Early Retirement SG

How to Easily Beat the STI Index

29/5/2020

As usual, please don't take it as an indication to buy or sell your investments. Please do your own research.

Generally, I like ETFs. They are simple ways for retail investors to buy a diversified slice of the economy.
Also, it's generally noted that Index trackers perform better over active managers due to increased fees for active managers. Even Warren Buffet recommends buying ETFs as an investment.

I've been thinking though...
The STI Index isn't a basket of wonderful stocks.
It's a basket of stocks picked by some "experts" to give a general feel of the Singapore economy.
So stocks like CapitaLand, Singapore Airlines, SPH, etc are listed in the index cos overall, the performance of the Singapore economy is also linked with these stocks.

So....

To beat the index probably isn't so hard, just remove 1 stock which probably will under perform the general market.
So for example, if you think that SPH/SIA is probably going to underperform the general index, then just remove SPH, and/or Singapore Airlines, and follow the same weightage as the index for the remaining 28 constituent stocks, then most probably you'll have a better return than the STI index as a whole.
Except of course, it's probably not so easy to rebalance the stocks regularly like how the index does, cos the index is value weighted so as different stocks change in price, the proportion of the stock in the index will change.
But, theoretically, by doing this, you can probably beat the STI index... just that it probably won't be beating the STI index by much, SIA or SPH is only around 3% of the STI index.
Hypothetically, if 97% of the index rises by 10%, and the 3% weaker stocks remains constant, overall the index would have risen by 9.7%.
Whereas if you craft your own portfolio similar to the index but excluding the weak stocks, then you'll get the full 10% return. Cos you exclude the generally weaker stocks. So you could potentially beat the STI Index by 0.3% cos you exclude the "losers".

Hey I said it's easy to beat the index, I didn't say beat it by how much.
You can alternatively, remove 1 or 2 weak stocks from the index, and include 1 or 2 good stocks which are good, but aren't in the index.
But of course the more decisions you have to make, the more chances of making mistakes and not beating the index.
Similarly, you can remove 10 underperforming stocks and add 10 higher performance stocks to the portfolio. But the more you deviate from the STI index, the higher chance that there will be mistakes and you end up underperforming the Index.

So I think it's pretty easy to beat the STI Index... Just make a small tweek. But once you try to change too much, then there is higher risk of errors resulting in underperformance.
What happens is generally, you'll end up getting close to "market returns", but with a small percentage "alpha" over just buying the index.

So I mentioned above that it's going to be troublesome to rebalance the new portfolio cos you need to buy 29 of the same STI Index stocks... Cos as a retail investor it's not really feasible to do that regularly. Another way to probably create a portfolio beating the STI Index, is to use 99% of your portfolio money to buy the STI ETF. Then with the remaining 1% of your portfolio funds, buy a "better" stock.
For example, maybe you feel XYZ company tends to perform better than the overall index. So you buy 99% STI ETF, and 1% XYZ stock.
So once again, you get generally market returns cos 99% of your funds are allocated to the ETF, but 1% you allocate to a potentially better stock. Could even be one of the same stocks as within the STI Index. Meaning you buy a heavier weightage of a potentially better stock.
There are some quite obvious stocks within the STI which regularly outperform other stocks within the STI. (I'm not gonna say which...)

So there you have it. An easy way to probably beat the STI Index. Simply put, just buy similar to the STI Index but change a small bit.
Same same but different.

Once again...
These thoughts are my own analysis and thoughts, please do not use it as an indication to buy or sell. Please do your own research before making any decisions.

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Critical Illnesses following COVID Infection

28/5/2020

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Today's post is a sponsored post not written by me.

Living a fairly good life isn’t all that hard. It just takes some planning and doing as mentioned in ERSG's recent post. But as much as we can plan for our future, unforeseen circumstances might still occur.

With the economy opening up around the world, without the infection rate going down significantly, it is understandable for many people to feel uneasy.

Research and due diligence is always the key as we all got to plan for the worst and expect the best.

Further web reading brought me to an article with the local news media stating that in Jin Yintan hospital in Wuhan 5 percent of COVID-19 patients developed critical illness, including septic shock and multi-organ failure.

This led me on a hunt for more known potential complication of COVID-19.
According to webmd.com, about 1 in 6 that are infected will have life-threatening complications.

If I were to state, these are the ones that caught my attention:
1) Acute Kidney Injury
-If your kidneys stop working properly, you might get dialysis until your kidneys get back to working normally. But sometimes, the damage doesn’t heal and people get chronic kidney disease, which would need to be managed long term.
2) Acute Respiratory Failure
-when that happens, your lungs can't release oxygen into your blood.
3)Acute Respiratory Distress Syndrome (ARDS)
-With ARDS, the lungs are so severely damaged that fluid begins to leak into them. You may need a ventilator just to breathe.
4) Acute Cardiac Injury
-Studies of people in China who were hospitalized with COVID-19 found that some developed heart problems, including arrhythmia.
5)Acute Liver Injury
-Research shows that the most seriously ill patients run the greatest risk of liver damage.

Why did these catch my eyes? Because they are ACUTE and not cute at all!
Medical Definition of Acute:
Acute often also connotes an illness that is of short duration, rapidly progressive, and in need of urgent care.
The above means that the infection can worsen rapidly. With the probability of COVID-19 infections leading potential permanent organ damage.

Also, those without critical illness coverage or looking to enhance theirs should wait no more.
This is because, from 26 August 2020 onwards, all critical illness policies sold in Singapore must comply with the 2019 framework. Of the 37 defined critical illnesses, changes have been made to 14 headers and 21 definitions. More information can be found on
www.lia.org.sg/industry-guidelines/health-insurance/2019/lia-critical-illness-ci-framework-2019/.

For those who want to find out or prefer to have a financial adviser to share with you the details, feel free to complete the form and you will be served: https://bit.ly/3c8VnNc

P.S. getting insurance won’t prevent you from getting the infection but it sure does protect your finances & your retirement funds!

The above post is a sponsored post not written by ERSG.
ERSG has not verified the financial advisory company nor is a client of the company.
Please do your own personal due diligence when engaging in a financial adviser or meeting up with anyone.

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Is CapitaLand Mall Trust A BUY?

27/5/2020

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As usual, please don't take it as an indication to buy or sell your investments. Please do your own research.

On 12 October 2017, I wrote an article about CapitaLand Mall Trust (CMT)
Why I think CapitaLand Mall Trust is an awesome investment
The price at that time was $2.05 and the expected dividend yield was 5.46%

2.5 years has passed.

30 June 2019, CMT reached a high of $2.74.
And on 22 May 2020, the price is around $1.85. (I wrote this post on 22 May)

I always have a soft spot for REITs. I bought many of them in 2008 when not many people knew much about them, so the yields were really attractive.
One of my favourite REIT is CMT. Simply because, it's all around Singapore. It's everywhere, we all use it. Most likely we will go to a CapitaLand Mall once a week...
I personally think it's probably one of the most "idiot proof" stable investments.

That was 3 months ago...
So now what? How now? Singapore has been on CB for a month or so.
Many shops are closed.
Is CMT a good buy now? What do I feel?

Ok, as usual, I use estimates. Cos... the market is about estimates, there's no one who can predict anything accurately. If it's a good deal, then it's a good deal, if I have to calculate to the cent to determine if it's a good deal, then it's probably not a good deal.

The price of CMT now is $1.85.
If I take the past 4 dividends, I get $0.0994.
Which gives me 5.37% yield.
This is IF CMT can continue to provide the same yield going forward.
Which obviously seems unlikely.

Just by looking at these numbers, I'm already not feeling much love.
Remember, when I wrote the post in 2017, when things in life were pretty average, no COVID, if I paid $2.05, I would get 5.46% dividend yield.

BUT YET...
Now, IF I pay $1.85, I can only get 5.37% yield BUT ONLY IF CMT continues providing a similar dividend rate. Which personally, I feel that CMT will likely drop dividend at least for a few distributions.

During this pandemic, there are only a few scenarios for tenants and landlords.
1. Tenants pay diligently.
2. Tenants go broke and default
- Landlords have a contract and MAY be able to sue
- Even if they have a contract, tenants may have no money to sue
3. They settle somewhere in-between
- CMT could potentially give more time to pay rent
- CMT could give rebates to tenants due to poor foot fall in the mall
- Others

So for around 2 months of CB, many shops are closed. How many tenants can continue to pay rent diligently?
Maybe only NTUC and banks.
Most other shops have little to NO REVENUE. So scenario 2 and 3 are most likely.
Even AFTER reopening, many stores, example restaurants, retail outlets, movie theaters will still have low patronage. Restaurants will still have to have social distancing in for their seating.
All these will lead to lower revenues for shops and thus, the tenants will not be able to pay CMT.
There's a good chance that CMT will work out something with the retailers rather than have them go broke and close down.

So let's say, during 2 months of CB and the next 4 months, for a total of 6 mths this year, CMT sees a 10%-20% reduction in total revenue. Could be due to tenants not paying, rebates to tenants, running promotions, tenants closing down, whatever possible thing. Basically for 6 months, their revenue has dropped for 10%-20%

Looking at numbers from CapitaLand Mall webpage and some of my own calculations...

So from the webpage I can obtain Jan-Mar 2020 numbers.
I multiplied them by 4 to obtain the numbers in Column E.
To obtain the "Distributable Income", I used 96% of "Amt Avail for Distribution", which is the ratio used in 2018 and 2019, so I just took a simple proportion.
So Column E is my projected 2020 numbers for a year without COVID.

In Column G, I have reduced the revenue by 5% (10% reduction for 6 mths is 5%).
And for distributable income I scale it down by 96% also.
For Column I, I do the same but reducing revenue by 10% (20% reduction for 6 mths is 10%).
Based on the respective reduced distributable income, I compare it against 2019 numbers and scale the dividends down by the same amount.

So... My projection is...
IF CMT experiences a reduction of revenue or 10% for 6 months, the projected dividend for the year will be $0.0997.
IF CMT experiences a reduction of revenue or 20% for 6 months, the projected dividend for the year will be $0.0891.

If we look at a dividend vs price chart...

At the current price of $1.85.
IF the dividend really ends up at $0.0997 for 2020, then the yield will be around 5.4%.
IF the dividend ends up at $0.0891 for 2020, then the yield will end up at around 4.8%.

Based on this, it appears that currently the market is pricing around a 5% reduction in revenue for CMT for this year. True or not? Who's to know?
It really depends on whether you believe that this COVID situation will last longer or shorter, and how much loss of revenue CMT will have to suffer.

Furthermore, any new tenants or renewals will probably be at a lower rate as demand for retail space would probably remain low for at least a year until the COVID issue really blows over, IF it ever blows over.

Personally, I think that AT BEST, at the price of $1.85, CapitaLand Mall Trust is just an "OK" buy. It's not a great deal. I don't think it's even a good deal.
All I can say is, most likely, but not confirm, in the long run, CMT will likely recover in terms of price and dividend so buying at $1.85, eventually, in the long run, most likely in a couple of years, it will likely be above this price.
So chances are, won't lose money at this price in a couple of years. Although, there could be other more attractive investments with better returns in the same investment horizon.

I currently don't own any CapitaLand Mall stocks, but I am monitoring it.

Once again...
These thoughts are my own analysis and thinking about CapitaLand Mall Trust, please do not use it as an indication to buy or sell. Please do your own research before making any decisions.

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Life Really Ain't So Hard

26/5/2020

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This period seems to be a tough time for a lot of people.
Many people have lost their jobs. In the US, in SG, probably many in other countries as well.
And yet, I do wonder... is life really so hard? That the loss of a job spells disaster?

I mean... I've always thought, just live a normal life, live within your means. Generally everything works out. Even if you lose your job. You're supposed to have savings and reserves.
I suppose the key word is planning.
Plan for the worst, expect the best.

Ok I know I've been pretty privileged. I did pretty well in my studies, got into Uni, landed a cushy job.
Yet I wonder, could someone else who did not start out with the same privileges as me, could this person live a pretty good life and also be secure during critical periods in their life?
I'm not talking about retiring early. I'm just thinking... is life really so hard? Such that when issues crop up, people have no choice but to get help or sink?

The thing is... with a household income of around $7k, I believe it is highly possible to live a pretty good life with kids. As long as the family has planned their finances properly.
Don't overextend their housing loan, buy an affordable HDB.
Don't go on expensive trips, or sacrifice many small trips and save for many years to go for a more expensive trip.
Don't buy a car. Unless you can afford it.
Pay off the housing loan as soon as possible.
Buy adequate insurance coverage.
SAVE MONTHLY!

All these seems so easy and so normal to me. And yet, so many people don't do that. Somehow, there are many people who don't have much ready cash on hand.
When they get their pay, they spend it quickly, they change phones regularly, buy the latest toys, small things here and there, and before the next payday, they have run out of money.

Sounds impossible? But it's happening all the time.
Even in the US, people are paid weekly or once per fortnight. Cos... they can't hold on to their cash. They just spend it. Also, tax is deducted from their paycheck. They get 70% of their pay every week, and only at the end of the year, when they file their taxes, then they get their tax rebates for the tax that they have overpaid. Cos when it's time to pay tax, most people don't have the money to pay, so the Government works with employers to deduct the tax and the employee gets paid the remaining.

This way of living where people don't hang on to money easily, also seems very common in SG and other parts of the world.
WHY?
Most (most, not all) people in SG have enough to eat, a place to stay, clothes and school.
But instead of saving for a rainy day, they spend.
I mean, IF someone is from a low income family, all the more they need to plan right? But yet they don't. Most of the time, they get comfortable where they are and don't strive to reach the next level of security.
Even a middle income family would easily be spending how much they earn, without saving for a rainy day. It's not rare to hear stories of middle income families, or so they thought, ending up in a bad situation when the parent loses their job, or falls ill. Resulting in a downward spiral of their situation until they end up struggling to make ends meet.
And even a high income family could be straddled in debt, housing debt, car debt, renovation debt, etc.
Such that a loss of job, or an critical illness in the family would be catastrophic.

In SG, I would think the question isn't "Can it be done?", but rather, "Do you want to do it?"
Remember, I'm not talking about early retirement. I'm just talking about overall financial security and living a fairly good life, even if this person works and spends fairly normally and retires at 60+. Which is what most people do.

Now... Of course there are MANY Singaporeans who are doing just that... Living a simple normal life.
Of course right? If not, then there would be many homeless on the streets.
The very fact that many people have a place to stay and food to eat, etc. Is indicative that most people are living pretty well day to day.
HOWEVER, the main problem comes when things happen. Like now, when many jobs are lost. Or when a family member falls ill and they don't have insurance coverage.
These things are highly preventable.

Being financially secure, isn't just about having enough money to spend during the good days. Being financially secure also means having the ability to tide through bad periods, or down times.

Living a fairly stable, financially secure life, with a comfortable retirement without having to rely on their kids... That's extremely achievable in Singapore.
Just work in a good enough job, NOT A DEAD END JOB. If the person can't get a good enough job, then, well, upgrade until they can. Like a receptionist earning $1,200... is hardly a job to get financial stability in the long run. Or a security guard. I mean, ok these are respectable jobs. I don't look down on them, someone's gotta do them. But really, these jobs aren't going to get this person to the next level in life. If they are looking to get at least a bit of security and stability, these just aren't the jobs for it.
Save hard, even if this person doesn't invest, they could buy a long term endowment plan, which probably gives them around 3% return over 25-30 years.
Get properly insured. Hospitalization care and/or other forms of life insurance.
Furthermore, if this person has a "good enough" job, their job will probably be able to take care of them medically AND many good companies don't fire so easily, depending on the type of work.
Get an affordable place to stay. Don't over extend the housing debt.
LIVE WITHIN THEIR MEANS!!!

The thing is, there are many people just "getting by" and not planning for the future, and yet... it's not that hard to do something about. It's really whether they want to or not.

Now before people start screaming, "Oh there are people in this situation, or that situation, etc..."
Yes I understand there are people stuck in situations where they start off on a bad foot. Parents are sick, or owing loan sharks money etc... Yes, there are people who are stuck.

BUT, there are people who AREN'T stuck. They just don't want to do anything about their situation, they are comfortable with their life, their dead end job, day to day, things are "OK", and during normal days, they don't make an effort to try to get ahead. Such that when it "rains", like now, and when people are losing their jobs, they aren't ready for the "storm".

The thing is... Living a fairly good life isn't really all that hard. It just takes some planning and doing.

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Back to Writing?

25/5/2020

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Hmmm...
I've been quiet recently. Basically cos I'm lazy to post.
And also there's nothing much to write about. Things have been depressing.
BUT, I think... maybe I want to force myself to make up a post maybe 4 times a week on week days, even if it's just simple thoughts and short posts.
Makes me have the discipline to keep my thoughts flowing and put my thoughts down in writing. Cos I realized that this blog is like my diary, when I go back and read posts 1 year back or 2 years back, makes me think about the person I used to be when I made that post. Or certain ideas or thoughts that I used to have and have already forgotten about.

Things have been depressing recently.
No real good news in the media and nothing much to look forward to or hope for.
For me, there's not much hope.

Here are my thoughts running through my mind recently.
I'm stuck in my apartment.
I miss my old life in Singapore. Friends family, lifestyle.
There's low chance I'll return to SG anytime soon, for holiday or permanently.
Even if there are flights out of US to SG, I doubt I'll take them, cos I'm concerned I'd potentially get COVID.
Even if I take a flight to SG, I'll be quarantined for 14 days, so going for a holiday/home trip is wasted cos I spend my time stuck in a room.
I think maybe the earliest time I can consider returning to SG for home visit may be in Sep or later?
Also, my thoughts are, most likely COVID will be here to stay, so even if I fly back to SG later in this year, I'll still run the risk of getting it in the plane. Better be mentally prepared.

US is reopening. Even though cases aren't getting any less.
By right it's ok to go out and walk around. But I tend to avoid it.
I can't/don't want to move around much over here. Maybe it's just me feeling self conscious as an Asian.
Or maybe I'm paranoid. Cos I don't want to suay suay kena COVID, cos I don't know how their healthcare system will treat me as a foreigner.
Also... potential racism as I mentioned in my previous post.
As I said, maybe I'm just being paranoid.

Markets have been erratic.
US jobless rate is 15% but markets are recovering.
I'm still waiting. But I'm getting impatient and FOMO.
Fear, doubts, did I miss the boat?
Bad news in the media but markets react differently.
No good news from this angle.

US politics is sad to read about.
It's a mess, also no good news at that level.
It's disgusting and messy and corrupt and full of SH!T.
Money is the new "dictatorship". As long as you have money you can do anything.
Maybe it's always been this way just that I don't read about it enough or it's not so open such that everyone can see it happening.

Maybe it's just cabin fever and I'm just getting easily depressed.

The thing that keeps me happy these days is food.
I try to eat some chocolates everyday. I stocked up on kit-kat.
I didn't buy enough potato chips. I finished them already. Should have bought more. Maybe I'll go buy more in a couple of week's time.
It's these snacks that keep my mood up.

Sometimes I pop a frozen pizza into the oven, or a have an instant noodle day.
These changes in food are what makes things a bit better.
I don't go out and buy stuff cos... same thing, don't know the hygiene levels of eateries.
Really, in the US, things are really cowboy, they can tell you that they have face mask, take all the precautions, etc... but that's just marketing. On the ground level anything goes, what happens behind the scenes could be anything. I really don't trust how Americans do business.
So I do miss eating out, or eating food that's prepared by someone else, like fried chicken or fast food, etc.

Things aren't as nice as what retirement should be. It's not the same.
I mean... previously when I did "nothing" on a daily basis. I still had the option of strolling around the supermarket without feeling self conscious, going to the gun range to do some shooting, just hanging downstairs by the lobby and chatting with the apartment staff.

I think the situation in SG... it's different. The cases everyday aren't a lot, except for foreign workers.
I think before CB, many people still went out. And most likely after CB, people will go out and lead maybe a 70% similar lifestyle as before.
Maybe in SG, I'd not feel self conscious, the fear that maybe someone will come and look for trouble as I'm out at the supermarket, just cos I'm Asian.
Based on reports in SG, the thing is... community spread really isn't a lot, around 10 a day? That's hardly anything. It really is like people getting any other kind of infectious disease.

Hopefully, in the coming days/weeks, there will be more things for me to look forward to.
Cos recently, things are just looking down for me over here. And I'm reallly quite sian about the situation.

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Life in Texas during COVID

16/5/2020

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I haven't been writing recently. Cos life has been boring.
But I think that's a misunderstanding on my part.
Cos to me it's boring but readers don't know that. To me, what I do is normal and boring to me, so I thought no need to write anything, but how would my readers in SG know that....

My wife has been working from home since 17 March.
We actually were planning in Feb to take a trip home in March. But after SG declared Dorsconn Orange, we decided to postpone our home trip.

What's pretty cool is that when US started to lock down, the SG embassy contacted us to update us on the situation and give us warnings and ask if we are deciding to return to SG. We did register ourselves with the embassy when we reached US though, we did that when we were in Paris as well.
We decided that it would just be better to stay put in the US, cos even if we go back to SG, we would be quarantined for 14 days so there's no real point in flying back to SG just to be holed up in a hotel room.
And some people may think staying in a hotel is fun, but seriously, after all the biz trips, I've really grown tired of being stuck in a hotel room.
Furthermore, my current apartment is around the same size as my home in SG around 800 sqft so it's pretty comfortable.

For us, life is pretty much normal. Nothing much happening.
We wake up, and just stay at home. My wife works, I do whatever I want, play games, watch Youtube, movies, prep meals, whatever...

Early in the situation, when SG declared Dorsconn Orange, I had some expectation that the situation might get worse, so I stocked up 2 months of food in my fridge, rice and canned food and bottled water.
Even if the situation didn't get worse, I would still consume the food eventually, so it's not just stocking up for no use. The food wouldn't be wasted in any case.
Furthermore, it's pretty normal for people in Houston to stock up food and water cos of hurricanes. Cos when the rain comes, it's common for the roads to flood. So transport to purchase food might be difficult.
I wrote about that here.

It was a good thing we stocked up early. Cos when the trouble really started to hit, many people went to the supermarket to stock up whereas I was already ready. I didn't want to be packed in a supermarket where there are so many people during a pandemic.

My apartment has amenities. Swimming pool, coffee machine, pool table, lounge, bbq areas, etc... All these were shut down. We pay US$35 per month as an amenity charge. But the apartment management has waived this fee during this period. We usually only use the coffee machine regularly so it's a pity that it's been shut down. Luckily, I brought over some instant coffee from SG. The instant coffee was free in SG purchased using free vouchers. Bought them for use in Paris but ended up having to use them in the US.

2 weeks after the first wave of people who rushed to stock up at supermarkets, the crowds died down.
Even though I had enough food stocked up, I went to stock up more food at the supermarket. I now have enough for around 4 months.
I've never really had to queue up at the supermarkets. I go in the morning. There's little people. Don't need to queue to get in, and don't need to queue to pay.
For me, stocking up whenever I can is important. I go every 2-3 weeks. Cos never know when or how long this issue is going to continue for. Don't want to have a situation where I'm down to 1 month of food when I realize that the issue has gotten worse and yet more people are out and about. Which looks like what's going to happen soon
I'm going to be more cautious for the next month or so. I'll prob not go out or buy groceries during this month or so. Cos Texas is opening up, but yet the cases are still high. So more people will be going supermarket and everywhere else. So for me, I think stocking up has been a good idea, cos I don't want to be going out during this period. Maybe see how the situation turns out before deciding how to proceed.

The problem is, I'm in the US. Even though I have insurance coverage and all that. I still don't know how they will treat a foreigner in such a situation. So I don't want to end up having to go to hospital or anything if I can avoid it.

I also try not to go out unnecessarily. There's racism. There's not a lot, but I've read about it. I haven't faced any myself. But I rather avoid it then to be sorry. It's just going to be unpleasant. Especially during this period. Cos there are also a lot of people who have lost their jobs looking for someone to blame. And who better to blame than the Asian guy at the supermarket? I'm easy pickings for someone looking for trouble.
So for me, I think it's not worth the trouble for the time being until this whole thing blows over.

Even though the cases are on the rise in Texas, many people are still respectful of the stay at home guidelines. So people really don't go out much. Except that even though only a small percentage of people ignore the stay at home recommendations, it's enough for the virus to keep spreading so it's just unfortunate.
Due to less people going out, less people driving, the car insurance companies are giving rebates for insurance premiums. I've gotten a 20% rebate for my auto insurance policy.
Auto insurance isn't cheap. So a 20% is quite significant for me. I pay US$233 per month for auto insurance. Different companies give different rebates. Some more some less.

It's only been 2 months since my wife started working at home.
Initially we were thinking it's better to be in the US than return to SG.
Cos the spread in SG is easier due to the population per land ratio. Also during the mass outbreak in SG, we were thinking "Woah heng ar didn't go back."
But now, US is reopening and things are expected to get worse. So I am pretty concerned.

Life is still pretty much normal for us, just being cooped up in the apartment. It is boring.
I try to cook different things everyday. I bought frozen pizza from Walmart. It's pretty good US$6 for stuffed crust pizza. Better than any frozen pizza available in SG. It helps to break the monotony of my cooking.
My wife works more than normal during this period. Cos there's nothing to do. So just stay on the laptop and continue working. Otherwise, it's watching Korean dramas and other shows. Nothing much to do cos we're stuck at home.

Actually, we CAN go out. It's not like there aren't places to go and wander for a bit, like parks, other open areas, etc... But as I said... well racism, and don't want to be out unnecessarily and get infected.
Maybe I'm being paranoid, or more careful than is really necessary.
But for me, my 2 main concerns are, 1, potential racism, and 2, IF any of us gets the virus, most likely both of us will be infected at the same time, and we don't know how the healthcare system will treat us as foreigners.
The feeling of insecurity is quite unnerving.

The apartment complex has already started unlocking measures.
They have reopened a bunch of the amenities. But I'm probably not going to hang around those areas.
Even as I type this, there are reports of new hot spots in the US.
https://www.yahoo.com/news/newly-reopened-south-florida-seen-as-emerging-coronavirus-hotspot-223903143.html
So I do have concerns going forward.

In the end I'll just mainly continue to camp at home until things get better for as long as I can.
It's probbaly safe outside, I'm just a more paranoid person than most others.
I think many Americans are used to the insecurity, of getting robbed or black people getting racism. And it's probably just me as a Singaporean who's too used to the security at home so I'm more concerned than the average American.

But besides that. Life is pretty much normal. Just stay at home, do my normal things. Don't go out except to buy food when really needed.
I do miss eating out a bit, like I'd like some fried chicken or something.
Oh... and I don't order food as well, cos never know how or who prepares the food so no point having additional risks from the person preparing the food and the person delivering the food.

Am I kiasi? Yes probably. Maybe I'd be less concerned if I were in SG.

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COVID-19 will be here for Good

16/5/2020

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Well...
Looks like COVID-19 is going to be here for good.
I doubt that any of the countries will be able to eradicate it entirely.
Most likely it will end up like chicken pox. Everyone will get it eventually or be vaccinated.
The question is how soon, and will the hospitals be ready for the patients when it happens.

I wrote about this in a couple of articles previously.
Why the Coronavirus Situation IS Serious
The Virus & The Market

Let's go through why I think it's going to be here for good.
Let's look at these charts.

On the top left is the daily new COVID cases for the entire USA.
On the top right is the daily new COVID cases for Texas.
On the bottom left is the same for New York.
The bottom right is the daily new COVID cases for the whole USA excluding New York, cos that's the epicenter. (I had to take the raw data and make this char myself)

As you can see... besides New York, which is the epicenter, the rest of the USA is hardly making any progress in bringing the infection rates down.

In early April, the US Government highly encouraged people to stay at home cos that's supposed to be some make it or break it week where they were trying to get a grip of the situation.
After that, there's been little progress made in tackling the virus.
For the entire USA, daily infection rates look like it's on a downward trend BUT not by much.
In Texas, things are just going up.
New York is going down due to extreme measures.
But the rest of the USA has hardly seen any improvement on a daily basis.

Now, what's happening in many US states is that they are starting to open up. Even with this kind of infection numbers.
So let's look at the points.

1. USA has made little progress in containing the spread of the virus.
Whatever the reason. Doesn't matter what we blame it on, politics, cultural, they don't care, they don't like to stay at home, whatever. Not important, WHY it's happening. Asking why isn't going to change things.

2. Even though they made little progress, they are starting to open up.
Many states are allowing businesses to start again.

3. With the lockdown measures, their "Best" efforts is just... this...
There's a lot of people who are really staying at home. But maybe 10% don't care. I don't know the numbers who don't care... BUT... it looks like just this 10% is enough to continue the spreading of the virus.

4. Once they open up, things will just get worse.
Obvious right? With their best efforts, they have more or less maintained the situation.
People are getting edgy, they are protesting, they want to go out, they don't want to sacrifice for the overall good for the long run.
That's how they tend to live their lives. Same as how they use their credit cards.

That's it... The end.
I highly doubt that the USA will reinstate the lockdown measures after they remove it this time.
The people really aren't happy "losing their freedoms".

The COVID situation will probably get worse in USA in the short to middle term.
Also, due to this, the virus will continue to spread to the rest of the world. I doubt countries are willing to stop doing business with the USA. There still will be some travel. And considering that the USA will have the coronavirus running around their population for months/years to come... there's little that can be done to contain the virus.

Imagine, anyone travelling to or from USA might be carrying the virus.
How to contain it?
Currently Singapore has a 14 day stay at home order for anyone who arrives from some at risk countries.
Cannot be they continue to have stay at home order for all tourists or business people from multiple countries.
IF the USA gives up the fight and just allows the virus to spread, most likely the other countries will just have to suck it up and accept that the virus will be here to stay.
At best, they can just slow down the spread within their own countries. But I think there's little that can be done to fully eradicate the virus like how SARS or MERS ended.

Soooo.... Just have to live with it lor...

It would be interesting to see what happens in the USA for the next month. Cos the states are opening up and I'm sure there will be more infections and the hospitals may be overwhelmed again.
I wonder how the people will take it cos currently, it seems like there are many people not taking it seriously.
(I'm not saying that there aren't people taking it seriously. Many people ARE taking it seriously and taking the necessary precautions. BUT, there are enough people who don't care and THAT is enough to keep the virus spreading.)

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Why I Think SIA is a Terrible Investment

3/5/2020

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Usually, I don't talk much about investments, but the current SIA rights issue piqued my interest.
So I was thinking about it.

As usual, these are my musings, by using some simple logic.
I like to use rough estimates. Cos in my opinion, it's easier to think about things that way.

Please don't take it as an indication to buy or sell your investments. Please do your own research.

Based on Yahoo Finance, I pulled out the above numbers.

I put the estimated share price in June for the respective years cos that's probably 3 months after the year end and that's when the financial reports are released.

So how do I look at these numbers?
This is what I think...
(All numbers are in millions)

IF I buy the WHOLE SIA in June 2019, it will cost around $10.7 billion. (Shares outstanding x Price)
This will generate $682 million earnings for me.
This also means that the market believes that for me to earn $682m, I should invest $10.7b.
Based on the current market conditions at that point in time.

IF I buy the WHOLE SIA in June 2018, it will cost me $13 billion.
This will generate $893 earnings million for me.
This also means that the market believes that for me to earn $893m, I should invest $13b.
Based on the current market conditions at that point in time.

There is an expected cause and effect in the numbers.
For X earnings, the expected fair value is Y.
For Y market value, the expected earnings should be X.

Ok...
Moving on...
In 2019, and 2018, it's probably some of the better years of flying.
No real issues in the world, people are going about with their normal lives.
From this point, how much MORE can SIA increase earnings?
In my opinion, this is hard. SIA flies out of Singapore.
They can increase routes, or frequencies.
They can also charge more.
But it's not like SIA can start flying within the US domestic space.
So yes, there MAY be potential ways SIA can increase their earnings. BUT it's not going to be easy.
I would think that SIA has already conquered as much market share as it can for it's capability.
There is space for expansion but not significantly.

Look at the current situation of SIA now...
It has grounded most of it's planes.
It will take some time maybe 3-5 years before SIA can regain it's earnings of 2018 or 2019.
I highly doubt that in the next 6 months, suddenly they can regain similar strength in earnings.

Ok now let's look at the rights issue.
If I buy the WHOLE of SIA now...
Current market price is $6+
Shares outstanding is same at 1.183m
So IF I buy the WHOLE SIA now, I'll need to pay... $7.1 billion
This is for already significantly reduced earnings.

In a few days/weeks, the rights issue will come out...
For every 2 shares of SIA, I get 3 rights to buy at $3 per share.
So as the full owner of SIA, I have to continue to invest...
So I need to inject another... $5.323 billion (1.183 shares / 2 x 3 x $3)

So... I've paid a total of... $12.423 billion for the WHOLE of SIA.
BUT... IF I've paid $12.423 billion for SIA, I should be getting earning the likes of 2018 or 2019.

The rights issue is for SIA to SURVIVE, and MAYBE expand in future.
I have doubts about how much more SIA can expand.
So I'm just looking at old earnings. IF they can attain back their old earnings of 2019/2018 that's already very good in the middle term.
BUT if I pay 12 billion for SIA NOW, in this current market condition, I should be expecting earnings of 2019/2018.
Obviously this is not the case.

So in my opinion, shareholders now, who are holding the shares at $6 per share are not getting a good return for their investment, regardless whether they sell their rights or exercise their rights.
The current price and market value after dilution is as though SIA has earnings expectations of the good old days 1-2 years ago.
But this is not the case based on the current economic conditions.
It will take years before SIA can regain back the earnings they had in 2019/2018.
Only then can they talk about further expansion and getting more earnings.

So in my opinion, the current price of SIA at around $6 with the expected rights entitlement,
OR
the diluted theoretical price of $4.20 after the rights issue.
Is too high for the current market conditions.
Even though I'm just using rough estimates, I feel these prices should only be seen when the earnings of SIA go back to the good old days of 2019/2018.

*Note, I may be using total market value for my calculations, but it will scale down proportionately to individual shares. So the conclusion is still the same.

Once again...
These thoughts are my own analysis and thinking about SIA, please do not use it as an indication to buy or sell. Please do your own research before making any decisions.

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What is a "Spirit of Resistance"

2/5/2020

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“What country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance. Let them take arms.”

– Thomas Jefferson, letter to James Madison, December 20, 1787

There's been armed protests in the US in a couple of states. Where people with guns take part in so called...
"Peaceful Protests..."

But let's look beyond that...
Let's just look at these words by a US prominent person.

Thomas Jefferson (1743-1826), author of the Declaration of Independence and the third U.S. president, was a leading figure in America's early development.
-Wikipedia

What does it mean?
Why is it important?

Well... if the people are sheep, and the Government knows they are sheep, then the Government can do anything without fear.
Are protests the best way to show displeasure? No not really. Of course the best way is via dialogue and conversation...
But let's get real... Does that really help?

Nothing keeps a Government on their toes more than protests and seeing people band together.
Make that difficult and a Government can control a population.
Cos it's hard to stage any form of opposition.

Which begs the question...
Is it better to protest all the time for small reasons and inculcate a habit of protesting,
OR
Don't protest for small reasons and forget how to protest, such that when something big happens there is no resistance?

Cos... for sure it's only one or the other.
Humans are creatures of habit.
There is no such thing as...
Don't protest for small reasons, and still remember how to protest when something big happens.

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