Reflect on 2017 & Be Ready for 2018

My investing journey for 2017 has come to a close and I have hit my target of making at least 30% CAGR. I have had more winning bets than losing ones.

My solid bets in 2017 were / have been:

• AEM (made 174.8%, profit mostly realised)
• 800 Super (up 131.9%, profit mostly realised)
• Avi-Tech (up 72.3%, about half realised)
• Ezion W200424 (made 68.7% in 5 months)
• China Vast (6166.HK) (a paper gain of 49.8% in 5 and a half months)
• Get Nice Holdings (64.HK) (made 22% in one and a half years)
• HS H ETF (2828.HK) (a paper gain of 21.9% within 14 months)
• China Starch (3838.HK) (a paper gain of 18.7% within 4 months)
• Japfa (made 17.5% within a month)
• Hanwell (made 16.9% within 2 weeks)
• Noble (made 10.6% within 3 days)

Stocks like Emperor Capital (717.HK), CE Huada Tech (85.HK), China Saite (153.HK), Excelpoint and Federal are either down or not making much for me. I will patiently wait for Mr Market to uncover their intrinsic values.  

There are valuable lessons to be learnt for me to keep improving. The two important ones are:

Lesson 1: Have more patience to keep my multi-baggers

It can be easy to spot a multi-bagger but it is difficult to hold it all the way till it reaches almost its peak so as to clinch the greatest profit possible. It definitely calls for skills, knowledge, gumption and patience. AEM is one such stock as it has surged about 5.4 times (or an ROI of 440%), including the one-for-two bonus issue but excluding dividend, after I started my first purchase in January 2017. I divest the bulk of my position and at the close of 2017, made an ROI of only 174.8%, which, on hindsight, could have been much better if I have had just more patience to keep it before its earnings performance starts to deteriorate.  

Lesson 2: Improve on speed in spotting growth stocks

This is the area that I have been trying to improve so that I could have better diversification and that I will not miss the chance to buy growth stocks at more attractive prices. I believe I have some good results and improvement with my hard work, skills and knowledge gleaned over the years.

Most of the time, the investing journey is rather monotonous. But there is no short-cut other than working hard and adopting all the effective knowledge and skills so as to beat the rest of the market participants in this cruel arena.

Albert Einstein: “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.”
It thus makes more sense for me to make my money work hard for me and only when I meet my ROI target will I enjoy this journey.

I have also formulated my new strategies for 2018.

Strategy 1: Apply my new win-big-lose-small method

The December’s vacation has given me a clear mind to come up with a new method to increase the probability of buying win-big-lose-small stocks. From my back testing of this method, it should bring my ROI to be around 50 percent. Let’s see.  

Strategy 2: Increase my war chest

To me, the war chest has to be more than just money reserved for emergency. It has to include lots of spare cash to take advantage of extreme pessimism in the market when others are fearful. The second half of 2018 is probably the time for my war chest to be lucratively deployed.

Strategy 3: Get ready to short-sell some euphoric stocks

The gradient of a bearish decline can be 4 times that of a bullish market climb and there is a higher chance for the global markets to enter a bear market in 2018. During a crisis, shrewd investors cannot be doing nothing and just wait for the storm to be over.

I hope I have the wisdom then and have been ready to clinch the golden opportunity to short-sell some irrationally exuberant stocks and to pick up great stocks at bargain basement prices after the dust has settled and with the cues from some important leading indicators.

Conclusion

Hard work + research + knowledge + skills + patience --- these old-fashioned tenets will still be the key pillars of my investing weaponry. Successes beget more successes and I can only be more motivated. 

2018 = 饿灵要发, and I look forward to a very exciting and prosperous 2018.

Superphang
https://superphang.blogspot.sg