The Shadow of a Recession and possibly Stagflation.

We are all watching with bated breath at our neighbours' recent elections. At the time of writing, neither of the main opposition parties, PH or PN have enough seats to form a simple majority, let alone a 2/3rd majority in Parliament (for laws to be passed convincingly), so it is highly likely that a coalition of parties will be formed to make the next Government, with the smaller parties forming the opposition.

The whole situation from our immediate neighbour is of concern for us here in Singapore. We can actually see the drama of meetings between rival factions playing out from our handphones and while the dust will take some time to settle, I think the reality of a Parliament which is too finely balanced will be felt by all in Malaysia.

Every new move now on, will be populist in nature and in the overall scheme of things, a backward move for our neighbour. This is my opinion.  

In Singapore, while the ruling PAP has 90% of the seats, we can observe second hand how  having a weak Government will or will not benefit the ordinary lives of the people.

While inflation is now rearing its ugly head, Singaporeans of all walks of life will feel its bitter bite only in 2023. There is also the new 8% (from 7%) Goods and Services Tax which will come into play. The asset class such as landed property as well as condominiums in the central districts will be harder and harder to reach with each passing decade, I fear. This is only my opinion and not one which a straw poll of say 10000 citizens were taken and their views recorded.

In the early 90s based on a median combined salary of 2 professionals (S$8,000),if 30% or  $2400 per month was set aside to pay the mortgage, at 4%, a 1000 ft2 condominium of $600,000 in District 10 would take approximately 18  - 20 years of working to be fully paid IF the 30% downpayment or $180,000 is paid up in CPF and cash. That, and the fact that if one of them is retrenched, they better have savings to pay the ongoing mortgage. I know these numbers well, as I was part of that couple in the preceding paragraph. 

Now, in the early 2020s, this same Condominium of size 1000 ft2 will cost  $2.5 Million or 4 times that in the early 90s. Given that the mortgage rates are now 4%, and the new median salary of 2 working professionals is now say $ 12,000 (or only 1.5 times that of the early 90s). Given that 30% is approximately $4,000 per month.

If the 20% downpayment (now with parents' help) of $500,000 is magically coughed out ($200,000 to 300,000 is more realistic). Then for a $2,000,000 loan....

It is likely that this young aspiring couple would have to work... 40 years just to pay off the principal and interest - the loan may balloon to $3,600,000 (simple interest 4% over say 20 years) and maybe, one day they can own the condominium. This is based on the assumption that the next 40 years we do not see another (or 3 or more) major worldwide recession. The impact will be jobs losses, people will be forced to downsize , resize or worse. 

It may reach a stage, if the economy stalls for a number of years, then we have stagflation. 

It all makes for a depressing outlook. 

Of course, this is all conjecture on my part. But so called economists have been calling out a Great Recession for over 2 years now.  

In summary, asset prices have jumped 4 to 5 times, while true earning capacity has at best doubled in the short span of 30 years. In addition, food, transport and energy prices all have risen. 

Of course, it would be still OK, if the economy was chugging fine and salaries are going up, property prices are still climbing.

What if, it all goes SOUTH for 2 years ???

Well the property prices will be falling, but can people sell them off faster than they can sell them ? It depends.

A loan of 2 Million will still be $2 million regardless if you sold your $2 Million house for $1.6 million or $2.5 million. The debt must be repaid. 

I shudder to think of the scenarios for those who are over leveraged with million dollar loans on their declining assets. 

Our elections are slated only in 2025, but n theory they can be called as early as mid 2024.

When a country has a Government which has very little or no power, it is not a good development.

Many things can and will go SOUTH with just one election outcome. 

Just look at our neighbour up north.... 

 

Happiness

Our House 

Happiness ? What is it. Simply stated, it is a  transient emotion of each an every person.

The world has been gaga about trying to achieve 'happiness' amongst all the countries in the last 40 to 50 years that  there are numerous country Happiness Indexes, Charts, Quick Fixes, it makes you wonder.

Is Happiness measurable ? Happiness varies from person to person. 

Some people find happiness in eating good food.

Some others in solitude, or in vacationing, or going to karaoke to sing.

Others like the current generation, like to play VR team games  

In Maslow's heirarchy of needs, human basic needs are the of access food, clothing, shelter and safety. After these 4 are satisfied, the needs become more esoteric and the so called 'rights', freedoms and self determination of the individual becomes more pressing.   

Does being rich make you happy ? 

Not necessarily so.

With so much wealth there comes infighting within your family and loved ones, it is not a given but there is so much envy amongst the cohort when they see that you have made it, that sometimes very rich people withdraw from society and hence have few friends which they truly call friends.

If you are the top student in your class or year will this make you happy ?

Perhaps, but you then have the weight or expectation that you have to perform and be cleverer than the rest from today. That will weigh you down. 

If you are handsome and have many friends, are you truly happy ?

See the numerous KPop and Hollywood stars, musicians  and actors who committed suicide at the peak of their careers. They were lonely and dreadfully unhappy. 

Goo Hara, Robin Williams, Kate Spade, Anthony Bourdain are but just 4 who come to my mind.

Being Happy - it is a state of mind for each individual.

1. Staying Relevant and Doing Good.

To be happy, one needs to be doing something meaningful. He may be earning a salary and on the side, he is volunteering at the soup kitchen or in the Buddhist lodge preparing food for the elderly sick.

On the other hand, someone may be raising a family and / or tending to an elder in the family who is slowly getting Alzeimer's (for example). These may make people happy  knowing they are relevant and doing good. 

I have been extremely fortunate to own land in Singapore, thanks to my family's inheritance of  a small house in the central part of Singapore. We spent quite a small fortune tearing down the old house to completely rebuild a new one so the picture above is the 'new' house.

The property is fully paid. This means that we have no mortgage over our heads at this juncture where I turn 60 in a week's time. This I am very happy about. You must have read that mortgage rates have been skyrocketing this past year to over 4% and homeowners who have bought properties in land scare Singapore must be quite concerned with their mortgages now practically double of what it used to be just 5 years ago.

I have managed a total of 4 companies and one is doing reasonably well, so I am aiming to sell this profitable business to investors in the coming months and years. It is not a good thing to hold on to material goods, buildings and assets. It is better to exit while I still am near the peak of health and do things which enrich my inner being. 

I titled this post happiness, because in Singapore, as in many capital cities in the developed world, we need to find our Ikigai or our meaning for living. Every person's Ikigai is truly personal to himself and mine is only known to myself. I started setting life goals over 20 years ago and to date, I have attained some and have failed miserably in others.

Set personal life goals, attain them within reasonable amount of time. I do set goals every year since the year 2000.

2. Sometimes, one has to make sacrifices but in the end, he or she will be Happy

Sacrifices - to achieve your goals be prepared to Sacrifice some of your long held luxuries.

There will be sacrifices for sure, like becoming a married person, and a father, then as a caregiver to my aged parents. But at every few years, stop, take a look at your life goals, if you have achieved them, you will be happy. If not, keep plugging on. 

3. If your set goals are unrealistic - be strong and change them

If they are unrealistic to achieve, change them to more realistic ones. Don't compare yourself with the Joneses or the best of the best. Happiness is at best a transient state of mind. If you find someone who is always happy and laughing at nothing, you would think he had some mental illness wouldn't you ?? 

I am happy in my own skin, come what may. The outlook for the world economy is bleak, but somehow I think that I will overcome whatever life throws at me, curve ball or straight ball included.

I am determined to attain a major personal goal in the next  3 years. (2023 and / or 2024).

Dont go Searching for Quick Bucks or Get Rich Quick Scheme.

I know (at last count) 4 friends and family who  have all all of the below : 

1. They think they are very smart (better than other people)

2. Always searching for schemes or or ideas  to quick bucks to make in as short a time as possible

3. Lazy 

4. Forever talking about how great their abilities are.

They all share similar life experiences (with the exception of 1) :

1. Divorce / death from their partner 

2. Still at Square One of their lives in terms of financial status (not a good barometer but I persist to use it). Material status and wealth can bring on the good life and some degree of satisfaction. 

3. Very (too) open to new ideas from 'friends' and never really stress these ideas before jumping in to either invest, participate and critically assess the validity and success proofing of the new innovation.

4. They are ostracised from their mainstream friends and family. Many people certainly do not share in their enthusiasm but they remain childlike in their gullibility and perhaps naivete.

The sad part, is that they think they are 'somewhere' and demand a certain entitlement. The reality of it all, is that they are 'nowhere' and their current situation is blamed normally to 'fate'.

I don't pity them as these people chose to take this path and were very self righteous and entitled about taking their shot and making it big. 

I try to stay away from such people, as their aura is toxic and can be a drag to my path towards achieving my short term and long term goals.

I would be happy to have a coffee with them, but I would not want to be in their inner circles, and neither would I want to waste too much time with their presence.

Time is of the essence, and these quick bucks schemes normally attract a certain breed of people, I call them the lazy opportunists, who may strike it good once in a while but the reality of it all, is that they would not get very far with these get rich quick schemes.

To make it really big, one needs a confluence of factors, with varying importance at each times, so it is never a static equation. While I am slogging away at my small business , I am still optimistic I can at least get a good retirement nest egg and continuing to do good to the less fortunate. 

 

Seize the Day Brothers and Sisters. 

 

QRA International - Up for Sale for the Right Price

 

After almost 20 years in the business, I am working towards an exit. The company I founded QRA International is looking for new owners and buyers with interest. The strong points for the company :

a) 20 years (founded in 2003) in the business with sales to 8 countries in Asia, Middle East and Australia.

b) Strong and Established Presence in :

1. Environmental Test Chambers

2. Test Services (for Medical and Pharmacuetical) Dominant player with long term outlook

3. 20 test equipment in 2 Laboratories with assets of over US$ 250,000

4. Strong track record of previous sales to top Government and multinational companies 

5. 7 out the last 8 years, we are profitable, including FY 20, 21 and 22. 

Check out the SGP Grid's unbiased assessment of QRA International

https://sgpgrid.com/company-details/qra-international-pte-ltd

c) New Blue Ocean strategic product in new emerging industry for the next 20 years.

Interested Parties please write in to :

a) mark@qra.com.sg 

b) qrasales@qra.com.sg 

and we can take the discussion or expressions of interest accordingly.

Uncertainty is the new Norm.

 

    This is the year so many uncertain things turned for the worse, globally. 

1. Russia unilaterally declared war against Ukraine and as a result, oil sanctions were imposed by the Western powers and oil prices spiked leading to ramping up of electricity costs and rapid inflation. The influx of many Ukrainians to all the neighbouring countries has also led to major societal isssue.

2. The stopping of the Nordstream gas pipelines to Europe by Russia has and will make this winter, a winter of discontent and misery for many living in Western Europe. There are numerous heartbreak cases of people living on social welfare forcing to choose between staying warm at home and feeding the family. It has gotten this bad.

3. COVID - 19 hes been brought to an endemic game worldide, with the exception of China. While the world has opened up with travel back to the pre-COVID days, China is in a state of long drawn out COVID management with further restrictions and lockdowns in multiple cities and regions. This is thus hampering and hiking businessescosts  all over China. Costs of material goods are climbing and the flow of Chinese visitors overseas has dropped by 90%, a tremendous drop. The 2 major industries impacted by the lack of Chinese tourists and visitors in the last 10 years are :

a) Tourism

b) Real Estate  

3. The fanning of the war drums between US and China over Taiwan continues unabated. The state of the Semiconductor industry is now in a very tumultous state, as US has banned all sales of chips directly or indirectly from countries outside China , with Taiwan's TSMC taking the biggest hit as it produces over 50% of the latest microchips for all manner of devices, from cars, spacecraft, weapons, satellites, you name it.

4. Sri Lanka has gone bankrupt. Due to over exposure to Chinese loans which turned bad, made worse by the shutting off of the supply of China tourists, oil prices skyrocketing and the currency of the Sri Lankan rupee in free fall led to the President fleeing the country.

5. Many of us are facing huge inflationary pressures on food, and basic necessities.

6. Everything is going south, assets, cryptocurrency, equities. There is no upside, with the exception of a) savings bonds, b) treasury bills c) 

Property ?  Maybe a correction or drop by (at most) 20% ; Maybe 

With all the major economies all facing drops (especially China) in the property values, it is a mystery that Singapore property still is resilient in the face of all these global uncertainties. I can only guess the reasons :

a) Singapore is very stable, and a safe haven for rich investors who are spooked by the geopolitical swings and want to put their monies in a safe place with a stable Government.

b)  Singapore's business environment is welcoming and very easy to setup new businesses with very little bureaucratic paperwork.

c) The amount of land in Singapore is limited (Island), hence the baseline prices should remain relatively stable, although in the event of a major recession next year many people will be force selling their apartments or houses as the mortgage rates and climbs. Couple that with an uncertain work environment, with numerous job cuts (the latest in the IT and Tech sector), you will have numerous challenges if one of the working class person is laid off and partly or wholly responsible for repaying the home mortgage.

In the event of a bad recession in 2023, then the home prices will drop. By what extent is anybody's guess. If there is a technical price correction, I believe the prices will fall by (at most) 20% as the Singapore developers are cash rich and can hold on to their new launch prices.

So be prepared for an uncertain 2023 folks.

Carpe Diem

 

   

When the Saints go Marching In

 

Get your Colonscopy done today

                            10 Most Common Cancers in Men and Women in Singapore

As I approach a major milestone in my life, a good friend Kim Soon Fang told me to go for a colonscopy check. 

Fortunately I took his advice and today, I am happy to say I have had my 4th Colon and 2nd endoscope test done. 

Early detection saves and prolongs lives. 

I have been delaying this for a number of years and while I have had 3 before in the past (1999, 2004 and 2007) , this is a necessary check for ALL males above 50 at least once in their lives. So today was my 4th. In addition, I had an endoscopy to check on my stomach as I had some bloating (on and off) and my good doctor, Prof Goh suggested I do both, the endoscopy and the colonscopy.

In Singapore, the no. 1 cancer for men is colon cancer. Something in our lifestyle in Singapore which is a combination of stress, high paced living, not eating enough fibre, no exercise and smoking all are factors which contribute to this sad situation.

So after my long holiday in September, I booked and appointment with Singapore's preeminent oncologist and surgeon Prof. Goh Hak Soo (Gleneagles Hospital Medical Centre). The scopes were scheduled today.

I am happy to report, that while there was a polyp in my large intestine, it was benign.he had it removed on the spot. This is something which new technology endoscopy and colonscopy enables the surgeon to do. 

 However, the next scope will be in 2025 October (3 years time) and I am determined NOT to delay that screening - so this post is a reminder to myself to FIX the appointment in 3 years time.

Prof. Goh has excellent bedside manners and has a sterling career record spanning over 40 years. I am very grateful to have him as my doctor and he had also treated successfully my father over the last 30 odd years. My dad survived the cancer in his colon by almost 40 years - thanks to Dr Goh's impeccable skills as a surgeon with a procedure. A cure by any name. 

The gold standard to screen for colon cancer are these :

a) Go for regular blood and stool tests (once a year)

b) Make sure you can manage your blood sugar and blood pressure (it helps !)

c) Have a colonscopy done once you reach 50 and then on every 3 to 5 years depending on your doctor's assessment. 

To prevent or mitigate your chances of intestinal cancer do these things :

(I am no expert but from my experience and reading articles on the web are these).

a) eat a diet high in fiber

b) opt not to eat processed meats much (sausages, bacon, ham and salami)

c) Exercise and sweat as much as you can weekly

d) do not smoke

e) reduce junk food, crisps and sodas.

f) alcohol consumption in moderation 

Symptoms (it must be a combination, not just one)

Blood in stool 

Bloatedness

Loss in appetite and weight

Fever

Stomach pain 

Again, I am no doctor, but distinguish the main symptoms and check with your doctor when in doubt. The above is by no means a comprehensive list. 

Colonscopy / Endoscopy procedure.

I had to drink 2 different laxatives, one batch on the day before the screening. The next one was on the morning of the screening. Luckily I had the anti - nausea pill given to me and I managed to down it all in one go. The last laxative was called FORTRANs and I had to drink 4 glasses of what tasted like alkaline water.  

Once at the endoscopy centre at the hospital, you just follow the program and get your blood pressure monitored, take the ART test, and then the professional nurses will sedate you and in roughly 1 and half hours you will be ready to get your result. For my case, I had both the stomach scope (endoscopy) and the large intestine (colonscopy) done.

The procedure I know is not palatable, but if it means prolonging your life or mine, I will do it, wouldn't you ?

We should all go for cancer screening first at age 50, then after every few years after that (3 to 5 years max) if we want to keep our quality of life high and for as long as possible. Imagine, at 60, and we want a quality life for another 15 years (hope its not too much to ask), then that is 5,475 or almost 5,500 days. 

The scope only requires 2 days of your life.

Colon cancer is highly preventable and treatable - so take action now. This applies especially for those above 50 who haven't had a first colonscopy done.

The good news ?

1.Colon cancer generally cells grow slowly (normally in years, not months), so after your check, you can relax and schedule the next visit 3 years (or max 5 years) after the scope. 

2. Colonscopy can immediately detect and remove polyps (non cancerous) and that will solve any issues for the next few years.

2. Critical illness Insurance (various, please go and check) now covers colonscopy as in-patient, and Medisave is also another pillar to depend upon. 

So, for the S$ 2,000 expenses, I expect that insurance will cover 50% and medisave about $700, so my out of pocket would be in the region of S$ 300 to $400.  This is if you take the private doctor / specialist route.

For member of public using the Public Health Service, you can always schedule an appointment via your polyclinic, use your CHAS (Community Health Assist Scheme) card, wait a couple of months, and for people above 55 years of age, the stool test and colonscope procedure is a very small price (perhaps at most $100 for both).  

Thanks be to God for keeping me calm during the procedure. (45 minutes + 45 minutes recovery). 

Carpe Diem !