we see both counters CDG and SPH dropping to multi year lows, the former ended just above $2 today and the latter about $2.60 today.
both are the result of disruptive forces of today's modern world
i believe these two counters belong to many people in singapore, including myself.
i used to think they were very safe. perhaps not so now.
However, but over a long time, my guess still is that both should be able to weather this and most likely they will not become history in our history books.
i did a portfolio check today, and it remained relatively unaffected still.
main reason is that each counter is about 4% of my total portfolio.
hence every 10% drop in one counter would represent a movement southwards of 0.4%. 2 counters even 20% each will at most affect 0.4x4% or 1.6%, which is rather negligible still.
main thing i would like to ensure is that they still can maintain their dividends, though a small cut is still perfectly acceptable to me.
if i had only 5 counters in my portfolio of 20% each, and it contained CDG and SPH, the same drop of 20% in these two would mean 4x2% or 8%, which is actually 5x more than what i had, and its nearly one tenth drop.
so portfolio management is quite important to take care of unknown unknowns
so portfolio management is quite important to take care of unknown unknowns
it cuts(matches) both ways, meaning: the benefits will be small when price rises.
ReplyDeleteyes, you have a point.
ReplyDeletemy main focus is really on cash flow and investing to increase cash flow. the belief is that once we are able to increase our cash flow, we are able to purchase more equities or similar to further increase it. to that, the price will tag along. absolute prices are secondary, as selling when the price goes up mean selling the cash generation asset.
risk must be controlled and the effective way i employ is % allocation rule. the benefits of a single counter rise is a bonus when it happens.
the main focus of my portfolio and the way it is constructed is still cash flow.
thanks
true, prudent investors take care of downside. let upside take care of itself.
ReplyDeleteyes, to me, i focus on cash flow and adoption of measures to increase it. over long term, once we are able to increase the cash flow, the asset price or portfolio value will 'catch up' with it, and like what u said, the upside will be taken care of.
ReplyDeleteGiven your strategy, will you then add more CDG and SPH to average down (if your current cost is higher) since still below 5% of your portfolio?
ReplyDeleteyes, i have been adding both counters periodically with dividends from other counters. same amount of money getting more shares since they are at lower prices.
ReplyDelete