My Investment Record (20) - 1st May 2015

Market Overview

US 1st Quarter GDP data came out surprisingly weak with growth of 0.2%, 

Fed is holding its move on next rate hike, consensus now looking at the earliest hike in september, 

Market become nervous, 

KLCI pare its early gain in the month and end up with 12 points lower than opening of the month (1818.27 pts currently). 

And here the theory,

A meltdown of the market usually triggered by sheep herd behaviour, where exiting of one group of investors follow by another. 

In Malaysia case, it will most likely be foreign investors who sell off first, then local retail investors who under margin call, and finally the remaining local retail investors. Institutional investors (like EPF, ASNB, Public mutual) etc seldom sell off as they investing strategy is to hold for long term. And the institutional investor often become key stopper of the fall/crash. 

And when market become sentimental, anything could happen and it will be likely those who ride the first wave (whether selling from a peak or buying from a trough) will gain in this cyclical market condition. My prediction is KLCI will remain cyclical in current level at least until Q2 economy data is out, if the outlook is positive only then a move to break 1900 pts become possible. 

Current Return and performance

The estimated holding period return for KLCI in the past period (1st April 2015 - 30 April 2015) is -0.42% (with dividend included). Holding Period return for my portfolio, is 1.09%. Total holding period return for my portfolio since the inception is11.22%, annualized to be 4.07%, this is far lagged behind KLCI total return of 20.76% (annualized, 7.33%) and just about the same as return from Fixed Deposit according to current market rate.

Trading Activities

1. Disposal of  PohKong (5080), When i first start my investment portfolio, i made a few mistakes which resulted in poor performance of my portfolio compared to KLCI, This include, ignore how the huge inventory level (even the inventory is ready to sell) can influence the performance of particular company (in this case, gold inventory to PohKong and Tomei), ignore how the controlling stake holders can  act in the interest of its own while sacrificing the interest of minority shareholder (PohKong, few chinese stocks). The only chance to correct those mistakes is when the shareprice rise according to tide. Which i did for Poh Kong recently.  

2. Disposal of  Public Bank (1295), Public bank is a good stock that seldom disappointing its shareholder,  But viewing its current share price level and in anticipating of upcoming volatile market condition,  partial disposal of it is one of my strategic move to accumulate some cash and prepare for any short term slump in share price. The strategy might or might not paying out. 

My Investment Record (19) - 31st March 2015

Market Overview

Last month, KLCI declined initially by 40 points into 1778.16 at 11th March, before slowly climbing back to 1830.78 level, 10 point higher than previous month closing. I believe for the next few months KLCI will probably trading around current level, until the effect of GST to Malaysia economy and corporate earning become clear. 

However, oversupply in crude oil market exemplified by the agreement of Iran nuclear deal might caused a burst in US shale oil & gas sector (see here). On the other hand, China is showing every signs of economy slow down (see here, here), the spread over effects to Malaysia economy might cast a shadow to future of KLCI index. 


Current Return and performance

The estimated holding period return for KLCI in the past period (1st March 2015 - 31st March 2015) is 0.79% (with dividend included). Holding Period return for my portfolio, is -1.45%. Total holding period return for my portfolio since the inception is10.02%, annualized to be 3.77%, this is far lagged behind KLCI total return of 21.27% (annualized, 7.75%) and just about the same as return from Fixed Deposit according to current market rate.

Trading Activities

1. Addition of MNRB (6459), although recent quarter results showing a loss for the insurance company, overall i still believe in the long run, insurance company like MNRB will remain profitable and produce handsome return. With share price cost only 2/3 of the book value per share, MNRB looks cheap for me. 

2. Addition of Symphony Life (1538), its unbilled sales increased significantly from 196 million at FY 2015 Q2  to 469 million at FY 2015 Q3, sign indicating that the company still has business ahead. Thus with projected P/E less than 5, and Price to book value around 0.4, the company looks attractive to me. 


Others Investment Notes

When tracking their performance with the market, others often didn't include the fact that stocks in KLCI index do pay dividend. Thus, they will often be able to show their results to be superior/close to the market performance. However, as the average dividend yield of KLCI stocks will be about 3.2%, this will often have a significant impact on whether your portfolio is outperform/underperform compared to the market. 

Taking my performance as example, if we take the dividend component out, KLCI annualized return will be close to 4.5% only, which is still superior, but not far away from my annualized return of about 3.8%.  

Holding high cash position in the long run when stock market is expected to go up at rate higher than Fixed Deposit's rate will hurt one's performance. This can be shown by ICAPITAL's last 4 years (including current FY) results.