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. 



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...