In the post on the first anniversary of my retirement I commented that the current break even cash flow was not as good as it looked because of the effect of the special dividend from HWL (HK:13) and only taking two holidays instead of three this year. Without the special dividend and with three holidays scheduled for 2015, income from investments will fall a little short from meeting all of our cash outflows.
I have spent a bit of time playing with my spreadsheet and concluded that that assessment was unduly pessimistic - the short fall is a very small one. I will finish my master's degree next year and will stop paying course fees after that - this is more or less enough to wipe out the deficit. In the short term, part time incomes of either myself or Mrs Traineeinvestor or the return of my remaining capital from firm will also more than cover the shortfall. In fact, if we continue with both part time arrangements through to mid-2015 then, with the capital return, we are good for about four years. It is possible that rising dividend levels over those four years will deal with the issue after that. Reinvesting more of the cash currently held (in addition to the carpark just purchased) will also help. In the longer term, the mortgage on our home will be paid off in about seven years and cash flow will be strongly positive from then on.
Lastly, if things get tight, there is plenty of room to cut our expenses without having much effect on our standard of living. We can also shift non-income producing assets into income producing ones if we have to.
Sunday, December 07, 2014
Financial Review - November, 2014
November was a poor month for my investments.
Net worth declined. Asian equities appreciated slightly, but not sufficient to overcome the decline in my Australian/New Zealand equities and commodities and adverse FX movements. Expenses were moderate.
Here are the details:
1. my Hong Kong equity portfolio appreciated in line with the local market. There were no transactions this month;
2. my AU/NZ equities fell. I added shares in New Zealand Refining to the portfolio;
3.my equity ETFs were higher (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities fell. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. However, I will have at least one vacancy just before Chinese New Year in 2015. There were no repairs this month. I completed the purchase of a car parking space in the building where we live. It has already been rented out;
6. currency movements were negative with falls in the NZD and the AUD;
7. my position in bonds remains small;
8. expenses were moderate;
9.there were no transfers to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 35.2 months of expenses in HKD cash or equivalents.
For October, my net worth fell by 0.6%. The year to date increase is 4.46%.
Net worth declined. Asian equities appreciated slightly, but not sufficient to overcome the decline in my Australian/New Zealand equities and commodities and adverse FX movements. Expenses were moderate.
Here are the details:
1. my Hong Kong equity portfolio appreciated in line with the local market. There were no transactions this month;
2. my AU/NZ equities fell. I added shares in New Zealand Refining to the portfolio;
3.my equity ETFs were higher (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities fell. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. However, I will have at least one vacancy just before Chinese New Year in 2015. There were no repairs this month. I completed the purchase of a car parking space in the building where we live. It has already been rented out;
6. currency movements were negative with falls in the NZD and the AUD;
7. my position in bonds remains small;
8. expenses were moderate;
9.there were no transfers to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 35.2 months of expenses in HKD cash or equivalents.
For October, my net worth fell by 0.6%. The year to date increase is 4.46%.
Monday, November 03, 2014
Retirement - first anniversary
The first anniversary of my retirement (30 September, 2013) came and went without registering so this is a month late.
From a financial perspective, things have gone well. It would have been nice to start with a raging bull market and watch my equity portfolio appreciate by 20% but at least it was not a full on bear market. After all the ups and downs, during the first year of retirement, net worth increased by 4.9% after paying our living expenses during that period. In effect, I have paid the bills and beaten inflation.
On a cash flow basis, I have more or less broken even - a calculation which includes the principal component on our home mortgage and does not take into account either my or Mrs Traineeinvestor's part time incomes (trivial in my case). However, we took one less holiday than normal during this period and had the special dividend from Hutchison (HK:13) and, if those are taken into account, the cash flow situation is not quite so good once the two part time jobs come to an end. We will probably find that dividends and net rents do not quite meet all outgoings but that situation will reverse when the home mortgage is paid off in about six and a half years from now.
The home rennovation project has been delayed yet again. We will do it as and when the tenant moves out of one of our investment properties (rather than go to a serviced apartment for 3-4 months). An accrual has been made for most of the expense.
In terms of other issues:
1. the part time study is going very well - I am on track to finish in mid-2015 and will need to line up my next project after that;
2. progress on the novel has not been as good as I would like but is not terrible either - instead of finishing a rough first draft by the end of this year I am looking at early 2015;
3. I had some minor sporting injuries (plantar fasciitis) which have taken a long time to clear up with consequent adverse impact on fitness and weight - this has been the only serious disappointment in my retirement so far;
4. volunteer activities have gone as planned - fostering kittens for the SPCA, serving on some Law Society committees and two other positions;
5. I have spent a lot more time with my children.
All in all, retirement is off to a good start.
From a financial perspective, things have gone well. It would have been nice to start with a raging bull market and watch my equity portfolio appreciate by 20% but at least it was not a full on bear market. After all the ups and downs, during the first year of retirement, net worth increased by 4.9% after paying our living expenses during that period. In effect, I have paid the bills and beaten inflation.
On a cash flow basis, I have more or less broken even - a calculation which includes the principal component on our home mortgage and does not take into account either my or Mrs Traineeinvestor's part time incomes (trivial in my case). However, we took one less holiday than normal during this period and had the special dividend from Hutchison (HK:13) and, if those are taken into account, the cash flow situation is not quite so good once the two part time jobs come to an end. We will probably find that dividends and net rents do not quite meet all outgoings but that situation will reverse when the home mortgage is paid off in about six and a half years from now.
The home rennovation project has been delayed yet again. We will do it as and when the tenant moves out of one of our investment properties (rather than go to a serviced apartment for 3-4 months). An accrual has been made for most of the expense.
In terms of other issues:
1. the part time study is going very well - I am on track to finish in mid-2015 and will need to line up my next project after that;
2. progress on the novel has not been as good as I would like but is not terrible either - instead of finishing a rough first draft by the end of this year I am looking at early 2015;
3. I had some minor sporting injuries (plantar fasciitis) which have taken a long time to clear up with consequent adverse impact on fitness and weight - this has been the only serious disappointment in my retirement so far;
4. volunteer activities have gone as planned - fostering kittens for the SPCA, serving on some Law Society committees and two other positions;
5. I have spent a lot more time with my children.
All in all, retirement is off to a good start.
Friday, October 31, 2014
Financial Review - October, 2014
October was a good month for my investments.
Net worth recovered. With equities were up across the board and FX movements were mildly favourable. Commodities continued lower and expenses were high.
Here are the details:
1. my Hong Kong equity portfolio appreciated in line with the local market. There were no transactions this month;
2. my AU/NZ equities appreciated. There were no purchases this month;
3.my equity ETFs were higher (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities fell. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;
6. currency movements were slightly positive with gains in the NZD and the AUD;
7. my position in bonds remains small;
8. expenses were high;
9.there were no transfers to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 44.8 months of expenses in HKD cash or equivalents.
For October, my net worth increased by 1.75%. The year to date increase is 5.09%.
Net worth recovered. With equities were up across the board and FX movements were mildly favourable. Commodities continued lower and expenses were high.
Here are the details:
1. my Hong Kong equity portfolio appreciated in line with the local market. There were no transactions this month;
2. my AU/NZ equities appreciated. There were no purchases this month;
3.my equity ETFs were higher (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities fell. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;
6. currency movements were slightly positive with gains in the NZD and the AUD;
7. my position in bonds remains small;
8. expenses were high;
9.there were no transfers to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 44.8 months of expenses in HKD cash or equivalents.
For October, my net worth increased by 1.75%. The year to date increase is 5.09%.
Monday, October 06, 2014
Financial Review - September, 2014
September was a terrible month for my investments.
Net worth dipped significantly. With equities and commodities were down and FX movements were dramatically unfavourable. Expenses were low.
Here are the details:
1. my Hong Kong equity portfolio fell significantly in line with the local market. There were no transactions this month;
2. my AU/NZ equities fell. There were no purchases this month;
3.my equity ETFs were lower (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities fell. SIlver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;
6. currency movements were dramatically adverse with a large falls in the NZD and the AUD;
7. my position in bonds remains small;
8. expenses were low;
9.there were no transfers to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 45.2 months of expenses in HKD cash or equivalents.
For September, my net worth fell by 2.83%. The year to date increase is 3.28%.
Note: cut off for the September report was 3rd October due to travelling.
Net worth dipped significantly. With equities and commodities were down and FX movements were dramatically unfavourable. Expenses were low.
Here are the details:
1. my Hong Kong equity portfolio fell significantly in line with the local market. There were no transactions this month;
2. my AU/NZ equities fell. There were no purchases this month;
3.my equity ETFs were lower (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities fell. SIlver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;
6. currency movements were dramatically adverse with a large falls in the NZD and the AUD;
7. my position in bonds remains small;
8. expenses were low;
9.there were no transfers to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 45.2 months of expenses in HKD cash or equivalents.
For September, my net worth fell by 2.83%. The year to date increase is 3.28%.
Note: cut off for the September report was 3rd October due to travelling.
Friday, August 29, 2014
Financial Review - August, 2014
August was another neutral month for my investments.
Net worth dipped slightly. With almost no change in equities and commodities, unfavourable FX movements and expenses were slightly more than the net rental income received. Expenses were high due to our family holiday and additional expenses associated with school holidays.
Here are the details:
1. my Hong Kong equity portfolio was more or less unchanged. I purchased a few additional shares in China Blue Chemical, sold some shares in Sinolink Holdings and added some units in the CSOP A50 tracker fund today at HK$9.43;
2. my AU/NZ equities appreciated. There were no purchases this month;
3.my equity ETFs were largely unchanged (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were flat. SIlver is my only position and I added slightly to that position;
5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small;
8. expenses were high due to our summer holiday;
9.I made a transfer to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 46.6 months of expenses in HKD cash or equivalents.
For July, my net worth fell by 0.19%. The year to date increase is 6.29%.
Net worth dipped slightly. With almost no change in equities and commodities, unfavourable FX movements and expenses were slightly more than the net rental income received. Expenses were high due to our family holiday and additional expenses associated with school holidays.
Here are the details:
1. my Hong Kong equity portfolio was more or less unchanged. I purchased a few additional shares in China Blue Chemical, sold some shares in Sinolink Holdings and added some units in the CSOP A50 tracker fund today at HK$9.43;
2. my AU/NZ equities appreciated. There were no purchases this month;
3.my equity ETFs were largely unchanged (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were flat. SIlver is my only position and I added slightly to that position;
5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small;
8. expenses were high due to our summer holiday;
9.I made a transfer to Mrs Traineeinvestor this month.
My cash position fell slightly. I currently hold 46.6 months of expenses in HKD cash or equivalents.
For July, my net worth fell by 0.19%. The year to date increase is 6.29%.
Wednesday, August 20, 2014
Frustration with iBonds
Well, I got the standard allocation of HKD20,000 in the latest issue of HKSAR Government iBonds. It's a trivial sum and the only reason I bother is that it's better than leaving cash in the bank and it only takes a few clicks of the mouse to subscribe.
But I wish, really wish, I could park a lot more of my cash balance in iBonds. Unfortunately, I don't think it's going to happen.
But I wish, really wish, I could park a lot more of my cash balance in iBonds. Unfortunately, I don't think it's going to happen.
Mrs Traineeinvestor goes shopping
Mrs Traineeinvestor (aka my better 99%) purchased a carparking space yesterday. While the price of carparks is (IMHO) very expensive, in relative terms, she got a very good deal. Carparks in our building rarely come on the market - the last transaction was in 2013 at $X and the vendor of the only one currently offered is asking $X+25%. Mrs Traineeinvestor's purchase was in a good building in the same area at about half $X.
While I still view the price paid as high, current changes in the neighbourhood will likely make the supply shortage even more accute in the not too distant future.
The net yield on gross cost is about 2.2% - not great but better than bank deposits.
While I still view the price paid as high, current changes in the neighbourhood will likely make the supply shortage even more accute in the not too distant future.
The net yield on gross cost is about 2.2% - not great but better than bank deposits.
Silver purchased
In the quest for a little more portfolio diversification, I added a little more silver to the portfolio yesterday. I paid the equivalent of USD19.83 per oz.
Tuesday, August 19, 2014
Sinolink Holdings - partial sale
Before heading off on our summer holiday in northern Hokkaido (very beautiful), I placed a few small out of the money sell orders on Sinolink Holdings (HK:1168). Both orders were triggered at HK$0.70 and HK$0.72 respectively generating a modest profit. While I was reluctant to sell these shares given the size of the discount to NAV (they are actually trading at a material discount to cash backing), I would like to take a little bit of money off the table as the market rises and a small cap company which does not pay dividends was my choice.
I still hold most of my position in Sinolink Holdings which was purchased at an average of HK$0.64.
I still hold most of my position in Sinolink Holdings which was purchased at an average of HK$0.64.
Friday, August 08, 2014
China Blue Chemical purchased
This morning I added a few more shares in China Blue Chemical (HK:3983) to the portfolio. I have held these for some time and, while they have paid out a steady stream of dividends, the investment as a whole has been disappointing and I am slightly behind on my original investment.
In any event, the share price has come back to the point where the value looks attractive with a cash rich and debt free balance sheet and a 4.5% dividend yield on offer. There is also the possibility that the auction of the assets of a defaulting JV company on 15 August will remove some uncertainty.
I paid HK$3.97 for the additional shares.
In any event, the share price has come back to the point where the value looks attractive with a cash rich and debt free balance sheet and a 4.5% dividend yield on offer. There is also the possibility that the auction of the assets of a defaulting JV company on 15 August will remove some uncertainty.
I paid HK$3.97 for the additional shares.
Thursday, July 31, 2014
Financial Review - July, 2014
July was another positive month for my investments.
Net worth moved higher as gains in my equities equities and rental income were enough to overcome living expenses and marginally unfavourable FX movements. Expenses were high.
Here are the details:
1. my Hong Kong equity portfolio appreciated. There were no Hong Kong transactions this month, but I received a number of dividends (mostly in cash, but I did take scrip for COSCO Pacific);
2. my AU/NZ equities appreciated. There were no purchases this month;
3.my equity ETFs were up (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were flat. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. There was only one minor repair this month;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small and got smaller with two bonds maturing this month;
8. expenses were low. I purchased a few cases of en primeur wine;
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position incased slightly. I currently hold 47.5 months of expenses in HKD cash or equivalents. It was one of those months when holding any cash feels like a lost opportunity (I know, I know - I have to hold enough cash to cover living expenses for a few years).
For July, my net worth rose by 2.74%. The year to date increase is 6.49%.
Net worth moved higher as gains in my equities equities and rental income were enough to overcome living expenses and marginally unfavourable FX movements. Expenses were high.
Here are the details:
1. my Hong Kong equity portfolio appreciated. There were no Hong Kong transactions this month, but I received a number of dividends (mostly in cash, but I did take scrip for COSCO Pacific);
2. my AU/NZ equities appreciated. There were no purchases this month;
3.my equity ETFs were up (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were flat. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. There was only one minor repair this month;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small and got smaller with two bonds maturing this month;
8. expenses were low. I purchased a few cases of en primeur wine;
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position incased slightly. I currently hold 47.5 months of expenses in HKD cash or equivalents. It was one of those months when holding any cash feels like a lost opportunity (I know, I know - I have to hold enough cash to cover living expenses for a few years).
For July, my net worth rose by 2.74%. The year to date increase is 6.49%.
Wednesday, July 30, 2014
Bond maturities
This month I have had to deal with two bond maturities (i) the first tranche HKSAR government iBonds and (ii) PRC govt RMB bonds. In the current interest rate environment*, I basically view bonds as a place to hold money that would otherwise be earning next to zero in bank accounts. Since I already have more cash on hand than I would like, finding new home(s) for the matured principals is desirable. Holding an asset that is earning less than the rate of inflation is irritating and expensive.
Unfortunately, a quick look at the HSBC and BOCHK lists of bonds available is discouraging - the massively wide spreads are a complete turn off - and the rates offered for term deposits are equally pathetic. So I will have to look a bit further. If all else fails, I would consider adding to some of the safer equities and collect the dividends. But, given the rally in the HK market over the last few months, I am not sure if I want to do this either.
More thinking needed.
* if postive real returns could be achieved, I would be buying bonds for their risk/return profile.
Unfortunately, a quick look at the HSBC and BOCHK lists of bonds available is discouraging - the massively wide spreads are a complete turn off - and the rates offered for term deposits are equally pathetic. So I will have to look a bit further. If all else fails, I would consider adding to some of the safer equities and collect the dividends. But, given the rally in the HK market over the last few months, I am not sure if I want to do this either.
More thinking needed.
* if postive real returns could be achieved, I would be buying bonds for their risk/return profile.
Wednesday, July 02, 2014
Longer term currency risk
The HKMA injected HKD16 billion to defend the peg today. This is the first intervention since December 2012.
http://www.aastocks.com/en/news/HK6/NOW.612772/Count3.html
While I have no short term concerns that HKD will be repegged (people have been periodically predicting the end of the peg long before I arrived in HK more than 20 years ago), in the longer term (which could be very long term) it will either be adjusted or removed. If that were to happen in conditions like those prevailing today, the HKD would be revalued upwards and the relative value of my overseas investments would go down. As far as portfolio construction is concerned, while investing outside HK provides diversification and a closer alignment between household income and expenses, it does add to the longer term risk exposure.
Since the cost of hedging is prohibitive, this is largely a case of being aware of a potential event about which I can do nothing.
http://www.aastocks.com/en/news/HK6/NOW.612772/Count3.html
While I have no short term concerns that HKD will be repegged (people have been periodically predicting the end of the peg long before I arrived in HK more than 20 years ago), in the longer term (which could be very long term) it will either be adjusted or removed. If that were to happen in conditions like those prevailing today, the HKD would be revalued upwards and the relative value of my overseas investments would go down. As far as portfolio construction is concerned, while investing outside HK provides diversification and a closer alignment between household income and expenses, it does add to the longer term risk exposure.
Since the cost of hedging is prohibitive, this is largely a case of being aware of a potential event about which I can do nothing.
Monday, June 30, 2014
Financial Review - June, 2014
June was an excellent month for my investments.
Net worth moved higher as gains in my Hong Kong and emerging market equities equities and rental income were enough to overcome living expenses, a small decline in Au/NZ equities and marginally unfavourable FX movements. Expenses were high.
Here are the details:
1. my Hong Kong equity portfolio appreciated meaningfully. There were no Hong Kong transactions this month, but I received a number of dividends (all in cash);
2. my AU/NZ equities declined very slightly. I added shares in National Australia Bank, PGG Wrightson and Gemworth Mortgage this month;
3.my equity ETFs were up (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were higher. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. I managed to roll over a break lease with zero vacancy. The tenant who was paying a reduced rental while building renovation works were being done is now paying the full rental. There were only minor repairs this month;
6. currency movements were slightly adverse with a small fall in the AUD. The NZD was flat. I purchased more AUD this month;
7. my position in bonds remains small;
8. expenses were high. I purchased a few cases of en primeur wine;
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position declined slightly. I currently hold 46.1 months of expenses in HKD cash or equivalents. It was one of those months when holding any cash feels like a lost opportunity (I know, I know - I have to hold enough cash to cover living expenses for a few years).
For May, my net worth rose by 2.22%. The year to date increase is 3.66%.
Net worth moved higher as gains in my Hong Kong and emerging market equities equities and rental income were enough to overcome living expenses, a small decline in Au/NZ equities and marginally unfavourable FX movements. Expenses were high.
Here are the details:
1. my Hong Kong equity portfolio appreciated meaningfully. There were no Hong Kong transactions this month, but I received a number of dividends (all in cash);
2. my AU/NZ equities declined very slightly. I added shares in National Australia Bank, PGG Wrightson and Gemworth Mortgage this month;
3.my equity ETFs were up (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were higher. Silver is my only position;
5. the properties are at full occupancy and all tenants are paying on time. I managed to roll over a break lease with zero vacancy. The tenant who was paying a reduced rental while building renovation works were being done is now paying the full rental. There were only minor repairs this month;
6. currency movements were slightly adverse with a small fall in the AUD. The NZD was flat. I purchased more AUD this month;
7. my position in bonds remains small;
8. expenses were high. I purchased a few cases of en primeur wine;
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position declined slightly. I currently hold 46.1 months of expenses in HKD cash or equivalents. It was one of those months when holding any cash feels like a lost opportunity (I know, I know - I have to hold enough cash to cover living expenses for a few years).
For May, my net worth rose by 2.22%. The year to date increase is 3.66%.
Gemworth Mortgage purchased
I have added Gemworth Mortgage (ASX:GMA) to the portfolio. GMA is recently listed provider of mortgage insurance to the Australian residential property market. Given their conservative practices (e.g. the will only provide insurance on low doc loans up to 80% LTV) and the increasing demand from foreign investors for Australian property, I am reasonably optimistic that the company will at least meet its prospectus forecasts. The prospect of a 25 cps annual dividend in FY2015 with (probably) full franking credits (7.5% yield) makes this a very appealing addition to the portfolio. I can also see it being of interest to Australia's self-managed super schemes.
I paid AUD3.29 per share.
Edit: I purchased additional AUD to make the purchase.
I paid AUD3.29 per share.
Edit: I purchased additional AUD to make the purchase.
Thursday, June 19, 2014
PGG Wrightson purchased
This morning I added shares in PGG Wrightson (NZX: PGW) to the portfolio. PGW is one of New Zealand's leading suppliers of products to the rural economy. Given the increasing demand for agricultural and dairy products, the company should have reasonably secure long term prospects. The negative is the gearing ration which, at around 50% debt to equity (slightly unclear due to a recent acquisition of some real estate) is a bit higher than I am genuinely comfortable with. The trailing yield is 7.3%.
I paid NZD0.41 per share.
I paid NZD0.41 per share.
Tenant rollover
Due to extenuating personal circumstances, I allowed a tenant to break a lease early. I was very pleased to find a new tenant for the same rental within less than a week of putting the property on the market. As a result, I am only out of pocket the cost of cleaning the unit and a half share of the stamp duty on the new lease (which I could have deducted from the tenant's deposit but decided not to).
Makes me wonder whether all the claims of falling rental levels are all that reliable or whether I am under renting the unit?
Makes me wonder whether all the claims of falling rental levels are all that reliable or whether I am under renting the unit?
Tuesday, June 03, 2014
Top twenty individual equities
I have spent some time over the last few days reviewing my twenty largest investments in individual equities. The list is set out below showing the percentage of our household's total net worth is invested in each of them. All but one of the top twenty has show positive returns (with a handful having more than doubled when dividends are taken into account). Only one is at or slightly below break even (Sinolink). Most have increased their dividends over the last few years.
At the moment, I cannot think of a reason to sell any of them (which I hope is not a case over overvaluing what I own) and am tempted to add to a few (CKI, Fairwood, Ping An and NWS in particular).
As far as watching the basket with the biggest assets are concerned, this basket looks very good to me. In some respects, I am fortunate in that almost all of my loss making investments involve much smaller amounts of money and I will be commencing my review of those later this week.
At the moment, I cannot think of a reason to sell any of them (which I hope is not a case over overvaluing what I own) and am tempted to add to a few (CKI, Fairwood, Ping An and NWS in particular).
As far as watching the basket with the biggest assets are concerned, this basket looks very good to me. In some respects, I am fortunate in that almost all of my loss making investments involve much smaller amounts of money and I will be commencing my review of those later this week.
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Friday, May 30, 2014
Financial Review - May, 2014
May was a solid month for my investments.
Net worth moved higher as gains in my Hong Kong and emerging market equities equities and rental income were enough to overcome living expenses, a small decline in Au/NZ equities and marginally unfavourable FX movements. Expenses were low.
Here are the details:
1. my Hong Kong equity portfolio appreciated meaningfully. The only transaction this month was to elect to take my NWS (HK:659) dividend in scrip. The special dividend from Hutchison (HK:13) was also received this month;
2. my AU/NZ equities declined moderately there were no transactions this month;
3.my equity ETFs were up (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were lower. Silver is my only position;
5. all properties are back to full occupancy and all tenants are paying on time. There were only minor repairs this month;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small;
8. expenses were low;
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position increased slightly. I currently hold 47.2 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.
For May, my net worth rose by 1.02%. The year to date increase is 1.40%.
Although eight months is too short a period from which to draw conclusions, it is encouraging that (so far) returns from my investments are exceeding our living expenses (and the transfers to Mrs Traineeinvestor).
Net worth moved higher as gains in my Hong Kong and emerging market equities equities and rental income were enough to overcome living expenses, a small decline in Au/NZ equities and marginally unfavourable FX movements. Expenses were low.
Here are the details:
1. my Hong Kong equity portfolio appreciated meaningfully. The only transaction this month was to elect to take my NWS (HK:659) dividend in scrip. The special dividend from Hutchison (HK:13) was also received this month;
2. my AU/NZ equities declined moderately there were no transactions this month;
3.my equity ETFs were up (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were lower. Silver is my only position;
5. all properties are back to full occupancy and all tenants are paying on time. There were only minor repairs this month;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small;
8. expenses were low;
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position increased slightly. I currently hold 47.2 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.
For May, my net worth rose by 1.02%. The year to date increase is 1.40%.
Although eight months is too short a period from which to draw conclusions, it is encouraging that (so far) returns from my investments are exceeding our living expenses (and the transfers to Mrs Traineeinvestor).
Wednesday, May 21, 2014
NWS - top up
With there being a meaningful difference between the market price (above $13 at the time I had to make a decision) and the reinvestment price ($12.3918), I elected to reinvest my dividend in NWS (HK:659). At this morning's opening price of $13.94 the unrealised gain is $1.54 per new share or 12.4%.
In generally, I like taking dividends in scrip on companies that I anticipate holding for the longer term. Unfortunately, many (but not all) of the companies I invest in in Australia and New Zealand will not allow non-residents to participate in their dividend reinvestment plans - meaning I lose the opportunity to buy shares at a discount to market and I am getting diluted.
Of course, the other issue I face now that I am no longer earning employment related income is that I need cash to pay the bills.
In generally, I like taking dividends in scrip on companies that I anticipate holding for the longer term. Unfortunately, many (but not all) of the companies I invest in in Australia and New Zealand will not allow non-residents to participate in their dividend reinvestment plans - meaning I lose the opportunity to buy shares at a discount to market and I am getting diluted.
Of course, the other issue I face now that I am no longer earning employment related income is that I need cash to pay the bills.
Wednesday, April 30, 2014
Financial Review - April, 2014
April was a very mixed set of returns for my investments.
Net worth inched higher as gains in my Australian/ New Zealand equites and rental income were enough to overcome living expenses, a small decline in Hong Kong equities and marginally unfavourable FX movements. Expenses were high.
Here are the details:
1. my Hong Kong equity portfolio declined fractionally. There were no transactions this month;
2. my AU/NZ equities appreciated - with most shares being up a bit. I received a number of dividends this month and added shares in Genesis (NZX: GNE), National Australia Bank (ASX: NAB) and Hellaby Holdings (NZX: HBY) to the portfolio;
3.my equity ETFs were up (India and Vietnam) or down (Hong Kong and China) in line with the local markets. All movements were very small. There were no new purchases;
4. my commodities were lower. Silver is my only position;
5. all properties are back to full occupancy and all tenants are paying on time. This month's repair bills were higher than normal as they included repainting and a few other jobs which needed doing on a change in tenancy and the agency fee;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small;
8. expenses were high due to our Easter holiday but the costs had been largely accrued so there was little impact on the balance sheet;
9. I transferred some money to Mrs Traineeinvestor this month. This is treated as an expense.
My cash position increased slightly. I currently hold 46.9 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.
For March, my net worth rose by 0.36%. The year to date increase is 0.37%.
Although seven months is too short a period from which to draw conclusions, it is encouraging that (so far) returns from my investments are exceeding our living expenses (and the transfers to Mrs Traineeinvestor).
Net worth inched higher as gains in my Australian/ New Zealand equites and rental income were enough to overcome living expenses, a small decline in Hong Kong equities and marginally unfavourable FX movements. Expenses were high.
Here are the details:
1. my Hong Kong equity portfolio declined fractionally. There were no transactions this month;
2. my AU/NZ equities appreciated - with most shares being up a bit. I received a number of dividends this month and added shares in Genesis (NZX: GNE), National Australia Bank (ASX: NAB) and Hellaby Holdings (NZX: HBY) to the portfolio;
3.my equity ETFs were up (India and Vietnam) or down (Hong Kong and China) in line with the local markets. All movements were very small. There were no new purchases;
4. my commodities were lower. Silver is my only position;
5. all properties are back to full occupancy and all tenants are paying on time. This month's repair bills were higher than normal as they included repainting and a few other jobs which needed doing on a change in tenancy and the agency fee;
6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;
7. my position in bonds remains small;
8. expenses were high due to our Easter holiday but the costs had been largely accrued so there was little impact on the balance sheet;
9. I transferred some money to Mrs Traineeinvestor this month. This is treated as an expense.
My cash position increased slightly. I currently hold 46.9 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.
For March, my net worth rose by 0.36%. The year to date increase is 0.37%.
Although seven months is too short a period from which to draw conclusions, it is encouraging that (so far) returns from my investments are exceeding our living expenses (and the transfers to Mrs Traineeinvestor).
Update on recent investments
This is a bit late (even by my usual standards), but, hey, I'm retired.
Over the last few weeks I have added the following to the private portfolio:
1. Genesis Energy (NZX: GNE): I subscribed on the IPO at NZD1.55 on the basis that a 10% projected dividend yield + a 1 for 15 loyalty bonus if held for a year was more than enough to overcome prevailing political risk and the medium term run down of the Kupe oil field;
2. National Australia Bank (ASX: NAB): this is the smallest of the big four Australian banks and sells on the lowest multiples. Given the bank's rather patchy track record and its problems in the UK, there is good reason for that. However as a yield proposition and with the possibility of an uplift if/when the UK business is sorted out, this is one I am comfortable putting in the bottom draw. I paid AUD35.56 per share;
3. Hellaby Holdings (NZX: HBY): this is a mid-cap (for New Zealand) company which holds a number of industrial companies of which auto-parts and services is the largest. A trailing 4.7% dividend yield which I hope will grow over time is the main attraction of this company. I paid NZD3.05 per share.
Over the last few weeks I have added the following to the private portfolio:
1. Genesis Energy (NZX: GNE): I subscribed on the IPO at NZD1.55 on the basis that a 10% projected dividend yield + a 1 for 15 loyalty bonus if held for a year was more than enough to overcome prevailing political risk and the medium term run down of the Kupe oil field;
2. National Australia Bank (ASX: NAB): this is the smallest of the big four Australian banks and sells on the lowest multiples. Given the bank's rather patchy track record and its problems in the UK, there is good reason for that. However as a yield proposition and with the possibility of an uplift if/when the UK business is sorted out, this is one I am comfortable putting in the bottom draw. I paid AUD35.56 per share;
3. Hellaby Holdings (NZX: HBY): this is a mid-cap (for New Zealand) company which holds a number of industrial companies of which auto-parts and services is the largest. A trailing 4.7% dividend yield which I hope will grow over time is the main attraction of this company. I paid NZD3.05 per share.
Monday, March 31, 2014
Financial Review - March, 2014
March was an awful month for my investments.
Net worth slumped as a decline in equities was only sightly offset by favourable FX movements and rental income. Expenses were moderate.
Here are the details:
1. my Hong Kong equity portfolio slumped. The only dealings this month were purchases of Dynam Japan (HK:6889), Sinolink Holdings (HK:1168) and CCB (HK:939) and the sale of Sinotrans Shipping (HK:368);
2. my AU/NZ equities appreciated slightly - with most shares being up a bit. I have applied for shares in Genesis (NZX: new listing). My position here is slightly understated as several shares are trading ex-dividend but I have not yet received the dividends;
3.my equity ETFs were up (India and Vietnam) or down (Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were lower. Silver is my only position;
5. one property is now vacant. There are several repair bills payable this month and next (either related to buildings which received notices for a mandatory window inspection or remedial work on a change of tenancy);
6. currency movements were positive, with small increases in the NZD and the AUD;
7. my position in bonds remains small. I added some more units in an RMB bond fund to the portfolio;
8. expenses were moderate due to a collection of small unbudgeted expenses (i.e. a purchased a few cases of wine);
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position increased due to net sales of investments. I currently hold 46.5 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.
For March, my net worth fell by 1.36%. The year to date increase is 0.01%.
Net worth slumped as a decline in equities was only sightly offset by favourable FX movements and rental income. Expenses were moderate.
Here are the details:
1. my Hong Kong equity portfolio slumped. The only dealings this month were purchases of Dynam Japan (HK:6889), Sinolink Holdings (HK:1168) and CCB (HK:939) and the sale of Sinotrans Shipping (HK:368);
2. my AU/NZ equities appreciated slightly - with most shares being up a bit. I have applied for shares in Genesis (NZX: new listing). My position here is slightly understated as several shares are trading ex-dividend but I have not yet received the dividends;
3.my equity ETFs were up (India and Vietnam) or down (Hong Kong and China) in line with the local markets. There were no new purchases;
4. my commodities were lower. Silver is my only position;
5. one property is now vacant. There are several repair bills payable this month and next (either related to buildings which received notices for a mandatory window inspection or remedial work on a change of tenancy);
6. currency movements were positive, with small increases in the NZD and the AUD;
7. my position in bonds remains small. I added some more units in an RMB bond fund to the portfolio;
8. expenses were moderate due to a collection of small unbudgeted expenses (i.e. a purchased a few cases of wine);
9. there were no transfers to Mrs Traineeinvestor this month.
My cash position increased due to net sales of investments. I currently hold 46.5 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.
For March, my net worth fell by 1.36%. The year to date increase is 0.01%.
Thursday, March 27, 2014
Dynam Japan purchased
Dynam Japan (HK:6889) has been on a wild ride. Since I purchased at $16.86 last year the shares have traded as high as $36.70 and fallen sharply since then. This morning I added a few more shares to the portfolio at HK$22.00 per share.
The story remains largely unchanged - strong cash flows from the Japanese pachinko business (a shrinking industry), a small shareholding in Macau Legend (HK:1680), a question over the impact of an increase in Japan's consumption tax and the potential to be one of the early movers as and when Japan legalises casinos. The only recent developments appear to be (i) an arrangement for the distribution of pachinko machines in Macau and (ii) a lawsuit which does not appear to be material to shareholders in the company.
With a dividend yield of 4.8% (less Japanese withholding tax), this is essentially a case of being paid to wait for Japan to legalise casinos.
The story remains largely unchanged - strong cash flows from the Japanese pachinko business (a shrinking industry), a small shareholding in Macau Legend (HK:1680), a question over the impact of an increase in Japan's consumption tax and the potential to be one of the early movers as and when Japan legalises casinos. The only recent developments appear to be (i) an arrangement for the distribution of pachinko machines in Macau and (ii) a lawsuit which does not appear to be material to shareholders in the company.
With a dividend yield of 4.8% (less Japanese withholding tax), this is essentially a case of being paid to wait for Japan to legalise casinos.
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