Record of My Career Change

14th February 2016

Recently, I signed up with Udemy and subscribed to Prof Chris Haroun's  An Entire MBA in 1 Course. He kept emphasizing that you need to have passion with what you are doing, life is too short to be doing something which you do not enjoy. Personally, I feel that if you are suffering from Sunday evening blues, it is time to call it a day.

Today's Straits Times has a few interesting articles which spurs me to write this blog post.

Anna Vanessa Haotanto was mentioned to have amassed a portfolio of 1.5 million, achieved her financial independence at age 28 through her proficiency in managing assets in equities and properties. Currently, she is focusing her career on entrepreneur path to bring financial literacy to empower people. This is aligned with our vision as well. Peter achieved his financial independence at an age 29 through equities. I have embarked on this journey towards financial freedom. I hope to achieve my goal at an age of 40.

http://www.straitstimes.com/business/companies-markets/it-pays-dividends-and-more-to-know-your-stocks-well

In another article, it is about lawyers who are taking flight mid career and find success in other industries. Despite the fatty pay check, many lawyers change their career path due to long working hours and lack of ownership over their work. There are examples such as Ms Tay who is a lawyer turn entrepreneur who run the now-defunct nightclub Butter Factory, Mr Esmond Yue who used to get $10,000 per month started sushi restaurant Chikuwa Tei on the side for more than 1 1/2 years before running it on a full time basis, Kendra Liew 28 started an organic skincare business after working for more than 2 1/2 years of average 15 hour days, Ms Rebecca Chiu 29 started Soi 55 on sideline while juggling with her former lawyer job.

This is very inspiring. If lawyers who are working long hours can start their business on a sideline, this leaves me with no excuse. If lawyers can leave their high paying jobs for their dream career, this leaves me with no excuse. Recently, my friend who was in his early 40s passed away due to heart attack, leaving behind his family. Last year, my friend who is one year older  than me passed away due to a fatal accident. I feel that life is fragile and our time on this world is limited. If God request me to return to his heavenly kingdom tomorrow and ask me whether I have fully utilised my talent, I may not have the answer. I need to take massive actions, speed to market and execute my plans. I do not want to live life with regrets.

28th February 2016

I just came back from my business trip to Perth to attend the Australian Oil and Gas Convention. How do you know whether the oil and gas industry is adversely affected by the recent drop in oil price? I met two taxi drivers who used to work in the oil and gas industry. They were made redundant during the latest oil turmoil and lack of projects in Australia. One of them has been out of job for more than six months and by driving a taxi helps to pay his bills. It is an enlightening experience for me as I foresee this will happen to Singapore with just a matter of time. I just need to strap tightly and get myself ready.

5th June 2016

Another month passes by and the situation is getting more challenging as we see more subcontractors gone belly up, filing for Chapter 11. I need to take massive actions. Early May, I told myself that I need to seek an alternative path as my original plan may be derailed anytime if they give me the white envelope and escort me out of the building. I started my affiliate marketing business on 1st May 2016. The more I explore, the more I am intrigued by it. I started reading Scott Fox's Click Millionaires, Laptop Millionaire and Millionaire Fastlane. It is possible to create a lifestyle business because of the evolution of Internet. I have a personal good friend who has achieved this. Seeing is believing. This does not change my plan on my investment journey, it will only complement what I want to achieve.

15th April 2017

I was approached by Mr. E to join his company which is into Offshore Renewable Energy Industry. I was told at the start it is going to be a contract role to bid for EPIC work for offshore installation work for Foundations and Cables. I am familiar with offshore cables but not competent with Foundation especially monopiles. 

I have put a stop to affiliate marketing and e-commerce store to fully concentrate on investment. I want to focus on just one and make it a solid income stream before I can do others. There are a lot of possibilities in the realms of investment.

Euphoria and Depression

Shoe Shine Boy

In 1928 in New York City, John D Rockefeller was having his shoes shined. The shoe shine boy does not know who Rockefeller was, he started to give him stock tips. John took his shoe shine boy’s advice but decided that it was time to exit the market. He decided that if a shoe shine boy was giving stock tips then it was time to get out of the market. He did and it was the reason his family was able to survive the Great Depression, and became one of the richest in history.

During euphoria stage, there are many equivalent to the shoe shine boy, he can be the taxi driver or the auntie at the market selling vegetables telling all her friends to buy shares. It is important to improve market sentiments by observing the people around you. When many people are aggressive investing in stocks, it is probably time to get out.

Tulip Mania

In 1636, the tulip bulb became the fourth leading export product of the Netherlands, after gin, herrings and cheese. The price of tulips skyrocketed due to the speculation in tulip futures by people who never saw the bulbs. Through the process, many men made and lost fortunes overnight. Tulip mania reached its peak during the winter of 1636–37, with tulip bulbs changing hands ten times in a day. However, there was no deliveries made to fulfill any of these contracts. In February 1637, tulip bulb contract prices collapsed abruptly and the trade of tulips ground to a halt.

Sir Isaac Newton

One of the most intelligent man - Sir Isaac Newton lost equivalent to today's millions of dollars through the South Sea Company. The company was established in the early 18th Century and was a monopoly on trade in the South Seas in exchange for assuming England’s war debt. Investors loved the idea of this monopoly and the company’s shares rose.

In early 1720, he profited handsomely from his shares and he reinvested all his money on the expectation that the company shares would continue to rise. There was no warning on earth that can save people who are determined to get rich fast.

Newton added, “I can calculate the movement of stars, but not the madness of men.”

Refer to the above chart of the South Sea Company’s stock price, and Newton’s emotional journey from greed to happiness and then more greed and ending in despair.

2015 Shanghai Stock Market Meltdown

The Chinese stock market rallied more than 150% as the Shanghai Composite Index rose from 2,037 at the end of June 2014 to its peak of 5,166 in June 2015. Many naive investors shared the share journey as Sir Isaac were lured into the market near the peak. They suffered large financial losses. The stock market isn’t meant to be a casino. Its primary purpose is to help high-quality businesses to raise capital at a reasonable cost to bring innovative goods and products to the consumers. In efficient stock market, strong businesses and talented entrepreneurs attract capital and thrive. Weak companies which are not able to attract capital will be eliminated.

However, in this bubble and a moment of euphoria, shady firms and dishonest entrepreneurs exploited the market to raise capital. In the recent A-shares bubble, retail investors paid more than 400 times earnings for firms with no actual assets or sales. Perverse entrepreneurs sold a dream to investors and profit from their optimism and trust through offloading their personal shares at all time high prices in exchange for quick profit.

This turns the stock market into a wealth transfer mechanism from the massive poor to the handful rich with no positive benefit to the real economy.

Conclusion

Ken Fisher's book "Market never forgets (but people do)", history is an excellent guide for investor. Remember history and use it to profit and know when the market becomes too depressed, it is the time to become greedy and when the market is in a state of euphoria, it is time to get the money out.

Value Investing is the sure way to Wealth

In this section, we intend to provide a short course to value investment, the first step is to help you understand your present financial situation and your financial goals. We will need you to consider whether you are ready for value investing.

Introduction

They are two friends - Sara and Bo. Sara starts investing at age 25 whereas Bo only start investing at age 35. At the age of 45, Sara will have $251,282 more than Bo. At age of 65, Sara will have $671,824 more than Bo, achieving close to $1.6 m. This story tells us to start investing as early as possible. If you invest at a later age, you still can catch up but will require a larger amount of investment.  This is the beauty of compound interest.

From Investopedia, Compound Interest is interest calculated on the initial investment ("Principal") and also on the accumulated interest of previous periods of investment. Compound interest is "interest on interest", this will grow at a faster rate than simple interest. The rate at which compound interest grows depends on the frequency of compounding, the higher the number of compounding periods, the greater the compound interest. To illustrate how to harness this tool, Sara bought a share A, the share issues a dividend of $1 per share. This $1 ($1/share x 1 share) is re-invested into the share A. Every instances share A issues dividend, Sara will reinvest into the share to grow her holding in the company.

In simplistic terms and ideal world, you just need to buy shares in the right company, be patient and continue to reinvest dividend and money in a systematic approach.

This is the sure way to wealth.

What are shares?

Shares are issued by companies for the purpose of raising capital from investors. When you buy a company’s shares, you own a stake in the company. Shareholders are entitled to be paid a share of declared dividend. There are two classes of shares which are ordinary and preferred shares. Ordinary shareholders have a right to attend and vote at general meetings. A general meeting provides a platform for shareholders to engage the company's board and management to express your views and gather necessary information affecting the company.

There are broadly two classes of shares – ordinary or common shares and preference or preferred shares. In this guide, we use “shares” to refer to ordinary shares.

Ordinary shareholders have a right to attend and vote at general meetings on matters such as a major acquisition/disposal or the appointment of directors. A general meeting provides a forum for you to engage the company’s board/senior management and voice your views on matters affecting the company.

Shares are mostly traded in board lots of 100. If a share is priced at $1, you would pay $100 to invest in one lot of shares (excluding transaction costs).

Understanding the cost of investing in shares 

In Singapore, most of the brokerage firms charged a minimum fees between $18-25, under $50k is approximately 0.28%, between $50-100k is approximately 0.22% and over 100k is 0.18%. For those who intend to trade for quick bucks, there is another hurdle to overcome, you need the stock price to go up enough to cover for the brokerage commission in order to first break even before you can make profit. Therefore, you will be benefiting your broker if you trade very often, making him rich first before you. A highly recommend read is "Where are the customers' yachts?".

Take profit 03032016

Due to recent letter from my big boss to further reduce headcount, I am terrified. I am fully invested and do not have much cash in the bank.

Today, I sold 29,000 of ThaiBev at 0.76, 5000 SingPost 1.53 and 1000 Singtel 3.8. I took back about 33k cash. This should tide me through for a year. Very unfortunate but I need to see my stocks soar and I need to let go some of the shares.

5/2/2017
Till date, thank God I still manage to keep my job and reflecting on my portfolio. Thaibev went up to S$1 before settle back at S$0.8+. 

It was unfortunate to sell ThaiBev.

Lesson learnt, I wish that I never ever need to sell a stock.

Regroup and rethink

It has been a long week as I was away on a business trip since Tuesday till today. I took the red eye flight out on Saturday morning and I reached Singapore with a headache. I did not get to rest well throughout the flight.

I believe it is time to look at the overall STI index first and evaluate my strategy.

Short term wise, I see the STI deflecting downwards after 2700 if it fails to break the downward resistance. All chartists are using the same chart. It is up to oneself to believe in what will happen. If it fails to recover above 2700, I should take profit from some of my existing counter and wait for the next entry at around 2300.

With respect to Hang Seng, I see some consolidation and at best recover back to 20000. Hong Kong had recently released its budget for 2016 and it seems the economy is losing steam due to the big brother China.

Next let's zoom into the individual stocks which I intend to let go on a short term basis. GLP I see it ascend back to 1.77 forming the cup shape. Fundamentally, this company is seen as burning cash and cashflow is slightly back into the black. I see this as recovering to $2.00.

My Singtel's average price is $4.09, I do not see the stock breaking even as presently the price is at $3.7 and there is a downward resistance on the stock.

15/2/2016 Further acquisition of Hong Kong shares

Today I bought 10000 728.hk China Telecom at HKD 3.48 and 500 388.hk HKEX at HKD 167.3.

I bought IBM at 118.7 on last Friday, I realised that I do not have sufficient USD to acquire the shares. I need to trade this by this week. Futures are up, maybe I can hold the horse for a while longer.

5/2/2017
If I have enough money to hold the IBM shares, I will have made close to $60/share. 

Power Assets change to SingPost

I bought 5000 SingPost at 1.35 with the rationale of monopoly business model in Singapore, growing infrastructure with e-commerce and solid process.

I intend to sell out 2000 Power Assets to accumulate SingPost.

I will start to keep HK Tracker Fund and MTR for child's education fund.