Sunday 31 July 2022

Month of July 2022

The above picture was downloaded on 12 July and shows the Carina Nebula with a spectacular display of stars formation within their attendant galaxies. Ok, I'm not an expert and just wanted to marvel at the beauty of the universe while reminding myself that we are all just a speck in a mysterious world.

Yet, most of us are caught in the human rat race, sometimes showing petulant behavior such as she-warrior here, committing silly petty crimes or worse, harming innocent children. Already, life is tough enough and what's needed is a bit more patience and a generous mind. Usually, I mind my own business, focus on positive stuff and laugh.

For the first time, I attended a rugby match featuring the youngest son. He's the junior in the team, having joined actual training a few months ago since Covid stopped physical activities last year. In a game of 7-a-side, he was a substitute for both games played, coming in to play the second game for the final three minutes. Granted, he's not the most sports inclined but I saw that happy face chasing after his opponent and enjoyed the moment.

After 2.5 years of non travel, it was discovered that the youngest son's passport was expiring and thus began the long application process two months ago. While the document took one month to be ready, it was another three weeks to select an appointment date. On that day, we turned up at ICA and the building entry attendant was insistent to see some form of proof for the purpose of the visit. I looked up the mobile email folder but couldn't find an appointment reminder or confirmation. Logged into the ICA website to retrieve information but again there was none. Feeling a little flustered, I thought hard. Luckily, a SMS that was sent previously remained and I was definitely relieved to be waved through. The passport pickup was over in minutes as the boy had his retina scanned and fingerprints taken. Now, like the rest of the family, he can use the self service check in lane at the airport.

Tip: Tignanello 2017, fruit forward, smells floral and decent body. Can keep for few years

Thursday 28 July 2022

My View On Amo Residence

Stunning. The Amo Residence was nearly sold out after launch with an average price about $2100psf which was close to my expectation. I had visited the show flat, the buzz on the ground was apparent as those without an appointment were made to wait and queues formed just to get into a display unit. We were allowed three minutes and the minders started to shoo us on the dot. There were several attractive points about this development. Located within proximity to popular schools, well designed public spaces with ample facilities such as swimming pools (seven in total!), great greenery views and the finish quality was certainly up to standard. However, the maintenance fee at around $420 per month is quite expensive. There's one sticking point which I feel could adversely impact the value of this location in the future. Around the corner, there resides a forty year old with block number 259 of a HDB flat. Surrounding it includes an open car carpark and grassy patches which combined together, could be rebuilt into several blocks of HDB or a nice boutique condominium. A check on URA Master Plan confirms this.

The above development potential may or may not happen in the near future. Nobody knows except the person in charge of land sales. My take is, congratulations to Amo Residence for such a wonderful sales result. It had set a new benchmark for the area although I'm curious about the buyers who could afford such a big purchase given known factors such as rising interest rate and a pending economic slowdown. Perhaps it could be pent up demand and cash hoard over the past few years. Let's see whether there are any irregular exercise of the sales option in the coming weeks. Please, I hope Lentor Central is not as hot when it launches. Regardless, in our local lingo, I'm still stunned like a vegetable. 

Tip: Drappier Blanc De Noir NV, off dry mineral, soft acidity and nice citrus notes

Friday 15 July 2022

Finance Investment Movement 23

This is the third month into trading options and I have done only sell put transactions. The results thus far have been encouraging. From trading one counter to four counters now, it's been quite a revelation to monitor price movements of the underlying with respect to the broader market. What I look for would be something that's one week to expiry, strike price at least 10% away from current market and minimum US$15 premium. Other factors include overall trend, high low price of the counter, macroeconomic news etc. Usually, I let the option expire as that reduces the transaction cost by half. It's quite a hefty fee for small trading like mine. Of course, if the trade goes against me, I have already buffered the capital to absorb or prepared to cut loss. I will continue to work out different strategies to maximize earnings. There's just much to learn in order to make sustainable and steady income.

Did my second foray into 6-month T bill for the month of June and got allocated $5000 with yield at 2.36% pa. It's a very nice payout in lieu of fixed deposit and close to CPF OA. The objective is to let the money work and use it to pay off expenses early next year when redemption is completed. Since the yield is looking upward, I'm planning further applications in batches with $20000 remaining to be deployed.

The home loan revision letter came in. It was expected as the new rate of 1.55% under DBS FHR6 will become effective in two months. The additional repayment sum adds to existing burdens and the best way to react is to continue the journey of building multiple income streams while managing risks in a looming recession scenario. My feel for the market environment is that inflation is peaking with demand reducing from now onwards. When supply concerns are resolved, that would further dampen inflation. Growth should dip and hopefully just into slight negative. If that was to happen, expect strong market rallies. The window of buying opportunities is available till September and I'll re-evaluate at that time.

Tip: Les Haut De Smith Rouge 2016, blackberry all over a medium palate, flinty and supple

Monday 4 July 2022

Setting The Bear Trap

It's been another three months and I thought to update my current thoughts to the situation.

In short, Russia has taken over bigger territory swaths, the Nato allies responded by providing larger amounts of weapons and many diplomatic visits were conducted with no result thus far. Putin remained adamant on his justification while Zelensky also appeared defiant. For consumers, we continue to see various exports limitation that partly contribute to the escalating inflation. 

So how do I think this military conflict will end?

The conventional thinking would be a stalemate via a treaty, possibly ceding some Ukrainian land in return for Russian security guarantee and funds for rebuilding. But this increasingly doesn't look like happening if (and that's a big IF) the conflict drags on. I say this because of the following.

If this was a purely Russia versus Ukraine situation, then by virtue of size, the Russian army should win eventually by mutual attrition. Both sides had expended much ammunitions and lives as they won and conceded ground simultaneously. At the moment, the area controlled by Russia is rather big and it would have to spread its resources thinly to defend. It's possible to hold on due to weakening forces on both sides. Then Nato decided to wade in with promises of more firepower support. A significant show of intent. This drastically tilt the balance into Ukraine's favor. Consider this, the US and EU combined will be able to supply more advanced weaponry if they so choose. For now, I think they are content to give just enough for defending purposes and thereby encourage a longer battle. Why? As the timeline extends, the Russian morale and spirit will weaken while improving Ukrainian's. This also buys time to find alternative energy and food sources or allowing the global demand to moderate and adapt. At the right opportunity, launch a counterattack with Nato's backing and try to reclaim lost territory but also inflict damage on the Russian army and land.

I see two potential end points. One, the exhausted Russians concede this was not worthwhile and sign a peace treaty. Two, the ordinary Russian people find a way to force the government's hand to stop although this can be disguised to save face. An unlikely scenario would be Putin suffering ill health or him being toppled which would be an abrupt disruption. Therefore, if any of the above happens, I consider it a Ukrainian victory.

Putting myself into Nato's shoes, this conflict is a good reason to legitimately change the status quo. Russia has been a long time adversary and economic integration was not a strong enough deterrent. Assuming China does not step in, it would be great to cripple the Russian military and set it back, extract oil and gas concessions and disarm nuclear capabilities. All these for thirty years. Why so? Just to ensure Putin would not be around to plot another Soviet renaissance.

This is just a simple analysis. In the end, I'm more concerned about living cost and retirement planning. I feel more financial pain is still to come and the year should end in a not so positive way for most investors. When this situation has a definite resolution, it could start a strong rally for the markets which I'm looking forward to.

Tip: Koshino Kanchubai Ginjo Nama Chozo, clean and refreshes the palate, very dry