ISAAC CHIN: $5M In REITS, $2M In Properties....And More

Isaac Chin is 1 of the most successfully investors in Singapore...
Below is a copy of the interview Nextinsight has with him.

For the past decade, Isaac Chin has been a full-time investor after a career as a chartered accountant. “I didn't have an inspiring career as an accountant. Nothing great came out of it. If I have to work hard for a salary and put up with a lot of stress, I might as well work for myself - and earn more,” he said.Now aged 62, he has reaped handsome profits from investing in property, equities and bonds. Here he shares his views with NextInsight on the investment landscape and what he is betting on - plus how he spends his money. If you have investing questions to ask Isaac, post them in our forum here.

Among his investments, Isaac Chin has $5 m invested in REITs and collects about $300,000 in dividends a year. Photo by Leong Chan Teik

Q: How did your investments perform in 2010? What has been great and what has been bad, if any?

Isaac: My investment tracked the relatively lacklustre STI performance (up 10.9%) in 2010. My investment returns from equity and bonds paled in comparison to my gains in 2009 which was the best year ever for me. 

Selling my SGS bonds (totaling $1.5M) in Oct 2010 @ 106.85 cents (bought in 29 June 2010 @ 100.75 cents)  was one of my great investment decisions in 2010.

I purchased $500,000 worth of DBS preference shares in October with a dividend yield of 4.7% (10 year SGS Note yield had then dropped to 1.9%). By Dec 2010, I had invested about $5M in A-Reit, CapitaMall Trust, and Suntec REIT. 

Q: Care to give a figure for your 2009 investment return? 

Isaac: I made about $2 million from equity and bonds in 2009. I was lucky to take a big gamble when the STI plunged to 1457 in Mar 09, 2009. 

I remember at that time an investor friend advised me to wait a little longer as he believed STI could hit 1260. My own conviction was that STI had fallen from 3900 in just one year and buying at 1500 level cannot be too far wrong. My defence mechanism was that if STI did fall further to 1,000 say, many people with much higher entry points would get more seriouly hurt than me.  

Moreover, I was paying only 2% interest on my mortgage loan against a 12% dividend return from CMT, Suntec, CapitaCommercial Trust and A-REIT at that time.There was a lot of fear in the market,.so mathematically and psychologically I could not be wrong. 

Isaac has a zest for life - and holidays. He takes good care of his health through jogging and swimming.

Q: What led you to make those REIT purchases?

Isaac: The interest rate is very low, as you know. Bank deposits are paid interest at less than 0.5%p.a. Currently the SGS 10 year bond pays about 2.7% p.a.

The yield spread between S-Reits and SGS Bond will remain attractive at least for the next 6 months.

I have chosen to invest in those 3 Reits because of their large market capitalisation and asset class quality. Moreover I can receive a constant stream of dividend Income of about 6% per annum.

Q: What have you been busy with in the stock market in January?

Isaac: Not just in January but since Mar 2009, at the bottom of the global crisis, I have spent lots of time figuring out the performance of the stock market. My view is that there should be a mini bull run from here with, say, a 15% upside. 

Thereafter, I may switch some funds back to SGS Bonds (whose yield could have risen to 3.5% by then).

The STI was roaring ahead in the 1st week of 2011. It closed at 3279 on Jan 6 but finally dropped to 3179 on Jan 31. I am convinced that it will break out of this tight range and move up to 3500 level in the next 6 months based on fundamentals and technicals.

Q: Currently, aside from REITs, what are your other significant investments, if any?

Isaac: I have 2 freehold condos valued about $4.5M, and insurance policies with cover of over $1M. I pay $36,000 a year in premium for the policy with NTUC Income that provides my family cover against 30 diseases.

Q: Do u use leverage for investing in stocks and property?

Isaac: Less than 50% leverage for the 2 properties and none for the stocks.

* One-off expenses

Q: What is the net yield on your investment property?

Isaac: The rental income after expenses is $45,000, so the net yield is $45,000 divided by $650,000 (capital employed or the cash I paid) = 6.92%

The property purchase price was $1.75M (inclusive of $50k stamp duty) while the loan was $1.1M for which I now pay 1% interest a year.

Current valuation of the property is about $2.15M.

Q: Aside from investing success, what can you say about success in other areas of your life?

Isaac: I have never aspired to be a wealthy person and do not consider myself wealthy at this moment. I think success in life is more than just having money management skills. It should include enjoying a healthy lifestyle, having positive attitudes, a proper mindset and correct relationship with family and friends. All these help to create a balanced personality. Basically I am happy, healthy, optimistic and confident.

Isaac and wife are headed again for a holiday in Europe soon.

Q: I understand that you place good health as a top priority. What do you do to achieve good health?

Isaac:  I do not smoke but drink a glass of red wine each day. Every morning I would exercise 20 mins on the treadmill, swim 20 mins, take yogurt, wheat germ, raw oats and milk for breakfast, and salmon, snow fish and pumpkin for dinner.

Only occasionally do I eatfried kway tiao and hawker food with friends. I think my life is quite regimented with 6-8 hours of daily work, 5 days per week. 

I read, watch comedies and documentaries on Discovery and National Geographic channels, listen to music and have regular lunches with old friends and school mates for relaxation, and holidays to Europe, Japan and China every 4 months to de-stress. I retire to bed early, before 10 pm and wake up by 5 am.

Q: You do enjoy travelling. Why so?

Isaac: Travelling is a form of education. I have visited the Versailles in Paris, the Vatican City in Rome. I have been to Venice, and to Mt.Titlus in Switzerland where I was awe-struck by what I have saw. I thought: the beautiful scenery and architecture must be the Creation of a Superior Being!

I normally cover only 2-3 countries in each trip lasting 15-20 days. Free and easy travel is what I best enjoy. Once in Japan we spent a long time watching the rainbow and sunset by a lake, without the time limit usually set by tour agents, and it was a wonderful experience.

At age 62 now, I can still remember the Chinatown in which I was born and grew up in the 50's and 60's. We lived in cubicles, with 35 people (mostly migrants from China) squeezed into a tiny flat of about 700 sq ft. Such memories of hardship have made me easily contented today.

Additional NOTEs

-> 4-7 years typically for a property cycle.

-> Longer the investment horizon, greater chance of making profit.

What makes a good investment

a) 2nd  property

b) commercial / industrial / residential

c) Rental

d) Rental yield should be greater than 3% (after excluding property tax,  
    maintenance fee,etc)

Simplified Rental yield calculation  =      monthly rent x12

                                                                       Purchase Price

if it gives > 5%, it is consider 'safe'

if it gives >10%, mai tu leow....!

(takes about 20 - 25 yrs to cover your capital)

Isaac Chin: $5Million in Reits, $2 Million in Properties... and More

The Big Fat Greek Gravy Train: A special investigation into the EU-funded culture of greed, tax evasion and scandalous waste

I was shocked when I read this article...!!!


By ANDREW MALONE
Created 11:42 PM on 24th June 2011

China Frets: Innovators Stymied Here

An article on The Wall Street Journal by Li Yuan.
Let hope more countries are abled to 'breed' such talent and creativity of Steve Jobs (I'm still short changing Steve by saying using these words).

Millions of Chinese flooded the popular micro blogging site Sina Weibo to tweet their condolences on the death of Steve Jobs over the past two days. They also raised the question: Why isn't there a Steve Jobs in China?

The tone of the resulting discussion was almost unanimously pessimistic. As is always the case on the Chinese Internet, the discussion quickly moved to talk about the problems in China's political, economic and legal systems. Wang Wei, chairman of the Chinese Museum of Finance, tweeted, "In a society with an authoritarian political system, monopolistic business environment, backward-looking culture and prevalent technology theft, talking about a master of innovation? Not a chance! Don't even think about it."

China may be the manufacturer of the world, but many are frustrated that Chinese companies are better at knocking off others' original work than coming up with innovative ideas. The commemoration of Mr. Jobs' genius highlighted the dilemma.

Chinese companies themselves will perform as well as Apple Inc., but their products won't match up, Kai-Fu Lee told his eight million followers on Weibo. "Chinese companies can be expected to have the market valuation and business model like Apple's within a decade, but it will be difficult to expect any type of Apple-like innovation," he tweeted.

The former head of Google China and founder of a start-up incubator Innovation Works said by phone that Chinese schools focus too much on memorization and don't encourage critical thinking. "It's not that Chinese are not smart or don't have the potential. Look at Jerry Yang of Yahoo Inc. and Steve Chen of YouTube," he said, referring to the two Internet entrepreneurs who were both born in Taiwan and migrated to the U.S. at young ages.

Chen Zhiwu, a finance professor at Yale University, tweeted that in Chinese schools, "The first thing the teachers do is to rub down the edges of those students who are different from the crowd."

One of the most popular postings on Mr. Jobs' legacy came from scholar Wu Jiaxiang. "If Apple is a fruit on a tree, its branches are the freedom to think and create, and its root is constitutional democracy," he wrote. "An authoritarian nation may be able to build huge projects collectively but will never be able to produce science and technology giants." On that, Wang Ran, founder of a boutique investment bank China eCapital Corp., added, "And its trunk is a society whose legal system acknowledges the value of intellectual property."

—Li Yuan

A Look Back at the Life of Steve Jobs

This is a link from MarketWatch which describe the life of Steve Job

12 lessons for us all from the life of Steve Jobs

This article from Brett nicely summarized keys points for us to learn from Steve Jobs (Steven Paul Jobs)

The death of the Apple co-founder has dominated the news from Cupertino, Calif., to Kuala Lumpur. Many are focusing on the way his products and services changed our world. Others are talking about Jobs, the man.

But this was the most successful business leader of his era, and one of the greats. Few have achieved so much, so quickly, and so publicly. It got me thinking: What are the lessons we can all take away? What do his extraordinary achievements tell the rest of us?

Here are 12 lessons from the life of Jobs:

1. Yes, you can make a difference
Anyone trying to achieve real change — in life, in a company or in any organization — probably feels the urge to give up half a dozen times a day. The naysayers and seat polishers will do everything to slow you down. No one is suggesting that what Apple achieved was the result of Jobs alone, but his career is proof of just how much one individual can change things.

2. You need a vision               

It’s not enough to conduct opinion polls and customer surveys, and rely on consultants’ projections. Those are all based on the conventional wisdom and the world as it is today. Jobs imagined things — most obviously the iPod, and the iTunes services — that didn’t yet exist and for which the market was uncertain. While his competitors were still building the products of yesterday, he was imagining, and building, those of tomorrow.

3. It’s not about you
It’s horrifying how many business decisions are still made on the assumption that “well, we have to do something with the XYZ division, so let’s give them this project” or “Buggins has seniority, so he’s in charge.” Do you think the customer cares about Buggins or XYZ? Jobs built Apple into a streamlined operation, focused on the output, nothing else.

4. Focus, focus, focus
Hard to believe, but mediocre managers everywhere like to keep their staff “busy” because they think that’s “productive.” It isn’t. (Ask them what their top priority is, and they’ll name two things. Or four. Or 16.) Apple sure was “busy, busy, busy” when Jobs arrived. And it was going bust. One of the first things he did was ax about 90% of the company’s activities and focus — first on the iMac, then on the iPod.

5. ‘OK’ is not OK
Look at the way Apple’s competitors keep putting out mediocre or unfinished products and thinking they’ll get away with it. Are they for real? The days when you could get by with second best are so over. Jobs was famous for a fanatical perfectionism. It was a core element of Apple’s success.

6. It’s not about the money

Steve Jobs’s life was a thumping rebuttal to all those who are obsessed with cash. The guy had billions: far more than he could ever spend, even if he had lived to 100. Yet he kept working, and striving to achieve greater things. Money? Bah. Something to think about the next time a CEO demands another $20 million a year as an incentive to show up.

7. It ain’t over till it’s over
Fifteen years ago Steve Jobs appeared to be a has-been in Silicon Valley. And Apple was circling the drain: plagued with losses, executive turnover, reorganizations, desperate asset sales and research cuts. Apple’s stock hit a low of $3.23 in 1996, and hardly anyone wanted it even at that price.

8. Give people what they really want
Sounds obvious, right? But most companies don’t do it. They simply produce what they’ve always produced, or what’s comfortable, or what Buggins thinks people want. For years the computer industry churned out ugly, clunky beige products with complicated operating systems. They all did it, and they all assumed that’s what people wanted. Turns out it wasn’t at all.

9. Destroy your own products — before someone else does

Jobs made sure that Apple kept innovating, and rendering its own products obsolete. Creative destruction came from within! That’s why Apple is a $354 billion company, and, say, Palm has vanished from Earth, even though a 2004 iPod is just as out of date as a 2004 Treo. How rare is this? Jobs knew full well that his $500 iPad threatens to cannibalize sales of $1,000 laptops. But he moved forward nonetheless. Most companies wouldn’t.

10. We are all spin doctors now
Critics point out that a lot of what Jobs achieved at Apple was put down to hype and hustle. But that was the point. And Jobs was a master at it — the product teasers, the showmanship on stage, even the black turtlenecks. Truth be told, we live in a superficial age of infinite media. We are all in the spin business. Deal with it.

11. Most people don’t know what they’re doing
It takes nothing away from Steve Jobs to point out that he couldn’t have done it without his competitors. Microsoft, Palm, Nokia, Dell, H-P — the list goes on. They missed opportunities, stayed complacent, failed to innovate and generally mishandled the ways their industries changed. It’s normal to assume that the people around us — and in power — know what they are doing. As Jobs proved, they often don’t.

12. Your time is precious — don’t waste it
Steve Jobs was just 56 when he died — a comparatively young man — and yet during his short spell on Earth he revolutionized the way we live, several times over. What are we doing with our time? It is the resource we waste the most — and it’s the one we cannot buy. Make the most of your short spell on this planet. Make each day and hour count.


Brett Arends is a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.

Photo from Apple website - Steve Jobs (Steven Paul Jobs) 1955 - 2011

Market undergoing huge change

MARK HULBERT Sept. 30, 2011, 12:03 a.m. EDT
Commentary: Market’s dividend yield now higher than T-Note’s
Believe it or not, the stock and bond markets are behaving in a way that, with only one exception at the depths of the 2008-2009 credit crisis, they have not since 1958—53 years ago: The stock market’s dividend yield is now above the interest rate on the 10-year Treasury note.

For example, the dividend yield on the Dow Jones Industrial Average is 2.8%, and on the S&P 500 index,  it is 2.2%. The 10-year T-Note yield, in contrast, is just 2.0%. This might not initially strike you as that big of a deal, but it is. Most investors who are active today cut their eye teeth during the go-go years of the 1980s and 1990s, when dividends were considered to be little more than an afterthought. Price appreciation was the name of the game. In fact, many of the most widely-held stocks paid no dividends at all. 


But what we’re seeing today could very well be heralding the return of the pre-1958 era in which the market’s dividend yield was consistently higher than that of 10-year Treasuries. In that long-ago era, the bulk of stocks’ total returns came from dividends. Price appreciation contributed relatively little to that total return, if anything at all.


What might account for such a shift to the previous pattern? The best analysis I have seen was published over a decade ago, in the March/April 2000 issue of the Financial Analysts Journal. It was written by Cliff Asness, who is managing and founding principal at AQR Capital Management.


Upon carefully analyzing the yield histories since 1927 for both the stock market and U.S. Treasuries, Asness concluded that the key factor in understanding them was investor expectations of the markets’ relative volatilities.


Prior to 1958, according to Asness, investors expected the stock market’s volatility to be much greater than bond market volatility. To entice investors to incur that greater volatility, the stock market had to provide a higher yield than bonds.


Then those expectations began to change, according to Asness, and with it investors needed a smaller dividend yield to entice them to hold equities. And that is why the stock market’s yield dropped below that of bonds, and stayed there for decades.


Asness’ theory also helps to explain recent developments. The stock market’s extraordinary volatility has so traumatized investors that they now need a much higher dividend yield to make holding equities an attractive proposition.


Will the current situation persist? According to Asness, it depends in no small part on investor expectations of relative volatilities, which is impossible to predict.


But Asness points out that investors’ memories live for a very long time. The memory of the Great Depression lingered for years after it ended, for example, which is one reason why stocks’ dividend yields remained so high for so long.


The bottom line? If investor memories of recent market volatility persist, then prepare yourself for an extended period in which dividends become one of the central preoccupations of the investment community.


Click here to learn more about the Hulbert Financial Digest. 

1984 : Steve Jobs Introduces The Mac

National Debt: CNBC Explains

An article from CNBC. Very explicit....

National Debt: CNBC Explains
Posted By: Mark Koba | Senior Editor CNBC.com 

World Collapse Explained in Three Minutes

Tony Robbins Talking About The Coming Economic Collapse?

A interesting article from Michael Snyder....

Is Tony Robbins Right About The Coming Economic Collapse?By Michael Snyder on August 21, 2010

It seems like almost everyone is warning of a coming economic collapse these days. Do you remember Tony Robbins? He is probably the world’s best known “motivational speaker” and his infomercials dominated late night television during the 80s and 90s. He was always urging all of us to “unleash the power within” and to take charge of our lives. Well guess what? Now Tony Robbins is warning that an economic collapse is coming. In fact, he has issued a special video warning about what he believes is about to happen. Considering the incredible connections that he has at the highest levels of the financial world, it makes a lot of sense to consider what he is trying to warn us about. Robbins says that a “major retracement” is coming to financial markets and that the coming collapse is going to be a “painful process” as we go through it. Those familiar with Tony Robbins know that he always goes out of his way to stress the positive, so if even he is openly warning the public about a coming economic nightmare than you know that things are starting to get really, really bad out there.

Part 1:
The video that Tony Robbins published where he gives his economic warning is posted in two parts below. This is unlike any Tony Robbins video that you have ever seen before and it is absolutely jaw dropping….


So is Tony Robbins right about what is coming?

Yup. An economic collapse is coming.

You need to get prepared.

For those not familiar with my previous articles, let’s review just some of the reasons why America is headed towards an economic nightmare of unprecedented proportions….

The National Debt - The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. According to Democrat Erskine Bowles, one of the heads of Barack Obama’s national debt commission, if we continue on the path we are on the U.S. government will be spending $2 trillion just for interest on the national debt by 2020.
State And Local Debt - Many of America’s state and local governments may be in even worse financial shape than the federal government is. In fact, some state and local governments are in such a financial mess that they have starting cutting off even the most essential services.

Consumer Debt - The total amount of consumer debt that Americans have accumulated now stands at approximately 11.7 trillion dollars.

The Trade Deficit - The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars flows out of the country than flows into it. The rest of the world is literally bleeding us dry in slow motion.

No Jobs - Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.

The Credit Crunch - The U.S. is experiencing a credit crunch unlike anything it has seen since the Great Depression. Lending has really, really dried up, but without loans our economic system cannot function properly.

The Housing Crisis - Even with mortgage rates at historic lows, a shockingly low number of Americans are buying houses. There has been a total collapse in home sales since the home buyer tax credit expired. At the same time, mortgage defaults, foreclosures and home repossessions by banks continue to set new all-time records.
Rising Bankruptcies - Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30th.

Rising Poverty - One out of every eight Americans and one out of every four American children are now on food stamps. Approximately 50 million Americans couldn’t even afford to buy enough food to stay healthy at some point last year.

The Coming Pension Crisis - America is facing a pension crisis that is so nightmarish that it is almost impossible to adequately describe it. State and local government pension plans are woefully underfunded, dozens of large corporate pension plans either have collapsed or are on the verge of collapsing, Social Security is a complete and total financial disaster and about half of all Americans essentially have nothing saved up for retirement.

The Derivatives Bubble - Our financial system has become a gigantic gambling parlor and we have allowed a horrific derivatives bubble to develop that could destroy the entire world economy if it ever bursts. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars. Once that bubble pops there simply will not be enough money in the entire world to fix it.

The Federal Reserve - The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. There are many economists who would argue that the Federal Reserve is at the very core of our economic problems.

As we get even closer to the economic abyss that we are racing towards, even more big names such as Tony Robbins will come forward with warnings.

The truth is that these problems did not develop overnight, and they are not going to be solved overnight either.Perhaps our economic future is best summed up by this one statement that economist Paul Krugman recently made….“America is now on the unlit, unpaved road to nowhere.”

It would be great if I could write about America’s bright economic future and the unlimited prosperity that is ahead for all of us, but that would be a lie.

We are headed for an economic collapse.It is going to be painful.It is time to get prepared.

11 Unusual Ways Steve Jobs Made Apple The World's Most Admired Tech Company

The best entrepreneurs make their mark by thinking differently, coming up with a new way of doing something. This is the first installment in a four-part series called "The Mavericks," where we salute these players.

Just 13 years ago, Apple was on the verge of bankruptcy. Today, it is the world's most admired tech company.

Steve Jobs can be credited for the drastic turnaround.  But how did he do it?

By thinking differently, innovating, and being controversial.

Partner with the enemy

Can you imagine Pepsi and Coca-Cola getting together? Or Verizon and AT&T? That's how strange it was when Apple and Microsoft announced their partnership at the 1997 Macworld Expo.

After 12 years of financial loss, Jobs needed to get Apple money, and quickly. So he turned to Bill Gates, who made a $150 million investment in Apple.

"The era of competition between Apple and Microsoft is over as far as I'm concerned," Jobs announced.  "This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to prosper again.”

Put sex in products

A great salesman, Jobs knew the importance of aesthetics; he realized Apple's products looked dated.

In 1998, Jobs called a meeting at Apple, sat everyone down and said, "You know what's wrong with this company? The products SUCK -- there's no sex in them."

Today, Apple is credited for creating the most beautiful technology, from colorful iMacs to sleek iPads.

Change the original vision and business plan

Apple began as a computer-only company, but Jobs knew it needed to broaden its approach if it wanted to become truly successful.

Apple began expanding its products beyond just computers with the release of Final Cut Pro, followed by MP3 players, music, iPhones and iPads.

Jobs changed the company's name from Apple Computer, Inc. to Apple Inc. in 2007 to symbolize the new, broader vision.

Create solutions to impossible roadblocks

Other retailers were not giving Apple products adequate positioning.

Jobs' solution? The Apple Store. Scattered throughout the world, these successful outlets are now the "darlings of the retail computer industry."

Tell customers what they want instead of asking for feedback

Jobs does not use focus groups. Instead, he tells customers what they want before they know they want it.

"[Apple has] a great track record for making you want -- and buy -- things you thought you didn't need," says Carl Howe, director of consumer research for Yankee Group.

Last year when the iPad was announced, people gawked. Nearly 20 million sales later, it's not so funny. 

Connect dots

Apple releases products that are innovative in and of themselves, but they are also integrated visions.  iPods mesh beautifully with iTunes; iPads and iPhones collaborate with the app store. 

According to Jobs, "creativity is just connecting things."  Apple frequently shows how the sum is greater than all of the parts.

Don't hire cookie cutter employees

Ivy league graduates aren't the only people who can run companies. 

"Part of what made the Macintosh great was that the people working on it were musicians, and poets, and artists, and zoologists, and historians who also happened to be the best computer scientists in the world," Jobs has said.

Encourage others to think differently

Apples' "Think Different" ad campaign in the late 1990's was one of the most effective of all time.

It stimulated innovation and reinvention, which is what Apple, today, is all about

Don't elaborate

Simplicity is bliss.

Apple's designer Jonathan Ives confirms this strategy: "We are absolutely consumed by trying to develop a solution that is very simple, because as physical beings we understand clarity."

Sell dreams, not products

Jobs gets people hooked on a feeling. It's not the products his customers buy, it's what the products represent.

Remember, people first and foremost care about themselves, so make products they can relate to.

Trust your gut

Steve Jobs said in his Stanford commencement speech: "Have the courage to follow your heart and your intuition. They somehow already know what you truly want to become."