My Investment Portfolio (October 2010)

STI gained further ground this month as it closed above 3100 points. However, due to the lack of corporate results this month, most of the attention had been focused on IPOs, in particular mega ones like GLP and MapleTree Industrial Trust. I didn't participate in any of these IPOs though as I have decided to focus my attention on purchasing value stocks for my portfolio in order to position it more defensively as the market continues to scale new heights.

For my top 30 stock holdings, there are not much changes this month except for a new entry - Ascott REIT. I have added to it due to its rights issue and I have also applied and allocated some excess rights shares as well. I am quite familar with the Ascott brand as I was a former shareholder of Ascott Holdings before it was taken private by CapitaLand. Its rights subscription price was attractive and I like its portfolio of service residences.

For this month, I have accepted the delisting offer for Hyflux Water Trust as its delisting resolution had been approved by unitholders. The proceeds from the delisting offer will come in handy for some rights issues next month. I have also participated in the following scrip dividend schemes - DBS, Jardine Strategic, UOB and United Overseas Australia.

I have bought the following companies from the open market this month - Allgreen Properties, Aspial, Bright World, Chosen, Hong Fok, Hotel Royal, Kian Ho, Koh Brothers, Lion Teck Chiang, MCL Land, MI Tech, Nobel Design, PCA Tech, PSC Corp, Sing Holdings, Singapore Reinsurance Corp, Superbowl and Tye Soon. I have also subscribed to the following preferential/rights issues - AIMSAMP REIT, China Healthcare, Ezra Holdings, Federal, MapleTree Logistics Trust and Sinwa.

I have converted the following compay warrants to shares - Asia Water, EcoWise, Ellipsiz, Hai Leck, Tee International and Viking Offshore And Marine. I have also attended three AGMs this month - Singapura Finance, HMI and Creative Technology.

With only two months to go for this year, I guess I have more or less met the objectives set out at the start of the year - i.e. position my portfolio more defensively and add onto it consistently every month regardless of market movements. So far, I have done only one sell trade for this year and that can be said to be a "forced" one as Sunway International was delisted from SGX without an exit offer. Other than that, I have more or less stick to my strategy. I do not forsee much changes to this strategy for the remaining two months of the year.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 29 October 2010)

Top 30 Holdings (Sing$ Denominated shares)
1. Noble Group
2. SGX
3. Jardine C&C
4. F&N
5. SembCorp Marine
6. A-REIT
7. KepLand
8. CapitaMall Trust
9. Bukit Sembawang Estates
10. Hersing
11. Viz Branz
12. Cosco Corp
13. K-REIT Asia
14. CapitaLand
15. Transpac Industrial Holdings
16. CapitaCommercial Trust
17. CDL H-Trust
18. OSIM International
19. Wheelock Properties
20. CitySpring Infrastructure Trust
21. Raffles Education Corp
22. Pacific Andes
23. Genting Singapore PLC
24. Low Keng Huat
25. Ascott REIT
26. Ascendas India Trust
27. Hong Leong Finance
28. Keppel Corp
29. OCBC Bank
30. ComfortDelgro

Top 5 Holdings (US$ Denominated shares)
1. Jardine Strategic
2. Dairy Farm
3. Hong Kong Land
4. Jardine Matheson
5. Mandarin Oriental

Top Holdings (HK$ Denominated shares)
1. Fortune REIT
2. Tan Chong International

Top Holding (Aust$ Denominated shares)
1. AV Jennings
2. AustLand PG

Top 5 Holdings (CPF OA investment)
1. Keppel Corp
2. Streettracks STI ETF
3. CapitaMall Trust
4. A-REIT
5. SingTel

My Hong Kong Stock Portfolio (listed on SEHK)
1. Peace Mark Holdings

My Unlisted Company Portfolio
1. Automated Touchstone Machines Ltd
2. Iconic Global Limited
3. Greatronic Limited
4. China Printing & Dyeing Holdings
5. General Magnetics
6. Fastech Synergy
7. Beauty China
8. Memory Devices
9. Jurong Tech
10. FM Holdings

My Unit Trust Portfolio:
http://www.fundsupermart.com/main/community/Portfolio_View.svdo?id=P199

'alpha' and 'beta' - Analog Electronics and Portfolio Management

I remember during my poly days that one of my favourite subjects had been Analog Electronics. And the study of BJT (Bipolar Junction Transistor) bring much insights to me when managing my investment portfolio. Yes, transistor equations are quite complicated sometimes, but the basic concepts are quite simple to understand.

One of the basic concepts in transistor theory is DC basis, which analyzes the BJT when it is operating in DC. And to measure DC efficiency, we often use 'alpha' and 'beta', which is basically the ratio of DC collector current over emitter current and the ratio of DC collector current over base current respectively. 'beta' can actually varies widely while 'alpha' is almost equal to one in most cases. By looking at 'alpha' and 'beta', we can actually have an idea of whether the BJT is operating normally or not. We can then do the necessary adjustments to the design of the BJT to correct its mode of operation.

In investment portfolio management, we also need to understand 'alpha' and 'beta'. In fact, the key to successful portfolio management is to manage 'alpha' and 'beta' plus the other greeks well. When we add stocks into our portfolio, we need to have an idea whether we are adding it for 'alpha' or 'beta'. If let's say I think the market will be volatile and will go up, I might want to have more 'beta' in my portfolio. If that is the case, I will add more volatile stocks like NOL, Genting S'pore etc into my portfolio so that my portfolio will track the market up. However, if I am not sure about the market and think that there might be more risk of a downturn, I will want to add more 'alpha' into my portfolio by adding stocks like Bonvests, Hour Glass etc to protect my downside risk since these stocks don't actually track the overall market well. In either case, it is not about consistently buying and selling stocks to manage one's portfolio, but rather to adjust the "design" of the portfolio to reflect its risk profile with respect to your market outlook and investment objective.

My investment portfolio is my BJT transistor. 'alpha' and 'beta' are my indicators to make sure that my transistor is operating normally.