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With the liquidation of the US portfolio almost complete, I thought I look back and summarize the results of the past 2 ¾ years. While this site will still remain up, I will be refocusing my efforts on building up The Asia Report.

Please check it out here.

performance table

Graph

Since inception in 2011, we have achieved an annualized return of 27.23% and a cumulative return of 93.93%. This compares favorably with the iShares S & P 500 Total Return Index, which achieved an annualized return of 21.54% and a cumulative return of 70.99% over the same time period.

To put that into perspective, an initial investment of $10,000 would have yielded $19,393 by the end of June 2014. A similar investment in the S & P TR index would have yielded $17,099.

The results have been more than satisfactory. However, the advances in market prices have resulted in a dearth of investment opportunities in the US market.

Conversely, the emerging markets look far more attractive. We have liquidated the US equity portfolio not with a view to move into cash, but rather to reinvest where it makes sense for us to do so.

We have on our radar companies listed on the Hong Kong Stock Exchange, the Tokyo Stock Exchange and the Bursa Malaysia. The recent decline in prices has created interesting opportunities with favorable investment characteristics.

To end off, it’s been a pleasure writing to everyone. As the partnership shifts to the emerging markets and deals with investments in illiquid stocks, I will no longer be able to provide readers with portfolio updates.

However, I will be highlighting some individual investments, and providing some case studies in the future.

I look forward to seeing you at my new site, The Asia Report.

table

Accurate as of 30 June 2014

Initial Net Asset Value: $10.00

Net Asset Value as of  30 June 2014 $18.83

Graph

Hypothetical Growth of $10,000 invested since September 2011 (NAV at September 2011 was $9.71)

* Due to an error in the calculation of the NAV of the iShares S & P 500 TR Index, the figures have been revised to reflect the correct NAV in the corresponding time.

* A total return index is an index that measures the performance of a group of components by assuming that all cash distributions (dividends) are reinvested, in addition to tracking the components’ price movements

* I have changed the benchmark to the iShares S & P 500 TR Index to reflect the fees of a index fund. NAV is calculated net transaction costs and tax.

Since inception, I’ve had a good run investing in large capitalization stocks in the United States. However, the recent and sustained run up in prices has left few opportunities. It’s hard to imagine now that you could purchase well run blue chip stocks trading at less than 10x PE, and companies like Bank of America and AIG at 1/3 of book value.

BAC & AIG were our biggest holdings, and I am happy to say that they have worked out well since taking stakes in them in 2011. While pockets of value still exist, they are much harder to unearth, and I’ve taken the decision to wind down the US equities portion of the portfolio in the coming weeks.

I will be launching a new site later this year with a focus on Asia. Hong Kong and Singapore are filled with the same bargains that I saw in 2011 in the US, and in my opinion, offer a much better return with lower risk attached. However, Asia is a much different market, and certain principles must be adapted.

One prime example is how investing in companies trading at low price-to-book ratios or net-cash companies has led to permanent losses of capital on S-Chips in Singapore.The problem is not unique, and investors investing in China companies listed in the US have come to realize that accounting standards in China are not what we are normally used to.

This project has been in the works for a long time now, and I am excited to see where it will lead to. There are over 2,000 companies in Singapore and Hong Kong alone, plenty without any form of analyst coverage whatsoever. There are plenty of stocks waiting to be unearthed by the hardworking investor with the right framework.

Notable companies in the past year which we have covered include Vicom, Popular Holdings, ABR and Challenger. One company which ticked all the right boxes for me was Old Chang Kee which traded at 30 cents. Alas, I did not pull the trigger then (I kick myself at night when I think about it everytime), and was recently quoted at 96 cents (without including dividends distributed).

While we may have missed that train, there are plenty of other companies that have similar characteristics as Old Chang Kee trading at the same valuations in 2011. I look forward to talking sharing some of these ideas with you in the coming months.

The final quarterly report for the US Fund carries with it some sadness and a sense of satisfaction. Time flies, it has been close to three and a half years since I started this site. It’s been a journey both personally and professionally, and I look forward to the launch of the new site in the coming year.

table

Accurate as of 31st March 2014

Initial Net Asset Value: $10.00

Net Asset Value as of  31 March 2014 $18.28

mar 2014

Hypothetical Growth of $10,000 invested since September 2011 (NAV at September 2011 was $9.71)

* A total return index is an index that measures the performance of a group of components by assuming that all cash distributions (dividends) are reinvested, in addition to tracking the components’ price movements

* I have changed the benchmark to the iShares S & P 500 TR Index to reflect the fees of a index fund. NAV is calculated net transaction costs and tax.

* As of the first quarter FY 2014, the reporting date has been shifted to the last trading day of each month e.g. 31st December 2013.

table

Accurate as of 31st December 2013

Initial Net Asset Value: $10.00

Net Asset Value as of  31 December 2013: $17.40

dec

Hypothetical Growth of $10,000 invested since September 2011 (NAV at September 2011 was $9.71)

* A total return index is an index that measures the performance of a group of components by assuming that all cash distributions (dividends) are reinvested, in addition to tracking the components’ price movements

* I have changed the benchmark to the iShares S & P 500 TR Index to reflect the fees of a index fund. NAV is calculated net transaction costs and tax.

* As of the first quarter FY 2014, the reporting date has been shifted to the last trading day of each month e.g. 31st December 2013.

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