Bridge of Life School is a not-for-profit organisation providing free educational and community-based programming at rural sites in the Cambodian countryside.
I came to know about Bridge of Life School when my wife and I were in Siem Reap and went on a tour to the Kompong Khleang floating village.
What we saw during the tour was a true eye-opener.
The houses in the village were built on stilts and there were no proper living conditions for the people. It was a sharp contrast to the high-quality of life we have in Singapore.
Below are some photos of how the place looks like:
Outer view of Bridge of Life school
Inside of Bridge of Life school
Photo showing a few houses in the floating village
Outer view of a house on stilts
The profits from the tour are channelled towards Bridge of Life School, which in turn helps the people of Kompong Khleang floating village.
As you may have already guessed, the Covid-19 pandemic has really hit the tourism industry in Cambodia, which Bridge of Life relies on to sustain its programmes. For instance, Angkor Archaeological Park, which houses the world-famous Temple of Angkor Wat, saw its April 2020 revenue drop a massive 99.5%.
Furthermore, 2,865 tourism businesses in the country have been suspended or closed, affecting 46,369 employees. A report by the ADB estimates that Cambodia will suffer a US$850 million loss in its tourism sector.
Unfortunately, Siem Reap does not have a diverse economy — it is almost wholly tourism driven — and it has affected everyone in unexpected ways. Its residents, therefore, bear the brunt of the Covid-19 hurt.
Tour participation at Kompong Khleang Floating Village Tours declined 68% in March and 100% in April. The management doesn’t expect that there will be a recovery in the near-term.
As a result, it is experiencing a critical funding shortfall that is impacting the lives of so many vulnerable staff and their families.
Here is an official emergency appeal for financial support from Bridge of Life School.
If you would like to donate to Bridge of Life School amid this trying situation, you can donate via the link below:
This article first appeared on Seedly and is part of a content syndication agreement between FFN and Seedly.
In these tumultuous times, investing in the stock market may seem daunting.
With many stocks being battered down, they could be selling at enticing dividend yields, giving investors a massive headache when it comes to choosing the sustainable ones to invest in.
Should you pick StarHub Ltd (SGX: CC3), with a dividend yield of 6.3%, or choose Overseas Education Ltd (SGX: RQ1), which yields close to 10%? Or do both companies not make good dividend stocks?
How about Hutchison Port Holdings Trust (SGX: NS8U), which has a much higher dividend yield than say, Singapore Exchange Limited (SGX: S68), but may not necessarily make a good investment for the long-term?
So, to make things easier for dividend investors out there, here are three simple criteria for picking strong dividend companies that have the ability to withstand recessions.
Before we get to the steps, as investors, we must realise that not all dividends are created equal.
A stock that has a lower dividend yield may be a better dividend share than a company with a higher dividend yield.
A high dividend yield, as compared to its peers, may mean that the company is fundamentally weak and thus, has a depressed share price.
On the flip side, a low dividend yield does not necessarily mean that the company is a lousy one.
It may mean that the company’s share price has run up a lot due to its strong business.
So, instead of looking at dividend yields in a vacuum, we should focus on three other aspects of a company if we are investing in it for its dividends.
Those factors are:
Earnings and free cash flow growth
Dividend payout ratio
Balance sheet strength
Let’s explore why those criteria are more important than the headline dividend yield of a company.
1. Earnings and free cash flow growth
Firstly, dividend companies should exhibit stable growth in both earnings and free cash flow.
Earnings (also known as net profit) are what is left after a company pays off all its expenses, such as cost of raw materials, salaries, and taxes using its revenue.
On the other hand, free cash flow is cash flow from operations minus capital expenditure.
A company’s free cash flow shows how much money the firm has to dish out dividends to shareholders, buy back its shares, reinvest into its own business, or pay off debt (if any).
A company with consistently growing earnings and free cash flow over many years hints to us that it has a strong business, and that’s what investors want.
Such a company would also be inclined to pay out higher dividends as its business grows over time.
On the flip side, a company with falling earnings and free cash flow would be pressured to cut dividends or worst still, stop paying dividends entirely, to sustain its business.
An example of such a company is Hutchison Port Holdings Trust, whose earnings have tumbled over the years, and consequently, seen its dividends being slashed drastically.
2. Dividend payout ratio
The dividend payout ratio tells investors what percentage of a company’s earnings or free cash flow are paid out yearly as a dividend.
I prefer businesses that pay less than 80% of their free cash flows as dividends.
This gives enough margin of safety in case the business takes a short-term hit for any reason.
For example, if a company has a 50% dividend payout ratio, it would mean that free cash flow has to fall by more than 50% before dividend may be cut.
A 50% dividend payout ratio would also mean that there’s space for dividend growth in the future if free cash flow doesn’t grow as much, before a 100% dividend payout ratio is hit.
Some companies have a fixed dividend policy of paying out a certain amount of earnings as dividends.
For example, Valuetronics Holdings Limited (SGX: BN2) has a formal dividend policy of declaring 30% to 50% of its earnings as ordinary dividends each year.
On the other hand, companies that pay out more than 100% of their earnings or free cash flow as dividends may have to cut dividends to bring them to more sustainable levels.
An example of a company cutting its dividends is StarHub. It had to slash its dividends from 2017 onwards as they were unsustainable.
3. Balance sheet strength
The balance sheet reveals the financial strength of a business.
Companies with lots of cash and little or no debt have the financial muscle to navigate through tough economic conditions.
Such companies don’t have to worry about paying off exorbitant interest expenses when revenues get hit during tough times.
Banks hounding on their backs during a recession is the last thing that companies want.
As mentioned earlier, free cash flow can be used to pay dividends or pay off debt.
If a company doesn’t have loans to deal with, it can focus on things that matter, such as keeping shareholders happy with higher dividends or reinvesting into its business for further growth.
It can also use the opportunity to acquire other companies at cheaper valuations during an economic downturn, setting itself up for greatness when the economy recovers.
Parting Thoughts
I hope that you are now armed with the right knowledge to pick dividend companies that can withstand recessions.
Don’t get me wrong.
If companies possess all three criteria listed above, it doesn’t mean that their dividends are 100% guaranteed (nothing is guaranteed in investing anyway).
It just means that you tilt the probability of investing in companies that pay out sustainable dividends in your favour.
As cliche as it may sound, time has really flown past in a blink of an eye.
It seemed like just yesterday I was holding the fragile him right after he emerged out of my warrior wife’s womb.
I have been wanting to write this post for some time, but I just couldn’t get the time to sit down and do so.
But now, with the one-month circuit breaker measures in Singapore, I finally have some breathing space to pen my thoughts down.
Luckily so, the delay has been a blessing. I can weave in more stories and lessons that my son has opened my eyes to.
So, here are the eight things my son’s birth has taught me about life.
1. We were given an identity when we came into this world
We didn’t name our son until around after two weeks he was born. In his first few days of life on Earth, we had to bring him for a routine checkup at the polyclinic that all newborns go through.
At registration, the nurse asked me what my son’s name is. I told her he doesn’t have a name yet.
At that moment, I was hit by a huge realisation.
I realised that when we came into being, we were nameless and without any identity.
I go by the name of Sudhan, but before that name was created, I was “nothing”, or without any label.
It is by being given a name that we identify with it, and fight for that name to be heard.
Maybe it’s called the ego.
I came across an article, A Name Is Only a Label, on the internet that also mentioned what I felt then:
“Every child comes into the world without a name, but we have to give a name; it has some utility. It is absolutely false, but in a vast world with millions of people it will be difficult to manage if nobody had any name; it will become almost impossible to manage. Some names are needed; false they are, but they work, they have a utility. They have no reality, but utility certainly they have.
But ordinarily you grow with your name; in fact, you become conscious only later on. Your name is deeper than your consciousness, hence there arises an identity with the name. You start feeling, “This is my name, this is me.””
2. The meaning of the full cycle of life and death
My ammayi (grandma) passed away in 2014.
Upon seeing someone close to me pass on, I realised that we can’t bring any possessions with us when we expire. My grandma’s clothes were just left lying in her brown, wooden cupboard.
Whatever we have attained from this world (e.g. status, money, relationships, etc.), we leave it here when we go. There’s no point fighting over things that are temporary.
But I only fully understood the full cycle of life and death after I saw my son being born.
As I was heading to the MRT station a few days after his birth, I saw a funeral procession under one of the blocks.
At that moment, it hit me hard that when there’s birth, there’s death.
3. Trust the power of nature
For nine months, the foetus was gestating in my wife’s womb.
Every single month, there were changes to the size of the foetus and different organs were developing.
27 August 2018
All these were happening without our conscious input.
I couldn’t hasten the process, nor could I slow it down. Everything was happening at its own time.
So, we shouldn’t worry about life when things don’t go the way we want it to. We just need to trust the universe to give us the best.
If we don’t get what we want when we wish for it, maybe it’s not yet time, or maybe there’s something better out there.
4. Be in this moment
Babies are a joy to be with as they are always in this moment, not worrying about the past nor the future.
As I see my son play with his toys happily or randomly plod around the house, I get reminded that we should always be present and enjoy life as it is.
Before my son was born, I came across Instagram posts by my friends, who are parents, that babies grow up too fast.
So, from day one, I told myself that I should enjoy every moment of nurturing him, be it waking up in the middle of the night to change his diapers, showering him, or carrying him to sleep at 2am.
When he’s all grown up, he might not even have time for me, so I should enjoy every moment I have with him now.
Looking back, he has really grown up too fast.
I can’t get back those moments anymore, but I’m glad I was fully involved as a father during those times.
I was also lucky to be working from home as a freelancer so I could witness all his various milestones from birth to seven months (that was when I had to go back to full-time work).
5. Have a beginner’s mind
Babies are doing many things for the first time. What may be second nature to us is something brand new for them.
And since it’s super new, they see the world in awe.
That’s the beginner’s mind at play.
I realised I need to have the beginner’s mind when I live life to see things from a fresh perspective.
For example, when reading a book to my son, it might be boring for me, but with a beginner’s mind, I can see how babies see the world. I can then rediscover the world’s awe through him, and because of him.
6. It’s all in the mind
Before my son was born, I would get agitated and feel lethargic if I didn’t get my seven to eight hours of sleep each night.
After my son was born, especially in the first few weeks, I rarely got an eight-hour slumber.
But I was fine. I had the energy and drive to be present with my son.
So, those moments of feeling irritated due to a “lack of sleep” was all in the mind.
7. Always be resilient
When my son falls down or accidentally knocks against something, he cries for a while.
But almost instantaneously, he forgets about the pain and is all joyous once again.
During those moments, I get reminded about the power of being resilient.
8. Never, ever, give up
My son learnt to turn from his back to his front when he was around three months old.
It took many attempts for him to master that skill.
Many a time, he would just fall back to his back. But after many tries, he finally got the hang of turning in one fell swoop.
When he first started to learn to walk, he fell down numerous times on his bum (Huggies provides great cushioning!). But he just got up and tried again.
From those episodes, I learnt that we should never give up trying.
The following is a guest post by Joe Ng Boon Leng. You may contact him by leaving your comments below.
There are a total of 490 CPF stocks that can be purchased out of the 800 companies listed in SGX. Obviously not all the stocks are suitable for our investment. We have to identity which are the growth stocks.
For growth stocks, it must meet a few criteria: The stocks are not volatile which means even when the market is booming, they do not move much; and its fundamentals are strong (strong cash flow, low debt, etc); its economic moat is wide (will not easy for the competitor to duplicate or cut the price for their success); and there is demand in the market.
I shall touch on 3 counters as they have fulfilled most of the criteria that I have mentioned above. I own them and have been receiving the dividend till today.
First is the Straits Times Index Exchange Traded Fund. This is a capitalization-weighted stock market index that is regarded as the benchmark index for the Singapore stock market. It consists of a pool of 30 stocks that are selected to track our market. It is reviewed quarterly to determine changes to the constituents. The prices never depend on an individual company’s performance. Rather, it depends on the market. You can get around 3% dividend yield annually with minimum risk. A cautionary word is not to buy the STI when it is at 52 weeks high, P/E ratio is above 15 or when the annual dividend yield is less than 3%.
Second is Capitaland Commercial Trust (CCT). The company owns a series of commercial properties in the prime locations of Singapore. Why I choose this? Being a commercial hub with scarce land resources, location at prime area commands a good rental. For past decade, CCT always performs better than the market occupancy rate. Its average dividend yield is above 5%. Having said that, you would still need to review its financial report quarterly for any changes. The stock is worth buying when the stock price is lower than NAV and debt ratio lower than 35%.
Third is the Parkway Life Reit (PLife REIT). The company invests in hospitals and nursing homes. They have properties in Singapore, Japan and Malaysia. With longer lifespan, demand for medical needs/care are far shooting upwards, the dividend yield on the average is 4%. The stock price is normally above the NAV and debt ratio is around 35%-40%. Consider to buy the stock when it is at the lower end of 52 weeks price and there is no sudden increase in debt. Again, it is essential to review the quarterly report.
As the counters I recommended are more for dividend collection and long-term growth, please do not invest if it falls below the dividend yield I had cited.
Disclaimer: The above is only for educational purpose. Joe does not represent any company. Please invest at your own risk.
“Behind the Berkshire Hathaway Curtain” is a book authored by Ronald Chan. He is also the author of “The Value Investors”, which I once reviewed.
In Behind the Berkshire Hathaway Curtain, Ronald interviewed many of the stewards of the companies owned by Berkshire Hathaway. The Chief Executives and the firms featured in the book include:
Cathy Baron-Tamraz from Business Wire
Randy Watson from Justin Brands
Stanford Lipsey from Buffalo News
Barry Tatelman from Jordan’s Furniture
Dennis Knautz from Acme Brick
Brad Kinstler from See’s Candies
Marla Gottschalk from The Pampered Chef
David Sokol from MidAmerican Energy
Walter Scott Jr. from MidAmerican Energy
Some of the remarkable quotes from the book are:
True leaders who have been tested do not need to show off their abilities or create deals and “noise” for their company. They are the ones with discipline, solid business principles and a sense of team spirit that benefits the whole company instead of themselves. – Cathy Baron-Tamraz
Hard work is always required to succeed, but being curious and adventurous enables you to challenge and surprise yourself. – Cathy Baron-Tamraz
We are given two eyes, two ears and one mouth, so we should always observe and listen, and talk only 20% of the time. – Randy Watson
One thing I’ve learnt is that people do not care what you know until they know that you care. – Randy Watson
My job is to make sure that I have the right people in the right place, and then I stay of their way. – Randy Watson
Truthful advertistments sometimes outsell those that are manipulative and inaccurate. – Barry Tatelman
Do the numbers tell you the whole story? Yes and no! They tell you how a business is being operated, but they don’t tell you how it should be operated. – Dennis Knautz
The only thing I could do was to keep my head down, check my ego at the door, and work extremely hard to prove that I was capable of leading. – David Sokol
Life to me is a journey, not a destination. – Walter Scott Jr.
When things change, change along with them. Apat! – Walter Scott Jr.
A common thread in the book was that hard work and integrity are paramount if one wants to succeed in life.
Some of the leaders have also said that Buffett’s focus on the long-term, instead of short-term profitability, really helps them to focus on building their businesses. Brad Kinstler of See’s Candies quipped, “Warren looks at the long-term picture. Because he does not put us in the position of needing to achieve consistent revenue and earnings growth in all economic environments, we can shift our attention to the long term”.
Let me sign off with my most favourite quote from the book:
“When my father, Edward, passed away in 1980, everybody in town came to his funeral to pay tribute. He died without an enemy and money can’t buy that. Perhaps the number of people who attend one’s funeral is a measurement of success.” – Barry Tatelman
“Invest Lah! The Average Joe’s Guide to Investing” is now a Times Business Bestseller. A huge thank YOU to each and everyone for your continued support!
Below are some screenshots from the Times website:
A second reprint is already deep in the works. For more information on the book, please visit this page.
Once again, thank you! This would not have been possible without your support.
