Buffett’s Paramount Stock Holding Languishing- Despite 3 Offers

Contributed By: The Big Fat Whale

Despite 3 offers for Paramount Holdings, the stock has been languishing. This is one of the holdings of Buffett’s Berkshire Hathaway.

We have touched on Paramount in our previous write-up, where we think that it is worth being on your shortlist due to its valuation. Truth be told, there are now 3 offers tabled for Paramount after our article. We would like to think that is where great minds think alike.

3 Offers for Paramount Holdings

First and foremost, at the current price of 11 dollars, it has a market capitalisation of 7 billion dollars.

It has total debt of close to 15 billion dollars with 2.5 billion dollars in cash.

Skydance Offer

Skydance is led by David Ellison who is the son of Larry Ellison.

Their initial involvement was by trying to acquire National Amusement which owns 77% voting class stock.

This latest offer seems to be taken most seriously as they are currently in an exclusive discussion. Based on the grapevine, it could very well be a merger with an eventual cash infusion by Skydance to bolster the financials to deal with the debt situation ( Paramount debt was recently downgraded to junk status by S&P) based on a Reuters newsflow.

The deal seems more complex with Paramount raising funds to the tune of 3 billion dollars to facilitate this whole transaction. This sounds more like equity fundraising which could lead to a dilution of existing shareholders. Paramount would be the party to initiate the first move by taking over Skydance.

For this deal, the stock is to be continually listed and things would be back to normal with the majority of their assets intact.

There would likely not be a windfall for shareholders through a buyout offer with this deal.

Skydance will try to nurse Paramount’s business back to its glory days. They could be the right partner as they have been collaborating with Paramount from 2009 to 2021.

We can see why this is the preferred deal as Paramount assets are currently depressed. To sell off the assets in such a situation would be less optimal.

Moreover, their debt woes would also affect their negotiation chips.

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Are Singapore REITs a Buy Now?- With Fed Potential Pivot

Contributed By: The Big Fat Whale

Many investment bloggers have touched on this topic given that the Singapore REITs have fallen by almost 30% from their mid-2021 peak. Is it a buy now?  Given the recent Fed guidance of a potential pivot to lower interest rates.

Frankly, the Fed has been flip-flopping but the all-important inflation numbers are at an almost ideal level of around 3%. It is still short of the 2% target but things seem to be under control.

REITs have been the bellwether for lots of retail investors given the perception of it being a safer instrument than true blue stocks. The attraction is that mandatorily, they have to pay out 90% of their income to shareholders as dividends.

Moreover, given that they are tangibly backed by shopping malls and industrial and commercial buildings, it added the assurance that their investment is not riding on some fads and whatnot.

 

SREITs Current Climate

They were doing well during the low interest rate environment which lasted since 2008 (Great Financial Crisis) and were stable in price fluctuations. The recent price drop would not be something that investors are used to. It is back to their Covid 19 lows or for some REITs, they set record lows.

With the Covid situation, it is understandable why REIT prices plunged as everyone is in locked-down mode, which will affect the rental situation in shopping malls and office buildings.

Source: Yahoo Finance

This time around, it is due to the rapid escalation of interest rates. In April 2022, the Fed rate was still hovering close to zero per cent and is now at the 5.5% rate. With the potential pivot hinted at by the Federal Reserve in  November 2023, it saw a renewed interest in REITs- the REITs index appreciated 15%. Prices have since retraced close to their all-time low due to the market perception of the credibility of the pivot.

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https://thebigfatwhale.com/are-singapore-reits-a-buy-now-with-fed-potential-pivot/

 

Retire in Style in Thailand for Singaporeans- Bangkok n etc

Contributed By: The Big Fat Whale

After our previous article on retiring in Johor Bahru for Singaporeans, we bring to you the idea of retiring in Thailand for Singaporeans in style.

It has been a choice weekend getaway to Bangkok for some retail, massage and food therapy. Or we could laze around on the pristine beaches of Phuket or Krabi. Not forgetting the charm and rustle of Chiang Mai and Hua Hin.

I guess the usual mirage of chilling by the cafe and having a laid-back retirement in a paradise setting is just such a nice picture of how we want to retire.

If we are still on to some online gigs or even trading and investing in the markets, it would be a good source of additional income while retiring.

Not forgetting the cost of living would be much lower than Singapore, which this article will be looking to unravel through the subsequent sections of this article.

Thailand is just a short air flight but in terms of distance, it would not beat JB which is a short MRT ride. Therefore, to have a full-time job in Singapore while staying in Thailand would likely not be a viable choice for those under employment.

 

Retirement Visas for Thailand

Before we can apply for a retirement visa, you have to be 50 years of age. So for those who have FIRE in their 30s, you might have to explore other options to have a long stay in Thailand (30 days for a normal trip based on Singapore’s visa exemption).

The applicant has to meet one of the following financial requirements:

• Hold a deposit of no less than THB 800,000 in a Thai bank account for at least 3 months.
• Receive a monthly income (including pension) of at least THB 65,000. As proof of monthly income, an affidavit must be obtained from the applicant’s embassy or consulate in Thailand.
• A combination of bank deposit and a yearly income of no less than THB 800,000. As supporting evidence, an updated bank book or letter from both the applicant’s bank and embassy must be submitted

Other documents that may be required to be presented:

• • Police Clearance
  • Medical Certificate
  • Health Insurance

The visa is valid for 1 year and is renewable after that. There is also a report to be made to the immigration office every 90 days to update them on your residence in Thailand. To apply for the retirement visa, you must first apply for a 90-day visa and stay in Thailand for 60 days before you can submit your application.

Not too sure about yourself, but I certainly feel this process could be smoothen out as there seem lots of administrative matters. Moreover, it is just a 1-year visa unlike Malaysia which is granting a 10-year visa.

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https://thebigfatwhale.com/retire-in-style-in-thailand-for-singaporeans-bangkok/

Traders Zone: Forex Outlook- EUR/USD Poised for more Upside?

Contributed By: The Big Fat Whale

The news of the week has been the Fed's decision to hold the Fed Rate unchanged, and more importantly, there could be a pivot from their policy (ie: a possibility of rates decreasing). 

However, with inflation still hovering around 4%, that is short of their 2% target. Thus, our view is that the Fed rate should not see a huge drift and would be stabilising at current rates perhaps till the end of the year.

For this forex outlook, our focus will be more on analysing the technical analysis of the major pairs to highlight trading opportunities for the week ahead.

 

EUR/USD Charting Analysis

Source: Investing.com

We look at the 4-hour chart for the EUR/USD, it seems there is a possibility for further upside for the week ahead.

We will be hunting for entries around the 1.065-1.07 region with a stop at 30 pips which is in line with the Average True Range. 

The hint of not only a pause in the hike of the Fed rate but a potential pivot has driven the surge in EUR/USD. They have successfully broken out of their consolidation range for the month of October.

Our target for EUR/USD for the week ahead will be 1.078-1.08 region.

 

USD/JPY Charting Analysis

Source: Investing.com

Our view of USD/JPY is that the uptrend is still intact. It is indeed a good time to be going to Japan for holidays given the weakness of the Yen. The last time Yen was this weak against the USD was in 1990.

As long as the 148 level holds, we will be looking to place trades on the long side. 

A reversal of the trend would need to see a convincing break below the 148 level.

 

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Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. The content is not directed to any investor or potential investor and may not be used to evaluate or make any investment. Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stockbroker or financial advisor.

Retire in Style for Singaporeans in Malaysia- Johor Bahru

Contributed By: The Big Fat Whale

We believe that the escalating costs in recent times have really made us wonder if retirement is even possible. Do we have to work till much older than the legal retirement age of 63 years old? Are we able to retire in style?

Therefore, quoting from Bruce Lee, we should: "Be like Water", adapt to the conditions and be open-minded about the options available. We can create a greater lifestyle, lower our cost of living and embark on an incredible adventure.

With a lifestyle arbitrage, using the same amount of retirement funds, we could stretch our scarce funds or have an upgrade in living standards.

We decided to start a retirement series with Malaysia as our first coverage.

Our focus will be retiring on Johor Bahru as it might be one of the more viable options for Singaporeans. Other popular spots in Malaysia are Penang, Kuala Lumpur and Malacca.

 Malaysia Long Term Visa

So for a start, we will look at the requirements for a visa to have this sort of living arrangement.

For Singaporeans, there is no need for a visa if you do not intend to stay for a period exceeding 30 days. So in theory, you just have to clear the customs every month in order to renew your 30 days.

We are not sure if there will be issues if you keep crossing the border especially if you are still working. There could be a need for you to pop by your office a couple of days a week.

From the interviewees from this article by Channel News Asia, Work from home in JB: Some Singaporeans are relocating amid border reopening, hybrid arrangements, it seems there should not be too much of a problem with regards to not obtaining visas for Singaporeans intending to embark on this lifestyle.

Nonetheless, for those who want everything sorted out and be by the book, there are two visas that you could find applicable:

 

Malaysia My Second Home Program

To qualify for this program, the applicant must have liquid assets of at least MYR500,000, a monthly regular income of at least MYR10,000 and make a fixed deposit in a Malaysian bank of MYR300,000, half of which can be withdrawn to buy a house, purchase health insurance or pay for their children’s education.

After two years, part of the deposit may be withdrawn to use the car purchase concession, as long as a minimum balance of MYR150,000 is maintained during the entire stay in Malaysia under the program.

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https://thebigfatwhale.com/retire-in-style-for-singaporeans-in-malaysia-johor-bahru/