Monday, August 16, 2021

Cut loss: Diary Farm 30 Percent loss.

I finally decided to part way with Diary Farm.

Maybe years down the route, they might recover, or maybe mainland visitors will start visiting and give a boast to the health care and beauty segment. Maybe YongHui loss is one off.

Well, I need not bother myself with all these anymore. 

The consolation from this experience is pays off to diversify, at least for a silly investor like me. 

The loss of Diary Farm hardly make a dent to the overall portfolio, since DFI is less than 5% of my portfolio, am  mindfully restricted any investment at cost to below the ceiling of 5% of total portfolio value. DFI is already close to 5%, I have many counters in the range to 2-4%. 

The reverse is true too, if a few counters gain more than 30%, it also hardly move the portfolio. 

I need most of the counters to concurrently run to make any meaningful gain. 

I must admits the easy money period is over. Time to just sit back and enjoy the dividends. 

Having some cash release, might not be a bad idea too. 

I know concentration bets is  the rogue in recent years.  I do allow 1 counter to go above 5% if it is a highly conviction stock, but never will I allow it to breach 10%.

That is my own rule. No figures for comparison, but I am happy with the returns thus far, especially if I can sleep well, and it is not difficult to cut, as and when required.


10 comments:

  1. That is the advantage of diversification. 30% loss but didn't make a dent on portfolio. People with several family dependents are better served sticking to diversification. No big disaster will happen when the occasional bad thing happen.

    Most people who talk about huge gains with concentrated portfolio will keep quiet when they make huge losses.

    I myself will stick with diversification. In a bull market that lifts all boats, a diversified portfolio can make good money with lower risk.

    ReplyDelete
    Replies
    1. Hi Hyom.

      Totally agree on the point that when we have several dependents, we should prevent financial ruins at all cost.

      Especially I do not have the resources to diversify beyond asset class, it is mainly just cash and equity for me. For people with multiple properties, gold, VC etc. I guess they can be a bit more adventurous is a particular class.

      For me, even a slow and steady 4 - 6 percent returns annualized over a decade is super wonderful le.

      Delete
  2. diversification is important esp in uncertain times

    ReplyDelete
    Replies
    1. Agree. CBd.

      Yet even seemingly sure win bets, like our tEmeask bet on Ant or China tech can goes horrible wrong

      What certain times can I, a little investor expect.

      Delete
  3. Yes. Very important to diversify. Likewise, when I divested SPH at 40% loss last year, it did not make much dent to my portfolio value.

    Well, should have sold when Mr Umbrage came. Haha.

    ReplyDelete
  4. Hi PIF,

    Thanks for chipping in. For SPH, I got it wrong tbou. I ask my wife and MIL to cut loss ( I sort of manage their investment, is their own money and is their call to make, but I will tell them which to buy when to buy when to sell)

    Never expect Keppel to come in as the white Knight or rather 贵人 to give it a 1 time PB valuation.

    While no doubt is could well be a win win situation, obviously both companies are doing National service.

    One to give our media business breathing space for 2 - 3 years as the govt figure how best to run it sustainably, and Keppel giving long suffering SPH holders a reasonable exit

    Guess waiting for the right valuation at the wrong time is tough, but it is another safety catch

    ReplyDelete
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