June 2020 Portfolio Update

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

Leveraged Portfolio

NameBought priceCurrent PriceMarket Value
Temasek 3.625%102.2117.272USD $293,000
Commerzbank 7% perpetual106.8596.858USD $193,000
Credit Suisse 5.625% perpetual103.2599.7SGD $249,000
HSBC 5% perpetual104.498.775SGD $237,500
Pimco Income Fund 4% 10.089.77SGD $213,000
Correct as of 22 May 2020

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.

Margin Valuation Report

Stock Portfolio

Shares in Cash Account
Shares in Margin Account

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

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