To me, 40c represents a premium to the NAV of 38.5c and personally i feel that a discount to the NAV is warranted in the first place for this counter. And moreover, the last result wasn't good. Next year dividend cut might even take place should the earnings continue this way. Long term wise i am still bullish on this counter, knowing where the bulk of its business lies in. However, the price of 40c is too attractive for me not to sell it to the next better investor. Put it in another way, i would not take lee metal private at 40c, but at a lower price than that.
The reason why i bought it at 30c a few months ago is because of its discount to the NAV and I feel that going forward 2c might be maintained. However with this sort of weak earnings, it becoming harder to tell. Personally i dislike buying and selling within such a short span of time and the reason why i had lee metal in the first place was to add 4 streams of dividends in the coming months. But things turn out the way it did and after careful consideration, for me, this is the best course of action.
Sure, i could still be entirely wrong in my thinking, And some billionaire could appear and take lee metal private at a higher price... I don't know
Disclaimer:
The above forms ONLY my own personal views.
Ang gong gong,
ReplyDeleteYou cad you!
Well, at least your holding of Lee Metal Group lasted longer than Britney Spears' marriage!
When we are clear on the reasons why bought in the first place, then selling becomes "easy" when the reasons are no longer true ;)
haha...true.
ReplyDeletebut looking at the information, i hope pple don't go away with the idea that making money through the stock market is as easy as 123
it is not.
Is it safe to have account number, order number displayed? Would think better to err on side of caution
ReplyDeleteu got a point
Deletedeleted it already
Morning Paul,
ReplyDeleteOne of your investment principles is not to time the market. However, what do you do with your cash after you sold a "huge" investment like this?
Do you put the cash back to work, buying existing counters that you deem still cheap?
My challenge is that although conceptually, I understand that timing the market the silly, but at this "elevated" level, with the market having a long bull run without meaningful correction, I am getting a little uncomfortable.
Would love to hear your thoughts on this please?
PS. Thank you for your generous sharing. You not only save lives through your medical practice but also save people from financial mistakes through your posting! God bless you and all your love ones! :)
morning jacky,
Deleteyes, i am in the market most if not all the time, as i realise from early, that i do poorly if i tried to time the market.
my primary focus is on cash flow and increasing it. taking profits off counters is secondary to that. once we are able to increase our cash flow, the overall value of our investment will tag along in a similar fashion.
so i don't prefer to have too much cash lying as cash.
quite a lot of studies and reports suggest that more money has been lost in not doing anything than actually staying vested. and on and off we read reports that even investment chiefs of our local banks have been fooled by the market, ended up selling counters bought by their own money in anticipation of impending sharp market drops which never did happen.
so, in cases when i must sell because the price of the counter has gone beyond my expectation, i would enter these funds into more undervalued ones.
Morning Paul,
DeleteThank you for taking the time to elaborate. I made tons of mistakes and wasted more than 10000 hours of my life trying to time the market.
Your blog open my eyes to dividend growth strategy, which really makes sense whether the market is up or down. As long as you have income from your day job and you are frugal, you can keep pumping cash into this wealth machine. Thank you for your generous sharing.
I am still curious about 2 things though:
1. During the 08/09 crisis, were you fully vested and if so, your portfolio might have fallen significant. What did you do portfolio wise, what were you thinking, were there any doubt that this time is different?
2. Have you ever considered using ETFs like Vanguard Dividend Growth (VIGI)? This will save lots of time and provided diversification.
Would love to hear your view on the above please? Thank you and wishing you a fruitful week ahead. :)
hi
ReplyDeletesorry for the late reply and apologies to all readers as i would be providing an update on my portfolio in the next few days. Usually i update it at the end of the month. The reason is because I have been doing quite a lot of travelling recently.
no problem, Jacky.
I will try to answer your 2 questions
1) my portfolio was smaller in 2008/9 period and yes, it had reduced sugnificantly. I recall those days when the STI slump 150 points in a day. the question i would ask myself is whether the companies will go bust. but nearly all those counters still pay dividends in 2008/9. this provided me with the security to continue holding on to them and with the dividends I was able to buy more of the counters for the same amount of money, reinforcing that i couldn't go too wrong doing that.
2. ETFs, perhaps, when i am retired from managing my portfolio, i would consider advising the people managing it to adopt this.
but myself, no. why? the very big difference is that ETF pays dividends twice per year. if you examine my portfolio, it pays dividend every few weeks at the most. thus over time, the compounding power is much greater than that of an ETF. I can add every few weeks, unleashing two very powerful tools ie dollar cost averaging and multiple compounding.
Hi Paul,
ReplyDeleteHardly passive，your dividend investing strategies. LOL
I am out of Lee metals too. Just that I sold half when they announce their poor results. Like u said, their 2 cents dividends might be at risk.
Then it went up, and I unload the rest, before they announce the potential buyer.
I suay. LOL
haha
ReplyDeletewell, its not automated. ie i still have to click the buy button each time my dividend comes. so totally passive, no lar
as for lee metals, to me its like someone force put money in my hands, how not to take?