As the year 2009 comes to a close, it's time to review my progress and achievements for the year 2009.
Achievements: 1) Set up ExamWorld for students. 2) Achieved my first $100k in equities in October. 3) Built up my tuition income quite substantially, both from private tuition and from teaching at a tuition centre. 4) Set up Wealth Buch.
My total realised gains (dividends, realised gains, realised losses) from the stock market is around $9061.33 in the whole of 2009. My investment capital has grown from around $60k at the start of the year till $112k at the end of 2009.
On the relation side, I'm planning with my girlfriend to apply for the Hougang BTO flats in Jan 2010. If succeed, marriage shall be in the works by 2013.
The year 2009 has ended positively, both in my life and in the market. Let's wish for another boomz year in the year 2010. :)
Considering my first foray into property, although it's amidst the property fever.
HDB will be releasing information on build to order for Hougang in Jan 2010. Hopefully, 95% will be for first timers applicants again.
BTO for first timers are usually cheaper than resale prices... A look at the resale price index:
The previous peak occurred just before the 1998 Asian Economic Crisis. The current index is very near the previous peak, so it's giving me a dilemma if I should go for the purchase.
I did take note that the resale price index hike was probably due to buyers paying cash over valuation. I'm not very sure about BTO prices yet, but I'm with the impression that it is at a discount to valuation.
The details will be out on 5th Jan 2010, Tuesday.
As Mark Twain said, buy land, they are not making any more. In Singapore terms, buying land is currently out of my reach... But buying a living space the size of a pigeon hole is still within my means... Property plays usually entails leverage and much longer time horizon... It should be treated differently from stocks...
I'm still rather confused which wave count is the one. Below are my preferred and alternate counts:
In this count, we are still in intermediate wave A of Primary B. It has been 1o months so far, including the 5th wave.
My main concern is, if there's still a intermediate wave C of same time frame coming, then it would be at least another 10 months... Supposed intermediate wave B is 5 months, that would give us a total of 25 months for Primary B, which is a little too long in my opinion, given that Primary A took only 17 months. Because of this, the alternate count might be more valid.
In this alternate count, the 3 months long ascending triangle is labelled as a wave X instead of a wave 4. This count signifies further upside to come, which would lead STI to achieve greater than 61.8% retracement level of 296x...
These... are assuming we are indeed in Primary B corrective wave, and not Primary 1 impulse wave...
Given the uncertainty in wave counts, markets and economy, I will still stick to acquiring defensive dividend stocks...
On the shorter term... we might likely be in the midst of the 3rd wave of some impulse wave...
Would it be the 5th wave or the A wave of A-B-C-X-A-B-C, or neither? Only time will tell.... I'm not a fortune teller anyway...
An interesting paragraph from Stock Trader’s Almanac 2010
Santa Claus tends to come to Wall Street nearly every year, bringing short, sweet, respectable rally within the last five days of the year and the first two in January. This has been good for an average 1.5% gain since 1969 (1.5% since 1950). Santa’s failure to show tends to precede bear markets, or times stocks could be purchased later in the year at much lower prices. We discovered this phenomenon in 1972.
Wave (v) will not be equal to wave (i) now. The next probable targets would be 1.618: 2845.68 2.000: 2873.13 2.618: 2917.53 equals to wave (iii)??? ===> a bit weird.
Have to see how it goes... The CCI is at a high, MFI at a downtrend resistance, Stochastics are crossing...
STI might have some further uptrend, but it will likely be capped in this final wave. As we move on, the penny fever could get larger, the Bollinger Band slightly tighter, and the general masses starting to buy in larger amounts... That could be the signal of turn.
I finally achieved my first $100k in cash investments/trading funds 2 months back, excluding any unrealised capital gains or losses, and excluding my CPF funds/debts. It has been a long journey, starting from my days as a kid. $100k might not be a lot to some people, but it is a personal achievement, considering I have only started working for 1.5 years.
Back then, I did not think so much about achieving financial freedom. It was not my goal; my goal was to score well in exams as a student. However, I do not like to spend on new gadgets, new clothes, etc. It's just not in my nature to spend that much. My main expenditure was, and still is, on food, food and food! Yes, I like to eat :)
I have to say, I was lucky on my journey so far. I saved up nearly 10k by the end of serving NS... Savings from young plus army allowance, teaching tuition during army, and even doing 'duties' in NS for a token fee during weekends, all played a part in my savings. During my 2nd year in uni, I was lucky to get a 3 year scholarship for the rest of my studies. The scholarship is not as much as most of the government scholarships, but it is sufficient to boost my personal wealth.
Of course, I taught a little more tuition during my university days as well. I saved up during my industrial attachment, and managed to secure a scholarship for my student exchange trip to Germany, of which I spent little overall, nett of all the scholarships. My savings were put into fixed deposits, which yield nearly 3.3% in 2007. I was totally focused on my school work instead of the stock market. This sort of protected me from the down turn.
So when I graduated, I found myself with about $45k in savings which includes $36k of scholarship money, and excludes my $25k CPF debt for university fees which I decided to pay off slowly since the interest rate is very low. This is in May 2008.
Fast forward to Dec 2009.
Many things have changed. At the moment of post, I have a portfolio which costs me $101k. I have $10k in opportunity funds. My dividends stand at $460 a month on average. My job is stable. My tuition sideline is growing well.
The journey has been long and arduous. Hard work and actions played a major role. I dream, I have ambitions, and I take action to work towards them.
How should I proceed from here, how should I move on from here... That's my main question and concern now. It's becoming increasingly difficult to plan my life. Back then, it was easy... A student planning to get employment after graduation could seek a scholarship with a bond... Right now, I'm in the wilderness.... Should I stay on in the current company? Move on to new challenges in another company? Expand my tuition sideline by setting up a tuition centre? Or perhaps just set up some other business?
On the cards are also... Marriage... First property with my future wife... Any babies...
The burden on me is getting increasingly heavy. The rat race appears to be going nowhere. I'm starting to get a bit tired.
To achieve financial freedom, increasing income and cutting expenses must go hand in hand. There's no need to be a scrooge to cut expenses though. Below are 4 methods which we could employ to reduce our expenditures immediately.
1) Pay Yourself First
Many people like to spend first, talk later. The first thing they do with their monthly income is to spend before saving. Both committed and impulse expenditures come before everything else. Only what remains at the end of the month is saved. Usually, budgeted expenses don't work if expenses are placed before everything. Something else might just cropped up to cause you to spend whatever remaining you have, be it necessary or impulse expenditure.
The Pay-Yourself-First habit should be adopted. Take a fixed amount out of your income every month and put it into an investment or savings account.... then spend whatever is left. In other words, save before spending. As in the book "The Richest Man in Babylon", you won't feel much difference if you set aside a mere 10% of your income every month. Your life wouldn't be much different.
But doing this manually requires discipline! What if you don't have much discipline?
The easiest way to solve this problem is to make such savings automatic. The following could be done:
i) Get the bank to automatically transfer 10% of income into a savings account where it is not easily accessible.
ii) Buy an ILP/savings plan through your insurance agent and pay monthly through Giro.
Note: In Singapore, there's an option of buying the STI index through Philips Securities Share Builders Plan (SBP). This plan takes a fixed sum of money from your bank every month, and plough it into the index etf immediately. It's a form of dollar cost averaging.
However, if you have any debts, it would be wiser to take 10% of income to pay off part of the debt first, then the next 10% to savings/investment account. Finally, you can choose to spend the remaining 80% or save part of it as well. This is also a 'teaching' from "The Richest Man in Babylon".
2) Take charge of your expenses!
List down your expenses and study them. Try to identify where expenses can be cut. What may seem like a necessary expense could actually be cut at times; necessity is subjective sometimes.
You could be surprised that by doing so, you could eliminate expenses that over the long ter, will save you millions. Expenses that could be cut are
i) Impulse expenses, stuffs that we buy on impulse for instant gratification, after which would not make much difference to our lives
ii) Unnecessary expenses, i.e. buying things we do not really need, but buying just because it looks cheap.
With the power of compounding, the few extra hundred dollars you could save a month from reducing expenses will have a amazing impact on your future wealth. A $300 monthly savings would accumulate into >$300k in 30 years, assuming an average of around 7% p.a. The more you save, the more the power of compounding would work for you.
Try this out on an excel sheet to witness first-hand how powerful compounding such a small monthly could be.
3) Procrastinate in buying stuff
Before buying anything, always consider the opportunity costs. Do you think the stuff you are buying is absolutely necessary (subjective)? Would you regret getting it?
Consider your income as well. How long would you take to earn back the money you would spend on this stuff? Procrastinating here helps.
4) Buy discounts
We could save an additional 5% to 20% if we buy certain things only when there's a discount, or by buying in bulk, hence enjoying a mini economies of scale. Source for discounts if you can.
Example: I bought my protein powders recently with a nice discount to the selling price. I have managed to source for a consistent 8% discount after I discovered that one of my friends was the distributor of the products.
Another example: My mum buy clothes only after Christmas, after Chinese New Year and during the Great Singapore Sale since there are many discounts. She buys with a 6 months to 1 year horizon... Her new clothes (and mine as well) for the Chinese New Year has already been bought quite a long time ago, and stored neatly in the cupboard.
Note: The Chinese wear new clothes during Chinese New Year.
So, we have 4 simple ways here in which expenses could be reduced immediately. Although I mentioned procrastination in buying stuffs, do not procrastinate in cutting your expenses! Start now. It will only materialise if you take action immediately.
A series of hanging mans and shooting stars on the dailies. An early warning? The series of candlesticks seem to suggest that the market is unwilling to go up much further. I do hope it doesn't happen...
STI covered the gap yesterday at 2770 region. With Dow green, STI could likely open green.
Missed Starhill at 51 cents as I was busy at work. Not going to chase it at 51.5 cents yet. Shall see and hope this price reach again...
A long time since I really updated this blog on STI... Been really busy with stuff... :(
Anyway, my updated chart and counts
This chart builds upon the earlier count of the 3 months long ascending triangle, of which I counted as a 4th wave. To me, the 5th wave has started at the 2605 region.
Earlier, I made a mistake of pre-empting the market too early. I took into account the great bear line, which was breached without much effort. Also, the time frame of the 5th wave was too short.
The most recent count seems to fit the rules of Elliott Wave better. STI appears to form a rising wedge. It appears possible that the we are in an ending diagonal in the 5th wave of A wave of Pri B. This rally looks like it has some more legs, but the rising wedge pattern that is forming is indeed worrying.
In addition, MFI has been showing negative divergence since 29th July, and this divergence is continuing now.
Also, the signs I mentioned earlier that could signify a possible turn were 1) Bollinger Bands closing up 2) Penny stocks in play Both signs are now playing out as well.
When it looked 'obvious' that a crash is coming in October, it didn't as expected. Now, when it looks so obvious that a year end rally could be in place, could it not come as well?
The stars are starting to align themselves. Perhaps I should look into offloading some of my holdings soon... A need to rethink if I should really keep too many for long term dividends...
Finally, I have gotten in contact with a friend who is now staying in Australia on the recent purchase of David Jones building by Starhill Global Reit. The following is my friend's reply and analysis:
1. I must admit that I am no expert in properties, less so in Australia. but I will give you my personal view. You decide.
2. David Jones (or DJ as it is popularly known here) is a department store behemoth in Australia. They are like the Takashimaya in Japan. DJ stores are all in the heart of the city, or CBD in its major location. So, DJ the business and its associated entities are all quite well regarded in Australia for now.
3. That said, the David Jones building that Starhill Global Reit acquired is in Perth, so it is no where near the big 2, Sydney or Melbourne. Retail property development in Perth, as you would imagine, lags the big 2.
3a. If you have a short term view, it may not be as attractive as I think it will take a while before the commercial/retail property development takes flight in Perth.
3b. It will be attractive if you plan to hold your stock for a while. For instance, I have a longer term view on stocks ( e.g. I bought Apple stocks @ US$20 and sold at $90+ after split 2 years ago, but I held it for more than 8 years. Of course, on hindsight, I should have kept it as Apple is now about $200 ;-). Nevermind, tt's another story). Reason why it may be worth the thought if you have a long term view on stocks:
3b-i) Perth is one of the fastest growing cities in Australia. the property price median in Perth is amongst the highest, if not highest of all of Australia, even tops Sydney. it has taken a beating last year but it has recovered nicely recently). I think this will apply for commercial properties as well.
3b-ii) Western Australia is resource rich. It has all kinds of minerals imaginable, and also lots of gas and oil field not opened. Hearsays are the government will tender some of these out gradually over the next 20 years, so sustained growth is a given according to many in western Australia. This partly explain 3b-i. Also, because of China's insatiable appetite for resources to fuel its own growth, Australia remains a key partner to China, especially western Australia.
3b-iii) There have been lobbies by businesses in western Australia to get the state government to approve longer retail hours and also store openings on Sundays. The law still forbid this on certain trades to do so. This seems an oxymoron elsewhere. Even if it didn't happen this year or next, it will happen sooner than later. I think this is a forgone conclusion. So, the retail scene in Perth can only get better, imo. Here in Melbourne, there are already 24 hrs shopping like Kmart and Macdonalds. My fave roast pork noodle shop open for supper till 3am. http://www.watoday.com.au/wa-news/last-chance-push-for-extended-shopping-hours-20090929
4. At the macro level, property investors in Australia can do no wrong of late. The population explosion & strong economic outlook contributed to the continuous performance growth here. I think it is what prompted Starhill Global to take the plunge in the DJ building in Perth. DJ the department store will not go away. A quick research tells me that DJ has the tenure at the DJ building in Perth signed till 2032. So, it is quite solid in that respect.
5. So, that's all my 2 aussie cents , or 2.6 SGP cents worth. Hope it helps. As I said, if you plan to hold on to Starhill Global for a while, it may be worth the investment. If you are looking for a quick gain, it may not work to your advantage.
This is a friend I can trust.
So now, with my FA on the Malaysian and Australian properties settled, I think I will still go ahead with my purchase. My target entry price will be 51 cents now as it appears that Starhill is unwilling to break the double support to reach the previous low and 200 MA at 50 cents.
However, I might have to weigh my options between this and Cambridge REIT as well as Cambridge is currently offering a higher yield of around 12%.