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Something AK wants to lose and not gain.

Saturday, November 14, 2015

I was inspired after talking to a new found friend to try a new diet. So, I have not had any rice, bread, noodles or crackers since 8 November.

I have cut down on stuff with lots of added sugar which, of course, includes sugary drinks. I now drink water or green tea only.



If I want something sweet, I take some roasted almonds, dark chocolate (70% to 85%) or fruits. 


I have increased my intake of animal protein and greens. I have even started to take butter and certainly hope it is the right thing to do.


Cowhead belongs to QAF Ltd. Buttercup belongs to Auric Pacific.
Be careful. I found out today that Buttercup is actually not butter!

http://foodtherapybyaz.com/2014/05/27/i-cant-believe-its-not-butter/
Luckily, I chose to get Cowhead. I like supporting my companies.
AK is definitely a butter virgin.

Although being inspired is important, what really made me want to try this new diet was a visit to the clinic.


I was told that I was 7 kgs overweight. OMG! 

OK, to be honest, I knew that I was probably somewhat overweight because my pants felt tighter around the waist than before but 7kgs? 


That's a lot of excess weight!

Anyway, my new found friend told me that, to lose weight, exercise is 20% while diet is 80% of the formula. That was a revelation. I have always thought that exercise is more important than diet.

So, what have I been eating this week?

Here are some photos of the meals I had:








All prepared at home (except for the dark chocolate, of course).

It has been only a week. I don't know if I have lost weight but I guess I will know in another couple of weeks. 

Stiff upper lip and soldier on. What?


On a separate note, I am thinking of taking a short break from blogging and anything related to my blog which would include time spent on Facebook.

So, if you do not hear from me for a whole week or a few days in the near future, don't be alarmed. Just taking a break.

Trading around core positions for extra money.

Friday, November 13, 2015

Some might remember me talking about how I was trading stocks a bit more in the past. I also talked about how it is possible to trade around our core investments for income here and there.

If we are good at it, we could make some extra money from trading and yet retain a portion of our investments for regular income.



I don't trade stocks as much these days because it entails more work. It isn't just about buying stocks and holding them for dividends. We have to look at charts and decide when to sell and, of course, hope that prices might come down again so that we could buy.

However, sometimes, I just feel like doing a bit of trading and one example in the last two weeks was ST Engineering. I partially divested at $3.35 a share at the end of October with the intention to buy again if its stock price should decline meaningfully.





I decided to sell at $3.35 because that was where the mildly declining 200d MA was approximating back then. 

As ST Engineering's stock price declined over a few days, I resisted the urge to buy as connecting the lowest and second lowest price points gave me a trend line which suggests that there is probably going to be stronger support at $2.98 thereabouts which happens to be where the 123.6% Fibo retracement line is also located.




My BUY order at $2.98 today was filled.

Of course, it does not mean that the stock price will not go lower from here. 


Technical analysis simply shows us where the supports are. It doesn't say if the supports will hold. Now, if the support should break, we might see $2.88 tested next. I could buy more then.

Now, what if the stock price did not decline but went higher instead? 

Trading around a core position means that we still have a core investment retained for income generation.

So, some might remember that the mistake I made with ARA a few years ago was not retaining a core position whereas I sold only half of my investment in Old Chang Kee and retained half for income, for example.

So, when employing such a strategy, it is important to buy into stocks which we would be quite happy to hold because of the regular income we will receive. If the opportunity for a trade should present itself, sell a portion of our investment and retain a core position.

If prices go up, we are happy. If prices go down, we are happy too.


I don't think anyone would be unhappy with such a situation or am I mistaken?

Related posts:
1. Have my curry puff and eat it too!

2. ARA: Re-initiating a long position.
3. ST Engineering: Mystical art.

Accordia Golf Trust: A DPU of 2.32c and still a buy?

Thursday, November 12, 2015

I was wondering how badly Accordia Golf Trust's revenue could have been affected by the inclement weather in Japan in recent months. That was really what was holding me back from increasing my exposure to the business trust significantly even as its unit price hovered near its historic low.

In its latest results, it was revealed that performance in 2Q was disappointing. This translated into a DPU of only 0.74c for 2Q. For the 1H, total income available for distribution translated into a DPU of 2.59c.

Personally, I was hoping for a 1H DPU of 2.9c or even 2.95c which would have been possible if DPU for 2Q came in at 1.1c. Investing in golf courses for income, I guess the weather is something I must learn to take into consideration.

Accordia Golf Trust also decided to hold back 10% of the income available for distribution which means that DPU is only 2.32c for the period from 1 April to 30 September. 

So, what is the distribution yield?





I believe that it would be a mistake to annualise the DPU of 2.32c because it would be assuming that the weather would continue to be horrible in Japan for the next six months. 

However, if we like to think of it as a worst case scenario, yes, why not? 4.64c. This, of course, assumes that the management continues to distribute only 90% of distributable income.

At 62c a unit, we are looking at a distribution yield of 7.48%. This, I believe is pretty decent and higher than the 7% distribution yield dangled at Accordia Golf Trust's IPO which was, of course, at 97c a unit (which I thought was pretty much rubbish).

So, the question which I foresee many asking is whether Accordia Golf Trust is still a good investment for income? Well, I think it still is.

I do not believe that Accordia Golf Trust could turn in results which are much worse for the next six months but, of course, one can never be too sure when it comes to the weather. Anyway, chances are that things would improve unless Accordia Golf Trust has really bad luck. It is a matter of probability, really.



Accordia Golf Trust's current gearing level is 28.8% and its stock is trading at a 30% discount to NAV. 

About three quarters of the land the golf courses are sitting on are owned by the business trust. The rest of the land are leased from individuals, corporations or the government.

It is apparent to me that Accordia Golf Trust has ample debt headroom. As the business trust has a pipeline of assets to acquire from its sponsor, with the interest rate in Japan so low, I think it is a matter of time before the business trust makes its acquisitions. Fully debt funded, such acquisitions are likely to be DPU accretive.

If Mr. Market should feel depressed about Accordia Golf Trust's results, I certainly hope that he would show his displeasure in the usual manner which would allow me to accumulate at lower prices.

Related post:
Accordia Golf Trust: A distribution yield of 12.16%?

Is it too late to plan for retirement at age 57?

Tuesday, November 10, 2015

This is in reply to a reader's comment: here.

Hi hosea,

Welcome to my blog. :)

I am not allowed to give advice to individuals and I don't. ;)

However, if I were 57, I must recognise that I cannot be too adventurous with my money. I need to be more conservative.

Being more conservative, the returns might be lower but there is less chance of a massive or total loss of capital which a senior can ill afford. 




I want to consider investment grade bonds which includes Singapore Savings Bonds and also possibly maxing out my CPF-RA to benefit from a risk free 4% to 6% per annum return. This will provide a guaranteed monthly income in future.

Of course, I would have to make sure that my lifestyle is adjusted according to how much I expect to have coming in at retirement. 





It is not just how much we have coming in that is important. It is also how much is the outflow.

Now, at 57, if I think there is going to be a mismatch in what I need and what I would have coming in, then, postponing retirement to a later age beyond 62, which is only 5 years away from now, might have to be considered. This will also allow my CPF savings to continue growing.




What about investments? 

Well, I could consider blue chips which are less volatile and which have a good dividend paying history. 

I might want to consider ST Engineering, SATS and VICOM, for examples. 


I might have a few REITs which are more conservatively geared in my portfolio but I wouldn't want them to be a major part of my portfolio because I might not have the resources to take part in rights issues if they should happen.




If I have a HDB flat, there are many ways to monetise my flat. I could sell some of the remaining lease to HDB or I could rent out a spare room or two. I could choose to downsize too.

Finally, I remember that I have some savings in my SRS account which I can start drawing from at age 62 over a 10 years period. As long as I must pay income tax, I want to consider continuing to make contributions to my SRS account to pay less in tax.

I don't think it is too late to plan for retirement at age 57 but we have to be realistic with the options which are available. 

Related posts:

1. NDR 2014: Retirement adequacy.
2. Tea with Matthew Seah: Lifelong income with SRS.
3. CPF Life Payout estimator.

Make an altruistic investment in Singapore's future.

Monday, November 9, 2015

When I blogged about making a donation to NUS' university wide bursary program, a reader asked me, "What about NTU?"


As I make regular donations to NUS and I tell people about it when I have a chance, that was not the first time I was asked that question.


Well, honestly, I have more affinity towards NUS because I spent four years there. However, I do understand that there are needy students in NTU too.


So, in September, I decided to make a donation to NTU's bursary program to help needy Singaporean students there as well.


This is taken from NTU's website:


"The NTU, MOE, Donated and CDC/CCC University Bursary is open to Singaporean students."  Source: NTU.


Some readers might remember a rather disturbing episode that happened on my FB wall when I encouraged donations to NUS' university wide bursary program. 

By sharing the above statement from NTU, I have taken out the guesswork as to the beneficiaries of the program.

If we have the ability to be so, we should really consider being charitable and helping those in need.

Although there are exceptions, I do believe that most Singaporeans are charitable people.


There are many ways to make a donation to NTU. See options here.


There is also an option for making a donation online using a credit card: here.


AK made a $500.00 donation online.





Don't be shy to make a small donation as even $10 would go some distance to helping the needy.


In this instance, we would also be making an altruistic investment in Singapore's future.


Related post:
Making a donation to help needy students.

REITs: Leasehold properties revisited.

Sunday, November 8, 2015

This is a brief reply to a comment from a reader on a topic which was rather hotly debated before: here.


Hi kh,

Investing in REITs, we have to understand something very basic and that is REITs distribute income. REITs don't distribute earnings. So, they do not account for depreciation or amortisation.

When we look at REITs, we mustn't look at them like how we would look at stocks where we look at earnings per share (which takes into account depreciation and amortisation).

When we buy properties, if they are not freehold, then, there is a lifespan. 

So, if we buy a HDB flat, theoretically, at the end of its 99 years lease, we have to to return it to HDB and the value of the flat becomes zero. So, on average, theoretically, it depreciates by slightly more than 1% per year.

To make investing in a property which has a 99 years lease sensible, theoretically, the yield should be 1% higher than a freehold property. This is to make it equally attractive. 

Whether that happens or not depends on many things and one of the things is that real estate, unlike other assets, are tied to locations.

I am using the word "theoretically" quite a bit in this blog post.





So, we are not wrong to ask wouldn't REITs with only leasehold properties end up with nothing one day if they keep paying out their income fully? Again, theoretically, yes.

However, real estate is unlike other forms of assets like machines, inventories or even cash. In an economy that does well, older properties could be worth much more too. Their values could, in fact, appreciate. 

REITs with leasehold properties could do quite well too by actively managing their portfolios. 

For example, a REIT could sell off older properties when the real estate market is strong and the values of their properties go up. Buy newer properties when the real estate market is weak and properties are cheaper. 

So, to me, the management's competence and motivation are more important considerations.

I think you understand the theory that if a REIT with only leasehold properties pays out 100% of its distributable income, it is not putting aside anything for depreciation. This is the way REITs work. 

REITs are allowed to hold back as much as 10% of their distributable income and I believe that it is a matter of time before S-REITs with mostly or exclusively leasehold properties do this to help address the issue of shorter remaining leases (i.e. depreciation).

In closing, I would say that whether to invest in REITs or not, there are many considerations. It would be a mistake, I believe, to be fixated with the issue of land leases.

Related post:
REITs: Leasehold properties.


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