2019 Review

Its that time of the year again, when the year comes to a close with the merry festive seasons; except this time its not all that merry with the shocking 0.1 month year end bonus announced by Singapore Government. Been the largest employer, the announcement is closely watched by private sectors not to mention its influence on the rest of companies whom now have a "valid reason" to moderate the year end bonus for prudence. The shock was felt throughout the workforce (public or otherwise) not only the low 0.1 month which also translate to 3 days in a calendar month (typically 30 days); but its also rare when the economy is forecast to grow between 0.5% to 1% for 2019. The last round when total bonus hit 1.25 month (including 13th month) was 2009 when the great recession plunged the global economy into decline.

Nevertheless, Singapore's open economy has been resilient in the past when both economy bounce back strongly in 2010 with total bonus bounced back to 2.5 month (including 13th month). Lets hope 2020 will be a better year ahead for the working class and also for our investments / trading.

On to the review of 2019 trades

The realized gains for 2019 year to date was okay in absolute amount, almost equal to one month bonus, though in percentage term it fail to beat neither the S&P500 or STI index nor the retirement CPF's return (2.6%-4%).

As I look back on the trades in the year (click to enlarge)

2 colossal losses came from my hedging attempts with Put warrants on OCBC in June 2019 and the Eagle Hospitality Trust's gap down in October 2019. Both losses of $2039.79 and $4633.24 exceeded my risk limit per trade of $1500 or 1% of my trading portfolio.

My current portfolio

My current holdings (as of 20 Dec 2019) are entirely in the red, although I am holding a mid to long term view for them to materialize my initial investment thesis. Below I am going to share briefly on my reasons for buying & holding them (not an investment advice, caveat emptor):

1) SPHREIT had gradually grew its distribution per unit in the past 5 years, a distribution history table is reproduced below (source: Shareinvestor)

Distribution Per Unit For Each Calendar Year (based on corresponding Financial Periods) in SGD (Cents)

The DPU yield at $1.08 is about 5% in 2019 and beyond, thus I am quite fine to hold it. Furthermore, the Fed interest rates that were cut in 2H2019 had yet to reflect in the financial statements, with 2020 Fed's dot plot forecast to remain, there's still upside to SPHREIT and other REITS earnings out there.

2) Silverlake Axis had reached the multiyears low support of $0.40 area, furthermore its Independent Non-Exec Director Lim Kok Min had bought 300,000shares around $0.415-$0.4175 with the majority of its revenue now on a recurring basis, earnings surprises may come from any major upgrades or systems overhaul in fintech software as business confidence recover from US-China phase 1 agreement and gradual removal of partial tariffs. While waiting, Silverlake Axis distribute about 4.5% of dividend yield in March, June, November and December.


3) Duty Free International is the fallen from glory retail play where its "duty free" attraction has given way to savings from online shopping. Furthermore, the custom bill that is struck at Malaysia's Appeal court since 13 March 2019 without a decision has been weighting it down all the way its peak of $0.46 to current $0.15 with occasionally illiquid volume and wide bid / ask spread. I went in this based on crowd psychology speculation which was my previous play style in 2013 & 2016 when I bought counters with outsized dividend announcements and wait until EGM then ex-date when dividend hunters slowly come in to drive up the price. I'm glad it did not retest the recent low of $0.143, and seem to firm up around $0.148-$0.154 area. At more than 20% yield, 3.5c distribution; I'm hoping dividend crowd may drive it back to $0.17-18 area for yield to fall below 15% to become saturated.

4) Ascendas India Trust had issued placement shares at $1.508 to private investors to raise fund for a business park in Bangalore If you see my trade records, I took the the advance distribution 1.48c, exit at a recent high before I bought back at $1.52 when REITs pullback recently after Fed announced no further cuts in interest rate in 2020. Similar to SPHREIT, I think after some consolidation, REITS especially the quality ones will rise gradually. Even if it don't, the current yield 4.383% (from Shareinvestor) plus yield accretive acquisition to materialise, it might rise gradually to 5% over next 3years. If you look back distribution history table (source: shareinvestor), its DPU has been consistently increasing in the past 5 years.

Distribution Per Unit For Each Calendar Year (based on corresponding Financial Periods) in SGD (Cents)

Year on Year Comparison since 2013

I am glad that my return % has reversed its downtrend since 2016, beating the Fed interest rate & fixed deposit rates for 2019 is a small achievement in the positive direction. While the unrealized loss are not included, I do feel over the next month or so, most of the counters would become green then.

Supplementary Retirement Scheme (SRS)

I decided to open an SRS account with OCBC after the government announced the increase of retirement age from 62 to 63 in 2022. This added time pressure on top of the tax saving incentive offered under SRS, one way to fix the retirement age of your SRS withdrawal is to make your first contribution to your SRS to lock in the prevailing retirement age (which is 62 now). See MOF details on SRS here.

The tax saving that I estimate for 2019's income after offsetting SRS contribution is close to $1000 for me. Not to mention the $50 cold storage voucher that I will be getting for contributing at least $10k to it. In fact, my Ascendas-iTrust is my first investment with my SRS, just 2 days after I contributed to it (sorry OCBC your 0.05% interest is really too low to keep monies there for too long, but hey thanks for the $0 fee for share sale, dividend and other transactions (except for $2 transaction fee for Singapore Savings Bond). I also wrote in to confirm this, thus far no charge from OCBC for my Ascendas-iTrust purchase (I believe OCBC is the only bank without fees for transactions though I come across one under DBS without fees too, POSB & UOB both have, $2-$2.50 charge; thanks OCBC!). I hope the competition will even drive it to $0 fees for shares transaction and handling of dividends; otherwise its a slight additional slippage cost to investing using SRS.

Lastly, I also hope to segregate my trading portfolio from my longer term investing portfolio, lets hope I can split my mindset & separate both trading / investment philosophies with separate accounts (LimTan & SRS).

Wish all my readers

Electricity consumption of a 48inch TV each evening

This post is going to focus on daily consumption habit and its impacts of household spendings.

Ever thought how much a 48inch TV can consume each evening?
First off, the TV is bought in 2017, a reputable brand with 4 or 5 ticks in energy saving; so it come as a surprise when my recent month's bill dropped as shown in the screenshot below.

We need to exclude the month of January 2019 as that was the month when I signup with Geneco at fixed tariff rate of S$0.1671 per kWh.

My consumption fluctuated between 250kWh in March 19 to peak bar 313 kWh in Feb 19.
Then suddenly happened as we stopped watching TV each evening, we used to watch 4hours per evening non-stop Monday-Sunday. Suddenly the consumption dropped in August 19 from 279kWh in July to 145kWh.

We thought long on the causes of the pattern and concluded it was due to the TV which was rather unexpected as we often attribute high consumption electronics to air conditioning but for TV to consume almost half of electricity was unexpected.

Beyond electricity saving, some other perks that may come with the free up time in the evening that you can engage in other meaningful activities such as:
- Financial market research on PC, this is another surprise as the PC consumption did not consume much electricity than TV.
- Meaningful time with your loved ones such as talking, reading, playing games or basically any time together
- Evening exercise such as stroll walk in the park, jogging, gym etc.
- Sleep earlier say 9pm instead of previous 11pm

Some potential losses from TV:
- Prime time shows, you may miss out on the hot topics of latest episodes though these days MediaCorp generally just stream dramas purchased from other countries esp. Korean drama, so you could just watch streaming if you like
- News, again you could watch of internet or read from news sites which would present you most content in words though I must admit seeing the cut scenes could be more impactful than reading; but then again you could watch it on live internet news steam too..
- Unsure of what to do with extra time, loss of previous routine; I though this would be a happy problem, simply review the meaningful activities or go to sleep early & feel more energised next day.

How do you think about TV? Do you watch prime time TV like 8pm-10pm?

Yushen Words To Say

 

With Chinese New Year around the corner, here are some words for your yushen dinner...

1. Raw fish (生鱼, Sheng Yu)
年年有馀 “Nian Nian You Yu” symbolising abundance ‘surplus’ through the new year

2. Pomelo (柚子, You Zi)
大吉大利 “Da Ji Da Li” which means good luck and fortune.

3. Pepper & Cinnamon powder (胡椒粉, Hu Jiao Fen)

招财进宝 “Zhao Cai Jin Bao” to invite wealth and treasures in. 

Must-do for business lo hei.

4. Oil  (油, You)
一本万利 “Yi Ben Wan Li” which means 10,000times of profit for your business

5. Carrots (红萝卜, Hong Luo Bo)
鸿运当头 “Hong Yun Dang Tou” which means good luck ahead.

6. Shredded green radish (青萝卜, Qing Luo Bo)
青春常驻 “Qing Chun Chang Zhu” for eternal beauty and forever young. 

7. Shredded white radish (白萝卜, Bai Luo Bo)
风生水起 “Feng Sheng Shui Qi” and 步步高升 “Bu Bu Gao Sheng” which means prosperity in business and rising to greater heights (read. job promotions). 

8. Peanuts (花生粉, Hua Sheng Fen)
金银满屋 “Jin yin man wu” symbolizes a household filled with gold and silver.

9. Sesame seeds (芝麻, Zhi Ma)
生意兴隆 “Sheng Yi Xing Long” for a flourishing business.

10. Golden Crackers (薄脆饼干, Bo Cui Bing Gan)
遍地黄金 “Bian Di Huang Jin” for fortune (gold) all over the place.

11. Plum sauce (酸梅酱, Suan Mei Jiang)
甜甜蜜蜜 “Tian Tian Mi Mi” for sweet and loving relationships

12. Finally, stir (lao) Yusheng and Huat Ah!
Shout "Huat Ah” 发啊 and toss the dish & celebrate with your family and friends to a great year ahead!

Wish all of you happy Chinese New Year!

2018 Review

Merry Christmas & Happy New Year 2019!

First off, I managed to score quite good results in my SUSS studies, achieving 2 B and 1 A- for my first semester of post graduate studies (my previous semester was foundation bridging modules). I felt proud and victorious for 2 days until I checked with my study group pals & realized they scored even better, (A, A- & B+) and (2 B+ & 1A). My competitive spirit felt disappointed for next few days, even though my study pals revealed a few others whom did not do as well as me (2 C+ & 1 B) etc.

This reminds me of a Chinese quote 人心不足 蛇吞象 which translates to when the heart is not satisfied, a snake try to swallow an elephant. Greed and fear are 2 most cited emotions in financial markets, as I reflect more on trading I feel its important to maintain a happenstance & peaceful mind not matter what situations faced. Easy said than done... But for our mental wellness, its necessary to remind ourselves so.

Reflecting my trading in 2018, I am glad I managed to recover the loss over Midas where my arbitrage went wrong when the counter was suspended, resulting in $9,477 loss. I had another 3 big losses, between January to March 18 when I bought SingTel & had to cut loss suffering -$2,165.58 drawdown, this followed by double whammy when I bought Q&M Dental & YZJ Shipping in May but both failed, falling fast and furious resulting in YZJ loss of $1,955.08 and Q&M Dental -$2,1126.80.

On hindsight, it was an achievement in itself to recover from the above losses and I noticed I tried hard to limit my trade size and risk per trade to under $1K. This caused me to trade lesser than my usual trade size of $30K which seem to be better as I battle less in my mind over hold or cut loss.

Overall I managed to breakeven with a small 0.56% return aka $846.47 trading profit (this excludes the 0.8% interest that I received when my monies are not deployed in my trading account).

Q4	$1,241.38
Q4%	0.83%
Q3	$7,037.41
Q3%	4.69%
Q2	-$9,694.08
Q2%	-6.46%
Q2*	-$217.08	* (exclude Midas write off)
Q2%	-0.14%
Q1	$2,261.76
Q1%	1.51%
YTD	$846.47
	0.56%

I made a total of 61 trades, with my only position in UOB Kay Hian with 20,000shares at $1.18cost.

A = 30%+ of channel			22	37%	43%
B = 20%-30%			4	7%
C = 10%-20%			13	22%
D = 10% or less			5	8%	35%
F = Loss			16	27%
			60

I bought UOB Kay Hian as it hits 10years low, its major low was under 90cents during subprime crisis. Its largest shareholder Wee Ee Chao continues to buy its shares and the top 3 parties together held 71.27%

UOB 38.87% MD Wee Ee Chao 27.97% Deputy MD Tang Wee Loke 4.43% Total owned by related top 3 parties 71.27% Dividend yield is about 4.07% distributed once between April to May, ranging from 3.5c to 4.8c; 2018 4.8c, 2017 3.5c, 2016 4.5c, 2015 5c EPS ranged from low 7.28c in 2016 to high 19.25c in 2010. Trailing 12M Sep 18 10.73c, PE Ratio around 11x and Price/book 0.66x (from SGX Stockfacts).

The current stock market downtrend, catalyst by Fed interest rate rise & Trump's partial government shutdown is likely to fall for a few more weeks. Nonetheless, I see various bullish divergences developing & look forward to trade them. Hopefully I will be wise to hold some of them to maximize their longer term profit, instead of focusing too much on short term channels and miss the longer term uptrend ahead.

God bless you in your investments and trading!
Wish you (& myself too) a wiser & even more profitable year in 2019!

3Q18 Brief Review

A quick brief review of my trading since August's posting, I made several trades and was really close to recover my near $10K loss from Midas. Currently I am 100% in cash, there's been some short term oversold signal from US market which past 2 days had pulled back alittle. I cant really tell if its a uptrend reversal to downtrend or simply a pull back.

Above is a screenshot of my records, you can click to open the full size to view.

YTD I am still down by about $300, am 100% in cash now & monitoring the market for new signal.

Various bearish divergence signals had went on in S&P500 for some times, some SGX listed stocks also seem to have hit their weekly moving averages which by the way had been down, so its a matter of I am wrong and markets push above their moving averages or more likelihood that they resume their downtrend for a little while before presenting potential buying signals to rise again. One example is OCBC below which I have traded several times since July 18. Fundamentally I thought interest rate rise means better interests income despite various challenges from home mortgages which is slowing and trade war fears. Nonetheless chart wise, the last drop April to June had caused the uptrend to reverse into downtrend, and recent rises had not change the weekly moving averages. The steep MACD-H histograms usually suggest the bear is quite strong and past 3 months is just consolidating, the support line of $10.80-$11 had also been tested several times, with a downside breakdown risk increasing especially with lower highs in early August 18 when it hit $11.80 & the lower high at $11.57 2weeks ago. OCBC is only one of the many counters on SGX, many other counters showed similar patterns. So when unsure, I shall step aside & pray that I am wise to enter at the right time and price for as many of my future trades as possible... Amen...

See you again in 1-2months time.

Portfolio update - July 2018

A short update on July 18's transactions:

I went back to trading (yes, I did it again) but let me explain (my excuses)...

Suntec REIT
On 11/7/18 I sold 17K (following FIFO accounting, or its troublesome to edit on my spreadsheet), basically it fell to a low of $1.80 turning MACD-Histogram red in mid day & I felt it may be turning down (over focus on short-term, daily & missed out the longer term weekly). I also kinda felt that Interest rate rise should probably affect this counter negatively, which turned out true as its DPU dropped slightly though mainly due to more units outstanding.
On 16/7/18, I sold the rest of stakes 20K units as price set to close at $1.81 with MACD-Histogram turned red at close. Well I was wrong, as MACD-Histogram continued to flip between green & red (my broker advised me to use Heikin-Ashi candlesticks but I cant wrap my head around its display on chart, I felt like the actual open & close in normal candlesticks more important).

Looking back, I should have held on even after ex-dividend as Suntec REIT definitely seem to held on to its bullish momentum & rose higher today, perhaps ready to strike new high in coming weeks.

OCBC Bank
I traded in and out of OCBC as I spotted a potential short term rally, my entry was abit early & high as my buddies went in after me at lower price, we held for a while but miss selling at the high. For OCBC, I waited until MACD-Histogram turned red then exit.

All in all, the above trades made me about $3.2K in July 18, which helped to reduce my YTD realised loss to -$4033.10, hope that I can close with a good profit or at least breakeven by end of the year.

Holdings
I am still holding on to NetLink NBN Tr and SingTel.
For NetLink NBN Tr next expected distribution is in November, business wise seem resilient, shall see if the business model is indeed hedged against interest rate rise.

For SingTel, I could have exit to breakeven, but after seeing Suntec REIT's rise, I thought the pattern resemble SingTel & decided to hold beyond ex-dividend rate until possibly next earning release.

Other thoughts - Facebook
Recently there's a tech pull back sparked by Facebook's dramatic fall, a personal idol of mine Adam Khoo shared on his analysis on Facebook both fundamentals and technicals. If you like to know more, do click on the youtube video.

Studies resume in August
My Master Studies at SUSS is officially starting this weekend, I will retreat to a hermit mode & rush with the many writing assignments & exams... Hope to write again in August if not latest in November or December as I reflect for the year if I managed to profit or breakeven & recoup my Midas' loss. Happy National Day to Singaporeans! Peace & Prosperity!!

Converting to a Dividend Portfolio - A smart or denial move?

I started converting bulk of my capital into Dividend yield play as part of honing my horizon for a longer term. Basically I bought 3 counters; SingTel, Suntec REIT & NetLink NBN Trust using 80% of my trade capital.

Switching strategy requires a change in mindset, had I remain in trading mode I would have struggled and bite the pain to exit stop loss for counters for all 3 of them, which may have been a good move as I would then limit my loss to about 2% per counter but that would also hit my maximum stop loss of 6% for the entire portfolio and requires me to stop trading for 1 month to review my strategy.

However, since I declared I am switching to dividend longer term play, I had to look pass the short term capital loss (unrealized) and focus on the "cashflow" or the dividend that's expected and build up passive income in my new dividend strategy.

Below I am going to delve into what went on in my mind when I purchased the 3 counters.

Suntec REIT's trading notes
Fundamentals as of 25 April 18's report:
DPU 10c or 5.6% at $1.785; distributions quarterly in May, Aug, Nov, Jan.
PE: 21.9x Price/Book: 0.854
DPU: 1Q18 2.433c, 1Q17 2.425c
EPU: 1Q18 1.7c, 1Q17 1.8c
NAV: $2.119
All-in financing cost 2.73%, debt to asset ratio 35.2%


Holding 37K @ avg.cost $1.74, long term DPU play

My initial entry for Suntec REIT on 28 May 2018 at $1.785 was based on a daily bullish divergence which did worked out initially when it moved to $1.82 touching 26day EMA before it resumed its downtrend. I should have exited either 10 or 11 June 18 which would limit loss to $1.74 (low of the days) but I had to ditch my former trading mindset & adjust to a new cashflow dividend focus.

Later, I entered with another 20K purchase on 21 June 18 after indicator MACD-histogram turned green, but the day I entered it fell somemore briefly turned to red then back to green. Honestly with the Fed's rate increase expected for next 2 years, the current distributions may be reduced and current yield of 5.6% or so may be reduced to 3-4% by 2020. But before 2020, there should be various rallies & pullbacks though the current trend is definitely down unless the price on the right edge could push above to $1.81 which may signal the downtrend is over. I may also switched back to trading mode & take profit first, especially if trade war is not resolved & may eventually rolled to a devastating snow ball that reignite a great depression (see Alessio Rastani's "Will A Trade War Kill the Stock Markets?")


SingTel's trading notes
Fundamentals as of 17 May 18's report:
PE@$3.31wEPS24c: 14x   PB 1.83x   norm.PE 10x
EPS FY18 33.35c; FY17 23.91c
4QFY18 4.77c, 4QFY17 5.89c

Dividend $0.175 2x; 26 July 18 ex-date $0.107, Dec $0.068
$0.175 to maintain till FY2020 except unforeseen circumstances, thereafter revert to payout ration 60%-75% underlying net profit, FY18 81% of underlying net profit.
Holding 10K cost $3.31
25/5/18 (Fri): SingTel buy back 440K worth at $3.34

18/5/18 (Fri): SingTel buy back $1mil.worth at $3.42-3.43

My purchase order for Singtel at $3.31 was triggered on 30 May 18, it was the support that have been tested 4th time but it broke at the 4th time. Once again, I struggled whether to cut loss (trading stop loss rule) or hold on; I decided to hold as dividend 10.7cent is due with ex-date on 26 July 2018. Furthermore, SingTel had made forecast to maintain $0.175 dividend for next 2 financial years unless there's unforeseen circumstances. On the right edge, the fall is long and painful and yet to see any consolidation or bottom yet. Based on dividend plan, I intend to average down with my balance 20% capital when there's a potential reversal signal that comes from weekly chart instead of daily as daily's indicators are flipping between green and red (MACD-histogram) thus negating the signal's validity. A potential threat is the flight of monies from emerging markets to US, similar to 1996's Asian Financial Crisis which may affect forex exchange when converted to SGD. Thus far SGD had also fallen but not as much compared to some of the other countries like Indonesia.

NetLink NBN Trust
Fundamentals as of 14 May 18's report:
FY2019 IPO projection est.4.6c, 2xDPU or 6% at $0.75; IPO Jul 17-May 18 3.2c, Nov 18 est.2.1c
Stable slow growing business

8 Jun 18: CEO bought 100K@$0.75, cost $75K
IPO $0.81
Holding 50K cost $0.75

I purchased this as I thought the volume during the pull back is lesser, thus the bullish divergence in force index. Furthermore, buying at the same price $0.75 as CEO should be quite ok as there's someone "with you". There's also various articles that cited the leverage cost of NetLink Trust tied to interest rate thus the distribution should be "safer" than the other REITs or SingTel. On the right edge, force index still somewhat shallower (ie.lower volume traded) than when it broke down from $0.815. If I could somehow exit Suntec REIT at a profit, I may switch to NetLink NBN Trust as its fundamentally safer though distributions are twice a year.

Final thoughts
The trade wars seem like the biggest threat now, all kinds of doomsday thoughts from Great Depression to Global recessions as the world deleveraged etc. On the other hand, World Cup had finally proceeded to quarter finals, so after that more traders will be back in the markets, perhaps that will reignite a new round of momentum, question is will it be more value shopping or panick exit?

I've finally passed my foundation course at SUSS for my Master of Counselling course, the next term's class is starting in August 18. Am expecting alot of assignments, exams, and less time to focus on investing. Not to mention my other personal new year resolutions like getting into work out habit, its been there for 5years but never disciplined enough to become fit :( 

Lets hope I have better results to share in my next update... Good luck! May the trend be with you...