CY09 portfolio

[specuvestor]

There is diversification and diworsification, vs concentrated convicted allocation. Usually optimal path is somewhere in between

We know that Buffett has a focused portfolio. But it also has a diversified sector concentration. Personally I think the idea is to be concentrated in your allocation to a stock in one sector, hence I often alluded to the idea of recognising the alpha stock, and then try to pick other stocks from other sectors. Having more than 2 stocks in a sector in a country generally means one is undecided or not done enough homework.

The problem with this approach is that one needs to have a broad understanding of various dynamics, hence Charlie's idea of a multi-disciplinary approach. But the good news is that most of the time one just need to know the business models properly rather than the nitty-gritties, which can be very complex yet useless in the bigger scheme of things. I spent almost 2 years understanding the difference between plasma and LCD and OLED, but end of the day it is more a hobby than of real investment value.

Just my 2cts that I hope will help CY09 on his concentrated portfolio strategy

Noticed that dzwm87 shared a quote from the late Sir John Templeton, I shall share more on Sir John Templeton.

Sir John Templeton, coined “the world’s greatest stock picker of the century” by Money magazine was only right 66 percent of the time. So if the greatest stock picker in the world needs to be diversified to protect against losses, the average investor can surely benefit from the practice of diversification too.

“Diversification should be the corner stone of your investment program. If you have your wealth in one company, unexpected troubles may cause a serious loss; but if you own the stocks of 12 companies in different industries, the one which turns out badly will probably be offset by some other which turns out better than expected.” July 1949
(Source: http://whatwouldjohntempletonsay.com/200...ification/)

How strong personal character defines investment decisions: http://whatwouldjohntempletonsay.com/201...#more-1113

[CityFarmer]

There is diversification and diworsification, vs concentrated convicted allocation. Usually optimal path is somewhere in between

We know that Buffett has a focused portfolio. But it also has a diversified sector concentration. Personally I think the idea is to be concentrated in your allocation to a stock in one sector, hence I often alluded to the idea of recognising the alpha stock, and then try to pick other stocks from other sectors. Having more than 2 stocks in a sector in a country generally means one is undecided or not done enough homework.

Yes, I concur. Blindly diversify, means diworsify. We need to strike a balance. Too much diversification, means dilution of result, while too concentrated, there are unknown-unknown risks, and probably unknown-known risks.

The problem with this approach is that one needs to have a broad understanding of various dynamics, hence Charlie's idea of a multi-disciplinary approach. But the good news is that most of the time one just need to know the business models properly rather than the nitty-gritties, which can be very complex yet useless in the bigger scheme of things. I spent almost 2 years understanding the difference between plasma and LCD and OLED, but end of the day it is more a hobby than of real investment value.

Just my 2cts that I hope will help CY09 on his concentrated portfolio strategy

Nitty-gritties are noises. IMO, an overview of biz model, is suffice, most of the time. You may not understand LTE (4G) or A-LTE (4G+) technologies, but an overview of the technologies, gives high download speed, thus likely more data usage. The understand is more useful, than 4G/4G+ technologies detail

[CY09]

Due to the unexpected non decline of TTj's price after its weak Q3 results, I was unable to accumulate TTJ. At the price of 0.35, the MOS was not as good as other stocks i wanted

Nevertheless, I have used some of this proceeds to purchase Samuerda Shipping (@0.255). This is because the company should benefit from lower oil prices and economic growth of SEA (especially Indonesia). Secondly, its free cash flow yield over the past few quarters is quite good. My personal estimate is that the company will generate 3.48 s$cents per share, after repaying about USD 23M of debts, annually if it can repeat the past 3 quarters of results.

[CityFarmer]

Due to the unexpected non decline of TTj's price after its weak Q3 results, I was unable to accumulate TTJ. At the price of 0.35, the MOS was not as good as other stocks i wanted

Nevertheless, I have used some of this proceeds to purchase Samuerda Shipping (@0.255). This is because the company should benefit from lower oil prices and economic growth of SEA (especially Indonesia). Secondly, its free cash flow yield over the past few quarters is quite good. My personal estimate is that the company will generate 3.48 s$cents per share, after repaying about USD 23M of debts, annually if it can repeat the past 3 quarters of results.

The statements show a top-down approach of fundamental analysis, and focus on short-term performance (quarterly). I reckon you have more behind, but top-down approach for stock selection, might not be suitable for value investing, IMO.

(sharing a view from a busy-body )

[CY09]

Page 2&3 of Sameurda Shipping Thread has lots more info on the company and why Samuerda Shipping may be a viable investing option. Points of declining cost etc will ensure its profits are similar to the past 3 quarter results ( I dont think oil prices will revert to $100 but hit $80 at best), though i expect some cost savings from bunker fuel to be passed to its customers.

As from its Fy11 annual report, it shows since then Sameurda Shipping has increased its fleet and removed unprofitable operations. I am hoping a full FY results (aka as 4 quarters of good profits within the same FY will cause a re-rating of Sameurda). It will be good to read more of it in the "S" thread as that was where i started. I wont elaborate much here as it is just mere copying and pasting what our VB members said.

[CY09]

2nd Quarter portfolio was down 0.5% mainly due to Penguin
I have sold off SFIG during the rebound as I do not expect an IPO. KSH stake was pared down
Fischer, Colex, TTJ & Samudea Shipping posted gains. Added Penguin, TTJ, Colex, Samudea during the 2Q

Penguin (64.4%)
KSH (8%)
Fischer (6.9%)
Samudea (10.3%)
XMH (1.2%)
TTJ (6.1%)
Colex (3.1%)

[CY09]

Bought more XMH today at 0.181, 0.182. Last two trades of the day
Divested KSH at 0.515.

Reasons for KSH divestment, newest condo launch here was priced fairat a lower range. The "flora" and rezi projects are not moving. No doubt there is a china project but i am not too sanguine of China ppty market (resi)

[ianphoon]

Hi cy09, penguin being the largest in your holdings. Now dropped to below 15c.
What's your thoughts on your holdings currently? Could you share with us?

[CY09]

HI Iamphoon,

Penguin will continue to be my largest holdings. However, as mentioned on the Penguin thread, I will reduce my holdings if this quarter releases another surprise- mainly another round of PPE addition ( of a year supply) into their internal chartering fleet. I would rather the company tapers off its yard capacity than keep adding ships to prepare for the upturn. This is because, its not wise to pump so much cash into idle ships as Penguin's cashflow has weakened a lot to the extent it is now taking on term loans.

As for the demand side of Penguin, I will admit I made a mistake in my bear condition where I did not expect such a big fall in demand for crew boats. However, as Penguin does not reveal its order books, the previous statement is just a hypothesis on my part that Penguin's crew boat demand has been adversely affected (likely to be true). This O&G downturn is indeed a reminder of how bad things can turn out. In fact, it spans across many commodities related stocks and will be a lesson that I have learnt that things can go worse as my bear case scenario.

Lastly, while price is one component, the value of the business is of another thing.

[yeh]

hi CY09
your portfolio consists too much penny share. small cap.