Oct 2022 Portfolio Update

As of end of trading 30-Sep-2022,

S&P 500 Index Fund: -19.23% -> -15.43%

Hong Kong Tracker Fund: -19.48% -> -29.32%

Straits Times Index Fund: 3.17% -> 0.92% 

My portfolio: -15.13% -> -21.48%

The Hang Seng Index was a train wreck this week. On the first trading day after unveiling the Politburo,  it feel just about 6%, recover slightly during the middle of the week, only to fall 3% on Friday, with the tech index enduring a worse fate.

YTD, HSI's red ink exceed 30% with ease. If you had bought the Hang Seng index fund in 2016, you will still be losing money today.

My portfolio, which consist of almost 40% in Hong Kong stocks, is not spared from the torrid, horrifying HSI sell downs.

As for my own portfolio, -6% is actually way worse than it look, because of a huge amount of purchase in T-Bills this month. Without it, I am looking at likely 10% down this month.

Notable transactions:
1) Very sizable amount of capital into Singapore T-Bills, as parents are looking to invest money kept in fixed deposits yielding less than 1%. At their age, it is not prudent to buy stocks.

2) During this week alone, I picked up

a) Yangzijiang Finance, a fair amount of it, actually. It propped to my top 5 posiitons.

b) Alibaba

c) Central China Real Estate

3) Modest amount in Nanyang Holdings (increased liquidity and selldown in prices). It is extremely difficult to purchase this 

4) Liquidate Embecta to purchase some (3). Only to see Embecta go up by more than 10%....

5) Modest amount in Central China Management.

***

With unprecedented market volatility in Hong Kong markets, it is very tempting to keep buying the Singapore Treasury Bills. With an attractive (if you adopt a short term view and ignore inflation, in which both attitudes are harmful in the long run) interest rate, this seems to be what majority is doing.

But isn't investing all about not following the crowd and doing what felt painful? This fog of war is why investing is so difficult. You can't say that following the crowd is wrong; one could say that it is always the darkest before it is pitch-black. 

What feels like very bad bets presently?

REITs comes to mind. With risk free interest rate going up, REITS, which ironically are suppose to be inflation-fighting instruments, are now being sold down because of interest costs. With years of zero-to-low interest environment, one could be forgiven to think this way. There will no doubt be opportunities in buying some sold down REITs. 

I did consider reducing positions in Lendlease but the WALE and interest cover, does make it suitable for long-term holding. It was no doubt very depressing to see it go below the price where rights are issued (which I had subscribed). But if you had read your intelligent investor, you are a little better equipped (in the mind) to deal with broad market selldowns. 

Unfortunately, nothing could prepare you when the only stocks selling down are the ones you hold, and the market is enjoying a massive rally. I think that hurts a lot more.