Rough week + Colex lost Jurong bid

It has been quite a rough week, as my portfolio lost about 4.5% in a matter of 7 trading days.

Colex lost 13% or so yesterday. As I am writing, Colex fell another 9%. TTJ fell another 8% yesterday too. It feels like shit when the index goes up 1+% and my portfolio suffers.

I won't say this is the worst day of my life but every time shit happens, I wonder why I didn't restrain myself and only buy when there is a significant problem. Peace time is the worst time to buy. Saved for the spike from Xinghua Port holdings earlier this year, the portfolio has been underperforming badly, especially against portfolio concentrated on REITs.

If this makes no sense, then it must be horrible to be a value guy during the 2000-3 boom years.

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Let me dig out my purchase reasons for Colex.

In July, I wrote:
6) Initial position in Colex
Colex has a contract that might end next year, but the value in it is obvious.

Another 2% dividend-er like Stamford Land, it has a very strong free cash flow history-- no red ink for the last 10 years. Market cap is now 33.1m, cash is 19.4m, and it is debtless for a decade.

Free cash flow for the first half of this year is 10% lesser but no cause for alarm. If they were to win the Jurong tender this coming quarter, prices should adjust upwards. Capex requirements aren't too alarming, and there is a sizable amount of book value to protect the downside.

Looks like majority of the investors out there do not believe that there is any form of downside protection from its book value. After re-doing my sums, the conservative side of me will say there is still a bit of downside in the stock.

TR is 11m
Cash is about 19m
Total current assets is about 30m

All liabilities is 12m. So the net current assets is about 18m.


With another half a year of cash flow to come, perhaps 1-2m can be squeezed from the company.
That means the value of company is about 19-20m by the end of this contract.

The market is selling now at 27m.

That means about 7-8m of "shortfall" in value has to come the non-current assets, which is valued at 18.5m thereabouts.

Composition of the non-current assets as follows:
Leasehold buildings: 4.9m
Equipment: 5.6m
Motor Vehicles: 8.6m

Most of these can be sold off at discounted prices, especially equipment and motor vehicle. I suspect there is a 2-3m shortfall in my valuation. Clearly, my purchase was too dependent on Colex winning the Jurong bid. So the market is not selling Colex at a depressed price, unless it is below 17 cents a share.

I am quite disappointed at myself. Perhaps I was in a rush to deploy capital during peace time.... I need to work on the discipline to hold cash during peace...

Sep 2019 Portfolio Review

STI (ES3) returns: 3.087-> 3.126 + 0.12 (dividends) =5.15%
HSI (2800) returns: 25.25->  26.7 + 0.15 (dividends) = 6.34%
S&P (SPY) returns: 254.38 ->  291.12 + 1.43164 (dividends) = 15%
Current Portfolio return: 17.35% (bond, stock and funds invested for mum), 24.12% (my stocks only)

Transactions (September)
Purchase of LHT as prices fell as much as 10% intra-day.
Purchase of TTJ as prices fell to 0.21 a share
Purchase of Cosco Shipping Int, twice (2.25, 2.00), due to it being cheaper
Sale of Chuan Hup, due to LHT and Cosco being cheaper by book value.
Sale of Hotel Grand, due to cheaper stocks

The purchase of LHT took place just hours ago, as the price without news.
This is the problem with obscure little stocks that trade thinly. There could be no news, no earnings report, no hints, and stocks that trade thinly like this will have dramatic price movements. Hanwell moved tremendously since Monday. PC Partners, moved from 1.6x to 2 as I write. Hop Fung, which saw strong insider buying since 0.36, corrected from 0.4 to 0.36 in a single day.

This is what I mean when a certain style of investing becomes a kind of religion, a mental pillar or support which protect you from getting influenced too much by the market.