Tuesday, September 12, 2023

September Portfolio Update: A Season of Change and Strategic Shifts

As September rolls in, it brings along a whirlpool of changes in my investment horizon. The past three months have been somewhat of a still water phase with the S&P moving along sideways. However, I took this time to reassess and realign my strategies, focusing heavily on dollar-cost averaging into Tesla and the S&P 500. Before we delve into the nitty-gritty, here's a glimpse into the significant shifts in my portfolio.

Dividend Portfolio Overhaul

Earlier this year, I embarked on the journey of rebuilding a dividend portfolio, having picked some winners like the Parkway Life REIT at an acquisition price of $3.73 per share. However, I decided to undertake a significant overhaul of this portfolio recently. Now, only the Maple Tree Logistics Trust and CapitaLand China Trust (CLCT) remain, and even they are lined up to be liquidated soon.

Here are the three pivotal reasons behind this strategic shift:

1. An Urgency to Settle the Home Loan: As the SORA rates on my home loan is steadily rising, channeling the funds to pay it off became a priority, promising a guaranteed 4+% interest saving.

2. Career Shifts and Focus on Growth Stocks: The last couple of months have seen a roller-coaster in my career, nudging me towards focusing more on growth stocks to alleviate the stress that came with managing a diverse portfolio.

3. New Avenues of Passive Income: My upcoming property, ready by 2025, promises a significant rental income, overshadowing the returns from my REITs. Moreover, partially inheriting a private business from my father as a shareholder now brings another passive income stream, making the dividend earnings seem quite meager in comparison.

The proceeds from the dividend portfolio were judiciously used to max out contributions to my CPF and SRS accounts, fostering a secure financial path for the future.

Growth Portfolio and Crypto Insights

Despite the significant changes in my dividend portfolio, my growth portfolio has remained quite steady. My unwavering faith in Tesla continues to steer my investment decisions. Moreover, I've been dabbling more in the crypto space, contributing occasionally to my crypto portfolio, seizing opportunities whenever there's a dip or when some funds are left idle in my account.

Dividend+Growth Portfolio= $432k

Crypto Portfolio=16.5k

Looking Ahead

As we move forward, I foresee my updates focusing predominantly on the growth portfolio, especially with the promising trajectory that Tesla is showcasing. While the dividend portfolio has given me joy, the strategic shift seems a necessary step at this junction, aligning perfectly with my changing risk tolerance and the new passive income streams in my financial landscape.

Moreover, as I grow older, the thrill of picking the right REITs and witnessing the dividends flowing into my bank account every few months is something I still hold dear. While the decisions were tough, they were necessary, reflecting a matured approach towards achieving financial stability and growth.

Travelling and Mileage Hacks

On a lighter note, I am exhilarated to share that I will be flying to Osaka this Sunday, followed by trips to KL, Tokyo, and Hokkaido in December, all in business class, redeemed through miles! Stay tuned as I uncover some strategies to redeem business class flights for the busy bees out there. 

For more updates on my travel ventures and investment strategies, don't forget to follow my Twitter handle, @makesmewonder https://twitter.com/makesmewonder, where I will post live update whenever I buy or sell any shares, and stay tuned for my upcoming Instagram account which I will be launching soon.

Until then, stay savvy and keep investing wisely!

Thursday, July 20, 2023

Beyond Earnings: A Deep Dive into Tesla's Financial Discipline

As an ardent Tesla shareholder, I always keenly await their earnings calls. With Tesla accounting for a significant 50% of my portfolio and currently holding about 700 shares, these updates are an integral part of my investment journey. 

Tesla stands out in the crowded landscape of tech companies and startups, not merely due to its groundbreaking innovations but also its remarkable financial discipline. One often-overlooked metric that never ceases to impress me is Tesla's operating expenses, a testament to the firm's disciplined financial execution.

Despite their rapid scaling and growth, Tesla has displayed an extraordinary knack for maintaining its operating expenses. This performance reflects the financial discipline evident in the company's aggressive cost-cutting measures and steadfast execution strategies. This high degree of operating leverage has left some skeptics stunned, leading to unfounded accusations of fraud.

There was a time when Tesla made headlines for reducing its workforce. Critics viewed this as a forewarning of financial turmoil, but I saw it as a strategic step to keep expenses lean. Unlike firms that pump up their expenses during a tech bubble, Tesla's financial discipline has been a pillar of stability.

Many have dubbed the recent earnings a disappointment. However, I see it from a different perspective. What captivates me is Tesla's ability to keep their operating expenses in check even during challenging economic periods marked by high interest rates and rampant inflation. Despite operating in the capital-intensive automotive industry, Tesla's financial discipline is unwavering.

My conviction in Tesla has grown over time. I vividly remember when Tesla shares were priced at a mere $100 in December 2022. As I was delving into a book on Elon Musk in Seoul, my conviction in Tesla solidified, prompting me to invest in more shares - a decision that has proven fruitful.

Today, despite their aggressive revenue growth, Tesla’s operating expenses remain around $8 billion per year. This disciplined approach to scaling is a key reason why Tesla is a core component of my portfolio.

As my conviction continues to build, I am resolved to seize every opportunity to accumulate more Tesla shares. I eagerly anticipate witnessing more quarters of impressive performance from Tesla.

But don’t just take my word for it – take a look at the table (see below) that showcases Tesla's operating expenses for every quarter, juxtaposed with its revenue. Challenge yourself to find another capital-intensive company that can match this financial discipline.

Tesla's Operating Expenses and Revenue

In conclusion, Tesla's financial prudence and robust execution strategy, even amidst economic challenges, underscore their strength and endurance in the automotive industry. As a devoted investor, I can confidently state that I eagerly await what the future holds for Tesla. 

Join me in this exciting journey by following my blog and my Twitter handle @makesmewonder where I will continue to share my insights and analysis on Tesla and my other investments. Together, we can navigate the intriguing world of investing. 

Thursday, June 29, 2023

Investment Horizons: A Glimpse into My Portfolio’s Progress and Plans

June, traditionally a quiet month for the markets, held a different narrative this year. As a growth investor, the allure of rapidly expanding, innovative companies is hard to resist. Yet, the most valuable lesson I've learnt on this journey is the importance of patience - not to succumb to the Fear Of Missing Out (FOMO) and chase every fleeting opportunity. 

In this seemingly boisterous period, my actions remained uncharacteristically subdued. The only significant transaction I undertook was to apply Dollar-Cost Averaging (DCA) on Tesla stock and the SPY ETF, a strategy I've consistently adhered to since July 2022. 

As the years roll by, Tesla's prominence in my portfolio will likely grow, fueled by my continued investment through DCA. The reason behind this commitment is twofold: firstly, the company's business model and future prospects are ones I believe in and understand, allowing me to build stronger conviction in my investment. The vibrant community of Tesla investors and enthusiasts continually feeds my knowledge, sharing timely updates and first-hand experiences with the company's latest ventures and innovations.

Secondly, I'm firmly convinced that Tesla is on the cusp of achieving full self-driving capabilities, a feat that would significantly expand its profit margins. This could materialize either through a potential Robotaxi fleet or via Full Self Driving (FSD) subscriptions. Many critics argue against this possibility, yet I chose to believe otherwise. By next year, Tesla plans to boost its AI training capacity to 100 Exaflops, a staggering twenty-fold increase from the current 5 Exaflops. Let that sink in - 20X more computational power than its present capacity! 


Barring my dividend portfolio, which I'm in the process of rebuilding, I prefer to keep my growth portfolio concentrated, focusing on a select group of 7-8 stocks. This approach is inspired by the idea of a 20-slot punchcard, limiting me to twenty lifetime investment decisions, encouraging careful selection and due diligence. 

Growth Portfolio:

Dividend Portfolio:

In June, I added two new assets to my dividend portfolio: Parkway Life REIT and Mapletree Industrial Trust (MIT). Despite concerns about the future of data centres, as MIT's management plans to acquire more in the future, I trust in Mapletree Investment's reputation and historical performance. Before the onset of Covid-19, they consistently increased their distribution per unit every quarter.

Crypto Portfolio:

My cryptocurrency portfolio currently consists of Bitcoin and Ethereum. Anticipating a value surge in Bitcoin as we approach the next halving event and potential SEC regulation, I added to my Bitcoin holdings.

Since 2022, my net worth has yet to fully recover, having taken a substantial hit. Adding to this, I withdrew a portion of my portfolio last year to purchase a condominium, further explaining the decrease. Currently under construction, this property is projected to be completed in 2025 and will then provide me with an additional income source through rentals. 

Amid persistent inflation, I anticipate that the interest rate will take some time to decline, though it appears to have plateaued for now. Consequently, I've been utilizing my cash and CPF from employment for early property repayment. Until the interest rates significantly decrease, I won't be channeling substantial funds into my stock portfolio. This strategic move helps me manage my finances more prudently in these fluctuating economic conditions.

I also stay actively engaged on Twitter where I share updates on my buy/sell transactions. If you're interested in getting these real-time updates or wish to join our growing community of investors, feel free to follow me. My handle is @makesmewonder link here. I look forward to interacting with you and sharing our investment journeys together!