Saturday, 22 January 2022

Moody's of South East Asia- Credit Bureau Asia

Contributed by: The Big Fat Whale

Credit Bureau Asia has been a stock that we are interested in since its IPO in December 2020 at 93 cents. However, the price has been on an upward trajectory that we missed the move to $1.58 as our value investor mindset sets in.

However, recently the price has dropped back to $1 and it stirs up our interest to take a second look at their business to see if our original bullish thesis is still valid.

Source: Moody's Website

As per our title, when we saw the prospectus of Credit Bureau Asia (CBA), we thought of it as the Moody's of South East Asia where it is providing credit reports and business data to help companies make better decisions. The only thing that might be different would be the pedigree as Moody's was established in 1909- CBA was founded in 1995.

Also, Moody's have the research arm and ability to issue credit rating for corporate bonds but CBA does not have this capability.


Reasons to be Bullish

The most important characteristic that attracted us to CBA is that the margins are rich and there is a strong moat; it is not easy to just set up a credit bureau without any connections. This is especially so in developing countries where CBA have a presence like Myanmar, Cambodia and Vietnam (They have just got a foothold in Vietnam recently through a joint venture).

CBA is also carving out their niche by focusing on SEA where they have an edge over others. Another attractive proposition is that it is in a recession-proof business and in times of crisis, the demand for credit reports and analysis might be even higher. Their business is also not capital intensive and therefore will be able to generate good Returns on Investment.

This type of business model is exactly a Buffet type of business with high margins and a strong moat- Buffet has a 13% stake in Moody's.

Here is the link for the full article:


Thursday, 20 January 2022

Off Grid Living on $10 per year in Northern Thailand- Retirement Plan

In life, there are a few things that people would love to talk about. One of those is their ideal retirement plan and how they go about travelling and enjoying life in the latter part of their life. 

During my army days, I was doing guard duty during the weekend (Yeah got extra), we have a warrant officer who is known to be cranky and hard to handle. However, when I started diverting the conversation to his retirement, he really open up and tell me his grand plans. Life in the army was smooth sailing after that day for me, as I have established great rapport with the warrant officer.

There is FIRE- Financial Independence Retire Early- movement going around especially in the US and Europe region. The goal is to accumulate a substantial amount of money- 500k to 1 million- by living frugally and investing well (In Index ETFs). Some are able to FIRE in their 30s.

Using the 4% rule, which entails withdrawing 40k annually on a portfolio of 1 million dollars, statistical studies have shown that you would never run out of money if you invest it in either a 60-40 (Equities and bonds mix) or all into equities. That is provided there won't be a great depression like 1929 which shed the index by 80%.

So it brings us to our title, Off-Grid Living on just $10 per year. Are you kidding me?

There was a recent video by the Retired Working for You channel, where he interviewed a Finnish guy who have settled down in an isolated mountaintop area in the north of Thailand- it is near Chiang Mai. I am not sure why but the video is now private and hence I am unable to share the link.

He spends around US$40k to build a house and acquired land to have its own greens for food. He also has his own solar panel and spare batteries for electricity use. There are half a dozen of huge water tanks that are used to collect rainwater for their water needs.

In a nutshell, he is able to self sustain no matter what happens to the world. The $10 per year is actually the cost for his cooking gas. That's all he needs from the outside world.

Life could be kind of extreme to live this way for city folk like myself- you have to do everything yourself and I believe there will be lots of manual and DIY work.

From my perspective,  I would rather just rent a condo unit for say US$350 per month and find meaningful things to work on (volunteering) or earn some income. 

Source: DD Property Website- This studio would cost US$350 per month and comes with a great pool and gym

Why earn some income?

In case the 4% rule fails, at least you have a backup plan to sustain your retirement lifestyle. You could be blogging or YouTubing and earning Adsense, and affiliate income. You could even set up a small e-commerce venture where Thailand is a good place to source products. Possibilities are aplenty.

If we add up the numbers, we could possibly live on an US$800 per month budget. If you owned a property in your hometown, you could rent it out and finance your lifestyle in a less expensive yet nice country with good food and nature.

Looking at the 4% rule, we will cater for contingency and round our monthly expenses at US$1500, which will be US$18k a year. You would need a nest egg of US$450k to retire stylishly in Northern Thailand. 

However, for those with kids, I guess it won't be so easy to uproot and hence this calculation is more for singles and couples.

So I hope you are as delighted as my warrant officer with this post that could set you thinking about your retirement.

Till the next blog post, stay safe and happy.

Monday, 10 January 2022

Food Economics: Char Kway Teow better than Zion Road Version

With costs escalating through the years and into the future, hawker food culture will be an essential part of our food economics to balance out our finances. I guess many will agree with me that it is more economical to buy out in a food stall than cook in if it is just for yourself or a couple. 

There will be a compromise in terms of a healthy diet as take-away from food stalls are usually more greasy and laden with msg. Nonetheless, we could choose healthier options and make it part of our overall budget to make FIRE viable.

So it leads to this post that will come under my food economics series, where I try to highlight good foods at a reasonable cost which is similar to growth at a reasonable price in stocks analysis.

During New Year day, I went to try the Zion Road Char Kway Teow based on the Instagram post by Lady Iron Chef and many have also deemed it as one of the best. 

I just find it too greasy and overhyped- it was not the first time I have tried it but taken in by the marketing hype and long queues yet again.

I am not sure if many would know it, at just a stone throw from the Zion Road food centre, there is a Havelock Food Centre that has lots of hidden gems tucked away in an old estate with nice greenery en route to it.

So this Char Kway Teow stall, Meng Kee Fried Char Kway Teow, I find it personally much better than the Zion Road version. It is less greasy and overall scores higher in my humble opinion. I leave the in-depth review to the expert which is Daniel from Daniel Food Diary. Here is his review. If you want the healthiest version of Char Kway Teow, head out to golden mile food centre where it comes in with lots of greens.

There are also some notable stalls which I will recommend as I have tried them personally. We have the white bee hoon stall, the turtle and frog-leg soup stall- highly recommended, Nasi Lemak stall- the drumstick is to die for,  Kway Chap stall and Tan's Tutu. 

I find the laksa stall to be overhyped. The chicken rice stall is previously from Margaret Drive.  Lastly, the fish soup stall at the tail end always have a good queue but I have not tried it before.

Hope everyone will enjoy your food hunt at Havelock Food Centre. Most stalls are open till 2 pm so try to check it out during your lunch hour.

Saturday, 8 January 2022

Silver To The Moon?

Contributed by: The Big Fat Whale

We have taken inspiration for my title to this post from the now trending Reddit community; where the short squeeze of GameStop was brilliantly done from the #wallstreetbets Reddit crowd. They also have a #wallstreetsilver Reddit forum which could be the next to go on a trending mode as a short squeeze was on the way recently but it halted at the critical 30 dollars level. 

This post will be touching more on the fundamentals of silver rather than just pure speculation and hoping for a parabolic surge based on a short squeeze. A comparison of a short squeeze on SLV (the largest silver ETF) as compared to GameStop seems not logical: SLV short interest is just around 8% versus over 100% when Reddit traders were squeezing the hell out of the short-sellers.

What is the attractiveness of silver as an investment then? The simple answer to this question will be supply and demand. Currently, the supply and demand numbers are at around 1 billion ounces per year and so there is not much excess supply to go around.

Industrial Use

Silver demand as compared to Gold is multi-faceted: there are lots of uses for silver in the industrial space and gold is mainly used as a store of value. More than half of the 1 billion ounces per year are set aside for industrial use. Silver is used in many sunrise sectors such as solar, electric vehicles, medical, dentistry and others. The demand for industrial use would only accelerate in the future based on the uprising sectors such as solar and electrical vehicles.

Half of the remaining supply (250 ounces) would be used for investment purposes such as ETFs and physical silver. The other half will be for jewellery and silverware.


Here is the link to the full article:

Thursday, 6 January 2022

Scams Aplenty- Beware!

Recently, during the usual social media binge, I chanced upon a sponsored video that featured a loser. He is working as a clerk and have no girlfriends in his life and so on and so forth. 

Miraculously, his life took a change for the better when he met a friend that introduce him to a jackpot scheme that earns him 1k a day. I am sure many of us will not fall prey to this potential scam as the warning signals are quite obvious.

Nonetheless, in recent times, scams or inflated investment schemes have been more elaborate and even a savvy well-educated individual could fall for it. I have just read this blog post where the author's dad lost almost 99.3% of his capital through land banking. We can definitely feel for him but the amount is still manageable, just imagine if he has sunk in his life savings. Here are just some scams or investment schemes through the years.

Help me get funds out and you get millions

Imagine back in those days, there were "Nigerian emails" schemes, where a government official from some African countries is getting a huge sum of funds out of their country. They would just need your help and you could get millions as a cut. The critical point is that you have to pay some transactional fees for their bank to remit the money out. Sounds familiar...

Lehman Bonds

I guess the most elaborated investment scheme that caused lots of damage would be the Lehman bonds that just yield 5%. I would deem it as a scheme as there is really underlying value in the form of housing mortgages. 

It was also structured by renowned banks with renowned counterparties and distributed and sold by the banks. Given the yield, we would deem it as a safe instrument and the marketing as Lehman bonds further mislead us as bonds issued by Lehman Brothers that have a great credit rating at that point in time.

To be frank, not many would take the time to read through the thick and boring prospectus and will take the bankers word at it. Even if the bankers have your best interest, I believe it might not be easy for them to decipher the risk to it given all the jargon- they ain't Michael Bury. 

Moreover, the rating agency has given AAA rating to the instrument. 

Glasgow Airport Carparks and UK Hostels

The Glasgow Airport Carpark scam looks really legit and was marketed as approved by the UK pension funds. It gives a yield of around 11% which is really attractive. Apparently, the company behind the scheme do not own the car park at all. The minimum quantum is at 25k pounds

There were also lots of UK hostels and hotels being pitched at an 8% yield. A friend of mine got into it in a pretty big way accumulating a portfolio of these hostels and hotels for yield. On the whole, it was ok but there were a couple that didn't manage to fulfil their obligations and the owners took over the properties. Instead of 8%, they were lucky to be getting just 1%-2%.

I think the bottom line will be to do due diligence on the underlying companies behind the project cause if they default, we will be in tears.

Recent Episodes

The most recent schemes have involved even bigger amounts with the most notable being The Envy group. More than 1 billion was involved and most of the victims are sophisticated and savvy individual and institutional investors. It way surpasses the 190 million Ponzi scam of the Sunshine empire that targeted heart-landers.

Also, even SMS from the banks, we have to be sceptical as recent phishing via SMS scam impersonating OCBC bank have seen almost 5 million dollars being lost.

In a nutshell

It is really an environment that we have to be more vigilant in order to safeguard our hard-earned savings. The schemes and scams have become more sophisticated where even the well heeded would fall prey to.

We just hope more targeted public education would reduce the probability of more people being victimised. 

Our blog would do our part by highlighting investment schemes that we feel is worth more due diligence whenever we come across any.

On a parting note, we would advise everyone should do more research when investing in an instrument or plan, just as if you are buying a car or a house.

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