Sunday, December 31, 2017

2017 Returns

2017 Returns


My stock portfolio return is 33.6% in 2017, beating STI return of 21% (which incl dividends). 

(The 33.6% return refers to the return of my 60% allocation to stocks. It exclude the 40% non-stock which are in different (mental) account.)


Dividends provide 2.77% return; hence my return mainly comprise of capital gains. This is not surprising, as I don't consider myself as an income investor. 


As at end 2017, my stock portfolio has 25 stocks. The 2 stocks with largest stake are Cogent and DBS; both comprise 10% each in my portfolio. 


Sales


In 4Q 2017, I sold the following Singapore stocks

- Dutech: I sold all my stake in Dutech at a loss, as I think that Dutech results may not improve in the short term.


- Nordic: I continue to pare down my position in Nordic to reduce my portfolio allocation to this stock


- DBS: Sold a small portion at $24.90. This is also to reduce my portfolio allocation to this stock


I also sold a few stocks listed in HK. 


Purchases


- Aimamps Reit: I bought this in Oct 2017, before their placement announcement. Hence, this position is at a loss currently.


- Roxy Pacific: Added to my stake in Roxy, after the positive DBS analyst report. 


- Cromwell Reit: Bought smallish position at around 0.54 euros on average. This is bought for the dividend yield


- Ausgroup: Bought at 4.2cents, so this is a losing position now. I am treating this as a turnaround. If it manages to turnaround, its share price should rise way above 4.2 cents. If no, then I am prepared to lose a large portion of my stake here. Hence my position here is a small part of my portfolio.


- Fraser Commercial Trust: Bought at $1.44. This idea is from Kyith at Investment Moat, as he has bought into it in Dec 2017. To me, this reit has the possibility of some dividend growth 5 years down the road. And its annual report shows that the management has a record of growing its dividends. 


I also bought some HK stocks, mainly China banks. 


What I am looking at in 2018


I will continue to add to my positions on China banks if their prices fall. So far, China banks comprise less than 15% of my portfolio. For diversification purpose, my self-impose limit for China banks is 20% of my portfolio.

 

I will also be looking for reasonable Reits to buy. I will exclude Reits with less than 6% yield. A possibility is Cromwell. I probably will not add to my position in Aimamps Reit and Fraser Commercial Trust, which comprise 6% and 4% of my portfolio respectively. I view Reits as 'place-holder' to soak up, as I think it is hard to find good stock ideas in 2018 and I want to stick to 60% stocks allocation where possible. 

 

 

 

Sunday, December 24, 2017

Thoughts on 2017, Part 2

Everyone is positive on 2018's returns

I looked around at other people's view of 2018. Most, if not all, feel that 2018 will be a positive year but the returns will not be as good as 2017's. 

I also feel that 2018 should be positive for stocks. But I am more cautious when everyone feels the same way. Usually when everyone feels the same way, things will turn out different.

Hedging against errors in viewpoint

It is possible that my views may turn out to be wrong. E.g. I did not expect 2017 to be a such a good year for stocks. Hence, one may need to hedge against the possibility of having wrong viewpoints. 

For investors, hedging against wrong viewpoints can be done by 
- having margin of safety in buying stocks 
- having fixed stock-bond/cash allocation 
- selling half of stocks when stock rise 100%.
- diversification i.e. having more stocks in your portfolio. 

Re-learning my selling rules

This year, I have not abidded my selling rules faithfully. When bad news hit a stock, I should have sold 50% or the whole position. Instead, in one instance where a profit warning hit a stock and the stock fell to $1.50, I decided to wait for more details on why the profit decline. In the end, the stock dropped further and I sold the whole position at $1.20. 

In 2018, I need to learn to sell more ruthlessly when bad news hit. 

Lower expectations on yield of reit

Two years ago, I will need yield of reit to be 8%-9% and potential for yield to grow before I become interested. 

Now, I am buying Fraser Commercial Trust which yeilds less than 7%. It is harder to find reits with higher yield, except industrial reits. And I have some cash to deploy into stocks. Lacking in stock ideas, reits is an acceptable 'placeholders' to put my cash in.





Tuesday, December 12, 2017

Thoughts on 2017

2016 was a good year for investing; ditto for 2017 2017 is better

Yes, 2017 is a better year than 2016. STI is up by more than 20%, while my stock portfolio returns is around 30%. As the year is coming to an end, the returns should be more or less as it is now. At this point last year, I was expecting higher interest rate which will affect the stock market. Well, my prediction was off

Stock-to-Cash Proportion -- around 60% stock: 40% cash

I manage to roughly keep to 60% stock for most of the year, after using some cash to buy stocks at the start of year. Currently, my stock allocation is lower than 60%. I aim to pull it up to 60%, even though the market is not cheap. This could be tough, as I may have some stocks to sell.

Banks -- I like

10% of my stock portfolio is in DBS. At the middle of the year, I was aiming to sell DBS at $25. Now, DBS has reached around $25 and I have trimmed the position a little only

I feel that DBS (and other Singapore banks) may have some way to run, if interest rate rises. Higher interest rates, the lack of O&G negativity and improving economy should benefit banks. 

I also plan to add to my positions on China banks such as CCB, ABC if their stock prices fall further. 

Bye Cogent

I have accepted Cosco offer and await to collect $1.02 per share for my Cogent stocks. It is a pity that a growing company was purhcased by Cosco. 


Expectations for 2018

I expect muted returns for 2018 after a stellar 2016 and 2017. While the global economy is improving and sentiment is good, stock valuations are not terribly fanastic. Of course, I may be wrong. 

Either way, I will aim for 60% stock allocation despite my 2018 outlook. 

I also expect 2018 to be an interesting year for CDG. I am not vested in CDG but it is interesting to follow on CDG stock performance, especially since CDG's taxi business is in a fluid position where many things could happen. 

I am also of the view that offshore oil & gas may not see much recovery in 2018. Oil & gas cycles tend to have very long duration. 



Friday, September 22, 2017

China Banks, Trimming down Position


Stock Idea: China Banks

I have been buying China banks like China Construction Bank and Bank of China recently. In the currently slightly expensive market, China banks still have low PE and low P/B, notwithstanding doubts on their credit quality. I may continue to accumulate if their share price drop.

Trimming down positions

I have also been trimming down my positions in Aug - Sep:
- Sold a portion of 800 Super. After the sale, 800 Super is around 2% of my portfolio. 800 Super will start to operate the WTE plant at end 2017. Will wait to see how much the plant will help the bottomline.

- Sold my entire position in Soilbuild Reit after it announced its lease issue with NK Chemical. Soilbuild Reit's position is not large, around 2% of my portfolio. The sale carries a small profit as I bought the Soilbuild Reit at $0.66.

- Sold half of my stake in Ping An and 1/4 of my stake in CM Bank. The money from the sale are used to buy the China Banks

- Sold a smallish position in Nordic. Can't resist taking smallish profit as its price ran up. After the sale, my stake in Nordic is still around 9% of my portfolio

Thoughts

Cogent is finally running up. I have been accumulating around $0.80 this year. I think its management are smart and prudent in the use of capital. They gave out some dividend recently so as to return the cash they may not need. I saw business that hoard cash; business that don't hoard cash are rare.

Many people have commented on Comfort Delgro (CDG). Long story short, CDG taxi business is disrupted by Grab and Uber. Profits from taxi business is around 1/3 of its overall profits. I am not comfortable in owning businesses who are disrupted by technologies. Hence, I shall put CDG in my "too difficult" pile and skip this stock. I may be tempted to buy CGD if its price drop further and further. After all, in this slightly expensive market, stock ideas are very hard to get.

Sunday, August 6, 2017

Sell Sell stocks in SG market

For the past month, I have been selling stocks in the Singapore market

- Sold my second half of OCBC stocks at $11.20. Still keeping DBS. I do not intend to sell any DBS, even though the market is pricing in DBS having higher provisions.

- Sold all my stake in Far East Hospitality. I don't like its latest quarter results.

 - Sold my remaining stake in Valuetronics, before it went ex-dividend. The price of Valuetronics may be higher now after including the dividends. But I decide to take profit as I no longer like the risk-reward in Valuetronics

- Sold my stake in Fraser Logistic Trust at $1.11. The price-to-book ratio for Fraser Logistic trust is more than 1.15, which is no longer attractive for me to hold. Of course, Fraser Logistic trust may still have room to run.

Personally, I am finding that Singapore market is getting fully valued and it is hard to find any interesting stocks to buy. Yes, there are low price-to-book property stocks in Singapore market, but property stocks are not my cup of tea.

I have been nibbling at HK stocks and surpisingly, two Malaysian stocks.

I get the ideas on malaysian stocks from AbsolutelyStocks.com. I subscribed to The Edge magazine for 3 years, and it gave me free access to AbsolutelyStocks.com for three months. The AbsolutelyStocks.com. has live portfolios, which allow me to pick on their ideas.

Not sure if I will continue to subscribe to AbsolutelyStocks.com after three months. Personally, I like 'live' portfolios, as it gives you stock ideas and allows you to learn from other people's thinking behind their portfolio. 

Saturday, July 1, 2017

Mid Year 2017

Stock Portfolio Returns 

Year-to-Date Portfolio Returns:20.7%
STI index excl dividends: 12%

Number of stocks in portfolio: 24

Stock Portfolio Rules

1) Keep number of stocks in portfolio to 20-25 stocks.

2) I can only buy the stock till it is 10% of my portfolio

3) No stock can be larger than 20% of my portfolio. If the stock rises to above 20% of my portfolio, I need to trim my position in the stock.

Thoughts on Portfolio

It is harder to find stocks to buy in Singapore market. I have been sellng more Singapore stocks than buying in the last two months.

Instead, it is easier to find stocks to buy in the HK market. I have been buying HK stocks instead in the last two months.

Some portfolio actions in last two months:
Singapore Stocks
- Sold 1/3 of my Dutech position, in veiw of the poorer than expected 1Q 2017 results. If Dutech dropped by 10%, I may add to my Dutech position

- Sold down 75% of my position in Valutronics before the bonus share issue. The bonus share is 1:10. Is leaning towards keeping the remaining Valutronic shares for the dividends. Nonetheless, I may also dispose of the shares, as the position is smallish (around 1% of my portfolio).

- Sold 1/2 of my position in 800 Super at $1.32. The sale is due to the poorer than expected 3Q results. The sale will reduce my concentration in this stock to 5% of my stock portfolio. Prior to the sale, 800 Super is 10% of my stock portfolio.

- Sold 1/2 of my position in OCBC at $10.92. The sale is to take profit. After the sale, OCBC is around 1% of my portfolio. If the price rise further, I will sell all my remaining shares in OCBC.

- Add to my position of Far East Hospitality Trust (FEHT) at $0.615. FEHT is around 4.5% of my portfolio.

- Add to my position in Cogent. I think Cogent earnings should continue to grow in the next 1-2 years.

HK Stocks
- Bought Hui Xian Reit, which is now around 2% of my portfolio. This reit offers more than 8% yield and trades at 2/3 book value.
- Bought China Overseas Land, which is around 4% of my portfolio. It is a China developer with rather interesting ROE of higher than 15% in the last few years.

Thoughts on Stocks

It is interesting that HSBC is now $72 and a year ago, you can snag it for less than $50. Too bad that I was not able to foresee this increase in share price and the under-valuation of HSBC a year ago, even though I am aware that the sentiment on HSBC was quite poor.

I read from somewhere that China banks are among those stocks with very poor sentiments. I agree somewhat with this view as the PE ratio of Big 4 China banks are quite low, even though there are some risks in investing in China banks. I may buy some shares in a big 4 China bank (listed in HKSE) if their share prices fall further.

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

 

 

STI (incl Dividends)

 

2016

19%

4%

 

2017

33.6%

21%

 

2018

-11.9%

-7%

Fail to hold more cash during Jan-Feb 2018
Buying low quality stocks at height of optimism in Jan

 

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 fo...