Bursa Malaysia Portfolio 2020
My portfolio has changed so much since 2 years ago.
Having read much more on stock investing, I have modified my investment strategy. I have traded more often, suffered losses, but overall still far better than the 'buy and forget strategy' deployed earlier. One big lesson was that I realised buying stocks without solid track record of profitability would almost guarantee a loss in due course.
Only 3 stocks survived from the previous list, with the rest being struck off painfully with losses.
- PANAMY - Dividend contributor.
- CARLSBRG - Dividend contributor.
- ICAP - Substitute for long-term FD.
- TOPGLOVE - Explosive earnings growth.
- MFCB - Growing earnings from power plant.
- PENTA - Growing tech company recognised as Forbes Asia's Best Under a Billion.
My investment strategy: (updated)
Long-term investment + Short term trades. The best of both worlds where I enjoy dividends from dividend stalwarts while having some fun trading profitably growth stocks. Not all trades are profitable, but combining fundamental analysis with some technicals increases the probability of gains.
Buy dividend & growth stocks. I have suffered capital losses on holding dividend stocks like PANAMY despite providing dividend yields which beats the FD. Trading growth stocks like TOPGLOVE & MFCB enables me to obtain higher capital gains compared to dividend gains. Although these trading gains aren't as predictable as dividend gains, buying on dips and selling at near peaks have offset nearly all my previous losses.
Diversify. Don't put all your eggs into one basket. Too many property counters previously amidst the property market slowdown meant this part of my portfolio was doomed.
Buy stocks with positive cashflow. TALAMT & L&G had negative cash from operations. Apart from ICAP, all stocks from my current list had positive cashflow from operations. The intrinsic value of a company depends on its future cashflow.
Keep cash. Another important lesson was the March 2020 stock crash where I did not have sufficient cash to buy stocks at super low prices. Expensive Opportunity cost.
Buying stocks lower than its net asset value does not mean it is value buy. All Property counters from my previous list showed exactly that.
Other stocks like SAM & HARISON were sold at decent profit in exchange of trading growth stocks. SAM seems very promising, but with Covid-19 derailing air travel, I will only collect it back after Covid-19 subsides. HARISON was a steady dividend play, but its profit margins were dangerously thin & may fall into a loss. BPLANT was a tragedy as it deteriorated from a solid profitable dividend stock to loss-making penny stock.
Last but not least, the golden rule is to buy growth companies at a reasonable price. (GARP)