Tuesday, 15 March 2011

Stock melt down

Bad things come one after another. Inflation fear, middle east unrest, tsunami and the now nuclear plant blast. The situation is indeed worrying, I do hope it is under control and everybody will be safe. Market selling accelerated. I think it is panic selling, since nobody can predict the consequence of a nuclear melt down.

From big to small cap, all stock are under pressure. Any buyer? At least not me. I am not interested in panic selling, neither I am dare enough to go into market now. Low could be lower. If the panic selling continue few more days, then I might go in to grab some cheap stock.

Epicentre buck the trend to stay firm at current price. Recent broker report and ethusiasm on iPad 2 make the stock hot among investor. After few round of consideration, I decided to give it a miss. Why? Retailer's margin is thin and cost is catching up, since the rent and wages are increasing. However, it could continue to do well, driven by iPad 2 volume.

Anwell tech right issue. Oh no, cash call again. I am glad that I made the decision to cut it off. Otherwise, it will burn more cash.

Sunday, 13 March 2011

My recent sell decision

Market volatility has returned, starting with middle east and africa unrest, follow by last week Japan earth quake. My portfolio is back in red again. I sold away some of the counters in order to make the portfolio more concentrated. I also kind of realised that small cap, although offer potential great return, also comes with great amount of risk.

Longcheer
The buy decision originated with a broker call and the sell decision also come with that. When I bought the stock, it is kind of undervalued where company has been buying back share, giving out dividend and emerging market business is doing well. It briefly go up for a short period and come down recently because of the disappointing result. I managed a small loss. I am glad that I took that loss. Because after the result release, it fell quite substantially and I think the business will remain weak for sometime more. The first sign of danger emerged when major shareholder start to trim holding.

Oceanus
It is a classical case of didn't take my profit at the right time and end up with loss. It went up to 0.40 plus when the TDR issue was hot, I should have sold it to lock in the profit. Because the restaurant business is tough by nature and their abalone need time to mature. Just look at the restaurant listed on SGX, how many of them offer good growth? I realised the inherent short coming with a restaurant. During the off peak hour, the resources are idling, during the peak hour the capacity is maxed out. No matter how long the weekend is, when your restaurant is full, you can't earn any extra. The core business and restaurant business need sometime to bring good profit, I am better off take my money to other stock.

Anwell Tech
It was mentioned in my earlier post. Surprisingly the solar business competition is getting more and more crowded, money is no where to be seen. Safety first, just sell until they can bring in good cashflow.

Genting SP
The next day after they announced the Q4 result, I sold it at 10% loss. My hope for better than expected earning did not materialise. Looking at the currrent climate, there is chance for it to weaken and could be bought back at lower price. However, the market player seems to agree that it was a temporary set back only and the casino is still going to do well in Singapore. Let's look at what happen for the rest of the year.

It was tough call to where market is going. However, I feel safer by selling away those businesses that are going to suffer in the short term. I am looking to deploy the reclaimed capital and fresh capital if market weaken considerably. My target for this year is to buy some cheap stock for long run, take some good profit when chance come and wait patiently.

I think my investment style has gradually evolved, hopefully for the better. Some will be under my long term portfolio and to be bought on cheap. For those fast moving stock, I will take some meaningful profit, as not to suffer the not taking profit emotion. I will mix some small, mid cap with big cap, as to reduce the overall portfolio volatility. I will buy those which offer good dividend yield as to boost the recurring income. While holding the stock for long term gain, the only comfort thing is to receive dividend.

Tuesday, 1 March 2011

Buying on hope

Every investor has different expectation of the share he/she bought. Ultimately, everyone wants to make money. For big company, to attract investor willing to buy company's share is not difficult. The earning is stable and growing slowly. Some are of course grow faster and has high PE.

For smaller company, attracting investor money is more difficult. The business is still going through transition or picking up. You need to have good story for people to buy into the share. Therefore, there exists the PR agency, to communicate the merit of the company. Investor buy the company on hope that the new venture or business will pick up and will make a windfall out of it. However, many time, you find that, story is one thing, performance is another thing.

Take an example, Anwell Tech, the recent financial result is disappointing. When the share was hot, chasing by punter, it went up quite a fair bit. I didn't take profit, wishing the solar business could take off and earn more money. However, looking at recent result, there is a gap between expectation and reality. I decided to cut loss, selling at some loss to protect my capital.

Perhaps I should keep in mind Buffet's teaching - Don't lose money. Slowly my investment style has changed towards big cap. Those that has more stable business and chance to keep increasing earning. I need to think twice in investing promising company in future.