Jan 19 - Portfolio & Networth Update

Publish date: Sat, 12 Jan 2019, 02:43 PM

Hello 2019!

Since I stopped updating on my portfolio 4 months ago, I've received lots of inquiries from readers asking me to reinstate back this post.

After much deliberation, I've decided to republish them again in my blog starting this month with the January's update.

While I don't exactly know how these updates will benefit readers who are requesting for these updates, I hope they are not using this the wrong way.

For myself, I am using the update to justify for accountability to myself which is mainly to articulate my summary thoughts in a more organized manner and why I decided to hold/buy/sell and make certain decisions.

Overall Markets

Let's first start with the observation of the overall market.

This has been a pretty smooth sailing month so far.

STI ended the year in 2018 with last closed at 3,068 and barely within 2 weeks the market has moved up to 3,200, which represents a 4% gain year to date.

I had my hopes high this year for the market to tank not because I am loaded with cash but because I know I will be able to load up more stocks in this accumulation stage of my life.

Contrary to many people, I actually feel great when I see the market tanks, even when I am almost fully vested.

Still, we are now in the very early stage of the year so there will be turns and surprises, which is what is great about the market because of its unpredictability.

Anyone who says they are able to predict with high probability on how the market moves should openly show how much skin they have in the market. That will give you some sorts of indication on the conviction they have.

For me, I tried to be vested in the market whenever there are still some great valuations in the market that I can find.

That's all I can do for now.

No.	Counters	No. of Shares	Market Price (SGD)	Total Value (SGD) based on market price	Allocation %
1.	Vicom	31,300	6.00	187,800.00	19.0%
2.	Frasers Logistic Trust	162,200	1.06	171,932.00	17.0%
3.	Starhill Reit	247,000	0.69	170,430.00	17.0%
4.	Far East Hospitality Trust	230,000	0.63	144,900.00	15.0%
5.	Manulife Reit	81,000	US$0.81	90,542.00	11.0%
6.	UMS (Short)	325,000	0.60	195,000.00	20.0%
7.	Warchest	2,000		2,000.00	1.0%
Total				962,604.00	100%

Less:	CFD Leverage @ 3.2%			(108,620.00)

Net Total				853,984.00	100%

Portfolio Updates

1.) Vicom

Vicom remains my top position in the portfolio going into 2019 due to the defensive nature of its' cashflow and predictability of dividends which is high at 6%.

With full year results coming up next month, I think we will not see much surprises and I expect them to maintain if not announced a slightly higher dividends than the previous year of 36 cents.

I had previously mentioned Vicom as one of the two companies in the offensive-defensive partner rebalancing in my strategy last year (you can read them Here).

It is still applicable for this year.

2.) Frasers Logistics Trust

FLT took up the 2nd position in the portfolio because they have performed very well since their inception days a few years ago.

It is currently yielding close to 7%.

If there's anything to pick about this Reit, it will be their expansion plan to move to a different geographical areas in Europe and with multiple properties in the portfolio it increases the difficulty to pass judgement on how well these properties are doing and weigh them across the overall portfolio.

Still, being a Reit under the strong sponsor of the Frasers Group and a proven management, I expect them to maintain a slow but decent performance over the years.

I just need to be a little wary to ensure they are not expanding aggressively for sake of expanding and destroy rather than enhance shareholders' value.

3.) Starhill Global Reit

Starhill summed up my top 3 positions in the portfolio.

I strongly think they will have a decent chance for a turnaround this year, backed by an attractive valuation and turnaround in their earnings which will lead to higher dividends.

I had blogged about my personal take on Starhill not too long ago which you can read Here so I won't repeat much of it again.

4.) Far East Hospitality Trust

If you have been following my blog, you would have realized that I regularly mention about my bullishness position in the hospitality industry and in particular used Far East Hospitality Trust as an example.

Like Starhill, I think this will be a good year for Feht with turnaround in the revpar earnings from the hotels, a lower hotel supply over the next few years, combined with a strong tourism demand for the years ahead.

I believe the stars are aligned.

5.) Manulife Reit

This is the smallest position I have in my portfolio and rightly so because I am still trying to learn about the property sectors in the US and some of their regulations, which can be very tricky for overseas investors or companies that are being listed overseas.

I have tried to read up and study on the Barbados tax law regulations which I have exchanged some thoughts with Kyith from Investment Moats, who are more well-versed with some of these updates.

My take is that despite the result, this is still very much a grey area and one which could haunt back whenever such clauses are being brought up to surface.

Because of the same reason, I took a loss by cutting my previous position on KBS but managed to keep Manulife so they broke even.

6.) UMS

UMS is currently the only open short position I have in my portfolio.

Since I last blogged them on the 15th Nov (you can read it Here), the share price has dived further down from 66 cents to a low of 56 cents before rebounding to the current support/resistance of 60 cents.

During these interims when they rebounded back, I took up this opportunity to further accumulate my positions in various stages by leveraging at it almost at 2x

The idea is to hold them until next month when they announce their full year results in Feb.

There were enough indicators to indicate this might work out.

Apple and Samsung gave an early signal lead on the chips sector that outlook on the demand are not going to be rosy and with increasing trend of past unused inventory, it is easy to assume that the demand are lower than what these companies are expecting.

The lower capex to spend also assume that the sector is undergoing a slower growth which I believe there are further rooms to fall for semicon stocks.

For UMS, it adds the spice because they have diversified into something else, which might be good for long term investors but bad for short term investors. With the high capex spend this year, it is expected that to conserve the same amount of cash flow, they would have to cut back on the dividends paid which they had already do so in the interim.

Networth Update

The portfolio ended the year at $833,750 in 2018.

This month, the market has started brightly and the portfolio has gone up to $853,984 (+2.4% month on month; +38.8% year on year).

It is also the 13th consecutive month increase since Dec 2017 so I am pleased to see the results turning out to be rather fine.

Jan 2019

Final Thoughts

So that is the overall updates for this first month of the year.

I hope I don't go overly bomballistic on some of these items and I hope it might help some readers to think about it from a different angle.

There will be plenty of monitoring mode in this year strategy so patience will be really key.

Patience does not mean you have to be holding a large amount of warchest at any point in time, it is just about striking at the right moment, and rebalancing them when you see it as necessary.

How's your month coming along so far?

Thanks for reading.

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