Saturday, 30 April 2016

Recent action - SPH Reit

Bought into SPH Reit this week at S$0.955. 

I like the simplicity of this Reit with assets of Paragon and Clementi mall, which I visited often.

Paragon is not just retail but also consists of medical suites/offices. In my opinion, it is definitely one of the malls in Orchard area that has relatively higher human traffic. Clementi mall is suburban and co-located with MRT. It is always crowded be it weekdays or weekends when I patronised.

In my opinion, SPH Reit has a very well mix of good services even with just 2 assets. Gearing of 25% is considered one of the lowest among S-reits with possible injection of Seletar mall into the Reit when the time is riped.

Paragon and Clementi are undergoing AEIs. Paragon AEI is to replace the air handling unit and is expected to have additional 7K sqft NLA by mid-2018. Part of the space has already been pre-leased. As for Clementi Mall the AEI is being planned and due for completion in the next 2 years.  

The downside is projected yield is also lower at 5.8% with no discount to current book value. Furthermore with just two assets, it is also not well diversified and if without addition of new asset, DPU growth is limited to just rental reversion and AEI. Retail sector is also not seeing the best of outlook ahead which can further dampened its performance going ahead. 

In view of the economic slowdown and the deepened crisis in the sector I am working in, I think SPH Reit is one stock that is less volatile which is suitable for my risk versus income appetite.

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Sunday, 24 April 2016

Sickness or Longevity having close association to a person’s character and work he or she does

Have you ever wondered that longevity or illnesses of a person has close association to one’s character and how he/she behaves or what they do?

Relax Lah!

If we become are too uptight or nitty-gritty over even the slightest things in life, and cannot relax, we can be prone to sickness unknowingly. It can be a sickness so serious that the doctors or ourself will find it hard to know why. This is when we will start examining on the things we eat, our exercise activity that frankly none is the real cause.

Here is a list of several reasons why you cannot relax: Career issues; relationship problems; eagerness to be successful; impatient; the character of extreme non-procrastination and most commonly the chase of wealth. As for chasing money, this not just applies to the poor, but also the rich who have over-emphasis one the importance of wealth. Remember:

“Love of money is the root of all evil”

An ex-colleague of mine said this on one of my ex-VP (both Europeans), who is always so uptight. “Even he is lying on the beach in Hawaii, he also never relax!”

Apparently this ex-VP of mine then had a brain stroke in his 40s after him overworked himself after transferring to Singapore office. It happened one day, when he woke up cannot even remember his name, his wife nor his children. God bless and after several months of rest, he recovered!

My own illness experience

For more than a decade, I was unsettled by intestinal problems. The pain is so severe that I will end up crouching and holding back my scream until I turn pale eventually. Not surprisingly, I was hospitalized countless times even during a Norway business trip. And yes, even have a brush with death. Thereafter, I was put on expensive medication for years. Even my doctor who is one of the best intestinal specialists in town is unable to diagnose the source of my illness till date.  

Yet, without any medicinal help, my intestinal pain had miraculously recovered gradually over the recent years. I am extremely grateful.  

Looking back, I kind of attribute my illness to my over-zealous work attitude in the past. Furthermore, I tend to take things too hard back then. I was the classic non-procrastinator who always wanted to get things done immediately. And if it is not done within my plan or schedule, I will be edgy and mad.

An ex-colleague who was ten years my senior in age, told me lately that he used to be quite afraid of me because I am fierce and overly competitive especially in work. In contrast, he had seen noticeably change in me in recent times. The same feedback was from people close to me.

I am less emotionally affected nowadays, especially in certain things that I deem relatively immaterial in my life to get worked up over.

Perhaps we need to be more open minded, more inner peace leading to more self-control, to have more experiences, and more wisdom leading to better decision-making in life. Perhaps we should be seeking for “Enlightenment in life!” Mediation definitely plays a big role too.

Longevity and value investing

Recently I finished reading Teh Hooi Ling’s “Show Me the Money Book 3”.

She highlighted the close and distinct link between a person’s longevity and the things they do. Teh mentioned that Value investors live much longer than average person. One of the reasons is because they are not so emotionally affected and sleep better at night. Also they are not so highly strung and has a stress level lower than those who chase after the market and whose mood swings along with it.

Evidently, Benjamin Graham, Warren Buffett’s mentor died at age 82 in 1976 which is considered a good long life back then. Another of Graham’s disciple is Irving Kahn who died last year at age 109. Then you have John Templeton who passed away at age 95, Philip Fisher age 96 and Philip Carret age 101. Warren Buffett and Charlie Munger, currently 85 and 92 years of age respectively are still very active in today’s world of investment.

Stay active mentally

An extremely common trait you can find in people with longevity is that they are very active mentally despite the old age. In fact, I believe many old people who have Alzheimer after retirement is because of the lack of “interesting things” in life that they are passionate over it. And this is important to keep their mind active to ward of Alzheimer illness.

For value investors, picking stocks that can beat the market is quite a brain training as well.

Real life examples
One of my two ex-bosses, Mr. C who retired a year ago, appeared haggard lately.  Strangely, he who has all the money in the world, plus a complete family with kids all grown up successfully in work, does not seem to me as very happy in a recent meet up. He did not say it, but I do sense it.

I remembered when we were working together many years ago, Mr. C was always glowing with energy and so work-driven.  He was decisive, and blessed with a mind crystal clear and photographic memory. Overall, he is also compassionate, packed with wisdom and a very well respected mentor for me.

While he may not be as rich in the past compares to today, I sense that the satisfaction Mr. C derived from work back then is far more important than the current EXCESS TIME & MONEY he had today!

This is the harsh reality check for many people who merely looked forward to financial freedom and retirement, and yet is totally unprepared or unaware what they want to do eventually when the big day arrived. Even the wisest and wealthiest Mr. C I respected so much, may have fallen into this trap, let alone many other people.

In contrast, my other boss Mr. Y, who is older in age, is healthy and looking really good recently. He told me he is even busier today than he used to be in the company managing a business of hundreds of millions. This is because he has found the true purpose in his life. Using his abundance of knowledge, experiences in life and wisdom to educate, help and spread the love to people around him not just in within Singapore, but outside the country as well.

Finding the purpose in life

As Teh HL rightly put it “Longevity stems from the love of life in general.” This is of course excluding scientific reason such as genes or reasons of accident causing death.

She further said,

“rich or poor, I think that to survive to a ripe in an old age, people must have something that keeps them going. It can be a cause of champion, the pursuit of a life-long passion or that they see a grander purpose in their lives.”

Referring to the magazine The Economist, Teh specifically mentioned her favorite is the obituary column that typically profiled people who achieved a great deal by making the world a better place. Taking 50 past issues of the column, she discovered an interesting fact as shown in the table below about the age of certain group of people.

So the group that has the greatest longevity is Curator (or keeper of a cultural heritage institution e.g., gallery, museum, library or archive). Next is activist such as Doris Haddock who walked 3,200 miles to campaign for US electoral reforms and Miep Gies who sheltered for Anne Frank’s family. All lived at least a century of age.

Scientist is the next biggest group with median age of 95. People using words in their profession, such as artists and those in military and religion lived above 90.

At the other end is the group after pop art star such as Michael Jackson, is the group that engaged in outdoor activities such as climber John Bachar, crocodile savior John Thorbjarnrson. Politicians also have one of the shortest median lifespan. Refer to table below.

Teh HL ‘s conclusion for longevity is as follows which I agreed fully.

Grander purpose
Attitude in life
None were overweight
Active in mind  / body
Enough financially to last that long

Thursday, 21 April 2016

Shareholders of Sete Brasil, top client of Keppel and SembMarine, approve plan to file for bankruptcy

SAO PAULO (BLOOMBERG) - Shareholders of oil-rig supplier Sete Brasil Participacoes agreed to a plan to file for bankruptcy protection after its single client, Brazil state oil giant Petrobras, failed to present a viable book order.

A Sete Brasil official confirmed on Wednesday (April 20) that investors are backing the plan and declined to elaborate. Shareholders had set that day as a deadline for Petroleo Brasileiro or Petrobras to propose a book order that could pay back the capital they had injected into the company, according to sources. Petrobras, which is a shareholder and Sete's only client, didn't vote, they said.

The company may list about 18 billion reais (S$6.86 billion) in liabilities, one of the people said. Law firm Sergio Bermudes Advogados in Rio de Janeiro will work on the bankruptcy plans, according to the people.

Keppel Corp, the world's largest builder of oil rigs, this week posted a 41 per cent fall in quarterly profit, its fourth straight decline, after the deferment of some projects and suspension of contracts related to its biggest single client Sete Brasil.

Sete stopped paying Keppel last year on some US$4.9 billion worth of rig orders. Keppel announced a S$230 million charge in January on the delinquent projects.

Sembcorp Marine meanwhile has seven drillships worth US$7 billion in total on its order books from Sete and has set aside S$329 million.

A spokesman for the law firm declined to comment, and a representative of Petrobras didn't immediately respond to a message seeking comment.

The oil-rig operator was created in 2011 to build the world's biggest deep-water drilling fleet for Petrobras, which later cut the number of rigs it planned to lease from Sete to 10 from 28 amid plunging oil prices and the nation's biggest-ever corruption probe. The probe saw several of Petrobras's former executives jailed.

The smaller order wouldn't be enough to repay 8.25 billion reais that shareholders invested in Sete Brasil, forcing them to inject more money into the business, the people said.

The shareholders, which include Grupo BTG Pactual and Banco Santander, among others, have been discussing the bankruptcy filing for at least three months, according to people involved in the talks. Creditors, which loaned about US$3.6 billion and include Banco Bradesco SA and Itau Unibanco Holding SA, had repeatedly renewed a standstill loan as Brazil's BNDES development bank froze a 10 billion-real loan to Sete Brasil last year. The current standstill will mature next month.

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Tuesday, 19 April 2016

Is a well-planned retirement definitely a meaningful one when the "big" day arrived?

This post is referring to a news article from Straits Times titled “A well-planned retirement can be meaningful and enjoyable!" Refer here.

Indeed a retirement if well planned out, can be a meaningful and enjoyable one, and I am in agreement to it. However as I delved deeper into the article, I realized that the writer’s article, in my humble opinion only half right. 

The writer said "... on the contrary, retirement is the best time to engage in enjoyable, meaningful and fulfilling pursuits that are not possible when we are busy with our careers and more pressing priorities.

Why wait until that day. Why NOT do it now?

Should we really need to wait until the day of retirement, then we start engaging in our enjoyable, meaningful and fulfilling pursuits?

How about doing “that thing you love NOW” instead of waiting until the day you retire.
This is one thing perhaps we should never procrastinate!

Honestly, it is not as if I am asking you to do "that thingy you do during retirement” immediately for many hours a day. Instead, we can begin with doing “it” ½ hour a day, then 1 hour, then 2 hours and gradually increasing it over time.

So easy meh? We are so busy in Singapore! 

Ok, common answer! Yes, we are remarkably busy people in Singapore. Work, family, kids, expenses… where got time to do anything we like, even for ½ to 1 hour a day? Or whine that you are born poor or not as lucky compare to the rest who are earning more and yet have more time?

Really unlucky? Really impossible to find time? How about take a good look into the mirror or review your life over the past years?

With great humility, perhaps I am a living example of not born rich, extremely busy in work over the years often traveling, and having a big family and huge expenses. If that is not all, I am in O&G sector where retrenchment is widespread now and almost everyone is unhappy and stressful. Despite all that, I still manage to find time to as frequent as possible, to do the things I like. Furthermore to also spend time with friends and relatives as and when possible, while not neglecting the family.

The answer is simply : Good management!

If you cannot manage well, read or learn from people who can do it better than you!  Remember the only obstacle stopping you from progressing is “YOURSELF”

Finding what you love to do?

Most people who strive for financial freedom will proclaim "if only I have x amount of money in y years, then I can do this or do that?"

Honestly if you have not tried doing "that thing you love" NOW and subsequently doing it regularly for a prolong period of time, how confident are you to say that it is definitely the right thing you want to do for the rest of your life when you retire! 

If you have not find what you love doing now, it is ok. Just keep searching, and do not procrastinate! Oftentimes and unknowingly, you may somehow already been doing what you love for a long time now. Just have to identify it!

Immediate transition during the day of retirement... Really? 

Remember it is difficult for us to work work work, save save save or invest invest invest or even worst, stinge stinge stinge for 10/20/30/40 years, then on the day we are finally financially free, we say yes "today is the day I can finally do that meaningful thing that I had been pursuing for all my life!" 

Maybe when the big day comes, the feeling is just not what you think that is so special?

It needs to be cultivated

It is just like in many movies, your beloved Princess or Prince Charming that you been dreaming and working so hard pursuing all day and night, one day become a reality and be with you. Counter-intuitively, once you are together, the feeling may not be that “special” anymore. Instead the average girl next-door who always been by your side for years, you may later realize is the one you truly love!  

Passion or Interest, just like love or relationship has to be cultivated. You cannot just fall in love in doing something overnight. 

Things change over time... do not be so sure! 

People change over time. Likewise our interest /love can change over time too! Imagine the day when you retire, what you plan 10 to 30 years ago may no longer be the things you truly love anymore.

The sudden transition from "not doing something" to suddenly "doing something" and expect it to turn out perfect often has outcome that is otherwise.

Rolf's Conclusion

My due respect and congrats to those who already started planning for your retirement early (me included)! Like what the Straits Times writer mentioned, I am sure it can be meaningful when our big retirement day arrives.  

Perhaps to make our retirement even more meaningful, other than planning our finances, we can also:

- start thinking seriously what we really want to do when we retire, NOW! 

- and if you do not know yet, please expose yourself more to people or things around you and constantly search for it! 

- if you already know what you want to do, then please start spending time NOW doing it. 

- It can be just few hours a week. The essence is to do what you love doing and to sustain it for a long time until the day you retire, and can fully accelerate that process. 

Otherwise for all the effort and painstaking time you plan for the “big retirement day” to arrive, who knows….maybe that big day will never come?

This is just like what another blogger SMOL said for the cases of Dennis Ng, Curtis, and Michael planned to leave us so soon...

Furthermore, this generation of Singaporean does have an edge over the past generation to have a more meaningful retirement. This is because Singapore has emerged from a developing to a developed country and without question, we are better off today than in the past, at least from a financial point of view.  

If you cannot turn back the clock, it is ok. Just relate this message to the next generation or people you care deeply about around you. 

Saturday, 16 April 2016

S$3,800 to S$4,000 Starting Salary for Fresh ICT Engineering Graduates in Public Service - What do you think?

This week in Parliament, DPM Teo announced that the starting salary for engineers joining the Public Service upon graduation will start from S$3,800 a month, and those in information and communications technology (ICT) from S$4,000, an average increase of 20 per cent. Existing remuneration of public service engineers will also be reviewed and raised if necessary. Reasons cited were high demand and low supply for ICT skills. The new engineers are required in public service (E.g. PUB, HDB etc) mainly to support infrastructure and development needs including transport and water systems, and the rest to support Smart Nation efforts. Foreigners hiring is also not discounted if there are insufficient Singaporeans to meet the demand. Refer here for more news. 


With this raise in salary, fresh ICT engineering graduates heading to public sectors will be immediately among the median salary S$40-50k p.a. range in Singapore. Refer to here for “How Much Do People Earn”. If including bonuses, it will surpass the median income bracket. That is extremely good salary, when their work experience is virtually inexistence.  

Wait a minute…..

So how about the fresh engineers heading to private sector huh?
Or how about the existing engineers in private sector?

Are they forgotten, after already contributed to the economy and in one way another attracting the foreign investments?

Frankly, I wasn’t even sure that fresh graduates should be labeled as an engineer without any working experience to speak of.

So is increasing the benchmark pay (in public sector only!) the sole effective way to attract engineering talents, or should we also consider how as a society we should appreciate and giving credit to the work an engineer has done?

Already more Singaporeans switching from private to public sectors

I had seen and heard enough of many private companies losing local bred Singapore talents to the public sector over the years. Yes, this trend is also happening large MNCs in private sector, let alone local operated SMEs who struggles badly to attract talents.

The choice of public over private sector is not just for fresh engineering graduates in relation to the salary package. It also becomes very relevant to PMETs who had worked many years in private sectors being bogged down by extreme extended working hours, or unequal work load-pay ratio. 

The skew of Private versus Public sectors

Apparently I am in National Service (NS) this week! For all Singaporeans who had served NS in SAF, it needs no explanation of how “Efficient” the SAF is, as far as manpower optimization is?

During the two weeks stint, I spoke to many campmates.

From Oil and Gas to statutory board
One of them, an engineer recently made a career switched from private to public sector after working for more than a decade in the private O&G sector. The several months in the public service now prompted him in saying things like “no job satisfaction” and a total “waste of time”.

I was told this is in contrast to his previous private sector job in a dynamic environment though hectic but instilling higher levels of ownership and definitely can learn so much more! Unfortunately he does not have any choice due to the current dire state of the O&G sector.  However he assured that once the O&G industry recovered, he will want to be back to the private sector!

From software company to statutory board
Another campmate who is also an engineer background transit from private to public sector, having worked approx. equal number years in each sector also lament on similar things surfacing in public sector such as to lack of job satisfaction, inefficiencies, crazy politics. To sum it up - “stupidity” in the public sector, according to him.  

I was told the sector leap, back then was mainly because he wanted to have more regular hours in work after starting a family and have kids. Last year, he wanted to go back to the private sector and made several applications but the economic conditions was making it tougher, and hence dropping the idea. While already being sicked and tired about his current job scope, his solution is to divert the attention to his family and kids and to treat his current job as merely a source of income with completely zero drive!

The two examples aforementioned are just some of the many examples that I had heard from people I met/know who had transited from private to public sectors. The feedbacks are pretty much aligned.

The reverse where working class is transiting from public to private sector is comparatively less common. Another interesting finding within my social circle, is that people who have been all along in public sector tend to have lesser complaints about their jobs, but in some cases lesser drives also!

Happier with more work life balance and stability
That said, NOT everyone is complaining. There are many good perks working in the civil service.

One of the most commonly heard reasons for the transition from private to public sector is work life balance for young family having kids. Besides, there is also good work benefits for their family, work hours are shorter and definitely less stressful, so why not? As for salary, if you can compare the amount of work done relative to the income return, public service definitely offers a much better deal!

When my friends and relatives gathered and discussed about topics of economic crisis globally, normally NONE of my friends who are from the public sectors (except those who invest in stocks) seem to be concerned or showing much interest.

The simple fact is almost all agree that it is “iron rice bowl” in government sector. Within my circle, I know many friends in the private sector are worried about economic downturn. In retrospect, I know friends in the public sector discussing about cars and property to upgrade!

It is definitely nothing wrong, but it certainly exemplifies the disparity between the two sectors.

Answering to question of choosing private or public sectors, I really think it depends on individual needs. Both sectors have their equal pros and cons.

Rolf 's Thoughts

To sum it up and responding to the topic of raising the starting pay of fresh engineering ICT graduates by 20% in public sector, frankly I am not a supporter of it.

In my humble opinion, while we need to attract potential talents in public engineering ICT sector, it is definitely NOT doing any good from the point of HUMILITY for fresh graduates. Perhaps many of the fresh graduates (even those not in engineering) will be thinking,

“what the company can offer to them, rather than what they can offer to the company!”

Well, I can understand the pain of engineers (since I started as one) compared to their peers in the financial industry, but still………..

Expectations of newcomers into the society will be adversely higher and their confidence levels will be artificially inflated due to the higher salary rather than in relation to their work ability.

Finally, my biggest worry will be for those fresh into the working society to think as follows:  

“Public sector = “Elite” Singaporeans with higher starting salaries and benefits, plus work life balance and stability even during recession.

Private sector = “Slogged” Singaporeans possibly doing more for less, and eventually even losing many potential positions to foreign talents, or getting retrenched during recession.”

Which sectors will you choose if you are a fresh graduate who has no idea about the private sector world? Then how is it possible for foreign companies or SMEs in Singapore to attract local-bred talents?

Last but not least, it is common and inevitable that in a statutory board, where the organization is usually bigger to have more inefficiencies. Nonetheless, I consider Singapore public sectors already extremely organised with superb systems and processes. That is if I compare to horror stories heard during my travel about the inefficiencies in other countries' public sector. And worst – corruption!