The whole investing world was arrested by great exuberance as the world ushered in the new year. This vivacity, however, was cut short by the WuHan virus outbreak. All market rallying came to a halt when the news of the outbreak broke. It has been a very unsettling time since the first case here in Singapore, to speak the least.
Much has been written on how investors should react during this time of health crisis:
As the virus wreaked havoc throughout the world, I took the opportunity to adjust my portfolio. I sold 2 counters: UMS and Micro-Mechanics.
- UMS: I decided to let go of UMS mainly to take profit. Profit plus dividends made up 44% gain on initial investment. UMS is a solid company in my opinion. It has a strong balance sheet, excellent free cash flow of some S$33m (78% of EBIT), and pays out decent dividends. When this epidemic blows over, I might pick up UMS again. I will be looking at a price range between $0.55 (estimated intrinsic value) and $0.60.
- Micro-Mechanics: Buying Micro-Mechanics was a mistake right from the start some 13 months ago. I was new to investing then and had not learned much about value investing, and I guessed I bought it when it was relatively expensive (PB=4). When the share price went back up to the $1.80 range, I decided to sell, making a small profit of 7%. Micro-Mechanics is also a solid company with a great balance sheet, adequate cash flow, and pays out great dividends (currently 5%). When the price is right ($1.35), I might consider buying it again. Latest news has it that Micro-Mechanics’s Suzhou factory will be temporarily closed amid the virus outbreak until Feb 10. This is not very good news from Micro-Mechanics.
While I did not buy any new stocks in January, I continued to maintain the investment that my wife and I have with MoneyOwl (since July 2019). Total returns at the end of January stood at 5.49%.
The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.The Intelligent Investor, p. 220, Benjamin Graham
With January being the CNY month, my budget basically went out of the window.
When the new year rolled around, I decided to keep tap on my expenses using Seedly’s Expense Tracker & Budget App. My budget for monthly expenses:
- Food/Groceries/Medical: $700-$900
- Home/Utilities/Communication: $350-$500
- Transport: $300
- Education: $700
- Insurance: $750
- Parents: $500
- Vacation: $500
Well, how did I do? Not too badly, if I ignore the extra spending for CNY and new school needs.
Actual expenses for January came up to $7409.69. Breakdown as follows:
- Food/Groceries/Medical: $1048.24 (exceeded budget)
- Home/Utilities/Communication: $330.28 (within budget)
- Transport: $135.00 (within budget)
- Education: $2211.00 (exceeded budget, inclusive of new macbook for school use bought on staff discount … it pays to have friends who have lobang)
- Insurance: $750 (auto-transfer to another account)
- Parents: $500
- Vacation: $500 (auto-transfer to another account)
- CNY Spending 1: Ang Bao: $1400 (my part only; not inclusive of wife’s contribution)
- CNY Spending 2: Shopping: $535.17
The Seedly app works quite well as an expense tracker. It is free and pretty user-friendly. The only con is it runs only when the phone is connected to the internet.