Sunday, July 7, 2019

Apr - Jun update

The market is back to its high recently, especially with Reits choinging.

I don't hold a lot of Reits. Nonetheless, the sale of some some reit stocks gives me the headache of looking for better stock(s) to buy with the money. And it is hard to find undervalued stocks in current market.

In Apr - Jun  I bought
- Kingsmen Creative. It is a smallish stake, as I feel that its NERF may have some potential. But that remains to be monitored.
- HSBC. It is a smallish stake for dividends
- OCBC. It is also a smallish stake, as the price ran up to $11 before I could buy more.
- Serbia Dinamik. It is a malaysian stock in Oil and Gas industry that is surprisingly growing in last few years.
- Eagle Hospitality Trust. Buying at average 0.705, as its price drops from the IPO price of 0.78 and its dividend is expected to exceed 8%. The downside is that I will likely see the dividend next year.

I also added to my position on
- HRnet. Currently, I stop adding, as its next few quarters may not post good results due to the not-so-good economic conditions.
- Sunpower and Hang Lung property as price drops.

Sold the following:
- HKland. This is to take profit
- Fraser Commercial Trust at around $1.47 - $1.50. The sale was done at April before its run-up in late June.

Cut down my positions on the following:
- Tat Seng Packaging. Its 1Q results is not good
- Silverlake Axis. The sale is to take some profit and reduce my position to a more comfortable level of 7.3% of my portfolio
- AIMS AMP Industrial Reit. I have a remaining smallish stake in it.
- Acendas Hospitality Reit. Have sold some as $0.91 and $0.965 to take some profit. Likely to keep the remaiing stake for now as it is merging with Ascott Residence Trust

Monday, April 8, 2019

1Q 2019

2019 1Q is turning out to be a good quarter for most investors, including myself. My year-to-date returns is 14%, which more than make up for the 2018 lossess.

In the quarter, I benefitted from increasing stock prices of CSE Global (bought at average prices of $0.43) and Silverlake Axis. 

Main purchases are 
- CSE Global, as  I think its business is turning around and getting better
- HRnet, a business that has fantastic cashflow

- MyEG (Msia stock), whose business is turning around 
- George Kent (Msia stock), who has a good order book and strong moat in water meter business while it waits for Malaysia to re-start railway projects 
- Matrix Concepts, a township developer with good ROE and dividend yield

- Sunpower. Miss this stock when it was at its low late last year. 

Sold the following stocks
- City Dev. A small stake bought at $8.15 and sold at $8.90
- Roxy Pacifit. Cut the losses. Bought at $0.48 and sold at $0.40
- Cosco Intl Ship. Sold at close to breakeven price. While it has a lot of cash, I was spooked by its declining profitability in 2018.
- Hui Xian Reit. Sold at slight profit to reduce my allocation to Reits. The profit is not a lot in annualised terms

Reduce my position in following stocks
- Aim Amps Industrial Reit. Reduce to lower my allocation to Reits. 
- China bank stocks. Reduce by a third, as its profit underperform expectations

Seems quite a lot of activity in 1Q 2019.

Key lessons noted n this quarter are:
1 The best time to buy/profit from stocks are when the business are affected by poor sentiment, politics or temporary factors. 

2 For bonds, high yield are dangerous. This lesson is from Hyflux bonds and Lehmann minibond. Many people bought the bonds due to its attractive yield and good reputation. But the point is that if the business is that good and the bonds safe. why did the underwriter/professionals price the bond to offer a high yield compare to other bonds. If the bonds are priced to offer a high yield, then it most likely imply higher default risk. This was my thinking then when I encounter Hyflux bond and Lehmann minibond, and hence I did not buy any such bonds. 

Sunday, December 30, 2018

2018 Review II

This is the second part of 2018 review

4) Performance

My stock portfolio has -11.9% in 2018, which underperformed STI index (-7%). The reasons are noted in the earlier post, which is due to buying low quality stocks and not holding more cash when market is very optimistic.

Looking at my $1 invested in 2004 to 2018, my average return of the $1 in 2004 is 14.4%. However, on internal rate of return (IRR) basis (i.e. accounting for cash additions to portfolio at different time points), the IRR is 11.3% for 2005-2018.

I expect my IRR to drop in the future, as I am holding more Reits which is more stable but gives lower returns.

5) Portfolio Breakdown

Currently, I have 23 stocks. 26% are in Reits/trust, 23% in property stocks (exclude Reits/trust), 23% in China Banks and the rest in Others.

The Reits/trust are held for stability’s sake. I have bought more property stocks in recent months, as the property counters such as HK Land, City Dev and Hang Lung Property are trading at low price-to-book ratios. On China banks, I think that they are trading at low valuation and hence they are kept in my portfolio.

6) Outlook and plans

I think the market may get lower in 2019.

Currently, I am 55% stocks and 45% non-stocks. If STI fall to 2,900, I will increase my stocks percentage to 60%+. If STI falls to 2,700-2,750, I will increase my stock percentage to 65%+.

Sunday, December 9, 2018

2018 Review I

This will be first part of 2018 review.

1) Cutting away low quality stocks

I have been selling off low quality stocks such as the following:
- AusGroup: has high debt
- Geo Energy: I think it lack a moat and takes on unneccessary debt

This is to get back cash, so as to re-deploy to more stable or better stocks

2) Buying low quality stocks at the market peak

AusGroup and Geo Energy were bought at the start of the year, when the market is booming. I think the purchases stem from the following reasons:
- my want to deploy the cash from Cogent privatisation
- my unwillingness to hold cash
- my lowering of standard amid the market peak/optimism.

In future, I should strive to hold more cash and be less willing to buy stocks when market is optimistic, especially when the market has been rising for 2 years.

3) Be willing to be not fully invested when market is very optimistic

I knew that the market was very optimistic during late Jan, as the prices of my stocks were rising almost everyday and the market has been rising for past 2 years in 2016 and 2017.

In future, when similar market conditions arise, I should be more wary and start to hold more cash. This will help to soften the market downturn subsequently.

Saturday, July 7, 2018

Negative Returns as at 6 Jul 2018

On 6 Jul 2018, STI has a large drop of 64.9 (1.99%), largely due to the property cooling measures announced by the government.

And, my stock portfolio has become more negative than STI currently. The more negative drop is probably led by the drop in my HK counters due to US China trade wars.

STI ETF Returns to date : around -4.6% incl dividends
My portfolio : -5.8%

During May - early Jul, I sold the following counters:
- ESR-Reit: Sold the remaining ESR-Reit
- Valuetronics: Sold at 0.79, as it dropped from 0.8x and it seemed safer to take profit first.
- Cosco Shipping Port: Sold at loss of -15%. It is sold partly to cut loss and partly to raise cash
- ETFs in HK: Sold to raise cash.

I also bought the following:
- ABC, BOC and CCB: Added to my positions as their prices drop. I continued to like China Banks.
- GSS Energy: A new position bought at $0.151. Its current price is 0.136, so I'm suffering a 10% loss here. Bought it as it seems undervalued if it could develop its Oil and Gas business
- Yanlord: Added more shares at $1.6, $1.58 and $1.50  to my existing position. I continued to like the stock, especially it's CEO has continually bought shares in this stock.
- Tat Seng Packaging: Added more shares at $0.69

Moving forward, I will add on to my positions if the market corrects further. I may also sell off the smallish positions to raise cash, so that I have a larger cash pile to buy stocks if market corrects further.

I will also exercise patience in buy stocks, as the market correction from its Jan 2018 may have legs to run. The last corrections in STI are in Jan-Oct 2011 and Apr 2015 - Feb 2016; both lasted 9-10 months before hitting the low.

Thursday, May 10, 2018

Some thooughts on Investing

Tactical Trades

I found myself doing 2 tactical trades lately. I define tactical trades as positions expected to be sold in around 6 months.

The first trade is Singtel, bought at $3.36 and sold at $3.53 yesterday. The second is Valutronics, bought at $0.69. I am hoping to dispose of it at $0.9, if possible.

Both trades are smallish position, unfortunately. I do not have the conviction to buy more, as I do not know if they may drop further at time of purchase.

Variant Perception

Variant Perception, if not wrong, is coined by Michael Steinhardt in his interview many years ago. The idea is to have different thoughts about a stock compared to the general market and hence profit from it.

The above 2 trades seems to illustrate variant percenption somewhat, as at the point when I purchase the stock, I was thinking that the stock price is too low and its outlook may be more favourable than what the market thoughts. Of course, I may be wrong and hence I keep the 2 trades small.

Earning Dividend while waiting for price to close

My recent purchase of Acendas Hospitality trust somewhat reflects the above idea of earning the dividend while waiting for price to reach NAV value. If the price does not increases, at least the dividends will offset my opportunity cost of having my money lock into the stock. Such ideas tend to be low-risk but also low-return.

$1million getting smaller and smaller

Lately, I have been thinking that $1 million dollars is getting less meaningful as it has been getting smaller and smaller. I recalled that when I read the books published many years ago (e.g. Think and Grow Rich published in 1937), such books gave the idea of $1 million being very big and very hard to acheive.

Nowadays, you can see blogs on FIRE having $1 million or a couple of $million. $1 million is really getting smaller and smaller.

Thursday, April 26, 2018

Quick Update

Some quick thoughts

Valutronics dropped 17% today from 0.90 to 0.74. Wow. Not sure why it dropped so much. I do not have guts to catch such dropping knife, as I am not sure if there is any fundamental reasons behind the drop

Recently, I think I am quite enthusiastic on Reits. Not sure why.

Sold down ESR-Reit quite a bit due to the unexpected low DPU.

Have been buying Ascendas Hospitality Reit, as it is trading below NAV and has potential of increasing DPU after its Australia residence is developed in 2019.

Also, sold down 500 DBS shares at $29.64. Left 1,000 shares. May sell another 500 share at around $30.50.

Added more Bank of China (BOC). I have stocks on BOC, ABC and CCB. I have more ABC and CCB. So as I want more exposure to China Banks, I added to my BOC position.

Tech crash!? Does not really affect me, as I do not own any tech stocks as it seems.

First Ship Lease Trust, Own it two to three years ago, but sold to cut loss thereafter. Was thinking that it could be a good asset play if it can pay off its debt. But it seems that I under-estimated the impact of debt has on its asset. Looks like I have to be more careful on turnaround stocks with high debt.

Talking about turnaround stocks, I have Ausgroup. This is another stock that I have no idea why its share price manage to gain back the losses after its share price dropped due to share placement. Anyway, I am still holding on to the shares.

Apr - Jun update

The market is back to its high recently, especially with Reits choinging. I don't hold a lot of Reits. Nonetheless, the sale of some s...