Wolf Money(portfolio update end May 2022)
Portfolio as at end of May
1.) Cash
2.) Singapore Medical Group(SMG)
Commentary
As we draw a close to a troubled month of May. Companies and alternative assets which had no fundamental backing suffered the blunt of the selling. A big lesson drawn from the sell down “All that glitters ain’t gold”. When Luna was then the popular keyword search on Yahoo(Google not even in existence) The Japanese pop group, Luna Sea was making waves in the pop scene during the late 90s. History had a way of repeating itself in a different way, Luna(the crypto)jostled to the top of Google keyword search in May. I wouldn’t go into detail amid the “Luna Sea of red”. My heartfelt sympathy to those who suffered under the selling carnage. Famous words from a song by Kelly Clarkson “Stronger” “what doesn’t kill you make you stronger”. When the going get tough, the tough get going. Wisdom are gained from the good and more so from the not so pleasant experience. I experienced the apocalyptic market in 2000 (Tech bubble crash), 2001(Sept 11), 2008(fall of Lehman,GFC) and more recently 2020(covid 19) every time when I felt like giving up, the market made a stunning recovery for the better. If you are holding quality companies bought at reasonable price, one shouldn’t be overly worry. Time in the market is better than timing the market. There are only three things one need to do when you make a bad financial mistake. First, admit it. Second learn from it and third move on. Enough pat talk. I wish everyone well with your investment.
Lone Wolf Fund was marginally down < 0.5% after factoring dividend received in May due to falling share price of Singapore Medical Group, the only company in LWF. My past experiences with the bear markets had led me to be more defensive since March by holding more cash and situational investment in Keppel Corp(Sold) help LWF achieved a return of 9.5% ytd. The defensive strategy payoff by limiting my downside. Yield on cash is also improving.
As from my previous update of SMG, the company had indicated foreign patients number are increasing. It bodes well for the company. I will be looking out for their half yearly result in Aug which will give me some indication on the strength of recovery in their foreign patient load. The company is cautiously optimistic that the foreign patients number can sustain in the second half of 2022. Dividend of 0.9c per share had been received in May. The company had less problems associated to the current market condition.
LWF still holds a very high level of liquidity. I am starting to see some opportunities in this corrective market. Base on my humble experience the bear market usually last 12-18 months. If I take Jan as the start of the bear market, the earliest date I would consider some bargain hunting after Oct this year or after March 2023 if the bear market is more sticky than usual. Slowly easing my way into the market will be prudent. There is no quick solution to the current market conundrum. The market face an uphill task working through the excesses accumulated over the last few years due to easy money. The situation of the market bare resemblance to Hercules’ 12 labours. The demi god needed to work through 12 laborious tasks in order to restore his family's name to the legion of Gods. Supply chain issues, Russia Ukraine war, China lockdown, high inflation, food shortage, high gas price, jump in interest rate, slowing economy, protectionism, climate change, covid 19 and trade war are some of Herculean tasks the market need to address before it can move forward. I have no doubt the market will always recovered if one buys quality. I hope no chicken or monkey(pox) business can derail the market healing process.
All been said the market might rally if two conditions are present 1.) Inflation coming down by 2-3 percentage points from current level even thou it is still high on historical basis and 2.) Fed slowing the pace of interest rate hike from the current 0.5% to 0.25%. The market might take it as an indicator to do a victory lap. The s&p 3800 target of the head and shoulder had been reached . That support will be critical as any weakness beyond 3800 might send the market down further by another 10 percentage points.
Last but not least, there is generally no free lunch in this market, concurred by our founding PM Mr. LKY “There is no free lunch in Singapore”. You never know when you get punched by a “Tiger” uppercut for something suppose to be free. In process becoming “broke(r)”. Have a great June ahead.
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