March 2025 portfolio update

Year to date:
My portfolio: 35.72%

S&P: -6.29%

Tracker Fund: 15.25%

STI: 5.92%

Notable transactions: as the price of OKP revised upwards, 1 took profit on about 1/3 of my entire holdings. The extra liquidity was used to purchase CityDev, prior to senior Kwek's decisio to drop the case. Additional capital from CPF was used to purchase more CityDev after the announcement. I have now around 2000 shares.

Personally, I do not think of this idea as a high conviction one there are no known possible catalyst, other than the need of an extremely powerful and rich family to save face, and demonstrate competence.

 There is of course a lot of value in the stock but the dividend is far from risk free rate. Shedding as much OKP that I have result in way more capital than ideas I have at hand. That perhaps could explain the lack of discipline in deploying my capital. 

The lack a discipline extends towards a short-termed punt on BYD based on trends/charts/news. The end result reminds me that I am at most a mediocre trader. A modest amount of profit was the outcome of this effort.

I watch with interest at the recent earnings release from Nongfu Spring and Anta Sports. NFS faced both political and customer retention weakness. The company shown slowing growth from its bottled water segment, and vey encouraging growth from other products, esp tea. I wagered that negative public sentiments towards the stock should be short-lived. However the price is still a little too high for my taste, even with option selling advantages to potentially bring down the price.

Anta Sports earnings show similar consumer weakness, but more aligned with a more cautious economy than specific sentiments to the company. Long term thinking, as well as above average ability to tolerate downturn in prices, could possibly make this a profitable holding.

My experience with FuShouYuan may dissuade me from this thought. it is far easier to bet on book value plays than compounders. The dividends at FSY is large, and it is possibly a hint to share holders that long term growth is impacted. I like Anta Sports dividend-- though modest, it displayed a steady upward trend.

Speaking of dividends, Clifford ML dividend held strong, possibly buoyed by silver bullion's rally . I disagree with such an investment but even taking a late haircut off the current value of silver, the stock price is not high. Though it is no longer the bargain stock that it was.

The last book value play is Powermatic Data. Some of my mates called it Problematic Data in jest, and I love companies with problems. The current problem is earnings, and its new CEO night be able - to handle that however. The apparent value with this stock is the building which the company is repurposing... with the belief of the board is that it would bring in more dough than just selling the building outright.

With book value play, the game plan is simple - accumulate on weakness. For compounders, concerns about earning power is impacted long term isn't that apparent sometimes..

Feb 2025 Portfolio Update

Portfolio: 30.33% (was 9.35%)

ES3 (Straits Times Index Fund): 3.34% (was 2.34%)

S&P (S&P 500 Index): 0.56% (was 1.77%)

2800 (Tracker Fund Index): 13.26% (was 4.32%)

It was days before the last update and plenty of things happened for my portfolio.

Not only did OKP did very well in the days after earnings release, Alibaba had a revival (again?) that was way more optimistic than the last 2, or 3 times where it rose and faltered.

In fact, the HSI did very well in a matter of days, but Alibaba's rise seems especially prominent as Xi seems to soften his stance on private enterprise and 'common prosperity,' a term that I still struggle to understand.

The market treat me very kindly beside the upmove by Alibaba and OKP. Clifford Modern Living release a special dividend of HKD 0.112 per share. That removes 113.8m (or 104.9m RMB) of cash from its books.

What is the residue value? Clifford has100m RMB of deposites, and 344m of cash before this announcement. It also have 62.8m in silver bullion, which should be lower than market value since silver prices went a little higher since.

It has  payables of 118m - 34m of receivables, which net to 84m. There is about 60m of other liabilities, so total up there is 144m of liabilities.

The liquid assets totaled (100+344+62.8) 506.8m, and taking away 104.9m for dividend means it is 401.9m of net liquid assets. There are 144m of liabilities, so the result is 257.9m RMB.

There are 1015.75m shares, and current stock price is 0.67 HKD. That is a market cap of 680m HKD, or 636.7m RMB. Buying stock now is paying for a enterprise value of 378m.

Free cash flow is about 80-150m in the last five years. Even if we looked back last 10 years, the lowest was 77m. So I think it is perhaps wise to hold on to the shares.

Clifford has been quite a good investment, yielding me 70% returns so far. It is my third biggest position.

Transactions:

Sold out the small position of Wee Hur in CPF portfolio. The language and tone from the directors at the AGM don't sound too shareholder-friendly. Wee Hur, iirc, doesn't have a good track record in being so in the past, but who knows it might do a Centurion (I lost 200-300% returns on this, it was my third biggest position) and bite me.

Took profit on a small amount of OKP. OKP still weighs 40++% of my portfolio.

About 1500 shares of Alibaba, which is 3 call options worth of shares, were called away. I also had purchase 2 call options of Alibaba some time earlier, strike price 125. These option expire at the end of the year.

That is all I guess. Grateful that the market is kind to me, and will be looking out for how Anta Sports do in a few weeks, after earnings. I have quite a bit of synthetic positions, through options, on it.

Thank you OKP.

The agreement to terminate the viaduct contract with LTA. 2018.

Bread and butter projects for OKP-- maintenance.

Some questions wrote in prior to AGM

It took a long time to build up a position in OKP. This was 4-November-2020.

AGM in 2023, where its fortune were starting to turn for the better.

OKP was probably the first company I bought based on the basis that a company is under some sort of duress but is likely to recover. The very first shares were acquired in 2017-8.

The viaduct collapse was followed by mutual cancellation of the project. Shortly after, employees and directors were hauled to court. 

All troubles do come to an end. Things start turning for OKP, beginning with Mr Or Toh Wat having his charges withdrawn. Then in 2019, the arbitration between CPG Consultants and OKP came to a close, awarding some 40++m to OKP. At the same time, the valuations of the shophouse properties began appreciating as the world fought COVID. 

When 40++m were finally transferred to OKP, the market was very disappointed when there are no special dividend. Instead, the management was awarded directly by bonuses. Whether the investors believed the explanation given by directors during the AGM then (it was family tradition to withhold all dividends payout to the directors for one year, for financial prudence) or that the market has a short memory, the price did recover a little.

During the last two years, OKP won tenders for various cycling track projects, and they turned out to be extremely capital-efficient (high gross profit margin). The management was quite confident that the margins could be maintained.

Yesterday's result release reflected that confidence. A special dividend was also declared (2.5 cents).

The amount was probably the biggest since the period 2009-2012.

The share price was then between 50-90+ cents a share.

Perhaps today's move signifies some kind of recovery. But I am pragmatic-- I believe that being project-based, earnings are volatile and hence thinking in terms of price-earnings ratio is a little inappropriate.

***

I think I will remember today for some time.

OKP is, by far, my biggest position, ever. I had over 540,000 shares at one point. For years I have been telling my friends to buy OKP when prices was depressed (around 19 cents). I shared what I knew but few are convinced.. and even those who were convinced could not withstand its lack of liquidity.

The lack of liquidity means there will be no exit doors should my friends wish to sell. I had to adsorbed a modest (retrospectively) amount of shares from a friend, using the open market, on the day's bid-sell price, because that friend could no longer endure the liquidity.

I looked stupid for almost seven years.

Today's +20% move elevated my portfolio beyond S&P 500's return (at last). My portfolio was severely impacted by realized losses in Central China Real Estate. That realized loss alone, was 20% of my portfolio size, and it crippled my confidence and XIRR.

Those losing years brought back a little sense of empathy. I began to understand why some of my friends bought crypto, or meme stocks. I probably wouldn't feel so sympathetic if I never have lost money. Success in my earlier years blinded me from pain.

Losing money in investments in 2022 and 2023 wasn't the only

I started having issues at my workplace in 2023. My mum health (and still is) had issues, and I seen the inside of an A&E more than I wished to.

***

Truth to be told, I was looking at my phone with wet eyes as the market opens. I was at TTSH with my mum... and I told my mum we can afford a little luxury today. 

Instead of queueing up with 30 over people for coffee in TTSH's canteen, I went next door and bought us a couple of latte. Instead of just having bread and butter sandwich prepared from home, I bought a pot of hotpan chicken from the Korean food stall.

Thank you very much, OKP. Gratitude is all I have for what I experienced today.

Year-To-Date Update (Feb 2025)

 

That is me, recently. Not sure what happen but I hope it isn't anything huge.

Portfolio: 9.35%

ES3 (Straits Times Index Fund): 2.34%

S&P (S&P 500 Index): 1.77%

2800 (Tracker Fund Index): 4.32%

Major Transactions:

(1) Bought 1000 shares of Anta Sports to sell covered calls on. I am moderately bullish on Anta and Intrinsic Volatility for Anta is making the price of these calls worth it. Buying stock and selling calls of overpriced assets don't make sense to me. Yes, volatile, but highly overpriced stocks, like Nvidia and Tesla in the past, gives a option writer eye watering gains. But attention should be paid to risk-- I don't want to hold these stocks at current prices.

Nvidia, Current price: 129.84 Strike 130. Call option price 8.3. Expires in 19 days.

Tesla, Current Price: 361.62. Strike 365. Call option price 15.6. Expires in 19 days.

Anta Sports, Current Price: 86. Strike 87.5. Call option price: 3. Expire in 17 days (27-Feb)

Alibaba (HK), Current Price: 100. Strike 100. Call option price: 4.47. Expire in 17 days.

The yield respectively:

Nvda: 6.38%

Tesla: 4.27%

Anta: 3.43%

Alibaba (HK): 4.47%

The idea that rewards should commensurate with risk is seldom violated. As of now, I feel that Anta is moderately priced for its financials.

(2) Sold 1000 shares worth of Anta in put options and bought 1000 shares of Anta in call options, expiring one month.

This is what I would call "hand itch" trade. This trade is known as a "synthetic." Very little amount of money was put up for this trade, which would expire in 2 months. Realistically, due to theta decay, I would start selling a month or so before expiry.

Stocks: Since Anta Sports cost 85 HKD, 1000 shares of Anta cost 85000 HKD, or approx 14800 SGD

Options: Selling put (strike 85) gave me 4.62 per contract, and cost 4.95 (call options strike 90) to buy those call options. Each option contract is 200 shares, so I need 5 contracts= 5 * 200 * (4.95-4.62)= 330 HKD, or approx 60++ sgd.

Obviously that would mean Anta has to go close to 95 HKD for my options to start making money. Next month is earnings month, so it is worth a punt.

A short note to perhaps end the year

Sorry for the lack of updates.

I have been distracted by pool of late. My mum's colonoscopy is this Wed, and she has signs of anemia, so I am very worried.

So why I have been playing pool? I was simply trying to win something for a group of people. I think these people deserve it, and I want to try my best for them. I want to accumulate some karma for my mum. Hopefully the colonoscopy and result go well.

The last few months has not been great for my portfolio.

We experienced the rise and fall of HK equities. Unfortunately, I thought that it was a good bullish market sentiment and choose to cover my sold calls on Baba, realizing a loss of 5000++ SGD.

It was in vain as the market fell back. It means that my option income has effectively halved.

I also lost the same amt, or more, when I sold calls on Anta Sports. This, I did not cover, and hence I got my stock called away at cost.

I also witness stocks that effectively would have gone 200% up if I stayed (Centurion).

Overall, I can't say I have a very good year. But I am more worried for my mum now.

Looking at my portfolio returns, I was up 41% and now it is a mere 31%, equaling the S&P 500.

Both HSI and STI is about 23% equals.

I don't have any wisecrack advice.

Just feeling very worried day to day.

September 2024 Portfolio Update

As I wrote, Alibaba just closed another 7.3% up in one day. CSI300 index went up about 7.21% itself (at one point, it was 10%).

"The boat has left the.... p**t"

S&P500: 17.62% was 16.63% 

Tracker: 21.91% was 8.21% (what a month it has been) 
STI: 15.13% was 10.73% (it was quite a climb. Banks's shares are ATH)

My portfolio: 39.74% was 25.78%.

Please disregard this month's return as a bulk of it comes from Anta Sport's rally. As wrote in the previous post, I sold calls for all my shares in Anta, and as such there would be no gains at all. The gain in Anta would had been a cool 22.03%.

//last minute edit: I recall that Cordlife was also responsible for some of the increase this month. 

Unfortunately, the market rally also brought my Alibaba sold-calls to ATM. Volatility for calls outpaced puts-- in other words, if you have bought the shares at 110, and sell a call, you received about 6.6 dollars. If you have sold a put at 110 strike, the premium is 5.6 dollars.

This reflects a market sentiment skewed towards bullishness.

Alibaba represents 13.29% of my total equities portfolio. 

***

The somewhat negative impact of this market rally is not the main reason that my mood is as poor as the weather. My mum's glucose level is now extremely elevated, and her anemia did not improve. The latter requires her to go for a colonoscopy in the next two months.

It is another period of worries.

I have not been paying too much attention to my equities portfolio either. Hence, I am running low on ideas to buy and hold long term. Should I put more capital into the options strategy? I am unsure.

It is quite depressing that Alibaba, a share that I have held for some years (and undergone quite a bit of up and down), is now on its ascend and I am likely not part of it. Is this what most investor cautioned against-- having too much sentiment for a stock? Maybe.

***

Did selling option cost me a ton of capital gains? I would think so...

I have sold calls on...

Tracker when it was 17

HKEX while it was 220

Anta Sports while it was 60-70++

Link Reit while it was 35

and... Tencent while it was 300~!

***

How options can make you look dumb and smart at the same time

As I wrote, the HSI had an incredible week, and the Tracker went up 4% by itself. 

There were many outsized, single-day gains, particularly the ones that were long suppressed (tech comes into mind), and real estate. Heck, even China Vanke went up 20%.

The Dumb

Most of you would know that I have a income strategy with selling options-- through the virtue of a bull market, most of the calls I sold are exercised. A few good examples of missed gains:

Link REIT: wrote calls at 35. Today's price: 38.9
Commentary: I don't regret this being called away as Link REIT is a dividend payer. Dividend payers have very low volatility and hence very little premium yield. I didn't make any money with this one as I have to sell calls below my cost price. The dividend of 1.x HKD distributed was my saving grace, else I would be staring at capital losses.

Tracker Funds: wrote calls at 18. Today's price: 20.66
My cost price was 17... and I wrote calls for the same reason: Volatility on the tracker fund is way too low, and premiums are insignificant.

The Very Dumb

The only stock left in my portfolio as Anta Sports ("Anta") and Southwest Airlines. I regard Anta as a good company-- and selling puts on them have been more comfortable than most. Through the selldown last month, I have acquired a sizable amount of Anta, approximately 50% of the NAV of my income portfolio. 

The problem is, because Anta is already substantial, I did not sell a huge amount of puts this month, but I did sell calls on them, and unfortunately I sold calls on ALL of them.

So when Anta was priced at 69.4 HKD on 16 Sep, with my cost price of Anta at 77.3 HKD, I sold calls at strike price of 77.5, collecting a premium of only 0.417. The premium would be very low if the expiry is on 27-Sep (note: Hong Kong Exchange's options are only available monthly), so I sold the ones expiring on 30-Oct.

So what happen yesterday, 25-Sep?

I was in two minds on 23-Sep and 24-Sep if I should roll my options. Anta was priced at 75 (recall that my strike is at 77.5, expiring 30-Oct). So on 25-Sep, the stock open at 81.45 (practically busting my calls) and I was resigned to it being called away. What happen? the day ended back at 76 HKD. I felt like a genius for not covering/rolling my sold call options.

Charting can make you look like a fool sometimes. Notice the near term resistance at 80 HKD. The price action on 25- Sep would have hint that the market, as a whole, is not ready to go beyond that price point.

So I was reading this and thinking: this is great. Maybe I don't have to cover my calls.

Then today happened.

My call premium was 0.417. FML.

It would cost me MORE than the unrealized profits to cover this "short."

Note that Anta is now priced at 86.85. The strike of this option is 77.50. So there is a intrinsic value of 9.35 HKD. The additional 2 HKD is time value of the option, as well as the spike in implied volatility due to movement of the underlying.

So, what should I do now? Nothing. There is still time remaining in the option, and realistically, no option buyer (the other party in this contract) would exercise the option now (hence forgoing the 2 HKD worth of time value). The only time this happens is if there is a dividend of more than 2 HKD coming up.

The blog post is titled "How options can make you look dumb and smart...".... so where is the smart part?

The Smart
As my income portfolio is looking thin at the moment, I was looking for candidates to sell options for, and ran my screener for good companies. Good companies are basically compounders. They have decent ROE/ROICs, and usually are not priced cheap. A 52-week low of this list reveals an outstanding candidate for investment.... Nongfu Springs ("Nongfu")

There are two sides of the coin with Nongfu Springs. The pro side is: Nongfu has problems that are not economical in nature. Overly nationalistic rumours swirled after Wahaha Holdings' owner passed on, and certain Nongfu products have Japanese-looking design on them.

And then, there was this report of too much bromate.

This result in revenue falling for this natural water segment, but the other segments still displayed growth. I believe this problem is temporary.

However, Nongfu is priced to perfection, despite it falling to as low as 23 HKD a share. This is substantially lower than its IPO price, but by no means it present itself as a silly bargain.

There are two ways you could use options to acquire a position "for free." Notice the quotations-- they are NOT free and comes with their risks.

1) You sell ATM puts and use that premium to buy ATM calls. On normal days, the price should not be too different... if the premium for a put is 0.5 HKD, the call should be close. Today, however, isn't a normal day-- markets are way too bullish and demand for calls went sky high.

So what is the risk? If the stock goes down, the put you sold get exercised, and you have to buy the stock. But hey, you were ready to buy the stock anyway, right? So this isn't too bad.

2) You could use a call ratio backspread. 

A call ratio backspread involves selling a ATM call and using that premium to buy twice as many OTM calls.

E.g.: So assuming you liked Nongfu Springs at 28 HKD, but you are mindful that it still has problems and could go way down.

Selling a call, expiring at the end of the year,  at 28 HKD gives you 2.4 HKD. You would need to buy 2 contracts that cost you 2.4 HKD-- looking up the option chain, it happen to be priced at 31 HKD

So if the price goes down, you lost nothing as the sold call becomes out of the money.

If the price climbs gradually, you start to incur loss on the sold call. The moment the price goes beyond 31 HKD, those two call contracts that you bought becomes in-the-money, and the value of these options increases as the price increases. Eventually, if the stock does "moon," you close both positions.

You should only use a call ratio backspread if there is substantial downside and a substantial upside.

Well... hopefully this bull market have legs.

August 2024 Portfolio Update:

 S&P500: 16.63% was 17.19% 

Tracker: 8.21% was 4.17% 
STI: 10.73% was 8.13%

My portfolio: 25.78% was 23.86%.

I generate this image by asking Gemini to replicate the Disaster Girl Meme but sub the girl with a cat instead. Hopefully my portfolio don't burn like the house.

Despite the portfolio return, the last week was pretty turbulent.
Topics today:
-Brief talk about -10%++ FSY, Cordlife and Best Mart 360. 
-Why investing in Nanyang Holdings is a poor idea.
-Option Income Portfolio update

***

-Purchase of a token amount of Fu Shou Yuan just before earnings, at 4.7$. I thought that earnings for this company would be modest but steady... however, it was anything but that. Management implied that the year before, China's re-opening from COVID released pent-up demand for its services. Unfortunately, the economy does seem to slow down, and earnings and revenue are down almost 30%.

This resulted in an intraday loss of 13% and subsequent falls means I am down 24% on this position. 

To be honest, if FSY's trouble are temporarily, the stock is looking very cheap. HOWEVER, management cut dividend for the first time, which signals that tough times are really ahead.

***

Another stock that has gone nowhere is Nanyang Holdings, who released earnings earlier this month. There isn't anything optimistic about its earnings, and the Shanghai properties' land use right is still under negotiation for years!

The company also tried to be too fanciful with its investments, jumping around different asset classes. Check out the latest interim report's Financial Investment section:

Performance of the world equity markets, in the first half of 2024, was uneven. U.S. inflation fell more slowly than expected and interest rate cuts were pushed back to the latter part of the year. However, during this period, the U.S. equities market continued to perform especially the tech sector. China’s recovery, on the other hand, has been slower than expected and more stimulus was needed to address weak domestic demand and to stabilize the property market. During this period, we reduced investments in emerging market equities and increased investments in investment grade U.S. bonds. For the six months ended 30 June 2024, the investment portfolios, including cash held in the portfolios, increased by approximately 6%. Financial assets at fair value through profit or loss, classified as current assets, totalled HK$419.8 million. This represented approximately 8.3% of the total assets of the Group. They were well diversified and comprised approximately 350 individual holdings. The Group recorded net realised and unrealised fair value gains of HK$22.7 million or equivalent to approximately US$2.9 million and investment income of HK$2.7 million or equivalent to approximately US$0.3 million. Equities comprised approximately 67.6% (of which U.S. 57%; European 17.6%; Japanese 3.6%; Asia ex-Japan and others 9.5% and Emerging Markets 12.3%), bonds 23.5% (of which U.S. 62.1%; European 22.6%; Emerging Markets and others 15.3%), commodities 4.1% and cash 4.8%.

God. If your portfolio size is ONLY 420m, and you have 350 holdings.... that is way too much diversification. Your returns is only 6%, and one could match that with indexing.

(I haven't have the energy to dig out its multi year investing returns. But reading its "strategy", I highly doubt they can make a difference)

Anytime someone said that they have 50 stocks, my perspective is that they had probably hit their portfolio targets and are in defensive mode. The target, would be to match market returns. If one wish to capture market returns, why not just buy ETFs outright?

I wish I could take a plane over and quiz the smart ass management on this. The daughter of the SSH is joined the investment committee recently, and she was ivy league graduate. 

(God, she has 2000 shares in Nanyang Holdings. I can't believe a peasant like myself have more)

I was hoping that things would change, but as of now, nayyyyyy.

If you want to invest proactively, be paid a respectable amount of money, then start pulling your weight.

Cut that portfolio to a respectable amount of, let say, at most 20 stocks. Even if you were to divide that 420m equally, it is still around 20m each. It is not difficult to find good investments to buy with 20m.

Nanyang Holdings' market cap is a mere 810m HKD. The balance sheet contains the following:
-underperforming investment properties, valued at 2.28B

-Financial assets at fair value, both current and non-current, at 2.5B (most of it, around 2B, is invested in SCSB, Shanghai Commercial and Savings Bank ~2B)

-Cash and eq of 100m

Looking at the returns from its real estate business in 2019, it is only ~80m yearly (ignoring fair value gains), and at its stated book value of around 2.2b (again, ignoring that years' fair value gains), that is only a return of 3.6%. Right now, it is worse as rental is soft, and the land use rights is in limbo. 

If I am the CIO of this company, I would move to liquidate the investment properties. Even at 50% haircut, it is enough to privatize the whole market capitalization of Nanyang Holdings!

Don't be the only reason for your existence is to be a lesson for others.

***

Beside FSY, another stock that lost > 10% in a single day ... was Cordlife.

Sometime earlier this month, the Substantial Share Holder (Sanpower), through its investment holdings in Blue Ocean, which is the entity formed for the liquidation of GCBC (Global Cord Blood Corp) , sold a good amount of its shares in Cordlife to an entity call Manital Best, controlled by a person call Kang Lan.

There isn't much information about this person, but some googling (and largely guessing) that she is a high level management in CBC Group. I am going to assume that this is an intelligent bet by an insider (of which I mean an industry insider, no some financial market manipulator).

All this while, NJXJK, which is an entity controlled by Sanpower Group, had been writing letters to the board, outlining its desires to bring the company private and yet also highlighting issues. It was very amusing to me because:
a) Cordlife's board of directors is largely already in control by NJXJK

b) If you really want to ask a lady out, you wouldn't ask 6 times and take a rain check.

So NJXJK did everyone a favor and expressed that they will pass on the privatisation offer on its 7th letter.

This resulted in a intraday loss of almost 13%.

Very fortunately, the group reported on Thursday that MOH has given them the go ahead to resume business. The stock rallied 10%.

Both the decline and recovery were hilarious to me. Cordlife's issue was never if it was cheap or if it would fail to be a going concern (removal of license, or operations made obsolete). It is whether the company can survive the legal issues. It is largely expected with that business would be allowed to resume.

There are a few likely phases that I foresee

a) In a matter of 2 years, we should have clarity on how the group representation (of which there are publicly known to be 2) would go. One is from Peter Lee Chambers and the other, Withers KhattarWong. Both are in early stages of the legal process, and I think they have yet to contact Cordlife.

If the group representation efforts were to fall flat, it is likely to result in value revision of at least 50% from today's prices. The sooner we have clarity on the legal issue, the better it is.

b) Someone would be held accountable, charged and "hang" in public to appease the customers and repair its reputation

c) Aggressive PR efforts to regain trust.

Is Cordlife still cheap?

It has 17.4m in cash, another 8.8m in Pledged FD which is about 25m. Coupled with another 36m in fixed deposits and 5.6m in short term investments, you have about 56m in cash alone.

Its contract assets of 62.5m (hopefully no major impairment)  is matched by its contract liabilities of 62.9m. 

It have interest in other companies as well as the building in Yishun.

Cordlife has no debts, and its market cap is 36.7m as of 31-August.  Its CAPEX is about 3m yearly. If we bump it up to 5m (legal representation and testing fees) for the next 3 years, and that its operating cashflow continues to bleed 10m yearly, it has about 2 years of time to sort itself out before the liquid asset value-price gap closes or ceases to be appealing.

***

Joining FSY, Cordlife in a 10% drop intraday group is Best Mart 360. News broke that its CEO is under arrest, and the stock fell 15%, only to recover to -1%. It was crazy.

And on 28th Aug, the results look... impressive, and they announce a good dividend, so it went up over 11% in 3 days.

I don't have a big position on this stock, so I was ambivalent.

*** 

Option Investing Portfolio

The Tracker Fund have a substantial recovery this month, and most of my sold calls were exercised. I had sold calls on
-a small residual amt of Tracker Funds
-Link REIT. I realized a small amount of loss or break even on this, because of the dividend.

That means all my stocks, except a decent amount of Anta Sports, were called away. I like Anta Sports, and I think it has a respectable amount of volatility. I am also thinking about selling puts on Southwest Airlines, as it undergo pressure from Paul Singer and gang.

On a start up capital of 50000, 

Dividend: 445

Capital Gains: 297 (much reduced due to selling calls on Link REIT with strikes below my cost)

I had little but no choice to sell Link REIT at 35, even though my average cost was 36++. This was because Link had so little volatility, and much of my capital was tied to it. 

Income: 9000

Current returns: ~19.4%

Hopefully I maintain my discipline and not get too aggressive....

July 2024 Portfolio Update

S&P500: 17.19$ was 18.34% 

Tracker: 4.17% was 9.19% (yea, the depressing times are back)
STI: 8.13% was 5.29% 

My portfolio: 23.86% was 25.47% 

Because of shit that happened at work, I decided to focus a lot more of energy into it, to the point that I think I am a nuisance.

It is nice to be rich, not having to deal with all that except to please yourself. Times are both brighter, and darker, for myself.

I do spare a few minutes to update my income strategy portfolio, but I failed to realize that one of my positions was actually a roll-over position to next month. As such, I sold more calls than I have a position for (naked). 

So now I have two choices
(a) Cover the roll position (which is safely more than 50% gain) by the adequate amount
(b) Purchase more shares of the underlying in order to make it a covered call.

I am thinking of doing (b) as I believe the shares are a tad on the undervalued-to-fair side. This stock is Anta Sports. I know growth seems to be slowing, but it isn't a trend with this company alone. I believe the management have enough skin in the game to try their best.

On other news, I know the Mags 7 have suffered a bit this week, but it is only a handful of percentage. Should you sell or buy because of a couple of percentages? Would that have made all the difference? I doubt so.

I am sorry that there is so little to update. Other parts of my life is taking up much of my time.

June 2024 Portfolio Update

I love billiards and snooker.

Celine Dion: "I don't want people to wait in line if I don't have anymore apples"

I am almost done with watching Celine Dion's documentary by Amazon Prime and it is extremely heart breaking to watch with the medical trauma she underwent, her pain and loss in full display.

It was very depressing for me to watch as it reminded me of scenes that my mother went through. It frightens me even till this day, and I live in fear everyday, that something is going to happen, I need to watch out. 

I don't know how she is coping everyday with the loss of identity, the loss of her health, and even though she is definitely very wealthy, I think she would give up of all it just to be the Celine Dion I knew when I was younger.

S&P500: 18.34% (was 14.23% last month)

Tracker: 9.19% (was 13.91%)
STI: 5.29% (was 5.35%)

My portfolio: 25.47% (was 23.09%)

Option income was just north of 1100, which isn't great, isn't bad, considering that I did not truly utilized all my funds for most of the month.

The total profit from income options portfolio totals to about 7000 year to date, based on a start up capital of 50000. All profits will be plough back into the portfolio, which makes this income strategy not so income really. A real income portfolio gives you a sum of money that needs to be use every month, and I have the luxury of a day job.

My position in Anta Sports have increased by another 1000 shares as my sell puts went ITM. 400 shares were out of the money the day before expiry, but 27-June wasn't a nice day in the market.

It might start to make sense to go on an income strategy with Alibaba. The news of the convertible bond sale isn't likely going to make the stock soar in the near future, so an income strategy make sense.

In that, I sold ITM calls on my Tracker Fund positions and the counter party exercised a good majority of them. So with these funds, I have another 10k SGD of capital to sell puts on. Alibaba looks like a proper choice at the moment, and IV isn't too poor (neither is it excellent to sell on).

***

On a more personal note, it is another disappointing year in my main job, and I guess my fortunes has indeed changed for the worse. I think I could learn to adjust to this new normal, where one slides into mediocrity. What worries me is the decline of my mom's health. I wish she doesn't work that hard for her age.

Apologies for this very short update. There isn't any bright sparks-- no teachable moments to share.

May 2024 Portfolio Update (How to use options on Alibaba)

Anyone with Nvidia stock should look happier than this MaineCoon.

S&P500: 14.23% (was 9.3% last month)

Tracker: 13.91% (was 1.09%. Wow! 13% in one month)
STI: 5.35% (was 2.35%)

My portfolio: 23.09% (was 17.3%)

Notable Transactions

Increase in Cordlife after the announcement that application to set aside the interim injunction, so as to allow them to privately place some 51 million shares to some party, has failed. The total amount of Cordlife, alongside a rather generous uptick of 14+ percent so far, means 7% of my portfolio is now invested in Cordlife.

After the AGM, there are a few announcements, one that was published on 28-May-2024..

1) The interview and subsequently arrest of Ms. Chen Xiao Ling

At first, this might smell like bad news, but in reality, it is good because I believe the charges are the same as the rest of the ex-board members. My belief is that there is no financial fraud involved, and the board is only guilty of untimely disclosure. If so, that means all the board members at that time, of which Ms. Chen is a member, is guilty.

2) There are two potential group representation action against Cordlife. This is within expectations.

3) The company is further banned from collecting CBUs for another 3 months. I wouldn't be too anxious as the new board is barely days old, but this would be a matter of concern if things remain status quo 3 months on.

Other than this purchase of additional Cordlife shares, there are no other notable transactions.

My sold call options for Tracker Fund should be exercised, and I would receive a modest profit. This capital is now freed up where I could do options on perhaps Anta Sports or Alibaba. 

***

What follows are some suggestions of which one could use options to express his/her opinion on 9988.HK. I am skewed towards a bullish stance-- I believe this latest convertible bond issue is not a major factor. 

1) Synthetics (Selling a put and buying a call with the premium)

If you are already ready to buy the stock outright, do a synthetic first.

As of writing, the share price of Alibaba is 79.5 HKD. 

I could sell a put option, at 80 strike, for about 6 HKD and then buy a call at the same strike price, for about 5 bucks. Why is there a discrepancy in the price? A put at 80 is slightly in the money, and the implied volatility for puts (36.93%) is higher than calls (29.77%) 

Take note that this is a 94 day option, which is a 3 months. 

If one were to outright buy a call option (without selling a put), he should seriously think of selling the call (to close the position) with about 1 month left before the strike. This is because theta (time value) decay is the fastest in the last month.

But with a synthetic, our mindset is that we are ready to buy the stock anyway.

So instead of spending money outright for 500 shares, we are getting exposure with no "downpayment" except for meeting our margins for the put options.

A leveraged synthetic is why we are VERY VERY BULLISH about a stock. We could sell IN THE MONEY puts (which will give us a higher premium) and then, based on how much risk you want to take, buy a call that is either:
a) Deep in the money: This means your delta is very close to 1, which means every dollar of up /down in the underlying will affect your option price by the same amount.

b) Far out of the money: lower probability of hitting the strike, but cheaper in option cost.

A leveraged synthetic is leveraged not because it is an option play. Options are leveraged instruments per se. It is call an leveraged synthetic because an ITM put has a delta very close to 1, and a deep in the money call has a delta of also close to 1. Adding the delta together would mean you have double the price movement relative to the stock.

2) A Bull Call Spread.

One could try to buy an 80 call, and then sell a call at 100, both at the same time to expiry.

This effectively means that we are happy with a 20 HKD profit per contract. The math looks like this: You buy a call for 4.94 HKD, and then you feel like the upside is NOT much, hence you are OKAY with limiting your profit to only 100 HKD.

Selling the 100 HKD call will give you a premium of about 0.90.

The net cost is about 4$ HKD.

An alternative to a buy a long dated call and sell a short dated call. This make sense if you are very bullish about the stock (i.e. you believe the stock does not go down).  If you sell a long dated call, the theta is actually lower than a short dated call, which means as a seller, a long dated call is less advantageous.

3) A Call Ratio Backspread.

This is a extremely peculiar bet. What you essentially is to sell a ITM call at X dollars and then buy 2 out of the money calls that would add up to X dollars. 

The belief is that there is tremendous downside (hence you selling a call), and you are fine with a higher break even price on the upside. Eventually, if the price does go up a lot more, the benefit of buying 2 out of the money calls (they become way in the money) outweigh the mark-to-market loss of selling a ITM call (which is now also in the money). 

It is this selling of the call and its associated mark-to-market losses, when the prices go up, that push up your break even price.

I think this is not the best strategy to use for Alibaba is there is a known "cap" to the upside of 105. 

***

Unfortunately, my cost price for all my Alibaba stock is also about 101. Hence, I am somewhat "forced" to do something about my shares.