2017 Performance Scorecard

It’s Christmas eve, so tis’ the season to be reflective? 🙂 As this is my first annual review on this blog, this is going to be a long post, so grab an iced tea and sit tight.

Career

2017 has been a significant year of change for me, having to adapt to a new work environment, new job and hit with restructuring within the company. It’s been a hell of a ride and I would say 2017 was the year I grew the most professionally since joining the workforce.

Looking to 2018, hopefully I get a positive resolution to the restructuring, or else I’ll be back in the job hunt.

Investments

On the investment front, only 1 word can describe my year’s performance.

This year was my best annual return yet, owing much to the improving US earnings, tax reform speculation and some stock speculation turning out swimmingly. Although I’ve sat out the cryptocurrency mania and probably missed out on easily doubling, tripling or even quintupling my money, I’m happy with my overall performance and will be looking to replicate it next year.

Milestones

If you have been following my blog, you will know that I achieved a 6 digit portfolio in September – October after 4 years in the market. It took a lot of patience and constant disciplined saving of a sizeable portion of my income (accountancy grads get low starting pay after all) to get here. I’m grateful for the progress I’ve made and hopefully the next 100k comes sooner by the power of compounding.

2017 XIRR

XIRR stands for extended internal rate of return, a measure of return which takes into account the timing of capital injection and cashflows. The following chart depicts my XIRR over the years against performance of SPY, the S&P 500 ETF:

This year’s XIRR was exceptional at 33.83%, outperforming the SPY by roughly 17%, which is pogchamp.

As you can see, I had 2 pretty much dud years in 2015 and 2016. This was mainly due to me trying to trade around my core positions (FB and GOOGL mainly) too much, resulting in me missing out on a lot of the upside. Performance was further dragged down by Keppel Corporation’s decline in 2015 that spilt over to 2016 as well as Disney’s decline on cordcutting worries in 2016.

Those 2 years taught me that I suck at timing the market. As such, you will see later that I had very few transactions this year, resulting in a whole lot of unrealised gains.

Given this year’s stellar performance, my XIRR since 2014 was boosted to 15.22% overall, pretty decent if I might so.

Portfolio

A quick portfolio update before diving into the annual review:

This month’s performance was driven largely by gains in Valeant Pharmaceuticals and the overall US portfolio on the backs of US tax reform bill being passed by the US Congress and Senate. This is offset slightly by the decline in Keppel Corporation from the 52 high.

The only significant transaction this month was of course my purchase of Tencent. One for the future.

With that out of way, here’s my annual portfolio value over the past 4 years mapped against my total capital invested:

Currently, I’ve cumulatively poured in roughly SGD 78k in capital into my portfolio, which is valued at roughly SGD 117k in the market, determined using the following exchange rates: SGD/HKD – 5.81 and USD/SGD – 1.3448.

2017 Top 5 Portfolio Contributors

As you can see, most of my winners I’ve been holding for more than a year.

My anchor stocks Google and Facebook had a stellar year on EPS growth and tax reform speculation (and realisation). I remember the first stock I ever bought was Facebook in 2013 at $47. At $177.20 now, I’ve learnt that you don’t trade Facebook, just own it.

Keppel Corporation – I got in in late 2015 and continue to hold it on improving fundamentals.

Valeant Pharmaceuticals – This was a speculation I initiated this year in March, betting on the CEO’s ability to reduce the company’s debt as he was a great operator at Perrigo. I sold in August, realised my mistake and immediately bought back. It has paid off handsomely with 80+% gain from my initial position.

Bank of America – I’ve held this for 2 years on rising interest rate speculation and it has almost reached a double for me. With the possibility of further rate hikes in 2018, it should be good news for the US bank with the largest deposit base. The only risk being that rising interest rates could cause an inverted yield curve, a historical sign of impending recession. This has been called into question, but something to watch out for.

I don’t have any losers on my portfolio at the moment. My only relative underperformer would be Walt Disney, which until its recent deal with 21st Century Fox was doing nothing for me due to declining ESPN subscribers.

Dividends

I started the year looking to boost this area of my portfolio as I look to milk more passive cashflow from my portfolio, which is partly why I bought into Keppel REIT and Frasers Centrepoint Limited this year. Frankly US stocks do not offer attractive yields and coupled with the 30% dividend withholding tax, what you do eventually receive is peanuts. Here’s a dividend summary for the year:

This compared to SGD 494.13 in 2016 is an improvement, but I’ll be on the constant look out for undervalued dividend paying stocks.

Conclusion

This year has been a great year to be a US stock picker. With markets at all time highs, a pro business US President (let’s not debate how ridiculous he is), improving US economic indicators, it’s simply stock heaven.

So here’s me signing off on a great year and wishing everybody a Merry Xmas and Happy New Year!

How did you do in 2017? Do let me know in the comments or email!

Other 2017 Portfolio Updates
August 2017
September 2017
October 2017
November 2017

Happy Hunting!
KK