Saturday, November 29, 2008

My Investment Portfolio (November 2008)

This month had not been as volatile as last month, but nevertheless, stock markets around the world still experienced higher volatility than normal. For my portfolio, two main corporate actions had been undertaken successfully. Datacraft Asia had been taken private successfully and RTO of Eng Wah Organization had been approved. Also, distributions from various REITs and shipping trusts had been welcome to me as I continue to re-invest those distributions back into the market.

New addition in my top 30 holdings this month include MTQ Corp, which I have added a bit lately on price weakness. MTQ is an interesting company which offers Engineering services to the oil and gas industry. It had a long profitable track record, good management and excellent cash flow. A re-entry of Sing Investment and Finance into my top 30 holdings is because of the presence of a last traded price for this thinly traded company. But I still maintain my preference of finance companies over banks as it is much easier to analyze their accounts.

As we are approaching year end, markets seem to have lower volatility as participants might be preparing to go on holidays instead of trading the stock market. Having said that, there is still opportunity to buy some stocks in December if one is patient enough. I will definitely be making some purchases in December and intend to end the year with some "Christmas shopping" in the stock market. :)

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 30 November

Top 30 Holdings (Sing$ Denominated shares)
1. Raffles Education Corp
2. SGX
3. F&N
4. Hersing
5. Noble Group
7. ComfortDelgro
8. Jardine C&C
9. SembCorp Marine
10. Hong Leong Finance
11. CapitaMall Trust
12. Parkway Holdings
13. Straits Trading
14. Singapore Food Industries
15. SBS Transit
16. SMRT
17. Cosco Corp
18. Viz Branz
19. Cerebos Pacific
20. CapitaLand
21. Food Empire
22. SingTel
23. Ascendas India Trust
24. Wheelock Properties
25. MTQ Corp
26. Keppel Corp
27. CitySpring Intrastructure Trust
28. Sing Investment and Finance
29. SPH
30. ST Engineering

Top 5 Holdings (US$ Denominated shares)

1. Jardine Strategic
2. Dairy Farm
3. Hong Kong Land
4. Jardine Matheson
5. Mandarin Oriental

Top Holdings (HK$ Denominated shares)
1. Tan Chong International
2. Fortune REIT

Top Holding (Aust$ Denominated shares)
1. AV Jennings

Top 5 Holdings (CPF OA investment)
2. CapitaMall Trust
3. Keppel Corp
5. Eng Wah Organization

My Hong Kong Stock Portfolio (listed on SEHK)
1. Peace Mark Holdings

My Unlisted Company Portfolio
1. JK Tech Investment
2. Automated Touchstone Machines Ltd
3. Iconic Global Limited
4. Greatronic Limited

My Unit Trust Portfolio:


Saturday, November 08, 2008

Stock Market vs Control System

As an Engineer by training, I like to analyze systems, especially Control system. There are some similar characteristics and differences between a typical control system and stock market.

1. Both response to inputs to produce an output response. A typical control system will react to changes in input to produce an output response. Similarly, stock markets will react from external factors (i.e. inputs) to produce a response (i.e. market can move up, down or range).

2. Both can be compensated. A typical control system can be compensated if the output is unstable. Similarly, the stock market can be "compensated" with some good news if there are bad news all around which causes markets to drop.

3. Control system can be unstable. Stock markets can also be unstable, as panic selling can causes all methods of analysis (fundamental, technical etc) to be thrown out of window.

4. Control system can reach steady state. Similarly, markets can reach "steady state" if it moves out of its unstable state. Compensation can also help the markets to move out of unstable state.

1. Control system can be modelled easily but stock markets cannot. Because control system are feedback (i.e. closed loop) or open loop system, it can be modelled. Stock market is an adoptive system but not exactly a closed loop system and therefore it is difficult (if not impossible) to model such a system. Because stock markets are difficult to model, they are not easily "controlled" and therefore hard to do exact compensation to get the desired output. That makes "guessing" short term market movements difficult.

2. Control system can be controlled by using compensator and controllers. One can minimize error in design by having system modelling and deciding on the controllers/compensator used. Stock markets are unpredictable in short term. It is difficult to do exact compensation to get the desired output effect. In fact, it can even make things worse if the wrong compensator is used. Even if the right compensator is used, the stock market might not produce the desired response.

3. If we design a control system with all the requirements and conditions met, systems will still fail due to unforseen circumstances. As for the stock market, there are too many unforseen circumstances which makes hindsight investing the only sure-win "system design".



A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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