Thursday, 4 September 2014
My portfolio lost traction yesterday, in line with the drop in the broader market.
The portfolio value declined by 0.3% to RM103,862.72 while the FBM KLCI fell by 0.2%.
Total returns for the portfolio decreased from 4.2% to 3.9%.
The portfolio started on 8 July 2014 with a capital of RM100,000. Since then, it has outperformed the FBM KLCI by 5.3%, and has registered an annualised return of 24.3%.
Total profits currently stand at RM3,791.73
The portfolio’s major gainers for yesterday were IQGroup (+1.9%) and AWC (+1.6%).The stocks that lost ground were SHL Corp (-1.0%) and Zecon (-1.0%).
The following shares were purchased yesterday:
Paos Holdings: 5,100 shares at RM0.78 per share. The company manufactures and trades in soap and specialty fats products. The stock has seen an increase in trading momentum.
Chuan Huat Resources: 6,500 shares at RM0.615 per share. The company trades in steel and building materials products. The stock is trading at 0.5 times book and a trailing price to earnings multiple of 10 times.
Tong Herr Resources: 2,200 shares at RM 2.21 per share. The company manufactures stainless steel fasteners, with steady earnings and low gearing. The stock is trading at 0.8 times book.
I sold the following shares yesterday,
CCK Consolidated: 6,000 shares at RM0.935 per share.
OceanCash: 15,000 shares at RM0.32 per share.
Wednesday, 3 September 2014
There has been various comments posted on my blog regarding my stock portfolio and instead of replying to each, here is my general articulation on my portfolio.
I am still experimenting with the algorithm for stock selection and therefore, it is a work in progress. The stocks I selected based on the present algorithm have a very high probability of subsequent stock price movements (averaging 93% on back testing for 2 years), either up or down. Unfortunately, it also means the stocks are often selected too late.
I am now testing with a new variation of the algorithm that will select the stocks earlier but equally, the cost will be a decline in accuracy.
Somewhere in between will be what I consider the optimal trade-offs, never ideal.
Clearly, what I have illustrated is the ability to use mathematical algorithm to detect stocks that have garnered momentum, to sufficiently high accuracy. And trading on these “break-outs” can possibly be profitable.
I am also working on an algorithm to signal the end of a short-term momentum. I have been less successful to-date but am confident of a breakthrough in the next two weeks. Indeed, my stock portfolio would have performed far better had I been able to sell earlier.
For greater clarity to some of the questions raised.
This portfolio is a real portfolio, where the objectives are short-term buying and selling on the basis of the mathematical algorithm created. I do review the fundamentals and valuations subsequently, but only after the companies have been first selected by the algorithm. In other words, it is a trading portfolio using volume and price breakouts as the basic criteria.
It is my intention to introduce a different portfolio for long-term fundamental investing. This will be based on a 1 to 3 years perspective, or longer.
Please look out for the new Edge financial portal which will be launched soon. You will be enriched by the news and analytics that will help you make better decisions, whether you are a long term fundamental investor or you trade on the basis of very short term trading momentum.
Thank you for your various comments and insights.
My portfolio ended the first trading day of the month with a slightly decreased position as compared to 29th August.
The portfolio value declined by 0.05% to RM104,177.22 while the FBM KLCI picked up by 0.08% yesterday.
Total returns for the portfolio remained unchanged at 4.2%.
The portfolio started on 8 July 2014 with a capital of RM100,000. Since then, it has outperformed the FBM KLCI by 5.5%, and has registered an annualised return of 26.8%.
Total profits currently stand at RM4,177.22 of which RM485.44 have been realised, RM 5,234.50 are unrealised and RM1,542.22 are commission costs incurred.
The portfolio’s major gainer for yesterday were Zecon(+4.0%) and IQ Group ( +6.0%)The stocks that lost ground were KSL Holdings(-3.8%) and CCK(-2.1%).
There were no sales or purchases yesterday.
Tuesday, 2 September 2014
My portfolio declined in line with the fall of the market on Friday, 29 Aug 2014.
The portfolio value decreased by 1.12% to RM105,416.63 while the FBM KLCI decreased by 0.51% yesterday.
Total returns for the portfolio dropped from 5.4% to 4.2%.
The portfolio started on 8 July 2014 with a capital of RM100,000. Since then, it has outperformed the FBM KLCI by 5.6%, and has registered an annualised return of 29.2%.
Total profits currently stand at RM4,233.22 of which RM485.44 have been realised, RM 5,290 are unrealised and RM1,542.22 are commission costs incurred.
The portfolio’s major gainer for yesterday were Zecon(+1.5%) and Symphony Life ( +0.9%)The stocks that lost ground were Ocean Cash(-2.9%) and CCK(-3.5%).
I bought the following :
IQGroup: 4,800 units at 1.45 per unit, good earnings as the net profit for the first financial quarter rose 391% and revenue rose 46%.
AWC: 22,000 units at 0.315 per unit, as the company has net cash position of 89% of market capitalisation, with price to book of 0.9 times.
HIL: 7,300 units at 0.68 per unit, as the company is cash rich and is trading at a lower price to book of 0.67 times.
I sold the following,
Astino 3,000 units at 0.84 per unit
Latitude Tree Holdings 3000 unit at 3.33 per unit