Posts tagged ‘Sir John Templeton 鄧普頓爵士’

Sir John TempletonPerformance from last week on the our mentioned names is unlikely to be sustainable every week going forward!

We are going to follow Grandma’s rule, which is “eat your carrots first!”.  We will look at how the 5 names mentioned last week from worst to best:

 

Stock Closing Price (8/9) Last Closing Price (8/16) % chg
HK2777 12.84 13 +1.2%
HK1088 23.35 24.85 +6.4%
HK323 1.98 2.11 +6.6%
HK1398 4.97 5.31 +6.8%
HK1138 3.51 3.99 +13.7%

 

All positives which is good!  The non-index names (HK323 and HK1138) performed better than I expected.

Do remember that you didn’t have to pay a dime for the above picks!  That’s probably a better sign because unless our track record is stellar, people are going to be doubtful when a stranger suggest they should part way with their money. 🙂

Many of these names are being widely publicized by the local media, which can be both good and bad.  My general rule-of-thumb is that the public is usually widely attracted by the success stories published in the media, which is turn fuels more buying into those names.  Repeated publicity maybe a sign to sell.

HK1138 and HK1088 are having their financial results announced this coming week.

 

– Mr. Alpha

 

Picture from link: http://channerinvestment.com/blog/2009/11/warren-buffett-has-done-it-again/

Sir John Templeton“To buy when others are despondently selling, and to sell when others are avidly buying, requires the greatest of fortitiude, and pays the greatest ultimate reward.” – Sir John Templeton

 

I would like to re-visit this quote, and this about which industries are being despondently sold in the current market.  Which are the industries and investors do not want to touch with a 10 foot pole?

 

Shipping Industry (CHINA SHIP DEV 中海發展股份 (01138.HK))

Steel Industry (MAANSHAN IRON 馬鞍山鋼鐵股份 (00323.HK))

Coal Industry (CHINA SHENHUA 中國神華 (01088.HK))

China Real Estate (R&F PROPERTIES 富力地產 (02777.HK))

China Bank Industry (ICBC 工商銀行 (01398.HK))

 

The first 2 companies are smaller, and probably more risky, but the bottom 3 is much more established and have a lower risk of downside volatility.  By definition, stocks can only be depressed if people are selling.  There is no other reason why a stock keeps dropping.

If the quality of the company is good, then perhaps fortitude is required to execute on the buying opportunity!

– Mr. Alpha

 

Picture from link: http://channerinvestment.com/blog/2009/11/warren-buffett-has-done-it-again/

CNY HKD FX rateThe graph of CNY / HKD Foreign Exchange rate shows an interesting correlation with the Hang Seng Index returns.  The fundamental basis seems to be that if CNY strengthens against HKD, since most large companies have exposure to revenues in China and that their financials are priced in CNY, the HSI should move in a similar trend as the CNY / HKD Fx rate.  We see the bottoming out of HSI at about 18,386 which corresponds to a CNY Fx rate of about 1.216.  The graph captures the period between Feb 2012 to now.

The current HSI is at 23,092 and CNY Fx rate is at 1.2475 (Details quoted from Yahoo HK Financials)

Mind you CNY is still a controlled currency, and its liberalization is expected to be gradual.

Perhaps picking out the index names with a higher Sharpe ratio may be an interesting list.

I’d like to end with one of my favourite quotes by Sir John Templeton, who is widely known as the “Dean of Value investing”:

 

“To buy when others are despondently selling, and to sell when others are avidly buying, requires the greatest of fortitude and pays the greatest ultimate reward.”

 

– Mr. Alpha