Wolf Money(portfolio update end Aug 2025)
High asset price, low unemployment
Our government has formed committees to look into strengthening our economy and employment. Given the era of trade war, Singapore as an entrepôt hub is under threat. We might enjoy the lowest baseline tariffs, but high tariffs on sub-sector like semiconductor and pharmaceutical exports are the most concerning. Both exports contribute a significant portion of our manufacturing output. It is a difficult situation for any country, not just Singapore, to deal with Draconian trade measures imposed by the US.
In the meantime, local job creation is showing signs of slowing down. As an observer of the economy, I suggest keeping asset prices high. It might be contrary to the message of prudence by MAS. My reasoning why high asset prices should be tolerated or even encouraged in the short term before we come out with a comprehensive economic plan to deal with the changing order of world trade, is as follows.
1.) High asset prices keep insolvency out of households. The big drop in employment and asset prices having a negative effect on China’s economy over the past few years is a reminder of the ills of deflation. Households facing financial difficulties can still en cash their assets without the effect of negative equity.
2.) High asset prices keep the economy humming along. I have not come across any country with a property crisis coming out of a slum with consumer spending intact. High asset prices stimulate spending and job creation.
3.) High asset prices keep our banks solvent. Billions of loans are tied to mortgages. Imagine a recession from the ensuing property collapse, which cost billions in write off in property loans. It will be catastrophic for the Singapore economy.
4.) I can appreciate the authority for keeping the coe high. A substantial drop in coe price can affect thousands of car owners. Negative equity will cause many car owners to declare bankruptcy.
Authorities will have their plates full on tackling the current economic problems which are permanent in nature. Government cooling measures on property and the stock market should be kept at a minimum. Only well-thought -sensible regulations are needed. Regulations coming out from a coffee break is the most unnecessary. A high price to someone can be low for others. Only good judgement can strike a balance.
Lone Wolf Fund(LWF)
Portfolio as at end of Aug 2025
1.) Cash
*Stocks are not rank in accordance to capital invested.
Commentary
Small gains, large returns
LWF had a slight uptick in returns in August. YTD returns stand at 16.5%(excluding dividend and cash yield), up 0.5% in August due to realised profits from Comfortdelgro and Great Eastern improving overall performance. There was a realised loss of 2% to Kimly’s position as I cleared my portfolio before I took my Sept break. If I don’t step into the market for the rest of the year. YTD performance would have surpassed my past 5-year average return of around 17.5%(including dividend and cash yield). My 20-year long-term annual return is approximately 13% CAGR. I did a rough estimate for every dollar invested without putting new money. I am able to achieve 10 to 11 fold returns over the past 20 years after I took a more serious approach to investing as a broker and later as a private investor. I highlighted these to encourage people who are just starting out on their investing journey. With the passage of time and grit, a big snowball can one day be achieved. Everyone’s path to success is different if I may highlight, but the destination towards financial freedom is similar.
Without the multi-baggers in my portfolio and by just achieving smaller returns consistently, the compounding effect is greater towards the latter part. It is far easier to achieve a 12% to 13% return than to have a few multi-baggers in my portfolio. As the cardinal rule of fund performance: Past performance is not indicative of future performance.
* Figures are back of my envelope calculations. No spreadsheet and no quantum computing.
ComfortDelGro(sold)
I can’t hide my disappointment on CDG results, given it has made plenty of acquisitions last year. The earnings should be much higher after spending a load of cash on buying companies in UK and Australia. The synergy and cost savings haven’t been realised yet. I am concerned about their UK business. It seems the UK government is adopting an asset-heavy bus contracting model. Addison Lee, which the company paid top dollars($461m) to acquire, underperformed by a great margin. A write-down on Addison Lee’s value is a real possibility if the unit continues to underperform for the next few quarters.
Nudging transport operators to pay for infrastructure improvements is the latest modus operandi by the UK government as many cities in UK can’t afford improvement to their infrastructure. I am concerned about the financial situation of the UK government. A weak economy and rising public spending is a deadly concoction of a crisis. The UK government’s borrowing needs to be kept in check.
Remember The UK is not United States, who can get away with money printing to avoid trouble. The mini-budget crisis in UK a few years ago that sent bond yields through the roof is an amber warning. The UK 30-year gilt is moving towards its highest since 1998. A potential crisis in UK will usher in an era of austerity with cut back to public services like bus and rail a certainty. Birmingham is one such example with their local council going broke. The city has to cut the frequency of thrash collection to save cost. UK sovereign risk is a clear and present danger for any company operating in the UK including those of CDG. I will revisit the company if their performance shows a marked improvement.
Kimly Ltd(sold)
I went to Kimly food court located at Lucky Plaza. The food court opened slightly just over a year ago is full of diners even after lunch hours. It seemed Kimly had made a good decision to set up a food court in the heart of Orchard Rd. There are plenty of choices in the food court. Lion City Tim Sum and Tenderbest are some Kimly in-house brands. There are third-party operators in the food court. The famous Tian Tian Chicken Rice set up an outlet, their second outlet after Maxwell food centre.
I just got to know Kimly is by far the largest Catalist-listed stock on our exchange. For funds specialising in small cap. Kimly is in a prime spot for EQDP fund consideration. I sold my holdings in Kimly with a 2% haircut as mentioned in my earlier discussion, I will be taking a month’s break. I hope to return re-energised and fresh. The selling was profit neutral as gains from the Great Eastern levelled things up. The purpose is to raise more cash for a potential deployment.
Cash
For the second month, LWF reduced the size of my portfolio. Cash inflow coming from CDG and Kimly pushes the cash level to 100% of the portfolio. I will be looking to deploy my capital during market weakness. I am on a hunt to look for higher risk-free instruments in the short term. MariBank is offering 1.28% for the first $100,000. Some short term cash will be invested in Mari Saveplus@2.09%(a hybrid of mmf and bond fund) at time of writing. They are running some promotions for new sign up. Please refer to their website for more information.
*Lone Wolf Investor doesn’t endorse MariBank
Summary
My posture towards the market is one of defensive. It is probably the second times in five and a half years LWF has a full cash portfolio. I bet one will think, staying out of the market is an easy thing to do. I can assure you, it is not. It is like yogi bear staying away from honey. With economic uncertainty and lower economic outlook, does it ever make sense to anyone, the property market, stock market and crypto are at all-time high around the world? One day those prices are going to reflect the reality on the ground. The divergence could go on for longer. Eventually there will be a day of reckoning for the market and I want no part of it. If I can play my cards well for the rest of the year. LWF is likely to achieve a return above long-term returns in 2025. Thank you. God Bless 🙏
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