1H 2021 Investment Results

Haven't been active in posting as I was in a sort of discovery journey on options trading, mainly selling putting options, experimenting various options strategies such as the wheel & going through hours of Adam Khoo's videos on Options Ironshell & Ironstriker...

I will talk abit on my personal review of the 2 options courses in general as well as my 1H2021 results thus far.

Review on Adam Khoo (or rather Bang's) Options Ironshell & Ironstriker courses

Firstly, the videos I watched was shared by someone & wasn't the latest (I think its 2019 version) so there's probably some changes / updates since. However, based on Adam Khoo's free & open sharing on his youtube , the changes are minor (eg. Bull Bang / Protective Bullish Synthetic to Collar Synthetic Strategy, the only one I noticed) but the rest are largely the same. Well strategies are like principles, such as Value investing, Swing trading etc. these strategies remains the same past decades, abit of tweaks here & there, depending on individuals' style. With that set, here's my review.

The courses comprised of useful tools (excels - linking TD Think or Swim platform to color code options with rich / poor premiums, portfolio plan, tracking table etc.), power slides (for those who prefer hardcopy to read) and hundreds of hours of step by step videos with examples of trades. I personally learnt alot and find it absolutely enriching.

In terms of takeaway, which you I will attribute a good part of credits to AK, my return had breakthrough to a whole new level I never thought I can achieve. However, those strategies that I like & use to achieve these returns, are actually the most simplistic & basics which almost every options trader are well aware but different level of appreciation & mastery. My strategies thus far are mostly selling put options with occasional bull put spread or hedging on VIX, I experimented abit on diagonal (lease to rent - buy long dated call (lease), sell short dated call (rent); but my most preferred are still selling puts - simple but abit of arts (like what to sell). On this, I combined by usual trading methodologies of catching bottoms or pullbacks with a search on high Implied Volatility (IV) stocks to sell put options on. In addition, the "ah ha" moment was when I struggled to cut loss on stocks that went against me (eg. TSLA which fell from peak of $850 to low of $550 & SI which fell from $170 to $80), both caused me quite abit of drawdowns which I managed to recover from. As I read from various groups' comments, I learned more from others such as diversification over various counters, rather than selling 6-10puts with weekly expiry consecutively in upcoming 45days and so on.

In conclusion, the cost of the courses are definitely worthwhile to invest in, but it takes alot of dedication to research, learn, test & also adapt (carefully) to suit one's style. However, the materials are already out there, at least those that led me to my profits; much of the other strategies are not so comfortable to me at this stage, maybe because I still haven't master them or I dont like the number of legs needed to execute. You can actually learn almost 70% of the materials just from his videos on youtube (yes all his videos added up already cover more than 70% of his strategies taught), but the most valuable part which cannot be bought is the community (AK or Bang's Telegram group - like minded peers' money making ideas & sharing). So, even though I already have the videos, I will be keeping a lookout for AK / Bang next Black Friday sale, will take some profits & invest to learn continuously to practice & trade skillfully over time.

1H 2021 Investment Returns

My return for 1H2021 is 18.9% or USD 34k out of invested capital of USD 181k (rounded to nearest k). Adding back the 100 VRTX share assigned, the return is about USD57k or 30%.

The chart above illustrates the deposits of capital & drawdowns.

I opened my TD Account on 26 August 2020, was experimenting around & gotten my first assignment of KR which I took loss as it fell despite a positive earning report then (8 Sep 2020).

There were some drawdowns related to BABA which was affected by China government's clamp down, but gradually my appreciation of the strategy & risk management increased & I pumped in capital (marked by major blue bars for the horizontal increase in balance). At the end of 2020, I was net equal to the capital I put in then, thus instead of removing 2020 transactions I continued the entries in Excel & included it in the chart.

The slow gradient increase over time are the premiums sold which some I covered but mostly at profits, still there's some drawdowns which is only part of the investing journey. On the right edge, I was assigned 100shares of VRTX which I held & sold call option on it.

Overall, 1H2021 that is, the return in USD has been quite impressive for my standards, I hope to be able to keep up my rational & wise judgements to generate more returns consistently overtime.

Hope you enjoy this & may the trends be with you...

CPF Interest 2021

Its that time of the year again, where everywhere i browse i see bloggers sharing how much CPF interest they got...

So, i decide to share mine as well, but abit of demographic info.would probably give more context as undoubtedly readers will be comparing this to theirs individual situations, which is likely to be different from mine.

I'm aged 36 this year, attached but not married yet; no housing obligation as i took over my late Dad's 3 room flat with 62years lease (but likely plan to BTO this yeat). So please note the balance is only possible due to 1) early cash top up to SA, 2) transfer of OA to SA several years ago & 3) no mortgage debt.

Needless to say, 4% from SA balance of $215k contributed to the bulk of the $12k interest. This put my trading to shame as neither my cash capital (including my personal saving) nor my returns could beat CPF returns in the past 8 years.

Maybe ETFs n long term holding instead of trying to time the market, is the way to go for 2021.

Before ending this post, one should be reminded of their greatest assets, that is HEALTH!

When we are in our active years, our expenses are low. I cant remember if the $699.40 outgoing from Medisave was it purely for Medishield Life premium alone or does it include any medical expenses in 2020. In any cases, the fact you are reading this means your have survived Covid19. Being alive is the greatest gift because it means there's still chance to make changes if you want to.

All the best to 2021!

2020 Review

 2020 has come to an end and hopefully with it all the woes & tough times we've had.

So how did this year went for me?

My Realized Profit was $10,326.60 or about 5.7% gain from an initial trading capital of $180k at the start of 2020. While this realized profit may seem impressive, I am "struck" with a paper unrealized loss of $13.7k for my SG portfolio below:

A Quick review of my current SG Holdings:

Duty Free International

This trade was first entered over its large capital distribution announced late 2019, I tried to average down only to be struck with a outsized holding of it compounded by Covid19 pandemic. This company had since survived the custom claim which appeal court has ruled in favour, but its worries are still not over with the lockdown of international borders. It has since closed some outlets to conserve cash, its Duty Free edge is also blunted by the Online Shopping's discounts thus its prospects will only return when international travellers return to Malaysia again. I have taken some losses but kept the bulk of holdings, fortunately it has recovered in its price like the other hospitality, airline stocks where it rose from the bottom of about $0.078 to $0.096. I am hopeful this once dividend cash cow still stand a chance with Covid19 vaccines started distribution, based on past new cases waves cycles, by February 2021 the cases should have fallen by then, and maybe by July 2021 the air travel could rose to its pre-covid volume of 50% for its operation to be profitable again.

Hongkong Land USD

This counter was a value trap that I got in when I saw a "financial guru" highlighting this company's deep discount against its NAV, this guru actually advocated a sort of "arbitrage" system by leveraging portfolio upto 200% using margin account / CFD, his system of buy 2x what your cash can afford and earn the spread of say REITs / Div stocks 4-7% minus CFD / margin of 2-3% interests rate. But mid way into March 2020, he announced he de-leveraged down his system as the prices fall likely had force him to raise cash to top up short fall.

Ok I go too far, anyway some of his points are still valid, this counter has been paying annual dividend of USD22c without fail, even during 2008 subprime crisis. So even though I am still deep in paper loss, this is held in my SRS and I intend to hold it for longer term, after all SRS withdrawal is at aged 62 only, so why not hold it till then?

OUE Commercial REIT

During the first "dead cat bounce" I actually traded some counters & made a small profit at the early stages of Covid19, I rotated my cash into this & had since got struck in it. There's also some worries over its Lippo sponsor, as can be seen from the dramatic fall of First REIT. During a seminar back in June 2020, the REIT manager assured of the triple lease arrangement & how they converted hotel to target quarantined individuals, but then the cluster at Mandarin Orchard Hotel which thus far found no lapse in its safety protocols. Still, it may take some time & effort to attract back customers again. Its DPU has been cut almost half in 2020, but this should recover in 2021. Other operations such as its office holdings still relatively resilient though in the near term of 2 years its unlikely to see growth of DPU beyond its pre-covid19 peak.

Nikko AM STI ETF

I have always been trading short terms, and seldom hold an counter beyond 1 year unless like those above when I am forced convert to a long term holder (more like prayer to recover cost). Still, I have become a half convert to Financial Independence Retire Early (FIRE) movement and several of them used a dividend sort of ETFs holding to diversify risk while riding on a region /country / sector / theme growth. My first purchase was through the new Tiger brokerage, which no doubt its cheap at 0.08%, there were hidden fees like interest financing charge when you withdraw your supposed "withdrawal amount available" because your proceed has not been cleared (ie. within D+3). My second purchase was through DBS Vickers Cash top up which charge me 0.12% and deposited into my CDP, this way I get to receive & participate in all the corporate actions. Increasingly brokerages are charging fees for custodian accounts after some cut the commission to 0.12% to try & match, but then cut back on other perks such as money market fund rate / interest rate while charges all sorts of handling fees for receiving of dividend to voting in corporate actions or submission of proxy forms. The brokerage industry is likely to get squeezed by cheaper foreign brokerages like Tiger, TD Ameritrade & Interactive Brokers; dont be surprised if we see some of them merged or closed in 2021.

Conclusion of SG holdings

All in all, I believe the paper loss of $13.7k should reduce by half in 2021, most (if not all) of the counters above should survive & rise back in the year ahead. I probably move into a more passive approach in 2021, as my past 8years of trading results have shown, sometimes the simpler way of buy & hold index funds actually deliver much better returns. 

If you like to see my detailed transactions in 2020, you can click the png.file below.

My past 8 years or trading results comparison

Lastly, I have diverted SG80k to TD Ameritrade to try out some options strategies in Q4, though there has been some setbacks associated with the wild swings of Alibaba (BABA) ADR. Currently its breakeven with several options due to expire in Jan 2021, as such I will not be sharing much on this for now.

For 2021 ahead

I have completed my Master of Counselling studies this year 2020, so I should have more time though I might devote them to my family & work. In any cases, on the investment front, I am aiming to:

1) Move into ETF passive holding (possibly 50:50 split between ETF dividend style & trading)

2) Generate options income & minor options trade in US

Wish all my readers a better tomorrow in Year 2021! Happy New Year

Disguised Charges by SG Brokerages

Recently brokerages in Singapore has become more competitive after the entry of Tiger Brokers charging 0.08%++ and US low costs brokerages like TD Ameritrade at 0% commission for US and Interactive Brokers at 0% commission for US, 0.08% for SGX. This has driven down brokerage commission charges by several local brokerages such as POEMS to 0.08% SGX and USD 6.88 flat and LimTan to 0.12%-0.18% for SGX and USD 0.07% (not really that competitive actually but it gives NTUC Linkpoints).

However, what drove me to write this post is the disguised charges by SG brokerages that used to be dormant & has started taken effect. These are charges that applied to custodian shares accounts (most of the lower commission charges require you to use custodian accounts where your shares are held in trust with your brokerages, this assure the brokerages that you will have to sell your shares through that particular custodian brokerage where your shares were held).

Most of these disguised charges were previously "waived until further notice" but has started to taken effect in recent months since August 2020.

Examples:

POEMS charge $10.70 for "Cash Offer, Rights Issue, Privatisation Exercise, Merger & Exchange, Cash In Lieu, Liquidation, Redemption of Warrant, Loan Stock or Bonds, Capital Distribution, Tender Sales, Warrant Conversion" which is quite a heavy cost that comes with basically any action that you take as a shareholder, whether its receiving dividend or choosing between scrip or cash dividends. The brokerage now has squeezed itself in between to take a unfair cut out of it, this is regardless if you receive a $10 or $5000 dividend. By the way if its $5,000, POEMS "1% on net dividend subject to min of S$1.07 and capped at S$53.50 (inclusive of GST) + Foreign broker fees and taxes (if applicable)" would ensure it takes 1% at $50, capped at S$53.50.

This compares to other brokerages, like LimTan's Schedule of Charges.pdf 

One can see how ridiculous the brokerage market has become with its charges, the way they take a cut out of our hard earned investments without being a shareholder, I wonder about the "fiduciary duty" that these firms supposed to have. Worse (probably as usual), this happens in stealth, meaning there was never a formal letter or email with any exit options given, these brokerages just happily charged your account's cash away and give you the balance. Had there been a formal announcement & exit option, such as if you wish to avoid these charges, we can transfer them back to your CDP for free? (no? in your dream world maybe).

In any cases, one need to take stocks of your portfolio, if its short term trading, perhaps the lowered commission fees might be worthwhile to use custodian accounts and try to sell / exit before any corporate action's ex-date. But if you are like me or most retail investors who held shares since start of 2020, you probably have some shares "struck" in your portfolio where their market price is lower than your cost price. Most people might think well the company is good, it gives dividend, so lets hold it... 

Yup... until the brokerages come in & take a cut, without telling you (oh its there at our website you see, oh my mother also said one should be act with integrity & communicate transparently too... didn't your mom taught you that?).

If you find yourself not wanting to be "slaughtered" like some fat hog (I'm skinny with little money btw); there's one option left, that is to submit a formal request to your brokerage to transfer your shares in custodian back to your CDP account where its safe & sound (no charges whatsoever of the disguised fees above). You will need to ensure you negotiate hard, SGX CDP charges only one time $5.35 when you in custodian & you in CDP are essentially same or related. https://www.sgx.com/securities/depository

Be careful, not to be led astray & suffer more cuts with other fees; until they cut you, then you realize it. 

Strategies Backtest

On Vesak Day, 7 May 2020, I kinda reached my own enlightenment "aha" moment when I backtested 2 strategies on STI ETF:

1) Dollar Cost Averaging (DCA)
~ assuming fixed $1000 invested at open of Tuesday either on or after 12th of each month
~ distributions received are either re-invested the next month's Tuesday in one lump sum or "smoothed" over a few months

2) Weekly RSI 31 mark invest half
~ Fixed $1000 accumulated every month along with distributions into capital fund
~ Invest half of capital when 2 conditions are fulfilled:
i) Weekly RSI hit 31 or below
ii) Weekly RSI tick up
once both conditions are fulfilled, half of the capital accumulated will be bought at the coming week's open

If you are interested, you can click here to see the excel I used to manually backtested.

Both strategies were applied over a 7 years and 4months from 2013 January to 2020 April, when most indices recovered somewhat near half of the losses.

In case you are wondering, why 2013, its the period when I started tracking my trades and returns and posted them in this blog. I was reflecting had I used other strategies, what might happen? Is there a better way and so on. After all, even Warren Buffett says if you unsure, just buy index ETF "a portion of United States".

I was pondering what if I bought "a portion of Singapore" instead of my various trading strategies over those years.

The Enlightenment "aha" moment
The results are as follows:
Strategy 2 "Weekly RSI 31 mark invest half" is more superior, it ended on April 2020 (STI ETF price at $2.605) with portfolio of 25,600 units worth of $88,932.08 (including $22,244.08 cash) against injected capital of $84,000. A return of 5.9% over 7years & 4months or about 0.8%pa.

Both strategies reinvest distributions received.

Strategy 1 "Dollar Cost Averaging" with "smoothing" ie. spreading out reinvestment of distributions received instead of all of it in the following month proves slightly better.

"lump sum distribution reinvested" Portfolio of 31,000 units worth was $81,051.30 including $296.30 cash against $84,000 capital netting -3.5% or about -0.50%pa

"smoothed distribution reinvested" Portfolio of 30,800 units worth $81,295.20 including $1,061.20 cash against $84,000 capital netting -3.2% slightly better, and about -0.46%pa.

Assuming one continue to hold STI ETF after market recovers eventually, it should return around 3.5-4.6% annually.

One thing to note, interests earned are excluded, to focus solely on how the strategies match up with my current portfolio and strategies.

Second factor that work against the DCA approach was the $30 of commission fee assuming 0.28% brokerage fee+other CDP charges etc.which totalled a whopping $2,700 over 7years+. While the Weekly RSI approach based on 0.29% as each invested amount is much higher than $1000 each month; the brokerage costs was only $206.42 with only 4 purchases that match the 2 conditions.


The dismal return is due to the fact that STI give more return via dividend and was almost flat in capital gain as compared to other indices like S&P500, Dow or Nasdaq which have been rallying strongly.


Though STI ETF approach is more safe against individual companies which my blog have shown, the likes of Midas, Foreland that become suspended despite their accounting value worth, shows diversification does helps in minimizing catastrophic losses since STI ETF routinely rebalance itself with the most representative 30 companies on SGX.

I think its enough for today, looking at long term using weekly indicators help during times of uncertainty, though one should note weekly RSI did not get the absolute bottom and can be off by 5-10% from the low. Nonetheless, over the longer term, it may be a good idea to mix or buy more during significant pull backs to oversold zone as indicated by weekly RSI.

Good luck to your trading & investment & stay safe during the circuit breaker in Singapore!

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?