2021 - Portfolio Review (27Dec2021)

2021 has been a good year for me. though my overall portfolio remains in the red, I am thankful to have learned much.  

Personally, investing is not just for the sole reason of financial independence.  With more financial security, it is about gaining more time for the people and purposes I am passionate about.  Money can help us to do things simultaneously - sponsor a kid's education in Africa, support disaster recoveries for different countries, invest in sustainable solutions, getting help so that I have more with my family & interests.  I have been reminding myself that time is the most expensive commodity and health is a close second.  These help me to prioritise my time towards my family, passions and friends.

Biggest (paper) losses

As of today, my biggest (paper) loss remains ‌‌$Alibaba(BABA)$  ‌and I am still planning to DCA this regularly.  I remain hopeful for the growth of this company and time will prove me brave or a fool.  With strong fundamentals, revenue generation, costs cutting and new CFO, I remain hopeful that Alibaba is poised to be one of the biggest e-commerce players on top of other solutions like Cloud, fintech, logistics and more.  

The other account that saw the biggest (paper) loss is ‌‌$EVERG SERVICES(06666)$  ‌.  Evergrande is a company that has been embroiled in bad news and with recent defaults, the market has lost much confidence in the company.  However, Evergrande Services is one of the few profit-making businesses, with a strong financial position.  I am hopeful that this business unit can turn things around but the sentiments about Evergrande has weighed negatively on this profit-making division - with minimal investments and controllable overheads.

My (paper) gains

Currently, ‌$PETROCHINA(00857)$  ‌is one of my positions in the black.  This is part of my defensive stocks that help to generate a healthy amount of dividends for me.  With strong fundamentals and a growing China, we can only expect energy demand to increase in China and thus, I am hopeful for the increase in demand and revenue of this company.  My defensive stocks are in energy and utility companies and account for about 15% of my overall portfolio.  Over time, I am likely to increase this to about 20% - these also bring in dividends about 8+/-% per annum and thus are good ways to beat the inflation.

My other position in the black is ‌$Prosus NV(PROSY)$  ‌- the international investment arm for ‌$Naspers Ltd.(NPSNY)$  ‌which I own too.  Prosus' global investments have touched over 2 billion of the world population and they are expected to continue to grow.  This company is like Berkshire 2.0 but with a focus on global businesses.

Strategy for 2022

I am in the midst of reducing my positions to a more "concentrated" portfolio.  At one stage, I was owning over 8 automakers stocks (using different platforms) and I have reduced these to about 4.  By 2022, I am expecting to own only stocks of 2 EV makers (though they are more than car manufacturers) namely BYD and Tesla.

I am hopeful for the global market to recover gradually from Covid in 2022.  As a hopeful realist, I expect challenges like variants & other health challenges, weather extremities, wars, civil unrest, fraud, business continuity, financial challenges (like margin debt, US inflation, etc), data privacy & security & policy changes to bring volatility in the market.  As a long term investor, time in the market is more important than timing the market.  

I remain hopeful but prepared to take advantage of the worst.  I have identified my top 10 businesses and these currently hold about 78% of total investment portfolio.  I hope to be able to DCA for these over time and will avoid leverage for my investments.

My learning journey for 2021 and 2022

I am in the midst of researching options and I am currently using Tiger's Paper Account. Tiger has a great community with good authors who share about options trading.  This is something that I have been greatly enriched by.  For the Tiger authors who have shared generously, I thank you.

My biggest Lesson

Using the 1 Day chart of VISA below, please note the period between November to December.  From the Stochastic, we have several "false" signals to buy but the MACD indicator has much lesser "false" signals.  After qualifying the business through analyzing their business fundamentals, this has become one of my main indicators when I take my positions using technical.  In this case, I would wait for the 2 lines in MACD to cross (under the "0" line) > giving a buy signal before I would take up a position.  However, MACD is also a lagging indicator and thus, we should include other strategies like price action into our technical approach to obtain the best confidence before we take up new positions.