Mar 25 Update

Purchases

SBS Transit: Bought a small stake at $2.65 in using SRS and CPF-OA

Its regular dividend has increased and at $2.65, the yield is 7.6%. In addition, it has lots of net cash in its balance sheet. The nature of its business (bus company in Singapore) is stable. Given the limited pool of stocks for SRS and CPF-OA, it's a suitable stock for my SRS and CPF-OA. 

Best Mart: Added to my minor stake. Buy price is $1.79

Added more, as it continues to provide >10% dividend, while limiting it's business to Hong Kong and Macau. 

Stella International: Bought a minor stake at $17.40.

I sold it earlier in January at $17.40. Now, I am buying it again, as its dividend (including special dividend) is close to 10%. It will be giving out special dividend of $0.56, likely for three years as part of its capital reduction plan. 

Yangzijiang Shipbuilding: Bought a minor stake at $2.39

Its share price has fallen from $3.30, after US wants to charge up to $1.5m for China ships entering US ports. As China shipbuilding is around 50% of global shipbuilding capacity, there's no way of avoiding such charges. 

Currently, Yangzijiang's order book is 6.5x of its annual revenue. As such, its near-term revenue is relatively secure. At current prices, it's trading at around 8x PE, with 5% dividend, >20% ROE and net cash in its balance sheet. 

Sales

Henlius: Sold all my position at $28

It's trading at higher than my sale price now. I sold it because it's trading at >70% higher than my cost price and I don't really understand the company well. It's safer to sell when the price is high. 

Booking: Sold half my position at $4,800

I decide to reduce position first, because there's increasing likelihood of US entering recession and travel will slow down during recession. I still like Booking and may buy it back at lower prices. 

Tianjin Development: Sold all my position (which is a minor stake) at $2.01 - $2.02

I sold it after its results release, because

-  I am disappointed with its low 28% dividend payout ratio when it has lots of net cash in it's balance sheet

- I want to increase my cash holdings / warchest, so that I can buy more US stocks if US market falls further. 

Yuexiu Services: Sold half my position at $2.92

I am slightly disappointed with its results and I want to increase my cash / holdings.

Current View

US market is in a downturn. I am waiting for US market to fall further, before buying those stocks in my watchlist (e.g. Booking, Alphabet). 

S&P 500 correction

 S&P 500 went into correction territory today, falling 10.13 from its peak.

- Interesting that this correction did not spread to other countries. 

- Currently, P/E ratio of S&P is 26.4 (Source: Gurufocus). Not cheap

S&P 500 show declines with each new or unexpected new Trump tariffs. 

This reminds me of the market in 2008, where market extended declines with each new negative surprises. The market starts to stablize and then bottom in early 2009, when there is no further negative surprises. 

As such, I guess that US market may be in for bumpy ride in April too, as President Trump annuouced the details on reciprocal tariffs and the affected countries retailiate against such tariffs.  

Next, there could be a maturity wall in 2025 and beyond (source), where a lot of US bonds / debt will be maturing. 

US govt would like to issue new bonds (to repay the matured debt) at low interest rate and at longer tenor than Treasury bills. Hence, the new US administration is focusing on lowering 10-year bond yields.

How do you get lower 10-year govt bond yield? 

- If there is higher probablity of recession, the 10-year govt bond yield may go lower, as money flocks to safe haven such as govt bonds in troubled times

- If there is lower fiscal deficit in future, 10-year govt bond yield may go lower.

To me, the current policies of US administration are trying to acheive lower 10-year govt bond yield.