TT Portfolio Performance & Review

Just realized that my last overall portfolio performance update was back in June 2018, and I haven’t been updating it for the past 10 months.

The page is now updated and revamped. I’ve added in a line chart of the portfolio size, going back to 2011 since I’ve started tracking. Note that this includes any capital injections or withdrawals. (Mostly injections, except for 2015 and thus far, in 2019).

I’ve opted not to add to the portfolio thus far in 2019, as I’ve shunted some capital into the property fund instead. Hopefully, there’d be some firesales that come up soon. Thus far, all the “firesales” that I’ve seen, are not really firesales but just marketing ploys.

I’ve only really seen 1 true blue firesale a couple of years back, and I was too slow (problems with not having liquidity on standby), and missed out on it. You know it’s a true firesale when the unit gets a confirmed offer and the whole deal is tied down less than a fortnight from the time it got listed. The buyer got real lucky there, as he/she is sitting on at least $550k in gains, and it’s only been 2 years.

856) lantern.jpg

(Yes, that’s TTI’s lantern flying away)


SG Markets

Total portfolio value in SG markets is $384,033.

I’ve hardly had any activities in the SG market in 2019, only transactions being to lighten my stake in Geo Energy Resources, a stake I’ve held since 2016:

Geo Energy Resources Investing Thesis – Part I

Geo Energy Resources Investing Thesis Part II

My current SG portfolio comprises Alliance Minerals Assets, Geo Energy Resources, Dutech Holdings, Venture Corp and Q&M Dental.

I’m not currently evaluating anything new on SGX, and so, correspondingly, will not be likely to add anything on SGX. If anything, further divestments are likely.

Dutech Holdings just concluded their AGM, and although I didn’t attend, I was given a comprehensive account of what transpired by a friend who attended. In short, it doesn’t seem to hold very good news. I’m still holding, and optimistic about my stake though. The last earnings report was very satisfying to me, and I believe Johnny has made more progress on the integration of their acquisitions. AFAIK, Metric continues to be the 1 bleeding arm, and I hope 2019 will finally show a turnaround there.

Bonds

Nothing much to talk about here, the bond portfolio is approximately $550,000. The intention is to leave all coupons to compound, with next to zero activity here.

US / Global Markets

This is where I’ve focused all my attention on, with stellar results.

Results that have way surpassed what I was expecting myself.

Current portfolio value here is USD 649,167.44 or SGD 884,230.97.

As a continuation of these updates:

Best. January. Ever.

Best. February. Ever.

Best. Mar……….. You Know The Drill!

I should’ve titled this post Best. April. Ever……

851) US portfolio Apr 2019.jpg

Hitting a new YTD high of 40.61% ROI, this has been the best start to a year that I’ve ever had.

NAV increased from USD 441,055.43 to USD 650,993.49, inclusive of a capital injection of USD 29,526.10.

NAV gain is USD 209,938.06, and net capital gains YTD is thus USD 180,411.96.

My strategy in the global markets is an extension of what I’ve always been doing.

It’s 2 pronged.

Using options, I try to generate regular positive cashflows by capturing premiums on contracts that I think are either unlikely to get exercised, and/or contracts that I’d be happy if they get exercised.

Using the cashflows from these options, which can take several weeks or even months to expire/exercise, I look for unique situations whereby there’s potentially a huge return, relative to the present risk. Of course, these situations would usually crop up in instances of severe duress, and that’s when I love to commit large amounts of capital to. Wirecard being a most recent case in point.

YTD 40.61% means I’ve managed to completely trash the passive indices thus far this year, by taking on asymmetrical and contrarian positions.

852) US benchmarks

What strikes me is that the global passive indices have actually done very well too. SPX (which is an S&P500 index ETF), has exceeded 16% ROI YTD, which in any other given year, is a very VERY  impressive return in itself, considering it’s only been 4 months.

I don’t believe beating the passive benchmarks can be achieved without significant volatility though, and my portfolio hasn’t been an exception:

853) benchmark.jpg

The volatility sure looks crazy.

On good days, TTI’s portfolio wildly outperforms the global indices by a mile. I mean, just look at that straight blue line somewhere around the 27/03/2019 mark.

The reason for all this volatility is the large, concentrated, contrarian positions. If the position does well, the impact on the overall portfolio is very much significant. If it does poorly, the reverse is true as well.

There are also several blue lines well into the negative territory, and many times, the blue line has gone the opposite direction of the global markets, whereas the green, purple and yellow lines have moved in lockstep.

Perhaps this is most instructive:

854) Risk analysis.jpg

Despite returning more than DOUBLE that of the next best passive index, TTI’s portfolio had only 47 positive periods, whereas the other 3 indices had 53 – 54 positive periods.

TTI’s portfolio also had 36 negative periods, which is way more than the 29-30 negative periods for the benchmarks.

This can only mean 1 thing:

I’ve been making the “positive periods” count, while trying to ensure the “negative periods” hurt that much lesser.

Which is actually, an extension of a lesson I’ve learnt from Stanley Druckenmiller (I’m sure I’ve already quoted this before somewhere in this blog):

I’ve learned many things from [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”

I’ve taken some profit off the table on my wirecard positions, but still hold a significant stake in the form of 1,500 shares held directly, and several put options sold.

I’ve had time to evaluate their most recently released 2018 full year results, and there hasn’t been any surprises there. Even their guidance for 2019 hasn’t moved 1 bit. The shares are pricey though, and I generally don’t share the level of enthusiasm as most analysts that are positive on the company.

Nothing grows forever.

Yup. It’s pretty amazing that this is so logical, but the markets, and human psychology, always expects the most recent trend to continue indefinitely. My layman explanation for this is that the markets would always have new entrants and exits, so for those who have just bought into a growth story, the story always seems to have “just started”.

Currently, I’m assigning a PE of around 45, and a forward EPS of 3.8 euros, giving a fair value of around 170 euros. But since I believe in leaving something on the table, I’d look to sell calls with strike prices of around 160 euros.

Thus far, my total profit, both recognized and unrecognized, sits at around 58k euros, and that accounts for a big chunk of the YTD capital gains.


On average, every year, I’d put serious capital to work into just 2-3 big ideas, after evaluating tens of ideas. I know that I only need to get these 2 or 3 right. The rest are just the sugar icing.

If these concentrated positions pan out, the returns would likely beat the markets handily. If they don’t… well, I try to make sure I realize it soon enough, and don’t let the mistakes be fatal.

Having assessed several ideas, some of which are brought to me by my readers actually (thank you for that), I’ve decided to start deploying serious capital into the next company.

It’s a really interesting situation here, and I’ve already started building up a sizable position, but as the liquidity is low and the spread is at times, humongous, it’d take some time before I can finish accumulating a position that I’m happy with.

I’ve previously hinted at this in my last post:

Best. Mar……….. You Know The Drill!

Apparently, it’s not very subtle cos some folks already figured out what I’m talking about (Look at the comments section)

Which is pretty amazing considering that I’ve done nothing except to cut and paste some financials, out of the thousands of companies out there.

Maybe I’d post up my due diligence next, it’s rather comprehensive and intense though, as this is an industry that I’m very familiar with, and the industry jargon isn’t exactly easy to understand for the layman. I’ve had correspondence with the management too, and although the CEO has been very cautious in not revealing any information that she isn’t allowed to, reading between the lines has allowed me to glean tidbits of information that has been useful.

That’s all I have for this post.

Investing is a really long and tedious journey, and the best investors are usually the ones who are not afraid to walk it alone, and in fact, wouldn’t have it any other way. I leave you readers with this photo I took recently.

857) journeyGodspeed.

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Best. Mar……….. You Know The Drill!

Oh Boy. I really could get used to this.

1 post every mth, “Best ____ Ever” everytime.

I’d let the stats do the talking:

847) March 2019 ROI

With yesterday’s massive rise, a huge 15.61% portfolio gain in a single day, the ROI has shot up to 37.76% YTD.

NAV sits at USD 606,056.73, crossing the USD 600k mark for the 1st time (For US portfolio), with no capital injections too.

Taking into account a withdrawal of USD16.90, the total net capital gains YTD is… USD 165,001.13! 

EDIT: Did math wrongly. With a withdrawal of USD 16.90, the total net capital gains should be USD 165,018.20!

Obviously, the ride hasn’t been 1 way up though.

The 1 day spike yesterday masked a period of a few tough weeks when the ROI kept dropping (see in chart)

The reason for that is my US portfolio’s huge exposure to Wirecard.

Best. February. Ever.

With the latest report by the esteemed Rajah&Tan, the markets’ fears were proven wrong, and my wirecard positions jumped a cool 26% in a single night.

The numbers being thrown around prior to this were confirmed in the report, and they are puny. A mis statement of 2mil euros ++ for a company with over 2bil euro in revenue….

That’s 3 decimal places. I don’t even know how they are going to restate that in the financials.

But those numbers haven’t changed. What really happened is that the markets are now reassured that this is just a small insignificant event, and not the worst case scenario of widespread fraud that some doomsayers were forecasting.

Since the position is worth 6 digit euros, it added strongly to the outperformance.

37.76%! I mean, I honestly would’ve taken half of that number and closed out the year if you made me that offer at the start of 2019.

37.76% beats almost every professional US fund manager I track. Even Bill Ackman is a tad behind at 31.9%

https://www.channelnewsasia.com/news/business/ackman-s-fund-zooms-ahead-as-he-casts-himself-as-corporate-helpmate-11379398

I’ve sold several calls yesterday to take advantage of the spike in volatility, but the nett position remains a long one. Very much so in fact.

My take is that the share price will continue to rise (it’s slightly red today as some jittery shareholders take profit after yesterday’s rise).

Yet, it’s not smooth sailing. There’s still 1 hump ahead, and I think that relates to Wirecard’s acquisition activities there. I don’t think that has as much coverage as the supposed few million euro restatement, which is curious, cos if anything, that’s potentially a bigger worry to me than this few million euros worth.


In any case, I’ve been keeping busy by looking for the next idea to put some serious capital to work.

As I’ve said before, it usually takes several weeks, or even months, of due diligence, before I start allocating capital, for large, core positions.

That means that in any given year, I’d probably have only… perhaps, 3-4 core, big ideas and I only need to get these right and it’d be a massively good year.

My next idea though, really comes from a reader of SG TTI. No credits yet, as I haven’t asked the said reader, and also, cos I’m still accumulating. It’s going to be a looooong position though, and it’d take time.

It’s definitely not your typical “value” play here, or rather, I think it is, but the numbers would certainly scare away most “value investors”.

Here’s a teaser.

Would you buy a company that reports these numbers?!

848) financials

Losing money year after year, and more and more too!

Balance sheet is even more horrendous!

849) negative equity

Negative equity! My god.

Don’t even get me started on the cashflows. It’s negative operating CFs and negative FCF and negative any parameter you can think of!

Scared enough?

Everybody’s running far away from this! Even Hyflux in it’s current form, looks better! LOL.

But TTI’s accumulating gradually, and I’d continue to do so over the next couple of months until it reaches a sizable position, as long as the investing thesis doesn’t change.

Yes, it is atypical for sure.

But just like Wirecard and GDS holdings (11% Returns In A Single Day. Thank You Blue Orca Capital!) and Shinsho Corporation (Divestment Of Shinsho Corporation & Kobe Steel – TTI’s Post-Mortem), the greatest rewards lie in the most atypical situations.

#Ballsofsteel.