Pay for memberships that benefit (who) financially?

Reader says...

I have been following your blog since last year.

As a middle age self employed who’s asset rich and cash poor, I have been enlightened by your simple strategies on how to save money.

Thank you for the kind sharing!





The matter that I need advice :-

As someone who’s very good at spurring the economy I sometimes buy without much thinking.

So recently I paid a small amount (of money) to join a certain membership. Lazy by nature I thought it will be nice to follow someone whose good at what he’s doing.





So there after again I paid some more money to get another set of stock picks mainly the reits.

Last couple of weeks again they tried to sell another membership which members will get access to the CEO’s portfolio which has been widely publicised cos he’s putting his own money in.






Now this membership will cost much more than the earlier ones and as someone lazy by nature I’m thinking if I should join in and just follow what he’s buying.

But this time amount is big ($1999 for one year or $2999 for 2 years), I wonder if you could share with me your view?

AK says...

All I will say is that I have never paid any money to join any such membership.

The one membership which I like which gives me lots of benefits and which is FREE is my CPF membership.





I know.

Bad AK! Bad AK!

Good luck. ;)





Maybe, AK should do that too. 

Each reader pays me $1,000 to know what I buy and sell in the stock market. 

Then, I would have a lot more money to invest with! 

Wah! Mai Tu Liao! 

Related post:
Financial security in Singapore.

When would I invest in ESR-REIT again?

Reader says...
This is my first email to you although been following your blog for about 3 years.

You are an inspiration to me cause although you are 1 year younger than me but you have already achieve financial freedom long ago.






Understand that you have been blogging about not comfortable with ESR and VIva REIT but you also mention before an investment also depends on the price.

So I would like to find out from you at what level will you consider investing in ESR REIT.

Vanishing in less than 15 years.

AK says...
Absolutely no interest.

The whole deal is a godsend or a lifeline for VIVA (which is a ticking time bomb) but rubbish for ESR-REIT.

Yes, I think ESR-REIT got the shorter end of the stick and the shareholders paid for this and will continue to pay for it.






A big chunk of VIVA's portfolio have land leases which will expire within the next 15 to 20 years (see related post #2 at the end of this blog).

Another big chunk of their assets would see a drop in income as they convert from master leases to multi tenanted buildings.

Income support for UE Bizhub East is set to expire later this year.






ESR-REIT will be taking over this horror of a baby.

It would haunt them (mostly the common shareholders of ESR-REIT) later.

Of course, having said this, if there should be a big crash in price, maybe, then, I might take a look. ;p






Related posts:
1. Merger of ESR-REIT and VIVA.
2. VIVA more attractive with 9% yield?

Singapore Savings Bond short term still more rewarding.

I blogged about the Singapore Savings Bond (SSB) earlier this year and shared how it made sense for me to park some of my spare cash in it.

It is considered near money (with no penalty for early withdrawal) but still not as near as money in a savings account or stored in a moon cake tin at home.

Who stores money in a moon cake tin at home, you asked?

Alamak, if you asked that, you must be new to my blog.

OK, I know.

Bad AK! Bad AK!

Easy to apply with internet banking.

Anyway, I did not put in the max $100,000 which each Singaporean is allowed to have in the SSB earlier in the year because I suspected that with interest rates rising, the coupon could be higher later on.

It was 1.55%.

Now, 6 months later, it is 1.72%.






After receiving a chunk of change from reducing my investment in ComfortDelgro, I want to lock up some of the gains in my war chest.

So, I will be putting some money in the SSB again.

With this, still, I would not be maxing out the allowance of $100,000 per Singaporean.

The closing date for application is 26 June 2018.

Plenty of time.






For more on why I like the Singapore Savings Bond now, read the related post below.

Related post:
Singapore Savings Bond (Jan 2018).

Investing in ComfortDelgro and locking in gains.

I was accumulating at close to and under $2.00 a share amidst very bearish sentiments, having decided that ComfortDelgro's balance sheet was robust and that its dividend was sustainable even if the entire taxi business was shut down.


The last time I bought more at under $2.00 a share was in 1Q 2018.






It should be quite clear that my decision to invest in ComfortDelgro was mainly for income but, of course, I am not averse to doing a bit of trading either.



So, if I were to sell some of my investment in ComfortDelgro, what prices would I sell at?

Ideally, we want to sell at prices we would not buy at and not at any price Mr. Market threw at us because we did not have a choice.

When I shared my incomplete analysis of ComfortDelgro many months ago (see related post at the end of this blog), I said that a 13x PE ratio would bring us close to crisis valuation and that when Mr. Market was feeling more optimistic, the company was valued at about a PE ratio of 20x.

So, we would not be wrong to think that somewhere in the middle we would find ComfortDelgro's approximate fair value.






Off the top of my head, using EPS of 15c, we get the prices of $1.95 (13x PE) and $3.00 (20x PE) a share.

Therefore, down the middle, at around $2.47 is what should be a pretty fair price, using these assumptions.

Remember that I also used an EPS of 14c which I estimated in a scenario in which the taxi business remained challenged.

With this, we get the prices of $1.82 and $2.80 a share which gives us a middle or fair price of $2.31.







So, depending on what we believe to be the case, selling ComfortDelgro at between $2.31 to $2.47 a share looks to be a reasonable decision.

Of course, then, selling any higher than $2.47 a share would be sweet.

As the share price rose, the MACD, a momentum oscillator in charting (i.e. TA) struggled and churned but did not form a higher high.

Another momentum oscillator, the RSI, tangoed with the overbought line.







So, although the share price rose, the momentum oscillators suggested that Mr. Market was hesitant to buy at higher prices.

This contributed to my decision to take some money off the table.






I reduced my exposure to ComfortDelgro by almost half at $2.47 a share and locked in approximately a 25% gain.

It has been a while since the last time I traded in stocks.

Yes, I have been pretty lazy as a trader in my retirement.






I will most likely hold on to my remaining investment in ComfortDelgro for income unless Mr. Market becomes even more bullish.

If Mr. Market should go into a depression again, reducing my investment in ComfortDelgro, I will have more funds to take advantage of such a situation.








ComfortDelgro is no longer the undervalued proposition that it was when I was accumulating.

Related posts:
1. Analysis of ComfortDelgro.
2. Massive shorting of ComfortDelgro.