Tuesday, July 29, 2014

Review of My Portfolio

In line with the recent naming of my portfolio as well as defining the portfolio composition, I have decided to do a quick review by classifying the counters in my portfolio into their respective categories as below. It will also help me to decide which are the ones that I should trim / remove from my portfolio eventually.

The presentation format will be based on (Profit Growth over 5 years - Y/N / Dividend Yield Over Purchase Price / Dividend Yield Over Current Price). Note that I've included special dividends for FY13 (except for CSE Global)  into the calculations. For Reits, I looked at DPU instead of profit growth.

Dividend Yield Stocks

  • Boustead (Y / 8.4% / 3.7%)
  • CSE Global (N / 6.1% / 6%)
  • Kingsmen Creative (Y / 6.7% / 4.3%)
  • Riverstone (Y / 5.8% / 2.8%)
  • SATS (N / 4.1% / 4.1%)
  • Sheng Siong (N / 4.3% / 3.7%)
  • ST Engineering (Y / 5.3% / 3.9%)

Real Estate Investment Trusts

  • Ascendas India Trust (N / 6% / 5.4%)
  • Ascott Reit (Y / 9.8% / 6.8%)
  • Cache Logistics Trust (Y / 7.1% / 7.1%)
  • Frasers Centrepoint Trust (Y / 6.2% / 5.7%)

Strong Growth Stocks

  • Hour Glass (Y / 3.7% / 3.2%)
  • Capitaland (N / 2.1% / 2.4%)
  • STI ETF (N / 3.4% / 2.5%)
  • Super Group (Y / 2.9% / 3%)

Others (Candidates for Divestments)

  • OKP (N / 0.5% / 1%)

Sunday, July 27, 2014

The Green Tree Prosperity Fund

The what fund..? Haha yes, I have decided to give my own portfolio a name. Just for fun. So henceforth, I will refer to my portfolio as the Green Tree Prosperity Fund (绿树基金). Reference to trees is because I like the fact that trees can grow indefinitely given the right conditions. This is my aspirations for my own portfolio as well, which is to continue growing it long term in a sustainable way. In addition to giving it a name, I will also lay down some objectives and strategies of the fund below.

Objectives of Fund

  • Invest and grow the fund for retirement needs
  • Long term plan to generate sufficient passive income to manage the fund full-time

Investment Strategy

  • Value Investing
  • Be greedy when others are fearful
  • Buy on market dips, sell when valuations no longer justified by fundamentals

In addition, I have identified 3 groups of equities that the fund will comprise to meet its long term objectives:

Portfolio Composition

  • Dividend Yield Stocks (Stable fundamentals with sustainable dividend yield of 5% or more)
  • Real Estate Investment Trusts (Gearing of 40% and below, Sustainable dividend yield of 6-8%)
  • Strong Growth Stocks (Growth in profitability over past 3 - 5 years, Dividend yield of 2-3%)

I am still very far from my long term investment goals. I am also only about 60% vested now with 40% of my portfolio still in cash. I hope to continue investing in a sustainable way to grow my passive income and work towards my long term investment objectives.

Saturday, July 26, 2014

Recent Stock Actions: Super Group

I have been looking at Super Group for sometime. I think it's a fundamentally strong company with good growth prospects. Looking at the company's financials, you can see that it has been growing profitably over the last 5 years. It also doesn't have any long term debt in its balance sheet. It's no wonder that the stock price has been going up to stratospheric levels to reflect it's prospects.

While it's a good company, I have never found an opportune time to enter due to the high valuations placed on the stock. That is until recently, when the stock price has moderated somewhat. I took this window to start a small position in this counter. It's still not cheap by most measures, but I think valuations are more reasonable at this point.

This is a growth stock with some dividends given out. At the current price ($1.50+), dividends translate to a yield of about 2-3%. It's below my target of 5% yield. But I have discounted the acceptable yield somewhat to account for the growth.

I don't actually like the fact that the company issued a 1-for-1 bonus issue recently. This does nothing except to dilute the equity and make the per unit stock price cheaper and more accessible to retail investors.

I will monitor and see how the company fares over the next few years. If stock price does moderate further, I may consider increasing my stakes for a long term position in the company.

Tuesday, July 8, 2014

Getting inspired by design

I have been pretty intrigued by design in the last two years. A large part of it has to do with influences by great designers like Jonathan Ive from Apple and Matias Duarte from Google. Design is beginning to play an increasing part of our lives. It is getting more pervasive, from our gadgets, to the architecture around us, to innovative solutions to everyday problems.

Design goes beyond aesthetics, but examines the fundamental essence of things around us. There is also a methodology of creative problem solving known as design thinking, which uses the way designers think to solve wicked problems (i.e. problems that are generally hard to solve by conventional means).

Now, what has this got to do with investment? As I explore and look at different aspects of design, I begin to see how we can apply design to our everyday lives. Just like how we can design a solution to a problem, we can also design the way we approach investing. There are a thousand and one approaches in investing. One can choose to trade frequently, or hold long term for the intrinsic value, or combine a mixture of either approaches, etc.

For me, designing an investment approach involves thinking about our own philosophies and approach to life. Do we seek a more thrilling and exciting life? Or a more stable and conservative approach. Do we prefer once off capital gains? Or dividends that are recurrent but usually in smaller amounts. As we answer some of these questions about our own preferences, we can design an investment approach or a portfolio that would suit our temperament. This would allow us to have a coherent investment approach that is in sync with our beliefs and lifestyle.

Design is interesting because it allows us to start from a clean slate to design an outcome. And from there develop solutions around the outcome we have in mind. I'm inspired by design, are you?

Sunday, June 22, 2014

Tech Focus: The Jaybird Bluebud X

As a recent evolution of my blog, I have decided to also cover technology that are of interest to me in addition to investment related stuff. My first post on this topic would be to look at a pair of earbuds that I have recently bought. The Jaybird Bluebud X, as seen in the picture on the left.

Development in wireless technology has really gained pace over the past few years. In the past, bluetooth headsets were limited to those single-sided earpiece purely for functional call-taking purposes. The compression and audio quality over bluetooth is just not good enough for any decent music listening.

Fast forward to today, I believe wireless is where the future is. In time to come, other than hardcore audiophiles, I believe most people would not see the need for wired headphones or earphones. As a bit of a geeky and gadget guy, I bought the Bluebud X to see how far wireless technology has come. The earbuds are quite costly (about $170 over Qoo10), but I guess that is the premium to pay for wireless, at least for now.

Wireless is a big boon as it allows me to move around without being tethered to my phone. Being a casual listener, the audio quality is certainly good enough for my ears. The build quality is decent but not something I would be comfortable to abuse to test out its ruggedness. While it's supposed to be waterproof, I use it mainly in the office for easy listening. Battery life is good and rated at about 6-8hrs. I have not exactly tested it out for duration of use, but at least I don't feel I have to keep charging it.

My only qualms with the earbuds is that they do not really fit snugly in the ears. This could be due to the size or fit of the silicon buds. I read from online reviews that getting comply foam buds would help, although those are quite expensive for what they are. I may consider down the road.

All in all, I think the earbuds are great for non-critical listening. Wireless is where we are heading, and I am sure the technology would mature with prices coming down with improved audio quality over time. Do consider the Bluebud X if you are considering a pair of wireless earbuds. The waterproof earbuds would also come in useful if you intend to use them for running, though not something I have tested out myself.

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