We had timed our Huanxi Media article to be released just before the Chinese New Year (CNY).
Unlike previous ideas where subscribers have been able to have ample time (1 - 2 months) to read the email, look at the share price and then even maybe read the annual reports, the share price had exploded on the upside after CNY.
No credit on our side for we only have a couple of paying subscribers. The investing community just enamored to the CNY article by SCMP and the wonderful numbers from the box office.
Huanxi Media is a beloved production house with multiple hit movies and directors under its belt. No wonder, retail investors lap it up like fish to water.
Coupled with the inflow of money from China, the Hongkong market had been boom time for many investors (except for yesterday).
Unlike uncle Warren Buffett who invest with conviction, we have a more moderate view of our intelligence and tend to inch ourselves into a significant position.
Despite Huanxi Media going up by 78%, we are still far off from our intended position sizing when we first purchased a stake in the company. That tell you how slow we move.
Slowness has it advantages for mistake tend to be small and not portfolio threatening. For buying of shares, we prefer the tortoise approach. As for selling we prefer the hare (very fast and then go to sleep).
We often like to buy when the share price is going up and with news confirming to us that we are right. But with everything on a tear, waiting for news flow seem like waiting for paint to dry. Time is really a relative concept.
We are in the midst of writing a series of articles on leisure related companies when all of them went up significantly even before our ink started or dries.
Look at AirAsia for the past few days. We had put a stop to the article writing until the share price starts to retreat back to a more desirable price range. We started writing at MYR 0.68.
It is either we are really timing our purchases so well or the companies we had bought are reacting strongly to recent news flow.
We believe it is the latter for our timing had always been poor. Our belief is that the investors or speculators are looking at what had been published in the traditional news outlet and rushing to buy without a consideration on valuation. If the prospect looks right, that makes it a buy!
Simple heuristics can be good predictor of human behaviour for specified period of time. Barron published a bull article on Oracle on the 19th Feb (Friday) and the share price is up by USD 2 on 22nd Feb (Monday)!
It seems the old adage of “buy on the rumour sell on the news” should now be “buy on the news and never sell”?
Psychology of the market aside, we wanted to be more accountable to our paying subscribers. Since prices are so volatile, we thought that we should disclose our positions on a weekly basis.
You will get to see the full portfolio with position which we had not put our pen on.
The value of the newsletter will still reside with the investment articles. If any of our investment research tend to overlap, please reach out and we would be keen to swap notes.
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