Tuesday, September 2, 2008

My stocks portfolio - Aug 2008

My overall portfolio was down by 35.81% at the end of August 2008. It was a significant drop from the previous month due to the massive sell off on Cosco and SIA Engineering. I admit that I do overweigh on Cosco so that is partly a reason for the sharp drop in my overall portfolio. I realise it even before the sell off but I still choose not to panic and liquidate too early. A lesson to be learned is not to overweigh your holding in a particular stock unless you are 101% confident of the company. Overweighting may affect the volatility of your overall portfolio should the price of that overweight stock fall drastically.

There were two transactions for the month of August.
Bought Swiber, average price at $2.113
Bought Courage Marine, average price at $0.375

Latest quarterly report for Swiber was out on 13 of August. Revenue for half-year of 2008 is already more than whole year of 2007. Its half-year revenue and net profit increased by 337.4% and 230.8% respectively from the same period of 2007. Order book for the month of June 2008 was at a whopping US$664 million compared to US$176 million on March 2007. In overall, Swiber reported results which proved that they can deliver good earnings result but coupled with an increased in the level of debt which investors should be wary about.

I remember how irrational market can be when price of oil started its big sell off in July. Swiber was sold and dumped indiscriminately as a result. In my opinion there isn’t any logic to correlate the short term price of oil with the future earnings of Swiber. In the long run, oil is set to rise to US$200 per barrel. It is just in a matter of time. I personally think it this way. Even though price of oil has cooled down a little bit, oil and gas related companies are not sitting back and relax. I think they should be pressured to explore and research into new opportunities and regions before price of oil starts shooting up again.

Despite the short term correction in price of oil, an increased in level of offshore oil and gas exploration, fields development and production in South East Asia and India are likely to benefit Swiber in the long term. The most recent piece of good news is the soon to be built Equatorial Drilling Barge for deepwater exploration works. It has great potential to be deployed in deepwater wells that are not drilled at the moment. You may read that article from DBS Vickers.

I held a small stake with Swiber the first time I bought it. Therefore I took this opportunity to average down my buying price to $2.113.

Courage Marine is one of the few stocks which I bought since I started dwelling in stocks last year. It is a very low profile, debt free and cash rich company. Based on the dividends payout in May and September 2008, at the current price and exchange rate, the yield is around 15%. I took opportunity to buy more shares of this company bearing the fact that my holding with them is not at substantial level.

Courage Marine is an efficient dry bulk shipping company which focuses on infrastructure and energy related commodities. Its tight cost controls and higher freight rates have resulted in good profit margin and high Returns on Equity (ROE). The company topped the Marine Money International June/July 2008 rankings for overall financial performance. It is a prestigious award that ranked the financial performance of 99 shipping groups worldwide in 2007. You may read the whole article from here.

I received total dividends of $410.44 for the month of August 2008.

NoStockModeUnrealised P/L
2ARA CASH-32.10%
10GEN INT CASH-22.02%
15TAI SIN CASH-46.20%
18VICOM CASH-1.33%


Anonymous said...

dude I like your blog. It is clear and informative. However, looking at the size of your portfolio, don't you think it's a bit too diversified? Investors like Buffet only holds a very concentrated portfolio. Its a case of "Don't put all your eggs in one basket" versus "Put all your eggs in one basket and watch that basket carefully". What do you think?

Mike Dirnt said...

thanks for the compliment.

first of all i admit i made a mistake to start my investment journey at the peak of the market and during expensive valuations. i have learned from that

secondly im not buffet. if i am buffet or a stock expert, i will definitely choose 6 or less best stocks instead.

but even a great person like buffet made bad decisions. so retail investors like most of us will be worse off.

thirdly i dont hold big shares in each of the companies. so the beauty of holding many small stocks is that you dont need to monitor individual stocks at all. once i bought, i will just let the profit and losses run. most important of all, im waiting to collect future dividends which forms part of my source of monthly income.

then you may say why not just buy STI ETF? thats a boring alternative i wont rule out. but it all depends on your objectives

1) if possible i want to spread my dividend payouts across all months
2) i dont own real business. but this is the only chance for me, indirectly to have some interests and share of businesses
3) i want to enjoy my investment journey, ie reading company annual reports, charts, etc