Thursday, October 24, 2013

My stock portfolio as of 24 oct

Was wondering if I should let readers know my stock selection, and I realized many bloggers have it, so here goes.

I invest mainly for yield, and is willing to hold for the long term. I do not consider an investment a bad investment simply because the current price is lower than my average purchase price. I consider it a bad investment if the "story" I have about the company changes for the worse and I made a judgement mistake either in the business assumptions or valuations.

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Lee metals is a small company that give higher yield, but also come with higher risk, since it's business is cyclical and it balance sheet is not actually rock solid. I expect at least 7% yield till 2014.

Nam Lee is in net cash position with projected yield of 5.8%, I will review this counter and might sell this if the next quarter confirms that it is still burning cash, and is earnings deteriorates further.

SPH is a stalwart with dividend yield of around 5%

If lippo-malls and Sabana fundamentals do not change, it should yield  above 8% till 2015 at least.

Yangzijiang would probably yield 4-5%, but with golden agri, I invested in them more for capital gain. YZJ is one of my favorite, both a yield and growth play, but not a long term counter due to the cyclical business.

Noticed I mentioned that I invest for yield, I deliberately left out the word "passive income". This is because with the exception of SPH, I do not intent to hold any of the counters for the long run, e.g. more than 5 years. I have a horizon of 2-3 years for most counters. I will review them as and when the "story" changes, if the story is getting better, it might be longer than 3 years, if not, it might be less than that. I am not dogmatic in my approach.

Do note that this is not a buy or sell call, you need to do your own research. 

I have money set aside for investing in bear market, I have several insurance; H&S, life, endowment plans, Critical illness term plan for myself and my family before I invest in the stock market. I have a stable job, and has also set aside money for my kid school needs, and other expenses before I invest. Prudence is encouraged. Take care of risk, before taking care of rewards.

I do not use my CPF for investment, I treat them as compounding bonds purchases, although I do transfer money from OA to SA. I might use it for investment only during ultra-bear market. (e.g. more than 50% fall in market, and will most probably do it tranches, even then)

Comments are welcomed. 

4 comments:

  1. 7 counters are considered as too less?
    Any watch list?
    Btw, personal view, your margin of safety isn't so significant, ready for next crisis.

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  2. Hi Ah John,

    My watchlist is too long,

    anyway, there are

    LKH, Wingtai, SimLian, CES,

    SGX, UOBkayhian

    QAF, SATS

    SUntec, Acendas,

    Sinamars Land

    PNE industries, Sin Gheet Huat, Asia Enterprise, CDW

    I find either the price too high, or the industry outlook unfavorable to enter.

    As for margin of safety,

    All my counters are less than 1 year old, I just "cleanse" my portfolio. I used to own a lot more s-chips, the most recent one that I sold being Anchun.

    As I say, I will not be overly worried if any of the counters were to fall 10%, any amount more than that, will trigger accumulation.

    I have been waiting to accumulate on all my counters on further weaknesses, and only have opportunity for Lippo, and YZJ.

    I have confidence in their earnings over the next 2-3 years, of course, My "story" might not turn out well, I believe I pay a fair price for all counters, although I would not say they have wonderful MOS now. It should appear when the catalyst pend out over the 1-2 years.

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  3. Thank you for your encouragement =)

    ReplyDelete