The first quarter of 2018 has just past, finally things are beginning to look a little brighter for my portfolio. However, we are still in the midst of the early earnings season and this early optimism might evaporate quickly.
Still, I want to take the opportunity to quickly pen down my thoughts and reflections on my short 1 year investing journey.
I thought I was a real fundamental investor. Yea, some major illusory superiority going on there. Looking back this image has been shattered, for sure. While gains have been decent, I think I can do much better.
2017 was the year to sow the seeds of the multi-baggers, but I missed this fantastic opportunity. Counters like AEM, TatSeng, Valutronics and Sunningdale were all posting positive results since 2016, but I didn’t pick up any. Instead I went for raffles medical and straits trading, which while fundamentally sound still have quite a bit of time required before their catalyst gestate.
This has taught me a lot about solid fundamental investing and picking counters at a discount. When the portfolio is small, choosing to invest in one counter over another involves a real opportunity cost. I think I can do much better to screen and pick up better value stocks.
As much as I would like to say that I am not an impulsive person, the adrenaline of a downward price correction still gets to me. Especially when the focus is on contrarian plays and trying to pick blue chips at a bargain.
On hindsight, contrarian investing takes more skill and practice than just buying a bruised counter. The saying that “Low’s can get lower” is not lost on me, especially when doubling down involves an opportunity cost as well.
I wonder if I should change my mindset about contrarian plays to counteract my penchant to target and buy on impulse. Perhaps, it is yet better to prepare a watch list instead tag price alerts with the requisite NAV and target prices.
Finding and looking for positive catalyst is a difficult thing to do. As catalyst are future events, they are either already priced into the counter, if certainty is high, or are considered potential catalyst, where circumstance might/might not materialize.
Betting on catalyst is rather difficult as due to their forward looking nature are 50/50 in nature. Personally if you are investing based on 50/50, you might as well go gamble.
Catalyst are important but I’d rather have a solid track record or balance sheet. Thinking back, I think this habit of looking for potential catalyst came about after reading analyst reports and letting their opinion and research sway my own.
As my cash position is rather low, I will be looking forward to replenishing this in the next 3 months. During this time, I will try my best to review and revisit some counters and hopefully identify several potential counters to invest in. For now I am happy to wait for the earnings results to come in and collect some long awaited dividends.