Just realized that I haven’t updated this blog for 9 months! Hello hello, I’m still very much alive, not dead yet. Borders have largely reopened everywhere except for the forbidden city, life is exciting once again as I get to see the world and experience stuff again, so SG TTI took a backseat for a while.
Back in March of this year, as the world was creeping back to normalcy, I polled InvestingNote and asked them where I should go:
162 folks collectively decided on Denmark, which was a total surprise to me tbh. I’d have thought Egypt or Maldives would be top choices by the random folks in InvestingNote, but it turned out Denmark won convincingly with 1/3 of the total vote count. So… 恭敬不如從命, I have to defer to the wisdom of the crowds:
P.S. This poll was started just before Sri Lanka self destructed with internal strife and riots, hence the “seems kids friendly”. Parents with young kids and elderly, don’t go hor.
View of Copenhagen from the top of a spire
TTI’s mum. LOL.
My yacht, berthed somewhere in Copenhagen currently.
Look at the bright skies… guess what time of the day was this photo taken?
Believe it or not… it was close to 9pm! Long summer days!
PS: It was like the very start of summer, so it was still very chilly, like between 8-15 degrees.
I was in an art museum when my mum brought my attention to this unique clock. I wanted to buy it (cos TTI likes to collect this kinda weird and unusual stuff) but the dude at the counter said it’s not for sale… The time reads 1:22pm.
I gotta say, in general, I like the Scandinavian “vibe”… cities are safe and the people there are generally friendly, polite and helpful. Tourists feel welcome and in the 2.5 weeks that we were there, there was no instance of racism experienced, unlike in many of the major European cities, or in US and Australia.
My travel destination for Dec 2023 is already more or less decided upon, but June 2023 is still up in the air. Anyone has any unique travel experience that’s suitable for a family with elderly and young kids, pls kindly let me know. These days, I’m looking out for travel experiences, not destinations. The destination doesn’t really matter tbh. Like in Europe, after a while, every european city feels kinda the same. A bit boring. So what’s more important is the activities.
Long time readers would know that travel is like my only “vice”. I’m not interested in fashion at all, don’t like to collect watches (don’t even own 1 currently, gave my last Tag Heuer away cos it was collecting dust for years!), I don’t smoke nor do I drink much, not interested in fast cars, no mistress currently either, so literally, travelling and collecting experiences with family is my only major expense.
On a different note, my mum recently found an ancient relic in her storeroom that I created when I was 10yrs old.
That’s freaking 30 YEARS ago…
It’s mind boggling to me that I’m holding something that a ginah TTI created with his precious time as a 10yr old kiddo. No kidding man, this is a real relic. 30 years ago!
In my defence, in those days, the internet didn’t exist. You can’t just google up this sorta material anytime. Hmmm 30yrs ago, that’s primary 4, so yeah, I don’t even think we had the dial up modem yet.
Singapore currently has 5 internationally ranked chess grandmasters… and I’m proud to say that 1 of them was my teammate 22 yrs ago. Not hard to guess who, since only 1 is around my age range.
Anyway, this find kinda mini inspired me a bit, so maybe I’d go refresh my skills a bit and 重出江湖. I’ve already started transferring 武功 to my son, so let’s see.
OK, now let’s get down to the serious business of investing.
Right at the start of 2022, on the 12th Jan, I prophetically wrote that the aggressiveness of rate hikes will surprise most folks.
lol, no shit man:
Currently, we have reached somewhat of an impasse between bulls and bears: Fed is already signaling a slowdown in rate hikes, with a projected 0.5% in Dec. I don’t think we will see a deviation from that, if the Fed has signaled that to the markets, that’s what it will be. I also don’t think it’s a big market mover either: perhaps the markets may have a brief rally when it’s 0.5%, that’d be almost symbolic. Rates are STILL going to have to rise a lot, and it’s barely a relief to debt laden businesses if you have to pay more and more for your debt, just that the increase is a tad slower than before.
TTF has done pretty well in 2022. I was intending to write the next TTF fund report at the close of 2022, but hey, TTF is now no longer a “teenager” (NAV wise) and has grown into a young adult in his 20s… That deserves a report on it’s own.
SINCE INCEPTION (FEB 2020), ANNUALIZED:
For reference, the last fund report:https://thumbtackinvestor.wordpress.com/2022/02/16/thumbtack-fund-report-11-2-year-anniversary/
Note: Returns are MWRs, all figures in USD
TTF’s NAV: USD 2,004,485.72
Deposits/Withdrawals: USD 1,620,895.31
Nett capital gains since inception: USD 383,590.41
Since TTF was incorporated in Feb 2020, this means that TTF has enjoyed a nett gain of USD 383,590.41 over a period of 33 months of investment activity, which works out to be USD 11,624 every month, or approximately SGD 16k per month from Feb 2020 to date. That’s not too bad, but tbh, not that superb either for the effort that I’ve focused on for TTF. My other portfolio only returned slightly lesser despite me putting much less effort and attention on it (but of course it has a much larger AUM)
So what lies ahead?
The markets are likely to remain somewhat bullish, as everybody’s anticipating a bit of relief from the Fed. This is not investment advice obviously, but if you ask me, personally, I’d rather stay skeptical and keep a lot of gunpowder dry. It’s hard to imagine that with the confluence of all the problems that the world has, we see a peak to trough of only -25% or so only, and that we will go on to make new highs from here.
The markets is a picture reflecting the SENTIMENT of all market participants, but if we look at the real economy, it’s obvious to me that there are big problems ahead. After years and years of cheap liquidity, it’s hard to imagine that we won’t see more collapses of companies that have over leveraged and found themselves in a pickle. Crypto and NFTs may have collapsed, as they should’ve, but in the real world, I’m sure many corporates are going to struggle to keep up with the new high interest rate environment. This will likely last for years on end.
On a personal level, I currently hold the HIGHEST level of liquidity, quantum wise, that I have ever held in my life. I’m just waiting for some fire sales, esp in SG property market, to happen. Right now, it’s more like the sales are on fire, rather than fire sales. Property showrooms are flooded, and projects are almost fully sold within the week they launch.
TBH, I’m almost praying for more market turmoil. I don’t mind it, I welcome it in fact. My strategy with TTF has always anticipated this. In good years, when the markets are booming, TTF would likely only match, or slightly underperform or slightly outperform the benchmarks. It’s hard to beat the benchmark when things are rosy because of my preference for some level of prudence.
The stark difference between 2021 and 2022 illustrates this concept: https://thumbtackinvestor.wordpress.com/2022/01/07/thumbtack-fund-report-10-hello-2022/
Despite a MWR of +24.91% for 2021, TTF underperformed SPY as it returned +29.07%.
+29.07! How do you beat that?
In bad years though, that’s where my strategy would greatly outperform, by seeking out specific pockets of extreme over or under valuation, probably due to short term sentiment, and capitalize on this volatility, mainly by using options. All whilst limiting risk in other aspects.
In short, TTF is playing like the old Chelsea under Jose Mourinho: When SPY is doing well and attacking, TTF soaks up the attack and seeks to avoid letting in goals (match benchmarks as much as possible), we park the freaking bus in front of the goal and do everything to not fall behind……. but when the opportunity arises, SPY’s defence is weak, then TTF counterattacks with lightning speed and with deadly precision, scoring at will.
Finally, I’d close by saying this: many folks forget that investing is a long game. It’s supposed to be. To win this game, what’s the most important thing? To survive at all times, under all circumstances.
Warren Buffett says: “In order to succeed, you must first survive.”
It’s ridiculous to talk about your edge during good times, if you can’t even survive the bad times.
This year, we have seen massive fortunes disappear from the collapses of stuff like Luna, NFTs, Chinese tech, FTX etc
To be a true winner over the long run, let’s not talk about having an edge first. We need to have the ability to not capitulate and die terribly when the 1st wave of a tsunami hits, before the edge actually matters. One can already get moderately wealthy over the long run, by simply not doing dumb stuff, avoiding big critical mistakes, and compounding over the long run. If you so happen to have an edge over the markets in the midst of doing so, well, good for you, that’s when you get uber crazy wealthy.
But surely, not dying is the most fundamental, basic premise that one has to focus on, in the game of investing.
It’s exactly like in chess. You can set traps here and there, you can try to gain space, you can do a pawn storm, you can control the magic squares, you can do all that…….. but if you make 1 stupid mistake and fail to protect your king, the game’s over, and everything else doesn’t matter anymore.
If you understand this critical concept, then you’d understand why I’m keeping an unusually large amount of liquidity in such times, irregardless of whether the markets are going to recover.
Alright, that’s it for this report. There’s still 1 last month left for 2023, God willing, I’m hoping to extend this lead further from +6.82% into double digit %s.
Good luck to all.