Top Reads this Week (24 Nov)

Rounding up top reads from around the web, including articles shared by fellow investors in the Financial Horse Facebook Group.

Singapore narrows 2019 growth forecast to 0.5-1% as Q3 GDP picks up (CNA)

Singapore narrowed its annual growth forecast to a range of 0.5 per cent to 1 per cent on Thursday (Nov 21), as official data showed the economy picking up pace slightly in the third quarter. This marks the third revision in the country’s 2019 growth forecast, which was previously penciled in as between 0 to 1 per cent.

Singapore, Mexico sign new deals, affirm ties (Straits Times)

Singapore and Mexico signed a series of new cooperation agreements on Tuesday that underscored the multifaceted nature of ties between the two countries. Both pledged to conclude a regionwide trade deal by this year.

Among these were agreements to promote greater cooperation in water resource management and closer partnership in science and technology cooperation, and a renewed deal to team up on international development and tackle transboundary issues such as pandemic outbreaks.

Investing returns are likely to be much lower in the years ahead, so here’s what to do (CNBC)

• Investing experts are preparing strategies for an environment when returns get less robust.
• Stocks rallied this year beyond the hopes of many on Wall Street. The Dow topped 28,000 on Friday.
• In a lower-for-longer environment, dividend stocks are popular as are quality and alternative investments.

Mateyo is stressing diversification, even though the traditional 60/40 mix of stocks and bonds may need some tweaking ahead with bond yields likely to hold low.

More specifically, he also sees room for dividend payers, but also is looking for alternatives such as private equity and hedge funds, which have been underperforming the S&P 500 but have been providing fairly steady returns even in times when the market has been down.

“We are in this low-rate environment for a while. There are a number of good things happening that we want to acknowledge as well,” Mateyo said. “Being in the equity market makes a lot of sense. High-quality, dividend-yield stocks are things that make a lot of sense in this environment and provide good returns going forward.”

Singapore, the only country in Asia in the top 10 for having a competitive workforce (The Independent)

The study showed that Singapore scored well in terms of its readiness due to students’ high scores in the Programme for International Student Assessment (PISA), high graduate percentage in the sciences, effectiveness of primary and secondary education, and student mobility.

Singapore scored fairly low in the implementation of apprenticeships and prioritization of employee training. Singapore also ranked quite low considering the percentage of females in the workforce.

Singapore proposes to regulate bitcoin futures (CNA)

Singapore’s central bank plans to bring bitcoin and other similar cryptocurrency futures traded on approved exchanges under its regulation in response to interest from international institutional investors, it said on Wednesday (Nov 20).

In a consultation document, the Monetary Authority of Singapore (MAS) said that it had seen interest from institutional investors in trading “payment tokens” like bitcoin and ether, who “have a need for a regulated product to gain and hedge their exposure to the payment tokens.”

Derivatives products are a particular concern for regulators looking to protect investors, and MAS said that it did not consider bitcoin and other similar derivatives to be suitable for trading by retail investors.

Malaysia stocks get cheaper by the day but few want to buy them (Straits Times)

Global funds have yanked more than US$2 billion (S$2.7 billion) from Malaysian stocks in 2019, the biggest outflow among emerging Asian equity markets. More than a year after Prime Minister Mahathir Mohamad took office pledging to boost the stock market, investors have been left underwhelmed by a cut in public spending, a lackluster ringgit and question marks over the succession of power.

The FTSE Bursa Malaysia KLCI Index’s 12-month forward earnings estimate has declined more than 12 per cent since the Pakatan Harapan coalition assumed power in May 2018, according to data compiled by Bloomberg. Business sentiment took a beating after the government shelved several large infrastructure projects and slashed spending to rein in its debt.

5 Career Moves to Make with No Regrets (SGG)

A recent career survey with 1,000 executives showed that they had no regrets making these career moves.

Quitting a job they didn’t like – 56%. Life is too short to be stuck in a job you hate. While you shouldn’t up and quit with no savings or back-up plan, you should take steps to shift gears if you feel that this job is not for you. When there is a will, there is a way. With today’s fast-changing economy and job climate, changing jobs is no longer a big hassle.

Russian Equities – The Ultimate Value Investing Market. (Forbes)

Russia’s RTS Index year-to-date is the best performing stock market globally with +37% return in U.S. dollar terms, ahead of 2^nd best performer Greece with +34.5%.

Russia’s debt to GDP ratio is just around 20%. Brazil’s for example is close to 80%. China’s total corporate, household and government debt rose to 303% of GDP, according to the Institute of International Finance. Russia’s household debt to gross domestic product ratio in comparison is 14% according to Moody’s.

The global FX (Foreign Exchange) market has also started to notice Russia’s better debt dynamics and fundamentals as RUB (Russian Ruble) is now the world’s best performing currency against the U.S. dollar with +16.4% total return this year.

Dear Saudis: An Open Answer To Questions About Aramco Investing (Forbes)

There are strong indications that a bubble will grow around Aramco shares as reports come out that some Saudis are going to extreme lengths to invest in this stock.

Investments in this IPO are not without risk. In fact, the risks may be severe. Some reports estimate that up to one third of all Saudis will invest. The share price may very likely appear quite high on that first day of trading in December, and it seems likely it will rise thereafter. But there are reasons to fear a bubble, a phenomenon in which the price of the stock is overpriced and will eventually plummet.

I was too scared to invest during the last recession, but I won’t be making that mistake again (Business Insider)

But stocks don’t live in a vacuum. While they may be “on sale” during a recession, a recession brings along with it several other factors that eat away at the disposable income you need to be able to invest in the first place. Housing insecurity, income insecurity, and austerity policies all may make the idea of investing seem laughable to most American households when they’re living through a national financial crisis.

If I’m fortunate enough to remain financial stable during the next recession, though, I won’t make the same mistake. I’ll delegate much of any disposable income I have towards my investments. In the meantime, I’ll be taking other steps to fortify my finances and career so I’m in a place to have a disposable income when the next recession strikes.

What Investors Need to Know About Late Cycle Investing (Forbes)

Currently, Warren Buffett is sitting on $128 billion of cash in his Berkshire Hathaway company. This shows he is being very cautious and doesn’t want to deploy the cash in this expensive market. He is a very good long-term timer, always having huge cash at the tops and the bottoms, and then is one of the few able to pick up the bargains.

Of course, in a bull market, especially the first two-thirds or so, a heavy concentration in stocks will be well rewarded. After that, an asset allocation shift is very important. Getting cautious late in the cycle and focusing on less volatile investments pays off.

In bear markets, the average portfolio may lose 60%-80% in value. Don’t rely on earnings to support the stock market. In the 1974 bear market, earnings on the S&P 500 stocks continued to rise, quarter to quarter, during the entire bear market. But the very broad Value Line index lost 80% of its value.

11 entrepreneurs and CEOs reveal the best tips for negotiating virtually anything (Business Insider)

First, be crystal clear about what you want; otherwise you will rarely get it. Second, include several “throwaway” asks that you don’t expect to get. That way, you can concede them and fall back on what you really want. Role play the responses you’ll likely get to anticipate objections and counter-asks. Plan exactly when you will give up your extra asks so the other side feels like they are getting something from you. Fourth, don’t make demands; ask questions, which creates discussion and empathy. For example, instead of saying, “I can’t do that!” try, “How can I do that?” Finally, plan your questions, so you naturally lead them to your desired outcome and it becomes their idea.

You want the other person to name a price first, which will give you leverage. You must also understand the best outcome for you – which is not always the best price – and be willing to walk away if you can’t make that happen. For example, in one negotiation, I stood firm because I knew that they were ready to sell. But in a recent deal, I overpaid by 300% and was happy to do so.

Stipulate the time frame early in the negotiations so the process doesn’t drag on. Lengthy negotiations are a waste of time and often go around in circles. Short timelines and intense negotiations are likely to bring a more serious and straightforward approach from both parties. This also helps you identify halfhearted buyers or sellers so you can exit negotiations before wasting too much time and energy. I’ve closed dozens of mergers and acquisitions with this approach, often within 30 days.

Singapore to invest $2.7b in funds with green focus (Straits Times)

Singapore will invest US$2 billion (S$2.7 billion) in funds that have a strong green focus as part of its ambition to be a leading centre for green finance in Asia and the world. MAS will launch the Green Investments Programme, in which the central bank will invest with asset managers who are committed to deepening finance activities and capabilities in Singapore.

Ant Financial Eyeing Singapore’s Digital Bank Licences (Finews)

Looking for a comprehensive guide to investing? Check out the FH Complete Guide to Investing for Singapore investors.

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