November 2021 Update

I am posting my November updates early admist a string of bad news. The worst of all is the my mum's health screening report has some worrying numbers, and my portfolio experienced a major sell off in a matter of days. I would probably be spending time quietly for the rest of Nov and most of Dec, getting drenched by the sell down in stocks and fate. I guess.

SPDR Singapore Straits Times Index Fund (ES3): 14.55% (as of 20-Oct-2021) -> 17.18% (8-Nov)
Hong Kong Tracker Fund (2800): 0.33% -> -5.02% (wow, this is shocking)
SPDR S&P 500 ETF (SPY): 23.77% -> 29.19% (shocking as well)

My portfolio returns: 42.95% -> 37.70%

In a matter of less than 20 days, my portfolio plunged 5.2%... we get to why in a moment.

Notable transactions:

-Major increase of 16% shareholding in OKP.

-Divestment of Renrui HR Technology. Since the stock price plunge to less than 10 a share, not a single insider has bought stock. The effort to lure staff in financial sector will only not pay off so soon. 

-Reasonable initial investment in Central China Real Estate (CCRE) and increase in Central China Management (CCMGT).

-Bought modest amount of call options at 18.00 strike, for Pershing Square Tontine Holdings, expiring in June 17, 2022, at USD 2.20. That means I am paying 20 cents for each probable SPARC warrant (IF SEC allows), and enjoy a significant upside if they manage to find a deal before June. Nevertheless, it is expected that the situation would be clearer before we reach June.

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The PSTH situation can be summarized into the following
1. It is a SPAC that was suppose to be shareholder friendly.

2. It is the biggest SPAC at 4 Billion 

3. It was suppose to acquire a good portion of UMG but was striked out by SEC

4. Stock sold down as the UMG deal was consummated by Ackman's PSH instead.

5. UMG soars due to record profits

6. Lawsuit brought on PSTH-- accusation that they are not suppose to use funds for investments on Treasuries.

7. PSTH is now trying to get permission to allow them to distribute warrants for an entity with no shares, which is not allowed.

Given that a SPAC is suppose to get a deal done in maximum 2 years, it is likely that by June 2022, there will be clarity to what PSTH's future holds.

Firstly, Ackman is still brilliant in finding deals.

Secondly, if the lawsuit get settled, it should be favorable to PSTH's current price, which is 1% under NAV of $20.

Thirdly, I think options is a cheap way to gain more of the upside. Suppose I would to buy 100 shares of PSTH, that would be 2000 USD outlay. I could use the same amount of money to control 700 shares.

Given the long expiry nature and a somewhat known date that something would happen then, I think it make sense to take a little risk to buy those options.

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Portfolio Concentration

At present, my top five holdings are:

OKP (31.88%)

Carpenter Tan (11.25%)

TTJ (9.69%)

Centurion (9.42%)

CCMGT (8.16%) //CCRE would be 4.61%. Since the fate of both companies are irrevocably linked to the real estate trough, it would be right attribute them together as one. Hence, 12.77%

So my portfolio concentration is now 75% for six or five stocks, the way I see it... volatility is going to spike up for sure.

Both CCRE and CCMGT sees major selldown 25% and 11% respectively. The selldown for CC* stocks is brutal. Portfolio is further dragged by sell down in Alibaba.