Dear fellow readers,
Once again, these writings are just my humble highlights (not recommendation), feel free to have some intellectual discourse on this. You can reach me at :
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Website / Blog : http://www.tradeview.my/
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Before, I get into the details, a quick refresher. On 24th March 2020, I posted this article "Cash Is King, Time To Deploy?". It was one of the articles that received wide attention. For those who missed it, the link attached as below :
In the article I wrote at length about the meaning of " Cash Is King", importance of having "dry powder" / "war chest" so it can be used at time of needs. 5 days earlier, I wrote about - Recession is finally here? Or is it an Opportunity of A Lifetime? For those who missed it, the link attached as below :
Now 2 months later, on 20th May, the picture is entirely different from back then. I am sure most people can see from the charts below that the market within this 2 months has undergone an intense V-shaped rebound.
There are many reasons as to why this has happened but today I would like to just keep this article short and focus on showing you all the outcome since 2 months back when we deployed our cash reserves and make big investments into the stocks of our choice. In between, we added stocks along the way. Similarly, we also called to sell on strength. This list is the same as the one we shared in our public articles to everyone. (Feel free to cross check against our articles above as we are honest & transparent to all)
We previously shared the following stocks as our favorite as at 24th March 2020 vs the price today 20th May :
2. OCK - RM 0.38 vs RM 0.56 (47% Gain)
3. RCE Capital - RM 1.46 vs RM 1.85 (27% Gain)
4. DKSH - RM 1.92 vs RM 2.60 (35% Gain)
5. Riverstone Holdings Ltd (Singapore listed) - $ 0.80 vs $ 1.76 (120% Gain)
6. Pintaras Jaya - RM 2.25 vs RM 2.77 (23% Gain)
7. GCB - RM 1.90 vs RM 2.75 (42% Gain)
8. MFCB - RM 3.67 vs RM 5.95 (62% Gain)
9. Scicom - RM 0.605 vs RM 1 (65% Gain)
10. RHB Bank - RM 4.94 vs RM 4.76 (-4% Loss)
11. Pentamaster - RM 2.83 vs RM 4.43 (56% Gain)
12. Public Bank - RM 15.24 vs RM 15.42 (1% Gain)
13. QL Resources - RM 6.97 vs RM 8.48 (22% Gain)
Our total gains of +42% exceeds KLCI rebound of +17%.
**Please note our gains measured excludes dividend gain, and some stocks we bought at lower price / average down, some stocks we have sold. Some we are still holding. Our subscribers would know.
The purpose of our writing is not to brag but to show proof of our investment philosophy "investment based on fundamentals will give you the sufficient confidence to deploy cash to invest during the worst of a crisis." Now, based on various reasons that we have shared over the course of our writing, we feel this is a very good time to realise our gains. Of course, many would have their own opinion and views. We may not be necessarily right simply because if indeed a vaccine is found, the market will rally further. If the Government extends the ban on short selling and margin call, the market will continue moving upwards. If US continues stimulus packages in tandem with global Central Banks, there may still be legs to this rebound rally.
However, it is our view as a Fundamentalist and value investor that the current market has moved to a point whereby all earlier negatives priced in the share drop have been cancelled out in the share rally. Yet, the negatives in the economy remains and fundamentals of the companies' are not reflected sufficiently in its share price.
We think there will be protracted period required for economic recovery and we think the commercialisation of vaccine will take longer than 9 months. Therefore, we would like to sell on strength, realise the gains and increase our cash holdings once again to above 50-60% level. That way, in the event the market sells off again, we have enough cash to reenter the market. For shares that we intend to continue holding long term for the dividend yield and growth are like Oriental Holdings Bhd. and Riverstone Holdings Ltd. These companies are the kind I would say multi-bagger, value stocks and most importantly, holding such investments, I can sleep well at night. I like this saying during a rally. It's by Jesse Livermore - "The top is never in sight when the vision is vitiated by hope"
Do stay tune for our next write up on “Principles of Investing - Rule 4 : "Be Cynical, Be Sceptical & Avoid Tips”
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Food for thought:
http://www.tradeview.my/2020/05/tradeview-2020-2-months-later-cash-is.html
