Cory Diary : Has China Won?

This is more a political view so if we could take something out on investment ideas it will be good but the intent of my concern is more grave.

Here's an interesting Video. On surface is logical and sensible. However I also notice the author is a local Indian who sides with the CCP which I find it quite amazing that he has crossed ethnic line which we all may know India and China have been on border conflicts for a long time. Very few can and he has my full respect because is not easy. If we have looked at rivalry Democrats and Republicans of America tops people, you would appreciate crossing ideological lines are not only rare but also difficult. Below link to the interview on the book "Has China Won?"

https://www.youtube.com/watch?v=li6xcTsVPB4

The concept that China has strong meritocracy system which I find it ridiculous considering Xi changed the rule and appointed himself to the post forever which is kind of ironic.

China has best 30 years because American, Japan, Taiwan, Korea and EU companies come in to invest in China to open factories. And they are still heavily reliant today. As we speak today, there are comment that more than 600 Millions Chinese are below poverty lines. We can help them by making sure China do not spend more on unnecessary ventures. I don't have actual data to reference on but the below link can gives us a good idea.

https://www.scmp.com/news/china/society/article/2183771/chinese-disbelief-us295-monthly-salary-makes-them-middle-class

The book and commendatory keeps me worried because I am not so sure is this helping China or making the situation worst for the Chinese people. First of all in my mind, China is not ready at all to take on America or the band of White Nations today. I am a realist and my work do keep my awake of ethnics diversity and their thinking. When they are not in threat they can be the nicest people you ever know. Best of friends. But when comes to a time when their job is at risk, chances are everything comes loose in a very convert way you can never imagine.

So to thumb down United States has an effect of fanning the nationalistic feeling of the Chinese people ( Humiliated century ago) and make them even more want to fight to be number one which is completely unnecessary, and illogical. A number two in the world (We are talking the World) even for the next 50 years for China is an amazing feat and it will gives enough time for others majority to catch up to build a more robust and developed China.

So why this message. United States is a benign power. They do not have territorial aggression but economic development. In fact the return space travel with SpaceX successful launch is a good example of technological might of the nation that utterly keep many dumb-folded. Suggestion to undercutting their defense is dangerous as this will further encourage CCP going further can result in a major war that could send them or maybe everyone back to stone-age and this is completely unnecessary. We need to stop this ego thing.

Cory

2020-0531

Cory Diary : May'20 Performance and Financial Review

Broad View

For the past 5 months the market has been rattled by Covid-19 and is still on-going. Things seem to get better when they learned more about-the virus and how to manage it more efficiently. The amount of rescue packages are so significant I am not sure how long we can sustain this amount. To be fair, the hope is for a quick V-shape recovery without significant lost in jobs.

Coming June, with the pace of opening up expects to gear up, things may not be the same again. The cost of business is going to get higher which could mean our expenses are going to go up as we have to move past the on-going virus in our community and needs for engagement with the world. Post-Covid will be a phase of managing Covid and not no more Covid. Not unexpected, there will be "Green Lane" between countries providing a network of safe passage for their passengers and therefore their economy. The channels between China-Singapore will be important for tourism.

Over the week we have on-going crisis between US and PRC in which HK is now the battle ground. I have seen how Americans beaten Russia (Cold War), Japan (Economic Miracle), and how they take on Venezuela, Iran, North Korea, Libya, Syria,Zimbabwe, Cuba, Iraqi, Indonesia , Ukraine Issues into submission, War or Economic destruction. Each time they prevail by Hook or by Crook. Things could look uglier. "Is a fight like I am willing to take a stab as long you take more."" So one of the concern is will it be like a two steps fall we faced in Year 2008 GFC. 


Investment

The main reason I do investment in stock market is to get meaningful returns to support retirement by not taking too much risk for a gamble on a quick-rich scheme. This is reflected in capital injection in net has been fluctuating zero and as of today is not quite observable so far on additional investment. Due to that as you can see below Pie Chart, my savings are up. Stock Equity portion reduced with increase in bonds.

There is a lot of capital recycle and re-balance through opportunity based quick turnaround trading. So if I am to put broadly between Pre-Covid and now, I would say the portfolio size remains about same (including investment cash), small loss currently but with much higher dividends yield of $58k currently vs $53k in Year 2019.  Squeezing out 5K for a 5% yield product requires S$100k for that matter. So you could say I just got 5k more dividends out of thin air but this is in context that a few of the stocks I have will report lower dpu such as CMT and CRCT (I presume).  The Portfolio is more robust today as is structure with increase bonds and more defensive counters or recovering ones.

In portfolio management I have the experience of being easily succumb to fallacy of large number of counters that we could take reckless risk on the rationale that is just a few percentage of the overall allocation. Therefore I have more than fair share of fees to be paid to the market which over time can be costly to portfolio compounded returns. This have changed much in recent years to control such behaviors of feeling rich.

There are still times where it is unavoidable due to black swan or misstep that we encounter lemons. This is where portfolio sizing comes in and ability to cut loss when needed. I would be careful to say that mitigation is not itself justification for higher risks. As I wrote this, remembered a passage in Michael Leong Investment book on his thought process of cutting loss during major recession which I adapt with some modifications to suit my risk profile and retirement needs. Basically retaining core investment and doing timing trades for obvious.


Performance

For the month of May performance, P/L YTD -3.8% (Xirr - 4.1%). This is much better than STI Index YTD -22% (or very roughly -20% after taking it's div into consideration). So the reduction of bank segment kind of improves a bit. The higher cash build-up and higher dividends in the portfolio is what I wanted for now. I would probably have to see what's next when the economy opens up.

Retail Reits have been enjoying recovery in their prices with easing of Covid measures. To be factual there is still some way to go to Pre-Covid level but regardless one or two steps fall this counter is for long haul. Nevertheless most others Reits are somewhat within the fluctuation boundary prices then or above. Having half the portfolio with Reits/Trust surely enjoyed the recovery provided we do not have lemons within. ie EHT. This is something I need to constantly remind myself to not go just for yield or to gamble recklessly.

To end, do invest safely and with due diligence. This time can be different but we never know.


Cory
2020-0530

Cory Diary : Poverty

More than 20 years ago,  I worked in a local company and has a good Malaysian friend as lunch buddy. As a young graduate then whereas he is very experience and knowledgeable but lesser educated. In one of our discussion, we talked about stocks and he commented he don't have enough saving to do that. I could not comprehend that time because I am just new into the job and have enough money to dabble in stock market. Fast forward today, I think there are variety of reason probably. This is best summaries by this teacher below on pitfall that can fall into us today.

A Video which I thought is excellent from this Chinese Teacher who is able to collect wealth of information on why people are poor. A lot of controversy however this makes us think how to do thing more smartly. How can we not fall back below poverty line. How can we be richer.

I hope this can help some of us.


Cory
2020-0521

Cory Diary : Centurion Read

Dormitories have been hot spots recently due to the explosive cases of Covid-19 among the migrant workers. Westlite SG confirmed Covid-19 cases ~ 4.x% of total foreign workers confirmed or about 3.4% of it's bed capacity.

The 5 buildings look quite well structured and reasonably spaced.

FIRST QUARTER ENDED 31 MARCH 2020

The company has geographical stretch of PBSA beds ( 35% Rev ) but most of the beds are in Singapore and Malaysia which are PBWA (64%).

PBWA - Purpose Built Workers Accommodation
PBSA - Purpose built student accommodation

Their Interests Cover Ratio is 3.4x with Net Gearing Ratio of 50% which is using net debt of borrowing less cash and bank balances.

If not for Covid-19 the company performance just on the look of the rev is quite impressive. From the presentation slides I could tell the company is much deeper than I thought it would be and much more credible as a professional businesses. Certainly doesn't look like a fly by night company.


Cory
2020-0519

Cory Diary : Reits/Trust Portfolio Review Mid-May Period and Performance Report

In 14th April article, I did a Reit/Trust Portfolio review. Here's the link. Since then how has my portfolio goes ? This article needs to read contingent to this link which I won't be repeating here but will be better to have more complete read.

ASCENDAS-ITrust
Some return on this. Took 50% profit and leave the rest for longer term investment. Rationale is Business Park is lesser impacted and DPU will not be badly hit. There is some future DC play but I like to get some buffers.

ACCORDIA GOLF TR
Hold decision looks right as the price is stable. Is still a speculative and asset play. They are a bit slow in the offering which probably due to Olympic delay and trying to time for cheaper price with Covid situation in Japan.

AIMS APAC REIT
Riding with the market. Quite please with the quarterly report.Due to risk allocation I could not expand more. This is small reit but their management looks good. Hopefully they stay that way and not lapse.

ASCENDAS REIT
See some run up since then. Nice rebound. A Core position for me. The yield is not so (typo) high so I wouldn't want to expand more. So happy with what I have as the business is a rock.

CAPITAMALL TRUST
Waiting for up turn when CB measure is relieved. Doing some trading.  Continue to hold as I have confidence in Singapore to ride through this despite recent dormitories issues. Matter of time the public and gov may have to face the Virus head-on and live with it.

CapitaR China Tr
No change ad continue to hold. Positive with the Malls ability to return. Yield is good. And the chinese measures are stringent enough to prevent major outbreak. Life will return to normal but business wise we have to see how it goes politically.

IREIT Global
One of the Reit which corrected quite significantly though unjustly few months ago. At today price, this counter manage to broke even as I trade in/out taking good advantage of investors emotion dynamic with global markets.

MAPLETREE IND TR
Cleared completely for counter consolidation with good gains.

FRASERS L&I TR
Received strong gain for just 2 months investment period. I am out on this one as the profit is too good and the upside is limited imo now. Is a good Reit and the yield still ok but I feel there is time for everything.

MAPLETREE NAC TR ( Updated )
With the onset of possible demo, decided to clear this position. For the short duration investment period, the returns are pleasing. It would have been larger have I sold all earlier.

NETLINK NBN TR
Staying on-course. Happy with the amount of exposure I have. Not much to say except similar to earlier link.

FRASERS CPT Tr
Finally make my return on  this counter with some initial purchase. I think hard on this one as I have CMT but the customers are not exact the same. It also provide some Alpha and the price is quite beaten but the future is there. Retail malls have been hard hit due to CB. The cases in community is getting into the right direction so any relieve from CB is good news. Singapore cannot do without malls.



PORTFOLIO
Portfolio 55% Reits/Trust and 17% Fixed Investment allocations. Currently I feel the portfolio is well-balanced.  All the changes and plan are for peach of mind which mean I do miss out some gains. One misgiving is the non-reit side which I sold Sheng Siong for lesser profit and since ran up much further. Market is funny because it only ran up in the midst of Covid and not earlier. Expanded Bank segment earlier also help to push some gain and dividends but this has to be quickly scale down slightly as i feel the allocation is too large. Hopefully this do not reduce the gap performance with STI.

Cory Portfolio -7.7% P/L YTD.
STI -21.6%. ( exclu. div) so probably -20%.

Some balance cash raised for next round of investment. Two more weeks to go. Looking forward to Worker recovery and business to re-start. The focus in my mind is how to shield from external macro factor slightly more.



Cory
2020-0516

Cory Diary : World knows how to deal with Covid-19

The last time when SARS outbreak, by this month of the year, the market is in good recovery mode. Covid-19 is slightly extended as it spreads much more wider and deeper. It kills by overloading the health care systems. And has to make tough decision on who to save.

UK attempted Herd Immunity, failed and finally got it stabilized. Boris got "an education" from God that every lives matter. Lucky fellow.

US attempted to block off travel from China but got surprised by the Virus going through the back door (EU). Block failed and finally got it stabilized. They talk about lethal Injection. Talk only lah. Blame China is Trump thing. Blame WHO put it on Trump too. He don't care anyway.

SG too block China off and do all the tough contact tracing. However the large migrant concentration in pack dormitories is a perfect recipe for the Virus. Karma thing sibo.  Basically the migrant population is so large is not possible to stop easily. Cases stabilized too and if not herd immunity will if you know what I mean.
Brazil and probably Mexico or Latin Countries I would guess will be classic. Let's there be parties.They will do the Maya way. Death statistic is not important. Food is. Girl too. ;)

China lock down plus lock down multiply by lock down. We will achieve the impossible because we can. Russia mai ti siao. US better stop complaining. Follow me ! ... ... ...

Russia .... in deepening trouble but who the world cares at least economically. Maybe lower Oil price. Does Putin bother ? Saudi Kia.

Taiwan remains undefeated. Is a Cultural thing. "A" student which amazingly do not need WHO at all to manage it. huh ?  World pays Billions ? How much go to the Salary ? Politically incorrect lah ! ... ok ok.

One way or another the World has learned how to deal with it. Social Distancing + Mask. Perfect ! Does that mean No Bull Trap ? Good chance lor.

Hello ! how come No mask ? Better stay 10 feet away from Uncle Cory. Grrrrr.



Cory
2020-0509

Cory Diary : Warren Buffet - Performance in perspective

One thing good about internet to the investment community is that it narrows the gap between people with privilege information and those who don't. This mean those who are rich or hedge funds do not always have the large edge they once do.



Performance since Year 1990

A quick search on the internet on Warren Buffet performance in Berkshire Hathaway Inc. as follow.

1st Jun 1990 Stock Value $7,300
1st May 2020 Stock Value $ 273,950

Pretty amazing value growth. That's mean for every $7300 invested  in the Year 1990 which is 30 years ago, the return is 38 times at today value even after significant write down by the company due to Covid-19. XIRR wise is 13% over the 30 years period for an Investment Guru. For a Singaporean, the exchange rate changes from 1.74 to 1.42 across this long period. After adjustment will be 12.1%.


Performance since Year 2007

How does Cory performance since Year 2007 compounded. XIRR = 6%. That's half his compared to above. For consolation, STI Index is around 2% inclu. div..... .. ...

How about Berkshire Hathaway Inc. In USD since Year 2007. Is only 7.3%. Surprise ! What-if in S$ ?  That's 6.7%. That's not a lot above Cory. Maybe the company is holding too much cash ?


Cory
2020-0503

Cory Diary : Performance Apr''20

Mentally I have been preparing for the day as when the portfolio gets bigger, every 1% drop translate to much bigger absolute figures. In Year 2008 GFC, the portfolio suffers about 50% losses however the losses amount to $50,000. In Year 2020, the portfolio got hits with more that 24% loss however this translates to $250,000 loss. 5 times highers but with less than half % portfolio reduction. This are just Math and if we are to go through stock market history this can happen. If this doesn't happen, we probably not investing enough.

To mitigate this issue mentally especially so for a salary person, my idea is to Buffer the Fear from the market. This is one primary reason why investment in bonds, gov securities and fixed deposits. Even emergency cash is higher. So what is not seen in equity tracker is SSB, FD and Cash but we do have bonds as it is traded in SGX. There are few times I am tempted to sell my SSB but decided it does not make sense considering they are delivering 2%-2.5% guaranteed for many years to come.

Cory Portfolio has a mixed of STI Index, Bonds, Reits, Blue Chips and a small percentage in SMEs. So when the sell down begins due to Covid-19, Banks, Reits and STI Index are heavily sold down. However, core stock assets continue to be held. In fact some injection is done to collect stocks on the cheap slowly as previously mentioned. There is also some re-balancing to consolidate and invest.

As of today, the stock portfolio is -6.5%.  XIRR about -6.9%. STI Index at -18.5%. So by such measure we are 12% ahead or roughly 10% if we include STI ETF dividends already distributed.

There is still good amount of cash to buy if the market turns south however I am reluctant to tap them unless we have clear trend that the market is getting much worst or the worst is over.

There are few things which I did. One is doing some trading between the volatility. There is not much fundamental to speak of but just a relative risk assessment when market mis-priced certain stocks. This happen a lot more nowsaday.

The month of May will be interesting because we know a lot of dividends get distributed usually on this month which probably explains why "Sell in May movement". This year quite a number of dividends got retained or cut. Well I could be wrong but no plan to do major changes in my portfolio. If the sell down is a little severe I could start my buying again.

As for stocks selections, there are quite a few I would avoid other than the usually S-Chips.
If we go by sector will be Transport, Commodity, Hospitality, Medical and Telco Stocks. Most SMEs and Penny Counters. This left with me STI Index, Banks, Reits and a selected few generally. 



Cory
2020-0520