2020 has been so insane that I don't even know where to begin.
From Covid initial discovery in China, lockdown of Wuhan, first case in Singapore, us first being hail as the gold standard, the global pandemic, outburst in dormitories, the Circuit Breaker and now "on the road to recovery".
Everything happened so fast and it's been one hell of a rollercoaster - the market saw it fastest collapse in history where it took a mere 16 days to reach Bear Market. I could not believe my eyes when I saw blue chip companies and REITs with strong fundamentals (capitaland, mapletree) collapsed >10% overnight.
The crash was so dramatic it shook me to the core - at one point I almost capitulated emotionally (I had to ignore all daily portfolio updates). At its trough, I was down almost $80K. Thankfully, logic won in the end and I manage to persevere. As of end June, I've recovered $50K. Still, this thing is far from over and theres no telling if my portfolio can recover fully or plummet back beyond March's level.
It is always easy in hindsight to make comments like "you're so lucky to encounter a crash of a lifetime and buy big". Well, after this episode, I'll say someone deserve it if he has the guts to.
No amount of fancy charts and complicated tables assuring me that since 1939, the markets always recovered after dropping a single day of 10% can help you. No amount of Warren Buffett quotes that the markets always recover, belief in innate humanity in each of us to work towards a better tomorrow, etc... can hep you.
You must have that unwavering conviction. All the logic can do is only appease the mind, but not the the heart when your portfolios is tanking.
"All I could think of was my portfolio going to zero and getting a margin call from the broker to tell me that I had wiped out my account. There can’t be a recovery, if there is nothing left in the pot."
This is why I neverinvest with borrowed money.
In 6 months, we've seen numerous bankruptcies and layoffs, plus the fraud of Luckin Coffee ($50 to $3 in months), the collapse of Wirecard (once the pride of Germany), how Hertz stock can go up 300% after filing for bankruptcy.
Closer to home, I suffered badly at the hands of Eagle Hospitality Trust (painful and valuable lesson, that the integrity of management matters more than whatever assets value they show on balance sheet). We also see blue chips like Comfort Delgro, SATS and SIA being decimated by the Circuit Breaker.
Performance Review Highlights / Acquisitions & Developments
We took massive action during the crash, dollar cost averaging 4 times into STI (spending over $40,000). brought Capital Comm Trust (at an insanely cheap price, partly to avoid odd lots after merger), DBS (long-term holding), and Accordia Golf Trust (on news of acquisition, which is now confirmed).
We took massive action during the crash, dollar cost averaging 4 times into STI (spending over $40,000). brought Capital Comm Trust (at an insanely cheap price, partly to avoid odd lots after merger), DBS (long-term holding), and Accordia Golf Trust (on news of acquisition, which is now confirmed).
The 2 biggest event in our portfolio was the suspension of EHT (managers and sponsor are now accusing each other of all sorts of shenanigans, facepalm) and the demerger of SCI and SCM.
SCI, EHT and Kimly now stands as the 3 biggest bleed in my portfolio.
On reflection, what would I have done differently and what mistakes did I make?
SCI: If I have to think of an excuse, it would be a combination of bad luck and blind faith. I still believe the utilities business is defensive, but who would have thought oil would crash to $20 and at one point of time even went negative? I also had faith on its status as a Temasek backed company, but SCI could have easily been Keppel. In all, Temasek-backed only "ensure" the company doesn't go broke, but it doesn't mean you won't lose money (they can always issue cheap rights and have Temasek underwrite it).
Kimly: Greed. Over-focus on its "defensive" business as a coffee shop, not realizing that it's still subject to market forces (competition from food court, increasing cost of foreign labour). And of course, as a smaller cap, there is always the chance of governance issues.
EHT: I already knew it was largely gambling and speculation when I first brought into it. I knew insiders were selling cheap even at 50cents and the problems of Queen Mary - but the dirt went far deeper than I thought, to the point of outright fraud. Covid was the last straw which broke the camel back. We really need to stick with reputable companies
There were little chance I could have avoided these 3 companies. What I could do better is to manage my asset allocation so I did not invest as much in speculative positions.
Operating Highlights - Income
Income grew around 15% due to higher bonus (record high) and higher salary (unexpected promotion). Dividends were largely in-line with last year.
Received a decent amount of "SG Package" which was used to offset certification exam.
Operating Highlights - Expenses
Expenses were much, much lower (from $9800 to $7100) especially in Q2 thanks to the Circuit Breaker. That's $2700 lesser than less year!
No big expense except for a Mayday concert ticket (which was postponed to next year)
Operating Updates
With the massive cuts to interest rates, banks deposits are no longer attractive (you can only get the same if you satisfy the difficult conditions of DBS Multiplier).
We decided to move out from CIMB (0.5%) to Singlife (2.5% for first $10k, 1% for subsequent).
Passive income from bank interests will be greatly reduced this year and fall even more next year once my CancerCare plan hits 12 months.
Outlook
The good news this term is the launch of several low cost brokers - Tiger Broker and IBKR (Singapore). I figured once the DBS Multipler 3 tier interests is up at year end, I will start diverisfying into overseas stocks. Singapore old economies will no longer do.
Outlook
The good news this term is the launch of several low cost brokers - Tiger Broker and IBKR (Singapore). I figured once the DBS Multipler 3 tier interests is up at year end, I will start diverisfying into overseas stocks. Singapore old economies will no longer do.
I will most likely tap on IBKR (Singapore) for IWDA and certain China stocks like Tecent if I could not find a good diversified China ETF then.
Humanity’s progress has never been smooth. There are always things to worry about. But tomorrow will be a brighter day.
