Monday 2 December 2013

Dollar and Cents- Renovating a House (Choosing Interior Designers and Contractors)

It has been a long while since my last post as I was away to France for a free and easy tour with my family which I will try to do a posting on it. Also, I am currently doing my renovation for my new apartment.

I hope to share my experience for the renovation process so others could perhaps benefit from it and be able do a better budgeting with cost savings in mind.

Before the renovation and short-listing of interior designers and contractors for our home, I have been religiously buying the Home and Decor magazines and also browse the other interior design magazines in the petrol kiosk rack since the start of the year to get ideas for our home. We also google and research on the web whereby renotalk and hardwarezone forums were very useful. There are also individual blogs such as those of Xiaxue and there is one which is really good whereby he actually went to around 10 interior designing firms to get a quote (I can't recall off hand his blog address but will upload it if I managed to find it). Along the way, my wife and I started to short-list those designers that we kind of have a good feel  from their portfolio showcase in the magazines and reviews from the web.

We ended up with a final list of 3 Interior Designing firms (1 is from the magazine approach, 1 is introduced by a client and another is my wife's contact) and 1 contractor (Recommendation by a friend).

This is the short-list of things we wanted to do:

1) Hack 3 walls and erect 3 new walls
2) Overlay Kitchen floor tiles and walls tiles
3) New wardrobe for master bedroom and two other rooms.
4) 2.2m full height console
5) 2m full height console for master bedroom
6) Hack master bedroom toilet and total overhaul
7)Overlay floor tiles for common bathroom
8)False Ceiling for Master Bedroom and Son's Bedroom
9)Polish marble floor, parquet and common toilet marble walls.
10)Custom made shelving and study table for son's room.
11) Custom made study table with shelving in master bedroom.
12) Kitchen Cabinets and a standalone cabinet for built in microwave and built in oven.
13) Electrical Works
15)Vanity top and mirror cabinet for common bathroom with a new shower screen

There were some good ideas suggested by the Interior Designers that we have met especially the one that was introduced by my client whom is very experienced in the business. We got quotes from all of them whereby the contractor came in with the lowest quote and we were tempted to pass the project to him as my friend have rave reviews of his work. However, my friend just did his kitchen and not the whole house.

We decided to go with my wife's contact at the end cause we feel an interior designer might be able to execute our theme better. Moreover, his rates are reasonable and not way off the contractor quote. As for the other Interior Designers, their quotes could be around 30-50 percent more than the quote I got from the interior designer that we went with.

Partly, they are from a more reputable interior designing  firm which means they do charge 7% GST which my current interior designer and the contractor does not charge as he just started his own company for around 3 years. This could be quite a lot of cost savings which you can utilise to make another wardrobe or for your furniture budget.

That's all for now and I will carry on with further posts on my renovation process. We are in the midst of buying the appliances, furniture, curtains and etc.


Sunday 22 September 2013

Parenthood Rebate for Self Employed

This has been a scheme that have been around for a few years but I did not really knew about it till I was browsing through the CPF website a few years back.

This basically allows you to claim up to 3 days of parenthood child care leave from the government. We are granted 6 parenthood child care leave per annum but the government is only going to pay for 3 days. The awareness of this scheme is basically more applicable for those self employed. For those employed, your HR department will handle the claim.

The limit you can claim per day is $500. You can go to the CPF website and under the self employed section, you should be able to find the on-line claim for parenthood child care leave.

For self employed, other things to take note is to try to contribute to your SRS and CPF to reduce your tax liabilities which have been widely covered. For your CPF, you can use it finance your house mortgage payments so I don't see any huge disadvantage in contributing.

As for SRS, you can use it to buy blue chips stocks or unit trust and would be a good supplement to your retirement fund.

The current cap for CPF contribution for self employed is around $30,000 and for SRS will be around $11,500.


Wednesday 21 August 2013

Beware of Leveraged and Representative Exchange Traded Funds

With the evolution of the ETFs  market, they now covered numerous products and varieties. You are able to go long or short and you are able to take a leverage position of up to 3X. There is even a Bitcoin ETF in the making.

Most of the interesting ETFs are listed in the US markets whereby some are seriously just not suitable for the normal retail investors due to their structure.

The advantages of the ETFs have been widely preached with empirical studies showing most fund managers are not able to out-beat the market. So a passive approach with lower management fees and expense fees would be considered a more effective way of getting exposure to the markets. However, with the sales charges of most unit trust being cut to close to 0.5%-0.75% and if you chance upon a promotion, it could be even zero percent.

So this brings unit trust to be on a more level playing field. The spread of ETFs plus the brokerage commission could be equivalent to the 0.5%-0.75%. This brings it in line with the sales charge of unit trust. So the only thing that ETFs stand out will be the management fee which usually gives it an edge of around 0.5%-1% per annum.

However, some of us would not mind paying the extra in the quest to find the next Warren Buffet or Peter Lynch whom are able to give us market beating returns.

ETFs are mainly divided into replication and representative types. Replication types usually will buy the physical underlying to replicate the performance of the markets. On the other hand, Representative types are usually structured using derivatives products.

For those who are dealing with Representative ETFs and with added leverage feature, you have to be "Ready to Trade" rather than have a "Buy and Hold mentality". Most Representative ETFs make use of futures products to create a proxy for the underlying. Most futures exhibit Contango characteristics which means longer term futures contract are trading at a higher price than shorter term futures contracts which are usually traded as they are the most liquid.

So whenever the shorter term contracts expired, the ETFs managers would have to roll over to the next contract which they have to get at a higher price so it will lead to an erosion of the Net Asset Value since he can only buy fewer contracts. If you add leverage to the picture, it is definitely not an exciting proposition for buy and hold investors.

Citing an example, Ultra Short Vix ETF (UVXY) which has a leverage of 2X and was trading at around $11-$12 when Vix was near their range low of around 12 in Febuary 2013. Recently, VIX is back to around the 12 level and the same ETF is trading at around $3.5 (Not taking into consideration the 10 for 1 consolidation). Enough Said I Guess.

To conclude, for buy and hold investors, just stick to the normal replication ETFs with no leverage. For those into leverage and representative ETFs, do take it as a trading instrument which I personally will not hold for more than a month, unless it is moving in sync with your intended direction.


Wednesday 14 August 2013

Van Gogh The Life

Being one of the most famous impressionist artists of the 19th century, this book provide insights and depict in great details on the life of Van Gogh. He lived from 1853 to 1890 and die at a young age of 37. He is more of a loner from young and was never well liked.

This biography touches on the special relationship between his younger brother and himself which indirectly led to his mental condition in the later stages of his life. He started selling art prints at his uncle's art gallery and he only started seriously painting during his late twenties.

As his style differed from the conventional art style which is of the  renaissance era, so it was never widely accepted. Monet is part of this new revolution of the impressionist movement.

He led a tough life and depended on his younger brother for allowance as his paintings simply don't sell. He even married a prostitute as a wife who bore him a child. He was a total outcast and spend his later years in an asylum. This was where some of the greatest works were painted.

It is a very sad biography whereby he never reap any benefits from his masterpieces during his lifetime. He was eventually shot and die from the wound. It is still a mystery if he was trying to commit suicide or he was accidentally shot.

This book is around 900 pages and so it took me some time to finish it. After reading the book, it seems that the life of an artist is definitely not as glamorous during those days. Even in today's context, I guess it is still not a preferred route that parents would want their child to take.


Sunday 11 August 2013

National Day Staycation

 My family have just recently came back from a staycation at Ritz Carlton. We have booked the room hoping to get a room with a view of the National Day Celebrations.

However, it does comes with a premium and so we have to settled for the "Highway View".  It can get pretty annoying in the night when u can hear the screeching sounds of the super cars on the road. I am one who seldom soak in the bathtub but at Ritz, it has a bathtub with a view and so who can resist :).

We mainly hang around the Marina Square area these few days and have try different eateries. We had lunch at Dian Xiao Er, dinner at Bao Jin Tian that serves decent dim sum (Custard Buns are really nice) as compared to their 313 Somerset branch. We also try the Sarawak Ko Lok Mee for breakfast which i find is slightly pricey. Had supper and lunch at Killiney and also had a meal at the food court.

We wanted to go and take the flyer but guess it will be really crowded so we give it a miss.

The highlight was of course to watch the fireworks and as our room is facing the highway, so we have to go to the lift lobby to get a glimpse of the spectacular fireworks.

It was a great short staycation for the long weekend. Hope everyone have enjoyed your long weekend too.


Monday 5 August 2013

Dollar and Cents- Repairing a Car in JB (Is it Worth it?)

My current ride is coming to the 6 years mark and is starting to show problems due to wear and tear. I will just like to share my experience of repairing and replacing the different parts due to wear and tear through these past two months. For a start, I am driving a Toyota Altis 07 model.

I have re-sprayed the car earlier this year and have changed the colour. Due to the sky high COE price, I am likely going to drive it all the way till this car's COE expiry. Therefore, I guess this is a worthwhile investment to make me feel that I am driving a new car :). The cost of this vanity is around 1300 dollars.

The car started showing problems 2 months back with the battery first to go. I was unable to start the engine at all, I managed to find someone to come over to my place and replaced my car with an Amaron battery for around 150 dollars.

Next, my side mirror started to give a hissing sound and the root cause was a problem with the motor mechanism which means you have to change the whole side mirror. My fan belt is also starting to show cracks. The cost of replacing for the side mirror was 200 dollars and the fanbelt was 100 dollars.

After which I went to JB to do my servicing, it cost around 80 sgd whereas it cost from 140-160 sgd in Singapore. Thus, you can save about 50 percent. Also, I changed my air-con and engine filter plus a spark plug. On top of that, I change my car's auto transmission oil. All in, it comes up to around 200 sgd.

The mechanic advised me to change my front absorber but even though I did find the ride a bit bumpy but thought I can drag it for a while more. An important point to note, if your front absorber is starting to leak oil, do try not to jack it up as it will lead to the front absorbers getting spoiled at an accelerated pace. After the servicing, the car's front absorbers totally give way but as I have an engagement in Singapore so I was not able to do the change in JB. I was quoted around 220 to 250 sgd.

The ride was totally bumpy and feel like a boat ride after the front absorbers give way. I checked with a few Singapore workshop and decided to go with one that charges around 300 dollars for the original parts as it is not far off from the rate quoted by the JB workshop. There was one which quoted 588 dollars as they say they have to change the mounting rubber and etc while another quoted 445 dollars. All are before GST.

After I reached the workshop, I found out that the quote was without labour and so plus the labour and GST, the cost was around 385 dollars. Since I am already there, I guess I have to just go ahead and the car was in urgent need of a pair of brand new front absorbers.

I did some research while at the workshop and found that the cheapest cost is to get the parts from the stockist and get the workshop to fix it for you. I check with the stockist and found that a pair of original front absorbers was just 150 dollars. The workshop quoted me 300 dollars for it.  Based on a simple calculation, with the labour cost at around 80 to 100 dollars, the total cost using this approach will be similar to the JB workshop quote and I can save around 100 dollars.

This is a sum up of the recent repair costs for my Altis:

1) Battery                150 
2) Side Mirror          200
3) Fanbelt                100
4) Servicing in JB    200
5) Front Absorbers   385

Total costs              $ 1035

To conclude, it is advisable to do your servicing in JB if you know any good workshops provided your car is a normal and not a luxury car as you can easily save 50 percent. For repairs and replacing parts, if you get from the stockist, the pricing will be quite similar to what is quoted by the JB workshops. I feel it  is more prudent to change parts in Singapore. If you let the Singapore workshop get the parts for you, the total cost is likely to be 50 percent more than getting them from the stockist. If you happen to go to a workshop that is trying to make you a carrot head, it could be 80-100 percent more.


Saturday 3 August 2013

Sinopipe AGM and Experience with S Chips

I have recently went to the AGM of Sinopipe at Lion Industrial Building which is around Paya Lebar area. This counter is one of my "tuition fees" in the equity markets as like many other S-Chips, it is still suspended but at least they do come up with an AGM which I hope it would be a positive signal that it would not be a total write off. The other heavy "tuition fees" in my investment journey is the previous China Enersave which is now called YHM. With the huge dilution from the issue of new shares, it as good as a total write off. You could by now realise that my heavy "tuition fees" are both S Chips (China Enersave is not really a S-Chip but their business are in China) and not surprisingly, I have totally given up hope on this sector. 

Just some background of what led to this investment,  it is in the pipe making business and with China's urbanisation and infrastructure needs, it seems to be a viable good growth industry to be operating. Moreover, their Price Earnings Ratio was just around 5 and with Net Asset Value of 50 cents. So getting it at around 20 plus cents seems like a good proposition with a margin of safety. Furthermore, one of my clients did mention to me that he is using Sinopipe products in Singapore and find the quality is not too bad.

For those who can recall, the S Chips sector was a value investor's paradise, with counters such as China Hongxin trading at below their cash holdings and many meeting Benjamin Graham stringent requirement of having their current asset more than their total liabilities. Also, many have fallen from their lofty highs of 2 dollars plus to their current price level of below 20 cents. During that period, I was also vested in counters such as China Farm and China Paper which I managed to get out in time with profits on hand. 

However, I failed to take into account or did not placed huge emphasis on corporate governance and think this is a situation of at least a "one bagger" opportunity. For Sinopipe, it has given out generous dividend which give me more confidence of the management and their corporate governance structure. It was around 10 percent or 2 cents per share. I was thinking this could be the "Special One" and even the CEO was saying that we should not "Taint all Ships with a Brush". Thinking back, what a Classic!

So my lesson from this is that unless there are really solid institutional investors backing such as GIC or Temasek (China Minzhong), we should avoid S chips as those Top Notch China Companies would try to list in Hong Kong first.

Back to the AGM, the room it was held was sort of a training room. There were around 10 shareholders who attended. As my shares are brought using CPF and am not entitled to attend, so I got a proxy from another investor, Sadly, they did not received the proxy form and so I ended up as an observer and was unable to ask any questions.

I can feel the tension in the air as the shareholders started questioning the directors about the accounting irregularities and the status of their previous CEO who was the cause of the current predicament. Surprisingly, he was still under the director list but as expected, he was not present for the AGM,

I am really stunned that this previous CEO, Chen Lihui, is still conducting business and making deals with his newly formed company. Don't they have laws in china to bring such errant executives to task?

Currently, their new CEO, Dr Pu Weidong, is also one of the biggest shareholder through his investment holding company (Triumpus Capital). So I guess he is trying his very best not to let this investment be a total write off for himself. Their current chairman, Wang Sen, is just 38 years of age which the other directors highlighted that he has the right connections to get things done in China. When i try to google about the companies he is involved in, I don't seem to find anything hmmmm.

With the restated accounts after taking into consideration of the account irregularities, they are making losses for 2010 and heavier losses in  2011. The audited 2012 results will be out by October 2013. Current NAV stands at around 0.12 Sgd from the previous 0.5 Sgd. Ouch!

For those who are interested in the numbers, you can check out their annual reports and learn a lesson or two from "creative accounting":

The current directors plan is to stabilise the ship which should take at least a year and once things are back to normal, they will re-list the company. I certainly hope they are able to do so but chances are slim till I could see they are starting to turn in profits.

I would also like to highlight that that they have actually proposed an  increase in director fees by almost one fold from 100k plus to 200k plus giving the reasons that there are more directors and the transition phase is tedious and time consuming for the directors. Really BS! 

Nonetheless, I wish Dr Pu and his team all the best in turning over this company.


Thursday 1 August 2013

Art of the Trade

 This is a reprint of "Dancing with Lions" where the author was using an anonymous identity then in 1999. Basically, this book is more on the storytelling rather than teaching you how to trade. I believe the author is coming out of his anonymous identity because he is currently giving seminars to teach people how to trade :).

This is an interesting read if you do not have much expectation as it depicts the life of a commodity broker which is something out of the movie "Boiler Room". It reminds me of the days of the "White House" in Tanjong Pager where all the bucket shops are located.  They will entice people to go for their career talks which promised high hourly pay. Their main motive was of course to persuade you to invest so that they can churn you till you are totally depleted. I have been through the career talk but have never invest as how much can a student looking for a holiday job have?

The book does touched on the emotional side of trading as in how to handle losses and the common risk management concept. Overall, it is not spectacular but could be a book you could bring to a holiday trip. You could finish the book in one to two seating.



This is an update of the primary one registration status which I have written earlier here. We are so glad that we have managed to get in through Phase 2B without any ballot.

Based on historical records, this was a "given" situation especially if you are staying within 1 km. However, this year the competition is intense and we almost have to go into ballot till someone finally withdraw at the last minute. Thou even if there is a ballot, the probability would be really high but we could end up being the few unlucky ones and we have totally no backup plans. Going into Phase 2C would be really competitive, we are looking at a 2 for 1 situation.

The wait for the result was quite nerve whacking as some of my grassroots friends can't even sleep or even have to take fever medicine during the course of the process. Therefore, we can empathise with those currently waiting for the results for phase 2C and we wish you could be as fortunate as us not to go through  the ballot process. Even if there is a ballot, we wish you lots of luck.

We are just thankful that our efforts have been rewarded.


Saturday 20 July 2013

Lords Of Finance

I picked up this book from a bookstore in mid valley, Kuala Lumpur during one of our short getaways. Being an avid follower of financial history, I hope this book will be give me a better understanding of the causes for the Great Depression. The Lords that the book are referring to are mainly the central bankers of that era and they are Montagu Norman (U.K.), Benjamin Strong ( U.S.), Hjalmar Schacht (Germany) and Emile Moreau (France).

During those days, they are still on a gold standard and so it restrict the flexibility they will have in implementing policies during extreme scenarios. Moreover, all the european major economies were in debt to the US due to the war expenses. Some countries did break away from the gold standard and they fare better than those who stick on to it.

There are also quantitative easing of their kind during those turbulent period which I guess Bernanke might have learn a trick or two from his predecessors. The book also touched on famous personalities such as Winston Churchill, Maynard Keynes and Andrew Mellon.

Towards the end, the book touched on the eventual formulation of the Bretton Woods Treaty which is a modified and more flexible gold standard which lasted from the 1940s to early 1970s.

For financial history fans, this is a book that will be good for your collection.


Wednesday 17 July 2013

My Take on Buy Term Insurance and Invest the Rest

The "Buy Term and Invest the Rest" concept has been around for many years and it is not something new. The main model behind this concept is to split the protection/insurance needs from your investment for retirement goals needs.

Insurance companies have try to bundle these two needs into investment linked plans whereby you will get protection and at the same time you are invested in unit trusts based on your risk profile. However, the charges such as sales charges and administrative fees could be quite huge relatively to if you do it on your own (Buying term insurance and investing in unit trust on your own). Therefore, it is not surprising that some insurance agents were pushing aggressively for Investment Linked Plans (ILP) to their less savvy clients as commissions are the greatest.

Insurance companies also offered other savings plans such as Endowment and Whole Life Plans whereby the insurance company will be in charge of investing the funds and generating decent returns for the policy holders. Majority of the funds will be usually invested in long term bonds. We will like to look at the track record and payout history of the separate insurance companies to have a gauge which company plans to choose (Thou historical record is not illustrative of future payout but at least it provide some sort of comparison and guidance).

Personally, we do not believe in an extreme buy term and invest the rest concept as we feel endowment and whole life plans adds a good dimension to your overall financial plans. It is a good way to force yourself to save and there is no temptation to dip into your investments for lifestyle needs.

For my own investment and protection needs, this is what we have planned. For protection needs, we have brought the SAF Aviva Group Insurance for both Death and Critical Illness as their premiums are really competitive. Also, we took up some SAF NTUC Group Insurance Plans. We have also taken up a mortgage declining insurance for our home loan with the bank. Not forgetting the usual health care insurance which we used our Medisave to pay for and using cash to pay for the excess waiver.These are basically term insurance.

For my kid's education needs, we have brought endowment plans that are due when they are about to go for their university education. So far Tokio Marine(Previously Asia Life) seems to have the best track record based on our comparison. However, we did diversify our plans and so we are holding policies with Tokio Marine, Manulife and NTUC Income for their education needs.

For my retirement funds goals, I am trying to segregate them into 3 sections.

1) My SRS is used mainly to build up a unit trust portfolio with some SGX listed Exchange Traded Funds as we are not able to invest in US based Exchange Traded Funds using SRS.

2) For my cash holdings, I am using it to build a portfolio of stocks. Also, if an opportunity presents itself, I will use it to pay for another property's down payment.

3) As for my CPF, I am using it mainly to pay off my mortgage and if there are excess, I will do some investments either through unit trust or exchange traded funds.

So hope my plans will work out fine and I will have a great retirement(Still a Long Way) with no worries about my finances.


Saturday 13 July 2013


It is the time of the year again whereby parents start worrying about getting into the preferred primary schools of their choice for their kids. This is  a particular stressful phase especially if they are trying to get their kids into a popular school.

Initially, I am of the view that a decent primary school will be good enough for my kids. However after considering our overall position, we feel that we can afford to give my daughter a good start to her educational journey. With that in mind, we decided to switch on our kiasu mentality and push forward our plan to get her into a relatively popular primary school.

In strategizing our game plan, we decided to explore the avenues and shortlisting the primary school of our choice. There are mainly 4 avenues available to us:

1) Using Clan association
2) Grassroots Leader Route
3) Staying Within 1km of the School
4) Parent Volunteer Route

We initially wanted to go through the clan association  through Phase 2B but the competition is very stiff and there is no "Sure Eat Scenario". Later we decided to zero in onto a popular primary school whereby if we are staying with 1km and is an active grassroots leader, the odds are 100 percent based on historical results for admission based on Phase 2B.This primary school don't really take in parent volunteers. Being an aspiring trader and loving high probability situations, the latter seems to be a no brainer
Next up will be the implementation stage. We sold our house and move to within 1km of our preferred school. Also, I started my grassroots work which I find it pretty meaningful and am able to make friends from outside your normal social circle.

So everything is set and we are waiting for July 22nd to register our daughter for the admission into the primary school of our choice. Wish us Luck.


Wednesday 3 July 2013


Recently, I got to borrow this book from the National Library while i was glancing through the investment section. With lots of literature on Warren Buffet, a biography on Prince Alwaleed known as the "Warren Buffet of Middle East" and the largest individual shareholder of Citigroup seems to be an interesting read.

From just a US$30000 dollars start up capital given by his dad and a US$300000 dollars bank loan from Citibank, he was able to amass a fortune of around 24 billion as of 2004. He started off using his status as a prince to embark on the construction and infrastructure boom of Saudi Arabia by being the middleman and earning commissions. He then made strategic investments in the equity markets to grow his wealth. The book goes about explaining his investment strategy of buying good brand names at depressed level and sitting on them. His biggest bet was on Citibank which he put in about half of his wealth at that point of investment. It also goes through his gruelling schedule whereby he will usually just sleep for around 4 to 5 hours a day. On business trips, his lifestyle seems to come out of a James Bond movie with private jets, booking of the whole cinema and a big entourage moving along with him wherever he goes.

The book do get kind of repetitive and dull in the later chapters but it was quite a page turner for the earlier chapters. Worth a read especially if you can loan it from the library for free.


Monday 1 July 2013

Exposure to Gold and Silver

With Gold prices plummeting in the recent weeks whereby it breached the 1200 dollars level, it certainly doesn’t seem like a good idea to be holding gold at the moment. It has corrected close to 40 % from their peak of 1900 level. For those whom believe “To buy when everyone is fearful” theory, it is perhaps time to consider accumulating a position on gold especially if you have more of a medium to long term time frame. 

Some reasons advocated by gold bulls had been that it could be looked as an alternative currency. It seems like a good angle to look at especially with the current limitless money printing and quantitative easing by the major nations such as US and Japan. Also, it tends to serve as a good inflation hedge. Currently, it has not been favourable for gold as inflation seems to be under control.
There are several methods to gain exposure to gold or silver (Have a more volatile nature). These are some of the avenues you can look into.
1)     Exchange  Traded Funds (There is a Gold ETF listed in SGX)
2)     Gold and Silver Exploration Companies Equities (eg: Barrick Gold)
3)     Futures and Leverage Spot Products (Not for those faint hearted)
4)     Physical Gold and Silver

Personally I have a small allocation to gold for my portfolio. I have exposure using two avenues.  Firstly I have invested in the exchange traded fund utilising my CPF gold limit. I am also vested in Barrick Gold which is listed in NYSE.
I will be looking into buying physical gold soon through UOB bank which I will touch on in another entry.  I am looking at a long term time frame for the physical gold (Hopefully I can resist the temptation to cash in when gold prices start shooting up) as I am intending to pass it on to my two kids.
If you have the notion that I am extremely bullish on gold, then let me just clarify, I am not. Gold is likely to remain range bound in the near to medium term time frame after looking at their price action. Any upside should be cap at the 1500 levels.