Monthly Review- December 2012

2012 ended the year on a high note for most investors, as the STI rose by 19% for the whole year at around 3,200 points.  This year has been a great run for my portfolio as well, though it's filled with ups and downs along the way. 

The first couple of months has been great for equities, as despite uncertainties, the breakthrough of 13,000 points of the Dow Jones Industrial Average gave investors in the Singapore market a boost of confidence to bring the STI back to the 3,000 levels as well.  However, when May approaches, the "sell in May and go away" syndrome seems to act on everyone again, as the index fell to its lowest for the year, bringing my portfolio down together with it. 

As we continue through the year, the gradual recovery of the US economy, the soft landing and the reversal back to growth by China, the diminishing problems in the Eurozone and all the quantitative easing and the lax monetary policies by Japan, US and Europe gave much reasons for investors to cheer.  This is very much reflected in the markets, even in STI where it gradually moves up since May to end at 3,200 levels in December.

Boosted by all these good news, my portfolio also grew in size.  On a total weighted average, my portfolio was up by a mere 4%.  The seemingly poor performance was due to the huge loss I made at the start of the year when I decided to sell off First Ship Lease Trust.  Ignoring this initial loss, my portfolio would have grew by a weighted average of 14%. 

This year, I got rid of the two biggest "toxic assets" in my portfolio, namely First Ship Lease Trust and Rotary.  Although it takes a lot of courage and the ability to endure the pain from realizing the huge losses, the decisions made are definitely a relief for me.  Finally I do not have to stare at my portfolio with the huge unrealized losses, and continue to pin hopes on them for a possible turnaround.

This month, I sold off Wingtai and ST Engineering, as at that point in time, they had reached their recent all time highs.  Hence I thought that it was the best time to realize my profits.  Nothing much else happened as by this time, I think it may be the time for me to trim my portfolio and to reduce my holdings, so that I have the "ammunitions" to buy quality stocks when any possible corrections come, especially when STI has reached the 3,200 levels.

For the whole year, the star performers are Mapletree Logistic Trust, Parkwaylife Reit, CapitaMall Trust, Wingtai (all of whom I have sold earlier in the year, and now they have reached new highs in their share prices), ST Engineering, and amongst those that I am still holding on, Singpost and UOB Kayhian.  Of course, needless to say, the main draggers are First Ship Lease Trust and Rotary. 

For the year 2012, my annual dividend returns is 2.4%.  This is because for the year, I have sold off too many dividend counters, which is the main reason for the decline in dividends collected for the year.  In 2013, I will continue to find good dividend counters to add on to my portfolio to increase my dividend income.  At the same time, I hope that I remember and relearn all my "lessons learnt" penned down this year, so that I can improve in my investing journey for the new year!

 

My Current Portfolio:

 

Performance for the Year 2012:

 

 

Lessons learnt:  It is important to adjust the portfolio every year, to weed out the losers and add on the gainers.  This will help to boost the portfolio, to prevent the losers from sinking the portfolio further.  Do not rely on "hope".  If the fundamentals have changed, get rid of the losers as soon as possible to minimize losses.  Averaging down can only be done for quality stocks with good fundamentals.

ST Engineering (23rd Mar 11 to 18th Dec 12)

ST Engineering is the first major blue chip stock that I managed to venture into after building up some capital.  After its share price slide down by approximately 10% or so, I decided to grab this opportunity to purchase 2 lots of this strong conglomerate for possible capital appreciation and strong dividend returns.

However, it seems like there were more sellers than buyers for this conglomerate during that time, as even when fundamentals of the company remained intact, and its operating cashflow remained healthy, its share price continued to decline under pressure.  The decline was gradual, but consistent, making the share price down by another 15% thereabouts over the next 8 months.  This made me very disturbed, as despite the intact fundamentals, this is not reflected in the movement of its share price. 

Noting this, I decided to put aside my fears of possible further decline in share price and increase my holdings in ST Engineering, which was a great opportunity for me to average down my average purchase price, as well as increase my exposure to this strong conglomerate at a discounted price to its actual value. 

Indeed my beliefs paid off as soon after, a price reversal set in, allowing me to sell of the extra lots that I have at hand to further lower my average price of the 2 lots at hand which I intend to hold for long term.
Consistent and continual contract wins by ST Engineering continued to boost its share price, which did not look back thereafter.  As the share price crossed $3.60 with a reasonably high volume in November 2012, which was a historical high, I decided to add on my positions again to tap in the possible new high.  It did not take long for the share price to move higher to $3.88.  Initially I hope that it could move beyond $3.90.  However after 2 failed attempts to close above $3.88, I decided to sell and realise my 17% profits the third time it reaches $3.88. 
My thoughts at that time: The share price of ST Engineering has tried to break through $3.88 twice previously, but failed.  When it tested the same level the third time, I decided to just lock in and realise my profits, since my initial target has long been reached and surpassed.
Lessons learnt: Dips in share price of strong conglomerates are great opportunities of invesments, as when fundamentals remain intact for such big companies, it is just a matter of time when price reversal sets in to begin its upward trend.

Wingtai (1st Feb 11 to 6th Dec 12)

Wingtai was first purchased as it has a strong foothold in both the mid to high end residential segment, as well as the retail sector, including brands like G2000, Topman etc.  I see this as a good opportunity for me to invest in the residential sector, especially when Wingtai's share price has decreased substantially, with no substantial change in fundamentals.

However, things did not go too well after the purchase.  This is caused by the series of cooling measures implemented by the Singapore Government to prevent any possible bubbles from forming in the housing sector.  This creates a huge selling pressure on property counters as investors fear the possible negative effects these cooling measures will bring to property prices.

As observed, Wingtai's share price plunged by a massive 44% to $0.92 over the course of the year, before the reversal sets in.  It was a very depressing period for me, as holding on to this counter seems as if there was no light at the end of the tunnel at that time, as the price just keep on moving southwards.  But with a high NAV, I believe the company will not go bust, and even if it does, it has more than enough value to liquidate to compensate and hence protect my capital investments. 

Hence I took the plunge as an opportunity to purchase more shares to average down my holding.  However, as it declined further, my emotions set in and the fear that it will end up like First Ship Lease Trust deterred me from buying further when it went below $1.00 per share.  I am glad that during the course of this 2 year period, I made a couple of purchases and sales to average down my buying price, because soon, the reversal sets in. 

To help the recovery, Wingtai announced that Chairman is buying back 15% of the floating shares at $1.39 per share.  This announcement boosted the share price to above $1.30 levels and thus allowing me to erase all loses as I managed to breakeven at that price.  In addition, as I am holding 7 lots of Wingtai at that time, I decided to sell 15% of my shares back to the company to reduce my holdings, in case the price support fails and decline again.  After the sale, I ended up with odd lots of shares, which caused me to purchase back some shares to make it a complete lot.

After all the buying and selling comes to an end, I am rewarded with a consistent continual rise in Wingtai's share price as the market sees minimal impact in the cooling measures introduced by the Singapore Government, as up till this point, it only resulted in the stabilisation of property prices, instead of a price correction as feared previously.  This boosted market's confidence and at the second half of the year, the rally for property developer counters arrived with much anticipation. 

At a high of $1.77, it seems like the rally for Wingtai is coming to an end as it lacks the strength to push to higher prices.  The price booster soon came as SC Global, another high-end residential property developer announced the privatisation of the shares with an offer of $1.80, which is a 49% premium over the last closing price.  This news boosted the shares of Wingtai to breakup to $1.80 as well.  With this, I made the decision to sell all my holdings at $1.82.

My thoughts at that time: Looking at the rally, I was a little hesitant to sell as there may still be possible upside after the recent breakthrough.  However, with the issue of the US 'fiscal cliff' looming and remains unsolved, I concluded that the risk : reward ratio may have become too much to bear at this juncture.  Since the next announcement of any possible huge dividend payout (which could possibly act as another price catalyst) is at least 6 months away, I shall lock in my profits before the new year, and enjoy my December holidays.

Lessons learnt: For quality stocks, it is just a matter of time that the true value of the stock gets unlock.  Just as waiting for the right opportunity to buy requires patience, waiting for the true potential to be unlocked also requires much patience.

Monthly Review- November 2012

This is a month filled with volatility and action for me.  As previously posted, I had sold all my holdings in Rotary with a huge realized loss.  Instead of being depressed, I actually felt more relieved, as it seems to me that Rotary, like First Ship Lease Trust, had been a long term burden in my portfolio, and finally I have plucked up the courage to bite the bullet and realize all losses to admit that I have made the wrong decisions.

With the freed up remaining capital from the sale of Rotary, I am ready to look for better opportunity out there.  At that time, my focus laid on Noble.  Noble has recovered from its loss a year ago to churn a profit for the third quarter.  However, as it was below analysts expectations, it led to a slide in share price.  In my opinion, I saw this as an opportunity as Noble was not making a loss this time, thus its fundamentals have already improved from he previous year.  It was just beaten down as it missed expectations.  Hence I bought into this strong commodity trader, awaiting for it to reverse its course.

Unfortunately, at this point of time, a substantial shareholder of Noble decided to sell a huge chuck of his shares at a discount.  This caused the share price to plunge the following day, and it weigh down my portfolio.  Just as a ray of hope shines through the gloomy skies as the Chairman of Noble stepped into the market soon after to purchase shares, all was in vain as the outbreak of the "war of words" between competitor Olam and Muddy Waters created more doubts in commodity firms, which translates to further selling pressure.  At this point of time I can only hold on to the shares to await the release of next quarter's results, which could boost the shares once again, provided if its fundamentals remain intact.

In addition, I added my holdings in Far East HTrust and FJ Benjamin, both with the intention of averaging down the buying price after the recent drop in share price.  The drop in share price for FJ Benjamin was rather significant, due to the counter going Ex-Dividend.  However, since fundamentals did not change, the drop will not deter me from adding on to my holdings.  Both counters are involved in the hospitality and retail sector, which is one of the stronghold of Singapore's economy.  Although downward pressures in profitability remains, especially due to rising labour costs and miscellaneous expenses, I believe they will still have the capability to outperform.

Next month is the last month of 2012.  I hope to see the window dressing and the exuberance in the stock market that may help to propel my portfolio to new highs. 

My Current Portfolio:

Lessons learnt: Do not look back on loss-making investments.  Once sold with realized losses as decisions has been made, you should move on.

Rotary (26th Jan 10 to 6th Nov 12)

Rotary was once a growing Engineering, Procurement and Construction company in the oil and gas sector.  As a leader among the contractors, Rotary had a good reputation in the industry.  This is reflected in its ability to clinch the massive USD 745 Million worth of contracts in the SATORP project in the Middle East for the construction of refinery tank farms.  It is because of all these reasons, that I decided to invest in this company, hoping to see the realization of its potential in time to come.  

All was well, and Rotary continue to announce more contracts clinched through the months and its share price remained relatively stable till 2011 when its CFO resigns and things start to take a turn.  Share price starts to dip and falls to a new 1 year low.  However, being naive and greedy, I held on to the counter, waiting for a rebound to happen.  

Indeed a rebound occurred in early 2012, pushing Rotary's share price to to the high $0.70 per share levels.  But greed continues to blind me, in hope that I may be able to break-even, I continue to hold on to it, but in my dismay, all that comes is just the continuous tumbling down of the share price, which never turnaround again.  

Things worsen in September when Rotary released its first profit warning in recent years, stating that cost overrun in the SATORP project due to design flaw and the unforeseen increased in man-hours caused Rotary to suffer a huge 3rd quarter loss, and a projected full year net loss as well.  This sparked the panic sale of its shares, and trying to be as calm as I could, I told myself not to panic sell at this time, as it will mean I am selling low.

After some thoughts, it seems that Rotary's share price is drifting lower and lower.  The alert button in me was activated when its share price drifted below $0.40 per share.  With this, I decided that it is time for me to cut loss to prevent further damage to my portfolio and hence I sold all my holdings at $0.395 per share, which was a massive 58% capital loss.  If there is indeed a rebound after the sale, I can only accept the losses, as fundamentals have changed.  The current Rotary, in my opinion, is not as strong and reputable as it was prior the SATORP incident, mainly because financially, it has took a big hit as we see its cash flow plunged in the released 3rd quarter results.  

My thoughts at that time: I am quite hesitant to sell my holdings in this counter as it would mean a realization of a huge loss, right after the massive loss I realized in January this year from First Ship Lease Trust.  However, it is also the lessons learnt in First Ship Lease Trust that I should follow, and understand that "hoping" for a rebound usually just make things much worse, as these hopes are not supported by any fundamentals.  In the final quarter of 2012, Rotary is going to announce a full year net loss.  In addition to that, if the 4th quarter results also suffered a net loss, I believe there will be more downward pressure, and that is too much risk involved.  Hence I decided to cut.

Lessons learnt: The moment a company stops giving dividend, it is a clear signal to sell the shares of the company, regardless of the loss, as this move by the company signals a lot of pessimism in the near term future of the business.  If I sold my holdings during the release of the 2nd quarter results, my capital loss will definitely be below 50%.

Monthly Review- October 2012

This month marks the beginning of the release of results of the quarter from July to September 2012.  Many analysts and brokerages have downgraded the earnings expectations for the quarter, brought about by weak economic outlook in Europe, slowing demands in China as well as weak economic numbers in Singapore.  However, against all odds, my portfolio still grew by 11%, brought about by strong dividends and good performance by SingPost, but increase is capped by the decline in share price in Far East HTrust.

So far, only SingPost has announced its results for the quarter.  Results has been decent and within expectations, as revenue increased year-on-year, with pressure from the domestic mail section.  I am not too overly worried about this segment as SingPost has been actively building up its revenue from other areas and through acquisitions that has shown to help boost its profits.  Most importantly to me, the dividends has been maintained for at least the past 5 years.  The consistent payout is in line with the consistent income I am expecting.  As I am holding this for the long term for its dividend payout, and possibly reinvesting the dividends later for compounding effects, I am not overly worried about near term price fluctuation.

In addition, after its annual meeting, Wingtai has finally announced its yearly dividend payout of $0.0700 per share, as well as its quarterly results.  The quarterly results has been impressive, with profits churned in from recent sale of units, mostly from Foresque Residences.  However, possible further cooling measures by the Singapore government remains the top concern for property counters like Wingtai, which may cause dampening in demand of the mid to high end residences in the event of further curbs.

This month, I also saw the sudden decline in the share price of ST Engineering and Far East HTrust.  There has been no change in the fundamentals of the counters, but nonetheless, perhaps due to profit taking by retail investors after the recent rise, share price of ST Engineering dropped by more than 5% from its high of $3.60 to $3.40, while Far East HTrust dropped by almost 9% from its high of $1.08 to $0.985.  Seeing this as an opportunity to grab more solid counters, I added my holdings in ST Engineering and Far East HTrust at $3.48 and $1.025 respectively.

Furthermore, Rotary issued its profit warning last month, saying that it expects a net loss for the third quarter, as well as full year net loss for FY2012 due to losses in its SATORP project.  I will keep watch of this counter till the release of its results, to decide what is my next move for this counter.  It has been the biggest drag on my portfolio since the sale of First Ship Lease Trust in January this year.

My Current Portfolio:

Lessons learnt: Holding on to losers even when fundamentals have changed, in hope that a rebound may occur soon, is just a false hope pending doom.

Monthly Review- September 2012

This month has been a slightly positive month for the stock markets worldwide, largely attributed by the announcement of the unlimited bond buying programme by ECB in Europe to Eurozone countries that require it, as well as FED's newest QE3 in US, which promised to continually buy mortgage-backed securities till unemployment rate falls to acceptable levels.  This boosted the stock markets temporarily, but doubts began to spook the markets soon after on the effectiveness of these measures.  For the current month, in comparison with the previous, the total amount of unrealized profits increased by approximately 31% while the amount of realized profits increased by approximately 16% with the sale of my holdings in CapitaMall Trust. 

The biggest contributor to the rise is Wingtai, which has rebounded strongly since May's rangebound share price of between $1.145 to $1.355 till $1.710, an impressive 44%!  Wingtai has definitely been the main driver that boosted my portfolio from a net loss position to a net gain position.  With the continual sales of their remaining mid to high end residential properties, and the expected launch of a new project next year, I believe its prospects is still positive, barring any further cooling measures by the Singapore government.

In addition, for the month I have added positions in the new IPO counter Far East Hospitality Trust.  After failing to obtain any placement for its shares during IPO, I  went on to purchase its shares post IPO as I believe in the strong fundamentals in the tourism story in Singapore.  Furthermore, Far East has been a leader in the hospitality sector, thus I strongly believe its managers will actively manage the Trust with due diligence to improve its returns to all shareholders.  Indeed, within less than a month, the share price of Far East Hospitality Trust has rose by 6% above my purchase price.  I believe there will be more upside to come, and I am looking forward to its announcement of its first financial report post listing.

However, capping the gains in my portfolio is Rotary.  After announcing that it is expecting to post a full year loss in FY2012 due to its SATORP project in the Middle East, the share price plunged to its lowest since May 2009.  Since the sale of the biggest dragger First Ship Lease Trust in January this year, Rotary remains as the next biggest dragger in my portfolio since.  Although the fundamentals have changed, I will continue to wait for a better opportunity to divest.

The upcoming month is filled with uncertainty, as October has always regarded as a negative month for equities.  Moreover, companies will start reporting their third quarter financial results next month.  With the PMI numbers below expectations in many countries, the third quarter results may drag the equities market.

My Current Portfolio:

Lessons learnt: Keep to my forte, invest in high dividend paying counters and strong blue chip counters.  Growth counters do not seem to show any growth potential after I purchase them.

CapitaMall Trust (21st Mar 2011 to 7th Sep 2012)

CapitaMall Trust was bought with the intention to tap the growth in the retail sector, as well as to gain a steady stream of income from its steady dividends.  Being the first REIT to be listed on SGX, and the only Singapore-based REIT in the STI component stocks, I believe it is a safe and strong bet to own.  Hence after it dropped from a previous high of $2.16 in October 2010 to $1.75 in March 2011, I decided to buy 3 lots to keep for dividends.

Since the purchase, the share price have been rather volatile due to the uncertain macroeconomic conditions.  As observed, CapitaMall Trust showed its resilience throughout this period of uncertainty as the share price just fluctuate between a range of $1.61 to $2.07, while other shares experienced a much higher volatility.

The only regret I had is that I did not add on my positions in this strong counter when the share price dropped below my initial purchase price.  Even when opportunities presented themselves twice during this period, I did not act.

Overall, my total gains in this counter is a decent 22%, with total dividends collected accounting for 8%. 

In my opinion, with the current low interest environment and the on-going asset enhancement initiatives by CapitaMall Trust on a couple of its malls, I believe there is room for further appreciation in its share price.  However, as the STI moved above the 3,000 level and CapitaMall Trust retest the high of $2.00 level after a rather long period of volatility, thus I decided to sell my holdings to realize my profits first.

My thoughts at that time: Since I have already set a target price of $2.00, once it hit my target price, I shall be discipline to sell it and realize my gains.

Lessons learnt: Discipline is always great, as it increases my satisfaction with my gains if the share price drops after the sale.  On the other hand, it also minimizes regret if the share price rose further after the sale, as I am being discipline and sticking to my plan.

Monthly Review- August 2012

After last month's intense selling of the strongholds in my portfolio to realize most of my profits, this month has been rather stagnant.  The market has been fluctuating in a tight range for the month due to lack of any catalyst to drive the market in either directions.  However, my portfolio still bucked the trend as the unrealized profits rose by 85%, while realized profits rose by 16% with the sale of Breadtalk.

This month, FJ Benjamin announced their financial results for the quarter.  Although both revenue and profits rose for the quarter, pressure from costs and expenses remain.  This cause the dividends for the year to fall to $0.010 per share.  This may seem to be a lack of confidence in the times ahead, but in my opinion, this is positive for the company as they are keeping more cash for future growth in times of uncertainty.

In addition, seeing the defensive nature of Singpost, I decided to increase my positions in Singpost.  This is also partly due to my decision to increase the dividend counters in my portfolio after the sale of my strongholds last month.  Despite the high share price, I believe there is further upside for the counter.  In technical analysis, if the share price can break out of $1,06, the next resistence will be at $1.10, after which will be the resistance at $1.14.  However, after the uptrend these few weeks, the technicals may be favouring a slight correction.  Nonetheless, I have confidence in this counter and as I will be holding on to this counter for the long term, I will not be too overly worried about the near term movement in share price.

Next month, there are many indicators to look at.  Will European Central Bank announce further bond buying to stabilize the market?  Will FED announce QE3 to spur the financial markets in hope to improve employment rates in US?  Will China lower bank's reserve ratio to boost lending and prevent any hard landing? I believe next month we will have a clearer picture of these and hopefully the market will be cheered.

My Current Portfolio:

Lessons learnt: I need to relearn buying and selling strategies, as currently I am not following any plan to set my target price.

Breadtalk (15th May 2012 to 7th Aug 2012)

Breadtalk is an uprising powerhouse in the food and beverage sector.  With its firm and strong fundamentals, and its growing expansion in China, it is also regarded as a defensive play with good dividends.  I have witness the fluctuations in share price for the past year or so, as it rose from around $0.50 to more than $0.60, before falling to around $0.55 range after the bonus share issue. 

 

 

After studying the pattern in the range-bound repeating rise and fall, I decided to buy into the counter with the intention of short term play, as it was observed in the past year that the share price would fluctuate between $0.46 to $0.55 in the event of any sell-down. 

Opportunity presented itself soon after it went XD in May, as the share price suddenly plunge by 10% from $0.54 for no apprent reason within a short period of 2 days.  Hence I took the chance to buy 10 lots at $0.49 per share, with an intended target price of $0.55.

After the purchase, the share price dipped even further to $0.46 before a gradual rebound occurring 2 weeks to gradually move north. During this three month period of holding the counter, I was contemplating whether I should hold on to it or just sell below my target price for a minimal profit.  However, as I was not in need of cash, I decided I should stay discipline and stick to the initial plan.

My efforts soon paid off 3 months later as it rose above my expectations to $0.56 per share.  I sold off all my holdings for a decent profit.

My thoughts at that time:  As I contemplate whether to sell or not, I remembered my biggest weakness in investing is my ill-disciplined nature.  To remind myself to stick to my plan, I made the final decision to sell.

Lessons learnt:  Sticking to the plan is the best plan in my opinion, as if prices rose further, I can console myself that I had been discipline to stick to the plan, while on the other hand if prices drop, I will not have any regrets for missing the opportunity to sell at a higher price.

Monthly Review- July 2012

This month has been the busiest month since my investments started in late 2009.  In total, I made 5 transactions this month, the highest number within a particular month.  With the sale of all my holdings in Mapletree Logistics Trust, Soup Restaurant and Parkwaylife Reit, I also made the purchase of 250 shares of Wingtai to round up my odd lots that resulted from the 15% voluntary sale of units previously.

Apart from my current holdings, July is also the month to look out for one of the largest IPO in Singapore this year, the listing of IHH Holdings.  There are many different reviews and perspective about this counter.  Some analysts say that IHH Holdings is a great counter to buy as it is the top pick in the healthcare sector listed in Singapore and its prospects is definitely bright.  On the other hand, other analysts say that IHH Holdings is too highly priced, and its high PE and PB ratio are not justifiable.  In addition, given the uncertain ecomonic conditions now, IHH Holdings is a better buy only if the share price dips after listing. 

In my opinion, after looking at the portfolio of IHH Holdings, I decided to purchase this IPO, as its portfolio is great as the two big brands, Pantai Hospitals in Malaysia and Parkway Hospitals in Singapore are well known names in the healthcare sector of the region.  However I also noted that in such uncertain economic conditions, volatility is here to stay.  Hence I made the decision to purchase the IPO, and sell it on the first day of trade. 

I was lucky to be able to get 4 lots of IHH Holdings through IPO.  On the first day of trade, with the rise in share price of about 9%, I sold all my holdings and made a quick decent profit.  Although the share price continue to rise for the next few days, I told myself to be contented with the profits I made within such a short period of time, because this is the decidion I made at that time due to the conditions I faced. 

Besides the high number of activities, there was also some passive income made, as Singpost announced its consistent dividends of $0.0250 per share.  This is in addition to the rise in Singpost's share price over the months to a recent high of $1.06 a share. 

Although the high number of transactions churned in decent profits, sadly, it was just sufficient to cover all the losses made in First Ship Lease Trust, which was realized at the beginning of the year.  This further made me understand the mistakes I made in trading and investing all these while.  The lack of discipline due to greed, coupled with the inability to adhere closely to stop losses magnifies the absolute losses to a large extent.  As seen, it took profits in three strong counters to cover up the loss made in one silly counter.  I need to be more discipline and vigilant in my future trades.

My Current Portfolio:

Lessons learnt:  Dividend play remains to be my strength while growth counters do not show much potential for me.  I will need to concentrate more on my winners and shed my losers before they overturned my entire portfolio.  Effort and homework is needed to single out the dead losers from the losers who have the potential to soar to great heights in the near future.

IHH Holdings (19th Jul 12 to 25th Jul 12)

IHH Holdings was one of my top picks of IPO this year as it is a defensive counter.  Being one of the leaders in the healthcare industry in the region, with hospitals in Singapore, Malaysia, India and Turkey, it is definitely one of the jewels out of the IPOs in recent months.

My confidence in IHH Holdings is further boosted by the strong names in the list of cornerstone investors, and the high percentage of oversubscription rates by the top analysts and brokers of the cornerstone investors indicated their strong interests and confidence as well.

Hence I subscribed to 20 lots of IHH Holdings, and I was fortunate to be alloted 4 lots of this counter at the indicative price of $1.113 per share.  I had intended to buy a couple of lots of IHH Holdings as a short term play.  This is mainly because IHH Holdings did not specify that they will pay dividends as well as the many negative review by a few analysts on the high PE ratio.  In addition, with the volatility of the markets at this point of time, I do not know how the longer trend will be for this counter, especially when all the hype about it dies away like most IPO. 

On the first day of trade, I decided to sell all my holdings.  As I do not know how the events will turn out, I sold 2 lots at $1.220 per share initially and held on to the remaining 2 lots.  I did this because if the share price move higher later, I can sell the remaining lots at higher price.  On the other hand if the share price dips later, I have already secured part of my holdings at $1.220, which is already a 9.6% profit over the IPO indicative price.

However, as time passes, it seems to me that the share price continues to dip due to high selling pressure from short term players like me.  In a panicky mode, I sold the remaining 2 lots at $1.205, resulting in an average selling price of $1.2125 per share, which is still an approximate 8% profit.  Although later in the day the share price reached a high of $1.240 before closing at $1.225, I shall learn to be contented with my decent profits in such a short term play, especially in such volatile times.

My thoughts at that time:  I get very panicky when the share price fluctuate so quickly due to the high buying and selling volume.  This caused me to chase after the dipping share price to sell as the price was going below $1.20.  However, soon after the selling pressure subsides, the real investors moved in to push up the share price, and that made me want to slap myself for not sticking to my initial target price of $1.225 per share for a 10% profit.

Lessons learnt:  I really need to be discipline and stick to my initial plans.

Parkwaylife Reit (3rd Dec 09 to 17th Jul 12)

Parkwaylife Reit has been a stable and consistent Reit, and it is definitely defensive in nature as it is in the healthcare sector, and its rental is pegged to the inflation rate of Singapore.

Since its purchase in December 2009, the share price has been steadily on the rise.  This made me purchase more lots in September 2010 to increase my holdings in this strong counter when a slight correction in price occurred then.  Everything looks bright until the earthquake, tsunami and nuclear disaster that occurred in Japan in March 2011.  As quite a substantial number of nursing homes under the portfolio of Parkwaylife Reit is in Japan, with some of them located within the affected region, the share price took a hit.

Similar to Mapletree Logistics Trust, being a panicky investor, I thought the fundamentals have changed, thus made a decision to sell part of my holdings and reposition my portfolio.  However, in unexpected turn of events, within a short span of two weeks after the triple disaster in Japan, its share price suddenly turn and soared to levels before the disaster.

That caught me off guard and I was not able to buy more shares at a lower price than what I have sold part of my holdings for.  Hence I just kept the remaining lots that I hold for consistent dividend payouts and further possible capital appreciation.

Recently all the S-Reits have been outperforming all other sectors.  This is due to the low interest rate environment currently, making the yield of S-Reits, at an average of 5% to 7%, very attractive.  Hence with the sale of Mapletree Logistics Trust at a 3 year high of $1.00, I am looking out for Parkwaylife Reit as well.  Soon enough, whenthe share price of Parkwaylife Reit reaches a 3 year high of $2.02, I sold off my holdings, making a weighted average profit of approximately 45%.

My thoughts at that time:  I am very hesitant to sell it, as a sale of both Mapletree Logistics Trust and Parkwaylife Reit will mean that my quarterly dividend income will come to a standstill.  However, as STI reaches 3,000 points in this turbulent times, perhaps it is a good time for me to reposition my portfolio and realize some profits.

Lessons learnt:  Buy and hold strategy has its pros and cons.  For strong counters, buy and hold strategy works in my favour, as the dips are usually temporary and soon it will recover from the trough.  In fact, the dips present great buying opportunities for such strong counters.  This is clearly seen in both my strongholds, Mapletree Logistics Trust and Parkwaylife Reit.  After holding on to them for 3 years, the returns has been great.  On the other hand, for counters that are weak in fundamentals, especially cyclical counters, buy and hold strategy is a definite no-no.  First Ship Lease Trust has been the best lesson learnt.  On the cards, there is still Rotary.

Soup Restaurant (8th Jan 10 to 9th July 12)

Soup Restaurant is the first F&B counter I invest in, as well as the first ultra penny stock that I traded.  It is due to the low share price and the huge effect of a 0.5 cent movement of the counter on my profits and losses, I dare not venture too much on this counter.  Hence after some thought, I decided to buy 15 lots of this counter, at a price of $0.10 per share.

As this counter is very thinly traded, the share price has been rather stagnant.  However, due to the rather high dividend yield from this counter, it is worthwhile to keep it for some time.  This is the case until July 2010 when the interests in this counter suddenly rose and its share price rose with it.  I believe that was the time where many traders realize the potential of this F&B counter that caused them to flock to it and hence pushing up the price.

All these interests pushed the share price up to a new high of $0.160 at around March 2011, which was an impressive 60% above my purchase price.  However, due to greed, I was hesistant to sell it and hence missed the opportunity to realize the hefty gains.

In late 2011, when the Singapore budget was announced, the share price of Soup Restaurant begins its downtrend, as most of their employees were foreigners.  The Singapore government has announced an increase in the levy for hiring foreign workers, causing an increase to the operating expenses and thus result in a downward pressure on its profits.  

True enough, ever since then, the share price of Soup Restaurant hovered around the $0.120 and $0.135 band.  After a few quarters of decline in operating profits the company announced a cut in dividend payout.  The situation was made worse by a legal tussel between the main shareholders of Y.E.S. group and Soup Restaurant.  Although the matter was soon brought to rest, I believe with the cut in dividends and the heightened difficulties to increase their operating profits, it is time to for me to realize my gains in this counter to look for better investment opportunities.

My thoughts at that time: Due to greed, I have already missed out the opportunity to sell at a high profits.  If I don't sell now, the dividends I will continue to get may not be more than the possible gains I may make if I reinvest this sum in other stronger bluechip counters.  Moreover with STI climbing above 3,000, this may be a signal for me to sell and reposition my portfolio.

Lessons learnt:  As always mentioned, in investing, always set a buy and sell target for every counter, and stick to it.  This will prevent any regrets later.

Mapletree Logistics Trust (13th Nov 09 to 5th July 12)

Mapletree Logistic Trust has been my favourite counter all these years.  It has been constantly providing me with decent dividends and steady capital appreciation.  I was fortunate to have been able to purchase 5 lots of it at $0.71 per share.  Since then, the share price has been steadily appreciating.  Even its dividend payout has also been steadily improving, providing great returns for all shareholders due to the continuous efforts of the management of the Trust to find value and enhance the portfolio of the assets in the Trust.

Hence, when the management announced preferential offerings to existing shareholders to raise funds, I made no hesitation to buy all that I could, and even more to make up a complete lot at $0.815 per share.

However, things took a turn in March 2011 when triple whammy hit Japan, with the earthquake, tsunami and nuclear crisis.  As a substantial number of Mapletree Logistics Trust's assets were in Japan, though only a few were in the affected areas, it resulted in a momentary panic sale.  As a ill-disciplined investor, I jumped into the bandwagon as well to sell half of my holdings.  The share price took a dip further, and my fears overcome my logical thinking, so instead of adding more of this counters when the price is low, I stayed away from it, fearing further decline. 

Within a span of 2 weeks, the share price took a roundabout and shoot up again.  Having missed the bottom, I could only get more of it at a price near my previous selling price.  This time, I made the decision to buy more that what I sold previously, increasing my total holdings to 9 lots.  I never regret this decision, in fact, I wondered why I did not buy more, as it has been proven time and time again the defensive nature of this counter and efforts of the management to add value to this Trust made it a high yielding counter.

This year, the share price started to hovered above $0.90 for a long period of time.  Having holding on to this counter for more than 2.5 years, I decided to be disciplined and follow my initial plan to sell my holdings if the fundamentals have changed or if it hits a new high of $1.00 per share.  Fundamentals were still intact.  In fact, I do not see any pressing issue for me to sell.  However, as I have always told myself to stick to my plan, and to move on, I shall learn with this counter.  Therefore I made up my mind to sell all my holdings in this counter when it hits $1.00 per share, and it did.

Thoughts at that time:  As Mapletree Logistics Trust has become one of my favourite counters, I am very reluctant to sell it, as the thought of losing the consistent dividend yield after the sale makes me lose a substantial part of my dividend income.  Nonetheless, with a total capital appreciation of approximately 27% and an accumulated dividend yield of approximately 15%, I am very satisfied with the performance of this counter.

Lessons learnt:  As long as I stick to my plan, I won't feel much sadness even if the share price continue its climb upwards, and no regrets if the share price suddenly took a turn and plunge, because I am sticking to my plan. 

Monthly Review- June 2012

This month marks the end of the first half of the year.  Due to the surprise in the outcome of the European meetings where loans from IMF is not longer given to the government of the European countries before being issue to the troubled banks, as this results in higher debt burden for the government.  Instead, loans will be given directly to the banks.  This cheered the markets and in the last few trading days in June, bringing the Straits Times Index to above 2,900 levels.

This brings good news to my portfolio as the optimism pushed the value of my portfolio up by approximately 37%.  Top performers that helped to increase the amount of unrealized profits were ST Engineering, which rose by 5.0%, CapitaMall Trust, which rose by 5.2%, Parkwaylife Reit, which rose by 3.9% and SingPost, which rose by 3.4%.  Another counter that was worth mentioning is SMRT, which rose by 4.6% to minimize the losses that I suffered for this counter. 

As STI heads towards the 3,000 level, I will have to make plans to reposition my portfolio.  I will sell my holdings in Mapletree Logistic Trust if it hits SGD 1.00 per share, as that is my target price and $1.00 is the 52-week high for the counter.  I believe that realizing my profits for this counter when this share price is reached will be a positive move after holding it for more than 2 years.  If it does not reach SGD 1.00 per share, then I will continue to hold on to it, as Mapletree Logistic Trust has been a great dividend stock and will be a good stock to hold on for future dividends.

In addition, when STI hits 3,000 or when the share price of CapitaMalls Trust hits SGD 2.00 per share, whichever earlier, I will also sell of my holdings in CapitaMalls Trust.  This counter has been a good defensive play, as it generates decent dividends despite its volatility.  However, I believe that it is time for me to realize some profits to prepare myself for the upcoming mega IPO of Integrated Healthcare Holdings (IHH), which comprises of mega hospitals in Malaysia, Singapore, Turkey and India.  Due to the limited number of healthcare counters, I believe that this will do well as healthcare stocks are usually defensive and valueadd. 

I believe that these divesting moves should be a positive one, and when opportunity arises, I will continue to look out for other dividend generating counters, as selling off these two counters will mean a huge decrease in my dividend income. 

My Current Portfolio:

Lesson learnt: Although I have been telling myself to hold on to winners till the target price has been reached, while sell off the losers when the cut loss point has been breached, I still lacked the discipline to do that, causing myself to earn decent profits, but suffer massive losses, which tend to erase accumulated profits.  I need to learn to stick to the plan and always remind myself.

Monthly Review- May 2012

This month, worries in the Eurozone amplifies, with problems in Greece and Spain worsening.  The exit of Greece from Euro seems inevitable, especially with the inability of its Parliament to form the new government.  In addition, the bail out required by the fourth largest bank in Spain causes the yields of Spanish bonds to go above the worrying 6% levels.  All these events caused the STI to fall by more than 9% for the month of May.

In line with all the gloominess, my portfolio also shrank by a larger 22%, dragged down by Rotary, which alone fell by 22%.

However, bucking the trend was Wingtai Holdings, which rose by 8% following the news that the Chairman is buying back 15% of the shares from retail investors at a price of $1.39 per share.  Considering the volatile situation currently, this will be a good opportunity to liquidate some of my holdings without suffering any losses, as my average holding price per share for Wingtai is currently at $1.373, excluding commissions paid and dividends collected.

In addition, this month I have added Breadtalk to my portfolio, after it plunged by more than 10% after XD without any known reasons.  Since its fundamentals are still intact, and its share price has been hovering between a range of $0.45 to $0.55, it seems like a good time to buy some for a small gain.  However, after the purchase, the share price continued its decline, but still well supported at $0.46.  For this counter, I shall be discipline and stick to my plan to sell it once it rises back to the $0.54 levels.

Despite the falls, there are also good news from some of my counters.  Parkwaylife Reit has announced a dividend of $0.0256 per share and Singpost also maintained its dividend payout of $0.0250 per share.  This brought the total dividends collected for the first half of 2012 to approximately $1,200.

Currently, turmoil in the market still persist.  However if the contarian view is being acted upon, it seems like a good time to enter the market now.  Judging from the situation, volatility is here to stay.  Whether do I purchase more or not depends very much on my ability to stomach the volatility.  However, if real value shows up, I may plunge in, with the risk that the money is needed three years down the road for my home loan partial repayment.

My Current Portfolio:

Lessons learnt: Patience and discipline is the key to ride out all volatility.  In addition, always check if the fundamentals are intact.  If not, you will just be holding on to a losing counter, and any wait for a rebound is just a false hope.

Monthly Review- April 2012

This month has been a draggy month.  Problems in the Eurozone begins to resurface, with Spain in focus this time.  This has once again caused jitters in the market, resulting in the tight range movement of the STI, fluctuating above and below the 3,000 mark.

This month, I made the decision to include SMRT into my portfolio, after it has dropped till $1.70, to boost my dividend portfolio.  At $1.70, it translates to a historical 5.0% dividend yield.  However, due to the plunge in quarterly profits, SMRT decides to cut its final dividend to 5.7 cents, which is lower than the previous 6.75 cents.  This gives a dividend yield of approximately 4.2%.  I believe in the long term, 4.2% dividend yield is still rather attractive, however, all waits to be seen how SMRT will perform in the upcoming months, especially with regards to the inquisition carried out at this moment.  I still believe that being the main monopoly of the public transport system in Singapore, the demand will still be there, which will be the primary support to their revenue.

This month is also the earnings report season for the first quarter of 2012.  For this quarter, the results were mixed, with many companies reducing their dividend payout to retain more cash holdings in view of moew uncertainty ahead.  Soup Restaurant has reduced its dividend payout to $0.00175 per share.  On the other hand, CapitaMall Trust has reported a dividend payout of $0.0230 per share while Mapletree Logistic Trust reported a dividend payout of $0.0170 per share. 

After this month, we enter the month of May.  Will the saying "Sell in May and Go Away" pan out this time round?  No one is sure about what is about to happen, but uncertainties are looming, as results of elections in France and Greece are still an unknown.  I believe volatility is here to stay, and if opportunity arises, I intend to increase my holdings in my dividend counters to increase my dividend returns during times of volatility and uncertainty.

My Current Portfolio:

Lessons learnt: Learn to add on winners, and reduce losers.  I will need to be very discipline to learn this, as eliminating losers is the hardest thing to stick to.

Monthly Review- March 2012

This month marks the end of the first quarter of 2012, and the Straits Time Index is back to above 3,000 levels. This is good news to traders and investors like me, as my portfolio's unrealized profits increased by approximately 11%.

Overall nothing much has changed to my portfolio within the month. The only thing that "shook" my portfolio was the law suit between the 2 groups of directors of the management of Soup Restaurant. This law suit caused the share price of Soup Restaurant to be very volatileduring this period of time. I hope this law suit will be settled soon and not result in any material impact on the fundamentals of the company.

At the end of the first quarter, another thing that worries me was the high sales volume of private property. From the launches and the high sale volume, the risk of implementation of new cooling measures by the government is increasing. I am worried that this will have more negative impact on the property counters, especially the property firms that concentrate mostly in the local high end property market, like Wingtai.

I believe the only strong positive boost was Singpost, whose share price rose to above $1.00 for the first time since its decline last year. This helped to boost the outlook of my portfolio and I hope that Singpost can stabilize above $1.00, followed by a gradual trend upwards again.

My Current Portfolio:

Lessons learnt: I need to understand more on the fundamentals of the company that I am investing in, so that I can take note when did the fundamentals change.

Monthly Review- February 2012

This month marks the turnaround in my portfolio. After the realized loss last month with the sale of First Ship Lease Trust, the remaining counters in my portfolio continued their small rally. With the boost from Dow Jones Industrial Average crossing the psychological barrier of 13,000 since 2008, investors confidence returned to equities and placed the Euro crisis on the sidelines.

This month, Rotary, Soup Restaurant, Wingtai, ST Engineering, FJ Benjamin and UOB Kayhian released their results for the quarter ending December 2011. Amongst these counters, Rotary, Soup Restaurant, Wingtai and UOB Kayhian reported a decline in profits compared to the same quarter year-on-year, due to lower contracts, higher operating costs because of foreign worker levies, property cooling measures that dampened sales and lower trading volume respectively. On the bright note, most of them still pay dividends for the year. Rotary has announced a dividend of $0.0200 per share, Soup Restaurant announced a dividend of $0.00175 and UOB Kayhian announced a dividend of $0.0600 per share, all lower than previous payouts year-on-year, and mostly awaiting confirmation of payout during upcoming annual general meeting.

On the flip side, FJ Benjamin and ST Engineering announced higher profits for the quarter year-on-year. ST Engineering also announced a dividend of $0.1250 per share, an increase compared to last year's declared dividends. In addition, the share price of ST Engineering has also rose back to levels when I first bought it approximately 1 year ago on the back of encouraging earnings report.

Overall, my portfolio has improved tremendously, with total unrealized profits increased by an approximate 72% compared to the previous month. This is one of the best performing months seen in the past few months. However, it seems like consolidation is coming as the rally seems to be losing steam with Dow Jones Industrial Index failing to stay above 13,000 and Straits Time Index failing to stay above 3,000. Hence, I hope the performance in the upcoming month will be flat rather than a drop in unrealized profits.

My Current Portfolio:

Lessons learnt: When good opportunity arises for solid counters, just buy. Waiting will cause the opportunity to pass by and lost. If I really cannot convince myself to buy, then I should turn to dividend counters for long term payouts instead of focusing on capital appreciation.

Monthly Review- January 2012

With the start of a new year, the outlook remains uncertain for the macroeconomy. However, for my portfolio, things seem to be in a better shape. This is not because the market has rallied to a large extend that all my losses turned into profits, but because I have wiped out the biggest toxic asset in my portfolio by selling it and realizing all my losses for it.
All along, due to my unwillingness to accept losses, I hold on to First Ship Lease Trust, hoping that one day the tide will turn, its share price will improve, and even if it didn't, the dividends collected from it will cover my losses. However, I have come to terms with myself that all along, I am just consoling myself that things will improve, while the fact remains that it was in a bad shape. All of these optimism ended when they declared a 90% decline in dividend payout, that made me realize it is time to let go and realize my losses. Hence, my portfolio took a big hit in terms of realized losses, and I started the year with a big dent in my portfolio.
However, not all was doom and gloom. Mapletree Logistic Trust has another great quarter, announcing a dividend of $0.01700 per share. In addition, Parkwaylife Reit, CapitaMall Trust and Singpost has also announced quarterly dividends of $0.02470 per share, $0.01280 per share and $0.01250 per share respectively. Furthermore, due to the good responses in a few property sales launched recently, property counters made a comeback, with Wingtai recovering almost 25% from the bottom. This gave a great boost to my portfolio.
It seems to me that only my dividend shares are doing well, churning in substantial dividends for me annually, while my growth stocks are mostly under water. I believe that with these, I need to reevaluate my investing methodologies, and be overweight in dividend counters and keep less of the growth counters.
With my decision to realize my losses for First Ship Lease Trust, my entire portfolio made a turnaround. For the new year, although my realized profits were totally wiped out and became a net realized loss, my total paper losses for my portfolio were greatly minimized. Including the total dividends collected, my portfolio has improved its total profits to date. I believe that in the near future, my losses will be recouped soon, provided that the market continue its drive forward. However, with the Eurozone crisis still a major concern at this point of time, I should continue to stay vigilant in my investments.

My Current Portfolio:

Lessons learnt: Do not be attracted and fall in love with stocks that gives high dividends (above 10% per annum), especially penny stocks. When they offer such high dividends, it is usually accompanied with high risks.

First Ship Lease Trust (30th Apr 10 to 20th Jan 12)

This counter has been plagued with bad news since the purchase of it in April 2010. Soon after the purchase, the share price plunged tremendously due to the default of two vessels. However, due to my unwillingness to stop loss and the thought that the high dividends will in time cover my losses, I decided to average down my buy price by buying more lots at the lower price.

Over time, I have seen major fluctuations in the share price of First Ship Lease Trust. Although I was presented with many opportunities to sell along the way during the temporary rebounds, I hesistated due to greed and keep on telling myself that it will rise back to my buy price, or even higher. Even if there are no rebounds on its share price, with its high dividend payout, with time, the losses can be broke even.
However, all these thoughts come to an end when First Ship Lease Trust announced that they will reduce their dividend payment by a hefty 90% from USD 0.0095 per share to USD 0.0010 per share! Although the management explained that they need to retain higher cash reserves to better position themselves in the uncertain economic conditions ahead, the drastic drop in dividend payment caused me to lose all faith in this counter. I believe now is the time to handle to massive losses and move on.
With the final average purchase price that I had, the sale of all my holdings translate to a loss of 60% of my capital invested in this counter. However, with the dividends collected so far, my losses on this counter is reduced to approximately 46%. Nonetheless, this is still a huge loss to my portfolio, and the losses in this single counter has erased all my previous realized gains from other holdings. No matter what, I can only blame myself for not cutting losses when prices were much higher.
My thoughts at that time: I was in a panicky mode when I see the drastic plunge in share price. I did hold back my decision to sell, but I too realized that for the past 1 year plus, I have been hoping for a rebound that never came. I believe its time to let it go and realize any losses, get back any capital that I could, and move on.
Lessons learnt: Being the first massive loss in the new year, it made me rethink my investing strategy. I suppose what I have been doing all these while does not serve me well, when I keep on trying to average down the losers instead of buying into the winners. It has been proven that if I keep on doing this, no matter how many winners I have, one loser is enough to wipe out my entire profits.