2/2/2017 Major Position Movement

Assume I am addressing my stakeholders of JC Fund, I will mention the following.

Today, I made a major switching of position by selling 20 lots of OCBC at S$9.44 and buy into 26 lots of Company M which was mentioned in previous post. Hence, my total holdings in Company M will become 33 lots.

I sold 20 lots incurring a position loss of S$9k+. The reason of selling is twofold. I saw the impairment issue of EMAS Chiyoda which means DBS is going to write down further losses. I am sure DBS has already catered for this under NPL. I am just not confident of the quality of the loans, the O&G positions are just a small portion of banks’ portfolio. The larger portion belongs to the property developers and construction companies. To add salt to the wound, SME loans will further deteriorate in the next 2 years.

My OCBC original position consists approximately 30% of my portfolio which is overexposed in the finance sector. I want to reduce the holdings to a comfort level of 10%. The 26 lots of company M which I switched to will generate approximately S$14k of dividend. This will cover my loss and have a margin of safety for my entry price. My downside is covered.

I think back, maybe I should switch out slowly.

Only time will tell whether this move is right or wrong. Let’s reflect this again.

09/02/2017 Reflections on my actions
JCProjectFreedom ocbc 090217

From the previous post, I did not think deeper and on a hindsight, it is a rash decision. Emotion is at play. Looking at the above chart, OCBC today is at S$9.71 range. I believe eventually this will close up higher to S$10 and I will not incur any losses at all. There is an additional factor which I have ignored. There will be the final dividend which will amount to 20,000 x ~S$0.2 = S$4k. All in all, my this move is equivalent to a loss of S$14k.
Yes, the future company M’s dividend should cover this loss.

What I could have done is to wait a while longer for OCBC to rise, get the dividend and immediately switch to Company M. Well, if I am that accurate, my net worth should be a few folds more than now.

24/2/2017
The switching out from OCBC is about to breakeven. Hang in there.

28/3/2017
The price went past breakeven point. The switching works. Now Mr Greed is in the hot seat. I sold 5 lots already. By mid of April, I will sell down more.

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