1) Warrant trading
Ever since the HSI index started its slow recovery, the speculation game has become much harder to play because of the wild swings involved. I added warrant positions when I thought the index was moving in my desired direction and then I was forced to remove those position when my cut loss rule was triggered. This happened repeatedly as the index was moving sideways for months. As a result, I have lost slightly more than SGD4,000 from 23 Mar 2020 till 14 Jun 2020. Although my warrant trading overall is still in profit, having more than SGD4,000 accumulated loss in the most recent 3 months is not something I can embrace lightly.
It was then I decided to stick to my new plan instead. I will initiate out-of-the-money call warrant position with longest expiry date when HSI index starts to move up from the most recent dip for 1 to 2 months with no cut loss rules. I decided to do it this way because I feel that stock market currently is simply looking forward to recovery, regardless of weak economy due to the COVID-19 pandemic. I initiated new HSI call warrant position on 12 Jun 2020, 1 day after the US DJIA index dropped 6.9% due to the fear of possible second wave of COVID-19 outbreak in the US and the US fed's latest remark on maintaining the current interest rate as well as the future economy outlook. I feel that the market participants are simply over-reacted.
Let's hope this time I can guess it right.
2) Stock Investing
I made some changes in my portfolio with the aim to increase the proportion of growth stock further because I want to speed up the portfolio rate of return which I feel I want be more adventerous in doing it. Relying on dividend return alone is not going to make it fast.
So, this is what I made up in my mind:
a) Stocks listed in Asian stock market
I will look for companies that can grow both revenue and net profit YoY consistently. I prefer those with business model that has recurring revenue and align to the current consumer macro-trends and they must pay dividend consistently so that I can get paid while waiting patiently for the share price to grow. The bottomline is, they must have more rooms to grow further.
b) Stocks listed in the US stock market
Similar to part (a) but with some major differences. I will look for companies specifically in packaged software sector that invest hugely in R&D & sales & marketing in an effort to expand their business and clientele aggresively, even to an extend they choose to make losses YoY. The bottomline is they must have recurring revenue and able to generate rich operating cash flow YoY.
In view of these changes, I sold off both Mapletree Commercial Trust (N2IU) and Tenaga (5347) and then bought in Opensys (0040), Silverlake Axis (5CP) and Minecast (MIME).
With not-so-good warrant trading performance in the most recent three months, I decided to just simply hold HSI call warrant until it hits my profit taking level because I feel that stock market will simply recover in the next 2 months irregardless of current economic outlook. I will continue looking forward to increase the size of my growth stock in my portfolio to speed up the rate of return and be more adventurous on doing it.
