My investment mistakes

November 18, 2008 at 4:53 pm Leave a comment

Wow, it has been a year plus since i posted the first article on this blog. How time flies. Looking back, it is time to review my mistakes and avoid making them in the future.

Sinomem was one of my mistake as i was blinded by the prospects of a brillant pioneer in the membrane technology and failed to heed the red flags which i did see but dismiss them in my stubbornness to project growth into the future which may never come (who knows?) . Although i have sold part of my Sinomem holdings during 2007 to recoup my capital, it still pains me to see it falls to deep depths. What is even more painful is that its subsidiary,Reyphon has been undergoing misgovernance problem and now is bleeding.(Chinese companies really are a headache with their ‘Chinese’ way of doing things). I thought Mr Lan ,CEO of sinomem who got his professorship in Singapore could rein in this China guys but obviously i was wrong. Still, i haven’t sold the rest of my holdings because now it is definitely undervalued because the other parts of business is still kicking. Let’s wait for Mr Market to sober up before deciding what to do with sinomem.

Another mistake was cm pacific, i sold too early. Though the price now is way below my selling price, but i could have been more patient,collect the dividend and sell later. However, i am glad that i sold as i avoided the bearish sentiment and there are signs from the company showing that the toll road volume are not doing too well,though profits are still up due to toll rates rise,this cannot be substained. Anyway, the subsidy income will run out soon in a few years time and now CM pacific is mainly dependent on two toll roads which i think is quite risky. The NZ property business is in a slump now considering that NZ is in recession,so this will pull down the profits too.

Next blunder is SPH, i still hold on to the shares due to the fat dividends, however, its price performance has been disappointing. My margin of safety is too low. It has been investing in all sorts of things from Razor TV to shareinvestor, Sphere exhibits, Opennet broadband fibre etc, which in my view are either loss-making or earn much less than its monopoly newspaper business. However, it still has Paragon and a cash hoard in equities and bonds which can be realised into cash for shareholders if it wants so. I am still waiting for that day, hopefully Tony Tan comes awake to that idea.

Final blunder, Sincere watch. Although i have sold part of my holdings during 2007 to recoup my capital. The rest of my holdings have been locked up after the delisting of sincere watch as i did not accept Peacemark offer of cash and share. I am not sure whether i am lucky or not, cause Peacemark recently went into liquidation and sincere watch is now waiting for a buyer. I have looked at Peacemark balance sheet before deciding on not accepting the offer. Its debt is simply too high and the price of Peacemark shares on its offer were too high (Why didn’t Sincere’mgt ask for all in cash, now their Peacemark shares are all gonecase) However, now is my time to suffer as the new buyer for Sincere has not appear and so a board can’t be constituted, which means my dividend from Sincere, declared and approved in an AGM earlier could not be sent to me. Besides that, a previous  share buyback offer by the old board after delisting Sincere now looks to be in the doldrums.Also, i am upset at Sincere mgt not informing me of the latest news (i had to dig it out on the internet myself) This episode reminds me not to be greedy, i should have sold the rest of my shares in the market, but i was confident of Peacemark declaring a good dividend(cause they need money for the acquisition) and coming up with a good share buyback offer. My predictions came true, unfortunately,my best laid plan went awry after Peacemark creditors decide to get back their money due to the credit crunch. Looks like we can’t fight the macro environment despite getting the micro facts right. What to do, i can only wait patiently for the macro to turn before deciding my options.

This is no mistake. SP Chem is holding up well due to a delisting offer(hopefully,it won’t go wrong like sincere) .Although the price is not near the peak last year, still i can have no complaints as the share i am holding now a bonus shares as i have already sold the rest for a profit last year. It is real funny that i previously has the least confidence in SP chem due to their high debt level and ambitious expansion plan which would strain working capital further (though i like their management), however this has turn out to be my best investment so far.

Entry filed under: Mistakes. Tags: .

The investment marathoner A Suggestion to Temasek and GIC: Buy Berkshire Hathaway instead

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