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.