JC Fund and JC Options Fund – personal review

The Singapore and Hong Kong markets closed today at 12pm and I was looking at the results of Thaibev. I knew the acquisitions will make the results look nasty but did not expect to be this bad. I sat there thinking about the next 1-2 years outlook for Thaibev. I am worried of its over leveraged position and rising interest rate environment. In the short run, the stock will not perform well but the business is consolidating to grow from strength to strength.

I was wondering why I chase after bad investment such as HPH Trust USD, double down on my losses and did not cut this counter last year. In fact, there was a window of opportunity when it was even profitable.

I was thinking of this recent market correction when there were opportunities for me to switch out laggard IBM shares to acquire AAPL shares. I done my homework and I was convinced that AAPL was mispriced. Why I did not do it? There are a few other companies which provide that window of opportunity to switch and move my money into a faster lane. I seem to prefer status quo (maybe I have a fear of losing money) or I have no confidence of my own valuation?

My portfolio consists of mainly dividend stocks and only 1 growth stock. I am playing a defensive role here. Maybe I believe that now I am jobless and there’s no income coming in from my side, I need income from dividend. I just want to be prudent and to be paid while waiting. I think everyone has different investing approach and as long as the same objective is been achieved, it does not matter which route you take. I am just thinking whether I should move away from net-net stocks which sometimes can be value traps.

As of 14th February post market share price of AAPL was USD 168.93, maybe on the 16th February, my AAPL sell put options will expire with share price above USD 170 (20th February when I review this, the option expires worthless and share price closed at USD 172 on 16th February 2018). On hindsight, I could be profitable instead of pocketing the huge losses. However I should remember the important lesson learnt. What if a huge bear wakes up and share price drops by 50%? Will I have money to top up margin maintenance call? Nope. It will be a worse scenario resulting into a very unhappy Chinese New Year.  Thou never gamble with leverage and trade within your cash and cash equivalent. Always follow the checklist. If it is a huge gain, there is bound to be another larger loss later on (this applies to me, I suffered twice on this – a total loss of USD 32k on two trades). If I follow a small gain of 1% per month, this will be a safer approach in the long run.

Overall, as of 15th February, JC Fund and Option Fund portfolios have recovered to a neutral position with no paper gain or losses. Let’s think of a strategy on how to shift the stocks around and what sort of mistakes to avoid in the future.

  • Rebuild watch list – understand beta of each stocks, moat, intrinsic value and margin of safety
  • Re-balance portfolio towards end of Q1 and review again in Q3.
  •  Withdraw some profit every quarter to spend on the family

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