Last month penny stocks had been going through crazy up and down moment for KLSE. Besides that, global general market remain flat with focus still on two geopolitic clash area: Ukraine where Russia is clashing with the west, and Middle East where Israel-Hamas and ISIS is destabilizing the region. Both events if break out uncontrolled, could have devastating impact on Oil and Gas prices, thus negatively impact the world economy.
For the longer term economic outlook, focus will still be on US. QE exit timeline and China economic performance data. And current outlook doesn't look encouraging. This could be the reason why, despite stronger than expected Malaysia economy performance (source), KLCI and FBMT100 still retreating from historical height in August.
Current Return and performance
The estimated holding period return for KLCI in the past period (1st August 2014 - 31st August 2014) is -0.02% (with dividend included). Holding Period return for my portfolio, is 0.13%. Total holding period return for my portfolio since the inception is 24.06%, annualized to be 11.38%, this is the second time it passed KLCI total return of 21.32% (annualized, 10.15%).
Trading Activities
i. Addition of Public Bank (1295), sudden selling activities after the ex-dividend date sent public bank's price into 3 months low of below RM 19, which i took the opportunity to add-on.
ii. Disposal of RHB Cap (1066), sudden buying interests of RHB cap sent its price above RM9.5 for a short moment, which i took the chance to liquidate some of the position. Recent 1H earnings for RHB looks encouraging, but the merger deal with CIMB and MESB is the only reason that can support it at higher price. While for now, since 50 days had passed, it seemed the three parties made little progress yet.
iii. Disposal of CIMB (1023), there is no particular strong reason for the sale, I just want to increase my cash holdings while realizing profits from some stocks which i view little upside potential at current moment.
Reflection After 2 Years of Investing
i. KLCI still offer relatively better return compared to bonds/FD/commodities, probably matched by properties only.
ii. In order to at least track/beat the market, one need to learn to
- cautiously pick your stock
- be patient, avoid trading too often where the trading cost can easily eat-up your profit. All keep cash to wait for opportunity
- buy and hold long.
iii. This is usually easily say than done. For example, for the first 8 stocks that i picked (see here), only one (YOCB) will be the stock i currently like to hold. Three of them i luckily exit without loss. Three of them currently see no sign of recovering the loss, As for now, 9/14 stocks or 80% of my shares holding will be the stocks that i currently like to keep. The aim is to improve the ratios by carefully picking new stocks to add.
iv. One of the notable missed trade opportunities include, Coastal (5071), where the prices had gone up by 2.5X in two years time. Had i heavily concentrated my initial investment into YOCB and Coastal, i could have earned more than RM50K. This shown getting rich fast in stock market is possible. Unfortunately with general market at current price level, good opportunities becoming increasingly rare to find.
