Test My Luck on T-Bill (BS24122E) using SRS funds

 

After the past 2 unsuccessful bids with T-Bills, I still have more than $25k of idle funds lying in SRS account earning a meagre 0.05% in the current high interest rate environment.

Great opportunity costs incurred from waiting on the sidelines to add investment for local banks such as OCBC or DBS shares into my ultra long-term SRS portfolio.

The share prices of local banks display no sign of weakening in the short-term hence I decided to deploy the idle SRS funds into Treasury Bills.

As the latest tranche of T-Bill will close on 11 Nov 2024, 9pm today, I decided to try my luck to auction for this tranche of T-Bill, a short-term government debt security with 6 months tenor, fully backed by the Singapore government and having an AAA credit rating.

The issue date is on 12 Nov 2024 and maturity date is on 13 May 2025. Results will be out on 7 Nov 2024, 1pm.

There it goes.

There is no admin fee for internet banking applications unlike SSB.

Again, I am trying my luck with a competitive bid of 3.18% p.a. with a pinch of salt as I believe this round of application may have a cutoff below 3%. Thus, I am prepared for a failed application, getting back my funds to continue waiting on the sidelines.

Thanks for reading!

With love & peace,

Qiongster

How I spent my NS $200 credits on LifeSG?

I received my $200 NS credits on the LifeSG app yesterday.

2 years ago, I spent my $100 NS credits by paying off my credit card bill on the AXS e-station website.

I intended to do the same again until I saw social media posts that a better way than en-cashing the credits via Sheng Siong ATM which will incur 20 cents fee, is via topping up the YouTrip account and withdrawing from app back to our bank account at no transaction cost at all.

I quickly decided to take action before YouTrip or the government takes action to nerf such practice which defeats the purpose of stimulating the economy via social benefits.

I quickly launched my YouTrip app to top up $200 and generate a QR code.

I then logged in to LifeSG app via SingPass and uploaded the YouTrip QR code to pay.

The transaction was successful and seamless.

The $200 top up is reflected instantly in my YouTrip app.

I then proceeded to withdraw to my bank via Paynow to my phone number.

The $200 NS credits rest safely in my bank now. The entire process took less than 3 mins.

I decided to top up the Moomoo Fullerton SGD Liquidity Fund to earn 2.8% p.a. yield payable daily.

This is how I utilised my $200 NS credits.

Thank you for reading.

With love & peace,

Qiongster

The Ancient Secret to Wealth

 

Marcus Aurelius, a Roman emperor and Stoic philosopher, penned his personal reflections in a work titled "Meditations." These musings offer profound insights into the nature of life, morality, and the pursuit of happiness. In this article, we will explore Aurelius' thoughts on money, possessions, and the true meaning of wealth, drawing upon specific passages from his Meditations to illustrate his points.

The Impermanence of Material Possessions

Aurelius frequently pondered the fleeting nature of material possessions. He recognized that wealth and possessions are subject to change and loss. In one passage, he writes, "Think of the lives of those who have been most praised, and then consider the circumstances of their deaths. Was there anything remarkable about their possessions?" This reflection reminds us that material wealth is ultimately insignificant compared to the enduring qualities of character and wisdom.

Aurelius also emphasized the importance of detachment from material possessions. He wrote, "Everything is fleeting. Consider the nature of things, their origin, their decay, their eternal change. Consider the elements of which they are composed, and the void from which they came." By understanding the impermanence of all things, we can cultivate a sense of detachment and avoid becoming overly attached to material possessions.

The Pursuit of Inner Peace

Aurelius believed that true happiness and fulfillment are not found in external circumstances or material possessions, but rather in the cultivation of inner peace and virtue. He emphasized the importance of living in harmony with oneself and with the natural world. By focusing on developing his character and cultivating a sense of gratitude, Aurelius sought to find meaning and purpose in life that transcended the pursuit of wealth.

In his Meditations, Aurelius frequently reflected on the power of gratitude. He wrote, "Be grateful for everything, and be constantly aware of all the blessings you have." By cultivating gratitude, we can shift our focus from what we lack to what we have, fostering a sense of contentment and well-being.

The Dangers of Greed and Avarice

Aurelius warned against the dangers of greed and avarice. He observed that the pursuit of wealth can lead to anxiety, envy, and a loss of perspective. In one passage, he writes, "Wealth is not a virtue, but a tool. It can be used for good or for evil." Aurelius urged his readers to use their resources wisely and to avoid becoming enslaved to material possessions.

Aurelius also cautioned against the dangers of envy. He wrote, "Envy is a painful passion, and it is also a sign of weakness. It is a confession that you think others are happier than you." By recognizing the destructive nature of envy, we can cultivate a more positive and compassionate attitude towards others.

Conclusion

Marcus Aurelius' Meditations offer timeless wisdom on the nature of wealth and the pursuit of happiness. By recognizing the impermanence of material possessions, cultivating inner peace, and avoiding the pitfalls of greed and envy, we can find true fulfillment and meaning in life. Aurelius' reflections serve as a powerful reminder that lasting happiness is not found in external circumstances, but rather in the development of character and the pursuit of wisdom.

Thanks for reading.

With love & peace,

Qiongster

Portfolio Update October 2024

Happy Diwali! On the last day of October 2024, time to review my investment portfolios.

With the world grappling with geopolitical tensions, economic uncertainties and as the US presidential election looms, my investment portfolios have experienced some retracement. This serves as a reminder of the risks and volatility associated with investing and the importance of adopting a long-term perspective.

My SGX Income Portfolio value has declined to $386k from $399k because local S-Reits experienced harsh reality checks from their recent results announcement, reflecting the impact from from the past years of high interest rates resulting in higher borrowing costs and erosion of net property income and dividend payouts.

My US/HK Growth Portfolio has also seen a positive performance, rising to US$19k from US$18.8k.

My SRS Ultra Long-Term Portfolio value has stagnated at $183k.

Market Outlook 

The US stock market has continued its upward trajectory in a healthy bull run on the back of looming presidential election and higher certainty of a lower interest rate environment in the coming future. Nonetheless, there will still be immense volatility from the occasional noises and fears attributable to ongoing geopolitical conflicts, and concerns about a potential economic recession. Despite these challenges, I believe that long-term investors should remain calm and focused on our investment objectives.

Investment Strategy 

My investment strategy remains unchanged. I continue to prioritize high-quality income-producing instruments, such as government-backed risk-free bonds, property related assets, and strong profitable growth businesses. I am on the sidelines camping for local banks and US growth tech stocks. By carefully diversifying my portfolio and remaining disciplined, I aim to weather any market storms and achieve my long-term financial goals.

Portfolio Actions

1. Added 2,000 shares of CICT at $2.007 through preferential offer on 2 Oct.

Portfolio Dividends

1. Received $147.50 of dividends from Savings Bonds in SRS on 1 Oct.

2. Received $303.00 of dividends from Savings Bonds on 1 Oct.

3. Received $399.72 of dividends from Capitaland Integrated Commercial Trust on 17 Oct.

SGX Income Portfolio

Portfolio Value = $386k

US/HK Growth Portfolio

Moomoo

US$4.7k

Tiger Broker

US$13.2k

Syfe Trade

US$1.1k

Portfolio Value = US$18.8k

SRS Ultra Long-Term Portfolio

Portfolio Value = S$183k

Thanks for reading.

With love and peace, 

Qiongster

Is OCBC cheap at $15.32?

 

Over the past decades, OCBC Bank (OCBC SGX:O39) has demonstrated remarkable resilience and financial strength, navigating economic challenges with aplomb. Despite its robust performance, the stock's valuation has remained relatively subdued compared to its peers and historical averages. Even after hitting all-time high at above $15.40, there is still an intriguing question: Is OCBC currently over, fairly or undervalued, presenting a compelling investment opportunity?

Fundamental Strength and Resilience

OCBC's strong financial foundation is a cornerstone of its investment appeal. The bank boasts a healthy capital adequacy ratio, well above regulatory requirements, ensuring its stability and ability to absorb potential shocks. Moreover, OCBC has consistently maintained a low non-performing loan (NPL) ratio of 1%, reflecting prudent risk management practices and a high-quality loan portfolio.

The bank's diversified business model, spanning across multiple geographies and product lines, further enhances its resilience. OCBC's presence in key Asian markets, including Singapore, Malaysia, Indonesia, and Greater China, provides a balanced exposure to diverse economic cycles. This geographic diversification mitigates risks and supports sustainable growth.

Earnings Growth and Dividend Prospects

OCBC has a history of delivering consistent and steady earnings growth, driven by its strong market position, disciplined cost management, and strategic investments. The bank's ability to generate sustainable profits positions it favorably for future growth and shareholder returns.

OCBC reported a record net profit of S$3.93 billion for the first half of 2024, marking a 9% increase year-on-year, driven by significant income growth across its banking and wealth management sectors.

Moreover, OCBC has a track record of rewarding shareholders through regular dividends. The bank's dividend payout ratio is typically prudent, ensuring a sustainable dividend policy while preserving capital for reinvestment and growth initiatives. This combination of earnings growth and dividend income makes OCBC an attractive investment for both income-seeking and growth-oriented investors.

The interim dividend was raised by 10% to 44 cents per share, reflecting the bank's commitment to returning value to shareholders while maintaining a healthy payout ratio of 50%. Assuming OCBC can maintain its 88 cents annual dividends, its yield is easily more than 5.5% at current price of $15.32, which is very attractive as yields of lower risk financial instruments fall.

Robust Capital Position

OCBC's robust capital position is a key pillar of its financial strength, highlighted by a Common Equity Tier 1 (CET1) ratio of 15.5%, significantly above regulatory requirements and higher than its peers higher than its peers, such as DBS at 14.7% and UOB at 13.4% as of Q1 FY2024. This strong capital base, along with a total capital adequacy ratio of 17.9% and a low non-performing loan (NPL) ratio of 1%, reflects effective risk management and sound asset quality. Such resilience allows OCBC to absorb potential losses while pursuing strategic growth initiatives, including its recent acquisition of Great Eastern Holdings.

Moreover, OCBC's proactive approach to capital management ensures that it is not merely hoarding capital but strategically deploying it where it can generate the most value. With a solid liquidity coverage ratio and a focus on acquiring stable deposits, OCBC is well-positioned to navigate market challenges and capitalize on emerging opportunities in the financial sector. This combination of strong capital ratios and effective risk management reinforces investor confidence in OCBC as a stable and growth-oriented investment.

Strategic Acquisition of Great Eastern

OCBC has made a significant $1.4 billion bid to take Great Eastern private, acquiring the remaining 11.56% stake it does not already own. This offer, priced at S$25.60 per share, represents a 36.9% premium over the last traded price prior to the announcement. The acquisition aligns with OCBC's long-term strategy to strengthen its wealth management and insurance sectors, which are crucial in a region experiencing rising demand for financial products.

The acquisition is expected to be earnings accretive for OCBC, allowing the bank to optimize its capital and enhance shareholder returns. By consolidating its insurance operations under one umbrella, OCBC can improve operational efficiencies and better serve its customer base through integrated financial solutions.

Unlocked Value

OCBC Bank has strategically cultivated a substantial real estate portfolio, comprising a diverse range of properties, including prime shophouses in Singapore. These properties serve as valuable assets that contribute to the bank's overall financial strength and stability.

OCBC's shophouses are often located in highly desirable and prime areas of Singapore, such as the Central Business District (CBD) and Orchard Road. These prime locations benefit from high foot traffic, strong rental demand, and robust property appreciation potential.

OCBC's real estate portfolio generates a steady stream of rental income, contributing to the bank's recurring revenue and supporting its operations. As property values appreciate over time, OCBC's real estate holdings become more valuable, enhancing the bank's overall financial strength and providing a buffer against potential losses in other areas of its business. OCBC's real estate assets can also serve as collateral for loans and other financial obligations, providing additional security and reducing the bank's risk exposure.

What is important to note is that OCBC Bank, like many financial institutions, records its assets, including many of their real estate portfolio at cost. This means that the initial purchase price or fair value at acquisition is the basis for recording the asset on the bank's balance sheet. This means that their actual asset value is understated conservatively. Should one day OCBC decides to listing their properties as OCBC Reits, the hidden value will be unlocked!

Healthy valuation

As of June 2024, OCBC's book value per share is reported at S$12.66. With the current share price of approximately S$15.30, this results in a price-to-book (P/B) ratio of about 1.2. This indicates that OCBC is trading at a slight premium to its book value, which is typical for established banks that possess strong earnings potential.

According to Gurufocus, OCBC's intrinsic value projected based on future free cash flows is $15.45. According to value investing.io, the intrinsic value is much higher at $19.10. By Alphaspread standards, the intrinsic value is even higher at $20.36. Simplywall.st generously valuates OCBC's fair value at a whopping $39.19, on par with DBS current share price.

In terms of target prices, the analysts from brokerages have expressed positive views on OCBC's prospects, citing its strong fundamentals, attractive valuation, growth potential and projected a range from $14.90 by DBS Research, $15.40 by Maybank Securities, $16.70 by CGSI Research, $17.01 by Maybank Research, to $19.40 by UOB Kay Hian in the next 12 months.

Logically if the dividend yield of OCBC is compressed to 4% as more investors shift their cash from declining Fixed Deposit, T-Bill and money market funds into bank equities, the share price of OCBC is $22! Personally, I believe there is still plenty of headroom for OCBC share price to soar higher.

Will I buy more OCBC shares at $15.32?

As OCBC focuses on sustainable growth rather than short-term dividends, the bank is strategically and well positioned for future opportunities in a rapidly evolving financial landscape. The bank’s commitment to enhancing its wealth management capabilities through the Great Eastern acquisition reflects a forward-thinking approach that could yield significant returns in the long run.

Buying OCBC shares at $15.32 not only offers exposure to a well-capitalized bank with strong earnings potential but also aligns with a strategic vision that prioritizes long-term growth and stability in an increasingly competitive market.

Additionally, several potential catalysts could further drive OCBC's stock price in the coming months and years. These catalysts include continued economic recovery in China, Hong Kong and Asia, favorable regulatory developments, and successful execution of the bank's strategic initiatives.

While no investment is without risk. OCBC's strong fundamentals, attractive valuation, and growth prospects make it a compelling investment opportunity. The bank's resilience, diversified business model, and track record of delivering shareholder value position it favorably for long-term success.

I currently own 5,000 shares of OCBC in my SRS account at a net cost of only $8.32 after lessing off the past dividends collected. As my recent T-Bill applications were unsuccessful, I am seriously contemplating buying more OCBC shares at current prices but my bargain instincts and technical analysis will influence me to place an order slightly near the 100 MA support at $14.80 to slightly below $15 instead.

OCBC will be announcing its Q3 2024 financial results on 8 Nov morning. I think the results will be positive but I hope the results will be below expectation so that their share price will correct for us investors to buy at lower costs.

Investors seeking undervalued stocks with strong growth potential and a history of rewarding shareholders could consider OCBC as a potential addition to their portfolios. However, it is essential to conduct thorough due diligence and consider individual risk tolerance before making any investment decisions.

On the back of macroeconomic factors such as economic recession fears, global political landscape uncertainties and interest rate noises, the share price of OCBC may be very volatile, correct healthily or tank any time as we have witnessed in the past.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.

Thank you for reading.

With love & peace,

Qiongster

Test My Luck on T-Bill (BS24121A) using SRS funds

   

I have more than $25k of idle funds lying in SRS account earning a meagre 0.05% in the current high interest rate environment.

Great opportunity costs incurred from waiting on the sidelines to add investment for local banks such as OCBC or DBS shares into my ultra long-term SRS portfolio.

The share prices of local banks display no sign of weakening in the short-term hence I decided to deploy the idle SRS funds into Treasury Bills.

My previous application of the 1 year T-Bill BY24103N was unsuccessful as my competitive bid of 3.0% falls way short of the cut-off yield of 2.71%.

As the latest tranche of T-Bill will close on 23 Oct 2024, 9pm today, I decided to try my luck to auction for this tranche of T-Bill, a short-term government debt security with 6 months tenor, fully backed by the Singapore government and having an AAA credit rating.

The issue date is on 29 Oct 2024 and maturity date is on 29 Apr 2025. Results will be out on 24 Oct 2024, 1pm.

There it goes.

There is no admin fee for internet banking applications unlike SSB.

Again, I am trying my luck with a competitive bid of 3.08% p.a. with a pinch of salt as I believe this round of application may have a cutoff below 3%. Thus, I am prepared for a failed application, getting back my funds to continue waiting on the sidelines.

Thanks for reading!

With love & peace,

Qiongster

Die with Zero: A Revolutional Philosophy to Financial Planning

 

In the realm of personal finance, the philosophy of "Die With Zero," popularized by Bill Perkins, challenges conventional wisdom about saving and spending. This approach advocates for maximizing life experiences rather than hoarding wealth for the future, suggesting that individuals should aim to exhaust their financial resources by the end of their lives. This article delves into the principles behind this philosophy and how it can reshape your financial planning.

Understanding the Concept

The core idea of "Die With Zero" is simple: life is finite, and the goal should be to enjoy it fully. Perkins argues that many people work tirelessly to accumulate wealth, often at the expense of experiences that could enrich their lives. Instead of saving excessively for retirement or leaving behind a substantial inheritance, Perkins encourages individuals to spend their money on meaningful experiences while they are still healthy and able to enjoy them.

The Importance of Timing

One of the key tenets of this philosophy is timing. Perkins emphasizes that certain experiences are best enjoyed at specific stages of life. For instance, traveling while young and healthy allows for more enjoyment than waiting until retirement when health may decline. By prioritizing experiences over savings, individuals can create lasting memories that contribute to a fulfilling life.

The Survival Threshold

To implement the "Die With Zero" strategy effectively, Perkins introduces the concept of a "survival threshold." This threshold represents the minimum amount of money one needs to live comfortably until death. The formula is as follows:

Survival Threshold = 0.7 × (Annual Living Expenses) × (Years Left to Live)

For example, if you expect to live for 30 more years and your annual expenses are $50,000, your survival threshold would be:

0.7×50,000×30= $1,050,000

This calculation helps individuals determine how much they can afford to spend on experiences without risking financial insecurity.

Prioritizing Experiences Over Inheritance

A significant aspect of the "Die With Zero" philosophy is the idea of giving while living. Perkins suggests that individuals should consider providing financial support to family members or charities during their lifetimes rather than waiting until death. This approach not only allows recipients to benefit from the funds when they need them most but also fosters deeper connections and shared experiences.

However, it is essential to recognize that this philosophy may be more suitable for singles or married couples without offspring. For those without children or dependents, there is less concern about leaving a legacy or inheritance; thus, they can focus entirely on maximizing their life experiences without the pressure of providing for future generations.

Balancing Financial Security and Enjoyment

While the "Die With Zero" philosophy promotes spending on experiences, it does not advocate for reckless financial behavior. It encourages a balanced approach where individuals plan for long-term care and unexpected expenses while still prioritizing enjoyment. Having a solid financial plan in place ensures that you can enjoy life without fear of running out of money.

Real-Life Applications

Implementing the "Die With Zero" philosophy requires careful planning and consideration. Here are some practical steps to get started:

1. Assess Your Financial Situation: Calculate your current net worth, annual expenses, and expected lifespan to determine your survival threshold.

2. Create an Experience Budget: Allocate a portion of your income specifically for experiences—travel, hobbies, or learning new skills—that bring joy and fulfillment.

3. Reevaluate Your Goals: Shift your focus from accumulating wealth to creating memorable moments. Consider what experiences you want to prioritize in different life stages.

4. Engage in Open Conversations: Discuss your financial plans with family members to ensure everyone understands your intentions regarding inheritance and support.

5. Stay Flexible: Life circumstances change; be prepared to adjust your plans as needed while staying committed to enjoying life.

Conclusion

The "Die With Zero" philosophy presents a refreshing perspective on personal finance by urging individuals to prioritize living fully over accumulating wealth unnecessarily. By understanding your survival threshold and focusing on meaningful experiences, you can create a fulfilling life that leaves behind cherished memories rather than unspent money. As Bill Perkins aptly puts it, “You can always make more money, but you can’t make more time.” Embrace this mindset and start living life to its fullest today.

Thanks for reading!

With love & peace,

Qiongster