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Portfolio as at end Sept 2009

This is a post on my portfolio holdings as at end Sept 2009.From Jun - Sep 2009, there have been many changes. My portfolio, as at end Sept 2009, contains the following stocks:
China Eratat
Fabchem
Fujian Zhenyun (FZ) Plastics
Metro
Techcomp
UOA
Valutronics

Sold: Adampak, China Sunsine, China Ziano, Etika, First Reit, Guthrie, Hong Fok, Jardine Strategic and Valutronics.

Etika was sold during the early July downturn as I wish to remove this non-core position during a downturn.

China Sunsine, First Reit, Guthrie, Hongfok, Jardine Strategic and Valutronics are sold to raise cash to buy other ‘better-valued’ (IMHO at that time) stocks.

Adampak is sold to take profit and raise cash for other stocks. China Ziano is sold due to the possibility of weaker fundamentals, as its competitors have slashed prices more aggressively than previously assumed.

Bought: China Eratat, Fabchem, Metro, Techcomp and UOA.
China Eratat is bought on the basis of its very low valuation i.e. around 2 PER. However, I did not b…

Belated Portfolio Update

This will be a post on my portfolio holdings as at 30 Jun 2009.

From Mar - Jun 2009, there have been quite a number of changes. My portfolio, as at 30 Jun 2009, contains the following stocks:
Adampak
China Sunsine
China Ziano
Etika (small stake)
First Reit
Fujian Zhenyun (FZ)
Guthrie
Hong Fok
Jardine Strategic (JSH)
Valutronics

Sold: Sihuan, Pfood and Man Wah.

Sihuan and Man were sold because I found better opportunities. Pfood was sold as their Q1 results were abysmal.

Added: Adampak, China Sunsine, Etika, Hong Fok, JSH and Valutronics

Added Adampak and Valutronics as plays on technology recovery. Added China Sunsine as plays on automotive recovery. Insiders' purchase also play a factor in my buy decision here. Etika is a trading buy and it was disposed soon in the Jul downturn. Hong Fok and Guthrie are bought as property plays due to their low P/B value. JSH is bought as a sort of placeholder (temporary place for excess cash) and also due to its low P/NAV.

Trade: First Ship (FSL)
Bought and sold…

7th lessson

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7th lesson: Higher gains are needed to compensate losses (see table below). Well, this is a lesson that I have to re-remember. And since I am likely to inject capital into my portfolio during times of distress, I may need smaller percentage gains to recover from my losses (in dollars terms).

Some Lessons Learnt

While my portfolio has yet to recover from its fall of 70%, it may be a good time for me to revist the lessons I have learn during this stock crisis.
1st Lesson: 90%+ of the stocks fall drastically during a real stock crisis. This is probably why Michael Leong's advice is to sell all stocks during the onset of stock crisis. The cheap gets cheaper during stock crisis.
2nd lesson: The last-third of the stock crisis tend to be the heaviest decline. This is pointed out by Kenneth Fisher in this book "The only three questions that count". And this salient observation repeated itself in Oct 2008.
3rd lesson: When quality stocks are not cheap, get out. This is the lesson I have to learn the hard way. I should have left the stock market in mid-2007 when quality stocks and even sub-quality stocks (e.g. CG Tech) are expensive. I should not have bought into Contel at all. Many regrets here. Low quality stocks can become worthless.
4th lesson: Cash is the best when everything is expensive …

Factors associating with (S-share) duds

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In recent months, there is a number of S-shares with suddenly collapsed share price due to non-normal reasons. In this post, I shall highlight a few associating factors on these S-shares.
One, weak balance sheets. S-shares like Ferrochina and China Print & Dye has weak balance sheet. For example, before China Print & Dye collapsed, its current liabilities is greater than its equity. Weak balance sheet increases the probability of the business foreclosure.
Two, to stretch the above further, expansion using lots of debts. For example, Celestial has expanded using lots of debts. While debts do not dilute equity's shareholdings, it increases the probability of the business foreclosure, especially in distressed periods (like now) where refinancing. (This factor also applies to Reits, as a few months ago, people are worrying whether some S-Reits can refinance their loans.)
Three, popular stocks. Interestingly, the S-shares with collapsed share price are more likely to be covered (h…

Re-positioning my holdings

There has been some major changes to my portfolio over the last few months. My present portfolio look like this:
Pfood Fujian Zhenyun (FZ) Sihuan China Ziano First Reit Man Wah
I have been quite active in the past 2 months:
Sold Karin, Sinotech, China Fish, Changtian. 
Bought China Sky due to cash per share higher than share price and possibly low cash outflow in the near future. Sold China Sky after its abysmal fall in cash. [Reason for buying no longer valid]
Added more of China Ziano. Initiated First Reit, Man Wah, PFood. 
I have re-positioned my investing philosophy. That is, to buy and hold high quality businesses with little or no debt. Quality means less cyclical businesses. Little debt means that the business is more likely to survive this recession. 
Karin, Sinotech and Changtian do not meet the quality aspect. China Fish debt levels are too high for my comfort, and it may be affected by the possible risk of falling fish prices. Hence, they are sold. 
FZ …