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?