Reflections in 2018 with objectives in 2019

It’s the time of the year again – reflections in 2018 and new targets in 2019.  

Just like a company performance review, it’s good to take a pit stop.  I hope my post below serves as an inspiration to many or perhaps to reflect back on where you are and what you plan to do in 2019. Every individual is different - this makes us very special in our own way.  

For me, in investment - it’s always good to “be open but pragmatic, have a stronger conviction and guts to proceed but make sure it’s something you truly understand."

In case you will like to read my end year post for 2017 – it’s written here. 

Things which I did in 2018

To have one or two “killer stocks” in my portfolio

I still hold on to Keppel Corporation, a local conglomerate that I believe will reap in future earnings potential from a multi-pronged strategy.  The new growth drivers are properties (especially in Vietnam) and urban solutions.  Keppel Urban Solution is a new business unit setup to focus on smart cities and sustainable precincts in Asia Pacific region. This will be the a “killer” stock for me.

I have also added on Singapore Post, an integrated logistics and e-commerce player given the beaten down share price. They have emerged from a restructured Board, new CEO and management rolling out “Leap 23 Transformation Strategy”, on the turnaround pathway from TradeGlobal losses and the development of an end-to-end logistics ecosystem (including software offerings such as Edge) instead of just offering one-off services from a specific business unit.  

Singapore Post covers point-to-point, from warehousing to fulfillment across the logistics value chain.  They have the internal capabilities and resources to benefit from economies of scale with a lower cost base, the ability to optimize margin once the business gets stabilized. Logistics can be scalable with the right balance of an integrated model. This takes time, probably 5 years to review and assess.  Of course, there are risks and downsides; I’ll leave this story for another time.  

A wider investment portfolio 

At this time of writing, after rounds of discussion with the co-founders and my basic due diligence, I have just signed off another investment (sale and leaseback with 10% yield for 5 years) into Big Tiny, a local start up that builds small houses on wheels.  The houses are deployed in Sydney and Melbourne, rented out to tourists for short-term stays. They will launch their presence in New Zealand soon. They are marketed at sites such as Airbnb, booking.com, Stayz etc. to attract travellers whom are seeking new experiences with Mother Nature.

Across the “non-existent” category of tiny houses (imagine co-working spaces 10 years back), I will be monitoring the growth and demand of the tiny market worldwide – America is a good proxy. 

This gives me 2 private firms to keep me busy in 2019 and beyond. The other is Nuren Group, Malaysia’s largest e-commerce player in wedding and motherhood products.

The hits and misses in 2018

Well, not everything is entirely smooth sailing. As a Hunter whom always looked out for potential businesses, I am always quietly optimistic about getting good deals in Asia.

I like buying reasonable small, niched businesses (i.e. can be either traditional or tech-related but within my core competencies) either to turn them into revenue churning machines (and to exit my stake), sell them to potential buyers or roll up my sleeves to make things happen for the business.

I am sure you can learn how to be a successful Deal-Maker here.

My geographical focus extends out from Singapore to the rest of the world, mainly on Indonesia, Malaysia and Vietnam.  

Examples of near misses (and I have walked away from one of them as shown below):

- *A F&B kiosk selling unique cheesecake flavours.  Strong customer base with quick volume sales but there were no concessions after negotiation

- Syndicate deal in an AI-drive tech startup within the research industry.  Founder took a U-turn in his valuation after signing off the non-binding term sheet.  That to me was completely not ethical.  I decided to walk away, including the rest of the other Angel Investors 

- A thematic café with a new business model that can dramatically increase sales

- An overseas online e-commerce player that has the ability to increase sales through on premises and to corporate.  The deal is agreed but didn’t pass my due diligence test 

*F&B are typically low margin businesses with huge rentals, labour issues and escalating overheads.  There must be compelling reasons.  Henceforth, the above two are exceptional cases.

 

What’s my end objective?

The overarching goal is the “Silver Milestone” project, something which I set up 2 years back for my future retirement.  It’s an actionable plan with a 10 years timeline to “track-action-review-action-track” approach.  I do have a yearly dividend target to hit, with a higher-up quota every year for the next 10 years.  My expected yield on an annualized basis is about 5% to 6%.  But to do this, I need to have a huge warchest to buy assets with stable recurring cash flow.  

So, I have already identified my 4 pillars of income.  A larger possibility come from deals that must be “investment ready” and have the chance for a stepped-up trade sale, either from my expertise to turn the fledgling business around or to connect other businesses.  Even if it’s not sold, I do foresee the journey to be fulfilling, perhaps my day job during retirement years! 

My final stop shall be a time where the incoming cash flow supersedes my monthly expenses. By then, I shall focus more on the things I like to do.  Career Coaching is one and the other is business advisory and mentorship to startups and small businesses within my specialty  I do work closely with founders at a strategic level to value add, thus bringing their companies to next stage of growth (in revenue terms). 

Now…moving on to 2019

Given the current market weaknesses, on the stock market, I’ll be looking to add on more units for First Reit, Fraser Logistics & Industrial and NetLink Business Trust.  I will also add on 2 more new dividend yielding stocks and 2 more reits.

So, here are 8 things I hope to achieve next year:

1.       Add on minimally one more startup/small business in my pipeline

2.       Increase my existing positions in my current portfolio of shares and reits

3.       Add two more listed, growth firms (Europe, America, Singapore), giving me a total of 5

4.       Establish my 4^th pillar of revenue

5.       Ramp up my coaching business – career and sales

6.       Help other FMCG startups increase their sales channels across Asia Pacific

7.       Enhance my knowledge - Havard Business/somewhere similar... something to consider

8.       Continue my journey of learning Spanish - Latin America is an interesting region 

       Till then, I wish everyone happy holidays and a bright start to a new 2019 soon!