Thursday, March 25, 2010

Singapore Petroleum Company: My Best Buy To-Date

For those who follow my blog, you can ignore this entry.

For those who are new, the first stock I bought in my life was Singapore Petroleum Company (SPC). That was almost a year ago in February 2009, when I just started my new job. I had to borrow money from my mother and my brother to fund the purchase. Not only that, I had to use my mother's account because the people at my online brokerage did not want to revise my limits!

Well, if you click on the link on the sides, you will know that I made alot from this first purchase because it was subsequently bought over by PetroChina and then de-listed.

One Reason To Sell
I will talk about my other disposals in future posts. But here, I want to tell you that this is one of the main reasons for a buy-and-hold guy to sell a stock - that is when the takeover offer is there and you can get a very good price selling in the open market because the market has factored a discount.

To be sure, it will be worthless if you do not accept the General Offer and then the stock gets de-listed. Hence if you want to save on the brokerage, at least fill up the letter and return in promptly

Made Money. But it is a pity.

Despite the premium recieved, it was a pity to have to sell away this wonderful company because SPC is really the only O&G company on SGX. Almost every other stock on the SGX is serves the downstream, or is engaged in the highly risky upstream. Hence, without the takeover, SPC would be a very rewarding stock for investors because of its dividends and the reality that we live in a fossil fueled world.

Going Forward
With the delisting of SPC, I think that there are very few long term stocks worth holding, even if they are part of the Straits Times Index. The sector that I am very partial to as a long run sector is the consumer staples. I have not done any research, but I think companies like QAF and Auric Pacific make for stable plays in any portfolio.

Yes, talking about my portfolio. I realised that it is indeed very hard to do anything meaningful in terms of research for a portfolio as big as mine. I think I can let them run nonetheless while just monitoring for SGX filings and other industry trends (which is tough as my portfolio spans industry). Almost remember to walk the dog and not let the dog walk you. Will update tomorrow for portfolio values. Biosensors is taking quite a hit by the news.

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