Monday, August 31, 2009

Monthly Review - August 2009

To my surprise, August was yet another positive month for my investments.

Small net losses on mark to market investments were more than offset by by favourable currency movements, option premiums and supplemented by positive cash flows from my investment properties.

Income from my job was good and expenses were low.

Here are the details: actively managed funds were very slightly up. I currently have investments in actively managed funds investing in Thailand, Taiwan, Eastern Small Companies, European Small Companies and Vietnam;

2. my index tracking funds were slightly down I currently have exposure to Hong Kong, India, Taiwan and Russia;

3. my equity portfolio fell. I currently have meaningful investments in 20 companies listed in either Australia (3) or Hong Kong (17). I took a trivial loss on a small speculative day trading position;

4. my commodity investments were went up slightly with an increase in the price of nickel and a rise in my commodity ETFs more than offsetting a further decline in the price of lean hogs. I am now convinced that not only do pigs not fly but they are in fact burrowing animals;

5. my ELDs produced positive returns for the month. I had no outstanding CLDs this month;

6. all my properties are all fully rented and the tenants are paying the rent on time. I have both a positive cash flow and a surplus of income over expenses (which represents an increase in net worth);

7. currency movements were positive as the US$ declined.

I purchased three Hong Kong shares (China Blue Chemical, Hua Han and Cheung Kong Infrastructure) , took a loss on one small cap (Paradise Entertainment) small short term trade and entered into two OTC option contracts writing a put options against Hong Kong Tracker fund and China Construction Bank.

Income was strong (it will be erratic under the new job) and contributed to the gain for the month. My spending was low due to an absence of major items. The increased mortgage payments resulting from the refinancing completed in June adversely affect cash flow but not net worth as most of the payment is principal.

For the month, my net worth increased by a surprising 2.09%. The gains came from the combined effect of a weaker US$, positive rental income from properties and a high savings rate more than offsetting a small net loss on my other investments. The year to date increase is 55.5%. Even allowing for the payout arising from changing jobs, it has been fantastic progress this year. The possibility of retiring at the end of 2011 is, once again, very real.

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