Wow, “Sell in May and Go Away“, and the “Ghost Month” have been fulfilled this year. Now, with the QE3, the next phenomenon that we can look up to would be the “Santa Clause Rally“. Tracking back my portfolio report, which was on August 15: <http://imbangklase.wordpress.com/2012/08/15/torn-apart/>, my port total equity was at 872k. I’ve actually fared badly during the ghost month, my port even went as low as 837k, with the help of some restructuring here’s what my port looks like:
As you can see, I’m still on the verge of recouping my losses, as I started the month of August at nearly 900k+ in equity value. I’ll share to you my mistakes during the whole ghost month period:
1. Crappy Trash Stocks – I cut loss on several illiquid and no value/story stocks real hard as I was really uncomfortable with the positions I had with them. These kinds of stocks are really inactive and have a very wide spread, not the likes of PHES, WIN, & EG, which are actively traded and where the spread isn’t that far off. It was really bad decision making on my part. I may have been overconfident on my picks as I was on a spree back then. I got unstable and sold the bids posted lol taking about 20% losses (30k) on my positions. Anyway, just to inform you, one of the stocks that I am talking about is PRMX–just so you can avoid these kinds of stocks, or at least know the implications of taking position in em.
2. Trigger Happy – I also have to admit that I’ve been quite unstable during the whole month of August, as I was trying to force stock trading with my more important responsibilities in life. I used to buy my positions in one go, before or in tranches of 50k to 100k LOL, this style is OK if you really got the trend cornered, but in a sideways-to-down period like the “Ghost Month”, it was better if I accumulated slowly, to give me leeway to the day-to-day changes in prices. Anyway, right now I’ve learned to be more wary of my buying and selling.
3. Portfolio Management – One thing that chipped lots of money from my port would be my instability with regards to my port. As you can see, I had almost half of my port positioned in AC, which sucked liquidity in my port since I commited to hold my position (entered at 414) for the whole August. Unfortunately, my plan did not work as I expected because after the GDP report on Aug 31, we were still being sold down. AC even went below my entry price, good thing I was able to dispose my position near 418 to 420, for a very small amount of profit. I was that confident in my call with AC that it affected my ability to play other trending stocks because I was really committed to hold it till the end of august.
If you’ve noticed, among the other stocks (PGOLD & ALI) that had Private Placing, AC was the suckiest. PGOLD went as low as 24′ish? or 25? and if you bought then that was a good 20% already (current price of 30+), same goes with ALI, it went as low as 19, and now it’s at 23+.
Point is, try not to be super biased on your positions, try to keep an open mind and keep a balanced portfolio. Because of this experience, I am now more inclined in balancing my allocations in my portfolio.
4. Sitting Tight – Due to my first three mistakes, I kept on adjusting my port, buying here, selling there, blah blah blah. I think I had lot’s of cut losses during this period, haha! I did lot’s of reworks in my portfolio which caused me some bucks too! Looking at my port on Aug 15, I think I’ve done better if I just slept on my positions and held them till now! Again, I cannot reiterate the importance of sitting tight and having the patience to stick with your picks. Sometimes, due to one’s addiction or passion to the market, we can’t help but to keep checking on our ports and to try to make money daily, but on reality, too much of this can actually be detrimental on our performance. I have to remember what Jesse Livermoure said:
After spending many years in Wall Street and after making and losing millions of dollars, I want to tell you this: It was never my thinking that made the big money for me. It was always my sitting.
Here’s an update of my positions:
1. AC – after being sold down, I think it’s now good to go, at bullish periods like this fund managers mostly buy the leaders of a particular market.
2. EEI – after cutting on my prior position on EEI, I think it’s about to enter a new price range soon, I bought an initial tranch, from here on I’m more inclined to accumulate this stock, although current avg price is a bit high at 7.89. Thing about this stock is that it has an inconsistent spread. One should not be mislead by the minor movements in the spread, focus on the bigger picture. Seems like I’m having a hard time to catch EEI at a good price, it’s better to hold and just let the market realize the potential of this stock. Will add more in the future.
3. EW – This was a definite buy after breaking the 20.00 levels, it has consolidated enough and is now surging towards a higher price range. I’m inclined to hold this, and just let it flow. Take note of the buying of institutional brokers in this stock (ex. CLSA), which may prop the stock higher in the long term.
4. FOOD – Test buy, chart wise it seems to be hovering around it’s high points, which is something to take note off. Looking at the 6 month chart it’s been consolidating for quite some time below 1.60. Further positive developments on this stock may prop it higher. I’ll add by that time, for now focus is on blues and plays that already have established stories.
5. GERI – Repositioned in this stock. Still the same boracay/tourism play. Upside seen on the developments on caticlan airport, and the tourism developments on the PH. NAV is deemed to be around 4.00+. Check out the buyers of this stock, Macquarie being the main buyer. Definitely some fund, positioning here. Haha. I don’t know but Macq has this tendency of buying first into stocks that bloom later on. See CMT, LC, MEG, OV as some examples. I like the chart now. It definitely held above the support of 1.80
6. LCB – gold breaking and sustaining $1700, revisions in EO, potential settlement in mining policies, and what not. I also liked the chart prior the sudden movement but unfortunately I was only able to buy a few shares of this, could’ve made quick big bucks for me, but it’s OK. Now holding, specially since we just entered the QE3 party.
6. LPZ – Seems to have reversed already, rsi divergence, macd buy signal, what more? I expect this to move with its babies, ABS, FPH, FGEN, ABSP. Haha among the blue chips this one is kinda hated, which may or may not lead to surprise upside potential, we’ll see.
7. MPI – Slowly but surely, that’s what I think about this stock. Just holding till whenever, consolidating for some quite already, watch it this month 🙂
8. OV – Test buy, they have developments in Galoc or galoc II, and plus the rise of oil prices. Still main pusher, Macquarie is still in this stock. Will it go back to .055? Stock has long term potential, but I’m more inclined to just make a quick buck out of this stock.
9. PIP – My baby, just gonna let my profits run on this stock, consumer plays are still one of the main themes, check out the buying of institutional brokers, some funds are just starting to pay interest in the stock =) Long term hold for me.
As you can see, most of my positions are now intact, all I have to do is to sit tight and be patient. If you bought during the climax of the ghost month, all you have to do now is to hold. Congrats to those who bought some blues at really cheap prices. MEG, BDO, AGI, etc. =) For those positioned, let’s just enjoy the show. Apologies for not posting consistently as there was nothing much to write about during the ghost month, and I was quite busy as well, as for me it was more of just a holding period before the QE3 rally we are experiencing now. Seems like patience gets rewarded well!
Please feel free to comment any questions or suggestions! You may contact me at my FB: http://www.facebook.com/imbang.klase.1