Monday, October 31, 2022

Portfolio Summary for October 2022

As of 31 October 2022


Security# sharesPrice S$%
OCBC Bank70012.132.40
ST Engineering6,9003.306.45
CapitaLand Investment7,4003.016.31
Powermatic Data8,5002.606.26
Sheng Siong13,0001.565.74
Credit Bureau Asia14,3000.963.89
Genting Singapore11,7000.8052.67
HC Surgical35,5000.383.82
China Sunsine41,8000.424.97
TalkMed Group14,5000.401.64
Silverlake Axis15,0000.3251.38
Portfolio Market Value = $353,230

Trade Actions
- Bought 1,500 shares of SGX.
- Bought 3,900 shares of CapitaLand Investment.
- Bought 2,800 shares of Nanofilm.


Security# sharesPrice S$%
OCBC Bank90012.138.18
ST Engineering3,0003.307.42
CapitaLand Investment2,6003.015.87
Powermatic Data3,4002.606.63
Sheng Siong8,7001.5610.17
Credit Bureau Asia5,7000.964.10
HC Surgical19,5000.385.55
China Sunsine10,8000.423.40
TalkMed Group5,8000.401.74
Silverlake Axis6,0000.3251.46
Portfolio Market Value = $133,430

Trade Actions
- None

Another month flew past, but not without my stock alerts triggering almost daily as the general stock market sank lower by the day.  I took opportunity of the sour mood and loaded up on shares of SGX, CapitaLand Investment and Nanofilm Technologies.  I was tempted to add other stocks too, but I refrained.  (Have to keep my portfolio balanced.)

UOB reported a sterling set of 3QFY2022 result [here].  Net profit rose to S$1.4 billion, up 34% YoY.  Net interest margin expanded 40 basis points.  The positive result had been widely expected by investors.  Nonetheless, UOB's stock price skyrocketed 6.7% in the two days post-earning release.  Local banking stocks DBS and OCBC also gained from the sentiment.  DBS is set to report its results on 3 Nov; OCBC is set to report on 4 Nov.

My cash stash has reduced to approx. 16%.  I need to be selective on which stocks to add hereon.  Banks are currently bathed in this favourable light amid the rising interest rate environment, so it will be hard to pile on them at an attractive price.  I am also keeping an eye on The Hour Glass.  I sold the stock back in March this year.  Hope to build my position again as the market retreats due to recessionary fears.

Family-wise, my wife and I are looking forward to our Royal Caribbean cruise trip in November.  It will be a welcome break after a hectic year at work.

Until next time!

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Monday, October 3, 2022

You may lose if you do, but I guarantee 100% you will not win if you don't

We can draw many valuable lessons from the world of sportsmanship.

Athletes spend years going through sheer rigour to hone their skill, in order to make it to the top of their league. Some of these epitomes of success offer precious pearls of wisdom that we can apply in life.

My favourite quote comes from Hockey Hall of Famer, Wayne Gretzky. It states,

"You miss 100 percent of the shots you don't take."

This statement describes neatly the menace that stops investors from acting decisively - fear.

Often, when the price of a share has retraced to our target level, we refuse to pull the trigger because we fear that once we bought the stock, it will get cheaper and we look like a fool who paid more than the next person.

The market has an ominous name for this phenomenon. It is called, "catching a falling knife".

And it can get worse - When we miss the chance to buy and the share price bounces back up, the fear evolves into an uglier monster - regret.

While fear nibbles at our heart, regret takes a big bite.

At the moment of decision, it can feel like we are caught between a rock and a hard place. To buy, or not to buy? To click on the button, or wait?

Hesitation leads to paralysis, and before we know it, the chance slips us by.

Through years of investing, I have found two methods to deal with the malaise.

The first method is simple - take action. Shut out that inner voice. Feel the fear and do it anyway.

Frame it in another perspective:

You may lose ($$$) if you do (buy the stock), but I guarantee 100% you will not win ($$$) if you don't (buy the stock).

Pain is inevitable in life. Suffering is optional. There is a risk in everything. Even eating involves the risk of choking.

The best we can do as investors is to minimize the calculated risk taken, and maximise the probability of a win.

Which brings me to my second method of dealing with fear and regret - preparation.

I cannot emphasize enough - a good investor does his/her homework. He/She knows the right companies that fit his/her investment criteria. Any purchase is planned and not made on a whim.

A good investor should also have a clear idea of the limit price at which he/she is UNWILLING TO PAY for a stock.

When you are aware of the price boundary marking the forbidden zone, the rest of the region is opportunity land.

Both methods work in conjunction with each other. Unless we have good knowledge of the companies we want to invest in, and take action when the opportunity strikes, we will never be able to achieve our intended goal. Financial freedom will always remain an elusive dream.

Given a choice, I will take reality, warts and all anytime.

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Saturday, October 1, 2022

Portfolio Summary for September 2022

As of 30 September 2022


Security# sharesPrice S$%
OCBC Bank70011.832.44
ST Engineering6,9003.587.28
CapitaLand Investment3,5003.473.58
Powermatic Data8,5002.616.53
Sheng Siong13,0001.586.05
Credit Bureau Asia14,3000.9854.15
Genting Singapore11,7000.7852.71
HC Surgical35,5000.414.29
China Sunsine41,8000.455.54
TalkMed Group14,5000.3851.64
Silverlake Axis15,0000.321.41
Portfolio Market Value = $339,517

Trade Actions
- Bought 3,500 shares of CapitaLand Investment.
- Bought 2,800 shares of ST Engineering.


Security# sharesPrice S$%
OCBC Bank90011.837.54
ST Engineering3,0003.587.60
CapitaLand Investment2,6003.476.41
Powermatic Data3,4002.616.28
Sheng Siong8,7001.589.73
Credit Bureau Asia5,7000.9853.98
HC Surgical19,5000.415.66
China Sunsine10,8000.453.44
TalkMed Group5,8000.3851.58
Silverlake Axis6,0000.321.36
Portfolio Market Value = $141,228

Trade Actions
- Bought 2,600 shares of CapitaLand Investment.
- Bought 5,800 shares of Kimly.

Time flies.  We have come to the end of the third calendar quarter.  Earnings reporting season will soon be upon us.  I'm expecting a grim verdict, with stubbornly high inflation eroding companies' profit margins.  (There is only so much cost you can pass on to customers before you lose their business.)

Central bank governors around the world are all marching to the same drumbeat - higher is better.  (Interest rates, that is.)  Even the BOJ had to intervene in the market to shore up the weak Japanese yen, the first time since 1998 [news].

As markets retreated, I nibbled on CapitaLand Investment (CLI) again.  Gone is the exuberance that shot CLI share past $4 in April this year.  Pragmatism and patience trump FOMO everytime.

I accumulated shares of ST Engineering in my CDP portfolio as it hit my target price level.  I also added Kimly shares to my SRS portfolio for the first time.

All of these companies have resilient business models which I'm totally fine to hold over the long term.  I'm particularly pleased that Kimly's management decided to diversify its Rive Gauche patisserie business [announcement].  I cannot see how the coffeeshop chain operator can derive much synergy from owning this confectionery brand.

SATS has officially announced the acquisition of Paris-based air cargo handler Worldwide Flight Services for a cash consideration of EUR 1.187B (SGD 1.639B). [announcement].  The enterprise value is assessed to be EUR 2.25B, smaller than the rumoured EUR 3B.  In terms of how SATS will cough up the cash, per the announcement, SATS has "committed funding in place through an acquisition bridge facility and will continue to evaluate its options with regards to the final funding structure.  The base funding plan entails use of internal cash and an equity fundraising from existing shareholders and new strategic investors (which could include a placement of new shares or other hybrid securities or convertible instruments)".

SATS' indicative financing plan (Source: SGX filing)

The SGD 1.7B equity fundraising is hardly a surprise, given SATS has only SGD 786M cash as of Q1 2022.  But raising money will be expensive in this environment, when central banks are committed to hiking interest rates in order to combat inflation.  SATS will probably need to offer a significant discount to the last traded price in order to entice investors.

The announcement did not sit well with the market.  SATS' stock price tanked more than 20% after the trading halt was lifted.  It must be highlighted that SATS' existing shareholders have yet to enjoy the fruit of the post-COVID19 travel boom, as the company ramped up costs significantly in the last two quarters.  I'm not sure how many existing shareholders are willing to pump more money into the company, even though Temasek has given its blessing for the acquisition.  I myself would like to see the funding proposal first before deciding whether to vote for/against the acquisition.

Well, not that my vote as a minority shareholder will make any difference. (LOL)  Any form of right offering will likely be subscribed by Temasek, inching the company more firmly into government hands.  If I am against the deal, I will sell off my holding in the market.  Broker analysts do not seem bullish on the deal either.  Credit Suisse had cut their recommendation from Outperform to Neutral.  UOB Kay Hian had cut their recommendation from Buy to Hold.

Heading into the final three months of 2022, my cash has dwindled to 21% of total portfolio value.  My household expenditure is rising because of the inflation.  I will minimize any non-essential spending like restaurant meals, and opt for alternatives like hawker food instead.  I don't drive and I hardly take cabs, so my transportaton expense is already at a minimum.  On weekends, I'm busy with my kids' tuition classes and swimming lesson, so we don't go out and socialise a lot.  Short of the cruise trip in November, I have only planned a hopover to Johor Bahru for shopping and massage.  Not going to fly overseas this year.  (I heard airfares now are sky high.)

On a different note, the recent market selloff has presented opportunities to load on quality stocks at favourable prices.  I know it is gut-wrenching to see your portfolio value goes down day by day.  If you have a sound investment plan in place, my advice is to be disciplined and stick to it.  Be aware of how much financial risk you can bear.  Set aside an emergency fund and allocate your remaining money into growing your portfolio wisely.

Until next time!

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