Wolf Money(portfolio review end 2024)
Lone Wolf Fund(LWF)
Portfolio as at end of Dec 2024
1.) Cash
Commentary
My thoughts and prayers go to the victims’ families of the failed Jeju Air flight 7C2216. I wish all the affected passengers and their family members a speedy recovery.
I thought I had seen everything after living through life for close to half a century, but 2024 never fails to amuse me. Return of Trump, a $6.2m Banana, a 6 hours martial law in South Korea, bitcoin at $100k, Syrian dictator, Assad, as sad he can be is out of power and the shocking death of a friend. If 2024 was unpredictable, buckle up, here comes 2025.
2025 is the year of the snake in the Chinese Zodiac. Some major world events happened in the previous snake years, including The Pearl Harbour Attack, The Tiananmen Protest, the beginning of the Great Depression. The birth of Singapore also co insight with the year of the snake.
I will keep my review short and sweet as the past doesn’t have much bearing for the future. I am sure the outlook might make better audience. Lone Wolf Fund enjoys a good return in 2024. LWF made 33.5% in 2024 vs STI gains of 17%. If dividends and cash yield are added, the total return would be 36% vs STI 21%.
I find 2024 a strange year for LWF amid a good one. Without holding any Crypto, Nvidia or any of the magnificence 7, local banks and SingTel. LWF still managed an undeserving good return. It is beyond my imagination. I have a lot to be thankful for. The Great Lord must be working his miracle behind the scene. The bulk of 2024’s gains came from Great Eastern Holdings which was the subject of a privatisation offer by OCBC. I wouldn’t repeat how I felt about the offer. You can read it here. Boustead Singapore and Valuetronics’ strong earnings contributed additional gains to LWF in the first half of 2024. There were strong gains made in SingPost recently due to the company’s asset monetisation strategy, which was before the “parcel gate” troubles. The returns were enhanced by the high cash yield.
Even though it was another year of satisfactory returns for Lone Wolf Fund. I do have my slip-up. Luckily, most boo-boos were confined to area of omission. For example, the extraordinary gains in GRAB Holding after I sold it. The share price had a 50% improvement within two months after I farmed out the shares. That is USD 15k in additional “profit cutting”. I learned from my time as a broker, patience to follow through on your investment thesis outweighs the ability to time the market. Patience has also been my Achilles’ heel. I have been trying to improve it ever since my first adventure into the stock market. It is still a work-in-progress.
I wish to make a declaration, the performance in 2024 is unlikely to repeat in 2025, given my conservative outlook towards the market. I am setting my target of no return to low single digit return for 2025. Given the market has been making new highs every other day, a big pull-back is on the card. Below are my past 5 years return if it remotely interest you. All figures are human generated, no spreadsheet and quantum computing. I have rounded down my total returns to the nearest 0.5%. I have also included some of the best performing companies in my portfolio for that particular year.
2020 +13% (ST Engineering)
2021 +15% (Boustead Singapore)
2022 +10% (Keppel Corporation)
2024 +36% (Great Eastern, Valuetronics, Boustead Singapore, SingPost)
What the future holds…
Finally, the much anticipated correction in Wall Street came. From the look of it, the bulls had a great run and it looks rather tired. A correction lower down the risk of a crash which in itself is not a bad thing. Correction can range from a small 5% pullback to a more spectacular 20%.
As mentioned in my update last month, it is my desire to shift towards investments that pay a recurring income. I favour companies that pay a dividend yield of at least 5%. Wilmar is one such company that pays a dividend yield of at least 5.4% at the time of writing. Stopping short of giving a firm commitment, Wilmar is likely to feature more regularly in my portfolio. There is Webull, the trading platform. There is Tesla bull, who love Elon Musk and there is Wilmar bull.
The index has done well over the past year because the Fabulous 4, namely the 3 local banks and SingTel. The Fabulous 4 make up more than half of STI’s return. It would had been a very different picture if you stripped out the 4 stocks. Most segments of our market failed to light up investors’ imagination. REITs and property counters were struggling for air and Genting Singapore was trading closer to its 52-week low. In 2007, when the index was trading near the same level, Wilmar was trading in excess of $4.20. Juxtapositions to its current share price which struggles to hold on to $3. Wilmar was down 13% in 2024. Another example, Boustead has been trading at half of its price since 2007. STI index headline of 17% gain in 2024 masks the lack of progress in many listed companies. Valuations for many companies have came down and there are more companies seeking delistings than listings in 2024 with Hai Leck the latest to announce a privatisation offer, I do have a tiny weeny bit of shares in the company. That makes it a hat trick of privatisation offers happening to the companies I had invested over the past 2 years. The breadth and depth of our market was simply inadequate to call it a proper bull market. The lack of interest from retail and institutions’ interest in certain segments of the market were apparent. My wish is for the stock market review committee to come out with a good solution as soon as possible to help our market. I have listed out my wish list. You can read about it here.
As the Global South guess Trump’s next move. There will be more volatility in the market. I felt the media was giving Trump too much attention. With or without Trump, the world continues to progress. Countries should continue to improve their domestic economy by improving rules and processes. It will set a stronger base to capture the opportunity for the next economic upturn.
Local politics will take centre stage in 2025. General election needs to be held by Nov next year. There will be more contestation. The ability for the incumbent to gather 2/3 of the parliament votes will be tested by the electorates. More populous policies will be introduced leading up to election. One way to help our local f&b and retail is to introduce some form of targeted shopping vouchers which can be used on a wider range of goods including white goods. Maybe a handphone upgrading vouchers to help the telecos and citizen cope with rising cost of gadgets or to help with the subscription of their broadband. CDC vouchers to be enhanced by making it more acceptable by hawker stalls. A good number of hawkers stalls don’t accept CDC vouchers. I like the NS vouchers format. It allows anyone to spend at any businesses with a paynow qr. It is a more convenient way to optimise the CDC vouchers. It is important for the government to get a grip with the inflationary pressures facing everyday folks. My kopi going up 40% within 3 years is not normal. My caifan going up 50% within 3 years is not normal.
Wilmar International
Another fallen angel, Wilmar, had a tough time in 2024. The company’s shares have underperformed the broader STI Index. I am willing to look past the short-term weaknesses. As they operate in a sector which I think might do well in 2025. Soft commodities are likely to see an improvement in prices in a more inflationary environment no thanks to climate change. It is no rocket science, the world is walking into a food crisis. The flood in Malaysia is one example which caused palm oil prices to jump to one year high recently. Given Wilmar is one of the largest producers of palm oil in the world, a favourable commodity’s tailwind can lead to improvement in profitability. Wilmar pays a decent dividend of 5.4% at the time of writing. Wilmar’s board should consider a non-core asset divestment strategy to address the under performance of its share price.
There were news on Wilmar’s 20% owned Perennial Holdings given a licence to operate a primary care hospital in Tianjin. This is the first time a foreign entity is allowed full ownership of a private hospital in China. It does look like Perennial is pivoting into a healthcare developer.
Just before the year is up. Wilmar has decided to buy over 31% stake in Adani Wilmar, held by Adani Enterprises. Another 13% stake will be sold to investors to meet the minimum share float. The call and put option can be exercised 12 months from the date of agreement. It is better for Wilmar to chart its own course in India with the full ownership of Adani Wilmar because Adani Group in recent time has been involved with many corporate scandals. It has become a liability to the other shareholders of Adani Wilmar. Wilmar will enjoy a gain of US 1.48b if the transaction is done at a max price IDR 305 per share. Wilmar will also like to bring in a strategic investor, to Adani Wilmar to ride the growth in India. I hope the new investor can be an established Indian conglomerate to help navigate the local politics. I have no idea whether the deal is cheap or expensive. From a 5-years perspective, it does seem they got the Adani Wilmar share at the lower range of its 5-years trading range(chart.1). The transaction gives Wilmar a bigger foothold in India which acts as a counter weight to the slowdown in China.
Boustead Singapore
This position is more situational. The potential sale of Como Orchard if it happens, will bring in millions in profit for the company. A special dividend can be considered if the sale of Como Orchard goes through. The company pays a 5.4% dividend yield at the time of writing. Share was unchanged for the month.
Genting Singapore
I am taking a small “bet” on Genting Singapore. I am not betting the whole house on it. To be frank, I struggled to put in a buy order for this stock due to my religious beliefs. I am concerned whether I am promoting gambling by investing in Genting SP. My wife tells me to just treat it as an investment into any other entertainment company, given Genting Singapore is not a one-dimensional company. There are businesses like hospitality, retail, f&b and theme parks within the group. Just to be clear, I am against compulsive gambling. The ills of gambling addiction lead people to do silly things.
Bad news is coming thick and fast for Genting Singapore. Even Genting Malaysia Bhd shares are suffering from weak momentum. I am taking a contrarian approach towards the company, the market is negative about the company prospects and the share price has been punished to near 15 years lows. The earnings of the company is all over the place. There is no point trying to guess the next quarter profit. The key is the win rates of the house. If the house is experiencing a better win rates, profit will recover, the negative impact on the company’s results can be felt if the casino is met with “Du Shen or God of Gambling” having better luck at the table. In the longer run, it doesn’t pay to gamble, the house odds will eventually catch up with the gamblers. Ytd, the stock is down 23%. Share bounced up from the lows to close at 76.5c.
Cash
I favour cash, and it continues to be at a high level in my portfolio. Cash is my “nuclear option” for deployment if the market goes through a substantial pull back. Currently, there is a lack of suitable candidates for my portfolio given the lack of interest in mid and small cap in our market. I predict local risk free yield to be in the range of 2.5% to 3% over the course of 2025.
Summary
As for my new year resolution, I hope to continue to do what I do and do it better. The ability to show profitability allows me time and resources to bring my family to explore the world. There are so many wonderful places in the world which I would like to visit. I would like to volunteer more time and also within my financial capacity to help the less fortunate in our community. Lastly, a healthy dose of exercise keeps the sickness away. If anyone keen on leisure cycling, join me for a ride. I will be reading more to improve my understanding of the market. Maybe buy some stocks that I have never thought I would.
As for Singapore’s economy, the latest GDP number looks strong, but there are pockets of weakness in retail and f&b. Domestic spendings continue to be weak. From coffee shops to high-end restaurants there was an obvious drawdown in revenue. Retailers are facing its old nemesis from online shopping and a stronger Singapore dollar putting pressure on the sector. Although I stop short of being a permabear, 2025 economy should be viewed with caution.
I would like to end the year with a story of kindness. Emperor Hadrian trusted his throne to Antoninus, whom he had no blood relationship with. He catches a glimpse of his kindness in private when he helps his father-in-law climb up the stairs. That gave him enough confidence to appoint him the next emperor of Rome. Novelist Kurt Vonnegut once wrote, “There is only one rule about living on earth. Be kind”.
Kind to strangers.
Kind to people who work with or work for you.
Kind to someone who makes a mistake.
Kind to both customers and vendors.
Kind to someone you dislike.
Kind to the future and to the generation not yet born.
Kind to animals.(I added this)
I wish all readers a happy new year. Let kindness light up your way in 2025. God bless 🙏
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