How to Buy Singapore Car COE at Abnormal Low Price for with Market Cycle Method?

Ein55 Newsletter No 074 - image - COE1

Singapore car COE system is a unique way to regulate the number of cars on the road based on demand and supply of cars.  Many Singaporeans hope to buy low for car COE as its price could contribute to about 50% of a new car price.  Although car COE is not really an investment, its prices vary with stock market and economic cycle, together with human emotions of greed and fear, we could apply investment methods to buy low for car COE.

After dropping to historical low price during the global financial crisis in 2009, car COE was bullish till it reached the peak in Jan 2013. As a result of Singapore economy slowdown with low inflation rate, bearish property market and stagnant stock market, car COE has been bearish in price trends from year 2013 till now. The small car COE (Category A) has dropped from $92k to $36k (as of 6 Sep 2017), nearly 1/3 of the price (see 2 COE charts, source from coe.sgcharts.com).

COE prices usually follow Singapore economic cycle which affects the demand and supply of cars.  The private hire cars (Grab & Uber) have disturbed the natural COE price cycle in the last few years, supporting the falling COE prices but prolonging the bearish period of COE prices.  With oversupply of taxis and private hire cars currently, there is a significant drop in COE prices, especially for Category A, breaking the critical support of $40k, trending downwards, setting a 7-year low price.

Ein55 Newsletter No 074 - image - COE2

In fact, it is possible to make money from changes in COE prices. Yearly car depreciation is about $12k (about $1k/month) for a new car of $120k. If buying car with COE at low optimism with uptrend (eg. year 2009-2010), it is possible to have $25k yearly capital gains in car COE alone, more than enough to offset the car with COE depreciation.

For those with older car and COE expiring soon, one strategy is to renew 5 or 10 years of COE (using last 3 months moving average of car COE price) first, waiting for the global financial crisis to come during this period, then deregister the old car with higher COE (get back the pro-rated high COE value for years remaining), buying a new car with COE at much lower price (eg. $10k or $20k lower). This is similar to a shorting strategy in stock investment but applying in car COE.

PARF value is the remaining car value (from car value + remaining years of COE) when one deregisters car. After 10 years, PARF value for small / medium sizes car could be around $10k (depending on type of car). If one renews only COE but keeping old car, this $10k PARF value will be lost.  If 10 years COE is around $40k, adding the “lost” in PARF of $10k, total is around $50k, yearly depreciation is around $5k, still cheaper than $12k/year depreciation of a new car. One does not need to hold the old car for too long, when COE has chance to drop another $10k-$20k, lost in PARF for old car could be recovered easily when getting a new car at lower COE (deregister the old car with extended COE, get back the high COE price for years remaining). If COE price goes up, it is also a good deal to only pay for renewed COE, not price of a new car.  This assumes the old car condition is still ok, able to operate for a few years without major issue (high maintenance cost), then worth the effort to renew COE and waiting for global financial crisis to change a new car in future.

Similar to stock market. we don’t predict the future of COE price. From probability point of view, COE is at downtrend for medium term, breaking the support of $40k for category A. At the same time, Singapore economy is recovering, therefore this downtrend may not drop to very low unless coupled with global financial crisis.

Is it time to enter to buy low for new car or bid for COE?  Similar to investment, the decision has to match with personality and physical constraints.  If a car driver has to renew COE soon, then the current intermediate price correction is a good opportunity to have some discount, especially for cars in Category A.  However, the current 7-year low car COE price is still far from the low optimism target of car COE. If a driver is patient enough, willing to stop driving for a period of time, similar to waiting for investment opportunity, the next global financial crisis could help to create an abnormal low COE prices for entry.

A wise investor would know when to buy truly low for stocks, properties and even car with COE by applying investment methods of Optimism + FA (Fundamental Analysis) + TA (Technical Analysis) + PA (Personal analysis).

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These 4 weapons of (Optimism + FA + TA + PA) are only ‘Methods“.  We still need to overcome our emotions to take the actions at the right time with “Mind Control”, as well as proper allocation of funds (cash, stock, property, etc) with “Money Management”.  These are the complete 3M investing approach, applicable for both properties and stocks.

The key of stock trading and investing is to match our goals with our personalities, there are at least 10 different strategies to choose.  When Optimism Strategies are combined with Fundamental Analysis (value investing & growth investing), Technical Analysis (support / resistance / trends), and Personal Analysis (mind control of greed and fear), it is very powerful when one is able to take the right action (Buy, Hold, Sell, Wait or Short) at the right time aligning with own personality.

The unique Optimism Strategy developed by Dr Tee provides a special advantage to know which investment (stock, forex, property, commodity, bond, etc) to buy safely, when to buy, when to sell, including option of long term holding.  So far over 10,000 audience have benefited from Dr Tee high quality free courses to the public.  Take action now to invest in your financial knowledge, starting your journey towards financial freedom.

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4 Powerful Investing Weapons Bridging Properties and Stocks

Ein55 Newsletter No 072 - image - Properties and Stocks

Property stocks have been getting more bullish in Singapore while the actual properties are still stagnant. Property usually is for longer term investing, an investor could collect the property rental which is similar to dividends for stock market, collecting passive incomes during holding period, eventually selling at high for capital gains as active incomes.  We may apply 4 powerful weapons of analysis (Optimism + FA + TA + PA) to bridge between property and stock markets, benefiting from both investment markets at the same time.

1) Optimism

An investor will have high reward to risk ratio if buying properties or stocks at low optimism. Following economic cycles to buy low sell high is an ideal way to make money from trading stocks or real properties but with more patience of 5-10 years.  Since the last peak of stocks in properties and stocks in year 2007, the next golden opportunity for investing is emerging but one must truly understand the property and stock market cycles to profit from this rare opportunity.  Currently, both Singapore stock and property markets are close to 50% Optimism but US stock and property markets are at moderate high optimism, risk of global financial crisis is getting higher each day.

2) FA (Fundamental Analysis)

Quality of stocks depend on the business, it is crucial to consider only stocks with strong fundamentals. Quality of properties (including class, location, structure, design, etc) varies for each unit, we could have grade-A commercial property, we may also have rundown private properties or even bankrupt properties.  Property is different from stock because by default, property is a giant, the land and house has a minimum asset value, just depends on how much price to pay as an exchange.  Most property investors could make money even buying at high, as long as they could hold longer term than 10 years to overcome the market cycles. However, for stocks, long term investors do not guarantee success because the stock prices of a weak business could fall lower with time and eventually go bankrupt.

3) TA (Technical Analysis)

TA is frequently applied in stocks, also useful for properties but at a longer term time scale, following the trends of prices, uptrend to go in, downtrend to exit.  Trend following strategy is suitable for most investors, both stocks and properties, integrating trading into investing.  Some property and stocks investors could apply counter trend strategy if they could have strong mind control to buy low and able to hold through the winter period, collecting the property rental or stock dividends as passive incomes during holding period, waiting for the recovery of prices for capital gains as active incomes.

4) PA (Personal Analysis)

A smart investor would use Level 3 (country) or Level 4 (world) financial crisis to correct down the property prices, about at the same time for stock prices.  The same investor may invest in properties and also stocks, therefore the greed and fear could affect both markets at the same time.  Property market is usually about 3-6 months behind the stock market in a market cycle due to less efficient market, transacted prices of properties are only known after a few months later, unlike stock prices are known almost instantly.  The best low Optimism opportunity for entry, is created by the market fear while the strong business and property are still making money consistently, share prices drop significantly.  Market fear-driven (Level 3 & 4) investing opportunity is far better than individual stock or property crisis at Level 1, which share prices drop due to mainly weaker fundamental.

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These 4 weapons of (Optimism + FA + TA + PA) are only ‘Methods“.  We still need to overcome our emotions to take the actions at the right time with “Mind Control”, as well as proper allocation of funds (cash, stock, property, etc) with “Money Management”.  These are the complete 3M investing approach, applicable for both properties and stocks.

 

Learning from Q&A in InvestFair 2017

Ein55 Newsletter No 072 - image - Q&A Investfair

 

It is an honour for me to be invited as a speaker in InvestFair, the largest investment conference in Singapore, yearly since 2014.  In the recent InvestFair 2017, I share my views of opportunities for every audience in the current bullish stock market, provided one knows how to align the strategies based on own unique personalities.

The best way to learn investment is through direct Q&A from audience. I have compiled some of the questions asked in the recent 2 talks in InvestFair 2017. Let’s learn together:

 

Q: Are we in a bull market for stocks?

A: Yes, technically it is still a bull market for stocks.  However, due to high optimism of global stock markets, the upside opportunity is mainly for traders, not for investors.  For traders, one could follow momentum trading, riding the bullish stocks with uptrend but when the market signal is reversed, one has to exit firmly as a trader as well, not ending up as a long-term investor.  For investors, the opportunity is in future because there is usually a global financial crisis behind each bullish market.  However, this golden opportunity of buying truly low requires preparation from now, knowing how to form a strong stock portfolio, the timing of entry and able to take actions with personalized strategies, eg either Buy Low Sell High for capital gains or Buy & Hold for passive incomes.  Actions taking is crucial to convert knowledge into fortune, not limited to just Buy or Sell stocks. For those who have stocks, actions include how to do spring cleaning. For those without any stock, actions include preparation of future capital and also formation of a dream investment team of 10 players for giant stocks.

 

Q: What are the sectors worth consideration for stocks?

A: When we invest in stocks, besides the individual business (Level 1), we need to consider the sector / industry (Level 2), countries (Level 3) and global economy (Level 4).  It is important to know the mega trends of the market, it is hard for individual stocks to go against the higher level forces. At Level 2, it is important for an investor to support rising sectors, not to pursue sunset industries, even the stock prices could be much cheaper.  These are the sectors with upside potentials in longer term: healthcare, property & construction, REITs, banking & finance, Telco, etc.  However, an investor also has to align with higher level trends, especially to take note of possible global financial crisis (Level 4) or country recession (Level 3).

 

Q: How to position for local Telco stocks?

A: Telco is a defensive sector, traditionally Telco stocks are for dividend investing.  The no 4 player, TPG, has affected the share prices of M1 and Starhub, down by over 50% because of the concern of smaller market shares and earning in Singapore. Singtel is relatively more stable because the revenue is from regional Telco, not just limited to local Telco as Starhub and M1.  Similar to REITs and business trust, an investor who is interested in Telco stocks for dividend investing, the ideal time to enter these defensive sectors are during the global financial crisis to maximize the dividend yield while the businesses are relatively stable.  Current local Telco stocks are more suitable for crisis investing for capital gains. However, the short to mid-term trends of local Telco stock prices are still bearish, falling knives are still sharp, may not be suitable for those with weak control of emotions as it may end up buy low and get lower.

 

The key of stock trading and investing is to match our goals with our personalities, there are at least 10 different strategies to choose.

 

 

 

 

 

 

Ein55 Charity Courses with $70,000 Donation to Tzu Chi (慈济): REITs & Business Trusts Investing Strategies for Passive Income

Ein55 Newsletter No 069 - image - Charity - REITS

Dr Tee, Ein55 Mentor & Graduates have together organised 4 charity investment courses (REITs/Business Trusts in Nov 2015 and May 2017, High Dividend stocks in Mar 2016, and Discounted NAV stocks in Sep 2016) in the past 2 years, donating net income of around $70,000 to Tzu Chi 慈济 (Singapore). We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need.  More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future.

Here are key learning points from the recent Charity Course on REITs and Business Trusts:

1) Invest for dividend income is one of the important criteria that stock investor must not ignore because historical data shown that

– S&P 500 (1932 to 2014) – dividend contributes to 45% of portfolio return

– STI 30 (2003 to 2013) – dividend contributes to 49% of portfolio return

 

2) What is REITs (Real Estate Investment Trusts)?

REITs are collective investment schemes that invest in a portfolio of income generating real estate assets such as shopping malls, offices, hotels or serviced apartments and hospitals.  It is also a type of security that can trades on major exchanges like other listed securities.

– Assets of REITs are professionally managed

– Revenues are derived mostly from rental payments, >90%.

– Net income generated from assets must be distributed at least 90%, quarterly to unit holder.

 

3) What is Business Trust?

Business trust is an investment vehicle structured so that a single company, known as the “trustee-manager”, holds and operates business enterprises for the benefit of its investors but the unit holders do not have any operational control or shareholders’ rights.  Business trusts allow retail investors to have a direct exposure to cashflow-generating assets, such as utilities, shipping, sea port and it is suited to any businesses involving high initial capital expenditures with stable operating cash flows.

 

4) 7 Risk factors for REITs & BTs analysis are

– Market Risk and Income Risk which are intervene each other

– Foreign Country risk especial currency exchange rate change

– Concentration risk – depend on single property or few tenants

– Leverage risk – revalue down of asset resulting hit gearing limit

– Refinancing risk – unable to secure new loan or new loan at higher cost

– Liquidity risk – difficult to buy/sell portfolio asset

 

5) 4 common growth strategies adopting by REIT manager are:

– Acquisition – from sponsor or 3rd party

– Asset Enhancement Initiative (AEI) – shopping mall to increase NLA

– Organic growth – positive rental revision and increase occupancy

– Development & re-development – cap limit increase to 25% from Jan 2017

 

6) Best timing to Invest in REITs and Business Trusts will be

– Long-term Optimism and Mid-term Optimism < 25%

– Average dividend yield over 8%

 

How to Pay $50 to Exchange for $100 in Hongkong Land?

We could apply discounted asset strategy to buy good business at undervalue price.  One simple method is to buy strong property stocks with low Price-to-Book ratio (share price divided by net asset value).  Hongkong Land (H78.SI) is a property stock listed in Singapore with commercial properties in Hong Kong, Singapore and China.  Currently Price-to-Book ratio is exactly 0.5, at its historical low (see chart below), owing to falling share price and consistent growing net asset value.  If an investor owns Hongkong Land at current share price (about US$6), it is as good as owning a portion of Hongkong Land properties at 50% discount. This is a combination of value investing (buying at discount) and growth investing (company with growing business, share price went up 8 times over the past 15 years).

However, a trader or investor needs to apply optimism strategies to know the investment clock, when to buy and sell Hongkong Land.  Due to cooling measures of property in Hong Kong and Singapore with slowdown in economy, the market sentiment has corrected Hongkong Land to 26% Optimism.  It means the stock has 26% downside and 74% upside from long term perspective, Reward to Risk Ratio (RRR) nearly 3 to 1.  Optimism is a probability calculator, we could know the chances for trading or investing in short term, mid term and long term.

Ein55 Newsletter No 029 - image - Hongkong Land

Currently Hongkong Land is under both Level 2 crisis (bearish Singapore property market) and Level 3 crisis (Hong Kong Hang Seng Index at low optimism), suitable for medium term trading but technical analysis should be applied before entry.  For long term investing, this stock may be considered during Level 4 crisis (global financial crisis) one day when optimism of world stock indices are low.

Ein55 Charity Course: High Dividend Stocks (Learn Investing & Helping Needy People)

Ein55 Newsletter No 021 - image - Charity Course

The first charity course on REITs / Business Trust in Nov 2015 was a success (read report here), helping Ein55 Graduates in enriching the investment knowledge, helping other needy people at the same time. Chye Tin, an Ein55 Graduate Mentor and successful investor, together with Dr Tee, have organized the second Charity Course (High Dividend Stocks) on 12 Mar 2016.

The responses from Ein55 Graduates were overwhelming, about 230 students have attended this Charity Course, learning how to choose high dividend stocks, when to buy and sell them in future with investing-for-income strategies, using Fundamental Analysis, Optimism Methods and Technical Analysis.

The net income from this charity course is donated to Tzu Chi to help more needy people.  It is an honour that the CEO of Tzu Chi慈济(Singapore), Mr Low Swee Seh, also attended this charity event, sharing how Tzu Chi has helped numerous needy people regardless of races, religions and nationalities.  Through the combined effort of all Ein55 Graduates, we have donated an amount of $15,100 to Tzu Chi in this second Charity Course.

We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need.  More importantly, they have also learned the secrets of making money through passive income investing. When more Ein55 Graduates are as successful as Chye Tin, they could also contribute back to the society to help more people in future.

Here are a few useful learning points from Chye Tin in this High Dividend Stocks course:

1) We shall always ask will the dividend SUSTAINABLE and will the dividend continue to Grow? We should understand what are the factors affecting their business income? A companies without Free Cash-flow will not able to sustain the dividend pay out for long term.

2) Telecom, Utilities and Consumer Staples are considered defensive sectors that can make money in any economic environment. People are not going to shut off their power, give up their mobile line or Internet or stop buying toothpaste, food & drink when times get tough. The more predictable the revenues and earnings, the easier it is to give back some profits to shareholders.

3) For dividend investing, even in the right sector, we shall seek for the right stock that exhibited high dividend characteristic, then we shall study in detail the financial reporting of each sectors and do the peer comparison of the selected stocks in the same sector.

Q3/2015 Global Stock Market Correction: Mid-Term Opportunities to Buy Low Sell High

Chart of Global Stock - 2015-07-07

On 8 Jul 2015, I shared a newsletter when many readers were troubled by the global stock market correction (which turned out to be a mid-term low point if you compare with later second chart).  Figure above shows that in the past 1 month with charts till 7 Jul 2015, global stock market encounter series of negative news, from Greece crisis, bullish turned bearish China market, to speculation of possible US interest hike, etc.  As a result, most traders get worried, following herd mentality to exit or dare not enter the stock market again, especially observing more than 30% correction in China SSEC index.

After 1 week later, now (as of 15 Jul 2015) the global market has regained the confidence after Greece crisis has a new political solution, China stock market is strongly supported by the government. The figure below shows a strong rebound in global stock market. The last fearful point on 8 Jul 2015 happened to be a low valley.

Chart of Global Stock - 2015-07-14

 

“Normal” retail traders would wait for friends around them to make money first, after share price is up more than 10%, only then having the confidence to enter the stock market at relatively high price.  This is happening in China stock market now, those who got burnt with earlier 30% fall, some start to try their luck again with rising price.

Similarly, when market turned bearish, most people are losing money, despite significant discount given, majority of the traders would prefer to wait.  They have to pay for premium in price to exchange for confirmation in trends to overcome their fearful emotion.  The mentality of buy high sell higher depends on the support of market speculation which may not be sustainable. Any major global news could potentially erase the speculated gains overnight.  Since we cannot accurately predict the future, we need to always buy low sell high to put ourselves at low risk, regardless you are a short term trader or a long term investor, only difference is just the timeframe of interest: buy low sell high for 1 month or buy low sell high for 5 years.

In a bullish stock market, as long as the optimism level is not too high, every correction due to bad news is an opportunity for safe entry for mid-term trading.  Investing Master, Jim Rogers’ open secret of success is “Buy Low Sell High”, but how low is considered low? The world’s richest investor, Warren Buffett, has a famous saying of “Be greedy when others are fearful”, but how fearful is considered too fearful?  The Ein55 Optimism Investing Strategy developed by Dr Tee will provide the answers.

 

Free eBook on Investment – Ein55 Global Market Outlook (2014 Q1-Q2 & Beyond)

Are you interested in a free eBook on investment?  I have compiled my views on global and regional investment markets outlook into an eBook (version for 2014 Q1-Q2 and beyond), total 30 pages in a format suitable for online reading, consisting of the following key topics:

Table of Contents

1.  Mass Market Sentiment Survey

2.  Review of 2013 Global Markets

3.  US Economy and Market Outlook

3.1  US Government Debt Limit

3.2  Tapering of QE3

3.3  Fed Interest Rate Hike

3.4  US Job Market

3.5  US Property Market

3.6  US Bond Market

3.7  US Dollar, Inflation & Gold / Silver / Oil

4.  Regional Economy and Market Outlook

4.1  Europe Market

4.2  China Market

4.3  Hong Kong Market

4.4  Japan Market

4.5  Southeast Asia Market

5.  Singapore Economy and Market Outlook

5.1  Singapore Stock Market

5.2  Singapore Property Market

6.  Stock Market Potential for 2014 and Beyond

7.  Conclusions and Recommendations

 

This eBook will be updated about every 6 months on the latest development and changes in global and regional investment market, so that the readers may better prepare themselves for the potential investment risk and opportunity ahead.  Comments and suggestions are welcomed for improvement of this eBook.

For those who are interested in further details, you may sign up for my market outlook workshop and short courses on stock investing, total value worth $555 (free for first 30 newsletter readers) You may share this link for free eBook download and free investment education programs to your friends:

http://www.ein55.com/free-public-education-on-investment-programs-by-dr-tee

 

Code

Programs

Comments

M11

Market   Outlook Workshop:Global &   Singapore Stock Market in the Year of Horse 2014

English

7:00pm – 10:00pm, 20 Mar 2014 (Thu)

C1

华语股票投资课程:市场乐观指数战略: 股市获利100%的秘密

华语

7:00pm – 10:00pm, 25 Mar 2014 (星期二)

S7

Full-Day   Investment Course:Mega-Market-Cycle   Stocks Investing with Ein55 Styles for 100% Capital Gain

English

12:30pm – 6:30pm, 29 Mar    2014 (Sat)

S8

Full Day Investment Course:Mega-Market-Cycle   Stocks Investing with Ein55 Styles for 100% Capital Gain

English

12:30pm – 6:30pm, 30 Mar    2014 (Sun)