Letter to Batch 11 of the Early Retirement Masterclass

Dear Students of Batch 11,

It’s been a great honour and privilege to be able to conduct a 2-Day Early Retirement Workshop for you.

One of my worst fears came true when teaching this class. I fell sick and was running a high fever throughout Day 1. Because I previously had a flu vaccine, the symptoms were so minor that I was able to use Panadol to still get away with a decent program run over the weekend. The lesson I would think we can learn from this is to get a flu jab wherever possible - A $30 intervention can prevent the loss of not just my trainer fees, but also the valuable time of the students of this program.

Otherwise, a lot of things occurred outside the classroom. DPP won the Taiwanese elections. This means that Chinese tourists would continue to visit Singapore since they are probably not welcome in Hong Kong or Taiwan, which in my opinion, should make this a bullish event for hospitality trusts with Singapore assets.

This is also the class where I begin my attempts to introduce investments outside our quantitative models. For the blue-chips equity portfolio, I made sure that only household brands were admitted into the portfolio mix. This is consistent with the idea that 2020, investors will be willing to take on more investment risk as it is the last year of the Presidential cycle. I am glad that after review, the class has accepted both proposals.

For the income portfolio, the class took a different tactic compared to previous classes, voting for a portfolio that gave higher returns but at a higher risk. Given that yields of such a portfolio is low, I had to insert two counters to uplift the dividend yields and am glad that one stock was chosen. The final product would yield 6.55% and over 10.02% when leveraged with an equity multiplier of 2.

I felt that the class did it’s best today and we were careful and judicious about eliminating stocks from the quantitative models. I will be investing $17,000 into the 17 counters that you have selected over the past two days. As I might be travelling to KL this week, execution will be at latest next week.

Finally, it is heart-warming is that I am seeing students leave the classroom and chatting in groups after class. Please don’t forget that the ERM Class is a significant investment on your part and you should network aggressively – maybe a fellow classmate may become a springboard to better things in the future.

I will see you folks at the Facebook group.

Christopher Ng Wai Chung