December 2021 Update

As usual, returns first:

SPDR Singapore Straits Times Index Fund (ES3): 17.18% (8-Nov) ->  11.78% (6-Dec)
Comment: I have no idea that the STI went down so much.

Hong Kong Tracker Fund (2800): -5.02% -> -7.64%

SPDR S&P 500 ETF (SPY): 29.19% -> 27.05%
This is a much more modest retracement than it felt from reading the news.

My portfolio returns: 37.70% -> 44.09%.

The increase is attributed to Central China Management prices going way back up.

It went as low as 1.04  last month to 1.67 today. Average price is about 1.4. It is now, on value, my 2nd biggest position alone, without considering CCRE into the picture.

Notable Transactions:
1) Purchase of Didi as the put options I wrote expired well in the money. 

The strike price was 7 and it was set to expire last Friday. It was dumb: I was trying to close the position on Thursday and the bid was only a few cents apart. We all knew what happen on Friday: The SEC did Chinese firm investors no favors with the rule change. The stock went down 22% and the put options went up by 1400%.

Since the IPO price is $14, I suspect there are a few possible outcomes:
a) Delisting at a small discount to $14, followed by a re-listing in HKEX.

This is actually the outcome most bullish investors are hoping for. 

a2) Seamless transition to HKEX/China market without much delay

Without a reasonably long pent up period of uncertainty, the sell down will be less severe than (b).

b) Conversion of shares to HKEX.

This is the least favorable outcome. Most investors (if they have not already) would realize the loss for tax reasons. Investors are likely to sell when they list in HKEX due to uncertainty. If Didi decides to go for this route, the time to buy is after they were re-list.

c) Nothing happens

And CCP friendly officials get elected to the board. This is also unfavorable.

2) Initial investment into Futu Holdings, and wrote a contract of only 1 put option for it expiring Dec 31, strike price 40. I expect the probability of this contract to be exercise to be very, very high.

The plan is to invest more when the price drops from 40-> 30.

3) Increase in Alibaba Group due to lower prices. At the moment of writing, Baba in NYSE lost almost 10% last Friday, and this should carry over to Monday's trading in Hong Kong. I am expected to buy more.

They always say: don't catch a falling knife. My left hand brain tells me to use simple TA to find a bottom (none as of now). But the market turns all the time. If one is to wait for clarity, it is often too late... by the time things are clear, the price would already have moved.

At what price would Alibaba be really a steal? I think it is somewhere around the 80 HKD mark. But I am way more conservative than others... and I don't think others would wait.

Notice the language here? I am thinking about how others would behave: This is already trading.

Having said that, while prices are not great at the moment, it should do OK over time. 5 year horizon.

4) Modest increase in CCRE (832) due to lowering prices

Notes:

I have did an interview with Boon Tee last week and the video was released on Saturday.

The main message was being conservative on investing, hence there were no specifics discussed about my portfolio construction, etc. I think it is great since I write better than I talk (Boon Tee did a great job to convert my mumbling into sensible pieces), and it is quite a dry and technical subject.

I will try to write a year-end review in a few weeks time.