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Tuesday, July 17, 2007

Acid test 1H07: Stock Performance 0 comments

(P.S: Click on the pictures to get a better view)
My semi-annual review of my hotstocknot picks. As before, I review two lists of the stocks: the more recent picks from Nov 2006-Apr 2007, labelled 1H07 Assessment, and the picks slightly further back from Jul-Oct 2006, labelled 2H06 Assessment. This constitutes my half-to-one-year medium-term horizon where I typically judge the performance of my picks.

As before, the mark of excellence is the 20% threshold for half-year comparisons (1H07), it becomes 40% for full-year comparison (2H06). As before, I concentrate on total return --- the price plus incorporation of all dividends during the period in question, as well as any stock splits/bonuses.

Assessment of 1H07 stock picks

1H07 Summary
Blue: 3 stocks
Green: 2 stocks
Yellow: 3 stocks
Red: 6 stocks

Given that the blue-chip (and hence slower-moving) STI has risen 20% from the start of 2007, while the SESDAQ has approximately doubled, I won't be too hard on myself here. So I have 6 bad hotstocknot picks (in Red); but out of these, I would still think I have made relatively good contrarian calls in Guthrie, Amara and Auston because their momentum has lagged significantly since, though I have failed to appreciate the strong sustained institutional interest in Banyan Tree and the seemingly uncontested structural steelworks niche of Yongnam. As for Sitra ... suffice to say that this is a sleeper hit which I don't know where it is coming from.

Indeed, I'd rather take pride in the other calls, seeing that anything below 20% gain for this half-year is a significant underperformance to the rest of the market. In particular, my "good picks" would be Osim, GemsTV, Luzhou Biochem; things have panned out exactly as I'd seen they would.

Assessment of 2H06 stock picks

2H06 Summary
Blue: 0 stocks
Green: 4 stocks
Yellow: 7 stocks
Red: 6 stocks

Remember that the threshold return for colour coding is set at +/- 40% since this stocklist is further back.

I am inclined to be a bit harder on myself for this batch of picks. That's because over the course of one year the supposedly unfavourable valuation/fundamentals (according to me) should have weighed into the prices, so if they didn't then I'm wrong. Furthermore, I remember that in the last review (in early 2007) this batch of hotstocknot picks was quite unsatisfactory as well. My major inadequacies were in Federal, Ezra and Yanlord.

But on the whole, not too bad, given that there are many green and yellow stocks (ie. below 40% gain/loss), for a banner year starting from post-correction July 2006 till now. I am particularly proud of my views in Thai Beverage, China Sun, China Precision, Ipco and Eucon where I have been vindicated by corporate developments subsequent to my hotstocknot calls.

All in all, I've enjoyed doing the background research for these articles and I've gained from the work personally. It's been hectic this year and I've done less articles but they will still be coming.




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