Quick update on my portfolio performance, it is probably the worst quarter I have experienced. I got a little too excited during the first few weeks of the downturn and bought too much. As the days turn to weeks, I felt like how the band continued to play when the Titanic was sinking. Depressing
What have I been buying? Well, oil tankers mostly, STNG, TNK, EURN, FRO, NAT(sold), INSW(sold), DHT(sold), you name it, I have it. They now comprise about 25% of my portfolio. With extremely low demand for crude and refined products like jet fuel, oil companies are starting to charter tankers to store oil and this had caused VLCC rates to rocket.
As for Singapore stocks, I have added to my existing holdings of Valuetronics, Powermatic Data etc which I have mentioned in my previous posts.
I also added Aercap (NYSE:AER), ,the largest airplane leasing company, somewhere near the lows. Main investment narrative is that AER is priced such that its clients will go bankrupt and not be able to pay the lease. However, we have seen numerous bailouts of national carriers which is positive for the airlines’ creditors like Aercap. Also, it is now trading at PEx2.5 (PEx1.5 when I bought it) which is extremely cheap.
By the way my favorite ratio to use now is EBITAC = Earnings Before Interest, Taxes, Depreciation, Amortization and Coronavirus haha. With so much stimulus going around, I believe that those with low EV/EBITAC will benefit the most as they resume to normal operations (NOT INVESTMENT ADVICE).
Moss Piglet Turns One!
Wow, when I first started to blog, it was mainly to record down my thoughts and investment thesis so that I have something to refer to when stock price performance are not going my way. Looking back my posts, I can’t believe that it has only been a year’s worth of writing.
Would like to thank my those that followed my blog and I’m also grateful to those that commented and post questions on some of my articles which made me revisit my thesis. Hopefully you guys are doing better than me right now.
Thanks for all your support!
5 thoughts on “Quarterly Review – It’s Bad”
-15% performance is already better than 95% of the market participants. Good job.
most long-term investors like myself lose more than 25% but holding on. you are doing much better. make sure you got enough cash to hang on the ride like that of the GFC
Kuppy’s tanker trade is interesting, but how do we know if the market stays in contango beyond a few quarters? May be a great trade, but risky. If I took it, I’d size it small. Unless your’e young enough to take wild risks & start over.
Yeah shipping sector is definitely high risk. I did not enter it because of contango but rather changes due to IMO2020 which has disrupted shipping as a whole (low sulfer requirements, lower newbuilds, higher demand for clean tankers, scrubber savings etc etc).
Contango also sort of reinforces the fact that shipping is quite unpredictable.
I admit I got a little excited and bought too many shipping stocks last month and I’m currently taking some profit off the table in order to have a more comfortable balance (somewhere ranging 5-10% of portfolio is good enough for me).
Thanks for the reply. Just my thoughts. I did not take the trade because I do not have the resources to track shipping rates and new build ship supply (demand is always unknown). Kuppy’s ideas are very smart, and he’s a great writer, which was good for last year. But this year I think we don’t be smart. Not too many steps ahead of the mkt. Just need the zen patience to hold off when the market is going down, then later big balls to aggressively buy when it turns. Currently in the US/intl markets, the only value I see is in hospitality/travel, he wrote a post on that. I think (and hope) the market drops at least a few months & we get more value.
The tanker trade was tempting. Good luck with it!