Christmas Tree Lessons

As the festive season is near, I took out sparkling candle tea lights that had the shapes of ice crystals to setup as a Christmas Tree.  I did it last year and this year the same as well.  So what's the difference?  Well, the only difference from last year is the position of blu tacks.  I used to stick them at the base of the ice crystals and I found it to be ineffective as the ice crystals kept falling almost once a week.  Then, this time round, I decided to do it differently.  Applying a more innovative idea which was to paste blu tacks on the edge of the ice crystals! Yes, it did work and hold firmly to the wall.  I was happy for a while and then I realized that I had to mould small sizes of blu tacks of 9 edges of 40 ice crystals!!!!  T_T.  Effort was no joke and it took me about 2 hours to complete.  As I was moulding and pasting the adhesive, I reflected my investment since mid-year 2013, and I thought that my investment skills and strategies are still at the infant stage and I believe more to go.  I attribute this to my current portfolio position.  Approximately 10% of my portfolio has on Marco Polo Marine (MPM) and Yongnam (YNM).  Lately, both have generated negative capital gains of approximately 35% and 26% for each respectively due to bad business environment such as increase in competition for projects and as well as drastic drop in oil prices.  The losses are quite substantial and I took those positions when I followed blindly without taking initiatives in looking into their annual reports; it's akin herding effect!  I can only blame myself and this aspect is the very emotional aspect of me which I hate myself.  I wanted to document this so that when I reflect for my other acquisition of equities; was the entire thinking process more like a impulse buying or was it really an in-depth analysis.  The losses created some false hope that the prices will rebound again.  However, the other aspect of me questioned myself fundamentally whether the company can sustain in the next 5 years, and it is time to go back to their annual reports for some answers.  In terms of sustainability of these two firms in the next 5 years is possible because key management are still in place.  This forms the qualitative assessment.  Perhaps, for the next few days, I might want to re-look at these two areas again before 2014 ends.  At least, this is something I can answer to myself and perhaps put some closure to it.  My research should bear fruits just like I put in effort to build this X'mas Tree.

Merry X'mas and Stay Healthy, Everyone!  Health is Wealth! =)

My First Few Entries

2014-12-13

Learnt that to make good for investment, I must learn to create my own portfolio and as well as creating strategies that suit me.  In additional, I need to know what is the structured methodology in assessing stocks.  I realised that I wasn’t able to piece the pictures together.  For instance, I know how to key in figures in the spreadsheet in finding the ratios.  Towards a certain extent, I know how to interpret each of them independently.  However, I am not good at dealing with other information such as the quality assessment of the auditors, who are the substantial shareholders, etc.  So I will need to beef up in this area; correlating information to make a better evaluation of the company.

I lost quite substantial especially for Marco Polo Marine (MPM) and Yongnam (YNM).  They stayed flat.  I think I should go back to the fundamentals to look for clues again.  Not so sure if the prices will ever rebound.  Speaking of that, what is the exit strategy?  Based on 5% increase or 10% increase???  Maybe I should start with 50 trades of 5% increase.  This might help me to boost my level of confidence.  

Another area of improvement is the technical analysis.  So far, I can understand the use of MACD and its trigger signal to determine whether to sell or to buy.  Currently, both MPM and YNM are still in the region whereby the trigger signal line is above MACD; this calls for a short.  Might need to wait patiently for the time to come.

2014-12-15

Traded using MACD for Breadtalk.  Realised that the base period is important.  This is because based on “YTD”, MACD just crossed the Trigger Line but then when zoomed into per daily basis, Trigger Line is above MACD; triggering for a short.  Since, my entry analysis was based on “YTD”.  Then I should only start to sell when Trigger Line is above MACD.  And also, one of my criteria is that should the price hit 10% lower than my buying price which is SGD1.375.  I will initiate a selling.  Lesson learnt:  Always allow some buffer to analyse the base period.

2014-12-18

TA First Step.  Breadtalk’s share yesterday (2014-12-17) dropped to SGD1.38 which is very close to my selling price.  I was about to trigger to sell off but the last done price at 9.13 am is SGD1.39.  I’m not very sure if the price would go up but based on the MACD-Trigger-Line methodology, it is still a good opportunity to buy.  Will continue to hold it till it crosses SGD1.375.

CFA Information Session.  Likewise, I also attended a CFA Information Session but it was catered for students who are intending to clear CFA Levels 2 and 3.  So, I did miss the previous session which is meant for Level 1 students.  But it was ok, found the session pretty interesting especially on the equity investment.  In this topic, lecturer shared on the theory for the three different models of capital pricing which are:

1. Capital Asset Pricing Model (CAPM)
2. Fama and French Three Factor Model
3. Build-Up Method.

Quite interesting to see how these models are used by research analyst in determining the expected returns from the portfolio.  At that juncture, I was not very sure if I’m going to take up CFA as I have attended Session 1.  Hopefully, they will offer Session 1 in early 2015 so that I can decide if I would want to take up CFA.  But the reason to take up CFA is still unfounded.  I am not so sure I take it up is it because I want to switch to financial career or is it to enhance my investment knowledge.  I can only think that the real benefit is that I have the CFA certificate and I think it can help me in person to better evaluate on companies annual reports which I have mentioned in my post on 2014-12-13.  But as to whether to switch to a financial career, I see that I have to start from entry level and that would mean a lower salary; would that be acceptable for me???