June 2020 Portfolio Update

It’s near the end of the month, so it’s about time to do a portfolio update.

Leveraged Portfolio

Name	Bought price	Current Price	Market Value
Temasek 3.625%	102.2	117.272	USD $293,000
Commerzbank 7% perpetual	106.85	96.858	USD $193,000
Credit Suisse 5.625% perpetual	103.25	99.7	SGD $249,000
HSBC 5% perpetual	104.4	98.775	SGD $237,500
Pimco Income Fund 4%	10.08	9.77	SGD $213,000

Total market value has increased to about SGD $1.38m, up from $1.36m. Assuming the full 70% Loan-to-Value (LTV), my real asset value is SGD $415,000, with financing of $970,000. This also takes into account the drop in USD to SGD from 1.42 to 1.39.

Prices have continued to improve slightly, though the pace has slowed. My earlier $100,000 loss from the Coco bonds has been narrowed to about $50,000. But I have gained from the Temasek bond, so the portfolio is about even.

Cash-flow from this is about $48,000 a year, or a 9%-10% yield to maturity.

I have been thinking if I want to leverage more and increase my cash flow. I do have sufficient funds to buy into another bond or income fund. But I’m content with the cash-flow I have, and there is no real need to chase every dollar. I don’t care if my stocks fluctuate 10% or so. That is part of the game. But I sit up when it does the same when there is leverage, because it becomes 20%-30%. I don’t like being called up suddenly for a margin call. Better to sleep well.

The margin valuation report remains healthy at 174%. I can pledge another $100,000 worth of stocks, making a sizeable buffer against market plunges.

Stock Portfolio

In case you can’t guess, these are direct screen shots from my app. I have two stock trading accounts. One is my cash trading account, which holds my more recent trades, while the other is the margin account, where I pledge shares for leverage.

Stocks look green except for Johnson & Johnson, and Booking.com.

Those two has been a bit disappointing. Human nature is that we feel more pain on a 10% loss than a 20% gain. I’m likely to still hold and wait it out.

There is also this rubbish SGX stock Pacific Radiance, which has been suspended from trading since Feb 2018. I have written off the entire $10,000 investment. It has taught me to totally disregard “hot tips” from friends and relatives. It was also the last straw and I have lost faith with SGX stocks, especially the small caps.

The interesting thing to me is that I still don’t beat the S&P 500 ETF most of the time. This is despite putting more effort and time into reading up on particular stock selections.

When I buy the S&P 500 ETF, I spend less time thinking about it than buying a fish at the market. There is no need to think, because the S&P is a self-correcting mechanism. It kicks out companies which sink too low, while it boosts its share of companies which are doing well.

Total stock portfolio value = SGD $385,000

Cash

Cash has gone down as I have continued to buy into US equities. Have about USD $43,000, and about SGD $20,000.

I’m not sure of the amount of cash in my margin account. The brokerage system isn’t smart enough to differentiate the actual cash I put in, and all the assets are lumped together. So my cash within the margin account rises and falls depending on the value of my stocks and bonds. The last I heard was that I could withdraw up $150,000 in SGD. This can be done because my margin valuation is fairly high. If your valuation is at the borderline of 140%, you can’t withdraw cash. I don’t include cash in the margin account in my net-worth.

Net-worth

Total net-worth = $415,000 bonds + $385,000 stocks + $80,000 cash = SGD $880,000