Cory Diary : Portfolio Resilience August Report

STI Index has major roller coaster rides this year. The most recent one is just this month when it erases all it this year winning and then creep back up a little to end at +1.23% YTD. After dividends, probably +4% range.

How did Cory Portfolio performs ? If we are to use the relative perform chart against STI, End Jun report is Here and Early Aug in Here. Iran conflict did not happen. I was trying to secure the widened gap. Let's look how it goes.

Year-to-Date

(updated for privacy) 

Cory Portfolio  : 15.8% which came down from 18.x% range 
excluding fixed instruments (ie bond)  : 19.2%.  This is mainly due to weakness in Banks, STI ETF and lastly Mapletree NAC Tr (Black-swan - HK Riots/RMB Depreciation).

(updated for privacy) 

Overall portfolio outperforms STI by 11.x% so far this year. There are some changes in portfolio mix which I will elaborate in later blogging.


Cory
2019-0830

Cory Diary : Trades - 2019-0829

Early morning today, dear wife lined me .... "Armoured cars rolling into Hong Kong" which kind of shocked me as I find this possibility remote. But after reading in detail, it was a "Routine" so to speak. We both agree .... is more of trying to intimidate. However, this is enough. 

Decided to clear my Mapletree NAC Tr which registered two years of dividends. Could have been three years have it not the riots. We can't win it all can we ? This sale is quite painful because it has hit 6% yield. Decided SPH Reit despite 5% yield is the one I am comfortable to replace with. Obviously larger capital needed if I am to lock in similar dividends size.

The other key trade is I decided to sell my remaining Singtel shares. I took the opportunity when it hit a local spike to offload. One counter less as I decided to try iReit Global. Jio still on the hunt for market shares. Despite Airtel good defense, the battle will be prolonged hence my decision. Frankly, I feel some relief from the sale as I found later there is some mental stress hidden in the background. As I can sleep better, is a Good Choice !

A minor trade on some of my earlier Ascendas Reit shares failed. So I managed to bought back some shares in recent dip therefore boosting my dividends in the counter. I would consider this average up. I do average down on DBS.... which was my plan to align more towards STI for 2nd half of the year to benefit from it rise or rebound.... . Fortunately, the plan aren't so match and so much less impacted by STI Index recent banking segment poor performance.

Other than those key investment decision, I also remember attempting a speculative punt. Wish me luck on this one. Non-bank, non-reits and non-property. Is dangerous feeling rich .... All I could say.


Cory
2019-0829

Cory Diary : How far can capital appreciation go for yield stocks ?

Take a peek in latest chart ... link.

In case link broken in the future .... here's the chart which show an excellent chart on forward dividend yield.

Using Indonesia, Singapore has 47% capital appreciation to go. 38% using Japan yield as a reference. In a market of overflowing cash, ever lowering yield is way to go.

Of-course this is still dependent on which stock we choose as the data is broad average. Some companies can still perform major screw-up. Will you be net buyer today ?

Reits hold very well so far in the market.

Cory

2019-0826

Cory Diary : A War that shouldn't have started ...

Trump twittered to increase taxes to 15% on $300B and remaining ... etc. This is in response to Chinese PRC increase tariffs on American products.

Frankly, the import of American goods to China is far lesser than China exports. Any increase in tariffs now is like whipping a dead horse after several rounds of retaliations. In all it's purpose, China latest response is for local consumption mainly FACE and probably upholding President Xi power base. Unfortunately, President Trump aren't the type who can lose face either. Furthermore this help America interests and his voting base to provide reason to further isolate China from America Economy to prevent a China near term rise to challenge America power presumption.

( LKY has said before as long China has peaceful development provided The PRC Chinese holds their horses they would reach their Super Power status. What a wise word said so long long ago. The key meaning therefore is "Provided" which appears no longer able to uphold Economically in Trade and Militarily in South China Sea)

With Tariffs card played out, China only left with mainly Currency or Financial instruments to continue the game. They have chosen currency which is the start of RMB weakening. This will be a down slope trend. So anyone holding to Forex exposure could be at risk. In reality, there could be upheaval in the market. And selling US treasuries to protect will likely to happen. This is a dual sword as it will weaken USD and further improve American business competitiveness that Trump has been begging Fed for.

Meantime, in any MNC industries, after such a long period of tariffs gestation, most are ready to switch to alternate countries on the go. There will be some pain but it would help to spread the wealth to regional countries rather than consolidate manufacturing base to a single country to benefit from. This will happen as is not just intellectual protection and fair trade. Is about containing China rise and ensuring America continues to be the only super power.

Maybe if China has cooperated early in the game, the extend of the damage to Chinese economy could be managed. I think we could be at a point of no return now and any compromise will likely requires China to give up a lot more such as FaceBook, Google, Twitter, U-Tube, Whats app market access in-additions to all the original complains. Meanwhile America still have more cards in play. HK Special status, more Tariffs, Supply Chain Value-add percentage and controls, debt limits and lastly if Fed is to cooperate, Interest rates.

The damage is clear based on current DJIA vs Shanghai Index comparison. And this is before expected coming Monday slide in Asia time. But the pill will be very hard to swallow. Finally, the argument of American consumers pay more is irrelevant as this will only reduce consumption slightly as the cost delta to operate outside China is likely to be around 5% increase. This could translate higher in the market but is not going to be out-of-the-world pricing.

This probably explains why Trump is so willing to proactively engage in the trade battle for Supremacy. Even if China can wait till Oct'20 which appears more remote now with the elevated crisis on the economic impact,  Trump failure to be re-elected do not guaranteed any discontinuation in current policy for Trade War is probably the largest misnomer among the media today.


Cory

2019-0825

Cory Diary : Ever lowering Yield Reality

To Cory, every lowering yield has been a key phenomenon for decades as i blogged earlier. Looks at this chart 1. Federal Fund Rate has been going on since 1980s. That's almost 40 years of trend. Recessions precipitates whenever there is locality inflation (not shown in chart).

Chart 1 : FFR, Treasury Yield and SP500

Let's look at another interesting chart 2. What happen with increasing effective federal fund rate. We probably have yields inversion.

Chart 2: Effective FFR and Treasury Yields

From read above, Interest rate is closely tied to managing inflation. With increasing rate, there is potential of recession. The overall trend for the past 40 years have been decreasing rate as long we keep inflation in checks. Ever lowering rates have been driving SP 500 direction up generally. 

This could explain why there is no rational reason for Fed to raise rates unless we see high inflation. Low rate means money to fund cost of business is low therefore driving employment I think ! So who want to go against that ? Will we see even lower yield (meaning high reits prices is here to stay ? ). Why not ? I aren't going to bet against a 40 years trend.

What this mean is that the more we delay in investing yield income asset, the income we have will be lesser in the future. So do we still want to take profit or should we let our investments continue to fund us ? The only time I think is practical to get out is when we really have major recession like 2008. This is like lifetime event. However, even if we didn't sell, is still a small beep on the ever lower yield trend and high stock prices after.


Key takeaway from my read

1. Ever lowering yield is the trend. Meaning lesser dividend income if we invest later.
2. Inflation drives Interest rate
3. Low Interest rate drives economy


Let me know your thoughts


Cory
2019-0821

Cory Diary : Asset Allocation Review 2019-0810

Seems like it has been a while since last reviewed my asset allocations. Not that I do not like. I always have the curiosity on how they goes and prefer to check on them more often than not as I am a slow learner. Usually I will do a quick round of updates across my accounts and have them reflected. Thanks to excel, this is all done in minutes.

In this update, the computation is a lot more simple on a more conservative side of perspective angle. Saving allocation has been reduced to 10% but I think it can be further improve.


Liquid Cash Flows from Investments
Equity/Bond/Pref theoretical annual dividends : -
Gov Securities : - ( assume max 10 years )
Saving/FD : -

Investment Sub-Total : -


Maximizing Returns
Saving 10% allocation implied missing (updated for privacy)  possible earning. So I think maybe opportunity to tap more here in the future

Sub-Total : $0


Pension/CPF/Insurance
This will be buffer. Another is because I would probably tap on them after 65 yr old.

Sub-Total : $0


Rental Providence ( update : instead from income)
(updated for privacy) 


Cory Asset Annual Returns : (updated for privacy) 
I do have salary income. And I am still paying Insurance. For simplicity, they are excluded. I hope this is a realistic and simplified as I could get for estimating returns from non-salary income perspective. 

Happy to say this well cover my home loan today. 

My next goal is to increase my returns further to (updated for privacy)  annually from non-salary income with minimal risk.




Cory

2019-0810

Cory Diary : Trades - 2019-0809

I have been looking further into banks but find it not easy to buy more considering the interests rates are being talked down. Getting more Reits are a bit tricky. CMT and FCOT do have some lows past few weeks period but I do not have a chance to investigate further with my recent hospitalization. CMT yield is quite low so my keenness is limited and happy with what I have currently. Buying high yield with weak fundamental is risky. I rather leave my cash alone. They aren't the same league as Ascendas, Frasers, Mapletree or Capitaland breeds ...

STI Index

STI Index has seen rather dynamic swings whereas Cory portfolio has been rather mute. Other than Reits stability, I found could be the bonds which I have expanded to lock in some of my gains. A detail checks on my record I did do a smallish cash injection via my the other trading account. I did another cash injection  when STI went low again recently. This move up my STI Index allocation to more than 12% of my portfolio. This will also align to my interests if STI decides to move back up.

VICOM

As you may know, I have been ranting how small my exposure is in this counter. So I do some buying which boost my Portfolio Yield despite the price has run up this year. I feel there is sufficient positive to have a large stake in. I am more interested in their other businesses. So a bet there will be some growth while able to continue to support the dividend yield (excluding special dividends). This is quite an illiquid counter. You can't buy much and I suspect you can't do much shorts as the counter can spikes and you will be caught with pants down for a long time.

SIngtel

I have been holding from averaging down on Singtel till i see sufficient signs. The last one is the quarterly report which is kind of below expectation. This mean I need to wait for another quarter to review. Meantime, I reduce my stake further to lock in some gains YTD to buy more into Vicom. I almost decide to sell the remainder of Singtel to manage my counter numbers but decides otherwise as there could be rebound that I will hate to miss.

Netlink BNB Tr

As you may be aware . I am back on securing some from this counter. Frankly, the feeling is good as the price goes back up quicker than I expected. So is just a small moon in my bubble chart. Nevertheless, I am glad to be able to get some.

My family and I are very well vested in Singapore. We hope Singapore continues to prosper. So our wishes may this continues !

Happy National Day, Singapore !

Cory

2019-0809

Cory Diary : laparoscopic cholecystectomy

If anyone wondering what the hell it is, I went for ER more than a week ago and end up for laparoscopic cholecystectomy surgery on the same day. Basically to remove my gall bladder and to solve other complication. I would say this is one of the unpleasant surprises I have this year.

Mood swing from positive to delight to negative to very negative .... and then mood came back positive day by day ... all within the span of one week. Sounds like stock market huh ? My wife needs to cheer me up during this period. Think I did more than 10 X-rays ....as well. Fortunately I did not fall into depression from my medical conditions. However, I did loose significant interests to trade considering I am bedridden literally for a week and 5kg lesser.

To be frank, during this "Horrific Period", I took a couple of seconds to glance on my counters despite my mood swings. Today I am back on my desk, to tally up my dividends and portfolio value. What a change for STI gaping down (data points as and when I update my data) to 3170. That's put it just 3.3 % gains this year before dividends.

As for Cory Portfolio I am kind of surprise that XIRR still hold a good 15% YTD or Portfolio yield of 14% range. Do a double check for errors which seems good. The only explanation is that Reits again held up very well as we are compensated by dividends during current turbulent period which also probably gives the impression that the Reit market is sliding more than it was.

I am not sure is time for shopping. I do have some fund in cash management account to boost my portfolio yield (updated for privacy) . My timing on Reits do not have good track record so to speak.... but if I could find something stable for 6% I would grab. That's leave "little" candidates .... to speak of.


Cory

2019-0807