I miss that term..

Veron, Theresa,ranci and the rest. I hope you are well.

The markets have not been kind to the bulls (as anyone would know) and the gap down free falls are unprecedented. It is a solid reminder of how brutal the market can be. How emotions can overpower fundamentals. How the market is driven by sentiment and perception by the buyers and sellers.

It is also a good time to review once more, which of one’s holdings are trades and which are investments. You will realise despite over the years, people STILL panic sell and panic buy. We have gone past from pen and paper to computers, ipads and what not. Yet, the market reaction hasn’t really changed much. Even counters that are defensive in nature such as SPH were not spared from the meltdown. People rushing for the exit, without knowing what’s behind the door. It has been this way, it is what it is today and it will be so in future still.

I have always felt avoiding the herd mentality (as an investor) is something that is easy to say, hard to achieve, yet very important in this market. As I speak,I am still working on it. Save like a pauper during bull years, spend like a king during bear years. Yes, if we head into a depression, then all the cash may not be of much use. That said, we cannot plan for every possibility. We do what we can.

The word ‘investment’ has been drilled into my head far too much. I examined a few things this year and I found myself virtually investing whatever spare cash I have and keep them invested as ‘I do not want inflation to errode my money away”. They say – Keeping money in the bank is a sure way to lose money.

Yes and no. Assume I have 50 grand. The market conditions are toppish and stocks are not cheap anymore. Suppose I have 20k in reits and dividend stocks that are defensive, maybe getting me 6-10% yield. Does it matter if i keep the remaining money in the bank to wait for opportunities? Never mind inflation may erode it a little. The idea is, we are waiting for a better time to enter the market. I did not imply saving money in the bank forever. The fact is, markets go up and down.  How often have we pondered – why am I so heavily vested still till I do not have the ability to buy more stocks at far lower prices? Like now – for example. How many of us are stuck with the current set of holdings? Did we love our stocks too much – so much so today’s darling becomes tomorrow’s nightmare? Or perhaps we were so focussed on keeping every penny invested? If so should we relook this?

A friend of mine – Alvin, would have sold stocks of a particular counter at 80c. Reason being – it is the fair value. That stock climb higher during CD, reaching 84c after a good breakout and on XD hovered around 82c. I might have laughed at him for selling so early and not watching out for an impending breakout. The meltdown came by and it could not withstand the overall sentiment too, sending it down to 74c or lower. He could have just picked it up at this price, at a 6c discount to his sell price and hence giving him a better yield. Who’s laughing at who now?

Alvin has a plan, and is not afraid to buy or sell. He has somewhat managed to overcome the herd mentality. Assuming fundamentals do not change, he will never sell on the way down. Nor will he buy on the way up. If fundamentals do change (Eg Saizen REIT after the japan nuclear disaster) he might just have to bite the bullet and concede defeat. However, he understands this is the nature of the market. Do not fall in love, do not be stubborn, and do not follow the herd mentality. Meaningless exists in a crash, and nonsensical chasing of prices as it heads higher.

All these are not applicable to traders of course. Price andvalue is of little importance compared to momentum.

So I ask – Which ones are for trades, and which are for keeps.

There is nothing wrong in gambling. Some are bought warrants betting on a rebound and are prepared to lose all their capital (small)if they are wrong. The risk is losing all your capital,but the rewards can be multi-fold. These are bet trades. Do not confuse a trade with an investment – TA turn FA.

Stay calm and rationale, have your plan ready, and execute it with confidence. Do not look back.  What’s done is done. Focus on what you can do, instead of what you could have done.

To the Jayneration – you are not forgotten from my memory.

Stay healthy.

Tongue in cheek – On the presidential election, looks like the 4 Tans have qualified to stand for election. But think about it, no matter who is elected, we’re all One Tan! (完蛋)

Jokes aside, I have my pick for now. Let’s see if it changes between now and polling day. After 30 plus years, this will be my first time voting – Ever!

Here it is!

–

Walk into the corner of any bookshop devoted to investments and you will find a host of literature offering advice on how and when to buy shares.

But I have yet to come across a book which offers me good advice on the opportune time to sell a share I hold. Yet, this may be the more critical issue for most investors.

Buying a share is simple. The financial world is virtually your oyster, presenting an abundance of opportunities for you to park your nest egg. But when you sell a share, you are confined to only those stocks which you hold and this can make it tough to make a decision.

As any investor will attest, unless you are a die-hard day trader used to getting in and out of the stock market many times a day, you are likely to face an emotional tussle each time you want to sell a share.

This may mean taking a profit and kissing goodbye to a successful investment whose value may run up further, after you make your exit.

Selling may also mean that you had made the wrong decision to buy the stock in the first place. But as human beings, admitting that we have made a mistake is never easy, especially if we also have to take some losses in our stride.

Most of us find it very painful emotionally to cut losses on a bad investment. It may sound irrational, but most of us would rather take a ‘wait and see’ attitude, and hope that the bad investment can make a comeback – improbable though that may turn out to be – to allow us to sell without making a loss.

There is no hard and fast rule in the stock market that what goes down must go up again, and the longer we wait, the worse the outcome might become.

In other words, given the way we are psychologically conditioned, the pain we experience each time we make a loss on our investments will always be much greater than any profit that we may make on our investments.

But such irrationality also makes us far more likely to make mistakes in making decisions on how to handle a bad investment.

To lessen the probability of such a painful occurrence, I always try to make sure that my stock investments are sound choices, with great business franchises which I would still want to own many years down the road.

Using such a ‘buy and hold’ approach, I was able to accumulate many quality stocks such as PetroChina and HSBC Holdings when their prices were artificially depressed by periods of great market turmoil like the global financial crisis that hit the markets three years ago.

In those years when the bulls went on the rampage on the stock market, I would stop investing altogether, as I waited for a correction to emerge. Sure as night follows day, I would turn out to be right. The stock market, after all, moves in cycles.

Yet, even a disciplined investment approach does not turn out to be foolproof. Many years ago, it was the rage to apply for initial public offerings (IPOs) and I too succumbed to the investment fad.

As a result, my investment portfolio has been peppered with a number of counters which I had received as a result of my IPO applications.

Some of them were excellent investments initially, but the pain of cutting losses when their allure faded had simply been too great for me to bear. Waiting for them to recover to their original investment cost proved to be elusive, and I ended up sitting on a whopping loss instead.

I have since given up applying for IPOs on the local market, but there are some pointers worth recounting from the financially expensive and painful experience:

Don’t get over-emotional over your shares

If you have lost money because a share price has gone down, it can be very difficult to let go. But remember, most of us have only a limited sum to invest, and we should put the funds to good use to maximise our returns.

Holding a soured investment stops you from using that money elsewhere where you may get a better return.

Top-slice your successful investments

If a share price is on the rise, it is easy to believe that the uptrend will continue indefinitely. But rather than sell off all your shares, what you can consider is to ‘top-slice’ your investment – sell enough shares to take back your capital and some profit.

If the share price continues to go up, you will still have some exposure to the stock and can make further gains.

Check your portfolio once in a while

Shares are not to be parked under the bed and forgotten. Most people tend to look at their stock portfolio more frequently when the market is on the uptrend and relish the paper gains which they are enjoying.

But when the market turns bumpy and losses start to appear, there will be some who fall into a denial mood and stop looking at their portfolio altogether. As such, it is important to take a cold, hard look at your holdings at least once every two to three months. If they still make sense, fine. Otherwise, you have to trim those stocks that no longer fit your investment strategy.

When to cut losses

No investor likes to lose money. It is always easier to take a poor but positive return, than to accept a small loss.

For stocks which you do not plan to hold as your core investments, you should set a profit target, a target loss level as well as a timeframe for selling the shares. Once the stock reaches your target loss level, you need to take a good look at its prospects and ask yourself if there are any good reasons for hanging on to it.

Of course, the pointers I highlight are easier said than done when put into practice. But it will surely save you a lot of heartache agonising over your selling decisions and hopefully help to maximise your investment returns.

Happy investing.

engyeow@sph.com.sg

Here’s the article on the security seminar held yesterday (and today). Very valid points. Nothing new since years ago. I’ve also personally targetted facebook accounts of people in my list by fooling them into clicking links. Ie, working on a pre-existing human weakness – trust.

 My question however is this – What about a certain account that MANY of us hold which if compromised, can have very devastating efffects. The singpass. What if – people use the same passwords on their singpass accounts? When was the last time you changed your singpass password? Is your password the same as the other accounts that you have? We are not even going into any logical or physical vulnerability of the backend processes and systems of the singpass yet. To me, if there is ONE account you really have to protect, you have to consider this as top priority.

—

Here is the article:

 IF PLAYING FarmVille on Facebook during office hours is bad, consider this: These employees may be using the same password – for their Facebook and Twitter accounts – to access the office network too.

The Government flagged this as a growing concern that could render office networks vulnerable to hackers, as Singapore marked its first Cyber Security Awareness Day yesterday.

The occasion also saw the start of a two-day information security seminar organised by the Infocomm Development Authority of Singapore (IDA) and industry groups such as the Association of Information Security Professionals and Cyber Security Awareness Alliance.

Speaking at the event, Information, Communications and the Arts Minister Lui Tuck Yew said: ‘Many have jumped on the social networking bandwagon, but not all of us realise that cyberattacks use social networking to gain access to sensitive corporate and personal information.

‘In this regard, end-users have become a critical component in the security equation and are often our first line of defence against these malicious activities,’ he added.

Security firms The Straits Times spoke to said users of social networks are more trusting of ‘friends’ in the network. So if someone sends an invitation to, say, click on a link, which leads to a malicious website, the user is more likely to do so.

When unsuspecting users visit the website, a stealth program will be loaded on their computers to steal passwords or other sensitive data.

If that password is used for everything from online banking to accessing corporate e-mail, then the hacker has hit the jackpot.

Mr Kwee An Ting, senior technical consultant at Symantec Singapore, said hackers may gain access to corporate e-mail with that password and by guessing the employee’s username.

Sophos country manager David Chow said hackers may even access a company’s servers using a staff member’s username and password.

However, firms that have additional security – like encryption and two-factor authentication – may stonewall such crooks.

Encryption makes data transferred over the Internet unreadable unless one has the security keys. In two-factor authentication, passwords valid only for one login are sent to the employee’s cellphone via SMS or to a thumb-sized token.

Firms that mandate staff to change their corporate passwords once every three months also reduce their risk of being exposed by careless employees.

The Cyber Security Awareness Alliance has collected more than 300,000 pledges from office workers and home users to change their passwords to more complicated ones.

It noted that some users even store passwords in their laptops – for example, by letting programs ‘remember’ the usernames and passwords – out of convenience.

But losing their laptops will mean handing over all their passwords to cybercrooks, said Ms Shirley Wong, co-chair of the alliance, which is educating people to use stronger passwords and change them regularly.

The drive is part of Singapore’s $70 million Infocomm Security Masterplan 2, announced in 2008. It is an updated version of the original 2005 masterplan, which focused only on the public sector to deal with cyber threats.

In view of the cross-border nature of these threats, the IDA also recently signed an agreement with Japan and South Korea to undertake joint development and training and share information. The details are being ironed out, said the IDA.

Over the past nine months, it has also solicited feedback from the public and private sectors on the effectiveness of current efforts to secure Singapore’s national infrastructure.

When asked whether more economic sectors will be required by the law to implement certain technology – like how banks are mandated to provide two-factor authentication to all online customers – IDA senior director of infocomm security and assurance Christina Gan said: ‘It is still early days.’

Here’s the report filed on their website:

The Board of Directors of Japan Residential Assets Manager Limited, the manager
(“Manager”) of Saizen Real Estate Investment Trust (“Saizen REIT”), wishes to announce
that it has approved a loan repayment plan (the “Repayment Plan”) which has been sent to
the loan servicer of the commercial mortgage-backed-securities loan of YK Shintoku (the
“YK Shintoku Loan”) on 6 April 2011.
The YK Shintoku Loan went into maturity default on 2 November 2009. Since then, the
lender has the right to foreclose on the properties of YK Shintoku at any time, but has not
done so thus far. During this time, YK Shintoku has been paying down the loan via
proceeds from the divestment of its properties as well as its operational cash flow.
The Manager is confident that, given Saizen REIT’s current cash position and taking into
account the progress of the divestment of Saizen REIT’s properties, the YK Shintoku Loan
can be repaid by the end of May 2011. In this regard, the Manager has decided that it is
now an appropriate time to set out a schedule for the full repayment of the YK Shintoku Loan,
with the intention of averting any foreclosure actions which will lead to unfavourable
outcomes, including the properties of YK Shintoku possibly being auctioned off at
substantially discounted prices. The Manager also believes that, given YK Shintoku’s net
outstanding loan balance of approximately JPY 4.2 billion 1 (S$62.9 million 2 ) and YK
Shintoku’s current portfolio value of approximately JPY 6.1 billion3 (S$91.3 million), the
repayment of the loan is the best use of Saizen REIT’s resources. The repayment of the
loan by instalments can also enable YK Shintoku to progressively reduce its interest
expenses4.
The repayment schedule under the Repayment Plan is as follows:
(a) repayment of not less than JPY 2.0 billion (S$29.9 million) on 11 April 2011;
(b) repayment of approximately JPY 0.8 billion (S$12.0 million) between 12 April 2011 and
30 May 2011, through proceeds from the disposals of YK Shintoku’s properties, including
those currently under negotiation or pending completion; and
(c) repayment of the balance amount on or before 31 May 2011.
1 The current outstanding balance of the YK Shintoku Loan is approximately JPY 4.8 billion (S$71.9 million).
Taking into account cash reserves of JPY 0.6 billion (S$9.0 million) maintained by YK Shintoku under the loan
agreement, the net outstanding loan of YK Shintoku amounts to approximately JPY 4.2 billion (S$62.9 million).
2 Based on an exchange rate of S$1.00 to JPY 66.8 as at 5 April 2011, which is applied throughout this
announcement.
3 This valuation relates to 36 properties of YK Shintoku, including Global Matsukawa Building (sale transaction
pending completion). The number and value of YK Shintoku’s properties upon completion of the Repayment
Plan may vary depending on the number of properties divested during this period.
4 A default interest rate of 7.07% per annum is charged on the YK Shintoku Loan.

The Repayment Plan entails Saizen REIT committing internal resources, other than those of
YK Shintoku, of approximately JPY 3.4 billion5 (S$50.9 million). Following the completion of
the Repayment Plan, the entire property portfolio of YK Shintoku, currently valued at JPY 5.9
billion3 (S$88.3 million), will be unencumbered.
The Repayment Plan is currently being discussed and has not been agreed to by the lender.
Notwithstanding the Repayment Plan, the lender still retains the right and may commence
foreclose application on the properties of YK Shintoku until such time when the YK Shintoku
Loan is fully repaid. Such foreclosure actions are expected to take a period of six months or
more before the properties are sold via an auction conducted by the court. The Manager is
confident that the outstanding loan will be fully repaid well within such a timeframe, and
accordingly, does not think such foreclosure actions will be necessary, nor will such
foreclosure actions derail the resolution of the default. The Manager may also consider
disputing such foreclosure actions, if taken, including pursuing the recovery of any related
legal costs from the lender as appropriate.
The Repayment Plan is not expected to have any impact on Saizen REIT’s distributions to
be made in accordance with its distribution policy.
By Order of the Board
Japan Residential Assets Manager Limited
(Company Registration No. 200712125H)
As Manager of Saizen Real Estate Investment Trust
Chang Sean Pey (Mr.)
Co-Chief Executive Officer

Here’s a quick summary of what he spoke about:

Market situation

• The recent aggressive bidding for land by developers means the costs will eventually be borne by the buyers. There will be a significant mark-up. Keep that in mind when you buy newly launched condos.
• Consider carefully when you buy ‘shoebox’ or compact units. There is a limit to the rents you can charge, the capital appreciation is limited and there will be a lot of such units coming online in the next two years.  How the market will react to such a large supply is unknown.
• Because of seller’s stamp duty (lasting up to 4 years from date of purchase), current buyers have the ability to hold on to their units even if there is another global financial crisis. Hence, it is unlikely that prices of units will see a drastic 2008-like fall when speculators dumped their units to recoup their losses.
• Looking at the numbers, he feels the mass market segment is ‘over-excited’.
• No need to always look at new launches. Resale units can be better. He cites the Hillview area in Upper Bukit Timah as an example. There are plenty of 999-year, freehold resale condos near the upcoming MRT stations priced lower than newly launched condos in the same area.

HDB Market

• For HDB, the prices are at an all-time high. If you are looking to upgrade (to DBSS, EC or Condo) now is the best time to do so.
• He thinks HDB prices and COV cannot go any higher because of the upcoming General Elections as housing prices are a sensitive election issue.
• He believes COV will hover around the $20k-$28k in the near future.

Landed Homes

• Consider buying landed homes. They are comparable in price to some new condos and have a lower price per square foot. Dollar for dollar, landed homes provide better value – you get a garden, bigger space and the lease is 999-year or freehold.
• Landed homes will always be in demand as they are a decreasing commodity. Even new land released by the Govt for landed homes are 99-year leasehold sites.
• Expats love landed homes.

Do your research and be logical

• Always do your homework, be rational and logical. Do not buy based on emotions.
• Always look at the basic fundamentals like location, etc.
• Always think mid- to long- term when investing in property. He cautions against short-term investments.
• And be prepared to wait, property investing is not for folks who want a quick buck.

If you didn’t catch the SMART Expo, we hear the next one is coming up in October. So put that down on your calendar!

Source: http://www.h88.com.sg/article/PropNex+CEO+gives+great+tips+at+the+SMART+Property+Expo+2011/

She turned Christian a few months ago and while it doesn’t seem like a long time, I could tell she let the Lord in with an open heart. I remember her asking for prayers even though she probably didn’t understand a single word as she speaks Cantonese primarily. Yet she asks for one before the night is over, like a child asking for a milk bottle just before bed. She had problems walking for the past 10 years and it is my guess that cancer had found their way into her bones from their primary site. By the time it was discovered (and only because she had a fall and fractured her hip and hence it was diagnosed then) it was in terminal stage and it had already spread. While there was little the doctors could do, we focussed on making her last days as comfortable as possible without the need for further investigative procedures to chart the progress. All we wanted was for her to get past CNY. As a matter of fact, we did not tell her of her real condition even though she asked why she seems to be recovering so slowly as it was just a fall. It was in her dying moments that the truth was told to her in the hope that she will now be able to let go. Yes my mom rushed over and was with her when she passed on in her home.

I was present for much of the wake. Of the 2 gramdmothers that I have, she isn’t the one that I am closer to. Yet it doesn’t make a difference cause I did whatever I could not just for her but for the entire family. Over the period of time I was also reminded how all my uncles and aunts (including my mom) had a streak of stubborness. Stubborness that led to a few incidents here and there during the wake. My friends will never believe me when I say this but it is true, my own streak of stubborness (whether it is inherited or not) pales in comparison to a lot of them. The eldest is my uncle Jason who’s 66. Honestly, I do not believe anyone could tell. The youngest is uncle Maurice and all in all my grandmother must have had 8 or so children, of which one of them has since passed away some 9 years ago. Aunt Helen was a nurse all her life and lived simply and healthily. She had stomach cancer and was in remission but put off routine checkups due to SARs where T TSH closed their doors to non critical consultations at its specialist clinics. She went only because she got very sick for some reason and it was found that the cancer had returned, with a vengence. She died in hospital some 2 weeks after admission. Yet it is from her that I was put through university. It is something that I will always be very grateful for.

I’d like to share a song that I really like, sung by a singer that I adore, yet I don’t hear it often for each time I do it implies that there has been a passing on. Amazing Grace – written by John Newton and speaks of redemption and that despite all the sins one has committed in the past, there is forgiveness. Like lost sheep, wandering  around blind,it is by grace that will lead us home.

I like it, and I am certain my grandmother will too. She’s a fiesty lady, all 91 years of her. She’s free from pain now and I’m comforted by that. For her, I will mourn.

Amazing Grace, how sweet the sound,
That saved a wretch like me….
I once was lost but now am found,
Was blind, but now, I see.

T’was Grace that taught…
my heart to fear.
And Grace, my fears relieved.
How precious did that Grace appear…
the hour I first believed.

Through many dangers, toils and snares…
we have already come.
T’was Grace that brought us safe thus far…
and Grace will lead us home.

When we’ve been here ten thousand years…
bright shining as the sun.
We’ve no less days to sing God’s praise…
then when we’ve first begun.

Speaking of afternoon, for subway lovers if you haven’t already known – There is a deal available. This is valid till 12 noon today.

http://www.groupon.sg/deals/singapore?nlp=&CID=SG_CRM_228_0_0_0&utm_source=Deal_general_newsletter&utm_medium=All_Cities&utm_content=Initial_Version&utm_campaign=Varies

Do take note of the locations that it is applicable at.