Gone crazy WFH and the SRS Portfolio May 2019

It has been two months since the circuit measures started. Hope everyone of you still staying safe and sane (mentally).

The benefit about being locked up is that you can "think" more and here are some of my observations:

• You definitely need more breathing space - One thing about the circuit breaker is you will likely get into way and irritate one another more. So having more "air space" while WFH is extremely important so that you can have some personal space and privacy to do work. Some of you will probably be looking to move out or hunt for a bigger property if you can afford it after the circuit breaker to keep sanity at home intact if this is going to be the norm  

•  You actually work more hours every day - I am not sure if you felt the same way as me ? While I saved on commuting time, I realised that i worked more hours from home. I am constantly on calls and meetings throughout the day (since people expect you to be working and you can't actual go out). My typical day starts at 9am and ends at 7pm with a 60-90min lunch break and i continue to clear emails after dinner. The only "good thing" was that my family members do realise how hard I work to bring back the dough

• You don't need a lot to retire IF you cook - To feed your family a nutritional meal with a balanced diet (say 1 simple dish for lunch and 3 simple dishes for dinner), you don't really need to spend a lot of money. Since i was working a lot more, hours from home i started to dream about "not working" anymore. I was calculating how much the dishes for each meal cost and my conclusion is that it probably cost between $1,000-1,500 for a family of six to eight each month. Of course it is a different story if you want to have lobster or abalone (big fish big meat) to go with your instant noodles every time.  (Stock to consider: Sheng Shiong)

• You don't need Ferragamo shoes when you WFH - now that working from home is likely to continue for a while, you also realised that you don't need that fanciful handbag or shoes or suit. In fact, you may not even need a car. Lol. What you really need are comfortable and decent looking clothes for the camera and a reliable and fast broadband (stock to consider: Netlink Trust) and yes, you do need a big fan over your head if you want to save the earth by not turning on the air-con.

• Your wife wants to go on strike - I think all the home makers (domestic helpers included) couldn't wait for the circuit breaker to end and to kick me and the kids out of the house. She wants her "me time" back and stop cooking the whole day, so that links us back to the first point at the front. They are probably the hardest working people in the family during this circuit breaker! 

Enough of my observations. Here is the SRS portfolio update as of 31 May 2020.

Dividends - The portfolio received distributions income of $1,024.80 and capital distribution of $431.50 from the tender offer to swop Fraser Commercial Trust for Fraser L&I Trust. The portfolio also received $528 from the quarterly distribution from Suntec REIT. Overall not a bad month as i have underwritten a 75% cut in distribution income when i bought the Suntec position but instead the cut was about 25%. 

Portfolio news -  CapitacCommercial Trust announced a Q1 results of DPU 1.65 cents and that is 25% lower that the same period last year. It has also announced that the EGM on the proposed merger with Capitamall Trust will not be taking place in May and will provide further update in due course with the long stop date at 30 Sep 2020. It remained to be seen if Covid-19 will scupper the proposed merger.

Lendlease also announced a set of nice Q3 results that beat its IPO forecasts as it maintained its 100% payout ratio. Seems like my 75% haircut assumption is overly aggressive for now. The portfolio of REITs should continue to do well given the low yield environment that is expected to continue for the foreseeable future. 

DBS issued an in-depth retail REIT report which you can assess it here. I think Starhill is underperforming as most of its malls are catered for tourists. It should take a while more to recover.

Since my last update one month ago, the portfolio value grew from $299k to $313k. I wanted to deploy the $63k cash into 1 or 2 more positions (was considering AIMPS at $1.18 at one time) but inaction proved to be costly as the expected second wave of correction - sell in May and go away syndrome - never came!  With the ease of circuit breaker, hopefully things will gradually be getting back to normal.

I am actually looking forward to June, where i will receive a big chunk of interest income from my bond portfolio. 

Till then, stay safe and happy WFH!