Thursday, October 24, 2013

1000 days and counting

Never in my mind would a 1000 days fund of RM50k (despite its size) be gaining 225%. Convert that into average return per year, it is gaining about 82.5% per year. Again as a reminder, it is a long term fund. I have never been thinking of it of being short term in my purchases and most (in fact all) of the holdings are testament of that. 2 are in apparel, 1 in retailing, 1 distribution, 1 job search company, 1 manufacture and sells toilet paper, 1 airport management company and the other is in tolled highway in which case the road is yet to be built and ready in probably 5 years time.

Those portfolio does not sound sexy at all. None are in the high growth sector such as biotech, oil and gas exploration or services, banks etc. I have never really tried IPOs. In fact, except for Oldtown, all the companies that I have bought into have already been in the market for a long time - at least more than 5 years. These are companies which we can track. IPOs are harder to track as we seldom get to know the management and businesses in detail as more often than not, we need to know how companies and its management behave.

The performance of 225% return would not be replicated, over the next 1000 days. In fact, the way I am thinking of it is a 4 year old kid going to college by the time she is 18, how much would she need. Would a RM50k investment be turned into a RM300k today's equivalent in tomorrows dollars? If that is the case, I am halfway there. Some people when their kids were born, they bought into insurance which would have costs substantial. Insurance is a kind of hedge (or rather protection) in case they are not around to provide for the education.

The fund is pretty much the same. The portfolio is consisting of companies which in the case I am not managing it, anyone who takes over do not really need to do much, but just let it be around. One of the performance which I like to highlight is the dividend's return. It has easily beaten the return (by more than 100%) in case I put in the funds into a fixed deposit which returned 3.2%. Who says dividend typed of funds would not provide a good capital appreciation.

The fund is also somehow a success for the short to medium term for me to proof that if we put our thinking cap into investments, i.e. looking at the logic and not being too greedy, there is money to be made from the market. What we need is to apply our knowledge, observe, learn from experience and be a little bit brave, which is investing and not just saving.

Anyway, tomorrow is the first time, the CEO of the country is presenting a budget post election (his own carriage) and I think what is needed is for Malaysia to be brave. And I am in full support of GST. Be brave!


newbie said...

Well done,Felice!Just a pity I only stumbled upon your blog after you have made heaps of return on your investment.Still glad to have found a blog a informative as yours,though.Hope you will have a better 1000 days ahead.Keep up your good work.Thanks!

panaceaasia said...

Hi Felice,

Congratulations on your wonderful performance. Your Freight Management recommendation is excellent. Checked with a couple of people in the logistics industry before investing.

The MD and major shareholder is capable and more importantly honest. The company has never reported an operating loss since listing.

panaceaasia said...

Sorry. I forgot to add. Thank you for sharing. I do not agree with all your recommendations but the majority of them are excellent.

My dream is to invest (a lot of money) in a Precision Castparts Corp (PCP). PCP grew from a small metal casting workshop to become one of the best compounders in US capital market history, up over 1,700X in three decades plus to a global giant with a market cap of $34.7billion.

An initial investment of $100,000 would have compounded to $170million.

May God bless you and your family.


P.s. Have you ever considered doing this professionally as a fund manager?

felicity said...

Maybe yes, when I am out of job :)

goh said...

In July, you posted on INsas with some facts on how undervalued it is, still you opt not to hold those shares and since then its climbed like hell!

NOt sure what is right or wrong, should you not split your portfolio between short to medium and long term?

I'm afraid if you switch now to long term you will miss out on the compounded growth that may come from some golden picks!

I'm learning allot from you and other. Keep posting.