Posts

Portfolio changes post US election

Image
Portfolio changes post US election I reinstated the majority of my investment portfolio gradually until post US elections. Due to the high volatility event alongside with earnings season, I fully expect to have significant slippage as I rebuild my portfolio. I made the decision to reinstate my positions in the stocks that will be least affected by candidate agenda risk, followed by the companies that will be most exposed to geopolitical risks. Due to MayBank custody fees, I decided to re-balance my portfolio holdings to reduce the number of holdings that have uncertainty in its growth prospects and moats, and rebuild larger sized positions on my highest conviction holdings. The Value /Growth investing group I just joined also deepened my understanding on the limitations of valuation ratios for ETF selection and individual stock picking, and the economics of businesses that I was previously unfamiliar with. Personally, the biggest takeaway from the group is the ability to test the stren...

Forced Errors in trade execution

Image
Forced Errors and unforced errors Drawing lessons from amateur tennis (which is similar to amateur investing as a losers game), A forced error is when someone hits a shot that is strong enough to force you to miss your shot or not touch it at all. An Unforced error is when the player has time to get in position and setup for the shot but still misses. This can be caused by bad contact, timing, shot selection, etc. Forced Error My workplace tightened regulations around the usage of broker dealers and I am forced to liquidate and close off my brokerage account in SCB and Poems. This is a huge hit to my existing investment strategy towards a more aggressive allocation to foreign GARP stocks. SCB was my favored custodian for my foreign listed shares, as it has zero corporate action and custody fees which is favored for a buy and hold, while POEMS provide me potential access to China A stocks directly. The other options my workplace permitted as authorized broker-dealers (UBS and...

Considerations for FCT Preferential Offering

Image
Considerations for FCT Preferential Offering Frasers Center-point Trust took an aggressive stand to expand its portfolio of retail focused malls by divesting the under performing Bedok Mall, and raising capital for the purchase of a 63.1% stake in AsiaRetail Fund Limited. Due to the limited cash position of the REIT structure, a private placement (For accredited investor) and preferential offering (for existing shareholders) is conducted to raise capital to pare down its gearing and also complete its acquisition. Despite the creative naming of private placement / preferential offerings used by the investment bankers, the deal is essentially a dilution to the existing unit-holders, as the REIT manager seek to issue units to raise capital for the REIT to expand its portfolio base. Impact from Covid on the sub-urban malls There will be a lot of ca sualties in the vanilla shopping malls . I have first hand seen shop closures in some of the malls around Singapore. The short term WALE is a...

Alpha-Bet

Image
  Betting on Alphabet I reinstated a mid conviction position into Alphabet C stock on 21/09 as the Nasdaq corrected from its previous lofty valuations. Key Thesis of Alphabet is that it will be a continual compounder and continue to generate sufficient advertising revenue from its proprietary search engine and Youtube ads, and generate future lumpy returns from its Alpha-bets. My revised understanding is that the long term compounding thesis is not affected and it is able to continually develop its innovative product catalogue. The slight margin of safety compensates for the risky nature of the company. Because the company is so difficult to value due to its <Call Option> nature, the best way to invest in Alphabet is to treat it as a charitable contribution and not be emotionally affected by its hits and misses , and let the geniuses in google run the company uninterrupted. A key reminder to myself as I mature as an investor, is to not view Tech companies as a blob and use s...

Grabbing a bite of the Fast Food market

Grabbing a bite of the Fast Food market I initiated a mid conviction position into the secondary offering of Yum China on 10/09/20 at the price of HKD 395.80. I believe there is a strong growth story and recovery in consumer spending in the Chinese market. CEO Joey Wat has already proved to be capable in turning around the aging KFC franchise in China and introduce a culture of innovation, technology integration, and operational efficiencies to grow the franchises. What I like Simple understandable free cash flow generative business. From an operational cash flow perspective,  YumCn has powerful food products and franchises that already have a good track record of success like KFC, Pizza Hut, Taco bell. Unlike most food companies that employ a globalisation strategy and failed to enter target markets (Dunkin in India, Starbucks in Australia), YumCn is focused on glocalisation to adapt its products to local tastes. This is important as Northern Chinese and Southern Chinese had diffe...