Apr 25 Update

Sales

Stella International: Sold all my position at $15.20 after Trump's tariffs. Cost price is $17.40

It is stupid of me to bought just before announcement of Trump's tariffs. 

Dream International: Sold all my position at $5.80-$5.95. 

Sold due to Trump's tariffs, as its factories are in Vietnam. 

Marco Polo Marine: Sold all at $0.044. Cost price is $0.053.

Sold due to desire to hold more cash and dispose of positions with less conviction in these uncertain times. 

Oiltek: Sold all my remaining stake at $1.10.

Sold due to desire to hold more cash in these uncertain times. It may be a mistake to sell it, as it is trading at $1.40. Nonetheless, I probably lack conviction and understanding in the stock.

CNOOC: Sold all my remaining stake at $16.32

Sold, as oil prices could be weak this year. OPEC may increase supply of crude oil and the possible US recession reduce demand for oil

Glorious Sun: Sold a minor portion at $1.16

Sold due to reducing the position size, as I want to have less exposure to China banks. Glorious Sun has stakes in ICBC. CCB and BOC.

Atour: Sold all at $23.75. Cost price is $25.

Took a minor loss. Sold due to delisting risk from US, as Atour is a China company and it is not dual-listed in HK.

Meituan: Sold majority of my stake at $129. Cost price is around $150.

Sold due to JD entering Meituan's market which may lead to increased competition and lowered profits for all players.

Ping An: Sold half of my position at $45.

Sold due to (1) poor 1Q 2025 results, (2) desire to reduce my position sizing in Ping An, (3) disappointment in Ping An's inability to turnaround its business. It's business had worsen since 2020-21 and (4) desire to hold more cash

Purchases

Sketcher: Bought a minor stake at $49.50. Also, earlier sold put options was exercised; purchase price is $58 after netting off option sale price.

I believe in Sketcher's positioning in shoes market. While it may take a hit in its US sales and profit in these 1-2 years, it should be able to recover.

Nameson: Increase stake slightly at $0.81

Bought too early. Should wait a few days before buying at lower price. 

Intermestic: Bought a tiny stake at 1,380 yen.

Should have bought more when share price dropped to 1,380 yen.

Best Mart: Increase stake slightly at $1.67

Its dividend yield is >10%. Its business are sheltered from Trump's tariffs, as it caters to HK and Macau markets only.

LTAM ETF (GBP): Bought a small stake at $10.65-$11.45

This is an ETF on Latin America. Latin America could be a beneficiary in this tariff war, as China increases purchases of agricultural goods from Brazil and production of shoes / textiles for US could shift to South America. In addition, Latin America equities are inexpensive. 

ISLN ETF (USD): Bought a small stake at $30.70

This is an ETF on physical silver. I decide to slowly increase exposure to metals such as silver and gold. The exposure will not be large. Such exposure will serve as hedge / insurance during uncertain times, as metals may have low correlation with equities and bonds. So this purchase is a start.  

Current View

Currently, S&P 500 rose back to its pre-Liberation Day value. I cannot understand the rising S&P 500, when the odds of US recession is high. The market seems certain that US will reach a deal with China soon to avert a recession in US. 

My read is that US-China deal will not happen anytime soon. China can bear the pain from tariffs war better than US. When US finds the pain from tariffs unbearable, 

- US can reduce its tariffs on China unilaterally, and China will follow suit and reduce its tariffs on US.

- Or US will try to reach a deal with China. Then the longer the deal takes, the more pain US will feel from the tariffs and the stronger the China position will be in the negotiation.  

Anyway, I can't predict what will happen. My equties allocation is around 50%. So if market worsen or improves, I will lose some or gain some. 

USD Depreciation and US Treasury Bond Yields Rising

 Last Thursday and Friday, US dollar (USD) has depreciated against major currencies such as Euro, Yen. On Friday, USD even depreciated against Sing dollar. Correspondingly, US Treasury bond (or govt bond) yields have been rising. 

More infomation can be seen in https://www.youtube.com/watch?v=H3nRgZGBREs

In twitter, most people are asking 'Who is selling the US Treasury bonds?' I think this is the wrong question to ask.

Instead, the simpler question to ask is 'What is it implying?'. If when one's currency is depreciating and one's govt bond yields are rising, it implies that investors are losing confidence in the currency and would demand higher returns (yield) to hold the currency.

Why are investors losing confidence? The most recent example was the Liz Truss moment in 2022, where the new Liz Truss administration announced policies increasing UK government spending and fiscal deficit. This led to investors losing confidence in UK glits, pushing its yields higher and UK pound depreciated against other currencies. The situation stablised only after Liz Truss was pushed out and her policies halted. 

So with this example, probably the current USD depreciation and its rising bond yields could be due to investors perceiving higher US fiscal deficit in future. It could be a response to US $5 trillions tax cut plan (see https://www.bbc.com/news/articles/c7vnnv6n29no), which would worsen US fiscal deficit in future. 

MSNBC had a recent video on US fiscal deficit: https://www.youtube.com/watch?v=wEj_9tNyvVQ

Also see: https://x.com/HayekAndKeynes/status/1911385708893208948

Two weeks into US Reciprocal Tariffs

Two weeks have passed since President Trump's announcement of reciprocal tariff on 3 Apr. And many things have changed since 3 Apr, due to Trump's subsequent announcements.

Currently, electronics goods, pc and smartphones are exempted from the reciprocal tariffs (a change from previous stance). The market may rally on this news on Monday. 

Trump's tariffs are like cha-cha dance; two steps forward, one step back; two steps forward, one step back. 

It's been very tiring to keep up with the tariffs news and its impact on my stock and non-stock holdings.  Given the great uncertainty in US tariffs, I decide to focus less on the tariff news and just wait for things to settle. 

The markets may bounce up and down. It may recover from there or fall further. It does not matter. 

I may miss out buying quality stocks at good prices. I may buy quality stocks when their prices fall to my buy point. It does not matter. 

I just stick to my buy plan; does not matter if my warchest is not deployed. At this moment, 50% of my assets are in equities. So I still benefit, if the market recovers. 

Besides buying quality stocks at good prices, I will change my focus to buying non-US stocks on business that focus on domestic demand. Such business will not be directly affected by the uncertainty of tariffs. 

Seperately, it seems that US treasuries and USD are no longer the 'safest' assets during market crisis, given its drop during Thursday and Friday. I will hold my spare cash in SGD (and not USD) in future, even though the interest rate for SGD is lower. 

Lastly, S&P PE is around 19x NTM PE currently. This is not cheap, relative to its 20-year history (see https://x.com/MikeZaccardi/status/1910819472291639692)

Current Market Crash

The current market crash reminds me of 2 songs:

This is what you came for (by Calvin Harris and Rihanna)

散了吧 It's over (by Terry Lin)

Now, I guess that I'm done selling almost all the positions I don't want to hold throught this crash. (Never, say never though. I am sell if I find myself short of cash or the holding turns out to be more affected by US tariffs than I thought.)

Moving forward, I am waiting for prices to drop further. I will start to buy the quality stocks in my watchlist, in tranches, as their prices dropped to my buy point.

If President Trump does not pivot on his tariffs, the market may be in the doldrums for quite some time. There are potential negative events such as:
- EU imposing tariffs on US

- US re-retaliating tariffs against China / EU

- US impose new tariffs on semicon, pharma, copper

- US entering recession 

- Fed not cutting rates due to high inflation (arising from tariffs)

- Unknown negative events (e.g. Who predicted AIG going under in early 2008?)

I will be very sparing in firing my bullets in this market downturn. 

Safest Asset during Great Depression

There is a very good book on the Great Depression in 1930s - 1940s. The book is 'The Great Depression: A Diary' by Benjamin Roth. 

The book is actually a diary of events during the Great Depression. The author was a lawyer. He 

had months with no income during Great Depression. 

From the book, what was the safest asset during Great Depression? 

It is the treasury bonds (i.e. government bonds). 

Other assets such as equities, corporate bonds, farmland, houses have lower prices. Cash in 

banks may face withdrawal issues during bank runs. 

Another interesting trend during Great Depression was that it become fashionable to save more 

and spend less. People compared with each other on how much they save. 

What I will do during Market Downturn

Raising Cash Level

During market downturn, especially at the start, I will raise my cash level by selling lower quality stocks (even at losses). For this time, I also sell the stock if I am worried by holding the stock, as I prefer to sleep soundly. 

The raising of cash is to increase my warchest for deployment, if the market downturn worsens and quality stocks in my watchlist hit my buy prices. 

I never sell my equity holdings to $0, even during 2008-09 Great Recession. This is because I never know when the market recovers. If I have zero equity, I may miss out the subsequent market upturn. 

Buying quality stocks when they hit my buy prices

I would buy quality (or relatively safe) stocks when their prices fall to my buy prices. I will buy in tranches e.g. First tranche is bought at $X price. Second tranche will be bought 10-15% lower. Third tranche will be bought 25-30% lower. 

For example, during 2020, I bought UOB at $24, $22 and $20. (Note: For this downturn, I am not looking at Singapore banks now, as I prefer to buy SG banks at 1x book value or lower.)

My thinking

My equity portfolio will continue to lose money, as the downturn continue. I will hold the stocks that I want to hold. 

When I buy any stocks during the downturn, the prices of these bought stocks may continue to go lower and I cannot buy at the bottom.

I do not know how long / deep the downturn will be. 

Marco view

I expect the market downturn to continue for some time. S&P peak is at Feb 2025. I don't expect to see any market bottom soon. 

Based on the book 'The Long Good Buy' by Peter Oppenhiemer, event-driven bear market last average of 7 months and has average price falls of 30%. Structural bear market last average of 4 years and has average price falls of 50%. 

On Trump's policies, I think that he is serious in having tariffs to raise revenue for US government. He wants to see lower 10-year Treasury bond yield, as US government has a lot of debt maturing from 2H 2025. 

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).