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Portfolio Update - May & June 2018

Apologize for the lack of postings for the last 2 months. I had been pretty tied up with work, so let me do a quick update for May and June.

The local market has also turned quite badly in Q2, and is fact quite disastrous on my portfolio.

Hyflux 6% Perps

Hyflux announced that it will not paying interest on the Perps during this period. 

I have written a post in Feb 2018 on how disgusted i was with Ms Olivia Lum but didn't cut loss on that position then.  I hope the authorities will look into whether she has contravened any articles in the Securities and Futures Act . . . 

In any case, i have written down the value of my perps to 10% of its face value. πŸ€•

Lesson Learnt : Don't be lured by high interest rate and "high profile" business lady. Watch the cash flow and credit quality of the investment closely 

Dividends Received from SRS Portfolio

I received $5,918 from the SRS portfolio, contributed primarily by UMS Holdings ($3,000), Netlink Trust ($1,620), Starhill ($545) and Frasers Commercial Trust ($753).

The SRS value has tumbled quite a bit to $223,050, compared to its peak in March of $265,214. A drop of more than $42,000.... πŸ€•



Lesson Learnt: More nimble on equity positions in my dividend portfolio. To consider selling the equity if the returns are good

Trading positions

The trade in Facebook has turned out well and i sold my position in June.

Passive Income Update

One of the hottest "IPO" in June turned out to be the Astrea IV bond issuance. I managed to load up quite a bit on both the USD and SGD tranches from the wholesale market. My IPO write up is here. This is one of the more secured bond (definitely better than Hyflux Perps). It is also rated A by the rating agencies where the banks will also provide leverage against the purchase. 

On the flip side, I have written Hyflux Perps to 10% of its face value and projected zero income for the future. 

This is how my monthly passive income looks like on the portfolio.



The good news for me is that the passive income hit a high of $76,473 (or average of $6,372 per month) and exceeded my 2018 goal of $60,000 per year earlier than expected.The figure will drop towards end of the end as Perenial Bonds will mature in October this year.

That's all for now.

Happy SRSing






Portfolio Update - April 2018

IPOs

As announced on my IPO Facebook Page this morning, i have refreshed my chilli ratings for the IPO to include a "likely opening price vis-a-vis the IPO price" based on the chilli ratings. You can access the latest ratings criteria here.


The refreshed ratings is in response to questions from readers who always inevitably, one way or another, ask me what i think the opening price will be. As such, i have decided to make it easier by sharing with readers what i think the opening price will be and that will be tagged to the chilli ratings as well

To recap:

Chopped Chilli - around or below IPO price
1 Chilli - 0% to 10% above IPO price
2 Chilli - 10% to 20% above IPO price
3 Chilli - More than 20% above IPO price

In this regard, using the 2 IPOs as an example, SLB development debut well at my ratings of 1.5 chilli (13% above its IPO price) and Asian Healthcare Services had a 3 chilli debut (50% above IPO price). It was such a strong debut for Asian Healthcare that they have to do a press release about it πŸ˜‹ 

On that note, my IPO tikams for 2018 is off to a record start - let's see if it last till end of the year.

Passive Income Portfolio (SRS and non SRS)

Some of the portfolio companies announced the results.

Capitamall Trust - I convinced Mrs IPO to buy this in Feb at $1.98. The price has done well and recovered to a high of 2.12 recently. Very tempted to ask her to just sell it and collect the entire year's dividend and wait for correction hahaha. The Company announced a DPU of 2.78 cents for 1Q distribution (versus 2.73 cents last year). The Q1 2018 payment date is on 30 May 2018.

Frasers Commercial Trust - announced a drop in 2Q DPU of 2.40 cents (versus 2.51 same quarter last FY) but similar to the prior year, which is a good sign as it means the decline has now stablised.  The distribution will be made on 30 May 2018.


Keppel-KBS REIT - announced a "0.4% better than forecast" DPU of 2.32 US cents. There will be no distribution from listing date till 31 March 2018. The first distribution will be for the period from Listing Date to 30 June 2018... so investors have to wait a while longer... πŸ™„



Starhill Global REIT - announced that it will released its results on 26 April. This is one stock which i am not pleased with.... i may switch my capital to other better performing stocks. The other being Netlink Trust. I will rebalance them in the coming weeks once i collected the dividends.

UMS Holdings Limited - will be having its AGM at Intercontinental on 26 April 2018 at 10am. If approved at the AGM, 3 cents will be paid out to its investors and based on my shareholding, it will be another $3,000. I love this stock as the Company continued to pay 6 cents despite the increase in shares due to the bonus issuance! Definitely much better than the other bonds which i am holding... may increase my allocation to this counter if there is a severe correction that is happening to Venture Corp now.. UMS also announced the acquisition of a 70% stake in non-ferrous metal alloys specialist, Starke Singapore (not related to Ironman). The acquisition seemed to be a excellent one as it is based on NTA and Starke is profitable to the tune of $1.9m with cash of $1.5m.  

Perennial 4.65% Due 2018 - This is my second last payment from the counter before getting my capital back. The payment will be made on 23 April 2018. 

My non SRS and SRS portfolio summary is here and here respectively.

Trading Position

My Facebook Position has turned "black" since i last blogged about it here. Still holding on to it but it seemed like a big movement is coming as the Company will announce its earnings next week. See article here. Fingers crossed! 

Happy Retirement Planning ...

Portfolio Update - March 2018


How time flies ~ it is already end of March and 3 months has passed in 2018. I was recently in Tokyo for a business trip and was pleasantly surprised to see the Sakura blooming in the city. The picture above is along the Meguro River where you see rows of Sakura along the canal.


I then went to the Chidorigafuchi (see picture above beside the Imperial Palace) to see couples having fun rowing boat in the moat! That certainly looks romantic and definitely not for someone who is there on a business trip... πŸ’‘The Ueno Park is probably less pleasant (below) as it is way too overcrowded. Hence if you are there for the sakura, Meguro and Chidorigafuchi would get the votes for me but not Ueno Park.


Trading Update

I previously mentioned I bought Apple and Singtel in Feb and i have since divested AAPL in March for a small profit but only managed to "break even" for Singtel.


Personally i find the Singapore market more difficult to trade as the volatility is "lower" than the US markets. For my next trading position in US, i have bought some "Facebook" for a rebound back to the 170 levels. Let's see how this trade turns out.


SRS Portfolio



This SRS portfolio is always very interesting. The biggest "mover" is now the UMS position. Now that i hold 100,000 shares, every 1 cent movement translate into $1,000 move as well and from my Feb update, UMS went to a high of 1.36 before ending at 1.17 last friday. I have to tell you that if i put on my trading hat, i would indeed be very tempted to "take profit" at above 130 πŸ˜†

From my Feb update, the porfolio increase in value by another $19,450



Non SRS Portfolio

No major update except the Hylux Perps has now "halved" in value. I am pretty upset with myself (and with Olivia Lum of course). 😠 Other than this, no major movement seen here. You can read more about why i am upset about Hyflux here

IPO write up - Ayondo

Ayondo IPO was briefly "supported" before the support gave way. My rating was here and i have given it a "zero" chilli rating for the longer term. On hindsight, i should probably have given it a lower Chilli rating for its debut as well and gave less "weightage" to non-fundamental attributes even though i have to admit that the debut timing was pretty bad!  

That is it for now. No major changes to my positions in March and happy SRSing! 

Mr. IPO weekly ramblings

Welcome to my weekly ramblings. I have no specific topics since I am lazy and want to do one post for many random stuff πŸ˜†

SRS Website 

As you can tell, I have reinstated my previous blog layout. After experimenting with a new design, I still find the old layout more practical and easier for readers to search for previous articles (and make it easier for the ads to be shown as well πŸ˜‚)...

Passive income / Portfolio update 

No further additions to my passive income portfolio. The projected full year income is still around $54,423 and my goal is to hit $60,000 in passive income this year. You can search for updates on my portfolio here.

Let's see what are some of the results that have been announced. 

Frasers Commercial Trust

My shareholdings has now increased to 47,168 due to the DRP programme.

Starhill Global

Received about $352 of distributions based on my shareholding of 30,000 shares. 

UMS holdings


UMS announced a record year with net profit rising to S$52m and proposed a final + special dividend of 3 cents. Based on my 100,000 shares position, it will translate into a $3,000 dividend payment on 25 May 2018. I am looking forward to that payment. In the press release, the Company mentioned that "barring unforeseen circumstances, the Group expects prospects to remain bright for FY2018." I will continue to hold on to UMS Holdings for now.

Hyflyx Perps

Hyflux announced a poor set of results and that it will not be redeeming its CPS in April until Tuasspring is divested. Olivia continued to sound defiant and the bankers (especially DBS) is scrambling to determine what the damage is, especially to the Perps market. Probably the Perps market is now dead and the primary culprit is Hyflux.


The "What-If" Portfolio ?

Now that I have build up a stable stream of passive income, I am turning my focus to create a "what if" portfolio.

I had been wondering why we like to tinkle with our portfolio so much. Why can't we just buy and hold on to the stocks, why do we always have the urge to keep rebalancing the portfolio.  And if I had invested in some US stocks just 5 years ago (around year 2013) and not even extending that to the global financial crisis, I would have done very well for myself. 

A simple portfolio of $100,000 in 5 stocks (without even considering the dividends) that I use in everyday life - let's just say Apple, Microsoft, Facebook, Amazon and Alphabet (Google) would have done very well.

Apple - returned 178%
Microsoft - returned 70%
Facebook - returned 470%
Amazon - returned 462%
Alphabet - returned 171%

and the portfolio would have grown from $100,000 to $290,200 over 5 years and if i extend to the financial crisis or even longer, the same $100,000 amount would have translated into millions of dollars.... so the question is, why am i not investing in global stocks... ? I would definitely like to start nibbling in global stocks and hold them for a long time ... let's see if i have the patience and foresight to execute this and check back this space many years down the road.

Year of the 🐢 Portfolio

I am a long time subscriber to the Edge Singapore and every lunar Chinese New Year, they will put up a portfolio of 10 stocks which they believe will outperform the market index over the next 12 months.

I myself manage a live portfolio and I can understand how difficult it is to "predict" the market.

Of course, in this case, there is no real money involved but to get the stars aligned is no easy feat as the portfolio is measured only on two pricing points - @ the last Friday before the CNY and the last Friday of the next CNY. You can't "rebalance" or "sell at anytime" during the period.


The Edge Singapore's 2017 portfolio above outperformed the STI benchmark by 2.1%. I would say the performance is pretty good.

The Edge Singapore stock picks for 2018 is presented below. Let's see if it can beat the benchmark again next year!


Passive Income Update - February 

SRS Portfolio - addition 

Since the last update, I added another 20,000 shares of Starhill Global REIT @ 73.5 cents. The addition adds another $946 each year to my passive income. 

I bought it for the following reasons:

• NAV is $0.91 vis-a-vis the current price of $0.73 
• Projected yield of 6.4%
• To round up my existing position to 50,000 shares. The total dividend expected from Starhill is now $2,365 each year. 

Non-SRS Portfolio - addition

I convinced Mrs. IPO to part with her "private savings" to buy 25,000 shares of Capitamall Trust at $1.98 each. I have been "convincing" Mrs. IPO to invest gradually. Starting from Aspial Bonds to Netlink and now Capitamall. 

The price has corrected from its recent high of $2.16 in early Jan and is now trading close to its NAV of $1.92. 

The projected yield of 5.62% will mean that it is adding $2,790 each year to her passive income. 

The current criteria I used to select stocks for Mrs IPO is:

• Large cap Company, REITs or Bonds
• Predictability of distribution 
• Quarterly payout or half yearly distributions 

While I would have preferred to buy at below NAV, it's usually quite difficult to do that for a "blue-chip" stock like Capitamall Trust unless it's the GFC. 

With the addition of the above positions, the portfolio I have curated is well positioned to meet my 2018 goal of generating $60,000 per year. 

Hyflux Perps  - My thoughts 

Some readers asked for my views on the Hyflux Perps, so let me share some of my thoughts as a perp holder (not shareholder of Hyflux):

How I view the Management and Board of Hyflux. 

One word - disgusted. 

Why disgusted ? Let me explain. 

On 28 Dec 2017, Hyflux announced that it will distribute 70% of its stake in Hyfluxshop to equity holders and retain a 30% stake. 

The distribution in specie is recently completed where Hyflux investors received one Hyfluxshop share for every 10 Hyflux shares held. Note that Hyfluxshop is an unlisted company with the ELO brand and wellness business. 

The intent is to list Hyfluxshop in future and investors can have direct shareholding in two distinct companies. 

Company usually don't do a dividend-in-specie unless the underlying "specie" is a listed security where shareholders can benefit from either holding the stock or selling them directly in the market place. 

Even the private equity fund managers globally don't distribute shares in private companies to their investors until the underlying investment is listed and even then, they hardy do so. 

In other words, the balance sheet of Hyflux just "lost" 70% in its value of Hyfluxshop. 

Questions I have for Hyflux Board:

Why distribute an unlisted company to existing investor in the first place if the company is not listed? 

If the intent is to list Hyfluxshop, why do they have to do it now? Can't Hyflux do it a later stage when Hyfluxshop is listed and instead incur all these unnecessary expenses?

Who is the biggest loser in this distribution in specie ? 

I probably wouldn't have been so upset if Hyflux is doing well but the fact is the business performance of Hyflux is horrible with declining profitability and widening losses and Hyflux is highly levered. In addition, they have not indicated whether they will redeem the RPS this coming April. 

The big loser in this entire episode is probably the Hyflux CPS and Perp holders. Why? That is because 70% of the value in Hyfluxshop shop has been "leaked out" via the distribution. If Hyfluxshop turn out to be something valuable, then that value is lost and no longer "protects" the Perps holders. Or push it to the other extreme, if Hyflux is to go belly up, the value of Hyfluxshop is no longer in the hands of the creditors (including the Perps holders) of Hyflux. 

Is Hyfluxshop worth something? 

Well, if you ask Olivia, it is definitely worth something. After all, she is willing to pay $0.1783 for each Hyfluxshop share that she doesn't already own. Of course, if you take the half full view, she is "helping" to provide an exit option for investors who don't know what to do with the unlisted shares. She is helping to pay "dividend" to Hyflux shareholders out of her own pocket even when SIC ruled that there is no need for her to do so. 

Why did the Board permit the distribution in specie? Did the Board ask any questions on whether such action is detrimental to Hyflux Perps holders. 

I have no idea. You may want to write to them and ask. 

According to MAS Corporate Governance guidelines clause 3.1, it is not recommended to have the same person acting as both CEO and Chairman of the Board. Usually this role is kept separate but based on the Annual Report 2016, Olivia is holding the dual role. This means she is the boss deciding. 

When I look at the 2016 Annual Report (note I based my writing below on the 2016 report), Teo Kiang Kok is the lead independent director and he was first appointed since 19 Dec 2000! A whopping 17 years and counting. After 17 years can still be independent? 🀣 

Let's see who are the rest of the so-called independent directors:

Gay Chee Cheong is there since Aug 2001. 
Lee Joo Hai since Dec 2000. 
Christopher Murugasu since Feb 2005. 
Gary Kee since May 2011. 
Simon Tay since May 2011. 
Lau Wing Tat since Jul 2014. 

While there is no restriction on the tenure, perhaps the board needs to be refreshed in view of what's happening to Hyflux? 

Who benefits most from the distribution in specie ? 

Why not you tell me which shareholder will benefit the most... πŸ™„

Will Hyflux redeem the CPS that is maturing in April 2018. 

The market is telling you quite clearly that Hyflux is not going to redeem. Which is why the share price of both the CPS and perps crashed in February. In fact, there is a recent article suggesting that it is even cheaper for Hyflux to pay 8% after the step up in interest as it will not be able to raise new funds at that interest rate. 

Will Hyflux go belly up ? 

Your guess is as good as mine. Probably not in the near term or the Board wouldn't dare to approve the distribution in specie. However, if the fundamentals does not improve and continue to worsen, then there is a chance of this happening. 

If Hyflux goes belly up in the next 12 months, I would be quite worried if I am an independent board member. 

I guess one telling sign will be when the board members start to resign for no good reasons. So use that as your E2C (not ELO, punt intended) early warning system. 


Is Mr. IPO still vested and whether he will cut loss? 

Yes I am still holding. As I wrote before, I regretted not taking a more active stance on this position. I probably won't do it now but may consider later when sentiments improve. I am keeping my fingers crossed and see what's next. I am sure I will get at least get my April 2018 payment. 

Hope the above thoughts are useful for you. 

Mr IPO's Passive Income Portfolio (Non SRS as well)

One reader left a comment on what my "non-SRS" positions are in the portfolio is that generated the $50,708 passive income, so let me break it down for you (even though i have blogged about the various holdings in piece-meal) . . .  Note that this post only includes holdings which i hold for the long term and for the passive income. It excludes IPO punts and positions which are not intended for passive income.

The investment cost of the portfolio (both SRS and non SRS) is around $788,681 and is not marked to market (e.g. UMS holdings went up but Hyflux Perps crashed and the SGD fluctuates quite a bit against the USD) and it generates a blended yield of 6.4%. The USD/SGD rate used is 1.32

The monthly "cash flow" pattern is as follows where i managed to create a portfolio that gives me some cash every month.



I have shared with you my SRS portfolio yesterday. So what is not inside my SRS portfolio that helped generated part of the passive income?

Bonds and Perps
  • 100,000 shares of Perenial Real Estate Bonds yielding 4.65% where i got it through the IPO. My IPO write up is here and the bond matures on 23 Oct 2018. I will get $100,000 back this Oct where i can redeploy into other assets
  • 100,000 share of Hyflux Perps yielding 6% and my IPO write up is here. The share price has since crashed by 30% and i complained about the poor management team several times in my SRS blog so i will not repeat them. πŸ™„. The perps will "theoretically" mature on 27 May 2020, otherwise the interest will step up to 8%
  • Mrs IPO managed to get 49,000 shares of Aspial Retail Bond yielding 5.3%. My IPO write up is here. The bond matures on 1 April 2020
  • A US$200,000 bond that yields 6.5% and maturing in July 2021
Stocks and REITs 
  • Mrs IPO 50,000 shares in Netlink Trust yielding 5.43% for its initial year
  • 50,000 shares of Keppel KBS US Reit yielding 6.8%. My IPO write up is here.
What are the few key takeaways for today?

Mr IPO always eat what he cooks (write)

You can see that i eat what i cook (write), so a lot of the stock and bond positions are actually acquired around the time of IPO or shortly after its debut. Ironically, the stock and REITs portfolio is actually yielding 7.1% while the pure bonds and perps portfolio is yielding a blended 6%.

The portfolio is slowly built up over time

This portfolio is not build up overnight but painstakingly over a long period of time. For example, the SRS portfolio grew to where it is today because i started contributing to the SRS portfolio since 2006. It has been a long 12 years! Of course, having two people working as well as some luck in property investments helped paved the way as well.

Over time, we used the capital gains, savings and bonuses to build up the initial portfolio and keep adding on with savings and distributions received. Once it reached a certain scale, a virtuous cycle can be created where you can use the income generated to continue building up the portfolio. 

You can do it too and the younger the better!

I started dabbling in stocks since my army days and then investing more seriously when i moved into my working life. The younger you start, the less school fees you pay and the more time and runway you have to do something right. So if you are in your 20s and early 30s reading my blog, start saving and investing today. You will do fine and hopefully my blog will help provide you with answers or inspiration! 

SRS Portfolio and CPF Update - Feb 2018

The last 2 weeks turned out to be very "exciting" where the US markets crashed and in turn, causing the Asian markets to follow suit. It was ironic that the markets crashed on a set of good news but this has always been the case - "sell on news".

For my SRS portfolio, I added another 15,000 shares of Frasers Commercial Trust at $1.40 this week  . . . you can see that the portfolio i have constructed below is pretty "boring". It won't move up dramatically (other than UMS) and hopefully, it doesn't "move down" dramatically as well and it has proven to be so over the last one week. πŸ’€


and with this addition, my projected passive income for 2018 (including the bonds and stocks in non SRS account) increased to around $50,708. This works out to be an average monthly income of around $4,225.

Trading

For the non SRS portfolio, I also bought some trading positions in AAPL and Singtel this week, but this are purely for short term trading where i am expecting a rebound once this mayhem is over. 

CPF

I have previously blogged about using CPF as a retirement tool back in April 2017 and that i repaid the CPF balances drawn for my property as i rather the government pay me interest than i pay myself interest. I also topped up my 2 kids CPF Special Account using their own Ang Pow money in April 2017.

My elder son received his first CPF statement ever in January and was pretty excited to see $333.28 interest credited into his account. He told me this year he is going to do the same for CNY this year and i told him i will "match" dollar-for-dollar for his Ang Pow money if he does that. 


So how much interest did i get for 2017 after repaying the CPF balances drawn for property (light shaded green pie)? I got about $20,225.02 in interest. 


Hope this can provide some inspiration for your own retirement (or plan for your family). 

Two comments on how i see the CPF for those in the 25-39 age bracket (the "young"): 
  1. I am at a different stage of my life, so if you are young and need to use the CPF to help finance the property, just do it. It helps in alleviating the cash flow needs for a young couple starting up a family. Of course if you can use cash instead of CPF, that would be better  
  2.  I am pretty disturbed that the government intends to a lower the Eldershield age to 30 years old. The article is here. This is making the young fund the old. I think it is not quite ethical to do this at their age. They would need to change the scheme to "Youngershield" ?? πŸ™„ Even though the young can "opt out", i am not sure if that is still the right thing to do.  
That is all for now, wifey is complaining why i am on the computer all afternoon and not helping out with the chores. πŸ˜€

Happy SRSing. Did you buy any "stocks" during the pre-CNY sale? 

What is your personal credit rating in Singapore?

I previously mentioned that i have changed job recently and was asked by my PA to submit a credit report on myself to the authorities . . . πŸ™„ . . . wouldn't the authorities already have access to them already . . . ???

Anyway... what is this credit report? Well... it is your credit profile with the banks here and in the report, you will be given a credit score that shows your potential "default rate". πŸ€”



And the factors affecting your credit profile are as follows:



Looking at my own credit report, i realised the banks have been diligently uploading all my credit card, loans, stocks margin account repayment records onto the system . . .



and the banks which i have applied credit cards for, have also been diligently assessing those reports as well.


So what is Mr. IPO's credit rating .... ??


Mr. IPO's score is 1975, enough to get a AA rating, better than most sovereign's debt other than Singapore's AAA rating. πŸ˜‚ Would you like to place some money with me? 

Well, i have given you 4 digits to buy for this weekend but if you want your own 4D number, you can get your own credit report online here.

Change Warerobe for Chinese New Year?



Chinese New Year is round the corner and my wife is "nagging me" to throw away some "old clothes" before i am "allowed" new ones. πŸ˜‹

I can still recall when i was young, i get to wear new clothes during Chinese New Year ... and today, there is an article on Sunday Times to "review your stocks as would your clothes".  The article is here for your reference. 


I was looking through my portfolio to see if there are any counters which I should "discard" . . .  

SRS Portfolio


Frasers Commercial Trust has done quite well for me and i have elected for scrip dividend since the date I invested. In fact, DBS reiterate it's buy call on FCT on Jan 19 with a price target of $1.71 (11% upside). The report is hereConclusion - I will keep Frasers Commercial Trust.

Netlink Trust - The share price hardly moved above its IPO price. While I have managed to acquire some shares below the IPO price, I would say that Netlink has performed below expectation. UOB mentioned that Netlink Q2 results is inline with expectation and provides a "resilient" dividend yield of 4.9% for FY18 and 5.9% for FY19 with a target price of $0.93. The report is here. Conclusion - I would probably have gotten better results if i have invested in other counters at the same time. Given that i have already waited since July 2017, i will continue to wait till its maiden dividend. 

Starhill Global - This is probably a disappointment. While i have received regular distributions of around 6%, the price has hardly moved. Conclusion - while this counter paled in comparison with other REITs, i can't complain about the 6% yield. Will keep it for now unless there are other compelling REITs which i can switch into. I am putting Capitamall Trust in my watch list as the portfolio is more diversified. 

UMS Holdings - This counter has done extremely well for me and based on my purchase price, the yield is around 10% each year. Once a portfolio gets "significant", every 1 cent movement in UMS equates to $1,000.... so if it drops 5 cents in a day, that is a whopping $5,000 gone. DBS has a target price of $1.21 (report here). Conclusion - Company seemed to be progressing on track and has done well for me. I have no reason to sell this counter at this juncture.


Non SRS Portfolio

Keppel KBS USD REIT - This counter seemed to be doing fine even though USD has weakened. DBS has a$0.95 target based on its 15 Jan 2018 report. Conclusion - will keep it for now till i receive the first dividend.

Hyflux 6% perps - After my posting last week, two things happened . . . The first thing was the price dropped even further down to a low of 70c!! (ouch). The implied yield at 70c is around 8.57%. The second thing was that some readers wrote to me and asked if i am cutting loss or selling. I have earlier mentioned that i would have done so when 90c broke but probably not now. I am disappointed with the management for a few reasons. (i) The perps holders are not entitled to the distribution in kind (ii) they still persist to do the distribution in kind to equity holders even though it is dilutive to the overall health of the Company. Conclusion - This is one "shirt" which i should have gotten rid of long time ago. If the management "dare" to halt dividend or "not call on the perps", I will probably lose the pants too...  πŸ€•

I have a few other bonds that are doing well and trading above par so i will not blog about them here. Conclusion - hold those bonds till maturity.  My projected dividend income for 2018 is around $49,123. I will do another underwriting exercise later. 

Dividend Warriors CDP statement

I always enjoy looking at the "CDP statement" of Dividend Warrior. In fact, a lot of bloggers blog about their great investments but never dared share their portfolio. Sometimes you also wonder if what they said is true or not. Dividend Warrior not just shared with you his portfolio, he showed you his CDP statement. period. πŸ˜‚

While my portfolio is highly concentrated in a few counters, his portfolio is actually quite "diversified". Looking at my portfolio, I can probably invest more into REITs. Given the heavy run up in share price in many of the REIT counters, i will have to be patient to wait for a better entry point. 

Go read his blog and start building your own "income generating" portfolio and you may want to see if you need to change some new "clothes" along the way, just don't end up with the Emperor's new clothes. πŸ˜€

Happy SRSing!

Topping up SRS and random rumblings...

2018 was off to a great start ...

2018 was off to a good start where the compliance placement of Memories Group at 25 cents debut very well and ran up to a high of 41 cents. I benefited from the strong run up in the first 3 days where I managed to dribble out the shares over the first 3 days before the volume tapered off. My write up on Memories Group is here


but i missed out on Cityneon ... 

I was eyeing Cityneon since it corrected from a high of 1.24. I like where the Company is heading fundamentally where it is acquiring intellectual property rights and creating new revenue streams from this IP. My buy order at 97 cents wasn't filled and it ran up when UOB re-issued its "buy" recommendation report.😫 I will wait and see since i am buying this for the long term.


and i decided to top up $15,300 into my SRS account for 2018 ...

The cash in my SRS would increase to $38, 963. This would provide some ammunition for my next purchase.

Readers would know that i faithfully contributed to my SRS account every year since 2006 and over the 13 years, i have contributed $167,025 and the portfolio has since grown to $255,655, compounding at an IRR of 8.2%. 

While my SRS account has done well, wifey's account has not done well at all as it has invested in the 6% Hyflux Perps. The portfolio value is now only 0.84x of the capital invested πŸ€•


As you can see from the chart above, it reached a new low of 77 cents on Friday, indicating low investor's confidence. 

If i sell now, i am going to realise a big loss but if Hyflux redeems my notes at par on 27 May 2020, then wifey's account will escape unscathed. See my IPO write up here

Hyflux Perps taught me a good lesson on credit ... 

The fall in Hyflux Perps taught me a good lesson on credit worthiness of a Company. It issued the perps on declining revenue and profitability and now even distributed "in kind" dividends to its equity holders while leaving the perps holders out in the cold. That to me, is poor governance. I will continue to hold on to this company given that the redemption is 28 months away. Let's check back here again to see if I will live to regret the decision. (side note: under my usual style, i would have cut loss when 90 cents gave way but i didn't do so for two reasons. (i) this is more of a yield play for me and (ii) i need to deal with cumbersome approval process for each sale.... so I chose the lazy way out of leaving it alone) 

That all the random rumblings for now... do stay warm under the super cold weather.... brrrr.... it's super cold but it's great as i have not turned on my aircon for the whole week! 





Review of 2017 and Goals for 2018

Time flies. It seems like yesterday when I blog about my Goals for 2017. 

I always like to set goals for myself at the beginning of each year and see if I am able to achieve them by the end. 

Let's take a quick look at how each of those goals pan out for 2017 and how I measure against them. 

Goal 1 for 2017 - Increase net worth to $x.5m

My definition of "Net Worth" is basically everything we own under the sun from property to stocks and shares and CPF balances. Any increase will be a combination of capital gains, income generated and savings. This is probably the most meaningful measure of what I can "pass on" to the next generation. 

We managed to increase the net worth to $x.366m by end of the year. This falls short of the target by $134,000. The shortfall is also caused by the many trips taken over the last year. 🀣 (see Goal 6 below)

Goal 1 for 2018: Increase net worth to $x.616m (or by $250,000)

Goal 2 for 2017 - Create a portfolio that generate a passive income of $60,000 per year 

At the end of Dec 2017, I only manage to achieve $49,123. This is also due to a weakening of USD, as part of my portfolio is in USD. 

This is one of the more challenging goal to achieve as you want to derive passive income without comprising the portfolio value. 

My passive income goal for 2018 will remain the same. 

Goal 2 for 2018: Unchanged. Create a portfolio that will generate a passive income of $60,000 per year

Goal 3 for 2017 - Trading income of $12,000 per year. 

This is where I seriously underperformed. I didn't trade much last year due to my work schedule. In addition, my preference to take a longer term view of the market meant I took on less trading and more investment positions. This will remain the same in 2018 where I will invest more and trade less. 

Including capital gains and dividend income but excluding the IPO tikams, my portfolio gained $76,839 in 2017. Given that 2017 is a great year for equity investors and unlikely to be repeated, I will have to set a more conservative target for 2018. 

Goal 3 for 2018: Generate valuation and trading income gain of $25,000. This excludes the gains from goal 4. 

Goal 4 for 2017 - Generate IPO Tikams gains of $15,000 

2017 was a good year for IPO Tikams where I generated $26,158. See blog post here. It would have been a better year if not for some of the constraints placed on me. I am glad to say that the constraints has now been removed in 2018 as I have move on to a new company. 

Given IPO markets are sentiment driven and the deal flow is beyond my control; I will try to be less aggressive for my 2018 goal but it will still be a step up for 2017. 

Goal 4 for 2018: Generate IPO Tikams gain of $20,000

Goal 5 for 2017 - Repay all CPF capital and interest drawn for properties

I probably "over-achieve" here where I repaid all the CPF balances and the accrued interest during the year! I used up my bonus and savings to do that in Jan, Apr, Aug, Sep and Oct. 

Originally I have saved up the cash for deploying into the enbloc property market but I missed the boat due to my procrastination and the unwillingness to pay ABSD. In my "fit of anger" 🀣, I repaid more than $400,000 (principal plus accrued interest) back to CPF for both of us. I can always dip into CPF balances again should the property market crashes. 

My goal of returning the cash to CPF is to secure the "foundation" of my retirement plan using CPF as the first layer. CPF are low hanging fruits paying in excess of 2.5% in risk-free interest and I rather the government pay me interest then "own self pay own self interest". 

On that note, a total interest income of $30,143 from Ah Gong was credited into our CPF OA and SA accounts on 31 Dec 2017 πŸ˜‹. Next year will have a higher interest as the CPF balances will have the benefit of the entire year arising from my repayment. 

Goal 5 for 2018: Limited in what I can do here. Probably to max out the balances in CPF through voluntary contributions

Goal 6 for 2017 - Travel to 6 new cities / places / experiences 

This contains my bucket list and I took extended time off this year to recharge and travel. This definitely won't be repeated in 2018. 

I visited more than 11 new cities / places / experiences. Here are some of the highlights in 2017 😊

Viewing Sakura in Washington



Visiting the Highline Park in New York City 



Saying hi to Ms Liberty 



Climbing the Sydney Harbour Bridge



Watching sunrise at Borobudur



Visiting the Vasa Museum in Stockholm



Visit Cinderella castle in Neuschwanstein 



Cross the boat in Lake Bled in Slovenia 



Visit "Lord of the Rings" - Skocjan Cave Slovenia



Watching the sunset in Rovinj



Hiking Lake Plitvice in Croatia



Hallstatt & the salt mines in Austria



Sampling smelly tofu food in Taipei



Viewing Autumn leaves in Niagara



Final Pilgrimage to Le Mont Saint Michel



As you can tell, 2017 will be hard to repeat...

Goal 6 for 2018: 5 new cities, places and/or experiences

Goal 7 for 2017 - Slim down to 80.8 kg (target not met 🀣)

This wasn't exactly a stretched target but like age; the metabolism slows down and it's difficult to get down to my ideal weight. 😭 I need to slim down! 

Goal 7 for 2018: unchanged. Slim down to 80.8 kg

Goal 8 for 2018 - Invest in US stocks (not met)

I didn't manage to invest in US stocks, which I will attempt to do so again in 2018. 

Goal 8 for 2018: unchanged. Start investing in US stocks

Conclusion  

I am pleased to say that I enjoyed 2017 and it had been kind to me. The biggest achievements are not monetary gains but the fond memories and experiences created with family and loved ones. 

Live your dreams, life is short.... and have a great 2018 ahead. 

Portfolio Activities for Dec 2017

December turned out to be a short month, so let's see how the SRS portfolio turned out.

SRS Portfolio

The portfolio ended the year at a record high of $237,815 (an increase of $5,314 since my last update in November). UMS continued to be the biggest contributor to the gains and since my last update, i received the following:

  • $361 distributions from Starhill Global
  • scrip dividend of 545 shares from Frasers Commercial Trust
  • $1,000 cash dividends from UMS Holdings


Non SRS Portfolio

Hyflux Perps

Hyflux Perps continue to be a big drag on my portfolio, falling by 20c to $0.80. While i received the 6% dividend of around $3,024 in end Nov 2017, I really don't like how the management is running the company whereby it has decided to do a distribution in specie of its consumer business to existing investors. You can see the announcement here. While this may be "good" for ordinary shareholders, it is actually dilutive to perps investors. I will continue to put the company on close watch.


APAC Realty Ltd

I sold off the 10,000 shares allotted from the IPO at around $0.87. I have already reported this in the IPO tikams for 2017, so i will not mention more here. 

Passive Income Update

No further update from my November post, the passive income is still around $49,000 annually. I will look to increase this amount in 2018.

That's all for now, i will do a review on 2017 in my next post :)