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Nothing much to comment about this guy - he is still a student after all and therefore understandably is not into property investing or cars. He does have a good savings habit and he has read The Intelligent Investor, so kudos to him for that! Though of course I think he learnt the hard way not to sell a good investment too soon (I wouldn't have spotted OSIM too at 5.5c so thumbs up for him!). Yet, he seems to have gotten suck into value traps known as S-Chips. Oh well.

The Straits Times
www.straitstimes.com
Published on Dec 23, 2012
me & my money
StockWhiz winner learns from mistakes
NTU undergrad thinks it is okay to pay some 'school fees' to learn an investment lesson

By Magdalen Ng

Undergraduate Scott Tan Wei Li names American magnate Warren Buffett and famed economist and investor Benjamin Graham as his inspirations.

He is a firm believer in the fundamentals of a company and relies less on historical price charts.

This means he keeps a keen eye on any news about the stocks he holds, and companies he is interested in.

Mr Tan's portfolio comprises only equities of Singapore-listed companies and real estate investment trusts (Reits).

He said: "I prefer the Singapore market because I have a better sense of what is happening."

Together with his parents, Mr Tan recently emerged the overall group winner of the SGX StockWhiz share investing contest, winning more than $20,000 in prizes.

The 24-year-old business student at Nanyang Technological University hopes to work in the financial services industry in the future, preferably in the investment business.

Q: Are you a saver or a spender?

Well, I am more of a saver than a spender.

Growing up, I was taught by my parents the value of money and I grew accustomed to the joys of saving. It seeped into my philosophy towards investment as well and value investing has become a large part of my life.

I establish a monthly budget with a little bit of buffer and allocate that fixed amount to my spending account.

If there are any doodads that I want, I try to figure out a way to earn the amount needed before actually buying the item.

In this way, it acts as my motivation as well.

Q: How much do you charge to your credit cards every month?

I am still studying, so I do not qualify for most credit cards and I largely prefer to use my debit card.

My card of choice is Standard Chartered Bank's Xtrasaver, which offers me a 2 per cent rebate on all MasterCard transactions.

I don't spend that much as a student, so about $200 to $400 of cash each month is sufficient.

Q: What financial planning have you done for yourself?

My personal belief is that insurance is meant to cover what is needed in the scenario of an unfortunate accident, rather than for profit.

So, I believe in taking out term policies rather than investment-linked policies.

And as a student, I have fewer obligations as my parents can take care of themselves financially.

I am enrolled in the SAF Aviva group policy for about $100,000.

When I graduate next year and look for work, I will probably look into more policies, such as disability income policies.

Q: Moneywise, what were your growing-up years like?

I am from a typical middle class family. Before they retired, my father worked at Lianhe Zaobao as a sub-editor, while my mother was mostly a housewife who worked as a cashier sometimes.

We live in a four-room HDB flat and that was where my father taught me the significance of saving, and my mother showed me the importance of frugality.

I grew up pretty conscious about the value of money.

Q: How did you get interested in investing?

My father is a retail investor, so it sort of rubbed off on me.

My first investment was nearly a decade ago, when I was only 14.

I bought shares in Singapore Computer Systems at 87 cents each, with my dad subsidising the transaction cost.

I still remember it fondly, as the money I cobbled together to buy them was really saved dollar by dollar, cent by cent.

My advice for new investors would be not to be afraid of making mistakes. Instead, understand what went wrong and learn from them. It is okay to pay some "school fees" to learn a lesson.

Also, starting early and letting time do its work will benefit your portfolio.

I started out by trying to learn from the best, reading investment classics such as Benjamin Graham's The Intelligent Investors, establishing my investment framework and philosophy before letting the markets refine them.

Q: What property do you own?

I don't own any property at the moment but in future, owning the roof over one's head is probably wise. I see property as a long-term leveraged investment.

Q: What's the most extravagant thing you have bought?

I don't think I have ever bought any really extravagant stuff.

Probably the most extravagant thing in my mind now is an upcoming student exchange programme in Aalto University in Finland, which will probably set me back by about $15,000 to $20,000, once you factor in the cost of touring Europe.

I don't think I will regret it as I think of it more as an investment to widen my horizons and to experience a new culture and environment.

Q: What's your retirement plan?

Retirement is a little far away from me. But I am focused on financial freedom, where I believe that my investments should at least generate enough passive income to cover my core expenses.

Currently, it is able to but that is more due to my low expenses as a student.

Once I graduate next year, I expect my expenses to rocket but I am hopeful that by the time I am 30, my investment income should be able to cover my lifestyle needs.

Q: Home is now...

My parent's four-room HDB apartment in Serangoon.

Q: I drive...

I do not drive.

songyuan@sph.com.sg

---------------
WORST AND BEST BETS

Q What has been your worst investment to date?

It was mostly in penny stocks, including a few S-chips.

I am still holding these stocks though losses are around 60 per cent to 80 per cent. I haven't cut my losses as I have hopes they will eventually recover, especially if there is nothing wrong with the companies' financial numbers.

Q And your best?

One of my best stock investments was probably Osim, which I bought at $0.055.

I was really quite astounded to see such a brand name at such a low price and, upon further investigation, I found that it was largely due to their overseas acquisition bleeding them.

I calculated and realised that, even if they wrote off the entire acquisition, they would still be worth more than what the market cap was then.

Another catalyst then was that Osim founder Ron Sim went ahead to personally underwrite a rights issue, showing his confidence. So I figured, why not?

I eventually liquidated the stock at between $0.10 and $0.30, which means my profit was as much as five times.

But one of the lessons that I learnt was that I had underestimated the true value of the brand.

Osim shares are currently trading at around $1.80.

My second-best investment has to be the time put into studying what stocks to invest in for the StockWhiz competition. The returns were, of course, rewarding as my family and I won over $20,000 in prizes.

Magdalen Ng

(23-12-2012, 08:56 AM)Musicwhiz Wrote: [ -> ]Nothing much to comment about this guy - he is still a student after all and therefore understandably is not into property investing or cars. He does have a good savings habit and he has read The Intelligent Investor, so kudos to him for that! Though of course I think he learnt the hard way not to sell a good investment too soon (I wouldn't have spotted OSIM too at 5.5c so thumbs up for him!). Yet, he seems to have gotten suck into value traps known as S-Chips. Oh well.

The Straits Times
www.straitstimes.com
Published on Dec 23, 2012
me & my money
StockWhiz winner learns from mistakes

I think it's great that the ST finally featured someone who doesn't have a hidden agenda (perceived or otherwise) and who is an advocate of what many of us in this forum advocate to some extent.

Downside I thought was that they featured someone without much of a track record. But kudos to this guy anyway- I can only wish that I started my investing journey as early as he did.

Having said that, how many of the more successful ones (off the top of my head, a few names are: MW, d.o.g., dydx, Kopikat, Uncle Temper, Drizzt, Nick) in this forum would willing to share if the ST comes calling?

Hi Kazukirai,

You are right! This guy truly has no agenda to push or any hidden motives. Though I would wonder how he managed to win the Stockwhiz contest - usually such contests do NOT encourage value investing as the odds are stacked against a long-term perspective (such contests usually last at most 2-3 months). Also, the absence of trading commissions and a false bid-ask spread and market demand would also distort prices and shares availability to some extent. Correct me if I am wrong, but the winners of such contests usually take big risks and wager a large amount of capital and bet correctly (based on luck) in order to emerge the winner.

Reading this interview, I certainly hope that is not what he did.

Oh, I can think of one agenda though - the organization which is pushing Stockwhiz would enourage participation, along with the brokerages who encourage churn. So he is indirectly helping the organizers to promote the contest.

As for ST ever approaching me with such an interview, I would flatly decline. I do not see the point of telling people what is my most extravagant purchase, what property I own (none except my humble abode haha) and what car I drive!

yes i tot that SGX StockWhiz share investing contestwas a flawed one because I believe/heard that many (multi-bagger winners) made use of the false bid-spread and warrants/stocks trading strategy to win.

Yes I wonder what's the real motive behind the stockwhiz challenge. It promotes short-termism which actually hurts portfolio returns.

SGX has been trying to generate investor's interest very actively. Their SGX Academy offers many seminars and there are also a few free and high quality seminars where they invites experts in the field of mining, energy and resources. They also supported SIAS's investor week. There's also many roadshow like the SGX-NLB Investment Insights Seminars. Lastly, they have this stockwhiz where they invite Joanne Peh to join in.

Indeed, the right strategy to employ is to speculate on just 1,2 high beta stocks and pray for some big movement. A timeframe of 2-3 months is simply too short to realise an investment, it is more of a speculative nature. The downside is 0 but upside is unlimited

Perhaps SGX might want to focus more on protecting investor (S-Chip). Once bitten, twice shy, many will not dare to go in after getting burned.



SGX trading volumes hold up better in slow year

Published on Dec 21, 2012 by The Straits Times

By Jonathan Kwok
STOCK trading volumes on the Singapore Exchange (SGX) have held up relatively well this year unlike on many major exchanges, but brokers are still finding it tough to make a dollar.

The average daily value of shares traded on the SGX was $1.28 billion from the start of the year to yesterday, Bloomberg data showed. This is down about 14 per cent from the same period last year.

Other major players have fared far worse. The daily average value of trades is down 23 per cent in Hong Kong this year, 19 per cent on the Australian Stock Exchange (ASX) and 26 per cent on the New York Stock Exchange (NYSE).

But brokers say retail participation here is still painfully low and they are relying on day trading on their own accounts to survive.

"Retail volumes this year (for my clients) have been the lowest in recent years, at least since the Asian financial crisis" in 1998, said one remisier, who declined to be named. He noted that volumes were not as low even during the global financial crisis that began in 2008.

The remisier added that in one month recently, many brokers were getting less than $1,000 of take-home commissions from client trades.

"They have to trade on their own accounts," said the remisier. "Market volumes are contributed by us trading ourselves."

Remisier Gary Goh relies on a mix of commissions and his own dividends and day-trading income.

"The competition in the broking industry is very cut-throat," he said. "The commission rate has been coming down."

Trades from Mr Goh's retail clients are comparable to last year but these investors tend to still be cautious, as the crisis in 2008 and 2009 had a big psychological impact and "confidence takes a while to build back".

The SGX's most actives list has been populated with penny stocks in most sessions this year, with observers saying that brokers themselves are churning the stocks for a quick profit.

Other than brokers and their retail clients, institutional investors and high-net-worth individuals also contribute to Singapore's trading activity.

A host of corporate activity - such as the takeover sagas of Fraser & Neave, Asia Pacific Breweries and SC Global Developments and the recent claims against Olam International - have also heightened interest and trading volumes in these counters.

A low base effect could also be preventing Singapore's turnover from falling further.

CIMB research head Kenneth Ng said the Singapore market's turnover velocity is low and "should not be going lower from here".

"Trading volumes will hold up at this level as the velocity is already hovering at low levels," he added. Turnover velocity measures the liquidity and activity of shares by comparing the value of trades to the stock market's capitalisation.

The problem is not unique to Singapore as seen by the trading numbers worldwide.

"Ever since the global financial crisis and rebound, most markets have seen declining turnover velocity," said Mr Ng. "Investors don't dare to come in at full steam."

jonkwok@sph.com.sg

if the stockwhiz was real market, many of the winners' names would appear in MAS website instead, hehe.

not a honourable way of winning.

"I personally think it would be better if the NYSE remained as a neutral, not-for-big-profit institution. The exchange has done a very good job over the centuries. It’s one of the most important institutions in the world.
The enemy of investment success is activity. The exchange of yesterday will be better for the American investor. I know the American investor will not be better off if volume doubles on the NYSE, and I know the NYSE will be trying to figure out how to do that if it is trying to maximize its own earnings per share.Trading is the frictional cost of capitalism. GM or IBM will not earn more money if their stock turns over more actively, but a for-profit NYSE will." -Warren Buffett, 2005

SGX has a conflict of interest here. They are trying to promote trading to generate revenue for the firm and at the same time, promoting investing to the retail investors, which actually has to be long-term and not short-term as what SGX is doing cuurently.

Sounds like this guy is a timing expert in real estate! But what exactly does he mean by "It's hard to do financial planning within a dichotomy of higher cost of living and ever-increasing lifestyle aspirations"? I guess it means he is continually striving to upgrade his lifestyle? And I am also somewhat surprised he does not keep track of his savings but can afford to spend $8k to $10k a month (more than what most Singaporeans are earning) as well as withdraw $1,000 per week in cash.

Can a country club membership be considered an investment? It doesnot bring in regular cash flows!

(And perhaps I should add: yet another property investor!)

The Straits Times
www.straitstimes.com
Published on Dec 30, 2012
me and my money
Property investor gets timing spot on
HSR's Donald Han made a pile when he sold his holdings before the Asian crisis

By Magdalen Ng

Most property investors think location is the most important factor but real estate executive Donald Han puts his money on "timing, timing, timing".

Mr Han, 48, made a tidy seven-digit sum when, just before the Asian financial crisis, he sold off the properties he had co-bought with his friends in 1995.

But he added a note of caution: "When timing becomes unclear and whenever in doubt, always invest in prime location properties as these are always the last to suffer a drop in prices during bad times and the first to rise in good times."

The Malacca native moved to Singapore in 1984 to take up a degree in estate management course at the National University of Singapore, financed partially by a study loan. This set into motion his more than two-decade-long career in property.

He is now the HSR Property Group's special adviser, helping the firm to identify markets for expansion into the region.

Mr Han had previously spent 15 years at Cushman & Wakefield Singapore, eventually serving as vice-chairman.

His wife Julianne, 47, is a housewife. The couple have three children: Ryan, 18; Randall, 16; and Rae Ann, 14.

Q: Are you a spender or saver?

I am more of a spender than a saver, probably a typical case of "asset-rich and cash-poor".

I don't keep track of my savings pattern but a 10 per cent savings of monthly income would be an achievement.

My savings mainly take the form of liquid investments such as stable high-dividend stocks such as real estate investment trusts (Reits) and blue-chip property counters.

Keeping cash in the bank is simply not an option now as interest rates are near zero and inflation is about 4 per cent a year.

One is better off buying bank shares than keeping cash in the bank.

Q: How much do you charge to your credit cards every month?

I charge between $8,000 and $10,000 per month using a range of credit cards to access priority points and perks.

Even my income tax goes by the plastic charge under an instalment scheme which accumulates bonus points that can be redeemed for service and product rewards.

It's the best way to stretch your dollar or, in this case, shrink expenses. The key is to be disciplined in credit card payments.

I usually withdraw $1,000 every week from the ATM for petty cash.

Q: What financial planning have you done?

I have sufficient life and medical and hospitalisation coverage.

It's hard to do financial planning within a dichotomy of higher cost of living and ever-increasing lifestyle aspirations.

Even the best long-range financial plan or insurance policy set up say, 10 years ago, will now be deemed as insufficient.

To me, the best insurance coverage is via real estate investments.

Despite cyclical ups and downs, if one charts the property price index over say, a 30-year period, you will see a clear distinct uptrend line. Hence it doesn't really matter at which point of time you invest.

Q: Moneywise, what were your growing-up years like? What did your parents do, where did you live? What did your family teach you about money?

Life in my early childhood days was tough. I was raised in a small town in Malacca living at near-sufficiency level.

My mum was a housewife and my dad was the sole breadwinner, earning RM800 a month and supporting five children.

There was a lot of sharing growing up - the sharing of rooms, beds and hand-me-down clothes.

Birthdays were celebrated with rare tickets to the cinema or a du-rian shared among the seven of us.

Looking back, those were precious moments. Your roots are not to be forgotten.

Q: How did you get interested in investing?

My degree in estate management provided me with a rock-solid foundation and a desire to invest in real estate.

In 1992, I made my first investment - a tiny built-in 1,200 sq ft, two-storey terrace house near Windsor Hotel.

I sold it two years later, making a tidy $200,000 profit. It had been bought with a combination of cash and CPF savings for $550,000.

With some seed money, a few of my good, like-minded friends and I decided to co-invest in properties in 1995.

These included freehold properties in District 9 such as Aspen Heights, St Martin's Apartment and a flatted factory at Hillview Avenue.

We were lucky to have liquidated our investments just prior to the Asian financial crisis in 1997.

Q: What property do you own?

I own three properties in Singapore and one in Malaysia.

One is my condominium apartment in Cairnhill Road where I live. I bought it in 1997 for $1 million.

I also have a condominium apartment in Newton Road and another in Ang Mo Kio.

The fourth property is in Malacca and is leased out to a hotel operator. I'd prefer to keep their values confidential.

Q: What's the most extravagant thing you have bought?

Like most men, I spend the least on myself other than the occasional shirt, tie and cuff links. My bigger-ticket items are usually cars.

My first brand-new car, a Mitsubishi Lancer, was bought for $25,000 with COE of $1 some time in August 1991 when Saddam Hussein invaded Kuwait.

Two years later, I sold it and made some pocket money. That was probably the only time when you could have deemed buying a car an investment.

My current car is a seven-seater SUV which cost me $200,000.

It's big, strong and sometimes unfriendly to other road users because of its intimidating size. What I love about this car is that it gives me the height advantage on the roads, especially during long drives to Malaysia.

Q: What's your retirement plan?

I don't think I will ever retire as property is in my veins and part of my DNA.

Retiring in Singapore is an option, provided one is prepared to put a lid on lifestyle aspirations and expenses. Malaysia's Iskandar region is looking very interesting for potential retirees - providing an eclectic mix of lifestyle, space and a hub for medical and wellness - at a fraction of Singapore's cost.

Q: Home now is...

Home now is a cosy 14th-storey apartment at a block in Cairnhill called Cavenagh House. It's a tranquil oasis just an eight-minute walk to Orchard Road.

Q: I drive...

A Volvo XC90 SUV

songyuan@sph.com.sg

----------------------------------
WORST AND BEST BETS

Q: What is your worst investment to date?

My worst investment has to be a membership in a now-defunct country club which I bought for $30,000. I hardly used its facilities and it went belly up after a few years of operation. These days I stay away from country club investments. The irony is my credit cards now provide me with free country club access in Singapore and in the region.

Q: And your best?

The best investment is my home, which is a four-bedroom apartment at Cavenagh House with a spectacular view of the Central Business District skyline. It is right next to the Istana grounds.

I bought the property in 1997 for $1 million and it is now worth close to $3 million.