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.
Showing posts with label 1 investment thought. Show all posts
Showing posts with label 1 investment thought. Show all posts
Tuesday, 1 March 2011
Sunday, 2 January 2011
2011 - A new start
2010 was a busy year for me. The project work and constant OT took most of my time. However, I still manage to squeeze out sometime for investing.
2007-2008
Since the sub prime crisis, the global economy has gradually recovered. The pace of US recovery is still pretty slow and China has taken a bigger role in supporting global growth. When I think of my investment performance for 2007 to 2008, it was horrible. I was too late to cut loss and those stocks that bought during last peak were still 50% down. I hope I will do better going forward.
2011 outlook
The market will still go up in year 2011. We are no where near the peak now, since the confidence is still fragile and inflation just started to come back. What stock will do well is hard to say, as I am not a macro guy. My main investment theme is still China. That's where the strong growth going to come. Singapore tourism will continue to do well as more IR attraction will open. All the gambler in South East Asia will want to try their luck in Sentosa or Marina Bay Sands
My portfolio
Since second half of 2009, I have been gradually building up my portfolio again. Base on the experience accumulated for previous few years, I hope I am on the way for better performance in this cycle.
My top 5 holdings are
1) Hsu Fu Chi
2) Etika
3) China Animal
4) C&O Pharm
5) Eratat
For the past few weeks, Eratat lifestyle has started to move. It has gradually attracted market interest due to low valuation. I think there are two theme with the stock - i) stock re-rating ii) earning growth. It could be a multi bagger in making if the management is able to execute the growth plan well.
Beside that, I am confident that F&N and Genting SP will also do well in coming year. F&N rose a lot in year 2010, the upside might not be that great, but the growth plan for F&B sector is exciting and there is value to be unlocked from property segment. Genting will do well if the gambler continue to come in a big way.
I hope I can do more regular posting. To sum up year 2010,
Sometime the best stock is the one you already holding
2007-2008
Since the sub prime crisis, the global economy has gradually recovered. The pace of US recovery is still pretty slow and China has taken a bigger role in supporting global growth. When I think of my investment performance for 2007 to 2008, it was horrible. I was too late to cut loss and those stocks that bought during last peak were still 50% down. I hope I will do better going forward.
2011 outlook
The market will still go up in year 2011. We are no where near the peak now, since the confidence is still fragile and inflation just started to come back. What stock will do well is hard to say, as I am not a macro guy. My main investment theme is still China. That's where the strong growth going to come. Singapore tourism will continue to do well as more IR attraction will open. All the gambler in South East Asia will want to try their luck in Sentosa or Marina Bay Sands
My portfolio
Since second half of 2009, I have been gradually building up my portfolio again. Base on the experience accumulated for previous few years, I hope I am on the way for better performance in this cycle.
My top 5 holdings are
1) Hsu Fu Chi
2) Etika
3) China Animal
4) C&O Pharm
5) Eratat
For the past few weeks, Eratat lifestyle has started to move. It has gradually attracted market interest due to low valuation. I think there are two theme with the stock - i) stock re-rating ii) earning growth. It could be a multi bagger in making if the management is able to execute the growth plan well.
Beside that, I am confident that F&N and Genting SP will also do well in coming year. F&N rose a lot in year 2010, the upside might not be that great, but the growth plan for F&B sector is exciting and there is value to be unlocked from property segment. Genting will do well if the gambler continue to come in a big way.
I hope I can do more regular posting. To sum up year 2010,
Sometime the best stock is the one you already holding
Saturday, 18 September 2010
Long term share investment is about compounding growth
The primary reason for people wanting to trade stock is to buy low sell high. So, they can earn the price difference. Market is driven by greed and fear. Many people made wrong decision because of emotional factor, which causes them to sell low and buy high.
Buying stock is different from buying things from supermarket. In supermarket, everyone has a benchmark on the value of goods, you will buy if the item is on sale, the price is now lower. Stock price is different, when the price is low, people are afraid it will fall further. This is because of the fear factor. On the other hand, if your favourite stock is going up each day, sooner or later you will get sucked into the rally and buy it too high.
How do we avoid that? We need to have a mental framework of establishing the value of stock. Once you have a benchmark on what price this stock is worth. When it is selling below the benchmark, you can take time to accumulate. When it is selling way above the benchmark, you can take time to unload it.
My colleague was asking me what share to buy every day. However, she doesn’t have much capital and want to make quick bucks. I said I don’t know how to do it. I have no idea what price this share will sell tomorrow and day after. She missed the point – we know buy low sell high will make money, but who can do it consistently? Not many.
Buy and sell too frequently will not get you too far. The attractiveness of long term investing is good company takes time to evolve and outperform. In my opinion, this is the essence of stock investing or rather you call it business investing. If you have bought a wonderful business that can grow your money at above average rate every year, the ideal time frame to hold it, is forever.
That’s what I am trying to say in this post. You keep good stock for long term and let the compounding effect work its wonder. If the business can achieve return on equity over 20% a year, just be patient, compounding takes time. Eventually you will find that your investment has grown to a big amount that you dreamed for.
Buying stock is different from buying things from supermarket. In supermarket, everyone has a benchmark on the value of goods, you will buy if the item is on sale, the price is now lower. Stock price is different, when the price is low, people are afraid it will fall further. This is because of the fear factor. On the other hand, if your favourite stock is going up each day, sooner or later you will get sucked into the rally and buy it too high.
How do we avoid that? We need to have a mental framework of establishing the value of stock. Once you have a benchmark on what price this stock is worth. When it is selling below the benchmark, you can take time to accumulate. When it is selling way above the benchmark, you can take time to unload it.
My colleague was asking me what share to buy every day. However, she doesn’t have much capital and want to make quick bucks. I said I don’t know how to do it. I have no idea what price this share will sell tomorrow and day after. She missed the point – we know buy low sell high will make money, but who can do it consistently? Not many.
Buy and sell too frequently will not get you too far. The attractiveness of long term investing is good company takes time to evolve and outperform. In my opinion, this is the essence of stock investing or rather you call it business investing. If you have bought a wonderful business that can grow your money at above average rate every year, the ideal time frame to hold it, is forever.
That’s what I am trying to say in this post. You keep good stock for long term and let the compounding effect work its wonder. If the business can achieve return on equity over 20% a year, just be patient, compounding takes time. Eventually you will find that your investment has grown to a big amount that you dreamed for.
Sunday, 5 September 2010
Keep in mind the megatrend
For fundamental investors, some focus solely on the company fundamental and pay little attention on the economy or industry condition. Some will combine the technical analysis or other factor in analysing the company. Although I am fundamentalist, I also take note of the megatrend around us.
A simple example and also my favourite will be China. China is going through the urbanization process and there is no turning back. Through this process, when consumer become more wealthy, they will spend more. China consumer story is my constant favourite. Beside this, China property looks good on the long run. More people living in the city will mean more demand for housing. As more people get richer, the demand for luxury goods or housing will rise too.
Analysts have been talking up the commodity story and emerging market story for past few years. I believe that is true but the timing is quite tricky. Commodity sector has been volatile all the while, I think it make sense to buy only when there is bad news and wait for turn around, buying cheap and keep for longer term. Beside China, Indonesia might have turn the corner, the Asia growth story is very much alive and on track.
Once you have identified the megatrend, what can you do to leverage on it? Buy stocks that are beneficiary of it. For example, China consumer stock, I wish those listed on HK exchange is easily accessible to SG investor. Those strong player like Tingyi and Want Want listed in HK. I am quite reluctant to pay the month custody fee. I observed there is a trend for Indonesia company to list in Singapore. This is an opportunity to the investor here as Indonesia is a big market. Hopefully more quality company will come.
A simple example and also my favourite will be China. China is going through the urbanization process and there is no turning back. Through this process, when consumer become more wealthy, they will spend more. China consumer story is my constant favourite. Beside this, China property looks good on the long run. More people living in the city will mean more demand for housing. As more people get richer, the demand for luxury goods or housing will rise too.
Analysts have been talking up the commodity story and emerging market story for past few years. I believe that is true but the timing is quite tricky. Commodity sector has been volatile all the while, I think it make sense to buy only when there is bad news and wait for turn around, buying cheap and keep for longer term. Beside China, Indonesia might have turn the corner, the Asia growth story is very much alive and on track.
Once you have identified the megatrend, what can you do to leverage on it? Buy stocks that are beneficiary of it. For example, China consumer stock, I wish those listed on HK exchange is easily accessible to SG investor. Those strong player like Tingyi and Want Want listed in HK. I am quite reluctant to pay the month custody fee. I observed there is a trend for Indonesia company to list in Singapore. This is an opportunity to the investor here as Indonesia is a big market. Hopefully more quality company will come.
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