Posted on January 4, 2010 - by musicwhiz

December 2009 and FY 2009 Portfolio Summary and Review

Musicwhiz Portfolio - Dec 31, 2009

December 2009 was generally a quiet month, as is generally the case as Fund Managers and traders go on long leave and take vacations due to the Christmas season (it’s after all a big festival and event in the Western World). Over here in Asia, the mood was also muted and stock market action was generally lacklustre, with trading volumes at multi-month lows and there was a general lack of interest all around. Even though the Straits Times Index managed to break new highs for 2009 in the last month of the year, there was hardly much cheer and excitement as problems in Dubai World and Greece’s debt crisis threatened to stall the global economic recovery and grind it to a temporary halt.

Surprisingly, in the USA, things had begun to look up, with home sales rising to their highest levels (November home sales up 7.4%) in over 3 years as the Obama Stimulus Package took effect. GDP growth for USA in 3Q 2009 was also 2.2%, which was considered surprisingly strong after the worst recession in 70 years ravaged the US economy and sent unemployment rate soaring past 10%. These bits and pieces of positive newsflow managed to keep the DJIA above the 10,000 level, when just 9 months ago it was hovering at the 6,500 level. Indeed, what a difference 9 months makes! No one could have foretold that the rebound in equities would be so sharp and sudden (well many did mention it on hindsight, but somehow no one had predicted it beforehand haha).

HDB prices continued to moderate with the completion and official opening of The Pinnacle @ Duxton, with MM Lee officiating the ceremony and mentioning that HDB prices will continue to rise to ensure Singaporeans are able to enjoy capital gains on their property purchase. Rules were also changed to ensure first-time home buyers had a higher chance of securing a flat, and more BTO sites were released, including the Dawson plot which saw prices for 4-room flats hit S$350,000 to S$500,000 for an 84 square metre unit! To me, it’s still an affordability issue because when the crunch comes, these couples may have over-leveraged and have nothing left in their CPF (remember the salary cap is still S$8,000 for HDB flats).

As the year draws to a close, all I can say is that it has been a very remarkable year for me in terms of increasing my investment experience and knowledge. In just one year alone, I have learnt a lot about how companies operate, and been through several mistakes which would leave deep impressions on me for the rest of my life. My learning through the divestment of Ezra and Swiber, as well as insights into their capital structure, Balance Sheet and Cash Flow have revealed insights to me which I had never known before as a value investor. Thanks to the explanations from investors such as Donmihaihai as well as contributions from experienced value investors dydx and d.o.g. on Wallstraits forums, I have intensified my reading and analysis and moving forward, will apply these principles more stringently and rigidly in search of a worthy investment which comes along with adequate margin of safety. Read more…

Related posts:

1. September 2009 Portfolio Summary and Review
2. August 2009 Portfolio Summary and Review
3. October 2009 Portfolio Summary and Review