Horizontal links

Friday, 6 January 2012

Learning (leveraging) from young finance bloggers (Drizzt and Dividend Warrior)

There is a reason why I like to keep company with young finance bloggers in cyberspace.

It’s not that I am “lao hero” (having my mid-life crisis) and unwilling to admit my age. OK, maybe, but that’s not the point! (And you can stop staring; it’s all real lah! No botox, no collagen!)
That’s because I am a creature of habit and past experience. Experience helps me to find short-cuts and “cut-to-the-chase” so to speak. But I am also aware that it can be limiting in the sense I may brush off new ideas or opportunities that are foreign to my past experience…
Let me share how I was inspired from 2 young finance bloggers recently. They have helped formed one of my investment “watch-list” for 2012.

His recently foray into US dividend stocks – despite the forex currency risk (MAS will let SGD appreciate slowly to contain imported inflation) and the US withholding tax (bites into dividend returns) - caused me to reflect on a conversation I had with an insurance agent during 1998.
My original agent resigned and being an orphan account, this new agent took over and invited me for a drink at my neighbourhood hawker centre (must be new or low budget agent). He was making a spin on seeing how the Asian stock markets have crashed in 98, I “should” make an investment in ILP (investment-linked-policy) for European and US equities. Trying his best to “educate” me on diversification…
I bought nothing and less than 9 months later I received a notification he quit and I’ve been an permanent orphan account ever since. I smell or what?
After the 97 Asian financial crises, the emerging markets came roaring back! Especially the worst hit Asian countries like Korea, Thailand, and Indonesia. If you benchmark US and European equities against these 3 Asian countries from 1998 till today, what do you see?
The “safe” bet is not always the “best” bet  J

From this paradigm shift, I realised my current core portfolio holdings are in companies with revenue exposure mainly to Asia ex-Japan. Thanks to Dividend Warrior, I am now getting some of my unused dry gun-powder to deploy in the beaten down US and European equities for 2012.
Do note I’ve not invested the funds yet. I am doing my pre-purchase research and fact findings now. So when the other shoe finally drops this 2012, I can pull the trigger without missing a beat!

What stocks to buy in US and Europe? One sector I am looking at is Technology. For e.g., multinationals like SAP and Cisco are very cash rich and derive their revenues from all over the world. The US and European economies may suck for the next several years, but that does not mean a US or European listed company will underperform in lock-step.
Oh my god! Didn’t I say I am a top down macro guy? Why am I getting involved with bottom-up stock picking?
That’s where Drizzt’s blogs came mighty useful – he has another technology productivity blog too!
Although I am a technology laggard, I am able to glean some interesting macro trends to the future. Never mind the fact I am clueless as to why today’s youngsters love their tech toys so much?
Since I’ve realised that I cannot match today’s younger investors when it comes to technology stocks, I decided to “outsource” by investing in a mutual fund that invest in US and European tech stocks. It’s easier for me to focus on evaluating the fund manager instead. I stick to what I know best – dealing with people J

Borrow with pride but I do it my way

As you can see, I just needed a catalyst, an "Eh, why didn't I see it before?", a "That's interesting...; an "Ah ha" moment!

The rest I will take my personal responsibility. This is something I can't outsource.

There! Now you know why I keep company with the young finance bloggers.

Don't you dare stalk them! Wait they run away how?

5 comments:

  1. Hi Jared

    It's good to hear investment ideas from others to help us refine our own investment strategies.

    I tikamed some Capitalmalls Asia 10 year bond (3.8%) to diversify my portfolio as it equities/cash now. Some bonds would help spread out the risk and even out returns.

    Have to wait next week to see if I've been alloted. :-)

    Be well and prosper.

    ReplyDelete
  2. Hello Panzer,

    I wish you get all the Capitalmalls Asia bonds you applied for!

    I think for the next several months, there will be more corporate bonds issuance in Singapore.

    It's good that corporations are now offering bonds to the retail market - and not just to institutions like in the past :)

    ReplyDelete
  3. sir, dont you find mutual funds too expensive to maintain?

    ReplyDelete
  4. Guru,

    Just call me Jared or SMOL ;)

    I normally hold a mutual fund for average 3-4 years. Sometimes I even swing trade mutual funds by taking profits after 6 months!?

    I don't mind paying for performance. What's 1.5% or 2% management fee if the fund can return at least 10% for me (assuming buying a low cost index fund or ETF "only" returns me 5%?

    I think the focus on minimising "costs" when taken to the extreme can be counterproductive.

    But that's me. I follow what works for me ;)

    I defintely not a buy and forget investor. I am more an equities man-whore.

    ReplyDelete
  5. Ah understand now SMOL, haha equities man whore, that's something new :)

    ReplyDelete

Related Posts Plugin for WordPress, Blogger...