Saturday, 26 March 2016

Use Skillsfuture Credit to up your financial literacy

In view of the Skillsfuture Credit kicking into effect from this year, SG citizens age 25 and above are given $500 to kickstart learning. Since it's free lunch given by 'ah gong' (sg government), why not? BUT before you excitedly start signing for courses around, you might want to first find out what courses are eligible for the $500 subsidy. Check out the list here

What courses can help you improve on financial literacy or understand investing better?
Check them out here:

SIM modular courses:

You could also check out SGX Academy for more investment courses (may need to verify against the course list on Skillsfuture for eligibility). Some of them are FOC.

Image result for book with dollar

Happy learning!

Friday, 25 March 2016

Balance Sheet & Cashflow - summarized definition

I have decided to free this content up from being a Page into a Post so I could put my page space to better use, akan datang. Nevertheless this is very important stuff to make sense of the annual reports that the companies you invest in would send yearly.

Making sense of a company's Balance sheet - it should all balance up

In a Balance sheet there's two parts of equivalent values:

1) Total Assets $ =
2) Total liabilities and Equity

This is because Equity = Total assets - Total liabilities, so both values would be the same.

Equity is also known as net asset or net worth of a company. It comprises of two parts - Retained earnings and Treasury stocks


An important ratio that you can derive from here is this:

Current asset / Liabilities

If it's more than 1.5, the company is generally doing okay (not neck-high in debt).

Statement of Cash flow - show me the money

Cash flow is important because it tells you how much cash a company generates. If a company makes profit but did not generate any spare cash in the process, it might spell financial trouble ahead.

Cash flow statement has three parts:

1) Operating activiities

2) Investing activities

3) Financing activities

Free Cash Flow = Cash from Operations - Capital Expenditures


A book I borrowed. Can't recall the book's title.


Just bear in mind that sometimes things are not as simple as they look because there is such a thing call 'financial engineering' where some figures could be created to make things look good and yet legit. For example, manipulation of ROE through aggressive stock buybacks despite in high debt, no re-evaluation of company's fixed asset etc.

Also look out for any third-party related transactions and look out for exceptionally big figure of good wills. These would require more in-depth reading for a good understanding.

Tuesday, 22 March 2016

Which character best describes you in investing?

Which character best describes you in investing? (Just for laugh)
  1. The 'asset-rich' but not very smart crocoduck
  2. The resourceful white sheep? "Fluffy and trying to be carnivorous."
  3. Or... the matrix frog "Watch my agility - huat huat huat huat!"

 In the investing world, everybody is trying to out-smart and win each other. When great fools sell to greater fools, great fools buy from greater fools...

See the part 1 video here 4Ds market rules in a crash

Sunday, 13 March 2016

Retail - expectations vs reality

To deliver excellent Customer Service in FMCG retail is hard. It is even harder than doing so in burger chains. You don't believe it? Go and try working in one instead of being a customer who just observe.

At the burger chains, the Counter Staff multi-tasking duty revolves around two things - cashiering and passing the correct prepared food to customers. If you go to the big shopping malls these days, you might have noticed that most of the fast-food chains are evolving their services. Mcdonald's and KFC starts to have separate cashiering and serving counters plus automated self-order kiosks, instead of the old school way of multi-tasking. I haven't been to Burger King frequent enough but I do know that the one at Kallang Wave Mall has the same layout with a digital Q number screen long before I see MCD's. It is also a form of optimising their 'production line' to speed up sales (many POS versus 1 service counter).

On the other hand, staff working at small retailers practically have to do EVERYTHING - what I call ultimate multi-tasking (in hokkien they say 'bao ga liao'). From cashiering, to merchandising, ordering, admin stuff, housekeeping, answering phone calls, and last but not least, serving the shoppers (I don't call all as customers as some are just browsing or have no buying intention). Again, this is a disadvantage compared to burger chains since ALL who are being served at the fast-food counters are customers not shoppers. Pretty much nothing more are to be expected besides getting the food which was ordered in a timely manner - then find the straw and stirer yourselves please. You don't see burger flippers doubling up as cashiers or cleaners, do you?

By the way, golden arches has one of the world best business system.

Then let us take a look at the big non-FMCG retailers. For them, I believe the 80/20 (Pareto's) rule applies where 20% of customers who walked in contribute to 80% of their sales. This is because they are selling specialty or luxury products which not everybody can afford or need. Footfall generally is lower and market is more niche. When they charge premium price, of course they would need to dish out premium service. (Why do you think they hire so many sales persons standing around in suits?)

Now back to the big FMCG retailers. Imagine instead of looking into improvising merchandising, promotions or automating / streamlining processes to make work easier and more efficient for its workers, the almighty management puts its main focus on cutting manpower cost and telling store staff to improve on their customer service (by their own motivation). Then they wonder why sales went down although cost-savings went up. Management expectations versus reality check?

As each of the retailer are retailing different products, we can't expect them to all function like the burger chains. Each may have its unique and advantageous business model.

Among the various retail companies that are listed out there, which would you invest in?
Why would you say so?

(I shall not bother with small non-FMCG retailers as I have not spotted any with substantial profitability.)

Thursday, 10 March 2016

Time or Money? II

Some time back last year, I briefly penned a post Time or Money? at a point when I was gloomiest about work.

Today incidentally, I caught something interesting in the book 4-hour Workweek:

"People don’t want to be millionaires—they want to experience what they believe only millions can buy. Ski chalets, butlers, and exotic travel often enter the picture. Perhaps rubbing cocoa butter on your belly in a hammock while you listen to waves rhythmically lapping against the deck of your thatchedroof bungalow? Sounds nice. 

$1,000,000 in the bank isn’t the fantasy. The fantasy is the lifestyle of complete freedom it supposedly allows. The question is then, How can one achieve the millionaire lifestyle of complete freedom without first having $1,000,000?"

This set me thinking.

Wednesday, 9 March 2016

Revisit: Knowing when to sell your shares

[First published on 3/9/14]

Below is an article by Motley's Fool. It was a burning question in me when I first learnt about investment.

"Buy because of the price but don't sell for the price. Sell because it's value has depreciated or there's a better value investment elsewhere to park your money."

In essence, it's time to part with your shares if either of these happen...

  1. P/E ratio goes sky high
  2. P/B ratio goes sky high
  3. Eroding fundamentals of the company
  1. Poor outlook of business sector eg. competitive edge has worn off, declining industry
  2. It is at a downside of a business cycle (for cyclical businesses)
  3. In macroeconomics point of view, when market sentiment is turning bad -share prices can't break through long term resistance and start to break through support levels.

Why sell? So that we can free up our capital to do fruit picking in times like this.

The game of patience in stock market is not how long you hold onto your stocks, it is waiting for the right time to sow and harvest. So that realized gains are more than realized losses.

For my dory memory... now I have this from Uncle8888.

Replaced my running man wallpaper. Courtesy of Createwealth8888

Tuesday, 8 March 2016

How much do I need to retire

I used the DBS retirement calculator here.

And discovered I need at least $1 million to retire if I want to retire 20 years from now. Assuming I spend only 60% of my current income on retirement.  (I suspect the system didn't take into account any prospective pay rise or maybe it just assume a flat inflation rate of an unknown x% for all the current figures. My shortfall predicted at $xxx,xxx with a beautiful chart representation.)

So what now?

Monday, 7 March 2016

Share price woes of Keppel Corp

"Keppel Corporation announced earnings results for the year 2015. For the year, the company reported net profit fell 19.1% to SGD 1.52 billion, with its fourth-quarter results hit by a SGD 230 million provision for the default risks tied to a USD 4.9 billion rig construction contract with the financially stricken Sete Brasil. -SGX 2/3/16"

Biggest dip for share price in the year: $9.54 to $4.64 (a whooping -51% that sent the price below its NAV)

Current share price: $6.19 (-35% from Yr 2015 high)

Saturday, 5 March 2016

Book review: Rich Dad's guide to investing

I borrowed this book from the library last week by chance. It is the third book of the famous Rich Dad, Poor Dad by Robert Kiyosaki. If you expected it to be your usual FA TA book then you would be sorely disappointed. I find it more of a pep talk book - to help in adjusting the reader's mindset to think rich.

The first couple of chapters in the book reminded me of SMOL's favourite line "come have a kopi and char shao bao...". Then it goes on saying one should get to know oneself and what type investor one wants to be.

Friday, 4 March 2016

4D market rules in a crash (scroll to the end for entertainment)

My mom likes to call playing the stock market gambling. I rebutted that it is NOT gambling, because you know the cards dealt to you and there is the element of control which is absent most of the time in gambling. This 4D is not your toto 4D. These 4Ds are well within your control.
  1. Don't catch a falling knife.

  2. Don't capitulate (too late) when there's a sell-down frenzy.

  3. Don't try to average down, especially with margin.
    Cos this is like number 1+2 combo which equates money suicide. But is short-selling with CFD a good idea?

  4. Do diversify.
    Do not put all excess cash into 1 stocks, do not make up your portfolio with only stocks, do not buy stocks from only one market or sector. If you don't know which to pick, ETF is a good choice.

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