Tuesday, April 21, 2015

[SGX Portfolio] 30% in 1 month? GRAB IT AND RUN!


Almost exactly 1 month ago (and 1 day), I took the dumpster dive and jumped into Civmec to mop up the stragglers after it has fallen 50%.

Today I sold all my (tiny) holdings which I bought at $0.40 for $0.52, which represents a 30% gain.

I am a firm believer that the absolute amount doesn't matter and my tiny portfolio should be run as if it was a million dollar one. The only question is, is the effort worth the reward? I think it is, because I am still learning. So the percentage gain is what that matters to me, not the dollar amount.

I could be a pompous ass and say, "Ooo, look at me, I pocketed 21 years of income!", but I think we all know what sort of trade this was. It was an opportunistic dumpster dive. Very much like Valuetronics. However, I am much less confident of Civmec's quality, which is why I am still holding onto Valuetronics, which has run up a lot more than a mere 30%, while I am letting Civmec go.

This clearly isn't a yield stock, it only has 3 years of dividend history and a paltry current yield of 1.4%.

Therefore, this is a stock for capital gains. Personally, I like to use the yardstick of 8% returns per annum if I'm dealing with a stock that I know no special information about (which I have no clue for most of my stocks anyway), the capital gains from just 1 month is a very healthy and decent 30% which comes to about 3+ years of capital gains with my expectations or to slightly over 2 years of gains for people which much higher expectations (looking for over 10% a year).

Believe me when I say that I do want to be a long term investor. However, when I see such gains on the table already, gains that I was only expecting a few years down the road, I take it. In that sense, perhaps I can never get one of those mythical "multi-bagger" stocks unless I hold it for many years, like 9 or more (since for 100% capital gains at 8% a year, it'll take 9 years).

And honestly, I am okay with that. I don't need to have tons of multi-baggers to have a good portfolio. That just isn't my style.

My current portfolio is such that I have a certain heavy bias on a few stocks, with just 6 stocks making up almost 50% of my portfolio while 20 others make up the rest. However, this isn't how I would like it to be like. I would like to change this if I could.

Unlike most of the people I've seen running tight ship portfolios, I just find it too scary that my eagle eye focus and analysis on those companies might be wrong and that it blows up in my face.

Personally, I would love for my portfolio to be made up of maybe 50 or more stocks and they all only hold a small percentage each. I don't believe that I am smart enough or have the time to closely watch a handful of stocks. I rather watch the big picture and don't look at individual names too closely. Therefore, snagging a multi-bagger only affects me a little. I want to have a strong all-rounded army throughout all the ranks, not a few superhero generals to do all the fighting.

I am loosening my reigns looking for the perfect stock. It doesn't exist. I rather have a big group of almost perfect stocks, than a small group of perfect ones paid at perfect price, that could turn imperfect anytime.

2 comments:

  1. That's some pretty crazy gains there!!!

    Congrats.

    ReplyDelete
    Replies
    1. Thanks B, I wasn't expecting such gains in such a short period of time! I've been in a very sell mood lately, rather than a buying one!

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