Portfolio @ November 2018

NovemberPortfolio DetailsPortfolio Value

Performance Indicators / Dividends

  • YTD Time weighted return: -0.16%
  • Dividends collected: $3,145.21
  • Ex-Dividend:
    • AIMSAMP Capital Industrial REIT: SGD 150
    • Capitaland Mall Trust: SGD 165.30
    • Frasers L&I Trust: SGD 503.72
    • Starhill Global REIT: SGD 172.50
    • Visa Inc: USD 14
  • Cum-Dividend:
    • SingTel: SGD 489.60
    • Frasers Property: SGD 186

Commentary

7 weeks, 7 cities

Apologies to regular readers (if there are any haha), its been 5 weeks since my last post. As mentioned in my previous post, it’s been a busy end to the year for me. I currently in the midst of my “Asia tour” for the past 5 weeks, with 2 more weeks of work travel to go.

So where have I been? I’ve been to (in order) Bandung, Bangkok, Chennai, Jaipur and Nha Trang, and will be going to Beijing and Zhongshan to finish off my work for the year. Pretty insane if you ask me haha. At least the people are nice and welcoming and I’ve learnt a lot of how business is conducted in all these countries/locations. Will share my insights when I’m back in 2 weeks time.

Portfolio transactions and thoughts

It’s been a relatively busy month on the transactions front, with my purchases made in late Oct/early Nov in the depths of the sell off. I initiated a small position in SPDR STI ETF (SGX: ES3) with the STI was below 3,000 points, added SingTel (SGX: Z74) at 3.03 and bought 1 share of Amazon (NASDAQ: AMZN) for the lols during the sell-off.

The market has staged a mini recovery, adding m-o-m capital gains of about $2+k. Main contributors of gains relate to Hang Lung Properties, Capitaland Mall Trust and Frasers L&I Trust. Coupled with about $2k of capital injections, porfolio value is almost back to peak levels while time weighted returns has returned to almost flat for the year.

Looking ahead

The G20 summit this weekend will be in focus, with Trump and Xi meeting. My personal guess is that it will be a non-event, causing the market to collapse again on Monday.

This year has been a tad disappointing but 1 more month to go to bring myself back into positive territory. Here’s to a great end to the year!

Happy Hunting,
KK

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Portfolio @ September 2018

September

Q3 is over! 1 more quarter to go to drive returns for this year.

Portfolio ValuePortfolio Performance

Performance Indicators / Dividends

  • YTD Time weighted return: 4.34%
  • Dividends collected: $2,932.94
  • Upcoming Dividend Receipts:
    • Yuexiu Transportation Infrastructure: HKD 900
    • Bank of America: USD 10.50

Commentary

A roller coaster

September turned out to be a roller coaster month, with US-China trade war fears dominating most of the price action. At one point I was down up to $3k month on month! Ultimately my portfolio turned it around to ultimately settle at almost a wash. Other than that, it was quiet month for me with no transactions made. Gains in portfolio value was mainly due to capital injection into my warchest.

The macro-economic and geo-political environment is getting pretty complicated, with the ongoing trade war, emerging market crises, US White House turmoil and the looming US mid term elections in November. Where all these will lead us and how it will be resolved, nobody knows. I only know that I need to raise cash to be ready for any opportunities.

Till then, keep calm and collect dividends.

Happy Hunting,
KK

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Portfolio @ August 2018

August

Another month, another portfolio review.

PortfolioPortfolio Value

Performance Indicators / Dividends

  • YTD Time weighted return: 4.49%
  • Dividends collected: $2,767.12
  • Upcoming Dividend Receipts:
    • Yuexiu Transportation Infrastructure: HKD 900
    • AA REIT: SGD 150
    • Visa: USD 11.76

Commentary

A month of milestones

The past month was a month of a few milestones – turning 30 and revisiting an old goal, scaling new heights in portfolio value and today, 1 year of financial blogging. My first blog post was a porfolio review as at August 2017 1 year ago and I’ve enjoyed writing for the past year. I’ve always enjoyed writing articles back in school and I’m glad I’ve a topic that I’m passionate enough to write about. Hopefully you guys learnt something in the process.

Monthly Performance

August was a pretty decent month, $2k of capital gains, $2k of cash injection and $1k of dividends brought the portfolio value up to $134k, yet another new record. Capital gains were largely driven by Frasers L&I Trust, Visa Inc and SingTel. There was only 1 new buy this month, Tencent Holdings, which I bought into weakness following their recent earnings report. My write up on the company is here. China stocks will continue to be volatile following the trade war and for Tencent, government regulations over video games. However, price volatility in Chinese / HK stocks is also what makes HK stocks increasingly attractive now, something which I’m watching really closely.

Health is wealth

My company has its annual charity month in September and I’ve been committed to complete 100 miles of walking/running/cycling/swimming for whole of the month for charity. That’s a whopping 5+ km per day! Since I’ve been volunteered for this, I thought its a good time to start exercising regularly to lose weight. So going forward, I’ll be writing more about my weight as health is wealth.

Here’s to an awesome sprint to the end of the year.

Happy Hunting,
KK

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“Save 100k by 30” goal review

Whenever you reach a milestone in life, you tend to reflect on what has been and sometimes, what could have been. As I celebrate the 5th anniversary of joining the workforce yesterday and my 30th birthday today, I am reminded of a goal I once had but have not tracked for a long time.

Back in July 2013, as a young fresh graduate about to embark on my career as a legal sweatshop worker auditor at a mid sized audit firm, I read an article in the Sunday Times entitled “Is it possible to have $100k by 30?“. Author Jonathan Kwok surmised that as a 25 year old male fresh graduate, if you earned the median salary of $3,050 per month, had 3 months bonus (AWS + 2 months variable bonus), had a 4.5% annual pay rise, saved 50% of your salary, you would have managed to accumulate $123,000 of pure savings (excluding CPF contributions). If you choose to invest 60% of the savings and obtain a 6% return per annum, the average 10 year year return of the STI then, that amount will be $134,000.

Back then, upon reading this, I thought to myself…

Challenge Accepted

5 years on, if you simply look at my portfolio value, you would see that I’ve already achieved that goal with some time to spare. The exact time I achieved the $100k goal was approximately slightly before my 29th birthday, 1 year ahead of schedule. In fact, my current tally is quite close to Jonathan’s estimates.

Reliving my 5 year mission

Let’s examine how I did it with a trip down memory lane.

Tough start

When you study among so many brilliant individuals throughout your education years, there comes a certain basic expectation that there is a set path that you must follow to career success. However, when you can’t even get on that path to begin with, you sometimes feel like a failure, especially when you see your peers start to outpace you in terms of opportunities and salary growth.

I’ve made peace with myself on this, but to date I still face a uphill battle as a result as my salary was by some measures much lousier than Jonathan’s assumptions:

Starting point

*My bonuses were never more than 1 month, some years were less than that.

I was starting off a giant back foot, with my only redeeming factor being auditors’ comparatively large annual increments. To this day I’m still lagging behind Jonathan’s salary assumptions. With that said, I can’t complain too much as I know there are people out there who start from even further behind, with student loans and large parental support contributions monthly.

Leading a simple and frugal lifestyle

I have relatively simple tastes, I am a bit like what some would call a 宅男 (Nerd / Otaku), the most important things I possess is my computer, mobile phone and Nintendo Switch. Netflix / Youtube / Video Games with the odd movie at the cinema being my entertainment, analysing business news stories and financial reports my interests. The only time I go to restaurants are with close friends whom I catch up with every few months or colleagues, my family innately prefer hawker centres. No girlfriend either so no expenses there as well.

As a auditor in a firm previously, leave was mainly used for professional exams, there was little time for overseas trips. In fact, since starting work, I’ve never taken leave to go on a leisure trip overseas.

Zero in 5 yearsPogchamp

I can imagine the horror that is going through your minds now. While I love the idea of travelling for leisure, I hate spending tons of money on it. Also, I feel that if I were to go on trips, I feel it is more meaningful if it were with friends or family. As a single introvert, my attached friends don’t really ask me to join them on their trips. This was partly why I took my current job in the hospitality industry, as it afforded me a chance to travel and have a first hand look at how business is done overseas.

Saving and investing half my take home pay

This low cost lifestyle enabled me to consistently save half my take home pay. I’ve also been rather aggressive with my savings, investing at least 80-90% into the US market at first, with my portfolio now more weighted towards the SG market. How I rationalise this approach is through the fact that I’m young and can afford to take the risk. I also have low expenses and in the event I’m screwed over by Mr. Market and/or retrenched by my employer, I take comfort in the fact that my parents will take care of me.

I know its considered a bit reckless by finance advisors, but I really frown on holding too much cash. Also, I would argue that if you know what you’re doing, focus on buying quality stocks and take a long term view, the risk of being wiped out by the market is relatively low. You might suffer massive draw downs in your investing journey, but quality companies always have the ability to bounce back.

Being lucky with my investments

I try as far as possible to be right with my stock picks based on fundamentals, but ultimately the market has a large say in whether you are right or wrong. I’m lucky to say I’ve managed to achieve an XIRR of 16.57% p.a. (according to Stocks.Cafe) to date since 2013 or 15.22% between 2013 – 2017, well outperforming the 6% assumption Jonathan had. This helped me make up for the salary gap I have and am still facing.

Financial goals on track, life goals still lacking?

Some of you might be looking at all of this in “disgust”, saying that I do not have a life. “Why don’t you live it up a little?”. In a way, I would somewhat agree with you. While I like the finer things in life, I am content with my nerdy and simple lifestyle. The only true failing I have is that I’ve yet to find a partner in crime in my journey to financial freedom, probably due to my 宅男ness. I’m reminded of it from time to time by my mom, as all mothers do. I’m open to being single forever if that is path given to me, but that sometimes sounds too lonely.

Will I be anointed a 铁公鸡” (stingy person) like AK in 10-20 years? Haha I certainly hope not.

What next?

I hope my story will be an inspiration (nightmare?) to the fresh graduates of 2018 as their embark of their careers, as a Sunday Times article once did for me. Financial freedom can be planned and achieved if we take pro-active, positive steps towards achieving those goals.

As for me, let’s set a new 5 year goal:

Save 350k by 35

Watch this space.

Happy Birthday to me,
KK

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Portfolio @ July 2018

July

July is almost in the books, so it’s once again time for a portfolio review.

PortfolioPortfolio Value

Performance Indicators / Dividends

  • YTD Time weighted return: 3.24%
  • Dividends collected: $1,497.64
  • Upcoming Dividend Receipts:
    • Frasers Logistics & Industrial Trust: SGD 151.50
    • SingTel: SGD 652.70
    • Keppel Corp: SGD 195
    • Capitaland Mall Trust: SGD 106.78
    • AIMSAMP Capital REIT: SGD 150
    • Starhill Global REIT: SGD 163.50

Commentary

All dogs have their day

July has been kind to me, with portfolio value rising to an all time high of $129k. If you take into account dividends that has XD but are yet to be paid, that’s $130k there. This month’s performance was driven by pretty epic recoveries in my dogs SingTel and Starhill Global REIT and further augmented by gains in Capitaland Mall Trust, Alphabet, Visa and Bank of America. My investments in SingTel and Starhill still slightly remain underwater, but this recovery helped ease the mental torture. This episode has and continues to remind me that panic selling never made anyone money.

Recent Moves

I only made 2 moves this month, re-entering Frasers Property Ltd the day after the Government’s ruthless ABSD and TSDR adjustments and Facebook yesterday after “disastrous” quarterly reporting results. As mentioned previously, I tried for the Koufu IPO, but wasn’t allocated any.

With regards to Frasers Property, I felt the market did not fully understand their business model and geographic reach. Frasers Property has moved away from their property development roots into the recurring income property segments, with more than 80% of assets in these categories (Source: FY2017 Annual Report). What this means is greater earnings stability and less development activities, especially in the residential market – the area hardest hit by the Government’s property cooling measures. Add the fact that Singapore only accounts 33% of 2017 revenues (of which about half relates to residential developments), a juicy 5% dividend and 30% discount to book value, it seemed like a no-brainer. The market seems to agree with the subsequent steady recovery.

As for Facebook, its more of a vote of confidence in Mark Zuckerberg than anything else. Yes, Facebook platform growth is stagnating, but based on past experience, FB management always finds a way. With a giant economic moat and many monetization levers yet to be pulled, the decline seems overly done. Time will tell if my faith was misplaced.

Earnings review

Most of my portfolio stocks/REITs have reported quarterly earnings, so here’s some quick thoughts on them:

  1. AIMSAMP Capital REIT – Steady quarter, environment continues to be challenging,
  2. Capitaland Mall Trust – Pretty good quarter, 2.2% y-o-y DPU increase, 0.8% positive rental reversions, AEI at Westgate, Gearing drop to 31.5% – potential acquisitions incoming (hopefully), good stuff.
  3. Keppel Corp – Honestly a pretty meh quarter, special dividend is nice. In separate news, noted Keppel Urban Solutions and Keppel Capital signing some partnerships/MOUs with ST Engineering and MindChamps for smart cities and early childhood property assets respectively, which I found interesting.
  4. Starhill Global REIT – Stabilised DPU decline at 1.09 cents, Good to see office occupancy increasing to 95% from 90% in Q1, Uniqlo renovations at Plaza Arcade completing soon with opening expected in Q3, plenty to look forward to.
  5. Visa, Alphabet, Bank of America, Facebook – Simply put, decent to stellar quarters.

Here’s to an awesome August. 🙂

Happy Hunting,
KK

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Portfolio @ June 2018

June

Time flies, half of 2018 is over. As usual, its time for another portfolio update.

Current PortfolioPortfolio Value

Performance Indicators / Dividends

  • YTD Time weighted return: -2.20%
  • Dividends collected: $1,475.06
  • Upcoming Dividend Receipts:
    • Frasers Logistics & Industrial Trust: SGD 103.50
    • SingTel: SGD 652.70
    • Bank of America: USD 16.80
    • Visa: USD 11.76

Commentary

The battle between Bulls and Bears rage on

I was preparing my portfolio update with a slight tinge of fear as I felt June had not been great for me. To my pleasant surprise, my portfolio ended up approximately $200 month on month. Despite horrible losses in SingTel, Keppel Corp and Starhill Global REIT, it was made up for by gains in my tech stocks Amazon, Google and Spotify. This is illustrative of the fact that we always remember of our losers, not our winners, at least for me.

The current issues clouding the market include the global trade war (thanks Donald Trump), the flattening yield curve and to a temporary extent, the World Cup (don’t ask me why that is a thing). This resulted in a re-rating downwards of yield assets (creating the June Great Singapore Sale in REITs and dividend stocks) and a flight to US stocks with little Chinese exposure as seen by massive fund flows to the US and tech stocks.

Of the 3 issues, I personally fear the trade war the most and given the no-holds-barred way Donald Trump has been stirring the hornet’s nest, I decided to hold more cash now in anticipation for further downside in Singapore stocks. Chances to snag good dividend paying stocks and REITs on the cheap have emerged in June and if you are into income investing, this could be your chance to increase your portfolio yield.

June transactions

This has been a rather busy month on the transactions front due to the Great Singapore Stock Sale and my decision to hold more cash now.

  1. Sold Micron Technology for a small gain as my speculation thesis didn’t work out to the planned extent thanks to trade war fears.
  2. Sold half my Bank of America stake. Essentially, I took out most of my cost in Bank of America having returned 90+% since I bought the counter 2-3 years ago. Will leave the rest hanging in anticipation of further rate hikes.
  3. Sold Spotify and Amazon after the meteoric rise thanks to fund flows back to the US into these stocks. Too far, too fast for me and momentum was flagging for these 2 counters towards the end of the month. Given my need to raise cash, these were the ideal targets.
  4. Bought Frasers L&I trust as part of the preferential offering as mentioned previously and added more in the open market on slight weakness to round out my position to roughly $20k.
  5. Initiated a position in Yuexiu Transportation Infrastructure on weakness. Essentially, this is the toll road operator of the Guangdong government, with expressways pre-dominantly in the Pearl Delta region. Highly free cash flow generative (since its a toll road, literally), stable increasing dividend history and a proxy for China’s increasing logistics and domestic consumption. Key risks include government regulations and “Well, it’s China” risk.
  6. Added more Starhill Global REIT on weakness. Nothing much to say here, I just don’t think it is as bad as what the market is saying. With potential catalysts in 2H 2018 for it’s overseas properties and potential recovery in Singapore Grade A office rentals, I’m willing to add to my position at 7% yield.
  7. Initiated AIMS AMP Capital Industrial Trust. A steady Singapore industrial REIT that I’ve admired for some time. A REIT that did not tank despite the yield asset re-rating, goes to show investors’ confidence in the name. Yielding a trailing 7.4%, it felt like an appropriate time to initiate my position.

Second half of the year tends to be better in my short investment journey. Hopefully it plays out this year as well.

Happy Hunting,
KK

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Frasers L&I Trust preferential offering results

Greetings from Tianjin! I’ve been busy these 2 weeks as I’m currently on a work trip, so no regular content last weekend. Chilling in my hotel room at the moment so I decided to give a quick update on my portfolio.

Frasers Logistics & Industrial Trust

The Frasers Logistics and Industrial Trust PO results are in! As expected, I didn’t get all the excess rights I subscribed to:

  • Total units applied:
    • Entitlement: 1,500 units
    • Excess application: 6,100 units
  • Excess Units received: 1,500
  • Total units received: 3,000 units

Based on today’s closing price of $1.04 and rights issuance price of $0.967, that’s an automatic 7.5% gain. Sweet 🙂 The reason why I’m growing to love rights issues for REITs.

Yup that’s it for now. Stay tuned this weekend for a exclusive investment article about my time in Tianjin 😀

Happy Hunting,
KK

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