Portfolio Review

25 Jan 2020

Dear Fellow Investors,

Portfolio Review

The outbreak of the potentially lethal Wuhan virus has not as yet affected our portfolios in a major way.

Kossan, the rubber glove company has performed well making a major move last week clearing 6 months of congestion and supply. I recommend to hold for the ride until we see insider selling  I am carefully watching my Bloomberg workstation for this indicator and will take appropriate action should I see a cluster of insider selling.

Inari our core technology holding has  advanced strongly  because  its parent Broadcom just inked a deal with Apple to supply more hand phone components to Apple. Inari is at the cutting edge of innovation in such areas as 5 G  which should also boost their profit margins.

Dialog our energy holding is stable and not effected by the virus as they operate an oil storage facility which earns recurring revenue no matter the oil price.

Our plantation counters include United Plantation and Kim Loong are  both earning handsome well covered dividends. There is currently a strong seasonal up trend in the plantation sector so this should benefit these counters.

We cut our Padini shares as the retail clothing sector is not performing. Padini is a well run company but is being disrupted by  on line sellers and the slowdown in consumer spending. On mall visits I notice less customers in the Padini stores.   

Our banking counters including Maybank and Public Bank are stagnant . We bought Maybank after the election anticipating  a turnaround in the Malaysian economy. My analysis was wrong but the generous dividends have covered 90 % of the capital loss.  Book values are at 2008 lows so in my opinion there is more potential upside than downside.

In my younger days, I was an active horse speculator. Horse racing is similar to stock markets. One similarity is to never bet on favourites/ hot horses  and wait for solid horses overlooked by the crowd.  You will get better odds with less risk and more potential reward.  

Maybank fits this profile now.  The hot money crowd is not interested but I am. When we bought Inari 3 years ago no one was interested. The same was true for Kossan, Kim Loong and Heim.

Sometimes the wait is worth it. Next week I will review some of our other holdings.

My view on the coronavirus is:

The coronavirus will probably run its course, in much the same way that any virus will run its course. So, don’t panic. But be vigilant and practice good personal hygiene.

Invest well and grow your wealth
Bill

I will skip the critter of the week to post this advice 

How to travel safely during the coronavirus outbreak: Heavy-duty masks, wearing gloves and carrying sanitary wipes can help reduce risks - but hand-washing really IS the best way to prevent infection, expert says.