Thursday, July 31, 2014

My Investment Record (11) - 31st July 2014

Market Overview

On my last post,  i mention what is probably the consensus view now, that BNM hike of OPR is a signal for the change of wind. Latest US GDP growth data (here) and FOMC meeting minutes (here) just confirm the view. Now left for guess will be the second question, when is the crash? 

My bet will be in 3 to 5 years, and it depends on how eager the central bank from both side (Malaysia and US), in cooling off the current market. It took at least three years for the sign of crash to be seen after US Fed raised policy rate starting June 2004. And we are still waiting for Fed to make its first move in raising the policy rate now, which will directly increase the borrowing costs and start slowing the economy (and housing market) down. 


Current Return and performance

The holding period return for KLCI in the past period (1st July 2014 - 31st July 2014) is -0.35% (with dividend included). Holding Period return for my portfolio, is 2.39%. Total holding period return for my portfolio since the inception is 23.90%annualized to be 11.93%this is the first time it passed KLCI return of 21.35(annualized, 10.62%). 

The reason for the over-performance can be mainly attributed to one stock. 
Msport  (5150), without any significance announcement that will impact the stock price, sudden buying interest sent its price jumped by about 20% in a single month. 

Trading Activities

i. Disposal of Tecnic (9741).  Sudden large buying interest sent the stock to its one year peak at RM 4.00. Where i took the opportunity to liquidate the stock for cash. 

ii. Addition of RHB Capital (1066). This could be one of the mistake. The buying decision was simply based on the news that CIMB, RHB and MBSB in talk of building a mega islamic bank. If they were to merged, under same P/B basis RHB shareholders will be the most likely benefactor among the threes. However, the price surge of RHB was short -lived, and it seems only a confirm deal with high valuation price could save the investment. 



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