Today marks the end of August 2019 and wow, it has been one of the most volatile month for stocks that I’ve seen. The direction of the market is overly reliant on presidential tweets and demonstrations in Hong Kong.
The biggest news in SGX would probably be the missing Yangzijiang CEO incident, which sparked a huge selloff in the markets. I’m not long YZJ but I see short term traders speculating like it’s no tomorrow, kinda reminds me of Midas Holdings.
In the US, Harry Markopolos, the guy who exposed Bernie Madoff’s ponzi scheme, released a very detailed short (short as in sell, not length) report on General Electric (NYSE:GE). If the claims are true, it could mean bankruptcy for GE and spook markets.
We also see gold prices break US$1500 per ounce, I did a piece on SGX listed gold mining company CNMC Goldmine(SGX:5TP) and I felt that while rising gold prices might be a boon to them, CNMC must monitor their operating expenses closely to see any meaningful improvement to their bottomline. You can read about it here.
Portfolio Performance
There was a slight dip in my portfolio in August but I’m still up 11.51% for the year, compared to STI ETF’s 4.37% .
Manufacturing stocks like Valuetronics (SGX:BN2) & PNE Industries(SGX:BDA) are affected by the poor sentiment due to trade war fears. I feel that it is business-as-usual for them and in PNE’s latest financial report they also stated that they are not affected by the tariffs.
The rest of my stocks are holding pretty well, especially reits, Powermatic Data(SGX:BCY) and transportation stocks Comfortdelgro (SGX:C52) and Vicom(SGX:V01).
My top 5 holdings are still unchanged;
- Netlink Trust (SGX:CJLU)
- Powermatic Data (SGX:BCY)
- PNE Industries (SGX:MU7)
- Vicom(SGX:V01)
- Straits Trading (SGX:S20)
Although no purchases done this month, I’m looking to add more stocks into my portfolio. Some stocks such as Boustead(SGX:F9D), Jumbo(SGX:42R) have experienced quite a drop and is starting to look attractive.
What to Expect in September
It may be a matter of time, but I’m starting to see general market fear settling in. News of impending recession and the volatile market will definitely have a psychological effect on investors. Most of the company earnings are already in, so investors will be keeping a close eye on the trade war see-saw and any retaliatory measures China may take in Hong Kong.
Starting September, we will also see US$112 billion worth of Chinese goods being imposed 10-15% tariffs. China also announced that they will counter with additional tariffs on US goods in the near future.
Most recently, we have President Trump blaming the Fed for not cutting interest rates to boost stock markets. That is not surprising but in addition to that, he also accused companies that complained about the tariffs of being weak and pooly managed. Will be interesting to see how Jay Powell and the Fed reacts next month.
Closing
In the construction industry which I’m working in, there are a lot of companies trying to make ends meet and ride out the storm and wait for the next economic upturn. Hence, I feel that economy will be gloomy for the next few months.
This, however, presents an excellent opportunity for value investors to seek out well managed companies at distressed prices and invest in them. My next post would most probably be a case study which I’ve been researching on.
Oh yes, I was also invited to be part of Dr Wealth’s roster of regular writers where I will writing articles for their blog site. Really psyched to be able to contribute to their blog as I’ve been an avid reader of Dr Wealth for a long time (since their BigFatPurse days).
Anyway, for closing, here’s a link to check out their site and you can see my first article written there below (Disclaimer: this is not a paid advertisement).
https://www.drwealth.com/greater-profits-fewer-losses-how-to-use-the-price-to-earnings-ratio/
Cheers.