Five Cents Ten Cents

Panzer’s Equity Portfolio as at 20 Nov 2009

Thu, 19 Nov 2009 23:42:13 -0500

Panzer is no Warren Buffet, as some Channelnewsasia Market Talk forummer commented, there are a lot of Warren Bluffets around, people who make predictions about equity prices going up or down depending on whether they are taking a long or short view of the market.

What Panzer realises from investing his own monies since 2003 till date is that the returns on cash have been quite poor especially in the last 2 years or so.

Interest rates are so low that local banks are giving 0.1% or so for savings deposits. What this means is that your money when left in the bank is actually depreciating in purchasing power when inflation is minimally 1-2% annually. It was as high as 5-6% last year prior to the global financial crisis that wiped out much of equity values as well as destroyed economic activity throughout the entire world.

What Now Panzer?

So Panzer realises he must stay invested in the stock market but focus more on dividend yields rather than capital appreciation or quick punts for true growth in his investible portfolio.

Let’s examine Panzer’s holdings and why he is holding onto the stock as Panzer will be tempted to take profits but must keep focused on the long-term i.e. 20 years when the dividends and (potential) capital gains would be available for use for his daughter’s university fund.

Panzer’s Holdings (in no order of merit)

Long-term holdings – mainly for dividends and longer term capital appreciation

1. Singpost

2. Singapore Press Holdings

3. DBS

4. FSL

5. Starhub

6. F&N

7. Singtel

Short-term Trading

8. Keppel Corporation

If you realise from Panzer’s holdings, most of the companies are GLCs and blue-chips. So far, Panzer’s portfolio unrealised loss is around $4.6k level which is a vast improvement of -$70k at one stage.

So far, the main clunker has been FSL bought when prices and valuations were high but we know now how the shipping industry has also been hit by the financial crisis.

A number of his buys are recent (i.e. within the last 3-6 months or so).

Panzer feels that this portfolio should not be too actively traded and can be earmarked for Panzer’s daughter college fund to mature sometime in 18-20 years.

In the meantime, Panzer knows that still the bulk of his savings will have to be derived from earned income not spent and he will continue to practice his professional arts in internal auditing.

How do you review your own portfolio and how do you decide to sell/hold/buy more?

Share with Panzer in the comments section.

Be well and prosper.

Reference: http://c.notify.me/SgylBQ

Finatiq Cash Investment Account Interest Rates Decline to 0.125% p.a.

Fri, 13 Nov 2009 04:42:19 -0500

Previous rates:

Reference: http://ping.fm/dkx00

Panzer’s 2009 Interim Results Announcement

Wed, 11 Nov 2009 01:28:12 -0500

It’s that time of year again when Christmas decorations are being put up in malls all across Singapore. People look forward to a “white Christmas” although Singapore has no snow but lots of rain towards the end of the year.

Besides spending on Christmas gifts, feasts and other treats, a custom that Panzer likes to do is to take stock of his financial performance from being the fund manager of Panzer’s Net-worth cum daughter’s colleague tuition fund.

Analysis of the year gone past (so far)

The following chart shows how Panzer has performed in the months of 2009.

Generally, Panzer has been making steady realised gains from dividends (36%), capital gains/losses (59%) and blogging income (5%). July saw a big realised loss because Panzer cleared out many of his old holdings bought at high prices when he was young and ignorant. Now that Panzer is older and still ignorant, he has done a round of housekeeping to only buy quality stocks, in general blue chips with very solid business fundamentals.

August 2009 saw Panzer reap capital gains from sale of SPC to PetroChina resulting in a net gain even after realising his losses from sales of (crap) stocks he had mistakenly bought in his ignorance and bout of irrational exuberance.

Panzer’s Portfolio

The current older and still (slightly less) ignorant Panzer now manages his portfolio on at a level of 50:50 cash-equities ratio with investment limits on equities set to 75% of his investible net worth. On a steady state, Panzer should have 50% of his net worth in cash/cash equivalents allowing himself 25-30% core holdings in strong dividend yielding stocks while the remainder 20-50% is available for punts.

He has decided to temporarily put on hold his investment property plan in the light of possible asset bubble in the private residential segment and also because it’s easier to sleep at night holding onto to more cash than an illiquid asset such as investment property which typically yields only 3-5% after expenses. Panzer also wishes not to deal with the stuff that comes with being a landlord for the time being.

The recent announcements of more land supply for the mass market private residential segment also means there is less upside and more choices going forward. Panzer may still consider investment property if yields can sustain higher than 5% which would be challenging under present conditions.

Panzer’s holdings currently comprise: SPH, Singpost, Starhub, FSL, F&N and Singtel (CPF). He intends t0 hold them for LONG TERM but then LONG TERM can mean < 1 year if he feels like it because Panzer follows Temasek and GIC’s approach to investment.

Going forward

Panzer feels that this past year of investing (with lots of recent punting) has revealed to him a few things.

One – there are no rules to investing in the market.

Two – your guess is as good as mine.

Three – make sure you have sufficient cash for opportunity buys or to cushion your own mistakes.

Panzer wishes one and all a Merry Christmas.

Be well and prosper.

Reference: http://c.notify.me/Ds00Aw

HLF Savings Account Promotion (up to 0.5% p.a.)

Fri, 06 Nov 2009 02:03:12 -0500

Reference: http://ping.fm/zIUGq

Get up to 0.8% pa interest on UOB i-Account

Thu, 05 Nov 2009 21:33:50 -0500

Reference: http://ping.fm/yEbkR

Channelnewsasia Market Talk Forum 1 Nov 2009

Sun, 01 Nov 2009 00:10:58 -0400

When you are investing or trading in equities, you are playing against both institutional investors as well as retail investors and they come in all shapes and sizes. The interesting thing about monitoring stock forums such as Channelnewsasia Market Talk forum is to see for yourself the tangible manifestation of GREED and FEAR in the various threads started and contributed by the investors, punters and other people in the forum.

I’ve decided to do a wordle word cloud to show a snapshow of what the forummers are posting today 1 Nov 2009.

Not too surprising that the key words for today are that there will be a selldown on Monday on STI because Dow Jones Industrial Average lost about 2.5% or 200+ points on Friday.

Be well and prosper.

Reference: http://c.notify.me/_u6eAg

Hong Leong Finance (HLF) City Square Mall Fixed Deposits Promotion

Thu, 29 Oct 2009 22:01:03 -0400

Source

Reference: http://ping.fm/k3iPn

Flow: More Thoughts on Optimal Experience

Thu, 29 Oct 2009 04:05:47 -0400

Following my post about “Flow: The Psychology of Optimal Experience“, I begin to see how important our own perceptions play in determining if we are happy or not under all circumstances.

One of the benefits of trading in stocks and shares is that it forces you to confront your naked fear and greed whenever you are about to buy or sell shares. Nothing strips away how good/bad you are at stock trading (or investing) then looking at your profits and losses incurred on the trade.

You feel happy when you’ve made the right call and you feel terrible if you’ve lost money and even worse if the loss is realised.

It is from this experiences that I realise financial freedom by itself will not make me happy. It is how I make use of the financial freedom status to create for myself an optimal flow experience in all aspects of my life. Even the euphoria of trading wins fade after a while and I look out for the next “high” from jeeping/panging an equity position.

Happiness and sadness that is dependent on market conditions sets us up for a life of emotional roller-coaster. This cannot be the receipe for a life filled with optimal experiences.

So how can you structure your life into a flow experience even as you pursue financial freedom?

How pursuing financial freedom helps you achieve flow

A challenging activity that requires skills

Moving from a net-worth position that is negative to a positive one is challenging. It requires you to have skills in budgeting, controlling your desires to spend and to live within your means.

Merging of action and awareness

As you track your net worth towards a bigger and bigger positive number, you tend to feel that your day to day thriftiness does translate into a bigger goal i.e. bringing you closer to financial freedom where your income from savings and investments is able to fund your day-to-day living expenses.

Clear goals and feedback

Nothing clarifies more than your net worth position at the end of the month and whether you’ve spent more than you’ve saved or you’ve manage to live way within your means.

Concentration on the task at hand

Just as you focus on eating that bit less, refraining from softdrinks and living a healthy lifestyle to keep healthcare costs low, energy levels up for work and play, you tend to align your daily goals to the overall plan of being financially free.

Paradox of control

The more your net worth comes into your direct control, the more powerful you feel in your ability to control your financial destiny in life.

Loss of self consciousness

Whether you keep up with the Alis, Lims or Muthus is not so important when you focus on financial freedom. It’s not about what watch you wear but how big is your net worth.

The transformation of time

Time flies when your daily activities are aligned to your life goals. The main thing I realise about pursuing financial freedom is that the process is enjoyable by itself. Seeing my month end balances with savings makes me look forward to the passing of each day and month as I move closer to my goal of financial freedom. The journey is just as fun as the destination.

Be well and prosper.

Reference: http://ping.fm/COi4F

Flow: The Psychology of Optimal Experience

Thu, 22 Oct 2009 03:21:21 -0400

Flickr image “Flow” by mr fairuz

One of the areas I continue to develop towards financial freedom is to open my mind to positive influences and ideas from quality sources. Many of the new books I read nowadays are the result of recommendations from other authors and blogs that I follow.

The current book that I’ve just finished reading is “Flow: The Psychology of Optimal Experience” by Mihaly Csikszentmihalyi. The book basically shares with us the steps towards enhancing the quality of life.

Reading is arguably the most important avenue to learn new knowledge. Many great thinkers, philosophers and practitioners in the fields ranging from financial freedom to human pyschology have already documented their great ideas, thoughts and wisdom in the written word. Why not tap on their knowledge, expertise and experience to gain some insights about how one should go about living one’s life?

It is with this mindset that I approached “Flow”.

What “Flow” is about

The book’s blurb shares what “Flow” is about. It really documents how the author

has been studying states of “optimal experience” – those times when people report feelings of concentration and deep enjoyment. These investigations have revealed that what makes experience geniunely satisfying is a state of consciousness called flow – a state of concentration so focused that it amounts to absolute absorption in an activity.

The main idea that the book leaves with us is that:

Flow: The Psychology of Optimal Experience reveals how this pleasurable state can, in fact, be controlled, and not just left to chance, by setting ourselves challenges – tasks that are neither too difficult nor too simple for our abilities. With such goals, we learn to order the information that enters consciousness and thereby improve the quality of our lives.

What I got from Flow

The main lesson that I got from “Flow” was that the elements of enjoyment comprises the following:

A challenging activity that requires skills
Merging of action and awareness
Clear goals and feedback
Concentration on the task at hand
Paradox of control
Loss of self consciousness
The transformation of time

What this means is that for many people, work or career is actually when we are enjoying ourselves when we get immersed into what we do. Being financially free will free us to engage in leisure activities full time, but such activities won’t make us happy unless they meet the elements above.

My own experience in moving from a crappy job environment to a more pleasant and fulfilling one has reinforced the reality of what flow means. Somedays at work, the hours just while themselves away as I’m engaged in my audit assignments and working with my team.

Literally, the movement of time from Monday to Friday happens so fast that I sometimes wonder where it all went. I count myself fortunate that my current work place gives me a lot of job satisfaction and allows me to function in a flow on majority of the days I am in office.

Meaning in “Flow”

Hence, I’ve increasingly come to realise that achieving financial freedom while being an important goal, is not important just for itself. It is equally important to structure your life to do something meaningful and is able to involve the elements of enjoyment.

A life of pleasure seeking everyday without much meaning and purpose after being financially free can potentially result in empty and hollow lives. That’s why sometimes we read in papers of rich and famous celebrities who have it all in material wants but still end up with wasted lives through alcoholism, drugs and suicide.

Even as I continue on my journey towards financial freedom, I become more aware that paradoxically, it’s not just about hitting my target of $xxx,xxx in investible net-worth so that I can become financially free that will ultimately make me happy.

Happiness has to come from within instead and whilst working towards the my target of financial freedom, I need to seek challenges that continue to allow me to practice my skills, abilities and to create meaning in my life.

How do you think you can achieve flow?

Would it be where you are now or only if you achieve financial freedom?

Share with Panzer.

Be well and prosper.

Reference: http://ping.fm/qzFEt

Want to do, don’t be scared! (Five Cents Ten Cents 1 year ago)

Tue, 20 Oct 2009 02:32:43 -0400

The hokkien expression goes, “要做就不要怕，要怕就不要做！”. (ai zo mai kia, ai kia mai zo) Loosely translated, it means, “if you want to do something, don’t be scared, but if you are scared, then don’t do it!”

Read more here in Panzer’s old blog Five Cents Ten Cents at Blogspot.

Reference: http://ping.fm/xHDuw

RHB Trio Account Rates

Tue, 13 Oct 2009 05:54:23 -0400

Previous rates:

Reference: http://ping.fm/PHFOW

Standard Chartered Bank (SCB) eSaver Promotion

Thu, 08 Oct 2009 21:46:32 -0400

Source

Reference: http://ping.fm/29y4Z

HLF Silver 40 Plus Fixed Deposit Rates

Mon, 05 Oct 2009 06:06:38 -0400

Previous Rates:

Source.

Reference: http://ping.fm/2vdk9

Page2RSS Monitored Page: SGS - Result of auction of taxable Book-Entry Singapore Government Bonds

Wed, 30 Sep 2009 02:10:11 -0400

The page http://ping.fm/XcZa5 is monitored for updates. There are no changes detected since 09/29/09 22:43:24.
Reference: http://ping.fm/pvr0B

Hong Leong Finance (HLF) Tampines Grande Branch Promotion on 3 Oct 2009

Sat, 26 Sep 2009 08:55:26 -0400

Reference: http://ping.fm/P2sJN

Financial Freedom: Building Capability vs Building Plans

Wed, 16 Sep 2009 19:26:20 -0400

How do you feel each month when it’s pay-day?

Happy? Sad? Neutral?

If one is living paycheck to paycheck, then pay-day is a day for both relief that cash is coming to help pay for living expenses and a worry because it all seems to flow out so quickly before the next month’s payday.

If one is living within the principles of financial freedom, one would be happy to see the salary helping to increase one’s net worth.

As I walk along this journey towards financial freedom, my feelings towards pay-day also changes based on my financial and life situation at that point in time.

When I was younger and single, payday meant seeing my bank balances increase a lot because I lived with my parents and didn’t spend much.

Now that I have a family to support, pay-day is critical in being able to provide for my family and myself with the standard of living that I am happy with. While I look forward to pay-day every month, I’m not so worried about it not coming soon enough ever since I’ve started the habit of recording every expense I incur to know how much money I spend each month and each day.

I realise that once you have understood and started to practice living within your means, pay-day is not so stressful as you’ll have some buffer in terms of savings so that you’re not living pay-check to pay-check.

Building capability in financial freedom

Being able to break out of living pay-check to pay-check requires building the capability to live alongside the principles for financial freedom. It is not so much the lack of a plan that hinders us from moving towards financial freedom.

It is more the lack of developing our capabilities, i.e. our skills, abilities and habits to live each day within the principles of living within your means, save and invest and growing and protecting your means.

How many financial planners help us discover how to build our own capabilities towards financial freedom? They will do a financial “health check” for you to tell you where you are in terms of assets and liabilities. They can do cash flow projections based on when you want to get married, have children, see them through college and retire. But what I’ve not encountered them being able to do is to teach you to build capability towards enduring principles of being financially free.

The reality is that we have to build our own capability towards being able to live within the principles of financial freedom. This capability building requires us to do two things but to do them well:

1) Read, ask questions and find out more about personal finance, investments and financial literacy

2) Practice financial freedom habits bit by bit and improve continuously

Repeat step 1).

Developing your capability

Capability development is simple but it’s not easy. It requires effort, interest and perseverance to continue to learn and grow, practice and make (hopefully small) mistakes and to learn and grow further.

Most of my own capability development has come from visiting our excellent public libraries. Reading blogs, websites and forums and discussion with like-minded friends on what it takes to be financially free. I also observe the lives of my immediate family, siblings and relatives to see how each one has charted their own life nearer or further away from financial freedom.

From my parents, I learnt the capability to be patient, to save and invest and build up my career.

From some relatives, I learnt not to spend beyond our means and to avoid keeping up with the neighbours.

From my own sibling, I learnt how striking out your own business comes with its risks but can also be financially rewarding.

From my good fabulous four friends whom I know from my first job, I learnt to ride the ups and downs of the market and to value family and friends over and above money.

How do you develop your own capability towards financial freedom?

Share with Panzer in the comments section.

Reference: http://ping.fm/aER2R

Equity Investing: A Clean Slate

Mon, 17 Aug 2009 00:07:44 -0400

Flickr image “Panel: Weighing The Impact Of Washington On Private Equity” by djevents

I’ve recently moved from an equity heavy and cash light portfolio to a relatively cash heavy and equity light portfolio due to a possible move into property investment. However, the recent run-up in mass market private property prices makes me feel that some of the units I’m considering are over-valued relative to possible downside on rents.

Thus, I’m now taking my time to scout for possible property investments and in the meantime parking most of my funds in Maybank iSavvy that is paying 0.75% per annum for balances exceeding $50k. In the meantime, I’m doing some quick speculative punts on SGX given the volatility in some counters.

Cleaning up

To arrive at this position, I had to incur some realised losses on investments made one to two years ago. This allowed me to free up capital and at the same time, I was fortunate that selling my SPC shares to PetrolChina allowed me to essentially break even, i.e. take out my capital with minimal realised losses. My year-to-date realised investment returns are 4.61% which beats my benchmark of 2 x risk-free returns (either treasury bills or fixed deposit rates, whichever is the higher).

With fixed deposits interest rates at 1% or even lower, 2x is about 2%. In fact, my returns of 4.61% beats CPF’s 4% for MSRA (medisave, special and retirement accounts) and 2.5% on CPF ordinary balances. So far, I’ve managed to outperform CPF in growing my own monies.

Carnt from investing my own money since 2003 is that holding power is important. The ability to hold means that you are less pressured to sell in down markets and can ride out a certain degree of volatility in the market.

I also learnt about market cycles and the ebb and flow of markets intra-day. I used to not be able to get some sense of the market direction. After dabbling and losing some tuition fees as well as making some windfall gains, I realised that you can spot certain trends but to make money on them requires patience (to generally buy during when sentiment is bad) and courage to sell into rallies.

I’ve also learnt that there are many ways to achieve investment returns in the long-run. And most of the strategies involves lots of efforts and discipline to try and learn. Passive investing is very difficult to achieve so far as most asset classes will go through cycles which appear to be happening faster with more regularity.

The Strategy is to beat your benchmark

In short, there is no good/bad strategy in investing. You either make or lose money so the ultimate key performance indicator is still to benchmark yourself all the time against risk-free returns and see how your risk taking has brought you.

I start to realise that there’s no right/wrong approach. Too often we become bogged down in the dogma of buy and hold for long-term or to do quick-in-out punts. The answer is it is effective if it works and you survive the market. If you lose your pants and shirt and your roof than it is clear the strategy doesn’t.

However, one has to know one’s limits to be able to invest within one’s means.

How has your investment strategies changed over time?

Share with Panzer in the comments section.

Be well and prosper.

Reference: http://c.notify.me/KDTkBA

Standard Chartered Bank (SCB) Time Deposit Promotion

Wed, 12 Aug 2009 02:10:36 -0400

Reference: http://ping.fm/Itroq

Standard Chartered Bank (SCB) eSaver Promotion

Tue, 11 Aug 2009 21:56:38 -0400

Reference: http://ping.fm/2BjbJ

Happy National Day 2009!

Mon, 10 Aug 2009 23:26:19 -0400

Dear friends

Here’s wishing you a Happy National Day 2009!

Be well and prosper.

Reference: http://ping.fm/L07mw