Monday, October 4, 2010

Underperform - Year 2010

Is about 2 months i did not update this blog. I am not out of the market but less attention. I did make some adjustment to my portfolio, this is due to i need more capital for my property investment. My holding currently just consist of Public Bank, Hartalega, Top Glove and Allianz. I am still holding stocks consist of value and growth. It look like i am going to underperform the market for the 1st time in 10years since 2000, but it did not bother me at all. I am not chasing the short term performance. I rather to stick to my strategy and investing method which has beaten the market for a long duration. I am looking at long term competitive advantages of my holdings not the short term share price fluctuation. As long as i am satisfied with their competitive edges i will hold them as long as i could. I am long enough in the stock market, i knew how to beat it in long run.

For property investment i just bought my 2nd and 3rd property with friend. One is for rental income and the other one is for capital appreciation. I prefer not to talk too much on property since i am still learning, limited sucessful case able to share. Furthermore, there is a debate on property bubble or property super cycle.

6 comments:

  1. nice to see 2nd brother update the blog again. :)

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  2. hi 2nd brother, is really good to have your sharing here. Can you share about your strategy on cash-to-share ratio? Do you think is better to keep high cash ratio now? (i.e 50% cash)

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  3. retnuoc, i think i have talk about cash to share ratio in my previous post. I pratised what has been articulate by Ben Graham, instead of holding bond and share, i hold cash and share in certain ratio. The reason is being we must be financially and mentally prepared to deal with market fluctuation. Normally my cash portion is lower than share portion, because in long run share would outperform cash. Unless i am very sure that the bubble is built up and market is crazy, then i would prefer to preserve more cash. I prefer to hold cash around 20-30% as compared to my share portfolio. If my cash portion is lower i would feel very uncomfortable. furthermore i cannot take advantage if market go south. In over 10 years my investing span, the only time my cash is more than share is in year 2008.

    In share portion I further divide my portfolio into "value" stocks and "growth" stock. Value stock like Public Bank and Allianz (previously Tanjong is in this group) make sure i can sleep well and growth stocks like Hartalega and Topglove to assist me to beat the market. I fould this formula work based on my previous experience. And i dont see a need to change my strategy as long as it still works.

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  4. what about JCY as you mentioned before? value stock or growth stock?

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  5. Blue Sea, i bought this JCY thru IPO. My initial intention is only to make little money due to 5% discount for retail investor. I did this as to make some money for my idling cash, i also apply for maxis previously. Since one of my friend work in WD, so i just checked with him the prospect of JCY as it is not within my circle of competence. He told me the business model is similar to topglove. So i hold it a little longer for more upside, however it turn out to be a bad bet. Therefore i sold and move on. I cannot say if i not buying or sold it at 1.80-1.90 as this is my own decision. It is not a value nor growth stock.

    Morale of it is to stay within your circle of competence.

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