Earnings Season - Portfolio Update

Hi all, it's been a week since I last blogged as I was away on holiday in HK and what a hot holiday it was as the temperatures there just were sky high.

Nonetheless, as I was in HK I still kept a close watch on the markets in general. It was earnings reporting season for a host of companies in Singapore, which included names like Comfortdelgro, Singtel, Sembcorp Industries, Jardine Matheson Holdings. Of these names all reported solid earnings except Jardine which saw a firm-wide knock on the profits of its businesses.

I would be expecting a bumper crop of dividends for Sept of around $500 plus in which they will be entirely reinvested in their existing holdings.

What we also saw recently was a massive sell-down of many stocks mainly due to flowover concerns from China's recent devaluation of its RMB, not once but twice. This leaves many of the prices of the companies within my portfolio at rather attractive levels. I may consider either adding unto my REIT positions (ie. Capitaland Mall Trust and Mapletree Commercial Trust) or adding unto a postion to Comfortdelgro, Singtel or Sembcorp Industries. I am still undecided at the moment but will commit the funds later this month.

Meanwhile, it's more studies on my CFA Level 2 and just monitoring the market dynamics in general. Will update again when I further consolidate my portfolio with new additions to my existing holdings + reinvestment of the incoming dividends.

Signing Off
Transitioning Stock Investor

Lessons that need to be learnt from the Chinese Stock Market Crash

General foolhardy market euphoria, Utter disregard for fundamentals, Retail Investors jumping in based on total speculation.

The above sounds all too familiar ya. Yes, the above is what I would use to describe what happened to the Chinese stock market over the last 1 year or so. Almost everyone in China who could invest, went into the stock marker with wild abandon. Chasing stock prices as they went higher. Buying stocks like it was a roulette game in a casino (red or black). Interestingly, this phenomenon was warned about in the book which I shared about in my previous post. And ex-post everytime this phenomenon occurred it was bound to end up being pretty ugly, which is what we are currently seeing in the Chinese stock market as we speak. It certainly was also a reminder of what we saw in 2008, where markets crashed discriminately and spectacularly.  

Over the last one week, around half of the stocks in the market were halted for trading by their own companies. We have seen certain stocks drop by levels that would have rendered most people bankrupt if they had marginalised their positions, something in which many Chinese investors did. Mutual funds were not spared as many of the Chinese A shares they invested in were similarly suspended. I did a quick study of some of these suspended stocks and some of the names just bewildered me (as there was a good mix of unfamiliar and relatively well known names). 

All the above just goes to show a few important points, which are closely correlated with behavioural finance. If you would like to invest and to do it well, understand the business you are buying into. Also, do not allow greed or emotions to drive your decision making. Never follow a trend based on hearsay or following your inner herd instinct. In the stock market a stock that everyone is chasing up is not necessarily a good investment idea. In fact, often times the stock price does revert to mean somewhat and you end up with a bruised position and sometimes ego. Put real effort and analysis into your investments and you will reap the harvest in the long run. Learn to look through the mess and stay focussed in finding quality businesses selling at reduced prices in the days to come.

In other words, Stay Calm and Invest On my friends.

Signing Off

Transitioning Stock Investor

Thoughts on the Market - 25 June 2015

Wow, what an eventful recent few weeks we have had. We saw the Fed being dovish on rates, the China 'A' share market taking a nosedive 'again' and most importantly the threat on a 'Grexit'

So I ask myself again what should I be doing in such a market environment whereby it is fraught with 'Ifs' and 'Hows'.

I found it important again to remember this. Stay invested, buy on dips and keep a warchest for eventual corrections. I also realised that I have repeated this process over time and it always works. The key to success in investing is this: Know what you are buying, keep emotion out of investing, have a plan and always think LONG TERM. Avoid trading the market and you already have half the battle won.

Remember this again, be the tortoise and beat the hare at the investing race!

Signing off
Transitioning Stock Investor

Thoughts on the Market - 10 June 2015

Dear Friends,

Good wednesday afternoon! In the midst of the SEA Games which is being held in Singapore, our focus of course is still very much on the market.

In the recent market weakness, did any of you take the opportunity to add into your positions? I sure did, as shared in my previous posts, I was focussing on adding a position in Singtel and I did when the price suffered the recent correction. In Singapore we call this 'Lelong!'

Great stock at a cheaper price, so a lot was added. Really looking forward to its continued growth in the 4G space as well as its Digital Life offerings. Dividends galore!

Although my portfolio took a hit overall I was not worried much as I knew that I was invested for the long run. In fact I was pretty excited as I saw many great stocks trading at a lower price for the taking. Today, the market has recovered strongly and my portfolio's performance is looking nice. 

Always remember, buy on dips and do not be afraid to add unto quality positions. Market dips are just a test of your patience and the conviction of the portfolio you have built over time. Those who have passed this small test, kudos to you! 

Signing off

Transitioning Stock Investor

Thoughts on the Market - 29th May 2015

Day's off for me today. As I settle down for the long weekend, I'm at my laptop thinking about what has happened in the market during the week. Yes, we may ask.....what happened???

As most of us may know, the Chinese Stock Market plunged more than 6% yesterday. As I'm watching CNBC, I'm also seeing a lower pre-opening price for most of the Chinese stocks. Pundits are gunning for a 3% rebound, so let's see where that heads.

What does the above Chinese market sell-off spell for the Singapore stock market? Inadvertently, there is a similar spooking of the market. Most of the stocks in my portfolio (barring Raffles Medical) are trading mostly downwards this morning. 

In the past, whatever that we have witnessed would have similarly spooked me and I may have just closed my laptop and just avoided the market with a ten foot pole. However, as my investment maturity grew (that was of course due to witnessing the 2008 GFC, Fed taper tantrum, Oil shocks, etc) I begin to look at this period as a great opportunity to invest in the stocks that I like. 

This brings me back to my previous post whereby I wrote at length about Singtel. The current price of $4.09 does look extremely attractive and I would probably add another lot if the price hovers around those levels for the next couple of weeks. We'll see. 

OCBC Bank does look interesting as well at its current price of $10.14. It has fallen quite substantially below my average cost of $10.34 for my existing holdings so probably this is an area that I may be seeking to increase my holdings. You may refer to my current portfolio (in my previous post) for a guidance on what stocks that I'm 'focussing' on. 

To reiterate my thoughts for the market today. What goes up, does have to come down. The Chinese market has been red-hot and the pull-back was as inevitable as ice melting on a hot bonnet of a black car in a 33 degrees day in Singapore. However, what this does is also present us opportunities to invest in the Singaporean market with bargain opportunities galore.

I hope you can find your set of bargain opportunities as well. 

Signing Off
Transitioning Stock Investor