For the past decade, Isaac Chin has been a full-time investor after a career as a chartered accountant. “I didn't have an inspiring career as an accountant. Nothing great came out of it. If I have to work hard for a salary and put up with a lot of stress, I might as well work for myself - and earn more,” he said.
Now aged 63, he has reaped handsome profits from investing in property, equities and bonds. He travels regularly -- and his latest visit was to Spain. The country is, as we all know, part of the cause of the euro crisis and the people are taking big hits from austerity measures. We ask Isaac for his insights into the daily life he encountered there.
Q: What led to you visit Spain recently?
I thought I cannot miss Spain much longer, having heard so many wonderful tales about this country. I was curious to find out if 'The Rain in Spain falls on the Plain'. I was also curious to find out if the plain is turning dry as an economic recession sinks in.
Q: In your day-to-day sightseeing, what was the 'mood' of the places you traveled through?
My wife and I arrived in Barcelona on the morning 16/3/2012. The weather was sunny and the air chilly at 16 degrees C. This city was vibrant, tourists were everywhere, cameras in hand.
We saw MacDonald's, KFC, and Spanish coffee house everywhere, often full of customers. One could not feel the sombre mood of the Euro Crisis.This was also the case found in Madrid, the second biggest city in Spain.
Spain has a very rich history and culture, manifested in the Gothic architecture of grandiose palaces and churches -- these sites were swarming with tourists.
The media have reported a 50% rate of youth un-employment but this was not evident with the flurry of activities seen on the streets of Madrid and Barcelona.
Shopping crowds were common sights in big cities even though the shopping centers were not as modern and huge as those in Singapore, HK or Tokyo. City trains were normally packed and very often we had to squeeze our way through.
Even in smaller towns like Granada, Cordoba, and Seville life continued with no sign of desperation or despair which one would expect of a nation in great debt.
We saw large crowds of school children at places of historical interest, such as palaces and churches, often mingling with tourists. I did not notice any youth hanging around aimlessly during my entire trip.
I notice 'Sale' signboards put up at some properties but it was not an overwhelming sight. I saw a few shops shuttered -- and that was only on my last day in Barcelona.
Another sign of an economic crisis that we chanced upon was a transport union strike. Protesters were burning flags and throwing objects at shops in their fury.
Q: Could you share some basic info about your travel -- duration, cost of airfare, accommodation, land transport, etc?
My wife and I spent about S$5,000 each for a 15 day tour around Spain. This is a free and easy trip. We planned and booked our SIA flight 3 months in advance, paying S$3,600 for 2 front seats (at the exit with extra leg space).
We booked hotels through the Internet, costing about S$2,500 for the 15 days. The Euro train services were also booked through the Internet, costing about S$1,000.
Food, admission fees to museums etc made up the balance of about $3,000 -- or an average of S$200 a day of pocket money for both of us.
Finally, we completed our 2 week journey safely and happily, without any unpleasant encounter.
We devoted a whole morning to Plaza de Espana, Seville and a whole day to Alhambra Palace, Granada, without being burdened by the time restrictions usually imposed on group tours.
These are fascinating architectural icons, and we shot memorable pictures of ourselves there. In our travel, we did at times faced communication barriers as English was not widely spoken.
The MRT lines in Spain are more sophisticated than in Singapore. In free-and-easy travel, it is advisble to study the country's transport system carefully and meticulously. Travelling in Europe can be very pleasant and best in April and October.
Q: In particular, can you please compare the cost of eating out in Spain and in Singapore?
Singapore offers a wide variety of food -- Western, Japanese and our Chinese, Malay, Indian dishes. Having been to many countries in Europe, Japan, China, Australia, NZ, I have yet to find food so cheap and good as in our home country. A simple meal in Spain can cost up to 20 euros.
Q: Average property prices have plunged by 27% across Spain since 2007. On the Mediterranean coast, prices have nosedived by up to 70 per cent.
What might you do if you were an investor living in nearby Britain?
From 2000 to 2006, properties in Europe and US were soaring while Singapore properties under-performed.
The reverse is true today. In 2006-7, I bought 4 Singapore properties and I have made good profits since.
Hence, anyone with a long term view should invest in the depressed London property market now but not in Spain as the latter cannot measure up to London as a world financial centre.
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Comments
My Universit Professor once told me that financial leveraging cuts both ways- it can lift you to a higher level of wealth or it can also bankrupt you.
Like a Nanchak, it is a powerful weapon that can kill an enemy, but the user can hurt himself if he does not know how to operate it effectively.
So if we can all follow Isaac to tour Europe, I believe we will learn a lot.
Thanks for your insight and comments. Sincerely appreciate it.
Kenny
Why not go and study those companies and see if you can find comparables in Singapore.
These companies are in the right place at the right time. Many were not noticed by the big investors but their earnings have impressed enough for people like me to take serious notice about them.
Just my 2-cent view.
I have long said that I sold almost everything in my portfolio except for a few key holdings that provided me with sufficient dividend yields.
Somebody in the forum called me "nuts" for that.
Personally, I feel that this is a long winter. The EU is just delaying the impact of Greece departure so that when it actually happens, it will not come as a surprise and the market can absorb this bad news. If you read the problems in Greece, you will realise that the EU cannot offer any solutions to Greece.
Having said that, I suspect that there will be a very short, strong recovery in 2H2012 in the stock markets, as there are too much liquidity. When and how long can it last? I do not know.
Can you share with me your view on the equity market in the short to mid term.
What is your current stances now.
Meaning to say have you liquidate all your equity waiting in the sideline or you are accumulating now.
Thank u.
kenny
Thanks for your kind comment. I have always kept a balanced portfolio:- Fixed Asset: Liquid Asset = 1:1 My Liquid Assets are in Corporate Bonds,Cash,Good Dividend Stocks,and Insurance in equal proportions.
So it boils down to whether the entry level has a comfort zone big enough that you can tolerate. I expect small decrease from this level but expect bigger upsides in the years to come.