Bye Bye M1 : Catching A Falling Knife

image credit to equitymaster.com




Finally, I have completely sold all my remaining share of M1 at lost of -$14,226.78 , while some might still waiting or hoping for a better counter-offer from another major shareholder. Yes, it is a negative XIRR of -5.5% after close to 4 years of investing.
Have to admit that I have underestimated the impact of "regulatory risk " after the government announced the new permit for 4th Telco and the subsequent disruption from severe "price war" not even the start of operation of 4th Telco.  The share price of all the Telco dropped by more than 40-50% from the peak since after the announcement of possible 4th telco in 2015 and confirmation of successful bidding of NESA from TPG Telecom of Australia in Dec 2016.




The strategy of "Averaging down " simply doesn't work here and the price not "reverting to mean " at all, till now. As a result, I lost total -$16,633 ( including dividend ) in investing in both M1 and StarHub.






Well, as consolation, I made some money from KSH as below, not be able to cover all the losses from investing in both telcos but could at lease fell happy on this small wining. :D

As I always mentioned, not all investment you made will turn out to be profitable, also, buying a stock which the price been hammering down doesn't warrant your wining as you may have " caught a falling knife " where the price will never recover and cheap become cheaper eventually.

Also, it’s important to note that losses are an inescapable aspect of investing. Certainly, even great investor like Warren Buffett ever made lost in his investment portfolio but the point here is if the "loss " is manageable vs overall portfolio. Incurring "big loss "  to a very concentrated portfolio will be a disaster hard to recover in the later stage. I am more on a "kiasu and kiasi " side that having a more diversified portfolio.




2018 is ending soon and most probably STI will end up in the negative territory. With higher Beta , my portfolio performs worse than STI. STE's portfolio is down by -8.4% ( including dividend ) while STI is down by -8.2% ( excluding dividend ) as of writing. Some of my small-cap holding (eg. Sarine Tech/ TTJ Holding/ Avi_Tech/ Duty-Free) were all down by double-digit % which might be one of the reason for my portfolio to perform worse than STI.

Last year STE  managed to outperformed market by 6% point (including dividend ) while this year will be a totally different story. With such a volatile and bumpy market, I am sure not many will be able to perform better than Index this year.


How about you? manage to outperform the market!


 Cheers !



 Quote Of The Day :


"The counter-intuitive point for many investors to keep in mind is that investment risk isn’t about how much can be gained; it’s about how much can be lost."





Comments

  1. CreateWealth88887 December 2018 at 16:21

    You have shown the truth of real investing on the ground as one day we will have losses on some counters.

    It is unavoidable.

    Compounding investment return can be negative so our risk management and position sizing is critical to our investment portfolio outcome and success

    ReplyDelete
    Replies
    1. STE7 December 2018 at 19:46

      Hi Uncle CW8888,
      Thanks for the comments , yes , risk management and position sizing is key and also keeping war-chest ready to buy during crisis is another key...but again , easy said than done, who dare to buy during "crisis " :D
      Cheers !!

      Delete
  2. v3nus8 December 2018 at 08:40

    Thanks for sharing! I am also holding M1 at a loss of 10%. Was wondering since you had held M1 since 2014, why not wait for a better offer since it's most likely to go private?

    ReplyDelete
    Replies
    1. STE13 December 2018 at 10:45

      Hi v3nus,
      Thanks for the comments. Yah, for sure M1 will be privatized at 2.06 and everyone seems hope for better offer including me initially. As I would like to channel my fund to other investment , so I have decided to let go M1. With limited fund and since I don not want to use my war-chest , I would have to make some adjustment within my current portfolio.
      Cheers !! :D

      Delete
  3. Cory22 December 2018 at 12:48

    Every year I need to constantly look for the "Land Mines", And often there will be one or a few . Just have to contain it and we will do it well in the long run. That's me so far.

    ReplyDelete
    Replies
    1. STE23 December 2018 at 13:46

      Hi Cory
      Yah . Guess such 'land mines' is unavoidable for all the investors but as you said so long as we are not overexposed and more good than bad in the long run, it should be fine .
      Hope 2019 will be a better year for all of us.
      Cheers :D

      Delete

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