I am a free thinker but I lean towards the teaching of Buddhism

Saturday, February 25, 2012

What I did with my new found wealth (2011)

2011 was a tough year for my investment portfolio. The stock market was hit by the Tsunami in the first quarter and the Euro Zone problem in the second half of the year. At the start of the year, my fixed income was yielding more than 20K per month and I decided to venture more into equities to diversify my portfolio.

With my main focus on building up my passive income, I decided to buy into REITS listed in Singapore. Some of the REITS and equities that I accumulated are as follow:

REITS
1. Areits
2. Ascott Residence Trust
3. Mapletree Ind Trust
4. Cache Logistic Trust
5. Mapletree Log Trust
6. CDL Hospitality Trust
7. Suntec Reits
8. K-Green
9. Mapletree Commercial Trust

Dividend Stock
1. Singpost
2. Sats Airport

When the Tsunami struck in March, my equities portfolio suffered a lost of about 300K and I was wondering if my equities investment strategy was a mistake. Luckily, I stood my ground and the stock market fully recovered by end April. Gaining more confident in my stocks choice, I began accumulating even more equities. This wrong sense of confidence cost me dearly when the stock market dipped in August. The period from August to October was the most painful period of my life. I had never lost so much money in my life and it really hurt. I applied the same strategy of not cutting lost until October.

In October, I attended a market outlook seminar organized by one of my bankers and they were predicting a further slide of about 20% to 30% by the end of the first quarter in 2012. At that time, I had researched intensively on the Euro zone problems and arrived at the same conclusion that the Greek will eventually default. Thus I sold more than 50% of my equities on strength in late October. I was relieved when the market dipped again as predicted in the last quarter.

Still nursing my wounds, I decided to focus more into bonds again. By the end of December 2011, I had added the following bonds to my fixed income portfolio:

1. Guccoland, 3yrs, 4%
2. Cheung Kond Bond, perpetual, 5.13%
3. Banyan Tree, 3 yrs, 5.5%
4. Ascott Reits MTN, 4 yrs, 3.8%
5. DBS Pref Share, Perpetual, 4.7% (secondary market)
6. GLP Perpetual, 5.5%

When the year came to a end, I was more at peace with my investment portfolio. I decided to count my loses for the year 2011. At the end of the year, I was back to square one. I broke even! How is this possible? My equities portfolio was about 12% in the red. When I counted all my dividends from the fixed incomes and equities, I was able to break even with a tiny little profit!

At the end of 2011, I think I understood the meaning of diversification. My whole portfolio consist of properties, equities and fixed incomes. 2011 was a lousy year for equities but my fixed income and properties did quite well and more than make up my lost in equities. My average passive income for 2011 was more than 40K per month.


Portfolio: 2011


In 2012, I hope to achieve a passive income of 50K per month.

Friday, February 17, 2012

The Letter That Was Never Sent

Nobody in the company knew that my last day was on the 1st of November 2011. When the news was released to all the staffs, many were shocked that the company founders left so abruptly. I did not prepared any farewell speech but I did prepared a farewell email that was supposed to be sent shortly after the announcement. However, for some reason, this email was never sent. As time passes, I find less reason to send out this email. Below was my email to all my ex-employees that was never sent:



Hi Everyone from XX Hydraulic

I would like to express my pleasure to have the opportunity to work with all of you. Some of you like SP Ng, Eric, Louis, Tay, Ah Huat and Ah Hin were with us since the first day XX Hydraulic was incorporated in 09.09.1999. As you all know, 1st Nov 2011 is our last day with GXXXX and I would like to bid everyone a farewell and hope all the best in your future endeavor.  

I am sure that some of you are very curious why we leave GXXXX and what is our future plan.  Working with GXXXX for the past 3-1/2 years, I begin to understand the difference between privately owned business and corporate world. In a private business, the owner takes ownership of the risks in all business decisions while corporate managers follows the collective business decisions decided by the upper management. What work best in each entities does not not matter to the corporate as conformity is valued by the upper management. Entrepreneur by nature, I was unable to fit in well into he corporate environment. I stood out like a sore thump. 

I realized this fact in 2009 after BXXX left and different managements come and go. I would like to specially mention BXXXX because I truly admired someone who was willing to fight the corporate and let us managed the company the entrepreneur way. His faith in us was proven right when XX Hydraulic's sales grew by 20% in 2008. This was considered a formidable task as that was the year we saw the financial melt down when Leman Brother collapsed. In fact, the GXXXX's CEO gave special mention about our achievement in his annual report briefing at GXXXX HQ in Colorado even though XX Hydraulic is just a little red dot in GXXXX. This would not be possible without all of you working together as a team.   

Tired fighting with the GXXXX management, I decided to 'fade' away in Nov 2010. That was the time I told KM that I am willing to hand over the management of XX Hydraulic to someone else. At that point in time, no one knows that I had decided to leave GXXXX when our financial obligation to GXXXX was over. I know that I had been telling all that I was happy with GXXXX and I am not leaving. I am sorry to those whom I lied about my future with GXXXX. I was just telling a white lie so that the transition would be smoother and less disruption to XX Hydraulic's operation. 

The person that I recommended is JXXX and some of you might question the wisdom of my choice. To tell you the truth, I have no idea what is the quality of JXXX's leadership but I do know his character. I know that JXXX is someone that will not fire someone just because he doesn't like your face or attitude. In my own opinion, all the staff at  XX Hydraulic will be better off with a Asian manager rather than a Caucasian. A Asian manager will have a better understanding of our culture and more tolerant towards all at XX Hydraulic who are used to our traditional style of management. By the way, I still think our style of management is still the best for us XX Hydraulic. This is my personal opinion and not everyone will agree with me. If there is any advice that I would give to the management in GXXXX, it would be The Ant Story that I have attached. Never loose sight of the all the people who truly contributes to the success of XX Hydraulic!  

And finally, something about my future. There are many people, relatives and friends asking what is my future after XX Hydraulic? To be frank, I have a hard time answering this even though I have thought about it many times over. To prepare for this event, I have started my financial planning even before we decided to sell XX Hydraulic. Life has been very good to us and I am very lucking not to have encountered any life changing failure. I have decided to take a step back and enjoy the simple joys of life that we have neglected with our busy schedule of life. I do not have any 'big plan' for at least two years due to the trade exclusion clause that I have signed with GXXXX. I will chill out for at least a year or two before deciding what kind of business I would like to start again. Maybe I will truly retire.

Once again, thank you for your past support and may happiness be with you.

Best Regards
YJ72