Isaac_castle7.13Isaac Chin in Denmark on his recent trip to Europe.


IN LESS THAN a month, we will be celebrating Singapore's 48th National Day. I was a Secondary 3 student when Singapore gained independence in 1965.  

Most Singaporeans of my generation are already retired,  with grown-up children and grandchildren.
I have just returned from a long trip to Norway,Sweden, Finland and Denmark. This was my 7th free-and-easy trip to Europe in the last 10 years, and was one of the most enjoyable journeys.

Isaac_lake7.13Isaac on his 7th trip to Europe recently. My wife and I travelled around by train and coach, and we also went on a cruise.

However during this trip, the world financial market abruptly corrected with the STI down > 10%.

Policy statements by the FED on QE tapering has caused the panic in the stock market, and the impact was greatest especially in Spore and HK where enormous foreign funds were parked.

The uncertainty in China's economy,geopolitical risk in the Middle East, and the recovery in U.S.economy have caused the sudden and sharp rise of the  U.S. 10-year Treasury bond yield to 2.5%.

Gold prices have collapsed to below US$1,300 and funds have flowed back to the U.S., a phenomenon reminiscent of the 'carry-trade' in the last Asian Financial Crisis.

On a personal level, I still attained a return of 25% between 4 June 2012 to 1 July 2013  (as against STI gain of 16%) despite the sharp market pull back from the 22 May 2013 high.

Isaac_gain.7.13I owe this relatively sound performance to correct stock picks.

I have concentrated on SPH, SingPost, Star Hub, A Reit, Suntec Reit, Mapletree and have varied the composition of these stocks according to changing circumstances and exercising debt leverage only in a real crisis.

SPH and StarHub were bought after 4 June 2012, hence I do not record their prices as at 4/6/12 in the table (on the right).

As for Mapletree Logistics, I sold it x 387 lots x $1.285 compared to my purchase price of $1.06, and then bought into Mapletree Greater China Commercial at $1.04 a share.


My current shares and short-term corporate bonds still yield > 6% per annum, which is 350 basis points > SGS 10-year bond yield.

The market is consolidating at this moment, but STI could hit 3400 again by year-end.

On Singapore properties, I think an asset bubble has formed. I was told a Chinatown shop has changed hands  6X in the last 6 years with the last sale price being $12 million (from $2 million at its first transaction). 

Leasehold condos in Jurong were launched at >$1500 psf.

Most property investors, particularly first-timers, have not seen a property market in a previous down cycle when interest rate was high, the over-supply was large and job retrenchments were rampant.
 
I wish all Singaporeans more good years ahead.


Previous article: ISAAC CHIN: My pleasant trip to economically-depressed Spain
 

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Comments  

#17 island 2015-10-02 11:10
Thanks for your insight on your investment. A good read. Care to comment on US fed interest rate increase and China slow down economy, plus the effect of oil prices going down south all the way down to end 2016.
#16 N1 2013-12-09 08:21
Shui On is China coy listed on the HK exch? It seems to be having credit crunch, with banks refusing loans.. Hence the high coupon rate for its bonds
#15 Ed 2013-08-02 10:43
Thanks Isaac for your reply. Its so good of you to share so willing your experiences with us. Cheers!
#14 isaac 2013-07-31 04:36
I have a long term UOB loan which charged about 1% pa. with my 2 freehold properties as collateral. I limit my borrowing to 40% of the Property Valuation. As for Share Financing, the interest is 5% pa.But I will resort to this line of credit only in financial crisis. Note that average Div/Interest Yield from my shares and corporate bonds is 6%.
#13 Ed 2013-07-25 12:58
Hi Isaac, Thanks for your sharing. It is an inspiration to me. May I ask which bank did you get your open credit line from and at what interest? I have asked a few banks and they do not provide that service. Thanks in advance for your help!
#12 isaac 2013-07-22 01:05
Your guess is quite close. But the point I wish
to share is that besides financial independence,
life is not complete without good health and happiness.
#11 Pretty Woman 2013-07-20 11:07
Isaac, assuming 5% return p.a., your stated 300K passive income implies a capital of S$6 M. If it's 3% p.a., then capital is S$10 M. Correct, right?
Which is it?
#10 isaac 2013-07-20 04:59
I bought all my bonds through my broker from
DBS Vickers.

I have purchased mainly dividend stocks in
the last 13 years as a professional investor.
I received passive income about 300 K pa from rent,div,int, not bad for my age.
#9 Andy 2013-07-19 13:37
Hi Issac, notice that u do not have commo stock. Do u think Noble or Wilmar will do well this yr end?Tks
#8 2230 2013-07-19 04:47
Appreciate your valuable information and hope to learn from you.

I am currently 10% equity, 90% cash n 0 bonds and would like to have some bonds.

May I know how to get access to shui on bonds prices and how/where to deal?
#7 Isaac 2013-07-19 03:49
Current Portfolio:-
50% Property,30% Equity,10% Bonds n Cash,
10% Insurance.

I buy mainly short term corporate bonds,
eg Shui On x 3 yrs x Interest 8% p.a.
Denomination x 250k .

I cut losses whenever necessary,depen ding
on situations. Remember that those who swim
against the wave will be submerged.
#6 Mervyn 2013-07-18 15:42
Hi Isaac,

Look like your bet on maple china commercial is down by 10%. Have you cut losses?
#5 2230 2013-07-18 12:38
do you mind sharing what is the % composition of bond, share n cash now?

which trading house do you use for bonds and share?
the denomination for bonds is 250K minimum?
#4 Isaac 2013-07-18 12:37
I did not buy Cosco or SMRT for that matter,
only highlight it as a weak share.
#3 Isaac 2013-07-18 12:29
25% gain between 4/6/12 to 1/7/13 in 13 months.During this period I took profits,
the last time was when I sold all my holdings
in A Reit x 399 lots x 2.82
I have handled my fund the way Bruce Lee used
the Nunchakus.
My net liquid asset remained unchanged, but
the composition of bonds,shares,ca sh has varied.
I will use my open credit line,about $4M if
STI falls below 2700 say.
#2 F5 2013-07-18 12:12
Congrats Isaac. May I ask why you bought Cosco? It's looking out of place in your portfolio of steady blue chip Singapore companies.
#1 2230 2013-07-18 10:22
dear isaac,

congrat to such a good performance.

just wonder whether the 25% gain is bet jun and july? if this is the case the gain is even more fantastic. by the way are you increasing yr cash or increasing the share exposure now?

do advise exercising debt leverage only in a real crisis?

chinsoonyuen

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