Sunday, February 28, 2010

JUST ASK: 'Is it silly to buy and hold (instead of trading)?'

I have been asked to give my two cents at NextInsight's JUST ASK weekly series. Below is my reply to one of the reader's question:

JUST ASK: 'Is it silly to buy and hold (instead of trading)?'
Written by The NextInsight Team
Saturday, 27 February 2010

In this weekly series titled JUST ASK, we invite readers to send in questions on stock investing, and personal finance. We will ask an expert (or experts) to provide answers. Below is a question from a reader on a topic which must be playing on a lot of investors' minds. It is answered by ghchua, a value investor and a long-term investor who is well-known among some investing websites. His investment holding period is unusually long (for retail investors), which makes his views all the more intriguing. Read on!


Friday, February 26, 2010

My Investment Portfolio (February 2010)

This month is quite short actually due to the Chinese New Year holidays and also there is only 28 days. As a result, the stock market doesn't seem to go anywhere.

For my top 30 stock holdings, not much changes as basically most of the companies announced results that is within expectation. The activities is actually outside my top 30 list, as some of those mid cap stocks like Eng Kong, OSIM, Old Chang Kee etc moved up quite a few places. Hopefully, they will become one of my top 30 holdings one day.

Main cash inflow for my portfolio this month had been dividend from my REIT holdings near the end of this month. They had been re-invested back into the market via mid and small cap stocks, as value is now in this segment of the market as it can be seen that some of these companies actually announced results that are above expectations, with good dividend that comes along with it. For this month, I have bought New Toyo, Thai Village, Dynamic Colours, Colex, Casa Holdings, LHT Holdings, Advanced Holdings, AEI Corp and Innotek. I have also utilized my CPF-OA funds to add onto my existing unit trusts this month.

I have accepted the exit offer for my Giant Wireless Technology shares. I have also voted against the delisting resolution for my Full Apex shares via proxy, and the company managed to stay listed as minorities get together to throw away delisting offer, which doesn't seem fair in my opinion.

I have also participated in a few rights issues - Popular Holdings, ASJ Holdings, Juken Technology, TSH Corp, TEE International and UPP.

Next month, there will be some rights issues as usual for me to participate in and the main one will be Fraser Commercial Trust's Series A CPPU. I will also continue to buy mid/small cap value stocks from the market.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 26 February 2010)

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

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. Fortune REIT
2. Tan Chong International

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

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:


Thursday, February 18, 2010

Control System Analogy of My Investment Portfolio

Having written a piece on Stock Market vs Control System last time at http://ghchua.blogspot.com/2008/11/stock-market-vs-control-system.html, I was tempted to write another piece on control system analogy. So here it is.......

A few people asked me - Since you viewed the stock market as a control system (most possibly a closed loop one), could you gave an analogy of your investment portfolio using Control Engineering concepts as well? My answer is yes, since Control Engineering concepts are applicable in physical systems, including one's investment portfolio.

I view my investment portfolio as an open loop control system, which means no feedback as compared to the stock market. If you view my portfolio as a system itself, then the input to the system would be stock market volatility and the output is portfolio volatility. By observing the output of my portfolio with respect to the input, I can do some adjustment to system by using compensation. Which is essentially what all control system strive to do - To make it stable by applying compensation.

So when my portfolio output is more volatile than the stock market, I added compensation to my system by introducing more value stocks into my portfolio. If it is less volatile than the stock market, then I may be tempted to add some growth stocks. Essentially, what I am trying to do is not to achieve a almost risk-free portfolio (i.e. low risk, high return), but rather making the system stable and not to oscillate into an unstable state which can cause chaos. I am taking risk by holding my portfolio throughout market cycles, but I am not taking high risk by doing consistent and regular investment back into the portfolio throughout any market condition.

Since Engineering is Applied Science, we are not looking at creating a perfect system (i.e. Making money in the stock market all the time). Rather, we strive to solve problems and make things work. There might be some imperfection here and there, but it is ok to me as long as it works most of the time.



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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