February 2018 Portfolio Update

Dear Readers

The end of Chinese New Year marks the conclusion of February 2018 and with it, a month of turbulence.

In the midst of all the chaos, market forecasters, market journalists, security analysts, economists and commentators have been flooding the internet with their views of whether the equity markets are heading for a correction or a bear market and how higher American inflation and bond yields are adversely affecting equity markets.


While I believe that the market has had a good run and it is due for a pullback, I didn’t react much to those opinions; merely reading them as a form of leisure. I’m steadfast that no one could consistently predict, with absolute certainty, the future direction of the market. In fact, my position, with regard to my portfolio, was to ignore all of those views and to adhere to my long term plan by staying invested [See: Rationally irrational].

So, did doing nothing bear fruit?

Had I reacted to the market selldown, by selling off my shareholdings, I would have only realised a 24% portfolio gain (the lowest portfolio gain during the selldown) and also missed the market rebound that subsequently followed the market selldown. Because I did nothing, my portfolio rebounded, as the market rebounded, and is now back at a gain of 33.8%. And, all of that happened within a span of a month.

Of course it is easier for one to reflect on all of this in hindsight. Would one have acted differently, say if the market selldown protracted, to reveal a bear market? This is exactly why investing is truly a test of grit and mental endurance, rather than just analytic skills; to adhere to a predetermined investment plan, even in the face of adversities. Those without resolve would quickly steer away from that predetermined investment plan, with devastating consequences. However, those with resolve, would have stuck though to their plans, and on top of that, bought more quality stocks, at steep discounts. That is how, successful investors such as Warren Buffet, Charlie Munger, Peter Lynch and Joel Greenblatt, would have acted.

Now, a breakdown of my portfolio:

3A 5.99 1.18 1.08 (8.35)
AIRASIA 33.27 2.80 4.35 55.45
CIMB 23.66 5.77 7.27 25.90
DNEX-WD 6.64 0.23 0.175 (24.33)
EKOVEST 12.26 1.16 1.00 (14.10)
EVERGREEN 5.59 0.84 0.535 (32.44)
MALAKOF 2.69 0.91 0.92 0.22
SIME 5.50 2.80 2.69 (4.16)

I’ve taken a small bet on Malakoff notwithstanding that things there are a little rough at the moment. Its earnings are expected to be depressed in the future, its flagship asset, Tanjung Bin Energy power plant, is still without operational hiccups, and more importantly, the failure of its management to secure assets to boost its power generation capabilities is of no help to its already declining earnings. However, on the positive note, dividend yield may be higher because of its depressed share prices and high dividend payout. Further, Malakoff’s management are taking some steps towards expanding its power generation capabilities in the renewable energy segment.

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