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| Thursday, August 30, 2007 |
| What now? |
Like what I believed, the volatilty should end soon. Whether it actually climbs up (my belief) or down, should be evident by end of next week. Of cos, if the FOMC does have an important effect, which most probably does, then its is from 18th September onwards.
Anyway, what I believe is that a strong stock should make a good recovery after irrational price shocks. And right now, it is the best time to see which are the stocks that are recovering sharply.
However, one important thing to note is that at the moment, while the whole subprime issue is drilled into our heads, we must still be careful of what is going on. Dust might have settled, but trend is still unclear. Be disciplined if you have to trade |
posted by Nenix @ 1:04 PM   |
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| Wednesday, August 29, 2007 |
| Those that recovered strongly are well supported |
Today loaded small positions of Boustead @ 2.39. Maybe its a bit more costly. But I feel this stock has strong resilience and to me, that's really important. Strong shares are well supported and prices wont be much affected. This view can be reinforced when the price refused to budge in the free fall during the day. And personally, I think most punters are flushed out when it fell to $1.80 range.
Anyway, for the rest of my holdings, I'm a bit tired to update. Haha. But basically, all are still within my cut loss range. Volatile times ahead and I can see volume drying up. In a bullish run, this is a good sign as it might be an indication that it will surge. But in this context, I wouldn't be surprised if we are going through the transition stage towards the bear run, though I personally feel its not likely.Labels: Boustead |
| posted by Nenix @ 10:54 PM |
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| My take on the situation |
Just as things start to recover, we are dealt with another subprime issue. Today we will see a sea of red, thats for sure. But I feel this is only temporary. Why do I say that?
1. Contra players might be flushed out
What this means that forced selling might be lesser this time round thus it would not force the price down as drastically as before.
2. Redemptions of funds is not as drastic as compared to a few weeks ago
Compared to a few weeks ago, this time round, what has been withdrawn has already been withdrawn. Think about it, past few weeks, the subprime scare is as bad as it is today. So those who still have money kept in funds are those who can't be bothered or those who are in it for the longer term, shrugging this incident as a small correction. So this time round, again, forced selling due to redemption will be reduced.
3. Retailers who are vested recently are aware of the situation
After the first drop, those who are vested recently are aware of the situation as there are no indication that the subprime issue is resolved, despite attempts to contain it. So now, those who are most probably holders rather than punters, especially at supported prices in the recent drop. This acts like a typical consolidation phase whereby the knowledgeable and well-informed are collecting from the ill-informed investors/speculators. Thus, what you see is that these are the people who might do bargain hunting.
I personally feel that, before the correction/possible-crash, the price reference is at its peak. However, after the first correction, those that base prices on the peak has already cut-loss, gain profit or decided to wait it out. After hitting the bottom, those that support the price will take this as a reference. Thus, price drops from now would be unlikely to fall way beyond the trough of the correction.
Anyway, in conclusion, from the recovery I observe, I understand that people vested in Singapore stocks knew that they over-reacted and thus buy back when presented the opportunity. These are in fact THE stocks that will go up when things settle. |
| posted by Nenix @ 8:20 AM |
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| Monday, August 27, 2007 |
| Shopping for bargains |
Seems like the calm has arrived and all negative news have been digested. Maybe they also realize that there is an over reaction to the mass selling. For a trend follower like me, I could observe that the past few days exhibit a short term upward trend. Of cos, this does not mean that everything should just surge up from now on, but at least short term wise (5-10days), we should observe a relatively smooth upward trend.
Anyway, loaded some TiongWoon @ $0.995 with cutloss at $0.833. Although it is still higher than the price when I sold it, no one could clearly tell what's gonna happen in the past week. To me, this is the cost of certainty.
I also loaded some FJBen @ $0.825 with cutloss at $0.753. This is another that recovered well from recent correction.
Lastly, I've loaded some Federal @ $0.72 with cutloss at $0.608.
If you realise, the cutloss range is huge. This is because of recent volatility in the markets and it would be unrealistic to set a cutloss with a tight range.Labels: Federal, FJBen, TiongWoon |
| posted by Nenix @ 10:02 AM |
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| Friday, August 24, 2007 |
| 24th August Update |
As it is, my NDF has now gone below the STI index with NDF being $1.36 and STI being $1.38. If I have to point out any fault, it would have to be due to my ill discipline. Hesitation to cut loss and selling when I am not supposed to. Have I learned a lesson? Haha, sadly speaking, I didn't. This is because recently, I loaded more position based on "feel". I guess I got lured in by improving market sentiment, thus trying to preempt my buying signal. This time round, if I managed to survive, then I'm lucky, else I just have to bear with another wave of cut losses.
I bought some CAO @ $2.52, Ferrochina @ $1.95, OKP @ $0.68 and Lyxor China H @ $16.8. Anyway, after I reach home, I calculated the potential risk. To my astonishment, CAO, Ferrochina, OKP are very risky stocks with total cut loss amounting to 5% of my portfolio. That's not healthy. To breakdown, the cut loss is as follows:
MMP Reit: $0.998 - $1.07 (N.A as this is part of my 10% untouched funds)
STI ETF100: $32.226 (N.A as this is part of my 10% untouched funds)
AsiaEnv: $0.605 (N.A as the sales of this equity will be determined by my brother)
Lyxor ChinaH: US$15.796 (This is not part of the 10% untouched funds as purchase is based on
buying signals)
OKP: $0.554 (Cutloss point based on its volatility. I forgot about the fact that it has such high risk when I bought it)
CAO: $2.14 (same as above)
FerroChina: $1.64
As you can see, the cutloss is determined based on its volatility(risk). At the moment, this is the risk present and I now have to follow my cutloss. I realise its easier for me to cut loss than to refrain myself from buying unnecessarily.Labels: AsiaEnv, ChinaAviationOil, FerroChina, LyxorChinaH, MMPReit, NenixDreams Fund, OKP, STI ETF100 |
| posted by Nenix @ 8:41 PM |
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| Tuesday, August 21, 2007 |
| Some for the long term |
Well, today I bought some STI ETF. This will be put aside for a long period. And for this case, I do mean LONG. finally, I've accumulated reits and some ETFs for the long term. Together with MMP Reit and STI ETF, they occupy about 10% of my portfolio.
Anyway for now, there isn't any trend, thus not much for me to do. I've quite some cash sitting and everyday seems to be a good buying opportunity. Haha.. but alas, I must follow my rules and wait.
Market seems to be stabilizing after the correction. Hopefully we will see a good uptrend come September. In the mean time, I will still be monitoring closely, waiting for opportunity to enter.Labels: STI ETF100 |
| posted by Nenix @ 11:10 PM |
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| Wednesday, August 15, 2007 |
| Fund Price is 1 year old |
On a brighter note, my NDF fund is more than 1 year old. Being incepted on 1st August 2006 at the price of $1, it has now risen to $1.39. A 39% profit should be decent enough.
STI currently sits at $1.34, so I am still outperforming the market. haha. I guess these are consoling words for myself. Nonetheless, I've made mistakes, and I have learned them. This year, I will be hoping for still a 25% pa returns. I know setting targets especially for the stocks market is not really realistic, particularly for a trend trader.Labels: NenixDreams Fund |
| posted by Nenix @ 10:16 PM |
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| Retailers 1 - 0 FundHouse |
Today's drop seems serious. One of the possible reasons is that there might be huge redemptions everywhere. This thus forces the Fund Houses to liquidate their positions. The increased selling pressure thus presents a rare opportunity whereby the retailers have the say over the price.
Take for example MMP Reit. Throughout the run in since April, significant shareholders like Morgan Stanley etc are increasing their stakes (I have not actually check out the increase though, if any) Suddenly the credit risk causes panic and redemption of funds causes the FH to liquidate their holdings.
Ahaa. So.. this is an opportunity to load. Needless to say, I have loaded up quite a fair bit of MMP reit at 1.17, 1.15 and 1.09 respectively. Total position size is about 10% of my portfolio. I intend to use 20% of my funds to load in Reits, indexes and maybe gold funds.
Of the remaining 80%, 10% must be cash. This acts as an opportunity fund. However, the 10% quota must be maintained.
That leaves with 70%. This remaining 70% is used for trading. Of cos, if the reits are moving in good direction, I will top up using this portion of the fund. The same goes for indexes.
Now, I only have 2 stocks, Asia Env and MMP Reit. I will be waiting to pounce once the market shows signs of recovery.
P.S The above mention above redemption of funds is merely conjecture on my part.Labels: MMPReit |
| posted by Nenix @ 9:48 PM |
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| Tuesday, August 14, 2007 |
| Lessons from it Part 2 |
Haven been blogging recently partly because of school reopening. Another reason is because I need to rethink what happened and why I reacted in that particular way. Recently, all should know about the global wide "correction". thinking back, it is such situations that I am possible to exit my trade, at profits or loss. However, during the correction I made few mistakes.
1. I bought back shares on impulse with the hope that it will rebound.
Of cos, it may or may not rebound but judging by predicted growth rates etc, it should rebound. But wait, thats me hoping that it might rebound. A good trader never hope for things to happen. I failed miserably this time because I bought based on hope and as a result, I didn't have any cut loss mechanism to guide my trades. Indeed, I am running like a headless chicken in this case. The cost of this lesson is great and I made 50% more loss than the "unavoidable" losses that I exit based on cut loss. My fund dropped from 1.7+ to todays 1.40. Thats a 17% loss. This also means that IF I didn't had itchy fingers and a weak mentality hoping that this will recover because most people say so, I would have cut my losses to about 11%. This loss is 1% more than my worst case scenario simulation.
I have now pasted an A4 size paper on my cupboard indicating my loss. This will serve as a reminder everyday for as long as I trade. Seriously, I hate myself for crumbling at the crucial moment.
2. Losing faith in the system when it matters most
It is disappointing to even state that during the correction, I have temporarily lost faith in my system. I forgot that in trading/investing, there will always be times whereby you will lose. I have stated that trend trading's main disadvantage is that it you act when a trend is clearly defined. There will be many times whereby you have to go through such periods and its at times of such uncertainty that I have to remain calm. I have failed to do that.
I have now printed a checklist when I buy shares. I must answer the questions clearly before buying. This will take out the impulse buying that I sometimes have.
If the market does rebound, it will hit my buying indicators for sure. This time round, I will buy only on triggers and nothing else. Top up will be on 1 day after rebounding on support level. I will no longer do cost averaging (99% sure). Each position will be characterized by its own cut loss point. Exit strategies need to be refined though. To wide a cut loss means that I might be too late. To narrow a cut loss means that I will be incurring a lot of transactions.
But anyway, all in all, my fund price is still a $1.40. This means that I am still having a 40% since last August. Nothing to be proud of but I think its indicative that my method does work. |
| posted by Nenix @ 8:18 PM |
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| Friday, August 03, 2007 |
| AAR2 |
Risk exposure is important. One of my potential mistakes is that my holdings are too exposed.
Riding the profits is one thing but risk exposure is another. Though I cutlosses quick, I overcut those that are not supposed to be cut. Emotionally, I think I am not there yet.
Maybe I should consider hedging my cash equities? Maybe I need to tweak my cutloss such that I will only cut on huge selldowns?
Things to consider:
[] One day price shocks
[] Corrections
[] Handling of leveraged positions
For this selldown, what impacted me the most is the drawdown of OKP and FerroChina. But then thats the life of trading. You win some, and you lose some. What is important is that your method has positive returns in the long run.
I really feel that my framework for trading is already there. And whats left is to finalise the details on which are more important. Dealing with price shocks, dealing with sudden triggers of selling signals. Risk management on leveraged positions etc.Labels: NenixDreams Fund |
| posted by Nenix @ 10:02 AM |
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| Wednesday, August 01, 2007 |
| AAR |
Ok. Today, I made mistakes again. I'm super frustrated with myself. My profits from 11th June was wiped out. Currently, I'm holding an overall 44% returns since August 2006. I've liquidated all my stocks and now holding 100% cash. I shall now do an After-Action-Review.
While it is right of me to cut loss for most of my stocks, as they had hit the volatility trigger, there are stocks which i sold because I panicked as most of my stocks fell beyond the volatility limit. Seksun, BioTreat and Brightworld shouldn't be sold.
On the contrary, Ferrochina should be sold the moment its volatility limit is triggered yesterday. Instead, I chose to override it, wanting to focus on longer terms. If there is a lesson to be learned, I must rehearse fully of what happens when such scenarios happen. My maximum cut loss limit does cater to such situations, but I sold those that I should not have sold together with those that should be sold.
In the February correction:
NDF fell from $1.28 to $1.11, which is 13%.
STI fell from $1.32 to $1.22, which is 7.57%
In the slight correction in June:
NDF fell from $1.65 to $1.52, which is 7.8%
STI fell from $1.48 to $1.45, which is 2.02%
In this August correction:
NDF fell from $1.74 to $1.44, which is 17.24%
STI fell from $1.50 to $1.40, which is 6.67% (not ended yet)
Conclusion is that during the bull run, my stocks accelerate much faster than the STI, but the impact of fall is much greater as well. I feel my timing of buys have not been good enough, or maybe, my cutloss is not tight enough. I seriously need to rethink it through. Tight cut loss = more trades = more cost. Broad cut loss = less trades = less cost but higher loss. Its difficult to understandLabels: NenixDreams Fund |
| posted by Nenix @ 10:19 PM |
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| Guilt |
| To those that follow my stock picks, I did forewarned them that I will cut my losses swfit. However, it seems like its not easy to cut loss, and it happened so suddenly as well. I'm feeling really guilty now, it feels like its my fault even though I don't think they will blame me. Maybe from now on, I shall not recommend stocks anymore. I feel more responsible if I manage their money instead. At least I know I will limit the losses more swiftly. |
| posted by Nenix @ 3:27 PM |
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| Last bit of ammo |
Used my last bit of ammo on Ferrochina. Bought some at 2.35.
Cost averaged to about 2.58.
Just like playing RPGs, I think I used up my items way too fast. This is now testing times and I would not be suprised to see me cutting on my loss.
Hopefully I will find some "ammo crates" somehow.. hahaLabels: FerroChina |
| posted by Nenix @ 11:02 AM |
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| The selldown continues |
Seems like the selldown continues. Going long term is quite "traumatising" as paper loss is so significant. But I have to tell myself to stay disciplined to my approach. Haha.. it's self-encouragement again.
All the best to the rest! |
| posted by Nenix @ 9:26 AM |
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| NenixDreams Fund |
| Fund launchprice on 1st August 2006= $1
Target for 2007 = Beat STI index
Current price of NDF as of 1st Oct 2007 = $1.58
Current price of STI as of 1st Oct 2007 = $1.54
Difference with STI index is 0.04
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