Whatever the decision is, it depends on the timing of the sale and a small investor like me would tend to attribute it to luck. Some savvy big shot investors would smirk and call this kind of transaction pure speculation.
Fortunately I left some shares in THPLANT and UNICO which are actually small caps among the plantation counters but they turn out an exciting climb especially the former which posted quick gain to surpass 2.00 before end 2010. Imagine that it had pitifully gone down to 1.47 early in 2010! The dormancy of the plantation counters for nearly two years from the point of the global financial crisis in 2008, made me very anxious to get rid of them at the very moment their price showed any indication of going up. And that, my friend, is the mistake many unseasoned investors make.
Having read some very sensible articles from wealth creation blogs especially from across the Causeway, I managed to balance my investing behaviour. One of the things that I learnt is that not to dispose of everything in your porfolios when the BEAR is sauntering in. Leave some as you need them to ride the BULL when it comes by. If you take them all out, then you have nothing to ride! Sensible indeed. I should have read the advice before I disposed of my MHC, SWKPLNT and KWANTAS. Anyway, my two plantation counters are riding at the moment.
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| Rising CPO price driving up plantation stocks |
Yes, the CPO price is set to go higher as the demand especially by the two economic and consumer giants, India and China is set to increase. And it seems that due to La Nina effect causing heavy rainfall in parts of the world including us in South East Asia, the oil output will be affected causing a tight supply and not only that ( our fortune is someone else misfortune!), the weather pattern is also causing a drop in soybean output in South America, so palm oil will be the alternative for consumers. It is expected that this plantation stocks' uptrend will continue in the medium term till the middle of 2011. There you have it, ride the bull till it stops to catch its breath.
The reason I went big time for the plantation stocks in early 2008 was that these are the companies which "produce,market and profit" from the blood and sweat of the agro industry unlike finance stocks such as OSK, BURSA, MAYBANK, MANULIFE etc. But on the contrary, the finance stocks recovered much earlier and by much higher than the "product-based" stocks. Plantation stocks lingered like sick turtles while its finance counterparts were having quantum leaps, a good example is Bursa which went from the low 4.00 in late 2008 to a high 8.66 in November 2010! UNICO, on the other hand was about 0.50 in late 2008 and stayed at 0.98 for the better part of 2010. How unfair! Trying to invest on principle is not always the best strategy though I will still not buy those gaming stocks come what may.
So for this year onwards I am going into the finance stocks by selling off my agro stocks and other laggards and terribly slow coach like PICORP ( but keeping my TELCOS for regular high dividends as they churn out telecommunication services to their million of customers and earning good profit). Though most of the attractive finance stocks are already high, you just have to catch them when when they hit a low.
In the meantime, my remaining plantation stocks are riding the bull and will stop when my target is reached which I believe will be sooner than expected. I will not be greedy as I've also subscribed to a pearl of wisdom, that is, you should not hang on to your high performance stock too long, get out and leave some on the table for others to partake. For instance if I had made 2.00 per share, I should not wait till it goes to 4.00 per share though it very well will be, so that some other investors will make another 2.00 per share as well. So sharing the wealth is the best way of making this world a better place for all of us.
I hope those who are hanging on to the rising finance stocks will do the same :)
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