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Saturday, September 22, 2018

"An additional $560k gone..." -- Calculating the dollar losses to investments and business

When I first started this blog years ago, it was meant to chronicle my journey, to be accountable to myself for my financial decisions.

Gradually, I have people telling me they learned from my blog. That kept me motivated, until I got busier and busier, and reduced the frequency of writing drastically, to the point I have almost not written much.

And... I'm glad that I have posted more in the earlier days. It's like I'm reading on my past self, how much more disciplined and stingy and scroogy I was than now.

So this blog post serves as chronicle for my future self to read and re-read again.

Instead of a blog post with a positive tone, this would take on a more negative tone.


More stock losses (~$29k)
I like to talk more about my losses in stocks, than gains. For me, it serves as a reminder of my stupidity, lapse of discipline, and how much more I have to think and learn. For others, it serves as a warning that the stock market is not here to feed you or give in to you, but a double edged sword that can slit your throat any moment.

Losing at Noble Group
After my past estimation that the estimated capital gain was near $0, more losses were chalked up. First, Noble. That was an additional ~$8k in losses. I have to admit, it was more of a gamble to buy. I cannot remember the price I got it now, but I remember having a minor profit after buying.

Subsequently, the management decided on a 10-for-1 consolidation, before the share price drop to its pre-consolidation price. In one fell swoop, this caused the share price to drop 90%. Failed gamble. Entirely my fault. I thought I did my homework, but obviously I do not know enough.



Losing at Hyflux Perps
An additional $21k might be lost here. It is a perpetual security, and I had put in a large amount initially because I thought not all would be accepted. I was wrong. I was greedy.

While there might be a remote probability of this being revived, I will probably choose to write it off for now.

That's $29k lost over the past 2 years, which is probably what some would save over a period of half a year to a year. Fortunately, dividends over the past 2 years would have covered a majority of this, but it is akin to a lost 2 years in stocks investing.

At Starhub/SPH
These two shares were once dividend darlings. At one point in time, I was over 100% in unrealised capital gains for Starhub, before dropping to a loss.

Right now, the paper losses for these shares are pretty low. Dividend received over the past 7 ~ 10 years have probably covered all the paper losses and the majority of the buy-in price.

At Accordia Golf Trust
This varies a fair bit. At about 10% below my buy in price, my dividends received would have covered the paper loss. Dividends as a form of exit strategy is still working for this counter, and the two counters earlier.

While I was extremely busy trying to run the tuition centre, as well publishing my books, taking care of a kid, etc, I had not looked at the market or any of the companies quarterly/annual reports at all.

More recent entries like OCBC, SembMarine and more SGX are doing ok. However, going forward, I will likely be not putting as much cash into the stock market as before, but keeping it in the bank to further boost liquidity over the next few years.


Tuition Centre (~$530k over 7 years)
I had quitted my job and taken over a tuition centre previously in 2012. I have always wondered what happens if I stayed in my engineering job... or if I reduce overheads by teaching tuition in other centres or 1 to 1 at students home.

In total, estimated overheads since 2012 to end 2018 amounted to ~$530k, of which half went to rental of premises. This was on top of the takeover fee. Would I have saved that amount had I gone around to teach? Or would I have earned less? I'm really unsure.

With that figure, I can't help but wonder occasionally if I would have hit a million SGD in liquid assets had I went ahead with a zero overheads business at the current age of 35. Revenue due to my lessons solely have covered majority of costs, while I underpaid myself. Granted, there were other tutors which helped in the overheads.

Of course, the nice way to put it is that
(1) These are all part and parcel of business expenses.
(2) This is an investment for the long run.
(3) It is a learning journey.

It's all a matter of perspective. Definitely, lots of priceless lessons were learned, some of which I would likely share over the next few blog posts. In fact, some of these lessons are applicable to the world of investing.


I'm still fortunate
With all these seemingly negative financial moves, I'm really fortunate that overall, my networth has still a mild increase, even with much increased expenditures.

And that excludes...
Car loan fully paid.
HDB loan half paid.
Got a whole life insurance

Counting my blessings, and ending the rant for now.

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