Portfolio Update Nov 2020

From Feb to Mar 2020, the bloodshed in the stock market has saw more than 20% of equity value wiped off my portfolio. See related posts: 

Portfolio Update Feb 2020 - Bloodshed Edition

Portfolio Update Mar 2020 - SRS Ultra LT Portfolio Revealed!

8 months later after hitting the lows, my portfolio values have hit record highs even though there is a correction today.

Share prices recovered much faster than the pace of economic recovery. As always, the stock market is a leading indicator of investor sentiments of business prospects and the economy but it is not the economy. We cannot wait until economy is prosperous before we invest our monies. We should not time the market but invest continually in all market and economic conditions.

My portfolio value increases $20k to records high of $220k with capital injection of $6k in Nov 2020.

Portfolio Actions

1. Gotten 2,400 shares of Mapletree Logistics Trust at preferential offering price of $1.99

2. Added 703 shares of Capitaland Integrated Com Trust between $1.73 and $2.01 using the free brokerage for odd lots promotion by Phillips POEMS

3. Sold 4,000 shares of SATS at $4.32 in SRS portfolio

4. Sold 3,500 shares of Mapletree NAC Trust at $0.935 in SRS portfolio

5. Bought 3,000 shares of Keppel DC Reit at $2.88 for SRS portfolio

Portfolio Dividends

1. Received $107 from a $10k Singapore Savings Bond on 2 Nov

2. Received $311.22 of cleanup distributions and dividends from Capmall Trust prior to merger on 19 Nov

3. Received $256 of cleanup distributions and dividends from Capcom Trust prior to merger on 19 Nov

4. Received $270 of dividends from Guocoland on 19 Nov

5. Received $92.40 of dividends from Suntec Reit on 25 Nov

6. Received $458.70 of dividends from Mapletree Com Trust on 27 Nov

Thanks for reading.

With love & peace,

Qiongster

SRS Portfolio Rebalancing - Sold Mapletree NAC Trust to nibble Keppel DC Reit

After selling SATS yesterday, I continue to perform a minor shakeup in my SRS ultra long-term portfolio.

I disposed Mapletree Nac Trust at breakeven to initiate a new small position in Keppel DC Trust at $2.88, which yields close to 3.5%. It was not executed at the best timing because at the time of writing, the share price has weakened further to $2.84 but nonetheless, I will consider averaging down when it hit my next target below $2.67.

Mapletree Nac Trust was a short term punt using spare SRS funds that did not turn out well. Bought at poor entry price of 0.95, after factoring in dividends of 2 odd cents, I only managed to breakeven at 0.935. Its exposure to Festive Walk Mall on Hong Kong require extensive portfolio diversification into Korean commercial properties by the manager in order to neutralise the negative effect of political unrest and Covid health pandemic impact on retail in Hong Kong and China. I have decided to get out of the exposure to North Asia retail and commercial scene for the time being while building up resilient assets owned by Keppel DC Reit with long Wale and annual rental escalation riding on the waves of cloud computing and emerging data technologies.

Thanks for reading. 

With love & peace,

Qiongster

Sold SATS

The share price of SATS (SGX:S58) has climbed from the lows of $2.50 to above $4.30 today, fueled by recent dramatic news of vaccine, potential increased travels and flights in the short future. 

I own 4,000 shares of SATS in my ultra long-term SRS portfolio at an average cost of $4.30 and $4.22 after lessing off the dividends collected in past 2 years.

I sold them all off at $4.32 today at slightly more than breakeven, avoiding the possible hefty loss of more than $7k if I had cut loss in Mar 2020.

From my SRS account as of 23 Nov 2020, SATS share price was 4.08 before further run ups of SATS share price to above my holding cost on 24 Nov 2020.

Why did I change my mind on a long term investment and decided to sell SATS?

1. No dividends in short term

SATS was a great company with strong balance sheet and consistent income producing power in its pre-Covid days. It duopolizes the gateway services and flight food catering businesses in Changi Airport together with DNATA. However, this Covid health pandemic has given a wake up call to mankind and casted a huge impact to the travel and aviation industry. SATS has lost its earning power and monopoly in several airports in Asia, including the Changi Airport, and will be burning cash to sustain its business operations for at least the next 2 years. Flights will not resume to pre-Covid days anytime soon and SATS has already suspended payment of dividends to shareholders in this FY. I do not foresee SATS being able to pay more than 5 cents of dividends in FY2021 and more than 10 cents of dividends until at least FY2023. My primary objective of investing in SATS is for long-term consistent passive income with expectation of more than 15 cents from SATS annually. As this objective could not be met, SATS no longer fulfill my investment criteria. To make matters worst, equity fund raising is definitely an option for SATS to manage its cashflow well.

2. Loss aversion bias

Due to dollar cost averaging consistently since 2018 using SRS funds to invest in SATS, my holding cost of $4.30 is rather high with low margin of safety. I have been sitting on paper losses since the onset of Covid health pandemic grounding flights and the aviation industry. Sitting on huge paper losses of up to $7k at times in Mar and May 2020, my loss aversion bias generates more satisfaction from avoiding the $7k loss than holding out long term for another $7k potential capital gains. Based on technicals and fundamentals, the probability of SATS' share price running up to above $5 is lower than than it correcting back to below $4. Selling now is an escape chance for me to free up my capital and recycle into other businesses with higher potential returns in the short to long term.

3. Harsh reality

Even though flights will slowly resume, the capacity is much reduced. In Singapore, there is lack of domestic travel and international travel has been crippled severely. Vaccine will take time to be given to most people in the world. Stringent travel restrictions will continue to hamper travel possiblity between countries. Air Travel bubble between Singapore and Hong Kong has hit a major stumbling block due to fourth wave of Covid spread in Hong Kong, and face the disappointing possibility of being abandoned.

Even though SATS has diversified its business away from aviation, such as providing food & beverages catering for events, managing cookhouses in SAF camps, cargo handling etc, more than 80% of its revenue will still be derived from air travel due to its core business in providing gateway services and food catering for flights.

In conclusion, I am out of the waiting game for aviation industry. I am taking my money back to open up my investment options in other resilient industries perhaps technology or healthcare instead of incurring the opportunity costs of waiting for the full recovery of the aviation industry. When the opportunity arise for me to invest in SATS again, I would do so again. However, there are plenty of choices now to grow my wealth at a faster rate. Thanks for reading.

With love & peace,

Qiongster

Net Worth Update Nov 2020

My net worth increases $13k to $992k from Oct 2020.

It is another stride towards SGD 1 million.

I injected around $6k to buy Capitaland Integrated Com Trust and subscribed to Mapletree Logistics Trust's preferential offering shares this month.

The vaccine news and post US Presidential election news have indeed propelled many stocks and Reits in my portfolio, contributing to my net worth growth.

Many of the Reits have reported their quarterly or semi annual results and announced dividends to be paid in this month and Dec 2020. This will give a further boost to my war chest and net worth. 

I will continue to stay focused and disciplined, grind at work, chillax, live frugally, save up and invest more money into the stock market for the rest of the year.

The next corporate action I will participate in will be Ascendas Reit's Prefential Offering at $2.96 a share. Meanwhile, I am still nibbling 99 shares of CICT everyday using the free odd lots brokerage promotion on Phillips POEMS.

As long-term investors, we should not be too bothered the short term volatility and noises from the mainstream news. Always be prepared for corrections in the financial markets while we enjoy surges. Enjoy sailing through the ups and downs of the wave tides instead of paddling against the resistance in our investment journeys. Have a plan, stick to it and be in control of our destiny!

Thanks for reading.

With love & peace,

Qiongster

Another Equity Fund Raising of an S-Reit to milk my war chest

Equity fund raising by Reits has become a trend recently. Following after Frasers Centrepoint Trust and Mapletree Logistics Trust, Ascendas Reit has announced on 10 Nov 2020 that it plans to acquire 2 freehold office buildings in San Francisco and a portfolio of data centres in Europe via a private placement and a preferential offering to raise funds of $1.2b.

The 2 properties are situated in the epicentres of San Francisco's technology industry, with extensive connectivity to transportation links and in close proximity to rich amenities and attractions. This move is obviously by A Reit to ride on the emerging technology bandwagon in the US.

505 Brannan Street, PInterest Headquarters in San Francisco

This acquisition is DPU accretive, NAV accretive, increases the WALE of AReit's properties portfolio and increases geographical diversification. On paper it looks good, but as usual, an announcement to raise equity for acquistions will always result in volatility in the share price of a Reit. It will be no different for AReit. Its share price plunged more than 5% to below $3 from its last traded price of around $3.16.

The preferential offering price is $2.96 which is not very attractive compared to the previous preferential offering price of $2.63 just one year ago in Nov 2019. As I currently own 8,000 shares of AReit, this will be a good opportunity to add 2,000 shares to round up my investment. I will subscribe to the preferential offering shares unless its price in the market offers more discount.

In the short term, the share price of AReit may retrace lower, possibly even lower than the preferential offering price due to hedge funds and institutional traders pulling out of safer defensive assets to plough into recovering assets in the tourism, aviation and retail sectors which have been battered badly and recovered a slow pace. However, in the long term, AReit is one of the best, if not the best Reit to own in an investment portfolio. I believe it will definitely play its role to reward consistent and steady returns of more than 5% for its long-term investors.

Thanks for reading.

With love & peace,

Qiongster

Applied for Mapletree Logistics Trust Preferential Offering Shares

I nibbled Mapletree Logistics Trust to initiate a new position in Sep 2020.

On 19 Oct 2020, MLT announced the proposed acquisition of a 50% stake in 15 China logistics properties, 100%  stake in 7 China logistics properties, Mapletree Logistics Hub, Tanjong Pelepas, Malaysia and Mapletree Logistics Hub Bac Ninh, Vietnam Phase 3, all valued at SGD1.067B. The acquisition will be funded by a combination of debt and equity.

Mapletree Changsha Logistics Hub

The logistics properties to be acquired are built to Grade A specifications, with strong floor load, high ceilings, large floor plates, and ramp access, with majority having cross-docking features that cater to fast goods movement. Situated in Key Asian logistics hubs in China, Malaysia and Vietnam, well-connected to transport infrastructure of highways, railways, air and sea ports, and near large population catchments for labour, these properties are riding on the waves of booming e-commerce.

I had decided to participate in this equity fund raising of preferential offering at $1.99 until the share price of MLT plunged to the lows of $1.94 on 2 Nov when it was more cost effective to buy from market instead of pressing at the ATM. The subsequent recovery of MLT's share price back to $2ish levels meant that I should just subscribe to the preferential offering shares. 

So there it is, another small step towards increasing my investment in Asian logistics. Hopefully more investors decide to skip this equity fund raising and let me have all the excess shares.

At $1.99, it is definitely not attractive or low enough but at a yield of 4% (same as CPF Special Account interest rate) in a resilient property segment, it is still rewarding for long-term investors who believe in riding on the waves of booming e-commerce. Also not to underestimate the compounding effect of 4% to more than double an investment over 20 years. Thanks for reading.

With love & peace,

Qiongster