March 2018 Portfolio Update

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” -Paul A. Samuelson

Dear Readers

Sentiments in the stock market, in March 2018, were heavily influenced by the US interest rate hike and the trade war between the US and China. Needless to add, market turmoil is back in the spotlight.

Market down

Although the Bursa did well in shrugging off much of the turmoils, my portfolio wasn’t that fortunate. Instead, my portfolio suffered tremendously as paper profit dropped about 8%, from a gain of about 34% last month to a gain of about 26%. As an investor, you must not let market turmoil derail your levelheadedness. And there is no better way to do that but to just ignore the turmoil [See: Rationally irrational] and concentrate on increasing your earnings, either through your business or employment, so as to have more, at your disposal, to be invested.

My portfolio as at 02.04.2018:

COUNTER COMPOSITION (%) AVERAGE PRICE LAST PRICE GAIN/LOST (%)
3A 6.30 1.18 1.07 (9.20)
AIRASIA 31.88 2.80 3.93 40.45
CIMB 24.86 5.77 7.20 24.68
DNEX-WD 6.91 0.23 0.145 (34.18)
EKOVEST 12.49 1.16 0.96 (17.53)
EVERGREEN 5.21 0.79 0.47 (40.65)
MALAKOF 2.74 0.92 0.885 (3.59)
SIME 5.72 2.80 2.64 (5.94)
Updates

Some of the relevant news which happened in March 2018:

  1. Ekovest’s shareholders had voted to reject a proposal to take over IWCity at RM1.50 per share.  A resounding 69.2% of shareholders voted against the resolution.
  2. Malakoff has bought back at least 32 million shares in March 2018.
Looking forward
  1. CIMB dividend payment on 30.04.2018 of RM0.12 per share.
  2. General election. (First time voter).

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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.

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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:

COUNTER COMPOSITION (%) AVERAGE PRICE LAST PRICE GAIN/LOST (%)
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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