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!
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."