test4

Monday, May 6, 2013

Taking a little profit off the table

Over the past week, I have disposed of Singtel and SingPost.

The reason for the disposal are
1) Singtel, sold at $3.92, is quite near it's past recent high of $4.17
2) Singpost, sold at $1.29, is near it's past recent high of $1.30

There's a time for buying, and there's a time for selling. While the market may look to be on a bullish run, there's always a time the music will end.

Just don't get caught naked when the tide runs out ;)


While the music is still on, and the interest rates still low, I will be looking to sell a few more counters which I don't really like the business or the dividend yields, but bought because I think the prices were too low.

The counters are
1) CitySpring. I'm uncomfortable about its high debt, although the dividend yield is moderately acceptable.

2) Capitaland. The business of this volatile stock is probably ok, but its dividend yield is way too low, and hence the returns aren't that great. I have this counter since March 2009 at a very low price, but I might consider offloading all.

3) CapitalMallAsia. Same as point (2)

4) GLP. The business is probably ok, but I think it is getting a bit too pricey. I don't have a calculation of its value; it is more of a gut feel that $3 may be a sell.

5) Silverlake. The business is really great. But the price has gone really high too. I will have to evaluate the counter again, something which I have not done for a long time. With a 112% gain on top of the 5% annual yield, I guess I do have some leeway to play around :)

6) Cosco. My first stock bought at $2.67. Am considering to cut loss on this, buoyant by massive gains in other counters. A stock bought with zero analysis except hearsay from my sis. :x

7) Aztech. Probably a wrong FA purchase.

8) Hor Kew. Another wrong purchase.

9) SPH. Well, I like the business, but I'm unsure if the counter is worth $4.40.

10) Starhub. One of my biggest gains in my portfolio, apart from AIMSAMPIREIT. With a 147% gain and a annual 10.5% dividend yield, I couldn't be happier :)  But at around $4.70? Is it too high for such a counter? I might sell some such that my remaining counters cost $0.


Not in a rush to sell, but I'm starting to monitor again. I will probably sell some REITs soon too, just not yet...

All in all, the amount I'm eyeing to sell is about $80k and up. The cash will probably be re-invested into a second business venture, as well as invested into my wedding next year :)

My dividend yield will probably be adversely affected, but in a way, with the amount of paper gain, I could probably treat it as taking my dividends for 10 years early. Surely 10 years would be a sufficient time frame to see the next bear market.


As an afterthought after HM Shak's comment below:

Using Fibonacci Retracement on the STI,
In any case, if we take 1513 as the reference low and 3857 as the reference high from Yahoo Finance, the 76.8% retracement is 3313 and the 78.6% retracement is 3355. If we take into account the intra-day fluctuations (which I didn't bother to dig out), the values could be higher, and 3400 is about right.

This was my plan since 2011:
http://wealthbuch.blogspot.sg/2011/02/personal-updates.html

9 comments:

  1. i wonder if you are determining by the size of your profits, or that you urgently need the money.

    in any case, from portfolio management that is abit wrong to use short term needed cash from a portfolio

    you kept saying it is too pricey, but have you re-evaluate their earnings capability? you were valuing silverlake at x EPS, but now you have seen some real moat in the business the EPS is now x+ 40%, and their product is so sticky with their customers. shouldnt you think of adding?

    evaluate the business versus cash flow generating potential not the stock price. its blurring you.

    the old technicians are all saying they could be wrong, but in no fed generated monetary policy have equities market not benefit. every one of them. they see alot of strength in the long term advance decline charts.

    ReplyDelete
    Replies
    1. Hi Kyith,

      yup, I agree that in a way, I did determine a little whether to sell based on size of profits. Previously, my calculations were that the counter was worth around 60~70 cents, which is the price now. But like you said, I have not re-evaluate them again since then, which is why I mentioned I need to evaluate it again.

      Thanks for your advice. Indeed, it's the business vs cash flow potential and not the stock price that matters. I think it was indeed starting to blur me, and you put me right on track again. :)


      The reason for me wanting to sell slowly is because there will be a time where the Fed's loose monetary policy will end. That will be when the music ends. Many high yield stocks are doing well now because of the low interest rates environment. But how long could it last? Who will board the last boat?

      There's a certain blog which show STI having lots of strength still, probably towards the 5000~5800 mark.

      Delete
    2. Hi JW,

      Sometimes, no wait...Its Always a good idea to take profit at market highs. Singtel is overvalued in the short term, it is better to sell at $3.92 and buy again at lower price because as a business, it is robust and far more stable than starhub.

      I too have started taking profits because even if STI goes higher, there will be corrections. and opportunities to pick up the counters at a lower price.

      Delete
    3. Hi HM Shak,

      I'm indeed expecting a correction in the near term. There's some TA involved in terms of using fibonacci retracements, but I sold the stocks based on whether I think it is overvalued or if the business is worth keeping.

      In any case, if we take 1513 as the reference low and 3857 as the reference high from Yahoo Finance, the 76.8% retracement is 3313 and the 78.6% retracement is 3355. If we take into account the intra-day fluctuations (which I didn't bother to dig out), the values could be higher, and 3400 is about right.

      This was my plan since 2011:
      http://wealthbuch.blogspot.sg/2011/02/personal-updates.html

      Delete
    4. Hi JW,

      Fibonacci numbers don't lie. haha Thanks for the technical analysis. 3400 is a major resistance level, but we may be wrong and all the positive market exuberance might push STI to new highs before a good pull-back.

      Delete
  2. JW,

    you mentioned probably be re-investing into a second business venture.
    What do you have in mind? Any thoughts on that?

    Btw, ever thought of joining the business of a successful financial advisor, multi millionaire, and New York Times Best selling Author, Robert G. Allen?

    http://www.youtube.com/watch?v=xoBQxcCxRC0

    ReplyDelete
    Replies
    1. Sorry, I have already ideas in mind, but I wouldn't want to give any details of yet as they are still in the planning and designing stage.

      Actually 2 more businesses... but only one will need more capital, while the other not necessarily so.

      Delete
  3. Another masterstroke by momoeagle before the selldown.

    ReplyDelete
    Replies
    1. Unfortunately, I only sold Singtel and SingPost because I was too busy with the tuition business to monitor the market more.

      Still, I guess I can't complain? :)

      Delete

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