why i ditch the benz for the lexus

Disclaimer : this is NOT to promote any car brand and I don't receive any payment from any sources. I don't monetarise my blog anyway.

thought i could use my S class till its end of life.

alas,

car was serviced at Cycle and carriage and specialised workshop all the way.
at 8 years of age, gear box issue, rear airmatic gave way. rotor disc worn out
at 9 years of age, aircon blower motor problem, undiagnosed loud acceleration sounds
at 9.5 years of age, the straw that broke the camel neck: car broke down near entrance of expressway. diagnosed to have snapped alternator belt.

I must say a big thank you to my dear wife who insisted on a change of car otherwise she will grab a grab taxi, I am glad I listened to her

i changed to a lexus and never regretted it since. It is the 3 year free servicing and unlimited mileage 5 year warranty which won me over. And this warranty is transferrable to the next owner. benz don't give that me that sort of warranty.

1) welcome message at lexus collection room
2) free breakfast and snacks/drinks at service centre.
3) free use of business centre
4) free use of massage chairs
5) free private area to watch movie
6) free chauffered service to nearby

so far nil problems and driving with a complete peace of mind.

why is it harder to succeed through investing in singapore?

 I had a lengthy but productive discussion with a friend recently. i shall share it below.

as usual, no lengthy essays as i like to present in a short and concise manner.

we can see the obvious gains we can achieve through the effects of compoundation, and it is one of the more proven method, if not the most.

why then is it harder to succeed in singapore through the same principles of dividend investing and reinvesting?

we can see in the usa, there are numerous companies such as mcd, colgate, general mills, coca cola and more, which are perpetual dividend raisers. a lot of these companies have raised their dividend yoy for the past 25 years, some even more. u can google them out. And more importantly, a lot of these companies pay a quarterly dividend. and last but not least, no rights issue exists for them.

so we see a lot of investors in usa, are basically 'passive' dividend investors and sticking to the strategy of investing and reinvesting in these companies will lead to serious wealth being created. 15% pa is quite normal, if the plan is stuck to and no early cashing out occurs. this basically means doubling in less than 5 years. and if one starts at 20 and ends at 60, it will mean a multiplication factor of some 267 times. He won't want to end this cash generation machine in the first place!

now, there are NO companies in singapore which satisfy the above 3 important qualities, at least at the current moment. even pure blue chips, we hardly see them increase dividend yoy and they don't pay quarterly dividend. If you use 10 year as time frame, none fit the criteria. Correct me if I am wrong. JMH comes close, but it pays twice a year. If you use 5 years, then some reits come into the picture.

thus, unless one is prepared to invest in companies outside of singapore, the above points very very important factors to consider, if one is in the serious business of building solid wealth.

thus because it is not clear cut at all in singapore, hence the singapore dividend machine is not the same per se. It is basically not as simple here and more likely than not, a lot will end up buying and selling more frequently than what is necessary, buying and selling the wrong stock, or holding on to the stock which represents lost opportunity costs. 

portfolio update 30/7/2016

Dividend by month

1) uob
2) fcot sgx capitacom lian beng namlee starhillg
3) spost lum chang taisin
4)
5) fcot steng sgx  uob sph starhillg
6) tcil ocbc
7)
8) fcot metro plife  ocbc spost capitacom starhillg sci
9) steng uob
10) tcil sgx lian beng ngi
11) fcot taisin sgx spost  lum chang starhillg
12) sph

Remarks:

1) sold of singtel and plife during recent run up as yield is compressed to less than that acceptable to add to fcot and starhill
2) 3/8 singpost dividend will be in. recent swiber case causing banking slump could be timely to add ocbc, as it is still CD and dividend will be paid later this month. bonus effect to singpost dividend.



Some rotation of positions but overall, still,

nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters as well as the counters which are about to pay dividends soon.


DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?
3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

IF THE ANSWERS ARE YES OR UNSURE, STAY CLEAR OF THIS COMPANY

IF THE ANSWERS ARE NO, KEEP REINVESTING & STAY HEALTHY & STAY HAPPY. 

portfolio update 30/6/2016

Dividend by month

1) uob singtel
2) plife sgx capitacom lian beng namlee starhillg
3) spost lum chang taisin
4)
5) steng sgx  uob sph plife starhillg
6) tcil ocbc
7)
8) metro plife uob singtel spost capitacom starhillg
9) steng sci ocbc
10) tcil sgx lian beng ngi
11) taisin sgx plife spost  lum chang starhillg
12) sph

Comments:

Decided to take profit from the runs up from frasers ct and suntec and place them in starhill where the run up is less.
Locked in capital gains as well as gained about 1% more dividend.



Some rotation of positions but overall, still,

nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters as well as the counters which are about to pay dividends soon.


DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?
3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

IF THE ANSWERS ARE YES OR UNSURE, STAY CLEAR OF THIS COMPANY

IF THE ANSWERS ARE NO, KEEP REINVESTING & STAY HEALTHY & STAY HAPPY. 

why i sold engro and singre? and portfolio question.

a reader asked me a couple of questions, i just finished replying and then realised that i wrote so much. thus decided to open a page to share with other readers.

Hi Paul, I have just finished reading your blog from very first post to this one. Thank you for sharing your investment strategy and portfolio. May I ask you two questions?
1) Why did you sell Engro and Singre?
2) It seems that you are slowly transforming your portfolio from undervalued penny stocks to blue chips, would you mind to share the reason for doing so? Is is to lower the risk? 
Thank you in advance
hi. of course.

1) Engro - yield is a low 2-3%, and this year will see its dividend being cut. nav stopped increasing. 
- placing money there is not necessary as safe as before
- risk benefit makes lesser sense 
- there are better counters around
- last but not least, at the time i decided to divest engro, st eng happened to be on low side, in fact, very low..270plus. thus it was a golden opportunity to transform engro to st eng.
--> give up a undervalued 2-3% yield monopaying company for a blue chip at 52w 5.5%pa low bipaying company. 
--> it is one of the best decisions I made, shortly after I made the switch, st eng went up fiercely while engro stayed suppressed at sub90c level. 
singre
i bought singre below 30c level. i know that this counter is erratic in terms of eps and dividends too. recently it even paid special dividend. i noticed that the eps is not doing well. true enough, the may dividend is less and I would expect the same for the september dividend. thus sold off at ard 32c level.
2) i think your observation might be right to some extent, but whether its undervalued penny stocks or blue chips, it must have one common denominator ie...ability to pay dividends. the ones which we discussed earlier had weakened earnings and even cut dividends. but some penny stocks are still worth adding...eg i added a few hundred lots taisin at 32c, to me, its undervalued at 32c, and its eps and dividends can very likely support this. True enough, BOBBY LIM came in and pushed it up to 34c. I will not buy any more at 34c as I think its sort of fairvalued. I believe a lot of investors feel so. This recent BREXIT we don't see taisin being sold down. It still stable at 33.5-34c level. I have taken this opportunity to add more frasers ct too. 

portfolio update 27/5/2016

Dividend by month

1) uob singtel
2) plife sgx suntec capitacom lian beng namlee fct
3) spost lum chang taisin
4)
5) steng sgx suntec uob sph fct plife
6) tcil ocbc
7)
8) metro suntec plife uob singtel spost capitacom fct
9) steng sci ocbc
10) tcil sgx lian beng ngi
11) taisin sgx plife spost suntec lum chang fct
12) sph

Comments:

14/6 ocbc payable - i have opted for script (at 8.11).
15/6 tcil payable - usually will be paid about 1week later.

Stamford land divested into taisin and capitacom

Sgx added.

singpost decided to pay in August instead of July.



Some rotation of positions but overall, still,

nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters as well as the counters which are about to pay dividends soon.


DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?
3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

IF THE ANSWERS ARE YES OR UNSURE, STAY CLEAR OF THIS COMPANY

IF THE ANSWERS ARE NO, KEEP REINVESTING & STAY HEALTHY & STAY HAPPY. 

why i divested stamford land

I have been holding onto stamford land for some time, rather pleased with the 3c dividend it has paid every August, like clockwork.

certainly, its eps has been able to support this 3c payout for these years.

however, the dividend cut to 0.5c was not something i was able to accept, the company could at least afford to be pay 2c imo.

maybe the management is changing, i am not sure.

I am even not sure of future dividends.

such is the uncertainty leaves me with only one option, to divest.

I divested 1/2 into taisin at 32c and 1/2 into capitacom at 139c.

At least, capitacom will give dividend in august in place of stamford land.