$$$ KPO and CZM $$$

Wednesday, July 15, 2020

DBS Multiplier Upcoming Changes

DBS will be decreasing the Multiplier interest w.e.f 1st August. Most impacted will be those with salary crediting and 1 category (credit card). Surprisingly, DBS has decided to leave the 3 or more categories alone this time round when one would think this group of people are less likely to leave/change their savings account.


Anyway, I took a quick look at the various savings account and felt that the Multiplier is still one of the better savings accounts that do not really encourage/require you to meet a minimum spending per month. However, the low 1%+ interest is really a hard pill to swallow so we have decided to fulfill another category - Investments by starting a $100 monthly/regular savings plan (DBS Invest-Saver) on Nikko STI ETF which will only be recognized for the first 12 consecutive months. Alternatively, you can consider refinancing your housing loan but that is out of the question for us when we refinance a few months ago with UOB - My Experience with Mortgage Brokers - Redbrick and iCompareLoan.

There is really nothing new here. When we blogged about DBS Multiplier + SSBs + Joint Account = Higher Interest! 2 years ago, we decided to take the SSBs bond ladder route because it seems less troublesome and "permanent" but I guess not. lol. Since the SSBs are now useless, we went to redeem all 6 of them in order to partially finance this new plan as well as to hold more cash for the crash/baby whichever comes first. Haha.


If you have not tried redeeming the SSB before, you can take a look above. Honestly, it is not very intuitive as one will have to select the year and month you would like to redeem. To do it correctly, you will have to log in to your CDP in order to view them. Not sure how it is going to work if one were to redeem the incorrect bond, will the $2 admin fee be forfeited?


DBS Invest-Saver has a sales charge/fee of 0.82% which is a small price to pay for more interest. Assuming if we have $20k in our savings account, with 1.8% interest, we can get ~$30 by "sacrificing" $0.82 monthly. On the other hand, doing nothing will net us just ~$18 interest with 1.1% interest. Meanwhile, the $99.18 monthly investment might continue to grow too. The only troublesome part is this will only be recognized for the first 12 consecutive months so one will have to take note of its ending period and change to another ETF in order to fulfill the Investments category. Another benefit of fulfilling 2 or more categories is the increase in account balance (from $25k to $50k) that will be eligible for the bonus/higher interest.

In my opinion, DBS will probably nerf/cut the interest for the Multiplier account again in the next few months but it will be targeting those people with 3 or more categories. It is simply unsustainable in this low interest environment. Wait for it, it is definitely coming!

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Tuesday, July 14, 2020

Bye Sheng Siong! Hi SATS!

We decided to sell all our Sheng Siong shares (18,000 units) at $1.64 today and it has been our top/best investment after all these years.


After holding for about 1358 days (~3.7 years) with an average price of $0.907, we have almost doubled our capital with an absolute return of 94.54% and an annualized return of 19.58%.

We felt that Sheng Siong is currently trading at a pretty high valuation and the market seems to be overly optimistic. Sheng Siong Q1 financial report has been very impressive, almost doubling its profit/EPS when compared against the same period last year.


However, when we looked at the breakdown, the increase in revenue is mostly due to the "hoarding" effect whenever PM Lee gave his speeches. lol.


Anyway, if we were to look at the last few years, Sheng Siong has been trading at an average/median PE of 20-21. Based on the current price and its average/median PE, the market is expecting its EPS for 2020 to increase by 55% to 7.86 cents as compared to 5.04 cents last year. It just didn't look realistic when we forecast it, hence it felt overvalued when we were looking at it.

Will it goes higher? Maybe, just look at Tesla!

We have also decided to redeploy a bit of the cash from the sale of Sheng Siong to buy SATS (4,000 units) at $2.84. SATS came tumbling down from its high of $5+ due to COVID-19 where it even reported losses for the last quarter (ending 31 March 2020). The management was also being very prudent by cutting dividends by ~68%! We decided to buy it as we see this as an excellent opportunity to accumulate a good business (it is essentially a monopoly in Singapore) and it is a recovery play. I can see it returning to $5 once a vaccine is found but can't say the same for SIA especially after its right issues.


Similarly, I computed its average/median PE which is around 19-20. Based on the current price and its average/median PE, the market is expecting its EPS to decrease to 13.9 cents. In my opinion, this is still quite optimistic as its Q1 losses should be a lot more when travel restriction is placed around the world compared to the last quarter when it was just beginning.


In addition, there were multiple share buy back around ~$2.90 which could be a sign that the company is undervalued. You can read more about share buy back here - Why Would a Company Buy Back Its Own Shares?

Unfortunately, SATS has dropped quarterly reporting so we can only wait till around October for its half year financial statement to get a better overview of its business.

What's the worst that can happen? Getting kick out of STI lor like SPH. lol.

You can take a look at the above spreadsheet here.

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Friday, July 10, 2020

StashAway - June 2020

Today is polling day and I'm sure we have all voted wisely :) I'm sure tonight is going to be a long night with the extended voting hours. Back to our monthly update, StashAway performance is still pretty impressive where all of them have recovered significantly from the March low and they have >20% time-weighted return now.

Anyway, we have 3 portfolios on 2 accounts now due to our new strategy - New Strategy: StashAway + Supplementary Retirement Scheme (SRS):
KPO and CZM Cash - StashAway Risk Index 22%
KPO SRS - StashAway Risk Index 36%
CZM SRS - StashAway Risk Index 14%

1. PORTFOLIO SUMMARY (as of the last day of the month)

KPO

CZM

Based on the statement (30 June 2020), our total investment is ‭$39,931.79! KPO gains $892.85 and CZM gains $‭‭‭49.65 for the month.

As of 10 July 2020, these are our portfolio performance:


KPO and CZM Cash - StashAway Risk Index 22%: $‭29,113.98 (26.99% - Capital: $24,500)


KPO SRS - StashAway Risk Index 36%: $7,604.97 (25.55% - Capital: $6,650)


CZM SRS - StashAway Risk Index 14%: $4,166.76 (22.49% - Capital: $3,750)

From here, you can see the difference in volatility/losses based on both our SRS accounts which started around the same time but with vastly different risk.

2. PORTFOLIO DETAILS 
Note that these are reported in USD.

KPO and CZM Cash - StashAway Risk Index 22%

KPO SRS - StashAway Risk Index 36%

CZM SRS - StashAway Risk Index 14%

3. FEE CALCULATIONS


I referred StashAway to 2 friends. Hence, the fee stated is based on the monthly-average assets SGD $18,973.94 x 0.8% / 366 days * 30 days = $12.44. Otheriwse, it would have been SGD ($25,000.00 x 0.8% + $8,973.94 x 0.7%) / 366 days * 30 days = $21.54.


The fee stated is based on the monthly-average assets SGD $4,036.18 x 0.8% / 366 days * 30 days = $2.65.

StocksCafe


Evan (founder of StocksCafe) made an improvement where one can now benchmark their portfolio against multiple indexes/ETFs. Looking at the time-weighted return (5.14%) for this year, we can see that StashAway Risk Index 22% is outperforming the STI ETF, SPY, and VT (including fees). If we compare across the years, StashAway's portfolio is winning by a huge margin (27.59%) except losing to SPY (32.37%). In addition, it has a lower max drawdown and lower volatility.

Which is the best? Only time will tell :)

Anyway, if you are interested in signing up for StashAway, do use our referral link - KPO and CZM Referral Link. You will get $10,000 free management fees for 6 months and we will get $16!

If you want to extract those transactions information from StashAway, do take a look at this article - StashAway Transactions Parser.

If you are interested in the smart portfolio tracker (StocksCafe) which I am using as shown above, sign up using my link for a longer trial period :) Refer to our Referrals page for more information.

You might be interested in previous months update too:
StashAway - January 2020 - $31,742.42
StashAway - February 2020 - $31,499.69‬
StashAway - March 2020 - $30,934.95‬
StashAway - April 2020 - ‭$34,830.73‬
StashAway - May 2020 - $37,298.09‬
- StashAway - June 2020 - $39,931.79

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)