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Showing posts from February, 2008

2008 mid-Q1 Portfolio Update

As half of Q1 has passed, my portfolio now contain:

Sino-tech Fiber
China Precision TechFujian PlasticsSihuanChina HongchengCacolaC&GKarinValutronics
Transactions made since last update:
Bought and Sold: Man Wah, Sunshine
Sold: Hongwei, the Two HK stocks
Partial Sold: China Precision
Bought: Sino-Tech Fiber, Sihuan, China Hongcheng, C&G, Karin

Bought Man Wah and Sunshine initially due to the thinking that they may be undervalued. However, worries on US housing lead to sale of Man Wah. The sale of Sunshine is due worries over the huge US$120m loan taken with nothing concrete done.

Sold Hongwei and the two HK stocks primarily to raise cash for other positons. Same for the partial sale of China Precision.

Sino-Tech and Sihuan are bought partially due to the initial recommendations made on Kleer's blog (Extraordinary Profits). However, the main reason for buying Sino-Tech is the large drop in the prices for Sino-Tech, leading to mouth-watering valuations based on its 2007Q3 results. I d…

Book Review: Your Money & Your Brain

Your Money and Your Brain, by Jason Zweig, is one of the latest book on behavioural finance (or neuroeconomics).

Basically, what differentiates this book from other books is that it include brain scans of the author's brain as the author is subjected to various behavioural experiments. And, as each chapter concentrates on a certain behavioural weakness, each chapter also contains tips to combat the behavioural weakness.

Generally, I would think that the book is marvelous, especially since I like to read up on behavioural finance. NLB has the book (332.6019 ZWE).

Some learning points are:
1) We generally have two brains, one thinking brain and one feeling brain. Or in other words, one reflective brain and one reflexive brain. In investing, it is important to have the right mixture between thinking and feeling. Some tips to maintain the right balance are asking another question (looking from other angles), try to disprove (instead of proving), know when feelings will rule, count to ten …

Weekly Portfolio Volatility

Image
In an earlier post, I have highlighted downward volatility exist, even in value investing.

Over the past two years from 2006-2007, I have tried to value my portfolio on a weekly basis based on unit value method.

Based on the 104 weeks (or datapoints) from 2006-2007, my portfolio returns has a standard deviation of 5.2%. More meaningfully, if I have 0% returns, my weekly returns will range from -10.4% to 10.4% in 99 out of 104 weeks.

Thankfully, my portfolio has more positive weeks than negative weeks (or slight negative skewed in statistical terms). Hence, I would suffer less frequent (though still considerable) stress or worries over negative returns and I would have more frequent joy over positive returns.

Going forward into 2008, due to the unfavorable environment, I expect that my portfolio will see probably more negative weeks and more volatile weekly returns.

Distribution of My Weekly Returns