As of 18-Dec (Sunday),
S&P 500 Index Fund: -13.77%-> -17.36%
Hong Kong Tracker Fund: -17.22% -> -12.31%
Straits Times Index Fund: 8.24% -> 7.36%
My portfolio: -18.17% -> -12.17%
Transactions:
Further increase in Singapore Saving Bonds and Singapore T-bills. As explained earlier, these are for my mum. I have been laddering the investment-- for the uninitiated, it means to break up the total sum available for investment, instead of investing the total in 1 lump sum.
An example: assuming you have $100,000 to invest in t-bills. If you do laddering, that would mean:
Invest $20000 in Dec
Invest $20000 in Jan
Invest $20000 in Feb
Invest $20000 in Mar
Invest $20000 in April
The first batch that was invested in Dec would be available by end of May.
Given the popularity of these instruments, getting the full sum of $100,000 allocated is not going to be a sure thing. Laddering it this way also have advantages in liquidity-- in the event that we need money (I hope we will never end up in this scenario), that is 1 month of wait instead of 6.
End of Year Commentary
After a very kind two years of portfolio returns, this year's performance is the worst ever in my short history of dabbling in the markets.
The 80% total return lead over the current runner up, the S&P 500, has been cut to just 50%. Stock.cafe tells me that my XIRR is about 18%, which is great for someone as simple-minded as myself. However, it is scant consolation since this year is not just a down year per se, but also the year where the greatest amount of capital has been injected. So I actually endured a ton of unrealised losses. It was very humbling.
A discussion of my current holdings:
Like most people who invest in a value-oriented approach, none of my holdings were bought into because of good news. I will proceed to run down the list of companies in my holdings and provide the rationale.
My list of holdings look like a record of losers. My affinity for the disadvantaged started almost 30 years ago. Back then in my young teens, I was an avid street basketball player. Each day looked like this: once there are enough players are on the court, the "captains" will shoot free throws, and the winner will get to pick first.
I often pick the physically-inferior, the unpopular players. Because deep down inside, I know how it feels like to be nobody's choice.
When it comes to picking stocks, I think I am attracted to problems because nobody likes them. But they have a lot of potential to come back... as long as they are not too badly priced. I used to avoid betting on companies laden with debt. I don't know when it started (probably with Centurion), but if I ever survive this year (it is really a very, very bad year), perhaps I will never be this haughty again.
To put it bluntly, I am attracted to problems just like flies are attracted to shit. I guess. Heh...
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OKP: The biggest slice of the lot. I started buying OKP since the accident. It was at least 2018. Unfortunately this idea had not come to fruition. The last transaction was Nov this year-- I still have faith that this company is cheap and awaiting optimistically that the outcome of the arbitration would be favourable.
Alibaba: Everyone knows why.
Central China Real Estate and Central China Management (00832 and 09982 respectively): 9982 is an asset light spin off of 0832 and hopefully the cash/share is real. 00832 is deeply in debt and had a lot of bad news.
It took a lot of heart to hold on to both stocks. They did not receive much uplifting as compared to their sister stock, 9983, which deals with property management instead of property project management.
I don't know if I ever want to be in such a position again. 00832 has recovered significantly-- part of me which to liquidate after such a trying period. Part of me hoped for profits to justify all the pain and suffering I went through.
Investing is very hard.
Centurion: Prices were brought down to earth badly due to COVID. Unfortunately, even without the COVID overhang today, the value is still somewhat being suppressed by management. Based on its previous earnings power, it is cheap. During 2020-21, I could see that the dormitory business is irreplaceable as there is no alternative along with the NIMBY mentality, especially in a land-scarce country like ours.
YangZiJiang Finance: Another battered down stock. After reading the prospectus, I believe it is a case where by there will be defaults in its debt investment portfolio, requiring a huge amt of write-offs. It is a case of market overcorrecting the stock. However, I am not a fan of the chairman. YZJ Finance would rise and fall with CCRE and CCMGT unfortunately.
I have strange affection for beaten down stocks, especially when they are spin-offs.
Fu Shou Yuan: This was another stock beaten down by COVID. It enjoyed a revival due to (I am inclined to believe) loosening of COVID-controls. I shall not say much except that the company deals with the after-life management. ROE is in the young teens. Such stocks do okay over long term.
Lendlease REIT: This was a COVID-recovery play; it had the least amount of leverage amount the retail REITS. I didnt not invest a great deal initially due to its customer concentration risk (2 main properties only back then). As time goes, the REIT decided to buy up JEM and also did private placements and a rights offering. After listening to the CEO, I believe that the REIT is in good hands. The REIT is also small and has room to grow.... unlike most of the giant REITS in Singapore.
Nanyang Holdings: Given how illiquid it is, I did not acquire a great deal of stock. This is one of my many holdings that went down >25%. The company have also subscribe to its full allocation of Shanghai Commercial and Savings Bank. It wasn't a popular decision-- about 1/3 of its shareholders voted against it.
To be honest, I have no idea how this company will pan out, i.e. what catalyst would there be? The oldest, first-generation manager had left this world. I doubt the successor will act differently. But there is a respectable price to value gap difference.
Perhaps this is why I like companies with problems. Nanyang Holdings has no known problems. Many others in this list does. The resolution of problems acts as the catalyst, and unfortunately Nanyang has none..
Activision: Arbitrage play.
Didi: Wrote put options and it went terrible wrong. Wonderful lesson.
The rest of the positions are too small to matter.
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As 2022 comes to an end, I wish everyone reading this the same things that I prayed for every day: that my parents would be treated kindly by the powers up there.
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