SAT PORTFOLIO (PHL)

[drbubb]

SAT PORTFOLIO (PHL). . started 9/30/23

TARGET:     I have two small MODEL portfolios here.  

My intention is to BEAT PSEI by an average of 1% a month over longer periods - not every month, obviously.  Since I targeted this, with my real portfolio many months ago, I have managed to Beat that target.  Maybe these two portfolios will do it also.

MODEL Portfolio
BTC.  1.57m 0.1333: 209,281  200.0k 1.50m
MEG.  2.03. 99,502: 201,989  200.0k 2.01
APX.   2.28. 86,957: 198,262  200.0k 2.30
RCR.   4.72. 42,373: 200,000  200.0k 4.72
====              ====: 809,532 800.0k
Cash    ==== ====   200.0K  200.0k  ===:
Model  ==== ====  1009.5K 1000.k +0.95%

WATCH Portfolio
RCI      0.53  196.08k 103,022  100.0k  0.51
ROCK  1.43   71,429: 102,143   100.0k  1.40
VLL.     1.72  59,880: 102,994  100.0k. 1.67
====.              ====. 308.2K. 300.0k
Cash     ==== ====  700.0K  700.0k  ===:
Watch  ==== ==== 1008.2K  1000.k +0.82%
Model  ==== ==== 1004.8K  1000.k +0.48%

Combined, M+W:  2013.0.k  2000.k +0.65%
Vs. PSEI.                     6,280.   6,321 : -0.65%
                              Outperformance. :  1.30%

MY GOAL is to beat the Index by 1% per month. 

The table above is the simplest way to report what is happening. 

Maybe at each MONTH END

===

TRADE SELECTION: A very brief SUMMARY of my technique:
I aim to utilize ALL of the following in my trade selections:
+ I prefer LOW PER stocks, like <5x
+ I prefer HIGH DIV Yield stocks, 4% and up
+ I prefer to BUY BELOW BOOK Value, 

+ I want to see Leverage falling, as Total Borrowing declines and Shareholder equity is rising

+ I want a chart which shows signs of a bottoming process being underway, rather than a “falling knife”

[drbubb]

ADDITIONS / Changes :

Monday, Oct.10th:  Added FILRT to Watch List at 2.98.  (100,000 /2.98= 33,557 sh )

Additions to WATCH : MAXS , wed-thu, 10.12 at 3.99      (100,000 /3.99= 25,062 sh )

and today/Friday, 10.13 I got:  LTG at 8.99.                       (100.000 /8.99=. 11,123 sh )

+ x

+ y

[drbubb]

Stock Last. shares  MktVal. :   Orig.:  Cost:  

WATCH Portfolio, 10.11.23
FILRT  3.00  33,557: 100,671  100.0k  2.98
RCI      0.55  196.08k 107,844  100.0k  0.51
ROCK  1.43   71,429: 102,143  100.0k  1.40
VLL.     1.73  59,880: 103,592  100.0k  1.67
====.              ====. 414.2K. 400.0k
Cash     ==== ====  600.0K  600.0k  ===:
Watch  ==== ==== 1014.2K  1000.k +1.42%
Model  ==== ==== 1005.?K  1000.k +0.50%E

[drbubb]

( I will show you why, I am losing interest in our property discussions.   Probably some will not believe it, will not understand it.  Or may not care.  But to be honest, I signaled these trades as I was doing them, and posted them on a New chat.  It is REAL, folks.)

MODEL Portfolio, 10.13.23
BTC.  1.52m 0.1333: 202,616  200.0k 1.50m
MEG.  2.06. 99,502: 204,974  200.0k 2.01
APX.   2.55. 86,957: 221,740  200.0k 2.30
RCR.   4.89. 42,373: 207,204 200.0k 4.72
====              ====: 836,534 800.0k
Cash    ==== ====   200.0K  200.0k  ===:
Model  ==== ====  1036.5K 1000.k +3.65%

WATCH Portfolio, 10.13.23
FILRT  3.00  33,557: 100,671  100.0k  2.98
LTG     9.00   11,123:  100,107  100.0k  8.99
MAXS  4.30  25,062: 107,767  100.0k  3.99
RCI      0.53  196.08k 103,922  100.0k 0.51
ROCK  1.42   71,429: 101,429  100.0k  1.40
VLL.     1.73  59,880: 103,592  100.0k  1.67
====.              ====. 617.5K. 600.0k
Cash*   ==== ====  400.0K  400.0k  ===:
Watch  ==== ==== 1017.5K  1000.k  +1.75%
Model  ==== ==== 1036.5K  1000.k +3.65%

Combined, M+W:  2054.0k  2000.k +2.70%
Vs. PSEI.                     6,266.   6,321 : -0.87%
                            Outperformance. : +3.57%

MY GOAL is to beat the Index by 1% per month.

*Note;
VLL: 0.062 ex-div 10.13.23= 3,713 = 3,341

MY GOAL is to beat the Index by 1% per month over a period of many months.
After just two weeks, these two portfolios are CRUSHING the target ! Beating the index by 3.5%!

HAHA.  Who needs Bricks & Mortar, if you can do it with stocks?  

(Please do NOT expect this sort of outperformance  to continue. 

The LAW of AVERAGES will catch up... eventually.)

[drbubb]

I HAVE SLOWLY PERFECTED Some trading techniques, which are helping me to outperform the market.  And I am considering to offer these techniques For FREE in a Seminar, that I might run from time to time, over a coffee.  

(Please CLICK LIKE on this post if you might be interested.)

LIKES: +1/4-sat, +1/7-reit, +3/19-option

+ Richard; Ian M.; Jonathan R, Reinhart S., Kenneth Sy

====

MY GOAL is to GROW the value of my portfolio faster than the PSEI, by 1% a month.  That means after 12 months, I want to outperform by 12%.  This is not easy, but it is a fine, sensible, and realizable goal.  And more logical than a 15% a year goal, which may be easy in some years; Tough in others.

In the Real world, my actual Phl-Portfolio, just hit a new high vs. PSEI.  So I am happy on a day, when my portfolio is down -0.13%, and PSEI is down -0.91%.   That makes me smile, and keeps my focus in the right place: Relative Valuation!   Given time, the PSEI will grow, in line with Inflation, perhaps.

[drbubb]

Why Builder stocks, Why Now?

Stock Prices were dragged down by falling bonds

EXPECTED RETURNS in Property

Investment: “Expected” : Notes
Buy-Build-Sell: 30%+: what Risks?
Builder Stocks: 25%+: Per PER=4.0*
Stock Trades  : 13%+: +PSEI gains
Land (lots?).   : 10% ?:  Long term?
REITS, phil.     :  8% +: +Cap.Gains
2nd-H.Bargain:  6% +: Mgmt. Issues
New Condos.  :  3% +: +Cap.Gains

( This was a jumping-off point for the discussion
That I led on Sat. morning, Oct. 20th.)

Near Market peak is 2019, the PER was 6-9x

% Book Value was 60-66%, vs. 26% now.

UPDATE: Low PERs suggest room for Rises in 7 Builder stocks

PRICE TARGETS, based on Peak Comparisons
============
+ % Book : 25.6% > 60-66%, = +134 -158%
+ PE Ratio: 3.96x > 5.8-9.1x. = + 46 - 130% (+earnings rise)
+ Div.Yield: 4.72%> 3.6-3.2%= + 31 -  48% (+divs. rise )

[drbubb]

MODEL Portfolio, 10.20.23
BTC.  1.66m .0667:  110,722  100.0k 1.50m
MEG.  2.01. 99,502: 200,000  200.0k 2.01
APX.   2.58. 86,957: 224,349 200.0k 2.30
RCR.   4.76. 42,373: 201,695 200.0k 4.72
====              ====: 736,766 700.0k
Cash    ==== ====   300.0K  300.0k  ===:
Profits.      +10.889:    10.9K.  <gain  
Model  ==== ====  1047.7K 1000.k +4.77%

WATCH Portfolio, 10.20.23
FILRT  2.99  33,557: 100,335  100.0k  2.98
LTG     8.83   11,123:   98,216  100.0k  8.99
MAXS  4.30  25,062: 107,767  100.0k  3.99
RCI      .495  196.08k  97,060  100.0k  0.51
ROCK  1.37   71,429:   97,858  100.0k  1.40
VLL.     1.65  59,880:  98,802  100.0k  1.67
Mreit  12.20     8,210: 100,162 100.0k 12.18
====.              ====. 700.2K  700.0k
Cash*   ==== ====  300.0K  300.0k  ===:
Watch  ==== ==== 1000.2K  1000.k +0.02%

Both: Model  ====  1047.7K  1000.k +4.77%
 Combined, M+W:  2047.9k  2000.k +2.40%
Vs. PSEI.                     6,143.   6,321 : -2.82%
                            Outperformance : +5.22%
Profits:
+sold half BTC at Php 166.5m, +10,889 (M)

MY GOAL is to beat the Index by 1% per month.

[drbubb]

TECHNIQUE SUMMARY

TRADE SELECTION: A very brief SUMMARY of my technique:
I aim to utilize ALL of the following in my trade selections:
+ I prefer LOW PER stocks, like <5x
+ I prefer HIGH DIV Yield stocks, 4% and up
+ I prefer to BUY BELOW BOOK Value
+ I want to see Leverage falling, as Total Borrowing declines and Shareholder equity is rising
+ I want a chart which shows signs of a bottoming process being underway, rather than a “falling knife”

RELATIVE VALUE Focus:
I focus on raising my account's value RELATIVE to the Index. (Aim: >1% / mo. outperformance)

I don't necessarily stay invested ALL of the time, but I don't panic if NAV is falling, so long as NAV is rising vs. Index

I look for Pairs Trading type switches, where I will sell the "overvalued" side & replace with the "cheat" side.

( MORE TO COME Later... )

 

[drbubb]

UPDATE: Low PERs suggest room for big DIV. rises in these Builder stocks

PRICE TARGETS, based on Peak Comparisons
============
+ % Book : 25.6% > 60-66%, = +134 -158%
+ PE Ratio: 3.96x > 5.8-9.1x. = + 46 - 130% (+earnings rise)
+ Div.Yield: 4.72%> 3.6-3.2%= + 31 -  48% (+divs. rise )

MEG-etc.:2.02-SHNG:3.61:-P1.59, 56.0% CPG 0.34=16.8% MEG

ROCK-etc: 1.50,-VLL: 1.60: (P0.10), 93.8% FLI 0.65=40.6% VLL

Stock : Last: Bk.V.: %BV: PER: E.Yld : D.Yld : Div%: LastD: ex-Div
MEG. : 2.01 : 6.64: 30.3% 4.06: 24.6% 3.28% 13.3%: .0660: 10.26
SHNG: 3.58: 8.43: 42.5% 3.77: 26.5% 8.08% 30.5%: .1344 : 09.07
CPG. :  .315 : 1.85: 17.0%: 4.75:  21.1%  3.84%: 18.2%: .0061: 09.28
ROCK:  1.37 : 4.16: 32.9% 3.28: 30.5% 5.49%: 18.0%: .0752: 08.17
VLL.  :  1.65 : 9.07: 18.2%: 2.70: 37.0% 3.76%: 10.2%:  .0620: 10.16
FLI.   :  .610 : 3.69: 12.1%: 4.63: 20.8% 5.90%: 28.3%. .0360: 05.09
ALCO: .445 : 1.90 : 26.1%: 4.56: 21.6% 2.70%: 12.5%. .0120:  07.12
==  Average of 7 : 25.6% 3.96=25.3% 4.72%: 18.7% =====
==  Old.Ave. of 7 : 27.0%  4.20=23.8%  4.19%: 17.6%  =====
Compare Big 3:
ALI.   : 28.65 17.30 166.% 19.44 5.14% 0.99%  19.3%.   ?
SMPH 30.70 12.58 242% 25.00 4.00% 0.77%  19.3%.   ?
DMCI: 10.26   7.79: 132.%  5.11 : 19.6% 14.0%.  71.4%.   ?
==  Average of 3 : 180.% 16.5 =9.58% 5.25%: 54.8% =====

12/’19 Peak comparison
MEG. :  4.01 : 5.54: 72.4% 7.44: 13.4% 1.75%:  13.0%: .0700: 2019
SHNG: 3.20:  7.35: 43.5% 4.99: 20.0% 5.63%  28.1%: 0.180: 2019
ROCK:  2.04: 3.46: 59.0% 4.22: 23.7% 4.07%: 17.2%: 0.083: 2019
CPG. :  0.55 : 1.51 : 36.4% 4.98: 20.1% 2.16%: 10.8%: .0119 : 2019
VLL.  :  7.73 : 7.69 : 101.%  8.71: 11.5%. 3.36%: 29.2%: 0.26 : 2019
FLI.   :  1.50 : 2.97 : 50.5% 5.79: 17.3%  4.13%: 23.8%: .0619 2019
ALCO: 0.81 : 1.35 :  60.0% 4.26: 3.77% 1.23%: 0.74%: .0100 2019
==  Average of 7 :  60.4% 5.77=17.3% 3.19%  18,3% ====< 2019
==  Average of 7 : 25.6% 3.96=25.3% 4.72% 18.7% ====< 10.23

12/’18 Peak comparison
MEG. :  4.75 : 5.08: 93.5% 10.15 9.85% 1.26%: 12.8%: .0600: 2018
SHNG:  3.12:  6.88: 45.3% 4.93: 20.3% 6.41%: 31.7%: 0.200: 2018
ROCK:  2.01:  3.03: 66.3% 4.78: 20.9% 3.48%: 16.7%: 0.070: 2018
CPG. :  0.44:  1.41 : 31.2% 5.08:  19.7% 4.55%: 23.5%: .0200 2018
VLL.  :  5.41:  7.02 : 77.1%  6.76:  11.5%. 4.25%: 28.8%: 0.230 2018
FLI.   :  1.41 : 2.76 : 51.1 %  5.81: 17.2%.  4.26%: 24.7%: .0600 2018
ALCO: 0.96 : 0.99: 97.0%. 26.5: 3.77%. 1.04% : 27.6%:  .0100 2018
==  Average of 7:  65.9% 9.14=10.9%  3.61%:  23.7% ====< 2018
==  Average of 7 : 25.6% 3.96=25.3% 4.72% 18.7% ====< 10.23

[drbubb]

+ The Return on Builder stocks is 25%.  This is based on a very simple metric, PE Ratios,  This the average of a portfolio of Seven selected Property stocks that I will be discussing in a breakout group.  IMHO, this area of investment has been mostly neglected in our Saturday meetings, and I want to address that neglect, by having a small group with a stronger focus on stocks.  we will probably meet in a different location

+ It is interesting to see now the that currently reported PER ratio of that Group of 7 stocks is:  3.96x which means an Earnings Yield of 25.3%.  The average Dividend Yield of the same group is 4.72%. That is below the average REIT yield of about 8%.  I now think there is potential for strong rises in dividends, since Earnings are rising post-Covid and the average payout is only 19% of Earnnings.  This group also trades at only 26% of Book value.  And book value is growing thanks to the low payout ratio.

+ Here are my estimates of expected returns over the next 2-3 years, based on some quant measures:  
PRICE TARGETS, based on Peak Comparisons
============
+ % Book : 25.6% > 60-66%, = +134 -158%
+ PE Ratio: 3.96x > 5.8-9.1x. = +46 - 130% (+earnings rise)
+ Div.Yield: 4.72%> 3.6-3.2%= +31 -  48% (+divs. rise )

+ My opinion overall is AVERAGE of these stocks could rise 50-100% over the next 2-3 years, as the US TBond market stabilises and undervalued builder shares return to more normal Discounts to Book Value, PE Ratios, and historical dividend yields.  RISES will be accelerated if they raise dividends faster than Earnings rise

[drbubb]

LIST OF SEVEN, Comments

That 25% RETURN on Builder stocks is most of the sector.  People keep asking me for my List of 7 Builders - Basically, the Top 10 but without:  ALI,  SMPH. DMCI.  Average PE Ratio is now 4.0, or less

Stock : Last: Bk.V.: %BV: PER: E.Yld : D.Yld : Div%: LastD ex-Dv
MEG. : 2.01 : 6.64: 30.3% 4.06: 24.6% 3.28% 13.3%: .0660: 10.26
SHNG: 3.58: 8.43: 42.5% 3.77: 26.5% 8.08% 30.5%: .1344: 09.07
+5 more
==  Average of 7 : 25.6% 3.96=25.3% 4.72%  18.7%  Oct'23
ALI.   : 28.65 17.30 166.% 19.44 5.14%  0.99%  19.3%.   ?
SMPH 30.70 12.58 242% 25.00 4.00% 0.77%  19.3%.   ?
DMCI: 10.26   7.79: 132.%  5.11 : 19.6%  14.0%  71.4%.   ?
==  Aver.  Big  3 : 180.% 16.52=9.58% 5.25% 54.8%  Oct'23

BTW, the Builder Stocks were not always PER-4.0, and 25% Earnings Yield. In about 2019, they were PER-9.0 and 11% Earnings yield.  These stocks got dragged down by falling Bonds.  Meantime, as their share prices dropped, Developers kept pushing up the prices of their new properties.  Replacement costs went up, and they spent more on marketing, because they were harder to sell,   And once sold, might have to be sold yet again (if buyers stopped paying installments.)

[drbubb]

PSEI keeps falling.  Is Just below 6,100.  PSEI.vs.TLT. etc

TODAY, as PSEI falls by -0.74% to 6,097
My portfolio is off (by only) -0.32%.
So it made a New High as % of PSEI...

[drbubb]

KROMA VIRTUAL 1BR Portfolio

- Example: Replicating a 1BR with a P 9M REIT Portfolio

Original, 11.07.22, Monthly Inc.: P 55,100

Mon.: Areit: Mreit : RCR  :  Filrt : Average:  Total:  TYX  :
Cost: P2.25 P2.25: P2.25  P2.25: ===== : P9.00 million
Nv22 31.50: 12.16: P5.06: P5.62: = 7.25%: 94.22, 4.25%
shsK: 71.50: 185.0: 445.0: 400.0: ===== :
Value P2.25 P2.25: P2.25  P2.25: ===== : P9.00 million
>dv. : 6.13%:8.06%: 7.63%: 7.39%= 7.34% -4.25%= 3.09%
(Div.) P1.93: P0.98: 0.386: 0.425: ===== :
Divs : 138.0: 181.3:  171.8:  170.0:  ===== : P661K =Divs. /mo= P55.1k
====

Updated, 10.23.23,  Monthly Inc.: P 52,300

Mon.: Areit: Mreit : RCR  :  Filrt : Average:  Total:  TYX  :
Cost: P2.25 P2.25: P2.25  P2.25: ===== : P9.00 million
Nv22 33.20: 12.20: P4.72: P3.00: = 7.25%: 84.24, 4.99%
shsK: 71.50: 185.0: 445.0: 400.0: ===== : 10.23.23
Value P2.37 P2.26: P2.10  P1.20: ===== : P7.93M, -11.9%
>dv. : 6.39%:8.03% 8.28%:10.0%= 7.90% -4.99%= 2.91%
(Div.) P2.12: P0.98: 0.391: 0.300: ===== :
Divs : 151.6: 181.3:  174.0:  120.0:  ===== : P627K =Divs. /mo= P52.3k
====

VIRTUAL CONDO trade!
Replicating KROMA 1BR, with a 9M REIT portfolio.   

PAPER TRADE:  Tested over 1 year...
+ I identified a Balanced portfolio of 4 REIT stocks.
+ Included; AREIT, MREIT, RCR, and FILRT.
+ NOV’22 Portfolio cost 9m, Yield 7.34%
+ That is a monthly Aver. Of 55,100 divs./Rent
( Almost a year later, here’s what we have):
+ OCT’23 Portfolio value 7.93M, Yield 7.91%
+ That is a monthly Aver. Of 52,300 Divs/Rent
= Return was -12%, and Divs are down -5.1%
= If you “rebalance”, Div. Yield is up to 8.18%

ACTUAL CONDO:
+ A year ago was about P13-14M Ask
+ Current value, maybe P14-15M Ask
+ Rental value might be 55k > 60K now
( But occupancy rate is only 60%, weak?)
= So Bids might be 2-3M less than ASK

COMPARISON comments.
Drop in Virtual Condo; bad performer, FILRT
Which lost over P1M, and div, dropped -29%

Had the Virtual Portfolio, been only 3 stocks:
Value would have been down just 3k, -0.03%;
Despite benchmark TLT bonds being 11% down:
Divs rose= 54,500/mo ave. to 56,600, +3.9%

Mon.: Areit: Mreit : RCR: Average:  Total:  TYX  :
Cost: P3.00 P3.00: P3.00: : ==== : P9.00 million
Nv22 31.50: 12.16:  P5.06:  7.27% : 94.22, 4.25%
shsK: 95.24: 246.7: 592.9:  ===== : 10.23.23
Oc23 33.20: 12.20: P4.72:  7.57%:  84.24, 4.99%
Value P3.16: P3.01: P2.80  ===== : P8.97 million
>dv. : 6.39%:8.03% 8.28%= 7.57% -4.99%= 2.58%
(Div.) P2.12: P0.98: 0.391: ===== :
Divs : 201.9: 241.8: 231.8:  ===== : P676K =Divs.
           /mo= P56.3k

>dv. : 6.13%:8.06%: 7.63%= 7.27% -4.25%= 3.09% P654k. 54.5k
(Div.) P1.93: P0.98: 0.386: ===== :
Divs : 183.8: 241.8: 228.9:  ===== : P655K =Divs.
           /mo= P54.5k

ADVANTAGES of Virtual Condo, over Real one
+ You can buy partial size
+ Transaction costs, times, far lower
+ Div. Yield exceeds Rental Yield (8% vs 5%?)
+ Fewer management headaches
+ Great way to “park” Money awaiting bargain

Disadvantges:
+ You cannot LIVE in a Virtual Condo,
( So Buy Virtual, and RENT using Div income!)
+“Poor” stocks can show Major underperformance

[drbubb]

MODEL Portfolio, 10.27.23
APX.    2.49. 86,957: 216,523 200.0k 2.30
MEG.   1.96. 99,502: 195,020 200.0k  2.01
RCR.   4.73. 42,373: 200,424 200.0k 4.72
====              ====:  611,967 600.0k
Cash    ==== ====   400.0K  400.0k  ===:
Profits.      +40,954:    40.9K.  <gain  
Model  ==== ====  1052.9K 1000.k +5.29%

WATCH Portfolio, 10.27.23
APX.    2.49  40,816: 101,632  100.0k  2.45
BEL.     1.15   86,957: 100,000  100.0k   1.15
FILRT  3.00  33,557: 100,671  100.0k  2.98
LTG     8.50   11,123:   94,546  100.0k  8.99
MAXS  4.05  25,062: 101,501  100.0k  3.99
RCI      .500  196.08k  99,040  100.0k  0.51
ROCK  1.34   71,429:   95,715  100.0k  1.40
VLL.     1.63  59,880:   97,604  100.0k  1.67
Mreit  12.16     8,210:  99,834  100.0k 12.18
====.              ====. 890.5K  900.0k
Cash*   ==== ====   990.5K   100.0k  ===:
Watch  ==== ====   990.5K  1000.k -0.95%

+ Model  =======  1,052.9  1000.k  +5.29%
  Combined, M+W:  2043.4k  2000.k +2.17%
Vs. PSEI.                     5,962.  6,321 :  -5.68%
                            Outperformance : +7.85%
*Profits:
+sold half BTC at Php 166.5m, +10,889 (M)
+sold half BTC at Php 195.0m, +30,065 (M)

MY GOAL is to beat the Index by 1% per month.

After less than one month, the portfolio is way ahead

[drbubb]

( I have been making some big macro decisions in my PHL.Stock Portfolio:  

Trading out of BTC into Gold, Moving to fully invested in a market with Rising rates, etc.  I hope people are paying attention... and may learn from a sometimes-contrarian approach. )

Gold in BTC has retraced about 50%.  Time to be long Gold rather than BTC again?

[drbubb]

VIRTUAL CONDO Bulletpoints

( A stock investment plan with some real property references built in. Dividends are to replicate the RENTAL income of a Condo. Not necessarily replicate the precise Market Value of the Referenced condo.)

+ I have a new concept. The Virtual Condo Portfolio.

+ I want to show you. A way to start in property with less money & higher returns.

+ You can also start with small money. Like P100k or less. Stocks are more liquid and now offer higher returns than properties

+ I started a paper portfolio one year ago, to match a 1BR unit I own. I can show you the results as an example of how it works;

+ If you want to LIve in your target building, you can take the dividends from the Condo Fund RENT there;

+ When you build your Virtual Condo Fund to sufficient size and/or you finally find the Condo or house that is right for you, then you may have sufficient investment savings to make a purchase. You can buy your target property by liquidating the Virtual Condo. (ie.  You sell your fund, to gain the cash to buy the property.)  If you are a little short, you might top up, with some bank borrowing; so long as your credit rating permits it.

IDEA's ORIGIN in late 2022:

A )

What I discovered a year ago was... I could buy a 1BR Condo where I live for maybe 13M, and generate 55,000 GROSS RENT.  Or spend just P9M and generate the same average monthly income from dividends.  I was thinking, "I can Buy the Virtual Condo for about a 30% Savings, and hold it until the price gap gets smaller, or disappears."   How do you think I did over 12 months?

B )

I have the details.  And will share.  But I need people to understand that the notion of the Virtual Condo Portfolio is to produce AN INCOME, and not necessarily replicate a Valuation.  If effectively replicated THE VALUE of the referenced Condo, then it never would not have been available at an approx. 30% discount about one year ago.

EXAMPLE:  My "KROMA CONDO" Portfolio from Nov. 2022

xxx

One year later:

xx

+ x

+

Can be COMBINED with Deferred Purchase.

The virtual condo might be combined with a off plan buy.  The idea being, you will using the Virtual Condo Funds to cover part, or all, of the balloon payment after several years

This is an expensive time to buy condos and a relatively cheap time to buy stocks. So if you do both thru deferred payments you just might get the best of both worlds.  If Rents and the VCP grow in value prior to the final payment being required.

Some Cyclical Considerations

Valuations NOW at this point in the Cycle favour REITS and Property stocks over physical property.  When the GAP narrows, assuming it does, then other strategies might work better.  In fact, one reason I developed this idea, was so I could MEASURE THE YIELD GAP with precision, and see how overvalued (vs. REIT stocks) that physical properties were.   By calculating the COST of the Reit portfolio and comparing it with the property price, you can see clearly and dramatically how much extra you are paying to own a place to live.  While waiting for the right moment to buy a physical property investment, you can avoid all its encumbent risks and headaches associated with owning a physical property..

====

WHY SHARE this Idea?

I haven't thought about making money on it. More of a pay forward charity concept. Free education. But someone could monetize it maybe. Wrap it somehow... perhaps with a Condo on deferred purchae

EXAMPLE

[drbubb]

EXAMPLE: "KROMA 1BR CONDO" Portfolio from Nov. 2022

Example: Replicating Cash Flow
For a 1 BR Reference Condo
with a 9M REIT Portfolio.

Orig., 11.07.22,. P 55,100 /Mo.

Mon.: Areit: Mreit : RCR  :  Filrt :
Cost: P2.25 P2.25: P2.25  P2.25:
Nv22 31.50: 12.16: P5.06: P5.62:
shsK: 71.50: 185.0: 445.0: 400.0:
Value P2.25 P2.25: P2.25  P2.25:
>dv. : 6.13%:8.06%: 7.63%: 7.39%
Ave.= 7.34%
(Div.) P1.93: P0.98: 0.386: 0.425:
Divs : 138.0: 181.3:  171.8:  170.0:  
===  P661.k = P55.1k/ mo. 9.00M

One year later:

Update 10.23.23,. P 52,300 /Mo.

Mon.: Areit: Mreit : RCR  :  Filrt :
Cost: P2.25 P2.25: P2.25  P2.25:
Nv22 31.50: 12.16: P5.06: P5.62:
Oc23.33.20:.12.20: P4.72: P3.00
shsK: 71.50: 185.0: 445.0: 400.0:
Value P2.37 P2.26: P2.10  P1.20:
Total  P7.93
>dv. : 6.39%:8.03%: 8.28%: 10.0%
Ave.= 7.90%
(Div.) P2.12: P0.98: 0.391: 0.300:
Divs : 151.6: 181.3:  174.0:  120.0:  
===  P627.k =P52.3k/ mo. 7.93M
 

PAPER TRADE:  Tested over 1 year...
+ I identified a Balanced portfolio of 4 REIT stocks.
+ Included; AREIT, MREIT, RCR, and FILRT.
+ NOV’22 Portfolio cost 9m, Yield 7.34%
+ That is a monthly Aver. Of 55,100 divs./Rent
( Almost a year later, here’s what we have):
+ OCT’23 Portfolio value 7.93M, Yield 7.91%
+ That is a monthly Aver. Of 52,300 Divs/Rent
= Return was -12%, and Divs are down -5.1%

ACTUAL CONDO:
+ A year ago was about P13-14M Ask
+ Current value, maybe P14-15M Ask
+ Rental value might be 55k > 60K now
( But occupancy rate is only 60%, weak?)
= So Bids might be 2-3M less than ASK

COMPARISON comments.
Drop in Virtual Condo; bad performer, FILRT
Which lost over P1M, and div, dropped -29%

Had the Virtual Portfolio, been only 3 stocks:
Value would have been down just 3k, -0.03%;
Despite benchmark TLT bonds being 11% down:
Divs rose= 54,500/mo ave. to 56,600, +3.9%

[drbubb]

VIRTUAL CONDO: Active management Helps!

Some may say, how can you know how to avoid the "bad" stock?

In reality, I did that, I under-invested in FILRT.  I did not like the way that the FILRT dividend was shrinking quarter by quarter, so I down sized my investment in that REIT.  Selling some.  Taking some profits and losses on FILRT during the year.

I accepted some small losses on shares sold.

I was able to cut my average cost from P5.70 to just P3.73 now.  That's P3.80 a share, adding back the small losses.

Using my average cost of P3.80, I can recalculate the Updated portfolio, as follows:

One year later, "with management":
Update 10.23.23,. P 52,300 /Mo.
Mon.: Areit: Mreit : RCR  :  Filrt :
Cost: P2.25 P2.25: P2.25  P2.25:
Nv22 31.50: 12.16: P5.06:  P3.80:
Oc23.33.20:.12.20: P4.72: P3.00
shsK: 71.50: 185.0: 445.0: 592.1:
Value P2.37 P2.26: P2.10  P1.78:
Total  P8.51
>dv. : 6.39%:8.03%: 8.28%: 10.0%
Ave.= 8.18%
(Div.) P2.12: P0.98: 0.391: 0.300:
Divs : 151.6: 181.3:  174.0:  177.6:  
===  P685.k =P57.0k/ mo. 8.51M
====

[drbubb]

MODEL Portfolio, 10.31.23,     OCT.
APX.    2.58. 86,957: 224,349 200.0k 2.30
MEG.   1.98. 99,502: 197,014  200.0k  2.01
RCR.   4.74. 42,373: 200,848 200.0k 4.72
====             ====:  622,211 600.0k
Cash    ==== ====  400.0K  400.0k  ===:
Profits.      +40,954:    40.9K.  <gain  
Model  ==== ====  1063.1K 1000.k +6.31%

WATCH Portfolio,  10.31.23
APX.    2.58  40,816: 105,305  100.0k  2.45
BEL.     1.18   86,957: 102,609  100.0k  1.15
FILRT  3.00  33,557: 100,671  100.0k  2.98
LTG     8.85   11,123:   98,439  100.0k  8.99
MAXS  4.00  25,062: 100,248  100.0k  3.99
RCI      .460  196.08k  90,197  100.0k  0.51
ROCK  1.32   71,429:  94,286  100.0k  1.40
VLL.     1.60  59,880:  95,808  100.0k  1.67
Mreit  12.18     8,210:  99,998  100.0k 12.18
====.              ====. 887.6K  900.0k
Cash*   ==== ====   100.0K   100.0k  ===:
Watch  ==== ====   987.6K  1000.k -1.24%

+ Model  =======  1,063.1  1000.k  +6.31%
  Combined, M+W:  2050.7k 2000.k +2.53%
Vs. PSEI.                     5,974.  6,321 :  -5.49%
                            Outperformance : +8.02%
*Profits:
+sold half BTC at Php 166.5m, +10,889 (M)
+sold half BTC at Php 195.0m, +30,065 (M)

MY GOAL is to beat the Index by 1% per month.

At +8% after one month, we are 7 months ahead

[drbubb]

MEG since 2018, Last: P1.98

MEG sank, with rising rates, falling Bonds to a huge discount (-70%) below Book Value. Meanwhile, developers kept pushing New Property prices higher.  Developer earnings are growing again, after Covid disruptions, and the capacity to pay higher dividends is growing too.  Rising dividends are a likely pathway to higher stock prices, for most of the developers

MEG vs.TLT: 1.98/83.58= 2.37% (Oct'23)

The importance of TLT / Bond prices in driving developer prices cannot be under-estimated.  Look at the STABILITY in the Historic Ratio between MEG and Bond prices... 

Time : MEG / TLT :  Ratio
Ye’18: 4.75 /121.1  =3.92%
ye’19: 4.01  /137.3 =2.92%
ye’20: 4.08 /157.2 =2.60%
ye’21: 3.33 /146.7 =2.27%
ye’22: 2.00 /100.7 =1.99%
’19-22.    Average =2.45%
10/23: 1.98 /83.58 =2.37%

Interest rate levels predicted MEG prices much better than rising NAV has.

[webmaster]

MODEL Portfolio,   11.10.23,  Nov. 10th
APX.    2.55. 86,957: 221,740 200.0k  2.30
MEG.   1.99. 99,502: 198,009 200.0k  2.01
RCR.   4.74. 42,373: 200,848 200.0k  4.72
====             ====:  620,579 600.0k
Cash    ==== ====  400.0K   400.0k  ===:
Profits.      +40,954:    40.9K < Net +  
Model  ==== ====  1061.5K 1000.k +6.15%

WATCH Portfolio,    11.10.23
APX.    2.55  40,816: 104,081  100.0k  2.45
BEL.    1.22   86,957: 106,088  100.0k  1.15
FILRT  2.97  33,557:   99,664 100.0k  2.98
LTG     9.05   11,123:  100,663  100.0k 8.99
MAXS 3.89  25,062:    97,491  100.0k 3.99
Mreit  12.20    8,210: 100,162  100.0k 12.18
RCI     .490  196.08k  96,079  100.0k   0.51
ROCK  1.43   71,429: 102,143  100.0k  1.40
VLL.     1.62  59,880:  97,006   100.0k  1.67

====.              ====.  903.4K  900.0k
Cash*   ==== ====   100.0K   100.0k  ===:
Watch  ==== ====  1003.4k 1000.k +0.34%

+ Model  =======  1,061.5k  1000.k  +6.15%
  Combined, M+W:  2064.9k 2000.k +3.25%
Vs. PSEI.                      6,162.  6,321 :  - 2.52%
                            Outperformance :  +5.77%

Vs, End Oct.
Watch  ==== ====  987.6K  1000.k  -1.24%

+ Model  =======  1,063.1  1000.k   +6.31%
  Combined, M+W:  2050.7k 2000.k +2.53%
Vs. PSEI.                     5,974.  6,321 :  -5.49%
                            Outperformance : +8.02%

Just over 1 Month, NAV is 5.8% ahead of PSEI
Since End Oct. PSEI is up 3.1%, as Bonds rose in recent days.  And inflation slowed.  The two portfolios rose only P 14.2k, that's  0.7%.  An underperformer was APX which was in both portolios, and was down -1.2% since end Oct, as  Gold prices slid this past week.

[webmaster]

PSEI - SPY, etc  Psei (6,191.5) / SPY (449.68) = R-13.77x

Key Resistance for PSEI.  Will it follow SPY, and IWNM higher, or await a further "push" from TLT?

[webmaster]

LATEST WEEK :  Nov.17th-revised

Date: Model : Watch: Comb.:   PSEI:  O’perf
9.30 : 1000.0: 1000.0: 2000.0  6,321  starts
10.31: 1063.1:   987.6:  2050.7  5,974 +8.03%
11.10 : 1061.5: 1003.4:  2064.9  6,162 +5.77%
11.17R 1083.2: 1016.8:  2100.0   6,212 +6.09%* Missed DD trade
===
chg.: +8.32% +0.41% +4.37% -1.72% +6.72%
Target, at 1.5 months: +1.5%.  BEAT: +5.2%!

MODEL Portfolio,    11.17.23,  Nov. 17th
APX.   2.65. 86,957: 230.436 200.0k 2.30
MEG.  2.07. 99,502: 205,969 200.0k  2.01
RCR.  4.83. 42,373: 205,933 200.0k  4.72
====             ====: 642,338 600.0k
Cash    ==== ====  400.0K   400.0k  ===:
Profits.      +40,954:    40.9K < Net +  
Model  ==== ====  1083.2K 1000.k +8.32%

WATCH Portfolio,    11.17.23
APX.   2.65  40,816: 108,162  100.0k  2.45
BEL.     1.17  86,957: 101,740  100.0k   1.15
DD       7.70  14,641: 112,736  100.0k  6.83
FILRT  2.89 33,557:  96,980  100.0k  2.98
LTG     9.09   11,123:  101,100  100.0k  8.99
MAXS  3.75  25,062:  93,983  100.0k 3.99
Mreit   12.14    8,210:  99,669  100.0k 12.18
RCI     .550  196.08k 107,844  100.0k  0.51
ROCK  1.35   71,429:  96,429  100.0k  1.40
VLL.    1.64   59,880:  98,203  100.0k  1.67

====.              ===.  1,016.8K  1000.k
Cash*   ==== ====     00.0K    00.0k  ===:
Watch  ==== ====  1016.8k  1000.k +1.68%

+ Model  =======  1,083.2k 1000.k +8.32%
  Combined, M+W:   2100.0k 2000.k +5.00%
Vs. PSEI.                      6,212.  6,321 : - 1.72%
                            Outperformance :  +6.72%

After 1.5 Mos., NAV is 6.7% ahead of PSEI

(without DD): missed BUY at P6.83

WATCH Portfolio,    11.17.23
APX.   2.65  40,816: 108,162  100.0k  2.45
BEL.     1.17  86,957: 101,740  100.0k   1.15
FILRT  2.89 33,557:  96,980  100.0k  2.98
LTG     9.09   11,123:  101,100  100.0k  8.99
MAXS  3.75  25,062:  93,983  100.0k 3.99
Mreit   12.14    8,210:  99,669  100.0k 12.18
RCI     .550  196.08k 107,844  100.0k  0.51
ROCK  1.35   71,429:  96,429  100.0k  1.40
VLL.    1.64   59,880:  98,203  100.0k  1.67

====.              ====.  904.1K  900.0k
Cash*   ==== ====   100.0K   100.0k  ===:
Watch  ==== ====  1004.1k 1000.k +0.41%

+ Model  =======  1,083.2k  1000.k +8.32%
  Combined, M+W:  2087.3k 2000.k +4.37%
Vs. PSEI.                      6,212.  6,321 : - 1.72%
                            Outperformance :  +6.09%

[webmaster]

"MY TWO Stocks" - V. 1
HOW IT WORKS:  People who want to participate should post one or TWO CHARTS on the Phl.Stocks Chat, and be prepared to discuss the charts and the companies they represent: ie. what makes the charts interesting?. (At least one of the charts posted should be stocks from the Model or Watch portfolios, so we can build our expertise in those specific stocks.)   

Following are THREE stocks charts.  Since this is new, I will post an extra chart: TLT, to kick this off.  We can discuss just two or all three.  There is something to learn about DISCERNMENT from these.

TLT / BONDS.  Key resistance is dead ahead at 91-92.  Next week, we may see this tested.     (At TLT = 90, the interest rate is 4.6% for long term US Treasuries.)  I reckon this Rate is the main driver for Global interest rates.  PHL 10 year rate is now 2% higher at 6.56%,  and PHL.Reits average over 8%, >3.4% higher than LT Bonds - that's a big spread btw, suggesting Phl.REITs may be a good buy right now.)

MEG / Megaworld, closed at 2.07, up 0.08 or +4.0% on the week.

APX / Apex Mining, closed at P2.65, up 0.10 or +3.9% on the week.   I often compare this with UGL (2X Gold), which closed at 59.64, up 2.61 from 57.03, or +4.6% on the week

[webmaster]

LATEST WEEK :  Nov.24th

Date: Model : Watch: Comb.:   PSEI:  O’perf
9.30 : 1000.0: 1000.0: 2000.0  6,321  starts
10.31: 1063.1:   987.6:  2050.7  5,974 +8.03%
11.10 : 1061.5: 1003.4:  2064.9  6,162 +5.77%
11.17 : 1083.2: 1004.1:  2087.3   6,212 +6.09%
11.17R 1083.2: 1016.8:  2100.0   6,212 +6.72%* Missed DD trade
11.24: 1082.4: 1011.8:  2094.2   6,270 +5.52%
 ===
chg.: +8.24% +1.18% +4.71% -0.81% +5.52%
Target, near 2.0 mos.: +2.0%.  BEAT: +3.5%

MODEL Portfolio,    11.24.23,  Nov. 24th
APX.   2.79. 86,957: 242,610 200.0k 2.30
MEG.  2.02. 99,502: 200,994 200.0k  2.01
RCR.   4.67. 42,373:  197,882 200.0k  4.72
====             ====: 641,485  600.0k
Cash    ==== ====  400.0K   400.0k  ===:
Profits.      +40,954:    40.9K < Net +  
Model  ==== ====  1082.4K 1000.k +8.24%

WATCH Portfolio,    11.24.23
APX.   2.79  40,816: 121,305  100.0k  2.45
BEL.     1.17  86,957: 101,740  100.0k   1.15
FILRT  2.85 33,557:   95,637  100.0k  2.98
LTG     8.89   11,123:   98,883  100.0k  8.99
MAXS  3.55 25,062:   88,970  100.0k  3.99
Mreit   12.00   8,210:  98,520  100.0k 12.18
RCI     .490  196.08k  96,079  100.0k   0.51
ROCK  1.35   71,429:  96,429  100.0k  1.40
VLL.    1.65   59,880:  98,820  100.0k  1.67

====.              ===.    896.4K  1000.k
Sale DD  7.88 14,641:   115.4k  100.0k  6.83
Cash*   ==== ====     00.0K    00.0k  ===:
Watch  ==== ====  1011.8k  1000.k +1.18%

+ Model  =======  1,082.4k 1000.k +8.24%
  Combined, M+W:   2094.2k 2000.k +4.71%
Vs. PSEI.                      6,270.  6,321 : - 0.81%
                            Outperformance :  +5.52%