Wednesday, August 23, 2017

Goodbye Stocks, Bonds, Unit Trusts and Sanity

I am GMGH,
Warden of this blog,
First of this subdomain name,
Protector of (his own) wealth,
Defeater of Insurance Agents,
Breaker of traditional thinking,
Gentle lover of travelling and eating,
Operationally-Ready Soldier of Singapore,

and now...

The sacrilegious heretic of modern personal finance.


If you're rolling your eyes at the GoT references, then screw you for judging me based on the kind of TV shows I watch.

So, pray tell, what sort of sacrilege have I actually done?

I've sold off ALL of my bonds - not much, but it was 2 tranches of the SSBs that had fantastic yields of 2.78% and 2.58%. This is in comparison to the paltry 2.12% you can get on this month's bond.

I've sold off (almost) all of my unit trusts - save my investments in Gold and what I have stuck in the SRS. Goodbye short-term bonds, emerging market bonds, Russia and commodities.

I am also now going to sell off MOST of the holdings in my SGX portfolio. The bulk value of the investments will still be there, but I'm cutting the number of holdings to free up both capital and mind space. A lot of work goes into just maintaining the portfolio, such as recording dividends and checking quarterly performances to make sure that they are not burning to the ground. It is very exhausting for peanuts.

That's nothing too crazy right? After all, yours truly has always been one of the most bearish bloggers, constantly talking about financial meltdowns. So GMGH is just de-risking his portfolio and making a bet that all those asset classes have topped?

No, not really.

I'm going to put most of it into crypto.




STOP GMGH!

CRYPTOS ARE DANGEROUS!

UNREGULATED AND VOLATILE!

DID YOU TAKE YOUR MEDICINE YET?

DID YOU NOT READ THE MAS WARNING?

BUY SGX STOCKS AND HUAT TOGETHER OKAY?

HAVE YOU REALLY GONE INSANE THIS TIME AROUND?

ARE THEY EVEN ASSETS? THEY ARE BACKED BY NOTHING!


I'm sure those are the thoughts that are running through your head right now. I've tried to explain about this technology and my position and take on them in my previous posts - I'm sure I did not do a good enough job in making a strong case for it. Sorry if I'm a bad salesman.

But really, does that matter? I don't need you to be convinced to add confirmation to my own conviction. It's really of no concern to me if none or all of you think this is a good idea.

I think most of you know me for my very pragmatic point of view on things. I even split hairs about the smallest things when I consider interest bank accounts, credit cards, insurance products and what not.

I have also proven that I've outperformed our "benchmark", the STI, over the past few years that I've been invested in the SGX. You don't have to take my word for it. You can just see my previous posts on my buys and sells and my monthly updates (which unfortunately I stopped because I was just lazy). Sure 3.5 years is a short time and it could all just be dumb luck, but hey, a win is a win. A smart gambler leaves a table when he knows he's beaten the odds.

Even my crazy "investments" into precious metals (I know some of you think it's not a real investments because it doesn't generate any "cash flow", lol okay) are in healthy profits although precious metals are still hanging around at multi year lows.

I might have very unorthodox ways of thinking about things and picking investments, but you can't say that I'm a complete idiot. Give me credit where it is due. You can only say that I'm an idiot that has made money... for now. I honestly can't say that you're wrong with a statement like that.

I'm sure many of you have been disapprovingly reading this post so far. I have been waging war internally with myself about this as well. It was not an easy decision to depart from the "proven path", so I struggled with this for a very long time. But now that my mind is made up, I am ready to face the challenges of the crypto world.

Bring it.


For the past few months I've dived deeeeep into the crypto world. Balls deep. Not only that, but for the past 2 months I've been putting my money where my damn mouth is at and went into cryptos with my own cold hard cash. Think of it as my beta testing, or doing a proof of concept.

One of my first few buys was Ethereum at market peak, a whopping $490 USD (even though it actually only peaked at $420... the huge difference in price is because of the shitty exchange prices in Singapore, THANKS COINHAKO). If you watch your investment drop 72% in a month, tell me if your balls shrunk and crawled back up into your body, okay?

Two months on, I'm up 100+% from my capital that I put in. Yes, I've more than doubled my capital in just 2 months. How much is that in absolute value? Well I'll be damned if I give you a number. You can ask, but I won't tell. I must admit that I wasn't expecting such heavy and fast gains, and I still don't expect this to be the norm moving forward. I rather take the "conservative crypto" approach and "only" aim for 40% a year, rather than the aggressive crypto approach that hunts for the next 10-100x jump in value. You'd be amazed how many solid potential 10% pa opportunities there are in crypto that are being shunned because "the returns are too low".

I've taken the red pill and I can't go back. I also can't explain it to you, because you have to see it for yourself. The opportunities in cryptos are mindblowing not because of any special magical attributes that cryptos have over regular traditional investments, but specifically because none of you guys are in there... yet.

Sounds absolutely crazy, but hey, you've got to admit that no matter what happens this is going to be fun to watch, eh? I either become one of the greats of our time, or I explode spectacularly in a big ball of crypto flames and all of you get to be amused and entertained by it while wailing "I TOLD YOU SO", half crying, half laughing.

But with governments and corporations coming on board and recognizing it, by the time this goes mainstream and 50% of financial blogs start to accept and include cryptos in their content, I might already be the biggest baller you would've ever known.


Love me or hate me, just watch me.

14 comments:

  1. Kudos to you GMGH, I look forward to you proving the haters wrong in time to come.

    ReplyDelete
    Replies
    1. Hi DAN,

      Actually I haven't felt much hate from my decision to move deeper into cryptos. It is mostly met by eyebrow raising skepticism and concludes with "your money, your choice".

      For my money's sake, I hope I'm not wrong either, ahahaha

      Delete
    2. Those were more or less the kinds of reactions I got as well after sinking in quite a sizeable amount into crypto. Hope we're both right!

      Delete
  2. Hi GMGH,

    Im doing the same! haha crypto is just too addictive - now stocks and typical investments just feel too slow ;)

    ReplyDelete
    Replies
    1. YH, crypto brother-in-arms! Please do drop me comments on my crypto-related posts, I like hearing thoughts from other already in it.

      Delete
  3. winter is coming...

    all the best in your foray beyond the wall..

    ReplyDelete
    Replies
    1. Foolish, may both the old gods and the new gods allow me a safe return.

      Delete
  4. HI GMGH , kudos to taking this leap of faith and forbearing risks ahead (calculated or not), I've got a question , if u cash out large amounts from COINHAKO, would it alarm the authorities as they question the source of funds (think AML/ATF) , or get taxed in the months / years to come ?

    Thanks

    ReplyDelete
    Replies
    1. Hi Anon,

      As far I know, tax on this is based on if the money is classified as Income or Investment.

      There is no black and white, but I think crypto falls clearing deep into their classification of high risk speculative investing. As such it should be considered capital gains and not liable for tax.

      Of course this may be clarified in the future as more people seek official answers from the authorities.

      Delete
  5. Good move and good timing too. Why?

    Be greedy when other are fearful.

    peter

    ReplyDelete
    Replies
    1. Hi Peter,

      I feel like I am being greedy while others are just unaware, not fearful. Haha.

      Delete
  6. This cryto thingy are so talk about in the media, how can people not aware, yet the market capital is nothing compare to stock, so if it is not fear that hold people back, then I do not know. If there is not fear bitcoin would have grow by leaps and bounds.

    I envy you.

    peter

    ReplyDelete
    Replies
    1. Hi Peter,

      I think people are just unaware of how it works and why it is valuable. There is also a strong lack of information about how to buy it and safely keep it.

      I feel that the fear and ignorance risk premia is still very high, which is why the returns can be so good. Once people are less afraid and understand it better, opportunities to make so much money in crypto will rapidly diminish.

      Delete

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