Tuesday, April 05, 2016

Salted fish resurrected!

I blogged 2 years ago here that my salted fish have resurrected (咸鱼翻身). But shortly after that, it went limp and died again. It's only recently in 2016 1st quarter that I saw signs of life in the salted fish. By now, the salted fish is extremely fragrant because it had been salted for 6 long years!




Here's a chart to show you what's happening in the last 6 yrs. They had a consolidation exercise of 1:5, so the price is multiplied by 5 from my last posting. The chart is taken from Investingnote, a charting software that I really like very much.




I bought it at post consolidation price of $1.275 around april 2010, which is the nice little peak that you saw on the chart above. It's based on rumors of this company going to be taken private but obviously it didn't happen. So it went down to about $0.50+ before going to its first resurrection, which I didn't sell because I was greedy. It went down again and up for the 2nd resurrection and I didn't do anything also. Then suddenly this is all over the news, with several brokerage firms reporting on how well it is doing and so on.


A good company bought at the wrong price is still going to suck, so just shut up and give me back my money. I sold today at an aggregated selling price of $1.1395, making a loss of $0.1355 per share, but it is made better by the dividends received amounting to $0.165 per share.


Buy price: $1.275
Sell price: $1.1395
Profit: - $0.1355 per share
Dividends per share: $0.165
Total profits: $0.0295 per share

% gains (exclude brokerage): 2.31%
% returns (include brokerage) : 2.2%
Period of holding: nearly 6 years!
Ave returns per year: 0.37% pa


A few lessons to take away from this 6 yrs:

1. Don't invest based on rumors. This is the last straw, and I've never done it since.

2. Dividends is an important part of the returns while waiting for a catalyst to happen. In this case, it forms an overwhelming huge % of my returns. Without it, selling at my current price will result in a loss.

3. If you don't need the money, you might want to reconsider cutting loss. Salted fish might be resurrected! If you are going to sell, then don't look back and reinvest it. If you're going to sell it and hold the cash, reconsider. Basically there must be a better use of the money you are getting from selling it. Then again, if you're good at stopping your losses, you also won't reach this stage lol

4. A good company at a lousy price is a lousy investment. Conversely, a bad company at a great price might end up to be a great investment. Valuation and price matters.


With this, my last salted fish had either been eaten with plain rice or resurrected and released back into the big ocean. Old already, I hope I don't have to eat any more salted food because it's bad for health!

14 comments :

Anonymous said...

咸鱼回生... not 翻身 bah... :D

(I'm still holding a salted fish from '08!)

Createwealth8888 said...

:-)

la papillion said...

Hi anonymous,

Haha, how about 咸鱼复生! Lagi power :) Wow, your salted fish is even more salted than mine haha! Any signs of returning to life?

Cory said...

6 years holding period is expensive if say you can earn 10% annually from the invested amount as this mean 50% loss as a base. Nevertheless resurrection is not a bad deal either. So congratulation !

la papillion said...

Hi Cory,

Yes, it could have been better if I use the money invested to jump into other investments. I would do that if I don't have any more warchest to utilise, but this is a small amount invested, hence it's not a significant amt when divested, esp at a loss. I'm nevertheless glad (and relieved) I'm out of this!

More warchest!

Rolf Suey said...

Very saltish indeed! Everyone is once green.

SMK said...

haiz why didn't you stop loss?
even after this, still haven't learnt the lesson of stop loss?

if got any other salty foodstuff, will they reincarnate? lol

Sillyinvestor said...

LP,

Not bad what... Unless u got out without a loss for a salted fish.

U managed to sell salted fish at cost u know!!

If i got salted fish, I go with porridge every morning ...

I got 2 salted eggs m, 1 salted prawn

Luckily still can go with breakfast

Think I falling sick soon lol

Like what Rolf say, everything is green once

Sweet Retirement said...

You are lucky. Not every fish revives after six years.

la papillion said...

Hi SMK,

Hahaha, to my credit, that was 6 yrs ago and I didn't had such episodes since, thankfully. These days I would keep to a planned exit and entry and plan B if it goes wrong. And I don't buy on rumors anymore without checking myself haha! That was my last salted fish, no more! All eaten or released into the ocean already!

la papillion said...

Hi SI,

Thanks thanks, it was a full circle to come back to those mistakes I made in the past. I felt a sense of relief and also felt some sense of restitution had been restored for being able to sell at a small profit. It should have been cut way back but I didn't and it's good to break even now :)

You take care of your health man...seems like you're the pillar of support in your family now. Support cannot fall, if not all else will fall. Salute!

la papillion said...

Hi sweet retirement,

The price went up to the same price point two times in the last 6 yrs, but I wasn't ready, haha! But you're right, so salted fish stays very dead even after so long ;)

Anonymous said...

Actually I have 2 '08 salted fish! Of course, picked up those when I was foolish and basically punting without any investment strategy.

One the name very awe inspiring, but is actually rotten beyond salvage - Celestial. Burnt like 3 month's salary...

The other is Midas, this one is trading at 30% of my entry price. Just leave it as cold storage since my holding is minute (3k shares). If one fine day this one comes alive then bonus for me. Otherwise it'll just sit in my pot to serve as a painful reminder.

:)

la papillion said...

Hi anonymous,

I've heard of both! Never touched celestial before, but midas is one of the hot stocks back then, so I dabbled this before. When I bought it it was at $1.78 back in 2007..now it's like zzzz

Even salted fish has its day, haha, just wait for it!