1st Qtr 2018 : Dividend and Portfolio Update





Is time to calculate our dividend income for 1st Qtr 2018 as financial result for most of the company should had been announced by this time. Market has gone through like a roller coaster “ ride in 1st Qtr 2008 where it was down by almost 10% at one point and rebounded subsequently. As I mentioned in my early blog post (here ) , even with correction of 10-20% from current high in US market , I would consider it still as “ expensive or rich in valuation “ and normal correction in any market cycles.


Investor Warren Buffett says good deals tough to find ( from NewsDay.com)

Buffett is sitting on $116 billion of cash and bonds because he's struggled to find acquisitions at sensible prices. And Buffett is unwilling to load up on debt to finance deals at current prices.

In his annual letter to Berkshire shareholders on last Saturday, Buffett lamented his inability to find big companies to buy and said his goal is to make “one or more huge acquisitions” of non-insurance businesses to bolster results at Berkshire. Buffett said his goal is to make 'one or more huge acquisitions' of non-insurance businesses to bolster results at Berkshire.

Buffett also said finding things to buy at a “sensible purchase price” has become a challenge and is a major reason Berkshire is awash with US$116 billion of low-yielding cash and government bonds, whose average maturity was 88 days as of the end of 2017.

With $116 Billions of cash & short term bonds/ treasuries bill in hand which is about 22.4% of the total BERK’s market cap , I think it make sense for us to increase our war-chest to take advantage of any major market correction ( which is unpredictable of course ). I hope to increase my war chest to 20% if possible from current level of around 16%.

Total Dividend to be collected in 1st Qtr 2018 = $34,339.





*this is a bit lower than last year same period of $36,593 as I have divested more REITs and moving towards blue chips and some other value stocks to diversify more from REITs.

** I have also mentioned in last year that I would like to reduce my exposure to REITs/ Biz Trust  from around 69% of my total portfolio in the end 2016 to may be around 50% ( now is at 54 %).
*** I would expect to get more dividend in 2nd and 3rd quarters as most of the blue chips are paying their dividend in these 2 quarters.


Portfolio update :






Total holding in my portfolio reduced 1 to 44.


Keppel Corp and First REIT remain my top 2 holding same as last quarter but Accordia GT ( 5.9% -> 1.9%) and Capital Comm( 4.4%-> 3.2% ) has reduced substantially due to its own reason. For Accordia GT, it is mainly due to in-consistency of dividend pay-out and membership withdrawal issues ( guess this is also many investors concern as well, the most important thing is that I wanted to sleep well at night ). As for the Capital Comm the sold decision was due to high valuation when it hit $2 level , as I have mentioned in my blog post (here ) with regards to valuation and reversion to mean. 

We knew that REIT’s income are more or less fix and predictable not like any other growth business where we may expect double digit profit increase in years ahead, but for REIT , below 5% yield may not be compelling for me as the rental may need to increase much to push up the yield or either way , the price would have to adjust downward. Nevertheless , Cap Comm still is one of the best blue chip REITs in term of asset quality and management capability , I may add more to my position when the price is right.

I have increased my holding of SIN TEL to 5.5% ( 3rd place ) and same time disposed of STAR HUB with a lost of -$2407 (including dividend). For me , I think the sources of revenue and FCF from SIN TEL is more diversify as compared to the other two tel-co. 






I have also get rid of another blue chip which gave -12.6% XIRR where I think I have caught a falling knife as digital disruption to their media business was much severe that my initial thought. It's going to be though for such business transformation to take place and continue to be a challenging one, it may take time to re-build the business model. Venturing into healthcare sectors may yet to see the result and as what others investors think SPH= Singapore Property Holding , but how far their property sector can growth and expand is also a big question mark for me….





Starhill Global was one of my holding since GFC 2009 and it paid off to buy during crisis , with XIRR of 14.2% since 2009. With more and more luxury shopping street coming up in Asia , especially cities in China , I think the growth for such high-end shopping street may not be that prominent.



I have started a small position in FU YU in mid of 2017 and decided to let it go in early this month with “tiny” profit of $733. FU YU is just another “asset play” counter with potential of going private, but sometime it may take much longer time to unlock the value where I have decided to swap with other stocks. No doubt , the balance sheet remain strong but the profitability seems challenging in past two years. 





Obviously , not all investment turn out to be profitable and sometime we made a wrong judgments in term of RISK or severity of factors which affecting their underlying business.

As usual, in investment , you win some and lose some ….

Added 4 new counters into my portfolio, I will not elaborate the reason why I add these counters here as we only have 1 reason to buy into any stocks, which is to make $$.

Cheers !!





"There is simply no telling how far stocks can fall in a short period. Even if your borrowings are small and your positions aren't immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions." Warren Buffett's annual letter to Berkshire Hathaway shareholders 2018






Comments

  1. Wow what a massive portfolio there. Have a lot to learn from you! Looking forward to your future analysis.

    Cheers,
    Cupcake

    ReplyDelete
    Replies
    1. Hi CupcakedCrusader,
      Thanks for the comment, yah,,, it need " time " in the market to slowly accumulate such amount of portfolio value....bit by bit , but with persistency and perseverance, you will make it one day! Wow! Sin Tel is your top holding :-) at least we have 2 same counters in your portfolio!
      Cheers! 😃😃

      Delete
  2. Hi you know by when we need to buy a stock to get its dividend?
    Will the price drop usually after paying the dividends

    ReplyDelete
    Replies
    1. Hi Alucard,
      To get the dividend , you will need to buy before ex-d , yes , theoretically the price shall drop same as dividend you get after the ex-d , but sometimes it may not due to market sentiment , or worse ( dropped more than dividend you will get ) when market suddenly have huge correction on that day...
      Hope this clarify
      Cheers !!

      Delete
  3. Thanks for the update.

    Thanks for placing the quarterly portfolio side by side. Easy to comprehend. I saw you the % for Design Studio has increased, what do you think of their declining performance?

    Kep corp has increased in %, is it because of share price went up?

    Starhub was once a darling stock.....hope this reminds me not to fall in love with darlings!

    Regards,
    WY

    ReplyDelete
    Replies
    1. Hi WY ,

      Thanks for the comments , yes, I added more Design Studio when it dropped recent , I think the overall balance sheet still fine and yes , as you pointed out , their business is declining but I am hopping it may recover in next 2 years , I intend to hold this for much more longer period while waiting it to recover , from some sources , it seems that their revenue will start to pick up by end of this year... let's put our finger crossed.
      Yes, for Keppel Corp , is mainly due to price increased, I didn't add Kepp Corp for quite some time..
      Yah,, like HPH Biz Trust ... yield may not be a good judgement or indicators to buy , their underlying business is important to determine if their cash flow or div is sustainable ..
      Cheers !!

      Delete
  4. Hi STE,
    I have chance upon your blog and is very impressed with your journey. Could you share, when you invested in 2008/9 , the price of your share would have dropped and you could have dollar average down. How do you manage your emotion then? When price keep dropping what went through your mind? Doubts/conviction? If you have invested $1million, 5%dropped is paper loss of $50k. Hope to learn more about your thoughts then and the psychology behind.
    Hope to hear from you.
    Thank you.
    JB

    ReplyDelete
    Replies
    1. Hi JB.
      Thanks for visiting my blog , yes , the psychology part of looking at the huge " paper loss " is painful , but as long as you know that the market is always moving in cycles , the will recovery sooner or later , sometimes it may just take longer time to recover, with 18 years of investment , I have gone through few market cycles , of the the 2008/09 was the most severe and our portfolio was in red of almost -200K , at that time , I have also used up all my war chest , whenever our salary or bonus came in , we just buy again ( that time , me and my wife still working).
      Yes , it really need very big courage and conviction to belief that market will recover some days in future... also the most important thing is to have diversify portfolio and know what you are buying ,, not those speculative counter.
      Hope this clarify ,
      Cheers !!

      Delete
    2. Thank you for your reply and sharing. :)
      I also noticed that you do cut losers. What are the possible scenarios that you will do that? As sometimes recovery can be slow and patience needed. Hope to hear from you.
      Thank you. :)
      JB

      Delete
    3. Hi JB,

      Yes , I do cut the loser from time to time like HPH Biz Trust/ SPH and Star Hub , each will hv their own reason and story, for HPH , mainly due to diminishing profit margin which affect their dividend pay out , the business is facing fierce competition from surrounding ports and also continuous slumps in container shipping business which is their pay master, if shipping don't recover , one will not expect their port tariff to improve ...as for Star hub,,, the competition from 4th telco will be severe which they have started the price war even b4 the 4th telco started to operate.... and SPH mainly on the diggital disruption , where i feel the business reengineering will be tough.
      You may notice that I have increased my holding in SIN Tel , which I think their revenue source are more diversify ...
      All in all , the cutting off of any counter will have their own reason , but mainly due to the decline of underlying business ...
      Hope this clarify..
      Cheers :)

      Delete
  5. Hi STE,
    Thank you for your sharing! :)

    JB

    ReplyDelete
  6. Thanks for sharing! 👍🏻✋🏻 It’ll be useful in building my own portfolio. By the way I think you mean SingTel

    ReplyDelete
    Replies
    1. Hi Mr Unity,
      Yup ,,, is Sing Tel...thanks for the correction.
      :)

      Delete

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