djshagggyd (85.20)

7 Comments – Post Your Own

#1) On March 26, 2010 at 10:29 AM, arisktaker (83.72) wrote:

You must have seven stock picks open to keep your score posted.  When you open the seventh one it will come back as it was.

I know nothing about CHNG.  

China is a little like the wild west.  Analysts will tell you that the government numbers can't be trusted.  The companies may not be following the same accounting rule as the US.  You are talking about investing a significant amount of your portfolio.  You need to think about how this fits in with your other investments.  If it is the only thing that will fit in the a risk category then you are probably OK.  If you have a lot of other risk investment them you should be thinking which of them do you want to sell to buy this.  You should do this everything you consider buying something.

I have invested in China through targeted mutual funds.  Less risk but fewer home runs.  These are not as risky so they leave me free to play with my risk money.

There are various formulas for limiting your overall risk.  I try to follow 10% in cash or cash equivalents; 50% in safe investments (real estate, blue chip stocks & mutual funds, etc.); 30% in targeted mutual funds and companies that I follow closely and feel are fairly safe but the markets may rate otherwise; and 10% in higher risk investments.  I try to never to invest more than 5% of my net worth in any single thing.

I am pretty comfortable with this and, for the way I invest, it has served me well over the years.  I would suggest developing one that works for you.  

Have patience, don’t be in a hurry to buy or sell.  Twice I have seen when you have a loss you are happy to sell when the loss is reduced or you break even.  Stocks are going to move in both directions.  They rarely move straight up or down.  When stocks get momentum in a direction, over time they generally continue to move in that direction.  News and market direction will effect the move or complete change the direction.  You make money by not being in such a hurry.  

 

 

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#2) On March 26, 2010 at 12:29 PM, facingwinter (46.94) wrote:

I have CHNG as a caps pick, don't have real money in it though. Nice chart!

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#3) On March 26, 2010 at 1:47 PM, djshagggyd (85.20) wrote:

Thankyou Risk Taker!

As always, your advice seems very sound. I think you're right that I need to be more patient.

The stocks I recently sold at a loss (TSTR, GRH, and CONN's) were all picks that I made when I was less educated... once I realized the situation that those companies were in... and the risk that it involved... I decided that it was probably best to move my money into something more productive and less risky. I tried not to do it too hastily though... I came up with an exit plan... and I stuck to it. I didn't feel good about selling the stocks at a loss, but I felt good about sticking to the plan. And I also felt confident that I could find somewhere better to invest those dollars.

I know I've had a lot of beginners luck... but so far I've managed a 26% return on my portfolio which seems pretty decent. It has involved a good amount of risk... but I think that's okay for someone like me. I have a stable, good job, no family, and I'm in my mid 20's... so there's room for error.

At the same time... my portfolio is my "life-savings". I don't have money anywhere else. So I definitely don't want to be an idiot about it. Which is why I very much appreciate all the advice from you and other fools. Without you guys I would be way behind where I am right now.

As it stands... I am not in a big hurry to reinvest this money. I'll keep researching until I find something that I feel comfortable with.. and something that fits well with the other stocks in my portfolio. 

I took a close look at the restaurant industry and didn't find much I liked there. Now I am comparing 3 different Chinese stocks versus their industry competitors. I'm hoping one of the 3 Chinese stocks will be a good fit. If not... I'll move on to a different industry. (I was thinking about researching mines and/or refiners next).

Anyway... I realize this a really long (and possibly boring) reply...

But since I've already rambled this long, I'm going to continue... haha...

Here is what my portfolio looks like right now:

Cash 28% (because I sold-off CONN, TSTR, & GRH)

GE 22%

ATVI 8.5%

GXDX 8.5%

INTC 4%

IPHS 13%

KAR 16%

 

I feel like putting 10% towards a Chinese utility like CHNG would be fitting because it would diversify me into the energy sector and  the Chinese market at the same time. And it would still leave me with 18% Cash in case of a market pullback.

I understand what you are saying about the risk involved with the Chinese market though... so I am re-evaluating things a little bit. You certainly give me great things to think about! I appreciate it very much.

Thanks again Risk Taker (and anyone else who read this long, rambling, reply!)

Hope you have a great weekend!

~djshagggyd

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#4) On March 26, 2010 at 1:58 PM, facingwinter (46.94) wrote:

btw, in case you didn't notice CHNG is down 3.25% today. So if it you are going to buy, it could be a good day for it. But at the same time I agree with comment 1 about patience. Good luck!

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#5) On March 26, 2010 at 3:51 PM, djshagggyd (85.20) wrote:

Thanks facingwinter,

I saw this today too in case you're interested:

"China Natural Gas is currently below its 50-day moving average of $10.15 and below its 200-day moving average of $10.60. Look for these moving averages to decline to confirm the company's downward momentum."

That's from a "SmartTrend" note on Scottrade... released today.

Have a good weekend,

~djshagggyd

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#6) On March 28, 2010 at 3:38 PM, djshagggyd (85.20) wrote:

Hey Risk Taker-

I really liked your idea of having mutual funds which include Chinese companies, rather than owning shares of a single stock.

I know it's not the same as mutual funds... but how do you feel about ETFs? I was thinking that I may be able to accomplish the same goal by purchasing some quality ETFs.

I didn't find a whole lot of Chinese ETFs that I like, but I did find these two which are also in emerging markets and fit the idea of what I was looking for:

EPI Widom Tree India Earning Fund

VEU Vanguard All World ex-USA

I was able to find some great commentary on EPI in Cato's blog: click here to read.

VEU also seems to be highly rated among CAPS members.

So of the 28% I have available...I was thinking of putting 9% into  EPI, 9% into VEU and leaving 10% in cash until I find a stock I like. 

I am about 20 pages in on "the Intelligent Investor"... and I figure ETF's are a good option for me until I finish the book, gain more knowledge, and increase my skill.

I realize there's a good chance you might not see this... but I wanted to get my thoughts out there.

Hope you're having a good weekend,

~djshagggyd 

 

 

 

 

 

 

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#7) On March 29, 2010 at 9:28 AM, arisktaker (83.72) wrote:

You did well with that return especially for someone just starting out.    However, if you invested in sound stocks after March of 2009 it was pretty hard not to make money.  Don't expect that kind of return in the future without a lot of research and a good amount of luck.

With all the unknowns throughout the world, I have felt that focusing on a single country would not be the right approach for me. For investing outside the US, I have some money in JAOSX which I purchased in June 2009.  It has returned about 29% since then.  The full year the return was 91%.  Not a recommendation just another thing to look at.

 By the way a 26% return on investment each year for 30 years will turn $1000 into over $1,000,000.  

 

 

 

 

 

 

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