Value often emerges during big drops

i took the recent sti 100 point plunge to add a counter. I chose fortune as it pays dividend twice a year and there is a discernible rising trend in the payouts. In addtion, it is one of the most deeply discounted reits around. the strategy of having a regular steam of dividends helped as it came handy when i needed the funds.

sure, it might seem scary to buy during such drops. but actually, its even more scary to buy when sti was 3600 level.

Buying index verses dividend portfolio

Recently, i replied to a reader who asked me if i hold so many counters, might as well i go buy index?

At one glance and perhaps to a lot of people, it might make sense.

However, in reality, its not quite the same.

In index, we only get dividend 2x a year. this makes compounding a lot (and i say it again) a lot slower.

The bigger difference and actually dangerous difference is when one takes out a fixed amount say 4% from this portfolio. In bull times, it can be done without much fear as there's a lot to take out anyway and we are only removing 4%. However, in cases of bear, and here were are talking about prolonged bear of perhaps 10year or longer, market drops, and we are still liquidating 4% pa. As we go into the bear years, with inflation doing its job, now we might find ourselves in a fix, in a bigger fix as the bear continues its attack. The dollar cost averaging which we put in in the construction of this STindex portfoilio now faces its evil twin- dollar LOSS averaging. Never say never, but if it happens, those who spend decades buying stidex and just sitting on the sidelines, using its twice a year dividend to add more, now might have even to seek alternative sources of income.

Now this dividend portfolio
compoundation is fast, much faster in effect due to the syngistic effect of the individual counters churning out dividends and feeding the other counters.

in times of bear and bull, during retirement, the dividends coming at various times can simply be used as income. There is hardly any fear of outliving the portfolio as the average dividend yield of the entire portfolio is in excess of 5. In fact, there is still surplus to reinvest if one wishes so.

Be careful when one takes out a fixed sum say 4% from the portfolio. And it depends on what sort of portfolio we are talking about. Index buying and growth stocks, all run the risk of dollar LOSS averaging when we are talking about withdrawal in prolonged bear.

So to say that just buy index, means one havent thought about these things, to say the least. I have seen people, some so called experts dispensing advice to others that index investing should replace what they are doing.  And in reality, its those people who have been through these times, who will really know the difference in these investment modalities.




 

portfolio update jan 2018

Dividend by month

1) singtel
2) fcot sgx  starhillg fct sphreit cmt fortune capitaretail capitacom
3) spost  taisin lippo nam lee netlink
5) fcot steng sgx  uob sph starhillg fct sphreit cmt cdg hcg lippo Singre
6) tcil ocbc
7) singpost
8) fcot singtel  plife  ocbc  starhillg sci steng fct singpost sphreit cmt lippo singre ock fortune capitaretail capitacom
9)  uob tcil cdg netlink
10) sgx
11) fcot taisin sgx spost  starhillg fct cmt lippo
12) sph sats ksh ock


Remarks:

Bought more st eng sia eng sph comfort starhill.

A good run up by STI. Sitting on a pretty paper gains. Will continue to add various companies at various times using dividends received.




Overall,

nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters and/or the counters which are about to pay dividends soon.

No further input is necessary. Portfolio creates the income every month and gets reinvested. One reinvestment move means one more continuous stream of income in the future.

Counters get rebalanced periodically as and when the opportunities arise.

Market up or down doesn't matter too much, in fact is not a bad thing after all. Dividends provided new cash flow as compounding and dollar cost average tool.




DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?

3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

did ST Eng reached bottom recently?

i invest primarily for dividend aka cash flow. when the yield goes up, i give the counter a second look and ask myself whether the yield rise is sustainable. in other words, the drop in price is rational or irrational. in the market traders and investors co exist. and amongst traders and investors, there are many sub groups.

back to the st eng. i decided to add around 320. i have no idea whether it would drop more or not.

but to me, that 320 price is its many years low and looking at its earnings, it should be able to sustain its dividend payout in 2018.

and true enough, as i said i don't know whether 320 is its low, it fell lower. then recovered.

i intend to keep this for long term, 5 and 9 dividends are like clockwork, well liked by investors like myself.

portfolio update dec 2017

Dividend by month

1) singtel
2) fcot sgx capitacom starhillg fct sphreit cmt fortune capitaretail
3) spost  taisin lippo nam lee netlink
5) fcot steng sgx  uob sph starhillg fct sphreit cmt cdg hcg lippo Singre
6) tcil ocbc
7) singpost
8) fcot singtel  plife  ocbc  capitacom starhillg sci steng fct singpost sphreit cmt lippo singre ock fortune capitaretail
9)  uob tcil cdg netlink
10) sgx
11) fcot taisin sgx spost  starhillg fct cmt lippo
12) sph sats ksh ock


Remarks:

sold off low keng huat suntec and most of capitacom as they have run up quite a fair bit and there are opportunities available to buy into relatively more reasonably priced counters.

bought sia eng st eng singtel comfortdelgro fortune capitaretailchina




Overall,

nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters and/or the counters which are about to pay dividends soon.

No further input is necessary. Portfolio creates the income every month and gets reinvested. One reinvestment move means one more continuous stream of income in the future.

counters get rebalanced periodically as and when the opportunities arise.

Market up or down doesn't matter too much, in fact is not a bad thing after all. Dividends provided new cash flow as compounding and dollar cost average tool.




DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?

3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

portfolio update November 2017

Apologies for the late update. Have been travelling quite a lot recently.

November dividend was like this.

Dividend by month

1) singtel
2) fcot sgx capitacom starhillg fct sphreit cmt
3) spost  taisin lippo nam lee netlink
5) fcot steng sgx  uob sph starhillg fct sphreit cmt cdg hcg lippo Singre
6) tcil ocbc lkh
7) singpost
8) fcot singtel  plife  ocbc  capitacom starhillg sci steng fct singpost sphreit cmt lippo singre ock
9)  uob tcil cdg netlink
10) sgx
11) fcot taisin sgx spost  starhillg fct cmt lippo
12) sph sats ksh ock


Remarks:

With my proceeds from lmg and from the dividends, I added the following.

Added old chang kee at 76c. Should have bought this counter long ago. Hesitated and wow, it multibagged from listing price.

Luckily i kept nam lee in my watch list. when my dividends came, i managed to add some below 40c. Full year result showed improved earnings with nav up to 55c.

Added some more singapore reinsurance, steng, sats and siaen.

Also added netlink trust.





Overall,

nothing fanciful and nothing new: dividends received will be used to reinvest in the same counters and/or the counters which are about to pay dividends soon.

No further input is necessary. Portfolio creates the income every month and gets reinvested. One reinvestment move means one more continuous stream of income in the future.

Market up or down doesn't matter too much, in fact is not a bad thing after all. Dividends provided new cash flow as compounding and dollar cost average tool.




DON'T FORGET TO ASK YOURSELF THESE QUESTIONS:


1) WILL THIS COMPANY GO BUST IN 10 YEARS?
2) WILL THIS COMPANY STOP DIVIDENDS?

3) WILL THIS COMPANY STOP INCREASING DIVIDENDS OVER TIME?

thank you, lee metal

I decided to offload my entire lee metal stake. And i think this represented about 5% of the total trade of the day.


To me, 40c represents a premium to the NAV of 38.5c and personally i feel that a discount to the NAV is warranted in the first place for this counter. And moreover, the last result wasn't good. Next year dividend cut might even take place should the earnings continue this way. Long term wise i am still bullish on this counter, knowing where the bulk of its business lies in. However, the price of 40c is too attractive for me not to sell it to the next better investor. Put it in another way, i would not take lee metal private at 40c, but at a lower price than that.


The reason why i bought it at 30c a few months ago is because of its discount to the NAV and I feel that going forward 2c might be maintained. However with this sort of weak earnings, it becoming harder to tell. Personally i dislike buying and selling within such a short span of time and the reason why i had lee metal in the first place was to add 4 streams of dividends in the coming months. But things turn out the way it did and after careful consideration, for me, this is the best course of action.

Sure, i could still be entirely wrong in my thinking, And some billionaire could appear and take lee metal private at a higher price... I don't know


Disclaimer:

The above forms ONLY my own personal views.