Showing posts from August, 2015

Further Drop, Further Purchase

I bought into Singapore banks today -- UOB and OCBC.

Interestingly, this is my first purchase of UOB. I have not bought UOB before. Both banks, I believe, are yielding at 4% which is sufficient yield for me.

I also added to Religare Health Trust. It fall another 7 cents after purchase. Hope that it can fall more, so that I can get to buy more.

Given the large drops over the past few days, I feel that a technical rebound should be seen soon.

Looking at the 2011 drop, it started in late Jul and end in late Sep. After that, it went sideways till the end of year.

The current drop starts in mid Jul. If the current drop mirrors 2011 (it most likely won't), it may start to stabilised around mid Sep and probably go sideways for a few months.

Looking around the forums and blogsphere, the forums seems to have more dread. But the blogsphere  (including myself) seems un-fearful.. This implies that we have not reached the point of maximum pessimism and further drops is in order, I guess.

Market Correction

Market is correcting. STI (Strait Time Index) fell 15% from 3500 in Apr to 2970 on 22 Aug. HSI (Hang Seng Index) fell 20% (harder) from 28,000 in May to 22,400 currently.

No surprises that I am more interested in HK-listed stocks, since HSI has fallen more. Over the past week, I bought some HK stocks e.g. HSCEI ETF (02828). Yes, I am losing money over my purchase in the past week. But it is ok to lose money in a market correction. It is more likely that I will gain in the medium term of 3 years. Hopefully.

Despite the correction, year-to-date (ytd), I am still eking out a minimal gain of 0.3%. YTD, STI fell by around 10% while HSI fell by 5%. I fare much worse than the indices in 2011 correction. Probably it is because I have diversified into more stocks. Or, I am lucky to avoid the worst hit Oil & Gas stocks this time.

I still have bullets to spare. Looking at my cash in bank and my stock portfolio, I am 1/3 cash and 2/3 stock. My cash could have been higher, if I have followed t…

Never lose money?

Many roads lead to Rome. I don't believe in "Never lose money".

I don't do much downside assessment, I don't aim for minimum losses. Losses to me is ok.

For me:

If the probable profit is much higher than probable loss, I buy. Else I don't buy.

If probable loss is higher than probable profit, I sell.

An interesting stock

Valuetronics is $0.385 today, with EPS of 7c and PE of 5.5.

Its gone ex-div recently. Dividend was 3.5c. Its cash after excluding div paid out is around $0.20.

PE ex cash will be at 2.7.

To me, Valuetronics is more interesting than oil-related counters such as Keppel, Sembcorp, Penguin which are trading at higher PE.

And of course, I bought some today.

Do not fight the Trend

I used to think that I can invest in turnarounds. That is, buy stocks that are beaten down and wait for the eventual recovery.

Recently, I think otherwise.

I find that it is quite difficult for companies to turnaround, especially in a down cycle. And I do not know when the down cycle ceases or when the down cycle will turn into an up cycle.

For example, oil related stocks. I bought Sembcorp and Pacific Radiance in end 2014 and early this year, thinking that oil price should recover in 3Q-4Q 2015.

I subsequently sold Pacific Radiance in late Feb 2015, after reading analyst reports that the down cycle will last quite some time. This is because even if oil price recover to $60-$80 in end 2015, the oil major will still tighten their budget and lower their expenditure. If most oil major lower expenditure, the pie for oil supporting companies will shrink, lowering both revenues and profit.

I did not sold Sembcorp then, thinking that its other non-oil businesses should cushion the impact of …