Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.

Monday, July 20, 2015

Review on 1H2015 sell transaction

Everyone also wishes to buy low and sell high. I mean everyone. But that's not the case in reality. That may be someone able to do it, but I think the consistency is not there. 

I'm am not a very long term investor. I will sell it if I think the price meet my target or I think I have better return elsewhere.

So, half year gone and I think it's better for me to review my sell transactions for the past few months. 

I sold it at RM2.7x with around 50% gain in April. Although I knew the drop in oil price and currency exchange are all working in favour for the group as well as its own organic growth and new product launching, but I think its price already reflected that as well as it was trading at a PE of around 18 that time. So, I made a sell call. The company continue to perform well and so its share price till trading at RM3.4x currently. Perhaps I should use forward PE to evaluate this kind of growth stock next time. 

ABRIC was a asset play for me due to its high net cash per share. I sold it around RM0.52 with around 25% gain in April too. Patience always the key when investing based on asset as you have no idea when the market will value its assets. The price once shot up to around 60 cents before retraced back to current price. I'm quite satisfied with this transaction as asset play always provides certain margin of safety and its concept is easy to understand. Just sometimes, you may need to park your capital there for a while.  

I sold it at a loss of around 10% in April too. I bought it at a rush and at a high price in the beginning as well as its mother share. I thought the corporate transfer will take place within 6 months, little bit I know it can be taken for so long. And at that point, I was running out of capital so I decided to sell it as I did not want to place too much capital on the same stocks (mother & son) although the warrant will provide better gain in percentage and loss also in opposite. I only left the mother share and used the proceed generated and converted into HKD to invest in HK stocks. 

I sold the counter around May at RM1.4x with a gain of around 70%. The counter once shot up to RM1.8x plus as well as being dumped until RM0.8 thereafter. The counter still has some growth prospect, but the valuation is quite high and there is some sort of frying element on it. So, I decided to say good bye to him. 

I made a loss close to 25% in this short trade. I bought its warrant & converted them into mother share as the share price of the mother share up a lot while the warrant did not move very much. The substantial shareholders, Ong Kah Hoe kept increasing his ownership in the group and the group diversified into construction business look like something good going to happen. So, I bought in. It turned out to be a bad trade as the share price dropped a lot after 2 weeks of conversion. This really taught me a lesson, never touch warrant that trade at a big discount to his mother share again. Fishy fishy. 

I cut half of my holdings on the stock at around 150% gain, so the remaining will be considered as free shares. This trade contributed significantly to my overall realized gains this year. It's share price is quite volatile but I think its coming half year result will be quite good. So, I will just keep it for the time being. 

So, that's for this half year. 

Some losses, some gains. 

When looking back now, there are some stocks trading higher after I sold. Some trading lower currently. 

I believe buying low solves the problem of selling as you still earn in the end, it's just the matter of how much you earn. So, margin of safety is important. Very important indeed.

I still learning day by day. Hopefully, can minimize my mistakes moving forward. 


What do you think about this post? Looking forward from your comments :)