Thursday, February 19, 2015

Too "iron teeth" for my own investment health?

Reading around forums and blogs, I realized I am one of the few lone investors that are fully vested currently.

I did think of increasing cash when "price" is right, but the fact is, I do Not feel like taking any money off the table since most counters have yet to announce the results and I have yet to milk them for years, I brought most of them rather recently, unlike some other bloggers who have milk them for years.

There is one loud voice and it is getting louder. This is the seventh year of bull, fed hike is coming either in June or perhaps 1-2 quarters later, Greece is playing blink,   Shouln't I be waiting with a big war chest. Also, most of my counters are in green, I would not be losing out for dividends for 1 year or 2 and I could wait for the crash to buy back in the 1 year or 2 window.


Then, there is another voice. If I am taking profits, I might as well hold all cash. Or 70-90% cash since you cannot lose if you are not in the market. 

Then the third voice. The reasons for buy and sell. I believed Venture to do well this and in 2016 with the 3D prototype up and running, shouldn't I wait for the catalyst to happen or unless proven wrong that it is not going to happen. 

Why shouldn't I sit on a possible Dividend increase of SSC, if 6-7% dividend is sustainable for my industrial reits for the next 3 years as per my reason for buying, why sell now?

I am quite sure I will not be increasing my equity even when I look forward to my performance bonus. My cash will slowly increase again. I have not touch my endowement with cash value ( no penalty, cash back feature) and my CPF. I do not think if a 30% crash happen soon, I think I can still take advantage of it. Of course, I am not dogmatic in my approach, I would think if I made 3-4 years gains of dividends it might be a good idea to lock profits since highly unlikely for a bull to last more than a decade. 

So here I am, iron teeth about my investment and not liquiding them yet. 

Maybe I am setting myself up for a regretful goat year? Let's see how things pends out. Ram can be stubborn too, you know, and I am a goattie

30 comments:

  1. Hi SillyInvestor,

    Although I'm not fully vested like you are currently, I'm facing the same dilemma as you! There's simply so many opportunity cost in liquidating assets right now. We're all anticipating some form of major correction and so stuck between preparing our war chest for when the time come and protecting our gains.

    Nobody will really know when the crash will come, and to give up dividends, potential capital appreciation, etc. over some irrational fear that has no concrete basis seems foolish. Perhaps the answers would come from the gurus who have gone through the experience of the Lehman crisis or even the Dot.com crisis to enlighten us on what is the best step to take.

    For me, I'm holding onto some cash not so much because of the crash, but because I haven't found another suitable company to be vested into. I'm still adding counters into my portfolio, albeit taking a more conservative approach by splitting less capital into more companies and adding on position only when it is showing signs of further upside. I'm currently taking half the position I would normally take in the past. Eg. I would have purchased 10,000 shares in the past at a go, but now I buy 5,000 and wait to see the position go into profit before adding 5,000 more to my desired position size. Perhaps you could consider this as a strategy going forward as a form of diversification in terms of capital allocation over different time periods.

    ReplyDelete
    Replies
    1. Hello aloypro,

      I have stopped adding counters, also when initiate it usually is very small to begin with given my small portfolio.

      Thanks for leaving your maiden comment! Congrats for your 10k viewership

      Have a fat year

      Delete
  2. Hi SI,

    Do what you think is right. Not need to care about others lah. We all have different investment thesis and temperament, so no point comparing. I'm building up cash, no purposefully, but because there's nothing much to do now.

    Haven't come to that point yet where I'm selling anything.

    ReplyDelete
    Replies
    1. Hi LP,

      I have not reached the Zen stage where every blog I go, ppl are talking about a war chest.

      I mean I can be zen about losses, different hypothesis etc, but it takes some balls to be the lone tree..:

      Hence I blog and write to crystallize my thoughts. But same conclusion: iron teeth LOL
      But I will just see how things go? Maybe need a slap and waste a bear before waking up.

      Btw it a mad crowd at river hongbao. Uncle ringgo earn big time

      Delete
    2. Hi,

      Are you sure you are the lone tree looking at the forest, or are you part of the forest looking at a few lone trees?

      M

      Delete
    3. Hi M,

      Thanks for the comment, without the helicopter view, I would never know if I am the lone tree or part of the forest. From my perspective, I do see a forest war chest mongers.

      LOL

      Happy new year to you M, at least I can still joke about it

      Delete
  3. Hi SI

    The temptation to go into cash right now is huge because not only do we want to lock in our profits but also the likelihood that we may be able to do better with the cash if market crash and we go in at cheaper price.

    I think we need to go back to the basic and only sell if valuations are undemanding. Otherwise, we'll only be predicting the timing of when market will crash. Having said that, should you decide not to invest at this point right now, you'll be accumulating cash along the way for these few months anyway. Good luck.

    ReplyDelete
    Replies
    1. Hi if a black swan come within 2015 and the market tank by 30% or more. Then I wasted this bear. If hoever, the market goes sideways or higher for another year or two, this I will automatically be 30% cash excluding the opportune cash

      Delete
  4. Hi SI,

    I hope I wasn't the cause of it. Like what LP say, do what you is comfortable and ignore the 'noise' around. I'm a lazy investor who spend little time in analyzing stocks, so the best time is to buy when there is a downturn. However when that happens, I will not be surprise to hear people say that it is not the rock bottom yet.

    You are currently making money and that's the most important. :)

    ReplyDelete
    Replies
    1. Hi Derek,

      Of course not, no worries. The thesis of war chest is basic investment concept, just that "highly vested" suit my temperaments better. That's why I say I iron teeth.

      U know, you just confirm my suspicious. I always have this thought: there is no need to learn in depth analysis, just some basic accounting and reading of reports and wait for the bear and buy and it will be profitable.

      Have a good goat yeAr

      Delete
  5. I do see a lot of people preparing the war chest, and also those around me, but I still continue my collection. As I do not believe the crash will be around in one or two years time. Yes there is anticipation that rate will go up, but just consider the money supply in the market, and the lack of investment opportunity I don't see the chances of rate going up in near terms.
    Eg. Money supply M2 for China in 2008 is around 40,000billion RMB, but by January 2015 124,270billion RMB.
    Money Supply M2 for US in 2008 is around 7,500billion USD, but by January 2015 is 11,700billion USD.
    Money Supply M2 for Euro in 2008 is around 7,500billion Euro, but by January 2015 is 9,633 billion Euro.
    and Euro Money supply is expecting in increase quite a lot in the coming years.
    Thus by increasing rate with a lot of money in the market will only make bank facing bankruptcy, thus likely in the near years many nation will actually going towards same direction as japan which is negative interest rate for bank.
    That is my 3 cents view.

    ReplyDelete
    Replies
    1. Wow 马俊,

      That's a macro way of looking at things. Pardon my ignorance, I am rather blur at macro level, why is interešt rate hike at a point of high money supply a risk to banks' solvency??

      Delete
  6. Hi SI, imo crash or no crash nobody knows exactly when, and when it happens, how many actually have the guts to go in?
    Haha..maybe I don't like to think so much. Thus now my portfolio has progressed to one of a regular dividend type, which will be projected to pay out during crisis time as well as non-crisis times.

    Anyway, happy CNY!!!

    HUAT AH!!!

    ReplyDelete
    Replies
    1. Hi Paul,

      Happy new year and gongxi facai!! Yup, you are one of the influencing factors in my stock selection criteria. Although our choices might not be the same, we look for long term dividends givers.

      I saw on your blog that you divested Lee metals, I am still holding on. I will need to look at theQ4 results to decide if I need to let it go.

      If impairment is minimum and earning can top 1 cents a quarter or thereabout, think it will be a keep for many years since it would mean they navigate the drastic fall of iron ore brilliantly...

      Will write a post on it when they announce results...

      Delete
  7. Hi SI, imo crash or no crash nobody knows exactly when, and when it happens, how many actually have the guts to go in?
    Haha..maybe I don't like to think so much. Thus now my portfolio has progressed to one of a regular dividend type, which will be projected to pay out during crisis time as well as non-crisis times.

    Anyway, happy CNY!!!

    HUAT AH!!!

    ReplyDelete
  8. Hi SI,

    Many roads go to Rome. Just travel on the road that suit you and your style; and you will reach your destination. Actually, herd mentality is a worse style of investing.....

    Have a fantastic goat year!

    Cheers,
    Farmer.

    ReplyDelete
    Replies
    1. Hi Farmer,

      I really like your Nick, remind me of Tao Yuan Ming, 采菊东篱下,悠然见南山。a contrarian too, going the opposite direction seeking officialdom.

      So definitely he is no herd follower.

      Cheers!

      Happy new year! And huat!! Harvesting period is here

      Delete
  9. Hi SI,

    My thinking is that we should always have a clear idea when we are going to exit at the point of time where we enter into a new position. This applies whether we are trading or investing. But life loves to mess up our best laid plans :)

    ReplyDelete
    Replies
    1. Hi RT; I usually go with a buy, I already have in mind what is the sell reasons as well as why I am buying. But it's easy to "think east think west", hence it might be a good idea to "iron teeth" maybe?

      Some investors have no problems with noise. I not that zen yet LoL

      Happy new year to u

      Delete
  10. Mike,

    I am pretty much invested like you are. In fact I count myself 75-80% invested in this time.

    The reason I am still holding on is because I believe I brought the stocks at a fair value. I have brought many of the stocks when they are at 52 wks low. E.g

    ST eng at 3.4
    Sembcorp at 4.1
    Golden Agri at 0.42
    Maple tree greater China trust at 0.84

    There is no reason for me divest at this time, hence I am holding on. Will only sell when the sell signal kicks in like fundamental change or price has risen above their fair value.

    ReplyDelete
    Replies
    1. Hi solace,

      So I am not that lonely after all. Thanks for sharing your buy price. I like you took the vantage to increase holdings rather than sell as I accumulate quite a few of badly sold stocks

      Let's hope we are right. Huat ah!!

      I am looking at golden Agri too. But not my priority, some switching maybe. Will not use cash anymore to buy more

      Delete
    2. Hi Mike,

      I hope we are right too. In fact ST eng looks good for now. Hope our decision and patience are rewarded in due time :)

      Delete
    3. yup! solace,

      ST is in the green now, I am still waiting for its results...

      Hope there is a few more legs up.

      Delete
  11. Hi Sillyinvestor,

    I guess it just boils down to your comfort or tolerance level. No right or wrong and a 100% asset allocation to stocks strategy could yet provide the best outcome for you. =)

    And like what many have mentioned, you can grow a small warchest in the meantime, especially with bonus season coming.

    ReplyDelete
    Replies
    1. 15 Hww ... I am just lamenting as usual... I feel clearer after blogging and even more assured after reading the comments .,. Let's hope the earning reports dun disappoint

      Delete
  12. you are not alone, i also holding quite a lot of shares currently.

    do you mind i ask you a question? you still serving your hdb loan, or already fully paid the house.

    well, i am wondering should i use all of my war chest to clear my hdb loan.

    ReplyDelete
    Replies
    1. Hi Yeh,

      I am not in a rush to clear my mortgage. My CPF is building up rather nicely without me paying it down, I rather keep it as a warchest.

      The advantage of a 9-5 job

      Delete
  13. Hello SI,

    Everyone has their own needs and their unique investment strategy. I agree with what LP said, do what you think is right.

    Personally, I'm keeping cash now just in case I need to prepay my mortgage next year.

    ReplyDelete
  14. Hello SI,

    Everyone has their own needs and their unique investment strategy. I agree with what LP said, do what you think is right.

    Personally, I'm keeping cash now just in case I need to prepay my mortgage next year.

    ReplyDelete
    Replies
    1. Hi SRSI,

      Happy New Year, gong xi FA cai. By now you should notice as a fiancial blogger, I am not one confident blogger with track records. I am simply writing my thoughts and feelings LOL.

      By after writing and discussing with fellow bloggers, I usually feel clearer!

      I am not clearing my mortgage yet.

      Delete