TUB Path to 100% - Oct 2023
It has been a turbulent year so far. I have not followed through on my May resolution to restart regular blogging. Instead, my blogging endeavors have been sporadic and far from the original plan. The demands of my startup job, often keeping me at work past 7pm exhausted, have delayed my writing plans. Still, I've tried to keep providing updates through other platforms like X, my Telegram group and to a lesser extent, Facebook and InvestingNote.
Though my full-time work schedule is hectic, I've contributed articles to an intriguing new platform called Fundflicks. I managed to produce a minimum of two articles per month in August and September. These articles primarily revolve around companies in which I have ownership, either through equity or options. This site, currently in beta testing, allows me to share research on specific companies. Check it out and register for free if you're interested.
Now that I've addressed that, let me provide an overview of my portfolio. It has continue to struggle in this high interest rate market environment. Many of my small cap holdings have continued to plunge dramatically, increasing my losses. Though I hesitate to calculate the exact figure, my portfolio appears down approximately 70% since I first established it. Hard lessons have been learnt. When interest rates stay elevated, small caps simply cannot drive outsized gains.
I expect the period of elevated interest rates to continue. Looking ahead, I plan to transition majority of my direct equity holdings toward large cap companies. These mature businesses often demonstrate greater stability and earning power relative to small-cap firms, especially in a high interest rate environment. This year's performance supports that viewpoint, as the equal-weighted S&P 500 Index has lagged the standard S&P 500 index, underscoring the outperformance mainly driven by several heavyweight companies.
I will also employ options contracts to prudently gain targeted exposure to promising small-cap stocks. This balanced approach of shifting to large-cap stocks for the core portfolio, while maintaining options-based involvement in selective smaller players, aims to better navigate the current high interest rate environment. By adapting my investment strategy in a calibrated manner, I hope to steadily guide my holdings toward renewed growth over the long-term.
My Current Portfolio vs May 2023 (According to Cost basis):
- FVRR - Read Article on Fundflick
- HDSN - Read Article on Fundflick
- Keppel Infrastructure Trust (SGX: A7RU)
- DTC - Read Article on Fundflick
- FUBO - Read Article on Fundflick
- HUT (options)
- CRNT (options)
Compared to May 23, I have largely divested from my previous Singapore-based equity holdings, with the sole remaining direct position being Keppel Infrastructure Trust. My portfolio is now almost entirely devoid of cash reserves. Going forward, my plan is to exit my DTC and FUBO position in the coming month, maintaining only options exposure to capture future upside if conditions improve. This reallocation of assets should allow me to replenish some capital reserves. However, current market weakness has not provided an optimal exit point as of yet.
Looking further ahead, I aim to restrict my portfolio to holdings in 10 companies maximum, with the balance allocated to options contracts. 2023 is shaping up to be another year focused on reorganizing my strategy. I am already evaluating which positions have the strongest long-term potential and analyzing catalysts that could materialize in 2024 and beyond.
While the challenging market environment has weighed on my performance, I believe these difficult periods have helped strengthen my investing approach. Continued reflection and responsiveness to changing conditions should better position me to generate returns going forward. Though patience will be required, I am confident my adapted strategy will ultimately prove successful.