Wednesday, November 20, 2013

Recent Actions - Boustead runs on Steroids

With the recent Dow and S&P hitting the high 16,000 and 1,800 respectively, it seems no stopping the market going higher and higher. This is despite all the tapering noise that we are hearing for months now.
On the local market, we don't seem to have a run-up well above the 3,200 mark on the STI. It seems that markets are lost for directions and there simply no company that can well lead the way for the STI.


One position I've made today is liquidating all my shares for Boustead. I've divested them away at $1.585 for 6 lots and S$1.65 for 1 lot. Overall, this has been a good profits made well over 50% since I've purchased them couple years ago. I think this is a good stock for the long term run by a well managed management but the risk has gone up by a lot with current price sitting at the $1.65 range.

The reason I've decided to sell Boustead is because I feel the recent run-up has priced in forward earnings and expectations which the markets expected to be very good. Multiple PE valuations based on forward earnings have also gone up beyond their historical valuations and it is easy to see the risk. Sure, Boustead has a good upstream catalyst in their Iskandar investment, potential industrial pipeline, etc. But should the market suddenly turn southwards or any news that will affect Boustead, we can easily see its price go all the way to the $1.30-$1.40 range, which is the range I will be comfortable to pick them up again.

I've also divested small lots of FCOT today at $1.265 to reduce my exposure in Reits and raise further cash holdings.

With all the selling so far, my cash position has increased and it is in the comfortable range to pick up any opportunities should the market turn southwards.


18 comments:

  1. Hi B,

    Seems like you're preparing for some correction in the market? Im about 50% invested now. Still got another 50% cash to take advantage if opportunities comes in a correction. But I got a feeling that the market will continue running up at least to the end of December. This is just my gut feeling. I may be wrong. Haha

    ReplyDelete
    Replies
    1. Hi SG YI

      I'm about 80% invested now with all the selling. Our cash allocation will increase by each month with our active income, so I'm not too worried about it.

      I'm more worried on overvaluation individual stock and market which is why I have decided to sell.

      I am eyeing a few stocks which I really like and should the market turns for the worse, it could be a compelling buy. I need to take those chances ;)

      Delete
    2. Hi B,

      Wow, you must have been 100% invested before selling :p

      Some stocks in sg are still cheap to me. I've moved most of my money to buy good companies which had underperformed. My portfolio is completely flat now.

      Delete
    3. Hi SG YI

      I was about 90% invested most of the time and was lucky not to be punished by the market. Any companies you can share that still well worth a look at this point?

      Delete
    4. Hi B,

      I'm still positive on shipping stocks. Marco polo marine I'm sure you've heard before. Japan properties also. Saizen reit looks really undervalued. Well, I think most of it I've blog before on my blog.

      Delete
  2. B,

    I think the conversation you had with SGYI is very illustrative of the importance of context and perspective ;)

    The person who thinks the market still has upside till Dec is in fact more "bearish" than the person who has just taken money off the table. Wink, wink.

    LOL!

    ReplyDelete
    Replies
    1. Hi SMOL,

      Somehow i don't really like the idea or being almost 100% invested. Even though i think the market still has some upside, i may be wrong. Thus, i would always have a warchest really to deploy in all circumstances. Maybe if the market gets really really cheap after a crash will i invest almost 100%. :p

      Delete
    2. Hi SMOL

      I think its clear to see that I am more risk taker than SG YI. After all I am still a trader in sports betting. That shows why ;)

      But SG YI method probably suits better for the general. Always have a warchest to be ready for opportunity.

      Delete
    3. B & SGYI,

      Thanks for being a good sport both of you ;)

      Bears and Bulls make money. Pigs get slaughtered... LOL!

      Thumbs up to you both!

      Delete
    4. Hi B,

      I was a risk taker before too. Until the European crisis strike me hard.

      Hi SMOL,

      Bears and bulls make money. You're right. Last year I made money being a bear when the market was good. That's the irony. Somehow being a bear makes more money since when the market falls, it drops really fast.

      Delete
    5. Hi SGManOFLeisure,

      You are absolutely right. People who are 80-100% invested right now are actually gearing up to take profits by 1st Quarter 2014. As am I.

      Don't get slaughtered in March next year. :)

      Delete
  3. Replies
    1. Thanks Uncle CW

      Huat to you as well...

      Delete
  4. Sell to book the profits so as to recycle the proceeds. I like. Congrats!!!

    ReplyDelete
    Replies
    1. Hi MH

      Selling and taking profits is never wrong. But I do feel a little ouch when I sold at 1.585 only to see it up goes all the way until 1.66 high today.

      Delete
    2. You should be proud of yourself for reasons below :-

      (1) A little bit of greed is okay; too much of it then one becomes a greedy pig; waiting to be slaughtered.

      (2) Be fearful when others are greedy.

      (3) let the next person whom you passed the baton to, to also enjoy the remaining sweet juice, if there are more of it. Spread the joy of winnings.

      (4) As mentioned earlier, you can already re-use the proceeds for other investment opportunities. The stock market is like a big ocean, you will soon spot a fat juicy fish so do not let it wait too long for you.

      Never again shall you letting this silly seller's remorse thingy be in your way for more successes.

      Delete
  5. care to share what stocks ur eyeing?? ^_^

    ReplyDelete
    Replies
    1. Hi iamnikkin

      A couple of stock I am closely looking is ST Eng due to the US strengthening play, CWT, Shengshiong and Capitaland on the local play.

      Delete

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