Two Sales

Recently, I sold my full positions in Qingmei and Techcomp.

Qingmei is sold, because reports on buzhida and Qingmei makes me uncomfortable.

Techcomp is sold, because its profits may be dented by the HK listing fees and Europe fiscal woes.

The stock sales incidentally help me to build up a sizeable cash pile, which enables me to buy some stocks (e.g. Eratat) last week.

Given the present market uncertainty, I will buy bit by bit as the prices fall further.

The Psy-Fi Blog has an interesting piece on buying during panics: "investing in falling markets is mentally extremely difficult and requires diligent preparation... the tendency to wait for a better opportunity, which can lead to missing the chance altogether... the time to buy is never right: you don’t buy on the way down, because stocks will be cheaper tomorrow, and you don’t buy on the way up, because you’ve anchored on the lower price."

Portfolio as at end-June 2011

My portfolio as at 1 July consists of the following stocks: AIMSAMPREIT, Eratat, Heeton, Hongwei, Leader Environment, Qingmei, Sabana and Techcomp

Sold: China Taisan
China Taisan is sold due to its poor Q1 results.

Bought: Sabana Reit
Intiate a stake in Sabana as it provides around 9.5% dividend yield.

Added: Qingmei, Leader Environment, Heeton and Eratat,
Leader is added after its good Q1 results. Qingmei is added a few times at various price points as its price slides. Eratat is added twice recently when its price goes below $0.18. Both Eratat and Qingmei are added because the lowered prices offer better value to me.

I have re-purchased a portion of the Heeton shares that I have sold earlier, as I think that the government measures may not have that large impact on high-end property prices. In view of possible new government measures, I have not bought more property stocks. As the CEO has personally bought more Heeton shares recently, hopefully this counter will turn out well.


Portfolio composition:
Qingmei and Eratat are my largest shareholdings.

My year-to-date returns has worsen to -28.4%. Nonetheless, I can live with the loss, as I know that I will have large drawdowns at times. The occassionally large drawdawns are because I run a concentrated portfolio.

Having a concentrated portfolio implies that I am aiming for more returns at the expense of higher risk. This high risk/hopefully higher rewards approach is my personal preference.

Portfolio as at End March 2011

My portfolio, as at end March 2011, consist of the following stocks:
AIMSAMPREIT, China Taisan, Eratat, Heeton, Hongwei, Leader Environment, Qingmei, Techcomp

Bought and Sold: Heeton, Hiap Hoe, China FibreTech, Broadway

Added to my holdings in Heeton and Hiap Hoe. Sold large position of Heeton and the whole position in Hiap Hoe after the government cooling measures. Broadway was bought under the thought that its price may increase, as the sentiment on HDD improves. Later, I abandon this thought and sold Broadway at a loss. Bought China FibreTech as a value play trading below cash. After the accounting incident on Hongxing and Hongwei, I become prudent. In addition, China FibreTech has an insider share sale probably in 2010. Both factors help me to decide to sell the entire stake in China FibreTech.

Sold: Guocoleisure, Eratat

Sold Guocoleisure as I think that it is too slow-moving. Reduce my Eratat position by a fifth, as I do not like its share placement. I did not dispose the full position, as I think that it is still pretty undervalued.

Bought: Hongwei, Leader Environment,China Taisan, AIMSAMPREIT,

Hongwei is bought as a play on rising cotton price. Never thought that it will have accounting issues. Have marked the Hongwei position to zero value. Leader Environment is bought after the glowing DMG report. On hindsight, I should sold it when it rises to $0.31. Nonetheless, it is a small stake. China Taisan is bought mostly at a high price of $0.18. Its earnings should rise this year and next year as its production capacity expands. AIMSAMPREIT is bought recently as a temporary placeholder, since I do not like to hold too much cash.

Added: Qingmei

Added Qingmei at a higher price than the present price. Similarly to China Taisan, its earnings should rise this year and next year when its production capacity increases.

Portfolio Composition:

Qingmei, Eratat and China Taisan are my three largest shareholdings.

The year-to-date returns is -18.5%. More than half of the negative returns is due to Hongwei's accounting irregularity. Going forward, I guess I will have less share purchases, as I do not find many interesting stocks in the present market.

Market on Sale

Falling prices. Posts on dread and losses on the forums. I losing money.

However, I am feeling excited .. excited by the low prices. There is a sale going on in the market. The discount may get larger in the coming days, or it may narrow.

But I think that the sale will end someday. The prices will get dearer someday.

Meanwhile, I am browsing the stocks more closely, seeing if the discount will get larger. Hopefully, I will be able to deploy my savings before the discount window closes. After all, it is a waste not to profit from sales.

Most Valuable Books

This post was created 5 years ago in Feb 2011.

Apr 2017: Updated with 4 books

Dec 2023: Updated

_________________

In my early investing years, I have devoured many investing books to improve my investing knowledge and to obtain more information so that I can settle down to a suitable style of investing.

Below are the books that I find most valuable.

Psychology

I personally find psychology the most important element in investing.

Investment Psychology Explained by Martin Pring

Trade Your Way to Financial Freedom by Van Tharp

The Winning Investment Habits of Warren Buffett & George Soros by Mark Tier

The Art of Execution by Lee Freeman-Shor  [added in Apr 2017]

Fundamental Investing

These books provide the value investing philosophy, thinking and a bit of tools.

The Intelligent Investor by Benjamin Graham

Common Stocks and Uncommon Profit by Philip Fisher

Value Investing A Balanced Approach by Martin Whitman

The Only Three Questions That Count by Ken Fisher

The Dhandho Investor by Monish Prabrai

Deep Value: Why Activist Investors and Other Contrarians Batter for Control of Losing Corporations by Tobias Carlisle [added in Apr 2017]

Capital Returns by Edward Chancellor  [added in Apr 2017]

Value.able by Roger Montgomery [added in Apr 2017]

The Joys of Compounding by Gautam Baid [added in Dec 2023]

The Model: 37 Years Investing in Asian Equities by Richard Lawrence [added in Dec 2023]

Investors’ Stories

I learn a lot from their stories and experiences.

Market Wizards by Jack D Schwager

The New Market Wizards by Jack D Schwager

Stock Market Wizards by Jack D Schwager

John Neff on Investing by John Neff

Your First Million by Dr Michael Leong

The Greatest Trade by Gregory Zuckerman

A Zebra in Lion Country by Ralph Wanger

Investing the Templeton Way by Lauren Templeton and Scott Phillips

The Money Masters by John Train

The New Money Masters by John Train

The Making of a Value Investor by Gautam Baid [added in Dec 2023]

History

These books provide the reference points to gauge the present stock market.

Devil Take The Hindmost by Edward Chancellor

The Panic of 1907 by Bruner and Carr

General Odds and Quant

These are the general books on odds, probabilities and investing related stuff.

More Than You Know by Michael Mauboussin

Fooled by Randomness by Nassim Taleb

Moneyball by Michael Lewis

What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time by James O'Shaughnessy

Behavioural Investing by James Montier

Against the Gods: The Remarkable Story of Risk by Peter Bernstein

Fortune’s Formula by William Poundstone

The Psychology of Money by Morgen Housel [added in Dec 2023]

Same as Ever by Morgen Housel [added in Dec 2023]

Personal Finance

The Millionaire Next Door by Thomas J. Stanley and William D. Danko.

Stop Acting Rich: ... And Start Living Like A Real Millionaire by Thomas J. Stanley

Portfolio as at end Dec 2010

My portfolio, as at end Dec 2010, contains the following stocks:
Guocoleisure, Eratat, Heeton, Hiap Hoe, Techcomp, Qingmei

Sold: Valutronics, Roxy, Bright World, Ziwo

Bright World is sold at its mid-30s cents before its rise to 50 cents. All the stocks are sold to raise cash to buy other stocks.

Bought and Sold: China Gaoxian (GX), Hotung

Have bought GX in October and dispose the entire position in late December at lower than 35 cents. Missed GX's run-up to 40+ cents. Hotung is a short-term play, which was bought at 12 cents and sold at 14 cents.

Bought: Guocoleisure and Qingmei

Guocoleisure is bought due to the presence of insider's purchase. Qingmei is bought after it is ex-dividend, and due to its low PER.

Added: Eratat, Heeton

Have bought more Eratat and Heeton shares, since both counters are relatively more undervalued as they have not run up as far as GX.

Portfolio Composition

Eratat is my largest holding as at Dec 2010, while Qingmei has become my second largest holding. Heeton is my third largest holding.

Conclusion

My 2010 portfolio return is 78%, which is roughly half of my 2009 return. My four most profitable stocks in 2010 are GX, Broadway, Techcomp and Eratat. I find it noteworthy that on a per unit basis, my portfolio unit price has surpassed its previous high in 2007. (Otherwise stated, my portfolio returns are computed using unit value method.)

In 2011, my return is likely to less than half of my 2010 return. Furthermore, I am likely to hold a higher cash level in 2011 given the higher valuations.

Lastly, I feel that property stocks holding high-ended property projects are likely to have good returns in 2011. Nonetheless, I will take this view with a pinch of salt, since I am not an expert in properties.

Book Review: The Age of the Infovore

Book Review: The Age of the Infovore

‘The Age of the Infovore’ is written by Tyler Cowen, an economics professor. The book is available in NLB.

This book is thought-provoking but frustrating to read. The book belongs to those categories of books that read like a boomerang. That is, the book does not conclude or drill down to a few points. Rather, it keeps on expanding your perspective. The book may be easier on the mind, if the author treats each chapter as separate pieces and not as pieces relating to autistic strengths.

Anyway, the interesting points:

a) Autism’s cognitive strengths include:

i) strong in ordering knowledge in preferred domains

ii) strong in observing small pieces of information in preferred domains

b) These strengths are relevant to our internet world, when we see that large amounts of information are being ordered and processed to meaningful bits. For example, our favourite bookmakrs, Google search, Facebook, Twitter etc.

c) When access is easy, we prefer the short, small version. When access is difficult, we prefer the extravagances and masterpieces. For instance, if we are going to travel long distances for something, that something have to be worth our travelling time and while. However, when access is easy, we want to try more new stuffs. To try more new stuff, the new stuffs have to be smaller, so that they can be accomplished with less time.

d) Education can be consumed online without face-to-face interaction. However, online education is not well-received. This is because we prefer to have face-to-face interaction (e.g. attend lectures, attend tutorials). Having face-to-face interaction and people around us may help us better focus and be more motivated to absorb the knowledge.

e) Sherlock Holmes seems to be an autistic.

f) There is neuro-diversity around. Hence different people may have different taste for art, music and different ways of perception.

g) A country with a culture that tends to obey rules and follow unspoken codes tends to be more successful economically.