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.

Monthly Review- December 2011

As 2011 comes to a close, its time for all investors to take a slight breather from the underperforming market this year. For the entire year, news of the European debt crisis and the poor US economic conditions took turns to depress the stock markets, causing most markets to slump compared to the end of 2010.
Although the problems mostly came from the west, it is the stock markets of the East that took the hardest hit. The Nikkei, Shanghai Composite and Hang Seng Index all fell by around 20%, and within the South East Asia region, Singapore STI was the worst performer, with a 17% decline compared to the start of the year.
In line with the macroeconomic conditions, my portfolio has also been hit and resulted in net losses for the year. On a total weighted average, my portfolio was down approximately 15% for the whole year. The main draggers are Rotary, First Ship Lease Trust and Wingtai, which are largely affected by cyclical downs in oil and gas industry, shipping industry and the cooling measures in the Singapore property market respectively. Top performers in the portfolio are largely the same as last year's, namely Mapletree Logistics Trust, Parkwaylife Reit, Soup Restaurant and UOB Kayhian.
This month, I have added Singpost in my portfolio. Having seen the counter drop from a 52-week high of $1.21 to S0.96 which reflects an attractive dividend yield of 6.5%, I snapped up this counter to boost my portfolio's annual divident payout. For year 2011, the annual dividend returns is 4.1%, which is much higher than any bank's interest rate. Although this percentage is still below the high inflation experienced this year, I believe this sustainable and consistent dividend payout is still attractive.
2011 has ended on a rather bad note. Fears of Eurozone crisis still lingers into 2012. No one knows how the financial condition of 2012 will turn out to be, as of now, I can only learn to be more prudent and nimble with my investment.

My Current Portfolio:

Performance for the Year 2011:

Lessons learnt: Investing strategy may have to be changed, as the market conditions now are deviating from the fundamentals of the individual counters. It seems like investing from a technical perspective will be a better approach for the year ahead.

Monthly Review- November 2011

The downtrend continues this month after the brief relief last month, with more issues in the Eurozone brewing. While many members of the Eurozone had their sovereign credit downgrades this month, what worries investors most is that the powerhouses of Eurozone have become the ones facing difficulties now. France is having a pending downgrade in the outlook of its sovereign debt by Standard and Poor's rating agency, while Germany's sale of its sovereign bond is facing lacklustre results.
All these events caused the STI to sink back to levels below 2700 before hovering around the range. The jitters in the market caused many investors to remain at the sidelines, and it also caused my portfolio's unrealised profits to slide back into the red. However, I decided to take the contrarian view to try to average down my holdings. From a technical perspective, both ST Engineering and FJ Benjamin seems to be ready for a technical rebound as the RSI and MACD are in the oversold region. I placed a buy bid for both, and in the end I got ST Engineering but not FJ Benjamin. I did not increase my bid price for FJ Benjamin in order to get my lots successfully, because I have learnt not to chase after the share price and I need to be discipline in investment.
The purchase of ST Engineering is the only change I made for my portfolio this month. As the end of the year approaches, it can almost be certain that this year has been a bad year for my portfolio. Due to the many 'wait and see' approaches and 'not willing to sell at a small loss' attitudes, it caused me to accumulate a rather massive loss for my portfolio for the year. However, as I am not in need of the cash, I can hold on to my investments till the tide turn. It may take a couple of years, but I believe what goes down will eventually come up some day, as long as the fundamentals remain intact. The bright spot for me, I believe, is that the bulk of my portfolio generates a good and consistent dividend yield of approximately 6% for the year, which helped me counter inflation reasonably well.
As the year draws to a close, I can only hope that the final month of the year will have some pleasing news that can ease the tension in the markets to minimize my losses in my portfolio.

My Current Portfolio:

Lessons learnt: The "buy-and-hold" strategy seems less effective nowadays compared to before, as markets become very volatile. Investors and traders are more aggressive and nimble with their trades now to ensure profitability or keeping losses in check. Seems like I need to learn both techniques to improve myself in such volatile conditions.

Monthly Review- October 2011

This month is the month of great reversal. Within a month, the STI was pushed up from a low of 2500 to above 2900 levels. This is mainly attributed to the good news coming from Europe, as they have agreed on plans that would help to bailout troubled Greece. However, amidst the exuberance, risks still linger. Italy is the next big nation in the spotlight, and looming crisis seems to be lurking especially when its sovereign bond yields rose to above 6.0%.
Although volatility is here to stay, and the economic conditions don't seem too good for the next 12 months, the earnings report for the third quarter still boosted market confidence to a certain extend. CapitaMall Trust has announced a dividend of $0.02420 per share. This is a slight increase quarter-on-quarter, proving that the retail sector in Singapore still has a positive outlook amidst the gloom. I believe with the opening of JCube in the near future and with the transformation of Jurong East, their retail malls will continue to enjoy good occupancy rates, further boosting its dividend yield.
In addition, Mapletree Logistic Trust has also announced a dividend of $0.01690 per share. Mapletree Logistic Trust has always been my profitable holding. With a good management team, the trust has been actively boosting their yield. All these quarters that I am holding on to this counter, it has been generating great returns with improving dividends. However, the share price seemed to be pushed down recently and fluctuating around the $0.83 to $0.85 boundary. Hopefully the breakthrough will come soon to stabilise above $0.90 to reflect its true potential.
Furthermore, First Ship Lease Trust has also announced its dividend payout of USD 0.0095 per share. With the proposed exchange rate of US $1: $1.3003, it equates to $0.01235 per share. This is its first full quarter payout since the private placement. The management has maintained the dividend payout, which boosted the confidence of investor to push the share price back to above $0.30 levels as there were no dilutive effects. I will continue to hold on to this counter for its dividend payment as a form of passive income.
Overall for this month, my portfolio has returned to profitability with the consideration of dividend payout. Excluding total dividends, my portfolio is still in the red. The remaining months do not seem very positive. I can only continue to hold on and wait for better investing opportunities.

My Current Portfolio:

Lessons learnt: Counters with good dividend returns will proof their worth during times of volatility like these. The consistent dividend payouts continue to provide a continual stream of passive income for me even in times of tumbling share prices.

Monthly Review- September 2011

This month is still a month of volatility. The problem in Greece seems too huge to contain, as it spreads to Italy and Spain. The default seems eminent, and the concern now is whether the default will be done in an orderly manner, or will it cause a stir up in the financial system of Eurozone.
My accumulated profits all these while has been totally wiped out this month. Recession seems inevitable now, and a rough ride ahead is bound to occur. Selling off anything now due to panic selling seems to be a bad move. The only consolation now is that most of my counters have decent dividend yield. Hence even in times like this, I should still have a stream of consistent dividend income when the share price plunges.
This month, I decided to further average down my buying price for Wingtai, as its share price continue to be depressed even though it reported spectacular results for the previous quarter. As such, I decided to take the opportunity to average down my buying price and earn the spectacular dividends that they are going to payout to shareholders.
Other than that, there are no further changes to my portfolio this month. Currently I am just waiting for the tide to turn, and getting ready for the upcoming earnings reporting season. Hopefully all the earning reports for the quarter can gradually rebuilt the confidence of investors to pump their money back into the stock market. However, I believe the instability in Europe will continue to keep investors at the sidelines. Hope that the economic picture can be clearer soon, and may the last quarter of 2011 be the best quarter for this year.

My Current Portfolio:

Lessons learnt: Panic buying is as dreadful as panic selling. However, no one knows when the tide will turn. Thus never try to time the market, just do the homework and let the market do its job. As long as the money is not urgently needed, investment with a longer term horizon should prove profitable.

Monthly Review- August 2011

This month has been the worst month of my investing horizon. At the beginning of the month, S&P ratings agency downgraded US long term debt ratings by one notch from AAA. As this is the first time in history that the biggest economic power in the world lost its triple A sovereign credit rating, it brought about a large scale panic in the markets. Global stock markets faced a plunge last seen in the economic crisis in 2008, which reminded many investors of the panicky market conditions at that time.
Sell down was fast and furious, and by mid August, all my unrealized profits for accumulated for the past 2 years were wiped out, and even registering losses in my portfolio. The damage has been huge, but thankfully nearing the end of the month, the market sentiment turned slightly positive as IMF announced that they will do their part to boost the jobs market when needed. This confidence booster helped the market claw back some of its losses at the end of the month. My portfolio also recovered from the loss to register a small unrealized profit. Nonetheless, for the month of August, my unrealized profits has decreased by a massive 70%!
There are no changes to my portfolio this month. Amidst the gloom and doom, the only positive news were the earnings report released by the companies and their declared dividends. Parkwaylife Reit has declared a quarterly dividend of $0.0237 per share. Parkwaylife Reit has been generating consistent returns, especially in times of uncertainties, it has proved to be a gem. In addition, in current times of high inflation, Parkwaylife Reit will be a great hedge as its rental income is pegged to the CPI. The quality of this counter can be observed in the great support in its share price. It is definitely the best performer in my portfolio for the month.
FJ Benjamin has also announced spectacular results, with soaring profits and higher revenue. With that, they had announced a final dividend of $0.0200 per share. This is in line with last financial year's distribution, indicating its sustainability. In addition, ST Engineering, Rotary and UOB Kayhian has also announced their respective interim dividend of $0.0300 per share, $0.0100 per share and $0.0050 per share. ST Engineering had a good quarter, but both Rotary and UOB Kayhian were not in a good shape. Profits declined quarter-on-quarter, and there were even downgrades on Rotary by some analysts. However, at this point of time, as I am not in need of money, I will just keep my shares for future dividends while awaiting for the tide to turn.
Last but not least, Wingtai has also reported a fantastic set of results. With a huge amount of cash at hand, Wingtai has declared a total dividend of $0.0700 per share. This announcement attracted a huge buy up by investors and traders, causing the share price to jump by 8.3% one day after the announcement. The huge jump has also caused me to missed the buying opportunity to average down the price of Wingtai that I am holding on to, as I have learnt not to chase after share prices. However, I will keep a lookout for any possible dips in the near future to average down as well as tap on the bountiful dividends.
In conclusion, volatility is hear to stay at least for the next couple of months, as the markets are jittery of the prospects of US and Europe. I will still hold on to my counters, and keep a lookout for the opportunity to average down or realize my gains/ losses.

My Current Portfolio:

Lessons learnt: In current times, buy and hold seems to be a waning strategy. Quick profits and strict loss cutting strategies seemed to be better options in these times of volatility.

Mapletree Industrial Trust (18th Oct 10 to 4th Aug 11)

Mapletree Industrial Trust has been a promising counter since the start. With its strong sponsor, Mapletree Investments, and the excellent performance its sister share Mapletree Logistic Trust has shown all these while when I was holding on to it, I believe that this will also be an outstanding counter to have.

I was lucky to be one out of the many who managed to get 1 lot of Mapletree Industrial Trust during IPO at the price of $0.93. During that period, there were many IPO listings in SGX, however, most seemed to underperform because soon after the hype, many of such new IPOs have their share price sinking to levels below their initial pricing.
Mapletree Industrial Trust on the contrary, stood out from the rest. Although after the initial hype in the first couple of days to hit a high of $1.19, the counter retreated to levels between $1.02 and $1.10 for a few months, it still remained above the IPO levels. This shows the confidence and the support investors have for Mapletree Industrial Trust.
Throughout the period that I was holding on to it, Mapletree Industrial Trust has been generating great returns for its investors. The dividends paid quarterly to investors rose from $0.0152 per share in 4th quarter 2010 to $0.0193 per share in 1st quarter 2011. This huge increase in payout further substantiates the capability of its management to generate great returns for its investors.
In July 2011, the share price of Mapletree Industrial Trust rose to $1.225, a new high since IPO. However, I was rather hesitant to sell at that point of time due to the news that there was a preferential offering of 2 shares for every existing 25 shares for all its current shareholders at a price of $1.06. In addition, the management has announced an estimated cumulative dividend payout of between $0.0309 to $0.0312 for 2nd quarter of 2011. As this has been a great counter, I was tempted to increase my holding and wait for the dividend payout. Therefore I decided to set a sell price target, if the target was hit before the XA period, I will sell it, if not I will just keep it and apply for the preferential offering as I believe after XA the share price will drop to below $1.20 due to dilutive effects.
However, patience paid off. After the XA period, the share price of Mapletree Industrial Trust dropped for a couple of days, and rose back to levels above $1.20 shortly. This gave me the opportunity to get the cumulative dividend payout, as well as profit from the capital appreciation. Thus, I made the decision to sell my single lot at $1.215.
My thoughts at that time: I was rather hesitant in selling this counter, due to its profitability all these while. However, I also have to factor in the risk-reward ratio. The counter has hit its recent high, and the possibility of a downtrend seems higher than a continual uptrend. Therefore I decided to act on it and sold it with a total gain of 34% from both capital appreciation and dividend payout.
Lessons learnt: Many times, the share price of a counter is not reflective of its fundamentals, especially in times of global economic uncertainty. I am glad I sold it and realized my gains, as the global market went into a selling frenzy almost immediately after. Do not let greed blind you. Once the target is reached, sell it, because if the global economic conditions turn, no matter how strong the fundamentals of the counter is, it will not be spared.

Monthly Review- July 2011

Since March 2011, the markets had been looming with bad news. From the Japan earthquake, tsunami and the nuclear crisis, to the European debt crisis, to the possible hard landing in China's economy, to now, the US debt ceiling crisis, the markets had been beaten down rather badly. However as many market watchers believe that the US politicians will make the "right" decision so as to avoid any default by the world's largest economy, thus the STI managed to stay in the green for the month.
For the month, my total unrealized profits rose by approximately 20%. No new additions were made, instead, I have liquidated part of my holdings in FJ Benjamin during a short lived rally to $0.405. I believe that in the longer term, FJ Benjamin will still do well, but due to my over-leveraged in it, selling part of it now for extra cash for possible averaging down in the near term seems to be the best option now to limit any downside risk.
This month is also the start of the earnings reporting season. So far, 4 companies in my portfolio as announced their earnings for the quarter. FSL Trust has announced a total dividend of USD 0.0095 per share. USD 0.0087 per share has been distributed prior the private placement with the proposed exchange rate of US $1: $1.2245, which equates to $0.01065 per share. The remaining USD 0.0008 per share has been announced and it will be paid at a later date with the proposed exchange rate of US $1: $1.2040, which equates to $0.00096 per share. Even with the private placement, the total dividents to be paid for the quarter remains at USD 0.0095 per share. This shows the higher total DPU that the management has been able to pay from the purchase of the two new product tankers. I believe this is positive news and hopefully the share price can gradually start to rise again.
In addition, CapitaMall Trust has announced a dividend of $0.0236 per share and Mapletree Logistic Trust has also announced a dividend of $0.0160 per share. Both counters have been providing me with a steady growing stream of dividend income as their apt management has generated consistent returns for all investors. I will continue to hold on to these counters for long periods, until fundamentals changed.
The biggest news this month should be the private placement and preferential placement of shares by Mapletree Industrial Trust. This is an accredative move by Mapletree Industrial Trust, as the placement is to fund the purchase of two divesment by JTC which will improve their yield in the long term. However, I am still deciding what to do. Hence I placed a target sell price for my single lot obtained from IPO. If my target price is not reached, I will subscribe to my units during preferential placement.
Next month, Parkwaylife Reit and other companies in my portfolio will be announcing their results for the quarter. I believe there will be good news from them. Currently the issue of US debt ceiling still weighs on the market. Hopefully the US politicians can quickly come to an agreement before the deadline is reached, else the market will definitely plunge into freefall.

My Current Portfolio:

Lessons learnt: Diversification is an important investment strategy. It is crucial not to put all the eggs in one basket so that any possible losses can be minimized.