Posts

Showing posts from March, 2008

2008 Q1 Portfolio Update

As Q1 is almost done, I shall provide an update of my portfolio here. My portfolio currently contains:
Sino-tech Fiber
China Precision TechFujian ZY PlasticsSihuanChina HongchengCacolaC&GKarinValutronicsTransactions made since last update:
Bought and Sold: Dutech
Bought: Sihuan, C&G and Cacalo
Partial Sold: Fujian ZY
As seen, my portfolio did not change much since the last update.

Bought Dutech as the price is attractive at around 2007 historical 6.x PER. However, the position is not large, as I am waiting for futher price drops. Dutech was sold later to raise cash for other purchases.

Sold a minor portion of Fujian ZY to raise cash for other positions.

Have added more shares of Sihuan, C&G and Cacalo in the portfolio as the prices of these stocks fallen to attractive levels.

Year-to-date, my portfolio returns are negative at around -15%, more negative than STI (-12%).

Book Review : Investing The Templeton Way

Investing The Templeton Way is authored by Templetion's grand-niece, Lauren and her husband, Scott.

The book would be a splendid addition to a value investor's library. The book elaborates on Templeton's principle of buying at maximum pessimism and his way of thinking in his recent exploits of the market (for example, shorting the Internet stocks in early 2000)

Some interesting points are:

1) The book contains two analogies to explain how buying at maximum pessimism. One is the lemonade example, and the other describes how Templeton's grandfather's bidding strategy for farmland. That is to bid only when there are no bidders for the farmland. In this manner, the purchased farmlands were bought at a very low price and hence, a profit was almost guaranteed when the farmlands were sold some years later.

2) The right question should be "When is the outlook most pessimistic?" and not "When will the outlook be good?"

3) Diversification will be helpful if on…

Beating CPF's extra 1% and its regulations

If you do not know, from 1 April 2008, you will not be able to invest the first $20,000 in your Ordinary Account. (See here) This rule is because of the additional 1% government is offering us.

The extra 1% will only push up the net returns to 3.5%, probably half of what one can get in a 20 year MSCI world stock index (assuming it's 7%). It seems that the government is forcing the younger adults with long time horizon to miss out on higher returns in long term investing, rather than letting the young adults to choose themselves (in other words, having an opt-out option for the extra 1% in OA).

And not to mention that the 3.5% return is lower than the current CPI inflation rate.

As the April 2008 falls nearer, I have decided to utilize the bulk of my CPFOA to buy some stocks, especially in the current bargains galore season. The chosen stocks will be those with P/NTA less than 1 and property owning companies (to safeguard against inflation).

Currently, possible candidates so far are Or…