January was another positive month for financial progress with small losses on my investments being outweighed by positive cash flow on my properties, a good savings rate and the receipt of my annual bonus to produce a solid gain in net worth. It was particularly pleasing that the HK equities actually increased in value (if only marginally) in a month when the local index fell.
Here are the details:
1. my Hong Kong equity portfolio appreciated slightly, in spite of a minor pull back in the overall market towards the end of the month. This was surprising. There were no transactions this month
2. my ETFs declined in line with their respective indexes (Hong Kong, Taiwan, Russia and India)
3. my commodities declined slightly
4. all of my properties are let and all tenants were paying on time producing a positive cash flow and contributing to the gain in net worth
5. currency movements produced a small loss
6. I did not do any ELDs
7. I did one small day trade on Friday which will settle next week and show up in the February review.
8. savings were positive with income at the high end of expectations and expenses more or less in line. I also received part of my annual bonus this month (the other part will be paid next month)
For the month, net worth increased by 3.2%. A good start to the year.
Saturday, January 30, 2010
Thursday, January 21, 2010
100% occupancy again
The renovation project on my last property purchase was completed in mid-December. Unfortunately, the Christmas/New Year period is a bad time to be looking for tenants for residential property and I had, at best, limited expectations of being able to secure a tenant quickly. I had to wait until last week to have a tenant signed up and start paying rent. The rent was in the middle of the expected range.
Now that I am back to 100% occupancy on the portfolio I can start thinking about whether I want to look for another property this year. I have been building up cash since early December and will receive a bonus in early February. Given that I currently get close to zero on cash in the bank, finding a productive use for the money is something of a priority. Unfortunately, property prices remain high and yields consequently low making further property acquisitions relatively unappealing. The stock market as a whole is not the bargain it was a year ago. This may be one of those times when being patient and waiting for an opportunity will pay off.
Now that I am back to 100% occupancy on the portfolio I can start thinking about whether I want to look for another property this year. I have been building up cash since early December and will receive a bonus in early February. Given that I currently get close to zero on cash in the bank, finding a productive use for the money is something of a priority. Unfortunately, property prices remain high and yields consequently low making further property acquisitions relatively unappealing. The stock market as a whole is not the bargain it was a year ago. This may be one of those times when being patient and waiting for an opportunity will pay off.
Sunday, January 17, 2010
Book Review - The Myth of the Rational Market
In "The Myth of the Rational Market" Justin Fox traces the history of the development of various theories about how financial markets work, how efficient (or not) they are and the applications of those theories to investment management.
From a historical perspective, the book was a great read.
In terms of conclusions, Fox ends up supporting the notion that markets are quite efficient in distributing information but that neither market participants as individuals nor market participants as a whole are entirely rational. This conclusion is at odds with a lot of the popular academic theories such as the efficient market hypothesis as well as the logic of game theory. It is also well supported by argument and evidence.
Fox makes a clear distinction (which is often missing from (or glossed over) other writings on the subject) between the efficiency of markets and their rationality.
Fox covers issues like the inability of active fund managers to "beat the market", the case for hyper rational investors (like Buffett) to do so and makes some very accurate condemnations of Alan Greenspan (and other market regulators) for facilitating the economic (and regulatory) conditions which precipitated the credit crisis.
Fox also deserves praise for writing in terms which are easy for a lay person to follow and avoiding the trap of getting bogged down on technical issues.
An excellent read.
From a historical perspective, the book was a great read.
In terms of conclusions, Fox ends up supporting the notion that markets are quite efficient in distributing information but that neither market participants as individuals nor market participants as a whole are entirely rational. This conclusion is at odds with a lot of the popular academic theories such as the efficient market hypothesis as well as the logic of game theory. It is also well supported by argument and evidence.
Fox makes a clear distinction (which is often missing from (or glossed over) other writings on the subject) between the efficiency of markets and their rationality.
Fox covers issues like the inability of active fund managers to "beat the market", the case for hyper rational investors (like Buffett) to do so and makes some very accurate condemnations of Alan Greenspan (and other market regulators) for facilitating the economic (and regulatory) conditions which precipitated the credit crisis.
Fox also deserves praise for writing in terms which are easy for a lay person to follow and avoiding the trap of getting bogged down on technical issues.
An excellent read.
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