Capitaland: Partial divestment at $2.48.

Just two days ago, on 17 January, I said that I see resistance at $2.48. I got this from the weekly chart as that was resistance provided by the declining 20wMA and the 138.2% Fibo line.

So, I put in an overnight sell order at $2.48 and it was filled later in the session today.

In very bullish circumstances, we could see $2.50 and $2.53 taken out with ease. With the formation of a long white candle on the back of very high volume, this could indeed be the case. The MACD has just crossed into positive territory and this signals the return of positive buying momentum.

In such an instance, we could see $2.65 or even $2.75 tested. It would be a sight to behold. Remember, however, that TA is about probability. Nothing is for certain.

Relates post:
Capitaland: Resistance at $2.48.

AIMS AMP Capital Industrial REIT: Partial divestment.

Tomorrow will see the release of quarterly results for AIMS AMP Capital Industrial REIT. As if in anticipation of a good set of numbers, its unit price pushed higher today on higher volume, closing at $1.00.

Last month, I accumulated units of the REIT at 93.5c, 94c and 95c. Why did I buy? At those prices, the REIT was very undervalued. Indeed, I was waiting to accumulate at 92c too but the lowest it went to was 92.5c. I blogged about it: here.

Today, my overnight sell order at 99c was filled, locking in some gains. I believe the REIT is still undervalued and I sold not because of valuation concerns. Then, why did I sell?

I sold because I want to rebalance my portfolio. With the acquisitions I made last month, the REIT's weight in my portfolio has tipped somewhat. Also, technically, $1.00 seems to be the upper end of a trading range. So, divesting partially, closer to resistance, makes sense.

Notice how the Stochastics has stayed in overbought territory for quite a long time now. In a range bound situation, the risk of a downward movement in price is, therefore, higher. However, in very bullish circumstances, momentum oscillators could stay overbought for a long time. In case resistance at $1.00 is taken out, I expect resistance provided by the 200dMA at $1.02 to come into play.

My remaining investment in the REIT is still a substantial part of my core investment for passive income. This is unlikely to change.

Tea with AK71: Another loaf of bread.

I blogged about how a loaf of bread could last me for days before. I like raisin bread the most and would usually buy when there is a special deal. Gardenia's raisin bread had a special deal going for a while but ended a couple of weeks ago.

On Sunday, I bought a loaf of softmeal bread from Sunshine. Usual price: $2.30. Special offer: $1.95.

Today, I finished the last few slices and had the two bread ends for lunch with a generous spread of margarine. Had to be more generous with the margarine or they would be too dry and difficult to swallow.

An inexpensive and healthy lunch.

Related post:
Tea with AK71: A loaf of bread.

ARA: Divestment at $1.30 and $1.32.

I have been entering overnight sell orders for ARA at $1.30 since early this month. $1.30 was the price I last sold some ARA at. As I noticed some strength in the upward movement in price, I also put in a sell order at $1.32 last night. Both sell orders at $1.30 and $1.32 were filled today.

Price touched a high of $1.33 today before closing at $1.315. Volume was relatively low compared to 3 sessions ago when price action formed a similar white candle. I wonder if it would have enough fuel to push it past the next resistance at $1.335.

Immediate support is at $1.29 but I expect a stronger support to be at $1.25 in case of a retracement. $1.25 is also where a golden cross is likely to be formed with the 20dMA rising to cross the gradually declining 100dMA. A golden cross was earlier formed between the 20d and 50d MAs.

CapitaMalls Asia: Overcame resistance.

CapitaMalls Asia is rising and stronger than Capitaland too.

Its share price overcame resistance provided by the 20wMA.

Resistance provided by the 138.2% Fibo line at $1.32 is the one to watch now. Could we see a retest of $1.40, the high touched in early November 2011?

The 20wMA could be resistance turned support in the event of a weakening in price. This is at approximately $1.26.

Related post:
CapitaMalls Asia: 20wMA, the resistance to watch.

Capitaland: Resistance at $2.48.

Capitaland is on the rise.

I see resistance at $2.48. This is provided by the moderately declining 20wMA as well as the 138.2% Fibo line.

Beyond $2.48, resistance is provided by the 150% and 161.8% Fibo lines at $2.50 and $2.53 respectively.

In case of a retracement, we could see a test of the 50% Fibo line at $2.30 or the 38.2% Fibo line at $2.27.

Related post:
Capitaland: 20wMA, the resistance to watch.

Hyflux: Divestment as gap closed at $1.365.

My sell order at $1.365 was filled today. This is the gap filling I talked about before. 

Could price move higher in the next session? It could, of course.

However, the upper wick in today's white candle as price touched a high of $1.37 before closing at $1.35 suggests that selling pressure is very much present. 

Moving higher on lower volume compared to two sessions ago is also a sign of caution.

The declining 100dMA is likely to exert downward pressure on price action. 

So, further upside could be capped at $1.385 or so. In a retracement, expect some support at $1.21.

Related post:
Hyflux: Retest of recent high.

Courage Marine: BDI plunging.

Yesterday's Business Times reported that the Baltic Dry Index (BDI) fell to an 11 month low. Today, it fell another 3.799% to 1,013.

The decline is attributed to a worsening glut of ships. Rates are now below operating costs in the Pacific Ocean.

Capesizes, the largest dry bulk carriers cost US$7,437 a day to operate (excluding fuel). However, rates on round trip voyages in the Pacific fell to US$6,471 a day, down 80% from a month ago.

Seasonal decline in demand to ship commodities to China, port disruptions in Australia after a recent cyclone and a larger number of ships will continue to exert downward pressure on rates in the short run.

My investment in Courage Marine late last year at 10c a share is now underwater. What do I plan to do? Nothing. Why?

Courage Marine is a company with a strong balance sheet and I doubt it is going to sink. It might not do well but it will most probably survive the bad times.

For those who are thinking of possibly investing in Courage Marine, there could be a better time to do so. For those who are already vested, we have to ask if we run the risk of selling at the bottom if we exit now.

With my investment in the company accounting for only some 1.5% of my total portfolio value, I will simply hold on.

Investing in financially sound companies, I am able to stomach paper losses which are likely to be temporary in nature.

Related post:
Courage Marine: Bought more at 10c a share.

Courage Marine unit disposes MV Raffles for $4m
Wednesday, 18 January 2012

© 2012 - The Edge Singapore

Tea with AK71: A lunch of barley and winter melon.

I have blogged about how I would boil barley water and later eat the barley for a meal as well. Today, I brought to work a container of barley and winter melon strips drenched in soya bean milk.

My sister boiled barley water over the weekend and she was going to throw away the barley and winter melon strips. I asked her to keep them for me in a container so that I could bring to work for lunch. She kindly obliged.

This morning, I poured soya bean milk into the container and, voila, that's my lunch for the day!

Barley has been described as a nutritional powerhouse that has a low glycemic index (GI). It is high in fiber, naturally low in fat and cholesterol free. It contains vitamin Bs, antioxidants, selenium, iron, magnesium, zinc, phosphorus, potassium and copper.

A healthy meal and it costs next to nothing!

Related post:
Tea with AK71: A simple meal.

Mr. Lee Kuan Yew on the eurozone crisis.

I just received the latest copy of Alumnus in the mail and on page 4 is a one page write up on what Mr. Lee Kuan Yew said during LKY School of Public Policy's 7th Anniversary. He said something about the eurozone which got me interested enough to search for more details online.

The one liner that got me interested was: "Mr. Lee thinks European leaders will try very hard to prevent the collapse of their currency union but he does not believe they will be able to keep it going." So, does he think that the eurozone will ultimately dissolve?

Searching the internet, I found a website with the details:

... European leaders will try to save the euro zone from collapse, because a collapse of the currency union would be “an admission that their aspiration for one Europe is not achievable”.

.......

“A fundamental problem of the euro is that everybody, every European country, march to the same drummer whereas each country has its own tempo and you cannot expect the Greeks to march like the Germans, so the problem will not go away”.

Therefore, he added, “a two-tier Europe or even a three-tier Europe is possible but a one-tier Europe with different spending habits, thrift habits and discipline is too difficult to achieve”.

The euro came into existence in 1999 with the aim of increasing economic cooperation and growth in Europe, and upping Europe’s presence on the world stage.

With the recent debt crises, the currency union forces other European countries to bail out troubled  members and policymakers are denied the flexibility of monetary policy as a tool to fight recession.


Read articles: here and here.

So, will the eurozone go the way of the Dodo? If it will, when will it happen? 

Your guess is as good as mine. 

One thing is for sure, Mr. Lee Kuan Yew has spoken and I will take note.

------------------------------

Seven eurozone countries had their ratings confirmed while nine were downgraded by S&P on 13 Jan (Friday). It downgraded France's top AAA rating by one notch to AA+, with a negative outlook while  Italy went down by two notches to BBB+, negative outlook, and Spain was also down two notches to A, negative outlook.

Read article: here.


BREXIT!

Updated on 25 June 2016: Prime Minister David Cameron is to step down by October after the UK voted to leave the European Union. Speaking outside 10 Downing Street, he said "fresh leadership" was needed. The PM had urged the country to vote Remain but was defeated by 52% to 48% despite London, Scotland and Northern Ireland backing staying in. (Source: BBC)

The UK is likely to lose its AAA credit rating after it voted to Leave the EU. Moritz Kramer, chief ratings officer for S&P, said on Friday morning that the UK's AAA rating was “untenable under the circumstances”. German daily newspaper Bild quoted Kramer as saying: “If Great Britain decides for a Brexit in the EU referendum on Thursday, then the AAA credit rating would come due and would be downgraded within a short period of time.” (Source: Independent)

Related post:
Stakeholders should worry as credit is tightening.

Sabana REIT and AIMS AMP Capital Industrial REIT: Releasing quarterly results on 20 January 2012.

Both Sabana REIT and AIMS AMP Capital Industrial REIT will be releasing quarterly financial results on 20 January 2012.

Sabana REIT: see announcement here.

AIMS AMP Capital Industrial REIT: see announcement here.

Sabana REIT has completed a few acquisitions in the last quarter. However, I think their contributions to distributable income will be more substantial in the current quarter. This is because the acquisitions where completed in November and December and not at the beginning of the last quarter.

On 22 November, acquisitions of the following were completed:

1. 3A Joo Koon Circle
2. 2 Toh Tuck Link
3. 21 Joo Koon Crescent

See announcement here.

On 7 December, the acquisition of 39 Ubi Road 1 was completed. Read announcement here.

On 15 December, the acquisition of 6 Woodlands Loop was completed. Read announcement here.

All acquisitions were funded by debt and would contribute to a higher DPU. Conservatively, I am expecting a DPU of 2.2c or a bit more to be announced on 20 Jan.

We could see a higher DPU in the next quarter when full quarter contributions from the aforesaid completed acquisitions weigh in.

As for AIMS AMP Capital Industrial REIT, redevelopment of 20 Gul Way is ongoing and seems to be progressing nicely. Higher income due to this redevelopment will materialise only in 1Q 2013. I blogged about it before. See it here and how I bought more units at 93.5c.

It would be nice to have a repeat of 2.5c DPU when results are released on 20 Jan although I would not be surprised if DPU dips a bit due to possible loss of rental income from the redevelopment of 20 Gul Way. I mentioned it last year in a blog post as well: here.

Unit prices of both Sabana REIT and AIMS AMP Capital Industrial REIT have been creeping up. Their unit prices closed at 90c and 97.5c respectively in the last session. With the estimates I have made, this would mean annualised distribution yields of roughly 9.78% and 10.26% respectively.

Good luck to all unit holders.

Kaplan Higher Education Institute

Kaplan Higher Education Institute, one of the preferred private education institutions in Singapore, partners Northumbria University from the UK.

Northumbria University is one of the largest and most comprehensive UK education providers in Asia.

This partnership brings to Singapore a wide variety of Direct Honours and Masters programmes. These programmes are mainly assignment based and can be complete in just 16 months!

If you are thinking of furthering your studies, you can now get a study grant should you present the completed maze available islandwide (a print out can be obtained from the website) to their consultants.

Give it a go and you might just get yourself a study grant:
http://sg.churpchurp.com/AK71SG/share/kaplangame

First REIT: Resistance and supports.

First REIT has been very resilient. It is probably one of the better performers in my portfolio as well. A great investment for income.

However, investing for income does not mean that we cannot trade S-REITs from time to time especially if they remain range bound and somewhat predictable.

In the case of First REIT, if we look at the weekly chart, it is caught between the 50w and the 20w MAs. Immediate resistance is at 77.5c while immediate support is at 76.5c. Breaking immediate resistance could see 79.5c tested next while breaking immediate support could see 74.5c tested.

Now, which way would it go? My take? In the short term, price could go higher. Why?

Looking at the daily chart, we see the MACD just crossing into positive territory while the MFI overcame the 50% line which acted as resistance. The MFI continues to move higher.

However, the formation of a dragonfly doji on a day of relatively high volume suggests that selling pressure at 77c remains formidable. The longer it successfully prevents price from closing higher, the stronger it becomes as resistance.

Why does resistance at 77c seem so strong? It is the confluence of the 50d, 100d and 200d MAs.

SMRT: Downtrend intact.

Technically speaking, SMRT doesn't look good and I am not referring to its trains stalling. OK, bad joke.

Lower high and lower low in price are accompanied by a lower high and lower low in the MACD which is in negative territory. The downtrending MFI suggests reduced demand as the 50% line acted as resistance.

However, forming a doji provides some encouragement for long holders. The doji represents indecision and is a stalemate between bulls and bears.

That the doji formed despite higher volume on a day when price went lower than the low of the previous session suggests that there is some buying support. However, it could also be traders covering their short positions ahead of the weekends.

Single stick reversal signals are usually less reliable. For anyone who is interested in going long here, look out for confirmation next Monday.

If the signal is not confirmed, a lower low could form. $1.70? Perhaps.

Hyflux: Retest of recent high.

Resistance at $1.28 gave way today as price retested the recent high of $1.35. Volume was relatively high. This translates into a higher probability of price pushing higher in the next session. Remember that volume is the fuel that drives rallies.

MACD continues to rise in positive territory. Buying momentum is still positive and strengthening. The MFI continues to rise after bouncing off 50% a few sessions ago. This suggests that demand is still strong.

There is a chance of the counter's price testing $1.39 in the near future. However, I would be happy to divest partially at $1.365 where price could close the gap formed in early November 2011.

Related post:
Hyflux: Early stage of trend reversal?

CapitaMalls Asia: 20wMA, the resistance to watch.

If you think the title of this blog post looks familiar, it should be. ;)

If you look at the weekly chart of CapitaMalls Asia, you would know why:

Compare this with:
Capitaland: 20wMA, the resistance to watch.

Capitaland: 20wMA, the resistance to watch.

Quite a few people asked me what do I think of Capitaland as I have not said anything about it in a while. Well, if we look at the weekly chart, it is obvious that the downtrend is intact.

However, the higher low on the MACD which accompanies the lower low in price gives us a positive divergence. Being in the weekly chart, it suggests that we could see a recovery in price eventually.

A recovery could meet with resistance provided by the declining 20wMA. If we notice, this MA has functioned as resistance since late October 2010. Yes, Capitaland's downtrend has gone on for more than a year.

The 20wMA is important because:

1. For traders, this is where they would probably sell.

2. If the 20wMA holds as resistance, price would probably form a lower high and continue to move lower.

3. If the 20wMA breaks and price moves higher on the back of increased volume, the downtrend could be broken and it might even reverse. Short covering could push price even higher.

What would I do? Sell at resistance at least partially. It is never wrong to take profit, especially in uncertain times such as now.

Hyflux: Early stage of trend reversal?

I was going to blog about Hyflux last night but I got home rather late. Anyway, Hyflux's share price has been rather bouyant. Immediate resistance at $1.28 is a relatively weak one but it does not mean that it cannot prevent price from going higher.

People sometimes ask me how do I tell if a resistance or support is weak or strong. If it was tested many times before, it is strong. If it was tested many times before in the weekly chart, it is even stronger. It is stronger if it had not been compromised when tested in the recent past. Of course, there is an element of subjectivity here and these are just my little ideas.

Yesterday, a white candle with a long upper wick was formed as price closed at $1.27 after touching a high of $1.30. Volume was relatively high but the long upper wick suggests some selling pressure was present as traders locked in gains.

MACD is still rising in positive territory which suggests that there is positive buying momentum. The lower trading volume in the first two hours of the current session suggests a possibly less exuberant Mr. Market. So, do I sell? I could do so and book a gain.

However, I see that the declining 50dMA has acted as support. It is currently at $1.215. The 20dMA has turned up a few sessions ago and looks like it could form a golden cross with the 50dMA in time. So, with immediate support at $1.215 and with the MACD rising, there is a chance that price could go higher, given some time.

In the weekly chart, it is worth noting that the MACD has turned up and completed a bullish crossover with the signal line. However, it is still in negative territory. So, momentum is still negative in the longer term and any upward movement in price could be fraught with obstacles. Having said this, the development in the weekly chart suggests that selling pressure has eased and could see investors loading up at supports with less trepidation.

A higher high could see resistance provided by the declining 100dMA tested. This is at $1.39. Before that, we might see gap filling at $1.365. For anyone who is in the money, a partial divestment to lock in some gains could be considered. For anyone who would like to add to his long position, buying as close to the support of $1.215 as possible would be nice.

P.S. I am unable to include charts in this blog post. I might do it later this evening at home. Of course, the charts could look different by the close of today's session.

Daily Chart:

Weekly Chart:

Golden Agriculture: 3 signs of possible weakness.

I am waiting to add to my long position here. There are signs that price could see some weakness in time to come.

1. Formation of a gravestone doji today on much higher volume. This suggests that buyers were unable to beat sellers as market participants mostly chose to lock in gains.

2. Declining volume as price rose. Volume is the fuel that drives rallies. Without volume, rallies would fizzle out.

3. A lower high on the MACD even as price formed a higher high. A negative divergence. Buying momentum is in decline.

Immediate support is at 72c. If this should fail to hold, I expect the 200d MA, a long term MA to be tested. This is currently at 67.5c.

Saizen REIT: Acquisitions and long term loans.

Although I divested a large part of my investment in Saizen REIT, I still like the idea of owning freehold residential real estate in Japan where two thirds of its population rent the homes they stay in.

The Japanese Yen has strengthened against the S$ quite a bit and this could translate to higher income distribution in 2012 for unitholders. Add YK Shintoku's contribution to income distribution and the recent acquisitions which were funded by debt, we could see DPU a bit higher than my last estimate of 1c. Whether the difference is going to meaningful would also depend on how many remaining warrants would be exercised before the next distribution.

I have said that I like the amortising feature of the loans taken by the REIT before. What I also like are the relatively long terms of the loans taken by the REIT. This logically lowers refinancing risks.

The REIT recently took on a loan of JPY500m which partially funded the acquisition of a property in Kumamoto. This is an amortising loan with a 20 years tenure. The interest rate is 3.35% per annum.

For any investor who bought at 13.8c/unit today, if I were to stick to an estimated DPU of 1c per annum, we are looking at a distribution yield of about 7.25%. Of course, I am hoping for a higher DPU.

REITs, NOL, ARA and Hyflux.

Hope everyone had an enjoyable long weekend and is not missing the holidays too much.

The bullish movement in the stock market should put smiles on the faces of long holders. Has the bear been vanquished? I think it is too early to think so. So, we might want to make use of the bullish sentiment to lighten our long positions.

For me, I am still heavily invested in selected S-REITs as they could continue to deliver predictable passive income even in a zero growth environment. This is quite different, however, from thinking that S-REITs' unit price would not suffer in tandem with the broader market in the event of a crash. Indeed, it would be naive to think so although, with stronger balance sheets, we should not see the same magnitude of decline as in the last global financial crisis.

If we believe that money should go to where it is treated best, any significant decline in the unit prices of the S-REITs in my portfolio would tempt me with higher yields to add to my long positions. For now, I am keeping the status quo with regards to my S-REITs portfolio.

What about lightening my long positions? Share prices of certain companies went up quite a bit yesterday and I tried to sell some.

Today, my sell order for NOL at $1.22 was filled. With this partial divestment, I made some pocket money from Mr. Market. Why $1.22? That was the high of early September. Indeed, a safer resistance to sell at would be $1.18 as it has been tested many times. I took a chance that the buying momentum could push price pass $1.18 and it paid off. Indeed, price touched a high of $1.23.

However, the formation of a shooting star on the back of higher volume today suggests that NOL's share price could be heading lower from here. If $1.18 cannot serve as support, we could see price retreating to $1.10 which is where we find the 50d and 100d MAs merging.

I was not so lucky with another two counters, ARA and Hyflux.

People would say that ARA's trading volume is so thin most of the time that TA is inaccurate here. I didn't really bother using TA this time as I simply remember selling at $1.30 the last time and tried to do it again this time. Its share price did touch $1.30 last evening but my sell order was not filled. Trying to sell again today at $1.30 proved to be futile.

Well, it is back to the waiting game. If $1.30 should be taken out, I wonder if the next target is $1.45? Allow me my little day dreams.

As for Hyflux, the many white candle days on the back of expanding volumes led me to think that we could possibly see gap closing at $1.365 or even see a test of the support turned resistance of $1.39. Deciding not to be too greedy, I entered a sell order at $1.36. Unfortunately, it turns out that I was still too greedy.

Anyway, looking at the chart, immediate supports are at $1.24 and $1.225. The formation of a black candle on the back on lower volume is good news for long holders. However, that the black candle covers more than half of the preceding day's white candle is ominous. The MACD is rising strongly but it is still in negative territory. So, things could go awry.

I partially divested some of my investment, locking in a small gain in the process. I am just simply managing risk here by reducing exposure. If price should continue its upward trek, I would still stand to gain.

Finally, turning our attention away from the stock market, I have put up new blog posts on my recent trip to Japan. See them at Travel Photos and Videos. More to come. :)

Outside Lumine, Shinjuku. Kitty, "Hey! You can do it!" Believe it!

Related post:
Hyflux: Broke resistance.

Happiness in 2012.

The new year is just hours away.

I took this photo in Ueno Park during my recent trip to Japan. The scene has a calming and pleasing effect on me.

Bicycles are important transportation vehicles in Japan. I smiled when I saw this bicycle.

Daibutsu in Kamakura. "If one speaks or acts with pure thoughts, happiness and peace of mind will follow."

This helpful sign outside a shop solicited a hearty laughter from me.

Very often, simple things can make me happy.

May all of us find happiness every single day as we celebrate the simple things in life.

Happy 2012.

Hyflux: Broke resistance.

On 15 Dec, I said, "Right now, $1.065 is immediate support provided by the 123.6% Fibo line. A stronger support would be at $1.015, the 138.2% Fibo line and a golden ratio."

Hyflux's share price touched $1.015 on 23 Dec, forming a white spinning top at the end of that session. A positive divergence was also formed in the process. A lower low in price and a higher low in the MACD. A buy signal. Congratulations to anyone who went in on the long side then! (I think I was visiting museums, temples and shrines in Ueno that day.)

Its share price has overcome the resistance provided by the 20dMA. Any further increase in share price will see resistance at $1.22 (the high in early December) and $1.24 (as provided by the declining 50dMA).

There is, however, no sign of a trend reversal in the weekly chart. So, conventional wisdom would suggest selling into strength instead of holding. If $1.24 could be overcome convincingly, there is a chance that the declining 20wMA which would approximate $1.39 next week could be tested. This would coincide with a natural candlestick support. Whether it would happen would depend on the strength of this rebound.

A partial divestment at immediate resistance could be prudent although the very high volume that accompanied the formation of the long white candle in the weekly chart holds promise for long holders. Good luck to fellow shareholders.

Related post:
Hyflux: Continuing downtrend.

A common piece of advice on saving.

I want to say something about a very common piece of advice dished out by many financial advisors and that is to save at least 10% of our take home pay. 

Now, this is an easy enough one liner but is it easy to put into practice?






For me, however, I have always said that saving even 10% is too little. Of course, everyone's circumstances are different. 

So, for some, 10% is all they can manage. For some, even 5% could be a challenge. I have found out, over the years, that many do not save anything at all.

For people who are saving 5% to 10% of their salary every month, they want to work on increasing that percentage. For those who are not saving anything at all, it is worrisome indeed.




These people should sort out their needs and wants and see if they could start saving some money regularly. 

If they have made all possible reductions to their expenses, they might want to find ways of increasing their incomes. This will power up their savings rate assuming that all additional income earned is saved.

It might sound trite but saving is the very first step in an average person's journey towards financial freedom. Remember, it is always hardest in the beginning. Start and don't stop. As we gather momentum, it gets easier with time.

Remember Newton's first law? Yes, it is the law of inertia. Without exerting a force to make a change in our lives, we will remain where we are and inertia is bad company. Once we force ourselves to move and stay the course, inertia becomes a good friend.

Remember also the POSBank mascot, a squirrel. We were always encouraged to save in our school days. There is no reason why we should stop once we leave school. 

Squirreling away even a small amount each day would definitely add up. The result could be amazing when coupled with prudent investments.





Shall we perhaps start with that drink we always buy in the canteen during lunch? Could we instead drink from the water fountain in the office or make a cup of coffee in the office pantry?

Saving $1 each working day would mean $20 a month or $240 a year. A cup of coffee from Starbucks would cost many times more. Quite unhealthy too, in more ways than one. Seeing stars?

Invest the $240 for a 10% yield and we would have 24 cups of "free" coffee in the following year. If we like Starbucks' coffee, it would work too.




Now, assuming Starbucks' coffee costs five times more, if we should be willing to "downgrade", we could be looking at 120 cups of "free" coffee instead of just 24. Downgrade? Another sacrifice? If we can live with it, why not?

Trust me when I say that frugality has a way of growing on us. Saving $240 this year might yield 24 cups of "free" coffee in the following year but once we are used to not paying for coffee as a working adult, we could have "free" coffee for the rest of our lives when we finally retire. Amazing, isn't it?

Sacrifices made today could transform into huge gains over time. Believe it.




Related posts:
1. Wage slaves should be fearful.
2. Do you want to be richer?
3. Seven steps to making passive income from the stock market.
4. Roads to wealth creation in the stock market.

Berkshire Bak Kwa!

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Fragrance is the first Bak Kwa manufacturer in Singapore to introduce the 100% USA Berkshire Pork Bak Kwa. Also known as Black Pork or Kurobuta Pork, Berkshire pork is prized for juiciness, flavour and tenderness, is pink-hued and heavily marbled. Berkshire Hogs grow at their own pace, with humane farming techniques and without the use of antibiotics or hormones.

Fragrance “Black Pork” Bak-kwa are being marinated in our special recipe including 18 precious herbs without any use of preservatives.

Each piece of our US Berkshire Pork Bak Kwa is individually vacuum sealed for freshness and is 100% made in Singapore with no preservative added

Get some for this Chinese New Year:
http://sg.churpchurp.com/AK71SG/share/fragrance

Tea with AK71: Mechanical car parks.

I am back in Singapore. Got home at 2am and slept at 3am. Woke up at 8am. Unpacked, read the news a bit and replied to comments here in my blog.

Thanks to everyone who sent me well wishes for my trip and apologies to those whom I did not manage to reply to till this morning.

I did not look at the stock market or my blog while I was on holiday in Japan the last 10 days or so. When I looked at my watchlist this morning, nothing has really moved. My portfolio's value has remained almost unchanged.

It is interesting that the HDB is thinking of introducing mechanical car parks for older estates where there is little or no space to build more car parks. I took some photos in Japan of such car parks.

In fact, land shortage is so chronic in Japan that they even have mechnical parking for bicycles!

Some families who own two cars but have only enough space at home to park one car also mechanised the space so that they can park two cars instead of one!

It will take me a while to get back to speed with life in Singapore but it is good to be home. :)

ASSI celebrates second birthday!

In another week, my blog will be two years old. Yes, time flies, doesn't it?

It seems like just a few weeks ago when I started this blog out of curiosity and boredom. Never in my wildest dreams would I have imagined how it would grow into what it is today.

I took this photo almost a year ago with my Samsung camera phone. Still a favourite of mine. Nice blue lights for Christmas!

I will be going away for a couple of weeks on another vacation. I will probably not be looking at the stock market or blogging in the meantime.

So, this is a big "thank you" in advance to everyone who has been encouraging me on my blogging journey thus far. Merry Christmas and Happy New Year!

ASSI is featured in NextInsight.

Today, ASSI is featured in NextInsight.

Two blog posts on my passive income generated from S-REITs this year have been republished. Comments from three readers as well as my replies are also highlighted.

AK71 is happy. :)

To see the article in NextInsight as well as to find out which three readers and their comments are mentioned in the article, click here.

Drum roll, please. ;)

REITs: Leasehold properties.

I have had quite a few exchanges with readers regarding REITs and their properties' land leases, if any. Readers who follow the comments section of my blog would be aware of this.

After a while, I realise we could just be running through the same points again and again. So, I am putting up my thoughts in a proper blog post written as a reply to a comment by a reader, Marti:

Hi Marti,

Yes, land leases should not be looked at in isolation. Like you said, if shorter leases are coupled with very high yields, they could still make great investments.

So, properties with shorter land leases if for any reason should be in great demand could command higher rents while freehold properties if for any reason should be lacking in demand could have lower returns. So, investing in the former might make sense as there is also time value of money to consider especially if the difference in yields is stark. We get back more money in a shorter period of time instead of a dragging out of much smaller payouts (although we could receive them forever).

So, if a property has say 15 years left to its lease but is able to generate a 20% return per annum, it would still make a fairly good investment. In situations where people feel that it makes more sense to rent than to own properties, this could come to pass.

I don't think an argument that REITs with properties with shorter land leases should offer higher yields to make investment sense is a persuasive one unless we assume that the managers do nothing to their portfolio of properties under management from IPO to the time their properties' land leases run out. How likely is that?

REIT managers will very likely divest older, less productive properties and acquire newer, more productive properties. They will very likely, conditions permitting, undertake development of properties and have AEI. Asset renewal keeps overall age of leasehold properties younger while development properties and AEI improve distributable income, all else remaining constant.

The issue of whether REITs have leasehold or freehold properties and their implications is not unimportant but I feel that it could have been given too much prominence in some quarters and by some people at the expense of a more holistic approach in the analysis of REITs.

We want to keep things simple but not simplistic.

Capitaland: Rising MACD in weekly chart.

I look at weekly charts when I am interested in the longer term technicals of a particular stock. I got more shares of Capitaland at $2.35 not too long ago. Its price hit a low of $2.25 so far today.

However, as my motivation for being invested in Capitaland is because of its cheap valuation, I am not too concerned with short term price weakness. Of course, I might do a bit of trading if I could make some extra money on the way.

With this in mind, I looked at the weekly chart earlier. I found that the MACD is rising as price weakens. A positive divergence.

Also, up till now, this week's volume has been relatively low compared to last week's. We need to see how things pan out tomorrow, the final trading day of the week.

Connecting the lows of the weeks of 22 August and 3 October gives me a trendline which suggests that there could be support at $2.16 if the counter should go that low in price this week or next.