Heartland Boy 2018 Stock Performance Review

2018 is behind us and it is time for an annual review of Heartland Boy’s stock portfolio. The metric used to measure the stock performance would be Internal Rate of Return (“IRR”) and the relevant benchmark is the Singapore Straits Times Index (STI Exchange Traded Fund). Having a benchmark is important as it allows Heartland Boy to track and compare his active investment strategy. Heartland Boy will also be including his cash component when calculating his stock performance. Returns will include both realised and unrealised transactions. Without further ado, let’s get straight down to business.

Historical Stock Performance Of Heartland Boy

Diagram 1: Heartland Boy’s Investment Track Record Vs STI

From the table shown above, 2018 was a disastrous year for Heartland Boy. It was his WORST annual performance in his 5 years of investing. This severely negated all the good work done previously. As a result, his overall XIRR since beginning 2014 stands at a negative -0.01%. He would be better off holding cash and gorging on Netflix, Disney+ instead. Here is the detailed breakdown of the individual equity counters that contributed to his set of disastrous results in 2018.

2018 Stock Performance Review Analysis

Diagram 2: All equity transactions for Heartland Boy in 2018

Now that the report card has already been handed out for some time, which Heartland Boy evaluated himself with an ‘E’ grade, he finally has time to cast his emotions aside. Here is his cold, hard analysis of the investing lessons learnt in an eventful 2018.

1. Don’t Be So Careless

Heartland Boy committed a cardinal sin which pretty much summed up his 2018 portfolio returns. As he often alternates between DBS Vickers or Standard Chartered as his brokerage platform, he made the mistake of selling a stock on the wrong platform. As a result, he short sell stocks that he did not own and the entire drama itself warranted a blog post on its own.

In short, he never recovered from this morale-damaging mistake.

2. Too Trigger Happy

In the first half of 2018, Heartland Boy was still riding high on confidence owing to the relatively solid 2017 investment returns. This optimism gave rise to a false sense of infallibility and led to impulse purchases such as Ascendas Hospitality Trust and Hock Lian Seng. These stocks were subsequently sold a few months later without triggering their respective stop-loss orders. This was poor portfolio management on his part. Worse, such frequent transactions all added up to unnecessary brokerage commissions and distractions.

Therefore, he is reminded by one of Warren Buffett’s core investing philosophies– to only swing the baseball bat a few times.

3. Did Not Cut Loss When Stop-Loss Orders Were Reached

On 5 July 2018, Heartland Boy’s portfolio experienced a black swan event of sorts. The government announced fresh cooling measures to the Singapore residential property just when a firm recovery was occurring. On the next trading day, equities exposed to the Singapore property market took a nosedive, sinking anywhere from -5% to -17%. Obviously, stop loss orders for APAC Realty and Roxy Pacific were triggered. However, Heartland Boy did not have the courage to react. In other words, he did not have the discipline to follow through on his investment strategy. He comforted himself by thinking that it was a knee-jerk reaction by the investment community. However, he was very wrong as the decline continued not just for the next few days, but the next few months as well.

Yet, he remains steadfast in his analysis of Roxy Pacific and APAC Realty today. For instance, he has been tracking the sales of Roxy Pacific and it has done really well so far. It is sitting on huge profit margins for the projects sold in 2018 as these land plots were purchased back in 2016 and 2017 before the en-bloc furore. Likewise, some developers have responded in this tepid market by increasing the commissions for property agents to drive more sales to their projects. Coupled with the tons of liquidity generated from the en-bloc craze, Heartland Boy believes that these continue to bode well for APAC Realty. He is hoping that his investment thesis will eventually bear fruit, although it could take considerable time for stock market sentiments to turn for the better.

Conclusion of 2018 Stock Performance Review

That’s it for the review of his stock performance in 2018! It is really quite disheartening because such a poor performance inevitably sets Heartland Boy’s dream of achieving financial independence by the age of 40 back considerably. However, this is also not the time to cry over spilled milk. The lessons learnt in 2018 will be ingrained in his memory forever and be put to good use in the future.

Btw, 2019 is supposed to be a good year for dragon babies! Huat ah!