Monday, July 11, 2016

Divestment Of Vibrant Group Limited And My Afterthoughts

Since I wrote about Vibrant Group Limited 9 days ago, the share price has jumped from $0.350 to $0.430 (as of 11 July 2016)!

With my Purchase Price of $0.305, I have decided to divest all of my holdings in Vibrant Group Limited at $0.420. This represent a capital gain of 37.7% over a period of 3 months!


Many may criticized me over my decision to sell it off after such a short period as I have been “promoting” myself as a long term investor.

Thus, I may be misleading my readers as I am more like a trader rather than an investor.

I like to clarify that when I put my money into a stock, the fundamental analysis I did on each stock is supposed to give me assurance against any downside in the share price. In other words, I assured myself by understanding the company and its business so that I can emotionally “protect” myself from any impulsive move that I may regret later.

Furthermore, by doing so, I invest with a long term mindset so that I will be able to endure holding onto the particular stock for a prolong period.

Nevertheless, if the share price suddenly jumped significantly, I will still sell my holdings in the company to realise the capital gain even if I only hold it for a few days. Hope that this will explain on my stand on having an “Investing” mindset.

Other than the increment in the Share price, the concerns I had in the previous post on Vibrant Group Limited still worries me, despite the huge margin of safety. I really do not like companies with huge association in China as well as companies that are highly leverage. Therefore, these factors contributed to my decision to sell as well.

Do note that Vibrant Group Limited was part of my venture into deep value stocks.

Next up, I will be writing about the performance of my venture into deep value stocks.
 
If you are thinking of looking at other less "risky" stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

I will only be releasing the Enhanced Version of the Triple S Scorecard for those that attend My 1st Sharing Session with T.U.B. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

2 comments:

  1. Hi, congrats on your divestment.
    I am wondering when you purchase a stock, do you have a profit or price target? Or jus that the stock ran up 37% over a short period, you will immediately exit? If the fundamentals have not changed from the time you first purchase, you will also just sell just because the price has ran up?

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    Replies
    1. Hi mslee888,

      Thank you for reading and commenting again.

      When I purchase the stock using this deep value investing strategy, my target is around 70% to 80% of the NAV.

      However, it also depends on the business environment at that time. If it is in a bull run, I may have hold it longer. But as per current business economy, I doubt it can hold so long. Thus, I sold it after this sudden rise.

      This is different from my Enhanced Triple S Scorecard Strategy. The stocks that pass my Enhanced Triple S Scorecard are really good fundamental stocks that I will hold for a long time.

      But these deep value stocks are to me of High Risk stocks. They are actively monitored as there could be factors that I am ultra uncomfortable about, but I may still go ahead and invest in them.

      For me, in my last post, I already explained Vibrant Group association with China is too much and the leverage is even higher. So the factors that I question when I got into Vibrant at the very initial stage just got bigger. Thus, I sold it after it rises recently.

      Maybe to enlighten you further, Vibrant rises to $0.350, 2 to 3 days after I went in at $0.305. But at that point, I think the pros outweight the cons and I decided to hold on to it.

      Eventually, I maybe wrong in selling Vibrant Group at this price as it could rise even higher. But I guess with this gain, I am satisfied.

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