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Portfolio Review 2021 - Performance Review

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Added TWR breakdown by market performance as my portfolio ventured outside SG Quantitative Measures Beta = 1.06, VaR = 12.60% Expected Shortfall = 19.57% TWR = 38.69%, XIRR = 7.90% End of Year review 2021 is an eventful year marked by huge market volatility in all asset classes. The surge in interest of retail trading / investment in US markets brought markets to speculative highs in loss making zero / minimal  revenue companies, and the announcing of the interest rate tapering brought stocks to more attractive valuations at year end. Momentum stocks / shitcoins / China crackdowns took turns dominating the headlines as the financial media (similar to Facebook) is incentivized to optimise for clicks and hype and not about solid fundamental changes in the underlying asset. A lot of unusual speculative quirks happened in the financial markets which forced me to reassess my basic assumptions about conventional financial wisdom.  Some memorable events that surfaced this year are i) The coor

To You, 10 Years From Now

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  <Inflation is Transitory> To You, 10 Years From Now As I hit my 30th birthday at the month of November, I completed my CFA level 2 examination. This is the most challenging curriculum I have ever taken in my life. Despite my working experience and my Bachelor degree in Economics and Finance, the sheer difficulty and breadth of the content exceeded my expectations and sapped a lot of my time and mental energy for the past few months. I finally had time to do some introspection and reflect on my investment journey so far. The latest list of worries in the headlines are wide ranging. Inflation can be keenly observed from home prices, asset prices, delays in shipping resources / food supplies /eCommerce, and heightened transport and shipping costs which affects all areas of the economy. The Omicron covid variant is disputing the narrative of post covid economic recovery which sent the prices of recovery stocks tumbling. As I was skeptical of the narrative of forward looking marke

The Bewildering community of Reddit

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                        No matter how hard you practice, there is always someone in China better than you The Bewildering community of Reddit Reddit is one of the most rapidly growing social media platform that is partially owned by Tencent. Similar as to how Tiktok caught the world by storm, reddit <sub-forums and up-vote/down-vote mechanism> has one of the largest communities, most divisive sub-forums, and one of the most dominant social media platforms in the world that is not listed on the stock exchange. I noted an interesting trend whereby the network effects of being the largest social media forum has the potential to displace social media platforms like Facebook Groups and EDMW/HardwareZone. The dearth of frequency and quality of user posts in forums such as valuebuddies / Money Mind suggest a user migration to the larger platforms like r/singaporeFI, as the younger generation detest the idea of sharing the same peer-engagement platforms as their parents / grandparents. (

Wake me up when september ends

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    Office setup of the Best Performing Fund Manager Wake me up when September ends September saw a flurry of market volatility as market participants discovered new reasons to worry about the stock market and economy. The September and October effect discussed in academic finance, whereby these are traditionally worst months for stock markets, seems like an interesting area to explore. Whether this market anomaly is a consequence of market structure, timing of earnings report release, or self-fulfilling philosophy by market participants, is unknown to me at this moment.  On the lighter side of things, news of hamsters and government officials beating the top fund managers become the meme of the month on reddit forums like WSB, and a nightmare for active fund managers. As the saying goes, if you can't beat them. join them.  China Market At China front, the tech crackdown is ongoing and expected to be continual until next year Feb 2022.  The speed and severity of the restructuring a

Everybody has a plan until they get punched in the face

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  Everybody has a plan until they get punched in the face As the china central government continued their spree of popping up regulations in all areas of China economy (Minimum wages, living conditions for drivers, 996 working hours, gaming time for minors, wealth redistribution policies, Banning dancing  grannies , the list goes on), the steep decline in the HK/CN stock prices seem to be consolidating and taking a slight breather for now. Although I have stuck to the plan of disciplined averaging down from July till now, it is never easy to watch your favorite picks go cheaper as new rules are being drafted. It is never easy to stick to your convictions based on the research and thesis of the stocks you hold, and believe you are right amidst the market noise and chaos. Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze.You can plan all you want, but you’re going to get hit – probably when you don’t expect it - and it’s going to hurt.   No plan

Record breaking crash in Hang Seng history

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  Record breaking crash in Hang Seng history As the mainstream news are focused on the groundbreaking Tokyo Olympics records set by the best athletes in the world, the financial news are focused on the fastest crash in Hang Seng history, which exceeded the records set by the S&P 500 crash last year. As financial markets are increasingly driven by algorithmic trading by institutional investors, I think the trend of rapid and harrowing losses is starting to be an expected trend and not a <6 sigma event> popularized by conventional quant finance. A lot of the narrative in social media / forums seems to be to avoid the Chinese market at all costs and there is lot of retail selling among the paper hands, which prompted me to deep dive throughout the weekend to discern the noise from the facts. Between the choice of averaging up on the most expensive market reaching its All time High in US history VS buying into the crash in the All time Low in HK history, the choice is apparent to

I'm from the Government and I'm here to help

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Thoughts about regulatory clampdown on Didi and the impact on China market HK stocks took another beat-down as the Chinese government took intricate measures to interfere with the raising of capital of China companies in US stock exchanges. The Chinese government took extreme steps to punish Didi from registering new users days after its US IPO under the guise of data protection, prompting a chilling effect to China companies, which withdrew their US IPO plans. What started as a nationalist initiative from Trump to delist China companies from US exchanges <Punish the Chinese from free loading on US capital markets>, was caught on by the Chinese government whom seek to take this further. By setting new regulation on the VIE structure, tweaking the disclosure requirements, and launching crackdowns on the largest Chinese companies, the Chinese government seems focused on legitimating its control over the tech giants, as it acknowledges their market presence on the economy. This move

100 Baggers by Chris Mayer

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100 Baggers by Chris Mayer I have completed the 100 baggers book by Chris Mayer. Personally, I am not too impressed by the insights provided by the book. The content seemed to be an amalgamation of the thoughts and quotes / best practices of the more esteemed value investors, with little original insight. I personally like the philosophy of the book to prepare the investor towards longer term holdings instead of churning the portfolio unnecessarily, but there are salient points that I think are logical fallacies and very dangerous for the amateur investor, and hard to implement even for full time investors. Nonetheless, I have shortlisted a number of professional investors that is attempting to implement this approach and I may segregate a portion of my <Mental-writeoff> portfolio to these stock ideas.  Problems with the Hundred Bagger approach 1) Huge survivor-ship bias and <Qualitative Back Testing> Due to the adaptive nature of the markets, I do not think that a commo