I thought I am an income investor … but

I would not have realized that my Top 5 holding has changed significantly within this year if I didn’t chance upon an old blog I made a few months ago.

I always thought I am an income investor but looks like I am more like a trader!!!! Something is not right …

Anyway, just to share, my top 5 holdings today are as follows:

Ranking Companies % of Portfolio
1 SPH 7.80%
2 Cache 6.88%
3 Singtel 6.12%
4 Comfort Delgro 5.98%
5 SIA Engineering 5.42%

You may have noticed it … Yes, my top few holdings are mainly the blue-chip, TLC companies whose share prices have dropped most drastically in the past few months.

  • SPH is now $2.70, a far cry from the $4s price range … heart-heart ache
  • Singtel is $3.75, 15% below the $4.20 price range that I was more familiar with
  • Comfort Delgro is $2.00 … sign … I thought it was a bargain when I started picking it up at $2.20
  • SIA Engineering is $ 3.25, it simply collapsed from the $3.70 range after they distributed the last dividend.
  • And Cache – because of the rights issue. But I am glad for the rights issue because it actually helped me to average down the cost and now, it is in the money again.

I have been accumulating them by averaging down and having this conviction that they are good companies to own in the long run. Part of the reason is also the reluctance to cut loss when it was clear that the trend was going down.

Well, I am assuming they can work a way out to regain their market position or profitability admittedly that it may take many years. The fact that they are backed by Temasek also has some bearings on my decision. With a rich and influential father, you can’t do too badly, right? If need be, Temasek will take them private to prevent further erosion of shareholders confidence and to enable drastic restructuring with haste and without the interference from minor shareholders (like in the case of SMRT).

In some ways, I am buying ahead of fundamentals and these companies do face serious challenges in the new marketplace. I hope my beliefs will be correct in the end.

The only comfort I get is that their dividend yields remain decent, ranging from 3.5% to 7.0% even based on my (high) purchase prices. The thing to watch now is whether they can maintain their dividend payout. If they can do so, I am happy to continue to hold them.

Besides the fact the Top5 is very different from that a quarter of the year ago, I realized that I have also concentrated my portfolio lately. Perhaps it is the difficulty to monitor so many companies and keep track of their development. It could also be the lack of opportunities to find undervalued companies in the market now to spread the risk. No matter what the reason, I have gone beyond my earlier investment philosophy of not holding more than 5% of a single company in my portfolio. Now, all my Top 5 are above 5% and SPH is even coming to 8%!!!

It will be interesting to see how my Top 5 looks like at the end of the year. The Top5 list has changed so much in the course of this year that I was totally surprised by myself!

In case you are interested, In mid-March 2017, the top 5 were

Ranking Companies % of Portfolio
1 Soilbuild Reit 5.20%
2 Ascendas Reit 4.20%
3 Ascott Reits 4.00%
4 Frasers Com Trust 3.60%
5 SPH Reit 3.50%

Clearly, Reits were my dominant holding then.

In mid-June 2017, the top 5 were:

Ranking Companies % of Portfolio
1 SPH 4.20%
2 Capitaland Mall Trust 4.00%
3 M1 3.90%
4 Keppel Corp 3.50%
5 SPH Reit 3.50%

 

Interesting enough, all of the previous Top5 in March had been changed out except for SPH Reit. I sold those Reits progressively as their share prices increased. On hindsight, I might have sold them too early. At the same time, I started to load up more blue chips as I found them more attractively priced than the Reits.

But except for SPH, the rest are again gone in the latest Top5 table (4 Nov).

If I am not a trader, what am I!

I need to reflect on this.

With the way things changed … I wonder how much had I spend on transaction fees …. 😊

 Other than that, it’s back to calculating dividends for me again 😊

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2 thoughts on “I thought I am an income investor … but

  1. “With the way things changed … I wonder how much had I spend on transaction fees”

    Heh heh … maybe you should put some money into SGX … can’t beat them might as well join them!! 🙂

    I predict this global stock bull will be good for at least another 1 year. No runaway upside moves yet, price action is climbing walls of worry, retail investors are still cautious, not registering with man in the street or trash news like Newpaper yet. Even the NYSE margin debt YoY acceleration / deceleration chart is still not too bad. (People focus on the overall level of margin debt, which is not looking at the correct thing)

    Potential hot performance for all major stock exchange companies like SGX LOL!

    Liked by 1 person

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