Buy and Sell February 2020

I was waiting for some correction to add on to my positions but it did not happen yet.

I am reminded once again how market can swing within a short period. I wrote the above line last week before the market returned all the gain for the year in the past few days. As of 11 am today, my current portfolio just dipped into the negative region. The better performance than ES3 is attributed to dividend and stronger US dollars.

So have yet to activate opportunity fund but I have tweaked my portfolio over the past few weeks based on my current sensing.

On the Singapore Market

Partially divested CRCT at $1.54 (-4.7%) and HRnetGroup at $0.595 (-4.8%). The proceeds was redeployed to add a bit more SATS at $4.50 (average $4.90), AReit at $3.25 (average  $3.17). I was also tempted by DBS’s increasing dividend and bought twice over the past month at an average price of $25.36. After reading an article that CRCT is going to support the dividend with its dry powder, I decided to add some back today at $1.43 (average $1.58).

Due to the CPF limit, I have bought ES3 periodically over the years with my OA for its dividend. I decided not to account it in my new portfolio but will still continue to track its performance against OA with 2020 as the reference year. I have just added some a few days ago at $3.148, bring my average price to $3.265. With a trailing dividend of $0.12, that will give me a dividend yield of about 3.7%. With an increase in dividend from the banks and more REITs in the index, the dividend might bump up further for the second half of the year.

On the US Market

I decided to start a mini-fund of well known SaaS counters after coming across them so often over the past two years. I know very little about SaaS business but there seems to be a real demand as they continue to grow their top lines over the past few years.

Am I late in this game? Am I buying into a bubble? 

Maybe. There is definitely a possibility that the they cannot sustain their growth rate. Coupled that with the demanding valuation, the correction or crash can come very fast when the company does not grow at the market’s expectation. On the other hand, if they can continue to scale up, then the return could be quite rewarding for the next decade.

After deciding not to add more cash to my US portfolio, I divested Booking Holdings at US$1787 (-13%) and pare down my stake for Illumina at US$279 (-16%) to fund this small adventure. In total, this punt will only take up about 2% of my portfolio and will consist of the following eight counters – MongoDB, Okta, Salesforce, Shopify, The Trade Desk, Twilo, Veeva, and Zoom. I will probably write a post about them next month.

Besides the above, I have also used the sales proceed to add more Intuitive Surgical at US$580  (average US$581), VISA at  US$198 (average US$187) and Adobe at US$360  (average US$339).

What’s next?

I am preparing to put 30% of my opportunity fund in the next fortnight if the market continues to move southwards. My planned trigger is a 5% drop in my portfolio value from end of last year. Should be pretty soon but if the market decides to do a fast rebound, then it is fine with me too.