Monday, February 28, 2011

Monthly Review - February 2011

When I entered the data for February, I was expecting to show a loss on my investments and, most likely, a decrease in net worth. Ending the month with a solid gain in net worth came as a considerable surprise and I spent some time reviewing the spreadsheet searching for the error(s). There wasn't one.

So February ended up being a surprising month of positive financial progress. Equities fell, but only slightly with gains at the beginning of the month being only marginally less than the losses at the end of the month. My Australian equities were actually ahead for the month. Commodities rose sharply, especially silver. FX movements were slightly negative with the AUD rising against the HKD/USD and the NZD falling. Cash flow on the properties was positive now that we are back to 100% occupancy. Savings were excellent as expenses were low. I also wrote back some accrued long term expenses which I considered over provided for.

Here are the details:

1. my Hong Kong equity portfolio fell modestly. This month I made a substantial investment in China Gas (HK:384) and a small additional investment in China Construction Bank (HK:939);

2. my ETFs were down with gains in Russia and China being insufficient to offset declines in India, Vietnam and Taiwan;

3. my commodities rose sharply with silver jumping significantly and more modest gains in my commodity ETF and ETC NICK. The ETC HOGS continued to demonstrate the fact the pigs are burrowing animals;

4. all of my properties are now occupied, the tenants are paying on time and there was only one small repair bill (I will have a larger one at some stage on a property suffering from a persistent leak). I have one lease expiring next month and the tenant has not indicated whether he wishes to renew or not. If he does want to renew, he is in for a shock as the last fixing was below market and the current market is more than 30% above his current rent;

5. currency movements were slightly negative, as the decline in the NZD was only partly offset by gains in the AUD;

6. my position in bonds remains small. There were no purchases this month;

7. a put option against the HKD/NZD was exercised against me for a small loss;

8. savings were very strong with low expenses.

My cash position is now high with 26 months of expenses in cash or equivalents (the same as last month). This is much more cash than I need and one of my current tasks is to find somewhere to invest at least half of it.

For the month, my net worth increased 2.52%. The year to date increase is 6.70%.

My target retirement window remains sometime between early 2012 and early 2013. While the possibility of a one year extension exists, it will take some adverse market conditions or other unexpected event to require that. Every passing month brings me closer to my retirement goal - it's possible that I may be handing in my notice less than a year from today.


JD said...

Whats your view on Tai Cheung at the current price? It's still at a nice discount to NAV and the last "six months financial report" showed good earning. Selling their Chung Hum Kok and/or Plunkett Road or some of their non-residential properties might narrow the price-NAV gap?

Does your blog continue post-retirement?

Best of luck with your plan to retire in <1 year!

traineeinvestor said...


I liked the last interim from Tai Cheung. The NAV discount remains substantial and is more than I would expect it to be, especially given market conditions. That said, it may well be an exercise in patience while we wait for some of that value to be unlocked. Most likely it will take asset sales to achieve that result.

Given that I have substantial investments directly into HK real estate, adding more HK real estate companies is probably not a good idea from a diversification standpoint. That said, I'm a sucker for stocks with clean balance sheets selling for less than the value of their assets.

Yes, I do intend to continue the blog post-retirement. Spending time on my finances becomes more important in retirement given that, by definition, I lose the comfort of having job related income which is higher than my living expenses.