Note 6: March Update

Note 6: March Update

Overall

The market has heavily declined in this month due to the potential trade war coming soon. However, I am trying to remain zen about it. I don’t really like to give forecast but my feel is that this too shall pass and investors should focus on the basic of the business than trying to pass judgement.

Singapore
		YTD	% Performance
Year 2017	Freedom	Freedom Fund	STI	Freedom Fund	MOM
Jan-18	141,327.6	143,767.11	3.8%	1.7%	-8.2%
Feb-18	141,327.6	142,267.72	3.6%	0.7%	-1.0%
Mar-18	141,327.6	140,938.99	1.0%	-0.3%	-0.9%
Singapore SRS
		YTD	% Performance
Year 2017		SRS	STI	SRS	MOM Port
Jan-18	86,380.9	87,383.09	3.8%	1.2%	22.9%
Feb-18	86,380.9	87,401.24	3.6%	1.2%	0.0%
Mar-18	86,380.9	86,163.55	1.0%	-0.3%	-1.4%
China HK (HKD)
		YTD	% Performance
Year 2018	SGD	CH HK SGD	Hang Seng	SGD	MOM
Jan-18	46,846.5	46,179.31	10.6%	-1.4%	4.9%
Feb-18	46,846.5	46,413.42	4.3%	-0.9%	10.6%
Mar-18	46,846.5	51,034.04	2.2%	8.9%	10.0%
Nasi Lemak (Local Currency)
		YTD	% Performance
Year 2018	SGD	NL SGD	KLCI	Nasi Lemak	MOM
Jan-18	9,828.4	9,825.0	4.3%	0.0%	-4.3%
Feb-18	9,828.4	9,702.6	2.7%	-1.3%	-7.5%
Mar-18	9,828.4	8,864.6	4.9%	-9.8%	-9.6%
Singapore Portfolio
		YTD	% Performance
Year 2017	SGD	SG SGD	STI	SG	MOM Port
Jan-18	227,708.6	231,150.2	3.8%	1.5%	#DIV/0!
Feb-18	227,708.6	229,669.0	3.6%	0.9%	-0.6%
Mar-18	227,708.6	227,102.5	1.0%	-0.3%	-1.1%
Vice
		YTD	% Performance
Year 2017	SGD	Vice SGD			MOM
Jan-18	10,785.6	$   10,115.00			#REF!
Feb-18	10,785.6	$     9,995.43			-1.2%
Mar-18	10,785.6	$     9,748.56			-2.5%
Total
		YTD	% Performance
Year	SGD	Total SGD		SG	MOM
Jan-18	295,169.1	297,269.6		0.7%	#REF!
Feb-18	295,169.1	295,780.4		0.2%	-0.5%
Mar-18	295,169.1	296,749.7		0.5%	0.3%

Note:

Singapore and Freedon Fund are interchangeable

Nasi Lemak Fund refers to Malaysia

Vice: Refers to Smoking, Alcohol, Gaming and Firearms portfolio

Singapore

While the Singapore market is down generally, I have some good news from LTC as they have announced a general offer. While I didn’t bet big on this counter, I will at least be having some spare cash when the money is credited into the bank. This also make me reflect on the need to choose my bet with more confidence and in bigger portion of it, especially for counters which I think is greatly undervalued. I am not really impressed with the offer but well, a lot of times, minority shareholders have limited room to move. I have also sold of SP Corp to focus and rebalance my portfolio. There wasn’t much profits even if the price is to hit liquidation value, and as such, I will prefer to have some spare change to make a more substantial bet.

There are lesser things to buy as the bull market over the years has affected the valuation. While the market is down vs Feb, it hasn’t gone down to an attractive enough level for me to enter the market. However, I am looking at the following to add into my counter if there are enough movement downwards

Hong Kong

Hong Kong market has been pretty subdued this year, but I am registering growth on par with the index. The reason is due to the surge from Oriental Watch. Market has began to recognise the value of the luxury retailers, such as Dickson, Oriental, Emperor that have seen heavy downtrading over the years. I hope the trend will continue as the mainland tourist return to Hong Kong.

I personally think the Hong Kong market has a lot more potential than Singapore. There are a few reasons such as 1. Closeness to China, 2. Regulations and law which are western enough for companies to invest in, 3. A great number of family firms which will be looking at either delisting or selling out when the founder passes on. However, one must be aware that the Hong Kong market is heavily dependent on property and the property by nature of the asset classes, will tend to bubbled up pretty fast.

I am already monitoring a few stock such as

·         Dickson

·         Chen Hsong

·         International Art Optics

·         Great Eagle

·         Wing Tai

·         Soundwill

·         Future Bright

·         Rosedale

I do not wish for a major market correction, but a slowdown in their property market. I believe it will being everyone to a more rational mind.

Malaysia

 Malaysia portfolio is the one that has suffered greatly over these 2 months with Karex being down. However, to be fair to the portfolio, I only have 3 counters in this portfolio. I believe that most people are overly pessimistic on the Malaysia market due to the political turmoil. My contrarian view is that as much as the administration could be unstable, the Malaysia has a strong domestic market which is shielded away from the volatility of the world economics.

In my opinion, Malaysia is a great counter balancer to your portfolio, as long as things don’t go the Venezuelan way.  I have already shortlisted a few of their shares such as

·         Keck Seng

·         Cheetah

·         Golden State

·         Poh Kong

·         Gul Holdings

Vice Portfolio

I have also done a little experiment on the vice business. I have 2 small investments in Altria and Japan Tobacco, and will be adding more as we go along. There isn’t much of an investment strategy going on, but it’s more of an interest to see whether will a vice portfolio outperform the market over a 20 year period. My belief is that due to the nature of things, a vice portfolio will usually give provide a total of 8% per annum growth over 20 years. It’s based on 3% dividend, standard growth of 1.5% that we see in world economy, plus inflation of 1.5-2% over the longer term, and management premium of 2%. In my eyes, only 3 industry categorizes as vice, liquor, tobacco and gambling.

That’s all from me this month. Good Luck and goodnight.