Friday, October 10, 2014

Random thoughts: The Mind, Method and Money in the recent correction


Actually I would hardly call this a correction, something around 5-10 % perhaps would mean a correction. Maybe we will get it come next week. Nonetheless, I think the "mind" part of me is better now. 

I am reading up companies which I think are successful, sembcorp industries, Keppel, Sembmarine, OsIm... Just for fun  as I expand my radar. The Money part is already fully vested, so no motivation to do detailed analysis. If the M is there, starhill global and low Keng Huat will be what I will accumulate. Too bad I don't have strong vitamin M. No worries, plenty of chances.

Now, back to the M. My portfolio value is doing worse than a few months ago, even in as recent as 2014 perhaps, I will be thinking of averaging down, sell now and buy back. I still have some thoughts, but it is not as loud and I have no urge to take any actions at all. Lee metals has fallen 10% from purchase price and 20% from its peak, hardly any heartache. No "aiyo, why I never sell" ouch moment. APTT is doing worse post dividends, fallen by 6-7 cents after dividends of 4 cents, also no "aiya" moments. Acendas reit and ST engineering is lower than my purchase price now, no "see, no discipline to wait for correction" grumbling.

In short, have been quite a while since, that I can be so peaceful internally. In fact, one voice is quite loud, think my portfolio value has about another 10% to fall, since I believe the STI might go near 3100 or even lower in the short term. I think one main reason for my Mind to be in such a state has a lot to do with my Method.

I used to think of 10-15% fall as a trigger to accumulate. Now, I am also comfortable to let 10-15% loss manifest. It will break even in 2-3 years time due to dividends effect, unless the business fundenmental changes so much, which would mean my longer term analysis of the company is wrong to start with. I can live with 1 mistake. I do not have a concentrated portfolio compare to 6 months ago. I no longer have 20% holding in any one stock after I sold YZJ. I looking at the longer term now, and it put my mind at ease. I know I can live with STI at 3000 over the next few months. If it goes lower than that, it will not happen overnight barring any black swan, I can always look to expand my portfolio next year with my bonus or dividends received. Better to keep some cash at hand. No rush. 

100% vested also mean any bargain has to wait till it really become cheap. I think my underlying 6% yield from
The whole of my portfolio is still on track. The Money part or lack of, is keeping my itchy hand off Starhill global, low Keng huat or even sembcorp. Huh? I miss a boat? Let it go, let it be...

Allow myself to be fully vested without trying to time the market needs my mind to be in this state most of the time, otherwise the Mind and Method will be in conflict. I bought APTT, Venture, Parkson (divested), CMHP and SSC at Higher STI level than current levels. Even if STI is to go to 3150 next week, as the newspaper predict, I do not really think they will be much lower than my entry level. I think STI will have to be at 3000 to get a 5-10% discount to my buy price. Again, I think I can live with 10% paper loss over the short run.

So busy with work this week, so therepuatic, (deep breath) blogging...

I just burn the mid night oil working out deployment plan, pardon me if I dun write coherently 

Cheers, 
Silly investor 

2 comments:

  1. My portfolio values had dropped a fair bit last week. Need vit m if correction did happen this time round.

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  2. hi David,

    I think we do not need to lose any sleep yet...

    In a falling market, cost averaging on the right stocks is the right thing to do...

    Definitely more productive than cost average on the way up, assuming business fundamental do not give way, since it will be affected sooner or later

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