How to stop worrying whether we in bull or bear market

[T]hink of sectors you’d want to be invested in whether markets turn bearish or bullish”.

FT’s Adventurous Investor aka David Stevenson

Now this is the really difficult part. He advised investing in the healthcare.

Anything else?

2022 was a terrible year for bonds

Further to Bonds in 2023: a roller coaster ride, more on why I’m an equities person.

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Why millionaire PAP ministers should focus on rent costs

Came across an interesting discussion on the monetary effects of having to wait six years for a BTO flat.

In my case, rented a HDB flat from a condo-residing church friend while waiting for BTO. Kid was born in my friend’s flat. All in all, I invested $80,000 in rent all those years, would have been more if he didn’t offer a friendship price. Even if I were to sell my BTO, I’d make $120,000 more and minus the rent and housing loan interest, I don’t actually earn.

FB discussion

He’s saying, “Asset appreciation? What asset appreciation?”

He went to say

if one has to wait for 6 years for bto to be completed and go into rental. One would have to spend almost 200k for the 6 years of rent. And that figure is very Conservative given current market.

FB discussion

Another S’porean added

rent is now hitting 4.2k even in far flung places like Punggol, so that is over 300k assuming worse case scenario of a 6 year wait. Even if MND can bring the wait down to 3 years, this is 150k flying way from a couple’s nest egg and not coming back. I am not keen on the idea of young couples having to do this, because that money is honestly better spent on their kids. A dollar spent there benefits not only them, but the nation at large much more.

FB discussion

Our PAP millionaire ministers better take note that time is money, There’ll be a lot of unhappy S’poreans if the PAP doesn’t change their policies on when and how flats are built.

They are barking up the wrong tree by focusing on the “subsidy” BTO owners (and others) get. Focus on getting the BTO flats into the hands of voters ASAP.

 

Buffett sayings

A now ex-Tai Tai (she now poor) because she disagreed with these tenets. She can conduct a masterclass on how to to marry an elderly ATM machine and end up poor. How tai tai got poor: Tai tai forgot this amd Tai tai keeps losing money

Bah Humbug: Merry Christmas and a Prosperous New Year

The real world is far away from pre-Covid-19 levels

And we have serious inflation problems resulting in central banks raising rates which in turn means global recession.

But in S’pore, our PAP millionaire ministers die die want to raise GST rates from 1 January 2023.

Brave new world: higher interest rates and scarcer capital

One of the world’s better investors,  Howard Marks of Oaktree. thinks interest rates will not come back down to the levels of 2007 to 2021. He’s surely is going to invest on the basus of higher inflation and higher interest rates? But he says, “Oaktree’s investment philosophy doesn’t prohibit having opinions, just acting as if they’re right.”

Check out these East Asia Income Investment Trusts

There are three London-based investment trusts that invest in East Asia that have very decent long term records for increasing dividends. See below

One is trading at a huge discount to NAV, compared to the other two. That may be a warning sign. All three are managed by pukka fund managers.

LOL: Millionaire PAP ministers are really looking after the plebs

Look at this and you’ll see that with the exception of the Chinese banks (Communism at work?) and DBS (Remember that POSB was the people’s bank?), at least $10,000 is needed for FDs. Quite a number (including OCBC and UOB) have a minimum of $20,000.

So it’s nice to know that the millionaire PAP ministers are helping the plebs to get good interest rates on fair terms via Singapore Savings Bonds.

Plebs only need to invest $500 (Same like the Commie bank, ICBC. Need $1000 at DBS) in the the Singapore Savings Bonds. The minimum one can invest in SSBs is $500 — and this can increase in multiples of $500 — but the total amount of such bonds one can hold at any one time cannot exceed $200,000. (Btw, in 2020, when the interest rate on SSB was 0.96 per annum for the first few years and S’pore was being locked down and I got very lucky, I applied for 200k and was filled. It can’t happen nowadays. The allocation is 10k nowadays. Fine by me as I don’t have $200,000 needing to find an urgent home. Btw2, I redeemed the lot in batches in 2021 and very early 2022.)

Returns on the Singapore Savings Bonds hit record highs for the second straight month, with the latest December issue offering a 10-year average return rate of 3.47 per cent. Better still, the first-year interest rate of 3.26 per cent is also the highest ever, beating the record set in the previous issue. I’ll be applying.

And there’s more:

Safe and flexible bonds for individual investors. Enjoy returns that increase over time and redeem in any month without penalty

https://www.mas.gov.sg/bonds-and-bills/Singapore-Savings-Bonds

“[W]ithout penalty”: remember that FDs can only be “broken” by foregoing the interest. But SSB only have a $2 fee when redeeming. Interest is paid up to redemption date. Pretty fair.

More at https://dollarsandsense.sg/complete-guide-buying-singapore-savings-bonds/?

Do remember that the govt is tightening money supply via SSBs and other interest-bearing securities. this to to try to keep inflation in check. There’s a reason for its generosity. But its also keeping the banks honest.

But never say can lose money

People like these guys should be regulated.

Next Level Options Masterclass

The Singapore Savings Bonds in November offer 3.21% returns. Should investors buy this?

Not until they discover this shocking number:

According to the MAS, Singapore’s inflation rate was 7.5% in August 2022.

If your investments produce 3.21% returns but inflation eats up 7.5%…

Are you actually growing your wealth?

Most investors are losing net worth over time…

Without even knowing it!

Here’s the truth:

For investors who want to grow their portfolio, they need to start shifting their capital into assets which produce higher returns.

In the Next Level Options Masterclass, we show you the ONE asset we prefer over investing in bonds.

It’s not property. It’s not stocks. It’s also not digital assets.

Click on the link here to discover what this little known, high-performing asset class is…

https://rebrand.ly/e878c1

[Disclaimer] We make no representations, warranties or guarantees, whether expressed or implied, made to the contents in the program is accurate, complete or up-to-date. Past performance is not indicative nor a guarantee of future return.

We are an Education company and hence is NOT regulated or licensed by MAS as we do not provide investment services.

All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone. You are recommended to seek advice from a professional financial advisor if you have any doubts.

Better than CPF rate

Ordinary account that is.

S’pore Savings Bond better for amounts up to $10,000 (likely to get full allocation). Coming issue pays 3.08% for first year. Last day for applications 26 October 2023. $2 to apply.

And if want to redeem $2.

US treasuries yields at record highs

Yields on the benchmark 10-year US Treasury climbed above 4.25% for the first time since June 2008 rising as much as 0.05%age points to 4.272%, while the two-year US Treasury yield climbed as much as 0.03%age points to a new 15-year high of 4.639 per cent.

Equity markets are queasy.

HDB tells us flats are juz affordable or unaffordable?

HDB posted this infographic on FB without comment. Is some subversive working in the HDB (and who does not wish the PAP well) illustrating how unaffordable or barely affordable are HDB flats?

ISD must investigate

“Cost of flat up by 44 times while household Income up by 9 times between 1971 & 2021.”.

Jialat says DBS

Income not keeping pace with inflation for four in 10 people: DBS study

https://www.straitstimes.com/business/economy/income-not-keeping-pace-with-inflation-for-four-in-10-people-dbs-study

Sadly the ST report is full of propaganda attempting to make the bitterness sweet.

But the u/m graphic from the the constructive, nation-building ST Lite is shocking. I’m sure the editor will be asked to explain why he was less than constructive, and nation-building.

And there’s more from ST Lite

• A study by DBS bank has found that overall monthly expenses for its customers grew 22.2 per cent in May 2022 compared to May 2021 
• This was twice that of their income growth of 11.1 per cent in the same period
• The study also found that income for 40 per cent of its customers grew less than 5 per cent in the past year
• This was slightly below the country’s average consumer price index inflation of 5.2 per cent in the first half of 2022
• A senior economist said that inflation will go on for the next two to three years and the lowest-income group will continue to feel the strain if it stays high

https://www.todayonline.com/singapore/singaporeans-spending-more-income-growth-inflation-dbs-bank-1958226?fbclid=IwAR1DgfuXmJ1spJkRHQ_ldlFjoExRbKs8Zr1WAvO_MzSplWBCq91aMBUF0Rs

And die die GST must go up?

Btw, the piece from ST Lite reminds me of Wormtongue. He turned on his evil master, killing him. He couldn’t stand the abuse he was getting.

GST rise: Our millionaire ministers should remember/ Brave man

Further to What PM doesn’t understand about GDP and GST,

I think our constructive nation-building media is really trying hard to be constructive and nation building with

The Big Read: Singapore households, businesses not spared from global inflation storm as GST increase looms

• Inflation is set to be a key challenge in 2022, as households face rising prices on multiple fronts, ranging from food to electricity
• Business also face higher freight fees, manpower costs due to border restrictions and supply chain disruptions due to measures to contain the spread of Covid-19.
• Prices look set to go up even more with the impending increase in GST from 7 per cent to 9 per cent 
• MPs say grassroots initiatives are up and running to help households, while economists point to possible policy levers to mitigate the impact of rising living costs
• Families facing the brunt of inflation have started belt-tightening, while businesses are looking at raising prices

https://www.todayonline.com/big-read/big-read-singapore-households-businesses-not-spared-global-inflation-storm-gst-increase-looms-1785761

Brave editor.

“Pilgrim’s Progress, the S’porean way”: financial roadmap until time to meet LKY

When I saw the above, I couldn’t help but think of The Pilgrim’s Progress from This World, to That Which Is to Come, a 1678 Christian allegory written by John Bunyan and this map illustrating the pilgrim’s journal to the Celestial City i.e. heaven.

To guide S’poreans through life, read Singaporeans’ Roadmap: Key Personal Financial Schemes And The Decisions You Have To Make At Every Age In Singapore: https://dollarsandsense.sg/singaporeans-roadmap-key-personal-financial-schemes-decisions-make-every-age-singapore/?fbclid=IwAR2sQ56-f6R0nZA9axFctlZlvGpGCBcliqSe6jrQ6b1KdKT6c-d5VTLLQxs. The map’s a summary of the article.

Our very own Pilgrim’s Progress.

Energy, food driving inflation

Americans are paying close to 60% more to fill their tanks than at this point last year. And a Thanksgiving dinner will on average cost 25% more than in 2019, a Financial Times analysis shows.

Relax inflation isn’t that bad

Singapore overall inflation rises to 3.2% in October, highest in more than 8 years

…

The uptick reflected stronger private transport and rental costs, in addition to the higher core inflation, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) on Tuesday (Nov 23).

Core inflation, which excludes rents and private road transport costs, climbed to 1.5 per cent last month from 1.2 per cent in September. The increase was due to rising services and food prices, and a smaller decline in the cost of retail and other goods.

It outdid the 1.3 per cent median estimate of analysts Bloomberg surveyed. 

https://www.straitstimes.com/business/economy/singapore-overall-inflation-rises-to-32-in-october-highest-in-more-than-8-years

STI fell a bit (0.3%)

BUT

Save the planet from warming? 1930s depression needed

Don’t believe me? Juz look at this chart?

Well as this investor is 66 and has no children or grandchildren, he’d rather the world heats up after his death.

Btw, if you got grandchildren, read the link below:

What would different levels of global warming look like?

A rise of a few tenths of a degree will have big consequences for the planet

https://www.economist.com/the-economist-explains/2021/03/30/what-would-different-levels-of-global-warming-look-like

Good news for the PAP

Young S’poreans are optimistic about their future prospects.

Interesting table. Compared to young people in other developed countries, younger S’poreans are pretty optimistic about their future.

What this means is that young S’poreams unlike their counterparts in the the West believe that the governing party can deliver the good life.

Wonder how many S’poreans can find $1600 in an emergency?

Recently I read that more than a quarter of British households could not find £850 ($1,568) in an emergency, the UK stats authority reported.

Any idea about the stats for S’pore anyone?

Doomsters at work, frus bulls making $

Doomsters at work

Buy the dips

There’ll be food riots in 2021

 Corn prices are up 45% from a year ago to US$5.55 a bushel and soyabeans are now 56% more expensive to US$13.71. Wheat is only up 16% while rice is 27% higher.

Tai tai forgot this

Remember Tai tai’s luck runs out, heading for Woodbridge?. She took a big loss on the SPH shares her then 50-yr old husband gifted her on their marriage when she was a 25 kampong gal. She bot DBS shares and then sold DBS shares because she tot UOB paid better dividends (it doesn’t, DBS pays dividends quarterly, UOB semi annually) only to see DBS shares fly.

I tot of the arrogant, clueless tai tai when I read this

It is not about having lots of money, it’s about knowing how to manage it.

Private banker quoted in the FT

Btw, the tai tai told her “best” friend she knows to manage money better than professional managers when said friend suggested she made a mistake in not entrusting her $ to a professional fund mgr.

She said that they cost $ and only buy blue chips. She said she also know this.

When asked why then did she didn’t diversify out of her SPH shares given to her on her marriage by her husband, even after it started losing $ on its media operations in 2017, she said she was confident the govt would “help” it out.

PAP govt played her out.

Tai tai like this? Perception Is Reality: The Looking-Glass Self, https://lesley.edu/article/perception-is-reality-the-looking-glass-self#:~:text=The%20looking%2Dglass%20self%20describes,worth%2C%20values%2C%20and%20behavior.

Bitcoin: born loser tales

No, not because of the price volatility (now at US$39,000) after it hit a speed bum.

BBC reports that about US$140bn worth of Bitcoin is lost or left in wallets that cannot be accessed, according to cryptocurrency-data company Chainanalysis.

Here’s a tragi-comic real-life story about programmer Stefan Thomas who forgot the password that will let him unlock a hard drive containing US$240m worth of Bitcoin.

Mr Thomas, who was born in Germany but lives in San Francisco, was given 7,002 bitcoins as payment for making a video explaining how cryptocurrency works more than a decade ago.

At the time, they were worth a few dollars each.

He stored them in an IronKey digital wallet on a hard drive.

And he wrote the password on a piece of paper he has lost.

After 10 failed attempts, the password will encrypt itself, making the wallet impossible to access.[My note: he has two more chances]

https://www.bbc.com/news/technology-55645408

And an ever more tragic and funnier story about another born loser. In 2013, a Welsh man desperately searched a landfill site after throwing away a computer hard drive containing 7,500 bitcoins.

At that time this was worth more than £4m, this would now be valued at more than £250m (US$182m).

Meanwhile in Cynical Historian: What the Dutch colonialists in Indonesia learnt from Raffles: Raffles moved fast and broke heads. Given LKY’s track record, maybe he learnt his style of govt from Raffles?

Time to buy British?

The FT 250 is more UK centric than the FT 100 because the latter has int’l miners and int’l conglomerates.

Achtung: Buying the dips in low yield world could endanger financial health

The Nikkei closed on December 30 above the 27,000 mark. It was the index’s highest close since 1989. But the index is still 41% below its 1989 peak.

If valuations of risk assets only required ultra low interest rates then Japan would have been in a raging ‘bull’ market, someone commented in the FT.

Must have lessons for us investors in S’pore market about buying the dips.

Sounds like entry price, profits growth, corporate governance and financial engineering matter. LOL.

Sounds like an extreme example of reversion to the mean too

Inflation, what inflation? Why Bitcoin is flying?

So it’s not surprising that serious investors are joining the chase for Bitcoin . Remember the supply of Bitcoin is limited, unlike that of gold, the usual inflation hedge.

Even DBS is trying to get onto the Bitcoin wagon: https://www.channelnewsasia.com/news/business/singapore-bank-dbs-launch-digital-exchange-virtual-currency-13743466

I’m not using this Big Brother Service

S’pore residents can now view financial information from various banks in one place, with launch of new tech structure

Read more at https://www.todayonline.com/singapore/spore-residents-can-now-pool-financial-information-various-banks-one-place-launch-new-tech

The authorities on Monday launched a tech infrastructure called the Singapore Financial Data Exchange (SGFinDex). It uses SingPass — the national passcode system for e-government services — and a centrally managed online consent system that will help individuals access their financial information across different government agencies and participating financial institutions. 

Deputy Prime Minister Heng Swee Keat (The guy with THE plan for his East Coast GRC which many residents didn’t care for: the PM in waiting nearly lost the GRC winning only 53.4% of the votes) said that the process to consolidate finances is often onerous. But this new underlying technology allows data from each source, which is encrypted, to be transmitted through SGFinDex without being stored, Singaporeans and foreign residents with a SingPass will be able to view their consolidated financial information.

Whatever, as I understand it, whoever is providing the user with the consolidation can see the data. This means the banks and MoneySense (A Singapore Government Agency Website) can see the consolidated numbers, if I’m correct.

I don’t see any advantage for someone like me. It’s so easy via e-banking to see how much $ I have in my various accounts with different banks. And transfer.

I also don’t want any one bank or Moneysense to see how rich I am to suka suka market to me. I assume that if it wants to, the ISD or the police can access details of all my accounts but that’s a different matter. That’s the price of living in S’pore. But I don’t have to make things any easier for millionaire ministers.

Riding the melt up tornado

Goldman Sachs said it believed the US S&P 500 equity index would go as high as 4,300 by the end of next year: 20% more than present level.  But some of its clients balked at the 4,300 target, arguing it should be even higher. others say 3800, 5% more

But some felt it was too bullish, unnerved by the potential for rising inflation expectations push up government bond yields and in turn chip away at equities.

Jeremy Grantham a well respected fund manager thinks a melt up is happening: markets have smashed past the “full bull” stage and are in a late-bubble “melt-up” phase that rivals the two biggest bubbles of the past century.

Btw in late 2019, he was predicting a melt up this yr. When the market fell in March 2020, he looked silly.

Tai tai’s luck runs out, heading for Woodbridge?

DBS shares are really doing well while UOB’s shares juz doing OK reminded of the misfortunes of a tai-tai.

Earlier this yr, a 50-something tai-tai I know sold her DBS shares and bot UOB shares because she said UOB paid more in dividends. The brainless twit (not that brainless because when she was in her 20s, she married an ATM twice her age) didn’t realise that DBS pays its dividends quarterly, while UOB pays its dividends half yearly.

To be fair to her, she was most probably also shell-shocked when she did the switch because during the market collapse in March, she finally sold SPH shares that her ATM machine gave her many yrs ago and bot DBS shares in their place. She remained more faithful to her SPH shares than to her ATM machine: she’s estranged from her hubbie for years.

Her latest problem: the ATM machine stopped paying out.

She’s trying to stay sane by insisting that men still desire her and that she’s a savvy investor not to have sold her SPH shares until recently. Talks of her guardian angels, despite not believing in God or Gods.

Time to be warded in Woodbridge. She may not have the $ to pay for private treatment.

53% of households as stupid as Tan Kin Lian?/ How to help them

2nd Minister for Trade and Industry, Dr. Tan See Leng rightly encouraged households to consider switching to fixed-price plans offered by electricity retailers under the Open Electricity Market (OEM), as fuel price fluctuations are expected to continue into the months ahead.

From the comments online and the fact that the majority (53%) of households have not switched out of Singapore Power (SP), it is apparent that many people are still skeptical, ignorant, or confused about the benefits of switching to a retailer under the OEM.

One of the chief complaints is why SP can’t just match the pricing of OEM retailers. There are good reasons why SP is not in a position to match the pricing of OEM retailers but I’ll not go into the matter because it’s a very technical and dry subject, involving boring stuff like competition, price discovery and SP’s role.

Whatever, these comments 53% remind me that presidential candidate TKL (Remember he lost his deposit and KPKBed about the loss) a few yrs, KPKBed that he was confused about choosing an OEM retailers and he wondered SP couldn’t just match the pricing of OEM retailers.

As an educated man (OK, OK he only finished sec4 in RI and has an actuarial qualification) TKL was soapboxing. As I said above, there are good reasons why SP can’t do this.

To save the 53% households and in particular TLK from their stupidity, these households should be assigned a retailer other than SP to get the better rates. Who they get is the luck of the draw and they’ll be given six months to move to another retailer without penalty. Actually all the rates are pretty close,

Btw, what some really smart S’poreans did: Some householders laughing all the way to the bank. Even with the recent price rise, they are ahead.

Related post on the rates juz before Covid-19 when MSM was spreading fake new: Why MSM no kanna POFMA for spreading fake news?

Finally, thinking about it TKL and his campaign manager, one Goh Meng Seng, are really dumb. If 53% of households are as stupid as he is, he should have been elected president. Happily he and Meng Seng can’t organise as orgy in a brothel.

Got six properties but driving Grab to earn $?

Give me a break pls from this kind of BS, constructive, nation-building MediaCorp.

OK. OK the properties are M’sian, not S’porean but this sounds like a lot of bull.

It reports

Retiree SK Quek leases five of his six properties in Malaysia and used to put up two of the houses for short-term rental on Airbnb.

And while he has no issues with collecting rent from his long-term tenants, the 64-year-old who is now driving for Grab in Singapore said he loses about RM8,000 a month — his usual earnings from Airbnb — for not being able to list his properties.

Read more at https://www.todayonline.com/singapore/sporeans-homes-malaysia-limbo-due-border-restrictions-some-paying-double-living-costs

Can’t stop laughing is disbelief that a six property man (I assume he also has something here even if it’s a three room HDB flat) is driving Grab to earn a living. Must be BSing about his properties. What do you think?

As for the other S’poreans mentioned in article KPKBing that they got two properties etc to maintain, they should sit down and shut up. Btw, I’m sure pre Covid-19, they were sneering at S’poreans who didn’t stay in M’sia and commute here regularly.

They made their choices, and gotta live with the consequences. But so typical of Singkies: vote for PAP but then KPKB about kanna Pay And Pay. Reminds me of what the Mexican bandit leader said in the Magnificent 7 about the peasants he regularly shook down: “If God did not want them sheared, He would not have made them sheep.”

Likewise it’s something the PAP could say, but hasn’t yet.

Why we need to know PAP govt’s projected investment returns and why it’s a secret

Look at this table

It shows that its assumed return targets are BS. Fyi, Calpers is the California Public Employees’ Retirement System, a major global investor. As of 2018, the agency had U$360 billion in assets.

Before I go further, some defining of terms. From shumething I wrote in 2018

[O]ver the last 10 years, Singapore’s net investment returns (NIR) contribution (NIRC) to the Budget has more than doubled from S$7 billion in FY2009 to an estimated S$15.9 billion in FY2018.

…

Waz this NIRC and NIR BS?

NIRC consists of 50 per cent of the Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings and 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.

In other words, we spend 50 per cent of the estimated gains from investment, and put the remaining 50 per cent back into the reserves to preserve its growth for future use.

Associate Professor Randolph Tan is Director of the Centre for Applied Research at the Singapore University of Social Services, and a Nominated Member of Parliament.

Under PAP rule will S’pore become like UK or Venezuela?

Now to why I think we need to know PAP govt’s projected investment returns. In 2016, a reader asked

A Qn: The NIR used for the budget is projected returns. If the projected returns did not materialize, then how? It seemed like insurance agent selling us a policy on projected returns which never materialize.

Am I comprehending the NIR correctly? Because this seemed to me that there might be hefty tax increase down the road if the projected returns did not materialize. This will also affect all the social spending currently on Singaporeans

NIR, Budget untruths, & the President

That is why we need to know the projected Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings. Remember NIRC — Singapore’s net investment returns (NIR) contribution (NIRC) -consists of 50 per cent of the Net Investment Returns (NIR) and 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.

For your info this is what ex-TOC star commentator, Chris Kuan (Today, he seems to be too objective for the team running Terry’s Online Channel: they look to be the ST of S’pore’s cyberspace), wrote:

Your reading of the Constitutional NIR rule is correct – the NIR Contribution is calculated on the expected long term real rate of return (LTROR) on the government’s net assets (assets in excess of its liabilities). Pls note it is REAL returns we are talking about – that is the actual dividends and market valuation of the net assets minus the inflation rate. Therefore not all returns are spent. Then the rule limits the spent to 50% – therefore more than half of the actual or nominal returns are re-invested. Again pls note this is nothing unusual, Norway’s GPF and university endowments permit up to 100% of the returns to be spent.

NIR, Budget untruths, & the President

As to why the PAP govt wants to keep the projected Net Investment Returns (NIR) a secret, I’m sure you are thinking what I’m thinking LOL.

Trump supports ESG investments

UBS researchers looked at how ESG investments fared under the Trump presidency: he comes across as a Woke.

Ang moh spends S$9,800 monthly on daughter’s therapy

In Ang moh family of three spends S$1,170.44 on food in one week, I reported on an ang moh couple with one kid who spent S$1,170.44 on food and booze in one week. They ate out or had food delivered. This is a lot more than my mum, her maid and I spend on food (including hawkers’ food and fast food) in an average month.

They sure got a lot of money because they also spend S$9,800 monthly on their daughter’s therapy

Alex has been confirmed by the doctor to need some occupational therapy for a couple of conditions so that’s starting to sound expensive! We can put that off till next week to start looking around for a good one.

Occupational therapy will now add to the ABA therapy and speech therapy we already pay for Alex. Raising a child in Singapore is very expensive, especially when they have special needs and you’re a foreigner. We haven’t had to pay the ABA therapy bill during the week of this blog but that sets us back around Singapore $9,800 (£5,490) each month. We saved some during the circuit breaker because all sessions were remote.

It’s the dilemma of any parent whose child has suspected autism; do you hope it’s a phase and they’ll develop late or do you make a choice and invest in early intervention? Fortunately, we chose the latter and it turned out to be the right call. We are lucky that we are both employed in good jobs and salaries. We can afford it for now, but it’s massively impacting our ability to save for retirement. Luckily when she starts school that will actually be cheaper; we are looking forward to that.

https://www.bbc.com/news/business-53531788

Whatever life is really sweet, financially at least, for this expat family. Sorry that their daughter is autistic but then what the gods (or fate) give(s) away, they also take away.

Dogs with fleas that could make you money

Just realise that most of the time, there’s a good reason why investors avoid

listed companies which have their net cash exceeding their market capitalisation. This is essentially the same as net cash per share compared to the share price. The excess cash should also inform investors that these companies could be potentially strong takeover or privatisation targets, as acquiring these companies would improve the financial position of the acquirer. Therefore, to investors, they could expect to receive a significant premium on their investments if they purchased the company before any takeover offers.

https://www.theedgesingapore.com/capital/financially-savvy/cash-king-sometimes-so-cash-ratio

Four in five fund managers believe stocks ‘overvalued’

Xia suay. So why market keeps flying?

But as market keeps going up, it means that a lot of these “bears” are actually buying. Fear of missing out and “greater fool out there”.

CPF: Imitate Oz?

The Australian govt recently decided to allow people in financial distress to withdraw up to A$20,000 from their superannuation (pension) accounts. Australia has the world’s 4th largest pension fund system: A$3tn in assets.

The govt expects a withdrawal of A$30bn. Some industry experts think the final figure could be almost double that,

Difficult see the PAP govt imitating the Oz govt. Not so much on ideological grounds (Hard Truths), but because CPF funds are also used to make public housing “affordable”, and private housing more than just a dream. CPF is not juz saving for pensions.

What goes down quickly, must go up quickly

Bulls are hoping.

US stocks have just recorded their biggest weekly gain since 1974 despite the bleak economic outlook.

Wall Street’s S&P 500 shares index rose 12% this week, as the US central bank announced more stimulus measures to support the economy.

Related posts

Covid-19 investing: Beware of a double bottom

Markets: Easy collapse, easy rebound

Antidote to Covid-19 and market stress

Covid-19 investing: Beware of a double bottom

As Mobius points out, historical bear markets on a global scale have averaged a larger 30% to 50% drawdown spread out over the span of roughly two years. Some have been quick to optimistically predict, however, that if the market cratered at record speed, perhaps it could recover just as fast because this time it is different. To refute the notion that lightning could strike just as quick to fuel an equal move to the upside, Mobius quoted the late John Templeton.

“The most expensive words in the world are ‘This time is different.’ I don’t think this time it’s different,” he said. “I think we’re probably maybe going to do a double bottom, jumping down again and pushing up again.”

https://sg.finance.yahoo.com/news/investor-who-predicted-the-start-of-the-2009-bull-market-were-not-in-the-clear-yet-104234346.html

I bot on the way down. Out of three stocks, one is ahead, two under water. Still got ammo.

Antidote to Covid-19 and market stress

The BBC (among others) recommend that to lessen the stress of Covid-19

— Limit the amount of time you spend reading or watching things which aren’t making you feel better.
— Be careful what you read

Hmm.

Until very recently, markets were tanking as if there were tomorrow. Maybe in such a situation, stop following the market.

Btw, markets are on a roll. Most say it’s a bear market rally. But hope springs eternal.

Markets: Easy collapse, easy rebound

If wondering why markets tanked so fast juz look at

Could rebound pretty fast: I hope. Core portfolio stocks down 30%. New positions 20% underwater. And I was buying 25% from highs at end February.

Sad.

Interesting ideas from Germany and US to protecting borrowing home owners and their lenders

Recently I wrote in TRE cybernuts and central bank singing from the same song sheet that our central bank is worried that

Singapore property market faces risks from unsold units, uncertain economy: MAS

Here’s what the Germans do to protect banks and borrowers

German mortgage-lenders embrace an unusual appraisal technique. When assessing the value of a house, they rarely refer to market price; instead they consider “mortgage-lending value”, an assessment of the probable price of a house over the economic cycle. A report from the Bank for International Settlements, a club of central banks, suggests that by discounting short-term price fluctuations, this valuation technique can stop bubbles from forming. Lenders in America once embraced the technique, points out Ed Pinto of the American Enterprise Institute, a think-tank, yet after the second world war it fell out of fashion.

https://www.economist.com/special-report/2020/01/16/what-is-the-future-of-the-rich-worlds-housing-markets

Meanwhile in America

Safe Rate, based in Chicago, offers a new type of mortgage. When local house prices decline, so do borrowers’ monthly mortgage repayments. The benefit for the borrowers is that they save money and are less likely to default. The advantage for investors is that, by preventing foreclosures, more mortgages will be kept going and it is less likely that house prices across a region will spiral downwards.

https://www.economist.com/special-report/2020/01/16/a-decade-on-from-the-housing-crash-new-risks-are-emerging

Based on joint salaries, what properties available

Here’s a great table from “Here’s the salary you need to earn to afford these homes in Singapore”

https://www.asiaone.com/money/heres-salary-you-need-earn-afford-these-homes-singapore?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook&fbclid=IwAR12OUteKQMsmv0WkK7l_waW3MOmm7KPj8gMguNipQlWv3880_5O4Dhoo04#Echobox=1579565572

Btw, nothing great about our property mkt in 2020

The prime sales market in Singapore had an active 2019 despite the cooling measures in place. The city benefited from rising affluence among residents and interest from international buyers. Small price rises are expected in 2020 triggered by pent-up demand.

Sophie Chick, head of Savills world research

Not like M’sia or Manila.

Related posts:

Why S’pore is so shiok for private property investors

Ang moh’s great insight on property mkt

Buying homes the billionaire way: two luxury homes are better than one

Why S$73.8m flat is a steal

But don’t get overgeared: TRE cybernuts and central bank singing from the same song sheet

Another year of sticking to S-Reits

In summary, the models expect recovering GDP growth, extremely low inflation, exceptionally low bond returns, and low but positive equity returns in 2020-22.

Gavyn Davies* talking about the global macro scene for 2020

I tot I would be selling out of my S-Reits in 1Q 2020. Guess I’ll hang around for a bit longer.

*He’s an FT columnist

Gavyn Davies is now chairman of Fulcrum Asset Management and co-founder of Prisma Capital Partners. He was the head of the global economics department at Goldman Sachs from 1987-2001, and was chairman of the BBC from 2001-2004. He has also served as an economic policy adviser in No 10 Downing Street, an external adviser to the British Treasury, and as a visiting professor at the London School of Economics.

FT

Fake news: CPF Life not enough to live on

This reminded me of u/m chart. Look at it and realise that it’s fake news that S’poreans (young and old) are worried about their retirement needs. Way down at number 24.

 

 

 

 

https://www.schroders.com/en/sg/private-investor/sg-insights/global-investor-study/revealed-the-global-league-table-of-pension-worry/?utm_campaign=insights&utm_content=GIS_Retirement_1&utm_medium=paid_social&utm_source=facebook&utm_term=singapore%20digital%20end_investor%20video%201200×628%20video&fbclid=IwAR3rtN5elQ4i4e-xn2XPDVyFuyv5I8P6KzHKawJOXzeodl-4Y0DZ8VawPkc

Time to POFMA TOC’s M’sian Indian goons (Terry and his “bunch of Indians”), the cartoonist and other TOC , and TRE cybernuts?

And Straits Times and StanChart Bank for this BS? https://www.straitstimes.com/business/banking/nearly-half-of-affluent-singaporeans-may-miss-the-mark-on-retirement-savings-goals

Power of compounding

Actually in this case the power of reverse compounding.

Pocahontas (aka Ms Warren, a descendant of Marx, who has a bit of Cherokee blood and who got into trouble claiming to be an Injun) has proposed what her campaign calls an “ultra-millionaire” tax of 2% on assets above $50m, plus a 1% “billionaire surtax” on assets above $1bn.

Doesn’t sound much does it? FT has done some calculations. If US billionaires paid her weath tax since 1982, they’d be a lot poorer.

Economics of buying cheap and cheerful stuff

The late (and much missed) Sir Terry Pratchett , in his Discworld series, had a character by the name of Captain Samuel Vimes of the Ankh Morpork City Watch. He was penny wise, pound foolish.

He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

Of course one has to take care of the good quality boots.

Sovereign bond with penny stock characteristics

From juz below par (100) to 38 in two years.

Two years ago, investors were rushing to buy Argie’s 100-year bond with a coupon of 7.125% and initial yield of yield of 7.9%: https://www.cnbc.com/2017/06/20/argentina-sees-strong-demand-for-surprise-100-year-bond.html.

Rational long-term investors “reasoned that a bond with a 7.9 per cent yield would cover the initial investment and then some over a decade or so,” said the FT

Yesterday it fell to 38 cents on the dollar, a fall of 6% on the day after Argentina started selective defaulting of its bonds: Line between living beyond one’s means and being mean is very thin.

Reminds me of this S’pore fiasco: https://www.theedgesingapore.com/inner-workings-penny-stock-scandal-revealed-first-prosecution-witness

Line between living beyond one’s means and being mean is very thin

Argie president Mauricio Macri’s plan to delay payments on more than U$101bn of debt, is a de facto default.

Todd Martinez, director of sovereign ratings at Fitch debt agency, had earlier told the BBC’s Today programme that Argentina had three options to repay what it owes – most of which is in US dollars – and none of them “looks very viable”.

“It comes down to a simple equation,” he said. “Argentina can either (sic) dip into its savings, borrow new money or achieve a budget surplus.

True of a country, true of an individual. Over-borrowing and over-spending have consequences. Btw, a Hard Truth of the PAP is be prudent. Problem is this leads to the vice of being over-prudent and leads to meanness. Think PAP: Will PM, tonite, give peace of mind on CPF Life Standard?

But to be fair to the PAP: Reason why CPF Life so mean?

Vote wisely.

Why Oppo cock to think that HDB issues will affect the vote

In Christmas, CNY coming early thanks to PAP, I pointed out that the loss of value for resale flats and the older flats has yet to be addressed by the PAP govt. And that there are S’poreans that are unhappy.

But all the KPKBing by cybernuts like Goh Meng Seng (If he still thinks HK better place to bring up his family, how come he so quiet nowadays and btw, I hear his daughter is studying here despite him saying that HK’s education system is better), and Lim Tean (He rents a S$15,000 black and white bungalow from the PAP govt) to stir more unhappiness and discontent, S’poreans are not fooled by their BS.

Our public housing policies mean that public housing is cheap, compared to other major cities, not juz “affordable”.

This table puts into context the issues of

— Falling resale prices causing a problem for the PAP with those who bot resale flats: Double confirm, ground not sweet for PAP and Will this resale flat buyer vote for PAP in next GE?

— 99-year leases: Why 30-year old HDB flats difficult to sell/ Why PAP rule will end in 2029 and Older HDB flats: How much value is lost in under 2 yrs

Christmas, CNY coming early thanks to PAP

Things could be better, a lot better. But 60-70% of voters think (thanks   that housing would be be like in HK, if not for the PAP govt. And while taz not the real pix, they are not that wrong.

Look at our private housing, it’s expensive:

Buying homes the billionaire way: two luxury homes are better than one

Why S$73.8m flat is a steal

Why S’pore is so shiok for private property investors

And even in private property there are govt controls

Ang moh’s great insight on property mkt

PAP whacks greedy pigs

So when will the PAP start worrying about the problem of older flats? Read Why PAP rule will end in 2029.

-ve deposit rates

Further to Bank pays u to borrow/ Govts borrow for free, Jyske Bank who pays money to borrowers to borrow has become the first Danish lender to impose negative interest rates on customer deposits and has warned that sub-zero rates were looking “rather permanent”.

Customers with balances over DKr7.5m (US$1.1m) would be charged a default rate of 0.6% a year.

Fyi, UBS and other major Swiss banks have been charging negative interest rates on customer deposits for some time. But there we are are talking of deposits of tens of millions, not US$1m

Bank pays u to borrow/ Govts borrow for free

World turned upside down.

A Danish bank last week week launched the world’s first negative-rate mortgage, allowing housebuyers to take a home loan and pay back less than they borrowed.

Sounds good.

But do realise that should negative interest rates leads prove to be a precursor of deflation, property values fall in a deflation. But then that doesn’t matter to HDB flat owners.

Germany has a new test of investors’ voracious appetite for bonds with very low or even negative yields: a 30-year bond that offers no interest payments at all.

FT

It has already issued similar 10-yr bonds

Bonds worth U$15tn, about a quarter of the global market, are offering negative returns, the FT reported last week: U$100 of bonds, including interest payments, will return less than that amount throughout their lives. That’s useful context in understanding why central bankers keep being asked about negative rates.

The central banks of the Eurozone, Switzerland, Japan, Sweden and Denmark all have rates set below zero to try and tackle very low inflation. It isn’t working, but that’s another story.

The Bank of England’s governor was asked by website Central Banking whether the UK will try the policy.

“At this stage we do not see negative rates as an option here. I am not criticising others that have used them, but we don’t see it as an option,” he replied.

Whatever one says about the Brits, despite a no deal Brexit being the likely result, the economy doesn’t yet need to resort to -ve interest rates. Sounds like Brexiters are right to accuse the Remoaners (those who want to stay) of doom-mongering i.e. Project Fear.

CPF interest rates: PAP govt cares for u, they really do

The US 10-year real yield — a barometer of future growth expectations for the economy — has dropped below 0.4 per cent, eyeing its September 2017 nadir of 0.25 per cent.

FT a few days ago

CPFers get a better deal from the PAP govt.

Our inflation rate is about 1.37%.

But

Savings in the Special Account earn a guaranteed 4% while savings in the Ordinary Account only earn a guaranteed 2.5%. The lower interest rate offered by OA is due to its wider usage. For instance, funds in OA are allowed to be utilised to fund child’s tertiary education as well as CPF member’s property purchase. Such uses of the CPF funds are not applicable to the Special Account and a higher interest rate is therefore provided to compensate for its restricted use.

How to Optimise Singapore CPF: Ordinary Account into Special Account

2.5 – 1.37 = 1.13. 1.13 is the real return assuming that the CPF interest rate is only 2.5%. and we know it’s higher, don’t we?

And taz not all. Read, the bits I bolded

The interest rate on Ordinary Account (OA) monies is reviewed quarterly. OA monies earn either the legislated minimum interest of 2.5% per annum, or the 3-month average of major local banks’ interest rates, whichever is higher.

The OA interest rate will be maintained at 2.5% per annum from 1 July 2019 to 30 September 2019, as the computed rate of 0.60% is lower than the legislated minimum interest rate.

And​

The interest rate on Special and MediSave Account (SMA) monies is reviewed quarterly. SMA monies earn either the current floor interest rate of 4% per annum or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is higher. In view of the continuing low interest rate environment, the Government has decided to further extend the 4% floor rate for interest earned on all SMA monies for another year until 31 December 2019.

Consequently, the SMA interest rate will be maintained at 4% per annum from 1 July 2019 to 30 September 2019, as the computed rate of 3.37% is lower than the current floor interest rate of 4% per annum.

And

The interest rate on Retirement Account (RA) monies is reviewed annually. RA monies credited each year will be invested in newly-issued Special Singapore Government Securities (SSGS) which will earn a fixed coupon rate equal to either the 12-month average yield of the 10YSGS plus 1% computed for the year, or the current floor rate of 4% per annum, whichever is higher. The interest rate earned by RA monies is the weighted average interest rate of the entire portfolio of these SSGS, which is adjusted in January each year to take into account the coupon rates payable by the new SSGS issuance. In view of the continuing low interest rate environment, the Government has decided to further extend the 4% floor rate for interest earned on the RA for another year until 31 December 2019.

The average yield of the 10YSGS plus 1% from November 2017 to October 2018 is 3.38% per annum. As this is below the current floor rate of 4% per annum, new SSGS issued in the year of 2019 will pay a fixed coupon of 4%.

Consequently, the RA interest rate from 1 January 2019 to 31 December 2019 will be maintained at 4% per annum.

Above from CPF website

Vote wisely.

Related posts (Even an anti-PAP TOC writer appreciates that the PAP govt cares):

CPFLife: PAP govt cares for u, really they do

TOC’s “Correspondent” shows that PAP govt really cares for S’poreans

Vaping: PAP govt cares for u, really they do

Merdeka Generation: PAP cares for u, really they do

Groceries: PAP cares for u, really they do

Where we ahead of UK in financial services

There’s a new bank in the UK: Bomad [the bank of Mum and Dad] to help finance house purchases.

S’pore has had this for ages (my dad had to take a loan from my grandmother, to help buy a house all those yrs ago). Bomad is still thriving. Friend telling me that daughter is hinting loudly that she and her husband-to-be need a loan. Problem is that she has siblings. So loan one, others will expect similar facilities. He didn’t stop at one because he hated (still hates) the PAP.

In the UK, an FT reader said Bomad should provide advisory services, not juz folk out the S’pore. S’porean parents have always provided such services as a mandatory addition to forking out the money for a HDB flat etc etc

LBS: Perspective of 75-yr old retired technician

In alt media and social media, the HDB buy-back scheme is dissed by people like Terry’s Indian goons and their fellow cybernuts.

Here’s the perspective of a 75-yr old singleton who was a PUB technician and who has a resale HDB three-room flat. He recently opted to lease back his flat to the HDB.

— He doesn’t have to move.

— He gets $20,000 in cash when the formalities of the lease-back are completed.

— Until he dies, he’ll get about $1,000 a month. Looks like the HDB buys him an annuity for life.

(Will try to explore this aspect further after Chinese New Year (Mum’s still “under observation” in atas hospital ward*) to see, if on the available info, the premium paid is reasonable. Actuarially it will be prudent, but is it reasonable? And not kia su like the CPF Life assumptions: Will PM, tonite, give peace of mind on CPF Life Standard?))

— In 20 yrs time, when the lease expires, he has the assurance that he’ll be found somewhere to live until he dies.

— He says if he dies in the next 20 yrs, his nominee will get something. More if he dies earlier, very little if he dies later.

He’s happy.

And he’ll vote PAP. One reason is to make sure that in 20-yrs time he’ll be found a place to live. He knows he can’t trust the likes of Mad Dog, Goh Meng Seng and Lim Tean, even though he knows that there are good oppo people out there like Dr Tan Cheng Bock, Dr Paul and other SDP activists, and the Wankers.

---

*Private hospital treatment, public hospital fees

 

 

 

CPF Life starts at 70: Alt media way behind the curve

So alt media has only realised that CPF Life payments begin at 70, unless one opts in to start at 65.

In June last yr (Trumpets for me please), I highlighted what they are now only KPKBing about now. My piece then

CPF Life: How withdrawal age “moved” to 70/ Silence of the activists

I was going to explain how the dastardly deed was done but when TRE republished

Red alert! Achtung! S’poreans approaching 65, a TRE reader gave the answer, saving me the need to explain.

Lye Khuen Way:

June 11, 2018 at 7:50 am  (Quote)

The CPF Board do send out letters to those approaching their cohort drawdown age.
For those borned in 1953, it’s their 64th Birthdays.

There after, I believe it is 65.

The sly way they put it, is to suggest that you could delay your drawdown and receive more per month.

That applies to both Minimum Sum Scheme or those who opted for CPF Life.

Those who instinctively do not want any delay might just chuck the letter and the forms aside.

That’s where the devils come in.
Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

Yes, Age 70.

I happen to opt for the CPF Life and somehow my enhanced topup application had already stated I wanted my draw down to start from age 64.

If unsure, call, write or better still go down personally to any of the CPF offices. Note that the Main CPF Board office is closed on Saturdays.

(Emphasis)

In places like the UK, or US of A or Europe, this kind of action

Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

is not acceptable. It’s not Christian, kosher or halal. It’s politically toxic, playing games this way.

Civil rights activists would be KPKBing and rightly so.

Here it’s par for the course.

Worse our ang moh tua kees don’t care. They don’t have to rely on CPF Life payouts. People like Kirsten Han got pa’s and ma’s money just like Harry’s children.

And juz as bad is the silence of the Oppo politicians. Nothing from the Wankers’ Party or from Goh Meng Seng (Silence of Goh Meng Seng) or Lim Tean (Where’s yr defamation video and jobs rally Lim Tean?) the two talk, sing song artistes.

All so rich. It’s a fact that Lim Tean rents a black and white bungalow costing $15,000 a month.

---

Last yr, I also predicted: Akan Datang: Why CPF Life payments will begin at 85

Related: More on 85 being the new CPF Life payout date

Why Oxygen and other cybernuts are having orgasms this Christmas

They are always wishing ill to striving S’poreans, some of whom are having problems this Christmas, and so making Oz tax dodger Oxygen and his other cybernuts pals really very happy.

The number of properties put up for auction surged by almost 50 per cent this year compared with 2017, even as the number that successfully went under the hammer fell sharply.

There was a rush of listings in the final three months of this year, with more than a third put up in the fourth quarter, according to data released by property consultancy Knight Frank on Friday (Dec 21).

There were 1,120 properties put up for auction — the highest since 2011 — a 47.4 per cent increase from the 760 listings last year.

Out of the 1,120 listings, 41.9 per cent were residential properties, 22.9 per cent were retail units and 24.8 per cent industrial properties.

https://www.todayonline.com/singapore/properties-put-up-for-auction-surge-2018-knight-frank

But let’s be fair to these cybernuts. Only greedy PAP voters who are the cousins of cybernuts mortgage themselves to their eyebrows eyebrows and beyond.

Whatever, Merry Christmas to all.

And ensure a Prosperous New Year by voting wisely. And I don’t mean voting for Mad Dog, Lim Tean or Meng Seng.

Investment returns over next 10-15 yrs

Forecast by JPMorgan. Interesting the big changes (relatively speaking) in the view about commodities’ returns, US long treasuries and US investment grade corporate bonds.

“Houses are for living in, not for speculation”

Of course not PAP: but Grandpa Xi.

And it’s a statement that the PAP and voters should remember. While a lot of the KPKBing about the price falls in older HDB flats is coming from the usual suspects like P(olitician) Ravi, the SDP (Note the silence of the Wankers: Low, Auntie and Bayee got condos waiting to be seized when they lose court case), and the cybernuts, bet u there were greedy PAP voters didn’t know that a 99-yr lease is juz that and are suffering in silence.

They heard “asset appreciation” and bought resale flats.

Will this resale flat buyer vote for PAP in next GE?

“I bought in the resale market when the prices were quite high some years back,” said Jun Liang, 42, whose apartment is in a 55-year-old block called Selegie House. “When I look at the value now, it would not have appreciated — in fact, after renovation costs it could even be a small loss.”

[…]

Home-owner Jun and his wife bought their apartment in one of the oldest HDB blocks in 2013 after getting married, spending about S$700,000 on the property and another S$100,000 to renovate. Now, they have thoughts of upgrading to a private condo. But, looking at their budget, the couple wonder if they’ve any chance of getting the home they want.

https://www.bloomberg.com/news/articles/2018-10-25/singapore-s-public-housing-envy-of-the-world-hits-rough-patch

I think he’s deluded about a small loss taking into account renovation costs. Remember prices for flats like his took a dive after Lawrence Wong’s warning about the govt taking back the land when the leasehold expires: Why 30-year old HDB flats difficult to sell.

And it’s going to get worse. 🤑🤣😛😢😪😂😝😜

Fat cat medical doctor/ investor quantified the loss

The flats in Selegie House are the small types. The one in question probably a 806sqft 4-rm flat.

If really need to sell today, unlikely to get serious offers much above $500K. Buyers will need big chunks of cash onhand to pay.

Even if SERS, the compensation by HDB based on market valuations will be a big % loss of what he paid, and certainly not enough to buy any replacement new 4-rm flat in city centre area, even if its a subsidized BTO as part of SERS package.

If there’s SERS, HDB might offer them BTO replacement flats in a slightly cheaper district such as Kallang River / Mountbatten area. This was what they did for the Rocher Centre residents when it got torn down for the N-S Highway.

.

Financial literacy test for wannabe hawkers?

I ended Double confirm GE in 2019: Free lunches for two yrs for KPKBing hawkers saying “Dollars and Sense” of a Hawker Stall should be required reading for wannabe hawkers.

I’m still unable to find out from their agitator friends if the newbie hawkers had read and understood what they were signing up for. If they had (have to assume they are not cybernuts, but educated S’poreans: yes, yes a big assumption), then the real issue is whether their projected revenues were overoptimistic. And if so, did the operators over-promise but the newbie hawkers didn’t realise that they were being taken to the cleaners, or did the hawkers cock up their estimates of footfall etc?

So maybe budding hawkers got to pass a financial literacy course?

After all

A financial education curriculum will be rolled out to all polytechnic and Institute of Technical Education (ITE) Year 1 students from next year, as part of government efforts to boost financial literacy among Singaporeans and help them manage their money well.

The mandatory module, which will not be graded, will focus on budgeting, goal-setting and financial basics such as the effect of compound interest on debt and savings.

Additional modules will also be piloted with some Year 2 and 3 students over the next few years to help them become more savvy consumers and learn how to use insurance, investments, and national schemes such as the Central Provident Fund.

This was among several new initiatives announced on Saturday (Nov 17) by MoneySense, Singapore’s national financial education programme.

An online financial health check tool for all Singaporeans and permanent residents was also launched at the roadshow at Our Tampines Hub, which will run until Sunday before moving to the HDB Hub in Toa Payoh on Dec 8 and 9.

The questionnaire, which is available on the MoneySense website, helps to assess progress in areas such as money management, insurance, investment, retirement and estate planning, and provides recommendations to address the gaps identified.

Services at key government touchpoints will also be enhanced to help Singaporeans better understand their financial options at milestones such as buying a flat and preparing for retirement.

ST recently

Another constructive suggestion: include a module on how to make realistic projections and another on “take nothing the operator of hawkers’ centres says on trust”.

Yet another constructive, nation-building suggestion: screen out the cybernuts especially those from TRELand.

Because if the newbie or wannabe hawkers are anti-PAP cybernuts, no point even trying to educate them, let alone subsidise them in the hope that their revenues will grow because of improving footfalls by 2020. It’ll be a waste of tax-payers money that can better go to fund our ministers millionaire life styles.

Worse, there’ll be a spate of food poisoning as cybernut hawkers would prefer to read TOC and TRE and KPKBing on these sites rather than cook good, hygienic food. Morocco Mole tells me that his cousin in NEA tells him that many of the recent fatal food poisoning cases are suspected to be the consequence of employees reading and posting on TRE rather than on focusing on food preparation.

 

 

 

This time is different? Or is financial history going repeat itself?

Goldman Sachs’ “Bear Market Risk Indicator” is higher than on the eve of the financial crisis. This indicator is made made up of a mixture of economic, bond and equity market measures.

Also Bank of America’s latest investor survey revealed the number of investors that expect global economic growth to slow down has climbed to the highest since November 2008.

S’poreans fall for CNA’s flawed look at hawkers’ margins

CNA Insider, part of the constructive, nation-building media screamed

Profit margins for hawker fare? As low as 20 to 30 cents

Giving the example of

Mr Ng, who started The Fishball Story in 2013, disclosed that his net profit from selling a bowl of noodles at S$3 was 20 to 30 cents.

“That’s the margin … and it’s pathetic,” he lamented. “It’s very difficult for (hawkers) to continue selling cheap food any more.”

Read more at https://www.channelnewsasia.com/news/cnainsider/profit-margins-for-hawker-centre-fare-as-low-as-20-to-30-cents-10948414

This example and other similar examples in the CNA article had the usual cybernut suspects and even ordinary S’poreans KPKBing on new media about the plight of hawkers, and blaming the Pay And Pay people.

The ordinary S’poreans joining the cybernuts in baying for PAP blood are either not thinking straight or are financially incompetent.

Is that “margin” or “net profit” before or after the “salary” that hawker pays himself? When I see the word “net margin” or “net profit”, I assume that the amount is net of everything including “salary” payments made by ownself to ownself.

Same query for the other examples quoted in the CNA article because nowhere in the article does it state whether the “margin” or “net profit” takes into account the amount that the hawker pays himself for his efforts.

If it doesn’t then it’s really a tough life. If it does, then whether it’s that tough a life depends on the amount that ownself pay ownself before KPKBing about the “peanuts” net profit.

---

“Dollars and Sense” of a Hawker Stall

But does the “Estimated Monthly Cost” include the “wages” that the two entrepreneurs pay themselves? If they had employees, the employees’ wages would be included under this heading. But as they are both bosses and workers, it isn’t clear if “Cost” includes their “wages”.

Makes a big difference on the real bottom line.

Initial Cost Of Starting Hawker Stall (Inclusive Of Opportunity Cost)

(Excluding Apprenticeship Fee)

$40,000

Monthly Operating Cost$11,000 – $15,000

Estimated Daily Revenue	$1,000	Based on assumption of 200 Customers, average spending of $5
Estimated Monthly Revenue	$22,000	22 working days per month
Estimated Monthly Cost	$13,000
Estimated Monthly Gross Profit	$9,000

——————————————————————-

Many moons ago when surgeon Susan Lim was trying to portray herself as more sinned against than sinning, I wrote

“Do the breakeven cost of $46,000 include any payments to you in the form of salary, director’s fees or advance payments?”. If they do, these numbers should have been disclosed by her when she bandied these numbers. These would have given an analyst a better understanding of what went into calculating the breakeven.

I’m not accusing Susan Lim or her accountants of anything shady or stupid. I’m juz trying to understand how the numbers she quoted prove that, This was a huge loss-making assignment.

 

 

 

Hard Truth why PAP wins and wins

(Or “Why oldies are getting more goodies” or “You massage my back, and I scratch yrs”)

The Merdeka generation are getting goodies, juz like the Pioner Generation. Both generations in their prime have given the PAP solid support (over 60% of the popular vote).

PAP is juz rewarding voters who keep it in power

Not only that, but as S’poreans are living longer, keeping the Merdeka generation (and the balance of the Pioneer Generation) contented with the PAP govt means that the PAP’s hegemony can last at another 20 yrs.

The average Singaporean can expect to live 85.4 years in 2040, up 2.1 years from the average of 83.3 years in 2016, according to a new study by a global health research organisation.

Singapore is expected to maintain its third-place ranking in average life expectancy in 2040, if recent health trends continue.

By then, Spaniards are expected to live the longest — an average of 85.8 years — pipping the Japanese, who are expected to live an average of 85.7 years.

https://www.todayonline.com/singapore/average-singaporean-live-third-longest-world-till-854-years-2040-study

Add to that having people like Mad Dog, Lim Tean and Meng Seng as opponents and the PAP will rule forever and a day.

 

Why private property owners appreciate the PAP

Especially if they are still mortgaged to their eyeballs.

S’pore’s NOT among the global cities that have the highest risk of seeing their property values collapse. We are not even on the “overvalued” list. We are on the “juz right” list.

The cities seeing the highest risk of seeing their property values collapse are HK, Munich, Toronto, Vancouver, Amsterdam and London, says UBS’s latest Global Real Estate Bubble Index.

Milan, S’pore and Boston are “fairly valued”. Ten cities including NY, Sydney and Stockholm are overvalued. Chicago is the only undervalued housing market in the 20-city index.

Still want to vote against the PAP?

Related post: Akan datang: GE in late 2019

First signal: the PAP govt ended the property cycle upswing early. If things had been allowed to run their usual course, we’d have rising property prices in 2019, if not 2020.

Myth & reality in mkts

Many believe useful myths about the markets they follow. If you want to manage money well, you need to understand what the prevailing myth is, grasp where it is wrong and when that will become apparent. Indeed, making good investments often rests on disagreeing with the conventional wisdom. However, you need to time your disagreement so you are not blown away by the weight of money going the other way before the truth outs.

John Redwoodchief global strategist for Charles Stanley, a UK broker, writing in the FT.

Robo advisers underperform

Recently, on the same day that I read OCBC had introduced robo investment advice here, I read

Low-cost robo advice companies billed as investment services for the masses have failed to deliver market-beating returns over the last year according to new research,

Companies such as Nutmeg offer ready-made investment portfolios of low-cost passive funds and have boomed in popularity in recent years amid a growing need for financial advice in the UK. Investors are automatically placed into portfolios based on an online risk assessment.

But according to research by consultancy Boring Money, customers would have earned more from a fund tracking the FTSE 100 than even the best-performing high-risk portfolio, and low-risk investors could have earned more in a cash [special tax account]

FT.

Rothschild’s a bear

Among his past good calls was his call years ago, at the beginnings of the US shale gas revolution, that this would transform the US, making it a great place to invest in US based industries that used natural gas.  

Lord Rothschild’s remarks on markets are always worth reading. First, he knows how to make money. RIT Capital Partners, the £3.2bn investment trust he chairs, has returned an average of 12.6% a year since flotation in 1988, which is excellent going for a defensively managed fund. Second, a substantial chunk of his personal wealth is held in RIT. His 18% stake is worth a cool £575m. Third, he gets to the point.

Rothschild has sounded progressively bearish since late 2015 but he took caution to new extremes in Tuesday’s report to shareholders. “This is not an appropriate time to add to risk,” he wrote, citing high stock market valuations, the length of the bull run (10 years, a record), and the end of the era of quantitative easing.

Then he offered a list of familiar worries: the eurozone; trade wars; the effect of higher US interest rates on emerging markets, with the currencies of Turkey and Argentina being early casualties; and Brexit, North Korea, the Middle East and populism. His key point is that the 9/11 terrorist attacks in 2001 and the 2008 financial crisis provoked a common approach from world powers, but it’s hard to imagine the same response today. His conclusion was almost alarmist: “This puts at risk the post-war economic and security order.”

For its part, RIT is keeping a very low exposure to stock markets of just 47%. Warren Buffett, the most successful investor alive today, is similarly in risk-off mode as he sits on large sums of cash and grumbles about how everything is too expensive to buy. Take note of these octogenarians. They have seen a few market cycles.

https://www.theguardian.com/business/nils-pratley-on-finance/2018/aug/07/rothschilds-caution-reaches-new-extremes-warnings-nils-pratley

So why so cock?

“I’m retired so this was going to be a key part of my income but now, not just the income, I have to be worried about my capital. My kids are going to university soon so I have to figure another way out.”Read more at https://www.channelnewsasia.com/news/business/hyflux-shareholders-townhall-meet-management-first-time-10545662

So why did he buy Hyflux debt in the first place?

A fool and his money are soon parted.

Btw, remember to use yr CPF normal account as yr savings account

Using yr CPF OA as a savings account

Oldies use yr CPF acct as savings, fixed deposit account

Average S’poreans smarter than scholar ministers

They cottoned on a long time ago that having babies didn’t help them in the pursuit of the 5Cs.

It’s time for governments to accept a basic truth of the 21st century political economy: Children are an economic drag for parents …

Putin introduced major subsidies for parents. Russian fertility subsequently increased, but hardly enough to matter. The 1.7 rate of 2015 remained well below the replacement level. And an 11 percent decline in births in 2017 suggests the effects of governmental birth subsidies are fading.

That pattern is common. After the Hungarian government brought in some of the world’s most generous child subsidies, the average birth rate increased only from 1.2 to 1.5. The plain fact is that governments cannot pay people to have more babies. Lower taxes, more subsidised childcare, easier access to housing and so forth do little, and not for long.

The economic logic is impeccable. No government can afford to give parents enough money to keep children from being more cost than benefit. Kids are expensive to feed, and middle-class offspring these days absolutely need expensive holidays, extra schooling and a panoply of consumer goods.

For whatever immeasurable happiness parenting may provide, it does not bring much long-term economic gain. When kids grow up and start working for pay, they rarely put much into the extended family’s coffers. If anything, they take up residence in parental attics for longer and welcome a bit of assistance stepping onto the housing ladder. Older people also now expect support from personal savings and government benefits, not their children.

Child-rearing also hurts incomes. Moms and dads often find that the commitments of time and worry slow professional advancement. Fewer children inevitably equate to lesser impediments.

All in all, it is clear that in this modern world most people will only have children because they want to. Since monetary considerations are secondary, what economists would call the subsidy-elasticity of demand is very low.

https://www.reuters.com/article/us-global-economics-breakingviews/breakingviews-hadas-global-case-of-baby-fever-is-easily-cured-idUSKBN1K813Z

 

 

Gd place to borrow money from

At reasonable rates

CO-OPERATIVES, A LESS KNOWN OPTION

An … alternative that many people don’t think about is borrowing from a co-operative society.

Co-operatives started here nearly a century ago to provide a safe place for savings and access to affordable credit.

Admittedly, they are not all open to everyone. Only teachers can get loans for 3 per cent at the Singapore Teachers’ Co-operative Society, and Polwel is for police officers.

Other co-operatives are more accessible. TCC, formerly the Telecoms Cooperative Society, says it is open to all Singaporeans and permanent residents. The interest rate for loans is just 6.99 per cent.

While you would likely need to establish a track record before borrowing, you could join a credit union if you need to take up loans periodically in the future.

https://www.todayonline.com/singapore/reducing-cost-borrowing-money

And given a reported case of criminal breach of trust by employees of one co-op, with a bit of luck there might be no record of yr borrowings.

More on 85 being the new CPF Life payout date

In Akan Datang: Why CPF Life payments will begin at 85, I “explained” why the PAP was planning to move the CPF Life start date to 85: Many S’poreans would be dead by then because 85 is 2.4 years above the average S’porean life expectancy rate of 82.6 yrs.

Seriously, two points to note on why there’ll be a move to up the age when CPF Life starts paying out (Remember the default age is now 70:CPF Life: How withdrawal age “moved” to 70)

When ang moh countries introduced state old age pensions: example when UK introduced state pensions in 1908, the retirement age, 70 for both men and women, was well above average life expectancy.

And then there’s the issue of accelerated ageing where S’pore is among those top of the class.

Senior VP financial planning was a problem gambler

WTF!

For 12 years, Emeline Tang Wei Leng carried out an elaborate ruse, deceiving five people – including her own family members – into investing their savings in non-existent fixed deposit plans with HSBC bank.

Given her former position as a senior vice-president at the bank, they trusted her with a total of S$5.2 million. But Tang, 39, used their savings to fund her gambling habit.

On Friday (June 29), the District Court sentenced Tang to 10 years and six months’ imprisonment for 34 charges including cheating and forgery. Another 223 charges were taken into consideration during sentencing.

…

Starting out as a relationship manager, Tang rose up the corporate ladder and was in the financial planning division when she left HSBC in 2012.

https://www.todayonline.com/singapore/former-hsbc-senior-vp-jailed-cheating-family-members-and-elderly-s52m

As an investor in HSBC, I’m left wondering about the HR practices of the bank.

But then all this modern day emphasis on employees’ dignity and privacy rights, and employers fear of getting into trouble on social media for intrusive survelliance of staff, means incidents like this is more likely than not to happen. Sad.

Akan Datang: Why CPF Life payments will begin at 85

This will happen because 85 is 2.4 years above the average S’porean life expectancy rate of 82.6 yrs.

Let me run readers thru the argument.

In CPF Life: How withdrawal age “moved” to 70, I explained how the CPF Life default age for receiving payments was raised to 70, while earlier in Why CPF annuity will begin at 75 I joked that Queen Jos was planning how to justify raising the age to 75.

Well Russia has an even better plan to screw the elderly. Russia today, S’pore tomorrow?

Russia recently proposed raising retirement age above the average life expectancy of Russian males (63 yrs)

Prime Minister Dmitry Medvedev proposed increasing the pension age for men from 60 to 65 years old, and increasing the pension age for women from 55 to 63 years old.

… with many pointing out on social media it would make retirement age higher than the average male life expectancy in Russia.

https://www.bbc.com/news/blogs-trending-44495136

In S’pore, according to govt data the average male life expectancy age is 80, the female life expectancy age is 86.1 and the average 82.6. Don’t ask me how the average is calculated.

Rounding the average up to 83, and learning from Russia, CPF Life payments will begin at 85, enabling the reserves to grow and grow because many male S’poreans will be dead before CPF Life payments begin.

Btw, remember if CPF Life plan dies, you die: not yr money.

There is a provision in the law governing the CPF Life Plans which states that payouts are contingent on the Plans being solvent. This is because premiums that are paid in to get the annuities are pooled and collectively invested. If the plan you chose doesn’t have enough money to pay out, you die. This is unlike the [Minimum Sum] scheme, where account holders are legally entitled to the monies in their CPF accounts …

(https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/)

 

 

 

 

CPF Life: How withdrawal age “moved” to 70/ Silence of the activists

I was going to explain how the dastardly deed was done but when TRE republished

Red alert! Achtung! S’poreans approaching 65, a TRE reader gave the answer, saving me the need to explain.

Lye Khuen Way:

June 11, 2018 at 7:50 am  (Quote)

The CPF Board do send out letters to those approaching their cohort drawdown age.
For those borned in 1953, it’s their 64th Birthdays.

There after, I believe it is 65.

The sly way they put it, is to suggest that you could delay your drawdown and receive more per month.

That applies to both Minimum Sum Scheme or those who opted for CPF Life.

Those who instinctively do not want any delay might just chuck the letter and the forms aside.

That’s where the devils come in.
Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

Yes, Age 70.

I happen to opt for the CPF Life and somehow my enhanced topup application had already stated I wanted my draw down to start from age 64.

If unsure, call, write or better still go down personally to any of the CPF offices. Note that the Main CPF Board office is closed on Saturdays.

(Emphasis)

In places like the UK, or US of A or Europe, this kind of action

Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

is not acceptable. It’s not Christian, kosher or halal. It’s politically toxic, playing games this way.

Civil rights activists would be KPKBing and rightly so.

Here it’s par for the course.

Worse our ang moh tua kees don’t care. They don’t have to rely on CPF Life payouts. People like Kirsten Han got pa’s and ma’s money just like Harry’s children.

And juz as bad is the silence of the Oppo politicians. Nothing from the Wankers’ Party or from Goh Meng Seng (Silence of Goh Meng Seng) or Lim Tean (Where’s yr defamation video and jobs rally Lim Tean?) the two talk, sing song artistes.

All so rich. It’s a fact that Lim Tean rents a black and white bungalow costing $15,000 a month.

Red alert! Achtung! S’poreans approaching 65

Responding to this Why CPF annuity will begin at 75 fat cat investor and ex-medical doctor “abc” said that

In case you didn’t know, the DEFAULT CPF Life payout age is now 70.

This is in the event you don’t get back to CPF before your 65th birthday.

I think this policy started (silently) in 2017.

I asked a financial planner if this assertion was right, and he said after checking with a colleague, “Yes”.

So if u want yr CPF Life payments to start at 65, tell CPF. Otherwise have to wait until 70: which will soon morph into 75 as I predicted.

As, I’m on the minimum sum and I’ll be checking to see if I have to give notice that I want my money from 65 onwards. Until I give CPF details of bank account where the money is to be paid into, I know the money will be rolled over but now I want to know if I don’t give them bank account details before I’m 65, will the payments start only when I’m 70.

Not at it really matters, I’ve not withdrawn any of my CPF monies.

Btw, anyone knows what happens if someone “opts” for payment to begin at 70, but dies between 65-70: will the estate lose “everything” i.e. the amountrs not paid out? If so better start receiving money at 65.

Staircase to financial paradise

From FT columnist

Step 1: Do you need a financial adviser?

Step 2: Decide which type of service you want

Step 3: Independent or restricted advice?

Step 4: Choose which level of advice you need

Step 5: What are the charges?

Step 6: Finding an adviser

Step 7: Choosing the right person for you

Step 8: Keep your finger on the pulse

Gd advice for struggling S’poreans

In fact for anyone who isn’t fithy rich.

“You need to use a different lens to look at this question of finances,” says Ken McKellar, partner at AGM Transitions, a consultancy, and former partner at Deloitte and EY. “Rather than thinking of how big an income you need, think of how small a cost you could get away with without major changes to your lifestyle. Be aggressive about the cost. We learnt that a lot of ‘fat’ had crept into our spending over the years, and I have heard the same from many others.”

He was talking in the context of retirement planning and living in retirement in the UK.

Welfare for insurers (cont’d)

Here in Welfarism the PAP way I gave an example (share of taxes paid) that the PAP did welfare: corporates get welfare, not the people

Here’s another: the new requirement that Integrated Shield Plans (IPs) with riders have a co-payment portion of at least 5%.

When the PAP introduced this welfare scheme for insurers, a minister talked about “buffet syndrome” of policyholders.

Well the insurers should have allowed to wallow in their own urine and shit.

The problem was self-created. The “free” riders were created to increase their profits, or so they tot. Now that it was not working for them, the PAPpies should not be riding to their rescue. They should simply stop marketing the products. And start increasing the premiums for existing holders to reflect previous pricing mistakes.

But to be fair to the corporate loving PAP govt: the change has not mandated any change for the 1.1m people who already have full riders for their Integrated Shield Plans (IPs) – which means they still will pay nothing for hospital bills.

But the freeloaders and scroungers that are the insurance industry will not stop lobbying for this to change. They had wanted the co-sharing to apply to the existing contract, or so Secret Squirrel and Morroco Mole tell me.

But the PAP govt didn’t want another public row what with its plans to raise GST after the next GE.

 

Why 30-year old HDB flats difficult to sell/ Why PAP rule will end in 2029

A doctor turned fat cat investor responded to Jialat for PAP where I reported a property saleman (OK, OK, he’s title is “research director”) as saying “From the ground, homes with leases of less than 60 years took longer to sell, and at a much lower price …”. (Background reading for those who have not followed the problem with HDB leases of less than 60 years: HDB flats: 35 is a dangerous age)

He wrote

Since 2016/2017 HDB flats older than 39 years have seen a “cliff drop” in prices due to:
(1) Reduction of CPF quantum that can be used for properties with less than 60 yrs lease;
(2) Age of buyer plus remaining lease must be >= 80.

In many mature estates undergoing SERS activities, the price of 40+ year old flats are having 35% discounts against nearby brand new “subsidized” BTO flats. Even with marketing efforts extolling the “higher chance” of SERS for those older flats, buyers are not buying it.

This mini cliff drop has been exacerbated since LW [Lawrence Wong] did an about turn against Old Fart’s & Woody’s asset enhancement propaganda.

Currently majority of HDB flats are still within 25-38 yrs old. The above problem will get worse over the next 10-15 years.

This gives PAPies another 2 terms at least to continue milking Sinkies.

Assuming the next general election is in 2019, this means the PAP will lose power or its two-thirds parly majority in 2029 or thereabouts. Mad Dog will then be 67 and Dr Paul will be about 65. If Mad Dog becomes PM jialat. If Dr Paul becomes PM, let the good times roll.

So if SDP is still headed by Mad Dog as is most likely because he’ll knife Dr Paul in the back to ensure that he’ll rule the SDP, I’ll be forced to vote PAP for the good of S’pore. So I hope he steps down soon.

 

Jialat for PAP

Unhappy HDB “owners”will complicate change of PM (Connecting SMRT failures, 4th gen ministers & change of PM) and other plans.

In yet another sign of a recovery in the private residential market (SIBOR up 25%, but property mkt is hot?), prices went up 1.1 % in 2017, reversing the 3.1%  decline in 2016, figures from the URA showed last  Friday.

But the HDB Resale Price Index (RPI) for 2017 declined by 1.5% , HDB said on Friday.

Worse for those wanting to sell older HDB flats

From the ground, homes with leases of less than 60 years took longer to sell, and at a much lower price … we anticipate the market to improve, especially in areas where former HUDC developments were sold en bloc. Some of these buyers downsized to a HDB flat and kept the proceeds for retirement, or to support their children in purchasing a private home.

Dr Lee Nai Jia, Head of Research at Edmund Tie & Company

http://www.todayonline.com/singapore/private-home-prices-11-2017-reversing-2016s-31-decline

(Trumpets pls: I posted this in April 2017 HDB flats: 35 is a dangerous age. And btw, this Old private flats’ value can also fall off a cliff).)

Anyway, the PAP has a problem if private property prices keep going up while HDB flats prices continue to decline, or stagnate at these levels.

Those with HDB mortgages will not be happy that their their “heavily subsidised” flats have not appreciated in value in line with FTs’ and elites’ private property values, while those with older flats will be doubly unhappy.

Since more than 80% of Singapore’s population live in HDB flats, a growing gap between HDB prices and private housing prices is not good for the PAP.

But at least Mad Dog and the cybernuts will be happy: more of the 70% will be unhappy with the PAP. They can “Keep on wanking and dreaming that the PAP will lose the next GE”.

Opportunity cost of owning car

Great graphic from http://www.channelnewsasia.com/news/brandstudio/how-much-it-really-costs-to-own-a-car-in-singapore-9346730

But the table doesn’t show how not having a car affects sexual attraction and relations. Taz an important factor for young males.

Truth about cars from car maker

FT reports GM as saying when city dwellers buy a car, it depreciates “fairly rapidly, you use it 3 per cent of the time, and you pay a vast amount of money to park it for the other 97 per cent of the time”.

Related post

Why own an asset that is not utilised 96% of the time?

Especially in S’pore unless u are paid like a PAP minister.

According to the financial-ratings agency Fitch, the average car spends 96% of its usable life parked in a garage or on the street. When maintenance, depreciation, insurance and running costs are totted up, cars are the most underutilised asset most consumers own.

Economist blog

Old private flats’ value can also fall off a cliff

It’s all about using CPF to pay off the bank mortgage. And don’t count on an en bloc sale to keep the value of flat up. The older the group of flats, the more the developer has to pay to govt to top up to 99 years. He’ll bid accordingly. He’s not like Bill Ng, the ATM (or one-armed bandit) that keeps on paying and paying.

Sometime back I featured this great graphic from ST on how the value of a HDB flat will fall over a cliff after the first 35 years. Extracted from http://www.straitstimes.com/opinion/will-you-still-love-your-hdb-flat-when-its-over-64.

But private 99 year old properties are different right?

The reasoning of the salesmen is that banks usually finance leaseholds if the property to have a remaining lease of 30 years on the maturity of the loan

According to OCBC, when it comes to financing of leasehold properties, the requirement is for the property to have a remaining lease of 30 years on the maturity of the loan. “The quantum of loan to be granted is dependent on the bank’s credit assessment, which includes assessment of debt servicing capacity,” says a spokesman in an email response.

https://www.theedgeproperty.com.sg/content/perils-owning-ageing-leasehold-properties

But what these people don’t say is that banks only do this if borrowers can use CPF monies. Banks generally provide financing for the purchase of a leasehold property if home buyers are able to use their CPF.

This is the tricky bit because according to the article I linked to above

CPF has several ways to calculate this [eligibility]…

The first formula is based on the sum of the age of the applicant and the remaining lease on the property. The total must be equal to or exceed 80 years, says Huang. For instance, if the buyer is 40 and the remaining lease on the property is also 40 years, the total is 80 years. This means that the buyer is eligible to use his CPF contribution for the purchase of the leasehold property.

If the buyer is only 30, however, and the remaining lease on the property is 40 years, the total equals 70 years. In this case, the buyer will not be eligible to use his CPF contribution towards the purchase of the leasehold property. “This implies that young people cannot use their CPF to buy old leasehold properties,” says Huang.

And

CPF also requires that a property have a remaining lease of at least 60 years. If the lease on a property is below 60 years, but more than 30 years, a valuation limit is set on the amount of CPF contribution that can go towards the payment of the property.

… the numerator in the ratio will be the remaining lease on the property when the purchaser turns 55. Assuming the buyer is 40 today and the remaining lease on the property he wants to buy is also 40 years, when he turns 55, the remaining lease will be 25 years. The denominator will be the remaining lease today, which is 40 years. The ratio of 25 years/40 years is equivalent to 62.5%.

This means if the property purchase price is $1 million, the buyer can withdraw from his CPF up to a limit of 62.5% of the value, that is, $625,000, explains Huang. “And that percentage is the valuation limit.”

What all this means is that there’s a restricted pool of buyers for older flats if there are problems using CPF monies.

So what? Can always have collective sale right? The article helpfully disabuses

JLL’s Tan advises owners of private residential projects on leasehold sites to be aware that, as the lease gets shorter, the differential premium that developers have to pay gets higher. “This will eat into their sale price,” he says.

Using a recent HUDC enbloc sale

For Rio Casa, if the differential premiums were included, the total land cost would amount to $649.8 million, according to SLP Research (see chart). SLP’s Mak points out that the differential premiums account for about 30% of the total land cost for some of these HUDC estates.

So don’t play, play. Think.

 

CPF Life: False alarm that Std is now better than Basic

Here I reported that a far cat rentier (once a doctor) says that the Standard could now be better given “tweaks” over the yrs that were not made public

I said I’d asked an expert to check.

He hasn’t responded but Chris Kuan while no financial planner but a now an ex-capital markets guy who I quoted here a few yrs ago as saying that punters should opt for the Basic not the Standard plan did some calculations.

Juz spreadsheet up the present MS of 166k compounding at 4% with 1st 60k extra 1% and 1st 30k additional 1%. Then use the 1.28k per month payout from 65 onwards on a ror of 4.25%. The Standard Plan break even age remains at 89 where it was when I did the same calc a couple of years back. So I was wrong – nothing has changed. The difficulty in assessing the Basic and Standard Plan is while we know that at age 85 there is no more bequest under the Standard Plan and there is under the Basic Plan but what we don’t know is at what age does the bequest actually cease under both plans.

So “Basic good, Standard bad” still stands.

Achtung: Default Standard CPF Life might be the better one

Not the Basic one.

But really who knows, if the PAP administration decides to make “tweaks” that are not made public?

This blog and others has alwats argued that punters should opt for the Basic not the Standard plan. 

A reader (smart guy, trained as MD) now says that the Standard could now be better given “tweaks” over the yrsthat were not made public. I’ve asked an expert to try to confirm or deny the validity of the claim.

Meanwhile what this doctor (now fat cat rentier) says is the truth, the absolute truth: the PAP can suka suka “tweak” things in private and change the facts:

[Lease Buyback Scheme]  suffers from the same problem as CPF Life — opaque internal workings & computations and subject to unannounced changes in computations & internal assumptions. E.g. CPF Life internal annuity calculations have changed a couple of times since it launched — the monthly payouts as calculated by the CPF Life calculator has changed even with same parameters in just a few short years. Previously, the Basic CPF Life option was the better no-brainer choice. Now the default Standard CPF Life is arguably better with a significantly higher quantum in monthly payouts. Imagine those old folks that took up the Basic plan earlier…

So rather focus on the “Marxist detainees” and their unhappiness, those opposed to the PAP should focus on rice-and-veggies issues. But then they look down on those who can afford only these basic Asian foods.

HDB flats: 35 is a dangerous age

It’s all about financing.

Here’s a great graphic from ST on how the value of a HDB flat will fall over a cliff after the first 35 years. Extracted from http://www.straitstimes.com/opinion/will-you-still-love-your-hdb-flat-when-its-over-64.

 

Paying peanuts pays-off for college

Houghton College uses low-cost index funds and mutual funds and its returns beat Harvard with its millionaire in-house managers and external filthy rich hedgies. Btw, after ten years of lagging investment returns, Harvard’s US$35.7 billion endowment is planning to cut its current staff of 230 in half by the end of 2017.

From NYT Dealbook

COMMON SENSE

Endowment Sweepstakes: How Tiny Houghton College Beat Harvard

By JAMES B. STEWART

Houghton College outperformed colleges with the biggest endowments by getting out of hedge funds and moving to a mix of low-cost index funds and mutual funds.

Think of our PAP ministers’ pretentions on why they deserve their millions in salaries.

Financial planning: Ever heard of “phi”?

From NYT’s Dealbook

WEALTH MATTERS

Aligning Your Investments With What Motivates You

By PAUL SULLIVAN

In finance, phi is a way for investors to quantify how their motivations, or the motivations of their money managers, will affect long-term returns.

 

What monkeys, bears and squirrels do differently

The squirrels are natural PAP supporters, the bears are the swing voters and natural WP voters, and the monkeys are the cybernuts and SDP supporters.

Let me explain:

The monkeys eat up all the bananas they possess.

The bears eat most of their berries, and store up those left over.

But the squirrels do something different entirely. Before eating any of their acorns, they save 20% of them, and learn to live on those that remain.

Those saved acorns grow into oak trees, with more acorns.

Seriously, the story is about saving voting PAP.

“The point is that saving doesn’t mean you can’t enjoy things in life,” says Mr Gardner.

“But it’s about budgeting. You get 10 and bank two. That two is what will help you in the future.”

So how does this acorn philosophy work in practice?

Stop buying, for example, one cup of takeaway coffee every day, he recommends.

http://www.bbc.com/news/business-37798513

Beginners’ Guide to Financial Planning and Insurance

From the desk of Tan Kin Lian, retired CEO of NTUC Income, and an actuary.

Financial Services Consumer Association

I have updated a few articles on financial planning and insurance in the FISCA website. They answered questions that were sent to me by ordinary people. You may find these articles to be useful and relevant.

Click here to view these articles. 

I have also produced about 10 videos covering different topics on financial planning and insurance. Each video is about 5 to 10 minutes. One video is longer.

Click here to view these videos.

I invite you to view to vote on the issues listed here. You will win a book prize – Financial Planning for Young People.

If you are tired of receiving my messages, you can click on the link below to unsubscribe from all future mailings. 

Click here to unsubscribe from all future mailings.

Tan Kin Lian

Not not sponsored. But public service announcement.

Medishield: Expert on whether to buy integrated plans

 

Younger S’poreans who can’t afford to misspend money on useless, unnecessary stuff should heed the wise words of Tan Kin Lian the ex-CEO of NTUC Income who was sadly persuaded by the likes of Goh Meng Seng to stand for president.

The message basically is “Don’t buy Integrated Plans. Juz rely on Medishield for all its flaws”:

When you buy an integrated plan, or go to a non-subsidized ward*, you are helping the government to reduce its subsidy. You get a ward with 4 patients** instead of 6 patients*** and have the chance to choose your doctor. In most cases, these differences do not really matter to the quality of the care. But you are paying a much bigger bill (due to lower government subsidy) and you have to pay a much higher premium (maybe 2 or 3 times) to cover this difference. Is this really necessary?

http://tankinlian.blogspot.sg/2016/10/bad-design-for-medishield-life.html

(Emphasis mine.)

Someone who realised the folly of an integrated plan and wanted to revert was told

It is easy for you to convert back to Medishield Life. Call the insurance company and ask them if they will give you a pro-rata refund for the premium that you have paid for the integrated plan. If they can, you can convert immediately. If no, you can convert to Medishield Life at the next renewal date.

http://tankinlian.blogspot.sg/2016/10/move-back-to-medishield-life.html

———————————————

Healthcare for cheapskates

Older S’poreans who are well-off but cheapskates (otherwise known as “value for money” folks of which I’m one) use SingHealth, go to B2 wards and only have Medishield. The really hard-core try for C class but get found out and are whipped publicly.

Now their secrets on B2 and Medishield is public knowledge.

For those who voted against the PAP using SingHealth, B2 and only Medishield has another advantage. U can give the PAP the finger and have your cake and eat it. Eat yr heart out Queen Jos: us peasants (plebs) can be like millionaire ministers too. Have cake and eat it. And give the PAP the finger.

---

More on TKL

He lost his deposit in the PE, and thus indirectly helped the PAP’s prefered candidate to win. Bad advice and personal quirks made him look like a clown. He’s eccentric but no clown. I should know. I helped him help the mini-bonders (though sadly we didn’t help them that much) so I should know. But I fell out with him when he listened to “bad” advice. But to be fair, I’m not an easy person to work with.

Since the PE, he’s focused on his core competency of dishing out financial advice, Example

Financial Services Consumer Association

I have updated a few articles on financial planning and insurance in the FISCA website. They answered questions that were sent to me by ordinary people. You may find these articles to be useful and relevant.

Click here to view these articles. 

I have also produced about 10 videos covering different topics on financial planning and insurance. Each video is about 5 to 10 minutes. One video is longer.

Click here to view these videos.

I invite you to view to vote on the issues listed here. You will win a book prize – Financial Planning for Young People.

If you are tired of receiving my messages, you can click on the link below to unsubscribe from all future mailings. 

Click here to unsubscribe from all future mailings.

Tan Kin Lian
——————————

*The real challenge is in dealing with treatment in a non-subsidized ward, i.e. B1 and A ward. The term “non-subsidized” is not a proper description. There is a small subsidy in B1 wards. TKL

**B1 has four patients to a room and has aircon.

***B2 has six patients to a room and has no aircon. C (“Cattle”?) class has nine to a room.

“Don’t be a cheapskate”, Buffett says

The trouble is that there are very few people who knows what is a “wonderful co.” and what is a “fair price”.

So being a cheapskate may be a better option for most of us (self included).

Expecting us to feel sorry for him?

Someone wrote to Gilbert Goh saying that he lost his 150k a year job to a FT prepared to accept 40% less. Losing my job was brutal for me financially since I am paying for 2 properties and a car.

I also have a S$100K unsecured loan debt which I took on to pay the deposit for my second home. My wife isn’t working and I have school going children. The first thing I did was to adjust my salary expectations up to 50%. Within 1 week I have applied to almost 500 jobs but none of them successful or called for an interview.

http://www.transitioning.org/2016/07/28/fourth-generation-singaporean-lost-his-150000-salary-job-to-his-foreign-subordinate/

Sorry leh. In my book. someone only earning $150,000 a year, whose wife is not working,, with a car loan (presumably), kids, and having to borrow to finance his second property deposit, should not be tempting fate by “owning” two properties. At the very least, his wife should be earning $75,000 a year, and the deposit financed by savings before he and his wife even think of a second property.

But I feel sorry for him for having a S’porean wife (I assume she’s not a FT). If she’s the typical S’porean woman, she’ll be telling the world that she has a useless husband. I’ve seen too many cases of unemployed husbands being dissed by their S’porean wives. It’s a blood sport.

 

 

The real aristocrats

Beats S&P which in tirn brats hedge funds

 

Gem of an investment insight

“There is one vital difference between gambling and investing. You cannot logically explain why, for example, a given set of cards turned out in a game of poker, but you can work backwards and explain why a stock had to fall. And I think here there is a trap is for unwitting investors. Because the past can be analysed and explained, we think the future can be too.”
By Trutheludes on Betting and investment both require skill and luck

FT reader

“A high yield often indicates operating problems”

“A high yield often indicates operating problems. One should look for companies that have a long record of dividend growth, but which at the same time have reinvested into their businesses. This is essential for growth in earnings,” fund mgr quoted in FT.

Remember Reits are different, They are leveraged and must pay out most of their profits. If you own Reits like me, you’ll have to pay the devil’s price eventually: rights issues. And thaz assuming things go well.