Let It Go

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We recently sold a dividend stock at a loss. Initially, we bought it in July 2017 after reviewing its strong financials and solid fundamentals (such as price-to-book ratio, gearing, and revenue). When COVID hit in 2020, we purchased more shares as prices dropped, anticipating a rebound once the crisis passed—especially since the company is connected to tourism. The stock did recover somewhat, but after 2022 it began to decline again and has stayed weak since. Additionally, the dividend yield kept decreasing each year, eventually falling near to the 10-year annual inflation average of 1.75%¹.

In total, we incurred a -32.6% loss based on our entry and exit prices, made worse by the stock’s wide spread and low liquidity, which meant selling at the bid price. Even after accounting for the dividends we received, the overall outcome was still negative at -21.3%. The good thing was the company share represented only at 0.4% of our total Bedokian Portfolio value.

Cutting losses can be tough for investors, but it is often necessary to free up capital for better opportunities rather than letting funds stagnate. Potential price rebounds or dividend increases are not guaranteed. Instead of viewing one’s investment as hard-earned money lost, consider it as strategic capital to be redeployed effectively. This is one of the true marks of a rational investor.

Related post

Are You Mentally Prepared For Investing?

1 – MAS Core Inflation, 2015 to 2024. Monetary Authority of Singapore. 

Rebalancing: Adding Bond ETFs

While many investors and traders are focused on artificial intelligence counters, precious metals like gold and silver, or cryptocurrencies set for recovery, we are going contrarian and turning our attention elsewhere: bonds, specifically bond exchange traded funds (ETFs).

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Although we remain opportunistic with other asset classes and sectors, taking positions when prices are favourable, the main portion of our upcoming portfolio additions will be allocated to bond ETFs. This may seem surprising, but from a holistic portfolio perspective, this contrarian approach plays an important role in rebalancing, which is essential for diversification.

Currently, bonds make up 12.7% of our portfolio. As previously discussed here, our target allocation for bonds is 15%, so we are aiming to increase our holdings nearer to that percentage figure.

We prefer bond ETFs over individual bonds because they offer easier management, greater diversification thanks to exposure to different issuers, better liquidity since ETFs are easily traded on markets, and lower transaction costs by dealing with one ETF instead of multiple individual bonds.

That said, we also hold some individual bonds such as Singapore Savings Bonds, which we intend to keep until maturity in order to benefit from their higher interest rates in specific tranches.

Disclaimer

The Quest For Higher Yields

Getting “more bang for the buck” from one’s investment comes in two forms, capital gains and income, making up the basic total returns’ equation. A branch of methodology called income investment (or commonly known as dividend investment) focuses on the income part, which not only consisted of dividends (from equities), but also distributions (from real estate investment trusts or REITs), coupons and interest (the latter two being fixed income terminologies).

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The attraction of this investment methodology lies in its simplicity; the ease of calculation of the expected amount and it being entering one’s bank account is visible. Across the income spectrum mentioned in the previous paragraph, investor attention is paid to dividends from equities and distributions from REITs as their yields are usually higher than that of those from fixed income (bonds and cash). Resultingly, it is common for income investors to go for instruments with higher yield, since (naturally) this translates to having more money in the bank.

However, those who are in the markets long enough would know that higher yields meant higher risks. Something has got to give to gain that much of a yield from a given set of capital, even if the deal does not sound “too good to be true” in the first place. For instance, high yielding bonds are so because of the low credit worthiness of the borrower. On the other hand, a positive example of high yield could be due to capital distribution and/or special dividends being announced. These occurrences do not happen every time, so it is prudent to check on the dividend components if a company/REIT reported a high payout for the moment.

In looking for higher yields, a main factor to think about would be consistency, i.e., the ability to give that level of yield over a longer period, and preferably not too much compromise on the underlying capital (remember that returns = capital gains + income). Also, do not just look at published yield figure itself, for it is typically displayed as a ratio of past annual payout over the current share price. Sometimes it can be misleading, too, where there are cases of yield rising but the underlying payouts and share prices are reducing, particularly when viewed across preceding periods (see this post for more information).

An honourable mention is given to financial instruments that utilise derivatives and/or cryptocurrencies to generate unusually high yields that outmatch the traditionally super low-grade junk bonds. As of the writing of this post, the highest yield encountered stood at slightly more than 280%, which is an exchange traded fund (ETF) that sells call options of a company whose main assets are cryptocurrencies. While they look attractive, due diligence is required on understanding how these products work, what are the underlying assets, and the historical performance in deriving the yield numbers.

“I Consider CPF As A Bond”

I have been hearing this occasionally in investment chat groups and conversations among acquaintances, friends and relatives. In this post I will give my opinion on whether the monies in our Central Provident Fund (CPF) accounts are considered a bond.

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Breaking it down, it depends on three main factors: the definition of a bond, the aspect of portfolio management, and the age of the investor.

Definition of a bond

According to Investopedia, a bond is a fixed-income investment issued by governments or corporations to raise funding¹. A bond contains three components: the principal, the coupon rate and the duration.

Looking at CPF from our lenses, the principal comes from part of our pay and our employers’ contribution, with the interest contributed by the CPF Board, and technically there is no defined end date at which the entire sum would be returned (some may argue on this but let us keep it simple). Simply speaking, we are owing money to ourselves, and that sounds weird to be called a bond.

Some proponents of CPF being a bond highlighted that the monies are invested in Special Singapore Government Securities (SSGS) issued by the Singapore Government², which is a government bond. However, in my opinion, this label is a bit off as there is an additional layer of ownership; we should be looking at how it works between the investor and CPF, rather than the other side on how CPF invests (e.g., we invested in a company bond who in turn use the proceeds to invest into equities, does not mean we are directly invest in equities with the same said monies).

Hence the conclusion: CPF is not a bond strictly by asset class definition.

Portfolio management

For portfolio management, if we treat CPF as a bond, it is natural to employ the disposable income (i.e., salary from our day jobs) to invest in other asset classes. This was highlighted in my eBook The Bedokian Portfolio(pg. 167-168) where the various portfolios in the Portfolio Multiverse are seen as one gigantic portfolio. The CPF works like an almost risk-free asset class of sorts to help buffer the volatility of the other asset classes. In my belief, this make-up works well with the investor planning to retire at the conventional retirement ages (i.e., from 55 onwards).

Regarding the rebalancing aspect of portfolio management, this is where the problem comes in: one can contribute into CPF but cannot withdraw from it (unless he/she is age 55 and above). Therefore, in the gigantic portfolio model described in the previous paragraph, if equities or other asset class portions are shrinking, there is no way to withdraw from CPF and inject into them.

Again, this can be solved with the Portfolio Multiverse method: we can have the various portfolios (disposable income, CPF, etc.) work separately with one another but also working together as one (“differentiate, then integrate”). With the CPF Investment Scheme, one could invest in selected funds, individual counters and gold (subject to limits) with CPF (the Ordinary Account, or OA, in particular), thus forming its own separate portfolio. The remaining cash part could be treated as a bond-like instrument generating at least 2.5% per annum.

So, my verdict on this part: it depends on the treatment of CPF by the individual.

Age of the investor

As implied in the previous section, if an investor is aged 55 and above, he/she has a choice of whether to leave the funds in the CPF OA, or to withdraw and plough the monies into other portfolios, and with this, the almost risk-free CPF is construed to be a bond-like instrument. If going by the gigantic portfolio model, do note that for rebalancing funds into the CPF, it is subject to the prevalent annual contribution limit, which is SGD 37,740.

Bringing in the component of CPF-Life, a scheme where CPF account holders would receive a monthly payout from age 65 onwards, there is a view that it is like a perpetual bond paying out coupons indefinitely. This is correct from a certain angle, but the actual term to describe CPF-Life as is an annuity scheme; perpetual bonds (or perps) is more of a description for fixed income, again going back to section of the definition of a bond.

Accordingly, my view here is: for CPF, it depends on the individual treating it, and for CPF-Life, it is not a bond.

So how to define CPF?

According to CPF Board, CPF is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, home ownership, family protection and asset enhancement³. The main function of CPF is a regulated, high-yielding savings account to prepare for retirement, and that is the answer. It is also a pool of monies that could be used for investment, residential property mortgage payments, medical insurance, etc.

Due to its policy and regulatory nature, CPF is not as liquid as funds or portfolios built from our disposable income. Personally, I treat CPF as a separate portfolio, one of a few that makes up our Portfolio Multiverse.

Disclaimer

1 – Fernando, Jason. Bonds: How They Work and How to Invest. Investopedia. 14 Nov 2025. https://www.investopedia.com/terms/b/bond.asp (accessed 15 Nov 2025) 

2 – How are CPF monies invested? Policy FAQs. CPF. https://www.cpf.gov.sg/member/infohub/cpf-clarifies/policy-faqs/how-are-cpf-monies-invested (accessed 15 Nov 2025)

3 – What is the Central Provident Fund (CPF)? FAQs. CPF. https://www.cpf.gov.sg/service/article/what-is-central-provident-fund-cpf (accessed 15 Nov 2025)

How The Bedokian Conducts Fundamental Analysis

Fundamental analysis (FA) refers to the process of examining a company to assess its suitability for investment. According to The Bedokian Portfolio eBook, there are three tiers in FA: financial statements, environmental factors, and economic conditions. The analysis can be conducted using either a top-down or bottom-up approach.

 

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At the financial statement level, the company's income statements, balance sheets, and cash flow statements are looked at. Environmental factors are considered the "playing field”, encompassing elements such as competitors and governing regulations; the so-called "rules of the game”. Economic conditions refer to broader influences, including inflation rates, geopolitical developments, and other macroeconomic variables.

 

To detail the entire FA warrants writing a separate book, to which there are already a lot out there, and FA is not a one-size-fits-all kind of thing, hence I only scoped it to ratio analysis according to my selection guidelines. I had quoted this in my eBook: “…a full FA is to be carried out in conjunction with the selection guidelines” (it is at page 102 by the way), so it needs to work together with whatever FA being employed. However, some readers might find it incomplete since I left out much material.

 

In this post, I will outline my selected methods in conducting financial analysis, along with further perspectives on qualitative elements, particularly those extending beyond financial statements.

 

Valuation Methods

 

The eBook introduces several financial ratios, including the price-to-book (P/B), price-to-earnings (P/E), and P/E-to-growth (PEG) ratios.

 

The P/B ratio is often applied to most Singapore Exchange (SGX) listed equities, as some blue chip stocks are described as being traded "within the P/B band”, which is calculated based on standard deviations.

 

For equities in other regions, particularly growth-oriented stocks or those listed in United States (U.S.) markets that are seldom near their P/B, the PEG ratio is employed instead.

 

The P/E ratio serves as a comparative tool for ranking companies within the same sector or industry. Dividend yield is also considered, especially for dividend-focused investors like us, with a preference for yields that exceed the 10-year average inflation rate, though exceptions may be made for U.S. stocks, which typically have lower yields than local ones.

 

It is important to note that these ratios provide only a partial perspective, reflecting just a snapshot based on current or historical data. Further analysis of the numbers behind these ratios is essential, which involves reviewing financial statements such as revenues, net profits, and free cash flows. While valuation techniques like discounted cash flow (DCF) and dividend discount models (DDM) are recognised, I do not apply them often due to the numerous assumptions required.

 

Environmental Factors

 

Often referred to as the playing field, assessing a company's position within its sector or industry typically involves comparison with peers. This process can be complex due to overlapping business activities; for instance, while Coca Cola and PepsiCo are leading companies in the cola beverage sector, PepsiCo also operates in snacks and potato chips, whereas Coca Cola primarily focuses on beverages. Similarly, Apple and Samsung, prominent smartphone manufacturers, offer additional products not always in direct competition, such as televisions.

 

To enhance these comparisons, alternative data sources can be useful. Market share reports from research firms provide relevant statistics, though recent or detailed information may require paid subscriptions; however, some figures are available through financial news outlets. Company projections shared in quarterly and annual reports offer insights into expected developments from the management's perspective. In addition, primary data collection, sometimes called ‘scuttlebutting’, can provide personal observations that supplement formal research, such as noting the prevalence of certain products in specific regions (e.g., my observation of a lot of iPhone users in Japan).

 

Environmental factors also play a role in evaluating companies, including the concept of an economic moat described by Warren Buffett. While monopolies typically have significant moats, there is the risk of antitrust actions by regulators; thus, attention is often given to near-monopolies, market leaders, or brand leaders within a given industry.

 

Economic Conditions

At this level, outcomes are often unpredictable due to factors that are outside of our direct understanding or control. Here, analysts, economists, and fund managers frequently provide predictions (read: guesswork) based on available information, which may influence the analysis of the underlying tiers, i.e., environmental factors and financial statements.

 

Given the uncertainty, “guesstimates” (guessing + estimates) are generally made by referencing historical precedents and current data, though these assessments may not always be accurate. Some developments can be anticipated using macroeconomic knowledge—such as expecting interest rates to increase during periods of high inflation—while others, such as unexpected global events (e.g. COVID-19) or shifts in trade policies (e.g., tariffs), are more difficult to foresee.

 

Being adaptable in response to likely future changes allows for strategic decisions, such as applying associative investing methods (page 137-138 of the eBook), to potentially benefit from emerging opportunities.

 

Wrapping Up

 

The points above outline my general approach to FA, though my methods may vary based on the company, sector, region, or country being researched. While some FA tools and figures are standard, it is often tailored to each situation since perspectives and interpretations differ among investors.

 

Disclosure

The Bedokian is directly vested in Apple.

 

Disclaimer

 

Monopolies And Oligopolies

I remembered in my secondary school geography textbook there was an example of a bakery shop opening in a new town, which, for a while, had enjoyed good business since it had a captive market. Soon, a second one opened and half of the town’s population began patronizing it. Then, a third one started, and naturally some customers from the first two began to buy from it. By the time a fourth one was in business, the other three were lamenting at the newcomer on why he/she did not choose to open anything other than a bakery.

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Assuming the town’s population remains unchanged, the quality of the bakeries is the same and everyone takes bread or cake daily; the more bakeries there are, the lesser revenue/profit each bakery would get, ceteris paribus, which explains the frustrations of the first three bakery owners. In economics, this is called competition, where various firms are offering similar products and/or services to a (or a few) market or population.

 

Competition is good for consumers as it gives them a huge range of product choices. In an economic sense, there is price discovery where there are agreed-upon prices of products between buyers and sellers, thus making them reasonable. Conversely, there are market conditions called monopoly where there is only one seller, and oligopoly, where there are only a few sellers. 

 

While an oligopoly can be considered, to an extent, as competition, there are times where oligopolistic sellers would collude and fix prices that look fair on the surface, but they are not. Similarly, in a monopoly situation, the price of a product is determined on the whims and fancies of the sole seller, rather than free market forces. The collusion actions disrupt the price discovery mechanism and result in some distortions in the markets. This is why market regulators clamp down on such monopolistic and collusive actions to level the playing field and prevent extensive profiteering.

As consumers, we applaud the antitrust actions of regulators against monopolies and oligopolies to make product and service prices fair and affordable. On the other hand, however, as investors we prefer our equity holdings to be in monopolies and oligopolies because they reap in huge profits for shareholders. Very ironic indeed.

 

To make things more complicated, nowadays products and services are similar in nature but differentiated with one another, which also posed challenges to regulators as what is seen as antitrust by one party may not be seen as such by the other. For instance, in the 2024 lawsuit filed by the United States Department of Justice (DOJ) against Apple (and it is still ongoing), the DOJ alleged that Apple utilised its locked-down iPhone system to build a monopoly, to which Apple replied, among other reasons, that it did not possess a market majority to be claimed as monopolistic¹. Apple is correct in a way: as of October 2025, the Apple iOS market share worldwide was just 27%, and compared to Android, the other competitor in the field, stood at 72.59%².

 

From an investment standpoint, regardless of ideological considerations, shareholders in monopolistic and oligopolistic entities should remain cognisant of the potential impact from lawsuits and regulatory actions, as these factors may influence future profitability and operational stability.

 

Disclosure

 

The Bedokian is vested in Apple.

 

Disclaimer

 

1 – Feiner, Lauren. Apple files motion to dismiss DOJ antitrust lawsuit. The Verge. 2 Aug 2024. https://www.theverge.com/2024/8/1/24211386/apple-motion-to-dismiss-doj-antitrust-lawsuit (accessed 3 Nov 2025)

 

2 – Mobile Operating System Market Share Worldwide. Oct 2024 – Oct 2025. GlobalStats. https://gs.statcounter.com/os-market-share/mobile/worldwide (accessed 3 Nov 2025)

 

"Triple A" Results And Going Forward

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The past few days had seen the announcements of quarterly results for the “Triple A” companies: Apple, Alphabet and Amazon, with all three beating their revenue and earnings per share (EPS) estimates. Here are the revenue and EPS summaries for each company (Fig.1):

Company	Revenue (Actual, in billions)	Revenue (Estimated, in billions)	EPS  (Actual)	EPS (Estimated)
Apple	102.47	102.24	1.85	1.77
Alphabet	102.35	99.89	3.10	2.33
Amazon	180.17	177.80	1.95	1.57

 

Fig.1: Revenues and EPS of the three companies. All figures are denominated in United States Dollars (USD). Data sourced from CNBC.

In addition to surpassing both revenue and EPS estimates, the companies are signalling a positive outlook for the future. Expectations are high for increased revenues in the upcoming quarter and a potential rise in capital expenditures heading into 2026. This anticipated growth is primarily driven by the ever-expanding influence of artificial intelligence (AI) across products, applications, and infrastructure.

Alphabet and Amazon: Cloud Expansion and AI Investment

Alphabet and Amazon, alongside Microsoft, form the leading trio of global cloud providers through their platforms—Google Cloud Platform, Amazon Web Services, and Microsoft Azure. These companies have reported significant revenue increases in their cloud segments, with Alphabet experiencing a 34% rise and Amazon seeing a 20.2% jump. This upward trend, coupled with plans for substantial capital investment, underscores the projected growth of AI within their operations.

However, this rapid expansion has prompted some investors and analysts to voice concerns about a potential bubble forming in the AI sector, particularly noting the circular deals occurring among major AI players. Assessing the true stage of the AI lifecycle is complex, as factors such as technology, adoption, execution, and tangible outcomes often progress at different rates, sometimes leading or lagging each other. A key issue is whether the significant capital being allocated to make cloud services AI-ready will ultimately be accretive. Depending on how these elements align, there is a risk that the combination of factors could result in periods of over-supply and under-demand for cloud infrastructure, potentially triggering a "bubble popping" scenario.

Despite these concerns, longer-term indicators suggest that "AI is here to stay”. While AI technology has existed for some time, public awareness surged with the introduction of ChatGPT. This milestone sparked the emergence of additional AI-powered applications, some of which have already achieved success in user adoption and are likely to become significant sources of revenue in the future.

Apple: Regional and Product Segment Trends

While Apple has reported a year-on-year sales decline in the Greater China region and in the "Wearables, Home and Accessories" product category (such as Apple Watch and AirPods), other geographical segments and product lines are experiencing growth in revenue¹. The company remains optimistic that demand for the newly released iPhone 17 will help reverse the downward trend in Greater China during the current quarter.

Historically, the first quarter of Apple’s fiscal year—from October to December—has generated strong revenues, driven in part by holiday season sales, including the Christmas period. These seasonal factors typically contribute to an uptick in the wearables segment, which are popular as gifts.

Furthermore, improvements to Apple Intelligence, including the integration of ChatGPT, are expected to serve as a significant catalyst for Apple’s future growth, given the company’s vast installed base of devices and loyal users. While other brands have already introduced AI capabilities in their products, Apple’s strong customer loyalty remains a key factor likely to fuel the company’s next phase of expansion.

Disclosure

The Bedokian is directly vested in Apple, Alphabet and Amazon.

Disclaimer

1 – Apple reports fourth quarter results. Apple. 30 Oct 2025. https://www.apple.com/newsroom/2025/10/apple-reports-fourth-quarter-results/ (accessed 1 Nov 2025)