Early offloading of long-timers

Sensing weakness closer to Chinese New Year, I have sold off three long time stocks - Auric Pacific, Etika (now Envictus) and UOB-KayHian - on the first trading day of 2015. Will now be observing the market for interesting stocks that I can buy into and maybe reinvest early in March.

I am not a value investor

If anybody asks, I am not a value investor. Although I tend to look for stocks with low liquidity, my record shows that I tend to put my money on growth or cyclical stocks. Of course, as long as the market is battered enough, any stock will be undervalued. But my purchase of C&O Pharma sometime ago, shows that I get easily excited by the sight of growth stocks.

What about Auric Pacific? Is not it a value stock, considering that it is trading at a steep discount to its book value and has a huge stash of cash? While the traits may point towards Auric Pacific being a value stock, the catalyst for my purchase, was the company going into real estate. If its core operations return to good health, particularly its Delifrance outlets, upside will still be limited. It was only when it made concrete steps towards establishing a real estate fund, that I took action.

Food for thought: if you find a stock that looks remotely undervalued, but buy it for growth prospects, are you still a value investor? My preliminary thoughts are that the dichotomy between growth and value is very blur, intention/rationale is more important that aesthetics of the stock.

Bought Auric Pacific Group

Bought 3 lots of Auric Pacific Group at $0.68 with some of the savings as well as dividends from last year.  This makes it $22,000 of capital injected pumped in so far. Hesitated a bit about what price to enter but given the stock's relative lack of liquidity, I scooped them up somewhere between hi-lo price for the day. I really hope to stop buying stocks for the rest of the year or I will be holding not enough emergency funds.

Nonetheless, I am keeping my fingers cross that most of my stocks that are due to report their full year results in end February, declare sweet dividends. For the calendar year 2010, I received dividends of $1,280, which works to 6.8% yield-to-cost. That amount is still much smaller than the five figures that MusicWhiz got for the full year that has just past.

So for the first two days of trading has been positive with the STI surging past 3,200. Let us hope the momentum continues for the rest of the year.

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.