What A Start To 2018!

The markets are just going crazy!

It’s only been 11 days into the new year, 8 of which are trading days, and SG TTI’s portfolio has gotten an explosive start to 2018, like Powell getting out of the starting blocks for the 100m.

(I’d use Usain Bolt, but he’s not known to be an explosive starter. He usually catches up and crosses the competition somewhere in the middle of the 100m dash)

In my last post (Ding Ding Ding! Closing Bell To 2017. Results Are In!), I put up the non-SG equity portion:

668) Options Dec 2017

This is that same data set today, without any cash infusion:

679) US Options.jpg

Net liquidation value grew by almost $20k USD in the past 11 days.

And that’s only the non-SG part. Total portfolio value probably grew by something like $40k or $50k since the start of the year.

I’ve been selling a shit ton of options going into 2018, and looking at how excited and frothy the markets are, it’s time to be a bit more cautious. Thus far, everything’s going my way, investing wise. I can’t help but think that sooner or later, something is just going to show up around the corner and trip me up.

680) going crazy.jpg

Yup. Anytime now. Something’s waiting around the corner.

There’s no such thing as “all good”, all the way.

Also, I haven’t compared to my benchmark STI ETF. It’s still early days, and with my previous experience, you can feel your ROI is great… until you compare it to a passive general market instrument. Then suddenly, it’s not so great after all.

Thus far though, 2018 has started with a bang for me.

Actually, I can’t remember when was the last time it started so well. (Investing wise, that is. Business…. is another story altogether.)


With the current optimism baked into the share prices, I’m only actively looking out for ideas with a clear, obvious catalyst in mind. It’s no longer enough to just look for under valuation.

That’s a given.

Now, I need a catalyst. A story. A plan.

There must be a clear sequence of events that will transpire in my mind. A timeline of sorts.

Something like my core positions in Kobe Steel & Shinsho Corporation:

TTI’s New Core Position: Shinsho Corporation & Kobe Steel

681) Kobe Steel Logo.jpg

Without which, I’d be happy to watch an “undervalued” opportunity skip, and yet continue to hold my peace.


I’m also watching, and perhaps am also rather bemused actually, with all the hype and saga surrounding bitcoins and blockchain etc.

Some great fortune is being made there, and correspondingly, some great fortune will be lost there too.

Even some of my lunch buddies are talking about it.

Perhaps it’s just my psyche, I’ve never gotten seduced by Bitcoin, never got attracted to it, and still ain’t. It doesn’t matter how high it goes, what it does.

I’m just………….. nonchalant.

My personal view is that most people are just speculating in it, most people don’t even know what they are doing, and like moths to a naked flame, eventually, they get burnt.

But for now, the stories of untold riches continue, and I’m just listening to them. Some would jump in and out quickly, and perhaps the returns would be impressive enough for the short duration, but on a big picture scale, these are always going to be speculative.

The problem with bitcoins and the like is that even the staunchest of supporters, would not dare to take a big enough position relative to their portfolios.

TTI continues to be unmoved.

But of course.

I’m infamously low tech, and an incredibly slow adopter. Perhaps, 1 day in the distant future, bitcoins will be the way to make payments worldwide, and I’d be forced to eat humble pie. Perhaps THEN, I’d think about it.

Until that time, I just absolutely hate tech stuff. It doesn’t make any sense to me.

And to think I actually have a Diploma in Computing Science. Yes. I do. Seriously. It was just something that was almost forced upon me during my younger days. Something like a CCA. Part-time too. It was more for working adults to upgrade themselves, and yet, I as a 17 year old kiddo studying in JC, joined them.

Yet, my knowledge of computing and tech related stuff, is worse than a kid’s. I’d hereby confess that my final project for the diploma, was done entirely by my teammates. Like 100% of it. I didn’t do anything except buy drinks and food each time we meet up. (And even then, they usually insisted on paying me back since they were all working adults and I was by far, the youngest, and the only full time student then)

Yet, I managed to graduate as one of the top scorers. 

Cos I just memorized everything in the textbook and regurgitated everything in the exams. Word for word. Literally. Down to the page number.

Zero applicability to my future, zero usability in my career and zero understanding of what I’m regurgitating.

I once asked a techie friend of mine: “hey, I’ve an old laptop. Some days when I turn it on, it works. Some days, it just doesn’t even turn on. How is that possible? It’s a machine. If something’s broken, it should NOT work regardless of when I turn it on right? If it’s NOT broken, shouldn’t it work all the time? Isn’t it supposed to be binary? How can a machine have moods?”

And he went on and on about the various possible scenarios. But it still didn’t make sense to me.

How can the same action, elicit different responses FROM A MACHINE? Can anybody explain this to me?

If a human has say… a bone fracture. You see it on the x-ray, there’s a fracture.

You can take the same x-ray in various angles, today and tomorrow and next week (Assuming it hasn’t healed), you’d see the same fracture there.

It doesn’t disappear. It’s predictable.

You can find out the reasons for the given scenario, and you can understand how this scenario came about, and you can manage it.

Not with tech stuff. My old laptop can decide to work or not work on different days. Hell, sometimes it doesn’t work, I leave it aside and come back in an hour, press the “on” button, and it suddenly works!

It just doesn’t make any sense to me.

Like bitcoins.


Anyway, that’s all I have for this post.

I’d be real happy if this same rate of growth persists for the rest of 2018 (whilst the general market crashes and burns!), and I wish the same for all readers of SG TTI.

Godspeed!

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4 comments

  1. Hi TTI,

    I have the exact sentiments with regards to the market. I think people are too optimistic with respect to the future, a lot of people I observed are putting their money into investments. Most of companies I am monitoring have their growth baked into the stock price. The stock market is hitting record highs and by every valuation measure it is overpriced. The excessive capital from QE has also flowed into private equity and even into alternate investments like cryptocurrencies. These are signs of a market top.

    From my following of US, SG and some China management commentaries, companies are having labour crunch and unemployment has hit record low. Undoubtedly, the QE money has finally “taken effect” and accelerating inflationary pressures is here. The Fed will no doubt be more aggressive in hiking interest rate to control inflation. When that does happen asset prices will be affected and many people are going to be disappointed… This is the time to be cautious. The other scenario is the Fed will allow inflation to run out of control and we might have a Venezuela-similar scenario in time to come.

    Anyhow, may I ask, so whats the issue with your laptop? I have the same issue with mine as well! Ha!

    Like

    1. Hi Botak
      Thanks for your thoughts.
      It does seem like that’s the path it’s going to go huh.
      But then again, this story of QE causing hyperinflation has been floated around for several years now, and the inflation has been stubbornly low.
      Maybe 2018 will be the year when the chickens come home to roost.
      If the Fed does get more aggressive with rates in 2018, then the 1st guys to be impacted would be the REITs and the highly leveraged companies.
      US banks on the other hand, would have a field day.
      This is the time to be cautious indeed.

      My laptop has mood swings. I am just writing this down, so that the day a “Sky-net” equivalent takes over the world ala Terminator style, I can at least say “I told you guys so”

      Cheers!
      TTI

      Like

  2. Hi TTI
    I have been a long time reader, always impressed by your articles.
    Easy to read, and I have learnt a lot from them.
    Your recent core position in Shinsho corporation was an eye opener, I read about the Kobe Steel scandal, but a normal person wouldn’t investigate so deep as to discover Shinsho corporation.
    I have been following closely, and your positions have been up a lot since then right?
    Can you share about the exit? When would you decide to realize this gain?

    Like

    1. Hi
      Thanks for reading.
      Yep, both Kobe and Shinsho have risen substantially, and as expected, Shinsho a lot more than Kobe.

      As for the exit, well, Kobe traditionally trades at a slightly lower PE compared to it’s 2 larger peers, so that gives a rough indication of the share price that I’d look to exit at.
      The PEs for the entire steel industry is rising currently though, as their earnings are just simply exploding.
      I think I’d at least wait till the earnings are released (On 2nd Feb I think) before deciding.
      Right now, I still think the markets are overpricing the severity, although this has abated somewhat.
      I think the earnings will surprise the markets, as the fallout from the scandal is much more limited than what most people think.

      Cheers
      TTI

      Like

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