Post General Elections 2015 + Portfolio Update. Do have a read!

And so, the people of Singapore have spoken. In what was a rather surprising result, the tailwind shifted to the sails of the PAP party's ship. The electoral results were pretty conclusive which resulted in a much better performance of the governing party. The picture below shows the soon-to-be party coverage of Singapore. I won't state too much comments with regards to the electoral result as this would not be the appropriate forum. However what I will say is that I do hope to see a more balanced parliamentary coverage in future elections. This should only benefit a first-world country like Singapore truly is, or is trying to become.

As shared previously, I would be sharing a brief update of my portfolio progress. As can be seen in the Bloomberg screenshot shared below, the portfolio is still deep in red territory. However, what is positive is that we have shifted somewhat from the steepest declines seen in mid-August when overall losses were in the double digit % terms.

Stock Portfolio as of 12 Sept 2015

Moving ahead, I will be holding unto the direction of my portfolio steadily. The course has not changed and in the months ahead, I most probably will be adding unto select positions. It is highly probable that I will be adding positions in either Jardine Matheson (JMH) or Singtel. The main emphasis for me is to identify companies that either have large existing moats (JMH) that are trading at temporary lower prices or those that are able to use technological innovations to improve both the efficiency and diversity of their businesses (Singtel). In other words, businesses that are able to grow and sustain either their top-line growth or profit margins.

There are certain components of the portfolio that I have a keen eye on in terms of looking out for potential headwinds. This would be the REITs segment (with rising rates and increased penetration of online shopping) and Sembcorp Ind. (weak oil prices). I do not expect to be adding unto those positions at the moment given the uncertain macro risks they still face.

Lastly, there are the quality stocks which I own but with still lofty valuations. These would be the likes of Raffles Medical and ComfortDelgro. They remain great businesses but I remain hesitant to build those positions until the prices make more sense from a valuation perspective.

Dividends for the portfolio remain strong and by the end of 2015, a total of $2,500 worth of dividends will have been paid (based on the current positionings). I'm really glad as this presents a small step in my journey to investing full time and building a solid and sustainable passive income stream.

Will look to write some detailed analyses on both Jardine and Singtel in days to come. In the meanwhile have a wonderful Sat. and a good post election day ahead! As usual, back to my books and more reading on financial statement analysis :)

Signing Off

Transitioning Stock Investor

Jardine Matheson - Missed the boat

As I was monitoring the share prices of the stocks in my portfolio, I was cognizant of the fact that the price of Jardine kept on falling. 

I was monitoring this very closely and was calculating the cost I had to pay in SGD. As we know USD has strengthened a fair bit against SGD and in USD terms it had went up 3.7% since I bought my first lot a few months ago at USD 57.10.

I decided to bite the bullet and placed a queue order at USD 46.50 when the market price was around USD 46.70. The price went back up and closed at around USD 48 today. Oh well, missed the boat on averaging down on this counter but let's see how it pans out next week.

Based on the data I have analysed from Bloomberg for this company and relying heavily on one metric which is purely the relative price of the company vs its historical mean, the price should be around the range of USD 58 instead. I shall not bore you with my further analysis of the other ratios and analysis of the market ecosystem of its related companies (which span across Indonesia, China, HK, SG etc) but I am fairly confident of the future potential of this company to revert to its mean 'value'. Shall therefore keep a close eye next week when markets reopen.

Signing off

Transitioning Stock Investor

Interesting Dilemma: Sharing my Thoughts

Good Saturday morning folks!

It's election fever here in Singapore as we are in the midst of our elections to vote for the next party to be in parliament. My vote is still undecided as a myriad of topics emerge for both deliberations and considerations. Usually in the past, there is an 'election effect' that we would see for Singapore stocks. However, with the current overall market volatility this effect has been completely dilluted.

Nonetheless, I remain steadfast in having strong belief in our local companies. More so of the ones that I have invested in. In recent weeks I have been faced with a dilemma.

- Do I average down only on some of my heavily beaten down positions?: OCBC Bank (11% down), Jardine Matheson (11% down) & Sembcorp (17% down).

- Or do I maintain allocation discipline and add evenly across all names?: Currently I have 8 names in the portfolio which has not changed for the last 6 months: OCBC Bank, Sembcorp Industries, Jardine Matheson Holdings, CapitalandMall Trust, Mapletree Commercial Trust, Singtel, ComfortDelgro and Raffles Medical.

- Or do I add positions to the ones that have continued to hold up well?: Comfortdelgro and Raffles Medical, both positions are the top performers in my portfolio.

As I type this and with limited resources at any one point, I'm still pondering on the next step to take. However and I say this with immense pride, I am glad that I rejected the urge to panic sell or to re-consolidate certain positions indiscrimately. With proper planning and selective stock picking, it became apparently clear and more so during the recent market madness that the companies which I have chosen are solid names that I would want to add even more when markets rotate.
So I'm glad my decision moving forward is skewed towards where to ADD rather than where to SELL as there is no impairment I see at all to any of the 8 businesses that I have stakes in. Nonetheless and on the flip-side, in a bullish market if any of the positions have risen to levels that I feel are prime for trimming, the appropriate rebalancing will be done. This was done a couple of times on both the Comfortdelgro and Raffles Medical positions earlier this year (for those of you who have been following my blog you may have read those earlier posts).

So remember, to empower your portfolio you need to have faith in the companies you put your hard earned money in. Not blind faith I have to reiterate, but faith stemming from hard work and research in the companies you own.

If you are new to investing and would like to construct a portfolio for a start, you may wish to follow my selections and get updated via this blog. However, please do not take this as buy-sell recommendations but they are suggestions on how to construct a proper stock portfolio. This will hopefully set you on the course to a better financial future and less reliance on your active work income.

Ending off with sharing some of my dividend updates for Sept below:

*Dividend Update for Sept
- Scrip reinvestment elected: OCBC Bank $360
- Scrip reinvestment elected: Jardine Matheson US$38

Signing Off and Have a Great Weekend
Transitioning Stock Investor

Market Catalysts and Quick Portfolio Update

Looking at the current market today, there will be some short term catalysts that will be of interest.

Firstly, it has just been confirmed that an agreement has just been reached on a Greek bailout plan. This deal when voted into the Greek government will hopefully keep Greece in the Euro and Grexit will not occur. In fact, it further shows the solidarity of the Euro and keeps the other countries that went through austerity (ie Spain, Portugal, etc) happy. I see this as a positive catalyst.

In the Chinese stock market, I see a longer term systematic issue. Nevertheless, the recent moves by the Chinese government to steady the ship and prop the market up has went some way to steady the market. To me, in the long term the Chinese investor needs to learn from past lessons, but at least for now things look better than a few weeks ago. I similarly see this as a positive situation.

In terms of the local stock market, a slew of companies are poised to announce earnings with the next month. All of the stocks in my current portfolio are slated to announce earnings during this time period. I attach a nice screenshot of the positive price action today:

Watchlist of My Current Stock Portfolio (Source: sgx.com)

I await better results especially from the less performing companies: Sembcorp Industries and Jardine Matheson. I hope that my trust in these companies will pay off in terms of better earnings numbers.
I continue to be fairly confident in the earnings of the core companies in my portfolio: Singtel, OCBC, ComfortDelgro and Raffles Medical. I similarly expect the REITS in my portfolio to continue their good performance: Capitamall Trust and Mapletree Commercial Trust.

I will be taking a break from adding to positions in the current month as I continue to build my warchest. I recently sold a holding of Raffles Medical (at a profit of c.S$700) to fund a watch purchase. Oh well, all work and no play makes Jack a dull boy, but I definitely look to lessen such activities moving forward.

The markets do look very interesting now and some of the positions in my portfolio looking prime for adding, especially Singtel, ComfortDelgro and Raffles Medical. Will closely monitor these positions and update accordingly when I make stock additions. As of now, I relaxingly sit back and let the portfolio recover and continue to churn out its dividends.

Signing Off
Transitioning Stock Investor

Thoughts on Jardine Matheson Holdings

Good Thursday Folks

Since I have recently purchased some shares of Jardine Matheson, what better time to write about the company.

The Jardine group is indeed a complex web of companies with Jardin Matheson owning part of Jardine Strategic and vice versa. This structure was purposefully formed to prevent adverse takeovers something which the group was subject to previously. 

I shall not dwell too much about the company's long history or further corporate complexities as it is simply too long and complicated to elaborate here. I will just share 3 points that helped make my decision to take a tiny stake in the company.

1. Valuation

- The current valuations for the company all look within range and are values that I am comfortable with paying for. P/E is around 12x and P/B is around 1.1x, both of which are reasonable levels for me.

- The price has also dropped around 15% since the beginning of the year, which also makes this a relatively discounted price for me.

2. Business Model

- The group has a diverse range of businesses. Again I like the fact that when I buy this company I have access to Astra, Dairy Farm, HK Land, Jardine Lloyd Thompson, Cycle and Carriage, etc. These are all great businesses in which alot of us have a good deal of exposure to both on a regular and long term basis.

3. Cashflow US$

- The company has grown its dividends steadily over time and these will be in US$. With the eventual rise of interest rates in the US$, we should expect to see a nice headwind in terms of dollar strength. This gives me a nice potential FX kicker for future cash flows (dividend and capital gains) which will be in USD and translated into SGD at potential higher values.

There definitely were some concerns that I had with regards to the investment. The group is quite tightly held by the Keswick family so alot of its fortunes are tied to the ability of the family to grow the large and complex group of businesses. There is also the FX exposure in US$ which may go against me in future in the unlikely scenario that my hypothesis about future FX rates is incorrect.

Nevertheless, I like the company and its potential enough to take this initial position. I'm really glad to have bought into this stock and I hope I can add on more in future.

Also, I've decided to stick to just the 8 companies that I own at the monent and just continue to add unto those for the forseeable future.
Remember it's the quality and not quantity that counts!

Signing Off

Transitioning Stock Investor

Update: New Stock Holding added!

After a long deliberation and much thought, I have added 100 shares of Jardine Matheson Holdings today at a cost price of US$57.10. Translated into S$, the amount is around $7,750.

I'm really glad to have added this stock to my portfolio as I really like their portfolio of businesses. It ranges from automotive sales, supermarkets, hotels, insurance, property, financial services amongst others.

I really have not felt so excited in a while about buying a particular stock and I am also really happy with the look and structure of my portfolio now. I'm also glad to be a beneficiary of the smaller lot sizes as previously I was not able to take positions in this stock due to its high price. I may add more positions in this counter moving forward, we shall see.

Will update my portfolio structure in due course. What do you guys think about the Jardine group of companies? Do let me know!

Signing off
Transitioning Stock Investor