Monday, February 25, 2019

Random thoughts: 5 years after I thought I begin my journey to Rome

This post is a review of a post of investment principles I had 5 years ago in 2014.

https://sillyinvestor.blogspot.com/2014/07/random-thoughts-my-route-to-rome.html?m=1

2014 One paradigm shift:
Stop worrying about the value of my portfolio. Not that it is not important, but the cashflow of dividends and the robustness of underlying business is more important

NOW:
Portfolio value is important. Returns is not as important robustness of portfolio. Keep a decent amount of cash in portfolio. Recent correction with counters in radar falling 50% to 80percent from their historical or recent peak, made me take out my gun and statt firing. The lowest cash went was 40 percent. It is back to 50 percent now with some triming of loses and taking of profits.

Second shift:
Only look at companies with yield of at least 4%. If u expect growth, 4-5% is ok, if u expect flat or zero growth, at least 6% will be appropriate.

NOW: More or less intact the view

Third shift:
Only buy companies that will survive the next downturn and emerge stronger. Trading of companies that are mispriced is permissible with 2 years horizon. Expect such counters to never recover, and be ready to take the risk, and be nimble. Such counters should yield more than 8% to justify the risk. 

NOW:
Trading of mispriced counters are about turnaround play. Dividend yield is a redundant marker. The risk reward compensation should be in the form of capital gain and the high yield.that should come only after u are right about the turnaround and dividend Increase to justify the high yield due to the low cost of purchase.

If Its 50_50 kind of turnaround, punt small run fast and accumulate only once.

4th shift: 
Do yearly reinvestment of dividends, there is no need to time the market for correction or bear. 

NOW: Hahahha, why am I keeping cash if I am not timing the market

5th shift:
Other savings go into cash. Only invest further with new capital injections when cash form more than 40% of portfolio, or 
When market correct 10-15 % ( 30% of cash can be a activated )
When market correct 15 - 25% ( up to 60% of cash can be used)
when market correct 30% - 40% ( Up to 100% of cash can be used)
When market correct 40-50% ( cash backs savings from 2 of my endowments plans can be used)
More than 50% ( CPF money can be used )

Keep expanding radar...

NOW:
I go for counter correction too. Of course low tide all boats sink. But if its a industry or company specific correction, I still fire off.

Beside CPF, I have start my maiden investment in SRS. Nope, I am not going to exhuast all cash before using CPF. What good is that.

I will stagger cash and CPF and SRS. So my cash will also get some low prices that allow.me to liquidated at a earlier possible time and not until the next decade.

Radar expanding... but more for interest on business than possible winners.

17 comments:

  1. Replies
    1. Evolution theory ... Hahah

      Can only happen to my son.

      Within generation is call awakening or delusion.

      Hahahaha

      Delete
  2. Finding yourself and know yourself in the market

    ReplyDelete
    Replies
    1. Cw,

      Still finding, sleep as important as returns. No fun blogging now, sincr portfolio returns is like 2 to 6 percent for the past few years

      Damn boring. The returns are realised returns, if look into both realised and unrealized picture even more mixed

      Delete
  3. Keep it up. Happy trading. I like what you have said here - Portfolio value is important. Returns is not as important robustness of portfolio.

    ReplyDelete
    Replies
    1. Thanks MMF SOLUTIONS.

      U too, thank you for leaving a comment, may 2019 be a great year for u to trade and invest too

      Delete
  4. Replies
    1. Epic advisory,

      Thank you for your kind words and leaving a comment. A good year ahead ... cheers

      Delete
  5. Enjoyed reading your useful and insightful random thoughts. Seems like you have put alot of thought into your 'random' thoughts! Thanks for sharing.

    ReplyDelete
    Replies
    1. Anon, u are too kind.
      Thank you for leaving a comment.

      Delete
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