Sunday, April 26, 2015
Both of them are sitting at their spot at Changi beach.
The sun is setting.
The shimmering waves providing the backdrop to the silhouettes of people jogging, cycling, and rollerblading by.
He turned and look at her.
Her face glowed in the amber of the evening sun.
Gently, he stroked her long tresses behind her ear.
Surprised, she whispered in a embarrassed voice as she brushes his hand off, "Stop it. People may be watching..."
"You are so beautiful," the man looked intently into her eyes.
"Stop playing around."
Bashfully, she turned her head to avoid his eyes.
But her hand reaches out to his hand.
Silently, both of them just sat there enjoying the evening breeze.
"Grandpa, grand ma!" a little boy of ten shouted.
"Mother says the barbecue is ready. Come back to the chalet!"
Gingerly, she helped her man rise up from the park bench. And handed him his cane.
Thursday, April 23, 2015
Have you seen how a butterfly flies?
Haphazard, fluttering with drunken like jerky movements, and in zigzag manner right?
Makes a mockery of aerodynamic principles no?
OK, if you are not familiar with aerodynamics, just compare the flight of a butterfly with birds and other insects like the common housefly and mosquitoes.
Why do you think the butterfly flies the way it does?
Have you ever felt like a butterfly in the company of other people?
Especially on the first day of school or work?
Others can fly higher, faster, smoother, more efficiently, or at the very least, fly in a bloody straight line!
Friend, have you taken a look in the mirror recently?
You are the most beautiful insect in the world, you with your mesmerising iridescent scales in full technicolour, and you are self-conscious of the way you fly???
You are definitely not the condor. Nor are you a bumble bee!
Accept who you are and you shall soar higher! Without those bricks on your shoulders weighing you down, you'll feel lighter and freer!
You feel down because you look ugly and hairy? You don't look anything remotely like a butterfly...
Come closer my caterpillar friend. I've something to whisper in your ears...
Tuesday, April 21, 2015
When you buy computer software, especially games, there's a minimum PC requirements and recommended requirements.
We quickly learn that it' best to ignore the minimum PC requirements...
If a person wishes to have a dividend income of $50,000 per year starting this year (notice I omitted the word passive), I guess the recommended capital would be $2 million dollars at 5% yield.
Wait!? My math don't add up you may say.
Let's park this question for now and explore other alternatives:
1) $1 million at 5% yield
This will get you the $50,000 per year you so desired. But the price to pay is you are 100% all-in. No opportunity fund or dry gunpowder. No ballast.
That means you have lived through the May 2013 taper tantrum where have experienced how income stocks all got whacked in the head - some more than others. And you totally OK with the temporary capital loss. You are confident that your income stocks will recover eventually - like it did currently now. You speak with conviction as you have lived through that experience. You know what you are doing.
I would rate this strategy as minimum requirement to get $50,000 dividend income per year.
2) $500K at 10% yield
That's obvious isn't it? And that's what newbie income "investors" normally chooses.
This stock is yielding 4% but this one one is yielding 8%... Buy the 8% one! Easy!
If only they stop and reflect for a while why they are the only "smart" ones who can spot it. I mean why other investors are bidding the price up for that 4% dividend stock and not biting on the one which is yielding at 8%??? Don't other investors (especially the institutional ones) know math?
These newbies have probably not gone through May 2013 taper tantrum, never mind to have experience what it means that hell hath no fury like an income investor scorned - like during 2008/09.
How to spot these newbie income investors?
Just ask 2 questions and you'll know:
a) What's the dividend payout ratio?
b) What's the dividend growth rate for the past 5 and/or 10 years?
You'll soon realise they are not income investors but yield hogs from the blank stares you've got...
It's the equivalent of a newbie trader who jumps into the market using 10:1 leverage and have no clue what is risk management!!!???
No, $500K at 10% yield is not a strategy; its a train wreck waiting to happen...
$2 million at 5% yield for $50K
I guess some of you have figured what it means and why it's recommended - starting this year.
For those who haven't figure it out, no worries. You will in due time. It will just cost you some money but trust me, that's how we remember what not to do in the future!