Wednesday, October 6, 2021

Dividend Warrior's Q3 2021 Portfolio Update - Tech Shopping Spree!

(Total cumulative dividends of S$199, 900)

Top 12 Holdings (30 Sep 2021)

Portfolio Cost: S$530, 295
Portfolio Market Value: S$748, 868 
Portfolio Overall Unrealized Profit: +S$218, 573 (+41.2%)
Portfolio XIRR (FY2021): +12.01%
Dividends Collected (9M 2021): S$22, 833
Current Warchest: S$23, 700

(*All figures are accurate as of 30 Sep 2021)

Portfolio Actions in Q3 2021:

  • Accumulated more Alibaba shares at HK$150 - HK$160 range
  • Accumulated more Tesla shares at US$725 
  • Initiated new position on Sea Ltd at US$326 

DCA On Alibaba & Tesla Never Stops
When the going gets tough, go shopping. To me, shopping for stocks is a special type of happiness. Especially when you know you are buying at lower levels than guys like Charlie Munger, Ray Dalio and Monish Pabrai. These are titans with diamond hands.

'Common prosperity' policies and potential property sector collapse from China. Inflation and rate hike fears from the US. Another debt ceiling crisis looming in the US (aren't they tired of doing this every year?!) Ha! It is gonna take a helluva crisis to end capitalism. Even a pandemic only slowed it down for a year. There is always a crisis lurking around the corner.

Sticking to my plan of buying some US tech, some Chinese tech and some REITs every quarter. Focus my buying efforts on whichever sector that is experiencing a dip. The return of inflation and rate hike fears are starting to exert downward pressure on growth and income equities. As someone who loves buying the dip, that is music to my ears! I could afford to do this because I have the advantage of staying employed with a stable income, supplemented by a steady stream of dividends. So guys, hang on to your jobs. It makes investing a whole lot easier.

Next, position sizing is important. We are all too familiar with those financial Youtubers declaring that they went 100% all-in on a single stock. Well, most of them are young adults in working age. Their future income allows them to continue DCA or buy into other stocks. A regular retiree who is fully dependent on his retirement nest egg or rental income to survive would not have the firepower to keep averaging down on a falling stock such as Alibaba. Catching a falling knife is extra painful when one does not have deep pockets. After his cash is depleted, the investor can only stare at the sinking price helplessly. Worse still, Alibaba is not a stock that pays dividends as you wait for it to recover. Staring at 'dead' money for months is no fun for sure. Not every retiree or investor is like Charlie Munger, a big whale who is flushed with cash. Munger can DCA all he wants for as long as he wants. We must be careful not to copy blindly. I am limiting my Alibaba exposure to 5% of my overall portfolio.

As long-term investors, we should do things that are sustainable and scalable. That's how I built a S$500k position size in REITs. I just kept buying the dips. It's not rocket science. Consistency is more important than perfection. Focus and simplicity. Find an investment style that suits you so that you are less likely to give up and flip flop halfway through the journey. A rolling stone gathers no moss. 

Enjoying The Endemic Phase In Singapore
Having a meal in the restaurant is just different to ordering take-outs. With more than 80% vaccination rate, I support Singapore in going the endemic route. I believe this is the sustainable solution.  The cycle of lock-downs and re-opening is too disruptive. We need to adapt and learn to live with the virus.