Stock portfolio finally back in the green amidst the year of Covid

Previously, i had to manually remember dates for the release of company financial reports, and most of the time i do missed it, but with the SGX mobile app, after adding stocks into my favourite list, and pressing the alarm button on the top right, i am able to get very timely notifications and it has been hassle free since then.

This week, many companies which i have invested, have released their financial results, i would say it is a mixture of good and bad results.

The commentary section at the last of the financial report is one of the most important aspect that every investors should look out for other than the figures. And covid19 is mentioned in most if not all of the listed companies.

This is a very important period for investors, as we are able to see firsthand how the covid 19 has financially impacted the listed companies.

Before the covid striked, the portfolio at it’s best this year was about +5% in Jan/feb, and at it’s worst about -18% in April/May.

This is my first time experiencing a black swam event, and i think as a value investor, i made some bad decisions, by selling some of my stocks at the lowest.

Here are some of my thoughts back then, the stock market was getting more and more expensive, there were very minimal good value stocks, and thus i was looking at some of the more conservative growth stocks, for value stocks, most companies are the kind where they are largely unheard of, at least for me, while the big names very seldom appeared in the value stocks screening, so at the first quarter of this year, i purchased some big names whose price was beaten down, like Great Eastern, brought at about $22 and sold at $17.70, hong leong finance brought at $2.65 and sold at $2.2, terrible timing to sell back then when everyone was very pessimistic.

And i have since constantly reminded myself to be greedy when most people are fearful and fearful when most are greedy. It was a good opportunity to know myself better, and the kind of conviction which i had, or believe i had.

As a value investor, i am skeptical of many things, and the stock market always seems like it is overly optimistic, or a wild swing into overly pessimistic mood, the rapid sell down and the rapid rise back of the US markets is a strange sight to behold.

As a value investor, buying is the easier part, while selling is the hardest, the portfolio reached an all time high NAV of $1.585 in end of 2017, since inception in start of 2015, with a CAGR of 16.72%, Sunright exploded that year, and contributed to most of the portfolio gains, then Sunright slumped down back to the recent low of $0.375, i did’t sell anything when it was on it’s way up, and also not on it’s way down, it contributed greatly again to 2018 portfolio returns this time negatively, the worst results of all time at -14% for that whole year. Sunright continued to be the third largest holding of the portfolio, after cash portion and Multi-chem. i have sold off a little bit this year to re balance the portfolio.

Next on to Multi-chem, the whole portfolio is in green at 0.87% gain despite of all the mistakes that i made this year, after it rises an amazing 75% since the start of 2020 including dividends given. I purchased it in 2016 in the range of $0.475 to $0.555, and it is the largest holding of my portfolio.

There were a lot of mistakes made in the selling part this year, and a little bit of trading in and out of the market when the prices rise or fall drastically in a short period of time, and it did not ended up well, selling stocks for a small profit and watching it rise and rise. All in all, the selling made in this year has been bad, but the buying was good, a lot of stocks purchased this year in the first/second quarter has risen well.

There is still 4 more months to go before 2020 ends, and a lot of things can happened in a short period of time, the portfolio will most likely go back to the red again, i am aiming for a 5% to -5% range, and the whole stock market can tank again, though Singapore stock market has not recovered yet and is now around -17.5%. It is a good time to invest in the STI ETF at $2.594 with a timeframe of 5 years and beyond.

The stock market is a voting machine in the short term, but it will always revert back to a weighting machine in the long term, company by company. It can be kind of silly trying to justify and interpreting everyday market movement, why this stock went up, why this stock went down, there will always be a reason for it, if you cast your net as wide as possible, and getting people to speak the reason that you want, for recognition, fame or fortune.

“But as long as the music is playing, you’ve got to get up and dance.” Especially so when your job and income depend on the daily movement of the stock market.

But for the retail investor, we are reminded by the sage of Omaha. “The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch.”

Avoid things that you do not know, avoid the hype, understand yourself, find out what kind of investor you are and stick to your circle of competence.

Stay safe, and hope everyone avoid over leveraging, and also do not put your eggs in one basket.

“A rising tide floats all boats….. only when the tide goes out do you discover who’s been swimming naked.”

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