Nov 2020 – Portfolio & Transaction Updates

What a busy month we had for November.

The election took most of the headline news when many investors thought we would have a crash should the Democrats win the election. Turns out otherwise and now we are staring back into one of the best gains in the month and trying to make sense of what’s happening.

For the past couple of months, I have been positioning my portfolio for the eventual recovery from the Covid.

I wasn’t expecting things to resume back anywhere to normal anywhere this year but I would like to think we could get some sort of normalcy by early to mid of next year.

The market is likely to react faster than the actual normalcy itself as we’ve seen in the past one week or so since Pfizer announced its 90% vaccine effectiveness and the portfolio has greatly benefited from the recovery as it is heavy on the recovery sector. 

We are still in the infancy stage of the news so I believe there would be more rooms for the portfolio to run.

There are always people who are going to doubt the effectiveness of the vaccine or the logistic ability to be able to transport or store the vaccine to its maximum effectiveness. My take on that is we should read all the comments and opinions with a pinch of salt. After all, if we can get through the hardest part, I’m sure there are some ways that the logistic part could be arranged. Already, Fedex and SATS have announced their ability function to store and we are likely to see more coming.

For this month, I’ve made a couple of changes but mostly rotations within the portfolio.

I’ve reduced my stake for Micro-Mechanics upon the announcement of the good Q1 results which sent its share price rising by more than 20% (and more than 40% since my purchase a couple of months ago). I still kept the majority of the shares at the moment but given the run-up ahead I wanted to trim it down a little bit.

I’ve also reduced more than half of my stakes for both Baba (HK) and Tencent (HK) after the shock announcement of the Ant IPO suspension which was certainly out of anyone’s guess. I felt that there could be a further clamp-on the regulatory which might impact how future listing for these giants is going to come. In due and appropriate time, and at a level I am looking at, I will try to add back to my position for the longer term.

I’ve doubled down and accumulated more shares for Jardine C&C, Bank of America (US), and Lendlease Reit before the announcement of the Pfizer vaccine came out as I find their valuation too compelling to add. These three positions are now right behind my highest position in Comfortdelgro.

For a new entry this month, I’ve added Ascendas Reit at $2.99 after it announces its placement and preferential offering. While the yield is not the most enticing among all the other Reits, I feel that the current valuation presents a good runway for future further compression on the yield, which is likely to come in the form of share capital gain. It is common to see weaknesses in the share price in the short term whenever a Reit announces preferential offering, even if the acquisition is accretive but it should recover back within a while.

Networth Updates

With the positive news on most recovery sectors after the announcement of the vaccine (potential) and seemingly the rotation back to these unloved sectors, the portfolio ended a strong month with $278,431, up from the previous month of $242,897.

It has run up beyond my expectation as I had a stretch target to reach $250k in the earlier parts of the months not knowing that the rotation would come that quickly.

If this is just the start of the rotation, we could see perhaps a lot more to come in the next couple of months. I am cautiously watching and hoping for that to happen.

In a blink of an eye, we are left with one final month before we end this “Stay At Home” year due to Covid.

We should expect Moderna to announce its results sometime early next week so I’m staying tuned for it hoping for the vaccine to be as effective as we all really wanted the world to return back to normalcy soonest so we can resume our daily lives with activities and folks can visit their families who are overseas. Hopefully, we could get that to happen before the next Chinese New Year.