When an Exit Becomes an Investment Opportunity

Zagro has been delisted. Yet again, I've lost another decent dividend paying stock in my portfolio.

I had acquired 16,000 shares in Feb 2012. This was followed by a rights issue in Aug 2012 where I accumulated another 5,000 shares. Each year thereafter, it has issued dividends annually.

I guess I'm lucky that there was still profit to be made from the exit offer. In all,
the annualised internal rate of return was 11.5%. So overall, a tidy profit.

Time to move on. Nice to have a small bundle of spare cash in this rich market of opportunities. Am I a perennial bull or what?

Pick, pick, pick.

A Review of Investments for 2015

2015 has actually turned out to be a horrendous year, or a wonderful year, depending on how you look at it as an investor. Checking against the STI, I realised it has actually suffered a -14.3% dropped compared to this time last year. Taking into account 3% of dividends which the STI index would not have accounted for, that would actually be -11.3% net in terms of total returns.

So if you're sitting on a 11.3% loss, you're pretty much doing market normal. You're normal. On the other hand, if you've been buying throughout the year when the market dropped, it's probably going to turn out great in the longer run. That is, provided you didn't buy a bunch of junk! You had a lot of guts and I wish you success! You're probably abnormal.

My stock investment has returned an IRR of -1.2% for 2015 inclusive dividends reinvested into the portfolio. So I guess I should take some satisfaction that I have outperformed the market for the 6th year running. Can I gloat somewhat?

However, my long term IRR has continued to slide: from ~20% (2012-13, 4-5 years), to 17.3% (2014, 6 years), and now ~12% (2015, 7 years). A case of reversion to mean? Still, 12% over 7 years is not a bad long term performance. I'm consoling myself.

The shares portfolio is taking on a more global outlook as I've started investing into other regional ETFs (esp. Europe, Asia-Pac and Japan) on top of my current holdings of Singapore and US shares. If this was a fund management company, I should probably use some other global benchmarks. But I'm not, so I will continue to reference STI as my benchmark, because that's what my opportunity cost is. I'm only accountable to myself.

Bought:
  Anheuser Busch (US)

  ARA Asset Mgt
  Aspial (bonds)
  Boustead
  Capitacom Trust
  Capitaland
  CIMB Asiapac Div ETF
  Exxon Mobil (US)
  Global Logistic
  HongKong Land
  JMH
  Keppel
  Lyxor Europe10 ETF
  Lyxor Japan10 ETF
  M1
  OCBC
  Second Chance
  The Hour Glass
  Union Pacific
  YZG
  Zagro Asia

Rights Issues Subscribed:
  ARA Asset Mgt

Sold:
  nothing!

Lots of buying, not much selling. To be precise, I've sold nothing throughout the year. I've been a stooge. Gave nothing away.

Dividend income grew marginally to $11,168 for 2015. This would have been higher of course, except that I chose to accept all options offered in the form of scrip dividends (i.e. additional shares in lieu of cash) as per previous year. I'm too lazy to figure out what the exact dividend amount would have been. But I estimate it would likely be in the region of $14,000 for the shares portfolio. That's not enough to live off my lifestyle on, yet.

But from an overall perspective, the total portfolio of shares, unit trust, investment-linked and cash/bonds has finally breached the 7-figure zone. The journey is progressing well. The point of "inflexion" (a.k.a. financial independence) is coming.

Despite a tumultuous 2015, here's wishing you a wonderful 2016 next. Happy New Year!

Pattern of Behavior - A Review for 2013

I was reviewing a past musing I made in 2011 (Pattern of Behaviour) of several interesting companies that I was invested in and monitoring. 

Since then, Adampak, Cerebos, Hsu Fu Chi, Kian Ann all went through one form of general offer or another, and have since delisted from SGX.  Guess my bets were on the righthorses.  The original buys centered around these stocks that paid good and steady dividends.  In some cases, they had low Price-to-Earnings (PE < 15) and/or low Price-to-Book (P/B < 1.0) ratios.

More recently, I divested Innotek.  Seems like a dead horse.  But I may well have divested at its trough (pun).

Of the rest, most are still struggling at the fringe, especially M1, CSE Global, SingPost and Sing Inv & Fin.  SingPost in particular faces the challenge of diversifying itself from being overly dependent on a gradually declining domestic market.  Consequently, it has been taking on an aggressive M&A track.  However, these have yet to pan out.  It's all about execution.  For the rest, I remain optimistic for the longer term.

Of the balance, Teckwah and Zagro Asia have been doing well.

In nett therefore, out of 12 stocks, 4 exited profitably, 1 exited at a loss, holding 4 that are performing neutral, and holding 2 that are doing well - i.e. 6 wins, 4 draws, 1 loss.  Not too bad.