Review 2013 / Preview 2014

Year 2013 Review

Year 2013 is an encouraging year for me in term of stock market investment. Though I didn't set a target, I have achieved a portfolio return (Jul-Dec 2013) beyond my own expectation.

The performance of my portfolio is largely due to the bullish sentiment in small cap stocks in 2013. There is no big cap or index stocks in my portfolio, as my priority at the moment is growth.

The best performing stock in my portfolio is undoubtedly Inari, which gains 123% in 5-6 months time. I came to know Inari only in June when I screened through almost all the stocks painstakingly to find a few to invest in.

Initially I decided to make Inari my heavyweight stock, as I was very excited about its prospect. However, I ended up diversifying into other stocks such as Pantech, Gtronic & Scientex. The failure to increase holding in Inari has become a little regret to me. Sometimes diversification may work against us.

Looking back retrospectively, I think I should not have bought Pantech, Gtronic & Scientex at that time although all of them are good companies, as they are not very undervalued. Only Gtronic managed to make significant gain (30%), while the other two are flat. 

Lesson No.1 in 2013: Don't buy only good company, but good & undervalued company.

       Best performer in 2013: Inari

Other stocks that perform decently well include YOCB (38%), Latitude (34%) & Matrix (18%). 

I found YOCB "accidentally" when I was searching for Yokohama for its financial results. YOCB which sits right beside Yoko, caught my attention just because of its funny name. I checked its financial performance and its fundamentals, it's good.

As I thought YOCB was an unpopular stock in an unpopular industry, I decided to invest only a little as an experiment. What has happened was, YOCB suddenly gained market attention and its share price made a rally. However, I didn't top up its shares.

Lesson No.2 in 2013: Be more confident with own analysis.

For Matrix, I actually came to know this stock much earlier. Some investors were talking about its impressive dividend yield. Anyway, I didn't have any interest to study it at that time. 

I'm not sure why, one day in October I decided to take a deeper look into Matrix. Then I said to myself, why I didn't study it earlier? I've missed lower entry price and some dividends. I bought Matrix with an aim to make it one of my core portfolio stocks.

However, before I have more fund to accumulate more Matrix's shares, I met Latitude Tree in the end of November. As a result, my focus has shifted once again. Would over-diversification work against me again?

Anyway, I'm still within my target of 8-10 stocks at a time.

If calculated from 1st of July until 31st Dec 2013, Tambun's share price increases by only 18%. This is a bit of disappointment to me as I expect more and it carries a high percentage in my portfolio. However, if calculated from 1st Jan 2013, Tambun has gained exactly 100% in 2013 (from RM0.755 to RM1.51). This is the reason behind my higher unrealized paper profit. 

As for Tropicana which suffers 35% loss, perhaps I should set a cut loss rule in the future. From my previous habit, I probably would have averaged down Tropicana a couple of times. But this time I didn't, fortunately. Anyway, I still have some confidence in Tropicana.

Lesson No.3 in 2013: Don't buy recklessly, especially when the stock has bad "Qi", ie in downtrend.

Year 2014 Preview

I believe that one will have a better chance to achieve his/her goals if he/she writes down the goals and shares them to others.

For year 2014, I'm not too confident that I can achieve better stock investment result than year 2013 (39% from Jul-Dec 2013). 

A more realistic target should be to beat the KLCI index. However, I hope to achieve at least 30% return every year. If not, it's hard for me to achieve my long term early retirement plan.

If everything goes well, I will promote Latitude to my core portfolio in 2014.

I am likely to sell quite a big portion of my shares later this year, as more cash will be needed to bring 6 persons for vacation abroad.

Besides, I also hope that my property investment will start to bear some fruits this year, at least to lessen my burden on loan repayment.

Lastly, I wish everyone a healthy and prosperous 2014.