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.