The last time I actually wrote something on this site was a couple of months ago. The reason why I have stopped writing for such a long time is that there is really nothing interesting out there in the market for me to write about as there is nothing which I can capitalize on.
Bonds in particular, the Singapore Government Bonds and Treasury Bills are still near their historical yield level which makes any purchase unattractive.
Stocks are neither here or there. It is at a price level which is not undervalued enough (at least for me) to purchase them. But it is also not ridiculously overpriced such that some upside is still possible. I'm an risk averse investor so I only seek to buy at a price significantly below their worth.
Properties should be pretty obvious to everyone. It has been in the headlines for a long time with mostly bullish news. Price are still bursting through the peak. Flip through the newspapers and properties advertisement and sale launches are still everywhere. Similar to stocks, I reckon it is not a good idea to buy near the peak.
I am actually bidding my time to capitalize on events which I think it may happen in the near future.
The stock market has been trending sideways for the past year or so. There are a few issues which may have a potential for stocks to be on the downside. These issues now are the Greek debt crisis and the sluggishness of the US economy being weighed down by huge amount of the debt. I would say that the latter is contributing more to the sideway trending that we are seeing now. Despite of this, I do not think that the market is going to fall heavily. I am waiting for the opportunity to snap up quality stocks but meanwhile, it will be waiting and waiting for the market to fall and monitoring the companies on my watchlist.
The property market locally is a bubble waiting to be burst. For me, it is not a matter of if but when. There has been a few articles out there warning about this. The main factors are as the following.
- Tightening of foreign labour policies
- Oversupply of land and properties
- Rise in interest rates
The tightening of foreign labour policies will see a drop in demand and the oversupply of land coupled with properties with developments coming in the pipeline in the next few years will be a double whammy. Besides, interest rates will not remain low forever and when it rise, it will affect the mortgage payments of properties owners and the serviceability of their loans. Still remember the property crash back in 1998 ? When this happens, it will be easy to snap up properties counters at firesale prices.
8 comments
Hi there,
thank you so much for sharing. I share the same sentiment as you on the housing issues that we are facing. it is just a matter of when this bubble will burst.
As for the market, I am wondering if you would be happy to share the counters that you are looking at (at your own comfort of course). the reason why I asked is that I am thinking of going in as the market has drop for quite some time. However I am not a savvy investor like yourself and am trying to learn some ropes from you if possible.
I had been waiting for a chance to go in and am currently looking at some stocks but not blue chips as my "ammo" is kinda weak. I only started to work 2 years back therefore hoping to learn something from you.
I understand the risk involved and hence I will blame no one but myself when it comes to investment.
PS: some green horn trying to learn ropes from a savvy investor :)
thank you
Jov
Hi Jovan,
Unfortunately, I will not be able to share the counters that I'm buying as I have done my homework and put in effort in selecting and studying these counters. It is not difficult to pick out excellent companies which are of investment potential. You can visit valuebuddies.com for references. Alternatively, you can always choose to buy the STI ETF. Your understanding is appreciated.
Kay
hi kay,
no worries I fully understand :).
thank you
jovan
Hello
I have been worried about the irrational exuberance thats been happening in the property sector in the last five years (except for a blip in end 2008- early 2009)in Singapore. 99 year leasehold properties that have only become older have tripled in value in 5 years! Seems like a lot of people believe that its natural to pay half a million dollars for a shoebox sized apartment...I could go on. But then, while I have been waxing lyrical about this, people seem to be doing the smart thing, "buying and selling, selling and buying" (as Paul Simon would say) and generally moving ahead.
This is a bit of a rant, I know. The question really is - what is it that can cool the market down? I think only 1 thing - thats an economic shock. I was thinking government policy but thats becoming less likely as the days progress.
The parallel with the 1996 burst is uncanny what with the looming crisis.... buyer beware? (I dont know)
Hi,
In the long run, the fundamentals will determine the market. In the short run, all it needs is for the market to receive a jab that drives fear and panic and that will send the market on its way down. The downgrade of US credit rating may prove to be such a jab. The instinct of people is to follow other people usually. The sense of safety comes in a crowd. As such, that's why people seems to be buying higher and higher and chasing prices.
Regards,
Kay
Kay,
Looks like the jab from the credit downgrade lasted only for a week! I see the SIBOR rate has actually come down even further making variable rate mortgages tied to SIBOR even cheaper thus raising the chances of higher property prices. The government policy changes announced also dont look like they will have any impact on the private housing market in the immediate feature. What worries me is that property prices are so expensive already that its just going to be that much more painful on the way down.
I dont see the housing market realizing the rising threat
Kay,
Please give me your mailing address so I can send you a free book!
Andrew Hallam
investlikebuffett@gmail.com
ahallam@sas.edu.sg
Historically properties have not been moving match up or down.
However population was stable as well. When one calculates taxes, maintenance cost & potential associated renovations - it becomes very clear that properties themselves provide very little /humble income.
The only bet is that their prices will keep up with the inflation.
Why are you planning to "snap" them?
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