牛市熊市三步曲, My Final Portfolio Optimization

 Captured from 牛市熊市三步曲.
http://money.softbath.net/stock/articles/bear-bull.htm

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牛市第二期
　　市場中開始受利好消息刺激，部份股票股價開始慢慢持續或反覆向上，投資者也漸漸開始對經濟前境有所期待，雖然開始時市場成交沒有明顯的熱鬧，但伴隨各大公司公佈的業績轉好令投資者回復信心而開始入市慢慢變得熱鬧，對後市更開始樂觀。

牛市第三期
　　到達這個時期，經濟環境已開始起飛，投資市場也到達非常熱鬧的階段，就好像2006年香港股票市場般幾乎全民階股、新股必賺般熱鬧雀躍，到這時候，市場也會對各種消息變得非常敏感或，一點消息也會造成炒作活動，部份非專業投資者更可能會跟隨各種消息而盲目追捧參與投資炒作活動令市場波動，值得注意是經濟環境將由好漸漸轉壞時由於不易察覺可能對投資者做成損失。

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熊市第一期
　　熊市的開始往往在牛市第三期經濟最熱鬧的期間默默開始，在牛市第三期間，各種經濟指數和部份股票股價可能都已沖跛新高，各投資者也沉迷在賺錢的貪念中，雖然市場看來仍然一片熱鬧，但已存在過熱的危險性，熊市初來臨時一般並不明顯，就是因為並不明顯的關係，市場中的炒作仍然活躍，只是開始有少許反幅波動，能在這時放出手上股票還是可以有利可圖，當部份投資者已察覺熊市來到時，開始相斷沽出股票，市場將一步一步下跌，如投資者已明顯地察覺熊市己來到而加快沽出手中股票，更可能做成恐慌性拋售，這一擊的力量可令市場迅速大幅下跌而造成嚴重損失，而且事前不易發覺。

A few activities i had made in last few days to fine tune my portfolio based on current status (牛市第三期）. Did realize that in pass 1 month or 2, a lot of cash rich counter had move up in spike says 20 - 50%, this told me that the last phase of bull market is almost here, once all these cash rich counters had raised, the final group of penny lousy counter will be the last push for the bull. I really don't like to put a lot of capital in the penny lousy stock, so i have to catch up with the last round of raise of cash rich company, once take profit from there then i will start to back off liao!! this is my target, help me to achieve it and not been over taken by the greedy inside me :P

Alright, the changes that i had made in pass 1 week is to focus on shifted some of my counter to those under estimate counter although it is very hard to find one today. firstly i have to SWAP with my current counter, FIAMMA and LATITUD had been taken off from my portfolio with 2 reasons:

1. Both had came down 3% (my stop loss point) from my enter price, so to follow rules, i will need to sale it. (FIAMMA - enter 2.12, now 2.07, LATITUD - enter 3.09, now 2.99).

2. Lesser and lesser momentum to move up after 1 round of increase in share price. Its unlike UliCorp, this 2 counter seems to have a hard time to move up further and if look at the future on Latitud, the shutdown in Vietnam will definitely impact her revenue for upcoming quarter, thus, before it can recover, the phase 3 bull should be passed. where else for FIAMMA, the reason i bot in is his stable business (home use electric equit and property), but looking at the market, targeting for stable business just seem not right for me if i want to increase my gain in stock market now.

In fact, both are good counters , just i decided to invest together with the Mr market. By selling of this 2 counters, i swap to MARCO and WEIDA.

Why MARCO?

1. Cash rich "2013年财报注 明公司拥有4千1百50万的现金"
2. High DY.
3. The Business: do you use Casio product??
4. The share price is not really moving yet
5. PE ~12. not so attractive but still fair.
6. Top 30 share holders holds about 54% of total share.

http://klse.i3investor.com/blogs/kianweiaritcles/55457.jsp

Why WEIDA?

1. Cash rich company after sold off the plantation business
2. The share price is not really moving yet
3. low PE and under value.

A lot of discussion on this counter at I3investors can have a look on this guys.
http://klse.i3investor.com/servlets/stk/nb/7111.jsp

below is the latest portfolio with the % of my capital:

Local:
18% WEIDA @ 1.86 (cash rich, super under value and not yet move at the day i buy)
10% MACRO @ 0.17 (cash rich, not yet move with high DY)
15% MUDAJAYA @ 2.58 (close to 25 week low, profit coming on it way)
19% SUPERMX @ 2.17 (close to 52 wk low, recovered from production issue, increase profit)

Foreign:
24% CHINAPOWR @ 2.9 HKD (Blue Chip, main power supply in China)

will the 4 local counter to be the last piece of 遗珠? lets see. From now on, i will stop any buy in activities for other counter, the only thing that i might do is to swap my CHINAPOWER/MARCO to WEIDA, out of these counter WEIDA, might be the safest bet :), bottom line! make profit! but how to decide when to run?? hahahaha... there will be some way to know that and i will try to provide it in this round of market.

Pray for MH17....

It is shocking me this morning when saw a lot of new of MAS flight MH17 was borough down by missile over Eastern of Ukraine .. what a sad thing of this! what had went wrong? so many flight moving through that area everyday but why only MAS so bad luck??

Total of 295 peoples had loss their life in this incident, it is not so easy for me to accept that 2 plane incident on MAS in 4 months...

RIP MH17...

Supermax @ 2.16

Enter Supermax @ 2.16

 

I had been eying the glove counter for few weeks, comparing few glove makers, below is some of my though on timing:

1. Supermax is having the lowest PE at this moment with about 11, TG is running around 15 and KOSSAN is 18.

2. TG and KOSSAN start to move a bit already and left only Supermax. Yesterday it closes at flat but there is a spike up to 2.2+ during lunch time.

3. Weekly volume starts to pick up in pass 3 weeks, 10 days average price start to trend up.

*From TradeSignum

 

Business point of view, global glove demand is always in increasing trend but it is slow and steady kind of uptrend, unless there is a global illness issue like SARS kind of thing, else i don't think the market will react actively with this kind of silent growth, thus i do not expect the share price to shot up spiky unless it get goreng, but long term, it should be trend up to reflect the actual value of the company. from 2013 annual report, the CEO Stanley Thai had mentioned that Supermax had set up a sales office and store in US Chicago, this move is encouraging as US is the major market of medical glove. On top of this, on June 2014, Stanley also highlight that that company is moving into RUSSIA and other ASIAN counter as they are seeing more business opportunity here. it is obvious that the company is aggressively improving the market share and looking for new business opportunity. In negative side, China is also aggressively expanding their market share in glove industry, this remain a competitive challenge to the company with the potential risk of oversupply. We see this effect in pass one year on all Malaysia glove makers.

*From I3invetor page

 

As for the accounting figure of Supermax, latest 2 quarters is running with low revenue mainly due to the output shortage caused by the fire of her manufacturing site in Alor Gajah, the manufacturing line is expected to be fully recovered by Sept/Oct 14. Thus, it should be any issue there. Debt wise, obviously Supermax is not a cash rich company for now, however, with the business outlook that they have, it is acceptable to me if they reserve the money for business expending. 
 

*From 2013 Supermx Annual Report

 

Share holder wise, top 3 share holders had taken up about 42% of total share, and top 30 share holders had consumed up to 65% of total share. EPF is the 3rd largest share holder but its only takes about 6.25%. Top 2 shares holder is Mr and Ms Stanley Thai. Recently EPF is keep on selling but the company is keep on buying back, from here, i can feel that the company is quite confident with their future especially the key share holder.

 

 

*From Q1-2014 Supermx Quarter Report

 

*From 2013 Supermx Annual Report

 

"On the dividend front, similarly to FYE2012, the Company has paid out an interim 4% tax exempt dividend for FYE2013 and the Board has proposed a final 6% tax exempt dividend which is subject to shareholders’ approval at the upcoming Annual General Meeting. This is largely in line with our aim to pay out 30% of Profit after Tax (increased from 20% prior to FY2012) in order to further reward our loyal and supportive shareholders". -- Supermax 2013 Annual Report

The Company also aiming of giving 30% of profit after tax as dividend to the share holder. From here, it seems like Supermax is not a aggressive 成长股 anymore, well, it still a good news for me anyway.

Based on above brief review, my plan is to invest 30% of my capital in Supermax with buy in 3 steps $2.16, $2.20, $2.24. cut loss at $2.05 (5%). i set the cut loss at 5% is because for me, Supermax is already hitting the bottom, if it went down further at current market, which mean she have some background issue that not known by me. while for accumulation, i buy in 3 stage with 3% increase in share price so that i can make sure i riding on the correct trend and secure my capital if anything went wrong tomorrow.

With the recovery of the production line, i expect the EPS for 2014 to be around 16cent (3.9 for 1st and 2nd Q due to pending production line recovery and 4.7 for Q3 and Q4 with full recovery of the production line) and with the fair PE of 16 in glove industry, the TP for Supermax should be around $2.56. This is equal to around 16% return of my investment. However, I’m going to apply止损不止赚like what i did on ULICORP, the decision of sell will be based on volume and share price momentum. :)

I know it is not responsible to write a lot here and ask you to buy on your own risk, but i still want to say that, buy on your own risk :)

 

OPR oh OPR..

With the adjustment of the OPR,below is the expected changes on your monthly house loan...

Comment says the impact is minimal, but increase still an increase.. So can my salary also increase by that minimal amount?

Well, how this impact the stock market? I think this will significantly impact those company with high debt, of the business outlook remain the same, means they need to pay more intrest with same earning... Banking sector maybe the main beneficial sector.

Settle all my ULI @ 1.68

I had disposed all my Ulicorp share on hand since yesterday with average price of 1.68, total gain from the counter is about 52%...LOL

This is today's disposition

 I decided to dispo all the ULI now with 2 reason:

1. The volume become lower and lower for pass 1-2 weeks, thus the share price have no more momentum to move up further. Indeed, this is normal after it climb from 1.09 until now..

2. The 5 days average line had make the U turn to move down and 10 days average price start to be flat. Although this is just an alarm signal, but with the uncertain of the BNM meeting result, I decided to cabut.

3. Market is a bit high now, and BNM had announced to OPR, it's time to stand a side and decide my next move.

Alright, after disposing ULI, my main counter in my portfolio remain as CHINA POWER (35%), MUDAJYA and FIAMMA (18% each). Cash vs share is 30/70.. Looks a bit high... Haha

I will be looking for any chance to reduce my holding of FIAMMA and swap to MUDJYA, comparing this 2 counter, MUDJYA haven't really move while FIAMMA had move a lot in pass few weeks, and the power generator business is more interesting as compare to property development and home use electric business, LOL!

Stock under my rada is WEIDA, AEON and glove company (haven't decide).. Might do some swapping here.. BUT!! Before that, let's stand aside and look at what the market do tomorrow with super big dip of US stock which is happening now and the impact of OPR increase... 

My Stock Investment Review for 2014 1st Half (P2)

Alright! what happen to IOIPG and Sunway?? i was entering Sunway on Nov 2013 and IOIPG on Feb 2014 after it IPO.


For Sunway, i had been buying it due to super low PE and price dip when gov announced the cancellation of DBS scheme. After holding for 8 months i decided to fully dispose it from my profile with 1 time dividend paid to me as well. Why??

 
SUNWAY had hit $2.23 once and trended down for the pass 1 month, what i see here is the impact of not enough volume momentum and the upcoming GST impact to propety sector is an unknown for SUNWAY, although in general, it should be able to hold the resistance of all this impact. my original TP for SUNWAY is $2.40, but as what i mention above, i would rather swap my capital to other counter which might have clearer view for next 1-2 years. In short term, it should be benifit by the upcoming hospital project, Inskandar project (launching soon) and the new theme park near Subang Jaya. Long term, it should be positive, but i'm not expecting something like >50% return on this counter, what ia greddy man :)

For IOIPG, i bot in this counter after 1 month of her IPO when her share price drop from high of $3.5 to $2.5. The reason i invest on this counter is the capital size and the reputation, however, i was over look by her PE @ $2.75 which is around 11. IOIPG having quite a number of property investment overseas, by looking at the property market in other country, it expose additional risk for IOIPG with the exchange rate and the uncertainty. Local project wise, it have some land @ JB and KL, but i do not see any selling point of IOIP property as compare to others. i decided to dispo it @ lower price after if come down @ high at hitting my 3% cut loss limit, why 3% for IOIPG? it is simple, the future is uncertain for property sector and IOIPG also exposing herself with the risk of overseas investment, with PE >11, i don’t think there will be high flying performance in near future for IOIPG. What i joke in my investment history, another example of taking action without proper thinking :).

Now, let’s talk about my investment strategy for 2nd half of 2014. It is simple:

1. Target to have 4-5 counters holding
2. Avoid property sector,
3. Looking for dark horse
4. Cash vs stock ratio of 20:80.

Buy and selling plan:


1. 10% for high potential counter and 3% for high risk high return counter.
2. Capital invested in a single counter should be more than 20% of my capital.
3. Buy in stage with additional entrance in every 3% price increase (until hit the 20% limit).
4. Start selling the counter when 10 days average price line start to turn down with no volume support.
5. Counter with PE more than 10, max PE = 12.


Now, i have ULICORP, LATITUD, FIAMMA, MUDAJAYA from KLSE.

ULI - Bot in early this year when PE = 7 at price of $1.09. This post is a bit late and now it is running at $1.66 on Friday, it is closed to double up d and the good thing is i learn from UMWOG and TITIJAYA that not to cut gain, so i still holding it, it is currently the 2nd largest counter in my profile. FA for ULI no needs to mention, it is solid, ULI involved in Investment, Cable support systems, and Electrical lighting and fittings, a pretty stable business. Since the increase in the price is likely due to goreng, so i will continue to hold it or start to sell in stage when: 1. No big volume >9mil in next 2 weeks, 10 days average price start to turn downward, PE between 15 - 18.

MUDAJAYA - I just started to collect this counter @ 2.51 with PE around 8, eyeing at her India power plant project. The share price still not moving a lot, so i will use this counter to try out my "3% enter once" strategy on this stock, see how it goes. Long term wise, it had committed with 75 mil profit per annual from the India projects, in short, i do not see any bad things on this counter unless her project delay again. Things to take note also on her profit earning on recent 2 quarters, it is low and i will need to find out why.

FIAMMA - I had complete my "3% enter once" on this counter with average price of $2.13 with PE of 8.+. FIAMMA is selling the home used electricity equipment and now it starts to enter the property market, while the key i chose this counter is the stable business of house use electric equip but with the property sector in the counter, i have no way but need to be more sensitive to any property related news in Malaysia. it is a highly recommended stop by 糊涂 and you can take a look on his comprehensive analysis on this counter on his blog page.

LATITUD - Furniture manufacturer, bot in this counter @ average price of $3.09, PE more then 10. i came to know this counter during the 越南排华事件, There is a lot of detail review and FA result comments of this counter in I3investor page. In short, this is a 龙头股, 3rd Q is a traditional low performance time for furniture sector but she is still performing, part of it is because of the privatize of her sub company, but excluding that, this is also an earning quarter and its better than last year. The overall business performance is also better then competitor. This counter should be performing soon after Vietnam case. However, this is a buy based on follow. Thus, I’m getting a 8% capital on it only, although i quite confident on its performance.
 

My Stock Investment Review for 2014 1st Half (P1)

Had been away for half a year... now here is the check point for pass 6 months of my progress, below is the profile from Dec 2013 - June 2014.

 

To date, some good profit for 2014, main things happen on my profile are Disposing some of the key stock like Fitters to Feb 2014 after shot up ~17% and SWAP to UMWOG and TITIJAYA.

 

Some lesson learn here, for UMWOG and TITIJAYA, they are IPO when i brought it and seems like it had been disposed too early. currently both are running at $4.22 and  $2.49 each any my previous enter and exit price are $3.16/$3.87 for UMWOG and $1.49/$1.79 for TITIJAYA. this had translate to about 10% and 48% less profit if i hold until today. the lesson learn is don't simply let go some potential counter, but how i know will it continue to go up or will drop back to my buying price? Recently, i found to known an investment book and the trick is: "cut loss don't cut gain", on the upcoming counter, my cut loss point was set at 2 level, which is -3% and -10%, why there are two standard? well, it is depends on which counter i invested and the potential of the counter. And how i decided to start taking profit? i will based on 2-3 weeks price vs Vol movement to decide, which mean whenever the counter is having hard time to move up and the vol continue to see low, also not expect any new catalyst from market, then i will start to sell in stage. this will be my investment strategy for the 2nd half of the year ! yeah!

 

Next is the item in red which is RSAWIT, ICAP, and IGBREIT. this 3 is really a fail for me in year 2014, it is purely follow wind kind of buying, although the capital that i put inside was not as huge as others, but it is a loss!

 

I’m buying RSAWIT in the early of the year when we are talking about the kelapa sawit price will be the theme for 2014. why RSAWIT and not THPlant, CEPAT and others? Well, i just simply chose one and bot in just to hope to catch up the 投机　(for me). so this is the result, when i found another good counter, i have no enough capital to invest but to cut loss on 投机股..　悲剧啊..even look at today, RSAWIT are just not performing, i believe it is mainly due to the young trees on this company that is not making the good profit on it as compare to other plantation counter, maybe this is not her year, but who knows what will happen in few years later?

ICAP and IGBREIT is a good counter, but again, i'm selling it to SWAP to other counter and the enter price for ICAP is a bit higher even that she is priced below her NTA for an investment company. This counter that applied 价值投资 on her invested target; ideally, this is an investment company that is using the same investment style like Berkshire Hathaway^.  but the different is the share price is always below its NTA -40%, and she do not give any dividend until 2014, i think the CEO cannot tahan already but to give the very first dividend to share holder else he will start to loss the main pool of investor, dude 50% in 5 years! how many investor in Malaysia can hold for so long just for 50% and without dividend??!! In summary, this is a good counter but not serves the needs of Asian market, face the reality man, we are only human! hahaha. 

ICAP (2009 - 2014)

 

IGBREIT, again, i have not holding power...... it is now at $1.22, with ~4% gain from my enter price if i hold it until now. This is a good example of investing with not having a clear investment strategy. at today’s market, it kind of like the 3rd phase of bull market and i should be targeting some under value stock to catch up the last train before the bull market is here, IGBREIT definitely not in the list as this is more towards conservative investment, so once i realize that IGBREIT is not my cup of tea, I’m cutting it directly and pay a $50 study fee... damn! it is equal to a set of sushi!

Next, I’m going to talk about IOIPG and SUNWAY, also talk about my latest holding including SG stock... :)