A Mistake
Recently, I had bought JD.com, thinking that the price has fallen and the PE ratio is lower compared to other internet stocks
After building a significant stake, I found that the lower PE ratio is due to occurence of one-off earnings. This is my mistake that I did not read the earnings report in advance. (Such a novice mistake.) Nonetheless, I had subsequently sold all my stake at a loss (especially in the current down market for tech stocks.) So the lesson learnt here is that I should always review the company's earnings before investing.
Sticking to Value Stocks
Currently, I own Alibaba. My average price is around $228. So I had a loss of around 10%. I will hold on to this stock and see how it goes.
Meanwhile, I will not be buying any tech stocks, as I don't feel comfortable doing so. Maybe I am more of a low PE investor. I am more comfortable buying low PE stocks with some dividend, so that I can collect dividends while waiting for the market to re-rate the stock. If the stock is not re-rated at end of day, I am not likely to lose much, since the expectation is low.
My feel is that in the next 1-3 years, value stocks may outperform growth/tech stocks, especially since growth/tech stocks may be more affected by rising interest rates. Hence, I should not style drift into growth/tech stocks.
Number of Stock Holdings
I mentioned earlier that I am reducing the number of stocks I hold. Currently, I am holding 27 stocks, 8 fewer than in Mar 2021. The ideal number of stocks to hold may be 21 – 25 stocks. I had good returns during 2016-2017 and I held 21 stocks in end 2016 and 25 in end 2017.
|
|
Number
of Stocks |
|
At
end 2016 |
21 |
|
At
end 2020 |
39 |
|
At 5
Mar 2021 |
35 |
|
At 15
May 2021 |
27 |
Performance
My year-to-date returns as at 15 May 2021 is 14.0%. The returns have suffered a little from my mistake in JD.com and the drop in Singapore shares after the Phrase 2 (Heightened Alert) was announced yesterday.
Interestingly, more than half of my portfolio are HK-listed stocks. In end Dec 2020, Singapore-listed stocks are around half of my portfolio; now they are less than half. This could be because I find more stocks to buy in HK than in Singapore. And I have been taking profit on Singapore-listed stocks such as the bank shares. (I still own shares of Singapore banks but not as large as in end Dec 2020.)
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