The Weekly Roundup – Academy’s Finest is a collection of my favorite blog posts, podcasts and other useful contents that I have enjoyed over the past week.
I will be releasing this series of posts with a short summary of the content for easy summary.
My goals is to share quality content (or what i think are amazing stuff) in an easy to digest format for my readers.
In the meantime, I will also like to pay tribute to these wonderful content creators all around the world, not just here in Singapore.
Please share any great blog posts or podcast episodes with me through the comments section. I value your input and feedback which will in turn allow me to share the most beneficial content.
Without much ado, let’s get started into the Weekly Roundup – Academy’s Finest Vol 6
MY BLOG POSTS THIS WEEK
CHEAPEST WAY TO INVEST THROUGH RSP. SHOW ME HOW. Those starting in their investment journey will likely find that investing through a regular savings program, or RSP for short, is a disciplined, hands-off passive mode of investing which suits a busy working individual who generally does not have much time nor expertise to invest actively. While this is no doubt a good way to start investing, trying to create a diversified portfolio, with international exposure and investing through a RSP manner, is often a costly one due to sales charges involved that becomes recurring in nature. We show you our method of keeping ALL-IN costs to below 1.0% in our example which is much more competitive vs. a robo-advisor way which could result in ALL-IN costs of c.2.0%.
PORTFOLIO AND NET WORTH UPDATES We provided our second portfolio and net worth update in this article. While there has not been much changes from the previous month, we will be actively looking to restructure our investment portfolio, by setting a number of milestones that will be revealed in more clarity in our third portfolio update for November. In October, we grew our household net worth by 0.4% despite not really benefiting from the current bull-market. While we still do hold a cautious outlook of the global market in general and hence our significant cash holdings, we will be strategically deploying our cash in both SG and International markets in the coming weeks. Do follow us on our investment journey.
SINGAPORE AIRLINES 2QFY20 PREVIEW. HERE IS WHAT TO EXPECT. Following our preview, SIA announced its 2QFY20 results that missed market’s expectations. We provided a heads-up to our Facebook followers post results, with our expectations that the counter will see its share price under pressure the following day. While the parent airline’s operating performance has been rather credible, this has been more than offset by extremely weak cargo performance as well as larger than expected losses incurred for Scoot. Market generally has a neutral view on the counter. Despite attractive valuation on a Price-book basis, the counter lacks any significant catalyst to warrant a share price re-rating over the coming quarters.
YANGZIJIANG’S SHARE PRICE IS UP 7%. CAN MOMENTUM PERSIST POST-RESULTS ON 7TH? We provided a preview pertaining to Yangzijiang’s (YZJ) upcoming 3Q19 results. Share price of the counter has been weak since August following news that its Chairman has gone “missing”. Despite clarification by management, share price of YZJ has not recovered, languishing at around the S$0.90 level. The counter has been winning more new orders of late, contrary to market’s skepticism and we highlighted a possible scenario of the company meeting its full-year new order wins target of USD$1.5-2bn (YTD at c.USD$700m). While the counter could re-rate on stronger-than-expected new orders as well as full resolution of the Chairman’s “scandal”, we see weakness in its long-term fundamentals.
ARISTA NETWORK: WHAT’S DRIVING THE SELL-OFF AND WHY WE ARE SMALL BUYERS In our latest article to round up the week, we highlighted why we are small buyers of Arista Network, a US-listed manufacturer of networking hardware, who counts Microsoft and Facebook as key clients. We summarised our 4 key reasons for the purchase as such: 1) Decline in revenue as a temporary hiccup and not a structural change in operating climate, 2) Company remains a market leader, 3) Valuations are now more palatable at 24x 2020 PER vs. historical average of around 40x and 4) continue to like PROFITABLE companies linked to the cloud industry. However, we also highlighted a number of key risks, top of which is customer concentration risk. Nonetheless, we believed the risks are well-contained and started a small position in the counter.
BLOG POSTS
- Some thoughts on CPF Rants, Bond Tents and New Financial Advisor Money Management by Investmentmoats
An interesting article pertaining to retirement savings in Singapore. This article also prompted me to do a write-up, based on a step-by-step approach detailing how much one will actually need in his/her retirement account to meet their future living expenses obligations. In the article, Kyith highlighted an interesting “grouse” by a 72-year old man by the name of Mr Theseira who wrote about how he is not able to make ends meet with his S$575/month CPF LIFE payout and thus had to resort to being a GRAB driver. This ignited an online debate.
- Retirement Planning made easy: 3 things to do today to prepare for your future retirement by Dollar and Sense
This is another article pertaining to retirement that I thought was a good and simple read. Dollar and Sense highlighted 3 key items to take note of: 1) Figure our what retirement looks like to you, 2) Understand how much you can get from CPF LIFE and 3) Enhance your retirement payouts with retirement plans. My article which I will be publishing shortly builds on the premise of these 3 key points.
- 2 Big Problems with retiring early (FIRE) in Singapore – Financial Independence Retire Early by FinancialHorse
Financial Horse highlighted 2 big problems for being able to retire early: 1) accurately forecasting your future living expenses and 2) the 4% rule. FH believes it is difficult to forecast one’s future living expenses due mainly to inflation. On the 4% rule, FH questions on the feasibility of coming up with a portfolio that returns 4% every year for the typical Singaporean. His stance is that bonds will significantly underperform in an inflationary environment and having 40% allocated to this asset class might result in lower-than-expected returns after accounting for inflation. Personally, I engaged a heavier bond allocation for my passive investment (60% bond: 40% stocks) due to my cautious outlook on the global capital market. The strategy is to switch my holdings from Bonds to Stocks if the equity market collapses significantly, with bonds likely outperforming (and perhaps appreciating) in a downturn. However, if stagflation is to happen, bonds will suffer significantly. This is something that I am extremely mindful about. If there is any inkling of such a scenario happening, I will then re-evaluate my position in bonds, with possible diversification into either inflation-protected products like TIPS or gold-ETFs.
WRAPPING IT UP
That’s all for this edition of Academy’s Finest. Have a great week ahead everyone!
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