tag:blogger.com,1999:blog-28086856.post3945876077992340240..comments2024-03-20T01:42:13.273+08:00Comments on Eight percent per annum: Value investing in Singapore stocks: Balance Sheet and Asset Allocation of a Singaporean FamilyJayhttp://www.blogger.com/profile/03292158817395898619noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-28086856.post-47056253048459725172007-05-06T12:41:00.000+08:002007-05-06T12:41:00.000+08:00Hi guys, it's being quite a while!Interesting thou...Hi guys, it's being quite a while!<BR/><BR/>Interesting thought 8%. WOW very insightful as usual there Berkshire!<BR/><BR/>I have something to share with regards to property. =)<BR/><BR/>In my opionion, real estate is can be good or bad, depending on how you manage it, as is with all investments. <BR/><BR/>As a primary residence, yielding zero returns while zapping away and reducing your disposable income, real estate is really a waste of resources! Like what berkshire mentioned, you really won't see the gain in value of your home unless you sell it at the right time. But then again, that means you'll have to buy a replacement to put up, and you could end up paying your profits to the next person you bought you house from!<BR/><BR/>But having said that, RE is also good if it becasue an income generating asset, say in the form of rents. I know of people with 2-3 condo renting out and more than paying off the mortage every month. But that also means buying a good piece of property at the right price. Considering the value of property in Singapore though, this risk can be very huge!<BR/><BR/>So how? Suck thumb lor! neither left nor right seems to work...haism@ll.fryhttps://www.blogger.com/profile/03751757859835343020noreply@blogger.comtag:blogger.com,1999:blog-28086856.post-7692218337667539522007-04-28T20:41:00.000+08:002007-04-28T20:41:00.000+08:00Hi Berkshire, nice to have you again. Very interes...Hi Berkshire, nice to have you again. Very interesting comments. I like them too!<BR/><BR/>Real Estate can be valued in the same way as stocks. How much rental they can give per yr, and then divide the rental by the discount rate.<BR/><BR/>It is definitely good to have some real estate. But not 80% of your entire net worth. For most Singaporeans it's hard to reduce that, bcos you need a lot of cash to bring the % down. Nevertheless, we should try!Jayhttps://www.blogger.com/profile/03292158817395898619noreply@blogger.comtag:blogger.com,1999:blog-28086856.post-43784062387169280092007-04-26T23:54:00.000+08:002007-04-26T23:54:00.000+08:00Hi 8percent,Very funny and interesting post. I lik...Hi 8percent,<BR/><BR/>Very funny and interesting post. I like it a lot. Here's a few thoughts.<BR/><BR/>1) I think the appreciation in real estate prices may eventually gives the stakeholders a false sense of security whereby they are worth more, and therefore, they will feel more comfortable to spend more on things which are irrecoverable in value, like your favorite Rolex, a meal at your fav restaurant weekly, a Gucci wallet and so on. What I meant by false sense is that for most people (regardless you are in SG or not), a high majority of us own only one single home which is our home - that is to say, we don't flip and flop our houses like investment. So even if the prices go way up, I think for most of us, it don't put real money into our pocket. So to spend that much more on a car, watch and so on, is basically straining more on the paycheck. Eventually, as I hold the view and see it, property by itself is not a real value-adding/generating asset, thus, whatever price it says are mostly on paper. And if you don't sell it before the party ends, or when you try to reach for it, maybe the gain that you see and try to reach for, just simply melts away.<BR/><BR/>2)I do not know how to value a property business, property is unlike businesses like say Coke, a retail biz, colgate or so on. I find it hard to valuate the earnings that a property can generates or command with certainty say 3 years down the road. In fact, I think property is dependent on how all other sectors perform, because that is where buyers of property earn their keeps, and thus, determines how much they will have to pay for big ticket items.<BR/><BR/>3)I think many perhaps do not realize the value of a dollar. When I say value of a dollar, it means the moment you spend a dollar today, it is gone forever. On the other hand, every dollar you keep, it is worth more than a dollar in the future. So it is wise to think that each dollar that you spend today is actually spending $50 of value, say 30 years down the road. Warren in one of his earlier annual report noted, the gist is something like this as I recall, somewhere in the 17th century, the Dutch purchased Manhattan Island for $24, it is worth about $180+ million. Most of us will probably curse why didn't our Ah Gongs were more smart to just buy a land and sit on it. Think of it, if we can say that, most of us are as unwise as our Ah Gongs. By the way, even if our Ah Gongs brought it, they ain't the wiser either because to grow from $24 to $180 million, it represents only 6.3% return annually. Compared to what the Dow did for the past century, that is a lemon.<BR/><BR/>4) It is all about mentality in achieving successful financial freedom. Not that hard, neither that easy. As you always say I remember, it lies in-between I believe in this case.Berkshirehttps://www.blogger.com/profile/02415080722037608944noreply@blogger.com