Wow, where do I even begin, with such an exiting end to 1Q 2020 where numerous records are literally broken. COVID-19 pandemic and the OPEC Russia oil price war provided the one-two KO punch needed to jolt the market into a massive selloff, where it was widely reported investors dumping equities for liquidity. Program trading doesn't help either as triggers after triggers are hit and programs executed the algorithm they are programmed for. Huge swings became the new norm in the recent 4 weeks.
DJI ended at 21917, a drop of 6621 points (-23.20%) compared to 4Q 2019. For Singapore, STI ended at 2481, an decrease of 741 points (-23.00%) compared to last quarter. All it took was 19 trading days for DJI to fall from 29551 to 23553, turning over from a bull market to a bear market in a flash. For Singapore, STI took longer at 38 trading days. Both records are unprecedented in the time it took for the changeover.
So among this chaos, where do I stand? What have I done? Well, for starters, I don't do leverage for investment, so I do not need to sell my stocks for cash or worried about margin calls. I will say I am more a long term investors, with this market sell down, a lot of equities are attractive once again for buy ins. While I do have offloaded some positions before the sell down, they are counters not belonging to Reits or Business Trust. Lastly, USA market equities once again looks attractive. The COVID-19 situation in USA is dire, mainly because of the federal White House inaction (or President Trump's incompetency). I believe there is still 1-2 weeks more to go before we will see the virus cases peak in USA. Well enough blabbering, let's get on to sharing what I have done in 1Q:
Transaction 1: Sold all Marriott shares in January.
Well, once the COVID-19 outbreak is reported in China and I saw Trump's handling of the situation, I hesitate no longer and cash in all. Enough said.
Transaction 2: Bought back 4 batches of Marriott shares in March, from $108 down to $67.
Marriott is an asset light model company who derived their revenue from platform service fees. Being the No 1 hotel in room numbers worldwide, they have been catastrophically impacted by this COVID-19 pandemic which see their hotel occupancy dropped from 70% to 10%. $100 looks to me being an attractive price to enter into as they have dropped 28% form their peak. With dividend and share buyback program, my intention is just going to buy and wait to ride out this pandemic episode.
Transaction 3: Bought 2 batches of Man Utd shares in March, lowest being $13.79.
I am a Man Utd fan and the team looks promising for a Champion League spot should Man City be banned in the next season from participating. Prices have dropped to a level unseen before, why not buy now and sell later when EPL resume or when prices got back to $20+ level. Who knows, some Saudi consortium may come in and acquire Man Utd from the Glazers family?
Transaction 4: Bought 2 batches of Danaher shares in March.
I have known Danaher since I am part of their subsidiary company back when I first started work. This is a cash-flow generating company, using their positive cash-flow to buy companies and conduct lean manufacturing to cut out excess wastage. They have been transiting to a life science and diagnostic company since they have split off their instrumentation arm into Fortive and recently their dental arm into Envista. After a 20% drop, price look good for entering. Take a look at their past 10 years stock price chart and you will know why I am keen on this counter.
Transaction 5: Bought 1 batches of Apple shares in March.
Well, this one is everyone's favorite counter. Pipeline of new phones and gadgets looks promising. Company has been moving away from just selling phone hardware to also selling services. After a 23% drop in prices, I decide to buy a small stake to wait and ride out this pandemic situation.
Transaction 6: Bought 2 batches of Eagle H Trust shares in March.
I see the recent price drop as panic selling, with the hotel industry in USA being devastated by the COVID-19. For this counter, all the hotels are free-hold assets with the exception of Queen Mary. I find there is no reason price should crash to this low. Decided to buy in 2 small batches as the prices are just too irresistible. Well, now this counter is suspended as the hotel sponsor has defaulted on rent. Can't blame them though, no income because of this COVID-19 issue, how to pay rent? BoA, why can't you just waive the contract breaches for this period and not call in the loan. Lets see how this plays out. At current price, may decide to load more once suspension is lifted.
Transaction 7: Bought 1 batch of HPH Trust shares in March.
Well, price has dropped to an all time low and I don't see that the HK ports and China ports can get more worse than this situation. In addition, their debt reduction initiative is ending in Dec 2021. Planning to buy now and hold for situation to improve.
That is all for now. See you all in Q2 2020 update and thank you for reading thus far.
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