Monday, August 31, 2009

Where is the Value?

A friend had commented recently to me that STI had moved up too fast during this short period of time and therefore, he decided to get out of the market as blue chips are now fully valued. According to him, he does not wish to consider mid/small cap stocks as they are risky.

I did try to change his way of thinking but he decided not to heed my advice.

The above is just one extreme. The other extreme is a group of punters who buy/sell small/mid cap stocks everyday for price movements.

I do not wish to be in any of the above two groups of extreme investors.

Of course, I agreed with my friend that STI is not undervalued anymore. The easy money had already been made. But that doesn't mean that one should not buy any more stocks. The value is now in the mid/small cap segment of the market, and that is where I had been adding recently.

As a value investor, your scope of knowledge in the market should not be restricted to only big cap stocks. You should have a wide range of companies under your radar, which also include many small/mid cap names. Companies in the small/mid cap segment are not necessary risky stocks, it really depends on your margin of safety when you purchased it and also using the diversification strategy to reduce single company risk at any one time.

Make no mistake. The value is now in the small/mid cap segment of the market. Pick the correct stocks and you should be rewarded if you are patient enough for Mr Market to re-rate them. Meanwhile, you will be rewarded with dividend from your holdings.


My Investment Portfolio (August 2009)

STI ended the month on a weak note, but still managed to remain around 2600 points. The highlight of the month is definitely the recovery in mid and small cap segment of the market, as big caps appeared fairly valued at this moment.

There is a new name in my top 30 portfolio list this month - CDL H-Trust. Among the REITs, this trust is one of those with low gearing and a strong portfolio of hotels. It should benefit if the economy continues to recover. Tiong Woon Corporation and VICOM returned to my top 30 list this month mainly due to share price recovery.

I have particpated in a few rights issues this month, including Dayen Enviornmental, Frasers Commercial Trust, LifeBrandz, PSL Holdings and StarHill Global REIT. I have also accepted the delisting offer for Man Wah Holdings and the takeover offer from PetroChina for SPC. I have also bought a few small cap names this month, as the market begins to re-rate all these companies.

Next month, I will continue to participate in rights issues. The big one include CitySpring Infrastructure Trust. Therefore, I shall reserve some fund for these upcoming rights issues. Also, I shall seek to buy more attractive value stocks in the mid/small cap segment of the market as opportunities present themselves.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 August 2009)

Top 30 Holdings (Sing$ Denominated shares)
1. SGX
2. Noble Group
3. Raffles Education Corp
4. Jardine C&C
6. CapitaMall Trust
7. F&N
8. SembCorp Marine
9. Bukit Sembawang Estates
10. CapitaLand
11. Rotary Engineering
12. ComfortDelgro
13. Parkway Holdings
14. KepLand
15. Hong Leong Finance
16. Cosco Corp
17. Wheelock Properties
18. Pacific Andes
19. Low Keng Huat
20. Ascendas India Trust
21. OCBC Bank
22. CDL H-Trust
23. Keppel Corp
24. Kingsmen Creatives
25. CapitaCommercial Trust
26. Tiong Woon Corporation
27. SingTel
28. WBL Corp
29. KS Energy

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. AustLand PG
2. AV Jennings

Top 5 Holdings (CPF OA investment)
1. Keppel Corp
2. Streettracks STI ETF
3. CapitaMall Trust
5. SingTel

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

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

My Unit Trust Portfolio:



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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