Monday, December 25, 2006 not open today

Hmm, just bored that today the market is not open.

As a result, I did some management of my portfolio spreadsheet. I did it once already so this is just some minor adjustments to the calculations etc. I believe that good records of portfolio is essential not just for accountability but it serves as a historical profile of the stocks you own. Maybe I should include why I buy the stocks and why I sell them. That will record the psychological aspect of the trading/investment moves as well. Hmm, I'll consider revamping again for 2007.

I decided to include dividend calculations into my total returns to give a clearer picture of my whole state of affairs. In the past, I did not include it because I wanted to focus mainly on capital investment, not income investment. The dividend that I get from holding stocks should be the bonus that I get from capital appreciation of my stocks, not the main thing. I still believe in that too, after my Robinson dividend incident, haha!

Oh, just read about the news that dbs was awarded retail banking license in China. This is going to affect the shares price positively because if everyone in china just put 1 yuan, that's going to a hell lot of deposits that dbs is going to get. If I didn't remember wrongly, 9 other banks got in. DBS, however, is the only singapore bank to get in to China. Since DBS already as big presence in hong kong, I think with the addition of China, DBS shares can have the potential to hit sky height and overshadow its rivals. Excellent blue chip to hold for long term, if you have the moo-lah. I just checked, last closing price of mother share for dbs is $22.2. To own even 1 lot I would need $22,200. I'm not rich, how to own it??

So if I want to ride on this what should I do, buy warrants? But warrants expire in months times, so I cannot ride fully on the shares, and no dividends too. I guess I need to put in most of my savings into shares. It's a hell lot better than the miserable interest they give you. Invest in maybe 1 lot a year? That will take a million years man..

I checked that last dec, the share price for dbs was 16.5. If I invested 1 lot last dec, I would only have gained 5700, excluding dividend. That's a cool 34.5% ROI. However, I don't think its worth it. $16.5k tied up like that is too much. Sometimes it's not the ROI that matters but the absolute amount. 16.5k tied up for one year is 16.5 k tied for for one year. Unless I have around 3-5 lots, otherwise 5700 is too little.

Trading warrants, abeit more risky, the returns can be much more for less capital held. Just take a look at my warrant trading for the past one month. I've lost money and gained money, but overall my returns from warrants stands at $3.9k, with no capital held up. Of course, there are some sleepless nights but that's all part of the game. And I'm only a newbie.

I think it's possible to do both. Since investment requires your capital to be tied up while contra-ing warrants do not, I can actually do both at the same time. But before I do that, I really need to build up my investment capital, otherwise it'll take far too long to see good returns. It's a much more balanced strategy in the long run too.

What do I suggest?
1. Hold plenty of cash
2. Wait for major bear market/ or smaller bear raid
3. Buy good quality bluechips (meaning less susceptible to geopolitics, oil, natural disasters) - banking stocks is clearly a good one, together with F&N (deals with consumer products, reit, what else haven't they touched?)
3a. Can consider ETF also, not cheap but can buy in 100 lots, still very good.
4. Keep on accumulating, holding for super long term
5. Hope to make it big before you age and return your IC

The rich really gets richer, I don't see how they can't get rich if they anyhow whack blue chips in huge amounts. To hell with meritocracy.

Total returns (includes dividend from now on) = $890