Wednesday, April 8, 2020

Apr 2020 - Portfolio & Transaction Updates




The last couple of weeks have been excellent so far in terms of the stock market.

Market rebounded up to about 20% from its low while we're still in the midst of a pandemic lockdown.

During the rally, I've used the opportunity to do a big clean up to my portfolio by divesting some positions that I had last month and then have them switched over to more retail and hospitality Reits in general, especially during the selldown before the government introduced a circuit breaker for the 1 month period.

So far, the timing for the switch has worked favourably for the portfolio.

All of these positions are now in my cdp account so the strategy is to accumulate more higher dividend paying companies or Reits while the CFD account is more for short term trading. Currently, I have no open positions in the CFD.

I've tried to continue being majority vested in the market during the selldown as I believe the current valuation of many companies are decent. I've continued to keep a small amount of warchest to take further advantage should things reversed to the south but this should continue to replenish automatically from my income and also hopefully from my successful deferment of mortgage application.

For this month's update, I have also started putting the Pre-covid price at the start of the year for my own personal inference. This price does not mean the intrinsic value of the company nor does it represents it will reach there by the end of the year, but it is a reminder to myself that I have a goal to reach an intended target within the next 2 to 3 years and being invested in companies with attractive valuations remain a viable objective.

Do I think the market will continue to re-test the low?

My answer is probably yes, but many times I've fallen prey to my own deduction.

And so does many people out there who's made projections after predictions.

If the market does test its low, you can be sure that I'm likely to finish using up my remaining warchest and probably more aggressively inject more into accumulation, but it'll likely be a steady injection through the incoming cashflow every month.

If the bear market prolongs over the next couple of years, it is actually to our advantage because we can accumulate more at a cheaper valuation so we are likely to be victorious in the mid to longer term.

This thesis will of course change should we lose our jobs during the recession and we are suddenly face with no cashflow to work with. Hence, I remained convinced that job preservation is key and for as long as I can continue to accumulate, things will look better when the eventual recovery starts.

That's all the updates I have for now, and let's see what the month of April has for us.

Thanks for reading.


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24 comments:

  1. Hi B, sold your rds and delta airlines away? I see that your current portfolio is main sg stocks. Do you foresee current surge in US market is temporary?

    ReplyDelete
    Replies
    1. Hi Z

      Delta I sold away at a loss while RDS I sold it at a profit hence the two likely offset together.

      Delete
    2. Errr how did you sell RDS "at a profit"?
      It's practically 1 way traffic south since your report.

      Delete
    3. Because I added two big tranches when RDS were at 1000 and 900 pence respectively.

      Delete


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  2. Why did you sell Shell after making such a positive case for it previously and saying you were planning to hold it long term?

    ReplyDelete
    Replies
    1. Because the tide has changed and Reits have fallen to a level that I wanted to make a switch.

      Delete
  3. Hi B,

    Just wondering why Silverlake? i remembered a time of razor short report.

    ReplyDelete
    Replies
    1. Hi Sgdividends

      Silverlake fundamentals is okay and I've spotted their uptrend since they remained consolidated at 24 cents, so took a chance to get onboard with this. Short term wise should have some pressure with banks likely to cut their enhancement and initiatives.

      Delete
  4. I bought Shell after your analysis. Is it wrong now and should I sell?

    ReplyDelete
    Replies
    1. I think the thesis still presents a good long term play if you are a believer of oil. I switched because retail reits got a big hit while oil recovered a bit so it gave me the window to switch during that one moment which I took it. Again, the reason is tilted towards more of because of limited resources but I try to take care of the whole portfolio instead of individual companies.

      Delete
  5. Hi B,

    Good to see you repositioning your portfolio. Hope your short position in City Dev turned out alright?

    ReplyDelete
    Replies
    1. I couldn't really recall but I think I cut loss at $6.95 or around there, but the other position more than well covered for the loss. From a whole portfolio, it turned out better than expected so I tried to focus not by a single position or counter.

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  6. Hi,

    I find your style effective. I was also looking to invest during this period but i was waiting for retest for the whole of march. Now it looks like i have missed the boat. Any recommendation what will you have done if you me? thanks

    ReplyDelete
    Replies
    1. Hi

      I have seriously no idea where the market is going to go but based on the technical guys it looks like it wi retest the low.

      Delete
  7. Hi, you cut on DairyFarm and Suntec too, must have been profitable? Do you like CMT for retail?

    ReplyDelete
    Replies
    1. Hi DFI was sold too early so it's at a small loss but Suntec was sold at a double digit % profit.

      Delete
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  9. uncle168,

    the short term risk is dividend cut and rights issue as operating cashflow is negative

    if this covid-19 drags on longer than 3 months, only those cash rich companies that has low dividend payout ratios would survive as usually such companies have seen hash times like the iraq war, dot.com bubble burst, sars, subprime

    ironically those companies especially reits that pays out 90% of their earnings would have cashflow problems, they may be forced to sell some of their properties to raise liquidity or see their cost of borrowing surge

    i would buy into cash rich companies with little or no debt that would emerge the winners in this covid-19 crisis as they can buy distress assets with cash at rock bottom prices

    we would see a lot of deleveraging in the next few months as giants collapse once thought not possible

    we would also see how much banks can cover up their massive npls as bad debt from ezra and swiber are still in their books many years on but nobody say anything

    the latest being krisenergy bad debt still in dbs books which it say never defaulted

    even keppel s$477 million investment in floatel should be written off but nothing happened

    as the fed prints trillions near zero interest rate

    what would the future holds with fiat currency more than toilet paper, fear over rationality with a disease that kill less people than the common flu, baby boomers still alive after 75 years since wwii

    would pension funds and insurance companies go bankrupt as even oil and interest rate is now in negative territory?

    with no returns on investment and surging social spending, would our credit ratings drop?

    would capitalism fail as gov realise globalisation, arbitration of cheap labour for profits back fires

    would we go back to the past when production is localised with more emphasis on sustainable growth rather than growth for greed and the pursuit of nothingness

    the new gov after ge2021 form by dr tan and wp would walk another path as pap has failed in its economic growth at all cost model, there would be pain as migrants would be asked to leave as we build a nation by singaporeans for singaporeans

    what's the pont of having trillions in reserves when there is no more singaporeans left when the countries are left with migrant workers serving billionaires instant citizenship when our gov fear to impose capital gain tax and estate duties on them?

    or perhaps they have become rich themselves and forgotten their promise to its people

    keekeekee

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