2018 Year-End Notes

I have just concluded my investment return in 2018.
The return for the year is -21.2% while IDX returns -2.5%.

I’d remind the readers not to read too much into 1-year result and rather look at longer term horizon, at least 5-10 years cycle.

Points to note this year:

  • My result looks bad on surface but at closer look, the return reverted last year unnecessary CASS last minute Mr Market’s dressing.
  • CASS businesses has worsen (along with bad management decisions)
    Even so, it’s still trading above my cost and hence the easy decision to reallocate the valuable capital to other companies (TOTL & RDTX).
  • After scooped up TOTL during the sales season, it is currently about 50% of my total portfolio.
  • Along with 25% in CASS and 20% in RDTX, I am a 3-horses man as for now.
  • Other than that, I am holding PJAA, BNLI, RANC, TSPC & LPCK. 
    All of which are less than 2%.
  • About half of my unrealised return this year came from CASS and another half from TOTL.
  • Bitcoin bubble has burst, to conclude the last year note.
  • IHSG has fallen along with worldwide markets selldown this year, but it is still far too bubbly and I do not see much values in it.
  • I have shifted a big portion of my capital to other markets such as US, Singapore & Hongkong, where opportunity are abounds.
  • This down year is a strange one, I can’t remember a year in which my portfolio down by over 10% and yet I am not excited about the overall market and times ahead in Indonesia.
  • I guess it has to do with my pessimism with the direction Indonesia is heading, which is drum drum drum, NO DIRECTION.
  • Indonesia has continued to drag along with 5 steps forward, 4.5 steps back.
    If I am to be more frank, I’d say 5 steps forward, 7 steps back.
  • BUMN still dominating public infrastructure projects while reporting high margins and doubtful revenue recognition, meanwhile rewarding managements who arguably not providing much value-add.
  • Banks still a big drag and blood sucking with high margin and not much value add.
  • Indonesia potential is yet again being pushed back and this time, times may finally running out, I don’t see a potential leapfrog ahead.
  • Lack of leadership and clear direction are a huge problem along with rising intolerance which I see no way out as for now.

Notes and action plans for next year:

  • I am comfortable with my current holding but not looking to add more unless they do well by getting cheaper (by a lot).
  • Other markets are far cheaper with far more integrity management and business model.
  • Hence my plan for years ahead is to maintain current capital allocation in Indo and potentially may reallocate to other markets where values are aplenty.

At the last, I’d let Warren has the last words:
“the less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs”.

Fall.Cushion_

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