Inverted Yield Curve and Thoughts

Recently, CNBC posted here that there was an inverted yield curve, which signifies that debts in the long term have lower yields as juxtaposed to their short term counterparts. The article is really very detailed, but what is key here is that it is considered an indicator of an upcoming recession, where it was largely accurate in the last 50 years and only a false alarm during this period.

If we think about it from another view, higher short-term rates mean it is harder for businesses and people to borrow money and might lead to an economy contraction, which results in a recession.

Well, I am looking at this from a different perspective of the article, where I am camping to buy stocks at depressed levels, which this opportunity might bring about.

I talked about the Shiller Ratio in my previous post, where Singapore shares still look pretty undervalued compared to their US counterparts, but still at a score of 15+.

Source: Barclays Shiller Ratio (Singapore)

However, if we use the 52-week low method, we do find out that not many stocks are near 52-week lows. The bottom 3 stocks which are nearest now is about 4+%. Not a lot of things to buy in my opinion...

With growth concerns looming for 2019, I doubt there is ample bandwidth for stocks to rise significantly. So instead I will be waiting for opportunities to buy when prices drop (hopefully). But of course, my guess is as good as yours.

What's your strategy? Pray tell!

My Survey List

I received some comments about a survey list so here I go!

1) Surveyon
This is one of my favourites as the number of surveys here is quite plentiful and you get about 9,000 points per survey and some mini surveys for 100-1000 points during certain events. Minimum redemption is 20,000 points which equate USD 2.

Mode: App/Desktop
Payment Currency: USD
Payment Mode: Paypal
Duration: 2-4 days

2) Viewfruit
This is another in my list but one caveat here is that you can get disqualified in surveys pretty easily. Sometimes they give you 1-2 participation points and some points in a lucky draw (randomly). Minimum redemption is 2,500 points and in multiples of 2,500 points. 2,500 points equate USD5.

Mode: App/Desktop
Payment Currency: USD
Payment Mode: Paypal
Duration: 2-4 days

3) Rakuten Surveys
I particularly like this website as they email you when there is a new survey so you don't have to intermittently check the website for surveys. Surveys also generally have a high qualification rate. Minimum redemption is 45 points and in multiples of 45 points. 45 points equate SGD3.

Mode: Desktop
Payment Currency: SGD
Payment Mode: Paypal
Duration: 1 month

4) Milieu
I love this app too because I can (almost) get one survey per day and I think I have not been disqualified by any survey yet. There are a variety of rewards here where you can get vouchers but for those looking for the cash, minimum redemption for Paypal/Paynow/Grabpay is 9,500 points for SGD10 and 18,500 points for SGD20.

Mode: App
Payment Currency: SGD
Payment Mode: Paypal/Paynow/Grabpay
Duration: 10 working days

5) Yougov
This is not bad too but one caveat is that the frequency of surveys is just too slow. But good thing is they will email you when there is a new survey and disqualification is pretty rare. Minimum redemption is 5,000 points which equate SGD25.

Mode: Desktop/App
Payment Currency: SGD
Payment Mode: Paypal
Duration: not sure because I have not redeemed yet

I used other websites such as Prizerebel and Toluna which were pretty good last time but I think as of now, the survey generation rates are not as good so I have not been visiting these websites recently. If you do find success there, please let me know!

I would like to post a disclaimer that I am not paid or recruited by the above survey sites, I am just a pure user who is trying to give some real feedback on what I used. Moreover, please note that you might not have the exact experience as I stated here, so please keep your mind open. Lastly, I did not put the links here because I think it's quite easy to google for them. Nevertheless, have fun playing around and let me know if there are any queries :)

Survey Taking- A worthwhile effort?

I thought I would like to share about what I have been recently doing and hear any opinions about it.

In December last year, my friend shared with me about taking surveys for some pocket money and I guess my curiosity got the better of me. Therefore, I decided to run a little experiment on my own and start to google and take some surveys to see how 'lucrative' it could be.

I have been taking surveys for 3 months and I went to check my Paypal wallet yesterday and I thought I would like to talk about the results to see if it was a worthwhile effort (or not) and whether you should consider it given the potential returns.

Firstly, I started a Paypal account back in December with a beginning balance of $0 and come March now, my balance is $183.74. The diagram further illustrates the breakdown on a monthly basis.

Secondly, I have been using mainly my travel time on the MRT to do surveys so instead of looking at photos on Instagram or surfing Facebook feeds, I thought why not monetize my free time?

$183.74 over a period of 3-4 months is about a monthly amount of $45-50. I would like to think of it as a nice amount which can pay off my phone bills. But that is how far it can go and no further.

Different readers will definitely draw their own conclusions from this post based on their very own experiences. But I will be looking forward to hear about your own experience and even advice regarding my little experiment.

And off to reading more financial news!

CAGR Analysis on Singtel

Building on my previous post, I would like to extend the model to a more bearish stock to see how the results are. I will be using Singtel here for my analysis and below is the CAGR for Singtel across different possible entry points on the entire time frame. (for more details on this implementation, please check my previous post)

A quick observation shows that CAGR was generally around 5% which can be attributed to the depressed levels during the 2009 periods. CAGR then plummeted below 0 around 2014-2015 periods and stayed negative aside for the anomaly there which is attributed to the 52-week low of 2.8 levels which is a distance from its current price of 2.94. This is inclusive of the dividends distributed over the period.

The point which I want to make here is that the time of entry point is not the only important factor if the stock itself is not faring well. Indeed, Singtel has not been performing up to standard since the entry of the 4th telco in Singapore. The picture we have here is definitely not as rosy as the previous example I used (Capitamall trust).

Let us look at a comparison between CAGR of the two for clearer analysis.

We see that the CAGR of Capitamall has been generally superior over Singtel, lest the 2018 periods of volatility. This further reinforces the point that finding a fundamentally sound stock which can dish out a constant stream of dividends is more important than ever.

For those who are interested in the technical details of this implementation, I downloaded the data from Yahoo Finance and used Excel VBA to calculate the ending value (with dividends) which I can in turn calculate the CAGR. I wish I could have built a more robust model without much hardcoding but I guess this is a good starting point as my time is rather limited nowadays.

I am putting the Excel VBA here and who knows, maybe someone will build something much better than me? Hopefully you will have fun with this too!

Thoughts about timing the market

I haven't posted a while because school was really busy this month with me rushing through my FYP! Nevertheless, I am glad to post again and share some ideas I have.

We always ask ourselves when to enter a stock and either lament when the stock drops after we bought, or when the stock rises if we did not buy. Now, I would like to present this situation in a more technical format, in the form of an Excel spreadsheet. One example I will be taking here is Capitamall Trust.

I scrapped the price and dividends data from Yahoo finance and did a simple analysis here. For simplicity's sake, I used the closing data of every month to look at it from a monthly point of view. The gain here is the net profit here. For example, if gain is 172.82%, that means you will get $1.72 for every $1 invested.

Compound Annual Growth Rate (CAGR) will be what I'm using to gauge here and for those not familiar with it, it is just the (Ending Value of Asset - Beginning Value of Asset) taken to the power of (1/number of years), then divided by 1. Basically, it measures the growth rate of an initial investment to its current value. To be clear too, I am accounting for dividends in the ending value to have a more accurate view and the ending value is the current price of Capitamall Trust now. For a more elaborate explanation of CAGR, you can check here.

I then plotted a CAGR graph over time here for a better visualization. 

So we notice that CAGR has been fairly constant at about 6-7% and then a sudden spike up at 2017-2018. This can be attributed to the run-up prices during the 2017-2018 period if many of you all may recall. But ignoring this outlier, we can see that any point of entry will yield us a decent CAGR of at least 6%. So during any point, it will be good to enter even when prices are higher than normal. 

But of course this model has its caveats. The reason why the picture looks so rosy is because the reit now is close to its 52-week high, which greatly inflates its ending value. If the price was any lower, CAGR would be lower than the current illustration. Another reason would be because of the consistent flow of dividends. I suppose if you replace Capitamall Trust with a bearish stock, things will not be so brilliant. 

However, I hope to bring through the message that timing the market might not be that important after all, it is identifying stocks with good potential that is the key. Of course, if we can time the market, our returns will be better enhanced but if we can't do that, we still can enjoy pretty good returns.

But of course, based on the argument that I have just presented, should I buy Capitamall Trust when it is hovering very high? Well, of course I hope I can time the market if possible. But we will see...