Saturday, February 10, 2018

"Feb 18" - SG Transactions & Portfolio Update"

No.
 Counters
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
1.
Comfortdelgro
85,000
2.00
170,000.00
27.0%
2.
M1
75,000
1.80
135,000.00
21.0%
3.
Fraser Logistic Trust
100,000
1.08
108,000.00
17.0%
4.
Ho Bee Land
30,000
2.43
72,900.00
11.0%
5.
ST Engineering
20,000
3.24
68,400.00
10.0%
6.
Vicom
8,000
5.83
46,640.00
8.0%
7.
Tuan Sing
40,000
0.44
17,400.00
3.0%
8.
Singtel
4,000
3.38
13,520.00
2.0%
9.
Warchest
-
-
  2,000.00
1.0%
Total
633,860.00
100%

What I thought to be an easy January month turned out to be different as we head towards the month of February.

Volatility in the market is back and already we've seen the DJI drops more than 1000 points in two sessions. The STI index has also given all its returns back this year and is currently marginally negative year to date.

This is actually a great period to accumulate some of the companies who has been impacted by the market selling and you can see that I have used up much of my warchest for this month to add on further. While it's still early days, my strategy is to continue adding for as long as they look attractive to me. And at 5% yield, it's hard not to add some blue chips into the portfolio.



First, I added a small portion of Tuan Sing which I blogged over here. The results were well expected and with contributions from the completed Robinson in FY18, I think they'd do pretty well. In terms of share price, it gets affected like most other companies during the market selling over last couple of days so in theory, valuations only get cheaper there. I'm rather skeptical though adding it aggressively because the company pays out so little dividend to shareholders and it's not part of my larger strategy. I'll monitor though how this pans out over FY18.

Second, I made a reallocation from EC World Reit to adding more FLT during the market selling. I think this was a bit of hasty decision because I have a clear plan in my head about not getting into Reits as valuations are not attractive at all but the hand took over faster. I think this is something I am still learning how to handle. On the same news, the CEO of EC World Reit has just resigned so I think there's something to be looked on there. Perhaps, the sponsor has their own ideas.

Third, I made a purchase of Singtel which I thought to be a good one over the long term. I know we are talking about the drop in earnings, especially coming from their regional associates in Bharti and Telkomsel but this is not something we've heard for the very first time. Back in 2013, earnings are so competitive in Indonesia and India as well but they've managed to come out of it stronger. I think we'd see something similar coming out of telcos over next couple of years. At 5% yield, I really think investors don't have to seek far away for what I thought to be a pretty decent return to park their money.


Net Worth Portfolio

The portfolio has increased from the previous month of $615,330 to $633,860 this month (+3.1% month on month; 28.6% year on year).

There is more capital injection this month as I reallocate a bit more from the emergency funds into the equity portfolio.

I think we'll see a lot more up and down over the next month or so but all we can do as investors is to stay calm and pounce on opportunities. The last thing you want to do is to panic sell in a market like this. If you have been buying on contra or leveraging, then I think this exercise is a good preview of what's to come during consecutive sessions like this.

If your investing horizon is a long time, there's really nothing to fear on markets like this. In fact, wealth are made when there are opportunities like this. Often, my wealth creation builds up exponentially from coming out of market correction like this.

Do get into good companies with good valuations. The rest will take care itself.

Lastly, I'd like to wish everyone in advance a happy CNY and a great start to 2018.


Thanks for reading.

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11 comments:

  1. Happy CNY! Any soccer bets?

    ReplyDelete
    Replies
    1. Hahaha no soccer bets this season. Nothing looks exciting out there. Maybe the world cup there is.

      Delete
  2. Alvin Cheng resigned from EC World REIT? Any ideas where he's heading next?

    ReplyDelete
    Replies
    1. Hi J

      I have no idea about where he is going.

      Doesn't seem like it's his choice though. Seems only a few months ago they were interviewing him and he is determined to see through the growth stages.

      Delete
  3. Happy Chinese New Year Brian! Great year on year growth with your portfolio, and nice to see you taking advantage of a little market volatility - hopefully a few more opportunities to come :)

    ReplyDelete
    Replies
    1. Hi Frankie

      Happy new year to you too and may the market volatility put a bit of angbao to our pocket in future years :)

      Delete
  4. B,

    wow, your warchest is depleted so soon... time to recharge it soon.. !
    at this rate, you will easily cross 700k by end of this year!

    i feel there will be more buying opportunities... and i am trying to pace my purchases throughout... this month, already made a few purchases during the dip. and , i am tempted to buy more and more, i have to control my trigger finger!

    btw. whats your take on vicom? reckon their divd policy is sustainable? even though dip in revenue, they actually increase the divid payout.

    ReplyDelete
    Replies
    1. Hi FC

      I think we'll see a stronger bull wave once this correction is over. All the growth are pointing to the right direction including monetary policies.

      On Vicom, i was a bit surprised too they increase their payout. I guess the parents need them but with the balance sheet they can well afford it for many years to come.

      Delete
  5. Wow, you're quite daring! The correction may not even be over yet and it may even lead to a bear...

    just curious, how much of it is capital injection vs capital gains?

    The portfolio has increased from the previous month of $615,330 to $633,860 this month (+3.1% month on month; 28.6% year on year).

    what's your take on M1? it has been going down since 2015 and with the telecom space getting more competitive .. are you betting it will come back big time?

    singtel stock has been sideways since 2013. The y-o-y returns seems only < 3% for past 10 years. Is it worth investing?

    there's also some degree of correlation between M1 and singtel's stock, why do you invest in both?

    For Ho Bee Land, based on the past 10-yr history, if there's any negative news or impact on market, it's price will drop significantly, potentially erasing the gains for the past few yrs.

    ReplyDelete
    Replies
    1. Hi Anonymous

      Thanks for your questions, all very good questions there.

      M1 and Singtel definitely resemble the same nature of business, and my take with them is valuations wise they are cheaper and market has priced in the outlook. I think we'll see them outperform during a bear market compared to other equities like banks and commodities.

      On Ho Bee, I previously blogged when I added Tuan Sing that these two have one of the best ROE generated ability, along with their cheap book value I think will make it a good combination over the next couple of years to chase as laggard. I agree though in a correction type of market their dividends are unable to cover through the downside. One might feel if Reits are better position to weather better, but not for me at this point as I dont see Reits valuation attractive.

      Delete
  6. That's why I like US stocks better, any correction or crash.. the stock value still remains high ... Look at Amazon for example, past few yrs the gains are sooo much... even during the correction now... its value is still so sky-high.

    A local stock equivalent would be DBS, it actually rose slightly during the correction!


    ReplyDelete

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