Dollar and Cents- Kids Golf Lessons

Just thought of sharing since i am at the range whereby my kid is taking his golf lesson,

Happy Weekend Ahead!

Dollar and Cents- Scrapping A Car

Recently, I just bid farewell to my Toyota Altis after 10 good years of service. There have been many memories but decided not to renew the COE and get a new ride.

Would just like to share the process of scrapping my car and hope it will be useful for those whom might be going the same path in the future.

As a general rule, you will usually get back around 50% of your car PARF value and a token sum for your car body upon scrapping your car.

For my Altis, I got all in around 9500 with car body raking in 800 dollars as i have changed the original colour. If not it would have fetched around 1000 dollars.

So the usual path is to drive to a scrap yard and you can actually drive in at the last day of the month of your de-registration if you want to max out your car usage. They will process the paperwork and you can get your car body value from the scrap yard while the PARF rebate will come in 2-3 weeks later from Land Transport Authority.

Do take note you have to get a transaction pin which you can do it online at the onemotoring website and will take around 2-3 working days to reach you.

I have google and checked with different scrap yards and found Absolute Motors to be more approachable (This is just my personal experience).

However, I decided to go with EC Scrap eventually as they provide me with the convenience. They will come to your place and take over the car. Moreover, they will pay you upfront in cash the PARF rebate and car body value. The customer service experience is also very pleasant. The car body value they have quoted is also quite competitive as I have done some comparisons. My scrapping deal was coordinated with Eugene and his mum Elaine.

For those, who want to keep the number plate for memory sake, guess driving to the scrap yard will still be a better option.

Happy Scrapping for those who are near the 10 years cycle.

Is Deutsche Bank Heading The Path Of Lehman?

With the recent Deutsche Bank upheaval which could be a reminiscent of the Lehman crisis. Have decided to read up more and here are some of my findings.

Let’s take a look at some statistics first:

Price- 13.5 USD

DB market Cap- 18.5 billion USD

Potential Fine from DOJ- 14 billion (Fine for their part in selling toxic mortgage backed securities during Lehman’s time)

Derivatives Exposure: 42 trillion

Price to Book: 0.25

Latest Year End Loss: 6.8 billion Euros

Debt to Equity: 2.8

The current worries of the market are mainly due to the fine and also huge derivatives exposure as it beats the exposure Lehman (85 billion) had heads down. There have been talk that the fine could be negotiated down and a rumored amount of 5.4 billion was spreading through the grapevine and this caused a positive surge for DB shares.

Let's first look at the DOJ fine, which I believe could be negotiated to the extent; whereby progressive payment is doable. It would also not be DOJ's best interests to force DB to insolvency,

As for the derivatives exposures, though it looks huge and simply mind blowing. However, these may be hedged positions (a buy position will have a sell leg and this is to allow trading of the spread differentials of a nearer month to a further month). Their interest rate derivatives took up 70 percent of their exposure. My guess will be they could be executing trading strategies that are similar to Long Term Capital Management Fund ("LTCM"). LTCM was really successful at the start but things began to go hey-wire when they try to go into areas that are not their forte to drive positive returns.

Looking at the net exposure which they will take the long positions and minus the short positions and after further netting the positive and negative figures; we actually have a positive net market value of around 18 billion. In other words, if I interpret correctly, their derivatives exposure are actually netting a gain as of Dec 31 2015 annual report. However as most are OTC contracts, therefore we have to take the valuation with caution too. 

https://annualreport.deutsche-bank.com/2015/ar/risk-report/risk-and-capital-performance/credit-risk-exposure/credit-exposure-from-derivatives.html

My personal opinion - The real issue with Deutsche Bank is actually profitability whereby they lost a whopping 6.8 billion Euros in 2015 due to impairments, increase in administration charges and litigation charges.

Given the current situation whereby hedge funds are withdrawing funds and even their asset management business is likely to see an outflow of funds; along with the current stagnant economic conditions, their investment banking business should not be the black knight to the rescue. The odds of a quick rebound could be unlikely.

For the path of recovery, confidence is paramount to the banking business. They may need some form of assurance from the German government to the investment community of their commitment to aid the bank if need be in order to stabilize the ship (Something like MAS's stance during the Global Financial Crisis). If not a bank run could be on the cards as they have close to 500 billion worth of deposits. There may also likely to be another round of fund raising to beef up their capital requirements.

In summary, a collapse of Deutsche Bank in the footsteps of Lehman is a low probability event. Given that Lehman's books are toxic derivatives backed by junk mortgages, the derivatives exposure of Deustche Bank should be much safer (If the valuation of their OTC contracts can be trusted) especially after we look at their net positions. However, the road to recovery is still some way ahead and it could still be the lingering negative catalyst in the near future for the global markets given the scale and reach of the largest European Bank in the world.

Disclaimer:

The information contained in this publication is provided to you for general information only and is not intended to nor will it create/induce the creation of any binding legal relations. The information or opinions provided do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person or group of persons acting on this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise.

You may wish to obtain advice from a financial adviser before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest.

Any views, opinions, references or other statements or facts provided in this publication are personal views and shall disclaim any liability for damages resulting from errors and omissions contained.

Dollar and Cents- Buying a Piano

Just a couple of months back, we got an upright piano for my daughter who is enjoying her piano lessons. Therefore, we would like to share our experience in shopping around for the best value that we could find in the Singapore Piano Market.

For a start, there are many brands available such as Yamaha, Kawai, Hailun, Steinberg & Song and etc. Our main criteria are that it must have good resale value and would be able to last till Grade 8. We do not want to have the hassle of changing to a new piano and at the same time not able to sell it should my daughter lost interest in playing the piano.

We finally decided to get a Yamaha U1 which will cost around 10k Sgd if we get it brand new. With such a hefty price tag, we opted to get it from the resale market. We search all the classified websites (Locanto, Craiglist and Carousell) and Google on second hand piano shops. To cut the story short, these two second hand piano shops were shortlisted by us, Asia Piano and Piano Gallery.

At the end of the day, we got a Yamaha U3 which cost around $4900 Sgd as it is of a higher calibre and it would have cost 11k-12k for a brand new one. The Yamaha U1 was going for around $4500-$4600 and the Yamaha U1 tends to have a higher pitch sound while the Yamaha U3 has a more mellow sound. Each U3 tends to have a sound of their own but the U1 have a more universal sound. The age of our piano is around 26 years old and it is imported from Japan (domestic use). To know the age of the Yamaha piano, you can just look at the serial number and you can go to this link to have a gauge of how old your piano is:

http://www.markgoodwinpianos.co.uk/info/yamaha-piano-serial-numbers

As part of the package, we have two free tunings and several freebies thrown in. We got our piano from Asia Piano.

Langkawi Trip (June School Holidays)

It was the school holidays (A dated post as the trip was a year back) and we decided to bring our whole family for a trip to Langkawi. We have been to Bali, Phuket and Bintan frequently and have also been to Krabi and Hua Hin once. So we decided to give Langkawi a shot this time round. It is a regional beach destination that is not on our conquered list yet. We hope it will be a perfect destination for our family trip after a few misses due to either too expensive air ticket prices or it was simply just not on the top of our pecking order

We started doing our research over tripadvisor and on whatever related websites we could come across through google search. We finally decided to stay in the Berjaya Resorts which have a 4 star rating through the overall reviews. We booked a rainforest view room as the sea-facing seems great but we have small kids, so it is better be on the cautious side.

We booked a Silkair flight and off we go on the first week of June for a 4 days 3 nights trip. Upon arrival in Langkawi Airport which took us around 1.5 hours, we are all ready to explore the beautiful island of Langkawi.. 

Once you reach the baggage reclaim area after clearing the customs, there are lots of car rental companies that are soliciting  for your business. We rented a car from one of the counters and after some slight bargaining, I manage to get a Proton Wira for around 70 ringgit per day with a 50 ringgit deposit. It is highly advisable to rent a car to self drive in order to fully explore Langkawi based on our recent experience. The roads are not congested, so it makes driving a breeze.

Based on my own observation, there are 4 main areas in Langkawi to explore and they are A) Berjaya area (it is where my hotel is located), B) Cenang Area (it is where the hype is, just like Patong in Phuket), C) Kuah Town (this is the city center) and D) Eastern Northern Side of the Island (They have some interesting places to visit such as the black sand beach and a waterfall. I have attached a tourist map and highlighted the areas for you to have a better idea.

 

 

 

Here is a summary of things to look out for:

 

1) Berjaya Hotel  have a nice thai restaurant which you have to reserve through the concierge and there is also a natural walk conducted at 6-6.30pm around the hotel compounds which is kind of interesting. The beach at Berjaya Hotel is really nice and when the sunlight rays are strong, the water are almost blue just like in the Mediterranean sea.

 

2) Cenang area might be a better choice to stay for those who are not into nature and more into street food and shopping.

 

3) There is a shopping center at the middle of Cenang, you could get good tour tickets over there whereby our island hopping price was around 25 ringgit per pax versus the quoted 50 ringgit elsewhere. Also, they have the most decent toilet but it cost around 2 ringgit per entry if I recall correctly. Finally, it is a good place to chill as it is the location with good air conditioning.

 

4) There is a cable car attraction to a mountain whereby I find it is kind of overhyped as there is basically nothing much to do apart from 2 small cafes once you are up in the mountain. Nonetheless, you can soak in the great scenery.

 

5) In Kuah Town, the must see will be the huge eagle monument. There are lots of factory outlets but it is more the chocolates, tidbits and kitchen ware that are worth a look at.

 

6) For car parks, just have to be creative and there are actually lots of spots to do creative parking.

 

To sum up, it is ok but not compelling enough to warrant a second visit.

 

 

Lee