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Thursday, June 30, 2011

My Investment Portfolio (June 2011)

June 2011 was another quiet month. Volume was low and STI ended the last day of the month on a high note. On the news front, the usual suspects like Greek financial crisis, US economy etc. I think I have mentioned a lot of times already and I shall stop here.

To my surprise, though the market moved in a tight range, there are some changes in my top 30 holdings. New entries include PSL Holdings, Bonvests, The Hour Glass, Sarin Technologies, Portek International and Aspial. I added onto Bonvests and The Hour Glass this month but the rest are really due to price appreciation.

I have bought the following companies from the open market this month using mostly funds from the dividend cash drag collected in May - Bonvests, Casa Holdings, CDW, CH Offshore, Challenger, Chemical Industries, Colex, Frencken, Heeton, Hotel Grand Central, The Hour Glass, Intraco, Jason Marine, JLJ Holdings, Khong Guan, Kian Ho, Lion Teck Chiang, MacCook PSF, Megachem, MSC, Multi-Chem, OUE, Oxley, TSH Corp and UIS. I have also subscribed to the following rights issues/preferential offers - Ace Achieve, Contel and Olam.

I have participated in the following scrip dividend schemes - Hotel Grand Central, OCBC Bank, Orchard Parade, QAF, SP AusNet, Tuan Sing and UOB. I have also accepted the following takeover/delisting offers - Allgreen Properties and EDMI.

Next month, I will continue to spot value stocks for investment. Going forward, I will be holding some more cash for emergency purposes as I have tendered my resignation and will embark on my journey as a full-time investor soon.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 30 June 2011)

Top 30 Holdings (Sing$ Denominated shares)
1. Noble Group
2. Jardine C&C
3. SGX
4. SembCorp Marine
5. F&N
6. A-REIT
7. Bukit Sembawang Estates
8. CapitaMall Trust
9. KepLand
10. PSL Holdings
11. OSIM International
12. Cosco Corp
13. Bonvests
14. K-REIT Asia
15. Transpac Industrial Holdings
16. The Hour Glass
17. Sarin Technologies
18. Portek
International
19. APB
20. Singapura Finance
21. Hersing
22. Keppel Corp
23. CapitaCommercial Trust
24. VICOM
25. CDL H-Trust
26. Metro Holdings (Note: Bonus shares yet to be credited)
27. ABR Holdings
28. Wheelock Properties
29. OCBC Bank
30. Aspial

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 Holdings (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. Challenger Technologies

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

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34 Comments:

Blogger athulican said...

Congratulations GH!

Finally leaving Engineering for good! All the best to your investment journey!

8:31 AM  
Blogger ghchua said...

Hi athulican,

Thanks for your best wishes.

Indeed, it had been a very tough decision and I had been considering it for quite some time. I have also asked myself what have I achieved so far in my full-time Engineering job as compared to my part-time investment adventure.

Eventually, the answer becomes clear. My portfolio had grown to a certain size whereby the opportunity cost of not managing it actively is quite high. By managing it actively, I meant attending AGMs, research on companies, reading annual reports etc. I could no longer afford to do it on a part-time basis.

Will I leave Engineering for good? I dunno yet. I might still continue on a part-time/freelance basis. I haven't firm up my plans yet, but I will certainly be doing full-time investing for a while :)

10:16 AM  
Blogger ZhuKoLiang said...

wah... early retirement? portfolio sufficient ?

6:14 PM  
Blogger JTK said...

Hi ghChua

Becoming a full-time investor is a brave decision because you will lose the major source of income. However, I think investing can be done for the rest of your life but I doubt the engineering job can.
When we grow older, investing skills may be more valuable and applicable.

I wish you success and good luck with your full-time investing.

By the way, what is your view on Standard Chartered online trading account which has no minimum commission?

Cheers

10:57 PM  
Blogger Wealth Journey said...

Congrats ! :)

You must have thought thru' it and I know it is not an easy decision to make.

11:30 PM  
Blogger Everlearning said...

Hi ghchua,

I have always wondered how you could find time to manage your super-sized stocks portfolio with a full-time job.

Ultimately, you have to make a choice and not "I have no choice".
Just teasing.

Looking forward, will you post more interesting and exciting write-ups of your investment journey?

12:02 AM  
Blogger David said...

Wow, i think it is not an easy decision but I must say you have been very successful in both engineering and investments.
Congrats ;)

1:46 AM  
Blogger ghchua said...

Dear all,

First of all, thanks for your wishes. Of course, I will be very happy to continue with my current mode of operation if my Engineering job takes up only 8 hours of my time per day. Unfortunately, this had not been the case lately and will not be the case going forward. I was working late everyday and was too tired to do anything else. Of course, if I find that I could not sustain full-time investing after sometime, I will go back to full-time employment. It is not a case of do-or-die but rather trying out different stuff. Investment is also not totally new to me as I had been doing it for more than 10 years now.

Hi JTK,

The Standard Chartered online trading account is actually a nominee/custodian account. Your shares will not be stored in CDP and you will not receive any circulars or annual reports from the company. For corporate actions like rights issues etc, you have to apply through them and not CDP/ATM. So, you have to gauge for yourself whether you are comfortable with that, in exchange for lower minimum brokerage.

3:29 AM  
Blogger ZhuKoLiang said...

hello shifu,

how many years have u been in this job so far?

(if many years, then very painful if quit)

8:58 AM  
Blogger noble said...

Hi GH:

Do you mind to tell us your age and are you married with children?

I m also an engineer and in the early 30s. I m married n no children yet. I wonder how to build a sizeable portfolio coz the pay for engineer is not super high. I m current holding a senior position in my company but after all the expenses like house n car, the maximum i can invest is only 50% of my salary.

You are right, i m also working like a dog almost every day... Until at one point i feel like want to quit!

Do you mind to enlight me? I wish to learn from u. Thanks.

9:08 PM  
Blogger ghchua said...

Hi newbie_george,

I have been in this job for more than 11 years.

Hi noble,

I like your nick, reminds me of my top holding, Noble Group and West Ham Utd midfielder Mark Noble. :)

I am in my late 30s, single. But I do have expenses every month as I need to pay for my granny's nursing home fees, support my parent who is not working etc. Nursing home charges are not cheap. These are fixed expenses and they didn't go away even when I quit my day job.

Building a sizable portfolio doesn't happen overnight. I takes time, effort and commitment to remain vested despite market volatility. It also takes discipline to research on companies, attend AGMs etc. If you had been following my blog for sometime, I have detailed my actions in the market every month. It is no magic but hard work.

But one difference is that with full-time investing, I am in control. I have no boss to report my status everyday (sometimes, there is even checkpoints every 2 hours!) and I do not have to manage IT contractors. I can decide what I want to do everyday and my hours are flexible. I can go for a jog three times a week etc.

Yes, I will suffer a huge drop in income so that is one point that you need to consider seriously. Also, I will not have a fixed pay and I have to manage my cash flow every month carefully to match my inconsistent dividend payout.

I have considered all these before making my final decision. It is not an easy decision but it is not hard either if you are prepared and know what you are getting into.

9:26 PM  
Blogger Sanye said...

Hi Shifu,

All the best in your new job as full time investor.

Do share your experience with us for the benefit of those who aspire the same.

Sanye

7:55 PM  
Blogger cif5000 said...

Will there be any change to your strategy (other than holding on to more cash)?

8:54 PM  
Blogger ghchua said...

Hi cif5000,

In Engineering, we have one "golden" rule to follow - If it aren't broke, don't fix it. :)

I guess going forward, my strategy would be more or less the same but I might consider using leverage if I spot a good investment opportunity. After all, I will not have consistent income every month and if there is a good opportunity, I might want to go for it using OPM. (aka Other People's Money)

I still haven't do a detailed analysis on my portfolio so I can't comment on what changes I will do to it going forward, but I am happy to leave it as it is at this moment.

10:42 PM  
Blogger edragon said...

This morning I bought Aberdeen Thailand Equity Fund as it has dropped some 26% since 3 weeks ago. Yesterday, the opposition parties won a landslide victory so I think it is a positive event. What do you think about this investment?

2:36 AM  
Blogger ghchua said...

Hi edragon,

I can't comment about individual fund without looking at your portfolio. Are you buying this fund because of speculative short term bet on election results or are you investing in the long term as part of your asset allocation in your unit trust portfolio?

3:00 AM  
Blogger ZhuKoLiang said...

hi shifu,

leverage as in ?

What is other people's money?

6:16 AM  
Blogger edragon said...

Hi GH,

I used to invest for the long term until the financial crisis changed my mind. This investment in Aberdeen Thailand is just too good to pass. It may end up being long term depending on how Thailand as a country can agree to their future and I am more on the positive. Their fundamentals is good, as good as Indonesia.

7:55 AM  
Blogger ghchua said...

Hi newbie_george,

Leverage simply means any technique to multiply gains in finance. OPM or Other People's Money means using borrowed money.

Hi edragon,

Financial crisis doesn't change my mind on long term investing. In fact, it re-emphasized the fact that long term investing works. Look at how the markets recovered after the crisis. If you are willing to hold for long term, you have a higher chance of success.

I don't time the markets and therefore I can't advise you on short term events. However, what I want to say is to have an asset allocation plan in place. With that, at least you have a road map of what you are going to invest and how much to put in. Have a core portfolio that is well-diversified for your unit trust investment in place first, before you try to "bet" on single country funds in the speculative pot. It is ok to speculate, but make sure that you limit yourself to x% of your portfolio.

10:58 PM  
Blogger Sanye said...

Hi Shifu,

What do you think about the KS Energy offer? Is this a done deal? Shall we accept the offer?

8:11 PM  
Blogger ghchua said...

Hi sanye,

I will only accept the offer for my KS Energy warrants. As you might already know, those warrants are out of money and it has a life span of less than one month. Although the offer price for the warrants is miserable, but I would just take whatever they offered rather than let it expire worthless.

I will continue to hold onto my KS Energy shares.

9:21 PM  
Blogger Sgbluechip said...

Yo bro, congrats! I will also be leaving my job when my portfolio hits $1M for my dream relax lifestyle.

Hmm, you are retiring slighly earlier than the target 45? Paiseh, I a bit kaypoh, have you passed the seven digit mark on overall portfolio?

SBC

3:54 AM  
Blogger ghchua said...

Hi SBC,

It was "forced" retirement if that is how I would like to put it. I was not happy working in my current company and I asked myself - Why not try something else? I would be happy to carry on if I was happy to be hanging around.

In the end, it was a big struggle to make the decision. I was thinking of looking for another job, but I thought maybe I should try out investment full-time first. If I fail, well, I can always find another job. :)

Yes, my portfolio size is a seven digit one. I wouldn't have made this decision if it was six digit or less.

8:48 PM  
Blogger Sgbluechip said...

Noted bro. I expect your ROE to be in the teens region that gives you a good $10k per month tax free returns.

All the best, exercise more, find a relaxing part time job to stay in touch with society and post more often!

7:07 AM  
Blogger ghchua said...

Hi SBC,

Thanks for your best wishes! :)

10:46 PM  
Blogger faith said...

Hi ghchua,

May I know why you have removed First Reit from your portfolio and why haven't you considered including Cambridge Ind Trust to your portfolio? Thanks a million!

5:06 PM  
Blogger ghchua said...

Hi faith,

I didn't remove First REIT from my portfolio. It is still in my portfolio but outside my top 30 list.

Yes, I do hold Cambridge Industrial REIT but it is also outside my top 30 list at this moment as well.

Do take note that what I have presented here at my blog is my top 30 holdings list in my portfolio in terms of its market value. It doesn't mean that I only hold these 30 stocks in my portfolio. Hope that it clarifies.

8:28 PM  
Blogger faith said...

Hi ghchua,

Is it advisable to concentrate one's investment on value stocks or reits that reap high dividends, which grow faster? How do value investor earn passive income if they kept reinvesting their dividends and not selling their stocks? Do you think the US debt would adversely affect SGX stocks?
Are telco stocks safest to invest?

11:22 PM  
Blogger ghchua said...

Hi faith,

Personally, I like to have everything - Growth, value, dividend, REITs, special situations etc in my portfolio. There is a season for everything out there and they will outperform one another in different market conditions. The key thing is how much to allocate to each of them? It really depends on each individual and their ability to take risk.

Don't confuse value stocks with dividend stocks. Some value stocks don't give or give little dividend. A value investor buys a stock because he thinks that it trades below its intrinsic value. If you are very strict about it, dividend is not a main consideration of a pure value investor.

Selling stocks is based on your investment objective. If one is working, then obviously he/she can afford to re-invest dividend back into the portfolio. If he is a retiree, then of course he might not be able to re-invest the dividend or even need to draw down his capital. I am not a pure value investor, as I manage my portfolio based on my investment objective, and I will look at my portfolio as a whole to determine which stocks to sell if need be.

I don't like to comment on issues like US debt, Euro debt etc as you can read them in the news. But since you asked I will just make this comment - US is too big to fail, and other countries have vested interest for it not to fail. :) Yes, US debt issue will have short term effect on SGX stocks, but I am not interested in short term market movements.

What I am interested in is the fundamentals of the company that I invested in. I believe that it is more fruitful to be focused on companies themselves rather than second guess govt policies. The key, as I have stressed a lot of times here is to have a long term investing mindset. Ignore short term noises.

Telco stocks are good cash cow for investors as most of them have good operating cash flow due to their stable customer base. I can't say they are the safest sector, but what I can say is that it is a defensive sector.

7:44 AM  
Blogger faith said...

Hi ghchua,

Thank you very much for your very enriching comments. The stocks you picked have very good and sound fundamentals. However, I could not tell which of them are trading below their intrinsic value. Care to enlighten? Did you get stock knowledge from books or seminars? Thanks.

4:54 AM  
Blogger ghchua said...

Hi faith,

Intrinsic value of a stock can be estimated by various methods. You can search the internet or read some investment books and they will provide you with some methods like DCF etc. But intrinsic value varies between different people even if they use the same method to compute. This is because of the different parameters/assumptions that they put into their financial models.

Personally for me, I don't have a fixed intrinsic value for each stock in my holding. I roughly know what is the range of value a company is worth and I will buy if it falls below that range. But of course, managing a portfolio is more than just to know the value of each stock in your portfolio. Diversification minimize the risk of one making a mistake if he/she estimates wrongly the intrinsic value of a company. Therefore, asset allocation is also very important - i.e. determine how much allocation you want for that stock with respect to your whole portfolio value.

I got my stock knowledge from various sources - books, newspapers, internet, networking, results briefing, AGMs, seminars, conferences etc. There is no shortcut to be a successful investor. You have to be hardworking, patient, humble and savvy. You have to also keep your ego in check and don't get too over-confident when things goes well. Also, don't lose your faith when things are not going well.

Hope that the above helps.

10:15 PM  
Blogger Ben said...

Hi Ghchua

I note that you have been a full time investor for about 2.5 years.

It will be great if you could share on some of your insights being a full time investor. What are the factors (such as minimum accumulated warchest etc) one should consider before embarking on the journey as a full time investors?

Thanks.

Ben

6:18 AM  
Blogger ghchua said...

Hi Ben,

Minimum accumulated warchest is very personal and it really depends on what are your expenses every month. But if you ask me, personally I would say that anything less than $500K is very risky. You have to plan for market downturn so that your portfolio can sustain for very long period.

Unless you are trading in and out frequently (which I don't), you need a decent capital to start with. Also, try to do an estimate so that based on your capital, how much dividend you expect to get every year. You don't want to be in a situation whereby you need to sell your stocks just to pay for your monthly expenses.

Of course, there are other factors like interest, hardwork, patient, humble, savvy etc. I have seen very successful investors and they are very humble. Most investors I met during AGMs are not really full-time investor in stocks. Some have other business and investment in property, futures, currency etc.

Therefore, you must also know what you wanted to invest in. For me, I only invested in stocks.

7:20 PM  
Blogger Ben said...

Hi ghchua

Thank you for your valuable opinion. For me, my investment will be in stocks. As such, it will more or less make my decision.

All this while, I am contemplating on whether I embark to be a full-time investor. Age is catching with me and I feel that I need to make a decision on it. Work is so far fine for me. Of course, I can still work for a few years to build up more warchest just to be sure.

Ben

3:16 AM  

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A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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