Portfolio update - contra YZJ ROC 5.3% in 3 days

Portfolio update - buy Kep, Yangzijiang

Portfolio update - add CDL and CPL

Two cents’ worth: When embracing risk, volatility can pay well on the stock market

An article from Sunday Times 14 Oct 2007.

Some major ideas as follows:

• For long-term financial planning, one point to note is that, on average, over long periods of time, shares have outperformed cash and fixed interest investments by 5 percent to 7 per cent annually.

• While no one can predict the future, this basic relationship should continue to hold true for the next century, barring extreme events. The return above cash rate from shares is called the equity risk premium.

• The difference between success and failure is not how investment markets behave – we know generally they generally do well over the long term – but how investors behave.

• Research suggests that investors detest the way a loss makes them feel even more than they fear the loss itself. It appears the emotional distress they suffer can be detrimental as the financial loss itself. Taking investment risks involves accepting the possibility of making a loss and suffering regret when that happens. Risk-averse investors might avoid loss, but in doing so, they also lose the possibility of making significant gains.

• The time horizon is always an important factor to consider when making investment decisions.

Risks vs Returns

One of my colleagues has been busy finding which bank offers the best FD rate; but, he was very disappointed as the best rate is only 1.88% with 6 months lock-in period.

I advised him to invest if the money is not meant for emergency use or short term.

However, investing involves risks, and not many people are willing to take higher risks, spent more time educating themselves on stock investing for better returns.

For many years, I have been like him; not willing to take higher risks as I have heard too many sad stories of how people got burnt when market crashed. I was fearful then. I put my money in FD for many years and wasted many of years of opportunity of growing wealth.

We must spent more time on financial education, monitor the market closely, and learn to take higher risks for better returns.

Looking back at the bold decision that I have taken in 2003 when I decided to take higher risks, spent more time educating myself on trading, and started active stocks trading.

See the above table for the result of returns vs FD rate.

Portfolio update - contra Cosco. ROC 5.3%

Portfolio update - add FNLS (F&N), Yanlord

Welcome CDL as 10th member of $10K Hall of Fame

CDL will be XD tomorrow and the dividends collected has enabled CDL to join as 10th member of More than $10K Hall of Fame.

Portfolio update - Buy CDL, Cosco, Yongnam

Portfolio update - Buy CDL, Sold LABS

I will need to do one more sale transaction for CDL to become a new member of More than $10K Hall of Fame. Cheers!

Portfolio update - contra CDL, ROC 4.2% in 1 day

Financial Independence through trading stocks

When I casually mention financial independence through trading stocks to friends, relatives and colleagues, they do not seem to believe that it is possible. Quite sad that I could not honestly tell them that I believe I am on target in 4 year time by Sep 2011.

Portfolio update - Bought CDL

Portfolio update - Took some partial profit

STI so high!! It is time to take some partial profit and raise capital for the next battle. Market is always there!

Sep 2007 Milestone update

Nett worth survived Aug 07 major correction, and now back to the previous high. Important lessons learnt as follows:

1) NEVER, NEVER touch profits. Re-invest these profits back into the market and let the magic of compounding works its wonder.

2) When the market dragged down those earlier high performance stocks, it is also time to look hard at our portfolio and sell those laggards, hit the bullet, take realized losses, and use the recovered capital to buy into those fallen stars and then wait for market recovery. This strategy worked well in both Feb 07 and Aug 07 crashes.

Portfolio update - more trades, DBS, CDL

Portfolio update - more trades DBS, UOB, OCBC, Rotary

Sep 07 - End Game Goal update

Portfolio update - more trades done

Investing Performance Update - revised presentation format

It is very important for me to keep my eyes on the ball at all times to achieve financial independence by Sep 2011 i.e. less than 4 years away.

There are two key targets that I would need to achieve by looking at this table:

1) To double the YTD ROC by Dec 2008

2) To achieve more than 19.2% in Yearly Compounded ROC by Dec 2007

Portfolio update - sold CDL, CPL, add DBS, SML, LBY

Portfolio update - sold KEP but add Labroy

Portfolio update - add KEP

Portfolio update

Portfolio update

It is getting difficult to make money in current market condition. I am adopting hit-and-run strategy to avoid being caught in any major correction.

Aug 07 - End Game Goal update

Now, I firmly believe the power of compounding by never withdrawing any profit. The sharp correction in Aug 07 has lesser impact on the overall value of the portfolio compared to the correction in Feb 07.

Portfolio update - contra HSE, OCBC, KEP, SGX

Portfolio update - sold some SPC for partial profit taking

Decided to take partial profit for SPC in view of falling crude price. Including dividend of $0.20, ROC is 7.6% in 19 days.

FI trend update after dramatic sell down and recovery of STI

Portfolio value was really hit by the meltdown in the week. Approaching to cross the the safety line. Last Friday, I took drastic step to clear out those dead wood such as SPH, JTIL and swap for KEP, OCBC, and HSE.

Clearing of these dead wood has caused me big losses, but during meltdown it is also the right time to buy potential winners cheaply. Let see in a few months, whether such swapping strategy make sense?

Portfolio update - add KEP, Hiap Seng, OCBC

Portfolio update - add SML, SGX, contra loss on KEP

Heavy contra loss of -10.2% on KEPPEL is telling me that the market is not right for contra trading. I will stop contra trades till the market situation improved.

FI update after STI CLOSES DOWN 113.34 POINTS OR 3.4 PERCENT AT 3,273.25

Portfolio update - add OCBC

Portfolio update - add KEP, contra DBS, OCBC

Portfolio update - add more DBS, new OCBC

Impact of today correction on my FI target trend

My portfolio is much stronger now to take correction since the last major correction on Feb 28, 2007. It is important that we keep focus on the our long term objective despite periodic market corrections. It is not wise to panic and sell off. Keep on building surpluses and periodic correction will not have significant damage.

Portfolio P&L update - S'pore shares plunge 3.7%

Investing article in Sunday Times Aug 5 2007 ME & MY MONEY

Sunday Times Aug 5 2007 ME & MY MONEY

Main points are as follows:

• Knowing what stocks to buy is not good enough

• To make money, a person must know when to buy and well as well

• When you buy, it must always be based on fundamentals. But knowing what to buy is not going to make you money. Money is made from knowing when to buy and when to sell. That's when the technical analysis part comes in

• When someone goes in to buy a stock, there are elements of greed and fear that result in a decision to purchase at a certain price. These emotions are constant through the decades and you can map the behavior and use the past to predict the future as people don't change.

There are three ways to build wealth.

 Most people will work to build wealth; but if you doesn’t have a high-paying job, you can work until cows come home and may just making ends meet. (CREATEWEALTH: Fewer people can really make it to high-paying job, how many VP, EVP, CEO are there?? BIG RAT race!!!!)

 The next group of people starts their own business. Some make it but many don't. (CREATEWEALTH: Many of us are not in this group, many of us dream of it and talk about it. If you don't dare to take some money to invest, don't ever think or dream to be in this group. FAT HOPE!!!!)

 The third group makes money work for them through investments. A decent-paying job and invest to make money work. (CREATEWEALTH: Only those with passion in investing, constantly learning from it, control the emotion of GREED and FEAR; and STRONGLY BELIEVE IT THAT IT CAN BE DONE, AND HAVE A PLAN, AND A ULTIMATE GOAL will made it, perhaps it is less than 20-30% in this group will made it, many will fail, and bang their hearts)

• Know when to be aggressive and when to be conservative. Know yourself, your level of greed and fear. (CREATEWEALTH: To be aggressive, you need to follow the stock history and company fundamental very closely, and strike at the right time by using pyramiding the investment method, you will win BIG if direction moves in your favor)


(About IPP financial advisers, investment director, Albert Lam, 45, by Writer Lorna Tan, Finance Correspondent)

Watching over my FI Target very closely now

Portfolio update - contra SML

Historically, STI is weak during Aug-Sep so it is better to regret than to be sorry.

Portfolio update - add more SPC, SML

Portfolio update - add SPC and SML

Wow! Correction today!!! S'pore shares fall over 3% Singapore share prices skidded 3.27 per cent on Wednesday as concerns over the troubled US sub-prime mortgage market spooked investors, dealers said.

The Straits Times Index dropped 115.95 points to 3,431.71 on volume of 4.94 billion shares worth $4.31 billion (US$2.85 billion). There were 110 rising issues, 1,014 losers and 442 issues were even.


But, to me it is a good time to buy, especially SPC in view of 0.20 dividend payable in Aug 22.

SML is announcing result tomorrow will also provide support. I will contra SML tomorrow


This correction caused some damages to my portfolio; but, I don't think it is serious enough for me to cut losses. Need to watch over it tightly especially in Aug - Sep period where STI is seasonally weak.

Portfolio update - add DBS, CDL, and SPC

Portfolio P&L update after Friday correction

Let see how bad will my portfolio be hit on Monday.

End Game Goal update

Visualization of your Goal is very powerful, and even more powerful if the goal is shared and made known to others.

I have slightly passed through the 50% mark in term of time, and I want to achieve at least 67% in term of FI Goal by Dec 07.

Cheers!

End Game Goal update - Jul 07

Wow! STI corrected earlier than expected. I don't think I will made any transactions over the next few trading days so I will close the book for Jul 07. Fortunately, I have managed to sell all my SPC holding at a good profit. Never try to maximize profit, it is always prudent to take partial profits on the way up.

Portfolio update - SPC sold out

H1 earning is out. Will wait for correction to enter SPC again in view of surprise interim dividend of $0.20 and good result.

Portfolio update - sold some SPC

DOW drop again! This time by -226 or -1.62%. I don't think this is a bullish sign and also crude oil dropping. It is better to be safe than to be sorry. I am taking another 50% profit off the table for SPC since it has run up so much.

Portfolio update - sold Semb Corp, SPC, and Kep Corp

Today is partial profit taking day b'cos I am not sure what will happen to DOW after the last Friday fall of -149.33