Heartland Boy 2022 Investment Performance Review

The time has come for me to perform my annual stock investment portfolio review. Outside of STI, 2022 have been a tough year for most indices. At an annual gathering with like-minded investors, majority of them commented that 2022 was a whitewash for them. It was no different for me either as I had deliberately expanded to overseas markets (Hong Kong, USA) and alternative assets (cryptocurrencies) in the last couple of years. These dragged my overall performance down severely.

By the way, I use XIRR (consisting of both realised and unrealised gains/loss) to track and measure my investment performance. My XIRR returns for Year 2022 was -11.8%, significantly below the benchmark Straits Times Index as shown in Diagram 1.

Since I have started investing in 2014, my running track record stands at 0.0% XIRR. This brings me back to square one, right back from where I made my first investment. Given such a track record, I am beginning to see this more and more as a hobby rather than a tool to enable me to achieve FIRE. Diagram 2 is a summary of all the investment transactions that I have made in 2022.

This is how to interpret the table:

• Profitable transactions are in green while non-profitable transactions are in red
• Prices with a range indicate the lowest and highest prices that I have paid/sold. Similarly, dates with a range indicate that the transactions were conducted over a period of time
• Those with last price and last date are investments that I will be carrying forward into 2023.
• Dividends or any part cash/scrip paid are not indicated in the table

At first glance, losers generally outnumber winners 2:1. Let’s dive into a deeper analysis of some of the counters that are my portfolio as we welcome Year 2023.

1. Riverstone

Riverstone is my largest exposure and has proven to be fairly resilient. Its peers in Malaysia have reported losses in 2022 but Riverstone’s financials remain healthy. This is due to its exposure to the semiconductor industry by supplying cleanroom gloves. I also like that the Board approved quarterly financial reporting which facilitated quarterly dividends to be distributed.

Management has been very conservative and slowed down expansion of its healthcare production capacity given the oversupply issue. With founder holding such a large stake and the cash dividends that he had received the past 3 years, I wont be surprised if it makes a privatisation offer in 2023!

For a detailed analysis, do read my report of Riverstone.

2.United Hampshire US REIT

If economists are forecasting a recession in 2023, grocery-anchored and necessity-based retail stores would be the primary beneficiaries. This would give the Manager stronger negotiating power during rental renewal discussions. With regards to interest rates, every 50bps will impact DPU yield by 0.9%. I expect its weighted average interest rate to be around 4% in 2023, which means estimated DPU yield would be over 10% at current price. I feel that the REIT has been unfairly beaten down as investors might have associated it with other commercial US REITs listed on the Singapore stock exchange.

My concern is the divestment of its self-storage assets. For the longest time, the Manager has been singing the prospects of self-storage business. Yet, they seemed very determined to divest the 2 assets at prices lower than initial offers. This made me feel slightly uncomfortable but I am willing to look past the fact that self-storage assets constitute a minority of their portfolio.

For a detailed analysis, do read my report of United Hamsphire US REIT.

3. Geo Energy

I am happy with the stock performance because it has distributed 10 cents of dividends in 2022. That’s like an insane 30% dividend yield. I am also confident that coal prices will stay high as supply remains tight while demand is still robust. What worries me are 2 things: 1) Chairman replacing CEO and 2) what investments the company will make to diversify from coal.

For a detailed analysis, do read the reasons why I re-invested into Geo Energy.

4. Rex International

The performance of REX International had been utterly disappointing in 2022. Despite the high oil price environment, it was plagued with production issues. With production affected, it was unable to capitalise on the high oil prices.

Going into 2023, I am undecided on REX. On one hand, I want to give the Management another chance. On the other, I am worried that a recession will lead to lower oil prices.

5. Lion-OCBC Securities Hang Seng Tech ETF

The irony was that I wrote in my 2021 review that “Chinese tech stocks have taken a serious battering”. Well, 2022 was no different as the authorities continue to extend a vice-like grip on tech companies. This proves the adage true that low can always go lower, which was the case for this tech index ETF.

Going into 2023, I am optimistic that there should be more positives than negatives – afterall the Chinese economy is finally coming out of its zero-Covid policy. My personal outlook is that the index might bottom out in 2Q23.

6. SEA Limited

On an absolute basis, SEA Limited has the honour of wrecking up the largest amount of losses in my portfolio. In the past, I hold the management team in high regard for their execution and work ethic. Now I am not so sure. In addition, the outlook for its gaming division is getting weaker by the day. This might be one of the first few stocks that I will cull from my portfolio soon.

7. Cryptocurrencies

I am the first to admit that I am no expert in cryptocurrencies as evidenced from my complete loss in Luna. That was the first time in my 9 years of investing that I suffered a complete wipe-out in my investment. Regardless, I still believe that blockchain and cryptocurrencies have a place in our future. Therefore, I am placing small “bets” on blue chips such as Bitcoin and Ethereum. My exposure is small at 5% of the portfolio which is minor. Even then, I play it safe by moving all of my coins onto a cold wallet.

Conclusion of Investment Performance Review 2022

Going into my 10^th year of investing, this will definitely be the last year that I put my investment skills to the test. Over the long term, I have already proven to myself that I am nowhere near the fund manager superstar that I thought I could be when I first started investing. Therefore, I am seriously considering allocating the bulk of my portfolio into indexes and robo-advisors instead so that they become more passive. This way, I save both time and “opportunity cost” in performing these hardcore analyses on individual stocks. As and when an “interesting” stock comes up, I may run it through my checklist but otherwise I will not actively hunt for undervalued stocks like what I have done in the past.

For those looking to get started on their investment journeys, I would highly recommend low-cost discount online brokerage platforms such as WeBull, Tiger Brokers or Moomoo. As we commence our investment journeys in 2023, I would like to wish all readers “HUAT ah!”

 

*Note that this article contains referral links that goes to maintain the sustainability of this blog.

Trust Bank Account (by NTUC and Standard Chartered Bank)

Sign up for a Trust Bank Account and get:

1. $35 NTUC voucher
2. Freebies
3. Up to 2.5% interest on your first $75,000 (Fully SDIC insured)

I have been using this for months and my full review is here and do sign up with my Promo Code <S7CEKBDE> to ensure you get the vouchers!