Wrapping Up 2014 - Turtle Portfolio
For me, it's time to stay at home and do nothing. My private lifestyle
and investment philosophy are identical. I hate crowds. For most people
silence is very frightening. They felt that they can't breathe, as if
they are trapped in a bottle sealed with vacuum. It is the opposite for
me, noises from the crowds will make me feel that I am trapped in a drum
with somebody drumming so hard trying to burst my eardrums and head.
For most people, inactive is only for birds(small brains). They think
they got to beat the index. Or only idiots will stick with risk free
investment. Sitting still makes them feel that they are trapped in a
vacuum bottle. They just can't breathe.
Turtle Investor Portfolio on the overall is very cash rich. It has risen
to RM 79 k or 95% cash. Return on capital was RM 11 k or 15%(CAGR of
3.25%). With so much cash on hand, it will be very handy during bears
hunting seasons. I am getting more excited because the bull market is
getting older and older each day.
In 2014, I bought only 1 stock for Turtleinvestor portfolio, CIMBA50.
It's an ETF that has exposure to China Stock market, it has risen by
25%. Though the exposure was small, I was happy because of my strong
convictions about China was vindicated.
Did I regret for not able to much more cash in 2014 ? Absolutely not but
I feel the opposite way. I feel rewarded for doing nothing. KLCI
closed at 1852 and as I making an entry, KLCI is around 1766 or minus
4.6% return. If we look at individual stocks, losses could be even more
glaring for those who had bought stocks this year.
Even some regarded as safe stocks like Petronas Dagangan which many
regarded it has many Buffett-like qualities company falling like a hot
knife piercing through butter, with many bleeding hands. For those think
valuation does not matter, think again. They must be licking their
wounds quietly defending themselves as long term investors. I bet if the
price were to drop another 20-25%, these long term investors will be
selling out like nobody business, then then call themselves traders who
are cutting losses.
I suddenly found many people feel their brains turbo-charged to IQ 180
talking about Black Swans. Nobody ever foresee that crude oil price can
collapse in 2014. They can draw all kind of trend lines and all kind of
technical indicators but when the trend reverse, gravity rules breaking
so many ribs in a short time. If we don't respect random walks of
markets, let's be more humble.
Even the bluest of blue chip oil and gas stock can free fall.
Let me show you another chart, our Finance sector is the process of
making a downtrend and essentially it will drag KLCI lower. Over the
last few years, the loan growth had been going into unproductive area
such as cars and funding after ever rising housing prices. May be some
will still argue that we have 83% household debt to GDP but we are also
been backed by solid assets, let's not get too negatives. Just consider
this, even I am sold with the arguments of many experts justified
reasoning of no housing bubbles but it is also a sure sign of people
have maxed out their credit. For this reason alone, we ought to leave
our mind open that housing prices can reverse direction.
Please don't get me wrong. I am not in the mood of bashing or spreading bearish views.
Rather, I find the wisdom of Warren Buffett is more apparent as time goes by.
Rule # 1 don't lose money.
Rule # 2 Refer to Rule # 1.
I find the witty side of Buffett's new wisdom, Virginity can only be
preserved and cannot be restored. So???? Don't get fuck by the markets.
My posting will continue to be infrequent until market valuations are getting more attractive.
Until then, Happy New Year!
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