Everyone picnic!

Let me dust off a Hearthstone related meme.

The end is coming.jpg

Everyone panic! Run for cover! Sell everything! The markets are collapsing!

World Indices 06022018

Sia la everywhere 满江红 on Monday

Over the 4 years that I’ve been in the market, there have been periods where everything seems so dark and the markets so bloody. I had the whole “catching the falling knife” situation with Keppel Corp thing, the periodic doomsayer of Apple, government shutdowns, debt ceiling battles, Greece defaulting, Brexit fears.

What I learnt from all these now familiar and frankly welcome kicks up the bum is this:

  1. Nobody ever made money panicking
  2. There is always a better time to sell. Never cash out in the depths of the selling
  3. Most importantly, this too shall pass.

Take a breath, assess your portfolio and your shopping list of stocks, and decide if you need to change anything. If you had chosen your stocks well, you shouldn’t need to make much adjustments. Once done, you pretty much can just shut down the computer and go to sleep. Keep track of the price movements, but largely ignore them. This is why we invest in quality companies, so that we can switch off and go on a extended holiday without feeling a need to do anything about the portfolio.

So what did I do?

Honestly I’ve been too unfocused and sanguine recently. I reassessed my portfolio, sold my non-core stocks and rotated some of the proceeds into stocks that are now relative bargains, namely:

  1. Sold Apple. It is a relatively small position, so I wanted to concentrate more in certain stocks. This is not to say it is a bad apple 😛
  2. Sold Domino’s Pizza. The impending exit of CEO Patrick Doyle coupled with it being a relatively small position pushed me to bid farewell to this great stock.
  3. Sold Frasers Property Ltd. Property stocks likely to be under pressure with rising interest rates. I’m now neutral on the property sector due to gains in the past year.
  4. Sold Keppel REIT. Management guided that DPU likely to fall this year, with a possible recovery in 2019. I decided not to stick around in the meantime. Plus, property related stuff likely to be under pressure.
  5. Sold Tencent. It came too far, too fast, so locking in profits while I can. Will relook to buy back if it goes below HKD 400 or when it bottoms out.
  6. Sold Valeant Pharmaceuticals. It has become a battleground stock (ie the bulls and bears are at war with each other) so I expect it to stagnate here for a while.
  7. Bought Raytheon. Patriot missiles, yea! Plays into the macroeconomic theme of the US pivoting away from their Global Policeman role, leading to increased global spending on defence from US allies. Plus they reported a great quarter a few weeks back, so you’re getting the quarter for free based on current prices. Also, I didn’t want to add to Lockheed Martin for diversification purposes.
  8. Bought SingTel. Like a significant amount of SingTel. 5% yield, strong balance sheet, what’s not to love? Plays into my desire for more yield going forward as well. Limited growth potential as it is essentially a utility, but the stable yield and overblown (in my opinion) recent sell off since paying out their dividend makes it attractive to me.

Wow thats a lot of transactions in the 1+ weeks since my monthly portfolio, considering I only did about 3-4 transactions last year.

Summary

Fear spreads in times of market freefall. Keep calm and carry on. I say Don’t Panic, Picnic (Bad pun I know). In the spirit of picnicking, let’s relax and imagine ourselves at a awesome picnic. 😛

Picnic

Happy Hunting,
KK

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