Life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
Sunday, March 20, 2022
Random thoughts: Energy vampires
Thursday, March 17, 2022
Random thoughts: Alibaba and JD
I think Alibaba brought a lot of grief to people.
From what I read in the blogger sphere, it seems many people "regret" boarding the bandwagon.
As a silly investor, I would like to give my silly take.
As Alibaba went south, I followed my rules of engagement of accumulating when price show 20-25% weakness. When it is my third or fourth Tranche, I look for 30-35% correction.
Mathematically, the third or fourth tranche will be less than 50% of your last purchase price.
The caveat is the accumulation cannot Exceed 5% of my overall portfolio, and my portfolio, I included my cash that are set aside for investment.
I believe Alibaba cloud business will turn in profits, and its e-commerce still has a moat. I also believe/ hope that regulations will come to an end, and release the pressures on these companies.
My average price is 146 and I am 30% into the red. I missed the lowest price and my last entry is 96, which is just slightly higher than what the market offers now. At its worst, I am down by more than 40%.
I do not think I will accumulate further although I still have leeway and room before the 5% ceiling is hit.
The same can be said of JD, although I waited longer before accumulating because JD results is worse than I expected, (turning in a loss).
I think I am humbled by the HK market, as I am a newbie in it. I didn't experience multiple days of more than 20% swing in price per day with STI.
My holding of HK counters increased significantly when HK hit bear market, alas, I was 2 days too early, or I would be already be sitting on good paper gains.
Yet, I reminded myself that my goal is not about bragging rights, but to build a portfolio that is less fragile to shocks, and one of the way to build such a portfolio is to do bear hunting.
1China Shineway Pharmaceutical Group Ltd.
and accumulate JD and Alibaba.
The point I want to make is this, we can never predict the market, and we will likely learn new lessons from Mr Market, but it is of utmost importance to have a plan or strategy and stick to it. Gather data as you execute the plan, and refine it.
If we start throwing out our whole blueprint every time the market move against us, and hope to get a new sure-win plan, we are asking for trouble. We should be more concerned about our portfolio, than individual counters. What is the cash flow generating from that portfolio, and is there any buffer to withstand a correction? My last count, my yield of portfolio is 3-4% only, but it is a portfolio that allowed me to sleep well during turbulent times and is better than CPF, OA, without lock-in period.
I hope to be able to improve either the yield or the MOS of my portfolio. Since I am still building up my portfolio size, I am definitely BUYING more than SELLING. The only stock I sold in the last month is DBS, but I agree with SMOL that I can do better at SELLING, since I am too fixated on buying. It is one area that I think I can improves on, but SELLING and PANIC SELLING are 2 totally different matter
I am more a turnaround investor, so my style suit me alone. I am not peddling my way, but encouraging whoever is sitting on Alibaba paper loss, that well, you have a silly companion who is not just silly but also stubborn.