Advancing with Advanced Micro Devices

Apart from buying Intel last month, I also bought Advanced Micro Devices at $81.80 per share.  At that time, I looked into 6 different semiconductor stocks, and based on PE ranking, they were:

1. Intel (PE: 8.9)

2. Micron (PE: 21.99)

3. Taiwan Semiconductor (PE: 27.57)

4. Qualcomm (PE: 48.91)

5. Nvidia (PE: 93.53)

6. Advanced Micro Devices (AMD) (PE: 156.2)

INDUSTRY PE RATIO: 35.6

After a quick preliminary assessment, my attention was drawn to Intel, Taiwan Semiconductor, and AMD.  In the end, I bought Intel (https://mypecunia2020.home.blog/2020/08/27/buying-the-dip-intel-corporation/) and also AMD.  If I had the money, I would invest in all three, plus Nvidia. 

Introduction

Advanced Micro Devices, headquartered in Santa Clara, CA, is a global semiconductor company. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom.  AMD’s market cap is $96.91billion for 3 September (for comparison, Intel’s market cap is $214.31 billion).

The Computing and Graphics segment includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units, data centre and professional GPUs and development services. 

The Enterprise, Embedded and Semi-Custom segment includes server and embedded processors, semi-custom System-on-Chip products, development services and technology for game consoles.

Results and Ratios

In its most recent report (2nd quarter report), AMD reported the following:

1. Gross Revenue: UP 26% YoY.  $1.93 billion (2020) vs $1.53 billion (2019). The YoY increase in revenue was primarily driven by Ryzen and EPYC processor sales. 

2. Net Profit: UP 348% YoY.  $157million (2020) vs $35 million (2019).  However based on quarter to quarter result, 2nd quarter net income was down 3% from 1st quarter net income.

3. EPS Growth: UP 125% YoY.  $0.13 (2020) vs $0.03 (2019).

4. Cash Flow: Since AMD is basically a growth company, much of its cash flow as a whole is devoted to growing the company.  It has maintained positive cash flow balances for the past 5 years [$1.47 billion (FY2019), $1.08 billion (FY2018), $1.18 billion (FY2017), $1.26 billion (FY2016), $0.79 billion (FY2015)].  As at the end of the 2nd quarter, AMD’s cash and cash equivalents were $1.78 billion.  With a positive cash flow, AMD is set up to explore and invest in areas of growth and expansion.  AMD does not pay dividends.

5. ROE: 21.47% this quarter vs average ROE 15.37% (FY2019) and average ROE 29.32% (FY2018) [my criteria: above 15%].

6. ROA: 10.27% this quarter vs average ROA 5.18% (FY2019) and average ROA 5.95% (FY2018) [my criteria: above 5%].

7. Current Ratio (MRQ): 2.1 (my criteria: 2 and/or above).

8. Quick Ratio (MRQ): 1.56 (my criteria: 1 and/or above).

9. PB Value (MRQ): 29.32, so AMD is clearly overvalued.  The market definitely has the appetite for superior growth in tech stocks, AMD being one of them.  The world will have more, and not less of technology, both now and in the future.  So why not capitalise on this sector of multi-generations of growth by owning a semiconductor company?  All these new innovations in AI, autonomous driving and the like, require a chip to materialise.  AMD appears expensive now, but expensive can get more expensive.  I bought at $81.80. Anyway, I would be most comfortable buying more of AMD between $58.20 and $70.89.  

Why did I buy AMD?

1. A business with growing market share

On the day (July 23) that Intel, one of AMD’s competitors, announced that its next generation 7-nanometer manufacturing process was going to be delayed, and might have to rely on a third-party manufacturing experts and facility, AMD’s share price gained about 16% ($69.40 from $59.57). It was speculated that with this delay by Intel, AMD would capture 30% of the server market over the next 3 years and 50% over the next 5 years.

AMD’s share price rose higher on July 27, when it released its stellar 2nd quarter result (as reported above). AMD’s spectacular revenue growth for its 2nd quarter was fuelled by record notebook and server processor sales (Ryzen and EPYC processors revenue more than doubled from a year ago).  

Apart from the Ryzen and EPYC processors, made for desktops/notebooks and servers respectively, AMD also boasts of a few other products such as the Threadripper chips for high-end desktops and Radeon processors for graphics processing.  Based on its 2nd quarter performance, AMD now expects revenue for FY 2020 to grow by approximately 32 percent compared to 2019 driven by strength in its PC, gaming and data centre products. 

Who are AMD’s main customers?

Some users of EYPC processors: 

1. Google (Confidential Virtual Machines for Google Compute Engine)

2. Amazon Web Services

3. Oracle (Cloud Infrastructure Compute E3 platform)

4. IBM Cloud

5. Dell Technologies

6. Nvidia (DGX A100 system AI workloads)

Some users of Ryzen processors:

1. Lenovo (ThinkStation P620)

2. Hewlett Packard (Laptop & Notebook)

3. Apple (16-inch MacBook Pro)

My main reason to purchase AMD’s shares, in spite of its high valuation, was the many demand catalysts on the horizon for AMD.  The fundamentals supporting AMD will get even better in the near future … revenues will keep expanding, profits will keep charging higher, and AMD shares will keep rallying (I hope, of course).

2. Punching above its weight in spite of strong competition

AMD competes with Intel in the CPU space, and with Nvidia in the GPU arena.  AMD’s Ryzen chip offers a better value than Intel’s processors, although there are some other aspects where Intel’s chips come in stronger. AMD’s EYPC processors has made great gains against Intel in the server market.

In the GPU space, AMD’s Radeon processors are emerging as a strong challenger to Nvidia’s products.  In terms of speed, performance, efficiency, and the underlying technology, Nvidia is still in the lead as the GPU champion of the world.  However when it comes to price, especially in the mid-range market, AMD is a better value proposition.

In the technological race, AMD, firing on all cylinders, has been gaining grounds in recent years.  In terms of net income (MRQ), AMD is still not a match for Intel and/or Nvidia, especially when compared to Intel. 

Intel : 5.105 billion

Nvidia : 0.622 billion

AMD : 0.157 billion

However, AMD has tremendous potential to grow further for there is a lot of money to be made within the semiconductor industry.   That AMD has made some technological leads in some areas over both Intel and Nvidia is a fact that cannot be ignored.  As AMD is still a much smaller company (than both Intel and Nvidia), its growth is still in its initial stage … its growth story may have barely just begun.

Conclusion

While I think well of AMD, I have one concern though … and this concern applies to all semiconductor stocks.  I’m talking about the deteriorating US-China trade relations.  Semiconductor companies generate a significant portion of their revenue from selling their products to China.  Hence, the outlook for semiconductors is hugely dependent on a healthy US-China trade relationship.  

AMD does not break down its sales by country in its reports.  Goldman Sachs* estimated way back in 2018 that around 26% of AMD’s annual revenue comes from China (Intel: 40%, Nvidia: 56%).  Is AMD doing more or less sales with China than 2 years ago?  I don’t know as I don’t have the data to back it up.  No matter what, any imposition of tariffs or restrictions on sales will hurt a tech company such as AMD that derives part of its revenue from China, the awakened giant of Asia.

For now, in spite of the U.S.-China Tech Cold War, I am inclined to think that AMD’s strength is likely to continue and its stock, although overvalued, is well-positioned within a broader uptrend. 

* https://www.cnbc.com/2018/03/14/avoid-these-20-china-exposed-stocks–including-apple–if-trump-sparks-trade-war.html

Buying the Dip: Intel Corporation

Is it possible to find a device that does not rely on semiconductors? Almost impossible. Semiconductors, in the form of microprocessors, memory chips, integrated circuits, is the bedrock of technology. Without semiconductors, there will be no 5G, IoT, AI and self-driving cars. Semiconductors make technology possible.

Since March, the semiconductor industry has largely recovered. A quick look at the SOXX, the iShares PHLX Semiconductor ETF, reveals the truth. The semiconductor industry has emerged from the pandemic stronger than before!

From ETF.com

So was it the wrong time for me to invest in the semiconductor industry right about this time? Is the global semiconductor market still in the beginning stages of a huge rebound or is the party already over? Will the rally persist?

Many questions but no easy answers.

There is strong demand for semiconductor products from the cloud industry, and the gaming and 5G markets, just to name a few. My opinion, call it my bull thesis, is that the fundamentals underlying the semiconductor market will continue to improve dramatically over the next couple of months and well into the next year.

I shortlisted 6 semiconductor stocks to look into (ranked by PE ratio):

1. Intel (PE: 8.9)

2. Micron (PE: 21.99)

3. Taiwan Semiconductor (PE: 27.57)

4. Qualcomm (PE: 48.91)

5. Nvidia (PE: 93.53)

6. Advanced Micro Devices (AMD) (PE: 156.2)

INDUSTRY PE RATIO: 35.6

Based on PE ratio, the amount that investors are willing to pay per dollar of earnings per share, Intel is the cheapest while Advanced Micro Devices (AMD) is the most expensive. Based on further research, I’ve taken action on Intel as a value play and AMD as a growth play.

Introduction: Intel Inside

Back when I was still a student in the 90s, I learnt that a good computer or laptop is one that has Intel inside. Intel chip was a valuable feature that one should look for when purchasing a computer.

Intel Corp is one of the world’s largest chipmakers. It designs, manufactures and sells microprocessors and other related products for the global personal computer and data centre markets. Intel’s major products include microprocessors, chipsets, embedded processors and micro-controllers, flash memory, graphic, network and communication, systems management software, conferencing, and digital imaging products.

With its business in the personal computer market having declined, Intel has expanded into other areas such as IoT, memory, artificial intelligence, and automotive. Intel has been active on the merger and acquisitions front, recently acquiring Altera, Mobileye, Nervana, Movidius, and Habana Labs in order to assist its efforts in non-PC spheres.

Results and Ratios

As at the end of June 2020 (2nd quarter report), Intel reported the following:

1. Gross Revenue for this 2nd quarter of the year INCREASED 20% YoY from $16.5 billion to $19.7 billion. Gross revenue from data-centric business increased 34% YoY while gross revenue from PC-centric business rose 7% YoY.

2. Net Profit GREW 22% YoY to $5.1 billion from $4.1 billion.

3. EPS Growth has been on an upward trend since mid-2015.  EPS this quarter was $1.19, UP 29% YoY.

4. Free Cash Flow GREW 37.66% YoY from $7.7 billion to $10.6 billion. Cash from operations generated in the first half year of 2020 was $17.3 billion. Free Cash Flow Growth over the past 5 years:

2015: $11.69 billion

2016: $12.18 billion

2017: $10.33 billion

2018: $14.25 billion

2019: $16.93 billion

From: Intel Annual Report 2019

5. Dividend Payout Ratio over the past few quarters have been consistently low, with the payout this quarter at 23.49%. Intel’s dividend payments have always been well covered by earnings.

6. ROE the 2nd quarter was 30.52%, an improvement from 26.81 a year ago. Intel’s average ROE is 23.78% (my criteria: above 15%).

7. ROA the 2nd quarter was 16.59%, an improvement from 15.29% a year ago. Intel’s average ROA for the past 3 years is 13.35% (my criteria: above 5%).

8. Current Ratio FY 2019: 1.98 (barely meeting my criteria of more than 2).

9. Quick Ratio FY 2019: 0.93 (barely meeting my criteria of more than 1)

10. Fair Value: Estimated to be between $63.53-76.45.  Thus, I was comfortable buying Intel at $49.12.

12. Dividend Yield: 2.67%. Intel’s average dividend yield for the past 4 years was 2.58%.

Why did I buy Intel?

  1. Growth Potential

As I’m generally satisfied with the health of its balance sheet and its potential in generating sales and revenue, I focused more on Intel’s growth and transformation from an outmoded PC business to a far more relevant and diversified business that develops products for IoTs, data centres, 5G, and memory and storage. I like it that Intel, in keeping with the times and adapting to industry changes, is focusing on its transformation from a PC-centric company to a diversified data-centric one.

From: Intel Annual Report 2019

Data Centre Group:

  • 3 main market segments in cloud service providers, enterprise and government, and communications service providers.
  • Comparing results from FY 2019 to results from FY2018, revenue from cloud service providers was up 13%, from enterprise and government was down 14%, and from communications service providers was up 6%.
  • Segment operating income dropped 11% from $11.5 (2018) to $10.2 (2019). Average operating income over 5-year period: $8.78 billion.
  • It is interesting to note that Intel owns over 95% of the data centre CPU market.
  • Main competitors in this segment: AMD & Nvidia.

Internet of Things and Mobileye:

  • Internet of Things-based solutions represent one of the fastest growing segments within the semiconductor industry, and Intel has positioned itself to take advantage of this growth sector.
  • Intel has a portfolio of “IoT Market Ready Solutions” (IMRS) that supports 5,000 new end-to-end deployments in more than 100 countries.
  • IoT operating income increased $117 million. Since 2015, the IoT segment has had an average revenue growth of 14% and operating income growth of 22% per year.
  • Mobileye provides driving assistance and automation solutions.
  • Mobileye’s product portfolio employs a broad set of technologies, covering computer vision and machine learning-based sensing, data analysis, localisation, mapping, and driving policy technology for ADAS and autonomous driving.
  • Mobileye operating income increased $102 million, compared to a year ago.
  • No specific competitor in this segment although any companies that use the ARM architecture or provide traditional wireless solutions such as cellular, WiFi and Bluetooth could be threats.

Non-Volatile Memory Solutions Group:

  • Provides next-generation memory and storage products based on Intel’s breakthrough Optane technology and 3D NAND technology.
  • While overall revenue increased in 2019 YoY, the segment had an operating loss of $1.2 million, down from an operating loss of $5 million in 2018.
  • No specific competitor but expect competition from other providers of NAND flash memory products.

Programmable Solutions Group:

  • Offers programmable semiconductors for a broad range of market segments such as communications, data centre, industrial and military.
  • Operating income dropped $148 million from $466 million (FY2018).
  • No specific competitor.

Client Computing Group (PC-centric business):

  • This PC-centric business is still the largest unit of Intel.
  • In 2019, Intel introduced the 10th Gen Intel Core processor-based systems built on 10nm process technology.
  • Operating income improved 6.7% from $14.22 billion (2018) to $15.2 billion (2019)
  • Main competitors in this segment: AMD and Qualcomm.

Not all segments of Intel’s business were profitable in the last financial year; only Intel’s Data Centre Group, IoT and Mobileye, and PC-centric business turned a profit. As a company trying to reinvent itself by launching into markets that are growing such as data centre processors and flash memory, and developing cutting-edge products, it’s normal for Intel to meet some roadblocks in meeting its growth and revenue objectives.

For example, Intel released its flagship Core i9-10900K processor in May this year.* While this processor might be the world’s fastest gaming processor, the market, as yet, has not adopted this new technology. What might be a roadblock to this world’s fasting gaming processor being adopted by the market? It remains to be seen how Intel’s new innovations such as the Core i9-10900k processor would help Intel maintain its market share and grow its profit.

During the past decade, Intel has made several operational missteps such as not capitalising on mobile computing, making unprofitable mergers and acquisitions such as the acquisition of Mcafee and fitness watchmaker Basis, and delaying the introduction of its 10nm processors, just to name a few. While Intel’s recent past has been marked by quite a few arresting operational and investment-related blunders, Intel has nevertheless managed to successfully diversified its business from a mature computer-centric business.

Even so, the semiconductor industry is a very competitive one, and several of Intel’s competitors such as AMD and Taiwan Semiconductor have already stolen quite a few of Intel’s lunches.

Notwithstanding these competitive and manufacturing headwinds and the many missteps that Intel had taken over the years in the past decade, I see Intel as having the innovative clout to take advantage of opportunities in the data centre/cloud computing, IoT, and gaming space to provide an attractive growth trajectory for the company in the foreseeable future. Intel’s products are highly complex and Intel does possess some outstanding resources for research and development. However, Intel can still fall behind its competitors in terms of technology innovation, acquisition and transfer, and find itself in a position where market forces move against it.

For now I’m recognising Intel for what it is, a chip juggernaut that has the potential to either maintain or grow beyond its “Goliathic” bulk. Intel still occupies the top spot in the global semiconductor market, owning 16.2% of the global semiconductor market share. I’m placing my bets on the potential long-term upside of Intel.

2. Value Play

On July 23, Intel released a statement that caused investors to head for the exits the next day. While lauding the company’s strong 2nd quarter result, the CEO also announced the delay of its next-generation chips. Intel’s 7-nanometer chip product would be delayed by 6 months (plan was to launch this product in 2021) and is not slated to be shipped until late 2022 or early 2023. This delay of up to 3 years is considered an eternity in the fast evolving world of semiconductors. This news, coupled with a hint of a possible outsourcing of the making of its 7-nanometer chips, caused Intel’s share price to plummet about 16% the next day, falling from $60.40 to as low as $50.59. Since that day, Intel’s share price has not gone above the 50 dollar mark (I invested in Intel at the price of $49.12).

This incident has doom written all over Intel. Is Intel now a hopeless case?

The news of the delay in launching the 7nm chips was no doubt devastating but I wondered if this delayed rollout alone could paint an all doom and gloom future for Intel’s overall business. In running a business, what more a global conglomerate, there are bound to be hits and misses. If it is not a design issue, it is a technology problem or a manufacturing hiccup, and so on and so forth. In the case of Intel’s delayed rollout of its 7nm chips, it was a manufacturing snag which could be solved by using another company’s foundry (possibly Taiwan Semiconductor).

This is just one more misstep in Intel’s long history of existence in the semiconductor industry. Will this misstep hurt Intel’s sales in the short term? Definitely. However one has got to look at this disappointing episode against the larger picture of Intel’s entire business operation. By the way, the competition among semiconductor companies is not just about chip size but also other variables such as power density, energy efficiency, and software support.

Intel’s revenue stream now has exposure to the data centre market, IoT and autonomous driving markets etc, which are all long-term growth areas of the semiconductor market that I find particularly attractive. There is still room and space within the industry for Intel to write several growth stories. Intel is well positioned for the future.

Intel is now trading at a low PE of between 8 and 9, substantially lower than its 10-year average of around 12.5. At the current PE range, Intel looks rather inexpensive relative to its rivals. Intel seems to concur by resuming its share buyback scheme which has been put aside since the start of the pandemic. On August 19, Intel filed a Form 8K: “Intel believes that its common stock is at the time of this announcement trading well below intrinsic valuation, and that these repurchases are prudent at this time, given the strength of the company’s balance sheet.” This accelerated share buyback plan is a strong vote of confidence in Intel shares.

Intel is a sound company by any measure although its share price now may not reflect this reality. However, I’m willing to bet on its price recovery, seeing that the share price appears to have found support in the $48-49 range. How long do I have to wait for price recovery I don’t know, but I’m playing the long game any way and find collecting dividends in the meanwhile to be remarkably satisfying.

p.s. There are many people out there who are pessimistic about Intel’s future**, just as there are many die-hard fans of Intel as well***. Perspectives from this 2 camps permeate online discussions and commentaries in almost equal proportions.

* https://www.pcgamer.com/intel-had-to-go-power-crazy-to-create-the-worlds-fastest-gaming-processor/

** https://investorplace.com/2020/08/intel-stock-is-a-trap-for-contrarian-investors/

*** https://www.forbes.com/sites/greatspeculations/2020/08/18/put-your-chips-on-the-table-with-intel-corporation/#516cdd303595

Disclaimer: I am only an amateur investor and nothing you read here on my blog constitutes financial advice.  I write here to detail my investments, strategies, and analyses.  Feel free to read but take action based on what I write here at your own risk.  Should you need financial advice, consult a licensed financial advisor.

Reaching $150k in 20 months since Day 1

The last time I hit the milestone of injecting $100,000 into the stock market was sometime in March.

Fast forward 5 months, my capital invested has exceeded $150,000 in August:

All together, I am still sitting on a few thousand dollars of paper loss. Since I have a long investment horizon, I’m not particularly fixated on my current paper loss (only 3% of total portfolio cost). Despite the broader stock market rebound, 65% of my stocks are still down from their pre-March highs.

Self-selected Stocks

A couple of months ago, one of my endowment policies became due and I found myself with an instant amount of cash to deploy in the stock market. I deployed a certain portion of it and still have a significant amount left in cash. Coupled with my monthly budget for investing from my income, I’ve invested over $50,000 in 5 months.

Prior to discovering the benefits of investing in the stock market, I put my extra cash with insurance companies by buying endowment policies. Endowment policies were suitable for me then as I was looking at growing my savings in some low-risk instruments.

However, I realised that I could tolerate more risks, and the 3-4% projected yield at the maturity of these policies no longer satisfied my risk appetite. Why take a 3-4% yield when I could have 5-6% yield on dividends by investing in Reits, for example? I still have 3 more endowment plans, with one maturing next year and the last maturing in 6 year’s time.

My stock portfolio comprises of 60% Singapore stocks, 24% US stocks, and the remaining 16% China/HK and Malaysia stocks.

Top 3 worst performers: (1) Eagle Hospitality Trust, (2) SATS, (3) Comfort Delgro.

Top 3 best performers: (1) Mapletree Industrial Trust, (2) Digital Realty Trust (USA), (3) Frasers Centrepoint Trust.

All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.

Peter Lynch

Dividends collected to date for year 2020: $3806.50 (Average $475.81 per month)

I’m basically a value investor in search of stable dividends but I’m beginning to look at owning some growth stocks. During this time of the pandemic, Singapore shares seem to be underperforming as compared to US and China stocks. Just look at how tech stocks have rallied since March. I kick myself now for not getting my hands on such stocks as Apple, Amazon and Alibaba in March when I had the opportunity and money to deploy. Anyway, I see growth investment mixed in with my dividend-paying stocks as a good way to create a more diversified portfolio

MoneyOwl

I began investing with MoneyOwl in July 2019. The investment portfolio consists of Dimensional Global Core Equity Fund and Dimensional Emerging Markets Large-Cap Fund. Of the 5 portfolios offered, I’ve chosen the most risky portfolio where the asset allocation is 100% global equities and 0% bonds. My time-weighted return for this portfolio is a decent 5.2%.

From MoneyOwl website

Syfe

I invested with Syfe primarily because of its one of a kind 100% Reits portfolio that tracks the SGX’s iEdge S-Reit 20 Index. The top 5 Reits (Ascendas, MLT, MIT, MCT & Keppl DC) represent slightly more than 50% of the entire portfolio of 20 Reits.

I like it that I can just regularly contribute to this portfolio and reap the benefit of dollar cost averaging. I don’t have to think much about transaction fees, rights subscription and reinvesting my dividends … I just let Syfe take care of all these for me. My all-Reit portfolio’s time-weighted return is -2.69%. In 15 years, with monthly deposits of $400, this portfolio might grow to $125,200.

I also invested in Syfe’s Global Automated Risk-Management Investments (ARI) portfolio. Through this instrument, I am investing in a blend of equity, bonds and commodity ETFs. Syfe’s proprietary ARI engine automatically manages my portfolio to maintain my chosen risk level (22.3 out of 25 max). This portfolio’s time-weighted return is -14.22%. It needs to do better. In 15 years, with monthly deposits of $300, I can expect the portfolio to grow to $217,400 (most likely scenario).

Comparing both the 100% Reits portfolio with the Global ARI portfolio, the latter provides a greater growth trajectory, owing I suppose, to the use of the SPDR S&P 500 ETF (24.32%) and the Consumer Staples Select Sector SPDR Fund (21.21%).

If I were to invest 2k in the Global ARI portfolio every month for the next 15 years, which is very doable, I would have become a millionaire with a portfolio that amounts to 1.3 million. 3k per month for 15 years or 1.5k per month for 20 years, I would have grown the portfolio to 2 million.

Very interesting scenarios of the future indeed!

However, I do take such rosy predictions with a huge pinch of salt. Nobody knows what the future is like 15 years from now. There might just be another more severe pandemic or a world war that will utterly destroy the world financial market as we know it today, who knows?

I’m considering switching one of these portfolios to Syfe’s Equity100 portfolio because it uses the Invesco QQQ ETF to achieve a growth and large-cap tilt. At least 43% of the Equity100 portfolio will consist of the QQQ ETF. The top 5 ETFs form about 90% of the Equity100 portfolio’s composition [QQQ, Consumer Staples Select Sector SPDR Fund (XLP), iShares Core S&P 500 UCITS (CSPX), iShares MSCI EAFE (EFA), and Health Care Select Sector SPDR Fund (XLV)]. I need time and wisdom to evaluate this option.

The stock market has rallied significantly since the beginning of the pandemic. In fact, the S&P 500, in recent weeks, has closed at new heights since the coronavirus pandemic was declared in the USA in February. It is truly one of the most amazing recoveries on record. Nevertheless I’m mindful of the great divide between Wall Street and Main Street, and the fact that a great deal of optimism has been priced into the market at this moment.

____________________

In July, I got a 5% increase in my salary. Peanuts … but still I should be thankful especially when many have lost their jobs, or taken a pay freeze or substantial pay cut.

That 5% pay rise comes in handy when it comes to Kiddo #1’s education i.e. IP-school fees, and also tuition costs. The teaching pace in Kiddo #1’s school is really accelerated, and Kiddo #1 is falling behind in two subjects, hence the need for private tuition. I’m paying about $200 per week for private tuition … so expensive! But I’m willing to help Kiddo #1 “survive” in this school that for over 100 years have taken in the cream of the crop of all Primary 6 pupils. Yeah, whatever the cost.

If only I could put this $800 per month into the stock market … oh well.

The most valuable investment we can make is in our children’s education. When we make education a priority, we give our children opportunity. Opportunity to learn at higher levels than their parents were able to learn; to earn at higher levels than we were able to earn.

Martin O’Malley, Former Governor of Maryland and Mayor of Baltimore

Disclaimer: I am only an amateur investor and nothing you read here on my blog constitutes financial advice.  I write here to detail my investments, strategies, and analyses.  Feel free to read at your own risk.  Should you need financial advice, consult a licensed financial advisor.