Nov has been a crazy month. New president (yay), stock market rallies, and COVID-19 exploding in the US. I’ve also crossed the $1 million dollar mark in liquid assets. Celebrated by going to MOS burger with the wife.
|Name||Bought price||Current Price||Market Value||Gain/Loss (SGD)|
|Temasek 3.625%||102.2||117.7||USD $294,000||$53,505|
|Pimco Income Fund 4%||10.08||10.08||SGD $220,000||– $3,274|
|Lifelong Income insurance plan||–||–||SGD $220,000||–|
I had sold off my two remaining coco bonds from Commerzbank and HSBC. This has reduced my passive income to about $4,000 per month, which is generally able to meet my monthly household expenses. Timing again was bad as the bonds have rallied up, and I could gained $10k more if I was just a bit more patient.
However, I’ve been growing more sceptical of the ability of the finance industry to make me money. I have collectively lost about $30,000 due to their advice, plus much more in opportunity cost. Not once have my relationship managers recommended me anything that I consider a real winner. Honestly, its better to read up on your own.
I’ve also become more disinterested in both government and corporate bonds. There was an interesting clip by Cramer recently. He said that stocks are the new bonds. Meaning that they are both safer and have better fundamentals than banks or governments. The big tech companies like Apple, Amazon, Google, hold billions in cash and continue to get business. They don’t need to borrow money or rely on handouts. They are not going bankrupt anytime soon.
Governments on the other hand, are creating massive debt to fund their spending and to save certain industries. But who is going to buy their 1% or negative yield bonds? It just isn’t worth it. Bonds may not be the safe haven people think they are. The so-called balanced portfolio is quickly becoming irrelevant. I think more people will come to realise it soon.
Total = $837,000 x 30% asset value = $251,000
I’m hopeful that 2021 will be a good year for stocks. As mentioned before, the pandemic should end, and interest rates remain low. The chances of massive stimulus is not as much though, due to the Republican senate.
Moving on to individual stocks, I’m really optimistic about AMD’s prospects ahead. Their new graphics and processing chips are completely sold out, and likely to stay that way for months. When I see a company having a product like that, I want to buy as much of it as possible.
I’ve been averaging up into Palantir, which has been on a tear. Regretting I did not buy in more boldly while it was still below $15. I took my usual baby steps, going in at about USD $10k at a time. While I do think it has become rather speculative, its a long-term hold for me for the multi-bagger potential. I’ll likely buy more if there is a dip.
Tesla has finally turned green for me. It has been trading sideways for a few months, and I was beginning to think it was a mistake. But with the inclusion of Tesla into the S&P 500, the stock jumped more than 15% this week. Have to keep the faith. This is a stock I would hold for years.
Alibaba has been disappointing and has continued to go down. It may be a while before the negativity about the Ant ipo goes away. Still, there is reason to be optimistic about Alibaba in the long-term, and will be keeping it for now. I see it as a steady grower and stabiliser, something to balance out the Tesla and Palantir stakes.
I’ll probably sell Microsoft once it goes back up a bit. I think I would rather have the 8K to either buy more of my favourites or shore up the margin account.
|Name||Market Value (USD)||Gain/Loss (USD)||Gain/Loss (%)|
|SPDR S&P 500||47,381||13,769||48%|
Margin used is modest at below $200,000. I realise that as long as you use just a fraction of it, margin can be pretty safe. I’ve been steadily increasing its use, and will probably go over $200,000. Stress-testing shows that I can withstand a drop of over 50% before a margin call.
Stock total = $924,000 – $190,000 (estimated margin) = $734,000
- $5,000 in Singlife
- $10,000 in Singtel Dash/Etiqua
- $10,000 in OCBC 360
- $5,000 in CIMB accounts
- $10,000 in joint account with wife
Have withdrawn $15,000 in cash to plop into the margin account. The interest rate I’m being charged there is higher than what I would earn by letting it sit in Etiqua and Singlife. It leaves me with little cash on hand, but I really don’t need to hold cash. Much better to invest it.
Total portfolio value:
It’s nice to have crossed $1 million in liquid assets. While I have stated it is no big deal, I’ll like to enjoy my moment for a little while.
What has astonished me is that I had done this while not working. The last 2 years when I did go back to work, my investing returns were near zero. I started 2020 with about $830,000, pretty much the same amount I had in 2018. So two years with no appreciable gains, despite having income from work.
It wasn’t because the stock market went down, because it didn’t. It was due to missteps like trying to time the market and panicking when my stocks dropped. If I had held everything I originally bought, I would be a much richer man today.
2020 was when things started to click. The painful lessons were internalised. I realised that I needed to figure out how my portfolio can work for me, otherwise I would be watching it seep away.
I gained almost $200,000 in my net-worth in 2020. Adding the estimated $50,000 I spent in this year, it means I made $250,000 in 2020 alone. Investment returns made up about $170,000 of that, and I generated ~20% investment returns this year.
And I find myself wondering, why can’t I keep doing this? Why is it difficult to imagine that I can achieve a long-term positive return and beat the market? With the ending of formal employment, I find myself thinking it is no longer optional to be a mediocre investor.
Perhaps it is time to believe that it is indeed possible to win at the stock market. I had fears of doing this because of my family’s generally poor experience with stocks, but maybe I’m different. We’ll see.