Saturday, May 27, 2017

Portfolio Returns

Year

% Returns

STI (Excl Dividends)

Remarks

2004

6%

2005

35%

Returns/Declines boosted with slight leverage.


2008: Great Recession

2006

130%

2007

46%

15%

2008

-70%

-49%

2009

147%

64%

2010

78%

10%

2011

-46%

-17%

Declines in S-chips and excessive concentration into 5-6 stocks

2012

25%

21%

2013

15%

-1%

Diversified into 19 stocks

2014

8%

6%

2015

4%

-14%

Oil & Gas crisis

2016

19%

4% (incl div)

2017 May

19%

12%

 

Saturday, May 6, 2017

Bull Market, Buying Reits

It is a bull market this year, with STI (Strait Times Index) up 12.1% year-to-date.

Bull market implies, in general, more expensive valuation. I find that the current stock market are quite close to full-value and I expect lower returns down the road. 

As stocks are close to their full-value, it is getting harder to find good stock ideas.

I have sold some stocks recently i.e. FCL, Lian Beng, as mentioned in earlier posts, and thus have some capital to deploy.

The capital are used to buy two reits: SoilBuid Reit (SBR) and Far East Hospitalality Trust (FEHT). Personally, I don't like to own reits, as reits generally have high price-earnings ratio and we are in rising interest rate environment. However, due to the lack of ideas, I have to settle on reits.

SBR and FEHT are bought with the possibilty of 'turnaround' in dividends.

For SBR, its Loyang Way premise is 90% empty now, as it was vacated by an O&G company last year. If it manages to lease out the Loyang Way premise in the next 2-3 years, there will be some upside to the dividends and hopefully share price.

For FEHT, the idea was from 3Fs (A Path to Forever Financial Freedom) blog, who bought CDL Hospitality Reit (CDLHT) and FEHT, in anticipation of the turnaround in hotal room rates in 2018 or later. I have bougth FEHT, but not CDLHT, as CDLHT has run up quite a lot this year. FEHT is around $0.61, not far from its 0.58 low.

SBR and FEHT are low risk, low return ideas to me. You get paid for waiting for the turnarounds. If the turnaround don't happen, you still get your dividends. If the turnaround materialise, you get some capital gains. Of course, I may still lose money in SBR and FEHT, if their operating results are worse than expected. 




Sunday, April 9, 2017

Accepting what the market gives you

I am on investing note platform. Recently, investing note has a few post noting the possibility of market correction, and taking steps to prepare for the possible correction (e.g. buying low beta stocks at 52 weeks low, holding more cash).

Personally, I don't know if a correction is near. The market current seems more optimistic than in the past few 12 months. But, this was the market that fell from its high of STI 3,500 in 2015. Will more optimism lead to correction? No idea. I do note that the world economy is in a better shape now compared to last year, and the stock market reflected this.

Instead of preparing for correction, I will try to accept of what the market gives me and act accordingly.

If the market rises a lot and benefit me, so be it. As the market rises, more stocks may reach my target prices and I will start to reduce my position in them. In addition, I will be unable to find stocks meeting my criteria to replace the sold position. This lead to me holding more cash, if the market rise.

If the market corrects later and erase my gains, so be it. As the market fall, I may find new stocks meeting my criteria or average down on my stock holdings and hence increase my stock position. Currently, including CPF, I am around 60% in stocks. Thus I have ample funds if I am to buy more stocks.

Wednesday, April 5, 2017

Selling Developer Stocks

I own 2 property stocks sometime this year. One is Fraser Capital Limited (FCL), the other is Lian Beng. The position in each stock is not large. (It is around 2.5%-3.5% of my portfolio).

FCL was bought last year in July at around $1.50.  Last month, I sold it for $1.72, as it rose by fair bit, after the Government announced cooling measures on the property market. I sold it because I thought that the cooling measures do not really affect the property market. On hindsight, it seems that I sold too early. FCL traded at $1.765 today.

Lian Beng was bought some time in Jan this year at around $0.48. I bought it due to its low price to book value of 0.45. Some forumers have concerns on its high debt to equity ratio. I think that the high debt is mitigated by Lian Beng's diversified property portfolio and its prudent overseas ventures helps. (i.e. Lian Beng join other developers on overseas projects.)

Yesterday, Lian Beng run up by a fair bit and I sold it at $0.62 today. The run-up seems to be due to its 10% stake in Gaobeidian. I think that the 10% stake seems rather minor and may not affect Lian Beng's value a lot. Hence, I take the opportunity to sell it today. If Lian Beng falls below $0.50, I may consider buying it back.

After selling FCL and Lian Beng, I no longer own any developer stock. This is fine with me, as I find developer stocks hard to value. This is also why my position in property stock will not be large.

Saturday, February 25, 2017

Clearing deadwoord, buying back

STI has rose 8% in the first two months of 2017. Given the rise, it's harder to find stocks at prices that I like.

I had been selling some stocks, as its fundamentals has weaken. The sold stocks are Singapore Shipping (a stock that I should sold earlier), FSL Trust (after the CEO quit incident) and Kingsmem Creative (sold half, after its poor results).

In the mean time, I bought some shares in Lian Beng, as its price to book is quite low. The position is not large, as I do not like investing in property counters and I am not good in investing in them. 

I also bought back some stocks in China Aviation Oil (CAO) after its release of its FY 2016 results. Its FY 2016 results are not bad, but the stock valuation is not terribly cheap either. Nonetheless, I like the fundamentals of CAO i.e. sole aviation oil importer in China, a stake in refuelling company for Shanghai airport and expanding its presence to other countries. It seems that CAO is expanding its presence in US in 2015 and Middle East in 2016. 

Saturday, December 31, 2016

2016 Returns

2016 Returns

My stock portfolio returns this year is +19%, beating STI returns (excl dividends) of 0% and the STI returns (incl dividends) of 5%  (based on STI ETF as at Nov 2016)


The returns are largely due to 2 stocks: China Aviation Oil (CAO) and 800 Super. (I am still holding 800 Super in my portfolio, but I no longer hold CAO. I may buy CAO again if the price drops.)

What I aim to do in 2017

As mentioned earlier, I aim to inject funds into my stock portfolio such that my stock-to-cash ratio will be 60-65% in 2017, as the opportunity cost of cash -- i.e. returns if invested in stocks -- is significant.


In 2016, I have steered my portfolio towards GARP (Growth at Reasonable Price) stocks. Hopefully, I can continue to find GARP stocks to buy in 2017. It is quite difficult to find stocks with quality and growth at reasonable price. 


If possible, I should set aside a portion (maybe 5%-10%) of my portfolio towards buying stocks which had fallen a lot, market is very pessimistic about, but the problems are temporary and the stock has a chance of recovery. Thereafter, when I had bought the stock, I should die-die hold the stock for 2 years regardless how low the stock fall. This is something I may do, if I can identify such stock in 2017. 





Monday, December 26, 2016

Some Thoughts on 2016

2016 is a good year for investing; ditto for 2017

STI was quite negative in 2015 and dropped more in the first 2 months of 2016. If one has bought heavily at the start of year, one would have make a fair bit in 2016. I would say that 2016 is relatively good return year.

2017 is an unknown. US interest rate may rise more rapidly in 2017. Oil price may recover or remain stagnant, while Singapore Oil & Gas stocks may remain unchanged. The property prices in Singapore may slide further due to higher interest rate and slow Singapore economy. I guess that the above possibilities are know. How much they are priced into the current stock prices is an unknown to me.

Buy when the market is most pessimistic, but I was unable to do it

In 2016, there are two points where I wanted to buy Oil & Gas stocks.

The first time was when Keppel fell to below $5. I did not buy, as I was waiting for $4.

The second time was when Ezion fell to $0.25. I did not buy, as I did not want to take the risk in betting that Ezion will not face caskflow problems.

In both cases, the market was quite pessimistic on Oil & Gas stocks, but I was not able to take advantage of it.

Maybe, I need to set aside some portion of my portfolio for such situations and just buy the stocks when I start considering the purchase. Then I will hold such stocks for 6 mths to a year or until they rose to a certain point.

Stock-to-Cash Proportion

Currently, I am 57% stocks and 43% Cash/CPF.

I aim to up the stock proportion to 60-65% stocks in 2017, as the opportunity cost of cash -- i.e. returns if invested in stocks -- is significant.

Unwillingness to take certain risks

Sometime ago, the blogger of "A Path to Financial Freedom" explained why he bought CDL Hospitality Trust. He felt that the bad news had been factored into the share price. And while the revpar (average revenue per room) will be low in 2017, it should recover in 2018 or thereafter.

I can understand the blogger's reasoning but I did not follow to buy the stock. This is because I am not sure if the revpar will recover; I am not sure if the visitor arrivals to Singapore will continue to grow. And will more visitors to Singapore choose the less expensive option of staying in Malaysia and travel to Singapore for day tour?

This tells me that I looked for more certainty in my stocks. Not sure if this is a good thing, as the returns are lower when you desire more certainty.