January 2021 Portfolio Update

With January 2021 drawing to a close, it's time for a portfolio update.

I've done a fair bit of restructuring...

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Sold:

60% of FIRST REIT pre rights issue

This company has been the thorn in my side for a while. For a number of years it's share price rose and the divided was tasty, but as we all know it has has gone down like the Titanic in recent months. My reasons for off loading just over half of my holdings before the vote are as follows: 

1. Lippo have shafted First once and they could do it again. 

2. I sold 60% and not 100% because the counter was down almost 80% and I wanted to leave some skin in the game for a speculative return to form in the future. Whether this will happen or not is in the hands of the gods.

3. First Reit's CEO talks straight and took part in the rights issue. Thus, who knows, maybe in the long term he can turn things around. 

This is the greatest paper loss I've encountered in my investment career, and I learned lots from it. Namely, I learned not to get too greedy when chasing REIT yield. Also, I learned to research a REIT's sponsor more carefully. Lippo are shady to say the least and should have been taken to court for their shenanigans, but I understand that FIRST Reit's management had no choice but to call the rights issue and fuck over their share holders. We all know Lippo created this problem and should have shouldered the burden, but they didn't and shamelessly fed a shot sandwich to loyal First Reit share holders. This callous and, quite frankly, ballless move loss me and others a lot of money and eroded all our trust in Lippo. I think based on the financials there will be another rights issues in the future, diluting share holding even further. This I'm ready for - albeit with a massively reduced position. So, with two fingers up to Lippo, I'm out for 60% and praying that somehow fortunes turn around for my remaining (albeit massively diluted 40% stake) However, I feel I might be waiting for some time.

Sold:

I took profit on Keppel DC REIT and sold 50% of my stake. I got into the counter two months after the IPO and added heavily to it in the first year, so I was up almost 200%. I've been flirting for a while with reducing my position and taken some delicious paper gains, this month I finally did. Yum yum!

Sold:

I sold off a minor position in Global Investments Ltd. This was and dividend play I felt didn't pay enough for the risk involved, so I sold out at the same price I paid 2 years ago. I still collected a decent yield for my troubles though, so not all in all it worked out OK. I see this investment as a reflection of my more immature self. I'm trimming off these parts off my portfolio and replacing them with more reliable Singapore dividend plays and long term US growth. 

Buy:

UOB and OCBC. I like UOB's prospects over the next decade with its exposure to SE Asia. Granted, it's not a bargain, but It's not expensive either, so I loaded up heavily and added to my existing position. Likewise, I dumped a large chunk into OCBC to diversify over the big 3 Singaporean banks. All 3 will go back to normal dividend soon once the government lift the 60% cap. These are long term growth/dividend plays for me with their flawless balance sheets and health yields.

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In conclusion, January has seen me starting to cut out the clutter from my portfolio. I'm still monitoring Berkshire B and Alibaba closely and will add if there are decent pullbacks. 

  

$71, 145 Dividends in 2020 and General Musings about 2021

Hello there, my lovely investor friends!

2021 is well and truly underway, but the dust from last year is yet to settle. 

Dust? 

More like radioactive air particles!

As investors, 2020 was like pushing an aging accelerator button. 

My God, I even found a grey hair! What's all that about, eh?

There was much collective glass clinking and deep breathing on New Years Eve, and reading comments online it was clear that most people believed 2021 is going to be this new shiny, hassle free year, one in which the anxieties and fears of the previous twelve months will suddenly evaporate like a steam from a boiling kettle. 

Alas... I fear this is not to be. 

We find ourselves living - and investing - in strange times. 

I won't go through the long list of macro issues that keep us all up and night, but it's fair to say the uncertainty and nail- biting will continue for the foreseeable future.

But, this said, show me a period in history when investors have been able to sit back and chill without a care in the world. 

Yes, indeed. 

This time has never existed. 

Fear and news of imminent doom have been etched in the investor brain since forever. However, the difference now is the access to information we all have at our fingertips. 

Social media, financial blogs, 24 financial news etc. flood out world with a continual deluge of information which leaves even the most avid reader feeling like a deflated party balloon. 

Just how can we all keep up? 

Newsflash! We can't. 

But hey, we can't know everything, can we? 

No, of course we can't. 

I'm sure we could all make a Youtube video about some topic that would make others think...

"This guy's a genius!"

But most of us have better things to do than chase the algorithmic dragon on a daily basis.

I swear the next person to say, "If you like this video, smash the like button" needs a rabbit punch in the kidneys for being a fucking boring automaton. 

Massive yawn! 

So, without risking this status myself, here's some info about my portfolio as it stands on 9-1-21.

Total dividend received in 2020: $71, 145

Significant buys in 2020: Berkshire Hath B; Alibaba

As you can see from the above, I'm primarily a dividend investor - well this is how I started out five years ago. 

Also, as you can see from my significant buys in 2020, I've started buying what I deem to be long term growth stocks.

Why Berkshire Hath B I hear you ask?

Well, I'm not one of these folks who chases the next big thing. I want exposure to the Yank market, but I don't want to do this through an ETF, so what's the next best thing to catch the upside of US growth in the long term? 

Yes, Buffet's baby is where it's at.

Of course, I hear some say...

"But what about Berkshire after Buffet?" etc. etc.

Look, dive a little deeper into the financials of the company and do your own evaluation, and you will find a financial beast, protected my a massive moat with one of the most ethical and trustworthy company cultures on the planet.  

Also, I made a big bet at $212 which according to my shitty math is well below its intrinsic value.

Next, I hear you scream...

" Why the hell Alibaba at this time!"

Yes, I know Jack Ma might be inside an Iron Maiden somewhere underground in Beijing; also, I'm well ware that he has pissed the Chinese and US governments concurrently. 

That said, I made a big bet at around $ 213 on the Hing Kong exchange, and like Berkshire B, this is a massive discount to its intrinsic value.

Now, don't get me wrong here. I'm well aware Alibaba is going to get a few slaps in the near term, and this will lean to price volatility in the short to medium term. 

However, I see this as offering up more buying opportunities for a great company with, again like Buffet's baby, a moat so big you could sail a cruise liner in it.

Thus, with these words I'll leave you. If you have any comments leave below, and I'll be more than happy to have a wee chat.

All for now party people.

SDC 

Morning Musings 27-10-20

Good morning to you all. I trust you are well, where ever you are. Allow me to ramble if you will. 

I've just got back form a run and feel great. Nothing beats exercise in the morning for setting you up for the day. It's a happy drug for sure. All those endorphins swirling around for half the day, energising the mind and body. I'm a big fan. Weekly, I'll run 5k on a Monday and Friday. Then I go trail running on a Saturday for about 6/7k. In the past I ran lots more than this, but I find around 20k per week to be the optimal distance for extracting the maximum benefits, while minimising the chance of injury. Well, this works for me anyway. On top of this, I do a 1 minute plank every day as this keeps the core and lower back in good shape as I march on into my 40s (Yikes!)  

Channel News Asia on Youtube is my go to for 20 minutes live news on all things Singapore and in SE Asia. While watching this, I down two coffees (no sugar) and read the latest articles from The Edge (currently a subscriber) 

Lately, I've also been flirting with the idea of doing some sort of academic course online (under duress from my wife) But I really haven't a clue which one to do. The net is awash with people trying to sell this course and that and most of them look rather generic and cover information I already know. Can any of you recommend an advanced investing course? (paid or free) Usually, I find myself flicking through various Youtube channels procrastinating and getting more and more frustrated. Please let me know any good investing channels you know and use. I need some guidance on this ASAP.

Once I've exercised, watched the news, read and Youtubed, I'll usually take a look at my portfolio and watchlist to see if there are any opportunities on the day ahead. Being a long term buy and hold dividend and growth investor, I look to see if any of the companies I'm watching are trading at or below there intrinsic value. If so, I'll dig deeper into one and decide if it's time to invest. Presently, opportunities are few and far between for long term growth with US stocks trading at silly highs despite Corona, US/China relations, US election etc. etc. Only a few companies buck this trend that I can see. Namely, Berkshire B and Bank of America. 

Recently, I bought a big whack of Berkshire B at $212, for I feel this is decent value all factors considered. Also, with the conglomerate owning a proportion of BOA you get less over all downside risk. Berkshire offers up a tasty conglomerate discount as well which is attractive. Moreover, certain parts of the Berkshire portfolio look incredible moving forward. I'm thinking here of their railroad which has amazing potential over the long term.

Please share yours in the comment below as I'm always fascinated to know what my fellow human being are doing to feel good and stay sharp. Also, what's on your watchlist at the moment?

All the best and have a good one.

Global Diversification Continues

In my last blog post, Birthday's and Berkshire B, I wrote about how I recently accumulated a sizeable chunk of Berkshire B at $212 as part of my strategy to diversify my portfolio and garner steady growth over the next 10 years. 

Looking back at the buy, I still believe this was a decent price and that the fair value of the company is closer to $300 per share.

When I started investing in the stock market back in 2015 or so my plan was to build a dividend machine that would give me a regular income and hopefully facilitate an early retirement. 

So far, this has gone mostly to plan, but in hindsight, I would do things slightly differently. 

Over the years, I have overpaid for some counters in an attempt to get stability and yield, and in doing so, I've made a few glaring errors - chasing yield being one of my main downfalls. 

Of these mistakes, the biggest are buying the following counters: Kingsman, Starhub, Singtel and First REIT. Anyone else in the  same boat here? 

I'm still holding on to these 4 counters for dear life, in the hope of a turnaround, but I don't have a ton of hope. 

That said, all 4 companies pay good dividends, but the question is for how long will this continue? 

However, I've also made some excellent purchases including Keppel DC REIT with a weighted average cost of just over $1. Also, Sheng Siong at $0.9 approx. 

There are others good picks in the portfolio as well, but I won't bore you with all the details right now.

So why the strategic move to the USA?

To be honest, I've become a little bearish on the Singapore economy over the past while. What with the US-China trade war meandering on, Covid, and the STI moving sideways at best, I feel perhaps the good times are over for the foreseeable future. 

This doesn't mean that there are not great companies in Singapore - there are - but it does mean that growth catalysts are few and far between. 

As a result, I want to spread my wings and diversify in the USA with one of the world's best run and diversified companies, Berkshire B. 

Why not invest in the S & P 500?

The answer to this question is easy enough:

1. I think Berkshire B is better value than the S & P 500.

2. I think Berkshire B can weather the bad times more effectively than the S & P 500.

3. I like Berkshire B's railroad and insurance businesses

4.  Passive funds buy stocks when they are expensive and sell when they are going down

5. I don't like passive ETFs. They have done amazingly well over the past 10 plus years because of QE, but what their future holds I'm not so sure.

6. I believe in paying for the quality business ethos and philosophy that Berkshire has now and which will continue into the future - with Buffet or without Buffet.

So, I have no doubt this is a quality counter moving forward, and one that will continue to add to when opportunity arise. This is the key cornerstone in my diversification plan.

Are you only diversifying in the USA?

I've also picked up a chunk of ICBC as I feel China's growth will move in tandem with this banking giant. Of course, I recognize the headwinds of mobile payment and loans etc. but traditional banking isn't going to disappear overnight. Also, ICBC has a history of paying handsome dividends, so it's nice to tap into this wellspring. 

OK, so that's where we are presently. More soon. The beat goes on...

Birthdays and Berkshire B!

Well, well.... Would you believe it? Singapore Dividend Collector has turned 40! 

It's one of those milestones in life that happens to other people, isn't it? It'll never happen to me, for I'm still too youthful and sprightly. Ha!

News flash! It has happened. Happy big 40 to me! (a few days ago)

So, what the heck have I been up to then?

Well, I recently made a rather large investment into Berkshire Hathaway B. This has been something I've been obsessing over for a long time, and I finally pulled the trigger at $212. According to my calculations, this is a decent price moving forward, considering Buffet, Munger and the rest create about a 10% return for shareholders. As always, this is a stock I intend to hold for a long time, and why not considering the quality of the businesses Berkshire owns, the amazing business culture there and also the potential for the company - with or without WB or CM. I'm not one of those investors who runs after the next big thing (although I might do with ??) I feel paying $212 is still decent value, and obviously so did Buffet as this was the average price he bought shares back over the past year or so. Thus, if it's good enough for the great man, then, my God, it's good enough for me.

This is my first foray into the US stocks, and presently I'm happy with my decision. Honestly, I researched this purchase in micro-detail to avoid any slip ups. In the past, I've been a little trigger happy and make some mistake, but I've learned from these and have grown as an investor. 

So, my plan moving forward is to use my Singapore portfolio to harvest dividends which I'll continue to reinvest into STI counters when the price is right. Also, Berkshire will be my steady growth engine (slow and steady wins the race etc.) 

I'm comfortable with this approach, so let's see if it works moving forward.

What do you think out there in internet-land?

Obsession with Money and Things.

Seneca's quote on happiness resonates deeply with me:

True happiness is…to enjoy the present, without anxious dependence upon the future. 

Thus...

Why are so many people obsessed with money and materialism? 

This is a question that reverberates around my skull for large portions of the day. And the more I think about it, the more it makes sense.

We've all heard stories about super-rich people involved in corruption, being sent to jail or being crippled with mountain of debt. What is it that drives so many people to such extremes? What is it that they are seeking to discover by accumulating more wealth? Do they even know themselves?

In physiological terms "minds obsessively fixate on the idea of making money, without considering the consequences of their obsession." 

This definition reads almost like a definition of addition: "A person with an addiction uses a substance, or engages in a behavior, for which the rewarding effects provide a compelling incentive to repeat the activity, despite detrimental consequences." (Psychology Today)

Now, please don't misinterpret my thoughts here. I'm not saying that making money is a bad thing in itself. We all need a certain amount if money to fulfill our basic needs of having food, shelter and a few treats every month. But where do you draw the line? Once our basic needs have been met we are usually happy, but how much happier can someone be if they live in a penthouse surrounded by fawning servants? Honestly, I doubt they would be any happier at all.

With increased levels of wealth come more responsibilities such as mortgages, staff, cars, stock market crashes etc. which make us more anxious and hyped up than those with less material possessions. So, why do people constantly push for more money and things when we all know it won't make us any happier than just having enough to meet our basic needs?

As I fast approach forty and have an 8 month year old baby, this question has been bothering me. 

For the past 11 years I have - with some help - built up a successful company with a small, loyal workforce. We are well respected for the service we provide and help many people. However, anyone who owns their own business knows full well the stresses that come with the territory. As I slip over the imaginary horizon of young adult into a fully fledged middle aged fella, my attitude towards work/live balance is shifting rapidly. 

In the early years, for example, it was head down, struggle and get shit done. Now though, I feel my concentration being pulled in other directions: family, exercise, meditation and poetry. Honestly, I can't see me being motivated to work the same way I have done for another 10 years. At a push, I could stretch to 5 years, for after that I would be more than financially comfortable and able to focus more on the present moment with my family and meditation practice.  

I know many people buzz with excitement of making enough for the boat or the vacation penthouse, but, as nice as they are, material trappings, or the thought of them, do little for me. 

Flashy people of the world go forth and do your thing. Buy more gold. Buy more property. Upgrade your BMW to the newest model if this is what makes you happy. For me... I just don't feel the need. I would rather explore the inner regions of my mind and, hopefully, become a more grounded and selfless individual. 

What are the lemons, the keepers and the stars in your Singapore portfolio?

 

Right, so here we all are into another new month. Can you believe it's September 2020 already? It's hard to fathom, isn't? Well, take a deep breath folks, it's true. 

What a year it has been so far for investors with some counters blasting into orbit and others sinking down to the dark depths. Let's have a look at this and decide whether I should cut my losses on a few bad performers (lemons) or hold on for dear life and pray for some divine intervention.

Here's my portfolio 2-9-20 which I have been building since 2005.

SATS

Keppel Corp

Singtel

Keppel DC REIT

ThaiBev

AimAMP Cap REIT

CapitaMall Trust

Capitalcom trust

Ascenads REIT

Nikko AM ETF

SGX

Singpost

Starhub

UOB

Kingsman Creative

Sheng Siong

DBS

Accordia Golf Trust

AscottREIT

Capital land Commercial Trust

First Reit

Global Investments

Frazer Comm Trust

Wilmar International

Ascendas-h-trust

ICBC (HK)

Centurion

As you can see I invest primarily for dividends which I reinvest back in to the portfolio 3/4 times per year.

The Corona pandemic has not been good to us investors, and my portfolio has suffered. Thus, I will divide it into three parts:

1. Lemons (stocks I might dump)

2. Keepers (stocks performing understandably in the current circumstances, but I like it's dividend/future potential)

3. Stars (stocks shining brightly in the sky)

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1. The Lemons

Singpost

I bought this back in 2016 when finding stock picks was like pissing in the dark. I hadn't a clue where to aim. My thinking at the time was that Singpost would do well from the emerge online retail markets and than it paid an ok dividend. I saw it as a long term, safe, dividend play. Well, the dividend is still there - currently 3.86% - but the stock has been hammered - currently trading at 0.7. It was 1.97 in Jan 2015. That quite a drop, and with the divided so low, a terrible investment. What the future hold for this stock doesn't look promising.

Starhub

I bought this stock again for the long term dividend opportunities, not really digging any deeper. As we all know, its fall from grace has been rather dramatic and its dividend unsustainable. Dam you Starhub!

Kingsman

When I bought this back in 2016, I was attracted by its decent balance sheet and dividends. That said, the last few years have not been kind. Presently, it dividend looks a bit silly at over 11%. How much longer can this small cap last in world with restricted travel and cancelled conferences?

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2. The Keepers

SATS/Keppel Corp/ThaiBEV/AIMS REIT/CapitalMall/CapitalCOM/Ascendas/NIKKO ETF/UOB/DBS/Accott Trust/Capitalland Comm Trust/First REIT/Global Investments/Frazer Com Trust/ Ascendas H Trust/ICBC

A few notes on this lot. 

SATS has been shafted by Corona for sure, but I'm staying vested for the long term. People will travel when they can.

Keppel has been in the news as 

Temasek bottled the deal at the last minute. I still think this beast will bounce back and is still an OK long term hold. 

Aims REIT has been going sideways, but pays a solid divided and has good management.

CapitalMall will be grand long term as its malls are great locations. And let's face it, what else is there to do in Singapore?

Capital Com will be fine long term.

Ascendas has not been hot too badly and is a quality company. Long term hold.

NIKKO EFL was a silly investment for me after reading a Boogle book. Singapore continues to go sideways without innovative tech companies.

UOB/DBS/ICBC will be fine in the long term and pay good dividends.

Ascott has great locations and will be fine as the super rich need somewhere to stay in big cities.

Global Investments pays a good dividend and is steady enough. No debt as well. Hold long term.

Frazer Comm trust is solid, pays a good dividend and is backed by a strong sponsor.

Ascendas H Trust is fine in the long run.

ICBC is getting hammered at the moment, but will continue to grow as China does.

Centurian should cash in on the new government rules for Corona housing for workers and students. They are the main player and have a dam fine management team. Long term hold with a tasty dividend.

Note: I am holding on to FIRST REIT as it's down too much to let go at this stage. The sponsor is a joke and I don't have high hopes, but let's call this a white knuckle hold. Perhaps they will prove everyone wrong.

3. Stars

Keppel DC

What can I say...? Amazing

Wilmar

On fire and with investments in the company in place, this looks set to continue long into the future. They should raise the dividend in the future as well.

Sheng Siong

Thank you Corona...Thank you so much. People gotta eat etc etc.

Accodia Golf Trust

With the big meeting on the 16th Sept and the new deal, it looks like the deal will go though. This will be a big payout for us investors. 

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OK, so that's about it. I could waffle on more but I won't. Let me know your thoughts below if you have an opinion.

Have a great day ahead.