April 2016 Portfolio Update

Current Portfolio Size: $15,625.75
Current Projected Dividend yield:  2.83%
Screen Shot 2016-05-02 at 12.52.33 AM.png
Purchases made during April

  1. OUE Limited (LJ3); $1.68 for 1200 shares
  2. Nam Lee Metal (G0I); $0.310 for 6400 shares
  3. UOL (U14); $6.06 for 300 shares
  4. Hong Fok (H30); $0.735 for 2700 shares
  5. Wing Tai Holdings (W05); $1.84 for 1100 shares
  6. LTC Corporation (L17); $0.540 for 3700 shares
  7. Chemical Industries Ltd (C05); $0.50 for 3600 shares

Divestment during April

  1. Star Pharmaceutical Ltd $0.182 for 1000 shares
  2. Swing Media Tech; $0.550 for 400 shares
  3. Frasers Centrepoint Trust; $2.02 for 1000 shares
  4. Singapore Post; $1.63 for 1000 shares

Value Investing is not a strategy that is very good for my psyche. I tend to check the stock prices of my portfolio every now and then during the day. However, since value investing is a long term strategy that believes in buying stocks which are cheaper what they are valued coupled with a concept of margin of safety, it may take months or even years for the stock to realise its value. Hence, patience is key.

On 9 Apr, I have attended a course that helped me to understand the value investing strategy. The Conservative Net Asset Value (CNAV) strategy course conducted by BigFatPurse taught me how to calculate what they called CNAV1, CNAV2 and NAV. The concept is that if a stock is below its CNAV1/CNAV2 value, you will buy. When the stock reaches the NAV, you will sell.

Other than this criteria, the stock must also meet the Profitability, Operating Cash Flow, Financial criteria. It means that P/E Ratio < 15, the company must have at least 2/3 years of positive operating cash flow and Debt-to-Equity Ratio < 1.

The CNAV strategy gives us a variety of stocks to invest in that are trading at a discount of their CNAV. However, not all the stocks that are trading at a discount of CNAV will eventually realise its value. Hence it is important to diversify my portfolio with at least 12-15 stocks.

The CNAV strategy is less conservative than the net-net strategy, hence there would be more stocks for us to invest in order to achieve the effect of diversification. I will have an equal weightage of around $2000 of each stock for my portfolio.

Frasers Centrepoint Trust, SingPost, Star Pharmaceutical Ltd and Swing Media Tech are divested because it did not meet the criteria of the CNAV strategy. I decided that I should align my entire portfolio to a single strategy in order to achieve the best outcome. I still believe in the potential of FCT and SingPost. However, I realise that by not knowing the true value of FCT and SingPost, I am not able to pinpoint when I should divest them.

Screen Shot 2016-05-02 at 2.24.00 AM.png

Patience is key. Belief in your judgement.

Cheers!

 

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