoint. Might have been more fun though if we could have done some self cooking for this. Kind of remembered the fun we had when we did this previously in Japan, even if we couldn't communicate a word at all with the Japanese staff then who spoke no english! All we needed was a smartphone with a language translator! A life saver to break down language barriers.

What's this got to do with investment or finance? Not much, except maybe the point that we have to enjoy life even as we save towards a financial future. Ok, ok, that's perhaps a wee bit cheesy?

Actually, there is a link. But it wasn't the reason that led me to patronise this restaurant. It was a discovery after the fact, and therefore totally serendipitous. As I was paying for the meal, I discovered with some glee that this restaurant is actually part of a chain for which I had a discount card. 10% discount is no small amount. Thank you Japan Foods!

As a stock though, Japan Foods hasn't been great for me so far. I guess the food industry is a difficult one as there is much competition. Labour in Singapore is expensive. But I do note that Japan Foods makes use of technology to streamline its operations. Its service staff standard isn't as great though, so there's much room for improvement.

Still, the discount card hasn't been a bad thing. Slurp slurp, munch munch.

Related:
Japan Foods - Ajisen Discount

Discounts on Discounts - Saving to the Last Cents

The number of membership discount cards that we hold these days is simply amazing. Some are even in electronic form.

I couldn't help noticing how I was reaping multiple layers of discounts when I was shopping at a mall recently.

I bought dinner at the Food Junction food court. They now have a discount cash card which you can buy from their drink stall. Aside from using the pre-paid (top-up) cash card to pay for the food at the stalls, the same card offers a discount from those food stalls.

I could do likewise for expenses at the Ajisen outlet, where I also have a Japan Foods member discount card for use at Ajisen. The membership card came free when I owned shares of Japan Foods.

And if the payments are made using the Citibank Dividend Card, or POSB Master Card, there are further cash back from the credit cards.

At Popular, I could use my Popular card to buy stuff for my school going teens. On top of which, payments made with with POSB Master Card offers further discount.

Frasers malls (e.g. Causeway Point, Yew Tee Point, etc) have their Frasers Rewards app that allow members to scan in the receipts to get rewards points that are convertible to vouchers after accumulating certain number of points. And if the numerous Frasers mall isn't your kind of place, there're also the CapitaMalls (e.g. Lot One, Plaza Singapura, Bt Panjang Plaza, etc) which have the Capitastar app.

I have on occasion stupidly submitted receipts to the wrong app! Sheesh. It can be a bit tough trying to keep track of which cards and apps to use.

Trivia: How many SGX stocks can you spot related to above?

Considerations in Stock Picking

This is a reminder for myself on the considerations in selecting stocks to invest in ...

I am not a trader, so carrying out technical analysis to decide when to buy and sell by the minute isn't my thing. That is perhaps best left to a full time professional. For a working professional, a value investing approach is probably more appropriate.

Business

Business that lasts, not a flavour of the year thing.
Has products/services that is consumed again and again.
A business that is difficult for competitors to come in is best, less competition.

[I'd rather buy a company that supplies detergent than one that sells washing machines.]

Management

Reliable management, in sync with shareholder interests.
A management that owns and buy even more of their own stocks.
Not overpaying themselves as board members/executives.
Above board business dealings.

[Give me an honest management any day. One that seeks to rewards themselves exorbitantly in times both good and bad is really no different from the gold scam schemers. The only difference is that they 'steal' from investors in broad daylight without having to run away.]

Financials

Viable financials with positive Free Cash Flow (FCF).
Shows growth that is generally growing year on year. Positive earnings (EPS).
Profitable, yet undervalued. Low PE <15, PTB <1.0 (exciting)
Pays sustainable dividends; Dividends (DPS) < Earnings (EPS)

[It's hard to lie with real data. With fraud, something will not balance out, eventually. Unusual increases in Trade Receivables is not a good sign!]

"It's the business, stupid!"

Portfolio of 8 Singapore Stocks - 28 Oct 2015 [updated to correct error]

On 28 Aug 2015, I started exploring a portfolio of 8 Singapore stocks with a value of ~$100,000 (Portfolio of 8 Singapore Stocks). Although the actual value would have been $99,126 (without considering transaction costs), I am assuming $100,000 for simplicity. You could think of the difference as the transaction costs.

How has it fared since? In truth, two months is way too short a time to be meaningful. Nonetheless, here's how it looks:

Stock	No. of  Shares	28 Aug 2015	28 Oct 2015	Value
OCBC	1,300	$9.280	$9.200	$11,960
Keppel	1,700	$7.200	$7.160	$12,172
M1	4,200	$2.92	$2.870	$12,054
Boustead	14,600	$0.855	$0.955	$13,943
Kingsmen	15,200	$0.820	$0.780	$11,856
VICOM	2,100	$6.000	$6.150	$12,915
HourGlass	17,000	$0.735	$0.740	$12,580
GKGoh	14,900	$0.840	$0.825	$12,293

Thanks to CSCCC who highlighted that I had made a mistake with M1's price on 28 Aug 2015, I have adjusted the error as indicated in yellow highlights above.

The portfolio is now $99,723, so it really hasn't moved the needle over the two elapsed months. This valuation does not take into account any dividends. The split is 3-5 between the winners and losers (as indicated in red above). The only significant winner has been Kingsmen.  So it looks pretty flat-line for now and in need of some resuscitation.

Disclaimer: I have not bought such a portfolio on those dates. I am only doing this exploration for fun. But it is true that I do have all these stocks in my holdings and did buy more of some of them during Aug-Sep 2015.

Related:
8 SGX Companies to Keep Watch On

Yawning with the Bears of 2015

In late Aug 2015, I went on a buying spree as the market became a sea of red over several weeks (see Playing with the Bears of 2015). I actually saw my portfolio collapsed by $60,000 during that period. It looked like the year was heading towards negative returns. Not very exciting.

What does $60,000 mean to you? For some, it could well mean two years of salary? For others, it could mean forgoing a few overseas holidays with the family.

I went away for a week of holiday in Sep 2015. I realised I was actually pretty Zen about it. I didn't check my portfolio at all during the week overseas. Instead, I was devouring seafood and other exotica in Japan. Blowfish sashimi anyone?

When I returned from my escapade, I was most pleasantly surprised to discover that the $60,000 'loss' had been reduced to $30,000. I hadn't sold anything. The slow climb to recovery continues.

Even as that is going on, we hear warnings that Singapore could be slipping into a recession and we have to be prepared for it. So will there be more pain ahead?

Times like this, we trust that we have invested into well run companies with sustainable business models that would navigate the challenges and continue to survive. Speculating in penny stocks is likely a gamble not worth risking. In general, I don't anyway. Maybe I'm just risk adverse?

I am sometimes reminded that how well stocks perform do not necessarily correlate with how well the economy performs. While discretionary goods will likely suffer, essential goods and services will continue to be needed. Supermarkets will still be patronised, bread will still be bought for breakfast, cars will continue to go for their required inspections, etc. We will still need to eat and shit. The basics don't go away. We are certainly not returning to the cave age.

Indeed, some goods and services may well have been considered luxuries in the past. But lifestyle changes have turned some of these into 'essentials'. Consider how dependent we are on Internet services, being constantly connected on our mobiles. Times have changed.

My take is that stocks with these consumer demands will thrive. Certainly, the dividend payout provide the additional safety net of an income stream even as we sit and wait. I can be patient.

Investing is a boring affair. Anything else is a gamble. 

Yawn. [Did that make you yawn too? This is so powerful!]

Seafood at factory prices and with discount too - Fassler

Is it possible to get seafood at factory prices and still get a discount? Sounds too good to be true. but Fassler is apparently offering just that.

Fassler Gourmet
46 Woodlands Terrace, Singapore 738459
Opens Mon-Fri 0800-1700H; Sat 0800-1300H
http://www.fasslergourmet.com/

[They have a new outlet at Tiong Bahru as well.]

Having just come back from an overseas holiday, wifey and I decide to drive over to Fassler to stock up our empty fridge. To our delight, they were offering a membership discount scheme.

For a purchase of $50 or more, you can join as a member for a year and get discounts for subsequent buys. Upon signing on at a membership fee of $50, you are given a $60 coupon which can be immediately redeemed. Kind of strange as it is equivalent to saying that you are getting a discount of $10 for free membership.

While it has an online presence where you can also other their products, the membership offer doesn't seem to be offered online. But you can sign up on the spot at their Woodlands Terrace factory/shop.

Wifey and I usually go there to buy their salmon, whether smoked or sashimi grade. It comes as a whole slab. enough for 4 meals x 4 persons. And it's much cheaper than the same item found at Cold Storage. Scallops, clams, various kinds of fish, soup packs, etc.

If you're visiting for the first time and don't know where all the food are, ask the staff. It's in a walk-in refrigerated unit on the right. They provide winter jackets. If you're wearing a pair of bermudas or shorts, you're not going to last very long in there. You've been warned!

For other shops along Woodlands Terrace, see:
A Guide to Woodlands Food Factory Outlets

Staying connected when travelling overseas - Mobile WIFI

It's so hard these days to travel overseas and be disconnected from the Internet. The itch starts to set in to want to stay connected. By day two, it's cold turkey.

In the past, I would subscribe to the Singtel overseas daily plan when needed. This can range from $15 to $30 depending on the country. In some countries, buying a prepaid SIM works out to be a better deal. Set it up on a mobile WIFI device and the whole family can use the connectivity. Unfortunately, it tends to be used up real fast.

At Changi Airport, a service centre has been set up to provide such services for travellers, both inbound and outbound. I paid $8 for 5 days (special rate with a coupon code from a travel fair) for 6 days of use in Japan, as the first day's charge is waived.

Check it out: https://www.changirecommends.com/owifi.aspx

And if you use this link to make a reservation, I get a $5 voucher for the recommendation: https://www.changirecommends.com/owifi.aspx?rc=if0nn88]

The data plans vary across countries. These can range from 400 MB limit per day to unlimited. In some countries, once the limit is reached, throughput is throttled, but still functional. In other countries, the mobile WIFI is completely cut off when that happens! So need to check.

For Japan, the limit was 1 GB daily. 1 GB is a lot for a day. Unless you're surfing video none stop! It sure was handy for my Google Map app on my smartphone as I used it extensively to navigate around in Tokyo and to check which train lines to take and connect to.

I encountered frequent dropped connections on my second day there. Resetting the device seemed to work. I wasn't sure what the reason was. Initially, I thought it occurred whenever there were a lot of strong WIFI signals around. And there are plenty in Tokyo!

But I think the problem was that the battery power drained by the afternoon after several hours of use. Once that happened, it must have gone into a power saving mode. I connected it to a power bank for continuous use. That seemed to work fine thereafter.

Else I would have been completely lost in the maze of Tokyo undergrounds and trains! Happy travels.

Changes to the Citibank Dividend Card

I am one of those people who believe in putting everything I can on credit cards, but I will pay in full when the bills come in. It's so convenient these days where credit cards are accepted everywhere.

Aside from the convenience, more interestingly are the discounts and rebates. Getting money back from your spending, why not? Nothing to lose.

One of the cards I like to use is the Citibank Dividend Visa Card. A few days ago, Citibank circulated a notice that it is making changes to its Citibank Dividend Card. The changes will take effect from 28 Sep 2015.

Merchant Category Amount of cash back earned on the transaction based on that month's statement of account if spend is less than S$888^ if spend is S$888 or more^ Petrol 0.25% 8%* Grocery 0.25% 8%* Dining 0.25% 8%* All others 0.25% 0.25%

The footnote to the table further elaborated that the amount of cashback (dividend) is capped at $25 for each of the first three categories (i.e. petrol, grocery and dining). Effectively, that means that any spending on a category above $312.50 will not earn any further cashback. On the positive side, the dividend will no longer expire.

My monthly expenditure on grocery and dining tends to go way above that. Looks like I should start diverting spending to my other credit cards like DBS/POSB and UOB One cards? Citibank Credit is going to lose some of my credit spending.



No minimum spend is required to earn the cashback. But as indicated in above table, the cashback will be much lower if the total spend that month is less than $888. Huat ah!

It's rather difficult to figure out what the impact is for the individual. I wish they could have provided some indications by using my last few months' credit bills to illustrate how it would have differed from the past.

I hear OCBC has also made changes to their card (The annoying OCBC Frank credit card). Azrael was pretty annoyed by the changes to OCBC's. The banks always maintain an escape clause that allow them to make changes anytime. So it's their prerogative. But it is annoying.

Watch your credits!

Related:
4 credit cards with great cashbacks and discounts