Wednesday, March 31, 2010

My Investment Portfolio (March 2010)

As I was writing this blog entry, I saw an annual report lying in front of me on a stack of them which I haven't gone through yet. Entitled "Great Expectations" from the latest Great Eastern Holdings annual report, it certainly sets me thinking for a while. I mean, everyone have great expectations of their investment portfolio, themselves, the people around them, their colleagues at work etc. But sometimes, we must take a step back to take stock of what we have currently, before demanding great expectations. Because if we set too high an expectation, we might be set for more disappointments. Why am I saying these in this month's portfolio review writeup? Because when markets goes up, many investors have higher expectations of return and demanded more from their investment. In order to do that, they started to take more risk, which actually should be the other way round. Which is why I have been adopting a more defensive approach in my stock investment portfolio recently as I felt that value investing is more safer in the current market.

For my top 30 stock holdings, there are two new entries this month - Sarin Technologies and OSIM International. I had been a long term shareholder in both companies, and their recent price appreciation meant that they are in my top 30 list this month. Despite its setback in recent years, I have remained faithful with OSIM International all these years and I hope that it will pay off eventually.

China Printing & Dyeing Holdings and FerroChina Limited are the new entries in my unlisted companies list. They had been delisted without an exit offer. Diversification saves me again as their allocation in my portfolio is quite insignificant. As they said, "You win some and you lose some".

For this month, I accepted two takeover offers - Hongguo International and China Video. Their proceeds had been re-invested back into my portfolio. I have participated in Pacific Andes, China Fishery and Cambridge scrip dividend scheme. I have also converted my Challenger, Etika and Qian Hu company warrants to shares and participated in Asia Water's NRO.

I have bought the following companies from the open market this month - New Toyo, LHT Holdings, Lee Kim Tah, Food Junction, Haw Par, Apex-Pal, CapitaMalls Asia, PSC Corp, Tye Soon, Singapura Finance, GK Goh Holdings, SHC Capital, Hock Lian Seng, CFM Holdings and General Magnetics.

Next month, there will not be much dividend payout for me to re-invest back to the market. Nevertheless, I will continue to position my portfolio defensively going forward and search for more value mid/small cap stocks to invest.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 March 2010)

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

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
4. China Printing & Dyeing Holdings
5. FerroChina Limited

My Unit Trust Portfolio:


Thursday, March 11, 2010

Agile Software Development Approach to Investment Portfolio Management

Most people in the software development field would have heard or used Agile Methdology, which is basically an iterative and incremental framework for software development with envolving requirements. Fans of Agile would love it so much that the traditional waterfall method is often cited as uneffective. I disagree with this view but that is left for another day as this is an investment blog.

However, basically what I am going to share here is that Agile methdology can be implemented for investment portfolio management, especially when using the concept of buy and hold strategy and adding new funds into the portfolio with limited funds every month. There are few reasons to this. Agile is an interative process and portfolio management is also an iterative process. Attractiveness of a stock can change and one's investment portfolio needs to be re-visited regularly too. One's capital to invest every month can also change, and if one subscribes to the buy and hold strategy with RSP, they are doing incremental additions to the portfolio every month. So, in a sense, Agile fits well into buy and hold strategy.

In Agile, we have a backlog which consists of a series of stories. Similarly, we have a list of selected stories in the backlog for investment portfolio management. These stories are changing every now and then in the backlog, based on what you have in your shortlist. The stories in the backlog are ranked, which means the first one on the list is the most attractive in your view, and the next one the second most attractive and so on. Basically, one should have already done the necessary fundamental analysis and diversification consideration on these stocks before you rank them in stories. The stories can be for example: "Buy 1 lot of SIA", "Buy 2 lots of Colex", "Buy 1 lot of Innotek" etc.

In each sprint/iteration which lasts for example, one month, an investor will decide on how much velocity (i.e. money) that he wants to invest for that month. After that, he will do an estimation of the stories that he could fit in for this sprint and draw them out from the backlog, starting from the highest ranked one. Let's say your velocity for this month is $1000, but Story 1st in the backlog is "Buy 1 lot of SIA". Obviously, your $1000 is not enough for Story 1st although SIA is the most attractive stock at this moment, based on your FA. Therefore, you give Story 1st a miss and move on to the next story, i.e. "Buy 2 lots of Colex". The process goes on until all your velocity (i.e. $1000) had been used up. So, there it is, you have done your planning on what to invest for your $1000 this month. Repeat the process for the next sprint. Remember to update your backlog regularly too.

The above is just one small example on how you could utilize Agile for investment portfolio management. Practically, there can be several variations like shortening your sprint cycle to let's say two weeks to cater to a portfolio which can be more responsive. One could also set up a few scrum teams - One for Cash Investment Portfolio, another one for CPF Investment Portfolio, another one for SRS Investment Portfolio etc. Each of these scrum teams should consists of different backlogs.

Eventually, it is up to the investor to define all these, and a well-groomed backlog of stories is critical for sucessful implementation. Which means, your FA skills is still the most critical part. Agile only helps in planning what stories to commit to complete every month based on your available velocity, but it doesn't help you to select your stocks.

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Saturday, March 06, 2010

JUST ASK: 'Why doesn't ghchua track his investment returns?'

JUST ASK: 'Why doesn't ghchua track his investment returns?'
Written by The NextInsight Team
Saturday, 06 March 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 set of questions from a reader after we published last Saturday's topic "Is it silly to just buy and hold, instead of trading?"

The reader was intrigued about some investment details of ghchua, who is well-known among some investing websites. 'ghchua's' investment holding period is unusually long (for retail investors).



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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