The Bf Gf Portfolio – May 2017 ( 1 Year Later )

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Long time no blog!

Here are some updates to my portfolio after being silent for quite some time.  The last time I blogged about by stock portfolio holdings was in this post.

Basically…It’s been mostly me pressing the BUY button almost every month.

The only sells I made during the year were:

  1. Linkedin – Sold due to acquisition (Break even)
  2. Solar City – Sold due to acquisition (Loss)
  3. Valuetronics – Sold due to lack of confidence (Obviously that seems like a mistake now cos it went up 100% from my selling price of 42 cents…Urgh!!!)
  4. Keppel Corp – Sold due to decision to not get involved with cyclical commodities like oil.

Here’s a snapshot of my portfolio:

Portfolio Snapshot 4.5.17

Although the portfolio seems to be mostly in the green, the annualised return is kind of pathetic at 8%.  This is due to earlier losses in my investments and most notably, GoPro, which I have dumped a huge pile of cash into.  The other losers have been sold off before 2016.

 

Some Reflections

 

My allocation is based on the confidence I have in each company, and also based on the current valuations of the company at the moment.  If I find that my confidence in the company is medium, or the valuation seems too high, I will make it a smaller portion of my portfolio. Vice versa, if the company feels like a no brainer, or I have strong confidence in it, I will allocate a larger portion to it.

 

What I can learn from the losers

 

Looking back, I did not regret my initial purchase of GoPro.  But I did regret my 2nd purchase, which I felt was driven by a feeling of ecstasy as I saw my initial stake soaring to over 36% gain in a short period of time.  That led me to over-allocating my capital in a single company.

Other losers like Keppel Corp, Sierra Wireless – showed a lack of research and poor judgement.  Only upon hindsight, I realised how little I knew about the industry.

Tripadvisor was a long-shot and I was glad that I did not over-allocate in that particular stock.

Anyway, I am holding the current losers because I am waiting for their thesis to play out

  • Sierra Wireless – Internet of Things
  • GoPro – Still industry leader, waiting for management to wake up their idea… but obviously they are taking a long time…
  • Trip Advisor – I still think this business has great potential… now if only they could increase their margins…
  • Chipotle – I bought this stock at a high valuation, then averaged down when the norovirus crisis battered down their shares.  Now it is a turnaround play for me.  Things are looking better after 1 year.  Hoping for big gains with this stock!
  • Kingsmen Creatives – Averaged down since last year.  Still holding as I believe that this company will pull through the structural shift in retail.
  • QAF – Just bought recently when AK posted about it on FB.  So if I lose money in this stock… I know who to blame!  (LOL.)

In business, there are many factors at play that can come and trip you up.  Some losses are sure to occur.  This translates to investing, so you, as a part owner of the business, you should be prepared for losses as well.

 

What I can learn from the winners

 

  • Sometimes winners can be no-brainers.  Berkshire Hathaway. Warren Buffet. Charlie Munger.  When the PB ratio is around 1.3 – 1.4, you can bet that I will be dumping in some cash.
  • It’s always better to be a dominating leader in your industry – Priceline
  • The tailwind is your friend.  Online advertising, mobile advertising, social media, network effect, AI, big data, cloud computing –  FB, Google, and Amazon have been stellar performers in my portfolio despite having ‘high’ valuations
  • The biggest ideas are already around you.  Mastercard and Paypal are my investments in digital payments.  It’s not too hard to see that the world is moving away from cash payments.
  • Valuation matters when trying to maximise gains. Apple, Dairy Farm and Criteo were mostly based on valuation as a core thesis.  Most of my other stocks – I focus on moats, business quality, management, and big trends…

 

What’s new…

 

  • Kweichow Moutai.  I must admit that this is speculative…. (I can’t read Chinese properly man!)
  • Lululemon.  My recent trip to a Lululemon store kinda blew my mind at how the company really goes in-depth to serve the customer.  The Gf is a big Lululemon fan as well.  I also like it for the community it builds around the business.  I am a strong believer that a business that builds a community of cult-like followers can succeed in the long run.
  • QAF.  I am one of those people that eat Gardenia bread every week.  I see this business as an undervalued stock in a defensive industry.

 

What I will be looking to buy next…

 

  • As I am typing out this blog post, I got another small pile of cash which I will be dumping into Amazon.  This company never ceases to amaze me and it’s starting to show that it can grow into a multi-headed hydra.
  • Really interested in the tech developments in China.  Tencent seems to have its fingers in many pies.  Also, the way the company morphs and adapts to the tailwinds is really a beauty to behold.  Will definitely be upping my stake in this company.
  • I really like Markel… but as you notice, it’s only a tiny portion of my portfolio as its valuation is on the high side.  If all stock valuations are low, you can bet that a huge bulk of my money will be in Berkshire and Markel.  That will save me from a lot of thinking…
  • I will also be adding on bit by bit to my winners like – Google, Facebook, Amazon, Mastercard.
  • I will be studying my REITS over time to find opportunities to add on to them.  Who doesn’t like dividends?

 

Other thoughts on Capital Allocation

 

  • Main Capital Allocation will be going into my core businesses in the education industry.  I have come to realise that as a business owner, I enjoy the highest ROIs by reinvesting in my businesses.  Hoping to hit my target of a 7 figure business in 1 year time.  I stare at my goals every morning and every night and review my slow and steady grind to ensure my vision becomes a reality.
  • I NEVER hesitate to spend on books, audiobooks and courses – and I STRONGLY recommend everyone to do the same.  It has proven to be my breakthrough with regards to income generation and overall wisdom in life.
  • I am currently supporting Children’s Cancer Foundation through my businesses, and  looking to support 2 more charities in the near term.  ( If you know of any charities that fight against child exploitation, or is geared towards helping children… let me know.
  • Angel Investing is something I am looking to dip my toes into.  Will be attending TechinAsia…and possibly more of such entrepreneurial conferences / gatherings soon.  Looking to expand my network in angel investing and entrepreneurship.  If you are a new start-up that has plans to create value and social good in our world, hit me up and we can talk.
  • Definitely putting money into CPF -SA
  • May have to get around opening an SRS account by this year…

 

Bf Gf Joint Financial Goals

 

It’s amazing how so much can change within one year.

 

I’ll never forget the day when the Gf and I talked about our weak finances.  She was doing a rough estimate of the costs of getting married, house payment, and renovation..etc… and I was getting more uncomfortable as I was forced to come to the realisation that we had to scrimp and save more.  We were at some cafe eating burgers… and I was staring in guilt at that $40+ bill.  So instead of wallowing in financial misery, we decided to start this blog to channel our efforts into building up our financial health.

 

I vowed never to have that guilty feeling whenever I eat gourmet burgers again.

 

Now within a year or so, we are totally comfortable with paying off our flat (estimated to TOP in 2018), paying off our wedding (estimated 2019 – thanks to our astrologer….), paying off our renovations, having babies…. and so on.

 

We are not ‘financially-free’ yet… but I believe with our frugal lifestyle, and our focus on growing our earnings, we will get there in a couple of years time.

 

And of course –  we will be looking to get rich while doing social good… making a profit with a purpose.

 

 

 

So dear reader,

 

If you are interested in discussing any stock…

If you are interested in telling me what charities you are supporting…

If you are interested in Angel Investing and Entrepreneurship…

If you are interested in sharing your financial journey…

Or if you are interested in just chewing the fat, catching up, talking cock…

 

Talk to us in the comments below!

 

Thanks for reading!

 

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6 Comments

  1. FC

    which platform are you using to buy US stocks?

    Reply
    1. Jerry (Post author)

      I was using Standchart.

      Now I use Interactive Brokers.

      Reply
  2. Mei xian

    Hey Jerry!
    Why don’t you donate to any restructed hospital charity funds?
    The money will be used for needy patients to buy medical consumables that are not covered by government assistance. 🙂
    Rest assured that money will be in good hands as the money are issued by medical social workers after they have conduct a throughout financial assessment.

    Reply
    1. Jerry (Post author)

      Thanks! I will keep a look out for it!

      Reply
  3. Tacomob

    Hi Jerry,
    Great sharing. Especially your reflections on those individual stock selections, winners and losers contain some good lessons learned.
    Imagine how your portfolio performance could look like if you had have the discipline to enter each buy with a generous but pre-determined (and unmovable) stop loss order?
    Well, we can’t change the past, but we can always decide on what we do right now and will do in the future.
    Just some food for thought.

    Reply
    1. Jerry (Post author)

      Hi Andy,

      I don’t like the idea of a stop loss order. (That’s probably more applicable to traders.)

      I will only sell when my original thesis is totally wrong, or when all hope is lost for that company, or the company shows signs of unethical practices.

      Example – I sold Keppel Corp after I realised that the company is not as solid as I thought it would be. I also decided to get out of cyclical, commodities driven businesses – I find that they don’t really provide me with a peace of mind.

      Yup, I agree we can’t change the past. Just learn and move on 🙂

      Reply

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