June 2022 Portfolio Update

As of 19-June-2022:

S&P 500 Index Fund: -14.49% -> -19.97%

Hong Kong Tracker Fund: -14.91% -> -6.18%

Straits Times Index Fund: 3.02% -> 0.53%

My portfolio: -11.64% -> -2.63%

The rout in America continues, touching 20% before recovering briefly last Friday. Tech stocks has far too much weightage in the S&P. It was quite publicised that a handful of them are responsible for S&P 500's performance in 2021 (which I would remind everyone, it was 31.2%!).

The Hong Kong market has regain a fair amount of  losses since last month, more than 8%. Given that my portfolio is evenly split between the Singapore and Hong Kong, my portfolio recovered by almost the same margin as well.

Performance is primarily supported by the TTJ's tender offer and Alibaba's rally of almost 20%.

Transactions:

a) Complete divestment of Carpenter Tan
In view of number of resignations from the board, I decided to liquidate the stock based on gut feelings. With the title of CEO returning to the founder, it is likely that growth will stall in time to come.

I note that inventory turnover has dipped somewhat, but it wasn't the deal breaker.

I took a small loss for the position and it is deeply disappointing as this was held for almost 4 years.

b) Initial and top of positions in Warner Brothers Discovery; Increase in Activision Blizzard
In view of the number of insider buying and due to personal reasons which I cannot disclose, I have bought a modest number of stock. Unfortunately, I could not reveal more.

c) Modest increase in CCRE
The timing was unusually good, although briefly, as prices shot up due to the local government taking a slice of the founder's stake at a convertible bond price of 1.2x, and a reasonable interest rate of almost 6%.
Price of CCRE has fallen back ex-dividend, so there isn't really anything to cheer about.

Commentary

The slump in cryptocurrency prices were pretty shocking, and as much as I hate to say this, it has a "this time it feels different" feel to it.

There are a few reasons why I think this way.

Despite the decentralized nature of the asset itself, exchanges are halting withdrawals slowly, and this would at least have a short term (days) effect on the market, since the idea of "not your wallet, not your tokens" would drive some to liquidate and observe at the sidelines.

The second reason is the layoffs in many crypto exchanges, or at least suspension in hiring. I know Binance said that they are hiring, but I do not think they are trustworthy.

Lastly, there could be massive forced liquidation by funds, judging by the break of support prices in Bitcoin. 

So I think it is largely a matter of trust and falling dominos. I take a very neutral stand on cryptocurrencies after the Ukraine war. Given how difficult it is to value these assets, I give them a skip.

This is a pretty mute month, that is it for now.

-boonsong