Friday, November 16, 2018

Don't mess with the Gods of Wealth

I just want to share the spate of bad luck that has I have experienced over the past 3 days.

If you'll indulge me in a spate of superstition, the thing started with me plundering the spare cash I've been keeping behind my altar of deities because I needed some spare change. While I am an atheist but I collect Gods of Wealth from countries I visit, I populate my altar with the deities along with characters from Pop Culture like Tywin Lannister, Batman, Ironman and Ozymandias.

These are, after all,  various gods and icons of wealth, after I took $100 from their stash, shit started to happen :


I keep APTV not because it's part of any quantitative model I have.

APTV is a legacy holding from my yield pig days before I started upping my investment game after gaining access to unlimited Bloomberg terminal use in SMU. APTV's fundamentals have been deteriorating for a while and my main motivation is to extract it's ridiculously high dividends and to provide a nice kicker to my leverage account.

APTV burned a lot of investors because we had this fantasy that dividends may just be by 50%. We did not expect such a drastic reduction a few days ago. Details on what happened to APTV can be found in other blogs and I lost $20,000 in one day.

This loss is manageable because I can channel it to other REITs which have been battered by the markets.

While $20,000 is painful, it can be earned back quite easily.

I was actually more worried about another counter which I owned.

b) UMS

UMS made me a lot of money over the years because it just kept splitting and spinning off dividends. The music had to stop one day because it is a cyclical business.

I have a cluster of manufacturing counters which have been 2-3 baggers in the past and given the fact that Trump will carry on this trade war with China, I could not hold onto these counters at a meaningful allocation anymore. Thus, I unloaded 90% of my UMS and Valuetronics. This is a painful decision as I think the long term view on these counters may not be as safe as higher yielding REITs in the market.

Rearranging my investments this way was painful. As I removed all the stocks that would give me bad sleep at night and replaced them with the more steady dividends counters, I also lost the potential for a rebound next January.

But I doubt holding onto UMS and Valuetronics may be the right move in the medium no matter how much I liked them. And as it turns out, Advanced Materials just had an earnings miss yesterday.

c) Spent 4 hours in NUS A&E last night

It got worse from there.

Yesterday, my daughter fell on the floor and hit her head. Five hours later she vomited. At midnight, she complained of a headache. We ended up going to NUH A&E last night to ensure that there was no serious concussion.

I was glad that was a false alarm but it clearly ruined my day today so I am not going to do any work today.

Also, I have since returned the $100 I took from the altar.

You can accuse me of the post hoc ergo propter hoc fallacy but I will not taking a lot of risks moving forward, but taking money belonging to Tywin Lanister, Batman, Ozymanidias, Daikokuten, Lakshmi, Frey and other assorted gods is a bad idea.


  1. Hi chris

    For the purpose of your investment methodology, will you be seeking to include / exclude specific criteria so that high yielding yet poor performing businesses will be omitted? Or is this part of the risks and downsides of your dividend investing strategy?

  2. There are downsides to a pure dividends investing methodology, so naturally you will need to use free cash flow to determine whether they are sustainable.

    If the yield is unnaturally high, then you have to invest as if you are gambling and that the market is underestimating value of the tock.

    More often than not, the market is right.

  3. Hi Chris,

    You may want to consider remaining invested in these said counters. I am of view that it may not be worthwhile going in and out of the counters. Invest the cash in other counters whilst maintaining the interest in the existing counters. This is the way of Dividend Growth Investment.

    You may not have the same views as me.

    To each of our own.


  4. haha, dont.mess.with.ur fortune gods which have bought.FI to you.