Friday, July 27, 2018

July Update

It's been awhile since I updated the blog. Most of it was due to a near full utilization of my resources, and also due to the fact that I started a new job.

The plan right now is to move at least 50% of my post-CPF salary into various equities, bonds and other investment options.

Truthfully, though, I am pretty disinclined to place my money into bonds, just because I believe a better utilization of my resources can be through ETFs or just choosing common stock. In order to achieve my goal of early retirement, I have to take on a riskier position in terms of my finances, but I would still consider my investment portfolio fairly defensive. It is also imperative that over a longer period of time, we can expect a stable and strong company to be able to consistently outperform most bonds, which is also backed by what Warren Buffet has mentioned multiple times, especially with the low interest rates (albeit growing).

Growth Stocks?
The truth of the matter is that many of the FAANGs and other growth stocks can be very appealing, but the fact is that they can be extremely double-edge swords. Valuations tend towards intrinsic price over time, and overvalued stocks tend to crash down. I know this can be a little hypocritical considering my choices of Alibaba and Alphabet, but these two stocks were chosen for their strong viability in sustaining growth and for their transitions into mature companies. The moats behind the two companies are not something I foresee other companies taking over in the long run. In comparison, the recent facebook drop highlights the fragility of growth stocks, especially in the tech sector. Facebook as a social media site may seem to have a moat now, but it can be argued that it could be easily replaceable just as Myspace was in the past. We can look towards the transition towards instagram and snapchat (granted, of course instagram being bought over), but if in a few short years the transition can be so big, what will be the next thing after instagram?

Value investing?
Design Studio is still something I am keeping my mind on right now, in terms of adding towards the shares. While not necessarily a company with a moat, this company goes more in line with the traditional Graham stock. You can refer to my earlier post on my logic behind the purchase, but I see it as something I may consider adding to, in spite of the small cap and the possible low liquidity.

Moving Forward
Starting a new job means that my focus is fully on doing well in my career path and to obtain a high enough salary to secure my early retirement. Investing however is still paramount to achieving this goal, and I am looking forward to the time when I secure enough REITs and dividend stocks that I can retire on them alone. The magical number for me is $5000 monthly, post-payment of any housing costs, so I look towards achieving that in the next 10 years.



November Update

As previously mentioned, I am adding to Alibaba stocks till the end of the year for it to become my largest holding. However, instead of i...