1Q 2025 Passive Income, OCBC and Alibaba.

Been a while since my last blog post.

Hope everyone is staying calm as stock markets crash around the world.

I produced a video last night which I hope helped to calm some nerves.

Here is the link,

AK71SG 

I do enjoy buying things when there is a sale.

I am dipping into my war chest and nibbling at OCBC and Alibaba 

OCBC because I think it is still the cheapest amongst the three banks.

Annualising the regular dividend gives me a 5.5% yield.

Based on a 50% payout ratio, this is attractive to me.

Of course, there is also a special dividend on top of this but that is a bonus to me.

As for Alibaba, I have made videos on this and why I thought there was a good chance of seeing HK$160 per share again.

So, I added to my position as its price plunged to around HK$110 per share.

I will probably add if it goes to HK$100 per share as that is where I see a major support.

I always say we can never be too sure and that is why we need insurance.

A war chest is insurance.

Insurance has a cost.

In the case of a war chest, opportunity cost.

Some people don't like paying for insurance and prefer not to have it.

Well, different strokes.

As for my 1Q 2025 passive income, it amounted to $37,008.44.

This is a slight reduction from a year ago primarily because of a reduction in exposure to Sabana REIT.

Contribution from CLCT also reduced this year as China struggles to recover.

The reduction amounted to $2,000 or so which isn't a tragedy, to be sure.

However, I am aware that I will probably see a larger reduction next year as I expect lower contribution from IREIT as their Berlin property is being repositioned.

The expected higher dividends from DBS, OCBC and UOB should provide some relief as they form almost 50% of my portfolio collectively.

In closing, I apologize for not replying to comments as I do not have the mental or emotional capacity with stuff that has been going on in my life these few weeks.

All of us should have a plan, our own plan.

If AK can do it, so can you.

Sold Alibaba For 51% Gain.

This morning, I sold half of my investment in Alibaba for a 51% capital gain.

It has been a long time since I last did any trading and this was a pretty nice one.

A 51% gain in less than 2 months was not something I was expecting.

However, this is what Mr. Market does.

We get surprises, pleasant ones and also nasty ones.

It is like opening a box of chocolates, someone said.

All we can do is to identify what we think are good entries and the rest is up to Mr. Market.

No one really knows what Mr. Market is going to do in the next few weeks, months or years.

I thought the downside was pretty limited.

I thought the numbers looked decent.

I got in when the chart said there was some long term support.

And I left the rest to Mr. Market.

If the price had gone lower, I had a plan as to where to buy more.

If the price should move higher, I had a plan on where to sell.

Alibaba wasn't a large investment for me and it has become a smaller investment now.

As it doesn't pay a meaningful dividend, the way to get more cash flow out of this is to trade.

This reminds me of the time when I was trading the Hang Seng Tech ETF and I think some of you might remember that.

So, what is my plan for Alibaba now?

My eventual target price for Alibaba is still HK$160 per share or so.

I talked about this before and in case you missed it, see:

Why sell now?

The rapid move higher in price does not seem sustainable to me and there is a chance we could see a pullback.

A pullback to HK$100 per share is possible.

A nice round number is an intuitive support level.

The SDR equivalent would be $3.40 per unit.

I could get in again then.

In case Mr. Market turns very pessimistic again, we could see price retracing all the way to the 200 days moving average once more.

This was at HK$80.00 but has moved higher and is now at HK$87.00 or so.

Naturally, with prices higher, this moving average is rising and we could see HK$90.00 soon.

That is just 10% lower than HK$100.

So, buying some at HK$100 looks OK to me and if price should sink another 10%, I might buy more as the uptrend would still be intact.

Anyway, just a short update.

If AK can do it, so can you!

DBS Share Price To Stay Higher For Longer.

I have said for many months that interest rates are likely to stay higher for longer.

Higher for longer interest rates are good for not only savers but also investors in DBS, OCBC and UOB.

In their latest results, DBS said that they expect net interest income to come in slightly higher this year due to this.

This is a change from expectation for net interest income to stay flat or weaken, year on year, as the Fed cuts interest rates.

The Fed is now expected to keep interest rate on hold and might only cut towards the end of 2025.

The number of rate cuts this year expected by Mr. Market has gone from 5 to only 2 now.

This bodes well for DBS, OCBC and UOB.

Coupled with strong growth in their wealth management business and income from fees, we could see earnings surprising to the upside.

DBS has already announced a higher final dividend of 60c per share which is about 10% higher than the 54c per share a year ago.

They are also going to introduce a 15c per share per quarter payout over the next two years.

This is a return of capital to shareholders as the bank has plenty of excess capital.

This brings the payout per quarter to 75c per share.

Mr. Market really likes this and has sent the share price of the bank higher and it is quite possible that it is going to stay higher for longer, just like interest rates.

So, people ask me when am I selling my investment in DBS?

I have said before that 2x book value was something I was looking at.

However, with the recent development, this has to change.

With an additional payout of 15c per quarter per share which increases the dividend by 25%, I would be giving up a lot in terms of passive income by selling now.

As I expect the share price to stay higher for longer, all else being equal, it could be a long wait before I get to buy again at a lower price.

While waiting, the NAV of DBS would continue to climb higher.

Some might say that a gradual return of capital over the next two years means that DBS' NAV would be impacted.

However, I would highlight that it is only 15c per share per quarter which would be more than covered by retained earnings which means the NAV of DBS would still be growing.

Just some back of the envelope calculation.

60c DPS from a 50% payout.

60c per share retained earnings.

15c per share capital reduction.

The bank is still growing by 45c per share per quarter.

This means that using NAV as a guide to sell, the target price to sell would only move higher over time.

Given the current situation, the share price has more room to move higher.

JP Morgan is now trading at 2.3x book value.

Could we see DBS trading at 2.3x book value too?

I expect UOB and OCBC to surprise to the upside to, barring unforeseen circumstances.

Investing in DBS, OCBC and UOB, increasing the size of said investments and staying invested has been most rewarding.

If AK can talk to himself, so can you.

Recently published:
Dividend Machines Are Crucial As CPF SA Closes.

Dividend Machines Are Crucial As CPF SA Closes.

Been a while since my last blog post.

I have been busy with many things at home and I have not been looking at the stock market.

The last time I did anything in the stock market was in December last year when I bought some shares of Alibaba and Wilmar.

Fortunately, my investment portfolio is on "auto mode."

More or less.

It doesn't require constant attention from me.

It simply generates passive income for me regularly and all I have to do is to check my bank account on a monthly basis to see how much I have been paid.

This is still something I have to do since I don't want to overspend and I have to allocate excess capital.

In recent weeks, when it comes to excess capital, all I did was to maintain my T-bill ladder and this was something I have produced blogs and videos on.

T-bills are still a good place to park excess cash for now as I wait for better investment opportunities in the stock market.

Interest rates are likely to stay higher for longer as the Fed is no longer as interested in cutting rates as they were in the second half of last year.

This is of course good news for my relatively large position in DBS, OCBC and UOB.

All three banks are likely to continue paying meaningful dividends and they could pay more in 2025.

This is because they have plenty of excess capital.

Having said this, it is important to mention that I am not always flushed with excess capital.

There will be months when I don't receive any dividend or very little.

First and fourth quarters are usually drier.

January usually sees a drought!

I received zero dividend in January 2025!

However, my investment portfolio still generated 42% higher passive income in January, year on year.

This is all thanks to T-bills and Singapore Savings Bonds.

Fixed income.

I have been stashing more money in T-bills and SSBs.

To be sure, the passive income in dollar terms is not mind blowing.

January 2025: $1,491.93

January 2024: $1,046.20

It is an increase of some $450.

Enough to cover some of my routine expenses.

Of course, if I had mainly relied on something like this over the years, I would not have what I have today financially.

This is just part of my financial pyramid and it contributes to my portfolio's stability.

Of course, regular readers also know that I like the CPF system very much but with the CPF SA going away once we turn 55 years of age, we have to be less reliant on the CPF to fund our retirement.

Investing in the stock market is still something that every regular person should seriously consider in order to have a more comfortable retirement.

How to get it right most of the time?

I have shared my methods and philosophy here in my blog over the years and more recently in my YouTube channel.

Some have asked me if I could conduct investment courses but, of course, readers who have been following me for many years would know my answer to that.

However, it is that time of the year again and for anyone who is interested to learn how to invest for income, "Dividend Machines" is open for registration again.

"Dividend Machines" is the only course I have promoted yearly since its founding so many years ago.

It is not only well structured, it is also well priced and does not cost thousands of dollars.

It is run by my friends at The Fifth Person and some of you interacted with Victor who was the guest speaker during "Evening With AK And Friends 2025."

Anyway, if you are interested in growing streams of passive income and you should be, have a look:

Dividend Machines 2025.

If AK can do it, so can you!

$300K invested in REITs? Why did I buy? How was I sure?

I spend a lot of time thinking.

Some say I am a thoughtful person.

However, some say I think too much.

We are all wired differently, right?

During "Evening With AK And Friends 2025," something that kept popping up could be explained as such.

I said having money to invest with was not enough.

We must have the right mindset and the right framework for what we want to achieve financially.

Our methods and our motivation must match.

So, I shared the pyramid which I use to help ensure portfolio stability, and at the very least make sure it does not sink to the bottom of the ocean and is lost forever.

Having the right mindset is also very important.

Being prudent with money is the first and most important step as we need capital to invest with.

Being patient and pragmatic is useless if we don't have the capital to begin with.

Patiently waiting for opportunities.

Being pragmatic to know how much we should be investing in something.

Someone asked what gave me the courage and conviction to buy into REITs big time during the GFC.

I remember in reply to another question, I said we must know what we are buying.

If we didn't know what we were buying, then, we wouldn't know if we should buy more or if we should sell.

We could panic and sell when the price plunged instead of buying more, for example.

I used the example of Saizen REIT and said I was sure their portfolio of assets was worth more and that there was a strong demand for them.

When they sold some of the buildings to pay down debt as required by their lenders then, they were able to sell them at a big premium to book value.

Mr. Market was feeling very pessimistic about the REIT and turned a blind eye to that.

The GFC was really a credit crisis.

Some REITs like AA REIT could not get their hands on loans.

In the case of AA REIT, a white knight came along to recapitalize the REIT. 

It was controversial and very ugly but it was the only practical way for the REIT to survive.

The white knight was not altruistic, for sure.

It was all about making money and with so much money involved, they would try to make sure the REIT delivered.

So, what did I do?

I got on the boat with them.

Be pragmatic.

I also mentioned Lippo REIT during the event and how I was able to get a 25% distribution yield back then.

Indonesia was one of the very few countries that did not go into a recession during the GFC and the Rupiah was relatively strong then.

Indonesia didn't rely on external trade much.

Their domestic economy was 60% of their economy if I remember correctly.

The country's urban population still went to malls and they didn't have as many big malls back then.

The malls weren't going to shut down with demand that high.

With a 25% yield, I would have gotten back my money in 4 years.

Of course, some older readers might remember I sold more than half of my investment later for a 200% capital gain when Mr Market recovered from its depression.

That was the one year I blogged about massive capital gains from investments on top of passive income.

Be pragmatic.

I also said that I had the benefit of advice from a senior investor in real estate who said to be brave.

He said the market was behaving as if the buildings were being abandoned.

Still, we must do our own research to verify which I did.

Be brave but don't be foolish.

Don't borrow money to invest with.

Silly to risk what we need for what we don't need.

Don't follow "gurus" blindly.

Don't ask barbers if we need a haircut.

Educate ourselves and trust ourselves more.

We cannot get it right all the time, for sure.

However, if we are right most of the time, we should do well enough.

In the 15 years after the GFC, people got used to low interest rates.

REITs got used to that too and many borrowed too much and were way too optimistic.

We want to avoid being too optimistic and being too pessimistic.

Be pragmatic.

When some were saying buy Suntec REIT, I produced a video on Suntec REIT on how much it has changed from the time I invested in it donkey years ago.

Therefore, contrary to what those influencers said, I said I wouldn't buy Suntec REIT.

A few years back, so many influencers were saying buy Eagle Hospitality Trust and I produced a series of blog posts on why I wouldn't touch it.

Do our own research.

Someone in the audience said my blog was hard to read and he preferred my videos.

I think the truth is more and more people don't like to read.

Maybe, this is why in a recent international study, Singaporeans scored so badly in composition and comprehension in the years after leaving formal education.

Outsourcing isn't always a good idea especially when it affects our personal development.

We can listen to what YouTubers have to say but don't start relying on them for directions.

Alamak.

Nagging again.

Primary objective of this blog is to better answer a question posed during the event.

As I grow older, my brain dulls.

It takes more time for me to recall all things I want to recall in reply to some questions.

It is quite sad when I think of how I was sharper and more articulate before.

The nagging just happened unintentionally.

If AK can do it, so can you. 💯

On Life And Investments.

Readers who follow me in my YouTube community tab would know that I have been busy with many things at home.

Some might remember this recent video,

Link to watch the YouTube video.

I said that in 2025, I might have nothing to do on the investment front.

Now, it is more accurate to say that I don't feel like doing anything on that front.😷

I seem to have lost interest in looking at investments at least for now.🙈

Depending on what happens at home, I could stop talking to myself for a few weeks or much longer.

I think my investment portfolio doesn't need much attention from me, thankfully.🤞

Keeping the status quo isn't a terrible thing for me.

Even with higher expenses expected in 2025, I should have some surplus passive income.

See Expenses in 2025.

The easiest thing for me to do is to park the surplus in T-bills and FDs while I am in this mode.

I will be back talking to myself at some point but I might not be talking about investments as much.

I must accept this move into another stage in my life. 🙊

Some people might feel disappointed but I have said many times before that blogging and YouTube are both hobbies.

I don't have paid memberships or subscriptions or paywalls like some content creators have.

I feel I have to say this because there are some people who have said I must take responsibility before and that I should not leave readers in a lurch.😱

I feel that this is an important post to publish to help manage expectations.💯

I am happiest whenever readers tell me that they are inspired to achieve financial freedom after eavesdropping on me.😊

If AK can do it, so can you.🎊

P.S. See you on 15 Jan if you are coming to the meet up. Don't worry. That is still on.

1.2M53 Plan For CPF In 2025.

In my last blog post, I said that I have already made a $4,000 Top Up to my Medisave Account.

That would help to generate more interest income to pay for my medical insurance.

4% risk free return is really not bad and gives me peace of mind.

Then, the next thing to ask is what about the rest of the year?

Regular readers would know that for many years, I was making voluntary contributions to my CPF account.

Every year, I would make sure to hit the Annual Contribution Limit allowed by the CPF.

That was especially when interest rates were very low.

Risk free and volatility free with reasonably attractive interest rates, the CPF is a great option to help us build a safety net in retirement funding.

However, in the past 2 years, some things changed.

Bond yields moved higher and I blogged about how buying Singapore Savings Bonds might be more attractive than making voluntary contributions to the CPF for some members.

It was certainly the case for me.

With my MA maxed out, more of the money from voluntary contributions would flow into the OA which pays 2.5% p.a.

End result is an average of 3.0% p.a. interest rate for my voluntary contributions.

So, I used the money meant for my CPF to buy Singapore Savings Bonds whenever the latter offered higher than 3% p.a. in ten year average yield.

Towards the end of last year, I did make a small voluntary contribution of $8,000 to my CPF account.

Why?

With Singapore Savings Bonds seeing lower than 3% in ten year average yields, the CPF was more attractive again.

Today, I received a notice from CPF that the pie chart for my account is ready.

This,

1.2M53.

Such a mouthful.

So, with some help from higher yielding T-bills, the CPF OA money has grown faster.

Of course, the government did most of the heavy lifting to grow my CPF savings.

My CPF savings could have grown a lot more had I made a bigger and earlier voluntary contribution.

Of course, that would have been a silly thing to do as I could get higher returns from another similarly rated bond.

Why didn't I use the money for equities instead if I was attracted to higher returns?

I believe in having a meaningful allocation to risk free volatility free bonds.

Exchanging CPF savings for equities goes against this belief.

Especially for a person of my age, a meaningful risk free and volatility free component in my investment portfolio becomes even more important.

If the equities market should crash and we happen to need the money, people would appreciate this point much more.

To be fair, I have a substantial exposure to equities and do not need a greater exposure.

For people who have a much lower exposure to equities and have a lot of money in their CPF accounts, it could be different.

It is all about sizing allocation appropriately for our circumstances.

Anyway, in 2025, I am likely to resume voluntary contributions to my CPF account with Singapore Savings Bonds likely to continue the recent trend of offering lower than 3% in 10 year average yield.

So, the CPF pie would grow much bigger with both the government and myself doing some heavy lifting.

I am 53 and I will have full access to my CPF savings in 2 years from now.

3% p.a. for a 2 years AAA rated Singapore government bond is not bad at all.

If AK can talk to himself, so can you.

Related post:
CPF or SSB?

CPF Savings In 2025. Top Up to MA.

If you are part of my YouTube community, you might have seen the photos I shared on my latest CPF numbers.

Here they are for those who are not in the know,

I was fortunate that I was able to take advantage of higher yielding T-bills to grow my CPF savings at a faster clip in the last couple of years.

However, with the difference being very little in recent months, I have decided to simply leave the CPF OA money untouched for the time being.

I have just done a $4,000 Top Up to my CPF MA to hit the prevailing BHS in 2025.

Decided to do it now as January is going to be a busy month and I fear I might forget to do it later on.

Updated:

This Top Up will make 4% per annum risk free and will generate more interest income to pay for my medical insurance.

Of course, if we are still gainfully employed, doing this would also allow us to enjoy income tax relief.

We are fortunate to have the CPF system in Singapore.

We should take full advantage of our membership.

If AK can do it, so can you!

Published earlier in the day:

4Q 2024 passive income. Prep for 2025. 

4Q 2024 passive income. Prep for 2025.

Happy New Year!

Another quarter is behind us and it is time for another update.

If you are following me on YouTube, you might have seen the update I provided in my YouTube community recently:

My dad is still in hospital.

I have yet to read the comments I have received in recent days on YouTube as I am not feeling very sociable.

However, recognizing the signs of oncoming depression, I decided to do some blogging.

Blogging is therapeutic to me.

I am sure there are many readers who are very concerned for me and would ask me not to worry about updating the community.

Don't worry.

I am doing this as therapy for myself.

So, 2024 has ended and on the investment front, it has been kind to me.

The stock prices of DBS, OCBC and UOB have outperformed.

As they form more than 45% of my portfolio, this has a big positive impact on my portfolio's market value.

The gains more than make up for the losses in IREIT Global and CLCT.

Of course, all of these are just on paper.

So, just saying as I am sure some readers, whatever their reasons, would be interested to know.

All positions are still generating income for me.

Some have asked me what should they do with their investment in Centurion Corp as the share price has shot through the roof.

It would seem like I have made a mistake by selling my investment in Centurion Corp and using the money to add to my investments in the local banks so many moons ago.

Well, I cannot and don't want to give advice but the reasons I gave for selling back then are still valid.

Centurion Corp suspended dividends during the pandemic and was slow in restoring dividends even though they emerged from the pandemic with a stronger balance sheet.

However, they had no trouble with immediately rewarding their directors generously.

So, I decided to add to my investments in the local banks instead as they have a long track record of rewarding shareholders during good and bad times.

Their very strong balance sheets in comparison to Centurion Corp's help to ensure that their dividends would not be suspended if we should see another pandemic.

Our local banks have shown themselves to be more shareholder friendly too.

They are able and willing to reward shareholders fairly, if not generously.

Always revisit our reasons for investing in a certain entity and if the entity is unable to deliver anymore, it is time to let go.

So, sell, hold or buy would depend, to a large extent, on our motivations.

I thought I would end 2024 without making any purchase but I ended up buying more of Wilmar and also nibbled at Alibaba.

I talked about this in my last blog post and if you are interested in finding out more, have a read. 

I made a video about this too:

Not a big deal, really.

My investment in Alibaba now forms less than 0.5% of my portfolio.

My focus is still on passive income generation and Alibaba doesn't quite fit the bill.

As a retiree who depends on dividends from his investments for a living, Alibaba is an interesting and somewhat speculative position.

Nothing more.

I talked about this my YouTube community not too long ago as well,

If Alibaba should see its stock price decline 5% to 10% from here, I would probably add to my investment but it would remain a very small investment.

In my last blog post, I identified a weak uptrend with a gently rising support line but if that were to break, Alibaba's share price could go lower.

A retest of HK$72 support level is not impossible since we could be seeing the formation of a head and shoulders pattern which would give us an eventual downside target of HK$72 or so.

My charting skills are a bit rusty.

So, beware of tetanus.

Now, the numbers:

Q4 2024: $28,734.99

FY 2024: $ 234,439.46

This is more or less the same as FY 2023 which delivered $231,495.19

Despite having sold most of my investment in Sabana REIT in 1H 2024, passive income on a portfolio level did not reduce in 2024. 

DBS, OCBC and UOB really did all the heavy lifting in 2024 as they paid higher dividends.

In 2025, I expect passive income to come in lower due to a much smaller investment in Sabana REIT and also the expected 25% reduction in DPU from IREIT Global as they reposition their Berlin asset.

A 4% or 5% reduction in 2025 passive income on a portfolio level would not surprise me.

Of course, we could see higher dividends from DBS, OCBC and UOB in 2025 as they have excess capital which could be returned to shareholders.

Could be special dividends which means they are non-recurring but that would be good enough to provide some relief.

Once IREIT Global gets their Berlin asset up and running again in 2026, income generation should receive a leg up as the property has attracted 2 tenants so far offering to pay 100% higher rent than the master tenant which vacated the property.

Oh, I will also have to remember to top up my CPF MA before the end of the month.

That's $4,000 to be set aside.

Risk free return of 4% p.a. and the interest earned pays for my medical insurance.

Of course, if you have been following me for many years, you would know all about this.

Let the government pay for our insurance.

Finally, I will maintain my T-bill ladder and strengthen it whenever I have spare cash on hand.

I will only dismantle it when I see Mr. Market being overly pessimistic and offering to sell stocks of businesses I like on the cheap.

All of us can be and should be financially more secure.

If AK can do it, so can you!

Wilmar at $3.00 per share. More on Alibaba.

Quite a few readers and viewers have been asking me on and off this year whether I was adding to my investment in Wilmar.

I think more people asked me when Wilmar's stock price went down to $3.20 and $3.10 per share.

I kept saying that I was waiting for $3.00 per share.

Briefly in August, I thought I might get it but it didn't happen.

Well, it finally happened.

My overnight BUY order at $3.00 per share was filled.

Wilmar International is very undervalued if we were to look at the sum of its parts.

Its majority held YKA in China has a larger market cap than Wilmar in Singapore.

So, buying Wilmar today, we are getting the rest of its businesses for free.

This is something I have said for a long time.

Of course, a stock could stay undervalued for a long time too.

Those of us who track the counter know that insiders are consistently adding to their positions.

Historically, at $3.00 per share or lower, we have seen even more insider buying.

Wilmar's business in China is not performing as well as before as the Chinese economy is still suffering from the meltdown of its property sector.

Consumers are still cautious and are not spending as freely as before.

Historically, Wilmar also did share buybacks during times of lower earnings as its share price got punished as a result.

At current prices, downside is probably limited.

I also like that Wilmar has been consistent in paying dividends through good and bad times.

They did not suspend dividends during the pandemic, for example.

The dividend per share of 17c isn't demanding as expectation is for earnings per share to be about 30c in 2025.

Buying at $3.00 per share gives me a dividend yield of 5.66% and an earnings yield of about 10%.

Of course, readers who have been watching my  YouTube videos on the banks would be familiar with the concept of earnings yield. 

Wilmar is still one of my larger investments and it fits my primary strategy to invest in bona fide income generating assets which will pay me through good and bad times.

I thought I would end 2024 without buying any equities but after initiating a position in Alibaba Group last week, I have added to my position in Wilmar today.

Many regular readers were curious why I invested in Alibaba Group last week.

I have made videos about Alibaba and how I thought it was trading like a value stock.

Despite that, I wasn't ready to jump on the bandwagon because of policy risk in China.

Alibaba also didn't use to pay a dividend but not too long ago, they started to pay dividends, very little in dividends.

The dividend yield is less than 2% with a payout ratio of about 20%.

So, it is a very sustainable dividend.

Alibaba has very healthy cashflow and very strong balance sheet.

Instead of paying more dividends, Alibaba has decided to do share buybacks.

I must agree that doing share buybacks at such depressed valuations is probably a good idea.

Alibaba has already bought back some 10% of its outstanding shares, if I remember correctly.

All else being equal, share buybacks will lead to earnings accretion and we should see a lower PE ratio.

Paying HK$80 per share today is a better deal than paying HK$80 per share two years ago.

Having said this, Alibaba is a small position in my portfolio and although I could add to my position if the stock price declines another 5%, it will probably remain small.

Why 5%?

There is some support for a mild uptrend if we connect all the lows in its stock price seen this year.

Even if there is another 5% decline in its stock price, this mild uptrend would still be intact.

If the support holds, the worst could indeed be over for Alibaba.

When a viewer asked what the stock price for Alibaba is going to be like in future, I said I didn't know how the price is going to move.

However, I know that the 13 years median PE ratio is about 30x which means that if Mr. Market decides to like Alibaba again, all else being equal, its stock price could double from here.

Well, I wouldn't hold my breath.

Undervalued can stay undervalued for a long time and it certainly seems to be the case for Alibaba.

Whether stocks or socks, just like Warren Buffett, I like to buy when they are marked down.

Merry Christmas!

Related post:
Wilmar: Free stuff!

AK is buying Alibaba shares!

I didn't think there would be another blog post until the new year but I did something just now which would have surprised myself a few months ago.

I bought some Alibaba shares.

If you are rubbing your eyes to read that again, I know how you feel.

However, if you have been following my YouTube channel, you would have heard me talking to myself about how Alibaba at HK$80 a share looked attractive even to value investors.

I just didn't like the policy risks in China and I also didn't like that they paid so little in dividends.

Well, better than no dividends, I guess.

Alibaba is fully capable of paying higher dividends given their healthy cash flow and balance sheet.

They have instead decided to buy back shares which, of course, increased the value of the outstanding shares.

Alibaba isn't dreadfully overvalued like Tesla.

Some readers might remember I made a video comparing the two.

I said that if I had to choose, I would invest in Alibaba and not Tesla.

Well, Mr. Market has gone on a Tesla buying spree and ended its brief fling with Alibaba.

Anyway, what made me change my mind?

More accurately, who made me changed my mind.

I had a chat with a friend who is invested in Alibaba.

He knows my stand on Alibaba and he agrees that there are policy risks.

China is not a free market economy.

The many ways we use to value stocks conventionally are not able to put a numerical or monetary value to these risks.

Yet, he is willing to take the risk because Alibaba just looks relatively cheap, a point which I am in agreement with.

When he saw me smiling, he asked,

"Do you think I am kum gong?"

I laughed at that because he obviously watched the video I produced on how a fellow YouTuber called me that for buying shares of DBS at higher prices.

He went on to say that if I was willing to buy Bitcoin after being convinced that the digital currency had value, why not buy some shares of Alibaba?

The important thing is to invest an amount of money that's similar to what I used to buy Bitcoin.

Or do not invest more than what I feel I am OK to lose if Alibaba gets shut down by the CCP.

I came home and I gave it some thought. 

Alibaba isn't something I must buy but I do like the idea of investing in a fundamentally strong company which Mr. Market dislikes.

Like what Warren Buffett said before,

"Be greedy when others are fearful."

Well, I am not going to be greedy here but I don't mind having a sampler.

So, thanks to my friend, I am a newly minted Alibaba shareholder now that Alibaba is back at HK$80 a share.

It helps that we can buy Alibaba shares in the form of SDRs or Singapore Depository Receipts in SGX now.

I like to keep things simple.

I think this will be the last video for the year but, of course, never say never. 

If AK can do it, so can you!

Plans for 2025. Hoarding cash for a crash?

It has been almost a month since my last blog post.

I am serious about becoming more laid back and being less active in social media.

The garden which I used to enjoy taking strolls in has become a minefield.

What to say?

What not to say?

How to say what I want to say?

Talking to myself has never been more stressful.

I have enough stress to deal with in my life.

Don't want to have to deal with more stress especially when I am not being paid to do so.

Yeah, at least we are paid to deal with stress at work, right?

I believe that many local financial influencers will have to be licensed and regulated because they are being paid for promoting financial products and services constantly.

From an interview conducted by CNA, I believe that it was one of the tests set out by MAS.

In case you are you interested, here is the video by CNA:  

Not the best interviewer nor interviewee but just focus on the substance, I guess.

I think the blogger they interviewed is probably one of those who would have to be licensed and regulated as her content is heavily monetized.

Well, since she and other financial influencers like her make money constantly from doing what they do in social media, they shouldn't mind being licensed and regulated.

As for me, I rather not have to deal with the hassle.

So, I will restrict the frequency of sharing and also the things which I do share in my blog and YouTube channel.

For example, in this blog, I am also going to talk to myself about why I am hoarding cash.

2024, just like 2023, has been kind to me when it comes to my investment portfolio.

Well, there are still a couple of weeks left to 2024 but I guess I can close my books for the year early.

Unlike 2023, I have not put any money to work in equities in 2024.

Most of the passive income I received in 2024 has been put to work in SSBs and T-bills.

I also made a smallish voluntary contribution of $8,000 to my CPF account.

CPF money for me will become cash in another 2 years from now.

Well, the money in the CPF OA, anyway.

Being paid an average of 3.0% p.a. risk free and volatility free is not bad.

So, my cash position has grown in 2024 and looks set to grow in 2025 too.

It will grow even more in 2026 when I have access to my CPF OA money.

In the meantime, I get paid reasonably well for holding more cash.

The UOB ONE Account has been good to me.

Fixed deposits in CIMB have been decent in generating some interest income too.

Just to be sure, these are not investments and I do not include them in my quarterly passive income updates which are about passive income generated by my investment portfolio.

6 months T-bills are still paying 3.0% p.a. or so.

Singapore Savings Bonds I bought in the middle of this year had 10 years average yields of 3.2 to 3.3% p.a. or so.

I am already substantially invested in the stock market and do not feel any urgency to put more money to work there.

Does this mean that I feel that the stock market is going to crash soon?

I know that some financial influencers like to make predictions as to where stock prices are going but like I always say, we cannot predict but we can most certainly prepare.

So, people can think of what I am doing as preparing for a stock market crash.

I just don't know when it is going to happen.

Of course, I also say never to be overly optimistic nor overly pessimistic.

It is important to stay invested in bona fide income generating assets and be paid while we wait.

Someone who kept saying that the common stocks of Singapore banks were very overvalued in the last 12 to 18 months and said he would wait for a crash before buying might want to do a rethink.

The fact that I have been hoarding cash does not mean that I think the stocks were very overvalued.

In fact, I have been quite consistent in saying that if we were not invested yet, we could buy some.

However, it is certainly harder to say that now.

When we look at PE ratios, it is mind boggling how the multiples have expanded for so many companies.

Earnings really have to come in much stronger in 2025 to justify these multiples.

For DBS, OCBC and UOB, their PE ratios have also risen pretty significantly.

They are now around 11x to 12x which is slightly higher than the 5 year average.

If we had a working crystal ball and if we could tell for sure if the earnings would grow enough to ensure these numbers are justifiable, then, we could buy more now.

Since I only have a bowling ball that thinks it is a crystal ball, I would rather err on the side of caution.

This is why I said earlier that my cash position is likely to grow in 2025 as well, all else being equal.

Well, it would probably grow more slowly as I am going to have higher expenses in 2025 with more money set aside for parental support.

That is another topic for maybe another day.

This is probably the last blog post before the year ends and maybe even before "Evening with AK and friends 2025" takes place on 15 January 2025.

If you are interested in the event, there are a few tickets still available and I blogged about it last month: HERE.https://singaporeanstocksinvestor.blogspot.com/2024/11/dbs-ocbc-and-uob-evening-with-ak-2025.html?m=1

Merry Christmas and Happy New Year!