The China Hustle

I just watched a documentary on Netflix called The China Hustle, it is about how small companies in China list themselves onto the stock market (NYSE) using a tactic called 'reverse merger'.

The show is about how companies with essentially nothing or small business in China was able to list onto the NYSE with documents that show them as huge companies.

They do this by having to merge with companies that are listed in NYSE but are no longer in business where most of these companies are located in Nevada.


I find this show very infomative and disturbing because throughout the show, they mention of big company names that help get these China companies listed as they go through audits and law firms help them as well but no one raised any questions when things were suspicious.

By listing the China companies in NYSE, retail investors like you and me can buy them and by doing so, we are essentially buying a business that has no value in China and not as advertised by the investment company that they are the biggest agricultural company in China.

In reality, the business in China for these listed China companies are close to nothing as researched by Muddy waters, a company that suspected what was happening.

So as retail investors and funds buy into these stocks, which are actually worth nothing, the CEOs of the China companies profited and when it was finally revealed that the companies were a hoax, the prices nosedived or even delisted.

As the stocks were rated well by the various companies, funds were able to buy into them and they had a promising outlook as they were marketed as huge companies. 

What was really upsetting were the numbers provided at the end of the documentary, public pensions and retirement funds lost about an estimated $14, 000, 000, 000 to the Chinese reverse merger funds.

There were a few other individuals who lost huge amounts with one old man wanting to grow his retirement fund and he bought shares priced at $9 each and he recouped them at $0.12 per share. He bought $26, 000 shares. Another had about half of his assets in and mostly became delisted and not tradable.


Its scary when you think about it, the companies that benefited from this whole thing and only one China company CEO went to jail, the rest were free and they all earned a huge amount of money by being listed.

After watching this, it just shows how vulnerable we are as retail investors, we need to make sure that our money is being put into places that are safe or at least true and real. But what if the regulators and companies rating gives a false impression, then it will be much more difficult to decipher what is real and what is not.

So do catch it on Netflix if you have the time during this CNY long weekend, take care as the first case of the Coronavirus has been detected in Singapore. 

December 2019 Portfolio Review - Dividends for the year = >$500!

Last month of the year and also the month when spending will increase due to the amount of gifts that needs to be prepared and the constant devil that tells you to reward yourself after a tough year. HAHA

My expenses did increase in Dec and because I will be going to Taiwan soon in Jan 2020 so air tickets and accommodations have to be paid in advance.


In Dec, I did my first purchase through FSMone ETF RSP by buying 61 units of SPDR STI ETF at a price of $3.248

I switched over to FSMone as there are more options and commission is also affordable.

Read more: Switching from POSB Invest Saver to FSMone ETF RSP

Dividends:

December was quite a nice month, with dividends from Far East Hospitality, First REIT and Tai Sin Electric. The payout was $19, $22 and $35 respectively.

As I have a RSP for the index portfolio with FSMone which I will re-balance every one year, I am going to be buying more REITs and stocks that can raise up my dividend rate.


For 2019, my total dividends came up to be $502.62 which is nearly double the amount I received in 2018. I hope to increase my dividend rate as it really can act as a cushion and I can also decide whether to re-invest it once it becomes substantial.

I know the dividend amount is really small compared to other financial bloggers but I am glad that I have started and can see the change and increase of it year on year. 

Portfolio:

DBS Multiplier changes and what might be my next action

On the 1st day of 2020, I came across this article written by Kyith about changes to the bonus interest for DBS Multiplier. After which I received an email from DBS on the changes.

 

 I was a little disappointed when I saw the new changes that will start on 1 Feb 2020 because the bonus interest that I get will be affected.

Investments like dividends and SSBs interest which comes from CDP will no longer be categorized in the investment category but instead it will be together with salary crediting under the income category.

This will affect the interest I can earn as I will only fulfill the income and credit card spend category. 


In a way, I do understand that the interest rates that banks offer are ever changing and even more so when the outlook is not too good.

Also, the bonus interest will only be on balances up to $25 000. 

In the meantime, I will still leave a portion of my money in DBS multiplier as it will still offer a better rate than a normal savings account but might transfer a portion out to the Standard Chartered Jumpstart Account which will give me a 2% per annum.

Plans for 2020, work/portfolio/money/family/exercise

We are into 2020 and I believe that many would have set goals for 2020. For me, I don’t usually set goals cos I am lazy but this coming new year, I think I will want to set some goals to achieve them.

In saying goals, this article is really just a rough outline for each category. I will go more in depth when I have the time, especially for my financial goals. 

Since I will be turning 25 years old in 2020, breaking 25 means more responsibilities and also having to think about what I really want in life.


Work:

For work, as always I sound tired of repeating myself but I like to find permanent job to have more job security. But I haven't been getting replies for the job applications.

For my current contract job, it has been extended by one more year till the end of Dec 2020 but I believe with the outlook on 2020, it’s really a huge question mark whether there would be any chances of turning permanent.

There will be a small increment for my pay so at least for 2020, I do have a job and can continue to be on the look out for jobs.

Portfolio:

For my portfolio in 2020, I have decided to go with passive and index investing. I will allocate a portion of my income per month to invest into SPDR STI ETF (ES3.SI) and Vanguard Total World Stock ETF (VT.NYSE) before adding ABF Singapore Bonds into the monthly purchase.

Read more: Switching from POSB Invest Saver to FSMone ETF RSP

I will be using FSMone’s ETF RSP to purchase both of them on a monthly basis. With that, I can free up my time. I actually came across the Bogleheads Three Fund investment and it really was interesting. You can read more abot it with an article from betterspider


Read more: Bogleheads philosophy: keep your investment portfolio simple

Money:

I have build up my emergency fund through this one year of work (2019) and I feel a little more secure knowing that I do have some cash to fall back on. With the emergency fund built up, I can also more aggressively pump more money into my investments.

Family:

My brother will be coming in June for his 3 months internship with his company after which we are planning a trip to Hiroshima for some family time. In 2020, I also hope to continue to spend more time with my mum as always.

Also, to be more understanding to my mum and to help do some housework. 

Exercise:

I have been wanting to start exercising when I started work because I am just sitting the whole day and I can feel that without much exercise, it will be really easy to gain weight even if I were to watch my diet.

I want to add some simple exercises and maybe one or 2 runs per week. 

Overall, I have been listing out quite a few things for 2020, some which will start like my RSP while some will require my action like to exercise. I hope to at least make sure I fulfill some goals in 2020! HAPPY NEW YEAR!