This morning I purchased a few more shares in Tontine Wines (HK:389) to the portfolio. Although I expect some margin contraction during the current financial year, the company is still growing its output and expanding its distribution capabilities. The balance sheet is strong (although cash will be run down as the company expands) and I am optimistic that the 4.2% trailing dividend yield can be at least maintained. Although the company will not be a major beneficiary of the latest policy initiative (which focuses on red wine), there may still be some support from the policy.
I paid HK$0.69 for the additional shares.
Thursday, August 09, 2012
Cheering for Standard Chartered
Having read a considerable amount of the press coverage on the allegations being made by a US regulator against Standard Chartered Bank, one can only conclude that this is yet another example of American politics in action - a series of allegations made which are either completely unsubstantiated or blown wildly out of all proportion even before a proper investigation has been made. The spirit of McCarthyism is alive and well.
Hopefully Standard Chartered Bank will continue to vigorously defend themselves (unlike HSBC which tamely rolled over) and all the non-US governments and regulators which failed to stand up to intrusions on their sovereignty like the PATRIOT Act.
I don't own shares in SCB but am very tempted to go and buy a few to show moral support for the latest victim of the US regulators and politicians.
It is long past time that the rest of the world told America's political grandstanders to foxtrot oscar.
Hopefully Standard Chartered Bank will continue to vigorously defend themselves (unlike HSBC which tamely rolled over) and all the non-US governments and regulators which failed to stand up to intrusions on their sovereignty like the PATRIOT Act.
I don't own shares in SCB but am very tempted to go and buy a few to show moral support for the latest victim of the US regulators and politicians.
It is long past time that the rest of the world told America's political grandstanders to foxtrot oscar.
Wednesday, August 08, 2012
The impact of inflation (again)
I found this handy calculator for showing the impact of inflation on asset values, expenses etc. There is also lots of other useful data on the site.
From a retirement perspective, I am somewhat paranoid on the effects of inflation on my ability to sustain our desired standard of living over what I hope will be four decades of not participating in the work force. Several years of watching governments print ridiculous amounts of money to cover their unsustainable spending can do that to anybody.
Extrapolating backwards and assuming that the next forty years will collectively be a repeat of the last forty years (who knows?) would suggest that I can look forward to 449% cumulative inflation over that time period. Put differently, in forty years time, I will need $5,489, 904 to have the equivalent purchasing power of $1,000,000 today. That's actually a number that I find quite scary and explains my preference for tangible and risk assets and dislike for perpetually depreciating paper.
The calculator uses as US data and inflation in many other places has averaged a bit higher (there is also a series of data for Hong Kong on the HKMA website but it does not go back as far) AND uses CPI numbers which represent a basket of goods and services which will be different from my own expenses. Accordingly, I have used different numbers when doing my own projections.
From a retirement perspective, I am somewhat paranoid on the effects of inflation on my ability to sustain our desired standard of living over what I hope will be four decades of not participating in the work force. Several years of watching governments print ridiculous amounts of money to cover their unsustainable spending can do that to anybody.
Extrapolating backwards and assuming that the next forty years will collectively be a repeat of the last forty years (who knows?) would suggest that I can look forward to 449% cumulative inflation over that time period. Put differently, in forty years time, I will need $5,489, 904 to have the equivalent purchasing power of $1,000,000 today. That's actually a number that I find quite scary and explains my preference for tangible and risk assets and dislike for perpetually depreciating paper.
The calculator uses as US data and inflation in many other places has averaged a bit higher (there is also a series of data for Hong Kong on the HKMA website but it does not go back as far) AND uses CPI numbers which represent a basket of goods and services which will be different from my own expenses. Accordingly, I have used different numbers when doing my own projections.
Subscribe to:
Posts (Atom)