Tuesday, March 24, 2020

What Happens If You Are Almost 100% Vested? - Part 3 (Updated)

I have receive lots of comments on InvestingNote on my previous post. It made me realise that I have taken too little risk.

I have also complicate matters by my formula.

So I have made changes and revamped the plan.


This should help everyone to understand my plan better.

1. I will borrow 3Y for 6 months for the initial balance transfer.
2. I will pay A for 5 months to reduce the outstanding. Note that Y=5A (It should not be 6A because you run the risk of not paying in the last month).
3. Roll over 2Y for another 6 months for the subsequent balance transfer.
4. Continue to pay A to reduce the subsequent balance transfer.
5. Place Y into SSB to offset some of the processing fee in both the balance transfer. 

Thus, it is important to ensure that Y should be below your monthly gross pay. A should be about 15% of your gross pay.

Do note that the main risk of this plan is losing your job. Therefore, if your job is unstable now, please DO NOT ENGAGE IN THIS PLAN.

Hope the above shows a better understanding.

Crazy Plan. Crazy Thoughts. Crazy Portfolio.

These information were shared with members of my Fundamental Scorecard Telegram group. If you are interested, feel free to join us. 

We talk about everything under the sun about investing with a focus on US, HK (slightly lesser) and SG companies.

Monday, March 23, 2020

What Happens If You Are Almost 100% Vested? - Part 3

To update all readers, the plan has already been carried out.

I continued to have friends, whom advised me against carrying out the plan, as well as some others whom have carried out their own leverage plan.

Just to emphasize I will not be going ahead with margin or leverage lending. I prefer to borrow a fixed sum with a discipline way of repayment. This will allow me to plan better.

Basically I did a fund transfer with Standard Chartered Promotion of 1% of processing fee for 6 months without any other cost.

And this is the plan of repayment:

1. I have "X" amount for investment.
2. I will place "X" into Singapore Saving Bonds.
3. I will borrow through Fund Transfer 1 for the amount of "X+Y" for 6 months.
4. The portion "Y" will be repaid via monthly injection of cash amount "A" over 6 months.
5. In the event the market recovers in 6 months, I will take out "X" from Singapore Saving Bonds and repaid the outstanding amount of Fund Transfer 1. The amount of Fund Transfer 1 should remains with either "X" amount or lesser.
6. In the event the market did not recover in 6 months, I will borrow the amount "Z" through another bank's Fund Transfer for another 6 months and use it to repaid the outstanding amount in the Fund Transfer 1.

The advantage of the plan is: 
(1) I have the ability to invest more at this moment and 
(2) to own the shares that I invest in currently, and 
(3) this investment will have a longer time to recover back, and
(4) I can continue to roll this debt forward at a lower amount as I repaid it consistently, and
(5) the interest earned from the Singapore Saving Bond can offset the processing fee over time. 

However, the risks of this plan is that: 
(1) you must be continually be employed during this period, and
(2) any non-payment will result in being charge 24% of late interest on the outstanding (I think so), and
(3) rolling over of debt will result in higher total processing fee, and
(4) I must be able to select the correct company.

Next up, I may talk about some strategy or go into each company that I am currently vested in.

Crazy Plan. Crazy Thoughts. Crazy Portfolio.

These information were shared with members of my Fundamental Scorecard Telegram group. If you are interested, feel free to join us. 

We talk about everything under the sun about investing with a focus on US, HK (slightly lesser) and SG companies.

Wednesday, March 11, 2020

What Happens If You Are Almost 100% Vested? - Part 2

After my last post, I have many friends that told me to not proceed with the plan. I also have friends asking me about rates and from which bank I am getting the loan from.

I will need to be upfront with all the readers, as I told one of them:

"I agree that if there is no need to leverage, then better not to leverage. In fact I don't encourage this as well. In almost all my courses, I already stated at the start of each course that we should only invest with disposable cash, so no irrational thoughts will occur."

However, due to the recent downturn, I also have thoughts that if I have the ability (in terms of future cashflow) and already the cash to pay off the amount I leverage, then I should be fine.

To be honest, this is similar to taking up a property loan. Just that a bit on the short term.

So what I found out and I intend to do?

After researching, I will be doing fund transfer as I found some banks offering 0% to 3% EIR/processing fee.

Eventually, I will only be getting a very low 5 figure fund transfer amount at 1% for 6 months.

In addition...

I also met up with a TA Guru recently. I was told the downtrend will continue for a significant prolong period - years in fact.

Rather than saying the whole market will be on a downtrend, I will say the market will be super volatile.

Oh.. and I am taught a new stuff today - DLC.

I have always said - as investors we should form our own opinions, have a plan, look forward.

Crazy Plan. Crazy Thoughts. Crazy Portfolio.

These information were shared with members of my Fundamental Scorecard Telegram group. If you are interested, feel free to join us. 

We talk about everything under the sun about investing with a focus on US, HK (slightly lesser) and SG companies.

Monday, March 9, 2020

What Happens If You Are Almost 100% Vested?

Yes. I am almost 100% vested todate and it is frustrating.


You will have thought that the vast amount of experience I gain over the years will be able to carry me through this downtrend.

But no, at this point in time, the little cash I have left with make me doubt myself at times. This is especially so, when you know US market will fall more after New York declared a state of emergency.

So what did I do?

I wrote down all on companies I have on a piece of paper and stay away from all share price information. Then I decide which company in my portfolio I will want to add, hold or sell/reduce.

I realize I tend to remember the most important points of each company during this exercise. This point will eventually be the main reason why I bought in the first place and my subsequent action.

Next, I determine the cash I have if all selling actions are completed. After that, I filter out those companies that will recover the fastest or had declared dividends that will eventually be given out.

This will eventually allow me to concentrate the little cash I have to buy these companies.

So what else will I be doing?

However, I still realize that my cash amount is still slightly insufficient. Do note that, after the initial exercise, I decided only on 2 to 3 companies.

So I decided to leverage, not via margin, but to borrow from banks as an individual at a very low interest rate (below 3.5% pa). There is currently a facility in every bank that provides this service.

Nevertheless, this amount will not be significant but sufficient for now.

The reason I did not go for margin account is because, in this downtrend, I am unable to see the bottom yet. To leverage through margin at this point in time will be foolish. However, it is also important that one gets ready a margin account if the requirement arises in the later stage.

The reason I go for a bank loan is due to the fact that I will have some cash to purchase the selected companies at the current share price, with the ability to repay the purchase through installments or in phases over a fixed period of time.

Obviously, all plans have risks. The main risk is I lose my job and the ability to repay the purchase. Thus, I must ensure that I am employed during this period of repayment.

Crazy Plan. Crazy Thoughts. Crazy Portfolio.

These information were shared with members of my Fundamental Scorecard Telegram group. If you are interested, feel free to join us. 

We talk about everything under the sun about investing with a focus on US, HK (slightly lesser) and SG companies.

Sunday, March 1, 2020

Recap: Steps To Take During Market Correction

As an investor, we should strive to be better than ourselves.

This Coronavirus situation gave me an opportunity to relook at steps to take during market correction.

I had written 2 evergreen post in 2018 (post 1, post 2) where wrote about the situations and the possible actions to take during market correction. 

Nevertheless, the current situation allowed me to take a closer look at the steps. 

Basically, I have further broken down into a 4 step process: SELL, FOCUS, CONCENTRATE, PHASES.

This 4 steps basically meant that:

We should SELL our weak companies to increase our cash holdings. Then we should only FOCUS on companies in our portfolio and not our watchlist, unless those are more attractive (meaning margin of safety exceeded those companies on your portfolio). The idea is to reduce the number of holdings in your portfolio and increase your cash pile in order to CONCENTRATE on purchasing those companies in your portfolio that will recover the fastest when economy recovers. Finally if you have a huge warchest, purchase in at least 2 PHASES.

Nevertheless if you are, like me with little cash, you can consider to be 100% vested.

Some of you may question if I believe the bottom is near, thus I stated to be 100% vested? The answer is No.

This is because, I am looking individually at those companies in my portfolio.

As explained by a member of my Fundamental Scorecard Telegram Group stated, "to buy or accumulate on the company because it share price has reach your target price and you feel that you have a significant margin of safety". That is why I will consider to be 100% vested.

In addition for those that are timing the market, its time to act. If you continue to shift the goal post, the goal will never be scored. 

These information were shared with members of my Fundamental Scorecard Telegram group. If you are interested, feel free to join us. 

We talk about everything under the sun about investing with a focus on US, HK (slightly lesser) and SG companies.