Friday, December 31, 2010

Why you should apply for Excess Rights:Instant Jackpot Profits!

A lot of people are unfamiliar with Rights Issues for the company they invest in. This is because it is seldom discussed.

What is Rights Issue

Rights Issues is a method for the company to get additional funding for business.

The business is essentially make up of Assets = Debt + Equity.

There are 2 ways a listed company can seek large funding. One is by issuing more debts, the other is more equity.

Rights issue is to issue more equity.

A company will typically declare a 2 for 1 rights issue or another ratio meaning for how many existing shares you can apply for another number. In the case of recent First REITs rights issue, it is 5 shares for 4.

What is Excess Rights

Not all existing share holders can apply for rights issues.

  1. Foreigners typically have restrictions of not able to.
  2. Some existing share holders are not willing or do not have enough capital to do that.

You can apply for these excess rights

As long as you become share holders you can apply for these rights and excess rights.

Applying for rights provides no kicker. It is just to prevent dilution of your existing shares.

The kicker is the excess rights. It is basically like IPO jackpot. These rights is normally at a huge discount from current traded price.

In the case of first reit it is trading at eventual 70 cents but your cost of acquiring these rights is at 50 cents.

Take a look at this example here to understand why getting 2000 excess rights can mean a small win: First REIT Excess Rights Results: I got 2750 excess rights!

Sunday, December 19, 2010

Look to Emerging Markets for higher yield dividend investing

I talked a fair bit about investing in US Stocks, specifically Dividend Aristocrats, Champions and Achievers.

Now these are made up of really great dividend companies and highly stable ones, but to other investors a yield of 3% BEFORE withholding taxes cannot be called high yield investing.

If you would like to move out of a certain proximity bias and touched emerging market stocks, there are many value buys presenting 4%-10% dividend yield yet enables you to invest in a country stalwart with a wide economic moat.

Saturday, December 04, 2010

test post


Don’t be scare by insurance agents scare tactics

One of the tricks that insurance agents will do to make you tilt to the point that you need to buy that policy from them is to relate a story to you:
Insurance agents tell the consumers that the cost of a liver transplant is $100,000 and that it would be covered under a private shield plan.
Conman & conwoman like to tell the story of Andrea De Cruz's $250K liver transplant in Raffles Hospital. They have a thick folder of such newspaper stories to frighten the ignorant to do their bidding i.e. buy expensive private shield plans with all the riders, and buy expensive wholelife to "cover the critical illness".
Please filter this carefully. Remember that insurance is a bet against the unforseen and you are paying for it. Always research up what is the probability of such a risk happening.
In the end the cost of paying for that probability is your insurance cost. You want to pay for something that probability should be pretty high.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It  contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly  here.

Should Starhub,M1 and Singtel fear apps like Whatsapp, Pingchat, Skype and Viber

Today we saw the news of this new VOIP service called Viber going viral. Viber is a voip application like Whatsapp on the iPhone that provides good quality voice and the ease of finding your friends who have viber as well without additional means.

All in all it was great, as is Skype. It makes you wonder why you would want to pay for voice plans for 20 dollars. have a great coverage and more thoughts @ iPhone App Viber will killl telcos sooner rather than later.

Do you think VOIP is in the near future?

Wednesday, December 01, 2010

Envelope Budgeting with Quicken

After tracking my budget from 2003 to 2010, i think i sort of figure out that envelope budgeting is the best way to control and plan my spending. have a really detail explanation of what is envelope budgeting and a lifecycle of how you can go about implementing it with Quicken.

I do recommend using Quicken to track your budget as it has many value added features over Excel.

[How to budget with envelope budgeting to save money easily]