Month of March 2023

"Hey Pa, I bought something cheap in school today. Guess what?" 

My youngest son asked me as I picked him after school ended. He sounded excited and gesticulated five fingers at me. "$5?" I said, hoping to elicit more clues.

"Yup and it's something that's limited edition." Came his reply.

So my first guess was a pen since the only thing I could associate with was to do with stationery. Then I wondered aloud whether it was an edible snack. "Yes!", out came the hidden package and it was one of his favourite food, a chocolate bar. To me, it looked ordinary and then he explained this was the Mr Beast newly released merchandise only available in the US. Also, because of his good connection, his friend sold it to him at half price ($5), gave him additional discount to conclude the deal at $4.70. He was mighty proud when we reached home and proclaimed to his brother on his achievement while holding the bar aloft. I was amazed to see the look of the second son having that jaw dropped admiration. After lunch, they ripped the package and happily indulged in the moment, as if they were one of the first few people on the planet to experience it. I got offered a bite. It was fine. The marketing folks behind this did a good job making my sons really happy. I guess that's simple life pleasures.

There were other joyful moments during the month. A friend's wedding at Shangri La, reconnecting with a primary school classmate through sheer coincidence, a visit to Lawry's the Prime Rib after more than a decade and my wedding anniversary was celebrated at FLNT, a gorgeous looking restaurant with a sky view and matched by delightful Japanese Peruvian cuisine.

When you are on a emotional high, sometimes a reminder arrives to reset perspectives. I was out having dinner with my parents when the phone rang. My mum picked up, stepped aside and came back after a quick conversation. She calmly said, "Your Aunt C had passed away." Was that a mistake in hearing? She's after all only 68 and in the pink of health. The cause was colon cancer and that's all she heard. Immediately, I texted relatives to seek information. A cousin on business trip called from Thailand and tearfully confirmed it. Her funeral was slated two days later. Worse, we wouldn't be able to attend. Aunt C led a uniquely different life. She got married in her early twenties and reluctantly migrated to Australia under the request of her accountant Singaporean husband. When I was younger, my cousins and I would visit them during school holidays and it was during this period of time that I developed a fondness for nature through our adventures in parks, seas and mountains. Each visit could last up till a month and I enjoyed the family bonding in a foreign country, as well as appreciating the cool weather. Aunt C also made it a point to return to Singapore at times to catch up with friends and relatives. Her children were born and identified themselves as Australians but she never gave up her citizenship due to her strong attachment to home. However, even though she lived far away, various issues related to her parents, siblings and children occurred during different moments in her life. It was dramatic at times. Aunt C fiercely guarded her family and held the fort. She fought through and eventually settled herself to be a grandmother in her later life. The last time we met was about four years ago. Today, she's gone and while I respect her request for privacy, I just wished someone had given some hints on her health status. I, along with most of my relatives, was unaware of her secret struggle against stage four cancer over the past one year. She was beloved and will be very much missed. Farewell, Aunt C, you were amazing.

Tip: Louis Jadot Meursault 2019, a tinge of citrus harmony, vanilla and watermelon

Finance Investment Movement 31

Are we seeing the first signs of crack from the unabating interest rate rise? The collapse of Silicon Valley Bank was a surprise. Took just a couple of days for a liquidity problem to emerge and then buckled under. I believe it's a bank relatively unknown to most people. The reaction thus far? Pretty orderly and that's where I felt slight uneasiness due to the hysteria usually associated to a bank closure event, even more when it's the 16th largest bank by assets in US. Soon after, another one namely Signature Bank was foreclosed. Although the markets did sell off, the depth of despair certainly isn't that bad, compared to 2008. Perhaps strong indicators in payroll, jobs creation, tightened banking environment etc are giving people confidence that past lessons have prepared the market well to absorb such an impact. Still, those companies who deposited money with SVB will feel the pain. If they were to quietly fade away, nobody notices and the contagion effect is dismissed, like an occasional gust of wind. The above is a good learning moment. Even when rules and accounting were properly followed, it doesn’t mean a bank is healthy. The point here is to scrutinize the assets and liabilities held in the books of a company. After all, items can be valued differently and unfortunately, SVB forgot to give a discount factor to market realities when a fire sale is required.

Personally, I feel the interest rate effect is biting and likely to worsen in the next six months. What I will be looking out is the tipping point of affordability. When expenses overshoot income generation, that's when worry sets in and eats into daily lives. As a third party, we can't tell from appearance whether a person is jobless or having stress over a mortgage payment. So the better observation would be to look at people's spending on the wants (think cars, electronics, restaurant visits, holiday trips, luxury investments). I liken the current market to walking in the streets with overcast skies. The SVB example is just a slight drizzle. For those companies and people living on the edge, it's time to take take out the brolly and look for shelter, the weather is about to turn. The next SVB is likely round the corner if central banks do not give confidence in their coming actions.

Now, for some positive news, I managed to get $5000 worth of T bills at 3.98%pa payout. Also made a purchase of 200 shares of OCBC at $12.48 (before SVB came out). The next plan is to continue SSB purchase and a side glance at US stocks. It's tempting to go out buying when prices fall but I think the safer option at the moment is to be patient.

Tip: Maboroshinotaki Junmai Ginjo, tasty spring water imparted with medium crisp